Certain Ammonium Nitrate From Ukraine

Investigation No. 731-TA-894 (Review)

Publication 3924 June 2007

Washington, DC 20436
U.S. International Trade Commission

COMMISSIONERS

Daniel R. Pearson, Chairman

Shara L. Aranoff, Vice Chairman

Deanna Tanner Okun

Charlotte R. Lane

Irving A. Williamson

Dean A. Pinkert

Robert A. Rogowsky

Director of Operations

Staff assigned

Cynthia Trainor, Investigator

Raymond Cantrell, Industry Analyst

Gerald Benedick, Economist

Charles Yost, Accountant

Mark Rees, Attorney

Lemuel Shields, Statistician

George Deyman, 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 Ammonium Nitrate From Ukraine

Investigation No. 731-TA-894 (Review)

Publication 3924 June 2007

i

CONTENTS

Page

Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I

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

Part I: Introduction and overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

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

The original investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

Previous investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2

Summary data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2

Statutory criteria and organization of the report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5

Commerce’s results of expedited review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6

Commerce’s administrative reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7

Distribution of Continued Dumping and Subsidy Offset Act funds . . . . . . . . . . . . . . . . . . . . . . . I-7

The subject product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7

U.S. tariff treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8

Physical characteristics and uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8

Manufacturing processes and channels of distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10

Domestic like product issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-11

U.S. market participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12

U.S. producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12

U.S. importers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-15

U.S. purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-15

Apparent U.S. consumption and market shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-15

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

Channels of distribution and market characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

Supply and demand considerations ................................................ II-8

U.S. production ............................................................ II-8

Subject import supply from Ukraine ............................................ II-10

Nonsubject imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-12

U.S. demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-13

Foreign demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-26

Substitutability issues .......................................................... II-27

Factors affecting purchasing decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-27

Comparison of the U.S.-produced and imported HDAN ............................. II-28

Purchaser sourcing patterns ................................................... II-31

Elasticity estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-34

U.S. supply elasticity ........................................................ II-34

U.S. demand elasticity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-34

Substitution elasticity ....................................................... II-34

Part III: Condition of the U.S. industry ............................................ III-1

U.S. producers’ capacity, production, and capacity utilization .......................... III-1

Changes in character of operations and capacity projections . . . . . . . . . . . . . . . . . . . . . . . . . III-3

U.S. producers’ domestic shipments, company transfers, and export shipments ............. III-3

U.S. producers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-5
ii

CONTENTS

Page

Part III: Condition of the U.S. industry–(Continued)

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

U.S. producers’ employment, wages, and productivity ................................ III-6

Effects of hurricanes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-7

Financial experience of U.S. producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-7

Background ............................................................... III-7

Operations on HDAN ....................................................... III-9

Variance analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-10

Assets and return on investment ............................................... III-11

Capital expenditures and research and development expenses ........................ III-12

Part IV: U.S. imports, the world market, and the industry in Ukraine . . . . . . . . . . . . . . . . . . . IV-1

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

U.S. importers’ imports subsequent to December 31, 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-3

U.S. importers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-3

The world market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-3

The industry in Ukraine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-3

Ukraine’s capacity, production, capacity utilization, home market shipments, 

export shipments, and inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-4

Trade restrictions in third-country markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-11

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

Factors affecting pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

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

Transportation costs to the U.S. market and tariff rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-3

U.S. inland transportation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-4

Exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-4

Pricing practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-5

Price data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-7

U.S. producer questionnaire price data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-7

Price comparisons within the U.S. market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-9

Price comparisons between U.S. and non-U.S. markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-12

Public U.S. price data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-13

Appendixes

A. Federal Register notices and the Commission’s statement on adequacy . . . . . . . . . . . . . . . . . . A-1

B. Calendar of the public hearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

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

D. Comments on the significance of the existing antidumping duty order

 and the likely effects of revocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1

E. Census data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-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.
 1

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

UNITED STATES INTERNATIONAL TRADE COMMISSION

Investigation No. 731-TA-894 (Review)

CERTAIN AMMONIUM NITRATE FROM UKRAINE

DETERMINATION

On the basis of the record1

 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)) (the Act), that revocation of the antidumping duty order on certain

ammonium nitrate from Ukraine 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 August 1, 2006 (71 F.R. 43516) and determined on

November 6, 2006 that it would conduct a full review (71 F.R. 67366, November 21, 2006). 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 December 15, 2006 (71 F.R.

75579). The hearing was held in Washington, DC, on April 17, 2007, and all persons who requested the

opportunity were permitted to appear in person or by counsel.

 1

 Certain Ammonium Nitrate from Ukraine, Inv. No. 731-TA-894 (Final), USITC Pub. 3448 (Aug. 2001)

(original investigation). The Commission also investigated imports of ammonium nitrate in Certain Ammonium

Nitrate From Russia, Inv. No. 731-TA-856 (Final), USITC Pub. 3338 (Aug. 2000) (affirmative determination), and

in the five-year review in that case, Certain Ammonium Nitrate from Russia, Inv. No. 731-TA-856 (Review), USITC

Pub. 3844 (Mar. 2006) (affirmative determination) (Russia review). 

 2

 66 Fed. Reg. 47451 (Sept. 12, 2001).

 3

 71 Fed. Reg. 43516 (Aug. 1, 2006).

 4

 In five-year reviews, the Commission initially determines whether to conduct a full review (which would

include a public hearing, the issuance of questionnaires, and other procedures) or an expedited review. In order to

make this decision, the Commission first determines whether individual responses to the notice of institution are

adequate. Next, based on those responses deemed individually adequate, the Commission determines whether the

collective responses submitted by two groups of interested parties – domestic interested parties (such as producers,

unions, trade associations, or worker groups) and respondent interested parties (such as importers, exporters, foreign

producers, trade associations, or subject country governments) – demonstrate a sufficient willingness among each

group to participate and provide information requested in a full review. If the Commission finds the responses from

both groups of interested parties adequate, or if other circumstances warrant, it will determine to conduct a full

review. See 19 C.F.R. § 207.62(a); 63 Fed. Reg. 30599, 30602-05 (June 5, 1998).

 5

 Since 2005, domestic interested parties El Dorado and Terra have been the only domestic producers of

ammonium nitrate in operation. 

 6

 71 Fed. Reg. 67366 (Nov. 21, 2006). See Confidential Staff Report, INV-EE-051 (May 16, 2007) (CR) and its

public version (PR) at App. A (Explanation of Determination on Adequacy).

3

VIEWS OF THE COMMISSION

Based on the record in this five-year review, we determine under section 751(c) of the Tariff Act

of 1930, as amended (the Act), that revocation of the antidumping duty order on certain ammonium

nitrate from Ukraine would be likely to lead to continuation or recurrence of material injury to an industry

in the United States within a reasonably foreseeable time. 

I. BACKGROUND

On August 23, 2001, the Commission made an affirmative determination that an industry in the

United States was being materially injured by reason of imports of ammonium nitrate from Ukraine.1

 On

September 12, 2001, Commerce issued an antidumping duty order on subject imports from Ukraine.2

 

On August 1, 2006, the Commission instituted the present review, pursuant to section 751(c) of

the Act, to determine whether revocation of the antidumping duty order on ammonium nitrate from

Ukraine would be likely to lead to continuation or recurrence of material injury within a reasonably

foreseeable time.3 4

The Commission received four substantive responses to the notice of institution. The Committee

for Fair Ammonium Nitrate Trade (COFANT) filed a response on behalf of two domestic producers of

subject ammonium nitrate, El Dorado Chemical Co. (El Dorado) and Terra Industries Inc. (Terra).5

Ukrainian producers CJSC Severodonetsk Azot Assoc. (Severodonetsk) and OJSC Azot (Azot) also filed

responses, as did the Trade and Economic Mission of Ukraine, Embassy of Ukraine to the United States

of America (Ukraine Embassy) (collectively, Ukrainian Respondents). 

 On November 6, 2006, the Commission found that the domestic interested party group response

and the respondent interested party group response were adequate. The Commission therefore determined

to conduct a full review.6
 7

 19 U.S.C. § 1677(4)(A).

 8

 19 U.S.C. § 1677(10). See Nippon Steel Corp. v. United States, 19 CIT 450, 455 (1995); Timken Co. v. United

States, 913 F. Supp. 580, 584 (Ct. Int’l Trade 1996); Torrington Co. v. United States, 747 F. Supp. 744, 748-49 (Ct.

Int’l Trade 1990), aff’d, 938 F.2d 1278 (Fed. Cir. 1991). See also S. Rep. No. 249, 96th Cong., 1st Sess. 90-91

(1979).

 9

 71 Fed. Reg. 70508 (Dec. 5, 2006).

 10 66 Fed. Reg. 38632 (Jul. 25, 2001). 

 11 We will refer to the product in this opinion as ammonium nitrate or, as in the Report, HDAN.

 12 CR at I-10-I-12, PR at I-8-I-10.

 13 USITC Pub. 3448 at 5.

 14 COFANT Prehearing Brief at 5-7. Ukrainian Respondents did not file briefs or participate in the hearing.

4

II. DOMESTIC LIKE PRODUCT AND INDUSTRY

A. Domestic Like Product

In making its determination under section 751(c), the Commission defines the “domestic like

product” and the “industry.”7

 The Act defines the “domestic like product” as “a product which is like, or

in the absence of like, most similar in characteristics and uses with, the article subject to an investigation

under this subtitle.”8

Commerce has defined the scope of the review as 

solid, fertilizer grade ammonium nitrate (“ammonium nitrate” or “subject merchandise”)

products, whether prilled, granular or in other solid form, with or without additives or coating,

and with a bulk density equal to or greater than 53 pounds per cubic foot. Specifically excluded

from this scope is solid ammonium nitrate with a bulk density of less than 53 pounds per cubic

foot (commonly referred to as industrial or explosive grade ammonium nitrate).9

The scope thus remains unchanged from the original investigation and excludes low-density ammonium

nitrate (also referred to as LDAN) for industrial/explosive uses and liquid ammonium nitrate.10 Subject

ammonium nitrate (also referred to as high-density ammonium nitrate, or HDAN)11 is a dry, solid

agricultural fertilizer that contains approximately 34 percent nitrogen by weight. The product is fast

acting because its nitrate form is an immediate source of plant-available nitrogen, while its ammonium

form is converted more slowly to nitrate in the soil and continues to feed the plant for a relatively

prolonged period. It is popularly used for direct application to the soil surface on pasture grass and for

hay production in the warmer, more humid southern-tier regions of the United States where rapid growth

and protein development are paramount for the feeding of cattle and nitrogen losses to the atmosphere via

volatilization are minimized. HDAN is also popular for direct soil-surface application to vegetable and

citrus crops where multiple crops are produced and rapid growth is important and to traditional crops such

as corn, wheat, cotton, milo, and tobacco that may be cultivated under “no-till” applications (that is, on

acreage that is not plowed).12 

In the original investigation, the Commission found a single domestic like product co-extensive

with the subject merchandise: fertilizer-grade ammonium nitrate products with a bulk density equal to or

greater than 53 pounds per cubic foot.13 No party to this review takes issue with the Commission’s

domestic like product definition from the original investigation, and COFANT argues that the

Commission should continue to find a single domestic like product co-extensive with the scope.14 The

record contains no information that would warrant a departure from the definition from the original
 15 CR at I-14-I-16, PR at I-11-I-12.

 16 This is also the same definition that the Commission applied in the Russia review, USITC Pub. 3844 at 5.

 17 19 U.S.C. § 1677(4)(A). 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, provided that adequate production-related activity is conducted

in the United States. See United States Steel Group v. United States, 873 F. Supp. 673, 682-83 (Ct. Int’l Trade

1994), aff’d, 96 F.3d 1352 (Fed. Cir. 1996).

 18 USITC Pub. 3448 at 5.

 19 No related party issues are presented under section 771(4)(B) of the Act. That provision allows the

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

to an exporter or importer of subject merchandise or that are themselves importers. 19 U.S.C. § 1677(4)(B).

 20 19 U.S.C. § 1675a(a).

 21 Statement of Administrative Action, H.R. Rep. No. 103-316, vol. I (SAA), at 883-84 (1994). The SAA states

that “[t]he likelihood of injury standard applies regardless of the nature of the Commission’s original determination

(material injury, threat of material injury, or material retardation of an industry). Likewise, the standard applies to

suspended investigations that were never completed.” SAA at 883. 

 22 While the SAA states that “a separate determination regarding current material injury is not necessary,” it

indicates that “the Commission may consider relevant factors such as current and likely continued depressed

shipment levels and current and likely continued [sic] prices for the domestic like product in the U.S. market in

(continued...)

5

investigation.15 Accordingly, we define a single domestic like product consisting of all ammonium

nitrate, corresponding to the scope.16 

B. Domestic Industry

Section 771(4)(A) of the Act defines the relevant domestic industry as the “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.”17 In the original

investigation, the Commission defined the domestic industry as all domestic producers of the domestic

like product.18 COFANT’s response to the notice of initiation expressed concurrence with that definition,

and no party raised objections to the definition from the original investigation. Consistent with the

original determination and our definition of the domestic like product in this review, we define the

domestic industry as all producers of subject ammonium nitrate.19

III. LIKELIHOOD OF CONTINUATION OR RECURRENCE OF MATERIAL INJURY IF

THE ANTIDUMPING DUTY ORDER IS REVOKED

A. Legal Standard In A Five-Year Review

In a five-year review conducted under section 751(c) of the Act, Commerce will revoke an

antidumping duty order unless: (1) it makes a determination that dumping is likely to continue or recur,

and (2) the Commission makes a determination that revocation of antidumping duty order “would be

likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.”20

The Statement of Administrative Action states that “under the likelihood standard, the Commission will

engage in a counter-factual analysis; it must decide the likely impact in the reasonably foreseeable future

of an important change in the status quo – the revocation or termination of a proceeding and the

elimination of its restraining effects on volumes and prices of imports.”21 Thus, the likelihood standard is

prospective in nature.22 The U.S. Court of International Trade has found that “likely,” as used in the
 22 (...continued)

making its determination of the likelihood of continuation or recurrence of material injury if the order is revoked.” 

SAA at 884.

 23 See NMB Singapore Ltd. v. United States, 288 F. Supp. 2d 1306, 1352 (Ct. Int’l Trade 2003) (“‘likely’ means

probable within the context of 19 U.S.C. § 1675(c) and 19 U.S.C. § 1675a(a)”), aff’d without opinion, 05-1019 (Fed.

Cir. Aug. 3, 2005); Nippon Steel Corp. v. United States, Slip Op. 02-153 at 7-8 (Ct. Int’l Trade Dec. 24, 2002)

(same); Usinor Industeel, S.A. v. United States, Slip Op. 02-152 at 4 n.3 & 5-6 n.6 (Ct. Int’l Trade Dec. 20, 2002)

(“more likely than not” standard is “consistent with the court’s opinion”; “the court has not interpreted ‘likely’ to

imply any particular degree of ‘certainty’”); Indorama Chemicals (Thailand) Ltd. v. United States, Slip Op. 02-105

at 20 (Ct. Int’l Trade Sept. 4, 2002) (“standard is based on a likelihood of continuation or recurrence of injury, not a

certainty”); Usinor v. United States, Slip Op. 02-70 at 43-44 (Ct. Int’l Trade July 19, 2002) (“‘likely’ is tantamount

to ‘probable,’ not merely ‘possible’”).

 24 For a complete statement of Commissioner Okun’s interpretation of the likely standard, see Additional Views

of Vice Chairman Deanna Tanner Okun Concerning the “Likely” Standard in Certain Seamless Carbon and Alloy

Steel Standard, Line and Pressure Pipe from Argentina, Brazil, Germany, and Italy, Inv. Nos. 701-TA-362 and 731-

TA-707-710 (Review) (Remand), USITC Pub. 3754 (Feb. 2005).

 25 Commissioner Lane notes that, consistent with her views in Pressure Sensitive Plastic Tape from Italy, Inv.

No. AA1921-167 (Second Review), USITC Pub. 3698 (June 2004) at 15-17, she does not concur with the U.S. Court

of International Trade’s interpretation of “likely” but she will apply the Court’s standard in this review and all

subsequent reviews until either Congress clarifies the meaning or the U.S. Court of Appeals for the Federal Circuit

addresses the issue. 

 26 19 U.S.C. § 1675a(a)(5).

 27 SAA at 887. Among the factors that the Commission should consider in this regard are “the fungibility or

differentiation within the product in question, the level of substitutability between the imported and domestic

products, the channels of distribution used, the methods of contracting (such as spot sales or long-term contracts),

and lead times for delivery of goods, as well as other factors that may only manifest themselves in the longer term,

such as planned investment and the shifting of production facilities.” Id.

 28 19 U.S.C. § 1675a(a)(1).

 29 19 U.S.C. § 1675a(a)(1). The statute further provides that the presence or absence of any factor that the

Commission is required to consider shall not necessarily give decisive guidance with respect to the Commission’s

determination. 19 U.S.C. § 1675a(a)(5). While the Commission must consider all factors, no one factor is

necessarily dispositive. SAA at 886.

6

sunset review provisions of the Act, means “probable,” and the Commission applies that standard in fiveyear reviews.23 24 25

The statute states that “the Commission shall consider that the effects of revocation or

termination may not be imminent, but may manifest themselves only over a longer period of time.”26

According to the SAA, a “‘reasonably foreseeable time’ will vary from case-to-case, but normally will

exceed the ‘imminent’ timeframe applicable in a threat of injury analysis [in antidumping

investigations].”27

Although the standard in a five-year review is not the same as the standard applied in an original

antidumping investigation, it contains some of the same fundamental elements. The statute provides that

the Commission is to “consider the likely volume, price effect, and impact of imports of the subject

merchandise on the industry if the orders are revoked or the suspended investigation is terminated.”28 It

directs the Commission to take into account its prior injury determination, whether any improvement in

the state of the industry is related to the order or the suspension agreement under review, whether the

industry is vulnerable to material injury if the suspended investigation is terminated or the suspension

agreement is terminated, and any findings by Commerce regarding duty absorption pursuant to 19 U.S.C.

§ 1675(a)(4).29
 30 19 U.S.C. § 1675a(a)(4).

 31 USITC Pub. 3448 at 6.

 32 USITC Pub. 3448 at 7 & n.27.

 33 USITC Pub. 3448 at 7.

 34 USITC Pub. 3448 at 7-8. Apparent U.S. consumption by volume was lower in interim 2001 than in interim

2000; by value it was higher in interim 2001 than in interim 2000. 

 35 USITC Pub. 3448 at 8-9.

 36 USITC Pub. 3448 at 9.

 37 Commerce published its preliminary affirmative determination on January 7, 2000, and suspended liquidation

on imports of ammonium nitrate from Russia. On May 19, 2000, Commerce entered into a suspension agreement

(continued...)

7

B. Conditions of Competition and the Business Cycle

In evaluating the likely impact of the subject imports on the domestic industry, the statute directs

the Commission to consider all relevant economic factors “within the context of the business cycle and

conditions of competition that are distinctive to the affected industry.”30

Original Investigation. The Commission identified several conditions of competition and aspects

of the business cycle as relevant to its analysis. The Commission found that ammonium nitrate is a

commodity product, without readily identifiable variations or grades.31 The Commission found that

ammonium nitrate is distinguished from the other nitrogen-based fertilizers by its fast action, good

solubility, and low volatility at ambient temperatures. The Commission further found that competition

with other nitrogen-based fertilizers did not explain ammonium nitrate pricing in the U.S. market. 

Exogenous factors – such as seasonal demand patterns and other downstream demand factors such as

acreage planted, crop prices, and farm income – appeared to affect the overall fertilizer market, although

individual nitrogen-based fertilizers may be affected somewhat differently.32 

The Commission found that demand for ammonium nitrate is seasonal, peaking in the spring

planting season, usually between February and June. Given the capital intensive nature of the industry,

producers operate production facilities throughout the year in order to maximize production efficiencies. 

During the off-season, they build up inventories equivalent to one or two months of production and might

store an additional month’s worth of production on barges.33 

 The Commission found that demand for fertilizers is generally considered to be mature and that

demand for ammonium nitrate is affected principally by planted acreage and application rates, which in

turn are influenced by crop prices and weather. Most U.S. suppliers, the Commission noted, considered

that demand was steady during the period of investigation (POI). Apparent U.S. consumption of

ammonium nitrate was 2.38 million short tons in 1998 and 2.31 million short tons in 2000. On a value

basis, apparent U.S. consumption was $278.3 million in 1998 and $261.8 million in 2000.34

The Commission found a moderately high degree of substitutability between ammonium nitrate

from Ukraine and the domestic like product and that price is an important factor in purchasing decisions

for ammonium nitrate. The Commission also found a moderately high degree of substitutability among

subject imports, the domestic like product, and non-subject imports, which also supplied the U.S.

market.35

Imports of ammonium nitrate from Russia accounted for the largest share of total imports of

ammonium nitrate into the United States in 1998 and 1999 and were the subject of an antidumping duty

petition filed on July 23, 1999, by the same petitioners as in the original investigation detailed here.36 As

a result of this petition and subsequent relief in the form of a suspension agreement, ammonium nitrate

imports from Russia fell from the high levels in 1998 and 1999 to virtually zero in 2000, while imports

from Ukraine rapidly increased their volume.37 The total volume of non-subject imports was *** lower in
 37 (...continued)

with the Government of Russia that included quantity and price restrictions. The Commission made an affirmative

determination in the same investigation on August 2, 2000. USITC Pub. 3448 at 9. 

 38 USITC Pub. 3448 at 9.

 39 USITC Pub. 3448 at 9-10. The Commission attributed the higher volume of non-subject imports in interim

2001 to a response to the high natural gas costs in the U.S. market and subsequent increase in prices for ammonium

nitrate. Id. at 9 n.45.

 40 USITC Pub. 3448 at 10. 

 41 Russia Review, USITC Pub. 3844 at 8.

 42 CR, PR at Table I-7.

 43 CR, PR at Table C-1.

 44 CR at II-4-II-6, PR at II-3-II-5; see also CR at III-12, PR at III-8 (noting reports of the impact on the U.S.

market of security and liability issues). Due to its nature as an oxidizer, ammonium nitrate has long been regulated

as a hazardous material, but since September 11, 2001, security awareness and regulation have increased, as

discussed in the Russia review. Russia Review, USITC Pub. 3844 at 10-11. Since the period of that review, new

bills concerning the handling of ammonium nitrate have been introduced in the U.S. House and Senate, but none of

these has passed. CR at II-6, PR at II-5. 

8

2000 than in previous years. The level of non-subject import shipments in interim 2001 was *** higher

than in interim 2000. The Commission found that the increased volume of non-subject imports in interim

2001 (as compared to interim 2000) was the result of imports from non-subject countries that previously

had no presence in the U.S. market, such as Bulgaria, Romania, Spain, and Turkey, starting to sell in the

U.S. market, while imports from other non-subject countries (aside from Russia) continued their

presence.38 The Commission found, however, that the average unit values (AUVs) of non-subject imports

were *** higher than those of subject imports of ammonium nitrate from Ukraine.39

The Commission also noted the significance of natural gas costs in the production of ammonium

nitrate. Ammonia is the primary raw material in the manufacture of ammonium nitrate, and the basic

feedstock for producing ammonia is natural gas. The Commission calculated that the cost of natural gas

accounted for approximately 70 to 80 percent of the cost of producing ammonia and about 30 to 50

percent of the cost of producing ammonium nitrate. Natural gas prices and ammonia costs fell early in

the POI and rose sharply in 2000.40

 In addition to the conditions noted in the original investigation, the following conditions of

competition during the period of review are relevant to our determination in this five-year review.

Demand. In last year’s five-year review of whether to terminate the suspended investigation on

ammonium nitrate from Russia, the Commission found that ammonium nitrate demand in the U.S. market

appeared to have declined since 2003 and would likely experience further declines in the reasonably

foreseeable future.41 The data collected in this review support the same findings. Between 2001 and

2003, apparent U.S. consumption increased from 1.89 million short tons to 2.16 million short tons. Since

then, apparent U.S. consumption has steadily declined. In 2004, apparent U.S. consumption declined to

the same level as 2001. In each year thereafter, 2005 and 2006, it declined further.42 In 2006, apparent

U.S. consumption was *** million short tons, a decline overall from the start of the period of review of

*** percent.43 Security measures that have recently been imposed or proposed by Federal and State

governments on ammonium nitrate and its transport and storage reportedly have contributed importantly

to the decrease in demand for ammonium nitrate between 2001 and 2006.44

The trend of reported declining demand for ammonium nitrate is consistent with data regarding

its share of the broader nitrogen fertilizer market. The principal uses for ammonium nitrate are for forage
 45 Planted acreage and application rates are discussed in CR at II-22-II-26, PR at II-14-II-17. Recently, ethanol

use reportedly has become a driving force in acres planted for corn, and there are projections of significant increases

in the acreage of planted corn. CR at II-23-II-24, PR at II-14-II-16. COFANT argues that this is not expected to

have a significant positive effect on U.S. demand for ammonium nitrate and that increased corn acreage is coming at

the expense of other crops that also consume nitrogen fertilizers. COFANT Prehearing Brief at 16-17; COFANT

Posthearing Brief Exh. 1 at 13-15. 

 46 CR at II-22, PR at II-14.

 47 CR at II-7, PR at II-4.

 48 CR at II-28, PR at II-18; CR, PR at Table II-2. Ammonium nitrate averaged 5.4 percent of consumption of the

four major single-nutrient nitrogenous fertilizers, whereas anhydrous ammonia averaged 35.4 percent, UAN 31.6

percent, and urea 27.5 percent. CR at II-28, PR at II-18. We note that the available data do not itemize ammonium

nitrate used in bulk blends such as “NPK,” which are identified separately as “multinutrients.” CR, PR at Table II-2.

 49 CR at II-28-II-29, PR at II-18-II-19; CR, PR at Table II-2.

 50 They predict that demand will eventually level off in the range of *** short tons annually, with the majority of

consumption remaining in the southeastern United States. CR at II-21, PR at II-13.

 51 FERTECON estimates that ammonium nitrate consumption will *** short tons by 2010. CR at II-21, PR at II13. 

 52 CR, PR at Table C-1. Domestic production of HDAN has declined *** since 2002, when it was *** 1.58

million short tons. In 2006, the remaining two companies, Terra and El Dorado, produced *** short tons. CR, PR at

Table III-1. ***. CR, PR at Table III-1. ***. ***. CR at III-13 n.29, PR at III-9 n.29.

 53 CR, PR at Tables I-1 & I-4.

9

(pasture and hay), cotton, corn, wheat, citrus/vegetables, and tobacco crops.45 Other single-nutrient

nitrogen fertilizers are also used on these crops, including urea for forage; anhydrous ammonia, urea

ammonium nitrate (UAN), and urea for corn; and UAN and urea for cotton, wheat, and

citrus/vegetables.46 Substitution appears to be based on a number of factors, including weather, types of

crops, relative prices, and the availability of ammonium nitrate and its alternatives.47 While there will

always be regions of the country and certain crops for which ammonium nitrate is the preferred source of

nitrogen, it is the only one of the four major single-nutrient nitrogenous fertilizers that decreased in

consumption from crop year 2001 to crop year 2006 (it decreased by 38.1 percent).48 In the same period,

total U.S. nitrogen fertilizer consumption increased from 11.5 million short tons of contained nitrogen to

12.0 million short tons of contained nitrogen, or by approximately 4.4 percent.49

In addition, the consensus among industry participants and analysts appears to be that demand for

ammonium nitrate will continue to decline going forward. El Dorado and Terra, for example, forecast

such declines.50 FERTECON Limited, an independent provider of market information and analyses on

fertilizers and fertilizer raw materials, predicts that U.S. annual consumption will ***.51

Based on all of the available evidence, we find that, although ammonium nitrate is a specialty,

niche-market nitrogen fertilizer that continues to be favored in selected applications, the demand for it has

declined since 2003 and will likely decline further in the reasonably foreseeable future.

Supply. From 2001 through 2005, the domestic industry was the largest supplier of ammonium

nitrate to the U.S. market. Its share of the quantity of apparent U.S. consumption declined irregularly

from 73.8 percent in 2001 to 71.1 percent in 2005. In 2006, the domestic industry’s share of apparent

U.S. consumption declined *** percentage points to *** percent.52

The domestic industry has undergone significant consolidation and restructuring during the

period of review. During the original investigation, there were 10 U.S. producers and a total capacity of

2.7 million short tons.53 Since then, two firms have gone out of business, Wil-Gro in 2000 and Nitram in

2003, and their production capacity was eliminated from the industry. Additional capacity closures

include the facilities of Coastal Chem, which switched to LDAN production after being acquired by Dyno

Nobel in 2003; the closure of the Crystal City, Missouri facility formerly owned by LaRoche, then
 54 CR, PR at III-1 & Table I-5.

 55 CR, PR at Table I-5.

 56 CR, PR at III-1, Table I-5; CR at III-5, PR at III-3.

 57 CR, PR at Table I-5. El Dorado’s Cherokee plant ***. CR at III-2, PR at III-1.

 58 CR at III-4-III-5, PR at III-3.

 59 CR, PR at Table III-1. 

 60 CR, PR at Table C-1 (*** million short tons in 2006). 

 61 CR, PR at IV-1 & Table IV-1.

 62 CR, PR at Table IV-1. Non-subject import volume in 2000 was ***.

 63 CR, PR at Tables I-1, I-8.

 64 Imports of ammonium nitrate from Russia, as noted above, have been regulated since 2000 by the terms of a

suspension agreement that sets export limits and establishes weekly reference prices. The agreement is set forth in

Appendix 1 to Commerce’s original notice of suspension of the Russia investigation. 65 Fed. Reg. 37759 (June 16,

2000).

 65 CR at II-19, PR at II-12.

10

acquired by El Dorado in 2000; and the cessation of HDAN production by Potash Corp. in 2004 ***.54

Additionally, Air Products decommissioned and dismantled its HDAN plant in July 2005 after damage

from Hurricanes Ivan (September 2004) and Dennis (July 2005). Agrium, which had acquired the

fertilizer production assets of Prodica in 2000, discontinued production and sales in 2005.55

The *** during the original investigation, MCC, was acquired in 2004 by Terra, the newest

producer in the HDAN market. In July 2005, Terra announced that it had entered into a 10-year

renewable agreement to supply LDAN and ammonium nitrate solution to Orica USA Inc. As part of the

agreement, Terra modified one of its ammonium nitrate prill towers to enable the production of either

HDAN or LDAN. ***.56

El Dorado, which has operated since the original investigation, ceased production of HDAN at its

Cherokee, Alabama plant in 2004 in order to ***.57 The Cherokee plant ***.58 

Thus, since the original investigation, the domestic industry has consolidated from 10 to 2

producers, with Terra and El Dorado the only domestic producers of HDAN since 2005. The domestic

industry’s production capacity in 2000 was 2.67 million short tons. During the period of review,

production capacity has declined *** from 2.05 million short tons in 2001 to *** million short tons in

2006 (which includes the capacity at El Dorado’s Cherokee plant).59 *** the closures, U.S. production

capacity *** apparent U.S. consumption in 2006.60

Subject imports from Ukraine peaked in volume in 2000 at *** short tons. Under the restraining

effects of the antidumping duty order, there were no imports of ammonium nitrate from Ukraine during

the period of review.61

In their absence, non-subject imports have increased irregularly in volume during the period of

review, from 521,552 short tons in 2001 to 557,674 short tons in 2006.62 As apparent U.S. consumption

has declined over the period of review, shipments of non-subject imports have increased their share

overall from 26.2 percent in 2001 to 28.9 percent in 2005, before increasing further to *** percent in

2006.63 The major sources of non-subject imports during the period of review were, in descending order,

Romania, the Netherlands, Bulgaria, Russia,64 Spain and, in 2006, newer entrant Georgia.65 Imports of

HDAN arrive in the United States in ships, with an increasing percentage (since 2003) reportedly entering

at Tampa, Florida, and Wilmington, North Carolina, in addition to the traditional port for fertilizers, New
 66 CR at II-3, PR at II-2. The Mississippi River system has served as an important means for distributing

HDAN, as a portion of both domestically produced and imported HDAN is transported in bulk by barge to storage

and distribution locations throughout the Farm Belt. *** reported that ammonium nitrate imports to Tampa and

Wilmington are shipped by rail and truck to warehouses in the Southeast. CR at II-3, PR at II-2. 

 67 CR at II-44, PR at II-28.

 68 CR, PR at Table IV-1; Questionnaire Responses of *** and ***.

 69 USITC Pub. 3448 at IV-1.

 70 CR at IV-2, PR at IV-1; Foreign Producers’ Questionnaire Response at I-3. *** reported that almost all

producers of HDAN usually export their product through trading companies. CR at IV-19, PR at IV-10.

 71 Russia Review, USITC Pub. 3844 at 17; see also id. at 10.

 72 See, e.g., Revised and Corrected Hearing Transcript (Apr. 17, 2007) (Tr.) at 20 (Mr. Elliott) (“Given what I

see in the market and our interactions with traders handling imports, there is no question that . . . [t]he trading

companies handling this product, as they did in 2000, will move as much as they can as fast as they can as long as

they can cover their costs.”).

 73 CR at III-19, PR at III-9.

 74 CR at II-4, PR at II-2.

 75 MMBtu refers to one million British thermal units, a unit of measure of heat energy.

 76 CR, PR at Table V-1, Figure V-1.

 77 CR at V-5-V-6, PR at V-2-V-3.

 78 CR, PR at Figure V-3.

11

Orleans, Louisiana.66 Importers, like domestic producers, sell their HDAN almost exclusively to fertilizer

distributors and dealers.67

Exports of ammonium nitrate to the United States are predominantly arranged and transported by

global trading companies. *** alone accounted for almost *** of U.S. imports of HDAN from all sources

in 2006.68 Companies *** Ukraine in the original investigation included ConAgra and Transammonia.69

Among the companies listed by Ukrainian producers as their largest export purchasers in this review were

***, companies that are currently trading HDAN in the United States.70 In the Russia review, the

Commission found that, “[f]or the global trading companies that drive the flow of imports, profit is a

function of total margin and total volume, so they have a strong incentive to move as much volume as

feasible so long as their margins that cover their purchase price and transportation costs are maintained.”71

The economic interests of the trading companies have not changed since the original investigation or the

Russia review – they have an incentive to ship volumes of HDAN that are as large as possible at any price

that would cover their margins.72

Raw material costs remain a significant factor in industry profitability, and natural gas is the

principal raw material used to produce HDAN.73 The cost of natural gas has continued to be volatile and

generally high in the United States during the period of review.74 Domestic producers’ purchase prices of

natural gas began the period at $*** per MMBtu75 during January-March 2001, generally decreased to a

period low of $*** per MMBtu during July-September 2002, then increased to a period high of $*** per

MMBtu in October-December 2005. Natural gas prices then decreased to $*** per MMBtu in JulySeptember 2006, before increasing to end the period at $*** per MMBtu.76

Forecasts indicate continuing volatile and high prices for natural gas in the U.S. market. The

Energy Information Agency of the Department of Commerce (EIA) forecasts quarterly fluctuations in

2007 and 2008 and, on an annual basis, higher prices to industrial users in each year, averaging $8.43 per

MMBtu during 2007 and $8.90 per MMBtu during 2008.77 

Ukrainian producers of HDAN, in contrast, have had access to natural gas at lower and less

volatile prices than U.S. producers throughout the period of review.78 Prices reported by Ukrainian
 79 CR, PR at Figure V-3. 

 80 CR at V-6-V-7, PR at V-3. COFANT argues that natural gas prices in Ukraine are artificially suppressed and

that recent reported natural gas price increases will be offset under Ukrainian government policy. COFANT

Prehearing Brief at 21-22 & Exh. 8. *** reported in their questionnaire responses that there were no Ukrainian

government programs that affect the price or availability of natural gas to Ukrainian HDAN producers. CR at V-7,

PR at V-3. Although we are unable to make a finding on the extent of Ukrainian government involvement in the

Ukrainian natural gas market, we rely on the price information submitted by domestic and Ukrainian producers,

above, as probative. 

 81 CR at II-41, PR at II-27.

 82 CR, PR at Table II-4.

 83 CR, PR at Table II-4. ***. CR at III-8, PR at III-6; CR, PR at Table III-6.

 84 CR at II-43, PR at II-28.

 85 CR at II-42, PR at II-27. Quality was reported most frequently as the second most important factor, and

availability the third most important. 

 86 CR, PR at Table II-3. Other purchase factors identified frequently as very important were availability, whether

the product meets quality standards, and reliable supply. 

 87 19 U.S.C. § 1675a(a)(2).

12

HDAN producers were *** before increasing late in the period.79 Reported natural gas prices of these

producers averaged $2.07 per MMBtu during January 2001 to December 2006, or *** percent less than

the reported average natural gas purchase price of U.S. HDAN producers of $*** per MMBtu during this

period.80 

Substitutability. Domestically produced HDAN and HDAN from Ukraine and other import

sources are generally substitutable.81 Four out of five responding purchasers and all responding U.S.

producers and importers reported that domestically produced product and Ukrainian product are “always

interchangeable.”82 In addition, four out of five responding purchasers and three out of four responding

U.S. producers and importers reported that Ukrainian product and ammonium nitrate sourced from other

countries were “always interchangeable.”83 Purchasers frequently were not able to identify the country of

origin of HDAN that they purchased from their U.S. suppliers and assumed that HDAN purchased from

U.S. producers was produced domestically.84

Price remains an important factor in purchasing decisions for this commodity product. 

Purchasers most frequently identified price as the primary consideration in making purchasing

decisions.85 In addition, 10 out of 12 purchasers identified price as a “very important” factor in

purchasing decisions, and 11 out of 12 purchasers identified discounts as “very important.”86

We find that these conditions in the ammonium nitrate market provide us with a reasonable basis

on which to assess the likely effects of revocation of the antidumping duty order.

C. Likely Volume of Subject Imports 

In evaluating the likely volume of imports of subject merchandise if the antidumping duty order

is revoked, the Commission is directed to consider whether the likely volume of imports would be

significant either in absolute terms or relative to production or consumption in the United States.87 In

doing so, the Commission must consider “all relevant economic factors,” including four enumerated

factors: (1) any likely increase in production capacity or existing unused production capacity in the

exporting country; (2) existing inventories of the subject merchandise, or likely increases in inventories;

(3) the existence of barriers to the importation of the subject merchandise into countries other than the

United States; and (4) the potential for product shifting if production facilities in the foreign country,
 88 19 U.S.C. § 1675a(a)(2)(A-D).

 89 USITC Pub. 3448 at 10-11; Confidential Views at 14-16.

 90 CR, PR at Table IV-4. Together with Russia, the two accounted for *** of world production and *** percent

of world exports of HDAN in 2006. CR at IV-6, PR at IV-3.

 91 CR, PR at Table IV-9.

 92 CR, PR at Table IV-9.

 93 ***.

 94 CR, PR at Table IV-10.

 95 CR, PR at Tables I-7, IV-10 (*** short tons of Ukrainian excess capacity constituted *** percent of apparent

U.S. consumption in 2006).

 96 Memorandum INV-EE-059 (June 4, 2007), Table IV-10. *** did not report a capacity projection for 2008.

***. 

 97 Under *** estimates, the Ukrainian industry exports approximately *** the volume exported by any other

significant HDAN-producing foreign industry. CR, PR at Table IV-4. 

13

which can be used to produce the subject merchandise, are currently being used to produce other

products.88

In the original investigation, the Commission found that the volume of subject imports increased

significantly overall from 1998 to 2000, more than *** in absolute terms, from *** short tons in 1998 to

*** short tons in 2000. Subject imports also increased *** percentage points in terms of market

penetration, from *** percent of apparent U.S. consumption in 1998 to *** percent in 2000. Such

imports ceased as of December 2000, which the Commission attributed to the pendency of the original

investigation. The Commission also found that the increase in subject imports between 1999 and 2000

prevented the domestic industry from capturing any additional market share notwithstanding the virtual

disappearance of imports of ammonium nitrate from Russia from the U.S. market in 2000 after

Commerce made its preliminary affirmative determination and suspended liquidation on imports from

Russia. The Commission thus determined that subject import volume and the increase in that volume in

absolute terms and relative to consumption in the United States were significant.89

Under the discipline of the antidumping duty order, there were no imports of ammonium nitrate

from Ukraine during the period of review. Based on the record in this investigation, we find that the

Ukrainian industry has the ability and incentive to export large and significant volumes of ammonium

nitrate to the United States and would likely do so if the antidumping duty order were revoked.

The Ukrainian industry is the second largest producer and exporter of ammonium nitrate in the

world, trailing only the industry in Russia. In 2006, the Ukrainian industry accounted for *** percent of

global HDAN production and *** percent of global HDAN exports.90 In the original investigation, the

capacity of the *** reporting companies, ***, increased from *** million short tons in 1998 to ***

million short tons in 2000.91 Production by the reporting producers expanded from *** million short tons

in 1998 to *** million short tons in 2000, and their capacity utilization increased from *** percent to ***

percent.92 With all four Ukrainian companies reporting data in this review, the picture of a large industry

with significant excess capacity is unchanged.93 In 2006, the Ukrainian industry’s capacity was ***

million short tons for all four companies, with production of *** million short tons and capacity

utilization of *** percent.94 Excess capacity in Ukraine in 2006 thus was equivalent to *** of apparent

U.S. consumption.95 *** projected no increase or decrease in capacity in 2007-2008.96 

The Ukrainian HDAN industry also has a significant export orientation. As noted above, it ranks

second in the world in HDAN exports. With the exception of export-leading Russia, no other country

approaches Ukraine in total exports of HDAN.97 In 2000, the available data showed that exports
 98 CR, PR at Table IV-9.

 99 Export shipments increased and total commercial shipments to the home market decreased from 2005 to 2006,

resulting in the increased percentage of shipments directed to exports 2006. CR, PR at Table IV-10.

 100 CR at IV-21-IV-22, PR at IV-11. As of the close of the record, ***.

 101 COFANT Prehearing Brief Exh. 9 (43,231 MT in 2004; 353,097 MT in 2006); CR, PR at Table IV-10.

 102 ***. CR, PR at Table IV-4.

 103 See also Response of *** at Question II-16b (***); Response of *** at Questions II-14-15 (***).

 104 COFANT Prehearing Brief Exh. 10. 

 105 COFANT Prehearing Brief Exh. 13. Brazil imposed antidumping duty orders on both Ukrainian and Russian

HDAN in 2002, ***. CR, PR at Table IV-11; COFANT Prehearing Brief Exh. 14 at 4. 

 106 COFANT Prehearing Brief Exh. 20.

 107 See Russia Review, USITC Pub. 3844 at 13. ***. CR at IV-19, PR at IV-10. 

 108 CR, PR at Table IV-4 (Russia consumed *** million short tons in 2006). 

 109 CR, PR at Table IV-4.

14

constituted *** percent of total commercial shipments of the Ukrainian industry.98 In 2005 and 2006, the

only years for which ***, exports constituted *** percent and *** percent, respectively, of such

shipments.99 The Ukrainian industry’s consistent reliance on export markets for a substantial portion of

its commercial shipments demonstrates the Ukrainian industry’s export orientation. 

In addition, the Ukrainian industry is facing significantly increased competition from Russian

imports of HDAN in its domestic market. *** reported that during January-May 2006, there was a large

increase in imports of Russian ammonium nitrate into Ukraine at lower prices than those for the domestic

Ukrainian product. ***.100 Reports of substantially increased competition from Russian imports in the

Ukrainian home market are consistent with trade data published by UN Comptrade. At the time of the

original investigation, Ukrainian imports from Russia were minor, less than 10,000 metric tons (MT)

during each year from 1998 to 2000. In 2006, Ukrainian imports of HDAN from Russia exceeded

350,000 MT, more than eight times their volume in 2004, and equivalent to *** of Ukrainian producers’

home-market shipments.101 Moreover, only limited improvement is predicted in Ukrainian home market

demand.102 The substantial increase in competition from Russian imports in the Ukrainian home market

and the limited improvement expected in that market’s demand indicate that export markets will remain

an important part of the Ukrainian industry’s commercial future and that pressure from Russian imports,

if unabated, will likely displace a growing share of Ukrainian producers’ home market sales and intensify

those producers’ search for export markets.103 

The Ukrainian industry’s competition from Russian HDAN extends beyond its home market. 

The top export markets for Ukrainian HDAN are also major export markets for Russian HDAN.104 The 

Ukrainian industry has been all but eliminated from the Brazilian market, which absorbed over 215,000

MT of Ukrainian HDAN as recently as 2003, while Russian product has rapidly increased its presence in

that market.105 The industries in Russia and Ukraine are the top foreign HDAN suppliers in Turkey,

Morocco, and Argentina and appear to compete aggressively in these markets on the basis of price.106

The likelihood that Ukrainian HDAN producers would target the U.S. market is increased given the

competitive pressures that the Ukrainian industry is facing from Russian product in its home market and

export markets and the fact that Russian imports are subject to a suspension agreement in the U.S. market.

In addition, the U.S. market remains an attractive market for foreign producers and exporters,

including those in Ukraine, because of its size and the prices it commands.107 According to ***, the

United States accounted for nearly *** percent of total world HDAN consumption in 2006. The only

country that *** was Russia.108 Even with U.S. consumption projected to decline, the United States will

continue to be one of the largest consumers of HDAN in the world.109 Moreover, in 2006, the U.S.
 110 CR, PR at Table IV-4.

 111 CR at V-21-V-22, PR at V-12. *** noted that, based on ocean freight of around $*** per metric ton, the U.S.

market carries a $***-$*** per metric ton premium for product sold out of the Baltic/Black Sea area.

 112 CR at V-22, PR at V-12.

 113 CR, PR at C-1. We note that there are no product mix issues for ammonium nitrate, which is a commodity

product without readily identifiable variations or grades.

 114 CR, PR at Table IV-7 (Global Trade Information Service data). Questionnaire responses did not itemize

shipments and values by particular country. The reported AUV for Ukrainian shipments to all export markets in

2006, according to questionnaire responses, was $*** per short ton. CR, PR at Table IV-10. 

 115 CR, PR at Table IV-11.

 116 CR at IV-22, PR at IV-11. Under all of the circumstances, as we find below, the likely volume of subject

imports from Ukraine would be significant if the order were revoked. We note that the significant likely volume of

HDAN from Ukraine would displace domestic HDAN production as well as non-subject imports from the U.S.

market. The HDAN industry in Ukraine is significantly larger than *** and has significantly greater production and

export volumes. CR, PR at Table IV-4. Moreover, the HDAN industry in Ukraine has ***. CR, PR at Table IV-10. 

Also, the Commission found in the original investigation that subject imports significantly undersold the U.S.

product and that AUVs for Ukrainian imports were lower than AUVs for non-subject imports during the POI, when

Ukrainian imports took market share from the domestic industry. USITC Pub. 3448 at 9-10, 13, 16. We would

expect similar volume effects today, and the effects of such significant additional subject HDAN in the U.S. market

would significantly adversely impact the domestic industry.

15

market was the second largest import market in the world, accounting for over *** percent of total world

imports.110

Reports of price comparisons between U.S. and non-U.S. markets consistently show HDAN

commanding a higher price in the U.S. market. For example, ***.111 *** reported that in 2006 the

average bulk Black Sea price was $*** per short ton, the average bulk New Orleans price was $*** per

short ton, and the average local Ukrainian price at which it sold was $*** per short ton.112

AUVs for U.S. shipments of imported HDAN are consistent with the reported price premiums in

the U.S. market and show that AUVs in the United States are much higher than AUVs of Ukrainian

product in alternative Ukrainian export markets. In 2006, for example, the AUV for U.S. shipments of

imports was $*** per short ton.113 AUVs for Ukrainian product shipped to the Ukrainian industry’s

export markets reportedly averaged $120.96 per short ton in 2006 and were $122.03 per short ton to its

largest export market, Turkey.114

Finally, exports of subject merchandise from Ukraine are subject to a ban in China and to

antidumping duty orders in Brazil and the European Union (EU), which further increase the attractiveness

of the U.S. market as a target for increased exports from Ukraine.115 Most recently, the EU determined in

April 2007 to continue its antidumping duty order on ammonium nitrate from Ukraine.116 

Given the demonstrated ability of the Ukrainian HDAN industry to increase imports into the U.S.

market rapidly during the original investigation, the substantial production capability and unused capacity

of the Ukraine industry as the world’s second largest producer and exporter of HDAN, the Ukrainian

industry’s dependence on export markets despite numerous barriers, the competition it faces from

Russian-produced HDAN in its home market and export markets, and the attractiveness of the U.S.

market as a target for Ukrainian supply, we find that the likely volume of subject imports, both in

absolute terms and relative to production and consumption in the United States, would be significant if

the order were revoked. 
 117 19 U.S.C. § 1675a(a)(3). The SAA states that “[c]onsistent with its practice in investigations, in considering

the likely price effects of imports in the event of revocation and termination, the Commission may rely on

circumstantial, as well as direct, evidence of the adverse effects of unfairly traded imports on domestic prices.” 

SAA at 886.

 118 USITC Pub. 3448 at 12. Subject imports from Ukraine undersold the domestic like product in ***

comparisons at margins often exceeding *** percent. Original Investigation, Confidential Staff Report at Tables V1-V-2. 

 119 USITC Pub. 3448 at 11-12 & n.66.

 120 USITC Pub. 3448 at 12-13.

 121 CR, PR at Tables II-3-II-4.

 122 CR, PR at Table IV-1.

 123 CR, PR at Tables V-1-2 & Figure V-5.

16

D. Likely Price Effects of Subject Imports

In evaluating the likely price effects of subject imports if the antidumping duty order is revoked,

the Commission is directed to consider whether there is likely to be significant underselling by the subject

imports as compared to the domestic like product and whether the subject imports are likely to enter the

United States at prices that otherwise would have a significant depressing or suppressing effect on the

price of the domestic like product.117

In the original investigation, the Commission found that subject imports undersold the domestic

like product by large margins and in all but one quarter.118 Given the substitutability of Ukrainian and

domestically produced ammonium nitrate and the importance of price in purchasing decisions, the

Commission concluded that the underselling by subject imports was significant. Numerous instances of

confirmed lost sales and lost revenue allegations supported this conclusion.119

The Commission further found that ammonium nitrate prices declined between 1997 and 1999,

when there was little Ukrainian product in the U.S. market. In 2000, as injurious levels of Russian

ammonium nitrate exited the U.S. market, a significant volume of subject imports from Ukraine surged

into the U.S. market. Prices for ammonium nitrate in the U.S. market generally were higher in 2000 than

in 1999 but, the Commission noted, prices did not recover to meet unprecedented production costs, driven

by natural gas price increases, and the industry experienced a cost-price squeeze. Even though rising

prices after the entry into force of the suspension agreement on imports of ammonium nitrate from Russia

allowed domestic producers to pass on at least some of their increasing costs, the price increases were not

sufficient to return domestic prices to profitable levels. The Commission concluded that subject imports

suppressed price increases that otherwise would have occurred to a significant degree.120 

In the instant review, the record shows that price remains an important factor in purchasing

decisions for this commodity product and that domestically produced ammonium nitrate and ammonium

nitrate from Ukraine remain substitutable products.121 The record also shows that under the discipline of

the antidumping duty order, there were no imports of ammonium nitrate from Ukraine during the period

of review, and thus no pricing data are available for subject imports.122 

During the period of review, U.S. producers’ net quarterly f.o.b. selling prices for HDAN and

their net quarterly purchase prices for natural gas followed similar trends. The HDAN quarterly selling

price began at $151.19 per short ton during January-March 2001, then generally decreased to a period low

of $99.91 per short ton by October-December 2002, while the purchase price of natural gas reached a

period low of $*** per MMBtu by July-September 2002.123 The HDAN selling price then generally

increased and *** $*** per short ton by January-March 2006, while the purchase price of natural gas ***

of $*** per MMBtu by October-December 2005. The HDAN selling price then decreased to end the
 124 CR, PR at Tables V-1-2 & Figure V-5. We note that the total cost of goods sold (COGS), which includes raw

materials, direct labor, and other factory costs, declined overall as a ratio to net sales from 2001 to 2006. CR, PR at

Table III-8. 

 125 CR, PR at Table C-1. The record contains no specific pricing information by country of origin. See PR at V18-V-21, PR at V-9-V-11 (comments of producers and importers regarding U.S. prices). 

 126 CR at V-21-V-22, PR at V-12; CR, PR at Figure V-3.

 127 CR, PR at Figure V-3.

 128 CR at V-7, PR at V-3.

 129 Original Investigation, Confidential Staff Report at Tables IV-1-IV-2.

17

period at $*** per short ton during October-December 2006.124 U.S. shipment AUVs of non-subject

imports were *** U.S. producers’ shipment AUVs throughout the period.125 

High prices in the U.S. market contribute to making it an attractive market for global competition

from HDAN imports. As noted above, price comparisons between U.S. and non-U.S. markets

consistently show HDAN commanding higher prices in the U.S. market.126 Moreover, Ukrainian

producers of HDAN have had access to lower-priced natural gas throughout the period of review, with

purchase prices below $*** per MMBtu through much of the period before increasing late in the period to

approximately $*** per MMBtu.127 Ukrainian producers’ reported natural gas purchase prices averaged

$2.07 per MMBtu during the period of review as compared to $*** per MMBtu for U.S. producers.128

Existing infrastructure and market conditions in the United States, as well as competitive pressure

in the Ukrainian home market and other export markets, would readily facilitate a significant increase in

HDAN import volumes from Ukraine. The global trading companies that would transport and sell

Ukrainian HDAN in the U.S. market would have a financial incentive to undercut prevailing U.S. price

levels, and Ukrainian producers will likely sell at prices that will enable trading companies to do so. 

During 2000, when HDAN imports from Ukraine surged into the U.S. market, they undersold U.S.

producers and non-subject imports by $*** per short ton and $*** per short ton, respectively.129 There is

no evidence to suggest that trading companies will exercise self-discipline in response to revocation of the

order. The large volumes of HDAN available from Ukraine at attractive margins will likely lead trading

companies, as they did in 2000, to bring in as much subject product as they can as quickly as possible.

Given the significant likely volume of imports, the importance of price in the AN market, the

substitutability of subject imports and the domestic like product, the price effects of low-priced subject

imports in the original investigation, and the incentive that exists for subject imports to enter the U.S.

market, we find a likelihood of significant negative price effects from the subject imports. We conclude

that, if the antidumping duty order were revoked, significant volumes of subject imports from Ukraine

likely would significantly undersell the domestic like product. Since ammonium nitrate is a bulk

commodity product, those volumes would likely have a depressing or suppressing effect on domestic

prices. 

E. Likely Impact of Subject Imports

In evaluating the likely impact of imports of subject merchandise if the antidumping duty order is

revoked, the Commission is directed to consider all relevant economic factors that are likely to have a

bearing on the state of the industry in the United States, including but not limited to: (1) likely declines in

output, sales, market share, profits, productivity, return on investments, and utilization of capacity;

(2) likely negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital,

and investment; and (3) likely negative effects on the existing development and production efforts of the

industry, including efforts to develop a derivative or more advanced version of the domestic like
 130 19 U.S.C. § 1675a(a)(4).

 131 19 U.S.C. § 1675a(a)(4). Section 752(a)(6) of the Act states that “the Commission may consider the

magnitude of the margin of dumping” in making its determination in a five-year review. 19 U.S.C. § 1675a(a)(6). 

The statute defines the “magnitude of the margin of dumping” to be used by the Commission in five-year reviews as

“the dumping margin or margins determined by the administering authority under section 1675a(c)(3) of this title.” 

19 U.S.C. § 1677(35)(C)(iv). See also SAA at 887. In the final results of its expedited investigation, Commerce

found that revocation of the antidumping duty order on subject imports from Ukraine would likely lead to

continuation or recurrence of dumping at the rate of 156.29 percent for J.S.C. “Concern” Stirol and all others. 71

Fed. Reg. at 70509. Commerce has not issued a duty absorption determination with respect to this order. 

 132 The SAA states that in assessing whether the domestic industry is vulnerable to injury if the order is revoked,

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 may also demonstrate that an

industry is facing difficulties from a variety of sources and is vulnerable to dumped or subsidized imports.” SAA at

885.

 133 USITC Pub. 3448 at 14-15.

 134 USITC Pub. 3448 at 15.

 135 USITC Pub. 3448 at 16.

 136 USITC Pub. 3448 at 16.

18

product.130 All relevant economic factors are to be considered within the context of the business cycle

and the conditions of competition that are distinctive to the industry.131 As instructed by the statute, we

have considered the extent to which any improvement in the state of the domestic industry is related to

the antidumping duty order and whether the industry is vulnerable to material injury if the antidumping

duty order is revoked.132

In the original investigation, the Commission found that unfairly traded imports of ammonium

nitrate from Ukraine prevented the domestic industry from recovering from its already injured condition

at the end of 1999 and impeded the domestic industry’s ability to respond to the rapid and unprecedented

increases in natural gas costs that occurred in 2000 and early 2001. A number of domestic industry

performance indicators declined throughout the POI and, importantly, continued to decline in 2000. 

While capacity increased marginally during the POI, production and capacity utilization decreased

significantly. The record showed that, rather than accept lower prices to maintain market share and

continue production at higher capacity utilization levels, several producers stopped producing ammonium

nitrate for extended periods due to the presence of low-priced subject imports and increasing gas costs. 

One producer ceased production, another filed for bankruptcy, and two additional plants were acquired by

another producer, but only one of these remained in operation at the end of the POI.133

Domestic producers’ shipments and net sales quantities declined during the POI, attributable to

competition from lower-priced Ukrainian product not only during the regular planting season, but also

during the domestic industry’s off-season, fall-fill period. The domestic industry experienced operating

losses in 1999 and 2000.134 Employment, wages, and worker productivity all fell during the POI. Capital

expenditures declined dramatically, and at least three producers reported that they were having, or

anticipated having, difficulty raising capital to finance needed improvement projects.135

The Commission found that these performance declines were attributable to the significant

volume increases of ammonium nitrate imports from Ukraine and their significant negative price effects,

all of which were directed at a domestic industry that had not yet fully recovered from the injury

previously inflicted by unfairly traded imports of ammonium nitrate from Russia. The Commission thus

concluded that subject imports had had a significant adverse impact on the domestic industry.136

While several domestic producers have ceased production, shrinking the size of the industry, we

find that the domestic industry experienced a steady improvement of its condition in several respects after

issuance of the antidumping duty order. During the original investigation, the AUV of domestic
 137 CR, PR at Table I-1. 

 138 COFANT Posthearing Brief Exh. 1 at 45 & Exh. 15.

 139 CR, PR at Table I-1.

 140 CR, PR at Tables I-1, I-7, V-2.

 141 COFANT’s attempt to quantify the impact of revocation relies upon economic modeling that we do not credit. 

See, e.g., COFANT Prehearing Brief Exh. 23. All of the inputs are based on outdated trade data that are not

reflective of current trade conditions. Moreover, the COMPAS model in general is a short-run, static-equilibrium

model that estimates domestic market and import conditions that could exist if unfair imports were not in the U.S.

market. The model estimates these data for a specific year, based on actual data and suggested elasticities for that

specific year. Frequently, as here, the level of subject imports is so low (or zero) that the model’s counterfactual

results are not useful. 

19

producers’ shipments reached a low of approximately $103 per short ton in 1999, but it has since

exceeded that level in every year and consistently increased, except in 2002.137 Although the domestic

industry’s condition initially worsened after imposition of the order, this financial decline was attributable

in large part to the lingering effects of unfairly traded Ukrainian imports that entered the U.S. market in

2000 but remained in the distribution system through the 2001 spring season, at the same time that natural

gas prices were spiking.138 Beginning in 2002, the domestic industry experienced a steady increase in

profitability and, in 2006, a much smaller industry experienced ***.139 As a result of relief from unfairly

traded imports from Russia and Ukraine, the remaining U.S. producers have been able to *** and have

experienced financial improvement despite the pressures of contracting demand and high natural gas

prices.140

The industry, however, which at present consists of El Dorado and Terra, remains vulnerable to

material injury if the order is revoked. Structural changes during the period of review resulting from the

imposition of security measures that increased costs to produce, store, and transport HDAN in the U.S.

market contribute to that vulnerability. Such measures will only continue or increase for this significantly

regulated market. In addition, volatile and generally high natural gas costs during the period of review,

conditions that are expected to continue, contribute to the industry’s ongoing vulnerability. Finally,

contracting U.S. demand for HDAN also leaves the industry vulnerable. Although the domestic industry

is attempting to adjust to this vulnerability by downsizing and switching to producing other products,

such as LDAN, the industry’s condition is such that its *** and was achieved at the cost of shuttering

higher-cost capacity and reducing employment. 

Based on the record in this review, we conclude that revocation of the antidumping duty order

would likely lead to a significant increase in the volume of subject imports that would significantly

undersell the domestic like product and would significantly suppress or depress U.S. prices. We find that

these volume and price effects of the subject imports would have an adverse impact on the production,

shipments, sales values, employment, and market share of the domestic industry and would necessarily

have a significant adverse impact on the likely revenues of the domestic industry. These reductions, in

turn, would have a direct adverse impact on the industry’s profitability as well as its ability to raise capital

and to make and maintain necessary capital investments.141 Accordingly, we conclude that, if the

antidumping duty order were revoked, subject imports would be likely to have a significant adverse

impact on the domestic industry within a reasonably foreseeable time.

CONCLUSION 

For the above-stated reasons, we determine that revocation of the antidumping duty order on

ammonium nitrate from Ukraine would be likely to lead to continuation or recurrence of material injury

to the domestic industry within a reasonably foreseeable time.

 1

 The Commission’s notice of institution, notice to conduct full reviews, scheduling notice, and statement on

adequacy appear in app. A and may also be found at the Commission’s web site (internet address www.usitc.gov). 

Commissioners’ votes on whether to conduct an expedited or full review may also be found at the web site.

 2

 The petition was filed by the ad hoc Committee for Fair Ammonium Nitrate Trade (“COFANT”) including Air

Products & Chemicals, Inc. (“Air Products”), Allentown, PA; El Dorado Chemical Co. (“El Dorado”), Oklahoma

City, OK; LaRoche Industries, Inc. (“LaRoche”), Atlanta, GA; Mississippi Chemical Corp. (“MCC”), Yazoo City,

MS; and Nitram, Inc. (“Nitram”), Tampa, FL. On November 1, 2000, El Dorado acquired the LaRoche nitrogen

plants at Crystal City, MO, and Cherokee, AL.

I-1

PART I: INTRODUCTION AND OVERVIEW

BACKGROUND

On August 1, 2006, the Commission gave notice, pursuant to section 751(c) of the Tariff Act of

1930 (the Act), that it had instituted a review to determine whether revocation of the antidumping duty

order on certain (high density) ammonium nitrate (“HDAN”) from Ukraine would likely lead to the

continuation or recurrence of material injury to a domestic industry. Effective November 6, 2006, the

Commission determined that it would conduct a full review pursuant to section 751(c)(5) of the Act. 

Information relating to the background and schedule of the review is provided in the following

tabulation.1

Effective date Action

September 12, 2001 Commerce’s antidumping duty order (66 FR 47451, September 12, 2001)

August 1, 2006 Commission’s institution of review (71 FR 43516, August 1, 2006)

November 6, 2006 Commission’s decision to conduct a full review (71 FR 67366, November 21, 2006)

December 5, 2006 Commerce’s final results of expedited review (71 FR 70508, December 5, 2006)

December 8, 2006 Commission’s scheduling of the review (71 FR 75579, December 15, 2006)

April 17, 2007 Commission’s hearing1

June 6, 2007 Commission’s vote

June 19, 2007 Commission’s determination transmitted to Commerce

 1 App. B is a list of witnesses who appeared at the hearing.

The Original Investigation

On October 13, 2000, a petition was filed with Commerce and the Commission alleging that an

industry in the United States was materially injured and threatened with material injury by reason of

dumped imports of certain ammonium nitrate from Ukraine.2

 On July 25, 2001, Commerce made a final

affirmative dumping determination, with weighted-average margins as follows: J.S.C. “Concern” Stirol,

156.29 percent and all others, 156.29 percent. The Commission made its final affirmative injury

determination in August 2001 and Commerce issued an antidumping duty order on September 12, 2001.
 3

 The petition was filed by Air Products, MCC, El Dorado, Nitram, LaRoche, and Wil-Gro Fertilizer, Inc. (“WilGro”), Celina, TX.

 4

 71 FR 16177, March 30, 2006.

 5

 71 FR 17080, April 5, 2006.

I-2

Previous Investigations

The subject product was included in an investigation of all ammonium nitrate that the

Commission instituted on April 27, 1998. This investigation, No. 332-393, was instituted under section

332(g) of the Tariff Act of 1930 in response to a request from the Committee on Finance of the U.S.

Senate. The results are contained in USITC Publication 3135 (October 1998): Ammonium Nitrate: A

Comparative Analysis of Factors Affecting Global Trade. Further, on July 23, 1999, a petition was filed

with Commerce and the Commission alleging that an industry in the United States was materially injured

by reason of dumped imports of certain ammonium nitrate from Russia.3

 On May 19, 2000, before the

Commission reached a final determination, Commerce entered into a suspension agreement with Russia

and suspended the antidumping investigation. On June 29, 2000, the petitioners requested a continuation

of the investigation and both Commerce and the Commission resumed their investigations. On July 11,

2000, Commerce made a final affirmative dumping determination, with margins as follows: 253.98

percent ad valorem for JSC Azot Nevinnomyssk (“Nevinka”) and Russia-wide. Critical circumstances

were found also with respect to Nevinka and Russia-wide. The Commission made its final affirmative

injury determination on August 14, 2000, and also determined that critical circumstances did not exist

with respect to the subject imports. Commerce did not issue an antidumping duty order because of the

suspension agreement. On March 31, 2005, the Commission gave notice, pursuant to section 751(c) of

the Tariff Act of 1930 (the Act), that it had instituted a review to determine whether termination of the

suspended investigation on certain ammonium nitrate from Russia would likely lead to the continuation

or recurrence of material injury to a domestic industry. Effective July 5, 2005, the Commission

determined that it would conduct a full review pursuant to section 751(c)(5) of the Act. In March 2006,

the Commission determined that termination of the suspended investigation on ammonium nitrate from

Russia would be likely to lead to continuation or recurrence of material injury to the domestic industry

within a reasonably foreseeable time.4

 In April 2006, Commerce ordered the continuation of the

suspension agreement and of the suspended antidumping duty investigation on ammonium nitrate from

Russia.5

Summary Data

Table I-1 presents a summary of data from the original investigation and from this review. 
I-3

Table I-1

HDAN: Summary data from the original investigation and the current review, 1998-2000 and 2001-06

(Quantity=short tons; value=1,000 dollars; unit values, unit labor costs,

and unit financial data are per short ton)

Item 1998 1999 2000 2001 2002 2003 2004 2005 2006

U.S. consumption quantity:

Amount 2,381,218 2,555,054 2,305,727 1,888,260 2,034,755 2,162,963 1,890,360 1,504,608 ***

Producers’ share1 82.3 78.9 78.4 73.8 76.2 64.8 68.5 71.1 ***

Importer’s share:

Ukraine1 *** *** *** 0.0 0.0 0.0 0.0 0.0 ***

All other countries1 *** *** *** 26.2 23.8 35.2 31.5 28.9 ***

Total imports1 17.7 21.1 21.6 26.2 23.8 35.2 31.5 28.9 ***

U.S. consumption value:

Amount 278,332 253,871 261,796 263,846 230,117 326,164 326,558 314,899 ***

Producers’ share1 85.6 81.7 83.6 73.2 76.5 65.8 68.8 69.9 ***

Importer’s share:

Ukraine1 *** *** *** 0.0 0.0 0.0 0.0 0.0 ***

All other countries1 *** *** *** 26.8 23.5 34.2 31.2 30.1 ***

Total imports1 14.4 18.3 16.4 26.8 23.5 34.2 31.2 30.1 ***

Shipments of U.S. imports

from--

Ukraine:

Quantity *** *** *** 000000

Value *** *** *** 0 0 0 0 0 0

Unit value $*** $*** $*** (2

) (2) (2) (2) (2) (2)

All other countries:

Quantity *** *** *** 494,848 484,658 760,971 595,790 434,571 667,781

Value *** *** *** 70,619 54,008 111,453 102,044 94,918 157,481

Unit value $*** $*** $*** $142.71 $111.44 $146.46 $171.28 $218.42 $235.83

All countries:

Quantity 421,429 540,200 498,582 494,848 484,658 760,971 595,790 434,571 667,781

Value 40,011 46,363 42,918 70,619 54,008 111,453 102,044 94,918 157,481

Unit value $94.94 $85.83 $86.08 $142.71 $111.44 $146.46 $171.28 $218.42 $235.83

Table continued on next page.
I-4

Table I-1--Continued

HDAN: Summary data from the original investigation and the current review, 1998-2000 and 2001-06

(Quantity=short tons; value=1,000 dollars; unit values, unit labor costs,

and unit financial data are per short ton)

Item 1998 1999 2000 2001 2002 2003 2004 2005 2006

U.S. producers’--

Capacity quantity 2,585,210 2,673,064 2,666,251 2,047,578 2,039,125 2,074,340 2,050,042 1,747,368 ***

Production quantity 2,126,197 1,970,942 1,679,379 1,432,727 1,581,114 1,368,676 1,282,263 1,066,799 ***

Capacity utilization1 82.2 73.7 63.0 70.0 77.5 66.0 62.5 61.1 ***

U.S. shipments:

Quantity 1,959,789 2,014,854 1,807,145 1,393,412 1,550,097 1,401,992 1,294,570 1,070,037 ***

Value 238,321 207,508 218,878 193,227 176,109 214,711 224,514 219,981 ***

Unit value $121.61 $102.99 $121.12 $138.67 $113.61 $153.15 $173.43 $205.58 ***

Ending inventory quantity 352,614 247,435 97,376 105,499 104,719 65,491 42,963 *** ***

Inventories/total shipments1 *** *** *** *** *** *** *** *** ***

Production workers 426 422 389 293 290 287 277 179 ***

Hours worked (1,000

 hours) 942 927 852 658 664 636 604 378 ***

Wages paid (1,000 dollars) 18,833 18,841 17,442 13,898 14,505 13,914 13,870 8,707 ***

Hourly wages $19.99 $20.33 $20.48 $21.12 $21.84 $21.88 $22.96 $23.03 ***

Productivity (short tons per

 1,000 hours) 2,257.1 2,126.4 1,873.6 *** *** *** *** *** ***

Net sales:

Quantity 1,996,912 2,039,952 1,821,094 *** *** *** *** *** ***

Value 240,189 208,916 219,625 *** *** *** *** *** ***

Unit value $120.28 $102.41 $120.60 *** *** *** *** *** ***

Cost of goods sold 203,688 201,592 209,720 *** *** *** *** *** ***

Gross profit or (loss) 36,501 7,324 9,905 *** *** *** *** *** ***

Operating income or (loss) 16,826 (8,258) (5,510) *** *** *** *** *** ***

Unit cost of goods sold $102.00 $98.82 $115.16 *** *** *** *** *** ***

Unit operating income or

 (loss) $8.43 ($4.05) ($3.03) *** *** *** *** *** ***

Cost of goods sold/sales1 84.8 96.5 95.5 *** *** *** *** *** ***

Operating income or

 (loss)/sales1 7.0 (4.0) (2.5) *** *** *** *** *** ***

1

 In percent.

 2

 Not applicable.

Source: Compiled from data submitted in response to Commission questionnaires and from adjusted official Commerce statistics obtained in the original investigation.
I-5

Statutory Criteria and Organization of the Report

Section 751(c) of the Act requires Commerce and the Commission to conduct a review no later

than five years after the issuance of an antidumping or countervailing duty order or the suspension of an

investigation to determine whether revocation of the order or termination of the suspended investigation

“would be likely to lead to continuation or recurrence of dumping or a countervailable subsidy (as the

case may be) and of material injury.”

Section 752(a) of the Act provides that in making its determination of likelihood of continuation

or recurrence of material injury--

(1) IN GENERAL.-- . . . the Commission shall determine whether revocation of

an order, or termination of a suspended investigation, would be likely to lead to

continuation or recurrence of material injury within a reasonably foreseeable time. The

Commission shall consider the likely volume, price effect, and impact of imports of the

subject merchandise on the industry if the order is revoked or the suspended investigation

is terminated. The Commission shall take into account--

(A) its prior injury determinations, including the volume, price

effect, and impact of imports of the subject merchandise on the industry

before the order was issued or the suspension agreement was accepted, 

(B) whether any improvement in the state of the industry is

related to the order or the suspension agreement, 

(C) whether the industry is vulnerable to material injury if the

order is revoked or the suspension agreement is terminated, and 

(D) in an antidumping proceeding . . ., (Commerce’s findings)

regarding duty absorption . . ..

(2) VOLUME.--In evaluating the likely volume of imports of the subject

merchandise if the order is revoked or the suspended investigation is terminated, the

Commission shall consider whether the likely volume of imports of the subject

merchandise would be significant if the order is revoked or the suspended investigation is

terminated, either in absolute terms or relative to production or consumption in the

United States. In so doing, the Commission shall consider all relevant economic factors,

including--

(A) any likely increase in production capacity or existing unused

production capacity in the exporting country, 

(B) existing inventories of the subject merchandise, or likely

increases in inventories, 

(C) the existence of barriers to the importation of such

merchandise into countries other than the United States, and 

(D) 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.

(3) PRICE.--In evaluating the likely price effects of imports of the subject

merchandise if the order is revoked or the suspended investigation is terminated, the

Commission shall consider whether--

(A) there is likely to be significant price underselling by imports

of the subject merchandise as compared to domestic like products, and 
 6

 There were no imports of HDAN from Ukraine during the period for which data were collected.

 7

 Commerce’s notice is presented in app. A.

I-6

(B) imports of the subject merchandise are likely to enter the

United States at prices that otherwise would have a significant

depressing or suppressing effect on the price of domestic like products.

(4) IMPACT ON THE INDUSTRY.--In evaluating the likely impact of imports of

the subject merchandise on the industry if the order is revoked or the suspended

investigation is terminated, the Commission shall consider all relevant economic factors

which are likely to have a bearing on the state of the industry in the United States,

including, but not limited to--

(A) likely declines in output, sales, market share, profits,

productivity, return on investments, and utilization of capacity, 

(B) likely negative effects on cash flow, inventories, employment,

wages, growth, ability to raise capital, and investment, and 

(C) likely negative effects on the existing development and

production efforts of the industry, including efforts to develop a

derivative or more advanced version of the domestic like product.

The Commission shall evaluate all such relevant economic factors . . . within the context

of the business cycle and the conditions of competition that are distinctive to the affected

industry.

Section 752(a)(6) of the Act states further that in making its determination, “the Commission may

consider the magnitude of the margin of dumping or the magnitude of the net countervailable subsidy. If

a countervailable subsidy is involved, the Commission shall consider information regarding the nature of

the countervailable subsidy and whether the subsidy is a subsidy described in Article 3 or 6.1 of the

Subsidies Agreement.”

Information obtained during the course of the review that relates to the above factors is presented

throughout this report. A summary of data collected in the review is presented in appendix C. U.S.

industry data are based on questionnaire responses of five firms that accounted for virtually all of U.S.

production of agricultural grade HDAN during 2001-06. U.S. import data are based on questionnaire

responses of 10 importers of HDAN from all other sources.6

 Responses by U.S. producers, importers, and

purchasers of HDAN and producers of HDAN in Ukraine to a series of questions concerning the

significance of the existing antidumping duty order and the likely effects of revocation are presented in

appendix D.

COMMERCE’S RESULTS OF EXPEDITED REVIEW

On December 5, 2006, Commerce found that revocation of the antidumping duty order on “solid

agricultural grade ammonium nitrate” from Ukraine would likely lead to continuation or recurrence of

dumping. Table I-2 presents the margins calculated by Commerce in its original investigation and this

review.7
 8

 Section 754 of the Tariff Act of 1930, as amended (19 U.S.C. § 1675(c)).

 9

 19 CFR 159.64 (g).

 10 71 FR 70508, December 5, 2006. 

I-7

Table I-2

HDAN: Commerce’s original and five-year review antidumping duty margins for

producers/exporters from Ukraine

Producers/exporters

Original margin

(percent)

Five-year review

margin (percent) 

J.S.C. “Concern” Stirol 156.29 156.29

All others 156.29 156.29

Source: Antidumping duty order, 66 FR 47451, September 12, 2001, and final results of first expedited review, 71

FR 70508, December 5, 2006.

Commerce has not issued a duty absorption determination with respect to this order.

COMMERCE’S ADMINISTRATIVE REVIEWS

Commerce completed no antidumping duty administrative reviews for solid agricultural grade

ammonium nitrate from the Ukraine.

DISTRIBUTION OF CONTINUED DUMPING AND SUBSIDY OFFSET ACT FUNDS

The Continued Dumping and Subsidy Offset Act of 2000 (“CDSOA”) (also known as the Byrd

Amendment) provides that assessed duties received pursuant to antidumping or countervailing duty

orders must be distributed to affected domestic producers for certain qualifying expenditures that these

producers incur after the issuance of such orders.8

 During the review period, qualified U.S. producers of

HDAN were eligible to receive disbursements from U.S. Customs and Border Protection (“Customs”)

under CDSOA relating to the antidumping duty order on the subject product beginning in Federal fiscal

year 2001.9

 No antidumping duties were paid during 2001-06, so there were no disbursements of

CDSOA funds for ammonium nitrate from Ukraine since the passing of the Byrd Amendment in 2001.

THE SUBJECT PRODUCT

According to Commerce’s scope, the imported product subject to the antidumping order under

review is defined by Commerce as follows:

“Solid, fertilizer grade ammonium nitrate (“ammonium nitrate” or “subject merchandise”)

products, whether prilled, granular or in other solid form, with or without additives or coating,

and with a bulk density equal to or greater than 53 pounds per cubic foot. Specifically excluded

from this scope is solid ammonium nitrate with a bulk density less than 53 pounds per cubic foot

(commonly referred to as industrial or explosive grade ammonium nitrate). The merchandise

subject to this investigation is classified in the Harmonized Tariff Schedule of the United States

(“HTSUS”) at subheading 3102.30.00.00. HTSUS subheadings are provided for convenience

and customs purposes. The written description of the scope of the order is dispositive.”10
 11 HDAN is also known as “34-0-0,” referring to the percent of the individual nutrients in the formulation (34

percent nitrogen by weight with no added phosphorus or potassium, respectively). In comparison, the nonsubject

product NP 33-3-0 has 33 percent nitrogen by weight and a phosphorus content of at least 3 percent. USITC

Publication 3844, Ammonium Nitrate from Russia, Inv. No. 731-TA-856 (Review) March 2006, p. I-10.

 12 The addition of approximately 6 percent fuel oil to the more porous LDAN sensitizes the product to detonate

via an initiator, e.g., blasting caps. 

 13 Material Safety Data Sheet, MSDS No. 2005, U.S. producer Terra, December 7, 2006

(http://www.terraindustries.com, retrieved March 9, 2007). 

 14 Selected other industrial uses of AN synthesis solution reportedly include ***. ***. 

 15 Standard Sales Specification, Terra Nitrogen (UK) Limited, February 5, 2001 (http://www.terraindustries.com,

retrieved March 9, 2007).

 16 Granular HDAN, an irregularly shaped particle typically produced by the drum granulation process, was

formerly produced in the United States by ***. Blue, Johnson and Associates, Inc., September 12, 2006.

 17 Ukrainian HDAN product was variably reported as prills and granular product. *** mentioned granular

product produced in towers, which would imply prills. *** specifically mentioned prills. *** referred to granular

(continued...)

I-8

U.S. Tariff Treatment

Imports of this product are classifiable under Harmonized Tariff Schedule of the United States

(“HTS”) subheading 3102.30.00 as set forth in the following tabulation:

HTS provision Article description

General1 Special2 Column 23

Rates (percent ad valorem)

3102

 

3102.30.00

Mineral or chemical fertilizers, nitrogenous:

Ammonium nitrate, whether or not in

aqueous solution

 Free (2

) Free

1

 Normal trade relations, formerly known as the most-favored-nation duty rate, applicable to Ukraine. 2

 No special rates apply to imports of ammonium nitrate from certain trading partners to the United States. 3

 Applies to imports from a small number of countries that do not enjoy normal trade relations duty status.

Source: Harmonized Tariff Schedule of the United States (2007).

Physical Characteristics and Uses

In its purest form, ammonium nitrate (“AN”) is a white crystalline solid inorganic compound

containing 35 percent N by weight, which melts at 337 degrees Fahrenheit, and is highly soluble in water.

The product is synthesized from ammonia and nitric acid, and has the chemical composition NH4NO3. 

Commercial grade AN is produced in three major forms: (1) subject high-density fertilizer grade

HDAN;.11 (2) non-subject low-density industrial explosives grade LDAN;12 and (3) nonsubject molten

AN synthesis solution (75-89 percent AN).13 Synthesis solution is sold commercially for use in emulsion

explosives and for other industrial applications.14 It is also used in the production of urea ammonium

nitrate (“UAN”) fertilizer solutions. 

HDAN, which is the product covered by the scope of this review and was also the domestic like

product found by the Commission in the original investigation, is produced in the United States

predominately as spherical fertilizer prills averaging about 2.4 millimeters,15 with a guaranteed minimum

analysis of 34 percent plant available N by weight, equally divided between ammonium (NH4

+

) nitrogen

and nitrate (NO3

-

) nitrogen.16 17 The nitrate form is fast-acting and becomes immediately available to
 17 (...continued)

product produced in prilling towers, which would imply prills. *** referred to granular product, but did not provide

details regarding in what form it was produced. Product specifications, e.g., particle size, etc., were not disclosed. 

Producers variably reported the incorporation of MgO stabilizer and surface conditioning agents, similar to that

contained in U.S. product. Foreign producer questionnaire responses (section II-5). 

 18 El Dorado’s E-2 (high-density) ammonium nitrate reportedly remains the industry standard in packaged

explosive materials because of its density, purity, and ability to withstand degradation during storage. These same

purity and storage qualities, as well as excellent solubility, make it ideal for the specialty industrial markets 

(http://www.eldoradochemical.com, retrieved February 27, 2007).

 19 *** of uncoated HDAN is reportedly sold *** for use in emulsion explosives. ***.

 20 Fertilizer Manual, United Nations Industrial Development Organization (UNIDO), Vienna, Austria, and

International Fertilizer Development Center (IFDC) Muscle Shoals, AL, 1998, pp. 220-226.

 21 Material Safety Data Sheet, MSDS No. 004, Terra (http://www.terraindustries.com, retrieved March 9, 2007). 

 22 El Dorado’s E-2 ammonium nitrate prills are developed to meet the needs of the fertilizer industry’s bulk

blenders. Its high density is comparable to the weight and shape of the potassium and phosphorus components,

allowing for easier mixing and reduced separation during transportation to the farmer’s field 

(http://www.eldoradochemical.com, retrieved March 5, 2007). 

 23 When urea is applied to a dry soil surface under hot, humid conditions, urease soil enzyme rapidly hydrolyzes

urea to volatile ammonia and gaseous carbon dioxide unless there is rainfall within a short period of time. For this

reason, urea is typically plowed down, or surface-applied predominately in more temperate climates.

I-9

fertilized plants, while the ammonium form is slower acting. The product contains magnesium oxide

(MgO), an internal stabilizing agent which adds strength and integrity to the prills, and prevents product

degradation which may occur via expansion and contraction of the crystal structure at given ambient

temperatures, especially around 90 degrees Fahrenheit. The prills may also be lightly coated with an

external conditioning agent which prevents atmospheric moisture absorption and provides for freeflowing, anti-caking characteristics, as HDAN tends to be hygroscopic (subject to moisture uptake). 

Uncoated HDAN product is also used to a limited extent in cased or packaged explosives and emulsions,

and in selected specialty industrial markets.18 19 HDAN by itself is a relatively benign compound, but the

product is a strong oxidizer which contains its own oxygen for burning, and which will support the

combustion of given materials under the proper conditions. Therefore, it is important to prevent the

contamination of the product with oxidizable organic materials such as fuel oil and other hydrocarbons

which may potentially create fires and also cause HDAN to decompose and detonate. Charcoal, wood

chips, chlorates, nitrated compounds, finely divided metals, acids, phosphorus, and sulfur should also be

avoided.20 21

HDAN is a specialty niche market nitrogen fertilizer that continues to be favored in selected

applications, although its use has declined during recent years. HDAN may be used by itself for crop

fertilization, or bulk blended with phosphorus (“P”) and potassium (“K”) to produce N-P-K bulk blends.22

The product is fast-acting because its nitrate form is an immediate source of plant-available nitrogen,

while its ammonium form is converted more slowly to nitrate in the soil, and continues to feed the plant

for a relatively prolonged period. The product is popularly used for direct application to the soil surface

on pasture grass and for hay production in the warmer, more humid southern-tier regions of the country

where rapid growth and protein development are paramount for the feeding of cattle, and where nitrogen

losses to the atmosphere via volatilization are minimized, especially compared to solid urea, a higher N

analysis fertilizer.23 It is also popular for direct soil surface application to vegetables and citrus crops

where multiple crops are produced and where rapid growth is important, and also to traditional row crops: 
 24 ***’s U.S. producer questionnaire response (sections IV-B-14; IV-B-16) and ***’s U.S. producer questionnaire

response (sections IV-B-11; IV-B-14).

 25 UAN solutions are more versatile due to the fact that herbicides and pesticides can be incorporated and

distributed with the fertilizer in one pass over the field, and also potentially because of more uniform application. 

 26 ***. ***’s U.S. producers’ questionnaire response (sections II-2, II-3a, and II-3b). 

 27 Terra has modified one of its HDAN prill towers to alternately produce LDAN, principally because of a supply

contract for LDAN and synthesis solution with Orica. Terra press release, July 22, 2005

(http://www.terraindustries.com, retrieved March 5, 2007). 

I-10

corn, wheat, cotton, milo, and tobacco, for example, that may be cultivated under no-till applications

rather than to traditional plow-down.24

Drawbacks of HDAN are its higher cost per unit N compared to the more widely available higher

analysis solid urea (46 percent N) and to the versatile UAN solutions of similar analysis range (28-32

percent N).25 No known new HDAN plants of significance have been built globally in several years,

while new urea and UAN plants continue to be built and proliferate outside the United States. Other

factors are the rapid growth in U.S. LDAN demand, and security issues.26 27

Manufacturing Processes and Channels of Distribution

The HDAN manufacturing process in the United States is similar for the two current producers,

El Dorado and Terra, as both produce prilled products. Product is also moved similarly to downstream

warehouses or other facilities in 1,500 short ton capacity barges, 100 ton rail cars, and 25 ton trucks. El

Dorado’s HDAN is sold under the E-2 trade name, while Terra’s product is sold under the Amtrate®

registered trade mark. The products are believed to be interchangeable for most applications. 

A typical ammonium nitrate synthesis scheme involves the chemical reaction of ammonia with

nitric acid in four basic steps: (1) ammonia synthesis; (2) nitric acid synthesis; (3) ammonium nitrate

synthesis solution production and concentration; and (4) prilling and finishing. Ammonia may be

synthesized onsite, or purchased. Terra produces its ammonia onsite, ***.

The basic HDAN process is initiated by the production of anhydrous ammonia (NH3), formed by

the reaction of hydrogen–stripped from natural gas feedstock–with nitrogen from the air, under conditions

of high temperature and pressure. In a second section of the plant, nitric acid (HNO3) is produced by

transforming ammonia into nitrogen oxides via passage over a platinum gauze catalyst under high

temperature and pressure, and dissolving in water to produce a 57-63 percent nitric acid solution. In a

third section of the plant, ammonium nitrate synthesis solution (85-90 percent AN) is produced by

reacting the nitric acid solution with ammonia in a neutralizer vessel. Next, magnesium oxide (MgO)

stabilizer is injected into the molten ammonium nitrate synthesis solution before it is concentrated to a 99-

percent AN melt and pumped to the top of a multistory prilling tower where AN is sprayed out into

spherical droplets. As the molten droplets fall downward through the tower in a countercurrent upward

flow of air, they cool and solidify by the time they hit the base of the tower. The product is further cooled

at the base of the tower and then may be coated with moisture-inhibiting conditioner in a rotating drum

before screening to size. Alternately, granular HDAN may be produced in some plants by spraying
 28 Process description based on staff industry technical experience and ***.

 29 ***, interview with Commission staff, April 30, 2007.

 30 Certain Ammonium Nitrate from Ukraine, Inv. No. 731-TA-894 (Final), USITC Publication 3448, August 2001,

pp. 4-5. 

 31 COFANT’s Response to Notice of Institution, September 20, 2006, p. 28.

 32 Staff telephone interview with ***.

 33 ***’s U.S. producers’ questionnaire response (section IV-B-16, supplement).

 34 UAN is a liquid fertilizer and specialty application equipment is required, which may not be readily available to

dry fertilizer dealers. It is more expensive to make mixed fertilizer with UAN solution; losses in warm, humid

climates can be significant compared to HDAN. ***’s U.S. producer questionnaire response (section IV-B-16).

 35 ***’s U.S. producer questionnaire response (section IV-B-16).

I-11

molten AN into a rotating drum, pan, or fluid bed granulator.28 HDAN may also be derived from the

nitrophosphate process by reacting precipitated calcium nitrate with ammonia and carbon dioxide to yield

AN and calcium carbonate byproduct. Prilled or granular HDAN is produced from concentrated AN

following the removal of calcium carbonate. *** reportedly produces granular HDAN by this process in

***.29

DOMESTIC LIKE PRODUCT ISSUES

In the original investigation, the Commission found a single domestic like product consisting of

high-density ammonium nitrate (also referred to as HDAN), coextensive with the scope of subject

merchandise as solid fertilizer grade ammonium nitrate products with a bulk density equal to or greater

than 53 pounds per cubic foot.30 In response to a question soliciting comments regarding the appropriate

domestic like product in the Commission’s notice of institution of this review, COFANT agreed with the

definitions of domestic like product and domestic industry stated in the Commission’s Notice of

Institution.31

There are no known domestic like product issues. LDAN could potentially be substituted for

HDAN as it is produced by a similar process and has the same relative nitrogen content. However,

LDAN is more porous and friable, and more susceptible to product degradation than HDAN. Also,

LDAN is heavily regulated by federal agencies such as the Bureau of Alcohol, Tobacco, Firearms, and

Explosives (“ATFE”). Unlike HDAN, a potential buyer must present a certified explosives license to a

qualified distributor to gain access to the product.32 Solid urea is a potential substitute for direct

application HDAN on pasture and hay and other no-till crops in more temperate climates, but the product

is subject to significant volatilization losses on dry soil and in the warm, humid southern-tier climates

where HDAN continues to be the product of choice.33 Additionally, solid HDAN and urea are

incompatible, and cannot be bulk-blended because of their combined propensity to absorb atmospheric

moisture and go into solution under ambient conditions. Furthermore, urea is an organic compound

produced from ammonia and carbon dioxide in separate plants, using different equipment and personnel. 

Urea ammonium nitrate solution (“UAN”) is a nonsubject aqueous liquid physical mixture of ammonium

nitrate synthesis solution and urea.34 Thus, it is produced from a nonsubject ammonium nitrate synthesis

solution, an intermediate product used in the production of HDAN, and nonsubject urea, which is

produced using different process equipment and personnel. Anhydrous ammonia is a high analysis

nitrogen fertilizer which is a gas under ambient conditions, and, as such, must be knifed in under the soil

using specialty equipment.35 Its use is largely confined to the midwestern Corn Belt region of the United

States. Ammonium sulfate is a solid nitrogen product produced from ammonia and sulfuric acid. It does

not contain nitrate nitrogen, has a lower nitrogen content (21 percent N), is acidic in nature, and is

manufactured on different process equipment and personnel relative to HDAN. Calcium ammonium
 36 Domestic interested parties describe CAN as a product containing approximately 80 percent ammonium nitrate

and 20 percent calcium/magnesium carbonate (dolomitic limestone), which typically yields a nitrogen content in the

finished product in the range of 25 to 28 percent. COFANT’s posthearing brief, p. 37. 

 37 ***, e-mail correspondence with Commission staff, April 30, 2007. 

 38 ***, e-mail correspondence with Commission staff, April 4, 16, and 24, 2007. 

 39 Domestic interested parties in this review are El Dorado and Terra, individual members of the Committee for

Fair Ammonium Nitrate Trade (“COFANT”), represented by the law firm of Akin Gump Strauss Hauer & Feld LLP.

 40 COFANT’s Response to Notice of Institution, September 20, 2006, p. 24.

 41 Of the five, *** also produced LDAN. 

I-12

nitrate (“CAN”) is a homogeneous chemically mixed fertilizer product composed typically of slightly less

than 80 percent HDAN maximum and 20 percent limestone minimum. CAN contains about 27 percent

by weight of plant-available nitrogen.36 Nonsubject CAN, unlike HDAN, is not a potentially hazardous

oxidizer subject to regulation.37 CAN may be prepared by the direct injection of ground limestone in the

AN melt prior to prilling or granulation. Physically mixed bulk blends of solid ammonium nitrate with

limestone are not classified as CAN product.38

U.S. MARKET PARTICIPANTS

U.S. Producers

According to domestic interested parties,39 there were two U.S. firms producing HDAN during 

2006;40 the Commission received U.S. producer questionnaire responses from five producers that

manufactured HDAN during 2001-06.41 Relevant information on these firms is presented in table I-3. 

Table I-3

HDAN: U.S. producers, production locations, shares of reported 2006 production, positions on

continuation of the antidumping duty order, parent companies, and production status in 2006

Producer

Production

location(s)

Share of

reported 

production

(percent)

Position on

continuation Parent company

Production

status 2006

Agrium 

Homestead, NE

Kennewick, WA *** (1

) Agrium (Canada) No

Air Products Pace, FL *** ***

Air Products, Allentown,

PA No

El Dorado

Cherokee, AL

El Dorado, AR *** Support

LSB Industries,

Oklahoma City, OK Yes

Potash Corp. Augusta, GA *** ***

Potash Corp. of

Saskatchewan, 

(Canada) ***

Terra Yazoo City, MS *** Support

Terra Industries, Inc.,

Sioux City, IA Yes

 1 In a submission dated February 16, 2007, Agrium stated that ***. 

Note.–Although Simplot was noted as a U.S. producer of AN by the International Fertilizer Development Center (“IFDC”), Simplot

***.

Source: Compiled from data submitted in response to Commission questionnaires, except as noted.

The industry has consolidated since the original investigation when eight firms reported AN production. 

Information on the producers during the original investigation is presented in table I-4.
I-13

Table I-4

HDAN: U.S. producers, production locations, shares of reported 2000 production, positions on the

petition, and parent companies

Producer

Production

location

Share of

reported

production

(percent)

Position on

petition Parent company

Agrium Homestead, NE *** Support Agrium (Canada)

Air Products Pace Junction, FL *** Support Air Products, Pensacola, FL

Coastal Chem Cheyenne, WY ***1 *** Coastal Chem, Houston, TX

El Dorado El Dorado, AR *** Support LSB Industries, 

Oklahoma City, OK

LaRoche2 Cherokee, AL,

Crystal City, MO

*** Support El Dorado3

Oklahoma City, OK

Mississippi

Chemical

Yazoo City, MS *** Support Mississippi Chemical, 

Yazoo City, MS

Nitram Tampa, FL *** Support Nitram was owned by a

statewide Florida

cooperative of chemical

fertilizer producers. The

producer with the largest

share was *** with a ***-

percent share. No other

producer had a share

greater than *** percent.

PCS Nitrogen Augusta, GA *** *** Potash Corp., Canada

Prodica LLC

(formerly UNOCAL)

Kennewick, WA *** Support Union Oil Co. of California,4

El Segundo, CA

Wil-Gro Prior, OK (5

) (6) Williard Grain & Feed, 

Celina, TX

 1 Coastal Chem did not respond to the questionnaire in the final phase of the original investigation; its share of

reported production is based on the questionnaire response provided in the preliminary phase of the original

investigation. 2

 On October 31, 2000, LaRoche sold its HDAN business to LSB Industries.

 3

 El Dorado acquired the LaRoche nitrogen plants at Crystal City, MO and Cherokee, AL on November 1, 2000. 4

 Effective September 30, 2000, Agrium US acquired the fertilizer production assets of Prodica. 5

 Wil-Gro ceased production in December 1999. ***.

6

 Unknown.

Source: Compiled from data submitted in response to Commission questionnaires and from Certain Ammonium

Nitrate from Ukraine (731-TA-894 (Final))–Staff Report.
I-14

Since the original investigation, the industry has contracted, with two producers closing and

several acquisitions and capacity reductions. Significant industry events are noted in table I-5.

Table I-5

HDAN Important industry events, 2000-06

Year Company Description of event

2000 Wil-Gro Closure, capacity loss: Closed February 2000 after being idle since

December 1999.

Prodica LLC Acquisition: Kennewick, WA facility was acquired by Agrium in October

2000.

LaRoche Bankruptcy, divestiture, ***: Filed for Chapter 11 bankruptcy protection in

May 2000 and sold production facitities in Cherokee , AL, and Crystal City,

MO to Orica LLC in August 2000. Subsequently, Orica LLC sold the facilities

to LSB Industries (parent company of El Dorado). ***.

2001 Coastal Chem Acquisition: Acquired by El Paso Energy Corp. in January 2001.

Wil-Gro Acquisition: LSB (parent company of El Dorado) acquired Wil-Gro’s Pryor,

OK facility; however, it did not restart production. 

2003 MCC Bankruptcy: Filed for Chapter 11 bankruptcy protection in May 2003.

El Paso Energy Corp. 

(Coastal Chem)

Acquisition, capacity loss: Dyno Nobel ASA acquired the HDAN facilities of

the former Coastal Chem. HDAN capacity was lost as these facilities now

produce LDAN.

Nitram Bankruptcy, closure, capacity loss: Closed Tampa, FL facility after filing

for bankruptcy protection. Capacity permanently lost as facility was

liquidated.

2004 MCC Acquisition: Acquired by Terra in December 2004.

Potash Corp. Capacity loss: Ceased HDAN production in December 2004 in favor of

LDAN *** production.

El Dorado Capacity loss: Production at Cherokee, AL, was shifted from HDAN to UAN.

2005 Agrium Capacity loss: Ceased HDAN production. The Homestead, NE facility will

operate as a distribution terminal for ammonia and other nitrogen products

and the Kennewick, WA facility will produce nitrogen solutions.

Air Products Capacity loss: The HDAN plant was decommissioned and dismantled after

damage from Hurricanes Ivan (September 2004) and Dennis (July 2005).

Source: Ammonium Nitrate from Russia, USITC Publication 3844, April 2006, table I-5, p. I-14; Ammonium Nitrate from

Russia–Staff Report, p. I-21; and from responses to Commission questionnaires.
 42 In addition, importers’ questionnaires were sent to all domestic producers; ***.

 43 Many items other than HDAN enter the United States under HTS subheading 3102.30, such as LDAN,

ammonium nitrate synthesis (“ANS”) used principally in emulsion explosives, liquid ammonium nitrate in less than

50 percent solution for use in the manufacture of photographic products, mixtures of ammonium nitrate in water

used in hot and cold therapy products, and misclassified UAN solutions (HTS subheading 3102.80). 

 44 Six of these 12 firms generally did not know the countries of origin of their HDAN purchases and they reported

purchases from all suppliers, such that some double-counting is likely.

I-15

U.S. Importers

Importers’ questionnaires were sent to 26 firms identified in proprietary Customs data as

importing ammonium nitrate.42 The importers were importing ammonium nitrate from countries other

than Ukraine, as there were no imports from Ukraine since the antidumping duty order in 2001. Ten

firms reported imports of HDAN, and six firms reported imports of LDAN. Responding firms’ imports of

HDAN and LDAN together account for an average of approximately *** percent of the value of official

ammonium nitrate import statistics from all other sources for the period for which data were collected

(2001-06).43

Table I-6

HDAN: U.S. importers, their locations, and their shares of reported U.S. imports in 2006

* * * * * * *

U.S. Purchasers

Purchasers’ questionnaires were sent to 27 firms identified as purchasers of HDAN. Twelve of

the 13 responding firms reported their HDAN purchases, which totalled 2,366,490 short tons during

2001-06.44 The largest of these purchasers was ***, which reported purchasing *** short tons of HDAN

during the period for which data were collected, but it reported purchases from multiple suppliers and did

not know the countries of origin of its HDAN purchases. 

APPARENT U.S. CONSUMPTION AND MARKET SHARES

Table I-7 presents apparent U.S. consumption for the review period and table I-8 presents U.S.

market shares for the same period. 
I-16

Table I-7

HDAN: U.S. shipments of domestic product, U.S. shipments of imports, and apparent U.S. consumption, 1998-

2000 and 2001-06

Item 1998 1999 2000 2001 2002 2003 2004 2005 2006

Quantity (short tons)

U.S. producers’ U.S. shipments 1,959,789 2,014,854 1,807,145 1,393,412 1,550,097 1,401,992 1,294,570 1,070,037 ***

U.S. shipments of imports from--

 Ukraine *** *** *** 0 0 0 0 0 0

Other sources *** *** *** 494,848 484,658 760,971 595,790 434,571 667,781

Total imports 421,429 540,200 498,582 494,848 484,658 760,971 595,790 434,571 667,781

Apparent consumption 2,381,218 2,555,054 2,305,727 1,888,260 2,034,755 2,162,963 1,890,360 1,504,608 ***

Value ($1,000)

U.S. producers’ U.S. shipments 238,321 207,508 218,878 193,227 176,109 214,711 224,514 219,981 ***

U.S. shipments of imports from--

Ukraine *** *** *** 0 0 0 0 0 0

Other sources *** *** *** 70,619 54,008 111,453 102,044 94,918 157,481

Total imports 40,011 46,363 42,918 70,619 54,008 111,453 102,044 94,918 157,481

Apparent consumption 278,332 253,871 261,796 263,846 230,117 326,164 326,558 314,899 ***

Source: Compiled from data submitted in response to Commission questionnaires.

Table I-8

HDAN: U.S. market shares, 1998-2000 and 2001-06

Item 1998 1999 2000 2001 2002 2003 2004 2005 2006

Quantity (short tons)

Apparent consumption 2,381,218 2,555,054 2,305,727 1,888,260 2,034,755 2,162,963 1,890,360 1,504,608 ***

Value (1,000 dollars)

Apparent consumption 278,332 253,871 261,796 263,846 230,117 326,164 326,558 314,899 ***

Share of quantity (percent)

U.S. producers’ U.S. shipments 82.3 78.9 78.4 73.8 76.2 64.8 68.5 71.1 ***

U.S. shipments of imports from--

Ukraine *** *** *** 0.0 0.0 0.0 0.0 0.0 ***

All other sources *** *** *** 26.2 23.8 35.2 31.5 28.9 ***

Total imports 17.7 21.1 21.6 26.2 23.8 35.2 31.5 28.9 ***

Share of value (percent)

U.S. producers’ U.S. shipments 85.6 81.7 83.6 73.2 76.5 65.8 68.8 69.9 ***

U.S. shipments of imports from--

Ukraine *** *** *** 0.0 0.0 0.0 0.0 0.0 ***

All other sources *** *** *** 26.8 23.5 34.2 31.2 30.1 ***

Total imports 14.4 18.3 16.4 26.8 23.5 34.2 31.2 30.1 ***

Source: Compiled from data submitted in response to Commission questionnaires.
1

 These latter sales were shipped to explosive manufacturers, but such HDAN shipments were not broken out

separately from HDAN shipments for fertilizer use. El Dorado reported that its E-2 HDAN remains the industry

standard in packaged explosive materials because of its density, purity, and ability to withstand degradation during

storage, http://www.eldoradochemical.com/acmina.html, retrieved May 14, 2007. ***. 

2

 In addition to HDAN and other types of fertilizers, dealers frequently sell seeds, feed, and farm equipment.

3

 There were no reported imports of HDAN from Ukraine during 2001-06.

4

 In 2006, *** accounted for *** percent of the total quantity of U.S. HDAN production and *** accounted for

the remaining *** percent. Although there were no U.S. imports of HDAN from Ukraine during 2001-06, imports

of HDAN from Russia, the Netherlands, Romania, and Bulgaria have been some of the important sources of foreign

supply to the U.S. market during this period.

5

 Mississippi Chemical was *** bought by Terra in November 2004; prior to this purchase, Terra did not

produce solid HDAN but produced other types of nitrogenous fertilizers. In all of its U.S. producer questionnaire

responses, *** reported for *** U.S.-produced HDAN (***) and *** U.S.-produced HDAN (***) as all ***

production. During 2001-06, *** (and ***) accounted for approximately *** percent of the total quantity of U.S.-

produced HDAN, *** accounted for *** percent, *** accounted for *** percent, *** for *** percent, and *** for

the remaining *** percent (these figures are based on individual firm data reported during the current investigation).

6

 The H index is also expressed in units of 10,000 such that the H index for HDAN fell from 2854 in 2001 to

2766 in 2006. The U.S. Department of Justice and the Federal Trade Commission consider industries to be highly

concentrated when the H index is above 1800, moderately concentrated when the H index is between 1000-1800,

and unconcentrated when the H index is below 1000 (http://usdoj.gov/atr/public/guidelines/horiz_book/15.html,

retrieved March 27, 2007).

II-1

PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

CHANNELS OF DISTRIBUTION AND MARKET CHARACTERISTICS

U.S. producers and importers sold their HDAN primarily to fertilizer distributors, secondarily to

fertilizer dealers and blenders, and two U.S. producers, ***, also sold some HDAN for use in explosives

during 2001-06.1

 Distributors typically sell HDAN to fertilizer dealers who,2 in turn, sell to farmers. 

Dealer facilities are located in farming areas. During 2001-06, responding U.S. HDAN producers

reported selling approximately 78.7 percent of the quantity of their U.S. HDAN shipments to distributors

and 21.3 percent to dealers and blenders. The responding U.S. importers of HDAN from nonsubject

countries3

 reported selling approximately 97.7 percent of the quantity of their U.S. shipments of the

imported products to distributors and the remaining 2.3 percent to dealers and blenders during this period.

Currently, two U.S. producers, El Dorado and Terra, produce HDAN and sell their products ***

to the U.S. market.4

 During 2001-06, five U.S. producers accounted for most U.S. production of HDAN,5

but due to several factors, including a combination of volatile and generally high natural gas costs plus

increasing costs of handling HDAN due to the introduction of security regulations for the production,

transport, and inventory of HDAN, several U.S. producers either switched from producing HDAN to

producing other products or closed/sold their facilities. While the number of wholesale HDAN suppliers

to the U.S. market appears to have fallen between 2001 and 2006, resulting in increased concentration

between these two years, the supply may have become more competitive when taking into consideration

the size distribution of sellers. Based on reported U.S. shipments of HDAN from U.S. producers and

importers, a Herfindahl (H) index involving the top seven U.S. suppliers fell from 0.2854 in 2001 to

0.2766 in 2006;6

 the H index measures both concentration and size distribution of firms, such that an H
7

 A related concentration measure to the H index is the numbers-equivalent (N) measure, which is the reciprocal

of the H index (expressed in decimal form), and is a measure of the competitive structure of an industry. N measures

the number of equally sized firms that would yield a particular H index. For HDAN, N increased from 3.50 in 2001

to 3.61 in 2006, suggesting that in 2001 it would have required 3.50 equally sized firms to yield the 2001 H index,

while in 2006 it would have required 3.61 equally-sized firms to yield the 2006 H index. These N measures suggest

that competition may have increased from 2001 to 2006 by the increase in the required number of equally sized firms

consistent with the respective H indexes. 

8

 *** U.S. producer questionnaire response, section IV-B-34a. ***. *** asserted that recently distributors and

dealers outside of key HDAN markets have moved away from handling it due to added safety requirements imposed

by the U.S. Coast Guard and state governments. In these areas, according to ***, customers have been forced to use

other forms of nitrogen. However, *** asserted that in the key HDAN consuming areas, farmers demand HDAN

and distributors and dealers continue to supply it (U.S. producer questionnaire response, section IV-B-16a). 

9

 U.S. purchaser questionnaire response, section III-35.

10 During 2006, ***, in descending order, were by far the largest suppliers of HDAN to the U.S. market. 

11 *** purchaser questionnaire response, section III-35.

12 *** reported that these imports are shipped by rail and truck to warehouses in the Southeast; the firm asserted

that imported HDAN arriving in Tampa, FL, started arriving shortly after ***, and that HDAN imports into

Wilmington, NC, started a few months ago (U.S. producer questionnaire response, section IV-B-30b).

13 The Mississippi River system includes the Mississippi River itself and other navigable rivers feeding into the

Mississippi River, such as the Missouri, Ohio, Illinois, and Arkansas rivers.

14 U.S. purchaser questionnaire responses, section III-39.

II-2

value of 1 suggests a monopoly and successive values less than 1 and approaching zero suggest

increasingly less concentration/more competition.7

As the number of U.S. HDAN producers fell to two by 2006, the reported net income for all U.S.

HDAN production, which was a net loss each year during 2001-05, ***. *** commented that ***.8

Purchasers cited first Terra and then El Dorado most frequently as price leaders and one purchaser, ***,

asserted that the firms are the first to raise prices and the last to lower prices.9

 A purchaser-importer, ***,

asserted that *** and the importer *** are the dominant U.S. price leaders by virtue of their large HDAN

production and import quantities, respectively.10 On the other hand, a purchaser-producer, ***, asserted

that *** tend to be aggressive, low-priced sellers of HDAN in the U.S. market because, according to ***,

they take small margins and are quick to liquidate a position.11 

U.S. producers transport HDAN from their plants to their own or their customers’ storage/

distribution terminals, typically located in or near farm areas. Imports of HDAN arrive in the United

States in ships, with an increasing percentage reportedly entering at Tampa, FL, and Wilmington, NC,

ports,12 in addition to the traditional port for fertilizers, New Orleans, LA. The Mississippi River system

serves as an important means for distributing HDAN as a portion of both U.S.-produced and imported

HDAN is transported in bulk by barge to storage and distribution locations throughout the Farm Belt.13

Substantial freight costs relative to product values and the predominance of natural gas as a share of

production costs may limit the marketing range of HDAN suppliers; those HDAN suppliers with

favorable transportation networks and access to low-cost natural gas/ammonia have an advantage over

suppliers subject to high freight rates and using high-cost natural gas/ammonia.

An important characteristic of the U.S. HDAN market has been the volatile and generally high

cost of natural gas and ammonia in the United States during 2001-06 and forecasts of a continuation in

the future of such price patterns. U.S. HDAN producers’ purchase prices of natural gas and/or ammonia

to produce HDAN and forecasts of U.S. prices of these inputs are discussed in detail in Part V. Two U.S.

purchasers, ***, U.S. distributors and/or dealers of fertilizers, commented on the changes in the U.S.

HDAN industry due to high natural gas costs.14 *** asserted that domestic producers have been shutting

down or cutting production due to the high cost of natural gas and the lower cost of imported material.
15 *** reported that it had substituted urea for this volume of HDAN, because its price was much lower than

HDAN (U.S. purchaser questionnaire response, section II-2).

16 E-mail from ***, March 19, 2007.

17 E-mail from ***, March 19, 2007. HDAN in 50-pound bags marked as fertilizer reportedly was an

ingredient in the explosives used in the April 19, 1995, Oklahoma City, OK, bombing of the Alfred P. Murrah

Federal Building (E-mail from ***, March 7, 2006; and http://en.wikipedia.org/wiki/Oklahoma_City_bombing,

retrieved February 19, 2007).

18 Such security measures have also affected distributors, dealers, and the transport companies, including

operators of barges, railroads, and trucks. 

19 *** U.S. producer questionnaire response, sections IV-B-15a and IV-B-28. Annual U.S. production of

HDAN decreased by *** percent during 2001-06, while U.S. apparent consumption of HDAN decreased by ***

percent.

20 U.S. producer and importer questionnaire responses, sections IV-B-25 and III-B-25, respectively. Three U.S.

producers and three importers responded. One of the responding U.S. producers, ***, reported that it did not know

of any security measures, such that only comments of the remaining two responding U.S. producers will be

discussed.

21 U.S. purchaser questionnaire responses, section III-15. Four responding purchasers indicated that no such

security measures have been put in place, while six purchasers reported at least some measures and/or impacts; all

ten responding purchasers were distributors and/or dealers of fertilizer, including HDAN. In addition, two U.S.

purchaser-producers (***) responded; their comments were the same as in their producer questionnaire responses

and are not repeated here. *** indicated that the security measures have not affected their HDAN purchases, which

have been very limited.

II-3

*** asserted that, due to high natural gas prices and regulations from the explosive nature of HDAN,

there are only two producers of HDAN left in the United States and the price of U.S.-produced HDAN

has increased to the point where the producers are no longer competitive. *** reported that this year it

has reduced its purchases from *** tons of HDAN to *** tons and,15 if present prices continue, it will not

be handling HDAN at all. *** also asserted that, due to high natural gas prices in the United States and

very low natural gas prices in several foreign countries, there have been several new nitrogen fertilizer

plants built and to be built in foreign countries (such countries reportedly include, Egypt, Iran, Russia,

Saudi Arabia, and the United Arab Emirates). According to ***, these foreign countries have the ability

to price urea so low as to drive HDAN out of the market, and they have the ability to drive all the U.S.

urea producers out of the market. *** asserted that HDAN is a dying product domestically anyway so it

does not make any difference if the tariff is lifted on the HDAN from Ukraine.

Since September 11, 2001, Federal, State, and Local governments have been imposing a variety

of security measures to protect the U.S. public; some of these measures involve HDAN due to its nature

as an oxidizer. For a number of years, HDAN has been classified by the U.S. Department of

Transportation as a class 9 hazardous material,16 and recently was designated by the U.S. Coast Guard as

“Certain Dangerous Cargo.”17 Recently imposed and potential security measures on HDAN production,

transport,18 and inventory by Federal and State governments reportedly have contributed importantly to

the substantial decrease in both U.S. production and consumption of HDAN during 2001-06.19 U.S.

producers and importers of HDAN were requested in their questionnaire responses to identify the security

measures put in place on HDAN since January 1, 2001 and to discuss the impact of these measures;20 in

addition, U.S. purchasers were also requested to identify such security measures and explain the impact

on their purchases of HDAN.21 The comments of the responding U.S. producers, importers, and

purchasers are shown in the tabulation on the following page.

Another characteristic of the U.S. HDAN market has been the decrease in the U.S. production

and consumption of HDAN during 2001-06, and the degree to which other nitrogenous fertilizers have

substituted for HDAN. U.S. producers, importers, and purchasers have identified several nitrogen
22 U.S. producer questionnaire response, section IV-B-18a and b.

23 U.S. importer questionnaire response, section III-B-19.

24 U.S. purchaser questionnaire response, section III-12.

25 U.S. producer questionnaire response, section IV-B-18c.

26 ***.

II-4

fertilizer substitutes and commented on the limits of such substitution and the likelihood of future

substitution; such substitution appears based on a number of factors, including weather, types of crops,

relative prices, and the availability of HDAN and its alternatives. Due to climate, soil conditions, and

types of plants, farmers/growers in the Southeastern and South-Central United States may be the most

resistant to switching from HDAN to alternatives, while users in other areas of the United States may

switch more readily. A detailed discussion of fertilizer substitutes for HDAN is provided later in Part II

in the U.S. Demand section.

Because HDAN and LDAN have the same chemical structure (NH4NO3), U.S. producers,

importers, and purchasers were requested to discuss to what extent HDAN can be used in explosives and

to what extent LDAN can be used as a fertilizer. In addition, U.S. producers were also requested to

discuss how easily HDAN could be converted to LDAN and how easily LDAN could be converted to

HDAN. Three U.S. producers,22 two U.S. importers,23 and four U.S. purchasers 24 provided useable

responses regarding the uses of HDAN and LDAN. The responses discussing HDAN use in explosives 

and LDAN use as fertilizer are shown in the tabulations on pages II-6 and II-7. 

The two responding U.S. producers, ***, asserted that it was not economically feasible to convert

HDAN to LDAN or LDAN to HDAN. *** provided a detailed response for converting HDAN to LDAN,

but indicated that the process and cost would be the same for converting LDAN to HDAN.25 According

to ***, HDAN can be converted into LDAN by re-melting and solidifying into a lower density particle. 

*** asserted that the process would be energy intensive, crushing the HDAN, dissolving into solution,

concentrating the solution, and repeating the prilling or granulation process. *** indicated that it would

require $***-$*** in new capital and an added process cost of $***/ton to convert 200,000 tons per year. 

Additionally, according to ***, HDAN could be sized into greater surface areas but the resulting poor

flow ability would limit its use to packaged explosives only.26
II-5

Comments regarding U.S. security measures placed on HDAN

Firm Comments

U.S. producers:

*** Since 2001 the following states have put some regulations in place controlling the handling and sale

of HDAN: New York, New Jersey, California, Oklahoma, Michigan, South Carolina, Maryland, and

Nevada. In August 2004, the ATF and the Fertilizer Institute co-sponsored the “America’s Security

Begins With You” campaign. While this is voluntary, it encourages dealers handling HDAN to “protect,

plan, identify, and alert” law enforcement officials of suspicious activity. In the summer of 2004, new

Coast Guard regulations controlling the transportation and handling of HDAN on the water went into

effect. Since the first half of 2005, both the U.S. House and Senate have introduced bills concerning

the handling of HDAN, but nothing has been passed yet. At this time, nothing has been put in place

that has had a material effect on the production, importation, transportation, or storage of HDAN.

*** In 2004, the U.S. Coast Guard implemented legislation that imposed requirements on barge traffic and

shore facilities that handle HDAN. In *** case, the cost of implementing the measures at *** was in

the order of $***. This has inevitably led to some companies who had dock facilities handling HDAN

to decide not to implement the measures and thus cease to handle the product. This, however, has

not caused a significant bottleneck in the trade of HDAN.

U.S. importers:

*** Barge security changed the cost by more than *** after 2001. Warehouse security costs increased by

more then *** after 2001 as well.

*** Security regulations have increased the cost of handling HDAN. ***.

*** Coast Guard implemented HDAN security act in 2004. Warehousing: certifications and

enhancements at river and inland warehouses were implemented requiring fencing, cameras, guards

and extra fire abatements. Cost per terminals approximately $***. Barging: operators needed to be

certified, however many barge lines elected not to take on the insurance premiums, special fleeting

and security measures mandated by the coast guard, thereby limiting the number of carriers able to

transport HDAN, which increased barge costs by *** percent. Trucking: government regulations also

reduced the number of trucking companies willing to handle HDAN, due to HAZMAT certifications and

higher insurance premiums. This has reduced the capability to transport HDAN. All of the issues

have increased HDAN prices.

U.S. purchasers:

*** Coast guard and facility security.

*** Barge freight costs have increased *** percent. Cost of storage due to regulations increased.

*** Transportation costs are double that of other forms of nitrogen.

*** Site security plans on all locations. We now only sell product to farmers we know. No cash sales. 

Tighter security measures in place, such as the following: (1) chain link fence around warehouse

facilities, and (2) barricades to secure fertilizer bins.

*** Kansas City, MO, does not allow HDAN storage in city limits. St. Joseph, MO, has expensive

requirements for storage in city limits. Several storage locations on the river system quit storing

HDAN rather than spend the money to meet Army Corp of Engineers’ requirements for unloading

barges of HDAN. Railroads charge more to haul HDAN than urea. All these changes make it harder

and more expensive to get HDAN and has resulted in our switching *** percent of our HDAN

purchases to urea. I expect to switch *** percent to urea from HDAN in the future, with the way it

looks like the price is going in the future.

*** Higher transportation costs due to heightened security measures for HDAN.

Source: Compiled from data submitted in response to Commission questionnaires.
II-6

Comments regarding HDAN used in explosives

Firm Comments

U.S. producers:

*** ***.

*** By itself, HDAN is unsuitable as a commercial explosive in the U.S. mining and construction

industries. HDAN, properly sized through crushing, screening, or other means continues to be used

as an ingredient in high explosives and blasting agents. HDAN used in explosives represents a tiny

share of the total HDAN sold. Other than for this limited legal use of HDAN in explosives, we are

aware of no other instances since 2001 where HDAN has been used as an explosive in the United

States.

*** HDAN can theoretically be used as an explosive, but it is not practical to do so. The higher density of

HDAN makes it less suitable for explosives purposes than LDAN, because the HDAN cannot

efficiently absorb fuel oil. Also, HDAN made in the United States for agricultural purposes is coated

with an organic anti-caking agent, eliminating its potential use as an emulsion to be used in

explosives. To our knowledge, HDAN has not been used as an explosive, either intentionally or

accidentally, during 2001-06.

U.S. importers:

*** HDAN crushed and combined with fuel oil would be a blasting agent when used with some type of

initiator (blasting cap).

*** HDAN is an oxidizer and can be used as an explosive.

U.S. purchasers:

*** Very feasible to use HDAN in explosives.

*** Our firm uses a small quantity of high-density industrial grade ammonium nitrate in the manufacture of

industrial grade commercial explosives. This is an HDAN grade comprised of small prills with a

tackifier to allow diesel oil to stick to the surface of the prills (does not penetrate molecules as with

LDAN). This process using HDAN has been around since the 1980's. This type of explosive is used

in large bore holes (6-8" in diameter) and HDAN is used because it has more bulk than LDAN.

*** Feasible, if allowed into hands of wrong people; example includes Oklahoma City Federal Building. 

Urea can and has been used; example includes first attack on world trade building.

*** Not personally aware of any instances other than newspaper accounts of Oklahoma City, OK and

Texas City, TX.

Source: Compiled from data submitted in response to Commission questionnaires.
II-7

Comments regarding LDAN used as fertilizer

Firm Comments

U.S. producers:

*** It is technically possible to use LDAN as a fertilizer, as it has the same nitrogen content as HDAN. 

However, it is not preferred due to its lower density and comparative particle instability that creates a

tendency for LDAN to segregate when mixed and spread with other fertilizer materials. It does not

store or transport well due to its low density. Prior to the Oklahoma City bombing (in which, according

to ***, the ammonium nitrate used was LDAN intentionally sold as fertilizer), LDAN was used as a

fertilizer in some limited instances. We are unaware of any sales of LDAN into the fertilizer market

since that time.

 Compared to HDAN prills, LDAN prills are smaller and more porous. The higher porosity aids in

the retention of fuel oil, but makes LDAN more fragile. As a result, LDAN transported over long

distances becomes compressed under its own weight and suffers structural damage, making it even

more prone to segregation when blended with other fertilizer materials. Because it is relatively fragile,

there is limited trade of LDAN over long distances and limited use as a fertilizer, even before the

Oklahoma City bombing. LDAN does not have a long shelf life and mines, for example, generally do

not have facilities for long-term storage. In most cases, LDAN is shipped to mine sites when needed

and used promptly. HDAN’s structure, on the other hand, enables it to be traded over long distances

and to withstand the rigors of the fertilizer distribution chain, where the product is stored and then

shipped from producer to dealer and to retailer prior to being purchased by end users.

*** Ammonium nitrate emerged as a major nitrogen fertilizer in the United States in the late 1940's and in

the 1950's by TVA technology developments that provided for the production of quality solid

ammonium nitrate from wartime nitrogen capacity. Ammonium nitrate was not available in the United

States in significant quantity for use as a fertilizer until near the end of WWII, when the supply of

ammonium nitrate produced for explosives use exceeded wartime demand. Initially, therefore,

ammonium nitrate used as fertilizer was LDAN, made suitable for agricultural use by the addition of

different coating agents that prevented caking, moisture absorption, etc. Supported by regional and

national market or “introduction” programs and with intensification of U.S. agriculture, ammonium

nitrate use grew rapidly and became the solid nitrogen fertilizer material of choice by the mid-1950's. 

***.

 LDAN could theoretically be used as a fertilizer because it has the same chemical composition as

HDAN. However, while LDAN occasionally would show up in the agricultural market, subsequent to

the Oklahoma City bomb incident, this practice has ceased to our knowledge. LDAN would not be

suitable as a fertilizer, in any event, because it lacks a coating or incorporated dessicant agent, and

will more easily break down or cake during handling, as compared to HDAN.

U.S. importers:

*** LDAN could be used as a fertilizer but its density is not favored. Chemically HDAN and LDAN are the

same.

*** LDAN can be used as a fertilizer. No knowledge of LDAN used as a fertilizer.

U.S. purchasers:

*** Very feasible.

*** Not aware of any use in our area.

*** LDAN was used extensively as fertilizer for 10 or 20 years. In our use it was just as good as HDAN

except it did not spread as evenly because it was too light and it took more bin space and more trips

with tender trucks because it was so light weight.

Source: Compiled from data submitted in response to Commission questionnaires.
27 Short-run effects discussed in the supply and demand sections refer to changes that could occur within 12

months, unless otherwise indicated.

28 Data on U.S. HDAN production, production capacity, capacity utilization, inventories, and exports are shown

in detail in Part III.

29 High variable costs in the U.S. HDAN industry can make it difficult to expand production even in the short

run if the level of product prices does not allow the producers to at least cover their variable costs. The two U.S.

producers of HDAN during 2006 responded in their questionnaires to a request for information on their variable and

fixed costs to produce HDAN during 2006. These responses indicated that U.S. HDAN producers’ variable costs,

which were dominated by natural gas and/or ammonia costs, averaged *** percent and their fixed costs averaged

*** percent of their total costs to produce HDAN during this period (U.S. producer questionnaire responses, section

IV-B-22a). Natural gas/ammonia costs alone reportedly accounted for almost *** percent of their total HDAN

production costs.

30 U.S. producer questionnaire responses, section IV-B-34c.

31 U.S. purchaser questionnaire response, section III-31.

II-8

SUPPLY AND DEMAND CONSIDERATIONS27

U.S. Production28

Based on available information, U.S. HDAN producers have the ability to respond to changes in

demand with moderate changes in the quantity of domestic shipments of their U.S.-produced HDAN. 

The main factors contributing to this degree of responsiveness are available unused capacity and the

availability of production alternatives. However, other factors, such as insufficient export markets and

the low level of inventories, tend to moderate this degree of responsiveness. In addition, a high ratio of

variable costs to total costs in the domestic HDAN industry requires product prices to be sufficiently high

to trigger additional production from excess capacity.29

Two responding U.S. producers, ***, reported the combination of selling prices for HDAN and

purchase costs for natural gas and/or ammonia that would enable them to increase production in a 12-

month period.30 *** reported that, if its ammonia costs in 2006 remained unchanged, it would increase

HDAN production by 10 percent and by 20 percent, if the price of HDAN were to increase by ***

percent and *** percent, respectively. Alternatively, the firm reported that, if its price of HDAN in 2006

remained unchanged, it would increase HDAN production by 10 percent and by 20 percent, if its costs of

ammonia were to decrease by *** percent and *** percent, respectively. *** reported that its HDAN

production has increased since 2003 as prices have increased and, according to the firm, the market has

become more balanced. According to ***, however, its decisions to increase or decrease production are

affected by many other factors, including customer demand, which changes from year-to-year; *** cited

as an example that droughts can result in smaller purchases by its customers, and hence production

declines. *** reported that its production levels of HDAN over the next 12 months ***. However, the

firm indicated that ***.

U.S. purchasers were requested in their purchaser questionnaire responses to report if they were

ever unable to obtain HDAN from a domestic producer since January 1, 2001.31 Nine of 13 responding

purchasers, including two purchaser-producers ***, reported that they were able to obtain U.S.-produced

HDAN, whereas the 4 remaining purchasers reported that they were unable at times to obtain U.S.-

produced HDAN. These latter four purchasers provided the following explanations. *** asserted that its

supplying U.S. producer sold out and shut down. *** asserted that natural gas was at $10 plus so the

Terra plant in Yazoo City, MS, cut production and purchased imported barges for inventory. *** asserted

that since the closing of Nitram and Air Products in Florida, there have been no domestic suppliers who

distribute to Florida. *** asserted that Terra has been unable to supply HDAN from time to time.
32 U.S. producer questionnaire responses, section IV-B-34a. ***. (U.S. producer questionnaire response,

section IV-B-34a.)

33 U.S. producer questionnaire response, section IV-B-34a.

34 U.S. producer questionnaire responses, sections IV-B-35 and IV-B-36.

35 *** U.S. producer questionnaire response, section IV-B-33a.

II-9

Industry Capacity

The average of all U.S. HDAN producers’ reported annual capacity utilization rates fluctuated

during 2001-06, and ranged between a low of *** percent during *** to a high of 77.5 percent during

2002. The total annual level of reported HDAN production capacity decreased from 2,047,578 short tons

in 2001 to *** short tons in 2006, or by *** percent. While low output levels may lead to increased unit

costs, the substantial share of variable costs to total costs may limit the impact of a downturn in output on

unit costs. *** reported a required minimum capacity utilization rate of *** percent to achieve acceptable

economies of scale for its HDAN production, while *** reported a required minimum capacity utilization

rate of *** percent.32 *** asserted that calculating a capacity utilization rate for 2006 by dividing

production by capacity provides a misleading result for several reasons.33 First, due to extremely high

natural gas costs in early 2006, *** reported that it ***, which curtailed HDAN production. In addition,

***. *** reported that economies of scale were still achieved in those months where HDAN production

was not reduced. *** also stated that a combination of favorable raw material costs and favorable product

prices resulted in HDAN operations ***. The reported information suggests that some unused capacity

could be used to increase HDAN production, but how much unused capacity could be used appears to

depend on a number of factors, including alternative production opportunities and the condition that

selling prices of HDAN would have to be sufficient to at least cover variable costs.

*** provided data on the cost and time to add extra U.S. production capacity by constructing a

new U.S. production facility and by increasing HDAN production capacity at current U.S. facilities.34 ***

estimated that a new HDAN plant at a greenfield site that produces *** short tons of HDAN annually

would cost at least $*** million and require *** to construct, whereas *** estimated costs of a Greenfield

plant *** at about $*** million, which also included equipment to produce ***. *** also reported that it

***. *** reported that, given the current declining market, ***. *** reported that to add capacity of any

significance to an existing plant would vary considerably on whether or not it was possible to debottleneck existing equipment, possibly adding up to a *** percent increase in capacity, which would

probably cost *** dollars. The reported information suggests that ***.

Inventory Levels

Available data show that U.S. producers’ annual end-of-period inventories of HDAN relative to

their annual U.S. shipments averaged *** percent during 2001-06, and were *** percent in 2005 and ***

percent in 2006. ***.35 These data indicate that U.S. producers had a limited ability to use inventories to

increase shipments of HDAN to the U.S. market in the short run and it appears that this will continue in

the future.

Export Markets

Exports were not substantial for U.S. HDAN producers during January 2001-December 2006. 

U.S. exports of HDAN accounted for *** of all U.S. producers’ total shipments during this period. ***
36 *** accounted for the remaining *** of total U.S. producers’ HDAN exports during 2001-06.

37 *** U.S. producer questionnaire response, section IV-B-32.

38 U.S. producer questionnaire response, section II-5.

39 The data on the subject foreign producers’ HDAN production, capacity, capacity utilization, and shipments

are shown in detail in Part IV.

40 Four Ukrainian producers (Cherkassy, Rivneazot, Severodonetsk, and Stirol) are believed to account for all

the HDAN produced in Ukraine. 

41 Foreign producer questionnaire response, sections II-15 and III-11.

II-10

accounted for *** percent of the reported exports during 2001-0636 and ***.37 The U.S. export figures

suggest that there was virtually no ability for U.S. producers to divert shipments of HDAN to or from

alternate markets in response to changes in the price of HDAN during January 2001-December 2006, and

prospects appear equally restricted for any such future diversion of shipments in the short run.

Production Alternatives

*** reported producing other products on at least some of the equipment and with at least some

of the employees that they use to produce HDAN.38 *** . ***. The reported information suggests that

U.S. producers could alter their shipments of HDAN to the U.S. market in the short run in response to

changes in relative prices of alternative production products.

Subject Import Supply From Ukraine39

Because there were no U.S. imports of HDAN from Ukraine during 2001-06, the following

discussion of Ukrainian HDAN producers to supply the U.S. market during this period and in the future is

implicitly based on the absence of the U.S. antidumping duty order. In addition, because the four

Ukrainian producers have not exported their HDAN to the United States in the last several years,40 they

were unable to answer several questions in the foreign producer questionnaire asking the foreign

producers to discuss their ability to supply HDAN to the U.S. market.

Based on available information, the four HDAN producers in Ukraine have the ability to respond

to changes in the price of HDAN with large changes in the quantity of shipments of Ukrainian HDAN to

the U.S. market. The main factor contributing to this degree of responsiveness is the existence of

substantial alternate markets for HDAN but also due to excess capacity; inventory levels have generally

been low.

The Ukrainian HDAN producers reported any changes they expected in the availability of their

HDAN to the U.S. market in the future if the antidumping order was revoked.41 Two Ukrainian HDAN

producers, ***, reported increased availability, and *** reported that their firms did not anticipate selling

to the United States. *** provided some additional useable responses. *** stated that no recurrence of

dumping would occur if the antidumping order were revoked, due to increases in raw material costs in

Ukraine to produce HDAN and increases in transportation costs. *** also reported that the firm has

successfully oriented its HDAN exports to non-U.S. markets and HDAN demand in Ukraine has grown

substantially. *** reported that its HDAN would be available to the U.S. market if prices were favorable

and the U.S. antidumping duty order were revoked; it commented that it may be possible to switch

HDAN shipments from other export markets to the U.S. market.

Two Ukrainian HDAN producers, ***, reported that their HDAN sold in their home market was

fully interchangeable with their HDAN exported to third-country markets; and *** reported that there

was partial interchangeability between its home-market shipments and third-country market exports,
42 Foreign producer questionnaire response, section III-3.

43 Foreign producer questionnaire response, section III-9.

44 Ibid.

45 *** reported that peak seasonal demand for HDAN in Ukraine was December-April, in preparation for spring

seed time, and the rest of the year was off-peak season, when the supply of Ukrainian-produced HDAN exceeds

domestic demand (foreign producer questionnaire response, section III-21). 

46 *** Ukrainian producers reported that their export prices of HDAN are determined by negotiations between

buyers and sellers; the producers monitor prices obtained from several sources, including specialized marketing

firms such as FERTECON (responses to supplemental foreign producer questionnaire question IV received on April

26, 2007 from *** and on April 30, 2007 from ***).

II-11

because HDAN produced for export contained ***.42 The two Ukrainian producers, ***, that responded

reported that they were unaware of requirements in the U.S. market because they have not exported

HDAN to the United States.

All four Ukrainian HDAN producers reported increases in their natural gas costs during 2001-06

***;43 their reported purchase prices of natural gas in Ukraine are discussed in detail in Part V. One of

the Ukrainian producers, ***, reported that natural gas costs have increased its price of HDAN and,

according to ***, if the existing antidumping duty order is revoked, no dumping of HDAN from Ukraine

would occur because of the substantial growth in production costs of HDAN in Ukraine.44 On the other

hand, ***, reported that demand dictates the price of HDAN, not natural gas prices. In addition, ***

asserted that HDAN sales in Ukraine depended on seasonal demand and,45 during those periods when

there is no domestic demand, HDAN was produced mainly for export. According to ***, export selling

prices of HDAN are determined by taking into account the recommended price level by the Ukraine

Ministry of Economy; this recommended price is based on analysis of current conditions in the world

market for HDAN.46

Industry Capacity

The average of the four Ukrainian HDAN producers’ reported annual capacity utilization rates

fluctuated during 2001-06, ranging between a low of 58.0 percent during 2001 to a high of 82.9 percent

during 2002, with a rate of *** percent in 2006. Projected figures were reported showing expected

capacity utilization rates of *** percent in 2007 and *** percent in 2008. The total annual level of

reported HDAN production capacity increased from 2,191,343 short tons in 2001 to *** short tons in

2006, or by *** percent. These data indicate that there was unused HDAN capacity in Ukraine to

increase shipments to the U.S. market during 2001-06, and that this excess capacity is projected to

continue during 2007 and 2008.

Inventory Levels

Available data show that Ukrainian producers’ annual average beginning-period inventories of

HDAN, of *** short tons, averaged *** percent of their average annual total HDAN shipments during

2001-06; these inventories were forecast to average only *** short tons during 2007-08. These data

indicate that Ukrainian producers had some ability to use inventories to export HDAN to the U.S. market

during 2001-06, but the estimated inventories during 2007-08, which are *** than historical levels, may

indicate a very limited ability to use inventories to export HDAN to the United States in the future.
47 Ukrainian HDAN producers reported exporting HDAN to the following specific countries since 2001: ***

(foreign producer questionnaire response, section II-13). 

48 Foreign producer questionnaire responses, II-12a.

49 Domestic interested parties’ posthearing brief, p. 3.

50 Foreign producer questionnaire responses, section II-10.

51 U.S. purchaser questionnaire responses, section III-25.

52 Ibid.

II-12

Alternate Markets

The four HDAN producers in Ukraine shipped a majority of their HDAN to customers in their 

home market, exported most of the rest to third-country markets,47 and internally consumed/transferred

the remaining amount during 2001-06. During this period, the quantity of HDAN shipped to customers in

the home market accounted for *** percent of the producers’ total HDAN shipments, exports to thirdcountry markets accounted for *** percent, and internal consumption/transfers accounted for the ***

percent. This shipment pattern was projected to continue in 2007 and 2008. These data indicate that the

Ukrainian HDAN producers have flexibility to use alternate markets to increase or decrease HDAN

shipments to the U.S. market in the short run in response to price changes in the U.S. market.

Three of the four Ukrainian HDAN producers, ***, reported that Ukrainian HDAN has been

subject to antidumping duties ranging from 29.26-33.25 percent since 2001 in the European Union

(EU);48 on April 19, 2007, the EU announced its decision to continue the antidumping duty order on

imports of ammonium nitrate from Ukraine.49 Ukrainian producers exported *** short tons of HDAN to

the EU, or *** percent of their total HDAN shipments. In addition, *** reported that Ukrainian HDAN is

subject to antidumping duties ranging from 19.0-30.0 percent in Brazil. *** reported that its exports of

HDAN are not subject to tariff or non-tariff barriers to trade.

Production Alternatives

Two of the four Ukrainian producers, ***, reported that they can switch production between

HDAN and other products using the same equipment and labor to produce HDAN, whereas the remaining

two Ukrainian producers, ***, reported that they were unable to switch production between HDAN and

other products.50 *** reported that it could switch production to ***. *** reported that it could switch

production ***.

Nonsubject Imports

Based on U.S. producer and importer questionnaire responses, all U.S. imports of HDAN were

from nonsubject countries, although those from Russia are subject to quotas and reference/floor prices

under a suspension agreement. Based on official U.S. import statistics for ammonium nitrate and

questionnaire responses of U.S. producers and importers, the major sources of U.S. imported HDAN

during 2001-06 were, in descending order, Romania, the Netherlands, Bulgaria, Russia, Spain, and in

2006, Georgia and Lebanon. Nine of ten responding U.S. purchasers reported that they did not know of

any new HDAN suppliers in the U.S. market since 2001 and they did not expect any new suppliers in the

future.51 One other purchaser-producer, ***, reported that *** have begun importing HDAN into the

United States, but their sources of HDAN are not necessarily new sources.52 In another part of its

purchaser questionnaire response, *** asserted that some foreign urea producers have such a low cost of

natural gas compared to U.S. producers that they will drive out any HDAN or urea producers in the
53 U.S. purchaser questionnaire response, section III-14b.

54 FERTECON, Nitrogen Fertilizer Data File, January 2007, submitted by domestic interested parties on 

April 10, 2007, in their prehearing brief, exh. 6.

55 Ibid.

56 Total U.S. annual commercial nitrogen fertilizer consumption fluctuated but increased by approximately 4.4

percent between crop year 2001 and crop year 2006 (a crop year, sometimes referred to as a fertilizer year, runs from

July 1 in one year to June 30 of the following year); crop year 2006 represents the most recent data available for

such figures. These figures are based on data published jointly by the Association of American Plant Food Control

Officials and The Fertilizer Institute in various issues of Commercial Fertilizers.

57 Various issues of Commercial Fertilizer, the Association of American Plant Food Control Officials and The

Fertilizer Institute.

58 Domestic interested parties’ posthearing brief, pp. 5-6, and exhs. 7 and 9.

59 Based on forecasted figures in FERTECON, Nitrogen Fertilizer Data File, January 2007, submitted by

domestic interested parties on April 10, 2007, in their prehearing brief, exh. 6. On the other hand, North American

(United States and Canada) annual total commercial nitrogen fertilizer demand is expected to *** during this period

(Global Fertilizers and Raw Materials Supply and Supply/Demand Balances 2006-2010, International Fertilizer

Industry Association, Michel Prud’homme, June 2006, p. 14).

II-13

United States, and, according to ***, they have built and continue to build huge urea production plants

with low-cost natural gas supplies.53

The top 10 countries exporting HDAN during 2005 (the most recent year historical data are

available) accounted for *** percent of total world exports of HDAN, or *** million short tons out of a

world total of *** million short tons.54 The top 10 countries in descending order of quantity exported and

their shares of world exports during 2005 are shown in the following tabulation; these countries are

expected to remain the top exporting countries for HDAN through 2015.55

* * * * * * *

U.S. Demand

Demand for HDAN, as measured by U.S. apparent consumption figures calculated from U.S.

shipment data reported in U.S. producer and importer questionnaire responses, generally decreased during

2001-06. U.S. apparent consumption of HDAN (used in single- and multi-nutrient fertilizers and other

uses) decreased irregularly from 1,888,260 short tons of HDAN in 2001 to *** short tons of HDAN in

2006, or by *** percent.56 Based on U.S. consumption of single-nutrient nitrogen fertilizers at the farm

level, HDAN usage generally decreased from 1,552,941 short tons of HDAN (528,000 short tons of

contained nitrogen) in crop year 2001 to 961,764 short tons of HDAN (327,000 short tons of contained

nitrogen) in crop year 2006 (the most recent period for which such data were available), or by 38.1

percent.57 El Dorado and Terra asserted that U.S. demand for HDAN will decline and level off in the

range of *** short tons annually, with the majority of consumption remaining concentrated in the

southeastern United States.58 In addition, FERTECON forecasts that U.S. annual HDAN consumption is

expected to *** during calendar years 2006-10, to *** short tons by 2010.59

Based on available information, U.S. aggregate demand for HDAN is likely to respond

moderately to changes in HDAN prices. Several factors contribute to this degree of price sensitivity,

including the degree to which the other principal single-nutrient nitrogen fertilizers are substitutable with

HDAN and the cost share of HDAN in the care of pastures and the growing of crops using this fertilizer. 

The demand response to changes in HDAN prices may also be affected by the availability of supply of

HDAN in the U.S. market, perhaps leading some end users to consider alternatives where, before the

supply availability became a concern, they would not have considered alternatives.
60 Two U.S. producer questionnaire responses, section IV-B-14, of ***; three U.S. importer questionnaire

responses, section III-B-15, of ***; and seven U.S. purchaser questionnaire responses, section III-8, of ***.

61 *** U.S. producer questionnaire response, section IV-B-4. In addition, a purchaser, *** reported that in

Georgia the peak demand for HDAN occurs during February-July, with HDAN applied to wheat during February

and April, to pasture during May, and as a top-dress for cotton during June and July (staff telephone interview with

***).

62 *** U.S. producer questionnaire response, section IV-B-4.

II-14

Demand Characteristics

HDAN is a dry nitrogen fertilizer and its major advantage is that 50 percent of its nitrogen is in a

readily available form for use by plants. The principal uses for HDAN fertilizer are, in reported

descending order of U.S. HDAN use, forages (pasture and hay), cotton, corn, wheat, citrus/vegetables,

and tobacco.60 It should be noted that other single-nutrient nitrogen fertilizers are also used on these

crops, including importantly urea for forages; anhydrous ammonia, UAN, and urea for corn; and UAN

and urea for cotton, wheat, and citrus/vegetables. U.S. HDAN consumption reportedly peaks during the

spring planting season, which generally occurs between February-June, while July-January is considered

the off-season.61 U.S. HDAN producers continue to operate during the off-season to build inventories,

which supply the lower levels of off-season demand and are used to fill the distribution system in time for

the peak season.62

The overall U.S. demand for HDAN depends on various factors, but is primarily affected by the

following: planted acreage and application rates, agronomic factors, weather conditions, relative prices

and substitutability of other single-nutrient nitrogen fertilizers, availability of HDAN, and the cost share 

of HDAN in the pasture and crops using this fertilizer. These demand factors are discussed below.

Planted acreage and application rates

Total U.S. acres planted for crops that are the principal users of HDAN fertilizer are shown by

crop years 2001-06 in the following tabulation.

Crop

year

Hay1 Cotton Corn Wheat Tobacco1 Total

(Thousands of acres)

2001 63,516 15,769 75,702 59,432 433 214,852

2002 63,942 13,958 78,894 60,318 427 217,539

2003 63,383 13,480 78,603 62,141 411 218,018

2004 61,966 13,659 80,929 59,674 408 216,636

2005 61,729 14,245 81,779 57,229 297 215,279

2006 60,807 15,274 78,327 57,334 339 212,081

TOTAL 375,343 86,385 474,234 356,128 2,315 1,294,405

 1 Acres harvested.

Source: National Agricultural Statistics Service, USDA, http://www.nass.usda.gov/QuickStats, retrieved

March 23-24, 2007.
63 Acres-planted data for hay were not available; harvested acreage tends to understate the actual number of

acres fertilized.

64 Acres-planted data for tobacco were not available; harvested acreage tends to understate the actual number of

acres fertilized.

65 Food and Agricultural Policy Research Institute, http://www.agweb.com/get_article, retrieved, March 7, 2007;

and NASS, Agricultural Statistics Board, USDA, Prospective Plantings, March 30, 2007.

66 Ibid.

67 E-mail from ***. It should be noted that during crop year 2004 the application rates for total nitrogen

fertilizer were based on the following shares of total acres for each crop that were fertilized with nitrogen fertilizers: 

96.0 percent of the corn acres were fertilized, while 85.0 percent of the cotton acres and 88.0 percent of the wheat

acres were fertilized during this crop year (Ibid.).

68 Finding Alternatives to HDAN as a Nitrogen Source for Tall Fescue Pastures, Robert Kallenbach, Division of

Plant Sciences, and Matt Massie, Southwest Center, University of Missouri-Columbia, 2005,

http://aes.missouri,edu/swcenter/fieldday/2005/, retrieved March 8, 2007. 

69 These figures are reported in Commercial Fertilizers 2006, the Association of American Plant Food Control

Officials and The Fertilizer Institute, April 2007, p. 20. Please note that the 92.9-percent share of total U.S. HDAN

agricultural consumption of these top 20 HDAN consuming states likely understates the actual figure, because

consumption figures of specific nitrogen fertilizers, including HDAN, by state do not include specific nitrogen

fertilizers in the various fertilizer blends such as NPK and NP/NK.

II-15

As seen in the tabulation, acres harvested for hay,63 which was the HDAN use closest to forage

for which such data were available (forage was reportedly the largest use of HDAN), generally decreased

from 63.5 million acres in 2001 to 60.8 million acres in crop year 2006, or by 4.3 percent. Acres planted

for cotton generally fluctuated but decreased from 15.8 million acres in crop year 2001 to 15.3 million

acres in crop year 2006, or by 3.2 percent. Acres planted for corn fluctuated but increased from 75.7

million acres in crop year 2001 to 78.3 million acres in crop year 2006, or by 3.4 percent. Acres planted

for wheat fluctuated but decreased from 59.4 million acres in crop year 2001 to 57.3 million acres in crop

year 2006, or by 3.5 percent. Acres harvested for tobacco64 generally decreased from 433,000 acres in

crop year 2001 to 339,000 acres in crop year 2006, or by 21.7 percent. Recently, ethanol use reportedly

has become the driving force in acres planted for corn; U.S. corn acreage planted is projected to be over

90 million acres for 2007.65 Reportedly, U.S. farmers have not planted 85 million acres of corn since

1949. Wheat planted reportedly increased to 60.1 million acres in crop year 2007, but is expected to drop

in following years to 57 million acres by 2016.66

Application rates of total nitrogen from all nitrogen fertilizers for corn, cotton, and wheat were

available for crop year 2004 (the most recent period for which such data were available). Corn showed

the highest application rate of total nitrogen fertilizer (including HDAN as well as other nitrogen

fertilizers), at 137 pounds of nitrogen per acre; this was followed by wheat at 90 pounds per acre and

cotton at 84 pounds per acre.67 In addition, a common application rate of total nitrogen from all nitrogen

fertilizers for tall fescue used as forage reportedly is about 75 pounds of nitrogen per acre.68

The 20 largest HDAN consuming states in crop year 2006 (the most recent period such data were

available) accounted for 92.9 percent of total U.S. agricultural HDAN consumed during this period and

approximately 50 percent of total U.S. nitrogen fertilizer consumed (in short tons of contained nitrogen)

during this period.69 The 20 largest HDAN fertilizer consuming states, their percentage share of total U.S.

agricultural HDAN consumed in crop year 2006, and the principal agricultural uses for HDAN in each

state are shown in table II-1. The principal agricultural uses of HDAN, by state, were reported in 
II-16

Table II-1

HDAN: U.S. agricultural consumption of HDAN by states, crop year 2006, and principal HDAN agricultural

uses

State

HDAN consumption

Principal agricultural uses of HDAN

Quantity

(short tons

of product)

Share of

total HDAN

(percent)

Missouri 172,662 17.9 Forages (cool season grasses), corn, wheat

Tennessee 142,052 14.7

Forages (warm season grasses), cotton, corn, wheat,

tobacco

Alabama 111,671 11.6 Forages (warm season grasses), cotton, corn, wheat

Texas 82,987 8.6 Forages (warm season grasses), cotton, corn, wheat

Kentucky 54,864 5.7 Forages (fescue and orchard grass), corn, wheat, tobacco

Mississippi 41,800 4.3 Forages (warm season grasses), cotton, wheat

Kansas 36,643 3.8 Forages (cool season grasses), corn, wheat

North Carolina 35,485 3.7 Forages, cotton, tobacco

Georgia 34,250 3.6 Forages (warm season grasses), cotton, wheat, corn

Arkansas 29,482 3.1 Forages (warm season grasses), wheat

Louisiana 28,682 3.0 Forages (warm season grasses), cotton, wheat

Wyoming 23,497 2.4 Forages (cool season grasses)

Florida 22,799 2.4

Forages (warm season grasses), citrus and vegetables,

cotton, sugar cane

Oklahoma 19,089 2.0 Forages (warm season grasses), wheat

Iowa 12,985 1.3 Pasture, hay, wheat, small amount of corn

Nebraska 10,129 1.1 Forages (cool season grasses)

Colorado 9,548 1.0 Pasture, hay, wheat, vegetables

Montana 8,954 0.9 Forages (cool season grasses)

Maine 8,793 0.9 Potatoes, pasture

South Carolina 8,522 0.9

Forages (warm season grasses), tobacco, cotton, sod,

vegetables

Subtotal 894,894 92.9

All other 68,816 7.1

TOTAL 963,710 100.0

Note: Cool season grasses include brome, fescue, and ryegrass for grazing, whereas warm season grasses include bermuda

grass.

Source: Compiled from data submitted in response to Commission questionnaires, and Commercial Fertilizers 2006, the

Association of American Plant Food Control Officials and The Fertilizer Institute, April 2007.
70 U.S. producer questionnaire response, section IV-B-14. In addition, *** reported additional crop information

by state (***).

71 U.S. importer questionnaire response, section III-B-15.

72 U.S. purchaser questionnaire response, section III-8.

73 Commercial Fertilizers 2005 and 2006, the Association of American Plant Food Control Officials and The

Fertilizer Institute, April 2006 and 2007. Although each of these four states also consumed other nitrogenous

fertilizers, the percentage decline in HDAN consumption in these states was larger than that of all the other

nitrogenous fertilizers used in these states. California was the only one of the four states that saw an increase in total

nitrogen fertilizer consumption in crop year 2006, as it substantially increased consumption of anhydrous ammonia

and nitrogen from multinutrient fertilizers. The other three states–Idaho, Oregon, and Washington–each consumed

less total nitrogen fertilizer in crop year 2006 compared with crop year 2005, despite increasing their use of UAN

and urea. Of these three latter states, Oregon saw the biggest decline in total nitrogen fertilizer consumption during

crop year 2006, because it also consumed substantially less anhydrous ammonia and multinutrient fertilizers

containing nitrogen.

74 On average, only 40 percent of the nitrogen applied as fertilizer is used by the crop, with the rest largely lost

through volatilization/denitrification (lost to the atmosphere) or leached from the soil (Modern Organics, “Low

Fertilizer Efficiency Reduces Yield Potential and Increases Production Costs,” http://www.modernorganics.com). 

Other studies show that, although ammonia loss from urea-containing fertilizers can cause crop-yield reductions due

to nitrogen deficiencies, the frequency and extent of nitrogen losses from urea fertilizers are less than commonly

believed. Even when conditions are considered ideal for ammonia loss (lots of residue and urease, warm

temperatures, and moist soil), losses are unlikely to exceed 20 percent of the surface-applied urea. Higher losses are

possible from surface applications on sandy soils (Managing Urea-Containing Fertilizers, Larry G. Bundy,

Professor and Extension Soil Scientist, Department of Soil Science, University of Wisconsin-Madison, Prepared for

the 2001 Area Fertilizer Dealer Meetings, November 27-December 6, 2001; and Management practices affecting

nitrogen loss from urea, D.E. Kissel, D.A. Whitney, and R.E. Lamond, Kansas State University Ext. Publ. MF-894,

Kansas State University, Manhattan, KS, 1988).

75 All nitrogen fertilizers attract water (salt effect) and, therefore, can cause damage to the seed or seedling if

applied too closely to the young crop, particularly in coarse dry soil.

II-17

questionnaire responses of one U.S. producer (***),70 two U.S. importers (***),71 and five U.S.

purchasers (***).72 It should be noted that the three West Coast states--California, Oregon, and

Washington–and Idaho, which were all included in the top 20 HDAN users in crop year 2005, dropped

out of the top 20 in crop year 2006, because their combined HDAN usage fell substantially, by 171, 733

short tons of material during this period, or by 90.1 percent.73 During this period the only remaining

Western producer, Agrium, stopped producing HDAN and total U.S. HDAN production fell to two U.S.

producers, El Dorado in Arkansas and Terra in Mississippi. 

Agronomic and weather conditions

Agronomically, the choice of the most appropriate nitrogenous fertilizer is based principally on

soil and weather conditions and on application techniques in order to provide nitrogen to the crop with 

minimum loss of nitrogen in the soil74 and to avoid harm to the plant.75 HDAN and UAN have less

tendency to lose nitrogen to the atmosphere than urea; HDAN, urea, and UAN are applied to the surface

of the soil, although urea is also frequently plowed into the soil, and anhydrous ammonia, because it is

applied as a gas, is knifed into the soil. Moist soil and mild weather are the best conditions for applying

nitrogen fertilizers and minimizing loss of nitrogen to the atmosphere; rainfall within 2-3 days of applying

nitrogenous fertilizer is considered to be ideal to move the surface-applied nitrogenous fertilizers, such as

HDAN, urea, and UAN into the soil. If the soil is too wet, however, the nitrogen can be lost by leaching

out of the soil. If the soil is too dry, in clumps, and/or sandy, nitrogen, including that from anhydrous

ammonia, can be quickly lost by volatilization. Because HDAN, UAN, and urea (the latter is also plowed
76 Anhydrous ammonia is used principally in pre-plant and pre-emergence applications. If the spring planting

season is delayed because of weather, or is excessively wet, farmers may use HDAN and/or urea instead of

anhydrous ammonia which takes much longer to apply than the other nitrogenous fertilizers.

77 Based on short tons of contained nitrogen, these four single-nutrient nitrogenous fertilizers together averaged

73.3 percent of total U.S. commercial nitrogen fertilizer consumption (based on short tons of contained nitrogen)

during the 2001-06 crop years. (Various issues of Commercial Fertilizers, the Association of American Plant Food

Control Officials and The Fertilizer Institute.)

II-18

into the soil for some applications) are applied to the surface of the ground, the amount of surface

moisture and foliage (especially stubble/residue from the previous crop) is important. Excessive foliage,

which can occur with no-till or minimal-till practices, will keep the ground surface moist and prevent the

fertilizer from reaching the soil. Enzymes in the foliage combined with warm, moist conditions promote

fast production of nitrogen into ammonium, which, in turn, raises the surrounding pH above 7.0. High

pH levels lead to the reformation of nitrogen into ammonia, which is easily lost to the atmosphere if at the

surface of the ground or, if in the soil, when the soil is dry, in clumps, and/or sandy. Excessive foliage

may also lead to nitrogen loss to the atmosphere through denitrification by converting nitrates into

nitrogen gas, which is rapidly lost to the atmosphere. Cold weather greatly reduces both volatilization

and denitrification.

Excessively wet or hard ground (the latter very dry or frozen) can make it difficult or impossible

to operate the equipment used to knife anhydrous ammonia into the soil. If such conditions occur in the

fall planting season, farmers may wait until spring to apply nitrogen fertilizer and then will likely use

additional HDAN or urea, substituting, at least partly, for anhydrous ammonia.76 HDAN, urea, and UAN

are used principally in the spring in pre-emergence, side-dress, and top-dress applications, while

anhydrous ammonia is commonly applied in the late fall in the Corn Belt, where frozen ground,

thereafter, prevents appreciable nitrogen loss.

Substitute products

Demand for HDAN is also affected by the substitutability of HDAN with other fertilizers.

Principal substitutes for HDAN include anhydrous ammonia, UAN, and urea--all single-nutrient

nitrogenous fertilizers.77 Total annual U.S. commercial nitrogen fertilizer consumption increased during

the 2001-04 crop years, but then decreased in crop years 2005 and 2006. This trend was accompanied by

varying annual shares of the four major single-nutrient nitrogenous fertilizers (based on short tons of

contained nitrogen). Total U.S. nitrogen fertilizer consumption and the various forms and types of

nitrogen fertilizer during crop years 2001-06 are shown in table II-2.

As seen in table II-2, total U.S. nitrogen fertilizer consumption increased from 11.5 million short

tons of contained nitrogen in crop year 2001 (also known as a fertilizer year) to 12.0 million short tons in

crop year 2006, or by approximately 4.4 percent. HDAN averaged 5.4 percent of consumption of the four

major single-nitrogenous fertilizers during crop years 2001-06, whereas anhydrous ammonia averaged

35.4 percent, UAN 31.6 percent, and urea 27.5 percent. HDAN was the only one of the four major

single-nutrient nitrogenous fertilizers that decreased in consumption during this period, by 38.1 percent. 

HDAN consumption also decreased continuously as a share of total nitrogenous fertilizer consumption

during crop years 2001-06, from 4.6 percent in crop year 2001 to 2.7 percent in crop year 
78 UAN, which incorporates in liquid form both ammonium nitrate and urea, can be easily mixed with other

nutrients and with herbicides and insecticides so that a single pass will apply all the required materials; use of UAN

in existing irrigation facilities/equipment further reduces application costs.

79 It is not known, however, to what extent HDAN was used as the source of nitrogen in the multinutrient

fertilizers versus other forms, such as urea. 

II-19

Table II-2

U.S. nitrogen fertilizer consumption, by product form, 2001-061

Fertilizer form

2001 2002 2003 2004 2005 2006 2001 2002 2003 2004 2005 2006

(Thousands of short tons of contained nitrogen) (Share of total annual nitrogen consumption

(percent))

Single-nutrient:

 AA 3,015 3,177 3,148 3,336 3,164 3,134 26.1 26.5 26.0 25.6 25.6 26.0

 UAN 2,634 2,610 2,798 3,138 2,918 2,828 22.8 21.7 23.1 24.1 23.7 23.5

 Urea 2,311 2,438 2,517 2,592 2,393 2,466 20.0 20.3 20.8 19.9 19.4 20.5

 HDAN 528 533 522 519 482 327 4.6 4.4 4.3 4.0 3.9 2.7

 Other N solns.2 115 109 105 140 138 119 1.0 0.9 0.9 1.1 1.1 1.0

 Aqua ammonia 69 55 79 106 86 82 0.6 0.5 0.7 0.8 0.7 0.7

Subtotal 8,672 8,922 9,169 9,831 9,181 8,956 75.2 74.3 75.8 75.5 74.4 74.4

Multinutrients3 2,304 2,500 2,315 2,600 2,574 2,467 20.0 20.8 19.1 20.0 20.9 20.5

Other4 559 587 608 597 581 621 4.8 4.9 5.0 4.6 4.7 5.1

Total nitrogen 11,535 12,009 12,092 13,028 12,336 12,044 100.0 100.0 100.0 100.0 100.0 100.0

 1

 Fertilizer years (also known as crop years), ending on June 30 of the indicated year; 2006 data are preliminary and subject to revision.

 2

 Solutions with lower nitrogen concentrations than UAN.

 3

 Includes NPK blends, and NP/NK compounds and blends.

 4

 Includes ammonium sulfate, ammonium thiosulfate, calcium nitrate, sodium nitrate, and natural organic materials.

Source: Commercial Fertilizers 2006; a cooperative project of the Association of American Plant Food Control Officials, Inc., and the Fertilizer

Institute, Washington, DC, April 2007.

2006. Of the four major single-nutrient nitrogenous fertilizers, UAN and urea increased in both absolute

amounts and in their relative shares of total nitrogen fertilizer consumption during crop years 2001-06;

UAN increased in absolute amount by 7.4 percent during this period and its relative share increased from

22.8 percent during crop year 2001 to 23.5 percent during crop year 2006,78 while urea increased in

absolute amount by 6.7 percent and its relative share increased from 20.0 percent during crop year 2001

to 20.5 percent during crop year 2006. Nitrogen in multinutrient fertilizers, another important source of

nitrogen fertilizer, also increased absolutely and in its relative share of total nitrogen fertilizer

consumption during crop years 2001-06.79

Each of the major single-nutrient nitrogen fertilizers has its own advantages and disadvantages,

and substitution among these fertilizers depends on the intended crop, soil assay, the method of tilling, 

weather conditions, agronomic factors, and relative fertilizer prices and availability. Prices of the four

major single-nutrient nitrogenous fertilizers are discussed in detail in Part V. The price data show that on

a per-nitrogen-unit basis (20 pounds of nitrogen), anhydrous ammonia is generally the least expensive of

the four major single-nutrient nitrogenous fertilizers, followed in increasing order of expense by urea,

UAN, and HDAN (the most expensive of the four).
80 Proper soil conditions, such as a damp soil, are necessary to retain the ammonia gas long enough to allow soil

microorganisms to nitrify the ammonia gas to allow plants to absorb the nitrogen. Excessively wet soil or

frozen/hard ground will prevent proper use of the application equipment, and dry, sandy, or lumpy soil will facilitate

volatilization (escape of nitrogen into the atmosphere) with anhydrous ammonia.

81 An additional advantage of UAN is that, like HDAN, a portion of its nitrogen is in the form of nitrates, which

can be readily used by plants. Twenty-five percent of the contained nitrogen in UAN is in this readily available

form.

82 Potassium and phosphate are two other major soil nutrients also important for the growth of plants and

pasture, but these nutrients tend to remain in the soil when not absorbed by the plants and, therefore, are not applied

as frequently as nitrogen. The majority of the nitrogen applied in commercial fertilizers is gone in 60 days

(McDowell County Center Forage News, “Fertilizer Prices and Usage,” North Carolina State University A&T State

University Cooperative Extension, http://mcdowell.ces.state.nc.us/newsletters/forage/01-03/, March 2001).

83 Certain Ammonium Nitrate from Ukraine, USITC Pub. 3448, August 2001, pp. II-8-9.

84 Nitrogen in nitrate form can be used readily by plants, making HDAN fast-acting.

85 Although all applied nitrogenous fertilizers eventually convert completely to the nitrate form of nitrogen

(NO3) that can then be used by plants, 50 percent of the nitrogen in HDAN and 25 percent of the nitrogen in UAN

are already in the nitrate form of nitrogen (NO3). Urea and anhydrous ammonia take up to two weeks or more to

(continued...)

II-20

Anhydrous ammonia is a toxic gas at room temperature and pressure, so it is often stored and

shipped more safely as a liquid by cooling and pressurizing this form of nitrogen in pressure containers;

its 82.2-percent nitrogen content is the highest of all nitrogen fertilizers and offsets high storage and

shipping costs, making it the lowest-cost fertilizer in terms of contained nitrogen. The dangerous nature

of anhydrous ammonia, the expensive equipment required to inject the gas into the soil, and the slow

process of applying the gas may limit the use of this form of nitrogen fertilizer.80 

Urea has the highest nitrogen content of the surface-applied nitrogen fertilizers (46 percent), is

safe to store, and is easy to handle. It is a dry fertilizer that can be blended with other fertilizers (except

HDAN in the dry form) and is applied with similar broadcasting methods as HDAN. Urea has a slower

rate of conversion of available nitrogen to the soil than HDAN. Urea can volatilize, that is, lose a portion

of its nitrogen to the atmosphere, especially with dry soil and/or hot temperatures, but this loss is from a

high level of nitrogen. Urea is generally less expensive to purchase on a per-unit nitrogen basis than

HDAN.

UAN is an aqueous mixture produced from the hot liquid of both urea and ammonium nitrate; the

nitrogen content in UAN typically ranges from 28 to 32 percent and its liquid form helps retard nitrogen

volatility. This solution is easy to handle, can be more uniformly applied to the soil than its principal

alternatives, and is easily stored.81 Another advantage of UAN is that it can be mixed with other nutrients

such as potassium and phosphate and with herbicides and pesticides which can all be applied at the same

time, requiring only one pass across the field.82 UAN can also be metered into irrigation water, thereby

foregoing the need for special application equipment, or, if applying from a tank, a boom-and- pressure

sprayer can be obtained at a modest cost.83 The lower nitrogen content of UAN makes its shipping costs

more expensive on a per-unit nitrogen basis than anhydrous ammonia, urea, and HDAN; in cold

conditions (below 32 degrees Fahrenheit), only 28 percent and 30 percent UAN can be used, further

increasing its shipping costs per unit of nitrogen.

HDAN contains 34 percent nitrogen by weight, has a relatively high assay of nitrogen in nitrate

form (50 percent of total),84 and may be blended with other solid fertilizers, except urea, for broadcast

onto fields. HDAN is less subject to volatilization than other products in hotter weather because the

nitrate portion will not evaporate or dissipate as a result of the heat, which would reduce the amount of

nitrogen in the soil. However, HDAN (and UAN) are susceptible to nitrogen-leaching loss as soon as

they are applied.85 Prescribed application of HDAN does not burn plants, which could cause a setback in
85 (...continued)

convert their nitrogen to the nitrate form. This form of nitrogen is not held tightly by soil particles and can be

leached from the soil with excessive rains, especially on lighter-textured soils, making HDAN and UAN particularly

susceptible to nitrogen loss through leaching. 

86 Ibid, p. II-8.

87 U.S. producer questionnaire response, section IV-B-16.

88 U.S. importer questionnaire response, section III-B-17.

89 U.S. purchaser questionnaire response, section III-10.

90 ***.

91 ***.

92 ***.

93 The polymer coating reportedly reduces nitrogen loss through volatilization and allows the plant to more

efficiently obtain the nitrogen.

94 U.S. producer questionnaire response, section IV-B-16c. One of the responding U.S. producers, ***, also

asserted that HDAN is not directly affected by changes in the price of urea since HDAN has more specialized uses. 

According to ***, anhydrous ammonia and HDAN are not easily substituted so there is less of a price impact, and

HDAN is applied on pastures and specialty crops in regions of the country where, according to ***, UAN is less

likely to be effective. 

95 U.S. importer questionnaire response, section III-B-17c.

96 U.S. purchaser questionnaire response, III-10c.

II-21

their growth; therefore, it is a popular source of nitrogen for no-till crops and for top/side dressing. A

major disadvantage is that HDAN draws moisture from the air and, under extreme conditions, may

become combustible and explosive. As discussed earlier in Part II, the security measures implemented on

HDAN production and handling since January 2001 have led to increased costs and reduced availability

of this fertilizer. Another disadvantage is that HDAN is generally more costly on a per-unit-of-nitrogen

basis than any of the other major nitrogenous fertilizers and, therefore, its use reportedly is restricted

mostly to specialty crops.86

U.S. producers,87 importers,88 and purchasers89 were requested in their questionnaire responses to

report in descending order of importance up to three top substitutes for HDAN. The responding firms

included four U.S. producers,90 three U.S. importers,91 and five U.S. purchasers;92 U.S. producers and

importers that also reported as U.S. purchasers were not counted more than once, as long as their

responses remained the same from one type of questionnaire to another. The tabulation on the following

page shows the number of responses, by type of firm, for each of the reported fertilizers, by first, second,

and third most likely substitutes for HDAN.

As shown in the tabulation, a total of six fertilizers were reported as possible substitutes for

HDAN. Urea (including ESN, the polymer coated urea)93 was identified most frequently as the most

likely substitute for HDAN, possibly owing to its dry form, its similarity to HDAN, its higher nitrogen

content (46 percent) than HDAN (34 percent), and generally its lower price than HDAN (on a nitrogen

unit basis). UAN was identified most frequently as the second most likely substitute for HDAN, and both

UAN and nitrogen solutions were cited with the same frequency as the third most likely substitutes for

HDAN. The three responding U.S. producers,94 three responding importers,95 and two of the three

responding purchasers96 asserted that changes in the prices of substitutes have not affected the price or

quantity of HDAN in the U.S. market since January 1, 2001. The remaining responding purchaser, ***, 
97 Ibid.

98 U.S. producer questionnaire response, sections IV-B-15 and IV-B-16b.

99 U.S. importer questionnaire response, sections III-B-16 and III-B-17b.

100 U.S. purchaser questionnaire response, sections III-9 and III-10b.

II-22

Alternatives to HDAN

Number of U.S. firms reporting

Producers Importers Purchasers Total

Substitute #1:

 Anhydrous ammonia - - 1 1

 Ammonium sulfate - - 1 1

 Calcium ammonium nitrate - - 1 1

 ESN (polymer-coated urea) 1 - - 1

 Urea 3 3 2 8

Substitute #2:

 Anhydrous ammonia 1 - - 1

 Calcium ammonium nitrate - 1 - 1

 UAN 2 1 1 4

 Urea - - 1 1

Substitute #3:

 Anhydrous ammonia - 1 - 1

 Ammonium sulfate 1 - - 1

 Nitrogen solutions 1 - 1 2

 UAN - 1 1 2

Source: Compiled from data submitted in response to Commission questionnaires.

asserted that price changes in substitutes affect the demand for HDAN.97 According to ***, (1) when

urea is priced more than 8 cents per nitrogen unit (NU) lower than HDAN, farmers switch to it for wheat

and pasture--presently urea is priced 8 cents per NU lower; (2) when UAN is priced more than 8 cents per

NU less than HDAN, farmers switch to it for wheat, pasture, and hay--presently UAN is priced 8 cents

per NU lower; (3) when anhydrous ammonia is priced more than 8 cents per NU lower than HDAN,

farmers switch to it for corn–presently, anhydrous ammonia is priced 15-20 cents per NU lower.

U.S. producers,98 importers,99 and purchasers100 were also requested to discuss in their

questionnaire responses any factors that would affect the substitution of each reported alternative product

for HDAN. Although not commenting on any specific possible substitute for HDAN, one U.S. producer,

***, asserted that prior to its exit from the HDAN industry in ***, product substitution was limited in the

Southeast due to many crop and geography-specific factors, including soil conditions, planting methods,
101 U.S. producer questionnaire response, section IV-B-15a.

102 Ibid.

103 U.S. importer questionnaire response, section III-B-16.

104 U.S. purchaser questionnaire response, section III-B-10b.

105 In Missouri, tall fescue grass grows on more than 12 million acres and provides forage for more than four

million beef cattle in this state. About one-half of this acreage reportedly receives nitrogen fertilizer in the spring

(March or early April) and in late summer.

106 Finding Alternatives to HDAN as a Nitrogen Source for Tall Fescue Pastures, Robert Kallenbach, Division

of Plant Sciences, and Matt Massie, Southwest Center, University of Missouri-Columbia, 2005,

http://aes.missouri,edu/swcenter/fieldday/2005/, retrieved March 8, 2007. 

107 Ibid.

108 Ibid.

109 On the other hand, a purchaser, ***, reported that calcium ammonium nitrate, a compound fertilizer, was

priced higher on a nitrogen unit basis than HDAN (U.S. purchaser questionnaire responses, section III-10b).

II-23

weather, and design of application equipment.101 The firm reported that it saw little substitution of other

products for HDAN in the markets that it served.102 On the other hand, a responding U.S. importer, ***,

asserted that dealer regulatory issues, such as security, reporting, and insurance for warehouse and

transportation will result in replacement of HDAN mainly by urea and UAN and to a much smaller extent

by polymer coated urea.103 

Several other comments of responding U.S. producers, importers, and purchasers reported the

advantages of HDAN over substitutes, such as low nitrogen volatility, especially in the warmer parts of

the United States, specialized equipment that is required for anhydrous ammonia and UAN, and farmer

long-standing preference. In addition, a purchaser, *** asserted that HDAN was the fertilizer of choice

for pastures and that urea and UAN could not be used on pastures.104 On the other hand, the University of

Missouri reported that HDAN and urea have been the most popular sources of nitrogen for spring and

late-summer fertilization of tall fescue grass for forage,105 and because of the higher price of HDAN and

increasing security concerns of HDAN, urea is quickly becoming the most widely used nitrogen source

for forage production.106 This is reportedly due to urea’s wider availability and lower cost per NU

compared to HDAN. However, up to 40 percent of the nitrogen applied to pastures as urea can be lost

due to volatilization if rainfall does not occur within 48 hours of application, such that farmers are

looking for a reliable and inexpensive source of nitrogen for pastures.107 Some promising non-volatilizing

fertilizers are ammonium sulfate and specially coated or treated urea that inhibits volatilization.108

The reporting firms also cited disadvantages of HDAN vis-a-vis substitutes, such as higher cost

per NU compared with other single-nutrient nitrogenous fertilizers,109 lower nitrogen content than

anhydrous ammonia or urea, and availability concerns for HDAN as some dealers and transporters have

elected not to handle this fertilizer due to increased security measures and risk. Three U.S. producers also

provided some additional comments regarding substitution, which are shown in the tabulation on the

following page.
110 U.S. producer questionnaire response, section IV-B-17.

111 U.S. importer questionnaire response, section III-B-18.

112 U.S. purchaser questionnaire response, section III-11.

II-24

U.S. producers’ questionnaire comments discussing substitutes for HDAN

*** ***.

*** Urea is strictly ammoniacal and more volatile than HDAN, whereas half of the nitrogen in

HDAN is in ammoniacal form and half is in nitrate form. The nitrate form of nitrogen in

HDAN is immediately available to the plant, and has the advantage of being fast-acting,

which has advantages for crops where farmers reap multiple harvests, such as forages.

 HDAN is much less volatile than other forms of nitrogen fertilizer, and less of the

nitrogen content is lost into the atmosphere. This characteristic is important when a

nitrogen product is applied to the soil surface and not incorporated into the soil (e.g., notill and top-dressing), particularly in hotter-climate regions where the potential for

volatilization is greater. This is one reason that HDAN’s consumption is relatively greater

in the southeast quadrant states, because HDAN is immune to the conditions that can

severely affect the performance of UAN and urea, such as soil pH, temperature, amount

of time sitting on the soil before being incorporated by rain, wind speed, and soil

moisture. If conditions were ideal when using urea and/or UAN, results could be

expected to closely resemble HDAN, but conditions are rarely ideal and that can be

costly to the grower.

*** Urea and HDAN can be interchanged to a limited extent; retailer storage space, retailer

sales programs, and the security issues can influence which product is used. Recently,

distributors and dealers outside of key HDAN markets have moved away from handling it

due to added safety requirements imposed by the U.S. Coast Guard and state

governments. In these areas, customers have been forced to use other forms of

nitrogen.

 However, a key advantage that HDAN has over other nitrogen fertilizers is low

volatility. In hot, humid climates, more nitrogen will reach the plant with HDAN than from

any other nitrogen fertilizer. As a result, HDAN consumption for direct application is

concentrated in the Southeastern quadrant of United States. This same concept applies

to pasture applications as well, where HDAN is the primary source of nitrogen for

pastures in the southern states. In the key HDAN consuming areas, farmers demand

HDAN and distributors and dealers continue to supply it. In addition, for applications or

regions where the unique characteristics of HDAN are most important to farmers (e.g.,

less volatilization) farmers are much less likely to switch.

Source: Compiled from data submitted in response to Commission questionnaires.

U.S. producers,110 importers,111 and purchasers112 were also requested in their questionnaire

responses to discuss any changes in the number or types of products that can be substituted for HDAN

since January 1, 2001. Two of four responding U.S. producers, all three responding importers, and four

of the eight responding U.S. purchasers reported that there were no new substitutes for HDAN. 

Responses of the two U.S. producers and four purchasers discussing new substitutes for HDAN are

shown in the tabulation on the following page.
113 U.S. producer questionnaire response, section IV-B-11.

114 U.S. importer questionnaire response, section III-B-12.

115 U.S. purchaser questionnaire response, section III-4.

116 Another importer, ***, reported that HDAN costs accounted for 100 percent of the total cost of the pasture

(U.S. importer questionnaire response, section III-B-12). This response, however, does not appear to take into

account other costs, such as the cost of machinery and labor required to apply the HDAN.

117 *** reported that a recent USDA report showed that in 2005 all fertilizers accounted for between 3.8 percent

and 13.9 percent of total production costs (including overhead) and from 11.2 percent to 28.9 percent of total

operating costs (U.S. producer questionnaire response, section IV-B-11).

II-25

Questionnaire comments regarding presence of new substitutes for HDAN

U.S. producers:

 *** Agrotain was introduced to try to limit the nitrogen losses of urea when applied to

the soil surface. However, the added cost of this additive usually negates the cost

advantages of urea on a NU basis.

 *** Although there have been attempts to produce and market coated urea products,

which are supposed to reduce volatilization (such as Agrotain), these products have

met with very little success and have not made any significant inroads in the market.

U.S. purchasers:

 *** Slow release urea.

 *** NP 33-3-0 (nitric phosphate), which was imported from Russia was used in place of

HDAN, but this product has not been available in the last two years.

 *** ESN is a polycoated form of urea that stops the volatilization/denitrification. The

ESN form of urea contains 44% nitrogen and is produced by Agrium. *** ESN

releases nitrogen too slowly to be used effectively on wheat. ESN, which is priced

*** HDAN, is a good substitute for HDAN. The polycoating of ESN adds about *** to

the price of the urea.

 *** Introduction of NK 21-0-21 from Russia was priced *** the blend produced by ***

when it uses HDAN.

Source: Compiled from data submitted in response to Commission questionnaires.

HDAN cost share

Although U.S. producers,113 importers,114 and end-user purchasers 115 were requested to provide

the cost of the farmer/growers’ end product accounted for by HDAN, only two U.S. producers (***) and

one U.S. importer (***) provided useable responses.116 Two of the three responding firms (***) reported,

as requested, specific crops/plants and the estimated cost share of HDAN to the total production costs of

each reported crop/plant.117 These responses are shown in the tabulation on the following page. Based

on the reported information for specific crops/plants, HDAN cost shares ranged from 11 percent to 37

percent.
118 FERTECON, Nitrogen Fertilizer Data File, January 2007, submitted by domestic interested parties on 

April 10, 2007, in their prehearing brief, exh. 6.

119 Ibid.

120 Ibid.

121 Ibid.

122 U.S. foreign producer questionnaire response, section III-2c.

II-26

Firm End use

HDAN cost share

(percent)

*** Cool season grasses 27

Warm season grasses 30

Cotton (two bales per acre) 17

Corn 37

Milo/grain sorghum 29

Wheat 23

Certain vegetables 30

Tobacco 30

*** Pasture 11

Corn 11

Wheat 16

Note: Cool season grasses include brome, fescue, and ryegrass for grazing, whereas

warm season grasses include Bermuda grass.

Source: Compiled from data submitted in response to Commission questionnaires.

Foreign Demand

Estimated HDAN demand in the top 14 consuming countries, excluding the United States, during

2006 is estimated to account for almost *** percent of world HDAN consumption during this period.118

These 14 countries and their estimated shares of world consumption are shown in the following

tabulation.

* * * * * * *

World consumption of HDAN is forecast to *** during 2006-08.119 Consumption of HDAN is

forecast to *** during this period in the following top consuming foreign countries: Egypt, Russia,

Turkey, Ukraine, and the United Kingdom; whereas HDAN consumption is forecast to *** in the

following top foreign countries: Brazil, Bulgaria, China, France, Lithuania, and Poland.120 Consumption

of HDAN is *** in the following top foreign countries: Hungary, Romania, and Uzbekistan.121 Two

Ukrainian HDAN producers, ***, reported that they expected demand for HDAN in Ukraine to increase

in the future due to the health of the Ukrainian economy.122
123 U.S. purchaser questionnaire response, section III-16.

124 One of these seven purchasers, ***, asserted that no U.S.-produced HDAN was available for distribution in

Florida.

125 U.S. purchaser questionnaire response, section III-32b.

II-27

SUBSTITUTABILITY ISSUES

The degree of substitution between domestic and imported HDAN depends upon such factors as

relative prices, quality (e.g., prill size, density, coating, etc.), availability/reliability of supply, U.S.

transportation costs, and conditions of sale (e.g., price discounts/rebates, lead times between order and

delivery dates, payment terms, product services, etc.). Based on available information, staff believes

there is at least a moderate degree of substitution between domestic HDAN and HDAN imported from

Ukraine and other import sources.

U.S. purchasers were requested to report in their purchaser questionnaire response whether

purchasing HDAN produced in the United States was an important factor in the firms’ purchases.123

Seven of the 12 responding U.S. purchasers reported that it was not a factor,124 whereas the remaining 5

purchasers reported that it was a factor. Three of these five latter purchasers reported buying 100 percent

of their HDAN from U.S. producers; another purchaser, ***, reported buying 60 percent of its HDAN

from U.S. producers; and the remaining purchaser, ***, reported buying 50 percent of its HDAN from

U.S. producers. These last two purchasers, which are dealers, also provided additional discussion. ***

reported that domestic HDAN provided a dependable supply. The firm also asserted that it is important to

have domestic suppliers who are allowed to make a fair profit and, according to ***, it would be a

mistake to allow foreign producers with less expensive natural gas cost to dump nitrogen products at

lower prices in the United States putting domestic suppliers out of business. *** asserted that, with

present costs of transportation and transportation regulations, it would be difficult to stock imported

HDAN, because most of these regulations apply to barge companies and their storage facilities, which

handle mostly imported HDAN; U.S.-produced HDAN is shipped mainly by rail and does not encounter

as many such costs.

Factors Affecting Purchasing Decisions

Purchasers were requested in their questionnaires to list the top three purchase factors that they

consider when deciding from whom to purchase HDAN.125 Responses of the 12 reporting purchasers,

which did not necessarily respond for each level of importance, are shown in the following tabulation.

Factors 

Number of purchasers responding

First

important

factor

Second

important

factor

Third

important

factor

Price 6 1 2

Quality 3 6 1

Availability 3 2 4

Transport costs - 1 1

Traditional supplier - - 2

Source: Compiled from data submitted in response to Commission questionnaires.
126 Ibid.

127 U.S. purchaser questionnaire response, section III-34.

128 One of the three purchasers that never purchased HDAN at the lowest price, ***, purchases its HDAN from

*** and ***.

129 U.S. purchaser questionnaire response, section III-32a.

130 Price, product quality, and availability, in descending order, were reported as the top three purchase factors in

another part of the purchaser questionnaire and were discussed earlier.

131 U.S. purchaser questionnaire response, section II-1.

132 U.S. purchaser questionnaire response, section II-22. *** reported purchasing only U.S.-produced HDAN

and *** reported purchasing mostly U.S.-produced HDAN, because some imported material does not store well and

breaks down in storage (U.S. purchaser questionnaire response, sections II-1 and III-22).

133 U.S. purchaser questionnaire response, section III-22.

II-28

As shown in the tabulation, the responding purchasers identified five purchase factors as

important; price was reported most frequently as the most important factor, quality was reported most

frequently as the second important factor, and availability was reported most frequently as the third 

important factor. Purchasers reported that quality considerations included guaranteed certificates of

analysis, prill size and hardness, free flowing product, bulk density, coating, and low dust.126 Twelve U.S.

purchasers responded to a request in the purchaser questionnaire to indicate how frequently they purchase

HDAN at the lowest price.127 Two purchasers reported always, four reported usually, three reported

sometimes, and the remaining three reported never.128 The reporting firms that did not always purchase

HDAN at the lowest price reported that quality and availability were also important in their purchase

decisions.

Twelve U.S. purchasers also responded to a request in the purchaser questionnaire to rank 15

specified purchase factors as very important, somewhat important, or not important;129 not all responding

purchasers necessarily ranked every specified factor. The total number of responses is shown in table II-3

for each purchase factor. Five purchase factors--availability, discounts offered, price, product quality

meets standards, and reliable supply--were considered most frequently to be very important purchase

factors for HDAN.130 Minimum quantity requirements followed by product consistency were reported

most frequently as the top two somewhat important purchase factors; packaging, followed by technical

support and product range, were the three most frequently cited purchase factors considered not

important.

Comparison of the U.S.-Produced and Imported HDAN

Twelve responding U.S. purchasers did not report any purchases of HDAN imported from

Ukraine, but did report purchasing HDAN from U.S. producers and other U.S. suppliers.131 These

purchasers frequently were not able to identify the country of origin of HDAN that they purchased from

their U.S. suppliers, and assumed that the HDAN purchased from U.S. producers was produced

domestically. Nine of 11 responding U.S. purchasers reported that they sometimes or never purchase

HDAN based on the country of origin, whereas one of the remaining two purchasers, ***, always did so

and the other purchaser, *** usually did so.132 All nine responding purchasers reported that their

customers sometimes or never purchase HDAN based on the country of origin.133 U.S. HDAN producers

and importers sell their HDAN almost exclusively to fertilizer distributors and dealers.
134 U.S. producer questionnaire response, section IV-B-37.

135 U.S. importer questionnaire response, section III-B-34.

136 U.S. purchaser questionnaire response, section IV-2.

137 U.S. producer questionnaire response, section IV-B-38.

138 U.S. importer questionnaire response, section III-B-35.

139 Nonprice factors referred to in the questionnaire request included quality, availability, transportation network,

product range, and technical support, but nonprice factors were not necessarily restricted to only these factors.

II-29

Table II-3

Ranking of purchase factors, as reported by U.S. HDAN purchasers

Purchase factors Very important

Somewhat

important Not important

Availability * 10 1 1

Delivery terms 6 3 3

Delivery time 7 3 2

Discounts offered 11 0 1

Extension of credit 5 2 5

Price * 10 1 1

Minimum quantity requirements 1 6 5

Packaging 1 0 11

Product consistency 8 4 0

Product quality meets standards * 10 1 1

Product quality exceeds standards 4 3 4

Product range 2 3 6

Reliable supply 10 2 0

Technical support 1 3 8

U.S. transportation costs 7 3 2

Note.–The overall top three purchase factors as discussed earlier are identified with asterisks.

Source: Compiled from data submitted in response to Commission questionnaires.

The U.S. producers,134 importers,135 and purchasers136 of HDAN were requested in their

questionnaires to report on the extent of interchangeability (products from different countries physically

capable of being used in the same applications) of HDAN produced domestically, imported from Ukraine,

and imported from third countries. The U.S. producers137 and importers138 were also asked to report the

extent of any differences other than price that would affect sales in the U.S. market among the various

country sources of HDAN.139 Responses of the two reporting U.S. producers, three U.S. importers, and

eight U.S. purchasers regarding the degree of interchangeability between domestic and imported HDAN

are summarized in table II-4 for comparisons involving the U.S.-produced and imported HDAN. 
140 Other countries for which interchangeability and non-price factors were reported included Bulgaria, Georgia,

Netherlands, Romania, and Russia.

II-30

Responses of the two reporting U.S. producers and three U.S. importers regarding differences other than

price affecting competition are summarized in table II-5 for comparisons involving the U.S.-produced and

imported HDAN. Although responses of all the reporting firms suggest that U.S.-produced and imported

HDAN are generally always interchangeable, some importers and purchasers also reported these products

were sometimes interchangeable. Responses of the U.S. producers and importers suggest that non-price

factors generally never affect competition between U.S.-produced and imported HDAN, although two

responses of U.S. importers indicated that such factors sometimes affect such competition.140

Table II-4

HDAN: Perceived degree of interchangeability of product produced in the United States and in

other countries, and sold in the U.S. market

Country pair

Number of U.S.

producers’ responses1

Number of U.S.

importers’ responses2

Number of U.S.

purchasers’ responses3

A FS N A F S N A F S N

United States vs.--

 Ukraine 2 - - - 1 - - - 4 - 1 -

 Other countries 2 - - - 1 - 1 - 4 - 1 -

Ukraine vs.--

 Other countries 2 - - - 1 - 1 - 4 - 1 -

 1 Based on responses of two U.S. producers.

 2

 Based on responses of three U.S. importers.

 3

 Based on responses of eight U.S. purchasers.

Note: A = Always, F = Frequently, S = Sometimes, N = Never.

Source: Compiled from data submitted in response to Commission questionnaires.
141 U.S. purchaser questionnaire response, section IV-6.

II-31

Table II-5

HDAN: Perceived importance of differences in factors other than price between product produced

in the United States and in other countries, and sold in the U.S. market

Country pair

Number of U.S. producers’

responses1

Number of U.S. importers’

responses2

A F S N AF S N

United States vs.--

 Ukraine - - - 2 - - 1 1

 Other countries - - - 2 - - - 2

Ukraine vs.--

 Other countries - - - 2 - - 1 1

 1 Based on responses of two U.S. producers.

 2

 Based on responses of three U.S. importers.

Note: A = Always, F = Frequently, S = Sometimes, N = Never.

Source: Compiled from data submitted in response to Commission questionnaires.

Purchaser Sourcing Patterns

Purchasers were also requested in their questionnaire to make country-of-origin comparisons

among the U.S.-produced and imported HDAN in terms of the 15 specified purchase factors discussed

earlier and indicate for each factor whether product from one country was superior, comparable, or

inferior to product from another country.141 The purchaser responses are summarized in table II-6 for the

reported comparisons between the U.S.-produced HDAN and that imported from nonsubject countries; no

comparisons were reported between U.S.-produced and imported Ukrainian HDAN. A total of four U.S.

HDAN purchasers reported the requested information but not necessarily for all country and purchase

factors involving the United States and the reported six nonsubject countries (Bulgaria, Georgia,

Netherlands, Romania, Russia, and Spain); these six countries accounted for the bulk of total U.S. imports

of HDAN during 2001-06. It may be difficult to make generalizations of these comparisons because of

the small number of responses, likely because purchasers either purchased only the domestic HDAN or

did not know the country of origin of the HDAN that they purchased. Based on the responses of the four

reporting U.S. purchasers, U.S.-produced HDAN was generally superior or comparable to the HDAN

imported from the reported six nonsubject countries for most of the purchase factors. The principal

exception was for the purchase factor, price, where the U.S.-produced HDAN was almost always reported

as inferior, i.e., the U.S.-produced HDAN was higher-priced than the imported HDAN. 
II-32

Table II-6

HDAN: Comparisons of U.S.-produced HDAN with HDAN imported from nonsubject countries, as

reported by U.S. purchasers1

Purchase factors

U.S.-produced HDAN compared to HDAN imported from–

Bulgaria Georgia Netherlands Romania

S C I S CISC I SC I

Availability * 2 1 0 1 1 0 1 10200

Delivery terms 1 1 1 0 1 1 0 1 1 1 0 1

Delivery time 1 2 0 0 2 0 0 2 0 1 1 0

Discounts offered 0 0 1 0 0 0 0 00100

Extension of credit 0 2 0 0 1 0 0 1 0 1 1 0

Price2

 * 0 03 0 020 0 2 1 0 1

Minimum quantity

requirements 0 3 0 0 2 0 0 20110

Packaging 0 3 0 0 2 0 0 2 0 1 1 0

Product consistency 2 1 0 1 1 0 1 10200

Product quality meets

standards * 1 2 0 0 2 0 0 20110

Product quality exceeds

standards 0 2 0 0 2 0 0 20110

Product range 0 2 0 0 1 0 0 10110

Reliable supply 1 2 0 0 2 0 0 20110

Technical support 1 1 0 1 1 0 1 10200

U.S. transportation costs2 0 30 0 200 2 0 1 1 0

Continued on the next page.
II-33

Table II-6--Continued

HDAN: Comparisons of U.S.-produced HDAN with HDAN imported from nonsubject countries, as

reported by U.S. purchasers1

Purchase factors

U.S.-produced HDAN compared to HDAN imported from–

Russia Spain

S C I SCI

Availability * 2 0 0 1 0 0

Delivery terms 1 0 1 1 0 0

Delivery time 1 1 0 1 0 0

Discounts offered 0 0 1 0 0 1

Extension of credit 0 2 0 0 1 0

Price2

 * 0 0 2 0 01

Minimum quantity requirements 0 2 0 1 0 0

Packaging 0 2 0 0 1 0

Product consistency 2 0 0 0 1 0

Product quality meets standards * 1 1 0 1 0 0

Product quality exceeds standards 0 1 0 0 0 0

Product range 0 2 0 0 1 0

Reliable supply 1 1 0 1 0 0

Technical support 1 0 0 0 0 0

U.S. transportation costs2 0 2 0 0 10

 1 A total of four U.S. purchasers reported the requested information, but not necessarily for every country and

purchase factor.

 2

 A rating of “S” on price and/or transportation costs indicates that the U.S. product has lower prices or

transportation costs than the product from the country with which it is being compared.

Note.–S=superior, C=comparable, and I=inferior. The overall top three purchase factors as discussed earlier are

identified with asterisks.

Source: Compiled from data submitted in response to Commission questionnaires.
142 The ranges for the various elasticities were presented below in the prehearing report for purposes of

discussion in the prehearing briefs, hearing testimony, and/or posthearing briefs; the domestic interested parties

reported that they agreed with the three elasticity ranges reported by staff in the prehearing report (staff telephone

interview with ***, May 1, 2007). The elasticity responses in this section refer to changes that could occur within

12 months, unless otherwise indicated.

143 Domestic supply response is assumed to be symmetrical for both an increase and a decrease in demand for

the domestic product. Therefore, factors opposite to those resulting in increased quantity supplied to the U.S. market

result in decreased quantity supplied to the same extent. Exceptions to this assumption are a limited supply increase

when demand increases because either the domestic firm(s) already operate near or at full capacity and any likely

expansion in capacity would take more than 12 months to complete, or selling prices do not cover variable costs in a

high variable cost industry. Another exception is a limited supply reduction when demand decreases because the

domestic firm(s) must operate at or near full capacity due to very high fixed costs.

144 The substitution elasticity measures the responsiveness of the relative U.S. consumption levels of the subject

imports and the U.S. domestic like product to changes in their relative prices. This reflects how easily purchasers

switch from the U.S. product to the subject imported product (or vice versa) when prices change.

145 The elasticities of substitution between U.S.-produced HDAN and nonsubject imports and between subject

imports and nonsubject imports are likely to be in the same range.

II-34

ELASTICITY ESTIMATES142

U.S. Supply Elasticity

The domestic supply elasticity for HDAN measures the sensitivity of quantity supplied by U.S.

producers to a change in the U.S. market price of HDAN. The elasticity of domestic supply depends on

several factors including U.S. producers’ level of excess capacity, the ease with which U.S. producers can

alter productive capacity, the existence of inventories, and the availability of alternate markets for U.S.-

produced HDAN.143 Analysis of these factors indicates that, overall, U.S. producers have a moderate

flexibility in the short run to alter their supply of HDAN in response to relative changes in the demand for

their product; thus, the domestic elasticity of supply is estimated to be in the range of 2 to 4.

U.S. Demand Elasticity

The U.S. price elasticity of demand for HDAN measures the sensitivity of the overall quantity

demanded for this product to changes in the U.S. market price of HDAN. The price elasticity of demand

depends on factors discussed earlier such as the existence, availability, and commercial viability of

substitute products, the component cost share of HDAN in the production of downstream products, and

the price elasticity of demand for down-stream products. Based on available information, the demand

elasticity for HDAN is estimated to be in the range of -0.8 to -1.6.

Substitution Elasticity144

The elasticity of substitution largely depends upon the degree to which there is an overlap of

competition between U.S.-produced and imported HDAN, and product differentiation. Product

differentiation, in turn, depends on such factors as physical characteristics (e.g., chemistry, surface

coatings, etc.) and conditions of sale (e.g., delivery lead times, reliability of supply, product service, etc.). 

Based on this and other available information discussed earlier, the elasticity of substitution between

domestic HDAN and imported HDAN from Ukraine is estimated to be in the range of 3 to 5.145
 1

 ***. 

 2

 *** responded in the negative to the Commission’s questionnaire; however, each provided a letter of

explanation citing that the company produced ammonium nitrate liquor solely for purposes of manufacturing urea

ammonium nitrate (“UAN”) liquid fertilizer. 

 3

 Potash Corp.’s U.S. producer questionnaire response (section II-2) and Green Markets, “El Dorado, Terra to

remain in agricultural AN business,” August 15, 2005.

 4

 ***’s U.S. producer questionnaire response (section II-2).

 5

 El Dorado’s U.S. producer questionnaire response (section II-2).

 6

 ***’s U.S. producer questionnaire response (section II-11). 

III-1

PART III: CONDITION OF THE U.S. INDUSTRY

Information on the U.S. industry is based on the questionnaire responses of eight firms. 

Questionnaires were sent to 15 possible producers of ammonium nitrate; eight provided information. Of

these eight firms, five firms1

 produced the subject HDAN and three firms produced LDAN during the

period for which data were gathered.2

 Industry data obtained accounted for virtually all known U.S.

production of HDAN during 2001-06.

U.S. PRODUCERS’ CAPACITY, PRODUCTION, AND CAPACITY UTILIZATION

During the original investigations, there were 10 major U.S. producers of HDAN; eight firms that

accounted for approximately *** percent of U.S. production in 2000 responded to the Commission

questionnaires. Since the original investigation, two firms have gone out of business (Wil-Gro in 2000

and Nitram in 2003) and their production capacity disappeared. Additional capacity closures include the

facilities of Coastal Chem, which after being acquired by Dyno Nobel in 2003, switched to LDAN

production; the closure of the Crystal City, MO facility formerly owned by LaRoche, then acquired by El

Dorado in 2000; the cessation of HDAN production by Potash Corp. in 2004 ***;3

 ***;4 and Agrium

acquiring the fertilizer production assets of Prodica LLC in 2000 and discontinuing HDAN production

and sales in 2005. *** during the original investigation, MCC, was acquired in 2004 by a new entrant to

the HDAN market, Terra. El Dorado ceased production of HDAN at its Cherokee, AL plant *** in 2004

in order to ***.5

During the original investigation and in this review, *** reported a tolling arrangement with ***

whereby *** supplied *** with ammonia which *** converted to HDAN. *** charged *** a fee for this

service. In this review, *** reported the tolling arrangement ***.6

HDAN capacity decreased during 2001-06, primarily due to the cessation of operations of Potash

Corp., El Dorado’s Cherokee plant in 2004, and Agrium and Air Products in 2005 (table III-1). Despite

the plant closures, U.S. producers’ capacity ***. HDAN production and capacity utilization declined

irregularly during 2001-06, with a 2002 upturn primarily attributed to ***.

In their questionnaire responses, three producers reported production of other products on the

same machinery and equipment or using the same workers as for the production of HDAN. *** reported

common production equipment upstream in the production of HDAN that is also used to produce other

products; *** reported the ability to switch from HDAN prills to LDAN prills and the ability to use the

AN liquor for downstream products (UAN); and *** indicated that some capital equipment prior to

HDAN prilling is used to produce ammonia, nitric acid, and ammonium nitrate solution, but not all of this

production is dedicated to solid ammonium nitrate production. ***
 7

 ***’s U.S. producer questionnaire response (section II-5); ***’s U.S. producer questionnaire response (section

II-7); and ***’s U.S. producer questionnaire response (sections II-3a, II-3b, and II-5).

III-2

Table III-1

HDAN: U.S. producers’ capacity, production, and capacity utilization, by producer, 1998-2000 and 2001-06

Producer 1998 1999 2000 2001 2002 2003 2004 2005 2006

 Capacity (short tons)

Agrium1 *** *** *** *** *** *** *** *** ***

Air Products *** *** *** *** *** *** *** *** ***

El Dorado2 *** *** *** *** *** *** *** *** ***

Nitram *** *** *** *** *** *** *** *** ***

Potash Corp.3

 *** *** *** *** *** *** *** *** ***

Terra *** *** *** *** *** *** *** *** ***

 Total 2,585,210 2,673,064 2,666,251 2,047,578 2,039,125 2,074,340 2,050,042 1,747,368 ***

 Production (short tons)

Agrium1 *** *** *** *** *** *** *** *** ***

Air Products *** *** *** *** *** *** *** *** ***

El Dorado *** *** *** *** *** *** *** *** ***

Nitram *** *** *** *** *** *** *** *** ***

Potash Corp.3

 *** *** *** *** *** *** *** *** ***

Terra *** *** *** *** *** *** *** *** ***

 Total 2,126,197 1,970,942 1,679,379 1,432,727 1,581,114 1,368,676 1,282,263 1,066,799 ***

 Capacity utilization (percent)

Agrium *** *** *** *** *** *** *** *** ***

Air Products *** *** *** *** *** *** *** *** ***

El Dorado *** *** *** *** *** *** *** *** ***

Nitram *** *** *** *** *** *** *** *** ***

Potash Corp.3

 *** *** *** *** *** *** *** *** ***

Terra *** *** *** *** *** *** *** *** ***

 Average 82.2 73.7 63.0 70.0 77.5 66.0 62.5 61.1 ***

 1 Agrium data include Prodica LLC’s data.

 2

 El Dorado’s Arkansas production was limited to approximately *** short tons for any rolling 12-month period by the State of

Arkansas for environmental reasons since 2001. In March 2005 El Dorado completed environmental equipment improvements that

increased production capacity to *** short tons per year from *** short tons per year; however, ***. El Dorado’s U.S. producer

questionnaire response (section II-3a).

 3

 Potash Corp. produced HDAN and LDAN ***. Its reported AN capacity fluctuated with the fluctuation in product mix between

HDAN and LDAN.

Source: Compiled from data submitted in response to Commission questionnaires.

***.7
 8

 U.S. producers’ questionnaire responses (section II-6).

 9

 El Dorado’s U.S. producer questionnaire response (section II-3a).

 10 Terra News Release, “Terra announces ammonium nitrate supply agreement with Orica,” July 22, 2005, found

at http://www.terraindustries.com/latest/corp_activities/05-07/orica.pdf.com, retrieved February 7, 2006. 

 11 Terra’s U.S. producers’ questionnaire response (section II-3a).

III-3

 Restraints on production capacity were described as ***.8

U.S. production of LDAN was reported by six firms: Apache Nitrogen Products, Inc. (“Apache

Nitrogen”); Dyno Nobel Inc. (“Dyno Nobel”); El Dorado; Geneva Nitrogen, LLC (“Geneva”); Potash

Corp; and Terra. *** and ***, with *** percent and *** percent of U.S. production of LDAN,

respectively, together accounted for approximately *** percent of U.S. production of LDAN during the

period for which data were gathered (table III-2). 

Table III-2

LDAN: U.S. producers’ capacity, production, and capacity utilization, 2001-06

Item 2001 2002 2003 2004 2005 2006

Capacity1

 (short tons) 1,506,727 1,519,680 1,486,465 1,935,763 2,241,000 2,312,000

Production (short tons) 1,270,500 1,280,385 1,283,437 1,603,759 1,660,050 1,794,979

Capacity utilization (percent) 84.3 84.3 86.3 82.8 74.1 77.6

 1 ***. 

Source: Compiled from data submitted in response to Commission questionnaires.

Changes in Character of Operations and Capacity Projections

El Dorado *** .9

 In July 2005, Terra announced that it entered into a 10-year, renewable

agreement to supply LDAN and ammonium nitrate solution (ANS) to Orica USA Inc. (Orica). As part of

the agreement, Terra modified one of its HDAN AN prill towers to enable the production of either HDAN

or LDAN.10 ***.11 Table III-3 presents information on the status of existing HDAN production facilities.

U.S. PRODUCERS’ DOMESTIC SHIPMENTS, COMPANY TRANSFERS,

AND EXPORT SHIPMENTS

U.S. producers’ U.S. shipments declined irregularly during 2001-06 (table III-4). Three firms,

***, reported transfers of HDAN to related companies and internal consumption during the period for

which data were gathered. ***. Exports accounted for *** of production, with only two firms, ***,

reporting exports *** during 2001-06.
III-4

Table III-3

Status of existing HDAN production facilities, 2006

Current 

owner

Production facility

location

Capacity

(short tons)

Production

capability Status

Agrium Homestead, NE *** *** Discontinued HDAN production and sales mid-year

2005. Operating as distribution terminal for ammonia

and other nitrogen products. 

Kennewick, WA *** *** Acquired by Agrium in October 2000. Discontinued

HDAN production and sales mid-year 2005. ***.

Air Products Pace, FL *** *** Permanently shut down its HDAN production facility at

the end of December 2005. ***.

Dyno Nobel Cheyenne, WY *** *** The former Coastal Chem, Inc.’s facility was acquired

by El Paso Energy Corp. in January 2001 and then

acquired by Dyno Nobel ASA in 2003. This facility

now produces LDAN.

El Dorado Cherokee, AL *** *** LaRoche (the former facility owner) filed for Chapter

11 bankruptcy protection in May 2000 and sold

production facilities in Cherokee, AL and Crystal City,

MO to Orica LLC in August 2000. Subsequently,

Orica sold the facilities to LSB Industries (parent of El

Dorado) in November 2000. Production suspended in

March 2004; ***.

El Dorado, AR *** Yes ***. Currently producing.

Pryor, OK *** *** The former Wil-Gro facility closed in February 2000

after being idle since December 1999. LSB Industries

(parent of El Dorado) acquired facility in 2001 but did

not restart production. ***. 

Potash Corp. Augusta, GA ***1 *** Ceased AN production in favor of LDAN *** in

December 2004. 

Terra Yazoo City, MS ***1 Yes MCC filed for Chapter 11 bankruptcy protection in May

2003. Acquired by Terra Industries, Inc. in December

2004. Currently producing.

 1 Includes capacity to produce LDAN ***.

Source: Compiled from data submitted in response to Commission questionnaires and from industry sources.
III-5

Table III-4

HDAN: U.S. producers’ shipments, by type, 1998-2000, and 2001-06

Item 1998 1999 2000 2001 2002 2003 2004 2005 2006

Quantity (short tons) 

Commercial shipments *** *** *** *** *** *** *** *** ***

Internal consumption *** *** *** *** *** *** *** *** ***

Transfers to related firms *** *** *** *** *** *** *** *** ***

 Subtotal, U.S. shipments 1,959,789 2,014,854 1,807,145 1,393,412 1,550,097 1,401,992 1,294,570 1,070,037 ***

Export shipments *** *** *** *** *** *** *** *** ***

All shipments *** *** *** *** *** *** *** *** ***

Value ($1,000)

Commercial shipments *** *** *** *** *** *** *** *** ***

Internal consumption *** *** *** *** *** *** *** *** ***

Transfers to related firms *** *** *** *** *** *** *** *** ***

 Subtotal, U.S. shipments 238,321 207,508 218,878 193,227 176,109 214,711 224,514 219,981 ***

Export shipments *** *** *** *** *** *** *** *** ***

All shipments *** *** *** *** *** *** *** *** ***

Unit value (per short ton)

Commercial shipments $*** $*** $*** $*** $*** $*** $*** $*** $***

Internal consumption *** *** *** *** *** *** *** *** ***

Transfers to related firms *** *** *** *** *** *** *** *** ***

 Subtotal, U.S. shipments 121.61 102.99 121.12 138.67 113.61 153.15 173.43 205.58 ***

Export shipments *** *** *** *** *** *** *** *** ***

Average *** *** *** *** *** *** *** *** ***

 Share of shipment quantity (percent)

Commercial shipments *** *** *** *** *** *** *** *** ***

Internal consumption *** *** *** *** *** *** *** *** ***

Transfers to related firms *** *** *** *** *** *** *** *** ***

 Subtotal, U.S. shipments *** *** *** *** *** *** *** *** ***

Export shipments *** *** *** *** *** *** *** *** ***

Total *** *** *** *** *** *** *** *** ***

Source: Compiled from data submitted in response to Commission questionnaires.

U.S. PRODUCERS’ INVENTORIES

Inventories declined steadily during the period examined in this review (table III-5). Only two

producers, ***, had inventories at the end of 2006. Agrium discontinued AN production and sales in mid-year

2005. Air Products permanently shut down its AN production facility at the end of December 2005. ***.
 12 ***’s U.S. producers’ questionnaire response (section II-10).

 13 ***’s U.S. producers’ questionnaire response (section II-10).

 14 ***’s U.S. producers’ questionnaire response (section II-10).

III-6

Table III-5

HDAN: U.S. producers’ end-of-period inventories, 1998-2000, and 2001-06

Item 1998 1999 2000 2001 2002 2003 2004 2005 2006

Inventories (short tons) 352,614 247,435 97,376 105,499 104,719 65,491 42,963 *** ***

Ratio to production

(percent) 16.6 12.6 5.8 7.4 6.6 4.8 3.4 *** ***

Ratio to U.S. shipments

(percent) 18.0 12.3 5.4 7.6 6.8 4.7 3.3 *** ***

Ratio to total shipments

(percent) *** *** *** *** *** *** *** *** ***

Note.–***. 

Source: Compiled from data submitted in response to Commission questionnaires.

U.S. PRODUCERS’ PURCHASES

*** purchased *** of HDAN from *** (table III-6). The reason for *** purchases of HDAN

from *** was that it ***.12 In 2005, *** purchased *** short tons of HDAN from ***.13

*** reported that its purchases of HDAN in 2005 and 2006 were ***.14

Table III-6

HDAN: U.S. producers’ purchases of U.S.-produced and imported product, 2001-06

* * * * * * *

U.S. PRODUCERS’ EMPLOYMENT, WAGES, AND PRODUCTIVITY

Employment declined steadily during 2001-06 (table III-7). ***.
 15 These firms are: Agrium; Air Products; El Dorado (which reported for itself and separately for Cherokee, the

plant it acquired from LaRoche on November 1, 2000); Potash Corp.; and Terra, which reported for Mississippi

Chemical Co. (“MCC”) during 2001-04 and for the combined firm during 2005-06. ***. Differences between the

financial data and the trade data in this report are primarily accounted for by timing differences; wide price

fluctuations over the periods reviewed accounted for differences in value. 

 16 See Ammonium Nitrate from Russia, Investigation No. 731-TA-856 (Review), USITC Publication 3844 (March

2006), pp. III-1 to III-4, III-6, and III-7.

 17 El Dorado purchased nitrogen plants at Crystal City, MO, and Cherokee, AL, from LaRoche in 2000. 

Ammonium Nitrate from Russia, Investigation No. 731-TA-856 (Review), USITC Publication 3844 (March 2006), p.

III-6. Reportedly, El Dorado decided not ***.

 18 ***.

III-7

Table III-7

HDAN: Average number of production and related workers, hours worked, wages paid to such workers,

hourly wages, productivity, and unit labor costs, 1998-2000 and 2001-06

Item 1998 1999 2000 2001 2002 2003 2004 2005 2006

Production and related workers

(number)1 426 422 389 293 290 287 277 179 ***

Hours worked (1,000) 942 927 852 658 664 636 604 378 ***

Hours worked per worker 2,211 2,197 2,190 2,246 2,290 2,216 2,181 2,112 ***

Wages paid ($1,000) 18,833 18,841 17,442 13,898 14,505 13,914 13,870 8,707 ***

Hourly wages $19.99 $20.33 $20.48 $21.12 $21.84 $21.88 $22.96 $23.03 $***

Productivity (tons per 1,000

hours) *** *** *** *** *** *** *** *** ***

Unit labor costs (per short ton) $*** $*** $*** $*** $*** $*** $*** $*** $***

 1 Agrium did not provide employment data on a calendar-year basis; therefore, employment is understated during 2001-05.

Source: Compiled from data submitted in response to Commission questionnaires.

EFFECTS OF HURRICANES

Two major hurricanes, Katrina and Rita, hit the United States in 2005. Katrina made landfall in

the United States on August 25, 2005, and Rita hit the United States about one month later, on 

September 24, 2005. U.S. producers’ responses to a query concerning current and future effects, if any,

of Hurricanes Katrina and /or Rita on their firm’s production and shipments are presented in appendix D.

FINANCIAL EXPERIENCE OF U.S. PRODUCERS

Background

Five firms15 provided usable financial data on their operations on HDAN, which accounted for

the vast majority of known U.S. production of HDAN in 2006. A number of changes occurred in the

structure of the U.S. HDAN industry since 2000.16 El Dorado entered the market in 2000 through the

purchase of two existing plants, located at Cherokee, AL, and El Dorado, AR.17 However, El Dorado

suspended HDAN production at its plant in Cherokee, AL *** in order to ***.18 Nitram closed its facility
 19 ***.

 20 Air Products announced its intention to exit the fertilizer business “at the end of its contractual commitments.” 

In its press release of December 22, 2005, the firm stated “that it will permanently close its converted products

fertilizer operations at Pace, FL by the end of December 2005. Air Products has been unsuccessful in finding a

buyer to purchase the operation.” Ammonium Nitrate from Russia, Investigation No. 731-TA-856 (Review), USITC

Publication 3844 (March 2006), p. III-6-7. ***.

 21 ***.

 22 MCC filed for bankruptcy in May 2003 and disposed of its non-nitrogen assets at the same time that Terra’s

purchase of the remaining MCC assets was completed in December 2004. See MCC’s 2004 Form 10-K, p. 4, and

Terra’s 2004 Form 10-K, p. 3. Terra started producing industrial grade ammonium nitrate in 2005 after installing a

production line for that product at its plant in Yazoo City, MS. Ammonium Nitrate from Russia, Investigation No.

731-TA-856 (Review), USITC Publication 3844 (March 2006), p. III-7.

 23 According to Agrium, “from 2002 to 2004, there were relatively few new nitrogen facilities brought into

production following the cyclical downturn in nitrogen prices that began in 1997. In addition, there was a shift to

sustained higher North American natural gas prices during this period, accompanied by substantially higher gas price

volatility. This forced the permanent closure of a number of U.S. nitrogen {production} facilities.” Also, a

spokesman for Terra estimated that approximately 30 percent of North American ammonia production capacity was

shut down during 2000-05 because of volatile and rising natural gas costs. Ammonium Nitrate from Russia,

Investigation No. 731-TA-856 (Review), USITC Publication 3844 (March 2006), p. III-7.

 24 ***.

 25 Reportedly, Agrium’s decision was made as an ongoing process to optimize returns on its business and to

reduce potential exposure related to security concerns. Ammonium Nitrate from Russia, Investigation No. 731-TA856 (Review), USITC Publication 3844 (March 2006), p. III-7.

 26 Air Products stated in its questionnaire response that ***. In a December 22, 2005 press release, Air Products

stated that a changing regulatory environment was a factor that made it difficult for the firm to sustain a profitable

business.

 27 ***.

 28 These concerns are sometimes cited as “logistical constraints” or “security controls.” See Ammonium Nitrate

from Russia, Investigation No. 731-TA-856 (Review), USITC Publication 3844 (March 2006), p. III-8.

III-8

in 2003 after filing for bankruptcy protection; its capacity was permanently lost.19 Air Products and

Potash Corp. both exited the market in 2005: Air Products closed its HDAN production unit at Pace, FL,

exiting the fertilizer business after June 2005,20 while Potash Corp. ceased making HDAN as of December

2004, but continues to produce other nitrogen-based fertilizers, like low-density ammonium nitrate.21

MCC, which filed for bankruptcy protection in May 2003, was purchased by Terra (which produced

nitrogen fertilizers other than ammonium nitrate) in December 2004.22 As a result of these changes, El

Dorado (at El Dorado, AR) and Terra (at Yazoo City, MS) became the only U.S. firms producing HDAN

in 2006 and 2007.

Factors that affect the supply of and demand for ammonium nitrate include the availability, cost,

and price volatility of feedstock natural gas,23 and competition with other forms of nitrogen for industrial

and agricultural use. For example, ***.24 Security and liability concerns also affect the market for

HDAN because of its classification as a hazardous material (it is an oxidizing agent and has the potential

to be used as an explosive). These include increased U.S. Coast Guard and State safety requirements,

rising insurance costs, and the associated liability related to security concerns on transportation, storage,

and sale, and were cited by certain producers like Agrium,25 Air Products,26 and ***27 as reasons why they

discontinued producing and marketing HDAN.28
 29 Staff asked ***. E-mail to staff from ***. On the other hand, ***. ***. 

 30 When Terra acquired MCC, it acquired a 50-percent ownership interest in an ammonia plant, Point Lisas

Nitrogen Limited, located in The Republic of Trinidad and Tobago. Point Lisas Nitrogen purchases its natural gas

under contract with Natural Gas Co. of Trinidad and Tobago, which is considered to be a low-cost producer. See

Ammonium Nitrate from Russia, Investigation No. 731-TA-856 (Review), USITC Publication 3844 (March 2006), p.

III-8. Terra can produce HDAN based on ammonia that it produces either at its plant in Yazoo City, MS, or that it

can bring in from Point Lisas through the firm’s terminal at Donaldsonville, LA; Terra can purchase ammonia from

other suppliers as well to run its HDAN facility at Yazoo City, MS. ***. El Dorado produces HDAN from ***. 

Air Products stated that ***.

III-9

Operations on HDAN

Results of U.S. firms’ operations on HDAN are briefly summarized here. Total net sales

quantities decreased irregularly between 2001 and 2005 and fell *** between 2005 and 2006. Total net

sales values increased irregularly between 2001 and 2005, attributable primarily to increased average unit

sales values; total net sales value fell between 2005 and 2006 on lower sales volume although the average

unit value of sales increased. Increases in the cost of raw materials during 2001-05 led to an overall

increase in the industry’s cost of goods sold (“COGS”). The industry recorded operating losses during

2001-05 (the operating loss was greatest in 2001), *** in 2006. Part of *** is attributable to the number

of firms reporting (five during 2001-05 with three leaving the industry, but only two, (El Dorado and

Terra) reporting data for their operations on HDAN in 2006. Hence the data in 2006 are more sensitive to

changes in the operating conditions of a smaller industry.29 Net income before taxes followed changes in

operating income, as did cash flow. These data for the industry are shown in table III-8, while table III-9

provides operating data on a firm-by-firm basis.

Table III-8

HDAN: Results of operations of U.S. firms, fiscal years 2001-06

* * * * * * *

Table III-9

HDAN: Results of operations of U.S. firms, by firm, fiscal years 2001-06

* * * * * * *

Raw material costs are a significant factor in industry profitability. Natural gas is the principal

raw material used to produce HDAN. Nitrogen is taken from the air and reacted with natural gas

reformed with steam, to produce ammonia, and ammonia is processed with nitric acid to produce HDAN. 

Several of the firms have produced HDAN based on ammonia that they produced or purchased.30 Natural

gas prices (and costs) have been volatile since 2001, and generally increased from 2003 through 2005. 

Although natural gas costs moderated in the latter part of 2006, they remained at relatively high levels. 

While there is no mechanism to hedge price risk on ammonia, these firms have used several pricing

mechanisms to smooth or mitigate the price volatility of natural gas including swaps, options, “forward
 31 Natural gas purchases accounted for 53 percent and 46 percent of Terra’s world-wide total operating costs and

expenses in 2005 and 2006, respectively, with natural gas unit costs net of forward pricing gains and losses

equivalent to $7.50 per MMBtu and $7.14 per MMBtu in 2005 and 2006, respectively (up from $5.37 per MMBtu in

2004). Terra uses futures contracts, swaps and options, that reference physical natural gas prices or appropriate

NYMEX futures contract prices to hedge approximately 22 percent of its North American natural gas requirements,

which were estimated at 100 million MMBtu in 2007. Terra benefits from an increase in forward prices but does not

if forward prices decline (2006 natural gas costs for the nitrogen segment were $50.3 million higher than spot prices

compared with 2005 natural gas costs that were $0.7 million lower than spot prices). Contract physical prices are

frequently based on prices at the Henry Hub in Louisiana. The contracts are traded in months forward and

settlement dates are scheduled to coincide with gas purchases during that future period but are not perfect hedges

because of location differences. Terra’s 2006 Form 10-K, pp. 26, 30, 32, and 39. Also, see ***. Potash Corp.

reported ***. El Dorado reported ***.

 32 Estimated by staff based on Terra’s 2006 form 10-K, pp. 26, 30, and 39. MCC also hedged its purchase

requirements of natural gas, resulting in cost decreases and cost increases in different years that represented a small

portion of its total costs of natural gas. See Ammonium Nitrate from Russia, Investigation No. 731-TA-856 (Review),

USITC Publication 3844 (March 2006), p. III-9. 

 33 ***.

III-10

pricing contracts,” and hedging using futures contracts.31 Terra’s gains and losses from these costmanagement activities are estimated to be about 5 percent of its costs of natural gas in 2006.32

U.S. producers commented on the effects of changes in raw material costs on pricing of HDAN. 

One firm, ***, stated that there was “minimal impact;” another, ***, stated that prices for HDAN

changed to some extent depending on supply availability or the season, and that higher ammonia prices

forced it to pass through higher costs to customers, if possible, to preserve {profit} margins. *** stated

that ***. *** comments on the relationship of HDAN prices to natural gas were similar to those of ***. 

*** provided data on the cost of natural gas used in its production of ammonia; this cost ranged

from *** percent of total ammonia cost in 2001 to *** percent in 2004, and from *** percent to ***

percent in 2005 and 2006, respectively. In turn, *** ratio of ammonia cost to its total raw materials cost

ranged from *** percent to *** percent. (*** identified *** as cost categories within its direct raw

materials, which reduced the cost ratio of ammonia to total raw materials.) Two firms, ***, classified

natural gas as their direct raw material, and natural gas accounted for *** percent to *** percent of their

total raw material costs during the periods reviewed. For ***, which provided ammonia costs, the ratio of

costs of ammonia to the total costs of raw materials ranged from *** percent to *** percent. Other items

within the category of raw materials are additives, coating products, and bags. Energy costs are chiefly

composed of electricity, steam, and natural gas used as a process gas. These costs are usually classified as

part of other factory costs, and as a share of the category, they generally rose during the periods reviewed.

***.33

Variance Analysis

The variance analysis showing the effects of prices and volume on U.S. producers’ net sales of

HDAN, and of costs and volume on their total expenses, is presented in table III-10. The information for

this variance analysis is derived from table III-8, but differs in that only total net sales are shown. The

variance analysis provides an assessment of changes in profitability as related to changes in pricing, cost,

and volume. Any differences in terms of sales or product mix (certain producers stated they had sold

HDAN in bags while others sold on both a retail and wholesale basis, for example) are not material to the

results as a whole. A summary variance analysis is presented for *** at the end of table III-10.
III-11

Table III-10

HDAN: Variance analysis on U.S. firms’ operations, fiscal years 2001-06

* * * * * * *

The variance analysis is summarized at the bottom of the table and shows generally that the

increase in the operating income from 2001 to 2006 is attributable to the favorable price variance (higher

unit prices) that was greater than the unfavorable net cost/expense variance (higher unit costs). This

appears to be the case whether the industry is examined as a whole or *** are examined separately.

Assets and Return on Investment

The Commission’s questionnaire requested data on assets used in the production, warehousing,

and sale of HDAN to compute return on investment (“ROI”) for 2001 to 2006 (table III-11). The data for

total net sales and operating losses are from table III-8, ***. Total net sales was divided by total assets, 

Table III-11

HDAN: Value of assets used in production, warehousing, and sales, and return on investment,

fiscal years 2001-06

Item

Fiscal year

2001 2002 2003 2004 2005 2006

Value ($1,000)

Current assets:

Cash and equivalent 172 75 27 1,706 3 ***

Accounts receivable, net 21,443 17,374 18,828 14,790 14,138 ***

Inventories 20,055 16,330 18,615 14,637 16,909 ***

All other current assets 2,003 2,568 1,708 3,050 2,009 ***

Subtotal current assets 43,673 36,347 39,178 34,183 33,059 ***

Noncurrent assets:

Original cost of property, 

plant, and equipment 75,025 80,295 94,241 95,188 82,285 ***

Accumulated depreciation 58,951 64,059 74,978 74,002 52,610 ***

Book value of property, 

plant, and equipment 16,074 16,236 19,263 21,186 29,675 ***

Other noncurrent assets 33,874 29,952 8,881 36,262 207 ***

Subtotal noncurrent assets 49,948 46,188 28,144 57,448 29,882 ***

Total assets 93,621 82,535 67,322 91,631 62,941 ***

Total net sales *** *** *** *** *** ***

Operating income or (loss)1 *** *** *** *** *** ***

Return on investment ratio (percent)

Return on investment 1 *** *** *** *** *** ***

1

 See note 5 in table III-8 and note 1 in table III-9. If ***. 

Note.–***. The data for total net sales and operating income or (loss) shown here differs from table III-8 because they do not

include ***. 

Source: Compiled from data submitted in response to Commission questionnaires.
 34 ***.

 35 ***.

 36 See, for example Potash Corp.’s 2002 Form 10-K, p. I-18 and Terra’s 2003 Form 10-K, p. 33. Terra stated that

its capital expenditures were for air and water quality control equipment to ensure compliance with environmental,

health, and safety regulations under the Clean Air Act.

III-12

resulting in the asset turnover ratio. The operating income ratio was then multiplied by the asset turnover

ratio, resulting in ROI; the expanded form of this equation shows how the profit margin and total asset

turnover ratio interact to determine the return on investment. 

ROI generally followed changes in operating income (discussed earlier in connection with table

III-8), i.e., was ***. Generally, U.S. firms allocated costs, expenses, and assets to HDAN, which

represents one product out of several types of nitrogen fertilizers produced in their multiproduct plants. 

As firms produced less HDAN they allocated less of their assets to the production, warehousing, and sale

of HDAN. Hence, ROI was influenced by changes in the industry’s total value of assets as well as by

changes in operating income or loss.

 Capital Expenditures and Research and Development Expenses

U.S. producers’ data on their capital expenditures and research and development (“R&D”)

expenses for their operations on HDAN are shown in table III-12. 

Table III-12

HDAN: U.S. firms’ capital expenditures and research and development expenses, fiscal years 

2001-06

Item

Fiscal years

2001 2002 2003 2004 2005 2006

Value ($1,000)

Capital expenditures:

Air Products *** *** *** *** *** ***

El Dorado *** *** *** *** *** ***

Cherokee *** *** *** *** *** ***

Potash Corp. *** *** *** *** *** ***

Terra *** *** *** *** *** ***

Total 3,001 4,253 2,875 8,729 *** ***

R&D expenses1 *** *** *** *** *** ***

1

 Accounted for by ***.

Source: Compiled from data submitted in response to Commission questionnaires.

*** stated that it ***.34 *** stated that its recent capital expenditures have been ***.35 Likewise,

other firms reportedly continued efforts to improve throughput (efficiency in production operations),

conversion ratios of natural gas to ammonia and of ammonia to HDAN, and/or to reduce environmental

discharges and the related potential liability.36 However, with the exception of 2004, capital expenditures

were ***.
 1

 Many items other than HDAN enter the United States under HTS subheading 3102.30, such as LDAN, molten

ANS solution (nominally 83 percent AN) used for emulsion explosives, liquid ammonium nitrate in less than 50

percent solution for use in the manufacture of photographic products, and mixtures of ammonium nitrate in water

used in hot and cold therapy products.

 2

 ***.

IV-1

PART IV: U.S. IMPORTS, THE WORLD MARKET,

AND THE INDUSTRY IN UKRAINE

U.S. IMPORTS

Proprietary Customs data identified 26 firms as importers of ammonium nitrate during the period

for which data were gathered. Questionnaires were sent to these firms and all firms identified in the

domestic interested parties’ response to the notice of institution. In addition, importers’ questionnaires

were sent to all domestic producers.

Data on U.S. imports of ammonium nitrate presented in this section of the report are from

responses to Commission questionnaires. Although ammonium nitrate is provided for separately in

official U.S. import statistics, these statistics encompass all forms of ammonium nitrate (e.g., HDAN,

LDAN, and aqueous solutions), not just the subject HDAN, and therefore may not be representative of

imports of HDAN.1

 Because of this possibility, coupled with the fact that questionnaire data (1) enable

imports of HDAN and LDAN to be presented separately (which is not possible using official statistics)

and (2) enable the use of importers’ U.S. shipment data to calculate apparent U.S. consumption,

questionnaire data are preferable to the official Commerce statistics. Responding firms’ imports of

HDAN and LDAN together account for an average of approximately *** percent of the value of official

ammonium nitrate import statistics from “all other” (non-Ukrainian) sources for the period for which data

were gathered. Data contained in this section are derived from questionnaire responses from 16 importers

of all forms of ammonium nitrate. Official Commerce statistics are presented in appendix E for

comparison. There were no imports of ammonium nitrate from Ukraine during the period for which data

were collected in this review (2001-06).2

During the period for which data were gathered in the original investigation (1998-March 2001),

reported imports of the subject HDAN from Ukraine were accounted for by two firms, ConAgra

International Fertilizer Co., Savannah, GA, and Transammonia, Inc., Tampa, FL. During 2000, Ukraine,

Canada, and the Netherlands were the largest exporters of HDAN to the United States. 

Of the importers’ responses received by the Commission in this five-year review, *** firms,

(***), reported imports of HDAN from sources other than Ukraine. ***, with imports of HDAN from

***, were the largest importers of HDAN over the period of review, together accounting for *** percent

of imports of HDAN from all other sources over the period for which data were gathered. These data are

presented in table IV-1. 

In the original investigation, *** firms, ***, reported imports of LDAN, all from Canada. ***

accounted for *** percent of imports of LDAN over the period of the original investigation. In this fiveyear review, six firms, ***, reported imports of ammonium nitrate other than HDAN, i.e., LDAN, all

from Canada. *** accounted for *** percent of reported imports of ammonium nitrate other than HDAN

over the period for which data were collected. These data are presented in table IV-2.
IV-2

Table IV-1

HDAN: U.S. imports, by sources, 1998-2006

Item 1998 1999 2000 2001 2002 2003 2004 2005 2006

 Quantity (short tons)

Ukraine *** *** *** 0 0 0 0 0 0

Nonsubject sources *** *** *** 521,552 536,819 912,358 558,150 423,924 557,674

 Total 437,102 564,775 495,950 521,552 536,819 912,358 558,150 423,924 557,674

 Landed, duty-paid value (1,000 dollars)

Ukraine *** *** *** 0 0 0 0 0 0

Nonsubject sources *** *** *** 63,627 49,405 112,231 92,151 83,634 116,118

 Total 39,271 43,863 39,355 63,627 49,405 112,231 92,151 83,634 116,118

 Unit value (per short ton)

Ukraine $*** $*** $*** (1

) (1) (1) (1) (1) (1)

Nonsubject sources *** *** *** $122.00 $92.03 $123.01 $165.10 $197.29 $208.22

 Average 89.84 77.66 79.35 122.00 92.03 123.01 165.10 197.29 208.22

 Share of quantity (percent)

Ukraine *** *** *** 0.0 0.0 0.0 0.0 0.0 0.0

Nonsubject sources *** *** *** 100.0 100.0 100.0 100.0 100.0 100.0

 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

 Share of value (percent)

Ukraine *** *** *** 0.0 0.0 0.0 0.0 0.0 0.0

Nonsubject sources *** *** *** 100.0 100.0 100.0 100.0 100.0 100.0

 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

 Ratio of import quantity to U.S. production (percent)

Ukraine *** *** *** 0.0 0.0 0.0 0.0 0.0 0.0

Nonsubject sources *** *** *** 36.4 34.0 66.7 43.5 39.7 ***

 Total 20.6 28.7 29.5 36.4 34.0 66.7 43.5 39.7 ***

 1 Not applicable.

Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission (2001-06) and from data

submitted in response to questionnaires of the U.S. International Trade Commission and official Commerce statistics (1998-2000).

Table IV-2

LDAN: U.S. imports, by sources, 1998-2006

* * * * * * *
IV-3

U.S. IMPORTERS’ IMPORTS SUBSEQUENT TO DECEMBER 31, 2006

The Commission requested importers to indicate whether they imported or arranged for the

importation of HDAN from Ukraine after December 31, 2006. Of the *** responding importers, none

reported imports or arrangements for importation of HDAN from Ukraine for that period.

U.S. IMPORTERS’ INVENTORIES

U.S. importers’ inventories of HDAN are presented in table IV-3. 

Table IV-3

HDAN: U.S. importers’ end-of-period inventories from Ukraine and other countries, 2001-06

* * * * * * *

THE WORLD MARKET

Based on data compiled by ***, Russia and the Ukraine are the world’s largest producers of

HDAN and together accounted for *** of global HDAN production in 2006 (table IV-4). Other countries

producing significant amounts of HDAN are Uzbekistan, Egypt, the United Kingdom, the United States,

France, Poland, Romania, China, Lithuania, and Bulgaria, which together accounted for another ***

percent of world HDAN production in 2006.

Table IV-4

HDAN: World production, imports, exports, apparent consumption, and import penetration, 2001-

06 and projected 2007-08

* * * * * * *

The United Kingdom, the United States, Egypt, and France are the largest importing countries

and together accounted for approximately *** percent of world HDAN imports in 2006. Russia and

Ukraine together accounted for about *** percent of world HDAN exports. Other significant HDAN

exporting countries are Romania, Lithuania, Bulgaria, and Uzbekistan which together accounted for

another *** percent of world HDAN exports in 2006.

Russia is the world’s largest consumer of HDAN and accounted for approximately *** percent of

world HDAN consumption in 2006. The United States, Egypt, the United Kingdom, Uzbekistan, and

France are also large HDAN consumers and together accounted for about *** percent of global HDAN

consumption in 2006.

THE INDUSTRY IN UKRAINE

Industry sources indicate four producers of ammonium nitrate (“AN”) in Ukraine, which is the

same number of producers as during the original investigation. Three producers responded to the

Commission questionnaires in the original investigation: J.S. Co. “Azot” Cherkassy, J.S. Co. “Concern

Stirol,” and Severodonetsk State Manufacturing Enterprise “Azot Association.” All four producers,

accounting for 100 percent of total ammonium nitrate capacity in Ukraine, responded to the

Commission’s questionnaire in this review: Open Joint Stock Co. Azot (“Cherkassy”), OJSC

“Rivneazot” (“Rivneazot”), Close Joint Stock Company “Severodonetsk Azot Association”
 3

 ***.

IV-4

(“Severodonetsk”), and SC “Concern Stirol” (“Stirol”). The reporting firms have not indicated any major

capacity changes since 2001.3

Ukraine’s Capacity, Production, Capacity Utilization, Home Market Shipments,

Export Shipments, and Inventories

Data gathered by the International Fertilizer Development Center (“IFDC”) indicate that the

capacity to produce all types of ammonium nitrate in Ukraine was 2.8 million short tons during 2003/04

to 2006/07, an increase from 2.6 million short tons in 2002/03 (table IV-5). Cherkassy and Stirol together

accounted for approximately 75 percent of the reported Ukrainian ammonium nitrate capacity, as shown

in the tabulation following table IV-5.

Table IV-5

AN: Ukranian capacity, by company, fertilizer years (July-June) 2001/02-2006/07 

Item

2001/02 2002/03 2003/04 2004/05 2005/06 2006/07

Quantity (1,000 short tons)

Cherkassy 1,190 1,190 1,323 1,323 1,323 1,323

Stirol 794 794 794 794 794 794

Severodonetsk 496 496 496 496 496 496

Rivneazot 146 146 220 220 220 220

 Total 2,626 2,626 2,833 2,833 2,833 2,833

Source: International Fertilizer Development Center, Worldwide AN/CAN (Ammonium Nitrate/Calcium Ammonium

Nitrate) Capacity Listing by Plant, January 2001 and June 2006.

Name of enterprise

Percent of 2006/07

Ukranian AN capacity

Cherkassy 46.7

Stirol 28.0

Severodonetsk 17.5

Rivneazot 7.8

 Total 100.0

Proprietary data gathered by the International Fertilizer Industry Association (“IFA”) indicate ***

in all types of Ukrainian ammonium nitrate production, home market deliveries, and exports during 2001-

05 (table IV-6). 
 4

 GTIS export data for Ukraine for 2001 are not available. ***.

IV-5

Table IV-6

AN: Ukranian capacity, production, home market deliveries, and exports, 2001-05 

* * * * * * *

Global Trade Information Service (“GTIS”) export data for Ukraine indicate that the largest

export market for Ukrainian HDAN is Turkey, located directly across the Black Sea, which accounted for

48 percent of Ukrainian HDAN exports in 2006 (table IV-7).4

 Ukraine is a net exporter of HDAN 

(table IV-8).

Table IV-7

HDAN: Ukrainian exports and unit values, 2002-06

Destination1

2002 2003 2004 2005 2006

Quantity (short tons)

Turkey 248,192 520,792 332,589 328,193 508,137

Hungary 87,728 69,931 30,481 6,127 112,883

Morocco 133,179 94,750 104,055 70,690 96,215

Argentina 2,918 33,897 32,497 32,295 69,305

Syria 7,472 23,931 56,881 46,020 53,668

India 23,753 84,460 47,568 53,977 52,719

Albania 6,791 15,141 21,809 0 28,208

Mexico 5,976 6,134 5,590 0 16,860

Yugoslavia 2,254 9,892 5,648 22,166 15,422

Australia 1,947 10,056 9,088 11,026 13,761

Moldova 28,675 12,637 10,308 7,391 13,049

Ecuador 6,075 8,892 27,551 0 12,304

Brazil 63,842 330,586 8,948 43,617 5,593

All other 823,621 510,149 275,542 460,706 60,478

 Total exports 1,442,423 1,731,248 968,555 1,082,208 1,058,602

Table continued on next page.
IV-6

Table IV-7--Continued

HDAN: Ukrainian exports and unit values, 2002-06

Destination

2002 2003 2004 2005 2006

 Unit value (dollars per short ton)

Turkey $61.11 $77.38 $108.44 $108.92 $122.03

Hungary 64.11 73.00 126.28 132.75 117.05

Morocco 61.56 65.09 106.21 103.75 115.42

Argentina 54.69 78.70 109.25 108.01 119.55

Syria 64.17 76.12 111.37 121.85 118.48

India 78.80 75.36 85.15 117.42 116.06

Albania 65.17 89.98 103.93 (2

) 129.57

Mexico 56.48 62.76 114.40 (2

) 117.90

Yugoslavia 70.87 91.59 112.84 117.02 133.56

Australia 77.90 89.18 119.36 124.63 134.61

Moldova 67.63 70.38 117.05 114.69 134.17

Ecuador 78.80 65.51 87.09 (2

) 142.46

Brazil 57.70 78.47 82.25 100.98 111.75

All other (3

) (3) (3) (3) (3)

 Average 62.92 72.46 105.14 111.24 120.96

 1 Ranked by the quantity of exports from Ukraine in 2006.

 2

 Not applicable.

 3

 Not meaningful. Ukraine did not export to all countries each year; data for individual countries are sporadic

beyond the top export destinations.

Note.– Export figures are quantities reported at the 6-digit level for HTS subheading 3102.30.

Source: Official Ukraine trade statistics, Global Trade Information Services (GTIS), and COFANT’s prehearing

brief, exhs. 10 and 15. 

Table IV-8

HDAN: Ukraine’s exports and imports, 2002-06

Item 2002 2003 2004 2005 2006

 Quantity (short tons)

Exports 1,442,423 1,731,248 968,555 1,082,208 1,058,602

Imports 364,385 110,947 48,727 113,090 423,687

Net exports 1,078,038 1,620,301 919,828 969,118 634,915

Source: Official Ukraine trade statistics, Global Trade Information Services (GTIS), and COFANT’s prehearing

brief, exhs. 10 and 15.
 5

 ***’s foreign producers’ questionnaire response (section II-6).

 6

 ***.

 7

 ***’s foreign producers’ questionnaire response (sections II-1 and II-2). ***’s foreign producer questionnaire

response (section II-4). 

 8

 ***’s foreign producers’ questionnaire response (section I-4).

IV-7

Data for Ukrainian production capacity, production, shipments, and inventories for the original

investigation are presented in table IV-9. During the period of review, no producers reported exporting

the nonsubject ammonium nitrate product NP 33-3-0 to the United States; however, ***.5

 HDAN

production increased irregularly during 2001-06 and the allocation between home market and export

shipments was roughly equal in most of the years 2002-06 (table IV-10). *** no plans to produce HDAN

in the United States or other countries, nor to export HDAN to the United States. *** further reported

that the antidumping duty order has had no effect on their production capacity, production, home market

shipments, or exports.6

 *** reported no changes in their operations or organization since 2001 nor

anticipated any changes in operations or organization or changes to production capacity in the future.7

*** reported that it does not have a business plan and provided several items from its common

strategy as an alternative. These items indicate that ***.8

 *** provided business plans or alternative

materials.

Table IV-9

HDAN: Ukrainian producers’ capacity, production, inventories, and shipments, 1998-2000

* * * * * * *
IV-8

Table IV-10

HDAN: Ukrainian producers’ capacity, production, inventories, and shipments, 2001-06 and projected 2007-08

Item

Actual experience Projections1

2001 2002 2003 2004 2005 2006 2007 2008

 Quantity (short tons)

Capacity 2,191,343 2,191,343 2,191,343 2,191,343 *** *** *** ***

 Cherkassy *** *** *** *** *** *** *** ***

 Rivneazot *** *** *** *** *** *** *** ***

 Severodonetsk *** *** *** *** *** *** *** ***

 Stirol *** *** *** *** *** *** *** ***

Production 1,271,508 1,817,281 1,686,797 1,336,326 2,180,387 2,102,581 *** ***

 Cherkassy *** *** *** *** *** *** *** ***

 Rivneazot *** *** *** *** *** *** *** ***

 Severodonetsk *** *** *** *** *** *** *** ***

 Stirol *** *** *** *** *** *** *** ***

End-of-period inventories *** *** *** *** *** *** *** ***

Shipments: 

 Internal

consumption/transfers *** *** *** *** *** *** *** ***

 Commercial home market

 Exports to:

 United States 0 0 0 0 0 0 0 0

 All other export markets

 European Union *** *** *** *** *** *** *** ***

 Asia *** *** *** *** *** *** *** ***

 Other markets 177,351 500,076 717,013 313,879 482,226 370,766 *** ***

 Total exports 302,803 868,632 844,361 599,296 975,292 987,270 *** ***

 Total shipments 1,211,569 1,827,941 1,921,326 1,281,809 2,200,455 2,061,888 *** ***

 Ratios and shares (percent)

Capacity utilization 58.0 82.9 77.0 61.0 *** *** *** ***

Inventories/production *** *** *** *** *** *** *** ***

Inventories/total shipments *** *** *** *** *** *** *** ***

Share of total shipments: 

 Internal

consumption/transfers *** *** *** *** *** *** *** ***

 Home market commercial *** *** *** *** *** *** *** ***

 Exports to:

 United States 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

 European Union *** *** *** *** *** *** *** ***

 Asia *** *** *** *** *** *** *** ***

 Other markets 14.6 27.4 37.3 24.5 21.9 18.0 *** ***

 Total exports 25.0 47.5 43.9 46.8 44.3 47.9 *** ***

Table continued on next page.
 9

 ***’s foreign producers’ questionnaire response (section II-6).

 10 ***’s foreign producers’ questionnaire response (section II-6).

 11 Foreign producers’ questionnaire responses (section II-9).

 12 Foreign producers’ questionnaire responses (section II-8).

IV-9

Table IV-10--Continued

HDAN: Ukrainian producers’ capacity, production, inventories, and shipments, 2001-06 and projected

2007-08

Item

Actual experience Projections1

2001 2002 2003 2004 2005 2006 2007 2008

 Value ($1,000)

 Home market: 

 Commercial shipments *** *** *** *** *** *** *** ***

 Exports to:

 United States 0 0 0 0 0 0 0 0

 All other export markets:

 European Union *** *** *** *** *** *** *** ***

 Asia *** *** *** *** *** *** *** ***

 Other markets 6,917 28,655 48,333 34,783 54,045 46,889 *** ***

 Total exports 10,128 39,600 56,760 66,753 106,852 120,594 *** ***

 Total commercial shipments 55,876 89,236 94,623 125,742 240,730 256,949 *** ***

 Unit value (dollars per short ton)

 Home market: 

 Commercial shipments *** *** *** *** *** *** *** ***

 Exports to:

 United States (2

) (2) (2) (2) (2) (2) (2) (2)

 All other export markets:

 European Union *** *** *** *** *** *** *** ***

 Asia *** *** *** *** *** *** *** ***

 Other markets 39.00 57.30 67.41 110.82 112.07 126.47 *** ***

 Total exports 33.45 45.59 67.22 111.38 109.56 122.15 *** ***

 Total commercial shipments 48.90 49.22 57.40 99.97 114.30 127.97 *** ***

 1 Data presented for 2007 and 2008 shipment projections are ***. 

 2

 Not applicable.

Note.--Unit values are calculated based on firms that reported both quantity and value data. *** did not report data for 2001-04, ***.

Source: Compiled from data submitted in response to Commission questionnaires.

***.9 Rivneazot, Severodonetsk, and Stirol reported ***.10 Cherkassy, Severodonetsk, and Stirol

each reported that ***; Rivneazot reported that ***.11

Constraints that set limits on production capacity were reported as: ***. Rivneazot reported

***.12
 13 Foreign producers’ questionnaire responses (section II-10).

 14 Foreign producers’ questionnaire responses (section II-13).

 15 Foreign producers’ questionnaire responses (section II-16c).

 16 Foreign producers’ questionnaire responses (section III-2(b)).

 17 Foreign producers’ questionnaire responses (section III-9(b)).

 18 Foreign producers’ responses to supplemental foreign producers’ questionnaire, received April 26-30, 2007,

question I.

 19 Ibid., question II.

 20 Ibid., question III.

 21 ***.

IV-10

Cherkassy reported that it *** in response to a relative price change in the price of HDAN vis-avis the price of other products using the same equipment and labor. Rivneazot reported that it *** in

response to such price changes, and that the ***.13

Export markets (other than the United States) that were developed or where sales of HDAN were

increased as a result of the antidumping duty order on HDAN from Ukraine were reported as: ***.14

*** indicated that projected figures, such as shipments to the United States, would be different if

the orders were revoked. ***.15

The producers in Ukraine were asked to report the share of their total 2006 exports of HDAN sold

through trading companies. *** reported that almost all producers of HDAN, ***, usually export their

product through trading companies. *** reported *** percent, *** stated approximately *** percent, and

*** provided no response.16

The Ukrainian producers were asked to discuss any possible or anticipated changes in their raw

material costs or factors that may affect their raw material costs in the future, including any policies or

programs of the Ukrainian Government that could affect the cost of natural gas to their firms. *** stated

that ***. *** listed specific natural gas and HDAN prices for 2006 and *** for 2007, and mentioned that

***. *** stated that ***. *** mentioned ***. It also stated that at the present ***.17

The Ukrainian ammonium nitrate producers *** on the efficiency of conversion of natural gas to

ammonium nitrate versus other nitrogenous fertilizers. *** reported that the manufacture of ammonium

nitrate was a less efficient way to convert natural gas to nitrogen fertilizer than the production of other

fertilizer products such as urea or anhydrous ammonia. *** reported that efficiency of converting natural

gas to a given nitrogenous fertilizer was dependent upon the actual market price level during a certain

period of time. However, *** reported that the production of ammonium nitrate requires less natural gas

than the production of urea.18 

Ukrainian respondents reported *** for natural gas purchases. *** reported purchases of natural

gas from a company registered in Ukraine with supplier gas origin unspecified. *** reported that it

purchased *** percent of the natural gas it consumed from Russia. *** reported that according to public

sources, 26.4 percent of natural gas consumed in Ukraine is of Ukrainian origin and 73.6 percent is

imported from Russia, Turkmenia, and Kazakhstan combined. *** reported that to the best of its

knowledge, no gas is supplied by Russia as payment for transportation; rather, gas transportation

expenses in the territory of Ukraine are paid for in currency.19 The Ukrainian HDAN producers reported

***.20 *** submitted information concerning tax and natural gas price incentives allegedly offered to

Ukrainian HDAN producers by the Ukrainian government.21

*** reported that no Ukrainian government entity has input into ammonium nitrate export price

levels; rather, the selling price for HDAN is determined and ruled by market forces. *** report that

current export sales quotations are monitored from specialized marketing agents (FERTECON and FMB)

and from the Ukrainian State Information and Analysis Center for Monitoring Export Commodities

Markets. Export price levels for HDAN are then established independently by sellers and buyers through
 22 Foreign producers’ responses to supplemental foreign producers’ questionnaire, received April 26-30, 2007,

question IV. 

 23 Ibid., question V.

 24 Domestic interested parties’ posthearing brief, p. 3 and exh. 1, p. 21, fn. 41.

IV-11

contract negotiations. However, *** reported that the government news agency, DerzhZovnishInform,

publishes a recommended price for HDAN.22

*** reported that during the period January-May 2006, there was a large increase in Russian

ammonium nitrate tonnage imported into Ukraine at lower prices than the domestic Ukrainian product.

***.23 

Trade Restrictions in Third-Country Markets

The European Commission (“EC”) recently conducted a review of its antidumping duty order on

ammonium nitrate from Ukraine. On April 19, 2007, the Council of the European Union announced its

decision to continue the antidumping duty order on ammonium nitrate from Ukraine.24 Trade restrictions

in third-country markets are presented in table IV-11.

Table IV-11

HDAN: Trade restrictions on imports from Ukraine 

Country imposing

restriction

Year

imposed

Restriction

Brazil 2002 Antidumping duty of 19 percent ad valorem;

1,2

antidumping duty of about 30 percent ad valorem3

China 2003 General ban on nitrogen imports1

European Union4 2001 Antidumping duty of 33.25 euros per metric ton;1,5

antidumping duties of 29.26-33.25 percent ad

valorem;

2

 antidumping duty of 34.00 euros per metric

ton plus 6.5 percent ad valorem3

 1 Domestic interested parties’ Response to Notice of Institution, pp. 17-18, and Council Regulation (EC) No.

132/2001 of January 22, 2001.

 2

 ***’s foreign producers’ questionnaire response (section II-12).

 3

 ***’s foreign producers’ questionnaire response (section II-12).

 4

 Ten new member states acceded to the European Union in May 2004. At the time of accession, the EU

Commission suspended application of the EU’s antidumping duties on imports of Ukrainian and Russian

ammonium nitrate into the EU 10 under certain conditions, and allowed the acceptance of price undertakings. 

These special transition arrangements expired on May 20, 2005, and the EU orders became effective for imports

into the EU 10 at that time. COFANT’s response to the notice of institution, p. 17, fn. 43, and prehearing brief, p.

29, fn. 137.

 5

 ***’s foreign producers’ questionnaire response (section II-12).

Source: Compiled from data submitted in response to Commission questionnaires and the domestic interested

parties’ Response to the Notice of Institution.

 1

 Because there were no U.S. imports of HDAN from Ukraine during 2001-06, most of the questionnaire

responses in this part of the report that were based on requests for information on U.S.-produced and imported

Ukrainian HDAN involve only responses of U.S. producers.

 2 U.S. producer questionnaire responses, sections III-11 and III-13. This average cost share was based on

questionnaire responses representing five U.S. producers of HDAN (Air Products, El Dorado, Mississippi Chemical,

Potash Corporation, and Terra). *** reported for *** for the period ***.

 3 U.S. producer questionnaire responses, section IV-B-20c. These price data were based on data representing

three U.S. producers (El Dorado, Mississippi Chemical, and Terra). *** reported for ***. ***. The reported total

value of ammonia purchased for pricing purposes amounted to *** percent of the total value of the reported natural

gas purchased during 2001-06.

V-1

PART V: PRICING AND RELATED DATA1

FACTORS AFFECTING PRICING

HDAN prices can fluctuate based on demand factors such as the business cycle, seasonal demand

patterns, and weather and soil conditions in the agricultural sector. Supply factors such as the price of

natural gas, uncommitted inventory levels in the distribution chain, the distance shipped, the size of an

order, and the mode of transportation also affect HDAN prices. In addition, recent and pending security

measures involving the production, storage, and transportation of HDAN reportedly have affected the

price of HDAN.

HDAN is used mostly as a nitrogenous fertilizer in the agricultural sector, but also is used as an

ingredient in explosives, some of which are designed to be packed into large bore-holes. Possible

alternative single-nutrient nitrogenous fertilizers to HDAN are urea, which is also in a dry form, UAN (a

liquid), and anhydrous ammonia (a gas). Nitric phosphate and calcium ammonium nitrate are

multinutrient fertilizers in dry form that may also be substituted for HDAN. Although the same

application equipment is used for HDAN and urea and the two multinutrient fertilizers, unique application

equipment is required for UAN and for anhydrous ammonia. The nitrogen in HDAN exists in a different

concentration and/or form than those of the alternative nitrogenous fertilizers. Despite all of these

differences, changes in weather and soil conditions and to a certain extent changes in the relative prices of

these nitrogenous fertilizers may induce changes in relative demand for these fertilizers. Part II discusses

in detail substitution among the nitrogenous fertilizers.

Raw Material Costs

Natural gas and its derivative, ammonia, are the predominant material inputs used by U.S. firms

to produce HDAN. Reported purchases of both of these inputs averaged 58.7 percent of the producers’

cost of goods sold in producing HDAN in the United States during January 2001-December 2006.2

 Table

V-1 and figure V-1 show U.S. producers’ quarterly weighted-average net purchase prices of natural gas

and ammonia that they used at least partially to produce HDAN during this period.3

Table V-1

Natural gas and ammonia: U.S. HDAN producers’ weighted-average net purchase prices of natural

gas and ammonia, by quarters, January 2001-December 2006

* * * * * * *
 4

 Natural gas is the major raw material input to produce ammonia; therefore, the price of natural gas has a strong

influence on the price of ammonia. Statistical correlation can quantify the degree to which these two purchase prices

move together as a result of factors affecting both variables in similar ways. A frequent measure of statistical

correlation is a linear correlation coefficient, where a coefficient of 1 indicates perfect correlation, declining values

indicate progressively decreasing correlation, and a correlation coefficient of zero indicates no correlation between

the data series. The correlation coefficient was 0.90 between the U.S. HDAN producers’ reported quarterly purchase

prices of natural gas and ammonia during January 2001-December 2006.

 5 U.S. producer questionnaire responses, section IV-B-20.

 6 Terra also discussed that ***. (U.S. producer questionnaire response, section IV-B-20.)

 The Henry Hub, in Vermillion Parish, Louisiana, is the gas pipeline hub on the Louisiana Gulf Coast that serves

as the delivery point for the New York Mercantile Exchange natural gas futures, and often serves as a benchmark for

U.S. wholesale natural gas spot and futures prices; about 49 percent of all U.S. wellhead natural gas production

occurs or passes close to the Henry Hub (www.traderslog.com/Henry-Hub.htm, retrieved March 13, 2007).

 7 The correlation coefficient was 0.96 between the U.S. HDAN producers’ reported quarterly purchase prices of

natural gas and the EIA’s reported prices of natural gas to the U.S. industrial sector during January 2001-December

2006.

V-2

Figure V-1

Natural gas and ammonia: U.S. HDAN producers’ net purchase prices of natural gas and 

ammonia, by quarters, January 2001-December 2006

* * * * * * *

As seen in table V-1 and figure V-1, the U.S. producers’ quarterly weighted-average purchase

prices of natural gas and ammonia trended closely together during January 2001-December 2006.4

 U.S.

producers’ purchase prices of natural gas began the period at $*** per MMBtu during January-March

2001, generally decreased to a period low of $*** per MMBtu during July-September 2002, generally

increased to a period high of $*** per MMBtu by October-December 2005, then decreased to $*** per

MMBtu by July-September 2006, before increasing to end the period at $*** per MMBtu during

October-December 2006. U.S. producers’ purchase prices of ammonia began the period at $*** per short

ton during January-March 2001, generally decreased to a period low of $*** per short ton by JulySeptember 2002, then generally increased to a period high of $*** per short ton by January-March 2006. 

Ammonia prices then decreased to $*** per short ton by July-September 2006, before increasing to end

the period at $*** per short ton during October-December 2006.

*** also discussed in their questionnaires their purchases of natural gas and/or ammonia on the

spot market and/or through forward contracts/derivatives (the latter included swaps, calls, and put

options) during 2001-06.5

 ***. ***. ***.6

It may be useful for additional comparisons of raw material prices to focus on natural gas prices,

which directly affect the prices of ammonia. The Energy Information Agency (“EIA”), Department of

Energy, reports prices of natural gas to U.S. industrial users and also forecasts these prices of natural gas. 

Figure V-2 shows the quarterly purchase prices of natural gas reported by U.S. producers and quarterly

natural gas prices to industrial users reported by the EIA. As seen in figure V-2, the two quarterly price

series tracked very closely to each other during January 2001-December 2006.7

 In addition, the EIA

forecasts that quarterly prices of natural gas to industrial users will fluctuate but increase in 2007, from

$7.77 per MMBtu during January-March 2007 to $8.68 per MMBtu during October-December 2007, and

then will fluctuate but decrease in 2008, from $9.52 per MMBtu during January-March 2008 to $8.59 per

MMBtu during October-December 2008. On an annual basis, the EIA forecasts that the natural gas 
 8

 EIA, DOE, Short-Term Energy Outlook, April 2007, p. 15.

 9 Foreign producer questionnaire responses, section III-9c. Ukrainian producers generally purchase only natural

gas and produce ammonia; the value of their reported purchases of ammonia amounted to less than *** percent of

the value of their reported purchases of natural gas during January 2001-December 2006. The Ukrainian producers

purchase natural gas in units of 1,000 cubic meters, which were converted to MMBtu at the rate of 1,000 cubic

meters = 36.409 MMBtu.

 10 The correlation coefficient was 0.55 between the U.S. HDAN producers’ reported quarterly purchase prices of

natural gas and the Ukrainian producers’ reported quarterly purchase prices of natural gas during this period.

 11 Foreign producer questionnaire responses, section III-9e, and responses to supplemental foreign producer

questionnaire question III received on April 26, 2007 from *** and on April 30, 2007 from ***.

V-3

price to industrial users will average $8.43 per MMBtu during 2007 and $8.90 per BTU during 2008,

both up from the actual level of $8.13 per MMBtu during 2006.8

Figure V-2

Natural gas: U.S. HDAN producers’ net purchase prices of natural gas and EIA’s reported natural

gas prices to the U.S. industrial sector, by quarters, January 2001-December 2006, and EIA’s

forecast of natural gas prices to industrial users, by quarters, January 2007-December 2008

* * * * * * *

The four Ukrainian HDAN producers also reported their quarterly net purchase price data for

natural gas and ammonia that they used, at least partially, to produce HDAN during January 2001-

December 2006.9

 The weighted-average quarterly net purchase prices of natural gas reported by U.S. and

Ukrainian producers are shown in figure V-3. As seen in figure V-3, the price of natural gas in Ukraine

was less than the natural gas price in the United States throughout the period; reported natural gas

purchase prices of the Ukrainian HDAN producers averaged $2.07 per MMBtu during January 2001-

December 2006, or *** percent less than the reported average natural gas purchase price of U.S. HDAN

producers of $*** per MMBtu during this period. In addition, the two price series did not track very

closely to each other during January 2001-December 2006.10 *** reported in their questionnaire

responses that there were no Ukrainian Government programs that affect the price or availability of

natural gas to the Ukrainian HDAN producers.11

Figure V-3

Natural gas: U.S. and Ukrainian HDAN producers’ net purchase prices of natural gas, by quarters,

January 2001-December 2006

* * * * * * *

Transportation Costs to the U.S. Market and Tariff Rates

Transportation costs for Russian HDAN shipped to the United States during January 2001-

December 2006 are a good proxy for transportation costs that would apply to HDAN from Ukraine,

because Russian HDAN was shipped from Black Sea ports from which HDAN from Ukraine would have

been shipped. Transportation charges for imports of HDAN from Russia to the U.S. ports of entry

averaged 18.1 percent as a ratio to official customs values and 15.3 percent as a share of U.S. landed

duty-paid values during January 2001-December 2006. The U.S. normal trade relations ad valorem
 12 U.S. producer questionnaire responses, section IV-B-9.

 13 U.S. producer questionnaire responses, section IV-B-8.

 14 Ibid.

 15 Ibid.

 16 Barge is generally considered the least expensive U.S. transportation mode for HDAN, followed by rail, and

then by truck, for comparable quantities and distances traveled. Depending on the size, barges can carry 1,200-3,400

short tons of material, but typically carry about 2,500 short tons; rail cars carry 100 short tons and trucks carry 25

short tons (staff telephone interview with ***). U.S. vessels and barges can be used to ship HDAN between U.S.

ports; depending on the size, ocean vessels can carry from 20,000 to 30,000 short tons of material, but most

commonly carry 22,000 to 27,500 short tons (staff telephone interview with ***). The Jones Act requires that U.S.

vessels must be used, which, because of reportedly high costs, may limit the use of this mode of transport among

U.S. ports.

 17 U.S. producer questionnaire responses, section IV-B-15a.

 18 The quarterly nominal and real exchange rate indices were calculated from quarterly-average nominal

exchange rates and producer price indices reported by the IMF for each country. The exchange rate indices were

based on exchange rates expressed in U.S. dollars per unit of the foreign currency, such that index numbers below

100 represent depreciation and numbers above 100 represent appreciation of the foreign currency vis-a-vis the U.S.

dollar.

V-4

import duty rate was zero percent for imports of ammonium nitrate, whether HDAN, LDAN, or aqueous

solutions, under HTS subheading 3102.30.00 during January 2001-December 2006.

U.S. Inland Transportation Costs

Two responding U.S. producers, ***, reported selling their HDAN nationally, whereas the

remaining responding U.S. producers, ***, reported selling their HDAN only in the Southeastern United

States.12 Based on responses of these four U.S. producers, 10.7 percent of the quantity of U.S.-produced

HDAN sold in the U.S. market during 2001-06 was shipped within 100 miles of the producers’ plant

and/or warehouses, 85.9 percent was shipped between 101-1,000 miles, and the remaining 3.4 percent

was shipped more than 1,000 miles.13 U.S. freight costs averaged 14.6 percent as a share of the delivered

price for all these distances shipped.14 Three of the four responding U.S. producers reported arranging

transportation to their customers’ locations, while one producer reported that its customers arranged the

transportation.15 HDAN is typically delivered by truck in the United States in distances up to 100 miles

from the supplier, and by some combination of truck, rail, and barge for distances beyond 100 miles.16

U.S. freight costs appear to be substantial as *** reported that with the closure of Agrium’s facility in the

state of Washington, dealers in the Pacific Northwest have been forced to switch to other nitrogen sources

simply because there is no economic way to buy HDAN, be it domestically produced or imported.17

Exchange Rates

Figure V-4 shows quarterly nominal and real exchange rate indices (the latter are nominal

exchange rates adjusted for relative rates of inflation)18 of the currency of Ukraine relative to the U.S.

dollar during January 2001-December 2006. The nominal value of the Ukranian hryvnia appreciated by

7.5 percent on a quarterly basis against the U.S. dollar during January 2001-December 2006, but a higher

rate of inflation in Ukraine compared to inflation in the United States during this period resulted in a more

rapid appreciation in the real value of the hryvnia, by 62.0 percent, during January 2001-December 2006.
 19 U.S. producer questionnaire responses, section IV-B-6.

 20 Price lists pertained to truck deliveries, which are used as a guide to establish prices for rail and barge

shipments, which are individually negotiated (U.S. producers’ questionnaire responses, section IV-B-4).

 21 U.S. producer questionnaire responses, section IV-B-4.

 22 Ibid.

 23 Ibid.

V-5

Figure V-4

Real and nominal exchange rate indices of the Ukrainian hryvnia relative to the U.S. dollar, and

producer/wholesale price indices in Ukraine and the United States, by quarters, January 2001-

December 2006

Note: Index (Jan.-Mar. 2001=100). Exchange rates are in U.S. dollars per Ukrainian hryvnia.

Source: International Monetary Fund, International Financial Statistics, December 2002, October and

December 2003, December 2004, November 2006, and February 2007.

PRICING PRACTICES

Of four responding U.S. producers, two (***) reported quoting both delivered and f.o.b. selling

prices for their domestically produced HDAN to their U.S. fertilizer distributor and dealer customers

during 2001-06, whereas *** reported quoting delivered prices and *** reported quoting f.o.b. plant

prices.19 The three responding U.S. producers (***) reported selling their HDAN by using price lists,20

but *** reported that they also negotiated prices in competitive sales situations.21 ***. According to the

firm, demand from end users peaks during the Spring planting season, which generally occurs between

February-June, while the period of time covering July through January is considered the off season. ***

also stated that U.S. producers continue to operate during the off season to build inventories, which

supply the lower levels of off-season demand and are used to fill the distribution system in time for the

peak season.22 ***.23

The two responding U.S. producers (***) reported that *** percent of the quantity of their

domestic HDAN sales during 2006 was on a short-term contract basis and the remaining *** percent was
 24 U.S. producer questionnaire responses, section IV-B-1. Spot sales are usually one-time delivery, within 30

days of the purchase agreement; short-term contracts are for multiple deliveries for up to 12 months after the

purchase agreement; and long-term contracts are for multiple deliveries for more than 12 months after the purchase

agreement.

 25 U.S. producer questionnaire responses, section IV-B-1.

 26 U.S. producer questionnaire responses, section IV-B-3.

 27 U.S. producer questionnaire responses, section IV-B-5.

 28 *** reported that their national accounts are very large consumers of HDAN, have multiple retail or

distribution locations, all of the purchases are conducted through the national accounts’ corporate offices, and, for

***, provide their own truck transportation.

 29 U.S. producer questionnaire responses, section IV-B-7.

 30 *** reported that it has storage for about *** days of HDAN production at the plant plus some additional offsite storage, so it asserted that it is critical to move HDAN quickly into the distribution system (U.S. producer

questionnaire responses, section IV-B-7). *** reported end-of-period inventories for its HDAN in 2006 that were

*** percent of its 2006 HDAN production.

V-6

on a spot basis.24 *** reported that *** and such sales likely dominated U.S. producers’ HDAN sales in

the past; the short-term sales volume was dominated by ***.25 *** reported that short-term contracts

ranged from 2 months to one year, that the short-term contracts for less than one year fix price and

quantity, that prices in the one-year contracts are agreed to monthly and some of these contracts have

meet-or-release provisions, but that the majority of short-term contracts do not have meet-or-release

provisions.26

The three responding U.S. HDAN producers (***) reported offering discounts to ***.27 ***. ***

reported that it allowed a $*** per short ton discount on HDAN to its ***, and any other discounting

would occur in competitive situations. *** reported allowing a $*** per short ton discount for HDAN on

***. In addition, *** reported that it has contracts with its ***. *** also reported that it has *** national

account customers, which include ***.28

Both responding U.S. producers (***) reported that they typically shipped their HDAN from

inventory to their customers ***.29 *** reported shipping about *** percent of its HDAN from inventory

and *** percent from production; its order lead times were *** days for shipments from inventory and

*** days for shipments from production. *** reported shipping *** percent of its HDAN from inventory,

but instead of reporting the requested order lead times provided the following response. ***30 ***.
 31 Comparable price data based on a U.S. f.o.b. port basis were also requested of U.S. importers for sales of any

imported HDAN from Ukraine (U.S. importer questionnaire response, section III-A), but there were no responses

because there have been no U.S. imports of HDAN from Ukraine during 2001-06.

 32 U.S. producer questionnaire responses, section IV-A.

 33 All values were requested to be net of returns, refunds, rebates, discounts, and credits. 

 34 The five U.S. producers for which price data were reported were ***. 

V-7

PRICE DATA

U.S. Producer Questionnaire Price Data31

The Commission requested U.S. producers of HDAN to provide in their questionnaire responses

monthly sales data for the U.S.-produced HDAN that was shipped to U.S. customers (unrelated to the

suppliers) during January 2001-December 2006. Monthly quantity and value of sales were requested for

pricing based on:32

(1) a net U.S. f.o.b. plant basis (i.e., product that was picked up at the plant);

(2) a net U.S. f.o.b. other-than-plant shipping point basis (i.e., product that was picked up at a

distribution point other than the production plant(s); and

(3) a net delivered basis.33

For sales that were priced on a U.S. f.o.b. other-than-plant shipping point basis, producers were

requested also to report the freight and other handling costs necessary to transport the HDAN from the

U.S. plant to the other-than-plant shipping point. For sales that were priced on a delivered basis,

producers were requested to report the freight and other handling costs necessary to transport the HDAN

from the U.S. plant to the customers’ locations. The reported price data discussed here are for all reported

pricing, on a comparable U.S. f.o.b. plant basis. The product for which pricing data were requested was

as follows:

Product.--Solid, fertilizer-grade ammonium nitrate, sold in bulk, with a bulk density

equal to or greater than 53 pounds per cubic foot.

The requested price information for U.S.-produced HDAN involved five U.S. producers of

HDAN, but not necessarily for all periods requested.34 The reported sales data for pricing purposes

totaled *** short tons of U.S.-produced HDAN during January 2001-December 2006 and accounted for

*** percent of all commercial U.S. shipments of U.S.-produced HDAN during this period. Price trends

of the U.S.-produced HDAN are quarterly net U.S. f.o.b. selling price data developed from the reported

monthly price data and reflect all reported pricing adjusted to a U.S. f.o.b. plant basis.

The quarterly price and quantity data fluctuated due importantly to large changes in the U.S. price

of natural gas, but also often due to other supply and demand factors, such as changes in weather,

seasonal factors, the impact of security measures, shipping factors, and temporary or permanent

production curtailments and shutdowns.
V-8

Price Trends

HDAN quarterly selling price trend data for domestic producers of the U.S.-produced HDAN

during January 2001-December 2006 are shown in table V-2 and figure V-5; net quarterly prices for U.S.

producers’ purchases of natural gas during this period are also shown in figure V-5.

Table V-2

HDAN: U.S. weighted-average f.o.b. plant selling prices, net of U.S. freight and other handling

costs, and quantities of U.S.-produced HDAN1

 sold to U.S. customers (unrelated to suppliers), by

quarters, January 2001-December 2006

Period

Price

(per short

ton)

Quantity

(short tons)

No. of

firms

reporting 

Price

(per short

ton)

Quantity

(short tons)

No. of

firms

reporting

2001: 2004:

 Jan.-Mar. $151.19 206,908 4 $161.25 293,318 4

 Apr.-June 145.97 294,173 4 157.54 250,110 4

 July-Sept. 118.01 184,731 4 161.45 179,518 4

 Oct.-Dec. 104.28 310,847 4 168.16 243,714 4

2002: 2005:

 Jan.-Mar. 105.51 275,328 4 177.04 265,053 4

 Apr.-June 102.29 428,918 4 199.42 300,177 3

 July-Sept. 104.80 208,906 4 208.65 163,715 3

 Oct.-Dec. 99.91 294,912 4 *** *** ***

2003: 2006:

 Jan.-Mar. 123.04 294,828 4 *** *** ***

 Apr.-June 152.71 283,407 4 *** *** ***

 July-Sept. 149.40 205,590 4 *** *** ***

 Oct.-Dec. 149.41 315,155 4 *** *** ***

 1 Product is solid, fertilizer-grade ammonium nitrate, sold in bulk, with a bulk density equal to or greater than 53

pounds per cubic foot.

Source: Compiled from data submitted in response to Commission questionnaires.

Figure V-5

HDAN: U.S. weighted-average f.o.b. plant selling prices and quantities, net of U.S. freight and

other handling costs, of U.S.-produced HDAN sold to U.S. customers (unrelated to suppliers), and

U.S. producers’ net purchase prices of their natural gas requirements, by quarters, January 2001-

December 2006

* * * * * * *
 35 The correlation coefficient was 0.87 between U.S. producers’ reported quarterly selling prices of HDAN and

their reported quarterly purchase prices of natural gas during January 2001-December 2006.

 36 These three responding U.S. producers were ***.

 37 U.S. producer questionnaire responses, section IV-B-20.

 38 Ibid. A fourth responding U.S. producer, ***, reported that raw materials’ impact on pricing has been

minimal.

 39 U.S. producer questionnaire responses, section IV-B-20b.

 40 U.S. producer questionnaire responses, section IV-B-30b.

 41 U.S. importers’ questionnaire responses, section III-B-30b.

 42 U.S. purchasers’ questionnaire responses, section III-42b.

 43 U.S. foreign producers’ questionnaire responses, section III-20.

V-9

U.S. producers’ net quarterly f.o.b. selling prices of their U.S.-produced HDAN and their net

quarterly purchase prices for their natural gas requirements followed similar trends during January 2001-

December 2006.35 The HDAN quarterly selling price began at $151.19 per short ton during JanuaryMarch 2001, then generally decreased to a period low of $99.91 per short ton by October-December

2002, while the decreasing purchase price of natural gas reached a period low of $*** per MMBtu by

July-September 2002. The HDAN selling price then generally increased and *** $*** per short ton by

January-March 2006, while the increasing purchase price of natural gas *** $*** per MMBtu by

October-December 2005. The HDAN selling price then decreased to end the period at $*** per short ton

during October-December 2006, while the purchase price of natural gas decreased to $*** per MMBtu by

July-September 2006 before increasing to end the period at $*** per MMBtu during October-December

2006. Due to peak seasonal use of HDAN from February-June, total shipment quantities during the first

two quarters of each year were higher than total shipment quantities during the last two quarters of the

year. This may make it difficult to notice any trends in shipment quantities from quarter to quarter. U.S.

producers’ quarterly quantity shipments of HDAN fluctuated throughout January 2001-December 2006,

reaching a period high of 428,918 short tons during April-June 2002 and then fluctuated with no apparent

trend through April-June 2005 when shipments were 300,177 short tons. Quarterly shipments then

generally followed a downward trend ending at *** short tons during October-December 2006. 

Three of four responding U.S. producers reported that,36 although changes in prices of natural gas

affect HDAN prices because it is such a large component of HDAN production costs, prices for HDAN

do not change in direct relationship to changes in natural gas prices because other factors in the market

also affect price (e.g., U.S. and world nitrogen supply, demand considerations, and transportation costs).37

According to these three producers, HDAN production is reduced when HDAN prices do not increase

enough to cover increases in natural gas costs.38

***.39 *** reported that its highest selling price for HDAN was $*** per short ton and its lowest

selling price for HDAN was $*** per short ton during this period, and ***. *** reported that its highest

selling price for HDAN was $*** per short ton and its lowest selling price for HDAN was $*** per short

ton during this period, and ***.

Price Comparisons Within The U.S. Market

U.S. HDAN producers,40 importers,41 purchasers,42 and Ukrainian HDAN producers 43 were

requested in their questionnaire responses to compare prices of U.S.-produced and imported HDAN in the

U.S. market during January 2001-December 2006. Useable responses were reported by two U.S.
 44 U.S. producers’ and purchasers’ questionnaire responses, sections IV-B-30b and III-42b, respectively. These

comments were the same in *** producer and purchaser questionnaire responses.

 45 *** noted that the country of origin becomes difficult to ascertain once the imported product enters the

distribution system because prills from different countries are very similar and can be easily blended while in the

distribution chain. The trade press reports the prices for import tons that are available for purchase, but, according to

***, this does not tell the firm anything about the volumes or prices of imports that were under contract at the time

of export. Due to these gaps in information, *** asserted that the systematic collection of import prices for HDAN

from different countries is extremely difficult and of limited value. According to ***, in most cases importers want

to have the majority of a vessel sold before they commit to bringing that product to the United States. Sometimes

these deals are made a couple of months before the vessel arrives. Thus, the firm does not have any way of knowing

the price or country of origin of these transactions.

 46 According to ***, the primary sources of HDAN into the United States in 2006 were Romania, the

Netherlands, Georgia, and Bulgaria. ***, imports of ammonium nitrate from Canada were LDAN.

 47 *** stated that it references import average unit values (“AUVs”) because it does not systematically track the

prices of HDAN from specific countries. The firm indicated that, nevertheless, import unit values at least offer an

apples-to-apples comparison of the relative prices that importers get from their various sources. *** indicated that

import AUVs are not at a comparable level of the market where U.S. producers are selling their HDAN, but,

according to the firm, the difference between the import AUV and the f.o.b. U.S. plant price provides some useful

information regarding the ability of an importer to undercut the price of the domestic product.

V-10

producers, ***; two U.S. importers, ***; and five U.S. purchasers, ***. The Ukrainian producers did not

export HDAN to the United States during January 2001-December 2006, and reported that they were

unaware of pricing in the United States. 

Comments of ***44

*** indicated that it does not track the specific price and country-of-origin information requested

and cannot provide it, but the firm asserted that when imports from Russia and then Ukraine flooded the

market, the prices were so low and the volumes so great that it could sometimes identify particular sales

of these products.45

According to ***, the trade press (such as Green Markets and Fertilizer Week) contains

information about imported HDAN, while dealers also will tell the firm the price and whether their

product is imported, but they often do not know the country of origin.

*** asserted that over the past several years, the price charged for U.S.-produced HDAN has been

directly influenced by the price of imports entering the U.S. market. Until a few years ago, the firm

indicated that a majority of imports went into New Orleans and then moved on barges to numerous river

warehouses located on the Mississippi, Arkansas, and Ohio rivers. In addition, some of this product

moved along the Gulf Coast to Victoria, TX. After Nitram ceased production in 2003, *** indicated that

vessels of HDAN started unloading in Tampa, FL, with this product shipped by rail and truck out of the

warehouse there. Also, within the past couple of months, the firm indicated that vessels have started

unloading into a warehouse in Wilmington, NC, where this product has been sold via truck and rail.46

According to ***, when the HDAN enters the market through the Wilmington and Tampa ports, it knows

that it is competing with imported product. The firm also stated that, when product is filling the storage

facilities on the river and not moving, it knows that imports have entered the country, are widely

available, and are competing for business with its product.

According to ***, the lowest-priced HDAN imports in 2006, based on U.S. import statistics, were

from the Netherlands, followed by Romania, Bulgaria, and Georgia.47 *** indicated that, while there are

some dealers that will give it a few dollars more for its product and service, most of the bigger buyers are
 48 The firm indicated that it competes against these imports in over 15 warehouse terminal locations.

 49 U.S. producer and purchaser questionnaire responses, sections IV-B-30b and III-42b, respectively. These

comments were the same in *** producer and purchaser questionnaire responses.

 50 U.S. importer questionnaire responses, section III-B-30b.

 51 U.S. purchaser questionnaire responses, section III-42b. Comments by *** in their purchaser questionnaire

responses were the same as in their producer questionnaire responses, and were shown earlier. 

V-11

more inclined to want the firm to match the import price because HDAN is a commodity. The firm noted

that the bottom line is that its pricing is always under pressure directly from these imports.48 *** asserted

that it can survive the fairly traded HDAN, but it would likely be impossible for the firm to survive

unfairly traded HDAN, given the asserted larger potential volume available from Ukraine and aggressive

pricing that it would expect. *** asserted that HDAN is a commodity product, and competition inevitably

occurs on the basis of price.

Comments of ***49

According to ***, once the antidumping agreement with Russia and the antidumping duty order

on Ukraine were put in place, prices of imports generally returned to a market level of imports from all

other sources. *** asserted that imports from *** are generally priced ***. According to ***, recently,

in apparent reaction to a weak EU market, *** has been importing *** of HDAN and selling the imported

product at ***. *** indicated that it recently lost a sale because *** offered product at about $***-$***

per short ton below the domestic producer’s delivered price.

Comments of ***50

*** reported that U.S.-produced HDAN is priced higher than imports unless supply and demand

balance is tight, then the difference disappears, whereas *** reported that selling prices between the U.S.-

produced and imported HDAN seem in parity. 

Comments of ***51

*** reported that imports of HDAN are priced slightly under the U.S.-produced HDAN, where

supply and demand dynamics, as well as other nitrogen products, dictate the HDAN price. *** stated that

import and domestic prices of HDAN have been equal in the last few years. *** asserted that U.S.-

produced HDAN is not available to Florida users at a competitive price.
 52 U.S. producer questionnaire responses, section IV-B-30a.

 53 U.S. importer questionnaire responses, section III-B-30a.

 54 U.S. purchaser questionnaire responses, section III-42a.

 55 U.S. foreign producer questionnaire responses, section III-20.

 56 U.S. producer and purchaser questionnaire responses, sections IV-B-30a and III-42a, respectively. These

comments were the same in *** producer and purchaser questionnaire responses.

 57 U.S. producer and purchaser questionnaire responses, sections IV-B-30a and III-42a, respectively. These

comments were the same in *** producer and purchaser questionnaire responses.

 58 Foreign producer questionnaire responses, section III-20.

V-12

Price Comparisons Between U.S. and Non-U.S. Markets

U.S. HDAN producers,52 importers,53 purchasers,54 and Ukrainian HDAN producers55 were

requested in their questionnaire responses to compare prices of HDAN in the U.S. market with prices of 

HDAN in non-U.S. markets during January 2001-December 2006. Useable responses were reported by

two U.S. producers, ***; two U.S. purchasers, ***; and three Ukrainian producers, ***. The responding

U.S. importers reported that they did not have price data available for non-U.S. markets.

Comments of ***56

*** asserted that the United States appears to be a very attractive market, such that, without the

antidumping duty order in place, there is little doubt, according to the firm, that Ukrainian HDAN would

quickly target the U.S. market. *** reported that ***. *** assumed ocean freight of around $*** per

metric ton, such that, according to the firm, it would appear that the U.S. market carries a $***-$*** per

metric ton premium for product sold out of the Baltic/Black Sea area.

Comments of ***57

*** stated that it does not have direct experience with HDAN prices in non-U.S. markets other

than Canada. In Canada, according to the firm, *** handle HDAN from a variety of countries, but the

firm typically does not know the countries of origin. *** indicated that it is attempting to obtain relevant

information from *** on pricing in European markets during the relevant period.

Comments of ***58

*** stated that during 2006 the average price of HDAN in Ukraine and its export price, f.o.b.,

Port Jujniy (Yuzny) (Black Sea), according to *** was $***-$*** per short ton.

*** indicated that information for 2001-05 was not readily available, but it was able to provide

HDAN price comparisons for 2006 as follows: (1) the average bulk Black Sea price was $*** per short

ton for the year, but ranged from $*** per short ton in June to $*** in December; (2) the average bulk

New Orleans, LA, price was $*** per short ton for the year, but ranged from $*** per short ton in August

to $*** per short ton during January-March; and (3) the average local Ukrainian Market Severodonetsk

price was $*** per short ton for the year, but ranged from $*** per short ton in June to $*** per short ton

in December.
 59 Green Markets is published by Pike & Fischer, Inc., and is available by subscription. The fertilizer price data

in Green Markets include both U.S.-produced and imported fertilizers without any distinction for country of origin. 

The Mid Cornbelt prices shown here represent fertilizer prices to distributors and dealers in Illinois, Indiana, Iowa,

Missouri, Nebraska, and Ohio, where corn production is concentrated. The Mid Cornbelt states together accounted

for 33.5 percent of total U.S. nitrogen fertilizer consumption during crop year 2006. Mid Cornbelt prices are

commonly used to report nitrogen fertilizer prices, because corn requires the highest application rate for nitrogen

fertilizers of all crops, averaging 136 pounds of nitrogen fertilizer per acre in crop year 2005 (the latest period for

which data were available).

 60 Each type of nitrogenous fertilizer has a different nitrogen content as follows: anhydrous ammonia (82.2

percent), urea (46.0 percent), UAN (28-32 percent), and HDAN (34.0 percent). Green Markets reports prices for

anhydrous ammonia, urea, and HDAN in dollars per short ton of material, while it reports prices of UAN in dollars

per nitrogen unit. Pricing the various nitrogenous fertilizers per nitrogen unit is a common practice in the U.S.

industry to evaluate relative prices of these principal single-nutrient nitrogen fertilizers.

 61 The correlation coefficients involving the quarterly prices between HDAN and the other nitrogenous fertilizers

reported by Green Markets during January 2001-March 2007 were all above 0.93. The correlation coefficient

between the quarterly prices of HDAN calculated from Green Markets and those reported by U.S. producers for their

domestically produced HDAN during January 2001-December 2006 was 0.99.

 62 The Association of American Plant Food Control Officials and The Fertilizer Institute, Commercial Fertilizers

2006, April 2007.

V-13

*** reported annual average prices of its HDAN in U.S. dollars for the Ukrainian market and for

export to non-U.S. export markets during 2001-06; *** did not specify whether the reported prices were

per short ton, metric ton, or some other measurement. These data are shown in the following tabulation.

* * * * * * *

Public U.S. Price Data

U.S. price data for HDAN and the three other major single-nutrient nitrogenous

fertilizers–anhydrous ammonia, urea, and UAN–are reported weekly in Green Markets.

59 Figure V-6

shows U.S. quarterly prices of anhydrous ammonia, urea, UAN, and HDAN during January 2001-March

2007 calculated from Green Markets’ weekly price data. Prices of each type of nitrogenous fertilizer are

shown in dollars per nitrogen unit (“NU”), which equals 20 pounds of contained nitrogen, and provides a

common basis for directly comparing prices of the various single-nutrient nitrogenous fertilizers.60 As

seen in figure V-6, prices of these four nitrogenous fertilizers moved closely together,61 which likely

reflects the importance of natural gas as their common feedstock and similar demand characteristics; all

of these fertilizers are purchased for their nitrogen content to provide this vital nutrient to pasture, hay,

crops, etc.

Figure V-6 also shows that prices (in dollars per NU) of anhydrous ammonia are generally the

lowest, followed by successively higher prices of urea, UAN, and finally HDAN as the highest-priced of

the four nitrogenous fertilizers. During crop year 2006 (the most recent year data were available),

anhydrous ammonia accounted for 26.0 percent of all nitrogen fertilizer used in the United States (based

on contained nitrogen), UAN accounted for 23.5 percent, urea for 20.5 percent, and HDAN accounted for 

2.7 percent; although not shown, nitrogen in multi-nutrient fertilizers accounted for 20.4 percent and

nitrogen in other fertilizer forms accounted for the remaining 6.9 percent.62
 63 Fertilizer prices seen rising with U.S. corn acres, Reuters News Service, February 22, 2007,

http://today.reuters.com/news/articleinvesting.apsx? View=CN&storyID=2007, retrieved March 2, 2007.

V-14

Figure V-6

Single-nutrient nitrogenous fertilizers: U.S. prices of anhydrous ammonia, urea, UAN, and HDAN,

by quarters, January 2001-March 2007

Note: A nitrogen unit equals 20 pounds of nitrogen; Mid Cornbelt prices were calculated as simple averages of

reported high and low prices.

Source: Green Markets, Pike & Fischer, Inc., weekly issues, January 1, 2001-March 26, 2007.

As can be seen from figure V-6, U.S. average quarterly prices (in dollars per NU) of the four

major single-nutrient nitrogenous fertilizers first generally decreased to period lows during October 2001-

September 2002, ranging from $*** per NU during October-December 2001 for anhydrous ammonia to

$*** per NU during July-September 2002 for HDAN. Prices then generally increased through OctoberDecember 2005 for anhydrous ammonia, UAN, and urea, and through January-March 2006 for HDAN. 

The prices during these latter periods ranged from $*** per NU during October-December 2005 for

anhydrous ammonia (a period high) to $*** per NU during January-March 2006 for HDAN. Prices then

generally decreased before turning up by October-December 2006 and/or January-March 2007 and

ending in the first quarter of 2007 at period highs for urea, UAN, and HDAN. Ending period prices were

$*** per NU for anhydrous ammonia, and period highs were $*** per NU for urea, $*** per NU for

UAN, and $*** per NU for HDAN. Fertilizer prices in general are expected to rise appreciably this

spring as U.S. corn acreage is expected to increase substantially to meet strong demand from the ethanol

industry.63 Green Markets’ weekly Mid Cornbelt prices of nitrogen fertilizers for April 2007, averaged

$*** per NU for anhydrous ammonia, $*** per NU for urea, $*** per NU for UAN, and $*** per NU for
 64 Green Markets, Pike & Fischer, Inc., various issues, April 2-30, 2007, p. 4. The average prices in April 2007

for UAN and HDAN were the highest monthly prices for these nitrogen fertilizers during January 2001-April 2007.

 65 Green Markets, Pike & Fischer, Inc., April 16, 2007, pp. 13-14.

V-15

HDAN.64 Green Markets also reported that the high costs of fertilizer has led to some growers to save by

switching to manure and poultry litter, although these latter sources of nutrients typically do not meet the

nitrogen target for many farmers.65

A-1

APPENDIX A

FEDERAL REGISTER NOTICES AND THE

COMMISSION’S STATEMENT ON ADEQUACY

43516 Federal Register / Vol. 71, No. 147 / Tuesday, August 1, 2006 / Notices 

1No response to this request for information is 

required if a currently valid Office of Management 

and Budget (OMB) number is not displayed; the 

OMB number is 3117–0016/USITC No. 06–5–155,

expiration date June 30, 2008. Public reporting 

burden for the request is estimated to average 10 

hours per response. Please send comments 

regarding the accuracy of this burden estimate to 

the Office of Investigations, U.S. International Trade 

Commission, 500 E Street, SW., Washington, DC 

20436.

Floyd County 

Double-Cola Bottling Company, 419 E. 

Second Ave., Rome, 06000738 

Fulton County 

61 16th Street Apartment Building, 61 16th 

St., Atlanta, 06000732 

Newtown Elementary School, 3115 Old 

Alabama Rd., Alpharetta, 06000739 

Smith, Archibald, House, 935 Alpharetta St., 

Roswell, 06000740 

Walker County 

Chickamauga Lodge No. 221, Free and 

Accepted Masons, Prince Hall Affiliate, 1378 

GA 341 S, Chickamauga, 06000736 

IDAHO

Power County 

Warwas, Richard and Winnie, House, 

(American Falls, Idaho, Relocated 

Townsite MPS), 275 Polk St., American 

Falls, 06000741 

LOUISIANA

Orleans Parish 

Tureaud, A.P., Sr., House, 3121 Pauger St., 

New Orleans, 06000742 

MARYLAND

Carroll County 

Winemiller Family Farm, 1909 Francis Scott 

Key Hwy (MD 194), Taneytown, 06000743 

MONTANA

Glacier County 

Chief Mountain Border Station and Quarters, 

MT 17 at Canadian Border, Glacier 

National Park, Babb, 06000744 

PENNSYLVANIA

Delaware County 

Thornton Village Historic District, Centered 

on Thonton and Glen Mills Rds., 

Thornbury, 06000745 

Philadelphia County 

Nugent Home for Baptists, 221 W. Johnson 

St., Philadelphia, 06000746 

VIRGINIA

Albemarle County 

Aviator, The, 575 Alderman Rd., 

Charlotteville, 06000758 

Arlington County 

Claremont Historic District, (Historic 

Residential Suburbs in the United States, 

1830–1960 MPS) Bounded by S. Dinwiddie 

St., S. Chesterfield Rd., S. Buchanan St., 

25th. St. S, 24th St. S, 23rd St. S and 22nd 

St. S, Arlington, 06000751 

Charlotte County 

Clarkton Bridge, VA 620 over the Staunton R, 

Nathalie, 06000747 

Fauquier County 

Belle Grove, 1402 Winchester Rd., Delaplane, 

06000756

Blue Ridge Farm, 1799 Blue Ridge Farm Rd., 

Upperville, 06000753 

Lexington Independent City 

First Baptist Church—Lexington, 103 N. 

Main St., Lexington (Independent City), 

06000757

Madison County 

Graves Mill, 29 Graves Rd., Wolftown, 

06000754

Nelson County 

Tyro Mill, VA 56 (Crabtree Falls Hwy), Tyro, 

06000749

Richmond Independent City 

Fifth and Main Downtown Historic District, 

400–500 Blks E. Franklin St., 400–600 blks 

E. Main St., 00 blks N 4th, 5th and 6th Sts., 

00 blk S 5th St., Richmond (Independent 

City), 06000750 

Grays, Elliott, Marker—Jefferson Davis 

Highway, (UDC Commemorative Highway 

Markers along the Jefferson Davis Highway 

in Virginia) Jct. of Harwood St., Ingram 

Ave., and Jefferson Davis Hwy., Richmond 

(Independent City), 06000748 

Roanoke Independent City 

Roanoke Apartments, 1402 Maiden Ln., 

Roanoke (Independent City), 06000759 

Rockbridge County 

Hickory Hill, 197 Hickory Hill Ln., Glasgow, 

06000760

Waynesboro Independent City 

ose Cliff, 835 Oak Ave., Waynesboro 

(Independent City), 06000755 

Wise County 

Kelly View School, Appalachia Elementary 

School, Norton Rd., U.S. 23, Appalachia, 

06000752

A request for REMOVAL has been 

made for the following resource: 

MINNESOTA

Carlton County 

Kalevala Finnish Evangelical National 

Lutheran Church, MN 73, Kalevlala 

vicinity, 98001218 

[FR Doc. E6–12283 Filed 7–31–06; 8:45 am] 

BILLING CODE 4312–51–P

INTERNATIONAL TRADE 

COMMISSION

[Investigation No. 731–TA–894 (Review)] 

Ammonium Nitrate From Ukraine 

AGENCY: United States International 

Trade Commission. 

ACTION: Institution of a five-year review 

concerning the antidumping duty order 

on ammonium nitrate from Ukraine. 

SUMMARY: The Commission hereby gives 

notice that it has instituted a review 

pursuant to section 751(c) of the Tariff 

Act of 1930 (19 U.S.C. 1675(c)) (the Act) 

to determine whether revocation of the 

antidumping duty order on ammonium 

nitrate from Ukraine would be likely to 

lead to continuation or recurrence of 

material injury. Pursuant to section 

751(c)(2) of the Act, interested parties 

are requested to respond to this notice 

by submitting the information specified 

below to the Commission; 1 to be 

assured of consideration, the deadline 

for responses is September 20, 2006. 

Comments on the adequacy of responses 

may be filed with the Commission by 

October 16, 2006. 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). 

DATES: Effective Date: August 1, 2006. 

FOR FURTHER INFORMATION CONTACT:

Mary Messer (202–205–3193), 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 

this review may be viewed on the 

Commission’s electronic docket (EDIS) 

at http://edis.usitc.gov.

SUPPLEMENTARY INFORMATION:

Background. On September 12, 2001, 

the Department of Commerce issued an 

antidumping duty order on imports of 

ammonium nitrate from Ukraine (66 FR 

47451). The Commission is conducting 

a review to determine whether 

revocation of the order would be likely 

to lead to continuation or recurrence of 

material injury to the domestic industry 

within a reasonably foreseeable time. It 

will assess the adequacy of interested 

party responses to this notice of 

institution to determine whether to 

conduct a full review or an expedited 

review. The Commission’s

determination in any expedited review 

will be based on the facts available, 


rwilkins on PROD1PC63 with NOTICES
Federal Register / Vol. 71, No. 147 / Tuesday, August 1, 2006 / Notices 43517

which may include information 

provided in response to this notice. 

Definitions. The following definitions 

apply to this review: 

(1) Subject Merchandise is the class or 

kind of merchandise that is within the 

scope of the five-year review, as defined 

by the Department of Commerce. 

(2) The Subject Country in this review 

is Ukraine. 

(3) The Domestic Like Product is the 

domestically produced product or 

products which are like, or in the 

absence of like, most similar in 

characteristics and uses with, the 

Subject Merchandise. In its original 

determination, the Commission defined 

the Domestic Like Product coextensively

with the scope of subject merchandise 

as fertilizer grade ammonium nitrate 

products with a bulk density equal to or 

greater than 53 pounds per cubic foot. 

(4) The Domestic Industry is the U.S. 

producers as a whole of the Domestic

Like Product, or those producers whose 

collective output of the Domestic Like 

Product constitutes a major proportion 

of the total domestic production of the 

product. In its original determination, 

the Commission defined the Domestic

Industry as all domestic producers of 

the Domestic Like Product.

(5) The Order Date is the date that the 

antidumping duty order under review 

became effective. In this review, the 

Order Date is September 12, 2001. 

(6) An Importer is any person or firm 

engaged, either directly or through a 

parent company or subsidiary, in 

importing the Subject Merchandise into

the United States from a foreign 

manufacturer or through its selling 

agent.

Participation in the review 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 review as parties must 

file an entry of appearance with the 

Secretary to the Commission, as 

provided in section 201.11(b)(4) of the 

Commission’s rules, no later than 21 

days after publication of this notice in 

the Federal Register. The Secretary will 

maintain a public service list containing 

the names and addresses of all persons, 

or their representatives, who are parties 

to the review. 

Former Commission employees who 

are seeking to appear in Commission 

five-year reviews are reminded that they 

are required, pursuant to 19 CFR 201.15, 

to seek Commission approval if the 

matter in which they are seeking to 

appear was pending in any manner or 

form during their Commission 

employment. The Commission’s

designated agency ethics official has 

advised that a five-year review is the 

‘‘same particular matter’’ as the 

underlying original investigation for 

purposes of 19 CFR 201.15 and 18 

U.S.C. 207, the post employment statute 

for Federal employees. Former 

employees may seek informal advice 

from Commission ethics officials with 

respect to this and the related issue of 

whether the employee’s participation 

was ‘‘personal and substantial.’’

However, any informal consultation will 

not relieve former employees of the 

obligation to seek approval to appear 

from the Commission under its rule 

201.15. For ethics advice, contact Carol 

McCue Verratti, Deputy Agency Ethics 

Official, at 202–205–3088.

Limited disclosure of business 

proprietary information (BPI) under an 

administrative protective order (APO) 

and APO service list. Pursuant to 

section 207.7(a) of the Commission’s

rules, the Secretary will make BPI 

submitted in this review available to 

authorized applicants under the APO 

issued in the review, provided that the 

application is made no later than 21 

days after publication of this notice in 

the Federal Register. Authorized 

applicants must represent interested 

parties, as defined in 19 U.S.C. 1677(9), 

who are parties to the review. A 

separate service list will be maintained 

by the Secretary for those parties 

authorized to receive BPI under the 

APO.

Certification. Pursuant to section 

207.3 of the Commission’s rules, any 

person submitting information to the 

Commission in connection with this 

review must certify that the information 

is accurate and complete to the best of 

the submitter’s knowledge. In making 

the certification, the submitter will be 

deemed to consent, unless otherwise 

specified, for the Commission, its 

employees, and contract personnel to 

use the information provided in any 

other reviews or investigations of the 

same or comparable products which the 

Commission conducts under Title VII of 

the Act, or in internal audits and 

investigations relating to the programs 

and operations of the Commission 

pursuant to 5 U.S.C. Appendix 3. 

Written submissions. Pursuant to 

section 207.61 of the Commission’s

rules, each interested party response to 

this notice must provide the information 

specified below. The deadline for filing 

such responses is September 20, 2006. 

Pursuant to section 207.62(b) of the 

Commission’s rules, eligible parties (as 

specified in Commission rule 

207.62(b)(1)) may also file comments 

concerning the adequacy of responses to 

the notice of institution and whether the 

Commission should conduct an 

expedited or full review. The deadline 

for filing such comments is October 16, 

2006. All written submissions must 

conform with the provisions of sections 

201.8 and 207.3 of the Commission’s

rules and any submissions that contain 

BPI must also conform with the 

requirements of sections 201.6 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). Also, 

in accordance with sections 201.16(c) 

and 207.3 of the Commission’s rules, 

each document filed by a party to the 

review must be served on all other 

parties to the review (as identified by 

either the public or APO service list as 

appropriate), and a certificate of service 

must accompany the document (if you 

are not a party to the review you do not 

need to serve your response). 

Inability to provide requested 

information. Pursuant to section 

207.61(c) of the Commission’s rules, any 

interested party that cannot furnish the 

information requested by this notice in 

the requested form and manner shall 

notify the Commission at the earliest 

possible time, provide a full explanation 

of why it cannot provide the requested 

information, and indicate alternative 

forms in which it can provide 

equivalent information. If an interested 

party does not provide this notification 

(or the Commission finds the 

explanation provided in the notification 

inadequate) and fails to provide a 

complete response to this notice, the 

Commission may take an adverse 

inference against the party pursuant to 

section 776(b) of the Act in making its 

determination in the review. 

Information to be Provided in 

Response to This Notice of Institution: 

As used below, the term ‘‘firm’’ includes 

any related firms. 

(1) The name and address of your firm 

or entity (including World Wide Web 

address if available) and name, 

telephone number, fax number, and Email address of the certifying official. 

(2) A statement indicating whether 

your firm/entity is a U.S. producer of 

the Domestic Like Product, a U.S. union 

or worker group, a U.S. importer of the 

Subject Merchandise, a foreign producer 

or exporter of the Subject Merchandise,

a U.S. or foreign trade or business 

association, or another interested party 

(including an explanation). If you are a 

union/worker group or trade/business 

association, identify the firms in which 

your workers are employed or which are 

members of your association. 


rwilkins on PROD1PC63 with NOTICES
43518 Federal Register / Vol. 71, No. 147 / Tuesday, August 1, 2006 / Notices 

1No response to this request for information is 

required if a currently valid Office of Management 

and Budget (OMB) number is not displayed; the 

OMB number is 3117–0016/USITC No. 06–5–156,

expiration date June 30, 2008. Public reporting 

burden for the request is estimated to average 10 

hours per response. Please send comments 

regarding the accuracy of this burden estimate to 

the Office of Investigations, U.S. International Trade 

Commission, 500 E Street, SW., Washington, DC

20436.

(3) A statement indicating whether 

your firm/entity is willing to participate 

in this review by providing information 

requested by the Commission. 

(4) A statement of the likely effects of 

the revocation of the antidumping duty 

order on the Domestic Industry in

general and/or your firm/entity 

specifically. In your response, please 

discuss the various factors specified in 

section 752(a) of the Act (19 U.S.C. 

1675a(a)) including the likely volume of 

subject imports, likely price effects of 

subject imports, and likely impact of 

imports of Subject Merchandise on the 

Domestic Industry.

(5) A list of all known and currently 

operating U.S. producers of the 

Domestic Like Product. Identify any 

known related parties and the nature of 

the relationship as defined in section 

771(4)(B) of the Act (19 U.S.C. 

1677(4)(B)).

(6) A list of all known and currently 

operating U.S. importers of the Subject

Merchandise and producers of the 

Subject Merchandise in the Subject

Country that currently export or have 

exported Subject Merchandise to the 

United States or other countries since 

the Order Date. 

(7) If you are a U.S. producer of the 

Domestic Like Product, provide the 

following information on your firm’s

operations on that product during 

calendar year 2005 (report quantity data 

in short tons and value data in U.S. 

dollars, f.o.b. plant). If you are a union/ 

worker group or trade/business 

association, provide the information, on 

an aggregate basis, for the firms in 

which your workers are employed/ 

which are members of your association. 

(a) Production (quantity) and, if 

known, an estimate of the percentage of 

total U.S. production of the Domestic

Like Product accounted for by your 

firm’s(s’) production; 

(b) The quantity and value of U.S. 

commercial shipments of the Domestic

Like Product produced in your U.S. 

plant(s); and 

(c) The quantity and value of U.S. 

internal consumption/company 

transfers of the Domestic Like Product 

produced in your U.S. plant(s). 

(8) If you are a U.S. importer or a 

trade/business association of U.S. 

importers of the Subject Merchandise 

from the Subject Country, provide the 

following information on your firm’s(s’)

operations on that product during 

calendar year 2005 (report quantity data 

in short tons and value data in U.S. 

dollars). If you are a trade/business 

association, provide the information, on 

an aggregate basis, for the firms which 

are members of your association. 

(a) The quantity and value (landed, 

duty-paid but not including 

antidumping duties) of U.S. imports 

and, if known, an estimate of the 

percentage of total U.S. imports of 

Subject Merchandise from the Subject

Country accounted for by your firm’s(s’)

imports;

(b) The quantity and value (f.o.b. U.S. 

port, including antidumping duties) of 

U.S. commercial shipments of Subject

Merchandise imported from the Subject

Country; and 

(c) The quantity and value (f.o.b. U.S. 

port, including antidumping duties) of 

U.S. internal consumption/company 

transfers of Subject Merchandise 

imported from the Subject Country.

(9) If you are a producer, an exporter, 

or a trade/business association of 

producers or exporters of the Subject

Merchandise in the Subject Country,

provide the following information on 

your firm’s(s’) operations on that 

product during calendar year 2005 

(report quantity data in short tons and 

value data in U.S. dollars, landed and 

duty-paid at the U.S. port but not 

including antidumping duties). If you 

are a trade/business association, provide 

the information, on an aggregate basis, 

for the firms which are members of your 

association.

(a) Production (quantity) and, if 

known, an estimate of the percentage of 

total production of Subject Merchandise 

in the Subject Country accounted for by 

your firm’s(s’) production; and 

(b) The quantity and value of your 

firm’s(s’) exports to the United States of 

Subject Merchandise and, if known, an 

estimate of the percentage of total 

exports to the United States of Subject

Merchandise from the Subject Country 

accounted for by your firm’s(s’) exports. 

(10) Identify significant changes, if 

any, in the supply and demand 

conditions or business cycle for the 

Domestic Like Product that have 

occurred in the United States or in the 

market for the Subject Merchandise in

the Subject Country since the Order

Date, and significant changes, if any, 

that are likely to occur within a 

reasonably foreseeable time. Supply 

conditions to consider include 

technology; production methods; 

development efforts; ability to increase 

production (including the shift of 

production facilities used for other 

products and the use, cost, or 

availability of major inputs into 

production); and factors related to the 

ability to shift supply among different 

national markets (including barriers to 

importation in foreign markets or 

changes in market demand abroad). 

Demand conditions to consider include 

end uses and applications; the existence 

and availability of substitute products; 

and the level of competition among the 

Domestic Like Product produced in the 

United States, Subject Merchandise 

produced in the Subject Country, and 

such merchandise from other countries. 

(11) (Optional) A statement of 

whether you agree with the above 

definitions of the Domestic Like Product 

and Domestic Industry; if you disagree 

with either or both of these definitions, 

please explain why and provide 

alternative definitions. 

Authority: This review is being conducted 

under authority of title VII of the Tariff Act 

of 1930; this notice is published pursuant to 

section 207.61 of the Commission’s rules. 

Issued: July 26, 2006. 

By order of the Commission. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. E6–12276 Filed 7–31–06; 8:45 am] 

BILLING CODE 7020–02–P

INTERNATIONAL TRADE 

COMMISSION

[Investigation No. 731–TA–891 (Review)] 

Foundry Coke From China 

AGENCY: United States International 

Trade Commission. 

ACTION: Institution of a five-year review 

concerning the antidumping duty order 

on foundry coke from China. 
67366 Federal Register / Vol. 71, No. 224 / Tuesday, November 21, 2006 / Notices 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation Nos. 701–TA–404–408 and 

731–TA–898–908 (Review)] 

Hot-Rolled Carbon Steel Flat Products 

From Argentina, China, India, 

Indonesia, Kazakhstan, Netherlands, 

Romania, South Africa, Taiwan, 

Thailand, and Ukraine 

AGENCY: United States International 

Trade Commission. 

ACTION: Notice of Commission 

determination to conduct full five-year 

reviews concerning the countervailing 

duty orders on hot-rolled carbon steel 

flat products from Argentina, India, 

Indonesia, South Africa, and Thailand 

and the antidumping duty orders on 

hot-rolled carbon steel flat products 

from Argentina, China, India, Indonesia, 

Kazakhstan, Netherlands, Romania, 

South Africa, Taiwan, Thailand, and 

Ukraine. 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation No. 731–TA–894 (Review)] 

Ammonium Nitrate From Ukraine 

AGENCY: United States International 

Trade Commission. 

ACTION: Notice of Commission 

determination to conduct a full five-year 

review concerning the antidumping 

duty order on ammonium nitrate from 

Ukraine. 

SUMMARY: The Commission hereby gives 

notice that it will proceed with a full 

review pursuant to section 751(c)(5) of 

the Tariff Act of 1930 (19 U.S.C. 

1675(c)(5)) to determine whether 

revocation of the antidumping duty 

order on ammonium nitrate from 

Ukraine would be likely to lead to 

continuation or recurrence of material 

injury within a reasonably foreseeable 

time. A schedule for the review will be 

established and announced at a later 

date. 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). 

EFFECTIVE DATE: November 6, 2006. 

FOR FURTHER INFORMATION CONTACT: 

Mary Messer (202–205–3193), 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 


sroberts on PROD1PC70 with NOTICES
Federal Register / Vol. 71, No. 224 / Tuesday, November 21, 2006 / Notices 67367 

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 

this review may be viewed on the 

Commission’s electronic docket (EDIS) 

at http://edis.usitc.gov. 

SUPPLEMENTARY INFORMATION: On 

November 6, 2006, the Commission 

determined that it should proceed to a 

full review in the subject five-year 

review pursuant to section 751(c)(5) of 

the Act. The Commission found that 

both the domestic and respondent 

interested party group responses to its 

notice of institution (71 FR 43516, 

August 1, 2006) were adequate. A record 

of the Commissioners’ votes, the 

Commission’s statement on adequacy, 

and any individual Commissioner’s 

statements will be available from the 

Office of the Secretary and at the 

Commission’s Web site. 

Authority: This review is being conducted 

under authority of title VII of the Tariff Act 

of 1930; this notice is published pursuant to 

section 207.62 of the Commission’s rules. 

By order of the Commission. 

Issued: November 15, 2006. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. E6–19654 Filed 11–20–06; 8:45 am] 

BILLING CODE 7020–02–P 

SUMMARY: The Department of Labor, as 

part of its continuing effort to reduce 

paperwork and respondent burden 

conducts a pre-clearance consultation 

program to provide the general public 

and Federal agencies with an 

opportunity to comment on proposed 

and/or continuing collections of 

information in accordance with the 

Paperwork Reduction Act of 1995 

(PRA95) [44 U.S.C. 3506(c)(2)(A)]. This 

program helps to ensure that requested 

data can be provided in the desired 

format, reporting burden (time and 

financial resources) is minimized, 

collection instruments are clearly 

understood, and the impact of collection 

requirements on respondents can be 

properly assessed. Currently, the 

Employment and Training 

Administration is soliciting comments 

concerning the proposed extension of 

the data collection for the Job Corps 

Application data collection forms (ETA 

652, ETA 655 and ETA 682) 1205–0025, 

expires February 28, 2007). A copy of 

the proposed information collection 

request (ICR) can be obtained by 

contacting the office listed below in the 

addressee section of this notice or at this 

Web site: http://www.doleta.gov/ 

OMBCN/OMBControlNumber.cfm. 

DATES: Written comments must be 

submitted to the office listed in the 

addressee section below on or before 

January 22, 2007 

ADDRESSEE: Cathy Keiter, Office of Job 

Corps, U.S. Department of Labor, Room 

N4507, 200 Constitution Ave., NW., 

Washington, DC 20210. Phone (202) 

693–3000 (This is not a toll-free 

number.), fax (202) 693–2767, or e-mail 

keiter.cathy@dol.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

The collection of this information is 

necessary to determine eligibility of 

applicants to the Job Corps program. 

The forms in this collection are: 

ETA 652, Job Corps Data Sheet, ETA 

655, Statement from Court or Other 

Agency, 

ETA 682, Child Care Certification. 

These forms are the initial forms 

completed for each applicant. They 

serve as the basic document for 

determining eligibility for Job Corps. 

They also provide demographic 


sroberts on PROD1PC70 with NOTICES
70508 Federal Register / Vol. 71, No. 233 / Tuesday, December 5, 2006 / Notices 

This notice is published in 

accordance with sections 751(c), 752(c), 

and 777(i)(1) of the Act. 

Dated: November 28, 2006. 

David M. Spooner, 

Assistant Secretary for Import 

Administration. 

[FR Doc. E6–20553 Filed 12–4–06; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

A–570–905 

Postponement of Preliminary 

Determination of Antidumping Duty 

Investigation: Certain Polyester Staple 

Fiber from the People’s Republic of 

China 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

EFFECTIVE DATE: December 5, 2006. 

FOR FURTHER INFORMATION CONTACT: 

Michael Holton or Paul Walker, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW., Washington, DC 20230; 

telephone: (202) 482–1324 or (202) 482–

0413, respectively. 

SUPPLEMENTARY INFORMATION: 

Postponement of Preliminary 

Determination 

On July 13, 2006, the Department of 

Commerce (‘‘Department’’) initiated the 

antidumping duty investigation of 

certain polyester staple fiber from the 

People’s Republic of China. See 

Initiation of Antidumping Duty 

Investigation: Certain Polyester Staple 

Fiber from the People’s Republic of 

China, 71 FR 41201 (July 20, 2006) 

(‘‘Initiation Notice’’). The Initiation 

Notice stated that the Department would 

make its preliminary determination for 

this antidumping duty investigation no 

later than 140 days after the date of 

issuance of the initiation (i.e., November 

30, 2006). 

We have determined that this 

investigation is extraordinarily 

complicated within the meaning of 

section 733(c)(1)(B)(i) of the Tariff Act 

of 1930, as amended (‘‘the Act’’). On 

November 16, 2006, the Department 

notified parties to the investigation that 

it intended to postpone the preliminary 

determination for reasons provided in 

this notice. See Memorandum to the 

file, from Michael Holton, 

Postponement of Preliminary 

Determination of Antidumping Duty 

Investigation: Certain Polyester Staple 

Fiber from the People’s Republic of 

China, dated November 16, 2006. 

Specifically, we find that the 

Department requires additional time to 

gather more information from all the 

mandatory respondents regarding 

market–economy inputs, affiliations, 

establishing the proper date of sale and 

the allocation methodology used to 

report certain factors of production. In 

addition, the Department also requires 

additional time to evaluate the separate–

rate applications. 

Therefore, it is the Department’s 

decision to postpone the current 

preliminary determination so that all of 

the issues currently under investigation 

at this time can be addressed in the 

most complete manner possible. For the 

reasons identified above, we are 

postponing the preliminary 

determination under section 

733(c)(1)(B) of the Act by fifteen days to 

December 15, 2006. The deadline for the 

final determination will continue to be 

75 days after the date of the preliminary 

determination. 

This notice is issued and published 

pursuant to sections 733(c)(2) of the Act 

and 19 CFR 351.205(f)(1). 

Dated: November 28, 2006. 

David M. Spooner, 

Assistant Secretary for Import 

Administration. 

[FR Doc. E6–20566 Filed 12–4–06; 8:45 am]

Billing Code: 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

A–823–810 

Solid Agricultural Grade Ammonium 

Nitrate from Ukraine; Final Results of 

the Expedited Sunset Review of the 

Antidumping Duty Order 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: On August 1, 2006, the 

Department of Commerce 

(‘‘Department’’) initiated a sunset 

review of the antidumping duty order 

on solid agricultural grade ammonium 

nitrate from Ukraine pursuant to section 

751(c) of the Tariff Act of 1930, as 

amended (‘‘the Act’’). On the basis of a 

notice of intent to participate and a 

complete substantive response filed on 

behalf of the domestic interested parties 

and an inadequate response from 

respondent interested parties, the 

Department conducted an expedited 

sunset review of the antidumping duty 

order pursuant to section 751(c)(3)(B) of 

the Act and 19 CFR 351.218(e)(1)(ii)(B). 

As a result of this sunset review, the 

Department finds that revocation of the 

order would likely lead to continuation 

or recurrence of dumping at the levels 

indicated in the ‘‘Final Results of 

Review’’ section of this notice. 

EFFECTIVE DATE: December 5, 2006. 

FOR FURTHER INFORMATION CONTACT: 

Audrey Twyman, Damian Felton, or 

Brandon Farlander, AD/CVD 

Operations, Office 1, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street & Constitution 

Avenue, NW, Washington, DC 20230; 

telephone: (202) 482–3534, (202) 482–

0133, and (202) 482–0182, respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On August 1, 2006, the Department 

initiated a sunset review of the 

antidumping duty order on solid 

agricultural grade ammonium nitrate 

(‘‘ammonium nitrate’’) from Ukraine 

pursuant to section 751(c) of the Act. 

See Initiation of Five-year (Sunset) 

Reviews, 71 FR 43443 (August 1, 2006) 

(‘‘Notice of Initiation’’). The Department 

received a notice of intent to participate 

from the following domestic parties: the 

Committee for Fair Ammonium Nitrate 

Trade (‘‘COFANT’’) and its individual 

producer members, El Dorado Chemical 

Company and Terra Industries, Inc. 

(also known as ‘‘domestic interested 

parties’’) within the deadline specified 

in 19 CFR 351.218(d)(1)(I). COFANT 

claims interested party status under 

section 771(9)(C) of the Act as domestic 

manufacturers of ammonium nitrate for 

its members. 

The Department received a complete 

substantive response collectively from 

the domestic interested parties within 

the 30-day deadline specified in 19 CFR 

351.218(d)(3)(i). The Department also 

received a substantive response from 

respondent interested party, Open Joint 

Stock Company ‘‘Azot,’’ within the 

deadline specified in 19 CFR 

351.218(d)(3)(i). On September 7, 2006, 

the domestic interested parties 

submitted a rebuttal to Azot’s 

substantive response. On September 20, 

2006, the Department determined that 

the respondent interested party did not 

account for more than 50 percent of 

exports by volume of the subject 

merchandise, because it reported that it 

had no exports during the 2001–2005 

sunset review period. Therefore, the 

Department concluded that the 

respondent interested party did not 

submit an adequate response to the 

Department’s Notice of Initiation. See 

Memorandum to Susan H. Kuhbach 

entitled, ‘‘Adequacy Determination in 


ycherry on PROD1PC64 with NOTICES
Federal Register / Vol. 71, No. 233 / Tuesday, December 5, 2006 / Notices 70509 

Antidumping Duty Sunset Review of 

Solid Agricultural Grade Ammonium 

Nitrate from Ukraine,’’ (September 20, 

2006). On October 10, 2006, the 

domestic interested parties submitted 

comments supporting the Department’s 

adequacy determination. 

Pursuant to 19 CFR 

351.218(e)(1)(ii)(C)(2), the Department 

has conducted an expedited sunset 

review of this antidumping duty order. 

Scope of the Order 

The merchandise covered by this 

order are solid, fertilizer grade 

ammonium nitrate (‘‘ammonium 

nitrate’’ or ‘‘subject merchandise’’) 

products, whether prilled, granular or in 

other solid form, with or without 

additives or coating, and with a bulk 

density equal to or greater than 53 

pounds per cubic foot. Specifically 

excluded from this scope is solid 

ammonium nitrate with a bulk density 

less than 53 pounds per cubic foot 

(commonly referred to as industrial or 

explosive grade ammonium nitrate). The 

merchandise subject to this 

investigation is classified in the 

Harmonized Tariff Schedule of the 

United States (‘‘HTSUS’’) at subheading 

3102.30.00.00. HTSUS subheadings are 

provided for convenience and customs 

purposes. The written description of the 

scope of the order is dispositive. 

Analysis of Comments Received 

All issues raised in these reviews are 

addressed in the ‘‘Issues and Decision 

Memorandum for the Expedited Sunset 

Review of the Antidumping Duty Order 

on Solid Agricultural Grade Ammonium 

Nitrate from Ukraine; Final Results’’

(‘‘Decision Memo’’) from Stephen J. 

Claeys, Deputy Assistant Secretary for 

Import Administration, to David M. 

Spooner, Assistant Secretary for Import 

Administration (November 29, 2006), 

which is hereby adopted by this notice. 

The issues discussed in the Decision 

Memo include the likelihood of 

continuation or recurrence of dumping 

and the magnitude of the margins likely 

to prevail if the order were to be 

revoked. Parties can find a complete 

discussion of all issues raised in these 

reviews and the corresponding 

recommendations in this public 

memorandum which is on file in room 

B–099 of the main Department building. 

In addition, a complete version of the 

Decision Memo 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. 

Final Results of Review 

The Department determines that 

revocation of the antidumping duty 

order on ammonium nitrate from 

Ukraine would be likely to lead to 

continuation or recurrence of dumping 

at the rates listed below: 

Producers/Exporters Margin (percent) 

J.S.C. ‘‘Concern’’ Stirol 156.29 

All Others rate1 ............. 156.29 

1As of February 1, 2006, Ukraine graduated 

to market economy status (see Final Results 

of Inquiry Into Ukraine’s Status as a Non-Market Economy Country, February 24, 2006 (71 

FR 9520)). As a result, the Ukraine-wide rate 

is now the All Others rate. See Certain Cut-toLength Carbon Steel Plate from Romania: Notice of Final Results and Final Partial Rescission of Antidumping Duty Administrative Review, 71 FR 12651 (March 15, 2005) and accompanying Issues and Decision Memorandum at Comment 2. 

Notification regarding Administrative 

Protective Order 

This notice also serves as the only 

reminder to parties subject to 

administrative protective order (‘‘APO’’) 

of their responsibility concerning the 

return or destruction of proprietary 

information disclosed under APO in 

accordance with 19 CFR 351.305. 

Timely notification of the return or 

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. 

We are issuing and publishing the 

results and notice in accordance with 

sections 751(c), 752(c), and 777(i)(1) of 

the Act. 

Dated: November 29, 2006. 

Joseph A. Spetrini, 

Acting Assistant Secretary for Import 

Administration. 

[FR Doc. E6–20551 Filed 12–4–06; 8:45 am] 

Billing Code: 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

A–822–804, A–570–860, A–560–811, A–841–

804, A–455–803, A–580–844 

Steel Concrete Reinforcing Bars from 

Moldova, the People’s Republic of 

China, South Korea, Indonesia, Poland, 

and Belarus; Final Results of the 

Expedited Sunset Reviews of the 

Antidumping Duty Orders 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: On August 1, 2006, the 

Department of Commerce (‘‘the 

Department’’) initiated sunset reviews of 

the antidumping duty orders on steel 

concrete reinforcing bars from Moldova, 

the People’s Republic of China, South 

Korea, Indonesia, Poland, and Belarus 

pursuant to section 751(c) of the Tariff 

Act of 1930, as amended (‘‘the Act’’). 

The Department has conducted 

expedited (120-day) sunset reviews for 

these orders pursuant to 19 CFR 

351.218(e)(1)(ii)(C)(2). As a result of 

these sunset reviews, the Department 

finds that revocation of the antidumping 

duty orders would be likely to lead to 

continuation or recurrence of dumping. 

EFFECTIVE DATE: December 5, 2006. 

FOR FURTHER INFORMATION CONTACT: 

Audrey Twyman, Damian Felton, or 

Brandon Farlander, AD/CVD 

Operations, Office 1, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street & Constitution 

Avenue, NW, Washington, DC 20230; 

telephone: (202) 482–3534, (202) 482–

0133, and (202) 482–4136, respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On August 1, 2006, the Department 

published the notice of initiation of the 

sunset reviews of the antidumping duty 

orders on steel concrete reinforcing bars 

(‘‘rebar’’) from Moldova, the People’s 

Republic of China (‘‘PRC’’), South 

Korea, Indonesia, Poland, and Belarus 

pursuant to section 751(c) of the Act. 

See Initiation of Five-year (‘‘Sunset’’) 

Reviews, 71 FR 43443 (August 1, 2006) 

(‘‘Notice of Initiation’’). 

On August 11, 2006, the Department 

received a notice of intent to participate 

from the following domestic parties: the 

Rebar Trade Action Coalition and its 

individual producer members, Nucor 

Corporation, CMC Steel Group, and 

Gerdau Ameristeel, as well as domestic 

producers TAMCO Steel and Schnitzer 

Steel Industries, Inc. (‘‘Schnitzer’’) 

(collectively ‘‘domestic interested 

parties’’), within the deadline specified 

in 19 CFR 351.218(d)(1)(i). The 

companies claimed interested party 

status under section 771(9)(C) of the 

Act, as manufacturers of a domestic–like 

product in the United States. 

On August 31, 2006, the Department 

received a complete substantive 

response to the notice of initiation from 

the domestic interested parties within 

the 30-day deadline specified in 19 CFR 

351.218(d)(3)(i). In this response, 

Cascade Steel Rolling Mills, Inc. 

(‘‘Cascade’’) was substituted for 

Schnitzer as a domestic interested party. 

Cascade is a wholly owned subsidiary of 

Schnitzer. Also, Steel Dynamics, Inc. 

(‘‘SDI’’) was added as a domestic 


ycherry on PROD1PC64 with NOTICES
Federal Register / Vol. 71, No. 241 / Friday, December 15, 2006 / Notices 75579

Description of Alternatives, Special 

Designations section. 

After reviewing and considering all 

public comments received during this 

comment period, a Proposed Resource 

Management Plan and Final 

Environmental Impact Statement will be 

prepared by the BLM in accordance 

with planning regulations at 43 CFR 

1610 and NEPA at 40 CFR 1502. 

Elaine Y. Zielinski, 

Arizona State Director. 

[FR Doc. E6–21311 Filed 12–14–06; 8:45 am] 

BILLING CODE 4310–32–P

DEPARTMENT OF THE INTERIOR 

Minerals Management Service 

Notice of Availability of Draft 

Programmatic Environmental 

Assessment (EA) 

AGENCY: Minerals Management Service 

(MMS), Department of the Interior. 

ACTION: Notice of availability of the draft 

Programmatic EA for the Coastal Impact 

Assistance Program. 

INTERNATIONAL TRADE 

COMMISSION

[Investigation No. 731–TA–894 (Review)] 

Certain Ammonium Nitrate From 

Ukraine

AGENCY: United States International 

Trade Commission. 

ACTION: Scheduling of a full five-year 

review concerning the antidumping 

duty order on certain ammonium nitrate 

from Ukraine. 

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 

mstockstill on PROD1PC61 with NOTICES

75580 Federal Register / Vol. 71, No. 241 / Friday, December 15, 2006 / Notices 

revocation of the antidumping duty 

order on certain ammonium nitrate from 

Ukraine 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).

DATES: Effective Date: December 8, 2006. 

FOR FURTHER INFORMATION CONTACT:

Cynthia Trainor (202–205–3354), 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 

this review may be viewed on the 

Commission’s electronic docket (EDIS) 

at http://edis.usitc.gov.

SUPPLEMENTARY INFORMATION:

Background.—On November 6, 2006, 

the Commission determined that 

responses to its notice of institution of 

the subject five-year review were such 

that a full review pursuant to section 

751(c)(5) of the Act should proceed (71 

FR 67366, November 21, 2006). A record 

of the Commissioners’ votes, the 

Commission’s statement on adequacy, 

and any individual Commissioner’s

statements are available from the Office 

of the Secretary and at the 

Commission’s Web site. 

Participation in the review 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 this review 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, by 45 days after 

publication of this notice. A party that 

filed a notice of appearance following 

publication of the Commission’s notice 

of institution of the review need not file 

an additional notice of appearance. The 

Secretary will maintain a public service 

list containing the names and addresses 

of all persons, or their representatives, 

who are parties to the review. 

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 this review available to 

authorized applicants under the APO 

issued in the review, provided that the 

application is made by 45 days after 

publication of this notice. Authorized 

applicants must represent interested 

parties, as defined by 19 U.S.C. 1677(9), 

who are parties to the review. A party 

granted access to BPI following 

publication of the Commission’s notice 

of institution of the review 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 review will be placed in 

the nonpublic record on March 29, 

2007, and a public version will be 

issued thereafter, pursuant to section 

207.64 of the Commission’s rules. 

Hearing.—The Commission will hold 

a hearing in connection with the review 

beginning at 9:30 a.m. on April 17, 

2007, 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 April 10, 2007. 

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 April 12, 

2007, 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), 207.24, 

and 207.66 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 to 

the review may submit a prehearing 

brief to the Commission. Prehearing 

briefs must conform with the provisions 

of section 207.65 of the Commission’s

rules; the deadline for filing is April 9, 

2007. 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 207.67 of the Commission’s

rules. The deadline for filing 

posthearing briefs is April 27, 2007; 

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 

review may submit a written statement 

of information pertinent to the subject of 

the review on or before April 27, 2007. 

On May 23, 2007, 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 May 29, 2007, 

but such final comments must not 

contain new factual information and 

must otherwise comply with section 

207.68 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 

review must be served on all other 

parties to the review (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: This review is being conducted 

under authority of title VII of the Tariff Act 

of 1930; this notice is published pursuant to 

section 207.62 of the Commission’s rules. 

By order of the Commission. 

Issued: December 8, 2006. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. E6–21420 Filed 12–14–06; 8:45 am] 

BILLING CODE 7020–02–P

mstockstill on PROD1PC61 with NOTICES

EXPLANATION OF COMMISSION DETERMINATION ON ADEQUACY

in

Ammonium Nitrate From Ukraine, Inv. No. 731-TA-894 (Review)

On November 6, 2006, the Commission determined that it should proceed to a full review in the

subject five-year review pursuant to section 751(c)(3)(B) of the Tariff Act of 1930, as amended,

19 U.S.C. § 1675(c)(3)(B). 

The Commission determined that the domestic producer responses, filed by the Committee for

Fair Ammonium Nitrate Trade on behalf of two domestic producers of ammonium nitrate, El Dorado

Chemical Co. (El Dorado) and Terra Industries, Inc. (Terra), were individually adequate. Because El

Dorado and Terra account for all domestic production of ammonium nitrate, the Commission further

determined that the domestic interested party group response was adequate.

The Commission also received responses to its notice of institution from Ukrainian

producers/exporters CJSC Severodonetsk Azot Assoc. (Severodonetsk) and OJSC Azot (Azot), as well as

from the Trade and Economic Mission of Ukraine, Embassy of Ukraine to the United States of America

(Ukraine Embassy). The Commission determined that the responses were individually adequate and,

further, that they constituted an adequate respondent interested party group response because

Severodonetsk and Azot account for a significant share of the production of ammonium nitrate in

Ukraine, and in light of the response of the Ukraine Embassy. Accordingly, the Commission determined

to proceed to a full review in Ammonium Nitrate From Ukraine.

A record of the Commissioners’ votes is available from the Office of the Secretary and the

Commission’s web site (http://www.usitc.gov).
B-1

APPENDIX B

CALENDAR OF THE PUBLIC HEARING

B-3

CALENDAR OF PUBLIC HEARING

Those listed below appeared as witnesses at the United States International Trade Commission’s

hearing:

Subject: Certain Ammonium Nitrate from Ukraine

Inv. No.: 731-TA-894 (Review)

Date and Time: April 17, 2007 - 9:30 a.m.

Sessions were held in connection with this investigation in the Main Hearing Room, 500 E Street

(room 101), SW, Washington, DC.

OPENING REMARKS:

In Support of Continuation of the Antidumping Duty Order (Valerie A. Slater, 

Akin Gump Strauss Hauer & Feld, LLP)

In Support of Continuation of the

 Antidumping Duty Order:

Akin Gump Strauss Hauer & Feld, LLP

Washington, DC

on behalf of

The Committee for Fair Ammonium Nitrate Trade (“COFANT”)

Matt Green, Director, Agricultural Sales, Terra Industries, Inc.

Gary Elliott, Market and Distribution Consultant to Terra Industries, Inc.

Phil Gough, Senior Vice President of Marketing, El Dorado Chemical Company

Paul Rydlund, Vice President, El Dorado Chemical Company
B-4

In Support of Continuation of the

 Antidumping Duty Order (continued):

Daniel W. Klett, Principal, Capital Trade, Inc.

Valerie A. Slater )

Anne K. Cusick ) – OF COUNSEL

Tatman Ryder Savio )

CLOSING REMARKS:

In Support of Continuation of the Antidumping Duty Order (Valerie A. Slater,

Akin Gump Strauss Hauer & Feld, LLP)
C-1

APPENDIX C

SUMMARY DATA

Table C-1

HDAN: Summary data concerning the U.S. market, 2001-06

(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

Item 2001 2002 2003 2004 2005 2006 2001-06 2001-02 2002-03 2003-04 2004-05 2005-06

U.S. consumption quantity:

 Amount . . . . . . . . . . . . . . . . . . . 1,888,260 2,034,755 2,162,963 1,890,360 1,504,608 *** *** 7.8 6.3 -12.6 -20.4 ***

 Producers' share (1) . . . . . . . . . 73.8 76.2 64.8 68.5 71.1 *** *** 2.4 -11.4 3.7 2.6 ***

 Importers' share (1):

 Ukraine . . . . . . . . . . . . . . . . . . 0.0 0.0 0.0 0.0 0.0 *** *** 0.0 0.0 0.0 0.0 ***

 All other sources . . . . . . . . . . . 26.2 23.8 35.2 31.5 28.9 *** *** -2.4 11.4 -3.7 -2.6 ***

 Total imports . . . . . . . . . . . . . 26.2 23.8 35.2 31.5 28.9 *** *** -2.4 11.4 -3.7 -2.6 ***

U.S. consumption value:

 Amount . . . . . . . . . . . . . . . . . . . 263,846 230,117 326,164 326,558 314,899 *** *** -12.8 41.7 0.1 -3.6 ***

 Producers' share (1) . . . . . . . . . 73.2 76.5 65.8 68.8 69.9 *** *** 3.3 -10.7 2.9 1.1 ***

 Importers' share (1):

 Ukraine . . . . . . . . . . . . . . . . . . 0.0 0.0 0.0 0.0 0.0 *** *** 0.0 0.0 0.0 0.0 ***

 All other sources . . . . . . . . . . . 26.8 23.5 34.2 31.2 30.1 *** *** -3.3 10.7 -2.9 -1.1 ***

 Total imports . . . . . . . . . . . . . 26.8 23.5 34.2 31.2 30.1 *** *** -3.3 10.7 -2.9 -1.1 ***

U.S. shipments of imports from:

 Ukraine:

 Quantity . . . . . . . . . . . . . . . . . . 000000 (2) (2) (2) (2) (2) (2)

 Value . . . . . . . . . . . . . . . . . . . . 0 0 0 0 0 0 (2) (2) (2) (2) (2) (2)

 Unit value . . . . . . . . . . . . . . . . (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2)

 Ending inventory quantity . . . . 000000 (2) (2) (2) (2) (2) (2)

 All other sources:

 Quantity . . . . . . . . . . . . . . . . . . 494,848 484,658 760,971 595,790 434,571 667,781 34.9 -2.1 57.0 -21.7 -27.1 53.7

 Value . . . . . . . . . . . . . . . . . . . . 70,619 54,008 111,453 102,044 94,918 157,481 123.0 -23.5 106.4 -8.4 -7.0 65.9

 Unit value . . . . . . . . . . . . . . . . $142.71 $111.44 $146.46 $171.28 $218.42 $235.83 65.3 -21.9 31.4 16.9 27.5 8.0

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** *** *** *** ***

 All sources:

 Quantity . . . . . . . . . . . . . . . . . . 494,848 484,658 760,971 595,790 434,571 667,781 34.9 -2.1 57.0 -21.7 -27.1 53.7

 Value . . . . . . . . . . . . . . . . . . . . 70,619 54,008 111,453 102,044 94,918 157,481 123.0 -23.5 106.4 -8.4 -7.0 65.9

 Unit value . . . . . . . . . . . . . . . . $142.71 $111.44 $146.46 $171.28 $218.42 $235.83 65.3 -21.9 31.4 16.9 27.5 8.0

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** *** *** *** ***

U.S. producers':

 Average capacity quantity . . . . . 2,047,578 2,039,125 2,074,340 2,050,042 1,747,368 *** *** -0.4 1.7 -1.2 -14.8 ***

 Production quantity . . . . . . . . . . 1,432,727 1,581,114 1,368,676 1,282,263 1,066,799 *** *** 10.4 -13.4 -6.3 -16.8 ***

 Capacity utilization (1) . . . . . . . . 70.0 77.5 66.0 62.5 61.1 *** *** 7.6 -11.6 -3.4 -1.5 ***

 U.S. shipments:

 Quantity . . . . . . . . . . . . . . . . . . 1,393,412 1,550,097 1,401,992 1,294,570 1,070,037 *** *** 11.2 -9.6 -7.7 -17.3 ***

 Value . . . . . . . . . . . . . . . . . . . . 193,227 176,109 214,711 224,514 219,981 *** *** -8.9 21.9 4.6 -2.0 ***

 Unit value . . . . . . . . . . . . . . . . $138.67 $113.61 $153.15 $173.43 $205.58 *** *** -18.1 34.8 13.2 18.5 ***

 Export shipments:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . . 105,499 104,719 65,491 42,963 *** *** *** -0.7 -37.5 -34.4 *** ***

 Inventories/total shipments (1) . *** *** *** *** *** *** *** *** *** *** *** ***

 Production workers . . . . . . . . . . 293 290 287 277 179 *** *** -1.0 -1.0 -3.5 -35.4 ***

 Hours worked (1,000s) . . . . . . . 658 664 636 604 378 *** *** 0.9 -4.2 -5.0 -37.4 ***

 Wages paid ($1,000s) . . . . . . . . 13,898 14,505 13,914 13,870 8,707 *** *** 4.4 -4.1 -0.3 -37.2 ***

 Hourly wages . . . . . . . . . . . . . . . $21.12 $21.84 $21.88 $22.96 $23.03 *** *** 3.4 0.1 5.0 0.3 ***

 Productivity (tons/1,000 hours) . *** *** *** *** *** *** *** *** *** *** *** ***

 Unit labor costs . . . . . . . . . . . . . *** *** *** *** *** *** *** *** *** *** *** ***

 Net sales:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** *** *** *** ***

 Cost of goods sold (COGS) . . . . *** *** *** *** *** *** *** *** *** *** *** ***

 Gross profit or (loss) . . . . . . . . . *** *** *** *** *** *** *** *** *** *** *** ***

 SG&A expenses . . . . . . . . . . . . *** *** *** *** *** *** *** *** *** *** *** ***

 Operating income or (loss) . . . . *** *** *** *** *** *** *** *** *** *** *** ***

 Capital expenditures . . . . . . . . . 3,001 4,253 2,875 8,729 *** *** *** 41.7 -32.4 203.6 *** ***

 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.

 (2) Not applicable.

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-3

D-1

APPENDIX D

COMMENTS ON THE SIGNIFICANCE OF THE EXISTING 

ANTIDUMPING DUTY ORDER AND THE 

LIKELY EFFECTS OF REVOCATION

D-3

U.S. PRODUCERS’ COMMENTS

The Commission requested U.S. producers to describe any anticipated changes in their

operations or organization relating to the production of HDAN in the future if the antidumping

duty order were to be revoked. (Question II-4)

The following firms responded “No”: ***. 

***

“***.”

***

“***.”

***

“***.”

***

“***.”

The Commission requested U.S. producers to describe the significance of the antidumping

duty order on their production capacity, production, U.S. shipments, inventories, purchases,

employment, revenues, costs, profits, cash flow, capital expenditures, research and development

expenditures, and asset values. (Question II-14) 

***

“***.”

***

“***.”

***

“***
D-4

***.”

***

“***.”

The Commission asked U.S. producers whether they anticipated changes in their

production capacity, production, U.S. shipments, inventories, purchases, employment, revenues,

costs, profits, cash flow, capital expenditures, research and development expenditures, or asset

values relating to the production of HDAN in the future if the antidumping duty order were to be

revoked. (Question II-15)

The following firms responded “No”: ***. 

***

“***.”

***

“***.”

***

“***.”

The Commission asked U.S. producers to indicate the effects (current and future), if any, of

hurricanes Katrina and/or Rita on their firm’s production and shipments of HDAN. (Question II-17)

***

“***.”

***

“***.”

***

“***.”

***

“***.”
D-5

U.S. IMPORTERS’ COMMENTS

The Commission asked U.S. importers if they would anticipate any changes in their

operations or organization relating to the importation of HDAN the future if the antidumping duty

order were to be revoked. (Question II-4)

The following firms responded “No:” ***. 

The Commission requested U.S. importers to describe the significance of the existing

antidumping duty order covering imports of HDAN in terms of its effect on their firms’ imports,

U.S. shipments of imports, and inventories. (Question II-8)

***

“The current anti-dumping order has had no effect on ***’s imports of AN.”

***

“No effect.”

***

“N/A.”

***

“We can import sufficient ammonium nitrate to meet the market demand without Ukraine ammonium

nitrate.”

The Commission requested U.S. importers if they would anticipate any changes in their

imports, U.S. shipments of imports, or inventories of uranium in the future if the antidumping duty

order were to be revoked. (Question II-9)

The following firms responded “No:” ***.

***

“***.”

U.S. PURCHASERS’ COMMENTS

The Commission’s questionnaires in this review requested comments from U.S. purchasers

(question III-40) regarding the likely effects of revocation of the antidumping duty order on

imports of HDAN from Ukraine on (1) the future activities of their firms and (2) the U.S. market as

a whole. The following comments were received:
D-6

***

(1) Activities of firm.--“If HDAN prices were competitive with urea the use of HDAN would

increase back up to 20,000 TNs from present 10,000 TN. At present levels we will not use any

HDAN in 2 years.”

(2) Entire U.S. market –“If HDAN prices were competitive with urea the the HDAN volumes

would go back up to previous levels.”

***

(1) Activities of firm.--“No change.”

(2) Entire U.S. market –“Greater supply implies more competitive price, benefit to grower,

food costs.”

***

(1) Activities of firm.--“None.”

(2) Entire U.S. market –“None.”

***

(1) Activities of firm.--“Currently 21-0-21 from Russia is being offered to only a few customers 

and is priced significantly below HDAN prices. If antidumping tariffs are eliminated HDAN

would be more competitive.”

(2) Entire U.S. market –“No answer.”

***

(1) Activities of firm.--“Because of the regulations we are trying to go to other products than

nitrate anyway. This continued duty will only make it easier for us.”

(2) Entire U.S. market –“***.”

***

(1) Activities of firm.--“Due to higher production cost, more closures of domestic producers are

forcing us to buy imported product.”

(2) Entire U.S. market –“Same as above.”

***

(1) Activities of firm.--“No impact.”

(2) Entire U.S. market –“N/A-unknown.”
D-7

***

(1) Activities of firm.--“Ukrainian quality is poor-so there little effect for our firm as we will

not import this product.”

(2) Entire U.S. market –No answer.

***

(1) Activities of firm.--“See ***.”

(2) Entire U.S. market –“Same as above.”

***

(1) Activities of firm.--“See ***.”

(2) Entire U.S. market –“Same as above.”

***

(1) Activities of firm.--“This would give us additional supply but we have had adequate supply

due to our ability to purchase vessels.”

(2) Entire U.S. market –“There are limited storage locations for AN, less hazmat certified

trucks, higher barge freight due to handling restrictions, and demand will be the limiting factors

on how much imports will come into the U.S.”

FOREIGN PRODUCERS’/EXPORTERS’ COMMENTS

The Commission requested foreign producers to indicate whether they anticipated any

changes in their operations or organization relating to the production of ammonium nitrate in the

future if the antidumping duty order were to be revoked, and if yes, to describe those changes. 

(Question II-3)

The following firms responded “No”: ***.

The Commission requested foreign producers to describe the significance of the existing

antidumping duty order covering imports of HDAN in terms of its effect on their firms’ production

capacity, production, home market shipments, exports to the United States and other markets, and

inventories. (Question II-14)

***

“***.”

***
D-8

“***.”

***

“***.”

***

“***.”

The Commission asked foreign producers if they would anticipate any changes in their

production capacity, production, home market shipments, exports to the United States and other

markets, or inventories in the future if the antidumping duty order were to be revoked. (Question

II-15)

***

“***.”

***

“***.”

***

“***.”

***

“***.”
E-1

APPENDIX E

CENSUS DATA

E-3

Ammonium nitrate: U.S. imports, by leading sources, 2001-06

Country 2001 2002 2003 2004 2005 2006

Quantity (short tons)

Canada 561,693 512,823 507,457 561,323 593,746 594,264

Netherlands 111,833 205,895 230,372 190,322 29,209 91,210

Romania 42,351 48,498 169,929 182,604 145,090 212,003

Russia 96,171 138,664 138,149 126,464 77,143 27,368

Bulgaria 19,854 0 133,019 66,535 71,188 73,333

Spain 105,691 99,218 65,166 244 0 18,038

Georgia 0 0 0 0 33,488 169,201

Lithuania 49,653 24,3000000

Norway 0 34,451 32,668 0 0 0

Ukraine 0 0 0 33,306 22,768 0

 Subtotal 987,246 1,063,850 1,276,760 1,160,797 972,632 1,185,417

All other 62,697 26,895 50,406 3,187 3,759 38,439

 Total 1,049,943 1,090,745 1,327,166 1,163,984 976,391 1,223,856

Landed duty-paid value ($1,000)

Canada 66,465 62,341 70,326 94,415 113,541 125,514

Netherlands 14,537 18,221 25,736 29,563 5,118 18,065

Romania 4,983 4,224 20,704 29,040 27,518 44,360

Russia 11,859 12,969 15,687 21,039 15,502 6,933

Bulgaria 2,215 0 18,463 10,091 13,368 14,931

Spain 10,801 8,979 7,226 71 0 3,723

Georgia 0 0 0 0 8,355 40,460

Lithuania 6,542 2,2490000

Norway 0 3,350 2,767 0 0 0

Ukraine 0 0 0 6,057 5,035 0

 Subtotal 117,403 112,331 160,909 190,277 188,437 253,986

All other 9,198 3,055 5,365 901 1,019 8,799

 Total 126,601 115,386 166,273 191,178 189,456 262,785

Table continued on following page.
E-4

Ammonium nitrate: U.S. imports, by leading sources, 2001-06

Country 2001 2002 2003 2004 2005 2006

Unit value (dollars per short ton)

Canada $118.33 $121.56 $138.58 $168.20 $191.23 $211.21

Netherlands 129.99 88.50 111.72 155.33 175.21 198.06

Romania 117.66 87.09 121.84 159.03 189.66 209.24

Russia 123.31 93.52 113.55 166.37 200.95 253.34

Bulgaria 111.58 (1.00) 138.80 151.67 187.79 203.61

Spain 102.19 90.50 110.89 292.08 (1

) 206.39

Georgia (1

) (1) (1) (1) 249.48 239.12

Lithuania 131.76 92.53 (1

) (1) (1) (1)

Norway (1

) 97.23 84.69 (1) (1) (1)

Ukraine (1

) (1) (1) 181.85 221.16 (1.00)

 Average 118.92 105.59 126.03 163.92 193.74 214.26

All other 146.70 113.59 106.43 282.61 271.17 228.91

 Average 120.58 105.79 125.28 164.24 194.04 214.72

 1 Not applicable.

Note.–Sources ranked according to total import quantity during 2001-06.

Source: Official statistics of the Department of Commerce (HTS subheading 3102.30.00).