[Ferro-alloys.com]Last week's petition by US ferrosilicon producers Globe Specialty Metals and CC Metals and Alloys to the US International Trade Commission and the Department of Commerce to conduct an investigation on the imposition of antidumping duties on Russian and Venezuelan ferrosilicon could put a floor on US prices for the ferroalloy, market participants said Wednesday.

If the ITC and Commerce decide to conduct an investigation, several sources believe it could curb imports from both countries in the second half of the year and in 2014, because any antidumping duties that are levied would cover such imports.

"While spot demand for ferrosilicon isn't very good at the moment, the net effect of these imports not coming in will, at least, prevent prices falling further, even if they don't result in a price increase," one trader said.

A second trader agreed, saying, "Even if the case is not strong, there have been times where the domestic producers use the threatened duty as leverage to negotiate a minimum floor price or a quantity quota."

According to the petition, Globe and CC Metals and Alloys allege dumping margins for Russia range from 21.85% to 60.77%, while those for Venezuela range from 20.07% to 60.11%.

William Kramer of law firm DLA Piper, counsel to Globe and CCMA, said in an email that Commerce will investigate whether the imports are being dumped, while the ITC will examine whether the imports are causing material injury to the domestic ferrosilicon industry.

A preliminary hearing has been set for August 9 at the ITC in Washington. Before that date, Commerce "will decide on August 8 whether to initiate its investigation, based on examination of the petition allegations and the supporting evidence," Kramer said.

The ITC will decide by August 30, the scheduled date of the ITC vote, whether there is a reasonable indication the imports from Russia and Venezuela are causing material injury. Kramer said the determination would be based on evidence given at the hearing and also on other evidence gathered by the ITC during the preliminary investigation.

He added that in the period of the ITC investigation, all of 2010 through to the end of the first quarter of 2013, "Russia and Venezuela were the predominant sources of US ferrosilicon imports."

The petition identifies six Russian ferrosilicon producers, three of which are controlled by Chemk Industrial Group: Kuznetsk Ferroalloys, Chelyabinsk Electro-Metallurgical Plant and Yurginsk Ferroalloys Plant. The other three Russian ferrosilicon producers are Bratsk Ferroalloy Plant, Novolipetsk Metallurgical Plant and Serov Ferroalloys Plant.

The petition says that Chemk accounts for almost all of the Russian ferrosilicon exported to the US. The material is shipped by the company's trading arm, RFA International, to the US, where the material is imported by and consigned to a related company, Russian Ferro Alloys Inc.

Two US consignees, Pittsburgh-based Allegheny Alloys Trading LP and Amherst, New York-based CCMA LLC -- unrelated to CC Metals and Alloys -- have recently imported Russian ferrosilicon produced by Bratsk, according to the petition. CC Metals and Alloys was sold by CCMA to the Optima group in March 2011.

In Venezuela, there is one producer, FerroAtlantica de Venezuela, a subsidiary of Spain-based FerroAtlantica Group. All of the material exported by FerroVen to the US is imported and consigned to FerroAtlantica North America.

MIXED MARKET REACTION TO THE FILING

Some market participants thought that Globe and CCMA would be hard-pressed to prove injury, because the majority of imports are for standard-grade 75% Si ferrosilicon, whereas both Globe and CCMA make mostly high-purity material and are competing in different markets. But the petition argues that both domestic producers have been shut out of the standard 75% Si ferrosilicon market because of the imports.

But other participants said the domestic industry was unlikely to face much difficulty in proving injury. 

"Even if the domestic producers are mostly producing and selling high-purity material, it's mostly on long-term, formula contracts, and the formulas are based on premiums to spot pricing for standard, so they would argue that the imports of standard material have adversely affected their formulas," a third trader said.

In response to suggestions the domestic industry was not injured by concentrating on the high-purity market, Kramer said, "The US industry was not sheltered in some way by a different product focus."

There is speculation the ferrosilicon filing may be followed by a filing on South African silicomanganese by Felman Production, which suspended output July 1 at its LeTart, West Virginia, plant because of persistent low prices. Felman did not return calls or emails seeking comment.