Initiation of Antidumping Duty Investigations: Furfuryl Alcohol From the People's Republic of China, the Republic of South Africa, and Thailand

DEPARTMENT OF COMMERCE

[A-570-835, A-549-812, A-791-802]

Initiation of Antidumping Duty Investigations: Furfuryl Alcohol

From the People's Republic of China, the Republic of South Africa, and

Thailand

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: June 27, 1994.

FOR FURTHER INFORMATION CONTACT: Erik Warga or Ellen Grebasch at (202)

482-0922 or (202) 482-3773, respectively, Office of Antidumping

Investigations, Import Administration, International Trade

Administration, U.S. Department of Commerce, 14th Street and

Constitution Avenue, N.W., Washington, D.C., 20230

Initiation of Investigations

The Petition

On May 31, 1994, we received a petition in proper form filed by QO

Chemicals, Inc. (petitioner), the sole U.S. producer of furfuryl

alcohol. Petitioner filed supplements to the petition on June 6, 15,

16, and 17, 1994.

In accordance with 19 CFR 353.12, petitioner alleges that imports

of furfuryl alcohol from the People's Republic of China (PRC),

Thailand, and the Republic of South Africa (South Africa) 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 Tariff Act of 1930, as amended

(the Act), and that such imports are materially injuring, or threaten

material injury to, a U.S. industry.

Petitioner states that it has standing to file the petition because

it is an interested party, as defined under section 771(9)(C) of the

Act, and it is the sole domestic producer of furfuryl alcohol. If any

interested party, as described under paragraphs (C), (D), (E), or (F)

of section 771(9) of the Act, wishes to register support for, or

opposition to, this petition, it should file a written notification

with the Assistant Secretary for Import Administration.

Scope of Investigations

The product covered by these investigations is furfuryl alcohol

(C4H3OCH2OH). Furfuryl alcohol is a primary alcohol, and

is colorless or pale yellow in appearance. It is used in the

manufacturer of resins and as a wetting agent and solvent for coating

resins, nitrocellulose, cellulose acetate, and other soluble dyes.

The product subject to these investigations is classifiable under

subheading 2932.13.00 of the Harmonized Tariff Schedule of the United

States (HTSUS). Although the HTSUS subheading is provided for

convenience and Customs purposes, our written description of the scope

of these investigations is dispositive.

United States Price and Foreign Market Value

People's Republic of China

Petitioner based United States Price (USP) on FOB PRC port, C&F

U.S. port, and CIF U.S. port, price quotes from PRC producers through

their representative U.S. trading companies. Adjustments were made for

foreign inland freight, ocean freight, and marine insurance. Petitioner

based inland freight on the distance from the PRC producers of the

subject merchandise to the PRC port of export. Freight transportation

charges were valued using Indian surrogate data. (See description of

non-market economy (NME) below methodology). Ocean freight and marine

insurance charges were estimated by comparing per-unit U.S. IM-145

customs value import statistics to per-unit U.S. IM-145 customs value

import statistics to per-unit U.S. IM-145 CIF import statistics.

Petitioner asserts that the PRC is a NME within the meaning of

sections 771(18)(A) and (C) of the Act and in accordance with section

773(c) of the Act. Accordingly, foreign market value (FMV) should be

based on the producer's factors of production, valued in a surrogate

market economy country. The Department has determined in previous

investigations that the PRC is a NME, and the presumption of NME status

continues for the initiation of this investigation. See, e.g., Final

Determination of Sales at Less Than Fair Value: Sebasic Acid from the

People's Republic of China, (59 FR 28053, May 31, 1994).

Absent evidence that a particular NME country government determines

which of its factories shall produce for export to the United States,

we intend, for purposes of the investigation from the PRC, to base FMV

only on those factories that produced furfuryl alcohol sold to the

United States during the period of investigation (POI).

In the course of this investigation, parties will have the

opportunity to provide relevant information related to the issues of

the PRC's NME status and granting of separates rates to individual

exporters. See Final Determination of Sales at Less Than Fair Value:

Silicon Carbide from the PRC (59 FR 22585, May 2, 1994).

Petitioners based the factors of production on the production

process used by PRC producers of the subject merchandise and valued

these factors, where possible, on publicly available published

information from the surrogate country, India. Where certain values

were not available from Indian sources, petitioner has used values from

Pakistan and Indonesia. These countries have been determined to be

appropriate surrogates for the PRC. See November 29, 1993, memorandum

from Rob Straw, Office of Policy to the File, Antidumping Investigation

of Paper Clips from the PRC, A-570-826. For purposes of these

initiations, we have accepted, pursuant to section 773 (c)(4) of the

Act, petitioner's view that India, Pakistan, and Indonesia are

appropriate surrogate countries.

Pursuant to section 773(c)(1) of the Act, petitioner determined FMV

on the basis of the value of factors of production specified in section

773(c)(3) of the Act. These factors included materials, energy, labor

costs and a percentage for factory overhead based on information from

India. Petitioner then added the statutory minimum of ten percent for

general expenses and eight percent for profit, as well as an amount for

packing.

We disregarded certain factor values where the inputs were based on

prices in the United States because (1) petitioner failed to follow the

Department's established hierarchy regarding selection of surrogate

countries for the PRC, with respect to factor valuation, and (2)

petitioner provided no basis for determining that United States values

are representative of the appropriate surrogate country values.

Based on a comparison of USP to FMV, the recalculated dumping

margins ranged from 225.42 percent to 320.69 percent.

South Africa

Petitioner based USP for South Africa on IM-145 data. Petitioner

adjusted for foreign inland freight, ocean freight and marine insurance

charges. Ocean freight and marine insurance charges were estimated by

comparing per-unit U.S. IM-145 customs value import statistics to per-

unit U.S. IM-145 CIF import statistics.

Petitioner based FMV on a domestic price quote from a producer of

the subject merchandise in South Africa to a home market customer. An

adjustment was made for foreign inland freight to arrive at an ex-

factory price. Petitioner then added VAT to both the FMV and USP.

Based on a comparison of USP to FMV, the dumping margin alleged by

petitioner is 68 percent.

Thailand

Petitioner based USP for Thailand on U.S. IM-145 Customs data.

Petitioner adjusted for foreign inland freight, ocean freight and

marine insurance charges. Petitioner calculated inland freight charges

based on the distance from the Thai producer's plant to the port of

export. Ocean freight and marine insurance charges were estimated by

comparing per-unit U.S. IM-145 customs value import statistics to per-

unit U.S. IM-145 CIF import statistics.

Petitioner based FMV on constructed value (CV) because it claimed

that the Thai market was not viable and that home market and third

country prices provided in the petition represented sales that were

made below the cost of production (COP) and therefore were not

appropriate bases for calculating FMV.

Petitioner provided a sales price from a Thai producer to a home

market customer, and third country prices to Germany and the

Netherlands, based on 1993 Thai export statistics to these countries.

We did not use the Thai sales price to the home market customer because

the source of the information could not be substantiated. Petitioner's

claim that the home market is not viable is moot because they have been

unable to obtain a substantiated home market sales price in Thailand.

We rejected prices to third countries because these prices were found

to be below COP, as described below.

Allegations of Home Market and Third Country Sales Below Cost of

Production: Thailand

Petitioner alleged that a Thai producer is selling the subject

merchandise in the home market at prices below its COP. This allegation

is based on a comparison of a domestic price obtained in Thailand with

the Thai producer's COP for the subject merchandise. Because the

domestic sales price from Thailand is unsubstantiated, there is no need

to address petitioner's home market COP allegation. See ``Review of

Estimated COP and Constructed Value for Furfuryl Alcohol Memorandum,''

dated June 17, 1994, which is on file in the Central Records Unit, at

the Department of Commerce.

Petitioner also alleged that the Thai producer's sales prices to

Germany and the Netherlands were also made at prices below COP. This

allegation is based on a comparison of the third country prices to

Germany and to the Netherlands (based on 1993 Thai export statistics to

these countries) to the Thai producer's calculated COP. A comparison of

prices to Germany and the Netherlands to the Thai producer's COP for

the subject merchandise indicates sales below cost. If the Department

determines after these initiations that the home market is not viable

and the Department uses third country prices in Germany or the

Netherlands for purposes of comparison to USP, we will initiate

separate cost investigations at that time.

Therefore, for purposes of this initiation, in accordance with

773(e)(1) of the Act, we are accepting petitioner's estimate of CV as

the only appropriate basis for FMV. Petitioners based CV on costs

incurred by a Thai producer, and its own manufacturing experience

adjusted for differences in costs between the United States and

Thailand. An amount for selling, general and administrative expenses

and the statutory minimum for profit were added to the cost of

manufacturer. Petitioner added an amount for export packing to arrive a

total CV.

Based on a comparison of USP to FMV, the recalculated dumping

margin is 72.35 percent.

Fair Value Comparisons

Based on the data provided by the petitioner, there is reason to

believe that imports to furfuryl alcohol from the PRC, the Republic of

South Africa, and Thailand are being, or likely to be, sold at less

than fair value. If it becomes necessary at a later date to consider

the petition as a source of best information available, we may review

the calculations used to derive the allegations.

Initiation of Investigations

We have examined the petitions on furfuryl alcohol and have found

that they meet the requirements of section 732(b) of the Act and 19 CFR

353.13(a). Therefore, we are initiating antidumping duty investigations

to determine whether imports of furfuryl alcohol from the PRC, the

Republic of South Africa, and Thailand are being, or are likely to be,

sold in the United States at less than fair value. If these

investigations proceed normally, we will make our preliminary

determinations by November 7, 1994.

ITC Notification

Section 732(d) of the Act requires us to notify the ITC of these

actions, and we have done so.

Preliminary Determination by the ITC

The ITC will determine by July 15, 1994, whether there is a

reasonable indication that imports to furfuryl alcohol from the PRC,

Thailand, and the Republic of South Africa are causing material injury,

or threaten to cause material injury, to a U.S. industry. A negative

ITC determination will result in the investigations being terminated;

otherwise, these investigations will proceed according to statutory and

regulatory time limits.

This notice is published pursuant to section 732(c)(2) of the Act

and 19 CFR 353.13(b).

Dated: June 20, 1994.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 94-15535 Filed 6-24-94; 8:45 am]

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