Manganese Metal From the People's Republic of China; Preliminary Results of Antidumping Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-840]

Manganese Metal From the People's Republic of China; Preliminary

Results of Antidumping Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of preliminary results of antidumping duty

administrative review of manganese metal from the People's Republic of

China.

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SUMMARY: In response to requests by Elkem Metals Company and Kerr-McGee

Chemical Corporation and by China Hunan International Economic

Development Corporation, China Metallurgical Import & Export Hunan

Corporation/Hunan Nonferrous Metals Import & Export Associated

Corporation, Minmetals Precious & Rare Minerals Import & Export

Corporation, and China National Electronics Import and Export Hunan

Company, the Department of Commerce is conducting an administrative

review of the antidumping duty order on manganese metal from the

People's Republic of China. The period of review is June 14, 1995

through January 31, 1997.

We have preliminarily determined that sales have been made below

normal value. If these preliminary results are adopted in our final

results of administrative review, we will instruct U.S. Customs to

assess antidumping duties equal to the difference between the export

price and NV on all appropriate entries.

We invite interested parties to comment on these preliminary

results. Parties who submit comments in this proceeding are requested

to submit with each argument (1) a statement of the issue and (2) a

brief summary of the argument.

EFFECTIVE DATE: November 7, 1997.

FOR FURTHER INFORMATION CONTACT: Daniel Lessard or Greg Campbell,

Antidumping/Countervailing Duty Enforcement, Office I, Import

Administration, International Trade Administration, U.S. Department of

Commerce, 14th Street and Constitution Avenue NW., Washington, DC

20230; telephone (202) 482-1778 or (202) 482-2239, respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute

Unless otherwise indicated, all citations to the Tariff Act of

1930, as amended (the Act), are references to the provisions effective

January 1, 1995, the effective date of the amendments made to the Act

by the Uruguay Round Agreements Act (URAA). In addition, all references

to the Department's regulations are to 19 CFR part 353 (April 1997).

Background

On February 6, 1996, the Department of Commerce (the Department)

published in the Federal Register (61 FR 4415) the antidumping duty

order on manganese metal from the People's Republic of China (PRC). On

February 3, 1997, we published a notice of opportunity to request an

administrative review of the order for the period June 14, 1995 through

January 31, 1997 (62 FR 4978). In accordance with 19 CFR 353.22(a),

Elkem Metals Company and Kerr-McGee Chemical Corporation (petitioners)

and China Hunan International Economic Development Corporation (HIED),

China Metallurgical Import & Export Hunan Corporation/Hunan Nonferrous

Metals Import & Export Associated Corporation (CMIECHN/CNIECHN), and

Minmetals Precious & Rare Minerals Import & Export Corporation

(Minmetals) requested that we conduct an administrative review. On

March 18, 1997, in accordance with 19 CFR 353.22(c), we published a

notice of initiation of this antidumping duty administrative review (62

FR 12793) for the period of review (POR).

The Department is now conducting this administrative review in

accordance with section 751 of the Act.

Scope of Review

The merchandise covered by this review 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 administrative review, 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.

Verification

As provided in section 782(i) of the Act, we verified factor

information provided by Xiang Tan Manganese Mine (XTMM) and Hunan

Special Metal Material Plant (Special), using standard verification

procedures, including on-site inspection of manufacturers' facilities,

the examination of relevant sales and financial records, and selection

of original documentation containing relevant information. Our

verification results are outlined in the public versions of the

verification reports.

Separate Rates

1. Background and Summary of Findings

It is the Department's standard policy to assign all exporters of

the merchandise subject to review in non-market-economy (NME) countries

a single rate unless an exporter can demonstrate an absence of

government control, both in law and in fact, with respect to exports.

To establish whether an exporter is sufficiently independent of

government control to be entitled to a separate rate, the Department

analyzes the exporter in light of the criteria established in the Final

Determination of Sales at Less Than Fair Value: Sparklers from the

People's Republic of China (56 FR 20588, May 6, 1991) (Sparklers), as

amplified in the Final Determination of Sales at Less Than Fair Value:

Silicon Carbide from the People's Republic of China (59 FR 22585, May

2, 1994) (Silicon Carbide). Evidence supporting, though not requiring,

a finding of de jure absence of government control over export

activities includes: (1) An absence of restrictive stipulations

associated with an individual exporter's business and export licenses;

(2) any legislative enactments decentralizing control of companies; and

(3) any other formal measures by the government decentralizing control

of companies. See Sparklers at 20589. A de facto analysis of absence of

government control over exports is based on four factors--whether the

respondent: (1) Sets its own export prices independent from the

government and other exporters; (2) can retain the proceeds from its

export sales; (3) has the authority to negotiate and sign contracts;

and (4) has autonomy from the government regarding the selection of

management. See Silicon Carbide at 22587; see also Sparklers at 20589.

In our final determination of sales at less than fair value (LTFV),

the Department determined that there was de jure and de facto absence

of government control of each company's export activities and

determined that each company warranted a company-

[[Page 60227]]

specific dumping margin. See Final Determination of Sales at Less Than

Fair Value: Manganese Metal from the People's Republic of China, 60 FR

56045 (Manganese Metal). For this period of review, HIED and CMIECHN/

CNIECHN have responded to the Department's request for information

regarding separate rates. We have found that the evidence on the record

is consistent with the final determination in the LTFV investigation

and continues to demonstrate an absence of government control, both in

law and in fact, with respect to their exports, in accordance with the

criteria identified in Sparklers and Silicon Carbide.

For Minmetal and China National Electronics Import and Export Hunan

Company (CEIEC), which had no sales during this POR, the company-

specific rates of 5.88 percent and 11.77 percent, respectively, from

the LTFV investigation remain unchanged.

Export Price

For sales made by HIED and CMIECHN/CNIECHN to the United States, we

calculated an export price, in accordance with section 772(a) of the

Act, because the subject merchandise was sold to unrelated purchasers

in the United States prior to importation into the United States.

We calculated export price based on the price to unrelated

purchasers. We deducted an amount, when appropriate, for foreign inland

freight, ocean freight, and marine insurance. Generally, the costs for

these items were valued in the surrogate country. However, where

transportation services were purchased from market economy carriers and

paid for in market economy currency, we used the cost actually incurred

by the exporter.

Normal Value

For companies located in NME countries, section 773(c)(1) of the

Act provides that the Department shall determine normal value (NV)

using a factors-of-production methodology if (1) the merchandise is

exported from an NME country, and (2) the information does not permit

the calculation of NV using home-market prices, third-country prices,

or constructed value under section 773(a) of the Act.

The Department has treated the PRC as an NME country in all

previous antidumping cases. In accordance with section 771(18)(C)(i) of

the Act, any determination that a foreign country is a NME country

shall remain in effect until revoked by the administering authority.

None of the parties to this proceeding has contested such treatment in

this review. Furthermore, available information does not permit the

calculation of NV using home market prices, third country prices or CV

under section 773(a) of the Act. Therefore, we treated the PRC as a NME

country for purposes of this review and calculated NV by valuing the

factors of production in a comparable market economy country which is a

significant producer of comparable merchandise. Factors of production

include, but are not limited to: (1) Hours of labor required; (2)

quantities of raw materials employed; (3) amounts of energy and other

utilities consumed; and (4) representative capital cost, including

depreciation.

In accordance with section 773(c)(4) of the Act and section

353.52(c) of our regulations, we determined that India is comparable to

the PRC in terms of (1) per capita gross national product (GNP), (2)

the growth rate in per capita GNP, and (3) the national distribution of

labor. In addition, India is a significant producer of comparable

merchandise. Therefore, for this review, we selected India as the

surrogate on the basis of the above criteria, and have used publicly

available information relating to India, unless otherwise noted, to

value the various factors of production. (See memorandum to Susan

Kuhbach from Jeff May, dated May 28, 1997, ``Manganese Metal from the

PRC: Nonmarket Economy Status and Surrogate Country Selection''

(attached to June 25, 1997 letters to interested parties), and

memorandum to Richard W. Moreland from Team, dated October 24, 1997,

which are in the file in the Central Records Unit (room B099 of the

Main Commerce building).)

For purposes of calculating NV, we valued PRC factors of

production, in accordance with section 773(c)(1) of the Act. In

examining surrogate values, we selected, where possible, the publicly

available value which was: (1) An average non-export value; (2)

representative of a range of prices within the POR or most

contemporaneous with the POR; (3) product-specific; and (4) tax-

exclusive. Where we could not obtain a POR-representative price for an

appropriate surrogate value, we selected a value in accordance with the

remaining criteria mentioned above and which was the closest in time to

the POR. In accordance with this methodology, we valued the factors as

follows:

We valued manganese ore using a September 1993 export

price quote from a Brazilian manganese mine for manganese carbonate

lump ore. (For a further discussion of this issue, please refer to the

October 24, 1997 memorandum to Richard W. Moreland from Team.) While it

is our normal practice to apply an inflation adjustment to prices

predating the period of review, in this case, we have information which

indicates that prices for manganese ore have fallen over time.

Therefore, we adjusted the price to account for declining manganese ore

prices between September 1993 and the POR.

For the value of process chemicals used in the production

process of manganese metal, we used values obtained from the following

Indian sources: Indian Chemical Weekly (June 95-May 1996); the Monthly

Trade Statistics of Foreign Trade of India, Volume II--Imports,

February 1996 (Indian Import Statistics); and the Indian Minerals

Yearbook: 1995. Where necessary, we adjusted these values to reflect

inflation up to the POR using wholesale price indices (WPI) published

by the International Monetary Fund (IMF). Additionally, we adjusted to

account for freight costs incurred between the suppliers and manganese

metal producers.

For labor values, we used data from the 1996 Yearbook of

Labor Statistics (YLS) published by the United Nations. We adjusted

these rates to reflect inflation up to the POR using the consumer price

indices (CPI) published by the IMF. We used the CPI, rather than the

WPI, for calculating the inflation adjustment for labor because the

Department views the CPI as more representative of changes in wage

rates, while the WPI is more representative of prices for material

goods.

For factory overhead, selling, general, and administrative

expenses (SG&A), and profit values, we used information from the

January 1997 Reserve Bank of India Bulletin for the Indian industry

group ``Processing and Manufacturing: Metals, Chemicals, and Products

Thereof.'' To value factory overhead, we calculated the ratio of

factory overhead expenses to the cost of materials, labor, and energy.

From the same source, we were able to calculate the selling, general &

administrative (SG&A) expense as a percentage of the cost of

manufacturing and profit as a percentage of the cost of production

(i.e., the cost of manufacturing plus SG&A).

For most packing materials values, we used the per

kilogram values obtained from the Indian Import Statistics. For one

packing material, we used a price quote from an Indian manufacturer and

adjusted the value to reflect inflation up to the POR using the WPI

published by the IMF. We used this price quote rather than the Indian

Import Statistics because the quoted

[[Page 60228]]

price was for the appropriate type of container used, whereas the

Indian Import Statistics were aggregated over various types of

containers. We made further adjustments to account for freight costs

incurred between the PRC supplier and manganese metal producers.

To value electricity, we used the average rate applicable

to large industrial users throughout India as reported in the 1995

Confederation of Indian Industries Handbook of Statistics. We adjusted

the March 1, 1995 value to reflect inflation up to the POR using the

WPI published by the IMF.

To value rail freight, we relied upon rates quoted by a

manganese mine in India. We adjusted the rate to reflect inflation up

to the POR using WPI published by the IMF.

To value truck freight, we used a rate derived from a

newspaper article in the April 20, 1994 issue of The Times of India. We

adjusted the rate to reflect inflation up to the POR using WPI

published by the IMF.

Preliminary Results of the Review

As a result of our comparison of the EP to NV, we preliminarily

determine that the following dumping margins exist for the period June

14, 1995, through January 31, 1997:

------------------------------------------------------------------------

Margin

Manufacturer exporter (percent)

------------------------------------------------------------------------

HIED....................................................... 11.00

CMIECHN/CNIECHN............................................ 6.43

Minmetals.................................................. 5.88

CEIEC...................................................... 11.77

Country-Wide Rate.......................................... 143.32

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Parties to the proceeding may request disclosure within five days

of the date of publication of this notice. Any interested party may

request a hearing within 10 days of publication. Any hearing, if

requested, will be held approximately 44 days after the publication of

this notice. Interested parties may submit written comments (case

briefs) within 30 days of the date of publication of this notice.

Rebuttal comments (rebuttal briefs), which must be limited to issues

raised in the case briefs, may be filed not later than 37 days after

the date of publication. The Department will issue a notice of final

results of this administrative review, including the results of its

analysis of issues raised in any such written comments, within 120 days

of publication of these preliminary results.

The Department shall determine, and the Customs Service shall

assess, antidumping duties on all appropriate entries. Individual

differences between EP and NV may vary from the percentages stated

above. We have calculated an importer-specific duty assessment rate

based on the ratio of the total amount of AD duties calculated for the

examined sales made during the POR to the total value of subject

merchandise entered during the POR. In order to estimate the entered

value, we subtracted international movement expenses (e.g.,

international freight and marine insurance) from the gross sales value.

This rate will be assessed uniformly on all entries of that particular

importer made during the POR. The Department will issue appraisement

instructions directly to the Customs Service.

Furthermore, the following cash deposit requirements will be

effective upon publication of the final results of this administrative

review for all shipments of the subject merchandise entered, or

withdrawn from warehouse, for consumption on or after the publication

date, as provided for by section 751(a)(1) of the Act: (1) for the PRC

companies that have separate rates and were reviewed (HIED and CMIECN/

CNIECN), the cash deposit rates will be the rates for these firms

established in the final results of this review; (2) for Minmetals and

CEIEC, which we determined to be entitled to a separate rate in the

LTFV investigation but which did not have shipments to the United

States during the POR, the rates will continue to be 5.88 percent and

11.77 percent, respectively, the rates which currently apply to these

companies; and (3) for all other PRC exporters, the cash deposit rate

will be 143.32 percent. These deposit requirements, when imposed, shall

remain in effect until publication of the final results of the next

administrative review.

This notice also serves as a preliminary reminder to importers of

their responsibility under 19 CFR 353.26 to file a certificate

regarding the reimbursement of antidumping duties prior to liquidation

of the relevant entries during this review period. Failure to comply

with this requirement could result in the Secretary's presumption that

reimbursement of antidumping duties occurred and the subsequent

assessment of double antidumping duties.

This administrative review and notice are in accordance with

section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.

Dated: October 31, 1997.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 97-29494 Filed 11-6-97; 8:45 am]

BILLING CODE 3510-DS-P