[Federal Register Volume 72, Number 43 (Tuesday, March 6, 2007)]
[Notices]
[Pages 9926-9930]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-3890]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-905]


Initiation of Antidumping Duty Investigation: Sodium 
Hexametaphosphate From the People's Republic of China

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce

EFFECTIVE DATE: March 6, 2007.

FOR FURTHER INFORMATION CONTACT: Christopher Riker or Erin Begnal, AD/
CVD Operations, Office 9, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
3441 or (202) 482-1442, respectively.

Initiation of Investigation

The Petition

    On February 8, 2007, the Department of Commerce (``Department'') 
received a petition on imports of sodium hexametaphosphate (``SHMP'') 
from the People's Republic of China (``PRC'') filed in proper form by 
ICL Performance Products, LP and Innophos, Inc. (``Petitioners''). The 
period of investigation (``POI'') is July 1, 2006, through December 31, 
2006.
    In accordance with section 732(b) of the Tariff Act of 1930, as 
amended (``the Act''), Petitioners alleged that imports of SHMP from 
the PRC are being, or are likely to be, sold in the United States at 
less than fair value within the meaning of section 731 of the Act, and 
that such imports are materially injuring and threaten to materially 
injure an industry in the United States. The Department issued 
supplemental questions to Petitioners on February 12, 2007, and 
February 21, 2007. Petitioners filed their responses on February 16, 
2007, and February 23, 2007.

Scope of Investigation

    The merchandise subject to this investigation is Sodium 
hexametaphosphate (``SHMP''). SHMP is a water-soluble polyphosphate 
glass that consists of a distribution of polyphosphate chain lengths. 
It is a collection of sodium polyphosphate polymers built on repeating 
NaPO \3\ units. SHMP has a P \2\ O \5\ content from 60 to 71 percent. 
Alternate names for SHMP include the following: Calgon; Calgon S; 
Glassy Sodium Phosphate; Sodium Polyphosphate, Glassy; Metaphosphoric 
Acid; Sodium Salt; Sodium Acid Metaphosphate; Graham's Salt; Sodium 
Hex; Polyphosphoric Acid, Sodium Salt; Glass H; Hexaphos; Sodaphos; 
Vitrafos; and BAC-N-FOS. SHMP is typically sold as a white powder or 
granule (crushed) and may also be sold in the form of sheets (glass) or 
as a liquid solution. It is imported under heading 2835.39.5000, HTSUS. 
It may also be imported as a blend or mixture under heading 
3823.90.3900, HTSUS. The American Chemical Society, Chemical Abstract 
Service (``CAS'') has assigned the name ``Polyphosphoric Acid, Sodium 
Salt'' to SHMP. The CAS registry number is 68915-31-1. However, SHMP is 
commonly identified by CAS No. 10124-56-8 in the market. For purposes 
of the investigation, the narrative description is dispositive, not the 
tariff heading, CAS registry number or CAS name.
    The product covered by this investigation includes SHMP in all 
grades, whether food grade or technical grade. The product covered by 
this investigation includes SHMP without regard to chain length i.e., 
whether regular or long chain. The product covered by this 
investigation includes SHMP without regard to physical form, whether 
glass, sheet, crushed, granule, powder, fines, or other form.
    However, the product covered by this investigation does not include 
SHMP when imported in a blend with other materials in which the SHMP 
accounts for less than 50 percent by volume of the finished product.

Comments on Scope of Investigation

    During our review of the petition, we discussed the scope with 
Petitioners to ensure that it accurately reflects the product for which 
the domestic industry is seeking relief. Moreover, as discussed in the 
preamble to the Department's regulations, we are setting aside a period 
for interested parties to raise issues regarding product coverage. See 
Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 
27323 (May 19, 1997). The Department encourages all interested parties 
to submit such comments within 20 calendar days of publication of this 
initiation notice. Comments should be addressed to Import 
Administration's Central Records Unit in Room 1870, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230. The period of scope consultations is intended to provide the 
Department with ample opportunity to consider all comments and consult 
with interested parties prior to the issuance of the preliminary 
determination.

Determination of Industry Support for the Petition

    Section 732(b)(1) of the Act requires that a petition be filed by 
an interested party described in subparagraph (C), (D), (E), (F) or (G) 
of section 771(9) of the Act, by or on behalf of the domestic industry. 
In order to determine whether a petition has been filed by or on behalf 
of the domestic industry, the Department, pursuant to section 
732(c)(4)(A) of the Act, determines whether a minimum percentage of the 
relevant industry supports the petition. A petition meets this 
requirement if the domestic producers or workers who support the 
petition account for: (i) At least 25 percent of the total production 
of the domestic like product; and (ii) more than 50 percent of the 
production of the domestic like product produced by that portion of the 
industry expressing support for, or opposition to, the petition. 
Moreover, section 732(c)(4)(D) of the Act provides that, if the 
petition does not establish support of domestic producers or workers 
accounting for more than 50 percent of the total production of the 
domestic like product, the Department shall: (i) Poll the industry or 
rely on other information in order to determine if there is support for 
the petition, as required by subparagraph (A), or (ii) if there is a 
large number of producers in the industry the Department may determine 
industry support using a statistically valid sampling method.

[[Page 9927]]

    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers as a whole of a domestic like product. Thus, to determine 
whether a petition has the requisite industry support, the statute 
directs the Department to look to producers and workers who produce the 
domestic like product. The International Trade Commission (``ITC''), 
which is responsible for determining whether ``the domestic industry'' 
has been injured, must also determine what constitutes a domestic like 
product in order to define the industry. While both the Department and 
the ITC must apply the same statutory definition regarding the domestic 
like product (section 771(10) of the Act), they do so for different 
purposes and pursuant to a separate and distinct authority. In 
addition, the Department's determination is subject to limitations of 
time and information. Although this may result in different definitions 
of the like product, such differences do not render the decision of 
either agency contrary to law. See USEC, Inc. v. United States, 132 F. 
Supp. 2d 1, 8 (CIT 2001), citing Algoma Steel Corp. Ltd. v. United 
States, 688 F. Supp. 639, 644 (1988), aff'd 865 F.2d 240 (Fed. Cir. 
1989), cert. denied 492 U.S. 919 (1989).
    Section 771(10) of the Act defines the ``domestic like product'' as 
``a product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this title.'' Thus, the reference point from which the domestic 
like product analysis begins is ``the article subject to an 
investigation,'' (i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition).
    With regard to the domestic like product, Petitioners do not offer 
a definition of domestic like product distinct from the scope of the 
investigation. Based on our analysis of the information submitted on 
the record, we have determined that SHMP constitutes a single domestic 
like product and we have analyzed industry support in terms of that 
domestic like product. For a discussion of the domestic like product 
analysis in this case, see Antidumping Investigation Initiation 
Checklist: Sodium Hexametaphosphate from the People's Republic of China 
(``PRC'') at Attachment I (``Initiation Checklist''), on file in the 
Central Records Unit, Room B-099 of the main Department of Commerce 
building.
    Our review of the data provided in the petition, supplemental 
submissions, and other information readily available to the Department 
indicates that Petitioners have established industry support 
representing at least 25 percent of the total production of the 
domestic like product, and more than 50 percent of the production of 
the domestic like product produced by that portion of the industry 
expressing support for or opposition to the petition, requiring no 
further action by the Department pursuant to section 732(c)(4)(D) of 
the Act. Therefore, the domestic producers (or workers) who support the 
petition account for at least 25 percent of the total production of the 
domestic like product, and the requirements of section 732(c)(4)(A)(i) 
of the Act are met. Furthermore, the domestic producers who support the 
petition account for more than 50 percent of the production of the 
domestic like product produced by that portion of the industry 
expressing support for, or opposition to, the petition. Thus, the 
requirements of section 732(c)(4)(A)(ii) of the Act also are met. 
Accordingly, the Department determines that the petition was filed on 
behalf of the domestic industry within the meaning of section 732(b)(1) 
of the Act. See Initiation Checklist at Attachment I (Industry 
Support).
    The Department finds that Petitioners filed the petition on behalf 
of the domestic industry because they are an interested party as 
defined in sections 771(9)(C) of the Act and they have demonstrated 
sufficient industry support with respect to the antidumping 
investigation that they are requesting the Department initiate. See 
Initiation Checklist at Attachment I (Industry Support).

Export Price

    Petitioners provided numerous U.S. price quotes for SHMP 
manufactured in the PRC and offered for sale in the United States. 
However, the Department notes that a number of these prices, as quoted, 
were prior to the POI. Therefore, the Department has only examined 
prices within the POI or more contemporaneous. These prices were for 
SHMP within the scope of this Petition, for delivery to the U.S. 
customer within the POI. Petitioners deducted the costs associated with 
exporting and delivering the product, including ocean freight and 
insurance charges, foreign inland freight costs, and foreign brokerage 
and handling from the prices. See Initiation Checklist at 6-7.
    In addition, while Petitioners also calculated margins using a U.S. 
price based on the average unit values (``AUVs'') of imports during the 
POI available from the International Trade Commission for HTSUS 
subheading 2835.39.5000, because adequate pricing information is 
available using the above-detailed price quotations, the Department 
need not address the AUV margin calculations for this initiation, 
consistent with the Department's prior practice. See Notice of 
Initiation of Antidumping Duty Investigation: Tetrahydrofurfuryl 
Alcohol from the People's Republic of China, 68 FR 42686 (July 18, 
2003). However, should the need arise to use any of this information as 
facts available under section 776 of the Act in our preliminary or 
final determinations, we may re-examine the information and revise the 
margin calculations, if appropriate.

Normal Value

    Petitioners stated that the PRC is a non-market economy (``NME'') 
and no determination to the contrary has been made by the Department to 
date. Recently, the Department examined the PRC's market status and 
determined that NME status should continue for the PRC. See Memorandum 
from the Office of Policy to David M. Spooner, Assistant Secretary for 
Import Administration, regarding The People's Republic of China Status 
as a Non-Market Economy (May 15, 2006). In addition, in a recent 
antidumping duty investigation, the Department also determined that the 
PRC is a NME. See, e.g., Notice of Final Determination of Sales at Less 
Than Fair Value and Final Partial Affirmative Determination of Critical 
Circumstances: Diamond Sawblades and Parts Thereof from the People's 
Republic of China, 71 FR 29303 (May 22, 2006).
    In accordance with section 771(18)(C)(i) of the Act, the 
presumption of NME status remains in effect until revoked by the 
Department. The presumption of NME status for the PRC has not been 
revoked by the Department and remains in effect for purposes of the 
initiation of this investigation. Accordingly, the normal value of the 
product is appropriately based on factors of production valued in a 
surrogate market economy country in accordance with section 773(c) of 
the Act. In the course of this investigation, all parties will have the 
opportunity to provide relevant information related to the issues of 
the PRC's NME status and the granting of separate rates to individual 
exporters.
    Petitioners selected India as the surrogate country. Petitioners 
argued that, pursuant to section 773(c)(4) of the Act, India is an 
appropriate surrogate because it is a market-economy country that is at 
a comparable level of economic development to the PRC and is a 
significant producer of SHMP. Based on the information provided by 
Petitioners, we believe that its use of India as a surrogate country is

[[Page 9928]]

appropriate for purposes of initiating this investigation. After the 
initiation of the investigation, we will solicit comments regarding 
surrogate country selection. Also, pursuant to 19 CFR 351.301(c)(3)(i), 
interested parties will be provided an opportunity to submit publicly 
available information to value factors of production within 40 days 
after the date of publication of the preliminary determination.
    Petitioners provided dumping margin calculations using the 
Department's NME methodology as required by 19 CFR 351.202(b)(7)(i)(C) 
and 19 CFR 351.408. Petitioners calculated normal values based on 
consumption rates for producing SHMP experienced by U.S. producers for 
producing SHMP in an integrated facility and a non-integrated facility. 
See Initiation Checklist. In accordance with section 773(c)(4) of the 
Act, Petitioners valued factors of production, where possible, on 
reasonably available, public surrogate country data. To value certain 
factors of production, Petitioners used official Indian government 
import statistics, excluding those values from countries previously 
determined by the Department to be NME countries and excluding imports 
into India from Indonesia, the Republic of Korea and Thailand, because 
the Department has previously excluded prices from these countries 
because they maintain broadly-available, non-industry specific export 
subsidies. See, e.g., Tapered Roller Bearings and Parts Thereof, 
Finished and Unfinished, from the People's Republic of China: Final 
Results of 1999-2000 Administrative Review, Partial Rescission of 
Review, and Determination Not to Revoke Order in Part, 66 FR 57420 
(November 15, 2001), and accompanying Issues and Decision Memorandum at 
Comment 1. For valuing other factors of production, Petitioners used 
the same sources, where appropriate, recently used in the Preliminary 
Determination of Sales at Less Than Fair Value and Partial Affirmative 
Determination of Critical Circumstances: Certain Polyester Staple Fiber 
from the People's Republic of China, 71 FR 77373 (December 26, 2006), 
and inflated these values to be contemporaneous with the POI where 
necessary.
    For inputs valued in Indian rupees and not contemporaneous with the 
POI, Petitioners used information from the wholesale price indices 
(``WPI'') in India as published by the Reserve Bank of India (``RBI'') 
for input prices during the period preceding the POI. In addition, 
Petitioners made currency conversions, where necessary, based on the 
average rupee/U.S. dollar exchange rate for the POI, as reported on the 
Department's Web site. See http://ia.ita.doc.gov/exchange/index.html.
    For the normal value calculations, Petitioners derived the figures 
for factory overhead, selling, general and administrative expenses 
(``SG&A''), and profit from the financial ratios of two Indian 
producers of SHMP or comparable merchandise.\1\ Petitioners derived 
these financial ratios from Gujarat Alkalies and Chemicals Ltd. for the 
integrated production process and from the Aditya Birla Group for the 
non-integrated production process.
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    \1\ For a description of the comparable merchandise, as 
described by Petitioners, see Petition at 23-24.
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Fair Value Comparisons

    Based on the data provided by Petitioners, there is reason to 
believe that imports of SHMP from the PRC are being, or are likely to 
be, sold in the United States at less than fair value. Based upon 
comparisons of supported export prices to the two normal values, 
calculated in accordance with section 773(c) of the Act, the estimated 
calculated dumping margins for SHMP from the PRC range from 76.69 
percent to 103.62 percent. See Initiation Checklist at 9-10 for these 
calculations.

Allegations and Evidence of Material Injury and Causation

    Petitioners allege that the U.S. industry producing the domestic 
like product is being materially injured, or is threatened with 
material injury, by reason of the individual and cumulated imports of 
the subject merchandise sold at less than NV. Petitioners contend that 
the industry's injured condition is illustrated by the decline in 
customer base, market share, domestic shipments, prices and financial 
performance. We have assessed the allegations and supporting evidence 
regarding material injury and causation, and we have determined that 
these allegations are properly supported by adequate evidence and meet 
the statutory requirements for initiation. See Initiation Checklist at 
Attachment II.

Separate Rates Application

    The Department recently modified the process by which exporters and 
producers may obtain separate-rate status in NME investigations. See 
Policy Bulletin 05.1: Separate-Rates Practice and Application of 
Combination Rates in Antidumping Investigations involving Non-Market 
Economy Countries (Separate Rates and Combination Rates Bulletin), 
(April 5, 2005), available on the Department's Web site at http://ia.ita.doc.gov/policy/bull05-1.pdf (``Separate Rates and Combination 
Rates Bulletin''). The process requires the submission of a separate-
rate status application. Based on our experience in processing the 
separate rates applications in, for example, the antidumping duty 
investigations of Certain Lined Paper products from India, Indonesia, 
and the People's Republic of China and Diamond Sawblades and Parts 
Thereof from the People's Republic of China and the Republic of Korea, 
we have modified the application for this investigation to make it more 
administrable and easier for applicants to complete. See Initiation of 
Antidumping Duty Investigations: Certain Lined Paper Products from 
India, Indonesia, and the People's Republic of China, 70 FR 58374, 
58379 (October 6, 2005) (``Lined Paper Initiation''), Initiation of 
Antidumping Duty Investigations: Diamond Sawblades and Parts Thereof 
from the People's Republic of China and the Republic of Korea, 70 FR 
35625, 35629 (June 21, 2005) (``Sawblades Initiation''), and Initiation 
of Antidumping Duty Investigation: Certain Artist Canvas From the 
People's Republic of China, 70 FR 21996, 21999 (April 28, 2005) 
(``Artist Canvas Initiation''). The specific requirements for 
submitting the separate-rates application in this investigation are 
outlined in detail in the application itself, which will be available 
on the Department's Web site at http://ia.ita.doc.gov/ia-highlights-and-news.html on the date of publication of this initiation notice in 
the Federal Register. The separate rates application is due no later 
than May 4, 2007.

NME Respondent Selection and Quantity and Value Questionnaire

    For NME investigations, it is the Department's practice to request 
quantity and value information from all known exporters identified in 
the petition. Although many NME exporters respond to the quantity and 
value information request, at times some exporters may not have 
received the quantity and value questionnaire or may not have received 
it in time to respond by the specified deadline. Therefore, in 
addition, the Department typically requests the assistance of the NME 
government in transmitting the Department's quantity and value 
questionnaire to all companies who manufacture and export subject 
merchandise to the United States, as well as to manufacturers who 
produce the subject merchandise for companies who were engaged in 
exporting subject

[[Page 9929]]

merchandise to the United States during the period of investigation. 
The quantity and value data received from NME exporters is used as the 
basis to select the mandatory respondents.
    The Department requires that the respondents submit a response to 
both the quantity and value questionnaire and the separate-rates 
application by the respective deadlines in order to receive 
consideration for separate-rate status. Appendix I of this notice 
contains the quantity and value questionnaire that must be submitted by 
all NME exporters no later than April 4, 2007. In addition, the 
Department will post the quantity and value questionnaire along with 
the filing instructions on the Import Administration's Web site, http://ia.ita.doc.gov/ia-highlights-and-news.html. The Department will also 
send the quantity and value questionnaire to those exporters identified 
in Exhibit AD-3 of the petition and the NME government.

Use of Combination Rates in an NME Investigation

    The Department will calculate combination rates for certain 
respondents that are eligible for a separate rate in this 
investigation. The Separate Rates and Combination Rates Bulletin, 
states:

    {w{time} hile continuing the practice of assigning separate 
rates only to exporters, all separate rates that the Department will 
now assign in its NME investigations will be specific to those 
producers that supplied the exporter during the period of 
investigation. Note, however, that one rate is calculated for the 
exporter and all of the producers which supplied subject merchandise 
to it during the period of investigation. This practice applies both 
to mandatory respondents receiving an individually calculated 
separate rate as well as the pool of non-investigated firms 
receiving the weighted-average of the individually calculated rates. 
This practice is referred to as the application of ``combination 
rates'' because such rates apply to specific combinations of 
exporters and one or more producers. The cash-deposit rate assigned 
to an exporter will apply only to merchandise both exported by the 
firm in question and produced by a firm that supplied the exporter 
during the period of investigation.

See Separate Rates and Combination Rates Bulletin, at page 6.

Initiation of Antidumping Investigation

    Based upon our examination of the petition on SHMP from the PRC, we 
find that this petition meets the requirements of section 732 of the 
Act. Therefore, we are initiating an antidumping duty investigation to 
determine whether imports of SHMP from the PRC are being, or are likely 
to be, sold in the United States at less than fair value. Unless 
postponed, we will make our preliminary determinations no later than 
140 days after the date of these initiations. See section 733(b)(1)(A) 
of the Act.

Distribution of Copies of the Petition

    In accordance with section 732(b)(3)(A) of the Act, a copy of the 
public version of the petition has been provided to the government of 
the PRC.

International Trade Commission Notification

    We have notified the ITC of our initiation, as required by section 
732(d) of the Act.

Preliminary Determination by the ITC

    The ITC will preliminarily determine, within 25 days after the date 
on which it receives notice of this initiation, whether there is a 
reasonable indication that imports of SHMP from the PRC are causing 
material injury, or threatening to cause material injury, to a U.S. 
industry. See section 733(a)(2)(A)(i) of the Act. A negative ITC 
determination will result in the investigation being terminated; 
otherwise, this investigation will proceed according to statutory and 
regulatory time limits.
    This notice is issued and published pursuant to section 777(i) of 
the Act.

    Dated: February 28, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.

Appendix I

    Where it is not practicable to examine all known producers/
exporters of subject merchandise because of the large number of 
exporters or producers included in the investigation, section 
777A(c)(2) of the Tariff Act of 1930 (as amended) permits us to 
investigate (1) a sample of exporters, producers, or types of 
products that is statistically valid based on the information 
available at the time of selection, or (2) exporters and producers 
accounting for the largest volume and value of the subject 
merchandise that can reasonably be examined.
    In the chart below, please provide the total quantity and total 
value of all your sales of merchandise covered by the scope of this 
investigation (see scope section of this notice), produced in the 
PRC, and exported/shipped to the United States during the period 
July 1, 2006, through December 31, 2006.

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                 Market                       Total quantity           Terms of sale            Total value
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United States
1. Export Price Sales
2.
    a. Exporter name
    b. Address
    c. Contact
    d. Phone No.
    e. Fax No.
3. Constructed Export Price Sales
4. Further Manufactured
        Total Sales
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    Total Quantity:
    <bullet> Please report quantity on a metric ton basis. If any 
conversions were used, please provide the conversion formula and 
source.
    Terms of Sales:
    <bullet> Please report all sales on the same terms (e.g., free 
on board).
    Total Value:
    <bullet> All sales values should be reported in U.S. dollars. 
Please indicate any exchange rates used and their respective dates 
and sources.
    Export Price Sales:
    <bullet> Generally, a U.S. sale is classified as an export price 
sale when the first sale to an unaffiliated person occurs before 
importation into the United States.
    <bullet> Please include any sales exported by your company 
directly to the United States.
    <bullet> Please include any sales exported by your company to a 
third-country market economy reseller where you had knowledge that 
the merchandise was destined to be resold to the United States.
    <bullet> If you are a producer of subject merchandise, please 
include any sales manufactured by your company that were 
subsequently exported by an affiliated exporter to the United 
States.
    <bullet> Please do not include any sales of merchandise 
manufactured in Hong Kong in your figures.

[[Page 9930]]

    Constructed Export Price Sales:
    <bullet> Generally, a U.S. sale is classified as a constructed 
export price sale when the first sale to an unaffiliated person 
occurs after importation. However, if the first sale to the 
unaffiliated person is made by a person in the United States 
affiliated with the foreign exporter, constructed export price 
applies even if the sale occurs prior to importation.
    <bullet> Please include any sales exported by your company 
directly to the United States.
    <bullet> Please include any sales exported by your company to a 
third-country market economy reseller where you had knowledge that 
the merchandise was destined to be resold to the United States.
    <bullet> If you are a producer of subject merchandise, please 
include any sales manufactured by your company that were 
subsequently exported by an affiliated exporter to the United 
States.
    <bullet> Please do not include any sales of merchandise 
manufactured in Hong Kong in your figures.
    Further Manufactured:
    <bullet> Further manufacture or assembly costs include amounts 
incurred for direct materials, labor and overhead, plus amounts for 
general and administrative expense, interest expense, and additional 
packing expense incurred in the country of further manufacture, as 
well as all costs involved in moving the product from the U.S. port 
of entry to the further manufacturer.

 [FR Doc. E7-3890 Filed 3-5-07; 8:45 am]
BILLING CODE 3510-DS-P