Melamine From Germany, India, Japan, the Netherlands, Qatar, and Trinidad and Tobago: Initiation of Less-Than-Fair-Value Investigations

AGENCY:

Enforcement and Compliance, International Trade Administration, Department of Commerce.

DATES:

Applicable March 5, 2024.

FOR FURTHER INFORMATION CONTACT:

Kate Johnson (Germany) at (202) 482–4929; Charles DeFilippo (India) at (202) 482–3797; Carolyn Adie (Japan) at (202) 482–6250; Fred Baker (the Netherlands) at (202) 482–2924; Gorden Struck (Qatar) at (202) 482–8151; and Brittany Bauer (Trinidad and Tobago) at (202) 482–3860, AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue NW, Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

The Petitions

On February 14, 2024, the U.S. Department of Commerce (Commerce) received antidumping duty (AD) petitions concerning imports of melamine from Germany, India, Japan, the Netherlands, Qatar, and Trinidad and Tobago filed in proper form on behalf of Cornerstone Chemical Company (the petitioner). These AD Petitions were accompanied by countervailing duty (CVD) petitions concerning imports of melamine from Germany, India, Qatar, and Trinidad and Tobago.

Between February 16 and 28, 2024, Commerce requested supplemental information pertaining to certain aspects of the Petitions in separate supplemental questionnaires. The petitioner filed responses to the supplemental questionnaires between February 22 and 29, 2024.

In accordance with section 732(b) of the Tariff Act of 1930, as amended (the Act), the petitioner alleges that imports of melamine from Germany, India, Japan, the Netherlands, Qatar, and Trinidad and Tobago are being, or are likely to be, sold in the United States at less than fair value (LTFV) within the meaning of section 731 of the Act, and that imports of such products are materially injuring, or threatening material injury to, the melamine industry in the United States. Consistent with section 732(b)(1) of the Act, the Petitions were accompanied by information reasonably available to the petitioner supporting its allegations.

Commerce finds that the petitioner filed the Petitions on behalf of the domestic industry, because the petitioner is an interested party, as defined in section 771(9)(C) of the Act. Commerce also finds that the petitioner demonstrated sufficient industry support for the initiation of the requested LTFV investigations.

Periods of Investigation

Because the Petitions were filed on February 14, 2024, pursuant to 19 CFR 351.204(b)(1), the period of investigation (POI) for each of these LTFV investigations is January 1, 2023, through December 31, 2023.

Scope of the Investigations

The product covered by these investigations is melamine from Germany, India, Japan, the Netherlands, Qatar, and Trinidad and Tobago. For a full description of the scope of these investigations, see the appendix to this notice.

Comments on the Scope of the Investigations

On February 16, 2024, Commerce requested information and clarification from the petitioner regarding the proposed scope to ensure that the scope language in the Petitions is an accurate reflection of the products for which the domestic industry is seeking relief. On February 22, 2024, the petitioner provided clarifications and revised the scope. The description of merchandise covered by these investigations, as described in the appendix to this notice, reflects these revisions.

As discussed in the Preamble to Commerce's regulations, we are setting aside a period for interested parties to raise issues regarding product coverage ( i.e., scope). Commerce will consider all scope comments received from interested parties and, if necessary, will consult with interested parties prior to the issuance of the preliminary determinations. If scope comments include factual information, all such factual information should be limited to public information. To facilitate preparation of its questionnaires, Commerce requests that scope comments be submitted by 5:00 p.m. Eastern Time (ET) on March 25, 2024, which is 20 calendar days from the signature date of this notice. Any rebuttal comments, which may include factual information, must be filed by 5:00 p.m. ET on April 4, 2024, which is 10 calendar days from the initial comment deadline.

Commerce requests that any factual information that parties consider relevant to the scope of these investigations be submitted during that period. However, if a party subsequently finds that additional factual information pertaining to the scope of the investigations may be relevant, the party must contact Commerce and request permission to submit the additional information. All scope comments must be filed simultaneously on the records of the concurrent LTFV and CVD investigations.

Filing Requirements

All submissions to Commerce must be filed electronically via Enforcement and Compliance's Antidumping Duty and Countervailing Duty Centralized Electronic Service System (ACCESS), unless an exception applies. An electronically filed document must be received successfully in its entirety by the time and date it is due.

Comments on Product Characteristics

Commerce is providing interested parties an opportunity to comment on the appropriate physical characteristics of melamine to be reported in response to Commerce's AD questionnaires. This information will be used to identify the key physical characteristics of the subject merchandise in order to report the relevant cost of production (COP) accurately, as well as to develop appropriate product comparison criteria.

Interested parties may provide any information or comments that they feel are relevant to the development of an accurate list of physical characteristics. Specifically, they may provide comments as to which characteristics are appropriate to use as: (1) general product characteristics; and (2) product comparison criteria. We note that it is not always appropriate to use all product characteristics as product comparison criteria. We base product comparison criteria on meaningful commercial differences among products. In other words, although there may be some physical product characteristics utilized by manufacturers to describe melamine, it may be that only a select few product characteristics take into account commercially meaningful physical characteristics. In addition, interested parties may comment on the order in which the physical characteristics should be used in matching products. Generally, Commerce attempts to list the most important physical characteristics first and the least important characteristics last.

In order to consider the suggestions of interested parties in developing and issuing the AD questionnaires, all product characteristics comments must be filed by 5:00 p.m. ET on March 25, 2024, which is 20 calendar days from the signature date of this notice. Any rebuttal comments must be filed by 5:00 p.m. ET on April 4, 2024, which is 10 calendar days from the initial comment deadline. All comments and submissions to Commerce must be filed electronically using ACCESS, as explained above, on the record of each of the LTFV investigations.

Determination of Industry Support for the Petitions

Section 732(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 732(c)(4)(A) of the Act provides that 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, Commerce 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) determine industry support using a statistically valid sampling method to poll the “industry.”

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 Commerce to look to producers and workers who produce the domestic like product. The U.S. 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 Commerce and the ITC apply the same statutory definition regarding the domestic like product, they do so for different purposes and pursuant to a separate and distinct authority. In addition, Commerce'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.

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, the petitioner does not offer a definition of the domestic like product distinct from the scope of the investigations. Based on our analysis of the information submitted on the record, we have determined that melamine, as defined in the scope, constitutes a single domestic like product, and we have analyzed industry support in terms of that domestic like product.

In determining whether the petitioner has standing under section 732(c)(4)(A) of the Act, we considered the industry support data contained in the Petitions with reference to the domestic like product as defined in the “Scope of the Investigations,” in the appendix to this notice. To establish industry support, the petitioner provided its own production of the domestic like product in 2023. The petitioner stated that there are no other known producers of melamine in the United States and provided information to support its claim; therefore, the Petitions are supported by 100 percent of the U.S. industry. We relied on the data provided by the petitioner for purposes of measuring industry support.

Our review of the data provided in the Petitions and other information readily available to Commerce indicates that the petitioner has established industry support for the Petitions. First, the Petitions established support from domestic producers (or workers) accounting for more than 50 percent of the total production of the domestic like product and, as such, Commerce is not required to take further action in order to evaluate industry support ( e.g., polling). Second, the domestic producers (or workers) have met the statutory criteria for industry support under section 732(c)(4)(A)(i) of the Act because the domestic producers (or workers) who support the Petitions account for at least 25 percent of the total production of the domestic like product. Finally, the domestic producers (or workers) have met the statutory criteria for industry support under section 732(c)(4)(A)(ii) of the Act because the domestic producers (or workers) who support the Petitions 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 Petitions. Accordingly, Commerce determines that the Petitions were filed on behalf of the domestic industry within the meaning of section 732(b)(1) of the Act.

Allegations and Evidence of Material Injury and Causation

The petitioner alleges that the U.S. industry producing the domestic like product is being materially injured, or is threatened with material injury, by reason of the imports of the subject merchandise sold at LTFV. In addition, the petitioner states that subject imports from Germany, India, the Netherlands, Qatar, and Trinidad and Tobago exceed the negligibility threshold provided for under section 771(24)(A) of the Act.

With regard to Japan, while the allegedly dumped imports do not exceed the statutory requirements for negligibility, the petitioner alleges and provides supporting evidence that: (1) there is a reasonable indication that data obtained in the ITC's investigation will establish that imports exceed the negligibility threshold and (2) there is the potential that imports from Japan will imminently exceed the negligibility threshold and therefore, are not negligible for purposes of a threat determination. The petitioner's arguments regarding the reasonable indication that information obtained in the ITC's investigation will demonstrate that imports from Japan exceed the negligibility threshold are consistent with the SAA. Furthermore, the petitioner's arguments regarding the potential for imports from Japan to imminently exceed the negligibility threshold are consistent with the statutory criteria for “negligibility in threat analysis” under section 771(24)(A)(iv) of the Act, which provides that imports shall not be treated as negligible if there is a potential that subject imports from a country will imminently exceed the statutory requirements for negligibility.

The petitioner contends that the industry's injured condition is illustrated by the significant volume of subject imports; reduced market share; underselling and price depression and/or suppression; lost sales and revenues; decline in shipments, production, and capacity utilization; and adverse effect on financial performance. We assessed the allegations and supporting evidence regarding material injury, threat of material injury, causation, as well as negligibility, and we have determined that these allegations are properly supported by adequate evidence, and meet the statutory requirements for initiation. In accordance with section 771(7)(G)(ii)(III) of the Act, which provides an exception to the mandatory cumulation provision for imports from any country designated as a beneficiary country under the Caribbean Basin Economic Recovery Act (CBERA), we considered the petitioner's allegation of injury with respect to Trinidad and Tobago, a designated beneficiary under CBERA, independently of the allegations for Germany, India, Japan, the Netherlands, and Qatar, and found that the information provided satisfies the requirements for initiation.

Allegations of Sales at LTFV

The following is a description of the allegations of sales at LTFV upon which Commerce based its decision to initiate LTFV investigations of imports of melamine from Germany, India, Japan, the Netherlands, Qatar, and Trinidad and Tobago. The sources of data for the deductions and adjustments relating to U.S. price and normal value (NV) are discussed in greater detail in the Country-Specific AD Initiation Checklists.

U.S. Price

For Germany, India, Japan, the Netherlands, Qatar, and Trinidad and Tobago, the petitioner based export price (EP) on the average unit values (AUVs) derived from official import statistics for imports of melamine from these countries into the United States during the POI. For Germany, Japan, the Netherlands, Qatar, and Trinidad and Tobago, the petitioner also based EP on transaction-specific AUVs ( i.e., month- and port-specific AUVs) derived from official import statistics and tied to ship manifest data. For India and Qatar, the petitioner also based EP on pricing information for sales, or offers for sale, of melamine produced in and exported from each country. For each country, the petitioner made certain adjustments to U.S. price to calculate net ex-factory U.S. prices, where applicable.

Normal Value

For Germany, India, and Qatar, the petitioner based NV on home market prices obtained through market research for melamine produced in and sold, or offered for sale, in the respective countries during the POI. For India and Qatar, the petitioner provided information indicating that the prices for melamine sold or offered for sale in the respective countries were below the COP. Therefore, for India and Qatar, the petitioner calculated NV based on constructed value (CV).

For Japan, the petitioner stated that it was unable to obtain home market prices for melamine produced and sold in Japan and based NV on the POI AUV of publicly-available export data for exports of melamine from Japan to a third country, Italy. The petitioner provided information indicating that third country prices were below the COP and therefore based NV on CV.

For the Netherlands, the petitioner stated that it was unable to obtain home market or third country pricing information for melamine to use as a basis for NV. Therefore, for the Netherlands, the petitioner calculated NV based on CV.

For Trinidad and Tobago, the petitioner contends that the home market is not viable based on available information and based NV on the POI AUV of publicly-available export data for exports of melamine from Trinidad and Tobago to a third country, Germany. The petitioner provided information indicating that third country prices were below the COP and therefore based NV on CV.

For further discussion of CV for India, Japan, the Netherlands, Qatar, and Trinidad and Tobago, see the section “Normal Value Based on Constructed Value,” below.

Normal Value Based on Constructed Value

As noted above, for India, Japan, Qatar, and Trinidad and Tobago, the petitioner provided information indicating that the prices for melamine sold or offered for sale in the respective home market or in third country markets were below the COP. Also, as noted above for the Netherlands, the petitioner stated that it was unable to obtain home market or third country prices for melamine to use as a basis for NV. Therefore, for India, Japan, the Netherlands, Qatar, and Trinidad and Tobago, the petitioner calculated NV based on CV.

Pursuant to section 773(e) of the Act, the petitioner calculated CV as the sum of the cost of manufacturing, selling, general and administrative (SG&A), financial expenses, and profit. For each of these countries, in calculating the cost of manufacturing, the petitioner relied on its own production experience and input consumption rates, valued using publicly available information applicable to the respective countries or, for certain inputs, using its own costs. In calculating SG&A, financial expenses, and profit ratios, the petitioner relied on the fiscal year 2022 financial statements of a producer of identical or comparable merchandise domiciled in the respective countries, where applicable.

Fair Value Comparisons

Based on the data provided by the petitioner, there is reason to believe that imports of melamine from Germany, India, Japan, the Netherlands, Qatar, and Trinidad and Tobago are being, or are likely to be, sold in the United States at LTFV. Based on comparisons of EP to NV in accordance with sections 772 and 773 of the Act, the estimated dumping margins for melamine for each of the countries covered by this initiation are as follows: (1) Germany—139.74 to 218.73 percent; (2) India—393.82 to 632.74 percent; (3) Japan—102.53 to 127.69 percent; (4) the Netherlands—34.84 to 72.16 percent; (5) Qatar—143.75 to 504.23 percent; and (6) Trinidad and Tobago—49.78 to 146.85 percent.

Initiation of LTFV Investigations

Based upon the examination of the Petitions and supplemental responses, we find that they meet the requirements of section 732 of the Act. Therefore, we are initiating LTFV investigations to determine whether imports of melamine from Germany, India, Japan, the Netherlands, Qatar, and Trinidad and Tobago are being, or are likely to be, sold in the United States at LTFV. In accordance with section 733(b)(1)(A) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determinations no later than 140 days after the date of these initiations.

Respondent Selection

In the Petitions, the petitioner identified one company in Germany as a producer/exporter of melamine ( i.e., LAT Nitrogen Piesteritz GmbH), one company in India as a producer/exporter of melamine ( i.e., Guajarat State Fertilizer and Chemicals Limited), one company in Japan as a producer/exporter of melamine ( i.e., Mitsui Chemicals, Inc.), one company in the Netherlands as a producer/exporter of melamine ( i.e., OCI Nitrogen B.V.), two companies in Qatar as producers/exporters of melamine ( i.e., Qatar Melamine Company and Muntajat Qatar Chemical and Petrochemical Marketing and Distribution Company), and one company in Trinidad and Tobago as a producer/exporter of melamine ( i.e., Methanol Holdings (Trinidad) Limited) and provided independent third-party information as support. We currently know of no additional producers/exporters of melamine from Germany, India, Japan, the Netherlands, Qatar, and Trinidad and Tobago.

Accordingly, Commerce intends to individually examine all known producers/exporters in the investigations from these countries ( i.e., the companies cited above). We invite interested parties to comment on this issue. Such comments may include factual information within the meaning of 19 CFR 351.102(b)(21). Parties wishing to comment must do so within three business days of the publication of this notice in the Federal Register . Comments must be filed electronically using ACCESS. An electronically filed document must be received successfully in its entirety via ACCESS by 5:00 p.m. ET on the specified deadline. Because we intend to examine all known producers/exporters in Germany, India, Japan, the Netherlands, Qatar, and Trinidad and Tobago, if no comments are received or if comments received further support the existence of these sole producers/exporters in the respective countries, we do not intend to conduct respondent selection and will proceed to issuing the initial AD questionnaires to the companies identified. However, if comments are received which create a need for a respondent selection process, we intend to finalize our decisions regarding respondent selection within 20 days of publication of this notice.

Distribution of Copies of the Petitions

In accordance with section 732(b)(3)(A) of the Act and 19 CFR 351.202(f), copies of the public version of the Petitions have been provided to the governments of Germany, India, Japan, the Netherlands, Qatar, and Trinidad and Tobago via ACCESS. To the extent practicable, we will attempt to provide a copy of the public version of the Petitions to each exporter named in the Petitions, as provided under 19 CFR 351.203(c)(2).

ITC Notification

Commerce will notify the ITC of our initiation, as required by section 732(d) of the Act.

Preliminary Determinations by the ITC

The ITC will preliminarily determine, within 45 days after the date on which the Petitions were filed, whether there is a reasonable indication that imports of melamine from Germany, India, Japan, the Netherlands, Qatar, and/or Trinidad and Tobago are materially injuring, or threatening material injury to, a U.S. industry. A negative ITC determination for any country will result in the investigation being terminated with respect to that country. Otherwise, these LTFV investigations will proceed according to statutory and regulatory time limits.

Submission of Factual Information

Factual information is defined in 19 CFR 351.102(b)(21) as: (i) evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors of production under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by Commerce; and (v) evidence other than factual information described in (i)–(iv). Section 351.301(b) of Commerce's regulations requires any party, when submitting factual information, to specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted and, if the information is submitted to rebut, clarify, or correct factual information already on the record, to provide an explanation identifying the information already on the record that the factual information seeks to rebut, clarify, or correct. Time limits for the submission of factual information are addressed in 19 CFR 351.301, which provides specific time limits based on the type of factual information being submitted. Interested parties should review the regulations prior to submitting factual information in these investigations.

Particular Market Situation Allegation

Section 773(e) of the Act addresses the concept of particular market situation (PMS) for purposes of CV, stating that “if a particular market situation exists such that the cost of materials and fabrication or other processing of any kind does not accurately reflect the cost of production in the ordinary course of trade, the administering authority may use another calculation methodology under this subtitle or any other calculation methodology.” When an interested party submits a PMS allegation pursuant to section 773(e) of the Act, Commerce will respond to such a submission consistent with 19 CFR 351.301(c)(2)(v). If Commerce finds that a PMS exists under section 773(e) of the Act, then it will modify its dumping calculations appropriately.

Neither section 773(e) of the Act, nor 19 CFR 351.301(c)(2)(v), set a deadline for the submission of PMS allegations and supporting factual information. However, in order to administer section 773(e) of the Act, Commerce must receive PMS allegations and supporting factual information with enough time to consider the submission. Thus, should an interested party wish to submit a PMS allegation and supporting new factual information pursuant to section 773(e) of the Act, it must do so no later than 20 days after submission of a respondent's initial section D questionnaire response.

Extensions of Time Limits

Parties may request an extension of time limits before the expiration of a time limit established under 19 CFR 351.301, or as otherwise specified by Commerce. In general, an extension request will be considered untimely if it is filed after the expiration of the time limit established under 19 CFR 351.301, or as otherwise specified by Commerce. For submissions that are due from multiple parties simultaneously, an extension request will be considered untimely if it is filed after 10:00 a.m. ET on the due date. Under certain circumstances, Commerce may elect to specify a different time limit by which extension requests will be considered untimely for submissions which are due from multiple parties simultaneously. In such a case, we will inform parties in a letter or memorandum of the deadline (including a specified time) by which extension requests must be filed to be considered timely. An extension request must be made in a separate, standalone submission; under limited circumstances we will grant untimely filed requests for the extension of time limits, where we determine, based on 19 CFR 351.302, that extraordinary circumstances exist. Parties should review Commerce's regulations concerning the extension of time limits and the Time Limits Final Rule prior to submitting factual information in these investigations.

Certification Requirements

Any party submitting factual information in an AD or CVD proceeding must certify to the accuracy and completeness of that information. Parties must use the certification formats provided in 19 CFR 351.303(g). Commerce intends to reject factual submissions if the submitting party does not comply with the applicable certification requirements.

Notification to Interested Parties

Interested parties must submit applications for disclosure under administrative protective order in accordance with 19 CFR 351.305. Parties wishing to participate in these investigations should ensure that they meet the requirements of 19 CFR 351.103(d) ( e.g., by filing the required letter of appearance). Note that Commerce has amended certain of its requirements pertaining to the service of documents in 19 CFR 351.303(f).

This notice is issued and published pursuant to sections 732(c)(2) and 777(i) of the Act, and 19 CFR 351.203(c).

Appendix

Scope of the Investigations

The merchandise subject to these investigations is melamine (Chemical Abstracts Service (CAS) registry number 108–78–01, molecular formula C₃ H₆ N₆). Melamine is also known as 2,4,6-triamino-s-triazine; 1,3,5-Triazine-2,4,6-triamine; Cyanurotriamide; Cyanurotriamine; Cyanuramide; and by various brand names. Melamine is a crystalline powder or granule. All melamine is covered by the scope of these investigations irrespective of purity, particle size, or physical form. Melamine that has been blended with other products is included within this scope when such blends include constituent parts that have been intermingled, but that have not been chemically reacted with each other to produce a different product. For such blends, only the melamine component of the mixture is covered by the scope of these investigations. Melamine that is otherwise subject to these investigations is not excluded when commingled with melamine from sources not subject to these investigations. Only the subject component of such commingled products is covered by the scope of these investigations.

The subject merchandise is provided for in subheading 2933.61.0000 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheading and CAS registry number are provided for convenience and customs purposes, the written description of the scope is dispositive.