Chinese Brick Exporter Says Its Products Don't Carry AD/CVD
A Chinese brick exporter alleged Dec. 4 at the Court of International Trade that the Commerce Department is illegally expanding the scope of its antidumping and countervailing duty orders on Chinese-imported magnesia carbon bricks (Fedmet Resources v. U.S., CIT # 23-00117).
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Fedmet Resources, a Chinese company that supplies materials for high-temperature manufacturing and energy processes, filed a brief at CIT in support of its motion for judgment on the agency record, in which it asked the court to rule that all Chinese magnesia carbon bricks with added alumina fall outside the scope of AD/CVD orders.
Magnesia carbon bricks are used to line steel furnaces. Similar products, magnesia alumina graphite bricks, are substantially the same, except that they also contain alumina.
Imported Chinese magnesia carbon bricks are subject to antidumping and countervailing duty orders, whereas Chinese magnesia alumina graphite bricks aren't. However, the original orders, as issued in 2010, didn't specify how much alumina a brick needs to be classified as the latter type, rather than the former. Fedmet says any added alumina makes a brick a magnesia alumina graphite brick, while Commerce determined this year alumina must make up at least 5% of the brick’s total mass.
The 2023 determination came by way of a Commerce covered merchandise inquiry in a CBP Enforce and Protect Act evasion investigation. In 2019, domestic producers alleged Fedmet lied when it said its recent entry was composed of magnesia alumina bricks, not magnesia carbon bricks. CBP tested 11 sample bricks, and in 2020 announced Fedmet had attempted to evade the antidumping duties. However, it walked its finding back in 2022 and instead requested Commerce make the scope determination.
In April 2023, Commerce found that two of the bricks fell under the AD order. It was uncertain about the remaining nine bricks because the tests used on them involved oxidation. Oxidation of the bricks, domestic producers said, caused chemical transformations that could lead the tests to overestimate the bricks’ initial alumina quantities.
Commerce had previously determined in a separate scope ruling in 2017 that another exporter’s bricks had to be tested using X-rays, which didn't involve oxidation. It also said those bricks had to be composed of at least 5% alumina to avoid classification as magnesia carbon bricks.
Fedmet brings this case against Commerce’s 2023 covered merchandise ruling, arguing Commerce is incorrectly applying the standards of the 2017 scope ruling to it. Commerce, it said, is wrongly requiring its bricks meet a 5% alumina threshold and be tested using X-rays, when the 2017 scope ruling should have controlled only the products it covered.
Commerce denied requiring X-ray testing for the bricks, saying it only ordered that the testing method not involve oxidation. It said it had to apply a 5% alumina threshold to all bricks to be fair to other exporters.