Foreign-Trade Zone 29; Application for Subzone Authority; Dow Corning Corporation; Invitation for Public Comment on Preliminary Recommendation, 31763 [2010-13454]

Agencies

• DEPARTMENT OF COMMERCE
• Foreign-Trade Zones Board

[Federal Register Volume 75, Number 107 (Friday, June 4, 2010)]
[Notices]
[Page 31763]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-13454]


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 DEPARTMENT OF COMMERCE

Foreign-Trade Zones Board

[Docket 20-2009]


Foreign-Trade Zone 29; Application for Subzone Authority; Dow 
Corning Corporation; Invitation for Public Comment on Preliminary 
Recommendation

    The FTZ Board is inviting public comment on its staff's preliminary 
recommendation pertaining to the application by the Louisville and 
Jefferson County Riverport Authority to establish a subzone at the Dow 
Corning Corporation (Dow Corning) facilities in Carrollton, 
Elizabethtown and Shepherdsville, Kentucky (Docket 20-2009). The 
staff's preliminary recommendation is for approval of the application 
with a restriction prohibiting admission of foreign status silicon 
metal subject to an anti-dumping duty (AD) or countervailing duty (CVD) 
order. The bases for this finding are as follows:
    Analysis of the application record indicates that full approval of 
the request could negatively impact domestic silicon metal production. 
This finding is based primarily on the potential impact to domestic 
silicon metal prices from the volume of production involved and the 
cumulative impact of multiple applications potentially involving 
avoidance of AD/CVD duties on silicon metal used in export production.
    Dow Corning is a major U.S. consumer of silicon metal, and access 
to the material for its export production without the payment of AD/CVD 
duties would decrease the average price of silicon metal paid by the 
company, providing a new, lower benchmark to be used in supply 
negotiations. Given the volume of silicon metal consumed by the company 
in the U.S., the ripple effect on silicon metal suppliers could be 
significant and the likely resulting impact would be a decline in the 
U.S. price of silicon metal.
    Currently, very little silicon metal subject to AD/CVD orders is 
imported into the United States. However, due to the size of Dow 
Corning's production in the U.S., and the amount of silicon metal 
consumed by the company's operations, the potential increase in supply 
to the U.S. market and resulting price effect would likely be 
significant.
    In part due to the AD/CVD duties in place, U.S. silicon metal 
prices have increased. This has led to the recent restarting of a 
shuttered silicon metal production facility in New York. A weakening of 
the U.S. price of silicon metal could threaten the viability of this 
facility as well as the continuation of production at other domestic 
facilities.
    The preliminary recommendation also reflects the cumulative effect 
on domestic silicon metal prices and on the integrity of the domestic 
silicon metal industry's AD/CVD relief should there be multiple 
applications to avoid AD/CVD duties on silicon metal for export 
production. In addition to the Dow Corning application, a similar 
application is pending for REC Silicon in Moses Lake, Washington and we 
have received indication that further requests are being prepared for 
additional facilities.
    Given the volume of silicon metal involved in the current and 
anticipated applications, even a limit on the amount of silicon metal 
subject to AD/CVD orders that could be used in the facilities for 
export production could have a significant impact on the U.S. price of 
silicon metal. The timing of that impact would also be occurring as 
domestic silicon metal production facilities are recovering and 
restarting, likely due (at least in part) to the relief provided 
through the AD/CVD orders that are in place. The FTZ regulations 
require that evaluations of manufacturing authority consider, ``whether 
the approval is consistent with trade policy and programs, and whether 
its net economic effect is positive'' (15 CFR 400.31(a)). In this case, 
given the potential impact on the silicon metal industry and based on 
the evidence currently on the record, the staff is unable to find that 
the net (national) economic effect of approving the use of silicon 
metal subject to AD/CVD orders for export production would be positive.
    While unrestricted approval could have a negative impact, the 
issues raised do not extend to silicon metal not subject to AD/CVD 
orders. No arguments or evidence have been presented to the FTZ Board 
in opposition to FTZ savings on silicon metal not subject to AD/CVD 
orders and on other imported components. Such savings would allow for 
duty deferral, inverted tariff, scrap and export savings on imported 
silicon metal and other components not subject to AD/CVD orders. In 
addition, the facilities could benefit from logistical savings involved 
in FTZ operations. The savings from restricted approval would 
constitute a significant portion of those projected in the application 
and could help encourage continued production and employment at Dow 
Corning's Kentucky facilities.
    Public comment on the preliminary recommendation and the bases for 
the finding is invited through July 12, 2010. Rebuttal comments may be 
submitted during the subsequent 15-day period, until July 27, 2010. 
Submissions (original and one electronic copy) shall be addressed to 
the Board's Executive Secretary at: Foreign-Trade Zones Board, U.S. 
Department of Commerce, Room 2111, 1401 Constitution Ave., NW., 
Washington, DC 20230.
    For further information, contact Elizabeth Whiteman at 
Elizabeth.Whiteman@trade.gov or (202) 482-0473.

    Dated: May 28, 2010.
Andrew McGilvray,
Executive Secretary.
[FR Doc. 2010-13454 Filed 6-3-10; 8:45 am]
BILLING CODE 3510-DS-P