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Sebacic Acid from China Sebacic Acid From China Investigation No. 731-TA-653 (Second Review) Publication 3775 May 2005 U.S. International Trade Commission COMMISSIONERS Stephen Koplan, Chairman Deanna Tanner Okun, Vice Chairman Marcia E. Miller Jennifer A. Hillman Charlotte R. Lane Daniel R. Pearson Robert A. Rogowsky Director of Operations Staff assigned: Jai Motwane, Investigator Robert Randall, Industry Analyst Edward Wilson, Economist David Boyland, Accountant Karen Veninga Driscoll, Attorney Andrea Casson, Attorney Lita David-Harris, Statistician Douglas Corkran, Supervisory Investigator Address all communications to Secretary to the Commission United States International Trade Commission Washington, DC 20436 U.S. International Trade Commission Washington, DC 20436 www.usitc.gov Sebacic Acid From China Investigation No.731-TA-653 (Second Review) Publication 3775 May 2005 CONTENTS Page Determination................................................................... 1 Views of the Commission ......................................................... 3 Part I: Introduction and overview ................................................... I-1 Background .................................................................. I-1 The original investigation .................................................... I-1 The first five-year review .................................................... I-2 Statutory criteria and organization of the report................................... I-3 Commerce’s results of expedited review ........................................... I-5 Commerce’s administrative reviews............................................... I-5 The subject product ............................................................ I-7 Commerce’s scope.......................................................... I-7 Description ............................................................... I-7 Applications............................................................... I-8 Manufacturing processes ..................................................... I-8 Channels of distribution...................................................... I-9 Domestic like product issues .................................................... I-10 Physical characteristics and uses............................................... I-10 Common manufacturing facilities and production employees ........................ I-11 Interchangeability .......................................................... I-12 Customer and producer perceptions ............................................ I-12 Channels of distribution...................................................... I-13 Price .................................................................... I-13 U.S. market participants........................................................ I-13 U.S. producers............................................................. I-13 U.S. importers............................................................. I-15 U.S. chemical manufacturers using sebacic acid................................... I-17 U.S. sebacic acid distributors ................................................. I-17 U.S. Government........................................................... I-17 Apparent U.S. consumption and market shares ...................................... I-18 Part II: Conditions of competition in the U.S. market ................................... II-1 U.S. market segments/channels of distribution....................................... II-1 Supply and demand considerations ................................................ II-1 U.S. supply ............................................................... II-1 U.S. demand .............................................................. II-3 Substitutability issues .......................................................... II-6 Factors affecting purchasing decisions .......................................... II-6 Comparisons of domestic products, subject imports, and nonsubject imports ............ II-10 Elasticity estimates............................................................ II-11 U.S. supply elasticity ........................................................ II-12 U.S. demand elasticity....................................................... II-12 Substitution elasticity ....................................................... II-12 Part III: U.S. producers’ operations ................................................. III-1 U.S. producers’ capacity, production, and capacity utilization .......................... III-1 i CONTENTS–Continued Page Part III: U.S. producers’ operations–Continued U.S. producers’ domestic shipments, internal consumption, and export shipments ........... III-2 U.S. producers’ inventories ..................................................... III-3 U.S. producers’ imports and purchases ............................................. III-3 U.S. producers’ employment, wages, and productivity ................................ III-3 Financial experience of U.S. producers ............................................ III-4 Background ............................................................... III-4 Operations on sebacic acid ................................................... III-4 Value added............................................................... III-5 Capital expenditures and research & development expenses ............................ III-6 Assets and return on investment .................................................. III-6 Part IV: U.S. imports and the foreign industry ......................................... IV-1 U.S. imports ................................................................. IV-1 U.S. importers’ inventories...................................................... IV-2 The industry in China .......................................................... IV-2 Nonsubject countries ........................................................... IV-4 Part V: Pricing and related information .............................................. V-1 Factors affecting prices......................................................... V-1 Raw materials ............................................................. V-1 Transportation costs to the U.S. market.......................................... V-1 U.S. inland transportation costs................................................ V-1 Exchange rates............................................................. V-1 Pricing practices.............................................................. V-2 Pricing methods ............................................................ V-2 Price data ................................................................... V-2 Price trends ............................................................... V-3 Price comparisons .......................................................... V-4 Appendices A. Federal Register notices and Commission statement on adequacy ...................... A-1 B. Summary data............................................................... B-1 C. Comments by U.S. producers, importers, purchasers, and foreign producers/exporters regarding the effects of the antidumping duty order and the likely effects of revocation ............. C-1 D. Genesis sebacic acid product specification list ..................................... D-1 E. Union Camp/Arizona’s sebacic acid production process .............................. E-1 F. Production process for sebacic acid sold by Genesis ................................. F-1 Note.–Information that would reveal confidential operations of individual concerns may not be published and therefore has been deleted from this report. Such deletions are indicated by asterisks. ii UNITED STATES INTERNATIONAL TRADE COMMISSION Investigation No. 731-TA-653 (Second Review) SEBACIC ACID FROM CHINA DETERMINATION On the basis of the record1 developed in the subject five-year review, the United States International Trade Commission (Commission) determines, pursuant to section 751(c) of the Tariff Act of 1930 (19 U.S.C. § 1675(c)) (the Act), that revocation of the antidumping duty order on sebacic acid from China would not be likely to lead to continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time. BACKGROUND The Commission instituted this review on April 1, 2004 (69 FR 17233) and determined on July 6, 2004 that it would conduct a full review (69 FR 45075, July 28, 2004). Notice of the scheduling of the Commission’s review and of a public hearing to be held in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the Federal Register on July 28, 2004 (69 FR 45075). Notice of cancellation of the public hearing scheduled in connection with this review was published in the Federal Register on December 7, 2004 (69 FR 70705). Notice of the revised scheduling of the review was published in the Federal Register on January 28, 2005 (70 FR 4150). 1 The record is defined in sec. 207.2(f) of the Commission’s Rules of Practice and Procedure (19 CFR § 207.2(f)). VIEWS OF THE COMMISSION Based on the record in this five-year review, we determine under section 751(c) of the Tariff Act of 1930, as amended (the Act), that revocation of the antidumping duty order on sebacic acid from China would not be likely to lead to continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time. I. BACKGROUND This review presents
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