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[Federal Register Volume 60, Number 61 (Thursday, March 30, 1995)]
[Notices]
[Pages 16437-16440]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-7776]

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DEPARTMENT OF COMMERCE
[A-570-832 and A-570-833]

Notice of Final Determinations of sales at Less Than Fair Value: 
Pure Magnesium and Alloy Magnesium From the People's Republic of China

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

EFFECTIVE DATE: March 30, 1995.

FOR FURTHER INFORMATION CONTACT:
David J. Goldberger or Louis Apple, Office of Antidumping 
Investigations, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW., Washington, D.C. 20230; telephone: (202) 482-
4136 or (202) 482-1769, respectively.

Final Determinations

    The Department of Commerce (the Department) determines that pure 
magnesium and alloy magnesium from the People's Republic of China (PRC) 
are being, or are likely to be, sold in the United States at less than 
fair value (LTFV), as provided in section 735 of the Tariff Act of 
1930, as amended (the Act). The estimated margins are shown in the 
``Suspension of Liquidation'' section of this notice.

Case History

    Since the Department announced its preliminary determinations on 
October 27, 1994, (59 FR 55424, November 7, 1994) the following events 
have occurred:
    On October 19, 1994, Min He Magnesium (Min He), a producer and 
exporter of the subject merchandise, and Xiamen Xing Xia Co. Ltd (Xing 
Xia), an exporter of the subject merchandise, requested that we 
postpone our final determinations by 60 days pursuant to 19 CFR 
353.20(b)(1). On November 7, 1994, we published a notice postponing the 
final determinations (59 FR 55424).
    In January, 1995, we conducted verification of the questionnaire 
responses at Min He and Xing Xia. On February 10, 1995, petitioner 
filed a case brief. On February 17, 1995, respondents filed a rebuttal 
brief and petitioner withdrew its request for a public hearing.

Scopes of Investigations

    The scopes of these investigations have been modified since the 
preliminary determination in order to clarify the distinctions between 
pure magnesium and alloy magnesium. See Comment 1 in the ``Interested 
Party Comments'' section of this notice, below.

A. Pure Magnesium

    The product covered by this investigation is pure primary magnesium 
regardless of chemistry, form or size, unless expressly excluded from 
the scope of this investigation. Primary magnesium is a metal or alloy 
containing by weight primarily the element magnesium and produced by 
decomposing raw materials into magnesium metal. Pure primary magnesium 
is used primarily as a chemical in the aluminum alloying, 
desulfurization, and chemical reduction industries. In addition, pure 
primary magnesium is used as an input in producing magnesium alloy.

    Pure primary magnesium encompasses:
(1) Products that contain at least 99.95% primary magnesium, by 
weight (generally referred to as ``ultra-pure'' magnesium);
(2) Products containing less than 99.95% but not less than 99.8% 
primary magnesium, by weight (generally referred to as ``pure'' 
magnesium); and
(3) Products (generally referred to as ``off-specification pure'' 
magnesium) that contain 50% or greater, but less than 99.8% primary 
magnesium, by weight, and that do not conform to ASTM specifications 
for alloy magnesium.

    ``Off-specification pure'' magnesium is pure primary magnesium 
containing magnesium scrap, secondary magnesium, oxidized magnesium or 
impurities (whether or not intentionally added) that cause the primary 
magnesium content to fall below 99.8% by weight. It generally does not 
contain, individually or in combination, 1.5% or more, by weight, of 
the following alloying elements: aluminum, manganese, zinc, silicon, 
thorium, zirconium and rare earths.
    Excluded from the scope of this investigation are alloy primary 
magnesium, primary magnesium anodes, granular primary magnesium 
(including turnings and powder), and secondary magnesium.
    Granular magnesium, turnings, and powder are classifiable under 
Harmonized Tariff Schedule of the United States (HTSUS) subheading 
8104.30.00. Magnesium granules and turnings (also referred to as chips) 
are produced by grinding and/or crushing primary magnesium and thus 
have the same chemistry as primary magnesium. Although not susceptible 
to precise measurement because of their irregular shapes, turnings or 
chips are typically produced in coarse shapes and have a maximum length 
of less than 1 inch. Although sometimes produced in larger sizes, 
granules are more regularly shaped than turnings or chips, and have a 
typical size of 2mm in diameter or smaller.
    Powders are also produced from grinding and/or crushing primary 
magnesium and have the same chemistry as primary magnesium, but are 
even smaller than granules or turnings. Powders are defined by the 
Section Notes to Section XV, the section of the HTSUS in which 
subheading 8104.30.00 appears, as products of which 90 percent or more 
by weight will pass through a sieve having a mesh aperture of 1 mm. 
(See HTSUS, Section XV, Base Metals and Articles of Base Metals, Note 
6(b).) Accordingly, the exclusion of magnesium turnings, granules and 
powder from the scope includes products having a maximum physical 
dimension (i.e., length or diameter) of 1 inch or less.
    The products subject to this investigation are classifiable under 
subheadings 8104.11.00, 8104.19.00 and 8104.20.00 of the HTSUS. 
Although the HTSUS subheadings are provided for convenience and customs 
purposes, our written description of the scope is dispositive.

B. Alloy Magnesium

    The product covered by this investigation is alloy primary 
magnesium regardless of chemistry, form or size, unless expressly 
excluded from the scope of this investigation. Primary magnesium is a 
metal or alloy containing by weight primarily the element magnesium and 
produced by decomposing raw materials into magnesium metal.
    Alloy magnesium products are produced by adding alloying elements 
to pure magnesium in order to alter the mechanical and physical 
properties of the magnesium to make it suitable for use as a structural 
material. Alloy magnesium is used primarily for casting or in wrought 
form. It is harder and [[Page 16438]] stronger than pure magnesium and 
may possess a higher corrosion resistance.
    This investigation covers alloy primary magnesium which contains 
50% or greater, but less than 99.8%, primary magnesium, by weight, and 
one or more of the following: aluminum, manganese, zinc, silicon, 
thorium, zirconium and rare earths in amounts which, individually or in 
combination, constitute not less than 1.5% of the material, by weight. 
Products that meet the aforementioned description but do not conform to 
ASTM specifications for alloy magnesium are not included in the scope 
of this investigation. In addition to primary magnesium, alloy 
magnesium may contain magnesium scrap, secondary magnesium, or oxidized 
magnesium in amounts less than the primary magnesium itself.
    Alloy primary magnesium is cast and sold in various physical forms 
and sizes, including ingots, slabs, rounds, billets and other shapes.
    Excluded from the scope of this investigation are pure primary 
magnesium, primary magnesium anodes, granular primary magnesium 
(including turnings and powder), and secondary magnesium.
    Granular magnesium, turnings, and powder are classifiable under 
Harmonized Tariff Schedule of the United States (HTSUS) subheading 
8104.30.00. Magnesium granules and turnings (also referred to as chips) 
are produced by grinding and/or crushing primary magnesium and thus 
have the same chemistry as primary magnesium. Although not susceptible 
to precise measurement because of their irregular shapes, turnings or 
chips are typically produced in coarse shapes and have maximum length 
of less than 1 inch. Although sometimes produced in larger sizes, 
granules are more regularly shaped than turnings or chips, and have a 
typical size of 2mm in diameter or smaller.
    Powders are also produced from grinding and/or crushing primary 
magnesium and have the same chemistry as primary magnesium, but are 
even smaller than granules or turnings. Powders are defined by the 
Section Notes to Section XV, the section of the HTSUS in which 
subheading 8104.30.00 appears, as products of which 90 percent or more 
by weight will pass through a sieve having a mesh aperture of 1mm. (See 
HTSUS, Section XV, Base Metals and Articles of Base Metals, Note 6(b).) 
Accordingly, the exclusion of magnesium turnings, granules and powder 
from the scope include products having a maximum physical dimension 
(i.e., length or diameter) or 1 inch or less.
    The products subject to this investigation are classifiable under 
subheadings 8104.19.00 and 8104.20.00 of the HTSUS. Although the HTSUS 
subheadings are provided for convenience and customs purposes, our 
written description of the scope is dispositive.

Periods of Investigation

    The period of investigation (POI) for pure magnesium is April 1, 
1993 through March 31, 1994. The POI for alloy magnesium is September 
1, 1992 through March 31, 1994.

Best Information Available (BIA)

    The Department's antidumping questionnaire was sent to seven 
companies located in the PRC, in addition to the copy sent to the 
Ministry of Foreign Trade and Economic Cooperation. Of these seven 
companies, responses were received from only one, Min He. Two 
companies, Luoyang Copper Working Plant and Northeast Light Alloy 
Fabrication Plant, replied that they did not export the subject 
merchandise. Two companies, Harbin Non-Ferrous Metal Smelter and Fushun 
Aluminum Smelter, did not respond to the questionnaires at all and the 
questionnaires sent to the other two companies, Yingkou Magnesium Works 
and Tongling Copper Smelter, were returned as undeliverable. Another 
company, Xing Xia, was accepted by the Department as a voluntary 
respondent.
    In investigations involving imports from non-market economy 
countries, unless respondents request and qualify for separate rates, 
we apply the same rate to all exports from that country and treat 
responses from individual companies as single consolidated response. 
Since none of the respondents requested a separate rate in either the 
pure magnesium or alloy magnesium investigation, all respondents are 
treated as one entity for the purposes of assigning an antidumping 
margin in each investigation.
    At the time of the preliminary determination, it was unclear 
whether there were nonresponding potential exporters during the POI. 
Since the preliminary determination, we have identified nonresponding 
potential exporters. The required consolidated response in this case is 
incomplete because these companies failed to respond to the 
Department's questionnaire. Moreover, the portion of the response that 
was submitted, (i.e. Min He and Xing Xia) failed to verify. (see 
verification reports dated February 3, 1995)
    Although the participating respondents, Min He and Xing Xia, did 
attempt to cooperate with the Department's requests for documentation 
during their respective verifications, they were not able to do so and 
the Department was unable to verify the accuracy and completeness of 
the information reported in their questionnaire responses. Therefore, 
the Department must assign an antidumping margin on the basis of BIA 
pursuant to section 776 (b) and (c) of the Act.
    In determining what to use as BIA, the Department follows a two-
tiered methodology, whereby the Department normally assigns less 
adverse margins to those respondents that cooperated in an 
investigation and more adverse margins to those respondents that did 
not cooperate in an investigation. The Department's two-tiered 
methodology for assigning BIA has been upheld by the U.S. Court of 
Appeals for the Federal Circuit. (See Allied Signal v. United States, 
996 F.2d 1185 (Fed. Cir. 1993) (June 22, 1993)). In this case, the 
Department has determined that the respondent, a single entity as 
explained above, is uncooperative because known exporters did not 
respond to the Department's questionnaire. This fact impeded 
significantly the Department's investigation.
    When a respondent is uncooperative, the Department normally uses as 
BIA the higher of 1) the highest margin in the petition; 2) the highest 
margin calculated for any other respondent within the same country for 
the same class or kind of merchandise; or 3) the estimated margin found 
for the affected firm in the preliminary determination. (See Final 
Determination of Sales at Less Than Fair Value: Antifriction Bearings 
(other than Tapered Roller Bearings) and Parts Thereof from the Federal 
Republic of Germany, 54 FR 1892, 19033 (1989)). In this investigation, 
the preliminary determination margins are higher than the petition 
margins, as revised in the initiation notice. (See Initiation of 
Antidumping Duty Investigations: Pure and Alloy Magnesium From the 
People's Republic of China, the Russian Federation, and Ukraine (59 FR 
21748, April 26, 1994). Therefore, as BIA, we are assigning to all 
exporters of PRC pure magnesium and ally magnesium the rates calculated 
in the preliminary determinations. (see Final Determination of Sales at 
Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products, 
Certain Cold-Rolled Carbon Steel Flat Products, and Certain Cut-to-
Length Carbon Steel Plated From Belgium (58 FR 37083, July 9, 1993). 
(For further discussion of BIA, see Comment 2) [[Page 16439]] 

Verification

    As provided in section 776(b) of the Act, we attempted to verify 
all information submitted by respondents for use in our final 
determinations. We used standard verification procedures, including 
examination of relevant accounting records and original source 
documents provided by respondents. However, as noted above, we were not 
able to verify the accuracy and completeness of the respondents' 
submissions.

Interested Party Comments

Comment 1

    Petitioners contend that the Department should clarify the scopes 
in these proceedings. Petitioners argue that ``off-specification'' pure 
magnesium (i.e., magnesium that is less than 99.8% pure magnesium but 
that otherwise can be and is considered pure magnesium by consumers) 
should be considered within the scope of the pure magnesium proceeding 
instead of within the scope of the alloy magnesium proceeding. 
Petitioners propose revised scopes to achieve this end.
    Respondents argued that petitioners' request for ``clarification'' 
of scope was untimely. They further argued that petitioners concerns 
about circumvention are merely speculative because no order yet exists 
as a result of this investigation. Furthermore, respondents stated that 
petitioners should have their concerns addressed in a request for scope 
review or an anticircumvention investigation.
DOC Position
    We agree with petitioners that some magnesium, despite not meeting 
the normal definition (based on magnesium content) of pure magnesium, 
nevertheless may be used in applications that normally require pure 
magnesium. In fact, the record in this case show sales of such 
magnesium were supplied to fulfill orders for pure magnesium.
    We therefore have revised the scopes of these investigations to 
include this off-specification pure magnesium within the definition of 
pure magnesium, described as any product (1) that is 50 percent or more 
primary magnesium, and (2) that does not meet any ASTM definition of 
alloy magnesium (based on specific percentages of one or more alloying 
agents).
    We not that our consultations with the Bureau of Mines established 
that the industry standards for alloy magnesium are ASTM standards. 
(See Final Calculation Memorandum of the concurrent investigations of 
pure magnesium and alloy magnesium from the Russian Federation and ally 
magnesium from the Ukraine). Consequently, we have not adopted 
petitioner's proposed scope language that would describe off-
specification pure magnesium as any product, inter alia, that does not 
meet ASTM standards or other industry standards.
    Although ASTM standards define pure magnesium as not less than 99.8 
percent magnesium, metal with a primary magnesium content below that 
level should be captured in the scope of the pure magnesium 
investigations if it cannot legitimately be defined as a specific ASTM 
alloy magnesium.
    The fact that both scopes capture only merchandise with primary 
magnesium content of 50 percent or greater means that merchandise 
composed of 50 percent or more secondary magnesium would not fall 
within either scope.

Comment 2

    Petitioners state that the Department should base the dumping 
margins for all producers and exporters of magnesium from the PRC on 
BIA, and argue that the BIA rate should be calculated using the factors 
data found at verification and the lowest United States price in the 
petition. At verification we found discrepancies in the factor usage 
data, the additional unreported factors, as well as, mis-reported data 
on labor and electricity. However, if the suggested methodology is not 
used, petitioners argue that the Department should not use as BIA a 
rate lower than the highest rate alleged in the petition.
    Min He and Xing Xia argue that, although that they were unable to 
provide all of the information requested by the Department, they were 
cooperative and provided timely responses. In view of this cooperation, 
they argue the Department should not resort to the punitive first tier 
BIA. Instead, the Department should base its BIA rate on the margins 
alleged in the petition. They also argue that since the Department was 
unable to verify the information reported, it must revert to BIA from 
the petition and publicly available sources, and thus not use facts 
found at verification to calculate the foreign market value.
DOC Position
    The Department does not agree that respondents should be granted 
cooperative BIA rates. As stated above, because no exporter is being 
granted a separate dumping margin, we are assigning one country-wide 
margin in each of the investigations. Given that certain exporters 
failed to respond to our questionnaire, we are assigning an 
uncooperative BIA rate, pursuant to our long-standing practice.
    Petitioners have asked the Department to depart from its standard 
practice and adjust this BIA rate based on information discovered at 
verification. Petitioners are essentially asking the Department to 
adjust the BIA rate to make it more accurate. However, it is a 
generally accepted principle that BIA ``is not necessarily accurate 
information, * * * [but rather is] * * * information which becomes 
usable because respondent has failed to provide accurate information.'' 
(See Association Columbiana de Exportadoras de Flores v. United States, 
704 F. Supp. 1114, 1126 (Ct. Int'l Trade 1989), rev'd in part on 
remand, 717 F. Supp. 834 (Ct. Int'l Trade 1989), aff'd on other 
grounds, 901 F.2d 1089 (Fed Cir. 1990) cert. denied, 111 S. Ct. 136 
(1990)). The Department's practice is to apply, as BIA, the highest 
margin already calculated and not to engage in the exercise of 
attempting to calculate the highest possible margin. The purpose of 
resorting to BIA is not to be punitive but to encourage respondents to 
properly respond to the Department's requests for information. The 
Department believes that the 108.26% rate for pure magnesium and 79.38% 
rate for alloy magnesium accomplish this purpose.

Continuation of Suspension of Liquidation

    In accordance with sections 733(d)(1) of the Act, we are directing 
the Customs Service to continue to suspend liquidation of all entries 
of pure magnesium and alloy magnesium from the PRC that are entered, or 
withdrawn from warehouse, from consumption on or after November 7, 
1994, which is the date of publication of our notice of preliminary 
determination in the Federal Register. The Customs Service shall in 
each proceeding, require a cash deposit or posting of a bond equal to 
108.26 percent ad valorem on all entries of certain pure magnesium from 
the PRC and 79.38 percent ad valorem on all entries of certain alloy 
magnesium from the PRC. This suspension of liquidation will remain in 
effect until further notice.

ITC Notification

    In accordance with section 735(d) of the Act, we have notified the 
ITC of our determinations. As our final determinations are affirmative, 
the ITC will within 45 days determine whether imports of either product 
are materially injuring, or threaten material injury to, the U.S. 
industry. In each proceeding, if the ITC determines that material 
injury, or threat of material injury does not [[Page 16440]] exist, 
that proceeding will be terminated and all securities posted will be 
refunded or cancelled. If, in either proceeding, the ITC determines 
that such injury does exist, the Department will issue an antidumping 
duty order for the appropriate proceeding directing Customs officials 
to assess antidumping duties on all imports of the subject merchandise 
entered for consumption on or after the effective date of the 
suspension of liquidation.
    These determinations are published pursuant to section 735(d) of 
the Act and 19 CFR 353.20(a)(4).

    Dated: March 22, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-7776 Filed 3-29-95; 8:45 am]
BILLING CODE 3510-DS-P
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