Sodium Hexametaphosphate From China

Investigation No. 731-TA-1110 (Preliminary)

Publication 3912 April 2007
U.S. International Trade Commission

Robert A. Rogowsky

Director of Operations

COMMISSIONERS

Address all communications to

Secretary to the Commission

United States International Trade Commission

Washington, DC 20436

Shara L. Aranoff, Vice Chairman

Daniel R. Pearson, Chairman

Staff assigned

Debra Baker, Investigator

Philip Stone, Industry Analyst

Craig Thomsen, Economist

John Ascienzo, Accountant/Auditor

Robin Turner, Attorney

George L. Deyman, Supervisory Investigator

Deanna Tanner Okun

Charlotte R. Lane

Irving A. Williamson

Dean A. Pinkert
U.S. International Trade Commission

Washington, DC 20436

April 2007

www.usitc.gov

Publication 3912

Sodium Hexametaphosphate From China

Investigation No. 731-TA-1110 (Preliminary)
 
i

CONTENTS

Page

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

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

Separate and additional views of Chairman Daniel R. Pearson and Commissioner Deanna Tanner

Okun concerning Bratsk Aluminum v. United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

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

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

Organization of the report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

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

Previous and related investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2

Nature and extent of alleged sales at LTFV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

The subject product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

U.S. tariff treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

The domestic like product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

Description and uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5

Production process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-8

Data on product types . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9

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

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

Lead times . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

Internet sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

Market segments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

Supply and demand considerations ................................................ II-2

U.S. supply ............................................................... II-2

U.S. demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-2

Cost share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-3

Qualification/certification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-3

Substitute products ......................................................... II-4

Substitutability issues .......................................................... II-4

Interchangeability .......................................................... II-4

Non-price differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-5

Elasticity estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-5

U.S. supply elasticity ........................................................ II-5

U.S. demand elasticity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-6

Substitution elasticity ....................................................... II-6

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

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

U.S. producers’ imports and purchases ............................................. III-2

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

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

U.S. producers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-4

U.S. producers’ employment, wages, and productivity ................................ III-4

Continued.
ii

CONTENTS–Continued

Page

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

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

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

Calculation of U.S. imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1

U.S. import trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-5

The question of negligible imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-6

Apparent U.S. consumption and U.S. market shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-7

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

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

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

Tariffs and transportation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

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

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

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

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

Price trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-3

Price comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-6

Lost sales and lost revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-6

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

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

Operations on SHMP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

Capital expenditures and research and development expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-3

Assets and return on investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-3

Capital and investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-3

Part VII: Threat considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-1

The industry in China .......................................................... VII-1

Nonsubject manufacturers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-2

Importers’ U.S. inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-2

Anticipated shipments of SHMP from China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-3

Appendices

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

B. Conference witnesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

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

D. Information on prices of SHMP from nonsubject countries . . . . . . . . . . . . . . . . . . . . . . . . . . . D-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)).

1

UNITED STATES INTERNATIONAL TRADE COMMISSION

Investigation No. 731-TA-1110 (Preliminary)

SODIUM HEXAMETAPHOSPHATE (SHMP) FROM CHINA

DETERMINATION

On the basis of the record1

 developed in the subject investigation, the United States International

Trade Commission (Commission) determines, pursuant to section 733(a) of the Tariff Act of 1930 (19

U.S.C. § 1673b(a)) (the Act), that there is a reasonable indication that an industry in the United States is

materially injured by reason of imports from China of sodium hexametaphosphate, provided for in

subheadings 2835.39.50 and 3823.90.39 of the Harmonized Tariff Schedule of the United States, that are

alleged to be sold in the United States at less than fair value (LTFV).

COMMENCEMENT OF FINAL PHASE INVESTIGATION

Pursuant to section 207.18 of the Commission’s rules, the Commission also gives notice of the

commencement of the final phase of its investigation. The Commission will issue a final phase notice of

scheduling, which will be published in the Federal Register as provided in section 207.21 of the

Commission’s rules, upon notice from the Department of Commerce (Commerce) of an affirmative

preliminary determination in the investigation under section 733(b) of the Act, or, if the preliminary

determination is negative, upon notice of an affirmative final determination in that investigation under

section 735(a) of the Act. Parties that filed entries of appearance in the preliminary phase of the

investigation need not enter a separate appearance for the final phase of the investigation. Industrial

users, and, if the merchandise under investigation is sold at the retail level, representative consumer

organizations have the right to appear as parties in Commission antidumping and countervailing duty

investigations. The Secretary will prepare a public service list containing the names and addresses of all

persons, or their representatives, who are parties to the investigation.

BACKGROUND

On February 8, 2007, a petition was filed with the Commission and Commerce by ICL

Performance Products, LP, St. Louis, MO, and Innophos, Inc., Cranbury, NJ, alleging that an industry in

the United States is materially injured or threatened with material injury by reason of LTFV imports of

sodium hexametaphosphate from China. Accordingly, effective February 8, 2007, the Commission

instituted antidumping duty investigation No. 731-TA-1110 (Preliminary).

Notice of the institution of the Commission’s investigation and of a public conference to be held

in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S.

International Trade Commission, Washington, DC, and by publishing the notice in the Federal Register

of 72 FR 7458, February 15, 2007. The conference was held in Washington, DC, on March 1, 2007, and

all persons who requested the opportunity were permitted to appear in person or by counsel.

1

 19 U.S.C. § 1673b(a); see also, e.g., Co-Steel Raritan, Inc. v. United States, 357 F.3d 1294 (Fed. Cir. 2004);

American Lamb Co. v. United States, 785 F.2d 994, 1001-1004 (Fed. Cir. 1986); Aristech Chemical Corp. v. United

States, 20 CIT 353, 354 (1996). No party argued that the establishment of an industry is materially retarded by

reason of the allegedly unfairly traded imports.

2

 American Lamb, 785 F.2d at 1001 (Fed. Cir. 1986); see also Texas Crushed Stone Co. v. United States, 35

F.3d 1535, 1543 (Fed. Cir. 1994). 

3

 These producers account for *** U.S. production of SHMP. Confidential Staff Report (“CR”) and Public

Staff Report (“PR”) at III-1 and Table III-1. A third producer, Nalco Co. (“Nalco”) operated a plant until October

2003 and ***. CR/PR at III-1 and n.3. The Commission also received questionnaire responses from importers

accounting for almost all of SHMP imports from China in 2006. CR/PR at I-3 and Table IV-1.

4

 19 U.S.C. § 1677(4)(A).

5

 19 U.S.C. § 1677(4)(A).

3

VIEWS OF THE COMMISSION

Based on the record in the preliminary phase of this investigation, we find that there is a

reasonable indication that an industry in the United States is materially injured by reason of imports of

sodium hexametaphosphate (“SHMP”) from China that allegedly are sold in the United States at less than

fair value (“LTFV”).

I. THE LEGAL STANDARD FOR PRELIMINARY DETERMINATIONS

 The legal standard for preliminary antidumping and countervailing duty determinations requires

the Commission to determine, based upon the information available at the time of the preliminary

determination, whether there is a reasonable indication that a domestic industry is materially injured,

threatened with material injury, or whether the establishment of an industry is materially retarded, by

reason of the allegedly unfairly traded imports.1

 In applying this standard, the Commission weighs the

evidence before it and determines whether “(1) the record as a whole contains clear and convincing

evidence that there is no material injury or threat of such injury; and (2) no likelihood exists that contrary

evidence will arise in a final investigation.”2

II. BACKGROUND

The petition in this investigation was filed on February 8, 2007. The petitioners, ICL

Performance, LP (“ICL”) and Innophos, Inc. (“Innophos”) (“Petitioners”), domestic producers of SHMP,

participated at the March 1, 2007 conference conducted in this investigation and filed a postconference

brief.3

III. DOMESTIC LIKE PRODUCT AND DOMESTIC INDUSTRY

A. In General

In determining whether there is a reasonable indication that an industry in the United States is

materially injured or threatened with material injury by reason of imports of the subject merchandise, the

Commission first defines the “domestic like product” and the “industry.”4

 Section 771(4)(A) of the Tariff

Act of 1930, as amended (“the Act”), defines the relevant domestic industry as the “producers as a

[w]hole of a domestic like product, or those producers whose collective output of a domestic like product

constitutes a major proportion of the total domestic production of the product.”5

 In turn, the Act defines
6

 19 U.S.C. § 1677(10).

7

 See, e.g., NEC Corp. v. Department of Commerce, 36 F. Supp. 2d 380, 383 (Ct. Int’l Trade 1998); Nippon

Steel Corp. v. United States, 19 CIT 450, 455 (1995); Torrington Co. v. United States, 747 F. Supp. 744, 749 n.3

(Ct. Int’l Trade 1990), aff’d, 938 F.2d 1278 (Fed. Cir. 1991) (“every like product determination ‘must be made on

the particular record at issue’ and the ‘unique facts of each case’”). The Commission generally considers a number

of factors including: (1) physical characteristics and uses; (2) interchangeability; (3) channels of distribution; (4)

customer and producer perceptions of the products; (5) common manufacturing facilities, production processes, and

production employees; and, where appropriate, (6) price. See Nippon, 19 CIT at 455 n.4; Timken Co. v. United

States, 913 F. Supp. 580, 584 (Ct. Int’l Trade 1996).

8

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

9

 Nippon Steel, 19 CIT at 455; Torrington, 747 F. Supp. at 748-49. See also S. Rep. No. 96-249 at 90-91

(1979) (Congress has indicated that the like product standard should not be interpreted in “such a narrow fashion as

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

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

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

10 See, e.g., USEC, Inc. v. United States, Slip Op. 01-1421 (Fed. Cir. April 25, 2002) at 9 (“The ITC may not

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

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

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

single like product corresponding to several different classes or kinds defined by Commerce); Torrington, 747 F.

Supp. at 748-752 (affirming Commission determination of six like products in investigations where Commerce

found five classes or kinds).

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

Steel Corp. v. United States, 19 CIT at 455; Asociacion Colombiana de Exportadores de Flores v. United States, 693

F. Supp. 1165, 1169 n.5 (Ct. Int’l Trade 1988) (particularly addressing like product determination); Citrosuco

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

4

“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 . . . .”6

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

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

characteristics and uses” on a case-by-case basis.7

 No single factor is dispositive, and the Commission

may consider other factors it deems relevant based on the facts of a particular investigation.8

 The

Commission looks for clear dividing lines among possible like products and disregards minor variations.9

Although the Commission must accept the determination of the U.S. Department of Commerce

(“Commerce”) as to the scope of the imported merchandise allegedly sold at LTFV,10 the Commission

determines what domestic product is like the imported articles Commerce has identified.11 The

Commission must base its domestic like product determination on the record in this investigation. The

Commission is not bound by prior determinations, even those pertaining to the same imported products,

but may draw upon previous determinations in addressing pertinent like product issues.12

B. Product Description

In its notice of initiation, Commerce defined the imported merchandise subject to this

investigation as:

sodium hexametaphosphate (“SHMP”) . . . a water-soluble polyphosphate glass that

consists of a distribution of polyphosphate chain lengths. It is a collection of sodium

polyphosphosphate polymers built on repeating NaPO3 units. SHMP has a P2O5 content

from 60 to 71 percent. Alternate names for SHMP include the following: Calgon;
13 Initiation of Antidumping Duty Investigation: Sodium Hexametaphosphate From the People’s Republic of

China, 72 Fed. Reg. 9926 (March 6, 2007).

14 Petition at 35-37; Petitioner’s Postconference Brief at 4-9. They also contend that the domestic like product

should not be defined more broadly than the scope of investigation to include such products as blends which contain

less than 50 percent by volume of SHMP in the finished product. Petitioner’s Postconference Brief at 9-10;

Conference Tr. at 75.

15 See CR at I-5-I-12; PR at I-4-I-9.

16 Petitioners’ Postconference Brief at 5.

17 Petitioners’ Postconference Brief at 5.

18 CR at I-7; PR at I-6.

5

Calgon S; Glassy Sodium Phosphate; Sodium Polyphosphate, Glassy; Metaphosphoric

Acid; Sodium Salt; Sodium Acid Metaphosphate; Graham’s Salt; Sodium Hex;

Polyphosphoric Acid, Sodium Salt; Glass H; Hexaphos; Sodaphos; Vitrafos; and BACN-FOS. SHMP is typically sold as a white powder or granule (crushed) and may also be

sold in the form of sheets (glass) or as a liquid solution. It is imported under heading

2835.39.5000, HTSUS. It may also be imported as a blend or mixture under heading

3823.90.3900, HTSUS. The American Chemical Society, Chemical Abstract Service

(“CAS”) has assigned the name “Polyphosphoric Acid, Sodium Salt” to SHMP. The

CAS registry number is 68915-31-1. However, SHMP is commonly identified by CAS

No. 10124-56-8 in the market. For purposes of the investigation, the narrative

description is dispositive, not the tariff heading, CAS registry number or CAS name.

The product covered by this investigation includes SHMP in all grades, whether food

grade or technical grade. The product covered by this investigation includes SHMP without

regard to chain length, i.e., whether regular or long chain. The product covered by this

investigation includes SHMP without regard to physical form, whether glass, sheet, crushed,

granule, powder, fines, or other form.

However, the product covered by this investigation does not include SHMP when

imported in a blend with other materials in which the SHMP accounts for less than 50 percent by

volume of the finished product.13

The subject merchandise includes SHMP in all grades, chain lengths, and physical forms.

C. Domestic Like Product

Petitioners propose that a single domestic like product should be defined to include SHMP in all

grades, chain lengths, and particle sizes.14 Based on the evidence,15 as discussed below, we define a

single domestic like product consisting of SHMP, coextensive with the scope of the investigation.

Physical Characteristics and End Uses. SHMP is a water-soluble polyphosphate glass that

consists of a distribution of polyphosphate chain lengths.16 Its high degree of solubility sets it apart from

other sodium phosphates.17

SHMP typically is differentiated by four characteristics: grade, chain length designation, P2O5

content, and particle size.18 The grade can be either food grade or technical grade. While SHMP in both

grades generally is sold with a Certificate of Analysis that specifies the tested chemistry and impurities

contained in a particular package, food-grade SHMP also must meet the standards of the Good

Manufacturing Practices (GMP) of the U.S. Food and Drug Administration to reduce the risk of
19 CR at I-7 and I-11; PR at I-6; Petitioners’ Postconference Brief at 23.

20 CR at I-7; PR at I-6.

21 CR at I-7; PR at I-6. The P2O5 content of SHMP can vary from 60 percent to approximately 71 percent. Id.

22 CR at I-8; PR at I-6.

23 CR at I-6, I-8-I-11 and Table I-2; PR at I-5-I-9 and Table I-2.

24 CR at I-8; PR at I-6.

25 CR at I-10; PR at I-8.

26 CR at I-10; PR at I-8.

27 CR at I-8 - I-10, II-2 - II-3, and Table I-4; PR at I-6, II-2, and Table I-4.

28 CR/PR at II-1.

29 CR/PR at II-1.

30 See CR at I-11-I-12; PR at I-9.

6

contaminants in the product.19 SHMP generally is designated as either “regular chain” or “long chain,”

which refer to the average length of the polyphosphate chains in the sample.20 The P2O5 content is closely

related to the chain-length designation, with longer chain lengths having higher P2O5 content.21 Finally,

SHMP is produced in different particle sizes: glass, granular, and powder.22

SHMP is used in water treatment, industrial and institutional cleaners, industrial applications 

(e.g., clay processing), food and beverage production, and personal care products and dentifrices (e.g.,

toothpaste), among other applications.23 Within each of these uses, SHMP has unique applications due to

its properties. It is used for water treatment (i.e., added to a municipal or industrial water system) to

reduce scale formation, corrosion, lead/copper leaching, and biofilm formation in pipes and other

equipment.24 In the production of meats, seafood, and poultry, SHMP is used with other sodium

phosphates to retain moisture, enhance flavor, and increase shelf life.25 It is used in personal care

products, such as bath salts, to soften the water and adjust pH and in dentifrices to remove calcium from

stains on teeth.26

Interchangeability. There are some limitations on the interchangeability of SHMP resulting from

differences in grades, chain length designations, P2O5 content, and physical form. In some circumstances

the interchangeability may be one way (e.g., food-grade SHMP may be used for technical-grade SHMP,

but technical-grade SHMP cannot be used in place of food-grade SHMP). However, there is not a clear

line defining the application for each type of SHMP.27

Channels of Distribution. Domestically produced SHMP is sold to both end users and

distributors.28 Most imports of SHMP are brought into the United States by SHMP distributors.29

Manufacturing Facilities, Production Processes, and Employees. The production of SHMP is an

energy-intensive process that typically uses phosphoric acid and soda ash, or caustic soda, as raw

materials.30 The raw materials are mixed to form a slurry of monosodium orthophosphate, which is then

fed into a furnace heated by natural gas. The heated slurry reacts to form molten SHMP which when

removed from the furnace quickly solidifies into a glassy sheet. The sheet is broken into chunks and

further milled to produce the granular and powdered products.
31 CR at I-12; PR at I-9; Conference Tr. at 68-69 (“changing from the regular grade to a longer chain, to get

through that process is about eight hours of transition, by the time the feed stock gets all the way through, you’re

then producing into that new grade.”). Petitioners indicated that “there is a *** in capacity in operations from

regular chain to long chain.” Petitioners’ Postconference Brief at 33.

32 CR at I-12; PR at I-9; Conference Tr. at 57-58 (the down time required to switch from technical grade to food

grade: ICL - “It’s fairly minimal. You want to make sure that things are purged properly . . . . But, it’s a fairly quick

process;” and Innophos – “We, typically, strive to run under food grade conditions all the time. . . . So the actual

conversion time between the two grades, food and tech, is essentially zero.”) and 64-65. Innophos uses the same

furnace for production of both technical and food grades whereas ICL has two furnaces: one that predominantly

produces food grade, and the other that predominantly produces technical grade. CR at I-12; PR at I-9; Conference

Tr. at 57-58 and 64-69.

33 CR at I-7 and II-2; PR at I-6 and II-2.

34 CR at II-3; PR at II-2.

35 CR at II-2; PR at II-1.

36 For the following reasons, we find that the evidence does not support defining a domestic like product

broader than the scope of investigation to include blends containing less than 50 percent of SHMP by volume in the

finished product. Blends typically only include 10 or 20 percent SHMP by weight and thus do not share similar

physical characteristics and uses with SHMP. See Petitioners’ Postconference Brief at 9-10; Conference Tr. at 75-

79. While both blends and SHMP may be used in the same applications, such as meat, seafood and poultry

processing, they are not used for the same reasons and are not interchangeable. The blending process is different

from SHMP manufacturing and does not occur on the same equipment used to produce SHMP. There are separate

markets for and producers of blends and SHMP. In addition, blends primarily are produced by end users of SHMP

(i.e., the customers of domestic producers) and would be considered a downstream product of SHMP. The

Commission generally does not expand or broaden the domestic like product to include downstream articles when

the scope does not encompass a corresponding subject product. See e.g., Certain Frozen or Canned Warmwater

Shrimp from Brazil, China, Ecuador, India, Thailand, and Vietnam, Inv. Nos. 731-TA-1063-1068 (Preliminary),

USITC Pub. 3672 at 14-15 (February 2004).

7

Both regular-chain and long-chain SHMP are produced on the same equipment, with the length of

time in the furnace increased for the production of long-chain SHMP.31 Both technical-grade and foodgrade SHMP also can be made on the same equipment.32

Producer and Customer Perceptions. Overall, all forms of SHMP are perceived to be similar

products. Nevertheless, depending on the application, a purchaser may prefer one grade, chain length, or

physical form to another.33

Price. Long-chain SHMP typically sells for a higher price than regular-chain SHMP due to

higher costs of production.34 Similarly, the additional analysis required to meet GMP standards increases

the costs of production of food-grade SHMP relative to technical-grade SHMP.35

Conclusion. SHMP in all grades, chain lengths, and physical forms share certain general physical

characteristics and uses, are interchangeable in most end uses, are sold to end users and distributors, are

produced in similar production processes, and are generally perceived to be similar products.36 Thus, we

define a single domestic like product consisting of all forms of SHMP, coextensive with the scope of

investigation.
37 19 U.S.C. § 1677(4)(A).

38 Petitioners alleged that Nalco purchased Chinese-produced SHMP during the period of investigation. CR/PR

at III-1, n.2; Conference Tr. at 41; Petitioners’ Postconference Brief at 31, n.17. While a producer that controls large

volumes of subject imports may in some circumstances be considered a related party, the current record does not

indicate whether Nalco was responsible for the predominant portion of the imports from a significant importer. 

There is no other evidence that domestic producers are related to subject producers or importers or that domestic

producers import subject merchandise. CR at III-1 and III-4; PR at III-1.

39 Negligibility is not an issue in this investigation under 19 U.S.C. § 1677(24). The petition was filed on

February 8, 2007. Subject imports from China accounted for 81.9 percent of total imports of SHMP for the most

recent 12-month period (February 2006-January 2007) for which data were available that preceded the filing of the

petition. CR at IV-10; PR at IV-6.

40 19 U.S.C. §§ 1671b(a) and 1673b(a).

41 19 U.S.C. § 1677(7)(B)( i). The Commission “may consider such other economic factors as are relevant to

the determination” but shall “identify each [such] factor . . . [a]nd explain in full its relevance to the determination.” 

19 U.S.C. § 1677(7)(B). See also Angus Chemical Co. v. United States, 140 F.3d 1478 (Fed. Cir. 1998).

42 19 U.S.C. § 1677(7)(A).

43 19 U.S.C. § 1677(7)(C)(iii).

44 19 U.S.C. § 1677(7)(C)(iii).

8

D. Domestic Industry

The domestic industry is defined as the domestic “producers as a [w]hole of a domestic like

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

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

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

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

Based on our finding that the domestic like product is SHMP, for purposes of this preliminary

determination we define a single domestic industry consisting of all domestic producers of SHMP.38

IV. REASONABLE INDICATION OF MATERIAL INJURY BY REASON OF SUBJECT

IMPORTS39

In the preliminary phase of antidumping or countervailing duty investigations, the Commission

determines whether there is a reasonable indication that an industry in the United States is materially

injured by reason of the imports under investigation.40 In making this determination, the Commission

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

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

operations.41 The statute defines “material injury” as “harm which is not inconsequential, immaterial, or

unimportant.”42 In assessing whether there is a reasonable indication that the domestic industry is

materially injured by reason of subject imports, we consider all relevant economic factors that bear on the

state of the industry in the United States.43 No single factor is dispositive, and all relevant factors are

considered “within the context of the business cycle and conditions of competition that are distinctive to

the affected industry.”44

For the reasons stated below, we determine that there is a reasonable indication that the domestic

industry producing SHMP is materially injured by reason of subject imports from China.
45 CR at II-4; PR at II-2-II-3.

46 CR/PR at Table I-2. SHMP accounts for a very small share of the final cost of the products in which it is

incorporated, ranging from less than one percent to 10 percent. CR at II-5 and II-9; PR at II-3 and II-6.

47 Food-grade SHMP is required to meet stricter standards for quality and purity than technical-grade SHMP by

requiring production to adhere to Good Manufacturing Practices (GMP). CR at II-2; PR at II-1.

48 CR at I-7; PR at I-6. Regular-chain SHMP consists of approximately 10 links per molecule, whereas longchain SHMP consists of about 20 links per molecule. CR at II-2; PR at II-2; see also CR at I-15; PR at I-10

(domestic producers reported regular chain as *** and long chain as ***, whereas the importers that accounted for

the majority of U.S. imports from China reported technical grade, regular chain as ranging from ***).

49 CR/PR at Table I-3.

50 CR at I-8 and I-10, II-2 and II-3, and Table I-4; PR at I-6 and I-8, II-2, and Table I-4. Technical-grade,

regular-chain product comprised *** category for both domestically produced SHMP and subject imports. In 2006,

*** percent of domestically produced SHMP was technical grade, regular chain, *** percent produced in food

grade, regular chain, *** percent produced in food grade, long chain, *** percent in technical grade, long chain, and

*** percent in all other grades. CR/PR at Table I-4. In 2006, *** percent of subject imported SHMP was technical

grade, regular chain, *** produced in food grade, regular chain, *** percent produced in food grade, long chain, and

*** percent in all other grades. CR/PR at Table I-5. We note that while *** subject imports of technical-grade,

long-chain SHMP were reported by importers, importers provided pricing data for *** quantities of subject imports

of technical grade with a chain length of ***. CR at I-15-I-16, and V-4, n.7; PR at I-10 and V-3, n.7.

51 CR/PR at Tables IV-6 and C-1. Responses from importers were mixed regarding whether demand had

increased during the period of investigation and generally were specific to an end-use market for SHMP. Increases

were noted for use in kaolin mining, cheese/dairy processing, soaps/detergent production, and global potable water

improvements, while decreases were noted for use in textile production. CR at II-4; PR at II-3.

52 CR at II-4, n.15; PR at II-3, n.15; Petitioners’ Postconference Brief at 27, Table 6.

9

A. Conditions of Competition and the Business Cycle

The following conditions of competition inform our analysis of whether there is a reasonable

indication of material injury by reason of subject imports.

1. Demand Conditions

SHMP is an input into the production of many industrial and consumer products, and thus its

demand is derived from the demand for those end-use products.45 SHMP is primarily used for water

treatment (40.7 percent of consumption), followed by other industrial applications (22.5 percent), 

industrial and institutional cleaners (16.8 percent), meat/seafood/poultry production (15.3 percent), other

consumer products (3.5 percent), and dentifrices (1.2 percent).46 As discussed above, SHMP is produced

in food grade or technical grade,47 each of which also is designated as either regular chain or long chain

(referring to the average length of the polyphosphate chains in the sample).48 Technical-grade SHMP is

used in water treatment, personal care products, and other industrial uses. Food-grade SHMP is used in

food and beverage production and dental applications.49 In general, long-chain SHMP is used in meat,

beverage, and some dairy applications, whereas regular-chain SHMP is used more in industrial

applications, although there is not a clear line defining each type’s uses.50

Apparent U.S. consumption of SHMP has fluctuated during the period examined but increased

from *** metric tons in 2004 to *** metric tons in 2006, for an overall increase of *** percent.51 The

evidence in the record indicates that U.S. consumption of SHMP is projected to increase annually by an

average of 1.7 percent from 2004 to 2009, with the most growth projected in the water treatment (2.7

percent) and meat/seafood/poultry (3.9 percent) applications.52
53 CR/PR at Table III-1. As noted above, a third domestic SHMP producer, Nalco, operated a plant until

October 2003 and ***. Id. at III-1 and nn.1-3, and Petitioners’ Postconference Brief at 30-31 and n. 17.

54 CR at I-12; PR at I-9; Conference Tr. at 57-58 and 64-69.

55 CR at III-3 and Table III-2; PR at III-1 and Table III-2. ICL reported that it had attempted to operate both the

Trenton, NJ plant (closed in November 2003) and its Lawrence, KS facility “but we did not have sufficient orders to

keep both plants operating at full capacity.” Conference Tr. at 11 and 28; Petitioners’ Postconference Brief at 30. In

addition, during the period of investigation, Innophos shut down its furnace for an extended period in the summer of

2006 due to reduced orders and continued to supply customers from inventory that was built up prior to the

shutdown. CR at III-2 and III-3; PR at III-1; Conference Tr. at 19-20 and 101-102; Petitioners’ Postconference Brief

at 40.

56 CR/PR at II-1.

57 CR/PR at Table III-4.

58 CR at III-5; PR at III-3.

59 CR/PR at Table IV-6.

60 CR/PR at Table IV-6.

61 CR/PR at Tables IV-6 and C-1. The volume of nonsubject imports also has increased overall, by 12.1

percent, from 2004 to 2006. Id. at Tables IV-2, IV-5, and C-1. The leading sources of nonsubject imports are: 

Mexico, Germany, Belgium, France, Netherlands, Malaysia, Hong Kong, the United Kingdom, Thailand, India,

Denmark, Korea and Chile. Id. at Table IV-2 and n. 1.

10

2. Supply Conditions

During the period of investigation, two domestic producers, ICL and Innophos, accounted for ***

U.S. production of SHMP.53 Innophos uses the same furnace for production of both technical- and foodgrade SHMP whereas ICL has two furnaces: one that predominantly produces food-grade SHMP, and the

other that predominantly produces technical-grade SHMP.54 The domestic industry’s capacity to produce

SHMP has remained relatively constant during the period of investigation, although ICL reportedly

closed its second SHMP production plant in November 2003 in order to consolidate its production

activities.55 *** domestic SHMP and the majority of imported SHMP is shipped from inventory rather

than produced to order.56 Domestic producers’ inventories have increased over the period of investigation

and rose as a share of U.S. shipments from *** percent in 2004 to *** percent in 2006.57

The domestic industry historically has supplied only a portion of the U.S. market for SHMP, with

the remainder supplied by imports.58 Domestic producers’ share of the U.S. market has declined steadily

from *** percent in 2004 to *** percent in 2006.59 Subject imports’ share of the U.S. market has

increased from *** percent in 2004 to *** percent in 2006.60 Finally, the U.S. market share held by

nonsubject imports fluctuated during the period examined but has increased overall from *** percent in

2004 to *** percent in 2006.61
62 CR at I-7, I-11, and II-5; PR at I-6 and II-4.

63 Different customers may require different chain-length SHMP, based on the end use and specific chemical

formula. CR at II-2; PR at II-1.

64 CR/PR at Tables II-1 and II-2. Importer *** stated that chain length is a critical factor and contended that

there are differences between Chinese SHMP, described as “typically” 17 to 19 chain length, compared to

“available” U.S. product of 10 to 12 chain length. CR at I-15-16 and II-8; PR at I-10 and II-5. As discussed above,

***. Id. We will further explore in any final investigation the importance of the differences in characterizations

regarding chain length.

65 CR at II-6; PR at II-4.

66 CR at II-6; PR at II-4.

67 CR at II-6; PR at II-4.

68 CR at V-3; PR at V-2. Domestic producer Innophos sells *** of its SHMP on a *** contract basis; ICL sells

*** of its SHMP on a *** contract basis, *** contract basis, and *** on the spot market. On a simple average basis,

subject imports are sold 30.1 percent on a long-term contract basis, 19.8 percent on a short-term contract basis, and

50.1 percent on the spot market. Id. In any final phase investigation, we will seek clarification regarding the

characterizations used for contract terms.

69 Petitioners’ Postconference Brief at 28. Petitioners contend that “import competition has largely forced U.S.

producers to absorb freight costs or quote prices on a delivered basis. Historically, we [ICL] would quote on . . . [a]

freight-equalized [basis]. That is, ICL would quote prices at the same shipping point as Innophos to equalize any

differences in freight cost.” Conference Tr. at 13. Petitioners add that “[b]ecause the Chinese SHMP is located at

many distribution points around the country, U.S. producers increasingly quote on a delivered basis.” Petitioners’

Postconference Brief at 28; see also Conference Tr. at 13.

11

3. Substitutability and Other Conditions

SHMP is a chemical product sold with a Certificate of Analysis that specifies the tested chemistry

and impurities contained in a particular package.62 While the grade, chain length, P2O5 content, or

physical form may limit the interchangeability of a specific product for a particular end use,63 this

limitation applies whether it is a U.S. product, subject import, or non-subject import. Thus, the record

supports the conclusion that SHMP is generally interchangeable within form or grade, regardless of where

it is produced. U.S. producers and most importers reported that the U.S. product, the subject imports, and

non-subject imports are frequently or always comparable.64

SHMP’s high degree of solubility sets it apart from other sodium phosphates and limits the

products that can be substituted for it.65 Possible substitutes offered for kaolin mining were polyacrylates,

tetrasodium pyrophosphate, and sodium tripolyphosphate, and for limited water treatment applications

was tetrapotassium pyrophosphate.66 Substitution of these other chemical products for SHMP, however,

would require adjustments in formulations, changes in processes, loss of functionality, and potentially

higher costs.67

 Short-term contracts or spot sales are the predominant basis on which the subject imports and the

domestic like product are sold.68 Finally, petitioners allege that “[w]ith the spread of Chinese SHMP

through national chemical distributors,” the traditional practice in the U.S. market where “prices were

quoted on a freight-equalized basis such that the U.S. producers would quote freight costs from a common

shipping point” has gradually disappeared.69
70 19 U.S.C. § 1677(7)(C)(i).

71 We note that the official import statistics covering SHMP involve a “basket” category in which nonsubject

merchandise also is classified. Accordingly, we have made appropriate adjustments to the import data on the basis

of evidence provided by petitioners and responses to importers’ questionnaires. Specifically, we adjusted Commerce

statistics to exclude all reported imports from Canada, Iceland, Israel, Japan, Spain, and Taiwan (where there

reportedly is no production of SHMP), and made adjustments for imports (i.e., subtracted reported imports of nonSHMP products) from China, Germany, Mexico, and the United Kingdom. See CR at IV-3-IV-8; PR at IV-1 - IV-5;

Petitioners’ Postconference Brief at 13-18; Petition at 38-39 and Exh. INJ-3.

72 CR/PR at Table IV-6.

73 CR/PR at Table IV-2.

74 CR/PR at Table IV-2. Subject imports were 19,695 metric tons in 2004, 22,901 metric tons in 2005, and

21,017 metric tons in 2006. Id.

75 Subject import data include all SHMP imports entering the United States from China, whether placed in

inventory in the United States or shipped into the U.S. market. U.S. shipments of subject imports include only actual

shipments of imported SHMP when it enters the U.S. market, either directly after importation or after being placed in

inventory.

76 CR/PR at Table IV-2.

77 CR/PR at Tables VII-2, VII-3, and C-1. U.S. importers’ inventories of subject merchandise were: *** in

2006. U.S. importers’ inventories as a share of imports and U.S. shipments of imports increased from 2004 to 2006,

with their highest levels reported in 2005, ***, respectively. Id. at Table VII-2.

78 CR/PR at Table IV-5.

79 CR/PR at Table IV-5. U.S. shipments of subject imports were: *** in 2006. Id.

80 CR/PR at Tables IV-2 , IV-5, IV-6, and C-1.

81 CR/PR at Table IV-6 and C-1.

12

B. Volume of the Subject Imports

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

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

production or consumption in the United States, is significant.”70

Subject imports accounted for a large and increasing share of U.S. consumption and increased

relative to U.S. production from 2004 to 2006.71 The market share held by subject imports increased from

*** percent in 2004 to *** percent in 2006.72 The ratio of the quantity of subject imports to U.S.

production rose steadily from *** percent in 2004 to *** percent in 2006.73 The volume of subject

imports fluctuated during the period examined, and increased overall by 6.7 percent from 2004 to 2006.74

The evidence suggests that a portion of subject imports were first placed in inventory in the United States

and later shipped into the U.S. market.75 For example, as the volume of subject imports increased by 16.3

percent from 2004 to 2005,76 U.S. importers’ inventories of subject merchandise increased *** from ***

metric tons in 2004 to *** metric tons in 2005;77 these increases in inventories were followed by ***

increases in U.S. shipments of subject imports from 2005 to 2006.78 U.S. shipments of subject imports

increased each year, and overall by *** percent from 2004 to 2006, with the largest increase from 2005 to

2006.79

The rate of increase in subject imports was greater than the *** increase in apparent U.S.

consumption (*** percent) from 2004 to 2006.80 Moreover, subject imports made significant gains in 

market share from 2005 to 2006 at a time of declining consumption.81 The increase in subject imports’

share of the U.S. market from 2004 to 2006 was accompanied by an overall decline in the domestic
82 CR/PR at Table IV-6. The U.S. market share held by domestic producers was *** percent in 2006. Id.

83 CR/PR at Tables IV-2, IV-5, and IV-6. Nonsubject imports were: 4,499 metric tons in 2004, 6,410 metric

tons in 2005, and 5,042 metric tons in 2006. Id. at Tables IV-2 and IV-5. The U.S. market share held by nonsubject

imports was *** percent in 2006. Id. at Table IV-6.

84 We note that there is limited information on the record regarding the role of nonsubject imports of SHMP in

the U.S. market. In any final phase investigation, we will seek information on the role of nonsubject imports of

SHMP in the U.S. market. We invite parties to comment in any final phase investigation on whether the recent

decision by the U.S. Court of Appeals for the Federal Circuit, Bratsk Aluminum Smelter v. United States, 444 F.3d

1369 (Fed. Cir. 2006), is applicable to the facts of this investigation. The Commission also invites parties to

comment on what additional information the Commission should collect to address the issues raised by the Court and

how that information should be collected, and to identify which of the various nonsubject sources should be the

focus of additional information gathering by the Commission in any final phase investigation.

85 Chairman Pearson and Commissioner Okun do not join the preceding footnote. The U.S. Court of Appeals

for the Federal Circuit did not address the application of its mandate in Bratsk Aluminum Smelter v. United States,

444 F.3d 1369 (Fed. Cir. 2006), to preliminary investigations. In that case the Court indicated that, in cases

involving commodity products in which imports from non-subject countries are price-competitive and are a

significant factor in the U.S. market, in order to establish a causal link between subject imports and material injury

the Commission must evaluate whether the non-subject imports would replace subject imports and thereby eliminate

the benefit to the domestic industry of an antidumping or countervailing duty order.

The legal standard for preliminary antidumping and countervailing duty determinations requires the

Commission to determine, based upon the information available at the time of the preliminary determination,

whether there is a reasonable indication that a domestic industry is materially injured or threatened with material

injury by reason of the allegedly unfairly traded imports. 19 U.S.C. §§ 1671b(a), 1673b(a) (2000). Thus, Chairman

Pearson and Commissioner Okun conclude that they must conduct a Bratsk analysis as they would any other type of

causation analysis in a preliminary investigation. Based on the information available in this preliminary

investigation, Chairman Pearson and Commissioner Okun find that it is unclear whether Bratsk is triggered. 

Assuming, arguendo, that it is, they find that non-subject imports would not replace subject imports from China and

eliminate the benefit to the domestic industry of an antidumping duty order on imports from the subject producers. 

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

Concerning Bratsk Aluminum v. United States.

86 U.S. producers’ U.S. shipments of SHMP decreased steadily for a decrease of *** metric tons, while U.S.

shipments of nonsubject imports increased irregularly for an overall increase of *** metric tons, and U.S. shipments

of subject imports increased by *** metric tons over the period examined. Calculated from CR/PR at Table IV-5.

13

producers’ market share, from *** percent in 2004 to *** percent in 2006.82 Nonsubject imports

fluctuated over the period examined and increased overall, both in absolute terms and relative to U.S.

consumption, from 2004 to 2006, but were much smaller than subject imports in absolute terms.83 84 85 In

addition, the increase in absolute non-subject import volume over the period of investigation was small

relative to the decline in U.S. producer’s U.S. shipments by quantity.86 Thus, subject imports gained

market share largely at the expense of the domestic industry.

For the foregoing reasons, we find, for purposes of the preliminary phase of this investigation,

that the volume of subject imports is significant, both in absolute terms and relative to consumption and

production in the United States.

C. Price Effects of the Subject Imports

Section 771(7)(C)(ii) of the Act provides that, in evaluating the price effects of the subject

imports, the Commission shall consider whether –

 (I) there has been significant price underselling by the imported merchandise as

compared with the price of domestic like products of the United States, and
87 19 U.S.C. § 1677(7)(C)(ii).

88 CR/PR at Tables II-1 and II-2. 

89 CR/PR at Tables II-3 and II-4.

90 The four types of SHMP for which pricing data were requested are: Product 1 – Sodium hexametaphosphate,

technical grade, regular chain; Product 2 – Sodium hexametaphosphate, technical grade, long chain; Product 3 –

Sodium hexametaphosphate, food grade, regular chain; and Product 4 – Sodium hexametaphosphate, food grade,

long chain. CR at V-4; PR at V-3.

91 CR/PR at Tables V-1-V-5.

92 CR/PR at Tables V-1-V-5. The margins of overselling for the three quarterly comparisons with overselling

reported ranged from 0.6 percent to 1.3 percent. Id. at Tables V-1, V-4, and V-5.

93 CR/PR at Tables V-1-V-4.

94 CR/PR at Table V-1.

95 CR/PR at Table V-2.

96 CR/PR at Table V-3.

97 CR/PR at Table V-4.

14

 (II) the effect of imports of such merchandise otherwise depresses prices to a significant

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

degree.87

The record reflects some divergence in views by market participants on the importance of price in

purchasing decisions. As noted above, domestic producers and most responding importers found that

subject imports were always or frequently interchangeable with the domestic like product.88 However,

while domestic producers reported that non-price differences between subject imports and the domestic

like product were only *** in purchasing decisions, a slight majority of responding importers reported

that non-price differences were always or frequently an important factor, with the others responding they

were sometimes or never a factor.89 

In this investigation, U.S. producers and importers provided quarterly pricing data for four types

of SHMP.90 The pricing data show a pattern of consistent underselling by subject imports. Subject

imports undersold the domestic like product in 45 of the 48 monthly comparisons, with margins of

underselling ranging from 0.8 percent to 51.9 percent.91 Subject imports undersold the domestic like

product in all quarterly comparisons of products 2 and 3, in all but one quarterly comparison of product 1,

and in all but two quarterly comparisons of product 4.92 For purposes of this preliminary investigation,

we find that there has been consistent price underselling of the domestic like product by subject imports.

We have also considered movements in SHMP prices over the period of investigation. The

Commission’s pricing data show some fluctuations but generally an overall increase in prices for three of

the four domestic products and for all four subject imported SHMP products.93 Specifically, regarding

product 1, the Commission’s data show that the price for the U.S.-produced product 1 increased by ***

percent from January 2004 to December 2006, while the prices for the corresponding subject imports

increased by 32.2 percent for the same period.94 The pricing data reported for the U.S.-produced product

2 increased by *** percent from January 2004 to December 2006 while the prices for the corresponding

subject imports increased by *** percent for the same period.95 The prices reported for the U.S.-produced

product 3 increased by *** percent from January 2004 to December 2006, while the prices for the

corresponding Chinese imports increased by *** percent.96 Finally, the prices reported for U.S.-produced

product 4 *** the first quarter of 2004 and the fourth quarter of 2006, after a *** percent decline at the

end of the period examined; prices for the corresponding Chinese imports increased overall by ***

percent.97
98 CR/PR at Tables VI-1 and C-1.

99 CR/PR at Tables VI-1 and C-1.

100 The Commission confirmed $*** of the alleged $*** in lost sales over the period of investigation. CR at V13-V-15 and Table V-6; PR at V-7 and Table V-6. The Commission also confirmed $*** of the alleged $*** in lost

revenues. CR at V-16 and Table V-7; PR at V-7-8 and Table V-7.

101 In its notice of initiation, Commerce estimated the dumping margins for imports of subject SHMP from

China as ranging from 76.69 percent to 103.62 percent. 72 Fed. Reg. at 9928 (March 6, 2007).

102 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851 and 885 (“In material injury determinations, the

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

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

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

at 885.

103 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851, 885; Live Cattle from Canada and Mexico, Inv. Nos. 701-

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

104 U.S. production increased from *** in 2004 to *** in 2005 and then declined to *** in 2006. CR/PR at

Tables III-2 and C-1. 

15

While there is evidence of price increases over the period examined, we find a reasonable

indication that subject imports prevented domestic price increases that otherwise would have occurred to

a significant degree. The domestic industry’s cost of goods sold (“COGS”) as a share of net sales

increased over the period examined.98 Although unit sales values also increased, these increases were not

sufficient to completely offset the increases in unit COGS, which rose steadily from $*** in 2004 to $***

in 2006.99 These data indicate that, as the domestic industry’s costs increased and significant volumes of

lower-priced subject imports entered the U.S. market, the domestic producers ***. This evidence

suggests some price suppression in the form of a cost-price squeeze due in part to the subject imports. 

The evidence of some confirmed lost sales and revenues provide additional support for our finding that

subject imports have suppressed prices to a significant degree.100

For the foregoing reasons, we find for purposes of this preliminary determination that there has

been significant underselling by subject imports and that such imports have prevented price increases,

which otherwise would have occurred, to a significant degree. Thus, we find that subject imports have

had significant adverse effects on domestic prices.

D. Impact of the Subject Imports on the Domestic Industry101

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

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

bearing on the state of the industry.”102 These factors include output, sales, inventories, ability to raise

capital, research and development, and factors affecting domestic prices. No single factor is dispositive

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

competition that are distinctive to the affected industry.”103

We have examined the performance indicators in the trade and financial data for the domestic

industry producing SHMP. These data indicate declining overall trends, although some indicators have

fluctuated during the period examined.

U.S. production, capacity utilization, shipments, and net sales quantity and value all declined

overall from 2004 to 2006. U.S. production of SHMP increased from 2004 to 2005, but declined *** in

2006 for an overall decline of *** percent from 2004 to 2006.104 Domestic producers’ U.S. shipments of
105 U.S. shipments declined from *** metric tons in 2004 to *** metric tons in 2005 and *** metric tons in

2006. CR/PR at Table C-1.

106 CR/PR at Tables III-2 and C-1.

107 CR/PR at Tables VI-1 and C-1.

108 CR/PR at Tables IV-5, VII-2, and C-1.

109 CR/PR at Tables IV-6 and C-1.

110 CR/PR at Table III-4. As noted above, Innophos shut down its furnace for an extended period in the summer

of 2006 due to reduced orders and used existing inventory to supply customers. CR at III-2 and III-3; PR at III-1;

Conference Tr. at 19-20 and 101-102.

111 The average number of production workers declined from *** in 2004 and 2005 to *** in 2006. The hours

worked also increased from *** in 2004 to *** in 2006 and the hourly wages increased from $*** in 2004 to $***

in 2006. Accordingly, the wages paid increased from $*** in 2004 to $*** in 2006. CR/PR at Tables III-5 and C-1.

112 The domestic industry’s average unit labor costs were: $*** per metric ton in 2004, $*** per metric ton in

2005, and $*** per metric ton in 2006, for an overall increase of *** percent. CR/PR at Tables III-5 and C-1.

113 Productivity increased from *** metric tons per 1,000 hours in 2004 to *** metric tons per 1,000 hours in

2005, and then declined to *** metric tons per 1,000 hours in 2006. CR/PR at Table III-5.

114 CR/PR at Tables VI-1 and C-1. Operating *** in 2004 to *** in 2005 and *** in 2006. Id.

115 CR/PR at Tables VI-1 and C-1.

116 CR/PR at Tables VI-1 and C-1. Net sales measured by quantity decreased from *** in 2004 to *** in 2005

and *** in 2006. Net sales measured by value increased from *** in 2004 to *** in 2005 and then declined to ***

in 2006. Id.

117 CR/PR at Tables VI-1 and C-1. 

16

SHMP declined each year for an overall decline of *** percent from 2004 to 2006.105 While industry

capacity remained flat over the period of investigation, capacity utilization followed production trends

and declined overall from 2004 to 2006. Capacity utilization increased from *** percent in 2005, and

decreased to *** percent in 2006.106 Net sales volume declined from *** metric tons in 2004 to ***

metric tons in 2006, with *** decrease from 2005 to 2006.107

The *** increase (*** percent) in U.S. importers’ inventories of subject merchandise from 2004

to 2005 was followed by *** increase (*** percent) in U.S. shipments of subject imports from 2005 to

2006.108 Thus, as apparent U.S. consumption declined *** from 2005 to 2006, imported Chinese product

gained U.S. market share at the expense of the market share held by domestic producers.109

Consequently, domestic producers’ inventories increased by *** percent over the period of investigation

and rose as a share of U.S. shipments from *** percent in 2004 to *** percent in 2006.110

While the average number of production related workers declined *** from 2004 to 2006, hours

worked, hourly wages, and wages paid for producing SHMP experienced steady increases for the same

period.111 Accordingly, the domestic industry’s average unit labor costs rose *** over the period

examined, after a *** decline initially from 2004 to 2005.112 Productivity declined overall from 2004 to

2006, despite an initial increase from 2004 to 2005.113

The domestic industry’s financial indicators – operating income, operating margins, and net sales

measured by quantity and value – steadily declined over the period of investigation. Operating *** in

each successive year of the period examined.114 The industry’s ratio of operating *** to net sales

followed a similar trend, *** from *** in 2004 to *** in 2005 and *** in 2006.115

While net sales measured by quantity decreased steadily by *** percent from 2004 to 2006, net

sales by value initially rose from 2004 to 2005, and then fell from 2005 to 2006, for an overall decline of

*** percent.116 As discussed previously, COGS as a ratio to sales increased overall from 2004 to 2006. 

COGS was *** percent of sales in 2004, and increased to *** percent of sales in 2006.117 Even though

the unit sales values increased by $*** per metric ton from 2004 to 2006, this increase only partially
118 CR/PR at VI-1 and Table VI-1.

119 Capital expenditures for the domestic industry were the ***, which is an indication that the domestic

industry is ***. CR at VI-8 and Tables VI-1 and VI-4; PR at VI-3 and Tables VI-1 and VI-4. *** research and

development expenses were reported. Id.

17

offset even ***.118 As the result of this cost/price squeeze, the industry reported *** in each year of the

period examined.119

For purposes of this preliminary determination, we conclude that subject imports had an adverse

impact on the condition of the domestic industry during the period of investigation. In particular, we find

that the absolute and relative volume of subject imports are significant, have gained market share at the

expense of the domestic industry, have undersold domestic product and have suppressed domestic prices

to a significant degree. The suppressed domestic prices, combined with the pattern of consistent

underselling, has caused declines in the domestic industry’s financial performance over the period of

investigation.

CONCLUSION

For the reasons stated above, we find that there is a reasonable indication that the domestic

industry producing SHMP is materially injured by reason of subject imports of SHMP from China that

allegedly are sold in the United States at less than fair value.
 
 1

 444 F.3d 1369, 1373 (Fed. Cir. 2006), quoting Gerald Metals, Inc. v. United States, 132 F.3d 716, 722 (Fed.

Cir. 1997).

 2

 Bratsk, 444 F.3d at 1375-1376.

 3

 H.R. Doc. No. 103-316, Vol. I (1994) at 851-52 (“SAA”); Taiwan Semiconductor Industry Ass’n v. United

States, 266 F.3d at 1339, 1345 (Fed. Cir. 2001).

 4

 Bratsk, 444 F.3d at 1375, 1376.

19

SEPARATE AND ADDITIONAL VIEWS OF CHAIRMAN DANIEL R. PEARSON AND

COMMISSIONER DEANNA TANNER OKUN CONCERNING

BRATSK ALUMINUM V. UNITED STATES

I. Legal Issues Concerning Bratsk Aluminum Smelter v. United States

In the recent case of Bratsk Aluminum Smelter et al. v. United States, 444 F.3d 1369 (Fed. Cir.

2006) (“Bratsk”), the Court of Appeals for the Federal Circuit reaffirmed that the requisite causal link to

subject imports is not demonstrated if such imports contributed only “‘minimally or tangentially to the

material harm.’”1

 Applying that standard to an investigation involving a commodity product, i.e., silicon

metal, and the significant presence of non-subject imports, the Court held that the Commission had not

sufficiently explained whether non-subject imports simply would have replaced subject imports during

the period of investigation had an antidumping order been in place and continued to cause injury to the

domestic industry.2

As a threshold matter, it is not immediately clear how we should interpret the Bratsk opinion in

terms of its effect on our analysis of causation in Title VII investigations. We can discern at least two

possible interpretations which differ substantially: (1) that Bratsk mandates application of an additional

test apparently not contemplated by the statute (the so-called “replacement/benefit test”), and (2) that

Bratsk is a further development of the causation approach prescribed by Gerald Metals. 

A. Separate Causation Analysis – Replacement/Benefit Test

The statute sets forth specific factors for the Commission to consider in analyzing the volume,

price effects and impact of subject imports. 19 U.S.C. § 1677(7). The Uruguay Round Agreements Act

Statement of Administrative Action (“SAA”) explains further that in analyzing causation the Commission

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

sources to the subject imports, but is not required to isolate the injury caused by other factors from injury

caused by unfair imports.3

 Beyond this, the statute does not provide any further limitations on how the

Commission’s causation analysis shall be conducted.

The Court’s decision, however, states that the Commission must perform an additional “specific”

causation analysis in the form of a replacement/benefit test. Using somewhat varying phrasing, the Court

stated that the Commission must determine “whether non-subject imports would have replaced subject

imports without any beneficial effect on domestic producers,” must “explain why the elimination of

subject imports would benefit the domestic industry instead of resulting in the non-subject imports’

replacement of the subject imports’ market share without any beneficial impact on domestic producers,”

and must explain “why the non-subject imports would not replace the subject imports and continue to

cause injury to the domestic industry.”4

Such a “replacement/benefit” test is not among the statutory factors Congress has required the

Commission to consider. The statutory scheme contemplates that subject imports may remain in the U.S.

market after an order is imposed and even that the industry afterward may continue to suffer material
 5

 SAA at 851-52, 885, 889-90. The Commission has indicated that the possibility that an order might not be

effective does not preclude a finding of present material injury. The Commission also has concluded that the statute

does not provide for the Commission to perform an additional injury test to predict the future effectiveness of import

relief:

{W}e note that nothing in the statute or case law requires (or allows) us to consider the likely

effectiveness of a dumping order in making our injury determination. The possibility that nonsubject imports will increase in the future after an antidumping order is imposed is . . . not relevant

to our analysis of whether subject imports are currently materially injuring the industry.

Wooden Bedroom Furniture From China, Inv. No. 731-TA-1058 (Final), USITC Pub. 3743, n.222 (Dec. 2004). 

 6

 Huaiyin Foreign Trade Corp. v. United States, 322 F.3d 1369, 1380 (Fed. Cir. 2003).

 7

 The Commission set out in detail its objections to the Court’s decision in its petition for rehearing to the Federal

Circuit. See Petition for Rehearing en Banc (May 25, 2006), Bratsk Aluminum Smelter et al. v. United States, 444

F.3d 1369 (Fed. Cir. 2006)(No. 05-1213) (petition denied July 24, 2006). Commissioner Okun did not participate in

that proceeding. 

 8

 While it is not an issue in this investigation, it is unclear whether the Court intended its approach to apply to

analyses of threat of material injury, or only to analyses of present material injury. Given that one of the Court’s

formulations of the standard is framed in terms of likely future events, we have interpreted the Court’s decision as

applying both to the context of present injury and threat of injury.

 9

 Gerald Metals, 132 F.3d at 722.

 10 Bratsk, 444 F.3d at 1372.

20

injury.5 Thus, the decision in Bratsk misconstrues the purpose of the antidumping and countervailing

duty laws, which is not to bar subject imports from the U.S. market or award subject import market share

to U.S. producers, but instead to “level[] competitive conditions” by imposing a duty on subject imports

at a level to offset the amount of dumping or subsidization and thus enabling the industry to compete

against fairly traded imports.6

 It is not uncommon for subject imports to remain in the U.S. market in

significant quantities even after the issuance of an antidumping or countervailing duty order, as shown by

the hundreds of millions of dollars in antidumping and countervailing duties collected every year. 

Bratsk, therefore, appears to require that the Commission apply an extra-statutory causation test

with respect to non-subject imports and to determine that the domestic industry will benefit from the

antidumping duty or countervailing duty order. We respectfully disagree with the Court that such a

causation analysis is legally required.7

 However, given that the Federal Circuit’s mandate has been issued

and the decision has become precedent, we discuss infra our interpretation of the Bratsk standard and

perform the analysis based on the record in this preliminary investigation.8

B. Gerald Metals Causation Analysis

Alternatively, we also find support for interpreting the Bratsk decision to be reminding the

Commission of its obligation under Gerald Metals that the Commission may not satisfy the “by reason

of” causation requirement by showing that subject imports contributed only “minimally or tangentially to

the material harm.”9

This may be a reasonable interpretation of the Bratsk decision as the Court noted that the “sole

point of contention in this appeal is whether the Commission established that the injury to the domestic

industry was ‘by reason of’ the subject imports.”10 In explaining its conclusion, the Court emphasized
 11 Bratsk, 444 F.3d at 1375.

 12 Bratsk, 444 F.3d at 1373-1375.

 13 Bratsk, 444 F.3d at 1375.

 14 Bratsk, 444 F.3d at 1375.

 15 19 U.S.C. § 1673d(b).

 16 S. Rep. No. 249, 96th Cong., 1st Sess. 46-47 (1979). 

 17 S. Rep. No. 249, 96th Cong., 1st Sess. 74 (1979); H.R. Rep. No. 317, 96th Cong., 1st Sess. 46-47.

21

that the Commission had “dismissed” Gerald Metals as being factually distinguishable11 and explained its

holdings in Gerald Metals and Taiwan Semiconductor.

12 Further, the Court noted that

Gerald Metals thus requires the Commission to explain why – notwithstanding the

presence and significance of the non-subject imports – it concluded that the subject

imports caused material injury to the domestic industry. While there may be support for

the Commission’s ultimate determination of material injury in the record here, we find

that the Commission did not sufficiently explain its decision in this regard.13

Therefore, the Court may not have been creating an extra-statutory causation test, but rather was

simply reminding the Commission of its existing obligation under the statute, as explained by Federal

Circuit precedent. In other words, the Bratsk Court’s relatively short discussion of the underlying

determination may not have established a new and rigid replacement/benefit test. Rather, the Court may

have discussed the triggering factors (i.e., commodity product and price-competitive non-subject imports)

and the replacement/benefit factors (i.e., whether non-subject imports would have replaced the subject

imports without any beneficial effect on domestic producers)14 as a reminder that the Commission, before

it makes an affirmative determination, must satisfy itself that it has not attributed material injury to factors

other than subject imports.

The statute requires the Commission to determine whether the domestic industry is “materially

injured by reason of” the unfairly traded imports.15 Thus, the Commission must evaluate the effects of the

unfairly traded imports on the domestic industry in order to determine if those imports are causing

material injury. In most investigations, there are other economic factors that also may be causing injury

to the domestic industry. The statute’s legislative history states that the Commission “will consider

information which indicates that harm is caused by factors other than less-than-fair-value imports.”16 The

statute is clear that the Commission is not to weigh or prioritize the factors that are independently causing

material injury.17 The Commission must analyze the effects of the unfairly traded imports and other

relevant factors in a way that enables the Commission to conclude that it has not attributed the effects of

other factors to the subject imports. 

If this interpretation of Bratsk is correct, then we concur with the Federal Circuit that we are

required to identify and assess the competitive effects of subject imports to ensure that they contribute

more than “minimally or tangentially to the material harm” of the domestic industry. To the extent that

we had the relevant information, this analysis was included in the Commission’s causation analysis. We

will re-examine this in any final phase of this investigation once the Commission has collected further

relevant information (e.g., information about the market from purchasers).
 18 Bratsk, 444 F.3d at 1375.

 19 Bratsk, 444 F.3d at 1376.

 20 Bratsk, 444 F.3d at 1375.

22

II. Under the Bratsk Replacement/Benefit Test, Non-subject Imports Likely Would Not Negate

the Beneficial Effect of an Order on Subject Imports from China

Having found that there is a reasonable basis to determine that an industry in the United States is

materially injured by reason of subject imports from China, we now must assess whether the facts of this

investigation trigger a Bratsk analysis under the “replacement/benefit test” interpretation of Bratsk. 

Based on the record in this preliminary investigation, it is unclear whether Bratsk is triggered. Assuming,

however, that it is, we conclude that non-subject imports likely would not replace subject imports and

negate the beneficial effect of the order on subject imports from China.

A. Bratsk Replacement/Benefit Test

The exact formulation of the Bratsk Court’s test is not clear. According to one part of the

opinion:

{U}nder Gerald Metals, the Commission is required to make a specific causation

determination and in that connection to directly address whether non-subject imports

would have replaced the subject imports without any beneficial effect on domestic

producers.18

Stated this way, the test would require the Commission to analyze replacement/benefit during the period

of investigation, i.e., backward looking. The Court also has stated a different formulation that would

require the Commission to analyze replacement/benefit in the future, i.e., forward looking:

{T}he Commission has to explain, in a meaningful way, why the non-subject imports

would not replace the subject imports and continue to cause injury to the domestic

industry.19

It therefore is unclear whether the Court intended to state the same test in different ways, or whether it

contemplated that it was establishing two separate criteria. 

Based upon our reading of Bratsk, we conclude that we now must assess the likely effectiveness

of any import relief vis-a-vis non-subject imports to determine whether non-subject imports would

eliminate the beneficial effect of the order on subject imports, in this case an order on China.

1. Triggering Factors

Bratsk requires a two-step analysis. First, the Commission must determine whether Bratsk is

triggered based on the facts of the investigation. Second, if it is triggered, then the Commission must

consider whether the non-subject imports would have replaced the subject imports and continue to cause

injury to the domestic industry.

The Bratsk Court states that “{t}he obligation under Gerald Metals is triggered whenever the

antidumping investigation is centered on a commodity product, and price competitive non-subject imports

are a significant factor in the market.”20 Thus, the Bratsk test purportedly is not required in every case,
 21 Bratsk, 444 F.3d at 1371.

 22 Bratsk, 444 F.3d at 1374.

 23 Bratsk, 444 F.3d at 1376.

 24 Petitioners’ Postconference Brief at 42 and Conference Tr. at 88.

 25 CR/PR at Tables II-1 and II-2.

 26 While the grade, chain length or physical form may limit the interchangeability of a specific product for a

particular end use, this limitation applies whether it is a U.S. product, subject import, or non-subject import.

 27 CR/PR at Table IV-2.

23

only in cases involving a “commodity product” and where “price competitive non-subject imports are a

significant factor in the market.” 

The Bratsk Court refers to a “commodity product” as “meaning that it is generally

interchangeable regardless of its source.”21 Thus, the Court’s definition of “commodity product” is broad. 

The second trigger for the Bratsk replacement/benefit test is that price competitive non-subject imports

are a significant factor in the U.S. market. On the issue of whether the non-subject imports are “price

competitive,” the Bratsk Court refers to the fact that in Gerald Metals the non-subject imports had

undersold the domestic product just as the subject imports had.22

2. Replacement/Benefit Factors

If the Commission determines that Bratsk is triggered, the second step in the analysis, assessment

of replacement of subject imports by non-subject imports that negates the benefit to the domestic industry,

also has two components. First, the non-subject imports must be able to replace the subject imports. In

assessing replacement, the Commission should consider not only interchangeability, but the non-subject

producers’ capacity to fill any void left by subject imports and whether there exists an incentive to do so. 

The second step requires that the non-subject imports must negate the benefit of the order to the

domestic industry. In assessing benefit, the Court indicated that the price of non-subject imports would

be an important consideration in this analysis as non-subject imports may not be priced low enough to

negate the benefit to the domestic industry (i.e., “the price of the non-subject imports may be sufficiently

above the subject imports such that the elimination of the subject imports would have benefitted the

domestic industry”).23 The Court’s decision does not specify how complete the replacement of subject

imports by non-subject imports must be, or how much of the benefit to the domestic industry must be

negated, to require a negative determination.

B. Analysis

1. Triggering Factors

Petitioners acknowledge that Bratsk is triggered in that SHMP imports are fungible with domestic

SHMP, as well as imports from non-subject countries.24 Questionnaire responses from both producers

and importers indicate that the domestic like product, subject imports, and non-subject imports are always

or frequently comparable.25 Thus, based on the information available in this preliminary investigation, we

find that the domestic like product, subject imports, and non-subject imports of SHMP generally are

commodity products.26

With respect to the second factor, whether price competitive non-subject imports are a significant

factor in the U.S. market, the record in this preliminary investigation indicates that non-subject imports

were present throughout the period of investigation. Non-subject import volume was 4,499 metric tons in

2004, 6,410 metric tons in 2005, and 5,042 metric tons in 2006.27 Non-subject imports accounted for 18.6
 28 CR/PR at Table IV-2.

 29 CR/PR at Table IV-6.

 30 CR/PR at Table IV-2.

 31 CR/PR at Table IV-6.

 32 See CR/PR at Tables IV-2, IV-5, and IV-6. The largest supplier of non-subject imports is Mexico, which, in

quantity terms, accounted for *** percent of total U.S. imports in 2004, *** percent in 2005, and *** percent in

2006. CR/PR at Table IV-2. The U.S. market share held by imports of SHMP from Mexico was *** percent of

apparent U.S. consumption in 2004, *** percent in 2005, and *** percent in 2006. CR/PR at Table IV-6.

 33 CR/PR at Tables D-1- D-4.

 34 CR/PR at Tables D-1- D-4. 

 35 CR/PR at Table D-1.

 36 CR/PR at Table IV-2.

 37 Compare CR/PR at Table III-3 to Table IV-2.

 38 Compare CR/PR at Table III-3 to Table IV-2.

 39 CR/PR at Table VII-1.

 40 CR/PR at Tables IV-6 and VII-1. As noted above, during the period of investigation, imports from Mexico

accounted for a share of apparent U.S. consumption ranging from *** percent to *** percent, in terms of quantity. 

CR/PR at Table IV-6.

24

percent of total imports (on a quantity basis) in 2004, 21.9 percent in 2005, and 19.3 percent in 2006.28

The U.S. market share of non-subject imports ranged from *** percent in 2004 to *** percent in 2005

and to *** percent in 2006.29 We note that subject imports accounted for 81.4 percent of total imports in

2004, 78.1 percent in 2005, and 80.7 percent in 2006.30 The U.S. market share of subject imports ranged

from *** percent in 2004 to *** percent in 2005 and to *** percent in 2006.31 We note that the volume

of subject imports always exceeded the volume of non-subject imports in each year of the period of

investigation.32

As to whether non-subject imports are price competitive, the Commission requested productspecific price data from non-subject countries in its importers’ questionnaires. The Commission received

a limited amount of price data for non-subject imports from Australia, France, Germany, and Mexico. 

These data show a mixture of overselling and underselling of the domestic like product by non-subject

imports.33 There were, however, wide variations in the pricing data of non-subject imports, and the prices

of imports from Mexico, which is the largest non-subject supplier, were often below those of subject

imports.34 ***.35 However, the average unit values of non-subject imports as a whole, and individually

for imports from Mexico, were higher than those of subject imports throughout the period of

investigation.36 ***.37 However, the average unit value of non-subject imports from Mexico were lower

than the average unit value of U.S. shipments.38 Therefore, for purpose of this preliminary determination,

it is unclear whether non-subject imports of SHMP, viewed as a whole, are price-competitive. Thus, we

cannot determine whether they are a “significant factor” in the U.S. market.

2. Replacement/Benefit Factors

While it is unclear whether the Bratsk test is triggered, assuming, arguendo, that it is, we now

analyze whether non-subject imports are likely to replace subject imports and continue to cause injury to

the domestic industry. There is some information in the record on the capacity of non-subject suppliers,

but little information on their capacity utilization rates.39 For example, the total reported production

capacity for the largest non-subject supplier, sole Mexican producer Quimir, is 7,000 metric tons, which

is equivalent to about *** percent of apparent U.S. consumption.40 Quimir reportedly produces similar
 41 CR/PR at VII-2.

 42 CR/PR at VII-2 and Petitioners’ Postconference Brief at 46.

 43 The U.S. market share for subject and non-subject imports relative to U.S. producers’ share during the period

of investigation may provide some indication of the pattern if subject imports were not in the U.S. market. See CR

at IV-12. Apparent U.S. consumption was relatively level, in terms of quantity, from 2004 to 2006. The market

share of subject U.S. imports was almost level from 2004 to 2005 and then rose *** in 2006. The market share of

U.S. imports of non-subject SHMP (particularly from Mexico) rose *** from 2004 to 2005 but then declined in

2006. In summary, the decline in U.S. producers’ market share from 2004 to 2005 was offset by a rise in the market

share of non-subject imports (in particular imports from Mexico), while the fall in U.S. producers’ market share from

2005 to 2006 was offset by a rise in the market share of U.S. imports of SHMP from China that was large enough to

simultaneously offset the declining share of the U.S. market reported for product imported from Mexico in 2006

(compared to 2005). These trends, along with statements about the Mexican producer discussed above, may tend to

support finding that non-subject Mexican imports would replace Chinese imports at least in part. However, we also

note that Mexican capacity to produce SHMP is equivalent to only about *** percent of apparent U.S. consumption,

while subject imports accounted for *** percent of apparent U.S. consumption in 2006.

25

grades to those manufactured by U.S. firms.41 With respect to European SHMP suppliers, petitioners

indicated that the European market differs from the U.S. market in that ***.42 Based on these limited data

and information, we find that non-subject imports are not likely to have sufficient capacity to replace

subject imports if the order were to be imposed.43

In light of the fact that the prices and average unit values of non-subject imports were generally

higher than those of subject imports, with the possible exception of imports from Mexico, and because we

determine that non-subject imports lack the capacity to replace subject imports sufficiently, for purpose of

this preliminary investigation we determine that non-subject imports would not negate the benefit of the

order on subject imports. 
 
 1

 A complete description of the imported product subject to this investigation is presented in the Subject Product

section of this part of the report.

 2 Federal Register notices cited in the tabulation are presented in app. A.

I-1

PART I: INTRODUCTION

BACKGROUND

This investigation results from a petition filed by ICL Performance Products, LP (“ICL”), St.

Louis, MO, and Innophos, Inc. (“Innophos”), Cranbury, NJ, on February 8, 2007, alleging that an

industry in the United States is materially injured and threatened with material injury by reason of lessthan-fair-value (“LTFV”) imports of sodium hexametaphosphate (“SHMP”)1

 from China. Information

relating to the background of the investigation is provided below.2

Effective date Action

February 8, 2007 Petition filed with Commerce and the Commission; institution of Commission

investigation (72 FR 7458, February 15, 2007)

March 1, 2007 Commission’s conference1

March 6, 2007 Commerce’s notice of initiation of the antidumping investigation (72 FR 9926)

March 26, 2007 Date of the Commission’s vote

March 26, 2007 Commission’s determination transmitted to Commerce

April 2, 2007 Commission’s views transmitted to Commerce

1

 A list of witnesses appearing at the conference is presented in app. B.

ORGANIZATION OF THE REPORT

Section 771(7)(B) of the Tariff Act of 1930 (the “Act”) (19 U.S.C. § 1677(7)(B)) provides that in

making its determinations of injury to an industry in the United States, the Commission–

shall consider (I) the volume of imports of the subject merchandise, (II)

the effect of imports of that merchandise on prices in the United States

for domestic like products, and (III) the impact of imports of such

merchandise on domestic producers of domestic like products, but only

in the context of production operations within the United States; and . . .

may consider such other economic factors as are relevant to the

determination regarding whether there is material injury by reason of

imports.

Section 771(7)(C) of the Act (19 U.S.C. § 1677(7)(C)) further provides that--

In evaluating the volume of imports of merchandise, the Commission

shall consider whether the volume of imports of the merchandise, or any

increase in that volume, either in absolute terms or relative to production

or consumption in the United States is significant.
I-2

. . .

In evaluating the effect of imports of such merchandise on prices, the

Commission shall consider whether . . . (I) there has been significant

price underselling by the imported merchandise as compared with the

price of domestic like products of the United States, and (II) the effect of

imports of such merchandise otherwise depresses prices to a significant

degree or prevents price increases, which otherwise would have

occurred, to a significant degree.

. . .

In examining the impact required to be considered under subparagraph

(B)(i)(III), the Commission shall evaluate (within the context of the

business cycle and conditions of competition that are distinctive to the

affected industry) all relevant economic factors which have a bearing on

the state of the industry in the United States, including, but not limited to

. . . (I) actual and potential declines in output, sales, market share,

profits, productivity, return on investments, and utilization of capacity,

(II) factors affecting domestic prices, (III) actual and potential negative

effects on cash flow, inventories, employment, wages, growth, ability to

raise capital, and investment, (IV) actual and potential negative effects

on the existing development and production efforts of the domestic

industry, including efforts to develop a derivative or more advanced

version of the domestic like product, and (V) in {an antidumping

investigation}, the magnitude of the margin of dumping.

Information on the subject merchandise, alleged margin of dumping, and domestic like product is

presented in Part I. Information on conditions of competition and other relevant economic factors is

presented in Part II. Part III presents information on the condition of the U.S. industry, including data on

capacity, production, shipments, inventories, and employment. The volume and pricing of imports of the

subject merchandise are presented in Parts IV and V, respectively. Part VI presents information on the

financial experience of U.S. producers. The statutory requirements and information obtained for use in

the Commission’s consideration of the question of threat of material injury are presented in Part VII.

SUMMARY DATA

A summary of data collected in this investigation for the SHMP market is presented in appendix

C. The period of investigation for which data were collected is January 2004 through December 2006. 

U.S. industry data are based on questionnaire responses of two firms that accounted for *** U.S.

production of SHMP during the period examined. Data on U.S. imports of SHMP are based on official

Commerce statistics. Data on U.S. consumption of SHMP are derived from (1) questionnaire responses

of the two U.S. producers, (2) questionnaire responses of firms that imported almost all U.S. imports from

China (and Germany) in 2006, and (3) official Commerce statistics for U.S. imports of SHMP from the

other nonsubject countries.

PREVIOUS AND RELATED INVESTIGATIONS

The Commission has not previously conducted an import injury investigation concerning SHMP. 

SHMP is, however, manufactured from phosphoric acid (and soda ash). An antidumping duty and

countervailing duty order with respect to industrial phosphoric acid from Israel and an antidumping duty

order with respect to industrial phosphoric acid from Belgium were issued in August 1987. The orders

were revoked effective January 1, 2000. 
 3 Initiation of Antidumping Duty Investigation: Sodium Hexametaphosphate from the People’s Republic of

China, 72 FR 9926, March 6, 2007. The notice provides a description of Commerce’s adjustments that resulted in

the alleged margin. 

 4 Initiation of Antidumping Duty Investigation: Sodium Hexametaphosphate from the People’s Republic of

China, 72 FR 9926, March 6, 2007.

 5

 The one exception is a SHMP blend called BAC-N-FOS that is used in meat processing. BAC-N-FOS is a

mixture of SHMP and sodium bicarbonate. It is produced by Innophos but accounts for *** percent of Innophos’

sales. Postconference brief, p. 9 and n.7.

I-3

NATURE AND EXTENT OF ALLEGED SALES AT LTFV

Commerce has initiated an antidumping duty investigation based on petitioners’ allegations of

LTFV sales of SHMP from China. The dumping margins (in percent ad valorem) as alleged by petitioner

and revised by Commerce range from 76.69 percent to 103.62 percent ad valorem.

3

THE SUBJECT PRODUCT

Commerce has defined the imported merchandise subject to investigation as:4

Sodium hexametaphosphate (SHMP), which is a water-soluble polyphosphate

glass that consists of a distribution of polyphosphate chain lengths. It is a

collection of sodium polyphosphate polymers built on repeating NaPO3 units. 

SHMP has a P2O5 content from 60 to 71 percent. Alternate names for SHMP

include the following: Calgon; Calgon S; Glassy Sodium Phosphate; Sodium

Polyphosphate, Glassy; Metaphosphoric Acid; Sodium Salt; Sodium Acid

Metaphosphate; Graham's Salt; Sodium Hex; Polyphosphoric Acid, Sodium Salt;

Glass H; Hexaphos; Sodaphos; Vitrafos; and BAC-N-FOS. SHMP is typically

sold as a white powder or granule (crushed) and may also be sold in the form of

sheets (glass) or as a liquid solution. The American Chemical Society, Chemical

Abstract Service (“CAS”) has assigned the name “Polyphosphoric Acid, Sodium

Salt” to SHMP. The CAS registry number is 68915-31-1. However, SHMP is

also commonly identified by CAS No. 10124-56-8 in the market. While the CAS

registry number and name are provided for convenience and clarity, the written

description of the scope of this investigation is dispositive.

The product covered by this investigation includes SHMP in all grades, whether

food grade or technical grade. The product covered includes SHMP without

regard to chain length, i.e., whether regular or long chain. The product covered

also includes SHMP without regard to physical form, whether glass, sheet,

crushed, granule, powder, fines or other form. However, the product covered by

this investigation does not include SHMP when imported in a blend with other

materials in which the SHMP accounts for less than 50 percent by volume of the

finished product.

As noted in the above definition, the scope excludes SHMP blends “as they are typically known and

defined in the market” {wording provided by petitioners}.5

 Blends of SHMP and other phosphates

(commonly sodium tripolyphosphate, sodium acid pyrophosphate, and tetrasodium pyrophosphate) are

used in processed meat, seafood, and poultry processing to improve the color, yield, texture, and flavor of
 6

 Conference transcript, pp. 24-25 (Treinen) and postconference brief, p. 10. Petitioners state that the physical

characteristics, performance, and uses of the blends are not the same as those for SHMP. The blends that are mixed

by the petitioners are prepared on equipment other than that used to make SHMP. Blends are primarily produced by

the end users of SHMP, who are the customers of ICL and Innophos. Postconference brief, p. 10.

 7

 While the HTS subheadings are provided for convenience and clarity, the written description of the scope of this

investigation is dispositive.

 8

 Petition, p. 35.

I-4

meats. Both ICL and Innophos offer phosphate blends where SHMP accounts for 10 to 20 percent of the

volume of the blend. Petitioners are not aware, however, of any imports of similar blends from China.6

U.S. Tariff Treatment

SHMP is imported under the Harmonized Tariff Schedule of the United States (“HTS”)

subheading 2835.39.50, and is dutiable at 3.7 percent under the general duty rate applicable to China. 

SHMP may also be imported as a blend or mixture under HTS subheading 3823.90.39.7

THE DOMESTIC LIKE PRODUCT

The Commission’s determination regarding the appropriate domestic product that is “like” the

subject imported product is based on a number of factors, including (1) physical characteristics and uses;

(2) common manufacturing facilities and production employees; (3) interchangeability; (4) customer and

producer perceptions; (5) channels of distribution; and, where appropriate, (6) price. Petitioners contend

that the domestic like product is co-extensive with the scope of the subject merchandise as defined by

Commerce, which consists of SHMP.8

 No alternate domestic like product has been proposed, as no

respondents have entered a notice of appearance in the preliminary phase of this investigation. Table I-1

presents information provided by the petitioners with respect to the domestic like product factors. 

Additional information on the description and uses and the production process for SHMP follows. The

comparability of domestically produced SHMP and that imported from China is also addressed in this

section of the report.
 9

 Although commonly used in the industry, the name sodium hexametaphosphate is somewhat a misnomer. The

name should technically only refer to a six-phosphate polymer chain that forms a ring, but in common usage it refers

to a mixture of linear polyphosphates of varying length. See David R. Gard, “Phosphoric Acids and Phosphates,”

Kirk-Othmer Encyclopedia of Chemical Technology, John Wiley & Sons, Inc., 2005.

 10 Petition, p. 9.

 11 Petition, p. 8.

I-5

Table I-1

SHMP: Domestic like product factors

Physical Characteristics and Uses

SHMP is a glassy phosphate that is highly soluble and can easily be dissolved in water. No other

phosphates share this characteristic. SHMP is reported to be purchased within each of its end-use

markets for its unique properties.

Common Manufacturing Facilities and Production Employees

SHMP is manufactured in dedicated plants on production equipment that is not used to produce other

products. The lack of interchangeability in equipment also applies to SHMP blends. Both of the

domestic producers manufacture blends. However, the actual blending does not occur on the

equipment that is used in the manufacture of SHMP.

Interchangeability and Customer and Producer Perceptions

Petitioners state that end users do not substitute SHMP for other phosphates or replace other

phosphates with SHMP.

Channels of Distribution

The end users of SHMP may also purchase other sodium phosphates or phosphoric acids. However,

petitioners emphasize in their postconference brief that each phosphate has a specific application.

Price

See exhibit 1 of the postconference brief (p. 61) for ***. 

Source: Postconference brief, pp. 5-11 and exh. 1.

Description and Uses

Sodium hexametaphosphate (or SHMP)9

 is a translucent, solid material that is used in water

treatment, food and beverage production, and clay processing, among other applications. SHMP consists

of chains of repeating phosphate units, which have negative charges, and positively charged sodium ions. 

The chemical formula for SHMP can be written as Nan+2PnO3n+1, where different values of n represent

phosphate chains of different lengths. For example, n = 10 is a polyphosphate consisting of 12 sodium

(Na) atoms, 10 phosphorus (P) atoms, and 31 oxygen (O) atoms. Commercial SHMP comprises various

lengths of polyphosphate chains with values of n ranging from 5 to 20 or higher.10

Samples of SHMP are typically differentiated by four characteristics: grade, chain length

designation, P2O5 content, and particle size.11 The grade can be either food grade or technical grade. 

Food grade SHMP must meet the requirements of the Food Chemicals Codex (“FCC”). The FCC

specifies maximum amounts of possibly toxic contaminants such as arsenic, lead, fluoride, and insoluble
 12 Petition, p. 8.

 13 Petition, p. 8.

 14 Conference transcript, p. 9 (Moffatt).

 15 Conference transcript, p. 115 (Stachiw).

 16 P2O5 content is usually specified as a percentage of the total weight of the sample that is attributable to groups

of two phosphorus atoms and five oxygen atoms.

 17 Petition, p. 9.

 18 Petition, p. 8.

 19 Petition, p. 9.

 20 Petition, exh. AD-2, p. 1.

 21 Petition, exh. AD-2, p. 1.

 22 Petition, exh. AD-2, p. 1.

 23 Petition, p. 9.

 24 Petition, pp. 11-2.

 25 Petition, p. 12.

 26 E.g., conference transcript, pp. 7-8 (Moffatt).

I-6

materials.12 The FCC also requires a narrower pH range for food grade SHMP.13 Production of food

grade materials has to meet the standards of the Good Manufacturing Practices (“GMP”) of the U.S. Food

and Drug Administration, which reduce the risk of contaminants getting into the product.14 Technical

grade SHMP does not have to meet these requirements.

SHMP is often designated as either “regular chain” or “long chain.” These designations refer to

the average length of the polyphosphate chains in the sample. Depending on the application, a purchaser

may prefer one length designation to the other.15

The P2O5 characteristic for SHMP is closely related to the chain length designation.16 Higher

P2O5 content corresponds to a longer average polyphosphate chain length. Therefore, product designated

as long chain SHMP will have a higher percentage P2O5 content than regular chain SHMP. The P2O5

content of SHMP can vary from 60 percent to approximately 71 percent.17 P2O5 content is also related to

the pH of SHMP, with lower P2O5 content corresponding to higher pH.18

SHMP comes in different particle sizes: glass, granular, and powder.19 Glass typically has

particles that are one-half of an inch in length and width and one-eighth of an inch in thickness.20

Granular SHMP typically has particles with diameters that are between 149 and 841 microns.21 Most of

the particles of SHMP powder will be less than 149 microns in diameter.22 SHMP can also be sold in

aqueous solution.23

Estimated U.S. consumption of SHMP by application for 2004 is presented in table I-2. Table I-3

presents information on the types of SHMP used for various applications. As shown, one of the major

uses is for water treatment. When added to a municipal or industrial water system, SHMP helps to reduce

scale formation, corrosion, lead/copper leaching, and biofilm formation in pipes and other equipment.24

SHMP added to potable water sequesters certain metal oxides, thereby eliminating objectionable colors

from the water.25 Water treatment applications typically require technical grade, regular chain SHMP.

Technical grade, regular chain SHMP is also used in industrial applications. Industrial uses of

SHMP include clay processing, drilling fluids, and cleaning products. In clay processing and drilling

fluids, SHMP sequesters metal ions in clay slurries and drilling fluids that would otherwise cause clay

particles to stick together and form clumps.26 By eliminating these clumps, SHMP improves the flow

properties of the clay slurries and drilling fluid and eases the handling of these fluids. SHMP is added to
 27 Petition, exh. INJ-1, p. 51.

I-7

Table I-2

SHMP: U.S. consumption, by application, 2004

Applications Quantity

 (1,000 short tons) Share (in percent)

Water treatment 16.5 40.7

Industrial and institutional cleaners 6.8 16.8

Meat, seafood, and poultry 6.2 15.3

Dentifrices 0.5 1.2

Other industrial applications1 9.1 22.5

Other consumer products 1.4 3.5

 Total 40.5 100.0

 1 Other industrial applications include clay processing, copper ore processing, drilling muds, and paper

production.

Source: Postconference brief, p. 7.

Table I-3

SHMP: Applications by product type

Market Regular chain Long chain

Food grade

Meat/poultry/seafood Moderate use Some use

Beverage Some use Moderate use

Dairy Primary chain length used -

Dental Some use Moderate use

Technical grade

Water treatment Primary chain length used -

Paper (clay dispersion) Primary chain length used Some use

Cleaning Primary chain length used -

Pet food Primary chain length used -

Source: Postconference brief, p. 7.

some industrial cleaners such as the ones used to clean the exteriors of transportation vehicles,

particularly trucks and buses.27
 28 Conference transcript, p. 42 (Stachiw).

 29 Petition, p. 12.

 30 Petition, p. 13.

 31 Petition, p. 13.

 32 Petition, p. 13.

 33 Petition, p. 13.

 34 Petition, exh. AD-1.

 35 ***.

 36 Conference transcript, p. 53 (Kemp).

 37 Conference transcript, p. 114 (Stachiw).

 38 Conference transcript, p. 114 (Stachiw).

 39 Conference transcript, pp. 118-119 (Treinen).

 40 Conference transcript, p. 8 (Moffatt).

 41 Conference transcript, pp. 8-9 (Moffatt).

I-8

In personal care products, SHMP is used in bath salts and dentifrices (e.g., toothpastes), in

addition to other applications. In bath salts, SHMP helps to soften the water and adjust pH. The use of

SHMP in bath salts is the source of one of its common names, Calgon.28 In dental care products, SHMP

removes calcium from stains on teeth, which allows the protein and carbohydrate components of stains to

be removed more easily.29 Personal care products use technical and food grade, regular and long chain

SHMP.

SHMP is used in a variety of beverage products. In fruit juices, juice-based drinks, sport drinks,

ready-to-drink teas, and carbonated beverages, SHMP helps to enhance flavors, extend shelf life, and

improve clarity and carbonation.30 In dairy-based beverages, SHMP protects proteins and disperses

solids. SHMP is also used to provide protein stabilization and flavor enhancement in dairy-based foams

and processed cheese.31 Food grade, regular, and long chain SHMP are used in these applications.

In the production of meats, seafood, and poultry, SHMP is used with other sodium phosphates to

retain moisture, enhance flavor, and increase shelf life.32 SHMP is used in canned pet foods for protein

stabilization and moisture retention and in dry pet foods to reduce tartar buildup on pets’ teeth.33 Food

grade, regular, and long chain SHMP are used in these applications.

SHMP is a non-combustible material with no significant environmental effects. SHMP has low

oral toxicity and may cause minor irritation to skin, eyes, and the respiratory tract.34 SHMP is typically

packaged in 50- or 100-pound bags or in “supersacks” that can hold up to 2,400 pounds of product.35 The

bags are often lined with plastic to reduce the amount of moisture absorbed by the SHMP.36 SHMP has a

shelf life of about 18 months because it loses effectiveness as it absorbs moisture from the air.37 Expired

SHMP can be recycled to produce a fresh (technical grade) product.38 Each package of SHMP is

accompanied by a certificate of analysis that lists the properties of the SHMP such as P2O5 content,

average chain length, particle size, maximum levels of impurities, etc.39

Production Process

The production of SHMP is an energy-intensive process that typically uses phosphoric acid and

soda ash, or caustic soda, as raw materials.40 The raw materials are mixed to form a slurry of

monosodium orthophosphate, which is then fed into a furnace.41 Natural gas is used to heat the furnace to
 42 Conference transcript, p. 9 (Moffatt).

 43 In all U.S. production of SHMP, natural gas is used to heat the furnace. Conference testimony indicated that a

furnace in Canada, which is no longer producing SHMP, used fuel oil. Conference attendees did not know what fuel

is used for SHMP production in China. See conference transcript, p. 116 (Moffatt and Treinen).

 44 Conference transcript, p. 9 (Moffatt).

 45 Conference transcript, p. 20 (Treinen).

 46 Conference transcript, p. 62 (Treinen) and p. 69 (Kemp).

 47 Conference transcript, p. 104 (Cannon).

 48 Conference transcript, p. 68 (Treinen).

 49 Conference transcript, pp. 67-68 (Treinen).

 50 Conference transcript, p. 68 (Treinen).

 51 Conference transcript, p. 64 (Kemp).

 52 Conference transcript, p. 57 (Moffatt).

 53 Commission questionnaires did not specify P2O5 ranges or chain lengths but instead requested that each

respondent provide the ranges and lengths used by their firm to classify their SHMP into “regular” and “long” chains

(and into food and technical grades).

I-9

a temperature between 800 and 1,100 degrees Celsius.42 43 In the furnace, water is boiled off and the

monosodium orthophosphate reacts to form molten SHMP, which is removed from the furnace and

quickly solidifies into a glassy sheet as it cools. The sheet of solid SHMP is broken into large chunks that

are further milled to produce the granular and powdered products.44 When SHMP is milled, the ratio of

granular material to powdered material may be fixed by the milling equipment and may not be

adjustable.45 Granular SHMP can be further milled into powder. However, domestic producers indicate

that this process requires additional equipment and handling, which leads to higher costs of production

than if produced as part of balanced production.46

Both regular chain and long chain SHMP are produced on the same equipment. To produce the

long chain product, the length of time that molten SHMP remains in the furnace increases.47 For example,

one U.S. producer indicated that it typically produces regular chain SHMP for 20 to 25 days and switches

to long chain SHMP production for 5 days.48 This production cycle results in an annual output of about

80 percent regular chain and 20 percent long chain product.49 The other U.S. producer has two furnaces

with food grade made primarily made in one and technical grade made in the other.50

Both technical grade and food grade SHMP can be made on the same equipment. Innophos uses

the same furnace for production of both grades.51 ICL has two furnaces: one that predominately produces

food grade, and another that predominately produces technical grade.52

DATA ON PRODUCT TYPES

Tables I-4 and I-5 provide data on U.S. shipments of both domestically produced product and of

U.S. imports of SHMP from China for each of the four major product categories of SHMP: food grade

(regular chain and long chain) and technical grade (regular chain and long chain).53 As shown, technical

grade, regular chain product comprised *** category for both domestically produced SHMP and subject

imported merchandise. However, *** U.S. imports of SHMP from China were categorized as technical

grade, long chain SHMP by importers in their responses to the portion of the questionnaire requesting
 54 See the section of this report entitled “Price Data” in Part V for information concerning how respondents

(particularly ***) classified their pricing data.

 55 Postconference brief, p. 22, citing petition exh. INJ-9 and exh. INJ-10.

 56 Postconference brief, p. 22.

 57 *** importer questionnaire response. *** reported a *** volume of “technical grade, long chain” shipments in

***; it indicated that the chain length of that product was ***.

I-10

Table I-4

SHMP: U.S. shipments of domestically produced product, by grade and by chain, 2004-06

* * * * * * *

Table I-5

SHMP: U.S. shipments of U.S. imports from China, by grade and by chain, 2004-06

* * * * * * *

data on imports by product type.54 Petitioners state that ***.55 Furthermore, according to petitioners, the

*** indicates that “***.”56 See the section of this report entitled “Nonsubject manufacturers” for

available information on the grades imported from nonsubject countries.

The following tabulation provides the P2O5 and chain length ranges used by ICL and Innophos in

their questionnaire responses to classify their data on SHMP into regular and long chain lengths:

* * * * * * *

The following importers, which accounted for the majority of U.S. imports from China, reported

the following P2O5 and chain length ranges for technical grade, regular chain in their questionnaire

responses: ***. *** states that chain length is a critical factor in that the substitution of alternative

lengths requires that end users adjust the formulas used to produce the end products. *** further

described Chinese-manufactured SHMP as “typically” 17 to 19 chain length compared to “available” U.S.

product of 10 to 12 chain length.57 As shown in the above tabulation, shipments of SHMP in the 17 to 19

chain length range was reported as “long-chain” SHMP by *** while ***. See the section of this report

entitled “Substitutability Issues” in Part II for additional information.
 1

 Conference transcript, pp. 83-84 (Moffatt).

 2

 One additional importer, *** sells out of inventory but maintains a lead time of 30 days.

 3

 The other two importers, ***, replied that their lead times for orders that are produced to order are 6 to 8 days

and 10 to 15 days. 

 4

 Petitioners’ postconference brief, p. 9.

 5

 Conference transcript, p. 58 (Kemp).

 6

 Ibid., p. 57 (Moffatt).

 7

 Ibid., p. 59 (Moffatt).

II-1

PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

CHANNELS OF DISTRIBUTION

SHMP is sold by ICL and Innophos to end users as well as distributors. Both producers and four

of 14 responding importers (***) sell SHMP on a nationwide basis. At least *** percent of each of the

domestic producers’ SHMP is sold to customers located greater than 100 miles but less than 1,000 miles

from the distribution center. The geographic market area served by the other 10 importers displays a

more regional focus. Of these 10, 5 serve the Midwest, 4 serve the Southeast, 3 each serve the Southwest

and West Coast, 2 each serve the Mid-Atlantic and Rocky Mountain regions, and 1 serves the Northwest. 

Importers shipped 36.6 percent of their SHMP to customers within 100 miles of their storage facility, 55.8

percent to customers located greater than 100 miles but less than 1,000 miles away, and 7.7 percent to

customers greater than 1,000 miles away. 

Most imports are brought into the United States by SHMP distributors. Only in very select

instances is imported SHMP resold to customers by ***. A representative of ICL noted that ICL

imported a small amount of SHMP from Germany.1

Lead Times

The average lead time for domestic producers and importers of SHMP is usually ***. Innophos

sells ***. ICL sells ***. Nine of 11 importers deliver their SHMP orders in 5 days or less for sales out of

inventory. These sales account for 69.4 percent of deliveries, based on a simple average.2

 The remaining

sales are produced to order, and four of six importers deliver SHMP in 6 to 12 weeks from the order.3

 

Internet Sales

No producer and only one responding importer replied that they sell SHMP via the internet. This

importer, (***), estimated that internet sales only account for one to three percent of its total sales. 

MARKET SEGMENTS

There are two grades of SHMP in the marketplace: technical grade and food grade. Food grade

SHMP has to meet stricter standards for quality and purity than technical grade SHMP by requiring

production adhering to Good Manufacturing Practices (GMP).4

 Innophos strives to run under food grade

conditions at all times, though there are times when it specifically is making technical grade SHMP.5

 ICL

has two furnaces - one that is dedicated more toward technical grade SHMP, and one that is dedicated

more toward food grade SHMP.6

 Food grade SHMP costs a little more to make due to increased costs

associated with extra lab analysis, storage of samples, and other administrative costs.7
 8

 ***.

 9

 Ibid.

 10 Conference transcript, p. 115 (Stachiw). See also table I-3.

 11 Conference transcript, pp. 60-63 (Treinen), p. 70 (Moffatt).

 12 Petition, pp. 11-12.

 13 Petition, p. 13

 14 According to SRI Consulting, water treatment makes up 40.7 percent of consumption of SHMP; other

industrial applications including clay mining, copper ore processing, drilling fluids, elastomers, and paper make up

22.5 percent; industrial institutional cleaners 16.8 percent; meat/seafood/poultry 15.3 percent; other consumer

products 3.5 percent; and dentifrices 1.2 percent. Long chain SHMP is most used in beverage and dental

applications. Petitioners’ postconference brief, p. 7.

II-2

In addition, due to SHMP’s chemical makeup, there are different types of SHMP that can be sold

in either grade, technical or food. SHMP is made up of a chain of phosphates, and this chain can be of

varying lengths. In the market, there are two typical types of SHMP sold: regular chain and long chain. 

Regular chain SHMP consists of approximately 10 links per molecule, whereas long chain consists of

about 20 links per molecule.8

 Different customers require different chain-length SHMP, which is based

on the end use and specific chemical formula. Some customers may require their SHMP ***.9

 Long

chain SHMP typically sells for a somewhat higher price than regular chain SHMP due to higher costs of

production. Long chain SHMP is typically used in meat, beverage, and some dairy applications, whereas

regular chain SHMP is typically used in more industrial applications, though there is not a clear line

defining each type’s uses.10

SUPPLY AND DEMAND CONSIDERATIONS

U.S. Supply

There were two producers of SHMP in the United States during the period examined. Both

responded to the Commission questionnaire. 

U.S. producers’ reported capacity to produce SHMP remained the same from 2004 to 2006. The

industry’s capacity utilization rate fluctuated, increasing from *** percent in 2004 to *** percent in 2005

before declining to *** percent in 2006. About *** percent less long chain SHMP can be produced than

regular chain SHMP per day.

U.S. producers’ export shipments have been decreasing compared to shipments to the U.S. and

other markets. On a quantity basis, the percentage of producers’ export shipments relative to their total

shipments decreased to *** percent in 2006 from *** percent in 2004. 

End-of-period inventories for U.S. producers of SHMP, as a ratio to total shipments, increased 

between 2004 and 2006 from *** percent to *** percent. At the conference, both petitioners noted that,

because of the production process which produces multiple types of SHMP in each production run,

inventory imbalances in one particular type of SHMP (powder, for example) can and have occurred.11

U.S. Demand

SHMP is an input into the production of many industrial and consumer products. Technical

grade SHMP is used in water treatment, personal care products (e.g., Calgon®), dental applications

(toothpaste and whiteners), and other industrial uses (kaolin, or clay, mining).12 Food grade SHMP is

used in manufactured beverages, fruit drinks, dairy, meat, and pet food.13 14 As such, the demand for

SHMP is a derived demand. According to a representative from Innophos, demand is projected to
 15 Conference transcript, p. 96 (Treinen). Petitioners also submitted a demand growth estimate for 2004-09 from

SRI Consulting of 1.7 percent per year with most of the growth occurring in the water treatment (2.7 percent) and

meat/seafood/poultry (3.9 percent) segments. Petitioners’ postconference brief, pp. 26-27.

 16 Conference transcript, p. 96 (Moffatt).

 17 One importer which noted a decrease in demand, ***, just described demand for its SHMP, not for the market

as a whole.

 18 The one importer responding “No,” however, did note that a Certificate of Analysis is provided with each

shipment, and that the SHMP must match customer specifications. 

 19 Conference transcript, pp. 21 and 118-19 (Treinen).

II-3

increase at about the rate of population or GDP growth, in the range of 1 to 2 percent per year.15 Also,

there are some segments that are seeing faster growth, such as the beverage segment, though this segment

is small.16 In all, four responding importers noted increasing demand for SHMP since 2004, three noted

unchanged demand, and two reported decreasing demand. Most of these responses were specific to an

end use market for SHMP, however. Increases were noted in kaolin mining, cheese/dairy, soaps/

detergents, and global potable water improvements. Decreases were noted by responding importers in

textile production.17 

When asked about changes in product range or marketing changes since 2004, one importer noted

that during the period under examination, long chain SHMP was discovered to have increased

performance in dairy/cheese applications. Another importer, ***, reported that in 2004, Innophos

developed the first direct substitute for polyacrylates. 

Cost Share

SHMP is a chemical that is typically part of a larger process or product. Both producers and two

importers gave estimates as to the cost share of end-use goods attributable to SHMP. *** reported that

SHMP accounts for 2 percent of the cost of meat processing, 1 to 2 percent of the cost of cheese

processing, and less than 1 percent for kaolin mining and other chemical uses. *** estimates are in line

with these: less than 1 percent for food, beverage, detergent, potable water, paper (clay), and paints and

coatings, and 3 percent in dental applications. *** estimated the cost share to be higher over all

applications: food, beverage, and clay fields less than 5 percent, water treatment 5 percent, and other

industrial uses 5 to 10 percent. 

Qualification/Certification

Both domestic producers of SHMP reported that *** of their sales require some sort of

certification or qualification. Of the 11 responding importers, 10 required qualification or certification for

at least some portion of their sales of SHMP.18 For six, it is required of all of their sales, and three others

reported needing qualification on 60, 80, and 80 to 90 percent of their sales of SHMP. Among the

different qualifications needed are those of the National Sanitation Foundation, the American Water

Works Association, the American National Standards Institute, the Underwriters Laboratories, the

International Organization for Standardization (“ISO”), and the Food Chemical Codex (for food grade

SHMP). A certificate of analysis is supplied with every shipment of SHMP to verify that it is the right

chemical.19 Qualification for a customer takes a variable amount of time. Domestic producers of SHMP

reported that qualification can take *** or ***. Importers’ responses noted the variability of the

qualification time. Among replies received, qualification could happen in one day, one week, four to six

weeks, two to four months, and three to six months. Importer *** did respond that qualifying for food

grade product takes about twice as long as regular certification or qualification. 
 20 ***.

II-4

Substitute Products

There are few substitutes for SHMP. Producers and importers were asked what other products

may be substitutes for SHMP. *** replied that there are no substitutes for SHMP that provide the same

“chelation, solubility and dispersion. Other phosphates can provide possible substitution but would

require adjustments in formulations, changes in processes, loss in functionality and potentially higher

cost.”20 *** singled out two possible substitutes: polyacrylates in kaolin mining and tetrapotassium

pyrophosphate (TKPP) in limited water treatment applications. *** stated, however, that the price of

these alternatives is higher than that of SHMP, so changes in their prices would have no effect on the

SHMP market. *** were three other possible chemical substitutes for SHMP in kaolin mining: 

tetrasodium pyrophosphate (“TSPP”), sodium tripolyphosphate (“STPP”), and polyacrylates. ***

responded that in 2005-06, acrylic acid supply was short, which drove up polyacrylate prices and

increased demand for SHMP by 7 million pounds. Most importers, though, replied that no substitutes

exist.

SUBSTITUTABILITY ISSUES

Interchangeability

Producers and importers of SHMP were asked if U.S.-produced SHMP and imported SHMP are

used interchangeably. Results are shown in tables II-1 and II-2.

Table II-1

SHMP: Producer responses to interchangeability between country pairs

* * * * * * *

Table II-2

SHMP: Importer responses to interchangeability between country pairs

Country pairs Always Frequently Sometimes Never No knowledge

U.S. - China1 42 40 2

U.S. - Other 3 1 0 0 2

China - Other 4 1 0 0 2

 1 *** responded both “frequently” and “sometimes,” based on the fact that for water treatment, the two

are interchangeable. For kaolin mining, though, it has found that *** works best for its customers, and if it

provided domestic SHMP to its customers, they would have to change their product formulas. 

Source: Compiled from data submitted in response to Commission questionnaires.

Importer *** noted that customers in the United States have preferences in terms of chain length,

which not all suppliers offer. It also stated that sometimes Chinese product tends to have more particulate

matter in it, and is often referred to as “dusty,” thus commanding a lower price. 
 21 A supply function is not defined in the case of a non-competitive market.

II-5

Non-Price Differences

Producers and importers were asked if differences other than price (i.e., quality, availability,

transportation network, product range, etc.) between SHMP produced in the United States and in other

countries were a significant factor in their sales of the products. Results are shown in tables II-3 and II-4.

Table II-3

SHMP: Producer responses to non-price differences between country pairs

* * * * * * *

Table II-4

SHMP: Importer responses to non-price differences between country pairs

Country pairs Always Frequently Sometimes Never No knowledge

U.S. - China 4 1 3 1 2

U.S. - Other 1 0 3 1 2

China - Other 1 0 2 2 2

Source: Compiled from data submitted in response to Commission questionnaires.

Importer *** replied that, to it, there is always a difference between domestic and Chinese

SHMP, since domestic producers will not sell to it. Importer *** stated that ***’s marketing and

distribution plans do not allow it to properly service its customer’s (***) requirements. Technical support

is available and the quality is very good from both China and Mexico, according to importer ***. In

noting frequent non-price differences, importer *** stated that chain length is a critical factor, as the

products are different at a molecular level. There are frequent differences between the Chinese SHMP

that it sells typically having a chain length of ***, as compared to a domestic chain length of ***. Also,

domestic producers have a broader portfolio of grades available, can meet customer’s special product

specifications, and can provide technical support and product advice to its customers, according to

importer ***. 

ELASTICITY ESTIMATES

U.S. Supply Elasticity21

The domestic supply elasticity for SHMP measures the sensitivity of the quantity supplied by

U.S. producers to changes in the U.S. market price of SHMP. The elasticity of domestic supply depends

on several factors including the level of excess capacity, the ease with which producers can alter capacity,

producers’ ability to shift to and from production of other products, the existence of inventories, and the

availability of alternative markets for U.S.-produced SHMP. 

In the short term, SHMP producers are likely to respond to changes in price with moderate

changes in the quantity shipped to the U.S. market. Supply responsiveness is inhibited by capacity

constraints *** and the inability to switch from producing other products, but is enhanced by the quantity

of inventory on hand, a moderate amount of exports, and a relatively short manufacture time. 
 22 During the staff field visit, representatives of Innophos noted that ***. Staff field trip report, Innophos,

February 26, 2007, p. 2.

 23 The substitution elasticity measures the responsiveness of the relative U.S. consumption levels of the subject

imports and the domestic like products to changes in their relative prices. This reflects how easily purchasers switch

from the U.S. product to the subject products (or vice versa) when prices change.

 24 Conference transcript, pp. 11-12 (Moffatt).

 25 ***.

 26 Staff field trip report, Innophos, February 26, 2007, p. 3.

 27 Conference transcript, p. 14 (Moffatt).

II-6

U.S. Demand Elasticity

The U.S. demand elasticity for SHMP measures the sensitivity of the overall quantity demanded

to a change in the U.S. market price of SHMP. This estimate depends on factors discussed earlier such as

the existence, availability, and commercial viability of substitute products, as well as the component share

of SHMP in the production of any downstream products. There are limited viable substitutes for SHMP

with respect to many uses, which limits demand elasticity. SHMP makes up a very small portion of the

final cost of the products into which it is incorporated, even chemical blends which are 10 to 20 percent

SHMP.22

Substitution Elasticity

The elasticity of substitution depends upon the extent of product differentiation between the

domestic and imported products.23 Product differentiation, in turn, depends upon such factors as quality

(both perceived and actual), grade, and conditions of sale. SHMP normally requires a certificate of

analysis in its applications. Petitioners noted that imported SHMP from China is qualified at many

purchasers that use technical grade SHMP, and that qualification is being secured at food grade

purchasers.24 There are, however, purchasers that have tested or tried to qualify Chinese material

unsuccessfully, or only have domestic producers qualified.25 ***.26 Generally, however, most purchasers

find that they can use the SHMP imported from China in place of domestic SHMP.27 Based on available

information, the elasticity of substitution between domestic and subject SHMP is likely to be somewhat

high for most applications due to the chemical nature of SHMP and the lab certification of chemical

content of SHMP. 
 1

 Nalco purchased the assets of Calgon, including its SHMP plant in Ellwood City, in 1999. Postconference brief,

p. 31, n.17.

 2

 ***. Postconference brief, p. 31, n.17. Nalco (Calgon) is also reported to purchase Chinese-manufactured

SHMP. Conference transcript, p. 41 (Treinen). 

 3

 ***.

 4

 ICL does not produce SHMP in Israel. Petition, AD exhibit 15.

 5

 Petition, p. 6.

 6

 Petition, pp. 2-3.

 7

 Conference transcript, pp. 57-59 (Moffatt, Kemp). The primary differences lie in the costs related to the

additional required laboratory analysis and extra administrative controls. Ibid.

 8

 Conference transcript, pp. 19-20 and 101-102 (Treinen). The plant shutdown lasted from *** to ***. ***. 

Postconference brief, p. 40, n.20. 

 9

 Postconference brief, p. 32. (Calculated as the difference between ICL’s reported capacity in 2003 and in

2004.)

III-1

PART III: U.S. PRODUCERS’ PRODUCTION, SHIPMENTS, AND

EMPLOYMENT

The Commission analyzes a number of factors in making injury determinations (see 19 U.S.C. §§

1677(7)(B) and 1677(7)(C)). Information on the alleged margin of dumping was presented earlier in this

report and information on the volume and pricing of imports of the subject merchandise is presented in

Parts IV and V. Information on the other factors specified is presented in this section and/or Part VI and

is based on the questionnaire responses of two firms, ICL (St. Louis, MO) and Innophos (Chicago, IL),

that accounted for *** U.S. production of SHMP during the period examined. A third producer, Nalco

Co. (“Nalco”), operated a SHMP plant in Ellwood City, PA,1

 until October 2003.2 ***.3

U.S. PRODUCERS

ICL is a *** subsidiary of Israel Chemicals Ltd., headquartered in Tel Aviv, Israel.4

 Innophos is

the successor to the specialty phosphates division of Rhodia, Inc., which was established as an

independent corporation in 2004 when it was acquired by Bain Capital.5

 ICL is described in the petition

as a leading manufacturer of phosphates, phosphoric acid, and phosphorus chemicals. Likewise,

Innophos is identified as a major producer of industrial grade phosphoric acid and phosphates.6

Responding firms’ positions on the petition, plant locations, and their production and shares of SHMP

production in 2006 are shown in table III-1. 

ICL maintains two separate SHMP furnaces at its Lawrence, KS plant, with one primarily

dedicated to the production of food grade and the other to manufacturing technical grade. The Innophos

Waterway Plant in Chicago, IL, has one furnace that is usually run continuously under food grade

conditions. Petitioners testified at the Commission’s conference that there are no significant cost

differences to producing to food grade standards.7

 Innophos shut down its furnace for an extended period

in the summer of 2006 due to reduced orders from about a dozen customers. The firm continued to

supply customers from inventory that was built up prior to the shutdown. Innophos did undertake some

maintenance work during the shutdown; however, the shutdown period was “significantly more” than

what would have been required by the maintenance alone.8

Until 2003, Astaris, the predecessor to ICL, operated a second plant in Trenton, NJ that had the

capacity to produce *** metric tons of SHMP on an annual basis.9

 The Trenton facility was permanently

shut down in November 2003; its equipment was scrapped or moved to different facilities. Petitioners 
 10 Conference transcript, pp. 11 and 28 (Cannon).

 11 Petitioners further stated in their postconference brief that “***.” Petitioners cite industry trends calculated

with figures for 2003 to support their argument. Domestic SHMP production for the 2003-06 period is shown

below:

* * * * * * * 

 12 ICL and Innophos’ producer questionnaire responses.

 13 Conference transcript, p. 83 (Moffatt).

 14 ICL’s producer questionnaire response, questions II-8 and II-14.

III-2

Table III-1

SHMP: U.S. producers, plant location(s), production, and shares of U.S. production in 2006

Firm Plant location Production

(metric tons) 

Share of

production

(percent)

ICL Performance Products LP1 Lawrence, KS2 *** ***

Innophos, Inc.3 Chicago, IL *** ***

 Total -- *** 100.0

 1 ICL is ***-percent owned by Israel Chemicals Ltd., Tel Aviv, Israel. ICL is related to BK Giulini (Germany), a

manufacturer of SHMP.

 2

 ICL also operates a technical center in Webster Groves, MS, for research and development of food and

technical grade phosphate salts and acids.

 3

 ***. Innophos is not related to any firms that also manufacture SHMP. 

Note.–***.

Source: Compiled from data submitted in response to Commission questionnaires.

testified at the Commission’s conference that Astaris had suffered a substantial loss in sales volume to

Chinese imports. ICL reported that it had attempted to operate both the Trenton plant and its Lawrence,

KS, facility “but we did not have sufficient orders to keep both plants operating at full capacity.” 

Petitioners further testified that imports from China filled the void left by the closure of the Trenton

plant.10 11

U.S. PRODUCERS’ IMPORTS AND PURCHASES

***.12 ICL did import a minute amount of a specialized grade of SHMP made by its affiliate in

Germany in 2005 to test whether it would be suitable for use in a downstream blend.13 ***.14

U.S. PRODUCERS’ CAPACITY, PRODUCTION, AND CAPACITY UTILIZATION

Data concerning U.S. producers’ SHMP capacity, production, and capacity utilization are shown

in table III-2. The calculation (and utilization) of capacity depends upon the mix of SHMP products

manufactured. As indicated earlier in the report, long chain SHMP requires more time in the furnace
 15 As indicated earlier, no products other than SHMP are manufactured by either firm in the furnace(s) and on the

equipment utilized to produce SHMP.

 16 Conference transcript, p. 10 (Moffatt) and pp. 81-82 (Treinen). ***.

 17 The gas-fired furnaces that manufacture SHMP typically burn at *** degrees centigrade. ***. 

 18 Staff telephone interview with counsel for petitioners, March 13, 2007.

 19 ***. ICL and Innophos’ producer questionnaire responses and e-mail from counsel to petitioners, March 13,

2007.

 20 ICL and Innophos’ producer questionnaire responses.

III-3

Table III-2

SHMP: Capacity, production, and capacity utilization, by firm, 2004-06

* * * * * * *

than regular chain product.15 Petitioners testified at the Commission’s conference that it is critical to run

plants at or near full capacity in order to be profitable. SHMP plants operate 24 hours a day, seven days a

week. Production lines are typically shut down only when the furnaces need to be relined at (optimally)

18-month intervals. More frequent shutdowns shorten the time interval for a re-build.16 Energy costs are

also a factor in operating capacity. Once the furnace is brought up to the required temperature level, it

needs to be maintained at that level.17

As shown in table III-2, capacity utilization remained at or below ***. ICL was not requested to

report separate capacity utilization rates for its two furnaces; ***.18 ***. Production of SHMP increased

by *** percent from 2004 to 2005 and then fell by *** percent from 2005 to 2006 for a period decrease

of *** percent. Capacity to produce SHMP in the United States was *** apparent U.S. consumption of

SHMP in each of the years 2004-06.

U.S. PRODUCERS’ SHIPMENTS

U.S. producers’ shipments of SHMP are presented in table III-3. As shown, the quantity of U.S.

producers’ commercial shipments followed a different trend than production in that commercial

shipments, measured by quantity, declined steadily throughout the period examined and did not rise (as 

did production) from 2004 to 2005. The decrease in commercial shipments was *** percent from 2004 to

2006, compared with the period decrease of *** percent in production. *** SHMP in the manufacture of

phosphate blends. Export shipments accounted for slightly over *** percent of total shipments in 2006.19

Internal consumption of SHMP and export shipments also fell from 2004 to 2006 by *** percent and ***

percent, respectively. The unit values of U.S. producers’ commercial shipments increased steadily from

2004 to 2006 for a net gain of $*** per metric ton. ***.20 

Table III-3

SHMP: U.S. producers’ shipments, by types and by firm, 2004-06

* * * * * * *

As shown in the following tabulation, counsel for petitioners indicated that ***:

* * * * * * *
 21 Conference transcript, p. 67 (Treinen).

 22 Conference transcript, pp. 20-21 and 62 (Treinen).

 23 Conference transcript, p. 70 (Moffatt).

 24 ***. Staff telephone interview with counsel for petitioners, March 13, 2007.

 25 Petition, p. 50.

 26 ICL and Innophos' producer questionnaire responses, question II-5.

III-4

The following tabulation presents the share of U.S. shipments made through distributors and to end users

by the domestic producers:

* * * * * * *

 

U.S. PRODUCERS’ INVENTORIES

U.S. producers’ inventories of SHMP are presented in table III-4. The domestic manufacturers

generally don’t produce SHMP to customer order but schedule runs based upon their inventory levels of

particular grades.21 As discussed earlier in the report, there is a proportional relationship between the

amount of granular product that is produced and the amount of powder. Petitioners testified at the

Commission’s conference that a producer must sell a balanced mixture of product textures in order to

operate efficiently; lost sales of one product texture will result in an unbalanced inventory. Innophos has

ended up with proportionally more granular (long chain) during the period examined. (While 

technologically possible, it is not cost-efficient to grind granular down to powder in an additional

production step.)22 ICL, in contrast, has ended up with proportionally more powder than granular

product.23 As indicated earlier, inventory has an 18-month shelf life. 

Table III-4

SHMP: U.S. end-of-period inventories, 2004-06

* * * * * * *

End-of-period inventories reported by the domestic manufacturers increased by *** metric tons

from 2004 to 2005 and by *** metric tons from 2005 to 2006. Likewise, the ratios of inventories to

production, U.S. shipments, and total shipments increased for each measure throughout the period

examined.

U.S. PRODUCERS’ EMPLOYMENT, WAGES, AND PRODUCTIVITY

The average number of PRWs producing SHMP are presented in table III-5. As shown, the

number of production and related workers was relatively stable while total hours worked, hours worked

per worker, wages paid, and hourly wages each increased steadily by *** percent, *** percent, ***

percent, and *** percent, respectively. Productivity and unit labor costs both fluctuated, with

productivity showing a net decline of *** percent from 2004 to 2006 while unit labor costs increased by

*** percent during the period examined. ***.24 Petitioners state that SHMP production is highly

automated and not labor intensive.25 ***.26

Table III-5

SHMP: Employment-related indicators, 2004-06

* * * * * * *
 1

 Sixteen firms on the mailing list imported from China and 10 firms imported from countries other than China.

 2

 Customs documents were available only through September 2006.

 3

 ***.

 4

 ***.

 5

 Additionally, ***. Staff telephone interview with ***.

 6

 Petitioners state that the “rising volume” of imports can be “traced” to Hubei Xingfa. Postconference brief, p.

12.

 7

 These “other” polyphosphates consist primarily of disodium pyrophosphate (sodium acid pyrophosphate) and

tetrasodium pyrophosphate. Conference transcript, p. 46 (Kemp).

IV-1

PART IV: U.S. IMPORTS, APPARENT CONSUMPTION, AND MARKET

SHARES

U.S. IMPORTERS

The subject product is imported by independently owned distributors. Importer questionnaires

were sent to 26 firms identified in Customs documents as entering more than minimal volumes of product

from any source1

 for the January 2004 through September 2006 period2 under the HTS number

(2835.39.5000) assigned to SHMP (along with certain other nonsubject polyphosphates). An additional

nine questionnaires were sent to firms identified in the petition as importers as well as to each of the U.S.

producers. Responding firms that were, in fact, importing SHMP are shown in table IV-1. All firms that

entered product from China under HTS number 2835.39.5000 returned questionnaires with the exception

of ***.3 4

 *** of the firms that were listed in the petition as importers only (i.e., that were not also

identified in Customs records) indicated that they, in fact, imported SHMP. Of the 10 questionnaires sent

to importers from nonsubject countries, 8 firms responded.5

Table IV-1

SHMP: U.S. importers’ reported subject U.S. imports in 2006, shares of the quantity of reported

subject U.S. imports, parent firm(s), and identified foreign manufacturer(s)

* * * * * * *

As shown both in Customs documents and in table IV-1, a relatively small number of importers

accounted for the majority of U.S. imports of SHMP from China. The most substantial U.S. importers of

subject merchandise from China during January 2006 to September 2006 in order of the quantity of their

U.S. imports recorded in Customs documents were: ***. According to year-end questionnaire data, ***

also imported a substantial volume of SHMP from China in 2006 (table IV-1). *** firms imported

product manufactured by Hubei Xingfa, although ***.6

U.S. IMPORTS

Calculation of U.S. Imports

Official (adjusted) Commerce statistics for SHMP are presented in table IV-2. As noted above,

the HTS number under which SHMP is entered (HTS 2835.39.5000) is a “basket” category that also

includes certain “other” polyphosphates.7

 Petitioners point out that U.S. imports entered under this 
IV-2

Table IV-2

SHMP: U.S. imports, by sources, 2004-06

Source Calendar year

2004 2005 2006

Quantity (metric tons)

China (subject) 19,695 22,901 21,017

Germany *** *** ***

Mexico *** *** ***

All other sources1 *** *** ***

 Subtotal, nonsubject 4,499 6,410 5,042

 Total 24,193 29,311 26,059

Value (1,000 dollars)

2

China (subject) 12,817 18,779 16,906

Germany *** *** ***

Mexico *** *** ***

All other sources1 *** *** ***

 Subtotal, nonsubject 3,456 6,553 6,804

 Total 16,273 25,332 23,710

Unit value (per metric ton)

2

China (subject) $651 $820 $804

Germany *** *** ***

Mexico *** *** ***

All other sources1 *** *** ***

 Subtotal, nonsubject 768 1,022 1,349

 Average 673 864 910

Share of quantity (percent)

China (subject) 81.4 78.1 80.7

Germany *** *** ***

Mexico *** *** ***

All other sources1 *** *** ***

 Subtotal, nonsubject 18.6 21.9 19.3

 Total 100.0 100.0 100.0

Table continued on the following page.
Table IV-2

SHMP: U.S. imports, by sources, 2004-06

Source Calendar year

2004 2005 2006

 8 Petition, p. 18, citing exhibits AD-14 (Declaration of Tim Treinen) and AD-15 (Declaration of Jim Moffatt).

 9

 Petition, pp. 18-19, citing exhibits AD-14 (Declaration of Tim Treinen) and AD-15 (Declaration of Jim

Moffatt).

IV-3

 Share of value (percent)

China (subject) 78.8 74.1 71.3

Germany *** *** ***

Mexico *** *** ***

All other sources1 *** *** ***

 Subtotal, nonsubject 21.2 25.9 28.7

 Total 100.0 100.0 100.0

 Ratio of imports to U.S. production (percent)

China (subject) *** *** ***

Germany *** *** ***

Mexico *** *** ***

All other sources1 *** *** ***

 Subtotal, nonsubject *** *** ***

 Total *** *** ***

 1 The countries included in “all other sources” consist of (ranked by the order of the quantity of imports in 2006

under HTS number 2835.39.5000): Belgium, France, Netherlands, Malaysia, Hong Kong, United Kingdom,

Thailand, India, Denmark, Korea, and Chile. Imports (over 1 metric ton in 2004 and 2005) were also reported from: 

Bulgaria, Australia, and Slovenia. 

 2

 Landed, duty-paid.

Source: Compiled from adjusted official Commerce statistics (HTS number 2835.39.5000) for all sources except for

Germany, which is questionnaire data.

reporting number from countries where SHMP is not produced would, by default, consist of nonsubject

polyphosphates. SHMP is reported by petitioners to not be produced in Canada, Iceland, Israel, and

Taiwan.8

 To identify SHMP imports from the remaining countries, petitioners analyzed average unit 

customs values and average unit landed cost values separately by month and by port. They stated that,

based on a comparison of these values to actual market prices and to the prices of imports from China,

reported imports from Japan and Spain under HTS number 2835.39.5000 also do not contain SHMP.9

 In

contrast, the average unit values of import data for China under the basket HTS were “indicative” of
 10 Petition, p. 19.

 11 Petition, p. 34. 

 12 Petition, pp. 38-39.

IV-4

SHMP.10 Petitioners also compared official Commerce data by port to ship manifest records11 and

concluded that imports from China under the basket category consist entirely or almost entirely of

SHMP.12

The following tabulation presents official Commerce statistics, in 2006, for all products (i.e.,

SHMP and “other” polyphosphates) under HTS number 2835.39.5000, organized by whether a country

has or has not been included within the import data for SHMP in this report:

Status Country Quantity

 (metric tons)

Share of

quantity

(percent)

Included as a source of SHMP

(subject)

China 20,649 52.9

Excluded on the basis of no known

production of SHMP

Canada 4,020 10.3

Iceland 93 0.2

Israel 5,933 15.2

Taiwan 511 1.3

Excluded on the basis of unit value

analysis

Japan 52 0.1

Spain1 602 1.5

Included as a source of SHMP

(nonsubject)

Germany2 2,511 6.4

Mexico 2,636 6.7

All others 2,046 5.2

Imports under HTS 2835.39.5000 Total 39,053 100.0

 1 ***. On the basis that (1) *** and (2) petitioners’ assertions that the unit values for Spain are an indication that

the U.S. imports under the basket are not primarily SHMP, staff has also excluded Spain from the data compiled

on U.S. imports. Staff similarly excluded Japan, for which imports are minimal.

 2

 The majority of U.S. imports from Germany entered under the basket category were, in order of their volume

of imports, imported by ***. Each of these firms either returned an importer questionnaire or otherwise provided

information to the Commission on its imports. ***.

Note.–Total U.S. imports from all countries under the basket HTS number were 39,053 metric tons in 2006. Total

U.S. imports from all countries other than those excluded as an entity (i.e., Canada, Iceland, Israel, Taiwan, Japan,

and Spain) are 27,842 metric tons. Total U.S. imports of SHMP after the basket HTS number is further adjusted to

exclude reported imports of nonsubject merchandise but to include misclassified subject merchandise) are 26,059

metric tons in 2006, as shown in table I-2 (also see below).

As shown above, Commission staff has supplemented information presented in the petition with that

obtained from importer questionnaire responses and through staff telephone interviews (see notes to the

above tabulation) and adjusted official Commerce statistics to exclude all reported imports from Canada,

Iceland, Israel, Taiwan, Japan, and Spain, but not from Germany.
 13 ***.

 14 The petition also presents import data for 2003. In 2003, 14,411 metric tons of product that petitioners believed

consisted of SHMP was imported from China under HTS number 2835.39.5000. See petition, attachment INJ-1.

 15 The following tabulation shows U.S. imports from China compiled directly from importer questionnaire data:

Item 2004 2005 2006

Quantity (metric tons) 17,506 20,860 21,126

Value ($1,000) 11,193 16,462 16,091

Unit value (per metric ton) $639 $789 $762

U.S. imports of SHMP from China, when calculated using questionnaire data instead of adjusted Commerce

statistics, also increased by quantity from 2004 to 2005, but instead of decreasing in the next year, rose slightly from

2005 to 2006 for a period increase of 20.7 percent.

 16 Petition, p. 38.

 17 ***'s importer questionnaire response, ***.

IV-5

Commission staff next adjusted official Commerce statistics to subtract importer questionnaire

data reported for “non-SHMP” products imported under HTS number 2835.39.5000 for China, Mexico,

and the United Kingdom,13 as shown in the following tabulation:

* * * * * * *

U.S. Import Trends

U.S. imports of SHMP from China rose by quantity from 2004 to 2005 and then decreased

slightly from 2005 to 2006 for a period increase of 6.7 percent (table IV-2).14 15 Nonsubject imports

likewise rose from 2004 to 2005 and then fell from 2005 to 2006 for a period increase of 12.1 percent.

Mexico is the most significant source of product from nonsubject countries; the quantity of imports from

Mexico increased by about *** metric tons from 2004 to 2005 and then fell by *** metric tons from 2005

to 2006.

Petitioners note the slight decrease in U.S. imports of subject merchandise from 2005 to 2006 (in

official Commerce statistics for HTS number 2835.39.5000) and state that “imports of Chinese SHMP

declined in the first half of 2006, apparently due to inventory build up.”16 *** indicated in its

questionnaire response that: “***.”17 Table IV-3 presents U.S. imports under HTS number 2835.39.5000

for the January 2004-December 2006 period, by month, for China and Mexico.
IV-6

Table IV-3

Sodium hexametaphosphate: U.S. imports from China and Mexico, by month, 2004-06

Month

Calendar year

2004 2005 2006

China Mexico China Mexico China Mexico

Quantity (metric tons)

January 1,368 210 1,611 426 2,458 175

February 2,159 86 769 366 1,529 477

March 1,566 149 521 475 1,017 284

April 1,170 217 1,073 468 1,411 157

May 996 175 2,213 442 1,299 435

June 2,449 335 2,695 366 1,470 205

July 1,142 226 2,542 431 1,168 205

August 1,564 206 3,550 678 1,825 344

September 1,651 226 1,772 525 1,381 164

October 1,905 422 1,912 399 2,184 40

November 1,417 342 1,774 465 2,760 97

December 1,730 384 1,754 718 2,149 53

 Total 19,115 2,979 22,187 5,758 20,649 2,636

Note.–The following U.S. imports were entered under HTS number 2835.39.5000 for January 2007: 2,643 metric

tons from China and 40 metric tons from Mexico. 

Source: Compiled from official Commerce statistics (HTS number 2835.39.5000).

The Question of Negligible Imports

The following tabulation presents official Commerce statistics for the 12-month period February

2006 through January 2007:

Item China All other1 Total1

Quantity in metric tons, except as noted

U.S. imports 20,836 4,613 25,449

 1 Excludes Canada, Germany, Iceland, Israel, Japan, Spain, and Taiwan.

Source: Compiled from official Commerce statistics (HTS number 2835.39.5000).
 18 The statute (section 771(24)(A)(i) of the Act) provides that imports from a subject country corresponding to the

domestic like product are negligible if such imports account for less than 3 percent of the volume of all such

merchandise imported into the United States in the most recent 12-month period for which data are available that

precedes the filing of the petition - in this case February 2006 through January 2007. 

IV-7

As indicated above, imports of SHMP from China accounted for 81.9 percent of total U.S. imports.18

APPARENT U.S. CONSUMPTION AND U.S. MARKET SHARES

The actual flow of product to distributors or end users within the U.S. market (i.e., apparent U.S.

consumption) is best measured by U.S. shipments of both domestic producers and U.S. importers. 

Frequently U.S. import data are used as a proxy for U.S. importers’ U.S. shipments when the latter data

are not available or, as is often the case, not complete. As was discussed earlier in this section, data from

U.S. importers of SHMP from China are believed to be substantially complete. Further, as will be

discussed in part VII of this report, inventories held by U.S. importers were reported to fluctuate within

the period examined. Any fluctuation in inventory levels will result in a corresponding distortion in

apparent U.S. consumption if it is calculated using import data and not importers’ U.S. shipments. As

shown in table IV-4, U.S. imports from China (whether compiled from adjusted Commerce statistics or

directly from importer questionnaires) rose from 2004 to 2005 (while U.S. shipments of imports from

China remained comparatively level). From 2005 to 2006, U.S. imports from China either declined

slightly (if calculated from adjusted Commerce statistics) or increased slightly (if calculated directly from

importer questionnaires), while U.S. shipments of imports from China rose by a more substantial volume.

Table IV-4

SHMP: Comparison of available data on U.S. imports from China and U.S. shipments of imports

from China

Data source 2004 2005 2006

Percentage change

2004-05 2005-06 2004-06

Quantity (metric tons) Percent

Commerce statistics for HTS number

 2835.39.50001 19,115 22,187 20,649 16.1 - 6.9 8.0

Adjusted Commerce statistics1 19,695 22,901 21,017 16.3 - 8.2 6.7

Importer questionnaires:

 U.S. imports 17,506 20,860 21,126 19.2 1.3 20.7

 U.S. shipments of imports *** *** *** *** *** ***

 1 As noted earlier, adjusted Commerce statistics are higher than Commerce statistics for HTS number 2835.39.5000 due to the

misclassification of subject merchandise by ***.

Apparent U.S. consumption was, for the purposes of this report, calculated using U.S. importers’ U.S.

shipments of SHMP from China, and U.S. imports for all other sources.

Table IV-5 presents the apparent U.S. consumption of SHMP for the period examined. U.S.

apparent consumption, in terms of quantity, was relatively level from 2004 to 2006 while consumption, in

terms of value, increased steadily. U.S. producers’ market shares, in terms of quantity, declined

throughout the period examined, for a net fall of *** percentage points (table IV-6). The market share of
IV-8

subject U.S. imports was almost level from 2004 to 2005 and then rose *** in 2006 for a period increase

of *** percentage points. The market share of U.S. imports of nonsubject SHMP (particularly from

Mexico) rose *** from 2004 to 2005 but then declined in 2006 for a period increase of *** percentage

point. In summary, the decline in U.S. producers’ market share from 2004 to 2005 was offset by a rise in

the market share of nonsubject imports (in particular, Mexico) while the fall in U.S. producers’ market

share from 2005 to 2006 was offset by a rise in the market share of U.S. imports of SHMP from China

that was large enough to virtually offset the declining share of the U.S. market reported for product

imported from Mexico in 2006 (compared to 2005).

Table IV-5

SHMP: U.S. shipments of domestic product, U.S. imports, by source, and apparent U.S.

consumption, 2004-06

* * * * * * *

Table IV-6

SHMP: Apparent U.S. consumption and market shares, by source, 2004-06

* * * * * * *
 1

 Staff field trip report, Innophos, February 26, 2007, p. 2.

 2

 Petitioners’ conference exhibit, p. 3.

 3

 The 20.5-percent figure is for all goods included in HTS subheading 2835.39.50 in 2006. 

V-1

PART V: PRICING AND RELATED INFORMATION

FACTORS AFFECTING PRICES

Raw Material Costs

The main raw materials used to make SHMP are wet phosphoric acid and soda ash or caustic

soda. SHMP also requires the use of very high temperatures, so energy is an important part of the

production process. One domestic producer uses ***.1

 At the conference, petitioners testified that prices

for raw materials have been increasing, though the price of natural gas has decreased since 2005.2

Altogether, raw material costs accounted for approximately *** percent of the cost of goods sold in 2006.

Tariffs and Transportation Costs

Transportation costs for SHMP from China to the United States (excluding U.S. inland costs) are

estimated to be approximately 20.5 percent of the customs value for SHMP.3

 These estimates are derived

from official import data and represent the transportation and other charges on imports valued on a c.i.f.

basis, as compared with customs value. There is a 3.7 percent tariff on all SHMP imported to the United

States under this tariff subheading for countries, such as China, with normal trade relations.

The producers and importers of SHMP were asked to estimate the cost of U.S. inland

transportation of their products. Domestic producers noted that transportation costs are between *** and

*** percent of the final cost of their product. Seven of 11 responding importers estimated domestic

transport costs to be between 2 and 5 percent ***. The remaining four importers estimated domestic

transportation costs to be in the range of 7 to 12 percent.

Exchange Rates

Quarterly data reported by the Federal Reserve Bank of St. Louis indicate that the nominal value

of the Chinese yuan remained stable relative to the U.S. dollar from January 2004 to the middle of 2005

(figure V-1). Since then, the Chinese yuan has been appreciating against the dollar, and was 6.1 percent

stronger in the first two months of 2007 relative to its value in the first three months of 2004. 
 4

 Importer *** did not provide data with respect to percentage sold via long-term contract, short-term contract,

and on the spot market, but did include data about its long-term contracts.

V-2

Figure V-1

Exchange rates: Index of the nominal exchange rate of the U.S. dollar relative to the Chinese yuan,

by quarters, January 2004-February 2007

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B

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St

. Louis, retrieved from http://research.stlouisfed.org/fred2/series/EXCHUS, last accessed March 14, 2007.

PRICING PRACTICES

Pricing Methods

***. *** customers in the spot market, ***. ***. Nine of the 12 responding importers noted that

they determined price by transaction-by-transaction negotiation. The remaining three determine prices

based on costs and/or market conditions. 

Producer Innophos sells *** percent of its SHMP via *** contracts, with the remainder on the

spot market. ICL sells *** percent of its SHMP via *** contracts, *** percent via *** contracts, and ***

percent on the spot market. Of the ten responding importers, five sell via long-term contracts (of one year

or greater), five via short-term contracts (of between one month and one year), and eight on the spot

market. Only importer *** does not sell on the spot market, as all of its sales are via long-term contract,

though it renegotiates prices every six months.4

 On a simple average basis, 30.1 percent of imported

SHMP is sold via long-term contracts, 19.8 percent via short-term contracts, and 50.1 percent on the spot

market. 

Typical long-term contracts are one year in length, though one importer replied that its contracts

are up to three years in length. As noted by a majority of importers responding to these questions, typical

long-term sales contracts fix both price and quantity (though reportedly some prices can be renegotiated

during the contract), and do not contain meet-or-release provisions. *** long-term contracts are similar,

though the price usually cannot be renegotiated during the contract period. Producers and importers

described typical short-term contracts as also fixing price and quantity, though no firm reported price
 5

 Innophos’ producer questionnaire response, section ***.

 6

 ICL used to ship on a “freight-equalized” basis, i.e., quoting shipping charges at the same point as Innophos to

equalize any differences, but ICL has had to absorb the cost recently. Conference transcript, p. 13 (Mr. Moffatt).

 7

 ***.

V-3

renegotiation during the contract. Meet-or-release provisions are atypical in short-term contracts for all

firms except importer ***.

Sales Terms and Discounts

Payments in the SHMP industry are due within 30 days for both importers and producers. ***,

but also will ***. Producer Innophos ***.5

 No responding importer offers discounts on SHMP, with the

exception of two which offer a 1-percent discount for payment within 10 days. Three importers sell on an

f.o.b. basis, four on a delivered basis, and three on either an f.o.b. or delivered basis. Domestic producers

ship on a delivered basis.6

 Delivery is arranged by producers and importers for all firms but two

responding importers. 

PRICE DATA

The Commission requested U.S. producers and importers of SHMP to provide quarterly f.o.b.

data for the total quantity and value of SHMP that was shipped to unrelated purchasers in the U.S. market. 

Data were requested for the period January 2004 to December 2006. Pricing data were requested for the

following four product categories:

Product 1.–Sodium hexametaphosphate, technical grade, regular chain

Product 2.--Sodium hexametaphosphate, technical grade, long chain

Product 3.–Sodium hexametaphosphate, food grade, regular chain

Product 4.--Sodium hexametaphosphate, food grade, long chain

 In all, usable pricing data were received from two U.S. producers and 12 importers. Pricing data

for SHMP imported from China were received from nine of these importers. Pricing data reported by

these firms accounted for *** percent of U.S. producers’ shipments of SHMP and 102.4 percent of U.S.

shipments of subject imports from China in 2006. Pricing data for products 1 through 4 are shown in

tables V-1 to V-4 and figures V-2 to V-5.7

 Pricing data for imports of SHMP from nonsubject countries

are presented in appendix D.

Price Trends

In general, prices trended upward during the period examined. For domestic SHMP, prices of

three of the four products increased irregularly. The greatest increase in price was for product ***, which

increased by *** percent between the first quarter of 2004 and the last quarter of 2006. Prices for

domestic product ***, however, ***, though this is mostly due to a ***-percent decline in the last quarter

of the period examined. Prices for sales of SHMP imported from China also rose irregularly from 2004 to

2006, by *** percent (product ***) to *** percent (product ***). See tables V-1 to V-4 and figures V-2

to V-5 for more detailed information.
 8

 This decline in prices was ***.

 9

 One importer accounted for ***. It estimated all of its shipments for 2004-06, but noted that 2006 was a

particularly bad year for being able to track and attribute accurately its inland shipping costs to its warehouse so an

average method for 2006 would be the most accurate way to compute prices, as its computer system is not equipped

to accurately attribute these costs on a quarterly basis. Staff interview with ***. 

V-4

 In terms of pricing for technical grade SHMP, pricing for product 1 imported from China

increased from the first quarter of 2004 through the second quarter of 2005, and has since declined. 

Prices for domestically produced product 1 were generally rising until the first half of 2006, but have also

declined since that time. Prices for product 2 imported from China also were rising from the beginning of

the period examined until the first half of 2006, after which they decreased ***. Domestically produced

product 2 was also subject to generally increasing prices through most of the period examined, but

suffered a *** percent decrease in price in the fourth quarter of 2006.8

For food grade SHMP, pricing for domestically produced products 3 and 4 rose somewhat

cyclically. While prices for the most part were rising, there were never four consecutive quarters of

increasing or decreasing prices. Pricing for product 3 imported from China decreased *** in the first and

second quarters of 2006, but rose in the third and fourth quarters to a level above that of the previous

year. The price of product 4 imported from China was highest in 2005, with a *** decline in 2006.9

 

Table V-1

SHMP: Weighted-average quarterly f.o.b. prices, quantities, and margins of underselling/

(overselling) for domestic and imported product 1,1

 January 2004-December 2006

Period

United States2 China3

Price

(per pound)

Quantity

(pounds)

Price

(per pound)

Quantity

(pounds)

Margin

(percent)

2004:

 January-March $*** *** $0.31 2,847,684 ***

 April-June *** *** 0.33 2,232,528 ***

 July-September *** *** 0.35 1,572,161 ***

 October-December *** *** 0.40 2,362,385 ***

2005:

 January-March *** *** 0.38 881,885 ***

 April-June *** *** 0.47 1,326,661 ***

 July-September *** *** 0.44 2,944,663 ***

 October-December *** *** 0.43 2,943,004 ***

2006:

 January-March *** *** 0.43 5,002,352 ***

 April-June *** *** 0.40 4,307,107 ***

 July-September *** *** 0.39 3,221,444 ***

 October-December *** *** 0.41 2,283,377 ***

Notes on the following page. 
V-5

Continuation.

 1 Product 1 consists of sodium hexametaphosphate, technical grade, regular chain. 2 Relevant data submitted by ***. 3 Relevant data submitted by ***.

Source: Compiled from data submitted in response to Commission questionnaires.

Table V-2

SHMP: Weighted-average quarterly f.o.b. prices, quantities, and margins of underselling for

domestic and imported product 2, January 2004-December 2006

* * * * * * *

Table V-3

SHMP: Weighted-average quarterly f.o.b. prices, quantities, and margins of underselling for

domestic and imported product 3, January 2004-December 2006

* * * * * * *

Table V-4

SHMP: Weighted-average quarterly f.o.b. prices, quantities, and margins of underselling/

(overselling) for domestic and imported product 4, January 2004-December 2006

* * * * * * *

Figure V-2

SHMP: Weighted-average quarterly f.o.b. prices of domestic and imported product 1, 

January 2004-December 2006

* * * * * * *

Figure V-3

SHMP: Weighted-average quarterly f.o.b. prices of domestic and imported product 2, 

January 2004-December 2006

* * * * * * *

Figure V-4

SHMP: Weighted-average quarterly f.o.b. prices of domestic and imported product 3, 

January 2004-December 2006

* * * * * * *

Figure V-5

SHMP: Weighted-average quarterly f.o.b. prices of domestic and imported product 4, 

January 2004-December 2006

* * * * * * *
V-6

Price Comparisons

The imported SHMP from China undersold the domestic products in 45 of 48 quarters in which

comparisons were possible. All of the overselling occurred in products 1 and 4 in 2004 and 2005. A

detailed summary of margins of overselling and underselling is presented in table V-5.

Table V-5

SHMP: Number of quarters of underselling and overselling and highest and lowest margin of

underselling and overselling, by product

Products

Number of

quarters of

underselling

Number of

quarters of

overselling

Lowest

margin of

underselling

Highest

margin of 

underselling

Lowest

margin of

overselling

Highest

margin of

overselling

China

Product 1 11 1 7.2 24.9 0.9 0.9

Product 2 12 0 15.3 37.5 -- --

Product 3 12 0 24.1 51.9 -- --

Product 4 10 2 0.8 21.5 0.6 1.3

Source: Compiled from data submitted in response to Commission questionnaires.

LOST SALES AND LOST REVENUES

The Commission requested U.S. producers of SHMP to report any instances of lost sales or

revenues they experienced due to competition from imports of SHMP from China since January 2004. 

Both U.S. producers ICL and Innophos reported in the petition that they had lost sales and reduced prices

in order to keep sales. The Commission contacted all purchasers named in the allegations. The

allegations are shown in tables V-6 and V-7. Purchaser comments follow each table.

Table V-6

SHMP: U.S. producers’ lost sales allegations

* * * * * * *

*** disagreed with ***. ***. Additionally, *** explained that it ordered *** pounds of food

grade SHMP during 2006 from *** and would have purchased a larger quantity, but ***. 

*** disagreed with the allegation and submitted a letter stating that its total sales for the period of

*** were “significantly less than half of the referred to quote.” 

*** agreed with the allegation and reported the number, type, and price of bags that it purchased.

*** disagreed with ***. ***. The *** were agreed to by ***. With respect to the ***, ***

disagreed with ***. The domestic producer lost sales to *** due to *** for the ***. For ***, business

was lost to imports from Mexico, not China. 

***.

*** partially agreed with the lost sales allegation. Though the quantity was correct, the accepted

import price was not correct.
 10 Staff interview with ***.

 11 Staff telephone interview with ***.

V-7

*** disagreed with the lost sale allegation. It runs two different applications with SHMP. It uses

U.S.-produced SHMP for one and Chinese SHMP for the other. It purchased less U.S.-produced SHMP

in ***, but did not replace it with Chinese SHMP. It does not commingle its SHMP.10

*** agreed with the allegation, noting that as a competitor in the world *** market, it needs to

seek out the most competitive price on its inputs.

*** disagreed with the lost sales allegation, stating that there was no such quote offered for

SHMP by a domestic producer.

*** also disagreed with the alleged lost sale, mainly for the reason that the time frame was

incorrect. It has no documentation of a bid during the ***, nor any reason to bid at that time, since its

agreements start in ***. *** did not purchase SHMP at the alleged import price in 2006. It does have a

quote from *** from a domestic producer at the alleged rejected price.

Table V-7

SHMP: U.S. producers’ lost revenues allegations

* * * * * * *

*** disagreed with ***. Accordingly, revenues were not lost by reason of imports from China.

*** replied that there is no one at the present firm that can answer the question due to staff

turnover.

*** disagreed with the lost revenue allegation. When the supplier tried to increase prices, ***

representative rejected the increase, stating that it would have to seek other sources if the increase went

through as announced. There was no competitive offer known or being considered.

*** disagreed with the lost revenue allegation. The test run of Chinese material had quality

issues that could not be overcome, and *** rejected the imported SHMP based on quality. After it tried

the Chinese material, it went right back to using domestic SHMP. Around this time, *** began to talk

with the domestic producer’s representative about ***.11
 
 1

 Petitioners’ postconference brief, p. 34.

 2

 E-mail from ***, March 2, 2007.

 3

 Petitioners’ postconference brief, p. 34.

 4

 Petitioners’ postconference brief, exh. 15.

 5

 ICL’s producer questionnaire, questions III-6 to III-9, and petitioners’ postconference brief, p. 34 and exh. 15.

VI-1

PART VI: FINANCIAL EXPERIENCE OF U.S. PRODUCERS

BACKGROUND

ICL and Innophos, which together accounted for *** of the U.S. production of SHMP during

2004-06, supplied financial data on their SHMP operations. ICL, an affiliate of Israel Chemicals Limited

(total 2005 sales of $3.0 billion), reported sales and costs relating to production of SHMP at its Lawrence,

KS facility. Innophos, which was created when Rhodia sold its specialty phosphates division to Bain

Capital in 2004, reported sales and costs relating to production of SHMP at its Waterway Plant in

Chicago, IL. Total net sales for Innophos in 2005 were $536 million. *** of their SHMP ranging from

between *** and *** percent of both value and quantity annually. The unit sales values of the ***

product were very similar to the unit sales value of ***.

ICL and Innophos both have fiscal years ending December 31.

OPERATIONS ON SHMP

Aggregate income-and-loss data for the U.S. producers are presented in table VI-1 while selected

financial data for the individual producers are presented in table VI-2. The financial results of the

domestic SHMP industry grew steadily worse from 2004 to 2006, as net sales quantities and values

declined by approximately *** and *** percent, respectively. While the unit sales price increased by

$*** per metric ton from 2004 to 2006, this only partially offset even ***. Thus, the *** levels in 2004

deepened each subsequent year.

Table VI-1

SHMP: Results of U.S. producers’ operations, fiscal years 2004-06 

* * * * * * *

Table VI-2

SHMP: Selected financial data, by firm, fiscal years 2004-06 

* * * * * * *

The individual results for both ICL and Innophos (table VI-2) are ***. ICL reported ***

decreases in sales quantities (*** percent) and increases in unit sales values (*** percent) that *** each

other, resulting in *** sales revenues. ICL also reported increases in unit costs from 2004 to 2006,

particularly *** ($***). Unit factory costs increased *** partially because of increases in natural gas

costs ($***)1

 and partially because increased *** were spread over fewer units of output.2 The increase in

raw material costs was ***.3

 As ICL’s costs *** its revenues, its ***. Of the two primary input materials

– *** – ICL *** of its phosphoric acid from *** in 2006.4

 These *** and did not distort ICL’s costs.5

Innophos also reported *** decreases in sales quantities (*** percent) and increases in unit sales

values (*** percent), but ***, its sales revenues declined. Its unit costs also increased, although ***. The

company reported *** as its unit costs *** its unit sales prices. Unit raw materials costs increased by
 6

 Petitioners’ postconference brief, p. 34.

 7

 Innophos *** the absolute level of its other factory costs by *** percent from 2004 to 2006, but its 2006 sales

quantities were *** percent *** than 2004 levels. Producer questionnaire, question III-11.

 8

 These ratios are based upon ICL’s and Innophos’ responses to question II-11 of the producer questionnaire,

which asks for quantities and values of domestic shipments of food grade, technical grade, and other grades of

SHMP. On a quantity basis, ICL’s domestic shipments accounted for *** to *** percent of its total shipments and

Innophos’ domestic shipments accounted for *** to *** percent of its total shipments. The regular chain/long chain

ratios are based upon identifiable regular and long chain shipment data, which accounted for *** to *** percent of

ICL’s total shipments and *** to *** percent of Innophos’ total shipments. 

 9

 According to ***, food grade SHMP costs $*** per metric ton more than technical grade SHMP. Innophos

indicated its long chain SHMP cost $*** per metric ton more than its regular chain SHMP, while ICL indicated the

difference was $*** per metric ton. Postconference brief, pp. 36-37.

 10 Producer questionnaire, question II-13.

 11 Conference transcript, pp. 57 (Moffatt) and 58 (Kemp) .

 12 Producer questionnaires, question II-9.

 13 Compare ICL’s cost of $*** (postconference brief, p.34) with Innophos’ cost of $*** (e-mail response from

Jim Cannon, March 15, 2007).

 14 Producer questionnaire, question II-2.

VI-2

$***, approximately *** of which was attributable to increases in *** costs with the remaining ***

attributable to increases in *** costs;6

 unit other factory costs increased by $***, *** because *** costs

were *** of output;7

 unit SG&A costs increased by $***; and unit labor costs increased by $***. 

Innophos *** of its primary input materials from unrelated parties.

ICL and Innophos shared operational similarities and differences. Both companies produce a

***. Based upon domestic shipment data, ICL’s average 2004-06 ratio for sales of *** SHMP was ***,

while Innophos’was ***; ICL’s ratio of regular and long chain SHMP was *** and Innophos’ was ***.8 9

Additionally, both companies manufacture SHMP using *** technology.10 ICL has two furnaces, one for

food grade and one for technical grade, while Innophos has just one furnace.11

Despite these similarities, *** was *** (see the discussion in Part III of this report regarding

these differences). Also, ICL’s *** was ***. The largest single reason for this *** seems to be that ICL

*** (total capacity of approximately *** metric tons) while Innophos *** (capacity *** metric tons).12

For example, in 2006, ICL’s unit *** costs were $***13 than Innophos’. While part of this *** might be

attributable to the fact that ***,14 and thus did not *** rates, part is probably also attributable to ***

between the two companies.

 The variance analysis showing the effects of prices and volume on the producers’ sales of SHMP,

and of costs and volume on their total cost, is shown in table VI-3. The analysis confirms that the

decrease in operating income is the result of ***. The summary at the bottom of the table illustrates that

from 2004 to 2006 the effect of *** was more than offset by ***; increases in *** accounted for most of

the total cost increase.

Table VI-3

SHMP: Variance analysis of operations of U.S. producers, fiscal years 2004-06

* * * * * * *
VI-3

Capital Expenditures and Research and Development Expenses

 The capital expenditures and research and development (R&D) expenses for ICL and Innophos

are presented in table VI-4. Capital expenditures were the *** for the domestic industry (table VI-1), an

indication that the domestic industry is ***. 

Table VI-4

SHMP: Capital expenditures and R&D expenses, fiscal years 2004-06

* * * * * * *

*** R&D expenses.

Assets and Return on Investment

ICL’s and Innophos’ assets and their return on investment are presented in table VI-5. The book

value of the producers’ productive assets was ***, while the total value of the assets utilized in the

production, warehousing, and sale of SHMP increased *** from 2004 to 2006. At the same time, the ***

return on the assets *** as the operating *** increased.

Table VI-5

SHMP: Value of assets and return on investment, fiscal years 2004-06

* * * * * * *

Capital and Investment

The Commission requested U.S. SHMP producers to describe any actual or potential negative

effects on their return on investment, or their growth, investment, ability to raise capital, existing

development and production efforts, or the scale of capital investments as a result of imports of SHMP

from China. The firms’ comments are as follows:

Since January 1, 2004, has your firm experienced any actual effects on its return on investment,

growth, investment, ability to raise capital, existing development and production efforts

(including efforts to develop a derivative or more advanced version of the product), or the scale

of capital investments as a result of imports of SHMP from China?

ICL ***

Innophos ***

Does your firm anticipate any negative impact of imports of SHMP from China?

ICL ***

Innophos ***
 
 1

 Postconference brief, exh. 6.

 2

 One response was received from an exporter (***). *** exports SHMP manufactured by Hubei Xingfa

Chemicals Group Co., Ltd. (Hubei Xingfa). In addition, *** has inquired about entering a notice of appearance. Email from ***.

 3

 Petition, p. 18.

 4

 Petition, p. 18, and postconference brief, exh. 6.

 5

 HighBeam Research, Inc., China Chemical Reporter, October 26, 2005, attached as exh. 11 to the

postconference brief.

 6

 Postconference brief, p. 44.

 7

 Postconference brief, p. 47.

VII-1

PART VII: THREAT CONSIDERATIONS

The Commission analyzes a number of factors in making threat determinations (see 19 U.S.C. §

1677(7)(F)(i)). Information on the volume and pricing of imports of the subject merchandise is presented

in Parts IV and V; and information on the effects of imports of the subject merchandise on U.S.

producers’ existing development and production efforts is presented in Part VI. Information on

inventories of the subject merchandise; foreign producers’ operations, including the potential for

“product-shifting;” any other threat indicators, if applicable; and any dumping in third-country markets,

follows.

THE INDUSTRY IN CHINA

In contrast to the relatively limited number of SHMP manufacturers in the United States,

numerous companies produce the subject product in China.1

 The Commission sent foreign producer

questionnaires to 31 companies in China that were identified in the petition, Customs documents, and/or

public sources as either producing SHMP or exporting the product to the United States. No producers

provided data in response to the foreign producer questionnaire.2

 The petition identified Hubei Xingfa Chemicals Group Co. as the largest source for Chineseproduced SHMP that is exported to the United States.3

 Attached to the petition (as exhibit AD-5) is an

excerpt from Hubei Xingfa’s website that describes the firm’s fully integrated production operations. 

Hubei Xingfa first mines phosphate rock and then converts the ore to the elemental phosphorus that is

then processed into the upstream phosphoric acid used to produce SHMP. Most Chinese producers,

however, are not integrated but begin the manufacturing process either with elemental phosphorus (which

is then converted to phosphoric acid) or directly with locally purchased phosphoric acid.4

 

Hubei Xingfa was reported in a 2005 trade press article to have been in the process of adding

20,000 metric tons of food grade SHMP capacity to its operations. The project, which was scheduled for

completion in May 2006, would bring Hubei Xingfa’s total SHMP production capacity to 70,000 metric

tons.5

 ***, China had approximately 170,000 metric tons of installed SHMP capacity in 2006. Home

market demand, in 2006, for the product was reported at 120,000 metric tons.6

Chinese-produced SHMP is subject to an antidumping duty of 102.22 percent ad valorem in

Mexico. The antidumping duty order became effective on August 4, 2004 and covers both food and

technical grade product, regardless of chain length.7
 8

 Postconference brief, p. 46.

 9

 Conference transcript, pp. 47-48 (Treinen).

 10 ***’s importer questionnaire response. 

 11 ***’s importer questionnaire response.

 12 Conference transcript, p. 23 (Treinen) and postconference brief, pp. 24-25. Petitioners point out that Univar’s

website lists 81 locations throughout the United States. Id., p. 24, citing www.univarusa.com/quick_facts.htm.

 13 As indicated earlier, SHMP has a shelf life of about 18 months.

VII-2

NONSUBJECT MANUFACTURERS

The major SHMP producers are, in addition to those in China and the United States, located in

Europe and in Mexico. Table VII-1 presents available data on the SHMP capacity of nonsubject

producers. Petitioners state that the European market differs from the U.S. market in that ***.8

 With

respect to Mexico, Quimir reportedly produces similar grades to those manufactured by U.S. firms.9

Mexico is a supplier of SHMP to the United States (table IV-2). ***.

Table VII-1

SHMP: Production of SHMP by nonsubject producers, 2006

Country Producer Capacity (metric tons)

Europe:

 France Prayon SA ***

 Germany BK Giulini ***

 Germany Chemische Fabrik Budenheim ***

 Germany Chemische Werke Piesteritz

(Thermaphos Germany)

***

 Slovenia TKI ***

 United Kingdom Thermophos United Kingdom ***

 Total (Europe) -- ***

Mexico Quimir SA de CV 7,000

Source: Conference transcript, pp. 47-48 (Treinen) for Mexico and postconference brief, p. 46, and http://tkihrastnick.com (retrieved March 13, 2007) for all other sources.

***.10 German manufacturers ship *** volumes of SHMP to the United States; ***.11

IMPORTERS’ U.S. INVENTORIES

Importers of Chinese-produced SHMP are reported by petitioners to maintain substantial

inventories with some (***) establishing a national network of warehouses while ***.12 Reported end-ofperiod inventories held by U.S. importers of subject merchandise from China are shown in table VII-2.13

In contrast to the *** shares of Chinese-manufactured SHMP held in U.S. inventories, there are ***

inventories of product produced in Mexico. Both the absolute volume and the ratios of subject

inventories to U.S. imports and U.S. shipments of imports rose from 2004 to 2005 and then declined in
 14 Petition, pp. 40-41. 

VII-3

2006 to levels that remained above those reported for 2004. Petitioners state that *** built up inventory

in late 2005 and then reduced its imports in 2006 as it sold product from inventory into the U.S. market in

the first half of 2006. They state “{i}t follows that commercial shipments of the Chinese material in the

U.S. market will be somewhat lower than the volume of imports in 2005, but somewhat higher in 2006.”14

 Table VII-3 presents inventory, import, and shipment data separately for (1) *** and (2) all other U.S.

importers. As shown, ***’s imports of SHMP from China in 2005 *** its U.S. shipments of those

imports *** metric tons. This pattern was *** for the other importers. *** accounted for *** percent of

end-of-period subject inventories in 2004, *** percent in 2005, and *** percent in 2006.

Table VII-2

SHMP: U.S. importers’ end-of-period inventories of imports, by sources, 2004-06

* * * * * * *

Table VII-3

SHMP: Product flow of U.S. imports from China, by importer grouping, 2004-06

* * * * * * *

ANTICIPATED SHIPMENTS OF SHMP FROM CHINA

The following tabulation presents information provided by importers on the anticipated

importation of SHMP from China for delivery after December 31, 2006:

* * * * * * *
 
A-1

APPENDIX A

FEDERAL REGISTER NOTICES

7458 Federal Register / Vol. 72, No. 31 / Thursday, February 15, 2007 / Notices 

Investigations, U.S. International Trade 

Commission, telephone (202) 205–2572. 

Authority: The authority for 

institution of this investigation is 

contained in section 337 of the Tariff 

Act of 1930, as amended, and in section 

210.10 of the Commission’s Rules of 

Practice and Procedure, 19 CFR 210.10 

(2006). 

Scope of Investigation: Having 

considered the complaint, the U.S. 

International Trade Commission, on 

February 5, 2007, Ordered that—

(1) Pursuant to subsection (b) of 

section 337 of the Tariff Act of 1930, as 

amended, an investigation be instituted 

to determine whether there is a 

violation of subsection (a)(1)(B) of 

section 337 in the importation into the 

United States, the sale for importation, 

or the sale within the United States after 

importation of certain NAND flash 

memory devices or components thereof, 

or products containing same, by reason 

of infringement of one or more of claims 

2 and 5 of U.S. Patent No. 6,703,658; 

claims 1–4 of U.S. Patent No. 6,424,588; 

and claims 46–49 of U.S. Patent No. 

5,627,782, and whether an industry in 

the United States exists as required by 

subsection (a)(2) of section 337; 

(2) For the purpose of the 

investigation so instituted, the following 

are hereby named as parties upon which 

this notice of investigation shall be 

served: 

(a) The complainant is—Toshiba 

Corporation, 1–1 Shibaura 1-Chome, 

Minato-Ku, Tokyo 105–8001 Japan. 

(b) The respondents are the following 

entities alleged to be in violation of 

section 337, and are the parties upon 

which the complaint is to be served: 

Hynix Semiconductor Inc., San 136–1, 

Ami-Ri Bubal-eub, 1 chon-si, 

Kyoungki-do, Korea. 

Hynix Semiconductor America Inc., 

3101 North First Street, San Jose, 

California 95134. 

(c) The Commission investigative 

attorney, party to this investigation, is 

Juan Cockburn, Esq., Office of Unfair 

Import Investigations, U.S. International 

Trade Commission, 500 E Street, SW., 

Room 401–Q, Washington, DC 20436; 

and 

(3) For the investigation so instituted, 

the Honorable Paul J. Luckern is 

designated as the presiding 

administrative law judge. 

Responses to the complaint and the 

notice of investigation must be 

submitted by the named respondents in 

accordance with section 210.13 of the 

Commission’s Rules of Practice and 

Procedure, 19 CFR 210.13. Pursuant to 

19 CFR 201.16(d) and 210.13(a), such 

responses will be considered by the 

Commission if received not later than 20 

days after the date of service by the 

Commission of the complaint and the 

notice of investigation. Extensions of 

time for submitting responses to the 

complaint and the notice of 

investigation will not be granted unless 

good cause therefor is shown. 

Failure of a respondent to file a timely 

response to each allegation in the 

complaint and in this notice may be 

deemed to constitute a waiver of the 

right to appear and contest the 

allegations of the complaint and this 

notice, and to authorize the 

administrative law judge and the 

Commission, without further notice to 

the respondent, to find the facts to be as 

alleged in the complaint and this notice 

and to enter an initial determination 

and a final determination containing 

such findings, and may result in the 

issuance of a limited exclusion order or 

cease and desist order or both directed 

against the respondent. 

Issued: February 9, 2007. 

By order of the Commission. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. E7–2605 Filed 2–14–07; 8:45 am] 

BILLING CODE 7020–02–P 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation No. 731–TA–1110 

(Preliminary)] 

Sodium Hexametaphosphate (Shmp) 

From China 

AGENCY: United States International 

Trade Commission. 

ACTION: Institution of antidumping 

investigation and scheduling of a 

preliminary phase investigation. 

SUMMARY: The Commission hereby gives 

notice of the institution of an 

investigation and commencement of 

preliminary phase antidumping 

investigation No. 731–TA–1110 

(Preliminary) under section 733(a) of the 

Tariff Act of 1930 (19 U.S.C. 1673b(a)) 

(the Act) to determine whether there is 

a reasonable indication that an industry 

in the United States is materially 

injured or threatened with material 

injury, or the establishment of an 

industry in the United States is 

materially retarded, by reason of 

imports from China of sodium 

hexametaphosphate (SHMP), provided 

for in subheading 2835.39.50 of the 

Harmonized Tariff Schedule of the 

United States, that are alleged to be sold 

in the United States at less than fair 

value. Unless the Department of 

Commerce extends the time for 

initiation pursuant to section 

732(c)(1)(B) of the Act (19 U.S.C. 

1673a(c)(1)(B)), the Commission must 

reach a preliminary determination in 

antidumping investigations in 45 days, 

or in this case by March 26, 2007. The 

Commission’s views are due at 

Commerce within five business days 

thereafter, or by April 2, 2007. 

For further information concerning 

the conduct of this investigation and 

rules of general application, consult the 

Commission’s Rules of Practice and 

Procedure, part 201, subparts A through 

E (19 CFR part 201), and part 207, 

subparts A and B (19 CFR part 207). 

EFFECTIVE DATE: February 8, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Debra Baker (202–205–3180), 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 investigation may be viewed on the 

Commission’s electronic docket (EDIS) 

at http://edis.usitc.gov. 

SUPPLEMENTARY INFORMATION: 

Background.—This investigation is 

being instituted in response to a petition 

filed on February 8, 2007, by ICL 

Performance Products, LP (St. Louis, 

MO) and Innophos, Inc. (Cranbury, NJ). 

Participation in the investigation and 

public service list.—Persons (other than 

petitioners) wishing to participate in the 

investigation as parties must file an 

entry of appearance with the Secretary 

to the Commission, as provided in 

sections 201.11 and 207.10 of the 

Commission’s rules, not later than seven 

days after publication of this notice in 

the Federal Register. Industrial users 

and (if the merchandise under 

investigation is sold at the retail level) 

representative consumer organizations 

have the right to appear as parties in 

Commission antidumping 

investigations. The Secretary will 

prepare a public service list containing 

the names and addresses of all persons, 

or their representatives, who are parties 

to this investigation upon the expiration 

of the period for filing entries of 

appearance. 

Limited disclosure of business 

proprietary information (BPI) under an 


ycherry on PROD1PC64 with NOTICES
Federal Register / Vol. 72, No. 31 / Thursday, February 15, 2007 / Notices 7459 

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 investigation available 

to authorized applicants representing 

interested parties (as defined in 19 

U.S.C. § 1677(9)) who are parties to the 

investigation under the APO issued in 

the investigation, provided that the 

application is made not later than seven 

days after the publication of this notice 

in the Federal Register. A separate 

service list will be maintained by the 

Secretary for those parties authorized to 

receive BPI under the APO. 

Conference.—The Commission’s 

Director of Operations has scheduled a 

conference in connection with this 

investigation for 9:30 a.m. on March 1, 

2007, at the U.S. International Trade 

Commission Building, 500 E Street SW., 

Washington, DC. Parties wishing to 

participate in the conference should 

contact Debra Baker (202–205–3180) not 

later than February 26, 2007, to arrange 

for their appearance. Parties in support 

of the imposition of antidumping duties 

in this investigation and parties in 

opposition to the imposition of such 

duties will each be collectively 

allocated one hour within which to 

make an oral presentation at the 

conference. A nonparty who has 

testimony that may aid the 

Commission’s deliberations may request 

permission to present a short statement 

at the conference. 

Written submissions.—As provided in 

sections 201.8 and 207.15 of the 

Commission’s rules, any person may 

submit to the Commission on or before 

March 6, 2007, a written brief 

containing information and arguments 

pertinent to the subject matter of the 

investigation. Parties may file written 

testimony in connection with their 

presentation at the conference no later 

than three days before the conference. If 

briefs or written testimony contain BPI, 

they must 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). 

In accordance with sections 201.16(c) 

and 207.3 of the rules, each document 

filed by a party to the investigation must 

be served on all other parties to the 

investigation (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 investigation is being 

conducted under authority of title VII of the 

Tariff Act of 1930; this notice is published 

pursuant to section 207.12 of the 

Commission’s rules. 

By order of the Commission. 

Issued: February 12, 2007. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. E7–2676 Filed 2–14–07; 8:45 am] 

BILLING CODE 7020–02–P 

DEPARTMENT OF JUSTICE 

Notice of Lodging of Consent Decree 

Under the Clean Air Act 

Notice is hereby given that on 

February 5, 2007, a proposed consent 

decree (‘‘Consent Decree’’) in the matter 

of United States vs. Agrium U.S. Inc. 

and Royster-Clark, Inc., Civil Action No. 

1–07–CV–0089, was lodged with the 

United States District Court for the 

Southern District of Ohio, Western 

Division. 

The Consent Decree would resolve 

claims of the United States against 

Agrium U.S. Inc. and Royster-Clark, Inc. 

(collectively ‘‘Defendants’’) asserted in a 

complaint filed against the Defendants 

pursuant to Sections 113(b) and 167 of 

the Clean Air Act (‘‘the Act’’), 42 U.S.C. 

7413(b) and 7477, for injunctive relief 

and the assessment of civil penalties for 

violations at a nitric acid production 

facility located at 10743 Brower Road, 

Hamilton County, North Bend, Ohio 

(‘‘Facility’’) of: The Prevention of 

Significant Deterioration (‘‘PSD’’) 

provisions of the Act, 42 U.S.C. 7470–

92, and the PSD regulations 

incorporated into the federally approved 

and enforceable Ohio State 

Implementation Plan (‘‘Ohio SIP’’); the 

New Source Performance Standards 

(‘‘NSPS’’) of the Act, 42 U.S.C. 7411; the 

Title V Permit requirements of the Act, 

42 U.S.C. 7661, et seq., and Title V’s 

implementing Federal (40 CFR Part 70) 

and Ohio regulations (OAC Chapter 

3745–77); and the Ohio SIP Permit to 

Install requirements (OAC 3745–31–

02(A)). 

The proposed Consent Decree would 

require, among other things, that the 

Defendants: Install a selective catalytic 

reduction device and achieve specified 

emission limits to control the emissions 

of nitrogen oxides (‘‘NOx’’) from the 

nitric acid plant at the Facility upon a 

schedule specified in the Consent 

Decree; install a continuous emissions 

monitoring system to measure NOx

emissions at the Facility’s nitric acid 

plant; apply for a permit to install from 

Ohio’s permitting authorities 

incorporating various requirements of 

the Consent Decree and submit all 

necessary applications to revise the 

Facility’s Clean Air Act Title V 

operating permit to incorporate certain 

requirements specified in the Consent 

Decree; and, pay a civil penalty to the 

United States in the amount of 

$750,000.00. 

The Department of Justice will 

receive, for a period of thirty (30) days 

from the date of this publication, 

comments relating to the proposed 

Consent Decree. Comments should be 

addressed to the Assistant Attorney 

General, Environment and Natural 

Resources Division, United States 

Department of Justice, P.O. Box 7611, 

Ben Franklin Station, Washington, DC 

20044–7611, and should refer to United 

States v. Agrium U.S. Inc. and RoysterClark, Inc., DOJ Ref. 90–5–2–1–08469. 

The Consent Decree may be examined 

at the Office of the United States 

Attorney for the Southern District of 

Ohio, 221 East 4th Street, Suite 400, 

Cincinnati, Ohio 45202 and at the 

offices of the United States 

Environmental Protection Agency, 

Region 5, 77 W. Jackson Blvd., Chicago, 

Illinois 60604. During the public 

comment period, the Consent Decree 

may also be examined on the following 

Department of Justice Web site: http:// 

www.usdoj.gov/enrd/ 

Consent_Decrees.html. A copy of the 

Consent Decree may also be obtained by 

mail from the Consent Decree Library, 

P.O. Box 7611, U.S. Department of 

Justice, Washington, DC 20044–7611, or 

by faxing or e-mailing a request to Tonia 

Fleetwood (tonia.fleetwood@usdoj.gov, 

fax no. (202) 514–0097, phone 

confirmation number (202) 514–1547. In 

requesting a copy from the Consent 

Decree Library, please enclose a check 

in the amount of $7.75 (25 cents per 

page reproduction cost) payable to the 

U.S. Treasury or, if by e-mail or fax, 

forward a check in that amount to the 

Consent Decree Library at the stated 

address. 

William D. Brighton, 

Assistant Chief, Environmental Enforcement 

Section, Environment and Natural Resources, 

Division. 

[FR Doc. 07–688 Filed 2–14–07; 8:45 am] 

BILLING CODE 4410–15–M 


ycherry on PROD1PC64 with NOTICES
9926 Federal Register / Vol. 72, No. 43 / Tuesday, March 6, 2007 / Notices 

Dated: February 27, 2007. 

David M. Spooner, 

Assistant Secretary for Import 

Administration. 

Appendix 

List of Issues 

1. Adjustments to Husteel’s G&A 

Expense Ratio 

2. Husteel’s Profit and Selling Expense 

Ratios for Constructed Value 

3. Husteel’s CEP Profit 

4. Treatment of Inventory Carrying Costs 

Incurred in Korea for U.S. Sales 

5. CEP Offset to SeAH 

6. Interest Expenses Associated with 

U.S. Selling Operations 

7. G&A Expense for Further 

Manufacturing 

8. Interest Expense for Further 

Manufacturing 

9. Further Manufacturing Freight 

Expenses 

10. Calculation Issues 

[FR Doc. E7–3893 Filed 3–5–07; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–570–905] 

Initiation of Antidumping Duty 

Investigation: Sodium 

Hexametaphosphate From the 

People’s Republic of China 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce 

EFFECTIVE DATE: March 6, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Christopher Riker or Erin Begnal, AD/ 

CVD Operations, Office 9, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW, Washington, DC 20230; 

telephone: (202) 482–3441 or (202) 482–

1442, respectively. 

Initiation of Investigation 

The Petition 

On February 8, 2007, the Department 

of Commerce (‘‘Department’’) received a 

petition on imports of sodium 

hexametaphosphate (‘‘SHMP’’) from the 

People’s Republic of China (‘‘PRC’’) 

filed in proper form by ICL Performance 

Products, LP and Innophos, Inc. 

(‘‘Petitioners’’). The period of 

investigation (‘‘POI’’) is July 1, 2006, 

through December 31, 2006. 

In accordance with section 732(b) of 

the Tariff Act of 1930, as amended (‘‘the 

Act’’), Petitioners alleged that imports of 

SHMP from the PRC are being, or are 

likely to be, sold in the United States at 

less than fair value within the meaning 

of section 731 of the Act, and that such 

imports are materially injuring and 

threaten to materially injure an industry 

in the United States. The Department 

issued supplemental questions to 

Petitioners on February 12, 2007, and 

February 21, 2007. Petitioners filed their 

responses on February 16, 2007, and 

February 23, 2007. 

Scope of Investigation 

The merchandise subject to this 

investigation is Sodium 

hexametaphosphate (‘‘SHMP’’). SHMP 

is a water-soluble polyphosphate glass 

that consists of a distribution of 

polyphosphate chain lengths. It is a 

collection of sodium polyphosphate 

polymers built on repeating NaPO 3

units. SHMP has a P 2O 5 content from 

60 to 71 percent. Alternate names for 

SHMP include the following: Calgon; 

Calgon S; Glassy Sodium Phosphate; 

Sodium Polyphosphate, Glassy; 

Metaphosphoric Acid; Sodium Salt; 

Sodium Acid Metaphosphate; Graham’s 

Salt; Sodium Hex; Polyphosphoric Acid, 

Sodium Salt; Glass H; Hexaphos; 

Sodaphos; Vitrafos; and BAC-N-FOS. 

SHMP is typically sold as a white 

powder or granule (crushed) and may 

also be sold in the form of sheets (glass) 

or as a liquid solution. It is imported 

under heading 2835.39.5000, HTSUS. It 

may also be imported as a blend or 

mixture under heading 3823.90.3900, 

HTSUS. The American Chemical 

Society, Chemical Abstract Service 

(‘‘CAS’’) has assigned the name 

‘‘Polyphosphoric Acid, Sodium Salt’’ to 

SHMP. The CAS registry number is 

68915–31–1. However, SHMP is 

commonly identified by CAS No. 

10124–56–8 in the market. For purposes 

of the investigation, the narrative 

description is dispositive, not the tariff 

heading, CAS registry number or CAS 

name. 

The product covered by this 

investigation includes SHMP in all 

grades, whether food grade or technical 

grade. The product covered by this 

investigation includes SHMP without 

regard to chain length i.e., whether 

regular or long chain. The product 

covered by this investigation includes 

SHMP without regard to physical form, 

whether glass, sheet, crushed, granule, 

powder, fines, or other form. 

However, the product covered by this 

investigation does not include SHMP 

when imported in a blend with other 

materials in which the SHMP accounts 

for less than 50 percent by volume of 

the finished product. 

Comments on Scope of Investigation 

During our review of the petition, we 

discussed the scope with Petitioners to 

ensure that it accurately reflects the 

product for which the domestic industry 

is seeking relief. Moreover, as discussed 

in the preamble to the Department’s 

regulations, we are setting aside a 

period for interested parties to raise 

issues regarding product coverage. See 

Antidumping Duties; Countervailing 

Duties; Final Rule, 62 FR 27296, 27323 

(May 19, 1997). The Department 

encourages all interested parties to 

submit such comments within 20 

calendar days of publication of this 

initiation notice. Comments should be 

addressed to Import Administration’s 

Central Records Unit in Room 1870, 

U.S. Department of Commerce, 14th 

Street and Constitution Avenue, NW., 

Washington, DC 20230. The period of 

scope consultations is intended to 

provide the Department with ample 

opportunity to consider all comments 

and consult with interested parties prior 

to the issuance of the preliminary 

determination. 

Determination of Industry Support for 

the Petition 

Section 732(b)(1) of the Act requires 

that a petition be filed by an interested 

party described in subparagraph (C), (D), 

(E), (F) or (G) of section 771(9) of the 

Act, by or on behalf of the domestic 

industry. In order to determine whether 

a petition has been filed by or on behalf 

of the domestic industry, the 

Department, pursuant to section 

732(c)(4)(A) of the Act, determines 

whether a minimum percentage of the 

relevant industry supports the petition. 

A petition meets this requirement if the 

domestic producers or workers who 

support the petition account for: (i) At 

least 25 percent of the total production 

of the domestic like product; and (ii) 

more than 50 percent of the production 

of the domestic like product produced 

by that portion of the industry 

expressing support for, or opposition to, 

the petition. Moreover, section 

732(c)(4)(D) of the Act provides that, if 

the petition does not establish support 

of domestic producers or workers 

accounting for more than 50 percent of 

the total production of the domestic like 

product, the Department shall: (i) Poll 

the industry or rely on other 

information in order to determine if 

there is support for the petition, as 

required by subparagraph (A), or (ii) if 

there is a large number of producers in 

the industry the Department may 

determine industry support using a 

statistically valid sampling method. 


cprice-sewell on PROD1PC67 with NOTICES
Federal Register / Vol. 72, No. 43 / Tuesday, March 6, 2007 / Notices 9927 

Section 771(4)(A) of the Act defines 

the ‘‘industry’’ as the producers as a 

whole of a domestic like product. Thus, 

to determine whether a petition has the 

requisite industry support, the statute 

directs the Department to look to 

producers and workers who produce the 

domestic like product. The International 

Trade Commission (‘‘ITC’’), which is 

responsible for determining whether 

‘‘the domestic industry’’ has been 

injured, must also determine what 

constitutes a domestic like product in 

order to define the industry. While both 

the Department and the ITC must apply 

the same statutory definition regarding 

the domestic like product (section 

771(10) of the Act), they do so for 

different purposes and pursuant to a 

separate and distinct authority. In 

addition, the Department’s 

determination is subject to limitations of 

time and information. Although this 

may result in different definitions of the 

like product, such differences do not 

render the decision of either agency 

contrary to law. See USEC, Inc. v. 

United States, 132 F. Supp. 2d 1, 8 (CIT 

2001), citing Algoma Steel Corp. Ltd. v. 

United States, 688 F. Supp. 639, 644 

(1988), aff’d 865 F.2d 240 (Fed. Cir. 

1989), cert. denied 492 U.S. 919 (1989). 

Section 771(10) of the Act defines the 

‘‘domestic like product’’ as ‘‘a product 

which is like, or in the absence of like, 

most similar in characteristics and uses 

with, the article subject to an 

investigation under this title.’’ Thus, the 

reference point from which the 

domestic like product analysis begins is 

‘‘the article subject to an investigation,’’

(i.e., the class or kind of merchandise to 

be investigated, which normally will be 

the scope as defined in the petition). 

With regard to the domestic like 

product, Petitioners do not offer a 

definition of domestic like product 

distinct from the scope of the 

investigation. Based on our analysis of 

the information submitted on the 

record, we have determined that SHMP 

constitutes a single domestic like 

product and we have analyzed industry 

support in terms of that domestic like 

product. For a discussion of the 

domestic like product analysis in this 

case, see Antidumping Investigation 

Initiation Checklist: Sodium 

Hexametaphosphate from the People’s 

Republic of China (‘‘PRC’’) at 

Attachment I (‘‘Initiation Checklist’’), on 

file in the Central Records Unit, Room 

B–099 of the main Department of 

Commerce building. 

Our review of the data provided in the 

petition, supplemental submissions, and 

other information readily available to 

the Department indicates that 

Petitioners have established industry 

support representing at least 25 percent 

of the total production of the domestic 

like product, and more than 50 percent 

of the production of the domestic like 

product produced by that portion of the 

industry expressing support for or 

opposition to the petition, requiring no 

further action by the Department 

pursuant to section 732(c)(4)(D) of the 

Act. Therefore, the domestic producers 

(or workers) who support the petition 

account for at least 25 percent of the 

total production of the domestic like 

product, and the requirements of section 

732(c)(4)(A)(i) of the Act are met. 

Furthermore, the domestic producers 

who support the petition account for 

more than 50 percent of the production 

of the domestic like product produced 

by that portion of the industry 

expressing support for, or opposition to, 

the petition. Thus, the requirements of 

section 732(c)(4)(A)(ii) of the Act also 

are met. Accordingly, the Department 

determines that the petition was filed on 

behalf of the domestic industry within 

the meaning of section 732(b)(1) of the 

Act. See Initiation Checklist at 

Attachment I (Industry Support). 

The Department finds that Petitioners 

filed the petition on behalf of the 

domestic industry because they are an 

interested party as defined in sections 

771(9)(C) of the Act and they have 

demonstrated sufficient industry 

support with respect to the antidumping 

investigation that they are requesting 

the Department initiate. See Initiation 

Checklist at Attachment I (Industry 

Support). 

Export Price 

Petitioners provided numerous U.S. 

price quotes for SHMP manufactured in 

the PRC and offered for sale in the 

United States. However, the Department 

notes that a number of these prices, as 

quoted, were prior to the POI. Therefore, 

the Department has only examined 

prices within the POI or more 

contemporaneous. These prices were for 

SHMP within the scope of this Petition, 

for delivery to the U.S. customer within 

the POI. Petitioners deducted the costs 

associated with exporting and 

delivering the product, including ocean 

freight and insurance charges, foreign 

inland freight costs, and foreign 

brokerage and handling from the prices. 

See Initiation Checklist at 6–7. 

In addition, while Petitioners also 

calculated margins using a U.S. price 

based on the average unit values 

(‘‘AUVs’’) of imports during the POI 

available from the International Trade 

Commission for HTSUS subheading 

2835.39.5000, because adequate pricing 

information is available using the abovedetailed price quotations, the 

Department need not address the AUV 

margin calculations for this initiation, 

consistent with the Department’s prior 

practice. See Notice of Initiation of 

Antidumping Duty Investigation: 

Tetrahydrofurfuryl Alcohol from the 

People’s Republic of China, 68 FR 42686 

(July 18, 2003). However, should the 

need arise to use any of this information 

as facts available under section 776 of 

the Act in our preliminary or final 

determinations, we may re-examine the 

information and revise the margin 

calculations, if appropriate. 

Normal Value 

Petitioners stated that the PRC is a 

non-market economy (‘‘NME’’) and no 

determination to the contrary has been 

made by the Department to date. 

Recently, the Department examined the 

PRC’s market status and determined that 

NME status should continue for the 

PRC. See Memorandum from the Office 

of Policy to David M. Spooner, Assistant 

Secretary for Import Administration, 

regarding The People’s Republic of 

China Status as a Non-Market Economy 

(May 15, 2006). In addition, in a recent 

antidumping duty investigation, the 

Department also determined that the 

PRC is a NME. See, e.g., Notice of Final 

Determination of Sales at Less Than Fair 

Value and Final Partial Affirmative 

Determination of Critical 

Circumstances: Diamond Sawblades and 

Parts Thereof from the People’s 

Republic of China, 71 FR 29303 (May 

22, 2006). 

In accordance with section 

771(18)(C)(i) of the Act, the 

presumption of NME status remains in 

effect until revoked by the Department. 

The presumption of NME status for the 

PRC has not been revoked by the 

Department and remains in effect for 

purposes of the initiation of this 

investigation. Accordingly, the normal 

value of the product is appropriately 

based on factors of production valued in 

a surrogate market economy country in 

accordance with section 773(c) of the 

Act. In the course of this investigation, 

all parties will have the opportunity to 

provide relevant information related to 

the issues of the PRC’s NME status and 

the granting of separate rates to 

individual exporters. 

Petitioners selected India as the 

surrogate country. Petitioners argued 

that, pursuant to section 773(c)(4) of the 

Act, India is an appropriate surrogate 

because it is a market-economy country 

that is at a comparable level of 

economic development to the PRC and 

is a significant producer of SHMP. 

Based on the information provided by 

Petitioners, we believe that its use of 

India as a surrogate country is 


cprice-sewell on PROD1PC67 with NOTICES
9928 Federal Register / Vol. 72, No. 43 / Tuesday, March 6, 2007 / Notices 

1For a description of the comparable 

merchandise, as described by Petitioners, see 

Petition at 23–24. 

appropriate for purposes of initiating 

this investigation. After the initiation of 

the investigation, we will solicit 

comments regarding surrogate country 

selection. Also, pursuant to 19 CFR 

351.301(c)(3)(i), interested parties will 

be provided an opportunity to submit 

publicly available information to value 

factors of production within 40 days 

after the date of publication of the 

preliminary determination. 

Petitioners provided dumping margin 

calculations using the Department’s 

NME methodology as required by 19 

CFR 351.202(b)(7)(i)(C) and 19 CFR 

351.408. Petitioners calculated normal 

values based on consumption rates for 

producing SHMP experienced by U.S. 

producers for producing SHMP in an 

integrated facility and a non-integrated 

facility. See Initiation Checklist. In 

accordance with section 773(c)(4) of the 

Act, Petitioners valued factors of 

production, where possible, on 

reasonably available, public surrogate 

country data. To value certain factors of 

production, Petitioners used official 

Indian government import statistics, 

excluding those values from countries 

previously determined by the 

Department to be NME countries and 

excluding imports into India from 

Indonesia, the Republic of Korea and 

Thailand, because the Department has 

previously excluded prices from these 

countries because they maintain 

broadly-available, non-industry specific 

export subsidies. See, e.g., Tapered 

Roller Bearings and Parts Thereof, 

Finished and Unfinished, from the 

People’s Republic of China: Final 

Results of 1999–2000 Administrative 

Review, Partial Rescission of Review, 

and Determination Not to Revoke Order 

in Part, 66 FR 57420 (November 15, 

2001), and accompanying Issues and 

Decision Memorandum at Comment 1. 

For valuing other factors of production, 

Petitioners used the same sources, 

where appropriate, recently used in the 

Preliminary Determination of Sales at 

Less Than Fair Value and Partial 

Affirmative Determination of Critical 

Circumstances: Certain Polyester Staple 

Fiber from the People’s Republic of 

China, 71 FR 77373 (December 26, 

2006), and inflated these values to be 

contemporaneous with the POI where 

necessary. 

For inputs valued in Indian rupees 

and not contemporaneous with the POI, 

Petitioners used information from the 

wholesale price indices (‘‘WPI’’) in 

India as published by the Reserve Bank 

of India (‘‘RBI’’) for input prices during 

the period preceding the POI. In 

addition, Petitioners made currency 

conversions, where necessary, based on 

the average rupee/U.S. dollar exchange 

rate for the POI, as reported on the 

Department’s Web site. See http:// 

ia.ita.doc.gov/exchange/index.html. 

For the normal value calculations, 

Petitioners derived the figures for 

factory overhead, selling, general and 

administrative expenses (‘‘SG&A’’), and 

profit from the financial ratios of two 

Indian producers of SHMP or 

comparable merchandise.1 Petitioners 

derived these financial ratios from 

Gujarat Alkalies and Chemicals Ltd. for 

the integrated production process and 

from the Aditya Birla Group for the nonintegrated production process. 

Fair Value Comparisons 

Based on the data provided by 

Petitioners, there is reason to believe 

that imports of SHMP from the PRC are 

being, or are likely to be, sold in the 

United States at less than fair value. 

Based upon comparisons of supported 

export prices to the two normal values, 

calculated in accordance with section 

773(c) of the Act, the estimated 

calculated dumping margins for SHMP 

from the PRC range from 76.69 percent 

to 103.62 percent. See Initiation 

Checklist at 9–10 for these calculations. 

Allegations and Evidence of Material 

Injury and Causation 

Petitioners allege that the U.S. 

industry producing the domestic like 

product is being materially injured, or is 

threatened with material injury, by 

reason of the individual and cumulated 

imports of the subject merchandise sold 

at less than NV. Petitioners contend that 

the industry’s injured condition is 

illustrated by the decline in customer 

base, market share, domestic shipments, 

prices and financial performance. We 

have assessed the allegations and 

supporting evidence regarding material 

injury and causation, and we have 

determined that these allegations are 

properly supported by adequate 

evidence and meet the statutory 

requirements for initiation. See 

Initiation Checklist at Attachment II. 

Separate Rates Application 

The Department recently modified the 

process by which exporters and 

producers may obtain separate-rate 

status in NME investigations. See Policy 

Bulletin 05.1: Separate-Rates Practice 

and Application of Combination Rates 

in Antidumping Investigations 

involving Non-Market Economy 

Countries (Separate Rates and 

Combination Rates Bulletin), (April 5, 

2005), available on the Department’s 

Web site at http://ia.ita.doc.gov/policy/ 

bull05–1.pdf (‘‘Separate Rates and 

Combination Rates Bulletin’’). The 

process requires the submission of a 

separate-rate status application. Based 

on our experience in processing the 

separate rates applications in, for 

example, the antidumping duty 

investigations of Certain Lined Paper 

products from India, Indonesia, and the 

People’s Republic of China and 

Diamond Sawblades and Parts Thereof 

from the People’s Republic of China and 

the Republic of Korea, we have 

modified the application for this 

investigation to make it more 

administrable and easier for applicants 

to complete. See Initiation of 

Antidumping Duty Investigations: 

Certain Lined Paper Products from 

India, Indonesia, and the People’s 

Republic of China, 70 FR 58374, 58379 

(October 6, 2005) (‘‘Lined Paper 

Initiation’’), Initiation of Antidumping 

Duty Investigations: Diamond 

Sawblades and Parts Thereof from the 

People’s Republic of China and the 

Republic of Korea, 70 FR 35625, 35629 

(June 21, 2005) (‘‘Sawblades Initiation’’), 

and Initiation of Antidumping Duty 

Investigation: Certain Artist Canvas 

From the People’s Republic of China, 70 

FR 21996, 21999 (April 28, 2005) 

(‘‘Artist Canvas Initiation’’). The specific 

requirements for submitting the 

separate-rates application in this 

investigation are outlined in detail in 

the application itself, which will be 

available on the Department’s Web site 

at http://ia.ita.doc.gov/ia-highlightsand-news.html on the date of 

publication of this initiation notice in 

the Federal Register. The separate rates 

application is due no later than May 4, 

2007. 

NME Respondent Selection and 

Quantity and Value Questionnaire 

For NME investigations, it is the 

Department’s practice to request 

quantity and value information from all 

known exporters identified in the 

petition. Although many NME exporters 

respond to the quantity and value 

information request, at times some 

exporters may not have received the 

quantity and value questionnaire or may 

not have received it in time to respond 

by the specified deadline. Therefore, in 

addition, the Department typically 

requests the assistance of the NME 

government in transmitting the 

Department’s quantity and value 

questionnaire to all companies who 

manufacture and export subject 

merchandise to the United States, as 

well as to manufacturers who produce 

the subject merchandise for companies 

who were engaged in exporting subject 


cprice-sewell on PROD1PC67 with NOTICES
Federal Register / Vol. 72, No. 43 / Tuesday, March 6, 2007 / Notices 9929 

merchandise to the United States during 

the period of investigation. The quantity 

and value data received from NME 

exporters is used as the basis to select 

the mandatory respondents. 

The Department requires that the 

respondents submit a response to both 

the quantity and value questionnaire 

and the separate-rates application by the 

respective deadlines in order to receive 

consideration for separate-rate status. 

Appendix I of this notice contains the 

quantity and value questionnaire that 

must be submitted by all NME exporters 

no later than April 4, 2007. In addition, 

the Department will post the quantity 

and value questionnaire along with the 

filing instructions on the Import 

Administration’s Web site, http:// 

ia.ita.doc.gov/ia-highlights-andnews.html. The Department will also 

send the quantity and value 

questionnaire to those exporters 

identified in Exhibit AD–3 of the 

petition and the NME government. 

Use of Combination Rates in an NME 

Investigation 

The Department will calculate 

combination rates for certain 

respondents that are eligible for a 

separate rate in this investigation. The 

Separate Rates and Combination Rates 

Bulletin, states: 

{w}hile continuing the practice of 

assigning separate rates only to exporters, all 

separate rates that the Department will now 

assign in its NME investigations will be 

specific to those producers that supplied the 

exporter during the period of investigation. 

Note, however, that one rate is calculated for 

the exporter and all of the producers which 

supplied subject merchandise to it during the 

period of investigation. This practice applies 

both to mandatory respondents receiving an 

individually calculated separate rate as well 

as the pool of non-investigated firms 

receiving the weighted-average of the 

individually calculated rates. This practice is 

referred to as the application of ‘‘combination 

rates’’ because such rates apply to specific 

combinations of exporters and one or more 

producers. The cash-deposit rate assigned to 

an exporter will apply only to merchandise 

both exported by the firm in question and 

produced by a firm that supplied the exporter 

during the period of investigation. 

See Separate Rates and Combination 

Rates Bulletin, at page 6. 

Initiation of Antidumping Investigation 

Based upon our examination of the 

petition on SHMP from the PRC, we 

find that this petition meets the 

requirements of section 732 of the Act. 

Therefore, we are initiating an 

antidumping duty investigation to 

determine whether imports of SHMP 

from the PRC are being, or are likely to 

be, sold in the United States at less than 

fair value. Unless postponed, we will 

make our preliminary determinations no 

later than 140 days after the date of 

these initiations. See section 

733(b)(1)(A) of the Act. 

Distribution of Copies of the Petition 

In accordance with section 

732(b)(3)(A) of the Act, a copy of the 

public version of the petition has been 

provided to the government of the PRC. 

International Trade Commission 

Notification 

We have notified the ITC of our 

initiation, as required by section 732(d) 

of the Act. 

Preliminary Determination by the ITC 

The ITC will preliminarily determine, 

within 25 days after the date on which 

it receives notice of this initiation, 

whether there is a reasonable indication 

that imports of SHMP from the PRC are 

causing material injury, or threatening 

to cause material injury, to a U.S. 

industry. See section 733(a)(2)(A)(i) of 

the Act. A negative ITC determination 

will result in the investigation being 

terminated; otherwise, this investigation 

will proceed according to statutory and 

regulatory time limits. 

This notice is issued and published 

pursuant to section 777(i) of the Act. 

Dated: February 28, 2007. 

David M. Spooner, 

Assistant Secretary for Import 

Administration. 

Appendix I 

Where it is not practicable to examine all 

known producers/exporters of subject 

merchandise because of the large number of 

exporters or producers included in the 

investigation, section 777A(c)(2) of the Tariff 

Act of 1930 (as amended) permits us to 

investigate (1) a sample of exporters, 

producers, or types of products that is 

statistically valid based on the information 

available at the time of selection, or (2) 

exporters and producers accounting for the 

largest volume and value of the subject 

merchandise that can reasonably be 

examined. 

In the chart below, please provide the total 

quantity and total value of all your sales of 

merchandise covered by the scope of this 

investigation (see scope section of this 

notice), produced in the PRC, and exported/ 

shipped to the United States during the 

period July 1, 2006, through December 31, 

2006. 

Market Total quantity Terms of sale Total value 

United States 

1. Export Price Sales 

2. 

a. Exporter name 

b. Address 

c. Contact 

d. Phone No. 

e. Fax No. 

3. Constructed Export Price Sales 

4. Further Manufactured 

Total Sales 

Total Quantity: 

• Please report quantity on a metric ton 

basis. If any conversions were used, please 

provide the conversion formula and source. 

Terms of Sales: 

• Please report all sales on the same terms 

(e.g., free on board). 

Total Value: 

• All sales values should be reported in 

U.S. dollars. Please indicate any exchange 

rates used and their respective dates and 

sources. 

Export Price Sales: 

• Generally, a U.S. sale is classified as an 

export price sale when the first sale to an 

unaffiliated person occurs before importation 

into the United States. 

• Please include any sales exported by 

your company directly to the United States. 

• Please include any sales exported by 

your company to a third-country market 

economy reseller where you had knowledge 

that the merchandise was destined to be 

resold to the United States. 

• If you are a producer of subject 

merchandise, please include any sales 

manufactured by your company that were 

subsequently exported by an affiliated 

exporter to the United States. 

• Please do not include any sales of 

merchandise manufactured in Hong Kong in 

your figures. 


cprice-sewell on PROD1PC67 with NOTICES
9930 Federal Register / Vol. 72, No. 43 / Tuesday, March 6, 2007 / Notices 

Constructed Export Price Sales: 

• Generally, a U.S. sale is classified as a 

constructed export price sale when the first 

sale to an unaffiliated person occurs after 

importation. However, if the first sale to the 

unaffiliated person is made by a person in 

the United States affiliated with the foreign 

exporter, constructed export price applies 

even if the sale occurs prior to importation. 

• Please include any sales exported by 

your company directly to the United States. 

• Please include any sales exported by 

your company to a third-country market 

economy reseller where you had knowledge 

that the merchandise was destined to be 

resold to the United States. 

• If you are a producer of subject 

merchandise, please include any sales 

manufactured by your company that were 

subsequently exported by an affiliated 

exporter to the United States. 

• Please do not include any sales of 

merchandise manufactured in Hong Kong in 

your figures. 

Further Manufactured: 

• Further manufacture or assembly costs 

include amounts incurred for direct 

materials, labor and overhead, plus amounts 

for general and administrative expense, 

interest expense, and additional packing 

expense incurred in the country of further 

manufacture, as well as all costs involved in 

moving the product from the U.S. port of 

entry to the further manufacturer. 

[FR Doc. E7–3890 Filed 3–5–07; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–821–801] 

Solid Urea from Russia: Notice of 

Initiation of Antidumping Duty New–

Shipper Review 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

EFFECTIVE DATE: March 6, 2007. 

SUMMARY: On January 25, 2007, the 

Department of Commerce received a 

request to conduct a new–shipper 

review of the antidumping duty order 

on solid urea from Russia. In accordance 

with section 751(a)(2)(B) of the Tariff 

Act of 1930, as amended, and 19 CFR 

351.214(d) (2005), we are initiating an 

antidumping duty new–shipper review. 

FOR FURTHER INFORMATION CONTACT: 

Thomas Schauer or Minoo Hatten at 

(202) 482–0410 and (202) 482–1690, 

respectively, Office 5, AD/CVD 

Operations, Import Administration, 

International Trade Administration, 

U.S. Department of Commerce, 14th 

Street and Constitution Avenue, NW., 

Washington, DC 20230. 

SUPPLEMENTARY INFORMATION: 

Background 

On May 26, 1987, the Department of 

Commerce (the Department) published 

its final determination in the 

investigation of solid urea from the 

Union of Soviet Socialist Republics 

(Soviet Union), finding dumping 

margins of 68.26 percent for 

Soyuzpromexport, 53.23 percent for 

Phillip Brothers, and 68.26 as the 

country–wide rate (52 FR 19557). On 

July 14, 1987, following an affirmative 

injury determination by the 

International Trade Commission, the 

Department issued an antidumping duty 

order on solid urea from the Soviet 

Union. Following the break–up of the 

Soviet Union, the antidumping duty 

order on solid urea from the Soviet 

Union was transferred to the individual 

members of the Commonwealth of 

Independent States. See Solid Urea from 

the Union of Soviet Socialist Republics; 

Transfer of the AD Order on Solid Urea 

from the Union of Soviet Socialist 

Republics to the Commonwealth of 

Independent States and the Baltic States 

and Opportunity to Comment, 57 FR 

28828 (June 29, 1992). The rates 

established in the most recently 

completed administrative review for the 

Soviet Union (which, because there 

were no shipments of urea during the 

review period, remained the same as 

those found in the investigation) were 

applied to each new independent state, 

including Russia. On September 3, 

1999, the Department published the 

final results of the first sunset review of 

solid urea from Russia finding 

likelihood of continued or recurring 

dumping at the rates established in the 

original investigation. See Final Results 

of Expedited Sunset Reviews: Solid Urea 

from Armenia, Belarus, Estonia, 

Lithuania, Russia, Ukraine, Tajikistan, 

Turkmenistan, and Uzbekistan, 64 FR 

48357 (September 3, 1999). On January 

5, 2006, the Department published the 

final results of the second sunset review 

of solid urea from Russia finding 

likelihood of continued or recurring 

dumping at the rates established in the 

original investigation. See Notice of 

Continuation of Antidumping Duty 

Orders: Solid Urea from the Russian 

Federation and Ukraine, 71 FR 581 

(January 5, 2006). There have been no 

administrative reviews since the 

issuance of the antidumping duty order. 

On January 25, 2007, the Department 

received a timely request for a new–

shipper review of the antidumping duty 

order on solid urea from Russia from 

MCC EuroChem (EuroChem). On 

January 31, 2007, EuroChem submitted 

additional certifications to supplement 

its request for a new–shipper review in 

response to our telephone call of the 

same. See memorandum to file dated 

January 31, 2007. EuroChem certified 

that it is both the producer and exporter 

of the subject merchandise upon which 

the request for a new–shipper review is 

based. 

Pursuant to section 751(a)(2)(B)(i)(I) of 

the Tariff Act of 1930, as amended (the 

Act), and 19 CFR 351.214(b)(2)(i), 

EuroChem certified that it did not 

export solid urea to the United States 

during the period of investigation (POI). 

In addition, pursuant to section 

751(a)(2)(B)(i)(II) of the Act and 19 CFR 

351.214(b)(2)(iii)(A), EuroChem certified 

that, since the initiation of the 

investigation, it has never been affiliated 

with any Russian exporter or producer 

who exported solid urea to the United 

States during the POI, including those 

not individually examined during the 

investigation. 

In addition to the certifications 

described above, pursuant to 19 CFR 

351.214(b)(2)(iv), EuroChem submitted 

documentation establishing the date on 

which EuroChem first shipped solid 

urea for export to the United States and 

the date on which the solid urea was 

first entered, or withdrawn from 

warehouse, for consumption, the 

volume of its first shipment, and the 

date of its first sale to an unaffiliated 

customer in the United States. 

The Department conducted a query of 

the U.S. Customs and Border Protection 

(CBP) database to confirm that 

EuroChem’s shipment of subject 

merchandise had entered the United 

States for consumption and had been 

suspended for antidumping duties. The 

Department also corroborated 

EuroChem’s assertion that it made no 

subsequent shipments to the United 

States by reviewing CBP data. 

On February 16, 2007, the Ad Hoc 

Committee of Domestic Nitrogen 

Producers (the petitioner) submitted a 

letter arguing that the respondent was 

not eligible for a new–shipper review 

because the producer of the subject 

merchandise to be reviewed, OJSC 

Nevinnomysskiy Azot (Nevinka), was 

affiliated with the exporter and 

producers during the POI. The 

petitioner also argued that the request 

was incomplete because EuroChem did 

not also file a certification from Nevinka 

certifying that it never shipped subject 

merchandise to the United States during 

the POI. 

Initiation of Review 

Pursuant to section 751(a)(2)(B) of the 

Act and 19 CFR 351.214(d)(1), the 

Department finds that EuroChem’s 

request meets the threshold 

requirements for initiation of a new–


cprice-sewell on PROD1PC67 with NOTICES
Federal Register / Vol. 72, No. 48 / Tuesday, March 13, 2007 / Notices 11325 

1The Department notes that this administrative 

review will continue with respect to CP Kelco BV 

and Noviant BV. 

DEPARTMENT OF COMMERCE 

International Trade Administration 

A–421–811 

Purified Carboxymethylcellulose from 

the Netherlands: Rescission of 

Antidumping Duty Administrative 

Review in Part 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: In response to a request from 

petitioner Aqualon Company, a division 

of Hercules Incorporated (‘‘Aqualon’’), a 

U.S. manufacturer of 

carboxymethylcellulose (‘‘CMC’’), the 

Department of Commerce (‘‘the 

Department’’) initiated an 

administrative review of the 

antidumping duty order on CMC from 

the Netherlands. See Initiation of 

Antidumping and Countervailing Duty 

Administrative Reviews and Requests 

for Revocation in Part, 71 FR 51573 

(August 30, 2006). This administrative 

review covers the period December 27, 

2004, through June 30, 2006. We are 

now rescinding this review with respect 

to Akzo Nobel Surface Chemistry BV 

and Akzo Nobel Functional Chemicals 

B.V. (collectively, ‘‘Akzo’’) due to the 

withdrawal of Aqualon’s review request 

with respect to Akzo.1

EFFECTIVE DATE: March 13, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Dena Crossland or Stephen Bailey, AD/ 

CVD Operations, Office 7, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW, Room 7866, Washington, 

DC 20230; telephone: (202) 482–3362 or 

(202) 482–0193, respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

The Department published an 

antidumping duty order on CMC from 

the Netherlands on July 11, 2005. See 

Notice of Antidumping Duty Orders: 

Purified Carboxymethylcellulose from 

Finland, Mexico, the Netherlands and 

Sweden, 70 FR 39734 (July 11, 2005). 

The Department published a notice of 

‘‘Opportunity to Request an 

Administrative Review’’ of the 

antidumping duty order for the period 

December 27, 2004, through June 30, 

2006, on July 3, 2006. See 71 FR 37890. 

Petitioner Aqualon requested that the 

Department conduct an administrative 

review of the antidumping duty order 

on CMC from the Netherlands on July 

27, 2006. In response to this request 

from petitioner, the Department 

published the initiation of the 

antidumping duty administrative review 

on CMC from the Netherlands on 

August 30, 2006. See 71 FR 51573. The 

Department received petitioner’s request 

for withdrawal of the administrative 

review with respect to Akzo on 

February 15, 2007. 

Rescission of the Administrative 

Review 

Pursuant to 19 C.F.R. § 351.213(d)(1), 

the Secretary will rescind an 

administrative review under this 

section, in whole or in part, if a party 

that requested a review withdraws the 

request within 90 days of the date of 

publication of notice of initiation of the 

requested review, or withdraws at a 

later date if the Department determines 

it is reasonable to extend the time limit 

for withdrawing the request. Petitioner’s 

request is past the 90-day time limit; 

however, we find that it is reasonable to 

extend the deadline because the 

Department has not yet devoted 

significant time or resources to this 

review. In response to petitioner’s 

withdrawal of its request for an 

administrative review, as well as the 

fact that we have not yet issued 

preliminary results, the Department 

hereby rescinds the administrative 

review of the antidumping duty order 

on CMC from the Netherlands for the 

period December 27, 2004, through June 

30, 2006, with respect to Akzo. 

The Department intends to issue 

appropriate assessment instructions to 

Customs and Border Protection 15 days 

after the date of the publication of this 

notice. The Department will direct CBP 

to assess antidumping duties for Akzo at 

the cash deposit rate in effect on the 

date of entry for entries during the 

period December 27, 2004, through June 

30, 2006. 

This notice serves as a reminder to 

parties subject to administrative 

protective order (‘‘APO’’) of their 

responsibility concerning the 

disposition of proprietary information 

disclosed under APO in accordance 

with 19 C.F.R. § 351.305(a)(3). Timely 

written 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 sanctionable violation. 

This notice is published in 

accordance with sections 751(a)(1) and 

777(i)(1) of the Tariff Act of 1930, as 

amended, and 19 C.F.R. § 351.213(d)(4). 

Dated: March 5, 2007. 

Stephen J. Claeys, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. E7–4497 Filed 3–12–07; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

A–570–908 

Notice of Correction of Initiation of 

Antidumping Duty Investigation: 

Sodium Hexametaphosphate from the 

People’s Republic of China 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

EFFECTIVE DATE: March 13, 2007. 

FOR FURTHER INFORMATION CONTACT: Erin 

C. Begnal or Christopher D. Riker, AD/ 

CVD Operations, Office 9, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW, Washington, DC 20230; 

telephone: (202) 482–1442 or (202) 482–

3441, respectively. 

CORRECTION: 

On March 6, 2007, the Department of 

Commerce (‘‘Department’’) published 

the notice of initiation of the 

antidumping duty investigation of 

sodium hexametaphosphate from the 

People’s Republic of China. See 

Initiation of Antidumping Duty 

Investigation: Sodium 

Hexametaphosphate from the People’s 

Republic of China, 72 FR 9926 (March 

6, 2007) (‘‘Initiation Notice’’). 

Subsequent to the signature of the 

Initiation Notice, we identified an 

inadvertent error in the above–

referenced notice. 

Specifically, the case number listed in 

the Initiation Notice was incorrect. It 

should read A–570–908. 

Conclusion 

This notice serves solely to correct the 

case number as it was listed in the 

Initiation Notice. The Department’s 

findings in the Initiation Notice remain 

unchanged. This notice is issued and 

published in accordance with section 

777(i) of the Tariff Act of 1930, as 

amended. 

Dated: March 6, 2007. 

Stephen J. Claeys, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. E7–4501 Filed 3–12–07; 8:45 am] 

BILLING CODE 3510–DS–S 


cprice-sewell on PROD1PC66 with NOTICES
B-1

APPENDIX B

CONFERENCE WITNESSES

B-3

CALENDAR OF PUBLIC CONFERENCE

Those listed below appeared as witnesses at the United States International Trade

Commission’s conference:

Subject: Sodium Hexametaphosphate from China 

Inv. Nos.: 731-TA-1110 (Preliminary)

Date and Time: March 1, 2007 - 9:30 a.m.

The conference in connection with this investigation was held in the Main Hearing Room

(room 101), 500 E Street, SW, Washington, DC.

In Support of the Imposition of Antidumping Duties:

Williams Mullen

Washington, DC

on behalf of

ICL Performance Products, LP

James R. Moffatt, President, Performance Products North America

Heather K. Luther, Vice President and General Counsel,

ICL Performance Products, LP

Nancy Stachiw, Director Technical Service and Applications,

ICL Performance Products, LP

Innophos, Inc.

Tim J. Treinen, Vice President, Performance Chemicals, Innophos, Inc.

Russell Kemp, Business Manager, Innophos, Inc.

James R. Cannon, Jr., Esq. )

Francisco J. Orellana, Esq. ) – OF COUNSEL

Dean A. Barclay, Esq. )
 
C-1

APPENDIX C

SUMMARY DATA
 
C-3

Table C-1

SHMP: Summary data concerning the U.S. market

* * * * * * *
 
D-1

APPENDIX D

INFORMATION ON PRICES OF SHMP

FROM NONSUBJECT COUNTRIES

D-3

Nonsubject-Country Volume and Price Data

The following tables contain data from questionnaire responses of the prices and quantities of

domestically produced, Chinese, and nonsubject countries’ imports of SHMP.

Table D-1

SHMP: Weighted-average quarterly f.o.b. prices and quantities for domestic and imported subject

and nonsubject product 1,1 January 2004-December 2006

Period

United States2 China3 Australia4 Mexico5

Price

(per

pound)

Quantity

(pounds)

Price

(per

pound)

Quantity

(pounds)

Price

(per

pound)

Quantity

(pounds)

Price

(per

pound)

Quantity

(pounds)

2004:

 Jan.-Mar. $*** *** $0.31 2,847,684 $*** *** $*** ***

 Apr.-June *** *** 0.33 2,232,528 *** *** *** ***

 July-Sept. *** *** 0.35 1,572,161 *** *** *** ***

 Oct.-Dec. *** *** 0.40 2,362,385 *** *** *** ***

2005:

 Jan.-Mar. *** *** 0.38 881,885 *** *** *** ***

 Apr.-June *** *** 0.47 1,326,661 *** *** *** ***

 July-Sept. *** *** 0.44 2,944,663 *** *** *** ***

 Oct.-Dec. *** *** 0.43 2,943,004 *** *** *** ***

2006:

 Jan.-Mar. *** *** 0.43 5,002,352 -- -- *** ***

 Apr.-June *** *** 0.40 4,307,107 *** *** *** ***

 July-Sept. *** *** 0.39 3,221,444 -- -- *** ***

 Oct.-Dec. *** *** 0.41 2,283,377 -- -- *** ***

 1 Product 1 consists of sodium hexametaphosphate, technical grade, regular chain. 2 Relevant data submitted by ***. 3 Relevant data submitted by ***. 4 Relevant data submitted by ***. 5 Relevant data submitted by ***.

Note.– Data for Germany were also submitted by ***. All quarterly data were averages of yearly data. In 2004,

each quarter was *** pounds; in 2005, *** pounds; and in 2006, *** pounds. The associated prices per pound were: 

$***, respectively. 

Source: Compiled from data submitted in response to Commission questionnaires.

Table D-2

SHMP: Weighted-average quarterly f.o.b. prices and quantities for domestic and imported subject

and nonsubject product 2, January 2004-December 2006

* * * * * * *
D-4

Table D-3

SHMP: Weighted-average quarterly f.o.b. prices and quantities for domestic and imported subject

and nonsubject product 3, January 2004-December 2006

* * * * * * *

Table D-4

SHMP: Weighted-average quarterly f.o.b. prices and quantities for domestic and imported subject

and nonsubject product 4, January 2004-December 2006

* * * * * * *

Figure D-1

SHMP: Weighted-average quarterly f.o.b. prices of domestic and imported product 1, 

January 2004-December 2006

* * * * * * *

Figure D-2

SHMP: Weighted-average quarterly f.o.b. prices of domestic and imported product 2, 

January 2004-December 2006

* * * * * * *

Figure D-3

SHMP: Weighted-average quarterly f.o.b. prices of domestic and imported product 3, 

January 2004-December 2006

* * * * * * *

Figure D-4

SHMP: Weighted-average quarterly f.o.b. prices of domestic and imported product 4,

January 2004-December 2006

* * * * * * *