U.S. International Trade Commission

Publication 4439 November 2013

Washington, DC 20436

Grain-Oriented Electrical Steel 

from China, Czech Republic, Germany, 

Japan, Korea, Poland, and Russia

Investigation Nos. 701-TA-505 and 731-TA-1231-1237 (Preliminary)
U.S. International Trade Commission

COMMISSIONERS 

 

Irving A. Williamson, Chairman 

Shara L. Aranoff 

Dean A. Pinkert 

David S. Johanson 

Meredith M. Broadbent 

F. Scott Kieff

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

Mary Messer, Investigator 

Alan Treat, Industry Analyst 

Gerald Houck, Industry Analyst 

James Fetzer, Economist 

Justin Jee, Accountant 

Russell Duncan, Statistician 

Mara Alexander, Statistician 

Carolyn Holmes, Statistical Assistant 

Charles St. Charles, Attorney 

Douglas Corkran, Supervisory Investigator
U.S. International Trade Commission

Washington, DC 20436 

www.usitc.gov

Publication 4439 November 2013

Grain-Oriented Electrical Steel 

from China, Czech Republic, Germany, 

Japan, Korea, Poland, and Russia

Investigation Nos. 701-TA-505 and 731-TA-1231-1237 (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‐2

Statutory criteria ................................................................................................................... I‐2

Organization of report........................................................................................................... I‐3

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

Summary data and data sources............................................................................................... I‐4

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

Safeguard investigations ....................................................................................................... I‐4

Patent infringement proceeding ........................................................................................... I‐5

Antidumping and countervailing duty proceedings.............................................................. I‐6

Nature and extent of alleged subsidies and sales at LTFV........................................................ I‐8

Alleged subsidies................................................................................................................... I‐8

Alleged sales at LTFV ............................................................................................................. I‐9

The subject merchandise ........................................................................................................ I‐10

Commerce’s scope .............................................................................................................. I‐10

Tariff treatment................................................................................................................... I‐10

The product............................................................................................................................. I‐11

Description and applications............................................................................................... I‐11

Manufacturing processes.................................................................................................... I‐14

Domestic like product issues................................................................................................... I‐15

Physical characteristics and uses......................................................................................... I‐17

Manufacturing facilities and production employees.......................................................... I‐17

Interchangeability and customer and producer perceptions............................................. I‐17

Channels of distribution ...................................................................................................... I‐18

Price..................................................................................................................................... I‐18

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

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

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

Geographic distribution ........................................................................................................... II‐1

Supply and demand considerations......................................................................................... II‐2

U.S. supply ............................................................................................................................ II‐2

U.S. demand ......................................................................................................................... II‐8

Substitutability issues............................................................................................................. II‐11

Lead times .......................................................................................................................... II‐12

Factors affecting purchasing decisions............................................................................... II‐12

Comparison of U.S.‐produced and imported GOES ........................................................... II‐13
  

CONTENTS

Page

ii

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

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

U.S. production, capacity, and capacity utilization................................................................. III‐2

GOES .................................................................................................................................... III‐2

Overall capacity and production ......................................................................................... III‐3

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

U.S. producers’ inventories..................................................................................................... III‐5

U.S. producers’ imports and purchases.................................................................................. III‐5

U.S. employment, wages, and productivity ............................................................................ III‐5

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‐4

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

Fungibility ............................................................................................................................ IV‐6

Presence in the market .......................................................................................................IV‐7

Geographical markets .........................................................................................................IV‐7

Apparent U.S. consumption ....................................................................................................IV‐9

U.S. market shares ................................................................................................................IV‐11

Ratio of imports to U.S. production ......................................................................................IV‐11

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

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

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

U.S. inland transportation costs...........................................................................................V‐1

Pricing practices .......................................................................................................................V‐2

Pricing methods....................................................................................................................V‐2

Sales terms and discounts....................................................................................................V‐3

Price data..................................................................................................................................V‐3

Price trends...........................................................................................................................V‐5

Price comparisons ................................................................................................................V‐6

Lost sales and lost revenue ......................................................................................................V‐6

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

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

Operations on GOES................................................................................................................VI‐1

Capital expenditures and research and development expenses............................................VI‐3

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

Capital and investment ...........................................................................................................VI‐4
  

CONTENTS

Page

iii

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

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

Overview.............................................................................................................................VII‐3

Operations on GOES ...........................................................................................................VII‐3

Alternative products...........................................................................................................VII‐4

The industry in the Czech Republic ........................................................................................VII‐4

Overview.............................................................................................................................VII‐4

Operations on GOES ...........................................................................................................VII‐5

Alternative products...........................................................................................................VII‐5

The industry in Germany........................................................................................................VII‐6

Overview.............................................................................................................................VII‐6

Operations on GOES ...........................................................................................................VII‐6

Alternative products...........................................................................................................VII‐7

The industry in Japan .............................................................................................................VII‐7

Overview.............................................................................................................................VII‐7

Operations on GOES ...........................................................................................................VII‐8

Alternative products...........................................................................................................VII‐8

The industry in Korea .............................................................................................................VII‐9

Overview.............................................................................................................................VII‐9

Operations on GOES ...........................................................................................................VII‐9

Alternative products.........................................................................................................VII‐10

The industry in Poland..........................................................................................................VII‐11

Overview...........................................................................................................................VII‐11

The industry in Russia...........................................................................................................VII‐12

Overview...........................................................................................................................VII‐12

Operations on GOES .........................................................................................................VII‐13

Alternative products.........................................................................................................VII‐14

Combined subject country data...........................................................................................VII‐14

U.S. inventories of imported merchandise ..........................................................................VII‐14

U.S. importers’ outstanding orders......................................................................................VII‐15

Antidumping or countervailing duty orders in third‐country markets................................VII‐15

Information on nonsubject countries..................................................................................VII‐15

Appendixes

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

B. Calendar of the public staff 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‐505 and 731‐TA‐1231‐1237 (Preliminary)

GRAIN‐ORIENTED ELECTRICAL STEEL FROM   

CHINA, CZECH REPUBLIC, GERMANY, JAPAN, KOREA, POLAND, AND RUSSIA

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, Czech Republic, Germany, Japan, Korea, Poland, and Russia of

grain‐oriented electrical steel, provided for in subheadings 7225.11.00, 7226.11.10, and

7226.11.90 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 grain‐oriented

electrical steel that are allegedly subsidized by the Government of China.

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

BACKGROUND

On September 18, 2013, a petition was filed with the Commission and Commerce by of

AK Steel Corp., West Chester, Ohio; Allegheny Ludlum, LLC, Pittsburgh, Pennsylvania; and the

United Steelworkers, Pittsburgh, Pennsylvania, alleging that an industry in the United States is

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

of grain‐oriented electrical steel from China and LTFV imports of grain‐oriented electrical steel

from Czech Republic, Germany, Japan, Korea, Poland, and Russia.    Accordingly, effective

September 18, 2013, the Commission instituted countervailing duty investigation No.

701‐TA‐505 and antidumping duty investigation Nos. 731‐TA‐1231‐1237 (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 on September 25, 2013 ((78 FR 59059), as revised on October 21, 2013

(78 FR 64011, October 25, 2013)). The conference was held in Washington, DC, on October 25,

2013, and all persons who requested the opportunity were permitted to appear in person or by

counsel.
B

is a reaso

imports o

Japan, Ko

value and

China.

I. T

T

requires

prelimina

materiall

materiall

standard

record as

threat of

investiga

II. B

T

Corporat

GOES, an

Petitione

accounte

conferen

T

and subm

   

1

994, 1001

2 A

F.3d 1535

3

activities

investigat

ased on the

onable indica

of grain‐orie

orea, Poland

d imports of

The Legal S

he legal stan

the Commis

ary determin

ly injured or

ly retarded,

d, the Comm

s a whole co

f such injury;

ation.”2

Background

he petitions

tion (“AK Ste

nd The Unite

ers AK Steel a

ed for all rep

nce and subm

he following

mitted postc

                     

19 U.S.C. §§ 1

1‐04 (Fed. Cir.

American Lam

5, 1543 (Fed. C

Due to a laps

between Oct

tions.  See 78

record in th

ation that an

ented electri

d, and Russia

f GOES from

Standard fo

ndard for pre

ssion to dete

nations, whe

threatened

by reason o

ission weigh

ontains clear

; and (2) no

d

in these inv

eel”) and Alle

ed Steel Wor

and Alleghe

ported dome

mitted postc

g responden

conference b

                     

1671b(a), 167

. 1986); Ariste

mb Co., 785 F

Cir. 1994).

e of appropri

ober 1 and O

Fed. Reg. 640

Views of t

he prelimina

n industry in

cal steel (“G

a that are all

China that a

or Prelimin

eliminary an

ermine, base

ether there i

with mater

f the alleged

hs the eviden

and convinc

likelihood ex

vestigations

egheny Ludl

rkers, a trade

ny (“Petition

estic GOES p

conference b

ts and group

briefs:   

          

73b(a) (2000)

ech Chem. Co

F.2d at 1001; s

iations and th

October 16, 20

011 (Oct. 25,

3

the Comm

ry phase of t

n the United

GOES”) from

egedly sold

are allegedly

nary Deter

ntidumping a

ed upon the

is a reasonab

ial injury, or

dly unfairly t

nce before it

cing evidenc

xists that co

were filed o

um, LLC (“Al

e union who

ners”) are do

roduction.  P

briefs.  

ps of respon

; see also Am

orp. v. United

see also Texa

he related shu

013, the Com

2013).

mission

these invest

States is ma

China, the C

in the Unite

y subsidized

rminations

and counter

information

ble indicatio

r that the est

traded impo

t and determ

ce that there

ontrary evide

on Septembe

llegheny”), d

ose workers

omestic prod

Petitioners a

ndents appea

merican Lamb

States, 20 CIT

as Crushed Sto

utdown of th

mission tolle

tigations, we

aterially inju

Czech Repub

ed States at l

by the Gove

s  

vailing duty

n available a

on that a dom

tablishment

rts.1

  In appl

mines wheth

e is no mate

ence will aris

er 18, 2013,

domestic pro

produce GO

ducers of GO

appeared at

ared at the s

Co. v. United

T 353, 354‐55

one Co. v. Un

e Commissio

d the deadlin

e find that th

ured by reaso

blic, German

less than fai

ernment of

determinat

t the time o

mestic indus

t of an indust

lying this

her “(1) the

rial injury or

se in a final

by AK Steel

oducers of

OES).3  

OES and

the staff

staff confere

d States, 785 F

5 (1996).   

ited States, 3

n’s investigat

nes in these

here

on of

ny,

r

ions

f the

stry is

try is

r

ence

F.2d

35

tive
4

(1)  Baoshan Iron & Steel Co., Ltd. and Baosteel America, Inc. (“Baosteel”), a producer of

the subject merchandise in China and a U.S. importer of subject merchandise from China.   

(2) ThyssenKrupp Electrical Steel GmbH (“ThyssenKrupp”), a producer of the subject

merchandise in Germany.

(3)  JFE Steel Corporation and Nippon Steel (“JFE”) & Sumitomo Metal Corporation

(“Sumitomo”), producers of the subject merchandise in Japan (collectively, “Japanese

Producers”).

(4) Novolipetsk Steel (“NLMK”), a producer of the subject merchandise in Russia.

The Government of the People’s Republic of China and the Ministry of Economic

Development of the Russian Federation each filed a postconference brief.   

U.S. industry data are based on the questionnaire responses of two producers, AK Steel

and Allegheny, which accounted for all U.S. production of GOES in 2012.  Data for subject

imports are based on official import data, as adjusted.4   

The Commission received responses to its questionnaires from eight foreign

producers/exporters of subject merchandise, as follows:   

•  one producer/exporter in China, Baosteel, which accounted for *** percent of GOES

production in China, but *** U.S. imports of GOES from China during the period of investigation

(“POI”), which encompasses January 2010 to June 2013;5

• one producer/exporter in the Czech Republic, ArcelorMittal Frydek‐Mistek A.S., which

states that it accounts for all GOES production in the Czech Republic, *** its reported exports to

the United States accounted for *** percent of U.S. imports of GOES from the Czech Republic in

2012 as reported in official U.S. import statistics;6

• the sole producer/exporter in Germany, ThyssenKrupp, accounting for *** percent of

U.S. imports of GOES from Germany in 2012 as reported in official U.S. import statistics;7

• the two producers/exporters in Japan, JFE and Sumitomo, accounting for *** percent

of U.S. imports of GOES from Japan in 2012 as reported in official U.S. import statistics;8  

• the sole producer/exporter in Korea, POSCO, accounting for *** percent of U.S.

imports of GOES from Korea in 2012 as reported in official U.S. import statistics;9 and

                                                      

4 Confidential Report (“CR”) at IV‐3, Public Report (“PR”) at IV‐2.  The nature of the adjustment is

discussed further below. 5 CR at VII‐4, PR at VII‐3.

6 CR at VII‐8, PR at VII‐4. 7 CR at VII‐12, PR at VII‐6.

8 CR at VII‐17, PR at VII‐7.

9 CR at VII‐23, PR at VII‐9.
•

Ashinskiy

in 2012 a

T

known p

P

Italy and

Commer

orders on

after the

reviews o

III. D

A

In

States is

subject m

“industry

the relev

those pro

proportio

“domest

characte

T

factual d

   

10

11

12

29984 (Ju

1994) (an

13

14

15

16

the two pro

y Metallurgic

as reported i

he Commiss

roducer of G

rior Investig

Japan in 19

ce published

n GOES from

domestic in

of the orders

Domestic L

A. Legal

n determinin

materially in

merchandise

y.”14  Section

vant domest

oducers who

on of the tot

ic like produ

ristics and u

he decision

eterminatio

                     

0 CR at VII‐27, 1 CR at VII‐30, 2 59 Fed. Reg.

n. 10, 1994) (

tidumping du

3 59 Fed. Reg. 4 19 U.S.C. § 1 5 19 U.S.C. § 1

6 19 U.S.C. § 1

oducers/exp

cal Works, a

in official U.S

sion did not

GOES in Pola

ations.  The

93.  In 1994,

d a counterv

m Italy and Ja

ndustry expr

s.

13

ike Produc

Standard

ng whether t

njured or thr

e, the Comm

n 771(4)(A) o

ic industry a

ose collectiv

tal domestic

uct” as “a pro

ses with, the

regarding th

n, and the C

                     

PR at VII‐11.

PR at VII‐13.

29414 (Jun.

(antidumping

uty order on G

15376 (Mar.

1677(4)(A).

1677(4)(A).

1677(10).

porters in Ru

ccounting fo

S. import sta

receive a res

and, Stalprod

Commission

, following t

vailing duty o

apan.12  The

ressed its int

ct

there is a rea

reatened wi

ission first d

of the Tariff

as the “produ

e output of

c production

oduct which

e article sub

he appropria

Commission

          

7, 1994) (cou

g duty order o

GOES from Ita

28, 2006).

5

ussia, NLMK

or *** perce

atistics.10

sponse to th

dukt S.A.11   

n instituted

he Commiss

order on GO

orders were

tention to no

asonable ind

th material i

defines the “

Act of 1930,

ucers as a w

a domestic l

of the prod

h is like, or in

bject to an in

ate domestic

has applied

untervailing d

on GOES from

aly).   

and Public J

ent of U.S. im

he questionn

investigatio

sion’s final a

OES from Ital

e revoked ef

ot participat

dication that

injury by rea

“domestic lik

, as amende

whole of a do

like product

duct.”15  In tu

n the absenc

nvestigation.

c like produc

the statutor

uty order on

m Japan), and

oint Stock C

mports of GO

naire issued

ns concernin

ffirmative d

y and antidu

ffective Mar

te in the seco

t an industry

ason of impo

ke product”

ed (“the Tarif

omestic like p

constitutes

urn, the Tari

ce of like, mo

.”

16

ct(s) in an inv

ry standard

GOES from It

59 Fed. Reg.

Company

OES from Ru

to the only

ng GOES fro

eterminatio

umping duty

rch 14, 2006,

ond five‐yea

y in the Unit

orts of the

and the

ff Act”), defi

product, or

a major

ff Act define

ost similar in

vestigation i

of “like” or

taly), 59 Fed.

41431 (Aug.

ssia

m

ons,

y

,

ar

ed

nes

es

n

is a

Reg.

12,
6

“most similar in characteristics and uses” on a case‐by‐case basis.17 No single factor is

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

facts of a particular investigation.18  The Commission looks for clear dividing lines among

possible like products and disregards minor variations.19  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,20 the Commission determines what domestic product is like

the imported articles Commerce has identified.21   

B. Product Description

In its notices of institution, Commerce defined the imported merchandise within the

scope of these investigations as:

{G}rain‐oriented silicon electrical steel (GOES).  GOES is a flat‐rolled alloy steel

product containing by weight at least 0.6 percent but not more than 6 percent of

                                                      

17 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).

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

19 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.”).

20 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). 21 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).
7

silicon, not more than 0.08 percent of carbon, not more than 1.0 percent of

aluminum, and no other element in an amount that would give the steel the

characteristics of another alloy steel, in coils or in straight lengths.  GOES that is

subject to these investigations is currently classifiable under subheadings

7225.11.0000, 7226.11.1000, 7226.11.9030, and 7226.11.9060 of the

Harmonized Tariff Schedule of the United States (“HTSUS”).  Although the HTSUS

subheadings are provided for convenience and customs purposes, the written

description of the merchandise is dispositive.22

GOES is sold in sheet or strip form, in coils or in straight lengths.  GOES, which typically

contains approximately 3.2 percent by weight of silicon, is subject to specialized rolling and

annealing (heat treatment) processes, which produce grain structures uniformly oriented in the

rolling (or lengthwise) direction of the steel sheet. This uniformly oriented grain structure

permits the steel sheet to conduct a magnetic field with a high degree of efficiency in the

direction of rolling compared with other steels such as non‐oriented silicon electrical steel

(“NOES”).  As a result, GOES has superior magnetic properties compared with NOES, both in

terms of higher permeability and lower core loss.23  Both domestic and imported GOES are

produced in compliance with specifications issued by the ASTM International (“ASTM”) or

users’ proprietary specifications.  The conventional products in the standard thicknesses are

often identified as American Iron and Steel Institute (“AISI”) types M‐2 through M‐6, with

thickness and energy loss increasing with each higher number.24

GOES is used primarily in the production of laminated cores for large‐ and medium‐sized

electrical power transformers and distribution transformers.  Power transformers are used to

raise the voltage of electric power from the level at which it is generated by a power plant to a

higher level for more efficient transmission, and to lower voltage to levels suitable for local

distribution.  Distribution transformers further reduce electrical voltage to levels suitable for

commercial and residential consumers.25   

                                                      

22 Grain‐Oriented Electrical Steel from the People’s Republic of China, the Czech Republic,

Germany, Japan, the Republic of Korea, Poland, and the Russian Federation:  Initiation of Antidumping

Duty Investigations, 78 Fed. Reg.  65283, 65289 (Dep’t of Commerce, Oct. 31, 2013).  See also Grain‐

Oriented Electrical Steel from the People’s Republic of China:  Initiation of Countervailing Duty

Investigation, 78 Fed. Reg.  65265, 65268 (Dep’t of Commerce, Oct. 31, 2013).     23 “Permeability” refers to the ease with which magnetic lines of force distribute themselves

throughout a material, or more generally, the ease of magnetization of the GOES product in response to

a magnetic field.  “Core loss” refers to the measure of the amount of electrical energy that is lost as heat

when magnetic flux flows through the steel.  CR at I‐16 n.31, PR at I‐11 n.31.

24 CR at I‐16, PR at I‐11.

25 CR at I‐17, PR at I‐12.
8

GOES is produced in nominal thicknesses ranging from 0.007 inch (0.018 mm) to 0.0138

inch (0.35 mm).  Thinner laminations yield lower core loss in transformers and, because of this,

are often used despite the added cost for both the steel and the manufacturing of the

transformer core.  Laminations for transformer cores are oriented within the transformers to

take advantage of the directional magnetic properties of the steel to allow transformation of

electrical currents from one voltage to another.26

GOES is produced in different levels of magnetic permeability:  “conventional” and

“high‐permeability.”  High‐permeability product allows a transformer to operate at a higher

level of flux density27 than does conventional GOES, thus permitting a transformer to be smaller

and have lower operating losses.28  High‐permeability product GOES can be domain refined to

reduce even further the core loss at high flux density.  Domain refinement occurs by scribing

thin lines onto the surface of the steel, using laser scribing, mechanical scribing, or electrolytic

etching.  Whereas domain‐refined GOES produced by mechanical scribing or electrolytic etching

retains its enhanced magnetic properties when heat treated, domain‐refined GOES produced

by laser scribing does not.  Hence, laser‐scribed GOES cannot be used in production of wound‐

core transformers, which require heat treatment to relieve internal stresses following their

manufacture.29  A distinct ASTM specification addresses conventional GOES, high‐permeability

GOES, and laser‐scribed high‐permeability GOES.30    

Electrical transformers are produced with either stacked or wound cores.  In stacked

cores, laminations are stacked together to form the core.  In wound cores, a continuous length

of GOES is wound around a mandrel multiple times.  Wound cores undergo heat‐treatment to

relieve internal stresses.  Copper windings (electricity conductors) are wrapped around both

stacked and wound cores.31

C. Analysis  

Petitioners argue that the Commission should define a single domestic like product

coextensive with the definition of the scope of the subject merchandise, as it did in the 1994

investigations of GOES from Italy and Japan and the five‐year reviews of orders on that

                                                      

26 CR at I‐16‐17, PR at I‐12.

27 “Flux density” generally refers to total number of magnetic lines of force per unit area; i.e.,

the density of magnetic lines of force, or magnetic flux lines, passing through a specific area.  CR at I‐18,

PR at I‐13.

28 CR at I‐18, PR at at I‐13.

29 CR at I‐18, PR at I‐13.

30 See CR at I‐16 n.32, PR at I‐11 n.32.

31 CR at I‐19, PR at I‐13.
9

merchandise.32  Russian respondent NLMK argues that the Commission should define

conventional GOES and high‐permeability GOES as separate domestic like products.33 For the

reasons stated below, we have defined a single domestic like product in these preliminary

phase investigations encompassing all types of GOES within the scope definition.   

Physical Characteristics and Uses.  All types of GOES, whether conventional or high‐

permeability, are flat‐rolled alloy steel products having a grain‐oriented structure that permits

the product to conduct a magnetic field in a specific direction with a high degree of efficiency.  

All types of GOES share common chemistry, containing by weight at least 0.6 percent but not

more than 6 percent of silicon, not more than 0.08 percent of carbon, not more than 1.0

percent of aluminum, and no other element in a proportion that would give the steel the

characteristics of another alloy steel.  GOES is used primarily in the production of laminated

cores for large and medium‐sized electrical power transformers and distribution transformers.34

Manufacturing Facilities, Production Processes and Employees.   AK Steel, ***,

manufactures both conventional and high‐permeability GOES on the same production

equipment using the same manufacturing processes.  Allegheny’s production of GOES is

concentrated in conventional grades but Allegheny indicates that it is in the process of

expanding its product mix to include high‐permeability GOES, which it has produced and

shipped in trial orders to select customers.35

Channels of Distribution.  AK Steel reported selling both conventional and high‐

permeability GOES *** to end users and Allegheny reported that *** of its conventional GOES

is sold to end users; *** percent of U.S. producers’ shipments of GOES in 2012 were to end

users.36

Interchangeability.   The record suggests that there is some degree of interchangeability

among different grades of GOES.  U.S. producers assert that conventional grades of GOES

                                                      

32 Petitioners’ Postconference Brief at 4‐6.  In the 1994 investigations concerning GOES from

Italy and Japan, the Commission defined a single domestic like product encompassing both conventional

and high‐permeability GOES, coextensive with the scope.  The Commission concluded that the different

grades constituted a continuum of products and further found that the different grades of GOES were

chemically alike, possessed essentially the same physical characteristics, were marketed through the

same channels of distribution, had similar uses, were interchangeable to a certain degree, and shared

common production facilities. Grain‐Oriented Silicon Electrical Steel From Italy and Japan, Inv. Nos. 701‐

TA‐355 and 731‐TA‐660 (Final), USITC Pub. 2778 (May 1994) at I‐6‐8; Grain‐Oriented Silicon Electrical

Steel From Italy, Inv. Nos. 701‐TA‐355 and 731‐TA‐659 (Final), USITC Pub. 2800 (Aug. 1994) at I‐6‐8.  In

the five‐year reviews of the orders on GOES from Italy and Japan, the Commission again defined the

domestic like product as all GOES.  Grain‐Oriented Silicon Electrical Steel From Italy and Japan, Inv. Nos.

701‐TA‐355 and 731‐TA‐659‐660 (Review), USITC Pub. 3396 (Feb. 2001) at 5.      33 NLMK Postconference Brief at 2‐8.    34 CR at I‐15‐19, PR at I‐11‐13.

35 CR at I‐26, PR at I‐17.

36 CR at I‐27, PR at I‐18.
10

compete with high‐permeability grades of GOES to a certain degree (i.e., within one or two

grade steps) with purchasers evaluating different grades of GOES along with other factors to

achieve certain performance characteristics at the lowest cost.37  NLMK acknowledges that

transformers meeting users’ requirements can be made from any of a wide range of GOES.  

NLMK asserts, however, that energy conservation standards promulgated by the U.S.

Department of Energy (“DOE”) in 2007 limit the extent to which lower permeability grades of

conventional GOES, which have the highest degree of energy loss, e.g., AISI grades M‐6 and M‐

4, can be used in producing certain transformer types.38       

We find that GOES consists of a continuum of types and grades and that an ultimate

purchaser’s specifications can often be met with GOES within one or two permeability grade

steps.  Consequently, any reduction in applications to which the lower permeability grades are

suited simply results in the potential shortening of the continuum at its lower end.

Producer and Customer Perceptions.  Notwithstanding differences among the various

grades of GOES and the acknowledged distinction between conventional and high‐permeability

GOES, customers and producers generally perceive both conventional and high‐permeability

GOES to be suitable in the construction of transformer cores used in the generation and

distribution of electricity.39   

Price.   The record in these preliminary phase investigations indicates that prices per

short ton for high‐permeability GOES overlap with prices for conventional GOES.40  

Conclusion.  The record in these preliminary phase investigations indicates that

conventional and high‐permeability GOES share important physical characteristics, most

notably a grain‐oriented structure and use in the production of cores for transformers.  All

grades of GOES share common manufacturing facilities and channels of distribution, and the

record indicates no clear distinctions in the pricing of the grades.  Although some limits on

interchangeability between conventional and high‐permeability GOES exist, the record in these

preliminary phase investigations does not suggest that these limits present a clear dividing line

                                                      

37 Conference Transcript at 22‐23, 55‐56, 60‐61, 91 (Peterson), 27‐28, 53‐54, 59, 61‐62 (Polinski),

38 (Hermann), and 54‐55, 57 (Schoen).

38 NLMK Postconference Brief at 2‐8.  The 2007 standards, however, do not cover all transformer

products and thus are limited in the extent to which they indirectly impact potential applications for

particular grades or types of GOES.  NLMK’s separate claim that demand for the M‐6 and M‐4 grades

may be eliminated when new DOE energy efficiency standards are implemented in 2016 also suggests

that those grades continue to find applications in current transformer production.  NLMK

Postconference Brief at 7‐8 & Exhibit 2.  Moreover, the record indicates that, in 2013, DOE removed a

type of transformer, liquid‐immersed distribution transformers, from the 2007 regulations’ coverage.  

NLMK Postconference Brief at Exhibit 3 (Energy Conservation Standards for Distribution Transformers,

78 Fed. Reg. 23336, 23337 (Apr. 18, 2013)).  As noted, below, we intend in any final phase investigations

to gather more information as to the characteristics of the various types and grades of GOES.   39 E.g., Conference Transcript at 27‐28 (Polinski), 56 (Peterson).   40 See, e.g., CR/PR at Tables I‐2, V‐3, V‐6.   
between

single do

definition

IV. D

T

like prod

a major p

industry,

domestic

the dome

N

definition

producer

   

41

of the var

grades.  In

any partic

42

43

merchand

slitting se

exporter o

importer

causes the

Although

exporter o

causes AK

proceedin

the produc

omestic like p

n.

41      

Domestic In

he domestic

uct, or those

proportion o

the Commi

c production

estic mercha

No domestic

n of the dom

rs of GOES.  

                     

1 In any final p

rious types an

n comments o

cular GOES pr 2 19 U.S.C. § 1

3 A subsidiary

dise from Japa

rvices for GO

or importer s

directly or ind

e producer to

Vicksmetal is

of subject me

K Steel to act

ngs and ***.  

ts in light of

product, con

ndustry  

c industry is

e producers

of the total d

ssion’s gene

n of the like p

ant market.

producer of

mestic like pr

  

                     

phase of thes

nd grades of G

on the draft q

roducts for w

1677(4)(A).

of domestic

an, *** intere

OES.  CR at III‐2

hall be consid

directly contr

o act differen

s a third party

erchandise (N

differently th

CR/PR at Tab

their other

nsisting of al

defined as t

whose colle

domestic pro

eral practice

product, wh

f GOES is a re

roduct, we d

          

e investigatio

GOES and the

questionnaire

hich the Com

producer AK

est in Vicksm

2, PR at III‐1‐2

dered to be re

rol a third par

tly than a non

y that is contr

Nippon), there

han a nonrela

ble III‐1.  Acco

11

common ch

l GOES, that

he domestic

ective outpu

oduction of t

has been to

ether toll‐pr

elated party

define the do

ons we will ex

e interchange

es, the parties

mmission shou

Steel and Nip

etal Armco A

2.  The statut

elated parties

rty and there

nrelated prod

rolled by both

e is no eviden

ted producer

ordingly, we fi

haracteristics

t is coextens

c “producers

ut of a dome

the product.

o include in t

roduced, cap

y.

43  Consequ

omestic indu

xamine in gre

ability betwe

s should iden

uld collect dat

ppon Steel, a

Associates (“V

te provides th

s if . . . the pr

is reason to b

ducer.”   19 U

h a domestic

nce in the reco

r.  Indeed, AK

ind that AK St

s.  We accor

sive with Com

s as a whole

stic like prod

.”42  In defin

the industry

ptively cons

uently, and i

ustry to inclu

eater detail th

een these diff

tify and defin

ta.

producer of s

Vicksmetal”) w

hat “a produc

roducer and t

believe that t

U.S.C. § 1677(

producer (AK

ord that this

K Steel is a pet

teel is not a r

rdingly defin

mmerce’s sc

of a domes

duct constitu

ing the dom

producers o

umed, or so

n light of the

ude the two

he characteris

ferent types a

ne with specif

subject

which provide

cer and an

the exporter o

the relationsh

4)(B)(ii)(IV).  

K Steel) and a

relationship

titioner in the

related party.

e a

cope

tic

utes

mestic

of all

ld in

e

U.S.

stics

and

ficity

es

or

hip

n

ese

.   
V. C

A

Fo

reasonab

Tariff Act

petitions

imports c

assessing

product,

(1

   

44

correspon

imported

preceding

1677(24)(

1677(36))

Th

adjusted w

capacity i

short tons

tons in int

Commerc

able to de

according

A

percent st

prior to th

accounted

for *** pe

*** perce

Th

threshold

petition fo

imports b

Korea for

Cumulation

A. In Gen

or purposes

ble indicatio

t requires th

s were filed a

compete wit

g whether su

the Commis

1) the de

count

includ

qualit

                     

4 Pursuant to

nding to a dom

into the Unit

g the filing of

(A)(i), 1677(24

).   

he subject im

with respect t

n Canada, the

s in 2010, 1.7

terim 2012, a

ce statistics fo

etermine the

gly.

djusted offici

tatutory negl

he filing of th

d for *** perc

ercent, Japan

ent.  CR/PR at

he unadjuste

for Septemb

or which the

by quantity, Cz

9.8 percent,

n44

neral

of evaluatin

n of materia

he Commissio

and/or inves

th each othe

ubject impor

ssion genera

egree of fun

ries and bet

ding conside

y related qu

                     

Section 771(2

mestic like pr

ted States du

the petition s

4)(B); see also

mport data in t

to reported s

e official Com

71 million sho

and 1.49 millio

or HTS 7225.1

origin of thos

ial import dat

igibility thres

e petition for

cent of total

for *** perc

t Table IV‐3.

d official imp

ber 2012 to Au

Commission

zech Republic

Poland for 5.

ng the volum

al injury by re

on to cumul

stigations se

er and with t

rts compete

ally has cons

gibility betw

tween subjec

ration of spe

uestions;

          

24) of the Tar

roduct that ac

ring the most

shall be deem

o 15 C.F.R. § 2

these investig

subject impor

mmerce statist

rt tons in 201

on short tons

11.0000, 7226

se imports ba

ta show that i

shold for July

r which the Co

U.S. imports

ent, Korea fo

ort data for e

ugust 2013, t

has data.  On

c for 8.8 perc

9 percent, an

12

me and price

eason of sub

ate subject

lf‐initiated b

the domestic

with each o

sidered four

ween subject

ct imports a

ecific custom

riff Act, impo

ccount for les

t recent 12 m

med negligible

2013.1 (deve

gations are of

rts from Cana

tics show GO

11, 2.25 millio

s in interim 20

6.11.1000, 72

ased on impo

imports from

2012 to June

ommission ha

by quantity, C

r *** percent

each country

he most rece

n that basis, C

ent, Germany

nd Russia for

e effects for a

bject import

imports from

by Commerc

c like produc

other and wi

factors:

t imports fro

nd the dom

mer requirem

rts from a sub

ss than 3 perc

months for wh

e.  19 U.S.C. §

loping countr

fficial Comme

da.  Although

ES imports fr

on short tons

013. CR at IV‐

226.11.9030, a

rter informat

m each subject

e 2013, the m

as data that p

Czech Republ

t, Poland for

also exceed t

ent 12‐month

China account

y for 6.8 perc

6.9 percent.

a determina

ts, section 77

m all countri

ce on the sam

ct in the U.S

th the dome

om different

estic like pro

ments and o

bject country

cent of all suc

hich data are a

§§ 1671b(a), 1

ries for purpo

erce statistics

h there is no G

rom Canada o

in 2012, 1.26

‐3, PR at IV‐2;

and 7226.11.

tion and mad

t country exc

ost recent 12

permitted adj

lic for *** pe

*** percent,

the requisite

h period prior

ted for 5.1 pe

cent, Japan fo

Id.    

ation of

71(7)(G)(i) o

ies as to whi

me day, if su

S. market.  In

estic like

t

oduct,

ther

y of merchand

ch merchandi

available

1673b(a),

oses of 19 U.S

s that have be

GOES produc

of 1.96 million

6 million shor

; official

9060.  We we

e adjustment

eeded the 3

2‐month perio

justment.  Ch

rcent, Germa

and Russia fo

3 percent

to the filing o

ercent of tota

or 43.8 percen

f the

ich

uch

n

dise

ise

S.C. §

een

ction

n

rt

ere

ts

od

hina

any

or

of the

l U.S.

nt,
13

(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.45

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

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

product.46  Only a “reasonable overlap” of competition is required.47

B. Analysis

Petitioners argue that, because the relevant criteria for cumulation are satisfied, the

Commission should cumulate subject imports from China, Czech Republic, Germany, Japan,

Korea, Poland, and Russia.48  ThyssenKrupp argues that the Commission should not cumulate

subject imports from Germany with imports from the other subject countries because of

differences in the form of the product from Germany and the channels of distribution into

which it is sold.49  No other respondent party addressed the issue.   

                                                      

45 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).

46 See, e.g., Wieland Werke, AG v. United States, 718 F. Supp. 50 (Ct. Int’l Trade 1989). 47 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.”).

48 See, e.g., Petitioners’ Postconference Brief at 11‐14.  Petitioners argue that the statutory

prerequisites to cumulation are satisfied because the petitions on GOES from all subject countries were

filed simultaneously, no statutory exceptions to cumulation apply, and there is a reasonable overlap of

competition based on the factors that the Commission typically considers.  Id. at 17‐18.   49 See ThyssenKrupp Postconference Brief at 10‐15.  In particular, it argues that a large

proportion of subject imports from Germany enter the U.S. market in the form of master coils and

therefore do not compete with other subject imports, which enter the U.S. market in finished, i.e., slit

and processed, form.   Id. at 12.  It also asserts that subject imports from Germany compete in a channel

of distribution different from those in which the domestic like product and imports from other subject

sources compete because most subject imports from Germany were sold to slitters/laminators while the

domestic like product and imports from the other subject countries were sold largely to end users.   Id.     
14

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

Petitioners filed the antidumping duty petitions with respect to subject imports from all subject

countries and the countervailing duty petition with respect to subject imports from China on

the same day, September 18, 2013.50  We thus examine whether there is a reasonable overlap

of competition between subject imports from China, Czech Republic, Germany, Japan, Korea,

Poland, and Russia and between subject imports from each source and the domestic like

product.   

Fungibility.  The record indicates that GOES meeting a particular ASTM or end user

specification is generally fungible regardless of source and is used in the same general

applications in the production of transformer cores.51  U.S. producers reported that subject

imports from the subject countries are always interchangeable with each other and with the

domestic like product.52  All responding importers reported that imports from subject countries

are *** interchangeable with the domestic like product and with each other.53  We

acknowledge that there are differences in the product mix for imports from individual subject

sources and for the domestic like product in terms of the shares accounted for by conventional

GOES; high‐permeability, non‐domain‐refined GOES; high‐permeability, domain‐refined GOES,

as well as differences among types of domain‐refined GOES.54  Nevertheless, as discussed in

section III.C. above, there appears to be at least some degree of interchangeability between

conventional and high‐permeability GOES.   

Channels of Distribution.  U.S. producers sold mainly to ***, as did importers of subject

product from China, Japan, Korea, Poland, and Russia.55  Importers of subject product from

Germany also sold to *** to some extent during the POI, notwithstanding that they sold ***.56  

The *** of U.S. shipments of subject imports from the Czech Republic were to distributors, but

                                                      

50 None of the statutory exceptions to cumulation applies in these investigations.

51 E.g., CR at I‐16, PR at I‐11; CR/PR at Table II‐4.   52 CR/PR at Table II‐4.    53 CR/PR at Table II‐4.  Market participants’ perceptions of interchangeability of subject imports

from Germany with the domestic like product and imports from other subject sources were not

appreciably different from their perceptions of imports from other subject countries.  Id.

54 CR/PR at Table IV‐4.  We intend in any final phase investigations to examine further to what

extent these product mix differences limit fungibility between and among subject imports from each

source and the domestic like product.     55 CR/PR at Table II‐1.

56 Contrary to ThyssenKrupp’s claim that its product was sold *** into the slitter/laminator

channels, *** percent of U.S. shipments of subject imports from Germany in 2010 were to end users, as

were *** percent of those shipments in 2011, and *** percent in interim 2013.  CR/PR at Table II‐1.  The

record further indicates that there were common importers of subject merchandise from Germany, on

the one hand, and imports from each other subject country except China, on the other.  CR/PR at Table

IV‐1.
15

*** also went to slitters/laminators.57  U.S. producers sold into both those channels, and

importers of subject product from Germany, Japan, and Russia sold to slitters/laminators.58  

59

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 GOES to all regions in the contiguous United States, and importers of

GOES from each of the subject countries except China reported selling GOES to all regions in

the contiguous United States.  Importers of subject GOES from China reported selling to four of

the six specified regions.60   

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

each of the subject countries were present in at least parts of the period from 2010 to 2012 and

imports from six of the subject countries were present in each of the six months from January

2013 to June 2013 (“interim 2013”).61   

Conclusion.  The record in these preliminary phase investigations indicates geographical

overlap and simultaneous presence between and among imports from each of the subject

countries and the domestic like product.  Contrary to the arguments of ThyssenKrupp, the

record does not show a lack of fungibility between subject imports from Germany, on the one

hand, and imports from other subject countries and the domestic like product, on the other.  

Market participants’ perceptions of subject imports from Germany paralleled those for the

other subject sources.  Similarly, although the record indicates some distinctions in the

distribution pattern of subject imports from Germany compared to imports from most of the

other subject countries, in our view the record supports a finding of reasonable overlap of

channels in distribution for purposes of these preliminary phase investigations.  As previously

                                                      

57 Between *** percent and *** percent of subject imports from the Czech Republic were sold

to distributors on an annual basis from 2010 to 2012 and between *** percent and *** percent was

sold to slitters/laminators.  CR/PR at Table II‐1.        58 Between *** percent and *** percent of U.S. producers’ U.S. shipments on an annual basis

from 2010 to 2012 were to distributors.  Between *** and *** percent of U.S. producers’ U.S. shipments

were to slitters/laminators, as were between *** and *** percent of importers’ U.S. shipments of

subject imports from Germany, between *** and *** percent of U.S. importers’ U.S. shipments of

subject imports from Japan, and between *** and *** percent of importers’ U.S. shipments of subject

imports from Russia.  CR/PR at Table II‐1.      59 In any final phase investigations, we will examine further any distinctions in distribution

channels among imports from different subject countries and between imports from particular subject

countries and the domestic like product.       60 CR/PR at Table II‐2.   ThyssenKrupp also made an argument that the geographical areas within

which GOES from Germany was sold were *** (ThyssenKrupp Postconference Brief at 9); ***, as noted,

record data shows distribution of GOES from Germany in all regions.  CR/PR at Table II‐2.    61 CR/PR at Table IV‐5.  Subject imports from Korea were present in four of six months in interim

2013.  Id.  
discussed

to our co

C

imports f

subject im

counterv

overlap o

we cumu

Russia fo

of subjec

VI. R

A

In

Commiss

States is

investiga

subject im

domestic

operatio

immater

domestic

economi

is disposi

and cond

A

reasonab

traded im

   

62

63

relevant t

to the det

64

65

66

67

d, we intend

onsideration

onsequently

from China,

mports from

vailing duty p

of competitio

ulate subject

or our analys

ct imports.

Reasonable

A. Legal

n the prelimi

sion determi

materially in

ation.62  In m

mports, thei

c producers

ns.63  The sta

ial, or unimp

c industry is

c factors tha

itive, and all

ditions of co

Although the

ble indicatio

mports,67 it d

                     

2 19 U.S.C. §§

3 19 U.S.C. § 1

to the determ

termination.” 4 19 U.S.C. § 1 5 19 U.S.C. § 1

6 19 U.S.C. § 1 7 19 U.S.C. §§

d in any final

of fungibilit

y, the record

Czech Repu

m each sourc

petitions we

on between

t imports fro

sis of whethe

e Indicatio

Standard

inary phase

ines whethe

njured or thr

making this de

ir effect on p

of the dome

atute define

portant.”64  I

materially in

at bear on th

relevant fac

mpetition th

statute req

n that the do

does not def

                     

1671b(a), 16

1677(7)(B).  T

mination” but

”  19 U.S.C. §

1677(7)(A).

1677(7)(C)(iii)

1677(7)(C)(iii)

1671b(a), 16

phase inves

ty and chann

d indicates a

blic, German

ce and the do

re filed on t

and among

om China, Cz

er there is a

n of Mate

of antidump

er there is a r

reatened wi

eterminatio

prices for the

estic like pro

es “material

In assessing

njured by re

he state of th

ctors are con

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16

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17

injury analysis is left to the Commission’s reasonable exercise of its discretion.68  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.69

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.70  In performing its examination, however, the Commission need not isolate

                                                      

68 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).

69 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).

70 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.
18

the injury caused by other factors from injury caused by unfairly traded imports.71  Nor does the

“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.72  It is clear

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

determination.73

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.”74 75  Indeed, the Federal Circuit has examined and affirmed various

Commission methodologies and has disavowed “rigid adherence to a specific formula.”76

                                                      

71 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

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.”).

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

73 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.”). 74 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.   75 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 nonsubject imports, albeit without reliance upon presumptions or rigid formulas.  

Mittal Steel explains as follows:

(Continued...)
19

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.77  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.78  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

                                                                                                                                                                              

(...Continued)

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 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.

76 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.”). 77 Mittal Steel, 542 F.3d at 875‐79.

78 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).
20

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.79

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

evidence standard.80  Congress has delegated this factual finding to the Commission because of

the agency’s institutional expertise in resolving injury issues.81

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

GOES is used primarily in the production of laminated cores for large and medium‐sized

electrical power transformers and distribution transformers.  U.S. demand for GOES, therefore,

depends on the demand for U.S.‐produced power and distribution transformers.82  The extent

to which utilities replace transformers is an important driver of demand for GOES, with

transformer replacement currently accounting for 65 to 70 percent of demand.83  Housing

starts also drive demand for GOES in the new transformer market.  Seasonally adjusted housing

                                                      

79 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 phases of 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 phases of investigations in which there are substantial levels of nonsubject imports.

80 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.

81 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.”).    82 CR at II‐14, PR at II‐8.  Medium voltage distribution transformers, which account for about 70

percent of transformer demand in the United States, can be manufactured using either conventional or

high‐permeability GOES, whereas large voltage power transformers used by utility companies, which

account for about 25 percent of demand, are typically manufactured using high‐permeability GOES.  CR

at II‐20, PR at II‐12.   83 CR at II‐15, PR at II‐9.  Transformer replacement accounted for 75 to 80 percent of demand in

2011. Id.
21

starts increased by 46 percent between January 2010 and August 2013, with most of the

increase occurring since the latter part of 2011.  Housing starts, however, remain well below

historic averages.84   

The record indicates that apparent U.S. consumption increased overall from 2010 to

2012 and was higher in the first half of 2013 than the first half of 2012.  Apparent U.S.

consumption of GOES increased from *** short tons in 2010 to *** short tons in 2011, then

declined to *** short tons in 2012, for an overall 2010‐12 increase of *** percent.85  During the

first half of 2013, apparent U.S. consumption was higher at *** short tons than during the first

half of 2012 at *** short tons.86  

2. Supply Conditions

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

subject imports, and imports from nonsubject sources.87

AK Steel and Allegheny are the U.S. manufacturers of GOES.88  AK Steel accounted for

*** percent and Allegheny for *** of total domestic production of GOES in 2012.89  AK Steel

manufactures both conventional and high‐permeability grades of GOES and Allegheny

manufactures only conventional grades.90  Conventional grades account for most domestic

production.91

The domestic industry supplied the large majority of apparent U.S. consumption during

the POI.  Its share of apparent U.S. consumption was *** percent in 2010, *** percent in 2011,

*** percent in 2012; it was *** percent in interim 2012 and *** percent in interim 2013.92  The

domestic industry’s export shipments accounted for a substantial but declining share of its total

shipments during the POI.93  Export shipments declined by *** percent between 2010 and 2012

                                                      

84 CR at II‐15, PR at II‐9; CR/PR at Figure II‐2.

85 CR/PR at Table IV‐7.

86 CR/PR at Table IV‐7.  U.S. producers reported an increase in U.S. demand for GOES since 2010,

while most importers reported a decrease in demand.  CR/PR at Table II‐3.

87 CR/PR at Table IV‐7.

88 CR/PR at III‐1.   89 CR/PR at Table III‐1.   90 CR at I‐25‐26, PR at I‐17.  As noted above, Allegheny plans to manufacture high‐permeability

GOES in the future and has done so in test quantities.  CR at I‐26, PR at I‐17.

91 CR/PR at Tables III‐4, III‐6, IV‐4.

92 CR/PR at Table IV‐8.

93 The domestic industry’s export shipments accounted for *** percent of total shipments in

2010, *** percent in 2011, *** percent in 2012, *** percent in interim 2012, and *** percent in interim

2013.  CR/PR at Table III‐5.   
22

and were *** percent lower in interim 2013 than in interim 2012.94  *** attributes the decline

in export shipments to ***.95   

Cumulated subject imports held the second largest share of the U.S. market during the

POI.  The market share of cumulated subject imports was *** percent in 2010, *** percent in

2011, and *** percent in 2012; it was *** percent in interim 2012 and *** percent in interim

2013. 96  High‐permeability GOES accounted for *** percent of U.S. shipments of subject

imports in 2012, compared to *** percent of U.S. producers’ domestic shipments.97  

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

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

2012, *** percent in interim 2012, and *** percent in interim 2013.98

3. Substitutability  

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

is at least a moderate degree of substitutability among domestically produced GOES and GOES

from all subject sources.  As explained above, U.S. producers reported that subject imports

from each subject country are always interchangeable with each other and with the domestic

like product and responding importers reported that imports from subject countries are always,

frequently, or sometimes interchangeable with the domestic like product and with each

other.99  Although GOES may be substitutable within a grade or two,100 the record in the

preliminary phase of these investigations is not clear regarding the extent to which a purchaser

can substitute between coiled and straight GOES, between conventional and high‐permeability

forms of the product, and between high‐permeability GOES that is and that is not domain

refined.  In any final phase investigations, we will examine substitutability more closely,

including through information gathered from purchasers.    

4. Other Conditions

As previously stated, GOES of a specific type, whether imported or domestically

produced, complies with ASTM or proprietary specifications.101  In light of this and our finding

                                                      

94 CR/PR at Tables III‐5, C‐1.

95 CR/PR as revised by Memorandum INV‐LL‐096 (Nov. 14, 2013) at III‐8 n.4.

96 CR/PR at Table IV‐8.

97 CR/PR at Table IV‐4.

98 CR/PR at Table IV‐8.   99 CR/PR at Table II‐4.

100 E.g., Conference Transcript at 27‐28 (Polinski), 56 (Peterson).

101 CR at I‐16, PR at I‐11.
23

that subject imports and the domestic like product are at least moderately substitutable, we

find that price is an important factor in purchasing decisions.   

***.102  Importers’ practices are mixed; five reporting importers produced at least ***

percent of their sales to order, two made *** shipments from foreign inventories, and two

made *** shipments from U.S. inventories.103  

U.S. producers and importers reported selling *** GOES through contracts with fixed

quantities. U.S. producers reported making about *** percent of their sales with short term

contracts and about *** with long term contracts, with the remaining amount being spot sales.  

Most importers reported making the bulk of their sales with short term contracts, although

three reported making at least 80 percent of their sales on a spot basis.104   

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

gas, and electricity.105  Raw material costs made up between *** and *** percent of U.S.

producers’ cost of goods sold during 2010 to 2012.106  U.S. producers’ average cost of raw

materials per short ton increased overall between 2010 and 2012 and was lower in interim

2013 than in interim 2012.107  U.S. producers include raw material surcharges in contract prices.  

The *** primary surcharge elements are ***.108  

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.”109

The volume of U.S. cumulated subject imports was 31,380 short tons in 2010, 28,424

short tons in 2011, and 32,318 short tons in 2012.  It was 14,805 short tons in interim 2012 and

16,297 short tons in interim 2013.110    

                                                      

102 CR at II‐19, PR at II‐12.   103 CR at II‐19‐20, PR at II‐12.

104 CR at V‐3‐4, PR at V‐2.

105 CR/PR at Figure V‐1.   106 CR/PR at V‐1.

107 CR/PR at Table VI‐3.  Average raw material costs per short ton were $*** in 2010, $*** in

2011, $*** in 2012, $*** in interim 2012 and $*** in interim 2013.  Id.         108 CR at V‐2‐3, PR at V‐1.  Allegheny Ludlum calculates its raw material surcharge ***.  AK Steel

***.  Id.   

109 19 U.S.C. § 1677(7)(C)(i).

110 CR/PR at Table IV‐2.  As noted above, import data in these investigations are official

Commerce statistics adjusted to reflect the actual country of origin for imports incorrectly entered as

the product of Canada.  See CR at IV‐3, PR at IV‐2.  For purposes of these preliminary phase

investigations, we have not included in import data the small volume of temporary in bond (“TIB”)

imports shipped to NAFTA markets, although they are included for reference in CR/PR at Table C‐2.        
24

Subject imports had a largely stable presence in the U.S. market during the POI.  As

explained above, demand as measured by apparent U.S. consumption increased by *** percent

from 2010 to 2012 and was *** percent higher in interim 2013 than in interim 2012.111  The

quantity of subject imports rose more slowly by 3.0 percent from 2010 to 2012.  It was 10.1

percent higher in interim 2013 than in interim 2012.112  The share of apparent U.S.

consumption held by cumulated subject imports was *** percent in 2010, *** percent in 2011,

and *** percent in 2012; it was *** percent in interim 2012, and *** percent in interim

2013.113   

We find, for purposes of the preliminary phase of these investigations, that the volume

of cumulated subject imports is significant both in absolute terms and relative to apparent

consumption in the United States.  We do not find, however, that the change in the volume of

cumulated subject imports over the POI was significant.    

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.114

As explained above, based on the record in the preliminary phase of these

investigations, we find that there is at least a moderate degree of substitutability between

subject imports from all sources and the domestic like product, and that price is an important

consideration in purchasing decisions.   

The Commission collected quarterly pricing data for five pricing products.115  The

Commission received usable pricing data from questionnaire responses provided by two U.S.

producers of GOES and eleven importers.116 117

                                                      

111 CR/PR at Tables IV‐7, C‐1. 112 CR/PR at Table C‐1.

113 CR/PR at Table IV‐8.    114 19 U.S.C. § 1677(7)(C)(ii).

115 CR/PR at Tables V‐3 to V‐7.   The pricing products are the following:  

Product 1:  Conventional GOES, 9 mil (0.23 mm) thickness, maximum core loss 1.20W/kg, (50 hz,

1.7T), U.S. grade M‐3;

(Continued...)
25

There was a mixed pattern of overselling and underselling by subject imports during the

POI.  Cumulated subject imports undersold the domestic like product in 104 out of 165

quarterly comparisons and oversold it in the remaining 61 comparisons.118

Additionally, the record includes *** lost sale in the amount of $***.119  It is difficult to

discern from some purchaser responses to Petitioners’ other lost sales allegations whether or

not a domestic producer lost the sale to subject imports.  It appears, however, that in some

instances in which lost sales allegations were not specifically confirmed, purchasers indicated

that prices for subject imports in the U.S. market were used as leverage to obtain price

reductions from domestic producers.120    

The domestic industry experienced significant adverse price effects during the POI, and

it is not clear from this preliminary record that subject imports did not cause them to a

                                                                                                                                                                              

(...Continued)

Product 2:  Conventional GOES, 11 mil (0.27 mm) thickness, maximum core loss 1.25 W/kg, (50

hz, 1.7T), U.S. grade M‐4;

Product 3:  Conventional GOES, 14 mil (0.35 mm) thickness, maximum core loss 1.58W/kg, (50

hz, 1.7T), U.S. grade M‐6;

Product 4:  Domain‐refined high‐permeability GOES, 9 mil (0.23mm) thickness, maximum core

loss 0.80 W/kg, (50 hz, 1.7T), U.S. grade H‐O DR;

Product 5:  Domain‐refined high‐permeability GOES, 11 mil (0.27mm) thickness, maximum core

loss 0.90 W/kg, (50 hz, 1.7T), U.S. grade H‐1 DR.  CR at V‐5, PR at V‐3‐4.

116 CR at V‐5, PR at 3‐4.   The pricing data we have used exclude certain data to avoid double

counting and exclude data for products that did not correspond to the pricing product description.  CR at

V‐6 n.8, PR at V‐4 n.8.     117 Pricing data reported by these firms accounted for *** percent of the domestic industry’s

U.S. shipments, *** percent of subject imports from China, *** percent of subject imports from the

Czech Republic, *** percent of subject imports from Germany, *** percent of subject imports from

Japan, *** percent of subject imports from Korea, *** percent of subject imports from Poland, and ***

percent of subject imports from Russia, and 26 percent of all subject imports during the POI.  CR at V‐5‐

6, PR at V‐4.     118 CR/PR at Tables V‐3‐V‐9.  ThyssenKrupp contends that the pricing comparisons between

subject imports from Germany and the domestic like product are not meaningful because *** the

pricing data for the domestic like product are based on sales to end users, while subject imports from

Germany are not sold in this channel.  ThyssenKrupp Postconference Brief at 10.  We invite parties in

their comments on the draft questionnaires in any final phase investigations to propose definitions for

pricing products that will minimize any distortions in comparisons related to differences in channels of

distribution and assure comparability between the subject imports and the domestic like product.    119 CR/PR at Table V‐10.

120 For instance, ***.  Importer questionnaire response of ***.  CR/PR at Table V‐10.  In any final

phase investigations, we intend to investigate in more detail the lost sales and revenue allegations and

to obtain further information from purchasers concerning pricing dynamics in the GOES market.  
26

significant degree.  With respect to price depression, we note that U.S. prices declined for all

five of the domestically produced pricing products, and prices also declined for the great

majority of subject imports.121  With respect to price suppression, we note that between 2010

and 2012, when demand increased overall, the domestic industry’s average unit value (“AUV”)

for net sales declined by *** percent, while the industry’s unit cost of goods sold (“COGS”)

increased by *** percent.122 As the domestic industry was unable to maintain prices to cover its

costs, its COGS to net sales ratio increased steadily from *** percent in 2010 to *** percent in

2011 and *** percent in 2012; it was *** percent in interim 2012 and *** percent in interim

2013.123

In light of the significant volume of cumulated subject imports, our finding with respect

to the substitutability of subject imports and the domestic like product, the importance of price

in purchasing decisions, the presence of underselling, and indications of lost sales and lower

import prices being used as leverage in sales negotiations, we cannot conclude on this

preliminary record that cumulated subject imports have not depressed or suppressed domestic

prices to a significant degree.  We will examine these issues further in any final phase

investigations, in particular, the extent to which other factors may have caused adverse price

effects.   

                                                      

121 CR/PR at Tables V‐3 to V‐7.  Prices increased for Product 2 from *** (for which there were

only two observations) and Japan.  Prices also increased for Product 4 from ***. CR/PR at Tables V‐4, V‐

6.         122 The domestic industry’s AUVs for net sales were $*** in 2010, $*** in 2011, $*** in 2012,

$*** in interim 2012, and $*** in interim 2013.  The domestic industry’s unit COGS were $*** in 2010,

$*** in 2011, $*** in 2012, $*** in interim 2012, and $*** in interim 2013.  CR/PR at Table C‐1.    123 CR/PR at Table C‐1.    
27

E. Impact of the Subject Imports124

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

“within the context of the business cycle and conditions of competition that are distinctive to

the affected industry.”

As apparent U.S. consumption increased over the POI, the domestic industry maintained

its market share, which was *** percent in 2010, *** percent in 2011, and *** percent in 2012;

it was *** percent in interim 2012 and *** percent in interim 2013.125  U.S. shipments also

increased by quantity, rising overall by *** percent between 2010 and 2012, while declining

overall by value by *** percent.  U.S. shipments by quantity were *** percent higher, and by

value were *** percent lower in interim 2013 than in interim 2012.126 By contrast, the domestic

industry’s production, after increasing from *** short tons in 2010 to *** short tons in 2011,

fell to *** short tons in 2012; production was *** short tons in interim 2012 and *** short tons

                                                      

124 In its notice initiating antidumping investigations on GOES from the seven subject countries,

Commerce reported estimated dumping margins of 159.21 percent for GOES from China, 68.46 percent

to 235.50 percent for GOES from Czech Republic, 38.54 percent to 241.91 percent for GOES from

Germany, 44.95 percent to 172.30 percent for GOES from Japan, 49.51 percent to 257.61 percent for

GOES from Korea, 56.69 percent to 99.51 percent for GOES from Poland, and 43.52 percent to 119.88

percent for GOES from Russia.  78 Fed.  Reg. 65283, 65287 (Dep’t of Commerce, Oct. 31, 2013).  In its

notice initiating a countervailing duty investigation on GOES from China, Commerce stated it would

investigate 14 alleged subsidy programs.  Commerce identifies these programs in a separate initiation

checklist as including three loan programs, three tax programs, three programs for Government

provision of goods and services for less than adequate remuneration, one program for Government

purchases of goods for more than adequate remuneration, and five grant programs.  CR at I‐13, PR at I‐

9.  It appears that provision of benefits under at least one of these programs, preferential export

financing by the Export‐Import Bank of China, is contingent upon export activity.  Id.  Commerce

declined to initiate an investigation on four other programs alleged in the petition.  Id. 125 CR/PR at Table IV‐8.

126 CR/PR at Tables III‐5, C‐1.  U.S. producers’ U.S. shipments by quantity were *** short tons in

2010, *** short tons in 2011, *** short tons in 2012, *** short tons in interim 2012, and *** short tons

in interim 2013.  CR/PR at Table III‐5.  U.S. producers’ U.S. shipments by value were $*** in 2010, $***

in 2011, $*** in 2012, $*** in interim 2012, and $*** in interim 2013.  Id.   

U.S. producers’ end‐of‐period inventories declined during the POI, 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‐7.
28

in interim 2013.127 The industry’s production capacity was unchanged:  it was *** short tons

from 2010 to 2012 and *** short tons in interim 2012 and interim 2013.128  Its capacity

utilization was *** percent in 2010, *** percent in 2011, *** percent in 2012, *** percent in

interim 2012, and *** percent in interim 2013.129  

While the quantity of U.S. shipments increased from 2010 to 2012, production declined,

largely because of a concurrent substantial reduction in export shipments.  U.S. producers’

export shipments declined overall by quantity by *** percent between 2010 and 2012 while

declining overall by value by *** percent.  Export shipments by quantity were *** percent

lower, and by value were *** percent lower, in interim 2013 than in interim 2012.130  

The number of production workers, hours worked, and wages paid declined between

2010 and 2012; these indicators were lower in interim 2013 than in interim 2012.131   

Several key financial indicators declined as the domestic industry experienced price

declines and was unable to increase prices to cover rising costs.  Sales revenue increased from

$*** in 2010 to $*** in 2011, but declined to $*** in 2012, and was lower in interim 2013 than

in interim 2012.132  As previously discussed, unit sales value declined from 2010 to 2012, and

was lower in interim 2013 than in interim 2012, notwithstanding concurrent increases in unit

COGS.133  Declines in overall and per‐unit revenues while costs were increasing led to sharp

declines in the domestic industry’s operating income.  Operating income fell from $*** in 2010

to $*** in 2011, and then to $*** in 2012.134 Operating performance also was much worse in

interim 2013, when the industry ***, than in interim 2012 when its ***.135  The ratio of

operating income to net sales fell by *** percentage points from 2010 to 2012, with operating

margins declining from *** percent in 2010 to *** percent in 2011 and then to *** percent in

                                                      

127 CR/PR at Table III‐3.

128 CR/PR at Table III‐3.

129 CR/PR at Table III‐3.   130 CR/PR at Tables III‐5, C‐1.  U.S. producers’ export shipments by quantity rose from *** short

tons in 2010 to *** short tons in 2011, and then declined to *** short tons in 2012.  They were ***

short tons in interim 2012 and *** short tons in interim 2013.  CR/PR at Table III‐5.  U.S. producers’

export shipments (by value) were $*** in 2010, $*** in 2011, $*** in 2012, $*** in interim 2012, and

$*** in interim 2013.  Id.    131 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‐8.    132 CR/PR at Table VI‐1.

133 CR/PR at Table VI‐1.

134 CR/PR at Table VI‐1.     135 CR/PR at Table VI‐1.  
29

2012.136  Operating margins also were lower in interim 2013, at *** percent, than in interim

2012, at *** percent.137

In light of the domestic industry’s deteriorating financial condition during the POI, the

significant volume of cumulated subject imports, our finding with respect to the substitutability

of the domestic like product and subject imports, the importance of price in purchasing

decisions, the presence of underselling, and the fact that the domestic industry experienced

price declines and a cost‐price squeeze, we cannot conclude on this record that subject imports

did not cause the industry’s declines in revenues and operating performance.

We have also considered the role of other factors in our assessment of the impact of the

subject imports.  As discussed above, nonsubject imports were not a significant presence in the

U.S. market during the POI.138  Accordingly, we do not find the small volume of nonsubject

imports to be a cause of the difficulties experienced by the domestic industry.139   

Respondent parties argue that the domestic industry’s condition is caused by factors

other than subject imports, including declines in domestic producers’ export shipments,

competition between the domestic producers, and U.S. prices declining to world price levels.140  

There is limited information in the record of these preliminary phase investigations to permit us

to assess the impact of these alleged other factors.  Consequently, based on the record in these

preliminary phase investigations, 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 in any final phase investigations to examine

those factors and their effect on the domestic industry.    

In sum, the record as a whole in the preliminary phase of these investigations does not

contain clear and convincing evidence that there is no reasonable indication of material injury

to the domestic industry by reason of cumulated subject imports.   We have therefore reached

affirmative preliminary determinations.     

                                                      

136 CR/PR at Table VI‐1.  The domestic industry’s aggregate capital expenditures declined during

the POI from $*** in 2010 to $*** in 2011, and $*** in 2012; capital expenditures were $*** in interim

2012 and $*** in interim 2013.  CR/PR at Table VI‐5.  Research and development expenditures rose

from 2010 to 2012, and were lower in interim 2013 than in interim 2012.  Id.

137 CR/PR at Table IV‐1.

138 As discussed earlier, nonsubject imports’ market share 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.   139 Commissioner Pinkert finds that, regardless of whether GOES is a commodity product  for

purposes of the Bratsk/Mittal Steel analysis, he need not perform that analysis in these investigations

because nonsubject imports were not a significant factor in the U.S. market during the POI.  Nonsubject

imports had a U.S. market share that ranged between *** and *** percent throughout the POI.  CR/PR

at Table IV‐8.

140 E.g., Baosteel Postconference Brief at 6‐8, Japanese Producers Postconference Brief at 14‐27,

ThyssenKrupp Postconference Brief at 10‐12, NLMK Postconference Brief at 9‐10.    
VII. C

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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

counsel on behalf of AK Steel Corp. (“AK Steel”), West Chester, Ohio; Allegheny Ludlum, LLC,

(“Allegheny Ludlum”), Pittsburgh, Pennsylvania; and the United Steelworkers (“USW”),1

Pittsburgh, Pennsylvania, on September 18, 2013, alleging that an industry in the United States

is materially injured and threatened with material injury by reason of subsidized imports of

grain‐oriented electrical steel (“GOES”)2 from China and by reason of less‐than‐fair‐value

(“LTFV”) imports of GOES from China, the Czech Republic, Germany, Japan, Korea, Poland, and

Russia. The following tabulation provides information relating to the background of these

investigations.3 4  

Effective date Action 

September 18, 2013 

Petition filed with Commerce and the Commission; institution of Commission 

investigation (78 FR 59059, September 25, 2013) 

October 21, 2013 

Tolling of activity in antidumping and countervailing duty proceedings (78 FR 

64011, October 25, 2013) 

October 25, 2013 Commission’s conference 

October 31, 2013 Commerce’s notices of initiation (78 FR 65265 and 78 FR 65283) 

November 19, 2013 Commission’s vote 

November 20, 2013 Commission’s determinations 

November 27, 2013 Commission’s views 

   

                                                      

1 The USW represents employees of Allegheny Ludlum that are engaged in the production of GOES in

the United States. 2 See the section entitled “The Subject Merchandise” in Part I of this report for a complete

description of the merchandise subject to these investigations.

3 Pertinent Federal Register notices are referenced in app. A, and may be found at the Commission’s

website (www.usitc.gov). 4 A list of witnesses appearing at the conference is presented in app. B of this report.
I‐2

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

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
I‐3

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/dumping margins, and domestic like product. 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, 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. producers. 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

GOES is primarily used in the production of laminated cores for large and medium‐sized

electrical power transformers and distribution transformers. There are two U.S. producers of

GOES: AK Steel and Allegheny Ludlum. Leading producers of GOES outside the United States

and leading U.S. importers of GOES are listed in table I‐1.  There are a relatively small number

of large purchasers of GOES in the United States, which are generally producers of power and

distribution transformers.5

Apparent U.S. consumption of GOES totaled *** short tons ($***) in 2012. U.S.

producers’ U.S. shipments of GOES 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 *** short tons ($***) in 2012 and accounted for *** percent of

apparent U.S. consumption by quantity and *** percent by value. U.S. imports from nonsubject

sources totaled *** short tons ($***) in 2012 and accounted for *** percent of apparent U.S.

consumption by quantity and *** percent by value.  

                                                      

5 Petitioners’ postconference brief, p. 2.
I‐4

Table I-1 

GOES: Leading producers outside the United States and leading U.S. importers 

Country Producers/exporters U.S. importers 

Subject countries 

China 

Anshan Iron & Steel Group Corp. 

Baoshan Iron & Steel Co., Ltd. 

Hebei Shougang Qian'an Iron & Steel Co., Ltd. 

Wuhan Iron & Steel Co. Ltd. *** 

Czech Republic ArcelorMittal Frýdek-Místek a.s. *** 

Germany ThyssenKrupp Electrical Steel GmbH *** 

Japan 

JFE Steel Corp. 

Nippon Steel & Sumitomo Metal Corp. *** 

Korea POSCO *** 

Poland Stalprodukt S.A. *** 

Russia 

Novolipetsk Steel (“NLMK”) 

PJSC Ashinskiy Metallurgical Works (exporter) *** 

Nonsubject countries 

France ThyssenKrupp Electrical Steel UGO S.A.S. *** 

Italy Legnano *** 

United Kingdom Cogent *** 

Source: Compiled from data submitted in response to Commission questionnaires. 

SUMMARY DATA AND DATA SOURCES

A summary of data collected in these investigations is presented in appendix C, table C‐

1.6 Except as noted, U.S. industry data are based on questionnaire responses of two firms that

accounted for 100 percent of U.S. production of GOES during 2012. U.S. imports are based on

official U.S. import statistics, as adjusted.  

PREVIOUS AND RELATED INVESTIGATIONS

GOES has been the subject of several prior petitions and proceedings before the

Commission. These petitions and proceedings are explained below.  

Safeguard investigations

The domestic GOES industry previously sought relief pursuant to section 201 of the

Trade Act of 1974. In 1984, following a request from the United States Trade Representative

                                                      

6 A summary of data that includes Temporary Importation under Bond (“TIB”) imports reported by

U.S. importer *** is presented in appendix C, table C‐2. *** imported *** short tons ($***) of GOES

from *** during 2012 under the TIB program. These TIB imports were re‐exported to ***.
I‐5

(“USTR”), the Commission initiated a section 201 investigation on U.S. imports of carbon and

certain alloy steel products, including U.S. imports of GOES. In that investigation, the

Commission determined that certain steel products, including GOES, were being imported into

the United States in such increased quantities as to be a substantial cause of  serious injury to

the domestic industry and recommended a five‐year program of tariffs and  quotas. President

Reagan, however, determined that import relief was not in the national economic interest, and

instead established a national policy for the steel industry that led to the creation of several

voluntary restraint agreements.  GOES was among the products subject to a voluntary restraint

agreement until the program expired in 1992.

Following receipt of a request from USTR on June 22, 2001, the Commission instituted

investigation No. TA‐201‐73, Steel, under section 202 of the Trade Act of 19747 to determine

whether certain steel products, including GOES, were being imported into the United States in

such increased quantities as to be a substantial cause of serious injury, or the threat thereof, to

the domestic industries producing articles like or directly competitive with the imported

article.8 On July 26, 2001, the Commission received a resolution adopted by the Committee on

Finance of the U.S. Senate (“Senate Finance Committee” or “Committee”) requesting that the

Commission investigate certain steel imports under section 201 of the Trade Act of 1974.9

Consistent with the Senate Finance Committee’s resolution, the Commission consolidated the

investigation requested by the Committee with the Commission’s previously instituted

investigation No. TA‐201‐73.10 On December 20, 2001, the Commission issued its

determinations and remedy recommendations. The Commission made a negative

determination with respect to GOES.11

Patent infringement proceeding

Domestic producer Allegheny Ludlum filed a petition under section 337 of the Act in

1988, alleging that GOES produced by Nippon Steel Corp. and imported into the United States

was produced in violation of a patent held by Allegheny Ludlum. The Commission did not

initiate a section 337 investigation because Allegheny Ludlum did not produce a product

pursuant to its own patent and, therefore, did not satisfy the statute’s definition of an

“industry.”12

                                                      

7 19 U.S.C. § 2252.

8 Institution and Scheduling of an Investigation under Section 202 of the Trade Act of 1974 (19 U.S.C.

2252) (the Act), 66 FR 35267, July 3, 2001.

9 19 U.S.C. § 2251.

10 Consolidation of Senate Finance Committee Resolution Requesting a Section 201 Investigation with

the Investigation Requested by the United States Trade Representative on June 22, 2001, 66 FR 44158,

August 22, 2001. 11 Steel; Import Investigations, 66 FR 67304, December 28, 2001. 12 Grain‐Oriented Silicon Electrical Steel From Italy and Japan, Inv. Nos. 701‐TA‐355 and 731‐TA‐659‐

660 (Review), USITC Publication 3396, February 2001, p. I‐2.
I‐6

Antidumping and countervailing duty proceedings

Original investigations

In 1993, GOES was the subject of antidumping and countervailing duty investigations

with respect to imports from Italy and Japan. Following affirmative determinations by

Commerce and the Commission, a countervailing duty order covering U.S. imports of GOES

from Italy was published on June 7, 1994, an antidumping duty order was published on U.S.

imports of GOES from Japan on June 10, 1994, and an antidumping duty order was published

on imports of GOES from Italy on August 12, 1994.13

First five‐year reviews

On December 1, 1999, both Commerce and the Commission initiated the first five‐year

reviews of the antidumping and countervailing duty orders on GOES from Italy and Japan. The

Commission determined that revocation of the countervailing duty order on imports of GOES

from Italy and revocation of the antidumping duty orders on imports of GOES from Italy and

Japan would be likely to lead to continuation or recurrence of material injury to an industry in

the United States within a reasonably foreseeable time.14 On March 14, 2001, the Department

published a notice of the continuation of the antidumping and countervailing duty orders.15  

First remand

Italian and Japanese producers, exporters, and importers of the subject merchandise

appealed the Commission’s determinations to the U.S. Court of International Trade (“CIT”). On

December 24, 2002, the CIT remanded the Commission’s determinations on the grounds that

the Commission did not apply the correct “likely” standard; that the Commission failed to

specifically discuss each of the four factors outlined in 19 U.S.C. §1675a(a)(2)(A)‐(D); and that

the Commission failed to discuss whether the likely volume of imports of subject merchandise

would be significant in absolute terms or relative to U.S. production and consumption, pursuant

to 19 U.S.C. 5 1675a(a)(2).16

On remand, the Commission again found that revocation of the countervailing duty

order on GOES from Italy, and the antidumping duty orders on GOES from Italy and Japan

                                                      

13 Grain‐Oriented Silicon Electrical Steel From Italy and Japan, Inv. Nos. 701‐TA‐355 and 731‐TA‐659‐

660 (Review), USITC Publication 3396, February 2001, p. I‐2. 14 Grain‐Oriented Silicon Electrical Steel From Italy and Japan, Inv. Nos. 701‐TA‐355 and 731‐TA‐659‐

660 (Review), USITC Publication 3396, February 2001, p. 1. Chairman Koplan, Commissioner Miller, and

Commissioner Devaney made affirmative determinations, while Vice Chairman Okun, Commissioner

Bragg, and Commissioner Hillman dissented.

15 Continuation of Antidumping Duty Orders and Countervailing Duty Order: Grain‐Oriented Silicon

Electrical Steel From Italy and Japan, 50 FR 14889, March 14, 2001.

16 Nippon Steel Corp., et al. v. United States, Slip Op. 02‐153, December 24, 2002, p. 15.
I‐7

would be likely to lead to a continuation or recurrence of material injury to an industry in the

United States within a reasonably foreseeable time.17  

Second remand

On December 17, 2003, the CIT issued an opinion remanding the Commission’s remand

determination. Although the CIT found that the Commission had complied with its instructions

regarding “likely” and the four enumerated statutory factors, the CIT found that several of the

Commission’s findings either required further explanation or were not supported by substantial

evidence. Accordingly, the CIT remanded the Commission’s no discernible adverse impact,

cumulation, likely volume, likely price and likely impact findings for reconsideration. The CIT

instructed the Commission to “revisit the evidence cited for its findings with respect to

cumulation and likelihood of continuation or recurrence of material injury and satisfy its

obligations with specific reference to the evidence it claims supports its conclusions and

adequate explanations of its findings based on this evidence.” The CIT further ordered that the

Commission address certain evidence it believed “fairly detracts” from the weight of the

evidence supporting the Commission’s determinations.18

On second remand, the Commission found that revocation of the countervailing duty

order on GOES from Italy, and the antidumping duty orders on GOES from Italy and Japan,

would be likely to lead to a continuation or recurrence of material injury to an industry in the

United States within a reasonably foreseeable time.19

Third remand

On June 15, 2005, the Court issued an opinion affirming in part and remanding in part

the Commission’s affirmative determination on second remand. The Commission’s

determination was affirmed with respect to discernible adverse impact, cumulation, and likely

price effects. However, the CIT found that the Commission’s likely volume and likely impact

findings were not supported by substantial evidence.20 Upon consideration of the third remand

order, the Commission determined that revocation of the countervailing duty order on GOES

from Italy and the antidumping duty orders on GOES from Italy and Japan would not likely lead

                                                      

17 Grain‐Oriented Silicon Electrical Steel from Italy and Japan, Inv. Nos. 701‐TA‐355 and 731‐TA‐659‐

660 (Review) (Remand), USITC Publication 3585, March 2003, p. 1. Commissioners Miller and Koplan

made affirmative determinations, while Chairman Okun and Vice Chairman Hillman made negative

determinations.

18 Nippon Steel Corp., et al. v. United States, 301 F. Supp 1355 (CIT 2003).

19 Grain‐Oriented Silicon Electrical Steel from Italy and Japan, Inv. Nos. 701‐TA‐355 and 731‐TA‐659‐

660 (Review) (Second Remand), USITC Publication 3680, March 2004, p. 1. Commissioner Koplan,

Commissioner Miller, and Commissioner Lane made affirmative determinations, while Chairman Okun,

Vice Chairman Hillman, and Commissioner Pearson made negative determinations.   20 Nippon Steel Corp., et al. v. United States, Slip Op. 05‐72, June 15, 2005.
I‐8

to the continuation or recurrence of material injury to an industry in the United States within a

reasonably foreseeable time.21  

On May 30, 2006, the CIT affirmed the Commission's third remand determination.

Following an appeal by the domestic industry to the U.S. Court of Appeals for the Federal

Circuit, the CIT's decision was reversed and vacated. On October 10, 2007, and pursuant to the

Federal Circuit's mandate, the CIT sustained the Commission’s second remand determination

and reinstated the affirmative injury determination.22

Second five‐year reviews

On February 1, 2006, Commerce and the Commission initiated the second five‐year

reviews of the antidumping and countervailing duty orders.23 At that time, the domestic

industry chose not to participate in the reviews because it believed subject imports from Italy

and Japan were unlikely to cause a recurrence of material injury to the domestic industry.24 As a

result, the antidumping and countervailing duty orders on GOES from Italy and Japan were

revoked effective March 14, 2006.25

NATURE AND EXTENT OF ALLEGED SUBSIDIES AND SALES AT LTFV

Alleged subsidies

On October 31, 2013, Commerce published a notice in the Federal Register of the

initiation of its countervailing duty investigation on GOES from China.26 Commerce identified

the following government programs in China:27  

   

                                                      

21 Grain‐Oriented Silicon Electrical Steel From Italy and Japan, Inv. Nos. 701‐TA‐355 (Review) (Third

Remand) and 731‐TA‐659‐660 (Review) (Third Remand), USITC Publication 3798, September 2005, p. 1.

Vice Chairman Okun and Commissioners Hillman and Pearson made negative determinations, while

Chairman Koplan and Commissioner Lane made affirmative determinations. Commissioner Aranoff did

not participate in the third remand proceeding. 22 Nippon Steel Corp. v. United States, 31 C.I.T. 1588 (2007).

23 Initiation of Five‐Year (“Sunset”) Reviews, 70 FR 5243, February 1, 2006; and Grain‐Oriented Silicon

Electrical Steel from Italy and Japan, 70 FR 5376, February 1, 2006.

24 Petition, p. 8.

25 Grain‐Oriented Electrical Steel From Italy and Japan: Final Results of Sunset Reviews and  

Revocation of Orders, 59 FR 15376, March 28, 2006.

26 Grain‐Oriented Electrical Steel from the People’s Republic of China: Initiation of Countervailing Duty

Investigation, 78 FR 65265, October 31, 2013.

27 Enforcement and Compliance Office of AD/CVD Enforcement CVD Investigations Initiation Checklist,

October 24, 2013.
I‐9

I. Programs on which the Department is Initiating an Investigation

A. Loan Programs

1. Policy Loans to the GOES Industry

2. Preferential Export Financing by the Export‐Import Bank of China

3. Preferential Loans for state‐owned enterprises

B. Tax Programs

1. Income Tax Reductions for high‐ or new‐technology enterprises

2. Income Tax Credits for Domestically‐Owned Companies Purchasing

    Domestically‐Produced Equipment

3. Import Tariff and Value‐Added Tax Exemptions for Foreign  

    Invested Enterprises and Certain Domestic Enterprises Using Imported

    Equipment in Encouraged Industries

C. Government Provision of Goods and Services for Less Than Adequate  

     Remuneration

1. Government Provision of Land‐Use Rights for Less Than Adequate  

    Remuneration

2. Provision of Electricity for Less Than Adequate Remuneration

     D. Government Purchases of Goods for More Than Adequate Remuneration

1. Government of China Purchases of GOES for More Than  

     Adequate Remuneration

E. Grant Programs

1. State Key Technology Project Fund

2. Special Fund for Energy Savings Technology Reform

3. Grants to Angang

4. Grants to Baosteel

5. Grants to WISCO

II. Alleged Programs on which the Department is not Initiating an Investigation

1. Grants to Cover Legal Fees in Trade Remedy Cases

    2. The State Science and Technology Support Scheme

3. Export Rebates for Mechanic, Electronic and High‐Tech Products

4. Grants for Listing Shares

Alleged sales at LTFV

On October 31, 2013, Commerce published a notice in the Federal Register of the

initiation of its antidumping duty investigations on GOES from China,the Czech Republic,

Germany, Japan, Korea, Poland, and Russia.28 Commerce has initiated antidumping duty

investigations based on the estimated dumping margins of 159.21 percent for GOES from

                                                      

28 Grain‐Oriented Electrical Steel From the People’s Republic of China, the Czech Republic, Germany,

Japan, the Republic of Korea, Poland, and the Russian Federation: Initiation of Antidumping Duty

Investigations, 78 FR 65283, October 31, 2013.
I‐10

China, 68.46 percent to 235.50 percent for GOES from Czech Republic, 38.54 percent to 241.91

percent for GOES from Germany, 44.95 percent to 172.30 percent for GOES from Japan, 49.51

percent to 257.61 percent for GOES from Korea, 56.69 percent to 99.51 percent for GOES from

Poland, and 43.52 percent to 119.88 percent for GOES from Russia.

THE SUBJECT MERCHANDISE

Commerce’s scope

Commerce has defined the scope of these investigations as follows:

The scope of these investigations covers grain‐oriented silicon electrical

steel (GOES). GOES is a flat‐rolled alloy steel product containing by weight

at least 0.6 percent but not more than 6 percent of silicon, not more than

0.08 percent of carbon, not more than 1.0 percent of aluminum, and no

other element in an amount that would give the steel the characteristics

of another alloy steel, in coils or in straight lengths. The GOES that is

subject to these investigations is currently classifiable under subheadings

7225.11.0000, 7226.11.1000, 7226.11.9030, and 7226.11.9060 of the

Harmonized Tariff Schedule of the United States (HTSUS). Although the

HTSUS subheadings are provided for convenience and customs purposes,

the written description of the scope of these investigations is

dispositive.29

Tariff Treatment

The imported GOES subject to these investigations is classified in subheadings

7225.11.00, 7226.11.10, and 7226.11.90 of the Harmonized Tariff Schedule of the United States

(“HTS”) and imported under statistical reporting numbers 7225.11.0000, 7226.11.1000,

7226.11.9030, and 7226.11.9060. The HTS subheading numbers are provided for convenience

and customs purposes only; the written description of the scope of these investigations is

dispositive. The column‐1 general (normal trade relations) rate of duty for these subheadings,

applicable to the products subject to these investigations, is free.

                                                      

29 Grain‐Oriented Electrical Steel from the People’s Republic of China: Initiation of Countervailing Duty

Investigation, 78 FR 65265, October 31, 2013; and Grain‐Oriented Electrical Steel From the People’s

Republic of China, the Czech Republic, Germany, Japan, the Republic of Korea, Poland, and the Russian

Federation: Initiation of Antidumping Duty Investigations, 78 FR 65283, October 31, 2013.
I‐11

THE PRODUCT30

Description and applications

The product covered by these investigations, as defined by Commerce, is grain‐oriented

electrical steel (“GOES”), which is a flat‐rolled alloy steel product containing by weight at least

0.6 percent but not more than 6 percent of silicon, not more than 0.08 percent of carbon, not

more than 1.0 percent of aluminum, and no other element in a proportion that would give the

steel the characteristics of another alloy steel.

GOES is sold in either sheet or strip form, either in coils or in straight lengths. GOES,

which typically contains approximately 3.2 percent by weight of silicon, is subject to specialized

rolling and annealing (heat treatment) processes, which produce grain structures uniformly

oriented in the rolling (or lengthwise) direction of the steel sheet. This uniformly oriented grain

structure permits the steel sheet to conduct a magnetic field with a high degree of efficiency in

the direction of rolling compared with other steels such as non‐oriented silicon electrical steel

(“NOES”).  As a result, GOES has superior magnetic properties compared with NOES, both in

terms of higher permeability and lower core loss.31 Both domestic and imported GOES are

produced in compliance with specifications issued by the ASTM International (“ASTM”),32 or

proprietary specifications.

GOES is used primarily in the production of laminated cores for large and medium‐sized

electrical power transformers and distribution transformers. 33 GOES is produced in nominal

thicknesses ranging from 0.0138 inch (0.35 mm) down to 0.007 inch (0.18 mm). Thinner

                                                      

30 Except as noted, information presented in the “Description and Applications” and “Manufacturing

Processes” is drawn from Grain‐Oriented Silicon Electrical Steel from Italy and Japan, Inv. Nos. 701‐TA‐

355 and 731‐TA‐659‐660 (Review), USITC Publication 3396, February 2001.

31 “Permeability” refers to the ease with which magnetic lines of force distribute themselves

throughout a material, or more generally, the ease of magnetization of the GOES product in response to

a magnetic field. “Core loss” refers to the measure of the amount of electrical energy that is lost as heat

when magnetic flux flows through the steel.

32 ASTM International was previously known as American Society for Testing and Materials.  

Specification ASTM A876/A876M covers conventional GOES, high‐permeability GOES, and laser‐scribed

high‐permeability GOES. The domestic industry produces a wide range of GOES, including conventional

GOES in standard thicknesses from 0.007 inch (0.18 mm) through 0.0138 inch (0.35 mm), and both high‐

permeability GOES and laser‐scribed high‐permeability GOES in two standard thicknesses. The

conventional products in the standard thicknesses are often called American Iron and Steel Institute

(“AISI”) type numbers M‐2 through M‐6, although the use of these numbers is not recommended by

ASTM. Within each type of GOES, magnetic characteristics may differ in that the same product made by

two producers may have difference average core losses.

33 Transformers are electrical apparatus that transfer electrical energy from one electrical circuit to

another without any direct electrical connection by the electromagnetic induction of an alternating

electrical current between two or more magnetically coupled coils or windings. Transformers are used

to either increase (step‐up) or decrease (step‐down) the voltage of an alternating electrical current in

various circuits in electrical equipment.
I‐12

laminations yield lower core loss in transformers and because of this, are often used despite

the added cost for both the steel and the manufacturing of the transformer core. Laminations

for transformer cores are oriented within the transformers to take advantage of the directional

magnetic properties of the steel.

The directional magnetic properties of the grain‐oriented electrical steel allow for the

transformation of electrical power from one voltage to another of an alternating electrical

current (figure I‐1). Power transformers are used to raise the voltage of electric power from the

level at which it is generated by a power plant to a higher level for more efficient transmission,

and to lower voltage to levels suitable for local distribution. Distribution transformers, in turn,

further reduce electrical voltage to levels suitable for commercial and residential consumers.

Figure I-1 

GOES: An alternating current in the primary winding induces a varying magnetic flux in the 

transformer core and secondary winding, which induces a secondary voltage of alternating 

current in the secondary winding 

Source: Galco Industrial Electronics website, found at http://www.galco.com/comp/prod/trnsfmrs.htm, retrieved 

October 18, 2013. 

   
I‐13

In addition to variations in thickness, GOES is produced in different levels of magnetic

permeability: “conventional” and “high permeability.”  High‐permeability product allows a

transformer to operate at a higher level of flux density34 than does conventional product, thus

permitting a transformer to be smaller and have lower operating losses. High‐permeability

product is also produced as a domain‐refined type that has even lower core loss at high flux

density. Domain refinement occurs by scribing thin lines onto the surface of the steel, using

laser scribing, mechanical scribing, or electrolytic etching. Product produced by laser scribing

does not retain its enhanced magnetic characteristics when it is heat‐treated to relieve internal

stresses. As a result, laser‐scribed GOES is not used to produce wound‐core transformers,

described below, that undergo heat‐treatment to relieve internal stresses following their

manufacturing. By contrast, domain‐refined GOES produced by mechanical scribing or

electrolytic etching retains its enhanced magnetic characteristics through stress relief.

The finish on GOES usually consists of an inorganic surface coating called coreplate,

which serves as an electrical insulation between laminations. This insulation helps reduce core

loss.  

Electrical transformers are produced with either stacked or wound cores (figure I‐2).  In

stacked cores, GOES is sheared or stamped into individual laminations, which are then stacked

together to form the core. In smaller transformers, a special finish called “punching quality”

may be applied to stamped laminations that comprise the core. In wound cores, a continuous

length of GOES is wound around a mandrel multiple times to form the core. Wound cores

undergo heat‐treatment to relieve internal stresses following their manufacturing. Copper

windings (electricity conductors) are wrapped around both stacked and wound cores.

                                                      

34 “Flux density” generally refers to total number of magnetic lines of force per unit area. It can also

be understood as the density of magnetic lines of force, or magnetic flux lines, passing through a specific

area.
I‐14

Figure I-2 

GOES: An example of a stacked core (left) and a wound core (right) 

Sources: Navy-Marine Corps Military Auxiliary Radio System (MARS), found at 

http://www.navymars.org/national/training/nmo_courses/NMO2/Module2/14174_ch5.pdf, retrieved October 18, 

2013; Technical Associated Ltd. website, found at 

http://www.techasso.com/Single%20Phase%20Wound%20Core%20transformers.htm, retrieved October 18, 

2013. 

Manufacturing processes   

The production of GOES begins with the steel melting process, during which steel scrap

and/or iron ore, and ferroalloys (primarily ferrosilicon) are melted either in an electric‐arc

furnace or a basic‐oxygen furnace.  Molten steel is then transferred to a vacuum degassing

station, where the steel’s chemistry is refined by reducing both dissolved gasses and the carbon

content of the steel. The steel is then continuously cast into slabs or is cast into ingots that are

subsequently hot rolled into slabs.

The slabs may be reheated and rolled on a continuous hot‐strip mill to produce hot‐

rolled coils. The coils are then annealed and pickled (cleaned with acid to remove surface oxide)

in a continuous processing line, and then cold reduced on either a multi‐stand tandem cold‐

rolling mill or a reversing cold‐rolling mill. The coils undergo this process twice to reach the final

thickness.

The product is then processed through a line in which it is decarburized by heating in a

controlled atmosphere and then coated with a magnesium oxide coating. It is then annealed at

a high temperature in its coil form, a process that takes 5 or 6 days. The magnesium oxide

prevents the layers of the coils from sticking together during the annealing process and also
I‐15

fuses partially, forming a surface on the steel of a glass‐like coating referred to as “mill‐glass” or

“glass film” even though it is not technically a glass. The mill‐glass coating is also known as C‐2

coreplate.

The coils are then processed through a continuous line in which excess magnesium

oxide is removed by scrubbing. The coil is then heat flattened and a second coating is applied.35

To manufacture punching‐quality GOES, the mill‐glass or C‐2 coating is removed by pickling in

acid before the second coreplate coating is applied. The coating applied to produce punching‐

quality GOES is an inorganic or mostly inorganic coating called C‐5 coreplate, with ceramic

fillers or film‐forming components to increase the insulating ability of the coating. Finally, the

product may be slit to a final width if necessary and packaged for shipment.

Foreign producers in China, the Czech Republic, Germany, Japan, Korea, Poland, and

Russia generally use the same processes to produce GOES. Both U.S. producers of GOES

produce additional products using some of the same equipment, machinery, and production

workers that are used to produce GOES, including flat‐rolled stainless steel sheet. AK Steel also

produces non‐oriented electrical steel (“NOES”) at some of the same facilities used to produce

GOES.  

DOMESTIC LIKE PRODUCT ISSUES

The Commission’s decision regarding the appropriate domestic products 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 past Commission determinations in related proceedings

concerning the domestic like product, the petitioners’ and respondents’ positions on the

domestic like product in these proceedings, and the factors the Commission considers in

making a domestic like product determination is discussed below.  

In the original investigations and first five‐year reviews concerning GOES from Italy and

Japan, the Commission found that all types of GOES comprised a single domestic like product.

The Commission rejected arguments advanced in the original investigations by the Japanese

producers that high permeability and conventional grades of GOES constituted separate

domestic like products, finding that the different grades represented a continuum of products.

The Commission further found that the different grades of GOES were chemically alike,

possessed essentially the same physical characteristics, were marketed through the same

channels of distribution, had similar uses, were interchangeable to a certain degree, and shared

common production facilities. In the first five‐year reviews concerning the orders on GOES

imports from Italy and Japan, parties raised no new like product issues, there were no

significant changes in the nature, uses, and manufacture of GOES since the original

                                                      

35 AK Steel produces domain‐refined GOES by laser‐scribing lines on the surface of the steel using

equipment installed on its heat flattening and coating lines. The laser scribing occurs after scrubbing and

heat flattening, but before the coating is applied to the steel.  
I‐16

investigations, and there was no information that indicated a need to revisit the Commission’s

definition of the domestic like products in the original determinations.36

The petitioners propose that the Commission should define the domestic like product in

these investigations to encompass all GOES, including both conventional and high permeability

GOES products, co‐extensive with the scope of the case.37 The petitioners argue that a

determination by the Commission defining the domestic like product as co‐extensive with the

scope of the investigation would be consistent with past Commission findings and the

Commission's traditional like product analysis: (1) all GOES has the same basic physical

characteristics ‐ both with respect to its physical form and chemistry – and virtually all GOES has

the same uses ‐ in the production of electric power and distribution transformers; (2)

conventional and high permeability GOES are made in common manufacturing facilities, using

similar production processes, and the same production employees; (3) conventional and high

permeability grades of GOES are separately designated in the market but are generally

interchangeable with end users within one or two grade steps; (4) customers and producers

generally perceive both types of GOES to be suitable for the construction of cores in

transformers that are used in the generation and distribution of electricity; and (5) all GOES is

sold in the same channels of distribution ‐ primarily direct to end users (transformer

manufacturers) and to a lesser extent to processors that slit coils of GOES and/or manufacture

laminations that are used in building a transformer core. The petitioners added that none of the

respondent witnesses appearing at the staff conference raised any argument suggesting that

the Commission should find anything other than a single domestic like product, and such a

determination would be consistent with the Commission’s prior proceedings involving GOES.38

Although no respondent parties presented any arguments or data requests for an

alternative domestic like product at the staff conference in these investigations, the Chinese

and Russian respondents provided comments in their postconference briefs. Chinese

respondents Baoshan Iron & Steel Co., Ltd. and Baosteel America, Inc. note in their

postconference brief that “The respondents did not raise at this preliminary stage any issues on

cumulation of subject imports or on like product that would justify collecting additional

information and analyzing the data differently for the final investigation.”39 Russian respondent

NLMK argues that although the Commission considered the issue of whether conventional and

high permeability GOES were separate like products in the previous proceedings and found one

domestic like product, the conditions of competition have changed such that the Commission

should reconsider its previous decisions. It further argues that, in October 2007, the

Department of Energy (“DOE”) adopted revised energy efficiency standards that changed the

market and created two distinct like products within GOES. It explains that conventional GOES

is designated as grades M2, M3, M4, and M6 and higher grades are designated as high

                                                      

36 Grain‐Oriented Silicon Electrical Steel From Italy and Japan, Inv. Nos. 701‐TA‐355 and 731‐TA‐659‐

660 (Review), USITC Publication 3396, February 2001, p. 5.

37 Petition, p. 14.

38 Petitioners’ postconference brief, pp. 3‐6.

39 Baoshan Iron & Steel Co., Ltd. and Baosteel America, Inc. ("Baosteel"), postconference brief, p. 9.
I‐17

permeability steel and amorphous steel. NLMK argues that, prior to 2007, these grades of GOES

may have been a continuum of products which were substitutable with each other to some

degree, but the DOE regulations have made it “technically impossible to substitute between

grades M4/M6 for higher grades.”40

Physical characteristics and uses

GOES is a flat‐rolled alloy steel product having a grain structure that permits it to

conduct a magnetic field with a high degree of efficiency. It primarily consists of a flat‐rolled

alloy steel product containing by weight at least 0.6 percent but not more than 6 percent of

silicon, not more than 0.08 percent of carbon, not more than 1.0 percent of aluminum, and no

other element in a proportion that would give the steel the characteristics of another alloy

steel. It is used primarily in the production of laminated cores for large and medium‐sized

electrical power transformers and distribution transformers.  

Both conventional and high permeability GOES have similar physical forms and

chemistry, but possess different levels of magnetic permeability. Both are used in power and

distribution transformers, but the use of high permeability GOES can allow a transformer to

operate at a higher level of flux density than conventional GOES, thus permitting a transformer

to be smaller and have lower operating losses.

Manufacturing facilities and production employees

AK Steel, ***, manufactures both conventional and high permeability GOES on the same

production equipment using the same manufacturing processes.41 Allegheny Ludlum’s

production of GOES is concentrated on the conventional grades but indicates that it is in the

process of expanding its product mix to include high permeability GOES and has successfully

produced and shipped high permeability GOES in trial orders to select customers.42

Interchangeability and customer and producer perceptions

U.S. producers argue that conventional grades of GOES compete with high permeability

products to a certain degree (i.e., within one or two grade steps) with purchasers evaluating

different grades of GOES to minimize the total owning costs of a transformer.43  AK Steel

testified at the staff conference, “So based upon the type of transformer they're designing, the

efficiency standards, the capabilities of the transformer, you have a range of products you

could use that you can then consider what the core loss is of that product versus the price and

figure out the best ratio of that core loss to determine the overall lowest own cost of the

                                                      

40 NLMK postconference brief, pp. 3‐4. 41 Conference transcript, p. 21 (Peterson).

42 Conference transcript, p. 27 (Polinski).

43 Conference transcript, p. 38 (Hermann), pp. 27 and 53‐54 (Polinski), and p. 57 (Schoen).
I‐18

transformer.”44 As previously indicated, Russian respondent NLMK argues that DOE energy

efficiency standards for transformers have changed the GOES market such that there is no

longer a continuum of grades for GOES in which different grades are substitutable with each

other to some degree within several grade steps.45

Channels of distribution

Although the Commission did not collect separate data specific to channels of

distribution for conventional and high‐permeability GOES, AK Steel reported that it sells both

conventional and high‐permeability GOES *** to end users, with a *** amount being sold to

distributors. Allegheny Ludlum also reported that *** its conventional GOES is sold to end

users. As discussed in further detail in Part II of this report, *** percent of all such domestic

producer shipments were shipped to end users in 2012.

Price

Petitioners testified that high permeability GOES may be sold at a higher price compared

with conventional GOES because it has lower loss and is more expensive to manufacture.46 Unit

value data collected in these investigations on conventional and high‐permeability GOES are

presented in table I‐2. Pricing data collected in these investigations for both conventional and

high‐permeability (domain‐refined) GOES are presented in Part V of this report.

Table I-2 

GOES: Unit values of U.S. producers’ U.S. shipments of conventional and high-permeability 

GOES, by type, 2010-12, January-June 2012, and January-June 2013 

*                   *                   *                   *                   *                   *                   *

                                                      

44 Conference transcript, p. 56 (Petersen).

45 Conference transcript, pp. 131‐132 (Chan).

46 Conference transcript, p. 55 (Schoen).
II‐1

PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

U.S. MARKET CHARACTERISTICS

GOES is used primarily in the production of laminated cores for large and medium‐sized

electrical power transformers and distribution transformers. Power transformers are used to

change the voltage of electric power between power plants, distributions centers, and

commercial and residential consumers. The two domestic producers of GOES supplied

approximately *** of the U.S. market during 2010‐12.

CHANNELS OF DISTRIBUTION

U.S. producers sold mainly to end users, as did importers of subject product from China,

Japan, Korea, and Russia, as shown in table II‐1. Importers of subject product from Germany

sold *** to slitters and laminators, while importers of subject product from the Czech Republic

sold *** of their product to distributors, but *** to slitters and laminators.

GEOGRAPHIC DISTRIBUTION

One of two U.S. producers reported selling GOES to all regions in the contiguous United

States (table II‐2). *** did not sell GOES in the *** regions.   Only one subject importer, ***,

reported selling to all regions.  Nonetheless, importers from each subject country reported

selling product to each region, except that no importers of Chinese product sold to the

Mountain region.  For U.S. producers, over *** percent of sales were between 101 and 1,000

miles of their production facility. Most subject importers sold at least 80 percent within 1,000

miles of their U.S. point of shipment.  Importers of Chinese GOES, however, made a majority of

their sales over 1,000 miles and the rest between 101 and 1,000 from their U.S. point of

shipment.

Table II-1 

GOES: U.S. producers’ and importers’ U.S. shipments, by sources and channels of distribution, 

2010-12, January-June 2012, and January-June 2013 

* * * * * * *

Table II-2 

GOES: Geographic market areas in the United States served by U.S. producers and importers, by 

number of responding firms 

* * * * * * *
II‐2

SUPPLY AND DEMAND CONSIDERATIONS

U.S. supply

Domestic production

Based on available information, U.S. producers of GOES have the ability to respond to

changes in demand with large changes in the quantity of shipments of U.S.‐produced GOES to

the U.S. market. The main contributing factors to the high degree of responsiveness of supply

are the existence of alternate markets and inventories, the ability to produce alternate

products, and some availability of unused capacity.

Industry capacity

Domestic capacity utilization fluctuated between *** to *** percent between 2010 and

2012.  More recently, in January‐June 2003, domestic capacity utilization was less than ***

percent. This suggests that U.S. producers may have moderate capacity to increase production

of product in response to an increase in prices.

Alternative markets

U.S. producers’ export shipments fell from about *** of total shipments in 2010 to just

under *** percent of total shipments during the first half of 2013.  This level of export

shipments indicates that U.S. producers have an ability to shift shipments between the U.S.

market and other markets in response to price changes, although the antidumping order in

China may somewhat limit their ability to export.  

Inventory levels

U.S. producers’ inventories fluctuated between *** and *** percent of total shipment

from 2010 to 2012. These inventory levels suggest that U.S. producers may have an ability to

respond to changes in demand with changes in the quantity shipped from inventories.

Production alternatives

One of two responding U.S. producers stated that it could switch production from GOES

to other products. AK Steel indicated that it could produce NOES ***.

Supply constraints

No U.S. producers reported it had refused, declined, or was unable to supply GOES since

2010.
II‐3

Subject imports from China

Based on available information, the single responding Chinese producer (Baosteel) has

the ability to respond to changes in demand with large changes in the quantity of shipments of

GOES to the U.S. market. The main contributing factors to the high degree of responsiveness of

supply are existence of alternate markets and inventories.

Industry capacity

With production increasing by a similar rate as capacity, capacity utilization remained

greater than *** percent between 2010 and 2012. This high level of capacity utilization

suggests that the Chinese producer may have little additional capacity to increase production of

GOES in response to an increase in prices.

Alternative markets

Between 2010 and 2012, approximately *** percent of Chinese shipments were to the

Chinese home market and *** were to export markets other than the United States. This

indicates the Chinese producer likely has an ability to shift shipments from the Chinese home

market in response to a change in price.

Inventory levels

The Chinese producer’s inventories as a ratio to total shipments increased to ***

percent in 2012. This inventory level suggests that Chinese producers may have an ability to

respond to changes in demand with changes in the quantity shipped from inventories.

Production alternatives

The Chinese producer stated that it *** switch production from GOES to other products.  

Supply constraints

One importer of Chinese GOES reported it had refused, declined, or was unable to

supply GOES since 2010. *** indicated due to allocation and availability, it had to decline some

inquires.

Subject imports from Czech Republic

Based on available information, the Czech producer has the ability to respond to

changes in demand with large changes in the quantity of shipments of GOES to the U.S. market.

The main contributing factor to the high degree of responsiveness of supply is existence of

alternate markets.
II‐4

Industry capacity

With production ***, capacity utilization remained greater than *** percent between

2010 and 2012. This high level of capacity utilization suggests that the Czech producer may

have little additional capacity to increase production of GOES in response to an increase in

prices.

Alternative markets

Between 2010 and 2012, more than *** percent of Czech shipments were to export

markets other than the United States. This indicates the Czech producer likely has an ability to

shift shipments from the Czech home market in response to a change in price.

Inventory levels

The Czech producer’s inventories as a ratio to total shipments increased to about ***

percent in 2012. This inventory level suggests that the Czech producer may have a limited

ability to respond to changes in demand with changes in the quantity shipped from inventories.

Production alternatives

The Czech producer stated that it *** switch production from GOES to other products.  

Supply constraints

No importers of Czech GOES reported it had refused, declined, or was unable to supply

GOES since 2010.

Subject imports from Germany

Based on available information, the German producer has the ability to respond to

changes in demand with large changes in the quantity of shipments of GOES to the U.S. market.

The main contributing factor to the high degree of responsiveness of supply is the existence of

alternate markets and the availability of some unused capacity.

Industry capacity

With production ***, capacity utilization remained greater than *** percent between

2010 and 2012. This relatively high level of capacity utilization suggests that the German

producer may have some additional capacity to increase production of GOES in response to an

increase in prices.

Alternative markets

Between 2010 and 2012, more than *** percent of German shipments were to the

German home market or to export markets other than the United States. This indicates the
II‐5

German producer likely has an ability to shift shipments from the German home market and

other export markets in response to a change in price.

Inventory levels

The German producer’s inventories as a ratio to total shipments increased to just above

*** percent in 2012. This inventory level suggests that the German producer may have a

limited ability to respond to changes in demand with changes in the quantity shipped from

inventories.

Production alternatives

The German producer stated that it *** switch production from GOES to other

products.  

Supply constraints

Three importers of German GOES reported they had refused, declined, or were unable

to supply GOES since 2010. *** indicated that they had not been able to meet short delivery

times. *** stated that limited production capacity had constrained their supply.

Subject imports from Japan

Based on available information, Japanese producers have the ability to respond to

changes in demand with large changes in the quantity of shipments of GOES to the U.S. market.

The main contributing factors to the high degree of responsiveness of supply are existence of

alternate markets.

Industry capacity

With production ***, capacity utilization remained greater than *** percent between

2010 and 2012. This high level of capacity utilization suggests that Japanese producers may

have little additional capacity to increase production of GOES in response to an increase in

prices.

Alternative markets

Between 2010 and 2012, more than *** percent of Japanese shipments were to the

Japanese home market or to export markets other than the United States. This indicates

Japanese producers likely have an ability to shift shipments from the Japanese home market

and other export markets in response to a change in price.

Inventory levels

Japanese producers’ inventories as a ratio to total shipments increased to just below

*** percent in 2012. This inventory level suggests that the Japanese producers may have a
II‐6

limited ability to respond to changes in demand with changes in the quantity shipped from

inventories.

Production alternatives

Japanese producers stated that they *** switch production from GOES to other

products.  

Supply constraints

Four Japanese importers reported they had refused, declined, or were unable to supply

GOES since 2010. *** indicated due to allocation and availability, it had to decline inquiry

sometimes. *** indicated that its supply was constrained by *** production capacity. *** had

difficulty to getting Japanese producers to allocate any production capacity to meet demand for

conventional GOES.   *** that their limited production capacity had constrained their supply.

Subject imports from Korea

Based on available information, the one responding Korean producer has the ability to

respond to changes in demand with large changes in the quantity of shipments of GOES to the

U.S. market. The main contributing factors to the high degree of responsiveness of supply are

the existence of alternate markets and inventories, as well and as some available capacity.

Industry capacity

With production ***, capacity utilization remained greater than *** percent between

2010 and 2012. This relatively moderate level of capacity utilization suggests that Korean

producers may have some additional capacity to increase production of GOES in response to an

increase in prices.

Alternative markets

Between 2010 and 2012, more than *** percent of Korean shipments were to the

Korean home market or to export markets other than the United States. This indicates the

Korean producer likely has an ability to shift shipments from the Korean home market and

other export markets in response to a change in price.

Inventory levels

The Korean producer’s inventories as a ratio to total shipments increased to just over

*** percent in 2012. This inventory level suggests that the Korean producer may have an ability

to respond to changes in demand with changes in the quantity shipped from inventories.
II‐7

Production alternatives

The Korean producer stated that it *** switch production from GOES to other products.  

Supply constraints

One importer of Korean GOES reported it had refused, declined, or were unable to

supply GOES since 2010. *** indicated that their supply is constrained by the few mills that can

produce high‐end grade steel, limited capacity, and low prices in the market for “low grade

GOES.”  

Subject imports from Poland

There is limited information available about Polish imports because no Polish producers

responding the Commission questionnaire. Almost 95 percent of Poland’s exports are to non‐

U.S. markets.

Supply constraints

One importer of Polish GOES reported it had refused, declined, or were unable to supply

GOES since 2010. ***, stated that limited production capacity had constrained their supply.

Subject imports from Russia

Based on available information, Russian producers have the ability to respond to

changes in demand with large changes in the quantity of shipments of GOES to the U.S. market.

The main contributing factors to the high degree of responsiveness of supply are existence of

alternate markets and inventories.

Industry capacity

With production ***, capacity utilization remained greater than *** percent between

2010 and 2012. This high level of capacity utilization suggests that Russian producers may have

limited additional capacity to increase production of GOES in response to an increase in prices.

Alternative markets

Between 2010 and 2012, more than *** percent of Russian shipments were to the

Russian home market or to export markets other than the United States. This indicates Russian

producers likely have an ability to shift shipments from the Russian home market and other

export markets in response to a change in price.
II‐8

Inventory levels

Russian producers’ inventories as a ratio to total shipments fluctuated between *** to

*** percent in 2012. This inventory level suggests that Russian producers may have an ability to

respond to changes in demand with changes in the quantity shipped from inventories.

Production alternatives

Russian producers stated that they *** switch production from GOES to other products.  

Supply constraints

No importers of Russian GOES reported it had refused, declined, or were unable to

supply GOES since 2010.  

Nonsubject imports

The largest sources of nonsubject imports during 2010‐12 were Italy, Mexico, France,

Sweden, and Brazil. Combined, these countries accounted for all of nonsubject imports in

2012.1

U.S. demand

Based on available information, the overall demand for GOES is likely to experience

small changes in response to changes in price. The main contributing factors are the (somewhat

limited range of substitute products and the small cost share of product in most of its end‐use

products.

End uses

U.S. demand for GOES depends on the demand for U.S.‐produced power and

distribution transformers. GOES is used primarily in the production of laminated cores for large

and medium‐sized electrical power transformers and distribution transformers. Power

transformers are used to raise the voltage of electric power from the level at which it is

generated by a power plant to a higher level for more efficient transmission, and to lower

voltage to levels suitable for local distribution. Distribution transformers, in turn, further reduce

electrical voltage to levels suitable for commercial and residential consumers. Stampers may

also use GOES may also to punch laminations that are used in equipment having smaller

transformers, including appliances and aerospace, aeronautical, and electronic equipment.2  

 

1 Census data also show Canada as a large nonsubject source, but it is believed that these data were

misreported since there is no known production of GOES in Canada.  See Part IV for more information

on this issue. 2 Petition, p. 9.
II‐9

Petitioners stated that the degree to which utilities replace transformers is a demand

driver in the replacement market, which currently makes up about 65 to 70 percent of the

market for GOES and made up 75 to 80 percent of the market in 2011.  They indicate that

because of aging transformers, there has been a small increase over the historical rate of 3

percent per year.  Petitioners also indicated that increases in new energy generation can

increase demand.3

   

Housing starts are the biggest driver for demand in the new transformer market for

GOES.4

  Japanese respondents indicated that the trend is not linear, as transformer demand is

somewhat dependent on the location and type of housing being constructed.5 Seasonally

adjusted housing starts increased by 46 percent between January 2010 and August 2013, with

most of the increase since latter part of 2011 (figure II‐2). Housing starts, however, remain well

below historic averages.6

  Japanese respondents also indicated that utility capital investment

correlates less closely with demand for GOES for new power transformers, and that three new

power transformer manufactures have opened plants in U.S. market within the past few years,

increasing demand. Capital expenditures by shareholder‐owned electric utilities increased by

just over 20 percent between 2010 and 2012.7

Japanese respondents indicate that demand for GOES in the U.S. market is expected to

increase with housing starts and commercial use both expected to be strong in the imminent  

future, new regulatory requirements fostering a shift to more efficient transformer design, and

ongoing shift in smaller transformer demand from NOES to GOES.  They also expect demand

outside the U.S. market to increase as in many countries the electrical grid is still being built.8

Petitioners indicate the higher efficiency requirements for new distribution transformers that

take effect in 2016 will likely affect the relative use of types of GOES rather than substantially

increase demand.9

  

Business cycles

Only one of two responding U.S. producers and three of 14 responding importers

indicated that the market was subject to business cycles or conditions of competition.

Specifically, *** indicated that the market for GOES is subject to seasonal demand fluctuations,

as weather conditions (hot, dry weather and hurricanes) and increased construction activity in

the summer and fall result in greater transformer demand.  Several importers indicated that

 

3 Conference transcript, pp. 64‐65 (Pfeiffer), pp. 65‐66 (Polinski). Petitioners’ postconference brief,

Response to Commission staff questions, pp. 7‐8. 4 Conference transcript, p. 63 (Pfeiffer), p. 168 (Suzuki). 5 Japanese producers’ postconference brief, Response to staff questions, pp. 9‐10.

6 U.S. Census Bureau, New Residential Construction.

http://www.census.gov/construction/nrc/historical_data/ 7 Japanese producers’ postconference brief, Response to staff questions, p. 10 and staff calculations

using data from the Edison Electric Institute in exhibit I.

8 Japanese producers’ postconference brief, pp. 8‐9.

9 Petitioners’ postconference brief, p. 7.
II‐10

Figure II-2 

Housing starts: Seasonally adjusted housing starts, monthly, January 2010-August 2013 

Source: U.S. Census Bureau, New Residential Construction. http://www.census.gov/construction/nrc/historical_data/ 

(retrieved October 17, 2013). 

business cycles or conditions of competition have changed since 2010, citing increased capacity

for GOES China, the anticipated sale of ThyssenKrupp and a large number of transformer

producers moving to countries with lower prices for GOES.10 In addition, importer *** indicated

that capacity has been added in the United States and reduced in Russia.

Demand trends

Both producers reported an increase in U.S. demand for GOES since 2010, while most

importers reported a decrease in demand (table II‐3). Most firms reporting an increase in

demand attributed the increase the recovery in the economy or housing market, while most

firms reporting a decline in demand cited the slowdown in the economy, housing sector, or the

renewable energy sector.   

Between 2010 and 2012 the quantity of apparent consumption of GOES increased by

about half the rate as the average unit value of apparent consumption declined. This implies

that demand increased to some extent between 2010 and 2012 assuming that demand is  

highly inelastic.

 

10 In addition, importer *** indicated that capacity has been added in the United States and reduced

in Russia since 2010.  ***.
II‐11

Table II-3 

GOES: Firms’ responses regarding U.S. demand, by number of responding firms since 2010 

 Number of firms reporting 

Item Increase No change Decrease Fluctuate 

Demand in the United States 

 U.S. producers 2 0 0 0

 Importers 4 1 9 2

Demand outside the United States: 

 U.S. producers *** *** *** ***

 Importers 5 2 5 3

Source: Compiled from data submitted in response to Commission questionnaires. 

Substitute products

About one‐half of responding U.S. producers and importers reported that there are

substitutes for GOES.  These included amorphous metal and NOES. Petitioners indicate that

while amorphous metal may be used in certain transformer applications, limited production

and low GOES prices preclude amorphous metal from being a realistic substitute in the vast

majority of applications.11 They also indicated that substitutability of NOES for GOES is limited

to the low end of the GOES product spectrum because GOES shows magnetic behavior in one

direction, while NOES has magnetic properties that are isotropic (multi‐directional).  Petitioners

indicated the standard application for NOES is motor and generators which rotate and need

multi‐directional magnetization while GOES is for transformers which requires one direction of

magnetization.12    

Cost share

GOES accounts for small share of the cost of the end‐use products in which it is used.

Importers reported cost shares of 10 to 30 percent for power transformers.

SUBSTITUTABILITY ISSUES

The degree of substitution between domestic and imported GOES depends upon such

factors as relative prices, quality (e.g., grade standards, reliability of supply, defect rates, etc.),

and conditions of sale (e.g., price discounts/rebates, lead times between order and delivery

dates, payment terms, product services, etc.). Based on available data, staff believes that there

is moderate to high degree of substitutability between domestically produced GOES and GOES

imported from subject sources.  

 

11 Petitioners’ postconference brief, pp. 7‐8. 12 Petitioners’ postconference brief, Response to Commission staff questions, pp. 8‐9.
II‐12

Lead times

GOES is primarily both produced‐to‐order and sold by inventory, depending on the

supplier.  ***.   Five importers produce at least *** percent of their sales to order, two

importers make *** of their shipments from foreign inventory, and two importers make *** of

their shipments from U.S. inventory.  

U.S. producer lead times from inventory are typically *** days, but sometimes are up to

*** days.  Importer lead times from U.S. inventory range from *** days, and lead times from

foreign inventory can be from *** days.  When they produce to order, U.S. producer lead time

range from *** days while most importers’ lead times range from *** days. Two importers

(***) report a lead time for produced to order sales of *** days, and one importer (***) reports

a lead time of *** days.

Factors affecting purchasing decisions

Petitioners indicate that since U.S.‐produced and imported GOES are produced to ASTM

or customer specifications, the most important factor for purchasers is price. They indicate that

transformer manufacturers can use either conventional or high‐permeability GOES to construct

a medium voltage distribution transformer, such those outside of a home or attached to a pole.  

Petitioners estimate that these transformers make up about 70 percent of the market for GOES.  

However, they indicate that large voltage power transformers at utility companies that make

up about 25 percent of the market typically use high‐permeability steels.13  They also indicate

that although this type of substitution is typically stepping up or down one grade, an extreme

price change would allow substitution beyond one adjacent grade.14

Petitioners indicate that producers’ products need not be identical to be considered by

purchasers for the same application, but only need to meet minimal criteria on key product

characteristics such as core loss. They indicate that the ability of transformer manufacturers to

analyze price has resulted in importers offering product with higher specifications and

efficiency ratings than the domestic product a price that is not commensurate with the

imported product’s higher quality.15

Chinese respondents indicate that GOES is not a typical commodity product, but a

specialty, high value‐added steel product with complex and wide‐ranging chemical properties.16

Respondents indicate that although there is some overlap in competition between the various

types and grades of GOES, the overlap is limited. They indicate that conventional GOES cannot

be used in high‐efficiency, low core loss, transformer applications.  Also, they indicate that

domain‐refined GOES using a laser scribing process cannot be annealed and therefore cannot

 

13 Conference transcript, pp. 22‐23, 57‐59 (Petersen), pp. 57‐59 (Polinski).  Petitioners estimate that

the remaining 5 percent of the market for GOES is made up of low voltage transformers.  Conference

transcript, pp. 58‐59 (Polinski). 14 Conference transcript, p. 91 (Petersen).

15 Petitioners’ postconference brief, pp. 9‐10.

16 Baosteel’s postconference brief, p. 1.
II‐13

substitute for heat proof domain‐refined GOES using either an electrolytic‐etching or

mechanical scribing process.  In addition, respondents indicate that DOE regulations make M4

and M6 grade GOES obsolete in the United States market.17  

Comparison of U.S.‐produced and imported GOES

Both U.S. producers indicated imports from all subject and nonsubject countries are

“always” interchangeable U.S.‐produced GOES and that GOES imported from all subject and

nonsubject countries is “always” interchangeable (see table II‐4).   At least two‐thirds of

responding importers indicated that GOES imported from all subject countries is either

“frequently” or “sometimes” interchangeable with U.S.‐produced GOES. At least one‐half of

responding importers indicated that GOES imported from all subject countries is either

“frequently” or “sometimes” interchangeable with GOES imported from other subject countries

and nonsubject countries and that U.S.‐produced GOES is either “frequently” or “sometimes”

interchangeable with GOES imported from nonsubject countries.

Limitations with interchangeability cited by importers included Japanese steel having a

lower performance variability in steel quality characteristics; high‐permeability steel available in

in *** widths only being availability from Japanese producers, *** grade that is not produced

by U.S. producers; performance quality of Japanese produced steel cannot be matched by U.S.

producers; GOES with a width of *** or thinner that is produced by Japanese producers, but

not U.S. producers; mechanical‐scribed domain‐refined GOES which in not interchangeable

with laser‐scribed product produced by U.S. producers; and Japan, Korea, China, and Germany

producing the highest grade of laser‐scribed domain‐refined GOES.

Both U.S. producers indicated that differences other than price between imports from

all subject and nonsubject countries are U.S.‐produced GOES were “never” significant and that

these differences were “never” significant between GOES imported from all subject and

nonsubject countries (see table II‐5).   Most responding importers indicated that differences

other than price between GOES imported from all subject and nonsubject countries and U.S.‐

produced GOES were at least “sometimes” significant and that these differences were at least

“sometimes” significant between GOES imported from subject and nonsubject countries.   

Petitioners contend that all GOES products cited in the U.S. importers questionnaire as

not being interchangeable are generally interchangeable with other GOES products.  They also

indicated that the many different grades of GOES are capable of meeting the new Department

of Energy (DOE) efficiency standards including conventional, high‐permeability, and heat‐proof

domain‐refined.18

 

17 Conference transcript, pp. 145‐147 (Becker).  Baosteel postconference brief, p. 2.  Japanese

producers’ postconference brief, pp. 7, 13, 35‐36. NLMK’s postconference brief, p. 4.

18 Petitioners’ postconference brief, Response to Commission staff questions, p. 10.
II‐14

Table II-4 

GOES: Perceived interchangeability between GOES produced in the United States and in other 

countries, by country pairs 

 

Number of U.S. producers 

reporting 

Number of U.S. importers 

reporting 

Country pair A F S N A F S N 

U.S. vs. subject countries: 

 U.S. vs. China 2 0 0 0 1 2 4 0

 U.S. vs. Czech Republic 2 0 0 0 1 1 1 0

 U.S. vs. Germany 2 0 0 0 1 6 3 0

 U.S. vs. Japan 2 0 0 0 1 3 7 1

 U.S. vs. Korea 2 0 0 0 0 2 4 0

 U.S. vs. Poland 2 0 0 0 2 4 2 0

 U.S. vs. Russia 2 0 0 0 0 3 3 0

Subject countries comparisons: 

 China vs. Czech Republic 2 0 0 0 2 1 1 0

 China vs. Germany 2 0 0 0 2 1 1 0

 China vs. Japan 2 0 0 0 1 1 4 0

 China vs. Korea 2 0 0 0 1 1 1 0

 China vs. Poland 2 0 0 0 1 2 1 0

 China vs. Russia 2 0 0 0 0 2 1 0

 Czech Republic vs. Germany 2 0 0 0 0 2 1 0

 Czech Republic vs. Japan 2 0 0 0 1 1 3 0

 Czech Republic vs. Korea 2 0 0 0 0 2 1 0

 Czech Republic vs. Poland 2 0 0 0 1 1 1 0

 Czech Republic vs. Russia 2 0 0 0 0 2 1 0

 Germany vs. Japan 2 0 0 0 1 1 3 0

 Germany vs. Korea 2 0 0 0 1 1 1 0

 Germany vs. Poland 2 0 0 0 1 2 1 0

 Germany vs. Russia 2 0 0 0 0 2 1 0

 Japan vs. Korea 2 0 0 0 0 1 2 0

 Japan vs. Poland 2 0 0 0 1 3 2 0

 Japan vs. Russia 2 0 0 0 0 1 2 0

 Korea vs. Poland 2 0 0 0 0 2 1 0

 Korea vs. Russia 2 0 0 0 0 2 1 0

 Poland vs. Russia 2 0 0 0 1 1 1 0

Nonsubject countries comparisons: 

 United States vs. Other 2 0 0 0 1 2 1 0

 China vs. Other 2 0 0 0 0 1 1 0

 Czech Republic vs. Other 2 0 0 0 1 0 1 0

 Germany vs. Other 2 0 0 0 0 1 1 0

 Japan vs. Other 2 0 0 0 0 0 2 0

 Korea vs. Other 2 0 0 0 0 1 1 0

 Poland vs. Other 2 0 0 0 1 2 1 0

 Russia vs. Other 2 0 0 0 1 0 1 0

Note.—A=Always, F=Frequently, S=Sometimes, N=Never.

Source: Compiled from data submitted in response to Commission questionnaires. 
II‐15

Table II-5 

GOES: Significance of differences other than price between GOES produced in the United States 

and in other countries, by country pair 

 

Number of U.S. producers 

reporting 

Number of U.S. importers 

reporting 

Country pair A F S N A F S N 

U.S. vs. subject countries: 

 U.S. vs. China 0 0 0 2 2 1 3 0

 U.S. vs. Czech Republic 0 0 0 2 2 0 3 1

 U.S. vs. Germany 0 0 0 2 2 2 3 0

 U.S. vs. Japan 0 0 0 2 4 3 2 0

 U.S. vs. Korea 0 0 0 2 2 0 2 0

 U.S. vs. Poland 0 0 0 2 3 0 4 1

 U.S. vs. Russia 0 0 0 2 2 0 2 1

Subject countries comparisons: 

 China vs. Czech Republic 0 0 0 2 1 0 2 0

 China vs. Germany 0 0 0 2 1 0 1 0

 China vs. Japan 0 0 0 2 2 0 1 0

 China vs. Korea 0 0 0 2 1 0 1 0

 China vs. Poland 0 0 0 2 1 0 2 0

 China vs. Russia 0 0 0 2 1 0 2 0

 Czech Republic vs. Germany 0 0 0 2 1 0 1 0

 Czech Republic vs. Japan 0 0 0 2 2 0 1 0

 Czech Republic vs. Korea 0 0 0 2 1 0 1 0

 Czech Republic vs. Poland 0 0 0 2 1 0 1 0

 Czech Republic vs. Russia 0 0 0 2 1 0 1 1

 Germany vs. Japan 0 0 0 2 2 0 3 0

 Germany vs. Korea 0 0 0 2 1 0 1 0

 Germany vs. Poland 0 0 0 2 1 0 3 0

 Germany vs. Russia 0 0 0 2 1 0 2 0

 Japan vs. Korea 0 0 0 2 2 0 1 0

 Japan vs. Poland 0 0 0 2 2 0 3 0

 Japan vs. Russia 0 0 0 2 2 0 2 0

 Korea vs. Poland 0 0 0 2 1 0 1 0

 Korea vs. Russia 0 0 0 2 1 0 1 0

 Poland vs. Russia 0 0 0 2 1 0 1 1

Nonsubject countries comparisons: 

 United States vs. Other 0 0 0 2 2 0 2 0

 China vs. Other 0 0 0 2 1 0 0 0

 Czech Republic vs. Other 0 0 0 2 1 0 0 0

 Germany vs. Other 0 0 0 2 1 0 2 0

 Japan vs. Other 0 0 0 2 2 0 2 0

 Korea vs. Other 0 0 0 2 1 0 0 0

 Poland vs. Other 0 0 0 2 1 0 2 0

 Russia vs. Other 0 0 0 2 1 0 0 0

Note.--A = Always, F = Frequently, S = Sometimes, N = Never. 

Source: Compiled from data submitted in response to Commission questionnaires. 
II‐16

Japanese respondents indicate imports from Japan consist *** of heat‐proofed domain‐

refined GOES that is not substitutable with U.S.‐produced GOES.   They indicate that the heat‐

proof GOES as a share of total Japanese sales ***. They indicate that domain‐refined GOES

imported from Japan use either an electrolytic‐etching process (JFE) or mechanical scribing

(NSSMC), while domain‐refined GOES produced by the only U.S. producer of domain‐refined

GOES (AK Steel) uses a laser scribing process that cannot be annealed.  They indicate that

because post‐winding annealing creates a stronger and more efficient transformer, certain

transformer manufacturers have developed specialized wound transformer designs based

exclusively on heat‐proof domain‐refined GOES imported from Japan.19  Japanese respondents

also indicate that U.S. producers serve a majority of the GOES market for distribution

transformers without these very high efficiency design requirements.20   

Russian respondents indicate that the conventional grades of GOES produced in Russia

cannot compete with the higher grades required under DOE regulations for transformer

production.  They indicate that the regulation makes M4 and M6 obsolete in the United States

market and eliminated NLMK’s sales to the United States.  Russian respondents also indicate

that NLMK can make an M3 grade of GOES, but its standards are high enough to be used in

most transformers.21

 

19 Japanese producers’postconference brief, pp. 7, 13, 35‐36.

20 Japanese producers’ postconference brief, Response to staff questions pp. 1‐2. 21 NLMK’s postconference brief, pp. 4, 12.
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 all U.S. production of GOES during 2012.

U.S. PRODUCERS

The Commission sent U.S. producer questionnaires to the two petitioning firms: AK Steel

and Allegheny. Both firms provided useable data on their production operations. Staff believes

that these responses represent all U.S. production of GOES. Table III‐1 lists the two U.S.

producers of GOES, their production locations, positions on the petition, and shares of total

production.  

Table III-1 

GOES: U.S. producers of GOES, their positions on the petition, production locations, and shares 

of reported production, 2012

Firm 

Position on 

orders U.S. production locations 

Share of production 

(percent) 

AK Steel1 Petitioner 

Butler, Pennsylvania 

Zanesville, Ohio 

West Chester, Ohio *** 

Allegheny Ludlum2 Petitioner 

Brackenridge, Pennsylvania 

Leechburg, Pennsylvania *** 

 Total 100.0 

1

 ***. 

2

 Allegheny Ludlum is wholly owned by Allegheny Technologies Inc. (Pittsburgh, Pennsylvania). 

Source: Compiled from data submitted in response to Commission questionnaires. 

AK Steel is the larger of the two domestic producers, accounting for *** percent of total

domestic production of GOES. Neither U.S. producer directly imports the subject merchandise

or purchases the subject merchandise from U.S. importers. In addition, both U.S. producers

indicated in their questionnaire responses that they were not related to any foreign producers

of the subject merchandise or any U.S. importers of the subject merchandise. However,

Japanese GOES producer Nippon Steel & Sumitomo Metal Corp. (“Nippon”) operates two GOES

service centers in the United States through Vicksmetal Armco Associates, a *** joint‐venture
III‐2

operation owned by Japanese producer Nippon and domestic producer AK Steel. Vicksmetal

Armco Associates is a slitter of master coils of electrical steel with two facilities in the United

States, one in Indiana and the other in Mississippi.1

In the Commission’s questionnaire, U.S. producers were asked if they experienced any

plant openings, plant closings, relocations, expansions, acquisitions, consolidations, prolonged

shutdowns or production curtailments, or revised labor agreements since January 1, 2010.   

Table III‐2 summarizes the domestic producers’ responses regarding such changes.

Table III-2 

GOES: U.S. producers changes in operations, since 2010 

*                   *                   *                   *                   *                   *                   *

U.S. PRODUCTION, CAPACITY, AND CAPACITY UTILIZATION

GOES

Table III‐3 presents U.S. producers’ production, capacity, and capacity utilization. Total

annual capacity to produce GOES in the United States has remained unchanged at *** short

tons since 2010. Total GOES production increased from 2010 to 2011 by *** percent, but

declined by *** percent in 2012 to a level that was *** percent lower than reported in 2010.

Total GOES production in January‐June 2013 was *** percent lower than in January‐June 2012.

Both domestic producers experienced similar trends in GOES production. The rate of capacity

utilization rose and decreased alongside the year‐to‐year changes in production during 2010‐

12, ranging from a low of *** percent in 2012 to a high of *** percent in 2011.  Capacity

utilization was lower at *** percent in January‐June 2013 than in January‐June 2012, reflecting

a lower level of production.

Table III‐3  

GOES: U.S. producers’ production, capacity, and capacity utilization, 2010-12, January-June 2012, 

and January-June 2013 

*                   *                   *                   *                   *                   *                   *

                                                      

1 Conference transcript, pp. 105 and 155 (Saito).
III‐3

Overall capacity and production

Domestic producers were asked to provide data on the overall capacity and production

in their GOES facilities, by type of item produced. AK Steel reported that, in addition to

producing high permeability GOES (including both domain‐refined and non‐domain‐refined)

and conventional GOES, it also produces NOES ***. Allegheny Ludlum reported that it currently

produces only conventional GOES in commercial quantities at its GOES facilities, but it noted

that it is in the process of expanding its product mix to include high permeability GOES and has

successfully produced and shipped high permeability GOES in trial orders to select customers.2

  

Table III‐4 presents the domestic industry’s overall U.S. capacity, production, and

capacity utilization of NOES and the different varieties of GOES. Production of NOES increased

as a share of total production from *** percent in 2010 to *** percent in 2012. *** accounted

for *** percent of total plant production in January‐June 2012 and *** percent in January‐June

2013. Conventional GOES accounted for *** percent of total overall plant production in the

United States during 2012, whereas high‐permeability GOES (*** of which was domain‐refined)

accounted for *** percent of overall production.

Table III-4 

GOES: U.S. producers’ overall capacity, production, and capacity utilization, by type, 2010-12, 

January-June 2012, and January-June 2013 

*                   *                   *                   *                   *                   *                   *

Producers were asked to describe the constraint(s) that set the limit(s) of their

production capacity and their ability to shift production capacity between products. AK Steel

reported “***.” Allegheny Ludlum reported “***.”  

U.S. PRODUCERS’ U.S. SHIPMENTS AND EXPORTS

Table III‐5 presents U.S. producers’ U.S. shipments, export shipments, and total

shipments. Neither U.S. GOES producer reported internal consumption or transfers of GOES to

related firms in the United States.3U.S. producers’ U.S. commercial shipments accounted for a

relatively large and increasing share of aggregate total shipments. U.S. commercial shipments

accounted for *** percent of total shipments in 2012, compared to *** percent in 2010. During

January‐June 2013, U.S. commercial shipments accounted for *** percent of total shipments.  

   

                                                      

2 Conference transcript, p. 27 (Polinski).

3 ***. E‐mail from ***, October 24, 2013.
III‐4

Table III-5 

GOES: U.S. producers’ U.S. shipments, exports shipments, and total shipments, 2010-12, JanuaryJune 2012, and January-June 2013 

*                   *                   *                   *                   *                   *                   *

The quantity of U.S. producers’ U.S. shipments of GOES increased by *** percent from

2010 to 2011 but declined by *** percent in 2012 to a level that was *** percent higher than

reported in 2010. U.S. shipments were *** percent higher in January‐June 2013 than in

January‐June 2012. Average unit values of U.S. commercial shipments decreased steadily by

*** percent during 2010‐12, and were *** percent lower in January‐June 2013 than in January‐

June 2012.  

The quantity of U.S. producers’ exports of GOES increased by *** percent from 2010 to

2011 but declined by *** percent in 2012 to a level that was *** percent lower than reported

in 2010. Exports were *** percent lower in January‐June 2013 than in January‐June 2012.

Average unit values of exports, which were below the average unit values of U.S. commercial

shipments in every period, decreased steadily by *** percent during 2010‐12, and were ***

percent lower in January‐June 2013 than in January‐June 2012. The aggregate trend in exports

reflects in large part the experience of ***.4 Exports accounted for only about *** of Allegheny

Ludlum’s total GOES shipments. AK Steel’s export markets include: ***. Allegheny Ludlum’s

export market include: ***.  

Table III‐6 presents U.S. producers’ U.S. shipments and export shipments, by types of

GOES. These data show that conventional GOES account for the substantial majority (***

percent in 2012) of U.S. producers’ U.S. shipments. High‐permeability domain‐refined GOES

accounted for *** percent of U.S. producers’ U.S. shipments in 2012, whereas high‐

permeability non‐domain‐refined GOES accounted for only *** percent. As a share of U.S.

producers’ exports in 2012, conventional GOES accounted for *** percent, high‐permeability

domain‐refined GOES accounted for *** percent, and high‐permeability non‐domain‐refined

GOES accounted for *** percent.

Table III-6 

GOES: U.S. producers’ U.S. shipments and exports shipments, by type of GOES, 2010-12, 

January-June 2012, and January-June 2013 

*                   *                   *                   *                   *                   *                   *

                                                      

4 AK Steel ***. Emails from ***, November 13, 2013. AK Steel explained that its ***. Email from ***,

November 6, 2013.  
III‐5

U.S. PRODUCERS’ INVENTORIES

Table III‐7 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. Producers’

inventories decreased from 2010 to 2012, but peaked in absolute terms in June 2012 and were

at their lowest level in June 2013. *** accounted for approximately *** of the aggregate

inventories held.

Table III-7 

GOES: U.S. producers’ end-of-period inventories, 2010-12, January-June 2012, and January-June 

2013 

*                   *                   *                   *                   *                   *                   *

U.S. PRODUCERS’ IMPORTS AND PURCHASES

Neither U.S. producer reported direct imports or purchases of GOES during 2010‐12,

January‐June 2012, or January‐June 2013.

U.S. EMPLOYMENT, WAGES, AND PRODUCTIVITY

Table III‐8 shows U.S. producers’ employment‐related data for GOES during 2010‐12,

January‐June 2012, and January‐June 2013. Both AK Steel and Allegheny Ludlum exhibited

similar overall trends in the employment indicators reported. In the aggregate, U.S. producers

reported an increase in the number of production and related workers (“PRWs”) from 2010 to

2011 and a decline in 2012 to a level below that reported for 2010.  The number of PRWs in

January‐June 2013 was lower than reported in the comparable period in 2012. Total hours

worked, hours worked per PRW, wages paid, and productivity likewise showed overall declines

from 2010 to 2012, and these indicators were lower in January‐June 2013 than in January‐June

2012. However, hourly wages increased overall from 2010 to 2012, as did unit labor costs.

Hourly wages were lower in January‐June 2013 than in January‐June 2012, whereas unit labor

costs were higher.

Table III-8 

GOES: Average number of production and related workers (“PRWs”), hours worked, wages paid 

to such employees, hourly wages, productivity, and unit labor costs, 2010-12, January-June 2012, 

and January-June 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

GOES, as well as to all U.S. producers of GOES.1 Usable questionnaire responses were received

from 18 companies representing *** percent of total imports from China, *** percent of total

imports from the Czech Republic, *** percent of total imports from Germany, *** percent of

total imports from Japan, *** percent from Korea, *** percent from Poland, *** percent from

Russia, and *** percent from all nonsubject sources from January 2010 to June 2013 under HTS

statistical reporting numbers 7225.11.0000, 7226.11.1000, 7226.11.9030, and 7226.11.9060, as

adjusted.2 3

Table IV‐1 lists all responding U.S. importers of GOES from China, the Czech Republic,

Germany, Japan, Korea, Poland, Russia, and other sources, their locations, and their shares of

reported U.S. imports, during January 2010‐June 2013.   

Table IV-1 

GOES: U.S. importers by source, January 2010-June 2013 

*                   *                   *                   *                   *                   *                   *

 

1 The Commission issued questionnaires to those firms identified in the petition, along with firms

that, based on a review of data provided by U.S. Customs and Border Protection (“Customs”), may have

accounted for more than one percent of total imports under HTS statistical reporting numbers

7225.11.0000, 7226.11.1000, 7226.11.9030, and 7226.11.9060 since January 1, 2010.   2 Adjustments to the import data presented are described below, under “U.S. Imports.”   3 In general, temporary importation under bond (“TIB”) is a procedure whereby merchandise may be

temporarily entered into the U.S. customs territory free of duty by posting a bond in an amount equal to

double the estimated duties had all the articles covered by the entry been entered under an ordinary

consumption entry. 19 C.F.R. §§ 10.31(f). Under the terms of the bond, the importer agrees to export or

destroy the merchandise within a specified time or pay liquidated damages, generally equal to twice the

normal duty. See 19 C.F.R. sec. 10.39 (d) (1); Titanium Metals Corp. v. United States, 901 F. Supp. 362,

364 (Ct. Int’l Trade 1995).  However, under NAFTA article 303.3, if merchandise were re‐exported to a

NAFTA country, and subject to an antidumping duty order, antidumping duties would be assessed at

such time of re‐exportation. A summary of data that includes TIB imports reported by U.S. importer ***

is presented in appendix C, table C‐2. *** imported *** short tons ($***) of GOES from *** during 2012

and *** short tons ($***) under the TIB program. These TIB imports were re‐exported to ***.
IV‐2

U.S. IMPORTS  

Table IV‐2 presents data for U.S. imports of GOES from China, the Czech Republic,

Germany, Japan, Korea, Poland, Russia, and all other sources combined. The import data

presented are compiled from official statistics (HTS statistical reporting numbers 7225.11.0000,

7226.11.1000, 7226.11.9030, and 7226.11.9060), as adjusted to remove the data reported for

Canada and to supplement the data reported ***.4

Table IV-2 

GOES: 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 *** *** *** *** ***

Czech Republic *** *** *** *** ***

Germany *** *** *** *** ***

Japan *** *** *** *** ***

Korea *** *** *** *** ***

Poland *** *** *** *** ***

Russia *** *** *** *** ***

Subtotal, subject 31,380 28,424 32,318 14,805 16,297

All other sources, nonsubject 3,422 4,372 2,925 1,739 1,036

All sources 34,802 32,796 35,243 16,544 17,334

 Value (1,000 dollars) 

China *** *** *** *** ***

Czech Republic *** *** *** *** ***

Germany *** *** *** *** ***

Japan *** *** *** *** ***

Korea *** *** *** *** ***

Poland *** *** *** *** ***

Russia *** *** *** *** ***

Subtotal, subject 97,095 80,590 86,738 39,951 39,475

All other sources, nonsubject 11,762 13,371 8,803 5,314 2,832

All sources 108,857 93,961 95,542 45,265 42,307

Table continued on following page. 

 

4 Official Commerce statistics show entries of GOES from Canada during January 2010‐June 2013.

However, because there is no GOES production capacity in Canada, the data reported for Canada were

removed from the U.S. import presentation in this report. According to proprietary Customs records,

***.  
IV‐3

Table IV-2--Continued 

GOES: 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 (dollars per short ton) 

China *** *** *** *** ***

Czech Republic *** *** *** *** ***

Germany *** *** *** *** ***

Japan *** *** *** *** ***

Korea *** *** *** *** ***

Poland *** *** *** *** ***

Russia *** *** *** *** ***

Subtotal, subject 3,094 2,835 2,684 2,698 2,422

All other sources, nonsubject 3,437 3,058 3,009 3,056 2,733

All sources 3,128 2,865 2,711 2,736 2,441

 Share of quantity (percent) 

China *** *** *** *** ***

Czech Republic *** *** *** *** ***

Germany *** *** *** *** ***

Japan *** *** *** *** ***

Korea *** *** *** *** ***

Poland *** *** *** *** ***

Russia *** *** *** *** ***

Subtotal, subject 90.2 86.7 91.7 89.5 94.0

All other sources, nonsubject 9.8 13.3 8.3 10.5 6.0

All sources 100.0 100.0 100.0 100.0 100.0

 Share of value (percent) 

China *** *** *** *** ***

Czech Republic *** *** *** *** ***

Germany *** *** *** *** ***

Japan *** *** *** *** ***

Korea *** *** *** *** ***

Poland *** *** *** *** ***

Russia *** *** *** *** ***

Subtotal, subject 89.2 85.8 90.8 88.3 93.3

All other sources, nonsubject 10.8 14.2 9.2 11.7 6.7

All sources 100.0 100.0 100.0 100.0 100.0

Source: Compiled from official statistics of the U.S. Department of Commerce with adjustments made 

based on data submitted in response to Commission questionnaires. 

 
IV‐4

NEGLIGIBILITY

The statute requires that an investigation be terminated without an injury

determination if imports of the subject merchandise are found to be negligible.5 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.6

  

Table IV‐3 presents data for U.S. imports during September 2012‐August 2013 (i.e., the

most recent 12‐month period preceding the filing of the petition) for each subject country and

its share of total imports. The U.S. import data presented for September 2012‐August 2013 are

from official Commerce data.7 Official Commerce data show that shares of imports from the

seven subject countries individually account for more than 3 percent of the volume of total

imports of GOES – China (5.1 percent), Czech Republic (8.8 percent), Germany (6.8 percent),

Japan (43.8 percent), Korea (9.8 percent), Poland (5.9 percent), and Russia (6.9 percent) – and

combined more than 7 percent of the volume of total imports of GOES – (87.1 percent).

 

5 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)).

6 Section 771 (24) of the Act (19 U.S.C § 1677(24)). 7 The data presented for nonsubject sources are overstated by the amount reported for Canada and

the data presented for *** are understated by the amount of GOES entered into the United States

through Canada.
IV‐5

Table IV-3 

GOES: U.S. imports by source and share of imports, September 2012-August 2013 and July 2012-

June 2013 

Source 

Official Commerce data 

September 2012-August 2013 

Adjusted official Commerce data 

July 2012-June 2013 

Quantity (short tons) 

China 1,854 ***

Czech Republic 3,225 ***

Germany 2,489 ***

Japan 16,088 ***

Korea 3,607 ***

Poland 2,177 ***

Russia 2,517 ***

 Subject, subtotal 31,956 33,810

All other sources 4,734 2,223

 Total 36,690 36,033

 Share of quantity (percent) 

China 5.1 ***

Czech Republic 8.8 ***

Germany 6.8 ***

Japan 43.8 ***

Korea 9.8 ***

Poland 5.9 ***

Russia 6.9 ***

 Subject, subtotal 87.1 93.8

All other sources 12.9 6.2

 Total 100.0 100.0

Source: Compiled from official statistics of the U.S. Department of Commerce and from data submitted in 

response to Commission questionnaires. 

 

Also presented in table IV‐3 are official Commerce import statistics for U.S. imports of

GOES, as adjusted to eliminate U.S. imports from Canada and to supplement reported U.S.

imports originating in *** with certain questionnaire data for GOES reported to be entered

from these sources through Canada.  The adjusted import statistics presented are for July 2012‐

June 2013—the time period closest to the most recent 12‐month period preceding the filing of

the petition for which Commission questionnaire data are available. The adjusted import data

show that shares of imports from the seven subject countries individually account for more

than 3 percent of the volume of total imports of GOES – China (*** percent), Czech Republic

(*** percent), Germany (*** percent), Japan (*** percent), Korea (*** percent), Poland (***

percent), and Russia (*** percent) – and combined more than 7 percent of the volume of total

imports of GOES – (93.8 percent).
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. Additional information concerning

fungibility, geographical markets, and simultaneous presence in the market is presented below.

Fungibility

Table IV‐4 presents the shares of U.S. importers' U.S. shipments by type of GOES and by

source of import. These data show that during 2012 a majority (*** percent) of U.S. producers’

U.S. shipments of GOES were of the conventional type, although U.S. producers also reported

U.S. shipments of both domain‐refined and non‐domain‐refined, high‐permeability GOES to the

U.S. market. U.S. shipments of imports of GOES from the Czech Republic, Poland, and Russia

were *** of the conventional type of GOES during January 2010‐June 2013. *** U.S. shipments

of GOES imported from Germany (*** percent) were conventional GOES, although *** of high

permeability, non‐domain‐refined GOES were also reported. The data also show that during

2012 *** of U.S. shipments of GOES imported from China (*** percent) and Japan (***

percent) were high‐permeability GOES, although *** of U.S. shipments of imports from these

two subject countries were of the conventional type of GOES. U.S. shipments of imports of

GOES from Korea were *** high‐permeability GOES (both domain‐ and non‐domain‐refined)

during January 2010‐June 2013. There were *** more U.S. shipments of imports from

nonsubject sources of conventional GOES (*** percent) than high‐permeability, domain‐refined

GOES (*** percent) during 2012.

Table IV-4 

GOES: Share of U.S. producers' and U.S. importers' U.S. shipments, by type of GOES and by 

source, 2010-12, January-June 2012, and January-June 2013 

*                   *                   *                   *                   *                   *                   *

 
IV‐7

Presence in the market

Official Commerce data for U.S. imports were used to evaluate subject import presence

in the market.  Table IV‐5 summarizes the number of months in which imports were present

from each subject source. Imports from Japan were present in every month during January

2010‐June 2013. Imports from China were present for one month in 2010, present for three

months in 2011, five months in 2012. Imports from the Czech Republic and Germany were

present for eight and ten months, respectively, in 2010 and all months during 2011‐12. Imports

from Korea were present all months during 2010‐11 and nine months in 2012. Imports from

Poland were present for nine months in 2010, all months in 2011, and 11 months in 2012.

Imports from Russia were present for 10 months in 2010, 11 months in 2011, and all months in

2012. All subject countries’ imports were present in all six months during January‐June 2013,

with the exception of Korea, which were imported into the United States for four of the six

months in 2013.

Table IV-5 

GOES: Number of months of presence of imports, 2010-12 and January-June 2013 

 Calendar year January-June 

Source 2010 2011 2012 2013 Total 

 Number of months of import entries 

China 1 3 5 6 15

Czech Republic 8 12 12 6 38

Germany 10 12 12 6 40

Japan 12 12 12 6 42

Korea 12 12 9 4 37

Poland 9 12 11 6 38

Russia 10 11 12 6 39

Source: Compiled from official Commerce statistics. 

Geographical markets

Official Commerce statistics show that in during January 2010‐June 2013, U.S. imports of

GOES from the subject countries entered the United States through 24 Customs districts

nationwide.8 All subject countries entered GOES imports through Buffalo, New York, and

Detroit, Michigan.  In addition, all subject countries, except for China and Russia, entered GOES

 

8 The 24 Customs districts are: Baltimore, Maryland; Buffalo, New York; Charleston, South Carolina;

Charlotte, North Carolina; Chicago, Illinois; Cleveland, Ohio; Detroit, Michigan; Houston‐Galveston,

Texas; Laredo, Texas; Los Angeles, California; Milwaukee, Wisconsin; Mobile, Alabama; New Orleans,

Louisiana; New York, New York; Nogales, Arizona; Norfolk, Virginia; Ogdensburg, New York; Philadelphia,

Pennsylvania; San Diego, California; San Francisco, California; San Juan, Puerto Rico; Savannah, Georgia;

St. Louis, Missouri; and Tampa, Florida.
IV‐8

imports into the United States through the Customs district of Chicago, Illinois; all but Czech

Republic and Poland entered imports through Los Angeles, California; all but Czech Republic

and Korea entered imports through New Orleans, Louisiana; and all but China and Korea

entered imports through New York, New York. Table IV‐6 presents the shares of U.S. imports,

by Customs district and by source of import for January 2010‐June 2013.

Table IV-6 

GOES: Share of U.S. imports, by Customs district and by source, January 2010-June 2013 

January 2010-June 2013 

Item Quantity (short tons) 

Share of quantity 

(percent) 

U.S. imports from China: 

 San Diego, CA 1,153 60.5 

 Detroit, MI 482 25.3 

 Buffalo, NY 137 7.2 

 Other Customs districts 132 6.9 

 Total, all Customs districts 1,904 100.0 

U.S. imports from the Czech Republic: 

 Chicago, IL 12,094 54.0 

 Buffalo, NY 6,125 27.3 

 Detroit, MI 2,236 10.0 

 Other Customs districts 1,944 8.7 

 Total, all Customs districts 22,399 100.0 

U.S. imports from Germany: 

 Chicago, IL 6,608 43.7 

 Los Angeles, CA 4,650 30.8 

 Savannah, GA 1,828 12.1 

 Other Customs districts 2,034 13.5 

 Total, all Customs districts 15,120 100.0 

U.S. imports from Japan: 

 Laredo, TX 36,285 34.5 

 New Orleans, LA 24,016 22.9 

 Buffalo, NY 16,867 16.1 

 Other Customs districts 27,921 26.6 

 Total, all Customs districts 105,089 100.0 

U.S. imports from Korea: 

 Mobile, AL 9,248 58.4 

 Los Angeles, CA 5,922 37.4 

 Detroit, MI 416 2.6 

 Other Customs districts 237 1.5 

 Total, all Customs districts 15,823 100.0 

U.S. imports from Poland: 

 St. Louis, MO 12,064 68.1 

 Norfolk, VA 2,870 16.2 

 Chicago, IL 1,919 10.8 

 Other Customs districts 865 4.9 

 Total, all Customs districts 17,718 100.0 

U.S. imports from Russia: 

 Buffalo, NY 4,490 41.3 

 Norfolk, VA 4,279 39.4 

 Detroit, MI 1,082 10.0 

 Other Customs districts 1,019 9.4 

 Total, all Customs districts 10,870 100.0 

Source: Compiled from official Commerce statistics. 
IV‐9

During January 2010‐June 2013, most U.S. imports of GOES from China (93.1 percent)

entered the United States through the Customs districts of San Diego, California; Detroit,

Michigan; and Buffalo, NY; although U.S. imports of GOES from China also entered the United

States in relatively smaller amounts since January 2010 through the Customs districts of Laredo,

Texas; Los Angeles, California; New Orleans, Louisiana; Nogales, Arizona; Philadelphia,

Pennsylvania; Savannah, Georgia; and Tampa, Florida.  Almost all U.S. imports of GOES from the

Czech Republic (97.3 percent) entered the United States through the Customs districts of

Buffalo, New York; Chicago, Illinois; Detroit, Michigan; and Baltimore, Maryland during the

same time period.  Relatively minor amounts of Czech Republic GOES also entered the United

States through the Customs districts of Laredo, Texas; Milwaukee, Wisconsin; New York, New

York; and Ogdensburg, New York. Imports of GOES from Germany during January 2010‐June

2013 primarily entered the United States through the Customs districts of Chicago, Illinois; Los

Angeles, California; and Savannah, Georgia (86.5 percent of total U.S. imports from Germany).

Smaller amounts of U.S. GOES imports from Germany also entered the United States through

Baltimore, Maryland; Buffalo, New York; Charlotte, North Carolina; Detroit, Michigan; New

Orleans, Louisiana; New York, New York; and San Francisco, California. GOES imports from

Japan entered the United States through 11 separate Customs districts since January 2010

(Buffalo, New York; Chicago, Illinois; Detroit, Michigan; Laredo, Texas; Los Angeles, California;

New Orleans, Louisiana; New York, New York; Ogdensburg, New York; Philadelphia,

Pennsylvania; San Diego, California; and Savannah, Georgia), more than half of which (57.4

percent) entered through the Laredo and New Orleans Customs districts during January 2010‐

June 2013.  Almost all U.S. imports of GOES from Korea (95.9 percent during January 2010‐June

2013) entered the United States through the Customs districts of Los Angeles, California, and

Mobile, Alabama, although smaller amounts of Korea GOES also entered the United States

through the Customs districts of Buffalo, New York; Chicago, Illinois; Detroit, Michigan; Laredo,

Texas; Ogdensburg, New York; and San Juan, Puerto Rico. Since January 2010, slightly more

than 95 percent of U.S. imports of GOES from Poland entered the United States through three

Customs districts (St. Louis, Missouri; Norfolk, Virginia; and Chicago, Illinois), although relatively

minor amounts also entered through Baltimore, Maryland; Buffalo, New York; Cleveland, Ohio;

Detroit, Michigan; New Orleans, Louisiana; and New York, New York. GOES imports from Russia

entered the United States through 13 separate Customs districts since January 2010 (Baltimore,

Maryland; Buffalo, New York; Charleston, South Carolina; Charlotte, North Carolina; Cleveland,

Ohio; Detroit, Michigan; Houston‐Galveston, Texas; Los Angeles, California; New Orleans,

Louisiana; New York, New York; Norfolk, Virginia; Ogdensburg, New York; and Philadelphia,

Pennsylvania), 90.6 percent of which entered through three districts (Buffalo, Norfolk, and

Detroit) during January 2010‐June 2013.

APPARENT U.S. CONSUMPTION  

Table IV‐7 presents data on apparent U.S. consumption and U.S. market shares for GOES

during 2010‐12, January‐June 2012, and January‐June 2013. These data show that apparent U.S.

consumption, by quantity, increased by *** percent from 2010 to 2011, but decreased by ***
IV‐10

percent in 2012 to a level *** percent higher than in 2011. Apparent U.S. consumption of

GOES, by quantity, was *** percent higher in January‐June 2013 than in January‐June 2012.

However, there was a different trend in apparent U.S. consumption observed, by value.

Reflecting a general decline in unit values of U.S.‐produced and imported GOES in the United

States, apparent U.S. consumption of GOES, by value, declined by *** percent from 2010 to

2012, and was *** percent lower in January‐June 2013 than in January‐June 2012.

Table IV-7 

GOES: U.S. shipments of domestic product, U.S. shipments of imports, and apparent U.S. 

consumption, 2010-12, January-June 2012, and January-June 2013 

Item 

Calendar year January-June 

2010 2011 2012 2012 2013 

 Quantity (short tons) 

U.S. producers' shipments 

U.S. imports from-- 

 China *** *** *** *** ***

 Czech Republic *** *** *** *** ***

 Germany *** *** *** *** ***

 Japan *** *** *** *** ***

 Korea *** *** *** *** ***

 Poland *** *** *** *** ***

 Russia *** *** *** *** ***

Subtotal, subject imports 31,380 28,424 32,318 14,805 16,297

 All other import sources 3,422 4,372 2,925 1,739 1,036

All import sources 34,802 32,796 35,243 16,544 17,334

Apparent U.S. consumption *** *** *** *** ***

 Value ($1,000) 

U.S. producers' shipments *** *** *** *** ***

U.S. imports from-- 

 China *** *** *** *** ***

 Czech Republic *** *** *** *** ***

 Germany *** *** *** *** ***

 Japan *** *** *** *** ***

 Korea *** *** *** *** ***

 Poland *** *** *** *** ***

 Russia *** *** *** *** ***

Subtotal, subject imports 97,095 80,590 86,738 39,951 39,475

 All other import sources 11,762 13,371 8,803 5,314 2,832

All import sources 108,857 93,961 95,542 45,265 42,307

Apparent U.S. consumption *** *** *** *** ***

Source: Compiled from data submitted in response to Commission questionnaires and adjusted official 

statistics of the U.S. Department of Commerce. 
IV‐11

U.S. MARKET SHARES  

U.S. market share data are presented in table IV‐8.

Table IV-8 

GOES: U.S. consumption and market shares, 2010-12, January-June 2012, and January-June 2013 

*                   *                   *                   *                   *                   *                   *

RATIO OF IMPORTS TO U.S. PRODUCTION

Table IV‐9 presents data on the ratio of U.S. imports to U.S. production. During 2012,

U.S. imports of GOES from subject countries amounted to *** percent of total domestic GOES

production.

Table IV-9 

GOES: Ratio of U.S. imports to U.S. production, 2010-12, January-June 2012, and January-June 

2013 

Item 

Calendar year January-June

2010 2011 2012 2012 2013

 Quantity (short tons)

U.S. production *** *** *** *** ***

U.S. imports from-- 

 China *** *** *** *** ***

Czech Republic *** *** *** *** ***

Germany *** *** *** *** ***

Japan *** *** *** *** ***

Korea *** *** *** *** ***

Poland *** *** *** *** ***

Russia *** *** *** *** ***

Subject sources 31,380 28,424 32,318 14,805 16,297

All others sources 3,422 4,372 2,925 1,739 1,036

All import sources 34,802 32,796 35,243 16,544 17,334

 Ratio (percent)

Ratio to U.S. production of imports 

from.-- 

 China *** *** *** *** ***

Czech Republic *** *** *** *** ***

Germany *** *** *** *** ***

Japan *** *** *** *** ***

Korea *** *** *** *** ***

Poland *** *** *** *** ***

Russia *** *** *** *** ***

Subject sources *** *** *** *** ***

All others sources *** *** *** *** ***

All import sources *** *** *** *** ***

Source: Compiled from data submitted in response to Commission questionnaires and adjusted official 

statistics of the U.S. Department of Commerce. 

V‐1

PART V: PRICING DATA

FACTORS AFFECTING PRICES

Raw material costs

Steel scrap and silicon are the predominant material input costs to produce GOES. Raw

material costs made up between *** to *** percent of U.S. producers’ cost of goods sold

during 2010 to 2012. U.S. producers described raw material costs as increasing while most

importers indicated that these costs have either decreased or fluctuated. The domestic

industry’s per‐ton raw material costs increased between 2010 and 2012, but were lower in

January‐June 2013 than in January‐June 2012. Petitioners indicate that increases in the price of

electricity have been a major driver increasing raw material costs and that increases in the cost

of magnesium oxide and of coatings such as phosphoric acid and base coatings have increased.1

*** indicated that iron scrap prices have been relatively stable since 2010, but that prices for

high purity ferrosilicon have increased by about *** percent since 2010. *** indicated that

principal raw material used to produce GOES is hot‐rolled band and that its price has been

declining since 2010.  Japanese and Chinese respondents stated that Japanese and Chinese

producers have a different raw material cost structure than U.S. producers since they are

integrated steel mills.2

Prices for ferrosilicon and ferrous scrap have increased and fluctuated since January

2010, increasing overall by about 20 percent by September 2013 (figure V‐1).  Aside from

seasonal fluctuations, the industrial price of electricity generally remained at the same level

since January 2010. The NYMEX futures price for natural gas has declined since January 2010;

decreasing by almost 40 percent through August 2013.

U.S. producers also use raw material surcharges in contract prices.3 The *** primary

surcharge elements are ***. Allegheny Ludlum calculates its raw material surcharge *** and its

surcharges are publicly available on the company website. AK Steel ***.4

U.S. inland transportation costs

The only responding U.S. producers and importers reported that they typically arrange

transportation to their customers. U.S. producers reported that their U.S. inland transportation

costs ranged up to *** percent while most importers reported costs of ranging up to 5 percent.

                                                      

1 Conference transcript, p. 51 (Petersen), p. 51 (Polinski). 2 Conference transcript, pp. 168‐69 (Suzuki), p. 169 (Huang).

3 Conference transcript, p. 52 (Petersen), p. 52 (Polinski). 4 Petitioners’ postconference brief, Response to staff questions, p. 6 and exhibit 13.
V‐2

Figure V-1 

Raw material costs: Price indices for ferrosilicon, ferrous scrap, natural gas, and electricity, 

monthly, January 2010-September 2013 

Sources: Prices for ferrosilicon-AMM free market and scrap, ferrous, no. 1 heavy meltconsumers/Chicago from American Metal Markets, downloaded October 29, 2013; NYNEX natural gas 

futures “contract 1” price and average retail price of electricity, industrial from EIA, downloaded October 

31, 2013. 

PRICING PRACTICES

Pricing methods

U.S. producers and most importers reported using both transaction‐by‐transaction

negotiations and contracts (table V‐1).  U.S. producers and importers reported selling *** GOES

through contracts with fixed quantities.  U.S. producers reporting making *** percent of their

sales with short term contracts and *** with long term contracts, and the remaining amount

were spot sales.  Most importers reports making the bulk of their sales with short terms

contracts, although three importers (***) make at least 80 percent of their sales on a spot

basis.    

Petitioners indicate that ***.  They also indicate that approximately ***.5

                                                      

5 Petitioners’ postconference brief, Response to Commission staff’s questions, p. 5.
V‐3

Table V-1 

GOES: U.S. producers and importers reported price setting methods, by number of responding 

firms1

Method U.S. producers Importers 

Transaction-by-transaction 2 8 

Contract 2 8 

Set price list 0 1 

Other 0 1 

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.

Source: Compiled from data submitted in response to Commission questionnaires.

Sales terms and discounts

Both U.S. producers typically quote prices on f.o.b. basis, while almost all importers

typically quote prices on a delivered  basis. ***. *** importer reported offering discounts. ***.  

Most importers offer sales term of net 30 days.  

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 GOES products shipped to unrelated U.S.

customers during January 2010‐June 2013.6

Product 1.—Conventional GOES, 9 mil (0.23 mm) thickness, maximum core loss

1.20W/kg, (50 hz, 1.7T), U.S. grade M‐3

   

Product 2.‐‐ Conventional GOES, 11 mil (0.27 mm) thickness, maximum core loss 1.25

W/kg, (50 hz, 1.7T), U.S. grade M‐4

Product 3.‐‐ Conventional GOES, 14 mil (0.35 mm) thickness, maximum core loss

1.58W/kg, (50 hz, 1.7T), U.S. grade M‐6

                                                      

6 Japanese respondents stated that the Commission should ensure that the pricing data is collected

on an equivalent basis, including specifying whether the product is being sold after slitting, or a as a

master coil. They also indicated that products 4 and 5 are laser‐scribed domain‐refined GOES and do not

include dissimilar domain‐refined Japanese products produced through mechanical scribing or

electrolytically‐etching surface treatments.  Japanese producers’ postconference brief, Response to staff

questions, pp. 2‐3.
V‐4

Product 4.— Domain‐refined high‐permeability GOES, 9 mil (0.23mm) thickness,

maximum core loss 0.80 W/kg, (50 hz, 1.7T), U.S. grade H‐O DR

Product 5.‐‐ Domain‐refined high‐permeability GOES, 11 mil (0.27mm) thickness,

maximum core loss 0.90 W/kg, (50 hz, 1.7T), U.S. grade H‐1 DR

Two U.S. producers and 11 importers provided usable pricing data for sales of the

requested products, although not all firms reported pricing for all products for all quarters.7 8

Pricing data reported by these firms accounted for approximately *** percent of U.S.

producers’ shipments of product and *** percent of subject imports from China, *** percent of

subject imports from the Czech Republic, *** percent of subject imports from Germany, ***

percent of subject imports from Japan, *** percent of subject imports from Korea, *** percent

of subject imports from Poland, *** percent of subject imports from Russia, and 26 percent all

subject imports since 2010. Price data for products 1‐5 are presented in Tables V‐3 to V‐7 and

Figure V‐2.  

Table V-3 

GOES: Weighted-average f.o.b. prices and quantities of domestic and imported product 1 and 

margins of underselling/(overselling), by quarters, January 2010-June 2013 

*            *            *            *           *            *            *

Table V-4 

GOES: Weighted-average f.o.b. prices and quantities of domestic and imported product 2 and 

margins of underselling/(overselling), by quarters, January 2010-June 2013 

*            *            *            *           *            *            *

Table V-5 

GOES: Weighted-average f.o.b. prices and quantities of domestic and imported product 3 and 

margins of underselling/(overselling), by quarters, January 2010-June 2013 

*            *            *            *           *            *            *

Table V-6 

GOES: Weighted-average f.o.b. prices and quantities of domestic and imported product 4 and 

margins of underselling/(overselling), by quarters, January 2010-June 2013 

*            *            *            *           *            *            *

                                                      

7 ***.

8 ***.   
V‐5

Table V-7 

GOES: Weighted-average f.o.b. prices and quantities of domestic and imported product 5 and 

margins of underselling/(overselling), by quarters, January 2010-June 2013 

*            *            *            *           *            *            *

Figure V-2 

GOES: Weighted-average prices and quantities of domestic and imported product, by quarters,

January 2010-June 2013 

*            *            *            *           *            *            *

Price trends

Most prices for price products decreased during January 2010 to June 2013. Table V‐8

summarizes the price trends, by country and by product. As shown in the table, domestic price

decreases ranged from about *** to *** percent during 2010 to the middle of 2013 while most

import prices decreased by amounts ranging up to 40 percent.  

Citing average unit value of trade data and U.S. producer shipment data, Japanese

respondents indicate that prices for subject and nonsubject producers to the U.S. market and

U.S. producers to export markets ***.  They also claim that these data indicate that U.S.

producers are price leaders because the average unit value for U.S. industry shipments fell by a

*** amount.9 Japanese respondents also indicated that U.S.‐producer prices fell because of a

price war between the two U.S. producers. Japanese respondents stated that the price war was

started by purchaser Howard Industries shifting its annual purchases of GOES of *** from

Allegheny Ludlum to AK Steel due to a dispute over terms of their contract as well as the loss of

approximately *** of exports sales.10  Petitioners indicate that *** was significantly reduced to

compete with extremely low pricing for GOES from Japan and Russia.

Table V-8 

GOES: Summary of weighted-average f.o.b. prices for products 1-5 from the United States and 

subject countries 

*            *            *            *           *            *            *

                                                      

9 Japanese respondents’ postconference brief, pp. 16‐17, citing Petition Exhibit General‐4 and Exhibit

General‐9.

10 Japanese respondents’ postconference brief, pp. 19‐20.
V‐6

Price comparisons

As shown in table V‐9, prices for GOES imported from subject countries were below

those for U.S.‐produced product in 104 of 165 instances; margins of underselling ranged from

0.4 to 52.7 percent. In the remaining 61 instances, prices for GOES from subject countries were

between 0.1 to 42.6 percent above prices for the domestic product.

German respondents described any comparison of price data from Germany with U.S.

price data as “meaningless.”  They indicated that it is likely that more than *** percent of the

domestic price data is based on sales to end users, while virtually none of the imports for GOES

from Germany are sold to end users.11 U.S. producers reported that about *** percent of their

overall shipments are to end users and *** percent or less are to slitters or laminators (see

table II‐1).

Table V-9 

GOES: 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 7 *** *** 9 *** *** 

Czech Republic 17 *** *** 0 - - 

Germany 35 *** *** 1 *** *** 

Japan 11 *** *** 17 *** *** 

Korea 17 *** *** 0 - - 

Poland 8 *** *** 29 *** *** 

Russia 9 *** *** 5 *** *** 

 Total 104 0.4 to 52.7 14.7 61 0.1 to 42.6 15.9 

Source: Compiled from data submitted in response to Commission questionnaires.

LOST SALES AND LOST REVENUE

The Commission requested U.S. producers of GOES to report any instances of lost sales

or revenue they experienced due to competition from imports of GOES from subject countries

since 2010. Of the two responding U.S. producers, *** reported that they had to either reduce

prices or roll back announced price increases. The *** lost sales allegations totaled $*** dollars

and involved *** pounds (*** short tons) of GOES and the 27 lost revenue allegations totaled

                                                      

11 TKES postconference brief, pp. 8‐10.
V‐7

$*** and involved *** pounds (*** short tons) of GOES.12 Staff attempted to contact all

purchasers and a summary of the information obtained follows.

Purchasers responding to the lost sales allegations also were asked whether they shifted

their purchases of GOES from U.S. producers to suppliers of GOES from subject countries since

2011. In addition, they were asked whether U.S. producers reduced their prices in order to

compete with suppliers of GOES from subject countries. Five of the eight responding purchasers

reported that they had shifted purchases of GOES from U.S. producers to subject imports since

2010; two of these purchasers reported that price was the reason for the shift. Two of five

purchasers reported that the U.S. producers had reduced their prices in order to compete with

the prices of subject imports since 2010.

Table V-10 

GOES: U.S. producers’ lost sales allegations 

*            *            *            *           *            *            *

Table V-11 

GOES: U.S. producers’ lost revenue allegations 

*            *            *            *           *            *            *

                                                      

12 These included two lost sales allegations for which ***. Email from ***, October 21, 2013.

VI‐1

PART VI: FINANCIAL EXPERIENCE OF U.S. PRODUCERS

BACKGROUND

Two U.S. producers, AK Steel and Allegheny Ludlum, which together accounted for all

U.S. production of GOES since 2010, supplied financial data on their GOES operations.1 ***

reported transfer sales of GOES to related firms; These sales accounted for *** percent of the

industry’s 2012 sales values. The unit sales values of ***.2 Neither firm reported any internal

consumption of GOES.

OPERATIONS ON GOES

Table VI‐1 presents aggregate income‐and‐loss data for the U.S. producers. To

summarize, the overall financial condition of the domestic GOES industry deteriorated between

2010 and 2012. While the domestic industry continued to report *** between 2010 and 2012,

the level declined from *** in 2010 to *** in 2012. From 2010 to 2011, the decrease in unit

sales price (*** per short ton) in conjunction with the increase in unit total cost3 (by *** per

short ton), resulted in a *** lower per‐unit operating income in 2011. From 2011 to 2012, both

sales quantities and net sales values decreased, with lower per‐unit sales value and higher per‐

unit total cost. Therefore, the operating income further decreased from *** in 2011 to *** in

2012, reflecting both the decrease in unit sales value (by ***) and the increase in unit total cost

(by ***).  

Table VI-1 

GOES: Results of operations of U.S. producers, fiscal years 2010-12, January-June 2012, and 

January-June 2013 

* * * * * * * 

Both net sales quantities and values were lower in January‐June (“interim”) 2013 than

interim 2012. Operating income in interim 2012 (***) changed to ***  (***) in interim 2013,

due mainly to lower per‐unit sales value and higher per‐unit total cost combined. As a result,

the operating income margin, which was *** percent in interim 2012, was *** percent in

interim 2013.  

Table VI‐2 presents selected company‐by‐company data. Total net sales (quantities and

values), per‐unit values (sales, COGS, SG&A, and operating income), operating income (loss),

and the ratio of operating income (loss) to net sales are presented in this table on a firm‐by‐

firm basis. Both producers experienced *** between 2010 and 2012 and *** in January‐June

2013 than in January‐June 2012. Both firms reported *** between 2010 and 2012 and in

January‐June 2013 relative to January‐June 2012. Both producers reported *** between 2010

 

1 Both firms have their fiscal years ending December 31. 2 In response to the Commission staff’s inquiry, ***. The transfer sales are ***. E‐mail from ***,

October 24, 2013.

3 Total cost is cost of goods sold (“COGS”) and selling, general, and administrative (“SG&A”) expenses

combined.
VI‐2

and 2012 and *** in January‐June 2013. Both firms reported *** in January‐June 2013 while

both reported *** between 2010 and 2012 as well as higher levels in January‐June 2013.

***.  AK Steel reported ***. However, as instructed ***.4 Neither firm reported any

nonrecurring items for any period. Both producers reported ***.5

  

Table VI-2 

GOES: Results of operations of U.S. producers, by firm, fiscal years 2010-12, January-June 2012, 

and January-June 2013

* * * * * * * 

Selected aggregate per‐short ton cost data of the producers on their operations, i.e.,

COGS and SG&A expenses, are presented in table VI‐3.  Overall per‐short ton COGS and total

cost (which includes SG&A expenses) increased continuously between 2010 and 2012, driven

mainly by changes in raw material costs and fabrication costs (labor and factory overhead),

while per‐unit SG&A expenses decreased during the same period. Per‐short ton COGS and per‐

unit total costs were somewhat higher in interim 2013 compared to interim 2012, due to the

***. The ratio of total COGS to net sales increased *** between 2010 and 2012 (from ***

percent to *** percent), and were higher in interim 2013 than in interim 2012 (*** percent

compared to *** percent).

 

4 E‐mail from ***, October 24, 2013. 5 Based on AK Steel’s Form 10‐K submitted to the Securities and Exchange Commission (“SEC”) for

the twelve months of 2012, AK Steel has six product categories; Stainless/Electrical, Coated, Cold‐Rolled,

Tubular (these four  are value‐added products), Hot‐Rolled, and Secondary (these are additional two non

value‐added).  During 2012, shipment tonnage from Stainless/Electrical was 849 thousand tons (15.6

percent of total shipment tons of 5.4 million tons).  AK Steel’s loss from operations  for 2012 was $248

million compared to a consolidated operating loss of $128 million of AK Steel Holding Corporation for

the same year.  In its 2012 10‐K, p. 32, AK Steel notes that “it sells electrical steel products, which are

iron‐silicon alloys with unique magnetic properties, primarily to manufacturers of power transmission

and distribution transformers and electrical motors and generators in the infrastructure and

manufacturing markets. AK Steel experienced a significant decrease in both its domestic and

international sales of GOES products as a result of the major global recession which started in late 2008.  

Internationally, this reduction was caused principally by a decline in spending for new electric power

transmission and distribution transformers in developing countries. To a lesser extent, its international

electrical sales were negatively impacted by the determination in a China trade case to impose duties on

GOES imported from the U.S. The domestic GOES market likewise was negatively impacted by reduced

maintenance and capital spending by utilities and the decline in the U.S. housing and construction

markets, which principally drive the domestic need for new electrical transformers. Overall pricing for

GOES continues to be well below pre‐recession levels. In addition, AK Steel’s GOES shipment volume has

been affected by changes in mix and by changes in production requirements to meet evolving quality

requirements, principally for sales to the international market.  Under current market conditions, its

GOES production capacity is approximately 285,000 tons. As demand improves, it anticipates that it will

be able to adjust its market mix and make other changes to increase its current capacity.”
VI‐3

Table VI-3 

GOES: Average unit costs of U.S. producers, fiscal years 2010-12, January-June 2012, and 

January-June 2013 

* * * * * * * 

A variance analysis for showing the effects of prices and volume on the producers’ sales

of GOES, and of costs and volume on their total costs is presented in table VI‐4.6 The

information for this variance analysis is derived from table VI‐1. The analysis indicates that the

decrease in operating income between 2010 and 2012 (by ***) was the result of the combined

negative effects of decreased price, increased per‐unit costs and expenses, as well as decreased

sales volume. The summary at the bottom of the table illustrates that the negative effect of

decreased prices (***), the negative effects of increased costs and expenses (***), and lower

sales quantities (***) between 2010 and 2012. Comparing the two interim periods, the variance

analysis indicates that operating income was lower by (***) which resulted from the combined

negative effects of lower prices (***), higher costs/expenses (***), and decreased sales volume

(***).

Table VI-4 

GOES: Variance analysis of operations of U.S. producers, fiscal years 2010-12, January-June 

2012, and January-June 2013 

* * * * * * * 

CAPITAL EXPENDITURES AND RESEARCH AND DEVELOPMENT EXPENSES

Table VI‐5 presents aggregate data on capital expenditures and research and

development (“R&D”) expenses. Both producers reported capital expenditures. Capital

expenditures decreased continuously and *** from 2010 to 2012. Capital expenditures were

*** higher in 2010 and 2011 (higher expenditures were mainly associated with *** compared

to 2012. Data for capital expenditures on a firm‐by‐firm basis are shown in table VI‐6. Both

producers reported R&D expenses.

 

6 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

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 net volume variance is the sum of the price, COGS, SG&A

volume variance. All things equal, a stable overall product mix generally enhances the utility of the

Commission’s variance analysis.
VI‐4

Table VI-5 

GOES: Capital expenditures and R&D expenses by U.S. producers, fiscal years 2010-12, JanuaryJune 2012, and January-June 2013 

* * * * * * * 

Table VI-6 

GOES: Capital expenditures by U.S. producers, by firms, fiscal years 2010-12, January-June 2012, 

and January-June 2013 

* * * * * * * 

ASSETS AND RETURN ON ASSETS

Table VI‐7 presents data on the U.S. producers’ total net assets and their return on

assets. Total net assets increased *** from 2010 to 2011, due primarily to the increase of ***.

At the same time, the return on assets decreased between 2010 and 2012 due to lower

operating income during the same period. The trend of return on assets during 2010‐12 was the

same as the trend of the operating income (loss) margin shown in table VI‐1.

Table VI-7 

GOES: Value of assets and return on assets of U.S. producers, fiscal years 2010-12 

* * * * * * *

CAPITAL AND INVESTMENT

The Commission requested U.S. producers to describe any actual negative effects on

their return on investment, or their growth, investment, ability to raise capital, existing

development and production efforts, or the scale of capital investments as a result of imports

of GOES from China, Czech Republic, Germany, Japan, Korea, Poland, and Russia. Their

comments are as follows:

Actual Negative Effects

AK Steel.–***

Allegheny Ludlum.–***

Anticipated Negative Effects

AK Steel.–***

Allegheny Ludlum.–***
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 third‐

country 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

Overview

The petition identified four producers/exporters of GOES in China: (1) Wuhan Iron &

Steel (“Wuhan”); (2) Baoshan Iron & Steel Co., Ltd. (subsidiary of Shanghai Baosteel Group

Corporation) (“Baosteel”); (3) Anshan Iron & Steel Group Corporation (“Anshan”); and, (4)

Hebei Shougang Qian'an Iron & Steel (“Shougang”). In its postconference brief, the petitioners

identified a fifth producer of GOES in China: Hunan Valin. Wuhan and Baosteel are identified as

the two largest producers of GOES in China, with reported annual production capacity of

approximately 440,000 short tons and approximately 330,000 short tons, respectively. The

petitioners indicated that Shougang began producing GOES in China during 2011 with an annual

production capacity of approximately 165,000 short tons. They also indicated that Anshan,

which began production of GOES in the same year with an annual production capacity of

approximately 110,000 short tons, has expanded its GOES annual capacity to approximately

330,000 short tons. Hunan Valin  (“Valin”) is identified as a Chinese joint venture operation with

ArcelorMittal that includes cold‐rolling and processing operations for the production of

electrical steels, which includes approximately 220,000 short tons of GOES capacity. The

petitioners contend that the Chinese GOES industry is the largest in the world.3

The Commission issued foreign producers’/exporters’ questionnaires to the four known

firms identified in the petition as producers or exporters of GOES from China. The Commission

received a completed response from one firm in China: Baosteel. Baosteel reported that ***

percent of its total sales in the most recent fiscal year were sales of GOES. Baosteel reported

*** exports to the United States of GOES from China during January 2010‐June 2013. According

to the estimate requested of the responding Chinese producer, the production of GOES in China

reported in this Part of the report accounts for approximately *** percent of overall production

of GOES in China. In response to a question concerning changes in its GOES operations,

Baosteel reported ***. Baosteel also reported ***.

Operations on GOES

Table VII‐1 presents information on the GOES operations reported by Baosteel.

Baosteel’s capacity increased by *** percent from 2010 to 2012, and was *** percent higher in

January‐June 2013 relative to January‐June 2012. Capacity is projected to increase by ***

percent from 2012 to 2014. Baosteel’s production in China increased by *** percent from 2010

to 2012, and was *** percent higher in January‐June 2013 than in January‐June 2012.

Production is projected to increase by *** percent from 2012 to 2014.  Baosteel’s capacity

utilization fluctuated downward at levels above *** percent since 2010. In particular, the

producer’s capacity utilization fell from *** percent in 2010 to *** percent in 2011, but

increased to *** percent in 2012. Capacity utilization was lower at *** percent in January‐June

                                                            

3 Petition, pp. 24‐25; and petitioners’ postconference brief, pp. 40‐41.
VII‐4

2013 compared with *** percent in January‐June 2012. Baosteel’s capacity utilization is

projected to be *** and *** percent in 2013 and 2014, respectively.   

Table VII-1 

GOES: Data for the producer in China, 2010-12, January-June 2012, January-June 2013, and 

projections 2013-14 

*                    *                    *                    *                    *                    *                    *

In 2012, *** percent of total shipments of GOES produced by Baosteel in China was

exported to markets other than the United States, predominantly ***, and *** percent of total

shipments were shipped to the commercial home market.  The company reported *** internal

consumption/transfers of GOES and *** exports of GOES from China to the United States since

January 2010.  

Alternative products

Baosteel reported ***. Data regarding Baosteel’s overall GOES facility capacity and

production, by type of GOES (i.e., conventional, high permeability domain‐refined, and high

permeability non‐domain‐refined), are presented in table VII‐2. These data show that, although

conventional GOES accounted for *** of total GOES production by Baosteel during 2010, ***

percent of total GOES production during 2012 was conventional product. High‐permeability,

non‐domain‐refined GOES has accounted for *** of GOES produced in China by Baosteel since

2010, ranging from *** percent of Baosteel’s GOES production during 2010 to *** percent in

2012. High‐permeability, domain‐refined GOES has accounted for *** of Baosteel’s  Chinese

production since 2010.

Table VII-2 

GOES: Overall plant capacity, production, and capacity utilization in China (Baosteel), 2010-12, 

January-June 2012, and January-June 2013 

*                    *                    *                    *                    *                    *                    *

THE INDUSTRY IN THE CZECH REPUBLIC

Overview

ArcelorMittal Frýdek‐Místek A.S. (“Frýdek‐Místek”), a subsidiary of ArcelorMittal S.A., is

the sole producer of GOES in the Czech Republic. The Commission issued a foreign producer

questionnaire to Frýdek‐Místek and received a completed response. Frýdek‐Místek reported

that *** percent of its total company sales in the most recent fiscal year were sales of GOES.

Although a comparison of Frýdek‐Místek’s export data to official Commerce import statistics

shows that in 2012 it accounted for *** percent of U.S. imports from the Czech Republic, the
VII‐5

producer confirmed that it accounts for all production of GOES in the Czech Republic. In

response to a question concerning changes in its GOES operations, Frýdek‐Místek reported ***.  

Operations on GOES

Table VII‐3 presents information on the GOES operations of the responding producer in

the Czech Republic. Frýdek‐Místek’s annual capacity to produce GOES has remained unchanged

at *** short tons since 2010 and is projected to remain unchanged in 2013 and 2014. Reported

production in the Czech Republic increased by *** percent from 2010 to 2012, and was ***

percent higher in January‐June 2013 than in January‐June 2012. Production is projected to

increase by *** percent from 2012 to 2014. Frýdek‐Místek’s capacity utilization also has

increased consistently since 2010.   

In 2012, *** percent of total shipments of GOES from the Czech Republic was exported

to the United States. Exports of GOES from Czech Republic to the United States increased

overall by *** percent from 2010 to 2012 and were *** percent higher in January‐June 2013

than in January‐June 2012. In 2012, *** percent of total shipments of GOES produced by

Frýdek‐Místek in the Czech Republic were exported to markets other than the United States,

predominantly in ***, and *** percent of total shipments were shipped to the commercial

home market.  The company reported *** internal consumption/transfers of GOES since

January 2010.

Table VII-3 

GOES: Data for the producer in the Czech Republic (Frýdek-Místek), 2010-12, January-June 2012, 

January-June 2013, and projections 2013-14 

*                    *                    *                    *                    *                    *                    *

Alternative products

Frýdek‐Místek reported ***. Data regarding Frýdek‐Místek’s overall plant capacity and

production, by type of item produced, are presented in table VII‐4. These data show that

production of ***. *** accounted for *** percent of total plant production in 2010, ***

percent in 2011, and *** percent in 2012. Production of *** was *** in January‐June 2013 than

reported in January‐June 2012. Production of the conventional GOES product, which is the only

type of GOES produced in the Czech Republic, accounted for *** of items produced in Frýdek‐

Místek’s facility since 2010, ranging from *** percent of overall plant production in 2010 to ***

percent in 2012.
VII‐6

Table VII-4 

GOES: Overall plant capacity, production, and capacity utilization in the Czech Republic (FrýdekMístek), 2010-12, January-June 2012, and January-June 2013

*                    *                    *                    *                    *                    *                    *

THE INDUSTRY IN GERMANY

Overview

ThyssenKrupp Electrical Steel GmbH (“TKES”) is the sole producer of GOES in Germany.

TKES is a subsidiary of ThyssenKrupp Steel Europe AG (“TKS‐Europe”), which is one of the six

business areas of ThyssenKrupp AG (“TKAG”). The ThyssenKrupp group also operates GOES

manufacturing facilities in Isbergues, France and Nashik, India. ***.  

The Commission issued a foreign producer questionnaire to TKES and received a

completed response. TKES reported that *** percent of its total company sales in the most

recent fiscal year were sales of GOES and that it accounts for all production of GOES in

Germany. A comparison of TKES’s export data to official Commerce import statistics shows that

in 2012 it accounted for *** percent of U.S. imports from Germany. In response to a question

concerning changes in its German GOES operations, TKES reported under the category ***.  

Operations on GOES

Table VII‐5 presents information on the GOES operations of the responding producer in

Germany. TKES’ annual capacity to produce GOES, which remained at *** short tons during

2010 and 2011, fell to *** short tons in 2012 and is projected to fall further to *** in 2013 and

2014. Reported production in Germany fell by *** percent from 2010 to 2012, and was ***

percent lower in January‐June 2013 than in January‐June 2012. Although production by TKES in

Germany is projected to fall by *** percent from 2012 to 2013, it is expect to increase by ***

percent in 2014. TKES’s capacity utilization fluctuated between a high of *** percent in

January‐June 2012 to a low of *** percent in January‐June 2013.   

Table VII-5 

GOES: Data for the producer in Germany (TKES), 2010-12, January-June 2012, January-June 2013, 

and projections 2013-14 

*                    *                    *                    *                    *                    *                    *

In 2012, *** percent of total shipments of GOES produced in Germany was exported to

the United States. Exports of GOES from Germany to the United States increased from 2010 to

2011, but fell in 2012 to a level higher than reported for 2010. Exports of German GOES to the

United States were higher in January‐June 2013 than in January‐June 2012. In 2012, ***
VII‐7

percent of total shipments of GOES produced in Germany were exported to markets other than

the United States, predominantly in ***, and *** percent of total German shipments were

shipped to the commercial home market.  The company reported *** internal

consumption/transfers of GOES since January 2010.   

Alternative products

Data regarding TKES’s overall plant capacity and production, by type of item produced,

are presented in table VII‐6. TKES reported ***. However, TKES did report the residual

production of *** at its facility (reported as “all other products” in table VII‐6). This *** product

accounted for *** percent of total facility production during 2012. These data show that ***

accounted for greater than *** of total plant production in every period since 2010 and

domain‐refined and non‐domain‐refined high‐permeability GOES accounted for *** and ***

percent of total plant production in 2012, respectively.

Table VII-6 

GOES: Overall plant capacity, production, and capacity utilization in Germany (TKES), 2010-12, 

January-June 2012, and January-June 2013 

*                    *                    *                    *                    *                    *                    *

THE INDUSTRY IN JAPAN

Overview

There are two producers of GOES in Japan: JFE Steel Corp. (“JFE”) and Nippon Steel &

Sumitomo Metal Corp. (“Nippon”). The Commission issued foreign producers’ questionnaires to

these two firms in Japan and responses to the Commission’s questionnaire were received from

both firms. *** is the larger of the two Japanese GOES producers, accounting for *** percent of

total GOES production in Japan during 2012. JFE reported that *** percent of its total company

sales in the most recent fiscal year were sales of GOES. Nippon reported that *** percent of its

total company sales in the most recent fiscal year were sales of GOES. The two firms indicate

that together they account for all production of GOES in Japan. A comparison of questionnaire

export data to official Commerce import statistics shows that in 2012, JFE and Nippon together

accounted for *** percent of U.S. imports from Japan. In response to a question concerning

changes in its Japanese GOES operations, Nippon indicated that, on October 1, 2012, Nippon

Steel Corp. and Sumitomo Metal Industries, Ltd. merged. Nippon added that, prior to the

merger, Sumitomo Metal Industries, Ltd. did not produce GOES. JFE reported no changes in its

Japanese GOES operations since 2010.
VII‐8

Operations on GOES

Table VII‐7 presents information on the GOES operations of the responding producers in

Japan. The annual capacity reported by JFE to produce GOES in Japan remained constant

throughout all periods since 2010 at *** short tons and is projected to remain the same in 2013

and 2014. Nippon’s reported annual capacity to produce GOES fluctuated *** throughout the

periods since 2010, ranging from a low of *** short tons in 2011 to a high of *** short tons in

2012. The firm indicated that its capacity “varies every year depending on product‐mix and is

calculated under normal operating conditions, where the time for proper maintenance and

repair is excluded.” Aggregate Japanese capacity to produce GOES was *** short tons in 2012

but company projections indicate that aggregate capacity will fall to *** short tons in 2014.

Reported production in Japan increased by *** percent from 2010 to 2012, but was ***

percent lower in January‐June 2013 than in January‐June 2012. GOES production in Japan is

projected to fall by *** percent from 2012 to 2014. Capacity utilization in Japan increased

overall from *** in 2010 to *** in 2012, but was lower at *** percent in January‐June 2013

than in January‐June 2012. Projections indicate that capacity utilization in Japan is expected to

increase to *** percent in 2014.   

Table VII-7 

GOES: Data for producers in Japan (JFE and Nippon), 2010-12, January-June 2012, January-June 

2013, and projections 2013-14 

*                    *                    *                    *                    *                    *                    *

In 2012, *** percent of total shipments of GOES produced in Japan was exported to the

United States. Exports of GOES from Japan to the United States fell from 2010 to 2011, but

increased in 2012 to a level lower than reported for 2010. Exports of Japanese GOES to the

United States were higher in January‐June 2013 than in January‐June 2012 and projections

indicated that exports to the United States will be higher in 2014 than reported in 2012

(although ***). *** share of total GOES shipments made by Japanese producers is accounted

for by exports to markets other than the United States. In 2012, *** percent of total shipments

of GOES produced in Japan were exported to markets other than the United States. JFE

reported that its export markets other than the United States were primarily *** and Nippon

reported that its other export markets were ***. Commercial home market shipments

accounted for *** percent of total Japanese shipments in 2012.  There were *** internal

consumption/transfers of GOES reported by the Japanese producers since January 2010.

Alternative products

Neither JFE nor Nippon reported ***. Aggregate data regarding the Japanese producers’

overall plant capacity and production, by type of item produced, are presented in table VII‐8.

These data show that *** accounted for *** percent of total plant production in 2012, and

domain‐refined and nondomain‐refined high‐permeability GOES accounted for *** and ***
VII‐9

percent of total plant production in 2012, respectively. Both JFE and Nippon reported

production of all three types of GOES in their Japanese facilities.

Table VII-8 

GOES: Overall plant capacity, production, and capacity utilization in Japan (JFE and Nippon), 

2010-12, January-June 2012, and January-June 2013 

*                    *                    *                    *                    *                    *                    *

The Japanese respondents argue that GOES imports from Japan do not compete with

products manufactured in the United States for the U.S. market because most (***) of the

imported Japanese GOES is “heat‐proof” product for the high‐end, premium GOES market that

uses proprietary, patent‐protected domain‐refined processes. This premium heat‐proof GOES

imported from Japan is used in specialty transformers where small size, high efficiency, and low

noise are at a premium. The Japanese respondents argue that this premium product is not

produced in the United States and is not imported into the United States from any other

country. The following tabulation shows the Japanese producers’ shares of exports to the

United States accounted for by “heat‐proof” and “non‐heat‐proof” GOES.4

  

*                    *                    *                    *                    *                    *                    *

THE INDUSTRY IN KOREA

Overview

POSCO is the sole producer of GOES in Korea and the sole exporter of GOES from Korea

to the United States. The Commission issued a foreign producer questionnaire to POSCO and

received a completed response. POSCO reported that *** percent of its total sales in the most

recent fiscal year were sales of GOES. A comparison of POSCO’s export data to official

Commerce import statistics shows that in 2012 it accounted for *** percent of U.S. imports

from Korea. POSCO reported that *** percent of its exports to the United States are made

through its related U.S importer, POSCO‐America. In response to a question concerning changes

in its Korean GOES operations since January 1, 2010, POSCO reported ***.

Operations on GOES

Table VII‐9 presents information on the GOES operations of POSCO, the sole producer

and exporter in Korea. The annual capacity reported by POSCO to produce GOES in Korea

remained constant since 2010 at *** short tons per year and is projected to remain the same in

2013 and 2014. POSCO’s production in Korea increased by *** percent from 2010 to 2012, but

                                                            

4 Japanese respondents’ postconference brief, pp. 35‐36.
VII‐10

was *** percent lower in January‐June 2013 than in January‐June 2012. Production is projected

to be *** percent lower in 2014 than in 2012. Capacity utilization increased from *** percent in

2010 to *** percent in 2012, but was *** percent in January‐June 2013 compared to ***

percent in January‐June 2012.   

Table VII-9 

GOES: Data for the producer in Korea (POSCO), 2010-12, January-June 2012, January-June 2013, 

and projections 2013-14 

*                    *                    *                    *                    *                    *                    *

In 2012, *** percent of total shipments of GOES from Korea was exported to the United

States, and *** percent were exported to other markets, predominantly ***. Exports of GOES

from Korea to the United States increased from *** short tons in 2010 to *** short tons in

2012, but were *** percent lower in January‐June 2013 than in January‐June 2012. Company

projections indicate that exports to the United States are expected to be *** percent lower in

2014 than reported in 2012. Commercial home market shipments accounted for *** percent of

total Korean shipments in 2012.  POSCO reported *** internal consumption/transfers of GOES

since January 2010.

Alternative products

POSCO reported ***. Data regarding POSCO’s overall plant capacity and production, by

type of item produced, are presented in table VII‐10. These data show that *** accounted for

*** of POSCO’s total plant production: *** percent of total plant production in 2010, ***

percent in 2011, and *** percent in 2012. POSCO’s production of *** fell by *** percent from

*** short tons in 2010 to *** short tons in 2012, and was *** percent lower in January‐June

2013 than reported in January‐June 2012.  

Production of the conventional GOES product by POSCO, which accounted for the ***

share of GOES production, accounted for *** percent of POSCO’s total plant production in

2012.  Domain‐refined and non‐domain‐refined high‐permeability GOES accounted for *** and

*** percent of POSCO’s total plant production in 2012, respectively.

Table VII-10 

GOES: Overall plant capacity, production, and capacity utilization in Korea (POSCO), 2010-12, 

January-June 2012, and January-June 2013 

*                    *                    *                    *                    *                    *                    *
VII‐11

THE INDUSTRY IN POLAND

Overview

The petition identified one producer of GOES in Poland: Stalprodukt S.A. (“Stalprodukt”).

The Commission issued a foreign producers’ questionnaire to Stalprodukt, but a response to the

Commission’s request for information was not provided. The petitioner argued that Stalprodukt

is “heavily focused on exports, with an increasing share targeted for the U.S. market.”5

According to Global Trade Atlas data presented in table VII‐11, total exports of GOES from

Poland during 2012 amounted to 89,723 short tons, 5.2 percent of which was exported to the

United States.  

Table VII-11 

GOES: Poland exports, by country market, 2010-12

Country 

Calendar year 

2010 2011 2012 

Quantity (short tons) 

India 24,958 27,291 23,046 

Germany 6,803 10,029 9,084 

Turkey 5,924 9,282 6,690 

Ukraine 7,754 7,696 6,486 

Italy 7,969 7,173 5,885 

United States 2,468 4,040 4,700 

China 1,055 6,616 4,666 

Czech Republic 322 343 3,990 

Austria 3,144 1,922 3,825 

Ireland 2,644 2,668 2,640 

All other 21,779 27,485 18,710 

 Total 84,820 104,544 89,723 

Share of quantity (percent)

India 29.4 26.1 25.7 

Germany 8.0 9.6 10.1 

Turkey 7.0 8.9 7.5 

Ukraine 9.1 7.4 7.2 

Italy 9.4 6.9 6.6 

United States 2.9 3.9 5.2 

China 1.2 6.3 5.2 

Czech Republic 0.4 0.3 4.4 

Austria 3.7 1.8 4.3 

Ireland 3.1 2.6 2.9 

All other 25.7 26.3 20.9 

 Total 100.0 100.0 100.0

Source: Global Trade Atlas, 7225.11 and 7226.11. 

                                                            

5 Petition, p. 27.
VII‐12

In 2010, Stalprodukt completed a capacity expansion of its GOES facility from approximately

66,000 short tons to approximately 110,000 shorts per year. In addition, Stalprodukt noted in

its 2011 annual report the production of new steel grades (i.e., HiB sheets or high‐permeability

GOES) was projected to launch during 2013.6

Stalprodukt’s home market and export sales of transformer sheets and strips for 2011

and 2012 are presented in the following tabulation (in short tons):

Item 2011 2012 

Home market sales 7,934 7,452 

Export sales 104,592 84,997 

Total sales 112,527 92,449 

Source: Annual Consolidated Financial Statement of Stalprodukt S.A. Capital Group 

for year 2012, pp. 4-6. 

These data show that most of Stalprodukt’s total sales in 2012 (91.9 percent) was for

export markets. Stalprodukt’s total sales of transformer sheets and strips declined by 17.8

percent from 112,527 short tons in 2011 to 92,449 short tons in 2012. The company noted that

a larger decline in sales volume was recorded in exports sales (18.7 percent) than in home

market sales (6.1 percent). It explained that “the sales volume decline was partly caused by

unfavorable market conditions, resulting from the reduction of demand and presence of

excessive production capacity on a global scale.” It added, however, that “the reduction of

output and sales was caused, in a greater degree, by the implemented investments program,

connected with the start‐up of the HiB technology. It caused switch‐offs and stoppages of some

production lines, reducing the production capacity of the sheets segment, especially in the

second half of the previous year.”7

THE INDUSTRY IN RUSSIA

Overview

The Commission issued foreign producers’ or exporters’ questionnaires to the following

two firms believed to produce GOES in Russia: Novolipetsk Steel (“NLMK”) and Public Joint

Stock Company Ashinskiy Metallurgical Works (“Ashinskiy”).8 Useable responses to the

                                                            

6 Stalprodukt Annual Report 2011,

http://www.stalprodukt.com.pl/pub/File/RAPORTY_EN/roczne/raport%20roczny%202011.pdf.   7 Annual Consolidated Financial Statement of Stalprodukt S.A. Capital Group for year 2012, pp. 4‐6.

8 These firms were identified through a review of information submitted in the petition and

contained in proprietary Customs records. The Russian respondents also indicated that, in addition to

U.S. imports of regular standard GOES produced by NLMK and Ashinskiy in Russia, substandard GOES

obtained from dismantled used transformers is exported to the United States by Russian exporter Asero.

(continued...)
VII‐13

Commission’s questionnaire were received from both firms. NLMK is, ***, the larger of the two

Russian producers, accounting for *** percent of total GOES production in Russia during 2012.

Ashinskiy reported that *** percent of its total company sales in the most recent fiscal year

were sales of GOES. NLMK reported that *** percent of its total company sales in the most

recent fiscal year were sales of GOES. According to estimates requested of the responding

Russian producers, the production of GOES in Russia reported in this part of the report is

believed to account for all production of GOES in Russia. A comparison of questionnaire export

data to official Commerce import statistics shows that in 2012, NLMK and Ashinskiy together

accounted for *** percent of U.S. imports from Russia. In response to a question concerning

changes in GOES operations in Russia, NLMK responded ***. Ashinskiy did not identify any

changes to its GOES operations in Russia.

Operations on GOES

Table VII‐12 presents information on the GOES operations of the responding producers

in Russia. Aggregate Russian capacity to produce GOES increased overall by *** percent from

*** short tons in 2010 to *** short tons in 2012. Reported production in Russia also increased

by *** percent from 2010 to 2012, but was *** percent lower in January‐June 2013 than in

January‐June 2012. GOES production in Russia is projected to increase by *** percent from

2012 to 2014. Capacity utilization in Russia fell from overall from *** percent in 2010 to ***

percent in 2012, and was lower at *** percent in January‐June 2013 than in January‐June 2012.

Projections indicate that capacity utilization in Russia is expected to increase to *** percent in

2014.   

Table VII-12 

GOES: Data for producers in Russia (Ashinskiy and NLMK), 2010-12, January-June 2012, JanuaryJune 2013, projections 2013-14 

*                    *                    *                    *                    *                    *                    *

In 2012, *** percent of total shipments of GOES produced in Russia was exported to the

United States. Exports of GOES from Russia to the United States increased from *** short tons

in 2010 to *** short tons in 2012. Exports of Russian GOES to the United States were lower in

January‐June 2013 than in January‐June 2012 and projections indicated that exports to the

United States are expected to fall to *** in 2014. Russian producer NLMK argued that the

conventional grades of GOES produced in Russia cannot compete with the higher grades

required under the 2007 DOE regulations for transformer production and that these regulations

have effectively eliminated NLMK’s sales to the United States. It explained that, prior to 2007,

transformers were regulated under DOE regulation TSL‐1, which could be met by using GOES

                                                            

(...continued)

Postconference brief of the Ministry of Economic Development of the Russian Federation, p. 2. Asero is

not identified as a Russian exporter or producer of GOES in proprietary Customs documents.  
VII‐14

grades M2 through M6. However, the 2007 DOE regulations can only be met by using GOES

grades of M3, M2, or higher.9

*** share of total GOES shipments made by Russian producers is accounted for by

exports to markets other than the United States. In 2012, *** percent of total shipments of

GOES produced in Russia were exported to markets other than the United States. Ashinskiy

reported that its export markets other than the United States were primarily *** and NLMK

reported that its other export markets were ***. Commercial home market shipments

accounted for *** percent of total Russian shipments in 2012.  There were *** internal

consumption/transfers of GOES reported by the Russian producers since January 2010.

Alternative products

In response to a Commission request for information concerning the production of

products other than GOES, NLMK reported ***. Ashinskiy did not provide a response to this

Commission request. NLMK’s overall plant capacity and production data, by type of item

produced, indicate that the Russian GOES producer manufactures only *** in its facility.

COMBINED SUBJECT COUNTRY DATA

Table VII‐13 presents information on GOES operations of the reporting producers and

exporters in the subject countries.

Table VII-13 

GOES: Aggregate data for producers in the subject countries (except for Poland), 2010-12, 

January-June 2012, January-June 2013, and projections 2013-14 

*                    *                    *                    *                    *                    *                    *

U.S. INVENTORIES OF IMPORTED MERCHANDISE

Table VII‐14 presents data on U.S. importers’ reported inventories of GOES.  

Table VII-14 

GOES: U.S. importers’ inventories, 2010-12, January-June 2012, and January-June 2013 

*                    *                    *                    *                    *                    *                    *

                                                            

9 NLMK postconference brief, p. 4.
VII‐15

U.S. IMPORTERS’ OUTSTANDING ORDERS

The Commission requested importers to indicate whether they imported or arranged for

the importation of GOES from any country after June 30, 2013. Table VII‐15 presents U.S.

import shipments of GOES arranged for importation after June 30, 2013.

Table VII-15 

GOES: U.S. importers’ arranged imports, July-September 2013, October-December 2013, JanuaryMarch 2014, and April-June 2014 

*                    *                    *                    *                    *                    *                    *

ANTIDUMPING OR COUNTERVAILING DUTY ORDERS IN THIRD‐COUNTRY MARKETS

Antidumping and countervailing duty investigations on GOES were initiated by China

against the United States on June 1, 2009. Preliminary duties were imposed on December 10,

2009 and final duties became effective on April 10, 2010. Final subsidy rates of 11.7 percent for

AK Steel and 12 percent for Allegheny Ludlum were imposed and a dumping margin of 7.8

percent for AK Steel and 19.9 percent for Allegheny were imposed. In response to a WTO

dispute settlement proceeding brought by the United States, China recalculated the

countervailing duty rates on July 31, 2013. The revised antidumping duty rate is 3.4 percent for

both AK Steel and Allegheny.10

Although there are no antidumping and countervailing duties imposed on imports of

GOES into India, the Indian Steel Ministry reportedly effectively banned imports of low‐grade

electrical steel in June 2011 through the issuance of a quality control order that mandates

certification for cold‐rolled grain‐oriented steel sheets by the Bureau of Indian Standards. 11  

INFORMATION ON NONSUBJECT COUNTRIES

Little public data is available on the global consumption and production of GOES. Global

demand for GOES is driven principally by growth in electricity consumption, reflected in the

expansion or upgrading of electrical transmission and generating capacity (e.g., transformers)

to accommodate growing electricity demand. According to the U.S. Energy Information

Administration (EIA), between 2008 and 2010 (the latest year for which data are available)

global energy consumption increased by 6 percent to 18.5 trillion kilowatt hours (kWh).12

During the same period, global installed electricity capacity increased by 9 percent to 5.1 billion

                                                            

10 TKES postconference brief, p. 11. 11 TKES postconference brief, exh. A. 12 EIA, International Energy Statistics online interactive database, found at http://www.eia.gov,

retrieved October 21, 2013.
VII‐16

kilowatts (kW). China is the second largest global consumer of electricity and has the second

largest installed electricity capacity after the United States.

According to Metal Bulletin Research (MBR), global GOES consumption totaled 2.8

million short tons (2.5 million metric tons) in 2011, of which 22 percent was high‐permeability

GOES.13 According to MBR, China is the largest global consumer of GOES. Regionally, China,

together with Southeast Asia, India, and Latin America reportedly account for over half of

global demand for GOES. Looking forward, MBR estimates that global demand for GOES will

grow by 3.7 percent annually between 2011 and 2020, compared with 6 percent annually

between 1996 and 2011. Emerging markets are expected to account for 70 percent of global

demand for GOES by 2020.14

According to MBR, global annual GOES production capacity totaled 3.3 million short tons

(3.0 million metric tons) in 2011, with an additional 330,000 short tons (300,000 metric tons)

expected to come online in 2013. Table VII‐16 shows global reported exports of GOES during

2010–12. Subject countries accounted for 70 percent of global exports of GOES in 2012. Leading

nonsubject producers and exporters of GOES include France, the United Kingdom, and Belgium,

which together accounted for 14 percent of global GOES exports in 2012. ThyssenKrupp

Electrical Steel, a subsidiary of German industrial conglomerate ThyssenKrupp, produces GOES

in Gelsenkirchen, Germany; Isbergues, France; and Nashik, India.15 Orb Electrical Steels, a part

of Canada‐based, electrical transformer producer Cogent Power (itself a wholly owned

subsidiary of Indian industrial conglomerate TATA Group) produces GOES in Newport, United

Kingdom.16 Commission staff is unaware of any producers of GOES in Belgium. Tables VII‐17 and

VII‐18 show global reported exports of GOES from France and the United Kingdom.

   

                                                            

13 Metal Bulletin Research (MBR), “A Strategic Five Year Outlook for the Global Grain Oriented

Electrical Steel Market,” Whitepaper, November 2012. 14 Metal Bulletin Research (MBR), “A Strategic Five Year Outlook for the Global Grain Oriented

Electrical Steel Market,” Whitepaper, November 2012.

15 ThyssenKrupp Electrical Steel website, found at

http://www.tkes.com/web2010/tkeswebcms.nsf/www/en_Standorte_is.html, retrieved October 21,

2013.

16 Cogent Power website, found at http://www.cogent‐power.com/orb/, retrieved October 21, 2013.
VII‐17

Table VII-16 

GOES: Global exports by reporting countries, 2010–12

Country 

Calendar year 

2010 2011 2012 

Quantity (short tons) 

Japan 431,635 473,220 466,767

Russia 168,695 149,107 263,584

Korea 163,656 161,816 171,251

United States 163,946 186,185 140,157

Germany 108,550 106,918 101,560

France 93,037 102,238 96,168

Poland 84,821 104,545 89,724

United Kingdom 78,983 81,674 76,282

Belgium 49,445 60,757 62,535

Czech Republic 52,229 56,232 55,097

Netherlands 5,951 8,240 39,402

China 13,447 13,766 38,642

Italy 21,573 23,744 17,148

Hungary 38,475 13,737 13,562

Canada 10,149 9,342 11,201

Singapore 1,382 7,451 11,007

Mexico 9,948 7,481 8,798

Taiwan 3,179 5,356 8,038

Brazil 7,228 4,543 7,797

Malaysia 10,060 12,850 6,975

India 2,073 2,702 3,788

Sweden 1,683 3,767 2,970

Hong Kong 9,762 2,770 2,866

Austria 1,151 1,004 2,137

Spain 2,653 1,756 1,290

All other 9,468 9,485 4,361

 Total 1,543,180 1,610,685 1,703,102

Source: Global Trade Atlas (accessed September 25, 2013), HS subheadings 7225.11 and 7226.11.

   
VII‐18

Table VII-17 

GOES: France’s reported exports, 2010–12

Country Calendar year 

2010 2011 2012 

Quantity (short tons) 

To the United States 718 1,609 243

Top export markets: 

 Italy 16,083 8,670 10,373

 Germany 12,567 8,627 9,972

 China 8,253 12,704 9,412

 Belgium 1,508 11,974 7,179

 Spain 6,471 5,730 6,042

 Portugal 8,069 5,795 5,703

 Turkey 933 2,255 4,413

 Pakistan 1,905 1,735 4,070

 Thailand 1,779 2,585 3,807

 Netherlands 2,786 2,161 3,322

 India 6,325 8,106 2,733

 Morocco 1,887 2,474 2,366

 Saudi Arabia 1,662 2,241 2,303

 Brazil 1,705 2,508 2,272

 Poland 2,488 2,033 2,260

 Colombia 1,215 1,127 2,123

 Lebanon 1,209 2,306 1,810

 Algeria 489 0 1,685

 United Arab Emirates 41 680 1,369

 South Africa 1,690 2,883 1,345

 Ecuador 1,254 502 1,226

 Chile 2,054 1,725 1,039

 Taiwan 767 796 1,019

 Mexico 830 1,281 1,017

 Czech Republic 24 322 794

 All other 8,329 9,412 6,271

 Total 93,041 102,238 96,166

Source: Global Trade Atlas (accessed September 25, 2013), HS subheadings 7225.11 and 7226.11. 

   
VII‐19

Table VII-18 

GOES: United Kingdom’s reported exports, 2010–12

Country Calendar year 

2010 2011 2012 

Quantity (short tons) 

To the United States 0 0 0

Top export markets: 

 Canada 9,268 9,895 9,916

 India 9,535 6,299 7,899

 Malaysia 8,884 11,352 7,501

 Turkey 3,810 2,402 7,499

 Germany 2,331 3,817 5,150

 Italy 6,320 4,339 4,957

 Spain 2,980 8,492 4,621

 Sweden 3,799 2,749 3,978

 Croatia 3,029 2,492 3,231

 France 4,373 5,248 2,728

 Pakistan 3,487 2,156 2,589

 Ireland 1,264 1,433 2,162

 United Arab Emirates 77 2,594 1,968

 China 2,406 3,619 1,498

 Taiwan 1,088 1,649 1,227

 Slovakia 1,095 2,689 1,133

 Saudi Arabia 643 629 896

 Netherlands 330 98 758

 Austria 754 1,513 729

 Kuwait 981 227 723

 Czech Republic 1,359 941 626

 Portugal 292 843 548

 Egypt 800 474 528

 Thailand 150 331 521

 Belgium 4,467 516 511

 All other 5,461 4,876 2,381

 Total 78,981 81,674 76,280

Source: Global Trade Atlas (accessed September 25, 2013), HS subheadings 7225.11 and 7226.11. 

A‐1

APPENDIX A

FEDERAL REGISTER NOTICES  

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 59059,

September 25,

2013

Grain‐Oriented Electrical Steel From

China, Czech Republic, Germany,

Japan, Korea, Poland, and Russia;

Institution of Antidumping and

Countervailing Duty Investigations  

and Scheduling of Preliminary Phase

Investigations

http://www.gpo.gov/fdsys/pkg/FR‐

2013‐09‐25/pdf/2013‐23277.pdf

78 FR 64011,

October 25, 2013

Tolling of Activity in Antidumping and

Countervailing Duty Proceedings

http://www.gpo.gov/fdsys/pkg/FR‐

2013‐10‐25/pdf/2013‐25082.pdf

78 FR 65283,

October 31, 2013

Grain‐Oriented Electrical Steel From

the People’s Republic of China, the

Czech Republic, Germany, Japan, the

Republic of Korea, Poland, and the

Russian Federation: Initiation of

Antidumping Duty Investigations

http://www.gpo.gov/fdsys/pkg/FR‐

2013‐10‐31/pdf/2013‐25805.pdf

78 FR 65265,

October 31, 2013

Grain‐Oriented Electrical Steel from

the People’s Republic of China:

Initiation of Countervailing Duty

Investigation

http://www.gpo.gov/fdsys/pkg/FR‐

2013‐10‐31/pdf/2013‐26002.pdf

B‐1

APPENDIX B

CALENDAR OF THE PUBLIC STAFF CONFERENCE

CALENDAR OF PUBLIC PRELIMINARY CONFERENCE 

Those listed below appeared as witnesses at the United States International Trade 

Commission’s preliminary conference: 

Subject: Grain-Oriented Electrical Steel from China, Czech Republic, 

Germany, Japan, Korea, Poland, and Russia 

Inv. Nos.: 701-TA-505 and 731-TA-1231-1237 (Preliminary) 

Date and Time: October 25, 2013 - 9:00 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:

Petitioners (David A. Hartquist, Kelley Drye & Warren LLP) 

Respondents (J. Christopher Wood, Gibson, Dunn & Crutcher LLP) 

 In Support of the Imposition of 

 Antidumping and Countervailing Duty Orders: 

Kelley Drye & Warren LLP 

Washington, DC 

on behalf of 

Petitioners 

 Raymond Polinski, General Manager, Grain-Oriented Electrical Steel, 

Allegheny Ludlum, LLC 

Ronald James, Manager, Sales & Marketing, Grain-Oriented Electrical Steel, 

Allegheny Ludlum, LLC 

James Rakowski, Manager, Grain-Oriented Electrical Steel Market & Product 

Development, Allegheny Ludlum, LLC 

 

Jamie Bishop, Commercial and Litigation Counsel, 

Allegheny Ludlum, LLC 

B‐3
 In Support of the Imposition of 

 Antidumping and Countervailing Duty Orders (coutinued): 

Eric Petersen, Vice President, Sales & Customer Service, 

AK Steel Corporation 

Geoff Pfeiffer, General Manager - Specialty Steel Sales, 

AK Steel Corporation 

Jerry Schoen, Principal Engineer, Product Development & Applications 

Engineering, AK Steel Corporation 

Steve Konstantinidis, Product/Marketing Manager, AK Steel Corporation 

Jeffrey Zackerman, Assistant General Counsel, Commercial Affairs, 

AK Steel Corporation 

Michael Kerwin, Director, Georgetown Economic Services, LLC 

Brad Hudgens, Economist, Georgetown Economic Services, LLC 

 

David A. Hartquist )

 John M. Hermann ) 

 ) – OF COUNSEL 

Grace W. Kim ) 

Benjamin B. Caryl )

B‐4
In Opposition to the Imposition of 

 Antidumping and Countervailing Duty Orders:

Foley & Lardner LLP 

Washington, DC 

on behalf of 

JFE Steel Corporation 

 Hidenari Suzuki, Staff Manager, Electrical Export Sec, 

Electrical Steel Sales Dept., JFE Steel Corporation 

 Bruce Becker, Manager, Steel Trading Unit-Midwest Manager, 

Toyota Tsusho America 

David Hickerson )

 Gregory Husisian ) 

Robert Huey ) – OF COUNSEL 

Christopher Swift ) 

Morgan West ) 

 

Gibson, Dunn & Crutcher LLP 

Washington, DC 

on behalf of 

Nippon Steel & Sumitomo Metal Corporation (“NSSMC”) 

 Shinichiro Kondo, Senior Manager, Electrical Sheet Global 

Marketing Department, NSSMC 

Takahiro Saito, Director/Unit Head, Flat Rolled Products 

Business Unit, Sumitomo Corporation of America 

 J. Christopher Wood ) – OF COUNSEL 

B‐5
In Opposition to the Imposition of 

 Antidumping and Countervailing Duty Orders:

Dentons US LLP 

Washington, DC 

on behalf of 

Novolipetsk Steel (“NLMK”) 

 Connie Chan, Queen City Steel, Inc. 

 Mark P. Lunn ) – OF COUNSEL 

Greenberg Traurig, LLP 

Washington, DC 

on behalf of 

Baoshan Iron & Steel Co., Ltd. 

Baosteel America, Inc. (“Baosteel”) 

 Yi (Steve) Huang, Department Manager, Baosteel 

 

 Philippe Bruno ) – OF COUNSEL 

DeKieffer & Horgan, PLLC 

Washington, DC 

on behalf of 

ThyssenKrupp Electrical Steel GmbH (“TKES”) 

 J. Kevin Horgan ) – OF COUNSEL 

International Magnetic Solutions 

New York, NY 

 Alper Isogren, President, International Magnetic Solutions 

REBUTTAL/CLOSING REMARKS:

Petitioners (David A. Hartquist, Kelley Drye & Warren LLP) 

Respondents (Gregory Husisian, Foley & Lardner LLP) 

B‐6
C‐1

APPENDIX C

SUMMARY DATA

C‐3

The data contained in tables C‐1 and C‐2 are entirely confidential, with the limited

exception of cumulated subject imports, nonsubject imports, and total imports.  These data are

presented publicly in table IV‐2.