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Difluoromethane (R-32) from China

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Difluoromethane (R-32) from China Difluoromethane (R-32) from China Investigation No. 731-TA-1472 (Preliminary) Publication 5036 March 2020 U.S. International Trade Commission Washington, DC 20436 U.S. International Trade Commission COMMISSIONERS David S. Johanson, Chairman Rhonda K. Schmidtlein Jason E. Kearns Randolph J. Stayin Amy A. Karpel Catherine DeFilippo Director of Operations Staff assigned Ahdia Bavari, Investigator Jennifer Catalano, Industry Analyst Sara Ashley, Industry Analyst Natalia King, Economist David Boyland, Accountant Darlene Smith, Statistician Patrick Gallagher, Attorney Nathanael Comly, Supervisory Investigator Special assistance from Tyler Berard 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 Difluoromethane (R-32) from China Investigation No. 731-TA-1472 (Preliminary) Publication 5036 March 2020 CONTENTS Page Determination ............................................................................................................................... 1 Views of the Commission ............................................................................................................. 3 Introduction ................................................................................................................ I‐1 Background ............................................................................................................................. I‐1 Statutory criteria ..................................................................................................................... I‐2 Organization of report ............................................................................................................. I‐3 Market summary ..................................................................................................................... I‐3 Summary data and data sources ............................................................................................. I‐4 Previous and related investigations ......................................................................................... I‐4 Nature and extent of alleged sales at LTFV ............................................................................. I‐5 Alleged sales at LTFV ............................................................................................................ I‐5 The subject merchandise ......................................................................................................... I‐5 Commerce’s scope ............................................................................................................... I‐5 Tariff treatment ................................................................................................................... I‐6 The product ............................................................................................................................. I‐6 Description and applications ............................................................................................... I‐6 Manufacturing processes..................................................................................................... I‐8 Domestic like product issues ................................................................................................... I‐9 Part II: Conditions of competition in the U.S. market ............................................................ II‐1 U.S. market characteristics ..................................................................................................... II‐1 Channels of distribution ......................................................................................................... II‐3 Geographic distribution .......................................................................................................... II‐4 Supply and demand considerations ........................................................................................ II‐4 U.S. supply .......................................................................................................................... II‐4 U.S. demand ....................................................................................................................... II‐7 i CONTENTS Page Substitutability issues ........................................................................................................... II‐10 Lead times ........................................................................................................................ II‐10 Factors affecting purchasing decisions ............................................................................. II‐11 Comparison of U.S.‐produced and imported R‐32 ............................................................ II‐11 Part III: U.S. producers’ production, shipments, and employment ....................................... III‐1 U.S. producers ....................................................................................................................... III‐1 U.S. production, capacity, and capacity utilization ................................................................ III‐2 Alternative products .......................................................................................................... III‐3 U.S. producers’ U.S. shipments and exports .......................................................................... III‐3 U.S. producers’ inventories ................................................................................................... III‐7 U.S. producers’ imports and purchases ................................................................................. III‐7 U.S. employment, wages, and productivity ........................................................................... III‐8 Captive consumption ............................................................................................................. III‐9 Transfers and sales ............................................................................................................ III‐9 First statutory criterion in captive consumption ................................................................ III‐9 Second statutory criterion in captive consumption ........................................................... III‐9 Part IV: U.S. imports, apparent U.S. consumption, and market shares ................................ IV‐1 U.S. importers....................................................................................................................... IV‐1 U.S. imports .......................................................................................................................... IV‐2 Negligibility ........................................................................................................................... IV‐5 Apparent U.S. consumption and U.S. market shares ............................................................ IV‐5 ii CONTENTS Page Part V: Pricing data ............................................................................................................... V‐1 Factors affecting prices .......................................................................................................... V‐1 Raw material costs ............................................................................................................. V‐1 Transportation costs to the U.S. market ............................................................................ V‐1 U.S. inland transportation costs ......................................................................................... V‐2 Pricing practices .................................................................................................................... V‐2 Pricing methods ................................................................................................................. V‐2 Sales terms and discounts ................................................................................................. V‐3 Price and purchase cost data ................................................................................................. V‐4 Import purchase cost data ................................................................................................. V‐7 Price and purchase cost trends ........................................................................................ V‐10 Price and purchase cost comparisons .............................................................................. V‐13 Lost sales and lost revenue .............................................................................................. V‐14 Part VI: Financial experience of U.S. producers .................................................................... VI‐1 Background .......................................................................................................................... VI‐1 Operations on R‐32 .............................................................................................................. VI‐1 Revenue ............................................................................................................................ VI‐2 Cost of goods sold and gross profit or loss ..................................................................... VI‐10 SG&A expenses and operating income or loss ................................................................ VI‐12 Interest expense, other expenses and income, and net income or loss ......................... VI‐12 Capital expenditures
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