Magnesium from Israel Investigation Nos. 701-TA-614 and 731-TA-1431 (Final) Publication 5009 January 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 Andres Andrade, Investigator Gregory LaRocca, Industry Analyst Natalia King, Economist Emily Kim, Accountant Cynthia Payne, Statistician Ravi Soopramanien, Attorney Nathanael Comly, Supervisory Investigator Special assistance from Julie Duffy 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 Magnesium from Israel Investigation Nos. 701-TA-614 and 731-TA-1431 (Final) Publication 5009 January 2020 CONTENTS Page Determinations ....................................................................................................................... 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 Antidumping and countervailing duty investigations ........................................................... I-4 Other investigations .............................................................................................................. I-8 Overview on Section 232 and Section 301 proceedings ....................................................... I-8 Nature and extent of subsidies and sales at LTFV .................................................................... I-9 Subsidies ................................................................................................................................ I-9 Sales at LTFV .......................................................................................................................... I-9 The subject merchandise ........................................................................................................ I-10 Commerce’s scope .............................................................................................................. I-10 Tariff treatment ................................................................................................................... I-11 The product ............................................................................................................................. I-11 Description and applications ............................................................................................... I-11 Manufacturing processes .................................................................................................... I-15 Domestic like product issues ................................................................................................... I-20 Part II: Conditions of competition in the U.S. market........................................................... II-1 U.S. market characteristics....................................................................................................... II-1 U.S. purchasers ......................................................................................................................... II-2 Channels of distribution ........................................................................................................... II-2 Geographic distribution ........................................................................................................... II-4 Supply and demand considerations ......................................................................................... II-4 i CONTENTS Page U.S. supply ............................................................................................................................ II-4 U.S. demand ....................................................................................................................... II-10 Substitutability issues ............................................................................................................. II-15 Lead times .......................................................................................................................... II-15 Knowledge of country sources ........................................................................................... II-16 Factors affecting purchasing decisions............................................................................... II-16 Comparisons of domestic products, subject imports, and nonsubject imports ................ II-21 Comparison of U.S.-produced and imported magnesium ................................................. II-22 Elasticity estimates ................................................................................................................. II-25 U.S. supply elasticity ........................................................................................................... II-25 U.S. demand elasticity ........................................................................................................ II-26 Substitution elasticity ......................................................................................................... II-26 Part III: U.S. producers’ production, shipments, and employment ...................................... III-1 U.S. producers ......................................................................................................................... III-1 Production related activities ................................................................................................... III-3 U.S. producers’ tolling operations ....................................................................................... III-5 U.S. production, capacity, and capacity utilization ................................................................. III-5 Alternative products ............................................................................................................ III-9 U.S. producers’ U.S. shipments and exports ........................................................................... III-9 U.S. producers’ inventories ................................................................................................... III-14 U.S. producers’ imports and purchases ................................................................................ III-15 U.S. employment, wages, and productivity .......................................................................... III-15 Part IV: U.S. imports, apparent U.S. consumption, and market shares ............................... IV-1 U.S. importers.......................................................................................................................... IV-1 U.S. imports ............................................................................................................................. IV-3 Negligibility .............................................................................................................................. IV-8 Apparent U.S. consumption .................................................................................................... IV-9 U.S. market shares ................................................................................................................ IV-10 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-3 U.S. inland transportation costs ........................................................................................... V-3 Pricing practices ....................................................................................................................... V-3 Pricing methods .................................................................................................................... V-3 Sales terms and discounts .................................................................................................... V-5 Price leadership .................................................................................................................... V-6 Price data .................................................................................................................................