The State
Economic and Trade Commission of PRC Preliminary Determination in
the Antidumping Duty Investigation on Certain L-Lysine
Monohydrochloride Feed Grade
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2005-11-8 張江紅 Judy Chang
The State Economic and Trade Commission of People’s Republic of China
Preliminary Determination in the Antidumping Duty Investigation
on Certain L-Lysine Monohydrochloride Feed Grade
From the United States of America, the Public of Korea and
Indonesia
On June 19 2001, the Ministry of Foreign Trade and Economic
Cooperation (“MOFTEC”) decided to initiate an
anti-dumping investigation on imports of certain L-Lysine
Monohydrochloride Feed Grade (“LM product”) from the United States of
America, the Public of Korea and Indonesia after consultation
with the State Economic and Trade Commission (“SETC”). The MOFTEC conducted an
investigation on dumping and dumping margin, and the SETC
together with relevant authority of the State Council carried out
an investigation on domestic industry’s injury and injury degree.
Pursuant to the Anti-dumping Regulation of People’s Republic of China (the
Regulation), the SETC hereby made its preliminary determination
as follows:
I. Investigation proceedings
On May 17 2001, Sichuan Chuanhua Ajinomoto Co., Ltd., Guangxi
Guiyuan L-Lysine Co., Ltd. and Quanzhou Daquan L-Lysine Co., Ltd.
filed an anti-dumping petition against imported LM product from
the United States of America, the Public of Korea and Indonesia
with MOFTEC. After examination of the petition, the MOFTEC found
that the three petitioners had the standing to represent Chinese
LM industry to apply for an anti-dumping investigation and the
petition met the requirements set out in the article 11 and
article 12 of the Regulation. On June 19 2001, the MOFTEC
announced to initiate the anti-dumping investigation after
consultation with the SETC. The dumping investigation period
determined by the MOFTEC was from April 1 2000 till March 31
2001. And the injury investigation period determined by the SETC
was from January 1 1998 to March 31 2001. Meanwhile, the injury
investigation panel (“Panel”) was established.
On July 17, 18 and 19 2001, the SETC sent questionnaires to
domestic producers and importers. On July 18 2001, the SETC sent
questionnaires to foreign producers/exporters. The SETC received
questionnaire responses from 3 domestic producers, 7 importers
and 3 foreign producers within time limit. In August 2001, the
Panel carried out a verification visit to petitioners.
On July 11 and July 26, 27 2001, the SETC held a hearing for
petitioners and for foreign producers/exporters respectively and
heard their opinions on this investigation. After the hearings,
petitioners and other interested parties submitted written
opinions or presentations several times.
On January 15 2002, the SETC held a hearing for up-stream and
down-stream enterprises and heard opinions of domestic producers,
up-stream enterprises and down-stream users. On January 22 2001,
the SETC held a hearing for determination of industry injury and
heard opinions of all known interested parties.
The SETC analyzed the petition, received questionnaires and
information collected in verification visit. And the SETC took
full consideration of opinions and presentations submitted by
interested parties.
II. Investigated product and domestic like product
Product description:
The investigated product (“IP”) in this investigation was
certain L-Lysine Monohydrochloride Feed Grade imported from the
United States of America, the Public of Korea and Indonesia. Its
chemical molecular formula is C6H14N2O2.HCL.
The HS codes of IP under China Custom were 29224110、29224190. The scope of
investigation was limited to the L-Lysine Monohydrochloride Feed
Grade under the two HS codes. And the L-Lysine Monohydrochloride
for medical use under the codes was not included.
Production technology: …
Physical forms , physical and chemical characteristics: …
Main uses: …
After examination, the SETC found that L-Lysine Monohydrochloride
Feed Grade produced by domestic producers was identical to the IP
in physical and chemical characteristics, main productive
technical factors, production process and product uses, etc. and
they were substitutive. Therefore, they were like products.
The SETC found that the competition conditions between the IP and
the competition conditions between the IP and the domestic like
product were same; furthermore, the volume of imports from each
country was not negligible. Therefore, the SETC decided to
cumulatively assess the effects on the domestic industry of the
imports from the three countries.
III. The injury of domestic injury and injury degree
The SETC conducted the investigation on the alleged injury and
injury degree suffered by the domestic industry. The essential
facts and evidences were as follows:
1. The import volume and market share of the IP
The import volume of the IP from the United States of America,
the Public of Korea and Indonesia was increasing in injury
investigation period. According to China Custom’s statistics, the total volume of
the IP in 1998, 1999 and 2000 was 9570 ton, 31285 ton and 44781
ton respectively, increased by 226.9 percent and 43.1 percent in
1999 and 2000 respectively. The volume of the IP in the first
quarter in 2001 was 10155 ton, increased by 9.8 percent compared
with that in corresponding period of 2002.
Meanwhile, the market share of the IP in China market was
increasing in the investigation period. The market share of the
total IP accounted for 34.21 percent, 62.98 percent and 64.45
percent in 1998, 1999 and 2000 respectively.
The SETC noted that, prior to 1999, the import volume of the IP
shown in the statistics of China Custom was less than the likely
actual import volume resulted from the various unidentified HS
codes being applicable to the IP and from other factors. The SETC
took consideration of the effect on the relevant import volume of
the condition. Since 1999, the statistics of the import volume of
the IP became accurate as a consequence of the enforcement of the
Administration Regulation of the Feed and Feed Additive and the
identification of the classification of the IP in HS codes of
China Custom.
2. The price of the IP
The price of the IP increased then declined throughout the
investigation period. According to the import statistics of China
Custom, the weighted average prices of the total IP were US$
1450, 1133, and 1244 per ton in 1998, 1999 and 2000 respectively.
The price declined by 21.9 percent in 1999 and increased by 9.8
percent in 2000. The price of the IP in the first quarter of 2001
was US$ 1520 per ton, increased by 22.2 percent compared with
that of the IP in the corresponding period of 2000 and
constituted the summit in the investigation period.
3. Impact of the IP on the domestic industry
(1) The output of the domestic industry
The total output of the like product of the three petitioners
declined then increased throughout the investigation period and
the trend was increasing. The output of three petitioners
declined by 36.67 percent in 1999 and increased by 58.3 percent
in 2000. The output in the first quarter of 2001 increased by
14.9 percent compared with that in the corresponding period of
2000.
(2) Selling quantity
The total selling quantity of the like product of the three
petitioners declined then increased throughout the investigation
period and the trend was increasing. The selling quantity of
three petitioners declined by 16.69 percent in 1999 and increased
by 77.41 percent in 2000. The selling quantity in the first
quarter of 2001 increased by 6.6 percent compared with that in
the corresponding period of 2000.
(3) Selling price
The weighted average selling prices of the like product of the
three petitioners declined then increased throughout the period
of investigation and the trend was increasing. The weighted
average prices declined by 23.49 percent in 1999 and increased by
4.9 percent in 2000. The price in the first quarter of 2001
increased by 32.64 percent compared with the price in the
corresponding period of 2000 and constituted the highest price in
the period examined.
(4) Sales revenue
The total sales revenue of the like product of the three
petitioners declined then increased throughout the investigation
period and the trend was increasing. The sales revenue declined
by 36.26 percent in 1999 and increased by 86.09 percent in 2000.
The sales revenue in the first quarter of 2001 increased by 41.5
percent compared with that of the corresponding period of the
previous year and became the summit throughout the period
examined.
(5) Net income before income taxes
The sum of net income before income taxes of the three
petitioners was negative between 1998 and 2000. In the first
quarter of 2001, the total net income before income taxes of the
petitioners became positive. The net income before income taxes
declined by 143.86 percent in 1999 and increased by 15.65 percent
in 2000. In the first quarter of 2001, the
net income before income taxes increased by 297 percent compared
with that in the corresponding period of 2000. Throughout the
period examined, some of the petitioners were profitable,
however, others sustained a loss, which showing the great
difference in operation conditions between the petitioners. The
great loss of certain petitioner contributed to the negative sum
of net income before income taxes of the three petitioners.
(6) Market share
The total market share of the like product of the three
petitioners between 1998 and 2000 declined sharply, however, in
the first quarter of 2001, the market share rose. The market
share in 1998, 1999 and 2000 was 42.23 percent, 19.81 percent and
25.13 percent respectively. The SETC noted that the apparent
consumption’s variation as a consequence of
the difference in the statistics of import volume of the IP prior
to 1999 and took the consideration of the condition in making the
determination.
(7) Inventories
The inventories of the three petitioners fell sharply throughout
the investigation period. In 1999 and 2000, the inventories fell
by 21.55 percent and 94.3 percent respectively. The inventories
in the first quarter of 2001 fell compared with those in the
corresponding period of 2000.
(8) Average wages
The average wages of the employees of the three petitioners rose
by 0.96 percent averagely from 1998 to 2001.
(9) Unemployment ratio
There is not great change in unemployment ratio of the three
petitioners. The unemployment ration in 1998 was 5.39 percent and
it decreased by 0.17 percent and 1.35 percent respectively in
1999 and 2000.
(10) Utilization of capacity
The average utilization of capacity of the three petitioners was
low and was less than 60 percent throughout the investigation
period. It was lowest in 1999 and rose in 2000 and the first
quarter of 2001.
(11) Return on investments
The averaged return on investments of the three petitioners was
negative throughout the period examined. It fell by 6.84 percent
in 1999 and rose by 2.83 percent in 2000.
(12) Net cash flow
Net cash flow of the three petitioners rose between 1998 and
2000. It increased by 110 percent and 603 percent in 1999 and
2000 respectively.
(13) Development conditions of the domestic industry
The development of the domestic industry was not suppressed by
the IP. In May 2000, Changchun Dacheng Biology & Chemical
Engineering Co., Ltd., which contained the greatest production
capacity of L-Lysine Monohydrochloride Feed Grade in China, was
established. In 2001, Sichuan Chuanhua Ajinomoto Co., Ltd., one
of the petitioners, enhanced its L-Lysine Monohydrochloride Feed
Grade production capacity.
4. Production capacity, export capacity and inventories of the IP
in the United States of America, the Public of Korea and
Indonesia
According to questionnaires submitted by three respondents
located separately in the United States of America, the Public of
Korea and Indonesia, the total production capacity, output,
export volume and inventories of the three respondents in 2000
was 348759 ton, 300552 ton, 254559 ton and 9529 ton respectively.
84.7 percent of the total output was destined for export. The
export volume to China accounted for 23.5 percent of the total
export volume. Notwithstanding the great production capacity and
export capacity, the inventories of the respondents were little.
Meanwhile, their export markets dispersed and were not
concentrated on China. Furthermore, their utilization of capacity
was great. Therefore, it was not likely for them to increase
their exports to China in a large scale.
5. Conclusion
The preceding economic factors of the petitioners in 1999 fell
sharply and rose gradually in 2000. And they rose to a higher
level in the first quarter of 2001. The SETC noted that L-Lysine
Monohydrochloride Feed Grade industry in the world experience a
historical stagnation in 1999 and the prices fell to the lowest
in the last five years. The condition became better since 2000.
The variation of operation conditions of the petitioners was
consistent with that of the industry in the world.
For the foregoing facts and evidences, after the analysis of the
import volume and price of the IP and the trend of the relevant
economic factors of the domestic industry, the SETC found that
notwithstanding the increase of the volume of the IP, the
significant economic factors of the domestic industry, such as
output, selling quantity, selling price, sales revenue, net
income before income taxes and utilization capacity rose during
the latter investigated period except that certain factors
changed a little or were at a lower level. Furthermore, the
development of the domestic industry had not been suppressed by
the IP. Therefore, the IP did not cause a material injury or the
threat of a material injury of the domestic industry.
IV. Preliminary determination
Pursuant to article 27 of the Regulation, by reason that the IP
did not cause a material injury or the threat of a material
injury of the domestic industry, the SETC and MOFTEC determined
to terminate this investigation.