U.S. International Trade Commission

Publication 4441 December 2013

Washington, DC 20436

Non-Oriented Electrical Steel from China, 

Germany, Japan, Korea, Sweden, and 

Taiwan

Investigation Nos. 701-TA-506-508 and 731-TA-1238-1243 (Preliminary)
U.S. International Trade Commission

COMMISSIONERS 

 

Irving A. Williamson, Chairman 

Daniel R. Pearson 

Shara L. Aranoff 

Dean A. Pinkert 

David S. Johanson 

Meredith M. Broadbent

Robert B. Koopman

Staff assigned

Address all communications to 

Secretary to the Commission 

United States International Trade Commission 

Washington, DC 20436

Director, Office of Operations

Edward Petronzio, Investigator 

Gerald Houck, Industry Analyst 

John Benedetto, Economist 

Charles Yost, Accountant 

Mara Alexander, Statistician 

Carolyn Holmes, Statistical Assistant 

David Fishberg, Attorney 

Courtney McNamera, Attorney 

James McClure, Supervisory Investigator
U.S. International Trade Commission

Washington, DC 20436 

www.usitc.gov

Publication 4441 December 2013

Non-Oriented Electrical Steel from China, 

Germany, Japan, Korea, Sweden, and 

Taiwan

Investigation Nos. 701-TA-506-508 and 731-TA-1238-1243 (Preliminary)
 
  

CONTENTS

Page

i

Determinations............................................................................................................................... 1

Views of the Commission ............................................................................................................... 3

Part I: Introduction................................................................................................................ I‐1

Background................................................................................................................................ I‐1

Statutory criteria and organization of the report..................................................................... I‐1

Statutory criteria ................................................................................................................... I‐1

Organization of report........................................................................................................... I‐2

Market summary....................................................................................................................... I‐3

Summary data and data sources............................................................................................... I‐3

Previous and related investigations.......................................................................................... I‐4

Nature and extent of alleged subsidies and sales at LTFV........................................................ I‐4

Alleged subsidies................................................................................................................... I‐4

Alleged sales at LTFV ............................................................................................................. I‐4

The subject merchandise .......................................................................................................... I‐5

Commerce’s scope ................................................................................................................ I‐5

Tariff treatment..................................................................................................................... I‐6

The product............................................................................................................................... I‐6

Manufacturing processes...................................................................................................... I‐7

Description of CRML .............................................................................................................. I‐8

Domestic like product issues..................................................................................................... I‐9

Domestic industry ................................................................................................................... I‐12

Part II: Conditions of competition in the U.S. market............................................................ II‐1

U.S. market characteristics....................................................................................................... II‐1

U.S. market segments .............................................................................................................. II‐1

Channels of distribution........................................................................................................... II‐1

Supply and demand considerations......................................................................................... II‐3

U.S. supply ............................................................................................................................ II‐3
  

CONTENTS

Page

ii

Part II: Conditions of competition in the U.S. market (Continued) .............................................

U.S. demand ....................................................................................................................... II‐10

Substitutability issues............................................................................................................. II‐13

Lead times .......................................................................................................................... II‐13

Purchasers.......................................................................................................................... II‐13

Comparison of U.S.‐produced and imported product ....................................................... II‐14

Part III: U.S. producers’ production, shipments, and employment....................................... III‐1

U.S. producers......................................................................................................................... III‐1

U.S. production, capacity, and capacity utilization................................................................. III‐3

U.S. producers’ U.S. shipments and exports........................................................................... III‐3

U.S. producers’ inventories..................................................................................................... III‐3

U.S. producers’ imports and purchases.................................................................................. III‐4

U.S. employment, wages, and productivity ............................................................................ III‐4

Part IV: U.S. imports, apparent U.S. consumption, and market shares ................................IV‐1

U.S. importers..........................................................................................................................IV‐1

U.S. imports............................................................................................................................. IV‐2

Negligibility.............................................................................................................................. IV‐5

Cumulation considerations .....................................................................................................IV‐6

Apparent U.S. consumption ....................................................................................................IV‐6

U.S. market shares ..................................................................................................................IV‐7

Ratio of imports to U.S. production ........................................................................................IV‐8

Part V: Pricing data...............................................................................................................V‐1

Factors affecting prices............................................................................................................V‐1

Raw material costs ...............................................................................................................V‐1

U.S. inland transportation costs...........................................................................................V‐4

Pricing practices .......................................................................................................................V‐4

Pricing methods....................................................................................................................V‐4
  

CONTENTS

Page

iii

Part V: Pricing data (Continued) ................................................................................................

Sales terms and discounts....................................................................................................V‐5

Price data..................................................................................................................................V‐5

Price trends...........................................................................................................................V‐8

Price comparisons ................................................................................................................V‐8

Lost sales and lost revenue ......................................................................................................V‐9

Purchaser comments..........................................................................................................V‐10

Part VI: Financial experience of U.S. firms ...........................................................................VI‐1

Background..............................................................................................................................VI‐1

Operations on NOES................................................................................................................VI‐1

Net sales..............................................................................................................................VI‐2

Costs/expenses....................................................................................................................VI‐2

Profitability ..........................................................................................................................VI‐3

Variance analysis.................................................................................................................VI‐3

Capital expenditures and research and development expenses............................................VI‐4

Assets and return on investment............................................................................................VI‐4

Capital and investment ...........................................................................................................VI‐5

Actual negative effects........................................................................................................VI‐5

Anticipated negative effects................................................................................................VI‐5

Part VII: Threat considerations and information on nonsubject countries..........................VII‐1

The industry in China..............................................................................................................VII‐3

The industry in Germany........................................................................................................VII‐3

The industry in Japan .............................................................................................................VII‐5

The industry in Korea .............................................................................................................VII‐6

The industry in Sweden..........................................................................................................VII‐7

The industry in Taiwan ...........................................................................................................VII‐8

U.S. inventories of imported merchandise ............................................................................VII‐8
  

CONTENTS

Page

iv

Part VII: Threat considerations and information on nonsubject countries (Continued)..............

U.S. importers’ outstanding orders........................................................................................VII‐9

Antidumping or countervailing duty orders in third‐country markets..................................VII‐9

Information on nonsubject countries....................................................................................VII‐9

Appendixes

A. Federal Register notices.................................................................................................... A‐1

B. Calendar of the public conference.................................................................................... B‐1

C. Summary data................................................................................................................... C‐1

Note.—Information that would reveal confidential operations of individual concerns may not

be published and therefore has been deleted.  Such deletions are indicated by asterisks.
1

UNITED STATES INTERNATIONAL TRADE COMMISSION

Investigation Nos. 701-TA-506-508 and 731-TA-1238-1243 (Preliminary)

NON-ORIENTED ELECTRICAL STEEL FROM CHINA, GERMANY, JAPAN, KOREA, 

SWEDEN, AND TAIWAN

DETERMINATIONS

On the basis of the record1 developed in the subject investigations, the United States 

International Trade Commission (Commission) determines, pursuant to sections 703(a) and 

733(a) of the Tariff Act of 1930 (19 U.S.C. '' 1671b(a) and 1673b(a)) (the Act), that there is a 

reasonable indication that an industry in the United States is materially injured by reason of 

imports from China, Germany, Japan, Korea, Sweden, and Taiwan of non-oriented electrical 

steel, provided for in subheadings 7225.19.00 and 7226.19.10, and 7226.19.90 of the

Harmonized Tariff Schedule of the United States, that are alleged to be sold in the United States 

at less than fair value (“LTFV”), and by reason of imports of non-oriented electrical steel that 

are allegedly subsidized by the Governments of China, Korea, and Taiwan.

2

COMMENCEMENT OF FINAL PHASE INVESTIGATIONS

Pursuant to section 207.18 of the Commission=s rules, the Commission also gives notice 

of the commencement of the final phase of its investigations. The Commission will issue a 

final phase notice of scheduling, which will be published in the Federal Register as provided in 

section 207.21 of the Commission=s rules, upon notice from the Department of Commerce 

(Commerce) of affirmative preliminary determinations in the investigations under sections 

703(b) or 733(b) of the Act, or, if the preliminary determinations are negative, upon notice of 

affirmative final determinations in those investigations under sections 705(a) or 735(a) of the 

Act. Parties that filed entries of appearance in the preliminary phase of the investigations 

need not enter a separate appearance for the final phase of the investigations. Industrial 

users, and, if the merchandise under investigation is sold at the retail level, representative 

consumer organizations have the right to appear as parties in Commission antidumping and 

countervailing duty investigations. The Secretary will prepare a public service list containing 

the names and addresses of all persons, or their representatives, who are parties to the 

investigations.

 

 1 The record is defined in sec. 207.2(f) of the Commission=s Rules of Practice and Procedure (19 

CFR ' 207.2(f)).

 2 Commissioners Shara L. Aranoff and F. Scott Kieff did not participate.
2

BACKGROUND

On September 30, 2013, a petition was filed with the Commission and Commerce by AK 

Steel Corp., West Chester, Ohio, alleging that an industry in the United States is materially 

injured or threatened with material injury by reason of LTFV and subsidized imports of 

non-oriented electrical steel from China, Korea, and Taiwan and LTFV imports of non-oriented 

electrical steel from China, Germany, Japan, Korea, Sweden, and Taiwan. Accordingly, effective 

September 30, 2013, the Commission instituted countervailing duty investigation Nos. 

701-TA-506-508 and antidumping duty investigation Nos. 731-TA-1238-1243 (Preliminary).

Notice of the institution of the Commission=s investigations and of a public conference 

to be held in connection therewith was given by posting copies of the notice in the Office of the 

Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice 

in the Federal Register of October 22, 2013 (78 FR 62660). The conference was held in 

Washington, DC, on November 6, 2013, and all persons who requested the opportunity were 

permitted to appear in person or by counsel.
3

Views of the Commission

Based on the record in the preliminary phase of these investigations, we find that there

is a reasonable indication that an industry in the United States is materially injured by reason of

imports of non‐oriented electrical steel (NOES) from China, Germany, Japan, Korea, Sweden,

and Taiwan that are allegedly sold in the United States at less than fair value and imports of

NOES that are allegedly subsidized by the Governments of China, Korea, and Taiwan.1

I. The Legal Standard for Preliminary Determinations  

The legal standard for preliminary antidumping and countervailing duty determinations

requires the Commission to determine, based upon the information available at the time of the

preliminary determinations, whether there is a reasonable indication that a domestic industry is

materially injured or threatened with material injury, or that the establishment of an industry is

materially retarded, by reason of the allegedly unfairly traded imports.2

  In applying this

standard, the Commission weighs the evidence before it and determines whether “(1) the

record as a whole contains clear and convincing evidence that there is no material injury or

threat of such injury; and (2) no likelihood exists that contrary evidence will arise in a final

investigation.”3

II. Background  

The petitions in these investigations were filed on September 30, 2013, by AK Steel

Corporation (AK Steel), a domestic producer of NOES.  Petitioner appeared at the conference

and submitted a postconference brief.   

Several respondent entities participated in these investigations.  Baoshan Iron & Steel

Ltd., a producer of subject merchandise from China, and the China Iron and Steel Association

(collectively Chinese Respondents) appeared at the conference and filed a postconference

brief.  ThyssenKrupp Steel Europe AG, a producer of subject merchandise from Germany, and

ThyssenKrupp Steel North America, an importer of subject merchandise from Germany

(collectively ThyssenKrupp), appeared at the conference and submitted a postconference brief,

as did C.D. Walzholz KG (CDW), a producer of subject merchandise from Germany.4

  JFE Steel

Corporation and Nippon Steel & Sunimoto Metal Corporation (collectively Japanese

Respondents), producers of subject merchandise from Japan, appeared at the conference and

                                                       1 Commissioners Aranoff and Kieff did not participate in these investigations.    2 19 U.S.C. §§ 1671b(a), 1673b(a) (2000); see also American Lamb Co. v. United States, 785 F.2d

994, 1001‐04 (Fed. Cir. 1986); Aristech Chem. Corp. v. United States, 20 CIT 353, 354‐55 (1996).  No party

argues that the establishment of an industry in the United States is materially retarded by the allegedly

unfairly traded imports.

3 American Lamb Co., 785 F.2d at 1001; see also Texas Crushed Stone Co. v. United States, 35

F.3d 1535, 1543 (Fed. Cir. 1994). 4 CDW and ThyssenKrupp are also referred to collectively as German Respondents.
4

jointly submitted a postconference brief.  Cogent Power Inc. (Cogent) and Surahammars Bruk

AB (collectively Swedish Respondents), an importer of the subject merchandise from Sweden

and a producer of the subject merchandise from Sweden, respectively, appeared at the

conference and submitted a postconference brief.  China Steel Corporation (China Steel or

Taiwanese Respondent), a producer of the subject merchandise from Taiwan, appeared at the

conference and filed a postconference submission.     

U.S. industry data are based on questionnaire responses of two firms, AK Steel and

Nucor Corporation (Nucor), which are believed to account for all U.S. production of NOES

during 2012.5  Except as noted, U.S. import data are based on the official U.S. Department of

Commerce (Commerce) statistics and questionnaire responses from 25 U.S. importers,

representing 87.4 percent of total subject imports in 2012 (by country, 76.2 percent of imports

from China, 108.5 percent of imports from Germany, 71.8 percent of imports from Japan, 99.3

percent of imports from Korea, 99.2 percent of imports from Sweden, and 90.1 percent of

imports from Taiwan).6  The Commission received responses to its questionnaires from ten

foreign producers/exporters of subject merchandise: two producers of NOES in China,

accounting for *** percent of U.S. imports of NOES from China in 2012; three producers of

NOES in Germany, accounting for *** of U.S. imports of NOES from Germany in 2012; three

producers/exporters of NOES from Japan, accounting for *** percent of U.S. imports of NOES

from Japan in 2012; one producer of NOES in Korea, accounting for *** percent of U.S. imports

of NOES from Korea in 2012; and one producer of NOES in Sweden, accounting for *** percent

of U.S. imports of NOES from Sweden in 2012.7

III. Domestic Like Product

A. Legal Standard

In determining whether there is a reasonable indication that an industry in the United

States is materially injured or threatened with material injury by reason of imports of the

subject merchandise, the Commission first defines the “domestic like product” and the

“industry.”8

  Section 771(4)(A) of the Tariff Act of 1930, as amended (“the Tariff Act”), defines

the relevant domestic industry as the “producers as a whole of a domestic like product, or

those producers whose collective output of a domestic like product constitutes a major

proportion of the total domestic production of the product.”9

  In turn, the Tariff Act defines

                                                       5 Confidential Report (CR) at I‐4, III‐1; Public Report (PR) at I‐3, III‐1.

6 CR at I‐4 – I‐5, IV‐1, PR at I‐3‐4, IV‐1.   Coverage was calculated based on official Commerce

import statistics relative to the quantity of imports, in short tons, reported in questionnaire data in

2012.  CR at I‐5, n.4, PR at I‐4, n.4.    7 CR at VII‐3, VII‐5, VII‐8, VII‐12, VII‐15, PR at VII‐3, VII‐5‐8.

8 19 U.S.C. § 1677(4)(A).

9 19 U.S.C. § 1677(4)(A).
5

“domestic like product” as “a product which is like, or in the absence of like, most similar in

characteristics and uses with, the article subject to an investigation.”10

The decision regarding the appropriate domestic like product(s) in an investigation is a

factual determination, and the Commission has applied the statutory standard of “like” or

“most similar in characteristics and uses” on a case‐by‐case basis.11  No single factor is

dispositive, and the Commission may consider other factors it deems relevant based on the

facts of a particular investigation.12  The Commission looks for clear dividing lines among

possible like products and disregards minor variations.13  Although the Commission must accept

Commerce’s determination as to the scope of the imported merchandise that is subsidized

and/or sold at less than fair value,14 the Commission determines what domestic product is like

the imported articles Commerce has identified.15  The Commission may, where appropriate,

include domestic articles in the domestic like product in addition to those described in the

scope.16

                                                       10 19 U.S.C. § 1677(10). 11 See, e.g., Cleo Inc. v. United States, 501 F.3d 1291, 1299 (Fed. Cir. 2007); NEC Corp. v.

Department of Commerce, 36 F. Supp. 2d 380, 383 (Ct. Int’l Trade 1998); Nippon Steel Corp. v. United

States, 19 CIT 450, 455 (1995); Torrington Co. v. United States, 747 F. Supp. 744, 749 n.3 (Ct. Int’l Trade

1990), aff’d, 938 F.2d 1278 (Fed. Cir. 1991) (“every like product determination ‘must be made on the

particular record at issue’ and the ‘unique facts of each case’”).  The Commission generally considers a

number of factors including the following:  (1) physical characteristics and uses; (2) interchangeability;

(3) channels of distribution; (4) customer and producer perceptions of the products; (5) common

manufacturing facilities, production processes, and production employees; and, where appropriate, (6)

price.  See Nippon, 19 CIT at 455 n.4; Timken Co. v. United States, 913 F. Supp. 580, 584 (Ct. Int’l Trade

1996). 12 See, e.g., S. Rep. No. 96‐249 at 90‐91 (1979).

13 See, e.g., Nippon, 19 CIT at 455; Torrington, 747 F. Supp. at 748‐49; see also S. Rep. No. 96‐249

at 90‐91 (Congress has indicated that the like product standard should not be interpreted in “such a

narrow fashion as to permit minor differences in physical characteristics or uses to lead to the

conclusion that the product and article are not ‘like’ each other, nor should the definition of ‘like

product’ be interpreted in such a fashion as to prevent consideration of an industry adversely affected

by the imports under consideration.”). 14 See, e.g., USEC, Inc. v. United States, 34 Fed. Appx. 725, 730 (Fed. Cir. 2002) (“The ITC may not

modify the class or kind of imported merchandise examined by Commerce.”); Algoma Steel Corp. v.

United States, 688 F. Supp. 639, 644 (Ct. Int’l Trade 1988), aff’d, 865 F.3d 240 (Fed. Cir.), cert. denied,

492 U.S. 919 (1989).

15 Hosiden Corp. v. Advanced Display Mfrs., 85 F.3d 1561, 1568 (Fed. Cir. 1996) (the Commission

may find a single like product corresponding to several different classes or kinds defined by Commerce);

Cleo, 501 F.3d at 1298 n.1 (“Commerce’s {scope} finding does not control the Commission’s {like

product} determination.”); Torrington, 747 F. Supp. at 748‐52 (affirming the Commission’s

determination defining six like products in investigations where Commerce found five classes or kinds).

16 See, e.g., Pure Magnesium from China and Israel, Inv. Nos. 701‐TA‐403 and 731‐TA‐895‐96

(Final), USITC Pub. 3467 at 8 n.34 (Nov. 2001); Torrington, 747 F. Supp.  at 748‐49 (holding that the

Commission is not legally required to limit the domestic like product to the product advocated by the

petitioner, co‐extensive with the scope).
6

B. The Product

In its notice of initiation, Commerce defined the imported merchandise within the scope

of these investigations as follows:

The merchandise subject to these investigations consists of non‐oriented

electrical steel (NOES), which includes cold‐rolled, flat‐rolled, alloy steel

products, whether or not in coils, regardless of width, having an actual thickness

of 0.20 mm or more, in which the core loss is substantially equal in any direction

of magnetization in the plane of the material. The term “substantially equal” in

the prior sentence means that the cross grain direction of core loss is no more

than 1.5 times the straight grain direction (i.e., the rolling direction) of core loss.

NOES has a magnetic permeability that does not exceed 1.65 tesla when tested

at a field of 800 A/m (equivalent to 10 oersteds) along (i.e., parallel to) the rolling

direction of the sheet (i.e., B800 value). NOES contains by weight at least 1.25

percent of silicon but less than 3.5 percent of silicon, not more than 0.08 percent

of carbon, and not more than 1.5 percent of aluminum.  

NOES is subject to these investigations whether it is fully processed (fully

annealed to develop final magnetic properties) or semi‐processed (finished to

final thickness and physical form but not fully annealed to develop final magnetic

properties); whether or not it is coated (e.g., with enamel, varnish, natural oxide

surface, chemically treated or phosphate surface, or other non‐metallic

materials). Fully processed NOES is typically made to the requirements of ASTM

specification A 677, Japanese Industrial Standards (JIS) specification C 2552,

and/or International Electrotechnical Commission (IEC) specification 60404‐8‐4.

Semi‐processed NOES is typically made to the requirements of ASTM

specification A 683. However, the scope of these investigations is not limited to

merchandise meeting the specifications noted above.

NOES is sometimes referred to as cold‐rolled non‐oriented electrical steel

(CRNO),  non‐grain oriented (NGO), non‐oriented (NO), or cold‐rolled non‐grain

oriented (CRNGO). These terms are interchangeable.17

                                                       17 Non‐Oriented Electrical Steel From the People’s Republic of China, the Republic of Korea, and

Taiwan: Initiation of Countervailing Duty Investigations, 78 Fed. Reg. 68412, 68416 (Dep’t of Commerce

Nov. 14, 2013); Non‐Oriented Electrical Steel From the People’s Republic of China, Germany, Japan, the

Republic of Korea, Sweden, and Taiwan: Initiation of Antidumping Duty Investigations, 78 Fed. Reg.

69041, 69047 (Dep’t of Commerce Nov. 18, 2013).  On November 22, 2013, Petitioner requested that

Commerce revise the scope language to define more precisely the intended scope of the investigations.  

Petition Amendment To Clarify the Proposed Scope Definition, November 22, 2013.  Specifically,

Petitioner seeks to revise the scope to require more than 1.00 percent silicon rather than 1.25 percent

silicon and to require a surface oxide coating, removing the language which indicates that the scope

(Continued...)
7

NOES is a flat‐rolled, alloy steel product that is used to manufacture laminations that are

assembled in stacks to produce magnetic cores for alternating‐current electrical apparatus.  

NOES has desirable magnetic properties that are similar in all directions (nonoriented), in

contrast to grain‐oriented electrical steel (GOES), which has superior magnetic properties in the

lengthwise direction of the sheet, but less favorable properties in other directions.  Thus, NOES

is used primarily to produce laminations for which the direction of the magnetic flux in the

apparatus is constantly changing, such as for rotating machinery (e.g., motors and generators),

whereas GOES is used primarily in static equipment, such as transformers, for which the

laminations can be produced in such a way as to take advantage of the favorable directionality

of the steel.  NOES is also used in small static apparatus, such as small, low‐voltage

transformers and lighting ballasts, if the higher cost of GOES cannot be justified by potential

savings in improved energy efficiency.18

NOES is sold in sheet or strip form, either in coils or in straight lengths.  Two types of

NOES are produced: fully processed NOES, for which the producer performs the final annealing;

and semi‐processed NOES, which, although it is annealed by the producer, must be annealed

once again by the end user after being punched or otherwise formed into laminations in order

to achieve its potential magnetic properties.  Both domestic and imported NOES are produced

in compliance with specifications issued by ASTM International (ASTM), or proprietary or

international specifications. 19

NOES, as currently defined in the scope definition, is produced of steel that is alloyed

with 1.25 percent or more of silicon, with aluminum usually added in lesser amounts.  Both

silicon and aluminum increase the electrical resistivity of steel, resulting in lower loss of energy

in finished motors or apparatus produced using NOES.20

C. Analysis

Petitioner argues that the Commission should define the domestic like product to be

NOES, in a manner coextensive with the scope of the subject merchandise and not define the

domestic like product to include GOES or cold‐rolled motor lamination steel (CRML) because

there are clear dividing lines between NOES and each of those products.21  Chinese

Respondents and the Taiwanese Respondent argue that the Commission should define the

domestic like product to include CRML.  They assert that CRML represents a low‐cost

alternative to NOES in a broad range of applications, that the 1.25 percent silicon level relied on

                                                                                                                                                                              

(...Continued)

includes NOES “whether or not it is coated.”  Id.  If the request to modify the scope is granted, it would

have the effect of excluding from the scope merchandise like the NOES product Nucor produces

domestically.  Commerce has not acted on Petitioner’s request as of the time the record closed in these

preliminary phase investigations.  Accordingly, we have relied on the scope definition Commerce

published in its notices of initiation.    18 CR at I‐8 – I‐9, PR at I‐6.   19 CR at I‐9, PR at I‐6‐7.

20 CR at I‐9, PR at I‐7. 21 Petitioner’s Postconference Brief at 3‐14.
8

by Petitioner to define NOES is artificial and arbitrary, and that the Commission previously

found NOES and CRML to be part of a broader continuum of cold‐rolled electrical sheet

products.22   

Based on the record in the preliminary phase of these investigations, we have defined a

single domestic like product consisting of NOES that is coextensive with the scope of these

investigations.23   

Physical Characteristics and Uses.  NOES and CRML are both produced from steel alloyed

with silicon.24  CRML is typically produced from steel having a somewhat lower content of

silicon.25  NOES, as currently defined in the scope, contains over 1.25 percent silicon and

generally contains about 2 percent silicon, depending on the grade.26  NOES derives its

magnetic properties primarily from its silicon content, with semi‐processed NOES requiring

additional annealing to achieve its potential magnetic properties after it is stamped or

otherwise formed into laminations to remove the strains caused by stamping or forming, which

are harmful to magnetic properties.27  NOES is not normally temper rolled.28  The magnetic

properties of CRML are developed as a result of heavy temper mill extension rolling at the

producing mill followed by a decarburizing anneal of the stamped laminations by the customer

to achieve its potential magnetic properties.29  Both NOES and CRML have magnetic properties

that are not oriented in a particular direction, and both NOES and CRML are used to produce

laminations that are assembled to produce magnetic cores for electrical apparatuses, although

the extent to which CRML may be used in the same applications as NOES is unclear on the

current record.30   

                                                       22 Chinese Respondents’ Postconference Brief at 1‐6; Taiwanese Respondent’s Postconference

Response to Staff Questions at 3‐9.  Although not challenging the definition of the domestic like product

in the preliminary phase investigations, Japanese Respondents argue that in any final phase

investigations, the Commission will need to examine whether the domestic like product should be

expanded to include CRML, given its prior findings regarding competitive overlap between the two

products.  Japanese Respondents’ Postconference Brief at 2‐4.

23 No party argues that GOES should be included in the domestic like product, and the record

indicates that there are clear dividing lines between NOES and GOES.  CR at I‐8 – I‐9, PR at I‐6.  

Specifically, the magnetic properties of GOES are optimized in one direction, which dictates different

end uses, and GOES is sold at a higher price.  Id.  The record also indicates that only two out of 17

responding importers reported that GOES could be used as a substitute for NOES.  CR at II‐21, PR at II‐

12.  In addition, there is nothing in the record to contradict Petitioner’s assertions that NOES and GOES

are manufactured using distinct production processes, are sold to different customers, and are

perceived by customers to be fundamentally different products.  Petitioner’s Postconference Brief at 6‐

7.

24 CR at I‐12, PR at I‐8.

25 CR at I‐12, PR at I‐8.    26 CR at I‐12, PR at I‐8.  Nucor,***.  CR at I‐11 and I‐18, n.45, PR at I‐8 % I‐12 n.45.    27 CR at I‐9, n.11, PR at I‐6 n.11.    28 CR at I‐11, PR at I‐8.    29 CR at I‐12, PR at I‐8.    30 CR at I‐8 ‐ I‐13, PR at I‐6‐8.  The parties dispute the extent of any overlap in end uses.  

According to Petitioner, CRML is almost always used in low voltage, intermittent use household devices

(Continued...)
9

Manufacturing Facilities, Production Processes and Employees.  NOES production begins

with the melting of steel in either an electric‐arc furnace or a basic oxygen furnace, with the

molten steel then being subjected to various procedures such as argon‐oxygen refining, ladle

metallurgy treatment, and vacuum degassing, all of which act to reduce undesirable

contaminants and refine the chemistry of the steel.31  Alloys including silicon and aluminum are

added.  The steel is next continuously cast into slabs that are rolled on a continuous hot strip

mill to produce hot‐rolled coils, which are then uncoiled for additional processing and

recoiled.32  In the subsequent coil processing, the coils are annealed and cleaned, rolled to

ordered thickness on a cold‐rolling mill, annealed again on a continuous annealing line using a

controlled, decarburizing atmosphere, and provided with a tightly adherent surface oxide to

prevent the laminations from sticking to one another and to increase electrical resistance.33  

Coils may be slit to ordered width.34  Fully processed NOES is usually provided with an applied

coating to further increase electrical resistance.35  Semi‐processed NOES is subsequently

stamped or otherwise formed into laminations and must again be annealed by the end user to

remove strains that are harmful to magnetic properties caused by the stamping or forming and

to achieve its potential magnetic qualities.36   

CRML is produced from steel that has been refined to a low carbon content, through

vacuum or other processing, followed by continuous casting, hot rolling, pickling, cold rolling,

annealing, and temper rolling.37  The annealing process is typically performed on coils in batch

annealing furnaces, although some producers may use continuous annealing.38   

                                                                                                                                                                              

(...Continued)

that can tolerate CRML’s relatively poor core loss, heat buildups and inefficient electricity usage, such as

hair dryers, handheld mixers, garage door openers, sump pumps, and power tools.  Petitioner’s

Postconference Brief at 9 (citing Tr. at 29 (Pfeiffer)).  In contrast, NOES is used in machines where the

efficient use of electricity is desirable, such as higher voltage, higher power or compact‐sized motors in

locomotives, aircraft, and other industrial applications, where high power and excessive heat generation

render materials with high core loss values unacceptable.  Id. at 9 (citing Tr. at 29‐30 (Pfeiffer)).  

Petitioner also claims that NOES, rather than CRML, is used in motors that operate continuously such as

industrial fans, pumps, rolling mills, and oil and gas drilling equipment, so that end users do not incur

excessive electricity costs.  Id.  On the other hand, the Chinese Respondents argue that in small and

medium motors CRML can be a cost‐effective alternative to NOES, that when properly annealed CRML

can offer core losses comparable to many grades of NOES, and that the pricing products for which the

Commission sought information overlap and compete with CRML.  Chinese Respondents’

Postconference Brief at 5‐6 (citing Tr. at 94‐95 (Weinstein)) & Response to Staff Questions at 3.    31 CR at I‐10, PR at I‐7.

32 CR at I‐10, PR at I‐7.

33 CR at I‐10, PR at I‐7.    34 CR at I‐10, PR at I‐7.    35 CR at I‐10, PR at I‐7.    36 CR at I‐9, PR at I‐6.    37 CR at I‐12, PR at I‐8.    38 CR at I‐12 – I‐13, PR at I‐8.   
10

Petitioner reported that it produces GOES and NOES, which involve distinct production

processes, but that it does not produce CRML.39  Petitioner also reported that it uses the same

melting, casting, and hot rolling equipment to produce other products in addition to NOES,

including stainless steel, GOES, and carbon steel, but its NOES coil processing equipment is used

exclusively for NOES.40  Nucor reported the production of *** using the same equipment,

machinery, and workers as are used in Nucor’s production of a CRML product that it states

meets the definition of NOES.41

Channels of Distribution.  The limited record in the preliminary phase of these

investigations suggests that both NOES and CRML are sold to end users, service centers, and

distributors, although Petitioner contends that NOES and CRML are typically sold in distinct

market segments.42   

Interchangeability.  The limited record in the preliminary phase of these investigations

suggests that there is at least some interchangeability between NOES and CRML, but the parties

disagree as to the extent and frequency of any actual overlap in end uses.  Petitioner agrees

that CRML may be used instead of NOES in some applications but contends that those uses

would be limited to low voltage, low efficiency motors where high efficiency is not required.43  

Respondents contend that CRML and NOES are highly interchangeable, but concede there are

limitations on the extent to which CRML can replace NOES in all applications.44   

Producer and Customer Perceptions.  Petitioner perceives NOES and CRML to be distinct

products, with very little overlap in end uses.  Nucor produces CRML that satisfies the

description of NOES, as defined by the scope of the product, but the limited record does not

indicate whether Nucor perceives NOES and CRML to be distinct products.45  Moreover, ***

and 17 importers reported that there were no substitutes for NOES, while only three importers

named CRML as a substitute for NOES in laminations, transformers, and motors.46   

                                                       39 CR at III‐3, PR at III‐2; Petitioner’s Postconference Brief at 7, 11 & Exhibit 1.    40 CR at I‐11, PR at I‐7.    41 CR at III‐3, PR at III‐2.  Nucor, ***.  CR at I‐11 and I‐18, n.45, PR at I‐8 & I‐12 n.45.    42 Petitioner’s Postconference Brief at 11.

43 Petitioner’s Postconference Brief at 9.    44 Tr. at 94‐95 (Weinstein) (stating that CRML is not a good substitute for NOES in variable and

high frequency motors)); Tr. at 149 (Weinstein) (stating that there is a very large percentage of the NOES

market that cannot be replaced by CRML); Chinese Respondents’ Postconference Brief, Response to

Staff Questions at 3 (stating that customers prefer NOES to CRML in several circumstances, including

integral motors that require high efficiency and consistent working conditions; motors in which the

design imposes size restrictions that prevent the use of CRML, which cannot be sufficiently laminated;

some larger size industrial motors, which need thick coating, and use NOES with extra coating; and new

electrical vehicle motor designs that need thin gauge, low core loss NOES).    45 CR at I‐11 and I‐18, n.45, PR at I‐8 and I‐12 n.45.  In its questionnaire response, Nucor ***.    46 CR at II‐20, PR at II‐12.  One importer noted that CRML could substitute for semi‐processed

NOES but not fully processed NOES, and another described CRML as a substitute for NOES up to the

highest grade for NOES, claiming that some of its purchasers stated that they switch from NOES to CRML

if NOES prices rise.  CR at II‐20, PR at II‐12.
11

Price.  The record indicates that NOES is typically sold at a higher price than CRML.47   

Conclusion.  Based on the limited record in the preliminary phase of these

investigations, we define a single domestic like product, NOES, that is coextensive with the

scope in these investigations.48  The record indicates that there are differences between NOES

and CRML in physical characteristics, production processes, and prices and that the Petitioner

along with a majority of importers report that there are no products that could serve as

substitutes for NOES.  The limited record also suggests that there is at least some degree of

interchangeability between the two products.  Although the parties have presented divergent

views regarding this issue, they appear to agree that CRML may be able to replace NOES in

some applications.  ***, for example, produces CRML that fits the physical and chemical

definition of NOES, as defined by the scope of these investigations.  We intend to examine this

like product issue further in any final phase investigations.49   

IV. Domestic Industry  

The domestic industry is defined as the domestic “producers as a whole of a domestic

like product, or those producers whose collective output of a domestic like product constitutes

a major proportion of the total domestic production of the product.”50  In defining the domestic

industry, the Commission’s general practice has been to include in the industry producers of all

domestic production of the like product, whether toll‐produced, captively consumed, or sold in

the domestic merchant market.  

The Commission received questionnaire responses from two firms, Petitioner and

Nucor, believed to represent all U.S. production of NOES, with Petitioner accounting for the

large majority of NOES production in the United States.51  There are no related party issues in

this preliminary phase of these investigations.52

Accordingly, based on our definition of the domestic like product, we define the

domestic industry as AK Steel and Nucor, the two known U.S. producers of NOES.   

                                                       47 CR at I‐11, II‐21, PR at I‐8, II‐12.    48 The domestic like product analysis begins with the scope definition, and the in‐scope product

in these investigations is limited to NOES.  Consequently, respondents’ arguments that the Commission

defined the domestic like products more broadly in prior investigations having much broader scope

definitions – i.e., all cold‐rolled steel – have little pertinence to our analysis.   49 We invite any party that plans to assert an alternative domestic like product definition in any

final phase investigation to raise the issue and indicate those products on which the Commission should

collect data in its comments on the draft questionnaires.    50 19 U.S.C. § 1677(4)(A).

51 CR at III‐1, PR at III‐1.    52 CR at III‐1, n.1 & III‐6, PR at III‐1, n.1 & III‐4.   
12

V. Cumulation53

A. In General

For purposes of evaluating the volume and price effects for a determination of

reasonable indication of material injury by reason of subject imports, section 771(7)(G)(i) of the

Tariff Act requires the Commission to cumulate subject imports from all countries as to which

petitions were filed and/or investigations self‐initiated by Commerce on the same day, if such

imports compete with each other and with the domestic like product in the U.S. market.  In

assessing whether subject imports compete with each other and with the domestic like

product, the Commission generally has considered four factors:

(1) the degree of fungibility between subject imports from different

countries and between subject imports and the domestic like product,

including consideration of specific customer requirements and other

quality related questions;

(2) the presence of sales or offers to sell in the same geographic markets of

subject imports from different countries and the domestic like product;

(3) the existence of common or similar channels of distribution for subject

imports from different countries and the domestic like product; and

(4) whether the subject imports are simultaneously present in the market.54

While no single factor is necessarily determinative, and the list of factors is not

exclusive, these factors are intended to provide the Commission with a framework for

                                                       53 Pursuant to Section 771(24) of the Tariff Act, imports from a subject country of merchandise

corresponding to a domestic like product that account for less than 3 percent of all such merchandise

imported into the United States during the most recent 12 months for which data are available

preceding the filing of the petition shall be deemed negligible.  19 U.S.C. §§ 1671b(a), 1673b(a),

1677(24)(A)(i), 1677(24)(B); see also 15 C.F.R. § 2013.1 (developing countries for purposes of 19 U.S.C. §

1677(36)).  Negligibility is not an issue in these investigations.  The data available, based on official

Commerce statistics, indicate that subject imports from each subject country exceed the requisite 3

percent statutory negligibility threshold.  From August 2012 to July 2013, the most recent 12‐month

period prior to the filing of the petitions for which data are available, U.S. imports from China accounted

for 22.4 percent of the total imports of NOES by quantity, U.S. imports from Germany accounted for

11.8 percent of the total imports of NOES by quantity, U.S. imports from Japan accounted for 22.2

percent of the total imports of NOES by quantity, U.S. imports from Korea accounted for 5.6 percent of

the total imports of NOES by quantity, U.S. imports from Sweden accounted for 11.6 percent of the total

imports of NOES by quantity, and U.S. imports from Taiwan accounted for 20.3 percent of the total

imports of NOES by quantity.  CR at IV‐6 – IV‐7, PR at IV‐5 & CR/PR at Table IV‐4.

54 See Certain Cast‐Iron Pipe Fittings from Brazil, the Republic of Korea, and Taiwan, Inv. Nos.

731‐TA‐278‐80 (Final), USITC Pub. 1845 (May 1986), aff’d, Fundicao Tupy, S.A. v. United States, 678 F.

Supp. 898 (Ct. Int’l Trade), aff’d, 859 F.2d 915 (Fed. Cir. 1988).
13

determining whether the subject imports compete with each other and with the domestic like

product.55  Only a “reasonable overlap” of competition is required.56

B. Analysis

Petitioner argues that, because the relevant criteria for cumulation are satisfied, the

Commission should cumulate subject imports from China, Germany, Japan, Korea, Sweden, and

Taiwan.57  Swedish Respondents argue that the Commission should not cumulate subject

imports from Sweden with imports from the other subject countries because of differences in

the form of the product sold from Sweden, channels of distribution, and non‐price factors,

which it contends are of paramount importance to its customers.  They also contend that they

serve a niche market and a limited number of long‐time customers in discrete geographic

locations and consequently do not participate in the larger market for NOES.58   

In these investigations, the threshold criterion for cumulation is satisfied because

Petitioner filed the antidumping duty petitions with respect to subject countries and the

countervailing duty petitions with respect to China, Korea, and Taiwan on the same day,

September 30, 2013. 59  We thus examine whether there is a reasonable overlap of competition

between subject imports from China, Germany, Japan, Korea, Sweden, and Taiwan and

between subject imports from each source and the domestic like product.   

Fungibility.  The record in the preliminary phase of these investigations indicates that

NOES is at least moderately fungible, regardless of source.60  Both U.S. producers described

NOES from all sources as *** interchangeable, while most responding importers reported that

NOES from the various sources was “frequently” or “sometimes” interchangeable.61  When

asked whether differences other than price are ever significant to purchasers choosing between

the domestic like product and subject imports or among subject imports, both U.S. producers

reported that differences other than price are *** significant, while a large majority of

importers indicated that differences other than price were at least “sometimes” significant.62   

Although Swedish Respondents contend that subject imports from Sweden are not

fungible with the domestic like product or subject imports from other subject countries, the

                                                       55 See, e.g., Wieland Werke, AG v. United States, 718 F. Supp. 50 (Ct. Int’l Trade 1989).

56 The Statement of Administrative Action (SAA) to the Uruguay Round Agreements Act (URAA),

expressly states that “the new section will not affect current Commission practice under which the

statutory requirement is satisfied if there is a reasonable overlap of competition.”  H.R. Rep. No. 103‐

316, Vol. I at 848 (1994) (citing Fundicao Tupy, 678 F. Supp. at 902); see Goss Graphic Sys., Inc. v. United

States, 33 F. Supp. 2d 1082, 1087 (Ct. Int’l Trade 1998) (“cumulation does not require two products to be

highly fungible”); Wieland Werke, AG, 718 F. Supp. at 52 (“Completely overlapping markets are not

required.”). 57 Petitioner’s Postconference Brief at 15‐19.    58 Swedish Respondents’ Postconference Brief at 4‐12.   59 None of the statutory exceptions to cumulation applies.

60 CR at II‐22, PR at II‐13.    61 CR at II‐24 – II‐25, PR at II‐14 & CR/PR at Table II‐4.    62 CR/PR at Table II‐5.   
14

record indicates that market participants’ perceptions of the interchangeability of subject

imports from Sweden with the domestic like product and imports from other subject countries

were not appreciably different from their perceptions of the interchangeability of imports from

other countries.63  Furthermore, with respect to the assertion that imports from Sweden are

not fungible with imports from other sources because imports from Sweden are sold in slit form

rather than wide coils, the record indicates that imports from Sweden consisted of both wide

coils and slit coils.64   

Channels of Distribution.  The limited record in these preliminary investigations indicates

some overlap in the channels of distribution.  U.S. producers and importers of NOES from ***

sold ***, while importers of NOES from *** reported selling only to end users. 65  Importers of

NOES from *** sold mainly to distributors, but also sold to end users in each year and each

interim period of the period of investigation (POI), with appreciable shares of import shipments

being directed to end users in 2010 and interim 2013.66   

Geographic Overlap.  The record indicates an overlap in sales of the domestic like

product and sales of the subject imports from all sources in the same geographic markets.  U.S.

producers reported selling NOES to all six regions in the contiguous United States, and all

importers of NOES from each of the subject countries, except for Sweden and Taiwan, also

reported selling NOES to all six regions of the contiguous United States.67  Importers of subject

NOES from Taiwan reported selling to five of the six specified regions, while importers of

subject NOES from Sweden reported selling to four of the six specified regions.68   

Simultaneous Presence in Market.  Official import statistics indicate that imports of

NOES from Germany, Japan, and Sweden entered the United States every month during the POI

and that imports of NOES from China and Taiwan entered in every month but one, while

imports of NOES from Korea entered the United States in 36 out of 42 months.69

Conclusion.  Although Swedish Respondents argue that subject imports from Sweden do

not compete with the domestic like product and subject imports from other sources, the

record, as discussed above, indicates a reasonable overlap of competition between subject

imports from Sweden and the domestic like product and between subject imports from Sweden

and other subject imports.  The record in the preliminary phase of these investigations does not

indicate a lack of fungibility between subject imports from Sweden and imports from other

subject countries and the domestic like product.  As previously discussed, subject imports from

                                                       63 CR/PR at Table II‐4.

64 CR/PR at Tables V‐3 – V‐10 (showing pricing data on imports of NOES from Sweden for each of

the eight pricing products, which represent NOES sold in coils).    65 CR at II‐2, PR at II‐2 & CR/PR at Table II‐1.    66 CR/PR at Table II‐1.  Specifically, importers of NOES from *** reported that *** percent of

shipments were to end users in 2010, *** percent of shipments were to end users in 2011, *** percent

of shipments were to end users in 2012, and *** percent of shipments were to end users from January

to June 2013.  Id.  The record further indicates that one importer sold subject imports from Taiwan and

imports from three other subject countries.  CR at V‐12, PR at V‐7 & CR/PR at Table V‐3, note.

67 CR/PR at Table II‐2.    68 CR/PR at Table II‐2.    69 CR at IV‐8 – IV‐9, PR at IV‐6.   
15

Sweden do not appear to be a distinct product, and market participants’ perceptions of the

interchangeability of subject imports from Sweden paralleled those for other subject sources.70  

The record further indicates geographic overlap and simultaneous presence.  While all subject

imports from Sweden are sold to end users, the domestic industry and all subject sources

except Taiwan sell heavily to that channel, and subject imports from Taiwan have had sufficient

presence in that channel to constitute a reasonable overlap.   

Consequently, the record indicates a reasonable overlap of competition among subject

imports from China, Germany, Japan, Korea, Sweden, and Taiwan and between subject imports

from each source and the domestic like product.  Because the antidumping and countervailing

duty petitions were filed on the same day, and we find that there is a reasonable overlap of

competition between and among subject imports and the domestic like product, we cumulate

subject imports from China, Germany, Japan, Korea, Sweden, and Taiwan for our analysis of

whether there is a reasonable indication of material injury by reason of subject imports.

VI. Reasonable Indication of Material Injury by Reason of Subject Imports  

A. Legal Standard

In the preliminary phase of antidumping and countervailing duty investigations, the

Commission determines whether there is a reasonable indication that an industry in the United

States is materially injured or threatened with material injury by reason of the imports under

investigation.71  In making this determination, the Commission must consider the volume of

subject imports, their effect on prices for the domestic like product, and their impact on

domestic producers of the domestic like product, but only in the context of U.S. production

operations.72  The statute defines “material injury” as “harm which is not inconsequential,

immaterial, or unimportant.”73  In assessing whether there is a reasonable indication that the

domestic industry is materially injured by reason of subject imports, we consider all relevant

economic factors that bear on the state of the industry in the United States.74  No single factor

is dispositive, and all relevant factors are considered “within the context of the business cycle

and conditions of competition that are distinctive to the affected industry.”75

Although the statute requires the Commission to determine whether there is a

reasonable indication that the domestic industry is “materially injured by reason of” unfairly

traded imports,76 it does not define the phrase “by reason of,” indicating that this aspect of the

                                                       70 CR/PR at Table II‐4.    71 19 U.S.C. §§ 1671b(a), 1673b(a).

72 19 U.S.C. § 1677(7)(B).  The Commission “may consider such other economic factors as are

relevant to the determination” but shall “identify each {such} factor ... {a}nd explain in full its relevance

to the determination.”  19 U.S.C. § 1677(7)(B).

73 19 U.S.C. § 1677(7)(A). 74 19 U.S.C. § 1677(7)(C)(iii). 75 19 U.S.C. § 1677(7)(C)(iii).

76 19 U.S.C. §§ 1671b(a), 1673b(a).
16

injury analysis is left to the Commission’s reasonable exercise of its discretion.77  In identifying a

causal link, if any, between subject imports and material injury to the domestic industry, the

Commission examines the facts of record that relate to the significance of the volume and price

effects of the subject imports and any impact of those imports on the condition of the domestic

industry.  This evaluation under the “by reason of” standard must ensure that subject imports

are more than a minimal or tangential cause of injury and that there is a sufficient causal, not

merely a temporal, nexus between subject imports and material injury.78

In many investigations, there are other economic factors at work, some or all of which

may also be having adverse effects on the domestic industry.  Such economic factors might

include nonsubject imports; changes in technology, demand, or consumer tastes; competition

among domestic producers; or management decisions by domestic producers.  The legislative

history explains that the Commission must examine factors other than subject imports to

ensure that it is not attributing injury from other factors to the subject imports, thereby

inflating an otherwise tangential cause of injury into one that satisfies the statutory material

injury threshold.79  In performing its examination, however, the Commission need not isolate

the injury caused by other factors from injury caused by unfairly traded imports.80  Nor does the

                                                       77 Angus Chemical Co. v. United States, 140 F.3d 1478, 1484‐85 (Fed. Cir. 1998) (“{T}he statute

does not ‘compel the commissioners’ to employ {a particular methodology}.”), aff’g 944 F. Supp. 943,

951 (Ct. Int’l Trade 1996).

78 The Federal Circuit, in addressing the causation standard of the statute, has observed that

“{a}s long as its effects are not merely incidental, tangential, or trivial, the foreign product sold at less

than fair value meets the causation requirement.”  Nippon Steel Corp. v. USITC, 345 F.3d 1379, 1384

(Fed. Cir. 2003).  This was re‐affirmed in Mittal Steel Point Lisas Ltd. v. United States, 542 F.3d 867, 873

(Fed. Cir. 2008), in which the Federal Circuit, quoting Gerald Metals, Inc. v. United States, 132 F.3d 716,

722 (Fed. Cir. 1997), stated that “this court requires evidence in the record ‘to show that the harm

occurred “by reason of” the LTFV imports, not by reason of a minimal or tangential contribution to

material harm caused by LTFV goods.’”  See also Nippon Steel Corp. v. United States, 458 F.3d 1345,

1357 (Fed. Cir. 2006); Taiwan Semiconductor Industry Ass’n v. USITC, 266 F.3d 1339, 1345 (Fed. Cir.

2001).

79 SAA, H.R. Rep. 103‐316, Vol. I at 851‐52 (1994) (“{T}he Commission must examine other

factors to ensure that it is not attributing injury from other sources to the subject imports.”); S. Rep. 96‐

249 at 75 (1979) (the Commission “will consider information which indicates that harm is caused by

factors other than less‐than‐fair‐value imports.”); H.R. Rep. 96‐317 at 47 (1979) (“in examining the

overall injury being experienced by a domestic industry, the ITC will take into account evidence

presented to it which demonstrates that the harm attributed by the petitioner to the subsidized or

dumped imports is attributable to such other factors;” those factors include “the volume and prices of

nonsubsidized imports or imports sold at fair value, contraction in demand or changes in patterns of

consumption, trade restrictive practices of and competition between the foreign and domestic

producers, developments in technology and the export performance and productivity of the domestic

industry”); accord Mittal Steel, 542 F.3d at 877.

80 SAA at 851‐52 (“{T}he Commission need not isolate the injury caused by other factors from

injury caused by unfair imports.”); Taiwan Semiconductor Industry Ass’n , 266 F.3d at 1345. (“{T}he

Commission need not isolate the injury caused by other factors from injury caused by unfair imports ... .  

Rather, the Commission must examine other factors to ensure that it is not attributing injury from other

(Continued...)
17

“by reason of” standard require that unfairly traded imports be the “principal” cause of injury

or contemplate that injury from unfairly traded imports be weighed against other factors, such

as nonsubject imports, which may be contributing to overall injury to an industry.81  It is clear

that the existence of injury caused by other factors does not compel a negative

determination.82

Assessment of whether material injury to the domestic industry is “by reason of” subject

imports “does not require the Commission to address the causation issue in any particular way”

as long as “the injury to the domestic industry can reasonably be attributed to the subject

imports” and the Commission “ensure{s} that it is not attributing injury from other sources to

the subject imports.”83 84  Indeed, the Federal Circuit has examined and affirmed various

Commission methodologies and has disavowed “rigid adherence to a specific formula.”85

                                                                                                                                                                              

(...Continued)

sources to the subject imports.” (emphasis in original)); Asociacion de Productores de Salmon y Trucha

de Chile AG v. United States, 180 F. Supp. 2d 1360, 1375 (Ct. Int’l Trade 2002) (“{t}he Commission is not

required to isolate the effects of subject imports from other factors contributing to injury” or make

“bright‐line distinctions” between the effects of subject imports and other causes.); see also Softwood

Lumber from Canada, Inv. Nos. 701‐TA‐414 and 731‐TA‐928 (Remand), USITC Pub. 3658 at 100‐01 (Dec.

2003) (Commission recognized that “{i}f an alleged other factor is found not to have or threaten to have

injurious effects to the domestic industry, i.e., it is not an ‘other causal factor,’ then there is nothing to

further examine regarding attribution to injury”), citing Gerald Metals, 132 F.3d at 722 (the statute

“does not suggest that an importer of LTFV goods can escape countervailing duties by finding some

tangential or minor cause unrelated to the LTFV goods that contributed to the harmful effects on

domestic market prices.”).

81 S. Rep. 96‐249 at 74‐75; H.R. Rep. 96‐317 at 47.

82 See Nippon, 345 F.3d at 1381 (“an affirmative material‐injury determination under the statute

requires no more than a substantial‐factor showing.  That is, the ‘dumping’ need not be the sole or

principal cause of injury.”).

83 Mittal Steel, 542 F.3d at 877‐78; see also id. at 873 (“While the Commission may not enter an

affirmative determination unless it finds that a domestic industry is materially injured ‘by reason of’

subject imports, the Commission is not required to follow a single methodology for making that

determination ... {and has} broad discretion with respect to its choice of methodology.”) citing United

States Steel Group v. United States, 96 F.3d 1352, 1362 (Fed. Cir. 1996) and S. Rep. 96‐249 at 75.   84 Commissioner Pinkert does not join this paragraph or the following three paragraphs.  He

points out that the Federal Circuit, in Bratsk, 444 F.3d 1369, and Mittal Steel, held that the Commission

is required, in certain circumstances when considering present material injury, to undertake a particular

kind of analysis of non‐subject imports, albeit without reliance upon presumptions or rigid formulas.  

Mittal Steel explains as follows:

What Bratsk held is that “where commodity products are at issue and fairly traded, price

competitive, non‐subject imports are in the market,” the Commission would not fulfill

its obligation to consider an important aspect of the problem if it failed to consider

whether non‐subject or non‐LTFV imports would have replaced LTFV subject imports

during the period of investigation without a continuing benefit to the domestic industry.  

444 F.3d at 1369.  Under those circumstances, Bratsk requires the Commission to

consider whether replacement of the LTFV subject imports might have occurred during

(Continued...)
18

The Federal Circuit’s decisions in Gerald Metals, Bratsk, and Mittal Steel all involved

cases in which the relevant “other factor” was the presence in the market of significant

volumes of price‐competitive nonsubject imports.  The Commission interpreted the Federal

Circuit’s guidance in Bratsk as requiring it to apply a particular additional methodology

following its finding of material injury in cases involving commodity products and a significant

market presence of price‐competitive nonsubject imports.86  The additional

“replacement/benefit” test looked at whether nonsubject imports might have replaced subject

imports without any benefit to the U.S. industry.  The Commission applied that specific

additional test in subsequent cases, including the Carbon and Certain Alloy Steel Wire Rod from

Trinidad and Tobago determination that underlies the Mittal Steel litigation.

Mittal Steel clarifies that the Commission’s interpretation of Bratsk was too rigid and

makes clear that the Federal Circuit does not require the Commission to apply an additional

test nor any one specific methodology; instead, the court requires the Commission to have

“evidence in the record ‘to show that the harm occurred ‘by reason of’ the LTFV imports,’” and

requires that the Commission not attribute injury from nonsubject imports or other factors to

subject imports.87  Accordingly, we do not consider ourselves required to apply the

replacement/benefit test that was included in Commission opinions subsequent to Bratsk.

The progression of Gerald Metals, Bratsk, and Mittal Steel clarifies that, in cases

involving commodity products where price‐competitive nonsubject imports are a significant

factor in the U.S. market, the Court will require the Commission to give full consideration, with

adequate explanation, to non‐attribution issues when it performs its causation analysis.88

The question of whether the material injury threshold for subject imports is satisfied

notwithstanding any injury from other factors is factual, subject to review under the substantial

                                                                                                                                                                              

(...Continued)

the period of investigation, and it requires the Commission to provide an explanation of

its conclusion with respect to that factor.   

542 F.3d at 878.    85 Nucor Corp. v. United States, 414 F.3d 1331, 1336, 1341 (Fed. Cir. 2005); see also Mittal Steel,

542 F.3d at 879 (“Bratsk did not read into the antidumping statute a Procrustean formula for

determining whether a domestic injury was ‘by reason’ of subject imports.”).

86 Mittal Steel, 542 F.3d at 875‐79.

87 Mittal Steel, 542 F.3d at 873 (quoting from Gerald Metals, 132 F.3d at 722), 875‐79 & n.2

(recognizing the Commission’s alternative interpretation of Bratsk as a reminder to conduct a non‐

attribution analysis).

88 To that end, after the Federal Circuit issued its decision in Bratsk, the Commission began to

present published information or send out information requests in final phase investigations to

producers in nonsubject countries that accounted for substantial shares of U.S. imports of subject

merchandise (if, in fact, there were large nonsubject import suppliers).  In order to provide a more

complete record for the Commission’s causation analysis, these requests typically seek information on

capacity, production, and shipments of the product under investigation in the major source countries

that export to the United States.  The Commission plans to continue utilizing published or requested

information in final phase investigations in which there are substantial levels of nonsubject imports.
19

evidence standard.89  Congress has delegated this factual finding to the Commission because of

the agency’s institutional expertise in resolving injury issues.90

B. Conditions of Competition and the Business Cycle

The following conditions of competition inform our analysis of whether there is a

reasonable indication of material injury by reason of subject imports.

1. Demand Conditions

U.S. demand for NOES depends on demand for U.S.‐produced downstream products,

such as electric motors, low‐voltage transformers, and generators.91  NOES accounts for a

highly variable share of the cost of end‐use products.  NOES is estimated to account for 20‐84

percent of the cost of an electrical motor, 80 percent of the cost of a transformer, and 20

percent of the cost of a generator.92  U.S. purchasers of NOES are end users, distributors, and

service centers that perform laminating or stamping prior to selling the NOES products to the

same end users.93   

Market participants’ perceptions of demand trends were mixed.  *** indicated that

demand has decreased since January 1, 2010, due to lower demand from the mining,

locomotive, and industrial segments, but that NOES would resume a longer‐term trend of

increased growth in these segments after the next 12 to 18 months.94  *** reported that

demand for NOES has fluctuated since 2010 with no clear trend.95  Importers were divided

regarding changes in U.S. demand for NOES during the POI.96   

                                                       89 We provide in our respective discussions of volume, price effects, and impact a full analysis of

other factors alleged to have caused any material injury experienced by the domestic industry.

90 Mittal Steel, 542 F.3d at 873; Nippon Steel Corp., 458 F.3d at 1350, citing U.S. Steel Group, 96

F.3d at 1357; S. Rep. 96‐249 at 75 (“The determination of the ITC with respect to causation is ... complex

and difficult, and is a matter for the judgment of the ITC.”).    91 CR at II‐16, PR at II‐10.  Petitioner reported that new U.S. Department of Energy efficiency

requirements for small transformers will go into effect in January 2016 and that, although that segment

of the market does not account for a major portion of its business, those requirements will effectively

eliminate NOES from that segment.  CR at II‐16, n.22, PR at II‐10, n.22.    92 CR at II‐16 – II‐17, PR at II‐10.    93 CR at II‐2 & II‐23, PR at II‐1 & II‐13; CR/PR at Table II‐1; Tr. at 53 (Pfeiffer), 63 (Konstantinidis).    94 CR at II‐19, PR at II‐11.    95 CR at II‐19, PR at II‐11.

96 CR/PR at Table II‐3.  The large majority of importers indicated that U.S. demand for NOES

increased, fluctuated, or remained unchanged.  Importers that reported increased U.S. demand for

NOES attributed the increase to various reasons, including recovery from the recession in 2009 and the

new production of electric vehicles.  CR at II‐19, PR at II‐11.  Importers reporting decreased demand

attributed it to weakness in the broader economy, producers of downstream products moving

production to Asia and Mexico, and lower natural gas prices, which led to decreased demand for non‐

gas electrical energy applications and made annealing CRML more cost effective.  CR at II‐19 – II‐20, PR

at II‐11 – II‐12.
20

As measured by apparent U.S. consumption, demand increased *** percent from 2010

to 2011, before decreasing *** percent between 2011 and 2012.97  Overall, it increased by ***

percent from 2010 to 2012.98   

Several respondents argued that demand for NOES suffered due to competitive

pressure from domestically produced CRML, which they state has competed with NOES since

well before 2010.99  As discussed above, only three importers named CRML as a substitute for

NOES in laminations, transformers, and motors, while *** and 17 importers reported that there

were no substitutes for NOES.100  As also discussed above, the limited record in the preliminary

phase of these investigations suggests at least some interchangeability between NOES and

CRML, although the parties have presented disparate views about the degree and extent of

overlap in end uses.  In any final phase of these investigations, we intend to examine whether

and to what extent the availability of CRML affects U.S. demand for NOES.   

2. Supply Conditions

Sources of supply of NOES to the U.S. market during the POI included the domestic

industry, subject imports, and imports from nonsubject sources.101

Petitioner AK Steel and Nucor are the U.S. manufacturers of NOES.102  AK Steel

accounted for *** percent of total domestic production in 2012, while Nucor, which produced

CRML that meets the physical and chemical description of NOES, accounted for *** percent.103  

Both firms reported that most of their overall U.S. production consisted of products other than

NOES.104   

                                                       97 CR at II‐18 & IV‐9, PR at II‐11 & IV‐6.  Apparent U.S. consumption of NOES increased from ***

short tons in 2010 to *** short tons in 2011, then declined to *** short tons in 2012; apparent U.S.

consumption of NOES was *** short tons in January‐June 2012 (“interim 2012”) and *** short tons in

interim 2013.  CR/PR at Table IV‐6.   Apparent U.S. consumption was *** percent lower in interim 2013

than in interim 2012.  CR at II‐18 & IV‐9, PR at II‐11 & IV‐6.

98 CR/PR at Table C‐1.

99 E.g., Japanese Respondents’ Postconference Brief at 5‐21; Chinese Respondent’s

Postconference Brief at 1‐6; Taiwanese Respondent’s Postconference Response to Staff Questions at 2‐

9.  The Taiwanese Respondent claims that CRML began seriously to compete with NOES more than 15

years ago and that competition has accelerated in recent years with the development of more advanced

CRML products.  Taiwanese Respondent’s Postconference Response to Staff Questions at 2.  Chinese

Respondents similarly describe CRML as a mature product.  Chinese Respondents’ Postconference Brief,

Responses to Staff Questions at 3.

100 CR at II‐20, PR at II‐12.    101 CR/PR at Table IV‐5.    102 CR at III‐1 – III‐2, PR at III‐1.

103 CR/PR at Table III‐1.    104 CR at III‐3, n.5, PR at III‐2, n.5.  Specifically, AK Steel reported that in its facilities where it

produces both GOES and NOES,  *** percent of its production in 2012 consisted of GOES, while the

remaining *** percent consisted of NOES.  Id. Nucor reported that *** percent of its overall production

consisted of ***, with the remaining *** percent consisting of NOES.  Id.   
21

For most of the POI, the domestic industry was the second largest source of NOES,

supplying *** of the U.S. market in 2011 and 2012, but supplying *** of the U.S. market in

2010.  The domestic industry’s share of apparent consumption, by quantity, was *** percent in

2010, *** percent in 2011, and *** percent in 2012.105

Cumulated subject imports were the largest suppliers of NOES to the U.S. market in

2011 and 2012.  The market share of cumulated subject imports was, by quantity, *** percent

in 2010, *** percent in 2011, and *** percent in 2012.106

Nonsubject imports had a very small presence in the U.S. market throughout the POI.  

Nonsubject imports’ market share, by quantity, was *** percent in 2010, *** percent in 2011,

and *** percent in 2012.107

3. Substitutability and Other Conditions

Based on the record in the preliminary phase of these investigations, we find that there

is a moderate‐to‐high degree of substitutability among domestically produced NOES and NOES

from all subject sources.  As explained above, both U.S. producers described NOES from all

sources as *** interchangeable, while most responding importers reported that NOES from the

various sources was “frequently” or “sometimes” interchangeable.108   

We also find that price is at least a moderately important factor in purchasing decisions.  

As described above, when asked whether differences other than price are ever significant to

purchasers choosing between the domestic like product and subject imports or among subject

imports, both U.S. producers reported that differences other than price are *** significant.109  

Responses from importers were mixed, but an appreciable percentage of importers reported

                                                       105 CR/PR at Table IV‐6.  The domestic industry’s share of apparent consumption, by quantity,

was *** percent in interim 2012 and *** percent in interim 2013.  Id.

106 CR/PR at Table IV‐6.  The market share of cumulated subject imports was, by quantity, ***

percent in interim 2012 and *** percent in interim 2013.  Id.

107 CR/PR at Table IV‐6.  Nonsubject imports’ market share, by quantity, was *** percent in

interim 2012 and *** percent in interim 2013.  Id.

108 CR at II‐24–II‐25, PR at II‐14 & CR/PR at Table II‐4.  Petitioner asserts that most NOES sold in

the U.S. market is warranted to meet ASTM specifications and, therefore, is highly interchangeable.  CR

at II‐24, PR at II‐14.  In contrast, in their responses to the Commission’s questionnaires, several

importers claimed that they imported products from subject sources that the domestic industry did not

produce.  CR at II‐26, PR at II‐14.  For example, certain importers claimed that certain grades of NOES

were not available, or were only available in limited quantity, from the domestic industry.  Id.  Some

importers claimed that customers requested NOES from specific mills.  Id.  *** stated that it exports a

specially‐designed NOES product developed to meet the specifications of a dedicated customer.  Id.; see

also CDW’s Postconference Brief at 2‐3.  An importer likewise stated that some of its NOES products

were produced to particular specifications developed by a specific producer of a certain type of

electrical vehicle motor.  Id.  *** stated that its *** is DFARS compliant and designed for use by the

customer without further processing.  Id.

109 CR/PR at Table II‐5.  A large majority of importers indicated that differences other than price

were at least “sometimes” significant.  Id.   
22

that factors other than price were only *** or *** significant.110  Several purchasers indicated

that price was a pertinent consideration in their purchasing decisions.111

Several parties reported qualification processes for supplying NOES, but disputed the

extent to which these processes act as a barrier to supplying NOES to a particular customer.  

Petitioner contends that, due to the limited number of NOES suppliers, the qualification process

is relatively easy, generally resulting in approval within a matter of weeks following a trial

shipment.112  Several respondents, on the other hand, describe a longer and more involved

process.113  Other respondents describe long‐standing customer relationships, some of which

involve producing NOES to unique specifications, co‐developed by the NOES producer and its

customer.114   

Raw material inputs in the production of NOES include steel scrap, ferrosilicon, natural

gas, and electricity.115  Raw material costs represented between *** and *** percent of the

costs of goods sold (COGS) for NOES over 2010 to 2012.116  U.S. producers’ average cost of raw

materials per short ton increased from $*** in 2010 to $*** in 2011, and decreased to $*** in

2012; it was lower in interim 2013 ($***) than in interim 2012 ($***).117  ***.  ***.118   

C. Volume of Subject Imports  

Section 771(7)(C)(i) of the Tariff Act provides that the “Commission shall consider

whether the volume of imports of the merchandise, or any increase in that volume, either in

absolute terms or relative to production or consumption in the United States, is significant.”119

                                                       110 CR/PR at Table II‐5.  When asked whether differences other than price are ever significant to

purchasers choosing between the domestic like product and subject imports, approximately 37 to 60

percent of responding importers reported that non‐price factors were only *** or *** significant.  Id.  

When asked whether differences other than price are ever significant to purchasers choosing among

subject imports, generally between 30 to 80 percent of responding importers reported that non‐price

factors were only *** or *** significant.  Id. 111 CR at V‐48, PR at V‐9. 112 CR at II‐23, PR at II‐14; Tr. at 24 (Pfeiffer).    113 CR at II‐24, PR at II‐14.  Chinese Respondents claim that the qualification process to supply

NOES to customers in the United States takes one to one and a half years, and this creates a substantial

barrier for new vendors.  CR at II‐24, PR at II‐14; Chinese Respondents’ Postconference Brief, Responses

to Staff Questions at 3.  Swedish Respondents contend that the qualification processes that it undergoes

for its customers is more rigorous than Petitioner claims, ranging from three months to two years,  and

that customers do not want to expend the time and expense to qualify suppliers if there is already an

approved source.  Swedish Respondents’ Postconference Brief, Responses to Staff Questions at 31 &

exhibit 1.  ThyssenKrupp states that the qualification process takes 12 to 18 months.  ThyssenKrupp’s

Postconference Brief, Responses to Staff Questions at 2.    114 Swedish Respondents’ Postconference Brief at 3; CDW’s Postconference Brief at 2‐3.    115 CR/PR at Figure V‐1.

116 CR at V‐1, PR at V‐1.    117 CR/PR at Table VI‐2.    118 CR at V‐6, PR at V‐4.

119 19 U.S.C. § 1677(7)(C)(i).
23

Cumulated subject imports held a substantial presence in the U.S. market throughout

the POI.  Cumulated subject imports increased from 55,507 short tons in 2010 to 74,215 short

tons in 2011 and reached 76,006 short tons in 2012.120  As explained above, apparent U.S.

consumption increased overall by *** percent from 2010 to 2012.121  The volume of cumulated

subject imports rose faster, increasing by 36.9 percent during this period.122

The market share (by quantity) of cumulated subject imports increased from ***

percent in 2010 to *** percent in 2011 and *** percent in 2012.123  This gain in market share

came at the expense of the domestic industry.  The domestic industry’s market share decreased

from *** percent in 2010 to *** percent in 2011 and *** percent in 2012.124 The market share

held by nonsubject imports increased from *** percent in 2010 to *** percent in 2011, before

declining slightly to *** percent in 2012.125

Cumulated subject imports of NOES were also significant relative to domestic

production.  The ratio of cumulated subject imports to domestic production increased from ***

percent in 2010 to *** percent in 2011 and *** percent in 2012.126

For purposes of these preliminary determinations, we find that the cumulated volume

of subject imports is significant both in absolute terms and relative to consumption and

production in the United States.

D. Price Effects of the Subject Imports

Section 771(7)(C)(ii) of the Tariff Act provides that, in evaluating the price effects of

subject imports, the Commission shall consider whether –  

(I) there has been significant price underselling by the imported merchandise as

compared with the price of domestic like products of the United States, and  

(II) the effect of imports of such merchandise otherwise depresses prices to a

significant degree or prevents price increases, which otherwise would have

occurred, to a significant degree.127

                                                       120 CR/PR at Table IV‐3.  Cumulated subject imports were 41,812 short tons in interim 2012 and

26,481 short tons in interim 2013.   121 CR/PR at Table C‐1.  Apparent U.S. consumption in interim 2013 was *** percent lower than

in interim 2012.  Id. 122 CR/PR at Table C‐1.  The volume of cumulated subject imports in interim 2013 was 36.7

percent lower than in interim 2012.  Id.   123 CR/PR at Table IV‐6.  Cumulated subject imports held *** percent of U.S. market share in

interim 2012 and *** percent of market share in interim 2013.  Id.

124 CR/PR at Table IV‐6.  The domestic industry’s market share was *** percent in interim 2012

and *** percent in interim 2013.  Id.

125 CR/PR at Table IV‐6.  Nonsubject imports held *** percent of U.S. market share in interim

2012 and *** percent of market share in interim 2013.  Id.   126 CR/PR at Table IV‐7.  The ratio was *** percent in interim 2012 and *** percent in interim

2013.  Id.

127 19 U.S.C. § 1677(7)(C)(ii).
24

As discussed in section VI.B.3 above, the record in these preliminary phase

investigations indicates that there is a moderate‐to‐high degree of substitutability between

domestically produced NOES and NOES imported from subject countries and that price is at

least a moderately important factor in purchasing decisions.128

The Commission collected quarterly pricing data on eight NOES products.129  One U.S.

producer and 17 importers provided usable pricing data for sales of the requested products,

although not all firms reported pricing for all products and all quarters.130   

The pricing data show underselling by cumulated subject imports in 218 of 296 quarterly

price comparisons.131  The margins of underselling ranged from *** percent, with the average

margin being *** percent.132  Given the frequency of underselling and the magnitude of the

underselling margins, we find the price underselling to be significant for purposes of these

preliminary determinations.  

Prices for U.S.‐produced NOES generally increased from 2010 to 2011, before declining

in 2012 and interim 2013.133  Prices for four out of the eight pricing products were lower in the

second quarter of 2013 than they were at the start of the POI.134 Pricing data for the subject

imports were more varied, both in terms of price changes between the first and last quarters of

the period, and with respect to when the highest or lowest values were observed.135   

                                                       128 CR/PR at Tables II‐4 and II‐5.

129 The pricing products were as follows:  Product 1 ‐‐ M‐19, 0.45‐0.50mm thickness, fully

processed, maximum core loss 2.90W/kg (1.5t; 50 Hz), 600mm or more wide, coated; Product 2 ‐‐ M‐22,

0.45‐0.50mm thickness, fully processed, maximum core loss 3.10W/kg (1.5t; 50 Hz), 600mm or more

wide, coated; Product 3 ‐‐ M‐22, 0.60‐0.65mm thickness, fully processed, maximum core loss 2.65W/kg

(1.5t; 50 Hz), less than 600mm wide, coated; Product 4 ‐‐ M‐36, 0.45‐0.50mm thickness, fully processed,

maximum core loss 3.50W/kg (1.5t; 50 Hz), 600mm or more wide, coated; Product 5 ‐‐ M‐36, 0.60‐

0.65mm thickness, fully processed, maximum core loss 4.10W/kg (1.5t; 50 Hz), 600mm or more wide,

coated, welded; Product 6 ‐‐ M‐36, 0.45‐0.50mm thickness, fully processed, maximum core loss

3.50W/kg (1.5t; 50 Hz), less than 600mm wide, coated; Product 7 ‐‐ M‐43, 0.60‐0.65mm thickness, fully

processed, maximum core loss 4.35W/kg (1.5t; 50 Hz), 600mm or more wide, coated; and Product 8 ‐‐ 

M‐45, 0.60‐0.65mm thickness, fully processed, maximum core loss 4.80W/kg (1.5t; 50 Hz), 600mm or

more wide, coated.  CR at V‐9, PR at V‐5 – V‐6.

130 CR at V‐9, PR at V‐6.  Reported pricing products represented *** percent of U.S. shipments of

U.S.‐produced products, *** percent of shipments of subject imports from China, *** percent of

shipments of subject imports from Germany, *** percent of shipments of subject imports from Japan,

*** percent of shipments of subject imports from Korea, *** percent of shipments of subject imports

from Sweden, and *** percent of shipments of subject imports from Taiwan in 2012.  CR at V‐9‐10, PR at

V‐6.     131 CR/PR at Table V‐12.

132 CR/PR at Table V‐12.   Petitioner stated that its customers had told it that subject imports

were underselling its prices by approximately 25 percent and that it responded by lowering prices in

2013. CR at V‐46, PR at 8;Tr. at 32 (Peterson).

133 CR/PR at Tables V‐3‐V‐10.

134 CR/PR at Tables V‐3 to V‐10 (prices were lower at the end of the POI than at the start for

products one, three, five, and eight, while prices were higher for products two, four, six, and seven).

135 CR/PR at Tables V‐3 to V‐10.
25

The record in the preliminary phase of these investigations contains evidence that

subject imports prevented price increases for the domestic product, which otherwise would

have occurred, to a significant degree.  Over the POI, the domestic industry’s ratio of COGS to

net sales was high and increased irregularly from *** percent in 2010 to *** percent in 2012; it

was *** percent in interim 2012 and *** percent in interim 2013.136  These data support a

finding that the domestic producers were unable to raise their prices sufficiently to cover rising

costs in light of significant competition from the lower priced subject imports.   

There is further support for our finding of price suppression in the record information

on lost sales and lost revenue experienced by the domestic industry.  Petitioner made *** lost

sales allegations totaling $*** and involving *** short tons of NOES and *** lost revenue

allegations totaling $*** and involving *** short tons of NOES.137  *** purchaser explicitly

agreed with *** lost sales allegations involving at least $***, and *** purchasers agreed with

*** of the lost revenue allegations totaling at least $***.138  There were also numerous

allegations that purchasers did not formally confirm, but nevertheless suggest that the

domestic industry lost sales due to low‐priced subject imports.139  

For purposes of these preliminary determinations, we find the price underselling by the

subject imports to be significant and also find evidence that the substantial volume of subject

imports has prevented price increases, which otherwise would have occurred, to a significant

degree.

E. Impact of the Subject Imports140

Section 771(7)(C)(iii) of the Tariff Act provides that the Commission, in examining the

impact of the subject imports on the domestic industry, “shall evaluate all relevant economic

factors which have a bearing on the state of the industry.”  These factors include output, sales,

inventories, capacity utilization, market share, employment, wages, productivity, profits, cash

flow, return on investment, ability to raise capital, research and development, and factors

affecting domestic prices.  No single factor is dispositive and all relevant factors are considered

                                                       136 CR/PR at Table C‐1.  Unit COGS rose from $*** in 2010 to $*** in 2011, and $*** in 2012; it

was $*** in interim 2012 and $*** in interim 2013.136    137 CR at V‐47, PR at V‐9.

138 CR/PR at Tables V‐13, V‐14.

139 Although purchaser ***.  CR/PR at Table V‐14.   ***.   CR/PR at Table V‐14.  We intend to

seek more information for a number of the lost sale and lost revenue allegations in any final phase of

these investigations, and we encourage the market participants to submit documentation of their

transactions that support their claims.    140 In its notice initiating the antidumping duty investigations, Commerce estimated antidumping

duty margins of 244.54 percent to 407.52 for imports of NOES from China, 73.74 percent to 98.84

percent for imports of NOES from Germany, 88.63 percent to 204.79 percent for imports of NOES from

Japan, 16.00 percent to 68.82 percent for imports of NOES from Korea, 62.17 percent to 126.72 percent

for imports of NOES from Sweden, and 52.23 percent to 101.51 percent for imports of NOES from

Taiwan.   CR at I‐6, PR at I‐4‐5.
26

“within the context of the business cycle and conditions of competition that are distinctive to

the affected industry.”

The record of the preliminary phase of these investigations indicates that the domestic

industry’s performance declined over the POI for virtually all factors.  After increasing from ***

short tons in 2010 to *** short tons in 2011, the domestic industry’s production fell to ***

short tons in 2012, a *** percent decline from 2010 to 2012, and was lower in interim 2013

(*** short tons) than in interim 2012 (*** short tons).141 Capacity was a constant *** short tons

from 2010 to 2012 and was *** short tons during the interim periods.  Accordingly, the

domestic industry’s rate of capacity utilization increased from *** percent in 2010 to ***

percent in 2011, but then fell to *** percent in 2012, an overall decline of *** percentage

points, and was lower (*** percent) in interim 2013 than in interim 2012 (*** percent).142

From 2010 to 2012, as apparent U.S. consumption of NOES increased by *** percent,

the domestic industry’s U.S. shipments of NOES increased by only *** percent from *** short

tons in 2010 to *** short tons in 2012.143  The domestic industry’s share of apparent U.S.

consumption steadily decreased from *** percent in 2010 to *** percent in 2011 and  ***

percent in 2012, an overall decline of *** percentage points, although it was higher in interim

2013 (*** percent) than in interim 2012 (*** percent).144  

The number of production workers, hours worked, and wages paid increased from 2010

to 2011, before declining in 2012.  These indicators were lower in interim 2013 than in interim

2012.145    

The large majority of financial indicators showed poor or declining overall trends over

the period.  Sales revenues increased from $*** in 2010 to $*** in 2011, before declining to

$*** in 2012, and were lower in interim 2013 $(***) than in interim 2012 $(***).146  The

domestic industry’s operating income improved slightly from a *** in 2010 to a *** in 2011,

before falling to a ***, and was lower in interim 2013 (***) than in interim 2012 (***).147  The

domestic industry’s operating margins followed a similar pattern of improving from *** percent

                                                       141 CR/PR at Tables III‐2 & C‐1.

142 CR/PR at Tables III‐2 & C‐1.

143 CR/PR at Tables III‐4 & C‐1.  Apparent U.S. consumption was *** percent lower in interim

2013 than in interim 2012, and U.S. producers’ U.S. shipments of NOES were *** percent lower during

this period.   U.S. producers’ end‐of‐period inventories declined from *** short tons in 2010 to *** short

tons in 2011, and then to *** short tons in 2012.  Inventories were *** short tons in interim 2012 and

*** short tons in interim 2013.  CR/PR at Table III‐5 & C‐1. 144 CR/PR at Tables IV‐6 & C‐1.

145 CR/PR at Table III‐8.  The number of production workers was *** in 2010, *** in 2011, *** in

2012, *** in interim 2012, and *** in interim 2013.  The total hours worked were *** in 2010, *** in

2011, *** in 2012, *** in interim 2012, and *** in interim 2013.  Wages paid were $*** in 2010, $*** in

2011, $*** in 2012, $*** in interim 2012, and $*** in interim 2013.  Worker productivity was *** short

tons (per 1,000 hours) in 2010, *** short tons in 2011, *** short tons 2012, *** short tons in interim

2012, and *** short tons in interim 2013.  CR/PR at Table III‐6.    146 CR/PR at Table VI‐1.   147 CR/PR at Table VI‐1.  
27

in 2010 to *** percent in 2011, before declining to *** percent in 2012, and was lower in

interim 2013 (*** percent) than in interim 2012 (*** percent).148    

As discussed above, we have found the volume of cumulated subject imports and the

market share of those imports to have been significant over the POI, that these imports

significantly undersold the domestic like product, and that there is evidence of significant price

suppression by the subject imports.  The domestic industry’s operating income and market

share declined from 2010 to 2012, despite an increase in demand and unused capacity over

that period.149  Virtually all of the domestic industry’s economic indicators were lower in

interim 2013 than in interim 2012.  Consequently, we find, for purposes of the preliminary

phase of these investigations, that there is a reasonable indication that the significant volume

of low‐priced subject imports had a significant impact on the domestic industry.150

We have also considered the role of other factors in our assessment of the impact of the

subject imports.  As discussed above, nonsubject imports did not have a significant presence in

the U.S. market throughout the POI.151  Accordingly, we do not find the relatively small volume

of nonsubject imports to be a cause of the difficulties experienced by the domestic industry.152

Respondent parties argue that the domestic industry’s condition is caused by factors

other than subject imports, including volume and price pressures due to competition between

NOES and domestically produced CRML, the decline in demand for NOES in the U.S. market

since July 2012, and the limited number of domestic NOES suppliers.153  There is limited

                                                       148 CR/PR at Table VI‐1.  The domestic industry’s capital expenditures declined from $*** in 2010

to $*** in 2012 and were lower in interim 2013 ($***) than in interim 2012 ($***).  CR/PR at Table VI‐4.

149 The domestic industry’s operating income fell by *** percent, and its market share fell by ***

percentage points from 2010 to 2012, while apparent U.S. consumption of NOES increased by ***

percent during this period.  CR/PR at Table C‐1.

150 Respondents argue that competition between the domestic like product and subject imports

is attenuated because certain subject producers provide specialized product or focus on longstanding

customer relationships.  They thus assert that any difficulties the domestic industry is experiencing

cannot be caused by subject imports.  E.g., Japanese Respondents’ Postconference Brief at 5‐23,

ThyssenKrupp’s Postconference Brief at 3‐11, CDW’s Postconference Brief at 1‐5; Chinese Respondents’

Postconference Brief at 5‐6; Swedish Respondents’ Postconference Brief at 17‐24; Taiwanese

Respondent’s Postconference Brief at 2‐3.  In any final phase of these investigations we will issue

purchasers’ questionnaires, the data from which will permit us to evaluate respondents’ argument more

meaningfully than is possible on the current record.   151 As discussed earlier, the market share held by nonsubject imports was *** percent in 2010,

*** percent in 2011, *** percent in 2012, *** percent in interim 2012, and *** percent in interim 2013.  

CR/PR at Table IV‐8.   152 Based on the record evidence in the preliminary phase of these investigations, Commissioner

Pinkert finds that price competitive, nonsubject imports were not a significant factor in the U.S. market

for NOES during the period of investigation.  CR/PR at Table C‐1.  Nonsubject imports’ share of the U.S.

market was *** percent in 2010, *** percent in 2011, *** percent in 2012, *** percent in interim 2012,

and *** percent in interim 2013.  Id.

153 E.g., Japanese Respondents’ Postconference Brief at 5‐23, ThyssenKrupp’s Postconference

Brief at 3‐11, CDW’s Postconference Brief at 1‐5; Chinese Respondents’ Postconference Brief at 5‐6;

(Continued...)
28

information in the record of these preliminary phase investigations to permit us to assess the

impact of these alleged other factors.  Based on the record before us, we cannot conclude that

these factors individually or together amount to clear and convincing evidence of no material

injury to the domestic industry by reason of cumulated subject imports.  We intend to examine

those factors and their effect on the domestic industry in any final phase investigations.    

For purposes of these preliminary determinations, we conclude that the cumulated

subject imports have had a significant adverse impact on the domestic industry.

VII. Conclusion

For the reasons stated above, we determine that there is a reasonable indication that an

industry in the United States is materially injured by reason of subject imports of NOES from

China, Germany, Japan, Korea, Sweden, and Taiwan that are allegedly sold in the United States

at less than fair value and allegedly subsidized subject imports of GOES from China, Korea, and

Taiwan.   

                                                                                                                                                                              

(...Continued)

Swedish Respondents’ Postconference Brief at 17‐24; Taiwanese Respondent’s Postconference Brief at

2‐3.    
I‐1

PART I: INTRODUCTION

BACKGROUND

These investigations result from a petition filed with the U.S. Department of Commerce

(“Commerce”) and the U.S. International Trade Commission (“USITC” or “Commission”) by AK

Steel Corp., West Chester, Ohio, on September 30, 2013, alleging that an industry in the United

States is materially injured and threatened with material injury by reason of subsidized imports

of nonoriented electrical steel (“NOES”) 1 from China, Korea, and Taiwan and less than‐fair‐

value (“LTFV”) imports from China, Germany, Japan, Korea, Sweden and Taiwan. The following

tabulation provides information relating to the background of these investigations.2 3

  

Effective date Action 

September 30, 2013 Petition filed with Commerce and the Commission; 

institution of Commission investigations (78 FR 62660, 

October 22, 2013) 

November 6, 2013 Commission’s conference 

November 14, 2013 Commerce’s notice of initiation of countervailing duty 

investigations (78 FR 68412, November 14, 2013) 

November 18, 2013 Commerce’s notice of initiation of antidumping 

investigations (78 FR 69041, November 18, 2013) 

December 2, 2013 Commission’s vote 

December 2, 2013 Commission’s determination 

December 9, 2013 Commission’s views 

STATUTORY CRITERIA AND ORGANIZATION OF THE REPORT

Statutory criteria

Section 771(7)(B) of the Tariff Act of 1930 (the “Act”) (19 U.S.C. § 1677(7)(B)) provides

that in making its determinations of injury to an industry in the United States, the Commission‐‐ 

shall consider (I) the volume of imports of the subject merchandise, (II) the

effect of imports of that merchandise on prices in the United States for

                                                      

1 See the section entitled “The Subject Merchandise” in Part I of this report for a complete

description of the merchandise subject to these investigations. 2 Pertinent Federal Register notices are referenced in app. A, and may be found at the Commission’s

website (www.usitc.gov).

3 A list of witnesses that appeared at the conference is presented in app. B of this report.
I‐2

domestic like products, and (III) the impact of imports of such

merchandise on domestic producers of domestic like products, but only in

the context of production operations within the United States; and. . .

may consider such other economic factors as are relevant to the

determination regarding whether there is material injury by reason of

imports.

Section 771(7)(C) of the Act (19 U.S.C. § 1677(7)(C)) further provides that‐‐ 

In evaluating the volume of imports of merchandise, the Commission shall

consider whether the volume of imports of the merchandise, or any

increase in that volume, either in absolute terms or relative to production

or consumption in the United States is significant.

. . .

In evaluating the effect of imports of such merchandise on prices, the

Commission shall consider whether. . .(I) there has been significant price

underselling by the imported merchandise as compared with the price of

domestic like products of the United States, and (II) the effect of imports

of such merchandise otherwise depresses prices to a significant degree or

prevents price increases, which otherwise would have occurred, to a

significant degree.

. . .

In examining the impact required to be considered under subparagraph

(B)(i)(III), the Commission shall evaluate (within the context of the

business cycle and conditions of competition that are distinctive to the

affected industry) all relevant economic factors which have a bearing on

the state of the industry in the United States, including, but not limited to

. . . (I) actual and potential decline in output, sales, market share, profits,

productivity, return on investments, and utilization of capacity, (II) factors

affecting domestic prices, (III) actual and potential negative effects on

cash flow, inventories, employment, wages, growth, ability to raise

capital, and investment, (IV) actual and potential negative effects on the

existing development and production efforts of the domestic industry,

including efforts to develop a derivative or more advanced version of the

domestic like product, and (V) in {an antidumping investigation}, the

magnitude of the margin of dumping.

Organization of report

Part I of this report presents information on the subject merchandise, alleged subsidy

programs, dumping margins, domestic like product, and the domestic industry. Part II of this

report presents information on conditions of competition and other relevant economic factors.

Part III presents information on the condition of the U.S. industry, including data on capacity,
I‐3

production, shipments, inventories, and employment. Parts IV and V present the volume of

subject imports and pricing of domestic and imported products, respectively. Part VI presents

information on the financial experience of U.S. firms. Part VII presents the statutory

requirements and information obtained for use in the Commission’s consideration of the

question of threat of material injury as well as information regarding nonsubject countries.

MARKET SUMMARY

NOES is typically used in the production of large and small motors, generators, lighting

ballasts, and ignition coils. The Commission received U.S. producer questionnaires from two

firms, AK Steel and Nucor, with AK Steel accounting for the vast majority (*** percent) of NOES

production in the United States in 2012. Leading producers of NOES outside the United States

include Baoshan Iron & Steel Co., Ltd. (“Baosteel”) and Angang Steel Company Limited

(“Angang”) of China; ArcelorMittal Eisenhüttenstadt GmbH (“ArcelorMittal Germany”), C.D.

Walzholz KG (“CDW”), and ThyssenKrupp Steel Europe AG (“ThyssenKrupp”) of Germany; JFE

Steel Corporation (“JFE Steel”) and Nippon Steel & Sumitomo Metal Corporation (“Nippon

Steel”) of Japan; Pohang Iron and Steel Company (“POSCO”) of Korea; Surahammars Bruks AB

(“Surahammars”) of Sweden; and China Steel Corporation (“China Steel”) of Taiwan. The

leading U.S. importers of NOES include: Bao America (China); CDW America and ThyssenKrupp

Europe (Germany); Kanematsu (Japan); POSCO America (Korea); Cogent Power (Sweden); and

Metallia (Taiwan).  

Apparent U.S. consumption of NOES totaled approximately *** short tons *** in 2012.

U.S. producers’ U.S. shipments of NOES totaled *** short tons *** in 2012, and accounted for

*** percent of apparent U.S. consumption by quantity and *** percent by value. U.S. imports

from subject sources totaled 76,006 short tons ($90.7 million) in 2012 and accounted for ***

percent of apparent U.S. consumption by quantity and *** percent by value. U.S. imports from

nonsubject sources totaled 6,242 short tons ($8.1 million) in 2012 and accounted for ***

percent of apparent U.S. consumption by quantity and *** percent by value.  

SUMMARY DATA AND DATA SOURCES

A summary of data collected in these investigations is presented in appendix C, table C‐

1. Except as noted, U.S. industry data are based on questionnaire responses of two firms that

accounted for all of the U.S. production of NOES during 2012 and U.S. import data are based on

the official Commerce statistics and questionnaire responses from 25 companies, representing

87.4 percent of total subject imports (76.2 percent of imports from China, 108.5 percent of

imports from Germany, 71.8 percent of imports from Japan, 99.3 percent of imports from
I‐4

Korea, 99.2 percent of imports from Sweden, and 90.1 percent of imports from Taiwan) in

2012.4

  

PREVIOUS AND RELATED INVESTIGATIONS

NOES, as defined in the scope of these investigations, has not been the subject of any

prior countervailing or antidumping duty investigations in the United States; however, the

Commission has conducted prior investigations on cold‐rolled steel products containing up to

2.25 percent silicon.5    

NATURE AND EXTENT OF ALLEGED SUBSIDIES AND SALES AT LTFV

Alleged subsidies

On November 14, 2013, Commerce published a notice in the Federal Register of the

initiation of its countervailing duty investigation on NOES from China, Korea, and Taiwan. Based

on Commerce’s review of the petitions, Commerce found that there was sufficient information

to initiate a CVD investigation on 30 alleged programs in China, 17 alleged programs in Korea,

and 6 alleged programs in Taiwan. 6  

Alleged sales at LTFV

On November 18, 2013, Commerce published a notice in the Federal Register of the

initiation of its antidumping duty investigations on NOES from China, Germany, Korea, Japan,

Sweden and Taiwan.7 Commerce has initiated antidumping duty investigations based on

estimated dumping margins of 244.54 percent to 407.52 percent for NOES from China, 73.74

percent to 98.84 percent for NOES from Germany, 88.63 percent to 204.79 percent for NOES

                                                      

4 Coverage was calculated based on official Commerce import statistics (subheadings 7225.19.00

7226.19.10, and 7226.19.90 of the Harmonized Tariff Schedule of the United States (HTSUS) compared

to the quantity of imports, in short tons, reported in questionnaire data in 2012. Official Commerce

statistics may contain products that are excluded by the scope of these investigations —silicon electrical

steel containing 0.6 percent or more, but less than 1.25 percent of silicon.   5 Certain Cold‐Rolled Steel Products from Argentina, Brazil, Japan, Russia, South Africa, and Thailand,

Inv. Nos. 701‐TA‐393 and 731‐TA‐829‐830, 833‐834, 836, and 838 (Final), USITC Publication 3283,

March, 2000. Certain Cold‐Rolled Steel Products from Australia, India, Japan, Sweden, and Thailand, Inv.

Nos. 731‐TA‐965, 971‐972, 979, and 981 (Final), USITC Publication 3536, September 2002.

6 Non‐oriented Electrical Steel from The People’s Republic of China, the Republic of Korea, and

Taiwan: Initiation of Countervailing Duty Investigations, 78 FR 68412, November 14, 2013. 7 Non‐oriented Electrical Steel from The People’s Republic of China, Germany, Japan, the Republic of

Korea, Sweden and Taiwan: Initiation of Antidumping Investigations, 78 FR 69041, November 18, 2013.
I‐5

from Japan, 16.00 percent to 68.82 percent for NOES from Korea, 62.17 percent to 126.72

percent for NOES from Sweden, and 52.23 percent to 101.51 percent for NOES from Taiwan.

THE SUBJECT MERCHANDISE

Commerce’s scope8

Commerce has defined the scope of these investigations as follows:9

The merchandise subject to these investigations consists of non‐oriented

electrical steel (NOES), which includes cold‐rolled, flat‐rolled, alloy steel

products, whether or not in coils, regardless of width, having an actual

thickness of 0.20 mm or more, in which the core loss is substantially equal

in any direction of magnetization in the plane of the material. The term

“substantially equal” in the prior sentence means that the cross grain

direction of core loss is no more than 1.5 times the straight grain direction

(i.e., the rolling direction) of core loss. NOES has a magnetic permeability

that does not exceed 1.65 Tesla when tested at a field of 800 A/m

(equivalent to 10 Oesteds) along (i.e., parallel to) the rolling direction of

the sheet (i.e., B800 value). NOES contains by weight at least 1.25 percent

of silicon but less than 3.5 percent of silicon, not more than 0.08 percent

of carbon, and not more than 1.5 percent of aluminum.  

NOES is subject to these investigations whether it is fully processed (fully

annealed to develop final magnetic properties) or semi‐processed

(finished to final thickness and physical form but not fully annealed to

develop final magnetic properties); whether or not it is coated (e.g., with

enamel, varnish, natural oxide surface, chemically treated or phosphate

surface, or other non‐metallic materials). Fully processed NOES is typically

made to the requirements of ASTM specification A 677, JIS specification C

2552, and/or IEC specification 60404‐8‐4. Semi‐processed NOES is

typically made to the requirements of ASTM specification A 683. However,

                                                      

8 On November 22, 2013, Petitioner (AK Steel) requested that Commerce revise the scope language

to define more precisely the intended scope of the investigations to cover subject imports of NOES and

to avoid covering cold‐rolled motor lamination electrical steel. Petition Amendment To Clarify the

Proposed Scope Definition, November 22, 2013.

9 Non‐oriented Electrical Steel from The People’s Republic of China, the Republic of Korea, and

Taiwan: Initiation of Countervailing Duty Investigations, 78 FR 68412, November 14, 2013. Non‐oriented

Electrical Steel from The People’s Republic of China, Germany, Japan, the Republic of Korea, Sweden and

Taiwan: Initiation of Antidumping Investigations, 78 FR 69041, November 18, 2013.
I‐6

the scope of these investigations is not limited to merchandise meeting

the specifications noted above.  

NOES is sometimes referred to as cold‐rolled non‐oriented electrical steel

(CRNO), non‐grain oriented (NGO), non‐oriented (NO), or cold‐rolled non‐

grain oriented (CRNGO). These terms are interchangeable.

Tariff treatment

Based upon the scope set forth by the Department of Commerce, information available

to the Commission indicates that the products subject to the petitions are classifiable in

subheadings 7225.19.00 7226.19.10, and 7226.19.90 of the Harmonized Tariff Schedule of the

United States (HTS). Certain products subject to these petitions may also be imported under

statistical reporting numbers 7225.50.8085, 7225.99.0090, 7226.92.5000, 7226.92.7050,

7226.92.8050, and 7226.99.0180.10 Although HTSUS subheadings are provided for convenience

and customs purposes, the written description of the scope is dispositive.

THE PRODUCT

The product covered by these investigations, NOES, is a flat‐rolled, alloy steel product

that is used to manufacture laminations that are assembled in stacks to produce magnetic cores

for alternating‐current electrical apparatus. NOES has desirable magnetic properties that are

similar in all directions (nonoriented), in contrast to grain‐oriented electrical steel (GOES),

which has superior magnetic properties in the lengthwise direction of the sheet, but less

favorable properties in other directions. Thus, NOES is used primarily to produce laminations

for which the direction of the magnetic flux in the apparatus is constantly changing, such as for

rotating machinery such as motors and generators, whereas GOES is used primarily in static

equipment, such as transformers, for which the laminations can be produced in such a way as

to take advantage of the favorable directionality of the steel. NOES is also used in small static

apparatus, such as small, low voltage transformers and lighting ballasts, if the higher cost of

GOES cannot be justified by potential savings in improved energy efficiency.

NOES is sold in either sheet or strip form, either in coils or in straight lengths. Two types

of NOES are produced: fully processed NOES, which is final‐annealed by the producer; and

semi‐processed NOES, which, although it is annealed by the producer, must be annealed once

again by the consumer after being punched or otherwise formed into laminations in order to

achieve its potential magnetic properties.11 Both domestic and imported NOES are produced in

                                                      

10 For each of these HTS provisions, the general or normal trade relations rate of duty is free. 11 The processes of flattening, punching or shearing NOES into individual laminations introduces

strains within the steel that are harmful to magnetic properties. Annealing of the laminations removes

the strains and achieves the potential magnetic properties.
I‐7

compliance with specifications issued by ASTM International (“ASTM”),12 or proprietary or

international specifications.13

As defined by the scope, NOES is produced of steel that is alloyed with 1.25 percent or

more of silicon, with aluminum usually added in lesser amounts. Both silicon and aluminum

increase the electrical resistivity of steel, resulting in lower loss of energy in finished motors or

apparatus produced using NOES.

Manufacturing processes14

The production of NOES begins with the melting of steel in either an electric‐arc furnace

or a basic oxygen furnace.15  Molten steel is transferred in a ladle where other procedures such

as argon‐oxygen refining, ladle metallurgy treatment, and vacuum degassing may be employed.

These steps refine the chemistry of the steel by reducing undesirable contaminants. Alloys

including silicon and aluminum are added. The steel is then continuously cast into slabs, which

are rolled on a continuous hot strip mill to produce hot‐rolled coils. All subsequent processing is

done on continuous processing lines for which the coils are uncoiled, passed through the

processing lines and recoiled after processing. The first step of coil processing is annealing and

cleaning. Next, coils are rolled to ordered thickness on a cold‐rolling mill.16 Next, coils are

annealed for the final time on a continuous annealing line using a controlled, decarburizing

atmosphere and provided with a tightly adherent surface oxide that serves to prevent

laminations from sticking to one another and to increase electrical resistance between

laminations. Fully processed NOES is usually provided with an applied coating, called

“coreplate,” to further increase electrical resistance between laminations. Finally, coils may be

slit to ordered width.

According to petitioner, subject foreign producers in China, Germany, Japan, Korea,

Sweden, and Taiwan generally use similar processes to produce NOES.17 AK Steel, the

petitioner, uses the same melting, casting, and hot rolling equipment that is used to produce

NOES to produce other products, including stainless steel, grain‐oriented electrical steel and

carbon steel. AK Steel’s coil processing equipment for NOES is separate from its facilities for

other products and is used exclusively for NOES.18

                                                      

12 Specification ASTM A 677 covers fully processed types of NOES and ASTM A 683 covers

semiprocessed types. Both specify properties for NOES of the commonly produced thicknesses of 0.0185

inches and 0.025 inches. A 677 also specifies properties for 0.014 inch thick material.   13 International standards are very similar to ASTM standards. Conference transcript, p. 71 (Schoen). 14 The description of the manufacturing process for NOES is based on testimony at the Staff

Conference. Conference transcript, pp. 21‐22 (Petersen).

15 Petitioner AK Steel produces NOES in an electric‐arc furnace, whereas some of the producers in

subject countries use basic oxygen furnaces.   16 In some cases, to produce very thin product, coils may be cold rolled to an intermediate thickness,

annealed and cold‐rolled to the ordered thickness. 17 Conference transcript, p. 22. (Petersen)

18 Conference transcript, p. 18. (Petersen).
I‐8

***.19 NOES is not normally temper rolled.  

Description of CRML

Cold‐rolled magnetic lamination quality steel (“CRML”) is a steel sheet product that, like

NOES, is used to produce laminations for electrical apparatus.20 Like NOES, CRML is non‐

oriented, that is, it has similar magnetic properties in all directions. CRML was developed as an

improved quality of cold‐rolled steel to offer a lower‐cost alternative to NOES for magnetic

laminations. The market for CRML is much larger than that for NOES.21 CRML is produced by

producers of cold‐rolled steel sheet, using the same equipment used to produce that product.

NOES and CRML both are produced from steel containing significant amounts of silicon,

which increases the electrical resistivity of the steel and results in lower energy losses in

magnetic laminations. NOES contains over 1.25 percent silicon and generally about 2 percent

silicon, depending upon grade. CRML containing less than 1.25 percent silicon is excluded from

the scope of these investigations. The magnetic properties of CRML are developed as a result of

heavy temper mill extension rolling at the producing mill followed by decarburizing anneal of

the stamped laminations by the customer. NOES, in contrast, is not temper rolled after its final

annealing process at the mill. Laminations produced of CRML, like those produced of semi‐

processed NOES, are annealed by the customer in order to develop their potential magnetic

properties. Fully processed NOES is usually coated with an insulating coating at the producing

mill after annealing, and laminations are used as stamped, not annealed after stamping.

CRML is produced from steel that has been refined to a low carbon content, through

vacuum or other processing, followed by continuous casting, hot rolling, pickling, cold rolling,

annealing, and temper rolling.22 The annealing step is commonly performed on coils in batch

annealing furnaces rather than by uncoiling the strip and passing it through a continuous

furnace as is done for NOES, although continuous annealing may be used by some producers.

For temper rolling after annealing, high extensions are used (in comparison to relatively low

extensions used for conventional cold‐rolled steel sheet.)23

                                                      

19 Staff phone notes with ***, November 14, 2013.

20 CRML was earlier named “cold‐rolled motor lamination sheet”, but was renamed by ASTM as

“cold‐rolled magnetic lamination quality steel”, to reflect more general applications. The acronym

“CRML” is used generally to refer to either motor lamination sheet or magnetic lamination sheet and

there is no intended distinction between the two. U.S. Steel “Facts and Figures, U.S. Steel Cold Rolled

Magnetic Lamination Quality Steel”, p. 9. 21 According to Japanese respondents, CRML consumption is orders of magnitude over NOES

consumption. Japanese respondents’ postconference brief, p. 9. According to estimates by ***.

Japanese respondents’ postconference brief, Exhibit 5, p. 6.   22 ASTM A 726 Paragraph 5.2. See also, U.S. Steel “Facts and Figures, U.S. Steel Cold Rolled Magnetic

Lamination Quality Steel”, p. 9.

23 ASTM A 726 Paragraph 5.2.1. “Special emphasis may be placed on high extensions (2 to 10 %)

during the temper roll after annealing.”  See also, Japanese respondents’ Exhibit 5, *** See also, U.S.

(continued...)
I‐9

DOMESTIC LIKE PRODUCT ISSUES

The Commission’s decision regarding the appropriate domestic product(s) that are “like”

the subject imported product is based on a number of factors including: (1) physical

characteristics and uses; (2) common manufacturing facilities and production employees; (3)

interchangeability; (4) customer and producer perceptions; (5) channels of distribution; and (6)

price. Information regarding these factors is discussed below.

The petitioner argues that the domestic like product should be defined as co‐extensive

with the scope of the investigations and that the domestic like product include all NOES in the

proposed scope of the investigations.24 Respondents China Steel and Baosteel argue that the

domestic like product in these investigations should include both NOES and CRML.25  

Physical Characteristics and Uses

Petitioner argues that NOES and CRML have different chemistries, noting that the scope

of the investigations defines semiprocessed and fully processed NOES to have a minimum

silicon content of 1.25 percent, while the ASTM specification for fully processed CRML limits the

silicon content to a maximum of 1 percent and the ASTM specification for semiprocessed CRML

does not indicate either a minimum or maximum silicon content. Petitioner also contends that

because silicon is the primary driver of the magnetic properties of iron silicon alloy steel, NOES

achieves superior magnetic properties and has far lower core losses than CRML.26  

China Steel maintains that while NOES achieves its magnetic properties primarily by

means of higher silicon content, CRML is able to achieve similar properties by means of normal

cold‐rolling with revised chemistry followed by final annealing by the customer.27 According to

testimony at the staff conference, post‐annealing, CRML can provide equivalent maximum core

loss values to NOES for each of the eight pricing products specified by the Commission.28

                                                      

(...continued)

Steel “Facts and Figures, U.S. Steel Cold Rolled Magnetic Lamination Quality Steel”, p. 10, “CR lamination

steel is produced with temper mill extensions of as much as ten times the extensions applied to regular

cold rolled sheet.”

24 Petitioner’s postconference brief, p. 3. Petitioner also argues that there is a clear dividing line

between NOES and grain‐oriented electrical steel (“GOES”). Petitioner’s postconference brief, pp. 6‐7.

However, no parties have argued that the domestic like product should include GOES. For the purposes

of these preliminary investigations, Japanese respondents agree to accept the like product definition

proposed by the Petitioner, but argue that the Commission will need to examine domestic like product

issues concerning the competitive relationship between NOES and CRML in any final phase of these

investigations. Japanese respondents’ postconference brief, p.2.

25 China Steel’s postconference brief, p. 3. Baoshan’s postconference brief, p. 1.

26 Maximum core loss is a measure of the amount of current that is wasted, as heat, when the

electrical current passes through the steel. Petitioner’s postconference brief, pp. 7‐8.

27 China Steel’s postconference brief, p. 5.   28 Conference transcript, pp. 94‐95 (Weinstein).
I‐10

Baosteel argues that NOES and CRML are both cold rolled steel products that in previous cases

have been considered part of the same like product.29

Petitioner maintains that because there are different modes of production for NOES and

CRML, each have substantially different surfaces.30 With regard to testing protocols, Petitioner

argues that ASTM requires that NOES be much more extensively tested and certified than

CRML, which results in a significantly higher cost‐of‐compliance and quality assurance.31

Interchangeability  

Petitioner contends that because CRML is less efficient than NOES, CRML could only

serve as a substitute for NOES in low voltage, low efficiency motors where high efficiency is not

required.32 Respondents China Steel and Baosteel argue that CRML is interchangeable with

NOES for a broad range of applications.33

Channels of distribution

Petitioner contends that because of their different physical characteristics and prices,

CRML and NOES are generally sold in distinct market segments. Petitioner argues that

substantially all of AK Steel’s NOES production and virtually all, if not all, of the subject imports

are fully processed NOES. In contrast, petitioner submits that CRML is typically not sold fully

processed.34 China Steel and Baosteel contend that both NOES and CRML are sold through

similar channels of distribution—by steel manufacturers to end users and, in some cases, to

distributors.35

Customer and producer perceptions

Petitioner argues that because of their different physical characteristics, uses, and

production processes, producers and customers perceive NOES and CRML as distinct

                                                      

29 Baoshan’s postconference brief, p. 1.

30 Petitioner notes that all NOES, whether fully processed or semiprocessed, has a smooth surface

finish and a thin, tightly adherent surface oxide which has sufficient insulating abilities and that NOES is

commonly applied with an additional coating for higher levels of insulating ability. Petitioner notes that

ASTM for CRML dictates a roughened surface texture achieved by rolling on mills that have been

roughened by mechanical, chemical, or electrical means and adds that that CRML does not have either a

natural or applied insulation coatings. Petitioner’s postconference brief, p. 8.

31 Petitioner’s postconference brief, p. 9.

32 Petitioner’s postconference brief, p. 10.

33 China Steel’s postconference brief, p. 5. Baoshan’s postconference brief, p. 2.

34 Petitioner argues that CRML’s semiprocessed sheet cannot be substituted for fully processed

NOES. Petitioner’s postconference brief, p. 10.

35 China Steel’s postconference brief, p. 6. Baoshan’s postconference brief, p. 2.
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products.36 Respondents China Steel and Baosteel contend that customer and producer

perceptions of CRML and NOES are similar.37

Common manufacturing facilities and production employees

Petitioner argues that NOES and CRML are produced in different facilities with distinct

production processes and equipment, maintaining that CRML is produced using traditional

routing for carbon steel, with a batch annealing process, while NOES is produced using a

continuous annealing process. 38 Petitioner also contends that the finishing steps in the

production process for NOES and CRML differ as well. For NOES, the final step consists of

continuous annealing in a controlled atmosphere and the application of an applied insulation

coating, while for CRML, the final step is to cold reduce and flatten the steel and not to advance

its magnetic properties resulting in an uncoated rough surface texture unlike the smooth

coated surface of NOES.39  

China Steel argues that there is nothing on the record to suggest that semiprocessed

NOES and CRML could not be produced on the same production equipment and that the only

significant difference would appear to be the silicon content of each.40 Baosteel argues that

while there are unique qualities in the production of NOES, both NOES and CRML are cold rolled

products.41

Price

Petitioner argues that there are significant differences in price between NOES and CRML

because the production process for NOES is more complex and expensive than the production

process for CRML and the magnetic and physical properties of NOES are superior to those of

CRML. Petitioner contends that prices of NOES tend to be at least 50 percent higher than prices

for CRML.42 China Steel argues that, when compared at the point of sale, CRML is considerably

lower priced than fully processed NOES and that, even after factoring in the additional costs of

annealing, CRML can be an attractive, lower‐price alternative to both fully processed and

semiprocessed NOES for those applications that do not require an insulation coating.43 Baosteel

adds that price drives the overlap in competition between NOES and CRML.44

                                                      

36 Petitioner’s postconference brief, pp. 10‐11.   37 China Steel’s postconference brief, p. 6.   38 AK Steel does not produce CRML. ArcelorMittal, Nucor, and U.S. Steel all produce CRML, but only

Nucor produces both CRML and the NOES as defined in the scope of these investigations.   39 ASTM specifications reflect different production processes for NOES and CRML. Petitioner’s  

postconference brief, pp. 11‐12.

40 China Steel’s postconference brief, p. 7. 41 Baoshan’s postconference brief, p. 2.

42 Petitioner’s postconference brief, p. 12.

43 China Steel’s postconference brief, p. 7. 44 Baoshan’s postconference brief, p. 2.
I‐12

DOMESTIC INDUSTRY

Petitioner argues that AK Steel comprises the entirety of the domestic industry, because

it is the only U.S. producer of NOES.45 China Steel argues that the domestic like product in these

investigations should include both CRML and NOES; therefore, it argues that the domestic

industry should include not only AK Steel, but also domestic producers of CRML, including U.S.

Steel, ArcelorMittal, and Nucor.46

                                                      

45 Petitioner’s postconference brief, p. 14. Subsequent to the filing of the postconference briefs,

Nucor provide a questionnaire response indicated that it produces NOES. AK Steel’s production of NOES

accounted for *** percent of total U.S. production in 2012.

46 China Steel’s postconference brief, p. 3.
II‐1

PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

U.S. MARKET CHARACTERISTICS

NOES is primarily used to make electric motors and generators, and is likely a substantial

cost of those products. Parties differ over to what extent NOES competes with grain‐oriented

electrical steel (GOES) and cold‐rolled motor lamination (CRML), with petitioners describing

little overlap and respondents describing substantial overlap. Petitioners describe NOES

demand as generally following wider economic trends. On the other hand, respondents stated

that NOES demand has been hurt by competition with CRML, even as many importers also

described new, higher‐grade requirements for NOES in some downstream products.

U.S. MARKET SEGMENTS

As discussed in Part I, NOES can be sold in fully processed or semiprocessed form,

depending on whether the purchaser performs the final annealing (of semiprocessed NOES) or

the producer does (of fully processed NOES). Currently, all imports of NOES are fully processed;

however, petitioner stated that if duties were placed only on fully processed NOES, importers

could evade the duties with imports of semiprocessed NOES.1 Petitioner stated that

semiprocessed NOES accounts for approximately *** percent of its sales of NOES, and added

that prices for semiprocessed NOES follow the same trends as for fully processed NOES, at

approximately *** percent the price level.2

CHANNELS OF DISTRIBUTION

As discussed in Part I, before being incorporated into a motor or transformer, NOES is

stamped into laminations and assembled into cores. AK Steel does not have laminating and

stamping capability, so either the end user performs this function, or AK Steel sells NOES to a

laminator/stamper, which in turn sells to an ultimate end user. AK Steel estimated that

approximately 20 percent of its shipments are to laminators and stampers.3 AK Steel also

described NOES distributors as serving the portion of the market that wants quick delivery

without holding their own inventory.4

 

1 Conference transcript, pp. 22‐23 (Petersen). 2 Petitioner’s postconference brief, response to staff questions, pp. 6‐7.

3 Conference transcript, p. 53 (Pfeiffer). 4 Conference transcript, p. 63 (Konstantinidis).
II‐2

U.S. producers and importers5 of *** NOES sold *** while importers of *** NOES sold

mainly to end users, and importers of *** NOES sold mainly to distributors, as shown in table II‐

1.6

Table II-1 

NOES: U.S. producers’ and importers’ U.S. shipments, by sources and channels of distribution, 

2010-2012, January-June 2012, and January-June 2013 

* * * * * * * 

Geographic distribution 

U.S. producer *** reported selling NOES to most regions in the United States while ***

reported selling *** (table II‐2). Importers reported selling to most U.S. regions, but not as

often to the western United States as to the eastern United States. At the conference, German

and Swedish respondents described their NOES as focused on a few specific customers in

specific regions, and not present in all U.S. geographic regions.7

For U.S. producer AK Steel, *** percent of sales were within 100 miles of their

production facility, *** percent were between 101 and 1,000 miles, and *** percent were over

1,000 miles. For U.S. producer Nucor, *** percent were between 101 and 1,000 miles, and ***

percent were over 1,000 miles. Weighting importers’ responses by their shipments, importers

sold 39.1 percent of their NOES within 100 miles of their U.S. point of shipment, 48.6 percent

between 101 and 1,000 miles, and 12.3 percent over 1,000 miles. Importers showed some

variation in response by country. The majority of *** material was shipped less than 100 miles;

the majority of *** material was shipped between 100 and 1,000 miles; and the majority of ***

material was shipped over 1,000 miles.

Table II-2 

NOES: Geographic market areas in the United States served by U.S. producers and importers, by 

number of responding firms 

* * * * * * * 

 

5 ***.

6 ***.

7 Conference transcript p. 102 (LaFrankie), p. 106 (McPhie), and p. 115 (Kaufman).  See also Walzholz’

and CDW’s postconference brief, pp. 4‐5 ,and ThyssenKrupp’s postconference brief, p. 11.
II‐3

SUPPLY AND DEMAND CONSIDERATIONS

U.S. supply

Domestic production

Based on available information, U.S. producers of NOES have the ability to respond to

changes in demand with moderate‐to‐large changes in the quantity of shipments of U.S.‐

produced NOES to the U.S. market. The main contributing factors to this degree of

responsiveness of supply are the availability of unused capacity, the existence of some

alternate markets and inventories, and the ability to produce alternate products.

Industry capacity

Petitioner described itself as able to produce NOES in all sizes and grades.8 Domestic

capacity *** from 2010 to 2012, as capacity utilization was always *** or less. This relatively

low level of capacity utilization suggests that U.S. producers may have substantial capacity to

increase production of NOES in response to an increase in prices.

Alternative markets

U.S. producers’ exports as a percentage of total shipments were approximately ***

percent in 2010, but decreased to under *** percent in 2012 as U.S. producers’ export

shipments declined. These levels indicate that U.S. producers may have a some ability to shift

shipments between the U.S. market and other markets in response to price changes.  

Inventory levels

U.S. producers’ inventories as a percent of shipments ranged from approximately *** to

*** percent over 2010‐12, but had risen to nearly *** percent in January‐June 2013. These

inventory levels suggest that U.S. producers may have some ability to respond to changes in

demand with changes in the quantity shipped from inventories.

Production alternatives

U.S. producer *** stated that it could switch production from NOES to *** while ***

stated that it could switch production from NOES to ***.  

Supply constraints

One importer stated that purchasers need imported NOES in the U.S. market in case of

supply issues with the U.S. producer of NOES, and another stated that AK Steel had placed

 

8 Conference transcript, p. 24 (Pfeiffer).
II‐4

purchasers on allocation several times over the last ten years.9 *** stated that it had not had

any difficulty supplying NOES since January 1, 2010. It added that ***.10  *** indicated that it

had experienced difficulty supplying NOES, ***.11

Subject imports from China

Based on available information, producers of NOES from China have the ability to

respond to changes in demand with moderate‐to‐large changes in the quantity of shipments of

NOES to the U.S. market. Responsiveness of supply for Chinese producers of NOES is

constrained by high levels of reported capacity utilization. However, the volume of Chinese

producers’ shipments of NOES to third‐country markets was larger than total U.S. NOES

consumption in 2012.

Industry capacity

Petitioner described Chinese producers as having substantial and large excess capacity,

and as adding more capacity, including for high‐grade NOES.12 Chinese producers reported

unchanged capacity over 2010‐12, with capacity utilization ranging from approximately *** to

*** percent.

Alternative markets

Chinese producers shipped *** percent or more of their NOES to their home market,

but exports to non‐U.S. markets were larger than U.S. consumption of NOES in 2012.

Inventory levels

Chinese producers’ inventories ranged from approximately *** to *** percent of their

shipments over 2010 to 2012.

Production alternatives

Chinese producers ***.

 

9 Conference transcript, p. 92 (Azeyanagi) and p. 97‐99 (Weinstein).

10 ***. 11 See ***. 12 Conference transcript, p. 43 (Jones), and petitioner’s postconference brief, p. 38.
II‐5

Supply constraints

*** stated that it had to decline or reduce customer orders since 2010 due to supply

allocations and the availability of capacity for high‐grade NOES. No other importers of Chinese

NOES reported difficulties in supplying NOES.

Subject imports from Germany

Based on available information, producers of NOES from Germany have the ability to

respond to changes in demand with moderate‐to‐large changes in the quantity of shipments of

NOES to the U.S. market. Responsiveness of supply for German producers of NOES is

constrained by high levels of reported capacity utilization. However, the volume of German

producers’ shipments of NOES to third‐country markets was over *** percent of total U.S.

NOES consumption in 2012.

Industry capacity

German producers stated that the uncoated and other NOES that they sell in the United

States are not produced by U.S. NOES producers.13 German producers reported capacity that

ranged from over *** thousand tons to over *** thousand tons over 2010‐12. They also

reported capacity utilization levels of at least *** percent over the same period.

Alternative markets

German producer ThyssenKrupp stated that it had been exporting NOES to the United

States for a specific customer that stopped U.S. production of its downstream product using

NOES in 2012. It indicated that it has since reduced its U.S. exports and has no plans to divert

them to other U.S. purchasers.14 Nearly *** percent of German producers’ shipments in 2012

were to their home market. However, German producers exported approximately *** percent

of their total shipments to third‐country markets over 2010 to 2012. Such exports were over

*** thousand tons in 2012, down from levels in 2010 and 2011.

Inventory levels

German producers’ inventory levels were approximately *** percent of shipments over

2010 to 2012.

Production alternatives

German producer *** stated that it could produce *** on the same equipment it uses

to produce NOES.

 

13 Conference transcript, pp. 102 (LaFrankie) and 106 (McPhie). 14 Conference transcript, p. 103 (LaFrankie).
II‐6

Supply constraints

No importers of German NOES reported difficulties in supplying NOES.

Subject imports from Japan

Based on available information, producers of NOES from Japan have the ability to

respond to changes in demand with large changes in the quantity of shipments of NOES to the

U.S. market. The main contributing factors to the large degree of responsiveness of supply are

the availability of unused capacity, the demonstrated ability to increase capacity, and the

existence of large alternate markets.

Industry capacity

Japanese producers’ reported capacity rose from over *** thousand tons in 2010 to

over *** thousand tons in 2012. During the same period, capacity utilization dropped from over

*** percent to under *** percent.

Alternative markets

At the conference, JFE described itself as focused on the Asian, and specifically Chinese,

markets for NOES.15 Exports to non‐U.S. markets were over *** thousand tons in 2012 and

almost *** thousand tons in 2011.

Inventory levels

Inventory levels were over *** percent of shipments in 2010 and 2011, and then

declined to under *** percent in 2012.

Production alternatives

*** stated that *** could produce *** on the same product lines on which they

produced NOES.

Supply constraints

No importers of Japanese NOES reported difficulties in supplying NOES.

Subject imports from Korea

Based on available information, the Korean NOES producer has the ability to respond to

changes in demand with moderate‐to‐large changes in the quantity of shipments of NOES to

the U.S. market. Responsiveness of supply for the Korean producer of NOES is constrained by

 

15 Conference transcript, p. 159 (Azeyanagi).
II‐7

***. However, the volume of the Korean producer’s ***, and represented a large share of

Korean producers’ total shipments.

Industry capacity

At the conference, petitioner described Korean producers as upgrading their NOES

production facilities with the encouragement of the Korean government.16 The Korean

producer reported that its capacity was *** at over *** thousand tons, with capacity utilization

at over *** percent in January‐June 2013, but otherwise always over *** percent over 2010‐12.

Alternative markets

Exports to non‐U.S. markets were never less than *** thousand tons over 2010‐12, and

represented almost *** percent or more of the Korean producer’s shipments over the same

period.

Inventory levels

Inventories were *** percent of shipments or less over 2010‐12.

Production alternatives

***.

Supply constraints

*** stated that it had experienced some difficulty in making timely shipments since

2010. No other importers of Korean NOES reported difficulties in supplying NOES.

Subject imports from Sweden

Based on available information, producers of NOES from Sweden have the ability to

respond to changes in demand with large changes in the quantity of shipments of NOES to the

U.S. market. The main contributing factors to this degree of responsiveness of supply are ***.

 

16 Conference transcript, p. 44 (Jones).
II‐8

Industry capacity

Swedish capacity was *** over 2010‐2012 and fell in January‐June 2013 from January‐

June 2012. Capacity utilization, however, fell from almost *** percent in 2011 to under ***

percent in 2012.

Alternative markets

At the conference, Cogent Power described U.S. imports from Sweden as almost the

same for 20 years, and concluded that those exports did not indicate that Swedish NOES

production was export‐oriented in a way that would lead to greater exports to the United

States.17 Exports to non‐U.S. markets were a little over *** thousand tons in 2012, representing

over *** of Swedish producers’ shipments.

Inventory levels

Inventories rose from under *** percent of shipments in 2010 to over *** percent in

2012.

Production alternatives

*** stated that it could produce *** on the same equipment it uses to produce NOES.

Supply constraints

No importers of Swedish NOES reported difficulties in supplying NOES.

Subject imports from Taiwan

Based on available information, producers of NOES from Taiwan have the ability to

respond to changes in demand with moderate‐to‐large changes in the quantity of shipments of

NOES to the U.S. market. The main contributing factors to this degree of responsiveness of

supply are the *** and the existence of alternate markets.

Industry capacity

At the conference, petitioner described Taiwan producer China Steel as having begun

capacity expansions at its NOES production facility.18 *** reported *** capacity over 2010 to

2012, ***.  *** also reported capacity utilization that ranged between *** and *** percent

over 2010‐12.

 

17 Conference transcript, pp. 158‐59 (Harper).

18 Conference transcript, p. 46 (Jones).
II‐9

Alternative markets

*** exports to third‐country markets were nearly *** thousand tons in 2012, nearly ***

of its shipments.

Inventory levels

Inventories as a percent of shipments ranged between approximately *** and ***

percent over 2010‐12

Production alternatives

***.

Supply constraints

No importers of Taiwan NOES reported difficulties in supplying NOES.

Nonsubject imports

Imports of NOES from nonsubject countries were less than *** percent of U.S. NOES

consumption over 2010‐12. The largest sources of nonsubject imports during 2010‐12 were

France and Australia. See Part VII for more information on nonsubject imports.

Factors Affecting Supply

Most producers and importers had not observed any changes in the product range, mix,

or marketing of NOES since January 1, 2010, although a few reported producing higher grade

NOES in response to demand. *** and 20 importers indicated that there had not been any

changes. *** stated that there had been changes, citing thinner gauge requirements and

worldwide overcapacity. Five importers also described changes in product range, citing supplier

responses to increased demand for electric vehicle motors and higher‐grade NOES

requirements at end users, elaborating that higher‐grade meant thinner gauges and/or higher

silicon content.

Petitioners noted that in July 2013, Brazil imposed antidumping duties on NOES from

China, Korea, and Taiwan. They stated that Brazil’s imports of NOES from those countries

before the duties were higher than all U.S. NOES imports.19 Importer Metallia stated that some

Brazilian purchasers now cannot find alternative sources of NOES and are continuing to

purchase NOES from those countries.20 Petitioner also described several large NOES production

facilities being built by foreign‐owned NOES producers in India and Vietnam, and forecast that

 

19 Conference transcript, p. 11 (Dorn).

20 Conference transcript, p. 126 (Weinstein).
II‐10

production from these facilities would place competitive pressure on existing subject‐country

producers.21

U.S. demand

Based on available information, the overall demand for NOES is likely to experience

moderate changes in response to changes in price. NOES likely represents a somewhat to very

substantial cost share of downstream products, but there are substitute products, though their

range may be limited.  

End uses

U.S. demand for NOES depends on the demand for U.S.‐produced downstream

products. U.S. producers reported end uses as electric motors, low‐voltage transformers,22 and

generators, but did not know the share of the costs of the final products accounted for by

NOES. Importers reported the same end uses, as well as reporting slit coils of NOES as an end

use. Many importers also did not know the share of the costs of the final products accounted

for by NOES, but others estimated 20‐84 percent of the costs of a motor, 80 percent of the cost

of a transformer, and 20 percent of the cost of a generator. In response to lost sales and lost

revenue allegations (see Part V), several NOES purchasers stated that increased NOES costs

could make their products uncompetitive, implying that NOES’ costs are an important portion

of their overall costs.

Business cycles

Most producers and importers did not report distinctive business cycles nor changing

business cycles for NOES. Those that did see distinctive cycles often described increased

demand for higher grade NOES or purchasers moving their production offshore.

*** and 18 of 24 importers indicated that the NOES market was not subject to any

distinct business cycles or conditions of competition. However, *** stated that demand is

seasonal, lower in the winter and higher in the spring and the summer.  Six importers also

described distinct business cycles or conditions of competition in the NOES market. Among

those six importers, *** cited competition based on quality factors such as core loss. ***

described increased capacity in China. *** indicated that its customers that participate in the

agricultural market have seasonal demand, and that demand from the energy segment is

influenced by the prices of natural gas and coal. *** characterized U.S. NOES customers as

 

21 Conference transcript, p. 47 (Jones), and petitioner’s postconference brief, pp. 45‐46. 22 Petitioner stated that new Department of Energy efficiency requirements for small transformers

will go into effect in January 2016, and that these requirements will effectively eliminate NOES from that

demand segment. Petitioner described this segment as not a “major part” of its business. Conference

transcript, pp. 26 and 51 (Pfeiffer).
II‐11

“pushing the envelope” for increased efficiency more than customers in Europe and Asia,

resulting in U.S. demand being particularly strong for higher‐grade NOES.  

*** and 15 importers indicated that there had not been any changes in the business

cycles or conditions of competition for NOES since January 1, 2010.  Five importers indicated

that there had been changes, describing “aggressive pricing” of product from Asia; increased

competition on quality, such as lower core loss; increased U.S. electric vehicle production; and

decreased demand from purchasers offshoring production due to the high U.S. cost of NOES.  

Apparent consumption

Apparent U.S. consumption of NOES increased over *** percent from 2010 to 2011,

then fell almost *** percent from 2011 to 2012, and was more than *** percent lower in

January‐June 2013 than January‐June 2012.  

Demand trends

U.S. producers described *** U.S. demand for NOES since 2010, while importers were

split on whether U.S. demand was increasing or fluctuating (table II‐3). Petitioner described

NOES demand as following general U.S. economic growth as well as trends in certain specific

end use markets such as large motors for mining equipment and locomotives.23

Table II-3 

NOES: Firms’ responses regarding U.S. demand, by number of responding firms 

* * * * * * *

U.S. producer *** indicated that U.S. demand had decreased since January 1, 2010 due

to lower demand from the mining, locomotive, and industrial segments.  It attributed lower

demand from those segments to macroeconomic conditions.  U.S. producer *** stated that

NOES demand had fluctuated with no clear trend. At the conference, AK Steel placed emphasis

on lower demand from the mining segment (in which NOES is used in motors in mining

equipment) as a driver for lower NOES demand, and forecast no improvement in this area.24 In

its postconference brief, petitioner ***.25

Among importers, those describing increased U.S. demand attributed the increase to

recovery from the recession in 2009 and to new production of electric vehicles.  Chinese

producer Baosteel indicated that it anticipates higher U.S. demand for NOES, especially for

lower core loss, thinner gauge NOES.26 Those describing decreased demand attributed the

decrease to weakness in the broader economy. At the staff conference, Metallia also described

 

23 Petitioner’s postconference brief, responses to staff questions, p. 6.

24 Conference transcript, p. 42 (Jones).

25 Petitioner’s postconference brief, responses to questions, pp. 6‐7, and staff interview with ***.

26 CISA’s postconference brief, exhibit 1.
II‐12

a U.S. producer exiting the U.S. industry in 2004, in part because downstream customers were

moving production to Asia and Mexico.27 Similarly, China Steel named *** as downstream

producers that had exited the U.S. market and opened plants in China and/or Mexico. It

continued that, with copper and aluminum prices the same globally, many NOES users compete

based on the cost of steel.28 CDW stated that lower natural gas prices had led to reduced

demand from the non‐gas electrical energy applications in which NOES is used, as well as

making it more cost effective to anneal CRML.29 (See Part V for more information on natural gas

prices).

*** indicated that foreign demand had been decreasing since 2010 due to decreased

demand from Europe and China. *** added that demand in Asian countries had diminished as

infrastructure projects were finished. However, a plurality of importers described foreign

demand for NOES as increasing, citing the electrification of developing economies, steady

growth in demand from Asia, new production of electric vehicles, and recovery from the recent

economic downturn. At the conference, Metallia noted that an important element of global

demand for NOES is compressors for refrigerators, and as refrigerator use has expanded in the

developing world, so has the use of NOES.30

Substitute products

Substitutes for NOES are likely limited, depending on how substitutable NOES and CRML

are.  *** and 17 importers reported that there were no substitutes. Six importers did name

substitutes.  Three named CRML as a substitute in laminations, transformers, and motors, with

*** noting that CRML could substitute for semiprocessed NOES but not fully processed NOES.  

Two named GOES and one named thin‐gauge NOES as a substitute in motors and transformers.  

*** described CRML as a substitute for NOES at up to the highest NOES grades, and stated that

some of its purchasers had told it that they switch from NOES to CRML if NOES prices rise. ***

continued that for some high‐grade NOES applications, GOES may be a substitute.

Three of the importers that named substitutes stated that changes in the price of

substitutes had not affected the price of NOES. *** noted that thin‐gauge NOES (of less than

0.2 mm) is used for enhanced machine performance, and is much more expensive than NOES.

However, two importers that named GOES as a substitute, and one that named CRML as a

substitute, stated that changes in substitute prices had affected NOES prices. Among these, ***

elaborated that, as GOES prices increased, some GOES users switch to NOES.  

In the conference and in their briefs, parties presented different views of how much

CRML can substitute for NOES. Petitioner described NOES and CRML as made using different

production methods, having different surfaces, and used in different applications.  Metallia

described CRML as a lower‐cost substitute for many grades of NOES.31 While it was reluctant to

 

27 Conference transcript, p. 97 (Weinstein).

28 China Steel’s Postconference brief, p. 2.

29 Conference transcript, p. 105 (McPhie).

30 Conference transcript, p. 135 (Weinstein).

31 Conference transcript, pp. 95‐97 (Weinstein).
II‐13

make an exact estimate due to lack of documentation, it stated that CRML could have taken

between 15 and 30 percent of the U.S. market for NOES.32 China Steel indicated that CRML

began competing with NOES approximately 15 years ago, and the competition has

“accelerated” more recently.33 See Part I for more on NOES and CRML.

SUBSTITUTABILITY ISSUES

The degree of substitution between domestic and imported NOES depends upon such

factors as relative prices, quality, and conditions of sale. Producers and importers disagreed on

how interchangeable U.S. and subject NOES are. Some importers listed particular subject

imports that they stated were available in limited quantites from U.S. producers, but a small

majority of responding importers usually indicated that U.S. and imported NOES were at least

frequently interchangeable. There is at least some overlap in purchasers between U.S.

producers and importers. Based on these and other available data, staff believes that there is

moderate‐to‐high degree of substitutability between domestically‐produced NOES and NOES

imported from subject sources.  

Lead times

NOES is primarily produced to order.  Among U.S. producers, *** reported that ***

percent of its 2012 sales of NOES were produced‐to‐order, with a lead time of ***.  ***. ***

reported that *** percent of its sales were produced‐to‐order, with a lead time of 42 days.

Among importers, 74.4 percent of all importers’ 2012 sales were produced to order,  

with 25.6 percent from the importers’ U.S. inventory. Importers of NOES from most countries

had most of their sales produced to order, except importers of NOES from Sweden, which had

the majority of their sales from U.S. inventory. Most importers reported lead times of 90‐180

days for product produced‐to‐order. At the conference, Metallia stated that product from

Taiwan has a lead time of five months.34

Purchasers

Petitioner described purchasers as either end users in motors and generators (and to a

lesser extent, low voltage transformers) or as lamination stampers or service centers, which

process and/or distribute product to the same end use sectors.35  

Producers and importers were asked to name their 10 largest customers in 2012.  ***

included ***. *** included ***.  All of these firms except *** were also named by at least one

importer.  Importers also named other firms not listed by producers.  

 

32 Conference transcript, pp. 147‐148 (Weinstein), 149 (Mendoza).

33 China Steel’s postconference brief, p. 2.

34 Conference transcript, p. 98 (Weinstein).

35 Conference transcript, p. 51 (Pfeiffer).
II‐14

Petitioner described qualification of NOES at purchasers as usually taking “a matter of

weeks.”36 Metallia described qualification for NOES as “rigorous” and involving testing the

NOES in the purchaser’s application.37 Baosteel, ThyssenKrupp Europe, and ThyssenKrupp

North America described qualification as taking a year to a year‐and‐a‐half.38

Comparison of U.S.‐produced and imported product

Petitioner described NOES as competing in the U.S. market on the basis of price, with

sales sometimes lost over price differences of “pennies per pound.”  It stated that most NOES

sold in the U.S. market is warranted to meet ASTM specifications, and so is highly

interchangeable among sources. 39 On the other hand, importers often described their products

as not substitutable for products from AK Steel.

In order to determine whether U.S.‐produced NOES can generally be used in the same

applications as imports from China, Germany, Japan, Korea, Sweden, and Taiwan, U.S.

producers and importers were asked whether the products can “always,” “frequently,”

“sometimes,” or “never” be used interchangeably. As shown in table II‐4, producers described

NOES from various sources as *** interchangeable, while importers were more likely to

describe NOES from various sources as “frequently” or “sometimes” interchangeable.

Table II-4 

NOES: Perceived interchangeability between NOES produced in the United States and in other 

countries, by country pair 

* * * * * * * 

In additional comments, importers often described products that they imported from

subject sources, and that they stated that U.S. producers did not produce. For example, ***

stated that grades lower than JIS50A470 and those higher than M15 were not available, or

were available only in limited quantities, from U.S. producers. *** described similar issues. ***

noted that some customers request NOES from specific Japanese mills. (*** also stated that

some customers request product from specific mills, but did not indicate from which

countries]). *** stated that it has developed some of its NOES to meet the specifications of

purchaser ***. *** described other NOES not commercially competitive with *** product for

this purchaser.40 *** stated that its *** NOES is DFARS compliant41 and designed to be used by

 

36 Conference transcript, pp. 23‐24 (Pfeiffer).   37 Conference transcript, p. 156 (Weinstein).

38 CISA’s postconference brief, exhibit 1, and ThyssenKrupp’s postconference brief, answer to staff

question 4.

39 Conference transcript, pp. 23‐24 (Pfeiffer).   40 See also ***.
II‐15

the customer without further processing, limiting its competition with other NOES. *** stated

that, because the electric vehicle motor was developed in Japan, the NOES that the motor uses

was also developed by Japanese producer *** to particular specifications, and is not

interchangeable with other NOES. Additionally, *** stated that Chinese NOES often has a

performance equivalent to Japanese or Korean NOES, but that customers may prequalify the

Chinese material.  

Producers and importers were also asked to assess how often differences other than

price were significant in sales of NOES from the United States, subject, or nonsubject countries.

As seen in table II‐5, producers described NOES from different sources as *** different in

factors other than price, while importers expressed mixed assessments of how often

differences other than price were significant, but rarely described such differences as “never”

significant.

Table II-5 

NOES: Significance of differences other than price between NOES produced in the United States 

and in other countries, by country pair 

* * * * * * * 

In additional comments, *** stated that, for some types of NOES, product from the

United States and combinations involving product from all subject countries are preferred.  For

example, it cited U.S. and Chinese 35 mm NOES as having “very good” core loss and high

permeability in the direction of rolling. *** stated that foreign ability to produce NOES products

not produced by the U.S. producer was a reason why factors other than price could be

significant in sales of NOES. *** stated that U.S. producers are often “very reluctant” to

produce lower grades of NOES. *** stated that its imported NOES’ (from ***) service, short

lead times, and consistent quality make it a preferred product for purchasers. Other importers

reiterated their comments on interchangeability.

                                                            

(...continued) 41 DFARS stands for Defense Federal Acquisition Regulation Supplement, regulations for Department

of Defense purchasing.  See https://www.federalregister.gov/defense‐federal‐acquisition‐regulation‐

supplement‐dfars‐ .
 
III-1

PART III: U.S. PRODUCERS’ PRODUCTION, SHIPMENTS, AND 

EMPLOYMENT

The Commission analyzes a number of factors in making injury determinations (see 19 

U.S.C. §§ 1677(7)(B) and 1677(7)(C)). Information on the subsidies was presented in Part I of

this report and information on the volume and pricing of imports of the subject merchandise is 

presented in Part IV and Part V. Information on the other factors specified is presented in this 

section and/or Part VI and (except as noted) is based on the questionnaire responses of two

firms that accounted for the all of U.S. production of NOES during 2012.

U.S. PRODUCERS

The Commission received U.S. producer questionnaires from two firms, AK Steel and 

Nucor.1 These two firms are believed to represent all of U.S. production of NOES. AK Steel, 

which accounted for *** percent of U.S. production of NOES in 2012, is a wholly-owned 

subsidiary of AK Steel Holding Corporation and is publicly traded on the New York Stock 

Exchange.

AK Steel is a leading producer of NOES.

2 To produce NOES, AK Steel utilizes its electric 

arc furnace at its facility in Butler, Indiana to melt and cast cold-rolled or hot-rolled steel with 

the desired chemistries. The finishing of the production processes for all of AK Steel’s NOES 

takes place at its facility in Zanesville, Ohio, whether it is a semiprocessed or fully processed 

product.3 AK Steel sells NOES in both wide coil and slit form. During the period, roughly ***

percent of AK Steel’s shipments were in wide coils.4 Nucor reported producing NOES at its 

facilities in Crawfordsville, IN.

Table III-1 lists U.S. producers of NOES, positions on the petition, their production 

locations, and shares of total production in 2012. 

 

1 Two firms, ArcelorMittal and U.S. Steel, reported that they have not produced NOES since January 

1, 2010. Neither AK Steel nor Nucor are related to firms that are engaged in importing NOES from 

subject countries into the United States. Neither firm is related to firms that are engaged in exporting 

NOES from the subject countries to the United States nor are they related to any firms, either domestic 

or foreign, that are engaged in the production of NOES. 2 Conference transcript, p. 17 (Peterson).

3 AK Steel’s Butler, IN facility produces a finished GOES product, but it does not produce a 

semiprocessed or fully processed NOES product. Conference transcript, pp. 17-18 (Peterson). 4 Petitioner’s postconference brief, Answer to staff questions, p. 9.
III-2

Table III-1 

NOES: U.S. producers of NOES, their positions on the petition, production locations, production, 

and shares of reported production, 2012

Firm Position on orders U.S. production locations

Share of production 

(percent)

AK Steel Petitioner Butler, PA and Zanesville, OH ***

Nucor *** Crawfordsville, IN ***

Total 100.0

Source: Compiled from data submitted in response to Commission questionnaires.

When asked to indicate whether their firm has experienced any changes in relation to 

the production of NOES since January 1, 2010, AK Steel reported ***. Nucor reported that ***. 

When asked to describe the constraints that set limits on the their firm’s production of NOES 

and its ability to shift production capacity between products, AK Steel and Nucor indicated ***.

AK Steel reported the production of GOES, while Nucor reported the production of ***

using the same equipment, machinery, and workers used in the production of NOES. Data 

concerning U.S. producers’ overall capacity and production data with regard to these products 

are presented in table III-2.5

Table III-2

NOES: U.S. producers’ overall capacity and production of products on the same equipment as 

NOES, 2010-12, January-June 2012, and January-June 2013

* * * * * * *

 

5 AK Steel reported that *** percent of its overall production was accounted for by GOES and the 

remaining *** percent was accounted for by NOES in 2012. Nucor reported that *** percent of its 

overall production was accounted for by *** and the remaining *** percent was accounted for by NOES 

in 2012.
III-3

U.S. PRODUCTION, CAPACITY, AND CAPACITY UTILIZATION

Table III-3 presents U.S. producers’ production, capacity, and capacity utilization. U.S. 

production capacity *** throughout the period. Production of NOES reported by U.S. firms 

increased by *** percent between 2010 and 2011, but decreased by *** between 2011 and 

2012. Capacity utilization decreased by *** percentage points between 2010 and 2012 and was 

*** percent lower in interim 2013 compared to interim 2012.

Table III-3

NOES: U.S. producers’ production, capacity, and capacity utilization, 2010-2012, January-June 

2012, and January-June 2013

 * * * * * * *

U.S. PRODUCERS’ U.S. SHIPMENTS AND EXPORTS

Table III-4 presents U.S. producers’ U.S. shipments, export shipments, and total 

shipments.U.S. shipments of NOES increased by *** percent between 2010 and 2011, but 

decreased by *** percent between 2011 and 2012 and were *** percent lower in interim 2013 

compared to interim 2012. Export shipments, which accounted for *** percent of total 

shipments in 2012, decreased by *** percent between 2010 and 2012 and were *** percent 

lower in interim 2013 compared to interim 2012.6 U.S. firms were asked to report separately, 

their U.S. shipments of semiprocessed and fully processed NOES in 2012. AK Steel reported 

that *** percent of its 2012 U.S. commercial shipments consisted of fully processed NOES and 

*** percent consisted of semiprocessed NOES. Nucor reported that *** percent of its 2012 U.S. 

commercial shipments consisted of fully processed NOES and *** percent of its 2012 U.S. 

commercial shipments consisted of semiprocessed NOES.

Table III-4

NOES: U.S. producers’ U.S. shipments, exports shipments, and total shipments, 2010-2012, 

January-June 2012, and January-June 2013

* * * * * * *

 

U.S. PRODUCERS’ INVENTORIES

Table III-5 presents U.S. producers’ end-of-period inventories and the ratio of these 

inventories to U.S. producers’ production, U.S. shipments, and total shipments over the period 

examined. U.S. producers’ inventories decreased between 2010 and 2012 and were higher in 

 

6 Principal export markets identified include ***. 
III-4

interim 2013 compared to interim 2012. Ratios of inventory to U.S. production ranged from ***

percent to *** percent over the period.7

Table III-5

NOES: U.S. producers’ inventories, 2010-2012, January-June 2012, and January-June 2013

 

* * * * * * *

U.S. PRODUCERS’ IMPORTS AND PURCHASES

No U.S. producers reported imports or purchases of NOES during the period examined. 

U.S. EMPLOYMENT, WAGES, AND PRODUCTIVITY

Table III-6 shows U.S. producers’ employment-related data during the period 

examined.8 As detailed in table III-6, the number U.S. production and related workers (“PRWs”) 

increased irregularly between 2010 and 2012, but was lower in interim 2013 than in interim 

2012. In March 2012, AK Steel reported the ratification of a three-year labor agreement with 

the UAW covering about 185 hourly production and maintenance workers at its Zanesville, Ohio

facility and a four-year labor agreement covering about 1,250 hourly production and 

maintenance employees at its Butler, Pennsylvania facility. 

Table III-6

NOES: Average number of production and related workers, hours worked, wages paid to such 

employees, hourly wages, productivity, and unit labor costs, 2010-2012, January-June 2012, and 

January-June 2013

* * * * * * *

 

7 Nucor reported that ***. 8 “UAW members ratify early labor agreement for Butler Works,” 

http://www.aksteel.com/news/press_release.aspx?doc_id=919, and “UAW members ratify early labor 

agreement for Zanesville Works,” 

http://www.aksteel.com/news/press_release.aspx?doc_id=897&year=2012, retrieved November 6, 

2013.
IV‐1

PART IV: U.S. IMPORTS, APPARENT U.S. CONSUMPTION, AND MARKET

SHARES

U.S. IMPORTERS

The Commission issued importer questionnaires to 33 firms believed to be importers of

NOES.1 Usable questionnaire responses were received from 25 companies,2 representing 87.4

percent of total subject imports (76.2 percent of imports from China, 108.5 percent of imports

from Germany, 71.8 percent of imports from Japan, 99.3 percent of imports from Korea, 99.2

percent of imports from Sweden, and 90.1 percent of imports from Taiwan) in 2012.3  

Table IV‐1 lists all responding U.S. importers of NOES, their headquarters, the countries

they import from, and their shares of subject U.S. imports in 2012. *** reported entering and

withdrawing NOES from bonded warehouses. *** importing NOES under the Temporary

Importation Under Bond program.4

Table IV-1 

NOES: U.S. importers, headquarters, source of imports, share of imports, 2012 

Firm Headquarters Source(s) of imports 

Share of 

subject 

imports 

(percent) 

Angang America East Brunswick, NJ *** ***

Aperam New Providence, NJ *** ***

ArcelorMittal America Chicago, IL *** ***

Baosteel America Montvale, NJ *** ***

CDW America Cleveland, OH *** ***

Cogent Power Burlington, ON *** ***

Daewoo America Teaneck, NJ *** ***

Felchar Manufacturing Binghampton, NY *** ***

JFE Shoji America Long Beach, CA *** ***

Kanematsu America New York, NY *** ***

Table continued on next page.

 

1 The Commission issued questionnaires to those firms that, based on a review of data provided by

U.S. Customs and Border Protection (“Customs”), may have accounted for more than *** percent of

total imports under HTS subheadings 7225.19.00, 7226.19.10, and 7226.19.90.     2 The following firms reported that they had not imported NOES from any country at any time since

January 1, 2010: ***.   3 Coverage was calculated based on official Commerce import statistics compared to the quantity of

imports, in short tons, reported in questionnaire data in 2012 (14.1 million short tons for China, 9.6

million short tons for Germany, 18.5 million short tons for Japan, 7.3 million short tons for Korea, 9.4

million short tons for Sweden, and 17.1 million short tons for Taiwan). 4 ***. Email from ***, November 11, 2013. ***. Email from ***, November 14, 2013.
IV‐2

Table IV-1—Continued 

NOES: U.S. importers, headquarters, source of imports, share of imports, 2012 

Magcor Dover, DE *** ***

Marubeni-Itochu America New York, NY *** ***

Marubeni-Itochu Canada Burnaby, BC *** ***

Metal One America Smyma, TN *** ***

Metallia Fort Lee, NJ *** ***

Mitsui New York, NY *** ***

National Material Arnold, PA *** ***

POSCO America Fort Lee, NJ *** ***

SteelSummit New York, NY *** ***

Sujani Bernardsville, NJ *** ***

Sumitomo America Rosemont, IL *** ***

Tempel Steel Park Ridge, IL *** ***

ThyssenKrupp Europe Duisburg, Germany *** ***

ThyssenKrupp North America Southfield, MI *** ***

Voestalpine Houston, TX *** ***

Total 100.0

1 *** submitted an importer questionnaire; however, in later correspondence with staff, the firm

indicated that it was not the importer of record for “most” of the material that is sold. On the basis of

that statement, staff has not used *** import data in order to avoid double counting. See email from

***, November 7, 2013.

Source: Compiled from data submitted in response to Commission questionnaires. 

Of the responding U.S. importers, a number of firms reported being related to firms that

are engaged in the production of NOES or being related to firms engaged in importing or

exporting NOES. A list of these firms is presented in table IV‐2.  

Table IV-2 

NOES: Related U.S. importers 

* * * * * * * 

U.S. IMPORTS  

Table IV‐3 presents data for U.S. imports of NOES. U.S. imports of NOES from subject

sources accounted for at least 91.2 percent of total U.S. imports over the period. In 2012, Japan

was the largest subject source of U.S. imports of NOES, followed by Taiwan and China. Import

volume trends among the countries varied between 2010 and 2012. Between 2010 and 2012,

the volume of imports of NOES from China, Sweden, and Taiwan increased, while the volume of
IV‐3

imports of NOES from Germany and Japan decreased.5 Overall, the quantity of imports from

subject sources increased by 36.9 percent between 2010 and 2012, but was 36.7 percent lower

in interim 2013 compared to interim 2012.

U.S. imports of NOES from nonsubject sources accounted for between 4.2 percent and

8.8 percent of total U.S. imports over the period. France and Australia were the two largest

nonsubject sources of U.S. imports of NOES in 2012, accounting for the vast majority of

nonsubject imports.  

Table IV-3 

NOES: U.S. imports, by source, 2010-12, January-June 2012, and January-June 2013 

Item 

Calendar year January-June 

2010 2011 2012 2012 2013 

 Quantity (short tons) 

China 8,275 16,401 14,071 7,394 8,217

Germany 10,831 14,385 9,568 5,852 3,795

Japan 20,124 22,747 18,540 11,323 6,915

Korea 5,267 6,880 7,331 4,062 1,357

Sweden 4,235 8,599 9,359 4,979 3,559

Taiwan 6,776 5,203 17,136 8,201 2,637

 Subtotal, subject 55,507 74,215 76,006 41,812 26,481

All others 3,559 7,151 6,242 2,956 1,168

 Total U.S. imports 59,066 81,366 82,248 44,768 27,648

 Value (1,000 dollars)

1

China 7,642 19,702 15,400 8,508 7,912

Germany 12,372 19,492 11,224 6,944 4,163

Japan 22,816 29,889 23,625 14,517 8,535

Korea 5,526 7,605 6,830 3,941 1,311

Sweden 6,595 14,467 15,394 8,359 5,283

Taiwan 7,929 6,459 18,231 8,945 2,485

 Subtotal, subject 62,879 97,615 90,704 51,213 29,688

All others 4,640 11,485 8,066 4,003 1,621

 Total U.S. imports 67,520 109,101 98,770 55,216 31,309

Table continued on next page.

 

5 Between 2010 and 2012, U.S. imports of NOES from: China increased by 70.1 percent; Sweden

increased by 121.0 percent; and Taiwan increased by 152.9 percent. Between 2010 and 2012, U.S.

imports of NOES from: Germany and Japan decreased by 11.7 percent and 7.9 percent, respectively.  
IV‐4

Table IV-3--Continued

NOES: U.S. imports, by source, 2010-12, January-June 2012, and January-June 2013 

Item 

Calendar year January-June 

2010 2011 2012 2012 2013 

 Unit value (per short ton) 

China $924 $1,201 $1,094 $1,151 $963

Germany 1,142 1,355 1,173 1,186 1,097

Japan 1,134 1,314 1,274 1,282 1,234

Korea 1,049 1,105 932 970 966

Sweden 1,557 1,682 1,645 1,679 1,484

Taiwan 1,170 1,242 1,064 1,091 942

 Average, subject 1,133 1,315 1,193 1,225 1,121

All others 1,304 1,606 1,292 1,354 1,388

 Average, total imports 1,143 1,341 1,201 1,233 1,132

 Share of quantity (percent) 

China 14.0 20.2 17.1 16.5 29.7

Germany 18.3 17.7 11.6 13.1 13.7

Japan 34.1 28.0 22.5 25.3 25.0

Korea 8.9 8.5 8.9 9.1 4.9

Sweden 7.2 10.6 11.4 11.1 12.9

Taiwan 11.5 6.4 20.8 18.3 9.5

 Subtotal, subject 94.0 91.2 92.4 93.4 95.8

All others 6.0 8.8 7.6 6.6 4.2

 Total U.S. imports 100.0 100.0 100.0 100.0 100.0

 Share of value (percent) 

China 11.3 18.1 15.6 15.4 25.3

Germany 18.3 17.9 11.4 12.6 13.3

Japan 33.8 27.4 23.9 26.3 27.3

Korea 8.2 7.0 6.9 7.1 4.2

Sweden 9.8 13.3 15.6 15.1 16.9

Taiwan 11.7 5.9 18.5 16.2 7.9

 Subtotal, subject 93.1 89.5 91.8 92.8 94.8

All others 6.9 10.5 8.2 7.2 5.2

 Total U.S. imports 100.0 100.0 100.0 100.0 100.0

 

1

 Landed, duty-paid. 

Note.—Because of rounding, figures may not add to the totals shown. 

Source: Compiled from data submitted in response to Commission questionnaires. 
IV‐5

NEGLIGIBILITY

The statute requires that an investigation be terminated without an injury

determination if imports of the subject merchandise are found to be negligible.6 Negligible

imports are generally defined in the Tariff Act of 1930, as amended, as imports from a country

of merchandise corresponding to a domestic like product where such imports account for less

than 3 percent of the volume of all such merchandise imported into the United States in the

most recent 12‐month period for which data are available that precedes the filing of the

petition or the initiation of the investigation. However, if there are imports of such merchandise

from a number of countries subject to investigations initiated on the same day that individually

account for less than 3 percent of the total volume of the subject merchandise, and if the

imports from those countries collectively account for more than 7 percent of the volume of all

such merchandise imported into the United States during the applicable 12‐month period, then

imports from such countries are deemed not to be negligible.7 Imports from each subject

country and its share of total imports are presented in table IV‐4.

Table IV-4 

NOES: U.S. imports and shares of total imports, by sources, August 2012-July 2013 

Country 

Imports 

(short tons) 

Share of total imports 

(percent) 

China 14,162 22.4

Germany 7,470 11.8

Japan 14,056 22.2

Korea 3,542 5.6

Sweden 7,362 11.6

Taiwan 12,863 20.3

 Subtotal (subject) 59,455 93.9

 All others (nonsubject) 3,875 6.1

 Total 63,330 100.0

Source: Compiled from official Commerce Statistics, HTS numbers 7225.19.00, 7226.19.10, and 

7226.19.90 

 

6 Sections 703(a)(1), 705(b)(1), 733(a)(1), and 735(b)(1) of the Act (19 U.S.C. §§ 1671b(a)(1),

1671d(b)(1), 1673b(a)(1), and 1673d(b)(1)). 7 Section 771 (24) of the Act (19 U.S.C § 1677(24)).
IV‐6

CUMULATION CONSIDERATIONS  

In assessing whether imports should be cumulated, the Commission determines

whether U.S. imports from the subject countries compete with each other and with the

domestic like product and has generally considered four factors: (1) fungibility, (2) presence of

sales or offers to sell in the same geographical markets, (3) common or similar channels of

distribution, and (4) simultaneous presence in the market. Issues concerning fungibility,

geographical markets, and channels of distribution are addressed in Part II of this report.  

Petitioner argues that imports from all subject sources should be cumulated because

the record indicates more than a reasonable overlap in competition and satisfies the statutory

requirement mandating cumulation in the Commission’s evaluation of material injury and the

Commission’s evaluation of threat of material injury.8 Respondents from China, Germany,

Japan, and Sweden argue that for the purposes of the Commission’s threat analysis, imports

from China, Germany, Japan, and Sweden should be decumulated.9

Official Commerce statistics show that the majority of U.S. imports of NOES from China,

Korea, and Taiwan entered the United States through New Orleans; the majority of U.S. imports

from NOES from Germany entered the United States through Philadelphia, PA; Cleveland, OH;

and Savannah, GA; and the majority of U.S. imports of NOES from Japan and Sweden entered

through New Orleans, LA and Houston‐Galveston, TX. Official Commerce statistics also indicate

that imports of NOES from Germany, Japan, and Sweden were entered every month during the

period of investigation; imports of NOES from China and Taiwan entered the United States in

every month but one and imports of NOES from Korea entered the United States in 36 of the 42

months.10  

APPARENT U.S. CONSUMPTION  

Table IV‐5 presents data on apparent U.S. consumption for NOES over the period

examined. As detailed in table IV‐5, apparent U.S. consumption, by quantity, increased by ***

percent between 2010 and 2011, before decreasing *** between 2011 and 2012. Apparent U.S.

consumption was *** percent lower in interim 2013 than in interim 2012. U.S. producers’ U.S.

shipment levels were ***, increasing *** percent between 2010 and 2011 and decreasing ***

between 2011 and 2012. U.S. producers’ U.S. shipments were *** percent lower in interim

2013 than in interim 2012.   

 

8 Petitioner’s postconference brief, p. 19 and 34.

9 Baoshan’s postconference brief, p. 7. ThyssenKrupp’s postconference brief, p. 1. Conference

transcript, p. 102 (LaFrankie) and p. 106 (McPhie); Japanese respondents’ postconference brief, p. 42;

Conference transcript, p. 116 (Kaufmann).   10 Official Commerce statistics, HTS subheadings 7225.19.00, 7226.19.10, and 7226.19.90.
IV‐7

Table IV-5 

NOES: U.S. shipments of domestic product, U.S. imports, by sources, and apparent U.S. 

consumption, 2010-12, January-June 2012, and January-June 2013 

 Calendar year January-June 

Item 2010 2011 2012 2012 2013 

 Quantity (short tons) 

U.S. producers' shipments *** *** *** *** ***

U.S. imports from-- 

 China 8,275 16,401 14,071 7,394 8,217

 Germany 10,831 14,385 9,568 5,852 3,795

 Japan 20,124 22,747 18,540 11,323 6,915

 Korea 5,267 6,880 7,331 4,062 1,357

 Sweden 4,235 8,599 9,359 4,979 3,559

 Taiwan 6,776 5,203 17,136 8,201 2,637

 Subtotal, subject sources 55,507 74,215 76,006 41,812 26,481

 All other sources 3,559 7,151 6,242 2,956 1,168

 Total imports 59,066 81,366 82,248 44,768 27,648

Apparent consumption *** *** *** *** ***

 Value ($1,000) 

U.S. producers' shipments *** *** *** *** ***

U.S. imports from-- 

 China 7,642 19,702 15,400 8,508 7,912

 Germany 12,372 19,492 11,224 6,944 4,163

 Japan 22,816 29,889 23,625 14,517 8,535

 Korea 5,526 7,605 6,830 3,941 1,311

 Sweden 6,595 14,467 15,394 8,359 5,283

 Taiwan 7,929 6,459 18,231 8,945 2,485

 Subtotal, subject sources 62,879 97,615 90,704 51,213 29,688

 All other sources 4,640 11,485 8,066 4,003 1,621

 Total imports 67,520 109,101 98,770 55,216 31,309

Apparent consumption *** *** *** *** ***

 

Source: Compiled from data submitted in response to Commission questionnaires and from official 

statistics of the U.S. Department of Commerce. 

U.S. MARKET SHARES  

U.S. market share data are presented in table IV‐6. As detailed below, U.S. producers’

market share, by quantity, decreased by *** percentage points between 2010 and 2012 and

was *** percentage points higher in interim 2013 than in interim 2012.
IV‐8

Table IV-6 

NOES: Apparent U.S. consumption and market shares, 2010-12, January-June 2012, and JanuaryJune 2013 

* * * * * * * 

 

RATIO OF IMPORTS TO U.S. PRODUCTION

Table IV‐7 presents data on the ratio of U.S. imports to U.S. production. As detailed

below, the ratio of imports to U.S. production increased from *** percent in 2010 to ***

percent in 2012. The ratio was *** percent in interim 2013 compared with *** percent in

interim 2012.

Table IV-7 

NOES: Ratio of U.S. imports to U.S. production, 2010-12, January-June 2012, and January-June 

2013

 Calendar year January-June 

Item 2010 2011 2012 2012 2013 

 Quantity (short tons) 

U.S. production *** *** *** *** ***

U.S. imports from: 

 China 8,275 16,401 14,071 7,394 8,217 

 Germany 10,831 14,385 9,568 5,852 3,795 

 Japan 20,124 22,747 18,540 11,323 6,915 

 Korea 5,267 6,880 7,331 4,062 1,357 

 Sweden 4,235 8,599 9,359 4,979 3,559 

 Taiwan 6,776 5,203 17,136 8,201 2,637 

 Subject sources 55,507 74,215 76,006 41,812 26,481 

 All others 3,559 7,151 6,242 2,956 1,168 

Total imports 59,066 81,366 82,248 44,768 27,648 

 Ratio of imports to production (percent) 

U.S. imports from: 

 China *** *** *** *** ***

 Germany *** *** *** *** ***

 Japan *** *** *** *** ***

 Korea *** *** *** *** ***

 Sweden *** *** *** *** ***

 Taiwan *** *** *** *** ***

 Subject sources *** *** *** *** ***

 All others *** *** *** *** ***

Total *** *** *** *** ***

 

Source: Compiled from data submitted in response to Commission questionnaires and from official 

statistics of the U.S. Department of Commerce. 
V‐1

PART V: PRICING DATA

FACTORS AFFECTING PRICES

Raw material costs

Raw materials represented between *** and *** percent of the costs of goods sold for

NOES over 2010 to 2012, making raw material costs a *** factor in the price of NOES.

For U.S. producers, the primary input costs used in manufacturing NOES are for scrap

steel, ferrosilicon, ***, and electricity.1 Scrap steel is currently a much larger cost component

than ferrosilicon. For integrated producers of NOES, such as some subject‐country producers,

iron ore and coking coal would likely be the principal raw material inputs.  ***.

*** described the prices of raw materials used to produce NOES as fluctuating from year

to year.  However, *** added that prices for raw materials have generally increased over the

last three years, and expected those prices to continue to increase into 2014. Importers

generally described iron ore, coking coal, and/or hot‐rolled band as the primary raw materials

for NOES, with some importers adding that prices for these materials had fallen in recent years.

Several other importers described raw material prices as affected by other industrial sectors’

(including those in China) demand for the same raw materials. *** stated that AK Steel had

insulated itself from fluctuations in NOES’ raw material prices because it owns captive supplies

of those raw materials. *** stated that raw materials prices had had little effect on the price of

NOES. On the other hand, Japanese respondents stated that NOES prices had been following

raw material trends.2

Price trends for scrap steel, ferrosilicon, electicity, and natural gas are shown in figure V‐

1.  Prices for scrap steel and ferrosilicon rose in late 2010 or early 2011, and while down

somewhat from early 2011, remain 15 to 20 percent above January 2010 levels.  Natural gas

prices fell from early 2010 to early 2012, but have risen since then.  Natural gas prices remain

nearly 40 percent below January 2010 levels. Aside from seasonal fluctuations, the industrial

price of electricity generally remained at the same level since January 2010.

   

                                                      

1 Conference transcript, p. 62 (Petersen), and and petitioner’s postconference brief, answers to staff

questions, pp. 8‐9. 2 Japanese respondents’ postconference brief, p. 25.
V‐2

Figure V-1 

NOES: Price trends of inputs, January 2010 to September 2013 

Figure continued on next page. 

   
V‐3

Figure V-1—Continued.

NOES: Price trends of inputs, January 2010 to September 2013 
V‐4

U.S. inland transportation costs

*** and 19 importers reported that they typically arrange transportation of NOES to

their customers’ locations, while *** and 2 importers reported that their purchasers arrange

transportation. U.S. producers reported that their U.S. inland transportation costs ranged from

0 (***3

) to 10 percent (***). Importers reported costs of 3 to 8 percent, with importers ***

among those reporting 3 percent and *** among those reporting 7‐8 percent.

PRICING PRACTICES

Pricing methods

U.S. producers and importers4 reported using transaction‐by‐transaction negotiations

and contracts for their sales of NOES, as presented in table V‐1.

Table V-1 

NOES: U.S. producers’ and importers’ reported price-setting methods, by number of responding 

firms1

Method U.S. producers Importers 

Transaction-by-transaction *** 12 

Contract *** 18 

Set price list *** 1 

Other *** 0 

1

 The sum of responses down will not add up to the total number of responding firms as each firm was 

instructed to check all applicable price setting methods employed. Five importers reported both 

transaction-by-transaction negotiations and contracts.

Source: Compiled from data submitted in response to Commission questionnaires.

***.5 6

U.S. producers and importers reported selling the majority of their NOES under short‐

term contracts (up to an including 12 months). As shown in table V‐2, U.S. producers and

importers reported their 2012 U.S. commercial shipments of NOES by type of sale.7

  

                                                      

3 Staff interview with ***. 4 ***.

5 Email from *** November 7, 2013, and petitioner’s postconference brief, answers to staff

questions, pp. 8‐9.

6 *** indicated that it ***. Baosteel, ThyssenKrupp Europe, and ThyssenKrupp North America

indicated that they did not use surcharges. CISA’s postconference brief, exhibit 1, and ThyssenKrupp’s

postconference brief, answer to staff question 6.
V‐5

*** reported that *** short‐term contracts were usually for ***.  Nine importers

reported short term‐contracts of 90 days, and seven additional importers reported short‐term

contracts of 30‐180 days. Only *** reported long‐term contract durations of several years.

For U.S. producers of NOES, short‐term contracts *** price renegotiation and *** meet‐

or‐release provisions.  ***. For importers of subject‐country NOES, short‐term contracts

generally did not allow price renegotiation (***), fixed either price and quantity (*** importers)

or only price (*** importers), and did not have meet‐or‐release provisions (*** importers,

versus *** that did). The *** importers with long‐term contracts described such contracts as

*** price renegotiation, *** meet‐or‐release provisions, and fixing ***.

Table V-2 

NOES: U.S. producers’ and importers’ shares of U.S. commercial shipments by type of sale, 2012 

* * * * * * *

Sales terms and discounts

*** and three importers typically quote prices on an f.o.b. basis, while 19 importers

quote prices on a delivered basis. Twenty‐three importers *** do not offer discounts for their

sales of NOES.  However, *** reported offering quantity discounts and annual volume

discounts. *** and 15 importers reported sales terms of net 30 days, 6 importers reported sales

terms of net 60 days, and two importers reported other terms.

PRICE DATA

The Commission requested U.S. producers and importers to provide quarterly data for

the total quantity and f.o.b. value of the following NOES products shipped to unrelated U.S.

customers during January 2010 to June 2013.8

Product 1.‐‐ M‐19, 0.45‐0.50 mm thickness, fully processed, maximum core loss 2.90

W/kg (1.5T; 50 Hz), 600 mm or more wide, coated.

                                                            

(...continued) 7 As can be seen in the table, the average for all importers was *** percent of 2012 commercial

shipments under short‐term contracts, and importers of NOES from all subject countries except

Sweden had at least *** percent under short‐term contracts.  Importers of Swedish NOES reported ***

percent under long‐term contracts, *** percent short‐term contracts, and the balance as spot sales.  

However, *** reported that its average contract duration for long‐term sales was ***.

8 Importer Metallia and Taiwan producer China Steel stated that all the pricing products compete

with CRML products. China Steel provided a list of what it described as competing CRML products in its

postconference brief. Conference transcript, pp. 95 and 132 (Weinstein), and China Steel’s

postconference brief, exhibit 2.
V‐6

Product 2.‐‐ M‐22, 0.45‐0.50 mm thickness, fully processed, maximum core loss 3.10

W/kg (1.5T; 50 Hz), 600 mm or more wide, coated.

Product 3.‐‐ M‐22, 0.60‐0.65 mm thickness, fully processed, maximum core loss 3.65

W/kg (1.5T; 50 Hz), less than 600 mm wide, coated.

Product 4.‐‐ M‐36, 0.45‐0.50 mm thickness, fully processed, maximum core loss 3.50

W/kg (1.5T; 50 Hz), 600 mm or more wide, coated.

Product 5.— M‐36, 0.60‐0.65 mm thickness, fully processed, maximum core loss 4.10

W/kg (1.5T; 50 Hz), 600 mm or more wide, coated.

Product 6.— M‐36, 0.45‐0.50 mm thickness, fully processed, maximum core loss 3.50

W/kg (1.5T; 50 Hz), less than 600 mm wide, coated.

Product 7.— M‐43, 0.60‐0.65 mm thickness, fully processed, maximum core loss 4.35

W/kg (1.5T; 50 Hz), 600 mm or more wide, coated.

Product 8.— M‐45, 0.60‐0.65 mm thickness, fully processed, maximum core loss 4.80

W/kg (1.5T; 50 Hz), 600 mm or more wide, coated.

One U.S. producer and 17 importers provided usable pricing data for sales of the

requested products, although not all firms reported pricing for all products for all quarters.9

Pricing data reported by these firms accounted for approximately *** percent of U.S.

producers’ shipments of NOES in 2012, *** percent of U.S. shipments of subject imports from

China in 2012, *** percent of U.S. shipments of subject imports from Germany in 2012,10 ***

percent of U.S. shipments of subject imports from Japan in 2012, *** percent of U.S. shipments

of subject imports from Korea in 2012, *** percent of U.S. shipments of subject imports from

Sweden in 2012, and *** percent of U.S. shipments of subject imports from Taiwan in 2012.

Price data for products 1‐8 are presented in tables V‐3 to V‐10 and figure V‐2.  

                                                      

9 Several importers likely supplied value data in thousands of dollars. Staff contacted these firms and

corrected their value data upon confirmation. Two firms, ***, did not reply to staff inquiries. Staff

adjusted their value data by a factor of 1,000.  Additionally, *** submitted ***.  See email from ***,

November 7, 2013.  Additionally, staff has removed one quarter of data from *** in which it reported a

quantity of 1,000 tons and a value of $0, and one quarter of data each from ***.  See emails from ***,

November 8, 2013.

10 ThyssenKrupp Europe and ThyssenKrupp North America stated that their pricing data are

“distorted” because they sell uncoated NOES in master coils rather than slit, resulting in a lower price

product. ThyssenKrupp’s postconference brief, p. 14.
V‐7

Table V-3 

NOES: Weighted-average f.o.b. prices and quantities of domestic and imported product 11

 and 

margins of underselling/(overselling), by quarters, January 2010-June 2013 

* * * * * * * 

Table V-4 

NOES: Weighted-average f.o.b. prices and quantities of domestic and imported product 21

 and 

margins of underselling/(overselling), by quarters, January 2010-June 2013 

* * * * * * * 

Table V-5 

NOES: Weighted-average f.o.b. prices and quantities of domestic and imported product 31

 and 

margins of underselling/(overselling), by quarters, January 2010-June 2013 

* * * * * * * 

Table V-6 

NOES: Weighted-average f.o.b. prices and quantities of domestic and imported product 41

 and 

margins of underselling/(overselling), by quarters, January 2010-June 2013 

* * * * * * * 

Table V-7 

NOES: Weighted-average f.o.b. prices and quantities of domestic and imported product 51

 and 

margins of underselling/(overselling), by quarters, January 2010-June 2013 

* * * * * * *

Table V-8 

NOES: Weighted-average f.o.b. prices and quantities of domestic and imported product 61

 and 

margins of underselling/(overselling), by quarters, January 2010-June 2013 

* * * * * * *

Table V-9 

NOES: Weighted-average f.o.b. prices and quantities of domestic and imported product 71

 and 

margins of underselling/(overselling), by quarters, January 2010-June 2013 

* * * * * * * 

Table V-10 

NOES: Weighted-average f.o.b. prices and quantities of domestic and imported product 81

 and 

margins of underselling/(overselling), by quarters, January 2010-June 2013 

* * * * * * * 
V‐8

Figure V-2 

NOES: Weighted-average prices and quantities of domestic and imported product, by quarters, 

January 2010-June 2013 

* * * * * * * 

Price trends

Prices for NOES pricing products showed mixed trends during January 2010 to June

2013. Table V‐11 summarizes the price trends, by country and by product. As shown in the

table, domestic price changes ranged from a decrease of 28.0 percent to an increase of 10.8

percent during January 2012 to June 2013, while import price changes ranged from a decrease

of 43.9 percent to an increase of 47.1 percent.

Table V-11 

NOES: Summary of weighted-average f.o.b. prices for products 1-8 from the United States and 

subject countries 

* * * * * * * 

Price comparisons

As shown in table V‐12, prices for NOES imported from subject countries were below

those for U.S.‐produced product in 218 of 296 instances; margins of underselling ranged from

0.2 to 49.4 percent. In the remaining 78 instances, prices for NOES from subject countries were

between 0.2 to 68.9 percent above prices for the domestic product.  

Table V-12 

NOES: Instances of underselling/overselling and the range and average of margins, by country, 

January 2010-June 2013 

Source 

Underselling Overselling 

Number 

of 

instances 

Range 

(percent) 

Average 

margin 

(percent) 

Number of 

instances 

Range 

(percent) 

Average 

margin 

(percent) 

China 47 2.6 to 42.7 24.3 1 3.1 to 3.1 3.1 

Germany 50 3.2 to 40.1 18.4 11 1.1 to 17.5 5.8 

Japan 45 0.6 to 23.1 9.2 26 0.4 to 28.3 11.9 

Korea 16 14.7 to 49.4 28.0 1 15.3 to 15.3 15.3 

Sweden 34 0.2 to 38.5 12.6 34 0.2 to 68.9 18.3 

Taiwan 26 2.3 to 30.5 17.2 5 2.7 to 23.6 9.5 

 Total 218 0.2 to 49.4 17.4 78 0.2 to 68.9 13.6 

Source: Compiled from data submitted in response to Commission questionnaires.
V‐9

At the conference, petitioner stated that its customers had told it that subject imports

were underselling its prices by approximately 25 percent. It added that it responded by

lowering prices in 2013.11

LOST SALES AND LOST REVENUE

The Commission requested U.S. producers of NOES to report any instances of lost sales

or revenue they experienced due to competition from imports of NOES from subject countries

since January 2010. Of the two responding U.S. producers, *** reported that *** had to either

reduce prices or roll back announced price increases.12 The *** lost sales allegations totaled

$*** and involved *** short tons of NOES, and the *** lost revenue allegations totaled $***

and involved *** short tons of NOES.13 Staff attempted to contact all named purchasers and a

summary of the information obtained follows in the descriptions below and in tables V‐13 and

V‐14.14

Purchasers named in the lost sales and lost revenue allegations also were asked

whether they shifted their purchases of NOES from U.S. producers to suppliers of NOES from

China, Germany, Japan, Korea, Sweden, and Taiwan since January 2010. In addition, they were

asked whether U.S. producers reduced their prices in order to compete with suppliers of NOES

from those countries.15  

Two of the six responding purchasers (including ***) reported that they had shifted

purchases of NOES from U.S. producers to subject imports since January 2010; one of these

purchasers (***) reported that price was the reason for the shift. *** described the volume of

sales that it shifted due to price as ***. *** stated that it had shifted purchases, but the shift

was due to ***, and not due to price. *** did not indicate whether it had shifted purchases or

not, but did state that it has ***. It continued that ***.

However, four purchasers (including ***) stated that they had not shifted. *** stated

that it had been purchasing ***. *** referenced its extensive comments, summarized below.

Three purchasers (***) reported that U.S. producers had reduced their prices in order to

compete with the prices of subject imports. *** indicated that U.S. producers reduced their ***

in 2013. (*** indicated that they did not know). However, two purchasers (including ***

                                                      

11 Conference transcript, p. 32 (Petersen).

12 ***.

13 In several instances, volumes were supplied for three allegations together. In these cases, staff has

divided the volumes and values equally among the three allegations. 14 In these tables, prices are presented in short tons. In faxes to purchasers, however, prices were

presented in hundredweight, a more commonly‐used measure in the industry. Additionally, several of

the allegations involved ***. See email from ***, and petition, exhibit I‐12.

15 *** did not respond to these questions.
V‐10

reported that U.S. producers had not reduced their prices. *** elaborated that ***. *** added

that ***.

Purchaser comments

***.16 ***

Table V-13 

NOES: U.S. producers’ lost sales allegations 

* * * * * * * 

Table V-14 

NOES: U.S. producers’ lost revenue allegations 

* * * * * * * 

                                                      

16 ***  
VI‐1

PART VI: FINANCIAL EXPERIENCE OF U.S. FIRMS

BACKGROUND

AK Steel and Nucor provided useable financial data on their operations producing NOES.

AK Steel is the petitioner and both firms produced this product in the United States in 2012.1

***. Both firms appear to sell NOES to manufacturers of electrical motors and generators in the

infrastructure and manufacturing markets.2 There is a distinction between AK Steel and Nucor

insofar as ***. For both firms, sales of NOES represents only a *** fraction of the overall

business.3

OPERATIONS ON NOES

Income‐and‐loss data for the two reporting U.S. firms on NOES are presented in table

VI‐1, and are briefly summarized here. Generally speaking, sales quantity declined irregularly

from 2010 to 2012 and was lower in January‐June 2013 than in January‐June 2012. Sales value

rose *** irregularly during the full yearly periods but like sales quantity was *** in interim 2013

than in interim 2012.4 Total cost of goods sold (“COGS”) *** irregularly between the yearly

periods and was *** interim 2013 than in interim 2012. Total selling, general and administrative

(“SG&A”) expenses *** from 2010 to 2012 and were *** in January‐June 2013 than in January‐

June 2012. The combined operating loss increased from 2010 to 2012 and was *** higher in

January‐June 2013 compared with the period one year earlier.5 Income‐and‐loss data are

presented separately for the two U.S. firms in table VI‐2.

 

1 ***. Both firms reported data in each period during 2010‐June 2013. ***. AK Steel provided a ***. 2 AK Steel, 2012 Annual Report and Form 10‐K, p. 32. Much of the discussion on this page of the 10‐K

regarding the electrical steel market is relevant only to GOES, which is used in power transmission and

distribution transformers, and is outside the scope of these investigations.   3 AK Steel’s operations on NOES constitute *** firm’s overall operations. NOES is included in the

segment producing and selling stainless steel products and electrical steel products. The latter category

consists of grades of GOES and NOES, which are both produced as hot‐rolled steel sheet at the AK Steel’s

plant at Butler, Pennsylvania and finished at its plant in Zanesville, Ohio. AK Steel’s total sales were

$5,933.7 million and its operating loss was $128.1 million in 2012. NOES’ operations represent ***

percent of total sales and *** percent of the firm’s overall operating loss. Sales of NOES accounted for

about *** percent, by quantity, of sales of the firm’s shipments of stainless and electrical steels

(segment reporting that includes NOES). AK Steel’s 2012 Annual Report and Form 10‐K, pp. 15 and 17.  

Likewise, NOES constitutes ***. 4 AK Steel’s postconference brief indicates that “***.” Petitioner’s postconference brief, p. 30. 5 In AK Steel’s discussion of 2012 financial results, it stated that “The challenging domestic and global

economic conditions that the Company, and much of the steel industry, have faced since the beginning

of the global recession in 2008 continued in 2012 and had a negative impact on the Company’s financial

performance. . . The Company also continued to experience a decline in electrical steel pricing during

(continued...)
VI‐2

Table VI-1 

NOES: Results of operations of U.S. firms, 2010-12, January-June 2012, and January-June 2013 

* * * * * * * 

Table VI-2 

NOES: Results of operations of U.S. firms, by firm, 2010-12, January-June 2012, and January-June 

2013

* * * * * * * 

Net sales

As may be seen from tables VI‐1 and VI‐2, total sales increased from 2010 to a high in

2011 based on greater volume and average unit value of sales. Total sales declined from 2011

to 2012 as both volume and average unit values were lower. Total net sales were lower in

January‐June 2013 versus the comparable period in 2012 for the same reason.6 As depicted in

table VI‐2, AK Steel ***.7 Both firms’ total net sales include U.S. commercial shipments and

exports.8 Exports ***. The share of exports in total shipments ***. AK Steel’s shipments of

semiprocessed NOES accounted for *** of its total shipments in 2012; Nucor’s shipments of

semiprocessed NOES accounted for *** of its total shipments in that year. 9

Costs/expenses

Total COGS on a value basis and as a ratio to sales *** between 2010 and 2012. While

total COGS were *** in January‐June 2013 than in January‐June 2012, the ratio of COGS to sales

***. As shown in table VI‐2, the ratio of COGS to sales *** between 2010 and 2012. While the

ratio was ***. The average unit value of COGS *** between the full yearly periods and was ***

                                                            

(...continued)

the year, particularly with regard to international sales, as a result of the weak global economic

conditions and increased global production capacity.” AK Steel’s 2012 Annual Report and Form 10‐K, p

16. AK Steel noted that net sales to customers outside the United States also were lower in 2012

compared to 2011. The firm also stated that a majority of revenue from sales outside the United States

is associated with electrical and stainless steel products. Ibid. p. 18.

6 See note 4, earlier in this section of the report. 7 In response to a question from staff, Nucor stated “***. E‐mail to Commission staff from ***,

November 18, 2013.

8 Nucor exported to *** and AK Steel exported to ***.

9 Calculated from the questionnaire responses of ***.
VI‐3

in interim 2013 than in interim 2012. The cost components of COGS ***.10 On the other hand,

***.11

Total SG&A expenses declined *** between 2010 and 2012 and were lower in January‐

June 2013 versus the comparable period in 2012. The dollar value of SG&A expenses is ***, as

depicted in table VI‐2.

Profitability

As shown in table VI‐1, total operating ***. As shown in table VI‐2, ***.12 Net income

before taxes and cash flows followed the trends of operating income or (loss). Only ***.13  

Variance analysis

A variance analysis for the operations of AK Steel and Nucor on NOES is presented in

table VI‐3.14 The information for this variance analysis is derived from table VI‐1. This indicates

that the ***.

 

10 All things being equal, given the ***. 11 Changes in average unit values of sales and raw material costs generally tracked each other

between 2010 and 2012 and between the interim periods. The year‐to‐year difference in the change of

these two values indicates whether the metal spread widened or narrowed (“widened” indicates sales

unit values rose more, or fell less, than the average unit value of raw material costs, whereas

“narrowed” indicates the opposite). The metal spread ***. 12 In its postconference brief, AK Steel reported that ***. Petitioner’s postconference brief, answers

to questions from Commission staff, p. 7.

13 A portion of ***. See e‐mail to Commission staff from ***, November 19, 2013. AK Steel has a

defined benefit pension and medical benefits plan; it “provides noncontributory pension and various

healthcare and life insurance benefits to a significant portion of its employees and retirees.” The

pension plan is not fully funded. The contribution amounts are presented and discussed in the firm’s

2012 Form 10‐K on pages 59‐64. In addition, AK Steel recognized “pension corridor charges” in its annual

report ($268.1 million and $157.3 million in 2011 and 2012, respectively). These are accrued noncash

charges, which reflect unrecognized actuarial net gains or losses that exceed 10% of the larger of

projected benefit obligations or plan assets. For a discussion of this, see AK Steel’s 2012 Form 10‐K, p. 7.

The pension corridor charge was ***. E‐mail to Commission staff from ***, November 19, 2013.  

Nucor makes contributions to a profit sharing and retirement savings plan (termed a “defined

contribution” plan). The firm also has a medical plan covering certain eligible early retirees. See Nucor’s

2012 Annual Report, p. 62.   14 The Commission’s variance analysis is calculated in three parts:  Sales variance, cost of sales

variance (COGS variance), and SG&A expense variance. Each part consists of a price variance (in the case

of the sales variance) or a cost or expense variance (in the case of the COGS and SG&A expense

variance), and a volume variance. The sales or cost/expense variance is calculated as the change in unit

price or per‐unit cost/expense times the new volume, while the volume variance is calculated as the

change in volume times the old unit price or per‐unit cost/expense. Summarized at the bottom of the

(continued...)
VI‐4

Table VI-3 

NOES: Variance analysis on the operations of U.S. firms, 2010-12, January-June 2012, and 

January-June 2013 

* * * * * * * 

CAPITAL EXPENDITURES AND RESEARCH AND DEVELOPMENT EXPENSES

Table VI‐4 presents capital expenditures and research and development (“R&D”)

expenses made by AK Steel and Nucor. AK Steel reported that these generally consisted of a

new highly‐efficient electric arc furnace, a new ladle metallurgy furnace, and several upgrades

of processing equipment at its plants in Butler, Pennsylvania, and Zanesville, Ohio.15 Nucor

reported ***.16

Table VI-4 

NOES: Capital expenditures and research and development expenses of U.S. firms, 2010-12, 

January-June 2012, and January-June 2013 

* * * * * * * 

ASSETS AND RETURN ON INVESTMENT

Table VI‐5 presents data on the total assets and its return on investment (“ROI”) for the

two reporting U.S. firms.17 ROI is a ratio that is calculated by dividing operating income or (loss)

by total assets. ROI followed the trend in operating income or loss, shown earlier in table VI‐1.

                                                            

(...continued)

table, the price variance is from sales; the cost/expense variance is the sum of those items from COGS

and SG&A variances, respectively, and the volume variance is the sum of the volume components of the

net sales, COGS, and SG&A expense variances. The overall volume component of the variance analysis is

generally small.

15 Conference transcript, p. 66 (Schoen).

16 In an e‐mail to Commission staff ***. E‐mail to Commission staff from ***, November 15, 2013. 17 At the conference staff asked AK Steel to define “adequate return.” This question referred to ***.

AK Steel defined it as ***. Petitioner’s postconference brief, answers to questions from Commission

staff, p. 7. By way of illustration of the firm’s cost of capital, in November 2012 AK Steel issued $350

million aggregate principal amount of 8.750% senior secured notes due December 2018; in the same

month it issued $150 million of 5.0% senior unsecured notes due December 2019. Both issuances were

used to repay outstanding borrowings under the firm’s credit facility. The firm has a credit facility of $1.1

billion at a nominal interest rate of 2.3 percent, which expires in 2016. See AK Steel’s annual report, pp.

57. It may be noted that Nucor’s notes due in 2018 have an interest rate of approximately 5.85%. Nucor

also has an unsecured credit facility for up to $1.50 billion in revolving loans based on the credit rating of

the firm’s senior unsecured debt. See Nucor’s 2012 Annual Report, p. 57.
VI‐5

Table VI-5 

NOES: U.S. firms’ total assets and return on investment, 2010-12, January-June 2012, and 

January-June 2013 

* * * * * * * 

CAPITAL AND INVESTMENT

The Commission requested U.S. producers of NOES to describe any actual or potential

negative effects of imports of NOES from China, Germany, Japan, Korea, Sweden, and/or

Taiwan on their firms’ growth, investment, ability to raise capital, development and production

efforts, or the scale of capital investments. The responses of AK Steel and Nucor are shown

below.  

Actual negative effects

AK Steel:  “***.”

Nucor:  “***.”

Anticipated negative effects

AK Steel: “***.” This comment was made with respect to each of the subject countries.   

Nucor:  “***.” This comment was made with respect to each of the subject countries.
 
VII-1

PART VII: THREAT CONSIDERATIONS AND INFORMATION ON

NONSUBJECT COUNTRIES

Section 771(7)(F)(i) of the Act (19 U.S.C. § 1677(7)(F)(i)) provides that—

In determining whether an industry in the United States is threatened 

with material injury by reason of imports (or sales for importation) of the 

subject merchandise, the Commission shall consider, among other 

relevant economic factors1--

(I) if a countervailable subsidy is involved, such information as may be 

presented to it by the administering authority as to the nature of 

the subsidy (particularly as to whether the countervailable subsidy 

is a subsidy described in Article 3 or 6.1 of the Subsidies 

Agreement), and whether imports of the subject merchandise are 

likely to increase,

(II) any existing unused production capacity or imminent, substantial 

increase in production capacity in the exporting country indicating 

the likelihood of substantially increased imports of the subject 

merchandise into the United States, taking into account the 

availability of other export markets to absorb any additional 

exports,

(III) a significant rate of increase of the volume or market penetration of 

imports of the subject merchandise indicating the likelihood of 

substantially increased imports,

(IV)whether imports of the subject merchandise are entering at prices 

that are likely to have a significant depressing or suppressing 

effect on domestic prices, and are likely to increase demand for 

further imports,

(V) inventories of the subject merchandise,

 

1 Section 771(7)(F)(ii) of the Act (19 U.S.C. § 1677(7)(F)(ii)) provides that “The Commission shall 

consider {these factors} . . . as a whole in making a determination of whether further dumped or 

subsidized imports are imminent and whether material injury by reason of imports would occur unless 

an order is issued or a suspension agreement is accepted under this title. The presence or absence of 

any factor which the Commission is required to consider . . . shall not necessarily give decisive guidance 

with respect to the determination. Such a determination may not be made on the basis of mere 

conjecture or supposition.”
VII-2

(VI)the potential for product-shifting if production facilities in the foreign 

country, which can be used to produce the subject merchandise, 

are currently being used to produce other products,

(VII) in any investigation under this title which involves imports of both 

a raw agricultural product (within the meaning of paragraph

(4)(E)(iv)) and any product processed from such raw agricultural 

product, the likelihood that there will be increased imports, by 

reason of product shifting, if there is an affirmative determination 

by the Commission under section 705(b)(1) or 735(b)(1) with 

respect to either the raw agricultural product or the processed 

agricultural product (but not both),

(VIII) the actual and potential negative effects on the existing 

development and production efforts of the domestic industry, 

including efforts to develop a derivative or more advanced version 

of the domestic like product, and

(IX)any other demonstrable adverse trends that indicate the probability 

that there is likely to be material injury by reason of imports (or 

sale for importation) of the subject merchandise (whether or not it 

is actually being imported at the time).2

Information on the nature of the alleged subsidies was presented earlier in this report; 

information on the volume and pricing of imports of the subject merchandise is presented in 

Parts IV and V; and information on the effects of imports of the subject merchandise on U.S. 

producers’ existing development and production efforts is presented in Part VI. Information on 

inventories of the subject merchandise; foreign producers’ operations, including the potential 

for “product-shifting;” any other threat indicators, if applicable; and any dumping in thirdcountry markets, follows. Also presented in this section of the report is information obtained 

for consideration by the Commission on nonsubject countries.

 

2 Section 771(7)(F)(iii) of the Act (19 U.S.C. § 1677(7)(F)(iii)) further provides that, in antidumping 

investigations, “. . . the Commission shall consider whether dumping in the markets of foreign countries 

(as evidenced by dumping findings or antidumping remedies in other WTO member markets against the 

same class or kind of merchandise manufactured or exported by the same party as under investigation) 

suggests a threat of material injury to the domestic industry.”
VII-3

THE INDUSTRY IN CHINA

Table VII-1 presents data provided by Baosteel and Angang, two producers of NOES in 

China. 3 Chinese exports of NOES to the United States, all of which consisted of fully processed 

NOES, accounted for *** percent of U.S. imports of NOES from China in 2012.4 Chinese 

production capacity *** between 2010 and 2012 but ***. Chinese producers’ home market 

shipments accounted for the vast majority (***) percent of their total shipments in 2012. 

Exports of NOES from China to the United States, which accounted for no more than ***

of its total shipments over the period, decreased between 2010 and 2012 and were higher in 

interim 2013 than in interim 2012. Exports to markets other than the United States accounted 

for between *** and *** percent of total shipments over the period.5 Baosteel and Angang 

reported that *** and *** percent of their respective total sales in the most recent fiscal year 

were represented by sales of NOES. *** reported maintaining inventories of NOES in the United 

States since 2010. 

Table VII-1

NOES: Data for producers in China, 2010-2012, January-June 2012, and January-June 2013 

 

* * * * * * *

THE INDUSTRY IN GERMANY

Tables VII-2 present data provided by ArcelorMittal Germany,6 CDW,7 and 

ThyssenKrupp,

8 three producers of NOES in Germany. These firms’ exports to the United States, 

all of which consisted of fully processed NOES, accounted for *** percent of U.S. imports of 

NOES from Germany in 2012. Exports of NOES to the United States accounted for no greater 

than *** percent of German producers’ reported total shipments.9 Based on testimony 

 

3 Baosteel is related to Baosteel America Inc., an importer of NOES in the United States. CISA believes 

that ***. CISA’s postconference brief, p. 6. Angang is related to Angang America, an importer of NOES in 

the United States. Angang ***. 4 CISA argues that official import data with regard to China are inaccurate, citing ***. According to 

official import statistics, imports from China increased by 70.1 percent between 2010 and 2012; ***

over the same period. 5 Principal export markets identified included: ***. 6 ArcelorMittal Germany is related to NOES producers ArcelorMittal Frýdek-Místek (Czech Republic) 

and ArcelorMittal Mediteranee (France) as well as ArcelorMittal America, an importer of NOES in the 

United States. ArcelorMittal Germany reported ***. 7 CDW is related to CDW Services, an importer of NOES in the United States. 

8 ThyssenKrupp is related to ThyssenKrupp Electrical Steel India Private Limited, a producer of NOES 

in India, and ThyssenKrupp Steel North America, an importer of NOES in the United States. 

9 Virtually all (other than a few sample test shipments) of ThyssenKrupp’s exports of NOES to the U.S. 

consist of master coils, which are not slit. ThyssenKrupp’s postconference brief, Answers to staff 

questions, p. 3.
VII-4

presented at the staff conference, exports of NOES from Germany to the United States are 

projected to decrease due of specific developments in customer relationships.10 German 

producers cite EU countries as their principal export markets.11 ArcelorMittal Germany, CDW 

and ThyssenKrupp reported that *** percent, *** percent and *** percent of their respective 

total sales in the most recent fiscal year were represented by sales of NOES. 

When asked to describe changes in relation to the production of NOES, ThyssenKrupp 

reported ***. When asked to describe the constraints that set limits on the firm’s production

capacity, ArcelorMittal Germany reported that ***; CDW reported ***; and ThyssenKrupp cited 

the ***. ThyssenKrupp also noted that production capacity of NOES is limited by ***.

When asked if their firms have the ability to switch production between NOES and other 

products using the same equipment and labor, ArcelorMittal Germany reported that ***. 

ThyssenKrupp indicated that it has conducted test runs for certain cold-rolled products at its 

NOES facility, ensuring that it will be able utilization unused NOES capacity in the future.12 In its 

questionnaire response, ***. Although it does not currently do so, *** using the same 

equipment and machinery used to produce NOES. 

When asked to identify what other products are made on the same equipment and

machinery used in the production of NOES, ***. Table VII-3 provides overall capacity and 

production data with regard to these products. 

Table VII-2

NOES: Data for producers in Germany, 2010-2012, January-June 2012, and January-June 2013 

* * * * * * *

Table VII-3

NOES: German producers’ overall capacity and production of products on the same equipment 

as NOES, 2010-12, January-June 2012, and January-June 2013

* * * * * * *

 

10 ThyssenKrupp’s largest U.S. customer for NOES shifted much of its stamping operations from the 

United States to Germany in 2012. As a result, ThyssenKrupp halted all of its U.S. exports of NOES to this 

customer and has redirected these shipments to the German market. Conference transcript, p. 103 

(LaFrankie) and ThyssenKrupp’s postconference brief, p. 12. CDW's projected exports in 2013 and 2014 

are lower because a major customer that accounted for over half of its U.S. sales (***), completed a 

major product using a specialized product manufactured by CDW in 2012 and does not plan to begin 

another one. Conference transcript, pp. 107-108 (McPhie) and CDW’s postconference brief, p. 6. 11 ThyssenKrupp’s postconference brief, p. 17. 12 Conference transcript, p. 104 (LaFrankie) and ThyssenKrupp’s postconference brief, p. 15.
VII-5

THE INDUSTRY IN JAPAN

Table VII-4 presents data provided by Metal One,13 JFE,14 and Nippon Steel,15 three 

producers/exporters of NOES in Japan. These firms’ exports to the United States, all of which 

consisted of fully processed NOES, accounted for *** percent of U.S. imports of NOES from 

Japan in 2012. Exports of NOES from Japan accounted for no greater than *** percent of total 

shipments over the period. Exports of NOES from Japan increased between 2010 and 2012, but 

were lower in interim 2013 than in interim 2012. Exports to markets other than the United 

States accounted for the between *** and *** over the period, with principal export markets 

being identified as ***. JFE and Nippon Steel reported that *** percent and their respective 

total sales in the most recent fiscal year were represented by sales of NOES. 

When asked to describe changes in relation to the production of NOES, JFE reported 

that *** and Nippon Steel reported the ***.

16 Nippon Steel added that ***. When asked to 

describe the constraints that set limits on the firm’s production capacity, JFE reported that ***. 

Nippon Steel added that ***.

When asked if their firms have the ability to switch production between NOES and other 

products using the same equipment and labor, JFE identified *** and Nippon Steel indicated 

***.

When asked to identify what other products are made on the same equipment and 

machinery used in the production of NOES, Nippon Steel reported *** and JFE reported ***.

17

Table VII-5 provides Japanese producers’ overall capacity and production data with regard to 

products that use the same equipment and machinery used to produce NOES.

Table VII-4

NOES: Data for producers in Japan, 2010-2012, January-June 2012, and January-June 2013 

* * * * * * *

 

13 Metal One is related to Metal One America, an importer of NOES in the United States. Metal One 

reported ***. 14 JFE is related to JFE Shoji America, an importer of NOES in the United States. JFE has reportedly 

entered into a technical assistance arrangement with JSW Steel to produce NOES in India by late 2014. 

Conference transcript, p. 47 (Jones). 15 Nippon Steel is related to Sumitomo America, an importer of NOES in the United States. Nippon 

Steel is related to China Steel Sumikin-Vietnam Joint Stock Company, a joint venture with China Steel of 

Taiwan, which will produce NOES in Vietnam. Conference transcript, p. 47-48 (Jones).

16 Nippon Steel reported ***. 17 Based on the scope of these investigations, NOES is defined as having a thickness of 0.20 mm or 

more and containing by weight at least 1.25 percent of silicon and less than 3.5 percent of silicon. 
VII-6

Table VII-5

NOES: Japanese producers’ overall capacity and production of products on the same equipment 

as NOES, 2010-12, January-June 2012, and January-June 2013

* * * * * * *

THE INDUSTRY IN KOREA

Table VII-6 presents data provided by POSCO, the sole producer of NOES in Korea.18

POSCO’s exports to the United States, all of which consisted of fully processed NOES, accounted 

for *** percent of U.S. imports of NOES from Korea in 2012. POSCO’s exports to the United 

States, which accounted for no greater than *** percent of total shipments, decreased 

between 2010 and 2012 and were lower in interim 2013 than in interim 2012. POSCO cited 

South Asia and China as its principal export markets. POSCO reported that *** percent and 

their respective total sales in the most recent fiscal year were represented by sales of NOES. 

When asked to describe the constraints that set limits on the firm’s production capacity, 

POSCO reported that ***.

POSCO reported *** using the same equipment and machinery used in the production 

of NOES. Table VII-7 provides POSCO’s overall capacity and production data with regard to 

products that use the same equipment and machinery used to produce NOES.

Table VII-6

NOES: Data for producers in Korea, 2010-2012, January-June 2012, and January-June 2013 

* * * * * * *

Table VII-7

NOES: Korean producer’s overall capacity and production of products on the same equipment as 

NOES, 2010-12, January-June 2012, and January-June 2013

* * * * * * *

 

18 The Commission also received a foreign producer questionnaire from Hyundai; however, ***. 

POSCO is related to POSCO America and Daewoo America, two importers of NOES in the United States. 

POSCO is reportedly nearing completion of a NOES facility in India. Conference transcript, p. 47 (Jones).
VII-7

THE INDUSTRY IN SWEDEN

Table VII-8 presents data provided by Surahammars, the sole producer of NOES in 

Sweden.19 Surahammars’ exports to the United States, all of which consisted of fully processed 

NOES, accounted for *** percent of U.S. imports of NOES from Sweden in 2012. Surahammars’ 

exports to the United States, which accounted for between *** percent and *** percent over 

the period, increased between 2010 and 2012, but were lower in interim 2013 than in interim 

2012. Cogent Power, the firm responsible for handling Surahammars’ imports into the United 

States, supplies slit products (including blanks), as opposed to wide coils, dedicated for the end 

customer’s use.20 Exports to markets other than the United States, identified principally as ***, 

accounted for between *** percent and *** percent of the firm’s total shipments. 

Surahammars reported that *** percent of its total sales in the most recent fiscal year were 

represented by sales of NOES.

When asked to describe changes in relation to the production of NOES, Surahammars 

reported ***.

21 When asked to describe the constraints that set limits on the firm’s production 

capacity, Surahammars reported ***. When asked if their firms have the ability to switch 

production between NOES and other products using the same equipment and labor, 

Surahammars reported that it ***. 

Surahammars reported *** using the same equipment and machinery used in the 

production of NOES. Table VII-9 provides Surahammars overall capacity and production data 

with regard to products that use the same equipment and machinery used to produce NOES.

Table VII-8

NOES: Data for producer in Sweden, 2010-2012, January-June 2012, and January-June 2013 

* * * * * * *

 

19 Cogent’s postconference brief, p. 2.

20 A small percentage of NOES from Sweden was sold, without Surahammars or Cogent’s knowledge, 

into the U.S. market in coil form. These shipments accounted for *** percent of Surahammars’ U.S. 

shipment of NOES during the period. Surahammars noted that this is not a normal channel for U.S. sales 

of Swedish NOES. Surahammars and Cogent have reportedly taken steps to ensure that such shipments 

will not occur in the future. Cogent’s postconference brief, pp.3-5 21 According to testimony at the staff conference, Surahammars has reduced its workforce and with 

it, production capacity. Conference transcript, pp. 112-113 (Harper). As detailed in table VII-8, 

Surahammars’ reported production capacity was lower in interim 2013 than in interim 2012 and is 

projected to be ***. 
VII-8

Table VII-9

NOES: Swedish producer’s overall capacity and production of products on the same equipment 

as NOES, 2010-12, January-June 2012, and January-June 2013

* * * * * * *

THE INDUSTRY IN TAIWAN

Table VII-10 presents data provided by China Steel, the sole producer of NOES in 

Taiwan.22 China Steel’s exports to the United States, all of which consisted of fully processed 

NOES, accounted for *** percent of U.S. imports of NOES from Taiwan in 2012. China Steel’s 

exports to the United States, which accounted for between *** percent and *** percent over 

the period, increased between 2010 and 2012, but were lower in interim 2013 than in interim 

2012.23 Exports to markets other than the United States, particularly to China and South Asian 

countries, accounted for the majority of China Steel’s total shipments. China Steel reported that 

*** percent of its total sales in the most recent fiscal year were represented by sales of NOES.

When asked to identify any anticipated changes in relation to the production of NOES, 

China Steel reported ***. China Steel noted that the ***. When asked to identify the 

constraints that set limits on the firm’s production capacity, China Steel reported ***.

Table VII-10

NOES: Data for producers in Taiwan, 2010-2012, January-June 2012, and January-June 2013 

* * * * * * *

U.S. INVENTORIES OF IMPORTED MERCHANDISE

Table VII-11 presents data on U.S. importers’ reported end-of-period inventories of 

NOES.24 

 

22 Conference transcript, p. 94 (Weinstein). China Steel is related to China Steel Sumikin-Vietnam 

Joint Stock Company, a joint venture with Nippon Steel, which will produce NOES in Vietnam. China 

Steel is also reportedly building a NOES facility in India. Conference transcript, pp. 47-48 (Jones). The 

Commission also received a questionnaire response from Leicong; ***. 23 All of China Steel’s exports to the United States consisted of NOES in coil, not slit form. China 

Steel’s postconference brief, p. 2. 24Firms that imported NOES from *** reported no end-of-period inventories; therefore, those 

countries do not appear in table VII-10.
VII-9

Table VII-11 

NOES: U.S. importers’ inventories, 2010-2012, January-June 2012, and January-June 2013

* * * * * * *

U.S. IMPORTERS’ OUTSTANDING ORDERS

The Commission requested importers to indicate whether they imported or arranged for 

the importation of NOES from China, Germany, Japan, Korea, Sweden, and Taiwan after June 

30, 2013. Table VII-12 presents these data. 

Table VII-12 

NOES: Arranged imports, July 2013-June 2014

* * * * * * *

ANTIDUMPING OR COUNTERVAILING DUTY ORDERS IN THIRD-COUNTRY MARKETS

On July 17, 2013, Brazil’s Foreign Trade Chamber, Camex, imposed antidumping duties 

on imports of NOES From China, Taiwan, and Korea. The duties range from between $175.94 to 

$432.95 per ton on imports from China; from $132.50 to $231.40 per ton on imports from 

Korea; and from $198.34 to $567.16 per ton on imports from Taiwan.25

INFORMATION ON NONSUBJECT COUNTRIES

In assessing whether the domestic industry is materially injured or threatened with 

material injury “by reason of subject imports,” the legislative history states “that the 

Commission must examine all relevant evidence, including any known factors, other than the 

dumped or subsidized imports, that may be injuring the domestic industry, and that the 

Commission must examine those other factors (including non-subject imports) ‘to ensure that it 

is not attributing injury from other sources to the subject imports.’”26

 

25 “Brazil trade body sets anti-dumping penalties on GNO steel imports,” 

http://in.reuters.com/article/2013/07/17/snippet-idINL1N0FN0DG20130717, retrieved November 5, 

2013. Brazilian authorities defined NOES as having between 0.6 percent and 6.0 percent of silicon. 

Baoshan’s postconference brief, p. 4. 26 Mittal Steel Point Lisas Ltd. v. United States, Slip Op. 2007-1552 at 17 (Fed. Cir. Sept. 18, 2008), 

quoting from Statement of Administrative Action on Uruguay Round Agreements Act, H.R. Rep. 103-316, 

Vol. I at 851-52; see also Bratsk Aluminum Smelter v. United States, 444 F.3d 1369 (Fed. Cir. 2006).
VII‐10

According to official Commerce import statistics, U.S. imports of NOES from nonsubject

sources accounted for between 4.2 and 8.8 percent of total U.S. imports with France and

Australia being the two largest nonsubject sources of NOES over the period.27 In addition, firms

responding to the Commission’s U.S. importers questionnaire identified NOES producers in

other nonsubject countries including Austria (Voestalpine AG), Brazil (Aperam S.A.), and Russia

(Novolipetsk). As noted earlier, a number of NOES producers in subject countries (POSCO of

Korea, JFE of Japan, and China Steel of Japan) are building or are planning on expanding NOES

capacity in India and Vietnam.28

                                                            

27 NOES producers in these countries include Blue Scope Steel (Australia) and ArcelorMittal

Mediteranee (France).     28 Conference transcript, pp. 47‐48 (Jones).  
Contains Business Proprietary Information

A‐1

APPENDIX A

FEDERAL REGISTER NOTICES  

Contains Business Proprietary Information

A‐3

The Commission makes available notices relevant to its investigations and reviews on its

website, www.usitc.gov.  In addition, the following tabulation presents, in chronological order,

Federal Register notices issued by the Commission and Commerce during the current

proceeding.   

Citation Title Link

78 FR 62660

October 22, 2013

Non‐Oriented Electrical Steel From

China, Germany, Japan, Korea,

Sweden, and Taiwan: Institution of

Antidumping and Countervailing Duty

Investigations and Scheduling of

Preliminary Phase Investigations  

http://www.gpo.gov/fdsys/pkg/FR‐

2013‐10‐22/html/2013‐24337.htm

78 FR 68412,

November 14,

2013

Non‐Oriented Electrical Steel From

the People's Republic of  

China, the Republic of Korea, and

Taiwan: Initiation of Countervailing  

Duty Investigations

http://www.gpo.gov/fdsys/pkg/FR‐

2013‐11‐14/html/2013‐27316.htm

78 FR 69041,

November 18,

2013

Non‐Oriented Electrical Steel From

the People's Republic of  

China, Germany, Japan, the Republic

of Korea, Sweden and Taiwan:

Initiation of Antidumping  

Duty Investigations

http://www.gpo.gov/fdsys/pkg/FR‐

2013‐11‐18/html/2013‐27304.htm
 
B‐1

APPENDIX B

CONFERENCE WITNESSES

B‐3

CALENDAR OF PUBLIC PRELIMINARY CONFERENCE 

 Those listed below appeared as witnesses at the United States International Trade 

Commission’s preliminary conference: 

Subject: Non-Oriented Electrical Steel from China, Germany, 

Japan, Korea, Sweden, and Taiwan 

Inv. Nos.: 701-TA-506-508 and 731-TA-1238-1243 (Preliminary) 

Date and Time: November 6, 2013 - 9:30 a.m. 

Sessions were held in connection with these preliminary investigations in the Main 

Hearing Room (room 101), 500 E Street, S.W., Washington, DC. 

OPENING REMARKS:

Petitioner (Joseph W. Dorn, King & Spalding) 

Respondents (James P. Durling, Curtis, Mallet-Prevost, Colt and Mosle LLP) 

 

 

 In Support of the Imposition of Antidumping and Countervailing Duty Orders: 

King & Spalding 

Washington, DC 

on behalf of 

AK Steel Corporation 

 Eric Petersen, Vice President of Sales and Customer Service, AK Steel 

 Corporation 

 Geoff Pfeiffer, General Manager of Specialty Steel Sales, AK Steel Corporation 

 Steve Konstantinidis, Products Manager of Electrical Steel, AK Steel 

 Corporation 

 Jerry Schoen, Principal Engineer, Product Development & Applications 

Engineering, AK Steel Corporation 

Jeffrey Zackerman, Assistant General Counsel, Commercial Affairs, 

AK Steel Corporation 

 

Joseph W. Dorn ) 

 Stephen A. Jones ) – OF COUNSEL 

Brian E. McGill )
B‐4

In Opposition to the Imposition of 

 Antidumping and Countervailing Duty Orders:

Morris Manning & Martin LLP 

Washington, DC 

on behalf of 

China Steel Corporation (“CSC”) 

 Jonathan Weinstein, Vice President Sales, Metallia U.S.A., LLC 

 Julie C. Mendoza )

 ) – OF COUNSEL 

 R. Will Planert ) 

 

Curtis, Mallet-Prevost, Colt & Mosle LLP 

Washington, DC 

on behalf of 

JFE Steel Corporation (“JFE”) 

Nippon Steel & Sumitomo Metal Corporation (“NSSMC”) 

Hiroyuki Azeyanagi, Staff Manager, JFE Steel Corporation 

 Daniel L. Porter )

James P. Durling ) – OF COUNSEL 

 Matthew P. McCullough ) 

Dentons US LLP 

Washington, DC 

on behalf of 

China Iron and Steel Association (“CISA”) 

 Mark Lunn ) – OF COUNSEL 

 
B‐5

Steptoe & Johnson LLP 

Washington, DC 

on behalf of 

Cogent Power Inc. 

Surahammars Bruks AB 

Ron Harper, President, Cogent Power 

 Joel Kaufman ) 

 ) – OF COUNSEL 

 Alice A. Kipel ) 

Hughes Hubbard & Reed LLP 

Washington, DC 

on behalf of 

ThyssenKrupp Steel Europe AG 

ThyssenKrupp Steel North America Inc. 

 Robert L. LaFrankie ) – OF COUNSEL 

Squire Sanders (US) LLP 

Washington, DC 

on behalf of 

C.D. Wӓlzholz KG (“Wӓlzholz”) 

 Iain R. McPhie ) – OF COUNSEL 

REBUTTAL/CLOSING REMARKS:

Petitioner (Joseph W. Dorn, King & Spalding) 

Respondents (Matthew P. McCullough, Curtis, Mallet-Prevost,Colt and Mosle LLP ) 
 
Contains Business Proprietary Information

C-1 

APPENDIX C

SUMMARY DATA

Table C-1

NOES: Summary data concerning the U.S. market, 2010-12, January to June 2012, and January to June 2013

Jan-June

2010 2011 2012 2012 2013 2010-12 2010-11 2011-12 2012-13

U.S. consumption quantity:

Amount.................................................................................... *** *** *** *** *** *** *** ***` ***

Producers' share (1)................................................................ *** *** *** *** *** *** *** ***` ***

Importers' share (1):

China..................................................................................... *** *** *** *** *** *** *** ***` ***

Germany............................................................................... *** *** *** *** *** *** *** ***` ***

Japan.................................................................................... *** *** *** *** *** *** *** ***` ***

Korea.................................................................................... *** *** *** *** *** *** *** ***` ***

Sweden................................................................................. *** *** *** *** *** *** *** ***` ***

Taiwan.................................................................................. *** *** *** *** *** *** *** ***` ***

Subtotal, subject................................................................ *** *** *** *** *** *** *** ***` ***

All others sources, nonsubject.............................................. *** *** *** *** *** *** *** ***` ***

Total imports................................................................... *** *** *** *** *** *** *** ***` ***

U.S. consumption value:

Amount.................................................................................... *** *** *** *** *** *** *** ***` ***

Producers' share (1)................................................................ *** *** *** *** *** *** *** ***` ***

Importers' share (1):

China..................................................................................... *** *** *** *** *** *** *** ***` ***

Germany............................................................................... *** *** *** *** *** *** *** ***` ***

Japan.................................................................................... *** *** *** *** *** *** *** ***` ***

Korea.................................................................................... *** *** *** *** *** *** *** ***` ***

Sweden................................................................................. *** *** *** *** *** *** *** ***` ***

Taiwan.................................................................................. *** *** *** *** *** *** *** ***` ***

Subtotal, subject................................................................ *** *** *** *** *** *** *** ***` ***

All others sources, nonsubject.............................................. *** *** *** *** *** *** *** ***` ***

Total imports................................................................... *** *** *** *** *** *** *** ***` ***

U.S. importers' U.S. imports from: 

China: CDE FG

Quantity................................................................................. 8,275 16,401 14,071 7,394 8,217 ## 70.1 98.2 (14.2) 11.1

Value..................................................................................... 7,642 19,702 15,400 8,508 7,912 ## 101.5 157.8 (21.8) (7.0)

Unit value.............................................................................. 924 1,201 1,094 1,151 963 ## 18.5 30.1 (8.9) (16.3)

Ending inventory quantity...................................................... 00000 ## (2) (2) (2) (2)

Germany:

Quantity................................................................................. 10,831 14,385 9,568 5,852 3,795 ## (11.7) 32.8 (33.5) (35.2)

Value..................................................................................... 12,372 19,492 11,224 6,944 4,163 ## (9.3) 57.6 (42.4) (40.0)

Unit value.............................................................................. 1,142 1,355 1,173 1,186 1,097 ## 2.7 18.6 (13.4) (7.5)

Ending inventory quantity...................................................... *** *** *** *** *** *** *** ***` ***

Japan:

Quantity................................................................................. 20,124 22,747 18,540 11,323 6,915 ## (7.9) 13.0 (18.5) (38.9)

Value..................................................................................... 22,816 29,889 23,625 14,517 8,535 ## 3.5 31.0 (21.0) (41.2)

Unit value.............................................................................. 1,134 1,314 1,274 1,282 1,234 ## 12.4 15.9 (3.0) (3.7)

Ending inventory quantity...................................................... 1,390 1,982 2,403 1,462 2,258 ## 72.9 42.6 21.2 54.4

Korea:

Quantity................................................................................. 5,267 6,880 7,331 4,062 1,357 ## 39.2 30.6 6.6 (66.6)

Value..................................................................................... 5,526 7,605 6,830 3,941 1,311 ## 23.6 37.6 (10.2) (66.7)

Unit value.............................................................................. 1,049 1,105 932 970 966 ## (11.2) 5.3 (15.7) (0.5)

Ending inventory quantity...................................................... *** *** *** *** *** *** *** ***` ***

Sweden:

Quantity................................................................................. 4,235 8,599 9,359 4,979 3,559 ## 121.0 103.1 8.8 (28.5)

Value..................................................................................... 6,595 14,467 15,394 8,359 5,283 ## 133.4 119.4 6.4 (36.8)

Unit value.............................................................................. 1,557 1,682 1,645 1,679 1,484 ## 5.6 8.0 (2.2) (11.6)

Ending inventory quantity...................................................... *** *** *** *** *** *** *** ***` ***

Taiwan:

Quantity................................................................................. 6,776 5,203 17,136 8,201 2,637 ## 152.9 (23.2) 229.4 (67.8)

Value..................................................................................... 7,929 6,459 18,231 8,945 2,485 ## 129.9 (18.5) 182.2 (72.2)

Unit value.............................................................................. 1,170 1,242 1,064 1,091 942 ## (9.1) 6.1 (14.3) (13.6)

Ending inventory quantity...................................................... 00000 ## (2) (2) (2) (2)

Subtotal, subject sources:

Quantity................................................................................. 55,507 74,215 76,006 41,812 26,481 ## 36.9 33.7 2.4 (36.7)

Value..................................................................................... 62,879 97,615 90,704 51,213 29,688 ## 44.3 55.2 (7.1) (42.0)

Unit value.............................................................................. 1,133 1,315 1,193 1,225 1,121 ## 5.3 16.1 (9.3) (8.5)

Ending inventory quantity...................................................... 3,255 6,941 7,189 6,758 5,981 ## 120.9 113.2 3.6 (11.5)

All other sources:

Quantity................................................................................. 3,559 7,151 6,242 2,956 1,168 ## 75.4 100.9 (12.7) (60.5)

Value..................................................................................... 4,640 11,485 8,066 4,003 1,621 ## 73.8 147.5 (29.8) (59.5)

Unit value.............................................................................. 1,304 1,606 1,292 1,354 1,388 ## (0.9) 23.2 (19.5) 2.5

Ending inventory quantity...................................................... 00000 ## (2) (2) (2) (2)

Total imports:

Quantity................................................................................. 59,066 81,366 82,248 44,768 27,648 ## 39.2 37.8 1.1 (38.2)

Value..................................................................................... 67,520 109,101 98,770 55,216 31,309 ## 46.3 61.6 (9.5) (43.3)

Unit value.............................................................................. 1,143 1,341 1,201 1,233 1,132 ## 5.1 17.3 (10.4) (8.2)

Ending inventory quantity...................................................... 3,255 6,941 7,189 6,758 5,981 ## 120.9 113.2 3.6 (11.5)

Table continued on next page.

C-3

(Quantity=short tons; Value=1,000 dollars; Unit values, unit labor costs, and unit expenses=dollars per short ton; Period changes=percent--exceptions noted)

Calendar year January to June

Report data

Calendar year

Period changes
Table C-1 continued

NOES: Summary data concerning the U.S. market, 2010-12, January to June 2012, and January to June 2013

Jan-June

2010 2011 2012 2012 2013 2010-12 2010-11 2011-12 2012-13

U.S. producers': 

Average capacity quantity.......................... *** *** *** *** *** *** *** ***` ***

Production quantity................................................................... *** *** *** *** *** *** *** ***` ***

Capacity utilization (1).............................................................. *** *** *** *** *** *** *** ***` ***

U.S. shipments: 

Quantity................................................... *** *** *** *** *** *** *** ***` ***

Value..................................................................................... *** *** *** *** *** *** *** ***` ***

Unit value.............................................................................. *** *** *** *** *** *** *** ***` ***

Export shipments: 

Quantity................................................ *** *** *** *** *** *** *** ***` ***

Value..................................................................................... *** *** *** *** *** *** *** ***` ***

Unit value.............................................................................. *** *** *** *** *** *** *** ***` ***

Ending inventory quantity......................................................... *** *** *** *** *** *** *** ***` ***

Inventories/total shipments (1)................................................. *** *** *** *** *** *** *** ***` ***

Production workers.................................................................. *** *** *** *** *** *** *** ***` ***

Hours worked (1,000s)............................................................ *** *** *** *** *** *** *** ***` ***

Wages paid ($1,000)............................................................... *** *** *** *** *** *** *** ***` ***

Productivity (short tons per 1,000 hours).................................. *** *** *** *** *** *** *** ***` ***

Unit labor costs........................................................................ *** *** *** *** *** *** *** ***` ***

Net Sales: 

Quantity........................................................... *** *** *** *** *** *** *** ***` ***

Value..................................................................................... *** *** *** *** *** *** *** ***` ***

Unit value.............................................................................. *** *** *** *** *** *** *** ***` ***

Cost of goods sold (COGS)..................................................... *** *** *** *** *** *** *** ***` ***

Gross profit of (loss)................................................................ *** *** *** *** *** *** *** ***` ***

SG&A expenses....................................................................... *** *** *** *** *** *** *** ***` ***

Operating income or (loss)....................................................... *** *** *** *** *** *** *** ***` ***

Capital expenditures................................................................. *** *** *** *** *** *** *** ***` ***

Unit COGS............................................................................... *** *** *** *** *** *** *** ***` ***

Unit SG&A expenses............................................................... *** *** *** *** *** *** *** ***` ***

Unit operating income or (loss)................................................ *** *** *** *** *** *** *** ***` ***

COGS/sales (fn1).................................................................... *** *** *** *** *** *** *** ***` ***

Operating income or (loss)/sales (fn1)..................................... *** *** *** *** *** *** *** ***` ***

Notes:

(1)--Report data are in percent and period changes are in percentage points.

(2)--Undefined. 

Source: Compiled from data submitted in response to Commission questionnaires and official statistics of the U.S. Department of Commerce.

C-4

(Quantity=short tons; Value=1,000 dollars; Unit values, unit labor costs, and unit expenses=dollars per short ton; Period changes=percent--exceptions noted)

Report data Period changes

Calendar year January to June Calendar year