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HQ 960824


CLA-2 RR:CR:GC 960824 JAS


TARIFF NO.: 7325.99.50

Mr. Fred Brewer
Magnequench International, Inc.
6435 Scatterfield Rd.
Anderson, IN 46013

RE: NY A86780 Modified; Neodymium-Iron-Cobalt Alloy Ingots; Powdered Product Used to Make Magnets; Ferroalloy, Chapter 72, Note 1(c); Heading 7202; Steel, Chapter 72, Note 1(d); Cast Articles of Iron or Steel, Heading 7325

Dear Mr. Brewer:

NY A86780, which the Customs Director, National Commodity Specialist Division, New York, issued to a Customs broker on your behalf on October 18, 1996, in part classified M4392 neodymium-iron-cobalt alloy ingots in subheading 7202.99.50, Harmonized Tariff Schedule of the United States (HTSUS) as other ferroalloys.

Pursuant to section 625(c)(1), Tariff Act of 1930 (19 U.S.C. 1625(c)(1)), as amended by section 623 of Title VI (Customs Modernization) of the North American Free Trade Agreement Implementation Act, Pub. L. 103-182, 107 Stat. 2057, 2186 (1993), notice of the proposed modification of NY A86780 was published on July 29, 1998, in the Customs Bulletin, Volume 32, Number 30. One comment was received by counsel on your behalf in support of the proposed modification. The classification of neodymium powder also discussed in NY A86780 is not in issue here.


The merchandise in question, M4392 neodymium-iron-cobalt alloy, is made by melting either pure neodymium or eutectic (88% neodymium and 12% iron) neodymium ingots in an electric induction furnace with iron in the form of steel billets, cobalt in the form of broken cathodes, and irregularly shaped ferroboron pieces. The resulting alloy is cast into ingots, typically
measuring 6 inches in diameter and 10 inches in length. This is the condition of the product as imported. The chemistry of this imported ingot is 27-29% rare earth elements (typically neodymium), 63% iron, 4.7-5.3% cobalt, and 1% other elements. After importation, the ingots are melted and ejected onto a chilled rotating wheel in a jet cast process. This rapid solidification cools or quenches the molten metal into flakes which are then crushed into powder form. The powder is used to make magnets for computers, anti-lock brakes, etc.

The provisions under consideration are as follows: 7202 Ferroalloys:

7202.99 Other

7202.99.50 Other...5 percent ad valorem

7325 Other cast articles of iron or steel:

7325.99 Other

7325.99.50 Other...3.5% ad valorem


Whether the neodymium-iron-cobalt alloy is a ferroalloy for tariff purposes.


Merchandise is classifiable under the Harmonized Tariff Schedule of the United States (HTSUS) in accordance with the General Rules of Interpretation (GRIs). GRI 1 states in part that for legal purposes, classification shall be determined according to the terms of the headings and any relative section or chapter notes, and provided the headings or notes do not require otherwise, according to GRIs 2 through 6.

Chapter 72, Note 1(c), HTSUS, in relevant part, defines Ferroalloys to include alloys in pigs, blocks, lumps, or similar primary forms, or in forms obtained by continuous casting, commonly used as an additive in the manufacture of other alloys or as deoxidants, desulfurizing agents or for similar uses in
ferrous metallurgy and generally not usefully malleable, containing by weight 4% or more of the element iron and a total of more than 10% of other elements, excluding carbon.

The percentage of iron and rare earth elements brings the product within the chemical composition defined in Note 1(c). However, literature submitted in connection with the ruling request that resulted in NY A86780 contains the following statement with respect to the imported neodymium-iron-cobalt alloy ingot that, after importation, is reduced to flakes, then to powder form "We use this powder to produce fully-dense MQ2 and MQ3 magnets. Annealed, the powder is sold as MQP to customers who wish to make their own bonded magnets or is used in-house to produce our line of MQ1 bonded magnets." The company specification for the product designated M4392 states it "[c]overs a purchased cast metal product to be used in the manufacture of Magnequench magnet material." Lacking other information, these statements compel the conclusion that the imported product is not commonly used as an additive in the manufacture of other alloys or as deoxidants, desulfurizing agents or for similar uses in ferrous metallurgy. The product is not a ferroalloy as defined in Chapter 72, Note 1(c), HTSUS.

Heading 7224 covers other alloy steel in ingots or other primary forms. However, the ingots of this heading are subsequently rolled or forged generally into semifinished products such as blooms, billets, slabs, etc., but sometimes directly into bars, sheets or other finished products. The post-importation processing, as described in this case, does not support classification of this product in any provision of heading 7224.

At importation, M4392 neodymium-iron-cobalt alloy ingots are cast articles. Heading 7325, other cast articles of iron or steel, covers all cast articles of iron or steel, not elsewhere specified or included, other than recognizable parts of machinery or mechanical appliances, or castings considered, for tariff purposes, as being unfinished articles of other headings. Lacking evidence of a more specific provision for the ingots in question, we conclude that they are cast articles of heading 7325.


Under the authority of GRI 1, M4392 neodymium-iron-cobalt alloy ingots are provided for in heading 7325. They are classifiable in subheading 7325.99.50, HTSUS. NY A86780, dated October 18, 1996, is modified accordingly.

In accordance with 19 U.S.C. 1625(c)(1), this ruling will become effective 60 days after its publication in the Customs Bulletin. Publication of rulings or decisions pursuant to 19 U.S.C. 1625(c)(1) does not constitute a change of practice or position in accordance with section 177.10(c)(1), Customs Regulations (19 CFR 177.10(c)(1)).


John Durant, Director
Commercial Rulings Division

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