Notice of Final Determination of Sales at Less Than Fair Value: Ferrovanadium from the People's Republic of China

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of Final Determination of Sales at Less Than Fair Value.

EFFECTIVE DATE:

November 29, 2002.

FOR FURTHER INFORMATION CONTACT:

Karine Gziryan or Howard Smith, AD/CVD Enforcement, Office 4, Group II, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, DC 20230; telephone: (202) 482-4081, and (202) 482-5193, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930, as amended (the Act), by the Uruguay Round Agreements Act (URAA). In addition, unless otherwise indicated, all citations to the Department of Commerce's regulations refer to the regulations codified at 19 CFR part 351 (April 2002).

Final Determination

We determine that ferrovanadium from the People's Republic of China (PRC) is being sold, or is likely to be sold, in the United States at less than fair value (LTFV), as provided in section 735 of the Act. The estimated margins of sales at LTFV are shown in the Final Determination of Investigation section of this notice.

Background

On July 8, 2002, the Department of Commerce (the Department) published the preliminary determination of sales at less-than-fair-value in the antidumping duty investigation of ferrovanadium from the PRC. See Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Ferrovanadium from the People's Republic of China, 67 FR 45088 (July 8, 2002) (Preliminary Determination). Since the preliminary determination, the following events have occurred.

On July 17, 2002, the respondent, Pangang Group International Economic and Trading Corporation (Pangang), reported for the first time that one of its affiliates for which it had not reported factors of production information had produced ferrovanadium during the period of investigation (POI). However, in its July 17 submission, Pangang noted that none of the ferrovanadium produced by this company was sold or exported to the United States during the POI. In response to Pangang's July 17 submission, on July 19, 2002, the Department issued a memorandum to the file noting that we require Pangang to report factors of production only from the factory or factories which produced ferrovanadium that was sold to customers in the United States during the POI.

During July 2002, the Department conducted a verification of Pangang's sales and factors of production information. See Memorandum from Timothy P. Finn and Karine Gziryan to the File, “Verification of Sales and Factors of Production Information Reported By Pangang Group International Economic & Trading Corporation,” dated September 24, 2002. On July 15, 2002, Pangang filed a request for a public hearing in this investigation. However, no hearing was held in this investigation because Pangang withdrew its request for a hearing on September 30, 2002. Both the petitioners and Pangang filed surrogate value information and data on August 26, 2002. On September 5, 2002, Pangang filed information purportedly rebutting petitioners' August 26 factor value submission. On September 24, 2002, the Department rejected Pangang's September 5 rebuttal submission as untimely filed factual information.

Parties filed case and rebuttal briefs on October 1 and October 7, 2002, respectively. Pursuant to the Department's instructions, the petitioners removed certain untimely filed factual information from their rebuttal brief and resubmitted it on November 12, 2002.

Scope of the Investigation

The scope of this investigation covers all ferrovanadium regardless of grade, chemistry, form, shape, or size. Ferrovanadium is an alloy of iron and vanadium that is used chiefly as an additive in the manufacture of steel. The merchandise is commercially and scientifically identified as vanadium. It specifically excludes vanadium additives other than ferrovanadium, such as nitride vanadium, vanadium-aluminum master alloys, vanadium chemicals, vanadium oxides, vanadium waste and scrap, and vanadium-bearing raw materials such as slag, boiler residues and fly ash. Merchandise under the following Harmonized Tariff Schedule of the United States (HTSUS) item numbers 2850.00.2000, 8112.40.3000, and 8112.40.6000 are specifically excluded. Ferrovanadium is classified under HTSUS item number 7202.92.00. Although the HTSUS item number is provided for convenience and Customs purposes, the Department's written description of the scope of this investigation remains dispositive.

Period of Investigation

The POI is April 1, 2001, through September 30, 2001.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this proceeding and to which we have responded are listed in the Appendix to this notice and addressed in the Memorandum from Holly A. Kuga to Bernard T. Carreau, “Issues and Decision Memorandum for the Antidumping Duty Investigation of Ferrovanadium from the People's Republic of China,” dated concurrently with this notice (Decision Memorandum), which is hereby adopted by this notice. Parties can find a complete discussion of the issues raised in this investigation and the corresponding recommendations in this public memorandum which is on file in the Central Records Unit (CRU), room B-099 of the main Department building. In addition, a complete version of the Decision Memorandum can be accessed directly on the Web at http://ia.ita.doc.gov . The paper copy and electronic version of the Decision Memorandum are identical in content.

Non-Market Economy

The Department has treated the PRC as a non-market economy (NME) country in all its past antidumping investigations. See Notice of Final Determination of Sales at Less Than Fair Value: Honey from the People's Republic of China, 66 FR 50608 (October 4, 2001); Notice of Final Determination of Sales at Less Than Fair Value: Certain Folding Gift Boxes from the People's Republic of China, 66 FR 58115 (November 20, 2001). A designation as an NME country remains in effect until it is revoked by the Department. See section 771(18)(C) of the Act. The respondent in this investigation has not requested a revocation of the PRC's NME status. Therefore, we have continued to treat the PRC as a NME in this investigation. For further details, see the Preliminary Determination.

Separate Rates

In our Preliminary Determination, we found that the only responding company, Pangang, met the criteria for the application of separate, company-specific antidumping duty rates. We have not received any other information since the preliminary determination which would warrant reconsideration of our separates rates determination with respect to this company. For a complete discussion of the Department's determination that the respondent is entitled to a separate rate, see the Preliminary Determination.

The PRC-Wide Rate

In the Preliminary Determination, we found that the use of adverse facts available for the PRC-wide rate was appropriate for other exporters in the PRC based on our presumption that those respondents who failed to demonstrate entitlement to a separate rate constitute a single enterprise under common control by the Chinese government. The PRC-wide rate applies to all entries of the merchandise under investigation except for entries from Pangang.

When analyzing the petition for purposes of the initiation, the Department reviewed all of the data upon which the petitioners relied in calculating the estimated dumping margin and determined that the margin in the petition was appropriately calculated and supported by adequate evidence in accordance with the statutory requirements for initiation. In order to corroborate the petition margin for purposes of using it as adverse facts available, we examined the price and cost information provided in the petition in the context of our preliminary determination. For further details, see Memorandum from Mark Manning to Holly A. Kuga, “Corroboration of Secondary Information,” dated June 25, 2002. We received no comments on this decision and continue to find in this final determination that the rate contained in the petition, as recalculated, has probative value. Since we have received no comments regarding our decision to apply, as adverse facts available, the PRC-wide rate to all entries of the merchandise under investigation except for entries from Pangang, we have continued to apply this rate in the final determination. For further discussion, see Preliminary Determination.

Since the preliminary determination, we have obtained new information regarding several surrogate values. In order to take into account the more recent information, we recalculated the petition margin using, where possible, revised surrogate values to value the petitioners' consumption rates. As a result of this recalculation, the PRC-wide rate is, for the final determination, 66.71 percent. See Memorandum from Mark Manning to the File, “Corroboration of Secondary Information,” dated November 20, 2002.

Surrogate Country

For purposes of the final determination, we continue to find that South Africa remains the appropriate surrogate country for the PRC. We received comments from the petitioners in their brief, which are discussed in the accompanying Decision Memorandum at Comment 6. For further discussion and analysis regarding the surrogate country selection for the PRC, see the Preliminary Determination.

Verification

As provided in section 782(i) of the Act, we verified the information submitted by the respondent for use in our final determination. We used standard verification procedures including examination of relevant accounting and production records, and original source documents provided by the respondents. For changes from the Preliminary Determination as a result of verification, see the Changes Since the Preliminary Determination section below.

Changes Since the Preliminary Determination

Based on our findings at verification and on our analysis of the comments received, we have made adjustments to the calculation methodologies used in the preliminary determination. These adjustments are listed below and discussed in detail in the (1) Decision Memorandum, (2) Memorandum from the Team to the File, “Final Factors of Production Valuation Memorandum,” dated November 20, 2002, and (3) Memorandum from the Team to the File, “Calculation Memorandum for the Final Determination,” dated November 20, 2002.

1. -We accepted all changes identified by Pangang in its July 19, 2002, submission and all minor corrections presented at verification. For our final calculations, we used the updated consumption rates and factors of production that incorporate the changes identified in the documents listed above, submitted by Pangang on August 28, 2002.

2. -We reviewed the import data used in the preliminary determination to calculate surrogate values and removed from our calculations (1) data from NME countries, (2) data from countries with export subsidies (i.e., Indonesia, South Korea, and Thailand), (3) data with aberrational per-unit values, and (4) data attributed to South Africa from the South African import statistics. Furthermore, where possible, we based our surrogate values on data from the months covering the POI.

3. -We included in our calculation of normal value certain auxiliary materials found during verification.

4. -We calculated the surrogate value for vanadium slag from South African export data contemporaneous with the POI obtained from the World Trade Atlas (WTA), rather than the South African import data reported by the United Nations which was used for the preliminary determination.

5. -We recalculated the per-unit amount of vanadium slag consumed in the production process based on the actual chemical content of the material, rather than the theoretical content as was done in the preliminary determination.

6. -We removed the “soda” factor from the production of FeV50 and FeV80 because we verified that soda was actually consumed in the production of the intermediate products V2O3 and V2O5.

7. -We renamed the “lime” factor consumed in the production of V2O3 and V2O5 to “soda” and valued this factor with a surrogate value derived from South African import statistics contemporaneous with the POI obtained from the WTA for the HTSUS category for disodium carbonate.

8. -We granted Pangang an offset for its sales of V2O3 slag and V2O5 slag and valued these by-products with the same surrogate value used to value vanadium slag. We adjusted the surrogate value to account for the difference in the vanadium content.

9. -We granted Pangang an offset for its sales of aluminum oxide slag and valued this by-product with the same surrogate value used to value vanadium slag. We adjusted the surrogate value to account for the difference in the vanadium content.

10. -We valued iron drums with South African import statistics contemporaneous with the POI obtained from the WTA, rather than with South African import data for 2000 reported by the United Nations, which was used in the preliminary determination.

11. -We calculated separate surrogate values for wooden boxes and wooden pallets from the South African import statistics contemporaneous with the POI obtained from the WTA. We identified separate HTSUS categories for wooden boxes and wooden pallets rather than relying solely on the HTSUS category for wooden pallets as the surrogate value for both factors as was done in the preliminary determination.

12. -We revised our calculation of the surrogate value for natural gas and used gas prices obtained from the International Energy Agency that are contemporaneous with the POI rather than prices from a period before the POI as was done in the preliminary determination.

13. -We inflated surrogate values from periods before the POI with inflator factors derived from producer price index data from South Africa.

14. -We revised the surrogate value for labor and are using the 2000 wage rate for China rather than the 1999 wage rate as was done in the preliminary determination.

15. -We calculated the surrogate value for sulfuric acid from South African export data contemporaneous with the POI obtained from the WTA rather than South African import data which was used for the preliminary determination.

16. -We revised our calculation of freight costs for the factors of production to include the revised distances identified during verification.

17. -We revised our calculation of the net U.S. price to deduct marine insurance where appropriate.

Continuation of Suspension of Liquidation

In accordance with section 735(c)(1)(B)(ii) of the Act, we are directing the Customs Service to continue suspension liquidation of entries of subject merchandise from the PRC that are entered, or withdrawn from warehouse, for consumption on or after July 8, 2002 (the date of publication of the Preliminary Determination in the Federal Register). We will instruct the Customs Service to require a cash deposit or the posting of a bond equal to the weighted-average amount by which the normal value exceeds the U.S. price, as indicated in the chart below. These suspension-of-liquidation instructions will remain in effect until further notice.

Final Determination of Investigation

We determine that the following weighted-average percentage margins exist for the period April 1, 2001, through September 30, 2001:

The PRC-wide rate applies to all entries of the subject merchandise except for entries from Pangang.

International Trade Commission Notification

In accordance with section 735(d) of the Act, we have notified the International Trade Commission (ITC) of our determination. As our final determination is affirmative, the ITC will determine, within 45 days, whether these imports are materially injuring, or threaten material injury to, the U.S. industry. If the ITC determines that material injury, or threat of material injury does not exist, the proceeding will be terminated and all securities posted will be refunded or canceled. If the ITC determines that such injury does exist, the Department will issue an antidumping duty order directing Customs officials to assess antidumping duties on all imports of subject merchandise entered for consumption on or after the effective date of the suspension of liquidation.

Notification Regarding Administrative Protective Order (APO)

This notice also serves as a reminder to parties subject to APO of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely notification of return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.

This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act

Appendix Issues in Decision Memorandum

Comment 1: -Whether Pangang Group International Economic & Trading Corporation (Pangang) Should Have Reported Factors of Production for All of its Production Facilities

Comment 2: -Unreported Factors of Production

Comment 3: -Whether Pangang Incorrectly Reported the Consumption Quantity of a Major Input

Comment 4: -Whether the Department Should Continue to Use South Africa as the Surrogate Market Economy Country

Comment 5: -Whether the Department Should Calculate the Surrogate Value for Vanadium Slag Using World Trade Atlas (WTA) Data or United Nations Commodity Trade Statistics (UNCTS) Data

Comment 6: -Whether the Department Should Value Vanadium Slag Using Actual or Theoretical Consumption Quantities

Comment 7: -Whether the Department Should Continue to Add Soda Consumption Quantities to the Reported Factors of Production

Comment 8: -Whether the Department Should Value Soda as Sodium Hydroxide or Sodium Carbonate

Comment 9: -Whether the Department Should Make a Concentration Adjustment to its Surrogate Value for Ammonium Sulphate

Comment 10: -Whether the Department Should Allow an Offset for Aluminum Oxide Slag

Comment 11: -Whether the Department Should Use Petitioners' Suggested Methodology to Value Pangang's Vanadium Slag Offset

Comment 12: -Whether the Department Should Value the Consumption of Iron Drums Using WTA Data

Comment 13: -Whether the Department Should Revise the Surrogate Value for Wooden Pallets and Wooden Boxes

Comment 14: -Whether the Department Should Continue to Value Natural Gas Using IEA Data

Comment 15: -Whether the Department Made a Ministerial Error in Calculating the Surrogate Value for Water

Comment 16: -Whether the Department Should Use the Wholesale Price Index (WPI) or Producer Price Index (PPI) to Inflate Factor Values

Comment 17: -Whether the Department Should Revise its Profit Ratio Calculation

Comment 18: Whether the Department Should Revise its Labor Rate Calculation

Comment 19: -Whether the Surrogate Value for Sulfuric Acid is Based On Aberrational Data

Comment 20: -Whether the Department Should Include in Normal Value the Value of the Factors of Production for Grinding Raw Vanadium Slag

Comment 21: -Whether to Correct Certain Information Relating to Inland Freight

Comment 22: -Whether to Deduct Marine Insurance in Calculating the Net Price for One U.S. Sale