U.S. International Trade Commission

Publication 4452 February 2014

Washington, DC 20436

Calcium Hypochlorite from China

Investigation Nos. 701-TA-510 and 731-TA-1245 (Preliminary)
U.S. International Trade Commission

COMMISSIONERS 

 

Irving A. Williamson, Chairman 

Shara L. Aranoff 

Dean A. Pinkert 

David S. Johanson 

Meredith M. Broadbent 

F. Scott Kieff

Robert B. Koopman

Staff assigned

Address all communications to 

Secretary to the Commission 

United States International Trade Commission 

Washington, DC 20436

Director of Operations

Joanna Lo, Investigator 

James Fetzer, Economist 

David Boyland, Accountant 

Christopher Robinson, Industry Analyst 

John Stephens, Statistician 

John Henderson, Attorney 

Elizabeth Haines, Supervisory Investigator
U.S. International Trade Commission

Washington, DC 20436 

www.usitc.gov

Publication 4452 February 2014

Calcium Hypochlorite from China

Investigation Nos. 701-TA-510 and 731-TA-1245 (Preliminary)

CONTENTS

Page

i

Determinations..........................................................................................................................1

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

Part I: Introduction................................................................................................................. I‐1

Background................................................................................................................................ I‐1

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

Statutory criteria ................................................................................................................... I‐2

Organization of report........................................................................................................... I‐3

Marketsummary....................................................................................................................... I‐3

Summary data and data sources............................................................................................... I‐4

Previous and related investigations.......................................................................................... I‐4

Nature and extent of alleged subsidies and sales at LTFV........................................................  I‐5

Alleged subsidies................................................................................................................... I‐5

Alleged sales at LTFV ............................................................................................................. I‐5

The subject merchandise .......................................................................................................... I‐6

Commerce’sscope ................................................................................................................ I‐6

Tariff treatment..................................................................................................................... I‐6

The product............................................................................................................................... I‐7

Description and applications................................................................................................. I‐7

Manufacturing processes...................................................................................................... I‐8

The domestic industry...............................................................................................................  I‐9

Domestic like product issues.....................................................................................................  I‐9

Physical characteristics....................................................................................................... I‐10

Interchangeability ............................................................................................................... I‐11

Manufacturing processes .................................................................................................... I‐11

Channels of distribution ...................................................................................................... I‐12

Customer and producer perceptions .................................................................................. I‐12

Price ..................................................................................................................................... I‐13
CONTENTS

Page

ii

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

U.S. market characteristics....................................................................................................... II‐1

Channels of distribution........................................................................................................... II‐1

Geographic distribution ........................................................................................................... II‐1

Supply and demand considerations ...................................................................................... II‐2

U.S. supply ............................................................................................................................ II‐2

U.S. demand ......................................................................................................................... II‐4

Substitutability issues ...............................................................................................................II‐6

Lead times ............................................................................................................................ II‐6

Factors affecting purchasing decisions................................................................................. II‐6

Comparison of U.S.‐produced and imported calhypo ........................................................ II‐7

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

U.S. producers......................................................................................................................... III‐1

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

U.S. producers’ U.S. shipments and exports........................................................................... III‐2

U.S. producers’ inventories..................................................................................................... III‐2

U.S. producers’ imports and purchases.................................................................................. III‐3

U.S. employment, wages, and productivity ............................................................................ III‐3
CONTENTS

Page

iii

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

U.S. importers..........................................................................................................................IV‐1

U.S. imports.............................................................................................................................IV‐3

Negligibility..............................................................................................................................IV‐4

Fungibility ............................................................................................................................ IV‐4

Presence in the market ....................................................................................................... IV‐4

Geographical markets ......................................................................................................... IV‐4

Apparent U.S. consumption ................................................................................................... IV‐5

U.S. market shares ..................................................................................................................IV‐6

Ratio of imports to U.S. production ........................................................................................IV‐6

Part V: Pricing data...............................................................................................................V‐1

Factors affecting prices ........................................................................................................ V‐1

Raw material costs ...............................................................................................................V‐1

Transportation costs to the U.S. market..............................................................................V‐1

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

Pricing practices ....................................................................................................................V‐3

Pricing methods....................................................................................................................V‐3

Sales terms and discounts ....................................................................................................V‐3

Price data ..................................................................................................................................V‐4

Price trends ..........................................................................................................................V‐6

Price comparisons ................................................................................................................V‐6

Lost sales and lost revenue .......................................................................................................V‐7
CONTENTS

Page

iv

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

Background..............................................................................................................................VI‐1

Operations on calhypo ............................................................................................................VI‐1

Revenue...............................................................................................................................VI‐2

Cost of goods sold and gross profit.....................................................................................VI‐3

SG&A expenses and operating income or (loss) .................................................................VI‐5

Capital expenditures AND research and development expenses ......................................... VI‐5

Capital and investment ...........................................................................................................VI‐6

Actual negative effects....................................................................................................... VI‐6

Anticipated negative effects................................................................................................VI‐6

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

The industry in China..............................................................................................................VII‐3

U.S. inventories of imported merchandise ............................................................................VII‐3

U.S. importers’ outstanding orders ........................................................................,...........VII‐4

Antidumping or countervailing duty orders in third‐country markets ..................................VII‐4

Information on nonsubject countries ....................................................................................VII‐4

Appendixes

A. Federal Register notices....................................................................................................A‐1

B. Calendar of the public conference.................................................................................... B‐1

C. Summary data................................................................................................................... C‐1

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

published and therefore has been deleted.  Such deletions are indicated by asterisks.
1

UNITED STATES INTERNATIONAL TRADE COMMISSION

Investigation Nos. 701‐TA‐510 and 731‐TA‐1245 (Preliminary)

CALCIUM HYPOCHLORITE FROM CHINA

DETERMINATIONS

On the basis of the record1 developed in the subject investigations, the United States

International Trade Commission (Commission) determines, pursuant to sections 703(a) and

733(a) of the Tariff Act of 1930 (19 U.S.C. '' 1671b(a) and 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 calcium hypochlorite, provided for in subheadings 2828.10.00,

3808.94.50, and 3808.99.95 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”), and that are allegedly

subsidized by the government of China.

COMMENCEMENT OF FINAL PHASE INVESTIGATIONS   

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

of the commencement of the final phase of its investigations.    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 affirmative preliminary determinations in the investigations under sections

703(b) or 733(b) of the Act, or, if the preliminary determinations are negative, upon notice of

affirmative final determinations in those investigations under sections 705(a) or 735(a) of the

Act.    Parties that filed entries of appearance in the preliminary phase of the investigations

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

investigations.

BACKGROUND

On December 18, 2013, a petition was filed with the Commission and Commerce by

Arch Chemicals, Inc., a Lonza Company, Atlanta, GA, alleging that an industry in the United

States is materially injured or threatened with material injury by reason of LTFV and subsidized

imports of calcium hypochlorite from China.    Accordingly, effective December 18, 2013, the

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

CFR ' 207.2(f)).
2

Commission instituted countervailing duty investigation No. 701‐TA‐510 and antidumping duty

investigation No. 731‐TA‐1245 (Preliminary).

Notice of the institution of the Commission=s investigations 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 December 24, 2013 (78 FR 77712).    The conference was held in

Washington, DC, on January 8, 2014, and all persons who requested the opportunity were

permitted to appear in person or by counsel.
B

is a reaso

imports o

States at

I. T

T

requires

prelimina

materiall

materiall

standard

record as

threat of

investiga

II. B

T

Chemica

conferen

Tw

an impor

a postcon

exporter

postconf

U

accounti

are based

question

imports f

                 1

994, 1001

argues tha

unfairly tr

2 A

F.3d 1535

3

petitioner

4

ased on the

onable indica

of calcium h

less than fa

The Legal S

he legal stan

the Commis

ary determin

ly injured or

ly retarded,

d, the Comm

s a whole co

f such injury;

ation.”2

Background

he petitions

ls, Inc. (“Arc

nce and subm

wo respond

rter and dist

nference bri

of subject m

ference brief

U.S. industry

ng for 100 p

d on official

naire respon

from China u

                     

19 U.S.C. §§ 1

1‐04 (Fed. Cir.

at the establi

raded import

American Lam

5, 1543 (Fed. C

Confidential

r Arch and Ax

CR at I‐4; PR

record in th

ation that an

ypochlorite

ir value and

Standard fo

ndard for pre

ssion to dete

nations, whe

threatened

by reason o

ission weigh

ontains clear

; and (2) no

d  

in these inv

h”), a dome

mitted a pos

ent entities

ributor of su

ief.  Sinopec

merchandise

f.

data are bas

percent of U.

Commerce

nses from ei

under HTS su

                  

1671b(a), 167

. 1986); Ariste

shment of an

s.

mb Co., 785 F

Cir. 1994).

Report (“CR”

xiall Corporati

at I‐4.

Views of t

he prelimina

n industry in

(“calhypo”)

are alleged

or Prelimin

eliminary an

ermine, base

ether there i

with mater

f the alleged

hs the eviden

and convinc

likelihood ex

vestigations

stic produce

tconference

participated

ubject merch

Jianghan Sa

e, did not ap

sed on the q

.S. productio

import stati

ght compan

ubheading 2

73b(a) (2000)

ech Chem. Co

n industry in t

F.2d at 1001; s

) at I‐4; Public

ion (“Axiall”),

3

the Comm

ry phase of t

n the United

from China

ly subsidized

nary Deter

ntidumping a

ed upon the

is a reasonab

ial injury, or

dly unfairly t

nce before it

cing evidenc

xists that co

were filed o

er of calhypo

e brief.  

d in these inv

handise, app

alt & Chemic

pear at the c

questionnair

on of granula

stics.4  The C

nies, represe

2828.10.00 d

; see also Am

orp. v. United

the United Sta

see also Texa

c Report (“PR

, are the sole

mission

these invest

States is ma

that are alle

d by the gov

rminations

and counter

information

ble indicatio

r that the est

traded impo

t and determ

ce that there

ontrary evide

on Decembe

o.  Petitione

vestigations

peared at th

cal Complex

conference,

re responses

ar calhypo in

Commission

enting 27.1 p

during the pe

merican Lamb

States, 20 CIT

ates is mater

as Crushed Sto

R”) at I‐4.  The

U.S. produce

tigations, we

aterially inju

egedly sold i

vernment of

s  

vailing duty

n available a

on that a dom

tablishment

rts.1

  In appl

mines wheth

e is no mate

ence will aris

r 18, 2013 b

r appeared a

s.  F2 Industr

e conferenc

(“JSCC”), a p

but submitt

s of two prod

n 2012.3  U.S

received us

percent of to

eriod of inve

Co. v. United

T 353, 354‐55

ially retarded

one Co. v. Un

e two respond

ers of granula

e find that th

ured by reaso

n the United

China.

determinat

t the time o

mestic indus

t of an indust

lying this

her “(1) the

rial injury or

se in a final

y Arch

at the

ries, LLC (“F2

e and subm

producer an

ted a

ducers,

S. import dat

sable import

otal subject

estigation

d States, 785 F

5 (1996).  No

d by the allege

ited States, 3

ding produce

r calhypo.  

here

on of

d

ions

f the

stry is

try is

r

2”),

itted

d

ta

ter

F.2d

party

edly

35

ers,
(“POI”), w

additiona

JSCC, wh

productio

III. D

In

States is

subject m

“industry

the relev

those pro

proportio

“domest

characte

T

factual d

“most sim

dispositiv

facts of a

possible

                 5

Septembe

6

exporters

majority o

percent o

7

8

9

10

Departme

States, 19

1990), aff

particular

number o

(3) chann

manufact

price.  See

1996). 11

12

at 90‐91 (

(Continue

which entail

ally received

ich estimate

on of subjec

Domestic L

n determinin

materially in

merchandise

y.”7  Section

vant domest

oducers who

on of the tot

ic like produ

ristics and u

he decision

eterminatio

milar in char

ve, and the C

a particular i

like product

                     

CR at IV‐1; PR

er.   

CR at VII‐4 to

s of subject m

of subject imp

of all Chinese

19 U.S.C. § 16

19 U.S.C. § 16

19 U.S.C. § 16

0 See, e.g., Cle

ent of Comme

9 CIT 450, 455

f’d, 938 F.2d 1

r record at iss

of factors inclu

els of distribu

uring facilitie

e Nippon, 19 C

1 See, e.g., S. R 2 See, e.g., Nip

Congress has

ed...)

s the period

d a questionn

ed that its pr

ct merchand

ike Produc

ng whether t

njured or thr

e, the Comm

771(4)(A) of

ic industry a

ose collectiv

tal domestic

uct” as “a pro

ses with, the

regarding th

n, and the C

racteristics a

Commission

nvestigation

ts and disreg

                  

R at IV‐1.  The

o VII‐5; PR at V

merchandise (*

ports from 20

calhypo expo

677(4)(A).

677(4)(A).

677(10).

eo Inc. v. Unit

erce, 36 F. Sup

5 (1995); Torr

1278 (Fed. Cir

ue’ and the ‘u

uding the foll

ution; (4) cust

es, production

CIT at 455 n.4

Rep. No. 96‐2

ppon, 19 CIT a

s indicated th

d from Janua

naire respon

roduction ac

ise from Chi

ct

there is a rea

reatened wi

ission first d

f the Tariff A

as the “produ

e output of

c production

oduct which

e article sub

he appropria

Commission

and uses” on

may consid

n.

11  The Com

gards minor

e interim peri

VII‐3.  The Co

***).  These f

010 to 2012.  

orts to the Un

ted States, 50

pp. 2d 380, 3

rington Co. v.

r. 1991) (“eve

unique facts o

owing:  (1) ph

tomer and pr

n processes, a

4; Timken Co.

249 at 90‐91 (

at 455; Torrin

at the like pr

4

ry 2010 to S

nse from one

ccounted for

na in 2012.6

asonable ind

th material i

defines the “

Act of 1930,

ucers as a w

a domestic l

of the prod

h is like, or in

bject to an in

ate domestic

has applied

n a case‐by‐c

er other fac

mmission loo

variations.12

ods for 2012

mmission rec

firms’ exports

JSCC estimat

ited States in

1 F.3d 1291,

83 (Ct. Int’l T

United States

ery like produ

of each case’”

hysical charac

oducer perce

and productio

v. United Sta

(1979).

ngton, 747 F.

oduct standa

September 2

e producer o

r approximat

6

  

dication that

injury by rea

“domestic lik

as amended

whole of a do

like product

duct.”8  In tur

n the absenc

nvestigation.

c like produc

the statutor

case basis.10

ctors it deem

oks for clear

2

  Although t

and 2013 are

ceived questio

s to the Unite

ed that its ex

n 2012.  CR at

1299 (Fed. Ci

rade 1998); N

s, 747 F. Supp

uct determina

”).  The Comm

cteristics and

eptions of the

on employees

ates, 913 F. Su

Supp. at 748‐

ard should no

2013.5  The C

of subject m

tely *** per

t an industry

ason of impo

ke product”

d (“the Tariff

omestic like p

constitutes

rn, the Tariff

ce of like, mo

.”

9

ct(s) in an inv

ry standard

No single fa

ms relevant b

dividing line

the Commiss

e from Januar

onnaire respo

ed States acco

xports accoun

t VII‐5; PR at V

ir. 2007); NEC

Nippon Steel C

p. 744, 749 n

ation ‘must be

mission gene

d uses; (2) inte

e products; (5

s; and, where

upp. 580, 584

‐49; see also

t be interpret

Commission

erchandise,

rcent of

y in the Unit

orts of the

and the

f Act”), defin

product, or

a major

f Act defines

ost similar in

vestigation i

of “like” or

actor is

based on the

es among

sion must ac

ry through

onses from tw

ounted for th

nted for ***

VII‐3.

C Corp. v.

Corp. v. Unite

.3 (Ct. Int’l Tr

e made on th

rally consider

erchangeabili

5) common

e appropriate

4 (Ct. Int’l Tra

S. Rep. No. 96

ted in “such a

ed

nes

s

n

is a

e

ccept

wo

e

ed

rade

he

rs a

ity;

, (6)

ade

6‐249

a
5

Commerce’s determination as to the scope of the imported merchandise that is subsidized

and/or sold at less than fair value,13 the Commission determines what domestic product is like

the imported articles Commerce has identified.14  The Commission may, where appropriate,

include domestic articles in the domestic like product in addition to those described in the

scope.15

In its notice of initiation, Commerce defined the imported merchandise within the scope

of these investigations as follows:

The product covered by this investigation is calcium hypochlorite, regardless of form

(e.g., powder, tablet (compressed), crystalline (granular), or in liquid solution), whether

or not blended with other materials, containing at least 10% available chlorine

measured by actual weight.  The scope also includes bleaching powder and hemibasic

calcium hypochlorite.

Calcium hypochlorite has the general chemical formulation Ca(OCl) 2, but may also be

sold in a more dilute form as bleaching powder with the chemical formulation,

Ca(OCl)2.CaCl2.Ca(OH) 2.2H2O or hemibasic calcium hypochlorite with the chemical

formula of 2Ca(OCl) 2.Ca(OH) 2 or Ca(OCl) 2.0.5Ca(OH)2.  Calcium hypochlorite has a

Chemical Abstract Service (‘‘CAS’’) registry number of 7778–54–3, and a U.S.

Environmental Protection Agency (‘‘EPA”) Pesticide Code (‘‘PC’’) Number of 014701.

The subject calcium hypochlorite has an International Maritime Dangerous Goods

(‘‘IMDG’’) code of Class 5.1 UN 1748, 2880, or 2208 or Class 5.1/8 UN 3485, 3486, or

3487. Calcium hypochlorite is currently classifiable under the subheading 2828.10.0000

of the Harmonized Tariff Schedule of the United States (‘‘HTSUS’’).  The subheading

                                                                                                                                                                              

(...Continued)

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.”).

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

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

United States, 688 F. Supp. 639, 644 (Ct. Int’l Trade 1988), aff’d, 865 F.3d 240 (Fed. Cir.), cert. denied,

492 U.S. 919 (1989). 14 Hosiden Corp. v. Advanced Display Mfrs., 85 F.3d 1561, 1568 (Fed. Cir. 1996) (the Commission

may find a single like product corresponding to several different classes or kinds defined by Commerce);

Cleo, 501 F.3d at 1298 n.1 (“Commerce’s {scope} finding does not control the Commission’s {like

product} determination.”); Torrington, 747 F. Supp. at 748‐52 (affirming the Commission’s

determination defining six like products in investigations where Commerce found five classes or kinds).

15 See, e.g., Pure Magnesium from China and Israel, Inv. Nos. 701‐TA‐403 and 731‐TA‐895‐96

(Final), USITC Pub. 3467 at 8 n.34 (Nov. 2001); Torrington, 747 F. Supp.  at 748‐49 (holding that the

Commission is not legally required to limit the domestic like product to the product advocated by the

petitioner, coextensive with the scope).
6

covers commercial calcium hypochlorite and other calcium hypochlorite.  When

tableted or blended with other materials, calcium hypochlorite may be entered under

other tariff classifications, such as 3808.94.5000 and 3808.99.9500, which cover

disinfectants and similar products. While the HTSUS subheadings, the CAS registry

number, the U.S. EPA PC number, and the IMDG codes are provided for convenience

and customs purposes, the written description of the scope of this investigation is

dispositive.16  

Calhypo is a chemical compound used primarily as a sanitizing agent for swimming

pools, spas, and municipal water treatment systems.  It is typically sold as a white solid in

powder, crystalline, or tablet form, but can also be sold in a liquid solution.  The active

ingredient is chlorine, which acts as a biocide, killing algae and other microbes.  Calhypo can be

sold as a pure product, with available chlorine concentrations of 65‐80 percent, or as a product

blended with other ingredients.17   

Petitioner argues that the Commission should find a single domestic like product that is

coextensive with the scope of the investigations:  i.e., calcium hypochlorite, regardless of

form.18  F2 argues that the Commission should define the like product to include calhypo and

several products not within the scope of the investigations:  trichloroisocyanuric acid

(“trichlor”), sodium dichlorisocyanurate (“dichlor”) in both anhydrous and dihydrate form, and

sodium hypochlorite (liquid bleach).19  JSCC does not take a position on the definition of the

domestic like product for purposes of these preliminary determinations.20

Based on the record, for purposes of these preliminary determinations we define a

single domestic like product consisting of calhypo that is coextensive with the scope of the

investigations.  Our examination of the domestic like product factors is set forth below.

Physical Characteristics and Uses.  Calhypo is produced by combining chlorine and

calcium hydroxide (lime).  The principal applications of calhypo in the United States are in water

treatment at commercial and residential pools and spas.  Calhypo is used both to maintain

                                                       16 79 Fed. Reg. 2410, 2415 (January 14, 2014).   17 CR at I‐9; PR at I‐7.

18 Petition at 13‐16; Petitioner’s Postconference Brief at 3‐6.

19 F2’s Postconference Brief at 1‐5.  Dichlor (both in anhydrous form and dihydrate form) and

trichlor were both included within the scope and the single domestic like product in the Commission’s

recent preliminary phase investigations involving chlorinated isocyanurates (“chlorinated isos”) from

China and Japan.  Chlorinated Isocyanurates from China and Japan, 701‐TA‐501 and 731‐TA‐1226

(Preliminary), USITC Pub. 4431 (November 2013) (“Chlorinated Isos”), and there is substantial

information about trichlor and dichlor in the Commission’s public report from those investigations.     

F2’s proposed like product in these investigations also includes another chemical compound, sodium

hypochlorite, which was not within the scope or domestic like product in the recent chlorinated isos

investigations, and there is limited information available about sodium hypochlorite in the record of

these investigations.

20 JSCC’s Postconference Brief at 1‐2.  Instead, JSCC suggested, without elaboration, that there

may be several separate like products, given the existence within the scope of different chemical

formulations of calhypo with different chlorine content levels. Id.
7

regular chlorine levels and/or to deliver quick, remedial increases in chlorine.  Other

applications include disinfection of drinking water and waste water, and food and non‐food

contact surfaces, as well as washing fruits and vegetables.21 Calhypo for pool and spa

applications typically contains 45, 68, or 75 percent available chlorine.22

Chlorinated isos are a cyanuric acid derivative, produced from a reaction of cyanuric

acid (derived from urea), chlorine, and caustic soda.  There are three primary chemical

compositions of chlorinated isos: (1) trichlor, which has 90 percent available chlorine; (2)

dichlor in anhydrous form, which has 63 percent available chlorine; and (3) dichlor in dihydrate

form, which has 56 percent available chlorine.  Chlorinated isos are used primarily as sanitizing

agents for swimming pools, spas, and industrial water treatments and as bleaching agents for

detergents, bleaches and cleansers.23  

Sodium hypochlorite, also called liquid bleach, is typically manufactured by mixing

chlorine with caustic soda.24  It has about 15 percent available chlorine content.  Commercial

strength liquid bleach is generally used for laundry, and industrial and swimming pool

sanitation, but it may add too much alkalinity when used for swimming pools.25

Although calhypo, chlorinated isos, and sodium hypochlorite have some degree of

overlap in end uses, significant differences exist in their chemical compositions, particularly in

the level of available chlorine, as well as the differing non‐chlorine inputs involved.26  While

calhypo is sold in a wide range of available chlorine, from 45 percent to 75 percent in the most

common applications, trichlor is much higher in available chlorine at 90 percent and sodium

hypochlorite is much lower at 15 percent.        

Manufacturing Facilities, Production Processes and Employees.  None of the parties has

either argued or presented information that calhypo, chlorinated isos, and sodium hypochlorite

are produced in the same facilities with the same employees.27  In fact, the record indicates

that putting chlorinated isos and calhypo in close proximity can result in a rapid explosion and

fire.28  No U.S. calhypo producer stated that it could switch production from calhypo to other

                                                       21 CR at I‐10; PR at I‐8. 22 CR at I‐10; PR at I‐8.  Calhypo may also be produced with a higher chlorine content (78

percent) or a lower chlorine content (approximately 35 percent for bleaching powder).  CR at I‐11 to I‐

12; PR at I‐8.    23 Chlorinated Isos, USITC Pub. 4431 at 6‐8; Petitioner’s Postconference Brief, Response to Staff

Questions, at 2.     24 The process used to produce all domestic calhypo and the majority of the subject imports also

involves combining caustic soda and chlorine, yielding sodium hypochlorite, sodium chloride, and water.  

However, in the production of calhypo, the sodium hypochlorite is then combined with hydrated lime

and chlorine to create calcium hypochlorite paste, which then goes through several additional

processing steps.  CR at I‐11; PR at I‐8.   25 Transcript of January 8, 2014 Conference (“Conf. Tr.”) at 45 (Walden); Petitioner’s

Postconference Brief, Response to Staff Questions, at 2.   26 CR at I‐15 to I‐16; PR at I‐11; Conf. Tr. at 32, 87 (Walden).

27 See F2’s Postconference Brief at 4‐5; Petitioner’s Postconference Brief, Response to Staff

Questions, at 2‐3.     28 Conf. Tr. at 32‐33, 100‐101 (Walden).
8

products.29  Similarly, in the chlorinated isos investigations, no responding U.S. producers of

chlorinated isos stated that they could switch production to any other products.30  Thus, we do

not find that the information available supports the conclusion that these different compounds

are manufactured in common facilities with common employees.                

Channels of Distribution.  Calhypo is sold by manufacturers to end users, repackers,

distributors, dealers, and retailers.  The retail channel includes large discount or big box stores,

specialty stores, and pool service companies.31  In the chlorinated isos investigations, the

Commission found that chlorinated isos are generally sold to distributors and retailers,

including pool retail stores, “big box” stores, and pool service companies,32 so there appears to

be some overlap with the channels of distribution for calhypo.  There is limited information in

the record regarding channels of distribution for sodium hypochlorite.33

Interchangeability.  The record indicates that chlorinated isos and sodium hypochlorite

have a degree of interchangeability with calhypo, in that all can be used as sanitizing agents.34  

U.S. producers and importers of calhypo identified dichlor, trichlor, chlorinated isos, and

sodium hypochlorite as substitutes for calhypo.35  The record also indicates that some of these

compounds are not interchangeable for particular uses.  For example, while calhypo is used as a

sanitizer for drinking water systems, trichlor is not used in such applications because it

produces cyanuric acid unsuitable for drinking water.36            

Producer and Customer Perceptions.  The record contains limited information

concerning customer and producer perceptions, and that information is inconclusive.37  On the

one hand, neither Arch’s website nor that of a major retailer specifically references calhypo.38  

On the other hand, the record also indicates that branding is very important to domestic

calhypo producers and some big box retailers.39  Such branding would tend to distinguish

                                                       29 CR at II‐5; PR at II‐3.  As previously noted, the production of sodium hypochlorite and the

sodium process for production of calhypo both involve combining chlorine and caustic soda, and the

resulting sodium hypochlorite is one of the inputs used to produce calhypo.  CR at I‐11, I‐17; PR at I‐8, I‐

11.  However, there is no information in the record that producers of calhypo and producers of sodium

hypochlorite use common manufacturing facilities or employees.             30 Chlorinated Isos, USITC Pub. 4431 at II‐5.    31 CR at I‐11, II‐1 to II‐2; PR at I‐8; II‐1.       32 Chlorinated Isos, USITC Pub. 4431 at 8, 24.

33 See F2’s Postconference Brief at 3‐4 and Exh. 1 at 9 (affidavit of Sherman Wang).

34 Conf. Tr. at 44‐45 (Walden).

35 CR at II‐8; PR at II‐5.  Similarly, in the recent chlorinated isos investigations, multiple

producers, tableters, and importers of chlorinated isos identified calhypo and sodium hypochlorite as

substitutes for chlorinated isos.  Chlorinated Isos, USITC Pub. 4431 at II‐11.    36 Conf. Tr. at 45‐46 (Walden).

37 Contrary to F2’s contentions, the pertinent customers are retailers and distributors, not end

users such as owners of residential swimming pools.  See F2’s Postconference Brief at 4; Conf. Tr. at 34,

87, 99 (Walden).

38 See http://www.archchemicals.com/Fed/Corporate/Products/treatment.htm and  

http://www.homedepot.com/b/Outdoors‐Outdoor‐Recreation‐Pools‐Hot‐Tubs‐Saunas‐Pools‐Pool‐

Chemicals/N‐5yc1vZc4j8 (EDIS Document No. 526864).

39 Conf. Tr. at 17, 20 (Walden); 117‐118 (Ferrell); F2’s Postconference Brief at 33.  
domestic

chemical

   

various p

Respond

respectiv

C

similariti

sodium h

and infor

record do

interchan

T

are signif

productio

indicates

same fac

chlorinat

G

facilities

hand, an

purposes

coextens

   

IV. D

T

like prod

a major p

industry,

domestic

the dome

                 40

41

Isos, USIT

42

at 4 and n

calcium h

43

the final p

relevant p

44

cally produce

l products su

Price.  Petit

possible subs

ents do not

ve prices of t

Conclusion.  A

es and diffe

hypochlorite

rmation on p

oes indicate

ngeability be

he record in

ficant differe

on inputs an

s that calhyp

cilities with t

ted isos in cl

Given the diff

and employ

d chlorinate

s of these pr

sive with the

             

Domestic In

he domestic

uct, or those

proportion o

the Commi

c production

estic mercha

                     

0 Petitioner’s

1 The pricing d

C Pub. 4431 a 2 Cf. Calcium H

n.9 (Commiss

ypochlorite b

3 The parties a

phase investig

products in w 4 19 U.S.C. § 1

ed calhypo n

uch as chlori

ioner states

stitutes for c

address this

these compo

As previously

rences amon

e, on the oth

producer an

some overl

etween the t

ndicates sign

ences in the

nd the effect

po, chlorinate

he same em

ose proximit

ferences in c

yees, there a

ed isos and s

reliminary de

e scope cons

ndustry  

c industry is

e producers

of the total d

ssion’s gene

n of the like p

ant market.

                  

Postconferen

data collected

at V‐7 to V‐8.

Hypochlorite f

ion determin

because as ch

are reminded

gations, they

written comme

1677(4)(A).

not only from

nated isos.

that there a

calhypo, but

s issue, and t

ounds.41

y discussed,

ng calhypo,

er, is limited

d customer

ap in channe

types of pro

ificant distin

chemical co

tive chlorine

ed isos, and

mployees.  In

ty due to the

chemical com

ppears to be

odium hypo

etermination

isting of all c

defined as t

whose colle

domestic pro

eral practice

product, wh

nce Brief, Res

d in the chlor

   

from Japan, 7

ed that chlor

emical comp

d that should

need to requ

ents on the d

9

m other calh

are significan

does not pr

there is limit

the informa

on the one h

d.  Informati

perceptions

els of distrib

ducts is not

nctions betw

ompositions

content of t

sodium hyp

addition, it

eir chemical

mposition, c

e a clear div

ochlorite, on

ns that there

calhypo.43  

he domestic

ective outpu

oduction of t

has been to

ether toll‐pr

ponse to Staf

inated isos in

731‐TA‐189 (P

inated isocya

ounds they a

they desire to

uest that the C

raft question

hypo produc

nt difference

rovide any fu

ted informa

ation in the r

hand, and ch

on on pricin

s is both indi

bution and e

complete.

ween the pro

of these pro

the differen

pochlorite ar

is dangerou

compositio

chlorine cont

iding line be

the other.42

e is a single d

c “producers

ut of a dome

the product.

o include in t

roduced, cap

ff Questions,

nvestigations

Preliminary),

anurates not p

re “quite dist

o make dome

Commission c

nnaires, pursu

ts, but also f

es in price a

urther inform

tion in the r

record perti

hlorinated is

ng is essentia

irect and inc

nd uses, alth

oducts.  In pa

oducts, as w

t products.  

re not manu

us to put calh

ons.   

tent, and ma

etween calhy

2

  We theref

domestic lik

s as a whole

stic like prod

.”44  In defin

the industry

ptively cons

at 2.  

are proprieta

USITC Pub. 1

part of same

tinct”).    

estic like prod

collect additio

uant to 19 C.F

from other

mong the

mation.40  

ecord on the

nent to the

socyanurate

ally non‐exis

conclusive.  T

hough

articular, the

well as in the

The record

factured in t

hypo and

anufacturing

ypo, on the

fore find for

ke product

of a domes

duct constitu

ing the dom

producers o

umed, or so

ary.  Chlorinat

1540 (June 19

like product

duct argumen

onal data on

F.R. § 207.20(

e

s and

stent,

The

ere

the

g

one

tic

utes

mestic

of all

ld in

ted

984),

as

nts in

the

(b).   
10

A. Sufficient Production‐Related Activities

In deciding whether a firm qualifies as a domestic producer of the domestic like product,

the Commission generally analyzes the overall nature of a firm’s U.S. production‐related

activities, although production‐related activity at minimum levels could be insufficient to

constitute domestic production.45

None of the parties in these preliminary phase investigations disputes that Arch and

Axiall are domestic producers of calhypo.  Petitioner argues, however, that the domestic firms

that solely tablet or repackage calhypo do not engage in sufficient production‐related activity to

qualify as domestic producers.46  F2 argues that the Commission should include in the domestic

industry the repackers and the private label marketers that buy calhypo and repack it under a

private label, tablet it, or reformulate it.47  JSCC states that the issue as to whether repackers,

private label marketers, or tableters should be included in the domestic industry should be

considered carefully by the Commission in any final phase investigations.48

We do not have sufficient information in the record of these preliminary phase

investigations to make a determination as to whether tableting or repacking constitutes

domestic production.49  The record contains no data for any U.S. firm that solely tablets or

repackages calhypo; the only available information on the domestic calhypo industry is from

Arch and Axiall.  In addition, the issue is essentially moot for these preliminary investigations

because there are no data from independent tableters to include or exclude.  We intend to seek

information on this issue in any final phase investigations.

         

B. Related Parties

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

excluded from the domestic industry pursuant to Section 771(4)(B) of the Tariff Act.  This

provision allows the Commission, if appropriate circumstances exist, to exclude from the

domestic industry producers that are related to an exporter or importer of subject merchandise

                                                       45 The Commission generally considers six factors:  (1) source and extent of the firm’s capital

investment; (2) technical expertise involved in U.S. production activities; (3) value added to the product

in the United States; (4) employment levels; (5) quantity and type of parts sourced in the United States;

and (6) any other costs and activities in the United States directly leading to production of the like

product.  No single factor is determinative and the Commission may consider any other factors it deems

relevant in light of the specific facts of any investigation.  See, e.g., Diamond Sawblades and Parts

Thereof from China and Korea, Inv. Nos. 731‐TA‐1092‐93 (Final), USITC Pub. 3862 at 8‐11 (July 2006).

46 Petition at 3, 17; Petitioner’s Postconference Brief at 6‐8.   47 F2’s Postconference Brief at 5‐8.

48 JSCC’s Postconference Brief at 2.

49 There is information in the record that Arch and Axiall accounted for the vast majority of

tableting production.  Petition at 3 and n.4; Petition Exh. GEN‐2 (affidavit of ***), at Paragraphs 7‐8.    
or which

discretio

O

related p

the dome

C

to includ

V. R

A

In

Commiss

States is

investiga

subject im

domestic

operatio

immater

domestic

                 50

without o

(Ct. Int’l T

Supp. 134

51

circumsta

(1

(2

whether t

enable it t

(3

or exclusi

v. United

52

the POI.  C

***.  ***

primary in

53

54

relevant t

to the det

55

are themse

n based upo

One U.S. calh

party.  We fin

estic industr

onsequently

e the two U

Reasonable

A. Legal

n the prelimi

sion determi

materially in

ation.53  In m

mports, thei

c producers

ns.54  The sta

ial, or unimp

c industry is

                     

0 See Torringt

opinion, 991 F

Trade 1989), a

48, 1352 (Ct. I 1 The primary

ances exist to

1) the percent

2) the reason

the firm bene

to continue p

3) the position

on of the rela

States, 790 F

2 *** stated t

CR at III‐5, n.5

is the *** an

nterest is clea

3 19 U.S.C. §§ 4 19 U.S.C. § 1

to the determ

termination.” 5 19 U.S.C. § 1

lves importe

on the facts p

hypo produce

nd that appr

ry.52   

y, we define

.S. producer

e Indicatio

Standard

inary phase

ines whethe

njured or thr

making this de

ir effect on p

of the dome

atute define

portant.”55  I

materially in

                  

ton Co. v. Unit

.2d 809 (Fed.

aff’d mem., 9

Int’l Trade 19

factors the C

exclude a rel

tage of dome

the U.S. prod

efits from the

production an

n of the relat

ated party wi

. Supp. at 116

hat it ***.  C

5; PR at III‐3,

d ***.  In ligh

arly in domes

1671b(a), 16

1677(7)(B).  T

mination” but

”  19 U.S.C. §

1677(7)(A).

ers.50  Exclus

presented in

er, ***, imp

ropriate circ

the domest

rs of granula

n of Mate

of antidump

er there is a r

reatened wi

eterminatio

prices for the

estic like pro

es “material

In assessing

njured by re

ted States, 79

. Cir. 1993); S

04 F.2d 46 (F

87).

Commission h

lated party in

estic producti

ducer has dec

LTFV sales or

nd compete in

ed producer v

ll skew the da

68.

R at III‐5; PR a

n.5.  By contr

ht of its extre

tic productio

673b(a).

he Commissio

shall “identif

1677(7)(B).

11

sion of such

n each invest

orted subjec

umstances d

tic industry i

ar calhypo:  A

rial Injury

ping and cou

reasonable i

th material i

n, the Comm

e domestic l

oduct, but on

injury” as “h

whether the

ason of subj

90 F. Supp. 11

Sandvik AB v.

ed. Cir. 1990)

has examined

clude the fol

on attributab

cided to impo

r subsidies or

n the U.S. ma

vis‐à‐vis the r

ata for the re

at III‐3.  *** i

rast, *** dom

mely limited

n and not in t

on “may cons

fy each {such}

a producer

tigation.51

ct merchand

do not exist

n these prel

Arch and Axi

by Reason

untervailing

indication th

injury by rea

mission must

ike product,

nly in the co

harm which

ere is a reas

ject imports

161, 1168 (Ct

United States

); Empire Plow

in deciding w

lowing:

ble to the imp

ort the produc

r whether the

rket; and

rest of the ind

st of the indu

mported ***

mestic produc

importation o

the importati

sider such oth

} factor ... {a}

is within the

dise and is th

to exclude t

liminary pha

iall.  

n of Subjec

duty investi

hat an indust

ason of the i

t consider th

, and their im

ntext of U.S

is not incon

onable indic

, we conside

. Int’l Trade 1

s, 721 F. Supp

w Co. v. Unite

whether appr

porting produ

ct subject to

e firm must im

dustry, i.e., w

ustry.  See, e.g

of subject m

ction during th

of subject me

ion of subject

her economic

nd explain in

e Commissio

herefore a

this firm from

ase investiga

ct Imports

gations, the

try in the Un

mports und

he volume o

mpact on

. production

sequential,

cation that t

er all relevan

1992), aff’d

p. 1322, 1331

ed States, 675

ropriate

ucer;

investigation

mport in orde

whether inclus

g., Torrington

merchandise d

he POI was **

erchandise, *

t merchandis

c factors as ar

full its releva

on’s

m

ations

s  

nited

er

of

n

he

nt

1‐32

5 F.

, i.e.,

er to

sion

n Co.

during

**.  

**

e.          

re

ance
12

economic factors that bear on the state of the industry in the United States.56  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.”57

Although the statute requires the Commission to determine whether there is a

reasonable indication that the domestic industry is “materially injured by reason of” unfairly

traded imports,58 it does not define the phrase “by reason of,” indicating that this aspect of the

injury analysis is left to the Commission’s reasonable exercise of its discretion.59  In identifying a

causal link, if any, between subject imports and material injury to the domestic industry, the

Commission examines the facts of record that relate to the significance of the volume and price

effects of the subject imports and any impact of those imports on the condition of the domestic

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

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

merely a temporal, nexus between subject imports and material injury.60

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

may also be having adverse effects on the domestic industry.  Such economic factors might

include nonsubject imports; changes in technology, demand, or consumer tastes; competition

among domestic producers; or management decisions by domestic producers.  The legislative

history explains that the Commission must examine factors other than subject imports to

ensure that it is not attributing injury from other factors to the subject imports, thereby

inflating an otherwise tangential cause of injury into one that satisfies the statutory material

injury threshold.61  In performing its examination, however, the Commission need not isolate

                                                       56 19 U.S.C. § 1677(7)(C)(iii). 57 19 U.S.C. § 1677(7)(C)(iii).

58 19 U.S.C. §§ 1671b(a), 1673b(a).

59 Angus Chemical Co. v. United States, 140 F.3d 1478, 1484‐85 (Fed. Cir. 1998) (“{T}he statute

does not ‘compel the commissioners’ to employ {a particular methodology}.”), aff’g 944 F. Supp. 943,

951 (Ct. Int’l Trade 1996).

60 The Federal Circuit, in addressing the causation standard of the statute, has observed that

“{a}s long as its effects are not merely incidental, tangential, or trivial, the foreign product sold at less

than fair value meets the causation requirement.”  Nippon Steel Corp. v. USITC, 345 F.3d 1379, 1384

(Fed. Cir. 2003).  This was re‐affirmed in Mittal Steel Point Lisas Ltd. v. United States, 542 F.3d 867, 873

(Fed. Cir. 2008), in which the Federal Circuit, quoting Gerald Metals, Inc. v. United States, 132 F.3d 716,

722 (Fed. Cir. 1997), stated that “this court requires evidence in the record ‘to show that the harm

occurred “by reason of” the LTFV imports, not by reason of a minimal or tangential contribution to

material harm caused by LTFV goods.’”  See also Nippon Steel Corp. v. United States, 458 F.3d 1345,

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

2001).

61 SAA, H.R. Rep. 103‐316, Vol. I at 851‐52 (1994) (“{T}he Commission must examine other

factors to ensure that it is not attributing injury from other sources to the subject imports.”); S. Rep. 96‐

249 at 75 (1979) (the Commission “will consider information which indicates that harm is caused by

factors other than less‐than‐fair‐value imports.”); H.R. Rep. 96‐317 at 47 (1979) (“in examining the

overall injury being experienced by a domestic industry, the ITC will take into account evidence

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

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

(Continued...)
13

the injury caused by other factors from injury caused by unfairly traded imports.62  Nor does the

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

or contemplate that injury from unfairly traded imports be weighed against other factors, such

as nonsubject imports, which may be contributing to overall injury to an industry.63  It is clear

that the existence of injury caused by other factors does not compel a negative

determination.64

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

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

as long as “the injury to the domestic industry can reasonably be attributed to the subject

imports” and the Commission “ensure{s} that it is not attributing injury from other sources to

the subject imports.”65 66  Indeed, the Federal Circuit has examined and affirmed various

Commission methodologies and has disavowed “rigid adherence to a specific formula.”67

                                                                                                                                                                              

(...Continued)

nonsubsidized imports or imports sold at fair value, contraction in demand or changes in patterns of

consumption, trade restrictive practices of and competition between the foreign and domestic

producers, developments in technology and the export performance and productivity of the domestic

industry”); accord Mittal Steel, 542 F.3d at 877.

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

injury caused by unfair imports.”); Taiwan Semiconductor Industry Ass’n , 266 F.3d at 1345. (“{T}he

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

Rather, the Commission must examine other factors to ensure that it is not attributing injury from other

sources to the subject imports.” (emphasis in original)); Asociacion de Productores de Salmon y Trucha

de Chile AG v. United States, 180 F. Supp. 2d 1360, 1375 (Ct. Int’l Trade 2002) (“{t}he Commission is not

required to isolate the effects of subject imports from other factors contributing to injury” or make

“bright‐line distinctions” between the effects of subject imports and other causes.); see also Softwood

Lumber from Canada, Inv. Nos. 701‐TA‐414 and 731‐TA‐928 (Remand), USITC Pub. 3658 at 100‐01 (Dec.

2003) (Commission recognized that “{i}f an alleged other factor is found not to have or threaten to have

injurious effects to the domestic industry, i.e., it is not an ‘other causal factor,’ then there is nothing to

further examine regarding attribution to injury”), citing Gerald Metals, 132 F.3d at 722 (the statute

“does not suggest that an importer of LTFV goods can escape countervailing duties by finding some

tangential or minor cause unrelated to the LTFV goods that contributed to the harmful effects on

domestic market prices.”).

63 S. Rep. 96‐249 at 74‐75; H.R. Rep. 96‐317 at 47.

64 See Nippon, 345 F.3d at 1381 (“an affirmative material‐injury determination under the statute

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

principal cause of injury.”).

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

affirmative determination unless it finds that a domestic industry is materially injured ‘by reason of’

subject imports, the Commission is not required to follow a single methodology for making that

determination ... {and has} broad discretion with respect to its choice of methodology.”) citing United

States Steel Group v. United States, 96 F.3d 1352, 1362 (Fed. Cir. 1996) and S. Rep. 96‐249 at 75.   66 Commissioner Pinkert does not join this paragraph or the following three paragraphs.  He

points out that the Federal Circuit, in Bratsk, 444 F.3d 1369, and Mittal Steel, held that the Commission

is required, in certain circumstances when considering present material injury, to undertake a particular

(Continued...)
14

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

cases in which the relevant “other factor” was the presence in the market of significant

volumes of price‐competitive nonsubject imports.  The Commission interpreted the Federal

Circuit’s guidance in Bratsk as requiring it to apply a particular additional methodology

following its finding of material injury in cases involving commodity products and a significant

market presence of price‐competitive nonsubject imports.68  The additional

“replacement/benefit” test looked at whether nonsubject imports might have replaced subject

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

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

Trinidad and Tobago determination that underlies the Mittal Steel litigation.

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

makes clear that the Federal Circuit does not require the Commission to apply an additional

test nor any one specific methodology; instead, the court requires the Commission to have

“evidence in the record ‘to show that the harm occurred ‘by reason of’ the LTFV imports,’” and

requires that the Commission not attribute injury from nonsubject imports or other factors to

subject imports.69  Accordingly, we do not consider ourselves required to apply the

replacement/benefit test that was included in Commission opinions subsequent to Bratsk.

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

involving commodity products where price‐competitive nonsubject imports are a significant

factor in the U.S. market, the Court will require the Commission to give full consideration, with

adequate explanation, to non‐attribution issues when it performs its causation analysis.70

                                                                                                                                                                              

(...Continued)

kind of analysis of non‐subject imports, albeit without reliance upon presumptions or rigid formulas.  

Mittal Steel explains as follows:

What Bratsk held is that “where commodity products are at issue and fairly traded, price

competitive, non‐subject imports are in the market,” the Commission would not fulfill

its obligation to consider an important aspect of the problem if it failed to consider

whether non‐subject or non‐LTFV imports would have replaced LTFV subject imports

during the period of investigation without a continuing benefit to the domestic industry.  

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

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

the period of investigation, and it requires the Commission to provide an explanation of

its conclusion with respect to that factor.   

542 F.3d at 878.    67 Nucor Corp. v. United States, 414 F.3d 1331, 1336, 1341 (Fed. Cir. 2005); see also Mittal Steel,

542 F.3d at 879 (“Bratsk did not read into the antidumping statute a Procrustean formula for

determining whether a domestic injury was ‘by reason’ of subject imports.”).

68 Mittal Steel, 542 F.3d at 875‐79.

69 Mittal Steel, 542 F.3d at 873 (quoting from Gerald Metals, 132 F.3d at 722), 875‐79 & n.2

(recognizing the Commission’s alternative interpretation of Bratsk as a reminder to conduct a non‐

attribution analysis).

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

present published information or send out information requests in final phase investigations to

producers in nonsubject countries that accounted for substantial shares of U.S. imports of subject

(Continued...)
15

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

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

evidence standard.71  Congress has delegated this factual finding to the Commission because of

the agency’s institutional expertise in resolving injury issues.72

B. Conditions of Competition and the Business Cycle73

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

The principal use for calhypo in the United States is the chlorination of water in

residential and commercial swimming pools.  Other uses include the disinfection of water and

waste water, as well as various cleaning and sanitizing applications.74  Other chemicals,

including chlorinated isos, may also be used in some of these applications.75

Apparent U.S. consumption of calhypo fluctuated within a narrow range during the POI,

declining from *** pounds in 2010 to *** pounds in 2011, and then increasing *** to ***

pounds in 2012.  It was *** pounds in interim 2012 and *** pounds in interim 2013.76  Market

participants reported that U.S. demand had fluctuated, but did not report any major changes in

                                                                                                                                                                              

(...Continued)

merchandise (if, in fact, there were large nonsubject import suppliers).  In order to provide a more

complete record for the Commission’s causation analysis, these requests typically seek information on

capacity, production, and shipments of the product under investigation in the major source countries

that export to the United States.  The Commission plans to continue utilizing published or requested

information in final phase investigations in which there are substantial levels of nonsubject imports. 71 We provide in our respective discussions of volume, price effects, and impact a full analysis of

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

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

F.3d at 1357; S. Rep. 96‐249 at 75 (“The determination of the ITC with respect to causation is ... complex

and difficult, and is a matter for the judgment of the ITC.”).    73 Pursuant to Section 771(24) of the Tariff Act, imports from a subject country of merchandise

corresponding to a domestic like product that account for less than 3 percent of all such merchandise

imported into the United States during the most recent 12 months for which data are available

preceding the filing of the petition shall be deemed negligible.  19 U.S.C. §§ 1671b(a), 1673b(a),

1677(24)(A)(i), 1677(24)(B); see also 15 C.F.R. § 2013.1 (developing countries for purposes of 19 U.S.C. §

1677(36)).  The subject imports in these investigations are not negligible.  The data indicate that subject

imports from China exceed the requisite 3 percent statutory negligibility threshold for the most recent

12‐month period prior to the filing of the petition for which data are available.  During the period

December 2012 – November 2013, subject imports from China accounted for 93.3 percent of total U.S.

imports of calhypo by quantity.  CR at IV‐5; PR at IV‐4. 74 CR at II‐7; PR at II‐4 to II‐5; Conf. Tr. at 15 (Walden). 75 CR at II‐8 to II‐9; PR at II‐5.

76 CR/PR at Tables IV‐4, C‐1.
16

demand during the POI.77  The U.S. market for calhypo is seasonal, reflecting the demand for

use in swimming pools, with U.S. producers’ sales much higher in the first half of the year.78  

Demand can also be affected by the weather, in that cold and rainy weather during the

swimming pool season can reduce demand for calhypo.79      

2. Supply Conditions

During the POI, the domestic industry was the predominant supplier of calhypo to the

U.S. market. The domestic industry’s share of apparent U.S. consumption was *** percent in

2010, *** percent in both 2011 and 2012, *** percent in interim 2012, and *** percent in

interim 2013.80

The domestic calhypo industry is relatively concentrated, with only two domestic

producers of granular product, Arch and Axiall.81  Arch was formed when Olin Corp. sold its

specialty chemicals division in 1999 and it was acquired by the Lonza Group in 2011.  Axiall was

formed in January 2013 when PPG Industries Inc.’s commodity chemicals division merged with

Georgia Gulf Corp.82  

*** experienced *** supply disruptions in 2012, involving ***.83 ***, resulting in an

increase in capacity from 2011 to 2012, but also contributing to a decrease in production.84  

Arch has affiliated calhypo production facilities in Brazil and South Africa.85  U.S. producers

export *** quantities of calhypo, with exports accounting for *** percent of shipments by U.S.

producers during the POI.86

The volume of subject imports increased by *** percent during the POI,87 and their

share of apparent U.S. consumption increased from *** percent in 2010 to *** percent in 2011

and *** percent in 2012; it was *** percent in interim 2012 and *** percent in interim 2013.88  

A majority of Chinese calhypo exports to the United States were produced by one producer,

JSCC, but ***.89   

Nonsubject imports have a very small presence in the market, ranging between ***

percent and *** percent of apparent U.S. consumption during the POI.90   The leading sources

of nonsubject imports are India and Japan.91     

                                                       77 CR at II‐8; PR at II‐5.

78 CR at II‐8; PR at II‐5; Conf. Tr. at 15 (Walden).

79 CR at II‐8; PR at II‐5; Conf. Tr. at 65 (Walden).

80 CR/PR at Tables IV‐5, C‐1.

81 CR at I‐3; PR at I‐3; Conf. Tr. at 86 (Walden).

82 CR at III‐1; PR at III‐1.

83 CR at III‐2; PR at III‐2.

84 CR at III‐2; PR at III‐2.

85 CR at I‐3; PR at I‐3; Conf. Tr. at 102‐103 (Walden).

86 CR/PR at Table III‐3.

87 CR/PR at Table C‐1.      88 CR/PR at Tables IV‐5, C‐1.

89 CR at VII‐4 to VII‐5; PR at VII‐3.

90 CR/PR at Tables IV‐6, C‐1.
17

3. Substitutability  

All responding U.S. producers and importers indicated that calhypo from China is either

always or frequently interchangeable with U.S.‐produced calhypo.92  The record indicates that

there is a moderate to high degree of substitutability between subject imports and domestic

product with the same chlorine content.93   

Particular segments of the calhypo market may prefer product with different chlorine

content levels.  Calhypo with chlorine content of over 70 percent is used to provide quick,

remedial increases in chlorine for swimming pool “shock treatment.”94  Some large retailers

may require calhypo with a lower chlorine content of 47 percent to 56 percent, because of fire

and warehouse safety concerns.95  The vast majority of subject imports have a chlorine content

of 65 to 68 percent, and JSCC may only hold U.S. Environmental Protection Agency (“EPA”)

registrations that permit importation of calhypo with 65 percent and 67 percent available

chlorine content.96   

  The parties have raised a number of issues that they assert either affect competition in

the U.S. market or serve to limit the substitutability of the domestic like product and the

subject imports.  We intend to explore these issues, listed below, further in any final phase

investigations.

 The significance of branding.97

 Whether subject imports are restricted in gaining access to the municipal public pool

and water treatment segments of the market by certification requirements restricting

which calhypo tablets can be used in tablet feeders designed by domestic calhypo

producers. 98   

 Whether the domestic industry is or has been willing to supply small calhypo

purchasers.99

 The importance of service obligations, including round‐the‐clock customer service and

“takebacks,” to big box stores and other large calhypo customers.100

                                                                                                                                                                              

(...Continued)

91 CR/PR at Table IV‐3.

92 CR/PR at Table II‐4.    93 CR at II‐9 to II‐12; PR at II‐6 to II‐8.      94 Conf. Tr. at 59 (Walden); CR at I‐10; PR at I‐7; JSCC’s Postconference Brief at 4.

95 JSCC’s Postconference Brief at 5, 8; F2’s Postconference Brief at 33; Conf. Tr. at 140‐141

(Ferrell).

96 JSCC’s Postconference Brief at 4‐6 and Exh. 6.  JSCC states that it may also have an EPA

registration for 70 percent chlorine content.  Id. at 5; Conf. Tr. at 131‐132 (Ferrell).     97 See Conf. Tr. at 17, 37‐38 (Walden); Conf. Tr. at 138 (Chen); F2’s Postconference Brief at 14;

Petitioner’s Postconference Brief at 15.

98 See JSCC’s Postconference Brief at 7‐8; F2’s Postconference Brief at 34; Petitioner’s

Postconference Brief at 13‐14; Conf. Tr. at 115‐116, 159, 164‐166 (Ferrell).

99 See JSCC’s Postconference Brief at 11‐14; Conf. Tr. at 54 (Walden); 144‐145 (Ferrell).
18

 The extent to which subject imports differ from the domestic like product in terms of

color quality and solubility, and the extent to which this affects purchaser decisions.101  

We also intend to explore possible differences in product range between the subject imports

and the domestic like product in any final phase investigations.  These include:

 The extent to which subject imports are limited in the chlorine content of the calhypo

they can supply to the U.S. market.

 The extent to which big box retailers and other purchasers require calhypo with chlorine

content that subject imports cannot supply.

 The extent to which products with different chlorine content can be substituted for each

other.   

 Whether the domestic industry competes with the subject imports at the high and low

ranges of chlorine content.102     

4. Other Conditions

The principal raw materials used to produce calhypo are chlorine, caustic soda, and

lime.103  Raw materials accounted for just over *** percent of domestic producers’ cost of

goods sold (COGS) during 2010 to 2012.104       

U.S. producers reported selling the majority of their calhypo under short term contracts.   

These contracts typically require the producer to commit to a fixed price for a year, but contain

no purchase obligation and no “meet or release” clause.  Customers can and do request

reductions in prices when offered a lower price from another supplier.105  Some large retailers

require calhypo suppliers to take back unsold product at the end of the season.106   

Calhypo is subject to regulation by the EPA under the Federal Insecticide, Fungicide and

Rodenticide Act.  The EPA’s regulations apply to specific concentrations of active chlorine so

that a producer selling calhypo at multiple concentration levels requires multiple EPA

registrations.107  Calhypo’s oxidizing properties can cause combustion of other materials, posing

                                                                                                                                                                              

(...Continued)

100 See JSCC’s Postconference Brief at 8‐9; F2’s Postconference Brief at 33‐34; Conf. Tr. at 60‐61

(Walden); 145 (Ferrell).

101 See CR at II‐11; PR at II‐7; Conf. Tr. at 113‐114, 160‐163 (Ferrell); Petitioner’ Postconference

Brief at 3 and Exh. 1.

102 See JSCC’s Postconference Brief at 4‐6, 8; F2’s Postconference Brief at 33; Petitioner’s

Postconference Brief at 11‐15; Conf. Tr. at 131‐132, 140‐141 (Ferrell).

103 CR at V‐1; PR at V‐1.  Electricity is also important to the production process.  Id.; Conf. Tr. at

82 (Walden).

104 CR at V‐1; PR at V‐1.

105 CR at V‐4; PR at V‐3; Conf. Tr. at 16‐17 (Walden).

106 Petitioner’s Postconference Brief at 15.

107 CR at I‐10; PR at I‐7.
19

fire hazards in transportation and storage.  The U.S. Department of Transportation classifies

calhypo containing more than 39 percent available chlorine content by weight as hazardous

material whose transportation requires special handling.  The National Fire Protection

Association has issued guidelines addressing storage of calhypo at retail facilities, including

requirements for sprinklers and recommended maximum quantities.108     

Calhypo has a relatively low value to weight ratio, so freight costs can be an appreciable

share of total delivered costs.109  Transportation costs to the U.S. market from China ranged

between 9 percent and 13 percent of the customs value of imports.110  U.S. producers reported

that their inland transportation costs ranged from *** percent to *** percent, while importers

reported inland transportation costs of 8 percent to 10 percent.111     

C. Volume of Subject Imports  

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

whether the volume of imports of the merchandise, or any increase in that volume, either in

absolute terms or relative to production or consumption in the United States, is significant.”112

The quantity of subject imports increased from 6.7 million pounds in 2010 to 9.5 million

pounds in 2011 and 10.6 million pounds in 2012.  It was 9.5 million pounds in interim 2012 and

12.0 million pounds in interim 2013. 113  Thus, the volume of subject imports increased by 58.4

percent from 2010 to 2012, while apparent U.S. consumption declined by *** percent during

the same period.114  Subject imports’ share of apparent U.S. consumption increased from ***

percent in 2010 to *** percent in 2011 and *** percent in 2012; it was *** percent in interim

2012 and *** percent in interim 2013.115   

The record indicates that subject imports took market share from the domestic industry.  

The subject imports gained *** percentage points of market share from 2010 to 2012, and the

domestic industry’s market share declined by *** percentage points during this period.116

Consequently, we find, for purposes of these preliminary determinations, that the volume of

subject imports, and the increase in that volume, are significant both in absolute terms and

relative to consumption in the United States.    

  

                                                       108 CR at I‐10; PR at I‐7; Conf. Tr. at 35‐36 (Walden).

109 CR at V‐1; PR at V‐1; Conf. Tr. at 17‐18 (Walden).

110 CR at V‐1; PR at V‐1. 111 CR at V‐3; PR at V‐1.  One importer reported inland shipment costs of 70 percent.  Id at V‐3,

n.3; PR at V‐1, n.3.     112 19 U.S.C. § 1677(7)(C)(i).

113 CR/PR at Tables IV‐2, C‐1. 114 CR/PR at Table C‐1.

115 CR/PR at Tables IV‐5, C‐1.

116 CR/PR at Tables IV‐5, C‐1.  The market share of subject imports was *** percentage points

higher in interim 2013 than in interim 2012, while the domestic industry’s market share was ***

percentage points lower.  Id.  
20

D. Price Effects of the Subject Imports

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

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  

(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.117

As previously stated, subject imports and the domestic like product are moderately to

highly substitutable for product with a similar chlorine content.  Accordingly, we find that price

is an important factor in purchasing decisions for calhypo between subject imports and

domestically produced product with similar chlorine content.118

In these preliminary phase investigations, the Commission collected pricing data on two

products.119  The reported pricing data accounted for approximately 16 percent of U.S.

shipments of subject imports and approximately *** percent of U.S. producers’ U.S. shipments

from January 2010 to September 2013.120  The subject imports undersold the domestic like

product in all 15 quarterly price comparisons during this period by margins ranging from ***

percent to *** percent.121  In light of the importance of price to purchasing decisions, we find

underselling by the subject imports to be significant for purposes of our preliminary

determinations.

Prices for the domestic like product fluctuated during the POI, declining from the first

quarter of 2010 through the third quarter of 2013 by *** percent for product 1 and by ***

percent for product 2.122  For product 1, prices for domestically produced product peaked

during the fourth quarter of 2011 and the first quarter of 2012 and were at period lows during

                                                       117 19 U.S.C. § 1677(7)(C)(ii).

118 CR at II‐9 to II‐12; PR at II‐6 to II‐8.

119 Both of the products consist of calcium hypochlorite, 65 to 68 percent available chlorine,

granular, 100 lbs, however packaged.  Separate pricing data were collected for product sold into the

repacker/private label channel and for product sold directly to dealers that serve the private residential

or commercial swimming pool channels.  CR at V‐6, PR at V‐4.  We invite the parties to identify

additional pricing products in their comments on the draft final phase questionnaires that would

enhance the Commission’s pricing analysis in the final phase investigations.   120 CR at V‐6; PR at V‐4. 121 CR at V‐12; PR at V‐6.   We reject F2’s argument that we should combine the pricing data for

products 1 and 2 into one pricing data set for purposes of our underselling analysis.  F2’s Postconference

Brief at 8‐9.  For its pricing analysis, the Commission endeavors to collect data on similar products at the

same level of trade, and it is consequently appropriate to report separately the pricing data from

different types of purchasers in these investigations. 122 CR/PR at Table V‐4.
21

interim 2013.123  For product 2, prices for domestically produced product peaked during the

second and third quarters of 2011 and reached a period low during the first quarter of 2012.124  

Reported prices of subject imports, which were for product 2, increased overall by *** percent

from the first quarter of 2010 through the third quarter of 2013.125  Four of six responding

purchasers stated that U.S. producers had reduced their prices to compete with the prices of

subject imports over the POI.126     

The record indicates that the domestic industry’s costs, in particular raw material costs,

rose during the POI and that the domestic industry was not able to raise prices accordingly.127  

The domestic industry’s ratio of COGS to net sales increased from *** percent in 2010 to ***

percent in 2011.  While it declined to *** percent in 2012 (still a higher level than in 2010), it

was higher in interim 2013 (*** percent) than in interim 2012 (*** percent).128  In light of these

data, we find for purposes of these preliminary determinations that there is evidence of price

suppression.  

The Commission was able to confirm lost sales allegations by the petitioner totaling

$*** and involving *** pounds of calhypo129 and lost revenue allegations totaling $***

involving *** pounds of calhypo.130  Five of six responding purchasers reported that they

shifted purchases of calhypo from U.S. producers to subject imports during the POI; all five

purchasers reported that price was the reason for their shift in purchasing.131  This provides

further indication that through underselling, the subject imports increased market penetration

during the POI at the expense of the domestic industry.

In light of the significant underselling, which accompanied gains in subject import

volume and market share, and evidence that the effect of the subject imports was to prevent

price increases which otherwise would have occurred, to a significant degree, we find for

purposes of these preliminary determinations that subject imports had significant adverse price

effects.

E. Impact of the Subject Imports132

Section 771(7)(C)(iii) of the Tariff 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.”  These factors include output, sales,

                                                       123 CR/PR at Table V‐2.

124 CR/PR at Table V‐3.

125 CR/PR at Table V‐4.

126 CR at V‐13; PR at V‐7.

127 CR at V‐1, VI‐9 to VI‐10; VI‐11 to VI‐12; PR at V‐1; VI‐2 to VI‐3; VI‐3 to VI‐4.      128 CR/PR at Tables VI‐1, C‐1.

129 CR/PR at Table V‐6.

130 CR/PR at Table V‐7.

131 CR at V‐13; PR at V‐7.

132 In its notice initiating the antidumping duty investigation on Calcium Hypochlorite from

China, Commerce reported estimated dumping margins ranging from 182.51 to 210.52 percent.  79 Fed.

Reg. 2410, 2413 (January 14, 2014).   
22

inventories, capacity utilization, market share, employment, wages, productivity, profits, cash

flow, return on investment, ability to raise capital, research and development, and factors

affecting domestic prices.  No single factor is dispositive and all relevant factors are considered

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

the affected industry.”

Based on the record of the preliminary phase of these investigations, we find that

subject imports had a significant impact on the domestic industry.  Many indicators of the

domestic industry’s performance, such as production, capacity utilization, U.S. shipments,

market share, employment, and operating income, declined between 2010 and 2012 and were

lower in interim 2013 than they were in interim 2012.  These declines in domestic industry

performance occurred during a period when demand was relatively unchanged, while subject

imports increased their volume and market share and undersold the domestic like product.    

U.S. producers’ capacity increased by *** percent overall from 2010 to 2012, remaining

unchanged at *** pounds in 2010 and 2011 and then increasing to *** pounds in 2012, when,

as previously discussed, ***.  It was *** pounds in interim 2012 and *** in interim 2013.133  

Production declined by *** percent overall from 2010 to 2012, declining from *** pounds in

2010 to *** pounds in 2011 and then increasing to *** pounds in 2012; it was *** pounds in

interim 2012 and *** pounds in interim 2013.134  Capacity utilization declined from *** percent

in 2010 to *** percent in 2011 and *** percent in 2012; it was *** percent in interim 2012 and

*** percent in interim 2013.135  The domestic industry’s share of apparent U.S. consumption

declined from *** percent in 2010 to *** percent in both 2011 and 2012.  It was *** percent in

interim 2012 and *** percent in interim 2013.136

Net sales declined by *** percent overall from 2010 to 2012, declining from *** pounds

in 2010 to *** pounds in 2011 and *** pounds in 2012.  Net sales were *** pounds in interim

2012 and *** pounds in interim 2013.137  U.S. shipments declined by *** percent overall from

2010 to 2012, declining from *** pounds in 2010 to *** pounds in 2011 and then increasing

slightly to *** pounds in 2012.  U.S. shipments were *** pounds in interim 2012 and ***

pounds in interim 2013.138 U.S. producers’ ending inventories increased by *** overall from

2010 to 2012, declining from *** pounds in 2010 to *** pounds in 2011 and then increasing to

*** pounds in 2012; they were *** pounds in interim 2012 and *** pounds in interim 2013.139

Employment declined by *** percent overall from 2010 to 2012, decreasing from ***

production‐related workers (PRWs) in 2010 to *** PRWs in 2011 and *** PRWs in 2012.  The

number of PRWs was *** in interim 2012 and *** in interim 2013.140  Hours worked declined

by *** percent overall from 2010 to 2012, declining from *** hours in 2010 to *** hours in

                                                       133 CR/PR at Tables III‐2, C‐1; CR at III‐2; PR at III‐2.

134 CR/PR at Tables III‐2, C‐1.

135 CR/PR at Tables III‐2, C‐1.      136 CR/PR at Tables IV‐5, C‐1.

137 CR/PR at Tables VI‐1, C‐1.

138 CR/PR at Tables IV‐4, C‐1.

139 CR/PR at Tables III‐5, C‐1.

140 CR/PR at Tables III‐5, C‐1.
23

2011 and *** hours in 2012; they were *** hours in interim 2012 and *** hours in interim

2013.141  Wages paid increased by *** percent overall from 2010 to 2012, declining from $***

in 2010 to $*** in 2011 and then increasing to $*** in 2012.  They were $*** in interim 2012

and $*** in interim 2013.142  Productivity (in pounds per hour) declined from *** in 2010 to

*** in 2011, and then increased to *** in 2012; it was *** in interim 2012 and *** in interim

2013.143     

Reflecting declining sales quantities and shipments, net sales value declined by ***

percent overall from 2010 to 2012, and were lower in interim 2013 than in interim 2012.  Net

sales value declined from $*** in 2010 to $*** in 2011, and then increased slightly to $*** in

2012.  Net sales value was $*** in interim 2012 and $*** in interim 2013.144  Both COGS and

selling, general and administrative (SG&A) expenses showed some fluctuations from 2010 to

2012 and were higher in interim 2013 than in interim 2012.145   

In light of the flat to increasing costs and expenses, the declines in revenues resulted in

operating performance declines.  Operating income declined by *** percent from 2010 to

2012, falling from $*** in 2010 to $*** in 2011, and then increasing to $*** in 2012.  It was

$*** in interim 2012 and $*** in interim 2013.146  The industry’s operating income margin

declined from *** percent in 2010 to *** percent in 2011 and then increased to *** percent in

2012; it was *** percent in interim 2012 and *** percent in interim 2013.147   

Based on the record of the preliminary phase of these investigations, we find that

subject imports are having an adverse impact on the domestic industry.  Increasing volumes of

subject imports that significantly undersold the domestic like product resulted in the subject

imports taking market share from the domestic industry.  These market share declines led to

declines in the domestic industry’s production, capacity utilization, and U.S. shipments.  

Reflecting declining revenues, operating income and ratios declined as well.  These trade and

performance indicators were also lower in interim 2013 than in interim 2012.148       

                                                       141 CR/PR at Tables III‐5, C‐1.

142 CR/PR at Tables III‐5, C‐1.

143 CR/PR at Tables III‐5, C‐1. 144 CR/PR at Tables VI‐1, C‐1.

145 CR/PR at Tables VI‐1, C‐1.

146 CR/PR at Tables VI‐1, C‐1. 147 CR/PR at Tables VI‐1, C‐1.  Capital expenditures increased from $*** in 2010 to $*** in 2011

and then declined to $*** in 2012.  Capital expenditures were $*** in interim 2012 and $*** in interim

2013.  CR/PR at Tables VI‐4, C‐1.  Research and development (R&D) expenses declined from $*** in

2010 to $*** in 2011 and then declined further to $*** in 2012.  R&D expenses were $*** in both

interim 2012 and interim 2013.  CR/PR at Table VI‐4.    148 JSCC argues that competition between subject imports and the domestic like product is

limited and that subject imports therefore could not be the cause of any injury to the domestic industry.  

JSCC’s Postconference Brief at 14, 22.  The current record does not contain clear and convincing

evidence of this proposition.  As previously discussed, there will be further examination of the nature

and extent of competition between the domestic like product and the subject imports in any final phase

investigations.  We will also further consider raw material costs and their impact on the industry’s

performance.  See F2’s Postconference Brief at 19‐23.   
  

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able C‐1.

24

ect imports

factors that

ure that we

*** decline

weather con

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larger than t

presence in

g between a

ind that non

hare during

s of these pr

e domestic in

termine that

jured by rea

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m *** pounds

* pounds in in

F2’s Postcon

onditions or c

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parent U.S. co

n declined to

rim 2013.  CR/

preliminary p

imports were

does not con

uring the peri

d *** percen

on the dom

t may have h

are not attr

in demand f

nditions and

ss in market

the *** decl

n the U.S. ma

low of *** p

nsubject imp

the POI.152

reliminary de

ndustry.

t there is a r

son of subje

than fair va

s in 2010 to **

nterim 2012 a

nference Brief

competition f

ercent during

onsumption b

*** percent

/PR at Tables

phase of these

e not a signifi

nduct an anal

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nt of the U.S.

mestic indust

had an adver

ibuting injur

from 2010 t

d in part by c

share and it

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arket during

percent in 20

ports cannot

         

etermination

reasonable i

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lue and are

** pounds in

and *** poun

f at 26‐28.  W

from other pr

g the POI.  CR/

by quantity inc

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2011, then

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We note that a

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/PR at Table C

creased from

y were ***

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the
I‐1

PART I: INTRODUCTION

BACKGROUND

These investigations result from a petition filed with the U.S. Department of Commerce

(“Commerce”) and the U.S. International Trade Commission (“USITC” or “Commission”) by Arch

Chemicals, Inc. (“Arch”), a Lonza Company, Atlanta, GA, on December 18, 2013, alleging that an

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

of subsidized and less‐than‐fair‐value (“LTFV”) imports of calcium hypochlorite (“calhypo”): 1

from China. The following tabulation provides information relating to the background of these

investigations.23  

Effective date Action 

December 18, 2013 Petition filed with Commerce and the Commission; 

institution of Commission investigations (78 FR 77712, 

December 24, 2013) 

January 8, 2014 Commission’s conference 

January 14, 2014 Commerce’s notice of AD initiation (79 FR 2410); 

Commerce’s notice of CVD initiation (79 FR 2417) 

January 31, 2014 Commission’s vote 

February 3, 2014 Commission’s determinations 

February 10, 2014 Commission’s views 

   

                                                      

1 See the section entitled “The Subject Merchandise” in Part I of this report for a complete

description of the merchandise subject to this/these investigation(s). 2 Pertinent Federal Register notices are referenced in app. A, and may be found at the Commission’s

website (www.usitc.gov).

3 A list of witnesses appearing at the conference is presented in app. B of this report.
I‐2

STATUTORY CRITERIA AND ORGANIZATION OF THE REPORT

Statutory criteria

Section 771(7)(B) of the Tariff Act of 1930 (the “Act”) (19 U.S.C. § 1677(7)(B)) provides

that in making its determinations of injury to an industry in the United States, the Commission‐‐ 

shall consider (I) the volume of imports of the subject merchandise, (II) the

effect of imports of that merchandise on prices in the United States for

domestic like products, and (III) the impact of imports of such

merchandise on domestic producers of domestic like products, but only in

the context of production operations within the United States; and. . .

may consider such other economic factors as are relevant to the

determination regarding whether there is material injury by reason of

imports.

Section 771(7)(C) of the Act (19 U.S.C. § 1677(7)(C)) further provides that‐‐ 

In evaluating the volume of imports of merchandise, the Commission shall

consider whether the volume of imports of the merchandise, or any

increase in that volume, either in absolute terms or relative to production

or consumption in the United States is significant.

. . .

In evaluating the effect of imports of such merchandise on prices, the

Commission shall consider whether. . .(I) there has been significant price

underselling by the imported merchandise as compared with the price of

domestic like products of the United States, and (II) the effect of imports

of such merchandise otherwise depresses prices to a significant degree or

prevents price increases, which otherwise would have occurred, to a

significant degree.

. . .

In examining the impact required to be considered under subparagraph

(B)(i)(III), the Commission shall evaluate (within the context of the

business cycle and conditions of competition that are distinctive to the

affected industry) all relevant economic factors which have a bearing on

the state of the industry in the United States, including, but not limited to

. . . (I) actual and potential decline 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
I‐3

domestic like product, and (V) in {an antidumping investigation}, the

magnitude of the margin of dumping.

Organization of report

Part I of this report presents information on the subject merchandise, alleged

subsidy/dumping margins, and domestic like product. Part II of this report presents information

on conditions of competition and other relevant economic factors. Part III presents information

on the condition of the U.S. industry, including data on capacity, production, shipments,

inventories, and employment. Parts IV and V present the volume of subject imports and pricing

of domestic and imported products, respectively. Part VI presents information on the financial

experience of U.S. producers. Part VII presents the statutory requirements and information

obtained for use in the Commission’s consideration of the question of threat of material injury

as well as information regarding nonsubject countries.

MARKET SUMMARY

Calhypo is generally used as a sanitizing agent for swimming pools, spas, and municipal

water treatment systems. The only two known U.S. producers of calhypo are Arch and Axiall

Corporation (“Axiall”), while leading producers of calhypo outside the United States include

Arch affiliates in Brazil (Arch Quimica Brasil Ltda.) and South Africa (Arch Water Products of

South Africa PTY).  India and Japan are also known to have production of calhypo.4 The top U.S.

importers of calhypo from China are: ***. Calhypo is also imported from nonsubject countries,

primarily India and Japan, but imports from China account for the vast majority (***) percent of

imported calhypo from 2010 to September 2013.  

Apparent U.S. consumption of calhypo totaled approximately *** in 2012. U.S.

producers’ U.S. shipments of calhypo totaled *** in 2012, and accounted for *** percent of

apparent U.S.  consumption by quantity and ***  percent by value. U.S. imports from subject

sources totaled 10.6 million pounds ($7.8 million) in 2012 and accounted for *** percent of

apparent U.S. consumption by quantity and *** percent by value. U.S. imports from nonsubject

sources totaled 741 thousand pounds ($1.2 million) in 2012 and accounted for *** percent of

apparent U.S. consumption by quantity and *** percent by value.  

                                                      

4 Conference transcript, p. 90‐91 (Walden).
I‐4

SUMMARY DATA AND DATA SOURCES

A summary of data collected in these investigations is presented in appendix C, table C‐

1. Except as noted, U.S. industry data are based on questionnaire responses of two firms that

accounted for all U.S. production of calhypo during 2012. U.S. imports are based on official

Commerce statistics. Data for producers in China are based on questionnaire responses of one

producer and one exporter in China.

PREVIOUS AND RELATED INVESTIGATIONS

Calhypo has been the subject of one prior antidumping duty investigation in the United

States. On April 25, 1984, Olin Corp., Stamford, CT filed a petition with the Commission and

Commerce, alleging that an industry in the United States was being materially injured or

threatened with injury by reason of LTFV imports of calcium hypochlorite from Japan. In April

1985, the Commission made an affirmative final determination,5 and Commerce issued an

antidumping duty order on calhypo from Japan.6 Commerce initiated a sunset review of the

order on December 2, 1998, but no domestic interested party responded to the notice of

initiation by the applicable deadline, and Commerce accordingly revoked the order, effective

January 1, 2000.7  

A related product, chlorinated isocyanurates (“chlorinated isos”), also used primarily for

swimming pool sanitation, has been the subject of several antidumping and countervailing duty

investigations. On May 14, 2004, a petition was filed by Clearon Corp. (“Clearon”), South

Charleston, WV, and Occidental Chemical Corporation (“Oxy”), Dallas, TX with Commerce and

the Commission alleging that an industry in the United States was materially injured by reason

of LTFV imports of chlorinated isocyanurates from China and Spain. On June 3, 2005, the

Commission made affirmative final determinations,8 and Commerce subsequently issued

antidumping duty orders on chlorinated isos from China and Spain.9 In 2010, the Commission

made affirmative determinations in its five‐year reviews regarding imports of chlorinated isos

from China and Spain10 and Commerce issued continuation of antidumping orders of

                                                      

5 Calcium Hypochlorite from Japan, 731‐TA‐189 (Final), USITC Publication 1672 (April 1985) (Vice

Chairman Liebeler and Commissioner Lodwick dissenting).

6 50 FR 15470, April 18, 1985. 7 December 1998 Sunset Reviews:  Final Results and Revocations, 64 FR 9473, February 26, 1999.

8 Chlorinated Isocyanurates From China and Spain:  Investigation Nos. 731‐TA‐1082 and 1083 (Final),

USITC Publication 3782, June 2005 and  Chlorinated Isocyanurates From China and Spain:

Determinations, 70 FR 36205, June 22, 2005.

9 Notice of Antidumping Duty Order: Chlorinated Isocyanurates from the People’s Republic of China,

70 FR 36561, June 24, 2005 and Notice of Antidumping Duty Order: Chlorinated Isocyanurates from

Spain, 70 FR 36562, June 24, 2005.

10 Chlorinated Isocyanurates From China and Spain: Determinations, 75 FR 61772, October 6, 2010.
I‐5

chlorinated isos from China and Spain.11 On August 29, 2013, Clearon and Oxy filed another

petition alleging that an industry in the United States is materially injured and threatened with

material injury by reason of subsidized imports of chlorinated isos from China and LTFV imports

of chlorinated isos from Japan. The Commission preliminarily determined that an industry in

the United States is materially injured by reason of subsidized imports from China and LTFV

imports from Japan of chlorinated isos.12  Commerce is scheduled to issue its preliminary

determinations on the countervailing duty of chlorinated isos from China and the antidumping

duty of chlorinated isos from Japan in February 2014.  

NATURE AND EXTENT OF ALLEGED SUBSIDIES AND SALES AT LTFV

Alleged subsidies

On January 14, 2014, Commerce published a notice in the Federal Register of the

initiation of its countervailing duty investigation on calhypo from China.13 Commerce found that

there is sufficient information to initiate a CVD investigation of 21 alleged programs.14  

Alleged sales at LTFV

On January 14, 2014, Commerce published a notice in the Federal Register of the

initiation of its antidumping duty investigation on calhypo from China.15 Commerce has

initiated an antidumping duty investigation based on estimated dumping margins of 182.51 to

210.52 percent for calhypo from China.16

                                                      

11 Chlorinated Isocyanurates from Spain and the People’s Republic of China: Final Results of the

Expedited Sunset Reviews of the Antidumping Duty Orders, 75 FR 49464, August 13, 2010. 12 Chlorinated Isocyanurates From China and Japan: Determinations, 78 F.R. 66767, Nov. 6, 2013.

13 Calcium Hypochlorite From the People’s Republic of China: Initiation of Countervailing Duty

Investigation, 79 FR 2417, January 14, 2014. 14 Ibid and Department of Commerce, CVD Initiation Checklist, Inv. No. C‐570‐991, January 7, 2014.

15 Calcium Hypochlorite From the People’s Republic of China: Initiation of Antidumping Duty

Investigation, 79 FR 2410, January 14, 2014.

16 Ibid.
I‐6

THE SUBJECT MERCHANDISE

Commerce’s scope

Commerce has defined the scope of these investigations as follows:

Calcium hypochlorite, regardless of form (e.g., powder, tablet (compressed),

crystalline (granular), or in liquid solution), whether or not blended with other

materials, containing at least 10% available chlorine measured by actual weight.

The scope also includes bleaching powder and hemibasic calcium hypochlorite.

Calcium hypochlorite has the general chemical formulation Ca(OCl)2, but may

also be sold in a more dilute form as bleaching powder with the chemical

formulation, Ca(OCl)2.CaCl2.Ca(OH)2.2H2O or hemibasic calcium hypochlorite

with the chemical formula of 2Ca(OCl)2.Ca(OH)2 or Ca(OCl)2.0.5Ca(OH)2. Calcium

hypochlorite has a Chemical Abstract Service (‘‘CAS’’) registry number of 7778–

54–3, and a U.S. Environmental Protection Agency (‘‘EPA) Pesticide Code (‘‘PC’’)

Number of 014701. The subject calcium hypochlorite has an International

Maritime Dangerous Goods (‘‘IMDG’’) code of Class 5.1 UN 1748, 2880, or 2208

or Class 5.1/8 UN 3485, 3486, or 3487.17

Tariff treatment

Based upon the scope set forth by the Department of Commerce, information available

to the Commission indicates that the merchandise subject to these investigations is classified

under subheadings 2828.10.00, 3808.94.50, or 3808.99.95 of the Harmonized Tariff Schedule of

the United States (2013). These subheadings have general rates of duty of 2.4 percent ad

valorem (for the separate chemically identifiable compound of chapter 28) and 5 percent ad

valorem (for disinfectants containing the compound).

                                                      

17 Calcium Hypochlorite From The People’s Republic of China: Initiation of Countervailing Duty

Investigation, 79 FR 2417, January 14, 2014.
I‐7

THE PRODUCT

Description and applications

Calhypo is a chemical compound used primarily as a sanitizing agent for swimming

pools, spas, and municipal water treatment systems. It is typically sold as a white solid in

powder, crystalline, or tablet18 form,19 although the solid may have a tint. Calhypo can also be

sold in a liquid solution.20 The active ingredient is chlorine, which acts as a biocide, killing algae

and other microbes. Calhypo can be sold as a pure product, with available chlorine

concentrations of 65‐80 percent21 or as a product blended with other ingredients. Blended

products typically include aglaecides and/or flocculants to clarify water and are most commonly

sold with available chlorine content of 45‐60 percent. Included in the scope for these

investigations are bleaching powder and hemibasic calcium hypochlorite which are calhypo

mixtures with lower percentages of available chlorine. The petitioner states that there are no

differences between domestic and subject imports. Respondents note that there are

differences in solubility and color.22

Calhypo’s effectiveness in sanitizing water is due to chlorine’s properties as a strong

oxidizing agent, disrupting the cellular activity of a broad range of microorganisms.23  

For these biocidal applications, calhypo is subject to regulation by the U.S. Environmental

Protection Agency (EPA) under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA).

EPA registrations apply to specific concentrations of active chlorine so that a producer selling

multiple concentrations requires multiple EPA registrations.  

Calhypo’s oxidizing properties also make it effective in degrading non‐living material, a

desirable quality in applications such as pool and spa maintenance. However, oxidizers can

enhance or cause the combustion of other materials, posing fire hazards in transportation and

storage. Domestically, the transportation of calhypo is regulated by the U.S. Department of

Transportation, which classifies products containing more than 39 percent chlorine content by

weight as a hazardous material whose transportation requires special handling. The National

Fire Protection Association (NFPA) classifies calhypo as a class I, II, or III oxidizer depending on

concentration. NFPA’s guidelines for storage at retail facilities include requirements for

sprinklers and recommended maximum quantities.

The principal application of calhypo in the United States is in water treatment at

commercial and residential pools and spas. Calhypo is used both to maintain regular chlorine

                                                      

18 Tablets are used often industrial applications that involve specialized feeding systems (Walden p.

43).

19 Petition, p. 10.

20 Conference transcript, p. 43 (Clarke). 21 Petition. P. 5. 22 Conference transcript, pp. 113‐115 (Ferrell).

23 McDonnell and Russell, “Antiseptics and Disinfectants: Activity, Action, and Resistance” American

Society for Microbiology. Clinical Microbiology Reviews retrieved at

http://cmr.asm.org/content/12/1/147.full on December 9, 2013.
I‐8

levels and/or to deliver quick, remedial increases in chlorine. Calhypo for pool and spa

applications typically contains 45, 68, or 75 percent available chlorine. Other applications as a

biocide include disinfection of drinking water and waste water, laundry, food and non‐food

contact surfaces, as well as washing fruits and vegetables. Calhypo also has applications other

than as a biocide, including treating cyanide in wastewater.24  

Calhypo is sold by manufacturers to end users, repackers, distributors, dealers, and

other retailers. Manufacturers may also engage contract and toll packagers to formulate,

tablet, or package products. In the retail market, repackers transfer bulk chemical into smaller

packages, in some cases with a private brand, and may tablet calhypo and/or blend it with

other components. Wholesale distributors market to commercial pools, retailers, and pool‐

service companies. Both specialty stores and large discount stores sell to retail consumers.

Providers of pool maintenance services and commercial pools and spas themselves are also

part of the retail distribution channel. In the institutional and industrial channel of distribution,

manufacturers may sell directly to end‐users or product may move through distributors and

repackers.  

Manufacturing processes

Calhypo is produced by combining chlorine and calcium hydroxide (lime). There are two

main production processes: one using sodium, and the other using calcium. The sodium process

yields higher available chlorine content and, with some variations, is used for all domestic

product and the majority of imported Chinese product. In the sodium process, caustic (NaOH)

and chlorine (Cl2) are combined in a reactor, yielding sodium hypochlorite (NaOCl), sodium

chloride (NaCl) and water. The sodium hypochlorite is then combined with hydrated lime and

chlorine to create calcium hypochlorite paste (Ca(OCl)2). Calcium hypochlorite paste is filtered

to produce a cake which is dried to a granular or powder form. This material is cooled,

compacted, and crushed, then screened for size. Under‐ and over‐sized material is recycled. The

resulting product typically has an available chlorine content of approximately 68 percent and

can be packaged for sale, blended with other materials, and/or tableted. Variations in the

sodium process include approaches that yield calhypo with different percentages of available

chlorine, both higher purity product (with 78 percent available chlorine) and lower purity

products, including bleaching powder (approximately 35 percent chlorine).

In the calcium process, lime is blended with chlorine to produce hemibasic calcium

hypochlorite crystals. After removal of calcium chloride by filtering or centrifuging, the crystals

are dried to make a final product with approximately 60 percent available chloride content. The

calcium process is believed to be used by some manufacturers in China, although not for export

to the United States.

                                                      

24 Petition, pp. 11‐12.
I‐9

THE DOMESTIC INDUSTRY

The petitioner proposes that the domestic industry should include the two producers of

calhypo, Arch and Axiall, but not companies who are solely repackers and tableters of

calhypo.25 The petitioner asserts that tableters and repackersshould not be considered as part of

the U.S. industry,stating that tableting requires a “small” investment26 and a “minimal” technical

expertise.27 It also statesthat the value‐added from tableting calhypo is about *** percent.28  

Respondent F2 believes that repackers and tableters should be considered as part of the

domestic industry given that they perform some of the same production activities as the

petitioner.29 Respondent F2 urges the Commission to consider firms that repack and private

label market calhypo (whether repacking it under a private label, tableting it, or reformulating

it) as part of the domestic industry.30 Respondent JSCC proposes that the Commission consider

including repackers and tableters as part of the domestic industry should these preliminary

investigations proceed to a final phase.31  

DOMESTIC LIKE PRODUCT ISSUES

The petitioner proposes a single domestic like product of all calcium hypochlorite

regardless of the method of manufacture, including any blended product containing available

chlorine of 10 percent or more, coterminous with the scope.32 Importer F2 asserts that the

Commission should define the domestic like product to include also trichloroisocyanuric acid

(trichlor), sodium dichloroisocyanuric in both its anhydrous and dihydrate forms (dichlor), and

sodium hypochlorite, commonly known as liquid bleach.33 Subject producer Sinopec Jianghan

Salt & Chemical Company (JSSC) notes that the proposed scope includes products with a lower

than typical concentration of available chlorine, such as bleaching powder and hemibasic

                                                      

25 Petition, p. 3 and petitioners’ postconference brief, p. 6.

26 The petitioners added that establishing a single line calhypo production facility costs *** while a

tableting press costs ***. Petition, p. 3 and petitioner’s postconference brief, p. 7.

27 Petitioner’s postconference brief, pp. 7‐8.

28 The petitioner asserts that the vast majority (more than 95 percent) of tableted calhypo sold in the

United States are produced by the two domestic producers, Arch and Axiall. Petition, p. 3. Arch notes

that at least two other companies, ***, may be toll processing calhypo. Conference transcript, p. 50

(Clarke) and E‐mail from Peggy Clarke, counsel for Arch, December 20, 2013.   29 F2 notes that the petitioner “has its own tableting operations (either in‐house or through a tolling

arrangement) and that the petitioner competes with the same repackers to which it has sold granular

calhypo. Respondent F2’s postconference brief, p. 6.  The petitioner notes that the two U.S. producers,

*** E‐mail from Peggy Clarke, counsel to petitioner, December 19, 2013.

30 F2’s postconference brief, pp. 5‐6.

31 JSCC’s postconference brief, pp. 1‐2.

32 Petition, pp. 5‐6.

33 F2 post conference brief, p.1.
I‐10

calcium hypochlorite, and high purity products, with at least 70 percent available chlorine. JSSC

goes on to suggest these two classes of products raise separate like product issues under the

Commission’s traditional six‐factor analysis.34  

Physical Characteristics and Uses

The petitioner states that all calhypo has similar physical characteristics, with all forms

of calhypo, including bleaching powder and hemibasic calcium hypochlorite based on the same

reaction, lime with chlorine, and having similar chemical composition.35 The petitioner states

that sodium hypochlorite differs from calhypo in that it ships with a relatively high quantity of

water, generally has a relatively low level of available chlorine, requires a relatively large

quantity in application, and degrades quickly, producing perchlorates. 36 At the molecular level,

calhypo features two hypochlorite ions (OCl‐

) bound to a single calcium ion (Ca2+). Sodium

hypochlorite has a related, but distinct, structure, with a single hypochlorite ion bound to a

single sodium ion (Na+

).37 In contrast, trichlor (Cl3(NCO)3), dichlor dihydrate (NaCl2(NCO)3

.

2H2O), and anhydrous dichlor (NaCl2(NCO)3) do not contain hypochlorite ions and are instead

characterized by the presence of cyanuric acid (CNOH)3

38 a cyclic compound, bound with either

chlorine or sodium chloride.39 The petitioner asserts that cyanuric acid can, over time, build up

and reduce the effectiveness of chlorine as a biocide.40  

F2 states that calhypo, dichlor, trichlor, and sodium hypochlorite share similar physical

characteristics and uses with all of these compounds used primarily for sanitation of swimming

pools, spas, and industrial water treatment. F2 notes similar ranges of available chlorine among

these compounds, with calhypo having available chlorine ranging from 10‐78 percent, sodium

hypochlorite at least 12.5 percent, trichlor 90 percent, anhydrous dichlor 56 percent, and

dihydrate dichlor 63 percent. F2 further notes similarity in the physical form and swimming

pool application among several of these compounds. Trichlor, typically used to maintain routine

chlorine levels, is commonly sold in a tablet form, while dichlor, typically used as shock

treatment to raise the chlorine concentration in pool water quickly, is commonly sold in a

granular form. Calhypo is sold in tablet or granular powder form, and can be used for shock

treatment or maintenance of chlorine level. In addition to the above uses, calhypo can also, F2

states, be used to disinfect water and waste water as well as cleaning and sanitizing

applications.41  

                                                      

34 JSSC post conference brief, p.2.

35 Petitioner post conference brief, p. 4.

36 Conference transcript, p. 45 (Walden).

37 Kirk‐Othmer, Encyclopedia of Chemical Technology, vol 4, pp. 682.

38 Chlorinated Isocyanurates From China and Japan, Investigation Nos. 701‐TA‐501 and 1226

(Preliminary), USITC Publication 4431, November 2013, p I‐5.

39 Kirk‐Othmer, Encyclopedia of Chemical Technology, vol 4, pp. 681‐682.

40 Conference transcript, p. 45 (Walden). 41 F2 post conference brief, pp. 2‐3.
I‐11

JSSC notes that diluted products such as bleaching powder and hemibasic calcium

hypochlorite have different chemical formulations from calhypo.42 The empirical formula for

bleaching powder (Ca(OCl)2

.

CaCl2

.

Ca(OH)2

.

2H2O) represents a crystalline structure with calhypo

bonded to calcium chloride, slaked lime, and water.43 The empirical formula for hemibasic

calcium hypochlorite (Ca(OCl)2

.

0.5Ca(OH)2)represents a crystalline structures with calhypo

bonded to slaked lime. 44 After further processing to purer forms of calhypo, water, calcium

chloride, and slaked lime remain present in the product, although at lower concentrations.45

Interchangeability

The petitioner asserts that calhypo is preferred over sodium hypochlorite, dichlor, and

trichlor as a backup sanitizer for drinking water. The petitioner asserts that, due to build‐up of

perchlorates, sodium hypochlorite poses issues in sanitizing drinking water that calhypo does

not, while dichlor and trichlor cannot be used due to the presence of cyanuric acid.46  

F2 states that trichlor and dichlor are interchangeable with calhypo in most common

applications: sanitation of pools and water. F2 further states that customers may prefer one

over the other due to differences in solubility, available chlorine, degree of storage hazard, and

residue. F2 asserts that trichlor and dichlor have been taking market share from calhypo, noting

this as a sign of interchangeability. F2 quotes the petitioner witness at the conference stating

that they are “good alternate substitutes to sanitized water.”47  

Bleaching powder is generally used in sanitation activities that are not sensitive to the

volume of insoluble chemicals, including disinfecting seawater and drainage ditches.48

Hemibasic calcium hypochlorite has limited use in sanitation and is generally used as an

alternative to bleaching powder.49

Manufacturing Processes

The petitioner states that all calhypo shares common manufacturing facilities with

differentiation between calcium hypochlorite, bleaching powder, and hemibasic calcium

hypochlorite depending on the point at which one takes product from the production line. The

petitioner further states that both the calcium and sodium calhypo production processes use

the same reaction.50   

                                                      

42 JSSC post conference brief, p. 2.

43 Petition, Exhibit GEN‐5, p. 958 44 Petition, Exhibit GEN‐5, p. 957.

45 Petition, Exhibit GEN‐5, p. 956.

46 Conference transcript, p. 46 (Walden). 47 F2 post conference brief, p. 3.

48 Petition, Exhibit GEN‐5, p. 958.

49 Petition, Exhibit GEN‐5, p. 957.

50 Petitioner post conference brief, p. 4.
I‐12

However, the petitioner characterizes the calhypo production processes as different

from those of sodium hypochlorite, dichlor, and trichlor.51 The petitioner states that the sodium

hypochlorite production process is simpler than that of calhypo and notes that dichlor and

trichlor cannot be produced in the same facilities as calhypo for safety reasons.52  

F2 asserts that calhypo, sodium hypochlorite, dichlor, and trichlor use common

manufacturing facilities, production processes, and production employees. F2 finds common

features in the feedstocks used in the production processes of calhypo (either chlorine, caustic

soda, and lime; or chloride and lime), sodium hypochlorite (caustic soda and liquid or gaseous

chlorine), and trichlor and dichlor (caustic soda, chlorine gas, and cyanuric acid).53 While all

three processes include caustic soda and chlorine, there are differences in the feedstocks, most

notably the usage of cyanuric acid in production of trichlor and dichlor. During production,

nitrogen present in cyanuric acid forms nitrogen gas and other nitrogen‐containing compounds

that require further processing before disposal to comply with environmental regulations.54

Channels of Distribution

The petitioner asserts that in the United States all calhypo is sold through the same

channels of distribution.  

F2 states that sodium hypochlorite, dichlor, trichlor, and calhypo are all sold through the

same channels of distribution. F2 states that trichlor is generally tableted and repackaged

whereas dichlor is generally repackaged without tableting before they, like sodium

hypochlorite, are sold directly to retailers (mass market retailers, pool supply stores, pool

maintenance services, pool service companies and smaller retailers) or to distributors who then

sell to retailers. F2 notes that calhypo is similarly sold to retailers and distributors and is also

sold to repackers/private label marketers and manufacturers of bulk chemicals.55   

Customer and Producer Perceptions

The petitioner states that all calhypo share similar customer and producer perceptions.

The petitioners note that all calhypo is used as a sanitizer (swimming pool, drinking water,

wastewater, or other industrial uses). Municipal water supplies typically use calhypo tablets,

swimming pools use the granular form, and industrial applications use hemibasic calcium

hypochlorite.56   

                                                      

51 Conference transcript, p. 45 (Walden).

52 Petitioner post conference brief at “Staff Questions Not Answered Elsewhere.” Responding to

Henderson, conference transcript pp. 43‐44.

53 F2 post conference brief, pp. 4‐5.

54 Chlorinated Isocyanurates From China and Spain, Investigation Nos. 731‐TA‐1082 and 1083 (Final),

USITC Publication 4184, April 20, 2005, p I‐7. 55 F2 post conference brief, pp. 3‐4.

56 Petitioner post conference brief, p. 5.
I‐13

F2 states that there is overlap in customer perceptions of dichlor, trichlor sodium

hypochlorite and calhypo due to common applications in pool and water sanitation. To support

this statement, F2 cites conference witness Walden who stated, “The average pool user is not

going to know one from the other.”57 However the context of this quote appears to suggest

that users would not know the difference between calhypo produced via sodium process versus

calhypo produced via calcium process, rather than between calhypo and other products. F2 also

cites the same witness for petitioners who identified only “convenience factors” differentiating

consumer perceptions of calhypo and trichlor. However, the context of this comment appears

to indicate a difference in consumer perception, suggesting that using quick‐dissolving calhypo

in feeder systems designed for trichlor creates “a mess” and has a negative impact on

consumer perceptions.58   

Price

The petitioner states that calhypo pricing is consistent with a single like product, varying

on the level of available chlorine and the amount of processing. As an example, petitioners note

that tablets are likely to be priced higher than granular calhypo.59 JSSC asserts that calhypo

products with at least 70 percent available chlorine content are sold with price premiums and

branded separately by domestic producers.60

                                                      

57 Conference transcript, p. 34 (Walden).

58 Conference transcript, pp. 47‐48 (Walden).

59 Petitioner post conference brief, p. 5.

60 JSSC post conference brief, p. 2.

II‐1

PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

U.S. MARKET CHARACTERISTICS

The Petitioner indicated that in the retail segment of the market, calhypo is largely used

in swimming pool and spa applications as well as for home septic/wastewater treatment.

Industrial applications, such as industrial water treatment, and use in cleansers, detergents, etc.

account for most of the rest of the end uses for the product.1

The Petitioner reports that Chinese imports first competed in the repacker/private label

channel of the U.S. market and in the past few years. They have begun to compete in the

branded channels of the market. It indicates that suppliers typically sell granular or powder

calhypo in bulk 100‐pound packages in the repacker/private label channel and granular or

tablet form in 1‐ to 100‐pound packages in the remainder of the pool and spa market.2

According to U.S. producer and importer questionnaire responses, the largest

purchasers of calhypo are *** which together purchase more than 40 percent of U.S. apparent

consumption of calhypo.

CHANNELS OF DISTRIBUTION

U.S. producers sold both to distributors and end users while importers sold almost

exclusively to distributors, as shown in table II‐1.  Since 2010, just over *** of U.S. producers’

sales were to distributors. According to the Petitioner, calhypo is sold directly to end users, as

well as to repackers/private label marketers, distributors, dealers, and other retailers.  It also

indicates that contract and toll packagers may be used to formulate, tablet and/or package

end‐use products.3

GEOGRAPHIC DISTRIBUTION

U.S. producers reported selling calhypo to all regions in the contiguous United States

(table II‐2). At least three importers reported selling calhypo imported from China to each

region and two of seven importers reported selling imports from China to all regions. For U.S.

producers, just under *** of sales were over 1,000 miles from their production facility, about

*** were between 101 and 1,000 miles, and a *** of sales were within 100 miles. The

Petitioner indicates that both domestic and imported calhypo compete on a national basis.4 The

vast majority of sales of imports of calhypo from China were shipped between 101 and 1,000  

 

1 Petition, p. 15. 2 Petition, pp. 15‐16.

3 Petition, pp. 12 and 25. 4 Petition, p. 16.
II‐2

Table II-1 

Calhypo: U.S. producers' and importers' U.S. shipments, by sources and channels of distribution, 

2010-12, January-September 2012, and January-September 2013 

* * * * * * *

Table II-2 

Calhypo: Geographic market areas in the United States served by U.S. producers and importers 

Region 

Number of firms 

U.S. producers 

Importers of product from: 

China 

Northeast 2 4

Midwest 2 4

Southeast 2 7

Central Southwest 2 6

Mountain 2 3

Pacific Coast 2 3

Otheri 2 1

 

All regions (except Other) 2 2

Reporting firms 2 7

 1 All other U.S. markets, including AK, HI, PR, and VI, among others. 

Source: Compiled from data submitted in response to Commission questionnaires. 

miles of the U.S. point of shipment, although two importers (***) reported making the bulk of

their sales within 100 miles of their U.S. point of shipment.   

SUPPLY AND DEMAND CONSIDERATIONS

U.S. supply

Domestic production

Based on available information, U.S. producers of calhypo have the ability to respond to

changes in demand with moderate changes in the quantity of shipments of U.S.‐produced

calhypo to the U.S. market. The main contributing factors to this degree of responsiveness of

supply are the existence of alternate markets and inventories, some availability of unused

capacity, and an inability to produce alternative products.

Industry capacity

Domestic capacity utilization decreased to just over *** percent in 2012. This level of

capacity utilization suggests that U.S. producers may have some available capacity to increase

production of product in response to an increase in prices.
II‐3

Alternative markets

U.S. producers’ exports, as a percentage of total shipments, fluctuated between *** and

*** percent since 2010, indicating that U.S. producers may have an ability to shift shipments

between the U.S. market and other markets in response to price changes. However, the

Petitioner indicates that it faces a substantially higher international freight rates than Chinese

producers.5

Inventory levels

U.S. producers’ inventories, as a share of total shipments, fluctuated since 2010

between *** and *** percent of total shipments. This level of inventories suggests that U.S.

producers may have an ability to respond to changes in demand with changes in the quantity

shipped from inventories.

Production alternatives

No U.S. producer stated that it could switch production from calhypo to other products.  

Supply constraints

No U.S. producer reported it had refused, declined, or was unable to supply calhypo

since 2010.

Subject imports from China

Based on available information, producers of calhypo from China have the ability to

respond to changes in demand with large changes in the quantity of shipments of calhypo to

the U.S. market. The main contributing factors to this degree of responsiveness of supply are

the existence of alternative markets and inventories.

Industry capacity

Chinese producers’ capacity utilization was greater than *** percent during the period

of investigation. This relatively high level of capacity utilization suggests that Chinese producers

may have limited available capacity to increase production of calhypo in response to an

increase in prices.

Alternative markets

Chinese producers’ exports to markets other than the United States, as a percentage of

total shipments, were greater than *** percent during the period of investigation. This

 

5 Petition, pp. 21‐22.
II‐4

indicates that Chinese producers may have an ability to shift shipments between the U.S.

market and other markets in response to price changes.  

Inventory levels

Chinese producers’ inventories, as a share of total shipments, increased from about ***

percent of total shipments in 2010 to *** percent of total shipments in 2012. These inventory

levels suggest that Chinese producers may have some ability to respond to changes in demand

with changes in the quantity shipped from inventories.

Production alternatives

No Chinese producer stated that it could switch production from calhypo to other

products.  

Supply constraints

Only one of seven responding importers of Chinese product reported that it had

refused, declined, or was unable to supply calhypo since January 1, 2010. *** reported that

from time to time it was unable to meet shipment commitments due to a lack of inventory.

Nonsubject imports

The largest source of nonsubject imports during 2010 to 2012 was India, which

accounted for 78 percent of nonsubject imports in 2012. The Petitioner indicates that

nonsubject imports are commercially insignificant, except for imports from India which are

becoming increasingly significant and may be improving in quality.6

  The Petitioner indicates

that the next two largest nonsubject suppliers are their production facilities in Brazil and South

Africa.7

U.S. demand

Based on available information, the overall demand for calhypo is likely to experience

moderate to high changes in response to changes in price. The main contributing factors are

the existence of substitute products and the large cost share of product in most of its end‐use

products.

End uses

U.S. demand for calhypo depends on the demand for U.S.‐produced downstream

products. A significant application for calhypo is the chlorination of water in residential and

 

6 Petition, p. 18. Conference transcript pp. 52‐53 (Walden). 7 Conference transcript, p. 53 (Clarke).
II‐5

commercial swimming pools.  In swimming pools, calcium hypochlorite is used to kill pathogens

and algae, as well as oxidize other non‐living contaminants. Other EPA‐registered uses for

calhypo included the disinfection of water and waste water, as well as cleaning and sanitizing

applications, including laundry, food‐and‐non‐food contact surfaces, and the washing of fruits

and vegetables. Because it is a strong oxidizer, it may also be used in a variety of other

applications not registered with the EPA such as treating cyanide in wastewater.8

Business cycles

Both responding U.S. producers and three of six responding importers indicated that the

market was subject to business cycles or conditions of competition. Specifically, producers and

importers indicated that that the market for calhypo is seasonal with demand lower in the

winter months. This seasonal demand is dictated by demand for use in swimming pools. Several

firms also indicated that demand for calhypo depends on the weather.  

Two changes in conditions of competition in the calhypo industry mentioned by

importers were the strong cost position of Axiall being fully integrated in raw materials and the

entrance of Axiall into the wastewater calhypo market.

Demand trends

All firms reported either that U.S. demand for calhypo has fluctuated or not changed

since 2010 (table II‐3).  *** reported that demand was relatively stable with about *** percent

annual growth.  Two importers indicated that demand depends on the weather.  Questionnaire

data for U.S. producer shipments and official U.S. import statistics show a decline in both the

quantity and average unit value of apparent consumption.

Substitute products

U.S. producers and importers reported that substitutes for calhypo include dichlor,

trichlor, liquid bleach, liquid and gaseous chlorine, cholorinated isocyanurates, lithium,

potassium monpersulfate, sodium hypochlorite, and ultraviolet disinfection.  In addition, the

Petitioner indicated that products such as enzymes, sodium percarbonate, bromine, biguanide,

salt generators, and polyhexamethylene biguanide (PHMB) can be used for the same end uses

as calhypo.9 Some firms indicated that changes in prices of gaseous chlorine, dichlor, tricolor,

sodium hypochlorite, and ultraviolet disinfection will affect the price of calhypo.

Cost share

Calhypo typically accounts for a large share of the cost of pool water disinfection and

water treatment. Almost all U.S. producers and importers reported cost shares of 70 percent or

greater for these applications.  

 

8 Petition, pp. 11‐12.

9 Petition, p. 14.
II‐6

Table II-3 

Calhypo: Firms’ responses regarding U.S. demand, by number of responding firms 

Item 

Number of firms reporting 

Increase No change Decrease Fluctuate 

Demand in the United States 

U.S. producers 0 2 0 0

Importers 0 2 0 4

Demand outside the United States 

U.S. producers 2 0 0 0

Importers 0 2 0 2

 Source: Compiled from data submitted in response to Commission questionnaires.

SUBSTITUTABILITY ISSUES

The degree of substitution between domestic and imported calhypo depends upon such

factors as relative prices, quality (e.g., grade standards, reliability of supply, defect rates, etc.),

and conditions of sale (e.g., price discounts/rebates, lead times between order and delivery

dates, payment terms, product services, etc.). Based on available data, staff believes that there

is a high degree of substitutability between domestically produced calhypo and calhypo

imported from China.  

Lead times

Calhypo is primarily sold from inventory. Both U.S. producers reported that at least ***

percent of their commercial shipments were from inventory, with lead times averaging ***.

The remaining commercial shipments were produced to order, with lead times averaging 14 to

21 days. Three of six importers reported that all of their shipments were sold from U.S.

inventory; one (***) reported that two‐thirds of its sales were from its U.S. inventory and the

rest were from foreign inventory. Reported lead times from U.S. inventory ranging from three

to 10 days and the one importer reporting making sales from foreign inventory with

a lead time of *** days. The remaining two importers reported making at least 65 percent of

their shipments on a produced‐to‐order basis with lead times of 30 to 150 days.

Factors affecting purchasing decisions

The Petitioner indicates that because calhypo is viewed as a commodity product, all

calhypo competes primarily on the basis of price. It also indicates that while prices vary

somewhat depending on the package size, brand awareness, and amount of available chlorine

content, these variations do not change the properties or uses of the product.10

 

10 Petition, p. 16.
II‐7

Comparison of U.S.‐produced and imported calhypo

All responding U.S. producers and importers indicated that calhypo imported from

China is either “always” or “frequently” interchangeable with U.S.‐produced calhypo (table II‐4).

U.S. importer F2 Industries indicated that U.S. produced product has better color quality

because it is whiter, and better solubility characteristics because it dissolves faster.11  However,

the Petitioner indicates that U.S.‐produced calhypo is not whiter nor does it dissolve faster than  

calhypo imported from China.12  Both Petitioner and respondents characterize calhypo as a

commodity product.13

The Petitioner indicated that imported and domestically produced calhypo is generally

comparable in quality and that customers can use them interchangeably. They reported that

generally both domestically produced and imported calhypo must meet customer specifications

and must be registered with the EPA.14 The Petitioner also indicated that the only distinction

between the like product and subject imports is that Petitioner's sales occur mostly  

under brand names, such as HTH and Poolife, while imports from China were unbranded

through the end of 2013.15

U.S. producers indicated that differences other than price between U.S. and Chinese

calhypo were *** significant while U.S. importers indicated that these differences were at least

“sometimes” significant (see table II‐5).

***. U.S. importer *** responded that it cannot purchase domestic product.  U.S.

importer *** indicated that quality and availability are important for its customers and that it

sells a ***.

 

11 Conference transcript, pp. 160‐63 (Ferrell). 12 Petitioner’s postconference brief, p. 3 and exhibit 1.

13 Conference transcript, p. 19 (Walden) and p. 110 (Chen). 14 Petition, p. 15.

15 Petition, p. 18.
II‐8

Table II-4 

Calhypo: Interchangeability between calhypo produced in the United States and in other 

countries, by country pairs 

Country pair 

Number of U.S. producers 

reporting 

Number of U.S. importers 

reporting 

A F S N A F S N 

 U.S. vs. China *** *** *** *** 3 2 0 0

 U.S. vs. other countries *** *** *** *** 2 1 0 0

 China vs. other countries *** *** *** *** 2 1 0 0

 Note.--A=Always, F=Frequently, S=Sometimes, N=Never.

Source: Compiled from data submitted in response to Commission questionnaires. 

Table II-5 

Calhypo: Significance of differences other than price between calhypo produced in the United 

States and in other countries, by country pairs 

Country pair 

Number of U.S. producers 

reporting 

Number of U.S. importers 

reporting 

A F S N A F S N 

 U.S. vs. China *** *** *** *** 1 2 2 0

 U.S. vs. other countries *** *** *** *** 1 1 1 0

 China vs. other countries *** *** *** *** 1 1 0 0

 Note.--A = Always, F = Frequently, S = Sometimes, N = Never. 

Source: Compiled from data submitted in response to Commission questionnaires. 
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 subsidies was presented in Part I of

this report and information on the volume and pricing of imports of the subject merchandise is

presented in Part IV and Part V. Information on the other factors specified is presented in this

section and/or Part VI and (except as noted) is based on the questionnaire responses of two

firms that accounted for the all U.S. production of calhypo from 2010 to September 2013.

U.S. PRODUCERS

The Commission sent U.S. producer questionnaires to two firms, Arch and Axiall, based

on information contained in the petition. Both firms provided usable data on their productive

operations. Staff believes that these responses represent all U.S. production of calhypo. The

petitioner, Arch, was formed in 1999 when Olin1 sold its specialty chemicals division. In 2011,

Arch was acquired by the Lonza Group. The other U.S. producer of calhypo is Axiall. Axiall was

formed on January 28, 2013 when PPG Industries, Inc.’s commodity chemicals division merged

with Georgia Gulf Corp.

Table III‐1 lists U.S. producers of calhypo, their headquarters, positions on the petition,

total production, and shares of total production.  

Table III-1 

Calhypo: U.S. producers of calhypo, their positions on the petition, headquarters, production, and 

shares of reported production, 2012 

Firm 

Position on 

the petition Headquarters

U.S. production 

(1,000 pounds)

Share of U.S. 

production 

(percent) 

Arch Chemicals, Inc.1 *** Atlanta, GA *** ***

Axiall Corp. *** Pittsburgh, PA *** ***

Total *** 100.0 1

 Arch is wholly owned by LG Acquisition Parent Corp., Allendale, NJ and is affiliated with ***. 

Source: Compiled from data submitted in response to Commission questionnaires. 

                                                      

1 Olin filed the 1984 antidumping petition with respect to calhypo from Japan. See Part I for more

details.
III‐2

U.S. PRODUCTION, CAPACITY, AND CAPACITY UTILIZATION

Table III‐2 presents U.S. producers’ production, capacity, and capacity utilization. U.S.

capacity increased from 2011 to 2012 due to ***.2 Actual production declined from 2010 to

2012, reflecting ***.3 Capacity utilization declined from *** percent in 2010 to *** percent in

2012.

Table III-2 

Calhypo: U.S. producers’ production, capacity, and capacity utilization, 2010-12, January to 

September 2012, and January to September 2013 

*            *            *            *            *            *            *

U.S. PRODUCERS’ U.S. SHIPMENTS AND EXPORTS

Table III‐3 presents U.S. producers’ U.S. shipments, export shipments, and total

shipments. ***.

*            *            *            *            *            *            *

U.S. PRODUCERS’ INVENTORIES

Table III‐4 presents U.S. producers’ end‐of‐period inventories and the ratio of these

inventories to U.S. producers’ production, U.S. shipments, and total shipments from January

2010 to September 2013. Both U.S. producers ***. It is typical in this industry for U.S.

producers to carry inventory as part of a “take‐back” program with certain big box stores such

as ***, requiring that unsold calhypo be shipped back to the supplier at the end of each

season.4

Table III-4 

Calhypo: U.S. producers’ inventories, 2010-12, January to September 2012, and January to 

September 2013 

*            *            *            *            *            *            *

                                                      

2 Arch reported that “***.

3 These ***. 4 Conference transcript, p. 146 (Ferrell) and petitioner’s postconference brief, p. 15.
III‐3

U.S. PRODUCERS’ IMPORTS AND PURCHASES

U.S. producer, Arch, ***.5 Arch ***.  U.S. producer, Axiall, reported that it ***.” Axiall

***.

U.S. EMPLOYMENT, WAGES, AND PRODUCTIVITY

Table III‐5 shows U.S. producers’ employment‐related data during the period examined.

From 2010 to 2012, the number of production and related workers (PRWs) and hours worked

by PRWs declined while wages paid to PRWs and hourly wages increased slightly.

Table III-5 

Calhypo: Average number of production and related workers, hours worked, wages paid to such 

employees, hourly wages, productivity, and unit labor costs, 2010-12, January to September 2012, 

and January to September 2013 

*            *            *            *            *            *            *

                                                      

5 Arch reported that “***.”   

IV‐1

PART IV: U.S. IMPORTS, APPARENT U.S. CONSUMPTION, AND MARKET

SHARES

U.S. IMPORTERS

The Commission issued importer questionnaires to eleven firms believed to be

importers of calhypo, as well as to all U.S. producers of calhypo.1 Usable questionnaire

responses were received from eight companies,2 representing 27.1 percent of total imports

from China between 2010 to September 2013 under HTS subheading 2828.10.00. Table IV‐1

lists all responding U.S. importers of calhypo from China and other sources, their locations, and

their shares of U.S. imports, from January 2010 to September 2013.   

The top ***;3 neither firm provided the Commission with questionnaire responses. Of

the responding firms, *** are the two largest importers of calhypo from China.  

Table IV-1 

Calhypo: U.S. importers by source from January 2010 to September 2013 

Firm Headquarters 

U.S. Imports 

(1,000 pounds) 

Share of U.S. 

imports (percent) 

China Other China Other 

Arch Chemicals, Inc.1 Atlanta, GA *** *** *** ***

Allchem Performance Products, Inc.2 Gainesville, FL *** *** *** ***

F2 Smyrna, TN *** *** *** ***

GWTC Weatherford, TX *** *** *** ***

Haviland Consumer Products Inc. Grand Rapids, MI *** *** *** ***

Norweco, Inc.3 Norwalk, OH *** *** *** ***

Ponda International Palo Alto, CA *** *** *** ***

Qualco, Inc.4 Passaic, NJ *** *** *** ***

Total 10,542 *** *** ***

 1 Arch, also a U.S. producer, *** 2 AllChem is ***. 

 3 Norweco ***. 4 Qualco ***. 

Source: Compiled from data submitted in response to Commission questionnaires. 

 

1 The Commission issued questionnaires to those firms identified in the petition, along with firms

that, based on a review of data provided by ***, may have accounted for the majority of total imports

under HTS subheading 2828.10.00 from January 2010 to September 2013.   2 ***.   3 ***. E‐mail from Matthew McConkey, Counsel to JSCC, January 22, 2014.
IV‐2

U.S. IMPORTS  

Table IV‐2 presents data for U.S. imports of calhypo from China and all other sources.

Table IV‐3 presents data for U.S. imports of calhypo from nonsubject countries. India and Japan

were the top sources of U.S. imports of calhypo from nonsubject countries from January 2010

to September 2013.

Table IV-2 

Calhypo: U.S. imports by source, 2010-2012 and January-September 2012 and January-September 

2013 

Item 

Calendar year January - September 

2010 2011 2012 2012 2013 

 Quantity (1,000 pounds) 

China 6,707 9,481 10,626 9,509 12,038

All other 341 1,790 741 548 631

Total 7,048 11,271 11,367 10,056 12,669

 Value (1,000 dollars) 

China 4,440 6,532 7,798 6,913 8,424

All other 264 1,223 559 415 471

Total 4,704 7,754 8,357 7,328 8,895

 Unit value (dollars per pound) 

China 0.66 0.69 0.73 0.73 0.70

All other 0.77 0.68 0.76 0.76 0.75

Total 0.67 0.69 0.74 0.73 0.70

 Share of quantity (percent) 

China 95.2 84.1 93.5 94.6 95.0

All other 4.8 15.9 6.5 5.4 5.0

Total 100.0 100.0 100.0 100.0 100.0

 Share of value (percent) 

China 94.4 84.2 93.3 94.3 94.7

All other 5.6 15.8 6.7 5.7 5.3

Total 100.0 100.0 100.0 100.0 100.0

 Source: Compiled from data provided by Department of Commerce. 

 
IV‐3

Table IV-3 

Calhypo: Nonsubject U.S. imports by source, 2010-2012 and January-September 2012 and 

January-September 2013 

Item 

Calendar year January - September 

2010 2011 2012 2012 2013 

 Quantity (1,000 pounds) 

India 107 838 578 392 631

Japan 215 308 123 123 0

Hong Kong 0 640 0 0 0

Canada 0 0 40 32 0

Finland 14 0 0 0 0

Thailand 0 4 0 0 0

other sources 4 0 0 0 0

Total 341 1,790 741 548 631

 Value (1,000 dollars) 

India 85 673 409 277 471

Japan 160 240 100 100 0

Hong Kong 0 307 0 0 0

Canada 0 0 50 38 0

Finland 6 0 0 0 0

Thailand 0 3 0 0 0

other sources 13 0 0 0 0

Total 264 1,223 559 415 471

 Unit value (dollars per pound) 

India 0.79 0.80 0.71 0.71 0.75

Japan 0.74 0.78 0.81 0.81 - 

Hong Kong - 0.48 - - - 

Canada - - 1.26 1.18 - 

Finland 0.40 - - - - 

Thailand - 0.58 - - - 

other sources 3.12 - - - - 

Total 0.77 0.68 0.76 0.76 0.75

Source: Compiled from data provided by Department of Commerce. 
IV‐4

NEGLIGIBILITY

The statute requires that investigations be terminated without an injury determination

if imports of the subject merchandise are found to be negligible.4 Negligible imports are

generally defined in the Tariff Act of 1930, as amended, as imports from a country of

merchandise corresponding to a domestic like product where such imports account for less

than 3 percent of the volume of all such merchandise imported into the United States in the

most recent 12‐month period for which data are available that precedes the filing of the

petition or the initiation of the investigations. However, if there are imports of such

merchandise from a number of countries subject to investigations initiated on the same day

that individually account for less than 3 percent of the total volume of the subject merchandise,

and if the imports from those countries collectively account for more than 7 percent of the

volume of all such merchandise imported into the United States during the applicable 12‐

month period, then imports from such countries are deemed not to be negligible.5 From

December 2012 to November 2013, imports from China accounted for 93.3 percent of total

imports of calhypo by quantity.6

Fungibility

All calhypo, whether domestically or foreign produced, is primarily used as a water

sanitizer in residential and commercial pools and in municipal water treatment facilities. See

Part II of this report for more details.

Presence in the market

Official Commerce data for U.S. imports were used to evaluate subject import presence

in the market. Imports from China were present in every month during January 2010 to

September 2013 and were the largest source for calhypo imports that time.

Geographical markets

Official Commerce statistics show that subject imports entered the United States in

most geographical regions.  The majority of U.S. imports from China entered through the ports

of (in order of quantity in 2012) New York, NY; Houston‐Galveston, TX; Dallas‐Fort Worth, TX;

Los Angeles, CA; Savannah, GA.

 

4 Sections 703(a)(1), 705(b)(1), 733(a)(1), and 735(b)(1) of the Act (19 U.S.C. §§ 1671b(a)(1),

1671d(b)(1), 1673b(a)(1), and 1673d(b)(1)). 5 Section 771 (24) of the Act (19 U.S.C § 1677(24)).

6 Monthly official Commerce statistics from HTS 2828.10.0000.
IV‐5

APPARENT U.S. CONSUMPTION  

Table IV‐4 presents data on apparent U.S. consumption and U.S. market shares for

calhypo from January 2010 to September 2013. Imports from China were less than seven

percent of apparent consumption from 2010 to 2012, but increased from 2010 to 2012.

Table IV-4 

Calhypo: U.S. shipments of domestic product, U.S. shipments of imports, and apparent U.S. 

consumption, 2010-2012 and January-September 2012 and January-September 2013 

Item 

Calendar year January - September 

2010 2011 2012 2012 2013 

 Quantity (1,000 pounds) 

U.S. producer's U.S. shipments *** *** *** *** ***

Imports from-- 

 China 6,707 9,481 10,626 9,509 12,038

 All other sources 341 1,790 741 548 631

 Total imports 7,048 11,271 11,367 10,056 12,669

Apparent consumption *** *** *** *** ***

 Value (1,000 dollars) 

U.S. producer's U.S. shipments *** *** *** *** ***

Imports from-- 

 China *** *** *** *** ***

 All other sources *** *** *** *** ***

 Total imports *** *** *** *** ***

Apparent consumption *** *** *** *** ***

 Source: Compiled from data submitted in response to Commission questionnaires. 
IV‐6

U.S. MARKET SHARES  

U.S. market share data are presented in table IV‐5.

Table IV-5 

Calhypo: U.S. consumption and market shares, 2010-2012 and January-September 2012 and 

January-September 2013 

*            *            *            *            *            *            *

RATIO OF IMPORTS TO U.S. PRODUCTION

Table IV‐6 presents data on the ratio of U.S. imports to U.S. production.

Table IV-6 

Calhypo: Ratio of U.S. imports to U.S. production, 2010-2012 and January-September 2012 and 

January-September 2013 

Item 

Calendar year January - September 

2010 2011 2012 2012 2013 

 Quantity (1,000 pounds) 

U.S. producer's U.S. shipments *** *** *** *** ***

U.S. imports from-- 

 China 6,707 9,481 10,626 9,509 12,038

 All other sources 341 1,790 741 548 631

 Total imports 7,048 11,271 11,367 10,056 12,669

 Ratio of imports to production 

U.S. imports from-- 

 China *** *** *** *** ***

 All other sources *** *** *** *** ***

 Total imports *** *** *** *** ***

 Source: Compiled from data submitted in response to Commission questionnaires. 
V‐1

PART V: PRICING DATA

FACTORS AFFECTING PRICES

Raw material costs

The major raw materials used to produce calhypo are chlorine and lime. Additionally,

electricity is an important input. Raw materials accounted for just over *** percent of the cost

of goods sold during 2010 to 2012. Petitioner indicates that unit costs of the key material inputs

of *** have increased *** percent over the period of investigation. According to publicly

available data, the price of lime increased by about 10 percent between January 2010 and

December 2013 (figure V‐1).  Also, aside from seasonal fluctuations, the industrial price of

electricity generally remained at the same level since January 2010.

Transportation costs to the U.S. market

Transportation costs to the U.S. market from China ranged between 9 percent and 13

percent of the customs value of imports.1 The Petitioner indicates that the relatively low value

to weight ratio of calhypo means that international freight costs are a significant share of total

delivered costs. It also alleges that Chinese producers have access to subsidized shipping from

COSCO, a Chinese state‐owned shipping line.2

U.S. inland transportation costs

All responding U.S. producers and importers reported that they typically arrange

transportation to their customers. U.S. producers reported that their U.S. inland transportation

costs ranged from *** to *** percent while importers reported costs of 8 to 10 percent.3

                                                      

1 This is measured as import charges as a share of the customs value of imports for HTS

2828.10.0000. USITC Dataweb, retrieved, December 30th 2013. 2 Conference transcript, pp. 17‐18 (Walden). Petition pp. 21‐22.

3 An exception is importer *** which reported inland shipment costs of 70 percent.
V‐2

Figure V-1 

Input prices: Average price of electricity and price index for lime, by month, January 2010-

December 2013 

Sources: Average retail price of electricity, industrial from EIA, downloaded January 22, 2013 and Bureau 

of Labor Statistics, Producer Price Index, Lime, PCU PCU3274103274100, downloaded January 22, 

2013. 
V‐3

PRICING PRACTICES

Pricing methods

All responding U.S. producers and importers reported using transaction‐by‐transaction

negotiations and some producers and importers also reported using contracts, price lists, and

other methods (table V‐1). ***.4 The Petitioner indicated that calhypo is generally sold on a

transaction‐by‐transaction basis, often tied to an evergreen contract.5 It indicated that many

big retailers and customers seek price quotes for the coming year in the third or fourth quarter

of the year.6

  

U.S. producers reported selling the majority of their calhypo using short term contracts.

Importers reported using the spot market for about half of their overall sales and short term

contracts for about one‐third of their sales, although this varied widely by importer.  Three of

six responding importers (***) reported making at least 93 percent of their sales on the spot

market and one importer (***) reported making one‐ half of its sales on the spot market.  Three

importers (***) reported making at least one‐half of their sales using short term contracts.   

The Petitioner indicated that contracts generally fix prices for 12 months and either

automatically renew or require consent of the parties to renew. However, the contracts have

no purchase obligations with regard to quantity. It indicates that there are generally no “meet

or release” clauses, but that customers can and do request Petitioner to reduce prices when

offered a lower price from a supplier.7

Sales terms and discounts

U.S. producers and importers quote prices on both f.o.b. and delivered bases. Both U.S.

producers and five of seven importers reported selling on an f.o.b. basis, while *** and three

importers reported making at least some of their sales on a delivered basis.

Both U.S. producers offer quantity, total volume, and other discounts, while no importer

reported offering quantity or total volume discounts. However, importer (***) reported

offering transaction‐by‐transaction discounts and importer (***) reported making early buy

discounts. In addition to quantity and volume discounts, U.S. producer ***. ***.  

***.  Arch indicates that all pricing information was provided net of discounts and

rebates.  However, Arch did not net out the cost of a customer rewards program for purchases

of a variety of pool and spa products that includes calhypo.  Arch estimates that in 2012, the  

                                                      

4 Email from ***, January 21, 2014. ***. 5 An evergreen contract is automatically renewed at the completion of the contract unless it is

cancelled by one of the parties to the contract.

6 Petition, p. 16. 7 Petition, p. 21.
V‐4

Table V-1 

Calhypo: U.S. producers and importers reported price setting methods, by number of responding 

firms1

Method U.S. producers Importers 

Transaction-by-transaction 2 6 

Contract 2 2 

Set price list *** 1 

Other *** 0 

1

 The sum of responses down may not add up to the total number of responding firms as each firm was 

instructed to check all applicable price setting methods employed.

Source: Compiled from data submitted in response to Commission questionnaires. 

total cost of one possible reward in the program (a leisure trip that was cited by respondents at

the preliminary conference) that could be attributed to sales of calhypo  is approximately $***

(less than *** percent of commercial sales).8

PRICE DATA

The Commission requested U.S. producers and importers to provide quarterly data for

the total quantity and f.o.b. value of the following calhypo products shipped to unrelated U.S.

customers between the first quarter of 2010 to the third quarter of 2013.

Product 1. ‐‐ Calcium hypochlorite, 65%‐68% available chlorine, granular, 100 lbs.,

however packaged, sold into the repacker/private label channel.

Product 2.‐‐ Calcium hypochlorite, 65%‐68% available chlorine, granular, 100 lbs.,

however packaged, sold directly to dealers that serve the private residential or

commercial swimming pool channels.

Two U.S. producers and four importers provided usable pricing data for sales of the

requested products, although not all firms reported pricing for all products for all quarters no

importers reported selling product 1.9 Pricing data reported by these firms accounted for

approximately *** percent of U.S. producers’ commercial shipments of calhypo and 16 percent

of subject imports from China during 2010 to the third quarter of 2013.

Price data for products 1 and 2 are presented in tables V‐2 to V‐3 and figure V‐2.  

                                                      

8 Petitioner’s postconference brief, “Staff Questions Not Answered Elsewhere,” conference

transcript, p. 107 (Chen),  p. 157 (Lehnardt), and staff calculations.

9 U.S. producer ***. Staff interview with *** of ***, January 22, 2014 and email from *** of ***,

January 22, 2014.
V‐5

Table V-2 

Calhypo: Weighted-average f.o.b. prices and quantities of domestic and imported product 11

 and 

margins of underselling/(overselling), by quarters, January 2010-September 2013 

*            *            *            *           *            *            *

Table V-3 

Calhypo: Weighted-average f.o.b. prices and quantities of domestic and imported product 21 and 

margins of underselling/(overselling), by quarters, January 2010-September 2013 

Period 

United States China 

Price 

(dollar per 

pound) 

Quantity

(thousands of 

pounds) 

Price

(dollar per 

pound) 

Quantity 

(thousands of 

pounds) 

Margin 

(percent) 

2010: 

Jan.-Mar. *** *** *** *** ***

Apr.-June *** *** *** *** ***

July-Sept. *** *** *** *** ***

Oct.-Dec. *** *** 0.94 262 ***

2011: 

Jan.-Mar. *** *** 0.98 226 ***

Apr.-June *** *** 0.95 440 ***

July-Sept. *** *** *** *** ***

Oct.-Dec. *** *** *** *** ***

2012: 

Jan.-Mar. *** *** *** *** ***

Apr.-June *** *** *** *** ***

July-Sept. *** *** *** *** ***

Oct.-Dec. *** *** *** *** ***

2013: 

Jan.-Mar. *** *** 1.03 472 ***

Apr.-June *** *** *** *** ***

July-Sept. *** *** *** *** ***

1

 Product 2: Calcium hypochlorite, 65%-68% available chlorine, granular, 100 lbs., however packaged, 

sold directly to dealers that serve the private residential or commercial swimming pool channels. 

Source: Compiled from data submitted in response to Commission questionnaires. 

Figure V-2 

Calhypo: Weighted-average prices and quantities of domestic and imported product, by quarters, 

January 2010-September 2013 

*            *            *            *           *            *            *
V‐6

Price trends

Prices for U.S.‐produced calhypo decreased between 2010 to the third quarter of 2013,

while the price of calhypo imported from China increased. Table V‐4 summarizes the price

trends, by country and by product. As shown in the table, domestic price decreases for the two

products were *** percent and ***percent between 2010 to the third quarter of 2013 while the

import price increase for product 2 was ***percent.

Table V-4 

Calhypo: Summary of weighted-average f.o.b. prices for products 1-4 from the United States and 

China 

*            *            *            *           *            *            *

Price comparisons

As shown in table V‐5, prices for calhypo imported from China were below those for

U.S.‐produced product in all 15 instances; margins of underselling ranged from *** to ***

percent. F2 respondents indicate that the Commission should combine the data collected for

products 1 and 2 into one product because calhypo is a commodity product sold on the basis of

price that there should be no differentiation in the product sold to repacker/private label and

pool dealer channels.10 When all data collected for products 1 and 2 are combined, there is

underselling in 8 of 15 instances with margins of underselling ranging from 0.4 to 21.5 percent.  

The 7 instances of overselling range from 3.0 to 9.4 percent.

Table V-5 

Calhypo: Instances of underselling/overselling and the range and average of margins, by product, 

January 2010-September 2013 

Source 

Underselling Overselling 

Number of 

instances 

Range 

(percent) 

Average 

margin 

(percent) 

Number of 

instances 

Range 

(percent) 

Average 

margin 

(percent) 

Product 2 15 *** 16.3 0 - - 

 Total 15 *** 16.3 0 - - 

Source: Compiled from data submitted in response to Commission questionnaires.

                                                      

10 Respondent F2’s postconference brief, pp. 8‐9.
V‐7

LOST SALES AND LOST REVENUE

The Commission requested U.S. producers of calhypo to report any instances of lost

sales or revenue they experienced due to competition from imports of calhypo from China

since 2010. Both responding U.S. producers reported that they had to reduce prices and one of

two producers reported rolling back announced price increases. The seven lost sales allegations

totaled $*** million and involved *** million pounds of calhypo and the five lost revenue

allegations totaled $*** million and involved *** million pounds of calhypo. Staff contacted

eight purchasers and a summary of the information obtained follows.

Five of six responding purchasers reported that they had shifted purchases of calhypo

from U.S. producers to subject imports since 2010; all five of these purchasers reported that

price was the reason for the shift. Four of six responding purchasers reported that the U.S.

producers had reduced their prices in order to compete with the prices of subject imports since

2010. One of these purchasers (***) indicated that suppliers raised prices in 2012 and reduced

prices in 2013. It also indicated that another scheduled price increase in 2012 did not occur.  

However, this purchaser wasn’t sure if this was because of imports of calhypo from China.

Purchaser *** indicated that ***.

Table V-6 

Calhypo: U.S. producers’ lost sales allegations 

*            *            *            *           *            *            *

Table V-7 

Calhypo: U.S. producers’ lost revenue allegations 

*            *            *            *           *            *            *

VI‐1

PART VI: FINANCIAL EXPERIENCE OF U.S. PRODUCERS

BACKGROUND

Part VI of this report presents the calhypo financial results of the two primary U.S.

producers of calhypo:  Arch (*** percent of total sales volume) and Axiall (*** percent of total

sales volume).1  Both companies reported their financial results for calendar‐year periods and

on the basis of generally accepted accounting principles (GAAP).     

In addition to its commercial sales, ***,2 while Axiall *** commercial sales of calhypo.3  

As noted in Part I of this report, both companies appear to use the same basic calhypo

production process.  At least one distinguishing characteristic, however, as discussed below

with respect to the pattern of company‐specific raw material costs, is that ***.4

As noted in Part III of this report, several notable events occurred during the period with

regard to U.S. calhypo operations:  ***; and the merger of PPG Industries Inc. Commodity

Chemicals (PPG) and Georgica Gulf Corporation (GGC) to form Axiall in late January 2013.  With

respect to the merger, Axiall stated that ***.5  The extent to which the other above‐referenced

events affected calhypo operations and corresponding financial results is discussed below.    

OPERATIONS ON CALHYPO

Income‐and‐loss data for the U.S. industry’s calhypo operations are presented in table  

VI‐1.   A variance analysis of these financial results is presented in table VI‐2.6  Selected

company‐specific financial information is presented in table VI‐3.

 

1 ***.    2 *** (see also footnote 7).  Petitioner’s postconference brief, p. 49.        3 ***.  January 13, 2014 e‐mail with attachment from counsel to Axiall to USITC auditor.   4 In Arch’s case the supplier of chlorine and caustic sold ***.  Petitioner’s postconference brief, p. 24.  

Axiall’s chlorine and caustic soda is produced at its Natrium, West Virginia facility where the company’s

calhypo is produced.  Axiall 2012 10‐K, p. 7.    5 January 13, 2014 e‐mail with attachment from counsel to Axiall to USITC auditor.  ***.  Ibid.  Axiall’s

overall operations reflect three reportable business segments:  Chlorvinyls (which includes calhypo

operations), Building Products, and Aromatics.  Axiall’s interim 2013 calhypo revenue, as reported to the

Commission, was approximately *** percent of the Chlorvinyl segment’s interim 2013 revenue.  Axial

2013 Q3 10‐Q, pp. 30‐31.  USITC auditor preliminary‐phase notes.

6 The Commission’s variance analysis is calculated in three parts:  sales variance, COGS variance, and

SG&A expenses variance.  Each part consists of a price variance (in the case of the sales variance) or a

cost variance (in the case of the COGS and SG&A expenses variances) and a volume (quantity) variance.  

The sales or cost variance is calculated as the change in unit price/cost times the new volume, while the

volume variance is calculated as the change in volume times the old unit price/cost.  Summarized at the

bottom of table VI‐2, the price variance is from sales, the cost/expense variance is the sum of those

items from COGS and SG&A, respectively, and the net volume variance is the sum of the price, COGS,

and SG&A volume variances.   
VI‐2

Table VI-1 

Calhypo: Results of operations of U.S. firms, 2010-12, January-September 2012, and JanuarySeptember 2013

* * * * * * * 

Table VI-2 

Calhypo: Variance analysis of U.S. firms’ operations, 2010-12, January-September 2012, and 

January-September 2013

* * * * * * * 

Table VI-3 

Calhypo: Results of operations of U.S. firms, by firm, 2010-12, January-September 2012, and 

January-September

* * * * * * * 

Revenue

On an overall basis, the revenue section of the table VI‐3 variance analysis shows that

the industry experienced negative sales volume variances of varying magnitudes throughout

the period.  Although *** in sales volume between 2010 and 2011, their *** with *** increases

after 2011 and *** declines for the rest of the period.  According to Arch, the ***.7  At the end

of the period, Arch’s ***.8

With regard to the pattern of its sales volume, Axiall stated that ***.9  ***.10   

In contrast with sales volume, overall price variances *** throughout the period:  

between 2010 and 2011 there was a small positive price variance, followed by a larger positive

price variance between 2011 and 2012, and then a large negative price variance between

interim 2012 and interim 2013.  The decline in the industry’s overall average sales value

between interim 2012 and interim 2013 (i.e., which in turn yields the large negative price

variance for that period shown in table VI‐2) was generated *** percentage declines in average

sales value.  Table VI‐3 shows that, while company‐specific average sales values were generally

***.11

 

A stable overall product mix generally enhances the utility of the Commission’s variance analysis.

Both Arch and Axiall generally indicated that product/customer mix did not change substantially during

the period.  Conference transcript, pp. 81‐82 (Walden).  Petitioner’s postconference brief, p. 47.  January

13, 2014 e‐mail with attachment from counsel to Axiall to USITC auditor.       7 Petitioner’s postconference brief, p. 49.   ***.    8 Petitioner’s postconference brief, p. 50.   9 January 13, 2014 e‐mail with attachment from counsel to Axiall to USITC auditor.  ***.  Axiall U.S.

producer questionnaire, note to table II‐8.   10 PPG declares caustic soda force majeure, Metal Bulletin Daily, April 15, 2011, Issue 258, p. 296.  

***.  January 16, 2014 e‐mail with attachment from counsel to Axiall to USITC auditor.    11 ***.
VI‐3

At the staff conference, an Arch company official stated that calhypo sales do not

include an index and/or other mechanism for passing through increases in primary raw material

costs.12  ***.13   

With regard to the pattern of average sales value, it is notable that the industry’s large

negative interim 2012‐13 price variance coincided with the period’s largest percentage increase

in average raw material cost; i.e., while average sales value was *** percent lower in interim

2013 compared to interim 2012,  average raw material cost was *** percent higher.  As

indicated below, the industry’s higher average raw material cost in interim 2013 compared to

interim 2012 was ***.  Note:  These percentage changes are based on unrounded unit values.  

Cost of goods sold and gross profit

Table VI‐1 shows that raw material cost (ranging from *** percent to *** percent of

total COGS) was the largest share of calhypo COGS only at the end of the period; i.e., when it

was marginally higher than other factory costs.  With regard to the relative importance of

specific inputs, Arch reported that chlorine represents approximately *** percent of total raw

material costs, followed by caustic soda (*** percent), and lime (*** percent).14  Axiall reported

that the share of these items were as follows:  chlorine *** percent, caustic soda (*** percent),

and lime (*** percent).15

In addition to somewhat different period‐to‐period directional trends, table VI‐3 also

indicates that *** (see footnote 16).16  Notwithstanding the above‐referenced difference in

company‐specific *** higher level of other factory costs (as a share of COGS and on an average

basis) (see footnote 20).

While fluctuating somewhat during the full‐year period, total raw material cost reached

its highest share of COGS (*** percent) in interim 2013 which in turn reflects the *** percent

increase ***.17  ***.18      

Other factory costs, which generally accounted for the largest share of COGS, ranged

from *** percent to *** percent of total COGS, while direct labor, the smallest component of

COGS, ranged from *** percent to *** percent of total COGS.  The large share of COGS

accounted for by other factory costs is consistent with the capital intensive nature of the

 

12 Conference transcript p. 84 (Walden).   13 January 13, 2014 e‐mail with attachment from counsel to Axiall to USITC auditor.    14 Petitioner’s postconference brief, p. 50.    15 January 16, 2014 e‐mail with attachment from counsel to Axiall to USITC auditor.  ***.  USITC

auditor preliminary‐phase notes.      16 The Commission’s standard practice is to require the elimination of any profit or (loss) on inputs

purchased from related suppliers; i.e., such that only the related supplier’s cost is recognized in the

COGS reported to the Commission.  ***.  January 16, 2014 e‐mail with attachment from counsel to Axiall

to USITC auditor.    17 Petitioner’s postconference brief, p. 50.

18 January 13, 2014 e‐mail with attachment from counsel to Axiall to USITC auditor.  ***.      
VI‐4

calhypo production process, as confirmed by both Arch and Axiall.19  While the underlying

calhypo production process of both companies is presumed to be similar and/or essentially the

same, Arch and Axiall appear to be ***.20

As shown in table VI‐3, *** reported increases in average other factory costs between

2010 and 2011 ***,21 ***.22  ***, as noted above (see footnote 10).    

To some extent, average other factory costs were also impacted by ***.23  

Table VI‐1 shows that the industry’s total gross profit fluctuated during the period:  

declining on an absolute basis and as a percent of sales in 2011, increasing somewhat in 2012

(recovering on an absolute basis part of the decline in 2011 and also reflecting a somewhat

higher gross margin), and then was lower in interim 2013 compared to interim 2012 (on both

an absolute and relative basis).   

As indicated in the table VI‐2 variance analysis, period‐to‐period changes in revenue and

cost varied in terms of their impact (positive and negative) on gross profit.  Between 2010 and

2011 average sales value remained essentially unchanged, while average raw material cost

increased *** percent and average other factory costs increased by *** percent.  

Notwithstanding the absence of a corresponding increase in average sales value to offset higher

raw material costs,  higher average other factory costs appears to be the more important factor

in terms of explaining the decline in gross profit between 2010 and 2011.24  In contrast,

between 2011 and 2012 the factors explaining the relative improvement in gross profit (on an

absolute and relative basis) included both a modest increase in average sales value (***

percent), a modest decline in average raw material cost (*** percent), and a decline in average

other factory costs (*** percent).  With respect to the lower absolute and relative gross profit

in interim 2013 compared to interim 2012, the primary cause was the combination of a decline

in average sales value and corresponding increase in average raw material costs.   As indicated

previously, while *** in interim 2013 compared to interim 2012, the directional trend in

average raw material costs was ***.   

 

19 Conference transcript, p. 86 (Walden).  January 13, 2014 e‐mail with attachment from counsel to

Axiall to USITC auditor.  ***.  Petitioner’s postconference brief, p. 50.  January 13, 2014 e‐mail with

attachment from counsel to Axiall to USITC auditor.      20 Conference transcript, p. 85 (Walden).  ***.  January 13, 2014 e‐mail with attachment from

counsel to Axiall to USITC auditor.   

***.            21 ***.        22 As described by the company, ***.  Petitioner’s postconference brief, p. 51.   

***.  Ibid.

23 January 13, 2014 e‐mail with attachment from counsel to Axiall to USITC auditor.   24 As indicated above, and in addition to other items noted specifically, it is important to note that

the level of average other factory costs indirectly reflects changes in throughput due to changes in

sales/production volumes.  In general, throughput impacts the level of average other factory costs as

fixed cost absorption increases or decreases; e.g., *** (see footnote 22).  While the level of fixed cost

absorption is important, activity which is nominally variable in nature can also become more or less

efficient depending on the level of throughput and can therefore also impact the level of average other

factory costs.  
VI‐5

SG&A expenses and operating income or (loss)

As shown in table VI‐3, ***.25  In its postconference brief, Arch described features of its

calhypo sales and marketing which ***.26  With regard to its calhypo sales and marketing, Axiall

stated that ***.27

On an overall basis, total SG&A expenses were at about the same level in 2010 and

2012, having declined in 2011 to their lowest full‐year level.  Corresponding full‐year SG&A

expense ratios moved within a relatively narrow range from a low of *** percent of sales in

2011 to a high of *** percent of sales in 2012.28  Interim period SG&A ratios could also be

characterized as relatively stable at *** percent of sales in interim 2012 compared to ***

percent of sales in interim 2013.  While higher period‐to‐period SG&A expense ratios in 2012

and interim 2013 did have a modest negative impact, the more important factors, in terms of

explaining the industry’s operating results, appear to be generally those discussed above with

regard to the pattern of gross profitability.   

CAPITAL EXPENDITURES AND RESEARCH AND DEVELOPMENT EXPENSES

Table VI‐4 presents company‐specific capital expenditures and research and

development (R&D) expenses related to U.S. calhypo operations.29  

Table VI-4 

Calhypo: Capital expenditures and research and development expenses, by firm, 2010-12, 

January-September 2012, January-September 2013 

* * * * * * * 

 

25 Selling expenses and G&A expenses, respectively, represent *** percent of the industry’s total

SG&A expenses.  While the absolute amount of Arch’s SG&A expenses were ***, both companies

reported *** SG&A expense profiles:  Arch (*** percent and *** percent, respectively, representing

selling and G&A expenses) and Axiall (*** percent and *** percent, respectively, representing selling

and G&A expenses).   26 Petitioner’s postconference brief at p. 24.  As described by Arch, ***.  Petitioner’s postconference

brief at p. 52.     27 As indicated in the trade information submitted by Arch and Axiall, ***.          28 In 2012 the SG&A expense numerator increased at a faster rate than the sales denominator:  

between 2011 and 2012 total SG&A expenses increased by *** percent, to an amount just below the

total amount reported in 2010, while corresponding total sales increased by only *** percent.

29 As reported by the U.S. industry, total assets were $*** in 2010, $*** in 2011, and $*** in 2012.  

With respect to a company’s overall operations, staff notes that a total asset value (i.e., the bottom line

value on the asset side of a company’s balance sheet) reflects an aggregation of a number of different

current and long‐term assets.  In this case and with respect to each company’s calhypo operations, the

above‐referenced asset values may generally be considered product specific inasmuch as both Arch and

Axiall reported that ***.   
VI‐6

The industry’s total capital expenditures reached their highest level in 2011 which in

large part reflects ***.30  Axiall’s capital expenditures ***.31    

R&D expenses were reported by both Arch and Axiall with the ***.32 33  

CAPITAL AND INVESTMENT

The Commission requested that U.S. producers describe any actual or potential negative

effects of imports of calhypo from China on their firms’ growth, investment, ability to raise

capital, development and production efforts, or the scale of capital investments.  The responses

of U.S. producers are presented below.  

Actual negative effects

Arch     ***.     

Axiall     ***.    

Anticipated negative effects

Arch ***

Axiall     ***. 

 

30 ***.  Petitioner’s postconference brief at p. 52.    31 January 13, 2014 e‐mail with attachment from counsel to Axiall to USITC auditor.

32 ***.  Petitioner’s postconference brief at p. 52.      33 ***.  January 13, 2014 e‐mail with attachment from counsel to Axiall to USITC auditor.    
VII‐1

PART VII: THREAT CONSIDERATIONS AND INFORMATION ON

NONSUBJECT COUNTRIES

Section 771(7)(F)(i) of the Act (19 U.S.C. § 1677(7)(F)(i)) provides that—

In determining whether an industry in the United States is threatened

with material injury by reason of imports (or sales for importation) of the

subject merchandise, the Commission shall consider, among other

relevant economic factors1‐‐ 

(I) if a countervailable subsidy is involved, such information as may

be presented to it by the administering authority as to the nature

of the subsidy (particularly as to whether the countervailable

subsidy is a subsidy described in Article 3 or 6.1 of the Subsidies

Agreement), and whether imports of the subject merchandise are

likely to increase,

(II) any existing unused production capacity or imminent, substantial

increase in production capacity in the exporting country indicating

the likelihood of substantially increased imports of the subject

merchandise into the United States, taking into account the

availability of other export markets to absorb any additional

exports,

(III) a significant rate of increase of the volume or market penetration

of imports of the subject merchandise indicating the likelihood of

substantially increased imports,

(IV) whether imports of the subject merchandise are entering at prices

that are likely to have a significant depressing or suppressing

effect on domestic prices, and are likely to increase demand for

further imports,

(V) inventories of the subject merchandise,

                                                            

1 Section 771(7)(F)(ii) of the Act (19 U.S.C. § 1677(7)(F)(ii)) provides that “The Commission shall

consider {these factors} . . . as a whole in making a determination of whether further dumped or

subsidized imports are imminent and whether material injury by reason of imports would occur unless

an order is issued or a suspension agreement is accepted under this title. The presence or absence of

any factor which the Commission is required to consider . . . shall not necessarily give decisive guidance

with respect to the determination. Such a determination may not be made on the basis of mere

conjecture or supposition.”
VII‐2

(VI) the potential for product‐shifting if production facilities in the

foreign country, which can be used to produce the subject

merchandise, are currently being used to produce other products,

(VII) in any investigation under this title which involves imports of both

a raw agricultural product (within the meaning of paragraph

(4)(E)(iv)) and any product processed from such raw agricultural

product, the likelihood that there will be increased imports, by

reason of product shifting, if there is an affirmative determination

by the Commission under section 705(b)(1) or 735(b)(1) with

respect to either the raw agricultural product or the processed

agricultural product (but not both),

(VIII) the actual and potential negative effects on the existing

development and production efforts of the domestic industry,

including efforts to develop a derivative or more advanced version

of the domestic like product, and

(IX) any other demonstrable adverse trends that indicate the

probability that there is likely to be material injury by reason of

imports (or sale for importation) of the subject merchandise

(whether or not it is actually being imported at the time).2

Information on the nature of the alleged subsidies was presented earlier in this report;

information on the volume and pricing of imports of the subject merchandise is presented in

Parts IV and V; and information on the effects of imports of the subject merchandise on U.S.

producers’ existing development and production efforts is presented in Part VI. Information on

inventories of the subject merchandise; foreign producers’ operations, including the potential

for “product‐shifting;” any other threat indicators, if applicable; and any dumping in third‐

country markets, follows. Also presented in this section of the report is information obtained

for consideration by the Commission on nonsubject countries.  

                                                            

2 Section 771(7)(F)(iii) of the Act (19 U.S.C. § 1677(7)(F)(iii)) further provides that, in antidumping

investigations, “. . . the Commission shall consider whether dumping in the markets of foreign countries

(as evidenced by dumping findings or antidumping remedies in other WTO member markets against the

same class or kind of merchandise manufactured or exported by the same party as under investigation)

suggests a threat of material injury to the domestic industry.”
VII‐3

THE INDUSTRY IN CHINA

The Commission issued foreign producers’ or exporters’ questionnaires to 20 firms

believed to produce and/or export calhypo from China.3 Usable responses to the Commission’s

questionnaire were received from two firms: Sinopec Jianghan Salt & Chemical Complex

("JSCC") and Tianjin Jinbin International Trade Co.,Ltd. (“Tianjin Jinbin”).  

JSCC reported that its production of calhypo accounted for *** percent of all calhypo

production in China during 2012.  JSCC’s *** and that it reported that its ***.4 JSCC’s ***.  The

*** of JSCC’s ***. JSCC reported that it is ***.  

Tianjin Jinbin reported that ***. Tianjin Jinbin ***. Tianjin Jinbin reported that its supply

of calhypo is ***.5 Tianjin Jinbin has ***.  

These firms’ exports to the United States accounted for the majority of U.S. imports of

calhypo from China from 2010 to 2012. According to the estimate provided by the only

responding Chinese producer, JSCC, the production of calhypo in China reported in this part of

the report accounts for approximately *** percent of overall production of calhypo in China

and ***6 percent of all calhypo exports to the United States from China in 2012. Table VII‐1

presents information on the calhypo operations of the responding producer and exporter in

China.

Table VII-1 

Calhypo: Data for producers in China, 2010-12, January-September 2012, and January-September 

2013, and projected 2013 and 2014 

*            *            *            *            *            *            *

U.S. INVENTORIES OF IMPORTED MERCHANDISE

Table VII‐2 presents data on U.S. importers’ reported inventories of calhypo.  

Table VII-2 

Calhypo: U.S. importers’ end-of-period inventories of imports, by source, 2010-12, JanuarySeptember 2012, and January-September 2013 

*            *            *            *            *            *            *

                                                            

3 ***.   4 JSCC reported ***. 5 Tianjin Jinbin reported that it *** 6 Tianjin Jinbin ***.
VII‐4

U.S. IMPORTERS’ OUTSTANDING ORDERS

The Commission requested U.S. importers to indicate whether they imported or

arranged for the importation of calhypo after September 30, 2013. *** U.S. importers stated

that they had arranged for importation from China after September 30, 2013.

Table VII-3 

Calhypo: U.S. importers' orders for delivery subsequent to September 30, 2013, by period 

*            *            *            *            *            *            *

ANTIDUMPING OR COUNTERVAILING DUTY ORDERS IN THIRD‐COUNTRY MARKETS

No producer, importer, or foreign producer reported any countervailing or antidumping

duty orders on calhypo from China in third‐country markets.

INFORMATION ON NONSUBJECT COUNTRIES

In assessing whether the domestic industry is materially injured or threatened with

material injury “by reason of subject imports,” the legislative history states “that the

Commission must examine all relevant evidence, including any known factors, other than the

dumped or subsidized imports, that may be injuring the domestic industry, and that the

Commission must examine those other factors (including non‐subject imports) ‘to ensure that it

is not attributing injury from other sources to the subject imports.’”7

Nonsubject imports accounted for less than 16 percent of the quantity of total U.S.

imports of calhypo under subheading 2828.10.00 in each year during the period of

investigation. In 2010 and 2012, non‐subject imports were less than 10 percent of total imports

(4.8 percent and 6.5 percent, respectively), while in 2011 non‐subject imports were 15.9

percent of total imports. India and Japan were the major sources of non‐subject imports for all

three years 2010‐12.

                                                            

7 Mittal Steel Point Lisas Ltd. v. United States, Slip Op. 2007‐1552 at 17 (Fed. Cir., Sept. 18, 2008),

quoting from Statement of Administrative Action on Uruguay Round Agreements Act, H.R. Rep. 103‐316,

Vol. I at 851‐52; see also Bratsk Aluminum Smelter v. United States, 444 F.3d 1369 (Fed. Cir. 2006).
A‐1

APPENDIX A

FEDERAL REGISTER NOTICES  

A‐3

The Commission makes available notices relevant to its investigations and reviews on its

website, www.usitc.gov.  In addition, the following tabulation presents, in chronological order,

Federal Register notices issued by the Commission and Commerce during the current

proceeding.

Citation Title Link

78 FR 77712,

December 24, 2013  

Petition filed with Commerce and

the Commission; institution of

Commission investigation

http://www.gpo.gov/fdsys/pkg/FR‐

2013‐09‐10/pdf/2013‐21903.pdf

79 FR 2410,  

January 14, 2014

Commerce’s notice of AD

initiation on China

http://www.gpo.gov/fdsys/pkg/FR‐

2014‐01‐14/pdf/2014‐00522.pdf

79 FR 2417,  

January 14, 2014

Commerce’s notice of CVD

initiation on China

http://www.gpo.gov/fdsys/pkg/FR‐

2014‐01‐14/pdf/2014‐00527.pdf

B‐1

APPENDIX B

CALENDAR OF THE PUBLIC STAFF CONFERENCE

B‐3

CALENDAR OF PUBLIC PRELIMINARY CONFERENCE

Those listed below appeared as witnesses at the United States International 

Trade Commission’s preliminary conference: 

Subject: Calcium Hypochlorite from China 

Inv. Nos.: 701-TA-510 and 731-TA-1245 (Preliminary) 

Date and Time: January 8, 2013 - 9:30 a.m. 

Sessions were held in connection with these preliminary investigations in the Main 

Hearing Room (room 101), 500 E Street, S.W., Washington, DC. 

TIME 

OPENING REMARKS: ALLOCATION:

Petitioner (Peggy A. Clarke, Law Offices of Peggy A. Clarke) 5 minutes 

Respondents (Irene H. Chen, Chen Law Group) 5 minutes 

 In Support of the Imposition of TIME 

Antidumping and Countervailing Duty Orders: ALLOCATION: 

Law Offices of Peggy A. Clarke 60 minutes 

Washington, DC 

on behalf of 

Arch Chemicals, Inc. 

Rick Walden, Senior Vice President, Arch Chemicals, Inc. 

Bruce Malashevich, President, Economic Consulting Services 

Peggy A. Clarke ) – OF COUNSEL
B‐4

In Opposition to the Imposition of TIME 

Antidumping and Countervailing Duty Orders: ALLOCATION:

Lehnardt & Lehnardt, LLC 60 minutes 

Liberty, MO 

and

Chen Law Group 

Rockville, MD 

on behalf of 

F2 Industries, LLC 

William (Reb) Ferrell, Owner, F2 Industries, Inc. 

Erik Warga, Economic Consultant, Erik Warga 

Consulting Services 

Mark B. Lehnardt ) 

) – OF COUNSEL 

Irene H. Chen ) 

REBUTTAL/CLOSING REMARKS:

Petitioner (Peggy A. Clarke, Law Offices of Peggy A. Clarke) 10 minutes 

Respondents (Irene H. Chen, Chen Law Group) 10 minutes 
C-1 

APPENDIX C

SUMMARY DATA

Table C-1

Calhypo: Summary data concerning the U.S. market, 2010-12, January to September 2012, and January to September 2013

Jan-Sept

2010 2011 2012 2012 2013 2010-12 2010-11 2011-12 2012-13

U.S. consumption quantity:

Amount...................................................................... *** *** *** *** *** *** *** *** ***

Producers' share (fn1).............................................. *** *** *** *** *** *** *** *** ***

Importers' share (fn1):

China...................................................................... *** *** *** *** *** *** *** *** ***

All others sources, nonsubject............................... *** *** *** *** *** *** *** *** ***

Total imports.................................................... *** *** *** *** *** *** *** *** ***

U.S. consumption value:

Amount...................................................................... *** *** *** *** *** *** *** *** ***

Producers' share (fn1).............................................. *** *** *** *** *** *** *** *** ***

Importers' share (fn1):

China...................................................................... *** *** *** *** *** *** *** *** ***

All others sources, nonsubject............................... *** *** *** *** *** *** *** *** ***

Total imports.................................................... *** *** *** *** *** *** *** *** ***

U.S. imports from:

China: CDE FG

Quantity.................................................................. 6,707 9,481 10,626 9,509 12,038 7 58.4 41.4 12.1 26.6

Value...................................................................... 4,440 6,532 7,798 6,913 8,424 12 75.6 47.1 19.4 21.9

Unit value............................................................... $0.66 $0.69 $0.73 $0.73 $0.70 18 10.9 4.1 6.5 (3.7)

Ending inventory quantity...................................... *** *** *** *** *** *** *** *** ***

All other sources:

Quantity.................................................................. 341 1,790 741 548 631 9 117.5 425.5 (58.6) 15.3

Value...................................................................... 264 1,223 559 415 471 14 112.1 363.5 (54.2) 13.3

Unit value............................................................... $0.77 $0.68 $0.76 $0.76 $0.75 20 (2.5) (11.8) 10.6 (1.7)

Ending inventory quantity...................................... *** *** *** *** *** *** *** *** ***

Total imports:

Quantity.................................................................. 7,048 11,271 11,367 10,056 12,669 10 61.3 59.9 0.9 26.0

Value...................................................................... 4,704 7,754 8,357 7,328 8,895 15 77.7 64.9 7.8 21.4

Unit value............................................................... $0.67 $0.69 $0.74 $0.73 $0.70 21 10.2 3.1 6.9 (3.7)

Ending inventory quantity...................................... *** *** *** *** *** *** *** *** ***

U.S. producers':

Average capacity quantity........................................ *** *** *** *** *** *** *** *** ***

Production quantity................................................... *** *** *** *** *** *** *** *** ***

Capacity utilization (fn1)........................................... *** *** *** *** *** *** *** *** ***

U.S. shipments:

Quantity.................................................................. *** *** *** *** *** *** *** *** ***

Value...................................................................... *** *** *** *** *** *** *** *** ***

Unit value............................................................... *** *** *** *** *** *** *** *** ***

Export shipments:

Quantity.................................................................. *** *** *** *** *** *** *** *** ***

Value...................................................................... *** *** *** *** *** *** *** *** ***

Unit value............................................................... *** *** *** *** *** *** *** *** ***

Ending inventory quantity......................................... *** *** *** *** *** *** *** *** ***

Inventories/total shipments (fn1).............................. *** *** *** *** *** *** *** *** ***

Production workers................................................... *** *** *** *** *** *** *** *** ***

Hours worked (1,000s)............................................. *** *** *** *** *** *** *** *** ***

Wages paid ($1,000)................................................ *** *** *** *** *** *** *** *** ***

Productivity (pounds per hour)................................. *** *** *** *** *** *** *** *** ***

Unit labor costs (dollars per pound)......................... *** *** *** *** *** *** *** *** ***

Net Sales:

Quantity.................................................................. *** *** *** *** *** *** *** *** ***

Value...................................................................... *** *** *** *** *** *** *** *** ***

Unit value............................................................... *** *** *** *** *** *** *** *** ***

Cost of goods sold (COGS)...................................... *** *** *** *** *** *** *** *** ***

Gross profit or (loss)................................................. *** *** *** *** *** *** *** *** ***

SG&A expenses....................................................... *** *** *** *** *** *** *** *** ***

Operating income or (loss)....................................... *** *** *** *** *** *** *** *** ***

Capital expenditures................................................. *** *** *** *** *** *** *** *** ***

Unit COGS................................................................ *** *** *** *** *** *** *** *** ***

Unit SG&A expenses................................................ *** *** *** *** *** *** *** *** ***

Unit operating income or (loss)................................ *** *** *** *** *** *** *** *** ***

COGS/sales (fn1)..................................................... *** *** *** *** *** *** *** *** ***

Operating income or (loss)/sales (fn1)..................... *** *** *** *** *** *** *** *** ***

Notes:

fn1.--Report data are in percent and period changes are in percentage points.

Source: Compiled from data submitted in response to Commission questionnaires and official Commerce statistics.

C-3

(Quantity=1,000 pounds; Value=1,000 dollars; Unit values, unit labor costs, and unit expenses=dollars per pound; Period changes=percent--exceptions noted)

Calendar year January to September

Report data

Calendar year

Period changes