U.S. International Trade Commission

Publication 4110 November 2009

Washington, DC 20436

Certain Sodium and Potassium Phosphate

Salts from China

Investigation Nos. 701-TA-473 and 731-TA-1173 (Preliminary)
U.S. International Trade Commission

COMMISSIONERS

Shara L. Aranoff, Chairman 

Daniel R. Pearson, Vice Chairman 

Deanna Tanner Okun 

Charlotte R. Lane 

Irving A. Williamson 

Dean A. Pinkert

Staff assigned

Address all communications to 

Secretary to the Commission 

United States International Trade Commission 

Washington, DC 20436

Robert A. Rogowsky

Director of Operations

Jennifer Merrill, Investigator

Jack Greenblatt, Industry Analyst

Craig Thomsen, Economist

Justin Jee, Accountant

David Goldfine, Attorney

Douglas Corkran, Supervisory Investigator

Special assistance from

Mara Alexander, Statistician
U.S. International Trade Commission

Washington, DC 20436 

www.usitc.gov

Publication 4110 November 2009

Certain Sodium and Potassium Phosphate

Salts from China

Investigation Nos. 701-TA-473 and 731-TA-1173 (Preliminary)

i

CONTENTS

Page

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

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

Separate views of Commissioner Charlotte R. Lane regarding TKPP . . . . . . . . . . . . . . . . . . . . . . . . 55

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

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

Statutory criteria and organization of the report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

Statutory criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

Organization of the report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2

U.S. market summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-2

DKP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

MKP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

STPP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

TKPP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

Summary data and data sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

Previous and related investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

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

Alleged subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

Alleged sales at LTFV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5

The subject merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5

Commerce’s scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5

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

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

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-7

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

Production processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9

Domestic like product issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10

Physical characteristics and uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-11

Manufacturing facilities and employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12

Interchangeability and customer and producer perceptions . . . . . . . . . . . . . . . . . . . . . . . . . . I-12

Channels of distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-13

Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-13

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

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

Channels of distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-2

Geographic markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-3

Supply and demand considerations ................................................ II-3

Supply ................................................................... II-3

Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-10

Substitutability issues .......................................................... II-15

Lead times . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-15

Comparison of domestic products, subject imports, and nonsubject imports ............. II-16
ii

CONTENTS

Page

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

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

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

U.S. producers’ shipments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-2

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

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

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

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-5

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

U.S. market shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-6

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

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

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

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

U.S. inland transportation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2

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

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

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

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

Price trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-10

Price comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-10

Lost revenues and lost sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-11

DKP lost sales and lost revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-11

MKP lost sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-12

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

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

General information on purchasing behavior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-13

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

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

Operations on DKP, MKP, STPP, and TKPP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-1

Capital expenditures and research and development expenses . . . . . . . . . . . . . . . . . . . . . . . . . . VI-4

Assets and return on investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-4

Capital and investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-5
iii

CONTENTS

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

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

U.S. importers’ current orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-5

U.S. inventories of phosphate salts from China ...................................... VII-5

Antidumping and countervailing duty investigations in third-country markets ............. VII-7

Information on nonsubject sources ................................................ VII-7

Appendixes

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

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

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

D. Quarterly domestic, subject, and nonsubject-country price data comparisons . . . . . . . . . . . . . . D-1

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

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

 1

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

 2

 Commissioners Charlotte R. Lane, Irving A. Williamson, and Dean A. Pinkert determine that there is a

reasonable indication that the domestic industry is materially injured by reason of subject imports.

 3

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

determine that there is a reasonable indication that the domestic industry is threatened with material injury by reason

of subject imports.

 4

 Commissioner Charlotte R. Lane determines that there is a reasonable indication that an industry producing

TKPP is materially injured by reason of subject imports.

UNITED STATES INTERNATIONAL TRADE COMMISSION

Investigation Nos. 701-TA-473 and 731-TA-1173 (Preliminary)

CERTAIN SODIUM AND POTASSIUM PHOSPHATE SALTS 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

producing monopotassium phosphate (“MKP”), provided for in subheading 2835.24.00 of the

Harmonized Tariff Schedule in the United States, is materially injured or threatened with material injury

by reason of imports from China, that are alleged to be subsidized by the Government of China and sold

in the United States at less than fair value (LTFV).2 3

 In addition, the Commission determines that there is

a reasonable indication that industries producing dipotassium phosphate (“DKP”) and tetrapotassium

pyrophosphate (“TKPP”), provided for in subheadings 2835.24.00 and 2835.39.10, respectively, of the

Harmonized Tariff Schedule of the United States, are threatened with material injury by reason of imports

from China, that are alleged to be subsidized by the Government of China and sold in the United States at

less than fair value (LTFV).4

 Finally, the Commission determines that there is no reasonable indication

that an industry producing sodium tripolyphosphate (“STPP”), provided for in subheading 2835.31.00 of

the Harmonized Tariff Schedule of the United States, is materially injured or threatened with material

injury, or that the establishment of an industry is materially retarded, by reason of imports from China,

that are alleged to be subsidized by the Government of China and sold in the United States at less than

fair value (LTFV).

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 September 24, 2009, a petition was filed with the Commission and Commerce by ICL

Performance Products LP, St. Louis, MO and Prayon, Inc., Augusta, 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 certain sodium and potassium phosphate salts from China. Accordingly, effective September

24, 2009, the Commission instituted countervailing duty investigation No. 701-TA-473 and antidumping

duty investigation No. 731-TA-1173 (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 October 1, 2009 (74 FR 50817). The conference was held in Washington, DC, on October 15, 2009,

and all persons who requested the opportunity were permitted to appear in person or by counsel.
 1

 Commissioners Lane, Williamson, and Pinkert find that there is a reasonable indication that an industry in the

United States is materially injured by reason of subject imports of MKP from China that are allegedly sold at less

than fair value, and Chairman Aranoff, Vice Chairman Pearson, and Commissioner Okun find that there is a

reasonable indication that in industry in the United States is threatened with material injury by reason of subject

imports of MKP from China that are allegedly subsidized and sold at less than fair value. 

 2 Commissioner Lane finds that there is a reasonable indication that an industry in the United States is materially

injured by reason of subject imports of TKPP that are allegedly subsidized and sold at less than fair value. See her

separate views. 

 3 Material retardation is not an issue in these investigations. 19 U.S.C. §§ 1671b(a), 1673b(a) (2000); see also

American Lamb Co. v. United States, 785 F.2d 994, 1001-04 (Fed. Cir. 1986); Aristech (cont. . . ) Chem. Corp. v.

United States, 20 CIT 353, 354-55 (1996).

 4 American Lamb, 785 F.2d at 1001; see also Texas Crushed Stone Co. v. United States, 35 F.3d 1535, 1543

(Fed. Cir. 1994).

3

VIEWS OF THE COMMISSION

Based on the record in the preliminary phase of these investigations, we find that there is no

reasonable indication that an industry in the United States is materially injured or threatened with material

injury by reason of subject imports of Sodium Tripolyphosphate (“STPP”) from China that are allegedly

sold at less than fair value and subsidized by the Government of China. We also find that there is a

reasonable indication that an industry in the United States is materially injured or threatened with material

injury by reason of imports of anhydrous Monopotassium Phosphate (“MKP”) from China that are

allegedly sold at less than fair value and subsidized by the Government of China.1

 We also find that there

is a reasonable indication that an industry in the United States is threatened with material injury by reason

of subject imports of Tetrapotassium Pyrophosphate (“TKPP”) and anhydrous Dipotassium Phosphate

(“DKP”) from China that are allegedly sold at less than fair value and subsidized by the Government of

China.2

 

I. THE LEGAL STANDARD FOR PRELIMINARY DETERMINATIONS

The legal standard for preliminary antidumping and countervailing duty determinations requires

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

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

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

of the allegedly unfairly traded imports.3

 In applying this standard, the Commission weighs the evidence

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

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

arise in a final investigation.”4

II. BACKGROUND

The petitions in these investigations were filed by domestic producers ICL Performance Products

LP (“ICL”), St. Louis, MO, and Prayon, Inc. (“Prayon”), Augusta, GA, (collectively referred to as “the

Petitioners”) on September 24, 2009. Representatives from these firms appeared at the staff conference

accompanied by counsel and submitted a postconference brief. Representatives and counsel for Chinese

producers Hubei Xingfa Chemical Group Co., Ltd., Sichuan Mianzhu Norwest Phosphate Chemical Co.

Ltd., Wuhan Waking Lion Chemicals Co., Ltd., Thermphos (China) Food Additive Co., Ltd., and

Lianyungang Natiprol Co., Ltd., (collectively referred to “the Chinese Respondents”) appeared at the staff

conference and submitted a postconference brief. The Commission received questionnaire responses

from three firms that accounted for almost all domestic production of STPP, MKP, DKP, and TKPP
 5

 CR/PR at III-1.

 6 CR/PR at IV-1. 

 7 19 U.S.C. § 1677(4)(A).

 8 19 U.S.C. § 1677(4)(A).

 9 19 U.S.C. § 1677(10).

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

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

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

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

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

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

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

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

Trade 1996).

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

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

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

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

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

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

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

(continued...)

4

during the period examined.5

 The Commission also received importer questionnaire data from 44 firms,

which accounted for *** percent of reported subject imports of STPP, *** percent of reported subject

imports of DKP and MKP, and more than *** percent of reported subject imports of TKPP in 2008.6

III. DOMESTIC LIKE PRODUCT AND INDUSTRY

A. In General

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

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

“domestic like product” and the “industry.”7

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

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

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

proportion of the total domestic production of the product.”8

 In turn, the Tariff Act defines “domestic like

product” as “a product which is like, or in the absence of like, most similar in characteristics and uses

with, the article subject to an investigation ... .”9

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

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

characteristics and uses” on a case-by-case basis.10 No single factor is dispositive, and the Commission

may consider other factors it deems relevant based on the facts of a particular investigation.11 The

Commission looks for clear dividing lines among possible like products and disregards minor variations.12

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

(“Commerce”) as to the scope of the imported merchandise that is subsidized or sold at less than fair

value,13 the Commission determines what domestic product is like the imported articles Commerce has
 13 (...continued)

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

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

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

Trade 1988).

5

identified.14 The Commission must base its domestic like product determination on the record in these

investigations. The Commission is not bound by prior determinations, even those pertaining to the same

imported products, but may draw upon previous determinations in addressing pertinent domestic like

product issues.15

B. Product Description

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

of these investigations as follows:

The phosphate salts covered by this investigation include Sodium

Tripolyphosphate (STPP), whether anhydrous or in solution, anhydrous

Monopotassium Phosphate (MKP), anhydrous Dipotassium Phosphate (DKP)

and Tetrapotassium Pyrophosphate (TKPP), whether anhydrous or in solution

(collectively “phosphate salts”). 

STPP, also known as Sodium triphosphate, Tripoly or Pentasodium triposphate,

is a sodium polyphosphate with the formula Na5O10P3. The American Chemical

Society, Chemical Abstract Service (“CAS”) registry number for STPP is 7758-

29-4. STPP is typically 25% phosphorus, 31% sodium and 57% diphosphorus

pentoxide (P2O5). STPP is classified under heading 2835.31.0000, HTSUS. 

TKPP, also known as normal potassium pyrophosphate, Diphosphoric acid or

Tetrapotassium salt, is a potassium salt with the formula K4P2O7. The CAS

registry number for TKPP is 7320-34-5. TKPP is typically 18.7% phosphorus

and 47.3% potassium. It is generally greater than or equal to 43.0% P2O5

content. TKPP is classified under heading 2835.39.1000, HTSUS. 

MKP, also known as Potassium dihydrogen phosphate, KDP, or Monobasic

potassiumphosphate, is a potassium salt with the formula KH2PO4. The CAS

registry number for MKP is 7778-77-0. MKP is typically 22.7% phosphorus,

28.7% potassium and 52% P2O5. MKP is classified under heading

2835.24.0000, HTSUS. 

DKP, also known as Dipotassium salt, Dipotassium hydrogen orthophosphate or

Potassium phosphate, dibasic, has a chemical formula of K2HPO4. The CAS

registry number for DKP is 7758-11-4. DKP is typically 17.8% phosphorus,
 16 74 Fed. Reg. 54024 (Oct. 14, 2009). In its notice, Commerce indicated that Petitioners sought a single class or

kind of subject merchandise, but also sought four domestic like products. In finding sufficient standing to initiate

these investigations, Commerce relied on the Petitioners’ like product definitions. 74 Fed. Reg. at 54025. 

 17 Confidential Report (“CR”) INV-GG-105 (Nov. 2, 2009) at I-11, Public Report (“PR”) at I-8; CR/PR at II-1.

 18 CR at I-11, PR at I-8; CR/PR at II-1.

 19 CR/PR at II-1. 

 20 CR/PR at II-1. 

 21 Petitioners’ Postconf. Br. at 2. 

 22 Chinese Respondents’ Postconf. Br. at 1; Conf. Tr. at 154.

6

44.8% potassium and 40% P2O5 content. DKP is classified under heading

2835.24.0000, HTSUS. 

The products covered by this investigation include the foregoing phosphate salts

in all grades, whether food grade or technical grade. The product covered by this

investigation includes anhydrous MKP and DKP without regard to the physical

form, whether crushed, granule, powder or fines. Also covered are all forms of

STPP and TKPP, whether crushed, granule, powder, fines or solution. For

purposes of the investigation, the narrative description is dispositive, not the

tariff heading, American Chemical Society, CAS registry number or CAS name,

or the specific percentage chemical composition identified above.

16

 STPP, TKPP, MKP, and DKP each may be sold in technical or food grades.17 Foodgrade STPP, TKPP, MKP, and DKP must meet stricter guidelines in terms of the allowable

amounts of certain impurities (arsenic, fluoride, lead, and heavy metals) and pH level.18 STPP,

TKPP, MKP, and DKP vary in terms of whether they are sold in solid (anhydrous) form or in

solution.19 STPP also may vary in terms of light, medium, or heavy density, and the density

desired by purchasers depends on the particular use.20

C. Analysis

Petitioners argue that the Commission should define the domestic like product to encompass four

separate domestic like products: (1) STPP, (2) DKP, (3) MKP, and (4) TKPP.21 The Chinese

Respondents do not disagree with Petitioners’ proposed like product definitions for purposes of the

preliminary phase of these investigations.22

Physical characteristics and uses

STPP, DKP, MKP, and TKPP are different chemical compounds with different chemical

formulas, as specified in the scope definition. Nevertheless, they are all phosphate salts, they have

somewhat similar chemical structures, and they are all derived primarily from the same chemical (i.e.,
 23 CR at I-10, PR at I-7. 

 24 CR at I-10, PR at I-7. 

 25 CR at I-10, PR at I-7. 

 26 Chelation or sequestration refers to the ability of certain phosphate salts to bind and inactivate unwanted

minerals or metals. Dispersing refers to the ability of the agent to keep particles form clumping together. CR at I16, PR at I-11. 

 27 Buffering refers to the ability of the phosphate salts to stabilize the pH or acidity/alkalinity level of the

solution. CR at I-16, PR at I-11. 

 28 Conf. Tr. at 13-14. 

 29 CR at I-17, PR at I-11. 

 30 CR at I-17, PR at I-11. 

 31 CR at I-17, PR at I-11. 

 32 Solubility refers to the ability of the chemical to dissolve in solution. This property is important, because a

phosphate salt that is relatively insoluble cannot be used in processes where it is to be used in solution. CR at I-17,

PR at I-11. 

 33 CR/PR at I-3.

 34 CR at I-13, PR at I-9. 

 35 CR at I-13, PR at I-9. 

 36 CR at I-13, PR at I-9. 

7

phosphoric acid).23 All four phosphate salts exist either in crystal or powder form.24 Three of the four

phosphate salts (i.e., DKP, MKP, and TKPP) contain potassium while STPP contains sodium.25

In terms of use, STPP, DKP, MKP, and TKPP have similarities and differences. STPP and TKPP

(but not DKP or MKP) are both chelating and dispersing agents, which enables each to be used in

removing unwanted minerals that interfere with food processing or cleaning.26 MKP and DKP (but not

STPP or TKPP) have buffering properties, that enable each to be used in formulating pharmaceuticals,

beverages, or food products.27 However, MKP is acidic, while DKP is an alkaline.28 DKP is an excellent

emulsifying agent, which allows it to be used in many dairy applications where it is necessary to mix

otherwise incompatible substances.29 MKP is a superior fermentation agent, which allows it to be used in

fermentation and yeast processes where it serves as a source of potassium and phosphorous.30 DKP also

is useful in fermentation.31 DKP and TKPP are more soluble than both MKP and STPP, which allows

TKPP, for example, to be used in certain water treatment and paint applications where STPP cannot be

used.32

Moreover, STPP, DKP, MKP, and TKPP are used individually in a wide variety of different

applications, including detergents and other cleaning applications; fertilizers; food and feed additives; and

water treatment.33 STPP is used in industrial and institutional cleaning products where it functions as a

detergent builder that enhances the cleansing ability of the product.34 In food applications such as

seafood, meat, poultry and pet foods, STPP is used to retain moisture.35 STPP is also used in

toothpastes.36 DKP is used as a fertilizer (where it serves as a source of phosphorus and potassium) and
 37 CR at I-13, PR at I-9. 

 38 CR at I-13, PR at I-9. 

 39 CR at I-13, PR at I-9.

 40 CR at I-13, PR at I-9.

 41 CR at I-13, PR at I-9. 

 42 CR at I-13, PR at I-9. 

 43 CR at I-19, PR at I-12.

 44 Conf. Tr. at 67. 

 45 Petitioners’ Postconf. Br. at 4.

 46 CR at I-18, PR at I-12. 

 47 CR at I-18, PR at I-12. 

 48 CR at I-18, PR at I-12. 

 49 Petitioners’ Postconf. Br. at 4; Conf. Tr. at 111-112.

8

as a food additive.37 DKP is also used in non-dairy creamers as a buffer to prevent coagulation.38 MKP is

used as a fertilizer where it serves as a source of phosphorus and potassium and acts as a stabilizer.39 It is

also used as a food additive and fungicide.40 TKPP is used in liquid cleaning products and in potable and

industrial water treatment where it acts to prevent scaling.41 TKPP is also used in metal cleaners and

metal surface treatment and in the manufacture of latex paints where the TKPP acts to allow the paint

formulation to remain as a stable suspension.42 

Interchangeability

U.S. importers did not report any instances in which any one of the four phosphate salts within

the scope could be substituted for another.43 Industry witnesses acknowledged that STPP, DKP, MKP,

and TKPP may sometimes be used in the same application although, in such instances, each individual

phosphate salt serves a unique function.44

Common manufacturing facilities, production processes, and production employees

 Petitioners acknowledge that “[a]ll phosphate salts can be manufactured on the same equipment

in the same facility.”45 ICL produces all four types of phosphate salts.46 ICL produces DKP, MKP, and

TKPP at its facility in Carteret, New Jersey on the same assembly lines, using the same equipment and the

same employees.47 ICL produces STPP (but not DKP, MKP, or TKPP) at separate facilities in Lawrence,

Kansas, and St. Louis, Missouri, reportedly to minimize the risk of cross-contamination between the

sodium (STPP) and potassium (DKP, MKP, and TKPP) phosphate salts.48 Petitioners explain that ICL

could produce STPP at the same plant where it produces the other three phosphate salts, but chooses to

“run STPP in a dedicated plant in order to run continuously.”49 Prayon produces two of the four types of

phosphate salts (STPP and TKPP) at its facility in Augusta, Georgia, using the same assembly lines,

equipment, and employees, and washes equipment between production cycles to avoid cross
 50 CR at I-18, PR at I-12. 

 51 CR/PR at Table III-1. 

 52 CR at I-14, PR at I-9. 

 53 CR at I-17, PR at I-12.

 54 CR at I-17, PR at I-12.

 55 CR at I-17, PR at I-12.

 56 CR at I-17 to I-18, PR at I-12. 

 57 CR at I-18, PR at I-12. 

 58 CR at I-14, PR at I-9 to I-10.

 59 CR at I-14, PR at I-10. 

 60 CR at I-14, PR at I-10. 

 61 CR at I-14, PR at I-10.

 62 CR at I-14, PR at I-10.

 63 CR at I-14, PR at I-10. 

 64 CR at I-14, PR at I-10. 

9

contamination between the products.50 PCS Purified Phosphates (“PCS”) produces TKPP at its plant in

Cincinnati, Ohio.51

STPP, DKP, MKP, and TKPP have very similar (but not identical) manufacturing processes. The

initial step in the production of all four phosphate salts is the reaction of phosphoric acid with a base that

is either soda ash or sodium hydroxide (caustic soda) for STPP or potassium hydroxide for DKP, MKP,

and TKPP.52

This initial step in the production of STPP, DKP, MKP, and TKPP occurs in a tank in which the

reaction between the alkali base and phosphoric acid takes place.53 For DKP and MKP, the phosphate

salts are then dried in a relatively low-temperature dryer.54 For STPP and TKPP, the salts are dried in a

dryer at temperatures high enough to induce calcining.55 After drying, the products pass through a coarse

screen. Particles that are too large to pass through the screen are ground in a mill into smaller particles.56

The products are then passed through a fine screen. The “fines” are either sold as is or returned to

solution and recycled. 57 

For STPP, appropriate quantities of caustic soda or soda ash and phosphoric acid are mixed in

solution so that the product formed is between monosodium phosphate (MSP) and disodium phosphate

(DSP).58 The water is then removed using drum dryers or, in some instances, by an evaporation process

through crystallization.59 To manufacture STPP, the monosodium/disodium phosphate mixture is then

calcined at a temperature between 350 degrees Celsius and 550 degrees Celsius.60 STPP forms when

molecules of MSP and DSP react and chemically condense.61 After cooling, the STPP particles are

passed through a series of sieves so that only particles with the specified size range are packaged to be

shipped to customers.62 STPP particles that are outside the acceptable range, particularly if they are too

large, may be resized, and the resulting material may be fed back into the product stream.63

The production processes for DKP, MKP, and TKPP are all similar to the production process

described in the previous paragraph for STPP except that potassium hydroxide is substituted for caustic

soda or soda ash.64 To produce DKP and MKP, potassium hydroxide is reacted with phosphoric acid in a
 65 CR at I-14, PR at I-10. 

 66 The production of TKPP is similar to the production of DKP except that ***. CR at I-15 n.28, PR at I-10 n.28. 

 67 In order to produce MKP or DKP in solution, customers, especially if they are chemical manufacturers, can

simply combine purchased potassium hydroxide with purchased phosphoric acid. This method cannot, however, be

used to produce STPP and TKPP in solution. In order to produce these products, the sodium or potassium

orthophosphate starting materials must be calcined. Thus, customers purchasing STPP or TKPP in solution, will

typically rely on the phosphate salt manufacturer to manufacture anhydrous STPP or TKPP, which is then dissolved

by the manufacturer in water. According to industry sources, dissolving TKPP in water is a difficult and timeconsuming step; consequently, most customers prefer to purchase TKPP as a solution rather than dissolving the

TKPP in their facilities. CR at I-15 n.29, PR at I-10 n.29. 

 68 At ICL’s facility in Carteret, NJ, the solution of MKP or DKP is dried by ***. CR at I-15 n.30, PR at I-10

n.30. 

 69 Petitioners’ Postconf. Br. at 4. 

 70 CR/PR at Table I-2.

 71 CR/PR at Table I-2. 

 72 Conf. Tr. at 70-71 & 92-93.

 73 CR at I-19, PR at I-12.

 74 The average unit values (“AUVs”) for U.S. producers’ U.S. shipments of DKP increased from $*** per pound

in 2006 and 2007 to $*** per pound in 2008, and were $*** per pound in interim 2009 compared with $*** per

pound in interim 2008. The AUVs for U.S. producers’ U.S. shipments of MKP decreased from $*** per pound in

2006 to $*** per pound in 2007, increased to $*** per pound in 2008, and were $*** per pound in interim 2009

compared with $*** per pound in interim 2008. The AUVs for U.S. producers’ U.S. shipments of STPP increased

(continued...)

10

mole ratio of 1:1 and 2:1, respectively.65 To produce TKPP, DKP is calcined at a temperature between

400 degrees Celsius and 500 degrees Celsius.66 67 The TKPP product is then sized and packaged for

shipping.68

Channels of distribution

 Petitioners state that all four “phosphate salts are sold directly to end users as well as through

distributors to wholesalers.”69 During the period under examination, STPP and TKPP were

predominantly sold to end users, although substantial amounts of STPP and TKPP were also sold to

distributors.70 Conversely, DKP and MKP were predominantly sold to distributors, although substantial

amounts of DKP and MKP were also sold to end users.71

Customer and producer perceptions

Based on the limited data available, U.S. producers generally perceive STPP, DKP, MKP, and

TKPP as distinct and separate products.72 Similarly, U.S. importers reported that STPP, DKP, MKP, and

TKPP are not substitutes for each other.73

Price

During the period under examination, domestically produced DKP and MKP generally were

priced comparably, although they were substantially higher priced than both STPP and TKPP.74
 74 (...continued)

from $*** per pound in 2006 to $*** per pound in 2007 and again to $*** per pound in 2008, and were $*** per

pound in interim 2009 compared with $*** per pound in interim 2008. The AUVs for U.S. producers’ U.S.

shipments of TKPP increased from $*** per pound in 2006 to $*** per pound in 2007 and again to $*** per pound

in 2008, and were $*** per pound in interim 2009 compared with $*** per pound in interim 2008. CR/PR at Table

I-3.

 75 CR at I-10, PR at I-7. 

 76 CR at I-16 to I-17, PR at I-11. 

 77 CR at I-16 to I-17, PR at I-11; Conf. Tr. at 67. 

 78 Conf. Tr. at 70-71 & 92-93; Petitioners’ Postconf. Br. at 5. 

 79 Conf. Tr. at 74-75; Petitioners’ Postconf. Br. at 4.

 80 19 U.S.C. § 1677(4)(A).

 81 There are no known related party issues in the preliminary phase of these investigations. There is no record

evidence indicating that any domestic producer is affiliated with subject foreign producers or imported or purchased

any subject merchandise from China. CR/PR at Table III-1.

11

Conclusion

Based on the above analysis, we define four like products in these investigations: STPP, DKP,

MKP, and TKPP. 

In particular, we find it significant that STPP, DKP, MKP, and TKPP are different chemical

compounds with distinct chemical formulas and physical characteristics. As discussed above, STPP,

DKP, MKP, and TKPP typically have different end uses with minimal overlap.75 Even in those instances

when STPP, DKP, MKP, and TKPP are used in the same application such as in water treatment or

fertilizer, they serve different functions.76 As discussed above, STPP, DKP, MKP, and TKPP are not

interchangeable and typically cannot be substituted for each other in particular applications.77 Moreover,

although the record is rather limited in this preliminary phase, available data suggest that U.S. producers

view STPP, DKP, MKP, and TKPP as four separate and distinct products.78 We acknowledge, as

Petitioners concede, that there is some overlap among STPP, DKP, MKP, and TKPP in terms of common

manufacturing facilities, processes, and employees, as well as in the channels of distribution in which the

products are sold.79 

 Accordingly, for purposes of the preliminary phase of these investigations, we find four separate

domestic like products consisting of: (1) STPP, (2) DKP, (3) MKP, and (4) TKPP, coextensive with the

scope of these investigations.

D. Domestic Industry

The domestic industry is defined as the domestic “producers as a {w}hole of a domestic like

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

proportion of the total domestic production of the product.”80 In defining the domestic industry, the 

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

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

Consistent with our finding of four separate domestic like products, we find four separate domestic

industries as follows: (1) all domestic producers of STPP, (2) all domestic producers of DKP, (3) all

domestic producers of MKP, and (4) all domestic producers of TKPP.81
 82 Negligibility is not an issue in the preliminary phase of these investigations. Subject imports from China far

exceeded the three percent statutory negligibility threshold during the most recent 12-month period preceding the

filing of the petition for which data are available, accounting, by quantity, for *** percent of total DKP imports, ***

percent of total MKP imports, 23.4 percent of total STPP imports, and *** percent of total TKPP imports. CR at IV9, PR at IV-7. Accordingly, we find that subject imports are not negligible under 19 U.S.C. § 1677(24).

 83 19 U.S.C. §§ 1671b(a), 1673b(a).

 84 19 U.S.C. § 1677(7)(B)( i). The Commission “may consider such other economic factors as are relevant to the

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

19 U.S.C. § 1677(7)(B).

 85 19 U.S.C. § 1677(7)(A).

 86 19 U.S.C. § 1677(7)(C)(iii).

 87 19 U.S.C. § 1677(7)(C)(iii).

 88 19 U.S.C. §§ 1671b(a), 1673b(a).

 89 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).

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

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

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

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

(continued...)

12

IV. REASONABLE INDICATION OF MATERIAL INJURY OR THREAT OF MATERIAL

INJURY BY REASON OF IMPORTS OF SUBJECT MERCHANDISE82

A. Legal Standard

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

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

injured or threatened with material injury by reason of the imports under investigation.83 In making this

determination, the Commission must consider the volume of subject imports, their effect on prices for the

domestic like product, and their impact on domestic producers of the domestic like product, but only in

the context of U.S. production operations.84 The statute defines “material injury” as “harm which is not

inconsequential, immaterial, or unimportant.”85 In assessing whether there is a reasonable indication that

the domestic industry is materially injured by reason of subject imports, we consider all relevant

economic factors that bear on the state of the industry in the United States.86 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.”87

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,88 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.89 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.90
 90 (...continued)

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).

 91 Statement of Administrative Action (“SAA”) on Uruguay Round Agreements Act (“URAA”), 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 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.

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

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

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

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

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

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

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

imports and other causes.); see also Softwood Lumber from Canada, 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, Inc. v. United States,

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

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

harmful effects on domestic market prices.”). 

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

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

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

injury.”).

13

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.91 In performing its examination, however, the Commission need not

isolate the injury caused by other factors from injury caused by unfairly traded imports.92 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.93 It is clear that the existence of

injury caused by other factors does not compel a negative determination.94

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
 95 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.

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

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

when considering present material injury, to undertake a particular kind of analysis of nonsubject imports. Mittal

explains as follows:

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

nonsubject imports are in the market,” the Commission would not fulfill its obligation to consider an

important aspect of the problem if it failed to consider whether nonsubject 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.

 97 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.”).

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

 99 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).

14

“ensure{s} that it is not attributing injury from other sources to the subject imports.”95 96 Indeed, the

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

adherence to a specific formula.”97

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

where the relevant “other factor” was the presence in the market of significant volumes of pricecompetitive 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.98 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.99 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.
 100 Commissioner Lane also refers to her dissenting views in Polyethylene Terephthalate Film, Sheet, and Strip

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

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

 101 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 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.

 102 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.”).

 103 19 U.S.C. § 1677(7)(F)(ii).

 104 19 U.S.C. § 1677(7)(F)(ii).

 105 These factors are as follows:

(I) if a countervailable subsidy is involved, such information as may be presented to it by the administering

authority as to the nature of the subsidy (particularly as to whether the countervailable subsidy is a subsidy

described in Article 3 or 6.1 of the Subsidies Agreement) and whether imports of the subject merchandise

are likely to increase,

(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,

(continued...)

15

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

non-attribution issues when it performs its causation analysis.100 101

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

institutional expertise in resolving injury issues.102

Section 771(7)(F) of the Tariff Act directs the Commission to determine whether the U.S.

industry is threatened with material injury by reason of the subject imports by analyzing whether “further

dumped or subsidized imports are imminent and whether material injury by reason of imports would

occur unless an order is issued or a suspension agreement is accepted.”103 The Commission may not make

such a determination “on the basis of mere conjecture or supposition,” and considers the threat factors “as

a whole” in making its determination whether dumped or subsidized imports are imminent and whether

material injury by reason of subject imports would occur unless an order is issued.104 In making our

determinations, we consider all statutory threat factors that are relevant to these investigations.105
 105 (...continued)

(VI) the potential for product-shifting if production facilities in the foreign country, which can be used to

produce the subject merchandise, are currently being used to produce other products,

* * *

(VIII) the actual and potential negative effects on the existing development and production efforts of the

domestic industry, including efforts to develop a derivative or more advanced version of the domestic like

product. 

(IX) any other demonstrable adverse trends that indicate the probability that there is likely to be material

injury by reason of imports (or sale for importation) of the subject merchandise (whether or not it is actually

being imported at the time).

19 U.S.C. § 1677(7)(F)(i). Statutory threat factor VII is inapplicable as no imports of agricultural products are

included in these investigations. 

 106 19 U.S.C. § 1677(7)(C)(i).

 107 19 U.S.C. § 1677(7)(C)(ii).

 108 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 885 (“In material injury determinations, the Commission

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

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

difficulties from a variety of sources and is vulnerable to dumped or subsidized imports.”) SAA at 885.

 109 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851, 885; Live Cattle from Canada and Mexico, Inv. Nos. 701-

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

16

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

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

production or consumption in the United States, is significant.”106 

Section 771(C)(ii) of the 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.107

Section 771(7)(C)(iii) 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.”108 These factors include output, sales, inventories, capacity utilization, market

share, employment, wages, productivity, profits, cash flow, return on investment, ability to raise capital,

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

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

that are distinctive to the affected industry.”109

B. Conditions of Competition and the Business Cycle

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

indication of material injury or threat of material injury by reason of subject imports of STPP, DKP,

MKP, and TKPP. 
 110 CR at II-19, PR at II-10. 

 111 CR /PR at Table II-3. 

 112 CR/PR at Table II-3.

 113 CR/PR at Table II-3. 

 114 CR/PR at Table II-3. 

 115 CR/PR at Table C-3. 

 116 CR/PR at Table C-3. 

 117 CR/PR at Table C-1. 

 118 CR/PR at Table C-1.

 119 CR/PR at Table C-2. 

 120 CR/PR at Table C-2. 

 121 CR/PR at Table C-4. 

 122 CR/PR at Table C-4. 

 123 The most common reason reported for reduced demand for STPP was changes in state laws that will eliminate

its use in ADW detergents by July 1, 2010. CR at II-21, PR at II-12.

17

1. Demand Conditions 

Demand conditions for STPP, DKP, MKP, and TKPP are largely affected by their different end

uses. STPP, DKP, MKP, and TKPP are used in a wide range of applications.110 STPP is used in

household and industrial products, tile manufacturing, detergents, water treatment, meat curing, car

washes, and as an anticoagulant.111 DKP is used as a buffering agent in compounding formulas, and in

antifreeze, baked goods, and dairy applications (e.g., coffee creamers or processed cheese).112 MKP is

used mainly in fertilizer, but also in refractories, food and beverages, and dog food.113 TKPP is used in

water treatment, household and industrial-type products, detergents, metal finishing, pulp and paper, and

as a buffering agent in compounding formulas.114

For STPP, apparent U.S. consumption declined by *** percent overall between 2006 and 2008,

falling from *** pounds in 2006 to *** pounds in 2007, and increasing slightly to *** pounds in 2008.115

Apparent U.S. consumption for STPP was *** pounds in interim 2009 compared with *** pounds in

interim 2008.116 For DKP, apparent U.S. consumption increased during the period examined from ***

pounds in 2006 to *** pounds in 2007 and then to *** pounds in 2008.117 Apparent U.S. consumption for

DKP was *** pounds in interim 2009 compared with *** pounds in interim 2008.118 For MKP, apparent

U.S. consumption increased during the period examined from *** pounds in 2006 to *** pounds in 2007,

and again to *** pounds in 2008.119 Apparent U.S. consumption for MKP was *** pounds in interim

2009 compared with *** pounds in interim 2008.120 For TKPP, apparent U.S. consumption declined

irregularly during the period examined, increasing from *** pounds in 2006 to *** pounds in 2007, and

dropping to *** pounds in 2008.121 For TKPP, apparent U.S. consumption was *** pounds in interim

2009 compared with *** pounds in interim 2008.122 

 The decline in apparent U.S. consumption for STPP during the period examined is largely

attributable to legislative bans on the use of phosphates in automatic dishwashing detergents (“ADW

detergents”).123 Until 2007, technical-grade STPP was used extensively in the manufacturing of ADW
 124 Chinese Respondents’ Postconf. Br. at 9. 

 125 CR at II-21, PR at II-12. 

 126 CR at II-21, PR at II-12. From August 2008 to August 2009, Prayon estimates that it has experienced a 10-

million pound decrease in its sales of STPP, mostly due to lower demand in ADW detergents. CR at II-22, PR at II12. 

 127 At the conference, a witness for the domestic industry forecasted demand growth for STPP, TKPP, MKP and

DKP as follows: 2.5 percent for food-grade STPP, TKPP at the rate of population growth, MKP for paints and

coatings at 3 percent, MKP in food and beverage applications (Powerade/Gatorade) at greater than 3 percent, techgrade MKP for fertilizers at 3.5 percent, DKP for construction at 3 percent, and DKP for “convenience foods” at

greater than 3 percent. CR at II-22, PR at II-13; Conf. Tr. at 115-116 (Schewe). 

 128 CR/PR at Table C-3. 

 129 CR/PR at Table C-3.

 130 CR/PR at Table C-3. 

 131 Chinese Respondents’ Postconf. Br. at 9-10. 

 132 CR at II-3, PR at II-2. 

 133 Derived from CR/PR at Tables V-3 & V-4. 

18

detergents.124 As of October 2009, however, approximately 15 states had banned ADW detergents

containing STPP. As of July 1, 2010, ADW detergents containing phosphates will be banned

nationwide.125 Petitioners estimate that the pending ban on the use of phosphates in ADW detergents will

have the effect of decreasing domestic demand for STPP more than 50 percent by 2010 or 2011.126

Demand for DKP, MKP, TKPP, and food-grade STPP is projected to increase slowly in the near future,

remaining at or near three percent annual growth based on major end uses incorporating these salts.127

2. Supply Conditions

There are three sources of supply for the U.S. market: domestic shipments, imports of subject

merchandise from China, and non-subject imports. The share of the market accounted for by each source

depends on the like product under consideration. 

For STPP, nonsubject imports are the largest source of supply in the U.S. market, accounting for

more than half of apparent U.S. consumption by quantity for most of the period examined, followed by

domestic product and subject imports. The market share of nonsubject STPP imports increased from ***

percent in 2006 to *** percent in 2007, and again to *** percent in 2008, and was *** percent in interim

2009 compared with *** percent in interim 2008.128 U.S. producers’ market share dropped from ***

percent in 2006 to *** percent in 2007, and again to *** percent in 2008, and was *** percent in interim

2009 compared with *** percent in interim 2008.129 The market share of subject STPP imports remained

flat at *** percent in 2006 and 2007, increased to *** percent in 2008, and was *** percent in interim

2009 compared with *** percent in interim 2008.130

In response to the anticipated decline in demand for STPP, U.S. producers have shifted the focus

of their production efforts from technical-grade STPP to food-grade STPP and other phosphate salts

during the period examined.131 Food-grade STPP accounted for *** percent of domestically-produced

STPP in 2006, *** percent in 2007, *** percent in 2008, and *** percent in interim 2009.132 Subject

imports of technical-grade STPP accounted for more than *** percent of total subject imports during the

period examined, while subject imports of food-grade STPP accounted for less than *** percent of total

subject imports during the period.133
 134 CR/PR at Table C-1. 

 135 CR/PR at Table C-1. 

 136 CR/PR at Table C-2. 

 137 CR/PR at Table C-2.

 138 CR/PR at Table C-2.

 139 CR/PR at Table C-2. 

 140 CR/PR at Table C-2.

 141 CR/PR at Table C-4. 

 142 CR/PR at Table C-4. 

 143 CR/PR at Table C-4. 

 144 CR at II-17, PR at II-9.

19

For DKP, U.S. producers were the largest suppliers of DKP in 2006 and 2007, but were eclipsed

by nonsubject imports in 2008 and interim 2009. U.S. producers’ market share fell irregularly during the

period examined. U.S. producers’ market share increased from *** percent in 2006 to *** percent in

2007, and fell to *** percent in 2008; it was *** percent in interim 2009 as compared with *** percent in

interim 2008.134 The market share of nonsubject DKP imports increased irregularly during the period

examined, falling from *** percent in 2006 to *** percent in 2007, increasing to *** percent in 2008, and

was *** percent in interim 2009 as compared with *** percent in interim 2008.135 Subject imports’

market share increased irregularly, dropping from *** percent in 2006 to *** percent in 2007, increasing

to *** percent in 2008, and was *** percent in interim 2009 as compared with *** percent in interim

2008.136

For MKP, nonsubject imports were the largest source of supply of the U.S. market, accounting

for more than half U.S. consumption by quantity throughout the period examined.137 The market share of

nonsubject imports of MKP decreased from *** percent in 2006 to *** percent in 2007 and again to ***

percent in 2008, and was *** percent in interim 2009 as compared with *** percent in interim 2008.138

Subject imports are the next largest source of supply. Their market share increased from *** percent in

2006 to *** percent in 2007, and again to *** percent in 2008; it was *** percent in interim 2009 as

compared with *** percent in interim 2008.139 U.S. producers’ market share was relatively flat,

increasing from *** percent in 2006 to *** percent in 2007, and falling to *** percent in 2008; it was ***

percent in interim 2009 as compared with *** percent in interim 2008.140

 For TKPP, U.S. producers were by far the largest source of supply of the U.S. market, accounting

for the vast majority of apparent U.S. consumption during the period examined. For TKPP, U.S.

producers’ market share dropped from *** percent in 2006 to *** percent in 2007, and again to ***

percent in 2008; it was *** percent in interim 2009 compared with *** percent in interim 2008.141 The

market share of subject TKPP imports increased from *** percent in 2006 to *** percent in 2007 and

again to *** percent in 2008, and was *** percent in interim 2009 compared with *** percent in interim

2008.142 The market share of nonsubject imports of TKPP was small and increased irregularly during the

period examined, falling from *** percent in 2006 to *** percent in 2007, before increasing to ***

percent in 2008; it was *** percent in interim 2009 compared with *** percent in interim 2008.143

*** U.S. producers of each of the like products reported that they had refused, declined, or been

unable to supply customers during the period examined due to shortages of phosphoric acid and/or

potassium hydroxide.144 Due to shortages of phosphoric acid, ICL put all of its STPP customers on

allocation in 2008, limiting them to the volumes purchased in 2007, and turned away new STPP
 145 CR at II-17, PR at II-9; Conf. Tr. at 27, 79-81 (Schewe); Chinese Respondents’ Postconf. Br. at 21. 

 146 CR at II-17, PR at II-9; Chinese Respondents’ Postconf. Br. at 21.

 147 CR at II-17, PR at II-9.

 148 Chinese Respondents’ Postconf. Br. at 21 & Exh. 19; Conf. Tr. at 80-81. 

 149 CR at II-17, PR at II-9; Chinese Respondents’ Postconf. Br. at 21. 

 150 CR at II-18, PR at II-10. 

 151 CR at II-17, PR at II-9.

 152 CR at II-17, PR at II-9. 

 153 CR/PR at Table II-7; CR at II-25 to II-27, PR at II-15 to II-16.

 154 CR at II-26, PR at II-16; CR/PR at Table II-7.

 155 CR/PR at Table II-7; CR at II-26, PR at II-16.

 156 CR/PR at Table II-7; CR at II-26 to II-27, PR at II-16. 

 157 CR/PR at Table II-7; CR at II-27, PR at II-16.

 158 For STPP, 15 of 21 responding producers and importers reported factors other than price were “never” or

“sometimes” important in sales decisions. For DKP, 5 of 9 responding producers and importers reported the same. 

For MKP, 10 of 16 responding producers and importers reported the same. For TKPP, 14 of 16 responding

(continued...)

20

customers during this period.145 ICL’s supply shortages in DKP, MKP, and TKPP ***. Due to ***.146

During this time, Prayon supplied some purchasers that could not get enough STPP or TKPP from ICL.147

Notwithstanding conference testimony that Prayon generally did not experience difficulties supplying its

existing customers in 2008, there is evidence in the record suggesting that some of Prayon’s customers

experienced supply disruptions in 2008 due to shortages.148 Moreover, Prayon reported that, in 2008, it

declined to accept several new customers because they wanted to buy on a spot basis rather than commit

to a long-term relationship.149 Innophos reported that restrictions on the supply of potassium hydroxide

*** in 2008.150 Innophos reported that limited availability of potassium hydroxide ***.151 Twenty-one

responding importers reported shortages of STPP, DKP, MKP, and TKPP in 2008.152

3. Substitutability

Although factors such as differences in lead times and product quality may limit substitutability

somewhat, the record indicates a high degree of substitutability among domestically produced STPP,

DKP, MKP, and TKPP, and subject and nonsubject imports.153 ICL, the only producer responding for all

four phosphate salts, reported that the domestic like products, subject imports, and nonsubject imports

were *** interchangeable for ***.154 With regard to STPP and TKPP; Prayon responded that these

products from all sources were *** interchangeable.155 With regard to TKPP, Innophos reported that

TKPP from all sources was *** interchangeable.156 Most importers reported that STPP, TKPP, MKP, and

DKP from all sources were either “frequently” or “sometimes” interchangeable.157 

In addition, producers and importers were asked to assess how often differences other than price

were significant in sales of subject merchandise from the United States, China, and nonsubject countries.

In each instance, a majority of market participants reported factors other than price were “never” or

“sometimes” (as opposed to “frequently” or “always”) important to purchasers of the U.S. or Chinese

product.158
 158 (...continued)

producers and importers reported the same. CR/PR at Table II-8. 

 159 Yellow phosphorus, the key ingredient in making phosphoric acid, accounts for approximately 60 percent of

the cost of producing STPP, and soda ash accounts for approximately 25 percent. From 2006 until 2008, these

chemicals and other raw materials accounted for *** percent of the total cost of goods sold for DKP, *** percent for

MKP, *** percent for STPP, and *** percent for TKPP. In the first half of 2009, however, these shares rose to ***

percent for DKP, *** percent for MKP, *** percent for STPP, and *** percent for TKPP. CR/PR at V-1. 

 160 CR/PR at V-1.

 161 Conf. Tr. at 43. A three-month strike and work stoppage at PCS’s production facility in Canada in late 2008

crippled ICL’s potassium phosphate production for TKPP, MKP, and DKP during that period, and in response, ICL

imported finished product from sister companies in Brazil and Europe, and from China. CR at V-2, PR at V-1. 

 162 CR/PR at Table IV-4.

 163 CR/PR at Table IV-4.

 164 CR/PR at Table IV-13; CR/PR at Table C-3. 

 165 CR/PR at Table IV-13.

 166 CR/PR at Table IV-17.

21

U.S. producers of STPP, DKP, MKP, and TKPP experienced rising raw material costs during the

period examined. The primary raw materials used in the production of phosphate salts are phosphoric

acid, potassium hydroxide (for DKP, MKP, and TKPP), and soda ash or caustic soda (for STPP).159 The

price of phosphoric acid began rising in 2008, partly due to increased demand for phosphates used in corn

and soybean fertilizer applications as federal biofuel mandates became effective.160 The price of

phosphoric acid tripled between 2007 and 2008, while the price for potassium hydroxide (KOH) doubled

during this period.161 

C. Sodium Tripolyphosphate (“STPP”)

1. No Reasonable Indication of Material Injury By Reason of Subject Imports

from China

a. Volume of Subject Imports

Subject import volume declined 8.9 percent between 2006 and 2007, from 18.8 million pounds to

17.2 million pounds, but increased 51.4 percent between 2007 and 2008, to 26.0 million pounds,

representing a 37.9 percent increase from 2006 to 2008.162 Subject import volume was 35.6 million

pounds in interim 2009, a level 367.4 percent higher than that in interim 2008, when subject import

volume was 7.6 million pounds.163 The value of these imports declined from $7.1 million in 2006 to $6.4

million in 2007, but increased to $17.3 million in 2008, and was $18.2 million in interim 2009 compared

with $4.1 million in interim 2008.164

Subject import shipments as a share of apparent U.S. consumption quantity remained flat at ***

percent in both 2006 and 2007, but increased to *** percent in 2008, and were *** percent in interim

2009, compared with *** percent in interim 2008.165 The ratio of subject imports to domestic production

increased from *** percent in 2006, to *** percent in 2007, to *** percent in 2008, and was *** percent

in January-June 2009, compared with *** percent in January-June 2008.166

The increase in volume of the subject imports both absolutely and relative to domestic

consumption over the period examined was significant. However, the increase in subject import volume
 167 CR/PR at Table IV-13.

 168 CR/PR at Tables IV-13 & C-3.

 169 CR/PR at Table C-3.

 170 CR at V-7 n.12, PR at V-4 n.12. 

 171 CR at V-7 n.12, PR at V-4 n.12. 

 172 CR at V-7 n.12, PR at V-4 n.12.

 173 Chinese Respondents’ Postconf. Br. at 11. 

 174 CR at V-6, PR at V-3. 

 175 CR at V-7, PR at V-4.

 176 CR at V-6, PR at V-4. 

22

must be viewed in the context of prevailing market conditions. As discussed above, subject imports’

market share started out small and stayed small during most of the period under examination. Through

2008, subject imports’ market share never exceeded *** percent, and never rose more than ***

percentage points per year.167 That increase occurred during 2008, when the domestic industry was faced

with raw material supply shortages and domestic producers of STPP were unable to supply some existing

customers in a timely manner, had to place their customers on allocation, and even turned away new

customers. By contrast, when the domestic industry was not experiencing any supply shortages in 2006

and 2007, subject imports’ market share remained constant at *** percent.168 

Moreover, with regard to STPP, increased subject import market share in interim 2009 came

almost exclusively at the expense of nonsubject imports rather than the domestic industry. Although the

market share of subject STPP imports was *** percentage points higher in interim 2009 as compared with

interim 2008, U.S. producers’ market share was less than *** lower in interim 2009 as compared with

interim 2008.169 Most of the subject imports’ gain in market share between the interim periods can be

attributed to ***. ***.170 ***.171 Before it ***, *** considered *** as a supplier for STPP, but ***

failed to ***.172 *** has indicated that it will cease ***.173

Finally, as described in the following sections, even when subject import volumes increased

during the period examined, U.S. prices for STPP increased *** and the industry’s profitability increased. 

In fact, the STPP industry experienced *** prices and profitability when subject import volumes peaked

during the period examined. 

b. Price Effects of the Subject Imports

The record indicates that there is a high degree of interchangeability between subject imports of

STPP and the domestic like product. 

The Commission collected quarterly pricing data on two STPP products, product 3 (food-grade

STPP) and product 4 (technical-grade STPP).174 Pricing data for these two products accounted for ***

percent of domestic producers’ U.S. shipments of STPP and *** percent of U.S. imports of STPP from

January 2006 to June 2009.175 Pricing data were reported by two domestic producers and 19 importers.176

These data show a mixed pattern of underselling and overselling. For the two products

collectively, subject STPP imports undersold the domestic like product in 14 of 28 quarterly price

comparisons. Most of the underselling, however, involved comparisons of relatively lower volumes of

food-grade STPP, whereas subject imports were mostly priced higher than the U.S. product in
 177 CR/PR at Tables V-3 & V-4. 

 178 CR/PR at Tables V-3 & V-7.

 179 CR/PR at Tables V-4 & V-7. 

 180 CR/PR at Table V-7; Derived from CR/PR at Tables V-3 & V-4. 

 181 CR/PR at Tables V-3 & V-4.

 182 CR/PR at Tables IV-4, V-3, & V-4

 183 CR/PR at Table C-3.

 184 CR/PR at Table C-3.

 185 CR/PR at Table C-3.

 186 The Petitioners alleged a number of lost sales and lost revenues due to STPP subject imports over the period

examined. Despite a number of confirmed allegations, in light of the other pricing data as well as cost recovery

information in the record, we find the evidence concerning confirmed lost sales and revenues to be insufficient when

weighed with the other evidence in the record to establish significant price effects. 

23

comparisons of higher-volume technical-grade STPP.177 With respect to food-grade STPP, subject

imports undersold the domestic like product in 11 of 14 quarterly comparisons, at margins ranging from

3.7 percent to 52.2 percent and averaging *** percent.178 With respect to technical-grade STPP, subject

imports undersold the domestic like product in just 3 of 14 quarterly price comparisons, at margins

ranging from 0.0 percent to 40.9 percent, and averaging *** percent.179 Thus, at best, the evidence in the

record shows mixed underselling, with predominant overselling on the higher-volume technical-grade

product, which accounted for more than *** percent of the domestic industry’s STPP sales during the

period examined.180 Moreover, two of the three instances of underselling in the higher-volume technicalgrade STPP occurred in interim 2009, and entirely reflect sales from China destined for *** in

transactions for which there was ***. In light of these considerations, we do not find underselling to be

significant. 

We find no evidence of price depression. The price of domestic producers’ shipments of the

food-grade STPP increased from $*** per pound in the first quarter of 2006 to $*** per pound in the

second quarter of 2009, and the price of domestic shipments of the technical grade increased from $***

per pound in the first quarter of 2006 to $*** per pound in the second quarter of 2009.181 Indeed, prices

for domestically produced food-grade STPP and domestically produced technical-grade STPP reached

their highest levels in 2008 and interim 2009 when subject import volumes reached their peak market

share.182

In addition, we do not find that subject imports suppressed prices for domestically produced

STPP to a significant degree. In interim 2009, which was the period of the largest increase in volume and

market penetration by subject imports, the domestic industry was able to raise its unit values to more than

offset increases in costs, resulting in the industry’s highest level of cost recovery on both a percentage and

per unit value basis during the period.183 Because domestic producers were able to increase their prices

sufficiently to cover the increased cost of raw materials, the domestic industry’s ratio of cost of goods

sold to net sales declined by *** percentage points overall between 2006 and 2008, falling from ***

percent in 2006 to *** percent in 2008.184 This ratio was *** percent in interim 2009, down from ***

percent in interim 2008, a decline of *** percentage points.185 Accordingly, we do not find that the

subject imports prevented price increases that otherwise would have occurred to any significant degree.186

For all of these reasons, we do not find that the subject imports of STPP had significant effects on

prices for the domestic like product. 
 187 Commerce initiated an antidumping duty investigation on certain phosphate salts based on estimated dumping

margins ranging from 33.7 percent to 177.4 percent. 74 Fed. Reg. at 54026. 

 188 CR/PR at Table C-3. From 2006 to 2008, the domestic industry’s market share declined by *** percentage

points; its production, by *** percent; its U.S. shipment quantity, by *** percent; and its sales quantity, by ***

percent. The domestic industry’s market share was *** percentage lower in interim 2009 compared with interim

2008. Its production was *** percent lower in interim 2009 compared with interim 2008. Its U.S. shipment quantity

was *** percent lower in interim 2009 compared with interim 2008. Its U.S. sales quantity was *** lower in interim

2009 compared with interim 2008. CR/PR at Table C-3. 

 189 The domestic industry’s number of production related workers (“PRWs”) and hours worked declined between

2006 and 2008, and were lower in interim 2009 as compared to interim 2008. The domestic industry’s capital

expenditures and research and development expenses declined irregularly between 2006 and 2008, but were higher

in interim 2009 as compared with interim 2008. CR/PR at Tables III-20 & C-3. 

 190 Chinese Respondents Postconf. Br. at 8-9.

 191 CR/PR at Table C-3. The domestic industry’s end-of-period inventories increased irregularly between 2006

and 2008, falling from *** pounds in 2006 to *** pounds in 2007, and increasing to *** pounds in 2008. Also, the

industry’s end-of-period inventories were *** pounds in interim 2009 compared with *** pounds in interim 2008. 

CR/PR at Table III-12.

 192 CR/PR at Tables C-3 and VI-4. 

24

c. Impact of the Subject Imports187

The domestic industry’s production, sales, shipments, and employment decreased during the

period examined and the domestic industry lost market share, particularly from 2006 to 2008.188 189 We

do not attribute this lost volume in any significant part to the subject imports, however. Instead, the

declines in output were due largely to declines in demand, as the use of STPP in ADW detergent

formulations was increasingly proscribed during the period examined. Moreover, the declines in the

domestic industry’s market share in 2008 occurred amidst raw material shortages for phosphoric acid and

certain customer allocations, as discussed above. 

Additionally, the supply shortages and customer allocations experienced by ICL and Prayon in

2008 occurred before the largest increase in subject import volumes in interim 2009, as subject import

volume had remained small and stable between 2006 and 2008. Producers as well as customers testified

as to the “tight” supply conditions in 2008, which resulted in some purchasers not being able to source all

their needs domestically.190 The record thus does not indicate that the presence in the market of subject

imports adversely affected the capacity utilization of the domestic industry. Rather, the domestic

industry’s reported capacity utilization during the period, which ranged from a low of *** percent in

interim 2009 to a high of *** percent in interim 2008, must be viewed in the context of raw material

supply shortages and customer allocations by certain producers over the period, and declining demand

due to customers’ changes in ADW detergent formulations.191

Indeed, there is a general lack of correlation between subject imports and the domestic industry’s

market share trends. Even as the market share of subject imports was *** percentage points higher in

interim 2009 than in interim 2008, the domestic industry’s market share was lower by less than ***. As

discussed above, the market share gains by subject imports when the interim periods are compared came

almost exclusively at the expense of nonsubject imports rather than the domestic industry, as they were

largely attributable to *** from nonsubject imports to subject imports. 

Similarly, we find no significant correlation between subject imports and the industry’s financial

performance. In 2006 and 2007, when subject imports’ market share remained flat at *** percent in both

years, the industry’s operating income ratio was *** percent and *** percent, respectively.192 As subject

imports increased in 2008 to a *** percent market share, the domestic industry attained more favorable

operating performance as measured by either operating income or operating income as a ratio to net
 193 CR/PR at Table C-3. 

 194 CR/PR at Table C-3.

 195 19 U.S.C. § 1677d(b) and 1677(7)(F)(ii).

 196 19 U.S.C. § 1677(7)(F)(ii). An affirmative threat determination must be based upon “positive evidence

tending to show an intention to increase the levels of importation.” Metallverken Nederland B.V. v. United States,

744 F. Supp. 281, 287 (Ct. Int’l Trade 1990) (citing American Spring Wire Corp. v. United States, 590 F. Supp.

1273, 1280 (Ct. Int’l Trade 1984); see also Calabrian Corp. v. United States, 794 F. Supp. 377, 387-88 (Ct. Int’l

Trade 1992) citing H.R. Rep. No. 98-1156 at 174 (1984).

 197 19 U.S.C. § 1677(7)(F). The pertinent factors are quoted in language from Section IV.A. above. 

 198 CR at VII-4, PR at VII-3.

 199 CR at VII-4, PR at VII-3. Hubei Xingfa accounts for approximately *** of reported Chinese phosphate salt

production and exports to the United States. CR at VII-4, PR at VII-3. 

 200 ICL, the largest domestic producer of STPP, which accounted for almost *** percent of domestic production

of STPP in 2008, realized an operating margin of *** percent in interim 2009. CR/PR at Tables III-1, VII-5 & C-3. 

25

sales.193 As the volume of subject imports in interim 2009 reached a period-high market share of ***

percent, the domestic industry ***.194

For the above reasons, we do not find that there is a reasonable indication that subject imports are

having an adverse impact on the domestic industry. We find that the record as a whole contains clear and

convincing evidence that there is no reasonable indication of material injury by reason of subject imports

of STPP and no likelihood exists that contrary evidence will arise in a final investigation.

2. No Reasonable Indication of Threat of Material Injury by Reason of Subject

Imports from China

Section 771(F) of the Act directs the Commission to determine whether there is a reasonable

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

imports by analyzing whether “further dumped or subsidized imports are imminent and whether material

injury by reason of imports would occur unless an order is issued or a suspension agreement is

accepted.”195 The Commission may not make such a determination “on the basis of mere conjecture or

supposition,” and considers the threat factors “as a whole.”196 In making our determination, we have

considered all factors that are relevant to these investigations.197 Based on an evaluation of the relevant

statutory factors, we find that there is no reasonable indication that an industry in the United States is

threatened with material injury by reason of subject imports of STPP from China that are allegedly sold in

the United States at less than fair value and allegedly subsidized by the Government of China. 

The Commission received questionnaire responses from 8 foreign producers, accounting for ***

percent of known Chinese exports of STPP to the United States.198 Hubei Xingfa was the *** Chinese

producer of STPP that submitted a questionnaire response.199

As an initial matter, we do not find that the domestic industry producing STPP is vulnerable. 

While the operating performance of the domestic industry during the period examined was lackluster, the

industry improved its financial performance. Despite the growing presence of subject imports in the U.S.

market and the continued demand-depressing effects of the pending ban on phosphates in ADW

detergents, the industry realized its peak operating margin of *** percent in interim 2009.200 
 201 CR/PR at Tables VII-5 & C-3. 

 202 Chinese Respondents’ Postconf. Br. at 9-10. 

 203 Conf. Tr. at 83-85.

 204 Chinese production capacity increased from 752.9 million pounds in 2006 to 771.8 million pounds in 2008. 

CR/PR at Table VII-5.

 205 CR/PR at Table VII-5.

26

a. Likely Volume

The record in these investigations does not indicate a likelihood of a substantial increase in the

volume and market share of subject STPP imports into the United States in the imminent future. The

record reflects that U.S. demand for STPP declined between 2006 and 2008, was sharply lower in interim

2009 as compared with interim 2008, and is projected to decrease in the imminent future due to various

restrictions on the use of STPP in ADW detergents, including a nationwide ban effective July 1, 2010.201 

Because of these factors, subject producers will have substantially less incentive to ship STPP into the

U.S. market and to increase their market share. 

Although subject import volume and market share peaked in interim 2009 at levels considerably

above those reported in interim 2008, the circumstances of these increases indicate that the interim 2009

gains by subject imports are likely to be temporary. As discussed above, the market share gains by

subject imports in interim 2009 came almost exclusively at the expense of nonsubject imports rather than

the domestic industry, in that they were primarily attributable to ***. The increases in subject import

volume and market share observed in interim 2009 do not presage further increases in the imminent future

because ***. Taking all factors related to demand into account, the record does not indicate a likelihood

of a substantial increase in the volume and market share of subject STPP imports into the United States in

the imminent future. 

We are mindful that the restrictions discussed above regarding the use of STPP in ADW

detergents largely affect technical-grade STPP rather than food-grade STPP. Currently, however, few

Chinese producers have extensive capacity to produce food-grade STPP and their export potential for

food-grade STPP to the U.S. market in the imminent future is limited due to reported qualification and

safety issues with food-grade STPP.202 Also, Petitioners conceded that restrictions on the use of STPP in

ADW detergents in other third-country markets such as the EU and Canada are not likely to take effect in

the imminent future.203 Accordingly, in light of the pending restrictions in the U.S. market, subject

producers from China would have substantial incentives to ship STPP to third-country markets outside

the United States. 

 Chinese production capacity, capacity utilization, and export trends also do not indicate a

likelihood of substantially increased imports of the subject merchandise to the United States in the

imminent future. Chinese production capacity was 404.4 million pounds in interim 2009 compared with

419.4 million pounds in interim 2008.204 Chinese producers forecast declines in production capacity in

2009 and 2010.205 Although the Chinese industry reported relatively high unused capacity in interim

2009, the record indicates, with the exception of the sales destined for *** in 2009, that the Chinese

industry has exported only a small proportion of its shipments to the United States. Instead, it has

primarily focused on exports to third-country markets and supplying its domestic market: In particular,

between *** and *** percent of Chinese shipments of STPP went to the home market during the period

examined, and exports to the United States were below *** percent of total Chinese STPP shipments for
 206 CR/PR at Table VII-5. 

 207 We have considered several other factors in our analysis of likely subject import volume. As a ratio to total

shipments, inventories held by Chinese producers of STPP increased from *** percent in 2006 to *** percent in

2007, dropped to *** percent in 2008, and were *** percent and *** percent in interim 2008 and interim 2009,

respectively. CR/PR at Table VII-5. Inventories of subject merchandise in the United States rose during the latter

portion of the period examined. CR/PR at Table VII-10. However, we do not believe the increased inventories

make further subject imports likely in light of the demand considerations discussed above. 

We have also considered the nature of the alleged countervailable subsidies. In its notice of initiation of the

countervailing duty investigation, Commerce stated its intention to investigate four income tax programs, three grant

programs, one indirect and tax exemption program, and one preferential loan program. See Certain Sodium and

Potassium Phosphate Salts from China, 74 Fed. Reg. 54024 (October 21, 2009).

 208 CR/PR at Table VII-5.

 209 CR/PR at Tables IV-4, V-3, & V-4

 210 CR/PR at Table C-3. 

27

most of the period examined, and are projected to fall below *** percent in 2010.206 Finally, the level of

inventories is low.207

The record does not reflect, nor do Petitioners argue, that significant product-shifting from other

products to STPP from China will occur in the imminent future. Finally, there are no antidumping duty

orders or other trade measures in third-country markets that would encourage increased shipments of

STPP from China into the U.S. market in the imminent future.208

b. Likely Price Effects of Subject Imports

We do not find that subject imports will enter the U.S. market at prices that are likely to have a

significant depressing or suppressing effect on domestic prices or that are likely to increase demand for

further imports. As discussed above, there is mixed evidence on underselling, with subject imports

predominantly overselling the domestic like product on the higher-volume technical grade of STPP. As

subject producers from China have experienced considerable barriers to entry in terms of supplying the

U.S. market with food-grade STPP due to qualification and safety issues, and in light of the pervasive

overselling by subject producers in technical-grade STPP, we do not find that subject imports are likely to

enter the U.S. market at prices that are likely to have significant adverse effects on U.S. prices. 

Moreover, U.S. prices for STPP increased during the period examined and were significantly higher at the

end of the period than at the beginning. Notably, U.S. prices for STPP reached near period-high and

period-high levels, respectively, in 2008 and interim 2009, when subject imports achieved their highest

market share.209 As discussed previously, even with declining demand, the domestic industry was more

than able to raise its prices during the period examined in order to offset a dramatic increase in raw

material costs, as the industry attained its *** profitability in interim 2009, a period when domestic prices

and subject imports peaked.210 

c. Likely Impact of Subject Imports

We found above that during the period examined there was no significant correlation between

subject imports and the industry’s performance. Prices rose and operating performance improved as the

subject imports peaked. Because we have found that there is no likelihood of either substantially

increased imports or significant price effects, the subject imports will likely continue not to have a

significant impact on the domestic industry in the imminent future. 
 211 CR/PR at Table C-3.

 212 CR/PR at Table IV-2.

 213 CR/PR at Table IV-2.

 214 CR/PR at Table IV-7.

 215 CR/PR at Table IV-7.

 216 CR/PR at Table IV-11.

 217 See CR/PR at Table IV-11.

28

We also do not find that subject imports are likely to have an actual or potential negative effect

on the domestic industry’s existing development and production efforts. There is no indication that

subject imports have negatively affected development efforts by the domestic industry; on the contrary,

the domestic industry substantially increased its capital expenditures in interim 2009 as compared to their

interim 2008 level. Domestic capital expenditures increased by *** percent in interim 2009 compared to

interim 2008.211

Accordingly, we find that the record as a whole contains clear and convincing evidence that there

is no reasonable indication of a threat of material injury by reason of subject imports of STPP from China,

and no likelihood exists that contrary evidence will arise in a final investigation.

For the reasons stated above, we determine that there is no reasonable indication that an industry

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

STPP from China that are allegedly sold in the United States at less than fair value and allegedly

subsidized.

D. Anhydrous Dipotassium Phosphate (“DKP”)

1. Reasonable Indication of Threat of Material Injury By Reason of Subject

Imports

a. Likely Volume of Subject Imports

Subject import volume increased significantly during the period under examination in absolute

terms and as a share of both apparent U.S. consumption and domestic production. Subject import volume

declined by *** percent between 2006 and 2007, from *** pounds to *** pounds, but increased by ***

percent between 2007 and 2008, to *** pounds, a level *** percent higher than that in 2006.212 Subject

import volume was *** pounds in interim 2009, a level *** percent higher than that in interim 2008,

when subject import volume was *** pounds.213

Subject import shipments in the U.S. market declined by *** percent between 2006 and 2007,

from *** pounds to *** pounds, but increased by *** percent between 2007 and 2008, to *** pounds, a

level *** percent higher than that in 2006.214 Subject import shipments were *** percent higher in

interim 2009, at *** pounds, than in interim 2008, when they were *** pounds.215

Subject import shipments as a share of apparent U.S. consumption quantity declined from ***

percent in 2006 to *** percent in 2007, but increased to *** percent in 2008, and were *** percent in

interim 2009, up from *** percent in interim 2008.216 These gains in subject import market share came

entirely at the expense of the domestic industry, which also lost market share to nonsubject imports.217

The ratio of subject imports to domestic production declined from *** percent in 2006 to *** percent in
 218 CR/PR at Table IV-15.

 219 We note at the outset that the export data reported by Chinese producers likely represented the vast majority

of exports and accounted for *** percent of the comparable import data based on official U.S. statistics. CR at VII4; PR at VII-3. 

 220 CR/PR at Table VII-3.

 221 CR/PR at Tables IV-7, VII-3.

 222 CR/PR at Tables IV-7, VII-3.

 223 CR/PR at Table VII-3.

 224 CR/PR at Table IV-2.

 225 CR/PR at Table VII-3.

29

2007, but increased to *** percent in 2008, and was *** percent in interim 2009, up from *** percent in

interim 2008.218

Based on the preceding analysis, we find that subject import volume is significant, both in

absolute terms and relative to consumption and production in the United States, and that the increase in

subject import volume and market penetration also was significant. Furthermore, for the following

reasons, we find that this significant rate of increase in the volume and market penetration of subject

imports during the period under examination indicates the likelihood of substantially increased imports in

the imminent future.

Subject foreign producers219 in China operated at a low rate of capacity utilization during the

period under examination, resulting in significant excess capacity, and possessed ample excess capacity at

the end of the period with which to continue increasing their exports of DKP to the U.S. market. 

Responding subject Chinese producers reported a low, albeit increasing, rate of capacity utilization

between 2006 and 2008, at *** percent in 2006, *** percent in 2007, and *** percent in 2008, and a

lower capacity utilization rate in interim 2009, at *** percent, than in interim 2008, at *** percent.220 

Due to their persistently low rate of capacity utilization, responding subject Chinese producers

reported excess capacity of *** pounds in 2006, equivalent to *** percent of apparent U.S. consumption

that year; *** pounds in 2007, equivalent to *** percent of apparent U.S. consumption that year; and ***

pounds in 2008, equivalent to *** percent of apparent U.S. consumption that year.221 They reported

excess capacity of *** pounds in interim 2009, equivalent to *** percent of apparent U.S. consumption

during the period, up from excess capacity of *** pounds in interim 2008, which was equivalent to ***

percent of apparent U.S. consumption.222 Responding Chinese producers project that the magnitude of

their excess capacity will increase further in the imminent future to *** pounds in full year 2009 and ***

pounds in 2010, as their rate of capacity utilization is expected to remain a low *** percent in full year

2009 and *** percent in 2010.223 Chinese producers demonstrated the ability to use their excess capacity

to increase exports to the United States rapidly between the first and second halves of 2008, when subject

imports increased from *** pounds to *** pounds or by *** percent.224 

Subject foreign producers in China also have the capability to increase their exports to the United

States in the imminent future by drawing from substantial end-of-period inventories held in China. For

example, the end-of-period inventories held by responding Chinese producers in interim 2009 were ***

pounds, which was the equivalent of *** percent of their shipments to the United States during that

period.225

Subject Chinese DKP producers not only possess the ability to increase exports to the United

States significantly in the imminent future, but also the incentive to do so given their dependence on

exports during the period under examination, and their tendency to direct *** increasing percentages of
 226 We note that there is little evidence on the record of the preliminary phase of these investigations that

responding Chinese producers could shift from the production of other products to the production of DKP, given that

only one responding Chinese producer reported producing other products on the same equipment used to produce

subject phosphate salts. CR at VII-4; PR at VII-3. There also is little evidence on the record concerning the likely

effects of subject imports on domestic industry development and production efforts. We intend to investigate these

issues further in any final phase of these investigations. We also note that there are no dumping findings or

antidumping remedies on subject DKP in third-country markets. CR at VII-13-14; PR at VII-7. While we have

considered the nature of the subsidies, we do not find this factor conclusive for our analysis. See CR at I-6-7; PR at

I-4-5. 

 227 CR/PR at Table VII-3.

 228 CR/PR at Table VII-3. 

 229 CR/PR at Table VII-3.

 230 CR/PR at Table VII-3.

 231 CR/PR at Table VII-3.

 232 CR at V-6-7; PR at V-3-4.

 233 CR at V-6; PR at V-4.

30

their exports to the United States.226 Responding Chinese producers reported that their exports to all

markets as a share of total shipments were *** percent in 2006, *** percent in 2007, and *** percent in

2008, and were at *** percent in interim 2008 and *** percent in interim 2009.227 Their exports to all

markets as a share of total shipments are projected to be *** percent in full year 2009 and *** percent in

2010.228

Responding Chinese producers increased their export orientation towards the United States

during the period under examination, with the share of their total shipments exported to the United States

increasing from *** percent in 2006 to *** percent in 2008.229 The share of their total shipments

exported to the United States in interim 2009 was *** percent, up from *** percent in interim 2008.230 It

is projected to be *** percent in full year 2009 and *** percent in 2010, well above the levels in 2006 and

2007.231

Consequently, we conclude that the volume of subject imports, which was significant during the

period under examination, is likely to increase substantially in the imminent future.

b. Likely Price Effects of the Subject Imports

As noted above, the record indicates that there is a high degree of substitutability between subject

imports and the domestic like product. 

The Commission collected quarterly pricing data on one DKP product, product 1, which

accounted for *** percent of domestic producers’ U.S. shipments of DKP and essentially all reported

U.S. imports of DKP from China during January 2006 to June 2009.232 Pricing data were reported by one

domestic producer and eight importers.233 These data indicate that subject imports generally undersold

the domestic like product throughout the period under examination.

Overall, subject imports undersold the domestic like product in 11 of 14 quarterly comparisons,

or 78.6 percent of the time, at margins ranging from 2.4 percent to 21.0 percent and averaging ***
 234 CR/PR at Table V-7.

 235 Although there were *** confirmed lost sales or revenue allegations, one purchaser, *** reported that ***. 

CR at V-20-21; PR at V-11. 

 236 CR/PR at Table V-1.

 237 CR at V-1; PR at V-1; CR/PR at Figure V-1. Due in part to the increasing cost of potassium hydroxide, raw

material costs as a share of the domestic industry’s cost of goods sold increased from *** percent over the 2006-

2008 period to *** percent in the first half of 2009. CR at V-1; PR at V-1.

 238 CR/PR at Table VI-1.

 239 CR/PR at Table VI-1.

 240 Commissioner Pinkert finds that this evidence indicates significant price suppression over the course of the

period under examination.

 241 See CR/PR at Figure V-1, Table VI-1.

 242 Commerce initiated an antidumping duty investigation on certain phosphate salts based on estimated dumping

margins ranging from 33.7 percent to 177.4 percent. 74 Fed. Reg. at 54026. 

31

percent.234 Given the frequency of underselling and the margins at which underselling occurred, we find

subject import underselling to be significant.235

Although we find no evidence of price depression, as the price of domestic producer shipments of

product 1 increased from $*** per pound in the first quarter of 2006 to $*** per pound in the second

quarter of 2009, we do find some evidence of price suppression.236 The cost of potassium hydroxide,

however, a major raw material input in the production of DKP, increased significantly in 2008 and

2009.237 Because domestic producers were unable to increase their prices sufficiently to cover the

increased cost of raw materials, the domestic industry’s ratio of cost of goods sold to net sales increased

throughout the period under examination, from *** percent in 2006 to *** percent in 2007 and again to

*** percent in 2008.238 This ratio was *** percent in interim 2009, up from *** percent in interim

2008.239 240

We further find that subject imports are entering at prices that are likely to have a significant

suppressing effect on domestic prices, and are likely to increase demand for further imports, in the

imminent future. As detailed above, DKP produced in China and the United States is highly

substitutable. Accordingly, the frequency and magnitude of subject import underselling during the period

under examination, coupled with the likelihood of significantly increased subject import volume, makes it

likely that subject imports will suppress domestic prices in the imminent future. We find further support

for this finding in evidence that the price of potassium hydroxide and the domestic industry’s ratio of cost

of goods sold to net sales both reached their highest level of the period under examination in the first half

of 2009.241

Thus, we conclude that subject import underselling will likely continue, creating further demand

for subject imports in the U.S. market and likely depressing or suppressing domestic prices to a

significant degree.

c. Likely Impact of Subject Imports242

The domestic industry performed well according to most measures between 2006 and 2008, but

its performance deteriorated markedly in interim 2009 as compared to interim 2008. The domestic

industry’s capacity increased by *** percent between 2006 and 2008, from *** pounds in 2006 to ***

pounds in 2007 and then to *** pounds in 2008, and was *** percent higher in interim 2009, at ***
 243 CR/PR at Table III-2.

 244 CR/PR at Table III-2.

 245 CR/PR at Table III-2.

 246 CR/PR at Table III-2.

 247 CR/PR at Table III-2. The domestic industry’s end-of-period inventories declined from *** pounds in 2006,

equivalent to *** percent of U.S. shipments, to *** pounds in 2008, equivalent to *** percent of U.S. shipments. Id.

at Table III-10. Its end-of-period inventories were *** pounds in interim 2009, down from *** pounds in interim

2008. However, the ratio of end-of-period inventories to U.S. shipments was higher in interim 2009, at *** percent,

than in interim 2008, at *** percent. Id.

 248 CR/PR at Table IV-7.

 249 CR/PR at Table IV-7.

 250 CR/PR at Table IV-11.

 251 CR/PR at Table IV-11.

 252 CR/PR at Table III-18.

 253 CR/PR at Table III-18.

32

pounds, than in interim 2008, at *** pounds.243 By contrast, despite increasing apparent U.S.

consumption, the domestic industry’s production declined by *** percent between 2006 and 2008,

increasing from *** pounds in 2006 to *** pounds in 2007 before declining to *** pounds in 2008.244

The downward trend in domestic industry production *** between the interim periods, with domestic

industry production *** percent lower in interim 2009, at *** pounds, as compared with interim 2008, at

*** pounds.245 

The domestic industry’s declining rate of capacity utilization reflects these trends. Between 2006

and 2008, the domestic industry’s rate of capacity utilization declined from *** percent in 2006 to ***

percent in 2007 and then to *** percent in 2008, due to both the *** percent increase in domestic industry

capacity and to the *** percent decline in domestic industry production.246 The domestic industry’s rate

of capacity utilization was only *** percent in interim 2009, down from *** percent in interim 2008, due

largely to the fact that domestic industry production was *** percent lower in interim 2009 than in

interim 2008, but also because domestic industry capacity was *** percent higher.247

The domestic industry’s U.S. shipments followed a similar trend to production, increasing from

*** pounds in 2006 to *** pounds in 2007 before declining to *** pounds in 2008, a level still ***

percent higher than in 2006.248 The domestic industry’s U.S. shipments were *** percent lower in interim

2009, at *** pounds, than in interim 2008, at *** pounds.249 The domestic industry’s share of apparent

U.S. consumption increased from *** percent in 2006 to *** percent in 2007, but declined to *** percent

in 2008.250 It was *** percent in interim 2009, down from *** percent in interim 2008.251

Contrary to the domestic industry’s production trends, domestic industry employment and hours

worked increased throughout the period under examination, at the expense of productivity. Domestic

industry employment increased from *** production and related workers (“PRWs”) in 2006 to *** PRWs

in 2007 and *** PRWs in 2008, and was *** PRWs in interim 2009, compared to *** PRWs in interim

2008.252 Hours worked increased from *** hours in 2006 to *** hours in 2007 and *** hours in 2008,

and were *** hours in interim 2009, up from *** hours in interim 2008.253 Because the increase in

employment and hours worked coincided with a decline in production, the domestic industry’s
 254 CR/PR at Table III-18.

 255 CR/PR at Table VI-1.

 256 CR/PR at Table VI-1.

 257 CR/PR at Table VI-1.

 258 CR/PR at Table VI-1.

 259 CR/PR at Table VI-1.

 260 CR/PR at Table VI-1.

 261 CR/PR at Table VI-9.

 262 CR/PR at Table VI-9.

 263 CR/PR at Table VI-1.

33

productivity in pounds produced per hour declined *** from *** in 2006 to *** in 2007 and *** in 2008,

and was *** in interim 2009, compared to *** in interim 2008.254

The domestic industry’s net sales volume increased from *** pounds in 2006 to *** pounds in

2007, but declined to *** pounds in 2008, a level *** percent lower than that in 2006.255 This downward

trend accelerated between the interim periods, as the domestic industry’s net sales volume was ***

percent lower in interim 2009, at *** pounds, than in interim 2008, at *** pounds.256 

The average unit value of domestic industry shipments increased, as domestic producers were

able to pass at least a portion of their higher costs on to purchasers. The domestic industry’s net sales

revenues increased between 2006 and 2008, notwithstanding that sales quantities declined during this

period; net sales revenues declined by less than net sales volume between the interim periods. The

domestic industry’s net sales value increased by *** percent between 2006 and 2008, from $*** in 2006

to $*** in 2007 and then to $*** in 2008.257 The domestic industry’s net sales value was *** percent

lower in interim 2009, at $***, than in interim 2008, at $***.258 The domestic industry’s operating

income declined from $*** in 2006, or *** percent of net sales, to $*** in 2007, or *** percent of net

sales, but increased to $*** in 2008, or *** percent of net sales.259 Its operating income was $*** in

interim 2009, or *** percent of net sales, down from $*** in interim 2008, or *** percent of net sales.260

The domestic industry’s capital expenditures increased from $*** in 2006 to $*** in 2007, but

declined to $*** in 2008, a level *** percent lower than that in 2006.261 They were *** percent higher in

interim 2009, at $***, than in interim 2008, at $***. The domestic industry’s research and development

expenditures increased *** percent between 2006 and 2008, from $*** to $***, but were *** percent

lower in interim 2009, at $***, than in interim 2008, at $***.262

Based on the available domestic industry performance data, we are unable to find a reasonable

indication that the domestic industry is suffering present material injury by reason of subject imports and

we do not find this industry to be vulnerable. The domestic industry experienced *** operating income

margins throughout the period under examination, including an operating income margin of *** percent

in interim 2009.263 Both employment and hours worked increased through the period. We note, however,

that the significant deterioration in several key indices of domestic industry performance between the

interim periods, including production, capacity utilization, net shipment quantity, and U.S. shipment

volume, coincided with a significant increase in subject import market share, which came at the domestic

industry’s expense. 

We do find a reasonable indication that the domestic industry is threatened with imminent

material injury by reason of subject imports. The record in the preliminary phase of these investigations

indicates that current adverse trends observed during the latter portion of the period under examination

will continue. During the period under examination, subject import volume increased significantly in
 264 See section IV.B.2., supra.

 265 See CR at II-25; PR at II-15; CR/PR at Tables II-7, 8.

 266 See CR/PR at Table IV-11. U.S. shipments of nonsubject imports increased from *** pounds in 2006, or ***

percent of apparent U.S. consumption, to *** pounds in 2007, or *** percent of apparent U.S. consumption, and ***

pounds in 2008, or *** percent of apparent U.S. consumption. CR/PR at Tables IV-7, 11. U.S. shipments of

nonsubject imports were *** pounds in interim 2009, or *** percent of apparent U.S. consumption, up from ***

pounds in interim 2008, or *** percent of apparent U.S. consumption. Id.

 267 CR/PR at Table IV-11.

 268 CR/PR at Table IV-11.

 269 See CR at D-3; PR at D-3; CR/PR at Figure D-1. The average unit value of U.S. shipments of nonsubject

imports was higher than the average unit value of U.S. shipments of subject imports throughout the period under

examination. CR/PR at Table C-1. We recognize that average unit value comparisons may be influenced by product

mix issues. 

34

absolute terms and relative to apparent U.S. consumption and domestic production, and this increase

continued even after resolution of the phosphoric acid and potassium hydroxide supply shortages that had

limited domestic DKP production in 2008.264 Subject import underselling was pervasive, and there was

some evidence of price suppression. In the imminent future, the subject foreign producers’ substantial

excess capacity and export orientation make it likely that subject import volume and market share will

continue to increase at a significant rate. The frequency and magnitude of subject import underselling,

coupled with the high degree of substitutability of subject imports and the domestic like product and the

importance of price to purchasers, make it likely that significant subject import underselling will continue,

increasing demand for subject imports and depressing and suppressing domestic prices. Although we do

not find the domestic industry vulnerable to material injury for the reasons addressed above, we do find

that the likely increase in subject import volume, coupled with its likely adverse price effects, is likely to

worsen the domestic industry’s condition, inflicting material injury on the domestic industry in the

imminent future. 

We have considered the extent to which any threat of imminent material injury to the domestic

industry is attributable to nonsubject imports. As an initial matter, the record indicates that there is a high

degree of substitutability between subject imports and the domestic like product, on the one hand, and

nonsubject imports, on the other.265 We are mindful that nonsubject imports maintained a significant

presence in the U.S. market throughout the period under examination, accounting for between *** percent

and *** percent of apparent U.S. consumption during the period.266 Nonetheless, subject imports

captured significantly more market share from the domestic industry than did nonsubject imports. 

Between 2006 and 2008, subject imports captured *** percentage points of market share from the

domestic industry, whereas nonsubject imports captured only *** percentage points.267 Of the ***

percentage point decline in domestic industry market share in interim 2009 as compared to interim 2008,

subject imports captured *** percentage points and nonsubject imports only *** percentage points.268

Moreover, nonsubject imports were generally priced higher than subject imports and did not

undersell the domestic like product to the same extent. Nonsubject imports were priced higher than

subject imports in 59 of 73 possible comparisons, or 80.8 percent of the time.269 Nonsubject imports were

priced lower than the domestic like product in 44 of 65 comparisons, or 67.7 percent of the time, whereas

subject imports undersold the domestic like product in 11 of 14 comparisons, or 78.6 percent of the
 270 Compare CR at D-3; PR at D-3 with CR/PR at Table V-7. 

 271 No information on the capacity and export orientation of DKP producers in nonsubject countries is available

on the record of the preliminary phase of these investigations. See CR at VII-14-16; VII-7-8. We plan to investigate

further the role of nonsubject imports in the U.S. market in any final phase of these investigations. We also note that

the threat of material injury to the domestic industry cannot be attributed to demand trends because apparent U.S.

consumption of DKP increased during the period under examination and is expected to continue to increase

modestly in the imminent future, as addressed in section IV.B.1. above. CR/PR at Table IV-7; CR at II-22; PR at II12-13.

 272 Chairman Aranoff, Vice Chairman Pearson, and Commissioner Okun do not join this section of the opinion,

inasmuch as they find a reasonable indication of threat of material injury by reason of subject imports of MKP.

 273 CR/PR at Table IV-3.

 274 CR/PR at Table IV-3.

 275 CR/PR at Table IV-8.

 276 CR/PR at Table IV-8.

 277 CR/PR at Table IV-12.

35

time.270 Thus, any threat of material injury we have found from subject imports cannot be attributed to

nonsubject imports.271

In sum, the record indicates that there is a causal nexus between subject imports and the threat of

material injury to the domestic industry. We find that the likely significant increase in subject import

volume and market share, and the likely significant adverse price effects resulting therefrom, is likely to

cause material injury to the domestic industry imminently. Accordingly, based on the record in the

preliminary phase of these investigations, we conclude that there is a reasonable indication that the

domestic industry producing DKP is threatened with material injury by reason of subject imports from

China.

E. Anhydrous Monopotassium Phosphate (“MKP”)

1. Reasonable Indication of Material Injury By Reason of Subject Imports 272

a. Volume of Subject Imports

Subject import volume increased significantly during the period under examination in absolute

terms and as a share of both apparent U.S. consumption and domestic production. Subject import volume

increased by *** percent between 2006 and 2008, from *** pounds in 2006 to *** pounds in 2007 and

then to *** pounds in 2008.273 Subject import volume was *** pounds in interim 2009, a level ***

percent higher than that in interim 2008, when subject import volume was *** pounds.274 

Subject import shipments in the U.S. market increased by *** percent between 2006 and 2008,

from *** pounds in 2006 to *** pounds in 2007 and then to *** pounds in 2008.275 Subject import

shipments were *** percent higher in interim 2009, at *** pounds, than in interim 2008, when they were

at *** pounds.276

Subject import shipments as a share of apparent U.S. consumption quantity increased from ***

percent in 2006 to *** percent in 2007 and to *** percent in 2008, and were *** percent in interim 2009,

up from *** percent in interim 2008.277 The ratio of subject imports to domestic production moved from
 278 CR/PR at Table VI-16.

 279 In any final phase of the investigations, we intend to further explore the extent to which subject imports and

the domestic like product serve the same applications in the U.S. market.

 280 CR at V-6-7; PR at V-4.

 281 CR at V-6; PR at V-4.

 282 CR/PR at Table V-7.

 283 Although there were no confirmed lost sales or revenue allegations, one purchaser reported that it had ***. 

CR at V-21; PR at V-12.

 284 CR/PR at Table V-2.

 285 CR at V-1; PR at V-1; CR/PR at Figure V-1. Due in part to the increasing cost of potassium hydroxide, raw

material costs as a share of the domestic industry’s cost of goods sold increased from *** percent over the 2006-

2008 period to *** percent in the first half of 2009. CR at V-1; PR at V-1.

 286 CR/PR at Table VI-2.

 287 CR/PR at Table VI-2.

36

*** percent in 2006 to *** percent in 2007 and *** percent in 2008, and was at *** percent in interim

2009, up from *** percent in interim 2008.278

Based on the preceding analysis, we find that subject import volume is significant, both in

absolute terms and relative to consumption and production in the United States, and that the increase in

subject import volume and market penetration also was significant. 

b. Price Effects of the Subject Imports

The record indicates that there is a high degree of substitutability between subject imports and the

domestic like product, as detailed in section IV.B.3. above.279

The Commission collected quarterly pricing data on one MKP product, product 2, which

accounted for *** percent of domestic producers’ U.S. shipments of MKP and *** percent of U.S.

imports of MKP from January 2006 to June 2009.280 Pricing data were reported by one domestic

producer and 12 importers.281 These data indicate that subject imports undersold the domestic like

product throughout the period under examination. Overall, subject imports undersold the domestic like

product in all 14 quarterly comparisons at margins ranging from 36.2 percent to 72.6 percent and

averaging *** percent.282 Given the frequency of underselling and the margins at which underselling

occurred, we find subject import underselling to be significant.283

Although we find no evidence of price depression, as the price of domestic producer shipments of

product 2 increased from $*** per pound in the first quarter of 2006 to $*** per pound in the fourth

quarter of 2008, we find evidence of significant price suppression.284 The cost of potassium hydroxide, a

major raw material input in the production of MKP, increased significantly in 2008 and 2009.285 Because

domestic producers were unable to increase their prices sufficiently to cover the increased cost of raw

materials, the domestic industry’s ratio of cost of goods sold to net sales increased between 2006 and

2008, from *** percent in 2006 to *** percent in 2007 and *** percent in 2008.286 This ratio was ***

percent in interim 2009, which was down from *** percent in interim 2008, and was *** percentage

points higher in interim 2009 than in 2006.287 

We also note that lower-priced subject imports have made the market more price competitive and

put downward pricing pressure on domestic prices. Chinese MKP was priced lower than domestic MKP

in 14 of 14 possible comparisons and priced lower than MKP imported from nonsubject countries in 59 of
 288 CR at D-3; PR at D-3; CR/PR at Table V-7. 

 289 CR/PR at Table IV-12.

 290 CR/PR at Table IV-12.

 291 CR/PR at Table IV-12.

 292 Commerce initiated an antidumping duty investigation on certain phosphate salts based on estimated dumping

margins ranging from 33.7 percent to 177.4 percent. 74 Fed. Reg. at 54026. 

 293 CR/PR at Table III-3.

 294 CR/PR at Table III-3.

 295 CR/PR at Table III-3.

 296 CR/PR at Table III-3.

 297 CR/PR at Table III-3.

 298 CR/PR at Table VI-2.

 299 CR/PR at Table VI-2.

37

65 possible comparisons.288 As a consequence, nonsubject imports steadily lost market share to the

subject imports. In 2006, nonsubject imports maintained *** percent of the market for MKP. By 2008,

that figure had dropped to *** percent.289 In interim 2008, nonsubject imports maintained *** percent of

the market.290 By interim 2009, that figure had dropped to *** percent, representing a loss ***

percentage points of market share that was gained entirely by subject imports.291

c. Impact of the Subject Imports on the Domestic Industry292

The domestic industry suffered a significant decline in operating income between 2006 and 2008,

and its performance continued to deteriorate in interim 2009 according to most measures. The domestic

industry’s capacity increased by *** percent between 2006 and 2008, from *** pounds in 2006 to ***

pounds in 2007 and then to *** pounds in 2008, but was *** percent lower in interim 2009, at ***

pounds, than in interim 2008, at *** pounds.293 Its production increased by *** percent between 2006

and 2007, from *** pounds to *** pounds, but declined to *** pounds in 2008.294 This downward trend

in domestic industry production *** between the interim periods, with domestic industry production ***

percent lower in interim 2009, at *** pounds, than in interim 2008, at *** pounds.295

The domestic industry’s rate of capacity utilization reflects these trends, increasing from ***

percent in 2006 to *** percent in 2007, but declining to *** percent in 2008, due to the *** percent

increase in domestic industry capacity but also to the *** percent decline in domestic industry production

over the period.296 The domestic industry’s rate of capacity utilization was only *** percent in interim

2009, down from *** percent in interim 2008, due to the fact that domestic industry production was ***

percent lower in interim 2009 than in interim 2008.297

The domestic industry’s net sales volume increased from *** pounds in 2006 to *** pounds in

2007 and *** pounds in 2008.298 Its net sales volume declined significantly between the interim periods,

however, and was *** percent lower in interim 2009, at *** pounds, than in interim 2008, at ***

pounds.299 
 300 CR/PR at Table IV-7.

 301 CR/PR at Table IV-7.

 302 CR/PR at Table IV-12.

 303 CR/PR at Table IV-12. The domestic industry’s end-of-period inventories increased from *** pounds in 2006

to *** pounds in 2007, but declined to *** pounds in 2008. Id. at Table III-11. The ratio of the domestic industry’s

end-of period inventories to its U.S. shipments increased during the period, however, from *** percent in 2006 to

*** percent in 2007 and *** percent in 2008. Id. The domestic industry’s end-of-period inventories were ***

pounds in interim 2009, equivalent to *** percent of U.S. shipments, down from *** pounds in interim 2008,

equivalent to *** percent of U.S. shipments. Id.

 304 CR/PR at Table III-19.

 305 CR/PR at Table III-19.

 306 CR/PR at Table III-19.

 307 CR/PR at Table VI-2.

 308 CR/PR at Table VI-2.

 309 CR/PR at Table VI-2.

 310 CR/PR at Table VI-2.

 311 CR at VI-17; PR at VI-4.

38

The domestic industry’s U.S. shipments followed a similar trend, increasing from *** pounds in

2006 to *** pounds in 2007 and then to *** pounds in 2008.300 Its U.S. shipments were *** percent

lower in interim 2009, at *** pounds, than in interim 2008, at *** pounds.301 The domestic industry’s

share of apparent U.S. consumption increased from *** percent in 2006 to *** percent in 2007, but

declined to *** percent in 2008.302 It was only *** percent in interim 2009, however, *** than in interim

2008 when it was *** percent.303

Domestic industry employment and hours worked increased between 2006 and 2008, but were

significantly lower in interim 2009 than in interim 2008. Domestic industry employment increased from

*** PRWs in 2006 to *** PRWs in 2007 and then to *** PRWs in 2008, but was *** PRWs in interim

2009, down from *** PRWs in interim 2008.304 Hours worked increased from *** hours in 2006 to ***

hours in 2007 and then to *** hours in 2008, but were *** hours in interim 2009, down from *** hours in

interim 2008.305 The domestic industry’s productivity in pounds produced per hour increased from *** in

2006 to *** in 2007 but declined to *** in 2008, and was *** in interim 2009, down from *** in interim

2008.306

The average unit value of domestic industry shipments increased, as domestic producers were

able to pass at least a portion of their higher costs on to purchasers. The domestic industry’s net sales

revenues increased at a greater rate than its net sales volume between 2006 and 2008, and were higher in

interim 2009 than in interim 2008 notwithstanding that sales volumes were lower. The domestic

industry’s net sales value increased by *** percent between 2006 and 2008, from $*** in 2006 to $*** in

2007 and then to $*** in 2008.307 The domestic industry’s net sales value was *** percent lower in

interim 2009, at $***, than in interim 2008, at $***.308 The domestic industry’s operating income

margins declined from *** percent of net sales in 2006 to *** percent of net sales in 2007, and then to

*** percent of net sales in 2008.309 Its operating income was $*** in interim 2009, or *** percent of net

sales, up from $*** in interim 2008, or *** percent of net sales.310 The trend in the domestic industry’s

return on investment was the same as the trend in its operating income margin.311 
 312 CR/PR at Table VI-9.

 313 CR/PR at Table VI-9.

 314 See CR/PR at Table IV-12.

 315 See section IV.B.2., supra.

 316 See CR at II-25; PR at II-15; CR/PR at Tables II-7, 8.

 317 See CR/PR at Table IV-12. U.S. shipments of nonsubject imports increased from *** pounds in 2006, or ***

percent of apparent U.S. consumption, to *** pounds in 2007, or *** percent of apparent U.S. consumption, but

declined to *** pounds in 2008, or *** percent of apparent U.S. consumption, a level still *** percent above that in

2006. CR/PR at Tables IV-8, 12. U.S. shipments of nonsubject imports were *** pounds in interim 2009, or ***

percent of apparent U.S. consumption, down from *** pounds in interim 2008, or *** percent of apparent U.S.

consumption. Id.

 318 Based on the record evidence in the preliminary phase of this investigation, Commissioner Pinkert finds that

subject MKP is a commodity product and that price competitive, non-subject imports were a significant factor in the

U.S. market during the period of investigation. He further finds, however, that non-subject imports would not have

replaced subject imports during the period of investigation without benefit to the domestic industry. The principal

sources of non-subject imports during the period were Israel and Mexico. CR/PR at Figure D-2; CR at VII-15-16;

PR at VII-7-8. It appears that non-subject countries could have replaced the subject imports during the period under

examination, although it is unclear whether they would have done so. In 2006 and 2007, imports from both Israel

and Mexico consistently undersold domestically produced MKP at prices that were comparable to those for Chinese

MKP. Beginning in 2008, however, the average prices for imports from Israel and Mexico began to increase above

those for imports of MKP from China and remained higher than prices for Chinese material in interim 2009. CR/PR

at Figure D-2. Thus, even if nonsubject imports had replaced subject imports, the record indicates that antidumping

relief would nevertheless have benefitted the domestic industry through higher prices.

39

The domestic industry’s capital expenditures increased from $*** in 2006 to $*** in 2007, but

declined to $*** in 2008, a level *** percent lower than that in 2006.312 Capital expenditures were ***

percent lower in interim 2009, at $***, than in interim 2008, when they were $***. The domestic

industry’s research and development expenditures increased *** percent between 2006 and 2008, from

$*** to $***, but were *** percent lower in interim 2009, at $***, than in interim 2008, at $***.313 

We find a reasonable indication that the domestic industry is materially injured by reason of

subject imports. The industry experienced declining operating income margins and return on investment

between 2006 and 2008, while the U.S. market was experiencing strong and steady growth. Many of the

domestic industry performance measures deteriorated significantly between 2007 and 2008, and between

the interim periods, especially production, capacity utilization, productivity, and capital expenditures. 

This deterioration corresponds to the domestic industry’s loss of market share to subject imports from

2007 to 2008 and, more sharply, between the interim periods.314 It is noteworthy that subject imports

captured a *** of market share from the domestic industry after resolution of the phosphoric acid and

potassium hydroxide supply shortages that had constrained domestic MKP production in 2008.315

Pervasive subject import underselling at significant margins contributed to this market share shift, given

the high degree of substitutability between subject imports and the domestic like product and the

importance of price to purchasing decisions, and also suppressed domestic prices significantly. 

We have considered the extent to which any material injury suffered by the domestic industry is

attributable to nonsubject imports. As an initial matter, the record indicates that there is a high degree of

substitutability between subject imports and the domestic like product, on the one hand, and nonsubject

imports, on the other.316 Nonsubject imports also maintained a significant presence in the U.S. market

throughout the period under examination, satisfying between *** percent and *** percent of apparent

U.S. consumption during the period.317 318 
 319 See CR/PR at Table IV-12.

 320 CR/PR at Table IV-12.

 321 See CR at D-3; PR at D-3; CR/PR at Figure D-1. The average unit value of U.S. shipments of nonsubject

imports was higher than the average unit value of U.S. shipments of subject imports during most of the period under

examination, with the exception of interim 2008. CR/PR at Table C-2. We recognize that average unit value

comparisons may be influenced by product mix issues. 

 322 Compare CR at D-3; PR at D-3 with CR/PR at Table V-7. 

 323 No information on the capacity and export orientation of MKP producers in nonsubject countries is available

on the record of the preliminary phase of these investigations. See CR at VII-14-16; PR at VII-7-8. We plan to

investigate further the role of nonsubject imports in the U.S. market in any final phase of these investigations.

 324 CR/PR at Table IV-8.

 325 Commissioner Pinkert does not join in the remainder of this paragraph. 

 326 CR/PR at Table IV-8.

 327 Commissioners Lane, Williamson, and Pinkert do not join this section of the opinion.

40

Nonsubject imports lost market share to subject imports throughout the period under examination,

and did not adversely affect domestic industry market share.319 When the domestic industry lost ***

percentage points of market share to subject imports between the interim periods, nonsubject imports lost

*** percentage points of market share to subject imports.320 Nonsubject imports also were generally

priced higher than subject imports and did not undersell the domestic like product to the same extent. 

Nonsubject imports were priced higher than subject imports in 59 of 65 possible comparisons, or 90.8

percent of the time.321 Nonsubject imports were priced lower than the domestic like product in only 21 of

65 comparisons, or 32.3 percent of the time, whereas subject imports undersold the domestic like product

in all 14 of 14 comparisons.322 

Thus, any material injury we have found from subject imports cannot be attributed to nonsubject

imports.323 We also note that demand trends cannot account for any material injury to the domestic

industry because apparent U.S. consumption of MKP increased by *** percent between 2006 and 2008.324

325 Although apparent U.S. consumption was *** percent lower in interim 2009 than in interim 2008, the

reduction in domestic industry production, shipments, and employment between the interim periods was

far greater than the reduction in apparent U.S. consumption.326

In sum, the record indicates that there is a causal nexus between subject imports and the material

injury experienced by the domestic industry. Accordingly, based on the record in the preliminary phase

of these investigations, we conclude that there is a reasonable indication that the domestic industry

producing MKP is materially injured by reason of subject imports from China.

2. Reasonable Indication of Threat of Material Injury By Reason of Subject

Imports327

a. Likely Volume of Subject Imports

Subject import volume increased significantly during the period under examination in absolute

terms and as a share of both apparent U.S. consumption and domestic production. Subject import volume

increased by *** percent between 2006 and 2008, from *** pounds in 2006 to *** pounds in 2007 and
 328 CR/PR at Table IV-3.

 329 CR/PR at Table IV-3.

 330 CR/PR at Table IV-8.

 331 CR/PR at Table IV-8.

 332 CR/PR at Table IV-12.

 333 CR/PR at Table IV-16.

 334 We note at the outset that coverage of export data reported by Chinese producers compared to official U.S.

statistics was *** percent. CR at VII-4; PR at VII-3. 

 335 CR/PR at Table VII-4.

 336 CR/PR at Table VII-4.

 337 CR/PR at Table VII-4.

 338 CR/PR at Tables IV-8, VII-4.

41

*** pounds in 2008.328 Subject import volume was *** pounds in interim 2009, a level *** percent

higher than that in interim 2008, when subject import volume was *** pounds.329 

Subject import shipments in the U.S. market increased by *** percent between 2006 and 2008,

from *** pounds in 2006 to *** pounds in 2007 and *** pounds in 2008.330 Subject import shipments

were *** percent higher in interim 2009, at *** pounds, than in interim 2008, when they were ***

pounds.331

Subject import shipments as a share of apparent U.S. consumption quantity increased from ***

percent in 2006 to *** percent in 2007 and to *** percent in 2008, and were *** percent in interim 2009,

up from *** percent in interim 2008.332 The ratio of subject imports to domestic production increased

from *** percent in 2006 to *** percent in 2007 and *** percent in 2008, and was *** percent in interim

2009, up from *** percent in interim 2008.333

Thus, we find that subject import volume is significant, both in absolute terms and relative to

consumption and production in the United States, and that the increase in subject import volume and

market penetration also was significant. For the following reasons, we also find that this significant rate

of increase in the volume and market penetration of subject imports during the period under examination

indicates the likelihood of substantially increased imports in the imminent future.

Responding subject producers334 in China reported a significant increase in their capacity during

the period under examination, notwithstanding their generally low rates of capacity utilization, and

possessed ample excess capacity at the end of the period with which to continue increasing their exports

of MKP to the U.S. market at a significant rate. Responding subject Chinese producers reported that they

increased their capacity by *** percent between 2006 and 2008, from *** pounds in 2006 and 2007 to

*** pounds in 2008.335 They reported a capacity of *** pounds in interim 2009, down from *** pounds

in interim 2008, and project capacity of *** pounds in full year 2009 and 2010, a level *** percent above

that in 2008.336 They reported a capacity utilization rate of *** percent in 2006, *** percent in 2007 and

*** percent in 2008, but a lower capacity utilization rate in interim 2009, at *** percent, than in interim

2008, at *** percent.337 

Due to their generally low rate of capacity utilization and increased capacity in 2008, responding

subject Chinese producers reported excess capacity of *** pounds in 2006, equivalent to *** percent of

apparent U.S. consumption that year, *** pounds in 2007, equivalent to *** percent of apparent U.S.

consumption that year, and *** pounds in 2008, equivalent to *** percent of apparent U.S. consumption

that year.338 They reported excess capacity of *** pounds in interim 2009, equivalent to *** percent of
 339 CR/PR at Tables IV-8, VII-4.

 340 CR/PR at Table VII-4.

 341 CR/PR at Table IV-3.

 342 We note that there is little evidence on the record of the preliminary phase of these investigations that

responding Chinese producers could shift from the production of other products to the production of MKP, given

that only one responding Chinese producer reported producing other products on the same equipment used to

produce subject phosphate salts. CR at VII-4; PR at VII-3. There also is little evidence on the record concerning the

likely effects of subject imports on domestic industry development and production efforts. We intend to investigate

these issues further in any final phase of these investigations. We also note that there are no dumping findings or

antidumping remedies on subject MKP in third-country markets. CR at VII-13-14; PR at VII-7. While we have

considered the nature of the subsidies, we do not find this factor conclusive for our analysis. See CR at I-6-7; PR at

I-4-5. 

 343 CR/PR at Table VII-4.

 344 CR/PR at Table VII-4. 

 345 CR/PR at Table VII-4.

 346 CR/PR at Table VII-4.

42

apparent U.S. consumption during the period, up from excess capacity of *** pounds in interim 2008,

equivalent to *** percent of apparent U.S. consumption.339 Responding Chinese producers project that

the magnitude of their excess capacity will increase further in the imminent future to *** pounds in full

year 2009 and *** pounds in 2010, as their rate of capacity utilization declines to *** percent in full year

2009 and *** percent in 2010.340 Chinese producers demonstrated the ability to use their excess capacity

to increase exports to the United States rapidly between the first and second halves of 2008, when subject

imports increased from *** pounds to *** pounds, or by *** percent.341 

Subject Chinese MKP producers not only possess the ability to increase exports to the United

States significantly in the imminent future, but also the incentive to do so given their low rate of capacity

utilization, as well as their dependence on exports during the period under examination and their tendency

to direct increasing percentages of these exports to the United States.342 Responding Chinese producers

reported that their exports to all markets as a share of production was *** percent in 2006, *** percent in

2007, and *** percent in 2008, and was *** percent in interim 2008 and *** percent in interim 2009.343

Their exports to all markets as a share of production is projected to remain at high levels -- *** percent in

full year 2009 and *** percent in 2010.344

Responding Chinese producers also reportedly increased their export orientation towards the

United States during the period under examination, with the share of their production exported to the

United States increasing from *** percent in 2006 to *** percent in 2008.345 The share of their

production exported to the United States in interim 2009 was *** percent, up from *** percent in interim

2008, and is projected to be *** percent in full year 2009 and *** percent in 2010, a level well above that

in 2006 and 2007.346

Consequently, we conclude that the volume of subject imports, which was significant during the

period under examination, is likely to increase substantially in the imminent future.
 347 In any final phase of the investigations, we intend to further explore the extent to which subject imports and

the domestic like product serve the same applications in the U.S. market.

 348 CR at V-6-7; PR at V-3-4.

 349 CR at V-6; PR at V-4.

 350 CR/PR at Table V-7.

 351 Although there were no confirmed lost sales or revenue allegations, one purchaser reported that it had *** 

CR at V-21; PR at V-12.

 352 CR/PR at Table V-2.

 353 CR at V-1; PR at V-1; CR/PR at Figure V-1. Due in part to the increasing cost of potassium hydroxide, raw

material costs as a share of the domestic industry’s cost of goods sold increased from *** percent over the 2006-

2008 period to *** percent in the first half of 2009. CR at V-1; PR at V-1.

 354 CR/PR at Table VI-2.

 355 CR/PR at Table VI-2.

43

b. Likely Price Effects of the Subject Imports

As noted above, the record indicates that there is a high degree of substitutability between subject

imports and the domestic like product.347

The Commission collected quarterly pricing data on one MKP product, product 2, which

accounted for *** percent of domestic producers’ U.S. shipments of MKP and *** percent of U.S.

imports of MKP from January 2006 to June 2009.348 Pricing data were reported by one domestic

producer and 12 importers.349 These data indicate that subject imports undersold the domestic like

product throughout the period under examination, at extremely high margins.

Overall, subject imports undersold the domestic like product in all 14 quarterly comparisons at

margins ranging from 36.2 percent to 72.6 percent and averaging *** percent.350 Given the frequency of

underselling and the wide margins at which underselling occurred, we find subject import underselling to

be significant.351

Although we find no evidence of price depression, as the price of domestic producer shipments of

product 2 increased from $*** per pound in the first quarter of 2006 to $*** per pound in the second

quarter of 2009, we do find some evidence of price suppression.352 The cost of potassium hydroxide,

however, a major raw material input in the production of MKP, increased significantly in 2008 and

2009.353 Because domestic producers were unable to increase their prices sufficiently to cover the

increased cost of raw materials, the domestic industry’s ratio of cost of goods sold to net sales increased

between 2006 and 2008, from *** percent in 2006 to *** percent in 2007 and *** percent in 2008.354

This ratio was *** percent in interim 2009, which was down from *** percent in interim 2008 but still

*** percentage points higher than that in 2006.355 

We further find that subject imports 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,

in the imminent future. As detailed above, MKP produced in China and the United States is highly

substitutable. Accordingly, the frequency and large magnitude of subject import underselling during the

period under examination, coupled with the likelihood of significantly increased subject import volume,

makes it likely that subject imports will depress or suppress domestic prices in the imminent future. We

find further support for this finding from the fact that the increase in the price of potassium hydroxide that
 356 See CR/PR at Figure V-1; Table VI-1.

 357 Commerce initiated an antidumping duty investigation on certain phosphate salts based on estimated dumping

margins ranging from 33.7 percent to 177.4 percent. 74 Fed. Reg. at 54026. 

 358 CR/PR at Table III-3.

 359 CR/PR at Table III-3.

 360 CR/PR at Table III-3.

 361 CR/PR at Table III-3.

 362 CR/PR at Table III-3.

 363 CR/PR at Table III-19.

 364 CR/PR at Table III-19.

 365 CR/PR at Table III-19.

44

began in 2007 continued through the end of the period examined, indicating a likelihood that the price of

potassium hydroxide will remain high in the imminent future.356 

Thus, we conclude that subject import underselling will likely continue, creating further demand

for subject imports in the U.S. market and likely depressing and suppressing domestic prices to a

significant degree.

c. Likely Impact of the Subject Imports on the Domestic Industry357

The domestic industry suffered a significant decline in operating income between 2006 and 2008,

and, according to most measures, its performance deteriorated markedly in interim 2009 as compared to

interim 2008. The domestic industry’s capacity increased by *** percent between 2006 and 2008, from

*** pounds in 2006 to *** pounds in 2007 and *** pounds in 2008, but was *** percent lower in interim

2009, at *** pounds, than in interim 2008, at *** pounds.358 Its production increased by *** percent

between 2006 and 2007, from *** pounds to *** pounds, but declined to *** pounds in 2008, a level still

*** percent higher than that in 2006.359 This downward trend in domestic industry production ***

between the interim periods, with domestic industry production *** percent lower in interim 2009, at ***

pounds, than in interim 2008, at *** pounds.360 

The domestic industry’s rate of capacity utilization reflects these trends, increasing from ***

percent in 2006 to *** percent in 2007, but declining to *** percent in 2008, due to the *** percent

increase in domestic industry capacity but also to the *** percent decline in domestic industry production

during the period.361 The domestic industry’s rate of capacity utilization was only *** percent in interim

2009, down from *** percent in interim 2008, due to the fact that domestic industry production was ***

percent lower in interim 2009 as compared to interim 2008.362

Domestic industry employment and hours worked increased between 2006 and 2008, but were

significantly lower in interim 2009 than in interim 2008. Domestic industry employment increased from

*** PRWs in 2006 to *** PRWs in 2007 and *** PRWs in 2008, but was *** PRWs in interim 2009,

down from *** PRWs in interim 2008.363 Hours worked increased from *** hours in 2006 to *** hours

in 2007 and *** hours in 2008, but were *** hours in interim 2009, down from *** hours in interim

2008.364 The domestic industry’s productivity in pounds produced per hour increased from *** in 2006 to

*** in 2007 but declined to *** in 2008, and was *** in interim 2009, down from *** in interim 2008.365
 366 CR/PR at Table VI-2.

 367 CR/PR at Table VI-2.

 368 CR/PR at Table IV-8.

 369 CR/PR at Table IV-8.

 370 CR/PR at Table IV-12.

 371 CR/PR at Table IV-12.

 372 CR/PR at Table VI-2.

 373 CR/PR at Table VI-2.

 374 CR/PR at Table VI-2.

 375 CR/PR at Table VI-2.

 376 CR/PR at Table VI-9.

 377 CR/PR at Table VI-9.

45

The domestic industry’s net sales volume increased from *** in 2006 to *** pounds in 2007 and

*** pounds in 2008, a level *** percent higher than that in 2006.366 Its net sales volume declined

significantly between the interim periods, however, and was *** percent lower in interim 2009, at ***

pounds, than in interim 2008, at *** pounds.367 

The domestic industry’s U.S. shipments followed a similar trend, increasing from *** pounds in

2006 to *** pounds in 2007 and *** pounds in 2008, a level *** percent higher than that in 2006.368 Its

U.S. shipments were *** percent lower in interim 2009, at *** pounds, than in interim 2008, at ***

pounds.369 The domestic industry’s share of apparent U.S. consumption increased from *** percent in

2006 to *** percent in 2007, but declined to *** percent in 2008, a level still *** higher than that in

2006.370 It was only *** percent in interim 2009, however, down *** from *** percent in interim

2008.371

The average unit value of domestic industry shipments increased, as domestic producers were

able to pass at least a portion of their higher costs on to purchasers. The domestic industry’s net sales

revenues increased at a greater rate than its net sales volume between 2006 and 2008, and were higher in

interim 2009 than in interim 2008 notwithstanding that sales volumes were lower. The domestic

industry’s net sales value increased by *** percent between 2006 and 2008, from $*** in 2006 to $*** in

2007 and $*** in 2008.372 The domestic industry’s net sales value was *** percent lower in interim

2009, at $***, than in interim 2008, at $***.373 The domestic industry’s operating income declined from

$*** in 2006, or *** percent of net sales, to $*** in 2007, or *** percent of net sales, but increased to

$*** in 2008, or *** percent of net sales.374 Its operating income was $***, or *** percent of net sales,

in interim 2009, up from $***, or *** percent of net sales, in interim 2008.375 

The domestic industry’s capital expenditures increased from $*** in 2006 to $*** in 2007, but

declined to $*** in 2008, a level *** percent lower than that in 2006.376 Capital expenditures were ***

percent lower in interim 2009, at $***, than in interim 2008, when they were $***. The domestic

industry’s research and development expenditures increased *** percent between 2006 and 2008, from

$*** to $***, but were *** percent lower in interim 2009, at $***, than in interim 2008, at $***.377 

We do not find the domestic industry to be vulnerable to material injury based on the domestic

industry performance data available on the record of the preliminary phase of these investigations. The

domestic industry experienced a significantly higher operating income margin in the first half of 2009

than in the first half of 2008, and employment was higher in interim 2009 than it had been in 2006. We

note, however, that the significant deterioration in several key indices of domestic industry performance
 378 See section IV.B.2., supra.

 379 See CR/PR at Table IV-12. U.S. shipments of nonsubject imports increased from *** pounds in 2006, or ***

percent of apparent U.S. consumption, to *** pounds in 2007, or *** percent of apparent U.S. consumption, but

declined to *** pounds in 2008, or *** percent of apparent U.S. consumption, a level still *** percent above that in

2006. CR/PR at Tables IV-8, 12. U.S. shipments of nonsubject imports were *** pounds in interim 2009, or ***

percent of apparent U.S. consumption, down from *** pounds in interim 2008, or *** percent of apparent U.S.

consumption. Id.

 380 See CR at II-25; PR at II-15; CR/PR at Tables II-7, 8.

 381 See CR/PR at Table IV-12.

 382 CR/PR at Table IV-12.

 383 See CR at D-3; PR at D-3; CR/PR at Figure D-1. The average unit value of U.S. shipments of nonsubject

imports was higher than the average unit value of U.S. shipments of subject imports throughout most of the period

under examination, with the exception of interim 2008. CR/PR at Table C-1. We recognize that average unit value

comparisons may be influenced by product mix issues. 

46

between the interim periods, including capacity, production, capacity utilization, employment, hours

worked, net sales quantity, and U.S. shipments, resulted directly from the significant increase in subject

import market share at the domestic industry’s expense. 

We find a reasonable indication that the domestic industry is threatened with imminent material

injury by reason of subject imports. The record of these preliminary phase investigations indicates that

current adverse trends observed during the latter portion of the period under examination will likely

continue. During the period under examination, subject import volume increased significantly in absolute

terms and relative to apparent U.S. consumption and domestic production, capturing *** percentage

points of market share from the domestic industry between the interim periods even after resolution of the

phosphoric acid and potassium hydroxide supply shortages that had constrained domestic MKP

production in 2008.378 Subject import underselling was pervasive, and there was some evidence of price

suppression. In the imminent future, the subject foreign producers’ substantial excess capacity and export

orientation make it likely that subject import volume and market share will continue to increase at a

significant rate. The frequency and magnitude of subject import underselling, coupled with the high

degree of substitutability of subject imports and the domestic like product and the importance of price to

purchasers, make it likely that significant subject import underselling will continue, increasing demand

for subject imports and depressing or suppressing domestic prices. Although we do not find the domestic

industry vulnerable to material injury, we do find that the likely increase in subject import volume,

coupled with their likely adverse price effects, would likely worsen the domestic industry’s already

precarious condition, inflicting material injury on the domestic industry in the imminent future. 

We have considered the extent to which any threat of imminent material injury to the domestic

industry is attributable to nonsubject imports. We are mindful that nonsubject imports maintained a

significant presence in the U.S. market throughout the period under examination, satisfying between ***

percent and *** percent of apparent U.S. consumption during the period.379 Moreover, the record

indicates that there is a high degree of substitutability between subject imports and the domestic like

product, on the one hand, and nonsubject imports, on the other.380 Nonetheless, nonsubject imports lost

market share to subject imports throughout the period under examination, and therefore could not have

adversely affected domestic industry market share.381 When the domestic industry lost *** percentage

points of market share to subject imports in interim 2009 as compared to interim 2008, nonsubject

imports lost *** percentage points of market share to subject imports.382 

In addition, nonsubject imports were generally priced higher than subject imports and did not

undersell the domestic like product to the same extent. Nonsubject imports were priced higher than

subject imports in 59 of 65 possible comparisons, or 90.8 percent of the time.383 Nonsubject imports were
 384 Compare CR/PR at D-3 with CR/PR at Table V-7. 

 385 Little information on the capacity and export orientation of MKP producers in nonsubject countries is

available on the record of the preliminary phase of these investigations. See CR at VII-14-16; PR at VII-7-8. We

plan to investigate further the role of nonsubject imports in the U.S. market in any final phase of these investigations. 

Further, we note that demand trends could not account for any threat of material injury to the domestic industry

because apparent U.S. consumption of MKP increased *** percent between 2006 and 2008. CR/PR at Table IV-8. 

While apparent U.S. consumption was *** percent lower in interim 2009 as compared to interim 2008, the

reductions in domestic industry production, shipments, and employment between the interim periods were far

greater. Id. MKP demand is expected to grow modestly in the imminent future with respect to applications such as

paints and coatings, food and beverages, and fertilizers, as discussed in section IV.B.1. above. See also CR at II-22;

PR at II-12-13.

 386 Commissioner Lane does not join this section of the opinion. See her separate views.

 387 CR/PR at Table IV-5.

 388 CR/PR at Table IV-5.

 389 Subject import shipments in the U.S. market increased *** percent between 2006 and 2007, from *** pounds

to *** pounds, but *** at *** pounds between 2007 and 2008. Subject import shipments were *** percent lower in

January-June 2009, at *** pounds, than in January-June 2008, when they were *** pounds. CR/PR at Table IV-10.

 390 CR/PR at Table IV-14.

47

priced lower than the domestic like product in only 21 of 65 comparisons, or 32.3 percent of the time,

whereas subject imports undersold the domestic like product in all 14 of 14 comparisons.384 Thus, any

threat of material injury we have found from subject imports cannot be attributed to nonsubject imports.385

In sum, the record indicates that there is a causal nexus between subject imports and the threat of

material injury to the domestic industry. We find that the likely significant increase in subject import

volume and market share, and their likely significant adverse price effects, will imminently cause material

injury to the domestic industry. Accordingly, based on the record in the preliminary phase of these

investigations, we conclude that there is a reasonable indication that the domestic industry producing

MKP is threatened with material injury by reason of subject imports from China.

F. Tetrapotassium Pyrophosphate (“TKPP”)

1. Reasonable Indication of Threat of Material Injury By Reason of Subject

Imports386

a. Likely Volume of Subject Imports

Subject import volume increased significantly during the period examined in absolute terms and

as a share of apparent U.S. consumption. Subject import volume increased by *** between 2006 and

2008, from *** pounds in 2006 to *** pounds in 2007 and then to *** pounds in 2008.387 Subject

import volume was *** in interim 2009, a level *** percent lower than that in interim 2008, when subject

import volume was *** pounds.388 389

Subject import shipments as a share of the volume of apparent U.S. consumption increased from

*** percent in 2006 to *** percent in 2007, to *** percent in 2008, and were *** percent in interim 2008

and *** percent in interim 2009.390 The gains in subject import market share from 2006 to 2008 and
 391 CR/PR at Table IV-5.

 392 Coverage of export data reported by Chinese producers relative to import data was only *** percent. CR at

VII-4, PR at VII-3. With such low coverage, we are mindful that the probative value of the data is limited. In any

final phase investigations, we intend to seek more complete coverage of export data from subject Chinese producers. 

 393 CR/PR at Table VII-6.

 394 CR/PR at Tables IV-10 & VII-6.

 395 CR/PR at Tables IV-10 & VII-6.

 396 CR/PR at Table VII-6.

 397 We note that there is little evidence on the record of the preliminary phase of these investigations that

responding Chinese producers could shift from the production of other products to the production of TKPP, given

that only one responding Chinese producer reported producing other products on the same equipment used to

produce subject phosphate salts. CR/PR at Table VII-6. There also is little evidence on the record concerning the

likely effects of subject imports on domestic industry development and production efforts. We intend to investigate

these issues further in any final phase of these investigations. We also note that there are no dumping findings or

antidumping remedies on subject TKPP in third-country markets. CR at VII-13-14, PR at VII-7. While we have

considered the nature of the subsidies, we do not find this factor conclusive for our analysis. CR at I-6 to I-7, PR at

I-4 to I-5. 

48

between the interim periods came entirely at the expense of the domestic industry, which also lost market

share to nonsubject imports.391 

Based on the preceding analysis, we find that subject import volume is significant, both in

absolute terms and relative to consumption in the United States, and that the increase in subject import

volume and market penetration was also significant. As explained below, we also find that this

significant rate of increase in the volume and market penetration of subject imports during the period

examined indicates a likelihood of substantially increased imports in the imminent future.

Reporting subject foreign producers in China operated at a low, albeit increasing, rate of capacity

utilization during the period examined, resulting in significant excess capacity, and possessed ample

excess capacity at the end of the period with which to continue increasing their exports of TKPP to the

U.S. market at a significant rate.392 These producers’ rate of capacity utilization rose from *** percent in

2006 to *** percent in 2008, and was higher in January-June 2009, at *** percent, than in January-June

2008, at *** percent.393 

Due to their persistently low rates of capacity utilization, responding subject Chinese producers

reported excess capacity of *** pounds in 2006, equivalent to *** percent of apparent U.S. consumption

that year, *** pounds in 2007, equivalent to *** percent of apparent U.S. consumption that year, and ***

pounds in 2008, equivalent to *** percent of apparent U.S. consumption that year.394 They reported

excess capacity of *** pounds in January-June 2009, equivalent to *** percent of apparent U.S.

consumption during the period, down from excess capacity of *** pounds in January-June 2008, which

was equivalent to *** percent of apparent U.S. consumption.395 Responding Chinese producers project

that the magnitude of their excess capacity will remain at similarly high levels in the imminent future, at

*** pounds in full years 2009 and 2010, as their rate of capacity utilization remains a low *** percent in

full year 2009 and *** percent in 2010.396

Subject foreign producers in China have the capability to increase their exports to the United

States in the imminent future by drawing from substantial end-of-period inventories held in the United

States and in China.397 Subject import inventories in the United States were substantial relative to

preceding-period shipments of imports throughout the period examined, and were *** pounds by the end

of June 2009, equivalent to *** percent of U.S. shipments of subject imports during the January-June
 398 CR/PR at Table VII-6.

 399 CR/PR at Table VII-6.

 400 CR/PR at Table VII-3.

 401 CR/PR at Table VII-6. 

 402 CR/PR at Table VII-6. 

 403 CR at V-6 to V-7, PR at V-3 to V-4.

 404 CR at V-6, PR at V-4.

 405 CR/PR at Table V-7. 

 406 CR/PR at Table V-7. 

 407 CR/PR at Table V-7.

 408 With respect to domestic TKPP producers, there were *** confirmed lost sales allegations and there was just

*** confirmed lost revenue allegation, totaling $***. CR at V-29, PR at V-12. 

49

period.398 The end-of-period inventories held by responding Chinese producers rose appreciably during

the latter part of the period, and were *** pounds in interim 2009, which was *** greater than the

responding producers’ U.S. exports for the period.399

Subject Chinese TKPP producers not only possess the ability to increase exports to the United

States significantly in the imminent future, but also the incentive to do so given their low rate of capacity

utilization as well as their dependence on exports. Responding Chinese producers reported that exports to

all markets as a share of total shipments was *** percent in 2006, *** percent in 2007, *** percent in

2008, *** percent in January-June 2008, and *** percent in January-June 2009.400 This ratio is projected

to remain a relatively high *** percent in full year 2009 and *** percent in 2010.401 The responding

producers directed a much higher proportion of shipments to the United States in interim 2009 than

interim 2008.402 

Consequently, we conclude that the volume of subject imports, which was significant during the

period examined, is likely to increase substantially in the imminent future.

b. Likely Price Effects of the Subject Imports

As noted above, the record indicates that there is a high degree of interchangeability between

subject imports and the domestic like product. 

The Commission collected quarterly pricing data on two TKPP products, product 5 (food-grade

TKPP), and product 6 (technical-grade TKPP) which collectively accounted for *** percent of domestic

producers’ U.S. shipments of TKPP and *** percent of U.S. imports of TKPP from January 2006 to June

2009.403 Pricing data were reported by three domestic producers and 13 importers.404 These data indicate

that subject imports generally undersold the domestic like product throughout the period examined.

Collectively, for pricing products 5 and 6, subject imports undersold the domestic like product in

10 of 16 quarterly comparisons, or 62.5 percent of the time.405 With respect to product 5 (food-grade

TKPP), subject imports undersold the domestic like product in 1 of 2 quarterly price comparisons at an

underselling margin of *** percent.406 With respect to product 6 (technical-grade TKPP), the product

with the *** greater quantity of shipments, subject imports undersold the domestic like product in 9 of 14

comparisons, with margins ranging from 0.6 percent to 14.1 percent and averaging *** percent.407 Given

the frequency of underselling, we find subject import underselling to be significant.408
 409 CR/PR at Tables V-5 & V-6. 

 410 CR/PR at Tables V-5 & V-6.

 411 CR at VI-11, PR at VI-3; CR/PR at Figure V-1. Due in part to the increasing cost of potassium hydroxide,

raw material costs as a share of the domestic industry’s cost of goods sold increased from *** percent over the 2006-

2008 period to *** percent in the first half of 2009. CR/PR at V-1.

 412 CR/PR at Table VI-4. The industry’s ratio of COGS to net sales increased from *** percent in 2006 to ***

percent in 2007, but then dropped to *** percent in 2008. CR/PR at Table VI-4. 

 413 See CR/PR at Figure V-1, Table VI-1.

 414 Commerce initiated an antidumping duty investigation on certain phosphate salts based on estimated dumping

margins ranging from 33.7 percent to 177.4 percent. 74 Fed. Reg. at 54026. 

 415 CR/PR at Table III-5.

 416 CR/PR at Table III-5.

50

We find no evidence of price depression, as the price of domestic producer shipments of product

5 increased from $*** per pound in the first quarter of 2006 to $*** per pound in the second quarter of

2009, and as the price of domestic producer shipments of product 6 increased from $*** per pound in the

first quarter of 2006 to $*** per pound in the second quarter of 2009.409 Nevertheless, we do find some

evidence of price suppression.410 The cost of potassium hydroxide, a major raw material input in the

production of TKPP, increased significantly in 2008 and 2009.411 Because domestic producers were

unable to increase their prices sufficiently to cover the increased cost of raw materials, the domestic

industry’s ratio of cost of goods sold to net sales was *** percent in January-June 2009, up from ***

percent in January-June 2008.412 

We further find that subject imports 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,

in the imminent future. As detailed above, TKPP produced in China and the United States is highly

substitutable. Accordingly, the frequency of subject import underselling during the period examined,

coupled with the likelihood of significantly increased subject import volume, makes it likely that subject

imports will depress or suppress domestic prices in the imminent future. We find further support for this

finding in evidence that the price of potassium hydroxide and the domestic industry’s ratio of cost of

goods sold to net sales both reached their highest level of the period examined in the first half of 2009.413 

Thus, we conclude that subject import underselling will likely continue, creating further demand

for subject imports in the U.S. market and likely depressing or suppressing domestic prices to a

significant degree.

c. Likely Impact of the Subject Imports on the Domestic Industry414

The domestic industry performed poorly according to several measures between 2006 and 2008,

although it performed well by other measures. The industry’s performance deteriorated markedly in

interim 2009 as compared to interim 2008. 

The domestic industry’s capacity decreased by *** percent between 2006 and 2008, from ***

pounds in 2006 to *** pounds in 2008, and was *** percent lower in interim 2009, at *** pounds, than in

interim 2008, at *** pounds.415 The domestic industry’s production declined *** percent between 2006

and 2008, falling from *** pounds in 2006 to *** pounds in 2008.416 The downward trend in domestic
 417 CR/PR at Table III-5.

 418 The domestic industry’s capacity utilization fell from *** percent in 2006 to *** percent in 2007, and

increased to *** percent in 2008. CR/PR at Table III-5. 

 419 CR/PR at Table III-5. 

 420 CR/PR at Table III-5.

 421 CR/PR at Table VI-4.

 422 CR/PR at Table VI-4.

 423 CR/PR at Table IV-10.

 424 CR/PR at Table IV-10.

 425 CR/PR at Table IV-14.

 426 CR/PR at Table IV-14.

 427 CR/PR at Table III-21.

 428 CR/PR at Table III-21.

 429 CR/PR at Table III-21.

51

industry production *** between the interim periods, with domestic industry production *** percent

lower in interim 2009, at *** pounds, than in interim 2008, at *** pounds.417 

The domestic industry’s declining rate of capacity utilization reflects similar trends. Although

the domestic industry’s capacity utilization increased, ***, between 2006 and 2008,418 the domestic

industry’s capacity utilization was *** percent lower in interim 2009 than in interim 2008.419 The

domestic industry’s capacity utilization was only *** percent in interim 2009, down from *** percent in

interim 2008, due largely to the fact that production was *** lower in interim 2009 as compared to

interim 2008.420

The domestic industry’s net sales volume increased from *** pounds in 2006 to *** pounds in

2007, but declined to *** pounds in 2008, a level *** percent lower than that in 2006.421 Its net sales

volume was *** percent lower in interim 2009, at *** pounds, than in interim 2008, at *** pounds.422 

The domestic industry’s U.S. shipments followed a similar trend, increasing from *** pounds in

2006 to *** pounds in 2007 before declining to *** pounds in 2008, a level *** percent lower than that

in 2006.423 The domestic industry’s U.S. shipments were *** percent lower in interim 2009, at ***

pounds, than in interim 2008, at *** pounds.424 The domestic industry’s share of apparent U.S.

consumption declined throughout the period examined, falling from *** percent in 2006 to *** percent in

2007 to *** percent in 2008.425 It was *** percent in interim 2009, down from *** percent in interim

2008.426

Domestic industry employment and hours worked decreased irregularly during the period

examined. Domestic industry employment increased from *** production and related workers (“PRWs”)

in 2006 to *** PRWs in 2007, and dropped to *** PRWs in 2008, and was *** PRWs in interim 2009,

down from *** PRWs in interim 2008.427 Hours worked decreased irregularly during the period,

increasing from *** hours in 2006 to *** hours in 2007, and dropping to *** hours in 2008, and were

*** hours in interim 2009, down from *** hours in interim 2008.428 Although the domestic industry’s

productivity in pounds produced per hour increased *** from 2006 until 2008, it was *** pounds per

hour in interim 2009, down from *** pounds per hour in interim 2008.429

The average unit value of domestic industry shipments increased, as domestic producers were

able to pass at least a portion of their higher costs on to purchasers. The domestic industry’s net sales
 430 CR/PR at Table VI-4.

 431 CR/PR at Table VI-4.

 432 CR/PR at Table VI-4.

 433 CR/PR at Table VI-4.

 434 CR/PR at Table VI-9.

 435 CR/PR at Table VI-9.

 436 CR/PR at Table VI-9.

 437 CR at II-25, PR at II-15; CR/PR at Tables II-7 & II-8.

52

revenues increased even as its net sales volume declined between 2006 and 2008, and sales revenues

declined at a smaller rate than sales volumes between the interim periods. The domestic industry’s net

sales value increased *** percent between 2006 and 2008, from $*** in 2006 to $*** in 2007 and $***

in 2008.430 The domestic industry’s net sales value was *** percent lower in interim 2009, at $***, than

in interim 2008, at $***.431 The domestic industry’s operating income declined from $*** in 2006, or

*** percent of net sales, to $*** in 2007, or *** percent of net sales, but increased to $*** in 2008, or

*** percent of net sales.432 Its operating income was $*** in interim 2009, or *** percent of net sales,

down from $*** in interim 2008, or *** percent of net sales.433

The domestic industry’s capital expenditures increased from $*** in 2006 to $*** in 2007, but

declined to $*** in 2008, a level *** percent lower than that in 2006.434 They were *** percent higher in

January-June 2009, at $***, as compared to January-June 2008, at $***.435 The domestic industry’s

research and development expenditures increased between 2006 and 2008, from $*** to $***, but were

*** percent lower in January-June 2009, at $*** than in January-June 2008, at $***.436 

We find a reasonable indication that the domestic industry is threatened with imminent material

injury by reason of subject imports. The record in the preliminary phase of these investigations indicates

that current adverse trends will likely continue. During the period examined, subject import volume

increased significantly in absolute terms and relative to apparent U.S. consumption and domestic

production. Subject import underselling was pervasive, and there was some evidence of price

suppression. In light of the domestic industry’s declines in performance, and poor operating performance

in interim 2009, we find the domestic industry to be in a vulnerable condition. 

The available data concerning subject foreign producers’ substantial excess capacity and export

orientation supports a conclusion that subject import volume and market share will likely continue to

increase at a significant rate in the imminent future. The frequency of subject import underselling,

coupled with the high degree of substitutability of subject imports and the domestic like product and the

importance of price to purchasers, make it likely that significant subject import underselling will continue,

increasing demand for subject imports and depressing or suppressing domestic prices. We find that the

likely increase in subject import volume, coupled with their likely adverse price effects, would likely

worsen the domestic industry’s *** condition, inflicting material injury on the domestic industry in the

imminent future. 

We have considered the role of nonsubject imports in the U.S. market and considered the extent

to which any threat of imminent material injury to the domestic industry is attributable to nonsubject

imports. As an initial matter, the record indicates that there is a high degree of substitutability between

subject imports and the domestic like product, on the one hand, and nonsubject imports, on the other.437 

Nonsubject imports maintained a presence in the U.S. market throughout the period examined, but
 438 CR/PR at Table IV-14. 

 439 CR/PR at Table IV-14.

 440 CR/PR at Table IV-14.

 441 CR/PR at D-3.

 442 Compare CR/PR at D-3 with CR/PR at Table V-7. 

 443 No information on the capacity and export orientation of TKPP producers in nonsubject countries is available

on the record of the preliminary phase of this investigation. CR at VII-14 to VII-16, PR at VII-7 to VII-8. We plan

to investigate further the role of nonsubject imports in the U.S. market in any final phase of this investigation.

 444 CR/PR at Table C-4. We will seek to obtain further information in any final phase investigations about the

reasons for the apparent recent declines in U.S. demand for TKPP. 

53

satisfied a much smaller share of apparent U.S. consumption than the domestic like product or subject

imports, ranging from *** percent to *** percent of apparent U.S. consumption during the period.438 

Moreover, subject imports captured significantly more market share from the domestic industry

than nonsubject imports. Between 2006 and 2008, subject imports captured *** percentage points of

market share from the domestic industry, whereas nonsubject imports captured only *** percentage

points.439 Of the *** percentage point reduction in domestic industry market share in interim 2009 as

compared to interim 2008, subject imports captured *** percentage points and nonsubject imports only

*** percentage points.440 

Moreover, nonsubject imports were generally priced higher than subject imports and did not

undersell the domestic like product to the same extent. Nonsubject imports were priced higher than

subject imports in 28 of 34 possible comparisons, or 82.4 percent of the time.441 Nonsubject imports were

priced lower than the domestic like product in 30 of 54 comparisons, or 55.6 percent of the time, whereas

subject imports undersold the domestic like product in 10 of 16 comparisons, or 62.5 percent of the

time.442 Thus, any threat of material injury we have found from subject imports cannot be attributed to

nonsubject imports.443 

We considered the effects of the raw material shortages in 2008 on domestic TKPP producers and

conclude that we cannot attribute poor industry performance to this factor. Although the domestic

industry’s production, shipments, and sales quantities did decline in 2008, its profitability increased that

year. We observe that the declines in output and shipments accelerated in interim 2009 after the raw

material shortages were resolved.

Finally, we observe that the fact that apparent U.S. consumption for TKPP was substantially

lower in interim 2009 than interim 2008 cannot fully explain the poor domestic industry performance

during that period. The reductions in the domestic industry’s production, shipments, and sales quantities

from interim 2008 to interim 2009 were all greater than the reduction in apparent consumption.444

In sum, the record indicates that there is a causal nexus between subject imports and the threat of

material injury to the domestic industry. We conclude that the likely significant increase in subject

import volume and market share, and the likely significant adverse price effects resulting therefrom, will

imminently cause material injury to the domestic industry. Accordingly, based on the record in the

preliminary phase of these investigations, we find that there is a reasonable indication that the domestic

industry producing TKPP is threatened with material injury by reason of subject imports from China.
 445 Commissioners Lane, Williamson, and Pinkert find that there is a reasonable indication that an industry in the

United States is materially injured by reason of subject imports of MKP from China that are allegedly sold at less

than fair value, and Chairman Aranoff, Vice Chairman Pearson, and Commissioner Okun find that there is a

reasonable indication that in industry in the United States is threatened with material injury by reason of subject

imports of MKP from China that are allegedly subsidized and sold at less than fair value. 

 446 Commissioner Lane finds that there is a reasonable indication that an industry in the United States is

materially injured by reason of subject imports of TKPP that are allegedly subsidized and sold at less than fair value. 

See her separate views. 

54

V. CONCLUSION

For the above reasons, based on the record in the preliminary phase of these investigations, we

find that there is no reasonable indication that an industry in the United States is materially injured or

threatened with material injury by reason of subject imports of STPP from China that are allegedly sold at

less than fair value and subsidized by the Government of China. We also find that there is a reasonable

indication that an industry in the United States is materially injured or threatened with material injury by

reason of imports of MKP from China that are allegedly sold at less than fair value and subsidized by the

Government of China.445 We also find that there is a reasonable indication that an industry in the United

States is threatened with material injury by reason of subject imports of DKP and TKPP from China that

are allegedly sold at less than fair value and subsidized by the Government of China.446 
 1

 CR/PR at Table IV-5.

 2 CR/PR at Table IV-10.

 3 Apparent U.S. consumption, measured by quantity, rose from *** pounds in 2006 to *** pounds in 2007, then

fell to *** pounds in 2008. It was *** pounds in interim 2008 and *** pounds in interim 2009. CR/PR at Table IV10.

 4 CR/PR at Table IV-14.

 5 CR/PR at Table IV-18.

 6 See CR/PR at Table II-7; Tr. at 52-53.

55

SEPARATE VIEWS OF COMMISSIONER CHARLOTTE R. LANE

REGARDING TKPP

I concur with my colleagues with respect to the applicable conditions of competition pertaining to

the analysis as to whether there is a reasonable indication of material injury or threat of material injury by

reason of subject imports of Tetrapotassium Pyrophosphate (“TKPP”). However, while my colleagues

find a reasonable indication of threat of material injury, I find that the record supports a finding that there

is a reasonable indication of material injury by reason of subject imports of TKPP from China. 

1. Volume of Subject Imports

Subject import volume increased significantly during the full-year period of investigation in

absolute terms and as a share of both apparent U.S. consumption and domestic production. Subject

import volume increased by *** percent between 2006 and 2008, from *** pounds in 2006 to *** pounds

in 2007 and to *** pounds in 2008. Subject import volume was *** pounds in interim 2008 and ***

pounds in interim 2009.1

 

Subject import shipments in the U.S. market followed the same trend. These shipments increased

by *** percent between 2006 and 2008, from *** pounds in 2006 to *** pounds in 2007 and remained

steady at *** pounds in 2008. Subject import shipments were *** pounds in interim 2008 and ***

pounds in interim 2009.2

While apparent U.S. consumption declined between 2006 and 2008, and into 2009,3

 subject

import shipments as a share of apparent U.S. consumption, measured by quantity, increased significantly. 

Specifically, the market shares of TKPP from China rose from *** percent in 2006 to *** percent in

2007, and then to *** percent in 2008. They were *** percent in interim 2008 and *** percent in interim

2009.4

 The ratio of subject imports to domestic production also increased significantly over the entire

period: from *** percent in 2006 to *** percent in 2007, then to *** percent in 2008, and was ***

percent in interim 2008 and *** percent in interim 2009.5

Based on the preceding analysis, I find that subject import volume is significant, both in absolute

terms and relative to consumption and production in the United States, and that the increase in subject

import volume and market penetration also was significant. 

2. Price Effects of the Subject Imports

The record indicates that there is a high degree of substitutability between subject imports and the

domestic like product and also that price is a significant factor in purchasing decisions.6

The Commission collected quarterly pricing data on two TKPP products (pricing products 5 and 

6), *** percent of domestic producers’ U.S. shipments of TKPP and *** percent of U.S. subject imports
 7

 CR at V-6 - V-7, PR at V-4.

 8 CR at V-6, PR at V-4.

 9 CR/PR at Table V-7.

 10 Domestic prices for product 5 rose from $*** per pound in January-March 2006 to $*** per pound in AprilJune 2009, and domestic prices for product 6 increased from $*** per pound in January-March 2006 to $*** per

pound in April-June 2009. CR/PR at Tables V-5 - V-6.

 11 CR at VI-11, PR at V-3; CR/PR at Figure V-1. Due in part to the increasing cost of potassium hydroxide, raw

material costs as a share of the domestic industry’s cost of goods sold increased from *** percent over the 2006-08

period to *** percent in the first half of 2009. CR/PR at V-1.

 12 CR/PR at Table VI-4.

 13 Commerce initiated the antidumping duty investigation based on estimated dumping margins for all scope

merchandise ranging from 33.7 percent to 177.4 percent. 74 Fed. Reg. at 54026. 

 14 CR/PR at Table VI-4.

 15 Apparent U.S. consumption rose from *** pounds in 2006 to *** pounds in 2007, then fell to *** pounds in

2008. It was *** pounds in interim 2008 and *** pounds in interim 2009. CR/PR at Table IV-14.

 16 CR/PR at Table III-5.

56

of TKPP from January 2006 to June 2009.7

 Pricing data were reported by three domestic producers and

13 importers.8

 Although the data for pricing product 5 are sparse, the data for both products indicate that

subject imports undersold the domestic like product throughout the period of investigation. Overall,

subject imports undersold the domestic like product in 10 of 16 quarterly comparisons, with margins

ranging from 0.6 percent to 14.1 percent.9

 I find this underselling to be significant.

Given that the U.S. producers’ prices for both TKPP products increased over the period of

investigation, I find no evidence of price depression.10 However, I do find that the record contains some

evidence of price suppression. The costs of phosphoric acid and potassium hydroxide, major raw material

inputs in the production of TKPP, increased significantly in 2008 and 2009.11 Domestic producers were

unable to increase their prices sufficiently to cover the increased cost of raw materials in at least part of

the period of investigation. The domestic industry’s ratio of cost of goods sold to net sales increased from

*** percent in 2006 to *** percent in 2007, then fell to *** percent in 2008. This ratio was *** percent

in interim 2008 as compared with *** percent in interim 2009.12

3. Impact of the Subject Imports on the Domestic Industry13

The domestic industry’s operating income *** between 2006 and 2007, although there was a ***

gain in 2008. Operating income fell from $*** in 2006 to $*** in 2007, and was $*** in 2008. This

gain was not sustained in 2009, however. While the industry had operating income of $*** in interim

2008, it sustained *** in interim 2009.14

Although apparent U.S. consumption decreased by *** percent between 2006 and 2008,15 the

domestic industry’s capacity fell even more: by *** percent during the same period. After capacity rose

from *** pounds in 2006 to *** pounds in 2007, it declined to *** pounds in 2008. It was *** pounds in

interim 2008 and *** pounds in interim 2009.16 The industry’s production decreased *** percent

between 2006 and 2008, from *** pounds in 2006 to *** pounds in 2007, then to *** pounds in 2008. 
 17 CR/PR at Table III-5.

 18 CR/PR at Table III-5.

 19 CR/PR at Table VI-4.

 20 CR/PR at Table IV-10.

 21 CR/PR at Table IV-10.

 22 CR/PR at Table III-21.

 23 CR/PR at Table III-21.

 24 CR/PR at Table VI-4.

 25 CR/PR at Table VI-12.

57

The reduction continued into 2009, as production was *** pounds in interim 2009 compared with ***

pounds in interim 2008.17

The domestic industry’s rate of capacity utilization fell from *** percent in 2006 to *** percent

in 2007, but rose to *** percent in 2008. It was *** lower in interim 2009 as compared with interim

2008, however: *** percent in interim 2008 and *** percent in interim 2009.18

The domestic industry’s net sales volume declined between 2006 and 2008, and into 2009. It was

*** pounds in 2006, rising *** to *** pounds in 2007, before falling to *** pounds in 2008. Its net sales

volume was *** lower – by *** percent – when comparing interim periods: it was *** pounds in interim

2008 as compared with *** pounds in interim 2009.19

The domestic industry’s U.S. shipments followed a similar trend, increasing *** from ***

pounds in 2006 to *** pounds in 2007, and then decreasing to *** pounds in 2008. U.S. shipments were

*** percent lower in interim 2009, at *** pounds, than in interim 2008, at *** pounds.20 The domestic

industry’s share of apparent U.S. consumption declined steadily over the period. It was *** percent in

2006, decreasing to *** percent in 2007, then decreasing further to *** percent in 2008. It was ***

percent in interim 2008 as compared with *** percent in interim 2009.21

 Domestic industry employment and hours worked fell between 2006 and 2008, and into 2009. 

The number of production and related workers increased from *** in 2006 to *** in 2007, then declined

to *** in 2008. It was *** in interim 2008 and *** in interim 2009. Hours worked followed a similar

trend: rising from *** hours in 2006 to *** hours in 2007, then falling to *** hours in 2008. They

totaled *** hours in interim 2008 and *** hours in interim 2009.22 The domestic industry’s productivity

in pounds produced per hour decreased from *** in 2006 to *** in 2007, then increased to *** in 2008,

but was *** in interim 2009, down from *** in interim 2008.23

The average unit value of domestic industry shipments increased over the period, reflecting the

higher costs the domestic producers faced. The average unit value of net sales was $*** in 2006 and

2007, then rose to $*** in 2008. It was $*** in interim 2008 and $*** in interim 2009. In order to cover

the increased costs, sales volumes were sacrificed throughout the period, however; as explained above. 

The domestic industry’s operating income margin *** between 2006 and 2007, declining from ***

percent of net sales to *** percent, then rising to *** percent in 2008. It was *** percent in interim 2008

as compared with *** percent in interim 2009.24 The trend in the domestic industry’s return on

investment was the same as the trend in its operating income margin, falling from *** percent in 2006 to

*** in 2007, then climbing to *** percent in 2008.25 

The domestic industry’s capital expenditures increased from $*** in 2006 to $*** in 2007, but

declined to $*** in 2008, a level *** percent lower than that in 2006. Capital expenditures were higher

in interim 2009 as compared with interim 2008, however: $*** as compared with $***. The domestic

industry’s research and development expenditures increased over the full-year period: from $*** in 2006
 26 CR/PR at Table VI-9.

 27 See CR/PR at Table IV-14.

 28 See section IV.B.2., supra.

 29 See CR at II-25, PR at II-15; CR/PR at Tables II-7, 8.

 30 See CR/PR at Table IV-14. U.S. shipments of nonsubject imports decreased from *** pounds in 2006 to ***

pounds in 2007, then increased to *** pounds in 2008. U.S. shipments of nonsubject imports were *** pounds in

interim 2008 and *** pounds in interim 2009. CR/PR at Table IV-10.

 31 CR/PR at Table IV-14.

 32 See CR at D-3, PR at D-3, CR/PR at Figure D-5.

 33 See CR at D-3, PR at D-3, CR/PR at Figure D-6.

58

to $*** in 2007, then to $*** in 2008. They were *** lower in interim 2009 as compared with interim

2008, however: $*** in interim 2008 and $*** in interim 2009.26 

I find a reasonable indication that the domestic industry is materially injured by reason of subject

imports. The industry experienced operating losses during the period, and many domestic industry

performance measures deteriorated significantly over the entire period, including capacity, production,

employment, hours worked, net sales quantity, and the quantity of U.S. shipments. This deterioration

resulted directly from the domestic industry’s loss of *** percentage points of market share between 2006

and 2008, and its loss of *** percentage points when comparing its market share in interim 2008 to its

market share in interim 2009. These losses were equivalent to *** percent and *** percent of the

domestic industry’s market share in 2006 and in interim 2008, respectively.27 It is noteworthy that subject

imports captured the largest portion of the domestic industry’s market share after resolution of the

phosphoric acid and potassium hydroxide supply shortages that had constrained domestic TKPP

production in 2008.28 Pervasive subject import underselling at significant margins have contributed to

this market share shift, given the high degree of substitutability between subject imports and the domestic

like product, as well as the importance of price to purchasing decisions.

I conclude that nonsubject imports do not sever the causal link between subject imports and the

material injury suffered by the domestic industry. As an initial matter, the record indicates that there is a

high degree of substitutability between subject imports and the domestic like product, on the one hand,

and nonsubject imports, on the other.29 However, nonsubject imports commanded a small market share

throughout the period of investigation, satisfying between *** percent and *** percent of apparent U.S.

consumption during the period.30 

While nonsubject imports gained market share throughout the period, these gains were small

relative to those of the subject imports. Moreover, while subject imports increased between 2006 and

2007, nonsubject imports declined. The domestic industry lost *** percentage points of market share to

subject imports during that period and nonsubject imports lost *** percentage points of market share to

subject imports.31 I find, therefore, that nonsubject imports could not have adversely affected domestic

industry market share.

Nonsubject imports also were generally priced higher than subject imports and did not undersell

the domestic like product to the same extent. Nonsubject food-grade imports were priced higher than

subject food-grade imports in 2 of 4 possible comparisons, or 50.0 percent of the time.32 Nonsubject

technical-grade imports were priced higher than the subject technical-grade imports in 26 of 30

comparisons, or 86.7 percent of the time.33
 34 No information on the capacity and export orientation of TKPP producers in nonsubject countries is available

on the record of the preliminary phase of these investigations. See CR at VII-14 - VII-16, PR at VII-7 - VII-8. I

plan to seek more information regarding the role of nonsubject imports in the U.S. market in any final phase of these

investigations.

 35 CR/PR at Table IV-10.

 36 CR/PR at Tables III-5, III-21, IV-10, VI-4.

59

Thus, any material injury I have found from subject imports cannot be attributed to nonsubject

imports.34 I also note that demand trends could not account for any material injury to the domestic

industry, as apparent U.S. consumption of TKPP declined *** percent between 2006 and 2008, while

U.S. shipments of TKPP from China increased by *** percent, resulting in an increase in market share of

*** percentage points, or *** percent, during that period.35 In addition, the reduction in the domestic

industry’s production, shipments, employment, hours worked, and quantity of net sales was greater than

the loss in demand between 2006 and 2008.36

In sum, the record indicates that there is a causal nexus between subject imports and the material

injury experienced by the domestic industry. Accordingly, based on the record in the preliminary phase

of these investigations, I conclude that there is a reasonable indication that the domestic industry

producing TKPP is materially injured by reason of subject imports from China.

 1

 Although the petition uses the term “industry” in the singular, its subsequent discussion of four domestic like

products suggests that multiple industries are at issue.

 2

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

merchandise subject to these investigations.

 3 Federal Register notices cited in the tabulation are presented in app. A.

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 ICL

Performance Products LP (“ICL”), St. Louis, MO, and Prayon, Inc. (“Prayon”), Augusta, GA, on

September 24, 2009, alleging that an industry1

 in the United States is materially injured and threatened

with material injury by reason of subsidized and less-than-fair-value (“LTFV”) imports of certain sodium

and potassium phosphate salts from China. The specific products at issue in this proceeding are

anhydrous Dipotassium Phosphate (“DKP”); anhydrous Monopotassium Phosphate (“MKP”), Sodium

Tripolyphosphate (“STPP”), and Tetrapotassium Pyrophosphate (“TKPP”).2

 Information relating to the

background of the investigations is provided below.3

Effective date Action

September 24, 2009 Petition filed with Commerce and the Commission; institution of Commission’s

investigations (74 FR 50817, October 1, 2009)

October 15, 2009 Commission’s conference1

October 21, 2009 Commerce’s notice of AD initiation (74 FR 54024)

October 23, 2009 Commerce’s notice of CVD initiation (74 FR 54778)

November 6, 2009 Commission’s vote

November 9, 2009 Commission’s determination transmitted to Commerce

November 17, 2009 Commission’s views transmitted to Commerce

 1 A list of witnesses appearing at the conference is presented in app. B.

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.
I-2

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

In evaluating the volume of imports of merchandise, the Commission

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

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

or consumption in the United States is significant.

. . .

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

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

price underselling by the imported merchandise as compared with the

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

imports of such merchandise otherwise depresses prices to a significant

degree or prevents price increases, which otherwise would have

occurred, to a significant degree.

. . .

In examining the impact required to be considered under subparagraph

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

business cycle and conditions of competition that are distinctive to the

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

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

. . . 

(I) actual and potential declines in output, sales, market share, profits,

productivity, return on investments, and utilization of capacity, (II)

factors affecting domestic prices, (III) actual and potential negative

effects on cash flow, inventories, employment, wages, growth, ability to

raise capital, and investment, (IV) actual and potential negative effects

on the existing development and production efforts of the domestic

industry, including efforts to develop a derivative or more advanced

version of the domestic like product, and (V) in {an antidumping

investigation}, the magnitude of the margin of dumping.

Organization of the Report

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

dumping margins, and domestic like product. Part II of this report presents information on conditions of

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

U.S. industry, including data on capacity, production, shipments, inventories, and employment. Parts IV

and V present the volume and pricing of imports of the subject merchandise, respectively. Part VI

presents information on the financial experience of U.S. producers. Part VII presents the statutory

requirements and information obtained for use in the Commission’s consideration of the question of threat

of material injury as well as information regarding nonsubject countries.

U.S. MARKET SUMMARY

“Certain” phosphate salts consist of one sodium phosphate (STPP, one of seven major industrial

sodium phosphates produced in the United States) and three potassium phosphates (DKP, MKP, and
 4

 ***.

I-3

TKPP, three of six major industrial potassium phosphates produced in the United States).4

 These

chemicals are used in a variety of applications, including detergents and other cleaning applications;

fertilizers; food and feed additives; and water treatment. The leading firms manufacturing and selling

domestically produced phosphate salts are ICL, Prayon, Innophos, Inc. (“Innophos”), and PCS Purified

Phosphates (“PCS”), while leading producers of phosphate salts outside the United States include Hubei

Xingfa Chemical Group Co., Ltd. (“Xingfa”), SD BNI (CN) Co., Ltd. (“SD BNI”)., Ltd, and Mianyang

Aostar Phosphorous Chemical of China (“Aostar”). The leading U.S. importers of phosphate salts from

China are ***. Leading importers of phosphate salts from nonsubject countries (primarily Mexico,

Canada, and Israel) include ***. The majority of U.S. purchasers of *** are distributors, while the

majority of U.S. purchasers of *** are end users. Leading purchasers include national distributors

Brenntag North America, Inc., and Univar as well as ***. 

DKP

Apparent U.S. consumption of DKP totaled approximately *** pounds ($***) in 2008. 

Currently, one firm, ICL, is known to produce DKP in the United States. The U.S. producer’s U.S.

shipments of DKP totaled *** pounds ($***) and accounted for *** percent of apparent U.S.

consumption by quantity and *** percent by value in 2008. U.S. shipments of imports of DKP from

China totaled *** pounds ($***) in 2008 and accounted for *** percent of apparent U.S. consumption by

quantity and *** percent by value. U.S. shipments of imports from nonsubject sources totaled ***

pounds ($***) in 2008 and accounted for *** percent of apparent U.S. consumption by quantity and

*** percent by value.

MKP

Apparent U.S. consumption of MKP totaled approximately *** pounds ($***) in 2008. 

Currently, one firm, ICL, is known to produce MKP in the United States. The U.S. producer’s U.S.

shipments of MKP totaled *** pounds ($***) and accounted for *** percent of apparent U.S.

consumption by quantity and *** percent by value in 2008. U.S. shipments of imports of MKP from

China totaled *** pounds ($***) in 2008 and accounted for *** percent of apparent U.S. consumption by

quantity and *** percent by value. U.S. shipments of imports of MKP from nonsubject sources totaled

*** pounds ($***) in 2008 and accounted for *** percent of apparent U.S. consumption by quantity and

*** percent by value.

STPP

Apparent U.S. consumption of STPP totaled approximately *** pounds ($***) in 2008. 

Currently, two firms are known to produce STPP in the United States. U.S. shipments of STPP by U.S.

producers ICL and Prayon totaled *** pounds ($***) and accounted for *** percent of apparent U.S.

consumption by quantity and *** percent by value in 2008. U.S. imports of STPP from China totaled

26.0 million pounds ($17.3 million) in 2008 and accounted for *** percent of apparent U.S. consumption

by quantity and *** percent by value. U.S. imports of STPP from nonsubject sources totaled 257.6

million pounds ($153.3 million) in 2008 and accounted for *** percent of apparent U.S. consumption by

quantity and *** percent by value.
 5

 SHMP is a water-soluble polyphosphate glass that consists of a distribution of polyphosphate chain lengths. It

is a collection of sodium polyphosphate polymers built on repeating NaPO3 units. The Commission concluded that

SHMP, in all grades, chain lengths, and particle sizes, constituted a distinct domestic product “like” the merchandise

subject to investigation. Sodium Hexametaphosphate from China, Investigation No. 731–TA–1110 (Final), USITC

Publication 3984, March 2008, pp. 1-5.

 6 Certain Sodium and Potassium Phosphate Salts From the People’s Republic of China: Initiation of

Countervailing Duty Investigation, 74 FR 54778, October 23, 2009.

I-4

TKPP

Apparent U.S. consumption of TKPP totaled approximately *** pounds ($***) in 2008. 

Currently, four firms (ICL, Innophos, PCS, and Prayon) are known to manufacture and/or sell

domestically produced TKPP in the United States. U.S. producers’ U.S. shipments of TKPP totaled ***

pounds ($***) and accounted for *** percent of apparent U.S. consumption by quantity and *** percent

by value in 2008. U.S. shipments of imports of TKPP from China totaled *** pounds ($***) in 2008 and

accounted for *** percent of apparent U.S. consumption by quantity and *** percent by value. U.S.

shipments of imports of TKPP from nonsubject sources totaled *** pounds ($***) in 2008 and accounted

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

SUMMARY DATA AND DATA SOURCES

A summary of data collected in these investigations is presented in appendix C. Tables C-1

through C-4 are summary data for DKP, MKP, STPP, and TKPP, respectively. Table C-5 aggregates the

data for these four chemicals. Except as noted, U.S. industry data are based on questionnaire responses of

three firms that accounted for most or all U.S. shipments of domestic production of each of the four

chemicals during 2008. U.S. imports of DKP, MKP, and TKPP are based on questionnaire responses. 

U.S. imports of STPP are based on official import statistics. Chinese industry data are based on

questionnaire responses, while available information on other foreign industries is based on published

sources.

PREVIOUS AND RELATED INVESTIGATIONS

There have been no previous import injury investigations on the merchandise subject to these

investigations. However, the Commission instituted an antidumping duty investigation on imports of the

sodium phosphate SHMP (sodium hexametaphosphate) effective February 8, 2007, following receipt of a

petition by ICL and Innophos. Effective March 12, 2008, the Commission determined that an industry in

the United States was materially injured by reason of imports from China of SHMP that had been found

by Commerce to be sold in the United States at less than fair value.5

NATURE AND EXTENT OF ALLEGED SUBSIDIES AND SALES AT LTFV 

Alleged Subsidies

On October 23, 2009, Commerce published a notice in the Federal Register of the initiation of its

countervailing duty investigation on phosphate salts from China.6

 Commerce identified the following

government programs in China:
 7 Certain Sodium and Potassium Phosphate Salts From the People’s Republic of China: Initiation of

Antidumping Duty Investigation, 74 FR 54024, October 21, 2009.

I-5

I. Income Tax Programs

1. “Two Free, Three Half” Tax Exemption for Foreign Invested Enterprises (“FIEs”).

2. Income Tax Subsidies for FIEs Based on Geographic Location.

3. Income Tax Exemption Programs For Export-Oriented FIEs.

4. Local Income Tax Exemption or Reduction Program for “Productive” FIEs.

5. Preferential Tax Subsidies for Research and Development by FIEs.

6. Reduced Income Tax Rate for Highand New-Technology Enterprises.

7. Income Tax Credit on Purchases of Domestically Produced Equipment.

8. Reduction in or Exemption from the Fixed Assets Investment Orientation

Regulatory Tax.

II. Grant Programs

1. Subsidies to Loss-Making State-Owned Enterprises (“SOEs”) by the

Government of China (“GOC”) at the National Level. 

2. Subsidies to Loss-Making SOEs by the GOC at the Provincial Level.

3. Grants Pursuant to the State Key Technology Renovation Project Fund.

4. Grants Pursuant to the “Famous Brands” Program.

III. Tariff and Indirect Tax Exemption Programs

1. Value Added Tax (“VAT”) Refunds for FIEs Purchasing Domestically Produced

Equipment.

IV. VAT and Tariff Exemptions on Imported Equipment

V. Preferential Lending Policies

1. Discounted Loans for Export Oriented Industries (“Honorable Enterprises”).

VI. Government Restraints on Exports of Yellow Phosphorous

Alleged Sales at LTFV

On October 21, 2009, Commerce published a notice in the Federal Register of the initiation of its

antidumping duty investigation on phosphate salts from China.7

 Commerce initiated the antidumping

duty investigation based on estimated dumping margins ranging from 33.7 to 177.4 percent for phosphate

salts from China.

THE SUBJECT MERCHANDISE

Commerce’s Scope

Commerce has initiated its investigations with the following scope:

The phosphate salts covered by this investigation include Sodium Tripolyphosphate

(STPP), whether anhydrous or in solution, anhydrous Monopotassium Phosphate

(MKP), anhydrous Dipotassium Phosphate (DKP) and Tetrapotassium
 8 Certain Sodium and Potassium Phosphate Salts From the People’s Republic of China: Initiation of

Antidumping Duty Investigation, 74 FR 54024, October 21, 2009.

I-6

Pyrophosphate (TKPP), whether anhydrous or in solution (collectively “phosphate

salts”). 

STPP, also known as Sodium triphosphate, Tripoly or Pentasodium triphosphate, is a

sodium polyphosphate with the formula Na5O10P3. The American Chemical Society,

Chemical Abstract Service (“CAS”) registry number for STPP is 7758-29-4. STPP is

typically 25% phosphorus, 31% sodium and 57% diphosphorus pentoxide (P2O5).

STPP is classified under heading 2835.31.0000, HTSUS. 

TKPP, also known as normal potassium pyrophosphate, Diphosphoric acid or

Tetrapotassium salt, is a potassium salt with the formula K4P2O7. The CAS registry

number for TKPP is 7320-34-5. TKPP is typically 18.7% phosphorus and 47.3%

potassium. It is generally greater than or equal to 43.0% P2O5 content. TKPP is

classified under heading 2835.39.1000, HTSUS. 

MKP, also known as Potassium dihydrogen phosphate, KDP, or Monobasic

potassiumphosphate, is a potassium salt with the formula KH2PO4. The CAS registry

number for MKP is 7778-77-0. MKP is typically 22.7% phosphorus, 28.7%

potassium and 52% P2O5. MKP is classified under heading 2835.24.0000, HTSUS. 

DKP, also known as Dipotassium salt, Dipotassium hydrogen orthophosphate or

Potassium phosphate, dibasic, has a chemical formula of K2HPO4. The CAS registry

number for DKP is 7758-11-4. DKP is typically 17.8% phosphorus, 44.8% potassium

and 40% P2O5 content. DKP is classified under heading 2835.24.0000, HTSUS. 

The products covered by this investigation include the foregoing phosphate salts in

all grades, whether food grade or technical grade. The product covered by this

investigation includes anhydrous MKP and DKP without regard to the physical form,

whether crushed, granule, powder or fines. Also covered are all forms of STPP and

TKPP, whether crushed, granule, powder, fines or solution. For purposes of the

investigation, the narrative description is dispositive, not the tariff heading,

American Chemical Society, CAS registry number or CAS name, or the specific

percentage chemical composition identified above.8

Tariff Treatment

STPP is classifiable in the Harmonized Tariff Schedule of the United States (“HTS”) under

subheading 2835.31.00, which covers only that product. TKPP is classifiable in the HTS under

subheading 2835.39.10, which also includes other potassium polyphosphates, but according to industry

sources, TKPP is the more commercially important product entering under that subheading and is the

only known product imported under subheading 2835.39.10 from China. MKP and DKP are classifiable

in the HTS under subheading 2835.24.00, which also includes other potassium phosphates, but, according

to industry sources, MKP and DKP are the most important imports entering under that HTS subheading. 

Moreover, according to industry sources, all or nearly all imports under HTS subheading 2835.24.00 from
 9

 Petition, pp. 17-18.

 10 Conference transcript, pp. 68-69 (Cannon, Stachiw, Sexton).

I-7

China appear to be either MKP or DKP.9 Table I-1 presents the current duty rates for DKP, MKP, STPP,

and TKPP.

Table I-1 

DKP, MKP, STPP, and TKPP: Tariff rates, 2009

HTS provision Article description

General1 Special2

Column

23

Rates (percent ad valorem)

2835

2835.24.00

2835.31.00

2835.39

2835.39.10

Phosphinates (hypophosphites), phosphonates (phosphites)

and phosphates; polyphosphates, whether or not chemically

defined:

Phosphates:

Of potassium..............................................

Polyphosphates:

Sodium triphosphate (Sodium tripolyphosphate)................................................

Other:

Of potassium.....................................

 

3.1

1.4

3.1

(

4

)

(

4

)

(

4

)

25

6

25

 1 Normal trade relations, formerly known as the most-favored-nation duty rate. 

 2

 Special rates not applicable when General rate is free.

 3

 Applies to imports from a small number of countries that do not enjoy normal trade relations duty status.

 4

 General note 3(c)(i) defines the special duty program symbols enumerated for this provision none of these programs apply to

imports from China. 

Source: Harmonized Tariff Schedule of the United States (2009).

THE PRODUCT

Overview

The products covered by these investigations are salts of phosphoric acid, H3PO4, and as such are

labeled phosphates. These include sodium tripolyphosphate (STPP), having the chemical formula

Na5O10P3; tetrapotassium pyrophosphate (TKPP), having the chemical formula K4P2O7; monopotassium

phosphate (MKP), having the chemical formula KH2PO4; and dipotassium phosphate (DKP), having the

chemical formula K2HPO4. STPP is a white powder consisting of more than one crystalline form; MKP

exists as colorless crystals; DKP exists as a hygroscopic white crystal or powder, and TKPP exists as

colorless crystals or as a white powder. 

Each of these products is manufactured by the reaction of phosphoric acid with an alkali base, as

will be discussed in the description of the production process. STPP is by far the largest volume chemical

of the four phosphate salts included within Commerce’s scope. According to industry sources, there is no

interchangeability between the products covered in these investigations. Additionally, different grades of

the same phosphate salt are not generally interchanged with each other.10

The key raw material, phosphoric acid, consists of several grades, including primarily thermal

grade (a high purity product made from elemental phosphorus) and solvent purified wet phosphoric acid

(a purified form of agricultural phosphoric acid made from phosphate rock that is generally slightly less

pure than the thermal grade, but with sufficient purity to permit its use for both technical and food
 11 Conference transcript, pp. 119, 121 (Schewe).

 12 Conference transcript, pp. 118-121 (Schewe).

 13 Conference transcript, p. 98 (Sexton).

 14 Additionally, small amounts of these phosphate salts are sold as ultrapure USP and electronic grades.

 15 To remove arsenic, sulfide is added to the phosphoric acid raw material to precipitate the arsenic which is then

filtered out. Conference transcript, p. 63 (Fyock).

 16 Conference transcript, pp. 63-65 (Fyock, Allen); p. 107 (Sexton, Fyock); and p. 108 (Sexton).

 17 Unlike the other phosphate salts covered in these investigations, there is often a difference between the type of

STPP used in food and technical grades. In general, for foods, a more soluble form of STPP is used (based on

different crystalline forms) than for technical applications Conference transcript, pp. 70- 73 (Stachiw).

 18 Conference transcript, pp. 66-67 (Stachiw); staff telephone interview with ***, October 28, 2009.

 19 Petition, p. 10.

 20 Conference transcript, pp. 131-132 (Sexton).

I-8

applications). Thermal-grade phosphoric acid is produced in the United States by ICL, which consumes it

internally and sells the remainder in the merchant market, where it accounts for not more than 10 percent

of domestic consumption (with the remainder being primarily solvent purified wet phosphoric acid).11

According to an industry source, thermal-grade acid is used primarily for food applications but some is

used for high-purity electronic applications.12 In China, according to industry sources, thermal-grade

phosphoric acid is the primary form of phosphoric acid used to make the phosphate salts covered in these

investigations.13

Description and Applications 

The phosphate salts at issue in this proceeding are sold primarily as either technical or food

grade.14 Food-grade phosphate salts are subject to more careful analysis and require a more narrow range

of specifications including pH and maximum allowable amounts of arsenic,15 fluoride, lead and insoluble

materials as specified in the Food Chemicals Codex (FCC). In the United States, technical- and foodgrade phosphate salts are generally the same product, made in the same facility, although the food-grade

phosphate salts have been subject to more rigorous testing, handling, and maintenance requirements.16 17

While customers generally specify food grade or technical grade, the lines between the two grades can

blur; for example, customers have purchased the technical grade MKP for use in fermentation to make

insulin.18

The grades are further classified by particle size which are typically categorized as fines, powder,

or granules, in order of increasing particle size. These are determined by the average size of the

individual particles when they are sifted though a sieve of a given mesh size. Different grades of STPP

are also assigned on the basis of density. In general, STPP that has a density of 30-39 pounds per cubic

foot is considered to be light density granular; STPP that has a density of 43-57 pounds per cubic foot is

considered to be medium density, and above 57 pounds per cubic foot, STPP is considered to be a highly

dense material.19

For applications such as in an automatic dishwasher detergents, it is desirable to have the

detergent dissolve slowly so that it will remain present throughout the whole cycle. In such cases, a

heavy dense form of STPP is preferred. On the other hand, in many food processing applications, it is

important that the phosphate salt dissolve quickly in solution; in such cases, STPP that has a relatively

low density is likely more suitable.20 According to industry sources, the assignment of grades in terms of
 21 Petition, p. 10.

 22 Petition, pp. 10-11.

 23 Conference transcript, p. 95 (Sexton).

 24 A builder is a substance that increases the effectiveness of a soap or detergent by acting as a softener and a

sequestering and buffering agent. Hawley’s Condensed Chemical Dictionary, Fourteenth Edition.

 25 Petition, pp. 14-16, and conference transcript, pp. 16-22 (Pound) and 60-62 (Sexton, Schewe).

I-9

densities does not generally apply to food-grade STPP or to the other phosphate salts covered in these

investigations.21

The phosphate salts purchased by customers can be procured either as dry material (usually the

anhydrous salt) or they may be purchased as a solution. Whether the customer who requires the

phosphate salt in solution decides to purchase the solution from the manufacturer or decides to dissolve

the salt in the customer’s own facilities largely depends on the type of phosphate salt being considered.

For example, because MKP and DKP can be readily produced in-house by customers by the reaction of

potassium hydroxide and phosphoric acid, they typically are not purchased in solution form (and the

solution form for these products is therefore not included within the scope of these investigations). On

the other hand, making STPP and TKPP in solution form requires additional processing (such as

calcining) that cannot be readily performed by customers in their facilities; consequently, solutions of

these products typically are purchased from the phosphate salt producers. Therefore, in contrast to MKP

and DKP, the petition includes solutions of STPP and TKPP.22

In some cases, the solution is more expensive to make than the dry anhydrous salt and in other

cases, the dry anhydrous salt is more expensive to make than the solution, depending on whether the

solution is made from the anhydrous material or vice-versa. Because anhydrous MKP and DKP are made

from the solution after the phosphate salt has been dried, milled and packaged, the anhydrous product is

typically more expensive to make than the solution. On the other hand, because TKPP solution is made

from the dry material which is then put in solution and filtered, the solution form is typically more

expensive to make than the anhydrous salt.23

In terms of applications, STPP’s use is related to its ability to act as a sequestration, buffering,

emulsification, hydrolysis, and dispersant agent. STPP is used in industrial and institutional cleaning

products where it functions as a builder24 enhancing the cleansing ability of the product. Its use in this

area is declining because of increasingly stringent environmental regulations banning or restricting the

use of phosphates. In food applications such as seafood, meat, poultry and pet foods, STPP is used to

retain moisture. STPP is also used in toothpastes. TKPP is used in liquid cleaning products and in

potable and industrial water treatment where it acts to prevent scaling. It is also used in metal cleaners

and metal surface treatment and in the manufacture of latex paints where the TKPP acts to allow the paint

formulation to remain as a stable suspension. MKP is used as a fertilizer where it serves as a source of

phosphorus and potassium and as a stabilizer. It is also used as a food additive and fungicide. DKP is

also used as a fertilizer (where it serves as a source of phosphorus and potassium) and as a food additive. 

It is also used in non-dairy creamers as a buffer to prevent coagulation. Typically, most DKP sold in

solution form is used in liquid creamers. Some DKP is also used in its anhydrous form in dry creamers,

but in the United States there is more demand for creamers in liquid form.25

Production Processes

The initial step in the production of the phosphate salts covered by these investigations is the

reaction of phosphoric acid with a base which is either soda ash or sodium hydroxide (caustic soda) for

STPP or potassium hydroxide for MKP, DKP, and TKPP. 
 26 MSP and DSP as well as MKP and DKP are referred to as orthophosphates, meaning that no condensation has

occurred when these chemicals are placed in a low-temperature dryer. There is only one phosphate unit per

molecule for all these products (in contrast to polyphosphates).

 27 ***. E-mail from ***, to Commission staff, October 27, 2009. 

 28 ***. E-mail from ***, to Commission staff, October 27, 2009. 

 29 As noted in the previous section, to produce DKP or MKP in solution, customers, especially if they are

chemical manufacturers, can simply react purchased potassium hydroxide with purchased phosphoric acid in house.

This method cannot, however, be used to produce STPP and TKPP in solution; in order to produce these products,

the sodium or potassium orthophosphate starting materials must be calcined. Thus, customers purchasing STPP or

TKPP in solution will typically rely on the phosphate salt manufacturer to manufacture anhydrous STPP or TKPP

which is then dissolved by the manufacturer in water. According to industry sources, dissolving TKPP in water is a

difficult and time consuming step; consequently, most customers prefer to purchase TKPP as a solution rather than

dissolving the TKPP in the customers’ facilities. Conference transcript, p. 62 (Sexton). 

 30 ***. E-mail from ***, to Commission staff, October 27, 2009. 

 31 Conference transcript, pp. 36-37 (Sexton); pp. 106-07 (Stachiw).

I-10

In the production of the sodium salt STPP, appropriate quantities of caustic soda or soda ash and

phosphoric acid are mixed in solution so that the product formed is between monosodium phosphate

(MSP) and disodium phosphate (DSP).26 The water is then removed using either using drum dryers, or in

some cases, the product is crystallized. To manufacture STPP, the monosodium/disodium phosphate

mixture is then calcined at a temperature between 350 degrees Celsius and 550 degrees Celsius. STPP

forms when molecules of MSP and DSP react and chemically condense. After cooling, the STPP

particles are passed through a series of sieves so that only particles with the specified size range are

packaged to be shipped to customers. STPP particles that are outside the acceptable range, particularly if

they are too large, may be resized, e.g. using a granulator, and the resulting material may be fed back into

the product stream.27

The production of the potassium salts, DKP, MKP, and TKPP, is similar to the production

process described in the previous paragraph for STPP except that potassium hydroxide is substituted for

caustic soda or soda ash. To produce DKP and MKP, potassium hydroxide is reacted with phosphoric

acid in a mole ratio of 1:1 and 2:1, respectively. To produce TKPP, DKP is calcined at a temperature

between 400 degrees Celsius and 500 degrees Celsius.28 29 The TKPP product is then sized and packaged

for shipping.30

According to an industry source, the customers of the domestic phosphate salts as well as the

Chinese products receive a certification of analysis after the finished product is tested in a laboratory

assessing the degree of impurities, the particle size, and the density. Once that certification of analysis is

received and accepted, the phosphate salts provided by the various suppliers are interchangeable and

according to domestic industry sources, the product can be considered to be a commodity. The

certification process can be in a form of a guarantee based on statistical testing of selected samples or a

lab result may be based on actual testing of the batch that is being shipped to the customer.31

DOMESTIC LIKE PRODUCT ISSUES

The Commission’s decision regarding the appropriate domestic product(s) that are “like” the

subject imported product is based on a number of factors including: (1) physical characteristics and uses;

(2) common manufacturing facilities and production employees; (3) interchangeability; (4) customer and

producer perceptions; (5) channels of distribution; and (6) price. Information regarding these factors is

discussed below.
 32 Petitioner’s postconference brief, p. 3.

 33 “For purposes of the preliminary investigation, the Chinese Producers are prepared to accept the like product

definition proposed by Petitioners ICL and Prayon.” Respondents’ postconference brief, p. 1.

 34 The material in this section is primarily sourced from testimony provided by Nancy Stachiw of ICL (conference

transcript, pp. 12-22).

 35 In general, potassium compounds are more soluble than sodium compounds.

I-11

The petitioner contends that the Commission should find four like products.32 Respondents do

not argue otherwise.33

Physical Characteristics and Uses34

According to industry sources, there are six properties that phosphate salts have that render them

useful. Chelation or sequestration refers to the ability of certain phosphate salts to bind and inactivate

unwanted minerals or metals. Certain metals can interfere with the processing of food or the cleaning

ability of the product. For example, unwanted minerals can build up to cause scale in water or boiler

systems or cause unwanted reactions in meat adversely affecting its taste. Buffering refers to the ability

of the phosphate salts to stabilize the pH or acidity/alkalinity level of the solution. Emulsification refers

to the ability of the agent to mix two or more substances that will otherwise separate out such as oil and

water. Dispersing refers to the ability of the agent to keep particles from clumping together, e.g. dirt, in

an institutional laundry. Fermentation refers to the ability of the agent in conjunction with yeast or

bacteria to ferment sugar and other carbohydrates into alcohol, carbon dioxide, or organic acids for use in

the production of a variety of foods including wine, beer, or in the leavening of bread. Finally, solubility

refers to the ability of the chemical to dissolve in solution. This property is important since a phosphate

salt that is relatively insoluble cannot be used in processes where it is to be used in solution. 

Summarizing the properties of the four phosphates included in this proceeding: 

• STPP and TKPP are chelating agents whereas MKP and DKP are not; this enables TKPP

and STPP to be used in removing unwanted minerals that interfere with food processing

or cleaning. STPP and TKPP salts are further advantaged for cleaning, because STPP

and TKPP are also excellent dispersants, preventing dirt particles from coming together

as clumps. 

• MKP and DKP are excellent buffers whereas STPP and TKPP are not; this enables MKP

and DKP to be used in formulating pharmaceuticals, beverages or food products where a

sharp change in acidity/alkalinity can be devastating. 

• DKP is an excellent emulsifying agent; this enables the chemical product to be used in

many dairy applications where it is necessary to mix otherwise incompatible substances. 

• MKP is a superior fermentation agent (although DKP is also a useful fermentation agent);

This enables MKP to be used in fermentation and yeast processes where it serves as

source of potassium and phosphorus. 

• DKP and TKPP are more soluble than MKP which is, in turn, more soluble than STPP.35

The higher solubility of TKPP relative to STPP allows it to be used in some water

treatment or paint applications where the STPP cannot be used, because it will precipitate

out of solution. 
 36 Chemists use MKP in applications where an acidic environment is required and DKP in applications where an

alkaline environment is required. Conference transcript, pp. 16-18 (Stachiw).

 37 Examples are provided in the Production Processes section illustrating variations in production processes that

occur ***.

 38 E-mail from ***, to Commission staff, October 27, 2009 and ICL’s response to the U.S. Producers’

Questionnaire (question II-3). 

 39 ***.

 40 Petition, p. 96.

I-12

The different properties of the phosphate salts discussed above are essential in explaining the uses

of these chemicals. However, there are other properties which are also important in determining the

applicability of the phosphate salts covered in this proceeding such as whether the salt acts as an acid,

base, or neutral material.36

Manufacturing Facilities and Employees

The production of all phosphate salts subject to this proceeding begins with a tank in which the

reaction between the alkali base and phosphoric acid takes place. For MKP and DKP, the phosphate salts

are then dried in a relatively low-temperature dryer. For STPP and TKPP, the salts are dried in a dryer at

a high enough temperature to induce calcining. According to industry sources, in some cases, this high

temperature dryer may be a separate piece of apparatus, a “calciner,” either a drum dryer or a calcining

furnace. In other cases, the high temperature dryer may be simply the same piece of apparatus as the low

temperature dryer except that the dryer is set to a high temperature.37 After drying, the products pass

through a course screen and those larger particles that are retained are milled to grind up the larger

particles. The products are then passed through a fine screen. The “fines” are either sold as is or returned

to solution and recycled. 

For materials that are to be sold in solution, e.g., STPP and TKPP, the anhydrous STPP and

TKPP is dissolved in water and the solution is packaged in watertight containers such as drums. In short,

the only difference in the equipment used is the presence of a calciner which may or may not be the same

piece of equipment as an ordinary dryer (except set at a higher temperature), and additional equipment for

dissolving material either at the beginning of the production process (soda ash, unlike sodium hydroxide

or potassium hydroxide, will need to be dissolved) or at the end of the production process when some of

the product, e.g., STPP or TKPP, is put back in solution form for sale to customers.

ICL produces the sodium phosphate salt, STPP, and the potassium phosphate salts MKP, DKP,

and TKPP in ***.38 Prayon produces STPP and TKPP and other products ***.39 Prayon does not

produce anhydrous DKP or MKP. PCS produces only TKPP *** Innophos ***.

The petitioners appear to agree with the assessment that the same equipment is used to produce

the phosphate salts covered in this proceeding if they are produced within the same facility. The petition

states that “all phosphate salts can be manufactured on the same equipment in the same facility.” Prayon

***. ICL ***.40

Interchangeability and Customer and Producer Perceptions

Petitioners contend that “together with the physical characteristics, the end-uses of different

phosphate salts are the most important distinguishing factors between like products.” The majority of

importer questionnaires indicate that the four products are not interchangeable. In particular, no U.S.

importer identified another of the phosphates salts subject to this proceeding as a substitute for DKP,

MKP, STPP, or TKPP.
I-13

Channels of Distribution

Table I-2 presents the respective channels of distribution for U.S. producers’ U.S. shipments of

DKP, MKP, STPP, and TKPP. Additional details regarding the channel structure of domestically

produced and imported phosphate salts are presented in Part II of this report, Conditions of Competition in

the U.S. Market.

Table I-2

DKP, MKP, STPP, and TKPP: Channels of distribution for U.S. producers’ U.S. shipments, 2006-08,

January-June 2008, and January-June 2009

* * * * * * *

Price

Table I-3 presents average unit values for U.S. producers’ U.S. shipments of DKP, MKP, STPP,

and TKPP in the United States. Unit values ranged from $*** (STPP) to $*** (DKP) for the four

products in 2008, and were similarly dispersed in 2009. Pricing practices and prices reported for

domestically produced and imported phosphate salts in response to the Commission’s questionnaires are

presented in Part V of this report, Pricing and Related Information. 

Table I-3

DKP, MKP, STPP, and TKPP: Average unit values of U.S. producers’ U.S. shipments, 2006-08,

January-June 2008, and January-June 2009

* * * * * * *

 1

 Conference transcript, p. 16 (Stachiw).

 2

 Petition, p. 9.

 3

 DKP and MKP in solution form are excluded from the scope of these investigations.

 4

 Conference transcript, p. 132 (Sexton).

 5

 Hearing transcript, p. 20 (Stachiw) and p. 194 (Wei).

 6

 Conference transcript, p. 60 (Schewe).

 7

 *** importer questionnaire response.

 8

 E-mail from ***, October 26, 2009. 

II-1

PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

U.S. MARKET CHARACTERISTICS

The phosphate salts at issue in this proceeding have many varied uses and characteristics which

depend on the chemical properties of each salt. These properties are covered in Part I: Introduction, and

include differing abilities of sequestration, buffering, emulsification, dispersion, fermentation, and

solubility. A witness for ICL summarized these differences as follows:

“MKP’s most important functions are as a buffer and in fermentation. DKP’s most

important functions would be as a buffer and in emulsification. Also its solubility is

good. TKPP’s most important functions are solubility, dispersion and sequestration. 

STPP’s are dispersion and sequestration.”1

The differing properties of the four subject phosphate salts are useful in a number of downstream

industries including, but not limited to, cleaning, water treatment, dairy, meat, baking, and fertilizers.

Each phosphate salt may be sold in technical or food grade. Food-grade phosphate salts must

meet stricter guidelines in terms of the allowable amounts of certain impurities (arsenic, fluoride, lead,

and heavy metals) and pH level.2

 These salts may be sold in solid (anhydrous) form or in solution.3

Technical grade STPP may also be sold in light, medium, or heavy density (the desired density depends

on the use for the STPP). A light density STPP would dissolve quicker, so in food applications where

this characteristic is desired, light density STPP would be the preferred, whereas a heavy density STPP

would be preferred for use in automatic dishwashing (“ADW”) formulations, so the STPP would be

available through the whole cycle.4

 Additionally, phosphate salts can be blended with other subject and

nonsubject chemicals to produce chemical blends that may have certain chemical properties preferred by

certain customers.5

 

The domestic industry has been shifting more toward the food-grade segment of the MKP market. 

A witness for ICL stated that, regarding MKP, “much of the product that’s actually consumed in the U.S.

market is used for fertilizers, and we are not a large participant in that market space.”6

 Though producing

all their MKP to food-grade standards, ICL sold *** percent of its MKP for food-grade applications in

2006, *** percent in 2007, *** percent in 2008, and *** percent since January 1, 2009. *** food-grade

MKP was sold directly for specialty fertilizer applications since 2006, while in 2006 and 2007, ***, of

technical-grade MKP was sold directly for specialty fertilizer applications. 

*** noted that it only imported technical-grade MKP.7

 *** importer of MKP reported that it did

not import food-grade MKP from China, as “they are normally not Kosher certified and most food

accounts need Kosher.”8

 *** added, “I do not know anyone (including ***) who purchased MKP made

in the U.S. in the past 15 years, as the U.S. producers were not interested in supplying MKP to the
 9

 Ibid.

 10 Staff telephone interview with ***, October 28, 2009. *** further noted that this was due to differing quality,

safety, and consistency of Chinese food-grade MKP.

 11 Respondents’ postconference brief, exh. 10.

 12 Conference transcript, p. 24 (Schewe) and staff telephone interview with ***, October 28, 2009.

 13 ***.

 14 Conference transcript, p. 193 (Crull).

 15 Conference transcript, p. 170 (Mendoza).

II-2

fertilizer industry, who are the largest consumers.”9

 Of the ten largest importers of Chinese MKP, which

represent the vast majority of Chinese imports of MKP during the period of study, only *** reported

importing and selling Chinese MKP into food grade applications, though likely ***.10 One other of the

ten-largest importers, *** stated that it sold its largest customer food-grade MKP for fertilizer

applications due to a customer’s preference for ***. One other smaller importer, *** reported that all of

its imports were of food-grade MKP, and the majority of its 2008 sales of imported Chinese MKP was to

the food industry.

Quarterly pricing data elicited responses from producers and importers regarding their sales of

food-grade and technical-grade anhydrous STPP and TKPP. The proportion of the STPP market that is

accounted for by food-grade STPP has increased since 2006. Food-grade STPP accounted for ***

percent of domestically produced anhydrous STPP in 2006, *** percent in 2007, *** percent in 2008, and

*** percent in the first half of 2009, according to quarterly quantity data submitted by U.S. producers. 

By contrast, China’s exports of STPP in January to August 2009 accounted for *** percent of exports of

STPP.11 Food-grade TKPP accounted for a lower proportion of the entire TKPP market: *** percent in

2006, *** percent in 2007, *** percent in 2008, and *** percent in 2009.

CHANNELS OF DISTRIBUTION

DKP, MKP, STPP, and TKPP may either be sold directly to large end-use customers, or through

regional or national distributors (Univar and Brenntag are national distributors, though Brenntag’s

geographically dispersed operations function as regional distributors).12 Distributors typically buy larger

orders – at least full truckloads – so that they can sell less-than-truckload amounts to their customers.

Also, sales made to some distributors ***.13 Some distributors may be importers of record, whereas

others may distribute salts that were produced in the United States or imported by another firm. 

Distributors may keep a 30-day supply of inventories for their customers.14 The percentage of shipments

from producers and importers for each of the certain phosphate salts that was reported to be sold to

distributors and end users is presented in table II-1.

Table II-1

DKP, MKP, STPP, and TKPP: U.S. producers’ and importers’ U.S. shipments, by products,

sources, and channels of distribution, 2006-08, January-June 2008, and January-June 2009

* * * * * * *

Additionally, U.S. producers may purchase or import certain phosphate salts that they do not

produce in order to offer a broader range of customers’ needs. ***. ***. Innophos reportedly produces

STPP in Canada and Mexico.15
II-3

GEOGRAPHIC MARKETS

*** and five importers of subject product from China including *** reported selling phosphate

salts nationwide. Importers reported selling each of the four phosphate salts to every region as shown in

table II-2.

Table II-2

DKP, MKP, STPP, and TKPP: Number of importers reporting U.S. shipments, by region and

product 

Region DKP MKP STPP TKPP

Northeast 11 16 17 13

Midwest 12 19 22 14

Southeast 8 13 17 12

Central Southwest 7 13 16 10

Mountain 4 10 10 7

Pacific 8 15 13 11

Other 2 5 4 2

Source: Compiled from data submitted in response to Commission questionnaires.

SUPPLY AND DEMAND CONSIDERATIONS

Supply

Three producers of phosphate salts responded to the Commission’s questionnaire. ICL produces

***, Innophos ***, and Prayon produces ***. 

Domestic Production

Based on available information, U.S. producers have the ability to respond to changes in demand

with moderate-to-large changes in the quantity of shipments of U.S.-produced DKP, MKP, STPP, and

TKPP to the U.S. market. The main contributing factors to the moderate-to-high degree of

responsiveness of supply are the availability of unused capacity, ample inventories, small levels of export

shipments, and the existence of production alternatives.

Industry capacity

DKP–ICL’s DKP capacity rose by *** percent from 2006 to 2008, and was *** percent higher in

the first half of 2009, compared with the first half of 2008. As the U.S. producer’s reported capacity

increased, capacity utilization declined steadily, from *** percent in 2006 to *** percent in 2008, and

was *** percent in the first half of 2009, compared with *** percent in the first half of 2008 (see table

III-2). Accordingly, ICL has ample excess capacity with which it could increase production of DKP. 

MKP--ICL’s MKP capacity rose by *** percent between 2006 and 2008, but was *** percent

lower in the first half of 2009 than the first half of 2008. The U.S. producer’s reported capacity

utilization declined irregularly, first increasing from *** percent in 2006 to *** percent in 2007 before

falling to *** percent in 2008. Capacity utilization was *** percent in the first half of 2009, compared
 16 Staff telephone interview with ***, October 19, 2009.

 17 Conference transcript, p. 153 (Wei).

 18 Randy Gress, Chairman and CEO of Innophos, Innophos’s Q1 2008 Results Conference Call, submitted as exh.

2 to respondents’ postconference brief. 

II-4

with *** percent in the first half of 2008 (see table III-3). Accordingly, ICL has ample excess capacity

with which it could increase production of MKP. 

STPP--U.S. producers’ STPP capacity decreased by *** percent from 2006 to 2008, and was ***

percent lower in the first half of 2009 than the same time period in 2008. U.S. producers’ reported

capacity utilization declined irregularly, from *** percent in 2006 to *** percent in 2007 and *** percent

in 2008; it was *** percent in the first half of 2009, compared with *** percent in the first half of 2008

(see table III-4). Accordingly, U.S. producers have ample excess capacity with which they could increase

production of STPP. 

TKPP--U.S. producers’ TKPP capacity rose by *** percent between 2006 and 2007 before

falling *** percent in 2008. It was also *** percent lower in the first half of 2009 compared with the first

half of 2008. U.S. producers’ reported capacity utilization increased irregularly, falling from *** percent

in 2006 to *** percent in 2007 and then rising to *** percent in 2008; it was *** percent in the first half

of 2009, compared with *** percent in the first half of 2008 (see table III-5). Accordingly, U.S.

producers have ample excess capacity with which they could increase production of TKPP. 

Alternative markets

Phosphate salts are used throughout the world. *** reported exporting ***. ICL and Prayon

identified *** as the principal export markets for STPP. TKPP’s principal export markets include ***, as

reported by ICL and Prayon. Additionally, ***, as it is very concerned with quality and has not found

any supplier in China with acceptable quality, though it has not conducted and extensive search.16 A

witness for Wenda Co. Ltd. similarly reported importing food-grade STPP into China.17 Innophos

announced that “As far as our Latin American markets are concerned, demand is strong enough for

phosphates in general that in the short term, we can ship production and sales to alternative markets in the

event of a drop in demand for detergency or other markets.”18

DKP--ICL’s export shipments as a share of total shipments of DKP decreased irregularly from

*** percent in 2006 to *** percent in 2007 and *** percent in 2008. Exports, as a share of total

shipments, were higher in January to June 2009 (*** percent) than in January to June 2008 (*** percent). 

This level of exports during the period indicates that ICL is somewhat constrained in its ability to shift

shipments between the United States and other markets in response to price changes of DKP .

MKP–ICL’s export shipments as a share of total shipments of MKP increased from *** percent

in 2006 to *** percent in 2007 and 2008. Exports as a share of total shipments were higher in January to

June 2009 (*** percent) than in January to June 2008 (*** percent). This level of exports during the

period indicates that ICL is somewhat constrained in its ability to shift shipments between the United

States and other markets in response to price changes of MKP. 

STPP--U.S. producers’ export shipments as a share of total shipments of STPP increased

irregularly from *** percent in 2006 to *** percent in 2007 and *** percent in 2008. Exports as a share

of total shipments were lower in January to June 2009 (*** percent) than in January to June 2008 (***

percent). This level of exports during the period indicates that domestic producers of STPP are somewhat

constrained in their ability to shift shipments between the United States and other markets in response to

price changes. 

TKPP--U.S. producers’ export shipments as a share of total shipments of TKPP decreased from

*** percent in 2006 to *** percent in 2007 and *** percent in 2008. Exports as a share of total

shipments were lower in January to June 2009 (*** percent) than in January to June 2008 (*** percent). 
 19 In its 2007 Periodic Report, ICL stated generally, “Despite the presence of many Chinese manufacturers in the

area of phosphate products, their ability to compete during 2007 as well as in the near future on a large scale is

limited due to a lack of electricity in certain areas of China, the imposition of export levies on the export of

phosphate-based products from China, the lower quality of their products and logistical difficulties.” ICL’ s periodic

report for 2007, submitted as respondents’ postconference brief exh. 8.

II-5

This level of exports during the period indicates that domestic producers of TKPP are somewhat

constrained in their ability to shift shipments between the United States and other markets in response to

price changes. 

Inventory levels

DKP–ICL’s inventories of DKP, as a share of total shipments, declined from *** percent in 2006

to *** percent in 2008. The ratio of inventories to annualized total shipments was higher in the first half

of 2009 (*** percent) than in the first half of 2008 (*** percent). 

MKP–ICL’s inventories of MKP, as a share of total shipments, increased from *** percent in

2006 to *** percent in 2007 before decreasing to *** percent in 2008. The ratio of inventories to

annualized total shipments was lower in the first half of 2009 (*** percent) than in the first half of 2008

(*** percent). 

STPP--U.S. producers’ inventories of STPP, as a share of total shipments, decreased from ***

percent in 2006 to *** percent in 2007 before increasing to *** percent in 2008. The ratio of inventories

to annualized total shipments was higher in the first half of 2009 (*** percent) than in the first half of

2008 (*** percent). 

TKPP--U.S. producers’ inventories of TKPP, as a share of total shipments, increased irregularly,

falling from *** percent in 2006 to *** percent in 2007, then increasing to *** percent in 2008. The ratio

of inventories to annualized total shipments was higher in the first half of 2009 (*** percent) than in the

first half of 2008 (*** percent). 

These data indicate that U.S. producers have a moderate-to-large amount of inventories to

increase shipments to the U.S. markets for DKP, MKP, STPP, and TKPP.

Production alternatives

ICL produces the *** using the same equipment and machinery or with the same production

workers at its St. Louis, MO plant (***). ICL’s Lawrence, KS plant produces ***, but its Carondelet, NJ

plant ***. Prayon reported an ability to switch production as well, since it produces *** at its production

facility.

Foreign Supply

China was not the largest foreign source of supply for DKP, MKP, or STPP over the entire period

for which data were collected, however it was the largest country of origin for TKPP since 2006, and for

DKP, MKP, and STPP during the first half of 2009.19 In the first half of 2008, China accounted for ***

percent, by quantity, of DKP, *** percent of the imports of MKP, *** percent of imports of STPP, and

*** percent of imports of TKPP; these shares were not markedly different than the import shares for 2006

and 2007. In the second half of 2008, however, these shares increased to *** percent for DKP, ***

percent for MKP, and *** for STPP, but decreased to *** percent for TKPP. In the first half of 2009,

these trends continued: increases to a *** percent share of imports of DKP, a *** percent share of

imports of MKP, and a *** percent share of imports of STPP; the import share of TKPP from China

declined slightly to *** percent, respectively. Data from the USITC Dataweb indicate that, Israel,
 20 According to the Commission’s quarterly import shipment data, almost *** times as much MKP was imported

than DKP during January 2006 - June 2009, which would account for the strong influence of Israel and Mexico in

the combined DKP/MKP HTS subheading.

 21 Official import statistics from Census indicate that during the period for which data were collected, imports

from France and Germany were larger, but these reportedly consist mostly of chemicals other than TKPP. ***.

 22 Innophos reported in its 2008 Annual Report that: 

“Over the past several years, we estimate that imports, including {those by} domestic producers,

have accounted for approximately 10-15% of the North American specialty phosphate market.

This market share has been fairly stable for at least the last five years, with periods from time to

time of lower penetration due to upsets in foreign production or international logistics. This

import share increased to approximately 15-20% in 2008, due to shortage of supply, reduced

demand in global markets and the price increases in the North American market which made it

relatively more attractive to imports, especially for technical STPP and technical grade

horticultural specialty salts.”

II-6

Mexico, and China were the largest sources for DKP and MKP during the period for which data were

examined.20 Canada and Mexico were the largest sources for STPP. China was the largest sources of

imported TKPP.21 22

China

Industry Capacity--According to two foreign producer questionnaire responses received by the

Commission, reported capacity of DKP in China *** between 2006 and 2008 and *** between interim

2009 and interim 2008. Production of DKP increased from *** in 2006 to *** in 2008, but DKP

production in the first half of 2009 was *** percent compared with ***in the first half of 2008. DKP

capacity utilization in China therefore decreased from *** percent in 2006 to *** percent in 2008;

Chinese capacity utilization was at *** percent in the first half of 2009, compared with *** percent in the

first half of 2008. For full-year 2009, Chinese capacity utilization is estimated to be *** percent, and

increase to *** percent in 2010. 

According to five foreign producer questionnaire responses received by the Commission, reported

capacity of MKP in China increased from *** in 2006 to *** in 2008, but was *** in interim 2009

compared with *** in interim 2008. Production of MKP increased from *** in 2006 to 2007, *** in

2008. MKP production in the first half of 2009 was *** compared with *** in the first half of 2008. 

MKP capacity utilization in China therefore increased from *** percent in 2006 to *** percent in 2008;

Chinese capacity utilization was at *** percent in the first half of 2009, compared with *** percent in the

first half of 2008. 

According to eight foreign producer questionnaire responses received by the Commission,

reported capacity of STPP in China increased irregularly from 752.9 million pounds in 2006 to 771.8

million pounds in 2008. In addition, reported capacity in China was 404.4 million pounds in interim 2009

compared with 419.4 million pounds in interim 2008. Production of STPP increased from 585.1 million

pounds in 2006 to 698.6 million pounds in 2008. STPP production in the first half of 2009, however, was

277.6 million pounds compared with 420.7 million pounds in the first half of 2008. STPP capacity

utilization in China increased irregularly from 77.7 percent in 2006 to 75.6 percent in 2007 and 90.5

percent in 2008; however, STPP capacity utilization in China was reportedly lower in the first half of

2009 (68.6 percent) than in the first half of 2008 (100.3 percent). For full-year 2009, Chinese capacity

utilization for STPP is estimated to be 69.6 percent, and decrease slightly to 71.2 percent in 2010. 

According to four foreign producer questionnaire responses received by the Commission,

reported capacity of TKPP in China *** between 2006 and 2008, though reported capacity in China was

*** in interim 2009 compared with *** in interim 2008. Production of TKPP increased irregularly from
 23 “How should the STPP sector shake off development crisis?,” China Chemical Reporter, December 6, 2007,

submitted as petitioners’ postconference brief, exh. 10 and ***.

 24 “How should the STPP sector shake off development crisis?,” China Chemical Reporter, December 6, 2007,

submitted as petitioners’ postconference brief, exh. 10.

 25 Ibid.

II-7

*** in 2006 to *** in 2008. TKPP production in the first half of 2009 was *** compared with *** in the

first half of 2008. Whereas capacity utilization was *** percent in 2006 and *** percent in 2007, it

increased to *** percent in 2008, and was *** percent higher in the first half of 2009 compared with the

*** percent in the first half of 2008.

Alternative Markets--The share of China’s shipments of DKP exported to the United States, as a

share of its total shipments, increased irregularly from *** percent in 2006 to *** percent in 2007 and

*** percent in 2008. In the first half of 2009, this share was *** percent compared with *** percent in

the first half of 2008. Principal alternative export markets identified by Chinese producers and exporters

include Australia, Europe, Korea, Japan, Malaysia, Singapore, and South Africa. Shipments to the

Chinese home market comprised between *** and *** percent of total shipments for Chinese producers

in 2006 to 2008; home market shipments were lower (*** percent) in interim 2009 than in interim 2008

(*** percent). 

The share of China’s shipments of MKP exported to the United States, as a share of its total

shipments, increased from *** percent in 2006 to *** percent in 2007 and *** percent in 2008. In the

first half of 2009, this share was *** percent compared with *** percent in the first half of 2008. 

Principal alternative export markets identified by Chinese producers and exporters include Asia, Europe,

India, Japan, Korea, the Middle East, Thailand, and Vietnam. Shipments to the Chinese home market

comprised *** percent of total shipments for Chinese producers in 2006, decreasing to *** percent in

2008; home market shipments were higher (*** percent) in interim 2009 than in interim 2008 (***

percent). 

The share of China’s shipments of STPP exported to the United States, as a share of its total

shipments, increased from *** percent in 2006 to *** percent in 2007 and *** percent in 2008. In the

first half of 2009, this share was *** percent, compared with *** percent in the first half of 2008. 

Principal alternative export markets identified by Chinese producers and exporters include Africa,

Australia, Bangladesh, Europe, India, Japan, Korea, Latin America, the Middle East, Saudi Arabia, South

America, South Asia, Southeast Asia, Switzerland, and Syria. Shipments to the Chinese home market

comprised *** percent of total shipments for Chinese producers in 2006, decreasing irregularly to ***

percent in 2008; home market shipments were higher (*** percent) in interim 2009 than in interim 2008

(*** percent). According to ***, Chinese domestic consumption of STPP is ***.23 China’s exports of

STPP are mainly shipped to the Middle East (approximately 28 percent of the total exports).24 As of July

1, 2007, the Chinese Government eliminated the 13 percent export rebate on STPP, apparently to protect

its phosphate reserves.25 

The share of China’s shipments of TKPP exported to the United States, as a share of its total

shipments, increased from *** percent in 2006 to *** percent in 2007, then decreased to *** percent in

2008. In the first half of 2009, this share was *** percent compared with *** percent in the first half of

2008. Principal alternative export markets identified by Chinese producers and exporters of TKPP

include Australia, Korea, and Thailand. Shipments to the Chinese home market comprised *** percent of

total shipments for Chinese producers in 2006, decreasing irregularly to *** percent in 2008; home

market shipments were higher (*** percent) in interim 2009 than in interim 2008 (*** percent). 

Inventory Levels--The ratio of U.S. importers’ U.S. inventories of DKP from China, as a

percentage of their total shipments of DKP from China, decreased from *** percent in 2006 to ***

percent in 2007 before increasing to *** percent in 2008; the ratio was *** percent in the first half of

2009, compared with *** percent in the first half of 2008. 
 26 Based on quarterly pricing data received in response to the Commission’s importer questionnaires.

 27 Based on quarterly pricing data received in response to the Commission’s importer questionnaires.

 28 This is corroborated by Innophos, as it reported in its 2008 annual report “Our major competitor in STPP is

Mexichem in Mexico.” Innophos’s 2008 Annual Report, submitted as exh. 2 to respondents’ postconference brief. 

 29 Based on quarterly pricing data received in response to the Commission’s importer questionnaires.

II-8

The ratio of U.S. importers’ U.S. inventories of MKP from China, as a percentage of their total

shipments of MKP from China, also decreased irregularly, from *** percent in 2006 to *** percent in

2007 and *** percent in 2008; the ratio was *** percent in the first half of 2009, compared with ***

percent in the first half of 2008. 

The ratio of U.S. importers’ U.S. inventories of STPP from China, as a percentage of their total

shipments of STPP from China, decreased from *** percent in 2006 to *** percent in 2007 before

increasing to *** percent in 2008. The ratio of inventories to total shipments was *** percent in the first

half of 2009, compared with *** percent in the first half of 2008. 

The ratio of U.S. importers’ U.S. inventories of TKPP from China, as a percentage of their total

shipments of TKPP from China, increased irregularly from *** percent in 2006 to *** percent in 2008,

and were *** percent in the first half of 2009, compared with *** percent in the first half of 2008. 

Nonsubject Imports

As stated earlier, since the start of 2006, Israel and Mexico have been the largest nonsubject

sources for DKP and MKP; Canada and Mexico for STPP; and France and Germany for TKPP, according

to the relevant USITC Dataweb HTS subheadings. 

According to Commission questionnaire data, shipments of nonsubject imports accounted for ***

percent of all imports in 2006 and 2007 and *** percent of all shipments of imported DKP in 2008. In

the first half of 2008, however, nonsubject imports accounted for *** percent of all shipments of

nonsubject imports of DKP, but this decreased to *** percent in the second half of 2008 and *** percent

in the first half of 2009. Until the fourth quarter of 2008, shipments of imports from Belgium, Germany,

Israel, and Taiwan were all higher than shipments of imported Chinese DKP.26

 With respect to MKP, shipments of nonsubject imports accounted for approximately *** percent

of all imports in 2006 and 2007, but *** percent of all shipments of imported MKP in 2008. In the first

half of 2008, however, nonsubject imports accounted for *** percent of all shipments of imports of MKP,

but *** percent in the second half of 2008 and *** percent in the first half of 2009. The largest sources

for MKP according to Commission questionnaire data were Israel and Mexico.27 Importer *** reported

that for part of 2008, Israeli producer Haifa was sold out of MKP. 

For STPP, nonsubject imports accounted for approximately 96 percent of all imports in 2006 and

2007 and 92.0 percent of all shipments of imported STPP in 2008. In the first half of 2008, however,

nonsubject imports accounted for 94.7 percent of all imports of STPP, but 89.4 percent in the second half

of 2008 and 63.5 percent in the first half of 2009. The largest sources for STPP according to Commission

questionnaire data were Canada and Mexico.28

Regarding TKPP, shipments of nonsubject imports displayed the opposite trend, accounting for

approximately *** percent of all imports in 2006, decreasing to *** percent in 2007, but increasing to

*** percent of all shipments of imported TKPP in 2008. In the first half of 2008, however, nonsubject

imports accounted for *** percent of all import shipments of TKPP, but increased to *** percent in the

second half of 2008 and *** percent in the first half of 2009. The largest nonsubject sources for TKPP

according to Commission questionnaire data were Belgium and Israel.29
 30 See, e.g., Respondents’ postconference brief, p. 16-17 and exh. 12. See also 1-Hydroxyethylidene-1,

1-Diphosphonic Acid (HEDP) from China and India, Inv. Nos. 731-TA-1146-1147 (Final), USITC Publication 4072,

April 2009, p. 14 (noting a curtailment of phosphorous production in China, “surging” global phosphorous demand

for agricultural applications, and the imposition of export taxes by the Chinese government on phosphorous exports

in 2008).

 31 Conference transcript, p. 88 (Schewe).

 32 *** also reported that the earthquake in China destroyed some Chinese phosphate production and a Canadian

potash mine strike reduced U.S. supply of potassium.

 33 For example, *** reported that “current pricing reflects the drop in KOH 45% solution pricing from $1800 per

ton on spot market to down to below $600 per ton today. Yellow phosphorous pricing has dropped from $3385/MT

to less than $1850/MT today.”

 34 See Part V: Pricing and Related Information for data related to domestic producers’ raw material prices.

 35 Conference transcript, pp. 79-80 (Schewe).

 36 Conference transcript, p. 80 (Sexton).

 37 Respondents’ postconference brief, p. 21.

 38 One of these importer reported that the shortage began in October 2007 but continued in 2008. 

 39 Conference transcript, pp. 27-28 (Schewe).

 40 Conference transcript, p. 27 (Schewe).

II-9

General Supply Conditions

Fertilizers are a substitute in production for phosphate salts. Strong agricultural demand in

fertilizers creates competition in feedstock for phosphate supply. This can have the effect of tightening

the supply of feedstock and leading to increased raw material prices, which occurred in 2008.30 Demand

for fertilizers in the United States is reportedly down by “at least 10 percent” in 2009, easing the pressure

on raw materials for phosphate salt producers.31

Firms were asked to discuss the trends in raw material prices and expected future prices of raw

materials. Most firms reported major increases in the costs of raw materials particularly in 2008, mainly

due to increased fertilizer demand.32 Many of these firms reported that prices have declined sharply in

2009 from the 2008 peaks.33 34 *** reported that since 2006, the cost of phosphoric acid had increased by

35 percent, soda ash increased by 30 percent, and potassium hydroxide increased by 250 percent. While

future trends in input price changes were less clear, a number of firms reported that they expected input

prices to increase when the price of corn or fuel increase.

Firms were asked if they had refused, declined, or been unable to supply certain sodium and

potassium phosphate salts since January 1, 2006. ***. ICL reported that it had an *** allocation on ***

and limited its customers in 2008 to 2007 levels for all phosphate products, including phosphoric acid.35

During this time, Prayon supplied purchasers that could not get enough material from ICL.36 ***. 

Innophos also reported that ***. Respondents contend that ***.37 

Twenty-one of 36 responding importers reported limitations on the supply of phosphate salts; all

21 reported shortages in 2008.38 Some importers reported that purchasers of U.S. product turned to them

for product because of the lower availability of U.S.-produced phosphate salts. Importers reported U.S.

product was less available both because of limitations on the inputs and because high-demand fertilizers

caused the inputs to be used for fertilizers rather than phosphate salts. Importers also reported restrictions

from import sources: from China because of limits on raw materials, the Olympics, and export taxes, and

from Israel because Haifa was sold out of MKP. Petitioners also stated that China’s supply was disrupted

in 2008 because of earthquakes and the Olympics in Beijing (in order to improve air quality and reduce

the risk of a chemical spill).39 Petitioners further contend that the supply of phosphoric rock in winter in

China always declines due to the reduction in the availability of hydroelectric power.40 Respondent

Wenda Co., Ltd. reported, however, that the Olympics did not have a “big influence {on} phosphates
 41 Conference transcript, p. 191 (Wei).

 42 Ibid.

 43 *** importer’s questionnaire response, section III-21. 

 44 *** importer’s questionnaire response. 

 45 Respondents’ postconference brief, p. 9.

 46 Respondents’ postconference brief, exh. 7.

II-10

because the major five provinces where the phosphates producers are located are all in the central to

west/southwest – so very far from Beijing.”41 With respect to the earthquakes, Mr. Wei of Wenda Co.,

Ltd. reported that some of the producers were taken offline and some have returned to production.42

Finally, one importer reported that in 2008, it had reduced its imports of TKPP because when prices

spiked, it feared being stuck with high priced product when the prices eventually fell.43

Nineteen of 35 responding importers *** reported that supply factors other than the availability

of raw materials that had influenced the supply of phosphate salts in the U.S. market. ***. A number of

importers reported that there had been supply restrictions from U.S. suppliers, other factors included

increased transportation costs, hurricanes reducing U.S. production of TKPP, Chinese export taxes,

weight restrictions, and labor cost restrictions. Importer *** stated:

“nearly all of the demand {for imported DKP} was from customers who were unable to

purchase domestically produced food-grade liquid MKP and DKP. Were they able to

buy domestically produced dry product as a replacement, they would have, but that

material was also not available from any domestic production. So, to sustain their

business our customers turned to us to import whatever we could find and China had

product, albeit at elevated prices.”44

When asked if there had been any changes in the product range or marketing of phosphate salts,

*** responding producers and 30 of 34 responding importers reported “no.” ***, and respondents report

that 15 states have already banned ADW detergents containing phosphates.45 Because of the difficulty in

maintaining separate supply chains, dishwashing detergent manufacturers are moving entirely to

phosphate-free varieties.46 One importer of DKP reported that its imports were a one time sale, while

another importer of DKP reported that it imports directly for its own use, although it also sold some

product to fertilizer wholesalers. One importer of STPP reported consolidation of phosphorous

manufacturers and one reported demand for Chinese product fell in late 2007 after the melamine scare

caused users to change to domestic sources until they failed to deliver on contract.

Demand

U.S. Demand

Demand Characteristics

Certain phosphate salts are used in a wide range of applications, and different phosphate salts are

used in different applications, as shown in table II-3. 
II-11

Table II-3

DKP, MKP, STPP, and TKPP: Products for which phosphate salts are used and share of the cost

of these end products as reported by U.S. producers and importers

Phosphate

salt End Use

Cost share of

phosphate salt in

end use 

DKP Antifreeze 5%

Baked goods 5%

Meat processing 1%

Dairy (coffee creamers, processed cheese, evaporated milk) 1-5%

Buffering agent in compounding formulas 10%

Metal treatment N/A

MKP Cement 34%

Buffering agent in compounding formulas 10%

Refractories 25%

Food & beverage (yeast, food nutrient) 1%

Chemical processing 1%

Dog food 5%

Fertilizer 25-65%

Fungicide N/A

STPP Household and industrial products 25%

Tile manufacturing 5%

Anticoagulant 85%

Detergents (automatic dishwasher detergent) 5-20%

Water treatment 1-5%

Meat curing, poultry, and seafood, food preservative 1-10%

Car wash 50%

TKPP Detergents, industrial cleaners, surfactant (cleaning products) 5-20%

Food 1%

Water treatment 1-30%

Metal finishing 25%

Paints 1%

Pulp and paper 5%

Household and industrial type products 25%

Buffering agent in compounding formulas 15%

Fertilizer, boiler descaling, dyeing, preservative N/A

Note.–N/A is reported if none of the responding firms reported cost share.

Source: Compiled from data submitted in response to Commission questionnaires.
 47 This is consistent with petitioners’ testimony that demand for fertilizers using technical-grade MKP decreased

in 2009 compared with 2008, but that demand for food-grade MKP was increasing. Conference transcript, pp. 87-88

(Schewe).

 48 Conference transcript, p. 114 (Schewe).

 49 Ibid.

 50 Conference transcript, p. 92 (Allen). Ms. Allen also noted decreased demand due to the recession, but stated

that, “. . . the recession has not had a great impact on our business because we are a commodity, we are not

something that is tied to any luxury items.” Ibid. 

 51 Conference transcript, p. 84 (Sexton). “The European Commission, the Executive, is currently considering the

possibility of introducing an EU-wide ban on phosphates in all consumer detergents.” Chemical profile: sodium

tripolyphosphate, ICIS, as reported in petitioners’ postconference brief, exh. 19, and found at:

http://www.icis.com/Articles/2007/10/08/9067793/Chemical-profile-sodium-tripolyphosphate.html, retrieved

(continued...)

II-12

From 2006 to 2008, apparent U.S. consumption of DKP increased by *** percent, MKP

increased by *** percent, STPP decreased by *** percent, and TKPP decreased irregularly by ***

percent on a quantity basis. Between interim 2008 and interim 2009, apparent U.S. consumption of DKP

was *** percent higher, MKP was *** percent lower,47 STPP was *** percent lower, and TKPP was ***

percent lower. ***. Importers’ responses were more varied, though a plurality reported demand for

STPP was declining. Responses are shown in the table II-4.

Table II-4

DKP, MKP, STPP, and TKPP: Producer and importer perceptions regarding DKP, MKP, STPP, and

TKPP demand 

Product

Producers Importers

Increase No change Decrease Fluctuated Increase No change Decrease Fluctuated

DKP 0 *** *** 0 3 4 1 3

MKP 0 *** *** 0 1 8 4 3

STPP 0 *** *** 0 4 6 11 2

TKPP 0 *** *** 0 2 9 3 3

Source: Compiled from data submitted in response to Commission questionnaires.

The most common reason reported for reduced demand for STPP was changes in state

environmental regulations that will eliminate its use in automatic dishwasher (“ADW”) detergents in

2010. In July 2010, automatic dishwashing detergents will no longer contain phosphates. This will have

the effect of decreasing domestic demand for STPP, with petitioners estimating a decline of more than 50

percent by 2010 or 2011. At that point, demand for food-grade and tech-grade STPP reportedly may be

about equal.48 One source for chemical market information source estimates that the industrial and

institutional cleaners (which will not face the phosphate ban) comprise 25 percent of STPP demand and

ADW comprises 23 percent. Industrial and institutional cleaners will also demand less STPP as

formulations become more environmentally-friendly.49 From August 2008 to August 2009, Prayon

estimated that it has experienced a 10-million pound decrease in its sales of STPP, mostly due to lower

demand in the ADW market.50 Petitioners also assert that other countries will likely ban phosphates in

their ADW detergents, though this may not occur for three to five years in Europe.51 British Sulphur
 51 (...continued)

October 30, 2009.

 52 Petitioners’ postconference brief, exh. 14. Petitioners note, however, that this report may not fully account for

“recent initiatives in numerous countries and regions to ban or limit the use of STPP in consumer automatic

dishwasher detergents” submitted in other exhibits. Petitioners’ postconference brief, p. 42 and exhs. 15 and 16.

 53 Conference transcript, pp. 115-116 (Schewe).

 54 Innophos’s 2008 Annual Report, submitted in respondents’ postconference brief as exh. 2.

II-13

Consultants’ September 2007 forecast for STPP, however, estimates that despite the U.S. ban decreasing

U.S. apparent consumption by nearly *** percent between 2006 and 2012, worldwide apparent

consumption for STPP will increase by *** percent between 2009 and 2012.52 

At the staff conference, a witness for ICL forecasted demand growth for particular market

segments and phosphate salts: 2.5 percent for food-grade STPP, TKPP at the rate of population growth,

MKP for paints and coatings at 3 percent, MKP in food and beverage applications (Powerade/Gatorade)

at greater than 3 percent, tech-grade MKP for fertilizers at 3.5 percent after this year’s decline, DKP for

construction at 3 percent, and DKP for “convenience foods” at greater than 3 percent.53

When asked about new uses for the phosphate salts, importers’ responses included DKP for meat

processing and MKP for cement applications (if the price is lower than alternatives). Some importers

reported that TKPP use in cleansers was declining, and others reported that demand in the overall

economy would influence demand for phosphate salts. 

Cost Share

Phosphate salts are used in many different applications with wide ranging cost shares, as shown

in table II-3. Three importers and *** reported cost shares of DKP in their end uses, six importers and

*** reported cost shares of MKP in their end uses, seven importers and *** reported cost shares of STPP

in their end uses and five importers and *** reported cost shares for TKPP. Innophos reported that, “due

to the low cost of specialty phosphates relative to customers’ total production cost, and the high

functional value of specialty phosphates in customers’ products,” customers are often reluctant to switch

suppliers.54

Substitute Products

Producers and importers were asked to list substitutes and the applications in which they are used. 

*** and one or more importer listed substitutes that could be used in a number of applications as reported

in table II-5.
II-14

Table II-5

DKP, MKP, STPP, and TKPP: Applications and substitute products as reported by producers and

importers

Product

Producers Importers

Yes No Yes No Applications and substitute products reported

DKP *** *** 1 17

Antifreeze - phosphoric acid.

Baked goods - ammonium bicarbonate.

MKP *** *** 4 19

Cement - ammonium phosphates, potassium citrate.

Agriculture - potassium hydroxide, phosphoric acid, MAP

(monoammonium phosphate), KOH, KCL.

Dog Food - Almost any phosphate.

STPP *** *** 11 15

Detergent - zeolites, surfactants, citrates, sodium citrates, silicas,

sodium silicates, sodium carbonate.

Sequestration - polymers.

Meat Curing - erythorbates.

Cement and Concrete - any binder.

Water Treatment - phosphoric acid, sodium hexametaphosphate.

TKPP *** *** 4 22

Water Treatment - phosphoric acid, sodium hexametaphosphate.

Cleaners - zeolites, silicas, citrates.

Sequestration - polymers.

Source: Compiled from data submitted in response to Commission questionnaires.

Most producers and most importers reported that changes in the price of substitutes had not

affected the price of certain phosphate salts as shown in table II-6.

Table II-6

DKP, MKP, STPP, and TKPP: Effect of price changes of substitutes on phosphate salts, as

reported by producers and importers 

DKP MKP STPP TKPP

Producer Substitutes affect price *** *** *** ***

Substitutes do not affect price *** *** *** ***

Importer Substitutes affect price 2 4 0 1

Substitutes do not affect price 19 20 19 20

Source: Compiled from data submitted in response to Commission questionnaires.

Both importers that reported that substitutes influence the price of DKP reported shortages as the

reason that substitutability affected price. One importer reported that end users can use MAP as a

substitute for MKP at some sacrifice of function and with a two-month changeover period. Another

importer reported that large end users typically make their own MKP from potassium hydroxide and
 55 The one importer reporting that substitutes for TKPP had affected its price did not report how this occurred;

rather it reported that increases in prices of TKPP caused an increase in the price of the compound product produced

from TKPP.

 56 Conference transcript, p. 185 (Wei) and pp. 72-73 (Cannon). Petitioners identified 14 Chinese producers of

food-grade STPP. Petitioners’ postconference brief, exh. 17.

 57 Conference transcript. p. 72 (Cannon), p. 163 (Metzger), and p. 203 (Wei).

 58 Respondent’s postconference brief, p. 8, and ***.

 59 Conference transcript, p. 131 (Sexton).

 60 ***.

 61 Conference transcript, p. 159 (Metzger) and ***.

 62 Respondent Wenda was requested to submit a tabulation of accounts at which it is presently undergoing

qualification, but did not do so in its postconference brief.

 63 Questionnaire respondents were requested to separate their answers if their responses differed by product. No

producer or importer reported lead times differing by product.

II-15

phosphoric acid, while a third reported that if MKP prices increase, end users increase the cost of their

products. For STPP, ***.55

Most responding importers *** reported that substitutes had not changed since 2006. Two of 20

responding importers, however, reported that substitutes changed for STPP and one of the responding

importers reported substitutes changed for TKPP. These firms reported polymers were new substitutes

for STPP and TKPP for sequestration, and silicates were new substitutes for STPP. 

SUBSTITUTABILITY ISSUES

The degree of substitution between domestic and imported products depends upon such factors as

relative prices, quality, and conditions of sale (e.g., price discounts/rebates, lead times between order and

delivery dates, payment terms, product services, etc.). Based on producer and importer questionnaire

responses, staff believes that on the whole, there is likely to be a high degree of substitution between

phosphate salts produced in the United States and those produced in China. Technical-grade phosphate

salts are likely to have a higher degree of substitution than food-grade phosphate salts due to the stricter

guidelines that need to be met for the food-grade products and, therefore, the fewer Chinese factories

potentially capable of producing them.56 Food-grade phosphate salts can be substituted for technical-grade

phosphate salts, but not vice versa.57 Also, purchasers reportedly may be less willing to purchase foodgrade STPP from China due to recent health and safety issues like melamine found in pet food,58 although,

petitioners contend, increasing cost pressures may make some of these pressures abate somewhat.59 ***.60

For food-grade phosphate salts there is reportedly a long qualification process, estimated to be about one

year or more.61 62

Lead Times63

The three responding producers reported selling *** percent of their phosphate salts from

inventories, and the remaining *** percent on a produced-to-order basis. Producers’ lead times when

selling out of inventory ranged from *** days to *** weeks, while lead times for produced-to-order

phosphate salts ranged from *** days to *** weeks. Twenty-one of the 29 responding importers selling

from U.S. inventories reported selling most their product from U.S. inventories, with 14 of these selling

more than 80 percent from U.S. inventories. Lead times from importer inventories ranged from 1 to 10

days, with 12 importers reporting lead times of three days or less. Thirteen importers reported sales from

overseas inventories, with four of these making more than 80 percent of their sales from these overseas
II-16

inventories, and the remaining nine selling half or less from overseas inventories. Lead times from

importers’ overseas inventories ranged from 15 days to 10 weeks, with 11 importers reporting lead times

ranging from 4 to 8 weeks. Seventeen importers reported selling product that is produced to order; nine

of these sold the majority of their product produced to order, and five sold all their product on a

produced-to-order basis. Importers’ lead times for produced-to-order phosphate salts ranged from 15

days to 4 months, with 10 importers reporting lead times of 2 months or longer.

Comparisons of Domestic Products, Subject Imports, and Nonsubject Imports

Producers and importers were asked to assess the interchangeability of phosphate salts produced

in the United States, China, and nonsubject countries; responses are presented in Table II-7. ***. ***. 

***.

Table II-7

DKP, MKP, STPP, and TKPP: U.S. producers’ and importers’ perceived degree of

interchangeability of products produced in the United States and in other countries1

Country comparison

DKP MKP

U.S. producers U.S. importers U.S. producers U.S. importers

A F S N A FSN A F S N A F S N

U.S. vs. China *** *** *** *** 2 2 4 0 *** *** *** *** 3 6 4 1(2)

U.S. vs. other countries *** *** *** *** 2 4 3 0 *** *** *** *** 4 4 4 0

China vs. other countries *** *** *** *** 2 1 4 0 *** *** *** *** 4 2 5 0

STPP TKPP

U.S. producers U.S. importers U.S. producers U.S. importers

A F S N A FSN A F S N A F S N

U.S. vs. China *** *** *** *** 4 7 8 0 *** *** *** *** 3 7 5 0

U.S. vs. other countries *** *** *** *** 3 5 5 1 *** *** *** *** 3 3 3 0

China vs. other countries *** *** *** *** 2 3 6 0 *** *** *** *** 1 2 4 0

 1 Producers and importers were asked if certain phosphate salts produced in the United States and in other

countries are used interchangeably and to what degree.

 2

 Although *** responded “no” to this combination, its response indicated that these were never

interchangeable. *** responded “yes” for all other country combinations for MKP and for all country combinations

for STPP and TKPP. These “yes” responses have not be included in the table.

Note.--“A” = Always, “F” = Frequently, “S” = Sometimes, and “N” = Never.

Source: Compiled from data submitted in response to Commission questionnaires.

Most responding importers reported that all four products from all sources were either

“frequently” or “sometimes” interchangeable. Importers typically reported that the U.S. product may be

superior for food uses or that changing manufacturers may require qualification. Additionally, one

reported that U.S. producers do not produce MKP and one reported U.S. produces only food grade

product which is not interchangeable with technical grade from China. Other reported differences which

limited interchangeability included particle size, solubility, moisture content, density, and trace elements.
II-17

In addition, producers and importers were asked to assess how often differences other than price

were significant in sales of phosphate salts from the United States, China, and nonsubject countries (table

II-8). ***. The majority of importers reported that differences other than price were either “frequently”

or “sometimes” important for all product and all country pairs with the exception of TKPP for the

nonsubject vs Chinese product. Differences reported include: lead times, logistics problems, technical

support, European product being of better quality than Chinese product, variation in quality among the

Chinese producers, product requiring qualification, Chinese product had problems with its solubility, and

granulation size and U.S. MKP is food grade while Chinese MKP is technical which can not be used by

many customers. In addition, one importer noted that the U.S. product was better quality. 

Table II-8

DKP, MKP, STPP, and TKPP: U.S. producers’ and importers’ perceived importance of factors other

than price in sales of product produced in the United States and in other countries1

Country comparison

DKP MKP

U.S. producers U.S. importers U.S. producers U.S. importers

AFSNAFSNAFSNAFSN

U.S. vs. China *** *** *** *** 2 2 3 1 *** *** *** *** 5 1 7 2

U.S. vs. other countries *** *** *** *** 3 2 3 1 *** *** *** *** 2 1 7 2

China vs. other countries *** *** *** *** 2 1 3 1 *** *** *** *** 1 1 8 2

STPP TKPP

U.S. producers U.S. importers U.S. producers U.S. importers

AFSNAFSNAFSNAFSN

U.S. vs. China *** *** *** *** 4 2 10 3 *** *** *** *** 1 1 8 3

U.S. vs. other countries *** *** *** *** 2 1 7 3 *** *** *** *** 3 2 9 2

China vs. other countries *** *** *** *** 1 1 8 2 *** *** *** *** 1 1 4 3

 1 Producers and importers were asked if differences other than price between certain phosphate salts produced

in the United States and those produced in other countries were a significant factor in their firms’ sales of salts.

Note.--“A” = Always, “F” = Frequently, “S” = Sometimes, and “N” = Never.

Source: Compiled from data submitted in response to Commission questionnaires.

 1

 The Commission did not receive a response from PCS Purified Phosphates (“PCS”), which was listed as the

only other U.S. producer in the petition. PCS produces TKPP. ***.

III-1

PART III: U.S. PRODUCERS’ PRODUCTION, SHIPMENTS, AND

EMPLOYMENT

The Commission analyzes a number of factors in making injury determinations (see 19 U.S.C. §§

1677(7)(B) and 1677(7)(C)). Information on the alleged subsidy and margin of dumping was presented

earlier in this report and information on the volume and pricing of imports of the subject merchandise is

presented in Parts IV and V. Information on the other factors specified is presented in this section and/or

Part VI and (except as noted) is based on the questionnaire responses of three firms that accounted for the

large majority (as much as *** percent) of U.S. production of the phosphate salts at issue in this

proceeding during 2008.1

U.S. PRODUCERS

The petition identified four U.S. producers of the phosphate salts at issue in this proceeding. The

Commission sent producer questionnaires to the companies identified in the petition as well as 10

companies listed as possible producers in ***. The Commission received completed questionnaire

responses from three of the four producers identified in the petition.

Presented in table III-1 is a list of current domestic producers of phosphate salts and each

company’s position on the petition, production location(s), firm ownership, and share of reported

production of phosphate salts in 2008.

Table III-1

DKP, MKP, STPP, and TKPP: U.S. producers, positions on the petition, firm ownership, U.S.

production locations, and shares of 2008 reported U.S. production

Firm

Position

on

petition

Firm

ownership

U.S.

production

location(s)

Quantities and share of production

DKP MKP STPP TKPP

1,000

lbs. %

1,000

lbs. %

1,000

lbs. %

1,000

lbs. %

ICL Petitioner

Israel

Chemical

Limited

Lawrence, KS

St. Louis, MO

Carteret, NJ *** *** *** *** *** *** *** ***

PCS and

Innophos1 *** *** (2

) ----- ----- ----- ----- ----- ----- *** ***

Prayon Petitioner

Prayon,

S.A. Augusta, GA ----- ----- ----- ----- *** *** *** ***

Totals *** *** *** *** *** *** *** ***

 1

 ***.

 2

 PCS produces TKPP in Cincinnati, OH ***.

Note.–Because of rounding, shares may not total to 100.0 percent.

Source: Compiled from data submitted in response to Commission questionnaires.
 2

 U.S. Producers’ Questionnaire (question I-6).

III-2

All three U.S. producers are related to foreign producers of the phosphate salts at issue in this

proceeding2

 but none are related to U.S. importers of DKP, MKP, STPP, or TKPP from China. In

addition, as discussed in greater detail below, two U.S. producers directly import certain phosphate salts

and one purchases certain phosphate salts from U.S. importers.

U.S. CAPACITY, PRODUCTION, AND CAPACITY UTILIZATION

U.S. producers’ capacity, production, and capacity utilization data for DKP, MKP, STPP, and

TKPP are presented in tables III-2 through III-5, respectively. As noted by ICL in its questionnaire

response, “***.”

Table III-2

DKP: U.S. producers’ capacity, production, and capacity utilization, 2006-08, January-June 2008,

and January-June 2009

* * * * * * *

Table III-3

MKP: U.S. producers’ capacity, production, and capacity utilization, 2006-08, January-June 2008,

and January-June 2009

* * * * * * *

Table III-4

STPP: U.S. producers’ capacity, production, and capacity utilization, 2006-08, January-June 2008,

and January-June 2009

* * * * * * *

Table III-5

TKPP: U.S. producers’ capacity, production, and capacity utilization, 2006-08, January-June 2008,

and January-June 2009

* * * * * * *

U.S. PRODUCERS’ SHIPMENTS

Data on U.S. producers’ shipments of DKP, MKP, STPP, and TKPP are presented in tables III-6

through III-9. 

Table III-6

DKP: U.S. producers’ shipments, by types, 2006-08, January-June 2008, and January-June 2009

* * * * * * *
III-3

Table III-7

MKP: U.S. producers’ shipments, by types, 2006-08, January-June 2008, and January-June 2009

* * * * * * *

Table III-8

STPP: U.S. producers’ shipments, by types, 2006-08, January-June 2008, and January-June 2009

* * * * * * *

Table III-9

TKPP: U.S. producers’ shipments, by types, 2006-08, January-June 2008, and January-June 2009

* * * * * * *

U.S. PRODUCERS’ INVENTORIES

Tables III-10 through III-13 present end-of-period inventories for DKP, MKP, STPP, and TKPP,

respectively. Inventories of DKP and MKP fluctuated in a generally downward trend that was more

pronounced for DKP than for MKP. Conversely, inventories of STPP and TKPP fluctuated in a generally

upward trend, with *** increases in absolute and relative inventory levels in 2008.

Table III-10

DKP: U.S. producers’ end-of-period inventories, 2006-08, January-June 2008, and January-June

2009

* * * * * * *

Table III-11

MKP: U.S. producers’ end-of-period inventories, 2006-08, January-June 2008, and January-June

2009

* * * * * * *

Table III-12

STPP: U.S. producers’ end-of-period inventories, 2006-08, January-June 2008, and January-June

2009

* * * * * * *

Table III-13

TKPP: U.S. producers’ end-of-period inventories, 2006-08, January-June 2008, and January-June

2009

* * * * * * *

U.S. PRODUCERS’ IMPORTS AND PURCHASES

U.S. producers’ imports and purchases are presented in tables III-14 through III-17. ***. ***.

***. 
III-4

Table III-14

DKP: U.S. producers’ imports and purchases, 2006-08, January-June 2008, and January-June 2009

* * * * * * *

Table III-15

MKP: U.S. producers’ imports and purchases, 2006-08, January-June 2008, and January-June

2009

* * * * * * *

Table III-16

STPP: U.S. producers’ imports and purchases, 2006-08, January-June 2008, and January-June

2009

* * * * * * *

Table III-17

TKPP: U.S. producers’ imports and purchases, 2006-08, January-June 2008, and January-June

2009

* * * * * * *

U.S. EMPLOYMENT, WAGES, AND PRODUCTIVITY

The U.S. producers’ aggregate employment data for DKP, MKP, STPP, and TKPP are presented

in tables III-18 through III-21. Employment for the production of DKP and MKP in terms of workers and

hours worked trended upwards between 2006 and 2008, as did hourly and total wages, although a

declining trend in productivity contributed to rising unit labor costs, which became more pronounced in 

January-June 2009. Employment for the production of STPP and TKPP, in contrast, decreased between

2006 and 2008, as did wages paid (despite higher hourly wages). Employment measures were lower in

January-June 2009 than in January-June 2008, and exhibited the same combination of lower productivity

and higher unit labor costs.

Table III-18

DKP: U.S. producers’ employment-related data, 2006-08, January-June 2008, and January-June

2009

* * * * * * *

Table III-19

MKP: U.S. producers’ employment-related data, 2006-08, January-June 2008, and January-June

2009

* * * * * * *

Table III-20

STPP: U.S. producers’ employment-related data, 2006-08, January-June 2008, and January-June

2009

* * * * * * *
III-5

Table III-21

TKPP: U.S. producers’ employment-related data, 2006-08, January-June 2008, and January-June

2009

* * * * * * *

 1

 The Commission sent questionnaires to those firms identified in the petition, along with firms that, based on a

review of data provided by U.S. Customs and Border Protection (“Customs”), may have imported at least 100,000

pounds or more than *** percent of total imports under HTS subheadings 2835.24.00, 2835.39.10, and 2835.31.00

in any one year since 2006.

 2

 “Heading 2835.24.00, HTSUS, includes MKP and DKP, as well as another potassium phosphate, Tri-potassium

phosphate (“TKP”). MKP and DKP are the most significant imports. The petitioners have not encountered imports

of TKP from China in the market, and ships’ manifest data indicate that there have been only erratic, small-volume

imports. All or nearly all imports of potassium phosphate from China are therefore MKP or DKP.” Petition, p. 18.

 3

 “Heading 2835.39.1000, HTSUS, includes TKPP, as well as Potassium tri-polyphosphate (“KTPP”). However,

TKPP is the more important potassium polyphosphate in commercial terms. Indeed, TKPP is the only potassium

polyphosphate known to be imported from China.” Petition, pp. 17-18.

 4

 At least one importer of TKPP, ***, reported importing TKPP under a different HTS subheading (***).

IV-1

PART IV: U.S. IMPORTS, APPARENT U.S. CONSUMPTION, AND

MARKET SHARES

U.S. IMPORTERS

Importer questionnaires were sent to 102 firms believed to be importers of subject phosphate

salts, as well as to all U.S. producers of phosphate salts.1

 Usable questionnaire responses were received

from 44 companies, representing *** percent of imports of DKP and MKP from China and *** percent of

imports from nonsubject countries under HTS subheading 2835.24.00;2

 *** percent of imports of STPP

from China and *** percent of imports from nonsubject countries under HTS subheading 2835.31.00; and

substantially exceeding the level of imports of TKPP from China and substantially less than the level of

imports from nonsubject countries indicated under HTS subheading 2835.39.103 4

 in 2008. However,

with respect to imports from nonsubject countries, staff received questionnaires from companies

representing the large majority of imports under the relevant HTS subheading, indicating that much of the

nonsubject import volume consisted of a chemical other than TKPP. Table IV-1 lists all responding U.S.

importers of DKP, MKP, STPP, and TKPP from China and other sources. 

Table IV-1 

DKP, MKP, STPP, and TKPP: U.S. importers, January 2006 - June 2009 aggregated

Firm

Phosphate salt

DKP MKP STPP TKPP

ACS Chemical *** *** *** ***

American International Chemical

Co. *** *** *** ***

BK Giulini *** *** *** ***

Brenntag North America, Inc. *** *** *** ***

Buddenheim USA, Inc. *** *** *** ***

Cascade Columbia Distribution *** *** *** ***

Chem One Ltd. *** *** *** ***

Chementry Industries, Inc. *** *** *** ***

Chemical Specialty Group *** *** *** ***

Table continued on the following page.
IV-2

Table IV-1 – Continued

DKP, MKP, STPP, and TKPP: U.S. importers, January 2006 - June 2009 aggregated

Firm

Phosphate salt

DKP MKP STPP TKPP

Compass Chemical International LLC *** *** *** ***

ChemSol, LLC *** *** *** ***

CST-SurTec, Inc. *** *** *** ***

Global Chemical Resources, Inc. *** *** *** ***

Grow More, Inc. *** *** *** ***

Haifa Nutritech, Inc. *** *** *** ***

Innophos, Inc. *** *** *** ***

K.G. International, Inc. *** *** *** ***

Kaltron-Pettibone *** *** *** ***

The Korex Corporation *** *** *** ***

Laszlo Corporation *** *** *** ***

Lidochem, Inc. *** *** *** ***

Mann Chemical LLC *** *** *** ***

Mars Petcare US *** *** *** ***

Martrex Inc. *** *** *** ***

Mexichem America, Inc. *** *** *** ***

Nealanders Food Ingredients *** *** *** ***

Omni-Chem 136, LLC *** *** *** ***

Prayon, Inc. *** *** *** ***

Quimir SA de CV *** *** *** ***

Reckitt Benckiser, Inc. *** *** *** ***

Rotem BKG LLC *** *** *** ***

Royal Canin USA *** *** *** ***

S and G Resources, Inc. *** *** *** ***

Sampco, Inc. *** *** *** ***

SBC Group, Inc. (Nutrichem) *** *** *** ***

Shanco International, Inc. *** *** *** ***

Silver Fern Chemical, Inc. *** *** *** ***

Summit Chemicals, Inc. *** *** *** ***

Univar USA, Inc. *** *** *** ***

V.L. Clark Chemical Co., Inc. *** *** *** ***

Wego Chemical and Mineral Corp. *** *** *** ***

Wenda America, Inc. *** *** *** ***

White Cross Laboratories, Inc. *** *** *** ***

Zhong Ya Chemical (USA) Ltd. *** *** *** ***

Note.– For purposes of this table “other” means unspecified sources other than China.
IV-3

U.S. IMPORTS

Tables IV-2 through IV-5 present data for U.S. imports of DKP, MKP, STPP, and TKPP,

respectively, from China and all other sources.

Table IV-2

DKP: U.S. imports, by sources, 2006-08, January-June 2008, and January-June 2009

* * * * * * *

Table IV-3

MKP: U.S. imports, by sources, 2006-08, January-June 2008, and January-June 2009

* * * * * * *

Table IV-4

STPP: U.S. imports, by sources, 2006-08, January-June 2008, and January-June 2009

Source

Calendar year January-June

2006 2007 2008 2008 2009

Quantity (1,000 lbs. dry weight)

China 18,828 17,153 25,969 7,606 35,550

Nonsubject 264,891 251,500 257,609 130,191 49,533

Total 283,719 268,653 283,579 137,797 85,083

Value (1,000 dollars)

1

China 7,075 6,449 17,255 4,079 18,230

Nonsubject 104,563 98,846 153,343 63,173 35,371

Total 111,639 105,294 170,598 67,252 53,601

Unit value (per pound dry weight)

1

China $0.38 $0.38 $0.66 $0.54 $0.51

Nonsubject 0.39 0.39 0.60 0.49 0.71

Average 0.39 0.39 0.60 0.49 0.63

Share of quantity (percent)

China 6.6 6.4 9.2 5.5 41.8

Nonsubject2 93.4 93.6 90.8 94.5 58.2

Total 100.0 100.0 100.0 100.0 100.0

Share of value (percent)

China 6.3 6.1 10.1 6.1 34.0

Nonsubject2 93.7 93.9 89.9 93.9 66.0

Total 100 100.0 100.0 100.0 100.0

 1 Landed, U.S. port of entry, duty-paid.

 2

 The majority of nonsubject imports of STPP are imported from Canada, Mexico, Israel, and Germany. 

Source: Compiled from official Commerce statistics.
 5

 U.S. imports of the potassium phosphate salts do not enter the United States under unique HTS statistical

reporting numbers; therefore quarterly import data are not available for DKP, MKP, or TKPP.

IV-4

Table IV-5

TKPP: U.S. imports, by sources, 2006-08, January-June 2008, and January-June 2009

* * * * * * *

Table IV-6 presents quarterly data of U.S. imports of STPP.5

Table IV-6

STPP: U.S. imports, by principal sources, by quarter, January 2006 - June 2009

Source Q1 Q2 Q3 Q4 Total

Quantity (1,000 pounds)

2006:

China 3,634 5,756 4,546 4,892 18,828

Canada 24,271 20,276 23,695 23,254 91,496

Mexico 34,472 35,264 24,919 42,873 137,527

All others 11,124 7,956 7,191 9,597 35,868

Total 73,501 69,252 60,350 80,616 283,719

2007:

China 4,981 4,533 3,683 3,956 17,153

Canada 25,236 24,161 20,712 22,600 92,709

Mexico 26,599 30,181 37,171 30,331 124,282

All others 8,764 10,251 6,097 9,398 34,509

Total 65,580 69,126 67,663 66,284 268,653

2008:

China 1,474 6,133 7,926 10,437 25,969

Canada 23,039 21,906 22,129 19,451 86,524

Mexico 39,374 29,822 30,746 32,116 132,059

All others 6,775 9,275 8,677 14,299 39,026

Total 70,662 67,136 69,478 76,304 283,579

2009:

China 17,604 17,946 -- -- 35,550

Canada 17,078 16,251 -- -- 33,329

Mexico 7,400 3,693 -- -- 11,093

All others 1,752 3,358 -- -- 5,110

Total 43,834 41,249 -- -- 85,083

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from official Commerce statistics.
 6

 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)).

 7

 Section 771(24) of the Act (19 U.S.C. § 1677(24)).

IV-5

NEGLIGIBILITY

The statute requires that an investigation be terminated without an injury determination if imports

of the subject merchandise are found to be negligible.6

 Negligible imports are generally defined in the

Tariff Act of 1930, as amended, as imports from a country of merchandise corresponding to a domestic

like product where such imports account for less than 3 percent of the volume of all such merchandise

imported into the United States in the most recent 12-month period for which data are available that

precedes the filing of the petition or the initiation of the investigation. However, if there are imports of

such merchandise from a number of countries subject to investigations initiated on the same day that

individually account for less than 3 percent of the total volume of the subject merchandise, and if the

imports from those countries collectively account for more than 7 percent of the volume of all such

merchandise imported into the United States during the applicable 12-month period, then imports from

such countries are deemed not to be negligible.7

 Imports of DKP from China accounted for *** percent

of total imports of DKP by quantity from July 2008-June 2009. Imports of MKP from China accounted

for *** percent of total imports of MKP by quantity from July 2008-June 2009. Imports of STPP from

China accounted for 23.4 percent of total imports of STPP by quantity from July 2008-June 2009. 

Imports of TKPP from China accounted for *** percent of total imports of TKPP by quantity from July

2008-June 2009.

APPARENT U.S. CONSUMPTION

Data concerning apparent U.S. consumption of DKP, MKP, STPP, and TKPP are shown in tables

IV-7 through IV-10, respectively.

Table IV-7

DKP: U.S. shipments of domestic product, U.S. shipments of imports, and apparent U.S.

consumption, 2006-08, January-June 2008, and January-June 2009

* * * * * * *

Table IV-8

MKP: U.S. shipments of domestic product, U.S. shipments of imports, and apparent U.S.

consumption, 2006-08, January-June 2008, and January-June 2009

* * * * * * *

Table IV-9

STPP: U.S. shipments of domestic product, U.S. imports, and apparent U.S. consumption, 2006-

08, January-June 2008, and January-June 2009

* * * * * * *
IV-6

Table IV-10

TKPP: U.S. shipments of domestic product, U.S. shipments of imports, and apparent U.S.

consumption, 2006-08, January-June 2008, and January-June 2009

* * * * * * *

U.S. MARKET SHARES

U.S. market share data for DKP, MKP, STPP, and TKPP are presented in tables IV-11 through

IV-14.

Table IV-11

DKP: U.S. consumption and market shares, 2006-08, January-June 2008, and January-June 2009

* * * * * * *

Table IV-12

MKP: U.S. consumption and market shares, 2006-08, January-June 2008, and January-June 2009

* * * * * * *

Table IV-13

STPP: U.S. consumption and market shares, 2006-08, January-June 2008, and January-June 2009

* * * * * * *

Table IV-14

TKPP: U.S. consumption and market shares, 2006-08, January-June 2008, and January-June 2009

* * * * * * *

RATIO OF IMPORTS TO U.S. PRODUCTION

Information concerning the ratio of imports to U.S. production of DKP, MKP, STPP, and TKPP

is presented in tables IV-15 through IV-18, respectively.

Table IV-15

DKP: U.S. production, U.S. imports, and ratios of imports to U.S. production, 2006-08, JanuaryJune 2008, and January-June 2009

* * * * * * *

Table IV-16

MKP: U.S. production, U.S. imports, and ratios of imports to U.S. production, 2006-08, JanuaryJune 2008, and January-June 2009

* * * * * * *
IV-7

Table IV-17

STPP: U.S. production, U.S. imports, and ratios of imports to U.S. production, 2006-08, JanuaryJune 2008, and January-June 2009

* * * * * * *

Table IV-18

TKPP: U.S. production, U.S. imports, and ratios of imports to U.S. production, 2006-08, JanuaryJune 2008, and January-June 2009

* * * * * * *

 1

 “How should the STPP sector shake off development crisis?” China Chemical Reporter, December 6, 2007,

submitted as exh. 10 to Petitioners’ postconference brief. It should be noted that these estimates were generated

prior to the rapid increases in the prices of phosphoric acid and other inputs.

 2 See, e.g., Respondents’ postconference brief, pp. 16-17 and exh. 12, and 1-Hydroxyethylidene-1,

1-Diphosphonic Acid (HEDP) from China and India, Inv. Nos. 731-TA-1146-1147 (Final), USITC Publication 4072,

April 2009, p. 1.

 3

 Indices were calculated based on ***.

 4

 Conference transcript, p. 122 (Fyock).

 5

 Conference transcript, pp. 101-102 (Schewe).

V-1

 PART V: PRICING AND RELATED INFORMATION

FACTORS AFFECTING PRICES

Raw Material Costs

The primary raw materials used in the production of phosphate salts are phosphoric acid,

potassium hydroxide (for DKP, MKP, and TKPP), and soda ash or caustic soda (for STPP). In addition,

energy is needed to heat the chemical mixture to bring about the proper chemical reactions necessary to

produce the phosphate salts. Yellow phosphorous, the key ingredient in making phosphoric acid,

accounts for approximately 60 percent of the cost of producing STPP, and soda ash accounts for

approximately 25 percent.1

 As discussed in greater detail in Part VI of this report, these chemicals and

other raw materials accounted for *** percent of the total cost of goods sold (COGS) during 2006-08 for

DKP, *** percent for MKP, *** percent for STPP, and *** percent for TKPP. In the first half of 2009,

however, these shares rose to *** percent for DKP, *** percent for MKP, *** percent for STPP, and ***

percent for TKPP. 

The price of phosphoric acid began rising in 2008, partly due to increased demand for phosphates

used in corn and soybean fertilizer applications as federal biofuel mandates were being placed into effect.2

Prices for potassium hydroxide and caustic soda spiked in the first half of 2009 (figure V-1).3

 Though the

price of caustic soda increased *** percent at its peak, substitution for caustic soda is easily accomplished

based on market pricing, generally through the use of soda ash.4

 A three-month strike in Canada in late

2008 greatly reduced ICL’s potassium phosphate production and in response, ICL imported finished

product from sister companies in Brazil and Europe, and from China.5

 
 6

 Questionnaire respondents were requested to separate their answers if their responses differed by product;

unless noted, responses were generally applicable for each of the four chemicals.

 7

 The final importer reported that the Chinese supplier arranged transportation, apparently referring to its

international shipment.

 8

 Petitioners’ postconference brief, exh. 9.

 9

 Conference transcript, p. 30 (Schewe) and pp. 34-35 (Sexton).

V-2

Figure V-1

DKP, MKP, STPP, and TKPP: Indexed weighted quarterly U.S. input prices ***, January 2006-June

2009

* * * * * * *

U.S. Inland Transportation Costs6

The three responding U.S. producers reported that U.S. inland transportation costs ranged from

*** percent of the total delivered cost of phosphate salts. Importers reported U.S. inland transportation

costs that ranged from 1 to 20 percent, with 25 of the 32 responding importers reporting that U.S. inland

transportation costs ranged between 1 and 7 percent of the total delivered cost of phosphate salts.

*** reported that *** arranged delivery and *** reported that *** arranged delivery. Twentyeight of the 40 responding importers reported that they arranged delivery, 11 reported that the purchaser

did so, one importer reported that it and the purchaser arranged transportation.7

 Prayon and ICL reported

selling ***, while Innophos reported selling TKPP ***. Twenty of 34 responding importers reported

shipping from their storage facilities and the other 14 reported shipping from the point of importation.

The domestic producers reported shipping *** percent of their phosphate salts less than 100

miles, *** percent between 101 and 1,000 miles, and *** percent more than 1,000 miles. Thirty-four

importers reported shipping distances. Thirty-two importers reported selling within 100 miles of their

U.S. point of shipment, with 16 selling the majority within 100 miles and 13 others selling more than 80

percent within 100 miles. Thirty responding importers sold phosphate salts between 101 and 1,000 miles

of their point of shipment, 19 of these sold the majority of their salts in this range. Eighteen importers

reported selling phosphate salts over 1,000 miles from their U.S. point of shipment, with one of these

selling all of their product in this range and all others selling less than half in this range.

PRICING PRACTICES

Pricing Methods

All three producers reported selling phosphate salts using ***, while Prayon and ICL also sold

***. *** reported that ***. *** stated that ***. *** reported it used ***. Most importers, 36 of the 38

responding, reported transaction-by-transaction negotiations, 9 reported contracts, and 5 price lists. ICL

submitted eight price increase notices effective between October 1, 2007 and August 1, 2008.8

*** reported selling under ***. With the recent increases in raw material prices, representatives

from ICL and Prayon reported that pricing contracts will now only be for a maximum of 90 days, and

often the prices on those contracts can be renegotiated within that period.9

 Seven of the 37 responding

importers reported selling via long-term contracts, yet only one of these sold mainly via long-term

contracts. Twenty importers reported selling via short-term contracts, with 11 of these selling half or

more using short term contracts. The majority of importers (34) reported selling on the spot market, with

24 of these selling the majority of their product this way.
 10 Conference transcript, p. 30 (Schewe) and p. 35 (Sexton).

V-3

Four importers and *** reported typical terms for their long-term contracts. Three importers, ***

reported that their long-term contracts averaged 2 years, and one importer, ***, reported typical long-term

contracts lasting from 2 to 4 years long. All four importers, *** reported that contracts could be

renegotiated during the contract period. *** two importers reported that price was fixed by the contract

while two importers reported quantity was fixed by the contract. Two importers *** reported the

existence of meet-or-release clauses in their long-term contracts, while *** two importers reported the

long-term contracts did not contain meet-or-release clauses.

***. Twenty importers reported the length of their short-term contracts, ranging from one month

to one year in length. *** 12 of the 19 responding importers reported that short-term contracts could not

be renegotiated. *** three importers reported that their contracts fix price only, while *** 17 importers

reported that contracts fixed both price and quantity. *** five importers reported the existence of meetor-release clauses in their short-term contracts, while *** 15 importers reported their short-term contracts

typically do not contain these clauses.

Sales Terms and Discounts

*** and 31 of 39 responding importers reported that sales terms for phosphate salts are net 30

days. The other eight importers used a range of methods of payment including net 5, 10, 45, 60 or net 30,

with half of their payment upon placement of an order and the other half upon delivery. *** reported

***. ICL and Prayon both use “support pricing” for sales to a specific end-user if there is lower priced

competition for the sale.10 Twenty-seven importers reported offering no discounts, seven reported

quantity discounts, three reported annual volume discounts, two reported early payment discounts, one

each reported truck load pricing, discounts to meeting its competition, and *** reported distributor

discounts of 5-10 percent. 

*** three importers reported selling on both a delivered and f.o.b. basis. *** 19 importers

reported selling on a delivered basis, 16 importers reported selling on an f.o.b. basis, and one reported

selling f.o.b. China.

PRICE DATA

The Commission asked U.S. producers and importers of phosphate salts to provide quarterly data

for the total quantity and f.o.b. value of phosphate salts that was shipped to unrelated customers in the

U.S. market during the period January 2006 to June 2009. The products for which pricing data were

requested are as follows:

Product 1. —Dipotassium phosphate (DKP), anhydrous, food grade, whether granular or

powder and regardless of packaging size

Product 2.—Monopotassium phosphate (MKP), anhydrous, technical grade, whether

granular or powder and regardless of packaging size

Product 3.—Sodium tripolyphosphate (STPP), anhydrous, food grade, whether granular or

powder and regardless of packaging size

Product 4.—Sodium tripolyphosphate (STPP), anhydrous, technical grade, whether

granular or powder and regardless of packaging size
 11 Data reported on a quantity basis.

 12 Due to the large nonsubject share of sales in these markets, quantity data for nonsubject countries as well as

China and the United States are presented graphically in appendix D. As discussed in Part IV of this report, imports

from nonsubject countries comprised a substantial share of overall imports. 

In addition, during the last three quarters for which data were collected, there is a large increase in the quantities

of sales of Chinese technical-grade STPP. This is accounted for by sales of imported Mexican technical-grade STPP

***. Innophos has an STPP plant in Mexico, as does Innophos’s largest customer, Quimir. In January 2009,

Quimir, a division of Mexichem, closed its largest STPP plant, which accounted for about 50 percent of its STPP

capacity. Innophos’s 2008 Annual Report, submitted as exh. 2 to respondents’ postconference brief. 

V-4

Product 5.—Tetrapotassium pyrophosphate (TKPP), anhydrous, food grade, whether

granular or powder and regardless of packaging size

Product 6.—Tetrapotassium pyrophosphate (TKPP), anhydrous, technical grade, whether

granular or powder and regardless of packaging size

Three U.S. producers provided usable pricing data for sales of the requested products including

one for DKP and MKP, two for STPP, and three for TKPP. Twenty-eight importers reported pricing data

for sales of these pricing products from China including 8 for DKP, 12 for MKP, 19 for STPP, and 13 for

TKPP. Fifteen importers reported pricing product data for product from nonsubject countries including 6

for DKP, 7 for MKP, 8 for STPP, and 2 for TKPP. Not all firms reported pricing for all products for all

quarters. Pricing data for the six products reported by these firms, shown in tables V-1 to V-6 and figures

V-2 to V-7, accounted for *** percent of U.S. producers’ U.S. shipments of DKP, *** percent for MKP,

*** percent for STPP, and *** percent for TKPP.11 Pricing data for product from China accounted for

*** percent of U.S. imports of DKP from China from January 2006 to June 2009, *** percent for MKP,

*** percent for STPP, and *** percent for TKPP.12 

Table V-1

DKP: Weighted-average f.o.b. prices and quantities of domestic and imported product 1, and

margins of underselling and (overselling), by quarters, January 2006-June 2009 

* * * * * * *
V-5

Table V-2

MKP: Weighted-average f.o.b. prices and quantities of domestic and imported product 2,1

 and

margins of underselling, by quarters, January 2006-June 2009 

Period

United States China

Price

(per pound)

Quantity

(pounds)

Price

(per pound)

Quantity

(pounds)

Margin

(percent)

2006:

 January-March $*** *** $0.44 545,095 ***

 April-June *** *** 0.44 259,059 ***

 July-September *** *** 0.47 308,851 ***

 October-December *** *** 0.46 204,319 ***

2007:

 January-March *** *** *** *** ***

 April-June *** *** 0.44 484,055 ***

 July-September *** *** *** *** ***

 October-December *** *** 0.45 155,842 ***

2008:

 January-March *** *** 0.46 254,550 ***

 April-June *** *** *** *** ***

 July-September *** *** 0.98 1,548,297 ***

 October-December *** *** 1.13 1,958,336 ***

2009:

 January-March *** *** *** *** ***

 April-June *** *** 0.70 931,200 ***

 1 Product 2.—Monopotassium phosphate (MKP), anhydrous, technical grade, whether granular or powder and

regardless of packaging size.

Source: Compiled from data submitted in response to Commission questionnaires.
V-6

Table V-3

STPP: Weighted-average f.o.b. prices and quantities of domestic and imported product 3,1

 and

margins of underselling and (overselling), by quarters, January 2006-June 2009 

Period

United States China

Price

(per pound)

Quantity

(pounds)

Price

(per pound)

Quantity

(pounds)

Margin

(percent)

2006:

 January-March $*** *** $*** *** ***

 April-June *** *** *** *** ***

 July-September *** *** 0.40 146,450 ***

 October-December *** *** *** *** ***

2007:

 January-March *** *** 0.39 184,400 ***

 April-June *** *** 0.42 176,900 ***

 July-September *** *** 0.45 268,750 ***

 October-December *** *** 0.47 180,550 ***

2008:

 January-March *** *** 0.52 210,000 ***

 April-June *** *** 0.74 303,650 ***

 July-September *** *** 0.95 418,824 ***

 October-December *** *** 0.97 1,038,023 ***

2009:

 January-March *** *** 0.88 915,200 ***

 April-June *** *** 0.68 983,460 ***

 1 Product 3.—Sodium tripolyphosphate (STPP), anhydrous, food grade, whether granular or powder and

regardless of packaging size.

Source: Compiled from data submitted in response to Commission questionnaires.
V-7

Table V-4

STPP: Weighted-average f.o.b. prices and quantities of domestic and imported product 4,1

 and

margins of underselling and (overselling), by quarters, January 2006-June 2009 

Period

United States China

Price

(per pound)

Quantity

(pounds)

Price

(per pound)

Quantity

(pounds)

Margin

(percent)

2006:

 January-March $*** *** $0.44 1,992,310 ***

 April-June *** *** 0.45 1,825,952 ***

 July-September *** *** 0.46 1,799,452 ***

 October-December *** *** 0.47 1,523,662 ***

2007:

 January-March *** *** 0.43 1,398,438 ***

 April-June *** *** 0.45 2,162,251 ***

 July-September *** *** 0.45 2,076,124 ***

 October-December *** *** 0.49 1,476,744 ***

2008:

 January-March *** *** 0.54 1,555,462 ***

 April-June *** *** 0.85 2,162,868 ***

 July-September *** *** 0.99 2,421,585 ***

 October-December *** *** 0.87 6,909,326 ***

2009:

 January-March *** *** *** *** ***

 April-June *** *** *** *** ***

 1 Product 4.—Sodium tripolyphosphate (STPP), anhydrous, technical grade, whether granular or powder and

regardless of packaging size.

Source: Compiled from data submitted in response to Commission questionnaires.

Table V-5

TKPP: Weighted-average f.o.b. prices and quantities of domestic and imported product 5, and

margins of underselling and (overselling), by quarters, January 2006-June 2009 

* * * * * * *
V-8

Table V-6

TKPP: Weighted-average f.o.b. prices and quantities of domestic and imported product 6, and

margins of underselling and (overselling), by quarters, January 2006-June 2009 

Period

United States China

Price

(per pound)

Quantity

(pounds)

Price

(per pound)

Quantity

(pounds)

Margin

(percent)

2006:

 January-March $*** *** $0.66 643,913 ***

 April-June *** *** 0.69 738,412 ***

 July-September *** *** 0.62 609,247 ***

 October-December *** *** 0.66 627,415 ***

2007:

 January-March *** *** 0.61 770,879 ***

 April-June *** *** 0.58 727,467 ***

 July-September *** *** 0.62 899,103 ***

 October-December *** *** 0.64 442,886 ***

2008:

 January-March *** *** 0.70 731,690 ***

 April-June *** *** 1.07 824,592 ***

 July-September *** *** 1.17 535,986 ***

 October-December *** *** 1.37 740,483 ***

2009:

 January-March *** *** 1.22 564,795 ***

 April-June *** *** 1.15 821,630 ***

 1 Product 6.—Tetrapotassium pyrophosphate (TKPP), anhydrous, technical grade, whether granular or powder

and regardless of packaging size.

Source: Compiled from data submitted in response to Commission questionnaires.
V-9

Figure V-2

DKP: Weighted-average f.o.b. selling prices of product 1 as reported by U.S. producers and

importers, by quarters, January 2006-June 2009

* * * * * * *

Figure V-3

MKP: Weighted-average f.o.b. selling prices of product 2 as reported by U.S. producers and

importers, by quarters, January 2006-June 2009

* * * * * * *

Figure V-4

STPP: Weighted-average f.o.b. selling prices and quantities of product 3 as reported by U.S.

producers and importers, by quarters, January 2006-June 2009

* * * * * * *

Figure V-5

STPP: Weighted-average f.o.b. selling prices and quantities of product 4 as reported by U.S.

producers and importers, by quarters, January 2006-June 2009

* * * * * * *

Figure V-6

TKPP: Weighted-average f.o.b. selling prices and quantities of product 5 as reported by U.S.

producers and importers, by quarters, January 2006-June 2009

* * * * * * *

Figure V-7

TKPP: Weighted-average f.o.b. selling prices and quantities of product 6 as reported by U.S.

producers and importers, by quarters, January 2006-June 2009

* * * * * * *
 13 The notable exception to this is MKP, which fluctuated by *** in 2006 and 2007. ICL produces MKP mostly

for food-grade customers, which occupy a much smaller proportion of the market than technical-grade MKP

customers, which use it in fertilizers. Conference transcript, p. 60 (Schewe). Also, prices of domestically produced

DKP (product 1) were, in general, slowly rising through 2006 and 2007. 

 14 Prices for domestically produced food-grade STPP (product 3) *** in the fourth quarter of 2008.

 15 ICL’s producer questionnaire response.

 16 Only two quarters of data are available for product 5, food-grade TKPP, so trends are not available. 

 17 ***.

 18 Yearly pricing for ICL indicate that technical-grade MKP prices were $***, compared to $***. The *** price

for food-grade MKP in 2008 was due to ICL’s sales into the *** segment, which had a price of $*** in 2008. This

pricing is reflective of ***. Sales to ***. In 2008, ***. E-mail from ***, November 2, 2009. Further detail

regarding ICL’s sales of food-grade MKP to the *** industry, food-grade MKP to ***, and technical-grade MKP are

presented in the following tabulation: ***.

V-10

Table V-7

DKP, MKP, STPP, and TKPP: Summary of weighted-average f.o.b. prices for products 1-6 from the

United States and China

* * * * * * *

Price Trends

Prices of all products increased substantially from their 2006 levels, consistent with higher input

costs. Pricing for all U.S.-produced products followed generally similar paths.13 They were mostly flat in

2006-2007, began rising in the first quarter of 2008, accelerated through the second and third quarters,

peaked in the fourth quarter of 200814 or the first quarter of 2009, and decreased in the second quarter of

2009. Overall, prices for these six products increased from the first quarter of 2006 to the second quarter

of 2009, by amounts ranging from *** percent (***) to *** percent (***). The fourth quarter of 2008

corresponds to the potassium miners’ strike in Canada, which is the source for ICL’s potassium

hydroxide. ***.15

For the most part, prices of phosphate salts products imported from China followed similar trends

since 2006.16 Prices of DKP (product 1) imported from China, like their domestic counterparts, were

rising slightly before 2008. Unlike pricing for domestically produced MKP, prices of MKP imported

from China were flat during 2006-07, and even into the second quarter of 2008, before *** in the third

quarter of 2008. Prices of technical-grade STPP (product 4) from China began falling in the fourth

quarter of 2008 and declined *** in 2009. This reflects ***. Without these data, pricing trends for this

product would be similar to the U.S. pricing trends on technical-grade STPP. Overall, prices for these six

products increased from the first quarter of 2006 to the second quarter of 2009, by amounts ranging from

*** percent (***)17 to *** percent (***). 

Price Comparisons

Imports of phosphate salts from China undersold the U.S. product in 11 of 14 quarterly

comparisons for DKP, all 14 possible quarterly comparisons for MKP, 14 of 28 quarterly comparisons for

STPP, and 10 of 16 quarterly comparisons from TKPP. The largest margins of underselling occured in

comparisons involving product 2, MKP, which accounted for 14 of the 17 largest quarters of underselling. 

Data were not collected for both food-grade and technical-grade MKP, but data submitted by ICL

demonstrate that pricing for food-grade MKP was higher in ***.18 Imports of phosphate salts from China

oversold the U.S. product in 23 quarterly comparisons, with margins of overselling ranging from 0.7 to
V-11

28.7 percent. Two of the three quarters of underselling for product 4, technical-grade STPP, (***)

occurred ***. Margins of underselling and overselling for DKP and TKPP only exceeded 20 percent in

one quarter. A summary of margins of underselling and overselling is presented in table V-7. 

Table V-7

DKP, MKP, STPP, and TKPP: Number of quarters of underselling and overselling and highest and

lowest margins of underselling and (overselling), by product number

Product

Number of

quarters of

underselling

Number of

quarters of

(overselling)

Margins of underselling Margins of (overselling)

Average 

(percent) 

Range (percent)

Average 

(percent)

Range (percent)

Min Max Min Max

1 (DKP) 11 3 *** 2.4 21.0 *** (3.1) (14.6)

2 (MKP) 14 0 *** 36.2 72.6 -- -- --

3 (STPP) 11 3 *** 3.7 52.2 *** (4.2) (9.4)

4 (STPP)1 3 11 *** 0.0 40.9 *** (2.6) (28.7)

5 (TKPP) 1 1 *** *** *** *** *** ***

6 (TKPP) 9 5 *** 0.6 14.1 *** (0.7) (13.2)

Total 49 23 26.7 0.0 72.6 (9.9) (0.7) (28.7)

 1 ***.

Source: Compiled from data submitted in response to Commission questionnaires.

LOST SALES AND LOST REVENUES

The Commission requested that U.S. producers of phosphate salts report any instances of lost

sales and lost revenues experienced due to competition with imports from China since January 1, 2006. 

Two producers reported having lost sales or revenues due to Chinese import competition during this time

period. More detail is provided for some of the allegations thereafter. 

DKP Lost Sales and Lost Revenues 

One producer reported a lost sales allegation regarding *** pounds of *** DKP, valued at ***

for purchaser ***. ***. One producer reported a lost revenue allegation regarding DKP for *** pounds

of *** with a price reduction from $*** to $***. ***. 
V-12

MKP Lost Sales

Two lost sales allegations were reported totaling *** pounds of MKP with a value of $***; both

of these reported *** to be the purchaser. ***. In response to these allegations, it reported that “***.”

STPP Lost Sales and Lost Revenues

Producers reported 48 lost sales allegations among 37 purchasers with regard to STPP, for ***

pounds of material, having a lost sales value of $***. Details are provided in table V-8. Seven of these

lost sales allegations were confirmed, totaling *** pounds valued at $***. Producers also reported 20 lost

revenue allegations for STPP regarding *** pounds of material, with lost revenues valued at $***. 

Details regarding these allegations can be found in table V-9. Seven of these lost revenue allegations

were confirmed totaling *** pounds, valued at $***. Additional information, where relevant, is

summarized in the individual responses below.

Table V-8

STPP: U.S. producers’ lost sales allegations

* * * * * * *

Table V-9

STPP: U.S. producers’ lost revenue allegations

* * * * * * *

* * * * * * *

TKPP Lost Sales and Lost Revenues

U.S. producers reported 12 lost sales allegations involving 12 purchasers with regard to TKPP for

*** pounds of material, having a lost sales value of $***. (For more detailed information, see table V10.) None of the lost sales allegations were confirmed. Producers also reported 4 lost revenue allegations

for TKPP regarding 3 purchasers for *** pounds of material, having a lost revenue value of ***. Table

V-11 contains details regarding these allegations. One of these lost revenue allegations was confirmed,

totaling *** pounds and valued at $***. Additional information, where relevant, is summarized in the

individual responses below.

Table V-10

TKPP: U.S. producers’ lost sales allegations

* * * * * * *

Table V-11

TKPP: U.S. producers’ lost revenue allegations

* * * * * * *

* * * * * * *
V-13

General Information on Purchasing Behavior

In addition, purchasers responding to lost sales and lost revenue allegations were asked whether

they shifted their purchases of phosphate salts from U.S. producers to suppliers of phosphate salts from

China since January 2006 and if U.S. producers had reduced their prices because of imported product

from China (table V-12). Only one of the 19 responding purchasers reported shifting from U.S. product

to Chinese for DKP and MKP; this firm reported shifting because of price. No firms reported that U.S. 

producers had reduced prices of DKP or MKP because of imports. Shifting to Chinese product was more

common for STPP, and, to a lesser extent, TKPP. Furthermore, Chinese TKPP and STPP were reported

to have influenced the price of U.S. product by a number of purchasers. 

Table V-12

DKP, MKP, STPP, and TKPP: Purchasers’ responses to questions about shifting purchases and

Chinese prices influencing U.S. prices, by product

DKP MKP STPP TKPP

yes no yes no yes no yes no

Shifted from U.S. to Chinese product 1 18 1 18 9 11 5 15

Shifted because of price 10108150

U.S. producers reduced price to compete with

China 0 13 0 13 7 8 3 10

Source: Compiled from purchasers’ responses to lost sales and lost revenue allegations.

*** was the only purchaser that reported shifting from U.S. to Chinese DKP and MKP product. 

It did not elaborate on this answer. 

*** reported shifting TKPP purchases due to price; however, it reported this shift did not work

out because of quality concerns. The other four purchasers reporting changes did not explain why. ***

reported shifting about 40 percent of its STPP due to price, among other factors. *** reported shifting a

small share of its STPP purchases because of price, and reported that the U.S. producers were greedy and

may have fixed prices. The other seven purchasers reporting changes did not report any explanation. 

Only one purchaser that responded that Chinese prices had affected U.S. prices of TKPP and STPP gave

detail. ***, responding for both STPP and TKPP, reported that, without imported product from China,

domestic prices would still be very high. 

 1

 All three companies’ fiscal years end on December 31. 

 2

 Petition, p. 4. TKPP is manufactured by PCS at its plant in Cincinnati, OH. Approximately *** percent of

PCS’s production of TKPP is ***.

 3

 Petition, p. 5.

 4 Id.

VI-1

PART VI: FINANCIAL CONDITION OF U.S. PRODUCERS

BACKGROUND

Three producers1

 provided usable financial results for their individual operations on DKP, MKP,

STPP, and TKPP. One known producer, PCS which produced TKPP by *** operations, did not submit a

response.2

 These firms are believed to account for a majority of the domestic industry’s sales and

production during 2008.3

 Anhydrous DKP and MKP are produced solely by ICL, while STPP is

produced by ICL and Prayon and TKPP is produced by ICL and Prayon, as well as by PCS ***.4

 ***

was the *** to report internal consumption of MKP, STPP, and TKPP (*** percent in terms of total

aggregate net sales value in 2008). *** reported transfers to related firms of *** (*** percent of

aggregate transfers value in terms of total aggregate net sales values in 2008), while *** reported related

transfers of *** (*** percent in terms of total STPP net sales value in 2008). 

OPERATIONS ON DKP, MKP, STPP, and TKPP

Results of the U.S. producers on their DKP, MKP, STPP, and TKPP operations are presented in

tables VI-1, VI-2, VI-3, and VI-4, respectively, which includes data on a per-pound basis as well as

operating income (loss) to net sales ratio.

Table VI-1

DKP: Results of operations of U.S. producer, fiscal years 2006-08, January-June 2008, and

January-June 2009

* * * * * * *

Table VI-2

MKP: Results of operations of U.S. producer, fiscal years 2006-08, January-June 2008, and

January-June 2009

* * * * * * *

Table VI-3

STPP: Results of operations of U.S. producers, fiscal years 2006-08, January-June 2008, and

January-June 2009

* * * * * * *

Table VI-4

TKPP: Results of operations of U.S. producers, fiscal years 2006-08, January-June 2008, and

January-June 2009

* * * * * * *
 5

 With respect to MKP, per-pound net sales values include sales to ***. In 2008 ***. E-mail from ***,

November 2, 2009.

 6

 Conference transcript, pp. 109-110 (Ascienzo, Sexton, Allen, Schewe).

VI-2

The two smallest-volume chemicals in this proceeding are DKP and MKP (tables VI-1 and VI-2). 

As net sales values of DKP increased between 2006 and 2008, operating income also increased, while

operating income was lower in January-June (interim) 2009 compared to interim 2008, consistent with

reduced sales quantities and values. Even though both net sales quantities and values of MKP increased

between 2006 and 2008, operating income decreased by all measures as the increase in per-pound total 

cost was greater than the increase in per-pound sales values during this period. However, the opposite

was true in comparing results for interim 2008 and interim 2009, as both net sales quantities and values

were lower in interim 2009, but operating income was higher, again by all measures, as per-pound sales

values increased more than per-pound total costs.5

Aggregate income-and-loss data for producers on their STPP operations are presented in table VI3, while those data on TKPP are shown in table VI-4. Since net sales values of STPP accounted for

approximately *** and *** percent of aggregate sales values of all four products in 2008 and

approximately *** and *** percent of aggregate sales values in January-June (interim) 2009, the narrative

analysis in this section is mainly focused on STPP. 

The financial results of the producers on their STPP operations (table VI-3) deteriorated from

2006 to 2007, but improved somewhat from 2007 to 2008, as *** in 2008. The net sales values increased

and the operating loss decreased from 2007 to 2008 due to an increase in per-pound net sales from ***. 

While both sales quantity and value decreased *** from interim 2008 to interim 2009, operating income

was ***, as the change in per-pound net sales from *** exceeded the increase in per-pound total cost

from ***.

While sales quantities of TKPP (table VI-4) decreased between 2006 and 2008, net sales values 

and operating income increased ***. This was the result of a *** increase in per-pound net sales (***

per pound) that exceeded the increase in per-pound total costs (from *** per pound). Between the two

interim periods, sales quantities and values both decreased, and the *** operating income in interim 2008

changed to *** in interim 2009. The operating loss in interim 2009 reflected higher per-pound costs

(from ***), relative to per-pound net sales values (*** in interim 2009).

The financial results on STPP operations (table VI-3) are somewhat different from results of

operations on TKPP operations (table VI-4). Between interim 2008 and interim 2009, even though the 

sales quantities and values of both products decreased, operating income trends moved in different

directions. ***, due to its different cost components and structures. While per-pound average selling

price and per-pound total cost for TKPP were consistently higher compared to those for STPP for all

periods, operating income and per-pound profitability for TKPP were *** lower than those for STPP in

interim 2009 (but per-pound profitability of TKPP was *** higher than those for STPP between 2006

and 2008).

 Selected financial data, by firm, are presented in table VI-5 for STPP and table VI-6 for TKPP

(since, as noted above, only one company produces anhydrous DKP and MKP). While *** for the threefull year periods for which data were collected, *** experienced operating income for the three full-year

periods. ***.6

 *** incurred operating losses in interim 2009, while *** showed improved profitability in

the most recent period, in interim 2009. 
 7

 Refer to ***.

 8

 Petitioner’s postconference brief, p. 11.

 9

 October 22, 2009 e-mail from ***.

 10 October 22, 2009 e-mail from ***.

 11 October 22, 2009 e-mail from ***.

VI-3

Table VI-5

STPP: Results of operations of U.S. producers, by firm, fiscal years 2006-08, January-June 2008,

and January-June 2009

* * * * * * *

Table VI-6

TKPP: Results of operations of U.S. producers, by firm, fiscal years 2006-08, January-June 2008,

and January-June 2009

* * * * * * *

There is some amount of toll processing done for, ***.7 In toll processing, the firm that owns the

raw materials (the tollee) arranges for an unrelated producer (the toller) to produce phosphate salts for a

fee, and then the tollee arranges for the final sale of the products to other parties. ***. 

Selected aggregate per-pound cost data of the producers on STPP are presented in table VI-7. 

Raw material costs, especially phosphoric acid (and potassium hydroxide for DKP, MKP, and TKPP)

increased *** in 2008 and 2009 which resulted in much higher cost of goods sold (“COGS”) and total

cost (which included selling, general, and administrative (“SG&A”) expenses) per pound during the same

periods.8

 Per-unit factory overhead increased in 2008 and interim 2009 due to lower production/sales

quantities.9

 ***.10 SG&A expenses, especially selling expenses for STPP and TKPP, increased *** in

2008 and interim 2009. ***.11 Per-unit total costs of DKP and MKP were higher than per-unit total costs

of STPP and TKPP (*** was the highest and *** was the second) and their costs also increased

continuously during the period, and increased *** in 2008 and interim 2009, due mainly to rising raw

material costs.

Table VI-7

STPP: Per-pound costs of U.S. producers, fiscal years 2006-08, January-June 2008, and JanuaryJune 2009

* * * * * * *

A variance analysis showing the effects of prices and volume on the producers’ sales of STPP,

and of costs and volume on their total cost, is shown in table VI-8. The analysis is summarized at the

bottom of the table. The analysis indicates that the decrease in operating loss (***) between 2006 and

2008 was attributable mainly to the positive effects of increased price (***) which was offset by the

negative effect of increased costs/expenses (***).

Table VI-8

STPP: Variance analysis of operations of U.S. producers, fiscal years 2006-08, January-June 2008,

and January-June 2009

* * * * * * *
 12 October 22, 2009 e-mail from ***.

 13 October 22, 2009 e-mail from ***.

 14 October 22, 2009 e-mail from ***.

VI-4

CAPITAL EXPENDITURES AND RESEARCH AND DEVELOPMENT EXPENSES

The responding firms’ aggregate data on capital expenditures and research and development

(R&D) expenses are presented in table VI-9. *** had *** capital expenditures reported for STPP during

the period for which data were collected. ***.12 ***.13 *** reported R&D expenses. Capital

expenditures, by firm, for each product, are presented in table VI-10. Capital expenditures fluctuated

over the period, increased somewhat in 2007 compared to 2006 and then decreased *** in 2008, while

they increased from interim 2008 to interim 2009. R&D expenses overall decreased between 2006 and

2008, and again between the two interim periods.

Table VI-9

DKP, MKP, STPP, and TKPP: Capital expenditures and R&D expenses by U.S. producers, fiscal

years 2006-08, January-June 2008, and January-June 2009

* * * * * * *

Table VI-10

DKP, MKP, STPP, and TKPP: Capital expenditures by U.S. producers, by products and firms, fiscal

years 2006-08, January-June 2008, and January-June 2009 

* * * * * * *

ASSETS AND RETURN ON INVESTMENT

U.S. producers were requested to provide data on their assets used in the production and sales of

DKP, MKP, STPP, and TKPP during the period for which data were collected to assess their return on

investment (“ROI”). Because sales values and the allocated assets of DKP and MKP are too small for

meaningful tables for ROI, they are not presented separately. Nonetheless, the trend of ROI over the

period was the same as the trend of the operating income margin to net sales shown in tables VI-1 and VI2. Data on the U.S. producers’ total assets and their ROI for STPP and TKPP are presented in table VI-11

and table VI-12, respectively. 

Table VI-11

STPP: Value of assets and return on investment of U.S. producers, fiscal years 2006-08

* * * * * * *

Table VI-12

TKPP: Value of assets and return on investment of U.S. producers, fiscal years 2006-08

* * * * * * *

The value of total assets for STPP decreased from 2006 to 2007 (even though the combined total

of property, plant, and equipment (“PPE”) for two producers remained at relatively the same levels). The

decrease resulted from ***.14 The return on investment decreased further down from 2006 to 2007 and

improved from 2007 to 2008. The trend of ROI for STPP over the period was the same as the trend of the
VI-5

operating income margin to net sales in table VI-3. The trend of ROI for TKPP over the period was the

same as the trend of the operating income margin to net sales in table VI-4.

CAPITAL AND INVESTMENT

The Commission requested U.S. producers to describe any actual negative effects since January

1, 2006, on their return on investment, growth, investment, ability to raise capital, existing development

and production efforts (including efforts to develop a derivative or more advanced version of the

product), or the scale of capital investments as a result of imports of certain phosphate salts from China. 

Their responses for DKP, MKP, STPP, and TKPP are as follows:

* * * * * * *

The Commission also requested U.S. producers to describe any anticipated negative impact of

imports of certain phosphate salts from China. Their responses are as follows:

* * * * * * *

 1

 Section 771(7)(F)(ii) of the Act (19 U.S.C. § 1677(7)(F)(ii)) provides that “The Commission shall consider

{these factors} . . . as a whole in making a determination of whether further dumped or subsidized imports are

imminent and whether material injury by reason of imports would occur unless an order is issued or a suspension

agreement is accepted under this title. The presence or absence of any factor which the Commission is required to

consider . . . shall not necessarily give decisive guidance with respect to the determination. Such a determination

may not be made on the basis of mere conjecture or supposition.”

VII-1

PART VII: THREAT CONSIDERATIONS AND INFORMATION ON

NONSUBJECT COUNTRIES

Section 771(7)(F)(i) of the Act (19 U.S.C. § 1677(7)(F)(i)) provides that--

In determining whether an industry in the United States is threatened

with material injury by reason of imports (or sales for importation) of the

subject merchandise, the Commission shall consider, among other

relevant economic factors1

--

(I) if a countervailable subsidy is involved, such information as may be

presented to it by the administering authority as to the nature of the

subsidy (particularly as to whether the countervailable subsidy is a

subsidy described in Article 3 or 6.1 of the Subsidies Agreement), and

whether imports of the subject merchandise are likely to increase,

(II) any existing unused production capacity or imminent, substantial

increase in production capacity in the exporting country indicating the

likelihood of substantially increased imports of the subject merchandise

into the United States, taking into account the availability of other export

markets to absorb any additional exports,

(III) a significant rate of increase of the volume or market penetration of

imports of the subject merchandise indicating the likelihood of

substantially increased imports,

(IV) whether imports of the subject merchandise are entering at prices

that are likely to have a significant depressing or suppressing effect on

domestic prices, and are likely to increase demand for further imports,

(V) inventories of the subject merchandise,

(VI) the potential for product-shifting if production facilities in the

foreign country, which can be used to produce the subject merchandise,

are currently being used to produce other products,

(VII) in any investigation under this title which involves imports of both

a raw agricultural product (within the meaning of paragraph (4)(E)(iv))

and any product processed from such raw agricultural product, the

likelihood that there will be increased imports, by reason of product

shifting, if there is an affirmative determination by the Commission
 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-2

under section 705(b)(1) or 735(b)(1) with respect to either the raw

agricultural product or the processed agricultural product (but not both),

(VIII) the actual and potential negative effects on the existing

development and production efforts of the domestic industry, including

efforts to develop a derivative or more advanced version of the domestic

like product, and

(IX) any other demonstrable adverse trends that indicate the probability

that there is likely to be material injury by reason of imports (or sale for

importation) of the subject merchandise (whether or not it is actually

being imported at the time).2

Information on the nature of the alleged subsidies was presented earlier in this report; information

on the volume and pricing of imports of the subject merchandise is presented in Parts IV and V; and

information on the effects of imports of the subject merchandise on U.S. producers’ existing development

and production efforts is presented in Part VI. Information on inventories of the subject merchandise;

foreign producers’ operations, including the potential for “product-shifting;” any other threat indicators, if

applicable; and any dumping in third-country markets, follows. Also presented in this section of the

report is information obtained for consideration by the Commission on nonsubject countries and the

global market.

THE INDUSTRY IN CHINA

The petition identified 60 alleged producers of phosphate salts in China. Tables VII-1 and VII-2

list information on nine responding Chinese firms.

Table VII-1

Certain phosphate salts: Chinese firms’ reported 2008 production, exports to the United States,

and exports to the United States as a share of production

* * * * * * *
 3

 *** reported capacity for DKP and MKP “assuming *** percent capacity of the shared line.”

VII-3

Table VII-2

DKP, MKP, STPP, and TKPP: Chinese firms’ production

Firm DKP MKP STPP TKPP

Hubei Xingfa Chemicals Group Co., Ltd. X

Mianyang Aostar Phosphorus Chemical

Industry Co., Ltd. X X

SD BNI (CN) Co., Ltd. X X X X

Shifang Anda Chemicals Co., Ltd. X

Sichuan Blue Sword Chemical (Group) Co.,

Ltd.

XX X X

Sichuan Mianzhu Norwest Chemical Co.,

Ltd.

X

Thermphos (China) Food Additive Co., Ltd. X X X X

Wuhan Waking Lion Chemicals Co., Ltd. X

Yunnan Newswift Co. Ltd. X X

Total 3 5 8 4

Source: Compiled from data submitted in response to Commission questionnaires.

In general, responding Chinese foreign producers did not report producing other products on the

same equipment used in the production of the individual phosphate salts that are at issue in this

proceeding. Only one Chinese producer, ***, reported that it could and did produce each of the four

subject phosphate salts, as well as ***, another phosphate salt, on the same equipment.3

Coverage of export data reported by foreign producers compared to import data reported in Part

IV are *** percent, *** percent, and *** percent, of DKP, MKP, and STPP, respectively. Coverage of

export data for TKPP, however, is only *** percent. Foreign producer/exporter questionnaires were not

received from the largest five Chinese exporters of goods under HTS subheading 2835.39.10, which

includes TKPP, according to data compiled by Customs. These exporters are ***.

Tables VII-3 through VII-6 present data, by product, for the nine responding firms during 2006-

08, January-June 2008, January-June 2009, and forecasts for 2009 and 2010. *** was the largest

reporting Chinese producer, accounting for approximately *** of reported Chinese phosphate salt

production and exports to the United States. 

Table VII-3

DKP: Chinese production capacity, production, shipments, and inventories, 2006-08, JanuaryJune 2008, January-June 2009, and projected 2009-10

* * * * * * *

Table VII-4

MKP: Chinese production capacity, production, shipments, and inventories, 2006-08, JanuaryJune 2008, January-June 2009, and projected 2009-10

* * * * * * *
VII-4

Table VII-5

STPP: Chinese production capacity, production, shipments, and inventories, 2006-08, JanuaryJune 2008, January-June 2009, and projected 2009-10

Item

Actual experience Projections 1 2

2006 2007 2008

January-June3

2008 2009 2009 2010

Quantity (1,000 lbs. dry weight)

Capacity 1 752,850 792,850 771,828 419,446 404,446 749,081 717,035

Production 585,110 599,305 698,578 420,663 277,564 521,540 510,218

End of period inventories *** *** *** *** *** *** ***

Shipments:

Internal consumption3 *** *** *** *** *** *** ***

Home market *** *** *** *** *** *** ***

Exports to--

The United States 3,240 3,913 *** *** *** *** ***

All other markets 349,062 306,223 *** *** *** *** ***

Total exports 352,302 310,136 *** *** *** *** ***

Total shipments 606,927 561,136 723,486 366,944 282,896 517,294 513,799

Ratios and shares (percent)

Capacity utilization 1 77.7 75.6 90.5 100.3 68.6 69.6 71.2

Inventories to production *** *** *** *** *** *** ***

Inventories to total

shipments *** *** *** *** *** *** ***

Share of total quantity of 

shipments:

Internal consumption *** *** *** *** *** *** ***

Home market *** *** *** *** *** *** ***

Exports to--

The United States 0.5 0.7 *** *** *** *** ***

All other markets 57.5 54.6 *** *** *** *** ***

All export

markets 58.0 55.3 *** *** *** *** ***

 1 According to ***, the demand for STPP in the United States will decrease due to the progressive restrictions on the use of

STPP in automatic dishwasher detergent.

 2

 *** did not report capacity or projections for 2009 and 2010. Capacities were estimated based on the highest production level

(*** pounds).

 3

 *** inadvertently reported the total exports data as internal consumption/transfers, though this was corrected by staff. Staff

also corrected the January-June 2008 and January-June 2009 data, as these were reported on an annual basis. 

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.
VII-5

Table VII-6

TKPP: Chinese production capacity, production, shipments, and inventories, 2006-08, JanuaryJune 2008, January-June 2009, and projected 2009-10

* * * * * * *

U.S. IMPORTERS’ CURRENT ORDERS

The Commission requested importers to indicate whether they imported or arranged for the

importation of phosphate salts from China after June 30, 2009.

Table VII-7

Certain phosphate salts: U.S. importers’ orders for delivery after June 30, 2009

Item Quantity (1,000 lbs. dry weight) 

DKP ***

MKP ***

STPP ***

TKPP ***

Total 5,853

Source: Compiled from data submitted in response to the Commission's questionnaire.

U.S. INVENTORIES OF PHOSPHATE SALTS FROM CHINA

U.S. importers’ end-of-period inventories of U.S. imports as reported are presented in tables VII8 through VII-11. Total inventories of Chinese and nonsubject DKP, MKP, STPP, and TKPP increased

in absolute terms between 2006 and 2008. Inventories of DKP, MKP, and STPP from China were higher

in June 2009 than in June 2008, while inventories of TKPP were lower. With respect to inventories of

imports from nonsubject countries, June 2009 levels were higher than those in June 2008 for DKP and

TKPP, and lower for MKP and STPP. 

Table VII-8

DKP: U.S. importers’ end-of-period inventories of imports, by source, 2006-08, January-June 2008,

and January-June 2009

* * * * * * *

Table VII-9

MKP: U.S. importers’ end-of-period inventories of imports, by source, 2006-08, January-June 2008,

and January-June 2009

* * * * * * *
VII-6

Table VII-10

STPP: U.S. importers’ end-of-period inventories of imports, by source, 2006-08, January-June

2008, and January-June 2009

Item

Calendar year January-June

2006 2007 2008 2008 2009

China:

Inventories (1,000 lbs. dry weight) 1,563 1,472 6,818 3,709 13,428

Ratio of inventories to imports (percent) 17.1 15.8 31.7 26.3 22.2

Ratio to U.S. shipments of imports (percent) 17.3 15.6 42.5 38.5 22.3

Ratio to total shipments of imports (percent) 17.1 15.6 42.2 38.0 22.3

All other sources:

Inventories (1,000 lbs. dry weight) 28,313 22,716 33,517 20,845 15,189

Ratio of inventories to imports (percent) 11.9 9.1 13.5 8.2 14.5

Ratio to U.S. shipments of imports (percent) 12.7 9.8 15.0 8.6 11.4

Ratio to total shipments of imports (percent) 11.3 9.0 13.9 8.0 10.3

All sources:

Inventories (1,000 lbs. dry weight) 29,876 24,187 40,335 24,553 28,618

Ratio of inventories to imports (percent) 12.1 9.3 14.9 9.1 17.3

Ratio to U.S. shipments of imports (percent) 12.9 10.1 16.8 9.7 14.8

Ratio to total shipments of imports (percent) 11.5 9.3 15.6 9.1 13.8

Note.–Ratios were calculated using data from firms providing information on both inventories and imports or U.S.

shipments of imports. Partial-year ratios are based on annualized import/shipment data.

Source: Compiled from data submitted in response to the Commission’s questionnaire.

Table VII-11

TKPP: U.S. importers’ end-of-period inventories of imports, by source, 2006-08, January-June

2008, and January-June 2009

* * * * * * *
 4

 Australian Customs Service / Trade Measures Branch, Alleged Dumping of Sodium Tripolyphosphate (STPP)

Exported from the People’s Republic of China - Termination of an Investigation, Report Number 121, May 11, 2007.

 5

 ***.

VII-7

ANTIDUMPING AND COUNTERVAILING DUTY INVESTIGATIONS 

IN THIRD-COUNTRY MARKETS

None of the parties to these investigations reported dumping findings or antidumping remedies

imposed on phosphate salts in third-country markets. In November 2006, Albright and Wilson

(Australia) Limited petitioned for relief from the alleged dumping of STPP exported to Australia from

China. However, the Australian Customs Service found that Chinese STPP had either been exported to

Australia at prices that were not dumped or the dumping margins were negligible, and accordingly

terminated the investigation in May 2007.4

INFORMATION ON NONSUBJECT COUNTRIES

In many of the more affluent markets such as the United States, environmental bans and

restrictions have resulted in sharp reductions of consumption of phosphate products, most notably for

STPP for use in consumer laundry detergents and, increasingly, in automatic dishwasher formulations. In

less affluent markets, regulations have been less restrictive and consumption of phosphate products for

use in cleaning applications has been growing, especially since population and per capita use has been

increasing. Another key trend affecting the global market and industry has been a shortage of raw

materials – especially phosphoric acid in 2008 – resulting in a surge of prices. This price surge has

reportedly subsided somewhat in 2009 but not necessarily to pre-2008 levels.5

Although there are other sources of supply for the sodium and potassium phosphate salts that

comprise the subject merchandise in these investigations, the leading nonsubject suppliers to the U.S.

market are Canada and Mexico (particularly STPP), France and Germany (TKPP), and Germany, Israel,

and Mexcio (DKP and MKP). Other global suppliers with less of a presence in the U.S. market include

Belgium, Brazil, Japan, and the Netherlands. The following information on the leading nonsubject

suppliers to the United States is drawn largely from ***.

Canada is a substantial producer of sodium phosphates, although a number of formulated

products ***. STPP is produced by Innophos in Port Maitland, Ontario, in a facility capable of producing

***. After ***, Innophos is reportedly making ***. ***. Although there are some exports of potassium

phosphates from Canada, ***. In Canada, as in other similarly situated markets, environmental pressures

have adversely impacted consumption of phosphate salts in home laundry detergents ***.

In Mexico, Innophos and Mexichem produce industrial phosphates, including STPP. Production

capacity for STPP in Mexico is estimated to be ***. Based on information provided by ***, ***. 

Major producers of STPP in Western Europe include Prayon in Belgium and France, BK Giulini

Chemie (a subsidiary of ICL) in Germany, Thermphos International in the Netherlands, and FMC Foret

and Madhvani International in Spain. Overall STPP capacity is estimated to be ***. In the region, the

banning and restriction on the use of phosphate salts is having a major impact. Additionally, ***. ***. 

Additionally, some STPP is exported from Western Europe to the United States.

Western European producers of potassium phosphates such as MKP, DKP, and TKPP include

Prayon in Belgium and France and BK Giulini Chemie, Chemische Fabrikudheim and Thermphos in

Germany. Overall, capacity is estimated to be ***. One of the largest potential growth areas in

potassium phosphates is ***.
 6

 “http://www.icl-perfproductslp.com,” retrieved October 26, 2009.

VII-8

Israel has become a major player in the global phosphate industry by taking advantage of rich

phosphate rock deposits located in the Negev.6

 Two Israeli companies, Israel Chemicals Limited (“ICL

(Israel)”) and Haifa Chemicals LTD have emerged as major producers of phosphate specialty products in 

both technical and food grades. In its web site, Haifa Chemicals lists 25 specialized phosphate chemicals

that it produces (including MKP, DKP, STPP, and TKPP). ICL has emerged as a global player and is the

parent company of ICL Performance Chemicals, headquartered in St. Louis, MO, a leading producer of

phosphate chemicals in the United States. ICL (Israel) through its subsidiaries/partners has

manufacturing and production facilities in other countries as well, including Argentina, Australia, Austria,

Belgium, Brazil, China, France, Germany, the Netherlands, Spain, Turkey, the United Kingdom. ICL

(Israel) has also continued to expand its operations within Israel itself. ***.
A-1

APPENDIX A

FEDERAL REGISTER NOTICES

Federal Register / Vol. 74, No. 189 / Thursday, October 1, 2009 / Notices 50817 

1The petition individually identifies sodium 

tripolyphosphate, monopotassium phosphate, 

dipotassium phosphate, and tetrapotassium 

pyrophosphate. 

comments on the DEIS and White-tailed 

Deer Management Plan, please do not 

resubmit them, as your comments are 

already incorporated into the public 

record and will be fully considered in 

our final decision. 

FOR FURTHER INFORMATION CONTACT: 

Adrienne A. Coleman, Superintendent, 

Rock Creek Park, at 3545 Williamsburg 

Lane, NW., Washington, DC 20008, or 

by telephone at (202) 895–6000. 

Dated: September 24, 2009. 

Margaret O’Dell, 

Regional Director, National Capital Region. 

[FR Doc. E9–23706 Filed 9–30–09; 8:45 am] 

BILLING CODE P 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation Nos. 701–TA–473 and 

731–TA–1173 (Preliminary)] 

Certain Sodium and Potassium 

Phosphate Salts From China 

AGENCY: United States International 

Trade Commission. 

ACTION: Institution of antidumping and 

countervailing duty investigations and 

scheduling of preliminary phase 

investigations. 

SUMMARY: The Commission hereby gives 

notice of the institution of investigations 

and commencement of preliminary 

phase antidumping and countervailing 

duty investigations Nos. 701–TA–473 

and 731–TA–1173 (Preliminary) under 

sections 703(a) and 733(a) of the Tariff 

Act of 1930 (19 U.S.C. 1671b(a) and 

1673b(a)) (the Act) to determine 

whether there is a reasonable indication 

that an industry in the United States is 

materially injured or threatened with 

material injury, or the establishment of 

an industry in the United States is 

materially retarded, by reason of 

imports from China of certain sodium 

and potassium phosphate salts,1

provided for in subheadings 2835.24.00, 

2835.31.00, and 2835.39.10 of the 

Harmonized Tariff Schedule of the 

United States, that are alleged to be sold 

in the United States at less than fair 

value and alleged to be subsidized by 

the Government of China. Unless the 

Department of Commerce extends the 

time for initiation pursuant to sections 

702(c)(1)(B) or 732(c)(1)(B) of the Act 

(19 U.S.C. 1671a(c)(1)(B) or 

1673a(c)(1)(B)), the Commission must 

reach a preliminary determination in 

antidumping and countervailing duty 

investigations in 45 days, or in this case 

by November 9, 2009. The 

Commission’s views are due at 

Commerce within five business days 

thereafter, or by November 17, 2009. 

For further information concerning 

the conduct of these investigations and 

rules of general application, consult the 

Commission’s Rules of Practice and 

Procedure, part 201, subparts A through 

E (19 CFR part 201), and part 207, 

subparts A and B (19 CFR part 207). 

DATES: Effective Date: September 24, 

2009. 

FOR FURTHER INFORMATION CONTACT: 

Jennifer Merrill (202–205–3188), Office 

of Investigations, U.S. International 

Trade Commission, 500 E Street, SW., 

Washington, DC 20436. Hearingimpaired persons can obtain 

information on this matter by contacting 

the Commission’s TDD terminal on 202– 

205–1810. Persons with mobility 

impairments who will need special 

assistance in gaining access to the 

Commission should contact the Office 

of the Secretary at 202–205–2000. 

General information concerning the 

Commission may also be obtained by 

accessing its Internet server (http:// 

www.usitc.gov). The public record for 

these investigations may be viewed on 

the Commission’s electronic docket 

(EDIS) at http://edis.usitc.gov. 

SUPPLEMENTARY INFORMATION: 

Background. These investigations are 

being instituted in response to a petition 

filed on September 24, 2009, by ICL 

Performance Products, LP (St. Louis, 

MO) and Prayon, Inc. (Augusta, GA). 

Participation in the investigations and 

public service list. Persons (other than 

petitioners) wishing to participate in the 

investigations as parties must file an 

entry of appearance with the Secretary 

to the Commission, as provided in 

sections 201.11 and 207.10 of the 

Commission’s rules, not later than seven 

days after publication of this notice in 

the Federal Register. Industrial users 

and (if the merchandise under 

investigation is sold at the retail level) 

representative consumer organizations 

have the right to appear as parties in 

Commission antidumping 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 these investigations 

upon the expiration of the period for 

filing entries of appearance. 

Limited disclosure of business 

proprietary information (BPI) under an 

administrative protective order (APO) 

and BPI service list. Pursuant to section 

207.7(a) of the Commission’s rules, the 

Secretary will make BPI gathered in 

these investigations available to 

authorized applicants representing 

interested parties (as defined in 19 

U.S.C. 1677(9)) who are parties to the 

investigations under the APO issued in 

the investigations, provided that the 

application is made not later than seven 

days after the publication of this notice 

in the Federal Register. A separate 

service list will be maintained by the 

Secretary for those parties authorized to 

receive BPI under the APO. 

Conference. The Commission’s 

Director of Investigations has scheduled 

a conference in connection with these 

investigations for 9:30 a.m. on October 

15, 2009, at the U.S. International Trade 

Commission Building, 500 E Street, 

SW., Washington, DC. Parties wishing to 

participate in the conference should 

contact Jennifer Merrill (202–205–3188) 

not later than October 13, 2009, to 

arrange for their appearance. Parties in 

support of the imposition of 

antidumping and countervailing duties 

in these investigations and parties in 

opposition to the imposition of such 

duties will each be collectively 

allocated one hour within which to 

make an oral presentation at the 

conference. A nonparty who has 

testimony that may aid the 

Commission’s deliberations may request 

permission to present a short statement 

at the conference. 

Written submissions. As provided in 

sections 201.8 and 207.15 of the 

Commission’s rules, any person may 

submit to the Commission on or before 

October 20, 2009, a written brief 

containing information and arguments 

pertinent to the subject matter of the 

investigations. Parties may file written 

testimony in connection with their 

presentation at the conference no later 

than three days before the conference. If 

briefs or written testimony contain BPI, 

they must conform with the 

requirements of sections 201.6, 207.3, 

and 207.7 of the Commission’s rules. 

The Commission’s rules do not 

authorize filing of submissions with the 

Secretary by facsimile or electronic 

means, except to the extent permitted by 

section 201.8 of the Commission’s rules, 

as amended, 67 FR 68036 (November 8, 

2002). Even where electronic filing of a 

document is permitted, certain 

documents must also be filed in paper 

form, as specified in II (C) of the 

Commission’s Handbook on Electronic 

Filing Procedures, 67 FR 68168, 68173 

(November 8, 2002). 

In accordance with sections 201.16(c) 

and 207.3 of the rules, each document 

filed by a party to the investigations 

must be served on all other parties to 

the investigations (as identified by 


PWALKER on DSK8KYBLC1PROD with NOTICES
50818 Federal Register / Vol. 74, No. 189 / Thursday, October 1, 2009 / Notices 

either the public or BPI service list), and 

a certificate of service must be timely 

filed. The Secretary will not accept a 

document for filing without a certificate 

of service. 

Authority: These investigations are being 

conducted under authority of title VII of the 

Tariff Act of 1930; this notice is published 

pursuant to section 207.12 of the 

Commission’s rules. 

Issued: September 25, 2009. 

By order of the Commission. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. E9–23627 Filed 9–30–09; 8:45 am] 

BILLING CODE 7020–02–P 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation Nos. 731–TA–776–779 

(Second Review)] 

Preserved Mushrooms From Chile, 

China, India, and Indonesia 

AGENCY: United States International 

Trade Commission. 

ACTION: Institution of five-year reviews 

concerning the antidumping duty orders 

on preserved mushrooms from Chile, 

China, India, and Indonesia. 

SUMMARY: The Commission hereby gives 

notice that it has instituted reviews 

pursuant to section 751(c) of the Tariff 

Act of 1930 (19 U.S.C. 1675(c)) (the Act) 

to determine whether revocation of the 

antidumping duty orders on preserved 

mushrooms from Chile, China, India, 

and Indonesia would be likely to lead to 

continuation or recurrence of material 

injury. Pursuant to section 751(c)(2) of 

the Act, interested parties are requested 

to respond to this notice by submitting 

the information specified below to the 

Commission; 1 to be assured of 

consideration, the deadline for 

responses is November 2, 2009. 

Comments on the adequacy of responses 

may be filed with the Commission by 

December 15, 2009. For further 

information concerning the conduct of 

these reviews and rules of general 

application, consult the Commission’s 

Rules of Practice and Procedure, part 

201, subparts A through E (19 CFR part 

201), and part 207, subparts A, D, E, and 

F (19 CFR part 207), as most recently 

amended at 74 FR 2847 (January 16, 

2009). 

DATES: Effective Date: October 1, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Mary Messer (202–205–3193), Office of 

Investigations, U.S. International Trade 

Commission, 500 E Street, SW., 

Washington, DC 20436. Hearingimpaired persons can obtain 

information on this matter by contacting 

the Commission’s TDD terminal on 202– 

205–1810. Persons with mobility 

impairments who will need special 

assistance in gaining access to the 

Commission should contact the Office 

of the Secretary at 202–205–2000. 

General information concerning the 

Commission may also be obtained by 

accessing its Internet server (http:// 

www.usitc.gov). The public record for 

these reviews may be viewed on the 

Commission’s electronic docket (EDIS) 

at http://edis.usitc.gov. 

SUPPLEMENTARY INFORMATION: 

Background.—On December 2, 1998, the 

Department of Commerce (‘‘Commerce’’) 

issued an antidumping duty order on 

imports of preserved mushrooms from 

Chile (63 FR 66529) and on February 19, 

1999, Commerce issued antidumping 

duty orders on imports of preserved 

mushrooms from China, India, and 

Indonesia (64 FR 8308–8312). 

Commerce subsequently revoked in part 

the order on imports from Indonesia (68 

FR 39521, July 2, 2003). Following fiveyear reviews by Commerce and the 

Commission, effective November 17, 

2004, Commerce issued a continuation 

of the antidumping duty orders on 

imports of preserved mushrooms from 

Chile, China, India, and Indonesia (69 

FR 67308). The Commission is now 

conducting second reviews to determine 

whether revocation of the orders would 

be likely to lead to continuation or 

recurrence of material injury to the 

domestic industry within a reasonably 

foreseeable time. It will assess the 

adequacy of interested party responses 

to this notice of institution to determine 

whether to conduct full reviews or 

expedited reviews. The Commission’s 

determinations in any expedited 

reviews will be based on the facts 

available, which may include 

information provided in response to this 

notice. 

Definitions.—The following 

definitions apply to these reviews: 

(1) Subject Merchandise is the class or 

kind of merchandise that is within the 

scope of the five-year reviews, as 

defined by Commerce. 

(2) The Subject Countries in these 

reviews are Chile, China, India, and 

Indonesia. 

(3) The Domestic Like Product is the 

domestically produced product or 

products which are like, or in the 

absence of like, most similar in 

characteristics and uses with, the 

Subject Merchandise. In its original 

determinations and its full five-year 

review determinations, the Commission 

found one domestic like product 

consisting of preserved mushrooms 

corresponding to the scope of 

Commerce’s investigations. 

(4) The Domestic Industry is the U.S. 

producers as a whole of the Domestic 

Like Product, or those producers whose 

collective output of the Domestic Like 

Product constitutes a major proportion 

of the total domestic production of the 

product. In its original determinations 

and its full five-year review 

determinations, the Commission 

defined the Domestic Industry to consist 

of all domestic producers of preserved 

mushrooms. Certain Commissioners 

defined the Domestic Industry 

differently in the original investigations. 

(5) An Importer is any person or firm 

engaged, either directly or through a 

parent company or subsidiary, in 

importing the Subject Merchandise into 

the United States from a foreign 

manufacturer or through its selling 

agent. 

Participation in the reviews and 

public service list.—Persons, including 

industrial users of the Subject 

Merchandise and, if the merchandise is 

sold at the retail level, representative 

consumer organizations, wishing to 

participate in the reviews as parties 

must file an entry of appearance with 

the Secretary to the Commission, as 

provided in section 201.11(b)(4) of the 

Commission’s rules, no later than 21 

days after publication of this notice in 

the Federal Register. The Secretary will 

maintain a public service list containing 

the names and addresses of all persons, 

or their representatives, who are parties 

to the reviews. 

Former Commission employees who 

are seeking to appear in Commission 

five-year reviews are advised that they 

may appear in a review even if they 

participated personally and 

substantially in the corresponding 

underlying original investigation. The 

Commission’s designated agency ethics 

official has advised that a five-year 

review is not considered the ‘‘same 

particular matter’’ as the corresponding 

underlying original investigation for 

purposes of 18 U.S.C. 207, the post 

employment statute for Federal 

employees, and Commission rule 

201.15(b) (19 CFR 201.15(b)), 73 FR 

24609 (May 5, 2008). This advice was 

developed in consultation with the 

Office of Government Ethics. 

Consequently, former employees are not 

required to seek Commission approval 

to appear in a review under Commission 

rule 19 CFR 201.15, even if the 

corresponding underlying original 

investigation was pending when they 

were Commission employees. For 

further ethics advice on this matter, 

contact Carol McCue Verratti, Deputy 


PWALKER on DSK8KYBLC1PROD with NOTICES
54024 Federal Register / Vol. 74, No. 202 / Wednesday, October 21, 2009 / Notices 

1November 3, 2009, is twenty calendar days from 

the signature date of this notice. 

Dated: October 13, 2009. 

Elizabeth Whiteman 

Acting Executive Secretary. 

[FR Doc. E9–25341 Filed 10–20–09; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

A–570–962 

Certain Sodium and Potassium 

Phosphate Salts From the People’s 

Republic of China: Initiation of 

Antidumping Duty Investigation 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

EFFECTIVE DATE: October 21,2009. 

FOR FURTHER INFORMATION CONTACT: 

Katie Marksberry at (202) 482–7906, 

AD/CVD Operations, Office 9, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW, Washington, DC 20230. 

SUPPLEMENTARY INFORMATION: 

The Petition 

On September 24, 2009, the 

Department of Commerce 

(‘‘Department’’) received a petition 

concerning imports of certain sodium 

and potassium phosphate salts (‘‘certain 

phosphate salts’’) from the People’s 

Republic of China (‘‘PRC’’) filed in 

proper form by ICL Performance 

Products LP (‘‘ICL’’) and Prayon, Inc. 

(collectively, ‘‘Petitioners’’). See Petition 

for the Imposition of Antidumping and 

Countervailing Duties on Imports of 

Certain Sodium and Potassium 

Phosphate Salts from the People’s 

Republic of China, dated September 24, 

2009 (‘‘Petition’’). On September 30, 

2009, the Department issued an 

additional request for information and 

clarification of certain areas of the 

Petition. Based on the Department’s 

requests, Petitioners timely filed 

additional general information 

pertaining to the Petition on October 5, 

2009, and additional information 

pertaining to the antidumping portion of 

the Petition on October 6, 2009 

(hereinafter, ‘‘Supplement to the AD 

Petition’’). The period of investigation 

(‘‘POI’’) is January 1, 2009, through June 

30, 2009. 

In accordance with section 732(b) of 

the Tariff Act of 1930, as amended 

(‘‘Act’’), Petitioners allege that imports 

of certain phosphate salts from the PRC 

are being, or are likely to be, sold in the 

United States at less than fair value, 

within the meaning of section 731 of the 

Act, and that such imports are 

materially injuring, or threatening 

material injury to, an industry in the 

United States. 

The Department finds that Petitioners 

filed the Petition on behalf of the 

domestic industry because Petitioners 

are an interested party, as defined in 

section 771(9)(C) of the Act, and have 

demonstrated sufficient industry 

support with respect to the antidumping 

duty investigation that Petitioners are 

requesting the Department to initiate 

(see ‘‘Determination of Industry Support 

for the Petition’’ section below). 

Scope of Investigation 

The products covered by this 

investigation are certain phosphate salts 

from the PRC. For a full description of 

the scope of the investigation, please see 

the ‘‘Scope of Investigation,’’ in 

Appendix I of this notice. 

Comments on Scope of Investigation 

As discussed in the preamble to the 

regulations (Antidumping Duties; 

Countervailing Duties; Final Rule, 62 FR 

27296, 27323 (May 19, 1997)), we are 

setting aside a period for interested 

parties to raise issues regarding product 

coverage. The Department encourages 

all interested parties to submit such 

comments by November 3, 

2009.1Comments should be addressed to 

Import Administration’s APO/Dockets 

Unit, Room 1870, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW, Washington, DC 20230. 

The period of scope consultations is 

intended to provide the Department 

with ample opportunity to consider all 

comments and to consult with parties 

prior to the issuance of the preliminary 

determination. 

Comments on Product Characteristics 

for Antidumping Duty Questionnaires 

We are requesting comments from 

interested parties regarding the 

appropriate physical characteristics of 

certain phosphate salts to be reported in 

response to the Department’s 

antidumping questionnaires. This 

information will be used to identify the 

key physical characteristics of the 

merchandise under consideration in 

order to more accurately report the 

relevant factors and costs of production, 

as well as to develop appropriate 

product comparison criteria. 

Interested parties may provide 

information or comments that they 

believe are relevant to the development 

of an accurate listing of physical 

characteristics. Specifically, they may 

provide comments as to which 

characteristics are appropriate to use as: 

1) general product characteristics; and 

2) the product comparison criteria. We 

note that it is not always appropriate to 

use all product characteristics as 

product comparison criteria. We base 

product comparison criteria on 

meaningful commercial differences 

among products. In other words, while 

there may be some physical product 

characteristics utilized by 

manufacturers to describe certain 

phosphate salts, it may be that only a 

select few product characteristics take 

into account commercially meaningful 

physical characteristics. Generally, the 

Department attempts to list the most 

important physical characteristics first 

and the least important characteristics 

last. 

In order to consider the suggestions of 

interested parties in developing and 

issuing the antidumping duty 

questionnaires, we must receive 

comments at the above–referenced 

address by November 3, 2009. 

Additionally, rebuttal comments must 

be received by November 10, 2009. 

Determination of Industry Support for 

the Petition 

Section 732(b)(1) of the Act requires 

that a petition be filed on behalf of the 

domestic industry. Section 732(c)(4)(A) 

of the Act provides that a petition meets 

this requirement if the domestic 

producers or workers who support the 

petition account for: (i) at least 25 

percent of the total production of the 

domestic like product; and (ii) more 

than 50 percent of the production of the 

domestic like product produced by that 

portion of the industry expressing 

support for, or opposition to, the 

petition. Moreover, section 732(c)(4)(D) 

of the Act provides that, if the petition 

does not establish support of domestic 

producers or workers accounting for 

more than 50 percent of the total 

production of the domestic like product, 

the Department shall: (i) poll the 

industry or rely on other information in 

order to determine if there is support for 

the petition, as required by 

subparagraph (A), or (ii) determine 

industry support using a statistically 

valid sampling method. 

Section 771(4)(A) of the Act defines 

the ‘‘industry’’ as the producers as a 

whole of a domestic like product. Thus, 

to determine whether a petition has the 

requisite industry support, the statute 

directs the Department to look to 

producers and workers who produce the 

domestic like product. The U.S. 

International Trade Commission 

(‘‘ITC’’), which is responsible for 

determining whether ‘‘the domestic 


jlentini on DSKJ8SOYB1PROD with NOTICES
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industry’’ has been injured, must also 

determine what constitutes a domestic 

like product in order to define the 

industry. While both the Department 

and the ITC must apply the same 

statutory definition regarding the 

domestic like product (section 771(10) 

of the Act), they do so for different 

purposes and pursuant to a separate and 

distinct authority. In addition, the 

Department’s determination is subject to 

limitations of time and information. 

Although this may result in different 

definitions of the like product, such 

differences do not render the decision of 

either agency contrary to law. See 

USEC, Inc. v. United States, 132 F. 

Supp. 2d 1, 8 (CIT 2001), citing Algoma 

Steel Corp. Ltd. v. United States, 688 F. 

Supp. 639, 644 (CIT 1988), aff’d 865 

F.2d 240 (Fed. Cir. 1989), cert. denied 

492 U.S. 919 (1989). 

Section 771(10) of the Act defines the 

domestic like product as ‘‘a product 

which is like, or in the absence of like, 

most similar in characteristics and uses 

with, the article subject to an 

investigation under this subtitle.’’ 

Although the reference point from 

which the domestic like product 

analysis begins is usually ‘‘the article 

subject to an investigation’’ (i.e., the 

class or kind of merchandise to be 

investigated, which normally will be the 

scope as defined in the petition), 

Petitioners presented one class or kind 

of merchandise, but four domestic like 

products. 

The four like products, when 

considered together, correspond to the 

product scope description. Based on our 

analysis of the information submitted on 

the record, we have determined that 

certain phosphate salts (sodium 

tripolyphospate (‘‘STPP’’), 

monopotassium phosphate (‘‘MKP’’), 

dipotassium phosphate (‘‘DKP’’), and 

tetrapotassium phosphate (‘‘TKPP’’)) 

constitute four domestic like products 

and we have analyzed industry support 

in terms of those domestic like 

products. For a discussion of the 

domestic like product analysis in this 

case, see ‘‘Antidumping Duty 

Investigation Initiation Checklist: 

Certain Sodium and Potassium 

Phosphate Salts from the People’s 

Republic of China’’ (‘‘Initiation 

Checklist’’), at Attachment II, Analysis 

of Industry Support for the Petitions 

Covering Certain Sodium and Potassium 

Phosphate Salts from the People’s 

Republic of China, on file in the Central 

Records Unit (‘‘CRU’’), Room 1117 of 

the main Department of Commerce 

building. 

With regard to section 732(c)(4)(A) of 

the Act, in determining whether 

Petitioners have standing (i.e., the 

domestic workers and producers 

supporting the Petition account for (1) at 

least 25 percent of the total production 

of the domestic like product and (2) 

more than 50 percent of the production 

of the domestic like product produced 

by that portion of the industry 

expressing support for, or opposition to, 

the Petition), we considered the 

industry support data contained in the 

Petition with reference to the domestic 

like products. To establish industry 

support, Petitioners provided their own 

production volume of the domestic like 

products for calendar year 2008, and 

compared that to total production 

volume of the domestic like products for 

the industry. We have relied upon data 

Petitioners provided for purposes of 

measuring industry support. For further 

discussion, see Initiation Checklist at 

Attachment II. 

The Department’s review of the data 

provided in the Petition, supplemental 

submissions, and other information 

readily available to the Department 

indicates that Petitioners have 

established industry support for each of 

the four like products. First, the Petition 

establishes support from domestic 

producers (or workers) accounting for 

more than 50 percent of the total 

production of the domestic like 

products and, as such, the Department 

is not required to take further action in 

order to evaluate industry support (e.g., 

polling). See section 732(c)(4)(D) of the 

Act, see also Initiation Checklist at 

Attachment II. Second, the domestic 

producers (or workers) have met the 

statutory criteria for industry support 

under section 732(c)(4)(A)(i) of the Act 

because the domestic producers (or 

workers) who support the Petition 

account for at least 25 percent of the 

total production of the relevant 

domestic like product. See Initiation 

Checklist at Attachment II. Finally, the 

domestic producers (or workers) have 

met the statutory criteria for industry 

support under section 732(c)(4)(A)(ii) of 

the Act because the domestic producers 

(or workers) who support the Petition 

account for more than 50 percent of the 

production of the relevant domestic like 

product produced by that portion of the 

industry expressing support for, or 

opposition to, the Petition. Accordingly, 

the Department determines that the 

Petition was filed on behalf of the 

domestic industry within the meaning 

of section 732(b)(1) of the Act. See 

Initiation Checklist at Attachment II. 

The Department finds that Petitioners 

filed the Petition on behalf of the 

domestic industry because they are 

interested parties as defined in sections 

771(9)(C) of the Act and have 

demonstrated sufficient industry 

support with respect to the antidumping 

investigation that they are requesting 

the Department initiate. See Initiation 

Checklist at Attachment II. 

Allegations and Evidence of Material 

Injury and Causation 

Petitioners allege that the U.S. 

industries producing the domestic like 

products are being materially injured, or 

are threatened with material injury, by 

reason of the imports of the subject 

merchandise sold at less than NV. 

Petitioners contend that the industries’ 

injured condition is illustrated by 

reduced market share, underselling and 

price depressing and suppressing 

effects, lost sales and revenue, reduced 

production, reduced capacity and 

capacity utilization, reduced shipments, 

reduced employment, and an overall 

decline in financial performance. We 

have assessed the allegations and 

supporting evidence regarding material 

injury, threat of material injury, and 

causation, and we have determined that 

these allegations are properly supported 

by adequate evidence and meet the 

statutory requirements for initiation. See 

Initiation Checklist at Attachment III 

(Analysis of Injury Allegations and 

Evidence of Material Injury and 

Causation). 

Allegations of Sales at Less Than Fair 

Value 

The following is a description of the 

allegation of sales at less than fair value 

upon which the Department based its 

decision to initiate this investigation of 

imports of certain phosphate salts from 

the PRC. The sources of data for the 

deductions and adjustments relating to 

the U.S. price and the factors of 

production are also discussed in the 

initiation checklist. See Initiation 

Checklist. 

U.S. Price 

Petitioners calculated export price 

(‘‘EP’’) based on documentation of 

actual sales and offers for sale obtained 

from confidential sources. See Initiation 

Checklist; see also Volume I of the 

Petition, at 26, and Supplement to the 

AD Petition at Exhibit 36. Petitioners 

made adjustments for distributor mark– 

ups and cost, insurance and freight 

(‘‘CIF’’) charges. See Initiation Checklist; 

see also Volume I of the Petition, at 26. 

Petitioners also relied on Census Bureau 

statistics for U.S. price. See Volume I of 

the Petition, at 45. We did not rely on 

one of the provided U.S. prices because, 

according to the supporting affidavit, it 

was based on an estimated, not actual, 

price from a rejected sales offer. See 

Initiation Checklist; see also 

Supplement to the AD Petition at 

Exhibit AD–39. 


jlentini on DSKJ8SOYB1PROD with NOTICES
54026 Federal Register / Vol. 74, No. 202 / Wednesday, October 21, 2009 / Notices 

Normal Value 

Petitioners state that the PRC is a 

non–market economy (‘‘NME’’) country 

and no determination to the contrary 

has been made by the Department. See 

Volume I of the Petition, at 27. In 

accordance with section 771(18)(C)(i) of 

the Act, the presumption of NME status 

remains in effect until revoked by the 

Department. The presumption of NME 

status for the PRC has not been revoked 

by the Department and, therefore, 

remains in effect for purposes of the 

initiation of this investigation. 

Accordingly, the normal value (‘‘NV’’) 

of the product for the PRC investigation 

is appropriately based on factors of 

production valued in a surrogate 

market–economy country in accordance 

with section 773(c) of the Act. In the 

course of the PRC investigation, all 

parties, including the public, will have 

the opportunity to provide relevant 

information related to the issue of the 

PRC’s NME status and the granting of 

separate rates to individual exporters. 

Petitioners contend that India is the 

appropriate surrogate country for the 

PRC because: 1) it is at a level of 

economic development comparable to 

that of the PRC; 2) it is a significant 

producer of comparable merchandise; 

and 3) information required to calculate 

unit factor costs and financial ratios is 

readily available. See Volume I of the 

Petition, at 27–30, and Volume 3 of the 

Petition at Exhibit AD–5. Based on the 

information provided by Petitioners, we 

believe that it is appropriate to use India 

as a surrogate country for initiation 

purposes. After initiation of the 

investigation, interested parties will 

have the opportunity to submit 

comments regarding surrogate country 

selection and, pursuant to 19 CFR 

351.301(c)(3)(i), will be provided an 

opportunity to submit publicly available 

information to value factors of 

production within 40 days after the date 

of publication of the preliminary 

determination. 

Petitioners calculated the NV and 

dumping margins using the 

Department’s NME methodology as 

required by 19 CFR 351.202(b)(7)(i)(C) 

and 19 CFR 351.408. Petitioners 

calculated separate NV and dumping 

margins for integrated and non– 

integrated producers in order to reflect 

the different production processes used. 

Petitioners based the calculations on the 

experience of ICL and its predecessor, 

Astaris, with a few exceptions based on 

recent articles concerning the PRC 

phosphorus industry. See Volume 1 of 

the Petition, at 30–31, Volume 3 of the 

Petition, at Exhibits AD 10 and AD–11, 

and Supplement to the AD Petition at 

13, and Exhibit AD–35. In calculating 

NV, Petitioners based the quantity of 

each of the inputs used to manufacture 

certain phosphate salts in the PRC on its 

own industry knowledge and 

production experience during and 

before the POI, with some supplemental 

information obtained from China 

Chemical Reporter. See Supplement to 

the AD Petition at 13–14, and Exhibit 

AD–35. Petitioner states that the 

constructed NV for each PRC producer 

may be different, depending on the level 

of integration. See Volume 1 of the 

Petition, at 31. 

Petitioner determined the 

consumption quantities of all raw 

materials and packing materials based 

on the production experience of ICL, 

Astaris, and China Chemical Reporter. 

See Supplement to the AD Petition at 

Exhibit AD–35. Petitioners valued the 

factors of production based on 

reasonably available, public surrogate 

country data, specifically, Indian import 

statistics from the World Trade Atlas 

(‘‘WTA’’). See Volume 3 of the Petition, 

at Exhibit AD–16. Petitioners excluded 

from these import statistics imports 

from countries previously determined 

by the Department to be NME countries 

and from Indonesia, the Republic of 

Korea, and Thailand as the Department 

has previously excluded prices from 

these countries because they maintain 

broadly available, non–industry-specific 

export subsidies. See id. In addition, the 

Petitioners made currency conversions, 

where necessary, based on the POI– 

average rupee/U.S. dollar exchange rate, 

as reported on the Department’s 

website. See Supplement to the AD 

Petition at 4–5, and Exhibit AD–26. 

Petitioners determined labor costs for 

STPP, TKPP, DKP and MKP using the 

labor consumption, in hours, derived 

from its ICL’s experience in 2008. See 

Supplement to the AD Petition Exhibit, 

at AD–35. Petitioners valued direct 

labor costs using the Department’s NME 

Wage Rate for the PRC at http:// 

ia.ita.doc.gov/wages/05wages/05wages– 

051608.html. See Volume 1 of the 

Petition, at 41. The Department 

determines that the surrogate values 

used by Petitioners are reasonably 

available and, thus, acceptable for 

purposes of initiation. 

Petitioners determined electricity 

costs for STPP, TKPP, DKP and MKP 

using the electricity consumption, in 

kilowatt hours, derived from ICL’s 

experience in 2008. See Supplement to 

the AD Petition, at Exhibit at AD–35. 

Petitioners valued electricity using the 

Indian electricity rate reported by the 

Central Electric Authority of the 

Government of India. See Volume 1 of 

the Petition, at 40 and Volume 3 of the 

Petition, at Exhibit AD–15. 

Petitioners determined natural gas 

costs for STPP, TKPP, DKP and MKP 

using the natural gas consumption 

derived from ICL’s experience in 2008. 

See Supplement to the AD Petition 

Exhibit at AD–35. Petitioners valued 

natural gas using Indian import 

statistics from WTA. See Volume 3 of 

the Petition, at Exhibit AD–15. 

Petitioners based factory overhead, 

selling, general and administrative 

(‘‘SG&A’’), and profit on data from Tata 

Chemicals, the largest Indian producer 

of phosphate salts, for the fiscal year 

April 2008 through March 2009. See 

Volume 3 of the Petition, at Exhibit AD– 

19. Petitioners state that Tata Chemicals 

is a producer of phosphate salts that is 

back–integrated to the production of 

phosphoric acid and that it produces 

more than one phosphate salt and 

various related upstream materials. See 

Volume 1 of the Petition, at 42–44. 

Petitioners were unable to identify a 

fully integrated producer of phosphate 

salts in India and anticipate that an 

adjustment may be necessary to account 

for differing levels of integration. 

However, Petitioners state that Tata 

Chemical provides the best information 

available to reasonably represent the 

cost structure of an integrated 

phosphate salt producer in the PRC. See 

id. Therefore, for purposes of the 

initiation, the Department finds 

Petitioners’ use of Tata Chemical’s 

unconsolidated financial ratios 

appropriate. 

Fair-Value Comparisons 

Based on the data provided by 

Petitioners, there is reason to believe 

that imports of certain phosphate salts 

from the PRC are being, or are likely to 

be, sold in the United States at less than 

fair value. Based on a comparison of 

U.S. prices and NV calculated in 

accordance with section 773(c) of the 

Act, the estimated dumping margins for 

certain phosphate salts from the PRC 

range from 33.7 percent to 177.4 

percent. See Initiation Checklist. 

Initiation of Antidumping Investigation 

Based upon the examination of the 

Petition on certain phosphate salts from 

the PRC, the Department finds that the 

Petition meets the requirements of 

section 732 of the Act. Therefore, we are 

initiating an antidumping duty 

investigation to determine whether 

imports of certain phosphate salts from 

the PRC are being, or are likely to be, 

sold in the United States at less than fair 

value. In accordance with section 

733(b)(1)(A) of the Act and 19 CFR 

351.205(b)(1), unless postponed, we will 


jlentini on DSKJ8SOYB1PROD with NOTICES
Federal Register / Vol. 74, No. 202 / Wednesday, October 21, 2009 / Notices 54027 

make our preliminary determinations no 

later than 140 days after the date of this 

initiation. 

Targeted–Dumping Allegations 

On December 10, 2008, the 

Department issued an interim final rule 

for the purpose of withdrawing 19 CFR 

351.414(f) and (g), the regulatory 

provisions governing the targeteddumping analysis in antidumping duty 

investigations, and the corresponding 

regulation governing the deadline for 

targeted–dumping allegations, 19 CFR 

351.301(d)(5). See Withdrawal of the 

Regulatory Provisions Governing 

Targeted Dumping in Antidumping 

Duty Investigations, 73 FR 74930 

(December 10, 2008). The Department 

stated that ‘‘{w}ithdrawal will allow the 

Department to exercise the discretion 

intended by the statute and, thereby, 

develop a practice that will allow 

interested parties to pursue all statutory 

avenues of relief in this area.’’ See id. at 

74931. 

In order to accomplish this objective, 

if any interested party wishes to make 

a targeted- dumping allegation in this 

investigation pursuant to section 

777A(d)(1)(B) of the Act, such 

allegations are due no later than 45 days 

before the scheduled date of the 

preliminary determination. 

Respondent Selection 

For this investigation, the Department 

will request quantity and value 

information from all known exporters 

and producers identified with complete 

contact information in the Petition, see 

Petition at Exhibit GEN–12. The 

quantity and value data received from 

NME exporters/producers will be used 

as the basis to select the mandatory 

respondents. 

The Department requires that the 

respondents submit a response to both 

the quantity and value questionnaire 

and the separate–rate application by the 

respective deadlines in order to receive 

consideration for separate–rate status. 

See Circular Welded Austenitic 

Stainless Pressure Pipe from the 

People’s Republic of China: Initiation of 

Antidumping Duty Investigation, 73 FR 

10221, 10225 (February 26, 2008); 

Initiation of Antidumping Duty 

Investigation: Certain Artist Canvas 

From the People’s Republic of China, 70 

FR 21996, 21999 (April 28, 2005). The 

Department will post the quantity and 

value questionnaire along with the filing 

instructions on the Import 

Administration website at http:// 

ia.ita.doc.gov/ia–highlights-and– 

news.html, and a response to the 

quantity and value questionnaire is due 

no later than November 4, 2009. 

Separate Rates 

In order to obtain separate–rate status 

in NME investigations, exporters and 

producers must submit a separate–rate 

status application. See our practice, 

described in Policy Bulletin 05.1: 

Separate–Rates Practice and Application 

of Combination Rates in Antidumping 

Investigations involving Non–Market 

Economy Countries, dated April 5, 2005 

(‘‘Separate Rates and Combination Rates 

Bulletin’’), available on the 

Department’s website at http:// 

ia.ita.doc.gov/policy/bull05–1.pdf. 

Based on our experience in processing 

the separate–rate applications in 

previous antidumping duty 

investigations, we have modified the 

application for this investigation to 

make it more administrable and easier 

for applicants to complete. See, e.g., 

Initiation of Antidumping Duty 

Investigation: Certain New Pneumatic 

Off–the-Road Tires From the People’s 

Republic of China, 72 FR 43591, 43594– 

95 (August 6, 2007). The specific 

requirements for submitting the 

separate–rate application in this 

investigation are outlined in detail in 

the application itself, which will be 

available on the Department’s website at 

http://ia.ita.doc.gov/ia–highlights-and– 

news.html on the date of publication of 

this initiation notice in the Federal 

Register. The separate–rate application 

will be due 60 days after publication of 

this initiation notice. For exporters and 

producers who submit a separate–rate 

status application and subsequently are 

selected as mandatory respondents, 

these exporters and producers will no 

longer be eligible for consideration for 

separate rate status unless they respond 

to all parts of the questionnaire as 

mandatory respondents. As noted in the 

‘‘Respondent Selection’’ section above, 

the Department requires that 

respondents submit a response to both 

the quantity and value questionnaire 

and the separate rate application by the 

respective deadlines in order to receive 

consideration for separate–rate status. 

Use of Combination Rates in an NME 

Investigation 

The Department will calculate 

combination rates for certain 

respondents that are eligible for a 

separate rate in this investigation. The 

Separate Rates and Combination Rates 

Bulletin states: 

{w}hile continuing the practice of 

assigning separate rates only to 

exporters, all separate rates that the 

Department will now assign in its 

NME investigations will be specific 

to those producers that supplied the 

exporter during the period of 

investigation. Note, however, that 

one rate is calculated for the 

exporter and all of the producers 

which supplied subject 

merchandise to it during the period 

of investigation. This practice 

applies both to mandatory 

respondents receiving an 

individually calculated separate 

rate as well as the pool of non– 

investigated firms receiving the 

weighted–average of the 

individually calculated rates. This 

practice is referred to as the 

application of ‘‘combination rates’’ 

because such rates apply to specific 

combinations of exporters and one 

or more producers. The cash– 

deposit rate assigned to an exporter 

will apply only to merchandise 

both exported by the firm in 

question and produced by a firm 

that supplied the exporter during 

the period of investigation. 

See Separate Rates and Combination 

Rates Bulletin at 6 (emphasis added). 

Distribution of Copies of the Petition 

In accordance with section 

732(b)(3)(A) of the Act and 19 CFR 

351.202(f), copies of the public versions 

of the Petition have been provided to 

the representatives of the Government of 

the PRC. Because of the large number of 

producers/exporters identified in the 

Petition, the Department considers the 

service of the public version of the 

Petition to the foreign producers/ 

exporters satisfied by the delivery of the 

public version to the Government of the 

PRC, consistent with 19 CFR 

351.203(c)(2). 

ITC Notification 

We have notified the ITC of our 

initiations, as required by section 732(d) 

of the Act. 

Preliminary Determinations by the ITC 

The ITC will preliminarily determine, 

no later than November 9, 2009, 

whether there is a reasonable indication 

that imports of certain phosphate salts 

from the PRC are materially injuring, or 

threatening material injury to a U.S. 

industry. A negative ITC determination 

will result in the investigation being 

terminated; otherwise, this investigation 

will proceed according to statutory and 

regulatory time limits. This notice is 

issued and published pursuant to 

section 777(i) of the Act. 


jlentini on DSKJ8SOYB1PROD with NOTICES
54028 Federal Register / Vol. 74, No. 202 / Wednesday, October 21, 2009 / Notices 

Dated: October 14, 2009. 

Ronald K. Lorentzen, 

Acting Assistant Secretary for Import 

Administration. 

Appendix I 

Scope of the Investigation 

The phosphate salts covered by this 

investigation include Sodium 

Tripolyphosphate (STPP), whether 

anhydrous or in solution, anhydrous 

Monopotassium Phosphate (MKP), 

anhydrous Dipotassium Phosphate 

(DKP) and Tetrapotassium 

Pyrophosphate (TKPP), whether 

anhydrous or in solution (collectively 

‘‘phosphate salts’’). 

STPP, also known as Sodium 

triphosphate, Tripoly or Pentasodium 

triposphate, is a sodium polyphosphate 

with the formula Na5O10P3. The 

American Chemical Society, Chemical 

Abstract Service (‘‘CAS’’) registry 

number for STPP is 7758–29–4. STPP is 

typically 25% phosphorus, 31% sodium 

and and 57% diphosphorus pentoxide 

(P2O5). STPP is classified under 

heading 2835.31.0000, HTSUS. 

TKPP, also known as normal potassium 

pyrophosphate, Diphosphoric acid or 

Tetrapotassium salt, is a potassium salt 

with the formula K4P2O7. The CAS 

registry number for TKPP is 7320–34–5. 

TKPP is typically 18.7% phosphorus 

and 47.3% potassium. It is generally 

greater than or equal to 43.0% P2O5 

content. TKPP is classified under 

heading 2835.39.1000, HTSUS. 

MKP, also known as Potassium 

dihydrogen phosphate, KDP, or 

Monobasic potassium phosphate, is a 

potassium salt with the formula 

KH2PO4. The CAS registry number for 

MKP is 7778–77–0. MKP is typically 

22.7% phosphorus, 28.7% potassium 

and 52% P2O5. MKP is classified under 

heading 2835.24.0000, HTSUS. 

DKP, also known as Dipotassium salt, 

Dipotassium hydrogen orthophosphate 

or Potassium phosphate, dibasic, has a 

chemical formula of K2HPO4. The CAS 

registry number for DKP is 7758–11–4. 

DKP is typically 17.8% phosphorus, 

44.8% potassium and 40% P2O5 

content. DKP is classified under heading 

2835.24.0000, HTSUS. 

The products covered by this 

investigation include the foregoing 

phosphate salts in all grades, whether 

food grade or technical grade. The 

product covered by this investigation 

includes anhydrous MKP and DKP 

without regard to the physical form, 

whether crushed, granule, powder or 

fines. Also covered are all forms of 

STPP and TKPP, whether crushed, 

granule, powder, fines or solution. 

For purposes of the investigation, the 

narrative description is dispositive, not 

the tariff heading, American Chemical 

Society, CAS registry number or CAS 

name, or the specific percentage 

chemical composition identified above. 

[FR Doc. E9–25340 Filed 10–20–09; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

United States Patent and Trademark 

Office 

[Docket No. [PTO–P–2009–0039] 

Request for Comments and Notice of 

Roundtable on Work Sharing for 

Patent Applications 

AGENCY: United States Patent and 

Trademark Office, Department of 

Commerce. 

ACTION: Notice of public meeting; 

request for comments. 

54778 Federal Register / Vol. 74, No. 204 / Friday, October 23, 2009 / Notices 

1See Petition for the Imposition of Antidumping 

and Countervailing Duties Pursuant to Sections 701 

and 731 of the Tariff Act of 1930, as Amended: 

Certain Sodium and Potassium Phosphate Salts 

from the People’s Republic of China, dated 

September 24, 2009 (‘‘Petition’’). 

• Proposed Draft Annex on Leafy 

Green Vegetables, Including Leafy 

Herbs, to the Code of Hygienic Practice 

for Fresh Fruits and Vegetables at Step 

4; 

• Proposed Draft Code of Hygienic 

Practice for Vibrio spp. in Seafood at 

Step 4; 

• Proposed Draft Annex on Control 

Measures for Vibrio parahaemolyticus 

and Vibrio vulnificus in Molluscan 

Shellfish; 

• Proposed Draft Code of Hygienic 

Practice for Control of Viruses in Food 

at Step 4; 

• Inconsistencies Arising in 

Documents Elaborated by the CCFH and 

Adopted by the Codex; 

• Discussion of the Report of the Ad 

Hoc Working Group for Establishment 

of CCFH Work Priorities. 

Each issue listed will be fully 

described in documents distributed, or 

to be distributed, by the Secretariat prior 

to the meeting. Members of the public 

may access copies of these documents 

(see ADDRESSES). 

Public Meeting 

At the October 28, 2009, public 

meeting, draft U.S. positions on the 

agenda items will be described and 

discussed, and attendees will have the 

opportunity to pose questions and offer 

comments. Written comments may be 

offered at the meeting or sent to the U.S. 

Delegate for the 41st Session of the 

CCFH, Donald Zink (see ADDRESSES). 

Written comments should state that they 

relate to activities of the 41st Session of 

the CCFH. 

Additional Public Notification 

Public awareness of all segments of 

rulemaking and policy development is 

important. Consequently, in an effort to 

ensure that minorities, women, and 

persons with disabilities are aware of 

this notice, FSIS will announce it online 

through the FSIS Web page located at 

http://www.fsis.usda.gov/regulations/ 

2009_Notices_Index/. FSIS will also 

make copies of this Federal Register 

publication available through the FSIS 

Constituent Update, which is used to 

provide information regarding FSIS 

policies, procedures, regulations, 

Federal Register notices, FSIS public 

meetings, and other types of information 

that could affect or would be of interest 

to constituents and stakeholders. The 

FSIS Constituent Update is 

communicated via Listserv, a free 

electronic mail subscription service for 

industry, trade groups, consumer 

interest groups, health professionals, 

and other individuals who have asked 

to be included. The FSIS Constituent 

Update is also available on the FSIS 

Web page. Through the Listserv and 

Web page, FSIS is able to provide 

information to a much broader and more 

diverse audience. In addition, FSIS 

offers an electronic mail subscription 

service which provides automatic and 

customized access to selected food 

safety news and information. This 

service is available at http:// 

www.fsis.usda.gov/news_and_events/ 

email_subscription/. Options range from 

recalls to export information to 

regulations, directives and notices. 

Customers can add or delete 

subscriptions themselves, and have the 

option to password protect their 

accounts. 

Done at Washington, DC, on October 20, 

2009. 

Karen Stuck, 

U.S. Manager for Codex Alimentarius. 

[FR Doc. E9–25527 Filed 10–22–09; 8:45 am] 

BILLING CODE 3410–DM–P 

APPALACHIAN STATES LOW-LEVEL 

RADIOACTIVE WASTE COMMISSION 

Annual Meeting 

Time and Date: 10 a.m.–12:30 p.m. 

November 6, 2009. 

Place: Harrisburg Hilton and Towers, 

One North Second Street, Harrisburg, 

PA 17101. 

Status: The meeting will be open to 

the public. 

Matters to be Considered: 

Portions Open to the Public: The 

primary purpose of this meeting is to (1) 

review the independent auditors’ report 

of Commission’s financial statements for 

fiscal year 2008–2009; (2) Review the 

Low-Level Radioactive Waste (LLRW) 

Disposal and Storage information for 

2008; (3) Consider a proposed budget for 

fiscal year 2010–2011; (4) Review 

regional and national issues regarding 

LLRW storage, management and 

disposal; and (5) Elect the Commission’s 

Officers. 

Portions Closed to the Public: 

Executive Session, if deemed necessary, 

will be announced at the meeting. 

Contact Person for More Information: 

Rich Janati, Administrator of the 

Commission, at 717–787–2163. 

Rich Janati, 

Administrator, Appalachian Compact 

Commission. 

[FR Doc. E9–25502 Filed 10–22–09; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[C–570–963] 

Certain Sodium and Potassium 

Phosphate Salts From the People’s 

Republic of China: Initiation of 

Countervailing Duty Investigation 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

DATES: Effective Date: October 23, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Yasmin Nair or Joseph Shuler, AD/CVD 

Operations, Import Administration, 

International Trade Administration, 

U.S. Department of Commerce, 14th 

Street and Constitution Avenue, NW., 

Washington, DC 20230; telephone: (202) 

482–3813 and (202) 482–1293, 

respectively. 

SUPPLEMENTARY INFORMATION: 

The Petition 

On September 24, 2009, the 

Department of Commerce 

(‘‘Department’’) received a petition filed 

in proper form by ICL Performance 

Products LP and Prayon, Inc. 

(collectively, ‘‘Petitioners’’), domestic 

producers of certain sodium and 

potassium phosphate salts.1 In response 

to the Department’s requests, Petitioners 

provided timely information 

supplementing the Petition on October 

1, 2009. 

In accordance with section 702(b)(1) 

of the Tariff Act of 1930, as amended 

(‘‘the Act’’), Petitioners allege that 

manufacturers, producers, or exporters 

of sodium and potassium phosphate 

salts in the People’s Republic of China 

(‘‘PRC’’) receive countervailable 

subsidies within the meaning of section 

701 of the Act, and that such imports 

are materially injuring, or threatening 

material injury to, an industry in the 

United States. 

The Department finds that Petitioners 

filed the Petition on behalf of the 

domestic industry because they are 

interested parties as defined in section 

771(9)(C) and (D) of the Act, and 

Petitioners have demonstrated sufficient 

industry support with respect to the 

countervailing duty (‘‘CVD’’) 

investigation (see ‘‘Determination of 

Industry Support for the Petition’’ 

section below). 


CPrice-Sewell on DSKGBLS3C1PROD with NOTICES
Federal Register / Vol. 74, No. 204 / Friday, October 23, 2009 / Notices 54779 

Period of Investigation 

The period of investigation is January 

1, 2008, through December 31, 2008. 

Scope of Investigation 

The phosphate salts covered by this 

investigation include Sodium 

Tripolyphosphate (‘‘STPP’’), whether 

anhydrous or in solution, anhydrous 

Monopotassium Phosphate (‘‘MKP’’), 

anhydrous Dipotassium Phosphate 

(‘‘DKP’’) and Tetrapotassium 

Pyrophosphate (‘‘TKPP’’), whether 

anhydrous or in solution (collectively 

‘‘phosphate salts’’). 

STPP, also known as Sodium 

triphosphate, Tripoly or Pentasodium 

triposphate, is a sodium polyphosphate 

with the formula Na5O10P3. The 

American Chemical Society, Chemical 

Abstract Service (‘‘CAS’’) registry 

number for STPP is 7758–29–4. STPP is 

typically 25% phosphorus, 31% sodium 

and and 57% diphosphorus pentoxide 

(P2O5). STPP is classified under heading 

2835.31.0000, HTSUS. 

TKPP, also known as normal 

potassium pyrophosphate, 

Diphosphoric acid or Tetrapotassium 

salt, is a potassium salt with the formula 

K4P2O7. The CAS registry number for 

TKPP is 7320–34–5. TKPP is typically 

18.7% phosphorus and 47.3% 

potassium. It is generally greater than or 

equal to 43.0% P2O5 content. TKPP is 

classified under heading 2835.39.1000, 

HTSUS. 

MKP, also known as Potassium 

dihydrogen phosphate, KDP, or 

Monobasic potassium phosphate, is a 

potassium salt with the formula 

KH2PO4. The CAS registry number for 

MKP is 7778–77–0. MKP is typically 

22.7% phosphorus, 28.7% potassium 

and 52% P2O5. MKP is classified under 

heading 2835.24.0000, HTSUS. 

DKP, also known as Dipotassium salt, 

Dipotassium hydrogen orthophosphate 

or Potassium phosphate, dibasic, has a 

chemical formula of K2HPO4. The CAS 

registry number for DKP is 7758–11–4. 

DKP is typically 17.8% phosphorus, 

44.8% potassium and 40% P2O5

content. DKP is classified under heading 

2835.24.0000, HTSUS. 

The products covered by this 

investigation include the foregoing 

phosphate salts in all grades, whether 

food grade or technical grade. The 

product covered by this investigation 

includes anhydrous MKP and DKP 

without regard to the physical form, 

whether crushed, granule, powder or 

fines. Also covered are all forms of 

STPP and TKPP, whether crushed, 

granule, powder, fines or solution. 

For purposes of the investigation, the 

narrative description is dispositive, not 

the tariff heading, American Chemical 

Society, CAS registry number or CAS 

name, or the specific percentage 

chemical composition identified above. 

Comments on Scope of Investigation 

During our review of the Petition, we 

discussed the scope with Petitioners to 

ensure that it is an accurate reflection of 

the products for which the domestic 

industry is seeking relief. Moreover, as 

discussed in the preamble to the 

Department’s regulations (Antidumping 

Duties; Countervailing Duties; Final 

Rule, 62 FR 27296, 27323 (May 19, 

1997)), we are setting aside a period for 

interested parties to raise issues 

regarding product coverage. The 

Department encourages all interested 

parties to submit such comments by 

November 3, 2009, twenty calendar days 

from the signature date of this notice. 

Comments should be addressed to 

Import Administration’s APO/Dockets 

Unit, Room 1870, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW., Washington, DC 20230. 

The period of scope consultations is 

intended to provide the Department 

with ample opportunity to consider all 

comments and to consult with parties 

prior to the issuance of the preliminary 

determinations. 

Consultations 

Pursuant to section 702(b)(4)(A)(ii) of 

the Act, on September 25, 2009, the 

Department invited representatives of 

the Government of the PRC for 

consultations with respect to the CVD 

petition. The Government of the PRC 

did not request such consultations. On 

October 13, 2009, the GOC requested 

that the Department extend the deadline 

for consultations. The Department 

responded that it could not extend this 

deadline for pre-initiation consultations, 

but would consult with the GOC in the 

course of this proceeding if initiated, as 

required by Article 13.2 of the Subsidies 

and Countervailing Measures 

Agreement. 

Determination of Industry Support for 

the Petition 

Section 702(b)(1) of the Act requires 

that a petition be filed on behalf of the 

domestic industry. Section 702(c)(4)(A) 

of the Act provides that a petition meets 

this requirement if the domestic 

producers or workers who support the 

Petition account for: (i) At least 25 

percent of the total production of the 

domestic like product; and (ii) more 

than 50 percent of the production of the 

domestic like product produced by that 

portion of the industry expressing 

support for, or opposition to, the 

Petition. Moreover, section 702(c)(4)(D) 

of the Act provides that, if the Petition 

does not establish support of domestic 

producers or workers accounting for 

more than 50 percent of the total 

production of the domestic like product, 

the Department shall: (i) Poll the 

industry or rely on other information in 

order to determine if there is support for 

the Petition, as required by 

subparagraph (A), or (ii) determine 

industry support using a statistically 

valid sampling method. 

Section 771(4)(A) of the Act defines 

the ‘‘industry’’ as the producers as a 

whole of a domestic like product. Thus, 

to determine whether a petition has the 

requisite industry support, the statute 

directs the Department to look to 

producers and workers who produce the 

domestic like product. The U.S. 

International Trade Commission 

(‘‘ITC’’), which is responsible for 

determining whether ‘‘the domestic 

industry’’ has been injured, must also 

determine what constitutes a domestic 

like product in order to define the 

industry. While both the Department 

and the ITC must apply the same 

statutory definition regarding the 

domestic like product (section 771(10) 

of the Act), they do so for different 

purposes and pursuant to a separate and 

distinct authority. In addition, the 

Department’s determination is subject to 

limitations of time and information. 

Although this may result in different 

definitions of the like product, such 

differences do not render the decision of 

either agency contrary to law. See 

USEC, Inc. v. United States, 132 F. 

Supp. 2d 1, 8 (CIT 2001), citing Algoma 

Steel Corp. Ltd. v. United States, 688 F. 

Supp. 639, 644 (CIT 1988), aff’d 865 

F.2d 240 (Fed. Cir. 1989), cert. denied 

492 U.S. 919 (1989). 

Section 771(10) of the Act defines the 

domestic like product as ‘‘a product 

which is like, or in the absence of like, 

most similar in characteristics and uses 

with, the article subject to an 

investigation under this subtitle.’’ 

Although the reference point from 

which the domestic like product 

analysis begins is usually ‘‘the article 

subject to an investigation’’ (i.e., the 

class or kind of merchandise to be 

investigated, which normally will be the 

scope as defined in the Petition), 

Petitioners submit that there is one class 

or kind of merchandise, but four 

domestic like products. 

The four like products, when 

considered together, correspond to the 

product scope description. Based on our 

analysis of the information submitted on 

the record, we have determined that 

STPP, MKP, DKP, and TKPP constitute 

four domestic like products and we 

have analyzed industry support in terms 


CPrice-Sewell on DSKGBLS3C1PROD with NOTICES
54780 Federal Register / Vol. 74, No. 204 / Friday, October 23, 2009 / Notices 

of those domestic like products. For a 

discussion of the domestic like product 

analysis in this case, see 

‘‘Countervailing Duty Investigation 

Initiation Checklist: Certain Sodium and 

Potassium Phosphate Salts from the 

People’s Republic of China (‘‘Initiation 

Checklist’’), at Attachment II, Analysis 

of Industry Support for the Petitions 

Covering Certain Sodium and Potassium 

Phosphate Salts from the People’s 

Republic of China, on file in the Central 

Records Unit (‘‘CRU’’), Room 1117 of 

the main Department of Commerce 

building. 

With regard to section 702(c)(4)(A) of 

the Act, in determining whether 

Petitioners have standing (i.e., the 

domestic workers and producers 

supporting the Petition account for (1) at 

least 25 percent of the total production 

of the domestic like product and (2) 

more than 50 percent of the production 

of the domestic like product produced 

by that portion of the industry 

expressing support for, or opposition to, 

the Petition), we considered the 

industry support data contained in the 

Petition with reference to the domestic 

like products. To establish industry 

support, Petitioners provided their own 

production volume of the domestic like 

products for calendar year 2008, and 

compared that to total production 

volume of the domestic like products for 

the industry. We have relied upon data 

Petitioners provided for purposes of 

measuring industry support. For further 

discussion, see Initiation Checklist at 

Attachment II. 

The Department’s review of the data 

provided in the Petition, supplemental 

submissions, and other information 

readily available to the Department 

indicates that Petitioners have 

established industry support for each of 

the four like products. First, the Petition 

establishes support from domestic 

producers (or workers) accounting for 

more than 50 percent of the total 

production of the domestic like 

products and, as such, the Department 

is not required to take further action in 

order to evaluate industry support (e.g., 

polling). See section 702(c)(4)(D) of the 

Act and Initiation Checklist at 

Attachment II. Second, the domestic 

producers (or workers) have met the 

statutory criteria for industry support 

under section 702(c)(4)(A)(i) of the Act 

because the domestic producers (or 

workers) who support the Petition 

account for at least 25 percent of the 

total production of the relevant 

domestic like product. See Initiation 

Checklist at Attachment II. Finally, the 

domestic producers (or workers) have 

met the statutory criteria for industry 

support under section 702(c)(4)(A)(ii) of 

the Act because the domestic producers 

(or workers) who support the Petition 

account for more than 50 percent of the 

production of the relevant domestic like 

product produced by that portion of the 

industry expressing support for, or 

opposition to, the Petition. Accordingly, 

the Department determines that the 

Petition was filed on behalf of the 

domestic industry within the meaning 

of section 702(b)(1) of the Act. See 

Initiation Checklist at Attachment II. 

The Department finds that Petitioners 

filed the Petition on behalf of the 

domestic industry because they are 

interested parties as defined in sections 

771(9)(C) of the Act and have 

demonstrated sufficient industry 

support with respect to the 

countervailing duty investigation that 

they are requesting the Department 

initiate. See Initiation Checklist at 

Attachment II. 

Injury Test 

Because the PRC is a ‘‘Subsidies 

Agreement Country’’ within the 

meaning of section 701(b) of the Act, 

section 701(a)(2) of the Act applies to 

this investigation. Accordingly, the ITC 

must determine whether imports of the 

subject merchandise from the PRC 

materially injure, or threaten material 

injury to, a U.S. industry. 

Allegations and Evidence of Material 

Injury and Causation 

Petitioners allege that imports of 

certain sodium and potassium 

phosphate salts from the PRC are 

benefitting from countervailable 

subsidies and that such imports are 

causing, or threaten to cause, material 

injury to the domestic industry 

producing certain sodium and 

potassium phosphate salts. In addition, 

Petitioners allege that subsidized 

imports exceed the negligibility 

threshold provided for under section 

771(24)(A) of the Act. 

Petitioners contend that the 

industries’ injured condition is 

illustrated by reduced market share, 

underselling and price depressing and 

suppressing effects, lost sales and 

revenue, reduced production, reduced 

capacity and capacity utilization, 

reduced shipments, reduced 

employment, and an overall decline in 

financial performance. We have 

assessed the allegations and supporting 

evidence regarding material injury, 

threat of material injury, and causation, 

and we have determined that these 

allegations are properly supported by 

adequate evidence and meet the 

statutory requirements for initiation. See 

Initiation Checklist at Attachment III 

(Analysis of Injury Allegations and 

Evidence of Material Injury and 

Causation). 

Initiation of Countervailing Duty 

Investigation 

Section 702(b) of the Act requires the 

Department to initiate a CVD proceeding 

whenever an interested party files a 

petition on behalf of an industry that: 

(1) Alleges the elements necessary for an 

imposition of a duty under section 

701(a) of the Act; and (2) is 

accompanied by information reasonably 

available to the Petitioner(s) supporting 

the allegations. 

The Department has examined the 

CVD petition on sodium and potassium 

phosphate salts from the PRC and finds 

that it complies with the requirements 

of section 702(b) of the Act. Therefore, 

in accordance with section 702(b) of the 

Act, we are initiating a CVD 

investigation to determine whether 

manufacturers, producers, or exporters 

of sodium and potassium phosphate 

salts in the PRC receive countervailable 

subsidies. For a discussion of evidence 

supporting our initiation determination, 

see Initiation Checklist. 

We are including in our investigation 

the following programs alleged in the 

Petition to have provided 

countervailable subsidies to producers 

and exporters of the subject 

merchandise in the PRC: 

A. Income Tax Programs 

1. ‘‘Two Free, Three Half’’ Tax 

Exemption for Foreign Invested 

Enterprises (‘‘FIEs’’). 

2. Income Tax Subsidies for FIEs 

Based on Geographic Location. 

3. Income Tax Exemption Programs 

For Export-Oriented FIEs. 

4. Local Income Tax Exemption or 

Reduction Program for ‘‘Productive’’ 

FIEs. 

5. Preferential Tax Subsidies for 

Research and Development by FIEs. 

6. Reduced Income Tax Rate for Highand New-Technology Enterprises. 

7. Income Tax Credit on Purchases of 

Domestically Produced Equipment. 

8. Reduction in or Exemption from 

the Fixed Assets Investment Orientation 

Regulatory Tax. 

B. Grant Programs 

1. Subsidies to Loss-Making StateOwned Enterprises (‘‘SOEs’’) by the 

Government of China (‘‘GOC’’) at the 

National Level. 

2. Subsidies to Loss-Making SOEs by 

the GOC at the Provincial Level. 

3. Grants Pursuant to the State Key 

Technology Renovation Project Fund. 

4. Grants Pursuant to the ‘‘Famous 

Brands’’ Program. 


CPrice-Sewell on DSKGBLS3C1PROD with NOTICES
Federal Register / Vol. 74, No. 204 / Friday, October 23, 2009 / Notices 54781 

C. Tariff and Indirect Tax Exemption 

Programs 

1. Value Added Tax (‘‘VAT’’) Refunds 

for FIEs Purchasing Domestically 

Produced Equipment. 

D. VAT and Tariff Exemptions on 

Imported Equipment 

E. Preferential Lending Policies 

1. Discounted Loans for Export 

Oriented Industries (‘‘Honorable 

Enterprises’’). 

F. Government Restraints on Exports of 

Yellow Phosphorus 

For further information explaining why 

the Department is investigating these 

programs, see Initiation Checklist. 

We are not including in our 

investigation the following program 

alleged to benefit producers and 

exporters of the subject merchandise in 

the PRC: 

Provision of Electricity for Less Than 

Adequate Remuneration 

Petitioners allege that the GOC, 

through the National Development and 

Reform Commission, regulates the 

power rates for certain industries, 

including the yellow phosphorus 

industry and that differential rates are 

provided to the yellow phosphorus 

industry. Petitioners have not provided 

information that supports the allegation 

that differential pricing of electricity is 

provided to producers of the subject 

merchandise. Consequently, we do not 

plan on investigating this program. 

Respondent Selection 

For this investigation, the Department 

expects to select respondents based on 

U.S. Customs and Border Protection 

(‘‘CBP’’) data for U.S. imports during the 

period of investigation. We intend to 

release the CBP data under the 

Administrative Protective Order 

(‘‘APO’’) to all parties with access to 

information protected by APO within 

five days of the announcement of the 

initiation of this investigation. 

Interested parties may submit comments 

regarding the CBP data and respondent 

selection within seven calendar days of 

publication of this notice. We intend to 

make our decision regarding respondent 

selection within 20 days of publication 

of this Federal Register notice. 

Interested parties must submit 

applications for disclosure under APO 

in accordance with 19 CFR 351.305(b). 

Instructions for filing such applications 

may be found on the Department’s Web 

site at http://ia.ita.doc.gov/apo. 

Distribution of Copies of the Petition 

In accordance with section 

702(b)(4)(A)(i) of the Act, a copy of the 

public version of the Petition has been 

provided to the Government of the PRC. 

As soon as and to the extent practicable, 

we will attempt to provide a copy of the 

public version of the Petition to each 

exporter named in the Petition, 

consistent with section 351.203(c)(2) of 

the Department’s regulations. 

ITC Notification 

We have notified the ITC of our 

initiation, as required by section 702(d) 

of the Act and 19 CFR 351.203(c)(1). 

Preliminary Determination by the ITC 

The ITC will preliminarily determine, 

within 25 days after the date on which 

it receives notice of the initiation, 

whether there is a reasonable indication 

that imports of subsidized sodium and 

potassium phosphate salts from the PRC 

are causing material injury, or 

threatening to cause material injury, to 

a U.S. industry. See section 703(a)(2) of 

the Act. A negative ITC determination 

will result in the investigation being 

terminated; otherwise, the investigation 

will proceed according to statutory and 

regulatory time limits. 

This notice is issued and published 

pursuant to section 777(i) of the Act and 

19 CFR 351.203(c)(1). 

Dated: October 14, 2009. 

Ronald K. Lorentzen, 

Acting Assistant Secretary for Import 

Administration. 

Attachment I 

Scope of the Investigation 

The phosphate salts covered by this 

investigation include Sodium 

Tripolyphosphate (STPP), whether 

anhydrous or in solution, anhydrous 

Monopotassium Phosphate (MKP), 

anhydrous Dipotassium Phosphate 

(DKP) and Tetrapotassium 

Pyrophosphate (TKPP), whether 

anhydrous or in solution (collectively 

‘‘phosphate salts’’). 

STPP, also known as Sodium 

triphosphate, Tripoly or Pentasodium 

triposphate, is a sodium polyphosphate 

with the formula Na5O10P3. The 

American Chemical Society, Chemical 

Abstract Service (‘‘CAS’’) registry 

number for STPP is 7758–29–4. STPP is 

typically 25% phosphorus, 31% sodium 

and and 57% diphosphorus pentoxide 

(P2O5). STPP is classified under heading 

2835.31.0000, HTSUS. 

TKPP, also known as normal 

potassium pyrophosphate, 

Diphosphoric acid or Tetrapotassium 

salt, is a potassium salt with the formula 

K4P2O7. The CAS registry number for 

TKPP is 7320–34–5. TKPP is typically 

18.7% phosphorus and 47.3% 

potassium. It is generally greater than or 

equal to 43.0% P2O5 content. TKPP is 

classified under heading 2835.39.1000, 

HTSUS. 

MKP, also known as Potassium 

dihydrogen phosphate, KDP, or 

Monobasic potassium phosphate, is a 

potassium salt with the formula 

KH2PO4. The CAS registry number for 

MKP is 7778–77–0. MKP is typically 

22.7% phosphorus, 28.7% potassium 

and 52% P2O5. MKP is classified under 

heading 2835.24.0000, HTSUS. 

DKP, also known as Dipotassium salt, 

Dipotassium hydrogen orthophosphate 

or Potassium phosphate, dibasic, has a 

chemical formula of K2HPO4. The CAS 

registry number for DKP is 7758–11–4. 

DKP is typically 17.8% phosphorus, 

44.8% potassium and 40% P2O5

content. DKP is classified under heading 

2835.24.0000, HTSUS. 

The products covered by this 

investigation include the foregoing 

phosphate salts in all grades, whether 

food grade or technical grade. The 

product covered by this investigation 

includes anhydrous MKP and DKP 

without regard to the physical form, 

whether crushed, granule, powder or 

fines. Also covered are all forms of 

STPP and TKPP, whether crushed, 

granule, powder, fines or solution. 

For purposes of the investigation, the 

narrative description is dispositive, not 

the tariff heading, American Chemical 

Society, CAS registry number or CAS 

name, or the specific percentage 

chemical composition identified above. 

[FR Doc. E9–25571 Filed 10–22–09; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

National Institute of Standards and 

Technology 

[Docket Number: 0910051336–91337–01] 

Draft Report on the Collapse of the 

Dallas Cowboys Indoor Practice 

Facility, May 2, 2009; Request for 

Comments 

AGENCY: National Institute of Standards 

and Technology, Department of 

Commerce. 

ACTION: Notice; request for comments. 

SUMMARY: The National Institute of 

Standards and Technology (NIST) seeks 

comments on the draft report of its 

study of the Dallas Cowboys Indoor 

Practice Facility Collapse, May 2, 2009. 

DATES: Comments must be received on 

or before 12 noon Eastern Time, 

November 6, 2009. 


CPrice-Sewell on DSKGBLS3C1PROD with NOTICES
B-1

APPENDIX B

CONFERENCE WITNESSES

B-3

CALENDAR OF THE PUBLIC CONFERENCE

Those listed below appeared as witnesses at the United States International Trade

Commission’s conference that was held in connection with the following investigation:

CERTAIN SODIUM AND POTASSIUM PHOSPHATE SALTS FROM CHINA

Investigation Nos. 701-TA-473 and 731-TA-1173 (Preliminary)

October 15, 2009 - 9:30 am

The conference was held in Room 101 (Main Hearing Room) of the United States

International Trade Commission Building, 500 E Street, SW, Washington, DC.

IN SUPPORT OF THE IMPOSITION OF COUNTERVAILING/ANTIDUMPING DUTIES:

Williams Mullen

Washington, DC

on behalf of

ICL Performance Products LP

Angela Schewe, Business Director for Industrial Phosphates

Nancy Stachiw, Director of Technical Service and Applications Research

William Fyock, Director of Engineering and Technology

Anthony Repaso, Corporate Counsel

Prayon, Inc.

Allen Sexton, Vice President for Sales

Beth Allen, Vice President for Finance and Procurement

James R Cannon, Jr. )

Dean A. Barclay )--OF COUNSEL

Benjamin Arden )
B-4

IN OPPOSITION TO THE IMPOSITION OF COUNTERVAILING/ANTIDUMPING DUTIES:

Troutman SandersLLP

Washington, DC

on behalf of

Hubei Xingfa Chemicals Group Co., Ltd., Sichuan Mianzhu Norwest Phosphate

Chemical Company Limited, Wuhan Waking Lion Chemicals Co., Ltd., Thermphos

(China) Food Additive Co., Ltd., and Lianyungang Natiprol (INT’L) Co., Ltd.

Xiong Wei, President, Wenda Co. Ltd.

Huamin Li, Business Coordinator, Wenda America

Deborah B. Crull, National Accounts Manager, Wenda America

Brian Metzger, National Sales Manager, Wenda America

Peter Oberacker Jr., Technical Sales and Service Manager, Wenda America

Julie Mendoza )

R. Will Planert )--OF COUNSEL

Mary Hodgins )
C-1

APPENDIX C

SUMMARY DATA

C-3

Table C-1

DKP: Summary data concerning the U.S. market, 2006-08, January-June 2008, and January-June

2009

* * * * * * *
C-4

Table C-2

MKP: Summary data concerning the U.S. market, 2006-08, January-June 2008, and January-June

2009

* * * * * * *
Table C-3

STPP: Summary data concerning the U.S. market, 2006-08, January-June 2008, and January-June 2009

(Quantity=1,000 pounds, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per pound; 

period changes=percent, except where noted)

Reported data Period changes

January-June January-June Jan.-June

Item 2006 2007 2008 2008 2009 2006-08 2006-07 2007-08 2008-09

U.S. consumption quantity:

 Amount . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Producers' share (1) . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Other sources . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Total imports . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

U.S. consumption value:

 Amount . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Producers' share (1) . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Other sources . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Total imports . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

U.S. imports from:

 China:

 Quantity . . . . . . . . . . . . . . . . . . 18,828 17,153 25,969 7,606 35,550 37.9 -8.9 51.4 367.4

 Value . . . . . . . . . . . . . . . . . . . . 7,075 6,449 17,255 4,079 18,230 143.9 -8.9 167.6 346.9

 Unit value . . . . . . . . . . . . . . . . . $0.38 $0.38 $0.66 $0.54 $0.51 76.8 0.0 76.7 -4.4

 Ending inventory quantity . . . . . 1,563 1,472 6,818 3,709 13,428 336.2 -5.8 363.2 262.1

 Other sources:

 Quantity . . . . . . . . . . . . . . . . . . 264,891 251,500 257,609 130,191 49,533 -2.7 -5.1 2.4 -62.0

 Value . . . . . . . . . . . . . . . . . . . . 104,563 98,846 153,343 63,173 35,371 46.7 -5.5 55.1 -44.0

 Unit value . . . . . . . . . . . . . . . . . $0.39 $0.39 $0.60 $0.49 $0.71 50.8 -0.4 51.5 47.2

 Ending inventory quantity . . . . . 28,313 22,716 33,517 20,845 15,189 18.4 -19.8 47.6 -27.1

 All sources:

 Quantity . . . . . . . . . . . . . . . . . . 283,719 268,653 283,579 137,797 85,083 -0.0 -5.3 5.6 -38.3

 Value . . . . . . . . . . . . . . . . . . . . 111,639 105,294 170,598 67,252 53,601 52.8 -5.7 62.0 -20.3

 Unit value . . . . . . . . . . . . . . . . . $0.39 $0.39 $0.60 $0.49 $0.63 52.9 -0.4 53.5 29.1

 Ending inventory quantity . . . . . 29,876 24,187 40,335 24,553 28,618 35.0 -19.0 66.8 16.6

Table continued on next page.

C-5
Table C-3--Continued

STPP: Summary data concerning the U.S. market, 2006-08, January-June 2008, and January-June 2009

(Quantity=1,000 pounds, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per pound; 

period changes=percent, except where noted)

Reported data Period changes

January-June January-June Jan.-June

Item 2006 2007 2008 2008 2009 2006-08 2006-07 2007-08 2008-09

U.S. producers':

 Average capacity quantity . . . . . *** *** *** *** *** *** *** *** ***

 Production quantity . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Capacity utilization (1) . . . . . . . . *** *** *** *** *** *** *** *** ***

 U.S. shipments:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Export shipments:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . . . *** *** *** *** *** *** *** *** ***

 Inventories/total shipments (1) . . *** *** *** *** *** *** *** *** ***

 Production workers . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Hours worked (1,000s) . . . . . . . . *** *** *** *** *** *** *** *** ***

 Wages paid ($1,000) . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Hourly wages . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Productivity (pounds per hour) . . *** *** *** *** *** *** *** *** ***

 Unit labor costs . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Net sales:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Cost of goods sold (COGS) . . . . *** *** *** *** *** *** *** *** ***

 Gross profit or (loss) . . . . . . . . . *** *** *** *** *** *** *** *** ***

 SG&A expenses . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Operating income or (loss) . . . . . *** *** *** *** *** *** *** *** ***

 Capital expenditures . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit COGS . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit SG&A expenses . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit operating income or (loss) . *** *** *** *** *** *** *** *** ***

 COGS/sales (1) . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Operating income or (loss)/

 sales (1) . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 (1) "Reported data" are in percent and "period changes" are in percentage points.

 (2) Undefined.

Note.--Financial data are reported on a fiscal year basis and may not necessarily be comparable to data reported on a calendar year basis.

Because of rounding, figures may not add to the totals shown. Unit values and shares are calculated from the unrounded figures.

Source: Compiled from official statistics of the U.S. Department of Commerce and from data submitted in response to Commission questionnaires.

C-6
C-7

Table C-4

TKPP: Summary data concerning the U.S. market, 2006-08, January-June 2008, and January-June

2009

* * * * * * *

Table C-5

Certain phosphate salts: Summary data concerning the U.S. market, 2006-08, January-June 2008,

and January-June 2009

* * * * * * *

D-1

APPENDIX D

QUARTERLY DOMESTIC, SUBJECT, AND 

NONSUBJECT-COUNTRY PRICE DATA COMPARISONS

D-3

Presented graphically below in figures D-1 through D-6 are quarterly pricing and quantity data

for phosphate salts from the U.S., China, and nonsubject countries. Nonsubject pricing data were

received from seven countries - Belgium, Canada, Germany, Israel, Japan, Mexico, and Taiwan. Belgium

and Israel were the only nonsubject countries for which data was supplied for ***. Table D-7 presents

data for product 4 without ***.

When comparing domestic pricing data to pricing data from all nonsubject countries, there were

304 possible pricing comparisons, in which domestic phosphate salts were priced higher in slightly more

than half of the quarters (158). For DKP, domestic product was priced higher than nonsubject DKP in 45

of 73 possible comparisons. Domestic MKP was priced higher than MKP imported from nonsubject

countries in 21 of 65 possible comparison. With respect to STPP, domestic food-grade STPP was priced

higher than nonsubject food-grade STPP in 28 of 56 comparisons, while technical-grade STPP produced

in the United States was priced higher than nonsubject technical-grade STPP in 34 of 56 possible

comparisons. Domestic food-grade TKPP was priced higher than nonsubject food-grade TKPP in 7 of 24

comparisons, whereas domestic technical-grade TKPP was priced higher than nonsubject technical-grade

TKPP in 23 of 30 comparisons.

When comparing Chinese pricing data to pricing data from all nonsubject countries, there were

284 possible pricing comparisons, in which imported Chinese phosphate salts were priced lower in 225

quarters. For DKP, imported Chinese product was priced lower than nonsubject DKP in 59 of 73 possible

comparisons. Chinese MKP was priced lower than MKP imported from nonsubject countries in 59 of 65

possible comparison. With respect to STPP, imported food-grade Chinese STPP was priced lower than

nonsubject food-grade STPP in 51 of 56 comparisons, but technical-grade STPP imported from China

was priced lower than nonsubject technical-grade STPP in 28 of 56 possible comparisons. Chinese foodgrade TKPP was priced lower than nonsubject food-grade TKPP in 2 of 4 comparisons, whereas Chinese

technical-grade TKPP was priced lower than nonsubject technical-grade TKPP in 26 of 30 comparisons.
D-4

Figure D-1

DKP: Average prices and quantities for product 1, January 2006-June 2009

* * * * * * *

Figure D-2

MKP: Average prices and quantities for product 2, January 2006-June 2009

* * * * * * *

Figure D-3

Food-grade STPP: Average prices and quantities for product 3, January 2006-June 2009

* * * * * * *

Figure D-4

Technical-grade STPP: Average prices and quantities for product 4, January 2006-June 2009

* * * * * * *

Figure D-5

Food-grade TKPP: Average prices and quantities for product 5, January 2006-June 2009

* * * * * * *

Figure D-6

Technical-grade TKPP: Average prices and quantities for product 6, January 2006-June 2009

* * * * * * *

Figure D-7

Technical-grade STPP: Average prices and quantities for product 4 *** , January 2006-June 2009

* * * * * * *