Final Finding issued recommending imposition of Countervailing Duty on imports of “Aluminium Primary Foundry Alloy Ingot in different forms” from Malaysia(31.01.2022)

Product description – The scope of the product under consideration includes those Aluminium Alloy Ingots that are produced from smelting alumina or from re-smelting primary aluminium ingot/ production scrap/ primary scrap. Aluminium Alloy Ingots produced from post-consumer scrap is excluded. The product under consideration is primarily used for automobile and steel applications.

HS Code – 76012010

Country Involved – Malaysia.

Date of Initiation – 24th December, 2020.

Period of Investigation – 1st April 2019 – 30th September 2020 (18 months).

Injury Period – 2016-17, 2017-18, 2018-19, and the Period of Investigation.

Final Findings– 31st January, 2022.

Subsidy Margin, Injury margin and ad valorem duty:

Producer Subsidy Margin (Range) Injury Margin (Range) Duty Amount (as a % of CIF value)
Press Metal Bintulu Sdn. Bhd. 0-10% 0-10% 5.53%
Other producers/ exporters from Malaysia 10-20% 10-20% 13.27%

Key Findings –

  1. Since the PUC is produced and imported in different forms, the PUC is described as “primary foundry alloy ingot in different forms”.
  2. Since the domestic industry and the exporter has claimed different import volume and value based on DGCI&S data, the Authority relied on volume and value of export sales of the PUC by the only cooperating exporter, i.e., Press Metal Bintulu Sdn. Bhd., for the purpose of the injury analysis.
  3. The benefit received under a subsidy program that pertains to capital goods is spread across the AUL period of the asset involved. Information for the period is required to be examined.
  4. Since Industrial Building Allowance provides an additional allowance in the form of initial allowance over and above the normal depreciation, the program is countervailable. However, Allowance on Plant and Machinery is not countervailable since it provides a normal deduction of depreciation on building and plant & machinery as per straight-line method.
  5. The Authority found that the responding producers/exporters i.e., Press Metal Bintulu Sdn. Bhd., received waiver and refund of land premium, land at lease rate less than adequate remuneration, and preferential tariff for electricity.
  6. Since the cost for last mile connection of electricity is not a compulsory payment to the government for availing the subsidy, the deduction is not allowed while calculating benefit.
  7. The injury margins are significant. The domestic industry has suffered material injury which has a causal link with the subsidised subject imports.
  8. Depreciation and interest costs are part of cost of production relating to the PUC and does not fall under the category of “other factors” causing injury to the domestic industry.
  9. The Authority found that the imposition of CVD will be in public interest after a detailed examination. 
  10. The Authority recommended an ad valorem form of duty.