Initiation of Antidumping Duty Investigation: Manganese Metal From the People's Republic of China (PRC)

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-840]

Initiation of Antidumping Duty Investigation: Manganese Metal

From the People's Republic of China (PRC)

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: December 2, 1994.

FOR FURTHER INFORMATION CONTACT: Edward Easton or John Brinkmann,

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;

telephone: (202) 482-1777 or (202) 482-5288, respectively.

Initiation of Investigation

The Petition

On November 8, 1994, we received a petition filed in proper form

from KMCC of Oklahoma City, Oklahoma, and ELKEM, of Pittsburgh,

Pennsylvania (the petitioners). At the request of the Department of

Commerce (the Department), the petitioners filed a supplement to

support and clarify the data in the petition on November 22, 1994. In

accordance with 19 CFR 353.12 (1994), the petitioners allege that

manganese metal is being, or is 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 these imports are

materially injuring, or threaten material injury to, a U.S. industry.

Scope of Investigation

The subject merchandise in this investigation is manganese metal,

which is composed principally of manganese, by weight, but also

contains some impurities such as carbon, sulfur, phosphorous, iron and

silicon. Manganese metal contains by weight not less than 95 percent

manganese. All compositions, forms and sizes of manganese metal are

included within the scope of this investigation, including metal flake,

powder, compressed powder, and fines. The subject merchandise is

currently classifiable under subheadings 8111.00.45.00 and

8111.00.60.00 of the Harmonized Tariff Schedule of the United States

(HTSUS). Although the HTSUS subheadings are provided for convenience

and customs purposes, our written description of the scope of this

proceeding is dispositive.

United States Price and Foreign Market Value

The petitioners based United States price (USP) on observations of

price quotations obtained for manganese metal from the PRC from

December 1993 through May 1994. The terms of the prices observed in the

salepersons' call reports included delivery to the customer. In

calculating USP, the petitioners deducted a ten percent trading company

commission, a U.S. port-to-customer delivery charge, imputed ocean

freight, and U.S. duty. The Department did not allow the ten percent

trading company commission as a deduction to U.S. price because

petitioners could not support their assumption that the ten percent

trading company commission applied to imports of manganese metal from

the PRC.

The petitioners contend that the PRC is a non-market economy (NME)

country within the meaning of section 771(18)(A) of the Act. The

Department has determined in all previous investigations that the PRC

is an NME, and the presumption of NME status continues for purposes of

initiation of this investigation. See, e.g., Final Determination of

Sales at Less than Fair Value: Certain Paper Clips from the PRC, 59 FR

51168 (October 7, 1994).

In accordance with section 773(c) of the Act, foreign market value

in NME cases is based on NME producers' factors of production, valued

in a market economy country. Consistent with Department practice,

absent evidence that the PRC government determines which of its

factories shall produce for export to the United States, we intend, for

purposes of this investigation, to base FMV only on those factories

that produced manganese metal sold to the United States during the

period of investigation (POI).

In the course of this investigation, parties will have the

opportunity to address our designation of the PRC as an NME and provide

relevant information and argument related to the issues of the PRC's

NME status and granting of separate rates to individual exporters. In

addition, parties will have the opportunity in this investigation to

submit comments on whether FMV should be based on prices or costs in

the PRC consistent with section 773(c)(1)(B) of the Act. See Amendment

to Final Determination of Sales at Less Than Fair Value and Amendment

to Antidumping Duty Order: Chrome-Plated Lug Nuts from the People's

Republic of China, 57 FR 15052 (April 24, 1992).

Conforming with Department practice, the petitioners calculated FMV

on the basis of the valuation of the factors of production and,

claiming that their production process is similar to the Chinese

production process, based the factors of production on their own

experience. The factors of production were valued, where possible, on

publicly available published information pertaining to India. The

petitioners argue that India is both a country at a comparable level of

economic development to the PRC and a significant producer of

comparable merchandise, thus meeting the requirements of section

773(c)(4) of the Act. For purposes of this initiation, we have accepted

India as an appropriate surrogate country selection.

Where Indian values were not available, the petitioners valued the

factors of production using either a ratio based on their own

experience or their own costs.

In accordance with section 773(c)(1)(B) of the Act, the

petitioners' FMV consisted of the sum of values assigned to materials,

labor, energy, overhead and selling, general and administrative (SG&A)

expenses. Certain of these factor values were adjusted for inflation.

Pursuant to section 773(e)(1) of the Act, the petitioners added to the

cost of manufacturing (COM), overhead and SG&A expenses, the statutory

minimum of eight percent for profit.

Based on our analysis of the petition and the subsequent supplement

to the petition, we have made certain adjustments to the petitioners'

FMV calculation as follows:

(1) we disallowed all factors valued by using the petitioners'

own costs;

(2) we recalculated factory overhead and depreciation expenses

using the statistics in the December 1992 Reserve Bank of India

Bulletin. This source is publicly available and has been used to

value factory overhead in other investigations of imports from the

PRC;

(3) for the purpose of initiating this investigation, we

recalculated the valuation of several process chemicals, using data

from the Chemical Marketing Reporter. This information was supplied

by the petitioners in their November 22, 1994, supplement to the

petition. We accepted this surrogate information for the purpose of

initiating the investigation because it is information that is

reasonably available to the petitioners for supporting their

allegations, within the meaning of section 732(b) of the Act.

(4) we recalculated electrical consumption using the industrial

rate for electricity in Indonesia, an appropriate surrogate country

at a comparable level of economic development to the PRC. In our

recent investigations of magnesium from the PRC, we found that the

Indian rate for electricity was inappropriate. See Preliminary

Determinations of Sales at Less than Fair Value and Postponement of

Final Determinations: Pure Magnesium and Alloy Magnesium from the

People's Republic of China, 59 FR 55424, 55426, November 7, 1994.

Fair Value Comparisons

Based on a comparison of USP and FMV, the petitioners' alleged

dumping margins, as revised by the Department, range from 104.77

percent to 143.32 percent.

Initiation of Investigation

Pursuant to section 732(c) of the Act, the Department must

determine, within 20 days after a petition is filed, whether a petition

alleges the elements necessary for the imposition of a duty under

section 731 of the Act and whether the petition contains information

reasonably available to the petitioner supporting the allegations.

We have examined the petition for manganese metal from the PRC, as

amended, and have found that it meets the requirements of section

732(b) of the Act. Therefore, we are initiating an antidumping duty

investigation to determine whether imports of manganese metal from the

PRC are being, or are likely to be, sold in the United States at less

than fair value. If this investigation proceeds normally, we will make

our preliminary determination by April 27, 1995.

International Trade Commission (ITC) Notification

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

action and we have done so.

Preliminary Determination by the ITC

The ITC will determine by December 23, 1994, whether there is a

reasonable indication that imports of manganese metal from the PRC are

materially injuring, or threatening material injury to, a U.S.

industry. Pursuant to section 733(a) of the Act, a negative ITC

determination will result in the investigation being terminated;

otherwise, the investigation will proceed according to statutory and

regulatory time limits.

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

and 19 CFR 353.13(b).

Dated: November 28, 1994.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 94-29727 Filed 12-1-94; 8:45 am]

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