Pure Magnesium from the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review, 32549-32556 [E8-12869]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 73, Number 111 (Monday, June 9, 2008)]
[Notices]
[Pages 32549-32556]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-12869]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-570-832


Pure Magnesium from the People's Republic of China: Preliminary 
Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (``the Department'') is conducting 
the administrative review of the antidumping duty order on pure 
magnesium from the People's Republic of China (``PRC'') covering the 
period May 1, 2006, through April 30, 2007. We have preliminarily 
determined that sales have been made below normal value. If these 
preliminary results are adopted in our final results of this review, we 
will instruct U.S. Customs and Border Protection (``CBP'') to assess 
antidumping duties on entries of subject merchandise during the period 
of review (``POR''), for which the importer-specific assessment rates 
are above de minimis.
    Interested parties are invited to comment on these preliminary 
results. We intend to issue the final results no later than 120 days 
from the date of publication of this notice.

EFFECTIVE DATE: June 9, 2008.

FOR FURTHER INFORMATION CONTACT: Eugene Degnan or Robert Bolling, AD/
CVD Operations, Office 8, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
0414 and (202) 482-3434, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On May 1, 2007, the Department published a notice of opportunity to 
request an administrative review of the antidumping duty order on pure 
magnesium from the PRC for the period May 1, 2006, through April 30, 
2007. See Antidumping or Countervailing Duty Order, Finding, or 
Suspended Investigation: Opportunity to Request

[[Page 32550]]

Administrative Review, 72 FR 23796. On May 25, 2005, US Magnesium LLC 
(``US Magnesium'' or ``Petitioner'') requested that the Department 
conduct an administrative review of Tianjin Magnesium International, 
Co.'s (``TMI's'') exports of pure magnesium to the United States during 
the period May 1, 2006, through April 30, 2007. On May 30, 2007, TMI 
filed a request for review of its exports, and requested a one-year 
deferral\1\ of initiation contending that because TMI began shipping 
late in the POR, consolidating its shipments with the next review would 
be more efficient than conducting two reviews. On May 31, 2007, Shanxi 
Datuhe Coke & Chemicals Co., Ltd. (``Datuhe'') requested that the 
Department conduct an administration review of its sales of pure 
magnesium to the United States during the POR. On June 20, 2007, TMI 
filed a letter stating the deferral should be granted as there was no 
objection by any party within the 15-day regulatory deadline. On June 
28, 2007, Economic Consulting Services LLC (``ECS'') submitted a letter 
stating that, as the lead firm representing Petitioner, it had not been 
served with TMI's request for an administrative review and deferral of 
that review, and was not aware of this request until TMI's June 20, 
2007, submission. ECS stated it has long been the lead representative 
for Petitioner and, because it was not notified of TMI's deferral 
request, asked that the Department: (1) reject TMI's request for the 
deferral as improperly served; or (2) grant US Magnesium an extension 
of time to file an objection to TMI's deferral request. On June 29, 
2007, we initiated an administrative review of the order on pure 
magnesium with respect to Datuhe, but deferred initiating a review with 
respect to TMI because no party objected to TMI's deferral request 
within 15 days. See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews, 72 FR 35690. On July 6, 2007, TMI responded to 
ECS's request, stating that: (1) it properly served the legal 
representative of US Magnesium (i.e., King & Spalding); as ECS is not 
the legal representative, it has no standing to make a valid claim 
regarding service; and (2) as the May 25, 2007, request for review was 
submitted by ECS, not a legal representative of the domestic party, the 
request should be removed from the record. On September 26, 2008, the 
Department issued a memorandum granting Petitioner an extension of time 
to file an objection to the request of TMI to defer the initiation of 
the administrative review with respect to TMI. See Memorandum to the 
File: ``Granting Petitioner an Extension of Time to File an Objection 
to Respondent's Deferral Request,'' dated September 26, 2007. On 
September 28, 2007, Petitioner objected to TMI's deferral request. On 
January 28, 2008, the Department published in the Federal Register a 
notice of initiation of the antidumping duty administrative review of 
pure magnesium from the PRC for the period May 1, 2006, through April 
30, 2007, with respect to TMI. See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews, 73 FR 4831.
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    \1\ Under 19 CFR 351.213(c), ``the Secretary may defer the 
initiation of an administrative review, in whole or in part, for one 
year if: the review request is accompanied by a request to defer, 
and no party (i.e., exporter, producer, importer or domestic 
interested party) objects to the deferral.'' Additionally, 19 CFR 
351.213(c)(2), states objections to deferrals must be submitted 
within 15 days after the end of the anniversary month.
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    On September 4, 2007, the Department issued its antidumping duty 
questionnaire to Datuhe. On October 2, 2007, and October 25, 2007, 
Datuhe submitted its questionnaire responses. The Department issued a 
supplemental questionnaire to Datuhe on January 8, 2008, to which 
Datuhe responded on February 8, 2008. On May 9, 2008, the Department 
issued the second supplemental questionnaire to Datuhe and received a 
response on May 15, 2008.
    On September 27, 2007, the Department issued its antidumping duty 
questionnaire to TMI. On November 8, 2007, and December 11, 2007, TMI 
submitted its questionnaire responses. The Department issued a 
supplemental questionnaire to TMI on January 31, 2008, to which TMI 
responded on March 6, 2008.
    On January 18, 2008, the Department issued a request for interested 
parties to submit comments on surrogate country selection and surrogate 
values (``SV''). TMI and Datuhe submitted surrogate country comments on 
February 15, 2008. Additionally, Petitioner submitted surrogate country 
comments on February 15, 2008. TMI, Datuhe and Petitioner submitted 
surrogate value comments on March 3, 2007. In March and April 2008, 
TMI, Datuhe and Petitioner submitted additional and rebuttal surrogate 
value information.
    On February 6, 2008, the Department published a notice in the 
Federal Register extending the time limit for the preliminary results 
of review from January 31, 2008, until no later than April 30, 2008. 
See Pure Magnesium from the People's Republic of China: Extension of 
Time Limit for the Preliminary Results of the Antidumping Duty 
Administrative Review, 73 FR 6931 (February 6, 2008). Additionally, on 
May 5, 2008, the Department published a notice in the Federal Register 
extending the time limit for the preliminary results of review from 
April 30, 2008, until no later May 30, 2008. See Pure Magnesium from 
the People's Republic of China: Extension of Time Limit for the 
Preliminary Results of the Antidumping Duty Administrative Review, 73 
FR 24572 (May 5, 2008).

Period of Review

    The POR is May 1, 2006, through April 30, 2007.

Scope of Order

    Merchandise covered by this order is pure magnesium regardless of 
chemistry, form or size, unless expressly excluded from the scope of 
this order. Pure magnesium is a metal or alloy containing by weight 
primarily the element magnesium and produced by decomposing raw 
materials into magnesium metal. Pure primary magnesium is used 
primarily as a chemical in the aluminum alloying, desulfurization, and 
chemical reduction industries. In addition, pure magnesium is used as 
an input in producing magnesium alloy. Pure magnesium encompasses 
products (including, but not limited to, butt ends, stubs, crowns and 
crystals) with the following primary magnesium contents:
    (1) Products that contain at least 99.95[percnt] primary magnesium, 
by weight (generally referred to as ``ultra pure'' magnesium);
    (2) Products that contain less than 99.95[percnt] but not less than 
99.8[percnt] primary magnesium, by weight (generally referred to as 
``pure'' magnesium); and
    (3) Products that contain 50[percnt] or greater, but less than 
99.8[percnt] primary magnesium, by weight, and that do not conform to 
ASTM specifications for alloy magnesium (generally referred to as 
``off-specification pure'' magnesium) .
    ``Off-specification pure'' magnesium is pure primary magnesium 
containing magnesium scrap, secondary magnesium, oxidized magnesium or 
impurities (whether or not intentionally added) that cause the primary 
magnesium content to fall below 99.8[percnt] by weight. It generally 
does not contain, individually or in combination, 1.5[percnt] or more, 
by weight, of the following alloying elements: aluminum, manganese, 
zinc, silicon, thorium, zirconium and rare earths.
    Excluded from the scope of this order are alloy primary magnesium 
(that meets specifications for alloy magnesium), primary magnesium

[[Page 32551]]

anodes, granular primary magnesium (including turnings, chips and 
powder) having a maximum physical dimension (i.e., length or diameter) 
of one inch or less, secondary magnesium (which has pure primary 
magnesium content of less than 50[percnt] by weight), and remelted 
magnesium whose pure primary magnesium content is less than 50[percnt] 
by weight.
    Pure magnesium products covered by this order are currently 
classifiable under Harmonized Tariff Schedule of the United States 
(HTSUS) subheadings 8104.11.00, 8104.19.00, 8104.20.00, 8104.30.00, 
8104.90.00, 3824.90.11, 3824.90.19 and 9817.00.90. Although the HTSUS 
subheadings are provided for convenience and customs purposes, our 
written description of the scope is dispositive.

Nonmarket-Economy-Country Status

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as a non-market economy (``NME'') country. In 
accordance with section 771(18)(C)(i) of the Tariff Act of 1930, as 
amended (``the Act''), any determination that a foreign country is an 
NME country shall remain in effect until revoked by the administering 
authority. See Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, From the People's Republic of China: Preliminary Results 
2001-2002 Administrative Review and Partial Rescission of Review, 68 FR 
7500 (February 14, 2003). None of the parties to this proceeding has 
contested such treatment. Accordingly, we calculated normal value 
(``NV'') in accordance with section 773(c) of the Act, which applies to 
NME countries.

Surrogate Country

    When the Department is investigating imports from an NME country, 
section 773(c)(1) of the Act directs it to base NV on the NME 
producer's Factors of Production (``FOP''). The Act further instructs 
that valuation of the FOPs shall be based on the best available 
information in a surrogate market economy country or countries 
considered to be appropriate by the Department. See Section 773(c)(1) 
of the Act. When valuing the FOPs, the Department shall utilize, to the 
extent possible, the prices or costs of FOPs in one or more market 
economy countries that are: (1) at a level of economic development 
comparable to that of the NME country; and (2) significant producers of 
comparable merchandise. See Section 773(c)(4) of the Act. Further, the 
Department normally values all FOPs in a single surrogate country. See 
19 CFR 351.308(c)(2). The sources of the surrogate values (``SV'') are 
discussed under the ``Normal Value'' section below and in the 
Memorandum to the File, ``Factors Valuations for the Preliminary 
Results of the Administrative Review,'' dated May 30, 2008 (``Factor 
Valuation Memorandum''), which is on file in the Central Records Unit 
(``CRU''), Room 1117 of the main Department building.
    In examining which country to select as its primary surrogate for 
this proceeding, the Department first determined that India, Indonesia, 
the Philippines, Colombia, and Thailand are countries comparable to the 
PRC in terms of economic development. See Memorandum to Robert Bolling, 
Program Manager, From Ron Lorentzen, Director, Office of Policy, 
``Administrative Review of Pure Magnesium from the People's Republic of 
China (PRC): Request for a List of Surrogate Countries,'' dated 
December 20, 2007, which is on file in the CRU. Once the economically 
comparable countries have been identified, we select an appropriate 
surrogate country by determining whether one of these countries is a 
significant producer of comparable merchandise and whether the data for 
valuing FOPs is both available and reliable.
    On January 18, 2008, the Department issued a request for interested 
parties to submit comments on surrogate country selection. TMI 
submitted surrogate country comments on February 15, 2008. Datuhe also 
submitted surrogate country comments on February 15, 2008 (``Datuhe's 
Surrogate Country Letter''). Additionally, Petitioner submitted 
surrogate country comments on February 15, 2008 (``Petitioner's 
Surrogate Country Letter'').
    TMI argues that India is the appropriate surrogate country for the 
PRC because India is comparable to the PRC in terms of overall economic 
development as is demonstrated by the Department's consistent use of 
India as a surrogate country in recent antidumping investigations and 
reviews involving the PRC. TMI also states India has been consistently 
found to be a ``significant producer'' of comparable merchandise, and 
the existence of a well-developed comparable industry in India 
producing comparable merchandise supports the selection and use of 
India as the appropriate surrogate country.
    Datuhe asserts that India is the appropriate surrogate country for 
the PRC because India is comparable to the PRC in terms of economic 
development based on per-capita gross national income (``GNI''). Datuhe 
also stated that while India is not a significant producer of the 
identical merchandise, pure magnesium, neither are any of the other 
potential surrogates as identified by the Department. Datuhe continues 
by stating that India is a significant producer of aluminum, which it 
claims is comparable merchandise, based on the fact that both products: 
(a) are light metals; (b) are electricity-intensive; (c) are produced 
by similar processes; and (d) share some common end uses.\2\ Datuhe 
points out that, by contrast, three of the other potential surrogate 
countries are not recognized as producers of aluminum and the fourth 
country, Indonesia, only produces a fraction of India's production. 
Finally, Datuhe claims that factors data from India are available, 
reliable, and contemporaneous.
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    \2\ Datuhe's Surrogate Country Letter at 3.
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    Petitioner contends that the Department should select India as the 
surrogate country in this administrative review because India is at a 
level of economic development that is comparable to the PRC based on 
per-capita GNI and India is a significant producer of comparable 
merchandise. Petitioner states that among the five countries considered 
to be comparable to China in terms of economic development, the only 
possible producer of primary magnesium is Southern Magnesium & 
Chemicals Ltd (``Southern Magnesium''), which is located in India. 
However, Petitioner notes that Southern Magnesium has either downsized 
or ceased its magnesium production operations. Petitioner continues by 
stating that to the best of its knowledge, none of the other four 
countries identified by the Department are producers of magnesium. 
However, Petitioner notes that India is a significant producer of 
aluminum, and the Department previously has determined aluminum 
production to be ``most comparable'' to magnesium production.\3\ 
Further, Petitioner claims that while Indonesia produced aluminum, the 
production level was far below that of India. The remaining potential 
surrogate countries (Philippines, Colombia, and Thailand) are not 
aluminum producers. Finally, Petitioner concludes that India is the 
best available surrogate country because of the availability and 
quality of data to value the FOPs.
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    \3\ Petitioner's Surrogate Country Letter at 4.
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    After evaluating interested parties' comments, the Department 
determined that India is the appropriate surrogate country to use in 
this review pursuant to section 773(c)(4) of the Act based on the 
following facts: 1) India is at a level

[[Page 32552]]

of economic development comparable to that of the PRC; and 2) India is 
a significant producer of comparable merchandise. Furthermore, we have 
reliable data from India that we can use to value the FOPs.\4\ We have 
obtained and relied upon publicly available information wherever 
possible.\5\
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    \4\ See Letter from TMI dated March 17, 2008, Surrogate Value 
Data Submission at Exhibit SV-21G.
    \5\ See Factor Valuation Memorandum.
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    In accordance with 19 CFR 351.301(c)(3)(ii), for the final results 
in an antidumping review, interested parties may submit within 20 days 
after the date of publication of the preliminary results additional 
publicly available information to value the FOPs.\6\
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    \6\ In accordance with 19 CFR 351.301(c)(1), for the final 
results of this review, interested parties may submit factual 
information to rebut, clarify, or correct factual information 
submitted by an interested party less than ten days before, on, or 
after the applicable deadline for submission of such factual 
information. However, the Department notes that 19 CFR 351.301(c)(1) 
permits new information only insofar as it rebuts, clarifies, or 
corrects information recently placed on the record. The Department 
generally cannot accept the submission of additional, previously 
absent-from-the-record alternative SV information pursuant to 19 CFR 
351.301(c)(1). See Glycine from the People's Republic of China: 
Final Results of Antidumping Duty Administrative Review and Final 
Rescission, in Part, 72 FR 58809 (October 17, 2007), and 
accompanying Issues and Decision Memorandum at Comment 2.
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Separate Rates

    In proceedings involving NME countries, the Department has a 
rebuttable presumption that all companies within the country are 
subject to government control and thus should be assessed a single 
antidumping duty rate. It is the Department's policy to assign all 
exporters of merchandise subject to investigation in an NME country 
this single rate unless an exporter can demonstrate that it is 
sufficiently independent so as to be entitled to a separate rate. 
Exporters can demonstrate this independence through the absence of both 
de jure and de facto government control over export activities. The 
Department analyzes each entity exporting the subject merchandise under 
a test arising from 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 further developed 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''). However, if the Department determines that a company is 
wholly foreign-owned or located in a market economy, then a separate-
rate analysis is not necessary to determine whether it is independent 
from government control.
    Both respondents stated that they are either joint ventures between 
Chinese and foreign companies or are wholly Chinese-owned companies. 
Therefore, the Department must analyze whether these respondents can 
demonstrate the absence of both de jure and de facto government control 
over export activities.

a. Absence of De Jure Control

    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (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) other formal 
measures by the government decentralizing control of companies.\7\
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    \7\ See Sparklers, 56 FR at 20589.
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    The evidence provided by the respondents supports a preliminary 
finding of de jure absence of government control based on the 
following: (1) an absence of restrictive stipulations associated with 
the individual exporters' business and export licenses; (2) there are 
applicable legislative enactments decentralizing control of the 
companies; and (3) and there are formal measures by the government 
decentralizing control of companies.

b. Absence of De Facto Control

    Typically the Department considers four factors in evaluating 
whether each respondent is subject to de facto government control of 
its export functions: (1) Whether the export prices are set by or are 
subject to the approval of a government agency; (2) whether the 
respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses.\8\ The Department has determined that an analysis 
of de facto control is critical in determining whether respondents are, 
in fact, subject to a degree of governmental control which would 
preclude the Department from assigning separate rates.
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    \8\ See Silicon Carbide, 59 FR at 22586-87; see also Notice of 
Final Determination of Sales at Less Than Fair Value: Furfuryl 
Alcohol From the People's Republic of China, 60 FR 22544, 22545 (May 
8, 1995).
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    The Department conducted separate-rates analyses for Datuhe and 
TMI. The evidence placed on the record of this review by the 
respondents demonstrates an absence of de jure and de facto government 
control with respect to each of the exporters' exports of the 
merchandise under investigation, in accordance with the criteria 
identified in Sparklers and Silicon Carbide. Therefore, we have 
determined that Datuhe and TMI have demonstrated their eligibility for 
a separate rate.

Normal Value Comparisons

    To determine whether sales of pure magnesium to the United States 
by TMI were made at less than NV, we compared Export Price (``EP'') and 
Constructed Export Price (``CEP'') to NV, as described in the ``Export 
Price'' and ``Normal Value'' sections of this notice.

Export Price

    In accordance with section 772(a) of the Act, EP is the price at 
which the subject merchandise is first sold (or agreed to be sold) 
before the date of importation by the producer or exporter of the 
subject merchandise outside of the United States to an unaffiliated 
purchaser in the United States or to an unaffiliated purchaser for 
exportation to the United States, as adjusted under section 772(c) of 
the Act. In accordance with section 772(a) of the Act, we used EP for 
TMI's U.S. sales because the subject merchandise was sold directly to 
the unaffiliated customers in the United States prior to importation 
and because CEP was not otherwise indicated.
    We compared NV to individual EP transactions, in accordance with 
section 777A(d)(2) of the Act.

Constructed Export Price

    In accordance with section 772(b) of the Act, CEP is the price at 
which the subject merchandise is first sold (or agreed to be sold) in 
the United States before or after the date of importation by or for the 
account of the producer or exporter of such merchandise or by a seller 
affiliated with the producer or exporter, to a purchaser not affiliated 
with the producer or exporter, as adjusted under sections 772 (c) and 
(d). In accordance with section 772(b) of the Act, we used CEP for 
Datuhe's sales because it sold subject merchandise to its affiliated 
company in the United States, which in turn sold subject

[[Page 32553]]

merchandise to unaffiliated U.S. customers.
    We compared NV to individual EP and CEP transactions, in accordance 
with section 777A(d)(2) of the Act.

Datuthe

    We calculated CEP for Datuhe based on delivered prices to 
unaffiliated purchasers in the United States. We made deductions from 
the U.S. sales price for movement expenses in accordance with section 
772(c)(2)(A) of the Act. These included foreign inland freight from the 
plant to the port of exportation, ocean freight, marine insurance, U.S. 
Customs duty, where applicable, U.S. inland freight from port to the 
warehouse and U.S. inland freight from the warehouse to the customer. 
In accordance with section 772(d)(1) of the Act, the Department 
deducted credit expenses, inventory carrying costs and indirect selling 
expenses from the U.S. price, all of which relate to commercial 
activity in the United States. In accordance with section 773(a) of the 
Act, we calculated Datuhe's credit expenses and inventory carrying 
costs based on the Federal Reserve short-term rate, where applicable. 
Finally, we deducted CEP profit, in accordance with sections 772(d)(3) 
and 772(f) of the Act. See Memorandum to The File Through Robert 
Bolling, Program Manager, China/NME Group, from Hua Lu, Case Analyst, 
``Analysis for the Preliminary Results of Pure Magnesium from the 
People's Republic of China: Shanxi Datuhe Coke & Chemicals Co., Ltd. 
(``Datuhe''),'' dated May 30, 2008.

TMI

    For TMI's EP sales, we based the EP on delivered prices to 
unaffiliated purchasers in the United States. In accordance with 
section 772(c)(2)(A) of the Act, we made deductions from the starting 
price for movement expenses. Movement expenses included expenses for 
foreign inland freight from the plant to the port of exportation, 
domestic brokerage and handling, and where applicable, international 
freight and marine insurance. No other adjustments to EP were reported 
or claimed. See Memorandum to The File Through Robert Bolling, Program 
Manager, China/NME Group, from Hua Lu, Case Analyst, ``Analysis for the 
Preliminary Results of Pure Magnesium from the People's Republic of 
China: Tianjin Magnesium International, Co. (``TMI''),'' dated May 30, 
2008.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine NV using an FOP 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. When determining 
NV in an NME context, the Department will base NV on FOPs because the 
presence of government controls on various aspects of these economies 
renders price comparisons and the calculation of production costs 
invalid under our normal methodologies. Under section 773(c)(3) of the 
Act, FOPs 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 costs. The 
Department used FOPs reported by respondents for materials, energy, 
labor and packing.
    In accordance with 19 CFR 351.408(c)(1), the Department will 
normally use publicly available information to find an appropriate SV 
to value FOPs, but when a producer sources an input from a market 
economy and pays for it in market-economy currency, the Department may 
value the factor using the actual price paid for the input. See 19 CFR 
351.408(c)(1); see also Shakeproof Assembly Components Div of Ill v. 
United States, 268 F. 3d 1376, 1382-1383 (Fed. Cir. 2001) (affirming 
the Department's use of market-based prices to value certain FOPs).
    With regard to both import-based surrogate values and market-
economy import values, it is the Department's consistent practice that, 
where the facts developed in the United States or third country 
countervailing duty findings include the existence of subsidies that 
appear to be used generally (in particular, broadly available, non-
industry-specific export subsidies), it is reasonable for the 
Department to find that it has particular and objective evidence to 
support a reason to believe or suspect that prices of the inputs from 
the country granting the subsidies may be subsidized. See Brake Rotors 
and China National Machinery Imp. & Exp. Corp. v. United States, 293 F. 
Supp. 2d 1334, 1338-39 (CIT 2003).
    In avoiding the use of prices that may be subsidized, the 
Department does not conduct a formal investigation to ensure that such 
prices are not subsidized, but rather relies on information that is 
generally available at the time of its determination. See H.R. Rep. 
100-576, at 590 (1988), reprinted in 1988 U.S.C.C.A.N. 1547, 1623-24. 
The Department has reason to believe or suspect that prices of inputs 
from Indonesia, South Korea, and Thailand may have been subsidized. 
Through other proceedings, the Department has learned that these 
countries maintain broadly available, non-industry-specific export 
subsidies and, therefore, preliminarily finds it reasonable to infer 
that all exports to all markets from these countries may be subsidized. 
See Brake Rotors From the People's Republic of China: Final Results of 
Antidumping Duty Administrative and New Shipper Reviews and Partial 
Rescission of the 2005-2006 Administrative Review, 72 FR 42386 (August 
2, 2007) (``Brake Rotors''), and accompanying Issues and Decision 
Memorandum at Comment 1. Accordingly, the Department has disregarded 
prices from Indonesia, South Korea and Thailand in calculating NV 
because the Department has reason to believe or suspect such prices may 
be subsidized.

Factor Valuations

    In accordance with section 773(c) of the Act, the Department 
calculated NV based on FOPs reported by respondents for the POR. To 
calculate NV, the Department multiplied the reported per-unit factor 
consumption quantities by publicly available Indian SVs (except as 
noted below). In selecting the SVs, the Department considered the 
quality, specificity, and contemporaneity of the data. As appropriate, 
the Department adjusted input prices by including freight costs to make 
them delivered prices. Specifically, the Department added to Indian 
import SVs a surrogate freight cost using the shorter of the reported 
distance from the domestic supplier to the factory or the distance from 
the nearest seaport to the factory where appropriate (i.e., where the 
sales terms for the market-economy inputs were not delivered to the 
factory). This adjustment is in accordance with the decision of the 
U.S. Court of appeals for the Federal Circuit in Sigma Corp. v. United 
States, 117 F.3d 1401, 1407-08 (Fed. Cir. 1997). For a detailed 
description of all SVs used to value the respondents' reported FOPs, 
see Factor Valuation Memorandum.
    The Department has instituted a rebuttable presumption that market 
economy input prices are the best available information for valuing an 
input when the total volume of the input purchased from all market 
economy sources during the POR or review exceeds 33 percent of the 
total volume of the input purchased from all sources during the period. 
In these cases, unless case-specific facts provide adequate grounds to 
rebut the Department's presumption, the Department will use the 
weighted-

[[Page 32554]]

average market economy purchase price to value the input. 
Alternatively, when the volume of an NME firm's purchases of an input 
from market economy suppliers during the period is below 33 percent of 
its total volume of purchases of the input during the period, but where 
these purchases are otherwise valid and there is no reason to disregard 
the prices, the Department will weight average the weighted-average 
market economy purchase price with an appropriate SV according to their 
respective shares of the total volume of purchases, unless case-
specific facts provide adequate grounds to rebut the presumption. When 
a firm has made market economy input purchases that may have been 
dumped or subsidized, are not bona fide, or are otherwise not 
acceptable for use in a dumping calculation, the Department will 
exclude them from the numerator of the ratio to ensure a fair 
determination of whether valid market economy purchases meet the 33-
percent threshold. See Antidumping Methodologies: Market Economy 
Inputs, Expected Non-Market Economy Wages, Duty Drawback; and Request 
for Comments, 71 FR 61716, 61717-18 (October 19, 2006). Also, where the 
quantity of the input purchased from market-economy suppliers is 
insignificant, the Department will not rely on the price paid by an NME 
producer to a market-economy supplier because it cannot have confidence 
that a company could fulfill all its needs at that price. During the 
POR, neither Datuhe or TMI purchased any inputs from a market economy 
supplier.
    The Department used contemporaneous import data from the World 
Trade Atlas (``WTA'') online, published by the Directorate General of 
Commercial Intelligence and Statistics, Ministry of Commerce of India, 
to calculate SVs for the reported FOPs purchased from NME sources. 
Among the FOPs for which the Department calculated SVs using Indian 
Import Statistics are ferrosilicon, flux, fluorite and sulfur. However, 
for dolomite, in reviewing the record evidence, we have found that it 
is reasonable to conclude that WTA data represent prices of imported 
dolomite in the high-end value-added product range while the dolomite 
used to produce subject merchandise is the high-bulk, low value 
commodity. See Pure Magnesium from the People's Republic of China: 
Final Results of 2004-2005 Antidumping Duty Administrative Review, 71 
FR 61019 (October 17, 2006), and accompanying Issues and Decision 
Memorandum at Comment 1. Therefore, for the preliminary results, we 
have determined to average the dolomite values from Indian Iron & Steel 
and Tata Sponge Iron Ltd. to calculate the surrogate value for 
dolomite. Because the value was not contemporaneous with the POR, the 
Department adjusted the rate for inflation. For a complete listing of 
all the inputs and the valuation for each mandatory respondent see 
Factor Value Memorandum.
    Where the Department could not obtain publicly available 
information contemporaneous with the POR with which to value FOPs, the 
Department adjusted the SVs using, where appropriate, the Indian 
Wholesale Price Index (``WPI'') available at the website of the Office 
of the Economic Adviser, Ministry of Commerce and Industry, Government 
of India, https://eaindustry.nic.in/. See Factor Valuation Memorandum.
    For direct labor, indirect labor, and packing labor, consistent 
with 19 CFR 351.408(c)(3), the Department used the PRC regression-based 
wage rate as reported on Import Administration's website, Import 
Library, Expected Wages of Selected NME Countries, revised in May 2008, 
https://ia.ita.doc.gov/wages/04wages/04wages-010907.html. The source of 
these wage-rate data is the Yearbook of Labour Statistics 2006, ILO 
(Geneva: 2006), Chapter 5B: Wages in Manufacturing. The years of the 
reported wage rates range from 2004 and 2005. Because this regression-
based wage rate does not separate the labor rates into different skill 
levels or types of labor, the Department has applied the same wage rate 
to all skill levels and types of labor reported by the respondents. See 
Factor Valuation Memorandum.
    To value electricity, the Department used data from the 
International Energy Agency (``IEA'') Key World Energy Statistics (2003 
edition). Because the value was not contemporaneous with the POR, the 
Department adjusted the rate for inflation. See Factor Valuation 
Memorandum.
    The Department valued water using data from the Maharashtra 
Industrial Development Corporation (www.midcindia.org) because it 
includes a wide range of industrial water tariffs. This source provides 
386 industrial water rates within the Maharashtra province from June 
2003: 193 for the ``inside industrial areas'' usage category and 193 
for the ``outside industrial areas'' usage category. Because the value 
was not contemporaneous with the POR, we adjusted the rate for 
inflation.
    To calculate the value for domestic brokerage and handling, the 
Department used information available to it contained in the public 
version of two questionnaire responses placed on the record of separate 
proceedings. The first source was December 2003-November 2004 data 
contained in the public version of Essar Steel's February 28, 2005, 
questionnaire submitted in the antidumping duty administrative review 
of hot-rolled carbon steel flat products from India. See Certain Hot-
Rolled Carbon Steel Flat Products from India: Notice of Preliminary 
Results of Antidumping Duty Administrative Review, 71 FR 2018 (January 
12, 2006)(unchanged in final results). This value was averaged with the 
February 2004-January 2005 data contained in the public version of Agro 
Dutch Industries Limited's (``Agro Dutch'') May 24, 2005, questionnaire 
response submitted in the administrative review of the antidumping duty 
order on certain preserved mushrooms from India. See Certain Preserved 
Mushrooms From India: Final Results of Antidumping Duty Administrative 
Review, 70 FR 37757 (June 30, 2005). The brokerage expense data 
reported by Essar Steel and Agro Dutch in their public versions are 
ranged data. The Department derived an average per-unit amount from 
each source and then adjusted each average rate for inflation using the 
WPI. The Department then averaged the two per-unit amounts to derive an 
overall average rate for the POR. See Factor Valuation Memorandum.
    The Department used Indian transport information in order to value 
the freight-in cost of the raw materials. The Department determined the 
best available information for valuing truck and rail freight to be 
from www.infreight.com. This source provides daily rates from six major 
points of origin to five destinations in India during the POR. The 
Department obtained a price quote on the first day of each month of the 
POR from each point of origin to each destination and averaged the data 
accordingly. See Factor Valuation Memorandum.
    The Department valued steam coal using the 2003/2004 Tata Energy 
Research Institute's Energy Data Directory & Yearbook (``TERI Data''). 
The Department was able to determine, through its examination of the 
2003/2004 TERI Data, that: a) the annual TERI Data publication is 
complete and comprehensive because it covers all sales of all types of 
coal made by Coal India Limited and its subsidiaries, and b) the annual 
TERI Data publication prices are exclusive of duties and taxes. Because 
the value was not contemporaneous with the POR, the

[[Page 32555]]

Department adjusted the rate for inflation. See Factor Valuation 
Memorandum.
    To value marine insurance, the Department obtained a generally 
publicly available price quote from https://www.rjgconsultants.com/
insurance.html, a market-economy provider of marine insurance. See 
Factor Valuation Memorandum.
    To value international freight, the Department obtained a generally 
publicly available price quote from https://www.maersksealand.com/
HomePage/appmanager, a market-economy provider of international freight 
services. See Factor Valuation Memorandum.
    To value factory overhead, depreciation, selling, general and 
administrative expenses (``SG&A'') and profit, the Department used a 
audited financial statement for the year ended March 31, 2007, for an 
Indian producer of aluminum, Sterlite Industries (India) Limited 
(``Sterlite''). We did not rely upon two companies' financial 
statements that were placed on the record, namely the financial 
statement of Hindalco Industries Limited (``Hindalco'') and National 
Aluminium Company Limited (``Nalco''), because Hindalco and Nalco's 
financial statements identify the receipt of ``export and other 
incentives'' or ``export incentives'' (i.e., ``EPCG Scheme'' and ``DEPB 
Premium'') in ``Operating Revenues'' or ``Other Income.'' India's EPCG 
and DEPB Schemes have been found by the Department to each provide a 
countervailable subsidy. See, e.g., Certain Iron-Metal Castings From 
India: Preliminary Results and Partial Rescission of Countervailing 
Duty Administrative Review, 64 FR 61592 (November 12, 1999) (unchanged 
in final results); see also https://ia.ita.doc.gov/esel/eselframes.html 
and Notice of Final Affirmative Countervailing Duty Determination and 
Final Negative Critical Circumstances Determination: Certain Lined 
Paper Products from India, 71 FR 45034 (August 8, 2006), and 
accompanying Issues and Decision Memorandum at ``Benchmarks for Loans 
and Discount Rate.'' In Crawfish from the PRC, the Department noted 
that where it has reason to believe or suspect that a company may have 
received subsidies, financial ratios derived from that company's 
financial statements do not constitute the best available information 
with which to value financial ratios. See Freshwater Crawfish Tail Meat 
from the People's Republic of China: Notice of Final Results And 
Rescission, In Part, of 2004/2005 Antidumping Duty Administrative and 
New Shipper Reviews, 72 FR 19174 (April 17, 2007) (``Crawfish from the 
PRC'')and accompanying Issues and Decision Memorandum at Comment 1. 
Given the record information regarding Hindalco's use of the EPCG 
program and Nalco's use of the DEPB program, and the fact that we have 
other acceptable financial statements to use as surrogates, consistent 
with the Department's decision in Crawfish from the PRC, we have not 
used Hindalco or Nalco's financial data in our surrogate ratio 
calculations. Additionally, we have not used Madras Aluminium Company 
Limited's (``Malco'') financial statement because Malco's financial 
statement only covers nine months of its fiscal year. See the Factor 
Valuation Memorandum for a full discussion of the calculation of 
Sterlite's ratios.
    Further, the Department used Indian Import Statistics to value 
material inputs for packing which, for TMI, are steel bands and plastic 
bags. The Department used Indian Import Statistics data for the POR for 
packing materials. See Factor Valuation Memorandum.
    TMI reported that it recovered cement clinker and waste magnesium 
from the production of pure magnesium for resale. The Department has 
preliminarily determined not to grant a by-product offset to either by-
product because respondents' have not provided evidence that the by-
products were sold or returned to production of the merchandise under 
consideration. Therefore, we are not granting TMI's by-product claim in 
our margin calculations.
    At the Department's request, Datuhe reported the upsteam inputs 
used to produce certain self-produced intermediate inputs that it 
reported in its Section D submission, namely ferrosilicon, electricity, 
and coal gas. It is the Department's practice, consistent with section 
773(c)(1)(B) of the Act, to value the FOPs that a respondent uses to 
produce the subject merchandise. In the instant case, however, because 
the Department has insufficient descriptions of certain inputs to 
ferrosilicon and electricity, namely ``coal rejects,'' ``coal 
middlings,'' ``coal slime,'' and ``coal gangue,'' and because there are 
no sources on the record to accurately value these inputs, the 
Department has determined that it would be more accurate to value the 
inputs of ferrosilicon and electricity as intermediate inputs using WTA 
and IEA data, respectively. See, e.g., Notice of Final Antidumping Duty 
Determination of Sales at Less Than Fair Value and Affirmative Critical 
Circumstances: Certain Frozen Fish Fillets from the Socialist Republic 
of Vietnam, 68 FR 37116 (June 23, 2003), accompanying Issues and 
Decision Memorandum at Comment 3.
    With respect to coal gas, Datuhe claims in its March 3, 2008, 
response that the coal gas used in the production of pure magnesium is 
a waste product of Datuhe's production of non-subject merchandise 
(i.e., coke), and, therefore, because Datuhe does not purchase this 
input the Department should not value it in its NV calculation. Section 
773(c)(3) of the Act, however, requires the Department to value the 
quantities of all raw materials employed in producing subject 
merchandise. Therefore, the Department is required under the Act to 
value all inputs, including inputs obtained free of charge , such as 
coal gas in this case. See Certain Preserved Mushrooms From the 
People's Republic of China; Preliminary Results of Antidumping Duty 
Administrative Review, 71 FR 64930, 64936 (Nov. 6, 2006).
    Further, Datuhe reported the FOPs used in the production of coke 
which generate the coal gas as a waste product, and submitted a 
calculated ``coke by-product'' adjustment to be deducted from the NV 
calculation. We note that coke is not, in fact, a by-product of coal 
gas production, but rather coal gas is a waste product of coke 
production. See Datuhe's May 15, 2008, supplemental questionnaire. 
Additionally, because coke production is not part of the production of 
the subject merchandise, the Department will not apply a by-product 
adjustment from the production of coke to the NV calculation of pure 
magnesium. Accordingly, the Department has preliminarily determined 
that valuing coal gas as an intermediate input in the production of the 
subject merchandise would result in the most accurate NV calculation.
    In examining the WTA import data for the five countries on the 
Office of Policy's potential surrogate country list, we note that there 
are no imports of commercial quantities of coal gas for the POR or the 
years leading up to the POR. Similarly, there is no IEA data for these 
countries during the POR. Because the Department can find no usable 
data on the record to value coal gas, we have determined to use the 
methodology employed in certain cut-to-length carbon steel plate from 
Romania. See Certain Cut-to-Length Carbon Steel Plate from Romania: 
Notice of Final Results and Final Partial Rescission of Antidumping 
Duty Administrative Review, 70 FR 12651 (March 15, 2005), and 
accompanying Issues and Decision Memorandum at Comment 6. We have

[[Page 32556]]

compared the amount of British thermal units (``BTUs'') in coal gas 
(i.e., 600) to that of natural gas (i.e., 1150) to calculate the 
relative percentage of BTUs in coal gas. We have applied that 
percentage to the SV of natural gas. See Factor Valuation Memorandum. 
Because WTA provided no data for natural gas in India, we have used 
another country on the Office of Policy's potential surrogate country 
list: Thailand. We note that we have also used this methodology in 
other proceedings. See Notice of Preliminary Determination of Sales at 
Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products 
From the People's Republic of China, 66 FR 22183 (May 3, 2001), and 
Final Notice of Sales at Less Than Fair Value: Certain Hot-Rolled 
Carbon Steel Flat Products From the People's Republic of China, 66 FR 
49632 (September 28, 2001). Additionally, we note that Datuhe provided 
a SV for coal gas, from the Centre for Monitoring Indian Economy 
(``CMIE''), an independent Indian economic think-tank which Datuhe 
claims was compiled from data provided by South Eastern Coalfields 
Limited. We have determined not to rely upon the CMIE value for coal 
gas for the preliminary results because (1) the value is not broad and 
representative; (2) it is specific to only one company; and (3) Datuhe 
only provided two pages of data; thus, the Department is not able to 
determine whether the data is complete.

Currency Conversion

    The Department made currency conversions into U.S. dollars, in 
accordance with section 773A(a) of the Act, based on the exchange rates 
in effect as certified by the Federal Reserve Bank on the dates of the 
U.S. sales.

Weighted-Average Dumping Margins

    The preliminary weighted-average dumping margins are as follows:

                       Pure Magnesium from the PRC
------------------------------------------------------------------------
                                                            Weighted-
                        Exporter                          Average Margin
                                                           (percentage)
------------------------------------------------------------------------
Shanxi Datuhe Coke & Chemicals Co. Ltd.................            0.0
Tianjin Magnesium International, Co....................          21.24
------------------------------------------------------------------------

Disclosure

    The Department will disclose calculations performed for these 
preliminary results to the parties within five days of the date of 
publication of this notice in accordance with 19 CFR 351.224(b). Any 
interested party may request a hearing within 30 days of publication of 
these preliminary results. See 19 CFR 351.310(c). Any hearing, if 
requested, will generally be held two days after the scheduled date for 
submission of rebuttal briefs. See 19 CFR 351.310(d). Interested 
parties may submit case briefs and/or written comments no later than 30 
days after the date of publication of these preliminary results of 
review. See 19 CFR 351.309(c)(ii). Rebuttal briefs and rebuttals to 
written comments, limited to issues raised in such briefs or comments, 
may be filed no later than five days after the time limit for filing 
the case briefs. See 19 CFR 351.309(d). Further, we request that 
parties submitting written comments provide the Department with an 
additional copy of those comments on diskette. The Department will 
issue the final results of this administrative review, which will 
include the results of its analysis of issues raised in any comments, 
and at a hearing, within 120 days of publication of these preliminary 
results, pursuant to section 751(a)(3)(A) of the Act.

Assessment Rates

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. The Department intends to issue 
assessment instructions to CBP 15 days after the date of publication of 
the final results of review. Pursuant to 19 CFR 351.212(b)(1), we will 
calculate importer- or customer-specific ad valorem duty assessment 
rates based on the ratio of the total amount of the dumping margins 
calculated for the examined sales to the total entered value of those 
same sales. To determine whether the duty assessment rates are de 
minimis (i.e., less than 0.50 percent), in accordance with the 
requirement set forth in 19 CFR 351.106(c)(2), we will calculate 
customer-specific ad valorem ratios based on export prices.
    We will instruct CBP to assess antidumping duties on all 
appropriate entries covered by this review if any importer- or 
customer-specific assessment rate calculated in the final results of 
this review is above de minimis.
    For entries of the subject merchandise during the POR from 
companies not subject to this review, we will instruct CBP to liquidate 
them at the cash deposit rate in effect at the time of entry. The final 
results of this review shall be the basis for the assessment of 
antidumping duties on entries of merchandise covered by the final 
results of this review and for future deposits of estimated duties, 
where applicable.

Cash Deposit Requirements

    The following cash deposit requirements will be effective upon 
publication of the final results of this administrative review for 
shipments of the subject merchandise from the PRC entered, or withdrawn 
from warehouse, for consumption on or after the publication date, as 
provided by sections 751(a)(2)(C) of the Act: (1) for Datuhe and TMI, 
which each have a separate rate, the cash deposit rate will be that 
established in the final results of this review (except, if the rate is 
zero or de minimis, zero cash deposit will be required); (2) for 
previously investigated or reviewed PRC and non-PRC exporters not 
listed above that received a separate rate in a prior segment of this 
proceeding (which were not reviewed in this segment of the proceeding), 
the cash deposit rate will continue to be the exporter-specific rate; 
(3) for all PRC exporters of subject merchandise that have not been 
found to be entitled to a separate rate, the cash deposit rate will be 
the PRC-wide rate of 108.26 percent; and (4) for all non-PRC exporters 
of subject merchandise which have not received their own rate, the cash 
deposit rate will be the rate applicable to the PRC exporter that 
supplied that non-PRC exporter. These deposit requirements, when 
imposed, shall remain in effect until further notice.

Notification to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f)(2) 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 
sections 751(a)(1) and 777(i) of the Act and 19 CFR 351.213.

    Dated: May 30, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-12869 Filed 6-6-08; 8:45 am]
BILLING CODE 3510-DS-S