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Kerr-Mcgee Chemical Corp. v. United States

February 19, 1999

KERR-MCGEE CHEMICAL CORPORATION, AND ELKEM METALS COMPANY, PLAINTIFFS-APPELLANTS,
v.
UNITED STATES, DEFENDANT-APPELLEE, AND CHINA HUNAN INTERNATIONAL ECONOMIC DEVELOPMENT (GROUP) CORPORATION, CHINA METALLURGICAL IMPORT & EXPORT HUNAN CORPORATION AND MINMETALS PRECIOUS & RARE MINERALS IMPORT & EXPORT CORPORATION, DEFENDANTS.



Before Michel, Plager, and Rader, Circuit Judges.

The opinion of the court was delivered by: Rader, Circuit Judge.

NOTE: Pursuant to Fed. Cir. R. 47.6, this Disposition is not citable as precedent. It is a public record. The Disposition will appear in tables published periodically.

The Court of International Trade affirmed the Commerce Department's (Commerce's) valuation of manganese imports from the People's Republic of China (PRC), and determinations of margins therefor. Kerr-McGee Chem. Corp. v. United States, 985 F. Supp. 1166 (Ct. Int'l Trade 1997); Notice of Final Determination of Sales at Less Than Fair Value: Manganese Metal From the People's Republic of China, 60 Fed. Reg. 56,045 (Dep't Comm. 1995), as amended, Notice of Amended Final Determination and Antidumping Duty Order: Manganese Metal From the People's Republic of China, 61 Fed. Reg. 4,415 (Dep't Comm. 1996). Plaintiffs-Appellants Kerr-McGee Chemical Corp. and Elkem Metals Co. appeal the Court of International Trade's decision. Because the Court of International Trade's decision is supported by substantial evidence and is otherwise in accordance with law, this court affirms.

I.

Kerr-McGee Chemical and Elkem Metals (collectively, Kerr-McGee) are the sole producers of electrolytic manganese metal in the United States. On November 8, 1994, Kerr-McGee filed an antidumping duty petition under Section 773 of the Tariff Act of 1930 (Tariff Act), on behalf of the United States manganese metal industry. See 19 U.S.C. § 1677b (1994). The petition alleges that Chinese companies imported manganese metal into the United States and sold it at less than fair market value. Defendants-Respondents Chinese Hunan International Economic Development (Group) Corp., China Metallurgical Import & Export Hunan Corp., and Minmetals Precious & Rare Minerals Import & Export Corp. (collectively, Intervenors) are residents of the PRC and export the subject merchandise to the United States.

In response to Kerr-McGee's petition, Commerce initiated an antidumping investigation. Because it considers the PRC to have a non-market (i.e. State-controlled) economy, Commerce did not attempt to value the Chinese metal by determining production costs in the PRC. Rather, Commerce, as required by 19 U.S.C. § 1677b(c)(2), chose an appropriate surrogate country with a market economy to value each factor of production used in the PRC. Following Kerr-McGee's recommendation, Commerce selected India as the surrogate country in this investigation. Commerce noted that India is a market economy country of similar economic development to the PRC; India also is a significant producer of material similar to manganese metal.

Commerce computed the "normal value" of the Chinese manganese metal by assessing the market-determined cost of each of its production factors such as materials, labor, and energy in India. PRC factories that produced the manganese metal submitted reports to Commerce detailing the quantities of various input factors used. Commerce also obtained such information from publicly available reports. Commerce determined the cost of those inputs that the PRC factories purchase or obtain domestically from PRC suppliers, by multiplying the quantity used in the PRC factories by the Indian rates for usage of the input. The two input factors at issue in this appeal are manganese ore (i.e., a raw material) and electricity usage.

Neither Commerce nor any of the parties were able to locate a surrogate manganese ore used in India that was identical to the ore used to produce manganese metal in the PRC. Commerce and the parties determined a list of five potential surrogate ores, all of which varied somewhat from the Chinese ore. Kerr-McGee favored "ore one," a low ferruginous peroxide ore (82-84% MnO2). Kerr-McGee submitted the price data for ore one, which was the most expensive of the five ores on the list. Commerce in its preliminary determination chose "ore three," a low-grade manganese ore (26-28% Mn). Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Manganese Metal From the People's Republic of China, 60 Fed.Reg. at 31,282, 31,284 (Dep't Comm. 1995). Commerce obtained the price for ore three based on an actual transaction between an Indian mine (the seller) and two Japanese purchasers, as reported in a trade journal. Commerce noted that ore one was insufficient because it is a high-grade ore. The Chinese companies use a low-grade ore to produce the subject manganese metal, and would not use a high-grade ore like ore one.

Commerce apparently reconsidered its evaluation, and in its Final Determination switched its choice of surrogate ore. Its choice, however, was not ore one or ore three, but "ore two." Ore two is a metallurgical grade manganese ore (30-35% Mn). The Intervenors had submitted the price data, obtained from the 1993 Indian Minerals Yearbook, for ore two. Commerce reasoned that ore two is comparable to the Chinese ore in manganese content, and also is favorable because its list prices are Indian domestic prices rather than export prices.

To determine the cost of electricity for the PRC factories to produce the manganese metal, Commerce relied on electricity usage reports submitted by the Intervenors. Kerr-McGee argued that the Intervenors' reported rates were unrealistically low. Commerce, however, corroborated the reported rates with informaion from the U.S. Bureau of Mines and found the rates to be within an expected range.

Using the costs it determined for each of the input factors, Commerce assessed dumping margins of 0.97%, 4.6%, 5.88%, and 11.77% for each of the Intervenors' manganese metal imports. These values are in stark contrast to the margins derived from Commerce's preliminary determination: 148.82%, 148.24%, 132.22%, and 82.44%.

Kerr-McGee appealed Commerce's amended final determination to the Court of International Trade. The Court of International Trade affirmed. Kerr-McGee Chem. Corp. v. United States, 985 F. Supp. 1166. Kerr-McGee appeals to this court, pursuant to 28 U.S.C. § 1295(a)(5).

II.

The Court of International Trade reviews an antidumping duty determination by Commerce to determine if it is supported by "substantial evidence on the record and is otherwise in accordance with law." 19 U.S.C. ยง 1516a(b)(1)(B) (1994). This court reviews the Court of International Trade's decision under the same ...


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