Certain Magnesia Carbon Bricks

From China and Mexico

Investigation Nos. 701-TA-468 and 731-TA-1166-1167

(Preliminary)

Publication 4100 September 2009

Washington, DC 20436
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

Robert A. Rogowsky

Director of Operations

Staff assigned

Elizabeth Haines, Investigator

Vincent DeSapio, Industry Analyst

Michelle Koscielski, Industry Analyst

James Fetzer, Economist

Charles Yost, Accountant

Michael Haldenstein, Attorney

Steven Hudgens, Statistician

Keysha Martinez, Intern

James McClure, Supervisor Investigator

Address all communications to

Secretary to the Commission

United States International Trade Commission

Washington, DC 20436
U.S. International Trade Commission

Washington, DC 20436

www.usitc.gov

Certain Magnesia Carbon Bricks

From China and Mexico

Investigation Nos. 701-TA-468 and 731-TA-1166-1167

(Preliminary)

Publication 4100 September 2009

i

TABLE OF CONTENTS

Page

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

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

Separate and dissenting views of Chairman Shara L. Aranoff, Vice Chairman Daniel R.

 Pearson, and Commissioner Deanna Tanner Okun ............................... 23

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

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

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

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

Alleged subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

Alleged sales at LTFV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

The subject merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

Commerce’s scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

Tariff treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-4

The product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6

Description and applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-6

Manufacturing processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-9

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

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

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

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

Supply and demand considerations ................................................ II-1

Supply ................................................................... II-1

Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-4

Substitutability issues .......................................................... II-6

Factors affecting purchasing decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-6

Comparison of the U.S. produced and imported MCB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-7

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-4

U.S. producers’ imports and purchases ............................................. III-4

U.S. employment, wages, and productivity ......................................... III-5
ii

TABLE OF CONTENTS

Page

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

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

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

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

Negligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-4

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

U.S. market shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-5

Ratio of imports to U.S. production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-7

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

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

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

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

Pricing practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Pricing methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

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

Sales terms and discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2

Price data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-2

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

Price comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-5

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

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

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

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

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

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

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

Actual negative effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-5

Anticipated negative effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI-5

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

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

The industry in Mexico ......................................................... VII-4

U.S. importers’ inventories of MCB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-5

U.S. importer’s current orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII-5

Antidumping and countervailing duty investigations in third-country markets .............. VII-5

Information on producers in nonsubject countries .................................... VII-5
iii

TABLE OF CONTENTS

Page

Appendixes

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

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

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

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

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

asterisks.

 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

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

determine that there is a reasonable indication that an industry in the United States is materially injured by reason of

imports of certain magnesia carbon bricks from China and Mexico.

 3

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

determine that there is a reasonable indication that an industry in the United States is threatened with material injury

by reason of imports of certain magnesia carbon bricks from China and determine that there is no reasonable

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

establishment of an industry in the United States is materially retarded, by reason of imports from Mexico of certain

magnesia carbon bricks. 

UNITED STATES INTERNATIONAL TRADE COMMISSION

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

CERTAIN MAGNESIA CARBON BRICKS FROM CHINA AND MEXICO

DETERMINATIONS

On the basis of the record1

 developed in the subject investigations, the United States International

Trade Commission (Commission) determines, pursuant to sections 703(a) and 733(a) of the Tariff Act of

1930 (19 U.S.C. § 1671b(a) and 19 U.S.C. § 1673b(a)) (the Act), that there is a reasonable indication that

an industry in the United States is materially injured,2

 or threatened with material injury3 by reason of

imports from China and Mexico of certain magnesia carbon bricks, provided for in subheadings

6902.10.10, 6902.10.50, 6815.91.00, and 6815.99.00 of the Harmonized Tariff Schedule of the United

States, that are alleged to be sold in the United States at less than fair value (LTFV) and subsidized by the

Government of China. 

COMMENCEMENT OF FINAL PHASE INVESTIGATION

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

commencement of the final phase of its 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 these investigations under sections 703(b) and 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) and 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 July 29, 2009, a petition was filed with the Commission and Commerce by Resco Products

Inc., Pittsburgh, PA, alleging that an industry in the United States is materially injured or threatened with

material injury by reason of subsidized imports of certain magnesia carbon bricks from China and LTFV

imports of certain magnesia carbon bricks from China and Mexico. Accordingly, effective July 29, 2009,
2

the Commission instituted countervailing duty investigation No. 701-TA-468 (Preliminary) and

antidumping duty investigation Nos. 731-TA-1166-1167 (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 August 10, 2009 (74 FR 39969). 

The conference was held in Washington, DC, on August 19, 2009, and all persons who requested the

opportunity were permitted to appear in person or by counsel.
 1

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

determine that there is a reasonable indication that a domestic industry is materially injured by reason of subject

imports of MCBs from China and Mexico.

 2

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

determine that there is a reasonable indication that an industry in the United States is threatened with material injury

by reason of subject imports from China and 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 from Mexico. They join

the Commission opinion through Section VI(B), except as noted herein. See Separate and Dissenting Views of

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

 3

 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 Chem. Corp. v. United States, 20 CIT 353, 354-55 (1996). No party argued that the

establishment of an industry is materially retarded by reason of the allegedly unfairly traded imports.

 4

 American Lamb Co., 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 a

reasonable indication that an industry in the United States is materially injured1

 or threatened with

material injury2

 by reason of imports of magnesia carbon bricks (“MCBs”) from China that are allegedly

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

MCBs from Mexico that are allegedly sold in the United States at less than fair value.

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

2009, by Resco Products, Inc. (“Resco”). Two Chinese producers, Yingkou Bayuquan Refractories Co.,

Ltd. and RHI Refractories Liaoning Co., Ltd., and one Mexican producer, RHI-Refmex S.A. de C.V.,

entered appearances as respondents. Three importers, S & S Intersource LLC, Vesuvius USA

Corporation, and Veitsch-Radex America, Inc. also entered appearances as respondents. 

Resco filed a postconference brief, and Vesuvius USA Corporation and Yingkou Bayuquan

Refractories Co., Ltd. (collectively, the “Vesuvius Respondents”) filed a joint postconference brief. RHI

Refractories Liaoning Co., Ltd., RHI-Refmex S.A. de C.V., and Veitsch-Radex America, Inc.

(collectively, the “RHI Respondents”) also filed a joint postconference brief. Representatives of Resco

and importers Fedmet Resources and S & S Intersource appeared at the staff conference.
 5

 Confidential Staff Report (“CR”), INV-GG-076 (Sept. 8, 2009), as amended by INV-GG-077, at VI-1; Public

Staff Report (“PR”) at VI-1. Resco, ANH Refractories, Inc. (“ANH”), and LWB Refractories (“LWB”) all

responded to the questionnaires. Id.

 6 CR at VI-1; PR at 1.

 7

 CR at IV-3, PR at IV-1.

 8

 CR/PR at IV-1.

 9

 CR at VII-3, PR at VII-1.

 10 CR at VII-5, PR at VII-4.

 11 19 U.S.C. § 1677(4)(A).

 12 19 U.S.C. § 1677(4)(A).

 13 19 U.S.C. § 1677(10).

 14 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).

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

4

There are four firms currently producing MCBs in the United States; three responded to

Commission questionnaires with usable data.5

 The questionnaire responses cover more than *** percent

of domestic production and shipments of MCBs during 2008.6

 The Commission has relied on

questionnaire responses rather than official import statistics because the official statistics are derived from

“basket” categories that include imports other than the subject merchandise.7

 Questionnaire responses

were received from 16 importers representing 80 percent of total U.S. imports from China and virtually

all imports from Mexico.8

 The Commission received usable foreign producer questionnaire responses

from seven Chinese producers, estimated to account for approximately *** percent of Chinese exports of

MCBs to the United States during the period examined.9

 The Commission also received a completed

questionnaire from the only Mexican producer of the subject product, RHI-Refmex S.A.10

III. DOMESTIC LIKE PRODUCT

A. In General

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

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

“domestic like product” and the “industry.”11 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 whole of a domestic like

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

proportion of the total domestic production of the product.”12 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 ... .”13

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.14 No single factor is dispositive, and the Commission

may consider other factors it deems relevant based on the facts of a particular investigation.15 The

Commission looks for clear dividing lines among possible like products and disregards minor
 16 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.”).

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

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

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

 18 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).

 19 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).

 20 CR at I-5, PR at I-4. Notices of Initiation, 74 Fed. Reg. 42852, 42858 (Aug. 25, 2009). The subject

merchandise is provided for under subheadings 6902.10.10., 6902.10.50., 6815.91.00., and 6815.99.00 of the

Harmonized Tariff Schedules of the United States (HTS).

 21 CR at I-7, PR at I-6.

5

variations.16 Although the Commission must accept the U.S. Department of Commerce (“Commerce”) 

determination as to the scope of the imported merchandise that is subsidized or sold at less than fair

value,17 the Commission determines what domestic product is like the imported articles Commerce has

identified.18 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.19

B. Product Description and Analysis

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

investigations as follows: 

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

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

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

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

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

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

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

amounts to 15 percent by weight as various metals, metal alloys, and metal carbides).20

MCBs are refractory products that are made from a combination of magnesia and carbon. Refractory

products maintain their strength at high temperatures because they are made from specialized materials. 

Accordingly, they are used to provide thermal and corrosion resistance in operations involving high

temperatures and harsh operating conditions, such as in the production of iron and steel.21 The scope of

the investigations includes only chemically bonded MCBs in which the magnesia content is at least 70

percent and the carbon content ranges up to 30 percent.
 22 CR at I-7, PR at I-6.

 23 Transcript of Staff Conference of August 19, 2009 (“Tr”) (Copp) at 24.

 24 Petitioner’s Postconference Brief (Pet. Br.) at Exhibit 8.

 25 Tr. at 55 (Brown).

 26 Pet. Br. at 4.

 27 Petition at 10.

 28 CR at I-7, PR at I-6.

 29 CR at I-7, PR at I-6.

 30 CR at I-7, PR at I-6.

 31 RHI Respondents’ Br. at 3.

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

 33 Tr. at 47-48, 62-63 (Mazard, Copp). For instance, fired bricks require very high temperature count and

dolomite bricks must be immediately packaged because they decompose when exposed to the atmosphere. Id.

 34 Tr. at 47 (Mazard).

6

MCBs are used to line lower sidewalls, upper sidewalls, slag lines, and roofs of ladles and ladle

metallurgy furnaces involved in steel production and refining, where MCBs come in contact with both

molten steel and molten slag.22 Ladles used in steel production are by far the largest application for

MCBs, followed by electric arc furnaces.23 MCBs are also used to line basic oxygen furnaces in

integrated steel mills and electric arc furnaces in non-integrated steel mills.24 MCBs are consumed in the

steelmaking process and need to be replaced every 4 to 12 days, depending upon the application.25

Petitioner Resco argues for a single like product that would be coterminous with Commerce’s

scope of investigation.26 It maintains that other types of refractory bricks are not interchangeable with

MCBs. According to Resco, refractory bricks have specific formulations that result in unique chemical

and physical characteristics, and each is used for particular applications based upon these characteristics.27

No other party objects to defining the domestic like product as coterminous with the scope of

subject merchandise and to not expanding the like product to include other refractory products such as

fired magnesite, fired bauxite, magnesia dolomite, and magnesia alumina graphite bricks. Based on the

factors normally considered, as discussed below, we define the domestic like product as MCBs, a

category that is coextensive with the scope of the investigations.

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

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

both molten steel and molten slag.28 Other types of refractory brick also have high thermal resistance and

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

the market for ladle linings, especially around the slag line.29

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

MCBs have certain physical and chemical properties that are required for more demanding applications.30

Although respondents note that other types of refractory bricks may be used instead of MCBs in some

circumstances, other refractory bricks are not typically used interchangeably with MCBs.31

Channels of distribution. The record indicates that MCBs and other refractory bricks are sold

directly to the end users, steel producers.32

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

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

MCBs and other refractory bricks may differ.33

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

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

on pricing materials, and in purchase orders and technical guidelines.34
 35 See CR/PR at Table C-1.

 36 Tr. at 48 (Mazard).

 37 The RHI Respondents argue that other types of refractory bricks are competitive with MCBs. RHI

Respondents’ Br. at 3. They do not argue, however, that the domestic like product should be defined more broadly

to include such products. We remind the parties that, pursuant to rule 207.20(b), the written comments on draft

questionnaires in the final phase of the investigations must propose and identify any specific additional data that a

party wishes the Commission to gather concerning a possible broader definition of the domestic like product.

 38 19 U.S.C. § 1677(4)(A).

 39 19 U.S.C. § 1677(4)(B). 

 40 CR/PR at Table III-5.

 41 19 U.S.C. § 1677(4)(B). 

 42 RHI Respondents’ Br. at 5-6.

 43 Pet. Br. at 5-8.

 44 CR/PR at Table III-1.

 45 CR/PR at Table III-5. *** imported *** short tons in 2006, *** short tons in 2007, *** short tons in 2008,

and *** short tons in the first six months of 2009 (interim 2009). Id.

 46 CR/PR at Table III-5.

7

Price. The average unit net sales value for U.S.-produced MCBs in 2008 was $*** per ton.35

The record indicates that MCBs are $150-$500 more per ton than other refractory products.36

Conclusion. The record indicates that MCBs are not used interchangeably with other refractory

products. Compared with other refractory products, MCBs have distinct uses, differ in physical

characteristics, are priced higher, and are made by different production processes. Based on this evidence

and absent any arguments to the contrary,37 we define the domestic like product as consisting of MCBs, a

category that is coextensive with the scope of investigation.

IV. DOMESTIC INDUSTRY

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

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

proportion of the total domestic production of the product.”38 In defining the domestic industry, the

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

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

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

producers of MCBs.

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

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

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

related to an exporter or importer of subject merchandise or which are themselves importers.39 Exclusion

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

investigation. In these investigations, two U.S. producers, ***, reported that they imported subject MCBs

during the period examined.40 Thus, they may be excluded from the industry if appropriate circumstances

exist.41 

The RHI Respondents urge the Commission to exclude *** from the definition of the domestic

industry because it is a significant importer.42 Resco argues that *** should not be excluded as a related

party because it is ***.43

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

2008.44 ***.45 Although its importing activity was most extensive toward the end of the period and in

*** in particular,46 the record indicates that its primary interest lies in domestic production. Its ratio of
 47 CR/PR at Table III-5.

 48 CR/PR at Table III-1.

 49 See CR/PR at Table IV-1.

 50 Consistent with her practice in past investigations and reviews, Chairman Aranoff does not rely on individualcompany operating income margins, which reflect a domestic producer’s financial operations related to production

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

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

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

 51 For purposes of the preliminary phase of these investigations, Commissioner Pinkert does not rely upon

financial performance as a factor in determining whether there are appropriate circumstances to exclude related

parties from the domestic industry. See Allied Mineral Products v. United States, 28 C.I.T. 1861, 1865-67 (2004). 

For the final phase of these investigations, Commissioner Pinkert invites the parties to provide any information they

may have with respect to whether these companies are benefitting financially from their status as related parties.

 52 CR/PR at Table VI-2.

 53 CR/PR at Table VI-2.

 54 CR/PR at Table III-5; Tr. at 64 (Brown). *** imported *** short tons in 2006, *** short tons in 2007, ***

short tons in 2008, and *** short tons in interim 2009. CR/PR at Table III-5.

 55 CR/PR at Table III-1.

 56 CR/PR at Table III-5.

 57 CR/PR at Table VI-2.

 58 19 U.S.C. § 1677(7)(G)(i).

8

subject imports to domestic production was a modest *** percent in 2008.47 *** also supports the

petition.48 These facts support the conclusion that its primary interest has remained that of a domestic

producer.

Furthermore, despite the fact that *** was the *** importer during the period,49 it does not appear

to have benefitted from its importing activity or been shielded thereby from any injury from the subject

imports. 50 51 ***.52 It also did ***.53 We therefore do not exclude *** from the domestic industry under

the statute’s related party provision.

*** explained that ***.54 *** accounted for *** percent of domestic production in 2008.55 Its

ratio of imports to production fell during the period from *** percent in 2006 to just *** percent in first

half of 2009 (interim 2009).56 The *** amounts that it imported, the *** in the level of its imports, and

the fact that it has *** the subject imports all suggest that its primary interest lies in domestic production. 

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

effects of the subject imports.57 We therefore find that it is not appropriate to exclude *** from the

definition of the domestic industry as a related party.

For the reasons discussed above, we do not exclude either related party and define the domestic

industry to include all domestic producers of MCBs.

V. CUMULATION

A. Legal Framework

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

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

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

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

U.S. market.58 In assessing whether subject imports compete with each other and with the domestic like

product, the Commission has generally considered four factors, including the following:
 59 Commissioner Lane notes that, with respect to fungibility, her analysis does not require such similarity of

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

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

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

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

2007).

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

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

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

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

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

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

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

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

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

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

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

 63 See 19 U.S.C. § 1677(7)(G)(ii).

 64 Pet. Br. at 13-19.

 65 RHI Respondents’ Br. at 7-8.

9

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

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

customer requirements and other quality related questions;59

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

imports from different countries and the domestic like product;

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

from different countries and the domestic like product; and

(4) whether the subject imports are simultaneously present in the market.60

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

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

compete with each other and with the domestic like product.61 Only a “reasonable overlap” of

competition is required.62

B. Discussion

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

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

duty petition with respect to China, on the same day. None of the cumulation exceptions apply.63 Subject

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

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

between subject imports and the domestic like product.

Petitioner Resco urges the Commission to cumulate subject imports from China and Mexico

because there is a reasonable overlap of competition.64 The RHI Respondents question the geographic

overlap of the subject imports, arguing that subject imports from Mexico and China do not compete with

each other because they are sold in different geographic markets.65 They contend that MCBs from
 66 RHI Respondents’ Br. at 7-8.

 67 CR/PR at Table II-2.

 68 CR/PR at Table II-2. See also Tr. 34, 37 (Magrath).

 69 RHI Respondents’ Br. at 7.

 70 ***. *** Questionnaire response at III-11. The largest importer of MCBs from China, ***, indicated that ***,

suggesting that it sells them in the Southeast and Southwest. *** Questionnaire response at III-11. 

 71 Pricing data indicate that subject imports from Mexico were present in the U.S. market in 9 of 14 quarters for

which pricing data were collected, while subject imports from China and domestic MCBs were present in all 14

quarters for which pricing data were collected. See CR/PR at Tables V-1 and V-2.

 72 CR/PR at II-1.

10

Mexico are trucked into the United States and that high transportation costs relative to value limit the

geographic reach of MCBs from Mexico to the Southeast and Southwest regions of the United States.66

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

from each country and the domestic like product. Market participants perceive domestic MCBs and the

subject imports to be interchangeable. All responding producers and over two-thirds of importers

indicated that subject imports from each country are always or frequently interchangeable with

domestically produced MCBs.67 All responding producers and six of seven responding importers

indicated that subject imports from China are always or frequently interchangeable with subject imports

from Mexico.68

Geographic Overlap. As noted, the RHI Respondents contend that Mexican MCBs are sold to

end users in the Southwest and Southeast, while subject imports from China serve the North Central

portion of the United States where steel production is concentrated.69 The information on the record in

this preliminary phase of the investigations indicates that subject imports from Mexico are limited to the

Southwest and Southeast, but subject imports from China are also sold in those regions, suggesting an

overlap of competition.70 We intend to examine this issue more fully in any final phase of the

investigations.

Simultaneous Presence in Market. The domestic product and subject imports from each country

were present in each year and most quarters of the period of investigation and in both interim periods.71

Therefore, we conclude that domestically produced MCBs and subject imports from China and Mexico

were simultaneously present in the United States.

Channels of Distribution. Virtually all U.S. shipments of domestically produced merchandise

and subject imports were made directly to end users by domestic producers and importers.72

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

from China and Mexico are generally interchangeable, are sold through the same channels of distribution,

and have been sold in overlapping geographic markets during the period of investigation. We thus find a

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

Mexico and cumulate the subject imports for purposes of assessing material injury.
 73 Negligibility under 19 U.S.C. § 1677(24) is not an issue in these investigations, and no party made any

arguments concerning this issue. Based on importer questionnaire responses, subject imports from China accounted

for *** percent and subject imports from Mexico accounted for *** percent of total U.S. imports of MCBs, by

quantity, for the period July 2008 to June 2009, the most recent 12-month period preceding the filing of the petitions

for which questionnaire data are available. CR at IV-7, PR at IV-5.

 74 19 U.S.C. §§ 1671b(a), 1673b(a).

 75 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).

 76 19 U.S.C. § 1677(7)(A).

 77 19 U.S.C. § 1677(7)(C)(iii).

 78 19 U.S.C. § 1677(7)(C)(iii).

 79 19 U.S.C. §§ 1671b(a), 1673b(a).

 80 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).

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

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

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

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

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

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

tangential contribution to material harm caused by LTFV goods.’” See also Nippon Steel Corp. v. United States, 458

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

2001).

11

 VI. REASONABLE INDICATION OF MATERIAL INJURY BY REASON OF SUBJECT

IMPORTS 73

A. Legal Standards

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.74 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.75 The statute defines “material injury” as “harm which is not

inconsequential, immaterial, or unimportant.”76 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.77 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.”78

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,79 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.80 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.81
 82 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.

 83 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.”). 

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

 85 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.”).

 86 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.

 87 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

(continued...)

12

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

isolate the injury caused by other factors from injury caused by unfairly traded imports.83 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.84 It is clear that the existence of

injury caused by other factors does not compel a negative determination.85

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

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

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

“ensure{s} that it is not attributing injury from other sources to the subject imports.”86 87 Indeed, the
 87 (...continued)

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 non-subject or non-LTFV imports would have

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

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

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

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

that factor.

542 F.3d at 878.

 88 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.”).

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

 90 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).

 91 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.

 92 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.

13

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

adherence to a specific formula.”88

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.89 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.90 Accordingly, we do not consider

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

subsequent to Bratsk.

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

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

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

non-attribution issues when it performs its causation analysis.91 92
 93 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.”).

 94 We provide in the discussion of impact in section VI.E. below an analysis of other factors, such as the

economic recession, that could have caused any material injury experienced by the domestic industry. 

 95 CR/PR at IV-1.

 96 CR at VII-3, VII-5, PR at VII-2, VII-4.

 97 CR at II-6, PR at II-4; Tr. at 31, 34 (Magrath).

 98 Tr. at 31, 126, 134 (Magrath, Koenig, Planert).

 99 CR at II-6, Figs. II-1 and II-2, PR at II-4, Figs. II-1 and II-2.

 100 CR at II-6, PR at II-4.

 101 CR/PR at Table C-1.

 102 CR/PR at Table IV-4.

14

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.93 94

As noted above, the Commission has nearly complete data coverage for the domestic industry. 

The Commission also received completed questionnaire responses from 16 importers that accounted for

80 percent of subject imports from China and all subject imports from Mexico.95 The Commission

received foreign producer questionnaires from the only producer of MCBs in Mexico and seven subject

producers in China that accounted for an estimated *** percent of exports of MCBs from China in 2008.96

For the reasons stated below, we find a reasonable indication that the domestic industry producing MCBs

is materially injured by reason of subject imports from China and Mexico.

B. Conditions of Competition and the Business Cycle

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

indication of material injury by reason of subject imports.

1. Demand Considerations

MCBs are used in the production of steel, and therefore demand for MCBs is closely related to

the level of steel production.97 The parties agree that the overall level of steel production is a good

indicator of demand for MCBs.98 The monthly index of U.S. raw steel production fluctuated modestly

between January 2006 and August 2008, increasing or decreasing in any month by no more than 13

percent relative to January 2006, and increased overall by only 3 percent.99 The index then dropped by 48

percent from August 2008 to June 2009.100

Similarly, total apparent U.S. consumption of MCBs increased by *** percent between 2006 and

2008, with most of the increase occurring during 2007-2008, then decreased by *** percent between

interim 2008 and interim 2009.101 Apparent U.S. consumption decreased slightly from *** short tons in

2006 to *** short tons in 2007, before increasing by *** percent to *** short tons in 2008.102
 103 Tr. at 27-29 (Copp).

 104 CR/PR at Table C-1.

 105 CR/PR at II-1.

 106 CR/PR at II-1.

 107 Tr. at 47, 62-63 (Mazard, Copp).

 108 CR/PR at Table IV-4.

 109 In 2008, the domestic producers’ production capacity was equal to *** percent of apparent U.S. consumption. 

See CR/PR at Tables III-2, IV-4.

 110 CR/PR at Table IV-4.

 111 CR at VII-2, PR at VII-1.

 112 CR/PR at Table IV-4.

 113 CR at II-8, PR at II-6.

 114 CR/PR at Table II-2. 

 115 Tr. at 50, 72 (Brown).

15

Demand collapsed as a result of a steep worldwide recession in approximately the fourth quarter

of 2008.103 As a result, apparent U.S. consumption fell by over *** percent from interim 2008 to interim

2009.104

2. Supply Conditions

Both domestic producers and importers make most of their sales directly to end users.105 Twentyfive purchasers are estimated to account for 75 percent of all purchases of MCBs.106 The domestic

producers often sell MCBs as part of a package of refractory products; such package sales account for

about half of domestic producers’ MCB sales.107

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

investigation, with the exception of interim 2009 when subject imports surpassed the quantity supplied by

U.S. producers. Domestic producers’ U.S. market share was *** percent in 2006, *** percent in 2007,

and *** percent in 2008. The industry’s share was *** percent in interim 2008, but only *** percent in

interim 2009.108 U.S. producers’ production capacity was unchanged at 160,903 short tons during the

period examined and exceeded domestic demand.109

The U.S. market share of cumulated subject imports increased overall from *** percent in 2006

to *** percent in 2008 and was *** percent in interim 2009 and *** percent in interim 2008.110 China is

reported to have almost *** of global capacity for production of MCBs.111 Nonsubject imports

accounted for less than *** percent of total imports throughout the period examined and were not a

significant factor in the U.S. market.112

3. Product Considerations

There is a high degree of substitutability between the domestic like product and subject

imports.113 All three responding domestic producers reported that the domestic like product and subject

imports from China and Mexico are always or frequently interchangeable. Seven of ten responding

importers reported that the domestic like product and subject imports from China are always or frequently

interchangeable, and six of seven responding importers reported that the domestic like product and

subject imports from Mexico are always or frequently interchangeable.114

Resco indicated that it uses about 150 different formulations for MCBs and that it sells MCBs in

about 3,000 different shapes.115 Nonetheless, about half of the market consists of standardized shapes
 116 Tr. at 52 (Brown).

 117 Tr. at 67 (Brown).

 118 Tr. at 69-70 (Brown).

 119 See CR at V-2 to V-3, PR at V-2.

 120 Tr. at 55-56 (Brown).

 121 CR/PR at V-1.

 122 CR/PR at V-1.

 123 CR/PR at V-1. ***. Id.

 124 CR/PR at V-1.

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

not join the remainder of this opinion.

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

from all firms believed to be large importers of MCBs from China and Mexico. As noted, the official statistics are

derived from basket categories that include imports other than the subject merchandise. See CR at IV-3, n.6, PR at

IV-1 n.6.

 127 19 U.S.C. § 1677(7)(C)(i).

 128 See CR/PR at Table IV-2.

 129 See CR/PR at Table IV-3.

16

and sizes of MCBs.116 Price is often the most important factor in purchasing decisions,117 but testimony at

the staff conference by Resco’s and respondents’ representatives indicated that technical services can be

important to some purchasers.118 Subject imports and the domestic product may also have different lead

times for MCBs that are made to order.119

4. Other Conditions

The MCB industry is a mature industry with few recent technological changes, and there have not

been any significant recent technological changes in steel production, which is the primary downstream

use for MCBs.120 Magnesia is the primary raw material used in the production of MCBs, and raw material

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

during 2006-2008.121 Per unit raw material costs fell by 2 percent between 2006 and 2007, but then

increased by 26 percent between 2007 and 2008 and by 9 percent from interim 2008 to interim 2009.122

*** increased over the period.123 ***.124 125

C. Volume of Subject Imports126

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.”127

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

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

subject imports in the U.S. market stood at *** short tons in 2006; it decreased by *** percent to ***

short tons in 2007, increased by *** percent to *** short tons in 2008, and decreased by *** percent from

*** short tons to *** short tons between interim 2008 and interim 2009.128

U.S. shipments of subject imports, however, increased throughout 2006-2008, with the majority

of the increase occurring during 2007-2008, before decreasing from interim 2008 to interim 2009. U.S.

shipments of subject imports totaled *** short tons in 2006; they increased by *** percent to *** short

tons in 2007, increased again by *** percent to *** short tons in 2008, and decreased by *** percent

from *** short tons to *** short tons between interim 2008 and interim 2009.129
 130 See CR/PR at Table IV-4.

 131 CR/PR at Table IV-5.

 132 19 U.S.C. § 1677(7)(C)(ii).

 133 See also CR at II-8, PR at II-6.

 134 Tr. at 66-67 (Brown) (70 percent of customers reported price to be the most important consideration).

 135 CR at V-5, PR at V-2. Product 1 is resin bonded, magnesia-carbon brick for electric arc furnaces with a

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

with the following dimensions: 131⁄2 x 6 x 3 No. 1 key. Product 2 is resin bonded, magnesia-carbon brick for ladles

with a carbon content of 10 percent, fused grain and antioxidant additions that correspond to Resco’s brand Maxline

10 DFZ with the following dimensions: SU 6 x 60 x 100 mm. Product 3 is resin bonded, magnesia-carbon brick for

ladles with a carbon content of 10 percent, fused grain and antioxidant additions that correspond to Resco’s brand

Maxline 10 AFX, with the following dimensions: 7 x (6-51⁄2) x 3 inch mini key.

 136 CR at V-4, PR at V-2 to V-3. Some importers reported that the product categories did not precisely match the

products that they were selling. Resco and one of the respondents indicated, however, that the products were

competitive and that it may be difficult to establish pricing categories that are more representative of competition

than pricing product 2 given the variety of mixes and shapes of MCBs. See CR at V-5, PR at V-2 to V-3. In any

final phase investigations, the parties are encouraged in written comments on draft questionnaires to propose any

pricing products that they believe will more accurately reflect competition in the MCB market.

17

Because there were virtually no nonsubject imports in the U.S. market, the significant increase in

subject import market share came almost entirely at the expense of the domestic industry as subject

imports increasingly displaced domestic shipments from the U.S. market. Subject imports increased their

share of the U.S. market from*** percent to *** percent during 2006-2008 and to *** percent during

interim 2009, while U.S. producers’ market share decreased from *** percent to *** percent during

2006-2008 and further decreased to *** percent during interim 2009.130

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

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

production was *** percent in 2006; it decreased to *** percent in 2007 before increasing to *** percent

in 2008 and *** percent in interim 2009.131

For purposes of the preliminary phase of these investigations, we find that the volume and market

share of the subject imports were significant during the period of investigation both in absolute terms and

relative to consumption and production in the United States. We also find the increase in subject import

shipments and market share over the period examined to be significant.

D. Price Effects of the Subject Imports

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.132

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

substitutability between subject imports and the domestic like product.133 Price is an important

consideration for most purchasers.134

The Commission collected quarterly f.o.b. pricing data for three MCB products.135 Three

domestic producers, 11 importers of MCBs from China, and one importer of MCBs from Mexico

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

all products for all quarters.136 The pricing data accounted for 24.8 percent of U.S. producers’
 137 CR at V-5, PR at V-2.

 138 CR/PR at Table V-4.

 139 CR/PR at Table V-4. Data for products 2 and 3 were combined because ***. The underselling data without

*** for products 2 and 3 show underselling and pricing trends that are similar to those with *** combined data

included. CR at V-5 n.10, V-10 n.11, PR at V-3 n.10, V-5 n.11.

 140 CR at V-5, Fig. V-1, PR at V-3, Fig. V-1.

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

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

 143 CR/PR at Table VI-1. Unit COGS was $*** in 2006, $*** in 2007, $*** in 2008, $*** in interim 2008, and

$*** in interim 2009. Id. Unit net sales value was $*** in 2006, $*** in 2007, $*** in 2008, $*** in interim 2008,

and $*** in interim 2009. CR/PR at Table V1-1.

 144 CR/PR at Table VI-1. As noted, ***. CR/PR at V-1.

 145 CR/PR at Table VI-1.

 146 See CR/PR at Table C-1.

 147 CR/PR at Table VI-1.

 148 CR/PR at V-11, PR at V-6.

18

shipments of MCBs, 17.2 percent of U.S. shipments of subject imports from China, and *** percent of

U.S. shipments of subject imports from Mexico in 2008.137 Subject imports undersold the domestic like

product in 39 of 41 quarterly pricing comparisons by an average margin of 12.8 percent.138 Underselling

margins ranged from 0.8 percent to 32.1 percent.139 Given the consistent underselling by the subject

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

Prices for both the domestically produced products and subject imports increased during the

period. Weighted-average sales prices for the two U.S.-produced MCBs selected by the Commission

increased by 4.4 percent and 15.2 percent, respectively. The increase in the weighted-average sales prices

for the same products imported from China and Mexico ranged between 10.9 percent and 28.7 percent.140

In light of this information, we do not find the existence of significant price depression by reason of

subject imports.

We do find some evidence, however, that subject import competition may have suppressed

domestic like product prices during the period examined. Although domestic producers were able to

increase prices to some extent over the period examined, they were not always able to increase them

sufficiently to cover increased COGS. Domestic producers’ unit net sales value increased by $***, or

*** percent, from 2006 to 2008, and was $***, or *** percent, higher in interim 2009 than in interim

2008.141 The domestic industry’s unit COGS increased by $***, or *** percent, from 2006 to 2008.142

The average unit COGS was $***, or *** percent, higher in interim 2009 than in interim 2008.143 These

increases in unit COGS were largely attributable to increased raw material costs.144 Despite the rise in its

sales values, the domestic industry’s margins were squeezed.

The domestic industry’s COGS to net sales ratio decreased from *** percent in 2006 to ***

percent in 2007, but then increased to *** percent in 2008.145 Notably, the increase in the COGS/net sales

ratio occurred in 2008, when U.S. shipments of the subject imports increased the most.146 The ratio was

lower in interim 2009, at *** percent, than in interim 2008, at *** percent.147 We intend to examine

further the extent to which subject imports are suppressing price increases in any final phase

investigations.

We have also examined the lost sales and lost revenue allegations made by the ***. All three

indicated that they had lost sales to the subject producers, but *** indicated that they had not lowered

prices in response to the subject imports.148 The *** lost sales allegations totaled $***, and the *** lost
 149 CR at V-11, PR at V-6.

 150 CR/PR at Table V-6, CR at V-17, PR at V-7 to V-8. It is notable that, although one purchaser indicated that

***. CR at V-16, PR at V-7.

 151 CR at V-12, PR at V-6; CR/PR at Tables V-8, V-9.

 152 CR/PR at Table V-5.

 153 Commerce initiated the antidumping duty investigations based on estimated dumping margins of 112 to 349

percent for MCBs from China and estimated margins of 153 percent to 295 percent for MCBs from Mexico. 74 Fed.

Reg. 42852, 42856 (Aug. 25, 2009). 

 154 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851 and 885 (“In material injury determinations, the Commission

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

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

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

 155 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851, 885; Live Cattle from Canada and Mexico, Inv. Nos. 701-

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

 156 CR/PR at Table III-2.

 157 CR/PR at Table III-2.

 158 CR/PR at Table III-2.

 159 CR/PR at Table III-3. Domestic producers’ inventories fell, both absolutely and relative to production, from

2006 to 2008. Inventories were lower in interim 2009 than in interim 2008. CR/PR at Table III-4. 

19

revenue allegations totaled $***.149 Although *** lost revenue allegation was confirmed,150 lost sales

accounting for a large share ($*** million) of the alleged lost sales were confirmed.151 We also note that

*** purchasers involved in lost sales allegations did not respond to at least some of the Commission

staff’s attempts to confirm the allegations.152

 In light of the above, we find a reasonable indication that the significant volume of subject

imports during the period examined had a significant adverse effect on domestic producers’ prices.

E. Impact of the Subject Imports153

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

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

bearing on the state of the industry.”154 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.”155

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

industry’s performance was adversely affected by the subject imports over the period examined. Domestic

industry production declined 3.4 percent between 2006 and 2008, from 72,895 short tons in 2006 to

70,441 short tons in 2008, and was 57.1 percent lower in interim 2009, at 17,412 short tons, than in

interim 2008, at 40,633 short tons.156 Domestic production capacity remained unchanged during the

period at 160,903 short tons.157 The industry’s rate of capacity utilization decreased from 45.3 percent in

2006 to 43.8 percent in 2008, a decline of 1.5 percentage points; it was 28.9 percentage points lower in

interim 2009, at 21.6 percent, than in interim 2008, at 50.5 percent.158

The domestic industry’s U.S. shipments decreased from 59,180 short tons in 2006 to 58,074 short

tons in 2007, before increasing to 62,470 short tons in 2008, an overall increase of 5.6 percent, but they

were 53.6 percent lower in interim 2009, at 16,284 short tons, than in interim 2008, at 35,111 short

tons.159

Despite the increase in its U.S. shipments, the domestic industry’s share of apparent U.S.

consumption decreased from *** percent in 2006 to *** percent in 2007 and *** percent in 2008. The
 160 CR/PR at Table IV-4.

 161 CR/PR at Table IV-4.

 162 CR/PR at Table VI-1. On a quantity basis, the domestic industry’s net sales only increased slightly from ***

short tons in 2006 to *** short tons in 2008. Id.

 163 CR/PR at Table IV-4.

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

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

 166 CR/PR at Table III-6.

 167 CR/PR at Table III-6. Hours worked increased from 226,000 in 2006 to 227,000 in 2008, and were 78,000 in

interim 2009 compared with 122,000 in interim 2008. Id. Labor productivity in short tons per 1,000 hours

decreased from 322.5 short tons in 2006 to 310.3 short tons in 2008. Id. It was 33.0 percent lower in interim 2009,

at 223.2 short tons, than in interim 2008, at 333.1 short tons. Id.

 168 CR/PR at Table VI-4. Research and development expenses decreased from $*** in 2006 to $*** in 2008,

and were lower in interim 2009, at $***, than in interim 2008, at $***. CR/PR at Table VI-4.

 169 CR/PR at Table VI-5.

 170 CR/PR at Table IV-4.

20

2008 level was *** percentage points lower than that of 2006.160 The domestic industry lost further

market share in interim 2009, as shipments of subject imports did not decline as much as domestic

producers’ shipments in the face of declining demand. The industry’s market share was *** percent in

interim 2008, but only *** percent in interim 2009.161

The quantity of U.S. producers’ net sales was relatively stable during 2006-08, but decreased

significantly between the interim periods. Although the value of U.S. producers’ net sales increased

throughout the period of investigation, this increase was almost entirely attributable to increased unit

values, which, as noted above, reflected the rise in raw material costs for MCBs. Although domestic

prices were rising, they did not increase sufficiently to offset increased raw material costs.

The industry’s net sales value increased from $*** million in 2006 to $*** million in 2007 and

$*** million in 2008, an overall increase of 18.1 percent, but was 50.1 percent lower in interim 2009, at

$*** million, than in interim 2008, at $*** million.162

As a result, the domestic industry’s operating income and operating margins fell in 2008 even

though apparent U.S. consumption of MCBs increased *** percent over 2007.163 The industry’s

operating income increased from $*** million in 2006 to $*** million in 2007, but then dropped to $***

million in 2008. The industry earned an operating income of $*** in interim 2008, but a $*** operating

loss in interim 2009.164 The industry’s operating income margin increased from *** percent in 2006 to

*** percent in 2007, but then fell to *** percent in 2008 despite the increase in apparent U.S.

consumption. The operating income margin also fell from *** percent of sales in interim 2008 to ***

percent in interim 2009.165

Domestic industry employment declined from 109 workers in 2006 to 102 workers in 2008.166 It

was 28.7 percent lower in interim 2009, at 78 workers, than in interim 2008, at 110 workers.167

The domestic industry’s capital expenditures declined from $*** in 2006 to $*** in 2007 and

$*** in 2008, a level *** percent lower than that in 2006. Capital expenditures were *** percent lower

in interim 2009, at $***, than in interim 2008, at $***.168 The industry’s return on investment increased

from *** percent in 2006 to *** percent in 2007, before falling to *** percent in 2008.169

For purposes of these preliminary phase investigations, we find a causal nexus between the

increasing subject imports and the deteriorating condition of the domestic industry. Subject imports

increased their already substantial market share during the period at the expense of domestic producers. 

Subject imports consistently undersold the domestic like product170 and appear to have played a role in the

cost-price squeeze experienced by domestic producers during the period examined. As a result, domestic

producers were unable to increase prices sufficiently to fully cover increasing COGS despite increased

demand during much of the period. Thus, we conclude that, for purposes of the preliminary
 171 RHI Respondents’ Br. at 23-24.

 172 The industry experienced a reduced operating income ratio of *** percent and an elevated COGS/net sales

ratio of *** percent in interim 2008. CR/PR at Table C-1. The recession and the resulting decline in demand,

however, began in the second half of 2008. See CR/PR at Table IV-4 (majority of apparent U.S. consumption in

2008 occurred in first six months of year). See also CR/PR at Fig. II-2. This information indicates that the

recession and declining demand likely were not responsible for the deteriorating financial condition of the domestic

industry in 2008, given that they occurred later in 2008 and would have affected only the second half of the year.

 173 We also recognize, and the parties agree, that nonsubject imports were not a significant factor in the U.S.

market during the period, inasmuch as they were estimated to account for no more than *** percent of total imports

of MCBs over the period examined. 

 174 Commissioner Pinkert notes that there is some question on the record of these preliminary investigations as to

whether MCBs constitute a commodity product and thus whether the first threshold consideration for the analysis

required by the Federal Circuit in Bratsk and Mittal is satisfied. See Tr. at 51-53 (Brown, Magrath); Vesuvius

Respondents’ Br. at 6-7; RHI Respondents’ Br. at 13-14. In any event, nonsubject imports never accounted for more

than *** percent of apparent U.S. consumption at any time during the period of investigation. Thus, the second

threshold consideration for the analysis required by Bratsk and Mittal (whether price-competitive non-subject

imports were a significant factor in the U.S. market) is not satisfied.

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

determine that there is a reasonable indication that an industry in the United States is threatened with material injury

by reason of subject imports from China and 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 from Mexico. See

Separate and Dissenting Views of Chairman Shara L. Aranoff, Vice Chairman Daniel R. Pearson, and Commissioner

Deanna Tanner Okun.

21

phase of these investigations, the subject imports are having a significant adverse impact on the domestic

industry.

We have considered whether there are other factors that may have adversely affected the

domestic industry during the period examined. We acknowledge, as respondents argue,171 that the severe

recession, beginning in 2008 and continuing into 2009, is likely to have adversely impacted the

industry.172 In any final phase of these investigations, we intend to explore further the role that any

changes in demand played in the performance of the domestic industry in order to ensure that we do not

attribute to subject imports the effects of any adverse demand conditions.173 174

For the reasons discussed above, we conclude for purposes of these preliminary phase

investigations that there is a causal nexus between the subject imports and the declining performance of

the domestic industry, which demonstrates a reasonable indication that the domestic industry is materially

injured by reason of subject imports. 

CONCLUSION

For the foregoing reasons, and based on the record in the preliminary phase of these

investigations, we find that there is a reasonable indication that an industry in the United States is

materially injured175 by reason of imports of MCBs from China that are allegedly sold in the United States

at less than fair value and allegedly subsidized by the Government of China and by imports of MCBs

from Mexico that are allegedly sold in the United States at less than fair value.

 1 CR at III-1, PR at III-1. 

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

 3 CR at VII-5, PR at VII-4. 

 4 Commissioner Okun notes that the statute authorizes the Commission to take adverse inferences, but such

authorization does not relieve the Commission of its obligation to consider the record evidence as a whole in making

its determination. See 19 U.S.C. § 1677e. She generally gives credence to the facts supplied by the participating

parties and certified by them as true, but bases her decision on the evidence as a whole, and does not automatically

accept participating parties’ suggested interpretations of the record evidence. Regardless of the level of participation

and the interpretations urged by participating parties, the Commission is obligated to consider all evidence relating to

each of the statutory factors and may not draw adverse inferences that render such analysis superfluous. “In general,

the Commission makes determinations by weighing all of the available evidence regarding a multiplicity of factors

relating to the domestic industry as a whole and by drawing reasonable inferences from the evidence it finds most

persuasive.” SAA at 869.

23

SEPARATE AND DISSENTING VIEWS OF CHAIRMAN SHARA L.

ARANOFF, VICE CHAIRMAN DANIEL R. PEARSON, AND COMMISSIONER

DEANNA TANNER OKUN

Based on the record in the preliminary phase of these investigations, we find that there is a

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

imports of certain magnesia carbon bricks (MCBs) from China that are allegedly subsidized by the

government of China and sold in the United States at less than fair value (LTFV). We further 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 imports of certain magnesia carbon bricks from Mexico that

are allegedly sold in the United States at LTFV.

We join the Commission’s Views with respect to background, domestic like product, domestic

industry, cumulation for purposes of our material injury analysis, legal standards, and conditions of

competition. We write separately, however, with respect to our analysis of reasonable indication of

material injury and threat of material injury by reason of the subject imports.

The Commission has essentially complete data coverage for the domestic industry.1

 The 

Commission also received completed questionnaire responses from seven subject producers in China that

accounted for an estimated *** percent of Chinese export shipments to the United States in 20082

 and

from a single subject producer in Mexico that accounted for approximately *** percent of Mexican

exports during the period examined.3

 When appropriate, we have relied on the facts otherwise available,

including information available from published sources and information submitted in these

investigations.4

 
 5 Negligibility under 19 U.S.C. § 1677(24) is not an issue in these investigations. Questionnaire data indicate

that from July 2008 to June 2009, which is the most recent 12-month period preceding the filing of the petition for

which data were available, subject imports from China accounted for *** percent of total U.S. imports of MCBs,

while subject imports from Mexico accounted for *** percent of total U.S. imports of MCBs. The volume of subject

imports is thus well above the statute’s three percent negligibility level. CR at IV-7, PR at IV-5. 

 6 19 U.S.C. § 1677(7)(C)(i).

 7 This volume discussion is based on the shipments of subject imports. CR/PR at Table IV-3. Because the

Harmonized Tariff Schedule numbers applicable to MCBs are basket categories, questionnaire data are the best data

available for measuring the volume of imports. Questionnaire data may understate import volumes because not all

importers responded. Based on questionnaire responses, the volume of shipments of subject imports was *** short

tons in 2006, *** short tons in 2007, and *** short tons in 2008. CR/PR at Table C-1. Apparent U.S. consumption

was *** short tons in 2006, *** short tons in 2007, and *** short tons in 2008. Id.

 8 The market share of subject imports measured by quantity made small gains each year from *** percent in

2006, to *** percent in 2007, and to *** percent in 2008. The domestic industry's market share declined from ***

percent in 2006, to *** percent in 2007, and was *** percent in 2008. Nonsubject imports were nearly completely

replaced in the market as their already small market share declined from *** percent in 2006 to *** percent in 2008. 

CR/PR at Table C-1. 

 9 The ratio of cumulated subject imports to U.S. production rose from *** percent in 2006 to *** percent in 2008

and was higher in interim 2009 at *** percent compared with interim 2008 at *** percent. CR/PR at Table IV-5. 

 10 CR at II-6, PR at II-4-II-6, CR/PR at Figures II-1 and II-2.

 11 Apparent U.S. consumption was *** short tons in interim 2009 compared with *** short tons in interim 2008. 

CR/PR at Table C-1.

 12 CR/PR at Table C-1. 

24

I. NO REASONABLE INDICATION OF MATERIAL INJURY BY REASON OF SUBJECT

IMPORTS FROM CHINA AND MEXICO5

A. Volume of Subject Imports 

In evaluating the volume of subject imports, section 771(7)(C)(i) of the Tariff Act provides that

the “Commission shall consider whether the volume of imports of the merchandise, or any increase in that

volume, either in absolute terms or relative to production or consumption in the United States, is

significant.”6

Subject imports were in the U.S. market in substantial volumes on a cumulated basis throughout

the period examined, never accounting for less than *** of the market. The cumulated volume of subject

imports, however, was relatively unchanged from 2006 to 2007, and increased from 2007 to 2008, as

apparent U.S. consumption rose.7

 While the increase in the cumulated volume of subject imports from

2007 to 2008 was at a rate higher than the increase in apparent U.S. consumption, subject imports’ small

gains in market share was at the expense of both the domestic industry and nonsubject imports.8

Moreover, the steady increases in the ratio of cumulated subject imports to U.S. production was the result

of decreases in domestic production from 2006 to 2008, as well as the increase in the volume of subject

imports on a cumulated basis from 2007 to 2008.9

The first half of 2009, however, saw a sharp decline in apparent U.S. consumption caused by the

falloff in domestic steel production.10 Apparent U.S. consumption was *** percent lower in interim 2009

compared with interim 2008.11 Accordingly, subject imports on a cumulated basis were *** percent

lower, or *** short tons in interim 2009 compared with *** short tons in interim 2008.12 We recognize

that the market share of subject imports on a cumulated basis was higher in interim 2009 compared with
 13 CR/PR at Table C-1. The market share of subject imports on a cumulated basis was higher in interim 2009, at

*** percent compared with *** percent in interim 2008. Id. Domestic producers' market share was *** percent in

interim 2009 compared with *** percent in interim 2008, while nonsubject imports’ market share in those periods

were *** percent and *** percent, respectively. Id. Resco argues that "the abrupt slowdown caused large amounts

of Chinese products to be either caught on the water or in the importers' inventories." Transcript, p. 28 (Copp). 

Respondents counter that "subject imports responded remarkably rapidly, given the long lead times for imports, to

the collapse in demand for MCBs triggered by the recession." Post-conference brief of Vesuvius and Bayuguan, p.

10. 

 14 19 U.S.C. § 1677(7)(C)(ii).

 15 From January 2006 through June 2009, over 99 percent of shipments of U.S. product and over 90 percent of

imports from China were made to end users. In addition, *** reported U.S. shipments of imports from Mexico and

from nonsubject sources were to end users. CR at II-1 and II-8, PR at II-1 and II-6, CR/PR at Table II-1. 

 16 All three responding producers viewed subject imports from China and from Mexico as either “always” or

“frequently” interchangeable with the domestic like product. Seven of 10 importers viewed imports from China and

6 of 7 importers viewed imports from Mexico as either “always” or “frequently” interchangeable. CR/PR at Table

II-2.

 17 CR at II-8 and II-9, PR at II-6-II-7, CR/PR at Table II-3. Nine of 17 responding importers and two of three

responding producers reported that non-price factors were either “sometimes” or “never” important in their sales. 

Resco indicated that price is an important, and many times the only, factor that customers consider when

making their purchasing decisions. CR at II-8, PR at II-6-II-7. According to Resco, the market price is not the

deciding factor for less than 30 percent of its customers. CR at II-8, PR at II-6-II-7. Respondents indicated that

while price is important to their customers, their customers are more concerned with finding suppliers who bring

new ideas and new abilities through technology and service to lower their costs of producing steel. CR at II-9, PR at

II-6-II-7.

25

interim 2008, but place less weight on this interim period shift in market share as the U.S. market was in

flux.13

For purposes of the preliminary phase of these investigations, we find that the volume of subject

imports on a cumulated basis is significant, both in absolute terms and relative to consumption and

production in the United States.

B. Price Effects of Subject Imports

In evaluating the price effects of the subject imports, section 771(7)(C)(ii) of the Tariff

Act provides that the Commission shall consider whether –

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

compared with the price of domestic like products of the United States, and

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

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

degree.14

Subject imports and domestic MCBs appear to be highly substitutable and most sales of both the

domestic like product and subject imports are made directly to end users.15 With regard to

substitutability, a majority of questionnaire respondents considered subject imports to be “always” or at

least “frequently” interchangeable with the domestic product.16 Both petitioner and respondents indicated

that price is an important factor in purchasing decisions, although respondents also indicated that nonprice factors may be equally important in some instances.17
 18 The specification of the products were the following: Product 1-- resin bonded, magnesia-carbon brick for

electric arc furnaces with a carbon content of 13 percent, fused grain and antioxidant additions that correspond to

Resco's brand Nuline 10-99, with the following dimensions: 13 1⁄2 x 6 x 3 No. 1 key; Product 2– Resin bonded,

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

correspond to Resco's brand Maxline 10 DFZ with the following dimensions: SU 6 x 60 x 100 mm; Product 3--

Resin bonded, magnesia-carbon brick for ladles with a carbon content of 10 percent, fused grain and antioxidant

additions that correspond to Resco's brand Maxline 10 AFX, with the following dimensions: 7 x (6-5 1⁄2) x 3 inch

mini key. CR at V-3, PR at V-2. 

 19 In one quarter, ***, imports from China were priced *** percent higher than domestically-produced MCBs

and in one quarter, (***), imports from Mexico were priced *** percent higher than domestically-produced MCBs. 

CR/PR at Table V-1.

 20 CR at V-10, PR at V-5, CR/PR at Table V-4.

 21 CR at V-10, PR at V-5, CR/PR at Table V-4. 

 22 Transcript at 81-82, (Fetzer), CR at V-4-V-5, PR at V-II-V-III.

 23 Data for Mexico were reported ***. CR at V-5, PR at V-3. Respondents suggest that “available quarterly

pricing data for Mexico are so limited, both in terms of the total volumes and in terms of the number of quarters for

which data are reported, that no meaningful analysis of quarterly prices of subject imports from Mexico is possible.”

Post-conference brief of Vesuvius and Bayuquan, p.17, fn.66. In any final phase of these investigations, we will

solicit parties’ comments on the appropriate products for use in quarterly price comparisons, in order to mitigate any

future confusion over the pricing items. 

 24 CR/PR at Table V-5 and V-6. We note, however, that *** purchasers involved in lost sales allegations did not

respond to the Commission staff's attempts to confirm the allegations and *** purchasers involved in the lost sales

allegations disagreed with the allegations. Id.

 25 CR at V-14, PR at V-7. 

 26 CR at V-14-V-17, PR at V-6-V-8. 

26

The Commission collected quarterly pricing data for three products: one specification of MCB

for electric arc furnaces and two MCB sizes for use in ladles.18 The subject imports were priced lower

than domestic MCBs in all but two quarters for all products.19 Subject imports from China undersold the

domestic like product in 27 of 28 quarterly pricing comparisons by margins ranging from 0.8 to 21.0

percent.20 Subject imports from Mexico undersold the domestic like product in 12 of 13 quarterly pricing

comparisons by margins ranging from 4.7 to 32.1 percent.21 Given the consistency of the underselling

margins and the substitutability of domestic and imported products, we find significant price underselling

by the subject imports from China and Mexico compared with the price of the domestic like product.

We give limited weight, however, to these price comparisons because of the numerous reports of

confusion among questionnaire respondents over how to report pricing data. First, *** was unable to

provide separate data for pricing products 2 and 3, and second, multiple questionnaire respondents

reported difficulty in identifying which of their own available products corresponded most closely with

the pricing products.22 In addition, due to the limited presence of subject imports from Mexico in the U.S.

market, very little data were available for pricing of subject imports from Mexico.23 

The lost sales and lost revenue data provide some support for the proposition that certain

purchasers are switching from domestic to subject sources based on price, but other purchasers claim to

be focused on non-price factors. With regard to lost sales and revenue, of the 15 lost sales allegations

totaling $4.7 million and four lost revenue allegations totaling $419,547, *** lost sales allegations were

confirmed totaling *** and *** lost revenue allegations *** confirmed.24 One purchaser that responded

to the lost sales allegations reported that it shifted MCB purchases from U.S. producers to subject imports

from China in ***25 Four purchasers identified non-price factors as the reason for their shift away from

domestically-produced MCBs.26
 27 CR at V-5, PR at V-3, CR/PR at Table V-3. 

 28 CR/PR at Figure V-1. 

 29 CR/PR at Tables V-1 and V-2. 

 30 CR at VI-4, PR at VI-2. Unit COGS was $*** in 2006, $*** in 2007, $*** in 2008, and $*** in interim 2009

compared with $*** in interim 2008. CR/PR at Tables VI-1 and C-1.

 31 CR/PR at Tables VI-1 and C-1. The unit value of net sales was $*** in 2006, $*** in 2007, $*** in 2008,

and $*** in interim 2008 and $*** in interim 2009. 

 32 CR/PR at Tables VI-1 and C-1. The COGS-to-net-sales ratio was *** percent in 2006, *** percent in 2007,

and *** percent in 2008.

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

 34 Commerce initiated an antidumping duty investigation based on estimated dumping margins of 112 to 349

percent for MCBs from China and of 153 to 295 percent for MCBs from Mexico. Commerce initiated a

countervailing duty investigation on MCBs from China based on allegations of various loan subsidy programs, the

provision of inputs for less than adequate remuneration, export restraints on raw materials, tax benefit programs,

Northeast revitalization program and related provincial policies, direct grants as well as grants for expansion and

export performance, preferential loans to the MCB industry, cash grant programs, and a provincial program to rebate

antidumping costs. CR at I-4-I-5, PR at I-3-I-4. 

27

We have also examined pricing trends. Prices for both the domestically produced product and

subject imports increased during the period examined. Depending on the product in question,

weighted-average sales prices for U.S.-produced MCBs increased by 4.4 percent to 15.2 percent while

weighted-average sales prices for products imported from China and Mexico increased by 10.9 percent to

28.7 percent.27 Prices for all pricing products (product 1 and products 2 and 3 combined), followed

similar trends.28 Prices for the domestically produced products peaked in the last quarter of 2008 and the

first quarter of 2009. While prices in the second quarter of 2009 were lower than prices during 2008 they

were higher than prices during 2006 and 2007.29 Because prices for the domestic like product generally

increased during the period examined, we conclude that subject imports did not have significant

price-depressing effects. 

There also is little indication that subject imports suppressed domestic producer prices during the

period examined, as changes in prices the domestic industry charged largely, but not entirely, tracked

changes in the industry's costs. On a per unit basis, the domestic industry's cost of goods sold (COGS)

increased from $*** in 2006 to $*** in 2008, or by *** percent, primarily as a result of changes in raw

material costs.30 While the industry increased the unit value of its net sales, the increases were not quite

sufficient to offset rising costs.31 Nevertheless, for the three year period between 2006 and 2008, the

industry’s COGS/net sales ratio fluctuated between years and increased by less than one percentage point,

which does not indicate that prices were suppressed to a significant degree.32 We, furthermore, note that

the industry’s COGS/sales ratio was lower in interim 2009, at *** percent, than in interim 2008, at ***

percent.33

Based on the foregoing, we find for purposes of the preliminary phase of these investigations that

the significant cumulated volume of subject imports consistently undersold the domestic like product, but

has not yet had a significant adverse effect on domestic prices.

C. Impact of Subject Imports on the Domestic Industry34

In examining the impact of subject imports, section 771(7)(C)(iii) of the Tariff Act provides that

the Commission “shall evaluate all relevant economic factors which have a bearing on the state of the
 35 19 U.S.C. § 1677(7)(C)(iii); see also SAA at 851 and 885 (“In material injury determinations, the Commission

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

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

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

 36 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 Publication 3155 at 25 n.148 (Feb. 1999).

 37 CR/PR at Table III-2. Domestic production of MCBs decreased from 72,895 short tons in 2006 to 71,125

short tons in 2007 and to 70,441 short tons in 2008. Production was 17,412 short tons in interim 2009 compared

with 40,633 short tons in interim 2008. Id.

 38 CR/PR at Table III-2. Capacity utilization was 45.3 percent in 2006, 44.2 percent in 2007, 43.8 percent in

2008, 50.5 percent in interim 2008 and 21.6 percent in interim 2009.

 39 CR/PR at Table C-1. 

 40 U.S. shipments were 59,181 short tons in 2006, 58,074 short tons in 2007, and 62,470 short tons in 2008. U.S.

shipments were 16,284 short tons in interim 2009 compared with 35,111 short tons in interim 2008. CR/PR at Table

III-3. 

 41 CR/PR at Table III-4. The ratio of inventories to total shipments was *** percent in 2006, *** percent in

2007, and *** percent in 2008. The ratio was *** percent in interim 2008 compared with *** percent in interim

2009. 

 42 CR/PR at Tables VI-1 and C-1. The domestic industry's quantity of net sales was *** short tons in 2006, ***

short tons in 2007, and *** short tons in 2008. The total value of the industry's net sales was $*** in 2006, $*** in

2007, and $*** in 2008. In interim 2008, total net sales were *** short tons (***), compared with *** short tons

(***) in interim 2009. 

 43 Operating income was $*** million in 2006, $*** million in 2007, and $*** million in 2008. The domestic

industry experienced a $*** operating loss in interim 2009 compared with operating income of $*** in interim

2008. CR/PR at Tables VI-1 and C-1.

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

28

industry.”35 These factors include output, sales, inventories, ability to raise capital, research and

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

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

to the affected industry.”36

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

industry’s performance was mixed over the period examined, with positive changes in most factors

relating to U.S. shipments and financial indicators, and negative changes relating to production, capacity

utilization, and employment. From 2006 to 2008, while the U.S. producers’ capacity to produce MCBs

remained constant, domestic production of MCBs decreased by 3.4 percent,37 and the already low

capacity utilization declined steadily from 45.3 percent in 2006 to 43.8 percent in 2008.38 The number of

production and related workers declined by 7.2 percent and productivity declined by 3.8 percent from

2006 to 2008.39 Despite the declines in production, however, domestic producers were able to increase

their U.S. shipments by 5.6 percent40 and to decrease their inventories as a ratio to shipments from 2006

to 2008, as apparent U.S. consumption increased.41

The domestic industry’s financial indicators – specifically, net sales measured by value and

operating income – increased overall from 2006 to 2008.42 The domestic industry was profitable in each

full year of the period, with operating income fluctuating between years and increasing from $*** in 2006

to $*** in 2008.43 Operating income as a share of net sales remained positive from 2006 to 2008,

increasing from *** percent in 2006 to *** percent in 2007, and returning in 2008 to *** percent.44 The

domestic industry as a whole did not become unprofitable until the first half of 2009 when demand from
 45 Operating losses as a share of net sales was *** percent in interim 2009 compared with operating income as a

share of net sales of *** percent in interim 2008. CR/PR at Table C-1.

 46 CR/PR at Tables VI-1 and VI-2.

 47 CR/PR at Table C-1. 

 48 19 U.S.C. 1677(7)(H) (emphasis added).

29

its customers in the steel industry collapsed.45 Even with the unprecedented drop in demand, ***.46 For

these reasons, we find that the domestic industry has not yet experienced material injury by reason of

subject imports on a cumulated basis.

Moreover, we do not find a sufficient causal link between subject imports on a cumulated basis

and the current condition of the domestic industry. As discussed above, cumulated subject imports made

only small gains in U.S. market share, particularly as apparent U.S. consumption and U.S. shipments

increased from 2007 to 2008. Despite consistent underselling, the prices of subject imports did not

appear to suppress domestic prices for MCBs.47 The domestic industry was able to raise prices to cover

most of its increased costs, even as subject imports increased from 2007 to 2008. In fact, it was not until

domestic demand collapsed that the domestic industry became ***. Indeed, the significant decline in

apparent U.S. consumption that began in the fourth quarter of 2008 and continued in the first half of 2009

likely had a role in the domestic industry's negative financial performance at the end of the period

examined.

For the foregoing reasons, and 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 by reason of cumulated subject imports of MCBs from China and Mexico that are

allegedly sold in the United States at less than fair value and are allegedly subsidized by the Government

of China.

II. REASONABLE INDICATION OF THREAT OF MATERIAL INJURY

A. Cumulation

For a determination of threat of material injury by reason of subject imports, section 771(7)(H) of

the Tariff Act of 1930 provides that to the extent practicable, the Commission may cumulatively assess

the volume and price effects of imports of the subject merchandise from all countries with respect to

which – 

(i) petitions were filed under section 1671a(b) or 1673a(b) of this title on the same

day.

(ii) investigations were initiated under section 1671a(a) or 1673a(a) of this title on

the same day, or

(iii) petitions were filed under section 1671a(b) or 1673a(b) of this title and

investigations were initiated under section 1671a(a) or 1673a(a) of this title on

the same day,

if such imports compete with each other and with domestic like products in the United States market.48

Cumulation for determining threat of material injury, in contrast to cumulation for material

injury, is within the discretion of the Commission. In exercising that discretion, the Commission has

traditionally considered factors such as (1) whether the imports are increasing at similar rates in the same

markets, (2) whether the imports have similar margins of underselling, and (3) the probability that imports

will enter the United States at prices that would have a depressing or suppressing effect on
 49 See Torrington Co. v. United States, 790 F. Supp. 1161, 1172 (Ct. Int’l Trade 1992) (affirming Commission’s

determination not to cumulate for purposes of threat analysis when pricing and volume trends among subject

countries were not uniform and import penetration was extremely low for most of the subject countries), aff’d

without opinion, 991 F.2d 809 (Fed. Cir. 1993); Metallverken Nederland B.V. v. United States, 728 F. Supp. 730,

741-42 (Ct. Int’l Trade 1989); Asociacion Colombiana de Exportadores de Flores v. United States, 704 F. Supp.

1068, 1072 (Ct. Int’l Trade 1988).

 50 CR/PR at Table IV-3. Shipments of subject imports from China increased from 32,976 short tons in 2006 to

36,184 short tons in 2007, or by 9.7 percent, but then increased more markedly to 42,072 short tons in 2008, or by

16.3 percent.

 51 CR/PR at Table IV-3. Subject imports from Mexico declined sharply from *** short tons in 2006 to *** short

tons in 2007, or by *** percent, and then declined an additional *** percent in 2008 to *** short tons.

 52 Reported Chinese capacity increased from 327,363 short tons in 2006 to 369,463 short tons in 2007, and then

more sharply to 520,272 short tons in 2008. The capacity of the Mexican producer remained constant over that

period at *** short tons. CR/PR at Tables VII-1 and VII-2.

 53 The different pricing strategies of the subject imports also indicates the different incentives the subject sources

have in selling to the U.S. market. Examination of unit value data on imports suggests that during the period

examined, subject imports from China occupied one price point, the U.S. industry a much higher one, and subject

imports from Mexico a price point somewhere in between. For example, in 2008 the unit value of U.S. shipments

was $1,226 per short ton, that of shipments of imports from China was $901 per ton, and that of shipments of

imports from Mexico was $*** per ton. This relationship among the three sources remained the same throughout the

period examined. CR/PR at Table C-1. 

 54 19 U.S.C. § 1677(7)(F)(ii).

30

domestic prices of that merchandise.49 In these investigations, examination of these factors lead us to

conclude that we should not exercise our discretion to cumulate subject imports from China with subject

imports from Mexico.

In particular, subject imports from China and Mexico are not increasing at similar rates in the

U.S. market. Shipments of subject imports from China increased steadily and substantially from 2006 to

2008.50 Shipments of subject imports from Mexico, on the other hand, fell rapidly, by more than half,

over the period examined, particularly between 2006 and 2007.51 Moreover, the Chinese industry

expanded rapidly between 2006 and 2008, whereas the size of the Mexican industry remained static over

that period,52 indicating that the Chinese industry would have a greater incentive to ship to the United

States in the imminent future than would the Mexican industry.53 These differing trends in imports,

industry size, and incentive to ship to the U.S. market indicate that, in the absence of antidumping and

countervailing duty orders in these investigations, imports from subject sources would likely compete

differently in the U.S. market.

Accordingly, in determining whether there is a reasonable indication that an industry in the

United States is threatened with material injury by reason of subject imports, we do not exercise our

discretion to cumulate subject imports from China with subject imports from Mexico, and conduct

separate threat of material injury analyses regarding each of these subject countries.

B. Reasonable Indication of Threat of Material Injury by Reason of Subject Imports

from China

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.”54 The Commission may not make

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

 56 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,

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

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

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

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

product, and , . .

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

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

being imported at the time).

19 U.S.C. § 1677(7)(F)(i). This investigation does not involve an agricultural product, so statutory threat factor

(VII) is not implicated. As no one has argued that the domestic industry is currently engaging or will imminently

engage in any efforts to develop a derivative or more advanced version of the domestic like product, statutory threat

factor (VIII) is not implicated.

 57 CR/PR at Table IV-2. During the first six months of 2009, subject imports were *** short tons compared with

*** short tons during the same period in 2008. Id.

 58 The market share of subject imports from China increased from *** percent in 2006 to *** percent in 2008. 

During that same period, the market share of domestic producers declined from *** percent to *** percent, the

market share of subject imports from Mexico declined from *** percent to *** percent, and the market share of

nonsubject imports fell from *** percent to *** percent. CR/PR at Table C-1.

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

31

“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.55 In making

our determinations, we consider all statutory threat factors that are relevant to these investigations.56 

The volume of subject imports from China was substantial and increased overall from 40,441

short tons in 2006 to 44,891 short tons in 2008.57 By 2008, subject imports from China had captured

substantial market share from the domestic industry, subject imports from Mexico and nonsubject imports

as the market shares of those sources declined.58 Thus, the domestic industry’s overall loss of market

share to subject imports was due entirely to the rapid increase in subject imports, and subject imports’

overall presence in the market increased by 5.8 percentage points.

With regard to production capacity for MCBs in China, as an initial matter we note that the

information the Commission has on the Chinese industry, while not comprehensive, is fairly extensive for

a preliminary phase investigation. Petitioner Resco identified 35 MCB producers in China.59 Seven of

these firms responded to the Commission questionnaire, and these responses are estimated to account
 60 CR at VII-3, PR at VII-2.

 61 Reported capacity in China increased from 327,363 short tons in 2006 to 369,463 short tons in 2007, and

increased more sharply, to 520,272 short tons, in 2008. Reported capacity is expected to decline slightly to 503,332

short tons in 2009, and increase slightly to 513,012 short tons in 2010. CR/PR at Table VII-1.

 62 CR/PR at Table VII-1.

 63 CR/PR at Table C-1. Apparent U.S. consumption in 2008 was *** short tons.

 64 The share of exports in total shipments by reporting Chinese producers first declined very slightly from 70.7

percent in 2006 to 70.5 percent in 2007, and then increased to 76.0 percent in 2008. CR/PR at Table VII-1.

 65 CR at VII-9, PR at VII-7.

 66 U.S. importers’ end-of-period inventories increased from 24,279 short tons in 2006 to 25,373 short tons in

2007, and then increased again to 27,527 short tons in 2008. The 2008 total was 65.4 percent of preceding-period

U.S. shipments and was *** percent of apparent U.S. consumption. CR/PR at Tables VII-3 and C-1.

 67 CR at II-8 and II-9, PR at II-6-II-7, CR/PR at Table II-3. Nine of 17 responding importers and two of three

responding producers reported that non-price factors were either “sometimes” or “never” important in their sales. 

Resco indicated that price is an important, and many times the only, factor that customers consider when

making their purchasing decisions. CR at II-8, PR at II-6-II-7. According to Resco, the market price is not the

deciding factor for less than 30 percent of its customers. CR at II-8, PR at II-6-II-7. Respondents indicated that

while price is important to their customers, their customers are more concerned with finding suppliers who bring

new ideas and new abilities through technology and service to lower their costs of producing steel. CR at II-9, PR at

II-6-II-7.

32

for approximately *** of Chinese exports to the United States in 2008.60 Based on data from these firms,

reported Chinese production capacity rose markedly during the period examined, increasing over ***

percent between 2007 and 2008, and is not expected to shrink appreciably in 2009 and 2010.61 These

firms, moreover, reported ample excess capacity; in 2008, they operated at a capacity utilization rate of

only 62.9 percent, or approximately 193,000 short tons.62 Assuming that other non-responding Chinese

firms have similar amounts of excess capacity, and taking the responding firms’ estimate of their share in

total production at face value, as of the end of 2008 there was approximately 288,000 short tons of excess

capacity in China, which is nearly *** apparent U.S. consumption in that year, a level we find to be

significant.63 

Moreover, to the extent the excess capacity would be utilized, much of the new production will

be devoted to export markets as reporting Chinese producers became increasingly export-oriented during

the period examined.64 Although the U.S. market accounted for a relatively small share of total export

shipments by the Chinese industry, we note that since 2007, the Chinese industry has been subject to

antidumping orders in the European Union and in Turkey.65 Thus, going forward, the U.S. market will be

more attractive to the Chinese industry than alternative export markets. In addition, with regard to

inventories held in the United States by U.S. importers, such inventories increased from 2006 to 2008,

and by the end of the period were significant in relation to preceding-period shipments and apparent U.S.

consumption.66 We find that the rising trend in the volume of imports from China during the period

examined, substantial excess capacity in the Chinese industry, the industry’s consistent focus on export

markets, the high level of inventories held in the United States, and the presence of significant barriers to

Chinese exports in third country markets indicate the likelihood of substantially increased subject imports

in the absence of import relief.

With regard to likely price effects, we evaluate the likely underselling and price effects in light of

key conditions of competition in the U.S. market. First, although information at this preliminary stage of

the investigations is limited, the record suggests that price is an important factor in purchasing decisions,

although non-price factors may be equally important in some instances.67 This suggests that subject

imports from China are likely highly substitutable with the domestic like product. Second, as measured
 68 Apparent U.S. consumption first decreased slightly from *** short tons in 2006 to *** short tons in 2007, and

then rose to *** short tons in 2008. Apparent U.S. consumption was *** short tons in January-June 2009 compared

with *** short tons in January-June 2008. CR/PR at Table C-1.

 69 Apparent U.S. consumption first decreased slightly from *** short tons in 2006 to *** short tons in 2007, and

then rose to *** short tons in 2008. Apparent U.S. consumption was *** short tons in January-June 2009 compared

with *** short tons in January-June 2008. CR/PR at Table C-1.

 70 CR at II-5-II-6, PR at II-4.

 71 CR/PR at Table VII-3. Inventories of imports from China held by U.S. importers increased from 24,279 short

tons in 2006 to 27,527 short tons in 2008. Such imports declined as a ratio to preceding-period U.S. shipments of

imports from 73.6 percent in 2006 to 65.4 percent in 2008. That ratio, however, was 73.4 percent in January-June

2009 compared with 46.1 percent in January-June 2008.

33

by apparent U.S. consumption, demand for MCBs decreased, but only slightly, from 2006 to 2007, before

rising, by *** percent, from 2007 to 2008. Consumption was substantially lower in interim 2009 than in

interim 2008, however, and full-year 2009 consumption is likely to be substantially lower than 2008

levels.68 

We have found that subject imports from China undersold domestic MCBs to a significant degree 

and that, notwithstanding this underselling, prices for the domestic like product were not depressed during

the period examined. As explained above, however, the record does not contain sufficient evidence of

price suppression, and therefore we do not conclude that subject imports had a significant adverse effect

on domestic prices during the period examined. We have found that, among other factors, the substantial

excess capacity in the Chinese industry and its consistent focus on export markets during the period

examined indicate the likelihood of increased subject imports in the absence of import relief. Even

though demand is currently weak, we find that it is likely that, given the fact that Chinese MCBs are

consistently priced below the domestic like product, and given the importance of price in purchasing

decisions, those purchasers that are in the market for MCBs would likely purchase the Chinese product. 

This purchasing pattern would likely result in either price depression or suppression. Consequently, in

light of consistent underselling, we determine that imports of the subject merchandise are entering at

prices that are likely imminently to have a significant depressing or suppressing effect on domestic prices

in a market where U.S. demand was lower at the end of the period than at the beginning, and that such

prices are likely to increase demand for further imports. 

Finally, and most important, although we believe the domestic industry has not yet experienced

material injury by reason of subject imports, the market conditions that allowed the domestic industry to

avoid such injury have deteriorated. While steady to slightly increasing demand from 2006 to 2008

cushioned the impact of subject imports, demand was substantially lower in interim 2009 compared to the

corresponding period of 2008.69 Indeed, the domestic industry faces a much different environment in

2009 and 2010 than it did at the beginning of the period examined. Demand for MCBs has recently fallen

dramatically due to the severe slump in the steel industry.70 Further evidence of the industry’s

vulnerability is found in the fact that inventories of Chinese product held in the United States increased

steadily over the period examined, peaking in 2008, and were significant in relation to preceding-period

U.S. shipments throughout the period, particularly so in interim 2009.71 Accordingly, based on our

consideration of the record and the recent developments in the marketplace in particular, we find that the

domestic industry is vulnerable to material injury from likely substantially increased volumes of subject

imports.

Because of worsening demand conditions, the domestic industry is no longer shielded from the

impact of subject imports, which are likely to increase significantly in volume and continue to undersell

significantly the domestic like product in the absence of import relief. The domestic industry would
 72 Demand for MCBs, as measured by apparent U.S. consumption, was *** short tons in January-June 2009,

compared with *** short tons in January-June 2008. Industry profitability, as measured by the ratio of operating

income to net sales, was *** percent in January-June 2009, compared with *** percent in January-June 2008. 

CR/PR at Table C-1.

 73 U.S. shipments of imports from nonsubject sources declined from *** short tons in 2006 to *** short tons in

2007, and then declined again, to *** short tons, in 2008. Their market share declined from *** percent in 2006 to

*** percent in 2007, and then even further to *** percent in 2008, for an overall decline of *** percentage points. 

CR/PR at Table C-1.

34

likely experience significantly reduced profitability due to significantly depressed or suppressed prices as

well as reduced production, shipments, market share, and employment

We also find that subject imports will have negative effects on the development and production

efforts of the domestic industry. From 2006 to 2008, steady to slowly rising demand mitigated the impact

of subject imports, and allowed the domestic industry to maintain its profitability even as it lost market

share. This trend did not continue in the interim 2009 period, however, as demand dropped, the market

share of imports from China continued to increase, and the domestic industry experienced declining

financial performance, moving into a ***. As subject imports are likely to continue to increase in the

imminent future in the absence of import relief, the domestic industry will lose not only market share, but

sales volumes as well. Given the clear link between production volumes and profitability, if volumes fall

further the domestic industry will experience further declines in operating income, and will likely

experience declines in employment, returns on assets, and in its ability to maintain and upgrade

production facilities. 

In considering whether the domestic industry is threatened with material injury by reason of

subject imports, we have also considered the extent to which other factors are likely to contribute to

injury to ensure that we do not attribute injury from other factors to subject imports. As discussed above,

we find that reduced demand for MCBs is likely to render the industry more vulnerable to the effects of

imports. With regard to the current demand environment, we note that Chinese import market share

increased in interim 2009, indicating that imports from China, given their lower prices, were taking

market share from domestic product in an environment of rapidly weakening demand.72 In any final

phase of these investigations, we intend to explore further the role that any changes in demand would play

in the performance of the domestic industry in order to ensure that we do not attribute to subject imports

the effects of any future adverse demand conditions. Further, nonsubject imports are not a significant

factor in the MCB market, inasmuch as during the period examined they never exceeded *** percent of

the U.S. market and their volumes declined in both absolute volume and market share.73 Thus, there is

no indication that, in the imminent future, nonsubject imports would capture market share from the

domestic industry to the same extent as subject imports. 

Consequently, we conclude for purposes of the preliminary phase of these investigations that

there is a causal nexus between the subject imports and a likely imminent adverse impact on the domestic

industry, which demonstrates a reasonable indication that the domestic industry is threatened with

material injury by reason of subject imports.

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

Imports from Mexico

Based on an evaluation of the statutory threat factors that are relevant to this investigation, we

determine that there is no reasonable indication that the domestic industry producing MCBs is threatened

with material injury by reason of subject imports from Mexico. 
 74 CR/PR at Tables IV-2, IV-4, IV-5.

 75 CR/PR at Table IV-2. The volume of subject imports from Mexico was slightly higher in interim 2009 than in

interim 2008, but was still at a level far below that at the start of the period examined. Id.

 76 Market penetration of subject imports from Mexico decreased from *** percent in 2006 to *** percent in

2007 and then dropped further to *** percent in 2008. CR/PR at Table IV-8. 

 77 CR/PR at Table VII-2. Reported production capacity in Mexico remained at *** through the period

examined.

 78 CR/PR at Table VII-2.

 79 CR/PR at Table VII-2. The share of exports in Refmex’ total shipments declined from *** percent in 2006 to

*** percent in 2008.

 80 With regard to Refmex’ projections of shipments to the United States in calendar years 2009 and 2010, we

note that the projected shipment levels are within the range of those with regard to which we found no reasonable

indication of injury during the period examined. CR/PR at table VII-2.

 81 CR/PR at Table VII-3. U.S. importers’ end-of-period inventories of imports from Mexico increased from ***

short tons in 2006 to *** short tons in 2008. As a ratio to preceding-period shipments, these inventories increased

from *** percent in 2006 to *** percent in 2008. These inventories totaled *** short tons in interim 2009 compared

with *** short tons in interim 2008.

35

In the absence of an antidumping duty order, we find that substantially increased imports of the

subject merchandise from Mexico into the United States are not imminent for a number of reasons. First,

subject imports from Mexico did not increase at a significant rate on either an absolute or relative basis

during the period examined.74 In fact, the volume of subject imports from Mexico declined *** from

2006 to 2007, before it recovered *** in 2008. Such imports decreased from *** short tons in 2006 to

*** short tons in 2007 and then rose to *** short tons in 2008.75 Consequently, as apparent U.S.

consumption increased from 2006 to 2008, the market penetration of the subject imports from Mexico

fell, indicating that the Mexican producer was gradually withdrawing from what was, at the time, a

growing market, preferring to concentrate, as discussed below, on its home market.76

 Second, reported capacity in Mexico from the lone Mexican producer RHI-Refmex S.A. de C.V.

(Refmex), was stable from 2006 to 2008 and is projected to remain stable through 2010.77 Moreover, the

industry in Mexico producing subject merchandise is small and does not have substantial unused capacity. 

As of the end of 2008, Refmex reported unused capacity of only *** and projects excess capacity in 2009

and 2010 of no more than approximately *** short tons.78 Consequently, the projected unused capacity

of the reporting producer in Mexico does not indicate that the subject industry is capable of increasing its

shipments to the United States to a level that would exceed *** percent of current (2008) U.S.

consumption, even assuming it had an incentive to do so.

Third, the subject industry in Mexico became less and less export oriented during the period

examined. By 2008, its exports accounted for only *** percent of its total shipments, indicating that it

currently intends to focus on the Mexican market.79 Although the United States was Refmex’ most

important export market during the period, in light of its increased focus on its home market we do not

find that Refmex is likely to devote its unused capacity or shift its consistent shipment patterns to increase

shipments substantially to the United States in the absence of an antidumping duty order.80 We further

observe that, although U.S. importers’ inventories of subject imports from Mexico were *** as a share of

preceding-period shipments, their absolute levels were minimal.81 Finally, we note that the Mexican

industry is not faced with any barriers in third-country markets. Consequently, we conclude that the

volume of subject imports, which was declining and not significant during the period examined, is not

likely to increase substantially in the imminent future.
 82 CR/PR at Tables V-1, V-2, and V-4.

 83 We note further that petitioner ***. CR/PR at Table V-6.

36

As discussed above, we recognize that subject imports from Mexico undersold the domestic

product in the majority of possible quarterly price comparisons. We also noted, however, that because

prices for the domestic like product generally increased during the period examined, subject imports did

not have significant price-depressing effects, nor did they have price-suppressing effects during the period

examined.82 Given the low volumes of imports from Mexico during the period examined, and our finding

that significant increased imports from Mexico are not imminent, we find that subject imports from

Mexico likely will not affect prices for the domestic like product negatively in the imminent future, as

subject imports did not do so in a significant manner during the period examined.83 Therefore, we

conclude that subject imports from Mexico will likely not have significant price-depressing or pricesuppressing effects in the imminent future which would be likely to increase demand for further imports.

In evaluating the likely impact on the domestic industry of subject imports from Mexico, we note

that, as explained above, we cannot conclude that the cumulated subject imports, let alone subject imports

from Mexico, are currently having a significant adverse impact on the domestic industry. Moreover, as

discussed above, we find that in the imminent future the subject imports from Mexico will not likely

increase substantially in volume or begin to have significant price-suppressing effects. Thus, despite our

finding that the domestic industry is vulnerable to future injury from subject imports from China, we find

that further imports from Mexico are not imminent and that material injury by reason of subject imports

from Mexico would not occur in the absence of an antidumping duty order. Accordingly, we determine

that there is no reasonable indication that the domestic industry is threatened with material injury by

reason of subject imports from Mexico.

III. CONCLUSION

For the foregoing reasons, we determine that there is a reasonable indication that an industry in

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

bricks from China that are allegedly subsidized by the government of China and sold in the United States

at LTFV. We further 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 imports of certain magnesia carbon

bricks from Mexico that are allegedly sold in the United States at LTFV.
 1

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

merchandise subject to these investigations.

 2 Federal Register notices cited in the tabulation are presented in appendix A.

I-1

PART I: INTRODUCTION

BACKGROUND

These investigations result from a petition filed on July 29, 2009, with the U.S. Department of

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

Resco Products Inc., (Resco) Pittsburgh, PA. The petition alleges that an industry in the United States is

materially injured and threatened with material injury by reason of subsidized and less-than-fair-value

(“LTFV”) imports of certain magnesia carbon bricks (“MCB”)1

 from China and by reason of LTFV

imports of MCB from Mexico. Information relating to the background of the investigations is provided

below.2

Effective date Action

July 29, 2009 Petition filed with Commerce and the Commission; institution of Commission

investigations (74 FR 39969, August 10, 2009)

August 19, 2009 Commission’s conference1

August 25, 2009 Commerce’s notice of initiation of antidumping duty investigations (74 FR 42852);

Commerce’s notice of initiation of countervailing duty investigation (74 FR 42858)

September 11, 2009 Commission’s vote

September 14, 2009 Commission determinations transmitted to Commerce

September 21, 2009 Commission 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 subsidies and

dumping margins, and domestic like product. Part II of this report presents information on conditions of

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

U.S. industry, including data on capacity, production, shipments, inventories, and employment. Parts IV

and V present the volume and pricing of imports of the subject merchandise, respectively. Part VI

presents information on the financial experience of U.S. producers. Part VII presents the statutory

requirements and information obtained for use in the Commission’s consideration of the question of threat

of material injury, as well as information regarding nonsubject countries.

U.S. MARKET SUMMARY

MCB generally is used to provide thermal and corrosion resistance in a variety of settings,

primarily in the production of iron and steel. The leading U.S. producers of MCB are ANH, LWB

Refractories (LWB), and Resco, while leading producers of MCB outside the United States include RHI

Refractories Liaoning, Mayerton, and Jiangsu Suja of China and RHI-Refmex of Mexico. The leading

U.S. importers of MCB from China are Veitsch-Radex, Mayerton, and Fedmet, while the leading
 3 Certain Magnesia Carbon Bricks from the People’s Republic of China: Initiation of Countervailing Duty

Investigation, 74 FR 42858, August 25, 2009.

I-3

importer of MCB from Mexico is Veitsch-Radex. Leading importers of MCB from nonsubject countries

(primarily Germany and the United Kingdom) include Veitsch-Radex and Vesuvius. 

Apparent U.S. consumption of MCB totaled approximately *** short tons $*** in 2008. 

Currently, four firms are known to produce MCB in the United States. U.S. producers’ U.S. shipments of

MCB totaled 62,470 short tons ($76.6 million) in 2008, and accounted for *** percent of apparent U.S.

consumption by quantity and *** percent by value. U.S. shipments of imports from subject sources

totaled 43,837 short tons ($39.6 million) in 2008 and accounted for *** percent of apparent U.S.

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

short tons ($***) in 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 the investigations is presented in appendix C, table C-1. Except

as noted, U.S. industry data are based on questionnaire responses of three firms that accounted for ***

percent of U.S. production of MCB during 2008. U.S. imports from China and Mexico are based on

questionnaire responses from 16 firms and one firm, respectively. Data regarding the Chinese industry

are based on seven foreign producer questionnaire responses, data regarding the Mexican industry are

based on one foreign producer questionnaire response, while information with respect to other foreign

industries is drawn from public sources.

PREVIOUS AND RELATED TITLE VII INVESTIGATIONS

MCB has not been the subject of any prior countervailing/antidumping duty investigation(s) in

the United States.

NATURE AND EXTENT OF ALLEGED SUBSIDIES AND SALES AT LTFV

Alleged Subsidies

On August 25, 2009, Commerce published a notice in the Federal Register of the initiation of its

countervailing duty investigation on MCB from China.3

 In its notice, Commerce identified the following

government programs alleged in the petition to have provided countervailable subsidies to producers of

MCB in China:

! Provision of inputs for less than adequate remuneration

! Export restraints of raw materials

! Tax benefit programs

! Northeast revitalization program and related provincial policies

! Direct Grants

! Grants to companies for “outward expansion” and export performance in Guangdong province

! Preferential loans and directed credit to the magnesia carbon brick industry

! Cash grant programs

! Zhejiang Province program to rebate antidumping costs.
 4 Certain Magnesia Carbon Bricks from the People’s Republic of China and Mexico: Initiation of Antidumping

Duty Investigations, 74 FR 42852, August 25, 2009.

 5

 Ibid.

 6

 Ibid.

 7

 Ibid.

I-4

Alleged Sales at LTFV

On August 25, 2009, Commerce published a notice in the Federal Register of the initiation of its

antidumping duty investigations on MCB from China4

 and Mexico.5 Commerce has initiated

antidumping duty investigations based on estimated dumping margins of 112 percent to 349 percent for

MCB from China and 153 percent to 295 percent for MCB from Mexico.

THE SUBJECT MERCHANDISE

Commerce’s Scope

Commerce has defined the imported merchandise subject to these investigations as:

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

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

MgO, with carbon levels ranging from trace amounts to 30 percent by weight, regardless of

enhancements, (for example, magnesia carbon bricks can be enhanced with coating, grinding, tar

impregnation or coking, high temperature heat treatments, anti-slip treatments or metal casing)

and regardless of whether or not anti-oxidants are present (for example, antioxidants can be added

to the mix from trace amounts to 15 percent by weight as various metals, metal alloys, and metal

carbides).6

Tariff Treatment

During the period examined, MCB has been classified in the Harmonized Tariff Schedule of the

United States (HTS) under subheading 6902.10.10, magnesite bricks (which also contains products other

than MCB, including refractory blocks, tiles and other refractory products), and under HTS subheading

6902.10.50, other refractory bricks. MCB may also enter under HTS subheading 6815.91.00, articles of

stone or other mineral substances, not elsewhere specified or included, containing magnesite, dolomite or

chromite, or HTS subheading 6815.99.10, articles of stone or other mineral substances, not elsewhere

specified or included, not containing magnesite, dolomite, or chromite.7

 Table I-1 presents current tariff

rates for MCB. 
I-5

Table I-1

MCB: Tariff rates, 2009

HTS provision Article description

General1 Special2

Column

23

Rates (percent ad valorem)

6815

6815.91.00.00

6815.99

6815.99.20.00

6815.99.40.00

6902

6902.10

6902.10.10.00

6902.10.50.00

Articles of stone or of other mineral substances (including

carbon fibers, articles of carbon fibers and articles of

peat), not elsewhere specified or included:

Containing magnesite, dolomite or chromite

 Other:

Talc, steatite and soapstone, cut or 

sawed, or in blanks, crayons, 

cubes, disks or other forms.............

Other ..............................................

Refractory bricks, blocks, tiles and similar refractory ceramic

constructional goods, other than those of siliceous fossil

meals or similar siliceous earths:

Containing by weight, singly or together, more than 50 

percent of the elements magnesium, calcium or 

chromium, expressed as MgO, CaO or Cr2O3:

Magnesite bricks..............................................

 

Other................................................................

Free

Free

Free

Free

Free

(

4

)

(

4

)

(

4

)

(

4

)

(

4

)

30%

2.2 ¢/kg

30%

13%

30%

 1 Normal trade relations, formerly known as the most-favored-nation duty rate. 

 2

 Special rates not applicable when General rate is free.

 3

 Applies to imports from a small number of countries that do not enjoy normal trade relations duty status.

 4

 General note 3(c)(i) defines the special duty program symbols enumerated for this provision. 

Source: Harmonized Tariff Schedule of the United States (2009).
 8

 Refractories are heat-resistant materials that line high-temperature furnaces, ladles, and other processing units. 

In addition to being heat-resistant, refractories also withstand physical wear and corrosion by chemical agents. The

Refractories Institute, http://www.refractoriesinstitute.org (accessed August 12, 2009).

 9

 Petition, CVD Vol. I, p. 5.

 10 Conference transcript, p. 46 (Mazard).

 11 Conference transcript, p. 45 (Mazard).

 12 Ladles used in steel production are the largest users of MCB, followed by electric arc furnaces. Sales for basic

oxygen furnaces constitute a small portion of the MCB market since steel manufacturing practices have extended the

life of MCB applications. Conference transcript, p. 24 (Brown).

 13 Troell, Peter T., “Evolution of Magnesia-Carbon Refractories,” Ceramic Industry; Feb. 1995, Vol. 144, Issue 2.

 14 There are at least eight different grades of magnesia and four different grades of graphite. Conference

transcript, p. 110 (B. Stein).

 15 MCB with 90 to 95 percent magnesia has a melting point of 3,980 degrees Fahrenheit while pure magnesia

(100 percent) melts at 5,070 degrees Fahrenheit. Harbison-Walker Co., “Refractory Raw Materials,” p. CR-3.

 16 Magnesia is said to be fused when the heat treatment during the production process becomes molten. Landy,

Richard A., “Magnesia Refractories,” Refractories Handbook, ed. Schacht, Charles A. 2004, p. 111.

 17 Sintering refers to the process of forming objects from a metal powder by heating the powder at a temperature

below its melting point. When the powder is compacted into the desired shape and heated, i.e., sintered, for up to

three hours, the particles composing the powder join together to form a single solid object. Landy, Richard A.,

“Magnesia Refractories,” Refractories Handbook, ed. Schacht, Charles A. 2004, p. 111.

I-6

THE PRODUCT

Description and Applications

MCB is a refractory8

 product made mostly from a combination of magnesia and carbon that

provides thermal and corrosion resistance in operations involving high temperatures and harsh operating

conditions, such as in the production of steel. The scope of this case consists of chemically bonded

MCBs where the magnesia component amounts to at least 70 percent and the carbon levels range from

trace amounts to 30 percent.9

 MCB may contain other substances such as antioxidants that range from

trace amounts to 15 percent by weight.

MCB is considered to be the most durable refractory brick on the market for furnaces and ladle

linings, especially around the slag line.10 While other refractory bricks, such as fired magnesite, fired

bauxite, magnesia dolomite, and magnesia alumina graphite bricks, may be used in place of MCB, these

alternatives do not have the same physical characteristics of MCB, are easily differentiated by price, and

their uses are not perceived by the steel producers as substitutable.11 MCB is used to line the lower

sidewalls, upper sidewalls, slag lines, and roofs of ladles12 and ladle metallurgy furnaces involved in steel

production and refining where it comes in contact with both molten steel and molten slag. Furthermore,

MCB is also used to line basic oxygen furnaces (BOF) and for electric arc furnaces (EAF).13

MCB is produced in a large number of grades with different levels of magnesia, carbon, and

different contributions of additives depending upon the intended specific applications.14 MCB is

characterized by its high heat resistance (it has a high melting point, which varies depending on the

amount and type of impurity within the grain of the brick),15 good resistance to slags and possesses low

vulnerability to degradation by iron oxide and alkalies. Unlike most other refractory products, MCB

degradation can occur within the refractory structure itself as a result of high-temperature reactions. The

degradation can disrupt the brick structure through the loss of the carbon bond, resulting greater

vulnerability to wear. Therefore, the quality of magnesia selected for use in MCB should have overall

low levels of impurities to minimize the reducing effects of carbon. Heat treatments on the magnesia raw

materials can cause the magnesia to be either fused16 or sintered,17 which alter the performance of MCB in

its application. Sintered magnesia is used in a range of market applications and has a high melting
 18 Landy, Richard A., “Magnesia Refractories,” Refractories Handbook, ed. Schacht, Charles A. 2004, pp.

111–113.

 19 Troell, Peter T., “Evolution of Magnesia-Carbon Refractories,” Ceramic Industry, Feb. 1995, Vol. 144, Issue 2.

 20 Ibid.

 21 Harbison-Walker Co., “Refractory Raw Materials,” p. CR-3.

 22 Ibid.

 23 Conference transcript, p. 44 (Mazard).

 24 Pitch or resin impregnation fills in the voids of the brick, making is less porous and increasing the carbon in the

brick resulting in better steel slag resistance. E-mail from ***.

 25 Metal casings on MCBs increase strength and improve corrosion resistance in areas of the furnace where

mechanical equipment can corrode MCB that is not plated. Metal cased MCB are not used in ladles used for steel

production. E-mail from ***.

 26 High-temperature treatments decrease the porosity of the MCB resulting in increased resistance to steel slag

penetration. E-mail from ***.

 27 Troell, Peter T., “Evolution of Magnesia-Carbon Refractories,” Ceramic Industry, Feb. 1995, Vol. 144, Issue 2.

 28 Conference transcript, p. 55 (Brown). 

 29 Conference transcript, p. 47 (Mazard).

 30 Conference transcript, p. 91 (Copp).

 31 The type of steel being produced and the specific production methods associated with the product determine

how frequently the lining of a ladle is replaced. Conference transcript, p. 53 (Brown).

 32 Conference transcript, pp. 44-45 (Mazard).

I-7

point while fused magnesia is considered to maintain strength and corrosion resistance as well as

chemical stability thereby enhancing the performance of MCB.18 The carbon in MCB prevents liquid slag

from penetrating and eroding the brick. The high carbon content of MCB is achieved by adding carbon in

such forms as pitch or graphite with natural flake graphite the most common. Graphite purity is also

important in determining stability and performance in high-temperature environments.19 Natural flake

graphite is one of the widely used carbons because of its high oxidation resistance, which contributes to

the reduced erosion rates, and its ability to impart high thermal conductivity to the brick.20 The high

thermal conductivity results in reduced thermal stresses within the brick and faster cooling of the MCB

between heats.21 High temperature stability of MCB also is achieved through the addition of additives,

such as powdered metals (aluminum, magnesium, and silicon), to enhance resistance to oxidation as these

metals consume oxygen that would otherwise oxidize with the carbon, thereby 

increasing the strength of the brick.22 MCB quality can be further enhanced with the combination of other

treatments23 such as pitch or resin impregnation,24 metal casing,25 and high-temperature treatments26

resulting in a broad range of product options to suit a variety of demanding steel applications.27

The refractory brick market is a mature industry and there have not been any major

breakthroughs in steel production and processing or in the refractory and MCB markets.28 Refractory

products are frequently sold independently of other refractory brick for a ladle, or as part of a package

from a single vendor including all of the bricks necessary to line a ladle.29 Package orders, as opposed to

individual orders for MCB, are determined based on customer preferences.30

Most steel producing companies use several types of refractory brick to line their furnaces and

ladles. A variety of refractory products are used because rates of wear and replacement of the refractory

bricks vary significantly based on the type of steel being produced, individual furnaces used, and the

various performance requirements of the different areas of the steel furnaces or ladle.31 More specifically,

MCB is only used in the most demanding areas of the furnace or ladles which is principally along the slag

lines and at the top of the steel vessel where active chemical processes are taking place and

impurities and waste tend to aggregate. Other less costly products are used at the bottom and lower sides

of the furnace or ladles where slag conditions are less aggressive and will wear out at lower rates.32
 33 Conference transcript, p. 46 (Mazard).

I-8

MCB and the other refractory bricks are strategically placed in the ladle so that the overall wear on the

ladle is even and the ladle lining provides the lowest cost per ton of steel produced for refractories.33

An example of a refractory-lined ladle is shown in Figure I-1:

Figure I-1

Refractory-lined ladle

Source: Petitioners’ postconference brief, exh. 2, p. 1.
 34 The supply of seawater magnesium is virtually limitless, producing high-purity magnesium oxide. The largest

seawater facilities are located in Japan, Great Britain, the United States, and Israel. Landy, Richard A., “Magnesia

Refractories,” Refractories Handbook, ed. Schacht, Charles A. 2004, pp. 132–133.

 35 The raw material is crushed in jaw crushers, gyratory and cone crushers; intermediate pulverizers, such as cage

disintegrators and hammer mills; and fine grinding mills, such as rod mills and ball mills.

 36 Landy, Richard A., “Magnesia Refractories,” Refractories Handbook, ed. Schacht, Charles A. 2004, pp.

132–133.

I-9

Manufacturing Processes

The raw materials used to make magnesite for MCB are: (1) fired magnesia produced from

natural magnesium carbonate; (2) sea-water magnesium produced by firing magnesium hydroxide

extracted from sea water;34 or (3) brine magnesia produced from high-salt concentration from water deep

wells. These raw materials are sintered magnesia, while fused magnesia is produced by melting the

sintered magnesia.

After processing to produced sintered or fused magnesia, it is then crushed, ground, and

screened.35 It must be reduced to the appropriate size to satisfy the specific requirements of the brick

being produced. Magnesia that has been ground and screened is moved to holding bins or hoppers; each

bin or hopper is weighed and separated into batches that are specific to the brands and chemical

formulations of the different types of MCB.36 The basic production process is as shown in Figure I-2:

Figure I-2

MCB production process

Source: Petition, CVD Vol. I, p. 7.

Magnesia raw materials Graphite

Crushing

Size grading

Binder Mixing / kneading

Pressing

Curing

Inspection

Product

Finishing (metal casing, tarimpregnation, coating, 

coking, etc.)

Magnesia raw materials Graphite Additives

Crushing

Size grading

Binder Mixing / kneading

Pressing

Curing

Inspection

Product

Finishing (metal casing, tarimpregnation, coating, 

coking, etc.)

Additives
 37 The most common type is a muller mixer, a mixing bowl fitted with wheels that rotate while the mixer bowl

revolves or the rotating wheels revolve while the mixer bowl is stationary. This equipment produces a kneading

action to the materials in which the portion of the materials directly under the wheels is squeezed and pressed

producing a “de-airing” action. Another mixer type is one that has a bowl fitted with a high-intensity rotor, ribbon

blades, or screw. These mixers usually produce a uniform mix faster than the muller type, but the de-airing is not as

good. 

 38 A uniaxial press can apply force to a brick through a number of different methods. Pressure is applied in one

direction to achieve uniform density and a homogeneous micro-structure on a variety different presses. A

mechanical press uses a ram to compact the brick against a stationary mold, and it uses the compacted brick

thickness itself to control the final movement of the press without independent control of the compacting force. A

friction press uses a flywheel driven at a preset speed to drive a ram to compact the brick. A friction press uses the

energy contained in the flywheel to control the thickness of the brick without independent control of the brick

thickness. A hydraulic press uses pressure to force a ram against the brick. Brick thickness is controlled by a rigid

stop to control the travel of the ram. Carniglia, Stephen C. and Gordon L. Barna, Handbook of Industrial

Refractories Technology, Principles, Types, Properties and Applications, 1992, pp. 508-510 .

 39 The isostatic press can be used to produce difficult refractory geometries such as nozzles, shrouds, and

diffusers for certain BOF applications. In isostatic pressing a preformed body is hermetically wrapped in a flexible

metal foil or polymeric bag and placed in a vessel which is then filled with oil under pressure to form the complex

design.

 40 Carniglia, Stephen C. & Gordon L. Barna, Handbook of Industrial Refractories Technology, Principles, Types,

Properties and Applications, 1992, pp. 515-516 and e-mail from ***. 

 41 Conference transcript, p. 177 (B. Stein).

 42 Conference transcript, pp. 110–111 (B. Stein) and Petitioner’s postconference brief, exh. 1, pp. 12-13. 

 43 Conference transcript, p. 124 (Conrad).

 44 Conference transcript, pp. 110-111 (B. Stein).

 45 Conference transcript, p. 115 (B. Stein).

 46 Conference transcript, p. 124 (Conrad).

I-10

The magnesia is mixed with other materials, including pitch, binders, carbon, and other metallic

additives specific to the brick being made.37 When mixing is complete, the material is transported to a

press for forming into individual shaped bricks. MCBs are molded in a wide variety of sizes depending

on the specific application and the configuration of the furnace or ladle lining for which they are

designed. There are several methods of pressing and manufacturing facilities differ with regard to the type

of press used. Presses include the uniaxial press (such as a mechanical press, friction press, or a hydraulic

press)38 and the isostatic press.39 Once the bricks are pressed they are heated in batch or tunnel ovens to

set resin binds. Finally, the bricks are packaged for shipment.40

The shape and density of the MCB are major factors in determining resistance to degradation and

operational life of the brick.41 Density is determined, for the most part, by the type of press used in

production. Refractory producers in the United States, the European Union, and Mexico tend to use the

hydraulic press, while the friction press is more common among Chinese producers.42 The hydraulic

press uses the force of a hydraulic piston to press and de-air the mix in one stroke. Hydraulic presses are

a newer technology requiring fewer workers and are useful in the production of very large brick shapes.43

A friction press, presses the mix with frequent strokes in order to de-air the mix and results in a MCB of

higher density compared to the hydraulic press according to respondents at the staff conference.44 While

the disparity in density of the refractory brick produced from the two presses may differ by a few percent,

the difference in the brick’s resistance to wear and its operational life is more significant.45 Furthermore,

although a friction press requires more manpower than a hydraulic press, the respondents claim that

friction presses can change their brick molds more quickly and produce another size, shape, or quality

grade that the customer may require.46 
 47 Petitioner’s postconference brief, exh. 1, pp. 12–13.

 48 Petitioner’s postconference brief, p. 4.

 49 Conference transcript, p. 142 (Levinson) and (Mendoza), p. 143 (Thomas).

 50 Respondent RHI’s postconference brief, p. 3.

I-11

Petitioner disputes that the friction press makes a denser MCB than the hydraulic press and claim

that the hydraulic press has the capability and efficiency to make MCB that is just as dense. In this

regard, petitioner states:

“Petitioner also submits that there is absolutely no basis in fact or data to support

Respondents’ comments at the conference that a friction screw press can somehow make

a denser MCB than a hydraulic press. This urban legend was debated and put to bed at

least 25 years ago. Friction screw presses are less costly to install than the more

sophisticated and automated hydraulic presses. The friction screw press is generally

more labor intensive and typically does not have any automation, that is, the mold is

hand fed with the MCB mix and the friction pressing is controlled by an operator who, at

best guesses at the density of the MCB . The idea that one could somehow use lower

grade raw materials and press a denser MCB product on a friction press that could

compete with higher purity and quality raw materials used in MCB on a hydraulic press

is ludicrous. Hydraulic presses have the capability and the efficience to make just as

dense MCB as a friction screw press by utilizing multiple strokes in the press-pause

cycle of the pressing process. In general, hydraulic presses can make a higher quality

MCB than those made on friction presses.”47

DOMESTIC LIKE PRODUCT ISSUES

No issues with respect to domestic like product have been raised in these investigations. The

petitioner proposes that the domestic like product is co-extensive with the scope of the petition.48

Respondents agree with the petitioner’s definition of domestic like product for purposes of the

preliminary determination;49 however, the respondent RHI notes that other refractory brick may be

competitive with MCB.50

 1

 RMA factbook 2009, p. 3. (See petition, p. 21 and exh. 5).

 2

 Petition, p. 9.

II-1

PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

U.S. MARKET CHARACTERISTICS

Two of three responding U.S. producers and seven of 12 responding importers reported selling

MCB nationally. One responding U.S. producer (***) reported selling MCB to all regions except ***. 

The remaining responding five importers reported selling to various regions except for the Rocky

Mountains and the Northwest. Four importers reported selling to the Midwest and four importers

reporting selling to the Northeast. 

CHANNELS OF DISTRIBUTION

Almost all MCBs from all sources are sold directly to end users.1

 As shown in table II-1, in each

period, over 99 percent of shipments of U.S. product and over 90 percent of imports from China were

made to the end users. *** reported U.S. shipments of U.S. imports from Mexico and countries other

than China and Mexico were to end users. Petitioner indicates that all major domestic and foreign

producers, including Chinese producers, compete for critical large volume accounts in the steel industry

and approximately 75 percent of all MCB sold in the United States is sold to about 25 end users.2

SUPPLY AND DEMAND CONSIDERATIONS

Supply

U.S. Supply

Based on available information, U.S. MCB producers have the ability to respond to changes in

demand with large changes in the quantity of shipments of U.S.-produced MCB to the U.S. market. The

main contributing factors to the high degree of responsiveness of supply are the availability of unused

capacity, existence of alternate markets, and the ability to produce alternate products; supply

responsiveness is constrained by the somewhat limited ability to use inventories.

Industry capacity

U.S. producers’ capacity utilization decreased from 45.3 percent in 2006 to 43.8 percent in 2008. 

This level of capacity utilization indicates that U.S. producers have unused capacity with which they

could increase production of MCB in the event of a price change. 

Alternative markets

Exports by the U.S. producers, as a share of total shipments, decreased from *** percent in 2006

to *** percent in 2008. These data indicate that U.S. producers have the ability to divert shipments to or

from alternative markets in response to changes in the price of MCB. 
II-2

Table II-1

MCB: U.S. producers’ and importers’ U.S. shipments of MCB, by sources and channels of 

distribution, 2006-08, and January-June 2009

Item

Period

2006 2007 2008

Jan.-June

2009

 Share of reported shipments (percent)

Domestic producers’ U.S. shipments of MCB to:

 Distributors 0.8 0.6 0.4 0.2

 End users 99.2 99.4 99.6 99.8

U.S. importers’ U.S. shipments of MCB from China:

 Distributors 9.1 1.4 2.3 3.3

 End users 90.9 98.6 97.7 96.7

U.S. importers’ U.S. shipments of MCB from Mexico:

 Distributors *** *** *** ***

 End users *** *** *** ***

U.S. importers’ U.S. shipments of MCB from all other countries to: 

 Distributors *** *** *** ***

 End users *** *** *** ***

Note.–Data for domestic producers include only U.S. commercial shipments.

Source: Compiled from data submitted in response to Commission questionnaires.

Inventory levels

The ratio of end-of-period inventories to total shipments for the U.S. producers decreased from

12.3 percent in 2006 to 9.6 percent in 2008. These data indicate that U.S. producers have a somewhat

limited ability to use inventories as a means of increasing shipments of MCB to the U.S. market.

Production alternatives

*** of *** responding U.S. producers indicated that they produce products other than MCB on

the equipment and machinery that is used to produce MCB. Producers indicated that they can produce

products such as dolomite brick, alumina magnesia carbon brick, and fired brick. 
 3

 Six Chinese producers responded to the foreign producers’ questionnaire. Their exports the U.S. represented 69

percent of total reported U.S. imports from China in 2008.

 4

 One Mexican producer responded to the foreign producers’ questionnaire. Its exports the U.S. represented ***

reported U.S. imports from Mexico in 2008.

II-3

Subject Imports from China

Based on available information, Chinese producers have the ability to respond to changes in

demand with large changes in the quantity of shipments of MCB to the U.S. market.3

 The main

contributing factors to the high degree of responsiveness of supply are the availability of unused capacity,

the existence of alternate markets, and the ability to produce alternate products; supply responsiveness is

constrained by the somewhat limited ability to use inventories. 

Industry capacity

Chinese producers’ capacity utilization decreased from 79.6 percent in 2006 to 62.9 percent in

2008. This level of capacity utilization indicates that Chinese producers have unused capacity with which

they could increase production of MCB in the event of a price change. 

Alternative markets

Shipments of MCB from China to markets other than the United States (both exports to

alternative markets and shipments to their home market) decreased from approximately 90.5 percent of

total shipments in 2006 to 88.5 percent in 2008. Thus, available data indicate that subject producers in

China have the ability to divert shipments to or from their home market and alternative markets in

response to changes in the price of MCB. 

Inventory levels

The ratio of end-of-period inventories to total shipments for the Chinese producers increased

from 5.2 percent in 2006 to 6.6 percent in 2008. These data indicate that Chinese producers have a

somewhat limited ability to use inventories as a means of increasing shipments of MCB to the U.S.

market.

Production alternatives

Six of seven responding Chinese producers indicated that they produce products other than MCB

on the equipment and machinery that is used to produce MCB. These producers indicated that they can

produce products such as alumina silicate carbon bricks and alumina magnesia carbon brick. 

Subject Imports from Mexico

Based on available information, the Mexican producer has the ability to respond to changes in

demand with large changes in the quantity of shipments of MCB to the U.S. market.4

 The main

contributing factors to the high degree of responsiveness of supply are the availability of unused capacity

and the existence of alternate markets or inventories; supply responsiveness is constrained by an inability

to produce alternate products. 
 5 See Part I and conference transcript, p. 13 (Brown).

II-4

Industry capacity

The Mexican producer’s capacity utilization increased from *** percent in 2006 to *** percent in

2008. This level of capacity utilization indicates that the Mexican producer has unused capacity with

which it could increase production of MCB in the event of a price change. 

Alternative markets

Shipments of MCB from Mexico to markets other than the United States (both exports to

alternative markets and shipments to the home market) increased from approximately *** percent of total

shipments in 2006 to *** percent in 2008. Thus, available data indicate that the Mexican producer has

the ability to divert shipments to or from its home market and alternative markets in response to changes

in the price of MCB. 

Inventory levels

The ratio of end-of-period inventories to total shipments for the Mexican producer increased from

*** percent in 2006 to *** percent in 2008. These data indicate that the Mexican producer has an ability

to use inventories as a means of increasing shipments of MCB to the U.S. market.

Production alternatives

The Mexican producer indicated that it *** products other than MCB on the equipment and

machinery that is used to produce MCB. 

Demand

Based on available information, it is likely that any change in the price level of MCB will result

in a small change in the quantity of MCB demanded. The main contributing factors are the lack of

substitute products and the small cost share of MCB in its end-use products.

Demand Characteristics

As described in more detail in Part I, MCB is used by steel producers for lining electric arc

furnaces, basic oxygen furnaces, steel transfer ladles, and steel processing ladles.5

 Thus, demand for

MCB depends upon steel production. 

Demand for MCB increased from 2006 to late 2008 and then decreased during late 2008 and

early 2009. As seen in figure II-1, raw steel production fluctuated between January 2006 and August

2008, increasing overall by 7 percent and then decreasing by 50 percent between August 2008 and June

2009. Steel production from blast furnaces decreased by 62 percent between August 2008 and June 2009,

while steel production from electric arc furnaces decreased by 40 percent during the same time period. 

Similarly, as seen in figure II-2, the monthly index of raw steel production fluctuated between January

2006 and August 2008, increasing overall by 3 percent and then decreasing by 48 percent between

August 2008 and June 2009. By comparison, available data indicate that total apparent U.S. consumption

of MCBs increased by 9 percent between 2006 and 2008 and decreased by 46 percent between interim

2008 and interim 2009.
II-5

Figure II-1

Pig iron and raw steel production, by month, January 2006 to June 2009

Source: American Iron and Steel Institute.

Figure II-2

Indices of raw steel production, by month, January 2006 to June 2009

Source: Federal Reserve.
 6

 Conference transcript, p. 77 (Brown).

 7

 Conference transcript, pp. 169-171 (Conrad), p. 171 (B. Stein).

 8

 Also, see conference transcript, p. 75 (Brown), p. 76 (McGrath), and p. 169 (Thomas).

 9

 Conference transcript, pp. 66-67 (Brown).

 10 Conference transcript, p. 67 (Brown).

 11 Ibid.

II-6

 Two of three responding U.S. producers and four of 11 responding importers indicated that

demand for MCB in the United States has decreased since 2006 and five of eleven importers indicated

that demand either had fluctuated or not changed during that period. The remaining responding U.S.

producer and two remaining responding importers indicated that demand had increased since 2006. 

Substitute Products

Two of three responding producers and nine of 13 responding importers indicated that there are

no substitutes for MCB. The remaining U.S. producer and importers indicated that products such as

dolomite brick, burned magnesite bricks, magnesia chrome brick, magnesium chrome, and alumina

magnesia carbon brick may be used as substitutes, although both responding producers and all seven

responding importers indicated that changes in the prices of these substitutes do not affect the price for

MCB. Petitioner indicates that while conceptually there is substitutability between MCB and some of

these products, none of these products provide the performance, the cost effectiveness, the safety, the

reliability, or the consistency of MCB.6

 Two importers indicated that while MCB is often the best

product to use, for some applications alternative products can be used as substitutes.7

Cost Share

MCB generally makes up a small share of the final cost of steel products that it is used to

produce. Responding producers and importers indicated that value of MCB as a share of the cost of steel

production is 2 percent or less.8

SUBSTITUTABILITY ISSUES

The degree of substitution between domestic and imported MCB depends upon such factors as

relative prices, quality (e.g., grade standards, reliability of supply, defect rates, etc.), and conditions of

sale (e.g., price discounts/rebates, lead times between order and delivery dates, payment terms, product

services, etc.). Based on available data, staff believes that there is a high degree of substitutability

between domestically produced MCB and MCB imported from China and Mexico.

Factors Affecting Purchasing Decisions

Petitioner indicated that price is an important, and many times the only, factor that customers

consider when making their purchasing decisions. Petitioner also stated that although it attempts to

differentiate its products by providing augmented services such as being with the customer every day in

its shop and understanding what its goals and expectations are in the current environment, price is

becoming more and more the only differentiating factor.9

 Petitioner reported that “value buyers” for

which price is not the deciding factor make up less than 30 percent of the market.10 Petitioner stated that

these customers tend to have longer vision and want a domestic MCB industry, but that this type of

customer is becoming increasingly rare because the steel industry is presently under terrible pressure.11

Respondents indicated that while price is important to their customers, their customers are more
 12 Conference transcript, p. 157 (B. Stein and Conrad).

 13 Petitioner’s postconference brief, pp. 14-15.

II-7

concerned with finding suppliers who bring new ideas and new abilities through technology and service

to lower their costs of producing steel.12

Comparison of U.S.-Produced and Imported MCB

In order to determine whether U.S.-produced MCB can generally be used in the same applications

as imports from China and Mexico, and U.S. producers and U.S. importers were asked whether the

products can “always,” “frequently,” “sometimes,” or “never” be used interchangeably. As shown from

table II-2, two of three responding producers and at least one half of responding importers indicated that

MCB produced in the United States and imported from China and Mexico are “always” used

interchangeably and all responding producers and at least 70 percent of responding importers reported

that they are at least “frequently” used interchangeably. One importer (***) stated that every supplier has

special product formulations for different applications and that raw material from every magnesite mine is

different. Another importer (***) reported that the MCB from its Chinese producer out-performed other

Chinese-produced MCB and that no U.S. MCB has been accepted by its customer. Another importer

(***) indicated that MCB produced in different countries can be using different grades of raw material

can affect the chemistry and result with problems in service. All responding producers and at least twothirds of importers reported that MCB produced in the United States and imported from nonsubject

countries are “always” used interchangeably; the same is true for imports from China, Brazil, and Mexico

compared to imports from other countries. 

As indicated in table II-3, two of three responding U.S. producers and at least one-half of

responding importers indicated that differences other than price between MCB produced in the United

States and imported from China and Mexico were at most “sometimes” a significant factor in their sales. 

Petitioner stated that all countries produce MCB to the same standards and grades and that the limited

range of forms that petitioner imports from China is for commodity products.13
II-8

Table II-2

MCB: Perceived interchangeability between MCB produced in the United States and in other

countries, by country pairs

Country pair

Number of U.S. producers

reporting

Number of U.S. importers

reporting

AFSNAFSN

U.S. vs. subject countries:

 U.S. vs. China 2 1 0 0 5 2 3 0

 U.S. vs. Mexico 2 1 0 0 5 1 1 0

U.S. vs. nonsubject countries:

 U.S. vs. Brazil 2 0 0 0 4 1 1 0

 U.S. vs. Other nonsubject 20005110

Subject country comparisons:

 China vs. Mexico 2 1 0 0 5 1 1 0

Nonsubject country comparisons:

 China vs. Brazil 2 0 0 0 4 1 1 0

 China vs. Other nonsubject 20005110

 Mexico vs. Brazil 2 0 0 0 4 1 1 0

 Mexico vs. Other nonsubject 20005110

 Brazil vs. Other nonsubject 20004110

Note.--A = Always, F = Frequently, S = Sometimes, N = Never.

Source: Compiled from data submitted in response to Commission questionnaires.
II-9

Table II-3

MCB: Perceived differences other than price between MCB produced in the United States and in

other countries, by country pairs

Country pair

Number of U.S. producers

reporting

Number of U.S. importers

reporting

AF S N A F S N

U.S. vs. subject countries:

 U.S. vs. China 0 1 1 1 5 0 3 2

 U.S. vs. Mexico 0 1 1 1 3 0 2 2

U.S. vs. nonsubject countries:

 U.S. vs. Brazil 0 0 1 1 2 0 2 2

 U.S. vs. Other nonsubject 0 0 112122

Subject country comparisons:

 China vs. Mexico 0 0 0 2 2 0 2 2

Nonsubject country comparisons:

 China vs. Brazil 0 0 0 2 1 0 2 2

 China vs. Other nonsubject 0 0 022022

 Mexico vs. Brazil 0 0 0 2 1 0 2 2

 Mexico vs. Other nonsubject 0 0 022022

 Brazil vs. Other nonsubject 0 0 021022

Note.--A = Always, F = Frequently, S = Sometimes, N = Never.

Source: Compiled from data submitted in response to Commission questionnaires.

 1

 ***. 

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 margins of dumping and countervailing duties

was presented earlier in this report and information on the volume and pricing of imports of the subject

merchandise is presented in Parts IV and V. Information on the other factors specified is presented in this

section and/or Part VI and (except as noted) is based on the questionnaire responses of three firms that

accounted for *** percent of U.S. production of MCB during 2008.

U.S. PRODUCERS

The Commission sent producer questionnaires to four firms identified as U.S. producers of MCB

by the petitioners. Three firms submitted questionnaire responses.1

 Presented in table III-1 is a list of

current domestic producers of MCB and each company’s position on the petition, production location(s),

related and/or affiliated firms, and share of reported production of MCB in 2008. Three firms, ANH,

LWB, and Resco, accounted for *** percent of reported 2008 domestic production of MCB. 

Two U.S. producers are related to foreign producers of the subject merchandise and two are

related to U.S. importers of the subject merchandise. In addition, as discussed in greater detail below, two

U.S. producers directly import the ***.

Table III-1

MCB: U.S. producers, positions on the petition, U.S. production locations, related and/or affiliated

firms, and shares of 2008 reported U.S. production

Firm

Position

on

petition

U.S.

production

location(s) Related and/or affiliated firms

Share of

production

(percent)

ANH Support White Cloud, MI *** ***

LWB Support York, PA *** ***

TYK Support Clairton, PA *** ***

Resco Petitioner Hammond, IN *** ***

Note.–Because of rounding, shares may not total to 100.0 percent.

Source: Compiled from data submitted in response to Commission questionnaires.
 2

 ***.

 3

 ***.

 4

 ***.

III-2

U.S. CAPACITY, PRODUCTION, AND CAPACITY UTILIZATION

U.S. producers’ capacity, production, and capacity utilization data for MCB are presented in table

III-2. These data show capacity to produce MCB remained steady from 2006 to 2008 and between the

interim periods January-June 2008 and January-June 2009. Production of MCB decreased by 3.4 percent

from 2006 to 2008 and further decreased by 57.1 percent between the interim periods. Capacity

utilization decreased by 1.5 percentage points from 2006 to 2008, and further decreased by 28.9

percentage points between the interim periods.2

Table III-2

MCB: U.S. capacity, production, and capacity utilization, 2006-08, January-June 2008, and

January-June 2009

Item

Calendar year January-June--

2006 2007 2008 2008 2009

Capacity (short tons) 160,903 160,903 160,903 80,451 80,451

Production (short tons) 72,895 71,125 70,441 40,633 17,412

Capacity utilization (percent) 45.3 44.2 43.8 50.5 21.6

Source: Compiled from data submitted in response to Commission questionnaires.

U.S. producers were asked if they had experienced any plant openings, relocations, expansions,

acquisitions, consolidations, closures, or prolonged shutdowns because of strikes or equipment failure;

curtailment of production because of shortages of materials; or any other change in the character of their

operations or organization relating to the production of MCB since January 1, 2006. *** did not report

any such changes.3

 *** reported the following:

* * * * * * *4

*** reported the production of other products on the same equipment and machinery and using

the same production and related workers employed in the production of MCB. ***. 

U.S. PRODUCERS’ SHIPMENTS

Data on domestic producers’ shipments of MCB are presented in table III-3. U.S. shipments

accounted for *** percent of U.S. producers’ total shipments of MCB in 2008, and *** percent in interim

2009. There was no reported internal consumption. Transfers to related firms accounted for *** percent

of U.S. producers’ total shipments of MCB in both 2008 and interim 2009. U.S. shipments increased by

5.6 percent from 2006 to 2008, and decreased by 53.6 percent between the interim periods. The unit

value of U.S. shipments increased by 17.1 percent from 2006 to 2008, and by 11.0 percent in the interim

periods. Exports of MCB were reported by ***. These exports decreased by *** percent from 2006 to

2008, and decreased by *** percent between the interim periods. Exports accounted for *** percent of

U.S. producers’ total shipments during 2008, and *** percent in interim 2009. The export markets listed

included ***. 
III-3

Table III-3

MCB: U.S. producers’ shipments, by types, 2006-08, January-June 2008, and January-June 2009

Item

Calendar year January-June--

2006 2007 2008 2008 2009

Quantity (short tons)

Commercial shipments *** *** *** *** ***

Transfers to related firms *** *** *** *** ***

U.S. shipments 59,180 58,074 62,470 35,111 16,284

Export shipments *** *** *** *** ***

Total shipments *** *** *** *** ***

Value (1,000 dollars)

Commercial shipments *** *** *** *** ***

Transfers to related firms *** *** *** *** ***

U.S. shipments 61,937 62,549 76,558 41,284 21,251

Export shipments *** *** *** *** ***

Total shipments *** *** *** *** ***

Unit value (per short ton)

Commercial shipments $*** $*** $*** $*** $***

Transfers to related firms *** *** *** *** ***

U.S. shipments 1,047 1,077 1,226 1,176 1,305

Export shipments *** *** *** *** ***

Total shipments *** *** *** *** ***

Share of quantity (percent)

Commercial shipments *** *** *** *** ***

Transfers to related firms *** *** *** *** ***

U.S. shipments *** *** *** *** ***

Export shipments *** *** *** *** ***

Total shipments 100.0 100.0 100.0 100.0 100.0

 1 Not applicable.

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.
 5

 Resco reported it currently has about 30 days of inventory and that half of its shipments come out of stock and

half of them are made to order. Conference transcript, pp. 59-60 (Brown).

 6

 ***. 

 7

 There were no reported purchases of MCB made by U.S. producers of MCB.

III-4

U.S. PRODUCERS’ INVENTORIES

Data collected in these investigations on domestic producers’ end-of-period inventories of MCB

are presented in table III-4. Domestic producers’ inventories decreased by 21.9 percent from 2006 to

2008, and decreased by 20.8 percent in interim 2009 compared with interim 2008.5

 U.S. producers’

inventories were equivalent to between *** and *** percent of U.S. producers’ total shipments during

2006 to June 2009. *** accounted for *** percent of the inventories held at the end of June 2009.6

Table III-4

MCB: U.S. producers’ end-of-period inventories, 2006-08, January-June 2008, and January-June

2009

Item

Calendar year January-June--

2006 2007 2008 2008 2009

Inventories (short tons) 8,754 7,528 6,838 7,865 6,231

Ratio to production (percent) 12.0 10.6 9.7 9.7 17.9

Ratio to U.S. shipments (percent) 14.8 13.0 10.9 11.2 19.1

Ratio to total shipments (percent) *** *** *** *** ***

Note.–Partial-year ratios are based on annualized production and shipments.

Source: Compiled from data submitted in response to Commission questionnaires.

U.S. PRODUCERS’ IMPORTS AND PURCHASES

Two of the four U.S. producers, ***, reported that they directly imported MCB from *** during

the period of review. U.S. producers’ imports of MCB are presented in table III-5.7

Table III-5

MCB: U.S. producers’ imports, 2006-08, January-June 2008, and January-June 2009

* * * * * * *
 8

 Resco reported that in addition to employee layoffs, its top four executives attending the conference have taken

a 65 percent compensation reduction since the middle of 2008. Conference transcript, p. 18 (Brown). 

III-5

U.S. EMPLOYMENT, WAGES, AND PRODUCTIVITY

U.S. producers’ aggregate employment data for MCB are presented in table III-6. In the

aggregate, U.S. MCB producers reported a decrease in the number of production and related workers

employed in the manufacture of MCB from 2006 to 2008, and in interim 2009 compared with interim

2008. *** accounted for the major share of the decrease in number of employees from 2006 to 2008, and

*** accounted for the majority of the decrease in interim 2009.8

 Productivity fell in 2007 and then rose in

2008 for an overall decrease of 3.8 percent, and decreased by 33.0 percent in interim 2009 compared with

interim 2008. 

Table III-6

MCB: U.S. producers’ employment-related data, 2006-08, January-June 2008, and January-June

2009

Item

Calendar year January-June--

2006 2007 2008 2008 2009

Production and related workers (PRWs) 109 110 102 110 78

Hours worked by PRWs (1,000 hours) 226 239 227 122 78

Wages paid to PRWs (1,000 dollars) 6,081 6,441 6,420 3,460 2,095

Hourly wages $26.91 $26.95 $28.28 $28.36 $26.86

Productivity 

 (short tons produced per 1,000 hours) 322.5 297.6 310.3 333.1 223.2

Unit labor costs (per short ton) $83.42 $90.56 $91.14 $85.15 $120.32

Source: Compiled from data submitted in response to Commission questionnaires.

 1

 The Commission sent questionnaires to those firms identified in the petition, along with firms that, based on a

review of data provided by U.S. Customs and Border Protection (“Customs”), may have imported at least 100,000

kilograms or greater than one percent of total imports under HTS subheading 6902.10.10 in any one year since 2006.

 2

 The Commission received an unusable questionnaire response from the firm ***, a customs broker. ***. The

Commission received a questionnaire response from ***, which reported imports of “taphole sleeves,” which are

excluded from the scope, therefore this questionnaire response was not used. The Commission received

questionnaire responses from 15 firms that reported that they did not import MCB during the period examined. 

Those firms are: ***. 

 3

 Coverage for Chinese imports is derived from Petitioner’s estimate of total imports of MCB. Petition, exh. 3.

 4

 ***. 

 5

 Only two firms reported imports from sources other than China and Mexico, ***.

 6

 MCB is classifiable in the Harmonized Tariff Schedule of the United States (“HTS”) under subheadings

6815.91.00, 6815.99.00, 6902.10.10, and 6902.10.50. These HTS subheadings are residual or “basket” subheadings

covering MCB and other products. 

 Chinese respondents report that the importer questionnaires received by the Commission provide good

coverage and appear to account for all of the known major U.S. importers of subject imports, but do not have good

coverage of nonsubject imports. Vesuvius and Yangkou Bayuquan’s postconference brief, pp. 8, 10-11. 

Respondent RHI reports that the data for U.S. producers is reasonably complete, but that imports of subject and

nonsubject MCB are understated. Respondent RHI’s postconference brief, p. 12, fn. 34. Petitioner also reports that

questionnaire responses understate the volume of U.S. imports, but argues that the data received renders the

methodological problem moot because the volume shows imports to be significant. Petitioner’s postconference

brief, pp.17-18.

 Commission staff believes that coverage for subject and nonsubject imports, while understated, is good. ***.

 7

 The remainder comes from ***. 

IV-1

PART IV: U.S. IMPORTS, APPARENT CONSUMPTION, AND

MARKET SHARES

U.S. IMPORTERS

Importer questionnaires were sent to 46 firms believed to be importers of subject MCB, as well as

to all U.S. producers of MCB.1

 Usable questionnaire responses were received from 16 companies,2

representing 80 percent of total imports from China and approximately 100 percent of total imports from

Mexico.3

 Table IV-1 lists all responding U.S. importers of MCB from China, Mexico, and other sources,

their locations, and their shares of U.S. imports in 2008. In 2008, the largest importer of MCB from

China was ***, the largest importer of MCB from Mexico was ***,4

 and the only importer of MCB from

other sources was ***.5

U.S. IMPORTS

U.S. imports are based on questionnaire responses.6

 Table IV-2 presents data for U.S. imports of

MCB from China, Mexico, and all other sources. China is the largest foreign supplier of MCB to the

United States, accounting for *** percent of the quantity of total imports in 2008, and *** percent of the

value. Mexico is the second-largest foreign supplier of MCB to the United States, accounting for ***

percent of the quantity of total imports in 2008 and *** percent of the value.7

From 2006 to 2008, the quantity and value of imports of MCB from China increased by 11.0

percent and 38.0 percent, respectively, then decreased by 59.4 percent and 56.3 percent, respectively, in

interim 2009 compared with interim 2008. The unit value of imports of MCB from China increased by

24.4 percent from 2006 to 2008, and increased by 7.5 percent in interim 2009 compared with interim

2008. From 2006 to 2008, the quantity and value of imports of MCB from Mexico decreased by *** 
IV-2

Table IV-1

MCB: U.S. importers, source(s) of imports, U.S. headquarters, and shares of imports in 2008

Firm Headquarters Source of

imports

Share of 2008 imports (percent)

China Mexico Other Total

ANH Moon Township, PA *** *** *** *** ***

Anker Turtle Creek, PA *** *** *** *** ***

Fedmet East Amherst, NY *** *** *** *** ***

Imacro Burlington, Ontario *** *** *** *** ***

Mayerton Chicago, IL *** *** *** *** ***

McKeown Round Rock, TX *** *** *** *** ***

Orind Trafford, PA *** *** *** *** ***

Resco Pittsburgh, PA *** *** *** *** ***

RCL Clifton, NH *** *** *** *** ***

S&S Intersource Mars, PA *** *** *** *** ***

Starex Lincolnshire, IL *** *** *** *** ***

United Warren, OH *** *** *** *** ***

Vesuvius Pittsburgh, PA *** *** *** *** ***

Veitsch-Radex Burlington, Ontario *** *** *** *** ***

Wonjin Europe Velsen-Noord, 

the Netherlands *** *** *** *** ***

Worldwide Tarentum, PA *** *** *** *** ***

Total 100.0 100.0 100.0 100.0

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.

percent and *** percent, respectively, then increased by *** percent and *** percent in interim 2009

compared with interim 2008. The unit value of imports of MCB from Mexico increased by *** percent

from 2006 to 2008, and increased by *** percent in interim 2009 compared with interim 2008. The

quantity and value of imports from other countries decreased by *** percent and by *** percent,

respectively, from 2006 to 2008, and increased by *** percent and *** percent in interim 2009 compared

with interim 2008. The unit value of imports of MCB from other sources increased by *** percent from

2006 to 2008, and increased by *** percent in interim 2009 compared with interim 2008. 
IV-3

Table IV-2

MCB: 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 (short tons)

China 40,441 38,337 44,891 26,780 10,879

Mexico *** *** *** *** ***

 Subtotal *** *** *** *** ***

Nonsubject *** *** *** *** ***

Total *** *** *** *** ***

Value (1,000 dollars)

1

China 26,546 26,939 36,643 20,642 9,014

Mexico *** *** *** *** ***

 Subtotal *** *** *** *** ***

Nonsubject *** *** *** *** ***

Total *** *** *** *** ***

Unit value (per short ton)

1

China $656 $703 $816 $771 $829

Mexico *** *** *** *** ***

 Subtotal *** *** *** *** ***

Nonsubject *** *** *** *** ***

Average *** *** *** *** ***

Share of quantity (percent)

China *** *** *** *** ***

Mexico *** *** *** *** ***

 Subtotal *** *** *** *** ***

Nonsubject *** *** *** *** ***

Total *** *** *** *** ***

Share of value (percent)

China *** *** *** *** ***

Mexico *** *** *** *** ***

 Subtotal *** *** *** *** ***

Nonsubject *** *** *** *** ***

Total *** *** *** *** ***

1

 Landed, U.S. port of entry, duty-paid. 

Source: Compiled from data submitted in response to Commission questionnaires.
 8

 Petitioner’s postconference brief, p. 14.

 9

 Petitioner’s postconference brief, p. 15.

 10 Table II-1.

 11 Petitioner’s postconference brief, p. 16.

 12 Respondents Vesuvius’ and Yingkou Bayuquan’s postconference brief, p. 28, fn. 93.

 13 Respondent RHI’s postconference brief, p. 7.

 14 Ibid., p. 8.

 15 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)).

IV-4

CUMULATION CONSIDERATIONS

In assessing whether subject imports are likely to compete with each other and with the domestic 

like product with respect to cumulation, the Commission generally has considered the following four

factors: (1) the degree of fungibility, including specific customer requirements and other quality-related

questions; (2) presence of sales or offers to sell in the same geographic markets; (3) common channels of

distribution; and (4) simultaneous presence in the market. Channels of distribution and fungibility

(interchangeability) are discussed in Part II of this report.

Petitioner has argued that U.S. imports of MCB from China and Mexico should be cumulated. It

reports that substitutability between domestic and subject imports is high and that imports from China and

Mexico are interchangeable.8

 The Petitioner argues that the geographic market for the Chinese product is

national, and acknowledges that imports from Mexico enter largely through the Southwestern and

Southeastern regions of the United States, but that ***.9

 Chinese, Mexican, and U.S. producers of MCB

sell the majority of their product to end users.10 The petitioner also argues that imported MCB was

present in the U.S. market simultaneously with U.S.-produced MCB.11

 Chinese respondents have argued that decumulation is not warranted based upon the current

record and recommend that the Commission conduct its threat analysis on a cumulated basis.12 However,

the Chinese respondents conclude that the threat analysis does not change for China regardless of whether

the data are viewed cumulatively or on a decumulated basis. Mexican respondents have argued that there

is insignificant overlap between imports of MCB from Mexico and China, because the Mexican MCB is

sold in different geographic markets and in insignificant quantities. Imports of Mexican MCB are

transported overland to the Southeastern and Southwestern states and a few lower Midwestern states,

whereas imports of MCB from China travel by ocean vessel to ports along both the east and west coasts

and the north central region of the country.13 However, Mexican respondents conclude that the outcome

is the same whether imports from China and Mexico are cumulated or decumulated.14

NEGLIGIBILITY

The statute requires that an investigation be terminated without an injury determination if imports

of the subject merchandise are found to be negligible.15 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
 16 Section 771(24) of the Act (19 U.S.C. § 1677(24)).

 17 Conference transcript, p. 13 (Brown) and p. 119 (J.Stein).

 18 Petitioner’s postconference brief, p. 9.

 19 Respondent Vesuvius’ and Yingkou Bayuquan’s postconference brief, p. 6. Respondent RHI’s postconference

brief, p. 10.

IV-5

from such countries are deemed not to be negligible.16 Imports from China accounted for *** percent of

total imports of MCB by quantity during July 2008 - June 2009. Imports from Mexico accounted for ***

percent of total imports of MCB by quantity during July 2008 - June 2009.

APPARENT U.S. CONSUMPTION

Data concerning apparent U.S. consumption of MCB during the period of investigation shown in

table IV-3 and figure IV-1 are based on questionnaire responses. The quantity of apparent U.S.

consumption increased by *** percent from 2006 to 2008, and then decreased by *** percent in interim

2009 compared with interim 2008. The steel industry is the sole end-use market for MCB, where they are

used for the linings of ladles, electric arc furnaces, and basic oxygen furnaces.17 The strong demand for

MCB stopped around the fourth quarter of 2008 with the onset of the recession and the steep decline in

U.S. steel production.18 Steel production declined by 50 percent in the first half of 2009 compared with

the same period in 2008.19

U.S. MARKET SHARES

U.S. market share data are presented in table IV-4. The quantity of the U.S. producers’ market

share decreased by *** percentage points from 2006 to 2008 and by was *** percentage points lower in

interim 2009 compared with interim 2008. In contrast, the share of subject imports from China increased

from *** percent in 2006 to *** percent in 2008, on the basis of quantity, and increased from *** percent

in interim 2008 to *** percent in interim 2009. The share of subject imports from Mexico decreased

from *** percent in 2006 to *** percent in 2008, then increased from *** percent in interim 2008 to ***

percent in interim 2009. Nonsubject imports’ market share decreased from *** percent in 2006 to ***

percent in 2008, and decreased to less than *** percent in interim 2009 compared with *** percent in

interim 2008.
IV-6

Table IV-3

MCB: 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

Item

Calendar year January-June

2006 2007 2008 2008 2009

Quantity (short tons)

U.S. producers’ U.S. shipments 59,180 58,074 62,470 35,111 16,284

U.S. shipments of imports from–

China 32,976 36,184 42,072 26,899 15,682

Mexico *** *** *** *** ***

 Subtotal *** *** *** *** ***

Nonsubject countries *** *** *** *** ***

Total U.S. import shipments *** *** *** *** ***

Apparent U.S. consumption *** *** *** *** ***

Value (1,000 dollars)

U.S. producers’ U.S. shipments 61,937 62,549 76,558 41,284 21,251

U.S. shipments of imports from--

China 25,460 30,057 37,905 23,323 15,329

Mexico *** *** *** *** ***

 Subtotal *** *** *** *** ***

Nonsubject countries *** *** *** *** ***

Total U.S. import shipments *** *** *** *** ***

Apparent U.S. consumption *** *** *** *** ***

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.

Figure IV-1

MCB: Apparent U.S. consumption, by sources, 2006-08, January-June 2008, and January-June

2009

* * * * * * *

Table IV-4

MCB: U.S. consumption and market shares, 2006-08, January-June 2008, and January-June 2009

* * * * * * *
IV-7

RATIO OF IMPORTS TO U.S. PRODUCTION

Information concerning the ratio of imports to U.S. production of MCB is presented in table IV-5. 

Imports from China were equivalent to 55.5 percent of U.S. production during 2006, decreased to 53.9

percent during 2007, then increased to 63.7 percent in 2008, and were 62.5 percent in interim 2009

compared with 65.9 percent in interim 2008. Imports from Mexico were equivalent to *** percent of

U.S. production during 2006, decreased to *** percent during 2007, then increased to *** percent in

2008, and were *** percent in interim 2009 compared with *** percent in interim 2008 .

Table IV-5

MCB: U.S. production, U.S. imports, and ratios of imports to U.S. production, 2006-08, JanuaryJune 2008, and January-June 2009

Item

Calendar year January-June

2006 2007 2008 2008 2009

Quantity (short tons)

U.S. production 72,895 71,125 70,441 40,633 17,412

Imports from:

China 40,441 38,337 44,891 26,780 10,879

Mexico *** *** *** *** ***

 Subtotal *** *** *** *** ***

Nonsubject countries *** *** *** *** ***

Total imports *** *** *** *** ***

Ratio of U.S. imports to production (percent)

Imports from:

China 55.5 53.9 63.7 65.9 62.5

Mexico *** *** *** *** ***

 Subtotal *** *** *** *** ***

Nonsubject countries *** *** *** *** ***

Total imports *** *** *** *** ***

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.

 1

 Petitioner’s postconference brief, pp. 5-6 and exh. 12.

 2

 Staff telephone interview with ***, September 2, 2009.

 3

 Ibid.

 4

 Industry Study 2309: Refractories, The Freedonia Group, Inc. (February 2008), pp. 25-26 and table II-4,

attached in Exhibit S-4 of Petitioner’s Responses to Questions Regarding Additional Subsidy Allegations, August 7,

2009.

V-1

PART V: PRICING AND RELATED INFORMATION

FACTORS AFFECTING PRICES

Raw Material Costs

Raw material costs accounted for approximately 74 percent of the total cost of goods sold for

U.S. producers during 2006 to 2008. Per unit raw material costs fell by 2 percent between 2006 and 2007

and then increased by 26 percent between 2007 and 2008 and by 9 percent in interim 2009 compared to

interim 2008. Magnesia is the main raw material used to produce MCB. Petitioner indicates that it

purchases *** used in the production of MCB. Petitioner’s prices for ***.1

 ***.2 ***.3 In February

2008, the Freedonia Group projected that the price of refractories made of magnesite and chrome would

increase by 18 percent between 2006 and 2011 and by 15 percent between 2011 and 2016.4

U.S. Inland Transportation Costs

Transportation costs for U.S. inland shipments of MCB generally account for a small-to-moderate

share of the delivered price of these products. U.S. producers reported that the costs ranged from 4 to 7

percent of the delivered price for MCB, while U.S. importers reported that the costs ranged from 2 to 14

percent of the delivered price for MCB.

PRICING PRACTICES

Pricing Methods

All producers reported using transaction-by-transaction negotiations for some of their sales of

MCB, with one producer (***) reporting using a price list and another, (***,) reporting using contracts. 

Most importers reported that the prices that they charge for their sales are determined using transactionby-transaction negotiations, although a few reported using contracts and price lists. The remaining

responding producers and importers make their sales on both f.o.b. and delivered bases. Both responding

producers and four of 12 importers reported that at least 50 percent of their sales of MCB were from

inventory. Seven of 12 responding importers reported that at least 95 percent of their sales are made to

order.

One of two responding producers and seven of 14 responding importers reported making at least

69 percent of their sales on a short-term contract basis, with these contracts lasting from three months to

one year. Four of 14 responding importers reported making at least 75 percent of their sales on a spot

basis. One producer, (***,) and two importers, (***,) reported making about one-half of their sales on a

long-term contract basis, with ***’s contracts lasting two to three years and ***’s contracts lasting 6

months to one year.
V-2

Lead Times

U.S. producers reported lead times from inventory ranging from one to three days and lead times

for sales of product-to-order of one to eight weeks. Lead times for delivery for all but one responding

U.S. importer ranged from one day to one week on sales from inventory and most importers reported lead

times on sales of product produced-to-order ranging from 8 to 14 weeks. All but one responding

producer and all responding importers reported that they generally arrange for the transportation to their

customers’ locations. Both responding U.S. producers and five of 14 responding importers reported

making at least 60 percent of their sales within 101 to 1,000 miles of their storage or production facilities. 

Three of 14 responding importers reported making all of their sales over 1,000 miles from their storage or

production facilities and five of 14 responding importers reported making at least 60 percent of their sales

within 1,000 miles of their storage or production facilities.

 

Sales Terms and Discounts

One of three responding producers and 8 of 14 responding importers indicated that they do not

offer discounts for their sales of MCB. The other remaining producers and importers reported the use of

quantity discounts, annual volume discounts, or providing discounts on a case-by-case basis. Two of

three reporting producers and two of 12 importers reported making all of their sales of MCB on an f.o.b

basis. Seven of 12 responding importers reported using a delivered basis for at least most of their

shipments. 

PRICE DATA

The Commission requested U.S. producers and importers of MCB to provide quarterly data for

the total quantity and f.o.b. value of MCB that was shipped to unrelated customers in the U.S. market

during January 2006-June 2009. The products for which pricing data were requested are as follows:

Product 1.--Resin bonded, magnesia-carbon brick for electric arc furnaces with a carbon content

of 13 percent, fused grain and antioxidant additions that correspond to Resco’s brand Nuline

10-99, with the following dimensions: 131⁄2 x 6 x 3 No. 1 key.

Product 2.--Resin bonded, magnesia-carbon brick for ladles with a carbon content of 10 percent,

fused grain and antioxidant additions that correspond to Resco’s brand Maxline 10 DFZ with the

following dimensions: SU 6 x 60 x 100 mm.

Product 3.--Resin bonded, magnesia-carbon brick for ladles with a carbon content of 10 percent,

fused grain and antioxidant additions that correspond to Resco’s brand Maxline 10 AFX, with the

following dimensions: 7 x (6-51⁄2) x 3 inch mini key.

Three U.S. producers, 11 importers of MCB from China, and one importer of MCB from Mexico

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

all products for all quarters. Pricing data reported by these firms accounted for approximately 24.8

percent of U.S. producers’ shipments of MCB, 17.2 percent of U.S. shipments of subject imports from

China, and *** percent of U.S. shipments of subject imports from Mexico in 2008.

Several importers of Chinese MCB reported price data for products that did not exactly meet the

specifications of one of these price products, but they felt were competitive with one of the specified
 5

 For product 1, *** reported data for a product specified as “resin bonded MC, elec.-arc furnace, carbon ***%,

fused grain, ***, 18x6x3 key. *** reported data for “EAF MCB, ***. *** reported data for a product for which

“shape and quality used for comparison is similar to the requested example.” *** indicated that “*** has reasonably

comparable specifications for Products 1 and 2 as demonstrated in the product specifications below. In addition,

since *** product sizes do not match the sizes selected in the pricing categories, *** has provided quantities and

values that combine all sizes of the relevant specification. Although prices vary on a per piece basis because of size

differences, there is no significant difference among sizes on a per-ton basis. *** reported data for a product with the

“same dimensions but carbon contents of ***. 

For product 2, *** reported data for a product specified as “resin bonded MC, ladles, carbon ***%, fused

grain, ***.” *** indicated that it does not “have exact knowledge of RESCO products but our MCB slag lines are

with ***. *** indicated that “shape is the same, but quality may differ slightly due to lack of mix details” for the

product for which it provided data. As noted for product 1, *** has provided quantities and values that combine all

sizes of the relevant specification. *** indicated that the product it provided data for had the “same dimensions but

carbon contents of ***.”

For product 3, *** provided data for a product for which, “shape is a mini-key in similar style but not exact

shape.” 

 6

 Petitioner’s postconference brief, exhibit 1, p. 6.

 7

 Respondent Vesuvius and Yingkou Bayuquan’s postconference brief, p. 17.

 8

 Ibid., p. 17 and 19, fn. 69.

 9

 Respondent RHI’s postconference brief, p. 19.

 10 ***. 

Price trends and margins of underselling and overselling are similar for products 2 and 3 combined (with

*** data included), as they are for products 2 and 3 separately (without *** data). However, the relative quantities

reported by U.S. producers and importers (excluding ***), for products 2 and 3 were different. For U.S. producers

(not including ***), quantities reported for product 3 were more than *** times those reported for product 2 (and no

sales of product 2 were reported for 2006). However, for imports, quantities reported were much higher for product

2 than product 3. For China, quantities reported for product 2 were about *** times those reported for product 3

(this does not include ***). Data for Mexico were reported ***. 

V-3

products.5

 Petitioner indicates that in these cases, reported product descriptions differed from the

specified product descriptions by only *** and that such small differences would not have any

meaningful impact on product prices.6

 Vesuvius and Yingkou Bayuquan respondents cited the difficulty

that questionnaire respondents had in identifying which of their products conformed most closely to the

price products as one among several reasons why the Commission should regard the apparent absolute

margins of underselling with some caution.7

 However, they also indicated that quarterly pricing data as a

whole confirm the trends evident from import shipment unit value data and regarding product 2, that

given the vast diversity of products and the degree to which this mix is customized to particular

customers’ requirements, it may be difficult to establish pricing categories that will be more

representative of actual competition than product 2.8

 RHI respondents indicated that prices reported by

importers may vary substantially and differ materially from prices reported by petitioner and possibly

other domestic producers because the pricing product descriptions were most vague in describing the

composition of the products, where variations will have a significant impact on price.9

 

Price Trends

Price data are shown in tables V-1 to V-2 and figure V-1. Data for products 2 and 3 are

combined since ***, was unable to provide separate data for the two products.10

Weighted-average sales prices for U.S.-produced MCB increased by 4.4 percent to 15.2 percent,

while weighted-average sales prices for products imported from China and Mexico increased by 10.9

percent to 28.7 percent (see table V-3). 
V-4

Table V-1

MCB: Weighted-average f.o.b. prices and quantities of domestic and imported product 11 and

margins of underselling/(overselling), by quarters, January 2006-June 2009

* * * * * * *

Table V-2

MCB: Weighted-average f.o.b. prices and quantities of domestic and imported products 21 and 32 

(combined) and margins of underselling/(overselling), by quarters, January 2006-June 2009

Period

United States China Mexico

Price 

(per ton)

Quantity

(tons)

Price 

(per ton)

Quantity

(tons)

Margin

(percent)

Price 

(per ton)

Quantity

(tons)

Margin

(percent)

2006:

 Jan.-Mar. $*** *** $936 1,052 *** $*** *** ***

 Apr.-June *** *** 920 1,102 *** *** *** ***

 July-Sept. *** *** 912 1,362 *** - 0 -

 Oct.-Dec. *** *** 898 1,263 *** - 0 -

2007:

 Jan.-Mar. *** *** 914 1,731 *** - 0 -

 Apr.-June *** *** 939 1,643 *** - 0 -

 July-Sept. *** *** 929 1,659 *** *** *** ***

 Oct.-Dec. *** *** 958 1,195 *** *** *** ***

2008:

 Jan.-Mar. *** *** 986 1,835 *** - 0 -

 Apr.-June *** *** 1,035 1,546 *** *** *** ***

 July-Sept. *** *** 1,079 1,463 *** *** *** ***

 Oct.-Dec. *** *** 1,090 890 *** *** *** ***

2009:

 Jan.-Mar. 1,204 139 1,100 884 *** - 0 -

 Apr.-June *** *** 1,099 1,108 *** - 0 -

 1 Product 2: Resin bonded, magnesia-carbon brick for ladles with a carbon content of 10 percent, fused grain

and antioxidant additions that correspond to Resco's brand Maxline 10 DFZ with the following dimensions: SU 6 x

60 x 100 mm.

 2

 Product 3: Resin bonded, magnesia-carbon brick for ladles with a carbon content of 10 percent, fused grain

and antioxidant additions that correspond to Resco's brand Maxline 10 AFX, with the following dimensions: 7 x

(6-51⁄2) x 3 inch mini key.

Source: Compiled from data submitted in response to Commission questionnaires.
 11 The following are the results if price data for products 2 and 3 are not combined (thus excluding *** data for

these products). Prices for MCB imported from China were below those for U.S.-produced MCB in 33 of 36

instances; margins of underselling ranged from 0.2 to 25.3 percent. Prices for MCB imported from China were

higher in 3 instances, with margins of overselling ranging from 0.9 to 27.5 percent. Prices for MCB imported from

Mexico were below those for U.S.-produced MCB in 10 of 11 instances; margins of underselling ranged from 0.4 to

29.6 percent. Prices for MCB imported from Mexico were higher in one instance with a margin of overselling of

22.8 percent.

V-5

Figure V-1

MCB: Weighted-average f.o.b. prices and quantities of domestic and imported product, by

quarters, January 2006-June 2009

* * * * * * *

Source: Tables V-1 to V-2.

Table V-3

MCB: Summary of weighted-average f.o.b. prices for products 1, 2, and 3 from the United States,

China, and Mexico

Item Number of

quarters

Low price 

(per ton)

High price

(per ton)

Change in price1

(percent)

Product 1 

United States 14 1,007 1,376 15.2

China 14 889 1,368 10.9

Mexico *** *** *** ***

Products 2 and 3

United States 14 966 1,226 4.4

China 14 898 1,100 17.4

Mexico *** *** *** ***

 1 Percentage change from the first quarter in which price data were available to the last quarter in which price data

were available, based on unrounded data.

Source: Compiled from data submitted in response to Commission questionnaires.

Price Comparisons

Margins of underselling and overselling for the period are presented in table V-4.11 As can be

seen from the table, prices for MCB imported from China were below those for U.S.-produced MCB in

27 of 28 instances; margins of underselling ranged from 0.8 to 21.0 percent. In the remaining instance,

prices for MCB from China were 27.5 percent above prices for the domestic product. Prices for MCB

imported from Mexico were below those for U.S.-produced MCB in 12 of 13 instances; margins of

underselling ranged from 4.7 to 32.1 percent. In the remaining instance, prices for MCB from Mexico

were 22.8 percent above prices for the domestic product. 
 12 Any pre-petition allegations submitted in petitioner’s producer questionnaire response were not included or

verified.

 13 Conference transcript, pp. 116-117 (J. Stein).

V-6

Table V-4

MCB: Instances of underselling/overselling and the range and average of margins, January

2006-June 20091

Source

Underselling Overselling

Number of

instances

Range

(percent)

Average

margin

(percent)

Number of

instances

Range

(percent)

Average

margin

(percent)

China 27 0.8 to 21.0 11.1 1 - 27.5

Mexico 12 4.7 to 32.1 16.7 1 - 22.8

 Total 39 0.8 to 32.1 12.8 2 25.1

 1 Based on data for products 2 and 3 combined.

 Source: Compiled from data submitted in response to Commission questionnaires.

LOST SALES AND LOST REVENUES

The Commission requested U.S. producers of MCB to report any instances of lost sales or

revenues they experienced due to competition from imports of MCB from China and/or Mexico during

January 2006-June 2009. Petitioner provided both allegations of lost sales and revenues in the petition. 

Of the two responding non petitioning U.S. producers (*** and ***), neither reported that it had to either

reduce prices or roll back announced price increases. One of these producers (***) indicated that ***.

However, both of these producers indicated that they had lost sales of MCB to imports from China and

Mexico and provided lost sales allegations. The 15 lost sales allegations totaled $4.7 million and involved

4,482 tons and the four lost revenues allegations totaled $419,547 and involved 1,335 tons of MCB.12

Staff contacted 14 purchasers and a summary of the information obtained follows (tables V-5 and V-6).

Table V-5

MCB: U.S. producers’ lost sales allegations

* * * * * * *

Table V-6

MCB: U.S. producers’ lost revenue allegations

* * * * * * *

S&S Intersource indicates that it is important to examine whether the lost sales and revenue

allegations involve integrated steel mill or steel mills with electric arc furnaces.13 S&S Intersource feels

that many of Resco’s long term relationships were with integrated steel mills selling BOF linings and the

ladles in those BOF plants, and that if “ET Works, Fairfield, Granite City, the big mills on the lakes in

Michigan, and Sparrows Point” represent a significant portion of Resco’s customer base, they lost volume
 14 Transcript, pp. 119-120 (Joseph Stein). S&S Intersource also indicated that in some cases Resco may have had

a terrible payment history with some mills and indicated that it would provide details in a postconference

submission. However, S&S Intersource did not make a postconference submission. 

 15 Staff telephone interview with ***, August 14, 2009.

 16 E-mail from ***, August 17, 2009. 

 17 E-mail from ***, August 24, 2009. 

 18 ***.

V-7

because the steel mills that they serve shut down.14 Of the purchasers named in lost sales and lost revenue

allegations, *** are integrated steel mills. ***.

***, indicated that the company could only track transactions *** for the lost sales allegation

made by *** and involving *** and that it was possible that he company purchased product originating

from the alleged source ***. ***.15 ***.16 After further checking *** records, *** indicated that prior to

*** did not purchase the product from ***.17

*** agreed with the two lost sales allegation involving his firm made by ***, but indicated that

the alleged prices were higher. ***.

*** disagreed with the sales allegation made by *** involving *** tons of MCBs. ***. ***

indicated that the decision to purchase from a Chinese source was based more on technical specifications

rather than price. *** indicated that his firm reviewed the technical specifications and decided that the

Chinese brick formulation best suited its operational parameters. He indicated that the prices quoted by

the Chinese supplier were about *** percent below the price quoted by the U.S. supplier, but that this is

not a true comparison because the brick specifications were not the same resulting in one of the main

reasons for the difference in price. *** indicated that the U.S. supplier is a key supplier to his business

and that in 2008 ***.

*** disagreed with the lost allegation made by ***. *** indicated that the sale was lost due to

service issues, not price.

*** disagreed with the lost sales allegation involving ***. They indicated that this was a trial

order. They also indicated that the price provided in the allegation is comparable to those offered by

other suppliers of U.S.-produced MCB and imports of MCB except for ***.

Regarding the lost sales allegation made by *** indicated his firm had purchased MCB from ***,

and has preferred to source its material inputs domestically. *** approached *** and stated that it was

not particularly interested in supplying *** with magnesia brick. *** indicated that ***. He indicated

that only after *** informed his company of its decision to not actively solicit its business did his

company seek to source magnesia brick from other vendors and in this case a Chinese vendor. ***

indicated that his current price from his suppliers of Chinese-origin magensia bricks is approximately ***

percent higher than the price at which it was procuring bricks from ***.

*** indicated that he purchased both U.S.-produced MCB and MCB imported from Mexico. 

***.18 He also currently purchases MCB from *** (the U.S. producer that made the lost sales allegation),

***. He indicated that “price was not the bottom line” in making his purchase decision, but that price,

quality, and service all are important factors. He indicated that he strives for *** and that imports of

MCB from Mexico are priced “a little lower” than from other sources. He indicated that service is good

from ***. He also indicated that part of his decision to purchase from *** is based on the relationship

and familiarity he has with the company ***. He indicated that *** has higher-priced products than ***

and that its service is not as good as other suppliers since it does not have ***. He also indicated that he

never relies totally on one supplier and that he never purchases MCB ***. 

*** indicated that he had purchased or considered quotes for MCB imported from China for some

but not all of the products listed in the lost revenue allegation made by ***. For the *** products

specified in the allegation, *** indicated that he did not consider any quotes for MCB imported from

China and only considered quotes for domestically produced MCB. For the other products mentioned in

the allegation, he indicated that the alleged quotes for the imported product were pretty close to the actual
 19 Staff telephone interview with ***, August 11, 2009.

V-8

quotes. Although he has purchased MCB imported from China, he indicated that he will only use

domestically produced magnesia carbon bricks in some parts of his furnace ***.19 *** indicated that

because of ***, he currently requires various suppliers to *** indicated that the quality of the product is

the most important factor in determining from what source he will purchase and that service and price are

equally considered as the second-most important factors in determining a purchase. He indicated that he

typically ***, and that quality and service for U.S.-produced MCB and MCB imported from China are

comparable. 

*** agreed with the lost sales allegation made by *** involving his firm. However, he indicated

that the alleged competing prices were larger. ***. All of these revised prices were below the alleged

rejected U.S. prices for each of these products.

*** indicated that he did not recognize the quantities or dollar amounts regarding the two lost

revenue allegations involving his company made by ***. He indicated that he purchases some

refractories from ***, but the date provided and the large dollar amounts are not familiar to him. *** is

unaware of any domestic suppliers that are losing sales or revenue regarding any recent/current purchases.

In a staff interview on August 26, 2009, *** indicated that *** could neither confirm nor deny

the lost sales allegation involving *** made by *** because the company does not keep records in a way

that would allow it to confirm or deny the allegation.
 1

 The firms are: ANH, LWB, and Resco. TYK America ***. Letter from TYK America, Inc., August 10, 2009. 

Each of the reporting firms has a fiscal year that ends on or about December 31. There are minor differences

between data reported in the trade and financial sections of the Commission’s producers’ questionnaire, which are

attributable to rounding.

 2

 During the period for which data were collected COGS was primarily affected by changes in raw material costs.

The average unit value (“AUV”) of sales was higher in 2007 compared with 2006 while the AUVs of raw materials

and COGS were lower; sales AUV was higher in 2008, nearly matched by the increase in the AUV of raw materials

in that year compared with 2007 (the increase in the AUV of total COGS exceeded that of sales in 2008 because

other factory costs and direct labor also increased). Finally, the sales AUV was *** higher in interim 2009

compared to interim 2008, and the increase in sales AUV was *** greater than the increase in the AUVs of raw

materials or total COGS. 

 3

 The SG&A expense-to-sales ratio and AUVs were *** for the 2006-08 period for ***, but these measures were

***. ***. 

 4

 Net income before taxes is calculated after deducting interest charges (the largest single item) and other

expenses and adding other income items to operating income. Cash flow is the sum of net income plus depreciation.

***. U.S. producers’ questionnaire responses, III-11.

VI-1

PART VI: FINANCIAL EXPERIENCE OF U.S. PRODUCERS

BACKGROUND

Three U.S. firms provided usable financial data on their operations producing MCB.1

 These

reported data are believed to represent over *** percent of U.S. MCB production during 2008.

OPERATIONS ON MCB

Income-and-loss data for the reporting U.S. producers of MCB are presented in table VI-1. The

quantity, value, and average unit value (“AUV”) of total net sales increased from 2006 to 2007. Although

the quantity of total net sales declined *** from 2007 to 2008, sales value increased because of ***

higher average unit values. In interim 2009 compared with interim 2008, total net sales were *** lower

(down *** percent and *** percent by quantity and value, respectively because of the falloff in raw steel

production) although sales unit values were higher. The absolute values of the cost of goods sold

(“COGS”) and selling, general, and administrative (“SG&A”) expenses followed the trend of sales,

increasing from 2006 to 2008, and were lower in interim 2009 than in interim 2008. The AUV of COGS

declined from 2006 to 2007 (unlike sales, which rose) but was *** higher in 2008 from 2007; it was

greater in interim 2009 than in interim 2008 (like sales).2

 The COGS-to-sales ratio declined between

2006 and 2007 but increased in 2008 for a net gain of about *** over the level in 2006; the ratio was ***

lower in interim 2009 than in interim 2008. The AUV of SG&A expenses rose *** from 2006 to 2007

and rose once more in 2008 from 2007; it was *** higher in interim 2009 than interim 2008 and led to the

industry’s ***. The SG&A expense-to-sales ratio was *** lower in 2008 compared to 2006 but was ***

higher in interim 2009 than in interim 2008.3

 For the three firms together, operating income *** from

2006 to 2007 as sales increased due to demand from steel industry end users and costs did not increase

proportionately, but operating income fell back in 2008 to nearly the level in 2006. One factor

accounting for the increase in operating income between 2006 and 2008 was that ***. Operating income

was *** lower (***) in interim 2009 compared with interim 2008 because ***; moreover, ***. Net

income before taxes and cash flow increased from 2006 to 2007 and fell in 2008; net income was negative

in 2008 and both interim periods. Cash flow was *** in interim 2008 and negative in interim 2008.4

 
 5

 Natural gas and electricity also are used in the production process. Petition, exh. 11. Also, see Petitioner’s

postconference brief, exh. 1, pp. 5-6 and exh. 12 (***).

 6

 Calculated from the questionnaire responses of the three firms, III-11. The upward price trend for magnesia raw

materials during 2005-08 is depicted in exh. 12 of petitioner’s postconference brief, ***. Reportedly, purchases ***. 

Staff interview with ***, September 2, 2009.

 7

 Conference transcript, p. 54 (Brown). Also, ***. Resco’s U.S. producers’ questionnaire response, IV-15, and

Petitioner’s postconference brief, exh. 1, p. 7. ***.

 8

 Resco argues that its profitability declined as prices could not be increased to keep up with escalating Chinese

raw material costs for key inputs of MCB (magnesia and graphite), while imports of MCB were selling at less than

fair value. Conference transcript, p. 38 (Magrath) and Petitioner’s postconference brief, exh. 12. Additionally

Resco referred to U.S. proposed consultations on Chinese export restraints under Section 301 (USTR filing with the

WTO in June 2009) and a private lawsuit alleging price fixing by an export cartel. Conference transcript, p. 38

(Magrath). See Resco’s responses to Commerce’s questions regarding additional subsidy allegations, letter dated

August 7, 2009, pp. 3-5; Freedonia Refractory Industry Study 2008, exh. S-4; and Expert Report Concerning

Damages, exh. S-5.

 9

 ANH ***. EDIS document 409563.

 10 In 2008, ANH reported ***.

VI-2

Table VI-1

MCB: Results of operations of U.S. producers, 2006-08, January-June 2008, and January-June

2009

* * * * * * *

Raw materials utilized in the production of MCB include such inputs as magnesite, aluminum and

silicon powdered metal, carbon, and resin.5

 COGS were mostly affected by changes in raw material costs. 

Raw material costs declined *** from 2006 to 2007 but rose in absolute value, as a percentage of net

sales, and on a per-unit basis from 2007 to 2008. On a per-unit basis, raw material costs were higher in

interim 2009 than in interim 2008 (the absolute value and ratio to sales, however, were lower). Raw

material costs also increased as a share of total COGS, from *** percent in 2006 to *** percent in 2008

and were *** percent in interim 2009 (*** than *** in interim 2008. Raw material costs averaged $***

per short ton of sales in 2008 for the three reporting U.S. producers (up *** from $*** per short ton in

2006, and ranged from $*** to $*** per short ton of sales on a firm-by-firm basis.6

 Raw material costs

increased further in 2009, averaging nearly $*** for the three firms together and ranging from $*** to

$***. Resco stated that in order to reduce raw material input costs, it began reclaiming unused brick to

use in MCB mixes as a replacement for higher priced virgin materials, as well as processing “spent

linings” from steelmakers in 2006.7

 Resco alleges that export restraints in China on magnesia raw

materials have restricted supply and resulted in higher prices in the United States.8

Table VI-2 depicts operating data for MCB on a firm-by-firm basis.

Table VI-2

MCB: Selected results of operations of U.S. producers, by firm, 2006-08, January-June 2008, and

January-June 2009

* * * * * * *

ANH, which produces MCB at White Cloud, MI, ***. It was *** of the periods for which data

were gathered–***. The quantity and value of ANH’s sales *** between 2006 and 2007 and *** in 2008,

but were *** in interim 2009 (***) than in interim 2008.9

 Its operating income margin *** in 2008 from

2007 ***. ANH reported ***.10
 11 Resco’s raw material costs are ***. However, there appear to be ***.

 12 In 2008, Resco reported ***. Calculated from Resco’s *** questionnaire responses.

 13 Raw material costs are “variable costs” (i.e., the dollar value varies directly with production and the AUV of a

variable cost stays the same unless the underlying cost of the input changes). The dollar value of “fixed costs” stays

the same but the AUV changes with variations in how the fixed costs are absorbed by changes in production. While

the absolute value of fixed costs remains the same, the AUVs of fixed costs varies inversely with production

changes–they rise when production falls and decrease with production increases. Variable costs increase or decrease

with changes in production although the AUV of variable costs stays the same with changes in production. *** of

the reporting firms stated that raw material costs are variable costs and *** classified direct labor as a variable cost. 

Other factory costs include both fixed costs (depreciation, insurance, plant management) and variable costs (indirect

materials, electricity, utility charges). The three reporting firms *** but were split on the nature of other factory

costs–***. In 2008, the fixed cost component accounted for *** percent of other factory costs. SG&A expenses

also have fixed and variable components. About *** percent of total SG&A expenses were estimated to be fixed

costs in 2008. 

 14 Compiled from data submitted in response to Commission questionnaires.

 15 The breakeven point, or the point to which sales/production can fall before the firm loses money, can be

calculated as sales minus variable costs minus fixed costs equals zero. Sales minus variable costs is the contribution

margin. Rearranging the equation, the quantity at the breakeven point equals fixed costs in dollars divided by the

unit contribution margin. The validity of this calculation depends upon a number of crucial assumptions. See,

Charles T. Horngren, George Foster, Srikant M. Datar, Cost Accounting: A Managerial Emphasis (New Jersey:

Prentice Hall, 9th Ed, 1997), p. 60.

 16 A variance analysis is calculated in three parts: sales variance, cost of sales variance, and SG&A expense

variance. Each part consists of a price variance (in the case of the sales variance) or a cost variance (in the case of

the cost of sales and SG&A expense variance) and a volume variance. The sales or cost variance is calculated as the

change in unit price times the new volume, while the volume variance is calculated as the change in volume times

the old unit price. Summarized at the bottom of the table, the price variance is from sales; the cost/expense variance

is the sum of those items from COGS and SG&A variances, respectively, and the volume variance is the sum of the

lines under price and cost/expense variance. The volume component of price variance is nearly always negative

because of the way in which the spreadsheet is constructed.

VI-3

LWB produces MCB at its plant in York, PA (*** of that plant’s production). In 2008, LWB

was the ***. It was *** of the periods for which data were collected; its operating income margin ***. 

The value and AUV of LWB’s sales increased between 2006 and 2008. Although its sales in interim

2009 were lower than in interim 2008, the average unit value of its sales was greater. The AUVs of

LWB’s sales and COGS ***.

Resco is the ***. Unlike ***. Resco’s total net sales value rose from 2006 to 2008, but was ***. 

The increase between 2006 and 2007 was from ***. Resco’s ***.11 Its SG&A expenses are ***. 

Starting in July 2008, Resco cut costs at its Hammond, IN, plant through ***. Resco ***.12

Each of the responding firms provided a breakdown between fixed costs and variable costs13 in

their questionnaire response. For the three firms together, fixed costs accounted for about *** percent of

COGS and *** percent of SG&A expenses in 2008.14 While the fixed cost portion of COGS seems very

low, it should be noted that raw materials costs, chiefly forms of magnesia, accounted for about ***

percent of total COGS in 2008. Based on the breakdown between fixed and variable costs, the breakeven

point, which is the quantity sold where total revenues and total costs are equal,15 can be calculated for the

five firms. That point was *** short tons in 2008 and constituted nearly *** percent of the reported

production of the three firms together in 2008; only *** percent of its production in 2008, the year in

which ***. The breakeven points of *** in 2008 were *** and *** percent, respectively.

A variance analysis for the operations of U.S. producers of MCB is presented in table VI-3. The

information for this variance analysis is derived from table VI-1.16 The analysis shows that the increase

of $*** in the operating income from 2006 to 2008 was attributable to the favorable price variance (unit

sales values increased) that was greater than the unfavorable net cost/expense variance (unit costs

increased). Operating income fell by nearly $*** between interim 2008 and interim 2009 because a
 17 Resco stated at the staff conference that it planned to install a hydraulic press at Hammond in 2006 to prepare

for a potential increase in MCB production due to increasing demand from steel producers. It claimed that lowpriced imports from China and Mexico captured the increased volume of MCB, and that the press sits uninstalled

and unused. Conference transcript, p. 19 (Brown). Resco also stated that ***. Resco’s U.S. producers’

questionnaire response, III-14.

 18 Resco stated ***. Resco’s U.S. producers’ questionnaire response, III-14.

VI-4

favorable price variance (unit prices increased) was overwhelmed by unfavorable variances on net

cost/expense (unit costs and expenses increased) and volume.

Table VI-3

MCB: Variance analysis on the operations of U.S. producers, 2006-08, and January-June 2008 to

January-June 2009

* * * * * * *

CAPITAL EXPENDITURES AND RESEARCH AND DEVELOPMENT EXPENSES

Each of the U.S. producers was asked about the nature of their capital expenditures and research

and development (“R&D”) expenses (table VI-4). ANH reported that ***. LWB stated that ***. Resco

stated that its ***.17 Resco’s R&D expenses ***.18

Table VI-4

MCB: Capital expenditures and research and development expenses of U.S. producers, 2006-08,

January-June 2008, and January-June 2009

* * * * * * *

ASSETS AND RETURN ON INVESTMENT

Data on the U.S. producers’ total assets and their return on investment (“ROI”) are presented in

table VI-5. Total assets utilized in the production, warehousing, and sale of MCB for reporting U.S.

producers increased by *** percent from 2006 to 2008 led by ***, which nearly ***. ROI, which is

calculated as the ratio of operating income to total assets, therefore followed the trend of operating

income, and was higher in 2007 from 2006 but fell back in 2008 to nearly the level it had been in 2006.

Table VI-5

MCB: The value of assets and return on investment of U.S. producers, fiscal years 2006–08

* * * * * * *

Two asset management ratios, which measure how effectively the firm is managing its assets,

may also be calculated from these data. These ratios assist in answering the question of whether a firm’s

types and amounts of assets assist its current and projected sales. The ratios examined here are: (1) the

inventory turnover ratio; and (2) days sales outstanding.

The inventory turnover ratio is defined as sales divided by average inventories of finished goods. 

As a rough approximation, this measures the number of times per year that inventory is turned over or

sold. A low number suggests that a firm is holding excess or unproductive inventory (unproductive

inventory represents low return). For the three firms together this ratio was *** times in 2008, up from

*** times and *** times in 2006 and 2007, respectively. The increase in the ratio is due to the increase in
 19 Each of the responding U.S. producers provided data for their inventories of raw materials and work-in-process

goods together as of the end of their fiscal year. For the industry as a whole, the ratio of this category to sales

increased during 2006 to 2008, from an average of *** percent to *** percent. The ratio *** between the three

firms. For ANH the ratio was *** percent in 2006, 2007, and 2008, respectively. For LWB, the ratio was ***

percent and for Resco, the ratio was *** percent in 2006, 2007, and 2008, respectively. Calculated from U.S.

producers’ questionnaire responses, III-11 and III-13. ***.

 20 ***. U.S. producers’ questionnaire responses of the three firms, IV-5.

 21 ***.

VI-5

sales value and the decline in value of inventories during the three full years. For *** the increase was

greater than the industry average–*** in 2008 from 2006, respectively, while the ratio for ***.19

Days sales outstanding (“DSO”), which is also called the average collection period, may be used

to evaluate accounts receivable. It is defined as accounts receivable divided by average sales per day (or

annual total net sales divided by 365 days). The DSO may be evaluated with respect to the firm’s credit

terms because if the customer is paying later than the contractual terms,20 it deprives the producer of

funds. Or, late payment may signal that the customer is in financial distress although this does not seem

to be the case here. For the MCB industry, this ratio was *** days in 2008 down from *** days in 2006. 

For ***.

CAPITAL AND INVESTMENT

The Commission requested U.S. producers of MCB to describe any actual or potential negative

effects of imports of MCB from China on their firms’ growth, investment, ability to raise capital,

development and production efforts, or the scale of capital investments. Their responses are shown

below.

Actual Negative Effects

ANH: ***.

LWB: ***.

Resco: ***.

Anticipated Negative Effects

ANH: ***.

LWB: ***.

Resco: ***.21

 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.”

 3

 ***. 

 4

 http://www.fengchi.com.cn/en/jj.htm, retrieved September 1, 2009.

 5

 http://indmin.com/Article/2259762/Channel/0/Magnesia-make-over-a-global-review.html, retrieved September

2, 2009.

 6

 Producers in China that submitted foreign producer questionnaires were: ***.

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

***. ***.3

 The Chinese MCB industry relies on rich, high-grade magnesia reserves to produce

its MCB.4

 Together, China, North Korea, and Russia account for nearly 75 percent of global magnesia

production capacity. China has been described as a mainstay of world supply of magnesia with changes

in Chinese exports of magnesia affecting worldwide refractory access to magnesia through tightened

supply and rising prices.5

The Commission requested data from the 35 firms that were listed in the petition as producing

MCB in China during the period of the investigation. The Commission received a response from seven

firms,6

 and data regarding the Chinese industry are based on the seven foreign producer questionnaires

received. These responses are believed to account for approximately *** percent of Chinese export

shipments to the United States in 2008.

Table VII-1 presents information on the Chinese industry’s MCB operations. Chinese capacity

and production both increased from 2006 to 2008, then decreased between the interim periods, and were

projected to decrease in 2009 and increase in 2010. Chinese capacity utilization decreased steadily from

2006 to 2008, then decreased in interim 2009 compared with interim 2008. Chinese producers projected 
VII-3

Table VII-1

MCB: Chinese production capacity, production, shipments, and inventories, 2006-08, January-June 2008,

January-June 2009, and projected 2009-10

Item

Actual experience Projections

2006 2007 2008

January-June

2008 2009 2009 2010

Quantity (short tons)

Capacity1 327,363 369,463 520,272 259,831 251,361 503,332 513,012

Production 260,724 282,780 327,464 172,908 112,638 274,227 352,041

End of period inventories 13,759 20,481 21,653 21,355 20,085 23,210 23,745

Shipments

 Home market 77,515 81,472 78,341 41,361 30,326 62,374 87,615

 Exports to--

The United States 25,054 30,462 37,499 19,572 10,196 21,533 27,887

All other markets 161,969 164,506 210,323 111,307 73,934 190,839 233,479

 Total exports 187,022 194,968 247,822 130,879 84,129 212,372 261,366

Total shipments 264,538 276,440 326,162 172,240 114,455 274,746 348,981

Ratios and shares (percent)

Capacity utilization 79.6 76.5 62.9 66.5 44.8 54.5 68.6

Inventories to production 5.3 7.2 6.6 6.2 8.9 8.5 6.7

Inventories to total

 shipments 5.2 7.4 6.6 6.2 8.8 8.4 6.8

Share of total quantity of

 shipments:

Home market 29.3 29.5 24.0 24.0 26.5 22.7 25.1

 Exports to--

The United States 9.5 11.0 11.5 11.4 8.9 7.8 8.0

All other markets 61.2 59.5 64.5 64.6 64.6 69.5 66.9

All export markets 70.7 70.5 76.0 76.0 73.5 77.3 74.9

 1 ***.

Note. – Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires.
 7

 These other export markets include: ***. 

 8

 ***.

 9

 The other export markets are ***.

 10 ***. Respondent RHI’s postconference brief, p. 12.

VII-4

a decrease in capacity utilization in 2009 and an increase in 2010. The share of Chinese shipments sold to

its home market ranged from 24.0 percent to 29.5 percent during 2006 to 2008. The majority of Chinese

producer export shipments was to countries other than the United States.7

 Chinese total exports as a share

of its total shipments ranged from 70.5 percent to 76.0 percent during 2006-08.

In the most recent fiscal year, Chinese producers of MCB estimated that the share of their total

sales represented by sales of MCB, based on quantity, is as follows: ***. 

Six Chinese producers of MCB reported that they produce other products on the same equipment

and machinery used to produce MCB: ***. 

THE INDUSTRY IN MEXICO

The Commission requested data from the one MCB producer in Mexico, RHI-Refmex S.A. de

D.V.(Refmex)8

. The Commission received a response from Refmex, which accounted for 100 percent of

Mexican production and approximately *** percent of Mexican exports during the period of

investigation.

Table VII-2 presents information on Refmex’s MCB operations in Mexico. Refmex’s capacity 

*** from 2006 to 2008 and during January-June 2009 and was projected to *** through 2010. Refmex’s

production of MCB *** percent from 2006 to 2008 and *** percent between the interim periods. 

Refmex’s production is expected to ***. Refmex’s capacity utilization *** percent in 2006 to ***

percent in 2008. Capacity utilization in 2009 is projected to be *** percent.

The volume of Refmex’s shipments to its home market ranged from a low of *** percent in 2006

to *** percent in interim 2008. The *** of Refmex’s exports was exported to the United States.9

 These

exports *** percent from 2006 to 2008 and *** as a share of Refmex’s total shipments from *** percent

in 2006 to *** percent in 2008.10 Refmex’s shipments to other countries *** from *** percent of total

shipments in 2006 to *** percent of total shipments in 2008. RHI Refmex *** produce other products on

the same machinery and equipment used to produce MCB. 

Table VII-2

MCB: Mexican production capacity, production, shipments, and inventories, 2006-08, JanuaryJune 2008, January-June 2009, and projected 2009-10

* * * * * * *
 11 The following firms reported inventories from China: ***. 

 12 Those firms are ***. 

 13 On August 12, 2009, the EC amended the margin for Yingkou Bayuquan Refractories to zero percent and the

margin for Dashiquiao Sanqiang Refractory to 14.4 percent. Respondent Vesuvius’ and Yingkou Banuquan’s

postconference brief, exh.9.

 14 Petitioner’s postconference brief, p. 29, exh. 7.

 15 Mittal Steel Point Lisas Ltd. v. United States, Slip Op. 2007-1552 at 17 (Fed. Cir., Sept. 18, 2008), quoting

from Statement of Administrative Action on Uruguay Round Agreements Act, H.R. Rep. 103-316, Vol. I at 851-52;

see also Bratsk Aluminum Smelter v. United States, 444 F.3d 1369 (Fed. Cir. 2006).

VII-5

U.S. IMPORTERS’ INVENTORIES OF MCB

Eleven U.S. importers reported inventories of imports of MCB from China during the period for

which data were collected, one firm reported inventories from Mexico, and two firms reported inventories

from other countries.11 Data collected in these investigations on U.S. importers’ end-of-period inventories

of MCB are presented in table VII-3. Inventories from China and Mexico *** from 2006 to 2008 then

*** between the interim periods. 

U.S. IMPORTERS’ CURRENT ORDERS

 Ten U.S. importers reported imports or the arrangement of imports of MCB of 6,626 short

tons from China and *** short tons from Mexico after June 30, 2009.12

ANTIDUMPING AND COUNTERVAILING DUTY INVESTIGATIONS

IN THIRD-COUNTRY MARKETS

On October 6, 2005, the European Commission imposed antidumping duties on imports of MCB

from China that vary for six manufacturers and are fixed at 39.9 percent for all other companies.13 On

September 1, 2007, Turkey imposed antidumping duties ($145/ton) on imports of MCB from China.14

INFORMATION ON PRODUCERS IN NONSUBJECT COUNTRIES

In assessing whether the domestic industry is materially injured or threatened with material

injury “by reason of subject imports,” the legislative history states “that the Commission must examine all

relevant evidence, including any known factors, other than the dumped or subsidized imports, that may be

injuring the domestic industry, and that the Commission must examine those other factors (including nonsubject imports) ‘to ensure that it is not attributing injury from other sources to the subject imports.’”15
VII-6

Table VII-3

MCB: U.S. importers’ end-of-period inventories of imports, 2006-08, January-June 2008, and

January-June 2009

Source

Calendar year January-June

2006 2007 2008 2008 2009

Imports from China:

 Inventories (short tons) 24,279 25,373 27,527 24,788 23,029

Ratio to imports (percent) 60.0 66.2 61.3 46.3 105.8

 Ratio to U.S. shipments of imports

 (percent) 73.6 70.1 65.4 46.1 73.4

Imports from Mexico:

 Inventories (short tons) *** *** *** *** ***

Ratio to imports (percent) *** *** *** *** ***

 Ratio to U.S. shipments of imports

 (percent) *** *** *** *** ***

Imports from subject sources:

 Inventories (short tons) *** *** *** *** ***

Ratio to imports (percent) *** *** *** *** ***

 Ratio to U.S. shipments of imports

 (percent) *** *** *** *** ***

Imports from all other sources:

 Inventories (short tons) *** *** *** *** ***

Ratio to imports (percent) *** *** *** *** ***

 Ratio to U.S. shipments of imports

 (percent) *** *** *** *** ***

Imports from all sources:

 Inventories (short tons) *** *** *** *** ***

Ratio to imports (percent) *** *** *** *** ***

 Ratio to U.S. shipments of imports

 (percent) *** *** *** *** ***

Note.–Because of rounding, figures may not add to the totals shown. Partial-year ratios are based on annualized

import and shipment data.

Source: Compiled from data submitted in response to Commission questionnaires.
 16 http://www.referenceforbusiness.com/history2/68/RHI-AG.html, retrieved August 21, 2009.

 17 Staff telephone interview with ***.

 18 Petitioner’s postconference brief, exh. 1 and exh. 14.

 19 Staff telephone interview with ***.

 20 http://wrightreports.ecnext.com/coms2/reportdesc_COMPANY_C07621060, retrieved August 21, 2009.

 21 http://www.wealth.bloomberg.com/apps/news?pid=conewsstory&tkr=GPIX:LX&sid=aYtSKEDpAhug,

retrieved August 27, 2009.

 22 E-mail correspondence with LWB, August 28, 2009.

VII-7

Europe

 RHI AG (Austria) is the world's largest manufacturer of heat-resistant refractory products,

and is said to account for a global refractories market share of some 15 percent and as much as 30 percent

of the European and NAFTA markets.16 RHI AG is also the parent company of RHI Refractories

Liaoning Co., Ltd. (China) and RHI-Refmex (Mexico). RHI has MCB producing plants in Duisburg,

Germany; Veitsch, Germany, and Carinthia, Austria. According to counsel for RHI, ***.17 LWB has

MCB producing plants in Hagen and Oberhausen, Germany, as well as its MCB plant in York, PA.18

Finally, Refratechnik Cement GmbH produces MCB in a plant located in Gottingen, Germany. ***.19

Brazil

 Magnesita Refractarios SA (Magnesita) is reported to be the largest producer of refractory

products, including brick, in Brazil. A profile of Magnesita’s activities indicated that the company sells

and distributes heat-resistant products used in the construction of high temperature industrial furnaces.

Products include a full range of refractory bricks, paste, mortar, cement and concrete. In addition to its

home market and South American sales, Magnesita also exports its products to Europe, Asia and Latin

America.20 In September 2008, Magnesita purchased U.S. MCB producer LWB, making Magnesita the

world’s third-largest producer of refractory brick products.21 Magnesita has exported *** MCB to North

America. The company has made a ***.22 The vast majority of Magnesita’s MCB sales have been inside

South America during the period of investigation.

A-1

APPENDIX A

FEDERAL REGISTER NOTICES

Federal Register / Vol. 74, No. 152 / Monday, August 10, 2009 / Notices 39969 

(‘‘IA’’) and Ineos opposed Sinochem’s 

petition. 

On June 1, 2009, the Commission 

determined to review the RID in its 

entirety and requested briefing on 

certain questions. The Commission 

determined to extend the target date to 

August 3, 2009, to accommodate its 

review. 

Having examined the record of this 

investigation, including the ALJ’s RID 

and the submissions of the parties, the 

Commission has determined to reverse 

the conclusion of nonobviousness of 

claim 1 of the ‘276 patent in the RID. In 

so finding, the Commission has 

determined to rely on certain party 

admissions and other evidence as to the 

state of the prior art. The Commission 

majority has determined to take no 

position on the RID’s conclusions 

relating to obviousness arguments based 

on prior art references identified in the 

Commission’s remand instructions, 

including the RID’s conclusions on 

whether arguments as to those 

references have been waived. The 

Commission has also determined not to 

rely on the RID’s conclusions as to 

anticipation and waiver of anticipation 

arguments. The Commission has further 

determined to deny Sinochem’s motion 

to strike portions of Ineos’s response to 

its written submission and for leave to 

file a reply to that submission. The 

Commission has determined also to 

deny Sinochem’s motion to conform 

pleadings to evidence taken. These 

findings terminate the Commission’s 

investigation. 

The authority for the Commission’s 

determination is contained in section 

337 of the Tariff Act of 1930, as 

amended (19 U.S.C. 1337), and in Rule 

210.45 of the Commission’s Rules of 

Practice and Procedure (19 CFR Part 

210.45). 

By order of the Commission. 

Issued: August 4, 2009. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. E9–19015 Filed 8–7–09; 8:45 am] 

BILLING CODE 7020–02–P 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation No. 337–TA–676] 

In the Matter of Certain Lighting 

Control Devices Including Dimmer 

Switches and Parts Thereof; Notice of 

Commission Decision Not To Review 

an Initial Determination Terminating 

the Investigation Based on a Consent 

Order 

AGENCY: U.S. International Trade 

Commission. 

ACTION: Notice. 

SUMMARY: Notice is hereby given that 

the U.S. International Trade 

Commission has determined not to 

review the presiding administrative law 

judge’s (‘‘ALJ’’) initial determination 

(‘‘ID’’) (Order No. 8) granting the joint 

motion of complainant Lutron 

Electronics Co., Inc. (‘‘Lutron’’) and 

respondent Universal Smart Electric 

Corp. (‘‘Universal’’) to terminate the 

investigation based on a consent order. 

FOR FURTHER INFORMATION CONTACT: 

Daniel E. Valencia, Office of the General 

Counsel, U.S. International Trade 

Commission, 500 E Street, SW., 

Washington, DC 20436, telephone (202) 

205–1999. Copies of non-confidential 

documents filed in connection with this 

investigation are or will be available for 

inspection during official business 

hours (8:45 a.m. to 5:15 p.m.) in the 

Office of the Secretary, U.S. 

International Trade Commission, 500 E 

Street, SW., Washington, DC 20436, 

telephone (202) 205–2000. General 

information concerning the Commission 

may also be obtained by accessing its 

Internet server at http://www.usitc.gov. 

The public record for this investigation 

may be viewed on the Commission’s 

electronic docket (EDIS) at http:// 

edis.usitc.gov. Hearing-impaired 

persons are advised that information on 

this matter can be obtained by 

contacting the Commission’s TDD 

terminal on (202) 205–1810. 

SUPPLEMENTARY INFORMATION: The 

Commission instituted this investigation 

on May 11, 2009, based on a complaint 

filed by Lutron of Coopersburg, 

Pennsylvania. 74 FR 21820 (May 11, 

2009). The complaint alleges violations 

of section 337 of the Tariff Act of 1930 

(19 U.S.C. 1337) in the importation into 

the United States, the sale for 

importation, and the sale within the 

United States after importation of 

certain lighting control devices 

including dimmer switches and parts 

thereof by reason of infringement of 

United States Patent Nos. 5,637,930 and 

5,248,919 as well as U.S. Trademark 

Registration No. 3,061,804. The 

complaint named Universal of Irvine, 

California as the sole respondent. 

On July 8, 2009, Universal and Lutron 

jointly filed a motion pursuant to 

Commission rule 210.21(c) (19 CFR 

210.21(c)) for termination of the 

investigation based on a consent order. 

The Commission investigative attorney 

supported the motion. 

On July 14, 2009, the ALJ issued the 

subject ID granting the joint motion to 

terminate. The ALJ found that the 

consent order stipulation submitted 

with the joint motion complied with the 

requirements of Commission rule 210.21 

(19 CFR 210.21). The ALJ also 

concluded that there is no evidence that 

termination of this investigation would 

be contrary to the public interest. No 

petitions for review of this ID were filed. 

Having examined the record of this 

investigation, the Commission has 

determined not to review the ID. 

The authority for the Commission’s 

determination is contained in section 

337 of the Tariff Act of 1930, as 

amended (19 U.S.C. 1337), and in 

section 210.42 of the Commission’s 

Rules of Practice and Procedure (19 CFR 

210.42). 

Issued: August 4, 2009. 

By order of the Commission. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. E9–19021 Filed 8–7–09; 8:45 am] 

BILLING CODE 7020–02–P 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation Nos. 701–TA–468 and 731– 

TA–1166–1167 (Preliminary)] 

Certain Magnesia Carbon Bricks From 

China and Mexico 

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 countervailing duty investigation 

No. 701–TA–468 (Preliminary) and 

antidumping duty investigation Nos. 

731–TA–1166–1167 (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 


rmajette on DSK29S0YB1PROD with NOTICES
39970 Federal Register / Vol. 74, No. 152 / Monday, August 10, 2009 / Notices 

an industry in the United States is 

materially retarded, by reason of 

imports from China and Mexico of 

certain magnesia carbon bricks 

(‘‘MCB’’), provided for in subheadings 

6902.10.10, 6902.10.50, 6815.91.00 and 

6815.99.00 of the Harmonized Tariff 

Schedule of the United States, that are 

alleged to be subsidized by the 

Government of China, and sold in the 

United States at less than fair value. 

Unless the Department of Commerce 

extends the time for initiation pursuant 

to section 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 

these investigations in 45 days, or in 

this case by September 14, 2009. The 

Commission’s views are due at 

Commerce within five business days 

thereafter, or by September 21, 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: July 29, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Elizabeth Haines (202–205–3200), Office 

of Investigations, U.S. International 

Trade Commission, 500 E Street, SW., 

Washington, DC 20436. Hearingimpaired persons can obtain 

information on this matter by contacting 

the Commission’s TDD terminal on 202– 

205–1810. Persons with mobility 

impairments who will need special 

assistance in gaining access to the 

Commission should contact the Office 

of the Secretary at 202–205–2000. 

General information concerning the 

Commission may also be obtained by 

accessing its internet server (http:// 

www.usitc.gov). The public record for 

these investigations may be viewed on 

the Commission’s electronic docket 

(EDIS) at http://edis.usitc.gov. 

SUPPLEMENTARY INFORMATION: 

Background.—These investigations 

are being instituted in response to a 

petition filed on July 29, 2009, by Resco 

Products, Inc., (Pittsburgh, PA). 

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 countervailing duty and 

antidumping 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 August 

19, 2009, at the U.S. International Trade 

Commission Building, 500 E Street, 

SW., Washington, DC. Parties wishing to 

participate in the conference should 

contact Elizabeth Haines (202–205– 

3200) not later than August 14, 2009, to 

arrange for their appearance. Parties in 

support of the imposition of 

countervailing and antidumping 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 

August 24, 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 

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. 

By order of the Commission. 

Issued: July 30, 2009. 

Marilyn R. Abbott, 

Secretary to the Commission. 

William R. Bishop, 

Acting Secretary to the Commission. 

[FR Doc. E9–19061 Filed 8–7–09; 8:45 am] 

BILLING CODE 7020–02–P 

INTERNATIONAL TRADE 

COMMISSION 

[USITC SE–09–023] 

Government in the Sunshine Act 

Meeting Notice 

AGENCY HOLDING THE MEETING: United 

States International Trade Commission. 

TIME AND DATE: August 18, 2009 at 

2 p.m. 

PLACE: Room 101, 500 E Street, SW., 

Washington, DC 20436, Telephone: 

(202) 205–2000. 

STATUS: Open to the public. 

MATTERS TO BE CONSIDERED: 

1. Agenda for future meetings: None. 

2. Minutes. 

3. Ratification List. 

4. Inv. Nos. 701–TA–458 and 731– 

TA–1154 (Final) (Certain Kitchen 

Appliance Shelving and Racks from 

China)—briefing and vote. (The 

Commission is currently scheduled to 

transmit its determinations and 

Commissioners’ opinions to the 

Secretary of Commerce on or before 

August 31, 2009.) 

5. Outstanding action jackets: None. 

In accordance with Commission 

policy, subject matter listed above, not 

disposed of at the scheduled meeting, 


rmajette on DSK29S0YB1PROD with NOTICES
42852 Federal Register / Vol. 74, No. 163 / Tuesday, August 25, 2009 / Notices 

III. State Advisory Committee Issues 

• Arizona SAC; 

• Hawaii SAC; 

• Michigan SAC; 

• Utah SAC; 

• Indiana SAC; 

• Nebraska SAC; 

• South Dakota SAC. 

IV. Program Planning 

• Update on National Civil Rights 

Conference. 

V. Adjourn 

CONTACT PERSON FOR FURTHER

INFORMATION: Lenore Ostrowsky, Acting 

Chief, Public Affairs Unit (202) 376– 

8582. TDD: (202) 376–8116. 

Persons with a disability requiring 

special services, such as an interpreter 

for the hearing impaired, should contact 

Pamela Dunston at least seven days 

prior to the meeting at 202–376–8105. 

TDD: (202) 376–8116. 

Dated: August 21, 2009. 

David Blackwood, 

General Counsel. 

[FR Doc. E9–20613 Filed 8–21–09; 4:15 pm] 

BILLING CODE 6335–01–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

Proposed Information Collection; 

Comment Request; Procedures for 

Importation of Supplies for Use in 

Emergency Relief Work 

AGENCY: International Trade 

Administration, Commerce. 

ACTION: Notice. 

SUMMARY: The Department of 

Commerce, as part of its continuing 

effort to reduce paperwork and 

respondent burden, invites the general 

public and other Federal agencies to 

take this opportunity to comment on 

proposed and/or continuing information 

collections, as required by the 

Paperwork Reduction Act of 1995. 

DATES: Written comments must be 

submitted on or before October 26, 

2009. 

ADDRESSES: Direct all written comments 

to Diana Hynek, Departmental 

Paperwork Clearance Officer, 

Department of Commerce, Room 7845, 

14th and Constitution Avenue, NW., 

Washington, DC 20230 (or via the 

Internet at dHynek@doc.gov). 

FOR FURTHER INFORMATION CONTACT: 

Requests for additional information or 

copies of the information collection 

instrument and instructions should be 

directed to Hardeep K. Josan, Office of 

the Chief Counsel for Import 

Administration, Room 3622, U.S. 

Department of Commerce, 1401 

Constitution Avenue, NW., Washington, 

DC 20230; telephone: 202–482–0835; 

hardeep.josan@mail.doc.gov. 

SUPPLEMENTARY INFORMATION: 

I. Abstract 

The regulations (19 CFR 358.101 

through 358.104) provide procedures for 

requesting the Secretary of Commerce to 

permit the importation of supplies, such 

as food, clothing, and medical, surgical, 

and other supplies, for use in emergency 

relief work free of antidumping and 

countervailing duties. 

Authority: 19 U.S.C. 1318(a). There are no 

proposed changes to this information 

collection. 

II. Method of Collection 

Three copies of the request must be 

submitted in writing to the Secretary of 

Commerce, Attention: Import 

Administration, Central Records Unit, 

Room 1870, U.S. Department of 

Commerce, 1401 Constitution Avenue, 

NW., Washington, DC 20230. 

III. Data 

OMB Control Number: 0625–0256. 

Form Number(s): None. 

Type of Review: Regular submission. 

Affected Public: Business or other forprofit organizations. 

Estimated Number of Respondents: 5. 

Estimated Time per Response: 2. 

Estimated Total Annual Burden 

Hours: 10. 

Estimated Total Annual Cost to 

Public: $143.20. 

IV. Request for Comments 

Comments are invited on: (a) Whether 

the proposed collection of information 

is necessary for the proper performance 

of the functions of the agency, including 

whether the information shall have 

practical utility; (b) the accuracy of the 

agency’s estimate of the burden 

(including hours and cost) of the 

proposed collection of information; (c) 

ways to enhance the quality, utility, and 

clarity of the information to be 

collected; and (d) ways to minimize the 

burden of the collection of information 

on respondents, including through the 

use of automated collection techniques 

or other forms of information 

technology. 

Comments submitted in response to 

this notice will be summarized and/or 

included in the request for OMB 

approval of this information collection; 

they also will become a matter of public 

record. 

Dated: August 19, 2009. 

Gwellnar Banks, 

Management Analyst, Office of the Chief 

Information Officer. 

[FR Doc. E9–20346 Filed 8–24–09; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–570–954, A–201–837] 

Certain Magnesia Carbon Bricks from 

the People’s Republic of China and 

Mexico: Initiation of Antidumping Duty 

Investigations 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

EFFECTIVE DATE: August 25, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Terre Keaton Stefanova at (202) 482– 

1280 or David Goldberger at (202) 482– 

4136 (Mexico), AD/CVD Operations, 

Office 2; Jerry Huang at (202) 482–4047 

or Paul Walker at (202) 482–0413 

(China), 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 Petitions 

On July 29, 2009, the Department of 

Commerce (the ‘‘Department’’) received 

petitions concerning imports of certain 

magnesia carbon bricks (‘‘magnesia 

carbon bricks’’) from the People’s 

Republic of China (‘‘PRC’’) and Mexico 

filed in proper form by Resco Products, 

Inc. (‘‘Petitioner’’). See Petition for the 

Imposition of Antidumping Duties: 

Certain Magnesia Carbon Bricks from 

the People’s Republic of China, dated 

July 29, 2009 (‘‘AD PRC Petition’’); 

Petition for the Imposition of 

Antidumping Duties: Certain Magnesia 

Carbon Bricks from Mexico, dated July 

29, 2009 (‘‘AD Mexico 

Petition’’)(collectively, the ‘‘Petitions’’). 

On August 4 and 12, 2009, the 

Department issued additional requests 

for information and clarification of 

certain areas of the Petitions. Based on 

the Department’s requests, Petitioner 

timely filed additional information 

pertaining to the Petitions on August 10 

and 14, 2009 (hereinafter, ‘‘Supplement 

to the AD PRC Petition,’’ and 

‘‘Supplement to the AD Mexico 

Petition,’’ both dated August 10, 2009, 

and ‘‘Second Supplement to the AD 

PRC Petition,’’ and ‘‘Second 

Supplement to the AD Mexico Petition,’’ 


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1September 8, 2009, is the first business day after 

twenty calendar days from the signature date of this 

notice. 

both dated August 14, 2009). The period 

of investigation (‘‘POI’’) for the PRC is 

January 1, 2009, through June 30, 2009. 

The POI for Mexico is July 1, 2008, 

through June 30, 2009. See 19 CFR 

351.204(b)(1). 

In accordance with section 732(b) of 

the Tariff Act of 1930, as amended (the 

‘‘Act’’), Petitioner alleges that imports of 

magnesia carbon bricks from the PRC 

and Mexico 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 Petitioner 

filed the Petitions on behalf of the 

domestic industry because Petitioner is 

an interested party, as defined in section 

771(9)(C) of the Act, and has 

demonstrated sufficient industry 

support with respect to the antidumping 

duty investigations that Petitioner is 

requesting the Department to initiate 

(see ‘‘Determination of Industry Support 

for the Petitions’’ section below). 

Scope of Investigations 

The products covered by these 

investigations are magnesia carbon 

bricks from the PRC and Mexico. For a 

full description of the scope of the 

investigations, please see the ‘‘Scope of 

Investigations,’’ in Appendix I of this 

notice. 

Comments on Scope of Investigations 

During our review of the Petitions, we 

discussed the scope with Petitioner 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 

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 September 8, 2009.1

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. 

Comments on Product Characteristics 

for Antidumping Duty Questionnaires 

We are requesting comments from 

interested parties regarding the 

appropriate physical characteristics of 

magnesia carbon bricks 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 magnesia 

carbon bricks, it may be that only a 

select few product characteristics take 

into account commercially meaningful 

physical characteristics. In addition, 

interested parties may comment on the 

order in which the physical 

characteristics should be used in 

product matching. 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 September 8, 2009. 

Additionally, rebuttal comments must 

be received by September 15, 2009. 

Determination of Industry Support for 

the Petitions 

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 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 (see 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 (Ct. 

Int’l Trade 2001), citing Algoma Steel 

Corp., Ltd. v. United States, 688 F. 

Supp. 639, 644 (Ct. Int’l Trade 1988), 

aff’d 865 F.2d 240 (Fed. Cir. 1989), cert. 

denied 492 U.S. 919 (1989). 

Section 771(10) of the Act defines the 

domestic like product as ‘‘a product 

which is like, or in the absence of like, 

most similar in characteristics and uses 

with, the article subject to an 

investigation under this title.’’ Thus, the 

reference point from which the 

domestic like product analysis begins is 

‘‘the article subject to an investigation’’ 

(i.e., the class or kind of merchandise to 

be investigated, which normally will be 

the scope as defined in the petition). 

With regard to the domestic like 

product, Petitioner does not offer a 

definition of domestic like product 

distinct from the scope of the 

investigations. Based on our analysis of 

the information submitted on the 

record, we have determined that 

magnesia carbon bricks constitute a 

single domestic like product and we 

have analyzed industry support in terms 


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of that domestic like product. For a 

discussion of the domestic like product 

analysis in this case, see Antidumping 

Duty Investigation Initiation Checklist: 

Magnesia Carbon Bricks from the PRC 

(‘‘PRC Initiation Checklist’’) at 

Attachment II, Analysis of Industry 

Support for the Petitions Covering 

Certain Magnesia Carbon Bricks from 

the People’s Republic of China and 

Mexico, and Antidumping Duty 

Investigation Initiation Checklist: 

Magnesia Carbon Bricks from Mexico 

(‘‘Mexico Initiation Checklist’’) at 

Attachment II, Analysis of Industry 

Support for the Petitions Covering 

Certain Magnesia Carbon Bricks from 

the People’s Republic of China and 

Mexico, dated concurrently with this 

notice and on file in the Central Records 

Unit (‘‘CRU’’), Room 1117 of the main 

Department of Commerce building. 

In determining whether Petitioner has 

standing under section 732(c)(4)(A) of 

the Act, we considered the industry 

support data contained in the Petitions 

with reference to the domestic like 

product as defined in the ‘‘Scope of 

Investigations’’, in Appendix I of this 

notice. To establish industry support, 

Petitioner provided its own 2008 

production of the domestic like product, 

as well as the production of the two 

supporters of the Petitions, and 

compared this to the estimated total 

production of the domestic like product 

for the entire domestic industry. See 

Petitions, at Exhibits 2–4, Supplement 

to the AD PRC Petition, Supplement to 

the AD Mexico Petition, dated August 

10, 2009, at 8–12, and Exhibits R2–R– 

6, Second Supplement to the AD PRC 

Petition, and Second Supplement to the 

AD Mexico Petition, dated August 14, 

2009, at 1–2. Petitioner estimated total 

2008 production of the domestic like 

product based on its own production 

data, data from the two supporters of the 

Petitions, and knowledge of the U.S. 

industry. See Petitions, at Exhibits 2–4, 

Supplement to the AD PRC Petition, 

Supplement to the AD Mexico Petition, 

dated August 10, 2009, at 8–12, and 

Exhibits R2–R–6, Second Supplement to 

the AD PRC Petition, and Second 

Supplement to the AD Mexico Petition, 

dated August 14, 2009, at 1–2; see also 

PRC Initiation Checklist at Attachment 

II, and Mexico Initiation Checklist at 

Attachment II. 

Our review of the data provided in the 

Petitions, supplemental submissions, 

and other information readily available 

to the Department indicates that 

Petitioner has established industry 

support. First, the Petitions established 

support from domestic producers (or 

workers) accounting for more than 50 

percent of the total production of the 

domestic like product 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 

PRC Initiation Checklist at Attachment 

II, and Mexico 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 Petitions 

account for at least 25 percent of the 

total production of the domestic like 

product. See PRC Initiation Checklist at 

Attachment II, and Mexico 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 Petitions 

account for more than 50 percent of the 

production of the domestic like product 

produced by that portion of the industry 

expressing support for, or opposition to, 

the Petitions. Accordingly, the 

Department determines that the 

Petitions were filed on behalf of the 

domestic industry within the meaning 

of section 732(b)(1) of the Act. See id. 

The Department finds that Petitioner 

filed the Petitions on behalf of the 

domestic industry because it is an 

interested party as defined in section 

771(9)(C) of the Act and it has 

demonstrated sufficient industry 

support with respect to the antidumping 

duty investigations that it is requesting 

the Department initiate. See id. 

Allegations and Evidence of Material 

Injury and Causation 

Petitioner alleges that the U.S. 

industry producing the domestic like 

product is being materially injured, or is 

threatened with material injury, by 

reason of the imports of the subject 

merchandise sold at less than normal 

value (‘‘NV’’). In addition, Petitioner 

alleges that subject imports exceed the 

negligibility threshold provided for 

under section 771(24)(A) of the Act. 

Petitioner contends that the industry’s 

injured condition is illustrated by 

reduced market share, underselling and 

price depressing and suppressing 

effects, increased import penetration, 

lost sales and revenue, reduced 

production, reduced capacity 

utilization, reduced shipments, reduced 

employment, and overall poor 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 PRC 

Initiation Checklist at Attachment III, 

Analysis of Allegations and Evidence of 

Material Injury and Causation for the 

Petitions Covering Certain Magnesia 

Carbon Bricks from the People’s 

Republic of China and Mexico, and 

Mexico Initiation Checklist at 

Attachment III, Analysis of Allegations 

and Evidence of Material Injury and 

Causation for the Petitions Covering 

Certain Magnesia Carbon Bricks from 

the People’s Republic of China and 

Mexico. 

Allegations of Sales at Less Than Fair 

Value 

The following is a description of the 

allegations of sales at less than fair value 

upon which the Department based its 

decision to initiate these investigations 

of imports of magnesia carbon bricks 

from the PRC and Mexico. The sources 

of data for the deductions and 

adjustments relating to the U.S. price, 

the factors of production (for the PRC) 

and constructed value (‘‘CV’’) (for 

Mexico) are also discussed in the 

country–specific initiation checklists. 

See PRC Initiation Checklist and Mexico 

Initiation Checklist. 

U.S. Price 

The PRC 

For the PRC, Petitioner calculated 

export price (‘‘EP’’) based on 

documentation of actual sales and offers 

for sale obtained from a confidential 

source. See PRC Initiation Checklist; see 

also AD PRC Petition at Exhibit 11, and 

Second Supplement to the AD PRC 

Petition, dated August 14, 2009, at 4. 

Petitioner made adjustments for 

distributor mark–ups, international 

freight and U.S. movement expenses. 

See PRC Initiation Checklist; see also 

Second Supplement to the AD PRC 

Petition, at Exhibit R–11. 

Mexico 

For Mexico, Petitioner based U.S. 

price on POI prices of magnesia carbon 

bricks produced by the Mexican 

manufacturer RHI–Refmex S.A. de C.V. 

(‘‘RHI–Refmex’’). Petitioner 

substantiated the U.S. prices used with 

affidavits from persons who obtained 

the information. Petitioner believes that 

these prices include selling expenses 

incurred by RHI–Refmex’s U.S. affiliate 

but conservatively assumed such 

expenses to be zero in its calculation of 

net U.S. price. Petitioner deducted, 

where appropriate, freight expenses 

(U.S. inland freight), but made no other 

adjustments. See Mexico Initiation 

Checklist; see also AD Mexico Petition 


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at 15, Supplement to the AD Mexico 

Petition, at 21 and Exhibits R–8, R–10 

and R–11, and Second Supplement to 

the AD Mexico Petition, at 3. 

Normal Value 

The PRC 

Petitioner states that the PRC is a 

non–market economy (‘‘NME’’) country 

and no determination to the contrary 

has been made by the Department. See 

AD PRC Petition, at 14. 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 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. 

Petitioner contends 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; and 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 AD PRC Petition 

at 14–16, and Exhibit 10. Based on the 

information provided by Petitioner, 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. 

Petitioner 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. Petitioner 

calculated NV based on its own 

consumption rates for producing 

magnesia carbon bricks in 2008. See AD 

PRC Petition at 17, and Exhibit 12. In 

calculating NV, Petitioner based the 

quantity of each of the inputs used to 

manufacture and pack magnesia carbon 

bricks in the PRC on its own industry 

knowledge and production experience 

during the POI. See AD PRC Petition at 

17, and Exhibit 12. Petitioner states that 

the actual usage rates of the foreign 

manufacturers of magnesia carbon 

bricks are not reasonably available; 

however, Petitioner notes that to the 

best of Petitioner’s knowledge, the 

production of magnesia carbon bricks in 

China relies on similar basic 

manufacturing processes as in the 

United States. See AD PRC Petition at 

17. 

Petitioner determined the 

consumption quantities of all raw 

materials and packing materials based 

on its own production experience. See 

AD PRC Petition at 17, and Exhibit 12. 

Petitioner valued the factors of 

production based on reasonably 

available, public surrogate country data, 

specifically, Indian import statistics 

from the World Trade Atlas (‘‘WTA’’). 

See Supplement to the AD PRC Petition, 

at Exhibit R–8. Petitioner 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 

Petitioner 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 PRC 

Petition, at 16 and Exhibit R–8. 

Petitioner determined labor costs using 

the labor consumption, in hours, 

derived from its own experience. See 

AD PRC Petition at Exhibit 12. 

Petitioner valued labor costs using the 

Department’s NME Wage Rate for the 

PRC at http://ia.ita.doc.gov/wages/ 

05wages/05wages–051608.html. See 

Supplement to the AD PRC Petition, at 

Exhibit R–8. For purposes of initiation, 

the Department determines that the 

surrogate values used by Petitioner are 

reasonably available and, thus, 

acceptable for purposes of initiation. 

Petitioner determined electricity costs 

using the electricity consumption, in 

kilowatt hours, derived from its own 

experience. See AD PRC Petition at 

Exhibit 12. Petitioner valued electricity 

using the Indian electricity rate reported 

by the Central Electric Authority of the 

Government of India. See Supplement 

to the AD PRC Petition, at 16 and 

Exhibit R–8. 

Petitioner determined natural gas 

costs using the natural gas consumption 

derived from its own experience. See 

AD PRC Petition at Exhibit 12. 

Petitioner valued natural gas using 

Indian import statistics from WTA. See 

Supplement to the AD PRC Petition, at 

Exhibit R–8. 

Petitioner based factory overhead, 

selling, general and administrative 

(‘‘SG&A’’), and profit on data from IFGL 

Refractories Ltd. (‘‘IFGL’’), a producer of 

refractory products, for the fiscal year 

April 2007 through March 2008. See AD 

PRC Petition at Exhibit 13. Petitioner 

states that, as a manufacturer of non– 

subject products within the same 

general category of merchandise as 

magnesia carbon bricks, IFGL’s main 

operation in India can be considered a 

reasonable surrogate. See Supplement to 

the AD PRC Petition, at 17–18. 

Therefore, for purposes of the initiation, 

the Department finds Petitioner’s use of 

IFGL’s unconsolidated financial ratios 

appropriate. 

Mexico 

Petitioner calculated NV for magnesia 

carbon bricks using CV because 

Petitioner was unable to obtain home 

market or third country prices. See AD 

Mexico Petition at 13. 

Pursuant to section 773(e) of the Act, 

CV consists of the cost of manufacturing 

(‘‘COM’’), SG&A expenses, packing 

expenses, and profit. In calculating 

COM and packing, Petitioner based the 

quantity of each of the inputs used to 

manufacture and pack magnesia carbon 

bricks in Mexico on its own production 

experience during 2008. See AD Mexico 

Petition at 14, and Exhibits 9 and 11, 

Supplement to the AD Mexico Petition, 

at Exhibit R–9, and Second Supplement 

to the AD Mexico Petition, at Exhibit R– 

14. Petitioner notes that, to the best of 

its knowledge, the magnesia carbon 

bricks manufacturing process in Mexico 

is very similar to its magnesia carbon 

bricks manufacturing process. 

Accordingly, Petitioner states that it is 

reasonable to estimate the Mexican 

producer’s usage rates based on its own 

usage rates experienced in producing 

magnesia carbon bricks. Petitioner also 

states that certain ‘‘brands’’ (i.e., 

models) of RHI–Refmex’s magnesia 

carbon bricks are identical or very 

similar to its corresponding brands in 

terms of quantity and type of raw 

materials used, energy consumed, and 

the composition of the finished product. 

See AD Mexico Petition at 14 and 15, 

and Supplement to the AD Mexico 

Petition, at 14 and Exhibit R–9. 

Petitioner multiplied the usage 

quantities of the inputs used to 

manufacture and pack magnesia carbon 

bricks by the Mexican values of those 

inputs based on publicly available data. 

See AD Mexico Petition, at 15 and 

Exhibit 10, Supplement to the AD 

Mexico Petition, at Exhibit R–8, and 


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Second Supplement to the AD Mexico 

Petition, at Exhibit R–14. 

Raw materials (e.g., magnesite) are 

significant inputs used in the 

production of magnesia carbon bricks. 

Petitioner determined the consumption 

quantities of all raw materials and 

packing materials based on its own 

production experience. See AD Mexico 

Petition, at 14, and Exhibits 9 and 11, 

and Supplement to the AD Mexico 

Petition, at Exhibit R–9. Petitioner 

valued all raw materials and packing 

materials using Mexican import 

statistics as reflected in the WTA data 

for the period from June 2008 through 

May 2009, the most recent data 

available. Petitioner excluded from 

these import statistics imports from 

countries previously determined by the 

Department to be NME countries and 

from India, 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 AD Mexico 

Petition at Exhibit 10, and Supplement 

to the AD Mexico Petition, at Exhibit R– 

8. 

Petitioner determined labor costs 

using the labor consumption in hours 

derived from its own experience. 

Petitioner relied on Mexican wage rate 

data available from the Import 

Administration website at http:// 

ia.ita.doc.gov/wages to determine the 

average wage rate in Mexico. See AD 

Mexico Petition at 15, and Supplement 

to the AD Mexico Petition, at 17. 

Petitioner determined the costs of 

electricity and natural gas using 

consumption amounts derived from its 

own experience. Petitioner valued 

electricity using the POI Mexican 

electricity rates for medium–sized 

enterprises reported by the Mexico 

Secretary of Energy at http:// 

www.sener.gob.mx. Petitioner converted 

the Mexican electricity rates into U.S. 

dollars using the Department’s POI 

exchange rates. Petitioner valued 

natural gas using Mexican import 

statistics as reflected in the WTA data 

for the period from June 2008 through 

May 2009, the most recent data 

available. See AD Mexico Petition at 

Exhibit 10, and Supplement to the AD 

Mexico Petition, at 18 and Exhibit R–8. 

To calculate factory overhead, SG&A 

expenses, and profit, Petitioner relied 

on the financial statements of a Mexican 

producer of ceramic products, Grupo 

Lamosa, S.A.B. de C.V., a company that 

produces products in the same general 

category of merchandise as magnesia 

carbon bricks. See Supplement to the 

AD Mexico Petition, at Exhibit R–8, and 

Second Supplement to the AD Mexico 

Petition, at Exhibit R–13. See also 

Mexico Initiation Checklist. 

Fair–Value Comparisons 

Based on the data provided by 

Petitioner, there is reason to believe that 

imports of magnesia carbon bricks from 

the PRC and Mexico 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 magnesia carbon 

bricks from the PRC range from 112 

percent to 349 percent. See PRC 

Initiation Checklist. Based on a 

comparison of U.S. price and CV 

calculated in accordance with section 

773(a)(4) of the Act, the estimated 

dumping margins for magnesia carbon 

bricks from Mexico range from 153 

percent to 295 percent. See Mexico 

Initiation Checklist; see also 

Supplement to the AD Mexico Petition, 

at Exhibit R–10, and Second 

Supplement to the AD Mexico Petition, 

at Exhibit R–14 and R–15. 

Initiation of Antidumping 

Investigations 

Based upon the examination of the 

Petitions on magnesia carbon bricks 

from the PRC and Mexico, the 

Department finds that the Petitions meet 

the requirements of section 732 of the 

Act. Therefore, we are initiating 

antidumping duty investigations to 

determine whether imports of magnesia 

carbon bricks from the PRC and Mexico 

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 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 any of 

these investigations 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 

country–specific preliminary 

determination. 

Respondent Selection 

The PRC 

For this investigation, the Department 

will request quantity and value 

information from all known exporters 

and producers identified with complete 

contact information in the AD PRC 

Petition. 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 September 10, 2009. Also, 

the Department will send the quantity 

and value questionnaire to those PRC 

companies identified in the AD PRC 

Petition, at Exhibit 9. 

Mexico 

For this investigation, the Department 

intends to select respondents based on 

U.S. Customs and Border Protection 

(‘‘CBP’’) data for U.S. imports under the 

Harmonized Tariff Schedule of the 

United States (‘‘HTSUS’’) numbers 

6902.10.10.00 and 6902.10.50.00, the 

two HTSUS categories most specific to 

the subject merchandise, during the 

POI. We intend to release the CBP data 

under Administrative Protective Order 

(‘‘APO’’) to all parties with access to 

information protected by APO within 

five days of publication of this Federal 

Register notice and make our decision 

regarding respondent selection within 


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Federal Register / Vol. 74, No. 163 / Tuesday, August 25, 2009 / Notices 42857 

20 days of publication of this notice. 

The Department invites comments 

regarding the CBP data and respondent 

selection within ten days of publication 

of this Federal Register notice. 

Interested parties must submit 

applications for disclosure under APO 

in accordance with 19 CFR 351.305. 

Instructions for filing such applications 

may be found on the Department’s 

website at http://ia.ita.doc.gov/apo. 

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. 

The quantity and value questionnaire 

will be available on the Department’s 

website at http://ia.ita.doc.gov/ia– 

highlights-and–news.html on the date of 

the publication of this initiation notice 

in the Federal Register. 

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 Petitions 

In accordance with section 

732(b)(3)(A) of the Act and 19 CFR 

351.202(f), copies of the public versions 

of the Petitions have been provided to 

the representatives of the Governments 

of the PRC and Mexico. Because of the 

large number of producers/exporters 

identified in the AD PRC Petition, the 

Department considers the service of the 

public version of the AD PRC 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 September 14, 2009, 

whether there is a reasonable indication 

that imports of magnesia carbon bricks 

from the PRC and Mexico are materially 

injuring, or threatening material injury 

to a U.S. industry. A negative ITC 

determination with respect to any 

country will result in the investigation 

being terminated for that country; 

otherwise, these investigations will 

proceed according to statutory and 

regulatory time limits. 

This notice is issued and published 

pursuant to section 777(i) of the Act. 

Dated: August 18, 2009. 

Carole Showers, 

Acting Deputy Assistant Secretary for Policy 

and Negotiations. 

Appendix I 

Scope of the Investigations 

Imports covered by this petition 

consist of certain chemically bonded 

(resin or pitch), magnesia carbon bricks 

with a magnesia component of at least 

70 percent magnesia (‘‘MgO’’) by 

weight, regardless of the source of raw 

materials for the MgO, with carbon 

levels ranging from trace amounts to 30 

percent by weight, regardless of 

enhancements, (for example, magnesia 

carbon bricks can be enhanced with 

coating, grinding, tar impregnation or 

coking, high temperature heat 

treatments, anti–slip treatments or metal 

casing) and regardless of whether or not 

anti–oxidants are present (for example, 

antioxidants can be added to the mix 

from trace amounts to 15 percent by 

weight as various metals, metal alloys, 

and metal carbides). Certain magnesia 

carbon bricks that are the subject of this 

investigation are currently classifiable 

under subheadings 6902.10.10.00, 

6902.10.50.00, 6815.91.00.00, and 

6815.99 of the Harmonized Tariff 

Schedule of the United States (HTSUS). 

While HTSUS subheadings are provided 

for convenience and customs purposes, 

the written description is dispositive. 

[FR Doc. E9–20494 Filed 8–24–09; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[C–533–821] 

Hot–Rolled Carbon Steel Products 

from India: Extension of Time Limit for 

Preliminary Results of Countervailing 

Duty Administrative Review 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

FOR FURTHER INFORMATION CONTACT: 

Gayle Longest, AD/CVD Operations, 


pwalker on DSK8KYBLC1PROD with NOTICES
42858 Federal Register / Vol. 74, No. 163 / Tuesday, August 25, 2009 / Notices 

1September 8, 2009 is the first business day after 

twenty calendar days from the signature date of this 

notice. 

Office 3, Import Administration, 

International Trade Administration, 

U.S. Department of Commerce, Room 

4014, 14th Street and Constitution Ave., 

NW, Washington, DC 20230, telephone: 

(202) 482–3338. 

SUPPLEMENTARY INFORMATION: 

Background 

On February 2, 2009, the U.S. 

Department of Commerce (‘‘the 

Department’’) published a notice of 

initiation of the administrative review of 

the countervailing duty order on hot– 

rolled carbon steel products from India 

covering the period January 1, 2008, 

through December 31, 2008. See 

Initiation of Antidumping and 

Countervailing Duty Administrative 

Reviews and Request for Revocation in 

Part, 74 FR 5821 (February 2, 2009). The 

preliminary results are currently due no 

later than September 2, 2009. 

Extension of Time Limit for Preliminary 

Results 

Section 751(a)(3)(A) of the Tariff Act 

of 1930, as amended (‘‘the Act’’), 

requires the Department to make a 

preliminary determination within 245 

days after the last day of the anniversary 

month of an order for which a review 

is requested. Section 751(a)(3)(A) of the 

Act further states that if it is not 

practicable to complete the review 

within the time period specified, the 

administering authority may extend the 

245-day period to issue its preliminary 

results to up to 365 days. 

Due to the complexity of the issues in 

this administrative review, such as the 

number of programs under review 

during the POR, we have determined 

that it is not practicable to complete the 

preliminary results within the 245-day 

period. Therefore, in accordance with 

section 751(a)(3)(A) of the Act, we are 

extending the time period for issuing 

the preliminary results of the review by 

120 days. The preliminary results are 

now due no later than December 31, 

2009. The final results continue to be 

due 120 days after publication of the 

preliminary results. 

This notice is issued and published in 

accordance with section 751(a)(3)(A) of 

the Act. 

Dated: August 19, 2009. 

John M. Andersen, 

Acting Deputy Assistant Secretary for 

Antidumping and Countervailing Duty 

Operations. 

[FR Doc. E9–20501 Filed 8–24–09; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[C–570–955] 

Certain Magnesia Carbon Bricks from 

the People’s Republic of China: 

Initiation of Countervailing Duty 

Investigation 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce 

DATES: Effective Date: August 25, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Justin Neuman, Toni Page, or Nicholas 

Czajkowski; AD/CVD Operations, Office 

6, Import Administration, International 

Trade Administration, U.S. Department 

of Commerce, 14th Street and 

Constitution Avenue NW, Washington, 

D.C. 20230; telephone: (202) 482–0486, 

(202) 482–1398, or (202) 482–1395 

respectively. 

SUPPLEMENTARY INFORMATION: 

The Petitions 

On July 29, 2009, the Department of 

Commerce (the Department) received 

countervailing duty (CVD) and 

antidumping (AD) petitions concerning 

imports of certain magnesia carbon 

bricks (magnesia carbon bricks) from the 

People’s Republic of China (PRC) filed 

in proper form by Resco Products, Inc. 

(Petitioner), domestic producers of 

magnesia carbon bricks. See ‘‘Petition 

for the Imposition of Countervailing 

Duties: Certain Magnesia Carbon Bricks 

from the People’s Republic of China’’ 

(CVD PRC Petition). On August 3, 2009, 

the Department spoke via telephone 

with petitioner to request additional 

information and clarification of certain 

areas of the CVD petition involving 

countervailable subsidy allegations. See 

Memorandum from Mark Hoadley, 

Program Manager, AD/CVD Operations, 

Office 6, to the File, ‘‘CVD Petition for 

Investigation of Magnesia Carbon Bricks 

from the People’s Republic of China 

(PRC): Phone Call with Counsel for 

Petitioner’’ dated August 4, 2009. Based 

on the Department’s requests, the 

Petitioner timely filed additional 

information on August 7, 2009. On 

August 4 and 12, 2009, the Department 

issued additional requests for 

information and clarification of certain 

areas of the CVD PRC Petition. Based on 

the Department’s requests, Petitioner 

timely filed additional information 

pertaining to the CVD PRC Petition on 

August 10 and 14, 2009, (hereinafter, 

Supplement to the CVD PRC Petition 

dated August 10, 2009 and Second 

Supplement to the CVD PRC Petition, 

dated August 14, 2009). 

In accordance with section 702(b)(1) 

of the Tariff Act of 1930, as amended 

(the Act), Petitioner alleges that 

producers/exporters of magnesia carbon 

bricks in the PRC received 

countervailable subsidies within the 

meaning of section 701 and 771(5) of the 

Act, and that imports from these 

exporters/producers materially injure, 

or threaten material injury to, an 

industry in the United States. 

The Department finds that Petitioner 

filed this CVD PRC Petition on behalf of 

the domestic industry because it is an 

interested party as defined in section 

771(9)(C) of the Act, and Petitioner has 

demonstrated sufficient industry 

support with respect to the 

countervailing duty investigation that it 

is requesting the Department to initiate 

(see ‘‘Determination of Industry Support 

for the CVD Petition’’ below). 

Period of Investigation 

The anticipated period of 

investigation (POI) is calendar year 

2008. See 19 CFR 351.204(b)(2). 

Scope of Investigation 

The products covered by this 

investigation are magnesia carbon bricks 

from the PRC. For a full description of 

the scope of the investigation, please see 

the ‘‘Scope of Investigation’’ in 

Appendix I to this notice. 

Comments on Scope of Investigation 

During our review of the CVD PRC 

Petition, we discussed the scope with 

Petitioner 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 regulations (See 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 

September 8, 2009.1 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. 


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Consultations 

Pursuant to section 702(b)(4)(A)(ii) of 

the Act, the Department held 

consultations with the government of 

the PRC (hereinafter, the GOC) with 

respect to the CVD PRC Petition on 

August 7, 2009. See Memorandum to 

the File, Countervailing Duty Petitions 

on Certain Magnesia Carbon Bricks from 

the People’s Republic of China: 

Consultations with the Government of 

the People’s Republic of China, on file 

in the Central Records Unit (CRU), 

Room 1117 of the main Department of 

Commerce building. 

Determination of Industry Support for 

the CVD 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 United 

States 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 (see 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 (Ct. 

Int’l Trade 2001), citing Algoma Steel 

Corp. Ltd. v. United States, 688 F. Supp. 

639, 644 (Ct. Int’l Trade 1988), aff’d 865 

F.2d 240 (Fed. Cir. 1989), cert. denied 

492 U.S. 919 (1989). 

Section 771(10) of the Act defines the 

domestic like product as ‘‘a product 

which is like, or in the absence of like, 

most similar in characteristics and uses 

with, the article subject to an 

investigation under this title.’’ Thus, the 

reference point from which the 

domestic like product analysis begins is 

‘‘the article subject to an investigation’’ 

(i.e., the class or kind of merchandise to 

be investigated, which normally will be 

the scope as defined in the petition). 

With regard to the domestic like 

product, Petitioner does not offer a 

definition of domestic like product 

distinct from the scope of the 

investigations. Based on our analysis of 

the information submitted on the 

record, we have determined that 

magnesia carbon bricks constitute a 

single domestic like product and we 

have analyzed industry support in terms 

of that domestic like product. For a 

discussion of the domestic like product 

analysis in this case, see Countervailing 

Duty Investigation Initiation Checklist: 

Magnesia Carbon Bricks from the PRC 

(CVD Initiation Checklist) at Attachment 

II, Analysis of Industry Support for the 

Petitions Covering Certain Magnesia 

Carbon Bricks from the People’s 

Republic of China and Mexico, dated 

concurrently with this notice and on file 

in the CRU, Room 1117 of the main 

Department of Commerce building. 

In determining whether Petitioner has 

standing under section 702(c)(4)(A) of 

the Act, we considered the industry 

support data contained in the CVD PRC 

Petition with reference to the domestic 

like product as defined in the ‘‘Scope of 

Investigations,’’ Appendix I of this 

notice. To establish industry support, 

Petitioner provided its own 2008 

production of the domestic like product, 

as well as the production of the two 

supporters of the CVD PRC Petition, and 

compared this to the estimated total 

production of the domestic like product 

for the entire domestic industry. See the 

CVD PRC Petition, at Exhibits 2–4, 

Supplement to the CVD PRC Petition, 

dated August 10, 2009, at 8–12, and 

Exhibits R2–R–6, and Second 

Supplement to the CVD PRC Petition, 

dated August 14, 2009, at 1–2. Petitioner 

estimated total 2008 production of the 

domestic like product based on its own 

production data, data from the two 

supporters of the CVD PRC Petition, and 

knowledge of the U.S. industry. See the 

CVD PRC Petition, at Exhibits 2–4, 

Supplement to the CVD PRC Petition, 

dated August 10, 2009, at 8–12, and 

Exhibits R2–R–6, and Second 

Supplement to the CVD PRC Petition, 

dated August 14, 2009, at 1–2; see also 

CVD Initiation Checklist at Attachment 

II. 

Our review of the data provided in the 

CVD PRC Petition, the supplemental 

submissions, and other information 

readily available to the Department 

indicates that Petitioner has established 

industry support. First, the CVD PRC 

Petition established support from 

domestic producers (or workers) 

accounting for more than 50 percent of 

the total production of the domestic like 

product 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, see also CVD 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 CVD PRC 

Petition account for at least 25 percent 

of the total production of the domestic 

like product. See CVD 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 CVD PRC 

Petition account for more than 50 

percent of the production of the 

domestic like product produced by that 

portion of the industry expressing 

support for, or opposition to, the CVD 

PRC Petition. Accordingly, the 

Department determines that the CVD 

PRC Petition was filed on behalf of the 

domestic industry within the meaning 

of section 702(b)(1) of the Act. See id. 

The Department finds that Petitioner 

filed the CVD PRC Petition on behalf of 

the domestic industry because it is an 

interested party as defined in section 

771(9)(C) of the Act and it has 

demonstrated sufficient industry 

support with respect to the 

countervailing investigation that it is 

requesting the Department to initiate. 

See id. 

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 


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materially injure, or threaten material 

injury to, a U.S. industry. 

Allegations and Evidence of Material 

Injury and Causation 

Petitioner alleges that imports of 

magnesia carbon bricks 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 magnesia carbon bricks. In 

addition, Petitioner alleges that 

subsidized imports exceed the 

negligibility threshold provided for 

under section 771(24)(A) of the Act. 

Petitioner contends that the industry’s 

injured condition is illustrated by 

reduced market share, underselling and 

price depressing and suppressing 

effects, increased import penetration, 

lost sales and revenue, reduced 

production, reduced capacity 

utilization, reduced shipments, reduced 

employment, and overall poor 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 CVD 

Initiation Checklist at Attachment III, 

Analysis of Allegations and Evidence of 

Material Injury and Causation for the 

Petitions Covering Certain Magnesia 

Carbon Bricks from the People’s 

Republic of China and Mexico. 

Initiation of Countervailing Duty 

Investigation 

Section 702(b)(1) of the Act requires 

the Department to initiate a CVD 

proceeding whenever an interested 

party files a CVD 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 petitioners 

supporting the allegations. 

The Department has examined the 

CVD PRC Petition on magnesia carbon 

bricks from the PRC and finds that it 

complies with the requirements of 

section 702(b)(1) of the Act. Therefore, 

in accordance with section 702(b)(1) of 

the Act, we are initiating a CVD 

investigation to determine whether 

producers/exporters of magnesia carbon 

bricks in the PRC receive 

countervailable subsidies. For a 

discussion of evidence supporting our 

initiation determination, see CVD 

Initiation Checklist. 

We are including in our investigation 

the following programs alleged in the 

CVD PRC Petition to provide 

countervailable subsidies to producers/ 

exporters of the subject merchandise: 

A. Provision of Inputs for Less than 

Adequate Remuneration (LTAR) 

1. Provision of Land–Use Rights to 

State–Owned Enterprises (SOEs) for 

LTAR 

2. Provision of Electricity at LTAR 

B. Export Restraints of Raw Materials 

C. Tax Benefit Programs 

1. Two Free/Three Half Program for 

Foreign–Invested Enterprises (FIEs) 

2. Income Tax Reductions for Export– 

Oriented FIEs 

3. Preferential Income Tax Policy for 

Enterprises in the Northeast Region 

4. Forgiveness of Tax Arrears for 

Enterprises in the Old Industrial 

Bases of Northeast China 

5. Location–Based Income Tax 

Reduction Programs for FIEs 

6. Local Income Tax Exemption and 

Reduction Programs for 

‘‘Productive’’ FIEs 

7. Domestic Preference Tax Benefits 

a. Income Tax Credits for 

Domestically Owned Companies 

Purchasing Domestically Produced 

Equipment 

b. Income Tax Credits for FIEs 

Purchasing Domestically Produced 

Equipment 

c. VAT Rebates on Purchases of 

Domestically Produced Equipment 

8. Preferential Tax Programs for 

Enterprises Recognized as High or 

New Technology Enterprises 

D. Northeast Revitalization Program and 

Related Provincial Policies 

a. E. Direct Grants 

1. The State Key Technology 

Renovation Project Fund 

2. Famous Brands Programs 

F. Grants to Companies for ‘‘Outward 

Expansion’’ and Export Performance in 

Guangdong Province 

G. Preferential Loans and Directed 

Credit to the Magnesia Carbon Brick 

Industry 

H. Cash Grant Programs 

1. Fund for Supporting Technological 

Innovation for Technological Smalland Medium–Sized Enterprises 

(SMEs) 

2. Development Fund for SMEs 

3. Fund for International Market 

Exploration by SMEs 

I. Zhejiang Province Program to Rebate 

Antidumping Costs 

For further information explaining 

why the Department is investigating 

these programs, see CVD Initiation 

Checklist. 

We are not including in our 

investigation the following programs 

alleged to benefit producers/exporters of 

the subject merchandise in the PRC: 

A. Provision of Water for Less Than 

Adequate Remuneration 

B. Provision of Natural Gas for Less 

Than Adequate Remuneration 

C. VAT and Tariff Exemptions for 

Purposes of Fixed Assets Under the 

Foreign Trade Development Fund 

Program 

D. Shenzhen City Program to Rebate 

Antidumping Costs 

For further information explaining 

why the Department is not initiating an 

investigation of these programs, see 

CVD Initiation Checklist. 

Respondent Selection 

For this investigation, the Department 

intends to select respondents based on 

U.S. Customs and Border Protection 

(CBP) data for U.S. imports during the 

POI (i.e., calendar year 2008). We intend 

to release the CBP data under 

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 

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 

website at http://ia.ita.doc.gov/apo. 

Distribution of Copies of the CVD 

Petition 

In accordance with section 

702(b)(4)(A)(i) of the Act and 19 CFR 

351.202(f), a copy of the public version 

of the CVD PRC Petition has been 

provided to the representatives of the 

GOC. Because of the particularly large 

number of producers/exporters 

identified in the CVD PRC 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 

GOC, consistent with 19 CFR 

351.203(c)(2). 

ITC Notification 

We have notified the ITC of our 

initiation, as required by section 702(d) 

of the Act. 

Preliminary Determination by the ITC 

The ITC will preliminarily determine, 

within 45 days after the date on which 

the petition was filed, whether there is 

a reasonable indication that imports of 

subsidized magnesia carbon bricks from 

the PRC materially injure, or threaten 

material injury to, a U.S. industry. See 


pwalker on DSK8KYBLC1PROD with NOTICES
Federal Register / Vol. 74, No. 163 / Tuesday, August 25, 2009 / Notices 42861 

section 703(a)(2) of the Act. A negative 

ITC determination will result in the 

investigation being terminated; see 

section 703(a)(1) of the Act. 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. 

Dated: August 18, 2009. 

Carole Showers, 

Acting Deputy Assistant Secretary for Policy 

and Negotiations. 

Appendix I 

Scope of the Investigation 

Imports covered by this petition 

consist of certain chemically bonded 

(resin or pitch), magnesia carbon bricks 

with a magnesia component of at least 

70 percent magnesia (‘‘MgO’’) by 

weight, regardless of the source of raw 

materials for the MgO, with carbon 

levels ranging from trace amounts to 30 

percent by weight, regardless of 

enhancements, (for example, magnesia 

carbon bricks can be enhanced with 

coating, grinding, tar impregnation or 

coking, high temperature heat 

treatments, anti–slip treatments or metal 

casing) and regardless of whether or not 

anti–oxidants are present (for example, 

antioxidants can be added to the mix 

from trace amounts to 15 percent by 

weight as various metals, metal alloys, 

and metal carbides). Certain magnesia 

carbon bricks that are the subject of this 

investigation are currently classifiable 

under subheadings 6902.10.10.00, 

6902.10.50.00, 6815.91.00.00, and 

6815.99 of the Harmonized Tariff 

Schedule of the United States (HTSUS). 

While HTSUS subheadings are provided 

for convenience and customs purposes, 

the written description is dispositive. 

[FR Doc. E9–20493 Filed 8–24–09; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

RIN 0648–XR07 

Endangered Species; File No. 14396 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Notice; receipt of application. 

SUMMARY: Notice is hereby given that 

the Delaware Department of Natural 

Resources and Environmental ControlDivision of Fish and Wildlife, Dover, 

Delaware, has applied in due form for 

a permit to take shortnose sturgeon 

(Acipenser brevirostrum) for purposes 

of scientific research. 

DATES: Written, telefaxed, or e-mail 

comments must be received on or before 

September 24, 2009. 

ADDRESSES: The application and related 

documents are available for review by 

selecting ‘‘Records Open for Public 

Comment’’ from the Features box on the 

Applications and Permits for Protected 

Species (APPS) home page, https:// 

apps.nmfs.noaa.gov/index.cfm, and 

then selecting File No. 14396 from the 

list of available applications. These 

documents are also available for review 

upon written request or by appointment 

in the following office(s): 

Permits, Conservation and Education 

Division, Office of Protected Resources, 

NMFS, 1315 East-West Highway, Room 

13705, Silver Spring, MD 20910; phone 

(301)713–2289; fax (301)713–0376; and 

Northeast Region, NMFS, Protected 

Resources Division, 55 Great Republic 

Drive, Gloucester, MA 01930; phone 

(978)281–9300; fax (978)281–9333. 

Written comments or requests for a 

public hearing on this application 

should be mailed to the Chief, Permits, 

Conservation and Education Division, 

F/PR1, Office of Protected Resources, 

NMFS, 1315 East-West Highway, Room 

13705, Silver Spring, MD 20910. Those 

individuals requesting a hearing should 

set forth the specific reasons why a 

hearing on this particular request would 

be appropriate. 

Comments may also be submitted by 

facsimile at (301)713–0376, provided 

the facsimile is confirmed by hard copy 

submitted by mail and postmarked no 

later than the closing date of the 

comment period. 

Comments may also be submitted by 

e-mail. The mailbox address for 

providing e-mail comments is 

NMFS.Pr1Comments@noaa.gov. Include 

in the subject line of the e-mail 

comment the following document 

identifier: File No. 14396. 

FOR FURTHER INFORMATION CONTACT: 

Malcolm Mohead or Kate Swails, 

(301)713–2289. 

SUPPLEMENTARY INFORMATION: The 

subject permit is requested under the 

authority of the Endangered Species Act 

of 1973, as amended (ESA; 16 U.S.C. 

1531 et seq.), and the regulations 

governing the taking, importing, and 

exporting of endangered and threatened 

species (50 CFR 222–226). 

The applicant is seeking a five-year 

scientific research permit to conduct a 

study of shortnose sturgeon in the 

Delaware River. The primary study 

objective would be to locate and 

document nursery areas, individual 

movement patterns, seasonal 

movements, home ranges, and habitats 

of juvenile shortnose sturgeon through 

the use of telemetry. This focus would 

be in association with an ongoing 

Atlantic sturgeon (Acipenser oxyrinchus 

oxyrhinchus) study with similar 

objectives. Up to 200 shortnose sturgeon 

would be weighed, measured, examined 

for tags, marked with Passive Integrated 

Transponder (PIT) tags and Floy tags, 

and released. Up to 15 early stage 

juvenile shortnose sturgeon would also 

be anesthetized and implanted with 

acoustic transmitters if they are of 

suitable size. A total of one 

unintentional mortality is requested 

over the five year term of the project 

which is scheduled to take place from 

March 1 to December 15. 

Dated: August 19, 2009. 

P. Michael Payne, 

Chief, Permits, Conservation and Education 

Division, Office of Protected Resources, 

National Marine Fisheries Service. 

[FR Doc. E9–20491 Filed 8–24–09; 8:45 am] 

BILLING CODE 3510–22–S 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

RIN 0648–XQ20 

Incidental Takes of Marine Mammals 

During Specified Activities; Marine 

Geophysical Survey in the Northeast 

Pacific Ocean, August–October, 2009 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Notice; issuance of incidental 

take authorization. 

SUMMARY: In accordance with the 

Marine Mammal Protection Act 

(MMPA) regulations, notification is 

hereby given that NMFS has issued an 

Incidental Harassment Authorization 

(IHA) to Lamont-Doherty Earth 

Observatory (L-DEO), a part of Columbia 

University, to take small numbers of 

marine mammals, by Level B 

harassment only, incidental to 

conducting a marine seismic survey in 

the northeast Pacific Ocean. 

DATES: Effective August 19, 2009 

through October 13, 2009. 

ADDRESSES: A copy of the IHA and the 

application are available by writing to P. 

Michael Payne, Chief, Permits, 

Conservation and Education Division, 

Office of Protected Resources, National 

Marine Fisheries Service, 1315 EastWest Highway, Silver Spring, MD 

20910–3225 or by telephoning the 


pwalker on DSK8KYBLC1PROD 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 held in connection with the following investigations:

 Subject: Certain Magnesia Carbon Bricks from China and Mexico

 Investigation No.: 701-TA-468 & 731-TA-1166-1167 (Preliminary)

 Date and Time: August 19, 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 Antidumping and Countervailing Duties:

Doyle, Barlow & Mazard

Washington, DC

on behalf of

Resco Products, Inc.

William K. Brown, President and CEO, Resco Products, Inc.

Richard W. Copp, Vice President of Sales and Marketing, Resco Products, Inc.

Tim Powell, Vice President of Finance and Chief Financial Officer, Resco Products, Inc.

John Castilano, Chief Operating Officer, Resco Products, Inc. 

Dr. Patrick J. Magrath, Georgetown Economic Services

Camelia Mazard - OF COUNSEL

Andre P. Barlow

Robert W. Doyle, Jr.

In Opposition to the Imposition of Antidumping and Countervailing Duties:

Garvey, Schubert, Barer

Washington, DC

on behalf of

Fedmet Resources Corp.

S&S Intersource, LLC

James Conrad, Vice President of Refractory Technology, Fedmet Resources

Brian J. Stein, President, S&S Intersource

Joseph Stein, President, S&S Intersource

Lizbeth R. Levinson - OF COUNSEL

Ronald M. Wisla
B-4

In Opposition to the Imposition of Antidumping and Countervailing Duties:–Continued

Squire, Sanders & Dempsey

Washington, DC

on behalf of

RHI-Refmex S.A. de C.V.

RHI Refractories Liaoning Co. Ltd.

Veitsch-Radex America, Inc.

Ritchie T. Thomas - OF COUNSEL

Peter J. Koenig

Troutman Sanders

Washington, DC

on behalf of

Vesuvius USA Corp.

Yingkou Bayuquan Refractories Co. Ltd.

Julie C. Mendoza - OF COUNSEL

Donald B. Cameron

R. Will Planert

Mary S. Hodgins
C-1

APPENDIX C

SUMMARY DATA

C-3

Table C-1

MCB: Summary data concerning the U.S. market, 2006-08, January-June 2008, and January-June 2009

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton; period changes=percent, except where noted)

Reported data Period changes

January-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 . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Mexico . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Subtotal . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 All other sources . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Total imports . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

U.S. consumption value:

 Amount . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Producers' share (1) . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Importers' share (1):

 China . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Mexico . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Subtotal . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 All other sources . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Total imports . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

U.S. shipments of imports from:

 China:

 Quantity . . . . . . . . . . . . . . . . . . 32,976 36,184 42,072 26,899 15,682 27.6 9.7 16.3 -41.7

 Value . . . . . . . . . . . . . . . . . . . . 25,460 30,057 37,905 23,323 15,329 48.9 18.1 26.1 -34.3

 Unit value . . . . . . . . . . . . . . . . . $772 $831 $901 $867 $978 16.7 7.6 8.5 12.7

 Ending inventory quantity . . . . 24,279 25,373 27,527 24,788 23,029 13.4 4.5 8.5 -7.1

 Mexico:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** ***

 Subtotal:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** ***

 All other sources:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** ***

 All sources:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** ***

Table continued on next page.
C-4

Table C-1--Continued

MCB: Summary data concerning the U.S. market, 2006-08, January-June 2008, and January-June 2009

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton; period changes=percent, except where noted)

Reported data Period changes

January-June Jan.-June

Item 2006 2007 2008 2008 2009 2006-08 2006-07 2007-08 2008-09

U.S. producers':

 Average capacity quantity . . . . . 160,903 160,903 160,903 80,451 80,451 0.0 0.0 0.0 0.0

 Production quantity . . . . . . . . . . 72,895 71,125 70,441 40,633 17,412 -3.4 -2.4 -1.0 -57.1

 Capacity utilization (1) . . . . . . . . 45.3 44.2 43.8 50.5 21.6 -1.5 -1.1 -0.4 -28.9

 U.S. shipments:

 Quantity . . . . . . . . . . . . . . . . . . 59,181 58,074 62,470 35,111 16,284 5.6 -1.9 7.6 -53.6

 Value . . . . . . . . . . . . . . . . . . . . 61,937 62,549 76,558 41,284 21,251 23.6 1.0 22.4 -48.5

 Unit value . . . . . . . . . . . . . . . . . $1,047 $1,077 $1,226 $1,176 $1,305 17.1 2.9 13.8 11.0

 Export shipments:

 Quantity . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Value . . . . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Unit value . . . . . . . . . . . . . . . . . *** *** *** *** *** *** *** *** ***

 Ending inventory quantity . . . . . . 8,754 7,528 6,838 7,865 6,231 -21.9 -14.0 -9.2 -20.8

 Inventories/total shipments (1) . . *** *** *** *** *** *** *** *** ***

 Production workers . . . . . . . . . . 109 110 102 110 78 -6.3 0.9 -7.2 -28.7

 Hours worked (1,000s) . . . . . . . . 226 239 227 122 78 0.4 5.8 -5.0 -36.1

 Wages paid ($1,000s) . . . . . . . . 6,081 6,441 6,420 3,460 2,095 5.6 5.9 -0.3 -39.5

 Hourly wages . . . . . . . . . . . . . . . $26.91 $26.95 $28.28 $28.36 $26.86 5.1 0.2 4.9 -5.3

 Productivity (tons/1,000 hours) . 322.5 297.6 310.3 333.1 223.2 -3.8 -7.7 4.3 -33.0

 Unit labor costs . . . . . . . . . . . . . $83.42 $90.56 $91.14 $85.15 $120.32 9.3 8.6 0.6 41.3

 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 data submitted in response to Commission questionnaires.