Certain Carbon Steel Products From

Australia, Belgium, Brazil, Canada, Finland,

France, Germany, Japan, Korea, Mexico,

Poland, Romania, Spain, Sweden, Taiwan,

and the United Kingdom

Investigation Nos. AA1921-197 (Second Review); 701-TA-319, 320, 325-327, 348,

and 350 (Second Review); and 731-TA-573, 574, 576, 578, 582-587, 612,

and 614-618 (Second Review)

VOLUME I: Determination and Views of the Commission

Publication 3899 January 2007
U.S. International Trade Commission

Robert A. Rogowsky

Director of Operations

COMMISSIONERS

Address all communications to

Secretary to the Commission

United States International Trade Commission

Washington, DC 20436

Jennifer A. Hillman

Shara L. Aranoff, Vice Chairman

Daniel R. Pearson, Chairman

Stephen Koplan

Deanna Tanner Okun

Charlotte R. Lane

Staff assigned

Elizabeth Haines, Investigator

Michael Szustakowski, Investigator

Kelly Clark, Economist

Gerald Houck, Industry Analyst

Heather Sykes, Industry Analyst

Mary Klir, Accountant

June Brown, Attorney

David Fishberg, Attorney

Mary Jane Alves, Attorney

Gabriel Ellenberger, Research Assistant

Steven Hudgens, Statistician

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

Washington, DC 20436

January 2007

www.usitc.gov

Publication 3899

Certain Carbon Steel Products From

Australia, Belgium, Brazil, Canada, Finland,

France, Germany, Japan, Korea, Mexico,

Poland, Romania, Spain, Sweden, Taiwan,

and the United Kingdom

Investigation Nos. AA1921-197 (Second Review); 701-TA-319, 320, 325-327, 348,

and 350 (Second Review); and 731-TA-573, 574, 576, 578, 582-587, 612,

and 614-618 (Second Review)

VOLUME I: Determination and Views of the Commission
 
i

CONTENTS

Page

Determination ......................................................... 1

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

Separate and Dissenting Views of

Commissioner Stephen Koplan and Commissioner Charlotte R. Lane

with Respect to Certain Carbon Corrosion-Resistant Steel . . . . . . . . . . . . . . . . 147

Introduction and Overview

Introduction and overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OVERVIEW-1

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OVERVIEW-1

The original investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OVERVIEW-2

The Commission’s investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OVERVIEW-2

Subsequent proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OVERVIEW-4

The first reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OVERVIEW-4

The Commission’s reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OVERVIEW-4

Subsequent proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OVERVIEW-5

Previous and related title VII investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OVERVIEW-5

Previous and related safeguard investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OVERVIEW-10

Statutory criteria and organization of the report . . . . . . . . . . . . . . . . . . . . . . . . . . . . OVERVIEW-12

Statutory criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OVERVIEW-12

Organization of the report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OVERVIEW-14

Cut-To-Length (CTL) Plate

Part I: Introduction and Overview

General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-1

Commerce’s reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-6

Administrative reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-6

Results of expedited and full five-year reviews . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-12

Distribution of Continued Dumping and Subsidy Offset Act funds . . . . . . . . . . . . . CTL-I-16

The subject merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-17

Commerce’s scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-17

Tariff treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-18

The domestic like product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-19

Description and applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-19

Manufacturing processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-19

Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-21

Domestic like product issues concerning wide flat bar . . . . . . . . . . . . . . . . . . . . . . . CTL-I-22

Physical characteristics and uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-22

Interchangeability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-23

Channels of distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-23

Common manufacturing facilities, employees, and processes . . . . . . . . . . . . . . . CTL-I-23

Producer and consumer perceptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-24

Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-24
ii

CONTENTS – Continued

Page

Part I: Introduction and overview – Continued

Domestic like product issues concerning micro-alloy CTL plate . . . . . . . . . . . . . CTL-I-25

Physical characteristics and uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-25

Interchangeability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-26

Channels of distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-27

Common manufacturing facilities, employees, and processes . . . . . . . . . . . . . . . CTL-I-27

Producer and consumer perceptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-27

Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-28

U.S. market participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-28

U.S. producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-28

U.S. importers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-30

U.S. purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-32

Apparent U.S. consumption and market shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-I-34

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

U.S. market characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-II-1

U.S. channels of distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-II-1

Supply and demand considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-II-3

U.S. supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-II-3

U.S. demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-II-9

Substitutability issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-II-13

Factors affecting purchasing decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-II-15

Comparisons of domestic products, subject imports, and nonsubject imports . . . CTL-II-21

Elasticity estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-II-28

U.S. supply elasticity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-II-28

U.S. demand elasticity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-II-28

Substitution elasticity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-II-28

Part III: Condition of the U.S. industry

U.S. producers’ capacity, production, and capacity utilization . . . . . . . . . . . . . . . . . CTL-III-3

Anticipated changes in existing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-III-5

Alternative products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-III-6

U.S. producers’ domestic shipments, company transfers, and export shipments . . . CTL-III-7

U.S. producers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-III-9

U.S. producers’ imports and purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-III-10

U.S. producers’ employment, wages, and productivity . . . . . . . . . . . . . . . . . . . . . . CTL-III-11

Financial experience of the\ U.S. producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-III-12

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-III-12

Operations on CTL plate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-III-12

Capital expenditures and research and development expenses . . . . . . . . . . . . . . . CTL-III-15

Assets and return on investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-III-16
iii

CONTENTS – Continued

Page

Part IV: U.S. imports and the foreign industries

U.S. imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-1

Cumulation considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-7

Fungibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-7

Geographic markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-8

Presence in the market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-10

U.S. importers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-11

The industry in Belgium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-11

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-11

CTL plate operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-12

Alternative products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-13

The industry in Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-13

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-13

CTL plate operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-14

Alternative products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-15

The industry in Finland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-15

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-15

CTL plate operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-16

Alternative products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-17

The industry in Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-17

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-17

CTL plate operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-18

Alternative products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-23

The industry in Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-24

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-24

CTL plate operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-25

Alternative products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-26

The industry in Poland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-26

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-26

CTL plate operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-27

Alternative products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-29

The industry in Romania . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-29

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-29

CTL plate operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-30

Alternative products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-31

The industry in Spain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-31

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-31

The industry in Sweden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-32

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-32

The industry in Taiwan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-34

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-34

CTL plate operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-35

Alternative products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-36

The industry in the United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-36

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-36

CTL plate operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-37

Alternative products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-39
iv

CONTENTS – Continued

Page

Part IV: U.S. imports and the foreign industries – Continued

Global market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-39

Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-39

Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-40

Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-40

Additional global supply and demand factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-42

Consolidation among global producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-45

Global raw material availability and prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-45

Regional developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-IV-46

Part V: Pricing and related information

Factors affecting prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-V-1

Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-V-1

Transportation costs to the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-V-2

U.S. inland transportation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-V-3

Exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-V-3

Pricing practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-V-9

Pricing methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-V-9

Sales terms and discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-V-10

Price data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-V-11

Price trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-V-15

Price comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CTL-V-16
v

CONTENTS – Continued

Page

Corrosion-Resistant (CORE) Steel

Part I: Introduction and overview

General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-I-1

Commerce’s reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-I-5

Administrative reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-I-5

Results of expedited and full five-year reviews . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-I-10

Distribution of Continued Dumping and Subsidy Offset Act funds . . . . . . . . . . . . . CORE-I-12

The subject merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-I-14

Commerce’s scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-I-14

Tariff treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-I-15

The domestic like product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-I-15

Description and applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-I-15

Manufacturing processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-I-16

Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-I-16

Domestic like product issues concerning micro-alloy corrosion-resistant steel . . . . CORE-I-17

Physical characteristics and uses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-I-17

Interchangeability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-I-18

Channels of distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-I-18

Common manufacturing facilities, employees, and processes . . . . . . . . . . . . . . . CORE-I-18

Producer and consumer perceptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-I-19

Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-I-19

U.S. market participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-I-19

U.S. producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-I-19

U.S. importers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-I-21

U.S. purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-I-23

Apparent U.S. consumption and market shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-I-25

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

U.S. market characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-II-1

U.S. channels of distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-II-1

Supply and demand considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-II-3

U.S. supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-II-3

U.S. demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-II-9

Substitutability issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-II-13

Factors affecting purchasing decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-II-15

Comparisons of domestic products, subject imports, and nonsubject imports . . . CORE-II-21

Elasticity estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-II-25

U.S. supply elasticity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-II-25

U.S. demand elasticity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-II-25

Substitution elasticity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-II-25
vi

CONTENTS – Continued

Page

Part III: Condition of the U.S. industry

U.S. producers’ capacity, production, and capacity utilization . . . . . . . . . . . . . . . . . CORE-III-2

Anticipated changes in existing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-III-4

Alternative products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-III-5

U.S. producers’ domestic shipments, company transfers, and export shipments . . . CORE-III-6

U.S. producers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-III-9

U.S. producers’ imports and purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-III-10

U.S. producers’ employment, wages, and productivity . . . . . . . . . . . . . . . . . . . . . . CORE-III-10

Financial experience of the U.S. producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-III-11

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-III-11

Operations on corrosion-resistant steel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-III-12

Capital expenditures and research and development expenses . . . . . . . . . . . . . . . CORE-III-15

Assets and return on investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-III-16

Part IV: U.S. imports and the foreign industries

U.S. imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-1

Cumulation considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-4

Fungibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-5

Geographic markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-6

Presence in the market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-7

U.S. importers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-8

The industry in Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-9

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-9

Corrosion-resistant steel operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-9

Alternative products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-11

The industry in Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-11

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-11

Corrosion-resistant steel operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-12

Alternative products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-14

The industry in France . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-15

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-15

Corrosion-resistant steel operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-16

Alternative products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-17

The industry in Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-18

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-18

Corrosion-resistant steel operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-19

Alternative products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-21

The industry in Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-21

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-21

Corrosion-resistant steel operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-23

Alternative products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-25

The industry in Korea . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-25

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-25

Corrosion-resistant steel operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-26

Alternative products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-30
vii

CONTENTS – Continued

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Part IV: U.S. imports and the foreign industries – Continued

Global market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-32

Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-32

Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-31

Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-33

Additional global supply and demand factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-35

Consolidation among global producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-38

Global raw material availability and prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-38

Regional developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-IV-39

Part V: Pricing and related information

Factors affecting prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-V-1

Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-V-1

Transportation costs to the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-V-3

U.S. inland transportation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-V-4

Exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-V-4

Pricing practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-V-8

Pricing methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-V-8

Sales terms and discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-V-8

Price data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-V-9

Price trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-V-16

Price comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CORE-V-17

Appendixes

Appendixes

A. Federal Register notices and statement on adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1

B. Hearing witnesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

C. Summary data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1

D. Treatment of CTL plate and corrosion-resistant steel in the HTSUS . . . . . . . . . . . . . . . . . . . . D-1

E. Excluded forms of carbon steel products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1

F. Comments by U.S. producers, importers, purchasers, and foreign producers regarding 

 flat bar and other forms of CTL plate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1

G. Comments by U.S. producers, importers, and purchasers regarding carbon and micro-alloy 

 steel CTL plate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-1

H. Comments by U.S. producers, importers, and purchasers regarding carbon and micro-alloy 

 corrosion-resistant steel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . H-1

I. Comments by U.S. producers, importers, purchasers, and foreign producers regarding 

 the effects of the orders on CTL plate and the likely effects of revocation . . . . . . . . . . . . . I-1

J. Comments by U.S. producers, importers, purchasers, and foreign producers regarding 

 the effects of the orders on corrosion-resistant steel and the likely effects of revocation . . . J-1

K. Additional purchasing factor comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . K-1

Note.–Information that would reveal confidential operations of individual concerns may not be published

and therefore has been deleted from this report. Such deletions are indicated by asterisks.

 1

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

 2

 Commissioners Charlotte R. Lane and Stephen Koplan dissenting with respect to corrosion-resistant steel from

Australia, Canada, France, and Japan.

UNITED STATES INTERNATIONAL TRADE COMMISSION

Investigation Nos. AA1921-197 (Second Review); 701-TA-319, 320, 325-327, 348 and 350 (Second

Review); and 731-TA-573, 574, 576, 578, 582-587, 612, and 614-618 (Second Review)

Certain Carbon Steel Products from Australia, Belgium, Brazil, Canada, Finland, France, Germany,

Japan, Korea, Mexico, Poland, Romania, Spain, Sweden, Taiwan, and the United Kingdom

DETERMINATION

On the basis of the record1

 developed in the subject five-year reviews, the United States

International Trade Commission (Commission) determines, pursuant to section 751(c) of the Tariff Act of

1930 (19 U.S.C. § 1675(c)) (the Act), that revocation of the antidumping duty orders on cut-to-length

carbon steel plate from Belgium, Brazil, Finland, Germany, Mexico, Poland, Romania, Spain, Sweden,

and the United Kingdom, and the antidumping finding on cut-to-length carbon steel plate from Taiwan, as

well as revocation of countervailing duty orders on cut-to-length carbon steel plate from Belgium, Brazil,

Mexico, Spain, and Sweden, would not be likely to lead to continuation or recurrence of material injury to

an industry in the United States within a reasonably foreseeable time.

The Commission further determines that revocation of the antidumping duty orders on corrosionresistant steel from Germany and Korea and the countervailing duty order on corrosion-resistant steel

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

United States within a reasonably foreseeable time. Finally, the Commission determines that revocation

of the antidumping duty orders on corrosion-resistant steel from Australia, Canada, France, and Japan, as

well as the countervailing duty order on corrosion-resistant steel from France, would not be likely to lead

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

foreseeable time.2

BACKGROUND

The Commission instituted these reviews on November 1, 2005 (70 F.R. 62324, October 31,

2005), and determined on February 6, 2006, that it would conduct full reviews (70 F.R. 8874, February

21, 2006). Notice of the scheduling of the Commission’s reviews and of public hearings 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 March 30, 2006 (71 F.R. 16178). The hearings were held in Washington, DC, on October 17 and 19,

2006, and all persons who requested the opportunity were permitted to appear in person or by counsel.
 
 1

 Commissioners Koplan and Lane dissenting with respect to certain corrosion-resistant steel from Australia,

Canada, France and Japan. See Separate and Dissenting Views of Commissioner Stephen Koplan and

Commissioner Charlotte R. Lane with respect to Certain Carbon Corrosion-Resistant Steel. They join the

Commission’s views in Sections I, II, III, IV, and V, and, with respect to corrosion-resistant steel, Sections VI.A and

VI.B on domestic like product and domestic industry, respectively.

 2

 See Carbon Steel Plate from Taiwan, Inv. No. AA1921-197, USITC Pub. 970 at 5-7 (May 1979). The

Commission defined the domestic industry as a regional one encompassing the states of California, Oregon, and

Washington. See USITC Pub. 970 at 4-5.

 3

 See Certain Flat-Rolled Carbon Steel Products from Argentina, Australia, Austria, Belgium, Brazil, Canada,

Finland, France, Germany, Italy, Japan, Korea, Mexico, the Netherlands, New Zealand, Poland, Romania, Spain,

Sweden, and the United Kingdom, Invs. Nos. 701-TA-319-332, 334, 336-342, 344, and 347-353 (Final), and Invs.

Nos. 731-TA-573-579, 581-592, 594-597, 599-609, and 612-619 (Final), USITC Pub. 2664 at 217, 237, and 242

(Aug. 1993).

 4

 See USITC Pub. 2664 at 237-38, 241-44.

3

VIEWS OF THE COMMISSION

Based on the record in these second five-year reviews, we determine under section 751(c) of the

Tariff Act of 1930, as amended (“the Act”), that revocation of the countervailing duty orders on certain

imports of flat-rolled carbon steel cut-to-length steel plate (“CTL plate”) from Belgium, Brazil, Mexico,

Spain, and Sweden, of the antidumping duty orders on CTL plate from Belgium, Brazil, Finland,

Germany, Mexico, Poland, Romania, Spain, Sweden, and the United Kingdom, as well as of the

antidumping finding on CTL plate from Taiwan would not be likely to lead to continuation or recurrence

of material injury to an industry in the United States within a reasonably foreseeable time. 

With respect to certain corrosion-resistant steel, we determine under section 751(c) of the Act that

revocation of the countervailing duty order on certain corrosion-resistant steel from Korea and of the

antidumping duty orders on certain corrosion-resistant steel from Germany and Korea would be likely to

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

reasonably foreseeable time. We also determine that revocation of the countervailing duty order on

certain corrosion-resistant steel from France and of the antidumping duty orders on certain corrosionresistant steel from Australia, Canada, France, and Japan would not be likely to lead to continuation or

recurrence of material injury to an industry in the United States within a reasonably foreseeable time.1

I. SUMMARY

A. Cut-To-Length Plate

1. Background and Market Conditions

These five-year reviews concern an antidumping finding issued in 1979 as well as antidumping

and countervailing duty orders issued in 1993. In its 1979 finding, the Commission concluded that

subject CTL plate imports from Taiwan increased sharply in volume, substantially undersold and

suppressed prices for the domestic like product, and resulted in lost sales and lower profitability for the

domestic industry.2

 The more numerous determinations made in 1993 occurred in the context of a

national economic recession, a shrinking U.S. market for CTL plate, and falling CTL plate prices.3

 The

focus of those determinations was that the domestic industry had lost market share to subject imports,

subject imports depressed and suppressed prices for domestic CTL plate, and domestic industry profits

turned to losses as unit production costs climbed and prices for CTL plate fell.4

In 2000, the Commission conducted five-year reviews of the finding and orders, and determined

that revocation would be likely to lead to the continuation or recurrence of material injury. At the time of
 5

 See Certain Carbon Steel Products from Australia, Belgium, Brazil, Canada, Finland, France, Germany, Japan,

Korea, Mexico, the Netherlands, Poland, Romania, Spain, Sweden, Taiwan, and the United Kingdom, Invs. Nos.

AA1921-197 (Review), 701-TA-231, 319-20, 322, 325-28, 340, 342, and 348-350 (Review), and 731-TA-573-576,

578, 582-587, 604, 607-608, 612, and 614-618 (Review), USITC Pub. 3364 at 29, 32 (Nov. 2000).

 6

 See USITC Pub. 3364 at 28.

 7

 Commissioner Koplan and Commissioner Lane exercise their discretion to cumulate subject imports from all

eleven subject countries. In doing so, they determine that (1) subject imports from Belgium, Brazil, Finland,

Germany, Mexico, Poland, Romania, Spain, Sweden, Taiwan, and the United Kingdom, assessed individually, are

not likely to have no discernible adverse impact on the domestic industry in the event of revocation; (2) subject

imports from these countries are likely to compete with each other and with the domestic like product in the event of

revocation; and (3) many of the likely conditions of competition faced by subject imports from each of these subject

countries are similar. See their separate views with respect to cumulation below in Section V. Separate Views of

Commissioners Stephen Koplan and Commissioner Charlotte R. Lane on Cumulation with Respect to Cut-ToLength Plate Products.

4

the reviews, successive waves of unfairly traded CTL plate had left the domestic industry in a weakened

condition and prices for CTL plate were deteriorating or, at best, had stabilized at low levels.5

 Under

these adverse conditions of competition, the Commission found that even relatively modest volumes of

subject imports would be likely to have a significant adverse effect on prices for domestic CTL plate as

well as on the domestic industry.6

The adverse conditions that figured in both the original determinations and first five-year reviews

are no longer in evidence. The domestic industry is now stronger and fundamentally changed after a

difficult period marked by bankruptcies, mergers, and asset acquisitions. New and efficient capacity was

brought into production, less efficient capacity was shuttered, labor productivity increased, and existing

capacity was reorganized to enhance producers’ ability to manage production volumes in response to

changes in demand. Some integrated mills shed legacy costs through bankruptcy, and producers

generally will accrue fewer such costs in the future as a result of new labor agreements. Moreover, prices

for CTL plate in the U.S. market have doubled or nearly doubled since 2000 as demand has expanded

both in the United States and worldwide. The strong demand that drove the price increases is projected to

increase during the reasonably foreseeable future.

2. Cumulation7

In the current reviews, the Commission has exercised its discretion to consider the likely effects

of subject imports on a cumulated basis, except for subject imports from Mexico and Romania. Subject

imports from Mexico are ineligible for cumulation because revocation of the antidumping and

countervailing duty orders on those imports would be likely to have no discernible adverse impact on the

domestic industry. The CTL plate industry in Mexico is smaller than any other subject industry, it

exports only very small volumes, and even operating at very high rates of capacity utilization, it is unable

to meet home market demand. In addition, Mexico is a net importer of CTL plate, and prices for CTL

plate in Mexico are comparable to those in the United States. 

As to subject imports from Romania, the Commission declines to exercise its discretion to

cumulate those imports because they would likely compete under different conditions of competition than

would those from the remaining nine subject countries. The sole CTL plate producer in Romania is

related to a major U.S. producer, Romania has more excess capacity than any other subject country, and it

is the only subject country that is subject to tariff barriers in third-country markets.
 8

 Commissioner Koplan and Commissioner Lane have exercised their discretion to cumulate subject imports from

all eleven subject countries. Thus, they examine the likely cumulated volume of CTL imports from eleven subject

countries (Belgium, Brazil, Finland, Germany, Mexico, Poland, Romania, Spain, Sweden, Taiwan, and the United

Kingdom) in the event of revocation and because they concur with Vice Chairman Aranoff’s definition of the

domestic like product, they also refer to data for the non-alloy CTL plate industry such as that summarized in Table

C-1.

5

3. Belgium, Brazil, Finland, Germany, Poland, Spain, Sweden, Taiwan, and the

United Kingdom: Likely Volume, Likely Price Effects, and Likely Impact8

In evaluating the likely effects of revocation of the finding and orders on subject imports from

Belgium, Brazil, Finland, Germany, Poland, Spain, Sweden, Taiwan, and the United Kingdom, we do not

find it likely that the cumulated volume of subject imports will be significant. We note first that the

combined production capacity for the nine subject countries has declined substantially since 1993. In

addition, the CTL plate industry in each subject country is currently operating at a higher rate of capacity

utilization than in 1993, except for a small decline in the still high capacity utilization rate for the industry

in Brazil. Demand for CTL plate is projected to grow in the markets served by the subject producers,

and, in turn, these subject producers which project no substantial increases in production capacity within

the reasonably foreseeable future. For these reasons, the nine subject countries would have considerably

less ability to increase shipments to the United States upon revocation than they did prior to the orders.

For some of the same reasons, these foreign producers would lack a volume-based incentive to

increase shipments to the United States upon revocation. The subject CTL plate producers were generally

operating at high levels of capacity utilization in 2005, over 90 percent in most cases. Demand in the

markets served by those producers is projected to remain strong and grow during the reasonably

foreseeable future. Accordingly, the foreign producers already have non-U.S. markets into which they

sell a large percentage of their production.

Nor is there a strong price motivation to increase shipments to the United States. In general,

prices for CTL plate in the markets served by the subject foreign producers are high and comparable to

U.S. prices, even prior to allowing for higher shipping costs to the United States. Although there may be

such a price incentive vis-a-vis sales currently made into some Asian markets, most of the subject

producers export mainly to countries within the European Union, where prices are high and comparable

to U.S. prices. Although the European Union is not the primary export market for the CTL plate

industries in Taiwan and Brazil, Taiwan ships over *** percent of its production to the home market, and

Brazil similarly ships over *** percent of production to the home market, with most of the rest of

Brazilian production exported to neighboring markets in Latin America. Moreover, supply shortages

continue in the U.S. market for certain types of CTL plate, U.S. demand is projected to grow, and there

are no projected additions to production capacity in the United States for the reasonably foreseeable

future. For the reasons summarized here, we do not find it likely that the volume of the cumulated subject

imports will be significant in the event of revocation. 

Moreover, we do not find that the cumulated subject imports would likely significantly undersell

the domestic like product or would likely have significant price depressing or price suppressing effects on

prices for domestically produced CTL plate upon revocation. Most of the very large price increases for

CTL plate in the U.S. market occurred during 2004, despite a concurrent increase in the volume of total

imports. While prices for raw materials also increased, the spread between the price of CTL plate and

raw materials enlarged. Growing demand for CTL plate caused the price increases, and that demand is

projected to remain strong and grow in the reasonably foreseeable future.

Finally, in considering the likely impact of the cumulated subject imports, we find the domestic

industry is no longer in a vulnerable state. As noted, the industry has emerged stronger and transformed

after passing through a difficult period. Two of what are now the three leading domestic producers

invested in new, efficient facilities, while the third rationalized and consolidated much of the integrated
 9

 Commissioner Koplan and Commissioner Lane have exercised their discretion to cumulate subject imports from

all eleven countries and do not join in the discussion in this section.

 10 Commissioner Koplan and Commissioner Lane have exercised their discretion to cumulate subject imports

from all eleven countries and do not join in the discussion in this section.

6

segment of the industry. Most industry performance indicators improved dramatically during the period

of review, including production, U.S. shipments, net sales, capacity, and capacity utilization. Operating

losses experienced until 2003 turned to very strong profits in 2004 and thereafter. Consistent with these

very favorable financial indicators, there was no evidence that the domestic industry was experiencing a

cost/price squeeze. Moreover, the conditions that have enabled these strong improvements in industry

performance are not likely to change in the reasonably foreseeable future, as efficiency gains are not

likely to be lost and demand is projected to remain strong and grow. In this environment, and considering

that the cumulated subject imports are not likely to be significant in volume or to have significant adverse

price effects, we find that revocation of the finding and orders on CTL plate from Belgium, Brazil,

Finland, Germany, Poland, Spain, Sweden, Taiwan, and the United Kingdom is not likely to have a

significant adverse impact on the domestic industry within a reasonably foreseeable time.

4. Mexico: Likely Volume, Likely Price Effects, and Likely Impact9

In evaluating the likely effects of revocation of the orders on subject imports from Mexico, we do

not find it likely that the volume of subject imports from Mexico will be significant. Prior to the orders,

the volume of subject imports from Mexico never exceeded 1.2 percent of apparent U.S. consumption and

such imports were non-existent or very small during the period of review. Despite producing at very high

rates of capacity utilization, the Mexican CTL plate industry is unable to meet home market demand, with

the result that Mexico has become a significant net importer of CTL plate. Exports by the Mexican CTL

plate industry to all markets have been small or non-existent over the period of review. For the reasons

summarized here, we do not find it likely that the volume of CTL plate imports from Mexico would be

significant in the event of revocation.

With *** available excess capacity, the CTL plate industry in Mexico has no incentive to price

aggressively in order to ship large volumes of subject product into the U.S. market. Given the likely

small volume of subject imports from Mexico in the event of revocation, and the sustained rise in CTL

plate prices in the U.S. market, we do not find it likely that subject imports from Mexico will have

significant price depressing or price suppressing effects on the price of domestic CTL plate within a

reasonably foreseeable time.

In evaluating the likely impact of subject imports from Mexico, we consider that the domestic

industry is not vulnerable and has reported large profits since 2004. Accordingly, and given that it is not

likely that subject imports from Mexico will be significant in volume or have significant adverse price

effects, we find that revocation of the orders on CTL plate from Mexico would not be likely to have a

significant adverse impact on the domestic industry.

5. Romania: Likely Volume, Likely Price Effects, and Likely Impact10

In evaluating the likely effects of revocation of the antidumping duty order on subject imports

from Romania, we do not find it likely that the volume of subject imports will be significant. Although

the CTL plate industry in Romania likely has the ability to increase shipments to the United States

substantially, we find that it lacks the incentive to do so because (1) the sole CTL plate producer in

Romania recently became affiliated with a major U.S. producer and (2) Romanian CTL plate exports are

increasingly directed to the European Union, a market likely to become more attractive after Romania’s

likely accession to the European Union in early 2007.
7

Previously a state-owned enterprise, the sole Romanian producer became affiliated with the

multinational Mittal Steel companies in 2001. The Mittal companies gained their first presence in the

United States upon acquiring the assets of domestic producer ISG in April 2005, naming the new

enterprise Mittal Steel U.S.A. Consistent with these events, exports of CTL plate to the United States

increased irregularly from 2001 through 2004, but fell in 2005 by more than half compared to 2004, and

there were only *** short tons exported during interim 2006 compared to *** short tons during interim

2005. The corporate affiliation between Mittal Steel Galati and Mittal Steel U.S.A. makes it unlikely that

the Romanian producer would move aggressively to capture U.S. market share or sell CTL plate in such a

manner that would have a negative effect on prices received by the domestic industry.

The European Union is a more likely destination than the United States for any additional CTL

plate exports from Romania. CTL plate exports from Romania to the European Union have grown

irregularly since 2000, and were sharply higher during the first half of 2006, when they accounted for

nearly *** of total shipments by the Romanian CTL plate industry. Moreover, as of the closing of our

record, Romania’s membership to the European Union was scheduled to be ratified by early 2007. 

Accession to the European Union will facilitate Mittal Steel Galati’s access to that very large market,

making it an even more attractive export destination. Recent EU market prices for CTL plate have been

comparable to U.S. prices, even before factoring in additional transportation costs, providing another

reason that any shift in exports by Mittal Steel Galati will more likely be to the European Union than

more distant markets such as the United States. For the reasons summarized here, we do not find it likely

that the volume of subject CTL plate from Romania will be significant in the reasonably foreseeable

future in the event of revocation.

As to likely price effects, the record evidence shows that CTL plate prices rose sharply during

2004, and have remained at or near historic highs through late 2006. In particular, all five pricing

products examined by the Commission registered their greatest price increases in 2004, the same year that

subject imports from Romania reached their highest levels during the period of review. As noted,

demand for CTL plate in the U.S. market is projected to remain strong and grow in the reasonably

foreseeable future. For these reasons, and given that CTL plate imports from Romania are not likely to be

significant in volume, we conclude that subject imports from Romania are not likely to have significant

adverse price effects.

As to the likely impact of subject imports from Romania, we also note that the domestic industry

is not vulnerable, that the industry has reported very large operating margins beginning in 2004, and that

demand for CTL plate in U.S. is projected to grow during the reasonably foreseeable future. Given that

subject imports from Romania are not likely to be significant in volume or have significant adverse price

effects, and considering the very strong financial results of the domestic industry, we do not find it likely

that the subject imports would have a significant adverse impact on the domestic industry in the event of

revocation.

B. Corrosion-Resistant Steel

1. Majority Views

a. Background and Market Conditions

The Commission’s determination in the original investigations in 1993 found the domestic

industry had been materially injured by reason of the significant and increasing volume of corrosionresistant steel from Australia, Canada, France, Germany, Japan, and Korea, the high import penetration

throughout the period of investigation, the significant loss of market share for the domestic industry
 11 USITC Pub. 2664 at 188-192.

 12 CR/PR at Table CORE-I-1.

8

during a time of increasing apparent domestic consumption, the inability of the domestic industry to

capture market share even with price discounting, and the lower profitability of the domestic industry.11

Substantial changes in the U.S. market and industry have taken place since the issuance of the

antidumping and countervailing duty orders in August 1993, particularly since 2000. The domestic

industry producing corrosion-resistant steel experienced several bankruptcies, and shed billions of dollars

of pension obligations to the Pension Benefit Guaranty Corporation. Following these actions, significant

parts of the industry underwent consolidation and rationalization, a process that was facilitated in part by

the United States placing global safeguards on a variety of steel products, including corrosion-resistant

steel, from March 2002 through December 2003. Domestic producers renegotiated labor contracts,

reduced their fixed costs, and increased their productivity. As a result of these consolidations, the top

four domestic mills, AK Steel, Mittal Steel USA, Nucor and U.S. Steel, now account for *** percent of

U.S. corrosion-resistant steel production in 2005, as compared to *** percent in 1999. Furthermore,

several producers have expanded their facilities, invested in greenfield facilities, or announced expansion

plans (e.g., CSN, Winner Steel, SeverCorr, Steelscape, Mittal, and Nucor). While corrosion-resistant

steel production remains capital intensive, these changes have lowered the industry’s fixed costs. As a

result, it now is better able to control output and maintain price levels in response to changing business

cycles than it was during the original investigations and first reviews.

Consolidations and mergers among corrosion-resistant steel producers worldwide as well as in the

United States since the original investigations have supported a regionalization of production strategies by

multinational companies. For example, Mittal Steel N.V. acquired the assets of several U.S. producers,

including LTV, Bethlehem Steel, and Weirton Steel. In June 2006, Mittal announced a merger with

Arcelor. Once this merger closes in the first half of 2007, it will form the world’s largest steel producer

with steelmaking facilities located in regions throughout the world. The stated strategy of both Arcelor

and Mittal, even before their merger, was to acquire or build plants to serve clients within a region, rather

than having to export product from one region to another region. 

Apparent U.S. consumption has grown substantially since the original investigations, when it was

13.6 million short tons in 1992, to 22.7 million short tons in 2005.12 In 2004 and 2005, the U.S. market

experienced tight supplies, which affected contract terms between domestic producers and purchasers in

the U.S. auto industry. U.S. demand has been robust through the first half of 2006, and demand growth is

expected to continue for the reasonably foreseeable future, but at a slower rate. While North American

auto production appears to be declining somewhat in 2006, it is expected to recover in 2007 and grow at a

slow rate through 2008. Demand in the non-residential construction sector, however, is expected to

remain strong into 2007. Demand for corrosion-resistant steel outside the United States increased during

the review period, particularly in China and other industrializing countries in Asia, Latin America, and

Eastern Europe. Global vehicle production is expected to increase in the foreseeable future, driven by

developing countries such as China, India, and Brazil.

b. Cumulation

In the current reviews, we consider the likely effects of subject imports based on three groupings

of subject countries. As to subject imports from Canada, we decline to exercise our discretion to

cumulate those imports because they likely would compete under different conditions than would imports

from the remaining subject countries. The Canadian industry is unique in that auto producers and auto

parts suppliers treat the United States and Canada as a unified market for production and sourcing

decisions. These producers require just-in-time delivery of supplies; thus, North American corrosionresistant steel producers possess an economic advantage over other mills.
9

As to subject imports from Germany and Korea, we exercise our discretion to cumulate those

imports because they likely would compete under different conditions than would those from Australia,

France, and Japan. Unlike subject producers in Australia, France, and Japan, producers in Germany and

Korea have evidenced a strong interest in exporting to the North American market generally, confirming

the attractiveness of the North American region to these producers; yet they have limited production

facilities in North America from which to service their interests.

Finally, we exercise our discretion to cumulate subject imports from Australia, France, and Japan

because subject producers in those countries have demonstrated a lack of interest in supplying the U.S.

market to any significant degree. Instead, the industries in all three countries are focused to a significant

extent on markets in their respective regions (namely, Asia for Australia and Japan, and the European

Union for France), including their home markets. To the extent that Japan and France have any interest in

sales in the U.S. market, they are likely to sell corrosion-resistant steel from their U.S.-based affiliates or

subsidiaries.

c. Australia, France, and Japan: Likely Volume, Likely Price Effects,

and Likely Impact

In the absence of the orders, we do not find it likely that the volume of subject imports from

Australia, France, and Japan would be significant. Producers in the three cumulated countries currently

supply the least amount of corrosion-resistant steel to the U.S. market out of the subject countries. They

have operated at relatively high capacity utilization rates during the review period. Their focus has been

predominantly on their home and regional markets. In 2005, only *** percent of Australia’s exports were

to destinations outside Asia; less than *** percent of French shipments were exported outside the

European Union; and less than *** percent of Japan’s total shipments were exported outside the Asian

region.

Producers in the three cumulated countries have not shown a strong interest in the United States

or the broader North American market, and the record evidence does not indicate that there are volumebased incentives for this to change in the reasonably foreseeable future.

In Australia, the sole producer is focused on its home and nearby Asian markets. Its production is

for non-automotive applications as it manufactures primarily pre-fabricated construction components. It

has set up local corrosion-resistant production facilities in multiple Asian countries to serve regional

construction markets. The corrosion-resistant steel it sells in China and other Asian markets is of higher

quality than what these Asian producers currently produce or likely will be able to produce in the

reasonably foreseeable future. Thus, growing Asian production of other types of corrosion-resistant steel

is unlikely to displace Australia’s exports to that region.

In France, the Arcelor-Mittal merger, which is scheduled to close in the first half of 2007, will

establish an affiliation between two large multinational producers, Mittal Steel and Arcelor, which have

large production operations in both the United States and France. The French industry, which has

essentially been absent from the U.S. market at least since the first review period, will have even less

incentive to resume shipments to the United States, given the merger.

After the orders were imposed, Japanese producers began to supply transplant Japanese

automakers in the United States with corrosion-resistant steel made by the Japanese producers’ U.S.

affiliates. Most Japanese producers now are related to U.S. producers of corrosion-resistant steel

accounting for more than *** percent of U.S. production. Some of these relationships have led to

technology transfers to the U.S. joint ventures or *** in the United States. Furthermore, demand in Japan

and Asia generally grew throughout the period of review and is expected to continue to grow in the

reasonably foreseeable future. Japanese exports to China are concentrated in electro-galvanized

corrosion-resistant steel, which is not made in China and would thus not be displaced by any increase in

Chinese capacity to produce other corrosion-resistant steel.
10

For the reasons summarized here, we do not find it likely that the volume of these cumulated

subject imports would be significant in the event of revocation of the orders.

Nor do we find that the cumulated subject imports from Australia, France, and Japan would likely

have significant price depressing or price suppressing effects on U.S. prices. U.S. prices have been strong

and rose during the period of review for the following reasons: (1) rapidly growing demand, both in the

United States and globally; (2) substantial increases in raw material and energy costs; and (3) the

restructuring of the domestic industry during the review period, which lowered the domestic industry’s

fixed costs somewhat and gave it more flexibility than in the past to manage output in order to maintain

prices in the face of rising costs. While prices for some products had fallen from their period highs by

mid-2006, a number of U.S. producers announced additional price increases in the middle of 2006 and the

record shows that a number of contracts recently negotiated for shipments in the second half of 2006 and

2007 are at higher prices for domestic producers than in previous periods. 

We recognize that auto producers testified that, although they prefer to buy corrosion-resistant

steel from North American suppliers in order to satisfy their just-in-time inventory requirements, the

availability of subject imports in the event of revocation of the orders would give them leverage to

negotiate more favorable prices. The record does not support the likelihood that subject imports from

Australia, France, and Japan will result in significant price depressing or price suppressing effects on

prices for domestically produced corrosion-resistant steel. Producers in these cumulated subject countries

have neither the capacity nor the incentive to ship significant quantities of the subject product to the

United States in the event of revocation. Thus, producers in these subject countries are unlikely to price

aggressively for such limited sales or to ship significant enough volumes to create leverage for auto

producers to negotiate significantly lower prices.

Finally, in considering the likely impact of the cumulated subject imports from Australia, France,

and Japan, we find the domestic industry is no longer in a vulnerable state. The consolidations and

restructuring that occurred during the review period have resulted in an industry that is stronger and

healthier than in previous periods considered. Domestic producers have renegotiated labor contracts,

shed more than $7.5 billion in legacy costs, reduced their fixed costs, and increased their productivity. 

Following these significant structural changes, the industry returned to operating profitability and both

current producers and new entrants have invested in new facilities or plan to add 1.9 million net tons of

corrosion-resistant capacity by 2008.

Moreover, the conditions that have enabled these strong improvements in industry performance

are not likely to change in the reasonably foreseeable future, as efficiency gains are not likely to be lost

and demand is projected to remain strong and grow, albeit at a slower rate. In this environment, and

considering that these cumulated subject imports are not likely to be significant in volume or to have

significant adverse price effects, we find that revocation of the orders on corrosion-resistant steel from

Australia, France, and Japan is not likely to have a significant adverse impact on the domestic industry

within a reasonably foreseeable time.

d. Canada: Likely Volume, Likely Price Effects, and Likely Impact

In the absence of the order, we do not find it likely that the volume of subject imports from

Canada would be significant because Canadian producers lack a volume-based incentive to increase

shipments to the United States. During the review period, the Canadian industry shipped the majority of

its total shipments of corrosion-resistant steel to its home market. Canada is a net importer of corrosionresistant steel, not only from the United States, but globally. Moreover, production and demand in the

Canadian automotive and non-residential construction sectors are forecast to remain strong through 2008.

Most of Canada’s exports to the United States are directed toward the automotive sector, which

dominates the U.S. corrosion-resistant steel market. While imports from Canada have remained in the

U.S. market despite the order, their volume has been relatively consistent and they primarily supplied the

North American auto market pursuant to long-term contracts. Any increases in imports from Canada
11

during the period for the most part did not displace U.S. production, or represent sales lost to Canadian

product on the basis of price, but rather reflected increased U.S. demand or ***. 

Nor do Canadian producers have a strong price motivation to increase shipments to the United

States. Canadian prices have been comparable to U.S. prices, as would be expected in these markets

showing significant connections in the automotive sector.

These conditions are likely to remain for the reasonably foreseeable future. Thus, for the reasons

summarized here, we do not find it likely that the volume of subject imports from Canada would be

significant in the event of revocation of the order.

As to likely price effects, the record evidence shows that U.S. prices have been strong and rose

during the period of review because of growing demand, rising raw material and energy costs, and the

increased flexibility of the domestic industry to manage output in order to maintain prices in the face of

rising costs. U.S. producers recently negotiated contracts for shipments in the second half of 2006 and

2007 to auto producers that contain higher prices for domestic producers than in previous periods. 

Finally, the record also does not support the likelihood that subject imports from Canada will result in

significant price depressing or price suppressing effects on prices for domestically produced corrosionresistant steel. 

As to the likely impact of subject imports from Canada, we note that the domestic industry is not

vulnerable, that the consolidations and restructuring that occurred during the review period have created a

stronger and healthier industry, that the industry continues to invest and expand, and that demand for

corrosion-resistant steel in the United States is projected to remain strong and grow in the reasonably

foreseeable future. Given that subject imports from Canada are not likely to be significant in volume or

have significant adverse price effects, and considering the healthy condition of the domestic industry, we

do not find it likely that the subject imports would have a significant adverse impact on the domestic

industry in the event of revocation. 

e. Germany and Korea: Likely Volume, Likely Price Effects, and

Likely Impact

In contrast, we determine that the likely volume of cumulated subject imports from Germany and

Korea would be significant if those antidumping and countervailing duty orders are revoked. German and

Korean producers have substantially increased both their combined production capacity and their

production of corrosion-resistant steel since the original investigations. They have a combined excess

capacity of *** short tons in 2005, equivalent to *** percent of apparent U.S. consumption in 2005.

German and Korean producers have a volume-based incentive to increase shipments to the United

States upon revocation. Subject producers have exhibited a strong interest in exporting to the United

States and the rest of North America during the period of review and generally lack a significant North

American production base from which to supply their customers. Several subject producers have strong

relationships with U.S. distributors and/or customers that would facilitate their increased exports to the

United States from their production operations in their home countries. Another indication of their strong

interest in the North American market is the possibility that German producer ThyssenKrupp will

establish a production facility in North America by purchasing the assets of Dofasco in Canada, or

constructing or acquiring a production facility in the United States. The record, however, does not

indicate that it is more likely than not that this will happen in the reasonably foreseeable future as all of

these options are tied up in regulatory uncertainty or will take years to bring to fruition. Similarly, while

POSCO has indicated plans to construct a production facility in Mexico, such a facility would not be

completed in the reasonably foreseeable future. Thus, both producers will have to supply the U.S. market

with exports.

Subject producers from Korea also have a price motivation to increase shipments to the U.S.

market. The majority of imports from Korea have gone into the non-automotive sector during the review

period. A significant portion of Korea’s exports to its Asian markets is to the construction sector, which
 13 Except, as noted in the Commission’s opinion, we join its determination regarding legal standards, cut-tolength plate, and CORE steel with respect to background, domestic like product, and domestic industry.

12

is typically project-based and not supplied under long-term contracts. U.S. prices for corrosion-resistant

steel have typically been higher than prices in several Asian markets.

As to likely price effects, we find that the cumulated subject imports from Germany and Korea

would likely have significant price depressing or price suppressing effects on U.S. prices. While U.S.

prices increased over the period of review and the U.S. industry has lowered its fixed costs, subject

imports from Germany and Korea likely would have a significant effect on U.S. prices in the event of

revocation of the orders. The substantially increased volume of subject imports from Korea likely would

be priced aggressively to compete in non-automotive sectors. These imports would put pressure on spot

prices, which would, in turn, negatively affect contract prices. In contrast to our finding that subject

producers from Australia, Canada, France, and Japan either lack incentive or the ability to export

significant volumes to the United States, the substantially increased volume of subject imports from both

Germany and Korea likely would be used by U.S. automakers to leverage down U.S. prices, likely

leading to significant price depression or suppression. To the extent that producers from both countries

plan to establish North American production platforms, they will have to increase their volumes to this

sector. Therefore, they are likely to build their automotive customer base with discounted prices.

Finally, in considering the likely impact of the cumulated subject imports from Germany and

Korea, we find that subject imports would have a significant adverse impact on the U.S. industry. While

we do not find the domestic industry to be vulnerable, we do find that if the orders were revoked, the

likely significant increase in the volume of subject imports from Germany and Korea, coupled with their

likely adverse price effects, likely would have a significant negative impact on the domestic industry’s

ability to cover its high raw material and energy costs. Even though the domestic industry is stronger and

better able to weather changes in the corrosion-resistant steel market, aggressive pricing in the

construction sector and the spot market, by subject imports from Korea, and the ability of the automakers

to use the increased volumes of Korean and German product to leverage down prices in long-term

contracts likely would injure the U.S. industry.

2. Separate and Dissenting Views of Commissioner Stephen Koplan and

Commissioner Charlotte R. Lane with respect to Corrosion-Resistant Steel

Based on the record in these five-year reviews, we determine that revocation of the antidumping

and countervailing duty orders on certain carbon corrosion-resistant (“CORE”) steel from Australia,

Canada, France, Germany, Japan, and Korea would be likely to lead to continuation or recurrence of

material injury to an industry in the United States within a reasonably foreseeable time. Since we dissent

from the Commission’s determination with respect to CORE steel imports from Australia, Canada,

France, and Japan, we write separately to explain our findings.13

Cumulation. We have exercised our discretion to cumulatively assess the likely volume and

effect of subject imports of CORE steel from Australia, Canada, France, Germany, Japan, and Korea. 

Based on the record regarding, inter alia, the capacity, excess capacity, and exports of the industries in

Australia, Canada, France, Germany, Japan, and Korea, as well as their trade and pricing patterns during

the original investigations and the first and second reviews, we find that subject imports from all six

countries would be likely to have a discernible adverse impact on the domestic industry if the orders were

revoked. We also find that a reasonable overlap of competition between the subject imports and the

domestic like product would be likely to exist if the orders were revoked. While there are some variations

in the volume and price trends for subject imports from all six countries during the current review period,

we find that none of them are distinct from all others or that there are any significant differences in the

conditions of competition among the subject countries.
 14 Many of the conditions of competition are similar to those in the first reviews, including – demand for CORE

steel is dependent on demand in the automotive and construction industries; demand for hot-dipped galvanized

CORE steel grew while demand for electrogalvanized CORE steel declined; the CORE steel industry still is

technologically complex, involves high fixed costs, is capital intensive in nature, and requires high capacity

utilization rates to remain profitable; price continues to be an important factor in purchasing decisions, given the

broad interchangeability of CORE steel; and domestic CORE steel is sold both by contract and on the spot market

with little protection from contracts since price concessions are requested by purchasers if spot prices decline.

13

Conditions of Competition. While many of the conditions of competition in the first reviews are

the same in the current reviews,14 there are some differences which we also find relevant to our

determinations: 1) apparent U.S. consumption for CORE steel increased substantially during the first

reviews, but it only increased by 3.4 percent from 2000 to 2005 and is expected to remain flat or increase

at a slower rate in the reasonably foreseeable future than over the current review period; 2) in spite of the

consolidation and restructuring of the domestic CORE steel industry since the first reviews, the number of

domestic CORE steel producers has remained about the same, the industry’s production capacity

remained relatively steady, and its capacity utilization hovered around 80 percent during the current

review period, down from 87.3 percent in 1999; 3) while plans for a number of investments were

announced in 2005 and 2006, which will add 1.9 million short tons of CORE steel capacity by 2008,

these investments will provide for substantially less additional capacity than the 6.7 million short tons that

the industry’s positive performance warranted undertaking in the first review period; and 4) the U.S.

CORE steel industry’s raw material costs and energy costs increased substantially over the second review

period, which had a dramatic effect on CORE steel prices. 

Likely Continuation or Recurrence of Material Injury. Given the subject producers’ reliance on

export markets, their substantial and increasing excess capacity, taken together with the incentive to

maximize production, and their continued and increasing presence in the U.S. market, we find that they

likely will export significant and increasing volumes of CORE steel to the U.S. market upon revocation of

the antidumping and countervailing duty orders. Thus, we find that the volume of cumulated subject

imports likely would be significant if the orders were revoked. 

Because price is important to purchasing decisions, the presence of significant quantities of

CORE steel imports that are likely to enter the U.S. market after revocation will force domestic CORE

steel producers to either lower prices or lose sales. Thus, we also find that the likely volume of subject

imports is likely to significantly both undersell and result in price depressing or suppressing effects on the

prices of the domestic product, if the orders are revoked.

The domestic CORE steel industry’s performance has been mixed during the current reviews. At

the beginning of the current period, the domestic industry’s financial performance was lower than that in

the first reviews and similar to its performance during the original investigations. While the domestic

industry’s performance improved substantially in 2004, as apparent U.S. consumption and domestic

production increased and capacity utilization reached a period high of 85 percent, this level of

performance was not sustained as evidenced by the fact that the domestic industry’s operating income

declined in 2005. Based on the record evidence in these reviews, we find that the domestic industry is

currently vulnerable to material injury if the orders are revoked.

We find that there are a number of important factors underlying the financial performance of the

CORE steel industry. First, the swings in the domestic industry’s financial performance correlate to the

increases in cost of goods sold, particularly rising raw material and energy costs. The evidence indicates

that the automotive producers, which account for 47.6 percent of CORE steel shipments, have generally

not agreed to contracts with adjustments for increases in raw material and energy costs. Thus, the

domestic industry has been caught in a cost/price squeeze. Moreover, the automotive producers explicitly

indicated that if the orders were revoked they would use the threat of competition from subject imports to

ensure that the domestic CORE steel producers priced “competitively” and thus that this cost/price

squeeze would continue. Second, the CORE steel producers with substantial shares of their shipments
 15 See, e.g., Carbon Steel Plate from Taiwan, Inv. No. AA1921-197, USITC Pub. 970 (May 1979). The

antidumping finding issued by Treasury on imports from Taiwan has been in place since June 13, 1979. See, e.g.,

Confidential Staff Report, Mem. INV-DD-159 (Nov. 22, 2006), as amended by Mem. INV-DD-162 (Dec. 5, 2006)

and Mem. INV-DD-164 (Dec. 13, 2006) (“CR”) at OVERVIEW-2; Public Staff Report (“PR”) at OVERVIEW-2.

 16 See, e.g., CR at OVERVIEW-3; PR at OVERVIEW-2. They also alleged that an industry in the United States

was materially injured or threatened with material injury by reason of subsidized hot-rolled products from seven

countries and dumped imports of hot-rolled products from nine countries, and that an industry in the United States

was materially injured or threatened with material injury by reason of subsidized cold-rolled products from eleven

countries and dumped cold-rolled products from fifteen countries. See, e.g., id.

 17 In a joint opinion, four Commissioners cumulated subject CTL plate imports from at least eight countries,

namely Belgium, Brazil, Canada, Finland, Mexico, Spain, and Sweden, as well as South Africa (which was the

subject of a separate preliminary investigation by Commerce at the time). Commissioners Rohr and Watson

cumulated subject imports from these eight countries with subject imports from Germany, Poland, Romania, and the

United Kingdom. Commissioner Crawford cumulated subject imports only from these eight countries. 

(continued...)

14

devoted to the automotive sector generally are experiencing worse financial performance than those not

serving the automotive sector.

We consequently find that revocation of the orders under review will likely have a significant

adverse impact on the domestic industry. We therefore determine that revocation of the antidumping and

countervailing duty orders on CORE steel from Australia, Canada, France, Germany, Japan, and Korea

will likely lead to continuation or recurrence of material injury to the domestic CORE steel industry

within a reasonably foreseeable time.

II. BACKGROUND

A. Original Investigations and Related Litigation

There were two sets of original investigations that gave rise to the countervailing duty orders,

antidumping duty orders, and antidumping finding at issue in these grouped reviews. First, in conjunction

with its administration of the Trigger Price Mechanism, a program established to monitor prices at which

certain steel mill products entered the United States, the U.S. Department of the Treasury (“Treasury”)

self-initiated on October 25, 1978, an antidumping duty investigation on CTL plate from Taiwan and

published a corresponding dumping finding on February 14, 1979. In turn, the U.S. International Trade

Commission (“Commission”) instituted an investigation and on May 12, 1979, made its affirmative final

determination that a U.S. regional industry consisting of domestic producers in California, Washington,

and Oregon was injured or likely to be injured by subject imports from Taiwan.15

Second, on June 30, 1992, after expiration of the voluntary export agreements on steel that were

concluded in 1984, domestic producers Armco, Bethlehem, Geneva, Gulf States, Ispat/Inland, Laclede

Steel, LTV, Lukens, National, Sharon, USX, and WCI alleged in petitions filed simultaneously with the

U.S. Department of Commerce (“Commerce”) and the Commission, inter alia, that an industry in the

United States was materially injured or threatened with material injury by reason of subsidized imports of

CTL plate from ten countries and dumped imports of CTL plate from fifteen countries and that an

industry in the United States was materially injured or threatened with material injury by reason of

subsidized corrosion-resistant products from eight countries and dumped corrosion-resistant products

from nine countries.16 In its final determinations, the Commission concluded that the CTL plate industry

in the United States was materially injured by reason of subsidized CTL plate imports from Belgium,

Brazil, Germany, Mexico, Spain, Sweden, and the United Kingdom as well as imports sold at less than

fair value of CTL plate from Belgium, Brazil, Canada, Finland, Germany, Mexico, Poland, Romania,

Spain, Sweden, and the United Kingdom.17 Based on pre-URAA negligibility criteria, at least four
 17 (...continued)

Commissioner Nuzum cumulated subject imports from these eight countries along with subject imports from France,

Germany, Poland, Romania, and the United Kingdom. In his separate opinion, Commissioner Newquist cumulated

subject imports from Belgium, Brazil, Canada, Finland, Mexico, South Africa, Spain, and Sweden. In her separate

opinion, Commissioner Brunsdale cumulated subject imports from Belgium, Brazil, Canada, Finland, Mexico,

Spain, and Sweden. See, e.g., USITC Pub. 2664 at 237 n.40, 276-77, and 330.

 18 See, e.g., USITC Pub. 2664 at 219-36, 244-49, and 317.

 19 See, e.g., USITC Pub. 2664 at 161-210.

 20 See, e.g., USITC Pub. 2664.

 21 See, e.g., 58 Fed. Reg. 43749 (Aug. 17, 1993) (Belgium CVD CTL plate); 58 Fed. Reg. 43751 (Aug. 17, 1993)

(Brazil CVD CTL plate); 58 Fed. Reg. 43755 (Aug. 17, 1993) (Mexico CVD CTL plate); 58 Fed. Reg. 43761

(Aug. 17, 1993) (Spain CVD CTL plate); 58 Fed. Reg. 43758 (Aug. 17, 1993) (Sweden CTL plate); 58 Fed. Reg.

44164 (Aug. 19, 1993) (Belgium AD CTL plate); 58 Fed. Reg. 44164 (Aug. 19, 1993) (Brazil AD CTL plate); 58

Fed. Reg. 44165 (Aug. 19, 1993) (Finland AD CTL plate); 58 Fed. Reg. 44170 (Aug. 19, 1993) (Germany AD CTL

plate); 58 Fed. Reg. 44165 (Aug. 19, 1993) (Mexico AD CTL plate); 58 Fed. Reg. 44166 (Aug. 19, 1993) (Poland

AD CTL plate); 58 Fed. Reg. 44167 (Aug. 19, 1993) (Romania AD CTL plate); 58 Fed. Reg. 44167 (Aug. 19, 1993)

(Spain AD CTL plate); 58 Fed. Reg. 44168 (Aug. 19, 1993) (Sweden AD CTL plate); 58 Fed. Reg. 44168 (Aug. 19,

1993) (United Kingdom AD CTL plate); 58 Fed. Reg. 43759 (Aug. 17, 1993) (France CVD corrosion-resistant

steel); 58 Fed. Reg. 43752 (Aug. 17, 1993) (Korea CVD corrosion-resistant steel); 58 Fed. Reg. 44161 (Aug. 19,

1993) (Australia AD corrosion-resistant steel); 58 Fed. Reg. 44162 (Aug. 19, 1993) (Canada AD corrosion-resistant

steel); 58 Fed. Reg. 44169 (Aug. 19, 1993) (France AD corrosion-resistant steel); 58 Fed. Reg. 44170 (Aug. 19,

1993) (Germany AD corrosion-resistant steel); 58 Fed. Reg. 44163 (Aug. 19, 1993) (Japan AD corrosion-resistant

steel); and 58 Fed. Reg. 44159 (Aug. 19, 1993) (Korea AD corrosion-resistant steel).

 22 See Czestochowa v. United States, 890 F. Supp. 1053 (Ct. Int’l Trade 1995). The CIT affirmed the

Commission’s decision to include imports from South Africa in its cumulation analysis even though South Africa

was not entitled to an injury determination because imports from that country were subject to a separate preliminary

investigation by Commerce at the time of the Commission’s vote in these investigations. The CIT affirmed the

Commission’s decision not to apply the negligible imports exception to cumulation to subject imports from Poland,

Finland, and Romania. Finally, the CIT also affirmed the Commission’s decision to apply the negligible imports

exception to cumulation to subject imports from France and Korea.

 23 See Nippon Steel Corp. v. United States, 19 CIT 450 (1995).

15

Commissioners found subject CTL plate imports from France, Italy, and Korea to be negligible and, as a

result of their negative final determinations, orders were not issued on subject CTL plate imports from

these countries.18 The Commission further found that the domestic corrosion-resistant steel industry in

the United States was materially injured by reason of subsidized imports of corrosion-resistant carbon

steel flat products from France, Germany, and Korea as well as imports sold at less than fair value of

corrosion-resistant steel products from Australia, Canada, France, Germany, Japan, and Korea.19 The

Commission reached negative determinations with respect to corrosion-resistant steel from Brazil,

Mexico, New Zealand, and Sweden.20 Commerce published the countervailing duty orders on

August 17, 1993 and the antidumping duty orders on August 19, 1993.21

Several issues related to the Commission’s 1993 final determinations were appealed to the U.S.

Court of International Trade (“CIT”). With respect to CTL plate, the Court rejected all of the challenges

and affirmed the Commission’s final determinations;22 this decision was not further appealed. With

respect to corrosion-resistant-steel, the Court affirmed the Commission’s affirmative material injury

determinations with respect to Australia, Canada, France, Germany, Japan, and Korea, and its negative

determinations with respect to Brazil, Mexico, New Zealand, and Sweden.23 The Court remanded one

Commissioner’s separate determination with respect to the application of the negligibility exception to
 24 See Nippon Steel Corp. v. United States, 19 CIT 827 (1995).

 25 See Invs. Nos. AA1921-197 (Review), 701-TA-231, 319-20, 322, 325-28, 340, 342, and 348-50 (Review), and

731-TA-573-76, 578, 582-87, 604, 607-08, 612, and 614-18 (Review), USITC Pub. 3364 at 19-34 (Nov. 2000). 

Commissioners Koplan and Askey determined, however, that revocation of the order on CTL plate from the United

Kingdom would not be likely to lead to continuation or recurrence of material injury to the domestic industry within

a foreseeable time. See id. at 59-61.

 26 See USITC Pub. 3364 at 19-34.

 27 See USITC Pub. 3364 at 47-58.

 28 See, e.g., 65 Fed. Reg. 78469 (Dec. 15, 2000); 65 Fed. Reg. 78467 (Dec. 15, 2000).

 29 See Usinor Industeel, S.A. v. United States, 26 CIT 467 (2002).

 30 See, e.g., Certain Steel Products from Australia, Belgium, Brazil, Canada, Finland, France, Germany, Japan,

Korea, Mexico, the Netherlands, Poland, Romania, Spain, Sweden, Taiwan, and the United Kingdom, Invs. Nos.

AA1921-197 (Review) (Remand), 701-TA-231, 319-20, 322, 325-28, 340, 342, and 348-50 (Review) (Remand), and

731-TA-573-76, 578, 582-87, 604, 607-08, 612, and 614-18 (Review) (Remand), USITC Pub. 3526 (Jul. 2002).

 31 See Usinor Industeel, S.A. v. United States, 26 CIT 1402 (2002).

 32 See Duferco Steel, Inc. v. United States, 296 F.3d 1087, 1095 (Fed. Cir. 2002).

16

cumulation to Mexican imports. Upon remand, the Court sustained the Commissioner’s clarified views.24

These decisions were not further appealed.

B. First Reviews and Related Litigation

After conducting full five-year reviews of the grouped transition orders, on November 20, 2000,

the Commission determined that revocation of the finding and orders on CTL plate from Belgium, Brazil,

Finland, Germany, Mexico, Poland, Romania, Spain, Sweden, Taiwan, and the United Kingdom would be

likely to lead to continuation or recurrence of material injury to the domestic industry within a reasonably

foreseeable time.25 It determined that revocation of the antidumping and countervailing duty orders on

CTL plate from Canada would not be likely to lead to continuation or recurrence of material injury to the

domestic industry within a reasonably foreseeable time.26 The Commission also reached an affirmative

determination with respect to the orders on corrosion-resistant steel from Australia, Canada, France,

Germany, Japan, and Korea.27 On December 15, 2000, Commerce published notices of the continuation

of the countervailing and antidumping duty orders and finding as to which the Commission made

affirmative determinations and of the revocation of the antidumping and countervailing duty orders on

CTL plate from Canada.28

With respect to CTL plate, only the Commission’s review determinations concerning subject

imports from Belgium and Germany were appealed to the CIT. Initially, the Court remanded the case for

the Commission to apply the meaning of “likely” as “probable” in conducting both its cumulation

analysis under 19 U.S.C. § 1675a(a)(7) and its likelihood of material injury analysis.29 On remand, the

Commission provided further explanation for its views,30 and the CIT found that the Commission had

adequately explained all the issues for which the determinations were remanded.31 But, because the U.S.

Court of Appeals for the Federal Circuit (“Federal Circuit”) had ruled in a separate proceeding that floor

plate was not within the scope of the 1993 antidumping and countervailing duty orders that formed the

basis for those reviews, the CIT again remanded the determinations so that the Commission could review

the pertinent data without consideration of floor plate.32 On the second remand, the Commission once

again determined that revocation of the antidumping and countervailing duty orders on CTL plate from

Belgium and Germany would be likely to lead to continuation or recurrence of material injury to the
 33 See, e.g., Certain Carbon Steel Products (Cut-to-Length Plate) from Belgium and Germany, Invs. Nos. 701-TA319 and 322 (Review) (Second Remand), and 731-TA-573 and 578 (Review) (Second Remand), USITC Pub. 3587

(Mar. 2003).

 34 See Usinor Industeel, S.A. v. United States, Slip Op. 03-118, 2003 WL 22080731 (Ct. Int’l Trade Sept. 8,

2003), aff’d, 112 Fed. Appx. 59 (Fed. Cir. Nov. 8, 2004).

 35 The CIT remanded to the Commission to explain why the “no discernible adverse impact” standard did not

preclude cumulation of imports from France and Germany, particularly in view of each country’s relatively high

capacity utilization rates and their contention that their home markets and the European Union were and would

remain the major focus of their exports. The NAFTA Panel likewise remanded the Commission’s decision to

cumulate imports from Canada given, inter alia, its high capacity utilization rate. The NAFTA Panel also asked the

Commission to address its finding that the domestic industry was vulnerable. In both remand opinions, the

Commission provided a thorough analysis of the facts supporting its findings against no discernible adverse impact

and explained that the threshold for a finding of a likely discernible adverse impact is lower than the threshold for

finding likely volume and likely material injury, although some of the same facts may support both findings. See

Corrosion-Resistant Carbon Steel Flat Products From France and Germany, Invs. Nos. 701-TA-348-349, 731-TA615 (Review) (Remand), USITC Pub. 3539 (Sept. 2002); Corrosion-Resistant Carbon Steel Flat Products From

Canada, Inv. No. 731-TA-614 (Review) (Remand), USITC Pub. 3753 (Dec. 2004).

 36 See Usinor v. United States, 342 F. Supp. 2d 1267 (Ct. Int’l Trade 2004).

 37 See Corrosion-Resistant Carbon Steel Flat Products from Canada, USA-CDA-2000-1904-11.

 38 See 70 Fed. Reg. 62324 (Oct. 31, 2005) (notice of institution).

 39 Commerce revoked the countervailing duty orders on CTL plate and corrosion-resistant steel from Germany

prior to the commencement of these second reviews. See 69 Fed. Reg. 17131 (Apr. 1, 2004).

17

domestic industry within a reasonably foreseeable time.33 The CIT and, ultimately, the Federal Circuit,

affirmed.34

With respect to corrosion-resistant steel, the Commission’s first five-year review determinations

regarding subject imports from France and Germany and subject imports from Canada were appealed to

the CIT and a Chapter 19 North American Free Trade Agreement (“NAFTA”) binational panel,

respectively, and ultimately upheld after remand.35 The CIT held, in affirming the Commission on

remand, that the statutory negligibility standard for original investigations does not apply to the

Commission’s determination of “no discernible adverse impact” in five-year reviews.36 The NAFTA

Panel likewise affirmed the Commission’s affirmative determination with respect to corrosion-resistant

steel from Canada.37

C. Second Reviews

The Commission instituted these second five-year reviews of the remaining finding and orders on

CTL plate and corrosion-resistant steel on November 1, 2005,38 and effective February 6, 2006,

determined to conduct full reviews pursuant to section 751(c)(5) of the Act.39 With respect to CTL plate,

the Commission found the domestic interested party group response to the notice of institution to be

adequate. It also found the respondent interested party group responses with respect to Belgium, Brazil,

Finland, Germany, Mexico, Poland, and the United Kingdom to be adequate, but the respondent

interested party group responses with respect to Romania, Spain, Sweden, and Taiwan to be inadequate. 

The Commission decided, however, to conduct full reviews concerning CTL plate from all subject

countries to promote administrative efficiency. With respect to corrosion-resistant steel, the Commission

found the domestic interested party group response to the notice of institution for each set of reviews to

be adequate, and the respondent interested party group responses to be adequate with respect to each of
 40 See, e.g., 71 Fed. Reg. 8874 (Feb. 21, 2006) (notice of decision to conduct full reviews).

 41 See 71 Fed. Reg. 11577 (Mar. 8, 2006) (Belgium, Brazil, Finland, Germany, Mexico, Poland, Romania, Spain,

Sweden, Taiwan, and the United Kingdom).

 42 See 71 Fed. Reg. 32521 (June 6, 2006) (Mexico); 71 Fed. Reg. 32522 (June 6, 2006) (Brazil); 71 Fed. Reg.

32523 (June 6, 2006) (Spain).

 43 See 71 Fed. Reg. 58587 (Oct. 4, 2006) (Sweden); 71 Fed. Reg. 58585 (Oct. 4, 2006) (Belgium).

 44 See 71 Fed. Reg. 58585 (Oct. 4, 2006) (United Kingdom); 71 Fed. Reg. 62121 (Oct. 23, 2006) (terminating

review); 71 Fed. Reg. 62121 (Oct. 23, 2006) (revoking countervailing duty order).

 45 See 71 Fed. Reg. 32508 (Jun. 6, 2006) (Australia, Canada, France, Germany, Japan, and South Korea ).

 46 See 71 Fed. Reg. 32519 (Jun. 6, 2006) (Korea).

 47 See 71 Fed. Reg. 58584 (Oct. 4, 2006) (France).

 48 19 U.S.C. § 1677(4)(A).

18

the subject countries. It, therefore, determined to conduct full reviews with respect to corrosion-resistant

steel.40

Commerce expedited its second reviews of the antidumping duty orders on CTL plate from

Belgium, Brazil, Finland, Germany, Mexico, Poland, Romania, Spain, Sweden, and the United Kingdom

and the antidumping finding on CTL plate from Taiwan and published final affirmative review

determinations on March 8, 2006.41 Commerce also expedited its second reviews of the countervailing

duty orders on CTL plate from Mexico, Brazil, and Spain and published final affirmative review

determinations on June 6, 2006.42 Commerce conducted full second reviews of the other CTL plate

countervailing duty orders and published affirmative determinations regarding subject imports from

Belgium and Sweden on October 4, 2006.43 Commerce determined, however, that revocation of the

countervailing duty order on CTL plate from the United Kingdom would not be likely to lead to

continuation or recurrence of a countervailable subsidy and terminated the order; the Commission

terminated its related review accordingly.44 Commerce also expedited its second reviews of the

antidumping duty orders on corrosion-resistant steel from Australia, Canada, France, Germany, Japan,

and South Korea and published final affirmative review determinations on June 6, 2006.45 Commerce

expedited its second review of the countervailing duty order on corrosion-resistant steel from Korea and

published a final affirmative review determination on June 6, 2006.46 Commerce conducted a full second

review of the countervailing duty order on corrosion-resistant steel from France and published an

affirmative determination on October 4, 2006.47

III. LEGAL STANDARDS

The legal standards discussed below apply to all of our findings including our determinations

related to subject imports of CTL plate that are found in section IV and our determinations related to

corrosion-resistant steel that are found in section VI as well as the separate and dissenting opinions that

follow.

A. Domestic Like Product

In making its determinations under section 751(c), the Commission defines the “domestic like

product” and the “industry.”48 The Act defines “domestic like product” as “a product which is like, or in
 49 19 U.S.C. § 1677(10). See Nippon, 19 CIT at 455; Timken Co. v. United States, 913 F. Supp. 580, 584 (Ct.

Int’l Trade 1996); Torrington Co. v. United States, 747 F. Supp. 744, 748-49 (Ct. Int’l Trade 1990), aff’d, 938 F.2d

1278 (Fed. Cir. 1991); see also S. Rep. No. 96-249 at 90-91 (1979).

 50 19 U.S.C. § 1677(4)(A).

 51 See United States Steel Group v. United States, 873 F. Supp. 673, 682-83 (Ct. Int’l Trade 1994), aff’d, 96 F.3d

1352 (Fed. Cir. 1996).

 52 See, e.g., Internal Combustion Industrial Forklift Trucks from Japan, Inv. No. 731-TA-377 (Second Review),

USITC Pub. 3831 at 10-14 (Dec. 2005).

 53 19 U.S.C. § 1677(4)(B).

19

the absence of like, most similar in characteristics and uses with, the article subject to an investigation

under this subtitle.”49

B. Domestic Industry

1. In General

Section 771(4)(A) of the Act defines the relevant industry as the “domestic producers as a whole

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

proportion of the total domestic production of that product.”50

2. Sufficient Production-Related Activities

In defining the domestic industry, the Commission’s general practice has been to include

producers of all domestic production of the like product, whether toll-produced, captively consumed, or

sold in the domestic merchant market, provided that adequate production-related activity is conducted in

the United States.51 In assessing the nature and extent of production-related activities in the United States

associated with a particular operation, the Commission generally considers six factors:

(1) source and extent of the firm’s capital investment;

(2) technical expertise involved in U.S. production activities;

(3) value added to the product in the United States;

(4) employment levels;

(5) quantity and type of parts sourced in the United States; and

(6) any other costs and activities in the United States directly leading to production of the like 

product.

No single factor is determinative and the Commission may consider any other factors it deems relevant in

light of the specific facts of any investigation or review.52

3. Related Parties

The Commission must also determine whether any producer of the domestic like product should

be excluded from the domestic industry pursuant to section 771(4)(B) of the Act. That provision of the

statute allows the Commission, if appropriate circumstances exist, to exclude from the domestic industry

producers that are related to an exporter or importer of subject merchandise or which are themselves

importers.53 Exclusion of such a producer is within the Commission’s discretion based upon the facts
 54 See, e.g., Sandvik AB v. United States, 721 F. Supp. 1322, 1331-32 (Ct. Int’l Trade 1989), aff’d mem., 904

F.2d 46 (Fed. Cir. 1990); Empire Plow Co. v. United States, 675 F. Supp. 1348, 1352 (Ct. Int’l Trade 1987). The

primary factors the Commission has examined in deciding whether appropriate circumstances exist to exclude the

related parties include: (1) the percentage of domestic production attributable to the importing producer; (2) the

reason the U.S. producer has decided to import the product subject to investigation, i.e. whether the firm benefits

from the less than fair value sales or subsidies or whether the firm must import in order to enable it to continue

production and compete in the U.S. market; and (3) the position of the related producers vis-a-vis the rest of the

industry, i.e. whether inclusion or exclusion of the related party will skew the data for the rest of the industry. See,

e.g., Torrington Co. v. United States, 790 F. Supp. 1161, 1168 (Ct. Int’l Trade 1992), aff’d mem., 991 F.2d 809

(Fed. Cir. 1993). The Commission has also considered the ratio of import shipments to U.S. production for related

producers and whether the primary interests of the related producers lie in domestic production or in importation. 

See, e.g., Melamine Institutional Dinnerware from China, Indonesia, and Taiwan, Invs. Nos. 731-TA-741-743

(Final), USITC Pub. 3016 at 14 n.81 (Feb. 1997).

 55 See, e.g., USEC, Inc. v. United States, 132 F. Supp.2d 1, 12 (Ct. Int’l Trade 2001).

 56 19 U.S.C. § 1675a(a)(7).

 57 19 U.S.C. § 1675a(a)(7).

 58 SAA, H.R. Rep. No. 103-316, vol. I (1994).

 59 For a discussion of the analytical framework of Commissioner Koplan regarding the application of the “no

discernible adverse impact” provision, see Malleable Cast Iron Pipe Fittings from Brazil, Japan, Korea, Taiwan, and

Thailand, Invs. Nos. 731-TA-278 to 280 (Review) and 731-TA-347 to 348 (Review), USITC Pub. 3274 (Feb. 2000);

Iron Metal Construction Castings from India; Heavy Iron Construction Castings from Brazil; and Iron Construction

Castings from Brazil, Canada, and China, Invs. Nos. 303-TA-13 (Review), 701-TA-249 (Review), and 731-TA-262,

263, and 265 (Review), USITC Pub. 3247 (Oct. 1999) (Views of Commissioner Stephen Koplan Regarding

(continued...)

20

presented in each case.54 The purpose of the provision is to exclude domestic producers that substantially

benefit from importation of subject merchandise or their relationships with foreign exporters.55

C. Cumulation

Section 752(a) of the Act provides that:

the Commission may cumulatively assess the volume and effect of imports of the subject

merchandise from all countries with respect to which reviews under section 1675(b) or

(c) of this title were initiated on the same day, if such imports would be likely to compete

with each other and with domestic like products in the United States market. The

Commission shall not cumulatively assess the volume and effects of imports of the

subject merchandise in a case in which it determines that such imports are likely to have

no discernible adverse impact on the domestic industry.56

Thus, cumulation is discretionary in five-year reviews. The Commission may exercise its discretion to

cumulate, however, only if the reviews are initiated on the same day and the Commission determines that

the subject imports are likely to compete with each other and the domestic like product in the U.S.

market. The statute precludes cumulation if the Commission finds that subject imports from a country are

likely to have no discernible adverse impact on the domestic industry.57 We note that neither the statute

nor the Uruguay Round Agreements Act (“URAA”) Statement of Administrative Action (“SAA”)

provides specific guidance on what factors the Commission is to consider in determining that imports “are

likely to have no discernible adverse impact” on the domestic industry.58 With respect to this provision,

the Commission generally considers the likely volume of the subject imports and the likely impact of

those imports on the domestic industry within a reasonably foreseeable time if the orders are revoked.59
 59 (...continued)

Cumulation).

 60 The four factors generally considered by the Commission in assessing whether imports compete with each

other and with the domestic like product are: (1) the degree of fungibility between the imports from different

countries and between imports and the domestic like product, including consideration of specific customer

requirements and other quality related questions; (2) the presence of sales or offers to sell in the same geographic

markets of imports from different countries and the domestic like product; (3) the existence of common or similar

channels of distribution for imports from different countries and the domestic like product; and (4) whether the

imports are simultaneously present in the market. See Certain Cast-Iron Pipe Fittings from Brazil, the Republic of

Korea, and Taiwan, Invs. Nos. 731-TA-278 to 280 (Final), USITC Pub. 1845 (May 1986), aff’d, Fundicao Tupy,

S.A. v. United States, 678 F. Supp. 898 (Ct. Int’l Trade 1988), aff’d, 859 F.2d 915 (Fed. Cir. 1988); Mukand Ltd. v.

United States, 937 F. Supp. 910, 915 (Ct. Int’l Trade 1996).

 61 See Mukand, 937 F. Supp. at 916; Wieland Werke, AG v. United States, 718 F. Supp. 50, 52 (Ct. Int’l Trade

1989) (“Completely overlapping markets are not required.”); United States Steel Group, 873 F. Supp. at 685. We

note, however, that there have been investigations where the Commission has found an insufficient overlap in

competition and has declined to cumulate subject imports. See, e.g., Live Cattle from Canada and Mexico, Invs.

Nos. 701-TA-386 (Prelim.) and 731-TA-812 to 813 (Prelim.), USITC Pub. 3155 at 15 (Feb. 1999), aff’d, RanchersCattlemen Action Legal Foundation v. United States, 74 F. Supp.2d 1353 (Ct. Int’l Trade 1999); Static Random

Access Memory Semiconductors from the Republic of Korea and Taiwan, Invs. Nos. 731-TA-761-762 (Final),

USITC Pub. 3098 at 13-15 (Apr. 1998).

 62 See, e.g., Allegheny Ludlum Corp. v. United States, Slip Op. 05-00488 at 17 (Ct. Int’l Trade Dec. 22, 2006)

(recognizing the wide latitude the Commission has in selecting the type of factors it considers relevant in

undertaking its cumulation analysis).

 63 19 U.S.C. §§ 1675(c)(1), 1675a(a).

21

The Commission generally has considered four factors intended to provide a framework for

determining whether the imports compete with each other and with the domestic like product.60 Only a

“reasonable overlap” of competition is required.61 In five-year reviews, the relevant inquiry is whether

there likely would be competition even if none currently exists. Moreover, because of the prospective

nature of five-year reviews, we have examined not only the Commission’s traditional competition factors,

but also other significant conditions of competition that are likely to prevail if the orders under review are

terminated.62

D. Likelihood of Continuation or Recurrence of Material Injury If the Antidumping 

Duty Orders, Antidumping Finding, and Countervailing Duty Orders Are Revoked: 

Legal Standards

1. In General

In five-year reviews conducted under section 751(c) of the Act, Commerce will revoke an

antidumping duty order or finding or a countervailing duty order unless: (1) it makes a determination that

dumping or a countervailable subsidy, as the case may be, is likely to continue or recur, and (2) the

Commission makes a determination that revocation of the order “would be likely to lead to continuation

or recurrence of material injury within a reasonably foreseeable time.”63 The SAA states that “under the

likelihood standard, the Commission will engage in a counter-factual analysis; it must decide the likely

impact in the reasonably foreseeable future of an important change in the status quo – the revocation or

termination of a proceeding and the elimination of its restraining effects on volumes and prices of
 64 SAA, H.R. Rep. No. 103-316, vol. I, at 883-84 (1994). The SAA states that “[t]he likelihood of injury standard

applies regardless of the nature of the Commission’s original determination (material injury, threat of material

injury, or material retardation of an industry). Likewise, the standard applies to suspended investigations that were

never completed.” SAA at 883. 

 65 While the SAA states that “a separate determination regarding current material injury is not necessary,” it

indicates that “the Commission may consider relevant factors such as current and likely continued depressed

shipment levels and current and likely continued [sic] prices for the domestic like product in the U.S. market in

making its determination of the likelihood of continuation or recurrence of material injury if the order is revoked.” 

SAA at 884.

 66 See NMB Singapore Ltd. v. United States, 288 F. Supp. 2d 1306, 1352 (Ct. Int’l Trade 2003) (“‘likely’ means

probable within the context of 19 U.S.C. § 1675(c) and 19 U.S.C. § 1675a(a)”), aff’d mem., Slip Op. 05-1019 (Fed.

Cir. Aug. 3, 2005); Nippon Steel Corp. v. United States, Slip Op. 02-153 at 7-8 (Ct. Int’l Trade Dec. 24, 2002)

(same); Usinor Industeel, S.A. v. United States, Slip Op. 02-152 at 4 n.3 & 5-6 n.6 (Ct. Int’l Trade Dec. 20, 2002)

(“more likely than not” standard is “consistent with the court’s opinion”; “the court has not interpreted ‘likely’ to

imply any particular degree of ‘certainty’”); Indorama Chemicals (Thailand) Ltd. v. United States, Slip Op. 02-105

at 20 (Ct. Int’l Trade Sept. 4, 2002) (“standard is based on a likelihood of continuation or recurrence of injury, not a

certainty”); Usinor v. United States, Slip Op. 02-70 at 43-44 (Ct. Int’l Trade July 19, 2002) (“‘likely’ is tantamount

to ‘probable,’ not merely ‘possible’”).

 67 Commissioner Lane notes that, consistent with her views in Pressure Sensitive Plastic Tape from Italy, Inv. No.

AA1921-167 (Second Review), USITC Pub. 3698 (June 2004), she does not concur with the U.S. Court of

International Trade’s interpretation of “likely,” but she will apply the Court’s standard in these reviews and all

subsequent reviews until either Congress clarifies the meaning or the U.S. Court of Appeals for the Federal Circuit

addresses this issue.

 68 For a complete statement of Commissioner Okun’s interpretation of the likely standard, see Additional Views

of Vice Chairman Deanna Tanner Okun Concerning the “Likely” Standard in Certain Seamless Carbon and Alloy

Steel Standard, Line and Pressure Pipe from Argentina, Brazil, Germany, and Italy, Invs. Nos. 701-TA-362

(Review) and 731-TA-707-710 (Review) (Remand), USITC Pub. 3754 (Feb. 2005).

 69 19 U.S.C. § 1675a(a)(5).

 70 SAA at 887. Among the factors that the Commission should consider in this regard are “the fungibility or

differentiation within the product in question, the level of substitutability between the imported and domestic

products, the channels of distribution used, the methods of contracting (such as spot sales or long-term contracts),

and lead times for delivery of goods, as well as other factors that may only manifest themselves in the longer term,

such as planned investment and the shifting of production facilities.” Id.

 71 In analyzing what constitutes a reasonably foreseeable time, Commissioner Koplan examines all the current

and likely conditions of competition in the relevant industry. He defines “reasonably foreseeable time” as the length

of time it is likely to take for the market to adjust to a revocation or termination. In making this assessment, he

considers all factors that may accelerate or delay the market adjustment process including any lags in response by

foreign producers, importers, consumers, domestic producers, or others due to: lead times; methods of contracting;

the need to establish channels of distribution; product differentiation; and any other factors that may only manifest

themselves in the longer term. In other words, this analysis seeks to define “reasonably foreseeable time” by

reference to current and likely conditions of competition, but also seeks to avoid unwarranted speculation that may

occur in predicting events into the more distant future.

22

imports.”64 Thus, the likelihood standard is prospective in nature.65 The CIT has found that “likely,” as

used in the five-year review provisions of the Act, means “probable,” and the Commission applies that

standard in five-year reviews.66 67 68

The statute states that “the Commission shall consider that the effects of revocation or

termination may not be imminent, but may manifest themselves only over a longer period of time.”69

According to the SAA, a “‘reasonably foreseeable time’ will vary from case-to-case, but normally will

exceed the ‘imminent’ timeframe applicable in a threat of injury analysis in original investigations.”70 71
 72 19 U.S.C. § 1675a(a)(1).

 73 19 U.S.C. § 1675a(a)(1). The statute further provides that the presence or absence of any factor that the

Commission is required to consider shall not necessarily give decisive guidance with respect to the Commission’s

determination. 19 U.S.C. § 1675a(a)(5). While the Commission must consider all factors, no one factor is

necessarily dispositive. See SAA at 886.

 74 19 U.S.C. § 1677e(a) authorizes the Commission to use the “facts otherwise available” in reaching a

determination when: (1) necessary information is not on the record or (2) an interested party or other person

withholds information requested by the agency, fails to provide such information in the time, form, or manner

requested, significantly impedes a proceeding, or provides information that cannot be verified pursuant to section

781(i) of the Act. 19 U.S.C. § 1677e(a). The verification requirements in section 781(i) are applicable only to

Commerce. 19 U.S.C. § 1677m(i). See Titanium Metals Corp. v. United States, 155 F. Supp.2d 750, 765 (Ct. Int’l

Trade 2002) (“the ITC correctly responds that Congress has not required the Commission to conduct verification

procedures for the evidence before it, or provided a minimum standard by which to measure the thoroughness of

Commission investigations.”)

 75 Commissioner Okun notes that the statute authorizes the Commission to take adverse inferences in five-year

reviews, but such authorization does not relieve the Commission of its obligation to consider the record evidence as

a whole in making its determination. See 19 U.S.C. § 1677e. She generally gives credence to the facts supplied by

the participating parties and certified by them as true, but bases her decision on the evidence as a whole, and does

not automatically accept participating parties’ suggested interpretations of the record evidence. Regardless of the

level of participation and the interpretations urged by participating parties, the Commission is obligated to consider

all evidence relating to each of the statutory factors and may not draw adverse inferences that render such analysis

superfluous. “In general, the Commission makes determinations by weighing all of the available evidence regarding

a multiplicity of factors relating to the domestic industry as a whole and by drawing reasonable inferences from the

evidence it finds most persuasive.” SAA at 869.

 76 19 U.S.C. § 1675a(a)(4).

23

Although the standard in a five-year review is not the same as the standard applied in an original

antidumping or countervailing duty investigation, it contains some of the same fundamental elements. 

The statute provides that the Commission is to “consider the likely volume, price effect, and impact of

imports of the subject merchandise on the industry if the orders are revoked or the suspended

investigation is terminated.”72 It also directs the Commission to take into account its prior injury

determinations, whether any improvement in the state of the industry is related to the orders, whether the

industry is vulnerable to material injury if the orders are revoked, and any findings by Commerce

regarding duty absorption pursuant to 19 U.S.C. § 1675(a)(4).73

Notwithstanding the large number of subject countries involved in these reviews, in only a very

limited number of instances did specific subject producers or importers of subject merchandise not submit

a questionnaire response. We have relied on information available when appropriate, which consists

primarily of information from the original investigations and first five-year reviews, information

submitted in these second reviews, and information collected in these second reviews.74 75

2. Conditions of Competition and Business Cycle

In evaluating the likely impact of the subject imports on the domestic industry, the statute directs

the Commission to consider all relevant economic factors “within the context of the business cycle and

conditions of competition that are distinctive to the affected industry.”76

3. Likely Volume

In evaluating the likely volume of imports of subject merchandise if the antidumping finding,

antidumping duty orders, and countervailing duty orders were to be revoked, the Commission is directed
 77 19 U.S.C. § 1675a(a)(2).

 78 19 U.S.C. §§ 1675a(a)(2)(A) to 1675a(a)(2)(D).

 79 19 U.S.C. § 1675a(a)(3). The SAA states that “[c]onsistent with its practice in investigations, in considering

the likely price effects of imports in the event of revocation and termination, the Commission may rely on

circumstantial, as well as direct, evidence of the adverse effects of unfairly traded imports on domestic prices.” 

SAA at 886.

 80 19 U.S.C. § 1675a(a)(4).

 81 19 U.S.C. § 1675a(a)(4).

24

to consider whether the likely volume of imports would be significant either in absolute terms or relative

to production or consumption in the United States.77 In doing so, the Commission must consider “all

relevant economic factors,” including four enumerated factors: (1) any likely increase in production

capacity or existing unused production capacity in the exporting country; (2) existing inventories of the

subject merchandise, or likely increases in inventories; (3) the existence of barriers to the importation of

the subject merchandise into countries other than the United States; and (4) 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.78

4. Likely Price Effects

In evaluating the likely price effects of subject imports if the finding and orders were to be

revoked, the Commission is directed to consider whether there is likely to be significant underselling by

the subject imports as compared to the domestic like product and whether the subject imports are likely to

enter the United States at prices that otherwise would have a significant depressing or suppressing effect

on the price of the domestic like product.79

5. Likely Impact

In evaluating the likely impact of imports of subject merchandise if the finding and orders were to

be revoked, the Commission is directed to consider all relevant economic factors that are likely to have a

bearing on the state of the industry in the United States, including but not limited to: (1) likely declines in

output, sales, market share, profits, productivity, return on investments, and utilization of capacity;

(2) likely negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital,

and investment; and (3) likely negative effects on the existing development and production efforts of the

industry, including efforts to develop a derivative or more advanced version of the domestic like

product.80 All relevant economic factors are to be considered within the context of the business cycle and

the conditions of competition that are distinctive to the industry.81
 82 We applied the domestic like product legal standards discussed in section III above.

 83 USITC Pub. 970 at A-1.

 84 58 Fed. Reg. 37062 (Jul. 9, 1993).

 85 Commerce issued a scope ruling confirming that profile slabs from Brazil were within the scope of the order;

and, as a result of a changed circumstances review, Commerce revoked the order with respect to shipments of plate

from the United Kingdom, Finland, and Germany with a maximum thickness of 80 mm in steel grades BS 7191, 355

EMZ, as amended by Sable Offshore Energy Project specification XB MOO Y 15 001, types 1 and 2. See 64 Fed.

(continued...)

25

IV. CTL PLATE

A. Domestic Like Product

1. In General82

a. Scope of These Reviews

In the 1979 investigation, Treasury identified the subject plate from Taiwan as:

Hot-rolled carbon steel plate, 0.1875 inch or more in thickness, over eight inches in

width, not in coils, not pickled, not coated, or plated with metal, not clad, other than

black plate, and not pressed or stamped to non-rectangular shape. Such merchandise is

classifiable under Tariff Schedules of the United States Annotated item number

607.6615.83

In the 1993 investigations, Commerce identified CTL plate as a separate “class or kind” of

merchandise subject to investigation and defined the scope as follows:

These products include hot-rolled carbon steel universal mill plates (i.e., flat-rolled products

rolled on four faces or in a closed box pass, of a width exceeding 150 millimeters but not

exceeding 1,250 millimeters and of a thickness of not less than 4 millimeters, not in coils and

without patterns in relief), of rectangular shape, neither clad, painted nor coated with metal,

whether or not painted, varnished, or coated with plastics or other nonmetallic substances; and

certain hot-rolled carbon steel flat-rolled products in straight lengths, of rectangular shape, hot

rolled, neither clad, plated, nor coated with metal, whether or not painted, varnished, or coated

with plastics or other nonmetallic substances, 4.75 millimeters or more in thickness and of a

width which exceeds 150 millimeters and measures at least twice the thickness, as currently

classifiable in the HTS under item numbers 7208.31.0000, 7208.32.0000, 7208.33.1000,

7208.33.5000, 7208.41.0000, 7208.42.0000, 7208.43.0000, 7208.90.0000, 7210.70.3000,

7210.90.9000, 7211.11.0000, 7211.12.0000, 7211.21.0000, 7211.22.0045, 7211.90.0000,

7212.40.1000, 7212.40.5000, and 7212.50.0000. Included in these investigations are flat-rolled

products of nonrectangular cross-section where such cross-section is achieved subsequent to the

rolling process (i.e., products which have been worked after rolling”) – for example, products

which have been bevelled or rounded at the edges. Excluded from these investigations is grade

X-70 plate. These HTS item numbers are provided for convenience and customs purposes. The

written description remains dispositive.84

As of 2000, the time of the first reviews of these orders, Commerce had made a few rulings that

clarified the scope with respect to specific products or countries.85 During litigation of the Commission’s
 85 (...continued)

Reg. 46343 (Aug. 25, 1999).

 86 See, e.g., CR at CTL-I-20; PR at CTL-I-18.

 87 See, e.g., USITC Pub. 970 at 3.

 88 See, e.g., USITC Pub. 2664 at 214-16.

 89 The Commission also noted that “[g]rade X-70 plate was specifically excluded from the scope of the 1993 plate

investigations of all countries, and it does not appear that it was included in the 1979 investigation on Taiwan.” 

Therefore, the Commission did not include grade X-70 plate in the domestic like product in the first determinations.

 90 See, e.g., HTSUS, Chapter 72 Note 1(f).

 91 See, e.g., CR at CTL-I-29; PR at CTL-I-25.

26

first review determinations, as a result of separate litigation, Commerce also excluded from the scope

floor plate from Belgium imported by Duferco Steel, Inc. “with patterns in relief derived directly from the

rolling process.”86 As noted above, the CIT remanded the Commission’s first review determinations for

consideration of this fact. The scope of these second reviews parallels the scope applicable at the time of

the Commission’s second remand determinations in the first reviews.

b. Domestic Like Product Findings in the

Original Investigations and in the First Reviews

In the 1979 original investigation regarding subject imports from Taiwan, the Commission did

not make a domestic like product determination insofar as none was required under the Antidumping Act

of 1921 in effect at the time, although the Commission noted that injury was to the carbon steel plate

industry.87 In the 1993 original investigations, the Commission found a single domestic like product

consisting of CTL plate, and it further determined that neither universal mill plate nor beveled plate (i.e.,

plate with nonrectangular cross-section) were separate domestic like products.88 In the first reviews and

related remand determinations, the Commission defined a single domestic like product consisting of CTL

plate (including floor plate), consistent with its 1993 original determinations and declined to expand the

domestic like product to include micro-alloy products.89 Two domestic like product issues are presented

in these second reviews: (1) whether to expand the domestic like product to include micro-alloy products

and (2) whether wide flat bars rolled on a bar mill are a separate domestic like product.

2. Whether to Expand the Domestic Like Product to Include Micro-alloys

a. Background and Prior Treatment of This Issue

The HTSUS differentiates among three categories of steel: stainless steel, “other alloy steel” and

“non-alloy steel.” Steel that is not stainless steel but that contains one or more alloying elements in an

amount that exceeds a specified level is defined as “other alloy steel.” Steel that is not stainless steel or

other alloy steel is referred to as “non-alloy steel.”90 The commonly used industry term “carbon steel”

arguably includes some steel that must be classified under the HTSUS as alloy steel.91 In particular, the

use of small amounts of such alloying elements as columbium, vanadium, and titanium to produce a class

of steels known as high-strength, low-alloy steels is common, and these steel compositions (“micro-alloy

steel”) are often considered within the industry to be carbon steel, regardless of whether the amounts of

the alloying elements are sufficient to require that the steel be classified as alloy steel under the HTSUS
 92 See, e.g., CR at CTL-I-30; PR at CTL-I-25 to CTL-I-26.

 93 See, e.g., CR at CTL-I-29 to CTL-I-30; PR at CTL-I-25.

 94 See, e.g., CR at CTL-I-29 n.47; PR at I-25 n.47.

 95 See, e.g., USITC Pub. 3364 at 5-7.

 96 The Commission recognized that some domestic producers had not been able to segregate micro-alloy products

out of their reported information in the first reviews. See, e.g., USITC Pub. 3364 at 23 n.126. In these second

reviews, data including and not including micro-alloy products were collected, and the questionnaires defined microalloy based on the definition used in the 2005 CTL plate reviews using the term “micro-alloy” in a narrow sense to

refer to steel that contains one or more alloying elements in an amount that falls within a specified range, but none of

the elements in a quantity greater than indicated. See, e.g., CR at CTL-I-30; PR at CTL-I-26.

 97 See, e.g., USITC Pub. 3364 at 5-7.

 98 In those reviews, Commissioner Koplan declined to expand the domestic like product to include micro-alloy

plate because Commerce had not been asked to and had not amended the scope to include those products, there was

no evidence of significant technological changes in the production of plate since the original investigations (just an

apparent increase in the amount of micro-alloy products being produced with that equipment), and because there was

no evidence on the record of circumvention of the orders, which could furnish a potential motivation for the

domestic producer’s request to expand the domestic like product. In his judgment, the evidence on the record

regarding changes in the product fell short of establishing support for a modification of the original domestic like

product determinations or for warranting a like product broader than the scope of the imported products subject to

those reviews.

27

definitions.92 Micro-alloy steel is, therefore, a subset of alloy steel under the HTSUS but also commonly

considered within the industry as a carbon steel product along with non-alloy steel products.93

The scope of these second reviews, like the scope of the original investigations and first reviews,

includes only steel that is classified as “non-alloy” under the HTSUS, and does not include alloy or

micro-alloy products.94 In the first reviews of these orders, the Commission rejected a request by

domestic producer U.S. Steel to expand the definition of the domestic like product to include micro-alloy

products.95 In these second reviews, no party asked the Commission to expand the domestic like product

to include micro-alloy products.

b. Analysis of Relevant Facts and Conclusion

In the first reviews of these orders, U.S. Steel advocated for the expansion of the domestic like

product to include micro-alloy products. The Commission declined to expand the domestic like product

to include such steel. It explained that this issue had not been considered and thus micro-alloy products

were not specifically included in the domestic like product in the original investigations. It found that

there was insufficient record evidence to indicate that changes in the marketplace had been sufficient to

support modification of the domestic like product determinations made in the original investigations or to

warrant a like product that was broader than the scope of the imported products subject to the reviews. 

The Commission also noted the absence of a standard definition of micro-alloy steel products, the fact

that the issue was not raised until the prehearing briefs,96 and the related time constraints on the

Commission’s ability to collect additional data or comments.97

A few years later, however, in the 2003 CTL plate reviews involving a different set of orders,

Certain Carbon Steel Plate from China, Russia, South Africa, and Ukraine, Invs. Nos. 731-TA-753-756

(Review), USITC Pub. 3626 at 7-9 (Sept. 2003) (Commissioner Koplan dissenting),98 again at U.S.

Steel’s request, the Commission decided to expand the domestic like product to include micro-alloy

products even though micro-alloy products were not within the scope of those orders. The Commission

acknowledged that there had been no major technology changes since the original investigations but

found there was increased usage of micro-alloy CTL plate in applications traditionally filled by non-alloy
 99 See, e.g., USITC Pub. 3626 at 8-9. The Commission also noted that it had considered micro-alloy steel to be

part of the domestic like product in several original investigations and reviews involving CTL plate, hot-rolled steel,

and cold-rolled steel. See, e.g., Certain Cold-Rolled Steel Products from Australia, India, Japan, Sweden, and

Thailand, Invs. Nos. 731-TA-965, 971-72, 979, and 981 (Final), USITC Pub. 3536 (Sept. 2002); Hot-Rolled Steel

Products from Argentina and South Africa, Invs. Nos. 701-TA-404 (Final) and 731-TA-898 and 905 (Final), USITC

Pub. 3446 (Aug. 2001); Certain Cold-Rolled Steel Products from Argentina, Brazil, Japan, Russia, South Africa, and

Thailand, Invs. Nos. 701-TA-393 and 731-TA-829 to 830, 833 to 834, 836, and 838 (Final), USITC Pub. 3283 (Mar.

2000); Certain Cut-to-Length Steel Plate from France, India, Indonesia, Italy, Japan, and Korea, Invs. Nos. 701-TA387 to 391 (Final) and 701-TA-816 to 821 (Final), USITC Pub. 3273 at 5 (Jan. 2000); Certain Hot-Rolled Steel

Products from Japan, Inv. No. 731-TA-807 (Final), USITC Pub. 3202 (June 1999); Certain Hot-Rolled Steel

Products from Brazil, Japan, and Russia, Invs. Nos. 701-TA-384 (Prelim.) and 731-TA-806 to 808 (Prelim.), USITC

Pub. 3142 at 6 (Nov. 1998); see also, e.g., Certain Cut-to-Length Steel Plate from France, India, Indonesia, Italy,

Japan, and Korea, Invs. Nos. 701-TA-387 to 391 (Final) and 701-TA-816 to 821 (Final), USITC Pub. 3816 at 4-6

(Nov. 2005).

 100 Nucor argues that micro-alloy plate and Grade X-70 plate cost more to produce and are purchased by

customers that require additional product characteristics. As Nucor explains, if non-alloy plate, micro-alloy plate,

and Grade X-70 were part of a continuum, Nucor would undoubtedly produce much more micro-alloy and Grade X70 plate than it does. See, e.g., Nucor’s Posthearing CTL Plate Br. at Exh. 9 at 2. 

 101 Mittal asserts, however, that inclusion of the micro-alloy products in the definition of the domestic like product

would not substantially alter the Commission’s analysis. See, e.g., Mittal’s Prehearing CTL Plate Br. at 7; Mittal’s

Posthearing CTL Plate Br. at Answers to Commissioner Lane’s Questions at 8.

 102 Domestic producers IPSCO and Oregon do not advocate any change in the definition of the like product

previously determined by the Commission, and they insist that their arguments apply with equal force regardless of

the treatment of micro-alloy plate. See, e.g., IPSCO/Oregon Prehearing CTL Plate Br. at 4; IPSCO/Oregon

Posthearing CTL Plate Br. at A-20. 

 103 See, e.g., Brazilian Respondents’ Posthearing CTL Plate Br. at 1 n.1; AHMSA’s Prehearing CTL Plate Br. at 7

n.23; Caterpillar’s Prehearing CTL Plate Br. at 4. In their joint prehearing brief, several respondent interested parties

argue that whether the Commission defines the domestic like product to include micro-alloy CTL plate or not, the

record demonstrates that these orders should be terminated. See, e.g., Joint Respondents’ Prehearing CTL Plate Br.

at 2 n.1.

 104 Compare, e.g., CR/PR at Table C-1 with, e.g., CR/PR at Table C-2 (indicating that in 2005, 1.3 million short

tons of micro-alloy CTL plate were produced compared to 7.2 million short tons of non-alloy CTL plate).

28

CTL plate, and it found that the differences between the two products were not so pronounced as to

constitute clear dividing lines. In the absence of any contrary arguments, it expanded the domestic like

product to include micro-alloy products.99

In these reviews, domestic producer Nucor states that there is a clear delineation in the

marketplace between non-alloy CTL plate and other products such as micro-alloy plate and Grade X-70

plate.100 Mittal, the owner of the former U.S. Steel CTL plate mill, also advocates defining the domestic

like product consistent with the original determinations (i.e., without expanding the domestic like product

to include micro-alloys).101 Other domestic producers also advocate for the same definition of the

domestic like product as in the original investigations and reviews.102 Respondent interested parties have

taken no position on this issue and state that the result is the same regardless of how the Commission

defines the domestic like product.103 The record indicates that there is a sizeable amount of micro-alloy

CTL plate production in the United States.104

We review the facts using the Commission’s traditional domestic like product factors:

Physical characteristics and uses: Micro-alloy steel generally refers to steel designed to provide

better mechanical properties or greater resistance to atmospheric corrosion than conventional non-alloy

carbon steel. Although technically classified under the HTSUS as an alloy steel, micro-alloy steel is more
 105 See, e.g., CR at CTL-I-30 to CTL-I-31, Appendix G-3 to G-4, G-8, G-11; PR at CTL-I-25 to CTL-I-26;

USITC Pub. 3626 at 8-9.

 106 See, e.g., USITC Pub. 3626 at 8-9.

 107 See, e.g., CR at CTL-I-30 to CTL-I-31, Appendix G-3 to G-4, G-8, G-11; PR at CTL-I-25 to CTL-I-26;

USITC Pub. 3626 at 8-9.

 108 See, e.g., CR at CTL-I-21; PR at CTL-I-19.

 109 See, e.g., CR at CTL-I-21 to CTL-I-22; PR at CTL-I-19.

 110 See, e.g., CR at CTL-I-22; PR at CTL-I-19.

 111 See, e.g., CR at CTL-I-31, Appendix G-4 to G-5, G-8 to G-9, G-11 to G-12; PR at CTL-I-26; USITC

Pub. 3626 at 7-9.

 112 See, e.g., CR at CTL-I-32, Appendix G-6 to G-7, G-10, G-12; PR at CTL-I-27; USITC Pub. 3626 at 7-9.

29

similar in physical characteristics and uses to non-alloy steel than to alloy steel.105 Only when plate is

metallurgically tested are the differences between non-alloy and micro-alloy steel apparent.106 Most

questionnaire respondents agree that there are only moderate differences in physical uses between nonalloy and micro-alloy plate. When compared to non-alloy grade plate, micro-alloy steel plates generally

have higher strength and toughness characteristics; thus, micro-alloy plate is typically used for

applications such as construction and earth-moving/mining equipment, rail cars, line pipes, poles and

towers, armored vehicles, and machine parts and bridges.107 Non-alloy CTL plate is used in welded loadbearing and structural applications, such as agricultural and construction equipment (e.g., cranes,

bulldozers, scrapers, and other tracked or self-propelled machinery); machine parts (e.g., the body of the

machine or its frame); transmission towers and light poles; buildings; and heavy transportation

equipment, such as railroad cars (especially tank cars) and ships.108 Non-alloy CTL plate is also used in

the production of tanks, sills, floors, offshore drilling rigs, pipes, petrochemical plants and machinery, and

various other fabricated products.109 Non-alloy CTL plate can also be used in utility applications, such as

wind towers and pressure vehicles.110

Interchangeability: The two types of plate are interchangeable in a variety of applications,

although the generally higher cost of micro-alloy plate would discourage its use in the most common

applications. Micro-alloy steels are good substitutes where increased strength is required along with less

weight. The increased strength levels achieved by the alloy additions enable the thickness of the plate to

be reduced, creating a lighter product. The higher strength of micro-alloy plate, however, may exceed

design requirements, and certain alloys may be restricted by customers. Also, the higher cost of microalloy plate may exceed the budgets of some customers.111

Customer and producer perceptions: Micro-alloy steel is considered by the industry to be

carbon, rather than alloy, steel because it is designed to satisfy specific mechanical properties rather than

chemical composition requirements. Some questionnaire respondents report that micro-alloy plate is

perceived to be a higher-quality product than non-alloy plate, due to its greater longevity, wear resistance,

and strength. Many producers and customers, however, reportedly perceive little or no difference in

comparable grades of non-alloy and micro-alloy plate.112

Common manufacturing facilities, production processes, and production employees: Of the

fourteen mills and the ten processors producing plate in the United States, six mills and one processor

also produce micro-alloy plate. The manufacturing process for micro-alloy plate is essentially the same

as the process for non-alloy plate, but larger amounts of alloying elements are used in the production of

micro-alloy steel. Control-temperature rolling and heat-treating are often used for micro-alloy plate,

while these techniques may not be used in the production of non-alloy plate. The same equipment and

employees are used to produce both non-alloy and micro-alloy plate. Since the original investigations,

there have been no major changes in plate production technology and methods in the United States,
 113 See, e.g., CR at CTL-I-32, Appendix G-5; PR at CTL-I-27; USITC Pub. 3626 at 7-9.

 114 See, e.g., CR at CTL-I-31; PR at CTL-I-27; CR/PR at Tables CTL-I-18, CTL-I-20; CR at Appendix G-5 to G6, G-9 to G-10, G-12; USITC Pub. 3626 at 8-9.

 115 The period of review for these second reviews was from January 2000 through June 2006.

 116 See, e.g., CR at CTL-I-33, Appendix G-7 to G-8, G-10 to G-11, G-12; PR at CTL-I-28; USITC Pub. 3626 at 8-

9.

30

although the plate market has seen an increased use of micro-alloy steel plate in applications traditionally

filled by non-alloy plate.113

Channels of distribution: Both non-alloy and micro-alloy plate are sold through service centers

and directly to end users, primarily original equipment manufacturers. On the other hand, non-alloy plate

is typically purchased in standard grades for inventory, while micro-alloy plate tends to be purchased for

specific jobs or by OEMs, a tendency that is reflected in the greater share of sales to end users.114

Price: Micro-alloy steel generally is priced from the base price for non-alloy steel rather than for

alloy steel. Micro-alloy plate is usually priced higher than non-alloy plate due to the costs for the

additional alloying elements. Questionnaire respondents do not agree about the exact premium, although

reported data for the period of review115 indicate that average unit values for micro-alloy plate were

consistently higher than for non-alloy plate.116

Although there are some similarities in physical characteristics, micro-alloy steel has higher

levels of certain alloying elements that provide it better mechanical properties or greater resistance to

atmospheric corrosion than conventional non-alloy steel. These differences are apparent after

metallurgical testing and are important to specific end-users and for specific end-uses. These differences

limit interchangeability because the generally higher manufacturing cost and price of micro-alloy

products would discourage their use for the more common applications for which non-alloy CTL plate is

suitable. Although both are commonly considered carbon steel products, for certain customers and

domestic producers, there are important differences between the two products. The same equipment and

employees are used to produce both, although micro-alloy products require the addition of alloying

elements during the production process. Whereas non-alloy CTL plate is typically purchased in standard

grades for inventory, micro-alloy CTL plate tends to be purchased by end users for specific jobs or by

OEMs.

In conclusion, the factual record with respect to the traditional six-factor test is mixed, and

consistent with this reality, three Commissioners decided to expand the domestic like product to include
 117 While the original like product definition is the starting point for the like product definition in five-year

reviews, the Commission has stated that it may revisit its original like product determination in appropriate

circumstances, including when there have been significant changes in the product at issue since the original

investigation. See Notice of Final Rulemaking, 63 Fed. Reg. 30599, 30602 (June 5, 1998); Carbon Steel Wire Rod

From Argentina, Invs. Nos. 701-TA-A (Review) and 731-TA-157 (Review), USITC Pub. 3270 at 4-9 (Jan. 2000). 

The CIT has endorsed this approach. See, e.g., Chefline Corp. v. United States, 170 F. Supp.2d 1320, 1326-27 (Ct.

Int’l Trade 2001).

Based on the record in these reviews, Chairman Pearson, Commissioner Hillman, and Commissioner Okun

find it appropriate to include micro-alloy steel CTL plate in the definition of the domestic like product. First, the

CTL plate market has seen an increased use of micro-alloy steel CTL plate in applications traditionally filled by

carbon steel CTL plate. The CTL plate market has demanded higher strength steels that have the weight and other

benefits of micro-alloy technology. Second, micro-alloy steel is not considered to be an alloy steel. Rather, microalloy steel is more similar in physical characteristics and uses to carbon than to alloy steel. Only when CTL plate is

metallurgically tested are the differences between carbon and micro-alloy steel apparent. Third, the end uses for the

two types of plate may be the same. The two types of plate are interchangeable in a variety of applications, although

the generally higher cost of micro-alloy steel would discourage its use in the most common carbon steel applications. 

Fourth, micro-alloy steel generally is priced from the base price for carbon steel rather than for alloy steel plate. 

Fifth, manufacturing equipment and employees are similar for the two products. Sixth, the channels of distribution

are also similar. Seventh, micro-alloy steel is considered by many producers and users to be carbon, rather than

alloy, steel because it is designed to satisfy specific mechanical property rather than chemical composition

requirements. Finally, such an approach takes into consideration the realities of today’s CTL plate industry and is

consistent with the Commission’s treatment of the domestic like product in recent original antidumping and

countervailing duty investigations involving CTL plate and other forms of flat-rolled steel and in the recent reviews

involving CTL plate. They emphasize, however, that even had they declined to expand the domestic like product to

include micro-alloy products, they would have reached negative determinations with respect to subject imports from

each of the eleven subject countries.

 118 Commissioner Koplan and Commissioner Lane note that: (1) the scope of these reviews does not include

micro-alloy products; (2) unlike in the 2003 CTL plate reviews, when domestic producer U.S. Steel asked the

Commission to expand the domestic like product to include micro-alloy products, no party requested that action

here; (3) all domestic producers, including Mittal Steel (the current owner of U.S. Steel’s CTL plate mill), disagree

with such an expansion in these reviews; (4) the Commission rejected a similar request in the first reviews of these

orders and did not include micro-alloy products in the domestic like product in the original investigations; and

(5) even though there is more production now than previously, production of micro-alloy CTL plate is not a new

phenomenon. For these reasons and to give the benefit of doubt to the domestic industry, they do not expand the

domestic like product to include micro-alloy products in these reviews. In determining not to expand the domestic

like product to include micro-alloy CTL plate, Vice Chairman Aranoff relied primarily on the fact that no party

advocated such an expansion during these reviews. Depending on the facts found and the arguments presented in

any future investigation or review, she could reach a contrary conclusion on whether to include micro-alloy CTL

plate in the domestic like product.

31

micro-alloy products,117 and three Commissioners declined to expand the domestic like product to include

micro-alloy products.118

3. Whether Certain Wide Flat Bars Rolled in a

Bar Mill Are a Separate Domestic Like Product

a. Background and Prior Treatment of This Issue

The scope of these second reviews, as in the previous reviews and original investigations,

includes certain universal mill plate that is typically produced at a bar mill. The scope, which borrows its
 119 Universal mill plate is rolled on four faces and is up to 1,250 mm wide and may be as little as 4 mm thick. 

See, e.g., CR at CTL-I-24 n.29; PR at CTL-I-21 n.29.

 120 The relevant portions of the scope language provide: “These products include hot-rolled carbon steel universal

mill plates (i.e., flat-rolled products rolled on four faces or in a closed box pass, of a width exceeding 150

millimeters but not exceeding 1,250 millimeters and of a thickness of not less than 4 millimeters, not in coils and

without patterns in relief), of rectangular shape, neither clad, painted nor coated with metal, whether or not painted,

varnished, or coated with plastics or other nonmetallic substances ... .” See, e.g., CR at CTL-I-19 to CTL-I-20; PR

at CTL-I-17 to CTL-I-18.

 121 MRM defined these wide flat bars as “carbon steel bars between 150 mm (5.9 inches) and 250 mm

(approximately 10 inches) wide and 38.1 mm (11⁄2 inches) thick.”

 122 See, e.g., CR at CTL-I-22 n.27; PR at CTL-I-19 n.27.

 123 USITC Pub. 2549 at 25.

 124 The Commission observed that flat bars are sold in strapped bundles of 5,000 or 10,000 pounds and not as

individual plates like most but not all other CTL plate products. It noted that flat bars are not usually made on a

plate or strip mill but on a bar mill that rolls blooms and billets as opposed to slabs. Although it found that flat bars

are generally not interchangeable with the wider, thicker plate rolled on plate or strip mills, it found there was

sufficient overlap of competition to include them in the category of CTL plate. The fact that flat bars were used for

less demanding applications in the construction and equipment industries was not enough to distinguish them from

the narrower strip mill plate because as the Commission noted, “[e]ven if flat bars and other cut-to-length plate are

not interchangeable in exact applications, MRM has failed to show that these products are not used for the same

general purposes.” The Commission also expressed uncertainty about whether there was any domestic production of

flat bars, in which case it concluded that the domestic product most similar in characteristics and uses would be other

CTL plate. See, e.g., USITC Pub. 2549 at 26-27.

32

language directly from the HTSUS, specifically mentions “universal mill plate”119 and refers to the

“closed box pass” manufacturing process used to make it. Most products produced on a bar mill are made

to smaller width dimensions than plate products, but some of the larger width flat bar products fall within

the scope of these reviews.120

In the preliminary phase of the 1993 original investigations, Caterpillar, Inc., an importer of

universal mill plate, argued that universal mill plate was a separate domestic like product. Manitoba

Rolling Mills (“MRM”), a Canadian producer, argued that certain wide flat bars should be considered a

separate domestic like product.121 Wide flat bar is a subset of universal mill plate.122 The Commission

rejected Caterpillar’s request, finding that “[b]ecause in many, if not all, applications universal mill plate

is like sheared-mill plate, we find that the product like universal mill plate is cut-to-length plate.”123

Separately, the Commission also rejected MRM’s request.124

In the final phase of the 1993 original investigations, at the outset of its domestic like product

discussion, before reaching any specific party arguments, the Commission emphasized in its final

 determinations that its domestic like product findings were made in the context of investigations

involving a continuum of goods within each of the four major like product groupings (hot-rolled, coldrolled, corrosion-resistant, and CTL plate flat-rolled products). It explained that:

Respondents argued that certain of these products are differentiated, to a greater or lesser

extent, from other steel products if viewed solely on the basis of the six like product

factors we typically consider. However, our consideration of the six like product factors

is made on the continuum on which those steel products exist. The Commission

traditionally has been reluctant to fragment its like product definitions where a continuum

of products exists. ... [I]n making our findings, we have carefully considered the asserted
 125 USITC Pub. 2664 at 11-12.

 126 It explained that all plate-mill plate produced in the United States was produced on sheared plate mills and

trimmed by shearing or flame-cutting on all four edges whereas universal mill plate was produced by hot-rolling

plate between horizontal and vertical finishing rolls to give universal mill plate two mill edges and two trimmed

ends. Both products have the same basic physical characteristics including chemistry and metallurgical composition,

strength, flatness, gauge and width tolerances, and ability to be welded or formed. The Commission observed that

universal mill plate had been replaced by sheared-mill plate for most applications for which it was previously used,

indicating interchangeability between the two types of plate. Both sheared-mill plate and universal mill plate were

used for the same end products, were distributed through the same channels of distribution, and were perceived to be

interchangeable by most end users. While sheared-mill plate and universal mill plate were produced on different

mills and prices for universal mill plate were somewhat higher, the Commission concluded that the physical

characteristics of these types of plate and their similar end uses warranted finding that they were part of the same

domestic like product. See, e.g., USITC Pub. 2664 at 214.

 127 See, e.g., U.K. Steel’s Prehearing CTL Plate Br. at 3-4; Niagara’s Prehearing CTL Plate Br. at 12-15. U.K.

producer Corus, in contrast, does not argue that wide flat bar is a separate domestic like product, but rather that the

production of wide flat bar products by other U.K. producers reinforces Corus’ argument that subject imports from

the United Kingdom should not be cumulated with other subject imports. See, e.g., Corus’ Posthearing CTL Plate

Br. at Exh. A at 4.

 128 See, e.g., Nucor’s Posthearing CTL Plate Br. at Exh. 9 at 1. Nucor cautions, however, that the Commission

lacks capacity and production information for this product from most of the subject foreign producers, and so it

insists that the Commission would need to rely on adverse facts available. See, e.g., Nucor’s Posthearing CTL Plate

Br. at Exh. 9 at 1. In fact, however, the Commission collected data on flat bar production operations in subject

countries (as well as U.S. operations), and, although a number of subject producers reported no such production,

several reported data concerning their production of wide flat bars, including producers in Mexico and the United

Kingdom. See, e.g., CR/PR at Tables CTL-IV-35 and CTL-IV-62.

 129 See, e.g., Mittal’s Prehearing CTL Plate Br. at 7; Mittal’s Posthearing CTL Plate Br. at Answers to

Commissioner Hillman’s Questions at 18-19 & n.79; IPSCO/Oregon Prehearing CTL Plate Br. at 4; IPSCO/Oregon

Posthearing CTL Plate Br. at A-20. Mittal emphasizes that both wide flat bars and CTL plate have similar

characteristics and uses, share similar channels of distribution, are perceived to be similar and interchangeable, and

that customers, with some exceptions, generally opt for the product that has the best price. Mittal also argues that

the differences in production facilities used to produce the two products is only one of the factors that the

Commission usually examines in a domestic like product analysis. See, e.g., Mittal’s Prehearing CTL Plate Br. at 7;

Mittal’s Posthearing CTL Plate Br. at Answers to Commissioner Hillman’s Questions at 18-19 & n.79.

33

grounds for distinguishing various products in the context of the “continuum” nature of

the steel products involved in these investigations.125

The Commission then went on to reject a request to find universal mill plate a separate domestic like

product.126

No party raised a domestic like product issue regarding wide flat bars or universal mill plate in

the first reviews, so the Commission did not address the issue then.

b. Analysis of the Relevant Facts and Conclusion

In these second reviews, U.K. producers Niagara and Celsa request that the Commission find that

certain wide flat bar products are a separate domestic like product.127 Domestic producer Nucor appears

to advocate finding wide flat bars to be a separate domestic like product.128 Domestic producers Mittal,

IPSCO, and Oregon Steel disagree that wide flat bars are a separate domestic like product.129 Other
 130 Belgian producer Duferco Clabecq does not produce wide flat bar and takes no position on this issue; ***. 

See, e.g., Duferco’s Posthearing CTL Plate Br. at Response to Question 8. Brazilian producers defer to the

arguments of other respondents with an interest in this product. See, e.g., Brazilian Respondent Interested Parties’

Posthearing CTL Plate Br. at 1 n.1. According to the German respondents, none of them produce wide flat bar, and

they therefore take no position on this issue. See, e.g., German Respondents’ Posthearing CTL Plate Br. at App. 1 at

4-5. Mexican producer AHMSA insists that *** although it did report its wide flat bar production in response to the

Commission’s request. See, e.g., AHMSA’s Prehearing CTL Plate Br. at 7 n.23. Purchaser Caterpillar takes no

position with respect to the Commission’s definition of the domestic like product. See, e.g., Caterpillar’s Prehearing

CTL Plate Br. at 4. 

 131 Questionnaire Definitions. In several places in its prehearing brief, Niagara makes assertions about the

products that it makes in the United Kingdom, which it refers to as “wide flat SBQ bar.” For example, it contrasts

its own wide flat SBQ bar with “merchant bar” and CTL plate made in the United States and insists that its own

product commands a price premium. See, e.g., Niagara’s Prehearing CTL Plate Br. at 9 n.9, 14 n.16. Arguments

about products and practices in the United Kingdom, however, are entirely irrelevant to the domestic like product

analysis, which is focused on products made in the United States.

 132 In the preliminary phase of the 1993 investigations, Manitoba defined wide flat bars as “carbon steel bars

between 150 mm (5.9 inches) and 250 mm (approximately 10 inches) wide and 38.1 mm (11⁄2 inches) thick.” USITC

Pub. 2549 at 25.

 133 One factual difference is that, although it was not known if there was any domestic production of wide flat bar

products in the 1993 original investigations, today, there is such production. See, e.g., CR/PR at Table C-5. This

was only one of the facts that informed the Commission’s decision, and it is not a fact that was even discussed in the

Commission’s opinion in the 1993 final determinations (only in its opinion in the 1993 preliminary determinations).

 134 See, e.g., Transcript of October 19, 2006, on CTL Plate Issues (revised and corrected copy) (“CTL Plate

Hearing Tr.”) at 367-68 (Vice Chairman Aranoff).

 135 See, e.g., CR at CTL-I-21; PR at CTL-I-19.

 136 See, e.g., CR at CTL-I-21; PR at CTL-I-19.

 137 See, e.g., CR at CTL-I-21; PR at CTL-I-19.

34

parties, many of whom reported that they do not produce such wide flat bar products, have taken no

position on this question.130

For purposes of these reviews, wide flat bar products are “hot-rolled non-alloy steel of

rectangular cross section, more than 150 mm wide, but less than 600 mm wide, rolled on all four sides,

not less than 4.75 mm thick, produced on a bar mill.”131 Although the dimensions of the products at issue

here are not identical to the dimensions of the products at issue in the 1993 original investigations,132 the

thrust of the arguments is the same.133 At the hearing, the Commission specifically asked the parties to

address the findings in the 1993 preliminary and final determinations and their relevance to the current

arguments.134 Neither of the two U.K. parties advocating finding that wide flat bars are a separate

domestic like product responded to this request at the hearing and neither submitted a posthearing brief.

Based on an examination of our traditional domestic like product factors, we determine the

following:

Physical characteristics and uses: CTL plate is a flat-rolled steel product that is generally 4.75

millimeters or more in thickness, and it can be made in a variety of widths, thicknesses, and shapes for

incorporation into other products or for further processing.135 The term “cut-to-length” indicates that the

product is produced as a flat plate with a defined length.136 CTL plate is used in welded load-bearing and

structural applications, such as agricultural and construction equipment (e.g., cranes, bulldozers, scrapers,

and other tracked or self-propelled machinery); machine parts (e.g., the body of the machine or its frame);

transmission towers and light poles; buildings; and heavy transportation equipment, such as railroad cars

(especially tank cars) and ships.137 CTL plate is also used in the production of tanks, sills, floors, offshore
 138 See, e.g., CR at CTL-I-21 to CTL-I-22; PR at CTL-I-19.

 139 See, e.g., CR at CTL-I-22; PR at CTL-I-19.

 140 See, e.g., CR at CTL-I-26; PR at CTL-I-22.

 141 See, e.g., CR at CTL-I-26; PR at CTL-I-22.

 142 See, e.g., U.K. Steel’s Prehearing CTL Plate Br. at 3-4.

 143 See, e.g., Niagara’s Prehearing CTL Plate Br. at 1-2 n.1, 7, 13.

 144 See, e.g., Nucor’s Posthearing CTL Plate Br. at Exh. 9 at 1.

 145 See, e.g., CR at CTL-I-26; PR at CTL-I-22; CR/PR at App. F.

 146 See, e.g., CR at CTL-I-26; PR at CTL-I-22.

 147 See, e.g., CR at CTL-I-26 to CTL-I-27; PR at CTL-I-22.

 148 See, e.g., CR at CTL-I-27; PR at CTL-I-23.

 149 See, e.g., Niagara’s Prehearing CTL Plate Br. at 14.

35

drilling rigs, pipes, petrochemical plants and machinery, and various other fabricated products.138 CTL

plate can also be used in utility applications, such as wind towers and pressure vehicles.139

Flat bar is a hot-rolled carbon steel product made in various lengths and widths, usually starting at

1/8 inch in thickness.140 It is often used in structural applications, such as bridges and trailers.141 U.K.

producer Celsa argues that wide flat bars are used in applications where it is necessary to use a narrower

form of steel than can be produced on a plate mill, such as in the production of truck trailers. Although it

acknowledges that CTL plate made on a plate mill could in theory be used as a substitute for wide flat

bars, Celsa insists that the cost of further cutting the plate to the correct width would make it

uncompetitive for such applications.142 Likewise, U.K. producer Niagara asserts that wide flat bar is

typically used for precision cold-finishing and subsequently various highly demanding engineering

applications for which CTL plate is entirely unsuited. Niagara argues that wide flat bar is made to

stringent requirements (e.g., tight dimensional tolerances, accurate cross-sectional shape with sharp

corners, and high surface finish) that are irrelevant to CTL plate producers.143 Domestic producer Nucor

argues that while wide flat bar may be used for some of the same purposes as other CTL plate and has

similar physical characteristics, it normally is sold as bar rather than plate. Nucor produces both to serve

the full range of its customers’ needs.144

According to questionnaire responses, flat bars and CTL plate have similar characteristics and

uses, although flat bars are much narrower than CTL plate, enabling them to be more easily used in

applications where narrow widths are needed, such as machine parts.145 Wide flat bars have a superior

surface finish, dimensional precision, and precise edges, as they are rolled on a bar mill rather than being

cut to length.146 Wide flat bars are rolled along both the width and thickness dimensions whereas CTL

plates are only rolled along the thickness.147 The cutting operation used for CTL plate makes the edges

unsuitable for cold-drawing whereas flat bars can be cold-drawn and can also be produced with rounded

or beveled edges for specific applications such as off-highway wheels and earthmover wear parts.148

Interchangeability: U.K. producer Niagara asserts that certain questionnaire responses are

contradictory on their face; even though some make conclusory assertions that wide flat bar and CTL

plate products are interchangeable, elsewhere they recognize that CTL plate is not suitable for the

specialty uses for which wide flat bar is designed, and CTL plate has inferior edge quality and surface

finish and cannot be cold-finished.149 Domestic producer Mittal points out that wide flat bar, like CTL

plate, can be sold as both a commodity product and as a specialty product. Flat bar of merchant quality is

used in structural applications, like the fabrication of bridges and buildings, but specialty bar is needed for

applications that require special tolerances. Mittal insists that, whether sold as commodity grade or
 150 See, e.g., Mittal’s Posthearing CTL Plate Br. at Answers to Commissioner Hillman’s Questions at 19, Answers

to Commissioner Lane’s Questions at 8.

 151 See, e.g., CR at CTL-I-27; PR at CTL-I-22; CR/PR at App. F.

 152 See, e.g., CR at CTL-I-28; PR at CTL-I-24; CR/PR at App. F.

 153 See, e.g., CR at CTL-I-28; PR at CTL-I-24; CR/PR at App. F.

 154 See, e.g., Niagara’s Prehearing CTL Plate Br. at 14.

 155 See, e.g., CR at CTL-I-22 to CTL-I-28; PR at CTL-I-19 to CTL-I-21; CR/PR at App. F.

 156 Domestic producer Nucor reports producing wide flat bar and other CTL plate at different facilities on

different equipment and using different workers. See, e.g., Nucor’s Posthearing CTL Plate Br. at Exh. 9 at 1.

 157 See, e.g., CR at CTL-I-28; PR at CTL-I-23; Niagara’s Prehearing CTL Plate Br. at 7-8 & n.7.

 158 See, e.g., CR at CTL-I-27; PR at CTL-I-23; CR/PR at Tables CTL-I-18, CTL-I-19, App. F.

36

specialty grade, wide flat bar and CTL plate are generally interchangeable.150 According to questionnaire

responses, interchangeability between wide flat bar products and CTL plate depends on the specific

customer end use. For example, if the edge quality is critical, customers may prefer flat bar. The size and

thickness of the material needed for the final application is also an important consideration.151

Customer and producer perceptions: Responding U.S. producers generally perceived wide flat

bar to be interchangeable with CTL plate produced on plate mills or cut from coil. Similarly, responding

producers generally reported that their customers perceived little or no substantial difference between

wide flat bar and CTL plate produced on plate mills or cut from coil, despite the superior edge quality,

cold-drawing capability, and tighter tolerances characteristic of wide flat bar.152 Customers’ responses

were a bit more varied. While several U.S. purchasers reported general interchangeability or only limited

differences, several other responding purchasers view CTL plate and wide flat bar as “not

interchangeable” or “not compatible,” citing dimensional differences and the ability to cold-draw wide

flat bar.153 U.K. producer Niagara asserts that several questionnaire respondents who perceived the two

products to be interchangeable nevertheless identified important differences between them.154

Common manufacturing facilities, production processes, and production employees: The

production process for both flat bars and CTL plate begins at the melting or refining stage where steel is

produced. In the next production phase, the steel is cast into semi-finished forms (blooms and billets, on

the one hand, or slabs, on the other). In a bar mill, wide flat bar is produced when blooms and billets are

rolled on all faces at the same time into a long bar shape. Most CTL plate is hot-rolled on a reversing

plate mill (also known as a sheared plate mill) or in a special form of a reversing mill called a Steckel

mill. Plate may also be rolled on a continuous hot-strip mill; these mills primarily produce hot-rolled

sheet but may also be used to produce plate up to 72 inches wide and between three-sixteenth and onehalf inch in thickness. Reversing plate mills, Steckel mills, and hot-strip mills all use slabs as the semifinished input to make plate. Finally, some CTL plate is made from hot-rolled coiled plate cut by steel

service centers.155

Of the six U.S. mills that produce wide flat bar, only Nucor and Mittal produce other forms of

CTL plate.156 Although the melting processes are the same and both products are hot-rolled, flat bars are

produced either with vertical and horizontal rolls to produce the desired width and thickness dimensions

or in a closed box pass. CTL plate is rolled with horizontal rolls only. Neither the employees nor the

equipment are generally interchangeable.157

Channels of distribution: Wide flat bars and CTL plate share similar channels of distribution. 

They both can be sold either to service centers or directly to end users, although a greater percentage of

wide flat bars is sold to end users.158
 159 Both U.S. producer and U.S. purchaser responses were divided between reporting no price (or price trend)

differential (two producers and two purchasers); lower prices for wide flat bar (one producer and four purchasers);

and higher prices for wide flat bar (one producer and one purchaser). The average unit value of shipments of wide

flat bar was $398.89 in 2000; it increased to $567.11 in 2004, and has remained above that unit value through 2005-

June 2006. In general, the average unit values of wide flat bar were lower than the average unit values of plate. See,

e.g., CR at CTL-I-28 to CTL-I-29; PR at CTL-I-24.

 160 See, e.g., Niagara’s Prehearing CTL Plate Br. at 9, n. 2, 14. As noted previously, arguments as to products

made outside the United States are irrelevant to our evaluation of domestic like product issues.

 161 Except where noted, the data referenced in section IV of this opinion reflect the carbon CTL plate market (i.e.,

the data associated with a domestic like product defined as CTL plate, including micro-alloy and wide flat bar

products). The data considered by Vice Chairman Aranoff, Commissioner Koplan, and Commissioner Lane differ to

the extent that these Commissioners defined the domestic like product differently than their colleagues. Thus, for

example, whereas Chairman Pearson, Commissioner Hillman, and Commissioner Okun refer to the data summaries

for carbon CTL plate such as those provided in Table C-2 of the staff report, Vice Chairman Aranoff, Commissioner

Koplan, and Commissioner Lane refer to the data summaries for non-alloy CTL plate such as those provided in

Table C-1 of the staff report. Each Commissioner finds that the minor differences in the two data sets do not lead to

differing results.

37

Price: According to questionnaire responses, prices of both CTL plate and wide flat bar follow

similar trends, but the data are mixed about which is priced higher.159 Niagara asserts that the ambiguity

in the data arises from the existence in the U.S. market of low-value wide “merchant bar,” which is not

the product that Niagara sells. It insists that wide flat bar is sold at a price premium over CTL plate.160

Although there is some contrary evidence, on balance we find that there is no clear dividing line

between wide flat bar products and other CTL plate products. Both products have similar physical

characteristics related to their overlapping production processes at the melting stage, although wide flat

bar products are made to more stringent requirements and are rolled along both the width and thickness

dimensions instead of just the thickness dimensions like other CTL plate products. Although wide flat

bars are narrower than other CTL plate products, that characteristic does not readily distinguish the two,

because CTL plate comes in a variety of widths and thicknesses. The products can be used in overlapping

applications, although wide flat bar products do not need to be further cut for narrower applications, are

suitable for cold-drawing, and can be produced with rounded or beveled edges for specific applications. 

Their interchangeability thus depends on specific customer end uses, and most domestic producers

perceived them to be interchangeable although some customers perceived them differently. Both are sold

through the same channels of distribution, and there is no clear indication that one is priced differently

than the other. The fact that the wide flat bars are produced at bar mills from blooms or billets is also not

a distinguishing feature because other CTL plate products are rolled from slabs and then produced to

specified lengths in a variety of manufacturing lines in a variety of different facilities (reversing mills,

more specialized Steckel mills, hot-strip mills, or service centers’ processing lines), with resultant

differences in their eventual characteristics. In conclusion, we do not find that wide flat bars rolled on a

bar mill are a separate domestic like product.

4. Conclusion

Based on our analysis of these two issues, we determine that the domestic like product is CTL

plate including wide flat bars. Chairman Pearson, Commissioner Hillman, and Commissioner Okun,

however, further define the like product to include micro-alloy products, but Vice Chairman Aranoff,

Commissioner Koplan, and Commissioner Lane do not.161
 162 We applied the domestic industry legal standards discussed in section III above.

 163 See, e.g., CR at CTL-I-22 to I-23; PR at CTL-I-19 to CTL-I-20.

 164 See, e.g., CR at CTL-I-23; PR at CTL-I-20.

 165 See, e.g., CR at CTL-I-24; PR at CTL-I-21.

 166 See, e.g., CR at CTL-I-25; PR at CTL-I-21.

 167 See, e.g., CR at CTL-I-25; PR at CTL-I-21.

 168 See, e.g., CR at CTL-I-25; PR at CTL-I-21.

 169 We applied the legal standards discussed in section III above.

 170 In the 1993 original determinations, the Commission defined the domestic industry as all domestic producers

of CTL plate. See, e.g., USITC Pub. 2664 at 216. In the 1979 original determination, the Commission found a

regional industry consisting of the facilities of domestic carbon steel plate producers located in the west coast states

of California, Washington, and Oregon. See, e.g., USITC Pub. 970 at 4. No party argued that the Commission

should define a regional industry in the first reviews of these orders, and the Commission applied a national rather

than a regional analysis of the domestic industry in the first reviews. See, e.g., USITC Pub. 3364 at 9-11. In the

absence of any contrary arguments in these reviews, we again apply a national rather than a regional analysis of the

domestic industry.

 171 See, e.g., USITC Pub. 3364 at 8-9.

 172 The Commission also found it significant that the manufacturing equipment and processes used by service

centers to decoil and cut to length coiled plate are the same as those used by the domestic mills. It also found that

(continued...)

38

B. Domestic Industry

1. In General162

As noted above, CTL plate is produced in the United States using one of several production

processes. Whether produced by the integrated or non-integrated process, molten steel is poured or

“tapped” from the furnace into a ladle then cast into a suitable form and rolled.163 Most CTL plate is hotrolled on a reversing plate mill (also known as a sheared plate mill) or in a special form of a reversing

mill called a Steckel mill.164 Plate may also be rolled on a continuous hot-strip mill or wide flat bar

products may be made in a bar mill.165 Finally, some service centers, which traditionally have served as

distributors of CTL plate, also perform a wide range of value-added processing of steel products, such as

uncoiling, flattening, and cutting plate products to length or flame/plasma cutting plate into nonrectangular shapes.166 Service centers that process hot-rolled coiled plate into cut lengths or nonrectangular shapes purchase the coiled plate from U.S. or foreign mills.167 The process of producing cut

plate from coiled plate is the same whether performed at the steel mill or by a service center.168

2. Sufficient Production-Related Activities169

In the original determinations, the Commission defined the domestic industry as the steel mills

producing CTL plate.170 In the original determinations, the Commission did not address the issue of

service centers that uncoil coiled hot-rolled plate and cut it to length into plate, and did not include such

processors in the domestic industry. In the first reviews, however, at the request of respondent interested

parties from Germany and the United Kingdom, the Commission did consider this issue, and, applying

the reasoning from the 1997 CTL plate original investigations, it determined that service center

processors engage in sufficient production-related activities to be included in the domestic industry.171

The facts relied upon by the Commission, in particular the fundamental fact that processors turn hotrolled coiled plate into a separate domestic like product, CTL plate, have not changed since then.172
 172 (...continued)

processors account for a significant percentage of overall employment and invest a significant amount of capital in

relatively sophisticated processing operations. See, e.g., USITC Pub. 3364 at 8-9. In 2005, U.S. processors reported

874 PRWs and capital expenditures of $6.8 million. See, e.g., CR at CTL-III-1 at n.1; PR at III-1 at n.1. The

Commission did not put much weight on the fact that the value added by service centers is small. See, e.g., USITC

Pub. 3364 at 8-9.

 173 See, e.g., Mittal’s Prehearing CTL Plate Br. at 7-8; Mittal’s Posthearing CTL Plate Br. at Answers to ViceChairman Aranoff’s Questions at 19.

 174 For example, purchaser Caterpillar takes no position with respect to the Commission’s definition of the

domestic industry. See, e.g., Caterpillar’s Prehearing CTL Plate Br. at 4.

 175 As the report points out, domestic industry data for the period 1990 to 1992 do not include the operations of

U.S. service centers engaged in processing hot-rolled steel coils in plate thicknesses into individual plates, but data

from the first reviews (1997 to 1999) and the current reviews (Jan. 2000 to June 2006) do include service center

operations. See, e.g., CR at CTL-I-1; PR at CTL-I-1.

 176 We applied the related party legal standards discussed in section III above.

 177 See, e.g., USITC Pub. 2664 at 95-99, 216.

 178 See, e.g., USITC Pub. 3364 at 12. The Commission focused on the small percentage of CTL plate shipped by

California Steel Industries and the fact that it supported continuation of the orders. The Commission found

Tuscaloosa Steel Corporation did not benefit from or receive any shielding effect from its relationship with U.K.

producer Corus and it concluded that Corus’ extensive investment in the Tuscaloosa facilities exhibited a

commitment to U.S. production. See, e.g., USITC Pub. 3364 at 12.

39

In these reviews, Mittal urges the Commission to include processors in the definition of the

domestic industry,173 and other parties either have not commented on this issue or have taken no

position.174 In the absence of contrary arguments or any apparent change in the factual or legal basis for

the Commission’s findings from the first reviews of these orders, we include service center processors in

the domestic industry in these reviews.175

3. Related Parties176

In the original 1993 investigations, the Commission did not find appropriate circumstances to

exclude any producers from the domestic industry as related parties, although it noted that several

domestic producers had a “financial relationship” with a subject producer through equity ownership, joint

ventures, or to a lesser extent through importation of subject merchandise. It did not want to skew the

data since related parties comprised a large portion of the industry and because most of the related parties

were actively seeking relief from the very entities to which they were related.177 In the first reviews, the

Commission found two related parties, California Steel Industries and Tuscaloosa Steel Corporation, each

of which was then owned by a subject foreign producer. It did not, however, find appropriate

circumstances to exclude either related party from the domestic industry, absent an indication that either

had been or was likely to be significantly insulated from import competition if the orders were revoked

such that its inclusion in the domestic industry would present a distorted picture.178 In these second

reviews, no party has argued that any domestic producer is a related party or that appropriate

circumstances exist to exclude any producers from the domestic industry on that basis.

In these reviews, there are two domestic producers who may be considered related parties: 

domestic mill Mittal Steel USA and ***. As explained below, even if Mittal Steel USA did not directly

import subject merchandise, there is some indication that a third party (Mittal Steel Co., NV) directly or

indirectly controls Mittal Steel USA and exporters or importers of subject merchandise. *** imported ***

short tons of subject CTL plate from *** in ***, representing less than *** percent of its CTL plate
 179 See, e.g., CR at CTL-III-13; PR at III-10. Inexplicably, official import statistics show no imports from Finland

in 2002. See, e.g., CR at CTL-V-13 n.12; PR at CTL-V-11 n.12.

 180 See, e.g., CR at CTL-III-4 to III-7; PR at CTL-III-3 to CTL-III-5; CR/PR at Table CTL-III-1.

 181 See, e.g., CR at CTL-I-33 to CTL-I-34; PR at CTL-I-28; CR/PR at Table CTL-I-21.

 182 See, e.g., CR at CTL-I-34; PR at CTL-I-28.

 183 Both are under the common control of Mittal Steel Company NV. See, e.g., Joint Respondents’ Prehearing

CTL Plate Br. at 43 n.128; CR/PR at Tables CTL-I-21, CTL-I-22.

 184 Mittal Steel USA explains that ***. See, e.g., Mittal’s Posthearing CTL Plate Br. at Answers to Vice

Chairman Aranoff’s Questions at 3-4.

 185 See, e.g., CR at CTL-I-33 to I-34; PR at CTL-I-28. Mittal Steel USA anticipates that ***. See, e.g., Mittal’s

Posthearing CTL Plate Br. at Answers to Vice Chairman Aranoff’s Questions at 2-3.

 186 Industeel, a Belgian producer of subject merchandise, and Arceralia, a Spanish producer of subject

merchandise, are both subsidiaries of Arcelor; neither firm provided the Commission with a completed

questionnaire. See, e.g., CR at CTL-I-34; PR at CTL-I-28. German CTL plate producer Dillinger, which responded

to the Commission’s questionnaires, is also a subsidiary of Arcelor. See, e.g., CR at CTL-I-37; PR at CTL-I-31. 

U.S. importers of subject merchandise, Arcelor and Industeel, are also Arcelor affiliates. See, e.g., CR at CTL-I-36

to CTL-I-37; PR at CTL-I-31; CR/PR at Table CTL-I-22. During the period of review, Arcelor imported from ***

whereas Industeel imported from ***. See, e.g., CR/PR at Table CTL-I-22.

 187 See, e.g., Joint Respondents’ Prehearing CTL Plate Br. at 44-45; CR/PR at Tables CTL-IV-44 

and CTL-IV-45.

 188 See, e.g., Nucor’s Posthearing CTL Plate Br. at App. 8 (citing questionnaire responses).

 189 See, e.g., Joint Respondents’ Prehearing CTL Plate Br. at 44-45.

40

production that year.179 *** subject imports were small and isolated, and there is no indication that ***

benefitted more than minimally from these imports, nor have any parties argued in favor of excluding ***

from the domestic industry.

With regard to Mittal Steel USA, Mittal Steel Co. NV was formed in 2005, as the result of a

merger between Ispat International and LNM Holdings. As the largest global steelmaker, Mittal Steel Co.

owns a number of plants located throughout the world, including domestic CTL plate producer Mittal

Steel USA. How Mittal Steel USA acquired its various U.S. assets is discussed in more depth in the

conditions of competition section below. In brief, Mittal Steel USA’s assets were acquired from the

purchase of the bankrupt assets of Acme Steel, LTV, and Bethlehem Steel, as well as most of U.S. Steel’s

CTL plate assets.180

Mittal Steel Co. owns Mittal Steel Galati, a Romanian producer of subject merchandise,181 and

has a *** percent share in Huta Batory, a Polish producer of subject merchandise. Huta Batory did not

respond to the Commission’s questionnaires in these reviews.182 Domestic producer Mittal Steel USA is

also affiliated with importer Mittal Steel North America,183 ***.184

In early 2006, Mittal Steel Co. announced its intent to merge with the second largest steelmaker

in the world, Arcelor, S.A., a merger still in the process of being approved and finalized.185 As a result of

this transaction, Mittal Steel USA will also have links to CTL plate producers in Belgium, Spain, and

Germany as well as to two additional U.S. importers of CTL plate.186

During the period of review, Mittal Steel Galati shipped ***. The majority of its shipments to the

United States were of a thickness ***.187 However, although ***.188 Joint respondent interested parties

assert that Mittal Steel Galati’s products not only complement the product line offered by Mittal USA but

also provide Mittal with additional capacity for its U.S. marketing plan.189

Mittal Steel USA, which has CTL plate production operations in Burns Harbor, Indiana,

Coatesville, Pennsylvania, and Conshohocken, Pennsylvania, accounted for *** percent of domestic

production of carbon steel CTL plate in 2005 and produces *** of micro-alloy steel CTL plate in the
 190 During the period of review, *** See, e.g., CR at CTL-III-3 n.4; PR at CTL-I-CTL-III-3 n.4; CR/PR at Table

CTL-I-21.

 191 See, e.g., CR at CTL-I-33 to I-34; PR at CTL-I-28; CR/PR at Table CTL-I-21; Mittal’s Prehearing CTL Plate

Br. at 1-2 n.2.

 192 See, e.g., Mittal’s Prehearing CTL Plate Br. at 7-8.

 193 See, e.g., Mittal’s Posthearing CTL Plate Br. at Answers to Vice-Chairman Aranoff’s Questions at 2-3.

 194 See, e.g., CR at CTL-III-13 to CTL-III-14; PR at CTL-III-10; CR/PR at Table CTL-III-6.

 195 See, e.g., CR/PR at Tables CTL-I-21, CTL-III-10.

 196 See, e.g., CR at CTL-I-33; PR at CTL-I-28; CR/PR at Table CTL-I-21. Although industry shipment

information was reported for fourteen active mills, one closed mill, and ten service centers, usable financial data was

only reported for twelve U.S. mills and five processors. See, e.g., CR at CTL-III-18; PR at CTL-III-12.

41

United States.190 The company ***.191 Mittal Steel USA does not believe that it should be excluded as a

related party in these reviews.192 ***, and as it explains, it ***.193 In its importer’s questionnaire

response, ***.194

Although Mittal Steel USA has a number of ties to subject producers and importers of subject

merchandise and it appears that the company will have additional ties once the Mittal/Arcelor merger has

been approved, we do not find appropriate circumstances to exclude Mittal Steel USA from the domestic

industry. The company accounts for a large amount of domestic production and through its various

acquisitions during the period of review, discussed above and in more detail below, it has strengthened its

U.S. presence and made clear its commitment to the U.S. market. It supports the continuation of these

orders, ***, and there is ***.195

Based on the available facts, we find that appropriate circumstances do not exist to warrant the

exclusion of any producers from the domestic industry as a related party under the Act. 

4. Conclusion

Accordingly, we determine that the domestic CTL plate industry includes the fourteen active

mills (Arkansas Steel, Claymont, CMC Steel Alabama, CSI, Gerdau Ameristeel, IPSCO, Jindal, Kentucky

Electric, LeTourneau, Mittal, Nucor, Oregon, U.S. Steel, and WCI) and one closed mill (Geneva) for

which there were data as well as ten service centers from which the Commission received questionnaire

responses (American Steel, Cargill, Feralloy, Friedman, IPSCO, Olympic, PDM, Primary, Robinson, and

Steel Warehouse).196
 197 Commissioner Koplan and Commissioner Lane exercise their discretion to cumulate subject imports from all

eleven subject countries. In doing so, they determine that (1) subject imports from Belgium, Brazil, Finland,

Germany, Mexico, Poland, Romania, Spain, Sweden, Taiwan, and the United Kingdom, assessed individually, are

not likely to have no discernible adverse impact on the domestic industry in the event of revocation; (2) subject

imports from these countries are likely to compete with each other and with the domestic like product in the event of

revocation; and (3) many of the likely conditions of competition faced by subject imports from each of these subject

countries are similar. See their separate views with respect to cumulation below in Section V, Separate Views of

Commissioners Stephen Koplan and Commissioner Charlotte R. Lane on Cumulation with Respect to Cut-ToLength Plate Products.

 198 Although it noted that Canada and Mexico did not appear to export substantial quantities of subject plate, the

Commission found that subject imports from these countries were still likely to have a discernible adverse impact on

the domestic industry because “of their geographic proximity to the United States” as well as the fact that Mexican

producer AHMSA was under bankruptcy protection, “an indication that it would have an incentive to maximize plate

production and sales.” USITC Pub. 3364 at 20 n.101.

 199 In declining to exercise its discretion to cumulate subject imports from Canada due to differences in conditions

of competition, the Commission noted that only one major Canadian plate mill, Stelco, remained subject to the order. 

The Commission found that Stelco “rarely exported significant quantities of subject plate to any country.” USITC

Pub. 3364 at 19. Moreover, record evidence showed that Canada was a net importer of plate (with much of its

imports originating from the United States), that demand for plate in Canada was strong, and that Canada had

antidumping orders in place with respect to several countries. See, e.g., id.

 200 Chairman Pearson and Commissioner Okun note that while they consider the same issues discussed in this

section in determining whether to exercise their discretion to cumulate the subject imports, their analytical

framework begins with whether imports from the subject countries are likely to face similar conditions of

(continued...)

42

C. Cumulation197

1. Framework and Background

We applied the legal standards as discussed in Section III above. 

In the first reviews, the Commission found, based on the available information on capacity,

production, product mix, and export orientation,198 as well as the “weakened condition of the U.S.

industry,” that the subject imports from Belgium, Brazil, Canada, Finland, Germany, Mexico, Poland,

Romania, Spain, Sweden, Taiwan, and the United Kingdom each would be likely to have a discernible

adverse impact on the domestic industry if the finding and orders were revoked. The Commission also

found that there likely would be a reasonable overlap of competition between subject imports from all of

those countries under review and the domestic like product, and among the subject imports from all of

those countries, if the finding and orders were revoked. The Commission did not find any significant

differences in the conditions of competition among those subject countries, except for Canada, with

respect to which the order was revoked during those reviews and is therefore not subject to the current

reviews.199 For these reasons, the Commission exercised its discretion to cumulate subject imports from

Belgium, Brazil, Finland, Germany, Mexico, Poland, Romania, Spain, Sweden, Taiwan, and the United

Kingdom.

The threshold criterion for cumulation in these reviews is satisfied because all of the reviews of

CTL plate were initiated on the same day.

We consider three issues in deciding whether to exercise our discretion to cumulate the subject

imports: (1) whether imports from any of the subject countries are precluded from cumulation because

they are likely to have no discernible adverse impact on the domestic industry; (2) whether imports of

CTL plate from the subject countries are likely to compete with each other and with the domestic like

product; and (3) other considerations, such as similarities and differences in the likely conditions of

competition of the subject imports with regard to their participation in the U.S. market for CTL plate.200
 200 (...continued)

competition. For those subject imports which are likely to compete under similar conditions of competition, they

next proceed to consider whether those imports are likely to compete with each other and with the domestic like

product. Finally, if based on that analysis they intend to exercise their discretion to cumulate one or more subject

countries, they analyze whether they are precluded from cumulating such imports because the imports from one or

more subject countries, assessed individually, are likely to have no discernible adverse impact on the domestic

industry. See Additional and Dissenting Views of Chairman Daniel R. Pearson and Commissioner Deanna Tanner

Okun, found in Stainless Steel Bar from Brazil, India, Japan, and Spain, Invs. Nos. 731-TA-678, 679, 681, and 682

(Second Review), USITC Pub. 3895 (Dec. 2006).

They join Vice Chairman Aranoff and Commissioner Hillman’s discussion of the issues in this section, and

reach the same conclusion. That is, Chairman Pearson and Commissioner Okun determine that subject imports from

Mexico are likely to have no discernible adverse impact on the domestic industry in the event of revocation, and

therefore, subject imports from Mexico are not eligible for cumulation with the other subject imports. They also

determine that certain factors indicate that subject imports from Romania will likely compete under different

conditions of competition than other subject imports and, therefore, they do not exercise their discretion to cumulate

subject imports from Romania for purposes of their analysis of likely volume, likely price effects, and likely injury. 

Finally, Chairman Pearson and Commissioner Okun determine that (1) many of the likely conditions of competition

faced by subject imports from Belgium, Brazil, Finland, Germany, Poland, Spain, Sweden, Taiwan, and the United

Kingdom are similar; (2) subject imports from these countries are likely to compete with each other and with the

domestic like product in the event of revocation; and (3) subject imports from these countries, assessed individually,

are not likely to have no discernible adverse impact on the domestic industry in the event of revocation. Therefore,

Chairman Pearson and Commissioner Okun exercise their discretion to cumulate subject imports from Belgium,

Brazil, Finland, Germany, Poland, Spain, Sweden, Taiwan, and the United Kingdom.

 201 Chairman Pearson and Commissioner Okun examine the likelihood of a reasonable overlap of competition

only after first determining whether subject imports are likely to face similar conditions of competition. Because

they determine that certain factors indicate that subject imports from Romania will likely compete under different

conditions of competition than other subject imports, they do not include subject imports from Romania in their

analysis of the likelihood of a reasonable overlap of competition.

 202 See Allegheny Ludlum Corp. v. United States, Slip Op. 06-188, U.S. Court of International Trade (Dec. 22,

2006).

 203 We find that cross-cumulation of dumped and subsidized subject imports is appropriate as an exercise of our

discretion. See, e.g., Sugar from the European Union, and Sugar from Belgium, France, and Germany, Invs. Nos.

104-TAA-7 (Second Review) and AA1921-198-200 (Second Review), USITC Pub. 3793 at 11, n.47 (Aug. 2005).

43

In so doing, we take into account the various arguments by the parties. Our focus in five-year reviews is

not only on present conditions of competition, but also on likely conditions of competition in the

reasonably foreseeable future.

We have determined, as discussed below, that subject imports from Mexico are likely to have no

discernible adverse impact on the domestic industry in the event of revocation, and therefore, subject

imports from Mexico are not eligible for cumulation with the other subject imports. We also have

determined that subject imports from the remaining ten subject countries are likely to compete with each

other and with the domestic like product in the event of revocation.201 We determine finally that certain

factors indicate that subject imports from Romania will likely compete under different conditions of

competition than other subject imports with regard to their participation in the U.S. market for CTL plate

and, therefore, we do not exercise our discretion to cumulate subject imports from Romania for purposes

of our analysis of likely volume, likely price effects, and likely impact.202 We therefore exercise our

discretion to cumulate subject imports from Belgium, Brazil, Finland, Germany, Poland, Spain, Sweden,

Taiwan, and the United Kingdom.203
 204 Because we decline to cumulate subject imports from Romania with those from any other subject countries on

the basis of differences in conditions of competition, we find it unnecessary to decide the issue of no discernible

adverse impact with respect to Romania. Cf. Top-of-the-Stove Stainless Steel Cooking Ware from Korea, Invs. Nos.

701-TA-267 and 731-TA-304 (Review) (Remand), USITC Pub. 3485 at 5 (Jan. 2002) (declining to address criterion

of no discernible adverse impact in the absence of evidence of a reasonable overlap of competition).

 205 See, e.g., CR/PR at Table CTL-I-1.

 206 See, e.g., CR/PR at Tables C-2, C-1. AHMSA’s posthearing brief contains revised 1998 and 1999 import

statistics from the U.S. Census Bureau listing the volume of imports from Mexico as 568 tons and 181 tons in 1998

and 1999, respectively. See id. citing AHMSA’s Posthearing CTL Plate Br. at Exh. 11.

 207 See, e.g., CR at OVERVIEW-12 to OVERVIEW-15; PR at OVERVIEW-10 to OVERVIEW-12; AHMSA’s

Prehearing CTL Plate Br. at 8. Romania and Poland were the only other subject countries exempted from the

safeguards imposed on CTL plate. See, e.g., CR at OVERVIEW-12 to OVERVIEW-15 n.30; PR at OVERVIEW11 n.30.

 208 In 2005, Mexico’s reported capacity was *** short tons, and its reported production was *** short tons.

 209 See, e.g., CR/PR at Table CTL-IV-30. Mexico’s capacity utilization was *** percent in 1992 and *** percent

in 1999.

 210 See, e.g., CR/PR at Table CTL-IV-31. AHMSA’s internal study projects an annual growth rate of *** percent

in home market consumption for both subject and nonsubject CTL plate products. See, e.g., AHMSA’s Prehearing

CTL Plate Br. at Exhibit A. Independent economic indicators and studies also point to continued overall economic

growth in Mexico and in the industries that consume CTL plate. See, e.g., AHMSA’s Prehearing CTL Plate Br. at

11 n.44. Specifically, AHMSA notes that demand for CTL plate is expected to rise because Trinity, a major

producer of railcars in both Mexico and the United States ***, recently opened a new railcar production facility in

(continued...)

44

2. Likelihood of No Discernible Adverse Impact

We consider all relevant factors in analyzing “no discernible adverse impact” in these reviews. 

Based on the record, we find that subject imports from Mexico are likely to have no discernible adverse

impact on the domestic industry in the event the antidumping and countervailing duty orders on imports

from Mexico are revoked. We do not find, however, that subject imports from Belgium, Brazil, Finland,

Germany, Poland, Spain, Sweden, Taiwan, or the United Kingdom are likely to have no discernible

adverse impact if the antidumping finding, antidumping duty orders, and countervailing duty orders on

imports from those countries are revoked.204

a. Mexico

We find that subject imports from Mexico are likely to have no discernible adverse impact on the

domestic industry in the event of revocation. During the 1993 original investigations, subject imports

from Mexico were 41,520 short tons in 1990 and 59,993 short tons in 1992, or 0.7 percent and 1.2 percent

of apparent U.S. consumption in 1990 and 1992, respectively.205 Since the orders were imposed, subject

imports from Mexico have maintained a minimal presence in the U.S. market, comprising less than 0.05

percent of the market in all years since 1997.206 Subject imports from Mexico have remained minimal

despite an exemption from the Section 201 steel safeguards relief that imposed a 30 percent ad valorem

tariff on CTL plate imports effective March 20, 2002, that was reduced to 24 percent on March 20, 2003,

and ultimately terminated by the President on December 4, 2003.207

Mexico has a single producer of subject CTL plate, Altos Hornos de Mexico, S.A., de C.V.

(“AHMSA”), and the Mexican industry has the smallest capacity and production of any of the subject

industries.208 While reported production capacity for subject CTL plate from Mexico remained flat over

the period of review, capacity utilization rose to a full-year period high of *** percent in 2005.209

Substantially all of AHMSA’s capacity is dedicated to serving increasing home market demand.210 Even
 210 (...continued)

Mexico, and production from this facility is expected to increase over the next two years. See, e.g., id. at 16.

 211 See, e.g., AHMSA’s Prehearing CTL Plate Br. at 12. AHMSA reportedly accounts for *** percent of CTL

plate production in Mexico. See, e.g., CR/PR at CTL-IV-48. We note that AHMSA has recently filed an

antidumping duty petition with respect to CTL plate from China. See, e.g., AHMSA’s Dec. 4, 2006 Letter. 

Nevertheless, there is no evidence on this record that significant volumes of Chinese CTL plate imports are

displacing Mexican home market sales, or forcing Mexico to increase its exports. In fact, Mexican home market

shipments have increased steadily since 2003, and as noted above, the data do not show any significant exporting

activity by Mexico. See, e.g., CR/PR at Table CTL-IV-31.

 212 See, e.g., CR at CTL-IV-50; PR at CTL-IV-25.

 213 See, e.g., AHMSA’s Prehearing CTL Plate Br. at 13.

 214 Domestic interested parties have argued that Mexico’s exports to Canada, following revocation of the

Canadian antidumping order on CTL plate from Mexico in 2003, showed Mexico’s ability to increase rapidly its

exports following revocation. See, e.g., Mittal’s Prehearing CTL Plate Br. at 16. In 2003, one of the three major

Canadian producers of CTL plate, Stelco, exited from the industry, creating a supply deficit that could be filled only

by imports. However, in 2004, when total CTL plate imports to Canada almost doubled, imports from Mexico

declined to ***. In 2005, Canada’s CTL plate imports from Mexico increased to *** short tons, but this figure

represents less than a *** percent share of total CTL plate imports into Canada from the rest of the world. In interim

2006, Mexico’s CTL plate exports to Canada were nominal. See, e.g., AHMSA’s Prehearing CTL Plate Br. at Exh.

15 citing Certain Hot-Rolled Carbon Steel Plate Originating in or Exported from Mexico, the People’s Republic of

China, the Republic of South Africa and the Russian Federation, Expiry Review No. RR-2001-006 (Jan. 10, 2003) at

3, 10, 14-15.

 215 See, e.g., CR/PR at Table CTL-IV-31.

 216 See, e.g., CR at CTL-IV-47; PR at CTL-IV-25. To the extent AHMSA may ship CTL plate to the United

States following revocation, it has stated that those shipments will serve a discrete set of multinational companies

operating on both sides of the border that are end-users of CTL plate, as opposed to service centers or distributors.

See, e.g., CTL Plate Hearing Tr. at 267-68 (Pierce). Since AHMSA cannot meet Mexican demand, and since the

U.S. industry is the largest foreign supplier to the Mexican market, any limited sales by Mexico of CTL plate to

these multinational companies, whose Mexican subsidiaries are already served by AHMSA, are likely to be at least

partly offset by increased sales by the domestic industry to Mexican customers.

 217 See, e.g., AHMSA’s Posthearing CTL Plate Br. at 9-10; see also, e.g., CR at CTL-V-3; PR at CTL-V-2 (perunit transportation costs from Mexico to the United States estimated at 4.76 percent).

 218 See, e.g., AHMSA’s Posthearing CTL Plate Br. at 10.

45

running at full capacity, AHMSA has been able to meet only a little over *** percent of home market

demand, with the remainder being supplied by foreign sources.211 Indeed, growing home market demand

has turned Mexico into a net importer of CTL plate.212 Throughout the period of review, the United

States was the largest exporter of CTL plate to Mexico, accounting for *** percent of apparent Mexican

consumption in 2005.213

The Mexican CTL plate industry is not export-oriented.214 In each year of the period of review,

all or substantially all of Mexico’s CTL plate shipments have been made to the home market.215 AHMSA

reported minimal CTL plate exports to the *** in 2001, and 2005 marked the only other year it reported

exports to any other markets; even then, exports accounted for only *** percent of its shipments.216

Moreover, U.S. CTL plate price levels will not serve as an incentive for AHMSA to start exporting to the

United States. MEPS 2005-2006 pricing data, compared to home market prices supplied by AHMSA,

show that AHMSA’s prices in Mexico closely track U.S. CTL plate prices. At its ***, AHMSA’s home

market price was only *** than that of the domestic industry’s, ***.217 In *** months examined, ***.218
 219 See, e.g., Mittal’s Prehearing CTL Plate Br. at 15-16.

 220 See, e.g., CR at CTL-IV-47; PR at CTL-IV-25.

 221 See, e.g., CR at CTL-IV-47; PR at CTL-IV-25.

 222 See, e.g., CR at CTL-IV-47; PR at CTL-IV-25.

 223 See, e.g., CR at CTL-IV-47; PR at CTL-IV-25.

 224 See, e.g., CR at CTL-IV-47; PR at CTL-IV-25; AHMSA’s Posthearing CTL Plate Br. at 3-4. How we define

the reasonably foreseeable future is explained in the conditions of competition section below.

 225 We also note that counsel for some of the domestic interested parties conceded that Mexico should not be

cumulated absent a proposed capacity expansion. As stated by counsel during the hearing, “if {AHMSA’s capacity

expansion} wasn’t public ... {t}hen Mexico would probably be out of this case in a minute ... based on {its} present

capacity compared to the amount of imports in the {Mexican} market.” See, e.g., CTL Plate Hearing Tr. at 210.

 226 See, e.g., CR/PR at Tables CTL-C-2, CTL-IV-9 (*** percent for Belgium), CTL-IV-14 (*** percent for

Brazil), CTL-IV-19 (*** percent for Finland), CTL-IV-25 (*** percent for Germany), CTL-IV-37 (*** percent for

Poland), CTL-IV-48 (*** percent for Spain), CTL-IV-50 (*** percent for Sweden), CTL-IV-53 (*** percent for

Taiwan), and CTL-IV-58 (*** percent for the United Kingdom). Vice Chairman Aranoff notes that these

percentages are even higher based on her definition of the domestic like product, which does not include micro-alloy

products. 

 227 See, e.g., CR/PR at Tables CTL-IV-9, CTL-IV-14, CTL-IV-19, CTL-IV-25, CTL-IV-37, CTL-IV-49, CTLIV-51, CTL-IV-53, and CTL-IV-58. In 2005, total exports of CTL plate as a percentage of total shipments for

subject industries ranged from a low of *** percent for the *** industry to a high of *** percent for the ***

(continued...)

46

Domestic interested parties argue that AHMSA is likely to increase its shipments of CTL plate to

the United States after revocation due to its planned capacity expansion.219 The record indicates that

AHMSA’s planned expansion is intended to ***.220 These plans call for ***.221 However, AHMSA’s

***.222 Since 1999, AHMSA has been operating under suspension of payment status, which will require

it to overcome numerous hurdles in order to obtain financing to undertake the expansion, including an

inability to access normal lines of credit, downgrades in its credit rating, and court approval before

undertaking a debt obligation of this size.223 Even if AHMSA is able to obtain financing for this

expansion, which is uncertain at this time, it will take AHMSA at least three years for this expansion to

come on line, a time frame which for purposes of these reviews we do not consider to be within the

reasonably foreseeable future.224 225

For all of these reasons we find that subject imports from Mexico are likely to have no discernible

adverse impact on the domestic industry within a reasonably foreseeable time in the event of revocation

of the antidumping and countervailing duty orders on subject imports from Mexico, and, accordingly, we

conclude that the statute precludes cumulation of subject imports from Mexico with other subject imports.

b. Belgium, Brazil, Finland, Germany, Poland, Spain, Sweden, Taiwan,

and the United Kingdom

By contrast, we do not find that subject imports from Belgium, Brazil, Finland, Germany, Poland,

Spain, Sweden, Taiwan, and the United Kingdom would be likely to have no discernible adverse impact

on the domestic industry in the event of revocation of orders covering those imports.

Relative to the U.S. market, the size of the CTL plate industry in each of these countries is

significant. In 2005, the capacity in each subject country was equivalent to at least seven percent of

apparent U.S. consumption.226 Each country has capacity to produce a large range of plate products, and

the actual production of subject plate is significant in each country. Moreover, the CTL plate industries in

all of the subject countries are globally recognized, and all subject countries export subject plate, although

to varying degrees.227 Prior to the imposition of the antidumping finding, antidumping duty orders, and
 227 (...continued)

industry. See, e.g., CR/PR at Tables CTL-IV-9, CTL-IV-14, CTL-IV-19, CTL-IV-25, CTL-IV-37, CTL-IV-49,

CTL-IV-51, CTL-IV-53, and CTL-IV-58.

 228 See, e.g., Domestic Interested Parties Questionnaire Responses at II-13, II-14; CR/PR Tables CTL-IV-10,

CTL-IV-11 (Belgium), CTL-IV-15, CTL-IV-16 (Brazil), CTL-IV-20, CTL-IV-21 (Finland), CTL-IV-26, CTL-IV-27

(Germany), CTL-IV-38, CTL-IV-39 (Poland), CTL-IV-54, CTL-IV-55 (Taiwan), and CTL-IV-59, CTL-IV-60

(United Kingdom). Publicly available data from Sweden indicates that “heavy plate” constituted the majority of

SSAB’s plate production during the period of review, although the company has stated that it plans on reducing the

volume of heavy plate production in favor of high-strength steel and other niche products. See, e.g., CR at CTL-IV75; PR at CTL-IV-33. The record contains no information regarding the product mix from Spain.

 229 See, e.g., CR at CTL-II-21; PR at CTL-II-13.

 230 See, e.g., CR/PR at Table CTL-II-5.

 231 See, e.g., CR/PR at Table CTL-V-6. In these reviews, subject imports from Germany undersold the domestic

like product. See, e.g., CR/PR at Table CTL-V-6.

 232 See Certain Cast-Iron Pipe Fittings from Brazil, the Republic of Korea, and Taiwan, Invs. Nos. 731-TA-278 to

280 (Final), USITC Pub. 1845 (May 1986), aff'd, Fundicao Tupy, S.A. v. United States, 678 F. Supp. 898 (Ct. Int'l

Trade 1988), aff'd, 859 F.2d 915 (Fed. Cir. 1988); Mukand Ltd. v. United States, 937 F. Supp. 910, 915 (Ct. Int’l

Trade 1996)).

 233 Chairman Pearson and Commissioner Okun examine the likelihood of a reasonable overlap of competition

only after first determining whether subject imports are likely to face similar conditions of competition. Because

they determine that certain factors indicate that subject imports from Romania will likely compete under different

conditions of competition than other subject imports, they do not include subject imports from Romania in their

analysis of the likelihood of a reasonable overlap of competition.

47

countervailing duty orders, subject imports from each country were present in the U.S. market, and we

find that upon revocation of the orders, subject imports from each country are likely to have at least some

presence in the U.S. market.

With respect to product mix, the types of plate products manufactured and exported in each of the

subject countries do not differ dramatically from the types of plate produced in the United States.228

Imports from each of the subject countries are likely to be substitutable for, and competitive with,

domestically produced plate.229 Such competition is likely to be based, at least in part, on price, in light of

the importance of price in purchasing decisions.230 Producers in each country undersold U.S. producers at

times during the original investigation period, and, in the case of Germany, during this review period as

well.231 Accordingly, we cannot conclude that subject imports from Belgium, Brazil, Finland, Germany,

Poland, Spain, Sweden, Taiwan, and the United Kingdom would be likely to have no discernible adverse

impact on the domestic industry in the event of revocation of orders covering those imports.

3. Likelihood of a Reasonable Overlap of Competition

In assessing likely competition for purposes of cumulation in original investigations, the

Commission generally has considered four factors intended to provide a framework for determining

whether the imports compete with each other and with the domestic like product: (1) fungibility; (2) sales

or offers in the same geographic markets; (3) common or similar channels of distribution; and

(4) simultaneous presence.232 In five-year reviews, the relevant inquiry is whether there likely would be a

reasonable overlap of competition even if none currently exists because the subject imports are absent

from the U.S. market. We consider these four factors in addition to those discretionary factors discussed

below with respect to subject imports from Belgium, Brazil, Finland, Germany, Poland, Romania, Spain,

Sweden, Taiwan, and the United Kingdom.233 Because we do not cumulate subject imports from Mexico

due to our no discernible adverse impact finding with regard to those subject imports, we find it
 234 In the original investigations and the first reviews the Commission stated that specialized or “niche” products

constituted only a small percentage of imports from any one country, and that subject countries continue to produce

substantial volumes of commodity CTL plate that accounted for a large share of the U.S. market. See, e.g., USITC

Pub. 2664 at 20; USITC Pub. 3364 at 21; USITC Pub. 3587 at 9 (Remand Determination).

 235 See, e.g., CR/PR at Table CTL-II-8. Large numbers of purchasers and importers reported that they had no

familiarity with imports from all or most of the subject countries. A majority of purchasers also stated that imported

and U.S. produced CTL plate are generally used in the same applications.

 236 See, e.g., CR/PR at Table CTL-II-8.

 237 See, e.g., CR at CTL-II-29 to CTL-II-30; PR at CTL-II-19 to CTL-II-20. Twelve purchasers reported that

certain grades, types, or sizes of CTL plate are available from only a single source. *** reported that abrasionresistant material is only available from Sweden, Germany, and Canada, while *** reported that Germany has a

patented material with a unique composition. See, e.g., CR at CTL-II-25; PR at CTL-II-16.

 238 See, e.g., CR/PR at Table CTL-II-7. No purchaser completed the comparison between the United States and

Belgium, Brazil, Finland, Romania, Spain, Taiwan, or the United Kingdom, although five purchasers completed the

comparison between the United States and “all foreign countries.”

 239 See, e.g., CR/PR at CTL-Table II-8. German producers reported that ***. See, e.g., CR at CTL-II-11 n.16;

PR at CTL-II-7 n.16.

48

unnecessary to decide the issue of the likelihood of a reasonable overlap of competition with respect to

subject imports from this country.

In these reviews, the record indicates that domestically produced and imported CTL plate are

fungible products. Consistent with the Commission’s findings in the original investigations and the first

reviews, the record in the current reviews indicates that the domestic like product and subject imports

from Belgium, Brazil, Finland, Germany, Poland, Romania, Spain, Sweden, Taiwan, and the United

Kingdom are generally substitutable.234 For example, out of 103 responses from purchasers expressing

familiarity with imports from subject countries (excluding Mexico), 42 reported CTL plate from these ten

subject countries to be “always” interchangeable with U.S. produced CTL plate, 31 reported CTL plate

from these ten subject countries to be “frequently” interchangeable with U.S.-produced CTL plate, 29

reported CTL plate from these ten subject countries to be “sometimes” interchangeable with U.S.

produced CTL plate, and one reported CTL plate from these ten subject countries to be “never”

interchangeable with U.S.-produced CTL plate.235 A vast majority of importers expressing familiarity

with subject imports, 48 of 53, reported CTL plate from these subject countries to be “always” or

“frequently” interchangeable with U.S.-produced CTL plate.236 Moreover, a vast majority of importers

and purchasers expressing familiarity with subject imports reported that imports from subject countries

were used interchangeably. A majority of purchasers reported that country of origin was rarely or never a

factor in purchasing decisions.237 Purchasers were asked to compare domestic and subject CTL plate

products on the basis of 20 ranking factors, and, although responses were limited, purchasers found that

the U.S. product was generally comparable to, and sometimes superior to, subject imports.238

German and U.K. producers were the only respondent interested parties to present arguments

regarding the likelihood of a reasonable overlap of competition. They both argued that their exports are

not substitutable for the domestic product because they currently export specialty CTL plate, and ***. 

However, the record refutes their contentions. Eleven of 14 importers and purchasers expressing

familiarity with imports from the United Kingdom reported that such imports were “always” or

“frequently” interchangeable with U.S.-produced CTL plate, while 16 of 20 importers and purchasers

expressing familiarity with imports from Germany reported that such imports were “always” or

“frequently” interchangeable with U.S.-produced CTL plate.239 Moreover, the record shows that both

U.K. and German producers produce and export to non-U.S. markets significant quantities of carbon

structural steel plate less than four inches thick, which are directly substitutable for U.S. produced CTL
 240 See generally Chefline Corp. v. United States, 219 F. Supp. 2d 1313, 1314 (Ct. Int’l Trade 2002) (“The statute

and legislative history are clear: the Commission is not required to find that subject imports currently compete in the

U.S. market.”); cf. SAA at 888 (regional industry); see also, e.g., Granular Polytetrafluoroethylene Resin from Italy

and Japan, Invs. Nos. 731-TA-385 to 386 (Second Review), USITC Pub. 3823 at 13-14 (Dec. 2005). (“While

subject imports from Japan currently consist of niche products, the current composition of subject imports is affected

by the discipline of the antidumping duty orders and thus not necessarily indicative of likely post-revocation

behavior.”) (finding a likely reasonable overlap of competition).

 241 USITC Pub. 3364 at 22.

 242 See, e.g., CR at CTL-II-3; PR at CTL-II-3; CR/PR at Table CTL-II-2. Seven of nineteen producers and seven

of fifteen importers reported selling nationwide during the review period.

 243 USITC Pub. 3364 at 21.

 244 See, e.g., CR at CTL-II-1; PR at CTL-II-1.

49

plate. Although U.K. and German producers do not currently compete in the U.S. market to any

significant degree, the focus of the Commission’s inquiry here is on “likely,” not current, competition.240

We, therefore, conclude that subject imports from Belgium, Brazil, Finland, Germany, Poland,

Romania, Spain, Sweden, Taiwan, and the United Kingdom are sufficiently fungible with one another and

with the domestic like product.

With respect to geographic overlap and simultaneous presence, in the first reviews, the

Commission found that the record was “mixed” concerning simultaneous market presence and geographic

overlap, but found that, “in light of the importance of sales to steel service centers, which are dispersed

throughout the United States and hold sizeable plate inventories, we find it likely that subject imports

from each subject country would be simultaneously present in the U.S. market as a whole and in the same

geographical markets as other subject imports and the domestic like product.”241

Similar to the record in the first reviews, the record in the current reviews is mixed regarding

geographic overlap and simultaneous presence in the market. The record continues to reflect that current

producers and importers as a whole reported nationwide sales. Subject imports were also generally

available in multiple regions of the country during the review period.242

Subject imports from some subject countries were not present during some of the current review

period. Imports of subject merchandise from all subject countries, except Romania, have declined

substantially since the orders were imposed. There were reportedly *** imports of subject CTL plate

from Belgium (except in 2005), Brazil, Finland, Poland, Taiwan, and the United Kingdom (except in

2003). According to official import statistics, there were no imports of subject CTL plate from Spain in

2001, and from 2003 through 2005, and from Sweden in 2003. Prior to the imposition of the orders,

subject imports from each country were present in the U.S. market, and we find that upon revocation of

the orders, subject imports from each country are likely to have at least some presence in the U.S. market.

The record also indicates that there is sufficient overlap in the channels of distribution for

domestic and imported CTL plate. In the first reviews, the Commission found that “domestic producers

and importers ship plate to end users, distributors, and service centers.”243 This is generally consistent

with the record in the current reviews, although there were too little data reported to comment specifically

on imports from subject countries.244

On balance, we find that subject imports from the ten subject countries would be sufficiently

fungible, move in the same channels of distribution, and compete in the same geographic markets during

the same periods, and we therefore conclude that there would likely be a reasonable overlap of

competition among subject imports from Belgium, Brazil, Finland, Germany, Poland, Romania, Spain,
 245 See Siderca S.A.I.C. v. United States, 391 F. Supp. 2d 1353, 1364-65 (Ct. Int’l Trade 2005) (For cumulation in

reviews, “[t]here is no requirement that the ITC find that all four subfactors are independently supported by a

‘likeliness’ determination.”), citing Wieland Werke, 718 F. Supp. at 50.

 246 We find it unnecessary to reach the issue of whether subject imports from Mexico are likely to compete in the

U.S. market under different conditions of competition than other subject imports, because we decline to exercise our

discretion to cumulate such imports on the basis of our finding of no likely discernible adverse impact, as discussed

above. 

 247 See, e.g., CR at CTL-IV-64; PR at CTL-IV-29.

 248 See, e.g., CR at CTL-IV-64 to CTL-IV-65; PR at CTL-IV-30.

 249 See, e.g., CR/PR at Table CTL-III-1. In 2005, Mittal Steel USA accounted for *** percent of U.S. production

of non-alloy CTL plate and *** percent of U.S. production of carbon CTL plate. Mittal Steel USA also has a

corporate relationship with another subject producer, Polish producer Huta Batory (*** percent share). Further,

once the Arcelor-Mittal merger is finalized ***, Mittal also will be linked to producers in Belgium, Germany, and

Spain, which are subsidiaries of the Arcelor Group. See, e.g., CR at CTL-I-33 to CTL-I-34; PR at CTL-I-28. While

these corporate relationships ultimately may affect the behavior of those producers in the same manner in which the

behavior of Mittal Steel Galati will likely be affected, at this time we cannot determine that it is more likely than not

that there will be the same effect in the reasonably foreseeable future. First, Mittal only has a partial ownership

interest in Polish producer Huta Batory, and Huta Batory represents less than *** of Poland’s CTL plate production

capacity. See, e.g., CR at CTL-IV-54. Second, in the case of Belgium and Germany, Mittal’s eventual relationship

with the Arcelor Group producers in those countries represents only a portion of the industries in Belgium (Industeel

is one of two Belgian producers and only accounts for about *** percent of Belgian CTL plate production) and

Germany (Dillinger is *** of three German CTL plate producers). See, e.g., CR at CTL-IV-13, CTL-IV-41; PR at

CTL-IV-12. Finally, while there is only one Spanish producer, it did not respond to the Commission’s

questionnaire, and thus, we lack any data upon which to evaluate the likely effects of the eventual Arcelor-Mittal

(continued...)

50

Sweden, Taiwan, and the United Kingdom and between these subject imports and the domestic like

product in the event of revocation.245

4. Other Considerations

In determining whether to exercise our discretion to cumulate subject imports from Belgium,

Brazil, Finland, Germany, Poland, Romania, Spain, Sweden, Taiwan, and the United Kingdom,246 we also

examine other considerations, such as similarities and differences in the likely conditions of competition

of the subject imports with regard to their participation in the U.S. market for CTL plate.

Several factors indicate that subject imports from Romania will likely compete in the U.S. market

under different conditions of competition than other subject imports, if the antidumping duty order on

CTL plate imports from Romania were revoked.

The Romanian CTL plate industry has undergone significant changes since the original

investigations and the first five-year reviews that distinguish it from the CTL plate industries in the other

subject countries. Most importantly, since April 2005, the lone Romanian producer of CTL plate has

been in the same corporate group as a major U.S. producer of CTL plate. During the original

investigations, the Commission identified two state-owned Romanian producers of CTL plate, Sidex SA

Galati and Metalexportimport. During the first reviews, there remained only one producer, Sidex.247

Since the first five-year reviews, Sidex was privatized and purchased in 2001 by LNM Holdings, which

eventually brought the company under the control of the multinational Mittal Group of steel companies. 

The Romanian producer now operates under the name Mittal Steel Galati.248 As of April 2005, Mittal

Steel Co., NV purchased the assets of U.S. CTL plate producer International Steel Group (“ISG”), thereby

creating Mittal Steel USA, which consequently is now affiliated with its Romanian sister company Mittal

Steel Galati.249 This newly arising corporate affiliation between Mittal Steel Galati and Mittal Steel USA
 249 (...continued)

merger with regard to subject imports from Spain. See, e.g., CR at CTL-IV-73; PR at CTL-IV-31.

 250 There were no subject imports from Romania during the first half of 2006. See, e.g., CR/PR at Table CTL-IV1.

 251 The record contains no information regarding the capacity or capacity utilization trends for Spain and Sweden

over the period of review.

 252 See, e.g., CR/PR at Table CTL-IV-43. Romania’s reported increase in capacity was ***. See, e.g., CR at

CTL-IV-65; PR at CTL-IV-30.

 253 See, e.g., CR/PR at Table CTL-IV-43.

 254 See, e.g., CR at CTL-IV-68; PR at CTL-IV-30.

 255 We note even if we had decided to exercise our discretion to cumulate subject imports from all eleven subject

countries, we would have reached negative determinations with respect to subject CTL plate from each of the eleven

countries.

51

will make it likely that decisions as to how Mittal Steel Galati will respond to revocation of the

antidumping duty order will be made at the corporate level with the best interests of the U.S. affiliate in

mind.250

While the reported capacity of the CTL plate industry in each of the subject countries ***, Mittal

Steel Galati’s capacity *** during the period of review.251 Mittal Steel Galati’s reported capacity

increased from *** short tons in 2000 to *** short tons in 2003, before declining to *** short tons in

2005, ***.252 While the Romanian industry has increased its production over the period of review, in

2005 it still had the *** level of capacity utilization, *** percent, of any of the subject countries, and as a

result, had the *** amount of excess capacity of any of the subject countries.253

Finally, the record also indicates that Romania is the only subject country that faces tariff barriers

in third-country markets.254 Two of those countries with tariff barriers in place, Mexico and Canada, limit

Romania’s export markets in North America.

For these reasons, we find that the conditions of competition with respect to Romania are

sufficiently different so as to provide a reasonable basis for us to decline to exercise our discretion to

cumulate subject imports from Romania with those from the other subject countries. We do not find

different conditions of competition sufficient to warrant our declining to exercise our discretion to

cumulate the subject imports from Belgium, Brazil, Finland, Germany, Poland, Spain, Sweden, Taiwan,

or the United Kingdom.

5. Conclusion

In sum, we determine that subject imports from Mexico are likely to have no discernible adverse

impact on the domestic industry in the event of revocation, and are therefore ineligible for cumulation. 

With respect to the remaining countries, we find that the no discernible adverse impact exception to

cumulation does not apply and that there would likely be a reasonable overlap of competition between

subject imports from each country and the domestic like product as well as among subject imports from

each country. We also determine, based on the existence of unique conditions of competition with

respect to Romania, not to exercise our discretion to cumulate subject imports from Romania with those

from any of the other subject countries.

Accordingly, for the reasons discussed above, we consider subject imports from Mexico

separately from all other subject imports, we consider subject imports from Romania separately from all

other subject imports, and we exercise our discretion to cumulate subject imports from Belgium, Brazil,

Finland, Germany, Poland, Spain, Sweden, Taiwan, and the United Kingdom.255
 256 Section 752(a)(6) of the Act states that “the Commission may consider the magnitude of the margin of

dumping” in making its determination in a five-year review. 19 U.S.C. § 1675a(a)(6). The statute defines the

“magnitude of the margin of dumping” to be used by the Commission in five-year reviews as “the dumping margin

or margins determined by the administering authority under section 1675a(c)(3) of this title.” 19 U.S.C.

§ 1677(35)(C)(iv); see also SAA at 887. In the final results of its second five-year reviews of the antidumping duty

orders on CTL plate, Commerce assigned the following likely margins. Belgium: Forges de Clabecq, S.A. 6.78

percent, Industeel 13.38 percent, all others 6.84 percent; Brazil: Usiminas/Cosipa 42.68 percent, all others 75.54

percent; Finland: Rautaruukki 40.36 percent, all others 40.36 percent; Germany: Dillinger 36.00 percent, all others

36.00 percent; Mexico: AHMSA 49.25 percent, all others 49.25 percent; Poland: country-wide 61.98 percent;

Romania: Metalexportimport, S.A. 75.04 percent, all others 75.04 percent; Spain: Ensidesa 105.61 percent, all

others 105.61 percent; Sweden: SSAB 24.23 percent, all others 24.23 percent; Taiwan: CSC 34.00 percent, all

others 34.00 percent; and United Kingdom: British Steel 109.22 percent, all others 109.22 percent. See, e.g.,

CR/PR at Table CTL-I-14. In the final results of its second five-year reviews of the countervailing duty orders on

CTL plate, Commerce assigned the following likely subsidization rates. Belgium: Cockerill 2.82 percent, Industeel

0.56 percent, all others 0.50 percent; Brazil: Usiminas 5.44 percent, Cosipa 48.64 percent, all others 23.10 percent;

Mexico: AHMSA 28.32 percent, all others 20.25 percent; Spain: country-wide 33.68 percent; Sweden: de minimis. 

See, e.g., CR/PR at Table CTL-I-15.

In addition, the statute provides that “if a countervailable subsidy is involved, the Commission shall

consider information regarding the nature of the countervailable subsidy and whether the subsidy is a subsidy

described in Article 3 or 6.1 of the Subsidies Agreement.” 19 U.S.C. § 1675a(6). In its unpublished Issues and

Decision Memoranda issued in these second reviews, Commerce described 19 programs with respect to CTL plate

from Belgium, and, with the exception of the “Promotion Brochure” and “Audio Visual Calling Card” programs,

these programs do not fall within the meaning of Article 3. Commerce described 5 programs with respect to CTL

plate from Brazil, none of which fall within the meaning of Article 3. Commerce described 11 programs with

respect to CTL plate from Mexico, 2 of which were found to be export subsidies as described in Article 3

(Bancomext Export Loans and PITEX Duty-Free Imports for Companies that Export). Commerce described 6

programs with respect to CTL plate from Spain and 7 programs with respect to CTL plate from Sweden, and none of

them fall within the meaning of Article 3. Commerce did not indicate that any of the programs involved Article 6.1

subsidies. See, e.g., CR at OVERVIEW-17 & nn.36-40; PR at OVERVIEW-10 & nn.36-40.

 257 We note that this timeframe is consistent with the period advocated by domestic interested parties. See, e.g.,

CTL Plate Hearing Tr. at 385 (Brightbill) (“We believe two years is the appropriate timeframe for looking at what is

reasonably foreseeable.”)

 258 We applied the legal standards discussed in section III above.

52

D. Likelihood of Continuation or Recurrence of Material Injury If the Antidumping

Duty Orders and Finding and Countervailing Duty Orders Are Revoked

1. In General

We applied the legal standards discussed in section III above.256 As a preliminary matter, in view

of the nature of this industry and market, for purposes of these reviews, and based on the facts on this

record, we have given significantly greater weight to developments likely to occur in the next two years

than to those pertaining to later dates, although we cite other information as appropriate.257

2. Conditions of Competition and Business Cycle258

a. The Original Investigations

In the 1993 original investigations, the Commission found that demand for CTL plate was

generally declining over the period of investigation, and about 44 percent of domestic shipments and

about 79 percent of imported CTL plate were sold to service centers. It found that service centers, which

purchased CTL plate from a number of sources, did not require extensive pre-sale certification
 259 See, e.g., USITC Pub. 2664 at 216-17. Conditions of competition were not separately discussed in the 1979

original determination concerning subject imports from Taiwan, which involved a regional industry.

 260 See, e.g., USITC Pub. 3664 at 23-25.

 261 See, e.g., CR/PR at Table C-1, Table C-2 (indicating that in 2005, 1.3 million short tons of micro-alloy CTL

plate were produced compared to 7.3 million short tons of non-alloy CTL plate, such that non-alloy CTL plate

constituted more than four-fifths of U.S. carbon steel plate production).

 262 See, e.g., CR at CTL-II-20; PR at CTL-II-13.

 263 See, e.g., CR at CTL-II-19; PR at CTL-II-12.

 264 See, e.g., CR at CTL-II-16; PR at CTL-II-10; Mittal’s Prehearing CTL Plate Br. at 43; Joint Respondents’

Prehearing CTL Plate Br. at 26; Caterpillar’s Prehearing CTL Plate Br. at 6.

53

procedures, and that virtually all CTL plate products were produced to ASTM standards in one of three

standardized commercial grades.259

b. The First Reviews

In the first reviews, the Commission found that demand in the U.S. market for CTL plate, which

generally parallels the U.S. economy, had increased since the original investigations. It found that CTL

plate products are used in industrial and agricultural equipment, construction, and transportation. It found

that several domestic mills had closed, and that the overall industry’s capacity increased as some

companies made the transition from conventional reversing mills to Steckel mills. It found that the

domestic industry had a high ratio of fixed to total costs such that it must produce large volumes to

operate profitably. It concluded that CTL plate is a commodity product sold primarily on the basis of

price, and increasingly to service centers, entities that had become more consolidated and more

sophisticated. The Commission also noted that there had been additional waves of imports from a

number of suppliers throughout the world that resulted in suspension agreements being signed with

China, Russia, South Africa, and Ukraine in 1997 and then antidumping and countervailing duty orders

being put in place in 2000 with respect to imports from France, India, Indonesia, Italy, Japan, and

Korea.260

c. The Current Proceedings

To the extent that non-alloy steel plate constitutes a substantial portion of the carbon CTL plate

produced in the United States,261 we find that the conditions of competition in the U.S. market are the

same whether or not the domestic like product is expanded to include micro-alloy products. We find the

following conditions of competition relevant to our determinations in these reviews.

(1) Demand

CTL plate often accounts for a relatively large percentage of the total cost of end-use products,

although the cost share varies widely depending on end use.262 While there are reported substitutes for

CTL plate, the potential for substitution is often limited by end use.263 All parties agree that demand for

CTL plate is derived from the demand for end-use applications.264 In terms of shipments in the U.S.

market in 2005 compiled from American Iron & Steel Institute (“AISI”) reporting companies, more than

half of shipments classified by AISI as CTL plate (54.1 percent) were for construction, 25.0 percent were

for steel service centers and distributors, 8.7 percent were for rail transportation, 6.1 percent were for
 265 See, e.g., CR at CTL-II-17; PR at CTL-II-11.

 266 According to information from the 1979 original investigation of subject imports from Taiwan, apparent U.S.

consumption declined from 10.0 million short tons in 1974 to 7.7 million short tons in 1975 and to 6.8 million short

tons in 1976 before increasing to 7.4 million short tons in 1977 and 8.6 million short tons in 1978. See, e.g., USITC

Pub. 970 at A-2. Due to changes in the composition of the domestic industry, differences in the identities of the

responding companies, and differences in the scope of the two investigations, these data are not directly comparable

with data from the 1993 original investigations. According to the data in the latter investigations, apparent U.S.

consumption declined from 5.6 million short tons in 1990 to 4.8 million short tons in 1991 before increasing to 5.0

million short tons in 1992. See, e.g., CR/PR at Table CTL-I-1. As of the time of the first reviews of these orders,

apparent U.S. consumption increased from 6.6 million short tons in 1997 to 8.2 million short tons in 1998 before

declining to 6.0 million short tons in 1999. See, e.g., CR/PR at Table CTL-I-1. Again, due to changes in the

composition of the domestic industry, differences in the number and types of responding companies (including the

response rate of bar mills), and especially the Commission’s decision to include service center processors in the

industry data in the first reviews, these data are not directly comparable.

 267 See, e.g., CR/PR at Table C-2. These data include shipments of micro-alloy CTL plate; although the

Commission did not expand the domestic like product to include micro-alloy CTL plate in the first reviews, it

acknowledged that some of the data it relied upon in those reviews contained micro-alloy shipments to the extent

that some domestic producers were unable to segregate their micro-alloy data from their non-alloy CTL plate data. 

See, e.g., USITC Pub. 3364 at 23 n.126. During the period of review, demand for non-alloy CTL plate, as measured

by apparent U.S. consumption declined from 6.8 million short tons in 2000 to 6.2 million short tons in 2001,

increased to 6.5 million short tons in 2002, declined to 6.4 million short tons in 2003 and then increased to 7.0

million short tons in 2004 and to 7.3 million short tons in 2005; demand in the first six months of 2006 (“interim

2006”) (4.4 million short tons) was also higher than in interim 2005 (3.6 million short tons). See, e.g., CR/PR at

Table C-2.

 268 See, e.g., CR at CTL-II-15; PR at CTL-II-10.

 269 See, e.g., CR at CTL-II-17; PR at CTL-II-11.

54

machinery, industrial equipment, and tools, and the remainder were for oil and gas, shipbuilding and

marine equipment, electrical and agricultural equipment, and other end-use markets.265

(a) U.S. Market

Since the original investigations, demand, as measured by apparent U.S. consumption (the sum of

subject and non-subject imports and the domestic industry’s U.S. shipments) has fluctuated.266 During the

current period of review, demand for carbon CTL plate declined from 7.7 million short tons in 2000 to

7.1 million short tons in 2001, increased to 7.5 million short tons in 2002, declined to 7.3 million short

tons in 2003 and then increased sharply to 8.3 million short tons in 2004 and to 8.6 million short tons in

2005; demand in the first six months of 2006 (“interim 2006”) (5.2 million short tons) was also much

higher than in interim 2005 (4.3 million short tons).267 Explanations offered for the increase in demand

during the period of review included the improved economy, increased investment, lower interest rates,

increased global consumption, increased shipbuilding, increased oil and gas exploration, increased use for

military applications, rebuilding activities after the hurricanes of 2005, and increased construction and

manufacturing activity.268 Thirteen of sixteen responding purchasers who are end users reported that the

demand for their firms’ final products that use CTL plate changed since 2000, with most citing increases

in demand for these final products. In identifying the major factors that contributed to the demand

changes, purchasers reported factors such as a growing U.S. economy, increased pipeline construction,

new ship designs, and expanded product lines.269

During this time of increasing demand in the U.S. market, raw material and energy costs

increased, and CTL plate prices also increased. Raw material costs vary depending on the production

process, with steel scrap playing a larger role in the raw material costs for electric arc furnace (“EAF”)
 270 See, e.g., CR at CTL-I-22; PR at CTL-I-19.

 271 See, e.g., CR at CTL-V-1; PR at CTL-V-1.

 272 See, e.g., CR at CTL-V-1; PR at CTL-V-1; CR/PR at Figure CTL-V-1.

 273 See, e.g., CR at CTL-V-1; PR at CTL-V-1.

 274 See, e.g., CR at CTL-V-1; PR at CTL-V-1.

 275 See, e.g., CR at CTL-V-1; PR at CTL-V-1 and V-2.

 276 See, e.g., CR at CTL-V-2; PR at CTL-V-2.

 277 See, e.g., IPSCO/Oregon’s Prehearing CTL Plate Br. at 24, 27, Exh. 3; Mittal’s Prehearing CTL Plate Br. at

43; Nucor’s Prehearing CTL Plate Br. at 30-32; CTL Plate Hearing Tr. at 46-47 (Tulloch), 52-53 (McFadden), 56

(Insetta), 74 (Ballou), 114 (McFadden), 137 (Insetta); IPSCO/Oregon’s Posthearing CTL Plate Br. at 9-13; Mittal’s

Posthearing CTL Plate Br. at 4-5 & n.13; Nucor’s Posthearing CTL Plate Br. at 10-12, App. 3 at 1-7.

 278 See, e.g., IPSCO/Oregon’s Prehearing CTL Plate Br. at 2, 27; Mittal’s Prehearing CTL Plate Br. at 29, 43-45;

CTL Plate Hearing Tr. at 37 (Schagrin), 46-48 (Tulloch), 57-58 (Insetta), 74 (Ballou), 78-79 (Ruane), 193-95

(Ruane); IPSCO/Oregon’s Posthearing CTL Plate Br. at 2-3, 9-13, Exh. 2; Mittal’s Posthearing CTL Plate Br. at 3-5;

Nucor’s Posthearing CTL Plate Br. at App. 3 at 1-7.

 279 See, e.g., Mittal’s Prehearing CTL Plate Br. at 29, 43-45; CTL Plate Hearing Tr. at 56 (Insetta), 112-13

(Tulloch), 114 (McFadden); IPSCO/Oregon’s Posthearing CTL Plate Br. at 3, 9-13; Nucor’s Posthearing CTL Plate

Br. at App. 3 at 1-7.

 280 See, e.g., CTL Plate Hearing Tr. at 52-53 (McFadden), 86-87 (Tulloch), 129 (Tulloch), 137 (Insetta); Mittal’s

Posthearing CTL Plate Br. at 6-7, Conf. Exh. 2; Nucor’s Posthearing CTL Plate Br. at App. 3 at 1-7.

55

mini-mills, for example.270 Regardless of the production methodology used, the cost of raw materials

(e.g., iron ore, coal, and steel scrap) and energy are important components of the total cost of producing

CTL plate.271 Prices in the United States of iron ore and coal rose over the period of review, with the

increase for iron ore occurring primarily in 2005 and 2006.272 The price of iron and steel scrap in the

United States decreased in 2000 and 2001 and then increased markedly.273 After a decrease in early 2005,

scrap prices then increased through mid-2006 and only fell slightly in late 2006.274 The prices of both

natural gas and electricity in the United States were higher in interim 2006 than in any of the full years

between 2000 and 2005, and the prices of both generally rose over the period of review.275 During the

period of review, all 19 responding U.S. producers reported increased CTL plate selling prices as a direct

result of higher raw material prices, and five producers reported implementing raw material surcharges.276

Domestic interested parties acknowledge that the industry’s demand forecasts have been positive

until recently, but assert that the recent increases in demand in the U.S. market are not likely to continue

and demand will decline or grow more slowly.277 They point to two ways in which there will be changes

in demand: (1) they expect declines in service center purchases while service centers work off

inventories; and (2) they project slowing or declines in demand for CTL plate by end users. Domestic

interested parties assert that there is little or no disagreement that service center inventories are

historically high and appear to be at their peak; they believe that an inventory draw-down, with its

accompanying rapid price declines, has begun and will continue to occur in the fourth quarter of 2006.278

They also project a slowing or decline in demand because of declining demand from end users.279 They

point to testimony that domestic producers will be idling equipment or limiting shifts in the fourth quarter

of 2006 due to softening demand as well as testimony by other domestic producers that their order books

are not being filled as quickly as was the case earlier in 2006.280

Record data, however, contradict these claims, and instead indicate that demand in the U.S.

market likely will continue to be strong for the reasonably foreseeable future. With respect to service

center inventories, the evidence shows that inventory draw-downs are a regular but temporary occurrence
 281 Respondent interested parties assert that the inventory data used by the domestic interested parties and

reproduced in the staff report reflect a large proportion of non-subject coiled plate inventories and that absolute

growth in inventory levels is not surprising in a growing market. In their view, inventory turnover rates measured by

months of shipments on hand are more instructive. See, e.g., Brazilian Respondents’ Posthearing CTL Plate Br. at 9

Exh. 1 at 1-14. We find that the service center data are a reliable depiction of the trend in plate inventories. We

have examined both inventory levels as well as inventory turnover. Although these data do include some nonsubject plate (e.g., plate in coils), they include only carbon plate. Additionally, plate in coils held by service centers,

unlike plate in coils held by fabricators or pipe mills, frequently is converted into CTL plate. See, e.g., CR at CTLIII-13 n.26; PR at III-9 n.26; CR/PR at Figure CTL-III-1. Indeed, as noted above, we include service centers that

process coiled hot-rolled plate into CTL plate in the domestic industry.

 282 Apparent U.S. consumption in 2005 was higher than in 2004, and apparent U.S. consumption in interim 2006

exceeded demand in interim 2005. See, e.g., CR/PR at Tables C-2, C-1. Likewise, although there was some

leveling off or small decrease in prices in the U.S. market in 2005, the data do not show the sort of dramatic price

declines that domestic interested parties suggest would have accompanied such inventory destocking. See, e.g., CR

at CTL-V-23; PR at CTL-V-15; CR/PR at Figures CTL-V-3 to CTL-V-7, Tables CTL-V-1 to CTL-V-5. Moreover,

the record demonstrates that the 2005 inventory correction took only a few months, after which time U.S. producers’

production, shipments, and prices quickly regained and exceeded their pre-correction levels. See, e.g., CR/PR at

Tables C-2, C-1, CTL-V-1 to CTL-V-5.

 283 See, e.g., Brazilian Respondents’ Posthearing CTL Plate Br. at 9-10, Exh. 1 at 1-14; CTL Plate Hearing Tr. at

113 (Tulloch), 135 (Tulloch). 

 284 IPSCO reported that demand growth is at a high level now and will continue at that level or perhaps a slightly

lower level, particularly for energy, transportation, and construction equipment. See, e.g., CTL Plate Hearing Tr. at

111-13 (Tulloch). Oregon reported that it expects the large diameter pipe market to be strong over the next year and

a half, although it expects overall demand from service centers will be down in 2007. See, e.g., CTL Plate Hearing

Tr. at 114-15 (Montross). Mittal reported that it expects 2007 to be about the same as 2006 for CTL plate used by

OEMs and fabricators. See, e.g., CTL Plate Hearing Tr. at 116 (Insetta). We recognize that demand associated with

the recently enacted $280 billion 2005 Transportation Equity Act may not be as great as joint respondent interested

parties argued. Compare, e.g., Corus’ Posthearing CTL Plate Br. at App. H at 3-4 and exhibits with, e.g., CTL Plate

Hearing Tr. at 116-17 (Insetta), 170-71 (Montross), 171-72 (Insetta), 172 (Price); Mittal’s Posthearing CTL Plate Br.

at Answers to Commissioner Koplan’s Questions at 13-16; Nucor’s Posthearing CTL Plate Br. at App. 3 at 5-7.

 285 Reports from earlier in 2006 suggested that the U.S. market for CTL plate was buoyed by bridge and highway

construction, heavy equipment production, barge building, shipbuilding, and the continued strength of the energy

market. Indications at the time were that the CTL plate market would remain strong throughout 2006 and potentially

beyond. See, e.g., CR at CTL-II-16 n.26; PR at CTL-II-10 n.26 (citing “Carbon plate prices firm as demand holds

steady,” American Metal Market, June 14, 2006, found at http://amm.com/2006-06-13 13-48-34.html, retrieved

September 1, 2006). More recently, IPSCO reported that strong demand conditions are expected to extend into

2007, not only from the energy sector, but also from the production of barges, ships, and railcars. See, e.g., CR at

CTL-II-16; PR at CTL-II-10 (citing “Strong North American Plate Demand Expected to Continue,” Steel Business

Briefing, October 11, 2006 in Brazilian Posthearing CTL Plate Br. at Exh. 2). Other published reports also indicate

that end user demand for CTL plate in the United States continues to be strong, especially from the oil and gas

industry, even as sheet demand has weakened. See, e.g., CR at CTL-IV-110; PR at CTL-IV-44.

 286 *** publishes data on historical, current, and forecast consumption of reversing mill plate. These data are

understated to the extent that they do not include plate cut from coils produced on a strip mill or Steckel mill plate,

(continued...)

56

in this industry.281 In the recent 2005 reviews of CTL plate orders involving other countries, domestic

interested parties also pointed to the anticipated effects of an inventory overhang, but our data in these

reviews do not show any meaningful change in the market dynamics after that inventory correction.282

Indeed, in their interviews with industry press, domestic producers anticipate that any effects of the

current inventory adjustment will be temporary as well.283 Demand from end users is also expected to

increase in the reasonably foreseeable future, as illustrated in domestic producers’ hearing testimony,284

anecdotal information collected in these reviews,285 forecasts by industry observers286 as well as
 286 (...continued)

but they are overstated due to the fact that they do not distinguish between carbon and non-carbon steel. 

Nevertheless, these data are consistent with other sources indicating an expectation of continued demand. See, e.g.,

CR at CTL-IV-97 & n.175; PR at CTL-IV-40 & n.175. According to ***, consumption of reversing mill plate in

North America (of which the U.S. market is a substantial subset) was as follows between 1994 and 2005: ***. ***. 

See, e.g., CR/PR at Table CTL-IV-68.

 287 For example, in a September 2006 presentation for the Metals Service Center Institute Economic Summit

Forecast 2007, domestic producers anticipated that ***. See, e.g., CR at CTL-II-16, CTL-III-8 n.19; PR at CTL-II10; IPSCO/Oregon’s Posthearing CTL Plate Br. at Exh. 5; see also, e.g., German Respondents’ Prehearing CTL

Plate Br. at 11-14 (citing MEPS International Steel Review, ***, SBB Global Market Outlook, Welded Steel Tube &

Pipe Monthly, and John Ferriola, Executive Vice President of the Sheet Mill Group of Nucor in an American Metal

Market article); Caterpillar’s Prehearing CTL Plate Br. at 2, 6-7; Joint Respondents’ Prehearing CTL Plate Br. at 27-

29 (citing Ferriola as well as IPSCO’s executive vice president and chief commercial officer); Emergency

Committee for American Trade’s October 30, 2006, Written Submission at 3-4.

 288 See, e.g., IPSCO/Oregon’s Prehearing CTL Plate Br. at 24, 27, Exh. 3; Mittal’s Prehearing CTL Plate Br. at

29-30, 43-45; IPSCO/Oregon’s Posthearing CTL Plate Br. at 2-3, 9-13, A-5 to A-6, Exhs. 2, 5. We give little weight

to the economic modeling prepared by domestic interested parties during these proceedings, which, inter alia, do not

take into consideration each of the statutory criteria that govern these proceedings. See, e.g., Brazilian Respondents’

Posthearing CTL Plate Br. at Exh. 1 at 23-29; see also, e.g., Certain Frozen or Canned Warmwater Shrimp and

Prawns from Brazil, China, Ecuador, India, Thailand, and Vietnam, Invs. Nos. 731-TA-1063 to 1068 (Final), USITC

Pub. 3748 at n.246 (Jan. 2005).

 289 See, e.g., CR/PR at Table CTL-IV-67 (reproducing *** data indicating that global reversing mill plate

consumption has increased from *** short tons in 2000 to *** short tons in 2005). As noted above, although these

data pertain to reversing mill plate consumption and are in some respects both over- and under-inclusive, we find the

trends to be consistent with other record data. See also, e.g., Joint Respondents’ Prehearing CTL Plate Br. at 35-36.

 290 See, e.g., CR at CTL-II-21; PR at CTL-II-13.

 291 See, e.g., CR at CTL-IV-113 to CTL-IV-114; PR at CTL-IV-46 to CTL-IV-47; CR/PR at Tables CTL-IV-68,

CTL-IV-69; German Respondents’ Prehearing CTL Plate Br. at 17-20.

57

predictions made by industry officials.287 Importantly, projections of likely increased demand from CTL

plate end users are not limited to a single industry but encompass a wide variety of end user industries,

each of which is likely to have strong demand for CTL plate in the reasonably foreseeable future. Thus,

the contrary arguments made by the domestic industry in these proceedings288 simply do not override the

weight of the evidence indicating likely continued strong and growing demand in the U.S. market in the

reasonably foreseeable future.

(b) Global Market

Consistent with published data on global demand,289 ten producers, 7 importers, and 21

purchasers reported that demand outside the United States also increased over the period of review. They

cited factors such as rapidly increasing demand in China and other industrializing countries in Asia and

Latin America; the economic recovery in Japan; increased shipbuilding, mining, and oil and gas

exploration; increased investment; improvements to infrastructure; the relocation of manufacturing

activities outside of the United States; and global economic growth as reasons for the increase.290 In

addition, the European Union has grown as a market since 2000 with the addition of thirteen new member

states in 2004 and 2005 and remains a substantial non-U.S. market for exports.291 The record also
 292 Demand for CTL plate is expected to grow steadily through 2010 in China, the Pacific Basin, and excommunist countries, as defined by ***. See, e.g., CR at CTL-II-21 n.29; PR at CTL-II-13 (citing IPSCO/Oregon’s

Posthearing CTL Plate Br. at Exh. 10). *** has also forecast continued demand growth in China, East and South

East Asia (excluding China), Eastern Europe and Latin America in 2007. See, e.g., CR/PR at Table CTL-IV-69. 

Consistent with other commentators, see, e.g., German Respondents’ Prehearing CTL Plate Br. at 14-17, *** has

also forecast continued increases in CTL plate demand in Europe as compared to the current level. See, e.g., CR/PR

at Table CTL-IV-69.

 293 They were Armco Steel Corp., Bethlehem Steel Corp., Gilmore Steel Corp., Inland Steel Co., Interlake, Inc.,

Jones & Laughlin Steel Corp., Kaiser Steel Corp., Lukens Steel Co., Phoenix Steel Corp., Republic Steel Corp., U.S.

Steel Corp., and Youngstown Sheet & Tube Co. See, e.g., USITC Pub. 970 at A-5.

 294 They were ***. See, e.g., Mem. INV-Q-115 at Table 12 (Jul. 20, 1993), as amended by Mem. INV-Q-116

(July 20, 1993); INV-Q-118 (July 21, 1993), INV-Q-119 (July 21, 1993), INV-Q-121 (July 22, 1993), INV-Q-122

(July 26, 1993); INV-Q-123 (July 27, 1993). The Commission did not include service centers in the domestic

industry in either the 1979 or 1993 original determinations.

 295 The mills were Bethlehem, California, Citisteel, Denro, Geneva, Gulf States, IPSCO, LeTourneau, National,

North Star, Oregon, Tuscaloosa, and USX, and the processors included Cargill, Friedman, JIT, Olympic, O’Neal,

Paper Cal, and Primary. See, e.g., Mem. INV-X-221 at OVERVIEW Table 2 (Oct. 18, 2000).

 296 They include fourteen active U.S. mills (Arkansas Steel, Claymont, CMC Steel Alabama, CSI, Gerdau

Ameristeel, IPSCO, Jindal, Kentucky Electric, LeTourneau, Mittal, Nucor, Oregon, U.S. Steel, and WCI) and one

closed mill (Geneva) from whom the Commission received data as well as ten service centers from whom it also

received questionnaire responses (American Steel, Cargill, Feralloy, Friedman, IPSCO, Olympic, PDM, Primary,

Robinson, and Steel Warehouse). See, e.g., CR at CTL-I-33; PR at CTL-I-28; CR/PR at Table CTL-I-21.

 297 See, e.g., Mittal’s Prehearing CTL Plate Br. at 29-30, 56-57; Nucor’s Posthearing CTL Plate Br. at 8; German

Respondents’ CTL Plate Br. at App. 1.

 298 Geneva Steel filed for bankruptcy in February 1999, emerged from bankruptcy as Geneva Steel Holdings in

January 2001, shut down its operations in December 2001, and filed for bankruptcy again in January 2002. 

Geneva’s production assets were ultimately sold to a Chinese firm, Qindao Iron & Steel Co. Gulf States Steel also

filed for bankruptcy and in 2000, while in bankruptcy proceedings, closed its mill and liquidated the company; the

new owner announced plans to develop the property into an industrial park and sell the equipment to a Chinese

company. LTV also filed for bankruptcy in 2000, National Steel filed in 2002, and WCI entered chapter 11

(continued...)

58

indicates that global demand is likely to continue to be strong and growing, including in the markets

primarily served by subject producers.292

(2) Supply

(a) U.S. Market

Since the original investigations, there have been a number of changes in the identity of the

suppliers to the U.S. market, although the U.S. market continues to be supplied primarily from the U.S.

industry’s shipments as well as by smaller volumes of subject and non-subject imports. Twelve U.S.

mills were the primary sources of supply to the U.S. market in 1978,293 and there were likewise twelve

U.S. mills supplying the U.S. market in 1992, although some of the primary producers had changed.294

As of the first reviews of these orders, after additional changes to the players, there were thirteen U.S.

mills and seven processors supplying the U.S. market.295 During the period of review, there were fourteen

U.S. mills and ten processors that accounted for the domestic industry’s shipments,296 and changes in the

identity of the producers (particularly of the mills) continued.297

Several U.S. mills filed for bankruptcy during the period of review, and several shuttered

production capacity.298 In addition, the CTL plate assets of several U.S. mills were purchased over the
 298 (...continued)

bankruptcy protection in 2003. Newport ceased producing its own hot-rolled steel for pipe production in 2001. 

Kentucky Electric Steel filed for chapter 11 bankruptcy protection in 2003, and a newly formed entity (KES

Acquisition Co. LLC) purchased these assets and restarted production in early 2004. In 2004, Oregon Steel idled its

Napa pipe mill to focus on CTL plate production. See, e.g., CR at CTL-III-1, CTL-III-3 to CTL-III-4; PR at CTLIII-1, III-3 to CTL-III-4; CR/PR at Table CTL-III-1.

 299 See, e.g., CR/PR at Table III-1; German Respondents’ Prehearing CTL Plate Br. at App. 1. Neither Acme nor

LTV produced CTL plate in more than minimal quantities. See, e.g., CR at Table CTL-I-1.

 300 See, e.g., CR/PR at Table CTL-I-1.

 301 See, e.g., CR/PR at Table CTL-III-1; German Respondents’ Prehearing CTL Plate Br. at App. 1.

 302 See, e.g., CR at III-6; PR at CTL-III-5.

 303 See, e.g., CR/PR at Table CTL-III-1; Corus’ Prehearing CTL Plate Br. at 8, Exh. 5.

 304 See, e.g., CR/PR at Table CTL-III-1.

 305 See, e.g., CR/PR at Table CTL-III-1; German Respondents’ Prehearing CTL Plate Br. at 3, App. 3.

 306 See, e.g., German Respondents’ Prehearing CTL Plate Br. at 3, App. 4; Mittal’s Posthearing CTL Plate Br. at

Answers to Vice Chairman Aranoff’s Questions at 2-4.

 307 See, e.g., CR at CTL-III-5 to CTL-III-6; PR at CTL-III-4 to CTL-III-5.

 308 See, e.g., CR/PR at Table CTL-III-1; German Respondents’ Prehearing CTL Plate Br. at 3.

 309 See, e.g., CR/PR at Table CTL-III-1; German Respondents’ Prehearing CTL Plate Br. at 3-4.

 310 By 2005, IPSCO and Nucor together accounted for *** percent of domestic production of non-alloy CTL plate

compared to *** percent for Mittal. Mittal does account, however, for ***. See, e.g., CR at CTL-I-33 to I-34, CTLIII-3 n.4; PR at CTL-I-28, CTL-III-3; CR/PR at Table CTL-I-21; see also, e.g., Joint Respondents’ Prehearing CTL

Plate Br. at 4-14.

59

course of the period of review. For example, in April and May 2002, International Steel Group (“ISG”)

acquired many of the assets of Acme Steel and LTV.299 In 2003, U.S. Steel acquired the integrated

steelmaking assets of National Steel.300 In May 2003, ISG acquired most of the assets of bankrupt, but

active, Bethlehem Steel Corporation, including the facilities at Burns Harbor, Indiana; Sparrows Point,

Maryland; and Coatesville and Conshohocken, Pennsylvania.301 ISG exchanged its pickle line at Indiana

Harbor Works for U.S. Steel’s Gary Works’ plate mill.302 In 2004, Nucor purchased substantially all of

the steelmaking assets of Corus’ Tuscaloosa, Alabama facility.303 Cargill, Inc., the parent company of

North Star, sold the fixed assets and working capital of North Star to Gerdau Ameristeel.304 In April

2005, ISG was merged into Mittal Steel Company, N.V. (formerly Ispat International N.V.), and the U.S.

CTL plate facilities of ISG are now referred to as Mittal Steel USA.305 In June 2006, Mittal Steel

Company, N.V. announced its intention to merge with Arcelor S.A. to form Arcelor Mittal.306 Finally,

two producers opened greenfield EAF mini-mills in the United States during the period of review that

added a total of *** short tons of new capacity to the domestic industry.307 Nucor opened a new plate

mill in Hertford County, North Carolina in 2000.308 IPSCO opened a new plate mill in Mobile County,

Alabama in 2001.309

As a result of these changes, the face of the U.S. industry has evolved in two fundamental ways: 

(1) the rising role of EAF mini-mill production facilities and the different cost structures that they

involve; and (2) the consolidation of several of the integrated producers under a single company,

Mittal.310 While new entrants such as Nucor do not have the same legacy costs as some of the integrated

mills, even the integrated mills have shed some of their legacy costs through the bankruptcy process and

have reduced their propensity to take on such costs in the future by entering into new and innovative labor
 311 See, e.g., CR/PR at Tables C-2, C-1 (showing declines of *** in unit labor costs between 2000 and 2005);

German Respondents’ Prehearing CTL Plate Br. at 2-3, App. 1 (citing ISG’s Annual Report at 2 (2003)). Mittal’s

predecessor, ISG, negotiated revised labor agreements with its purchase of Bethlehem Steel. In addition to a

reduction in salaries and healthcare benefits, Bethlehem’s unfunded $3.7 billion pension plan was transferred to the

Pension Benefit Guarantee Corporation. ISG’s labor agreement with the United Steelworkers of America, created in

2004 and in effect until 2008, established a trust to fund retiree, health, and welfare benefits. Contributions to the

trust are based on quarterly profits and overtime hours worked. See, e.g., CR at CTL-III-7; PR at CTL-III-5;

Mittal’s Prehearing CTL Plate Br. at 57.

 312 See, e.g., CR/PR at Tables C-2, C-1 (showing large increases in productivity notwithstanding declines in the

total number of production and related workers (PRWs) employed by the U.S. industry).

 313 For example, although the former U.S. Steel plate mill facility at Gary Works was shut down, the resumption

of production at the 110 inch mill at Burns Harbor, which had been idle since 2000, effectively replaced the capacity

lost by shutting down the Gary Works facility and increased efficiency by producing closer to the source of the

slabs. See, e.g., CR at CTL-III-6; PR at CTL-III-4; CR/PR at Table CTL-III-1.

 314 See, e.g., Nucor’s Posthearing CTL Plate Br. at App. 7 at 2.

 315 Domestic interested parties point out that there has been some consolidation among service centers since the

original investigations. They assert that service centers have increased their geographic presence and play a larger

role in distributing product through the U.S. market. While we agree that the service centers, whose role has

increased over the years, are “independent” of the U.S. mills, domestic interested parties overlook that, by definition

in these reviews, the domestic industry includes service centers that produce CTL plate. Moreover, any additional

pricing power that service centers may have gained through consolidation has apparently had little impact on

restraining prices in the U.S. market during the period of review. See, e.g., Brazilian Respondents’ Posthearing CTL

Plate Br. at 11-12.

 316 See, e.g., CR at CTL-III-8; PR at CTL-III-6.

 317 See, e.g., CR at CTL-IV-5; PR at CTL-IV-5; CR/PR at Tables C-2, C-1.

 318 See, e.g., CR/PR at Tables C-2, C-1.

 319 See, e.g., CR/PR at Tables C-2, C-1. Because the volume of subject imports from Mexico was so small over

the period of review, including Mexico does not change these trends. See, e.g., CR/PR at Table C-1. Indeed,

combined market share for the eleven subject countries fluctuated over the period of review, largely as a function of

the volume of subject imports from Romania, but peaked at 2.1 percent in 2004. See, e.g., CR at Table C-1.

60

agreements, thereby reducing both fixed costs and direct labor costs.311 Changes in the domestic industry

have also contributed to increases in productivity312 as well as better rationalization of production

capacity.313 Domestic producer Nucor asserts that additional industry improvements of the kind that

occurred over the period of review (such as the entry of EAF mini-mills and the shedding of some of the

integrated producers’ legacy costs) would not be expected during the reasonably foreseeable future.314

Nevertheless, going forward the U.S. industry will continue to benefit from significant events such as

these. The removal of some legacy costs has reduced the U.S. industry’s fixed costs and gives it more

flexibility when setting production levels in the face of rising variable costs (such as rising raw material

costs). The consolidation of some of the U.S. industry’s production assets will likely also make it easier

to re-calibrate production in response to changes in demand in order to maintain prices.315 For example,

in response to perceived inventory oversupply at the service centers, rather than continuing their

production operations at full capacity as they would have at the time of the original investigations, U.S.

producers recently opted to conduct planned maintenance outages earlier than scheduled.316

In addition to shipments from U.S. producers, there were also subject and non-subject imports

(particularly from Canada and Korea) supplying the U.S. market during the period of review.317 The

domestic industry’s share of apparent U.S. consumption fluctuated over the period of review, but was

always at least 89 percent.318 Market share for the nine cumulated subject countries also fluctuated over

the period of review, but never accounted for more than one percent of apparent U.S. consumption.319
 320 See, e.g., CR/PR at Tables C-2, C-1.

 321 During the period of review, qualified U.S. producers of CTL plate were eligible to receive disbursements

from the U.S. Customs and Border Protection under the Continued Dumping and Subsidy Offset Act of 2000, also

known as the Byrd Amendment (19 U.S.C. § 1675(c)) related to the orders under review. See, e.g., CR at CTL-I-17;

PR at CTL-I-16; CR/PR at Tables CTL-16, CTL-17.

 322 See, e.g., CR/PR at Table OVERVIEW-3.

 323 Safeguard measures did not apply to CTL plate imports from Mexico, Poland, or Romania. See, e.g., CR at

OVERVIEW-14 at n.30; PR at OVERVIEW-11 at n.30.

 324 The President also instructed the Secretary of the Treasury and the Secretary of Commerce to establish a

system of import licensing to facilitate the monitoring of imports of certain steel products. Import licensing

measures remained in place through March 21, 2005, at which time modified measures, which remain in place, were

instituted. See, e.g., CR at OVERVIEW-12 to OVERVIEW-15; PR at OVERVIEW-10 to OVERVIEW-12.

 325 They included the consolidation of the domestic industry; the U.S. safeguard measures on steel that increased

duties on CTL plate between March 2002 and December 2003; increased U.S. capacity; bankruptcies, shutdowns,

outages, or consolidations of some U.S. production facilities; increased energy and transportation costs; increased

imports from non-subject countries; increased production and demand in China and India; and the U.S. military’s

involvement in Iraq. See, e.g., CR at CTL-II-4; PR at CTL-II-3; see also, e.g., Caterpillar’s Prehearing CTL Plate

Br. at 7-8; Caterpillar’s Posthearing Submission at 1-3; Brazilian Respondents’ Posthearing CTL Plate Br. at 10-11.

 326 See, e.g., CR at CTL-II-5; PR at CTL-II-4. *** reported that in 2003 through 2005, there was limited heattreatment material available, and *** reported that Mittal had customers on allocation in 2005 for thick plate. See,

e.g., CR at CTL-II-5; PR at II-4.

 327 See, e.g., CR at CTL-II-5 to CTL-II-6; PR at CTL-II-4. Mittal’s Sparrows Point blast furnace was temporarily

idled in June 2006 due to an electrical storm, but is now fully operational. Its Conshohocken plate mill was

temporarily idled as a result of a motor failure, but became operational again in ***. On October 24, 2006, one of

Mittal’s Burns Harbor blast furnaces was idled due to a mishap. The blast furnace returned to planned levels of

(continued...)

61

Non-subject import volumes also fluctuated over the period of review, reaching a period high in interim

2006.320

During the period of review, there were a number of trade remedy measures in place that may

have contributed to fluctuations in import levels in the U.S. market. In addition to the antidumping and

countervailing duty orders and antidumping duty finding in place concerning subject imports,321 during at

least some if not all of the period of review there were also antidumping duty orders or suspension

agreements in effect with respect to CTL plate imports from eleven other countries.322 Moreover,

subsequent to the first reviews of these orders, in response to a request from the Office of the United

States Trade Representative and a resolution adopted by the Committee on Finance of the U.S. Senate, the

Commission conducted an investigation under section 201 of the Trade Act of 1974 of imports of certain

steel products, including CTL plate. The Commission reached, inter alia, an affirmative determination

with respect to certain flat-rolled steel including CTL plate. The President subsequently implemented

corresponding safeguard measures,323 including an additional tariff of 30 percent ad valorem on imports

effective March 20, 2002, that was reduced to 24 percent on March 20, 2003, and ultimately terminated

by the President on December 4, 2003, after the Commission had conducted a mid-term review of the

measures.324

Questionnaire respondents reported a number of factors that affected the availability of CTL plate

in the U.S. market since 2000.325 Twenty-five purchasers reported that there had been problems with

supply, with most reporting that domestic mills had placed them on allocation or controlled order entry

from early 2004 to early-to-mid 2005.326 Four of the 19 responding producers and 5 of the 16 responding

importers reported having refused, declined, or been unable to supply CTL plate since 2000. *** reported

limiting orders from new accounts, reserving space for regular customers, concentrating on contractual

and local accounts, or closing order books beginning in 2004.327 Six purchasers reported being placed on
 327 (...continued)

operation on ***. See, e.g., CR at CTL-III-6 to CTL-III-7; PR at CTL-III-5 to CTL-III-6.

 328 See, e.g., CR at CTL-II-6 n.7; PR at CTL-II-4 n.7.

 329 Five purchasers reported that domestic mills had placed them on allocation or controlled order entry in 2006,

and another purchaser reported that supply has been tight in 2006. See, e.g., CR at CTL-II-5; PR at CTL-II-4;

Brazilian Respondents’ Posthearing CTL Plate Br. at 10-11.

 330 See, e.g., CR/PR at Table OVERVIEW-3.

 331 See, e.g., CR/PR at Tables C-2, C-1. We note that increases in demand in the U.S. market over the period of

review were not fully matched by an increase in U.S. producers’ shipments. The U.S. industry’s CTL plate

production capacity increased by 7.0 percent between 2000 and 2005, whereas the overall increase in apparent U.S.

consumption was 11.2 percent. See, e.g., CR/PR at Tables CTL-I-1, C-2. In the higher growth period from 2003 to

2005 (when the increase in apparent U.S. consumption was 18.2 percent), the U.S. industry’s production capacity

actually declined by 3.2 percent. Although demand was 20.3 percent higher in interim 2005 than in interim 2006,

the U.S. industry’s production capacity was only 3.4 percent higher in the latter interim period. See, e.g., CR/PR at

Tables CTL-I-1, C-2; see also, e.g., Joint Respondents’ Prehearing CTL Plate Br. at 29-30.

 332 See, e.g., CR at CTL-III-7 to CTL-III-8; PR at CTL-III-5 to CTL-III-6; Joint Respondents’ Prehearing CTL

Plate Br. at 29-35. *** also notes no changes to forecasted reversing mill or Steckel mill capacity for 2006-09. See,

e.g., ***. Respondent interested parties also point out that additional U.S. production capacity may be allocated to

specific end users as the result of recent acquisitions by domestic producers. See, e.g., Brazilian Respondents’

Posthearing CTL Plate Br. at 10-11 (citing, e.g., IPSCO’s acquisition of major CTL plate consumers that will likely

tie up more supply).

 333 See, e.g., IPSCO/Oregon’s Prehearing CTL Plate Br. at 1; Mittal’s Prehearing CTL Plate Br. at 29-42, App. 5;

Nucor’s Prehearing CTL Plate Br. at 2, 8-29; Nucor’s Posthearing CTL Plate Br. at 12-14, App. 2; Mittal’s

Posthearing CTL Plate Br. at 7-10, Exh. Hillman at 16-17, Conf. Exh. 3 (containing ***).

 334 According to ***, reversing mill plate consumption in China grew from *** in 1994 to *** in 1999, an

increase of *** percent. See, e.g., Nucor’s Posthearing CTL Plate Br. at App. 2. Consumption in China continued

to grow, increasing from *** in 2000 to an expected *** in 2005, an increase of *** percent. See, e.g., Nucor’s

Posthearing CTL Plate Br. at App. 2. China’s CTL plate production is projected to exceed its consumption by ***

metric tons in 2006, compared to estimated excess production ranging from *** to *** metric tons annually during

2007 through 2010. See, e.g., Nucor’s Posthearing CTL Plate Br. at App. 2.

 335 See, e.g., Nucor’s Prehearing CTL Plate Br. at 8-10.

62

allocation or having problems obtaining CTL plate from ***, but in its producer questionnaire response,

*** reported that it was not unable and did not refuse or decline to supply CTL plate since 2000.328 The

record indicates that supply continued to be tight into 2006, especially for specific products or grades.329

With respect to likely supply in the U.S. market in the reasonably foreseeable future, antidumping

duty orders or suspension agreements remain in place on CTL plate imports into the U.S. market from

China, India, Indonesia, Italy, Japan, Korea, Russia, and the Ukraine.330 The U.S. industry’s average

production capacity fluctuated over the period of review as production facilities were closed, rationalized,

and as the greenfield EAF mini-mills ramped up production.331 No new additions to the U.S. industry’s

production capacity have been reported for the reasonably foreseeable future.332

(b) Global Supply

Domestic interested parties forecast large expansions in global capacity, particularly in China,

and project a growing imbalance between supply and demand.333 According to record data, demand from

China increased substantially in recent years334 and contributed to increased prices both globally and in

the U.S. market.335 At least initially, much of the increased demand was reportedly met by CTL plate

imported into China from other sources. As Chinese producers continued to increase their production
 336 See, e.g., Nucor’s Posthearing CTL Plate Br. at App. 2.

 337 According to ***, Chinese reversing mill plate production increased from *** tons in 2000 to *** tons in

2006, an increase of *** percent, but is projected to increase from *** in 2006 to *** tons in 2008, an increase of

only *** percent. See, e.g., Nucor’s Posthearing CTL Plate Br. at App. 2.

 338 Most CTL plate in the United States is produced from cast slabs, although ingots may be used to produce

thicker plates since continuous cast slabs of sufficient thickness are not available. See, e.g., CR at CTL-I-23; PR at

CTL-I-20.

 339 Reversing mills produce plate ranging from 0.187 to 20 inches (4.75 to 508 mm) in thickness and from 48 to

154 inches (1,219 to 3,912 mm) in width. For much longer or thinner plates, specialized reversing plate mills called

Steckel mills typically produce plate that ranges from 0.187 to 0.750 inches (4.75 to 19.1 mm) in thickness and 48 to

96 inches (1,219 to 2,438 mm) in width, although installed equipment can produce wider plate. Hot-strip mills that

primarily produce hot-rolled sheet may also be used to produce plate up to 72 inches wide and between threesixteenths and one-half inch in thickness. Where narrow widths are needed, such as for machine parts, wide flat bars

from bar mills might be preferred. See, e.g., CR at CTL-I-23 to CTL-I-24, CTL-I-26; PR at CTL-I-20 to CTL-I-26.

 340 Because of its capability to cross roll, a reversing mill is somewhat flexible with regard to the slab width used

to produce a given plate width. Steckel mills and continuous hot-strip mills can only use slabs slightly wider than

the width of the plate to be produced, but have the advantage of being able to roll longer, heavier slabs than could be

used on a reversing plate mill. Because of its generally thicker dimensions, plate from a reversing mill is preferred

for welded load-bearing and structural applications, such as bridgework; machine parts (e.g., the body of the

machine or its frame); transmission towers and light poles; buildings; mobile equipment (e.g., cranes, bulldozers,

scrapers, and other tracked or self-propelled machinery); and heavy transportation equipment, such as railroad cars

(especially tanker cars) and oceangoing ships. Certain end users, such as those that burn out parts from plate,

concerned about “coil set memory” (the possibility that the edges of plate cut from coils will curl on heating) may

prefer plate from a reversing mill. See, e.g., CR at CTL-I-24; PR at CTL-I-20 to CTL-I-21. Processors generally do

not have the capability of producing thicker plate (including plate that is over 1 inch in thickness), wide plate, or

plate with special chemistries. See, e.g., CR at CTL-II-7; PR at CTL-II-5.

 341 See, e.g., CR at CTL-II-1; PR at CTL-II-1.

 342 See, e.g., CR at CTL-II-1; PR at CTL-II-1.

63

capacity, by approximately 2005, China became a net exporter of CTL plate.336 Although there has been

a large increase in Chinese production over the period of review, future increases in Chinese production

are not forecast to be anywhere near as large, and the volume of China’s net CTL plate exports is not

expected to grow much beyond the levels seen in 2006.337 Moreover, as discussed in more detail below,

record data do not show any significant decline in prices in either the U.S. or global markets associated

with the change in China’s status from a net importer to a net exporter in 2005 or the increase in its

production relative to consumption in 2006.

(3) Substitutability

There are some differences in CTL plate depending on the production methodologies used, but

also considerable overlap. For example, there may be differences associated with the choice of

semifinished product inputs,338 the width ranges of the machines used,339 and the limitations on product

use associated with the underlying production process.340 CTL plate may be produced in a variety of

grades and is used in a variety of applications, such as the manufacture of storage tanks, heavy machinery

and machinery parts, ships and barges, agriculture and construction equipment, and general load-bearing

structures.341 Some grades of CTL plate have superior strength and performance characteristics and

typically are made to order for customers seeking specific properties, such as improved malleability,

hardness or abrasion resistance, impact resistance or toughness, higher strength, and ease in machining

and welding.342 These particular properties are achieved by chemically refining the steel by increasing or

decreasing specific elements, and by accurate temperature control while hot rolling or heat treating the
 343 See, e.g., CR at CTL-II-1; PR at CTL-II-1.

 344 When asked to list the three most important factors considered when choosing a supplier, price and quality

were the most commonly cited factors overall; 12 of 38 responding purchasers reported that quality was the most

important factor, and 11 reported that price was the most important factor. See, e.g., CR at CTL-II-23-II-24; PR at

CTL-II-15. Nineteen of 37 purchasers reported that they “always” or “usually” purchased the lowest priced CTL

plate. See, e.g., CR at CTL-II-24; PR at CTL-II-16.

 345 A majority of purchasers reported that country of origin was rarely or never a factor in purchasing decisions. 

See, e.g., CR at CTL-II-29 to CTL-II-30; PR at CTL-II-20. Twelve purchasers reported that certain grades, types, or

sizes of CTL plate are available from only a single source. *** reported that abrasion-resistant material is only

available from Sweden, Germany, and Canada, while *** reported that Germany has a patented material with a

unique composition. See, e.g., CR at CTL-II-25; PR at CTL-II-16.

 346 Nine of the seventeen responding producers reporting selling at least 90 percent of their CTL plate produced to

order with lead times ranging from three to fifteen weeks; five producers reporting selling at least 70 percent of their

CTL plate from inventory, with lead times from two days to one week; and the other three producers having a

relatively even split between selling from inventory and producing to order. See, e.g., CR at CTL-II-31; PR at CTLII-21. All seven responding importers reported selling at least 95 percent of their CTL plate produced to order, with

lead times ranging from three to six months. See, e.g., CR at CTL-II-31; PR at CTL-II-21.

 347 Commissioner Koplan and Commissioner Lane find subject imports from Belgium, Brazil, Finland, Germany,

Mexico, Poland, Romania, Spain, Sweden, Taiwan, and the United Kingdom to be generally substitutable for one

another and for the domestic like product.

 348 See, e.g., CR at CTL-II-16; PR at CTL-II-10; Mittal’s Prehearing CTL Plate Br. at 43; Joint Respondents’

Prehearing CTL Plate Br. at 26; Caterpillar’s Prehearing CTL Plate Br. at 6.

 349 See, e.g., CR/PR at Table CTL-II-17.

 350 We note that thirteen of the nineteen responding producers, ten of the fourteen responding importers, and

twenty-one of thirty-five responding purchasers reported that the CTL plate market is not subject to business cycles

or conditions of competition distinctive to CTL plate. See, e.g., CR at CTL-II-18; PR at CTL-II-12. Among the

fourteen purchasers reporting that the market is subject to distinct business cycles or conditions of competition, six

reported that some specific end-use markets influence the overall business cycle of the CTL plate market. Others

reported that the raw material costs, import/export dynamics, or the limited number of suppliers in the world are

factors that affect the overall business cycle for the CTL plate market. See, e.g., CR at CTL-II-18; PR at CTL-II-12.

64

plate. Specialized grades of CTL plate are used to manufacture railroad cars, line pipes, mobile

equipment, highway and railway bridges, pressure vessels, military armor, and machinery components.343

In addition to price, quality is also an important factor to purchasers in this industry.344

Purchasers are generally indifferent to country of origin, although there are some products that are

reportedly only available from certain sources.345 There are some differences in lead times between

domestic and imported products,346 but overall, as indicated in our cumulation discussion, we find subject

imports from Belgium, Brazil, Finland, Germany, Poland, Spain, Sweden, Taiwan, and the United

Kingdom to be generally substitutable for one another and for the domestic like product.347

(4) Business Cycle

Consistent with our finding that demand for CTL plate is derived from demand for end-use

applications,348 and in light of the wide variety of customers and multiplicity of distinct industries for

which CTL plate is used,349 we do not find that the CTL plate market is characterized by a regular and

measurable business cycle that might be characteristic of other industries.350 Although the various

industries that use CTL plate may each be characterized by a specific business cycle, CTL plate producers

respond to several different end-user industries and their individual business cycles. The diversity of

customers and industries that use CTL plate limits the effects of upturns or downturns in demand from

particular customers or other user industries, particularly to the extent that, at any given time, some CTL
 351 We applied the legal standards discussed in section III above.

 352 See, e.g., USITC Pub. 970 at 5.

 353 The four Commissioners joining in the majority opinion used different combinations of cumulated countries in

their analyses, as noted above, and all included imports from Canada, which are no longer subject to any orders.

 354 See, e.g., USITC Pub. 2664 at 237-38.

 355 See, e.g., USITC Pub. 3364 at 27-28.

 356 See, e.g., USITC Pub. 3364 at 28.

 357 Vice Chairman Aranoff examines the likely cumulated volume of CTL imports from nine countries, but,

because she defines the domestic like product differently than Chairman Pearson, Commissioner Hillman, and

Commissioner Okun, she refers to data for the non-alloy CTL plate industry such as that summarized in Table C-1.

Commissioner Koplan and Commissioner Lane examine the likely cumulated volume of CTL imports from eleven

subject countries (Belgium, Brazil, Finland, Germany, Mexico, Poland, Romania, Spain, Sweden, Taiwan, and the

(continued...)

65

plate end-user industries are likely at different positions in their business cycles than other CTL plate enduser industries.

3. The Likely Volume of Cumulated Subject Imports from Belgium, Brazil,

Finland, Germany, Poland, Spain, Sweden, Taiwan, and the United

Kingdom Would Not Be Significant in the Event of Revocation351

a. The Commission’s Original Investigations and First Reviews

In the 1979 original finding, the Commission found the volume of subject imports from Taiwan

increased rapidly from a first shipment of approximately 1,000 tons in December 1977 to 47,667 tons in

1978, with a commensurate increase in U.S. market penetration from less than 0.1 percent in 1977 to

about 6.6 percent in 1978.352 In the 1993 original determinations, the Commission found that the

cumulated volume of CTL plate was significant in terms of both absolute volume and market share.353

The absolute volumes of cumulated imports considered by each Commissioner decreased between 1990

and 1991 before a partial recovery in 1992, although the cumulated imports increased their market share

during a period of declining apparent domestic consumption.354

In the first reviews, the Commission exercised its discretion to cumulate all subject countries

except for Canada. It found that the likely volume of cumulated subject imports would be significant

because, on a cumulative basis, capacity was significant and the excess capacity of the subject countries

greatly exceeded the volume of total subject imports in the 1993 investigations; product shifting was not

difficult; there were foreign CTL plate inventories; all subject countries (except for Mexico) were

significant exporters; there were a number of barriers to importation of subject CTL plate to other

countries; and the recent imposition of U.S. orders on CTL plate from other countries would, in the event

of revocation, give importers an incentive to purchase low-priced CTL plate from subject producers who

would want to maximize production capacity.355 The Commission found that, as a result of the pricesensitive nature of the CTL plate market and the weakened condition of the domestic industry, even a

relatively modest amount of subject imports would have a significant effect on U.S. prices and the U.S.

industry.356

b. The Current Proceedings

In these reviews, we examine the likely cumulated volume of CTL plate imports from nine

countries (Belgium, Brazil, Finland, Germany, Poland, Spain, Sweden, Taiwan, and the United Kingdom)

in the event of revocation.357
 357 (...continued)

United Kingdom) in the event of revocation and because they concur with Vice Chairman Aranoff’s definition of the

domestic like product, they also refer to data for the non-alloy CTL plate industry such as that summarized in Table

C-1.

 358 See, e.g., CR/PR at Table CTL-I-1.

 359 See, e.g., CR/PR at Table CTL-I-1. Imports from Taiwan were already subject to order at the time of the 1993

original investigations; at the time of the 1979 original investigation of subject imports from Taiwan, the volume of

CTL plate from Taiwan did increase over the period of investigation, but from a level of zero, since imports from

Taiwan had not previously been in the U.S. market. See, e.g., CR/PR at Table CTL-I-1.

 360 See, e.g., CR/PR at Tables CTL-I-1, C-2, C-1. Commissioner Koplan and Commissioner Lane note that the

volume of subject imports from Mexico has never exceeded *** percent of apparent U.S. consumption, regardless of

the time period examined, including the 1993 original investigations, the first reviews or the second reviews. They

note that the volume of subject imports from Romania has never exceeded *** percent of apparent U.S.

consumption, regardless of the time period examined. See, e.g., CR/PR at Tables CTL-I-1, C-1. Moreover, the

market share of the eleven cumulated subject countries declined from 10.9 percent in 1990 to 8.7 percent in 1992

and has never been greater than 2.1 percent of apparent U.S. consumption of the non-alloy CTL plate market since

then. See, e.g., CR/PR at Table CTL-I-1, C-1.

 361 See, e.g., CR/PR at Tables CTL-I-1, C-2, C-1.

 362 See, e.g., CR at CTL-IV-1; PR at CTL-IV-1; compare, e.g., CR/PR at Table CTL-IV-1 with CR at CTL-IV-5;

PR at CTL-IV-5.

 363 See, e.g., CR/PR at Tables CTL-IV-8, CTL-IV-13, CTL-IV-18, CTL-IV-24, CTL-IV-36, CTL-IV-48, CTLIV-50, CTL-IV-52, CTL-IV-57 (***).

 364 The current combined production capacity of the nine subject countries is *** short tons, but if the capacities

of each subject country had at the time of their respective original investigations been combined, that capacity would

have been *** short tons. (figures derived from CR/PR at Tables CTL-IV-8, CTL-IV-13, CTL-IV-18, CTL-IV-24,

CTL-IV-36, CTL-IV-48, CTL-IV-50, CTL-IV-52, CTL-IV-57). Commissioner Koplan and Commissioner Lane

note that the inclusion of data for Mexico and Romania do not change this trend. See also, e.g., CR/PR at Tables

CTL-IV-30, CTL-IV-42.

66

At the time of the 1993 original investigations, the volumes of subject imports from Belgium,

Brazil, Finland, Germany, Poland, Spain, Sweden, and the United Kingdom were individually relatively

small. None of these subject countries had a market share that exceeded 2.0 percent during the original

period of investigation. The volume from each of these sources declined between 1990 and 1992, before

these orders were imposed in 1993.358 Collectively, the volume from these countries accounted for 9.6

percent of apparent U.S. consumption in 1990 and declined to 7.1 percent of apparent U.S. consumption

by volume in 1992.359 Not only were subject import volumes from these subject countries generally

declining before the imposition of the orders, but their cumulated volume continued to be small after the

orders were imposed, never exceeding one percent of apparent U.S. consumption in the time periods

covered by the first reviews or the current period of review.360 Indeed, for several subject countries, there

have been no imports into the U.S. market since the imposition of the orders.361 The only two of these

nine subject countries that consistently reported U.S. imports of over 1,000 short tons were Belgium and

Germany, but record data indicate that even these volumes are probably overstated to the extent that the

Belgian imports include out-of-scope floor plate and the German imports include out-of-scope X-70

plate.362

There have been significant declines in production capacity in many of these subject countries

since the original investigations, including for each of the countries with relatively larger capacities at the

time of the original investigations.363 As a result, combined production capacity for the nine subject

countries has declined substantially since the original investigations.364 Nor does the record reflect any

likely significant increase in production capacity in the subject countries in the reasonably foreseeable

future. The only reported future production capacity increases are for producers in ***. The expansion
 365 See, e.g., CR at CTL-IV-21; PR at CTL-IV-14. Commissioner Koplan and Commissioner Lane find that the

***. See, e.g., CR at CTL-IV-47; PR at CTL-IV-25. They further note that ***. See, e.g., CR at CTL-IV-68; PR at

CTL-IV-30.

 366 See, e.g., CR at CTL-IV-55; PR at CTL-IV-27.

 367 See, e.g., CR at CTL-IV-58; PR at CTL-IV-28 (indicating that HSC reported plans ***. By 2010, the firm

plans to ***, and ***. According to HSC, ***.

 368 See, e.g., CR/PR at Tables CTL-IV-8, CTL-IV-13, CTL-IV-18, CTL-IV-24, CTL-IV-36, CTL-IV-48, CTLIV-50, CTL-IV-52, CTL-IV-57. Reported capacity utilization levels for *** were already quite high at the time of

the original investigations. See, e.g., CR/PR at Tables CTL-IV-8, CTL-IV-13, CTL-IV-18, CTL-IV-24, CTL-IV-36,

CTL-IV-48, CTL-IV-50, CTL-IV-52, CTL-IV-57.

 369 See, e.g., CR/PR at Tables CTL-IV-8, CTL-IV-13, CTL-IV-18, CTL-IV-24, CTL-IV-36, CTL-IV-48, CTLIV-50, CTL-IV-52, CTL-IV-57 (derived from data on seven of the nine subject countries because data were not

available for Spain and Sweden). We note that producers in several subject countries reported capacity utilization

rates above 100 percent. See, e.g., id. Commissioner Koplan and Commissioner Lane note that including Mexico

and Romania in the overall capacity utilization calculation also yields a high capacity utilization level of *** percent

in 2005, or well above the *** percent level in 1992. See, e.g., CR/PR at Tables CTL-IV-8, CTL-IV-13, CTL-IV18, CTL-IV-24, CTL-IV-30, CTL-IV-36, CTL-IV-42, CTL-IV-48, CTL-IV-50, CTL-IV-52, CTL-IV-57 (derived

from data on nine of the eleven subject countries because data were not available for Spain and Sweden).

 370 Derived from CR/PR at Tables CTL-IV-8, CTL-IV-13, CTL-IV-18, CTL-IV-24, CTL-IV-36, CTL-IV-48,

CTL-IV-50, CTL-IV-52, CTL-IV-57, Table C-2. Vice Chairman Aranoff notes that the combined excess capacity

was equivalent to *** percent of apparent U.S. consumption of non-alloy CTL plate. (derived from CR/PR at Tables

CTL-IV-8, CTL-IV-13, CTL-IV-18, CTL-IV-24, CTL-IV-36, CTL-IV-48, CTL-IV-50, CTL-IV-52, CTL-IV-57,

Table C-1). Commissioner Koplan and Commissioner Lane note that the combined excess capacity of the eleven

subject countries was equivalent to *** percent of apparent U.S. consumption of non-alloy CTL plate. (derived

from CR/PR at Tables CTL-IV-8, CTL-IV-13, CTL-IV-18, CTL-IV-24, CTL-IV-30, CTL-IV-36, CTL-IV-42, CTLIV-48, CTL-IV-50, CTL-IV-52, CTL-IV-57, Table C-1).

 371 See, e.g., CR/PR at Tables CTL-IV-8, CTL-IV-13, CTL-IV-18, CTL-IV-24, CTL-IV-36, CTL-IV-48, CTLIV-50, CTL-IV-52, CTL-IV-57 (indicating the following capacity utilization levels: Belgium (*** percent); Brazil

(*** percent); Finland (*** percent); Germany (*** percent); Poland (*** percent); Taiwan (*** percent); and the

United Kingdom (*** percent). Information was not available on capacity utilization levels for Spain and Sweden in

2005, but their respective levels in 1999 were *** and *** percent, respectively.

 372 See, e.g., CR/PR at Tables CTL-IV-67, CTL-IV-69; CR at CTL-II-21 n.29; PR at II-13 n.29.

67

of capacity by about *** in ***, however, is not expected to come into operation until ***,365 or beyond

what we consider to be the reasonably foreseeable future in these reviews. The planned expansion in

***366 *** is contingent on certain conditions that are not expected to occur until ***,367 or beyond what

we consider to be the reasonably foreseeable future.

Not only are the increases in production capacity in the nine subject countries likely to be limited

in the reasonably foreseeable future, but subject producers are operating at high capacity utilization

levels, levels that for each subject country except for *** are higher than during the original

investigations.368 Available data indicate an overall capacity utilization of approximately *** percent.369

The combined excess capacity in 2005 in the nine cumulated countries was *** short tons, which was

equivalent to approximately *** percent of apparent U.S. consumption in that year.370 While the

available excess capacity is not insubstantial in relation to the U.S. market, we do not find it likely that

such volumes would be shipped to the United States if the finding and orders were revoked. Given that

the subject foreign producers were generally operating at high levels of capacity utilization in 2005 (over

90 percent in most cases),371 and demand is projected to remain strong and even grow in the reasonably

foreseeable future in the markets that these foreign producers serve,372 these producers do not lack

markets in which to sell their production. In addition, as discussed below, prices in the markets into

which these producers sell are high and comparable to U.S. prices, even prior to allowing for higher
 373 See, e.g., CR/PR at Tables CTL-IV-8, CTL-IV-13, CTL-IV-18, CTL-IV-24, CTL-IV-36, CTL-IV-48, CTLIV-50, CTL-IV-52, CTL-IV-57.

 374 See, e.g., CR at CTL-IV-13; PR at CTL-IV-12 (suggesting that Industeel’s product mix is heavily weighted

toward stainless steel and other alloy steel plate); CR at CTL-IV-14; PR at CTL-IV-12 (indicating that about ***

percent of Duferco’s sales are of alloy plate, floor plate, and sheet); CR at CTL-IV-25; PR at CTL-IV-15; CR/PR at

Table CTL-IV-17 (indicating that both Brazilian producers produce non-subject plate such as X-70 plate and alloy

plate); CR at CTL-IV-32; PR at CTL-IV-17; CR/PR at Table CTL-IV-22 (indicating that approximately *** percent

of Finnish producer Rautaruukki’s production is of non-subject CTL plate. Rautaruukki produces ***, uses its

sheeting line to produce sheets with thicknesses less than 4.75 mm, and produces micro-alloy plate); CR at CTL-IV42 to CTL-IV-43; PR at CTL-IV-23; CR/PR at Table CTL-IV-28 (indicating that German producers produce X-70

plate, micro-alloy plate, and other non-subject plate (e.g., alloy plate)); CR at CTL-IV-60 to CTL-IV-61; PR at CTLIV-29; CR/PR at Table CTL-IV-40 (indicating that HSC produces X-70 plate, micro-alloy plate, and alloy plate);

CR at CTL-IV-75; PR at CTL-IV-33 (indicating that Swedish producer SSAB has been focusing on increasing

production of high-strength steel and other niche products such as quenched steel); CR at CTL-IV-82; PR at CTLIV-36 (indicating that Taiwan producer China Steel does not produce any non-subject CTL plate); CR at CTL-IV90; PR at CTL-IV-39; CR/PR at Table CTL-IV-61 (indicating that U.K. producers produce micro-alloy CTL plate,

alloy plate, and non-subject bars)). Commissioner Koplan and Commissioner Lane note that Mexico does not

produce any non-subject plate on its production facilities, and Romania *** of micro-alloy CTL plate. See, e.g., CR

at CTL-IV-51, CTL-IV-70; PR at CTL-IV-26, CTL-IV-31.

 375 See, e.g., CR at CTL-III-9; PR at CTL-III-3; see also, e.g., CTL Plate Hearing Tr. at 249-51 (Prusa).

 376 In fact, even where a higher-value product was excluded from the scope of the orders (Belgian producer

Duferco’s floor plate), the volume of imports of that product from Belgium did not increase subsequent to the

revocation of the order as to that product. See, e.g., Duferco’s Prehearing CTL Plate Br. at 17 & Exh. 6.

 377 See, e.g., CR/PR at Tables CTL-IV-8, CTL-IV-14, CTL-IV-19, CTL-IV-25, CTL-IV-36, CTL-IV-53, CTLIV-58. Data for Spain and Sweden were not available.

 378 Derived from CR/PR at Tables CTL-IV-8, CTL-IV-14, CTL-IV-19, CTL-IV-25, CTL-IV-36, CTL-IV-53,

CTL-IV-58, C-2. Vice Chairman Aranoff notes that this amount was equivalent to *** percent of apparent U.S.

consumption of non-alloy CTL plate in that year. (derived from CR/PR at Tables CTL-IV-8, CTL-IV-14; CTL-IV19; CTL-IV-25; CTL-IV-36; CTL-IV-53; CTL-IV-58; C-1). Commissioner Koplan and Commissioner Lane note

that the combined end-of-period inventories for all subject countries for which there were data of *** short tons was

equivalent to *** percent of apparent U.S. consumption of non-alloy CTL plate in 2005. (derived from CR/PR at

Tables CTL-IV-8, CTL-IV-14, CTL-IV-19, CTL-IV-25, CTL-IV-31, CTL-IV-36, CTL-IV-43, CTL-IV-53, CTL-IV58, C-1).

 379 See, e.g., German Respondents’ Posthearing CTL Plate Br. at 7; Joint Respondents’ Prehearing CTL Plate Br.

at 23-24; CR at CTL-IV-30; PR at CTL-IV-16; CTL Plate Hearing Tr. at 264-65 (Malashevich), 287-88

(Cunningham), 371 (Montalbine).

68

shipping costs to the United States. As a result, these producers likewise have no price motivation to

increase sales to the United States. We note also the *** short tons of excess capacity for these nine

subject countries is considerably smaller than the 1.1 million short tons of excess capacity that existed

among the eleven subject countries in the first reviews.373

Some of the producers in the nine subject countries do produce non-subject products using the

same production facilities and employees as subject merchandise.374 As domestic producers recognize,

however, shifting from other products to produce CTL plate, while sometimes possible, can be costly.375

We do not find that subject producers are likely to engage in much, if any, product shifting at the risk of

abandoning existing customers and producing lower-value products than the micro-alloy, specialty, bar,

and X-70 non-subject products currently being produced in these facilities.376

End-of-period inventories held by foreign producers in the nine subject countries in 2005 were a

combined *** short tons.377 This amount was equivalent to approximately *** percent of apparent U.S.

consumption that year.378 These inventories are largely committed to existing orders.379 In any event, this

level of inventories was not excessive in relation to subject producers’ production or shipments so as to
 380 On a cumulated basis, subject producers’ end-of-period inventories in 2005 were equivalent to approximately

*** percent of subject producers’ production and *** percent of subject producers’ shipments in 2005. Data on endof-period inventories for Spain and Sweden were not available. See, e.g., CR/PR at Tables CTL-IV-8, CTL-IV-14;

CTL-IV-19; CTL-IV-25; CTL-IV-36; CTL-IV-53; CTL-IV-58.

 381 See, e.g., CR/PR at Tables CTL-IV-8, CTL-IV-14; CTL-IV-19; CTL-IV-25; CTL-IV-36; CTL-IV-53; CTLIV-58. Commissioner Koplan and Commissioner Lane also note that end-of-period inventories for Mexico and

Romania were much smaller in 2005 than at the beginning of the period of review. See, e.g., CR/PR at Tables CTLIV-31, CTL-IV-43.

 382 Derived from CR/PR at Tables CTL-IV-8, CTL-IV-14; CTL-IV-19; CTL-IV-25; CTL-IV-36; CTL-IV-48;

CTL-IV-50; CTL-IV-53; CTL-IV-58.

 383 Derived from CR/PR at Tables CTL-IV-8, CTL-IV-14; CTL-IV-19; CTL-IV-25; CTL-IV-36; CTL-IV-53;

CTL-IV-58. Data were not available for Spain and Sweden.

 384 Derived from CR/PR at Tables CTL-IV-8, CTL-IV-14; CTL-IV-19; CTL-IV-25; CTL-IV-36; CTL-IV-53;

CTL-IV-58. Data were not available for Spain and Sweden. Figure does not include data for Brazil. In 2005, ***

percent of Brazil’s shipments were to the home market. In questionnaire responses, Brazilian respondents reported

*** Latin America as their primary export market. See, e.g., CR at CTL-IV-21; PR at CTL-IV-14; CR/PR at Table

CTL-IV-14.

 385 We considered the European Union to be the geographic region of subject producers in Europe, Asia to be the

geographic region for Taiwan, and Latin America to be the geographic region for Brazil. In 2005, *** percent of

Belgian export shipments were to the European Union; *** percent of Finland’s exports were to the European

Union; *** percent of German exports were to the European Union; *** percent of Poland’s exports were to the

European Union; *** percent of Taiwan’s exports were to Asia; and *** percent of the United Kingdom’s exports

were to the European Union. According to publicly available information, in 2005, 81.2 percent of Spain’s exports

were to the European Union; 85.3 percent of Swedish exports were to the European Union, and Sweden also

exported to other non-EU neighbors such as Norway. Commissioner Koplan and Commissioner Lane join this

footnote and do not consider “geographic regions” in their analysis. See, e.g., CR/PR at Tables CTL-IV-8, CTL-IV14, CTL-IV-19, CTL-IV-25, CTL-IV-36, CTL-IV-53, CTL-IV-58.

 386 Belgian producers, which accounted for *** of these extra-region shipments, reported that these shipments

were for specific projects, such as oil and gas projects in the Middle East. See, e.g., CR at CTL-IV-15; PR at CTLIV-12. With the impending accession of Romania to the European Union, Commissioner Koplan and Commissioner

Lane find it is likely that this figure will be lower in the reasonably foreseeable future. See, e.g., CR at CTL-IV-114

& n.199; PR at CTL-IV-47 & n.199.

 387 The European Union has eliminated customs duties between Member States, removed internal border

restrictions, and otherwise facilitated access to a market of some 450 million consumers with a total gross domestic

product of more than $11 trillion. See, e.g., CR at CTL-IV-113 to CTL-IV-114; PR at CTL-IV-46 to CTL-IV-47. 

Similar to the European Union, Mercosur has eliminated most trade barriers in goods and services, achieved a

common external tariff, and permitted more than 90 percent of intra-Mercosur trade to be duty-free (with remaining

(continued...)

69

create an incentive to offload a significant quantity of product.380 Nor is this level excessively high vis-avis the typical inventory level maintained by subject producers during the entire period of review.381

We have also examined the level and composition of exports from the nine subject countries to

markets other than the United States. The nine subject countries collectively exported *** short tons of

subject CTL plate in 2005.382 Of the seven for which there is information on total shipments, their exports

of *** short tons represented only *** percent of total shipments because an important share of their

shipments were consumed internally and/or sold in their home market.383 Moreover, a substantial

majority (*** percent) of these export shipments384 were to markets in the subject producers’ own

geographic regions.385 Only approximately *** percent of subject producers’ total shipments were

exported to markets outside their local regions.386 We find that subject producers have a significant

incentive to continue to ship to markets that are in relatively close proximity to them, and in the case of

the European Union and Mercosur, that provide some logistical and tariff advantages.387 Given the
 387 (...continued)

goods to be phased in as well). See, e.g., CR at CTL-IV-112 to CTL-IV-113; PR at CTL-IV-46.

 388 See, e.g., CR at CTL-V-3 to CTL-V-4; PR at CTL-V-2 to CTL-V-3.

 389 The stated strategy of both Arcelor and Mittal, even before their merger, for example, was to acquire or build

plants to serve clients within a region, rather than having to export product from one region to another region. See,

e.g., French Respondents’ Posthearing CORE Br. at 1-4, Exh. 6; Auto Producers’ Prehearing CORE Br. at 47-48,

Exh. 2 at slides 16-17.

 390 See, e.g., Joint Respondents’ Prehearing CTL Plate Br. at 64-65; CR at CTL-IV-15, CTL-IV-24, CTL-IV-31,

CTL-IV-41, CTL-IV-59, CTL-IV-78, CTL-IV-85; PR at CTL-IV-12, CTL-IV-14, CTL-IV-16, CTL-IV-22, CTL-IV28, CTL-IV-35 to CTL-IV-36, CTL-IV-38. Commissioner Koplan and Commissioner Lane also note that *** of

Mexico’s shipments were to the home market and that Mexico does not face any tariff or non-tariff barriers in

markets other than the United States. Although Romania does face tariff barriers in some third-country markets,

they find that Romania is more likely to direct any further exports to the European Union in light of Romania’s

impending accession to the European Union. See, e.g., CR at CTL-IV-49, CTL-IV-68, CTL-IV-114; PR at CTL-IV25, CTL-IV-30.

 391 See, e.g., IPSCO/Oregon’s Posthearing CTL Plate Br. at 2-3; Mittal’s Posthearing CTL Plate Br. at 1-5.

 392 Apparent U.S. consumption declined from 10.0 million short tons in 1974 to 7.7 million short tons in 1975 and

to 6.8 million short tons in 1976 before increasing to 7.4 million short tons in 1977 and 8.6 million short tons in

1978. See, e.g., USITC Pub. 970.

 393 Apparent U.S. consumption declined from 5.6 million short tons in 1990 to 4.8 million short tons in 1991

before increasing to 5.0 million short tons in 1992. See, e.g., CR/PR at Table CTL-I-1.

 394 Apparent U.S. consumption increased from 6.6 million short tons in 1997 to 8.2 million short tons in 1998

before declining to 6.0 million short tons in 1999. See, e.g., CR/PR at Table CTL-I-1.

70

geographic proximity of subject producers and purchasers in regional markets, transportation costs are

generally lower than they would be in the case of shipments from those producers to the United States.388

For these reasons and others, foreign producers, including Mittal, produce according to a model in which

production facilities largely serve the regional markets in which they are located.389 Moreover, having

invested efforts in cultivating customers within regional markets (customers with whom foreign producers

may expect to enjoy certain natural advantages (such as those mentioned above)), foreign producers are

not likely to abandon those existing regional customers in favor of more speculative and short-lived

prospects with customers in the United States. For these reasons, we do not consider subject producers’

within-region exports to indicate that increased exports to the United States are likely if the finding and

orders under review are revoked. We also note that producers in these nine countries did not report facing

any tariff or non-tariff barriers to the importation of the subject merchandise into countries other than the

United States.390

Domestic interested parties assert that due to the likely decline in demand, or decline in the rate of

demand growth in the reasonably foreseeable future, the U.S. market will not be able to absorb the likely

increase in imports from the subject countries (as well as the already increasing volumes from non-subject

countries).391 This argument overlooks the relative strength of current and projected demand in the U.S.

market. In the 1979 original investigation, apparent U.S. consumption declined overall between 1974 and

1978, reaching its lowest point in 1976 before increasing to levels that were not as high as in the

beginning of the period.392 A similar scenario was present in the 1993 original investigations to the extent

that apparent U.S. consumption declined between 1990 and 1991 and was still well below the 1990 levels

in 1992.393 During the first reviews of these orders, the record reflected a sharp increase in apparent U.S.

consumption between 1997 and 1998 but then a sharp decline in 1999 to levels well below those in

1997.394 In contrast, during the current period of review, demand for carbon CTL plate declined from 7.7

million short tons in 2000 to 7.1 million short tons in 2001, increased to 7.5 million short tons in 2002,

declined to 7.3 million short tons in 2003 and then increased sharply to 8.3 million short tons in 2004 and
 395 See, e.g., CR/PR at Table C-2. These data include shipments of micro-alloy CTL plate; although the

Commission did not expand the domestic like product to include micro-alloy CTL plate in the first reviews, it

acknowledged that some of the data it relied upon in those reviews contained micro-alloy shipments to the extent

that some domestic producers were unable to segregate their micro-alloy data from their non-alloy CTL plate data. 

See, e.g., USITC Pub. 3364 at 23 n.126. During the period of review, apparent U.S. consumption of non-alloy CTL

plate declined from 6,814,613 short tons in 2000 to 6,234,474 short tons in 2001, increased to 6,539,570 short tons

in 2002, declined to 6,354,810 short tons in 2003 and then increased to 6,978,552 short tons in 2004 and to

7,281,971 short tons in 2005; demand in the first six months of 2006 (4,434,283 short tons) was also higher than in

interim 2005 (3,646,154 short tons). See, e.g., CR/PR at Table CTL-I-1.

 396 Non-subject imports’ market share increased from 5.4 percent to 8.1 percent between 2004 and 2005 and was

higher at 11.2 percent in interim 2006 than it was at 8.6 percent in interim 2005. See, e.g., CR/PR at Table C-2. The

U.S. industry’s operating income increased from $901 million to $1.3 billion between 2004 and 2005, and was

$794.1 million in interim 2006 as compared to $698.4 million in interim 2005. See, e.g., CR/PR at Table C-2. In

terms of the non-alloy market, non-subject imports’ market share increased from 5.6 percent to 8.2 percent between

2004 and 2005 and was higher at 12.3 percent in interim 2006 than it was at 9.1 percent in interim 2005, and the

U.S. industry’s operating income increased from $734.2 million to $982.3 million between 2004 and 2005 and was

$598.1 million in interim 2006 as compared to $545.5 million in interim 2005. See, e.g., CR/PR at Table C-1.

 397 See, e.g., CR/PR at Tables CTL-IV-68 and CTL-IV-69.

 398 See, e.g., CR/PR at Tables CTL-IV-68, CTL-IV-69.

 399 See, e.g., Joint Respondents’ Prehearing CTL Plate Br. at 45-60. Joint respondent interested parties report that

subject producers have full order books through the end of 2006 and in the transportation and oil sectors some endusers have backlogs extending well into 2007. See, e.g., Joint Respondents’ Prehearing CTL Plate Br. at 52-53.

 400 See, e.g., German Respondents’ Prehearing CTL Plate Br. at 14-18, App. 10 citing MEPS (Int’l) Ltd., MEPS

International Steel Review, North American Edition, 5 (Jan. 2005), (March 2005), (Apr. 2005), (Oct. 2005), (Apr.

2006); Doc Id. 262359; Steel Business Briefing, SBB Global Market Outlook, 7 (Sept. 2006).

 401 See, e.g., CR/PR at Table CTL-IV-69.

 402 See, e.g., CR/PR at Table CTL-IV-69.

 403 See, e.g., CR at CTL-IV-99 to CTL-IV-100, CTL-V-3; PR at CTL-IV-40 to CTL-IV-41, CTL-V-2; CR/PR at

Table CTL-IV-70 (indicating that EU-wide prices and prices in Germany, Poland, Spain, and the United Kingdom

(continued...)

71

to 8.6 million short tons in 2005, well above the level at the beginning of the period; demand in the first

six months of 2006 (“interim 2006”) (5,184,837 short tons) was also much higher than in interim 2005

(4,309,826 short tons).395 Indeed, the domestic industry’s condition continued to improve toward the end

of the period of review despite an increase in the volume of non-subject imports, indicating that the

expanding U.S. market was able to absorb these additional imports.396

As discussed more fully above, demand in the U.S. and global markets will likely remain strong

and increase in the reasonably foreseeable future. Despite declines during the beginning of the period of

review, apparent U.S. consumption increased sharply in more recent periods and *** data on reversing

mill plate consumption in North America project further increases through 2010, consistent with many

industry forecasts for CTL plate demand in the United States.397 As to global demand, *** data on

reversing mill plate consumption outside of the North American market showed increases year after year

throughout the period of review and show continuing increases through 2010.398 Demand is also expected

to continue to be strong in the regional markets that subject producers currently serve.399 Consistent with

other commentators,400 *** forecasts continued increases in CTL plate demand in Europe as compared to

the current level.401 *** also forecasts continued demand growth in China, East and South East Asia

(excluding China), Eastern Europe, and Latin America in 2007.402

We have considered price levels in the markets of subject country producers vis-a-vis U.S. market

prices. Prices in EU markets have fluctuated, but have frequently been at levels comparable to U.S.

prices.403 Asian market prices have typically been lower than U.S. prices.404 Thus there appears to be no
 403 (...continued)

are relatively similar to those in the U.S. market, especially once transportation costs to the United States are

included); see also CR at CTL-IV-102, CTL-V-3; PR at CTL-IV-42, CTL-V-2; CR/PR at Table CTL-IV-71

(indicating that prices in Germany and the United Kingdom are relatively similar to those in the U.S. market,

especially once transportation costs to the United States are included). In addition to finding that EU prices where

any additional exports from Romania are likely to be sent are comparable to those in the U.S. market, Commissioner

Koplan and Commissioner Lane also find that prices in Mexico are similar to prices in the U.S. market. See, e.g.,

AHMSA’s Posthearing CTL Plate Br. at 9-10; see also, e.g., CR at CTL-V-3; PR at CTL-V-2 (per-unit

transportation costs from Mexico to the United States estimated at 4.76 percent).

 404 See, e.g., CR/PR at Tables CTL-IV-70, CTL-IV-71.

 405 See, e.g., CR/PR at Tables CTL-IV-9, CTL-IV-14, CTL-IV-19, CTL-IV-25, CTL-IV-37, CTL-IV-49, CTLIV-58 (indicating that in 2005, the percentage of total shipments to China and “Other Asia” by subject producers

were low: Belgium (*** to China and *** to Other Asia); Brazil (*** to China and *** to Other Asia); Finland (***

to China and *** to Other Asia); Germany (*** to China and *** to Other Asia); Poland (*** to China and *** to

Other Asia); United Kingdom (*** to China and *** to Other Asia)). Data for Spain and Sweden were not

available.

 406 *** of Taiwan’s exports were to Asia. See, e.g., CR/PR at Table CTL-IV-53.

 407 See, e.g., CR/PR at Table CTL-IV-53 (indicating *** percent of its sales were to the home market.

 408 See, e.g., CR/PR at Table CTL-IV-14.

 409 See, e.g., CR/PR at Table CTL-IV-14.

 410 See, e.g., *** (“The {EU} plate market also continues to be a bastion of pricing strength.”); ***. In addition

to finding that EU prices, where any additional exports from Romania are likely to be sent, are likely to remain

strong, Commissioner Koplan and Commissioner Lane also find that prices in Mexico, where *** of Mexican

shipments are likely to be directed, are also likely to remain strong like the prices in the neighboring U.S. market.

72

price incentive for subject producers to shift sales from EU markets to the U.S. market, but there may be

some incentive to shift sales from Asia to the United States.

Most of the subject producers service mainly countries within the European Union,405 where

prices are not substantially below U.S. prices, with limited sales to Asia. The sole exceptions are Taiwan

and Brazil.406 The Taiwan CTL plate industry, however, is *** the least export-oriented of the nine

cumulated subject countries, with over *** percent of its shipments destined for its home market.407 We

find no basis to conclude that revocation of the finding on Taiwan would significantly change the Taiwan

industry’s domestic market focus. In the case of Brazil, the home market accounted for over *** percent

of the CTL plate industry’s shipments in 2005.408 *** of the exports by the Brazilian CTL plate industry

are directed to ***.409 We do not find it likely that the Brazilian CTL plate industry would turn its focus

away from the home market and ***.

Consistent with projected strong global demand for CTL plate, prices in the foreign markets

primarily served by these subject producers are projected to remain firm.410 Accordingly, we conclude

that prices in other markets relative to U.S. prices do not support a conclusion that revocation of the

orders and finding will induce subject producers to shift sales away from other markets and into the U.S.

market to a significant degree.

Furthermore, we find that the domestic interested parties’ arguments that developments in China

will likely lead to increased subject imports into the U.S. market are too speculative. Domestic interested

parties assert that with China’s recent transition from a net importer to a net exporter of CTL plate,

subject imports will be displaced from the Chinese market and from their own home and third-country

markets. Domestic interested parties assert that, as a result, there will likely be increased subject imports
 411 See, e.g., Mittal’s Prehearing CTL Plate Br. at 29, 33, 36-42, 65-66, Apps. 5-6; Nucor’s Prehearing CTL Plate

Br. at 8-20; IPSCO/Oregon’s Posthearing CTL Plate Br. at 1-2, 4-6, 9, Exh. 1; Mittal’s Posthearing CTL Plate Br. at

7-10, Answers to Questions from Commissioner Okun at 5-6; Nucor’s Posthearing CTL Plate Br. at 12-14, App. 2.

 412 See, e.g., USITC Pub. 3816 at 30. There are other important differences between the subject imports and

subject producers at issue in these reviews and those at issue in the 2005 reviews of CTL plate from France, India,

Indonesia, Italy, Japan, and Korea. Imports from the subject countries in the 2005 reviews (except for France)

surged in volume in the period leading up to the orders; subject producers continued to ship into the U.S. market;

subject producers increased production capacity over the period of review; and subject producers were subject to

antidumping duties in third-country markets. See, e.g., USITC Pub. 3816 at 27-31.

 413 Chairman Pearson and Commissioner Okun dissenting, USITC Pub. 3816 at 52.

 414 See, e.g., CR/PR at Tables CTL-IV-9, CTL-IV-14, CTL-IV-19, CTL-IV-25, CTL-IV-37, CTL-IV-49, CTLIV-58 (indicating that in 2005, the percentage of total shipments to China by subject producers were low or nonexistent: Belgium (*** to China); Brazil (*** to China); Finland (*** to China); Germany (*** to China); Poland

(*** to China); United Kingdom (*** to China)). Data for Spain and Sweden were not available. Commissioner

Koplan and Commissioner Lane note that Mexico had *** exports to China during the period of review and that any

additional exports from Romania are likely to be sent to the European Union, in light of Romania’s impending

accession to the European Union. See, e.g., CR/PR at Table CTL-IV-31; CR at CTL-IV-114; PR at CTL-IV-47.

 415 See, e.g., Corus’ Posthearing CTL Plate Br. at 7-10; Joint Respondents’ Prehearing CTL Plate Br. at 2, 45, 53-

58, 60. Joint respondent interested parties also point out that the European Union already maintains quantitative

restrictions on steel products (including CTL plate) from Russia, Ukraine, and Kazakhstan that prevent any surge in

imports from those countries into the European Union. See e.g., Corus’ Posthearing CTL Plate Br. at App. O at 1,

Exhibits; Joint Respondents’ Prehearing CTL Plate Br. at 62-63.

 416 See, e.g., CR/PR at Tables CTL-IV-9, CTL-IV-14, CTL-IV-19, CTL-IV-25, CTL-IV-37, CTL-IV-49, CTLIV-51, CTL-IV-53, and CTL-IV-58. Commissioner Koplan and Commissioner Lane observe that Mexico’s

shipments to its home market increased between 2004 and 2005 and were higher in interim 2006 than in interim

2005 and that Romania’s shipments to its home market and to the European Union were higher in interim 2006 than

in interim 2005. Commissioner Koplan and Commissioner Lane did not consider regional markets in their analysis. 

See, e.g., CR/PR at Table CTL-IV-31, CTL-IV-43.

 417 According to ***, Chinese reversing mill plate production increased from *** tons in 2000 to *** tons in

2006, an increase of *** percent, but is projected to increase from *** in 2006 to *** tons in 2008, an increase of

only *** percent. See, e.g., Nucor’s Posthearing CTL Plate Br. at App. 2. China’s CTL plate production is

projected to exceed its consumption by *** metric tons in 2006, compared to estimated excess production ranging

from *** to *** metric tons annually during 2007 through 2010. See, e.g., Nucor’s Posthearing CTL Plate Br. at

App. 2.

73

into the U.S. market in the event of revocation.411 In contrast to the producers in the cumulated countries

involved in the 2005 CTL plate reviews, which the Commission found relied on the Chinese market

(except for Italy),412 413 producers in these subject countries do not rely on the Chinese market.414 Nor is

there evidence that China has displaced subject producers in their home or regional markets.415 Instead,

record data indicates that subject producers have recently shipped larger volumes to their home and

regional markets.416 Moreover, although there has been a large increase in Chinese production over the

period of review, future increases in Chinese production and Chinese net CTL plate exports are forecast

to be more moderate.417 In sum, if a displacement effect were likely, we should already have seen it, and

we have not. Therefore, we do not expect a displacement effect in the reasonably foreseeable future.

In addition to these demand conditions, there are also likely to be limitations on supply in the

U.S. market associated with the existing antidumping duty orders and suspension agreements on CTL

plate from eleven countries and the absence of any reported additions to the U.S. industry’s production

capacity in the reasonably foreseeable future. Notwithstanding increased volumes of non-subject imports

in the U.S. market toward the end of the period of review, there continued to be supply shortages in the

U.S. market for certain grades, types, or sizes of CTL plate (such as thick plate made on a reversing or

quarto mill and heat-treated plate), and, as discussed above, some supply shortages were reported even in
 418 See, e.g., Caterpillar’s Prehearing CTL Plate Br. at 7-8; Joint Respondents’ Prehearing CTL Plate Br. at 1, 28-

35; Corus’ Posthearing CTL Plate Br. at App. K at 8-9; Caterpillar’s Posthearing Submission at 1-3; Duferco’s

Posthearing CTL Plate Br. at Answer to Question 2.

 419 Commissioner Koplan and Commissioner Lane acknowledge that there may be some increase in cumulated

volume of subject imports from the eleven subject countries in the reasonably foreseeable future, but, in light of

these findings and their finding below that the domestic industry is not vulnerable, they do not find that the likely

volume of cumulated subject imports from these eleven subject countries will be significant either in absolute terms

or relative to production or consumption in the United States in the event of revocation.

 420 We applied the legal standards discussed in section III above.

 421 Except as otherwise noted, this discussion reflects the views of the entire Commission. Vice Chairman

Aranoff considered the likely price effects from cumulated subject imports from the nine subject countries on the

non-alloy CTL plate industry. Commissioner Koplan and Commissioner Lane considered the likely price effects

from cumulated subject imports from all eleven subject countries on the non-alloy CTL plate industry. They arrived

at the same conclusions as their colleagues who examined the likely price effects from cumulated subject imports

from the nine subject countries on the carbon CTL plate industry.

 422 See, e.g., USITC Pub. 970 at 6-7. The Commission estimated that had imports from Taiwan not been sold at

less than fair value (at margins calculated at 34 percent), it is unlikely there would have been underselling (because

the margin of underselling was as much as 20 percent). It stated that it was doubtful that CTL plate from Taiwan’s

new mill would have been competitive in the U.S. market had it been sold at fair value, and it also expressed concern

that the Taiwan producer and its counsel failed at the hearing to give assurances that future prices would be at fair

value. As evidence of price suppression, the Commission noted that domestic producers had to offer discounts and

specials to compete with imports from Taiwan. The Commission also noted a number of confirmed lost sales to

subject imports on the basis of lower prices. See, e.g., id.

74

2006.418 The U.S. industry’s production increases during the period of review did not keep pace with the

growth in demand during this same period, and there are no projected additions to production capacity in

the United States for the reasonably foreseeable future. Therefore, although it is likely that the domestic

industry will produce more using existing equipment due to technological improvements, we nevertheless

find it unlikely that there will be significant excess supply in the U.S. market, further limiting the

significance of any increase in subject import volume.

Although we acknowledge that there may be some increase in cumulated subject imports in the

reasonably foreseeable future, in light of these findings and our finding below that the domestic industry

is not vulnerable, we do not find that the likely volume of cumulated subject imports from these nine

subject countries will be significant either in absolute terms or relative to production or consumption in

the United States in the event of revocation.419

4. There Are Not Likely to Be Significant Price Effects from Cumulated

Subject Imports from Belgium, Brazil, Finland, Germany, Poland, Spain,

Sweden, Taiwan, and the United Kingdom420 421

a. The Commission’s Original Investigations and First Reviews

In the 1979 original investigation of subject imports from Taiwan, the Commission found

underselling as well as price suppression by subject imports from Taiwan.422 In the 1993 original

investigations, the Commission found that subject imports were substitutable for one another and the

domestic like product, and that the CTL plate market was price-sensitive. It found there had been

significant price underselling by the cumulated subject imports, noting underselling in commercial grades
 423 According to the data collected in the 1993 original investigations, there were eight instances of underselling

and 11 instances of overselling by subject imports from Belgium, with margins of underselling ranging from 0.2 to

10.5 percent; there were 18 instances of underselling and 12 instances of overselling for subject imports from Brazil,

with margins of underselling ranging from 0.4 to 26.6 percent; there were 25 instances of underselling and nine

instances of overselling for subject imports from Finland, with margins of underselling ranging from 1.1 to 25.7

percent; there were 33 instances of underselling and 15 instances of overselling for subject imports from Germany,

with margins of underselling ranging from 0.4 to 23.7 percent; there were eight instances of underselling and two

instances of overselling by subject imports from Poland, with margins of overselling ranging from 0.1 to 11.5

percent; there were 22 instances of underselling and no instances of overselling for subject imports from Spain, with

margins of underselling ranging from 7.7 to 43.1 percent; there were 27 instances of underselling and six instances

of overselling for subject imports from Sweden, with margins of underselling ranging from 4.9 to 29.3 percent; and

there were 33 instances of underselling and three instances of overselling for subject imports from the United

Kingdom, with margins of underselling ranging from 1.1 to 26.5 percent. See, e.g., CR/PR at Table CTL-V-6.

 424 See, e.g., USITC Pub. 2664 at 238-43.

 425 See, e.g., USITC Pub. 3364 at 29.

75

as well as declining unit values for twelve niche products.423 It also found significant price depression or

suppression and evidence of adverse price effects, in that unit production costs had risen steadily while

market prices had been declining, resulting in a cost/price squeeze. It also observed that domestic

producers met low-priced subject imports only to learn that subject producers had “ratcheted” their prices

down again, and that there were a number of confirmed instances of lost sales and lost revenues.424

In the first reviews, the Commission found that domestic prices were falling or, at best, had

stabilized at low levels, with the domestic industry unable to capitalize on recent attempts to increase

prices. Although there were minimal pricing data due to the limited volume of subject imports during the

first period of review, the Commission found that domestic and subject CTL plate were generally

interchangeable and competed based largely on price. It concluded that highly competitive prices were

essential to obtain sales, which were generally on a spot basis. It found that the likely significant

increased volumes of subject imports likely would undersell domestic plate products to a significant

degree and have significant price suppressing and depressing effects within a reasonably foreseeable

time.425
 426 For five specific products, the Commission requested that U.S. producers and importers of CTL plate provide

quarterly data for the total quantity and f.o.b. value of CTL plate that was shipped to unrelated customers in the U.S.

market for the period January 2000 to June 2006. During the period of review, there were only three quarters in

which there were any imports from any of the nine subject countries of any of the five pricing products. In the

fourth quarter of 2004, there were *** short tons of subject imports of product 1 from Germany that undersold the

domestic like product by *** percent. In the first quarter of 2002, there were *** short tons of product 2 from

Finland that oversold the domestic like product by *** percent. In the fourth quarter of 2004, there were *** short

tons of product 2 from Germany that oversold the domestic like product by *** percent. See, e.g., CR/PR at Tables

CTL-V-1 to CTL-V-6. We do not find these data to be very probative because they involved isolated transactions

and limited volumes.

In the first reviews, the Commission also collected pricing data, but there were only a limited number of

comparisons due to the limited volume of subject imports from these nine countries during that time period. 

According to the data in those reviews, there were ten possible price comparisons between the domestic like product

and imports from Belgium, and the Belgian imports oversold the domestic like product in each instance. See, e.g.,

CR/PR at Table CTL-V-6 at n.2. ***, however, reported that all of its imports from Belgium were of floor plate, a

product that was ultimately found to be outside the scope of the orders. See, e.g., CR/PR at Table CTL-V-6 at n.2. 

Although data from the original investigations showed underselling by subject imports (as well as some overselling),

as explained below, we do not find that there is likely to be significant price underselling by subject imports as

compared to the domestic like product if the finding and orders are revoked.

 427 Commissioner Koplan and Commissioner Lane note that there were no reported pricing data on subject

imports from Mexico during the period of review. See, e.g., CR/PR at Tables CTL-V-1 to CTL-V-6. They observe

that in the first reviews, there were no pricing comparisons for subject imports from Mexico and in the 1993 original

investigations, there were only two pricing comparisons for subject imports from Mexico with margins of

underselling that ranged from 2.0 to 3.8 percent. See, e.g., CR/PR at Table CTL-V-6. With respect to Romania, in

the original 1993 investigations, they note that there were 12 instances of underselling and 1 instance of overselling,

with margins of underselling ranging from 1.9 to 47.6 percent; there were no price comparisons for subject imports

from Romania in the first reviews; and in the current reviews, subject imports from Romania undersold the domestic

like product in 16 instances with margins ranging from 6.9 to 20.6 percent and oversold the domestic like product in

one instance. See, e.g., CR/PR at Table CTL-V-6. Notwithstanding the underselling in the recent periods by some

of the subject imports, they do not find it likely that there will be significant underselling by subject imports in the

event of revocation in the reasonably foreseeable future because the underselling in the recent part of the period of

review was accompanied by large increases in prices in the U.S. market.

 428 See, e.g., CR at CTL-V-23; PR at CTL-V-15; CR/PR at Tables CTL-V-1 to CTL-V-5 and Figures V-3 to V-7.

 429 See, e.g., CR at CTL-V-23 to CTL-V-24; PR at CTL-V-15; CR/PR at Tables CTL-V-1 to CTL-V-5 (showing

an increase between the first quarter of 2000 to the second quarter of 2006 for pricing product 1 from $328.57 per

short ton to $764.07 per short ton; for pricing product 2 from $353.64 per short ton to $779.89 per short ton; for

pricing product 3 from $382.56 per short ton to $799.35 per short ton; for product 4 from $417.43 per short ton to

$866.43 per short ton; and for product 5 from $270.60 per short ton to $647.41 per short ton); CTL Plate Hearing Tr.

at 158-162, 318.

 430 See, e.g., CR at CTL-IV-99; PR at CTL-IV-41. We note that the data from these outside sources are collected

based on different product categories, timing, and commercial considerations, and so may not be directly

(continued...)

76

b. The Current Proceedings

According to the pricing data collected in these reviews,426 U.S. prices of CTL plate showed

relatively little change from 2000 through 2003.427 Substantial price increases for all five products began

in the first quarter of 2004, with some leveling off or small decreases in early 2005, with the exception of

product 5, which showed additional price increases in 2006.428 According to these data, the U.S.

industry’s prices for these products doubled or nearly doubled over the period of review reaching what

are widely characterized as historic levels.429 These trends are consistent with price trends reflected in

data collected by several other sources, including ***.430
 430 (...continued)

comparable.

 431 See, e.g., CR at CTL-IV-100; PR at CTL-IV-41; CR/PR at Table CTL-IV-70.

 432 See, e.g., CR/PR at Table CTL-IV-70.

 433 See, e.g., CR at CTL-IV-102; PR at CTL-IV-41 to CTL-IV-42; CR/PR at Table CTL-IV-71.

 434 See, e.g., CR at CTL-IV-102; PR at CTL-IV-41 to CTL-IV-42; CR/PR at Table CTL-IV-71.

 435 See, e.g., CR at CTL-IV-99; PR at CTL-IV-41.

 436 See, e.g., CR at CTL-IV-102; PR at CTL-IV-42.

 437 See, e.g., CR at CTL-V-2; PR at CTL-V-5.

 438 See, e.g., Joint Respondents’ Prehearing CTL Plate Br. at 1, 67-70; IPSCO/Oregon’s Posthearing CTL Plate

Br. at A-16, Exh. 13; CR/PR at Table CTL-III-9. The spread between total cost of goods sold (“COGS”) on a unit

basis and net unit sales prices was $194 per short ton in 2005 and $197 per short ton in interim 2006. See, e.g.,

CR/PR at Table CTL-III-9.

77

Country-specific monthly transaction prices for hot-rolled plate compiled by MEPS indicate that

for January 2005 through November 2006, U.S. negotiated transaction prices for U.S.-produced hotrolled plate generally decreased over the first three quarters of 2005 before increasing in the fourth

quarter of 2005 and in 2006. In the fall of 2006, they reached their highest price levels for the January

2005 through November 2006 period.431 According to these data, monthly U.S. negotiated transaction

prices for U.S.-produced hot-rolled plate climbed to $*** per short ton by November 2006.432 According

to data compiled by ***, U.S. prices were relatively stable between 2000 and 2003, though clearly

“softer” in 2001 than in any other year. Reported U.S. prices rose sharply over the course of 2004,

retrenched in 2005, but have shown signs of strengthening further in 2006.433 According to this source,

U.S. monthly prices for steel plate increased from $*** per short ton in January 2000 to $*** per short

ton in November 2006.434

Dramatic price increases also occurred in the global market over the period of review. As

reported by MEPS, world prices for hot-rolled plate declined irregularly between January 2000 and

February 2002, decreasing from $283 per short ton to $242 per short ton during that time. Thereafter,

prices recovered, slowly at first, then more rapidly, surpassing $300 per short ton in February 2003, $400

per short ton in March 2004, $500 per short ton in May 2004, and $600 per short ton in September 2004. 

World prices peaked in January 2005 at $686 per short ton, then declined to as low as $586 per short ton

in February 2006 before rebounding to $685 per short ton by September 2006.435 According to ***,

German, U.K., EU, and Japan export prices were relatively stable between 2000 and 2003, but without

the “softness” that characterized the U.S. market in 2001. In contrast, Far East prices proved more

volatile, and, like U.S. prices, did fall to lower levels in 2001. In 2004, all reported prices increased over

the course of the year, though none as sharply as U.S. prices. Far East prices increased only modestly. In

2005, most non-U.S. prices initially increased or at least maintained newly-established levels, but over the

course of the year softened, with the exception of Japan export prices. Through November 2006,

however, non-U.S. prices have largely recovered, with the exception of Japan export prices.436

During this time of increasing demand and increasing prices in both the U.S. and global markets,

raw material and energy costs increased, as discussed above. During the period of review, all 19

responding U.S. producers reported increased CTL plate selling prices as a direct result of higher raw

material prices, and five producers reported implementing raw material surcharges.437 Domestic

producers issued successive price increases of $20, $30, and $20 per short ton for August, September, and

October 2006 shipments, respectively. The spread between raw materials costs and net unit sales prices

grew from $377 per short ton in 2005 to $398 per short ton in the first half of 2006.438 During the period

of review, the margin between scrap and plate prices was at an all time high to the advantage of mini-mill

producers such as Nucor and IPSCO. Even as prices for steel scrap actually plunged by as much as $80
 439 See, e.g., Joint Respondents’ Prehearing CTL Plate Br. at 1, 67-70.

 440 IPSCO reports that its announcement ***. Oregon notes that ***. See, e.g., IPSCO/Oregon’s Posthearing

CTL Plate Br. at 14 n.8, A-16, Exh. 13. Nucor ***. See, e.g., Nucor’s Prehearing CTL Plate Br. at 45-46; Nucor’s

Posthearing CTL Plate Br. at App. 4 at 1. Mittal ***. See, e.g., Mittal’s Posthearing CTL Plate Br. at Responses to

Vice Chairman Aranoff’s Questions at 5.

 441 See, e.g., CR at CTL-V-2; PR at CTL-V-2.

 442 Total imports increased in market share from 4.7 percent in 2003 to 7.1 percent in 2004. See, e.g., CR/PR at

Table C-2.

 443 See, e.g., Joint Respondents’ Prehearing CTL Plate Br. at 70-71; Brazilian Respondents’ Posthearing CTL

Plate Br. at 7 (referring to ***).

 444 See, e.g., Caterpillar’s Posthearing CTL Plate Br. at 5.

78

to $90 per short ton in August 2006, steelmakers nevertheless raised CTL plate prices.439 Although there

is some evidence that the October price increases did not succeed or were not attained in full,440 there is

also evidence that in recent months, U.S. producers have rolled surcharges into their base prices,441 and

current prices remain well above levels at the beginning of the period of review and even at the beginning

of 2004. Notably, these price increases occurred even as total imports of CTL plate increased in 2004.442

In light of this evidence as well as evidence about future demand conditions, although the prices of raw

materials and energy inputs are likely to remain high, we do not find that subject imports are likely to

enter the United States at prices that are likely to have a significant depressing or suppressing effect on

the price of domestic like products or that will significantly undersell the domestic like product.

Domestic interested parties insist that the high and increasing prices in the U.S. market are

unlikely to continue to the extent that demand growth is slowing or demand is declining in the reasonably

foreseeable future. The record indicates otherwise. As we found above, demand in the U.S. market is

likely to remain strong and growing in the reasonably foreseeable future. Inventory destocking is a

regular phenomenon in this industry, and the more current record in these reviews shows that the most

recent inventory destocking that occurred in 2005 had only a temporary effect on prices. Prices continued

to be strong thereafter. Notwithstanding statements by the domestic industry about recent softening in

prices, ***443 ***.444

The record also indicates that global demand is likely to remain strong and growing in the

reasonably foreseeable future. Because, as described above, prices in the home and regional markets of

most subject producers are at least as attractive if not more attractive than prices in the U.S. market, we do

not find it likely that any increased volumes from subject countries in the event of revocation (the level of

which we do not expect to be significant, as explained above) would be likely to be sold at prices that

significantly undersell the domestic like product or that significantly depress prices for the domestic like

product. Given their lack of excess capacity and attractive prices in their existing markets, we do not find

that subject producers have an incentive to price aggressively in order to move significant volumes into

the U.S. market.

As we also discussed above, supply in the U.S. market has been tight, including into 2006, and no

new additions to U.S. production capacity are expected in the reasonably foreseeable future, so it is also

not likely that there will be negative price effects associated with oversupply in the U.S. market.

Based on these findings as well as our finding that the volume of cumulated subject imports from

Belgium, Brazil, Finland, Germany, Poland, Spain, Sweden, Taiwan, and the United Kingdom is not

likely to be significant, we do not find that there is likely to be significant underselling by these subject

imports as compared to the domestic like product, or that imports from these subject countries are likely
 445 Based on these findings as well as their finding that the volume of cumulated subject imports from Belgium,

Brazil, Finland, Germany, Mexico, Poland, Romania, Spain, Sweden, Taiwan, and the United Kingdom is not likely

to be significant, Commissioner Koplan and Commissioner Lane do not find that there is likely to be significant

underselling by these subject imports as compared to the domestic like product, or that imports from these subject

countries are likely to enter the United States at prices that otherwise would have a significant depressing or

suppressing effect on the price of the domestic like product.

 446 We applied the legal standards discussed in section III above. As instructed by the statute, we have also

considered the extent to which any improvement in the state of the domestic industry is related to the antidumping

finding, antidumping duty orders, and countervailing duty orders at issue and whether the industry is vulnerable to

material injury if the orders are revoked. The SAA states that in assessing whether the domestic industry is

vulnerable to injury if the order is revoked, the Commission “considers, in addition to imports, other factors that may

be contributing to overall injury. While these factors, in some cases, may account for the injury to the domestic

industry, they may also demonstrate that an industry is facing difficulties from a variety of sources and is vulnerable

to dumped or subsidized imports.” SAA at 885.

 447 See, e.g., USITC Pub. 970 at 3-7.

 448 See, e.g., USITC Pub. 2664 at 243-44.

 449 See, e.g., USITC Pub. 3364 at 32-33.

79

to enter the United States at prices that otherwise would have a significant depressing or suppressing

effect on the price of the domestic like product.445

5. Cumulated Subject Imports from Belgium, Brazil, Finland, Germany,

Poland, Spain, Sweden, Taiwan, and the United Kingdom Are Not Likely To

Have a Significant Adverse Impact in the Event of Revocation446

a. The Commission’s Original Investigations and First Reviews

In the 1979 original finding, the Commission found that subject imports from Taiwan arrived in

escalating volumes at low prices and caused price declines, price suppression, and lost sales to the

domestic industry.447 In the 1993 original determinations, the Commission found that cumulated subject

imports (including those from Canada which are no longer subject to any orders) had significant volume

and price effects and caused material injury to the domestic industry. It noted the decline of key industry

indicators and the domestic industry’s loss of market share during a time of declining apparent domestic

consumption, as cumulated subject imports contemporaneously increased their market share.448

In the first reviews, the Commission found that the domestic industry’s condition improved

somewhat after imposition of the subject orders but began to decline following multiple subsequent

waves of unfairly traded imports from other countries. Although some of the industry’s indicators

improved at the beginning of the period of review, they declined toward the end of the period of review. 

The Commission found the domestic industry to be in a weakened state, due at least in part to the effects

of the dumped and subsidized imports from non-subject countries that were put under order during the

period of review. Based on its finding that revocation of the orders would likely lead to significant

increases in the volume of cumulated subject imports at prices that would undersell the domestic like

product and significantly suppress or depress U.S. prices, the Commission concluded that the domestic

industry would likely lose market share and experience lower sales and revenues. In turn, the domestic

industry’s profitability and ability to raise capital and make and maintain necessary capital investments

would also be significantly adversely impacted.449
 450 See, e.g., CR/PR at Table III-10.

 451 See, e.g., CR at CTL-III-3 to CTL-III-5; PR at III-4 to III-5.

 452 See, e.g., CR at CTL-III-7; PR at III-5. While one industry forecast predicted rising import levels and service

center inventories, it also supports the Commission’s overall outlook for the CTL plate market and the likely market

conditions in the reasonably foreseeable future. See IPSCO’s Posthearing Brief at Exh. 5 (***). Indeed, the forecast

stated that domestic mills were operating ***, there was ***, ***, ***, and ***.

 453 Vice Chairman Aranoff, Commissioner Koplan and Commissioner Lane note that due to their decision not to

expand the domestic like product to include micro-alloy products, they reviewed data pertaining to the non-alloy

industry, such as that found at CR/PR at Table C-1. Although there are some minor differences in the data, all of the

trends in the industry performance indicators for the data set including micro-alloy are equally applicable to the data

set they examined. Vice Chairman Aranoff, as noted earlier, examined the likely impact of cumulated subject

imports from nine subject countries; Commissioner Koplan and Commissioner Lane examined the likely impact of

cumulated subject imports from all eleven subject countries.

 454 See, e.g., CR/PR at Table C-2, C-1.

 455 See, e.g., CR/PR at Table C-2. U.S. production was 20.0 percent higher in interim 2006 than in interim 2005. 

In addition, U.S. exports increased by 71.9 percent over the period of review, and were 87.9 percent higher in

interim 2006 than in interim 2005. See, e.g., CR/PR at Table C-2.

 456 See, e.g., CR/PR at Table C-2. U.S. shipments were 16.5 percent higher in interim 2006 than interim 2005. 

See, e.g., CR/PR at Table C-2.

 457 See, e.g., CR/PR at Table C-2. Net sales were 20.0 percent higher in interim 2006 than interim 2005. See,

e.g., CR/PR at Table C-2.

 458 See, e.g., CR/PR at Table C-2. Capacity was 3.4 percent higher in interim 2006 than interim 2005. See, e.g.,

CR/PR at Table C-2.

 459 See, e.g., CR/PR at Table C-2. Capacity utilization was 10.6 percentage points higher in interim 2006 than

interim 2005. See, e.g., CR/PR at Table C-2. We note that throughout the period of review, U.S. mills operated at

(continued...)

80

b. The Current Proceedings

We find that the domestic industry is not currently vulnerable. Since the beginning of the period

of review, the domestic industry, through closures, bankruptcies, consolidation, and expansion, has been

significantly restructured and has emerged from this period stronger and fundamentally changed. In

1999, the three largest domestic producers of CTL plate were integrated producers Bethlehem/Lukens,

Geneva, and U.S. Steel. In stark contrast to 1999, the three largest domestic producers now are IPSCO,

Mittal, and Nucor, two of which are non-integrated “mini-mills,” representing approximately *** percent

of domestic non-alloy CTL plate sales in 2005.450 Both Nucor and IPSCO became dominant players in

the domestic CTL plate market after investing in greenfield facilities during the period of review that

were more efficient than the older U.S. facilities and without the burden of legacy costs.451 The integrated

segment of the industry was rationalized and consolidated under one principal producer, Mittal, which, as

the successor in interest to assets acquired in 2003, is not subject to some of the legacy costs or labor

agreements previously associated with those assets.452

Most industry performance indicators improved dramatically during the current period of

review.453 At the start of the period of review, the domestic industry’s production, U.S. shipments, and

net sales quantities declined through 2001 with the economic recession, began to recover in 2002 and

2003, showed dramatic improvement in 2004, and reached full-year period highs in 2005.454 Consistent

with significant increases in demand for CTL plate over the period of review, between 2000 and 2005

U.S. production increased 15.9 percent,455 U.S. shipments increased by 12.1 percent,456 and net sales

increased by 22.0 percent.457 Average production capacity increased by 10.2 percent,458 while capacity

utilization increased by 3.3 percentage points.459 Inventories as a share of total shipments declined by 3.4
 459 (...continued)

higher capacity utilization rates than processors, with mills reaching a period high capacity utilization rate of 82.5

percent in interim 2006. See, e.g., CR/PR at Tables C-2a & C-2b. Moreover, mill capacity includes wide flat bar

capacity. Although bar mills account for only a fraction of overall plate capacity, they account for a disproportionate

share of available capacity. See, e.g., CR at CTL-III-4 n.8; PR at CTL-III-4 n.8. Notwithstanding the domestic

industry’s reported capacity utilization figure of 67.0 percent in 2005, see, e.g., CR/PR at Table C-2, as discussed in

more detail above, numerous purchasers reported tight supply in 2004 and 2005, with most reporting that domestic

mills had placed them on allocation or controlled order entry, and were extending lead times, none of which is

indicative of much excess capacity.

 460 See, e.g., CR/PR at Table C-2. End-of-period inventories as a share of total shipments were 0.7 percentage

points lower in interim 2006 than interim 2005.

 461 See, e.g., CR/PR at Table C-2. Productivity was 5.3 percent higher in interim 2006 than interim 2005.

 462 See, e.g., CR/PR at Table C-2. Unit labor costs were 1.3 percent lower in interim 2006 than interim 2005. 

With respect to the non-alloy CTL plate market, Vice Chairman Aranoff, Commissioner Koplan, and Commissioner

Lane find that between 2000 and 2005 U.S. production increased 12.6 percent, U.S. shipments increased by 8.2

percent, exports increased by 86.6 percent, and net sales increased by 17.4 percent. Average production capacity

increased by 7.0 percent, while capacity utilization increased by 3.0 percentage points. End-of-period inventories as

a share of total shipments declined by 3.5 percentage points, to a full-year period low of 7.0 percent in 2005. 

Although domestic employment decreased by 29.2 percent between 2000 and 2005, productivity increased by 53.5

percent. Moreover, unit labor costs have declined by 31.2 percent over the period of review. They also find

continued improvements in the industry’s performance factors between interim 2005 and interim 2006. See, e.g.,

CR/PR at Table C-1.

 463 See, e.g., CR/PR at Table C-2. Operating income was 13.7 percent higher in interim 2006 than interim 2005.

 464 See, e.g., CR/PR at Table C-2. Gross profits were 13.6 percent higher in interim 2006 than interim 2005.

 465 See, e.g., CR/PR at Table C-2. Operating income as a percentage of net sales was 25.7 percent in interim 2006

compared to 25.9 percent in interim 2005. In terms of the non-alloy CTL plate market, Vice Chairman Aranoff,

Commissioner Koplan, and Commissioner Lane find that gross profits increased irregularly from a loss of $41.7

million in 2000 to a full-year period-high gain of $1.1 billion in 2005, and gross profits increased from $602.5

million in interim 2005 to $667.6 million in interim 2006. Operating income also increased irregularly from a loss

of $153.3 million in 2000 to a full-year period-high gain of $982.3 million in 2005, and increased from $545.5

million in interim 2005 to $598.1 million in interim 2006. Additionally, operating income as a percentage of net

sales declined from negative 8.7 percent in 2000 to negative 13.5 percent in 2001, before increasing irregularly to a

full-year period high of 24.1 percent in 2005, a 32.9 percentage point increase over the period. See, e.g., CR/PR at

Table C-1.

 466 See, e.g., CR/PR at Table C-2.

81

percentage points, to a full-year period low of 7.0 percent in 2005.460 Although domestic employment

decreased by 16.4 percent between 2000 and 2005, productivity increased by 42.1 percent.461 Moreover,

unit labor costs have declined by 27.8 percent over the period of review.462

As noted above, by 2004 the domestic industry began to reap fully the benefits of restructuring

and increased demand for CTL plate, which led to significant increases in prices. That year, the domestic

industry turned operating losses into profits that have continued to increase thereafter. Gross profits

increased irregularly from a loss of $138.0 million in 2000 to a full-year period-high gain of $1.4 billion

in 2005.463 Operating income also increased irregularly from a loss of $135.3 million in 2000 to a fullyear period-high gain of $1.3 billion in 2005.464 Additionally, operating income as a percentage of net

sales declined from negative 6.2 percent in 2000 to negative 9.9 percent in 2001, before increasing

irregularly to a full-year period high of 24.6 percent in 2005, a 30.8 percentage point increase over the

period.465 The largest annual increase in operating income margin (25.5 percentage points from 2003 to

2004) occurred when total imports also had their largest year-over-year increase during the period of

review (from 4.7 percent to 7.1 percent, or 2.4 percentage points).466 In contrast to 2000, when eight of
 467 See, e.g., CR/PR at Table CTL-III-9; EDIS Document 26590. Eleven of fifteen firms reported higher

operating margins in interim 2006 than in interim 2005. See, e.g., CR at CTL-III-20 to CTL-III-21; PR at CTL-III14.

 468 See, e.g., CR/PR at Tables C-2, C-1. Markup is defined on a per-unit basis as (AUV-COGS/COGS).

 469 See, e.g., CR/PR at Table C-2. In terms of the non-alloy CTL plate market, per-unit operating income

substantially improved over the period of review as the increase in per-unit sales value ($353 per short ton) was

much greater than the combined effects of an increase in COGS ($150 per short ton) and a decline in SG&A

expenses ($2 per short ton). See, e.g., CR/PR at Table C-1.

 470 See, e.g., CR/PR at Table C-2. COGS as a share of net sales were 0.2 percent higher in interim 2006 than

interim 2005. In terms of the non-alloy CTL plate market, Vice Chairman Aranoff, Commissioner Koplan, and

Commissioner Lane note that per-unit operating income substantially improved over the period of review as the

increase in per-unit net sales values ($353 per short ton) was much greater than the combined effects of an increase

in COGS ($150 per short ton) and a decline in SG&A expenses ($2 per short ton). Consequently, COGS as a share

of net sales fell irregularly from 102.4 percent in 2000 to 72.9 percent in 2005, a decline of 29.5 percentage points. 

See, e.g., CR/PR at Table C-1.

 471 See, e.g., CR/PR at Table C-2. In terms of the non-alloy CTL plate market, capital expenditures declined from

$*** in 2000 to $*** in 2001, to a period low $20.6 million in 2003, before increasing to $86.1 million in 2005. 

See, e.g., CR/PR at Table C-1.

 472 See, e.g., CR at CTL-III-5 to CTL-III-6; PR at CTL-III-4 to CTL-III-5. While we do not discount the costs

associated with these non-recurring events, which contributed to the losses earlier in the period of review, the

industry is better positioned because of these decisions, as evidenced by its recent profit margins.

 473 Derived from CR/PR at Tables C-2, CTL-III-9. A similar result is obtained when data for the non-alloy CTL

plate industry are examined. (derived from CR/PR at Tables C-1, CTL-III-9).

82

fourteen U.S. mills and processors reported operating losses, by 2005, all fifteen responding U.S. mills

and processors reported operating profits, with ***.467

There is also no evidence of a cost/price squeeze. In 2005, U.S. producers sold CTL plate at

more than a 30 percent mark-up over COGS.468 Per-unit operating income substantially improved over

the period of review as the increase in per-unit net sales values ($363 per short ton) was much greater

than the combined effects of an increase in COGS ($159 per short ton) and a decline in SG&A expenses

($2 per short ton).469 Consequently, COGS as a share of net sales fell irregularly from 100.0 percent in

2000 to 72.5 percent in 2005, a decline of 27.5 percentage points.470

Capital expenditures declined significantly over the period of review (from $*** in 2000 to $***

in 2001, to a period low $23.3 million in 2003, before increasing to $102.7 million in 2005).471 However,

we note that the large spikes in capital expenditures in 2000 and 2001 were associated with the

construction of IPSCO’s and Nucor’s greenfield facilities, which are both modern and efficient.472 While

it is also true that since 2002 depreciation exceeded the domestic industry’s capital expenditures, the

domestic industry’s cash flows since 2004 ($2.9 billion) exceeded capital expenditures, depreciation, and

repayment of negative cash flows from 2000-2003 ($1.9 billion) by more than one billion dollars.473 The

domestic industry’s return on investment also increased dramatically from *** percent in 2000 to 36.0
 474 See, e.g., CR/PR at Table CTL-III-13. Chairman Pearson, Commissioner Hillman, and Commissioner Okun

note that the domestic industry’s return on investment as shown in the staff report does not include data related to

micro-alloy products. They find, however, that since the domestic industry’s operating margins are similar and

generally somewhat higher with the inclusion of micro-alloy plate, compare, e.g., CR/PR at Table C-2 with CR/PR

at Table C-1, it is unlikely that the return on investment for their defined domestic like product would differ much

from the return on investment as shown in the staff report.

 475 See, e.g., CR/PR at Tables C-2, C-1. The increase in capital expenditures in interim 2006 were ***. See, e.g.,

CR/PR at Table CTL-III-12.

 476 In reaching our likely impact conclusion, we have considered but have not relied upon, the impact analysis

presented by domestic interested parties. See, e.g., Nucor’s Prehearing CTL Plate Br. at Exh 1. This analysis is

predicated on subject import volumes of 500,000 short tons to two million short tons, and, as indicated above in our

views on likely volume, we do not believe that this projected volume of subject imports is likely in the reasonably

foreseeable future.

 477 Our finding that these conditions are not likely to change in the reasonably foreseeable future differs from the

finding we made in the 2005 reviews of the orders on Cut-to-Length Carbon-Quality Steel Plate from France, India,

Indonesia, Italy, Japan, and Korea, Invs. Nos. 701-TA-388-391 and 731-TA-816-821 (Reviews), USITC Pub. 3816

(Nov. 2005) (Chairman Pearson and Commissioner Okun dissenting). While it did not find the domestic industry

vulnerable in the 2005 reviews, the Commission majority did not find it likely that the much higher prices that began

in 2004 were likely to continue in the then-reasonably foreseeable future, based on the information available at that

time. See, e.g., USITC Pub. 3816 at 31-32. The Commission majority noted that prices appeared to be falling from

recent highs and that raw material costs had increased. See, e.g., Pub. 3816 at 32. It noted also that the modest

growth in demand then forecast for the U.S. market seemed likely to be insufficient to absorb increased import

volumes from the subject countries (the combined capacity and excess capacity of which far exceed the combined

capacity and excess capacity of the subject producers in the current reviews). See, e.g., Pub. 3816 at 34. The

majority noted in addition that China had recently transitioned to a net exporter of CTL plate, and that many of the

producers at issue in those reviews exported considerable volumes to China and markets to which China would

likely export. See, e.g., Pub. 3816 at 26-27, 30. In contrast with the prior reviews, the record now shows nearly

three years of higher prices, continued growth in apparent U.S. consumption, and additional forecasts for continued

demand growth, including by domestic producers participating in these reviews. Moreover, over the past two-and-ahalf years, the domestic industry has generated profits that are very high by any measure. While the prior record

suggested that this improved financial performance (which at that time had been seen for only one-and-a-half years)

was likely transitory, it is now clear that the domestic industry has performed for so long at such a favorable rate that

it has more than made up for losses and investments made during the early years of the period of review. In

addition, China’s transition to a net exporter of CTL plate is now essentially complete, an event that has occurred

without apparent adverse effects on world prices. See, e.g., Nucor’s Posthearing CTL Plate Br. at App. 2 at 3 (extent

to which Chinese CTL plate production exceeds consumption ***). Finally, unlike the situation in the 2005 reviews,

the foreign producers at issue in these reviews generally do not export to China or other Asian markets, and there is

no evidence that Chinese exports to the foreign producers’ home markets have displaced the subject producers in

their respective home markets to any significant degree. See, e.g., CR/PR at Tables CTL-IV-9, CTL-IV-14, CTLIV-19, CTL-IV-25, CTL-IV-37, CTL-IV-49, CTL-IV-51, CTL-IV-53.

 478 See, e.g., CR at CTL-V-2; PR at V-2.

 479 See, e.g., CR/PR at Tables CTL-V-1 to V-5. For all five pricing products, prices have more than doubled from

the first quarter of 2000 to the second quarter of 2006. Id. Domestic interested parties argue that plate prices have

(continued...)

83

percent in 2005.474 Moreover, the domestic industry has recently increased its capital expenditures

(capital expenditures in interim 2006 were almost double the capital expenditures for full-year 2004).475

The conditions that have enabled the industry to become profitable since 2004 are not likely to

change in the reasonably foreseeable future.476 477 Domestic producers have been able to pass along rising

raw material costs and energy costs through the use of surcharges, which recently have been rolled into

base prices.478 Thus, in 2004 domestic prices rose significantly above their levels from the beginning of

the period examined in these reviews.479 The demand trends in the United States also do not suggest that
 479 (...continued)

begun to fall due to inventory destocking, and that revocation of the orders would further exacerbate these price

declines. As discussed in more detail above, however, inventory destocking is a cyclical event, and even after the

inventory destocking period in 2005, U.S. prices for CTL plate in 2006 were generally higher than prices in 2004. 

Moreover, as also indicated above, we do not find that subject imports from the nine cumulated countries would be

likely to enter the U.S. market in significant volumes if the orders are revoked.

 480 See, e.g., CR/PR at Table C-2. Apparent U.S. consumption was at its period high of 8.6 billion short tons in

2005. See, e.g., CR/PR at Table C-2.

 481 Joint respondent interested parties reported that subject producers have full order books through the end of

2006, and in the transportation and oil sectors some end-users have backlogs extending well into 2007. See, e.g.,

Joint Respondents’ Prehearing CTL Plate Br. at 45-60.

 482 Given that they do not find it likely that there will be a significant volume of subject imports from Belgium,

Brazil, Finland, Germany, Mexico, Poland, Romania, Spain, Sweden, Taiwan and the United Kingdom or that there

will likely be significant price effects from these imports, and because the domestic industry is in a healthy, rather

than vulnerable, condition, Commissioner Koplan and Commissioner Lane conclude that revocation of the

antidumping duty finding and orders and the countervailing duty orders on subject imports from Belgium, Brazil,

Finland, Germany, Mexico, Poland, Romania Spain, Sweden, Taiwan, and the United Kingdom would not likely

have a significant adverse impact on the domestic industry within the reasonably foreseeable future.

 483 We applied the legal standards discussed in section III above.

 484 Commissioner Koplan and Commissioner Lane do not join in the discussion in this section.

 485 For her examination of the likely volume of CTL imports from Mexico, because she defines the domestic like

product differently than Chairman Pearson, Commissioner Hillman, and Commissioner Okun, Vice Chairman

Aranoff refers to data for the non-alloy CTL plate industry such as that summarized in Table C-1.

84

the domestic industry is vulnerable to material injury. The domestic industry’s financial performance

during the period of review occurred during a time of strengthening demand for CTL plate. Apparent

U.S. consumption, for example, increased 11.2 percent from 2000 to 2005, with most of the growth

occurring since 2003.480 Increased demand has continued into 2006, as apparent U.S. consumption was

20.3 percent higher in interim 2006 than in interim 2005. Moreover, as noted in the conditions of

competition discussion supra, U.S. and global demand for CTL plate are forecast to remain strong and

growing in the reasonably foreseeable future.481

Given that we do not find it likely that there will be a significant volume of subject imports from

Belgium, Brazil, Finland, Germany, Poland, Spain, Sweden, Taiwan, and the United Kingdom or that

there will likely be significant price effects, and because the domestic industry is in a healthy, rather than

vulnerable, condition, we conclude that revocation of the antidumping duty finding and orders and the

countervailing duty orders on subject imports from Belgium, Brazil, Finland, Germany, Poland, Spain,

Sweden, Taiwan, and the United Kingdom would not likely have a significant adverse impact on the

domestic industry within the reasonably foreseeable future.482

6. No Likelihood of Continuation or Recurrence of Material Injury Within a

Reasonably Foreseeable Time If the Antidumping and Countervailing Duty

Orders on Subject Imports from Mexico Are Revoked483 484

a. The Likely Volume of Subject Imports from Mexico Would Not Be

Significant in the Event of Revocation485

As discussed in our no discernible adverse impact finding, prior to the imposition of the

antidumping and countervailing duty orders, the volume of subject imports from Mexico did not rise
 486 See, e.g., CR/PR at Table CTL-I-1.

 487 See, e.g., CR/PR at Tables C-2, C-1. AHMSA’s posthearing brief contains revised 1998 and 1999 import

statistics from the U.S. Census Bureau listing the volume of imports from Mexico as 568 tons and 181 tons in 1998

and 1999, respectively. See, e.g., id. citing AHMSA’s Posthearing CTL Plate Br. at Exh. 11.

 488 See, e.g., CR at OVERVIEW-12 to OVERVIEW-15; PR at OVERVIEW-10 to OVERVIEW-12; CR/PR at

Tables CTL-I-8 to CTL-I-9; AHMSA’s Prehearing CTL Plate Br. at 8. Romania and Poland were the only other

subject countries exempted from the safeguards imposed on CTL plate. See, e.g., CR at OVERVIEW-12 to

OVERVIEW-15; PR at OVERVIEW-11 n.30.

 489 See, e.g., CR/PR at Table CTL-IV-31. Mexico’s capacity utilization in 2005 represents a *** increase over its

capacity utilization in the original investigations and the first reviews.

 490 See, e.g., CR/PR at Table CTL-IV-31.

 491 See, e.g., AHMSA’s Prehearing CTL Plate Br. at 12.

 492 Domestic interested parties have argued that Mexico’s export trends to Canada following revocation of the

Canadian antidumping order on CTL plate from Mexico in 2003 showed the Mexican industry’s ability to increase

rapidly its exports following revocation. See, e.g., Mittal’s Prehearing CTL Plate Br. at 16. In 2003, one of the

three major Canadian producers of CTL plate, Stelco, exited the industry, creating a supply deficit that could only be

filled by imports. See, e.g., AHMSA’s Prehearing CTL Plate Br. at Exhibit 15 citing Certain Hot-Rolled Carbon

Steel Plate Original in or Export from Mexico, the People’s Republic of China, the Republic of South Africa and the

Russian Federation, Expiry Review No. RR-2001-006 (Jan. 10, 2003) at 3, 10, 14-15. However, in 2004, when total

CTL plate imports to Canada almost doubled, imports from Mexico declined to ***. In 2005, Canada’s CTL plate

imports from Mexico increased to *** short tons, but this figure represented less than a *** percent share of total

CTL plate imports into Canada. In interim 2006, Mexico’s CTL plate exports to Canada were negligible.

 493 See, e.g., CR/PR at Table CTL-IV-31.

 494 See, e.g., CR at CTL-IV-47; PR at CTL-IV-25. To the extent AHMSA may ship CTL plate to the United

States following revocation, it has stated that it will be to serve a discrete set of multinational companies operating

on both sides of the border that are end-users of CTL plate, as opposed to service centers or distributors. See, e.g.,

CTL Plate Hearing Tr. at 267-68 (Pierce). Since AHMSA cannot meet Mexican demand, and since the U.S.

industry is the largest foreign supplier to the Mexican market, any limited sales by Mexico of CTL plate to these

multinational companies, whose Mexican subsidiaries are already served by AHMSA, are likely to be offset by

increased sales by the domestic industry to Mexican customers.

85

above 1.2 percent of apparent U.S. consumption.486 Since the orders were imposed, subject imports from

Mexico have appeared in the U.S. market in sporadic and minimal volumes, accounting for less than 0.05

percent of apparent U.S. consumption in each year since 1997.487 Subject imports from Mexico have

remained minimal whether compared to apparent U.S. consumption or to U.S. production despite an

exemption from the Section 201 steel safeguards relief that imposed a 30 percent ad valorem tariff on

CTL plate imports effective March 20, 2002, that was reduced to 24 percent on March 20, 2003, and

ultimately terminated by the President on December 4, 2003.488

While reported production capacity for subject CTL plate from Mexico remained flat over the

period of review, capacity utilization rose to *** percent in 2005.489 Mexico’s capacity utilization was

*** percent in interim 2006 as compared to *** percent in interim 2005.490 Due to increasing home

market demand during the period of review, Mexico has become a net importer of CTL plate. Even

operating at full capacity, AHMSA has been able to meet only a little over *** percent of home market

demand, with the remainder being supplied by foreign sources.491

As also discussed supra, AHMSA, the sole Mexican producer of CTL plate, is not exportoriented.492 In each year of the period of review, *** of its CTL plate shipments have been made to the

home market.493 AHMSA reported minimal CTL plate exports to the *** in 2001, and 2005 marked the

only other year it reported exports to any other markets; even then, total exports accounted for only ***

percent of its shipments.494
 495 See, e.g., CR at CTL-IV-51; PR at CTL-IV-26.

 496 See, e.g., CR/PR at Table CTL-IV-31.

 497 For her examination of the likely price effects of CTL imports from Mexico, because she defines the domestic

like product differently than Chairman Pearson, Commissioner Hillman, and Commissioner Okun, Vice Chairman

Aranoff refers to data for the non-alloy CTL plate industry such as that summarized in Table C-1.

 498 See, e.g., CR/PR at Table CTL-V-6.

 499 For her examination of the likely impact of CTL imports from Mexico, because she defines the domestic like

product differently than Chairman Pearson, Commissioner Hillman, and Commissioner Okun, Vice Chairman

Aranoff refers to data for the non-alloy CTL plate industry such as that summarized in Table C-1.

86

The potential for product shifting appears insignificant. AHMSA produces only subject CTL

plate on its production-related equipment.495 Moreover, the industry’s end-of-period inventories as a

share of shipments are low (*** percent in 2005), and were only *** percent in interim 2006 as compared

to *** percent in interim 2005.496

Despite acknowledging these conditions, domestic interested parties have argued that AHMSA is

still likely to ship significant volumes of subject merchandise to the United States due to its planned

capacity expansion. As discussed in our no discernible adverse impact analysis supra, although AHMSA

has announced plans for a large capacity expansion, it still must overcome numerous hurdles even to

obtain the financing for this expansion, and it will be another three years after AHMSA receives financing

before this new capacity can be brought on line. Therefore, this proposed capacity expansion is merely

speculative, and outside the time period that we consider the reasonably foreseeable future.

For all of these reasons, and taking into consideration our findings above concerning the

conditions of competition that are distinctive to this industry, including the sustained rise in CTL plate

prices in the U.S. market described previously, we do not find it likely that the volume of subject CTL

imports from Mexico would be significant, in absolute terms or relative to production or consumption in

the United States, within a reasonably foreseeable time in the event of revocation.

b. There Are Not Likely to Be Significant Price Effects from Subject

Imports from Mexico497

In these reviews, as in the first reviews, no pricing data specific to CTL plate from Mexico were

available to compare to the domestic like product. In the original investigations, imports from Mexico

undersold the domestic like product in two of two comparisons, with margins of underselling of 2.0 and

3.8 percent.498 Since AHMSA has *** available capacity, it has no incentive to price aggressively to

move large volumes of CTL plate into the U.S. market. Given the likely small volume of subject imports

from Mexico in the event of revocation and taking into consideration our findings above concerning the

conditions of competition that are distinctive to this industry, we find that revocation of the antidumping

and countervailing duty orders on subject imports of CTL plate from Mexico would not be likely to lead

to significant underselling or significant price depression or suppression within a reasonably foreseeable

time.

c. Subject Imports from Mexico Are Not Likely To Have a Significant

Adverse Impact in the Event of Revocation499

In evaluating the likely impact on the domestic industry, we note that we have not found that the

domestic industry is vulnerable. Rather, as explained in more detail above, the industry has reported large

profits in 2004, 2005, and interim 2006. Given that we do not find it likely that there will be a significant

volume of subject imports from Mexico or that there will likely be significant price effects from these

imports, and taking into consideration our findings above concerning the conditions of competition that
 500 We applied the legal standards discussed in section III above.

 501 Commissioner Lane and Commissioner Koplan do not join in this section because they have exercised their

discretion to cumulate all eleven subject countries.

 502 See, e.g., CR/PR at Table CTL-I-1.

 503 See, e.g., CR/PR at Table CTL-I-1.

 504 See, e.g., CR at CTL-IV-64; PR at CTL-IV-29.

 505 See, e.g., CR/PR at Table CTL-IV-43.

 506 See, e.g., CR/PR at Table CTL-IV-43; CR at CTL-IV-64; PR at CTL-IV-29. In terms of the subject imports

from Romania into the U.S. market during this time period, subject imports from Romania increased from 6 short

tons in 2000 to 109,969 short tons in 2004, before declining to 49,813 short tons in 2005. Subject imports from

Romania were 3,014 short tons in interim 2005 and zero short tons in interim 2006. See, e.g., CR/PR at Table C-2.

 507 See, e.g., CR/PR at Table C-2. In terms of the non-alloy CTL plate market, Romania’s share of apparent U.S.

consumption peaked at 1.6 percent in 2004, fell to 0.7 percent in 2005, and was 0.1 percent in interim 2005 and zero

in interim 2006. See, e.g., CR/PR at Table C-1.

87

are distinctive to this industry, we find that revocation of the antidumping and countervailing duty orders

on subject imports from Mexico is not likely to lead to a significant adverse impact on the domestic

industry within a reasonably foreseeable time.

Thus, we conclude that revocation of the antidumping and countervailing duty orders on subject

imports from Mexico would not be likely to lead to continuation or recurrence of material injury to the

domestic industry within a reasonably foreseeable time.

7. No Likelihood of Continuation or Recurrence of Material Injury Within a

Reasonably Foreseeable Time If the Antidumping Duty Order on Subject

Imports from Romania Is Revoked500 501

a. The Likely Volume of Subject Imports from Romania

Would Not Be Significant in the Event of Revocation

In the original investigations, even before an order was put into place, the volume of subject

imports from Romania declined irregularly from 31,650 short tons in 1990 to 18,078 short tons in 1992.502

The share of U.S. apparent consumption of CTL plate held by subject imports from Romania likewise

declined in this same period from 0.6 percent to 0.4 percent.503 In the period examined in the first

reviews, subject imports from Romania maintained only a minimal presence in the U.S. market of less

than 0.05 percent of apparent U.S. consumption.

Romanian export data were reported by Mittal Steel Galati, an affiliate of the Mittal Group,

which accounts for substantially all of CTL plate production in Romania.504 During the current review

period, subject exports from Romania increased from *** short tons in 2000 to *** short tons in 2004,

before declining to *** short tons in 2005.505 In interim 2006, exports from Romania to the United States

were *** short tons compared to *** short tons in interim 2005.506 Based on its level of imports into the

United States, Romania’s share of apparent U.S. consumption peaked at 1.3 percent in 2004, fell to 0.6

percent in 2005, and was 0.1 percent in interim 2005 and zero in interim 2006.507

Looking to the reasonably foreseeable future, although several factors suggest that the Romanian

industry has the ability to increase its exports to the United States substantially, we conclude that, given

the incentives facing the Romanian industry, it is unlikely to do so.
 508 See, e.g., CR at CTL-IV-65; PR at CTL-IV-30. Mittal Steel Galati has reported ***.

 509 See, e.g., CR/PR at Table CTL-IV-43.

 510 Derived from CR/PR at Tables CTL-IV-43, C-2. In terms of the non-alloy CTL plate market, Mittal Steel

Galati’s excess capacity in 2005 was equivalent to *** percent of U.S. apparent consumption. (derived from CR/PR

at Tables CTL-IV-43, C-1).

 511 See, e.g., CR/PR at Table CTL-IV-43.

 512 See, e.g., CR/PR at Table CTL-IV-43.

 513 See, e.g., CR/PR at Table CTL-IV-43.

 514 See, e.g., CR/CPR at Table CTL-IV-43.

 515 See, e.g., CR/PR at Table CTL-IV-43.

 516 See, e.g., CR/PR at Table CTL-IV-43.

 517 See, e.g., CR/PR at Table CTL-III-1. Prior to this acquisition, Mittal Steel Galati had no affiliate located in the

United States.

88

The Romanian industry’s productive capacity and production of CTL plate capacity increased

over the period of review. As we found supra, the increase in production capacity in Romania was ***.508

Largely as a result of this action, the Romanian industry’s rate of capacity utilization declined irregularly

from *** percent in 2000 to *** percent in 2005, and it was *** percent in interim 2006 compared to ***

percent in interim 2005.509 Mittal Steel Galati’s excess capacity totaled *** short tons in 2005, an amount

equivalent to *** percent of U.S. apparent consumption.510

Exports from Romania have accounted for more than *** percent of the Romanian industry’s

total shipments since 2000. They constituted *** percent of its shipments in 2000 and *** percent in

2005.511 In interim 2006, exports accounted for *** percent of shipments as compared to *** percent in

interim 2005.512

The Romanian industry’s largest market during the period of review was ***, which accounted

for almost *** percent of its shipments in 2005. The *** was its next largest market, accounting for

nearly *** percent of its shipments in 2005.513 CTL plate exports from Romania to the European Union

grew from *** short tons in 2000 to *** short tons in 2004. While Romanian exports to that market fell

to *** short tons in 2005, they jumped to *** short tons during just the first six months of 2006.514

Exports to the United States accounted for *** percent of the industry’s shipments in 2000,

increased irregularly to *** percent in 2004, before declining to *** percent in 2005.515 Exports to the

United States accounted for less than *** percent of shipments in interim 2006 as compared to ***

percent in interim 2005.516

The Romanian industry’s increased exports to the United States (peaking in 2004), its substantial

available capacity, and its general export orientation are indications that the industry possesses the ability

to ramp up its exports to the United States in the event of revocation. However, we do not find such an

increase to be likely, for the following reasons.

First and foremost, as noted in our cumulation analysis, supra, since April 2005, Mittal Steel

Galati has been in the same corporate group as major U.S. producer Mittal Steel USA. This affiliation

was the result of the acquisition in 2001 of the only Romanian producer by LNM Holdings, an affiliate of

what was eventually to become the Mittal Steel Group, and the April 2005 acquisition of U.S. producer

ISG by Mittal Steel Co. NV.517 This latter acquisition placed Mittal Steel Galati and Mittal Steel U.S.A.,

one of the largest U.S. CTL plate producers during the period of review, within the same corporate

family.

The evidence on the record supports the argument that these corporate realignments largely

explain the recent fall in the volume of subject exports from Romania during the period of review. 

Specifically, prior to Mittal’s acquisition of ISG’s assets in April 2005, the volume of Romania’s exports

to the United States increased from 2000 to 2004. Subsequently, the volume of those exports fell by more
 518 See, e.g., CR/PR at Table CTL-IV-66.

 519 See, e.g., Nucor’s Posthearing CTL Plate Br. at App. 8.

 520 See, e.g., CR at CTL-III-3 n.4; PR at CTL-III-4.

 521 See, e.g., Mittal Steel America’s Importer’s Questionnaire Response at II-5 (projecting ***).

 522 See, e.g., CR/PR at Tables C-2, C-1.

 523 See, e.g., Mittal USA’s Producer’s Questionnaire Response at II-12 and II-13.

 524 See, e.g., CR at CTL-IV-114; PR at CTL-IV-47. The record indicates that only a few procedural hurdles

remained before Romania’s entry into the European Union. See, e.g., id.

 525 See, e.g., CR at CTL-IV-113 to CTL-IV-114; PR at CTL-IV-47.

 526 See, e.g., CR/PR at Table CTL-IV-69.

 527 See, e.g., CR/PR at Table CTL-IV-70.

 528 See, e.g., CR/PR at Table CTL-IV-43.

89

than *** from 2004 to 2005, and such volumes were sharply lower at *** short tons in interim 2006 than

at *** short tons during interim 2005.518 We find that the close corporate affiliation between the

Romanian and U.S. divisions of the Mittal Steel Group makes it unlikely that Mittal Steel Galati will

move aggressively to capture U.S. market share or sell its products in a manner that would have a

negative effect on the prices that Mittal Steel USA receives.

Domestic producer Nucor argues that Mittal’s U.S. and Romanian operations ***. Nucor argues

that Mittal will sell domestically-produced plate when it can do so at a profit and will import CTL plate

from other Mittal mills when that is profitable. Nucor cautions that the Commission cannot assume that

Mittal will control imports from Mittal Steel Galati so as to avoid injury to the U.S. CTL plate industry as

a whole.519

The fact that Mittal Steel U.S.A. has devoted ***520 does present at least the possibility that it will

rationalize production to some extent by sourcing more *** from Romania. However, Mittal’s importing

arm has indicated that it ***.521 This is consistent with the *** subject imports from Romania in interim

2006.522 Moreover, the record indicates that Mittal Steel USA manufactures a full range of CTL plate

products,523 thus making it difficult for Mittal Steel NV to avoid harm to its U.S. operations should it

choose to import subject merchandise from Romania.

In addition, although Mittal Steel Galati exported significant quantities of CTL plate to diverse

markets during the period of review, the European Union is likely to become a more attractive market for

Romanian exports in the reasonably foreseeable future, if not in the immediate future. As of the closing

of our record, Romania’s membership to the European Union was scheduled to be ratified by early

2007.524 As discussed above, accession to EU membership eliminates customs duties between Member

States, removes internal border restrictions, and facilitates access to a market of some 450 million

consumers with a total gross domestic product of more than $11 trillion.525 As also noted above, demand

in Europe is forecast to continue to increase as compared to the current level.526 Recent EU market prices

have been comparable to U.S. prices, and thus, after factoring in the additional transportation costs

associated with sales to the United States, the European Union is the more likely destination for any

additional Romanian exports.527 As noted above, Mittal Steel Galati’s exports to the European Union ***

of its total shipments.528 To the extent that Mittal Steel Galati will shift its exports in the coming years, it

will be more likely to redirect those exports to markets within the European Union rather than to more

distant markets such as the United States.
 529 See, e.g., CR at CTL-IV-68; PR at CTL-IV-30. In its most recent fiscal year, sales of CTL plate accounted for

*** percent of Mittal Steel Galati’s total sales. See, e.g., CR at CTL-IV-64; PR at CTL-IV-29. Mittal Steel Galati

does not produce non-subject steel plate or specifically excluded CTL plate. See, e.g., CR/PR at Table CTL-IV-46.

 530 See, e.g., CR/PR at Table CTL-IV-42. Mittal Steel Galati ***.

 531 See, e.g., CR/PR at Table CTL-V-6.

 532 See, e.g., CR/PR at Table CTL-V-6.

 533 See, e.g., CR/PR at Tables V-1 to V-5.

 534 See, e.g., CR/PR at Tables CTL-V-1 to V-6.

 535 See, e.g., CR/PR at Tables CTL-V-1 to V-5; CTL-I-1. In 2005, U.S. prices for CTL plate represented a ***

percent mark-up over cost of goods sold.

90

Mittal Steel Galati reported that CTL plate is not produced on machinery used in the production

of other products, and also reported that it is ***.529 Thus the potential for product shifting appears to be

limited. Moreover, the Romanian industry’s end-of-period inventories as a share of shipments were ***

percent in 2005, significantly lower than they were in the original investigations (*** percent) and the

first reviews (*** percent).530

For all of these reasons, while some imports of subject CTL plate from Romania are possible if

the order on Romania were revoked, we do not find it likely that the volume would be significant, either

in absolute terms or relative to U.S. production or consumption, within a reasonably foreseeable time.

b. There Are Not Likely to Be Significant Price Effects from Subject

Imports from Romania

In the original investigations, imports from Romania undersold the domestic like product in 12 of

13 comparisons, with margins of underselling ranging from 1.9 to 47.5 percent.531 In the first reviews, no

price data specific to CTL plate from Romania were available to compare to the domestic like product.

In the current reviews, imports from Romania undersold the domestic like product in 16 of 17

comparisons, with margins of underselling ranging from 6.9 to 35.0 percent.532 We note, however, that

notwithstanding this underselling, prices for all five pricing products have more than doubled since

2000.533 Notably, in 2004, when subject imports from Romania were at their highest levels for the period

of review, all five pricing products experienced their greatest increases in price.534 With the expectations

for continued increased demand in both the global and U.S. markets, prices for CTL plate in the United

States are likely to continue to remain strong. Domestic producers have been able to pass along raw

material and energy costs through the use of surcharges, which have recently been rolled into base prices. 

We note that the domestic industry raised prices even with an increase in total imports in 2004 and

2005.535

As noted above, we do not expect the likely volume of subject imports from Romania to be

significant. As a result, although price is an important consideration for purchasers, we do not find it

likely that the additional volumes of subject imports from Romania will lead to significant price declines.

Nor, in a time of likely increasing apparent U.S. consumption, do we expect subject imports from

Romania to significantly suppress or depress U.S. prices. As noted above, Mittal Steel Galati would not

have an incentive to drive U.S. prices down since to do so would have negative effects on its U.S.

affiliate.

Consequently, although some underselling may continue upon revocation of the order, taking into

consideration the conditions of competition distinctive to this industry, we find that the likely modest

volumes of lower-priced subject imports from Romania in the event of revocation will not place

significant downward pressure on U.S. prices.
 536 In the first reviews, Commissioner Stephen Koplan noted that in 1999 Corus, the sole producer of plate in the

United Kingdom, fully owned Tuscaloosa Steel, a significant U.S. producer of plate. He found that Corus made

substantial investments upgrading and expanding Tuscaloosa’s steel production facilities, and that any imports from

the U.K. would likely enter the East Coast or Gulf Coast, both substantial markets for Tuscaloosa Steel. In

exercising his discretion not to cumulate subject imports from the United Kingdom, Commissioner Koplan found

(continued...)

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Given the likely small volume of subject imports from Romania if the order were revoked, we

find that revocation of the antidumping duty order on subject imports of CTL plate from Romania would

not be likely to lead to significant underselling by the subject imports as compared to the domestic like

product or that subject imports from Romania are likely to enter the United States at prices that otherwise

would have a significant depressing or suppressing effect on the price of the domestic like product. 

Therefore, we conclude that revocation of the order is not likely to lead to any significant adverse price

effects.

c. Subject Imports from Romania Are Not Likely To Have a

Significant Adverse Impact in the Event of Revocation

In evaluating the potential impact on the domestic industry of revocation of the antidumping duty

order on subject imports from Romania, we note that we have not found that the domestic industry is

vulnerable. Instead, as explained in more detail above, the industry has reported large profits in 2004,

2005, and interim 2006. Given that we do not find it likely that there will be a significant volume of

subject imports from Romania or that there will likely be significant price effects, and taking into

consideration the conditions of competition distinctive to this industry, we find that revocation of the

antidumping duty order on subject CTL plate imports from Romania is not likely to lead to a significant

adverse impact on the domestic industry within a reasonably foreseeable time.

Thus, we conclude that revocation of the antidumping duty order on subject imports of CTL plate

from Romania would not be likely to lead to continuation or recurrence of material injury to the domestic

industry within a reasonably foreseeable time.

CONCLUSION

For the foregoing reasons, we find that revocation of the countervailing duty orders on CTL plate

from Belgium, Brazil, Mexico, Spain, and Sweden, the antidumping duty orders on CTL plate from

Belgium, Brazil, Finland, Germany, Mexico, Poland, Romania, Spain, Sweden, and the United Kingdom,

as well as the antidumping finding on CTL plate from Taiwan would not be likely to lead to continuation

or recurrence of material injury to an industry in the United States within a reasonably foreseeable time.

V. SEPARATE VIEWS OF COMMISSIONER STEPHEN KOPLAN AND COMMISSIONER

CHARLOTTE R. LANE ON CUMULATION WITH RESPECT TO CUT-TO-LENGTH

PLATE PRODUCTS

Based on the record in these five-year reviews, we concur with the Commission’s majority that,

under section 751 (c) of the Tariff Act of 1930, as amended, revocation of the antidumping finding, and

antidumping and countervailing duty orders on certain imports of flat-rolled carbon steel cut-to-length

plate products (“CTL plate”) from Belgium, Brazil, Finland, Germany, Mexico, Poland, Romania, Spain,

Sweden, Taiwan, and the United Kingdom would not be likely to lead to continuation or recurrence of

material injury in the United States within a reasonably foreseeable time. We separately present our

views on cumulation to explain our decision to exercise our discretion to cumulate subject imports from

all eleven countries.536
 536 (...continued)

that these “conditions of competition position Corus very differently from all other subject producers given that no

other subject producer in any subject country has such a relationship with a domestic producer,” and that Corus’

“participation in the domestic market is likely to be altered by its relationship with – and significant investment in –

Tuscaloosa Steel.” USITC Pub. 3364 at 59-61. In 2004, Corus sold its Tuscaloosa plant in Alabama to Nucor and

no longer has any production facilities in the United States. CR at CTL-IV-84; PR at CTL-IV-37. In light of this

change in conditions of competition, Commissioner Koplan now finds no compelling reason to not cumulate subject

imports from the United Kingdom with imports from the other subject countries in the current reviews.

 537 Although it noted that Canada and Mexico did not appear to export substantial quantities of subject plate, the

Commission found that subject imports from these countries were still likely to have a discernible adverse impact on

the domestic industry because “of their geographic proximity to the United States” as well as the fact that Mexican

producer AHMSA was under bankruptcy protection, “an indication that it would have an incentive to maximize plate

production and sales.” USITC Pub. 3364 at 20 n.101.

 538 In declining to exercise its discretion to cumulate subject imports from Canada due to differences in conditions

of competition, the Commission noted that only one major Canadian plate mill, Stelco, remained subject to the order. 

The Commission found that Stelco “rarely exported significant quantities of subject plate to any country.” USITC

Pub. 3364 at 19. Moreover, record evidence showed that Canada was a net importer of plate (with much of its

imports originating from the United States), that demand for plate in Canada was strong, and that Canada had

antidumping orders in place with respect to several countries. See, e.g., id.

 539 Commissioner Koplan and Commissioner Askey dissented with respect to the United Kingdom. For the

reasons stated by the majority, Commissioner Koplan found that the likely imports from the United Kingdom would

have a discernible adverse impact on the domestic industry, and that there was likely to be a reasonable overlap of

competition among the subject imports from the United Kingdom and between those subject imports and the

domestic merchandise upon revocation of the order. However, Commissioner Koplan noted that in 1999 Corus, the

(continued...)

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Except as noted in the majority CTL plate opinion, we join the Commission’s determinations

with respect to summary, background, legal standards, domestic like product and industry, conditions of

competition, likely volume and price effects, and likely impact on the domestic industry in the event of

revocation of the subject finding and orders. As noted throughout those discussions, we examined the

likely volume, likely price effects, and likely impact of cumulated imports from all eleven subject

countries on the domestic industry producing non-alloy CTL plate. We write separately to explain our

findings with regard to cumulation.

A. Framework and Background

We applied the legal standards for cumulation discussed in section III of the Views of the

Commission. 

In the first reviews, the Commission found, based on the available information on capacity,

production, product mix, and export orientation,537 as well as the “weakened condition of the U.S.

industry,” that the subject imports from Belgium, Brazil, Canada, Finland, Germany, Mexico, Poland,

Romania, Spain, Sweden, Taiwan, and the United Kingdom each would be likely to have a discernible

adverse impact on the domestic industry if the finding and orders were revoked. The Commission also

found that there likely would be a reasonable overlap of competition between subject imports from all of

those countries under review and the domestic like product, and among the subject imports from all of

those countries, if the finding and orders were revoked. The Commission did not find any significant

differences in the conditions of competition among those subject countries, except for Canada, with

respect to which the order was revoked during those reviews and is therefore not subject to the current

reviews.538 For these reasons, the Commission exercised its discretion to cumulate subject imports from

Belgium, Brazil, Finland, Germany, Mexico, Poland, Romania, Spain, Sweden, Taiwan, and the United

Kingdom.539
 539 (...continued)

sole producer of plate in the United Kingdom at the time of the first reviews, fully owned Tuscaloosa Steel, a

significant U.S. producer of plate. Commissioner Koplan noted that Corus had made substantial investments

upgrading and expanding Tuscaloosa’s steel production facilities, and that any imports from the United Kingdom

would likely enter the East Coast or Gulf Coast, both substantial markets for Tuscaloosa Steel. In declining to

exercise his discretion to cumulate subject imports from the United Kingdom, Commissioner Koplan noted that

these “conditions of competition position Corus very differently from all other subject producers given that no other

subject producer in any subject country has such a relationship with a domestic producer,” and that Corus’

“participation in the domestic market is likely to be altered by its relationship with – and significant investment in –

Tuscaloosa Steel.” See, e.g., USITC Pub. 3364 at 59-61.

 540 See Allegheny Ludlum Corp. v. United States, Slip Op. 06-188, U.S. Court of International Trade (Dec. 22,

2006).

 541 We find that cross-cumulation of dumped and subsidized subject imports is appropriate as an exercise of our

discretion. See, e.g., Sugar from the European Union, and Sugar from Belgium, France, and Germany, Invs. Nos.

104-TAA-7 (Second Review) and AA1921-198-200 (Second Review), USITC Pub. 3793 at 11, n.47 (Aug. 2005).

 542 In the first reviews, the Commission found, based on the available information on capacity, production,

product mix, and export orientation, as well as the “weakened condition of the U.S. industry,” that the subject

imports from Belgium, Brazil, Canada, Finland, Germany, Mexico, Poland, Romania, Spain, Sweden, Taiwan, and

the United Kingdom each would be likely to have a discernible adverse impact on the domestic industry if the orders

were revoked. Although it noted that Canada and Mexico did not appear to export substantial quantities of subject

plate, the Commission found that subject imports from these countries were still likely to have a discernible adverse

impact on the domestic industry because “of their geographic proximity to the United States” as well as the fact that

Mexican producer AHMSA was under bankruptcy protection, “an indication that it would have an incentive to

maximize plate production and sales.” USITC Pub. 3364 at 20 n.101.

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The threshold criterion for cumulation in these reviews is satisfied because all of the reviews of

CTL plate were initiated on the same day.

We consider three issues in deciding whether to exercise our discretion to cumulate the subject

imports: (1) whether imports from any of the subject countries are precluded from cumulation because

they are likely to have no discernible adverse impact on the domestic industry; (2) whether imports of

CTL plate from the subject countries are likely to compete with each other and with the domestic like

product; and (3) differences in the likely conditions of competition of the subject imports with regard to

their participation in the U.S. market for CTL plate. In so doing, we take into account the various

arguments by the parties. Our focus in a review investigation is not only on present conditions of

competition, but also on likely conditions of competition in the reasonably foreseeable future.540 

We determine that (1) subject imports from Belgium, Brazil, Finland, Germany, Mexico, Poland,

Romania, Spain, Sweden, Taiwan, and the United Kingdom, assessed individually, are not likely to have

no discernible adverse impact on the domestic industry in the event of revocation; (2) subject imports

from these countries are likely to compete with each other and with the domestic like product in the event

of revocation; and (3) many of the likely conditions of competition faced by subject imports from each of

these subject countries are similar. Therefore, we exercise our discretion to cumulate subject imports

from all eleven subject countries.541

B. Likelihood of No Discernible Adverse Impact

We consider all relevant factors in analyzing “no discernible adverse impact” in these reviews. 

Based on the record, we do not find that subject imports from Belgium, Brazil, Finland, Germany,

Mexico, Poland, Romania, Spain, Sweden, Taiwan, or the United Kingdom are likely to have no

discernible adverse impact on the domestic industry if the antidumping finding, antidumping duty orders,

and countervailing duty orders on imports from those countries are revoked.542
 543 See, e.g., CR/PR at Tables CTL-C-1, CTL-IV-9 (*** percent for Belgium), CTL-IV-14 (*** percent for

Brazil), CTL-IV-19 (*** percent for Finland), CTL-IV-25 (*** percent for Germany), CTL-IV-31 (*** percent for

Mexico), CTL-IV-37 (*** percent for Poland), CTL-IV-43 (*** percent for Romania), CTL-IV-48 (*** percent for

Spain), CTL-IV-50 (*** percent for Sweden), CTL-IV-53 (*** percent for Taiwan), and CTL-IV-58 (*** percent

for the United Kingdom).

 544 In 2005, total exports of CTL plate as a percentage of total shipments for subject industries ranged from a low

of *** percent for the *** industry to a high of *** percent for the *** industry. See, e.g., CR/PR at Tables CTLIV-9, CTL-IV-14, CTL-IV-19, CTL-IV-25,CTL-IV-31, CTL-IV-37, CTL-IV-43, CTL-IV-49, CTL-IV-51, CTL-IV53, and CTL-IV-58.

 545 See, e.g., Domestic Interested Parties’ Questionnaire Responses at II-13, II-14; CR/PR Tables CTL-IV-10,

CTL-IV-11 (Belgium), CTL-IV-15, CTL-IV-16 (Brazil), CTL-IV-20, CTL-IV-21 (Finland), CTL-IV-26, CTL-IV-27

(Germany), CTL-IV-32, CTL-IV-33 (Mexico), CTL-IV-38, CTL-IV-39 (Poland), CTL-IV-44, CTL-IV-45

(Romania), CTL-IV-54, CTL-IV-55 (Taiwan), and CTL-IV-59, CTL-IV-60 (United Kingdom). Publicly available

data from Sweden indicates that “heavy plate” constituted the majority of SSAB’s plate production during the

period of review, although the company has stated that it plans on reducing the volume of heavy plate production in

favor of high-strength steel and other niche products. See, e.g., CR at CTL-IV-75; PR at CTL-IV-33. The record

contains no information regarding the product mix from Spain.

 546 See, e.g., CR at CTL-II-21, PR at II-19.

 547 See, e.g., CR/PR at Table CTL-II-5.

 548 See, e.g., CR/PR at Table CTL-V-6. In these reviews, subject imports from Germany and Romania undersold

the domestic like product. See Commission’s Views on Cut-to-Length Plate, for a discussion of pricing comparisons

for the other subject countries in the original investigations.

94

Relative to the U.S. market, the size of the CTL plate industry in each of these countries is

significant. In 2005, the capacity in each subject country was equivalent to at least *** percent of

apparent U.S. consumption.543 Each country has the capacity to produce a large range of plate products,

and the actual production of subject plate is significant in each country. Moreover, the CTL plate

industries in all of the subject countries are globally recognized, and all subject countries export subject

plate, although to varying degrees.544 Prior to the imposition of the antidumping finding, antidumping

duty orders, and countervailing duty orders, subject imports from each country were present in the U.S.

market, and we find that upon revocation of the orders, subject imports from each country are likely to

have at least some presence in the U.S. market.

With respect to product mix, the types of plate products manufactured and exported in each of the

subject countries do not differ dramatically from the types of plate produced in the United States.545

Imports from each of the subject countries are likely to be substitutable for, and competitive with,

domestically produced plate.546 Such competition is likely to be based, at least in part, on price, in light of

the importance of price in purchasing decisions.547 Producers in each country undersold U.S. producers at

times during the original investigation period, and, in the case of Germany and Romania, during this

review period as well.548 Accordingly, we cannot conclude that subject imports from Belgium, Brazil,

Finland, Germany, Mexico, Poland, Romania, Spain, Sweden, Taiwan, and the United Kingdom would be

likely to have no discernible adverse impact on the domestic industry in the event of revocation of orders

covering those imports.

C. Likelihood of a Reasonable Overlap of Competition

In assessing likely competition for purposes of cumulation in original investigations, the

Commission generally has considered four factors intended to provide a framework for determining

whether the imports compete with each other and with the domestic like product: (1) fungibility; (2) sales

or offers in the same geographic markets; (3) common or similar channels of distribution; and
 549 See Certain Cast-Iron Pipe Fittings from Brazil, the Republic of Korea, and Taiwan, Invs. Nos. 731-TA-278 to

280 (Final), USITC Pub. 1845 (May 1986), aff'd, Fundicao Tupy, S.A. v. United States, 678 F. Supp. 898 (Ct. Int'l

Trade 1988), aff'd, 859 F.2d 915 (Fed. Cir. 1988); Mukand Ltd. v. United States, 937 F. Supp. 910, 915 (Ct. Int’l

Trade 1996)).

 550 In the original investigations and the first reviews the Commission stated that specialized or “niche” products

constituted only a small percentage of imports from any one country, and that subject countries continue to produce

substantial volumes of commodity CTL plate that accounted for a large share of the U.S. market. See, e.g., USITC

Pub. 2664 at 20; USITC Pub. 3364 at 21; USITC Pub. 3587 at 9 (Remand Determination).

 551 See, e.g., CR/PR at Table CTL-II-8. Large numbers of purchasers and importers reported that they had no

familiarity with imports from all or most of the subject countries. A majority of purchasers also stated that imported

and U.S. produced CTL plate are generally used in the same applications.

 552 See, e.g., CR/PR at Table CTL-II-8.

 553 See, e.g., CR at CTL-II-29 to CTL-II-30; PR at CTL-II-19 to CTL-II-20. Twelve purchasers reported that

certain grades, types, or sizes of CTL plate are available from only a single source. *** reported that abrasionresistant material is only available from Sweden, Germany, and Canada, while *** reported that Germany has a

patented material with a unique composition. See, e.g., CR at CTL-II-25; PR at CTL-II-16.

 554 See, e.g., CR/PR at Table CTL-II-7. No purchaser completed the comparison between the United States and

Belgium, Brazil, Finland, Spain, Taiwan, or the United Kingdom, although five purchasers completed the

comparison between the United States and “all foreign countries.”

95

(4) simultaneous presence.549 In five-year reviews, the relevant inquiry is whether there likely would be a

reasonable overlap of competition even if none currently exists because the subject imports are absent

from the U.S. market. We consider these four factors in addition to those discretionary factors discussed

below with respect to subject imports from Belgium, Brazil, Finland, Germany, Mexico, Poland,

Romania, Spain, Sweden, Taiwan, and the United Kingdom. 

In these reviews, the record indicates that domestically produced and imported CTL plate are

fungible products. Consistent with the Commission’s findings in the original investigations and the first

reviews, the record in the current reviews indicates that the domestic like product and subject imports

from all eleven subject countries are generally substitutable.550 For example, out of 113 responses from

purchasers expressing familiarity with imports from subject countries, 45 reported CTL plate from these

eleven subject countries to be “always” interchangeable with U.S. produced CTL plate, 33 reported CTL

plate from these eleven subject countries to be “frequently” interchangeable with U.S.-produced CTL

plate, 34 reported CTL plate from these eleven subject countries to be “sometimes” interchangeable with

U.S. produced CTL plate, and only one reported CTL plate from these eleven subject countries to be

“never” interchangeable with U.S.-produced CTL plate.551 A vast majority of importers expressing

familiarity with subject imports, 55 of 60, reported CTL plate from these subject countries to be “always”

or “frequently” interchangeable with U.S.-produced CTL plate.552 Moreover, a vast majority of importers

and purchasers expressing familiarity with subject imports reported that imports from subject countries

were used interchangeably. A majority of purchasers reported that country of origin was rarely or never a

factor in purchasing decisions.553 Purchasers were asked to compare domestic and subject CTL plate

products on the basis of 20 ranking factors, and, although responses were limited, purchasers found that

the U.S. product was generally comparable to, and sometimes superior to, subject imports.554

German and U.K. producers were the only respondent interested parties to present arguments

regarding the likelihood of a reasonable overlap of competition. They both argued that their exports are

not substitutable for the domestic product because they currently export specialty CTL plate, and ***. 

However, the record refutes their contentions. Eleven of 14 importers and purchasers expressing

familiarity with imports from the United Kingdom reported that such imports were “always” or

“frequently” interchangeable with U.S.-produced CTL plate, while 16 of 20 importers and purchasers

expressing familiarity with imports from Germany reported that such imports were “always” or
 555 See, e.g., CR/PR at CTL-Table II-8. German producers reported that *** See, e.g., CR at CTL-II-11 n.16; PR

at CTL-II-7 n.16.

 556 See generally, Chefline Corp. v. United States, 219 F. Supp. 2d 1313, 1314 (Ct. Int’l Trade 2002) (“The statute

and legislative history are clear: the Commission is not required to find that subject imports currently compete in the

U.S. market.”); cf. SAA at 888 (regional industry); see also, e.g., Granular Polytetrafluoroethylene Resin from Italy

and Japan, Invs. Nos. 731-TA-385 to 386 (Second Review), USITC Pub. 3823 at 13-14 (Dec. 2005). (“While

subject imports from Japan currently consist of niche products, the current composition of subject imports is affected

by the discipline of the antidumping duty orders and thus not necessarily indicative of likely post-revocation

behavior.”) (finding a likely reasonable overlap of competition).

 557 USITC Pub. 3364 at 22.

 558 See, e.g., CR at CTL-II-3; PR at CTL-II-3; CR/PR at Table CTL-II-2. Seven of nineteen producers and seven

of fifteen importers reported selling nationwide during the review period.

 559 We note that there have been only limited imports of subject merchandise from Mexico during the period of

review. With respect to Romania, we note that there have been imports of subject merchandise throughout the

period of review. See, e.g., CR/PR at Table C-1.

 560 USITC Pub. 3364 at 21.

96

“frequently” interchangeable with U.S.-produced CTL plate.555 Moreover, the record shows that both

U.K. and German producers produce and export to non-U.S. markets significant quantities of carbon

structural steel plate less than four inches thick, which are directly substitutable for U.S. produced CTL

plate. Although U.K. and German producers do not currently compete in the U.S. market to any

significant degree, the focus of the Commission’s inquiry here is on “likely,” not current, competition.556

We, therefore, conclude that subject imports from Belgium, Brazil, Finland, Germany, Mexico,

Poland, Romania, Spain, Sweden, Taiwan, and the United Kingdom are sufficiently fungible with one

another and with the domestic like product.

With respect to geographic overlap and simultaneous presence, in the first reviews, the

Commission found that the record was “mixed” concerning simultaneous market presence and geographic

overlap, but found that, “in light of the importance of sales to steel service centers, which are dispersed

throughout the United States and hold sizeable plate inventories, we find it likely that subject imports

from each subject country would be simultaneously present in the U.S. market as a whole and in the same

geographical markets as other subject imports and the domestic like product.”557

Similar to the record in the first reviews, the record in the current reviews is mixed regarding

geographic overlap and simultaneous presence in the market. The record continues to reflect that current

producers and importers as a whole reported nationwide sales. Subject imports were also generally

available in multiple regions of the country during the review period.558

Subject imports from some subject countries were not present during some of the current review

period. Imports of subject merchandise from all subject countries have declined substantially since the

orders were imposed. There were reportedly no imports of subject CTL plate from Belgium (except in

2005), Brazil, Finland, Poland, Taiwan, and the United Kingdom (except in 2003).559 According to

official import statistics, there were no imports of subject CTL plate from Spain in 2001, and from 2003

through 2005, and from Sweden in 2003. Prior to the imposition of the orders, subject imports from each

country were present in the U.S. market, and we find that upon revocation of the orders, subject imports

from each country are likely to have at least some presence in the U.S. market.

The record also indicates that there is sufficient overlap in the channels of distribution for

domestic and imported CTL plate. In the first reviews, the Commission found that “domestic producers

and importers ship plate to end users, distributors, and service centers.”560 This is generally consistent
 561 See, e.g., CR at CTL-II-1; PR at CTL-II-1.

 562 See Siderca S.A.I.C. v. United States, 391 F. Supp. 2d 1353, 1364-65 (Ct. Int’l Trade 2005) (For cumulation in

reviews, “[t]here is no requirement that the ITC find that all four subfactors are independently supported by a

‘likeliness’ determination.”), citing Wieland Werke, 718 F. Supp. at 50.

 563 USITC Publication 3364 at 33 (Nov. 2000).

 564 Id. at 30.

 565 Id.

 566 CR/PR at Table CTL-I-1.

 567 Id.

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with the record in the current reviews, although there were too little data reported to comment specifically

on imports from subject countries.561

On balance, we find that subject imports from all eleven subject countries would be sufficiently

fungible, move in the same channels of distribution, and compete in the same geographic markets during

the same periods. We, therefore, conclude that there would likely be a reasonable overlap of competition

among subject imports from Belgium, Brazil, Finland, Germany, Mexico, Poland, Romania, Spain,

Sweden, Taiwan, and the United Kingdom and between these subject imports and the domestic like

product in the event of revocation.562

D. Other Considerations

In determining whether to exercise our discretion to cumulate subject imports from all eleven

subject countries, we assess whether the subject imports from each country are likely to compete under

similar conditions of competition in the U.S. market.

 In the first reviews, the Commission cumulated subject imports from Belgium, Brazil, Finland,

Germany, Mexico, Poland, Romania, Spain, Sweden, Taiwan and the United Kingdom, noting that it did

not find “any significant differences in the conditions of competition” among those countries.563 The

Commission noted that relative to the U.S. market, the size of the CTL plate industry in each cumulated

subject country was significant and each industry maintained substantial production capacity.564 The

Commission also indicated that the “majority of the countries export a substantial percentage of their

production.”565

The record in these reviews continues to show that there are no significant differences in the

conditions of competition among subject imports. We conclude, consistent with the Commission’s

determinations in the first reviews, that subject imports from each of the eleven subject countries remain

likely to compete under similar conditions of competition in the U.S. market. We discuss additional other

considerations specifically regarding Mexico and Romania below.

Mexico. Consistent with the Commission’s findings in the first reviews, we find that subject

imports from Mexico and other subject countries are likely to compete under similar conditions of

competition in the U.S. market. In the original investigations, the sole Mexican CTL plate producer,

AHMSA, clearly demonstrated both the ability and economic incentive to ship to the U.S. market in high

volumes. Subject plate imports from Mexico increased from 19,343 short tons in 1991 to 59,993 short

tons in 1992, the final year of the period of investigation.566 Additional volumes of subject imports from

Mexico also entered the U.S. market during the first review.567

AHMSA maintains the ability to ship subject product to the U.S. market upon revocation. 

Mexican CTL plate capacity has increased since the original investigations, rising from *** short tons in

1992 to *** short tons in 2005. Although AHMSA has primarily served the Mexican market in recent

years, this trend may not continue. Domestic interested parties contend that Mexico’s home market is

becoming saturated with low-priced Chinese exports, which could shift at least some of the Mexican
 568 See, e.g., Mittal’s Posthearing CTL Plate Br., at Answers to Commissioner Hillman’s Questions at 7.

 569 See, e.g., AHMSA’s Prehearing CTL Plate Brief at Exh. 28. 

 570 See e.g., CR/PR at Table CTL-IV-31.

 571 See e.g., Letter from Juan Castillo Ramirez, Legal Representative of AHMSA, Dec. 4, 2006, pp. 1-2. 

 572 See e.g., CR/PR at Table CTL-IV-43. Exports accounted for *** percent of the Romanian industry’s

shipments in 1992, and *** percent of its shipments in 1999. See e.g., CR/PR at Table CTL-IV-42. 

 573 See e.g., CR/PR at Table CTL-IV-43.

 574 See e.g., CR/PR at Tables CTL-IV-9, CTL-IV-37, and CTL-IV-58.

 575 See e.g., CR/PR at Table CTL-IV-14.

98

producer’s shipments away from its home market and to the neighboring U.S. market.568 We find this

argument supported by the record. Import volumes of Chinese CTL plate into Mexico were greater than

import volumes from any other source during interim 2006.569 Furthermore, AHMSA began exporting

CTL plate again in 2005, shipping *** to third country (non-U.S.) markets in 2005, demonstrating some

export orientation on the part of the Mexican industry.570

On November 30, 2006, the Mexican CTL plate industry filed an antidumping duty petition

against subject imports from China, providing further evidence that the Mexican home market is

becoming further saturated with low-priced Chinese imports.571 Coupled with Mexican exports late in the

period of review, these factors demonstrate some export orientation on the part of AHMSA, and

competition from third-country plate producers in the Mexican home market. Inasmuch as other subject

countries also export, Mexico’s recent exporting activities increase the likelihood that subject imports

from Mexico and other subject countries will compete in the U.S. market under similar conditions of

competition. 

In light of these factors, we conclude that subject imports from Mexico and other subject

countries are likely to compete under similar conditions of competition in the U.S. market upon

revocation. We therefore exercise our discretion to cumulate Mexico with the other ten subject countries.

Romania. Similarly, we find that subject imports from Romania are also likely to compete under

similar conditions of competition in the U.S. market with other subject countries upon revocation. 

Romania, as well as the majority of other subject countries, produced and exported subject product

throughout the current period of review. Romania’s exports as a percentage of total shipments were large,

increasing irregularly from *** percent of shipments in 2000 to *** percent in 2005.572 In interim 2005,

exports accounted for *** percent of shipments before declining to a *** percent in interim 2006.573

Record data also indicate that the sole Romanian producer Mittal Steel Galati and the majority of subject

producers exported to similar markets over the current period of review, with the majority of export

volumes being shipped throughout the European Union and ***.

Mittal Steel Galati, as well as subject producers from other countries, maintained more than

minimal volumes of available capacity over this period of review. Commission data indicate that EU

members Belgium, Poland and the United Kingdom maintained sizeable volumes of available capacity in

2005.574 Brazil also maintained large volumes of available capacity throughout the majority of the current

period of review, and importantly in 2005, the last full year of this period.575 Each of these countries

therefore maintained the ability to increase production of CTL plate for export markets, if needed. We do

not find that the existence of excess capacity in Romania is a condition of competition which

distinguishes Romania from other subject countries. We find the availability of Romanian excess

capacity to be a condition of competition similar to other countries subject to these orders.

The record indicates that subject imports from Romania will likely continue to be substitutable

for and competitive with other subject imports in the reasonably foreseeable future, which increases the

likelihood that these imports will compete under similar conditions of competition in the U.S. market. 

Carbon structural steel plate constituted the largest volume of total CTL plate shipments from Romania,
 576 See e.g., CR/PR at Table CTL-IV-45.

 577 See e.g., CR/PR at Table CTL-III-1; CR at CTL-III-6 to CTL-III-7; PR at CTL-III-5.

 578 See e.g., CR/PR at Table CTL-IV-43.

 579 See e.g., “EU Accessions Bill”, BBC News; (Jan. 27, 2006), cited at CR at CTL-IV-114 n.199; PR at CTL-IV47 n.199.

 580 See e.g., “The Customs Policy of the European Union” at

http://ec.europa.eu/publications/booklets/move/19/txt_en.htm, retrieved on Sept. 22, 2006, cited at CR at CTL-IV114 n.198; PR at CTL-IV-47 n.198.

99

including *** of Romania’s CTL plate exports.576 The record demonstrates that other subject countries

also concentrated the majority of their plate production on carbon structural steel plate, thus revealing an

important competitive overlap in the type of plate produced and shipped by most subject countries.

Unlike other subject countries, Romania ***. But in 2005, Mittal Steel Co., NV was formed as

the result of a merger between Ispat International and LMN Holdings. Due to the merger, Mittal Steel

Co., NV now owns Mittal Steel Galati, while maintaining significant CTL plate production assets in the

United States through its subsidiary, Mittal Steel USA.577 Following this merger, Romania’s shipments of

subject merchandise to the U.S. market declined substantially, and Mittal Steel Galati reported only

minimal exports of subject plate to the U.S. market in interim 2006.578 Since the formation of Mittal Steel

Co., NV, the Romanian CTL plate industry has focused on non-U.S. markets, specifically ***. This is

consistent with other countries subject to these orders, particularly Belgium, Finland, Germany, Poland,

Spain, Sweden, Taiwan, and the United Kingdom. 

Romania’s pending membership in the European Union is another important similarity to other

subject countries that are also EU members. Romania was scheduled to become a member of the EU on

January 1, 2007, and the Treaty of Accession for Romania has been ratified by a great majority of EU

Member States since April 2005.579 Upon its accession to the EU, Romania will be able to compete

throughout the relatively high-priced EU CTL plate market without being subject to customs duties.580

Romania’s ability to ship product throughout the EU without these duties increases the attractiveness of

that market to the Romanian industry. 

In light of the above factors, we find that subject imports from Romania and other subject

countries are likely to compete under similar conditions of competition in the U.S. market upon

revocation, and we exercise our discretion to cumulate Romania with the other subject countries under

review.

E. Conclusion

With respect to all eleven subject countries, we find that the no discernible adverse impact

exception to cumulation does not apply and that there would likely be a reasonable overlap of competition

between subject imports from each country and the domestic like product as well as among subject

imports from each country. We further find that the record in these reviews does not indicate that there

are likely to be any significant differences in conditions of competition between subject CTL plate

imports from any of the eleven subject countries. Accordingly, for the reasons discussed above, we

exercise our discretion to cumulate subject imports from all eleven subject countries (Belgium, Brazil,

Finland, Germany, Mexico, Poland, Romania, Spain, Sweden, Taiwan, and the United Kingdom).
 581 Commerce excluded from these reviews “flat rolled steel products either plated or coated with tin, lead,

chromium, chromium oxides, both tin and lead (‘terne plate’), or both chromium and chromium oxides (‘tin-free

steel’), whether or not painted, varnished or coated with plastics or other nonmetallic substances in addition to the

metallic coating; clad products in straight lengths of 0.1875 inch or more in composite thickness and of a width

which exceeds 150 millimeters and measures at least twice in thickness; and certain clad stainless flat-rolled

products, which are three-layered corrosion-resistant carbon steel flat-rolled products less than 4.75 millimeters in

composite thickness that consist of a carbon steel product clad on both sides with stainless steel in a 20%-60%-20%

ratio.” CR at CORE-I-15, PR at CORE-I-14.

 582 The subject merchandise is imported under the following HTS numbers: 7210.30.0030, 7210.30.0060,

7210.41.0000, 7210.49.0030, 7210.49.0090, 7210.61.0000, 7210.69.0000, 7210.70.6030, 7210.70.6060,

7210.70.6090, 7210.90.1000, 7210.90.6000, 7210.90.9000, 7212.20.0000, 7212.30.1030, 7212.30.1090,

7212.30.3000, 7212.30.5000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7212.60.0000, 7215.90.1000,

7215.90.3000, 7215.90.5000, 7217.20.1500, 7217.30.1530, 7217.30.1560, 7217.90.1000, 7217.90.5030,

7217.90.5060, and 7217.90.5090. CR at CORE-I-16, PR at CORE-I-15. 

 583 CR at CORE-I-15, PR at CORE-I-14, n.16. Annealed nickel plate is also within Commerce’s scope, based on

a 2005 ruling. CR at CORE-I-15, PR at CORE-I-14, n.16.

 584 See generally CR/PR at App. E.

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VI. CORROSION-RESISTANT STEEL

A. Domestic Like Product

1. In General

We applied the domestic like product legal standards discussed in section III above.

Commerce in its reviews defined the scope of merchandise covered by the orders on corrosionresistant steel as:

Flat-rolled carbon steel products, of rectangular shape, either clad, plated, or coated with

corrosion-resistant metals such as zinc, aluminum, or zinc-, aluminum-, nickel- or iron-based

alloys, whether or not corrugated or painted, varnished or coated with plastics or other 

nonmetallic substances in addition to the metallic coating, in coils (whether or not in successively

superimposed layers) and of a width of 0.5 inch or greater, or in straight lengths which, if of a

thickness less than 4.75 millimeters, are of a width of 0.5 inch or greater and which measures at

least 10 times the thickness or if of a thickness of 4.75 millimeters or more are of a width which

exceeds 150 millimeters and measures at least twice the thickness. Included in these orders are

flat-rolled products of nonrectangular cross-section where such cross-section is achieved

subsequent to the rolling process (i.e., products which have been “worked after rolling”)–for

example, products which have been beveled or rounded at the edges.581 582 

The scope in these reviews varies slightly from the scope in the original determinations. As a

result of a 1998 scope ruling, Commerce included steel coils in thicknesses of 0.8 mm and a width of

2,000 mm, electrolytically coated with zinc, within the scope of the order.583 There also have been several

scope rulings with respect to the subject merchandise from Germany and Japan which resulted in minor

variations from the scope language of the orders on Germany and Japan from the other subject

countries.584 In general, however, the scope of Commerce’s reviews of the orders on Germany and Japan

is essentially the same as the scope of its reviews with respect to Australia, Canada, France, and Korea.

Corrosion-resistant steel is steel sheet that has been coated or plated with a corrosion- or heatresistant metal coating to prevent corrosion and thereby extend the service life of products produced from

the steel. It is used in the manufacture of automobiles and trucks, in appliances, industrial equipment,
 585 CR at CORE-I-17-18, PR at CORE-I-15-16. In the hot-dip process, steel sheet is passed through a bath of

molten zinc or aluminum. In the electrolytic process, steel sheet is passed through a series of electrolytic cells and

zinc or other metal is electrolytically plated onto the surface of the steel. Both processes start with cold-rolled steel

sheet.

 586 Certain Flat-rolled Carbon Steel Products from Australia, Austria, Belgium, Brazil, Canada, Finland, France,

Germany, Italy, Japan, Korea, Mexico, the Netherlands, New Zealand, Poland, Romania, Spain, Sweden, and the

United Kingdom, Inv. Nos. 701-TA-319-322, 334, 336-342, 344, and 347-353 and 731-TA-573-579, 581-592, 594-

597, 599-609 and 612-619 (Final), USITC Pub. 2664 (Aug. 1993) at 1-5.

 587 Tr. at 260-261 (Hecht).

 588 Mittal USA’s Prehearing Brief at 7.

 589 Nucor/SDI’s Posthearing Brief, Answers to Commissioners’ Questions at 27.

 590 CR at CORE-I-22, PR at CORE-I-18-19.

 591 CR at CORE-III-8, PR at CORE-III-5, n.18 and CR/PR at Tables CORE-III-4, C-7, and C-8. 

 592 CR/PR at Table CORE-III-4.

 593 Compare CR/PR at Table C-7 with Table C-8.

 594 Certain Carbon Steel Products from Australia, Belgium, Brazil, Canada, Finland, France, Germany, Japan,

Korea, Mexico, the Netherlands, Poland, Romania, Spain, Sweden, Taiwan, and the United Kingdom (Review), Inv.

Nos. AA1921-197, 701-TA-231, 319-320, 322, 325-328, 340, 342, 348-350, and 731-TA-573-576, 578, 582-587,

604, 607-608, 612, 614-618, USITC Pub. 3364 (Nov. 2000) at 6-7.

101

agricultural equipment, and in many construction applications. The two widely used processes for

manufacturing corrosion-resistant steel are the hot-dip process and the electrolytic process.585

In its 1993 determination on corrosion-resistant steel, the Commission found two separate like

products, corrosion-resistant steel and clad steel plate, a specialized corrosion-resistant steel product

engineered to achieve specific performance requirements. The Commission made a negative

determination with respect to clad steel plate.586

2. Whether to Expand the Domestic Like Product to Include Micro-alloys

No party has argued that the Commission should determine that various forms of corrosionresistant steel constitute separate domestic like products. While U.S. Steel indicated at the hearing that it

favored the inclusion of micro-alloy corrosion-resistant steel in the domestic like product,587 it did not

address the issue in its briefs. Mittal USA stated that the inclusion of micro-alloy was not an issue in

these second reviews in that it supported the definition of the like product from the first reviews, which

did not include micro-alloy product.588 Nucor stated in its posthearing brief that it did not object to

defining the domestic like product consistent with the scope, as the Commission did in the first reviews.589

With respect to micro-alloy product, only two domestic producers produce any micro-alloy

corrosion-resistant steel, U.S. Steel and Nucor.590 *** was able to provide separate data to the

Commission on its production and shipments of micro-alloy corrosion-resistant steel.591 The data show

minuscule levels of micro-alloy corrosion-resistant steel production – only *** short tons for the period

January 2005 through June 2006.592 Thus, inclusion or exclusion of micro-alloy steel in the domestic like

product definition will produce almost no change in the data we considered.593

In the first reviews, the Commission considered the micro-alloy issue but did not expand the like

product to include micro-alloy.594 We reach the same conclusion in these reviews.

In terms of the factors generally considered by the Commission in analyzing like product issues,

micro-alloy corrosion-resistant steel has limited interchangeability with non-alloy corrosion-resistant

steel. Micro-alloy product generally has higher levels of alloying elements in the steel and is also

stronger and tougher. Thus it has somewhat different uses. It is made in the same production facilities,
 595 See generally, CR at CORE I-19-23, PR at CORE-I-16-19.

 596 CR/PR at Table CORE-III-4.

 597 Chairman Pearson and Commissioners Hillman and Okun conclude, based on the record evidence, that the

appropriate domestic like product for corrosion-resistant steel does not include micro-alloy product, notwithstanding

their finding, discussed above, that the appropriate domestic like product for cut-to-length plate does include microalloy product. Cut-to-length plate is produced from micro-alloy steel in large and growing volumes by many of the

same mills that produce non-alloy steel plate. On balance, such plate is part of a product line continuum that is sold

through the same channels of distribution for many of the same applications as non-alloy plate, generally with no

more than moderate price premiums as a result of additional alloying elements. Corrosion-resistant micro-alloy

steel, in contrast, is produced by a very limited number of mills in very small volumes, suggesting specialty status. 

Record evidence indicates as well that customers perceive corrosion-resistant micro-alloy steel to be distinct from

corrosion-resistant steel produced from a non-alloy substrate. Accordingly, they do not expand the domestic like

product for corrosion-resistant steel to include micro-alloy steel.

 598 We note that the aggregate industry data compiled by the Commission include data for several toll producers. 

CR/PR at CORE-III-1, n.1. However, because the information provided by ***, a toll producer, was not entirely

comparable with the other industry data, its data are included only in CR/PR at Tables C-9 and C-10. CR/PR at

CORE-III-I, n.1. 

102

using the same employees and processes, as non-alloy product, but only by two out of 23 U.S. producers

of corrosion-resistant steel. Its price may vary because of its different physical characteristics and uses.

Certain importers and purchasers described micro-alloy product as higher quality and preferred for certain

end uses. The two products tend to move in similar channels of distribution.595

An additional consideration is that there are other forms of corrosion-resistant steel, both alloy

and non-alloy, produced in greater quantities than micro-alloy corrosion-resistant steel, that are likewise

not included in the scope.596 The record does not indicate that the similarities between domestically

produced micro-alloy and in-scope non-alloy corrosion-resistant steel warrant expansion of the like

product definition to include the micro-alloy product but not other types of out-of-scope product.

Accordingly, we define the domestic like product as consistent with Commerce’s scope definition

for corrosion-resistant steel and do not expand the like product to include micro-alloy corrosion-resistant

steel.597

B. Domestic Industry

1. In General

We applied the domestic industry legal standards discussed in section III above.

In light of our domestic like product finding, we determine that there is one domestic industry

consisting of all domestic producers of corrosion-resistant steel as defined in Commerce’s scope

determination.598

2. Related Parties

We applied the related party legal standards discussed in section III above.

The only issue that arises in this second sunset review with respect to the Commission’s

definition of the domestic industry is whether any producers should be excluded under the related parties

provision, 19 U.S.C. § 1677(4)(B). The domestic interested parties view the domestic industry as

encompassing all domestic producers of corrosion-resistant steel, and no party advocated the exclusion of

any domestic producer as a related party.

Section 771(4)(B) of the Act allows the Commission, if appropriate circumstances exist, to

exclude from the domestic industry producers that are related to an exporter or importer of subject
 599 The primary factors the Commission has examined in deciding whether appropriate circumstances exist to

exclude a related party include:

(1) the percentage of domestic production attributable to the importing producer;

(2) the reason the U.S. producer has decided to import the product subject to investigation, i.e., whether the

firm benefits from the LTFV sales or subsidies or whether the firm must import in order to enable it to

continue production and compete in the U.S. market; and

(3) the position of the related producer vis-a-vis the rest of the industry, i.e., whether inclusion or exclusion

of the related party will skew the data for the rest of the industry.

See, e.g., Torrington Co. v. United States, 790 F. Supp. 1161 (Ct. Int’l Trade 1992), aff’d without opinion, 991 F.2d

809 (Fed. Cir. 1993).

 600 The Commission has found such control to exist where the domestic producer was responsible for a

predominant proportion of an importer’s purchases and the importer’s purchases were substantial. See, e.g.,

Foundry Coke from China, Inv. No. 731-TA-891 (Final), USITC Pub. 3449 (September 2001) at 8-9.

 601 According to the Commission, a substantial percentage of domestic producers had “some financial relationship

with foreign steel companies, either through equity ownership or joint ventures, and to a much lesser extent through

importation of subject products.” However, the Commission observed that exclusion of these companies, and in

particular any of the petitioning parties, would skew the domestic industry’s data because they made up a substantial

portion of the industry. Furthermore, the Commission pointed out that the fact that most of the “related parties”

were actively seeking to impose antidumping or countervailing duties on the very parties with which they were

affiliated undercut any argument that they were somehow “shielded” from injury from the dumped imports. Finally,

given the sporadic and low level of importation by the domestic industry, the Commission found that the interests of

all the domestic producers were primarily in domestic production rather than importation. Consequently, the

Commission found that there was an insufficient basis to exclude any of the related domestic producers from the

corrosion-resistant industry. USITC Pub. 2664 at 97-99.

 602 USITC Pub. 3364 at 14.

 603 AK-ISG Steel Coating, Double G Coatings, and I/N Kote are all owned in part by Mittal Steel USA, whose

parent company, Mittal Steel N.V., recently announced plans to merge with Arcelor, which has subsidiaries that

produce corrosion-resistant steel in Canada, France, and Germany. CR/PR at Table CORE-I-12. The merger is

scheduled to be completed in the first half of 2007. CR at CORE-III-5, PR at CORE-III-4. I/N Kote is also owned

in part by Japanese producer Nippon Steel. Both Apollo and Thomas Steel have a sister company, Hille & Mueller

USA, which imports subject product, and a sister company in Germany, Hille & Mueller, that produces corrosionresistant steel. Canfield has a sister company, OMG, that imports subject product. CSI is related to JFE Steel, which

produces subject product in Japan and exports it to the United States. Pro-Tec is 50 percent owned by Kobe Steel,

which produces subject product in Japan. USS-POSCO is 50 percent owned by POSCO California, which is an

indirect wholly owned subsidiary of Pohang Iron and Steel Co., Ltd. (“POSCO”), which produces subject product in

Korea; the other 50 percent owner of USS-POSCO is Pitcal, a direct wholly owned subsidiary of U.S. Steel, a U.S.

producer. Wheeling-Nisshin is partly owned by Nisshin (Japan), which produces subject product in Japan and

(continued...)

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merchandise, or which are themselves importers.599 The Commission has also concluded that a domestic

producer that does not itself import subject merchandise, or does not share a corporate affiliation with an

importer or foreign producer or exporter, may nonetheless be deemed a related party if it controls large

volumes of imports.600

In the original 1993 investigations of corrosion-resistant steel, the Commission did not exclude

any U.S. producer of corrosion-resistant steel under the related parties provision.601 Likewise, in the first

reviews of corrosion-resistant steel, no party argued for the exclusion of any related parties from the

domestic industry, and the Commission found that appropriate circumstances did not exist to exclude any

related parties, given the related parties’ investments in U.S. facilities since the orders were imposed, the

significant share of U.S. production they represented, and the absence of any indication that their

domestic operations were shielded from the effects of subject imports.602

In these reviews, a number of U.S. producers are affiliated with subject country producers of

corrosion-resistant steel, or import or purchase subject imports.603 In addition to these affiliations with
 603 (...continued)

exports it to the United States, and by WPS, a U.S. producer. CR/PR at Table CORE-I-12.

 604 CR/PR at Tables CORE-I-14, III-7.

 605 *** imports were less than *** percent of its production in the one year, 2003, it imported subject product, and

it reportedly imported to complete an obligation ***. ***’s imports represented *** percent of its production in

2002, but were not above *** percent of its production during the rest of the period, and this producer represented

only *** percent of U.S. production in 2005. CR/PR at Table CORE-I-12.

 606 CR/PR at Table CORE-I-13.

 607 U.S. Producers’ Questionnaire Responses; CR at CORE-III-24, PR at CORE-III-15, CR/PR at Table COREIII-12.

 608 CR/PR at Table CORE-III-10.

 609 CR/PR at Table CORE-I-12.

 610 Commissioner Koplan and Commissioner Lane do not join the remainder of this opinion. For their views, see

Separate and Dissenting Views of Commissioner Stephen Koplan and Commissioner Charlotte R. Lane with respect

to Certain Carbon Corrosion-Resistant Steel.

104

subject country producers and importers of corrosion-resistant steel, two U.S. producers imported subject

product during the review period.604 The quantity of imports during the period, however, was a relatively

small proportion of these firms’ U.S. production of corrosion-resistant steel.605

The only U.S. producers to fall within the related parties provision that *** continuation of the

orders are ***, with respect to ***.606 These producers, however, represent a very small percentage of

U.S. production. Moreover, 19 of the 23 U.S. producers providing information to the Commission,

including all the related parties, reported capital expenditures during the period, indicating a commitment

to their U.S. production, with no firm accounting for the majority of capital expenditures. Total capital

expenditures by U.S. producers with related-party affiliations exceeded $250 million in 2005.607 The

financial condition of these U.S. producers does not indicate that any of them are shielded from the

effects of subject imports.608 The related parties account for a significant share of U.S. production -- more

than *** of U.S. corrosion-resistant steel production in 2005.609 No party has argued for the exclusion of

any related parties from the domestic corrosion-resistant steel industry.

Based on these facts, we find that appropriate circumstances do not exist to exclude any of the

related parties from the corrosion-resistant steel industry.

C. Cumulation610

1. Framework and Parties’ Arguments

We applied the cumulation legal standards discussed in section III above. The threshold criterion

for cumulation in these reviews is satisfied because all of the reviews of corrosion-resistant steel were

initiated on the same day.

We consider three issues in deciding whether to cumulate the subject imports: (1) whether

imports from any of the subject countries are precluded from cumulation because they are likely to have

no discernible adverse impact on the domestic industry; (2) whether imports of corrosion-resistant steel

from the subject countries are likely to compete with each other and with the domestic like product

according to the traditional four-factor test; and (3) other considerations, such as similarities and

differences in the conditions of competition of the subject countries with regard to their participation in
 611 See Allegheny Ludlum Corp. and AK Steel Corp. v. United States, Slip Op. 06-188 (Ct. Int’l Trade, Dec. 22,

2006).

 612 Chairman Pearson and Commissioner Okun note that while they consider the same issues discussed in this

section in determining whether to exercise their discretion to cumulate the subject imports, their analytical

framework begins with whether imports from the subject countries are likely to face similar conditions of

competition. For those subject imports which are likely to compete under similar conditions of competition, they

next proceed to consider whether those imports are likely to compete with each other and with the domestic like

product. Finally, if based on that analysis they intend to exercise their discretion to cumulate one or more subject

countries, they analyze whether they are precluded from cumulating such imports because the imports from one or

more subject countries, assessed individually, are likely to have no discernible adverse impact on the domestic

industry. See Additional and Dissenting Views of Chairman Daniel R. Pearson and Commissioner Deanna Tanner

Okun, found in Stainless Steel Bar from Brazil, India, Japan, and Spain, Invs. Nos. 731-TA-678, 679, 681, and 682

(Second Review), USITC Pub. 3895 (Dec. 2006).

They join Vice Chairman Aranoff and Commissioner Hillman’s discussion of the issues in this section, and

reach the same conclusion. That is, Chairman Pearson and Commissioner Okun determine that certain factors

indicate that subject imports from Canada will likely compete under different conditions of competition than other

subject imports and, therefore, they do not exercise their discretion to cumulate subject imports from Canada for

purposes of their analysis of likely volume, likely price effects, and likely injury. They also determine that (1) many

of the likely conditions of competition faced by subject imports from Germany and Korea are similar; (2) subject

imports from these countries are likely to compete with each other and with the domestic like product in the event of

revocation; and (3) subject imports from these countries assessed individually, are not likely to have no discernible

adverse impact on the domestic industry in the event of revocation. Therefore, they exercise their discretion to

cumulate subject imports from Germany and Korea. Finally, Chairman Pearson and Commissioner Okun determine

that (1) many of the likely conditions of competition faced by subject imports from Australia, France, and Japan are

similar; (2) subject imports from these countries are likely to compete with each other and with the domestic like

product in the event of revocation; and (3) subject imports from these countries assessed individually, are not likely

to have no discernible adverse impact on the domestic industry in the event of revocation. Therefore, they exercise

their discretion to cumulate subject imports from Australia, France, and Japan.

 613 Given the pre-order levels of subject imports, sufficient excess capacity in each of the subject countries, their

export-orientation, and the level of imports into the United States during the review period from certain countries,

particularly *** and ***, they urge the Commission to find that the exception does not apply to any country. U.S.

Steel’s Prehearing Brief at 13-45.

 614 U.S. Steel’s Prehearing Brief at 46-51. They note that producers, importers and purchasers reported that

imports from each country were “always” or “frequently” interchangeable with each other and the domestic like

product, with similar channels of distribution and presence in the market.

 615 U.S. Steel’s Prehearing Brief at 52-53 (All six countries have large corrosion-resistant steel industries. 

Producers in all countries are export-oriented and make steel that can be used in the most demanding applications. 

All six countries have excess capacity, make products that are sold on the basis of price, and will be impacted by

changing conditions in China. With the exception of ***, all subject country producers have U.S. affiliates and such

relationships could enhance their ability to penetrate the U.S. market.).

105

the U.S. market.611 612 In so doing, we take into account the various arguments by the parties in favor of

and against cumulation. Our focus in a five-year review investigation is not merely on present conditions

of competition, but also on likely conditions of competition in the reasonably foreseeable future. 

The domestic interested parties argue that all subject imports of corrosion-resistant steel should

be cumulated. They argue that the likelihood of “no discernible adverse impact” is a limited exception to

cumulation that is not satisfied in this case for any subject country.613 They claim that it is likely that

subject imports from each country will exhibit a reasonable overlap of competition with imports from

other subject countries and with domestically produced corrosion-resistant steel.614 Finally, U.S.

producers argue that there are no significant differences in conditions of competition among the subject

countries that would not warrant the Commission exercising its discretion to cumulate any of them.615
 616 The Korean respondents do not present specific arguments as to why subject imports from Korea should not be

cumulated. They argue instead that, due to changes in the overall conditions of competition, all of the orders should

be revoked. Korean Respondents’ Prehearing Brief at 1.

 617 Australian Respondents’ Posthearing Brief at 10.

 618 Canadian Respondents’ Posthearing Brief at 1-8, Answers to Commissioners’ Questions at 31-41.

 619 French Respondents’ Posthearing Brief at 8-10.

 620 German Respondents’ Posthearing Brief at 5-9.

 621 Japanese Respondents’ Posthearing Brief at 15.

 622 Cf. Top-of-the-Stove Stainless Steel Cooking Ware from Korea, INV Nos. 701-TA-267 and 731-TA-304

(Review) (Remand), USITC Pub. 3485 (Jan. 2002) at 5 (declining to address criterion of no discernible adverse

impact in the absence of evidence of a reasonable overlap of competition).

In the first reviews, the Commission found that there was no likelihood of no discernible adverse impact in

the event of revocation with respect to imports from all the subject countries, based on: their continuing presence in

the U.S. market, indicating subject producers had the contacts and distribution channels necessary to compete;

excess capacity; and the considerable resources devoted to export markets. USITC Pub. 3364 at 47.

On remand with respect to Canada, France, and Germany, the Commission cited factors similar to those it

considers in analyzing likelihood of material injury, but noting that the threshold for finding likelihood of a

discernible or “noticeable” adverse impact is lower than the threshold for finding likelihood of material injury, or of

a “significant” adverse impact if the order is revoked. USITC Pub. 3539 at 21-22; USITC Pub. 3753 at 3. The

(continued...)

106

Corrosion-resistant steel producers in each subject country, except Korea,616 argue that their

country’s imports should not be cumulated with those from the other subject countries on the following

bases: Australia, no discernible adverse impact;617 Canada, different conditions of competition;

618 France,

no discernible adverse impact, lack of overlap of competition, and differences in conditions of

competition, based mainly on the Arcelor-Mittal relationship;619 Germany, no discernible adverse

impact;620 and Japan, no discernible adverse impact and different conditions of competition.621

Because we have not determined that subject imports from any country would be likely to have

no discernible adverse impact on the U.S. industry, and that there is a reasonable overlap in competition

among imports from all six countries and the U.S. industry, we have discretion to cumulate imports. We

have determined that certain factors, discussed below, indicate that subject imports from Canada will

likely compete under different conditions of competition and, therefore, we do not exercise our discretion

to cumulate subject imports from Canada for purposes of our injury analysis. We determine that many of

the conditions of competition faced by subject imports from Germany and Korea are similar. Therefore,

we exercise our discretion to cumulate subject imports from Germany and Korea. We determine that

many of the conditions of competition faced by subject imports from Australia, France, and Japan are

similar. Therefore, we exercise our discretion to cumulate subject imports from Australia, France, and

Japan. Finally, we find that the likely conditions of competition faced by subject imports from Germany

and Korea will differ from the likely conditions of competition faced by subject imports from Australia,

France, and Japan, and therefore we do not exercise our discretion to cumulate these groups of countries.

2. Likelihood of No Discernible Adverse Impact

We consider all relevant factors in analyzing “no discernible adverse impact” in these reviews. 

Based on the record, we do not find that subject imports from Australia, France, Germany, Japan, or

Korea are likely to have no discernible adverse impact in the event of revocation. Because we decline to

cumulate subject imports from Canada with those from any other subject countries on the basis of

differences in likely conditions of competition, we find it unnecessary to decide the issue of no

discernible adverse impact with respect to Canada.622
 622 (...continued)

factors considered on remand for each of the subject countries included: production capacity and unused capacity

relative to U.S. production and apparent consumption, available inventories, export reliance, substitutability of the

subject imports with U.S. product, underselling in the original investigation, ability to product shift, and trade

patterns during the original investigations. USITC Pub. 3539 at 27-28, 32. The Commission’s findings on remand

of no likelihood of no discernible adverse impact and of a likelihood of continuation or recurrence of material injury

with respect to all three countries were upheld.

 623 CR/PR at Table CORE-IV-12. The Australian industry’s capacity increased from *** short tons in 1992 to

*** short tons in 2005. 

 624 CR/PR at Table CORE-I-1. There was some underselling by subject imports from Australia in the original

investigation, although no price comparisons were reported during either review period. Subject imports from

Australia *** the domestic product in *** out of *** comparisons of sales to manufacturers and end users and ***

the domestic product in *** out of *** purchaser price comparisons reported by distributors and service centers

during the original investigation. Original Confidential Staff Report at Tables 110-112. 

 625 CR/PR at Table CORE-IV-27.

 626 CR/PR at Table CORE-IV-29.

 627 CR/PR at Table CORE-I-1. There were no price comparisons for subject imports from France in either

review, but some underselling in the original investigation. Subject imports from France *** the domestic product

in *** of *** comparisons of sales to distributors and service centers and *** the domestic product in *** of ***

comparisons of sales to manufacturers and end users and in *** out of *** purchaser price comparisons reported by

manufacturers and end users in the original investigation. Original Confidential Staff Report at Tables 110-112. 

 628 CR/PR at Table CORE-IV-36.

 629 CR/PR at Tables C-7, CORE-IV-38. We acknowledge that German producers reported *** capacity

utilization in January to June 2006 and that this indicates a limited ability to increase exports via greater production. 

The German industry, however, reported *** in every other full-year and partial-year period since 2000, as well as

some significant year-to-year fluctuations. As recently as 2005 German producers reported nearly *** short tons of

available capacity. Given these facts, we do not conclude that the German industry will lack any available capacity

in the foreseeable future based on the experience of a single partial year. 

107

Australia: The information on the record indicates that the corrosion-resistant steel industry in

Australia has significant production capacity and has increased its capacity since the original investigation

period. The Australian producer’s excess capacity was *** short tons in 2005, and its capacity for

January-June 2006 was *** short tons, as compared to *** short tons for January-June 2005.623 There

were some imports into the U.S. market from Australia during the review period, although at minimal

levels, reaching a high during the current period of 297 short tons in 2003 and dropping to 16 short tons

in 2005.624

France: Similarly, producers in France have significant production capacity and have increased

their capacity since the original investigation, from *** short tons in 1992 to *** short tons in 2005.625

The French producers’ excess capacity was *** short tons in 2005, and their capacity for January-June

2006 was *** short tons, as compared to *** short tons for January-June 2005.626 Even with the orders in

place, subject imports from France were present in the U.S. market, although at a declining rate. Subject

imports from France were at their highest level during the instant review period in 2002, at 15,753 short

tons, and were 1,778 short tons in 2005.627

Germany: German producers report increased capacity and production, from *** short tons of

capacity in 1992 to *** short tons in 2005, and from *** short tons of production in 1992 to *** short

tons in 2005. While capacity utilization in 2005, at *** percent, was above that of the original

investigation period, it had dropped from *** percent in 1999 during the first review period.628 German

producers’ excess capacity was *** short tons in 2005, which was equivalent to almost *** percent of

apparent U.S. consumption and U.S. production in that year.629
 630 CR/PR at Table CORE-I-1.

 631 CR/PR at Table C-7. 

 632 CR/PR at Table CORE-IV-38. German respondent interested parties argue that demand in their home market

and the EU is sufficiently strong that they would not have an incentive to ship product to the United States. They

point out that over *** percent of their shipments are to the German market or other EU markets. German

Respondents’ Posthearing Brief at 3. We note below that prices for corrosion-resistant steel in EU markets have not

been sufficiently below U.S. prices so as to create a price incentive to shift sales to the U.S. market. However,

prices in certain Asian markets have typically been lower than U.S. prices, as has the “EU export” price. CR/PR at

Table CORE-IV-70, as revised by Memorandum INV-DD-162 (Dec. 5, 2006). Thus, there would appear to be some

price incentive for German producers to direct to the United States sales currently made to markets outside the EU. 

The record also reflects that exports from Germany to markets outside the European Union increased in 2005, much

of which was to the United States.

 633 CR/PR at Table CORE-IV-35.

 634 Tr. at 521 (Gruenhage); Tr. at 264 (Gant); CR at CORE-IV-53, PR at CORE-IV-20.

 635 The U.S. service center firm owned by ThyssenKrupp is TKSS. Corrosion-resistant steel is among the

products distributed by TKSS. TKSS presents one ready avenue for subject imports from ThyssenKrupp or other

producers in Germany to reach the U.S. market. German respondents claim that this is not likely because TKSS

currently handles very little imported product, and because the sales of ThyssenKrupp Germany have been to autorelated end-users and not service centers. German Respondents’ Posthearing Brief at 8-9. The fact that TKSS does

not currently distribute much imported product with the orders in place does not diminish its availability as a channel

for imports if the orders were revoked.

 636 With respect to pricing, in both the original investigation and current reviews, subject imports from Germany

mostly *** the domestic product. Original Confidential Staff Report at Tables 110-112; CR/PR at Table CORE-V17. Notwithstanding the ***, we find that the likely volume of subject imports from Germany would be sufficient to

have a noticeable impact on the domestic industry.

 637 CR/PR at Table CORE-IV-45.

108

Imports from Germany to the United States of corrosion-resistant steel were 189,192 short tons in

1992.630 While subject imports from Germany were lower during this review period, they increased by

63.5 percent from 2000 to 2005, from 46,453 short tons in 2000 to 75,941 short tons in 2005.631

The German industry is export-oriented. Exports accounted for over *** percent of German

shipments during each year since 2000. Although most exports remained in Europe, *** percent of its

shipments in 2005 (over *** tons) were directed to overseas markets, including the United States.632

As discussed below, producers accounting for the vast majority of German production lack any

production affiliate in the United States. These unaffiliated producers are ThyssenKrupp, the ***

German producer and exporter to the United States, and the *** German producers, Salzgitter and Corus,

which together represent *** percent of German production.633 ThyssenKrupp has an established

customer base in the United States and owns a large U.S. service center chain.634 Thus, ThyssenKrupp

has the need to supply corrosion-resistant steel to its customers in the United States and it has the

logistical means to do so.635

ThyssenKrupp, however, has yet to establish a production facility in North America, and, as we

discuss below, we cannot determine that it is more likely than not that ThyssenKrupp will acquire such a

facility in the reasonably foreseeable future. Even if ThyssenKrupp were to construct a U.S. facility, this

would take some years. In the meantime, ThyssenKrupp will need to supply its U.S. customers with

imports from Germany so that it can maintain and likely build its customer base to support such a

facility.636

Japan: Japanese producers also reported significant production capacity and increased capacity

since the original investigation. The Japanese industry’s capacity increased from *** short tons in 1992

to *** short tons in 2005.637 The Japanese producers’ excess capacity was *** short tons in 2005, and

their capacity for January-June 2006 was *** short tons, as compared to *** short tons for January-June
 638 CR/PR at Table CORE-IV-47. 

 639 CR/PR at Table CORE-I-1. The Commission’s pricing data in this review show underselling by Japanese

product in 5 out of 20 comparisons and overselling in the remaining 15 comparisons. CR/PR at Table CORE-V-17. 

In the original investigation, subject imports from Japan *** the domestic product in *** of *** comparisons of

sales to manufacturers and end users, in *** of *** comparisons of sales to distributors and service centers, and in

*** of *** purchaser price comparisons reported by manufacturers and end users. Original Confidential Staff

Report at Tables 110-112.

 640 CR/PR at Table CORE-I-1.

 641 CR/PR at Table CORE-I-1.

 642 CR/PR at Table CORE-IV-54.

 643 The Korean industry also produces non-subject product on the same equipment, including *** short tons of

micro-alloy corrosion-resistant steel, *** percent of which was exported to the United States in 2005. Korean

producers, however, did not indicate how readily equipment used to produce non-subject product could be modified

to produce subject merchandise.

 644 CR/PR at Table CORE-IV-56.

 645 With respect to U.S. prices of imports from Korea, in the original investigation, subject imports from Korea

*** the domestic product in *** of *** comparisons of sales to manufacturers and end users, in *** of ***

comparisons of sales to distributors and service centers, and in *** of *** purchaser price comparisons reported by

distributors and service centers. Original Confidential Staff Report at Tables 110-111, 113. The Korean product

undersold the U.S. product in 13 of 53 comparisons during the current review period, with the orders in place. 

CR/PR at Table CORE-V-17.

 646 CR at CORE-II-20, PR at CORE-II-13; CR at CORE-II-30, PR at CORE-II-23; CR at CORE-II-21, PR at

CORE-II-14.

109

2005.638 Subject imports from Japan were present in the U.S. market during the review period, ranging

from a high of 27,543 short tons in 2000 to a low of 16,762 short tons in 2005.639

Korea. Imports from Korea to the United States of corrosion-resistant steel were 193,513 short

tons in 1992.640 Despite the discipline imposed by the orders, Korea’s subject imports to the United States

increased substantially during the review period, reaching a high of 330,858 short tons in 2005, or 1.5

percent of apparent U.S. consumption.641 Korean producers, representing *** percent of corrosionresistant steel capacity in Korea, reported steady increases in their capacity, from 3.1 million short tons in

1992 to 8.4 million short tons in 2005, and in their production, from 2.9 million short tons in 1992 to 7.3

million short tons in 2005, but a drop in capacity utilization to 87.0 percent in 2005, from 93.8 percent in

1992.642 Korean producers’ excess capacity was 1.1 million short tons in 2005.643

In addition to current substantial volumes of imports from Korea despite the orders, Korean

producers exported 28.8 percent of their total shipments in 2005 to countries other than the United States,

amounting to 2.1 million short tons of corrosion-resistant steel.644 Of these exports, Korean producers

exported approximately 900,000 short tons to markets outside Asia, indicating a willingness to seek out

markets that are distant from Korea.645

In sum, with respect to Australia, France, Germany, Japan, and Korea, the information on the

record indicates that the corrosion-resistant steel industry in each of these subject countries has significant

production capacity and has increased its capacity since the original investigation period. Producers in

each of the subject countries have unused capacity. Producers in each country have maintained at least

some level of exports to the U.S. market during the review period, and undersold U.S. producers at times

during the original investigation period, and, in some cases, during the review period as well. Finally,

corrosion-resistant steel from domestic producers and the subject countries is generally substitutable.646

Accordingly, we do not conclude that the subject imports from Australia, France, Germany, Japan, or

Korea would not have a discernible or noticeable adverse impact on the U.S. market if the orders were
 647 Chairman Pearson and Commissioner Okun examine the likelihood of a reasonable overlap of competition

only after first determining whether subject imports are likely to face similar conditions of competition. Because

they determine that certain factors indicate that subject imports from Canada will likely compete under different

conditions of competition than other subject imports, they do not include subject imports from Canada in their

analysis of the likelihood of a reasonable overlap of competition.

 648 See Certain Cast-Iron Pipe Fittings from Brazil, the Republic of Korea, and Taiwan, Inv. Nos. 731-TA-278-

280 (Final), USITC Pub. 1845 (May 1986), aff'd, Fundicao Tupy, S.A. v. United States, 678 F. Supp. 898 (Ct. Int'l

Trade 1988), aff'd, 859 F.2d 915 (Fed. Cir. 1988); Mukand Ltd. v. United States, 937 F. Supp. 910, 915 (Ct. Int’l

Trade 1996)).

 649 USITC Pub. 2664 at 173; USITC Pub. 3364 at 47-48.

 650 CR at CORE-II-20, PR at CORE-II-13.

 651 CR at CORE-II-30, PR at CORE-II-23.

 652 CR at CORE-II-21, PR at CORE-II-14.

 653 CR/PR at Tables CORE-IV-4-6, IV-11, IV-13-16, IV-19, IV-21-24, IV-28, IV-30-33, IV-37, IV-39-42, IV-46,

IV-48-51, IV-55, IV-57-60. 

 654 Canadian Respondents’ Posthearing Brief, Answers to Commissioners’ Questions at 38.

110

lifted. We, therefore, are not precluded from exercising our discretion to cumulate subject imports from

any of these countries.

3. Likelihood of a Reasonable Overlap of Competition

Because we have not found that the “no discernible adverse impact” exception to cumulation

applies to any of the subject countries, we next consider the issue of likely reasonable overlap of

competition.647 The Commission generally has considered whether subject imports compete with each

other and with the domestic like product with reference to four factors: 1) fungibility; 2) sales or offers in

the same geographic markets; 3) common or similar channels of distribution; and 4) simultaneous

presence.648 In five-year reviews, the relevant inquiry is whether there likely would be a reasonable

overlap of competition even if none currently exists because the subject imports are absent from the U.S.

market.

In the original investigations and in the first reviews, the majority of the Commission cumulated

subject imports from all subject countries, based on a reasonable overlap of competition.649

In these reviews, the record indicates that domestically produced and imported corrosion-resistant

steel are fungible products. Subject imports and the domestic product share the same essential chemical

and physical properties, and there is a moderate to high degree of substitution between them.650

Generally, producers, importers and purchasers reported that corrosion-resistant steel from the United

States and from other countries is always or frequently interchangeable.651 Twenty-nine of 35 responding

purchasers indicated that imported and domestically produced corrosion-resistant steel are generally used

in the same applications, as long as the steel conforms to the purchaser’s specifications or the supplier has

been approved.652

In addition, the types of corrosion-resistant steel that the subject producers either exported to the

United States or produced during the review period reveal a sufficient degree of fungibility among the

subject imports and with the domestic product.653 For example, while *** exported minimal quantities to

the United States and produces only hot-dip corrosion-resistant steel, all the other subject countries

produce and in some cases exported to the United States during the review period significant quantities of

hot-dip product. In addition, while Canadian respondents argued that imports from Canada are focused

on specialty automotive products to a much greater extent than other subject imports,654 the record shows

a reasonable overlap. All the subject countries produce corrosion-resistant steel for exposed automotive

applications, and there is sufficient overlap in the other types of corrosion-resistant steel they produce, as
 655 CR/PR at Tables CORE-IV-4-6, IV-11, IV-13-16, IV-19, IV-21-24, IV-28, IV-30-33, IV-37, IV-39-42, IV-46,

IV-48-51, IV-55, IV-57-60. 

 656 Japanese Respondents’ Prehearing Brief at 90.

 657 CR/PR at Tables CORE-IV-46, IV-48-51.

 658 CR/PR at Table CORE-II-1.

 659 CR/PR at Table CORE-IV-8.

 660 CR/PR at Table CORE-IV-7.

 661 CR/PR at Table CORE-II-2.

 662 USITC Pub. 3364 at 48.

111

well as export to the United States.655 While ***’s production of corrosion-resistant steel for automotive

applications is a relatively *** percentage of its total production, it shipped significant quantities for nonautomotive applications during the review period (2005), as did all the subject countries: Australia, ***

short tons; Canada, *** short tons; France,*** short tons; Germany, *** short tons; Japan, *** short tons;

and Korea, *** short tons. Similarly, while the Japanese producers assert a focus on high-value specialty

products,656 the record shows they produce a full-range of corrosion-resistant products.657 

The record also indicates that there is sufficient overlap in the channels of distribution for

domestic and imported corrosion-resistant steel. U.S. producers and importers ship corrosion-resistant

steel to automotive, construction, and other end users, as well as to distributors and service centers,

although in different proportions.658

With respect to simultaneous presence, imports from each of the subject countries have been

present in the U.S. market during at least some portion of the review period.659 The record also indicates

that, despite low levels of imports from some of the subject countries during the review period, subject

imports and the domestic product are sold in the same geographic markets.660 In addition, the record

shows that U.S. producers and importers, on the whole, reported nationwide sales of corrosion-resistant

steel.661

On balance, we find that there will likely be a reasonable overlap of competition between subject

imports from each country and the domestic like product as well as among subject imports from each

country should the orders be revoked. 

4. Other Considerations

In addition to the issues of no discernible adverse impact and reasonable overlap of competition,

we also consider whether other factors, such as likely differing conditions of competition for the subject

imports, likely differences in price or volume trends, or transnational ownership of facilities producing

the subject product, warrant us not exercising our discretion to cumulate subject imports from certain

countries.

In the first reviews of corrosion-resistant steel, the Commission took into account other

significant conditions of competition likely to prevail if the orders were revoked but found that the subject

imports from each country would compete in the U.S. market under similar conditions of competition and

exercised its discretion to cumulate the subject imports from all six countries.662

In this review, we have determined that certain factors, discussed below, indicate that subject

imports from Canada will likely compete under significantly different conditions of competition and,

therefore, we do not exercise our discretion to cumulate subject imports from Canada for purposes of our

injury analysis. We determine that many of the conditions of competition faced by subject imports from

Germany and Korea are similar. Therefore, we exercise our discretion to cumulate subject imports from

Germany and Korea. We determine that many of the conditions of competition faced by subject imports

from Australia, France, and Japan are similar. Therefore, we exercise our discretion to cumulate subject
 663 CR at CORE-IV-28-29, PR at CORE-IV-13.

 664 CR/PR at Table CORE-II-3, as revised by Memorandum INV-DD-164 (Dec. 13, 2006).

 665 Canadian Respondents’ Posthearing Brief at 2; Auto Producers’ Prehearing Brief at 48-50; Tr. at 163-164

(Scherrbaum), 266(DiMicco), 274-278, 386 (Malashevich). We note that our recognition of this perception of major

purchasers is limited to auto producers and does not necessarily apply to other products or sectors, which accounted

for *** percent of U.S. shipments of subject Canadian steel in 2005. CR/PR at Table CORE-IV-4.

 666 The majority of subject imports from Canada are shipped to auto producer customers. Canadian Respondents’

Posthearing Brief at 2-5. We note that ***. Because Toyota is opening a new factory at Ontario, near Dofasco’s

mill, Dofasco’s business plan calls for a ***. CR at CORE-IV-29, PR at CORE-IV-13. 

 667 CR at CORE-IV-105, PR at CORE-IV-39. For the United States, the rules for determining NAFTA eligibility

are set forth in the HTS in general note 12(t); the pertinent rule is that for the tariff classification of the imported

good. Third-country content in the good must change tariff classification in the prescribed manner, and any other

requirements of the particular rule and GN 12 must be met.

 668 CR at CORE-III-11, PR at CORE-III-9, CR/PR at Table CORE-IV-20. Exports from the United States to

Canada and Mexico were between 88 and 98 percent of U.S. exports during the review period, with exports to

Canada the dominant share. For example, in 2005, U.S. exports to Canada were 592,578 short tons; to Mexico,

276,911 shorts tons; and to all others, 40,981 short tons. CR at CORE-III-11, PR at CORE-III-9.

 669 Canadian Respondents’ Prehearing Brief at 2.

112

imports from Australia, France and Japan. Finally, we find that the likely conditions of competition faced

by subject imports from Germany and Korea will differ from the likely conditions of competition faced

by subject imports from Australia, France and Japan, and therefore we do not exercise our discretion to

cumulate these groups of countries.

Canada: The following factors indicate significant differences in the conditions of competition

as pertains to Canadian producers as compared to producers in the other subject countries.

Approximately *** percent of exports to the United States from Canada by Dofasco (the ***

exporter) over the review period were to the automotive sector.663 That sector dominated the U.S. market,

accounting for 47.6 percent of U.S. market shipments in 2005.664 Auto producers and auto parts suppliers

perceive the United States and Canada as a unified market for production and sourcing decisions, while

they view other subject producers as “offshore.”665 North American mills, including those located in

Canada, are significantly better positioned than the other subject country producers to economically

satisfy the just-in-time delivery requirements of the auto and auto parts companies.666 Thus, with or

without the order in place, U.S. auto companies have economic incentives to continue to purchase the

majority of their corrosion-resistant requirements from North American mills. Automakers are also

sensitive to rules of origin under the North American Free Trade Agreement, which provide for

preferential tariff treatment for goods that meet North American content requirements.667

In part due to these connections in the auto market, Canada is a net importer of corrosion-resistant

steel, both globally and especially with regard to the United States. While imports of corrosion-resistant

steel from Canada to the United States rose during the review period, exports of corrosion-resistant steel

from the United States to Canada increased by a greater amount. In 2005, for example, U.S. producers

exported 592,578 short tons of corrosion-resistant steel to Canada, up from 382,305 short tons in 2004,

while exports from Canada to the United States in 2005 were *** short tons, up from *** short tons in

2004. In each year of the review period except 2003, U.S. exports to Canada exceeded exports from

Canada to the United States.668 The fact that Canada is a net importer of corrosion-resistant steel

demonstrates that the market for corrosion-resistant steel in Canada is healthy, and attractive to both

Canadian and U.S. steel producers, and the two-way nature of the market further corroborates Canadian

respondents’ arguments that auto makers operate as if there is an integrated North American auto

market.669
 670 CR/PR at Table CORE-I-1.

 671 CR at CORE-IV-29, PR at CORE-IV-13.

 672 CR/PR at Table CORE-IV-4.

 673 Nucor/SDI’s Posthearing Brief at 10-13. 

 674 Nucor/SDI’s Posthearing Brief at 10-13. 

 675 CR/PR at Table C-7. 

113

Unlike the other subject imports, which either decreased after the orders were imposed or, in the

case of Korea, increased dramatically, imports from Canada have maintained a steady presence in the

U.S. market despite the orders.670 Dofasco, which represents *** percent of Canadian production and is

the *** Canadian exporter to the United States, increased its exports to the United States during the

review period. We find, however, that these imports were not due to price competition with U.S.

suppliers, but instead resulted from several factors: ***.671

Moreover, imports from Canada during the review period were focused on specialty automotive

products to a much greater extent than other subject imports – i.e., *** percent of imports from Canada

were for critical exposed automotive applications, as opposed to *** such imports from Australia, France,

and Japan, *** percent of imports from Korea, and *** percent of imports from Germany.672 In addition,

unlike all the other subject countries, Canadian producers do not export to China and would not be

vulnerable to any potential loss of China as an export market due to any build-up in Chinese capacity.

We have considered the domestic producers’ arguments that subject imports from Canada should

be cumulated. They reject the Canadian producers’ assertion that their exports do not really compete with

U.S. product because their exports are determined by the production and sourcing decisions of their

customers.673 They note that, at the hearing, Dofasco testified it was in competition with a U.S. supplier

for an existing OEM contract. They assert that the experience of U.S. exports in the Canadian market has

no bearing on the Commission’s analysis here and further note that, despite claims that Canadian

producer Stelco is focused exclusively on the Canadian market, recent public statements by its CEO

indicate otherwise.674

These arguments do not themselves establish that Canada does not face conditions of competition

different than those under which imports from the other subject countries are likely to compete in the U.S.

market. The way in which shipments from Canada compete in the U.S. market distinguishes them from

other subject imports, as described above. Although we recognize that there is and will be some price

competition between Canadian and U.S. producers, Canadian producers do not compete for sales in much

of the market, and their dedicated sales into the auto segment are generally based more on demand for a

specific auto part than on price. 

On balance, we find that the conditions of competition with respect to Canada are sufficiently

different so as to provide a reasonable basis for us not to exercise our discretion to cumulate subject

imports from Canada with those from the other subject countries.

Korea and Germany: We find similarities in the conditions of competition in the U.S. market

with respect to Korea and Germany such that it is appropriate to cumulate subject imports from these

countries with each other, but not with subject imports from Australia, France, and Japan.

Unlike imports from Australia, France, and Japan, corrosion-resistant steel from Korea and

Germany had an increasing presence in the U.S. market over the review period. Subject imports from

Korea increased by 30.5 percent, from 253,528 short tons in 2000 to 330,858 short tons in 2005, while

subject imports from Germany increased by 63.5 percent from 2000 to 2005, from 46,453 short tons in

2000 to 75,941 short tons in 2005. This is in sharp contrast to subject imports from Australia, France, and

Japan which decreased, respectively, by 92.6 percent, 50.7 percent, and 39.1 percent, from 2000 to

2005.675
 676 CR/PR at Table CORE-I-1.

 677 CR/PR at Table CORE-I-1.

 678 CR at CORE IV-81, PR at CORE-IV-29.

 679 CR at CORE-IV-54, PR at CORE-IV-20.

 680 CR/PR at Table CORE-IV-43. The presence in the U.S. market of non-subject German micro-alloy steel

shows that an economic incentive exists in shipping to the U.S. market, as well as the existence of established

marketing channels. 

 681 CR/PR at Table CORE-IV-53.

 682 CR/PR at Table CORE-I-12.

 683 POSCO’s Questionnaire Response at 9 (exports to the United States of *** tons in 2005). USS-POSCO’s net

sales in 2005 were *** short tons. CR/PR at Table CORE-III-10.

 684 Thyssen's share of exports of subject merchandise to the United States was *** percent in 2000, *** in 2001,

*** percent in 2002, *** percent in 2003, *** percent in 2004, *** percent in 2005, *** percent in January to June

2005, and *** percent in January to June 2006. Arcelor Germany and Saltzgitter ***. Corus ***. German

Producers’ Questionnaire Responses at II-18a, II-18b.

 685 As noted below, we do not believe we can determine that ThyssenKrupp’s efforts to obtain production

facilities in North America are likely in the reasonably foreseeable future.

114

Subject imports from Korea rose to a substantially higher level at the end of the review period

than at any point during the original or first review periods, reaching a high of 330,858 short tons in 2005,

as compared to their highest level during the original investigation of 193,513 short tons.676 Subject

imports from Germany were higher in 2005, at 75,941 short tons, than at any time during the first or

second review periods, although they were lower with the order in place than they were during the

original investigations.677 

In addition to their exports to the United States, Korean producers and German producers have

both evidenced a strong interest in exporting to the North American market generally, confirming the

attractiveness of the North American region to these producers. Korea’s exports to Canada and Mexico

fluctuated, and increased overall from *** short tons in 2000 to *** short tons in 2005.678 Germany’s

exports to Canada and Mexico during the period also fluctuated at significant levels, and increased overall

from *** short tons in 2000 to *** short tons in 2005.679

German producers’ interest in the North American market is also evident in the level of their

exports to the United States of micro-alloy corrosion-resistant steel. German micro-alloy exports to the

United States were *** during the entire review period (*** short tons in 2005), which further suggests

an interest by German producers in having a substantial presence in the U.S. market.680 Although Korea’s

micro-alloy exports to the United States were ***, they steadily increased from 2003 to 2005, and were

higher in interim 2006 than in interim 2005.

Although the Korean and German industries have demonstrated a strong interest in the U.S.

market, neither has a sufficient presence to supply the U.S. market from within the United States or

elsewhere in North America. Korean producer POSCO has 50 percent ownership of U.S. producer USSPOSCO. While POSCO and its related Korean producer Pohang Coated Steel Co., Ltd. (“POCOS”)

represent a substantial share of Korean production (*** percent in 2005),681 USS-POSCO represented

only *** percent of 2005 production in the United States.682 Moreover, the presence of USS-POSCO has

not stopped POSCO from shipping appreciable quantities of subject product to the U.S. market.683

ThyssenKrupp, representing *** percent of German production and *** German exports of subject

corrosion-resistant steel to the United States since 2000,684 does not have a U.S. production affiliate.685

Nor do German producers Salzgitter and Corus, which together account for *** percent of German
 686 CR/PR at Table CORE-IV-35.

 687 CR at CORE-IV-46, PR at CORE-IV-18, CR/PR at Table CORE-IV-35.

 688 CR/PR at Table CORE-IV-26.

 689 CR/PR at Table CORE-I-12.

 690 CR at CORE-IV-59, PR at CORE-IV-21-22, CR/PR at Table CORE-IV-44. JFE is affiliated with U.S.

producer CSI; Kobe, with U.S. producer Pro-Tec; Nippon and Nittetsu, with U.S. producer I/N Kote; and Nisshin,

with U.S. producer Wheeling-Nisshin.

 691 CR/PR at Table CORE-I-12.

 692 I/N Kote’s production was reported in part in the questionnaire response of Mittal, which owns I/N Kote

together with Nippon Steel.

 693 While the Australian producer has no U.S. affiliates that produce corrosion-resistant steel, no record evidence

demonstrates that Australia has an interest in the U.S. market.

 694 CR at CORE-IV-74-75, PR at CORE-IV-26, n.134.

 695 CR at CORE-III-7, CORE-IV-24, n.28, PR at CORE-III-5, CORE-IV-12, n.28.

 696 Representatives from ThyssenKrupp testified that as a global player, it has to supply its customers, some of

which have moved to North America. Thus, ThyssenKrupp has a strategy to be present in the NAFTA market. Tr.

at 521 (Gruenhage). While ThyssenKrupp has indicated an interest in establishing a production facility in North

America, by purchasing the assets of Dofasco in Canada, or constructing or acquiring a production facility in the

United States (CR at CORE-III-7, CORE-IV-24, n.28, PR at CORE-III-5, CORE-IV-12, n.28), it testified that this is

“a period of uncertainty.” Tr. at 521 (Gruenhage). The uncertainty lies in the fact that its ability to purchase

Dofasco is outside of its control in the regulatory process. The U.S. Department of Justice has required, as part of its

antitrust review, that Arcelor-Mittal divest itself of Dofasco, or some other specified Mittal facility, and it is

unknown at this time whether Dofasco will be sold or remain part of the Mittal group. CR at CORE-IV-24, PR at

CORE-IV-12, n.28. Thus, we cannot determine that it is more likely than not that it will acquire Dofasco in the

reasonably foreseeable future. Moreover, ThyssenKrupp’s ability to either construct or acquire a production facility

(continued...)

115

production.686 Arcelor Germany, which will soon be affiliated with a U.S. producer (Mittal Steel USA),

represents only *** percent of German production.687

Thus, for Korea and Germany, the affiliations of their producers with U.S. producers represent

either a relatively small share of U.S. production (in the case of Korea) or a relatively small share of

foreign industry production (in the case of Germany). This is in direct contrast with the French and

Japanese producers, for which producers accounting for the vast majority of production of corrosionresistant steel are affiliated with major U.S. producers of corrosion-resistant steel. Arcelor in France,

which also will soon be affiliated with Mittal Steel USA, accounts for *** percent of French corrosionresistant production.688 Its U.S. affiliate Mittal Steel USA accounted for *** percent of U.S. production

in 2005.689 Five Japanese producers representing *** percent of Japanese production are related to U.S.

producers of corrosion-resistant steel.690 Collectively these U.S. producers related to Japanese producers

accounted for *** percent of domestic production in 2005,691 not counting the production of I/N Kote.692

These distinctions are important because they show that, notwithstanding any interest French and

Japanese producers may have in the U.S. market, they will likely exercise it largely through their U.S.

affiliates.693 The Korean and German producers, by contrast, have an interest, as indicated by the level of

their exports of both subject and non-subject corrosion-resistant steel to the United States and to North

America generally, but lack a significant presence through transnational affiliations. While POSCO has

indicated plans to construct a production facility in Mexico, such a facility would not be completed until

2009.694 Similarly, while ThyssenKrupp has indicated an interest in establishing a production facility in

North America, by purchasing the assets of Dofasco in Canada, or constructing or acquiring a production

facility in the United States,695 the record does not indicate that it is more likely than not that this will

happen in the reasonably foreseeable future.696
 696 (...continued)

in the United States is even more distant than its ability to purchase Dofasco. Construction of a new facility takes

years and any planning appears to be at a relatively early stage. In 2006 ThyssenKrupp began construction of a mill

in Brazil with the announced intention that it would be a source of slabs for, among other things, its North American

coated steel operations. This Brazilian mill would only be a factor once there was a ThyssenKrupp production

facility in North America.

 697 CR/PR at Table CORE-IV-56. In the first half of 2006, shipments by Korean producers outside the Asian

region were *** short tons, markedly higher than in the first half of 2005, when they were *** short tons.

 698 CR/PR at Table CORE-IV-38. German non-EU shipments were *** short tons in 2005, which was higher

than in 2004 (*** short tons), even though German producers’ total exports were higher in 2004 than in 2005. 

German producers shipped approximately *** short tons to export markets outside Europe in first-half 2006. CR/PR

at Table CORE-IV-38.

 699 We note that, while the proportion of Australia’s shipments to China and other Asian markets decreased from

2000 through 2005, its shipments to its home market increased, from *** percent of total shipments in 2000 to ***

percent of total shipments in 2005. CR/PR at Table CORE-IV-12. 

 700 CR/PR at Tables CORE-IV-39, CORE-IV-57.

 701 CR/PR at Table CORE-I-1.

 702 CR/PR at Tables CORE-IV-12, IV-29, IV-47.

 703 CR/PR at Table CORE-IV-12. We recognize that these percentages have fluctuated over the period of review.

 704 CR/PR at Table CORE-IV-47.

116

An additional point that distinguishes producers in Korea, and to a lesser extent Germany, from

producers in the other subject countries is their level of shipments outside their own geographic region. 

Exports from Korea to destinations outside Asia (such as to the European Union, United States, and other

markets) were nearly 900,000 tons in 2005, accounting for 12.4 percent of total Korean industry

shipments in 2005.697 Similarly, during the review period, German producers shipped significant

quantities of corrosion-resistant steel outside their geographic region (the European Union), representing

*** percent of the German industry’s total shipments in 2005.698 This is in contrast to producers in

Australia, France, and Japan, whose extra-region shipments accounted for less than *** percent of their

total industry shipments in 2005.699 These differences indicate a greater willingness of Korean producers,

and to a lesser extent German producers, to ship corrosion-resistant steel products to overseas markets,

including the United States, as compared to producers in Australia, France, and Japan.

We recognize that there are some important differences in the conditions of competition pertinent

to Korea and Germany. For example, the German industry is more heavily focused on production for

automotive uses (*** percent of total production in 2005) as compared to the Korean industry (***

percent of total production in 2005).700 Despite some differences, we find that the similarities outlined

above indicate that cumulation of subject imports from Korea and Germany is warranted, but that imports

from these two countries should be considered separately from imports from Australia, France, and Japan.

Australia, France, Japan: Unlike the subject industries in Korea and Germany, subject producers

in Australia, France, and Japan have demonstrated a lack of interest in supplying the U.S. market to any

significant degree. Indeed, subject imports from these three countries have dropped to very low levels

since the original investigation period.701 Rather, the industries in all three countries are focused to a

significant extent on markets in their respective regions, including their home markets.702 With respect to

Australia, a large percentage of its shipments have been to its home market, reaching *** percent in 2005. 

The next largest destination generally has been to Asia.703 With respect to Japan, a large percentage of its

shipments consistently have been to its home market, roughly *** percent throughout the period of

review. Likewise, the next largest destination consistently has been to Asia, remaining above *** percent

for several years.704 With respect to France, the largest percentage of its shipments consistently have been

to either its home market or used for internal consumption/transfers, roughly *** percent. The next
 705 CR/PR at Table CORE-IV-29.

117

largest destination has been to the European Union, which has been the destination of more than ***

percent of French shipments throughout the period of review.705

Importantly, as noted above, French and Japanese producers, accounting for the vast majority of

production of corrosion-resistant steel in their respective countries, are affiliated with major U.S.

producers of corrosion-resistant steel, thereby making it more likely that they would supply the U.S.

market from their affiliates’ U.S. production.

Thus, while we recognize that there are some differences in the conditions of competition for

these three countries, for example with respect to the markets they primarily serve and the fact that the

Australian industry does not have a production platform in the United States, we find that the similarities

outweigh these differences. On balance, then, we do not find any distinctions that provide a sufficient

basis for us not to exercise our discretion to cumulate subject imports from Australia, France, and Japan.

5. Conclusion

In conclusion, we do not find that the no discernible adverse impact exception to cumulation

applies to any of the subject countries. In addition, the record indicates that there would likely be a

reasonable overlap of competition between subject imports from each country and the domestic like

product as well as among subject imports from each country, based on the traditional four factors – the 

fungibility of the product, the simultaneous presence and geographic overlap of subject imports and the

domestic like product, at least during portions of the review period, and the existence of common

channels of distribution. However, based on important differences with respect to other factors, we do

not exercise our discretion to cumulate subject imports from Canada with those from any other country. 

Based on similar conditions of competition for imports from Korea and Germany, we exercise our

discretion to cumulate imports from those two countries, but given their differences in conditions of

competition with imports from Australia, France, and Japan, we do not cumulate Korean and German

imports with those from Australia, France, and Japan. We do exercise our discretion to cumulate subject

imports from Australia, France, and Japan, and consider them on a cumulated basis.
 706 Section 752(a)(6) of the act states that “the Commission may consider the magnitude of the margin of

dumping” in making its determination in a five-year review investigation. 19 U.S.C. § 1675a(a)(6). The statute

defines the magnitude of dumping to be used by the Commission in five-year review investigations as “the dumping

margin or margins determined by the administering authority under section 1675a(c)(3) of this title.” 19 U.S.C. §

1677(35)(C)(iv). In Commerce’s final five-year review determinations with respect to all subject countries, it

assigned five-year review margins as follows: Australia, 24.96 percent; Canada, 11.71 to 22.70 percent; France,

29.41 percent; Germany, 10.02 percent; Japan, 36.41 percent; and Korea, 17.70 percent. CR/PR at Table CORE-I-7.

Although the statute does not expressly define the “magnitude of the net countervailable subsidy” to be

used by the Commission in five-year reviews, it states that “[t]he administering authority shall provide to the

Commission the net countervailable subsidy that is likely to prevail if the order is revoked or the suspended

investigation is terminated.” 19 U.S.C. §1675a(b)(3). Commerce found likely subsidy rates as follows: France, 0.16

percent; and Korea, 1.15 percent. It revoked the countervailing duty order against corrosion-resistant steel from

Germany. CR/PR at Table CORE-I-8.

In five-year reviews concerning countervailing duty orders the Commission is required to consider

“information regarding the nature of the countervailable subsidy and whether the subsidy is a subsidy described in

Article 3 or 6.1 of the Subsidies Agreement.” 19 U.S.C. §1675a(b)(6). In its final determinations, Commerce

described the various subsidy programs as follows:

France. In its final determination in the review of the countervailing duty order, Commerce identified 9

programs which provided countervailable subsidies to French subject producers, none of which fell within the

meaning of Article 3 the Subsidies Agreement. 

Korea. In its final determination in the review of the countervailing duty order, Commerce identified 11

programs which provided countervailable subsidies to Korean subject producers, 5 of which were found to be export

subsidies as described in Article 3 of the Subsidies Agreement. CR at OVERVIEW-16-17, PR at OVERVIEW-14,

nn.41 and 42.

 707 The German respondents urged the Commission to consider a period not to exceed 24 months. German

Respondents’ Posthearing Brief at 2.

 708 We applied the legal standards discussed in section III above.

 709 19 U.S.C. § 1675a(a)(4).

118

D. Likelihood of Continuation or Recurrence of Material Injury If 

the Antidumping Duty and Countervailing Duty Orders Are Revoked

1. In General

We applied the legal standards discussed in section III above.706 As a preliminary matter, for

purposes of the reviews of these corrosion-resistant steel orders and based on the facts on this record, we

have given significantly greater weight to developments likely to occur in the next two years than to those

pertaining to later dates, although we cite other information as appropriate. No party argued for a

different time period as constituting the “reasonably foreseeable” future.707

2. Conditions of Competition and the Business Cycle708

The statute directs the Commission to analyze the impact of subject imports on the domestic

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

affected industry.”709 

In the first five-year reviews, the Commission found that supply and demand conditions as well

as the business cycle for corrosion-resistant steel had not changed significantly since the original

investigations. The Commission noted the two processes for making corrosion-resistant steel, hotdipping and electrolytic galvanizing, and observed that demand for corrosion-resistant steel depended on

the level of demand in the principal end use markets, automotive and construction. It described demand

for hot-dip corrosion-resistant steel as having grown significantly faster since the original investigations
 710 USITC Pub. 3364 at 49-51.

 711 CR at CORE-II-15, PR at CORE-II-10.

 712 CR at CORE-II-17, PR at CORE-II-12.

 713 CR at CORE-II-13, PR at CORE-II-9.

 714 CR/PR at Table CORE-I-1.

 715 CR at CORE-II-6, III-4-6, PR at CORE-II-5, III-3-5.

 716 CR/PR at Table CORE-II-3.

119

than demand for electrogalvanized product. It also found that apparent U.S. consumption had increased

since the original investigations. 

The Commission in the first reviews found subject imports and the domestic like product to be

broadly interchangeable and price therefore an important factor in purchasing decisions. It further found

that price competition had increased since the original investigations with the consolidation of purchasing

power in the automobile industry, the reduced number of service centers, and the adoption and application

of international standards. It found that pricing patterns had not changed significantly during the review

periods, with many purchasers reporting that they changed suppliers only infrequently. Domestic

producers reportedly sold their product both by contract and on the spot market and indicated that

contracts gave them little protection given that purchasers requested price concessions when spot prices

fell.

As in the original investigations, domestic producers dominated the U.S. market for corrosionresistant steel during the first review period and had made significant investments since 1992 to add

capacity and improve existing capacity. The Commission noted that corrosion-resistant steel production

was technologically complex and capital intensive, with high fixed costs, requiring high capacity

utilization rates for domestic producers to stay profitable. It further noted the affiliations of the major

Japanese producers with U.S. producers.710

We find the following conditions of competition relevant to our determinations in these reviews.

a. Demand

The demand for corrosion-resistant steel depends on the demand in its end-use sectors, primarily

automotive manufacturing and construction, although it is also used in home appliances, HVAC

components, and battery cans and components.711 There are different cycles for the different end user

industries, and the evidence is mixed on whether there is a distinctive business cycle for corrosionresistant steel, with the majority of importers and purchasers reporting that there is not a distinctive

business cycle and the majority of producers reporting that there is one.712 Apparent U.S. consumption of

corrosion-resistant steel showed some fluctuations from 2000 through 2005, but was higher in 2005, at

22.7 million short tons, as compared to 21.9 million short tons in 2000.713 Apparent U.S. consumption

has increased by two-thirds since 1992, the final year examined in the original investigations, when it was

13.6 million short tons.714 

In the United States, hot-dip galvanized demand appears to be increasing, while electrogalvanized

demand may be declining, a trend that is continuing from the first reviews. The shift can be attributed to

recent technological changes that have encouraged automakers to use the less costly hot-dip steel for

exposed auto parts.715 In the United States, electrogalvanized corrosion-resistant steel goes almost

exclusively to automotive end users, who also receive about 40 percent of shipments of hot-dip corrosionresistant steel. Overall, the automotive sector accounts for 47.6 percent of corrosion-resistant steel

shipments to the U.S. market.716 The growth in U.S. demand for hot-dip corrosion-resistant steel is

reflected in the fact that all the capacity increases by the domestic industry over the review period were
 717 CR/PR at Table CORE-III-3. We discuss additions to capacity by the domestic industry in more detail in our

discussion of supply conditions.

 718 CR/PR at Table CORE-III-3.

 719 CR at CORE-II-14, PR at CORE-II-9-10, n.24.

 720 CR at CORE-II-13-15, PR at CORE-II-9-10.

 721 Joint Respondents’ Prehearing Brief at 13; Auto Producers’ Posthearing Brief, Appendix at 8, 11.

 722 CR at CORE-II-19, PR at CORE-II-13.

 723 Tr. at 479-481 (Cover); Canadian Respondents’ Posthearing Brief, Answers to Commissioners’ Questions at

44.

 724 CR at CORE-II-19, PR at CORE-II-13.

 725 CR at CORE-II-19, PR at CORE-II-13, n.32.

120

for hot-dip steel.717 U.S. producers’ hot-dip capacity grew from 19.1 million short tons in 2000 to 20.1

million short tons in 2005, whereas electrogalvanized capacity decreased from 4.4 million short tons to

3.4 million short tons, and other capacity also decreased from 2.9 million short tons to 2.7 million short

tons over the same period.718

U.S. demand has been robust through the first half of 2006, and demand growth is expected to

continue for the reasonably foreseeable future, albeit at a slower rate. While demand in the residential

construction sector showed signs of weakening at the end of the period and into 2007, which may reduce

demand for HVAC components and appliances, non-residential construction is expected to remain strong

into 2007 and is an increasingly more important market for corrosion-resistant steel producers than

residential construction as appliance production in the United States declines.719 North American auto

production, which has been high over the review period by historical standards, is expected to decline

somewhat in 2006, based on announced cuts in auto production by GM, Ford, and DaimlerChrysler, but is

expected to recover in 2007 and grow at a slow rate through 2008, although heavy truck production is

expected to decline in 2007.720 Production in 2005 by Japanese transplant auto producers increased, 12.6

percent; production by German transplant companies increased by 1.4 percent; and a Korean

manufacturer began U.S. production. North American vehicle production by Honda, Nissan, and Toyota

is projected to increase for the foreseeable future.721

The cost share of corrosion-resistant steel varies greatly by end-use. In autos and light trucks it is

1.4 to 5 percent of the total cost of the vehicle, but in individual vehicle parts it can be 50 to 85 percent,

and an even higher percentage in certain construction components such as steel decks and roofs.722 While

some domestic producers argue that a shift in demand from SUVs and light trucks to smaller passenger

cars will result in less corrosion-resistant steel per car, even if auto demand does not decline, the record

evidence on this issue is mixed. Some smaller cars and mid-sized SUV/CUVs use proportionately more

corrosion-resistant steel because of their unibody construction rather than a hot-rolled truck frame.723 

Demand for corrosion-resistant steel outside the United States increased during the review period. 

Producers, importers, and purchasers attributed this increase in global demand to such factors as rapidly

increasing demand in China and other industrializing countries in Asia, Latin America, and Eastern

Europe; global economic growth; and increased auto production and construction activity worldwide.724

Forecasts by *** predict a significant increase in global vehicle production in the foreseeable future,

driven by developing countries such as China, India, and Brazil. Dofasco reported that Canadian auto

production will increase through 2008 and that its shipments to the Canadian non-residential construction

industry are expected to increase.725 Worldwide consumption of coated steel sheet increased by ***

percent between 2000 and 2005, paced by substantial growth in consumption in East and Southeast Asia,

and despite more modest growth in Europe and North America. Global consumption of coated steel sheet
 726 CR at CORE-IV-88, PR at CORE-IV-32, CR/PR at Tables CORE-IV-66, IV-67.

 727 The safeguard tariff was 30 percent ad valorem for the first year of relief and 24 percent ad valorem starting

on March 20, 2003. CR at OVERVIEW-12-15, PR at OVERVIEW-11.

 728 CR/PR at Tables CORE-I-12, III-1.

 729 CR at CORE-IV-36, PR at CORE-IV-16; French Respondents’ Posthearing Brief at 2-3.

 730 CR/PR at Table CORE-I-12.

 731 Joint Respondents’ Prehearing Brief at 3.

 732 CR/PR at Table CORE-III-9. Much of the reduction in fixed costs as a percentage of total costs was due to the

substantial rise in raw material and energy costs. However, unit fixed costs also declined markedly, from $228 per

ton in 2000 to $200 in 2005. The unit fixed costs were even lower in 2003, 2004, and interim 2006. If inflation

were factored in, the decline of unit fixed costs would have been even greater in real terms. CR/PR at Table COREIII-9.

 733 CR/PR at Table C-7.

 734 CR/PR at Table CORE-I-1.

121

is forecast to continue to grow in the reasonably foreseeable future, with the growth relatively evenly

distributed in all major markets.726

b. Supply

The review period was a time of significant consolidation and restructuring by U.S. producers, a

process that was facilitated in part by global safeguards on a variety of steel products, including

corrosion-resistant steel, from March 20, 2002, through December 4, 2003.727 The domestic industry,

after experiencing bankruptcies from 2000 to 2002, underwent consolidation between 2003 and 2006. 

ISG acquired all of LTV’s assets in 2002, the assets of Bethlehem Steel in 2003, and Weirton Steel’s

assets in 2004. In 2003, U.S. Steel bought the steel-making assets of National Steel. In 2004, Severstal

purchased the assets of Rouge Steel. In 2005, Mittal acquired ISG, including corrosion-resistant

production facilities previously owned by LTV Steel, Bethlehem Steel, Weirton Steel, and Ispat Inland.728

In June 2006, Mittal Steel USA’s parent company, Mittal Steel N.V., announced a merger with Arcelor. 

Once this merger closes in the first half of 2007, it will form the world’s largest steel producer with

steelmaking facilities located in regions around the world.729 In 2005, the top four domestic mills, Mittal

Steel USA, U.S. Steel, AK Steel, and Nucor, accounted for *** percent of U.S. corrosion-resistant steel

production,730 as compared to *** percent in 1999.731

During the process of consolidation and restructuring, domestic producers renegotiated labor

contracts, shed more than $7.5 billion in legacy costs, reduced their fixed costs, and increased their

productivity. Fixed costs, approximated in our data as the ratio of “other factory costs” to net sales,

decreased from 41.4 percent in 2000 to 28.0 percent in 2005.732 Productivity increased by 66.1 percent

over the period.733 Thus, while corrosion-resistant steel production is still capital intensive, the domestic

industry, as a result of the consolidations and restructuring, has lowered its fixed costs and is better able

to control output and production and maintain price levels in response to changing business cycles than it

was during the original investigations and first reviews.

With substantial growth in apparent U.S. consumption since the period examined in the original

investigations, domestic producers’ share of apparent consumption by quantity has risen slightly and was

in the range of 87-93 percent during this review period, as compared to 83-86 percent during the original

investigation period.734
 735 CR/PR at Table C-7.

 736 CR/PR at Table CORE-III-3.

 737 CR/PR at Table CORE-III-12.

 738 In the hot-dip process, as noted earlier, steel sheet is passed through a bath of molten zinc or aluminum,

whereas in the electrolytic process, steel sheet is passed through a series of electrolytic cells and zinc or other metal

is electrolytically plated onto the surface of the steel. CR at CORE-I-18, PR at CORE-I-16.

 739 CSN’s Questionnaire Response.

 740 Also, Thyssen, a German producer, has publicly announced that it is considering either establishing a

greenfield plant in the United States, or entering into a joint venture with, or acquiring production facilities from, a

U.S. producer, which we see as additional evidence that producers view U.S. capacity as a good investment. As

noted above, however, we do not find it more likely than not that a Thyssen facility in the United States will be

established within the reasonably foreseeable future. CR at CORE-III-5-7, PR at CORE-III-4-5.

 741 CR/PR at Table CORE-II-1.

 742 Auto Producers’ Posthearing Brief, Appendix at 80-81.

 743 CR at CORE-III-7, PR at CORE-III-5.

 744 CR at CORE-I-22, PR at CORE-I-18-19.

122

While the domestic industry’s overall capacity remained relatively steady during the review

period, it did increase its capacity to produce hot-dip product, in response to growing demand.735

Capacity utilization fluctuated over the period, reflecting closures and start-ups. While the industry had

excess capacity for both hot-dip and electrogalvanized product, its capacity utilization rate was generally

higher for hot-dip production, particularly in the latter part of the period. Hot-dip capacity utilization was

at 80.2 percent in 2005 and 86.9 percent in interim 2006, as compared to 74.8 percent in 2005 and 73.4

percent in interim 2006 for electrogalvanized capacity utilization.736

In addition, the domestic industry invested in new facilities during the period and plans to add 1.9

million net tons of corrosion-resistant capacity by 2008. The industry’s capital expenditures jumped to

$428 million in 2005, from $295 million in 2000, with capital expenditures totaling $1.65 billion through

June 2006; research and development expenses increased to $34 million in 2005, from $16 million in

2000, and were $217.7 million through June 2006.737 SeverCorr will start production in 2007 of a new

$880 million facility started in 2005, which will produce 400,000 tons of hot-dip galvanized and

galvannealed corrosion-resistant steel, along with non-corrosion-resistant steel products. Nucor plans to

add 500,000 short tons of hot-dip galvanized capacity in 2006. Mittal plans to bring on line 700,000 tons

of hot-dip galvanizing capability in 2006-07 and will shut down about 410,000 tons of other hot-dip and

aluminizing capacity. Winner opened a new third hot-dip galvanizing line in interim 2006 for auto and

appliance markets.738 CSN was a new entrant during the review period, with *** short tons of capacity in

2001.739 USS-POSCO ***, and Steelscape moved its idled California plant to Louisiana where it was

scheduled to be restarted.740

U.S. producers sell slightly more than a third of their production directly to automotive end users. 

They sell about 25 percent directly to construction end users and just under 10 percent directly to other

end users, such as appliance manufacturers, and the remaining 30 percent to service centers and

distributors.741 Automotive producers report that they purchase only minimal quantities from service

centers, for irregular, small-volume orders of non-standard products.742 Most domestic producers do not

produce other products on the same equipment or with the same employees.743 Those that do produce

micro-alloy and alloy or stainless steel report these other products to be higher margin, but much lower

volume.744

The vast majority of corrosion-resistant steel sold by both domestic producers and importers is

made to order. Twelve of 17 responding producers reported selling at least 95 percent of their corrosionresistant steel produced to order and 18 of 20 responding importers reported selling 75 percent of their
 745 CR at CORE-II-29, PR at CORE-II-21.

 746 German Respondents’ Posthearing Brief at 7; Japanese Respondents’ Posthearing Brief at 13; Tr. at 229-230

(Goodish), 258-259 (Goodish), 329-330 (Bates).

 747 Tr. at 187 (Goodish), 213-214 (Platz), 246 (Goodish).

 748 CR/PR at Figure CORE-III-1. Service center inventory data, however, are for all steel sheet and are not

limited to corrosion-resistant product.

 749 Tr. at 213-214 (Platz).

 750 U.S. Steel’s Posthearing Brief at 4-8.

 751 U.S. Steel’s Posthearing Brief at 3-4.

 752 Joint Respondents’ Prehearing Brief at 18-21. For example, auto producers reported that there were shortages

on committed tons of corrosion-resistant steel and for additional tons at contract prices. *** stated that it increased

spot market purchases due to shortages from U.S. suppliers. CR at CORE-II-5, PR at CORE-II-4, n.7.

 753 CR at CORE-II-5, PR at CORE-II-4-5.

 754 CR/PR at CORE-II-5.

 755 CR at CORE-II-5, PR at CORE-II-4.

123

corrosion-resistant steel produced to order.745 Moreover, some product being held in inventory, whether

by producers, importers, or service centers, may already be committed to a specific customer, particularly

in the automotive sector.746 Because service centers are always trying to gauge whether prices are likely

to rise or fall and plan their purchases accordingly, the market is characterized by periodic inventory

corrections that last a few months as service centers stop buying from mills and prices decline temporarily

until restocking resumes.747 After a correction in 2005, service center inventories began rising again.748

By the end of the review period, service center inventories were relatively high, suggesting another

correction may be imminent.749

The parties disagree about the degree to which there have been supply shortages in the U.S.

market during the period of review. The domestic producers maintain that in 2004 their ability to supply

corrosion-resistant steel may have been constrained to some extent by raw material shortages but that

there is currently no short supply. In addition, they assert that some shortages alleged by purchasers were

not real shortages but resulted from consumers wanting quantities in excess of contract volumes at low

contract prices, or from automakers switching product grades on very short notice.750 Excess domestic

capacity, they say, is incompatible with assertions of supply shortages.751 By contrast, respondents

maintain that during the review period domestic supply was extremely tight and U.S. producers were not

able to supply additional quantities requested by their customers, including certain required quantities and

grades, making imports a necessary part of the market. They noted the questionnaire responses from

producers and importers that had refused or been unable to supply corrosion-resistant steel at certain

times since 2000.752 Purchasers reported periodic shortages during the review period, mostly in 2004 and

early 2005, when demand and prices peaked, but continuing in 2006.753

The record provides support for these characterizations of supply shortages. Eleven of 17

producers responding to the Commission’s questionnaires and eight of 26 responding importers reported

that they had refused orders or been unable to supply corrosion-resistant steel at certain times since

2000.754 The reported shortages were in the form of allocations, controlled order entries, and the

unwillingness of some domestic mills to supply quantities above those specified in their contracts, all of

which forced some purchasers into the spot market. Some of the shortage can be attributed to unplanned

outages at certain domestic facilities and labor unrest at AK Steel in 2006.755 The record also indicates,

however, that domestic producers during the period of review abandoned their prior practice of selling

over-contract volumes to automotive customers at contract prices, because they could obtain higher prices

in the spot market. While automotive customers described the phenomenon as a type of shortage or

allocation, we do not view that as an entirely accurate description. Rather, it appears as if automotive
 756 CR/PR at Table C-7.

 757 CR/PR at Table CORE-IV-2.

 758 CR at CORE-III-11, PR at CORE-III-8, n.23.

 759 CR/PR at Tables CORE-IV-64, IV-67.

 760 Korean Respondents’ Posthearing Brief at 7.

 761 French Respondents’ Posthearing Brief at 1-3, Exhibit 6.

 762 Auto Producers’ Prehearing Brief at 50; Auto Producers’ Posthearing Brief, Appendix at 56-58.

 763 CR/PR at Table CORE-I-1.

 764 Mittal USA’s Posthearing Brief, Answers to Chairman Pearson’s Questions at 8-15; CR/PR at Tables COREIV-29, IV-36.

124

customers generally could obtain the necessary steel, but they had to pay more as they were competing

against higher spot market prices. We recognize that this was a new phenomenon. 

In addition to domestic supply and subject imports, non-subject imports held a modest share of

the U.S. market during the review period. Non-subject imports as a share of apparent U.S. consumption

rose irregularly over the review period, and were the highest in 2004 at 9.7 percent, when demand and

prices were peaking.756 Non-subject imports then declined somewhat in 2005. In 2005, the largest

sources of non-subject imports were India, Taiwan, Mexico, Brazil, and China. Imports from China were

147,794 short tons in 2005 (less than one percent of apparent U.S. consumption), but were higher in

January-June 2006, at 292,426 short tons.757

During the review period, U.S. producers’ exports constituted 3 to 5 percent of their total

shipments and were almost entirely to Canada and Mexico. In 2004, Canada revoked antidumping duty

orders on corrosion-resistant steel from the United States, as well as Australia, Brazil, France, Germany,

Japan, Korea, New Zealand, Spain, Sweden, and the United Kingdom. U.S. exports to Canada increased

by 210,273 short tons in 2005.758

Global production capacity also increased during the review period and is expected to continue

increasing in the near future in both the subject countries and non-subject countries, including China,

other Asian countries, the EU, Turkey, and Russia. Although China has been and is expected to remain a

net importer of corrosion-resistant steel for the foreseeable future, the substantial increase in Chinese

capacity will likely slow imports into China of corrosion-resistant steel somewhat.759 As virtually all

Chinese capacity is for hot-dip product, imports into China of electrogalvanized corrosion-resistant steel

will not be affected by any increase in Chinese capacity.760

c. Local/Regional versus Global Corrosion-Resistant Steel Markets

Consolidations and mergers among corrosion-resistant steel producers worldwide as well as in the

United States have enabled producers to supply their customers from nearby production facilities. The

stated strategy of both Arcelor and Mittal, even before their merger, for example, was to acquire or build

plants to serve clients within a region, rather than having to export product from one region to another

region.761 U.S. automakers indicate a preference for sourcing their corrosion-resistant steel from suppliers

in North America.762 Despite the growing local or regional nature of corrosion-resistant steel markets,

significant quantities of corrosion-resistant steel continue to be traded internationally, as is evidenced by

the level of non-subject imports into the United States during the review period,763 as well as exports into

China from non-Asian sources.764
 765 CR at CORE-V-9, PR at CORE-V-8.

 766 Mittal USA’s Prehearing Brief at 39-40.

 767 CR at CORE-V-10, PR at CORE-V-8-9.

 768 CR at CORE-V-10, PR at CORE-V-8, n.15.

 769 CR at CORE-V-9, PR at CORE-V-8, n.14.

 770 CR at CORE-V-11, PR at CORE-V-9. A meet-or-release clause requires a seller to meet a lower offer to its

customer or to release the customer from the contract.

 771 Nucor/SDI’s Prehearing Brief at 50-52; Auto Producers’ Prehearing Brief at 27-31.

 772 Nucor/SDI’s Prehearing Brief at 50-52.

 773 Auto Producers’ Prehearing Brief at 27-31.

 774 CR at CORE-II-24-27, PR at CORE-II-16-19.

125

d. Purchasing Practices

Purchasers buy corrosion-resistant steel frequently, often daily or weekly; some buy the product

consistently over the course of a year, while others experience seasonal peaks in their purchasing. 

Producers generally reported determining prices on a transaction-by-transaction basis, based on market

conditions and raw material costs.765 As in the original investigations and first reviews, price continues to

be an important factor in purchasing decisions, given the broad interchangeability of corrosion-resistant

steel from different suppliers.766

A majority of the largest domestic producers’ sales are by long-term contracts, although several

producers make the majority of their sales on the spot market. Six producers (***), representing a

majority of domestic production, reported that 60 percent or more of their sales are on a long-term

contract basis, while eight of 20 U.S. producers reported that 85 percent or more of their sales are on a

spot basis.767 Automotive and appliance end users tend to favor longer-term contracts, whereas the

construction industry’s purchasing pattern is more short-term and project-based.768 Auto producers

reported that they generally enter into contracts with individual producers to supply steel for certain auto

parts and that the life of the vehicles is multiple years.769 Long-term contracts generally fix either price

only or both price and quantity and have no meet-or-release provisions.770 Both domestic producers and

respondent automakers agree that, toward the end of the review period, the duration of contracts was

becoming shorter, ***.771

The parties disagree on why contract practices have changed, with each side describing the other

as primarily responsible for the changes. According to domestic producers, even when sales are under

contract, if spot prices fall, purchasers do not hesitate to request price concessions under the contracts. 

Conversely, when prices and costs rise, the domestic producers are locked into below-market prices under

the contracts.772 Respondent automakers assert that the U.S. industry is unwilling to commit to longerterm contracts because they believe prices will climb even higher than they did during the review period,

and they have forced automakers to accept volume limitations in their contracts.773 On balance, we find

that the relative balance of market power between domestic corrosion-resistant steel producers and auto

producers has led to a stalemate in which multi-year contracts at set prices and volumes are unlikely

under current market conditions. 

e. Substitutability

Domestic and imported corrosion-resistant steel, both subject and non-subject, generally is used

in the same applications, at least for lower end applications. The majority of purchasers reported that the

domestic product is comparable or superior to subject imports from each country in every category.774

The qualification process for suppliers takes from one week to two years. Purchasers reported that some
 775 CR at CORE-II-27, PR at CORE-II-20. Seven of 35 purchasers reported that one or more suppliers (citing

both domestic, suppliers from subject countries, and suppliers from nonsubject countries) had failed to qualify their

product or lost their approved status since 2000.

 776 CR at CORE-V-2, PR at CORE-V-1-2.

 777 Joint Respondents’ Prehearing Brief at 9-11.

 778 CR/PR at Table CORE-III-9.

 779 While we considered subject imports from Australia, France, and Japan on a cumulated basis, by necessity we

have included some discussion of each of the countries individually, because certain facts are specific only to a

particular country.

 780 USITC Pub. 3364 at 51-52. The Commission in the original investigations cumulated subject imports from

Australia, Canada, France, Germany, Japan, and Korea.

 781 CR/PR at Table CORE-I-1.

 782 CR/PR at Table C-7.

126

domestic and subject producers have failed to qualify on quality grounds, but there is some evidence that

the problems tend to be resolved, resulting in the supplier becoming qualified.775 

f. Raw Material/Energy Costs

Over the review period, particularly in the latter half, the U.S. industry’s raw material and energy

costs increased significantly and are forecast to remain at high levels for the foreseeable future.776 Such

increases have affected producers of corrosion-resistant steel on a worldwide basis. Integrated producers

that own and control their raw material inputs (mainly cold-rolled sheet) are better able to manage rising

raw material costs.777 While the domestic industry’s variable costs as a percent of total costs increased

over the period, due in large part to rising raw material costs, unit fixed costs went down and productivity

increased.778

3. No Likelihood of Continuation or Recurrence of Material Injury Upon

Revocation of the Orders on Cumulated Subject Imports from Australia,

France, and Japan

a. Likely Volume779

We applied the legal standards discussed in section III above. 

In the original determinations, the Commission found that the cumulated subject imports

decreased slightly from 1990 to 1991, and then increased sharply to 1.9 million short tons in 1992, along

with a significant increase in market share during the same period.780 During the original investigation

period, the volume of subject imports from the three countries now cumulated – Australia, France, and

Japan – was 1.1 million short tons, or 8.1 percent of apparent U.S. consumption, in 1992.

After the orders were imposed, imports from the three countries dropped dramatically and were at

minimal levels during both review periods.781 In 2005, cumulated subject imports from the three

countries were 18,556 short tons, or 0.1 percent of apparent U.S. consumption and of U.S. production. 

Their highest level during the current review period was 40,332 short tons in 2002, or 0.2 percent of

apparent U.S. consumption and of U.S. production.782 The three cumulated countries currently supply the

least amount of corrosion-resistant steel to the U.S. market out of the subject countries.

Quantities held in inventory, both in the United States and in the cumulated subject countries, do

not appear to represent significant volumes that could be diverted readily to the U.S. market upon

revocation of the orders. First, there were no reported inventories in the United States from either
 783 CR/PR at Table C-7.

 784 Japanese Respondents’ Posthearing Brief at 13; Tr. at 229-230 (Goodish), 258-259 (Goodish), 329-330

(Bates). French producers’ inventories, as a share of total shipments, were *** percent in each full year of the

period, and were *** short tons in 2005. CR/PR at Table CORE-IV-29. Japanese producers’ inventories, as a share

of total shipments, decreased from *** percent in 2000 to *** percent in 2005, and were *** short tons in 2005. 

CR/PR at Table CORE-IV-47. The one exception is Australia. While the Australian producer’s inventories, as a

share of total shipments, increased irregularly, from *** percent in 2000 to *** percent in 2005, and were *** short

tons in 2005, we do not foresee a significant increase in volume as the Australian producer’s focus is on its home

and Asian markets. CR/PR at Table CORE-IV-12. 

 785 CR/PR at Tables CORE-IV-10, IV-28, IV-46.

 786 CR/PR at Tables CORE-IV-10, IV-27, IV-45.

 787 CR/PR at Table CORE-IV-12.

 788 CR/PR at Table CORE-IV-12.

 789 CR/PR at Table CORE-IV-29.

 790 CR/PR at Table CORE-IV-47.

127

Australia or France during the review period, and inventories of Japanese product were only *** short

tons in 2005.783 Second, despite the existence of inventories held by the cumulated subject country

producers at the end of the review period, the record indicates that most corrosion-resistant steel,

including that held in inventory, is made to order and therefore already committed to specific

customers.784 

Producers in all three countries have increased their capacity and production of corrosionresistant-steel since the original investigations. However, they have operated at relatively high capacity

utilization rates during the review period: the Australian producer’s rate was *** percent in 2005 and ***

percent in interim 2006; the French industry’s rate was *** percent in 2005 and *** percent in interim

2006; and the Japanese industry’s rate was *** percent in 2005 and *** percent in interim 2006.785 Their

combined excess capacity in 2005 was *** short tons.786

While these countries do possess some excess capacity and, in the case of France, saw some

decline in capacity utilization during the review period, we do not find a likelihood that they will ship

significant volumes of subject product to the United States if the orders are revoked. Each of the subject

countries has exported corrosion-resistant steel during the review period, but their focus has been

predominantly on their home and regional markets. In 2005, the Australian producer’s shipments to its

home market were *** percent of its production, up from *** percent in 2000.787 Only *** percent of

Australia’s exports were to destinations outside Asia.788 In 2005, French producers shipped *** percent

of their production to their home market and for internal consumption; during the review period as a

whole, less than *** percent of their shipments was exported outside the European Union.789 Likewise,

Japanese producers’ home market shipments were *** percent of total shipments in 2005, and most of

their exports were to China and the rest of Asia. Exports outside the Asian region had decreased to less

than *** percent of Japan’s total shipments by the end of the review period.790 These trends contrast to

what was observed during the original period of investigation when the European Community was

composed of 12 Member States compared to the EU’s 25 Member States in 2006. Moreover, demand in

Asia, and particularly in China, was not as robust as compared to now.

Producers in the three cumulated countries have not shown a strong interest in the North

American market during the review period and, for various reasons discussed below, it does not appear

likely that this would change in the reasonably foreseeable future.
 791 CR/PR at Table CORE-IV-12.

 792 CR at CORE-IV-21, PR at CORE-IV-10.

 793 CR at CORE-IV-21, PR at CORE-IV-10, n.21.

 794 CR at CORE-IV-16, PR at CORE-IV-9, n.8.

 795 CR at CORE-IV-21, PR at CORE-IV-10, n.22.

 796 CR at CORE-IV-21, PR at CORE-IV-10, CR/PR at Table CORE-IV-15.

 797 CR/PR at Table CORE-IV-12.

 798 Tr. at 412-413 (Furuta).

 799 CR/PR at Tables CORE-IV-29, IV-47.

 800 CR/PR at Table CORE-I-12.

128

Australia was at the time of the original investigation and remains now the smallest of all the

subject country producers, with a total capacity of only *** short tons.791 BlueScope, the sole Australian

producer, is focused on its home and nearby Asian markets. In addition to *** exports to the United

States during the review period, BlueScope had *** exports to Canada and *** shipments to Mexico,

even when such shipments were not subject to any trade remedies.792 The *** majority of BlueScope’s

production is for non-automotive applications. Its business strategy has been to use much of its

production internally, and through affiliates, to manufacture pre-fabricated construction components for

its home market and other markets outside the United States. As a result of the subject orders, BlueScope

***.793 Since the original investigation, BlueScope has also set up local corrosion-resistant production

facilities in multiple Asian countries to serve regional construction markets.794

We note that, in April 2004, BlueScope acquired Butler Manufacturing Company, a market

leader for pre-engineered steel building systems, with operations in the United States and China.795 The

record indicates, however, that Butler’s U.S. operations reported *** purchases of corrosion-resistant

steel from Australia during the review period; moreover, Butler also operates as an end user for the

construction sector in China, a market that historically has been served by, and is a more likely market

for, the Australian producer. BlueScope reported only minuscule exports of subject product to the United

States since the acquisition of Butler (*** short tons in 2005). Australia does face significant tariffs on

corrosion-resistant steel in Argentina and South Africa, but the South African order is only against

painted corrosion-resistant steel, which is not a significant product for BlueScope, and Argentina has

never been an important market for the Australian product.796 

Domestic producers argue that, as China’s capacity to produce corrosion-resistant steel increases,

Australia’s exports to China will be displaced, making the United States a more attractive market for

BlueScope than it has been in recent years. The record does not support this assertion. Australia’s

exports to China already showed a decline from 2003 through 2005, as its home market shipments and

shipments to other non-U.S. export markets grew, resulting in no diversion outside the region.797

Moreover, the Australian producer supplies mostly corrosion-resistant steel for building construction to

China and other Asian markets that is of higher quality than what the Asian producers currently produce

or likely will be able to produce in the reasonably foreseeable future.798

The industries in France and Japan likewise showed an orientation to their home and regional

markets during the review period which we do not find likely to change if the orders are revoked.799

Producers in each country that account for the majority of corrosion-resistant steel production are

affiliated with important U.S. producers of corrosion-resistant steel.

The Arcelor-Mittal merger, which is scheduled to close in the first half of 2007, will establish an

affiliation between Mittal USA, which accounts for *** percent of U.S. production,800 and Arcelor
 801 CR/PR at Table CORE-IV-26.

 802 CR/PR at Table CORE-I-1.

 803 French Respondents’ Posthearing Brief at 1-3, Exhibits 3, 6.

 804 CR at CORE-IV-41, PR at CORE-IV-17.

 805 CR at CORE-IV-35, PR at CORE-IV-15, n.52, CR/PR at Table CORE-IV-2.

 806 Duferco’s Questionnaire Response.

 807 CR/PR at Tables CORE-IV-68, IV-69, as revised by Memorandum INV-DD-162 (Dec. 5, 2006).

 808 CR/PR at Tables CORE-I-12, IV-44. Japanese producer Nippon, representing almost *** percent of Japanese

production in 2005, has ***. Japanese Respondents’ Prehearing Brief at 67. 

 809 CR/PR at Tables CORE-III-10, CORE-IV-45.

 810 CR at CORE-IV-67, PR at CORE-IV-24.

129

France, which accounts for *** percent of French production801 and most of the French industry’s exports

of corrosion-resistant steel to the United States during the review period. We find that the French

industry, which has essentially been absent from the U.S. market at least since the first review period,802

has even less incentive to resume shipments to the United States, given the merger. Arcelor-Mittal’s

stated strategy is to acquire corrosion-resistant facilities that can serve customers regionally and locally

and, in the case of Mittal USA, is committed to serving the U.S. market from its U.S. producer.803 This

strategy is consistent with the fact that Arcelor-Mittal will be the world’s largest steelmaker with

production facilities located throughout the world. We thus find it unlikely that the U.S. market would be

served with subject imports from France.

Arcelor France’s exports to Canada declined even after the Canadian orders on corrosion-steel

were lifted during the review period.804 In addition, none of Arcelor France’s affiliates in Belgium, Spain,

Luxembourg, or Italy have shipped significant quantities of corrosion-resistant steel to the United States,

despite the absence of any orders against these countries, including the periods preceding and following

the U.S. safeguard action on steel, thus suggesting that Arcelor has made a decision not to rationalize

production among manufacturing plants in different countries and the United States.805 Duferco, the other

French producer, sold corrosion-resistant steel *** within the EU during the period.806

With respect to relative market prices, on balance we do not find prices for corrosion-resistant

steel in France and other EU markets to be sufficiently below U.S. prices so as to create an incentive to

shift sales to the U.S. market.807 There is no evidence that U.S. prices are likely to exceed European

prices over a sustained period in the reasonably foreseeable future. Thus price would not be a sufficient

incentive for the French producers to begin diverting exports to the United States if the orders were

revoked.

Similar to the industry in France, Japanese producers representing *** percent of Japanese

production are related to U.S. producers of corrosion-resistant steel accounting for at least *** percent of

U.S. production, not including I/N Kote’s toll production for Mittal, which is included in Mittal’s data.808

The Japanese industry’s entire excess capacity in 2005, of *** short tons, is well below their U.S.

affiliates’ shipments in 2005 of *** short tons ***.809 After the orders were imposed, Japanese producers

began to supply transplant Japanese automakers in the United States with corrosion-resistant steel made

by the Japanese producers’ U.S. affiliates, who have been successful in meeting the automakers’

qualification requirements. The minimal quantities of corrosion-resistant steel exported from Japan to the

United States during the review period consisted of certain specialty, high-strength automotive grades,

such as 780 MPa and 980 MPa,810 that were not available from U.S. producers, and of product needed

when supply was tight. At present, Japanese producer Nippon, which represented almost *** percent of
 811 CR/PR at Table CORE-IV-44.

 812 CR at CORE-IV-67, PR at CORE-IV-24.

 813 Nucor/SDI’s Posthearing Brief, Answers to Commissioners’ Questions at 30-32.

 814 See generally CR at CORE IV-59, PR at CORE-IV-21-22. Chairman Pearson and Vice Chairman Aranoff

note that they did not participate in the first reviews. Moreover, the period examined in the first review (1996-2000)

included some of the period of the Asian financial crisis when Japanese producers faced limited demand in their

home market or other Asian markets. USITC Pub. 3364 at CORROSION-II-4-5.

 815 Japanese Respondents’ Prehearing Brief at 26-32.

 816 CR/PR at Table CORE-IV-47.

 817 CR/PR at Table CORE-IV-47.

 818 Japanese Respondents’ Posthearing Brief at 1-2.

 819 Tr. at 412-413 (Furuta).

 820 Consumption of coated steel sheet in Asia is projected to increase from *** short tons in 2006, to *** short

tons in 2007, to *** short tons in 2008. CR/PR at Table CORE-IV-67.

130

Japanese production in 2005,811 is providing ***, and has ***.812 These commitments *** further support

our conclusion that Japanese producers are committed to serving the U.S. market through U.S. production

and would not seek new export customers in the event of revocation.

Domestic producers argue that the Commission should not take into account the affiliated

Japanese producers in the United States because it rejected similar arguments in the first review.813

However, the conditions of competition in the United States and around the globe have changed

significantly and likely will impact the behavior of Japanese producers and their U.S. affiliates going

forward differently than they did in the past.814

 The record shows that, during the review period, the Japanese producers’ shipments to their home

market increased as the Japanese economy strengthened and corrosion-resistant steel demand within

Japan is expected to remain robust for the reasonably foreseeable future. During the review period

automotive suppliers in Japan reported shortages due to Japanese corrosion-resistant producers’ inability

to increase their production levels.815 

Japanese producers have been successful, since the orders were imposed, in developing new

markets in China and other Asian countries. In 2005, Japan’s export shipments represented *** percent

of their total shipments and their export shipments to China and Asia accounted for *** percent of their

total shipments.816 Thus, only *** percent of Japanese shipments left the Asian region in 2005, down

from *** percent in 2000.817 More than *** percent of their corrosion-resistant steel exports to China

consist of electro-galvanized corrosion-resistant steel for use in the manufacture of appliances. Electrogalvanized steel is not made in China and would thus not be displaced by any increase in Chinese

capacity to produce hot-dip corrosion-resistant steel.818 The other major use for Japanese exports to China

is to supply Japanese transplant automakers in China with Japanese corrosion-resistant steel of a quality

that Chinese producers have not yet attained and are not expected to be able to make in the reasonably

foreseeable future.819 Consumption in Japan’s Asian markets as a whole is projected to remain strong for

the reasonably foreseeable future.820

The growth in global demand conditions, particularly in the Japanese home market and regional

market, will make it less likely that the Japanese producers will export subject product to the United

States in any significant quantities. Rather, the strong global demand will mean that the affiliated

Japanese producers in the United States will need to supply U.S. demand from their joint venture U.S.

production facilities. Four of the Japanese producers are involved with corrosion-resistant steel
 821 JFE Steel owns 50 percent of California Steel Industries. Nippon Steel owns 50 percent of I/N Kote (also

related to Nittetsu). Kobe Steel owns 50 percent of Pro-Tec. Nisshin owns *** percent of Wheeling-Nisshin. 

CR/PR at Table CORE-1-12, CR at CORE-IV-59, PR at CORE-IV-21-22; Japanese Respondents’ Prehearing Brief

at 65-68.

 822 CR/PR at Tables CORE-I-12, IV-44.

 823 Japanese Respondents’ Prehearing Brief at 65, 67.

 824 Japanese Respondents’ Prehearing Brief at 65-68.

 825 CR at CORE-IV-67, PR at CORE-IV-25, n.126.

 826 Negotiated transaction prices for hot-dip galvanized steel show Japanese home market prices generally higher

than U.S. prices in 2005 and lower in 2006. Negotiated transaction prices for electro-galvanized steel show Japanese

home market prices higher than U.S. prices from February through June of 2005, generally lower from July 2005

through September 2006, and higher in October and November 2006. CR/PR at Tables CORE-IV-68, CORE-IV-69,

as revised by Memorandum INV-DD-162 (Dec. 5, 2006). *** monthly prices for galvanized steel show U.S. prices

generally higher than Japanese export prices in 2002, 2004, and 2006, and generally lower during the rest of the

review period. CR/PR at Table CORE-IV-70, as revised by Memorandum INV-DD-162 (Dec. 5, 2006).

 827 Japanese Respondents’ Posthearing Brief at 4-9.

131

production in the United States and have been for more than a decade.821 These four joint ventures

account for at least *** percent of U.S. production.822 Moreover, Nippon Steel *** and recently

announced that it intends to initiate talks with Mittal Steel on doubling the size of its U.S. affiliate, I/N

Kote.823 The long-term investments of the Japanese producers in U.S. capacity824 and Nippon’s ***

appear consistent with the general trend toward supplying markets from regional production facilities. 

These conditions, therefore, limit the likelihood that Japanese producers would significantly increase their

exports to the United States with revocation of the order. 

Japanese exports to Canada have remained minimal, even after the Canadian antidumping duty

order on corrosion-resistant steel from Japan was lifted in 2004. Japan’s exports to Mexico fluctuated

over the period, and were *** short tons in 2005. While this represents a discernible interest in the

Mexican market, the record suggests that Japanese producers are not positioned to expand their sales to

Mexico or the United States. ***.825 Accordingly, we do not find this level of exports indicative of a

likely increase in exports by the Japanese producers to the U.S. market if the order is revoked. Further,

*** provides further corroboration of the strong demand for Japanese exports in several markets,

including the Japanese home market. Such conditions do not provide strong incentives for Japanese

producers to establish new U.S. customers.

Nor is price an incentive for Japanese producers to resume shipments to the U.S. market upon

revocation of the order. Spot prices in Asia for certain types of corrosion-resistant steel may have been

lower than U.S. prices during certain portions of the review period, but not in a significant, sustained

fashion.826 Moreover, between *** and *** percent of the Japanese producers’ exports during the review

period were under long-term contracts, whose prices were equivalent to U.S. prices, or not sufficiently

below U.S. prices so as to serve as an incentive for Japanese producers to abandon existing customers,

pay the added transportation and logistical costs, and divert exports to the U.S. market.827 These contracts

are also evidence of the Japanese producers’ long-term relationships with their regional customers and

track record of serving them.

For all the foregoing reasons, we do not find that the volume of cumulated subject imports from

Australia, France, and Japan likely would be significant if the orders are revoked.
 828 USITC Pub. 3364 at 54.

 829 USITC Pub. 3364 at 54.

 830 Data on sales to, and purchases by, manufacturers and end users, showed that in the original investigations

subject imports from Australia, France, and Japan mostly oversold domestic prices (overselling in *** comparisons

for sales data, *** comparisons for purchase price data). Data on sales to distributors and service centers indicated

that subject imports mostly undersold domestic prices (underselling for *** comparison). Purchase price data

reported by distributors and service centers generally showed overselling by subject imports (overselling for ***

comparisons). Original Confidential Staff Report at Tables 110-113.

 831 CR/PR at Table CORE-V-17.

 832 CR at CORE-II-21-22, PR at CORE-II-15.

 833 CR at CORE-V-35, PR at CORE-V-16, CR/PR at Figures CORE-V-4 to V-11.

 834 CR/PR at Tables CORE-IV-68 to IV-70, CORE-V-1 to V-14; Joint Respondents’ Prehearing Brief at 54-57.

 835 CR at CORE-V-35, PR at CORE-V-16, n.22.

 836 Letters to the Commission from U.S. Steel (Nov. 16, 2006); Mittal Steel USA (Nov. 22, 2006); AK Steel (Dec.

5, 2006); Auto Producers’ Posthearing Brief at Exhibit 1. *** projects an increase per ton from *** in 2006 to ***

(continued...)

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b. Likely Price Effects

We applied the legal standards discussed in section III above.

In the original investigations, the Commission found that price was an important factor for

purchasers. It also found price suppression and/or depression by the cumulated subject countries based

on import prices that were falling at a greater rate than domestic prices, together with increased import

volumes and confirmed lost sales and lost revenue allegations.828

In the first reviews, the Commission found that the increased sales of cumulated subject imports

would likely be achieved by aggressive pricing, which would result in significant effects on domestic

prices. It noted that while contracts provide some measure of insulation from spot market price

fluctuations, prices in the spot market could affect prices in the domestic industry’s contract business.829

In the original investigations, subject imports from the three countries cumulated here – Australia,

France and Japan – showed mixed underselling and overselling.830 There were no price comparisons for

imports from Australia and France in these reviews, nor in the first reviews. The Commission’s pricing

data show underselling by Japanese product in 5 out of 20 comparisons and overselling in the remaining

15 comparisons during the current review period.831

We continue to find in these reviews that domestically produced and imported corrosion-resistant

steel is generally substitutable, provided suppliers meet qualification requirements, and that price is an

important factor in purchasing decisions.832 However, we find that the price effects from the cumulated

subject imports from Australia, France, and Japan likely will not be significant both based on our finding

that the volume of these cumulated subject imports likely will not be significant and because we find no

incentive for producers in these countries to price aggressively any volumes they do sell or offer to sell in

the U.S. market.

U.S. prices generally strengthened during the review period. After showing relatively little

change from 2000 through 2003, U.S. prices rose across all product categories, except product 8, from

2004 through 2006, and were substantially higher at the end of the period than at the beginning.833

Indeed, many market participants described prices as reaching historical highs not seen in decades during

the review period.834 While prices for some products had fallen from their period highs by mid-2006, a

number of U.S. producers announced additional price increases in the middle of 2006.835 The record

indicates that a number of contracts recently negotiated for shipments in the second half of 2006 and 2007

are at higher prices for domestic producers than in previous periods.836
 836 (...continued)

in 2007. *** shows a price increase from *** in 2006 to *** in 2007.

 837 CR/PR at CORE-V-1-2.

 838 CR at CORE-III-18, III-23, V-3-4, PR at CORE-III-14, V-3.

 839 CR at CORE-III-23, PR at CORE-III-14, CR/PR at Table CORE-III-9.

 840 Tr. at 235-236 (Scherrbaum), 248 (Goodish).

 841 Tr. at 235-236 (Scherrbaum), 248 (Goodish).

 842 Auto Producers’ Prehearing Brief at 27-31.

 843 CR/PR at Tables CORE-I-12, III-10; Questionnaire Responses of U.S. Steel, Mittal USA, AK Steel and ProTec.

 844 Letters to the Commission from U.S. Steel (Nov. 16, 2006); Mittal Steel USA (Nov. 22, 2006); AK Steel

(Dec. 5, 2006); Auto Producers’ Posthearing Brief at Exhibit 1. *** projects an increase per ton from *** in 2006

to *** in 2007. *** shows a price increase from *** in 2006 to *** in 2007. ***.

 845 Tr. at 421-422 (Mohatarem), 455-456 (Cover).

133

There are several reasons why prices rose and remained high during the period of review. First,

this period was marked by rapidly growing demand, both in the United States and globally, for corrosionresistant steel.837 Second, price increases were driven by substantial increases in raw material and energy

costs during the period.838 Finally, because of the restructuring of the domestic industry that took place

during the period, the domestic industry had somewhat lower fixed costs and more flexibility than it did

in the past to manage output in order to maintain prices in the face of rising costs. Consequently, the

domestic industry’s ratio of COGS to net sales fluctuated but declined overall during the review period,

indicating that prices rose more quickly than costs and the domestic industry has not experienced a costprice squeeze.839

The domestic producers correctly point out that, although prices generally rose in the second half

of the review period, price increases for contract sales (primarily to auto makers and also to some

appliance manufacturers) lagged well behind price increases for spot market sales.840 As noted above, the

historical practice in this industry has been for corrosion-resistant steel producers and their major auto and

appliance customers to enter into long-term contracts that fix the price of steel over several years. A

number of such contracts were in effect when prices in the spot market began their dramatic climb in

2004, locking the domestic producers into selling steel at prices that were increasingly unprofitable

compared to what they could have earned in the spot market.841 Domestic producers reacted to this

situation by declining to sell automakers volumes above those required by the contracts at contract prices,

a significant change from past practice.842 Nevertheless, the record clearly demonstrates that the domestic

producers who focused most heavily on contract sales with the auto industry fared less well than their

competitors who sold more heavily in the spot market during 2004 and 2005.843 By 2006, however, many

of these long-term contracts came up for renegotiation. The record indicates that domestic producers

have managed to achieve *** price increases in contracts for shipments in the second half of 2006 and in

2007, at levels that they concede are likely to be ***.844

During these reviews, the auto producers argued that, even though they prefer to buy corrosionresistant steel from North American suppliers in order to satisfy their just-in-time inventory requirements,

the availability of subject imports in the event of revocation of the orders would give them leverage to

negotiate more favorable prices.845 Although domestic producers urge us to treat this argument as an

admission against interest by the auto producers, we decline to do so with respect to subject imports from

Australia, France, and Japan, because the record does not support the auto producers’ assertion. We have

already found that producers in these cumulated subject countries have neither the capacity nor the

incentive to ship significant quantities of the subject product to the United States in the event of

revocation. Lacking a need or incentive to move substantial volumes into the U.S. market, subject
 846 The SAA states that in assessing whether the domestic industry is vulnerable to injury if the order is revoked,

the Commission “considers, in addition to imports, other factors that may be contributing to overall injury. While

these factors, in some cases, may account for the injury to the domestic industry, they may also demonstrate that an

industry is facing difficulties from a variety of sources and is vulnerable to dumped or subsidized imports.” SAA at

885.

 847 USITC Pub. 3364 at 55.

 848 USITC Pub. 3364 at 55-57.

 849 We find that the domestic industry producing corrosion-resistant steel did benefit to some degree from the

orders as they allowed U.S. producers time to undergo significant restructuring and rationalization. This

restructuring, along with the shedding of the significant legacy costs, has created a more efficient and cost effective

industry.

 850 The Pension Benefit Guaranty Corporation (“PBGC”), a federally created corporation designed to insure

private firm pensions, has indicated that primary metal manufacturers have received $11.2 billion in pension relief

through 2005. Four of the ten largest firms presenting claims to the PBGC were steel manufacturers, namely

Bethlehem, LTV, National and Weirton. These firms received combined pension relief of over $7.5 billion. The

assets of Bethlehem, LTV and Weirton were acquired by ISG, which then merged with Mittal. The assets of

National were acquired by U.S. Steel. Joint Respondents’ Prehearing Brief at 5. 

134

producers in Australia, France, and Japan lack any incentive to price aggressively for such limited sales as

they may make or offer to make after revocation. Given that the dramatic rise in prices in 2004 and 2005,

and continuing into 2006, is a global phenomenon, subject producers have no incentive to partner with

U.S. auto producers in an attempt to drive down prices in the U.S. market. 

For the foregoing reasons, we do not find that the cumulated subject imports from Australia,

France, and Japan will likely have significant adverse price effects if the orders are revoked. 

c. Likely Impact

We applied the legal standards discussed in section III above. As instructed by the statute, we

have also considered the extent to which any improvement in the state of the domestic industry is related

to the antidumping duty orders and countervailing duty orders at issue and whether the industry is

vulnerable to material injury if the orders are revoked.846

In the original investigations, the Commission found that the increased volume of lower priced

subject imports and their significant market share depressed prices and caused the U.S. industry to suffer

lost market share, reduced capacity utilization, and growing financial losses despite increasing apparent

consumption. The industry’s capital expenditures and research and development expenses also declined,

especially during the latter part of the period examined.847

In the first reviews, the Commission found that the orders had a positive effect on the domestic

industry’s performance, its operating margin was higher at the beginning of the review period than during

the original investigations, and its capital expenditures and research and development expenses had

increased. Nevertheless, it found the industry vulnerable, based on declines in operating income,

operating margins, capacity utilization levels, and unit sales values. It found that the likely significant

volumes of subject imports upon revocation would likely undersell the domestic product and suppress or

depress U.S. prices, cause the domestic industry to lose market share and have a significant adverse

impact on the domestic industry.848

In these second reviews, we do not find the domestic industry to be vulnerable. The

consolidations and restructuring that occurred during the review period have resulted in an industry that is

stronger and healthier than in previous periods considered.849 The industry’s improved condition is

evident in a number of its financial and performance indicators. During the process of consolidation and

restructuring, domestic producers renegotiated labor contracts, shed more than $7.5 billion in legacy

costs,850 reduced their fixed costs, and increased their productivity. Fixed costs, or “other factory costs,”
 851 CR/PR at Table CORE-III-9.

 852 CR/PR at Table C-7.

 853 CR/PR at Table CORE III-6.

 854 CR/PR at Table CORE III-12. 

 855 CR/PR at Table CORE III-25. 

 856 We also note that the business plans submitted by domestic producers do not contradict these positive findings. 

See Mittal USA’s Posthearing Brief, Answers to Commissioner Okun’s Questions at Exhibit 6; Nucor’s September

21, 2006 Submission; Pro-Tec’s Questionnaire Response at Question I-10 Attachment; Revisions to SDI’s

Questionnaire Response (Sept. 7, 2006); Severstal’s Questionnaire Response at Attachment 1; U.S. Steel’s

September 29, 2006 Submission; USS-POSCO’s Questionnaire Response at Exhibit I-10. Indeed, several of the

business plans detail ***.

 857 CR/PR at Table CORE-III-3.

 858 CR at CORE-III-5-6, PR at CORE-III-4-5. Domestic producers have argued that the domestic industry is

vulnerable because it cannot cover its costs of capital, and therefore cannot attract investment. Nucor/SDI’s

Prehearing Brief at 2, 7. To the contrary, the significant investments by the domestic industry in expanding its hotdip galvanized capacity and the entry of SeverCorr into the domestic industry indicate that the domestic industry has

successfully attracted and implemented substantial investments over the review period. With respect to the

SeverCorr investment alone, the domestic industry attracted $220 million in equity investment and was able to

finance $625 million in debt and to obtain $36.5 million in government grants. CR at CORE-III-5-6, PR at COREIII-4-5.

 859 While Mittal has idled two of its 10 blast furnaces during the period, and AK Steel and Mittal idled their

jointly owned electrogalvanizing facility in Cleveland, this is not evidence of a vulnerable industry. CR at COREIII-7, PR at CORE-III-5, CR/PR at Table CORE-III-1. Rather, the industry has announced plans to expand capacity

by more than 1.9 million tons in order to serve sectors of the market that are growing such as automotive demand for

galvanneal, whereas Mittal has idled facilities, such as its joint venture with AK Steel, because demand for electrogalvanized steel, which is produced at that facility, is declining. Mittal USA’s Posthearing Brief, Answers to

Commissioner Okun’s Questions at 7-8.

 860 CR/PR at Table CORE-I-1.

 861 CR/PR at Table C-7.

135

as a ratio to net sales, decreased from 41.4 percent in 2000 to 28.0 percent in 2005.851 Productivity

increased by 66.1 percent over the period.852 Inventories fell as a ratio of production and shipments. 

Inventories were 2.1 million short tons in 2000 and 1.7 million tons in 2005.853 Capital expenditures, at

$428 million in 2005, were $133 million higher than in 2000. Research and development expenditures

approximately doubled over the period.854 Return on investment, which was negative early in the review

period, improved to 16.6 percent in 2004, and was 7.0 percent in 2005.855 856

While the industry’s overall capacity level remained relatively constant over the period, the

industry was able to increase its capacity to produce hot-dip corrosion-resistant steel, in response to

growing demand, and shed some capacity in the less efficient electrogalvanized sector.857 In addition, the

industry invested in new facilities during the period and, as described above in the section on Conditions

of Competition, plans to add 1.9 million net tons of corrosion-resistant capacity by 2008.858 These

additions to capacity reflect both new investment by existing producers and investment by new entrants to

the U.S. market.859 The industry’s U.S. market share, by volume, was in the range of 87-93 percent

during the review period and was higher than during the original period of investigation, when it ranged

from 83-86 percent.860

Whereas from 2000 through 2003, the industry registered negative operating margins, or was

barely breaking even, in 2004 its operating margin rose to 10.8 percent and has remained positive, at 4.9

percent in 2005 and 5.2 percent in 2006.861 The industry’s higher profitability from 2004 through the first

half of 2006 can be attributed in large part to the restructuring by many U.S. producers that permitted
 862 CR/PR at Table CORE-III-10, n.3. A notable exception to this trend was *** which did not undergo

restructuring during the period. 

 863 Chairman Pearson finds that the domestic industry has received significant financial benefits, in the form of

pension relief, renegotiated labor contracts, and consolidations, that will continue to benefit it into the reasonably

foreseeable future. He finds that four steel manufacturers purchased by Mittal USA, the largest domestic producer,

reportedly received combined pension relief of over $7.5 billion. Most of the domestic producers have renegotiated

their labor agreements. He finds that the domestic industry has fewer, larger producers that are better able to control

and streamline their production of corrosion-resistant steel due to improved economies of scale. He finds that these

conditions have improved the negotiating position of the domestic industry relative to their purchasers. Joint

Respondents’ Prehearing Brief at 2-8. Chairman Pearson finds that these are relevant economic factors to these

reviews that may not be fully reflected in the financial performance data that the Commission considers in these

reviews under the pertinent statutory provision, 19 U.S.C. § 1675a(4).

 864 *** projects an increase per ton from *** in 2006 to *** in 2007. *** shows a price increase from *** in 2006

to *** in 2007. Letters to the Commission from U.S. Steel (Nov. 16, 2006); AK Steel (Dec. 5, 2006); see also Letter

to the Commission from Mittal Steel USA (Nov. 22, 2006); Auto Producers’ Posthearing Brief at Exhibit 1. ***.

 865 U.S. Steel’s Prehearing Brief at 73-74.

 866 Nucor/SDI’s Posthearing Brief at 1.

 867 Nucor and SDI argue that the domestic industry is more vulnerable now than it was in the prior reviews. 

Among other things, they observe that the industry’s operating margin over the entire period of review *** in the

prior reviews, as compared to *** in these reviews. Nucor/SDI’s Prehearing Brief at 1. 

Their arguments, however, do not take into account the significant reorganization and consolidation that has

taken place by the domestic industry that we discuss in text in this section, nor the downward trend in operating

margins in the prior reviews. As Nucor recognizes, the industry’s operating margin ***, and further *** in the first

three months of 2000. Nucor/SDI’s Prehearing Brief at 30. 

In contrast, in these reviews, following the onset of the restructuring and consolidation that took place in the

industry discussed in the text and in our Conditions of Competition section, the domestic industry’s operating margin

went from negative 1.6 percent in 2002, and 0.7 percent in 2003, to 10.8 percent in 2004, and 4.9 percent in 2005,

even as total import market share increased. CR/PR at Table CORE-I-1. Profitability and productivity increased

from 2002 to 2005, and there has recently been significant investment in production capacity. Although Nucor and

SDI argue that the domestic industry is fragmented and that its capacity utilization decreased over the review period

(Nucor/SDI’s Prehearing Brief at 8), as discussed in Conditions of Competition, we find that the domestic industry

has recently consolidated, and that lower capacity utilization decisions by the domestic industry reflect greater

flexibility in production decisions rather than vulnerability. 

136

them to terminate pension and healthcare liabilities and secure less costly labor contracts.862 863 In part as

a result of these changes, starting in 2004, the industry was able to pass the additional costs of soaring raw

material and energy prices on to purchasers and earn solid profits. At the end of the period, major U.S.

suppliers to the auto industry were able to negotiate higher contract prices for a portion of their second

half 2006 and 2007 shipments, a positive sign of *** into the reasonably foreseeable future.864

 The domestic producers credit the orders with the improvement in the domestic industry’s

performance during the review period, as evidenced by its higher operating income and operating margin,

despite sharply rising raw material costs. They also note that the industry’s capital expenditures and

research and development expenses rose during the period.865 Nevertheless, they contend that the

domestic industry is vulnerable and describe its returns as “anemic.”866

We do not agree with domestic producers’ overall characterization of the state of the industry.867

We find that the significant restructuring has produced a changed industry. The industry’s reduction in

fixed costs allows producers to better match their production levels to their demand so as to avoid overproduction. In view of the many positive indicators described above, the major restructuring that

occurred during the review period, and the ability of the industry to make significant investments in new

facilities, we do not find that the industry currently is in a weakened state, as contemplated by the

vulnerability criterion of the statute.
 868 CR/PR at Table CORE-I-1.

 869 CR/PR at CORE-IV-4. These are official import statistics that have been adjusted to exclude non-subject

lacquered tin-plate. Canadian producers representing *** percent of Canadian capacity and production reported, in

line with these import figures, exports to the United States in 2005 of *** short tons. CR/PR at Table CORE-IV-20.

 870 CR/PR at CORE-IV-4, CR/PR at Table C-7.

 871 CR/PR at Tables CORE-IV-18, IV-20.

 872 CR/PR at Table CORE-IV-20.

 873 CR/PR at Table C-7.

137

Based on our finding that the domestic industry is not vulnerable, and moreover, that the volume

of the cumulated subject imports is not likely to be significant nor to have significant adverse price

effects, we do not find it likely that the cumulated subject imports will have a significant negative impact

on the domestic industry in terms of output, sales, market share, profits, productivity, return on

investments, utilization of capacity, cash flow, inventories, employment, wage growth, ability to raise

capital, investment, or the industry’s development and production efforts if the orders are revoked.

4. No Likelihood of Continuation or Recurrence of Material Injury Upon

Revocation of the Order on Subject Imports from Canada

a. Likely Volume

We applied the legal standards discussed in section III above.

During the original investigation, subject imports from Canada increased from 180,030 short tons

in 1990 to 451,082 short tons in 1992.868 During both review periods, subject imports from Canada did

not show a dramatic decrease from pre-order levels, but have remained in the U.S. market at relatively

consistent levels. Imports from Canada to the United States were 464,303 short tons in 2005.869 Canada’s

share of the U.S. market was 3.4 percent by volume in 1992, and has fluctuated during both review

periods between 1.6 percent and 2.5 percent of the U.S. market. Subject imports from Canada as a share

of U.S. production were 2.2 percent in 2005.870 Canada was the only subject country that was exempt

from Section 201 duties on corrosion-resistant steel during the review period.

The Canadian industry’s production capacity, at *** short tons in 2005, was higher than during

the original investigation period, at *** short tons in 1992, as was their production, at *** short tons in

2005, as compared to *** short tons in 1992. This increased capacity and production, however, did not

result in increased excess capacity. The industry’s capacity utilization was high, at *** percent at the end

of the period, and its excess capacity was only *** short tons in 2005.871

During the review period, the Canadian industry shipped between *** and *** percent of its total

shipments of corrosion-resistant steel to its home market, and most of the remainder to the U.S. market.872

Canadian exports have thus remained in the U.S. market despite the order at levels that have been

relatively consistent. During this time, U.S. prices rose and were significantly higher at the end of review

period than at the beginning, and the U.S. industry’s operating margin improved to 10.8 percent in 2004,

before declining somewhat to 4.9 percent in 2005 and 5.2 percent in interim 2006.873

The primary Canadian exporter to the United States during the review period was Dofasco, ***

percent of whose exports were to the automotive sector pursuant to long-term contracts. The automakers,

as discussed previously, regard the North American market as a unified market for production and

sourcing decisions. Moreover, any increases in imports from Canada during the period for the most part

did not displace U.S. production, or represent sales lost to Canadian product on the basis of price, but

rather, reflected increased U.S. demand, or demand that U.S. producers were unable to supply, either on a
 874 CR at CORE-IV-29, PR at CORE-IV-13.

 875 CR at J-26-27, PR at J-3; Canadian Respondents’ Prehearing Brief at Exhibit 1.

 876 CR at J-26-27, PR at J-3. Nucor/SDI argues that subject imports from Canada compete against the domestic

like product, and reject Canadian respondents’ arguments that whether corrosion-resistant steel is purchased from the

United States or from Canada is determined by where vehicles are produced and the longstanding supply contracts

and arrangements related to those vehicles, rather than by the existence or revocation of the antidumping duty order. 

Nucor/SDI’s Posthearing Brief at 11-13. The domestic industry has stated that Dofasco testified that it was in

competition with a U.S. supplier for an existing OEM account. Nucor/SDI’s Posthearing Brief at 12. 

We find, however, that the existence of the antidumping duty order does not seem to have been a factor in

whether U.S. or Canadian mills are chosen to supply corrosion-resistant steel to U.S. auto makers. The record

reflects several instances in which auto makers either switched from U.S. to Canadian mills or vice versa, due to

production location changes, and not due to the antidumping duty order. CR at J-26-27, PR at J-3. Subject imports

from Canada increased over the review period, apparently due to movements in vehicle production locations, ***,

notwithstanding the imposition of the order. CR at J-26-27, PR at J-3; Canadian Respondents’ Prehearing Brief at

Exhibit 1.

 877 CR/PR at Tables CORE-IV-20, C-7.

 878 German Respondents’ Posthearing Brief at 7; Japanese Respondents’ Posthearing Brief at 13; Tr. at 229-230

(Goodish), 258-259 (Goodish), 329-330 (Bates).

 879 Canadian Respondents’ Prehearing Brief at 24-28.

 880 CR at CORE-IV-29, PR at CORE-IV-13.

 881 Nucor/SDI argues that Stelco’s CEO has indicated that he has an interest in the U.S. market. Nucor/SDI’s

Posthearing Brief at 12. However, Stelco ***. CR at J-28, 37, 40, 43, PR at J-3-4.

 882 CR/PR at Table CORE-IV-17.

138

temporary or permanent basis. Dofasco reported that ***.874 We find that the information submitted by

Dofasco generally supports its contentions.875 Accordingly we find that at least *** of the nearly *** of

Dofasco’s exports to the United States from 2000 to 2005 occurred for the above stated reasons and not

because of price competition with the U.S. industry, and no record evidence suggests that the remaining

volumes entered based on price competition.876

The record does not indicate that imports from Canada would increase significantly above current

levels in the event of revocation. Capacity utilization, as noted, was high at the end of the period and

excess capacity is not at a significant level. Canadian producers’ end-of-period inventories were at ***

short tons in 2005, and inventories of Canadian product held by U.S. importers were only *** short

tons.877 This level of inventories would not be likely to contribute to a significant increase in imports,

particularly since, as noted previously, corrosion-resistant steel inventories typically represent supply that

has been made to order and already committed to a customer.878

Canada is a net importer of corrosion-resistant steel, not only from the United States, but

globally. Production and demand in the Canadian automotive and non-residential construction sectors are

forecast to remain strong through 2008,879 and thus to continue as the major outlet for Canadian

corrosion-resistant steel production. We find credible Dofasco’s prediction of a ***, based on Toyota’s

opening of a new factory in Ontario, near Dofasco’s mill.880 Stelco, which represented *** percent of

Canadian production in 2005, was focused *** on its home market during the review period,881 as was

Sorevco, which represented *** percent of Canadian production.882 The order has not had a material

effect on subject import volumes from Canada, which have remained at relatively consistent levels since

1992. The pattern of the Canadian producers’ shipments during the review period and forecasts for

continued strong Canadian demand thus do not indicate that shipments from Canada will grow

significantly upon revocation.

Price also would not provide an incentive for Canadian producers to shift shipments from their

home market to the United States in the event of revocation. During the period, Canadian prices were

comparable to U.S. prices, as would be expected in these markets showing significant connections in the
 883 CR/PR at Table CORE-IV-68, as revised by Memorandum INV-DD-162 (Dec. 5, 2006).

 884 In the original investigation, subject imports from Canada *** the domestic product in *** of *** comparisons

of sales to manufacturers and end users, in *** of *** comparisons of sales to distributors and service centers, in ***

of *** purchaser price comparisons reported by manufacturers and end users, and in *** of *** purchaser price

comparisons reported by distributors and service centers. Original Confidential Staff Report at Tables 110-113.

 885 CR/PR at Table CORE-V-17.

 886 CR at CORE-II-21-22, PR at CORE-II-14-15.

 887 CR/PR at Table CORE-I-1.

 888 CR at CORE-V-35, PR at CORE-V-16, CR/PR at Figures CORE-V-4 to V-11. We note that product 8

involved relatively small U.S. volumes.

 889 CR/PR at Table CORE-III-9.

 890 CR/PR at Table CORE-III-9.

139

automotive sector. Negotiated transaction prices for hot-dip galvanized steel show U.S. prices to be

higher than Canadian prices in the first half of 2005, lower than Canadian prices from the second half of

2005 through May of 2006, and higher than Canadian prices from June through November of 2006.883

Therefore, we do not find that the likely volume of subject imports from Canada would be

significant upon revocation. Canadian subject imports have remained in the U.S. market at consistent

levels that for the most part have not displaced U.S. sales. Based on the projected continued strength of

the Canadian market, Canadian producers’ limited excess capacity, and their long-term volume

commitments to a stable customer base that could not be readily diverted to supply new customers, we do

not find it likely that subject imports from Canada will increase significantly upon revocation.

b. Likely Price Effects

We applied the legal standards discussed in section III above.

In the original investigation period, as in the instant review period, there was mixed underselling

and overselling by subject imports from Canada.884 The pricing data collected by the Commission for the

current review period show underselling by Canadian product in 31 of 50 comparisons, and overselling in

the remaining 19 quarters.885

As stated above with respect to the cumulated subject imports from Australia, France, and Japan,

we continue to find in this review that domestically produced and imported corrosion-resistant steel is

generally substitutable, provided suppliers meet qualification requirements, and that price is an important

factor in purchasing decisions.886 However, we do not find subject imports from Canada are likely to

have significant negative price effects in the event of revocation, given our finding that the volume of

subject imports from Canada is not likely to increase significantly if the order is revoked.

During the review period, subject imports from Canada have maintained a steady presence in the

U.S. market at levels that were similar to the volume of subject imports from Canada in 1992, the last

year of the original period of investigation.887 At the same time, U.S. prices generally strengthened during

the review period. After showing relatively little change from 2000 through 2003, U.S. prices generally

rose across all product categories, except product 8, from 2004 through 2006, and were substantially

higher at the end of the period than at the beginning.888 While the price increases were largely driven by

sharply rising raw material and energy costs, U.S. producers reduced their fixed costs over the period.889

They were thus also able to manage output and maintain price levels as raw material and energy costs

soared. The domestic industry’s ratio of COGS to net sales fluctuated yet declined overall during the

review period.890 Moreover, as stated above, the record indicates that a number of contracts recently

negotiated for shipments in the second half of 2006 and 2007 are at higher prices for domestic producers
 891 Letters to the Commission from U.S. Steel (Nov. 16, 2006); Mittal Steel USA (Nov. 22, 2006); AK Steel (Dec.

5, 2006); Auto Producers’ Posthearing Brief at Exhibit 1.

 892 CR at CORE-IV-28-29, PR at CORE-IV-13.

 893 CR at J-26-27, PR at J-3.

 894 Derived from CR/PR at Table CORE-I-1.

 895 Derived from CR/PR at Table CORE-I-1.

140

than in previous periods.891 These contracts are all for sales to the automotive sector, to which ***

percent of sales by the major Canadian exporter, Dofasco, were directed during the review period.892

Moreover, the record does not indicate that increased imports from Canada will likely result in

significant sales lost by U.S. producers. As described above, the increase in imports from Canada since

2000 (from Dofasco) was not generally the result of price competition with U.S. producers. We see no

basis to conclude that revocation of the order on Canada will cause this situation to change to a significant

degree in the foreseeable future.893

Given the consistent level of Canadian product in the U.S. market during a time when U.S. prices

rose and were strong relative to rising costs, and our finding that the volume of subject imports from

Canada is not likely to increase significantly if the order is revoked, we do not find it likely that subject

imports from Canada will have significant adverse price effects upon revocation.

c. Likely Impact

We applied the legal standards discussed in section III above. As instructed by the statute, we

have also considered the extent to which any improvement in the state of the domestic industry is related

to the antidumping duty order at issue and whether the industry is vulnerable to material injury if the

order is revoked.

For the reasons already discussed, we do not find the domestic industry to be vulnerable. We

incorporate herein our entire finding on vulnerability from section VI.D.3.c above.

Based on our finding that the domestic industry is not vulnerable, and moreover, that the volume

of subject imports from Canada is not likely to increase significantly nor to have significant adverse price

effects, we do not find it likely that the subject imports from Canada will have a significant negative

impact on the domestic industry in terms of output, sales, market share, profits, productivity, return on

investments, utilization of capacity, cash flow, inventories, employment, wage growth, ability to raise

capital, investment, or the industry’s development and production efforts if the order is revoked. 

5. Likelihood of Continuation or Recurrence of Material Injury Upon

Revocation of the Orders on Cumulated Subject Imports from Germany

and Korea

a. Likely Volume

We applied the legal standards discussed in section III above.

By the end of the original period of investigation, cumulated subject imports from Korea and

Germany had risen to 382,705 short tons and had captured 2.8 percent of the U.S. market.894 By the end

of the current review period, cumulated subject imports from Korea and Germany had reached their

highest level of any prior period, at 406,799 short tons, and represented 1.8 percent of apparent U.S.

consumption and 1.9 percent of U.S. production.895 

Korean and German producers have substantially increased both their production capacity and

their production of corrosion-resistant steel since the original investigations. Subject producers from
 896 CR/PR at Tables CORE-IV-36, IV-54.

 897 CR/PR at Tables CORE-IV-36, IV-54. 

 898 CR/PR at Tables CORE IV-36, IV-54. Cumulated excess capacity in interim (January-June) 2006 was

approximately *** tons. This represents excess capacity of Korea alone as German producers reported no excess

capacity in interim 2006. As discussed above, given that the German industry reported excess capacity in every

other full- and partial-year period of the period of review, and substantial year-to-year fluctuations in capacity

utilization, we are hesitant to conclude that German producers will have no available capacity in the foreseeable

future based on the experience of a single partial year.

 899 CR/PR at Table CORE-IV-56.

 900 CR/PR at Table CORE-IV-38. German respondent interested parties argue that demand in their home market

and the EU is sufficiently strong that they would not have an incentive to ship product to the United States. They

point out that over 90 percent of their shipments are to the German market or other EU markets. German

Respondents’ Posthearing Brief at 3. We note below that prices for corrosion-resistant steel in EU markets have not

been sufficiently below U.S. prices so as to create a price incentive to shift sales to the U.S. market. However,

prices in certain Asian markets have typically been lower than U.S. prices, as has the “EU export” price. CR/PR at

Table CORE-IV-70, as revised by Memorandum INV-DD-162 (Dec. 5, 2006). Thus, there would appear to be some

price incentive for German producers to direct to the United States sales currently made to markets outside the EU. 

The record also reflects that exports from Germany to markets outside the European Union increased in 2005, much

of which was to the United States.

 901 The same is true over the interim periods, with combined exports to the United States growing from *** short

tons in interim 2005, to *** short tons, in interim 2006. CR/PR at Tables CORE-IV-38, IV-56. 

Korean producers attribute the increase in their U.S. exports during the review period to a short-term

request by Hyundai for POSCO to supply Hyundai’s new facility in Alabama. Even if this were correct, which is

not clear on the current record, several purchasers in the construction sector also reported significant increases in

purchases of Korean product in 2005, indicating that imports from Korea were more broadly based. Questionnaire

Responses of ***.

 902 Derived from CR at CORE-IV-54 and CORE-IV-81, PR at CORE-IV-20 and CORE-IV-29.

 903 Germany produced *** short tons of micro-alloy corrosion-resistant steel in 2005. German exports of microalloy corrosion-resistant steel to the United States ranged from *** percent of total German exports of micro-alloy

corrosion-resistant steel in 2000 to *** percent in interim 2006, and were *** short tons in 2005. CR/PR at Table

CORE-IV-43. Although Korea’s total exports of micro-alloy corrosion-resistant steel were *** than those of

(continued...)

141

Korea and Germany increased their cumulated capacity from *** short tons in 1992 to *** short tons in

2005.896 Further, subject producers from Korea and Germany, in the aggregate, increased their production

of corrosion-resistant steel from *** short tons in 1992 to *** tons in 2005.897 Korean and German

producers had combined excess capacity of *** short tons in 2005.898 This excess capacity is equivalent

to *** percent of apparent U.S. consumption in 2005.

The corrosion-resistant steel industries in Korea and Germany are export-oriented. Korea

exported 28.8 percent of its total shipments in 2005 to countries other than the United States, amounting

to 2.1 million short tons of corrosion-resistant steel. Korean producers exported nearly 900,000 short tons

outside their home and regional markets in 2005.899 Exports accounted for over *** percent of German

shipments during each year since 2000. Although most exports remained in Europe, *** percent of its

shipments in 2005 (over *** tons) were directed to overseas markets, including the United States.900

Subject producers in Korea and Germany have exhibited a strong interest in exporting to the

United States. On an aggregated basis, exports from Korea and Germany to the United States increased

from *** short tons in 2000 to *** short tons in 2005, an increase of *** percent.901 Along with their

increase in exports to the United States during the review period, Korean and German producers increased

their exports to Canada and Mexico substantially over the review period, from *** short tons in 2000 to

*** short tons in 2005.902 The producers have also exported a significant amount of their production of

non-subject micro-alloy corrosion-resistant steel to the United States.903
 903 (...continued)

Germany, *** short tons, *** percent of these exports were exported to the United States in 2005. CR/PR at Table

CORE-IV-61.

 904 CR/PR at Table CORE-IV-53.

 905 CR/PR at Table CORE-I-12.

 906 POSCO’s Questionnaire Response at 9 (exports to the United States of *** tons in 2005). USS-POSCO’s net

sales in 2005 were *** short tons. CR/PR at Table CORE-III-10.

 907 German Producers’ Questionnaire Responses at II-18a, II-18b.

 908 CR at CORE-IV-46, PR at CORE-IV-18, CR/PR at Table CORE-IV-35.

 909 CR at CORE-III-7, CORE-IV-24, n.28, PR at CORE-III-5, CORE-IV-12, n.28.

 910 Korean Respondents’ Posthearing Brief at 7-9.

 911 CR at CORE-V-10, PR at CORE-V-8, n.15.

 912 CR at OVERVIEW-17, PR at OVERVIEW-14, n. 42. We note that Commerce found that the Korean

government provides export subsidies to Korean corrosion-resistant steel producers in 5 of the 11 programs

investigated.

142

Although the Korean and German industries have demonstrated a strong interest in serving the

U.S. market, neither has a sufficient presence to supply the U.S. market from within the United States or

even North America. Korean producer POSCO has 50 percent ownership of U.S. producer USS-POSCO. 

While POSCO and its related Korean producer POCOS represent a substantial share of Korean

production (*** percent in 2005),904 USS-POSCO represented only *** percent of 2005 production in the

United States.905 Moreover, the presence of USS-POSCO has not stopped POSCO from shipping

appreciable quantities of subject product to the U.S. market.906 ThyssenKrupp, representing *** percent

of German production in 2005 and accounting for *** exports of subject corrosion-resistant steel to the

United States since 2000,907 does not have a U.S. production affiliate. Nor do German producers

Salzgitter and Corus, which together accounted for *** percent of German production in 2005. Arcelor

Germany, which will soon be affiliated with a U.S. producer (Mittal Steel USA), represented only ***

percent of German production in 2005.908

Thus, for Korea and Germany, the affiliations of their producers with U.S. producers represent

either a relatively small share of U.S. production (in the case of Korea) or a relatively small share of

foreign industry production (in the case of Germany). ThyssenKrupp Germany has taken some steps

toward establishing a production facility in North America, by seeking to purchase the assets of Dofasco

in Canada, to construct or acquire a facility in the United States, or both.909 As noted above, the record

does not indicate that it is more likely than not that, in the reasonably foreseeable future, ThyssenKrupp

will have such a U.S. or North American facility from which to serve its interest in the U.S. market. The

demonstrated interest of Korean and German producers in serving the U.S. market combined with a lack

of sufficient U.S. or North American production assets indicate that these producers are likely to deepen

their participation in the U.S. market through exports from Korea and Germany.

The increase is likely to occur in the several main end-use sectors for corrosion-resistant steel. A

significant portion of Korea’s exports and production is for the construction sector,910 which typically is

project-based and not supplied under long-term contracts.911 Thus, subject producers in Korea would be

likely to increase sales to the U.S. construction sector if the orders were revoked, in many cases without

being hampered by long-term supply commitments in other markets.912
 913 CR/PR at Table CORE-II-1 (U.S. shipments of subject imports from Korea to automotive end users

constituted *** percent of shipments of Korean product in 2005). The auto sector accounts for about *** percent of

Korea’s total shipments. CR/PR at Table CORE-IV-57.

 914 CR/PR at Tables CORE IV-4, IV-39. The automotive sector accounts for *** of German producers’ total

corrosion-resistant steel shipments. 

 915 CR/PR at Tables CORE-IV-68, CORE-IV-69, as revised by Memorandum INV-DD-162 (Dec. 5, 2006) (data

published by MEPS).

 916 CR/PR at Table CORE-IV-70, as revised by Memorandum INV-DD-162 (Dec. 5, 2006). 

 917 Negotiated transaction prices for hot-dip galvanized steel show German prices higher than U.S. prices from

January through September of 2005, lower from October 2005 through September 2006, and higher in October and

November 2006. CR/PR at Table CORE-IV-68, as revised by Memorandum INV-DD-162 (Dec. 5, 2006). 

Negotiated transaction prices for electro-galvanized steel show U.S. prices generally higher than German prices

throughout 2005 and 2006. CR/PR at Table CORE-IV-69, as revised by Memorandum INV-DD-162 (Dec. 5, 2006). 

*** monthly price data for galvanized steel from 2005 through November 2006 show a mixed pattern of whether

U.S. prices were higher or lower than German and EU-wide prices. CR at CORE-IV-95, PR at CORE-IV-34-35,

CR/PR at Table CORE-IV-70, as revised by Memorandum INV-DD-162 (Dec. 5, 2006).

 918 CR/PR at Table CORE-IV-70, as revised by Memorandum INV-DD-162 (Dec. 5, 2006).

 919 CR/PR at Table CORE-IV-38.

 920 CR at CORE-IV-53, PR at CORE-IV-20.

 921 The U.S. service center firm owned by ThyssenKrupp is TKSS. Corrosion-resistant steel is among the

products distributed by TKSS. TKSS presents one ready avenue for subject imports from ThyssenKrupp or other

producers in Germany to reach the U.S. market. German respondents claim that this is not likely because TKSS

currently handles very little imported product, and because the sales of ThyssenKrupp Germany have been to autorelated end-users and not service centers. German Respondents’ Posthearing Brief at 8-9. The fact that TKSS does

not currently distribute much imported product with the orders in place does not diminish its availability as a channel

for imports if the orders were revoked.

143

The Korean industry also had a significant and growing level of U.S. imports into the contractbased automotive sector.913 The largest share of Germany’s exports to the United States over the period

has been to the automotive sector, and we would expect this trend to continue if the order were lifted.914

We have considered relative prices for corrosion-resistant steel in the markets served by Korean

and German producers. Negotiated transaction prices for hot-dip galvanized steel show Korean prices to

be lower than U.S. prices during 2005 and 2006, except from May through September of 2005. 

Negotiated transaction prices for electro-galvanized steel show Korean prices to be lower throughout

2005 and 2006.915 Other data (published by ***) show prices in China (a major market of Korean

producers) and the Far East to be lower than U.S. prices from at least September 2005.916 Thus Korean

producers would have an incentive to shift some sales to the U.S. market to obtain higher prices.

With respect to Germany, most German shipments are made to its domestic market or other

European markets. On balance, prices for corrosion-resistant steel in Germany and other EU markets do

not appear to be sufficiently below U.S. prices so as to create a price incentive to shift sales to the U.S.

market.917 However, prices in certain Asian markets have typically been lower than U.S. prices, as has the

“EU export” price.918 Thus, German producers would have some price incentive to direct to the United

States sales currently made to markets outside the EU. German exports to markets outside the European

Union increased in 2005, with much of the increase directed to the United States.919

Subject producers in Korea and Germany have strong relationships with U.S. distributors and/or

customers that would facilitate their increased exports to the United States from their production

operations in their home countries, if the orders on the two countries were revoked. ThyssenKrupp

supplies the U.S. market from inventories maintained in warehouses in Michigan.920 It owns a significant

U.S. service center.921 While German respondents argue that the vast majority of the subject product

imported from Germany is ***, we find that ThyssenKrupp will need to supply its U.S. customers with
 922 CR at CORE-II-21-22, PR at CORE-II-14-15.

 923 CR at CORE-V-35, PR at CORE-V-16, CR/PR at Figures CORE-V-4 to V-11.

 924 Letters to Commission from U.S. Steel (Nov. 16, 2006); Mittal Steel USA (Nov. 22, 2006); AK Steel (Dec. 5,

2006); Auto Producers’ Posthearing Brief at Exhibit 1.

 925 CR/PR at Table CORE-III-9.

 926 CR/PR at Table CORE-III-9.

 927 During the period examined in the original investigation, subject imports from Korea *** the domestic product

in *** of *** comparisons of sales to manufacturers and end users, in *** of *** comparisons of sales to

distributors and service centers, and in *** of *** purchaser price comparisons reported by distributors and service

centers. Original Confidential Staff Report at Tables 110-111, 113. In the first review period, Korean product

undersold the U.S. product in 22 of 65 sales to distributors and in 25 of 44 sales to end users. USITC Pub. 3364 at

Tables CORROSION-V-5, V-7. In the current review period, Korean product undersold U.S. product in 13 of 53

comparisons. CR/PR at Table CORE-V-17.

 928 In the original investigation, subject imports from Germany *** the domestic product in *** of ***

comparisons of sales to distributors and service centers and in *** of *** purchaser price comparisons reported by

manufacturers and end users and *** the domestic product in *** of *** comparisons of sales to manufacturers and

end users. Original Confidential Staff Report at Tables 110-112. In the first review, subject product from Germany

(continued...)

144

imports from Germany so that it can maintain and likely build its customer base to support an eventual

North American production platform. Korean producers already have strong relationships with U.S.

customers, as evidenced by the level of their shipments to the United States during the review period. 

The record thus indicates that Korean and German producers would have a significant volume of

subject product available for shipment to the United States if the orders were revoked, based on their

substantial capacity and production of corrosion-resistant steel, excess capacity, general export

orientation, the substantial and increasing level of their exports to the United States during the review

period, and their well established relationships or distribution channels that would facilitate their

increased supply to the U.S. market. Generally higher prices in the United States than in other Asian

markets would give Korean producers the incentive to increase shipments to the U.S. market and German

producers the incentive to redirect volumes currently exported to Asia to the U.S. market. 

We thus find, based on the foregoing, that the likely volume of subject imports from Korea and

Germany would increase, and would be significant absent the orders. 

b. Likely Price Effects

We applied the legal standards discussed in section III above.

As during the original investigation and first review period, we continue to find that domestically

produced and imported corrosion-resistant steel are generally substitutable, provided suppliers meet

qualification requirements, and that price is an important factor in purchasing decisions.922

 While U.S. prices generally strengthened over the review period,923 a major driver behind the rise

in prices was soaring raw material and energy costs, and there is no indication that these costs will

decrease for the foreseeable future.924 As we have noted, the U.S. industry underwent major restructuring

and reduced its fixed costs over the review period, and has been able to obtain prices comfortably above

rising variable costs, particularly raw material and energy costs.925 The domestic industry’s ratio of

COGS to net sales fluctuated yet declined overall during the review period.926 Nevertheless, an influx of

subject imports of corrosion-resistant steel from Korea and Germany would likely limit the industry’s

ability to recover the costs, forcing it into a cost-price squeeze.

In the original investigation and both review periods, there was mixed underselling and

overselling by Korean product.927 The prices of imports from Germany generally showed overselling in

both the original investigation, first review, and current review.928 The generally higher prices in the U.S.
 928 (...continued)

oversold the domestic product in all 15 comparisons. USITC Pub. 3364 at CORROSION-V-10-12. Pricing data

collected by the Commission in this review show German product underselling U.S. product in 8 of 38 comparisons

despite the order. CR/PR at Table CORE-V-17.

 929 Tr. at 421-422 (Mohatarem), 455-456 (Cover).

 930 The record does not support that same proposition with respect to imports from Canada, Australia, France, or

Japan. Canadian producers already participate actively in the U.S. market. Their available capacity is modest. 

Many sales of Canadian producers have not been on the basis of aggressive pricing. We do not expect a substantial

change in Canada’s participation in the U.S. market if the order on Canada is revoked.

With respect to Australia, France, and Japan, we have found that those subject producers either lack

incentive or the ability to export significant volumes to the United States. For example, the major French and

Japanese producers have strong corporate relationships with significant U.S. counterparts. Any price leverage they

would add would be through the activities of their U.S. production assets which are part of the domestic industry. 

Producers in these subject countries are generally operating at relatively high levels of capacity utilization and what

excess capacity they have is directed at their home and regional markets.

145

market than key Asian markets, as described above, would enable producers in Korea, and to a lesser

extent Germany, to obtain higher prices in the U.S. market and still sell below the prevailing U.S. market

price.

As discussed above, Korean production and exports to the United States have been focused on

non-automotive uses such as the construction sector. Construction sales are mainly spot sales or projectbased sales and are not typically based on long-term contracts. Under these conditions the expected

increased imports from Korea for construction uses would have an immediate effect on market prices. 

Lower spot market prices would have a ripple effect on the overall market including having a negative

influence on contract sales prices.

As noted above, Korean and German producers would also be likely to increase their sales into

the U.S. automotive sector. U.S. auto producers have indicated that, though they prefer to buy from

suppliers in the North American market, the availability of subject imports in the event of revocation

would give them leverage to negotiate more favorable prices with U.S. producers.929 Imports could only

serve as leverage if they presented a sufficiently credible volume threat to existing sales of domestic

producers. We find that the increased subject imports offered by producers in Germany and Korea likely

would be sufficient for the U.S. auto producers to use them as a tool to hold down the contract price

levels they negotiate with U.S. producers.930 The likely price suppression that would result would be

exacerbated by elevated variable costs.

Based on the foregoing, we determine that the substantially larger volume of subject imports from

Korea and Germany that are likely to enter the U.S. market upon revocation would either be priced

aggressively to gain market share, or leveraged by purchasers to obtain more favorable domestic prices,

and would likely depress or suppress domestic prices to a significant degree. We consequently conclude

that revocation of the orders on subject imports from Korea and Germany would likely result in

significant adverse price effects.

c. Likely Impact

We applied the legal standards discussed in section III above. As instructed by the statute, we

have also considered the extent to which any improvement in the state of the domestic industry is related

to the antidumping duty orders and countervailing duty order at issue and whether the industry is

vulnerable to material injury if the orders are revoked.

For the reasons already discussed, we do not find the domestic industry to be vulnerable. We

incorporate herein our entire finding on vulnerability from section VI.D.3.c above.

While we do not find the domestic industry to be vulnerable, we do find that if the orders were

revoked, the likely significant increase in the volume of subject imports from Germany and Korea,
146

coupled with their likely adverse price effects, would likely have a significant negative impact on the

domestic industry. The negative effects would be felt in such industry factors as output, sales, market

share, profits, productivity, return on investments, utilization of capacity, cash flow, inventories,

employment, wage growth, ability to raise capital, investment, and the industry’s development and

production efforts. 

As we noted above in our discussion of likely price effects, there is no indication that raw

material and energy costs will decrease in the reasonably foreseeable future, and the domestic industry’s

ability to continue to recover these costs and remain profitable will be hampered by increased volumes of

subject imports that are either priced aggressively to gain market share, or leveraged by purchasers to

obtain favorable domestic prices. While the domestic industry is stronger and better able to handle the

vicissitudes of the corrosion-resistant market, it is not impervious to the effects of significant quantities of

aggressively priced import supplies. We find that the negative impact caused by subject imports would

be felt both by U.S. producers that supply the construction and other non-automotive sectors and to those

that supply automotive customers. The combined negative effect on the industry as a whole would be

significant.

For the foregoing reasons, we find that the likely significant volumes of subject imports from

Germany and Korea likely would have a significant negative impact on the domestic industry if the orders

on Germany and Korea were revoked.

CONCLUSION

For the foregoing reasons, we find that revocation of the countervailing duty order on corrosionresistant steel from France and the antidumping duty orders on corrosion-resistant steel from Australia,

Canada, France, and Japan, would not be likely to lead to continuation or recurrence of material injury to

an industry in the United States within a reasonably foreseeable time. We also find that revocation of the

countervailing duty order on corrosion-resistant steel from Korea and the antidumping duty orders on

corrosion-resistant steel from Germany and Korea would be likely to lead to continuation or recurrence of

material injury to an industry in the United States within a reasonably foreseeable time.
 1

 Specifically, section 752(a) of the Act provides that:

the Commission may cumulatively assess the volume and effect of imports of the subject

merchandise from all countries with respect to which reviews under section 1675(b) or (c) of this

title were initiated on the same day, if such imports would be likely to compete with each other

and with domestic like products in the United States market. The Commission shall not

cumulatively assess the volume and effects of imports of the subject merchandise in a case in

which it determines that such imports are likely to have no discernible adverse impact on the

domestic industry.

19 U.S.C. § 1675a(a)(7).

147

SEPARATE AND DISSENTING VIEWS OF COMMISSIONER STEPHEN KOPLAN AND

COMMISSIONER CHARLOTTE R. LANE WITH RESPECT TO CERTAIN CARBON

CORROSION-RESISTANT STEEL

Based on the record in these five-year reviews, we determine under section 751(c) of the Tariff

Act of 1930, as amended (“the Act”), that revocation of the countervailing duty orders on certain carbon

corrosion-resistant (“CORE”) steel from France and Korea and antidumping duty orders on CORE steel

from Australia, Canada, France, Germany, Japan, and Korea would be likely to lead to continuation or

recurrence of material injury to an industry in the United States within a reasonably foreseeable time. 

Therefore, we dissent from the Commission’s determination with respect to CORE steel imports from

Australia, Canada, France, and Japan, and write separately to explain our findings. Except, as noted in

the Commission’s opinion, we join its determination regarding legal standards, cut-to-length plate, and

CORE steel with respect to background, domestic like product, and domestic industry.

I. CUMULATION

We applied the legal standards for cumulation discussed in section III of the Commission’s Views

above.1

 In these reviews, the statutory requirements for cumulation that all CORE steel reviews be

initiated on the same day is satisfied.

We consider three issues in deciding whether to cumulate the subject imports: (1) whether

imports from any of the subject countries are precluded from cumulation because they are likely to have

no discernible adverse impact on the domestic industry; (2) whether imports of CORE steel from the

subject countries are likely to compete with each other and with the domestic like product according to

the traditional four-factor test; and (3) other factors that the Commission may consider. In so doing, we

take into account the various arguments by the parties in favor of and against cumulation.

Based on the available information regarding, inter alia, the capacity, excess capacity, and exports

of the industries in Australia, Canada, France, Germany, Japan, and Korea, as well as their trade and

pricing patterns during the original investigations and the first and second reviews, we find that subject

imports from all six countries would be likely to have a discernible adverse impact on the domestic

industry if the orders were revoked. We also find that a reasonable overlap of competition between the

subject imports and the domestic like product would be likely to exist if the orders were revoked. While

there are some variations in the volume and price trends for subject imports from all six countries during

the current review period, we find that none of them are distinct from all others or that there are any

significant differences in the conditions of competition among the subject countries. We, therefore, have

exercised our discretion to cumulatively assess the likely volume and effect of subject imports of CORE

steel from Australia, Canada, France, Germany, Japan, and Korea.
 2

 U.S. Steel’s Prehearing Brief at 13.

 3

 U.S. Steel’s Prehearing Brief at 13-45.

 4

 U.S. Steel’s Prehearing Brief at 49-51.

 5

 U.S. Steel’s Prehearing Brief at 52-53.

 6

 The Korean respondents do not object to cumulation of all subject imports, including those from Korea, but

instead argue that, due to changes in the overall conditions of competition, all the orders should be revoked. Korean

Respondents’ Prehearing Brief at 1.

 7

 Australian Respondents’ Posthearing Brief at 10.

 8

 Canadian Respondents’ Posthearing Brief at 1-8, Answers to Commissioners’ Questions at 31-41.

 9

 French Respondents’ Posthearing Brief at 8-10.

 10 German Respondents’ Posthearing Brief at 5-9.

 11 Japanese Respondents’ Posthearing Brief at 15.

 12 19 U.S.C. § 1675a(a)(7).

148

A. Parties’ Arguments

The domestic interested parties argue that all subject CORE steel imports should be cumulated. 

They argue that the likelihood of “no discernible adverse impact” is a “limited exception” to the

Commission’s ability to cumulate subject imports in five-year reviews.2 Given the pre-order levels of

subject imports, sufficient excess capacity in each of the subject countries, their export-orientation, and

the level of imports into the United States during the review period by certain countries, particularly ***

and ***, they urge the Commission to find that the exception does not apply to any country.3

 Addressing

the traditional four-factor test, they note, with respect to fungibility, that producers, importers, and

purchasers responding to the Commission’s questionnaires overwhelmingly reported that imports from

each country were “always” or “frequently” interchangeable with each other and the domestic like

product. They maintain that, even with the orders in place, subject imports from all countries have been

simultaneously present in the U.S. market, have similar channels of distribution, and have also been sold

in the same geographic markets before and since the imposition of the orders and this will likely

continue.4

U.S. producers also argue that there are no significant differences in conditions of competition

among the subject countries that would warrant the Commission exercising its discretion not to cumulate

any of them. All six countries have large CORE steel industries. Producers in all countries are exportoriented and make steel that can be used in the most demanding applications. All six countries have

excess capacity, make products that are sold on the basis of price, and will be impacted by changing

conditions in China. Finally, with the exception of ***, all subject country producers have U.S. affiliates

and such relationships could enhance their ability to penetrate the U.S. market.5

Respondents from each of the subject countries, except Korea,6 argue that their imports should

not be cumulated with those from the other subject countries on the following bases: Australia, no

discernible adverse impact;7

 Canada, different conditions of competition;8 France, lack of discernible

adverse impact, lack of overlap of competition, and differences in conditions of competition, based

mainly on the Arcelor-Mittal relationship;9

 Germany, no discernible adverse impact;10 and Japan, no

discernible adverse impact and different conditions of competition.11

B. Likely Discernible Adverse Impact

The statute precludes cumulation if the Commission finds that subject imports from a country are

likely to have no discernible adverse impact on the domestic industry.12 In the first reviews, the

Commission found that there was no likelihood of no discernible adverse impact in the event of

revocation with respect to all the subject countries, based on: their continuing presence in the U.S.
 13 USITC Pub. 3364 at 47.

 14 USITC Pub. 3539 at 21-22; USITC Pub. 3753 at 3.

 15 USITC Pub. 3539 at 27-28, 32.

 16 The Australian respondent, BlueScope, contends that its imports likely would have no discernible adverse

impact on the basis that it has been absent from the U.S. market for many years and is fully committed to its home

and export markets outside of Asia. Australian Respondent’s Posthearing Brief at 1 and 7-9.

 17 CR/PR at Table CORE-I-1. 

 18 CR/PR at Table CORE-I-1. We note that CORE steel imports from Australia have been subject to antidumping

duty margins ranging from 24.96 percent to 39.05 percent during the current review period. See CR/PR at Table

CORE-I-2.

 19 CR/PR at Table CORE-I-1.

 20 In its posthearing brief, Australian producer, BlueScope Steel, acknowledges these increases in capacity and

refutes other alleged capacity increases. Australian Respondent’s Posthearing Brief at 13-14; CR at CORE-IV-17;

PR at CORE-IV-9-10. BlueScope Steel provided information in the current review and reported that it is currently

the sole producer of the subject product in Australia; there were two known producers during the first review and

one producer during the original investigation. CR at CORE-IV-16; PR at CORE-IV-9. No Australian producer

responded to the first review, but there are data from the original investigation.

 21 In 1992, the Australian industry’s capacity utilization was ***. CR/PR at Table CORE-IV-10.

 22 CR/PR at Tables CORE-I-1 and IV-12.

 23 CR/PR at Table CORE-IV-12.

149

market, indicating they had the contacts and distribution channels necessary to compete; their excess

capacity; and the considerable resources devoted to export markets.13 In its remand opinions with respect

to Canada, France, and Germany, the Commission discussed the “no discernible adverse impact” standard

in greater detail, citing some of the same factors it considers in analyzing likelihood of material injury,

but noting that the threshold for finding likelihood of a discernible or “noticeable” adverse impact is

lower than the threshold for finding likelihood of material injury, or of a “significant” adverse impact if

the order is revoked.14 The factors considered on remand for each of the subject countries included: 

production capacity and unused capacity relative to U.S. production and apparent consumption, available

inventories, export reliance, substitutability of the subject imports with U.S. product, underselling in the

original investigation, ability to product shift, and trade patterns during the original investigations.15

We consider all these factors in analyzing “no discernible adverse impact” in these reviews. Our

review of the record, as discussed below, indicates that there is no basis for concluding that revocation of

any of the CORE steel orders would likely have no discernible adverse impact on the domestic industry. 

In particular, the CORE steel industry in each of these subject countries has significant production

capacity, considerable unused capacity, and is export-oriented. Therefore we are not precluded from

cumulating any of the subject countries on the basis of the “no discernible adverse impact” exception to

cumulation.

Australia.

16 In 1992, imports from Australia to the U.S. market of CORE steel were 183,782

short tons.17 Subject imports from Australia declined sharply after imposition of the orders and have

remained at minimal levels with the discipline of the orders in place.18

Australian capacity to produce CORE steel has increased since the original investigation, from

*** in 2005.19 Moreover, the evidence indicates that there has been an increase of *** in Australian

capacity in 2006 and that there will be increases of another *** in 2007.20 Capacity utilization, on the

other hand, declined from *** in 2005.21 Thus, even before the capacity increases in 2006 and 2007, the

Australian producer’s excess capacity was *** in 2005, more than *** of its total exports to the United

States during 1992, the last year of the original investigation period.22 Australian inventories, as a share

of total shipments, also increased from ***, and were *** in 2005.23 While Australia’s total exports, as a
 24 CR/PR at Table CORE-IV-12

 25 In April 2004, BlueScope acquired Butler, a market leader in the U.S. and China for pre-engineered steel

building systems, which provides it increased contacts and distribution channels for its CORE steel in the

construction sector of the U.S. market. CR at CORE IV-21, n.22; PR at CORE IV-16, n.22.

 26 The Australian producer reported that *** and does not have other production lines that could be diverted to

produce CORE steel. CR at CORE-II-10 and Table CORE-IV-16; PR at CORE-II-7 and Table CORE-IV-16.

 27 In the original investigation, Australian product *** the U.S. product in all but *** possible price comparisons. 

Original Confidential Staff Report at Tables 110 and 113.

 28 CR at CORE-IV-21; PR at CORE-IV-10.

 29 CR/PR at Table CORE-I-1. 

 30 We note that CORE steel imports from Canada have been subject to antidumping duty margins ranging from

0.51 percent to 18.71 percent during the current review period. See CR/PR at Table CORE-I-3.

 31 CR/PR at Table CORE-I-1. In contrast, during the first review period, subject imports from Canada declined

by 9.5 percent from 1997 to 1999. Id. We recognize that the import statistics show higher levels than the exports

reported by Canadian mills in Commission questionnaire responses and may be overstated in that the import

statistics reportedly include some non-subject tin-and chromium-coated steel sheet that has been lacquered. CR/PR

at CORE-IV-4; Canadian Respondents’ Posthearing Brief, Answers to Commission Questions at 21-22. We note,

however, that exports reported by Canadian mills may be lower because they do not include exports by Canadian

service centers and show an increase of *** during the current review period, from *** in 2000 to *** in 2005. 

CR/PR at Table CORE-IV-20.

 32 CR/PR at Tables CORE-IV-18 and IV-20.

 33 Canadian production of CORE steel increased from *** in 1992 to *** in 1999 and was *** in 2005; the

Canadian industry’s capacity utilization rate increased from *** in 1992 to *** in 1999, and declined to *** in 2005. 

CR/PR at Table CORE-IV-20.

 34 CR/PR at Table CORE-IV-20. The Canadian industry’s exports to Mexico, its primary other export market,

increased *** in absolute quantity and as a share of its total shipments in 2005. Id.

150

share of its total shipments, ranged from a high of *** in 2000 to a low of *** in 2005, its total exports in

January-June 2006 were *** of its total shipments, or ***.24

All Australian CORE steel production is hot-dip galvanized and largely produced for premium

building construction materials.25 There is no evidence of an ability to product shift26 and there were no

price comparisons for imports from Australia in this review, nor in the first review.27 Australia, the only

subject country to face import barriers in third countries, is subject to a 79 percent tariff on painted

corrosion-resistant steel in South Africa and a 70 percent tariff in Argentina.28

In sum, the Australian CORE steel industry has substantial excess capacity and inventories,

considerable resources devoted to export markets, and produces CORE steel that is substitutable with the

domestic product. These factors indicate that subject imports from Australia are likely to have a

discernible adverse impact on the domestic industry if the orders are revoked.

Canada. During the original investigation, imports from Canada to the U.S. market of CORE

steel increased from 180,030 short tons to 451,082 short tons, an increase of 151 percent.29 Canadian

imports remained in the U.S. market in substantial quantities after imposition of the orders,30 and

increased by 43.8 percent during this review period, from 380,490 short tons in 2000 to 547,326 short

tons in 2005.31

Since the original investigation, the Canadian industry’s capacity to produce CORE steel has

increased from *** in 1992 and 1999 to *** in 2005.32 While production and capacity utilization have

increased since the original investigation,33 an increasing share of Canadian shipments was directed to the

U.S. market, during the current review period, from *** of total shipments in 2000 to *** in 2005.34

Canada’s increasing reliance on exports to the U.S. market likely will continue as Canadian demand for
 35 Nucor/SDI’s Posthearing Brief, Answers to Commission Questions at 1-4; U.S. Steel’s Prehearing Brief at 23

and 24 (alleges that Dofasco’s rosy view of Canadian demand in this proceeding is inconsistent with the position it

took before the Canadian International Trade Tribunal regarding demand for all flat-rolled steel). In contrast,

Dofasco alleges that Canadian demand will increase through 2008, but provides nothing to support this allegation. 

Canadian Respondents’ Prehearing Brief at 24-28; Canadian Respondents’ Posthearing Brief at 8 and 9. Moreover,

Dofasco’s business plan notes that ***. Dofasco Importer’s Questionnaire Response at Attachment 2, p. 10.

 36 CR/PR at Tables CORE-IV-18 and IV-20.

 37 One Canadian producer reported that ***. CR at CORE-II-10; PR at CORE-II-7. In 2005, Canadian nonsubject corrosion-resistant steel production was approximately ***, as compared to *** of subject product. CR/PR

at Table CORE-IV-24. Exports of non-subject micro-alloy corrosion-resistant steel to the U.S. market in 2005 were

***, representing *** of Canada’s total shipments of that product and virtually all its exports. CR/PR at Table

CORE-IV-25.

 38 CR/PR at Table CORE-IV-19.

 39 CR/PR at Table CORE-IV-21.

 40 CR/PR at Table CORE-IV-4.

 41 CR/PR at Table CORE-V-17. In the original investigation, subject imports from Canada *** the domestic

product in *** of *** possible price comparisons. Original Confidential Staff Report at Tables 110-113.

 42 CR/PR at Table CORE-IV-68, as revised by Memorandum INV-DD-162 (Dec. 5, 2006). Negotiated

transaction prices for hot-dipped galvanized steel show U.S. prices as higher than Canadian prices in early 2005,

lower than Canadian prices from the second half of 2005 through May of 2006, and higher than Canadian prices

from June through November of 2006. Id.

 43 CR/PR at Table CORE-I-1.

 44 CR/PR at Table CORE-I-1. We note that CORE steel imports from France have been subject to antidumping

duty margins of 29.41 percent. See CR/PR at CORE-I-7 and Table CORE-I-7.

151

CORE steel is projected to decrease.35 Moreover, the Canadian industry had *** in excess CORE steel

capacity in 2005 and *** in inventories in 2005.36 There also is the possibility of product-shifting by

Canadian producers, given that they produce micro-alloy and other types of non-subject corrosion

resistant steel on the same equipment used to produce the subject product.37 

Virtually all Canadian CORE steel production (*** in 2005) is hot-dipped galvanized.38 The

Canadian industry produces CORE steel for both automotive and non-automotive applications, with ***

of total Canadian shipments for automotive applications in 2005.39 U.S. importers’ shipments of

Canadian CORE steel, however, are virtually all for automotive applications, *** in 2005.40

The Commission has price comparisons for imports from Canada in this review which show price

underselling, even with the discipline of the orders in place, in 31 of 50 possible comparisons.41

Moreover, Canadian negotiated transaction prices for hot-dip galvanized coils were lower than U.S. prices

for each month from June to November 2006.42

In sum, the Canadian CORE steel industry has substantial capacity, excess capacity, and

inventories; devotes considerable and increasing resources to the U.S. market; produces and exports to the

U.S. market CORE steel that is substitutable with the domestic product; has the ability to shift production;

and has undersold the U.S. product in the majority of possible price comparisons during this review

period, even with the discipline of the orders. These factors indicate that subject imports from Canada are

likely to have a discernible adverse impact on the domestic industry if the orders are revoked.

France. In 1992, imports from France to the U.S. market of CORE steel were 94,523 short

tons.43 Subject imports from France declined sharply after imposition of the orders and have remained at

minimal levels with the discipline of the orders in place.44
 45 CR/PR at Table CORE-IV-27. Two French producers, Arcelor and Duferco, appear to represent all CORE

steel capacity in France, with Arcelor representing *** in 2005. CR at CORE-IV-35 and Table CORE-IV-26; PR at

CORE-IV-15 and Table CORE-IV-26.

 46 CR/PR at Table CORE-IV-27. In 1992, French capacity utilization was ***. Id. We recognize the French

respondents’ claims that declines in capacity utilization reflect “the company’s decision to ***.” French

Respondents’ Prehearing Brief at 10. However, the evidence demonstrates that French CORE steel exports to other

North American markets increased substantially during the current review period and indicate French producers’

continuing interest in supplying markets in North America.

 47 CR/PR at Tables CORE-I-1 and IV-28.

 48 French producers reported non-subject production, mostly of micro-alloy product, in 2005 of *** as compared

to *** of subject product, and *** of their micro-alloy corrosion-resistant steel was exported, including ***, to the

United States. CR/PR at Tables CORE-IV-33 and CORE-IV-34. French producers, however, did not indicate how

readily equipment used to produce the non-subject product could be switched to production of subject CORE steel.

 49 CR/PR at Table CORE-IV-29.

 50 CR at CORE-IV-41; PR at CORE-IV-17.

 51 CR/PR at Table CORE-IV-28.

 52 CR/PR at Table CORE-IV-30.

 53 Original Confidential Staff Report at Tables 110-112.

 54 CR/PR at Tables CORE-IV-68 and CORE-IV-69, as revised by Memorandum INV-DD-162 (Dec. 5, 2006).

152

French capacity to produce CORE steel has *** since the original investigation, increasing from

*** in 1992, to *** in 1999, to *** in 2005.45 However, since French production has not increased at the

same rate, French capacity utilization has declined from *** at the end of the first review period in 1999

to *** in 2005.46 As a result, the French CORE steel industry has substantial excess capacity, *** in

2005; excess capacity equivalent to *** of apparent U.S. consumption in 2005 and *** of total subject

imports in 2005.47 There also is the possibility of product-shifting by French producers, given that they

produce and export micro-alloy and other types of non-subject corrosion resistant steel.48

The French industry devotes considerable resources to export markets, *** of total shipments in

2005.49 While shipments of subject product to the U.S. market, with the orders in place, have been

minimal, *** exports of subject CORE steel to other North American markets (Canada and Mexico) have

***.50

The majority of French CORE steel production (*** in 2005) is hot-dipped galvanized.51 The

French industry produces CORE steel for both automotive and non-automotive applications, with *** of

total French shipments for automotive applications in 2005.52

While there were no price comparisons for subject imports from France in this review or in the

first review, subject imports from France *** the U.S. product in *** possible price comparisons in the

original investigation.53 Negotiated transaction prices for hot-dip galvanized coils and for electrogalvanized are mixed with French prices higher than U.S. prices in the spring of 2005 and the second half

of 2006, but lower for the middle of 2005 to the middle of 2006.54

 In sum, the French CORE steel industry has substantial capacity and excess capacity; devotes

considerable resources to export markets; has substantially increased exports to other North American

markets during this review period; produces CORE steel that is substitutable with the domestic product;

and has the ability to shift production. These factors indicate that subject imports from France are likely

to have a discernible adverse impact on the domestic industry if the orders are revoked.
 55 German respondents contend that German imports should not be cumulated on the basis that the German

industry does not have substantial excess capacity or inventories, their focus is on their home and the European

markets, and German producers owned by Arcelor-Mittal will avoid exporting to compete with related U.S. plants. 

German Respondents’ Posthearing Brief at 5-9, 13, and Answers to Commission Questions at 2, 12, and 27-28.

 56 CR/PR at Table CORE-I-1.

 57 CR/PR at Table CORE-I-1. In contrast, during the first review period, subject imports from Germany declined

by 37.2 percent from 1997 to 1999. Id. We note that CORE steel imports from Germany have been subject to

antidumping duty margins of 10.02 percent. See Id. at CORE-I-7 and Table CORE-I-7.

 58 CR/PR at Table CORE-IV-36.

 59 CR/PR at Table CORE-IV-36. In 1992, German capacity utilization was ***. Id.

 60 CR/PR at Tables C-7 and CORE-IV-38.

 61 Of the reported German production in 2005 of *** was subject product, and the remainder was non-subject

product, with *** consisting of micro-alloy corrosion-resistant steel. CR/PR at Table CORE-IV-42. Exports of

micro-alloy corrosion-resistant steel to the U.S. market, as a percentage of total shipments of that product, ranged

from *** in interim 2006, and were *** in 2005. CR/PR at Table CORE-IV-43. German producers stated,

however, ***. CR at CORE-II-12; PR at CORE-II-8.

 62 CR/PR at Table CORE-IV-38.

 63 CR/PR at Table CORE-IV-38.

 64 CR at CORE-IV-54; PR at CORE-IV-20.

 65 CR/PR at Table CORE-IV-37.

 66 CR/PR at Table CORE-IV-39.

 67 CR/PR at Table CORE-V-17. In the original investigation, German product oversold U.S. product in ***

possible price comparisons. Original Confidential Staff Report at Tables 110-112.

153

Germany.

55 In 1992, imports from Germany to the U.S. market of CORE steel were 189,192

short tons.56 German imports remained in the U.S. market, after imposition of the orders, and increased

by 63.5 percent during this review period, from 46,453 short tons in 2000 to 75,941 short tons in 2005,

even with the discipline of the orders.57

German capacity to produce CORE steel has increased since the original investigation, with the

substantial increases occurring since the first review; capacity increased from *** of capacity in 1999 to

*** in 2005.58 However, since German production has not increased at the same rate, German capacity

utilization has declined from *** at the end of the first review period in 1999 to *** in 2005.59 As a

result, the German CORE steel industry has substantial excess capacity, *** in 2005, which was

equivalent to *** of apparent U.S. consumption, *** of U.S. production, and *** of total subject imports

in 2005.60 Moreover, German producers manufacture substantial quantities of non-subject corrosionresistant steel on the same equipment used to produce subject product, raising the possibility of product

shifting.61 German producers’ inventories were *** as a share of total shipments and *** in 2005.62

The German industry devotes considerable resources to export markets, *** of total shipments in

2005.63 Not only did shipments of subject product to the U.S. market increase, with the orders in place,

but German exports of subject CORE steel to other North American markets (Canada and Mexico) ***.64

The majority of German CORE steel production (*** in 2005) is hot-dipped galvanized.65 The

German industry produces CORE steel for both automotive and non-automotive applications, with *** of

total German shipments for automotive applications in 2005.66

Pricing data collected by the Commission show German product underselling U.S. product in 8 of

38 comparisons during the current review period, even with the discipline of the orders in place.67

Negotiated transaction prices for hot-dip galvanized steel show German prices generally higher than U.S.

prices from January through September of 2005, lower from October 2005 through September 2006, and
 68 CR/PR at Table CORE-IV-68, as revised by Memorandum INV-DD-162 (Dec. 5, 2006).

 69 CR/PR at Table CORE-IV-69, as revised by Memorandum INV-DD-162 (Dec. 5, 2006).

 70 CR at CORE-IV-95; PR at CORE-IV-35; CR/PR at Table CORE-IV-70, as revised by Memorandum INV-DD162 (Dec. 5, 2006).

 71 We note the German producers’ assertions regarding product shifting and inventories, but find that subject

imports from Germany would not be likely to have no discernible adverse impact in the event of revocation even if

we do not include non-subject product and inventories as potential increased shipments to the United States. CR at

CORE-II-12; PR at CORE-II-8; German Respondents’ Posthearing Brief at 7.

 72 Japanese respondents contend that Japanese CORE steel imports should not be cumulated on the basis that the

Japanese industry has no excess capacity and has strong home and other export market demand, including a

competitive advantage in supplying China and Asia. Japanese Respondents’ Prehearing Brief at 86-89.

 73 CR/PR at Table CORE-I-1.

 74 CR/PR at Table CORE-I-1. We note that CORE steel imports from Japan have been subject to antidumping

duty margins ranging from 1.61 percent to 36.41 percent during the current review period. See CR/PR at CORE-I-7-

8 and Table CORE-I-4.

 75 CR/PR at Table CORE-IV-45.

 76 CR/PR at Tables C-7 and CORE-IV-47.

 77 The Japanese industry produced non-subject product on the same equipment, in the amount of *** in 2005, out

of *** in total production. CR/PR at Table CORE-IV-51. Japan’s exports to the U.S. market of non-subject microalloy corrosion-resistant steel were at a high of *** in 2000 and were *** in interim 2006. These exports to the U.S.

market represented *** of total shipments in 2005 and *** in interim 2006, with total exports around *** of total

shipments throughout most of the review period. CR/PR at Table CORE-IV-52. One Japanese producer ***. CR at

CORE-II-12; PR at CORE-II-8.

 78 CR/PR at Table CORE-IV-47.

154

higher in October and November 2006;68 for electro-galvanized steel, German prices were lower in all

months for the January 2005-November 2006 period, except four.69 *** monthly prices for galvanized

steel from 2000 through November 2006 show U.S. prices often higher than German prices.70

In sum, Germany has substantial production capacity and unused capacity relative to apparent

U.S. consumption and production; it relies heavily on export markets, including markets outside the

European Union; its exports to the U.S. market increased significantly during the period, demonstrating

that it has an interest in the U.S. market, as well as established distribution channels to readily divert

shipments to this market; and it shipped significant quantities of non-subject micro-alloy corrosionresistant steel to the United States during the period.71 These factors indicate that subject imports from

Germany are likely to have a discernible adverse impact on the domestic industry if the orders are

revoked.

Japan.

72 In 1992, imports from Japan to the U.S. market of CORE steel were 824,743 short

tons.73 Subject imports from Japan declined sharply after imposition of the orders and have remained at

low levels with the discipline of the orders in place.74

Japanese capacity to produce CORE steel has increased since the original investigation, with a

substantial increase occurring since the first review; capacity increased from *** of capacity in 1999 to

*** in 2005.75 While Japanese production and capacity utilization have increased since the first review,

Japan still had substantial excess capacity in 2005; Japanese producers’ excess capacity was *** in 2005,

which was equivalent to *** of apparent U.S. consumption and *** of total subject imports in 2005.76

Moreover, Japanese producers manufacture substantial quantities of non-subject corrosion-resistant steel

on the same equipment used to produce subject product, raising the possibility of product shifting.77

Japanese producers’ inventories were ***, as a share of total shipments, and *** in 2005.78
 79 CR/PR at Table CORE-IV-47.

 80 See Nucor/SDI’s Posthearing Brief, Answers to Commission Questions at 22.

 81 CR/PR at Table CORE-IV-46.

 82 CR/PR at Table CORE-IV-48.

 83 CR/PR at Table CORE-V-17. In the original investigation, Japanese product undersold U.S. product in ***

possible price comparisons. Original Confidential Staff Report at Tables 110-112.

 84 CR/PR at Tables CORE-IV-68 and CORE-IV-69, as revised by Memorandum INV-DD-162 (Dec. 5, 2006).

 85 CR/PR at Table CORE-IV-70, as revised by Memorandum INV-DD-162 (Dec. 5, 2006).

 86 CR/PR at Table CORE-I-1.

 87 CR/PR at Table CORE-I-1. We note that CORE steel imports from Korea have been subject to antidumping

duty margins ranging from 0.68 percent to 17.70 percent during the current review period. See CR/PR at Table

CORE-I-5.

 88 CR/PR at Tables CORE-I-1, IV-1, and C-7.

 89 CR/PR at Table CORE-IV-54.

155

The Japanese industry devotes considerable resources to export markets (mostly to China and

other Asian markets), *** of total shipments in 2005.79 While shipments of subject product to the U.S.

market, with the orders in place, have been low, the evidence in the record show that Japanese exports of

subject CORE steel to other North American markets (Canada and Mexico) have been substantial and

increasing during this review period.80 These exports demonstrate a continuing interest in serving and

shipping to other North American markets in close proximity to the U.S. market.

The majority of Japanese CORE steel production (*** in 2005) is hot-dipped galvanized.81 The

Japanese industry produces CORE steel for both automotive and non-automotive applications, with ***

of total Japanese shipments for automotive applications in 2005.82

The Commission’s pricing data show underselling by Japanese product in 5 out of 20

comparisons during the current review period, even with the discipline of the orders.83 Negotiated

transaction prices for hot-dip galvanized steel show Japanese prices generally higher than U.S. prices in

2005 and lower in 2006; for electro-galvanized steel, Japanese prices generally were higher than U.S.

prices from February through June of 2005, lower from July 2005 through September 2006, and higher in

October and November 2006.84 *** monthly prices for galvanized steel show U.S. prices generally

higher than Japanese export prices in 2002, 2004, and 2006, and generally lower during the rest of the

review period.85

 In sum, the Japanese CORE steel industry has substantial capacity, excess capacity and

inventories; devotes considerable resources to export markets; has substantially increased exports to other

North American markets during this review period, indicating a continued interest in serving the markets

in close proximity to the U.S. market; produces CORE steel that is substitutable with the domestic

product; has shipped significant quantities of non-subject micro-alloy corrosion-resistant steel to the U.S.

market during the review period; and has the ability to shift production. These factors indicate that

subject imports from Japan are likely to have a discernible adverse impact on the domestic industry if the

orders are revoked.

Korea. In 1992, imports from Korea to the U.S. market of CORE steel were 193,513 short tons.86

Korean subject imports remained in the U.S. market after imposition of the orders and increased

substantially during the review period, despite the discipline imposed by the orders.87 During this review

period, Korean subject imports reached a high of 330,858 short tons in 2005, or 1.5 percent of apparent

U.S. consumption, for an increase of 30.5 percent from 2000 to 2005, and were 50.4 percent higher in

interim 2006 than in interim 2005.88

Korean capacity to produce CORE steel has more than doubled since the original investigation,

increasing from 3.1 million in 1992, to *** in 1999, to 8.4 million in 2005.89 However, since Korean

production has not increased at the same rate, Korean capacity utilization has declined from *** at the
 90 CR/PR at Table CORE-IV-54. In 1992, Korean capacity utilization was 93.8 percent. Id.

 91 CR/PR at Tables CORE-I-1 and IV-56.

 92 CR/PR at Tables CORE-IV-60 and CORE-IV-61. Korean producers, however, did not indicate how readily

equipment used to produce non-subject product could be modified to produce subject merchandise.

 93 CR/PR at Table CORE-IV-56.

 94 CR/PR at Table CORE-IV-56.

 95 CR at CORE-IV-81; PR at CORE-IV-29.

 96 CR/PR at Table CORE-IV-55.

 97 CR/PR at Table CORE-IV-57.

 98 CR/PR at Table CORE-V-17. In the original investigation, Korean product undersold U.S. product in ***

possible price comparisons. Original Confidential Staff Report at Tables 110, 111, and 113.

 99 CR/PR at Tables CORE-IV-68 and CORE-IV-69, as revised by Memorandum INV-DD-162 (Dec. 5, 2006).

156

end of the first review period in 1999 to 87.0 percent in 2005.90 As a result, the Korean CORE steel

industry has substantial excess capacity, 1.1 million short tons in 2005; excess capacity equivalent to

almost 5 percent of apparent U.S. consumption in 2005 and 113 percent of total subject imports in 2005.91

The Korean industry also produces non-subject product on the same equipment, including *** of microalloy corrosion-resistant steel, *** of which was exported to the U.S. market in 2005.92 Korean

producers’ inventories, as a share of total shipments, increased from 3.3 percent in 2000 to 4.6 percent in

2005, and were 334,202 short tons in 2005.93

In addition to current substantial volumes of U.S. imports from Korea despite the orders, Korea

exported 28.8 percent of its total shipments in 2005 to countries other than the United States, amounting

to 2.1 million short tons of CORE steel.94 These other export markets included Korean exports of subject

CORE steel to other North American markets (Canada and Mexico), which *** from 2000 to 2005.95

The majority of Korean CORE steel production (*** in 2005) is hot-dipped galvanized.96 The

Korean industry produces CORE steel for both automotive and non-automotive applications, with 20.5

percent of total Korean shipments for automotive applications in 2005.97

Pricing data show Korean product underselling U.S. product in 13 of 53 comparisons during the

current review period, even with the discipline of the orders.98 Negotiated transaction prices for hot-dip

galvanized steel show Korean prices higher than U.S. prices in May through September of 2005, and

lower in the remaining months of 2005 and 2006; for electro-galvanized steel, Korean prices generally

were lower throughout 2005 and 2006.99

In sum, the Korean CORE steel industry has substantial production capacity, excess capacity, and

inventories; relies heavily on export markets; devotes considerable and increasing resources to the U.S.

and other North American markets during the review period, demonstrating that it has an interest in the

U.S. market, as well as established distribution channels to readily divert shipments to this market; and

shipped significant quantities of non-subject micro-alloy corrosion-resistant steel to the United States

during the period. These factors indicate that subject imports from Korea are likely to have a discernible

adverse impact on the domestic industry if the orders are revoked.

Conclusion. In sum, each of the subject countries has increased its capacity since the original

investigation and each has excess capacity. Each country has maintained at least some level of exports to

the U.S. market during the review period, devotes considerable resources to export markets, and

undersold U.S. product at times during the original investigation period, and, in some cases, during the

review periods as well. These factors indicate that the subject imports from each country would have a

discernible adverse impact on the U.S. market if the orders were lifted.
 100 The four factors generally considered by the Commission in assessing whether imports compete with each

other and with the domestic like product are: (1) the degree of fungibility between the imports from different

countries and between imports and the domestic like product, including consideration of specific customer

requirements and other quality related questions; (2) the presence of sales or offers to sell in the same geographical

markets of imports from different countries and the domestic like product; (3) the existence of common or similar

channels of distribution for imports from different countries and the domestic like product; and (4) whether the

imports are simultaneously present in the market. See e.g., Wieland Werke, AG v. United States, 718 F. Supp. 50

(Ct. Int’l Trade 1989).

 101 See generally Chefline Corp. v. United States, 219 F. Supp. 2d 1313, 1314 (Ct. Int’l Trade 2002). 

 102 See Mukand Ltd. v. United States, 937 F. Supp. 910, 917 (Ct. Int’l Trade 1996).

 103 USITC Pub. 3364 at 47-48.

 104 CR at CORE-II-20; PR at CORE-II-13.

 105 CR at CORE-II-30; PR at CORE-II-23.

 106 CR at CORE-II-21; PR at CORE-II-14.

 107 CR/PR at Tables CORE-IV-4-6, IV-11, IV-13-16, IV-19, IV-21-24, IV-28, IV-30-33, IV-37, IV-39-42, IV-46,

IV-48-51, IV-55, IV-57-60. 

 108 CR/PR at Tables CORE-IV-4, IV-11, IV-19, IV-28, IV-37, IV-46, and IV-55.

 109 Canadian Respondents’ Posthearing Brief, Answers to Commission Questions at 38.

 110 CR/PR at Tables CORE-IV-4-6, IV-11, IV-13-16, IV-19, IV-21-24, IV-28, IV-30-33, IV-37, IV-39-42, IV-46,

IV-48-51, IV-55, IV-57-60. 

157

C. Likelihood of a Reasonable Overlap of Competition

Since we find that the “no discernible adverse impact” exception to cumulation does not apply to

any of the subject countries, we next analyze the four factors the Commission typically examines in

determining whether there will be a likely overlap of competition.100 We note that the relevant inquiry is

whether there would likely be competition even if there are no current imports from a subject country.101

Further, only a “reasonable overlap” of competition is required.102

In the original investigations and in the first five-year reviews, the Commission majority found a

reasonable overlap of competition and cumulated subject imports from all subject countries.103

Fungibility. In these reviews, the record indicates that domestically produced and imported

CORE steel are fungible products. Subject imports and the domestic product share the same essential

chemical and physical properties, and there is a moderate to high degree of substitution between them.104

Generally, producers, importers and purchasers reported that CORE steel from the U.S. and from other

countries is always or frequently interchangeable.105 Twenty-nine of 35 responding purchasers indicated

that imported and domestically produced CORE steel are generally used in the same applications, as long

as the steel conforms to the purchaser’s specifications or the supplier has been approved.106

The evidence also shows that the types of CORE steel produced by the subject producers during

the review period reveal a sufficient degree of fungibility among the subject imports and with the

domestic product.107 For example, producers in all subject countries produced hot-dip galvanized CORE

steel during the review period and in some cases exported significant quantities to the U.S. market.108 In

addition, contrary to Canadian respondents’ claims that imports from Canada are focused on specialty

automotive products to a much greater extent than other subject imports,109 all the subject countries

produce CORE steel for exposed automotive applications and the record shows that the majority of U.S.

shipments of imports from Germany also are used in automotive applications (***).110 Moreover, there is

sufficient overlap in the other types of CORE steel produced in all six countries, as well as exported to the
 111 CR/PR at Tables CORE-IV-4-6, IV-11, IV-13-16, IV-19, IV-21-24, IV-28, IV-30-33, IV-37, IV-39-42, IV-46,

IV-48-51, IV-55, IV-57-60. 

 112 CR/PR at Tables CORE-IV-13, IV-21, IV-30, IV-39, IV-48, and IV-57.

 113 Japanese Respondents’ Prehearing Brief at 90.

 114 CR/PR at Tables CORE-IV-46, IV-48-51.

 115 CR/PR at Table CORE-II-1.

 116 CR/PR at Table CORE-IV-8.

 117 CR/PR at Table CORE-IV-7.

 118 CR/PR at Table CORE-II-2.

 119 See e.g., U.S. Steel’s Prehearing Brief at 52-53; Nucor/SDI’s Posthearing Brief at 10-15; Mittal’s Posthearing

Brief, Answers to Commission Questions at Koplan-7-11, Lane-1-4, Okun-1-6, and Aranoff-1-3.

158

United States.111 Specifically, each country shipped significant quantities of CORE steel for nonautomotive applications during the review period (2005): Australia, ***; Canada, ***; France, ***;

Germany, ***; Japan ***; and Korea, ***.112 Similarly, while the Japanese producers assert a focus on

high-value specialty products,113 the record shows they produce a full-range of CORE steel products.114

Channels of Distribution. The record also indicates that there is sufficient overlap in the channels

of distribution for domestic and imported CORE steel. U.S. producers and importers ship CORE steel to

automotive, construction, and other end users, as well as to distributors and service centers, although in

different proportions.115 This is similar to the distribution patterns observed in the original investigations

and prior reviews.

Simultaneous Presence and Geographic Overlap. Imports from each of the subject countries

have been present in the U.S. market during at least some portion of the review period.116 The record also

indicates that, despite low levels of imports from some of the subject countries during the review period,

subject imports and the domestic product are sold in the same geographic markets.117 In addition, the

record shows that U.S. producers and importers, on the whole, reported nationwide sales of CORE

steel.118 Similarly, in both the original investigations and prior reviews, U.S. producers and importers

reported that the United States was the geographic market area in which they competed.

Conclusion. The record indicates that the likely reasonable overlap in competition criteria are

satisfied. Both domestically produced CORE steel and subject imports from all sources are fungible, are

sold through similar channels of distribution, have geographic overlaps in sales, and have been present in

the U.S. market during at least some portion of the period of review. We consequently conclude that

subject imports from each of these six countries will likely compete with each other and with the

domestic like product should the orders under review be revoked.

D. Other Considerations

In determining whether to exercise our discretion to cumulate subject imports of CORE steel, we

assess whether the subject imports from each country are likely to compete under similar or different

conditions of competition in the U.S. market. The domestic producers contend that there are no

appreciable differences between the subject countries in likely conditions of competition.119 Respondents

from Canada, France and Japan, however, contend that their imports are likely to compete under

conditions of competition different from those of other subject imports and thus that each of their

countries’ imports should not be cumulated. We address their arguments below.

Canada. The Canadian respondent contends that trade patterns and conditions, due primarily to

the integration of the North American automotive and CORE steel markets are different for Canadian
 120 Canadian Respondents’ Prehearing Brief at 1-15; Canadian Respondents’ Posthearing Brief at 1-8 and

Answers to Commission Questions at 31-41.

 121 Canadian Respondents’ Posthearing Brief at 2-3.

 122 We note that other subject imports are held in service center inventories to meet just-in-time requirements.

 123 On the issue of whether the North American market is integrated, the Canadian respondent contends that the

domestic CORE steel producers testified at the Commission hearing that it is “not integrated” but argued that they

were “operating in an integrated North American market” in the 2004 Canadian sunset proceedings. Canadian

Respondents’ Posthearing Brief at 4-5. The statements by the domestic CORE steel producers are not necessarily

inconsistent when taken in context. For example, in the Canadian sunset proceeding, the context was whether the

U.S. mills were dumping in the Canadian market (i.e., selling at a different price in the home market relative to the

Canadian market); the Canadian decision stated “U.S. Mills submitted that they have no propensity to dump

because, operating in an integrated North American market, they do not differentiate between U.S. and Canadian

customers for pricing purposes, and selling at the same ex-mill price is not dumping.” Id. at Exhibit 2 (paragraph

162, page 25). At the Commission hearing, the context was whether the U.S. and Canadian markets for steel

sourcing were a single market and the question from Commissioner Hillman was “whether you would agree that the

auto market in North America has become an integrated market, in terms of sourcing steel.” Tr. at 334. Mr.

Goodish of U.S. Steel responded: “Would not look at it as an integrated market. Auto manufacturers come to us

and we bid steel – or price steel based on specific models, not looking necessarily where they’re going to be bid. We

do have different arrangements that we have to make from a freight perspective on getting material into Canada. So,

we’re not looking at it as an integrated market. I think that would be dangerous on our part.” Id. Mr. Gant of AK

Steel added: “it’s a border that’s easily crossed. But, from another matter, it is a different country. . . . there are

different costs of doing business for producers there. . . . we ship to Mexico and Canada at the request of our

customers and we do that to serve them, because its proximity is reasonable. But, it’s not the same market.” Id. at

336.

 124 Canadian Respondents’ Prehearing Brief at 5-6; Canadian Respondents’ Posthearing Brief at 3.

 125 Tr. at 512-513.

159

imports relative to the conditions for CORE steel imports from other subject countries.120 In particular,

the Canadian respondents maintain that automotive companies treat Canadian producers as domestic

producers and that only North American suppliers are the “core” suppliers which the auto industry has

indicated it would continue to rely principally on, even if the orders were revoked.121

First, any differences in conditions of competition between Canada and other subject countries

due to the proximity of the Canadian suppliers are not significant enough to find that such imports are not

likely to compete with each other if the orders are revoked.122 The U.S. and Canadian markets do not

comprise one home market, either legally or factually.123 Nor do we find a basis for claims that Canadian

exports do not compete with U.S. product or other subject imports because Canadian exports are the

result of decisions by auto companies to shift model production to the U.S. market and thus require their

“core” steel companies to redirect shipments to the new assembly location.124 While the Canadian

respondent provided examples where such shifts resulted in CORE steel exports to the U.S. market, it also

testified at the Commission hearing that “Dofasco has actually lost a major piece of corrosion resistant

steel business at an OEM location in the United States due to a lower priced product from a U.S. mill

displacing Dofasco.”125 Clearly, Canadian CORE steel imports compete with U.S. product and CORE

steel imports from other subject countries.

Moreover, as discussed above regarding no discernible adverse impact and reasonable overlap of

competition, the Canadian CORE steel industry has substantial excess capacity and inventories, produces

CORE steel that is substitutable with the domestic product and other subject imports, devotes

considerable and increasing resources to exports to the U.S. market, and has undersold the U.S. product in

the majority of possible price comparisons during this review period. We find that the evidence does not

demonstrate any significant differences in conditions of competition between likely subject imports from

Canada and CORE steel imports from other subject countries.
 126 French Respondents’ Posthearing Brief at 8-10 (they also contend that Arcelor’s investment plans are to

acquire production facilities so as to produce locally rather than to export from France); French Respondents’

Prehearing Brief at 14-16.

 127 CR at CORE-III-5; PR at CORE-III-4.

 128 French Respondents’ Prehearing Brief at 13; French Respondents’ Posthearing Brief at Exhibit 3.

 129 See e.g., Mittal’s Posthearing Brief, Answers to Commission Questions at Okun-3-6.

 130 French Respondents’ Posthearing Brief at 5.

 131 CR at CORE-IV-41; PR at CORE-IV-17.

 132 Japanese Respondents’ Prehearing Brief at 89 and 90.

 133 See USITC Pub. 3364 at 48, n. 321.

160

France. In arguing that “there are fundamental differences in competition between France” and

other subject countries, the French Respondents focus on the proposed merger of Mittal and Arcelor, and

indicate that Arcelor has no incentive to ship to the U.S. market to compete against Mittal.126

We recognize the June 2006 announcement that Arcelor and Mittal plan to merge, but also take

into consideration that this merger is under review and is not expected to be finalized until at best June

2007.127 We also acknowledge the statements by Arcelor officials that “[i]f the Orders were revoked,

whatever imports of subject merchandise from France to the United States that occur will have no adverse

impact on the U.S. industry, because it is not in Arcelor-Mittal’s interest to do anything to undermine its

position in the United States.”128 Both Arcelor and Mittal produce a broad range of products.129 While

Arcelor may not intend to export to the U.S. market in a manner that adversely impacts its proposed U.S.

affiliate operations, such statements do not speak to whether its exports would adversely impact the U.S.

industry as a whole. Thus, rather than rely on intentions, we base our findings on the record evidence in

the current review, which do not demonstrate that subject imports from France likely would compete

under different conditions of competition in the U.S. market, if the orders were revoked.

As discussed above regarding no discernible adverse impact, the French CORE steel industry has

substantial and increasing excess capacity, produces CORE steel that is substitutable with the domestic

product and other subject imports, and devotes considerable resources to export markets. French

respondents contend that their exports to the U.S. market will follow the pattern of their exports to

Canada after revocation of the Canadian orders.130 However, they do not mention the pattern of CORE

steel exports from France to another North American market, Mexico, whose imports from France

substantially increased from 2002 to 2005.131 These French exports demonstrate a continuing interest in

serving and shipping to other North American markets in close proximity to the U.S. market. Finally,

during the current review period, French producers of CORE steel have exported non-subject corrosionresistant steel, such as micro-alloy steel, to the U.S. market providing them existing customers and

channels of distribution for subject CORE steel exports if the orders were revoked.

We find that the evidence does not demonstrate any significant differences in conditions of

competition between likely subject imports from France and CORE steel imports from other subject

countries.

Japan. In arguing that subject imports from Japan likely will compete under different conditions

of competition, Japanese respondents focus on their affiliations with U.S. CORE steel producers, and

assertions about Japanese trade patterns and product mix.132

First, as the Commission recognized in the first review, significant Japanese affiliate presence

existed prior to the original investigations, but this did not cause the Japanese companies to participate in

the U.S. market in a significantly different way than the other subject producers.133 We do not believe

that the situation is fundamentally different today. In fact, there are fewer Japanese CORE steel

producers affiliated with U.S. operations today, and they account for a smaller share of U.S. capacity and
 134 In the current review, *** Japanese respondents have an ownership interest in a domestic producer. CR/PR at

Table CORE-I-12. While the current Japanese affiliations represent *** of U.S. production in 2005, the six

Japanese producers with domestic producer affiliations in the first review accounted for *** of U.S. capacity in

1999. CR/PR at Table CORE-I-12; Japanese Respondents’ Prehearing Brief at 90; Confidential Views of the

Commission (First Review) at 77.

 135 Japanese Respondents’ Posthearing Brief at 10-12.

 136 The Japanese customs evidence was provided by Nucor/SDI. See Nucor/SDI’s Posthearing Brief, Answers to

Commission Questions at 22. Japanese respondents acknowledged CORE steel exports to Mexico, but did not

provide specifically requested export data regarding Mexico and did not refute the Japanese customs evidence

provided by Nucor/SDI. See Japanese Posthearing Brief at Tab E.

 137 Section 752(a)(6) of the Act states that “the Commission may consider the magnitude of the margin of

dumping” in making its determination in a five-year review investigation. 19 U.S.C. § 1675a(a)(6). The statute

defines the magnitude of dumping to be used by the Commission in five-year review investigations as “the dumping

margin or margins determined by the administering authority under section 1675a(c)(3) of this title.” 19 U.S.C. §

1677(35)(C)(iv). In Commerce’s final five-year review determinations with respect to all subject countries, it

(continued...)

161

production than in the first review.134 Thus, we do not agree with the Japanese respondents’ claim that

their significant investments in U.S. affiliate CORE steel producers sufficiently distinguishes them from

the producers in other subject countries, many of whom also have, or have plans to have, significant U.S.

CORE steel investments.

Second, the evidence shows that the Japanese industry’s production is not limited to specialty

products but rather includes production of a broad range of CORE steel products which compete with

other subject CORE steel.

Finally, Japanese respondents (as did French respondents) urge the Commission to consider their

exports to Canada after revocation of the Canadian order as a “model” of their likely trade patterns to the

U.S. market if the orders were revoked.135 In doing so, Japanese respondents also fail to make mention of

the substantial and increasing CORE steel exports from Japan to Mexico during the current review period. 

Japanese customs evidence shows Japanese exports to Mexico were large and increased substantially–

increased from about 75,000 metric tons in 2000 to 186,412 metric tons in 2004, and were 125,780 metric

tons in 2005 and 131,610 metric tons for the January-October 2006 period.136 These exports demonstrate

a continuing interest in serving and shipping to other North American markets in close proximity to the

U.S. market rather than a commitment to have U.S. affiliates supply these North American markets.

Moreover, as discussed above regarding no discernible adverse impact, the Japanese CORE steel

industry has substantial and increasing excess capacity, produces CORE steel that is substitutable with the

domestic product and other subject imports, and devotes considerable resources to export markets. We

find that the evidence does not demonstrate any significant differences in conditions of competition

between likely subject imports from Japan and subject CORE steel imports from other subject countries.

We find that the record in these reviews does not indicate that there are likely to be any

significant differences in conditions of competition between subject CORE steel imports from any of the

six subject countries. Consequently, we exercise our discretion to cumulate subject imports from

Australia, Canada, France, Germany, Japan, and Korea.

II. REVOCATION OF THE ANTIDUMPING AND COUNTERVAILING DUTY ORDERS

ON CORE STEEL FROM AUSTRALIA, CANADA, FRANCE, GERMANY, JAPAN, AND

KOREA WOULD BE LIKELY TO LEAD TO CONTINUATION OR RECURRENCE OF

MATERIAL INJURY

We applied the legal standards regarding the likelihood of continuation or recurrence of material

injury to the domestic CORE steel industry as discussed in section III of the Commission’s Views

above.137
 137 (...continued)

assigned five-year review margins as follows: Australia, 24.96 percent; Canada, 11.71 to 22.70 percent; France,

29.41 percent; Germany, 10.02 percent; Japan, 36.41 percent; and Korea, 17.70 percent. CR/PR at Table CORE-I-7.

Although the statute does not expressly define the “magnitude of the net countervailable subsidy” to be

used by the Commission in five-year reviews, it states that “[t]he administering authority shall provide to the

Commission the net countervailable subsidy that is likely to prevail if the order is revoked or the suspended

investigation is terminated.” 19 U.S.C. §1675a(b)(3). Commerce found likely subsidy rates as follows: France, 0.16

percent; and Korea, 1.15 percent. It revoked the countervailing duty order against CORE steel from Germany. 

CR/PR at Table CORE-I-8.

In five-year reviews concerning countervailing duty orders the Commission is required to consider

“information regarding the nature of the countervailable subsidy and whether the subsidy is a subsidy described in

Article 3 or 6.1 of the Subsidies Agreement.” 19 U.S.C. §1675a(b)(6). In its final determinations, Commerce

described the various subsidy programs as follows:

France. In its final determination in the review of the countervailing duty order, Commerce identified 9

programs which provided countervailable subsidies to French subject producers, none of which fell within the

meaning of Article 3 the Subsidies Agreement. 

Korea. In its final determination in the review of the countervailing duty order, Commerce identified 11

programs which provided countervailable subsidies to Korean subject producers, 5 of which were found to be export

subsidies as described in Article 3 of the Subsidies Agreement. CR at OVERVIEW-16-17, nn.41 and 42; PR at

OVERVIEW-14, nn.41 and 42.

 138 19 U.S.C. § 1675a(a)(4).

 139 USITC Pub. 3364 at 49-51.

162

A. Conditions of Competition

In evaluating the likely impact of the subject imports on the domestic industry, the statute directs

the Commission to consider all relevant economic factors “within the context of the business cycle and

conditions of competition that are distinctive to the affected industry.”138

In the first five-year reviews, the Commission found that supply and demand conditions as well

as the business cycle for CORE steel had not changed significantly since the original investigations.139

The Commission noted the two processes for making CORE steel, hot-dipping and electrolytic

galvanizing, and that demand depended on the level of demand in the principal end use markets,

automotive and construction. It described demand for hot-dipped CORE steel as having grown

significantly faster since the original investigations than demand for the electrogalvanized product. It also

found that apparent U.S. consumption had increased since the original investigations.

The Commission in the first reviews found subject imports and domestic product to be broadly

interchangeable and price therefore an important factor in purchasing decisions. It further found that

price competition had increased since the original investigations with the consolidation of purchasing

power in the automobile industry, the reduced number of service centers, and the adoption and application

of international standards. It found that pricing patterns had not changed significantly in recent years,

with many purchasers reporting they changed suppliers only infrequently. Domestic producers reportedly

sold their product both by contract and on the spot market and indicated that contracts gave them little

protection given that purchasers requested price concessions when spot prices fell.

As in the original investigations, domestic producers dominated the U.S. market for CORE steel

during the first review period and had made significant investments since 1992 to add capacity and

improve existing capacity. The Commission noted that CORE steel production was technologically

complex and capital intensive, with high fixed costs, requiring high capacity utilization rates for domestic

producers to stay profitable. It further noted the affiliations of the major Japanese producers with U.S.

producers.

While many of these conditions of competition are the same in the second reviews, there are

some differences which we also find relevant to our determinations in these reviews.
 140 CR at CORE-II-15; PR at CORE-II-10. Although the cost share of CORE steel varies greatly by end use, it

can account for a relatively large percentage of the total cost of end use products. In vehicle parts for automobiles

and light trucks, it can be 50 to 85 percent even though it accounts for only 1.4 to 5 percent of the total cost of the

vehicle. In certain construction components, such as metal studs, steel decks, and metal roofs, CORE steel accounts

for 70 to 100 percent of the total cost. CR at CORE-II-19; PR at CORE-II-21.

 141 CR/PR at Table CORE-II-3 (American Iron & Steel Institute data), as revised by Memorandum INV-DD-164

(Dec. 13, 2006). Based on Commission questionnaire responses, U.S. producers reported in 2005 that 35.6 percent

of their total shipments were directly to automotive end users, 24.0 percent directly to construction end users, 9.4

percent to other end users, and 31.0 percent to steel service centers and distributors. CR/PR at Tables CORE-I-11

and II-1.

 142 CR at CORE-II-17.

 143 CR/PR at Tables CORE-I-17 and C-7. While apparent U.S. consumption was 14.6 percent higher in JanuaryJune 2006 compared with January-June 2005, we note that there have been substantial fluctuations in apparent U.S.

consumption in recent years; apparent U.S. consumption increased by 15.3 percent from 2003 to 2004, but declined

by 9.3 percent from 2004 to 2005. Id.

 144 CR/PR at Table CORE-I-1.

 145 CR at CORE-II-14 and II-15, and notes 24-28; PR at CORE-II-9 and II-10, and notes 24-28. See Auto

Producers’ Posthearing Brief, Answers to Commission Questions at 6-12 (GM Projection at 9 and CSM Global

Production – North America at 11); see also Nucor/SDI’s Prehearing Brief, Exhibit 14 at Exhibit 1 (Ward’s US

Light Vehicle Production); U.S. Steel’s Prehearing Brief at Exhibit 37; Japanese Respondents’ Prehearing Brief,

Volume 2, Exhibit 9 at 6.

 146 See CR at CORE-II-14 and II-15, and notes 24-28; PR at CORE-II-9 and II-10, and notes 24-28. The parties

disagreed about how to characterize the demand forecasts, but the evidence that they provided was similar. While

the “Auto Producers project that domestic demand for CORE will continue to be ‘robust,’” we note that the evidence

they provided showed declines in automobile production in 2006, and flat demand in 2007. Specifically, the Auto

Producers recognized these similarities in stating:

In the near term, these data [GM projections] demonstrate that North American vehicle production will

(continued...)

163

1. Demand

Demand for CORE steel continues to be dependent on the demand in its end use sectors,

primarily automotive manufacturing and construction, although it is also used in home appliances, HVAC

components, and battery cans and components.140 In the current reviews, the automotive sector accounted

for 47.6 percent of domestic CORE steel shipments in 2005, with 25.8 percent to steel service centers and

distributors, 18.8 percent to the construction sector, 3.6 percent to appliances/utensils/cutlery, and 4.2

percent to other sectors.141 There are different business cycles for the different end user industries, and

the evidence is mixed on whether there is a distinctive business cycle for CORE steel, with the majority

of purchasers reporting there is not a distinctive business cycle and the majority of producers reporting

there is.142

Apparent U.S. consumption of CORE steel, which fluctuated from year to year over the 2000-

2005 period, only increased by 3.4 percent from 21.9 million short tons in 2000 to 22.7 million short tons

in 2005.143 In contrast, the increase in apparent U.S. consumption was higher in the original

investigations – 6.0 percent from 1990 to 1992 – and substantially higher in the first reviews – 12.1

percent from 1997 to 1999.144

Demand for CORE steel, based on projections for end use demand, is expected to remain flat or

increase at a slower rate in the reasonably foreseeable future than over the current review period.145 For

example, the record evidence shows that North American automobile production is expected to decline in

2006, based on announced cuts in automobile production by General Motors, Ford, and DaimlerChrysler,

stabilize or level off in 2007 and not increase until 2008 or 2009, depending on the forecast considered.146
 146 (...continued)

decline slightly in 2006, stabilize in 2007 and 2008, and then begin to increase significantly starting in

2009. Similarly, Ward’s and Automotive News (another highly reliable industry publication) predict a

small decrease in U.S. vehicle production in 2006, a leveling off in 2007, and then increases from 2008

through 2010.

Auto Producers’ Posthearing Brief, Answers to Commission Questions at 10; see also Nucor/SDI’s Prehearing Brief,

Exhibit 14 at Exhibit 1 (Ward’s US Light Vehicle Production); U.S. Steel’s Prehearing Brief at Exhibit 37; Japanese

Respondents’ Prehearing Brief, Volume 2, Exhibit 9 at 6.

 147 Domestic producers argue that a shift in demand from SUVs and light trucks to smaller passenger cars will

result in less CORE steel per car. See U.S. Steel’s Posthearing Brief at Exhibit B, and Answers to Commission

Questions at 7 (“U.S. Steel estimates that the average SUV contains *** pounds of corrosion-resistant steel, while

the average small car contains only *** pounds of corrosion-resistant steel. In other words, small cars generally use

*** less corrosion-resistant steel than SUVs. As these figures show, any major shift in production from SUVs to

smaller, more fuel-efficient automobiles could have a *** impact on demand for corrosion-resistant steel.”); Mittal’s

Posthearing Brief, Answers to Commission Questions at Koplan-12-15 (“the amount of CORE used in the average

passenger car is likely to be 470 pounds less than the CORE content of the average SUV or light truck. Thus, for

each reduction in SUV and light truck production of 1,000 vehicles, an additional 1,374 passenger cars would need

to be produced to maintain CORE demand at a steady volume. . . . [for example, the] increasingly popular Civic

model requires only 53 to 57 percent of the CORE needed to construct the heavier Pilot model, meaning that nearly

two Civics need to be built to create the same demand for CORE generated by one Pilot vehicle.”); Nucor/SDI’s

Prehearing Brief at Exhibit 14. According to respondents, a “possible ‘modest’ shift in consumer demand for

smaller automobiles is not going to result in a decrease in the amount of CORE used to produce the average

vehicle.” See Canadian Respondents’ Posthearing Brief, Answers to Commission Questions at 44 (“As smaller

cross-over utility vehicles (‘CUV’) gain in popularity and take market share from larger sport utility vehicles

(‘SUV’), the demand for CORE may increase as the typical CUV is a unibody vehicle in which the frame uses

relatively more CORE than the average SUV.”); Auto Producers’ Posthearing Brief, Answers to Commission

Questions at 18-23.

 148 CR at CORE-II-14, n. 24; PR at CORE-II-9, n. 24.

 149 CR at CORE-II-14 and n. 24; PR at CORE-II-9 and n. 24.

 150 CR at CORE-II-5 and n.5; PR at CORE-II-4 and n.5.

 151 CR at CORE-II-4-6; PR at CORE-II-3-5.

 152 Electrogalvanized CORE steel almost exclusively is shipped to automotive end users, who also receive about

40 percent of shipments of hot-dipped CORE steel. All domestic production capacity added over the current review

period was for hot-dipped CORE steel, which increased from 19.1 million short tons in 2000 to 20.1 million short

tons in 2005, whereas electrogalvanized capacity decreased from 4.4 million short tons to 3.4 million short tons, and

other capacity also decreased from 2.9 million short tons to 2.7 million short tons over the same period. CR/PR at

(continued...)

164

The evidence on the record is mixed as to whether a shift in production from SUVs and light trucks to

smaller passenger cars will result in less CORE steel per car.147 Thus, any increases in CORE steel

consumption due to increases in production of smaller vehicles is generally offset by declines in CORE

steel consumption due to decreases in SUV production. North American heavy truck production is

expected to decline in 2007.148 In addition, demand in the residential construction sector showed signs of

weakening at the end of the period and into 2007, which likely will reduce demand for HVAC

components and appliances; non-residential construction is expected to remain strong into 2007.149

Continuing the trend developing during the first reviews, demand for hot-dipped galvanized

CORE steel grew while demand for electrogalvanized CORE steel declined. Electrogalvanized CORE

steel reportedly is more costly to produce in part due to zinc and energy costs.150 The shift can be

attributed to costs as well as recent technological changes that have encouraged automakers to use the less

costly hot-dipped steel in place of electrogalvanized for exposed auto parts.151 While the shift has meant

that new capacity is hot-dip CORE steel and that some electrogalvanized has been phased out,152 there
 152 (...continued)

Table CORE-III-3.

 153 See e.g., U.S. Steel’s Posthearing Brief at 5, n. 19 and Exhibit B at paras. 12-16; Tr. at 195-196 and 535-536

(Mr. Cover: “There is no swing in mix from electrogalvanized to hot-dipped, and the reason is a technical reason. 

GM is the largest consumer of electrogalvanized steel in the country, and the design specifications for our use of that

product are stable. There are four other companies in the United States that also produce their vehicles with

electrogalvanized steel. Those are Ford, Chrysler, BMW and Mercedes Benz. . . .To move from one product to

another is technically infeasible in a short time for lots of manufactureability and product validation reasons, so to

my knowledge, and it’s certainly true of GM, there is no intentional design shift to move the materials of

construction from electrogalvnized to galvaneal.”).

 154 See CR at CORE-III-4-6 and Table CORE-III-3; PR at CORE-III-4 and Table CORE-III-3. The

consolidations have included: ISG acquired all of LTV’s assets in 2002, the assets of Bethlehem Steel in 2003, and

Weirton Steel’s assets in 2004; in 2003, U.S. Steel bought the steel-making assets of National Steel; in 2004,

Severstal purchased the assets of Rouge Steel; in 2005, Mittal acquired ISG, including CORE steel production

facilities previously owned by LTV Steel, Bethlehem Steel, Weirton Steel, and Ispat Inland. CR/PR at Tables

CORE-I-12 and III-1.

 155 The seven largest CORE steel producers accounted for *** of CORE steel production in 2005 as follows: ***. 

CR/PR at Table CORE-I-12. In 2005, the top four domestic mills accounted for *** of U.S. CORE steel production,

as compared to *** in 1999. CR/PR at Table CORE-I-12.

 156 CR at CORE-I-23; PR at CORE-I-19; Confidential Views of the Commission (First Review) at 77.

 157 We recognize that during the current review period the restructuring of the U.S. CORE steel industry may

have been facilitated in part by global safeguards on a variety of steel products, including CORE steel, from March

20, 2002, through December 4, 2003. The safeguard tariff was 30 percent ad valorem for the first year of relief and

24 percent ad valorem starting on March 20, 2003. CR at OVERVIEW-12-15; PR at OVERVIEW-10-11.

 158 Fixed costs, or “other factory costs,” as a ratio to net sales, decreased from 41.4 percent in 2000 to 28.0

percent in 2005. CR/PR at Table CORE-III-9. Productivity increased by 66.1 percent over the current period. 

CR/PR at Table C-7.

 159 CR/PR at Tables CORE-I-1 and C-7. While the industry had excess capacity for both hot-dipped and

electrogalvanized product, its capacity utilization rate was generally higher for hot-dipped production: hot-dipped

capacity utilization was at 80.2 percent in 2005 as compared to 74.8 percent in 2005 for electrogalvanized capacity

utilization. CR/PR at Table CORE-III-3.

 160 CR at CORE-III-7; PR at CORE-III-5.

165

still is demand for electrogalvanized, particularly by certain auto producers that have not changed their

requirements and/or designs.153

2. Supply

Since the first reviews, there have been a number of mergers and a restructuring of the domestic

CORE steel industry.154 However, while the domestic CORE steel industry has become somewhat more

concentrated,155 the number of domestic CORE steel producers has remained about the same – in the

original investigations, 23 firms produced CORE steel; in the first reviews, 20 firms produced CORE

steel; and in these reviews, 23 firms produced CORE steel.156

During the process of consolidation and restructuring,157 domestic producers have been able to

reduce their fixed costs, and increase their productivity.158 Nevertheless, CORE steel production still is

technologically complex, involves high fixed costs, is capital intensive in nature, and requires high

capacity utilization rates to remain profitable. In spite of the consolidation and restructuring, the domestic

industry’s overall production capacity remained relatively steady during the current review period, and its

capacity utilization hovered around 80 percent, down from 87.3 percent in 1999.159 Most domestic

producers do not produce other products on the same equipment or with the same employees.160
 161 USITC Pub. 3364 at 55.

 162 CR at CORE-III-5-6 and Table CORE-III-3; PR at CORE-III-4-5 and Table CORE-III-3. In line with plans to

upgrade and add this capacity, the industry’s capital expenditures were $428,147,000 in 2005, increasing from

$295,331,000 in 2000, and research and development expenses increased to $34,022,000 in 2005, from $15,950,000

in 2000. CR/PR at Table CORE-III-12.

 163 CR at CORE-III-4-7 and Table CORE-III-1; PR at CORE-III-4 and Table CORE-III-1.

 164 Twelve of 17 responding producers reported selling at least 95 percent of their CORE steel produced to order

and 18 of 20 responding importers reported selling 75 percent of their CORE steel produced to order. CR at COREII-29; PR at CORE-II-21.

 165 CR/PR at Figure CORE-III-1. Service center inventory data, however, are for all steel sheet and are not

limited to CORE steel product.

 166 Eleven of 17 producers responding to the Commission’s questionnaires and 8 of 26 responding importers

reported that they had refused, declined or been unable to supply CORE steel at certain times since 2000. CR/PR at

CORE-II-5.

 167 CR at CORE-II-4-6; PR at CORE-II-4. The domestic producers maintain that in 2004 their ability to supply

CORE steel may have been constrained to some extent by raw material shortages but there is currently no short

supply. In addition, they assert that some shortages alleged by purchasers were not real shortages but resulted from

consumers wanting quantities in excess of contract volumes at low contract prices, or from automakers switching the

grades they wanted on very short notice. See e.g., U.S. Steel’s Posthearing Brief at 4 and 6-8.

 168 CR at CORE-II-4 - II-5 and CORE-III-14; PR at CORE-II-3 - II-5 and CORE-III-11. When the collective

bargaining agreement between AK Steel and its union expired on March 1, 2006, AK Steel locked out its union

workers and began operating its Middletown Works facility using salaried and replacement workers. Negotiations

have continued. CR at CORE-III-14 and n. 27; PR at CORE-III-11 and n. 27.

 169 CR/PR at Tables CORE-I-1 and C-7.

166

In the first reviews, as the orders had a positive effect on the domestic CORE steel producers’

performance, they were able to make significant investments to add capacity and improve existing

capacity for a net increase of 6.7 million short tons from 1992 to 1999.161 In the second reviews, while

overall domestic CORE steel capacity remained flat from 2000 to 2005, a number of investments were

undertaken in 2005 and 2006, which will add 1.9 million short tons of CORE steel capacity by 2008.162

Specifically, the additional capacity includes: Winner Steel added 700,000 tons of hot-dip galvanized and

galannealed steel in 2006; SeverCorr began construction in 2005 on a new mill which is expected to start

production in 2007 and reach full capacity in 2008 with 400,000 tons devoted to hot-dip galvanized and

galannealed steel production; Mittal plans to bring on line 700,000 tons of hot-dipped galvanizing

capability by the end of the first quarter of 2007 and will shut down about 410,000 tons of other hot-dip

and aluminizing capacity, for a net increase in CORE steel capacity of 290,000 tons; and Nucor

announced plans to add 500,000 short tons of hot-dipped galvanized capacity.163

The majority of CORE steel sold by both domestic producers and importers is made to order, but

a significant minority is sold from inventory.164 By the end of the review period, service center

inventories were relatively high. After a correction in 2005 they began rising again.165

Purchasers reported periodic shortages during the second review, mostly in 2004 and early 2005,

when demand and prices peaked.166 The reported shortages were in the form of allocations, controlled

order entries, and attempts to obtain supply quantities in excess of those specified in their contracts, all of

which forced some purchasers into the spot market.167 Some of the shortages can be attributed to

unplanned outages at certain domestic facilities and labor disputes at AK Steel.168

The percentage of apparent U.S. consumption supplied by the domestic CORE steel industry

declined during the second review, from 92.6 percent in 2000 to 88.4 percent in 2005.169 Imports from

subject sources increased their presence in the U.S. market during the second review, as discussed
 170 CR/PR at Tables CORE-I-1 and C-7.

 171 CR/PR at Table C-7.

 172 CR/PR at Table CORE-IV-2. In 2005, the largest sources of non-subject imports were: India, Taiwan,

Mexico, Brazil, and China. Imports from China were 148,000 short tons in 2005 (less than one percent of apparent

U.S. consumption), but were higher in interim 2006, at 292,426 short tons.

 173 CR/PR at Tables CORE-IV-63 and IV-64. The evidence demonstrates that production in East and Southeast

Asia resulted in that region being a net exporter of about *** tons of coated steel sheet in 2005 and that the region is

expected to continue to be a net exporter, increasing to about *** tons in 2007. Id. at Tables CORE-IV-63, IV-64,

IV-66, and IV-67.

 174 CR/PR at Tables CORE-IV-64 and IV-67.

 175 USITC Pub. 3364 at 51.

 176 CR/PR at Table CORE-I-12.

 177 CR at CORE-II-24-27; PR at CORE-II-20-21.

 178 CR at CORE-V-11; PR at CORE-V-9; U.S. Steel’s Posthearing Brief at 12-14; Mittal’s Posthearing Brief at 4-

5; Nucor/SDI’s Prehearing Brief at 50-51.

 179 CR/PR at CORE-V-2.

167

below.170 Non-subject imports as a share of apparent U.S. consumption rose irregularly during the current

review, and were the highest in 2004 at 9.7 percent, when demand and prices were peaking.171 Nonsubject imports then declined in 2005.172

Global production capacity also increased during the second review and is expected to continue

increasing in the near future in both the subject countries and non-subject countries, including China,

other Asian countries, the EU, Turkey and Russia.173 Although China has been and is expected to remain

a net importer of CORE steel for the foreseeable future, the substantial increase in Chinese capacity will

likely slow imports into China of CORE steel.174

In the original investigations and the first reviews, each of the six major Japanese CORE steel

producers owned or was affiliated with a domestic producer.175 During the current review period, ***

Japanese respondents, *** Korean producer and *** German producer are affiliated with domestic

producers.176 Moreover, if the proposed Arcelor/Mittal merger is finalized, Canadian, French and more

German producers also will have affiliations with domestic producers.

3. Substitutability

Domestic and imported CORE steel, both subject and non-subject, is used in the same

applications. The majority of purchasers reported that the domestic product is comparable or superior to

subject imports from each country in every category.177 Given the broad interchangeability of CORE

steel, price continues to be an important factor in purchasing decisions, as it was in the original

investigations and first reviews. As discussed below, domestic CORE steel is sold both by contract and

on the spot market with little protection from contracts since price concessions are requested by

purchasers if spot prices decline.178

4. Raw Material/Energy Costs

Over the second review period, particularly in the latter half, the U.S. CORE steel industry’s raw

material and energy costs increased substantially and are forecast to remain at high levels for the

foreseeable future.179 For example, the world price of zinc, a primary coating material in the production

of CORE steel, has risen from $800 per metric ton in October 2003 to a high of $3,600 per metric ton in
 180 CR at CORE-IV-104 and Figures CORE-V-1 and V-2; PR at CORE-IV-38 and Figures CORE-V-1 and V-2.

 181 CR/PR at CORE-V-1. For example, natural gas prices increased from $4.45 per thousand cubic feet in 2000 to

$8.21 per thousand cubic feet in 2006, and electricity prices increased from $4.64 per kilowatt-hour in 2000 to $5.93

per kilowatt-hour in 2006. Id.

 182 CR/PR at CORE-V-3.

 183 19 U.S.C. § 1675a(a)(2).

 184 19 U.S.C. § 1675a(a)(2)(A-D).

 185 USITC Pub. 3364 at 51-52.

 186 USITC Pub. 3364 at 52-53.

 187 CR/PR at Table C-7. In the first reviews, apparent U.S. consumption increased by 12.1 percent from 1997 to

1999, while cumulated subject imports increased by about 40 percent for the same period. CR/PR at Table CORE-I1.

 188 CR/PR at Table C-7.

168

May 2006 and was $3,300 per metric ton in August 2006.180 Energy costs also have increased

substantially from 2000 to 2005.181 Both producers and importers reported that raw material price

increases have had a dramatic effect on CORE steel prices, especially since 2004.182

B. Likely Volume of Subject Imports

In evaluating the likely volume of imports of subject merchandise if the orders under review are

revoked, the Commission is directed to consider whether the likely volume of imports would be

significant either in absolute terms or relative to production or consumption in the United States.183 In

doing so, the Commission must consider “all relevant economic factors,” including four enumerated

factors: (1) any likely increase in production capacity or existing unused production capacity in the

exporting country; (2) existing inventories of the subject merchandise, or likely increases in inventories;

(3) the existence of barriers to the importation of the subject merchandise into countries other than the

United States; and (4) 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.184

In the original determinations, the Commission found that the cumulated subject imports

decreased slightly from 1990 to 1991, and then increased sharply to 1.9 million short tons in 1992, along

with a significant increase in market share during the same period.185 In the first reviews, the Commission

noted that the volumes of subject imports fell substantially after the orders were issued and had been at

levels significantly below the pre-order levels during the review period. It found the volume of

cumulated subject imports likely to be significant upon revocation based on: total production capacity in

the subject countries that exceeded apparent U.S. consumption in 1999; additional non-subject capacity

that could be shifted to produce the subject product; substantial excess capacity in the subject countries

and the incentive to maximize and sustain the utilization of available capacity given the producers’ high

fixed costs; and subject producers’ reliance on export markets.186

Several factors in the current five-reviews, similar to the first reviews, support the conclusion that

the likely volume of subject imports would be significant if the orders were revoked. First, even with the

discipline of the orders in place, increases of cumulated subject imports of CORE steel substantially

outpaced increases in consumption during the review period. While apparent U.S. consumption increased

by 3.4 percent from 2000 to 2005, cumulated subject imports increased by 36.6 percent, from 711,842

short tons in 2000 to 972,681 short tons in 2005.187 Cumulated subject imports were 14.1 percent higher

in the January-June 2006 period compared with the January-June 2005 period.188 The market penetration

of cumulated subject imports increased as the domestic industry’s share of the U.S. market declined from
 189 CR/PR at Table C-7.

 190 Calculated from CR/PR at Table C-7. Despite increases in apparent U.S. consumption during the current

review period, domestic CORE steel production declined by 1.5 percent from 2000 to 2005. Id.

 191 CR/PR at Tables CORE-IV-12, IV-20, IV-29, IV-38, IV-47, and IV-56. During the period of review, the

CORE steel production capacity in all subject countries has increased. See our analysis for each individual subject

country in the no discernible adverse impact section of our opinion above.

 192 CR/PR at Tables CORE-IV-12, IV-20, IV-29, IV-38, IV-47, IV-56 and C-7.

 193 Calculated from CR/PR at Tables CORE-IV-20, IV-24, IV-29, IV-33, IV-38, IV-42, IV-47, IV-51, IV-56, and

IV-60.

 194 Calculated from CR/PR at Tables CORE-IV-12, IV-20, IV-29, IV-38, IV-47, and IV-56.

 195 See USITC Pub. 2664 at 19; USITC Pub. 3364 at 52; Mittal’s Prehearing Brief at 25-26; Nucor/SDI’s

Prehearing Brief at 6-7; Tr. at 530.

 196 CR/PR at Tables CORE-IV-12, IV-20, IV-29, IV-38, IV-47, and IV-56.

 197 CR/PR at Tables CORE-IV-12 (Australia, exports as a share of total shipments ranged from ***), IV-20

(Canada, ranged from ***), IV-29 (France, ranged from ***), IV-38 (Germany, ranged from ***), IV-47 (Japan,

ranged from ***), and IV-56 (Korea, ranged from 29.2 percent to 33.6 percent).

 198 CR at CORE-IV-30, IV-41, IV-54, IV-68, IV-81 and Table CORE-I-1; PR at CORE-IV-14, IV-17, IV-20, IV24, IV-29 and Table CORE-I-1; Nucor/SDI’s Posthearing Brief, Answers to Commission Questions at 22.

 199 Respondents argue that their investments and affiliations with domestic producers provide a disincentive to

their increasing export shipments to the U.S. market that would harm their U.S. affiliates. See e.g., French

Respondents’ Prehearing Brief at 13 and 14; German Respondents’ Posthearing Brief at 12-14; Japanese

Respondents’ Posthearing Brief at 13 and Attachment C; Korean Respondents’ Posthearing Brief at 11-12 and

Answers to Commission Questions at 2-5. We note that the presence of U.S. affiliates of Japanese and Korean

producers during the original investigations did not prevent substantial volumes of imports from Japan and Korea

from entering the U.S. market, and together with the other subject imports, causing injury to the domestic industry,

(continued...)

169

2000 to 2005.189 Cumulated subject imports also increased relative to U.S. production during the current

review period.190 

Second, there is considerable and increasing capacity to produce CORE steel in the subject

countries. CORE steel production capacity in the subject countries increased by 10.4 percent from 2000

to 2005.191 It was 37.7 million short tons in 2005, equivalent to 166 percent of apparent U.S.

consumption.192 The total subject country production capacity is even more significant considering that

additional capacity of 7.1 million short tons currently used to produce non-subject corrosion-resistant

steel (such as micro-alloy) could be shifted to production of the subject merchandise.193

In spite of the relatively high capacity utilization rates reported by all responding subject

producers, there is substantial and increasing excess capacity in the subject countries. In 2005, excess

CORE steel capacity was 3.4 million short tons, equivalent to 15.1 percent of apparent U.S. consumption. 

Moreover, total excess capacity in the subject countries increased by 18.7 percent from 2000 to 2005.194

Given the high fixed costs associated with CORE steel production, there continues to be an incentive to

maximize and sustain the utilization of available capacity.195 Furthermore, subject CORE steel producers

held substantial inventories of subject product, almost 2 million short tons in 2005.196

Finally, as evident in the original investigations and first reviews, producers in all subject

countries continue to rely heavily on their export markets. In 2005, total cumulated export shipments

accounted for 30.3 percent of total cumulated shipments, with individual countries’ devotion of resources

to exports ranging from *** percent to *** percent of their total shipments.197 Exports from subject

countries have increased to the U.S. market, notwithstanding the discipline of the orders, and to other

North American markets (Canada and Mexico) during the period of these reviews.198 This evidence

demonstrates that producers in subject countries have an interest in the U.S. market and established

distribution channels to readily divert additional shipments to this market if the orders were revoked.199
 199 (...continued)

as a whole. Moreover, in the case of the Korean producers, such an affiliation did not preclude substantial increases

in subject Korean imports during the current review. In addition, we recognize the intentions, as discussed above,

regarding any affiliations with French and German producers resulting from the proposed Arcelor and Mittal merger,

but note that these have not been finalized.

 200 19 U.S.C. § 1675a(a)(3). The SAA states that “[c]onsistent with its practice in investigations, in considering

the likely price effects of imports in the event of revocation and termination, the Commission may rely on

circumstantial, as well as direct, evidence of the adverse effects of unfairly traded imports on domestic prices.” 

SAA at 886.

 201 USITC Pub. 3364 at 54.

 202 USITC Pub. 3364 at 54.

 203 CR at CORE II-21-24 and Tables CORE-II-5-6; PR at CORE II-13-14 and Tables CORE-II-5-6.

 204 CR at CORE II-21-24 and Tables CORE-II-5-6; PR at CORE II-13-14 and Tables CORE-II-5-6.

 205 CR/PR at Table CORE-II-5.

 206 CR/PR at Table CORE-II-6.

170

Given the subject producers’ reliance on export markets, their substantial and increasing excess

capacity, taken together with the incentive to maximize production, and their continued and increasing

presence in the U.S. market, we find that they likely will export significant and increasing volumes of

CORE steel to the U.S. market upon revocation of the antidumping and countervailing duty orders. Thus,

we find that the volume of cumulated subject imports likely would be significant if the orders were

revoked.

C. Likely Price Effects

In evaluating the likely price effects of subject imports if the orders under review are revoked, the

Commission is directed to consider whether there is likely to be significant underselling by the subject

imports as compared to the domestic like product and whether the subject imports are likely to enter the

United States at prices that otherwise would have a significant depressing or suppressing effect on the

price of the domestic like product.200

In the original investigations, the Commission found that price was an important factor for

purchasers. It also found price suppression and/or depression based on import prices that were falling at a

greater rate than domestic prices, together with increased import volumes and confirmed lost sales and

lost revenue allegations.201 In the first reviews the Commission found that the increased sales of subject

imports would likely be achieved by aggressive pricing, which would result in significant effects on

domestic prices. It noted that while contracts provide some measure of insulation from spot market price

fluctuations, prices in the spot market could affect prices in the domestic industry’s contract business.202

In considering the likely price effects of subject imports in these reviews if the orders were

revoked, we recognize that domestically produced CORE steel and subject imports are used in the same

applications, and are considered interchangeable and comparable.203 Moreover, the general importance of

price in purchasing decisions has not changed since the time of the original investigations and first fiveyear reviews.204 The record in these reviews indicates that price is the factor most frequently cited by

U.S. purchasers as the number one factor in their purchasing decisions, with quality the second most

frequently cited factor.205 Price also was a factor repeatedly cited by purchasers as a “very important”

factor in purchasing decisions; the only factor that purchasers cited as frequently was “availability.”206

Moreover, the evidence shows that the domestic product and subject imports overwhelming compete in

the same markets, specifically the automotive and construction industry markets. In light of the high

degree of interchangeability and comparable quality, price will be the principal factor influencing

purchasing decisions absent the orders. Thus, sustained underselling by even a relatively small amount of

subject imports is likely to have significant price-suppressing or -depressing effects.
 207 CR at CORE-V-9; PR at CORE-V-8.

 208 Eight of 20 U.S. producers reported that 85 percent or more of their sales are on a spot basis, while six

producers (***) reported that 60 percent or more of their sales are on a long-term contract basis. CR at CORE-V-10;

PR at CORE-V-8.

 209 CR at CORE-V-10, n.15; PR at CORE-V-8-9, n.15.

 210 CR at CORE-V-9, n.14; PR at CORE-V-8, n.14.

 211 CR at CORE-V-11; PR at CORE-V-9.

 212 Nucor/SDI’s Prehearing Brief at 50-51; Auto Producers’ Prehearing Brief at 27-31.

 213 CR at V-3, nn.6 and 7, and V-10, n.16; PR at V-3, nn.6 and 7, and V-9, n.16. According to domestic

producers, even when sales are under contract, if spot prices fall, purchasers do not hesitate to request price

concessions under the contracts. Conversely, when prices and costs rise, the domestic producers are locked into

below-market prices under the contracts. Nucor/SDI’s Prehearing Brief at 50-51; U.S. Steel’s Posthearing Brief at

12-14; Mittal’s Posthearing Brief, Answers to Commission Questions at Koplan-4-5. Respondents assert that the

U.S. industry is unwilling to commit to longer-term contracts because they believe prices will climb even higher than

they did during the review period, and they have forced automakers to accept volume limitations in their contracts. 

Auto Producers’ Prehearing Brief at 27-31.

 214 CR at CORE-V-35 and Figures CORE-V-4 to V-11; PR at CORE-V-16 and Figures CORE-V-4 to V-11. The

prices of products 5, 7, and 8 (according to Mittal, products 5-8 are higher valued products for the automotive sector)

showed little change over the period for contract sales, while prices of non-contract sales increased over the period

for products 5 and 7. With the exception of products 5, 7, and 8, contract and non-contract prices generally followed

the same trend. Prices of imports of products 2 and 6 from Korea, product 6 from Germany, and products 7 and 8

from Canada followed the general U.S. price trend. CR at CORE-V-35 and n. 23; PR at CORE-V-16 and n. 23.

 215 CR at CORE-V-1, V-3, V-35 and Figures CORE-V-1, V-2, and V-4 to V-11; PR at CORE-V-1, V-3, V-16 and

Figures CORE-V-1, V-2, and V-4 to V-11.

 216 CR at CORE-V-17; PR at CORE-V-11.

171

Purchasers buy CORE steel frequently, often daily or weekly; some buy the product consistently

over the course of a year, and others experience seasonal peaks in their purchasing. Producers generally

reported determining prices on a transaction-by-transaction basis, based on market conditions and raw

material costs.207

A portion of domestic producers’ sales are by long-term contracts, but several producers make the

majority of their sales on the spot market.208 Automotive and appliance end users tend to favor longerterm contracts, whereas the construction industry is more short-term and project-based.209 Auto producers

reported that they generally enter into contracts with individual producers to supply steel for certain auto

parts and that the life of the vehicles is multiple years.210 Long-term contracts generally fix either price

only or both price and quantity and have no meet-or-release provisions.211 Both domestic producers and

respondents seemed to agree that toward the end of the current review period long-term contracts were

becoming shorter ***.212 Whereas in the first reviews the Commission found that contracts provided

some measure of insulation, the evidence in the current reviews shows that contracts, particularly longterm contracts that do not provide for adjustments based on increases in raw material and energy costs,

have been less advantageous for CORE producers than the spot market.213

Pricing trends over the current period of review differ among the several products. Commission

pricing data generally showed relatively little change for U.S. prices from 2000 through 2003 with

increases in 2004 that leveled off or declined slightly in late 2004 or early 2005 and increases for some

products in the first half of 2006.214 While in general prices were somewhat higher at the end of the

period of review than in 2000, both producers and importers reported that increases in raw material costs

had a dramatic effect on CORE steel prices, particularly since 2004.215 The pricing data also show a

mixture of underselling and overselling by subject imports even with the orders in place.216

Because price is important to purchasing decisions, the presence of significant quantities of

CORE steel imports that are likely to enter the United States after revocation of the orders will force
 217 Tr. at 421-422; see also Tr. at 455-456 (Mr. Cover: “we can’t make a supplier do anything that they don’t

want to do. Only competition or competitive pressure can do that. So revocation of the orders would allow us to

invite proposals from the subject countries. It would allow us to start the validation process. It would allow us and

the domestic industry to observe the level of interest and energy that those countries would put into winning our

business. I think for those reasons the appearance and the reality of competitive pressure would create more

flexibility for us in the domestic supply base and make it a more balanced engagement when we do negotiate each

year price and volume.”).

 218 19 U.S.C. § 1675a(a)(4).

 219 19 U.S.C. § 1675a(a)(4).

 220 The SAA states that in assessing whether the domestic industry is vulnerable to injury if the order is revoked,

the Commission “considers, in addition to imports, other factors that may be contributing to overall injury. While

these factors, in some cases, may account for the injury to the domestic industry, they may also demonstrate that an

industry is facing difficulties from a variety of sources and is vulnerable to dumped or subsidized imports.” SAA at

885.

 221 USITC Pub. 3364 at 55.

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domestic CORE steel producers to either lower prices or lose sales. In fact, the Auto Producers explicitly

testified at the Commission’s hearing that the mere threat of competition from subject imports is likely to

drive prices down in the U.S. market, if the orders are revoked. For example, General Motor’s economist

stated, “We think if you revoke the industry will know that the domestic buyers have an alternative and

therefore will be much more willing to sit down in a partnership with us and supply this field we need at

globally competitive prices. . . . We have qualified suppliers around the world. . . . But we believe that the

threat of potential competition, the alternative is what will drive the domestic steel industry to behave

competitively in negotiations, in the supply terms, with the domestic manufacturers.”217

For the foregoing reasons, we find that the significant likely volume of subject imports is likely to

significantly undersell and have significant price depressing or suppressing effects on the prices of the

domestic product, if the orders are revoked.

D. Likely Impact of Subject Imports

In evaluating the likely impact of imports of subject merchandise if the orders under review are

revoked, the Commission is directed to consider all relevant economic factors that are likely to have a

bearing on the state of the industry in the United States, including but not limited to: (1) likely declines in

output, sales, market share, profits, productivity, return on investments, and utilization of capacity; (2)

likely negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital, and

investment; and (3) likely negative effects on the existing development and production efforts of the

industry, including efforts to develop a derivative or more advanced version of the domestic like

product.218 All relevant economic factors are to be considered within the context of the business cycle

and the conditions of competition that are distinctive to the industry.219 As instructed by the statute, we

have considered the extent to which any improvement in the state of the domestic industry is related to

the orders at issue and whether the industry is vulnerable to material injury if the orders are revoked.220

In the original investigations, the Commission found that the increased volume of lower priced

subject imports and their significant market share depressed prices and caused the U.S. industry to suffer

lost market share, reduced capacity utilization, and growing financial losses despite increasing apparent

consumption. The industry’s capital expenditures and research and development expenses also declined,

especially during the latter part of the period examined.221

In the first reviews, the Commission found that the orders had a positive effect on the domestic

industry’s performance, its operating margin was higher at the beginning of the review period than during

the original investigations, and its capital expenditures and research and development expenses had

increased. Nevertheless, it found the industry vulnerable, based on declines in operating income,
 222 USITC Pub. 3364 at 55-57.

 223 CR/PR at Table C-7.

 224 CR/PR at Table C-7.

 225 CR/PR at Table CORE-I-1.

 226 CR/PR at Table C-7. Imports of CORE steel from nonsubject sources also increased their presence in the U.S.

market during the review period. Id.

 227 CR/PR at Table C-7.

 228 CR/PR at Table CORE-I-1. The Commission found the industry vulnerable in the first reviews where

operating margins declined from 10.5 percent in 1997 to 5.9 percent in 1999. Id.

 229 CR/PR at Table CORE-I-1.

 230 CR/PR at Table CORE-III-9.

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operating margins, capacity utilization levels, and unit sales values. It found that the likely significant

volumes of subject imports upon revocation would likely undersell the domestic product and suppress or

depress U.S. prices, cause the domestic industry to lose market share and have a significant adverse

impact on the domestic industry.222

The domestic CORE steel industry’s performance has been mixed during the current reviews. 

The domestic industry’s production and U.S. shipments have fluctuated from year to year and declined

overall from 2000 to 2005 by 1.5 percent and 1.2 percent, respectively.223 These declines occurred while

apparent U.S. consumption increased by 3.4 percent and cumulated subject imports increased by 36.6

percent.224 Whereas in the first reviews, the domestic industry’s production and U.S. shipments increased

from 1997 to 1999, by 13 percent and 10.9 percent, respectively, as apparent U.S. consumption also

increased by 12.1 percent.225 During the current reviews, the domestic industry’s share of the U.S. market

declined as the presence in the U.S market of the cumulated subject imports increased.226 Capacity

utilization fluctuated from year to year but hovered about 80 percent through the review period, down

from 87.3 percent in 1999 at the end of the first reviews.227

The domestic industry’s financial performance at the beginning of the current reviews was lower

than that in the first reviews and similar to its performance during the original investigations. In the first

reviews, the domestic CORE steel industry appeared to have positively benefitted from the orders, at least

initially, with declines in financial performance at the end of the first review period. That weakening

financial performance worsened from 2000 to 2003 at the beginning of the second reviews. Operating

margins fluctuated between low income margins and losses from 2000 to 2003 (1.4 percent in 2000, -5.0

percent in 2001, -1.6 percent in 2002, and 0.7 percent in 2003), down from 5.9 percent at the end of the

first review in 1999.228 The domestic industry’s performance improved substantially to 10.8 percent in

2004, as apparent U.S. consumption and domestic production increased and capacity utilization reached a

period high of 85 percent. While this level of operating income might not suggest vulnerability, even for

a high value-added product such as CORE steel, it was not sustained as the domestic industry’s operating

income declined to 4.9 percent in 2005.229

Based on the record evidence in these reviews, we find that the domestic industry is currently

vulnerable to material injury if the orders are revoked. There are a number of important factors

underlying the financial performance of the CORE steel industry. First, the swings in the domestic

industry’s financial performance correlate to the increases in cost of goods sold, particularly rising raw

material and energy costs. As discussed above, raw material costs as a share of net sales increased from

42.1 percent in 2000 to 55.6 percent in 2005, as direct labor costs (11.3 percent to 7.9 percent) and other

factory costs (41.4 percent to 28 percent) declined overall from 2000 to 2005.230 The evidence indicates

that the automotive producers, which account for 47.6 percent of CORE steel shipments, have generally
 231 CR/PR at CORE-V-3 and nn. 6 and 7. We recognize that some recently negotiated contracts for future CORE

steel shipments to the automotive sector may contain such adjustment provisions for raw material and energy costs. 

CR/PR at CORE-V-3, n. 7; Auto Producers’ Prehearing Brief at 30

 232 See e.g., Mittal’s Posthearing Brief, Answers to Commission Questions at Koplan-1-6; U.S. Steel’s Prehearing

Brief at 81-82.

 233 CR/PR at Tables CORE-I-12 and III-10 (net sales data); *** Producer Questionnaire at Question II-3; ***

Producer Questionnaire at Question II-3; *** Producer Questionnaire at Question II-3. We recognize that ***,

which accounts for *** of domestic production and sells about *** of its production to the automotive sector, had an

operating margin of *** in 2005. However, *** has a niche market – the development and commercialization of

*** to the auto producers. CR at CORE-III-5; PR at CORE-III-4. In contrast, the *** automotive U.S. CORE steel

producer, ***, which sells about *** of its production to the automotive sector, had an operating margin of *** in

2005.

 234 These projections were included in submissions that Commission staff requested from AK Steel, U.S. Steel,

and Mittal. See AK Steel Supplemental Submission (December 4, 2006); U.S. Steel Supplemental Submission

(November 16, 2006); and Mittal Supplemental Submission (November 22, 2006). We have considered the 2007

projections, particularly the projected operating income and margins, submitted by *** with caution because each

includes assumptions regarding expenses or costs that raise questions about the accuracy of the projections. For

example, *** 2007 projection does not include any expenses for ***. *** that zinc and other raw material and

energy costs likely will continue to increase.

 235 *** also provided a breakdown of its automotive sales by company – its operating margins on its sales to ***,

which accounted for about *** of its automotive shipments, were *** in 2005 and *** in 2006; its operating margins

on its sales to ***, which also accounted for *** of its automotive sales, were *** in 2005 and *** in 2006. It has

mixed operating margins on automotive sales for the other ***. See AK Steel Supplemental Submission (December

4, 2006); U.S. Steel Supplemental Submission (November 16, 2006); and Mittal Supplemental Submission

(November 22, 2006).

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not agreed to contracts with adjustments for increases in raw material and energy costs.231 Thus, the

domestic industry has been caught in a cost/price squeeze.232 As discussed above, the automotive

producers explicitly indicated that if the orders were revoked that they would use the threat of

competition from subject imports to ensure that the domestic CORE steel producers priced

“competitively” and thus that this cost/price squeeze would continue.

Second, the CORE steel producers with substantial shares of their shipments devoted to the

automotive sector generally are experiencing worse financial performance than those not serving the

automotive sector. For example, the largest three domestic CORE steel producers with substantial

shipments to the automotive sector, and their share of production and operating margins:

Share of U.S.

production233

Share of Sales to the

Automotive Sector

2005 Operating Margin

*** *** *** ***

*** *** *** ***

*** *** *** ***

In response to a request from the Commission, these domestic producers provided the

Commission specific materials regarding their sales to the automotive industry which demonstrate the

differences in financial performance regarding sales to the automotive industry.234 For example, *** had

a positive overall operating margin of *** in 2005. However, its operating margin in 2005 for its sales to

the automotive industry, which accounted for *** of its total sales, was ***; in 2006, its automotive sales

operating margin was ***.235
 236 CR at CORE-III-5-6 and Table CORE-III-3; PR at CORE-III-4-5 and Table CORE-III-3. In line with plans to

upgrade and add this capacity, the industry’s capital expenditures were $428,147,000 in 2005, increasing from

$295,331,000 in 2000, and research and development expenses increased to $34,022,000 in 2005, from $15,950,000

in 2000. CR/PR at Table CORE-III-12.

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As the domestic CORE steel industry experienced positive financial performance in 2004 and

2005, plans for a number of investments were announced in 2005 and 2006, which will add 1.9 million

short tons of CORE steel capacity by 2008.236 However, these investments will provide for substantially

less additional capacity than the 6.7 million short tons that the industry’s positive performance warranted

undertaking in first review period.

We have concluded that revocation of the antidumping and countervailing duty orders with

respect to CORE steel from the six subject countries likely would lead to significant increases in the

volume of subject imports in the reasonably foreseeable future. Such increases in subject import volumes

will likely have the effect of exacerbating the declines in production, shipments, and market share, and

the increases in the cost of goods sold that the domestic industry sustained during the current period of

review.

Additionally, because of the likely aggressive pricing of the subject imports, the domestic

industry either will need to cut prices for the domestic like product or lose sales. Under either scenario,

the domestic industry’s revenues will likely decline significantly in light of the anticipated volume of

subject imports. This, in turn, will likely lead to declines in the industry’s operating performance.

We consequently find that revocation of the orders under review will likely have a significant

adverse impact on the domestic industry. We therefore determine that revocation of the antidumping and

countervailing duty orders on CORE steel from Australia, Canada, France, Germany, Japan, and Korea

will likely lead to continuation or recurrence of material injury to the domestic CORE steel industry

within a reasonably foreseeable time.