U.S. International Trade Commission

Publication 4458 March 2014

Washington, DC 20436

Carbon and Certain Alloy Steel Wire Rod 

from China

Investigation Nos. 701-TA-512 and 731-TA-1248 (Preliminary)
U.S. International Trade Commission

COMMISSIONERS 

 

Irving A. Williamson, Chairman 

Shara L. Aranoff 

Dean A. Pinkert 

David S. Johanson 

Meredith M. Broadbent 

F. Scott Kieff

Robert B. Koopman

Staff assigned

Address all communications to 

Secretary to the Commission 

United States International Trade Commission 

Washington, DC 20436

Director of Operations

Amy Sherman, Investigator 

Karl Tsuji, Industry Analyst 

Amelia Preece, Economist 

Charles Yost, Accountant 

Russell Duncan, Statistician 

Carolyn Holmes, Statistical Assistant 

Robin Turner, Attorney 

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

Washington, DC 20436 

www.usitc.gov

Publication 4458 March 2014

Carbon and Certain Alloy Steel Wire Rod 

from China

Investigation Nos. 701-TA-512 and 731-TA-1248 (Preliminary)

  

CONTENTS

Page

i

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

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

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

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

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

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

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

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

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

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

Prior investigations................................................................................................................ I‐4

Safeguard investigation......................................................................................................... I‐7

Nature and extent of alleged subsidies and sales at LTFV........................................................ I‐7

Alleged subsidies................................................................................................................... I‐7

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

The subject merchandise .......................................................................................................... I‐9

Commerce’s scope ................................................................................................................ I‐9

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

The product............................................................................................................................. I‐10

Description and uses ........................................................................................................... I‐10

Manufacturing process........................................................................................................ I‐13

Domestic like product issues................................................................................................... I‐18

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

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

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

Geographic distribution ........................................................................................................... II‐2
  

CONTENTS

Page

ii

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

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

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

U.S. demand ......................................................................................................................... II‐4

Substitutability issues............................................................................................................... II‐7

Lead times ............................................................................................................................ II‐7

Comparisons of domestic products, subject imports, and nonsubject imports.................. II‐8

Comparison of U.S.‐produced and imported wire rod......................................................... II‐8

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

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

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

U.S. producers’ shipments ...................................................................................................... III‐6

U.S. shipments by application ............................................................................................. III‐8

Captive consumption ............................................................................................................ III‐10

Transfers and sale of significant production of the domestic like product ...................... III‐10

First statutory criterion ..................................................................................................... III‐11

Second statutory criterion................................................................................................. III‐11

Third statutory criterion.................................................................................................... III‐11

U.S. producers’ inventories................................................................................................... III‐12

U.S. employment, wages, and productivity .......................................................................... III‐12

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

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

U.S. imports............................................................................................................................. IV‐3

U.S. imports from China and from nonsubject countries...................................................IV‐3

U.S. shipments of imports by application ...........................................................................IV‐6

Negligible imports .............................................................................................................IV‐10
  

CONTENTS

Page

iii

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

Apparent U.S. consumption and market shares...................................................................IV‐10

Total apparent U.S. consumption and market shares.......................................................IV‐10

Merchant market apparent U.S. consumption and market shares..................................IV‐12

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

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

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

U.S. inland transportation costs...........................................................................................V‐2

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

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

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

Price data..................................................................................................................................V‐4

Price trends.........................................................................................................................V‐10

Price comparisons ..............................................................................................................V‐11

Lost sales and lost revenue ....................................................................................................V‐12

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

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

Operations on wire rod ...........................................................................................................VI‐1

Total net sales quantity and value ......................................................................................VI‐3

Operating costs and expenses.............................................................................................VI‐4

Profitability ..........................................................................................................................VI‐5

Variance analysis.....................................................................................................................VI‐6

Capital expenditures and research and development expenses............................................VI‐8

Assets and return on investment............................................................................................VI‐8

Capital and investment ...........................................................................................................VI‐9

Actual negative effects......................................................................................................VI‐10

Anticipated negative effects..............................................................................................VI‐10
  

CONTENTS

Page

iv

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

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

U.S. inventories of imported merchandise ............................................................................VII‐4

U.S. importers’ current orders...............................................................................................VII‐5

Antidumping or countervailing duty orders in third‐country markets..................................VII‐6

Information on nonsubject countries....................................................................................VII‐6

Canada................................................................................................................................VII‐7

Other leading sources of wire rod to the United States....................................................VII‐7

Appendixes

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

B. List of conference witnesses............................................................................................. B‐1

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

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

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

UNITED STATES INTERNATIONAL TRADE COMMISSION

Investigation Nos. 701‐TA‐512 and 731‐TA‐1248 (Preliminary)

CARBON AND CERTAIN ALLOY STEEL WIRE ROD FROM CHINA

DETERMINATIONS

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

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

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

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

imports from China of carbon and certain alloy steel wire rod, provided for in subheadings

7213.91, 7213.99, 7227.20, and 7227.90 of the Harmonized Tariff Schedule of the United

States, that are alleged to be sold in the United States at less than fair value (“LTFV”), and

allegedly subsidized by the Government of China.2

COMMENCEMENT OF FINAL PHASE INVESTIGATIONS   

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

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

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

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

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

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

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

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

not enter a separate appearance for the final phase of the investigations. Industrial users, and,

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

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

duty investigations. The Secretary will prepare a public service list containing the names and

addresses of all persons, or their representatives, who are parties to the investigations.

   

 

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

CFR ' 207.2(f)).

      2 Commissioner Shara L. Aranoff did not participate in these investigations.
2

BACKGROUND

On January 31, 2014, a petition was filed with the Commission and Commerce by

ArcelorMittal USA LLC, Chicago, IL; Charter Steel, Saukville, WI; Evraz Rocky Mountain Steel,3

Pueblo, CO; Gerdau Ameristeel US Inc., Tampa, FL; Keystone Consolidated Industries, Inc.,

Dallas, TX; and Nucor Corporation, Charlotte, NC, alleging that an industry in the United States

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

imports of carbon and certain alloy steel wire rod from China. Accordingly, effective January 31,

2014, the Commission instituted countervailing duty investigation No. 701‐TA‐512 and

antidumping duty investigation No. 731‐TA‐1248 (Preliminary).

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

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

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

in the Federal Register of February 6, 2014 (79 FR 7225). The conference was held in

Washington, DC, on February 21, 2014, and all persons who requested the opportunity were

permitted to appear in person or by counsel.4

 

      3 On January 31, 2014, Evraz Rocky Mountain Steel became Evraz Pueblo.

      4 The Commission has the authority to toll statutory deadlines during a period when the

government is closed.    Because the Commission was closed on February 13, March 3, and March 17,

2014 due to inclement weather in Washington, DC, the statutory deadline may be tolled by up to three

days.
3

Views of the Commission

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

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

imports of carbon and certain alloy steel wire rod (“wire rod”) from China that are allegedly

sold in the United States at less than fair value and that are allegedly subsidized by the

Government of China.1

I. The Legal Standard for Preliminary Determinations  

The legal standard for preliminary antidumping and countervailing duty determinations

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

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

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

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

  In applying this

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

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

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

investigation.”3

II. Background  

The petitions in these investigations were filed on January 31, 2014 by ArcelorMittal

USA LLC (“AMUSA”), Charter Steel (“Charter”), Evraz Pueblo (“Evraz”), Gerdau Ameristeel US

Inc. (“Gerdau”), Keystone Consolidated Industries, Inc. (“Keystone”), and Nucor Corporation

(“Nucor”) (collectively, “Petitioners”).  Each of these firms is a domestic producer of carbon and

certain alloy steel wire rod (“wire rod”).  Petitioners appeared at the staff conference and filed

postconference briefs with the Commission.4  Two Respondents that oppose imposition of

duties appeared at the conference and each submitted a postconference brief ‐‐ The American

Wire Producers Association (“AWPA”), an association of U.S. purchasers of wire rod; and

Lincoln Electric Co., a U.S. purchaser of wire rod.

                                                        1 Commissioner Shara L. Aranoff did not participate in these investigations. 2 19 U.S.C. §§ 1671b(a), 1673b(a) (2000); see also American Lamb Co. v. United States, 785 F.2d 994,

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

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

unfairly traded imports.

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

1535, 1543 (Fed. Cir. 1994). 4 One brief was jointly filed by AMUSA, Charter, Evraz, Gerdau, and Keystone (collectively, “ACEGK

Group”), and a second brief was filed by Nucor.
4

In these investigations, U.S. industry data are based on the questionnaire responses of

10 U.S. producers, accounting for all U.S. production of wire rod during the period of

investigation.5

  U.S. import data are based on official Commerce import statistics and

questionnaire responses from 13 U.S. importers, accounting for 97.5 percent of wire rod

imports from China and 40.8 percent of wire rod imports from nonsubject sources during 2011‐

13.6

  The Commission issued foreign producers’ or exporters’ questionnaires to 48 wire rod

firms in China and received no questionnaire responses from those firms.7

III. Domestic Like Product

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

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

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

“industry.”8  Section 771(4)(A) of the Tariff Act of 1930, as amended (“the Tariff Act”), defines

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

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

proportion of the total domestic production of the product.”9  In turn, the Tariff Act defines

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

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

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

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

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

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

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

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

                                                        5 Confidential Report (“CR”) at I‐4; Public Report (“PR”) at I‐3.

6 CR at I‐4 and I‐5; PR at I‐3. 7 CR at VII‐4; PR at VII‐3.

8 19 U.S.C. § 1677(4)(A).

9 19 U.S.C. § 1677(4)(A).

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

of Commerce, 36 F. Supp. 2d 380, 383 (Ct. Int’l Trade 1998); Nippon Steel Corp. v. United States, 19 CIT

450, 455 (1995); Torrington Co. v. United States, 747 F. Supp. 744, 749 n.3 (Ct. Int’l Trade 1990), aff’d,

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

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

factors including the following:  (1) physical characteristics and uses; (2) interchangeability; (3) channels

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

facilities, production processes, and production employees; and, where appropriate, (6) price.  See

Nippon, 19 CIT at 455 n.4; Timken Co. v. United States, 913 F. Supp. 580, 584 (Ct. Int’l Trade 1996). 12 See, e.g., S. Rep. No. 96‐249 at 90‐91 (1979).

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

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

(Continued...)
5

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

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

product is like the imported articles Commerce has identified.15

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

of these investigations as follows:

The merchandise covered by these investigations are

certain hot‐rolled products of carbon steel and alloy steel, in coils,

of approximately round cross section, less than 19.00 mm in

actual solid cross‐sectional diameter.  Specifically excluded are

steel products possessing the above‐noted physical characteristics

and meeting the Harmonized Tariff Schedule of the United States

(HTSUS) definitions for (a) stainless steel; (b) tool steel; (c) high

nickel steel; (d) ball bearing steel; or (e) concrete reinforcing bars

and rods.  Also excluded are free cutting steel (also known as free

machining steel) products (i.e., products that contain by weight

one or more of the following elements: 0.1 percent or more of

lead, 0.05 percent or more of bismuth, 0.08 percent or more of

sulfur, more than 0.04 percent of phosphorus, more than 0.05

percent of selenium, or more than 0.01 percent of tellurium).  All

products meeting the physical description of subject merchandise

that are not specifically excluded are included in this scope.16

The scope of these investigations differs from the scope of the existing orders on wire

rod from Brazil, India, Mexico, Moldova, Trinidad and Tobago, and Ukraine; specifically, this

                                                                                                                                                                              

(...Continued)

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

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

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

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

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

States, 688 F. Supp. 639, 644 (Ct. Int’l Trade 1988), aff’d, 865 F.3d 240 (Fed. Cir.), cert. denied, 492 U.S.

919 (1989).

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

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

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

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

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

16 Carbon and Certain Alloy Steel Wire Rod From the People’s Republic of China: Initiation of

Antidumping Duty Investigation, 79 Fed. Reg. 11077, 11082 (Feb. 27, 2014); Carbon and Certain Alloy

Steel Wire Rod From the People’s Republic of China: Initiation of Countervailing Duty Investigation, 79 FR

11085, 11088 (Feb. 27, 2014).
6

scope includes grade 1080 tire cord quality and grade 1080 tire bead quality wire rod and does

not reference a lower diameter range for wire rod.17  Nonetheless, in each of the prior

Commission investigations and reviews involving wire rod, the Commission has defined a single

domestic like product, which includes grade 1080 tire cord and tire bead quality products, and

essentially is coextensive with the scope of these investigations.18

As discussed below, we define a single domestic like product consisting of all steel wire

rod, coextensive with the scope of investigation, on the basis that there are no clear dividing

lines among the various types of steel wire rod.  No party in these investigations has argued

that the Commission should define the domestic like product in a manner different from the

definitions in prior wire rod investigations and reviews.19   Additionally, as discussed below, the

information in the record in these investigations concerning pertinent product characteristics

does not justify any different definition of the domestic like product.

Physical Characteristics and Uses.  All wire rod is an intermediate circular, hot‐rolled

steel product and is typically sold in irregularly wound coils.20  Wire rod is used primarily for

subsequent drawing and finishing into wire and wire products, but is also used to make

fasteners and other products.  Industrial quality wire rod, which accounts for the majority of

wire rod consumed in the United States, generally is manufactured from low‐ or medium‐low‐

carbon steel and primarily is drawn into industrial (or standard) quality wire that, in turn, is

used to manufacture such products as nails, reinforcing wire mesh, and chain link fence.  Other

relatively large‐volume quantities of wire rod consumed in the United States include high‐ and

medium‐high carbon and cold‐heading quality, which are drawn into wire for such products as

strand, upholstery spring, mechanical spring, rope, screens, and pre‐stressed concrete wire.  

                                                       17 Compare Carbon and Certain Alloy Steel Wire Rod From Brazil, Indonesia, Mexico, Moldova,

Trinidad and Tobago, and Ukraine: Final Results of the Expedited Second Sunset Reviews of the

Antidumping Duty Orders, 78 Fed. Reg. 63450‐63451 (Oct. 24, 2013).  In the 2006 investigations

involving wire rod from China, Germany, and Turkey, which were terminated after the Commission

reached preliminary negative determinations, the scope of investigation also included 1080 grade tire

cord quality wire rod and 1080 grade tire bead quality wire rod, but referenced a lower diameter range

of 4.75 mm (in contrast to the lower diameter range of 5.00 mm contained in the scope of the existing

orders).  Carbon and Certain Alloy Steel Wire Rod from China, Germany, and Turkey, Inv. Nos. 731‐TA‐

1099‐1101 (Preliminary), USITC Pub. 3832 at 8 (Jan. 2006) (“2006 Preliminary Determinations”).

18 Carbon and Certain Alloy Steel Wire Rod from Brazil, Canada, Germany, Indonesia, Mexico,

Moldova, Trinidad and Tobago, Turkey, and Ukraine, USITC Pub. 3546 at 6‐12 (Oct. 2002) (“2002 Final

Determinations”); 2006 Preliminary Determinations, USITC Pub. 3832 at 7‐11 (Jan. 2006); Carbon and

Certain Alloy Steel Wire Rod from Brazil, Canada, Indonesia, Mexico, Moldova, Trinidad and Tobago, and

Ukraine, USITC Pub. 4014 at 6‐8 (June 2008) (“2008 Review Determinations”).

19 ACEGK’s Postconference Brief at 3‐6; Conf. Tr. at 99 (AWPA has indicated that it “accept[s] the

Commission’s previous like‐product definitions and we accept the like‐product definition proffered in

this proceeding as well.”).  Lincoln Electric has urged the Petitioners to remove welding quality wire rod

from the scope of investigation and has indicated that it will defer addressing the issue of like product

until any final investigations.  Conf. Tr. at 100‐02.

20 CR at I‐12 – I‐15; PR at I‐10 – I‐12.
7

Within the end‐use categories of wire rod, there is an overlap of metallurgical qualities,

chemistries, and physical characteristics.21  Thus, there is no clear demarcation between low‐

end and high‐end wire rod products, but rather a range of at least 11 major types of wire rod

products.22

Manufacturing Facilities, Production Processes and Employees.  All wire rod shares a

basic manufacturing process consisting of steelmaking, casting, hot‐rolling, and coiling and

cooling.23  Domestic producers manufacture various types of wire rod on essentially the same

equipment, in the same facilities, and with the same production personnel.  Changes in

chemical composition, alloying elements and other raw materials, stand fittings, and cooling

speed, as opposed to changes in the production process, determine the quality of the wire rod

produced.24

Channels of Distribution.  The majority of all domestically produced wire rod is sold to

end users.25

Interchangeability.  While there is an overlap of physical characteristics and end uses,

wire rod used for industrial quality applications may not meet the specifications required for

specialized applications.26  For industrial quality grades, products of the same specification are

highly substitutable even if they are not identical, although there may be a need for retooling to

adjust for small differences.27  For specialty grades, differences between specifications and

suppliers may limit the degree of substitution.28  

Producer and Customer Perceptions.  Domestic producers generally produce both

industrial quality and higher quality types of wire rod.29  Customers purchase different types of

wire rod for the specific end‐use applications across the range of products.30

Price.  Prices for wire rod range from lower prices for industrial quality to higher prices

for higher quality and more specialized wire rod.31

                                                       21 CR at I‐12 – I‐15; PR at I‐10 – I‐12. 22 CR/PR at Table I‐2.

23 CR at I‐15 – I‐22; PR at I‐13 – I‐18.

24 CR at I‐21; PR at I‐17.

25 CR/PR at Table II‐1.

26 CR at III‐10 and III‐12; PR at III‐8.

27 CR at II‐10 and II‐11; PR at II‐7.

28 CR at II‐10 and II‐11; PR at II‐7.

29 CR/PR at Table III‐6.

30 CR at III‐10; PR at III‐8.

31 See 2002 Final Determinations, USITC Pub. 3546 at 12 (“There is a continuum of prices for wire rod,

with industrial grades at the lower end and higher carbon, specialty grades at the higher end.”).
8

Conclusion.   All types of wire rod share certain basic physical properties, are generally

manufactured in the same domestic facilities by the same employees using the same processes,

are sold primarily to end users, and are produced by generally all domestic producers.  Limited

interchangeability in some end uses and price differences are consistent with a wide range of

wire rod products.  We find that all wire rod products of the type described in the scope of

investigation comprise a single domestic like product.

IV. Domestic Industry  

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

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

a major proportion of the total domestic production of the product.”32  In defining the domestic

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

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

the domestic merchant market.

There are no domestic industry issues in these investigations.  No U.S. producers are

related to exporters or U.S. importers of subject merchandise or directly imported or purchased

wire rod from China during the period of investigation.  We define a single domestic industry

encompassing all U.S. producers of wire rod.

Reasonable Indication of Material Injury by Reason of Subject Imports33 V.   

A. Legal Standard

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

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

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

investigation.34  In making this determination, the Commission must consider the volume of

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

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

operations.35  The statute defines “material injury” as “harm which is not inconsequential,

                                                        32 19 U.S.C. § 1677(4)(A).

33 Negligibility under 19 U.S.C. § 1677(24) is not an issue in these investigations.  Based on official

import statistics, market shares for subject imports from China exceed the requisite 3 percent statutory

negligibility threshold.  For the 12‐month period of January‐December 2013, imports from China

accounted for 36.2 percent of total imports of wire rod, as measured by quantity.   CR/PR at IV‐10.

34 19 U.S.C. §§ 1671b(a), 1673b(a).

35 19 U.S.C. § 1677(7)(B).  The Commission “may consider such other economic factors as are relevant

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

determination.”  19 U.S.C. § 1677(7)(B).
9

immaterial, or unimportant.”36  In assessing whether there is a reasonable indication that the

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

economic factors that bear on the state of the industry in the United States.37  No single factor

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

and conditions of competition that are distinctive to the affected industry.”38

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

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

traded imports,39 it does not define the phrase “by reason of,” indicating that this aspect of the

injury analysis is left to the Commission’s reasonable exercise of its discretion.40  In identifying a

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

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

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

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

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

merely a temporal, nexus between subject imports and material injury.41

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

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

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

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

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

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

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

injury threshold.42  In performing its examination, however, the Commission need not isolate

                                                       36 19 U.S.C. § 1677(7)(A).

37 19 U.S.C. § 1677(7)(C)(iii).

38 19 U.S.C. § 1677(7)(C)(iii).

39 19 U.S.C. §§ 1671b(a), 1673b(a).

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

not ‘compel the commissioners’ to employ {a particular methodology}.”), aff’g 944 F. Supp. 943, 951 (Ct.

Int’l Trade 1996). 41 The Federal Circuit, in addressing the causation standard of the statute, has observed that “{a}s

long as its effects are not merely incidental, tangential, or trivial, the foreign product sold at less than

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

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

2008), in which the Federal Circuit, quoting Gerald Metals, Inc. v. United States, 132 F.3d 716, 722 (Fed.

Cir. 1997), stated that “this court requires evidence in the record ‘to show that the harm occurred “by

reason of” the LTFV imports, not by reason of a minimal or tangential contribution to material harm

caused by LTFV goods.’”  See also Nippon Steel Corp. v. United States, 458 F.3d 1345, 1357 (Fed. Cir.

2006); Taiwan Semiconductor Industry Ass’n v. USITC, 266 F.3d 1339, 1345 (Fed. Cir. 2001).

42 Statement of Administrative Action (“SAA”), H.R. Rep. 103‐316, Vol. I at 851‐52 (1994) (“{T}he

Commission must examine other factors to ensure that it is not attributing injury from other sources to

the subject imports.”); S. Rep. 96‐249 at 75 (1979) (the Commission “will consider information which

indicates that harm is caused by factors other than less‐than‐fair‐value imports.”); H.R. Rep. 96‐317 at

(Continued...)
10

the injury caused by other factors from injury caused by unfairly traded imports.43  Nor does the

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

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

as nonsubject imports, which may be contributing to overall injury to an industry.44  It is clear

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

determination.45

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

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

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

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

the subject imports.”46 47  Indeed, the Federal Circuit has examined and affirmed various

Commission methodologies and has disavowed “rigid adherence to a specific formula.”48

                                                                                                                                                                              

(...Continued)

47 (1979) (“in examining the overall injury being experienced by a domestic industry, the ITC will take

into account evidence presented to it which demonstrates that the harm attributed by the petitioner to

the subsidized or dumped imports is attributable to such other factors;” those factors include “the

volume and prices of nonsubsidized imports or imports sold at fair value, contraction in demand or

changes in patterns of consumption, trade restrictive practices of and competition between the foreign

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

domestic market prices.”). 44 S. Rep. 96‐249 at 74‐75; H.R. Rep. 96‐317 at 47.

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

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

principal cause of injury.”).

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

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

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

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

States Steel Group v. United States, 96 F.3d 1352, 1362 (Fed. Cir. 1996) and S. Rep. 96‐249 at 75.  
11

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

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

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

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

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

market presence of price‐competitive nonsubject imports.49  The additional

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

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

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

Trinidad and Tobago determination that underlies the Mittal Steel litigation.

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

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

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

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

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

subject imports.50  Accordingly, we do not consider ourselves required to apply the

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

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

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

                                                                                                                                                                              

(...Continued) 47 Commissioner Pinkert does not join this paragraph or the following three paragraphs.  He points

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

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

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

Mittal Steel explains as follows:

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

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

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

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

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

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

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

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

its conclusion with respect to that factor.   

542 F.3d at 878.    48 Nucor Corp. v. United States, 414 F.3d 1331, 1336, 1341 (Fed. Cir. 2005); see also Mittal Steel, 542

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

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

49 Mittal Steel, 542 F.3d at 875‐79.

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

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

attribution analysis).
12

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

adequate explanation, to non‐attribution issues when it performs its causation analysis.51

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

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

evidence standard.52  Congress has delegated this factual finding to the Commission because of

the agency’s institutional expertise in resolving injury issues.53

B. Conditions of Competition and the Business Cycle

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

reasonable indication of material injury by reason of subject imports.

1. Captive Production

We consider whether the statutory captive production provision requires our primary

focus to be on the merchant market when we assess market share and factors affecting the

financial performance of the domestic industry.54   While none of the parties argue that the

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

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

nonsubject countries that accounted for substantial shares of U.S. imports of subject merchandise (if, in

fact, there were large nonsubject import suppliers).  In order to provide a more complete record for the

Commission’s causation analysis, these requests typically seek information on capacity, production, and

shipments of the product under investigation in the major source countries that export to the United

States.  The Commission plans to continue utilizing published or requested information in final phase

investigations in which there are substantial levels of nonsubject imports.

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

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

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

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

difficult, and is a matter for the judgment of the ITC.”).    54 The captive production provision, 19 U.S.C. § 1677(7)(C)(iv), which was added to the statute by the

Uruguay Round Agreements Act, provides:

(iv) CAPTIVE PRODUCTION – If domestic producers internally transfer significant production of the

domestic like product for the production of a downstream article and sell significant production of the

domestic like product in the merchant market, and the Commission finds that‐  

(I) the domestic like product produced that is internally transferred for processing

into

that downstream article does not enter the merchant market for the domestic like

product,

(II) the domestic like product is the predominant material input in the production of

that

downstream article, and

(III) the production of the domestic like product sold in the merchant market is not

(Continued...)
13

captive production provision applies, Petitioners urge the Commission to consider the

merchant market as a significant condition of competition in the industry.55

The domestic industry internally transferred 1.0 billion short tons of its U.S. shipments

of wire rod in the manufacture of various downstream products in 2013.56  Internal transfers

accounted for about *** of the reported volume of U.S. producers’ shipments during the period

of investigation, increasing steadily from 23.8 percent in 2011 to 27.7 percent in 2013.57  

Commercial (merchant market) shipments accounted for virtually all of the balance of their

shipments.58  We consequently determine that the threshold criterion for application of the

captive production provision has been met.

While the first59 and second60 statutory criteria arguably have been met, we conclude

that the third statutory criterion is not satisfied.  There are many downstream products

produced from wire rod by domestic producers and merchant market purchasers alike.  Across

all end uses, the most common product reported for both internal transfers and merchant

market purchases was wire, followed by wire mesh.  It appears that there is a substantial

                                                                                                                                                                              

(...Continued)

generally used in the production of that downstream article, then the Commission, in

determining market share and the factors affecting financial performance set forth in

clause (iii), shall focus primarily on the merchant market for the domestic like product.

The SAA indicates that where a domestic like product is transferred internally for the production of

another article coming within the definition of the domestic like product, such transfers do not

constitute internal transfers for the production of a “downstream article” for purposes of the captive

production provision.  SAA at 853. 55 Nucor’s Postconference Brief at 7‐9 and Exhibit 1 at 10‐14; ACEGK’s Postconference Brief at 12‐13.

56 Calculated from CR/PR at Table III‐5.  The definition of an “internal transfer” for purposes of the

captive production provision was addressed in Bethlehem Steel Corp. v. United States, 294 F. Supp. 2d

1359, 1364‐68 (Ct. Int’l Trade 2003), which appeared to consider a “sale” to occur (and thus for the

shipment to be sold in the merchant market as opposed to an internal transfer) when there was a

transfer of title, payment of consideration, and transfer of title to an unrelated party.  294 F. Supp. 2d at

1365.  Otherwise, the shipment is an internal transfer.  Therefore, we consider internal transfers to

include internal consumption and transfers to related firms. 57 Calculated from CR/PR at Table III‐5.

58 CR/PR at Table III‐5.  U.S. producers’ commercial shipments as a share of their total shipments

declined steadily from 75.3 percent in 2011 to 71.6 percent in 2013.  Export shipments accounted for

only 0.7 to 0.9 percent of total shipments during the period of investigation.  Id. 59 The record indicates that the vast majority of internal transfers by domestic producers are used in

the production of downstream products and do not enter the merchant market.  CR at III‐14; PR at III‐

11.  While *** reported diverting *** short tons of wire rod intended for internal consumption to the

merchant market for the production of ***, these shipments represented only *** of internal transfers

in 2013.  CR at III‐14 and n.14; PR at III‐11 and n.14.

60 The cost of wire rod accounts for a large share of the cost of finished products.  It reportedly

accounts for 70‐80 percent of the finished cost of the majority of downstream products (e.g., mesh,

industrial wire, welded wire reinforcement, drawn wire, and fencing products), although cost shares

vary widely due to the wide range of products produced from wire rod.  CR at II‐10 and III‐14; PR at II‐6‐7

and III‐11.
14

overlap in end uses for product that is internally transferred and for product sold in the

merchant market.61  We nonetheless consider as a condition of competition that a significant

share of domestic production is captively consumed and examine both merchant market data

and data for the total U.S. market in our analysis.

2. Demand Conditions

Wire rod is used as an intermediate product.  Most wire rod is sold, or internally

transferred, to wire drawers that produce a wide variety of wire products.62  Consequently,

demand for wire rod depends on the demand for these many downstream products.  Parties

reported that the construction, automotive, energy, and agriculture industries account for the

majority of demand for wire rod.63

Apparent U.S. consumption of wire rod fluctuated but experienced modest growth,

increasing by 3.5 percent between 2011 to 2013.64  Apparent U.S. consumption increased from

5.13 million short tons in 2011 to 5.33 million short tons in 2012 and then declined slightly to

5.31 million short tons in 2013.65  The parties appear to agree that demand will increase at least

gradually in 2014.66

3. Supply Conditions

The domestic wire rod industry is the largest supplier of wire rod to the U.S. market,

although its share of apparent U.S. consumption declined from 75.6 percent in 2011 to 67.8

percent in 2013.67  There are ten U.S. producers of wire rod, with seven of these firms internally

transferring wire rod to produce downstream products.68  All U.S. producers produce industrial

quality wire rod; each specialty quality product is made by several different domestic

producers.69  The capacity of the domestic wire rod industry declined by 1.9 percent between

2011 and 2013, but still was at a level near apparent U.S. consumption throughout the period

of investigation.70  Most U.S. producers reported that they are not operating at full capacity due

to market conditions and that import competition limits their ability to produce more wire

                                                       61  CR at II‐6 and II‐7; PR at II‐5.  U.S. producers also reported internal transfers and merchant sales for

such other products as tire cord/bead, CF bar/pencil rod, fabricated wire products, and staples, nails and

fasteners.  See also CR/PR at Table III‐6.

62 CR at II‐6; PR at II‐4.

63 CR/PR at II‐1.

64 CR/PR at Table C‐1.

65 CR/PR at Table IV‐4.

66 ACEGK’s Postconference Brief at 7‐8; Nucor’s Postconference Brief at 3‐4; Conf. Tr. at 81 (AWPA’s

Executive Director testified that most of the members of the AWPA anticipate that demand for wire rod

will increase in 2014.).

67 CR/PR at Table C‐1.

68 CR at III‐13 and Table III‐1; PR at III‐10 and Table III‐1.

69 CR/PR at Table III‐6.

70 CR/PR at Tables III‐3 and C‐1.
15

rod.71   A number of U.S. producers reported production curtailments, although a few domestic

producers have expanded or made improvements to their production facilities during the

period of investigation.72

Nonsubject countries are the next largest suppliers to the U.S. wire rod market after the

domestic industry.  Their share of apparent U.S. consumption declined from 24.4 percent in

2011 to 20.5 percent in 2013.73  Canada was the largest individual source of imported wire rod

in 2011 and 2012 and the second largest after subject imports from China in 2013.74  U.S.

antidumping duty orders are in effect on wire rod from Brazil, Indonesia, Mexico, Moldova,

Trinidad and Tobago, and Ukraine, and a U.S. countervailing duty order is in effect on wire rod

from Brazil.75

By 2013, subject imports from China became the largest individual import source of

supply to the U.S. market.  The share of apparent U.S. consumption held by subject imports

increased dramatically from less than 0.05 percent in 2011 to 11.7 percent in 2013.76  Chinese

export tax policies regarding wire rod appear to have played a role in this increase, just as prior

changes in such policies after 2006 resulted in substantial declines in subject imports.77 78

4. Substitutability

Wire rod sold in the United States is categorized by quality according to end use, with 11

major types of wire rod identified by the Iron and Steel Society.79  The Commission requested

market participants to classify their shipments into seven different categories.  The domestic

industry produces wire rod in each of the seven categories.  The three largest categories for the

domestic industry are low/medium‐low carbon industrial/standard quality (accounting for 49.1

percent of U.S. producers’ U.S. shipments in 2013), followed by high/medium‐high carbon

industrial/standard quality (27.9 percent of shipments) and cold heading quality (CHQ) (*** of

shipments).80  While subject imports were reported for only four of the seven categories, the

                                                       71 CR at III‐5; PR at III‐4.

72 CR/PR at Table III‐2.  The firms reporting ***.  CR/PR at Table III‐2.   ***.  CR/PR at Table III‐3, Note.

73 CR/PR at Table IV‐4. 74 CR/PR at Table IV‐3. 75 CR at I‐5; PR at I‐4.

76 CR/PR at Table IV‐4. 77 2008 Review Determinations, USITC Pub. 4014 at 27.  At the conference, AWPA’s representative

also stated that “it’s fair to say that the tax policies in China have had a great effect on the U.S. market

both in the wire rod industry and a phenomenal impact on the downstream wire and wire products

industry and that the Chinese use of export taxes and rebates have definitely had deleterious effects on

both the rod and the U.S. wire and wire products industry particularly when you consider how many

more of the rod mills now have integrated wire and wire product production than they did even as

recently as 2005.”  Conf. Tr. at 104.

78 AWPA contends that maintaining multiple sources of supply for wire rod is particularly important

for the downstream wire producers when demand is increasing.  AWPA’s Postconference Brief at 6.

79 CR at I‐13 and Table I‐1; PR at I‐11 and PR at Table I‐1.

80 CR/PR at Table III‐6.
16

largest two categories for subject imports are low/medium‐low carbon industrial/standard

quality (accounting for 63.0 percent of U.S. importers’ U.S. shipments of subject imports in

2013), followed by high/medium‐high carbon industrial/standard quality (*** of shipments).81  

Nonsubject imports were reported for six of the seven categories; the three largest categories

for nonsubject imports are welding (*** of U.S. importers’ U.S. shipments of nonsubject

imports in 2013), CHQ (***), and high/medium‐high carbon industrial/standard quality (***).82  

Therefore, while there is substantial overlap between the categories of wire rod supplied by

domestic producers and subject imports, nonsubject imports focus on more specialized

categories of wire rod that overlap with domestic product but overlap with subject imports only

to a more limited degree.

Domestically produced wire rod and subject imports of the same type, particularly in the

industrial quality grades, tend to be highly substitutable.83  For specialty grades, however, not

all sources can produce each product, and there even may be differences in wire rod with the

same specifications that may limit the degree of substitution.84

5. Other Conditions of Competition

In the United States, all steel for wire rod production uses minimill technology to melt

ferrous scrap and other raw materials in an electric arc furnace.85  As a result, the principal

inputs used in the U.S. production of wire rod are billets (produced from steel scrap), natural

gas, and electricity.86  The price of steel scrap fluctuated and overall decreased very slightly

between 2011 and 2013, and then increased in 2014.87  Energy prices fluctuated between 2011

and 2013, with an overall decline in natural gas prices and no net change in electricity prices.88

Most market participants that responded to the Commission questionnaires reported

that worldwide demand for wire rod has fluctuated, with some importers reporting that

demand outside the United States had increased.89

C. Volume of Subject Imports  

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

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

absolute terms or relative to production or consumption in the United States, is significant.”90

                                                       81 CR/PR at Table IV‐6.

82 CR/PR at Table IV‐6.

83 CR at II‐10‐11; PR at II‐7.

84 CR at II‐11; PR at II‐7.

85 CR at I‐16; PR at I‐13 – I‐14.

86 CR/PR at V‐1.

87 CR/PR at V‐1 and Figure V‐1.

88 CR/PR at Table V‐1.

89 CR/PR at Table II‐3.

90 19 U.S.C. § 1677(7)(C)(i).
17

Subject imports were virtually nonexistent at the beginning of the period of

investigation, but their volume increased dramatically ‐‐ by 429,778 percent ‐‐ between 2011

and 2013.91  The volume of subject imports rose from 144 short tons in 2011 to 241,938 short

tons in 2012, then to 618,818 short tons in 2013.92  Subject import market share rose from less

than 0.05 percent in 2011 to 4.5 percent in 2012 and 11.7 percent in 2013.93  Despite modest

growth in apparent U.S. consumption from 2011 to 2013,94 U.S. shipments declined each year,

the domestic industry lost market share,95 and subject imports experienced significant gains.96

  For purposes of these preliminary determinations, we find that the volume of subject

imports and the increase in that volume are significant both in absolute terms and relative to

consumption and production in the United States.

D. Price Effects of the Subject Imports

Section 771(7)(C)(ii) of the Tariff Act provides that, in evaluating the price effects of

subject imports, the Commission shall consider whether –  

(I) there has been significant price underselling by the imported merchandise as

compared with the price of domestic like products of the United States, and  

(II) the effect of imports of such merchandise otherwise depresses prices to a

significant degree or prevents price increases, which otherwise would have

occurred, to a significant degree.97

The record in these preliminary phase investigations indicates that subject

imports and domestically produced wire rod of the same type are highly substitutable98  

and that price is at least a moderately important factor in purchasing decisions.99  Moreover, as

discussed above, both the domestic like product and the subject imports tend to be

                                                       91 CR/PR at Table C‐1.

92 CR/PR at Tables IV‐2 and C‐1.

93 CR/PR at Tables IV‐4 and C‐1.  Subject import share of the merchant market rose from less than

0.05 percent in 2011 to 5.6 percent in 2012 and 14.4 percent in 2013.  Id. at Table IV‐5.

94 Apparent U.S. consumption fluctuated annually and increased overall from 5.1 million short tons in

2011 to 5.3 million short tons in 2013.  CR/PR at Tables IV‐4 and C‐1.

95 The domestic industry=s market share, as measured by quantity, fell from 75.6 percent in 2011 to

71.5 percent in 2012 and 67.8 percent in 2013.  CR/PR at Tables IV‐4 and C‐1.  The domestic industry=s

share of the merchant market, as measured by quantity, fell from 70.1 percent in 2011 to 65.0 percent

in 2012 and 60.3 percent in 2013.  CR/PR at Tables IV‐5.

96 The ratio of subject imports to U.S. production increased significantly between 2011 and 2013.  It

was less than 0.05 percent in 2011, 6.2 percent in 2012 and 16.9 percent in 2013.  CR/PR at Table IV‐2.

97 19 U.S.C. § 1677(7)(C)(ii).

98 CR at II‐10; PR at II‐7.

99 In the 2008 Review Determinations, price was characterized as a “very important” purchasing

factor by 38 out of 41 purchasers.   2008 Review Determinations, USITC Pub. 4014 at Table II‐4.
18

concentrated in the industrial quality grades.  Thus, for purchasers of industrial quality grades

of wire rod, prices are particularly important in purchasing decisions.

Most U.S. producers and importers set prices on a transaction‐by‐transaction basis.100  

Wire rod sales in the United States typically involve either short term contracts or spot sales.101

The Commission collected quarterly pricing data on five wire rod products—three

industrial quality products, a mesh quality product, and a product for spring applications.102  

Nine U.S. producers, nine importers of subject wire rod from China, and one importer of wire

rod from Canada provided usable pricing data for sales of the requested products, although not

all firms reported pricing for all products for all quarters.  Pricing data reported by these firms

accounted for 45.5 percent of U.S. producers’ commercial shipments of wire rod and 85.9

percent of U.S. shipments of imports from China.103

The pricing data show that subject imports undersold the domestic like product in 36 of

41, or 87.8 percent, of total comparisons.104  The margins of underselling ranged from 0.2

percent to 17.5 percent, and the average margin of underselling was 7.9 percent.105  Given the

importance of price in purchasing decisions, particularly for industrial grades, we find this

underselling to be significant for purposes of these preliminary determinations.

Prices for the domestic like product and the subject imports fluctuated within a narrow

range, with a discernible downward trend from 2011 to 2013.106  The pricing data also show

some indication that prices for the domestic like product and the subject imports moved in

concert and that price changes for the subject imports affected prices for the domestic like

product.  Thus, we find evidence of price depression.

Moreover, we find evidence that subject imports have had price suppressing effects

during the period.  Over the period of investigation, the domestic industry’s ratio of cost of

goods sold (“COGS”) to net sales was high and increased each year.107  There is evidence on the

record that prices for raw materials were increasing during the latter part of the period of

investigation, although the parties do not agree on the domestic industry’s success in raising

prices during this period.108  The Commission staff was able to confirm some of the alleged lost

sales during the preliminary phase of these investigations.109

                                                       100 CR/PR at Table V‐2.

101 CR/PR at Table V‐3.

102 CR at V‐5 and V‐6; PR at V‐4.

103 CR at V‐6; PR at V‐4.

104 CR/PR at Table V‐10.

105 CR/PR at Table V‐10.

106 CR/PR at Table V‐9.  Price decreases for U.S.–produced wire rod ranged from 5.3 percent to 10.6

percent during 2011‐2013, while prices decreases for subject wire rod imports from China ranged from

***.  Id. 107 The ratio of COGS to net sales increased from 90.0 percent in 2011 to 91.7 percent in 2012 and

92.4 percent in 2013.  CR/PR at Table VI‐1.    108 Petitioners maintained that domestic transaction prices for wire rod fell even when scrap prices

were increasing in late 2013, which demonstrates that domestic producers have been unable to raise

prices to recover increases in the cost of raw materials.  ACEGK’s Postconference Brief at 18‐19; Nucor’s

Postconference Brief at 19.  AWPA, however, claimed that during 2013 and continuing into 2014, the

(Continued...)
19

Accordingly, based on the record in the preliminary phase of these investigations, we

find that there has been significant price underselling of the domestic like product by the

subject imports and evidence that the substantially increasing volume of subject imports has

depressed and suppressed prices for the domestic like product.

E. Impact of the Subject Imports110

Section 771(7)(C)(iii) of the Tariff Act provides that the Commission, in examining the

impact of the subject imports on the domestic industry, “shall evaluate all relevant economic

factors which have a bearing on the state of the industry.”  These factors include output, sales,

inventories, capacity utilization, market share, employment, wages, productivity, profits, cash

flow, return on investment, ability to raise capital, research and development, and factors

affecting domestic prices.  No single factor is dispositive and all relevant factors are considered

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

the affected industry.”

Over the period of investigation, virtually all trade and financial indicators for the

domestic industry declined, in spite of increases in apparent U.S. consumption.  The domestic

industry’s capacity, which declined each year, fell by 1.9 percent from 2011 to 2013.111  

Production declined from 2011 to 2013 and was 6.5 percent lower in 2013 than in 2011.112  

Capacity utilization fluctuated from year to year and declined overall from 2011 to 2013.113

The domestic industry’s U.S. shipments, both on a total basis and on a commercial

(merchant market) basis, showed patterns similar to those for production.  Total U.S. shipments

declined during the period of investigation and were 7.1 percent lower in 2013 than in 2011.  

Commercial U.S. shipments followed the same annual trends.114  Inventories relative to U.S.

                                                                                                                                                                              

(...Continued)

domestic producers of steel wire rod have imposed numerous and significant price increases on all of

their wire rod products.  AWPA’s Postconference Brief at 2‐4.

109 CR at V‐18‐V‐31; PR at V‐12 – V‐13.

110 In its notice initiating the antidumping duty investigation on wire rod from China, Commerce

initiated investigations based on estimated antidumping duty margins of 99.32 to 110.25 percent for

imports from China.  79 Fed. Reg. 11077 (Feb. 27, 2014). 111 CR/PR at Tables III‐3 and C‐1.  The domestic industry’s production capacity was 5.17 million short

tons in 2011, 5.13 million short tons in 2012, and 5.07 million short tons in 2013.  Id. 112 CR/PR at Tables III‐3 and C‐1.  The domestic industry’s production was 3.91 million short tons in

2011, 3.88 million short tons in 2012, and 3.66 million short tons in 2013.  Id. 113 CR/PR at Tables III‐3 and C‐1.  The domestic industry’s capacity utilization was 75.5 percent in

2011, 75.6 percent in 2012, and 72.0 percent in 2013.  Id. 114 CR/PR at Tables III‐5 and C‐1.  The domestic industry’s total U.S. shipments were 3.88 million short

tons in 2011, 3.81 million short tons in 2012, and 3.60 million short tons in 2013.  Id.  Total U.S.

shipments were 7.1 percent lower in 2013 than in 2011.  Id.  The domestic industry’s commercial

shipments were 2.94 million short tons in 2011, 2.82 million short tons in 2012, and 2.60 million short

tons in 2013.  Id.  Commercial shipments were 11.9 percent lower in 2013 than in 2011.  Id.
20

shipments steadily increased from 5.0 percent in 2011 to 7.4 percent in 2013.115  Although the

domestic industry accounted for the majority of apparent U.S. consumption, its market share

declined over the period of investigation.116 117

The number of production and related workers employed in the domestic industry, the

total hours worked, wages paid, and hourly wages fluctuated from year to year and declined

slightly overall from 2011 to 2013.118  The industry’s productivity and hours worked per worker

declined each year.119

The financial performance of the domestic industry displayed substantial declines during

the period of investigation, even as apparent U.S. consumption increased.  The domestic

producers’ total net sales values declined each year from $3.0 million in 2011 to $2.9 million in

2012 and $2.6 million in 2013.120  The domestic producers’ ratio of COGS to net sales increased

from 90.0 percent in 2011 to 91.7 percent in 2012 and 92.4 percent in 2013.121  Thus, while the

domestic industry was profitable each year, its operating income declined by more than half.122  

The domestic industry’s ratio of operating income to net sales declined from 7.1 percent in

2011 to 5.2 percent in 2012, and 4.2 percent in 2013.123  The industry’s capital expenditures

increased each year.124  Research and development expenses, which were much lower than

capital expenditures, fluctuated from year to year and were higher in 2013 than in 2011.125

Despite increases in apparent U.S. consumption, the domestic industry’s trade and

financial performance declined substantially over the period of investigation.  As discussed

above, we have found the volume and market share of subject imports to have increased

                                                       115 CR/PR at Table III‐7 and C‐1.

116 CR/PR at Tables IV‐4 and C‐1.  The U.S. industry’s market share was 75.6 percent in 2011, 71.5

percent in 2012, and 67.8 percent in 2013. Id.  The U.S. industry’s share of the commercial (merchant)

market was 70.1 percent in 2011, 65.0 percent in 2012, and 60.3 percent in 2013.  CR/PR at Table IV‐5. 117 As discussed above, a significant share of U.S. wire rod production is internally transferred to

produce downstream products.  While we concluded that the captive production provision was not

satisfied, we find it appropriate to consider the merchant market  (commercial sales) data as a relevant

condition of competition.

118 CR/PR at Tables III‐8 and C‐1.  Unit labor costs also fluctuated from year to year but increased very

slightly from 2011 to 2013.  Id. 119 CR/PR at Tables III‐8 and C‐1.

120 CR/PR at Table VI‐1.  The domestic producers’ net commercial sales values declined each year

from $2.4 million in 2011 to $2.2 million in 2012 and $1.9 million in 2013.  Id. 121 CR/PR at Table VI‐1.  For their commercial (merchant) market sales, the domestic producers’ ratio

of COGS to net sales increased from 90.2 percent in 2011 to 92.3 percent in 2012 and 92.8 percent in

2013.  Id. 122 The domestic industry’s operating income was $217.3 million in 2011, $148.4 million in 2012, and

$107.7 million in 2013.  CR/PR at Table VI‐1.  The domestic industry’s operating income for commercial

market sales was $161.7 million in 2011, $98.6 million in 2012, and $68.5 million in 2013.  Id. 123 CR/PR at Table VI‐1.  The domestic industry’s ratio of operating income to net sales for

commercial market sales was 6.8 percent in 2011, 4.5 percent in 2012, and 3.0 percent in 2013.  Id. 124 CR/PR at Table VI‐4.  The ***.  CR at VI‐19; PR at VI‐9.

125 CR/PR at Table VI‐4.  Four U.S. producers reported research and development expenses.  Id.
21

significantly over the period of investigation, that there has been substantial underselling, and

that there is evidence of price depression and suppression by subject imports.  Consequently,

we find, for purposes of the preliminary phase of these investigations, that there is a

reasonable indication that the large and increasing volume of subject imports had a significant

impact on the domestic industry.

In conducting our impact analysis, we have also considered the role of other factors so

as not to attribute injury from other factors to subject imports.126  Apparent U.S. consumption

for wire rod increased by 3.5 percent from 2011 to 2013, so declines in the domestic industry’s

trade and financial performance indicators are not due to a decline in consumption.127  

Nonsubject imports declined in volume and market share between 2011 and 2013,128 and

subject imports’ gains in market share exceeded the loss of market share by nonsubject

imports.129  In addition, pricing data indicate that nonsubject imports from Canada were priced

higher than subject imports in 28 of 35 quarterly price comparisons.130

No other factors have been identified by Respondents to explain the declines in the

domestic industry’s performance.  Instead, Respondents have urged the Commission to

consider the effects of imposing antidumping and countervailing duty duties on downstream

consumers, which is not legally relevant to these proceedings.131

Accordingly, for purposes of these preliminary determinations, we conclude that subject

imports have had a significant adverse impact on the domestic industry.

                                                       126 Based on the record evidence in the preliminary phase of this investigation, Commissioner Pinkert

finds that price competitive, nonsubject imports were a significant factor in the U.S. market for wire rod

during the period of investigation.  CR/PR at Table C‐1.  He notes, however, that, regardless of whether

wire rod constitutes a commodity product, the record does not support finding that nonsubject imports

would have replaced subject imports during the period of investigation without benefit to the domestic

industry if subject imports had exited the U.S. market.  Nonsubject imports did not account for more

than 24.4 percent of the U.S. market in any year of the period and declined over the period.  Id.  In

addition, China is the largest global producer of wire, accounting for 74.7 percent of world production in

2012 and by far the largest share of global exports during 2011‐2013.  CR/PR at VII‐3 & Table VII‐

5.  There also is no record information regarding the propensity of suppliers in other countries to replace

subject imports.  Moreover, the available price data indicate that imports of wire rod from one

nonsubject country (Canada) were sold at higher prices than wire rod originating either in China or the

United States.  See CR at V‐7 ‐ V‐16, PR at V‐5 – V‐10.

127 CR/PR at Table C‐1.

128 Nonsubject import market share declined from 24.4 percent in 2011 to 24.0 percent in 2012, and

then to 20.5 percent in 2013.  CR/PR at Table IV‐4.

129 Subject import market share increased from less than 0.05 percent in 2011 to 4.5 percent in 2012,

and then to 11.7 percent in 2013.  CR/PR at Table IV‐4.

130 CR/PR at Tables V‐4, V‐5, and V‐7.

131 AWPA’s Postconference Brief at 6‐7.  The statutory inquiry in these investigations relates to the

“impact of imports of such merchandise on domestic producers of domestic like products....” 19 U.S.C. §

1677(7)(B)(i)(III).  As discussed above, the subject imports and domestic like product in these

investigations encompass wire rod products, not wire or other downstream products.
22

VI. Conclusion

For the reasons stated above, we determine that there is a reasonable indication that an

industry in the United States is materially injured by reason of subject imports of carbon and

certain alloy steel wire rod from China that are alleged to be sold in the United States at less

than fair value and allegedly subsidized by the Government of China.
I‐1

PART I: INTRODUCTION

BACKGROUND

These investigations result from petitions filed with the U.S. Department of Commerce

(“Commerce”) and the U.S. International Trade Commission (“USITC” or “Commission”) by

ArcelorMittal USA LLC (“ArcelorMittal”), Chicago, Illinois; Charter Steel (“Charter”), Saukville,

Wisconsin; Evraz Pueblo1 (“Evraz”), Pueblo, Colorado; Gerdau Ameristeel US Inc. (“Gerdau”),

Tampa, Florida; Keystone Consolidated Industries, Inc. (“Keystone”), Dallas, Texas; and Nucor

Corporation (“Nucor”), Charlotte, North Carolina on January 31, 2014, alleging that an industry

in the United States is materially injured and threatened with material injury by reason of

subsidized and less‐than‐fair‐value (“LTFV”) imports of carbon and certain alloy steel wire rod

(“wire rod”)2 from China. The following tabulation provides information relating to the

background of these investigations.3 4  

Effective date Action 

January 31, 2014 Petitions filed with Commerce and the Commission; institution 

of Commission investigation (79 FR 7225, February 6, 2014) 

February 21, 2014 Commission’s conference 

February 27, 2014 Commerce’s notices of initiation 

(79 FR 11077 and 79 FR 11085) 

March 14, 2014 Commission’s vote 

March 20, 2014 Commission’s determinations (postponed) 

March 27, 2014 Commission’s views (postponed) 

STATUTORY CRITERIA AND ORGANIZATION OF THE REPORT

Statutory criteria

Section 771(7)(B) of the Tariff Act of 1930 (the “Act”) (19 U.S.C. § 1677(7)(B)) provides

that in making its determinations of injury to an industry in the United States, the Commission‐‐ 

shall consider (I) the volume of imports of the subject merchandise, (II) the

effect of imports of that merchandise on prices in the United States for

                                                      

1 On January 31, 2014, Evraz Rocky Mountain Steel became Evraz Pueblo. 2 See the section entitled “The Subject Merchandise” in Part I of this report for a complete

description of the merchandise subject to these investigations.

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

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

domestic like products, and (III) the impact of imports of such

merchandise on domestic producers of domestic like products, but only in

the context of production operations within the United States; and. . .

may consider such other economic factors as are relevant to the

determination regarding whether there is material injury by reason of

imports.

Section 771(7)(C) of the Act (19 U.S.C. § 1677(7)(C)) further provides that‐‐ 

In evaluating the volume of imports of merchandise, the Commission shall

consider whether the volume of imports of the merchandise, or any

increase in that volume, either in absolute terms or relative to production

or consumption in the United States is significant.

. . .

In evaluating the effect of imports of such merchandise on prices, the

Commission shall consider whether. . .(I) there has been significant price

underselling by the imported merchandise as compared with the price of

domestic like products of the United States, and (II) the effect of imports

of such merchandise otherwise depresses prices to a significant degree or

prevents price increases, which otherwise would have occurred, to a

significant degree.

. . .

In examining the impact required to be considered under subparagraph

(B)(i)(III), the Commission shall evaluate (within the context of the

business cycle and conditions of competition that are distinctive to the

affected industry) all relevant economic factors which have a bearing on

the state of the industry in the United States, including, but not limited to

. . . (I) actual and potential decline in output, sales, market share, profits,

productivity, return on investments, and utilization of capacity, (II) factors

affecting domestic prices, (III) actual and potential negative effects on

cash flow, inventories, employment, wages, growth, ability to raise

capital, and investment, (IV) actual and potential negative effects on the

existing development and production efforts of the domestic industry,

including efforts to develop a derivative or more advanced version of the

domestic like product, and (V) in {an antidumping investigation}, the

magnitude of the margin of dumping.

Organization of the report

Part I of this report presents information on the subject merchandise, alleged subsidy

and dumping margins, and domestic like product. Part II of this report presents information on

conditions of competition and other relevant economic factors. Part III presents information on

the condition of the U.S. industry, including data on capacity, production, shipments,

inventories, and employment. Parts IV and V present the volume of subject imports and pricing
I‐3

of domestic and imported products, respectively. Part VI presents information on the financial

experience of U.S. producers. Part VII presents the statutory requirements and information

obtained for use in the Commission’s consideration of the question of threat of material injury

as well as information regarding nonsubject countries.

MARKET SUMMARY

Wire rod generally is used as an intermediate product for drawing into wire. The leading

U.S. producers of wire rod are Charter, Gerdau, Keystone, Nucor, and Sterling Steel Company,

LLC (“Sterling”), while leading producers of wire rod in China include ***. The leading U.S.

importers of wire rod from China are ***. The leading importer of product from nonsubject

countries (primarily Canada) is ***. U.S. purchasers of wire rod are firms that draw wire and

use this wire for a large variety of end products; leading purchasers include ***.

Apparent U.S. consumption of wire rod totaled approximately 5.3 million short tons

($3.8 billion) in 2013. Currently, ten firms are known to produce wire rod in the United States.

U.S. producers’ U.S. shipments of wire rod totaled 3.6 million short tons ($2.5 billion) in 2013,

and accounted for 67.8 percent of apparent U.S. consumption by quantity and 67.3 percent by

value. U.S. imports from China totaled nearly 619,000 short tons ($336 million) in 2013 and

accounted for 11.7 percent of apparent U.S. consumption by quantity and 8.9 percent by value.

U.S. imports from nonsubject sources totaled nearly 1.1 million short tons ($896 million) in

2013 and accounted for 20.5 percent of apparent U.S. consumption by quantity and 23.8

percent by value.  

SUMMARY DATA AND DATA SOURCES

A summary of data collected in these investigations is presented in appendix C.5 Except

as noted, U.S. industry data are based on questionnaire responses of ten firms that accounted

for all U.S. production of wire rod during 2011‐13. U.S. imports are based on official import data

and on questionnaire responses from 13 U.S. importers that are believed to have accounted for

97.5 percent of wire rod imports from China and 40.8 percent of wire rod imports from

nonsubject sources during 2011‐13.

                                                      

5 Table C‐1 presents data for the total market and table C‐2 presents data for the U.S. merchant

market (excluding internal consumption and company transfers by U.S. producers).
I‐4

PREVIOUS AND RELATED INVESTIGATIONS

Prior investigations

The Commission has conducted a number of previous import relief investigations on

wire rod products or similar merchandise. There are currently antidumping orders in effect

covering wire rod from Brazil, Indonesia, Mexico, Moldova, Trinidad and Tobago, and Ukraine,

as well as a countervailing duty order in effect covering wire rod from Brazil.6 Table I‐1 presents

the Commission’s countervailing and antidumping duty investigations concerning wire rod since

1982.  

Table I-1 

Wire rod: Previous and related Title VII investigations, 1982-2013 

Original Investigation First review

Date Status 1 Number Country Outcome Date1 Outcome

1982 731-TA-88 Venezuela Negative - - - 

1982 731-TA-113 Brazil Affirmative - - ITA revoked 9/20/85 

1982 731-TA-114 Trinidad & Tobago Affirmative - - ITA revoked 12/14/87 

1982 701-TA-148 Brazil Affirmative2 - - Investigation terminated 8/21/85 

1982 701-TA-149 Belgium Affirmative2 - - Petition withdrawn 11/9/82 

1982 701-TA-150 France Affirmative2 - - Petition withdrawn 11/9/82 

1983 701-TA-209 Spain Affirmative - - ITA revoked 9/11/85 

1983 731-TA-157 Argentina Affirmative 1998 Negative - 

1983 731-TA-158 Mexico Negative2 - - - 

1983 731-TA-159 Poland Negative - - - 

1983 731-TA-160 Spain Affirmative - - ITA revoked 9/16/85 

1984 731-TA-205 East Germany Affirmative2 - - Petition withdrawn 8/1/85 

Table continued on next page.   

                                                      

6 The Commission is conducting full five‐year reviews of these orders; determinations are expected in

June 2014. Carbon and Certain Alloy Steel Wire Rod From Brazil, Indonesia, Mexico, Moldova, Trinidad

and Tobago, and Ukraine, 78 FR 76653, December 18, 2013.
I‐5

Table I-1--Continued 

Wire rod: Previous and related Title VII investigations, 1982-2013 

Original Investigation First review

Date Status 1 Number Country Outcome Date1 Number

1985 701-TA-243 Portugal Negative2 - - - 

1985 701-TA-244 Venezuela Affirmative2 - - Petition withdrawn 7/24/85 

1985 731-TA-256 Poland Affirmative2 - - Petition withdrawn 9/10/85 

1985 731-TA-257 Portugal Affirmative2 - - Petition withdrawn 11/20/85 

1985 731-TA-258 Venezuela Affirmative2 - - Petition withdrawn 8/30/85 

1992 701-TA-314 Brazil Affirmative 1999 - ITA revoked 11/15/99 

1992 701-TA-315 France Affirmative 1999 - ITA revoked 11/15/99 

1992 701-TA-316 Germany Affirmative 1999 - ITA revoked 11/15/99 

1992 701-TA-317 United Kingdom Affirmative 1999 - ITA revoked 11/15/99 

1992 731-TA-552 Brazil Affirmative 1999 - ITA revoked 11/15/99 

1992 731-TA-553 France Affirmative 1999 - ITA revoked 11/15/99 

1992 731-TA-554 Germany Affirmative 1999 - ITA revoked 11/15/99 

1992 731-TA-555 United Kingdom Affirmative 1999 - ITA revoked 11/15/99 

1992 731-TA-572 Brazil Negative - - - 

1993 731-TA-646 Brazil Negative - - - 

1993 731-TA-647 Canada Affirmative2 - - Petition withdrawn 4/18/94 

1993 731-TA-648 Japan Negative - - - 

1993 731-TA-649 Trinidad & Tobago Negative2 - - - 

1994 701-TA-359 Germany Negative2 - - - 

1994 731-TA-686 Belgium Affirmative2 - - Petition withdrawn 7/7/94 

1994 731-TA-687 Germany Negative2 - - - 

1997 701-TA-368 Canada Negative - - - 

1997 701-TA-369 Germany Negligible3 - - - 

1997 701-TA-370 Trinidad & Tobago Negative - - - 

1997 701-TA-371 Venezuela Negative - - - 

1997 731-TA-763 Canada Negative - - - 

1997 731-TA-764 Germany Negative - - - 

1997 731-TA-765 Trinidad & Tobago Negative - - - 

1997 731-TA-766 Venezuela Negative - - - 

Table continued on next page. 

   
I‐6

Table I-1--Continued 

Wire rod: Previous and related Title VII investigations, 1982-2013 

Original Investigation First review

Date Status 1 Number Country Outcome Date1 Number

2001 701-TA-417 Brazil Affirmative 2007 Affirmative Second review instituted 2013 

2001 701-TA-418 Canada Affirmative - - ITA revoked 1/23/04 

2001 701-TA-419 Germany Negligible - - - 

2001 701-TA-420 Trinidad & Tobago Negative4 - - - 

2001 701-TA-421 Turkey Negative4 - - - 

2001 731-TA-953 Brazil Affirmative 2007 Affirmative Second review instituted 2013 

2001 731-TA-954 Canada Affirmative 2007 Negative - 

2001 731-TA-955 Egypt Negligible3 - - - 

2001 731-TA-956 Germany Negligible3 - - - 

2001 731-TA-957 Indonesia Affirmative 2007 Affirmative Second review instituted 2013 

2001 731-TA-958 Mexico Affirmative 2007 Affirmative Second review instituted 2013 

2001 731-TA-959 Moldova Affirmative 2007 Affirmative Second review instituted 2013 

2001 731-TA-960 South Africa Negligible3 - - 

2001 731-TA-961 Trinidad & Tobago Affirmative 2007 Affirmative Second review instituted 2013 

2001 731-TA-962 Ukraine Affirmative 2007 Affirmative Second review instituted 2013 

2001 731-TA-963 Venezuela Negligible3 - - - 

2005 731-TA-1099 China Negative2 - - - 

2005 731-TA-1100 Germany Negative2 - - - 

2005 731-TA-1101 Turkey Negative2 - - - 1 Date refers to the year in which the investigation or review was instituted by the Commission. 2 Preliminary determination. 

3 The Commission found subject imports to be negligible, and its investigation was thereby terminated. 

Petitioner Co-Steel Raritan (now Gerdau) appealed the Commission’s preliminary determinations that 

imports were negligible. After a third remand in March 2008, the Court of International Trade (CIT) 

affirmed the views of the Commission concerning Egypt, South Africa, and Venezuela. With respect to 

Germany, the CIT affirmed the Commission’s final determination that subject imports from Germany were 

negligible. 

4 The Department of Commerce made a negative determination. 

Source: Carbon and Certain Alloy Steel Wire Rod from Brazil, Canada, Indonesia, Mexico, Moldova, 

Trinidad and Tobago, and Ukraine, Investigation Nos. 701-TA-417 and 731-TA-953, 954, 957-959, 961, 

and 962 (Review), USITC Publication 4014, June 2008; Carbon and Certain Alloy Steel Wire Rod from 

China, Germany, and Turkey, Investigation Nos. 731-TA-1099-1101 (Preliminary), USITC Publication 

3832, January 2006; and Carbon and Certain Alloy Steel Wire Rod from Brazil, Indonesia, Mexico, 

Moldova, Trinidad and Tobago, and Ukraine, 78 FR 33103, June 3, 2013. 
I‐7

Safeguard investigation

In 1999, the Commission conducted a safeguard investigation under section 202 of the

Trade Act of 1974 to determine whether steel wire rod was being imported into the United

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

thereof, to the domestic industry producing an article like or directly competitive with the

imported article. The Commission was equally divided in its injury determination.7 The

President considered the determination of the Commissioners voting in the affirmative and

issued Proclamation 7273 imposing relief in the form of a Tariff Rate Quota (TRQ) on imports of

steel wire rod for a period of three years and one day, effective March 1, 2000.  

Imports of subject products in excess of the quarterly or the annual quota amounts

were assessed duties in addition to the column‐1 general rates of duty in the amounts of 10

percent ad valorem in the first year of relief (in‐quota quantity of 1,580,000 short tons); 7.5

percent ad valorem in the second year of relief (in‐quota quantity of 1,611,600 short tons); and

5 percent ad valorem in the third year of relief (in‐quota quantity of 1,643,832 short tons). The

President subsequently issued Proclamation 7505 effective November 24, 2001, modifying the

TRQ, by providing that the in‐quota quantity of the TRQ be allocated among these four supplier

country groupings: European Community; Commonwealth of Independent States; Trinidad and

Tobago; and all other countries.8

NATURE AND EXTENT OF ALLEGED SUBSIDIES AND SALES AT LTFV

Alleged subsidies

On February 27, 2014, Commerce published a notice in the Federal Register of the

initiation of its countervailing duty investigation on wire rod from China.9 Commerce identified

the following government programs in China:

A. Preferential Loans, Policy Loans, and Directed Credit

1. Preferential Loans, Policy Loans, and Directed Credit to the Steel Wire Rod

Industry

2. Treasury Bond Loans or Grants

   

                                                      

7 Pursuant to section 311(a) of the North American Free Trade Agreement (NAFTA) Implementation

Act, the Commission made negative findings with respect to imports of wire rod from Canada and

Mexico.

8 Carbon and Certain Alloy Steel Wire Rod from Brazil, Canada, Indonesia, Mexico, Moldova, Trinidad

and Tobago, and Ukraine, Investigation Nos. 701‐TA‐417 and 731‐TA‐953, 954, 957‐959, 961, and 962

(Review), USITC Publication 4014, June 2008, pp. I‐11‐I‐12.

9 Carbon and Certain Alloy Steel Wire Rod From the People’s Republic of China:  Initiation of

Countervailing Duty Investigation, 79 FR 11085, February 27, 2014.
I‐8

B. Grant Programs

1. Development of Famous Brands and China World Top Brands Programs

2. Sub‐Central Government Subsidies for Development of Famous Brands and

China World Top Brands

3. Funds for Outward Expansion of Industries in Guangdong Province

4. Provincial Fund for Fiscal and Technological Innovation

5. State Specific Fund for Promoting Key Industries and Innovation Technologies

6. Shandong Province’s Special Fund for the Establishment of Key Enterprise

Technology Centers

7. Grants for Antidumping Investigations

8. Shandong Province's Award Fund for Industrialization of Key Energy‐Saving

Technology

9. Shandong Province's Environmental Protection Industry R&D Funds

10. Shandong Province's Construction Fund for Promotion of Key Industries

11. Waste Water Treatment Subsidies

12. Funds of Guangdong Province to Support the Adoption of E‐Commerce by

Foreign Trade Enterprises

13. Technology to Improve Trade R&D Fund

14. Direct Government Grants to Angang Steel

15. Direct Government Grants to Baosteel

16. Direct Government Grants to HBIS

17. Direct Government Grants to Nanjing Iron & Steel Co., Ltd. (NISCO)

18. Direct Government Grants to Jiangsu Shagang Group

19. Grants to Wuhan Iron and Steel Co., Ltd. (WISCO)

C. Provision of Inputs for Less than Adequate Remuneration (LTAR)

1. The Provision of Steel Billet for LTAR

2. The Provision of Electricity for LTAR

D. Provision of Land for LTAR

1. The Provision of Land‐Use to SOEs for LTAR

2. Land‐Use Rights Extension

E. Tax Programs

1. Income Tax Reductions Under Article 28 of the Enterprise Income Tax Law (EIT)

2. Tax Offsets for R&D Under the EIT

3. The Two Free/Three Half Program for Foreign‐Invested Enterprises (FIEs)

4. Income Tax Reductions for Export‐Oriented FIEs

5. Income Tax Benefits for FIEs Based on Geographic Locations

6. Local Income Tax Exemption and Reduction Programs for “Productive” FIEs

7. Tax Offsets for R&D by FIEs

8. Tax Refunds for Reinvestment of FIE Profits in Export‐Oriented Enterprises

9. Preferential Tax Programs for FIEs Recognized as HNTEs

10. Tax Benefits to Enterprises in the Northeast Region
I‐9

11. Forgiveness of Tax Arrears for Enterprises Located in the Old Industrial Bases of

Northeast China

F. VAT Programs

1. VAT and Import Duty Exemptions for Use of Imported Equipment

2. VAT Rebates on FIE Purchases of Chinese‐Made Equipment

3. VAT and Tariff Exemptions for Purchases of Fixed Assets Under the Foreign Trade

Development Fund Program

Alleged sales at LTFV

On February 27, 2014, Commerce published a notice in the Federal Register of the

initiation of its antidumping duty investigation on wire rod from China. Commerce has initiated

an antidumping duty investigation based on estimated dumping margins of 99.32 to 110.25

percent with respect to imports of wire rod from China. 10  

THE SUBJECT MERCHANDISE

Commerce’s scope

Commerce has defined the scope of this investigation as follows:11

The merchandise covered by these investigations are certain hot‐rolled

products of carbon steel and alloy steel, in coils, of approximately round

cross section, less than 19.00 mm in actual solid cross‐sectional diameter.

Specifically excluded are steel products possessing the above‐noted

physical characteristics and meeting the Harmonized Tariff Schedule of

the United States (HTSUS) definitions for (a) stainless steel; (b) tool steel;

(c) high nickel steel; (d) ball bearing steel; or (e) concrete reinforcing bars

and rods. Also excluded are free cutting steel (also known as free

machining steel) products (i.e., products that contain by weight one or

more of the following elements:  0.1 percent or more of lead, 0.05 percent

or more of bismuth, 0.08 percent or more of sulfur, more than 0.04

percent of phosphorus, more than 0.05 percent of selenium, or more than

0.01 percent of tellurium). All products meeting the physical description of

subject merchandise that are not specifically excluded are included in this

scope.

                                                      

10 Carbon and Certain Alloy Steel Wire Rod From the People’s Republic of China: Initiation of

Antidumping Duty Investigation, 79 FR 11077, February 27, 2014. 11 Carbon and Certain Alloy Steel Wire Rod From the People’s Republic of China: Initiation of

Antidumping Duty Investigation, 79 FR 11077, February 27, 2014.
I‐10

The products under investigation are currently classifiable under

subheadings 7213.91.3011, 7213.91.3015, 7213.91.3020, 7213.91.3093;

7213.91.4500, 7213.91.6000, 7213.99.0030, 7227.20.0030,

7227.20.0080, 7227.90.6010, 7227.90.6020, 7227.90.6030, and

7227.90.6035 of the HTSUS. Products entered under subheadings

7213.99.0090 and 7227.90.6090 of the HTSUS also may be included in this

scope if they meet the physical description of subject merchandise above.

Although the HTSUS subheadings are provided for convenience and

customs purposes, the written description of the scope of this proceeding

is dispositive.

Tariff treatment

Based upon the scope set forth by Commerce, information available to the Commission

indicates that the merchandise subject to these investigations is currently imported under the

following provisions of the 2014 Harmonized Tariff Schedule (“HTS”) of the United States:  

7213.91.3011, 7213.91.3015, 7213.91.3020, 7213.91.3093; 7213.91.4500, 7213.91.6000,

7213.99.0030, 7227.20.0030, 7227.20.0080, 7227.90.6010, 7227.90.6020, 7227.90.6030, and

7227.90.6035.12 The column‐1 General duty rate for imports of wire rod under all of these

provisions is “free.”  

THE PRODUCT

Description and uses13

Wire rod is a hot‐rolled intermediate steel product of circular or approximately circular

cross section that typically is produced in nominal fractional diameters up to 47/64 inch (18.7

mm) and sold in irregularly wound coils, primarily for subsequent drawing and finishing by wire

                                                      

12 From 2011 through 2013, certain subject alloy wire rod products were classified with nonsubject

hot‐rolled bar and rod products in HTS basket category 7227.90.6085. As of January 1, 2014, HTS

7227.90.6085 was replaced with four new breakouts, including 7227.90.6030 (covering circular alloy

wire rod with a diameter of less than 14 mm) and 7227.90.6035 (covering circular alloy wire rod with a

diameter of 14 mm or more but less than 19 mm). The other two new HTS numbers, 7227.90.6040

(circular alloy bars and rods with a diameter of 19 mm or more) and 7227.90.6090 (cross‐section shapes

other than circular), are considered bar and rod products outside the scope of these investigations.

HTSUS (2014), “Change Record,” January 1, 2014, pp. 6–7.

13 Compiled from Petition, Vol. I, Exhibit GEN‐3; Carbon and Certain Alloy Steel Wire Rod from Brazil,

Canada, Indonesia, Mexico, Moldova, Trinidad and Tobago, and Ukraine, Inv. Nos. 701‐TA‐417 and 731‐

TA‐953, 954, 957‐959, 961, and 962 (Review), USITC Publication 4014, June 2008, pp. I‐22 – I‐24; and

Carbon and Certain Alloy Steel Wire Rod from China, Germany, and Turkey, Inv. Nos. 731‐TA‐1099‐1101

(Preliminary), USITC Publication 3832, January 2006, pp. I‐6‐I‐7.
I‐11

drawers.14 Wire rod sold in the United States is categorized by quality according to end use.

End‐use categories are broad descriptions with overlapping metallurgical qualities, chemistries,

and physical characteristics.15  

Table I‐2 presents quality and commodity descriptions for 11 major types of wire rod, as

indicated by the Iron and Steel Society. Industrial quality wire rod currently accounts for the

majority of wire rod consumed in the United States. It is primarily intended for drawing into

industrial (or standard) quality wire that, in turn, is used to manufacture such products as nails,

reinforcing wire mesh and chain link fence. Most of the industrial quality wire rod is produced

and sold in the smallest cross‐sectional diameter that is hot rolled in substantial commercial

quantities (7/32 inch or 5.6 mm). 16 Industrial quality wire rod generally is manufactured from

low‐ or medium‐low‐carbon steel.17 Other relatively large‐volume qualities of wire rod

consumed in the United States include high‐ and medium‐high carbon and cold‐heading quality.

High‐ and medium‐high carbon wire rod are intended for drawing into wire for such products as

strand, upholstery spring, mechanical spring, rope, screens, and pre‐stressed concrete wire.18

                                                      

14 Wire drawers (also referred to as redrawers) manufacture wire and wire products and may be

independent of the wire rod manufacturers or may be affiliated parties.

The American Wire Producers Association (“AWPA”) emphasized that wire rod is essentially used

only to manufacture wire which is either fabricated into downstream wire products or incorporated into

finished products. AWPA’s  postconference brief, p. 6.

15 Steel ductility, hardness, and tensile strength are positively correlated with carbon content.

Alloying elements can be added at the steel melting stage of the manufacturing process to impart

various characteristics to the wire rod.

16 Petitioners state that wire rod with a nominal diameter of less than from 7/32 inch (5.6 mm) has

become commercially available in the United States since previous investigations. Petition, Vol. I, p. 6. 17 Iron and Steel Society, Steel Products Manual:  Carbon Steel Wire and Rods, August 1993, p. 36.

18 The end uses of very high quality wire rod are those where manufacturing process involve large

amounts of cold deformation of the steel such as in recessed quality cold heading; those that are safety

critical, such as automotive wheel bolts and tire reinforcing wire; those that have very demanding

consistency requirements or unusual steel chemistry requirements, such as certain welding grades; and

other applications that put unusual and demanding requirements on the steel.
I‐12

Table I-2 

Wire rod: Quality, end uses, and important characteristics 

Quality End uses Important characteristics

Chain quality Electric welded chain Butt-welding properties and 

uniform internal soundness 

Cold-finishing quality Cold-drawn bars Surface quality 

Cold-heading quality Cold-heading, cold-forging, coldextrusion products Internal soundness, good 

surface quality, may require 

thermal treatments 

Concrete reinforcement Nondeformed rods for reinforcing 

concrete (plain round or smooth 

surface rounds) 

Chemical composition important 

only insofar as it affects 

mechanical property 

Fine wire Insect screen, weaving wire, florist 

wire 

Rods must be suitable for 

drawing into wire sizes as small 

as 0.035 inch (0.889 mm) 

without intermediate annealing; 

internal quality important 

High carbon and mediumhigh carbon Strand and rope, tire bead, 

upholstery spring, mechanical 

spring, screens, aluminum 

conductors steel reinforced core, 

pre-stressed concrete strand; pipe 

wrap wire is a subset 

Requires thermal treatment prior 

to drawing; however, it is not 

intended to be used for music 

wire or valve spring wire 

Industrial (standard) quality Nails, coat hangers, mesh for 

concrete reinforcement, fencing 

Can only be drawn a limited 

number of times before requiring 

thermal treatment 

Music spring wire Springs subject to high stress; 

valve springs are a subset 

Restrictive requirements for 

chemistry, cleanliness, 

segregation, decarburization, 

surface imperfections 

Scrapless nut Fasteners produced by cold 

heading, cold expanding, cold 

punching, thread tapping 

Internal soundness, good 

surface quality 

Tire cord Tread reinforcement in pneumatic 

tires 

Restrictive requirements for 

cleanliness, segregation, 

decarburization, chemistry, 

surface imperfections 

Welding quality Wire for gas welding, electric arc 

welding, submerged arc welding, 

metal inert gas welding 

Restrictive requirements for 

uniform chemistry 

Source: Iron and Steel Society, Steel Products Manual: Carbon Steel Wire and Rods, August 1993, pp. 

35-37.
I‐13

Manufacturing process19

The manufacturing process for wire rod consists of several stages:  (1) melting and

refining to set the steel’s chemical and metallurgical properties; (2) casting the steel into a

semifinished shape (billet); (3) hot‐rolling the billet into rod on a multistand, high‐speed rolling

mill; and (4) coiling and controlled cooling of the wire rod as it passes along a Stelmor deck, a

specialized conveyor unique to the wire rod industry. According to one witness, the equipment

used to produce wire rod is much the same throughout the world and without significant

differences in production technology.20  

U.S. and foreign wire rod manufacturers have made capital investments in their

production facilities to improve processing efficiencies and product quality. Higher standards

for product quality (e.g., dimensional tolerances, control over residual or trace elements, and

coil weights) have been applied across the entire range of wire rod products largely in response

to customer demands for improved performance on the customer's equipment. These

improvements have tended to blur the distinctions among quality terms over time.21  

Melting stage

There are two primary process routes by which steel for rod has been made in the

United States and in foreign countries:  the integrated process, which employs blast furnaces

and basic oxygen furnaces (BOFs), and the nonintegrated (or “minimill”) production processes

which utilizes an electric arc furnace (EAF) to produce raw steel. In both processes, pig iron,

ferrous scrap, and/or direct reduced iron (DRI)22 are charged into BOFs or EAFs. In the United

States, all steel23 (or nearly all steel24) for rod production is melted from ferrous scrap in an EAF,

                                                      

19 Compiled from Petition, Vol. 1, Exhibit GEN‐3; Carbon and Certain Alloy Steel Wire Rod from Brazil,

Canada, Indonesia, Mexico, Moldova, Trinidad and Tobago, and Ukraine, Inv. Nos. 701‐TA‐417 and 731‐

TA‐953, 954, 957‐959, 961, and 962 (Review), USITC Publication 4014, June 2008, pp. I‐24 – I‐27; and

Carbon and Certain Alloy Steel Wire Rod from China, Germany, and Turkey, Inv. Nos. 731‐TA‐1099‐1101

(Preliminary), USITC Publication 3832, January 2006, p. I‐8.

20 Conference transcript, p. 69 (Nystrom); and Nucor’s postconference brief, p. 31. 21 Carbon and Certain Alloy Steel Wire Rod from China, Germany, and Turkey, Inv. Nos. 731‐TA‐1099‐

1101 (Preliminary), USITC Publication 3832, January 2006, p. I‐8. 22 The advantage of using substitute materials for scrap, including DRI, HBI, or pig iron is the low

levels of residual elements (e.g., copper, chromium, nickel, molybdenum, and tin) and reduced gaseous

content (particularly nitrogen) that they impart to the steel. Compared to BOF steel, EAF scrap‐based

steel contains higher levels of certain residuals, which adversely affect yields and drawing efficiencies,

and may limit such scrap‐based steel use in certain critical applications.

23 Conference transcript, p. 61 (Kirkvliet).

24 Conference transcript, p. 61 (Fuller).
I‐14

along with other raw materials that may also be added as part of the EAF charge.25 Alloy agents

are added to the liquid steel to impart specific properties to finished steel products. The molten

steel is poured or tapped from the furnace to a ladle, which is an open‐topped, refractory‐lined

vessel that has an off‐center opening in its bottom and is equipped with a nozzle. Meanwhile,

the primary steelmaking vessel (either EAF or BOF) may be charged with new materials to begin

another refining cycle.

Molten steel typically is further treated in a ladle metallurgy station, where its chemistry

is refined to give the steel those properties required for specific applications. At the ladle

metallurgy, or secondary steel making, station the chemical content (particularly that of carbon

and sulfur) is adjusted, and alloying agents may be added.26 The steel may be degassed

                                                      

25 Minimills use ferrous scrap as their primary raw material but may add DRI or hot‐briquetted iron

and/or pig iron to the mix, depending on the specifications for the end product and the relative costs of

the raw materials. Minimills that produce high quality rod products, such as high carbon, cold heading

quality, tire cord quality, and/or other special quality wire rod may use less ferrous scrap and more DRI

than other steelmakers, however the production process in general does not change.

ArcelorMittal adds DRI as a premium raw material to attain the same effects as BOF steel.

Conference transcript, p. 61 (Fuller). Similarly, with addition of scrap blends and substitute materials,

Nucor reportedly has the full capability to produce all steel grades currently being imported, using the

EAF process compared to the BOF process. Conference transcript, p. 62 (Nystrom).

26 Boron can be added as ferroboron to molten steel (in concentrations of 0.0015–0.0030 percent or

15–30 parts per million (ppm)) to increase the hardenability of the steel. However, because of boron’s

high reactivity with any dissolved oxygen and nitrogen in the molten steel, ferroboron is the last

addition at the ladle metallurgy station, under controlled conditions, and only after the molten steel is

“killed” (deoxidized or degassed). Shieldalloy Metallurgical Corp., “Boron,” Ferroalloys & Alloying

Additives Online Handbook, November 23, 2000.

According to the Iron & Steel Society, fine‐grained, standard killed carbon steels may include 0.0005–

0.003 percent (5–30 ppm) boron to enhance the steel’s hardenability. Standard boron alloy steels can

contain 0.0005–0.003 percent (5–30 ppm) boron. Iron & Steel Society, Note 4 to “Table 1 Standard

Carbon Steels, Cast or Heat Chemical Ranges and Limits, Bars, Wire Rods, Blooms, Billets and Slabs” and

footnote “a” to Standard Boron Alloy Steels in “Table 7 Standard Alloy Steels, Cast or Heat Chemical

Ranges and Limits, Bars, Wire Rods, Blooms, Billets and Slabs,” Pocketbook of Standard Steels, July 1996.

According to staff conference testimony, boron enhances the ductility (drawability) of low carbon

steels, hardness of cold heading grade steels, and heat treatability and tensile strength of higher carbon

steels. Conference transcript, p. 70 (Goettl) and pp. 70–71 (Nystrom).

According to petitioners, the vast majority of Chinese wire rod contains trace additions of boron

(exceeding 0.0008 percent or 8 ppm) for it to be classified as alloy steel rather than carbon steel. In July

2010, the Chinese government removed a VAT rebate for carbon steel exports but continued offering

the rebate for alloy steel exports. Subsequently, Chinese producers reportedly added boron to claim the

rebate for their alloy steel exports, rather than for metallurgical purposes. HTSUS (2014), “Chapter 72

Iron and Steel, Note 1(f) Other Alloy Steel,” January 1, 2014, p. XV 72‐2; Petitioners’ postconference

brief, p. 37; Nucor’s postconference brief, Exhibit 1, Answers to Staff Questions, pp. 23–24; and Nucor’s

postconference brief, Exhibit 20, ***.

Articles appearing in the industry and trade press mention boron additions to wire rod as a means of

both avoiding Chinese export taxes and of gaining tax rebates. See, e.g., Frizell, Samuel, “Chinese Wire

(continued...)
I‐15

(eliminating oxygen and hydrogen) at low pressures.27 Ladle metallurgy stations are equipped

with electric arc power to adjust the temperature of the molten steel for optimum casting and

to allow it to serve as a holding reservoir for the tundish.

Casting stage

Once molten steel with the requisite properties has been produced, it is cast into a form

that can enter the rolling process. Continuous (strand) casting is the method primarily used in

the United States. In strand casting, the ladle containing molten steel is transferred from the

ladle metallurgy station to the caster and the molten steel is poured at a controlled rate into a

refractory‐lined tundish (reservoir dam), which in turn controls the rate of flow of the molten

steel into the molds at the top of the caster. The tundish may have a special design or employ

electromagnetic stirring to ensure homogeneity of the steel. The strand caster is designed to

produce billets in the desired cross‐sectional dimensions, based on the dimensions of the rod

and the design of the rolling mill. Billets may be sent directly (“hot‐charged”) into the rolling

mill or, depending upon the rolling mill's schedule, sent to a storage yard. While in storage,

billets may be inspected and subjected to one or more conditioning operations (e.g., grinding or

turning) to prepare them for hot rolling. This preparation is more common with cold‐heading

quality rods intended to be made into fasteners.28  

   

                                                      

(...continued)

Rod Imports Spike,” American Metal Market, August 19, 2013; Nagi, Catherine, “Chinese Rod Hits Shores

But Avoids Import Data,” American Metal Market, January 11, 2013; and Cowden, Michael, “Chinese

Wire Rod Imports Rising: Trader,” American Metal Market, May 22, 2012.

27 Liquid steel absorbs gasses from the atmosphere and from the materials used in the steelmaking

process. These gasses, chiefly oxygen and hydrogen, cause embrittlement, voids, and nonmetallic

inclusions. Low pressures, such as in a vacuum, aid the release of oxygen in gas form without the need

for additions of deoxidizers such as silicon, aluminum, or titanium, which form nonmetallic inclusions.

Additionally, carbon content may be reduced more easily at low pressure (because it combines with

oxygen to form carbon monoxide and is released in gas form), resulting in a more ductile steel.

Moreover, hydrogen gas causes embrittlement, low ductility, and blow holes in steel; vacuum treatment

more easily removes hydrogen from the steel. Hence the use of deoxidizing processes results in more

efficient process and cleaner steel.

28 The purpose of these surface treatments is to make the steel billet softer and more ductile

(annealing); in the case of surface grinding, seam and folds are removed.
I‐16

Rolling stage

The wire rod rolling process determines the rod's size (diameter) and dimensional

precision, depth of decarburization, surface defects and seams, amount of mill scale, structural

grain size, and within limits set by the chemistry, tensile strength and other physical properties.

There is little or no difference among the wire rod rolling mills in the United States, or between

U.S. mills and their foreign competitors.29  A larger billet will produce a heavier coil. Also, usable

coil size may be limited by the capabilities of the wire drawer's equipment and machinery.

Modern rod rolling mills consist of five parts: a roughing mill, an intermediate mill, a

pre‐finishing mill, a no‐twist finishing mill, and a coiler combined with a conveyor cooling bed

along which the coiled rod travels prior to being collected, tied, compacted, and readied for

shipment. Wire rod mills typically consist of 22 to 29 rolling stands and the specialized Stelmor

conveyor deck;30 the need for uniform metallurgical properties requires close temperature

control accomplished by accelerating or retarding the rod's cooling as it is rolled and conveyed

along the Stelmor deck. This is accomplished by water quench, forced air drafts, or by lowering

removable hoods overtop the deck. Metallurgical quality, temperature, and dimensional

tolerance usually are inspected in‐line.

Exiting the reheat furnace, the billet is initially reduced on the roughing mill (which

usually consists of approximately five stands). It then is passed through and successively

reduced in size on several more stands, termed intermediate rolling. After the last intermediate

rolling stand, the rolling mill usually splits into dual lines and the product is passed along to a

pre‐finishing mill which reduces it further in diameter. Rod mills often employ a “twist” mill for

primary and intermediate rolling, but the final rolling is nearly always on a no‐twist Morgan vee

mill (the rolls in each of approximately five stands are set a 90‐degree angles to allow the rod to

be rolled without twisting). This produces a nearly uniform non‐oriented grain structure in the

steel.

   

                                                      

29 The rolling process, however, can be optimized for various quality levels. The rolling process for

higher quality steel, such as for cold heading quality and other surface sensitive products, must be

designed to maximize surface integrity. This is managed by the number of rolling stands used to get to a

specific end diameter, the design of the reductions taken at each step, and the design of the guiding

equipment used to keep the steel moving on the proper path through the mill.

30 The Stelmor conveyor deck allows for controlled cooling of the wire rod. The cooling speed imparts

certain physical characteristics, thereby enabling producers to produce a wider range of wire rod

qualities. Likewise, the Stelmor deck may be optimized for specific end products. For example, ***.

Most, if not all, U.S. wire rod producers have installed controlled cooling capacities.
I‐17

Cooling stage

After exiting the last finishing stand, the rod is coiled into concentric loops and placed

on a conveyor which moves the hot wire rod along while it cools. During rolling, the rod is

water‐cooled as it travels along the Stelmor deck; cooling practices are varied depending on the

designated end use of the rod and the customer's preferences. The speed at which the rod is

cooled affects the consistency and formation of its metallurgical structure (grain structure and

physical properties such as tensile strength). It also affects scale buildup, which determines

yield losses at the wire drawer. The cooling rate may be varied through the use of removable

covers (insulating hoods which may be independently raised or lowered) over the deck or

blown‐air cooling, or a combination of the two, or through varying the speed of the roller table.

The end user often specifies the cooling practice of the rod purchased.

At the end of the cooling deck, workers crop the ends of each rod to remove the part of

the rod which may be of lower quality due to uneven temperature control; the cropped ends

are also used for testing and inspection. The rod is then collected onto a carrier, transferred to

a “c” hook, compacted, tied, and readied for shipment, or for further finishing or in‐house

fabrication. Figure I‐1 illustrates the reheat through cooling stages of the wire rod production

process.

Domestic producers manufacture various types of wire rod on essentially the same

equipment, in the same facilities, and with the same production personnel. While changes to

production processes are limited, changes in chemical composition, alloying elements and

other raw materials, stand fittings, and cooling speed determine the quality of the wire rod

produced. The basic equipment, machinery, facilities, and production personnel, however,

remain the same for the production of industrial quality, tire cord quality, welding quality, and

cold heading quality wire rod.
I‐18

Figure I-1 

Wire rod: Reheat and rolling process 

Source: HWE WANG Enterprises Inc., www.hwe-wang.com.tw/templates/cache/.../98011-Morgan-Rodmill.pdf , accessed March 6, 2014. 

DOMESTIC LIKE PRODUCT ISSUES

No issues with respect to domestic like product have been raised in the preliminary

phase of these investigations. The petitioner contends that the domestic like product should be

coextensive with the scope of the petition and consist of all hot‐rolled products of carbon steel

and alloy steel, in coils, of approximately round cross section, less than 19.00 mm, in solid

cross‐sectional diameter not specifically excluded from the scope.31 This domestic like product

definition is generally consistent with the like product definition the Commission adopted in its

previous investigations and reviews of wire rod.32 The scope in these investigations differs from

                                                       

31 Petition, Vol. I, pp. 9‐12.

32 Carbon and Certain Alloy Steel Wire Rod from Brazil, Canada, Germany, Indonesia, Mexico,

Moldova, Trinidad and Tobago, Turkey, and Ukraine, Inv. Nos. 701‐TA‐417‐421 and 731‐TA‐953, 954,

956‐959, 961 and 962 (Final), USITC Publication 3546, October 2002, pp. 6‐12.; Carbon and Certain Alloy

Steel Wire Rod from Brazil, Canada, Indonesia, Mexico, Moldova, Trinidad and Tobago, and Ukraine, Inv.

Nos. 701‐TA‐417 and 731‐TA‐953, 954, 957‐959, 961 and 962 (Review), USITC Publication 4014, June

2008, pp. 6‐8.
I‐19

existing wire rod orders in that it does not contain exclusions for grade 1080 tire cord quality

and grade 1080 tire bead quality wire rod and does not reference a lower diameter range for

wire rod. However, in previous investigations, the Commission found a single like product

consisting of all wire rod, including the certain grade 1080 tire cord and the grade 1080 tire

bead wire rod products that Commerce excluded from the scope of the investigations.33

Petitioners also contend that removal of the lower diameter limit of 5.0 millimeters does not

change the like product analysis because there was no domestic or subject foreign production

of hot‐rolled wire rod in diameters below 5.0 millimeters at the time of the 2002  

investigations. Since then, Mexican producer Deacero S.A. de C.V has started producing wire

rod in diameters of less than 5.0 millimeters.34 No U.S. producer, however, is believed to

produce wire rod in diameters of less than 5.0 millimeters.35

Respondents agree with the Commission’s previous like product definitions including

the proposed definition in these preliminary‐phase investigations.36 While Lincoln Electric does

not propose a separate like product for welding quality wire rod, it hopes that the petitioners

will voluntarily agree to exclude welding quality wire rod from the scope of these

proceedings.37   

                                                      

33 Carbon and Certain Alloy Steel Wire Rod from Brazil, Canada, Germany, Indonesia, Mexico,

Moldova, Trinidad and Tobago Turkey and Ukraine, Inv. Nos. 701‐TA‐417‐421 and 731‐TA‐953, 954, 956‐

959, 961 and 962 (Final), USITC Publication 3546, October 2002, p. 12.

34 Petitioners’ postconference brief, pp. 4‐6.

35 Conference transcript, pp. 42‐43 (Cannon and Goettl).   36 Conference transcript, p. 99 (Waite).

37 Conference transcript, pp. 100‐102 (Grace).

II‐1

PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

U.S. MARKET CHARACTERISTICS

U.S. producers and importers sell wire rod to wire drawing firms, and/or draw wire rod

internally, selling wire or wire products. U.S. production that was consumed internally or

transferred to related firms rose from *** percent of shipments in 2011 to *** percent in 2013.

Petitioners and respondents reported that the most important industrial users of wire rod were

construction, automotive, energy, and agriculture.1 These industries accounted for the majority

of U.S. demand for wire rod.2  

CHANNELS OF DISTRIBUTION

Table II‐1 presents U.S. shipments for domestically produced and imported wire rod by

distribution channel during 2011‐13. The majority of wire rod sold in the United States is

shipped to end users. U.S. shipments of wire rod to end users accounted for more than 85

percent of U.S. wire rod shipments and most wire rod imports from nonsubject countries (more

than 70 percent). Wire rod imports from China were mainly shipped to distributors in 2011 (***

percent) but by 2013, most (63.0 percent) were sold to end users.  

Table II-1 

Wire rod: U.S. producers’ and importers’ U.S. shipments, by sources and channels of distribution, 

2011-13 

Item 

Calendar year

2011 2012 2013 

Share of reported shipments (percent)

U.S. producers’ U.S. shipments of wire rod:

 Distributors 12.0 13.3 13.1

 End users 88.0 86.7 86.9

U.S. importers’ U.S. shipments of wire rod from China:

 Distributors *** *** 37.0

 End users *** *** 63.0

U.S. importers’ U.S. shipments of wire rod from all other countries:

 Distributors 16.7 28.8 25.3

 End users 83.3 71.2 74.7

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

 

1 Conference transcript, pp. 53, 106 (Goettl and Korbel). Only the respondents reported that

agriculture was a major end use for wire rod. 2 Conference transcript, pp. 53‐54 (Goettl and Stirnaman).
II‐2

GEOGRAPHIC DISTRIBUTION

Table II‐2 presents the geographic market areas served by U.S. producers and importers

of wire rod. Five of the nine responding producers but none of the importers reported selling

throughout the continental United States. The other four U.S. producers and nine importers

reported serving specific geographic regions, primarily the Midwest (all producers, five

importers) the Southeast and Central Southwest (seven importers each, and a total of eight and

seven U.S. producers, respectively). The majority of U.S. producers’ sales (79.2 percent) was

shipped between 101 miles and 1,000 miles of their production facilities, 13.5 percent was

shipped within 100 miles of their plants, and 7.3 percent was shipped over 1,000 miles.

Importers reported selling the majority of their product, 54.4 percent, within 100 miles of their

port of entry or their U.S. facilities, 43.7 percent between 101 and 1,000 miles of the port of

entry or their U.S. facilities, and only 1.8 percent was shipped over 1,000 miles from the port of

entry or the importers’ U.S. facilities.  

Table II-2 

Wire rod: Geographic market areas in the United States served by U.S. producers and importers, 

by number of responding firms 

Region U.S. producers Importers 

Northeast 8 3 

Midwest 9 5 

Southeast 8 7 

Central Southwest 7 7 

Mountain 7 0 

Pacific Coast 6 5 

Other1 1 0 

1

 All other U.S. markets, including AK, HI, PR, and VI, among others. 

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

SUPPLY AND DEMAND CONSIDERATIONS

U.S. supply

Domestic production

Based on available information, U.S. producers of wire rod have the ability to respond to

changes in demand with moderate changes in the quantity of shipments of U.S.‐produced wire

rod to the U.S. market. The main contributing factors to this degree of responsiveness of supply

are the availability of unused capacity and the ability to produce alternate products.
II‐3

Industry capacity

Domestic capacity utilization decreased irregularly from 75.5 percent in 2011 to 72.0

percent in 2013. This relatively low level of capacity utilization suggests that U.S. producers may

have moderate capacity to increase production of wire rod in response to an increase in prices.

Alternative markets

U.S. producers’ exports, as a share of total shipments, were low (less than 1 percent)

throughout 2011‐13. U.S. producers reported that exports were limited by competition in other

markets.3

Internal consumption and transfers to related firms

U.S. producers’ internal consumption increased from *** percent of total shipments in

2011 to *** percent in 2013. Their transfers to related firms increased from *** percent of

total shipments in 2011 to *** percent in 2013. Combined, these shipments ***.

Inventory levels

U.S. producers’ inventories increased from 4.9 percent of total shipments in 2011 to 7.4

percent in 2013. These inventory levels suggest that U.S. producers may have some ability to

respond to changes in demand with changes in the quantity shipped from inventories.

Production alternatives

Eight of nine responding U.S. producers stated that they could switch production from

wire rod to other products. Other products that producers reportedly produce on the same

equipment as wire rod are concrete reinforcing bar and rod (rebar) and other nonsubject bar

and rod products. The relatively large volume of these other products produced on shared

equipment increases U.S. ability to switch production to wire rod.

Chinese imports4

Based on available information, producers of wire rod from China have the ability to

respond to changes in demand with large changes in the quantity of shipments of wire rod to

the U.S. market. The main contributing factors to this degree of responsiveness of supply are

the large and increasing to produce wire rod in China and the existence of alternate markets.

 

3 Conference transcript, pp. 78‐79 (Ashby and Kirkvliet). 4 No Chinese producers responded to the foreign producer questionnaires, therefore publicly

available information is used to examine actual and potential supply of wire rod from China.
II‐4

U.S. imports of wire rod from China increased from less than 1,000 short tons in 2011 to

0.6 million short tons in 2013. Estimated Chinese production increased from 134.0 million short

tons in 2011 to 150.1 million in 2012.5

  

Chinese production of wire rod represents the majority of world wire rod production

(including nonsubject as well as subject wire rod).6 The large and increasing levels of Chinese

production indicate that Chinese producers could substantially increase sales of wire rod into

the United States.

Alternative markets

Overall, wire rod exports from China to the world increased from 3.2 million short tons

to 8.7 million short tons.7 U.S. imports represented 0.6 million short tons. The large share of

exports to other markets indicates that Chinese exports to the United States could increase if

product were shifted from other export markets. The largest export market for Chinese wire

rod was Asia; exports were also reported to Africa, Australia, Europe, North America, and South

America.  

Nonsubject imports

The largest nonsubject sources of wire rod imports during 2011‐13 were Canada and

Japan. Combined, these countries accounted for 67.7 percent of wire rod imports from

nonsubject countries in 2013.

U.S. demand

Based on available information, the overall demand for wire rod is likely to experience

moderate changes in response to changes in price. The main contributing factors are the lack of

substitute products ‐ which reduces responsiveness ‐ and the large cost share of wire rod in

most of its end‐use products which may increase the potential to import downstream products,

thus increasing demands’ responsiveness to price changes.  

End uses

The majority of wire rod is sold to wire drawers or used by related wire drawers; these

firms draw wire rod into wire that is used in a large variety of products. Demand for wire rod

depends on the demand for these many different products.  

 

5 World Steel Association’s Steel Statistical Yearbook 2013. p. 43 (metric tons converted to short

tons). Estimates were not available for 2013.

6 World Steel Association Steel Statistical Yearbook 2013. p. 43. The share of total world wire rod

production that was produced in China increased from 71.9 percent in 2011 to 74.7 percent in 2012. 7 This includes HS 7213.91, HS 7227.20, HS 7213.99, and HS 7227.90 and includes some product that

is not subject to these investigations.
II‐5

U.S. producers and importers were asked to list the end uses separately for commercial

sales and for transfers/internal consumption. Across all end uses, the most common product

was wire, followed by wire mesh.8 Other products reported by U.S. producers in both lists

include: tire cord/bead; CF bar/pencil rod; fabricated wire products; and staples, nails, and

fasteners. Products which U.S. producers only reported under commercial sales were wire rope

and prestressed concrete (PC) strand, while products U.S. producers only reported in the

transfers/internal consumption list included ***. Importers listed nails, chain link fence, and

threaded rod only for sales to unrelated end users and listed *** for transfers/internal

consumption.

Business cycles

Short‐term demand for wire rod tends to be cyclical and follow trends in construction

activity. In addition, the level of imports of downstream product will influence demand for wire

rod. Four of nine responding U.S. producers and 5 of 13 responding importers indicated that

the market was subject to business cycles. Specifically, two producers and one importer

reported seasonal demand, two producers and three importers reported demand related to

construction activity; other related sectors included the auto, agricultural, energy, and mobile

equipment sectors. One producer reported that wire rod demand faced distinct conditions of

competition (an import surge from China). Changes in important conditions were reported by

five producers, and one importer. Four producers described the changes: two of these reported

that Chinese imports have caused the conditions of competition to change since 2011; one

reported that demand has not yet recovered from the recession, and one (***) reported that it

had ***. The one importer that reported there had been changes in conditions of competition

listed specific changes in U.S. producers’ levels of production.9  

Apparent U.S. consumption

Apparent U.S. consumption of wire rod increased unevenly during 2011‐13. Overall,

apparent U.S. consumption in 2013 was 3.5 percent higher than in 2011.  

Demand trends

Table II‐3 presents U.S. producers’ and importers’ perceptions of trends in demand for

wire rod since 2011. Five of the 10 responding importers and two producers reported that  

 

8 U.S. producers and importers reported wire for both sales to unrelated end users and

transfers/internal consumption. U.S. producers reported wire mesh for sales to unrelated end users and

transfers/internal consumption; importers reported wire mesh only for sales to unrelated end users.

9 It stated that “The Nucor Corporation has made an investment in new equipment at its mill in

Darlington, SC. This location previously produced bar products but has entered the wire rod market with

the installation of this new equipment. This investment is creating more competition in this region of

the U.S. The ArcelorMittal USA in Georgetown, SC mill was shut down due to labor related issues. After

successful union negotiations, the mill restarted ***.”
II‐6

Table II-3 

Wire rod: Firms’ responses regarding U.S. demand, by number of responding firms 

Item Increase No change Decrease Fluctuate 

Demand in the United States 

U.S. producers 2 2 4 0 

Importers 5 2 0 3 

Demand outside the United States 

U.S. producers 0 0 2 4 

Importers 3 1 0 4 

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

demand had increased since 2011, four producers reported demand had decreased, two

producers and two importers reported demand was unchanged, and three importers reported

demand had fluctuated. Producers reported demand had increased as the economy has slowly

recovered from the recession, while importers cited increased construction activity, recovery

from the recession, more downstream products produced in the United States because of

duties on Chinese finished wire products, and increased consumption. Three of the four

producers reporting declining U.S. demand reported that it was because demand had not

recovered from the recession, while the other reported demand had declined because of

imports.

Four of the eight responding importers and four of the five responding U.S. producers

reported that demand outside the United States had fluctuated, three importers reported

demand outside the United States had increased, one importer reported demand was

unchanged, and two U.S. producers reported demand had decreased. All three importers

reporting growing demand gave reasons including growth in China and Latin America, growth in

developing and Asian countries, and increased consumption. Two importers gave reasons for

fluctuations in demand including economic volatility/fluctuations and uncertainty. The only U.S.

producer explaining its response reported demand declined because demand had not yet

recovered from the recession of 2008.

Substitute products

No U.S. producer or importer reported any substitutes for wire rod. There is no

substitute for wire rod in the production of wire. There are substitutes, however, in the uses of

wire and by the import of downstream products. For example, wire hangers could be imported

or plastic hangers could be used in the place of wire hangers. The viability of these potential

substitutes in end use will be determined by end use.

Cost share

The cost of wire rod tends to be a large share of the cost of products produced from it,

although cost shares vary widely due to the wide range of products that use wire rod.
II‐7

Producers and importers were both asked to provide cost shares of products from commercial

sales to end users and for transfers/internal consumption. Eight producers and nine importers

reported cost share information for products reported by multiple firms include:10

 60 to 85 percent of the cost of various types of wire

 65 to 95 percent of the cost of various meshes

 45 to 85 percent of the cost of nails, staples, and fasteners

 60 to 80 percent of the cost of chain link and barbed wire for fencing

 *** percent of the cost of tire cord/tire bead

SUBSTITUTABILITY ISSUES

The degree of substitution between domestic and imported wire rod depends upon

such factors as relative prices, quality (e.g., grade standards, reliability of supply, defect rates,

etc.), and conditions of sale (e.g., price discounts/rebates, lead times between order and

delivery dates, payment terms, product services, etc.). Based on available information, staff

believes that, where there are identical forms of wire rod, there is usually a high degree of

substitution between domestic wire rod and subject imports. For common types of wire rod

(such as industrial or standard quality), product typically will be highly substitutable with other

product of the same specification even when the products are not identical, although there

may be a need for retooling of the process to adjust to small differences. For specialty grades,

however, not all sources can produce each product, and even differences between wire rod

with the same specifications from different sources may limit the degree of substitution.11

Lead times

Wire rod is primarily produced to order. U.S. producers and importers reported that

97.0 and 99.4 percent of their commercial shipments (respectively) were produced to order.

U.S. producers reported their produced‐to‐order lead times ranged from 15 to 50 days (five of

the eight responding producers reported lead times of 15 to 30 days). Importers reported

produced‐to‐order lead times ranged from 60 to 120 days (three of five responding importers

reporting lead times of 120 days). The remaining 3.0 percent of U.S. producers’ commercial

shipments came from inventories, with lead times of 3 to 5 days. Only 0.5 percent of importers’

sales came from inventories (no importer reported the lead times from inventories) and 0.1

percent from overseas inventories. The only importer selling from overseas inventories

reported its lead time was *** days.

 

10 Seven of the 11 products reported by only one firm had cost shared of 60 percent or higher and

the remaining four had cost shares of less than 50 percent. 11 Carbon and Certain Alloy Steel Wire Rod From Brazil, Canada, Germany, Indonesia, Mexico,

Moldova, Trinidad and Tobago, Turkey, and Ukraine: Investigation Nos. 701‐TA‐417 and 731‐TA‐953,

954, 957‐959, 961, and 962 (Review), USITC Publication 4014, June 2008, p. II‐11.
II‐8

Comparisons of domestic products, subject imports, and nonsubject imports

Comparison of U.S.‐produced and imported wire rod

In order to determine whether U.S.‐produced wire rod can generally be used in the

same applications as imports from China, U.S. producers and importers were asked whether

the products can “always,” “frequently,” “sometimes,” or “never” be used interchangeably. As

shown in table II‐4, most U.S. producers reported that wire rod from all country pairs was

always interchangeable, while most importers reported that wire rod from all countries pairs

was frequently interchangeable. Differences reported included: “if very specific tensiles and

tight tolerances are required, Chinese wire rod is not always fungible with US or Canadian

rods;” “quality, availability, technical support, and auto‐maker's approvals are significant

factors as it determines performance of the final products;” “In the one event we purchase rod

from China it was for a China customer that requested rod be produced in China;” “imports to

the U.S. were for specialized end uses, such as cold heading quality wire rod, high carbon wire

rod, or tire cord wire rod (where) there is negligible overlap with Chinese wire rod (due to

differences in) mechanical property attainment, conformity to chemistry specification, or

compliance to surface quality requirement, or any combination thereof.”12

Table II-4 

Wire rod: Interchangeability between wire rod produced in the United States and in other 

countries, by country pairs 

Country pair 

Number of U.S. producers 

reporting 

Number of U.S. 

importers reporting 

A F S N A F S N 

U.S. vs. subject countries: 

 U.S. vs. China 9 0 0 0 3 7 2 0 

Nonsubject countries comparisons: 

 U.S. vs. Canada 9 0 0 0 0 6 2 0 

 U.S. vs. other nonsubject 8 1 0 0 0 8 2 1 

 China vs. Canada 8 0 0 0 1 4 2 0 

 China vs. other nonsubject 8 0 0 0 0 6 2 0 

 Canada vs. other nonsubject 8 0 0 0 0 4 2 0 

Note.—A=Always, F=Frequently, S=Sometimes, N=Never.

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

In addition, producers and importers were asked to assess how often differences other

than price were significant in sales of wire rod from the United States, China, and nonsubject

Canada or other countries. As presented in table II‐5, most producers reported that there were

“never” differences other than price, while most importers reported that there were either

“frequently” or “sometimes” differences other than price. Differences included: metric vs

 

12 In addition, ***.
II‐9

imperial sizes; Chinese‐added boron precludes some applications; cold heading quality, high

carbon, and tire cord wire rod, are more available from the United States than China; delivery

time reliability; lead time; mill production flow; quality is always first priority; Canadian rod

made from QIT billets13 is not available from U.S. producers; and no direct importation from

Canada.

Table II-5 

Wire rod: Significance of differences other than price between wire rod produced in the United 

States and in other countries, by country pair 

Country pair 

Number of U.S. 

producers reporting 

Number of U.S. 

importers reporting 

A F S N A F S N 

U.S. vs. subject countries: 

 U.S. vs. China 0 0 0 9 2 3 5 1 

Nonsubject countries comparisons: 

 U.S. vs. Canada 0 0 1 8 1 3 2 0 

 U.S. vs. other nonsubject 0 0 2 7 2 4 3 0 

 China vs. Canada 0 0 1 7 1 1 2 1 

 China vs. other nonsubject 0 0 1 7 1 3 2 1 

 Canada vs. other nonsubject 0 0 1 7 1 1 2 1 

Note.—A=Always, F=Frequently, S=Sometimes, N=Never.

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

 

13 QIT billets are high purity billets produced from blast furnace steel and purchased from Quebec

Iron and Titanium. http://www.sorelmetal.com/en/about/frset_about.htm, retrieved February 27, 2014.  

III‐1

PART III: U.S. PRODUCERS’ PRODUCTION, SHIPMENTS, AND

EMPLOYMENT

The Commission analyzes a number of factors in making injury determinations (see 19

U.S.C. §§ 1677(7)(B) and 1677(7)(C)). Information on the alleged subsidies was presented in

Part I of this report and information on the volume and pricing of imports of the subject

merchandise is presented in Part IV and Part V. Information on the other factors specified is

presented in this section and/or Part VI and (except as noted) is based on the questionnaire

responses of ten firms that accounted for the all U.S. production of wire rod during 2013.1

U.S. PRODUCERS

The Commission sent U.S. producer questionnaires to ten firms based on information

contained in the petition. All ten firms provided useable data on their productive operations2

and represent all U.S. production of wire rod during 2011 through 2013.  

Table III‐1 lists U.S. producers of wire rod, their production locations, positions on the

petition, total production, and shares of total production.  

                                                      

1 Petition, Vol. 1, pp. 2‐5 and Exhibit GEN‐1. 2 ***.
III‐2

Table III-1 

Wire rod: U.S. producers of wire rod, their positions on the petition, production locations, and 

shares of reported production, 2011-13 

Firm Position on petition Production location(s) 

Share of production 

(percent) 

ArcelorMittal1 Petitioner 

Georgetown, SC 

Chicago, IN ***

Cascade2 *** McMinnville, OR ***

Charter3 Petitioner 

Saukville, WI 

Fostoria, OH 

Cuyahoga Heights, OH ***

Evraz4 Petitioner Pueblo, CO ***

Gerdau5 Petitioner 

Beaumont, TX 

Jacksonville, FL 

Perth Amboy, NJ (idled) ***

Keystone6 Petitioner Peoria, IL ***

Mid American *** Madill, OK ***

Nucor Petitioner 

Wallingford, CT 

Norfolk, NE 

Kingman, AZ 

Darlington, SC ***

Republic7 *** Lorain, OH ***

Sterling8 *** Sterling, IL ***

Total 100.0

1 ArcelorMittal is ***. 

2 Cascade is ***. 

3 Charter is ***. 

4 Evraz is ***. 

5 Gerdau is ***. 

6 Keystone is ***. 

7 Republic is ***. 

8 Sterling is ***. 

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

As indicated in table III‐1, no U.S. producers are related to producers of wire rod in

China and no U.S. producers are related to U.S. importers of wire rod from China. In addition,

no U.S. producers directly import wire rod from China or purchase Chinese wire rod from U.S.

importers.  

Producers were asked to report any changes in operations since January 2011. Table III‐

2 presents selected information regarding the U.S. wire rod industry during 2011‐13.
III‐3

Table III-2 

Wire rod: Selected U.S. industry events, 2011-13 

Year Firm Event 

2011 ArcelorMittal 

Plant reopening: ArcelorMittal reopened its Georgetown, SC 

plant after a shutdown from June 2009 through January 2011.1

2012 Charter ***. 

2012 ArcelorMittal 

Production curtailment: In Q4 2012, ArcelorMittal reduced 

operations at its Georgetown, SC mill by one third and laid off 40 

workers due to market conditions.2

2013 Mid American ***. 

2013 Keystone 

Production curtailment: Keystone had four one-week rolling mill 

shutdowns and nine one-week melt shop shutdowns laying off all 

workers who make wire rod during those shutdowns.3

2013 Nucor 

Expansion: Installed a new wire rod rolling mill in Darlington, SC 

and started production in late 2013.4 The new mill has a capacity 

of 300,000 short tons. 5

2011-13 Cascade ***.

2011-13 Nucor ***. 

2011-13 Nucor ***. 

2011-13 Mid American ***. 1 Conference transcript, p. 23 (Fuller). 

2 Conference transcript, p. 24 (Fuller). 

3 Conference transcript, pp. 14-15 (Stirnaman). 

4

 Conference transcript, pp. 17-18 (Nystrom), and Nucor’s postconference brief, p. 5, no 20. 

5 AWPA’s postconference brief, Exhibit 9, “Nucor’s new rod mill begins shipments,” American Metal 

Market, October 9, 2013. 

Source: Cited sources and compiled from data submitted in response to Commission questionnaires. 

U.S. PRODUCTION, CAPACITY, AND CAPACITY UTILIZATION

Table III‐3 and figure III‐1 present U.S. producers’ capacity, production, and capacity

utilization during 2011‐13. U.S. capacity for wire rod decreased between 2011 and 2013 by 1.9

percent, while production decreased by 6.5 percent between 2011 and 2013. Most firms did

not report changes in capacity; however ***.3 ***. In addition, Gerdau testified that it has one

facility idled since 2009 in Perth Amboy, New Jersey that is almost entirely dedicated to wire

rod production, and has a capacity of 750,000 short tons.4 While most firms reported decreases

in production over the period, four firms, *** reported modest increases in production from

2011 and 2013, ranging between *** and *** percent.

                                                      

3 ***.

4 Conference transcript, p. 41 (Kerkvliet). It would take approximately ***. Petitioners’

postconference brief, p. 23, no. 14.
III‐4

Table III-3 

Wire rod: U.S. producers’ capacity, production, and capacity utilization, 2011-13 

Item 

Calendar year 

2011 2012 2013 

 Quantity (short tons) 

Capacity 5,173,168 5,131,954 5,073,815

Production 3,907,416 3,879,060 3,655,088

 Ratio (percent) 

Capacity utilization 75.5 75.6 72.0

Note.— ***. 

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

Figure III-1 

Wire rod: U.S. producers’ capacity, production, and capacity utilization, 2011-13 

 

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

Reported constraints in the manufacturing process for the U.S. producers include

melting capacity, which is constrained by environmental air permits; steel availability; speed of

equipment, and rolling capacity. Most U.S. producers noted that they are not operating at full

capacity due to the market conditions and that weakened demand due to import competition

limits their ability to produce more wire rod.

All producers *** reported production or anticipating production of other products,

including rebar, on the same equipment and machinery used to produce wire rod. Table III‐4

and figure III‐2 present U.S. producers’ overall capacity and production of other products

produced on the same production equipment used to produce wire rod. U.S. producers were

asked to describe the constraints that set the limits on their firm’s ability to shift production

capacity between products. *** stated that they can readily shift between coiled reinforcing

bar and coiled carbon wire rod, while *** stated that it cannot easily shift production and ***

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

2011 2012 2013

Calendar year

Ratio

(percent)

Quantity

(short tons)

Capacity (left-axis) Production (left-axis) Capacity utilization (right-axis)
III‐5

indicated that is has some ability to shift between wire rod and rebar. *** ability to switch

production is dependent on customer demand for those products. Charter stated ***.

Table III-4 

Wire rod: U.S. producers’ overall capacity, production, and capacity utilization, 2011-13 

Item 

Calendar year 

2011 2012 2013 

 Quantity (short tons) 

Overall capacity 7,918,772 8,010,018 8,918,066

Production: 

 Subject wire rod 3,907,416 3,879,060 3,655,088

Nonsubject products: 

 Rebar 808,532 879,761 1,070,115

All other products 1,123,174 1,122,994 1,488,908

Subtotal, nonsubject production 1,931,706 2,002,755 2,559,023

Total production 5,839,122 5,881,815 6,214,111

 Ratio (percent) 

Overall capacity utilization 73.7 73.4 69.7

 Share of quantity (percent) 

Share of production: 

 Subject wire rod 66.9 66.0 58.8

Nonsubject products: 

 Rebar 13.8 15.0 17.2

All other products1 19.2 19.1 24.0

Subtotal, nonsubject production 33.1 34.0 41.2

Total production 100.0 100.0 100.0

Note.— ***. 

Source: Compiled from data submitted in response to Commission questionnaires. 
III‐6

Figure III-2 

Wire rod: U.S. producers' shifting of production, 2011-13 

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

U.S. PRODUCERS’ SHIPMENTS

Table III‐5 presents U.S. producers’ U.S. shipments, export shipments, and total

shipments. The quantity of U.S. producers’ U.S. shipments decreased from 2011 to 2013 by 7.1

percent. The value of U.S. producers’ U.S. shipments decreased as well from 2011 to 2013 by

16.0 percent. The unit values of U.S. shipments decreased by 9.6 percent from 2011 to 2013.

U.S. producers reported exports to be less than one percent of total shipments during 2011‐13.

Five out of ten producers reported exporting, predominately to Canada and Mexico, as well as

to ***. U.S. producers contend that it is hard to compete in the export market due to lower

priced product, particularly from the Chinese producers. Evraz does export some high end value

products to Mexico.5

                                                      

5 Conference transcript, pp. 78‐79 (Ashby and Kirkvliet).  

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

2011 2012 2013

Calendar year

Quantity

(short tons)

Wire rod All other products
III‐7

Table III-5 

Wire rod: U.S. producers’ U.S. shipments, export shipments, and total shipments, 2011-13 

Item 

Calendar year 

2011 2012 2013 

 Quantity (short tons) 

Commercial U.S. shipments 2,944,416 2,815,567 2,595,200

Internal consumption *** *** ***

Transfers to related firms *** *** ***

Subtotal, U.S. shipments 3,876,145 3,809,728 3,599,459

Export shipments 34,687 26,748 24,319

Total shipments 3,910,832 3,836,476 3,623,778

 Value (1,000 dollars) 

Commercial U.S. shipments 2,340,739 2,143,895 1,875,625

Internal consumption *** *** ***

Transfers to related firms *** *** ***

Subtotal, U.S. shipments 3,012,054 2,826,974 2,529,487

Export shipments 28,888 31,597 22,566

Total shipments 3,040,942 2,858,571 2,552,053

 Unit value (dollars per short ton) 

Commercial U.S. shipments 795 761 723

Internal consumption *** *** ***

Transfers to related firms *** *** ***

Subtotal, U.S. shipments 777 742 703

Export shipments 833 1,181 928

Total shipments 778 745 704

 Share of quantity (percent) 

Commercial U.S. shipments 75.3 73.4 71.6

Internal consumption *** *** ***

Transfers to related firms *** *** ***

Subtotal, U.S. shipments 99.1 99.3 99.3

Export shipments 0.9 0.7 0.7

Total shipments 100.0 100.0 100.0

 Share of value (percent) 

Commercial U.S. shipments 77.0 75.0 73.5

Internal consumption *** *** ***

Transfers to related firms *** *** ***

Subtotal, U.S. shipments 99.1 98.9 99.1

Export shipments 0.9 1.1 0.9

Total shipments 100.0 100.0 100.0

 Source: Compiled from data submitted in response to Commission questionnaires. 
III‐8

U.S. shipments by application

Table III‐6 presents U.S. producers’ U.S. shipments by type in 2013. Most U.S. producers

reported U.S. shipments of both high/medium‐high carbon industrial/standard and low/

medium‐low carbon industrial/standard quality wire rod. Evraz produces low carbon mesh and

industrial grade wire rod, however its product mix is weighted heavily toward high and medium

carbon steels. Evraz also produces medium carbon grades of wire rod for the furniture and

bedding spring rod business as well as high carbon rod for the making of PC strand, rubber re‐

enforcement and wire row. In addition, Evraz produces welding quality wire rod.6 Gerdau

produces a wide variety of wire rod types ranging from low to high carbon rod, welding rod,

cold‐heading quality rod and many other special types of rod as well.7 ArcelorMittal makes a

wide variety of wire rod grades at its facilities, including low, medium, high carbon, tire cord,

tire bead, and welding wire rod.8

  

U.S. producers were asked to describe the qualitative differences among the different

types of wire rod. Three firms said there were no or little differences. Other firms stated that

wire rod is on a continuum of grades, qualities, chemistry variances, and end uses and that the

qualitative differences between each relate to charge design and scrap cost to create a higher

carbon product. One firm stated that some overlap occurs especially if higher quality materials

are used in a lower quality application. For example, cold heading quality could be used in some

industrial quality applications or welding wire could be used in industrial quality applications.

One firm stated that cold heading quality, other special carbon and alloy, and tire cord are the

highest quality.   

                                                      

6 Conference transcript, p. 26 (Ashby). 7 Conference transcript, p. 12 (Kerkvliet).

8 Conference transcript, p. 22 (Fuller).
III‐9

Table III-6 

Wire rod: U.S. producers’ U.S. shipments, by type, 2013 

Item 

2013

Commercial 

shipments 

Internal 

consumption

Transfers 

to related 

firms U.S. shipments 

 Quantity (short tons) 

Number 

of firms 

U.S. shipments of wire rod of: 

 Low/medium-low carbon industrial/standard 

 quality 1,139,810 *** *** 1,768,914 9

High/medium-high carbon 

industrial/standard quality 685,917 *** *** 1,002,954 10

Tire cord quality or tire bead quality *** *** *** *** ***

Welding quality *** *** *** *** ***

Cold heading quality (CHQ) *** *** *** *** ***

Other specialty carbon and alloy quality *** *** *** *** ***

All others *** *** *** *** ***

Total U.S. shipments 2,595,201 *** *** 3,599,460 10

 

Share of shipments by shipment type (percent 

down) 

 

U.S. shipments of wire rod of: 

 Low/medium-low carbon industrial/standard 

 quality 43.9 *** *** 49.1 

High/medium-high carbon 

industrial/standard quality 26.4 *** *** 27.9 

Tire cord quality or tire bead quality *** *** *** *** 

Welding quality *** *** *** *** 

Cold heading quality (CHQ) *** *** *** *** 

Other specialty carbon and alloy quality *** *** *** *** 

All others *** *** *** *** 

Total U.S. shipments 100.0 100.0 100.0 100.0 

 

Share of shipments by product type (percent 

across) 

U.S. shipments of wire rod of: 

 Low/medium-low carbon industrial/standard 

 quality 64.4 *** *** 100.0 

High/medium-high carbon 

industrial/standard quality 68.4 *** *** 100.0 

Tire cord quality or tire bead quality *** *** *** 100.0

Welding quality *** *** *** 100.0

Cold heading quality (CHQ) *** *** *** 100.0

Other specialty carbon and alloy quality *** *** *** 100.0

All others *** *** *** 100.0

Total U.S. shipments 72.1 *** *** 100.0 

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

   
III‐10

U.S. producers reportedly do not produce grade 1080 tire cord wire rod.9 Certain mills in

China are believed to be able to produce this product.10 *** U.S. producers produce cold

heading quality (CHQ) wire rod. U.S. producers indicate that this is a niche market in the United

States which has not seen imports from during 2011‐13.11

CAPTIVE CONSUMPTION

Section 771(7)(C)(iv) of the Act states that–

If domestic producers internally transfer significant production of the

domestic like product for the production of a downstream article and sell

significant production of the domestic like product in the merchant

market, and the Commission finds that–

(I) the domestic like product produced that is internally transferred

for processing into that downstream article does not enter the

merchant market for the domestic like product,

(II) the domestic like product is the predominant material input in the

production of that downstream article, and

(III   the production of the domestic like product sold in the merchant

market is not generally used in the production of that downstream

article,

then the Commission, in determining market share and the factors

affecting financial performance . . ., shall focus primarily on the merchant

market for the domestic like product.  

Transfers and sale of significant production of the domestic like product  

As reported in table III‐5 above, internal consumption accounted for between *** and

*** percent of U.S. producers’ U.S. shipments of wire rod; transfers to related firms accounted

for between *** and *** percent.12 Seven firms, ***, reported internally consuming or

transferring wire rod to a related firm to produce a downstream product. Commercial U.S.

shipments accounted for between 75.3 and 71.6 percent of total shipments and, in contrast to

internal consumption and transfers to related firms, declined from 2011 to 2013.  

                                                      

9 Grade1080 tire cord wire rod was excluded from the scope of previous wire rod investigations.

10 Conference transcript, p. 92 (Korbel). 11 Conference transcript, p. 78 (Cannon). 12 ***.
III‐11

Domestic producers note that the Commission should consider the significant level of

internal transfers to comprise a relevant condition of competition and should examine both the

total industry and the merchant market sector in assessing the impact of wire rod imports from

China.13

First statutory criterion

The first requirement for application of the captive consumption provision is that the

domestic like product that is internally transferred for processing into that downstream article

not enter the merchant market for the domestic like product. U.S. producers reported internal

consumption and company transfers of wire rod for the production of nails, garment hangers,

wire shelving, prestressed concrete strand, oil tempered and other high carbon wire, drawn

wire (including tire bead, high carbon and fine wire quality), cold finished bars, cold headed

parts, mesh, agricultural fencing, armoring wire, galvanized wire, concrete reinforcing mesh,

and bed spring components. One U.S. producer (***), however, reported diverting ***14 of

wire rod intended for internal consumption to the merchant market for the production of ***.

Second statutory criterion

The second criterion of the captive consumption provision concerns whether the

domestic like product is the predominant material input in the production of the downstream

article that is captively produced. With respect to the downstream articles resulting from

captive production, wire rod reportedly typically comprises 70‐80 percent of the finished cost

of mesh, industrial wire, welded wire reinforcement, drawn wire, and fencing products. U.S.

producers also reported producing other downstream articles resulting from captive

production, where wire rod comprised between 28 and 90 percent of the finished product.

Third statutory criterion

The third criterion of the captive consumption provision is that the production of the

domestic like product sold in the merchant market is not generally used in the production of

the downstream article. The share of U.S. producers’ captive shipments internally transferred

for processing into the same downstream wire products that their customers for wire rod

manufacture was 50.2 percent.15 The six producers16 reporting merchant sales of wire rod used

                                                      

13 Domestic producers’ postconference brief, p. 13. 14 This represents only *** percent of internal consumption and transfers to related firms in 2013.

Such shipments in 2013 were *** short tons.

15 Total captive shipments totaled *** short tons. The following firms reported their shares as ***.

Applying these shares, 2013 captive shipments that are produced into products that compete with U.S.

producers’ customers totaled *** short tons.

16 ***.
III‐12

by its customers to produce the same downstream product that it produces from captively

produced wire rod reported shares ranging from 7 to 100 percent.

U.S. PRODUCERS’ INVENTORIES

Table III‐7 presents U.S. producers’ end‐of‐period inventories and the ratio of these

inventories to U.S. producers’ production, U.S. shipments, and total shipments over 2011‐13.

U.S. producers’ inventories of wire rod increased by 38.1 percent from 2011 to 2013.

Inventories relative to total shipments increased by 2.5 percentage points from 2011 to 2013.  

Table III-7 

Wire rod: U.S. producers’ inventories, 2011-13 

Item 

Calendar year 

2011 2012 2013 

 Quantity (short tons) 

U.S. producers' end-of-period inventories 193,261 235,846 266,868

 Ratio (percent) 

Ratio of inventories to.-- 

 U.S. production 4.9 6.1 7.3

 U.S. shipments 5.0 6.2 7.4

Total shipments 4.9 6.1 7.4

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

U.S. EMPLOYMENT, WAGES, AND PRODUCTIVITY

Table III‐8 shows U.S. producers’ employment‐related data during 2011‐13. Almost all

employment‐related indicators decreased from 2011 to 2013. The level of production‐related

workers (PRWs) decreased by 2.1 percent; total hours worked decreased by 4.9 percent; wages

paid decreased by 5.7 percent; and productivity decreased by 1.6 percent. Hourly wages and

unit labor costs increased in 2012, but declined in 2013.
III‐13

Table III-8 

Wire rod: Average number of production and related workers, hours worked, wages paid to such 

employees, hourly wages, productivity, and unit labor costs, 2011-13 

Item 

Calendar year 

2011 2012 2013 

Production-related workers (PRWs) (number) 2,239 2,269 2,192

Total hours worked (1,000 hours) 4,552 4,587 4,329

Hours worked per PRW (hours) 2,033 2,022 1,975

Wages paid ($1,000) 166,385 174,648 156,838

Hourly wages (dollars per hour) $36.55 $38.07 $36.23

Productivity (short tons per 1,000 hours) 858.4 845.7 844.3

Unit labor costs (dollars per short ton) $42.58 $45.02 $42.91

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

IV‐1

PART IV: U.S. IMPORTS, APPARENT U.S. CONSUMPTION, AND MARKET

SHARES

U.S. IMPORTERS

The Commission issued importer questionnaires to 26 firms believed to be importers of

subject wire rod, as well as to all U.S. producers of wire rod.1 Usable questionnaire responses

were received from 13 companies, representing 97.5 percent of total imports from China and

40.8 percent from nonsubject sources between 2011 and 2013 entered under the relevant HTS

statistical reporting numbers.2 Table IV‐1 lists all responding U.S. importers of wire rod from

China and other sources, their locations, and their shares of U.S. imports in 2013.  

 

1 The Commission issued questionnaires to those firms identified in the petition, along with firms

that, based on a review of data provided by U.S. Customs and Border Protection (“Customs”), may have

accounted for more than one percent of total imports under HTS subheadings 7213.91.3011,

7213.91.3015, 7213.91.3020, 7213.91.3093; 7213.91.4500, 7213.91.6000, 7213.99.0030, 7227.20.0030,

7227.20.0080, 7227.90.6010, 7227.90.6020, and 7227.90.6085 in 2011, 2012, or 2013.   2 Coverage was based on proprietary Customs data. The Commission received questionnaires from

12 importers of wire rod from China, including the top five importers, and from nine importers of wire

rod from nonsubject sources, including the *** nonsubject importer from Canada (representing ***

percent of total nonsubject imports in 2011‐13).  
IV‐2

Table IV-1 

Wire rod: U.S. importers by source, 2011-13 

Firm Headquarters 

Share of reported imports 

by source (percent) 

China 

All other 

sources 

Bekaert Corp.1 Orrville, OH *** ***

C&F International Inc.2 Houston, TX *** ***

Commercial Metals Co.3 Irving, TX *** ***

Duferco Steel Inc.4 Matawan, NJ *** ***

Heico 2004 Member Inc.5 L'Orignal, ON (Canada) *** ***

Kurt Orban Partners LLC Burlingame, CA *** ***

Lincoln Electric Company Cleveland, OH *** ***

Macsteel International USA Corp.6 White Plains, NY *** ***

Metal One America, Inc. Rosemont, IL *** ***

Stemcor USA Inc.7 New York, NY *** ***

Stena Metal Inc.8 Stamford, CT *** ***

Tata Steel International (North America) Ltd.9 Schaumburg, IL *** ***

Tree Island Wire USA, Inc.10 Walnut, CA *** ***

Total 100.0 100.0

1

Bekaert is ***. 

2

C&F International is ***. 

3

Commercial Metals is related to ***. 

4

Duferco is ***. 

5

Heico 2004 Member is ***. 

6

Macsteel is ***. 

7

Stemcor USA is ***. 

8

Stena Metal is ***. 

9

Tata Steel International (North America) is ***. 10Tree Island Wire USA is ***. 

Source: Compiled from data submitted in response to Commission questionnaires. 
IV‐3

U.S. IMPORTS  

U.S. imports from China and from nonsubject countries

Table IV‐2 presents data for U.S. imports of wire rod from China and all other sources.

U.S. import data are compiled from official import statistics based on HTS statistical reporting

numbers 7213.91.3011, 7213.91.3015, 7213.91.3020, 7213.91.3093; 7213.91.4500,

7213.91.6000, 7213.99.0030, 7227.20.0030, 7227.20.0080, 7227.90.6010, 7227.90.6020, and

7227.90.6085. Imports of wire rod from China increased from 144 short tons in 2011 to more

than 600,000 short tons in 2013. Imports of wire rod from nonsubject sources decreased by

13.1 percent between 2011 and 2013, while total imports of wire rod increased by 36.3

percent.

Table IV‐2 also presents data on the ratio of U.S. imports to U.S. production. Imports of

wire rod from China were equivalent to 16.9 percent of U.S. production in 2013, while they

were less than 0.05 percent in 2011. Imports of wire rod from nonsubject sources were

equivalent to 29.8 percent of U.S. production in 2013, a decrease of 2.3 percentage points since

2011. Total imports of wire rod were equivalent to 46.7 percent of U.S. production in 2013, an

increase of 14.6 percentage points since 2011.

Table IV‐3 presents data for U.S. imports of wire rod from the top five nonsubject

sources. Imports of wire rod from nonsubject sources decreased by 13.1 percent from 2011 to

2013. The leading nonsubject source of wire rod imports is Canada, which accounted for 28.1

percent of total imports in 2013.
IV‐4

Table IV-2 

Wire rod: U.S. imports by source, 2011-13 

Item 

Calendar year 

2011 2012 2013 

 Quantity (short tons) 

U.S. imports from.-- 

 China 144 241,938 618,818

Nonsubject sources 1,253,533 1,276,955 1,089,818

Total U.S. imports 1,253,677 1,518,893 1,708,635

 Value (1,000 dollars)

1

U.S. imports from.-- 

 China 162 146,221 335,879

Nonsubject sources 1,142,676 1,115,063 895,764

Total U.S. imports 1,142,838 1,261,284 1,231,643

 Unit value (dollars per short ton) 

U.S. imports from.-- 

 China 1,123 604 543

Nonsubject sources 912 873 822

Total U.S. imports 912 830 721

 Share of quantity (percent) 

U.S. imports from.-- 

 China (2

) 15.9 36.2

Nonsubject sources 100.0 84.1 63.8

Total U.S. imports 100.0 100.0 100.0

 Share of value (percent) 

U.S. imports from.-- 

 China (2

) 11.6 27.3

Nonsubject sources 100.0 88.4 72.7

Total U.S. imports 100.0 100.0 100.0

 Ratio to U.S. production (percent) 

U.S. imports from.-- 

 China (2

) 6.2 16.9

Nonsubject sources 32.1 32.9 29.8

Total U.S. imports 32.1 39.2 46.7

1 Landed, duty-paid. 

2 Less than 0.05 percent. 

Note.—Because of rounding, figures may not add to the totals shown. 

 

Source: Compiled from official Commerce statistics, HTS statistical reporting numbers 7213.91.3011, 

7213.91.3015, 7213.91.3020, 7213.91.3093; 7213.91.4500, 7213.91.6000, 7213.99.0030, 7227.20.0030, 

7227.20.0080, 7227.90.6010, 7227.90.6020, and 7227.90.6085. HTS statistical reporting number 

7227.90.6085 is a broader category and may contain out of scope product including circular alloy bars 

and rods with a diameter of 19 mm or more and shapes other than circular. 
IV‐5

Table IV-3 

Wire rod: Nonsubject imports by source, 2011-13 

Item 

Calendar year 

2011 2012 2013 

 Quantity (short tons) 

U.S. imports from major nonsubject 

sources.-- 

 Canada 501,045 491,131 480,784

Japan 236,084 262,265 257,503

Brazil 116,513 102,517 96,639

Germany 91,884 72,546 73,002

United Kingdom 46,323 70,107 56,395

All other nonsubject sources 261,684 278,389 125,494

Imports from nonsubject sources 1,253,533 1,276,955 1,089,818

 Share of total imports (percent) 

U.S. imports from major nonsubject 

sources.-- 

 Canada 40.0 32.3 28.1

Japan 18.8 17.3 15.1

Brazil 9.3 6.7 5.7

Germany 7.3 4.8 4.3

United Kingdom 3.7 4.6 3.3

All other nonsubject sources 20.9 18.3 7.3

Imports from nonsubject sources1 2 100.0 84.1 63.8

1 Share of total imports (including imports from China). 

2 Nonsubject share of total imports in 2011 was less than 100 percent but greater than 99.95 percent. 

Note.—Because of rounding, figures may not add to the totals shown. 

Source: Compiled from official Commerce statistics, HTS statistical reporting numbers 7213.91.3011, 

7213.91.3015, 7213.91.3020, 7213.91.3093; 7213.91.4500, 7213.91.6000, 7213.99.0030, 7227.20.0030, 

7227.20.0080, 7227.90.6010, 7227.90.6020, and 7227.90.6085. HTS statistical reporting number 

7227.90.6085 is a broader category and may contain out of scope product including circular alloy bars 

and rods with a diameter of 19 mm or more and shapes other than circular. 
IV‐6

U.S. shipments of imports by application  

Table IV‐6 presents share data on U.S. shipments of imported wire rod in 2013. Nine out

of 13 responding U.S. importers reported shipping low/medium‐low carbon industrial/standard

quality wire rod from China, while six out of 13 responding U.S. importers reported shipping

this type from nonsubject sources. *** U.S. importers reported shipping cold heading quality

(CHQ) wire rod from China. Lincoln Electric accounts for *** of the imports of welding quality

wire rod from China; the company reported that such imports were high‐quality specifications

not currently produced in the United States.3 U.S. producer Evraz observed that wire rod from

China in 2012 appeared to be primarily low carbon and mesh grades but over the course of the

last two years it has seen a move toward the medium and high carbon grades of wire rod.4

 

3 Lincoln did note that U.S. producers *** are qualified to supply welding quality wire rod to Lincoln.

Lincoln imports welding quality wire rod from ***. Lincoln’s postconference brief, pp. 2 and 4‐5.

Conference transcript, p. 87 (DeShane). 4 Conference transcript, p. 26 (Ashby).
IV‐7

Table IV-6 

Wire rod: U.S. importers' U.S. shipments of imports from by type, 2013 

Item 

2013 

Commercial 

shipments 

Internal 

consumption

/ transfers U.S. shipments 

CHINA

 Quantity (short tons) 

Number 

of firms

U.S. shipments of imported wire rod by quality: 

 Low/medium-low carbon industrial/standard *** *** 372,722 9

High/medium-high carbon industrial/standard *** *** *** ***

Tire cord quality or tire bead *** *** *** ***

Welding *** *** *** ***

Cold heading quality (CHQ) *** *** *** ***

Other specialty carbon and alloy *** *** *** ***

All others *** *** *** ***

Total U.S. shipments of imports from China *** *** 591,267 12

 

Share of shipments by shipment type 

(percent down) 

 

U.S. shipments of imported wire rod by quality: 

 Low/medium-low carbon industrial/standard *** *** 63.0

High/medium-high carbon industrial/standard *** *** ***

Tire cord quality or tire bead *** *** ***

Welding *** *** ***

Cold heading quality (CHQ) *** *** ***

Other specialty carbon and alloy *** *** ***

All others *** *** ***

Total U.S. shipments of imports from China 100.0 100.0 100.0

 

Share of shipments by product type 

(percent across) 

U.S. shipments of imported wire rod by quality: 

 Low/medium-low carbon industrial/standard *** *** 100.0

High/medium-high carbon industrial/standard *** *** ***

Tire cord quality or tire bead *** *** ***

Welding *** *** ***

Cold heading quality (CHQ) *** *** ***

Other specialty carbon and alloy *** *** ***

All others *** *** ***

Total U.S. shipments of imports from China *** *** 100.0

Table continued on next page.
IV‐8

Table IV-6--Continued 

Wire rod: U.S. importers' U.S. shipments of imports from by type, 2013 

Item 

2013 

Commercial 

shipments 

Internal 

consumption

/ transfers U.S. shipments 

ALL OTHER SOURCES

 Quantity (short tons) 

Number 

of firms

U.S. shipments of imported wire rod by quality: 

 Low/medium-low carbon industrial/standard *** *** 65,561 6

High/medium-high carbon industrial/standard *** *** *** ***

Tire cord quality or tire bead *** *** *** ***

Welding *** *** *** ***

Cold heading quality (CHQ) *** *** *** ***

Other specialty carbon and alloy *** *** *** ***

All others *** *** *** ***

Total U.S. shipments of imports from all other sources *** *** 502,381 9

 

Share of shipments by shipment type 

(percent down) 

 

U.S. shipments of imported wire rod by quality: 

 Low/medium-low carbon industrial/standard *** *** 13.1

High/medium-high carbon industrial/standard *** *** ***

Tire cord quality or tire bead *** *** ***

Welding *** *** ***

Cold heading quality (CHQ) *** *** ***

Other specialty carbon and alloy *** *** ***

All others *** *** ***

Total U.S. shipments of imports from all other sources 100.0 100.0 100.0

 

Share of shipments by product type 

(percent across) 

U.S. shipments of imported wire rod by quality: 

 Low/medium-low carbon industrial/standard *** *** 100.0

High/medium-high carbon industrial/standard *** *** ***

Tire cord quality or tire bead *** *** ***

Welding *** *** ***

Cold heading quality (CHQ) *** *** ***

Other specialty carbon and alloy *** *** ***

All others *** *** ***

Total U.S. shipments of imports from all other sources 71.9 28.1 100.0

Table continued on next page. 
IV‐9

Table IV-6--Continued 

Wire rod: U.S. importers' U.S. shipments of imports from by type, 2013 

Item 

2013 

Commercial 

shipments 

Internal 

consumption

/ transfers U.S. shipments 

ALL SOURCES

 Quantity (short tons) 

Number 

of firms

U.S. shipments of imported wire rod by quality: 

 Low/medium-low carbon industrial/standard *** *** 438,283 10

High/medium-high carbon industrial/standard *** *** *** ***

Tire cord quality or tire bead *** *** *** ***

Welding *** *** *** ***

Cold heading quality (CHQ) *** *** *** ***

Other specialty carbon and alloy *** *** *** ***

All others *** *** *** ***

Total U.S. shipments of imports from all sources *** *** 1,093,648 13

 

Share of shipments by shipment type 

(percent down) 

 

U.S. shipments of imported wire rod by quality: 

 Low/medium-low carbon industrial/standard *** *** 40.1

High/medium-high carbon industrial/standard *** *** ***

Tire cord quality or tire bead *** *** ***

Welding *** *** ***

Cold heading quality (CHQ) *** *** ***

Other specialty carbon and alloy *** *** ***

All others *** *** ***

Total U.S. shipments of imports from all sources 100.0 100.0 100.0

 

Share of shipments by product type 

(percent across) 

U.S. shipments of imported wire rod by quality: 

 Low/medium-low carbon industrial/standard *** *** 100.0

High/medium-high carbon industrial/standard *** *** ***

Tire cord quality or tire bead *** *** ***

Welding *** *** ***

Cold heading quality (CHQ) *** *** ***

Other specialty carbon and alloy *** *** ***

All others *** *** ***

Total U.S. shipments of imports from all sources *** *** 100.0

 Source: Compiled from data submitted in response to Commission questionnaires 
IV‐10

Negligible imports

The statute requires that an investigation be terminated without an injury

determination if imports of the subject merchandise are found to be negligible.5 Negligible

imports are generally defined in the Tariff Act of 1930, as amended, as imports from a country

of merchandise corresponding to a domestic like product where such imports account for less

than 3 percent of the volume of all such merchandise imported into the United States in the

most recent 12‐month period for which data are available that precedes the filing of the

petition or the initiation of the investigation. However, if there are imports of such merchandise

from a number of countries subject to investigations initiated on the same day that individually

account for less than 3 percent of the total volume of the subject merchandise, and if the

imports from those countries collectively account for more than 7 percent of the volume of all

such merchandise imported into the United States during the applicable 12‐month period, then

imports from such countries are deemed not to be negligible.6 Imports from China accounted

for 36.2 percent of total imports of wire rod by quantity during the 12‐month period of January‐

December 2013.

APPARENT U.S. CONSUMPTION AND MARKET SHARES

Total apparent U.S. consumption and market shares

Table IV‐4 and figure IV‐1 present data on total apparent U.S. consumption and U.S.

market shares for wire rod during 2011‐13.7 Apparent U.S. consumption, based on quantity,

increased by 3.5 percent from 2011 to 2013. Apparent U.S. consumption, based on value,

decreased by 9.5 percent. U.S. producers’ share of apparent U.S. consumption, based on

quantity, decreased steadily from 2011 to 2013, declining by 7.8 percentage points overall. The

market share of imports of wire rod from China increased steadily from 2011 to 2013,

increasing overall by 11.7 percentage points.

 

5 Sections 703(a)(1), 705(b)(1), 733(a)(1), and 735(b)(1) of the Act (19 U.S.C. §§ 1671b(a)(1),

1671d(b)(1), 1673b(a)(1), and 1673d(b)(1)).

6 Section 771 (24) of the Act (19 U.S.C § 1677(24)). 7 Total apparent U.S. consumption includes internal consumption and transfers to related firms by

U.S. producers.
IV‐11

Table IV-4 

Wire rod: Apparent U.S. consumption and market shares, 2011-13 

Item 

Calendar year 

2011 2012 2013 

 Quantity (short tons) 

U.S. producers' U.S. shipments 3,876,145 3,809,728 3,599,459

U.S. imports from.-- 

 Subject sources (i.e. China) 144 241,938 618,818

Nonsubject sources 1,253,533 1,276,955 1,089,818

Total U.S. imports 1,253,677 1,518,893 1,708,635

Apparent U.S. consumption 5,129,822 5,328,621 5,308,094

 Value (1,000 dollars) 

U.S. producers' U.S. shipments 3,012,054 2,826,974 2,529,487

U.S. imports from.-- 

 Subject sources (i.e. China) 162 146,221 335,879

Nonsubject sources 1,142,676 1,115,063 895,764

Total U.S. imports 1,142,838 1,261,284 1,231,643

Apparent U.S. consumption 4,154,892 4,088,258 3,761,130

 Share of quantity (percent) 

U.S. producers' U.S. shipments 75.6 71.5 67.8

U.S. imports from.-- 

 Subject sources (i.e. China) (1

) 4.5 11.7

Nonsubject sources 24.4 24.0 20.5

Total U.S. imports 24.4 28.5 32.2

 Share of value (percent) 

U.S. producers' U.S. shipments 72.5 69.1 67.3

U.S. imports from.-- 

 Subject sources (i.e. China) (1

) 3.6 8.9

Nonsubject sources 27.5 27.3 23.8

Total U.S. imports 27.5 30.9 32.7

1 Less than 0.05 percent.

 

Source: Compiled from data submitted in response to Commission questionnaires and from official 

Commerce statistics, HTS statistical reporting numbers 7213.91.3011, 7213.91.3015, 7213.91.3020, 

7213.91.3093; 7213.91.4500, 7213.91.6000, 7213.99.0030, 7227.20.0030, 7227.20.0080, 7227.90.6010, 

7227.90.6020, and 7227.90.6085. HTS statistical reporting number 7227.90.6085 is a broader category 

and may contain out of scope product including circular alloy bars and rods with a diameter of 19 mm or 

more and shapes other than circular. 
IV‐12

Figure IV-1 

Wire rod: Apparent U.S. consumption, 2011-13 

Source: Table IV-4. 

Merchant market apparent U.S. consumption and market shares

Table IV‐5 and figure IV‐2 present data on merchant market apparent U.S. consumption

and U.S. market shares for wire rod during 2011‐13.8 Merchant market apparent U.S.

consumption, based on quantity, increased by 2.5 percent from 2011 to 2013. Merchant

market apparent U.S. consumption, based on value, decreased by 10.8 percent. U.S. producers’

share of merchant market apparent U.S. consumption, based on quantity, decreased steadily

from 2011 to 2013, by 9.8 percentage points. The market share of imports of wire rod from

China increased steadily from 2011 to 2013, reaching 14.4 percent in 2013.

 

8 Merchant market apparent consumption does not include internal consumption and transfers to

related firms by U.S. producers.

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

2011 2012 2013

Calendar year

Quantity

(short tons)

U.S. producers Subject imports Nonsubject imports
IV‐13

Table IV-5 

Wire rod: Merchant market apparent U.S. consumption and market shares, 2011-13 

Item 

Calendar year 

2011 2012 2013 

 Quantity (short tons) 

U.S. producers' commercial U.S. shipments 2,944,416 2,815,567 2,595,200

U.S. imports from.-- 

 Subject sources (i.e. China) 144 241,938 618,818

Nonsubject sources 1,253,533 1,276,955 1,089,818

Total U.S. imports 1,253,677 1,518,893 1,708,635

Merchant market apparent U.S. consumption 4,198,093 4,334,460 4,303,835

 Value (1,000 dollars) 

U.S. producers' commercial U.S. shipments 2,340,739 2,143,895 1,875,625

U.S. imports from.-- 

 Subject sources (i.e. China) 162 146,221 335,879

Nonsubject sources 1,142,676 1,115,063 895,764

Total U.S. imports 1,142,838 1,261,284 1,231,643

Merchant market apparent U.S. consumption 3,483,577 3,405,179 3,107,268

 Share of quantity (percent) 

U.S. producers' commercial U.S. shipments 70.1 65.0 60.3

U.S. imports from.-- 

 Subject sources (i.e. China) (1

) 5.6 14.4

Nonsubject sources 29.9 29.5 25.3

Total U.S. imports 29.9 35.0 39.7

 Share of value (percent) 

U.S. producers' commercial U.S. shipments 67.2 63.0 60.4

U.S. imports from.-- 

 Subject sources (i.e. China) (1

) 4.3 10.8

Nonsubject sources 32.8 32.7 28.8

Total U.S. imports 32.8 37.0 39.6

 Source: Compiled from data submitted in response to Commission questionnaires and from official 

Commerce statistics, HTS statistical reporting numbers 7213.91.3011, 7213.91.3015, 7213.91.3020, 

7213.91.3093; 7213.91.4500, 7213.91.6000, 7213.99.0030, 7227.20.0030, 7227.20.0080, 7227.90.6010, 

7227.90.6020, and 7227.90.6085. HTS statistical reporting number 7227.90.6085 is a broader category 

and may contain out of scope product including circular alloy bars and rods with a diameter of 19 mm or 

more and shapes other than circular. 
IV‐14

Figure IV-2 

Wire rod: Merchant market apparent U.S. consumption, 2011-13

 

Source: Table IV-5. 

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

2011 2012 2013

Calendar year

Quantity

(short tons)

U.S. producers Subject imports Nonsubject imports
V‐1

PART V: PRICING DATA

FACTORS AFFECTING PRICES

Raw material costs

The primary inputs used in the production of wire rod are billets produced from steel

scrap, natural gas, and electricity. Petitioners report that the price of wire rod “is based upon

the supply and demand in the market place.” “Scrap is a component of the cost of the material,

but just a component.”1 Respondents (AWPA) report that “our members believe that price

fluctuations for wire rod are driven largely by the price of steel scrap.”2

Different types of steel scrap are used in different types of wire rod, with busheling

scrap used to produce higher‐end product and heavy melt used to produce less‐specialized wire

rod.3 The price of steel scrap fluctuated between 2011 and 2013, overall decreasing very

slightly between the first week of January 2011 and the last week of December 2013. In 2014,

however, the price of scrap has increased (figure V‐1).

Energy prices have also fluctuated since 2011. Natural gas prices have fluctuated more

than electricity prices. Gas prices fell between 2011 and 2013, while electricity prices fluctuated

modestly, with no net change between 2011 and 2013 (table V‐1).  

Figure V-1 

U.S. ferrous scrap prices: Weekly scrap prices (dollars per short ton), January 2011-February 2014 

*            *            *            *           *            *            *

Table V-1 

U.S. natural gas and electricity prices for industrial customers, 2011-13 

Item 2011 2012 2013 

U.S. natural gas industrial price1 5.13 3.89 4.66 

Electricity industrial price2 6.82 6.67 6.82 

1

 In dollars per thousand cubic feet. 

2

 In cents per kilowatt-hour. 

Source: U.S. Energy Information Administration, http://www.eia.doe.gov, retrieved March 4, 2014. 

                                                      

1 Conference transcript, p. 55 (Kirkvliet). 2 Conference transcript, p. 84 (Korbel).

3 Carbon and Certain Alloy Steel Wire Rod From Brazil, Canada, Germany, Indonesia, Mexico,

Moldova, Trinidad and Tobago, Turkey, and Ukraine: Investigations Nos. 701‐TA‐417 and 731‐TA‐953,

954, 957‐959, 961, and 962 (Review), USITC Publication 4014, June 2008, p. V‐1.
V‐2

U.S. inland transportation costs

All 9 responding U.S. producers and 5 of 11 importers reported that they typically

arrange transportation to their customers. U.S. producers reported that their U.S. inland

transportation costs ranged from 5 to 8 percent while importers reported costs of 2 to 10

percent, with five of the 8 responding importers reporting shipping costs between 5 and 7

percent.

PRICING PRACTICES

Pricing methods

Table V‐2 presents the methods of price setting reported by U.S. producers and

importers. Transaction‐by‐transaction negotiations are by far the most common method. U.S.

producers and importers also sell using contracts and “other methods.” “Other methods”

reported by the U.S. producers included monthly price negotiations based on market conditions

and the cost of raw material, a price indexed to scrap prices (reported by 2 producers), and

customer‐by‐customer price determination. 4

  

Table V-2 

Wire rod: U.S. producers and importers reported price setting methods, by number of responding 

firms1

Method U.S. producers Importers 

Transaction-by-transaction 7 10 

Contract 3 1 

Set price list 0 0 

Other 4 2 

1

 The sum of responses may not add up to the total number of responding firms as each firm was 

instructed to check all applicable price setting methods employed.

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

Wire rod sales in the United States typically involve either short term contracts or spot

sales. Half of U.S. producers’ sales were through short term contacts, with 46.4 percent of sales

on the spot market and only 3.6 percent via long term contracts (table V‐3). In contrast, Chinese

imports’ sales were reported to be spot sales. Five producers reported short term contracts,

ranging from 1 month to one year, with four of the five responses being either 30 or 40 days.

                                                      

4 “Other methods” were reported by two importers that did not sell wire rod; both consumed the

wire rod internally.
V‐3

Table V-3 

Wire rod: U.S. producers’ and importers’ shares of U.S. commercial shipments by type of sale, 

2013 

Type of sale U.S. producers Importers 

Long-term contracts 3.6 0.0 

Short-term contracts 50.0 0.0 

Spot sales 46.4 100.0 

Total 100.0 100.0 

Note.--Because of rounding, figures may not add to the totals shown. 

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

Three of the five producers reported no price negotiations during the contract, three reported

fixed price, one fixed both price and quantity, and one fixed only quantity. Four of five reported

that their contracts contained no meet‐or‐release provision. Two U.S. producers reported using

long term contracts, which lasted 2 years.

U.S. producers and importers were asked to describe the role of scrap costs in their

prices. Most producers (8 of 9) and importers (6 of 8) included scrap costs in their prices. Two

of the producers reporting including scrap prices in their prices also reported surcharges for

scrap. The producer reporting not including scrap prices in cost nor using scrap surcharges,

stated that its use of these had been undermined by imports. Two importers reported that they

did not include scrap costs in their prices. One of these used a scrap surcharge, and the other

reported looking “at scrap prices for informational purposes only.”

Sales terms and discounts

U.S. producers and importers typically quote prices both on an f.o.b. and a delivered

basis. Five of nine producers reported f.o.b. sales while 6 of 10 importers sold on a delivered

basis. Most producers (6 of 9) reported no discount policy, although two reported some

quantity and volume discounts and one stated that it only offered early payment discounts.5

Nine of the 10 responding importers reported no discounts, while the other reported only cash

discounts. Five producers reported sales terms of 1⁄2 percent 10 net 30, two reported 1 percent

10 net 30, and three reported net 30. In contrast, 8 of 10 responding importers reported sales

terms of net 30 days and the remaining 2 reported net 60 days.6

  

                                                      

5 One producer reporting “other” explained that it offered no discounts. Therefore, its response is

included with the firms reporting “no discount policy”. One of the firms reporting “no discount policy”

also reported volume, quantity, and “other” (cash) discounts. It has been excluded from firms reporting

no discount policy.

6 One firm did not report its selling method, reporting that its imports had been a one‐time purchase.
V‐4

PRICE DATA

The Commission requested U.S. producers and importers to provide quarterly data for

the total quantity and f.o.b. value of the following wire rod products shipped to unrelated U.S.

customers during 2011‐13.

Product 1.‐‐Industrial quality wire rod, grade C1006, 5.5 mm (7/32 inch) through 12 mm

(15/32 inch) in diameter, for hangers, chain link fencing, collated nails and

staples, grates, and other formed products (in green condition, e.g., NOT

cleaned, coated, etc.).

Product 2.‐‐Industrial quality wire rod, grade C1008 through C1010, 5.5 mm (7/32 inch)

through 12 mm (15/32 inch) in diameter, for hangers, chain link fencing, collated

nails and staples, grates, and other formed products (in green condition, e.g.,

NOT cleaned, coated, etc.).

Product 3.‐‐Mesh quality wire rod, grades C1006 through C1015, 5.5 mm (7/32 inch)

through 14 mm (9/16 inch) in diameter, for the manufacturing of concrete

reinforcement products such as wire for A‐82 applications (in green condition,

e.g., NOT cleaned, coated, etc.).

Product 4.‐‐Grades C1050 through C1070, 5.5 mm (7/32 inch) through 6.5 mm (1/4

inch) in diameter, for spring applications excluding valve spring (in green

condition, e.g., NOT cleaned, coated, etc.).

Product 5.‐‐Industrial quality wire, Grades C1060 through 1065, 5.5mm (7/32 inch)

through 17.5 mm (11/16 inch) in diameter, for spring wire rod used in upholstery

and mechanical applications, as well as oil‐tempered spring applications.

Nine U.S. producers, nine U.S. importers of wire rod from China, and one importer of

wire rod from Canada provided usable pricing data for sales of the requested products,

although not all firms reported pricing for all products for all quarters. Pricing data reported by

these firms accounted for approximately 45.5 percent of U.S. producers’ commercial shipments

of wire rod and 85.9 percent of U.S. imports from China in 2013.

Price data for products 1‐5 are presented in tables V‐4 to V‐8 and figures V‐2 to V‐6.
V‐5

Table V-4 

Wire rod: Weighted-average f.o.b. prices and quantities of domestic and imported product 11 and 

margins of underselling/(overselling), by quarters, January 2011-December 2013 

Period 

United States China 

Canada 

(nonsubject)

Price 

(per short 

ton) 

Quantity

(short 

tons) 

Price

(per short 

ton) 

Quantity

(short 

tons) 

Margin 

(percent) 

Price 

(per short 

ton) 

Quantity

(short 

tons) 

2011: 

January-March 698.00 51,890 -- 0 -- -- 0

April-June 744.56 52,991 -- 0 -- *** ***

July-September 746.73 55,490 -- 0 -- *** ***

October-December 726.85 57,352 -- 0 -- *** ***

2012: 

January-March 740.50 51,424 *** *** *** *** ***

April-June 742.21 50,288 *** *** *** *** ***

July-September 665.62 51,449 *** *** *** *** ***

October-December 647.05 47,934 *** *** *** *** ***

2013: 

January-March 661.33 52,525 *** *** *** *** ***

April-June 661.07 57,184 *** *** *** *** ***

July-September 647.37 39,538 *** *** *** *** ***

October-December 623.69 60,619 *** *** *** *** ***

1

 Product 1: Industrial quality wire rod, grade C1006, 5.5 mm (7/32 inch) through 12 mm (15/32 inch) in 

diameter, for hangers, chain link fencing, collated nails and staples, grates, and other formed products (in 

green condition, e.g., NOT cleaned, coated, etc.).

Source: Compiled from data submitted in response to Commission questionnaires. 
V‐6

Table V-5 

Wire rod: Weighted-average f.o.b. prices and quantities of domestic and imported product 21 and 

margins of underselling/(overselling), by quarters, January 2011-December 2013 

Period 

United States China 

Canada 

(nonsubject)

Price 

(per short 

ton) 

Quantity

(short 

tons) 

Price

(per short 

ton) 

Quantity

(short 

tons) 

Margin 

(percent) 

Price 

(per short 

ton) 

Quantity

(short 

tons) 

2011: 

January-March 682.67 124,344 *** *** *** *** ***

April-June 740.67 144,345 -- 0 -- *** ***

July-September 725.42 124,031 -- 0 -- *** ***

October-December 710.89 136,296 -- 0 -- *** ***

2012: 

January-March 719.17 130,660 *** *** *** *** ***

April-June 716.02 126,868 *** *** *** *** ***

July-September 651.68 108,924 *** *** *** *** ***

October-December 636.11 80,176 599.48 32,296 5.8 *** ***

2013: 

January-March 644.23 109,879 582.92 48,890 9.5 *** ***

April-June 661.44 96,010 587.77 35,970 11.1 *** ***

July-September 630.02 82,624 603.00 53,475 4.3 *** ***

October-December 623.66 82,123 558.80 62,536 10.4 *** ***

1

 Product 2: Industrial quality wire rod, grade C1008 through C1010, 5.5 mm (7/32 inch) through 12 mm 

(15/32 inch) in diameter, for hangers, chain link fencing, collated nails and staples, grates, and other 

formed products (in green condition, e.g., NOT cleaned, coated, etc.).

Source: Compiled from data submitted in response to Commission questionnaires.
V‐7

Table V-6 

Wire rod: Weighted-average f.o.b. prices and quantities of domestic and imported product 31 and 

margins of underselling/(overselling), by quarters, January 2011-December 2013 

Period 

United States China 

Price 

(per short ton) 

Quantity

(short tons) 

Price

(per short ton) 

Quantity 

(short tons) 

Margin

(percent) 

2011: 

January-March 681.10 108,039 -- 0 --

April-June 731.77 102,588 -- 0 --

July-September 737.62 101,646 -- 0 --

October-December 712.68 117,620 -- 0 --

2012: 

January-March 723.55 142,543 *** *** ***

April-June 717.05 128,694 685.40 17,091 4.4

July-September 656.07 132,341 *** *** ***

October-December 629.74 103,770 *** *** ***

2013: 

January-March 641.10 122,648 597.77 51,042 6.8

April-June 657.84 125,272 *** *** ***

July-September 630.93 109,866 606.96 75,545 3.8

October-December 621.26 96,799 *** *** ***

1

 Product 3: Mesh quality wire rod, grades C1006 through C1015, 5.5 mm (7/32 inch) through 14 mm 

(9/16 inch) in diameter, for the manufacturing of concrete reinforcement products such as wire for A-82 

applications (in green condition, e.g., NOT cleaned, coated, etc.).

Source: Compiled from data submitted in response to Commission questionnaires.
V‐8

Table V-7 

Wire rod: Weighted-average f.o.b. prices and quantities of domestic and imported product 41 and 

margins of underselling/(overselling), by quarters, January 2011-December 2013 

Period 

United States China 

Canada 

(nonsubject)

Price 

(per short 

ton) 

Quantity

(short 

tons) 

Price

(per short 

ton) 

Quantity

(short 

tons) 

Margin 

(percent) 

Price 

(per short 

ton) 

Quantity

(short 

tons) 

2011: 

January-March 748.30 13,504 -- 0 -- *** ***

April-June 796.76 20,259 -- 0 -- *** ***

July-September 809.62 13,466 -- 0 -- *** ***

October-December 777.38 14,267 -- 0 -- *** ***

2012: 

January-March 759.20 19,791 *** *** *** *** ***

April-June 771.36 24,867 *** *** *** *** ***

July-September 722.56 12,511 *** *** *** *** ***

October-December 703.88 13,051 *** *** *** *** ***

2013: 

January-March 725.67 14,648 *** *** *** *** ***

April-June 716.15 17,987 *** *** *** *** ***

July-September 694.08 14,279 *** *** *** *** ***

October-December 708.74 12,702 *** *** *** *** ***

1

 Product 4: Grades C1050 through C1070, 5.5 mm (7/32 inch) through 6.5 mm (1/4 inch) in diameter, for 

spring applications excluding valve spring (in green condition, e.g., NOT cleaned, coated, etc.).

Source: Compiled from data submitted in response to Commission questionnaires.
V‐9

Table V-8 

Wire rod: Weighted-average f.o.b. prices and quantities of domestic and imported product 51 and 

margins of underselling/(overselling), by quarters, January 2011-December 2013 

Period 

United States China 

Price 

(per short ton) 

Quantity

(short tons) 

Price

(per short ton) 

Quantity 

(short tons) 

Margin

(percent) 

2011: 

January-March 742.26 23,794 -- 0 --

April-June 783.80 22,259 -- 0 --

July-September 781.98 16,113 -- 0 --

October-December 744.84 15,646 -- 0 --

2012: 

January-March 767.36 28,927 *** *** ***

April-June 749.94 28,241 *** *** ***

July-September 699.39 20,886 *** *** ***

October-December 677.38 18,742 *** *** ***

2013: 

January-March 691.53 23,088 *** *** ***

April-June 690.30 22,396 *** *** ***

July-September 662.98 21,411 *** *** ***

October-December 663.61 19,877 *** *** ***

1

 Product 5: Industrial quality wire, Grades C1060 through 1065, 5.5mm (7/32 inch) through 17.5 mm 

(11/16 inch) in diameter, for spring wire rod used in upholstery and mechanical applications, as well as 

oil-tempered spring applications.

Source: Compiled from data submitted in response to Commission questionnaires.
V‐10

Figure V-2 

Wire rod: Weighted-average prices and quantities of domestic and imported product 1, by 

quarters, January 2011-December 2013 

*            *            *            *           *            *            *

Figure V-3 

Wire rod: Weighted-average prices and quantities of domestic and imported product 2, by 

quarters, January 2011-December 2013 

*            *            *            *           *            *            *

Figure V-4 

Wire rod: Weighted-average prices and quantities of domestic and imported product 3, by 

quarters, January 2011-December 2013 

*            *            *            *           *            *            *

Figure V-5 

Wire rod: Weighted-average prices and quantities of domestic and imported product 4, by 

quarters, January 2011-December 2013 

*            *            *            *           *            *            *

Figure V-6 

Wire rod: Weighted-average prices and quantities of domestic and imported product 5, by 

quarters, January 2011-December 2013 

*            *            *            *           *            *            *

Price trends

Table V‐9 summarizes the price trends, by country and by product. Prices for each of the

five pricing products decreased during 2011‐13. Price decreases for U.S.‐produced wire rod

ranged from 5.3 to 10.6 percent during 2011‐13 while price decreases for imported wire rod

from China ranged from *** to *** percent.
V‐11

Table V-9 

Wire rod: Summary of weighted-average f.o.b. prices for products 1-5 from the United States and 

China 

Item 

Number of 

quarters 

Low price 

(per unit) 

High price 

(per unit) 

Change in 

price1

 (percent) 

Product 1 

United States 12 $623.69 $746.73 (10.6) 

China 8 *** *** *** 

Product 2 

United States 12 623.66 740.67 (8.6) 

China 9 558.80 *** *** 

Product 3 

United States 12 621.26 737.62 (8.8) 

China 8 *** *** *** 

Product 4 

United States 12 694.08 809.62 (5.3) 

China 8 *** *** *** 

Product 5 

United States 12 662.98 783.80 (10.6) 

China 8 *** *** *** 

1

 Percentage change from the first quarter in which data were available to the last quarter in which price 

data were available, based on rounded data. For all products except product 2, prices for imported wire 

rod from China were only available for 2012 and 2013. U.S. prices however increased between the first 

quarter of 2011 and the first quarter of 2012. The price reductions for imported wire rod from China for 

products 1, 3, 4, and 5 may be compared to the changes in U.S. prices between 2012 and 2013. Over 

this two year period U.S. prices fell by 15.8 percent for product 1, 14.1 percent for product 3, 6.6 percent 

for product 4, and 13.5 percent for product 5.

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

Price comparisons

As shown in table V‐10, prices for imported wire rod from China were below those for

U.S.‐produced product in 36 of 41 instances; margins of underselling ranged from 0.2 to 17.5

percent. In the remaining five instances, (all in 2012) prices for imported wire rod from China

were between 0.3 and 3.2 percent above prices for the domestic product.

Table V-10 

Wire rod: Instances of underselling/overselling and the range and average of margins, January 

2011-December 2013 

Source 

Underselling Overselling 

Number of 

instances 

Range 

(percent) 

Average 

margin 

(percent) 

Number of 

instances 

Range 

(percent) 

Average 

margin 

(percent) 

China 36 0.2-17.5 7.9 5 (0.3)-(3.2) (2.0) 

Source: Compiled from data submitted in response to Commission questionnaires.
V‐12

LOST SALES AND LOST REVENUE

The Commission requested U.S. producers of wire rod to report any instances of lost

sales or revenue they experienced due to competition from imports of wire rod from China

since January 2011. All eight responding U.S. producers reported that they had reduced prices

and seven reported that they had to roll back announced price increases. The 97 lost sales

allegations totaled $165.1 million and involved 265,083 short tons of wire rod and the 14 lost

revenue allegations totaled $1.4 million dollars and involved 38,250 short tons of wire rod.7

Staff contacted 13 purchasers and a summary of the information obtained appears below and

in tables V‐11 and V‐12.8

***.

***.

***.  

***.

***.9 ***.

***.

***.

***.

***.

***.

***.

***.10

***. 11 ***.

Purchasers responding to the lost sales and lost revenue allegations also were asked

whether they shifted their purchases of wire rod from U.S. producers to suppliers of wire rod

from China since 2011. In addition, they were asked whether U.S. producers reduced their

prices in order to compete with suppliers of wire rod from China. Five of the 12 responding

purchasers reported that they had shifted purchases of wire rod from U.S. producers to subject

imports since 2011; all five of these purchasers reported that price was the reason for the shift.

                                                      

7 The petition included one lost revenue from 2010 in which the producer had to reduce the price on

*** short tons of wire rod from ***. This has not been included in the tables nor was the purchaser

requested to respond to the allegation. In a number of cases a range of quantities or prices were

provided. In order to calculate the number of short tons and the value of the lost sales, the lowest

values for quantities and prices reported were used. If no price was given in the allegation the value was

not estimated.

8 U.S. producers did not provide fax numbers for two lost sales and two lost revenue allegations.

These allegations are included in the tables but the purchasers were not contacted.

9 ***, however, *** did not receive this information and therefore its response does not cover this

***.

10 One lost sale allegation was inadvertently not sent. 11 One lost sale allegation was inadvertently not sent.
V‐13

Three of nine responding purchasers reported that the U.S. producers had reduced their prices

in order to compete with the prices of subject imports since 2011.12 Purchasers’ responses

when they answered that they had not shifted purchases from U.S. produced wire rod to wire

rod imported Chinese product and that U.S. producers had not reduced their prices in response

to lower priced imports from China are in tables V‐13 and V‐14.

Table V-11 

Wire rod: U.S. producers’ lost sales allegations 

*            *            *            *           *            *            *

Table V-12 

Wire rod: U.S. producers’ lost revenue allegations 

*            *            *            *           *            *            *

Table V-13 

Wire rod: Purchasers reporting that they had not shifted purchases from U.S.-produced wire rod 

to wire rod imported from China 

*            *            *            *           *            *            *

Table V-14 

Wire rod: Purchasers reporting that U.S. producers of wire rod had not reduced their price of wire 

rod in response to wire rod imported from China 

*            *            *            *           *            *            *

                                                      

12 Because some of the purchasers reported that they did not know or their responses were unclear,

there are fewer responses to these questions than to the lost sales and lost revenue overall.

VI‐1

PART VI: FINANCIAL EXPERIENCE OF U.S. PRODUCERS

BACKGROUND

Ten U.S. producers provided useable financial data for their total operations on wire rod

as well as their merchant market operations on wire rod.1 Each of the firms reported

commercial sales (and exports) that were the same as their merchant market sales. *** firms

reported internal consumption of wire rod which was used in‐house for the production of wire

and wire products, and *** firms reported transfers of wire rod to affiliates for the production

of wire and wire products. The reported data are believed to account for all known sales by U.S.

producers of wire rod.  

***, each of the reporting firms produces other products in their facilities that make

wire rod, including rebar and other bar and rod products. Wire rod accounted for 59 to 67

percent of the firms’ total production during 2011‐13.2 Differences in average unit values of

sales and costs are largely attributable to differences in product mix between firms. Several of

the reporting firms produce downstream wire and wire products either in the same facilities or

in affiliated facilities.  

OPERATIONS ON WIRE ROD

Table VI‐1 presents aggregated data on U.S. producers’ total operations side‐by‐side

with their merchant market operations only in relation to wire rod during 2011‐13. Generally

speaking, total net sales, costs, operating income, net income, and cash flows fell steadily in

dollar terms between 2011 and 2013. As a ratio to sales, cost of goods sold (“COGS”) increased

as did selling, general and administrative (“SG&A”) expenses while operating income declined.

On a per‐unit basis, sales, COGS, and operating income declined between 2011 and 2013. The

industry’s operating income fell from 2011 to 2013 and the number of firms reporting operating

losses increased. Net income before taxes and cash flows also fell during 2011‐13. These

changes and trends in financial indicators for the industry’s merchant market shipments were

similar.

 

1 These firms are: ArcelorMittal; Cascade ***; Charter; Evraz; Gerdau; Keystone; Nucor; Mid

American ***; and Sterling. The data for Republic were taken from the firm’s questionnaire response to

the Commission’s five‐year review on wire rod from six countries, Investigation Nos. 731‐TA‐417 and

731‐TA‐953, 957‐959, and 961‐962. Unless otherwise noted, each has a fiscal year that ends on or about

December 31. Very small differences between the trade and financial sections of the Commission’s

questionnaire are due to rounding. 2 Calculated from questionnaire data (comparing wire rod production to total production), section II‐

3. ***. It should also be noted that firms like ArcelorMittal, Evraz, Gerdau, and Nucor produce a broad

range of long products and flat‐rolled products in other facilities and wire rod represents a small fraction

of these firms’ total operations.
VI‐2

Table VI-1 

Wire rod: Results of total operations and merchant market operations of U.S. producers, fiscal 

years 2011-13 

Item 

Total operations Merchant market operations 

2011 2012 2013 2011 2012 2013 

Quantity (short tons) 

Net sales: 

 Commercial sales 2,979,103 2,842,314 2,619,518 2,979,103 2,842,314 2,619,518

 Internal consumption1 *** *** *** 0 0 0

 Company transfers1 *** *** *** 0 0 0

 Total sales 3,910,832 3,836,475 3,623,777 2,979,103 2,842,314 2,619,518

Value ($1,000) 

Net sales: 

 Commercial sales 2,369,626 2,175,493 1,898,192 2,369,626 2,175,493 1,898,192

 Internal consumption1 *** *** *** 0 0 0

 Company transfers1 *** *** *** 0 0 0

 Total sales 3,040,941 2,858,572 2,552,054 2,369,626 2,175,493 1,898,192

Cost of goods sold:2

 Raw materials 2,016,353 1,837,144 1,611,114 1,548,308 1,373,248 1,179,200

 Direct labor 124,945 125,154 114,347 110,752 109,358 97,527

 Other factory costs 595,635 660,289 632,874 479,006 524,800 485,620

 Total COGS 2,736,933 2,622,588 2,358,335 2,138,066 2,007,406 1,762,348

Gross profit 304,008 235,984 193,719 231,560 168,087 135,844

SG&A expenses 86,722 87,633 86,025 69,833 69,485 67,354

Operating income 217,286 148,351 107,694 161,727 98,602 68,490

Other 

income/(expense), net3 (18,629) (11,130) (11,264) (12,445) (4,473) (4,103)

Net income 198,657 137,221 96,430 149,282 94,129 64,387

Depreciation/amortizatio

n 46,192 47,134 48,420 37,012 36,983 37,269

Cash flow 244,849 184,355 144,850 186,294 131,112 101,656

Ratio to net sales (percent) 

Cost of goods sold: 

 Raw materials 66.3 64.3 63.1 65.3 63.1 62.1

 Direct labor 4.1 4.4 4.5 4.7 5.0 5.1

 Other factory costs 19.6 23.1 24.8 20.2 24.1 25.6

 Total COGS 90.0 91.7 92.4 90.2 92.3 92.8

Gross profit 10.0 8.3 7.6 9.8 7.7 7.2

SG&A expenses 2.9 3.1 3.4 2.9 3.2 3.5

Operating income 7.1 5.2 4.2 6.8 4.5 3.6

Net income 6.5 4.8 3.8 6.3 4.3 3.4

Table continued on next page. 

 
VI‐3

Table VI-1--Continued

Wire rod: Results of total operations and merchant market operations of U.S. producers, fiscal 

years 2011-13 

Item 

Total operations Merchant market operations 

2011 2012 2013 2011 2012 2013 

Average unit value (dollars per short ton) 

Net sales: 

 Commercial sales1 795 765 725 795 765 725

 Internal consumption1 *** *** *** 0 0 0

 Company transfers *** *** *** 0 0 0

 Total net sales 778 745 704 795 765 725

Cost of goods sold:2

 Raw materials 516 479 445 520 483 450

 Direct labor 32 33 32 37 38 37

 Other factory costs 152 172 175 161 185 185

 Total COGS 700 684 651 718 706 673

Gross profit 78 62 53 78 59 52

SG&A expenses 22 23 24 23 24 26

Operating income 56 39 30 54 35 26

Number of firms reporting: 

Operating losses4 *** *** *** *** *** ***

Data 10 10 10 10 10 10

1

 Internal consumption was reported by ***. Transfers to related firms were reported by ***. The average unit values 

of internal consumption and transfers are lower than those of commercial sales because of product mix. 2

 Republic allocated the components of COGS ***. Commission staff reallocated the components of COGS based on 

the average ratio of these components to total COGS that were reported by the other reporting firms. 3

 Consists of other expense (accounted for ***) and interest expense. ***. E-mails to Commission staff from *** and 

***, respectively, February 28, 2014. 

4

 Operating losses were reported by ***. 

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

Table VI‐2 presents data for the wire rod operations of U.S. producers on a firm‐by‐firm

basis. Results of total operations of U.S. producers are presented side‐by‐side with their

merchant market operations.

Table VI-2 

Wire rod: Results of total operations and merchant market operations of U.S. producers, by firm, 

fiscal years 2011-13

* * * * * * * 

Total net sales quantity and value

As shown in table VI‐1, total net sales includes commercial sales (and exports), internal

consumption, and transfers to related firms. Total sales declined from 2011 to 2013 in terms of
VI‐4

quantity, value, and average unit value.  The quantity reported for internal consumption and

transfers increased,3 comparing 2011 to 2013 (unlike that of commercial sales), but the sales

value of both categories was lower in 2013 compared with 2011 because of the lower average

unit values. Total merchant market sales likewise fell on a quantity, value, and average unit

value basis from 2011 to 2013.

Table VI‐2 shows that most of the reporting U.S. producers reported lower commercial

sales quantities in 2013 compared to 2011 (the exceptions were *** for which sales were ***

higher). The quantity of reported internal consumption by ***, comparing 2013 to 2011, while

the value of internal consumption ***. The total quantity of transfers was greater in 2013

compared to 2011, but was lower in 2013 compared to 2011 in total value because the average

unit value of transfers was lower in 2013 than in 2011.4 *** firms reported an increase in the

quantity while *** firms reported that the quantity of transfers declined or irregularly declined.

The value of transfers rose *** for *** firms while it declined for *** firms between 2011 and

2013.

Operating costs and expenses

As shown in table VI‐1, raw material costs represent the single largest component of

overall COGS, averaging approximately 70.8 percent of total COGS on a cumulative basis during

2011‐13, and ranging from 66.3 percent of sales value (in 2011) to 63.1 percent of sales value

(in 2013). As shown in table VI‐2, average raw material costs, direct labor, and other factory

costs (i.e., conversion costs) vary from company to company. These costs generally reflect

underlying differences in input costs from types of scrap and conversion costs (labor and

overhead). The highest average raw material costs as a ratio to sales were reported by ***.

Location and sales product mix may account for some of the costs; ***. Table VI‐2 shows that

most U.S. producers reported lower raw material costs in 2013 than in 2011 on both a per‐unit

basis and as expressed as a ratio to sales.5

 

3 More than *** percent of commercial shipments were of industrial/standard wire rod (low,

medium, or high carbon) and cold‐heading quality wire rod in 2013. Industrial/standard quality wire rod

(low, medium, or high carbon) made up nearly *** percent of internal consumption (which accounted

for less than *** percent of total shipments in 2013). Industrial/standard quality wire rod (low, medium,

or high carbon) accounted for nearly *** percent of reported transfers (which accounted for about ***

percent of total shipments in 2013). These data are presented in full in table III‐6.   4 Differences between the average unit values of commercial (or merchant market) sales, internal

consumption, and transfers to related firms are attributable to differences in product mix being sold in

those categories. For example, ***. E‐mail to Commission staff from ***, February 26, 2014. 5 The steel industry often uses the term “metal spread”, defined as the difference in total dollars or in

dollars per ton of product between the sales price and the cost of a firm’s raw material inputs, primarily

scrap. The term “metal margin” refers to the metal spread as a percentage of the product price, which,

in effect, is the inverse of the ratio of raw material costs to total net sales. An increasing metal spread

indicates a widening between a firm’s sales value and its cost of raw materials, for example when a

firm’s sales price is rising faster than is the cost of its raw materials, or that the raw materials’ costs are

(continued...)
VI‐5

With regard to the merchant market, average raw material costs for U.S. producers

were slightly lower as a ratio to total COGS (69.4 percent average on a cumulative basis) or

when expressed as a ratio to merchant market sales compared to raw material costs for total

operations’ sales and, likewise, declined from 2011 to 2013. As a per‐unit measure, raw

material costs were slightly higher overall when compared with the producers’ total operations.

Company‐by‐company reporting was mixed although the difference was not large in any case.

After raw materials, the largest component of reported COGS is other factory costs,6

which as a ratio to sales rose by about 5 percentage points and by about $23 per short ton from

2011 to 2013. Direct labor costs, the smallest component of COGS, also rose *** between 2011

and 2013 as a ratio to sales. Both other factory costs and direct labor have more of a fixed cost

component than do raw material costs (which have more of a variable cost component). With

the decline in production and capacity utilization, other factory costs rose on a per‐unit basis

while direct labor costs fluctuated and were the same in 2013 as in 2011. SG&A expenses also

increased as a ratio to sales as well as on a per‐unit basis between 2011 and 2013.

With regard to the merchant market, average labor and other factory costs for U.S.

producers were higher when expressed as a ratio to sales compared to those two cost

categories for total sales. As a per‐unit measure, both were higher overall when compared with

the producers’ total operations. Company‐by‐company reporting was mixed although the

difference was not large in any case.

Profitability

Table VI‐1 shows that the industry’s gross profit, on an absolute and relative basis, fell

from 2011 to 2013. Changes in the industry’s gross profit margin primarily reflect the decline in

volume and average unit value of sales that were partially offset by lower raw material costs

but relatively higher labor and other factory costs. Operating income was substantially lower in

2013 than in 2011. As depicted in table VI‐2, a majority of the reporting firms were consistently

profitable although the number of firms reporting losses increased between 2011 and 2013.7

***. On the other hand, ***.

                                                            

(...continued)

declining faster than a firm’s sales price, whereas a decreasing metal spread indicates the opposite.

Changes in the metal margin indicate similar aspects of changes in the underlying factors. As presented

in table VI‐1, total raw material costs fell from 2011 to 2013 (raw material costs also fell between those

years for each of the companies reporting data). Overall, the wire rod metal spread in absolute dollars

narrowed by 8.2 percent and 12.5 percent for the total market and merchant market respectively. The

metal spread in dollars per short ton (of sales) declined by $2 per short ton (i.e., was relatively flat) for

both the firms’ total operations (from $262 per ton to $260 per ton) and for their merchant market

operations (from $276 per ton to $274 per ton) between 2011 and 2013. The metal margin widened by

3.2 percentage points from 2011 to 2013 for both the total market and for the merchant market.

6 One firm, ***, reported non‐recurring charges that were included in other factory costs. These

ranged from $*** in 2011 to $*** in 2013. The largest amount, $***, was for ***. See questionnaire

response of ***, sections II‐2 and III‐9. 7 ***.
VI‐6

With regard to the merchant market, as show in table VI‐1, operating profit was lower

on an overall basis than for total operations. The trend was similar in that operating profit was

substantially lower in 2013 than in 2011. As a ratio to sales and on a per‐unit basis, merchant

market gross profit and operating profit were similar to those measures for the industry’s total

operations although slightly lower. Besides the ***.

VARIANCE ANALYSIS

A variance analysis for the operations of U.S. producers of wire rod on their total

operations and on their merchant market operations is presented side‐by‐side in table VI‐3.8

The information for this variance analysis is derived from table VI‐1. The operating income

variance was negative between each of the years because the unfavorable price variance (unit

prices fell) was greater than a favorable net cost/expense variance (unit costs fell).

 

8 The Commission’s variance analysis is calculated in three parts:  Sales variance, cost of sales

variance (COGS variance), and SG&A expense variance. Each part consists of a price variance (in the case

of the sales variance) or a cost or expense variance (in the case of the COGS and SG&A expense

variance), and a volume variance. The sales or cost/expense variance is calculated as the change in unit

price or per‐unit cost/expense times the new volume, while the volume variance is calculated as the

change in volume times the old unit price or per‐unit cost/expense. Summarized at the bottom of the

table, the price variance is from sales; the cost/expense variance is the sum of those items from COGS

and SG&A variances, respectively, and the volume variance is the sum of the volume components of the

net sales, COGS, and SG&A expense variances. The overall volume component of the variance analysis is

generally small.
VI‐7

Table VI-3 

Wire rod: Variance analysis on the operations of U.S. producers, between fiscal years 2011-13 

Item 

Between fiscal years 

Total operations Merchant market operations 

2011-13 2011-12 2012-13 2011-12 2012-13 2013-14 

Net sales: Value ($1,000) 

 Commercial sales: 

 Price variance (185,414) (85,329) (106,774) (185,414) (85,329) (106,774)

 Volume variance (286,020) (108,804) (170,527) (286,020) (108,804) (170,527)

 Trade sales variance (471,434) (194,133) (277,301) (471,434) (194,133) (277,301)

 Internal Consumption: 

 Price variance *** *** *** 0 0 0 

 Volume variance *** *** *** 0 0 0 

 Trade sales variance *** *** *** 0 0 0 

 Company Transfers: 

 Price variance *** *** *** 0 0 0 

 Volume variance *** *** *** 0 0 0 

 Transfer variance *** *** *** 0 0 0 

 Total net sales: 

 Price variance (265,682) (124,551) (148,036) (185,414) (85,329) (106,774)

 Volume variance (223,205) (57,818) (158,482) (286,020) (108,804) (170,527)

 Total net sales 

variance (488,887) (182,369) (306,518) (471,434) (194,133) (277,301)

Cost of sales: 

 Cost variance 177,707 62,307 118,854 117,648 32,488 87,706 

 Volume variance 200,891 52,038 145,399 258,070 98,172 157,351 

 Total cost variance 378,598 114,345 264,253 375,718 130,660 245,058 

Gross profit variance (110,289) (68,024) (42,265) (95,716) (63,473) (32,243)

SG&A expenses: 

 Expense variance (5,668) (2,560) (3,250) (5,950) (2,858) (3,316)

 Volume variance 6,365 1,649 4,858 8,429 3,206 5,447 

 Total SG&A variance 697 (911) 1,608 2,479 348 2,131 

Operating income 

variance (109,592) (68,935) (40,657) (93,237) (63,125) (30,112)

Summarized as: 

 Price variance (265,682) (124,551) (148,036) (185,414) (85,329) (106,774)

 Net cost/expense 

variance 172,039 59,748 115,604 111,698 29,630 84,391 

 Net volume variance (15,949) (4,131) (8,225) (19,521) (7,426) (7,729)

Note.--Unfavorable variances are shown in parentheses; all others are favorable. The data are comparable to 

changes in operating income as presented in table VI-1. 

Source: Compiled from data submitted in response to Commission questionnaires. 
VI‐8

CAPITAL EXPENDITURES AND RESEARCH AND DEVELOPMENT EXPENSES

Table VI‐4 presents capital expenditures and research and development (“R&D”)

expenses by firm. The increase in capital expenditures in ***.  

Table VI-4 

Wire rod: Capital expenditures and research and development expenses of U.S. producers, by 

firm, fiscal years 2011-13 

Item 

2011 2012 2013 

Value ($1,000) 

Capital expenditures 

 ArcelorMittal *** *** ***

 Cascade *** *** ***

 Charter *** *** ***

 Evraz *** *** ***

 Gerdau *** *** ***

 Keystone *** *** ***

 Mid American *** *** ***

 Nucor *** *** ***

 Republic *** *** ***

 Sterling *** *** ***

 Total 54,987 79,929 178,827

R&D expenses 

 *** *** *** ***

 *** *** *** ***

 *** *** *** ***

 *** *** *** ***

 Total 2,376 *** ***

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

The Commission’s questionnaire requested firms to describe the focus or nature of their

capital expenditures. Their responses are presented in the tabulation below:

Firm Nature or focus of capital expenditures 

 

* * * * * * * 

ASSETS AND RETURN ON INVESTMENT

Table VI‐5 presents data on the U.S. producers’ total assets and their return on

investment (“ROI”). ROI is calculated as the ratio of operating income (or loss) to total assets.

Operating income fell between 2011 and 2013, as noted earlier. If total assets had remained

the same, ROI would have declined, but as total assets increased, ***, ROI fell at a greater rate.  
VI‐9

Table VI-5 

Wire rod: U.S. producers’ total assets and return on investment, by firm, fiscal years, 2011-13 

Item 2011 2012 2013 

Total assets Value ($1,000) 

 ArcelorMittal *** *** ***

 Cascade *** *** ***

 Charter *** *** ***

 Evraz *** *** ***

 Gerdau *** *** ***

 Keystone *** *** ***

 Mid American *** *** ***

 Nucor *** *** ***

 Republic *** *** ***

 Sterling *** *** ***

 Total 787,470 764,284 876,250

ROI Ratio of operating income to total assets (percent) 

 ArcelorMittal *** *** ***

 Cascade *** *** *** 

 Charter *** *** *** 

 Evraz *** *** *** 

 Gerdau *** *** *** 

 Keystone *** *** *** 

 Mid American *** *** *** 

 Nucor *** *** ***

 Republic *** *** ***

 Sterling *** *** *** 

 Average 27.6 19.4 12.3 

Note.--these data are consistent with the operating income or (loss) shown in tables VI-1 and VI-2. 

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

CAPITAL AND INVESTMENT

The Commission requested U.S. producers of wire rod to describe any actual or

potential negative effects of imports of wire rod from China on their firms’ growth, investment,

ability to raise capital, development and production efforts, or the scale of capital investments.

Their comments are on the following pages.
VI‐10

Actual negative effects

ArcelorMittal:  ***.

Cascade:  ***.

Charter:  ***.

Evraz:  ***.

Gerdau:  ***.

Keystone:  ***.

Mid American:  ***.

Nucor:  ***.

Sterling:  ***.

Anticipated negative effects

ArcelorMittal:  ***.

Cascade:  ***.

Charter:  ***.  

Evraz:  ***.

Gerdau:  ***.

Keystone:  ***.

Mid American:  ***.

Nucor:  ***.

Sterling:  ***.  
VII‐1

PART VII: THREAT CONSIDERATIONS AND INFORMATION ON

NONSUBJECT COUNTRIES

Section 771(7)(F)(i) of the Act (19 U.S.C. § 1677(7)(F)(i)) provides that—

In determining whether an industry in the United States is threatened

with material injury by reason of imports (or sales for importation) of the

subject merchandise, the Commission shall consider, among other

relevant economic factors1‐‐ 

(I) if a countervailable subsidy is involved, such information as may

be presented to it by the administering authority as to the nature

of the subsidy (particularly as to whether the countervailable

subsidy is a subsidy described in Article 3 or 6.1 of the Subsidies

Agreement), and whether imports of the subject merchandise are

likely to increase,

(II) any existing unused production capacity or imminent, substantial

increase in production capacity in the exporting country indicating

the likelihood of substantially increased imports of the subject

merchandise into the United States, taking into account the

availability of other export markets to absorb any additional

exports,

(III) a significant rate of increase of the volume or market penetration

of imports of the subject merchandise indicating the likelihood of

substantially increased imports,

(IV) whether imports of the subject merchandise are entering at prices

that are likely to have a significant depressing or suppressing

effect on domestic prices, and are likely to increase demand for

further imports,

(V) inventories of the subject merchandise,

                                                            

1 Section 771(7)(F)(ii) of the Act (19 U.S.C. § 1677(7)(F)(ii)) provides that “The Commission shall

consider {these factors} . . . as a whole in making a determination of whether further dumped or

subsidized imports are imminent and whether material injury by reason of imports would occur unless

an order is issued or a suspension agreement is accepted under this title. The presence or absence of

any factor which the Commission is required to consider . . . shall not necessarily give decisive guidance

with respect to the determination. Such a determination may not be made on the basis of mere

conjecture or supposition.”
VII‐2

(VI) the potential for product‐shifting if production facilities in the

foreign country, which can be used to produce the subject

merchandise, are currently being used to produce other products,

(VII) in any investigation under this title which involves imports of both

a raw agricultural product (within the meaning of paragraph

(4)(E)(iv)) and any product processed from such raw agricultural

product, the likelihood that there will be increased imports, by

reason of product shifting, if there is an affirmative determination

by the Commission under section 705(b)(1) or 735(b)(1) with

respect to either the raw agricultural product or the processed

agricultural product (but not both),

(VIII) the actual and potential negative effects on the existing

development and production efforts of the domestic industry,

including efforts to develop a derivative or more advanced version

of the domestic like product, and

(IX) any other demonstrable adverse trends that indicate the

probability that there is likely to be material injury by reason of

imports (or sale for importation) of the subject merchandise

(whether or not it is actually being imported at the time).2

Information on the nature of the alleged subsidies was presented earlier in this report;

information on the volume and pricing of imports of the subject merchandise is presented in

Parts IV and V; and information on the effects of imports of the subject merchandise on U.S.

producers’ existing development and production efforts is presented in Part VI. Information on

inventories of the subject merchandise; foreign producers’ operations, including the potential

for “product‐shifting;” any other threat indicators, if applicable; and any dumping in third‐

country markets, follows. Also presented in this section of the report is information obtained

for consideration by the Commission on nonsubject countries.  

                                                            

2 Section 771(7)(F)(iii) of the Act (19 U.S.C. § 1677(7)(F)(iii)) further provides that, in antidumping

investigations, “. . . the Commission shall consider whether dumping in the markets of foreign countries

(as evidenced by dumping findings or antidumping remedies in other WTO member markets against the

same class or kind of merchandise manufactured or exported by the same party as under investigation)

suggests a threat of material injury to the domestic industry.”
VII‐3

THE INDUSTRY IN CHINA

China is the world’s largest producer of wire rod; production of all forms of wire rod in

China totaled 150.1 million short tons in 2012, representing 74.7 percent of total global wire

rod production.3 By one estimate, wire rod capacity in 2011 totaled 160.9 million short tons,

and increased to 167.6 million short tons in 2012 and then to 172.0 million short tons in 2013.

Capacity is expected to grow to 176.4 million short tons by 2015 with renovation and technical

improvement.4

Domestic producers estimate the total capacity for subject wire rod in China to be even

higher ‐ *** short tons in 2013; and total production to be *** short tons in 2013. They

identified the top five Chinese producers of wire rod (producing more than *** short tons each

in 2013 as ***).5

Some wire rod exported from China receives an export tax rebate. Chinese producers

allegedly qualify for these rebates if they add a trace amount of boron to the wire rod.6 Minimal

amounts of boron (exceeding 0.0008 percent (8 ppm) by weight) added to wire rod allow it to

be classified for customs purposes as alloy wire rod in HTSUS subheading 7227.90.7 The

addition of boron permits Chinese producers to take advantage of a 9 percent export tax rebate

on exports of alloy wire rod.8 Boron‐added wire rod is used in many of the same applications as

non‐boron added wire rod. It reportedly costs relatively little to add limited amounts of boron

to wire rod. While boron can increase drawability in some products, it does not change the

characteristics of wire rod in most cases.9  

The Commission issued foreign producers’ or exporters’ questionnaires to 48 firms

believed to produce and/or export wire rod from China.10 The Commission did not receive any

questionnaire responses from Chinese firms. Table VII‐1 presents data on the top Chinese

exporters of wire rod to the United States, obtained through proprietary Customs data. Table

VII‐2 presents Chinese exports of bar and rod (including wire rod) from 2011‐13 as reported by

China Customs.

                                                            

3 World Steel Association, Steel Statistical Yearbook 2013, p. 43. Production number may be over‐

inclusive because it encompasses all wire rod, including that outside of the scope of these investigations. 4 World Steel Dynamics, Chinese Steel Hits the Great Wall IV, May 2013, pp. 18 and 30. 5 Domestic producers’ postconference brief, p. 33 and exhibit 12.

6 Conference transcript, p. 10 (Kerkvliet). 7 HTSUS (2014), “Chapter 72 Iron and Steel, Note 1(f) Other Alloy Steel,” January 1, 2014, p. XV 72‐2.

8 Petition, Vol. II, exhibit PRC‐6.

9 Conference transcript, pp. 20 and 71‐73 (Nystrom and Price).    10 These firms were identified through a review of information submitted in the petition and

contained in proprietary Customs records.  
VII‐4

Table VII-1 

Wire rod: U.S. imports from China by identified foreign manufacturer, January 2011 through 

November 2013 

* * * * * * * 

Table VII-2 

Bars and rod (including wire rod): Exports from China, 2011-13 

Country

Calendar year 

2011 2012 2013 

Quantity (short tons) 

Korea 1,103,936 1,271,032 1,222,563 

Thailand 467,369 834,352 1,112,951 

Vietnam 250,939 429,740 754,186 

United States 93 332,198 691,493 

Indonesia 105,205 418,667 609,818 

Philippines 170,531 315,037 573,987 

All others 1,058,559 2,460,567 3,736,056 

 Total 3,156,631 6,061,592 8,701,054 

Source: Compiled from Global Trade Atlas, HS 7213.91, Bars And Rods, Hot-Rolled, In Irregularly Wound 

Coils, Of Iron Or Nonalloy Steel, Of Circular Cross-Section Measuring Less Than 14 Mm In Diameter, 

Nesoi; HS 7227.20, Bars And Rods Of Silico-Manganese Steel, Hot-Rolled, In Irregularly Wound Coils; 

and HS 7227.90, Bars And Rods Of Alloy Steel (Other Than Stainless), Hot-Rolled, In Irregularly Wound 

Coils, Nesoi. Retrieved February 24, 2014. 

U.S. INVENTORIES OF IMPORTED MERCHANDISE

Table VII‐3 presents data on U.S. importers’ reported inventories of wire rod held at

year‐end 2011, 2012, and 2013.
VII‐5

Table VII-3 

Wire rod: U.S. importers’ end-of-period (EOP) inventories, 2011-13 

Item 

Calendar year 

2011 2012 2013 

 Quantity (short tons) 

U.S. importers' EOP inventories of imports from China 0 *** 132,312

 Ratio (percent) 

U.S. importers' EOP inventories of imports from China to-- 

 U.S. imports 0.0 *** 19.4

Total shipments 0.0 *** 22.4

 Quantity (short tons) 

U.S. importers' EOP inventories of imports from All other sources 54,949 *** ***

 Ratio (percent) 

U.S. importers' EOP inventories of imports from All other sources to--

 U.S. imports 8.7 *** ***

Total shipments 8.9 *** ***

 Quantity (short tons) 

U.S. importers' EOP inventories of imports from all sources 54,949 72,757 ***

 Ratio (percent) 

U.S. importers' EOP inventories of imports from all sources to-- 

 U.S. imports 8.7 8.0 ***

Total shipments 8.9 8.1 ***

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

U.S. IMPORTERS’ CURRENT ORDERS

The Commission requested importers to indicate whether they imported or arranged for

the importation of wire rod from China after December 31, 2013. Eleven of 13 responding U.S.

importers reported that they imported or arranged for imports of wire rod in 2014. Table VII‐4

presents data reported by U.S. importers concerning their arranged imports of wire rod.
VII‐6

Table VII-4 

Wire rod: U.S. importers' arranged imports, 2014 

Item 

2014 

Jan-Mar Apr-Jun Jul-Sep Oct-Dec 

U.S. importers' imports arranged from.--

 China 132,136 197,198 0 0

All other sources1 *** *** *** ***

Total arranged imports *** *** *** ***

 1 Other sources were ***. 

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

ANTIDUMPING OR COUNTERVAILING DUTY ORDERS IN THIRD‐COUNTRY MARKETS

In July 2009, the European Union imposed an antidumping duty order on imports of

wire rod from China. The duty rate for China is 38.6 percent for Valin Group and 52.3 percent

for all others. In November 2012, Thailand initiated an antidumping investigation on high

carbon steel wire rod from China, alleged to be dumped at 15.98 percent.11 In February 2013,

effective for five years, Malaysia imposed antidumping duties with a rate of 25.2 percent12 on

imports of wire rod from China. In addition, Indonesia initiated a safeguard investigation on

imports of wire rod from China in January 2014.13

INFORMATION ON NONSUBJECT COUNTRIES

Japan is the world’s second largest producer of wire rod; its wire rod production in 2012

totaled 6.4 million short tons, representing 3.2 percent of total global wire rod production.

Other large producers of wire rod include Germany, which produced 5.7 million short tons in

2009,14 Italy which produced 4.1 million short tons in 2012, and Brazil which produced 3.3

million short tons in 2012.15  

Table VII‐5 presents world exports of wire rod from 2011 to 2013.

                                                            

11 Department of Foreign Trade Notification on an Initiation of Anti‐Dumping Investigation of High

Carbon Steel Wire Rod including High Carbon Steel Wire Rod Added Other Elements Originating in the

People’s Republic of China B.E. 2555 (2012), November 29, 2012, found at

http://btir.dft.go.th/DocFiles/229_130306092725_Initiation%20Notification_HCWR.pdf.   12 Jiangsu Shagang International Trade Co Ltd. and Jiangsu Yonggang Group Co Ltd. are exempt from

the order.

13 Petitioners’ postconference brief, pp. 39‐40 and exhibit 11. 14 Data were not available for 2010‐12.

15 Production number may be over‐inclusive because it encompasses all wire rod, including that

outside of the scope of these investigations. World Steel Association, Steel Statistical Yearbook 2013, pp.

42‐43.
VII‐7

Table VII-5 

Wire rod: World exports, by country, 2011-13 

Country

Calendar year 

2011 2012 2013 

Value (1,000 dollars) 

China 2,064,861 3,385,439 4,376,910

Japan 861,996 871,378 881,700

Germany 465,589 480,845 (1)

Austria 313,427 271,796 (1)

Belgium 256,593 261,479 (1)

Czech Republic 250,058 194,526 175,208

Canada 190,057 189,972 169,330

All others 1,741,133 1,343,573 608,561 

 Total 6,143,713 6,999,008 6,211,709 1 Data not available. 

Note.—Data for some countries only available through partial year 2013. 

Source: Compiled from Global Trade Atlas, HS 7227.20, Bars And Rods Of Silico-Manganese Steel, HotRolled, In Irregularly Wound Coils; HS 7227.90, Bars And Rods Of Alloy Steel (Other Than Stainless), 

Hot-Rolled, In Irregularly Wound Coils, Nesoi; and 7213.99, Bars And Rods, Hot-Rolled, In Irregularly 

Wound Coils, Of Iron Or Nonalloy Steel, Nesoi. Retrieved February 24, 2014. 

Canada

The industry in Canada is not among the larger global producers and exporters of wire

rod. Nonetheless, Canada is a leading source of U.S. wire rod imports. The largest wire rod

producers in Canada are Ivaco Inc. (Heico) and ArcelorMittal. Combined, these producers have

an estimated wire rod and bar/rod/sections rolling capacity of nearly *** short tons.16

Other leading sources of wire rod to the United States

The industries in Japan and Germany are among the largest global producers and

exporters of wire rod. The largest wire rod producers in Japan include JFE, Nippon Steel &

Sumitomo Metal Corp., Kobe Steel, and Nakayama Steel Works. Combined, these and smaller

producers have an estimated wire rod and bar/rod/sections rolling capacity of more than ***

short tons.17 The largest wire rod producers in Germany include ArcelorMittal, Badische

                                                            

16 ***. EuroStrategy Corporation, The World Steel Capacity Book, First Edition 2010, table 9.3.1.

Capacity may be overstated due to shared production. 17 ***. EuroStrategy Corporation, The World Steel Capacity Book, First Edition 2010, table 4.3.4.

Capacity may be overstated due to shared production.
VII‐8

Stahlwerke, Riva Stahl, and Saarstahl. Combined, these and smaller producers have an

estimated wire rod and bar/rod/sections rolling capacity of more than *** short tons.18  

The industries in Brazil and the United Kingdom are not among the larger global

producers and exporters of wire rod. Nonetheless, they have maintained a presence in the

United States. The largest wire rod producers in Brazil include ArcelorMittal, Gerdau, and

Votorantim Metais. Combined, these and smaller producers have an estimated wire rod and

bar/rod/sections rolling capacity of more than *** short tons.19 The largest wire rod producers

in the United Kingdom include Celsa and Tata Steel. Combined, these and smaller producers

have an estimated wire rod and bar/rod/sections rolling capacity of nearly *** short tons.20  

                                                            

18 ***. EuroStrategy Corporation, The World Steel Capacity Book, First Edition 2010, table 7.3.9.

Capacity may be overstated due to shared production.

19 ***. EuroStrategy Corporation, The World Steel Capacity Book, First Edition 2010, table 12.3.2.

Capacity may be overstated due to shared production.

20 ***. EuroStrategy Corporation, The World Steel Capacity Book, First Edition 2010, table 7.3.23.

Capacity may be overstated due to shared production.
A‐1

APPENDIX A

FEDERAL REGISTER NOTICES  

A‐3

The Commission makes available notices relevant to its investigations and reviews on its

website, www.usitc.gov.  In addition, the following tabulation presents, in chronological order,

Federal Register notices issued by the Commission and Commerce during the current

proceeding.   

Citation Title Link

79 FR 7225

February 6, 2014

Carbon and Certain Alloy Steel Wire Rod

From China; Institution of Antidumping

and Countervailing Duty Investigations and

Scheduling of Preliminary Phase

Investigations

https://federalregister.gov/a/

2014‐02494

79 FR 11077

February 27, 2014

Carbon and Certain Alloy Steel Wire Rod

From the People's Republic of China:

Initiation of Antidumping Duty

Investigation

https://federalregister.gov/a/

2014‐04345

79 FR 11085

February 27, 2014

Carbon and Certain Alloy Steel Wire Rod

From the People's Republic of China:

Initiation of Countervailing Duty

Investigation

https://federalregister.gov/a/

2014‐04343

B‐1

APPENDIX B

CALENDAR OF THE PUBLIC STAFF CONFERENCE

B‐3

CALENDAR OF PUBLIC PRELIMINARY CONFERENCE

Those listed below appeared as witnesses at the United States International Trade

Commission’s staff conference:

Subject: Carbon and Certain Alloy Steel Wire Rod from China

Inv. Nos.: 701‐TA‐512 and 731‐TA‐1248 (Preliminary)

Date and Time: February 21, 2014 ‐ 9:30 am

Sessions were held in connection with the preliminary phase of these investigations in the

Main Hearing Room (room 101), 500 E Street, S.W., Washington, DC.

OPENING REMARKS:

Petitioners (Paul C. Rosenthal, Kelley Drye & Warren LLP)

Respondents (NONE)                             

        

In Support of the Imposition of

Antidumping and Countervailing Duty Orders:

Kelley Drye & Warren LLP

Washington, DC

on behalf of

ArcelorMittal USA

Gerdau Ameristeel

Charter Steel

Evraz Pueblo

Keystone Consolidated Industries

    James Kerkvliet, Vice President of Sales and Marketing,

    Gerdau Ameristeel US

    Edward Goettl, Manager of Wire Rod Sales, Gerdau

Ameristeel US

    Vic Stirnaman, President, Keystone Consolidated Industries

    Daniel Fuller, Director of Wire Rod Sales, ArcelorMittal USA
B‐4

In Support of the Imposition of   

Antidumping and Countervailing Duty Orders (continued):

    Stephen Ashby, Director of Rod and Bar Sales, Evraz Pueblo

    Holly Hart, Legislative Director, United Steelworkers

    Gina Beck, Economist, Georgetown Economic Consulting

     Services

         Paul C. Rosenthal    )

         Kathleen W. Cannon )

                 ) – OF COUNSEL

         R. Alan Luberda    )

         Benjamin B. Caryl    )

Wiley Rein

Washington, DC

on behalf of

Nucor Corporation

    Eric Nystrom, National Marketing Manager for

     Wire Rod, SBQ, and Cold Finish Products,

     Nucor Corporation

         Alan H. Price     )

                 ) – OF COUNSEL

         Daniel B. Pickard    )

   

   
B‐5

In Opposition to the Imposition of   

Antidumping and Countervailing Duty Orders:

Vorys, Sater, Seymour and Pease LLP

Washington, DC

on behalf of

The American Wire Producers Association (AWPA)

    Kimberly A. Korbel, Executive Director, AWPA

      Frederick P. Waite    )

          ) – OF COUNSEL

      Kimberly R. Young    )

Covington & Burling

Washington, DC

on behalf of

The Lincoln Electronic Company

    P. Michael DeShane, Director, North America Consumable

Purchasing, The Lincoln Electric Company

       David R. Grace ) – OF COUNSEL

     

REBUTTAL/CLOSING REMARKS:

Petitioners (Paul C. Rosenthal, Kelley Drye & Warren LLP; and

Daniel B. Pickard, Wiley Rein)

Respondents (Frederick P. Waite, Vorys, Sater, Seymour and Pease LLP)    

C‐1

APPENDIX C

SUMMARY DATA

Table C-1

Wire rod: Summary data concerning the U.S. market, 2011-13

2011 2012 2013 2011-13 2011-12 2012-13

U.S. consumption quantity:

Amount..................................................................................... 5,129,822 5,328,621 5,308,094 3.5 3.9 (0.4)

Producers' share (fn1)............................................................. 75.6 71.5 67.8 (7.8) (4.1) (3.7)

Importers' share (fn1):

China..................................................................................... 0.0 4.5 11.7 11.7 4.5 7.1

All others sources, nonsubject.............................................. 24.4 24.0 20.5 (3.9) (0.5) (3.4)

Total imports.................................................................... 24.4 28.5 32.2 7.8 4.1 3.7

U.S. consumption value:

Amount..................................................................................... 4,154,892 4,088,258 3,761,130 (9.5) (1.6) (8.0)

Producers' share (fn1)............................................................. 72.5 69.1 67.3 (5.2) (3.3) (1.9)

Importers' share (fn1):

China..................................................................................... 0.0 3.6 8.9 8.9 3.6 5.4

All others sources, nonsubject.............................................. 27.5 27.3 23.8 (3.7) (0.2) (3.5)

Total imports.................................................................... 27.5 30.9 32.7 5.2 3.3 1.9

U.S. imports from:

China: CDE

Quantity................................................................................. 144 241,938 618,818 429,778.4 167,968.5 155.8

Value..................................................................................... 162 146,221 335,879 207,726.4 90,374.7 129.7

Unit value.............................................................................. $1,123 $604 $543 (51.7) (46.2) (10.2)

Ending inventory quantity...................................................... 0 *** 132,312 fn2 fn2 231.4

All other sources:

Quantity................................................................................. 1,253,533 1,276,955 1,089,818 (13.1) 1.9 (14.7)

Value..................................................................................... 1,142,676 1,115,063 895,764 (21.6) (2.4) (19.7)

Unit value.............................................................................. $912 $873 $822 (9.8) (4.2) (5.9)

Ending inventory quantity...................................................... 54,949 *** *** *** *** ***

Total imports:

Quantity................................................................................. 1,253,677 1,518,893 1,708,635 36.3 21.2 12.5

Value..................................................................................... 1,142,838 1,261,284 1,231,643 7.8 10.4 (2.4)

Unit value.............................................................................. $912 $830 $721 (20.9) (8.9) (13.2)

Ending inventory quantity...................................................... 54,949 72,757 *** *** 32.4 ***

U.S. producers':

Average production capacity quantity...................................... 5,173,168 5,131,954 5,073,815 (1.9) (0.8) (1.1)

Production quantity.................................................................. 3,907,416 3,879,060 3,655,088 (6.5) (0.7) (5.8)

Capacity utilization (fn1)........................................................... 75.5 75.6 72.0 (3.5) 0.1 (3.5)

U.S. shipments:

Quantity................................................................................. 3,876,145 3,809,728 3,599,459 (7.1) (1.7) (5.5)

Value..................................................................................... 3,012,054 2,826,974 2,529,487 (16.0) (6.1) (10.5)

Unit value.............................................................................. $777 $742 $703 (9.6) (4.5) (5.3)

Export shipments:

Quantity................................................................................. 34,687 26,748 24,319 (29.9) (22.9) (9.1)

Value..................................................................................... 28,888 31,597 22,566 (21.9) 9.4 (28.6)

Unit value.............................................................................. $833 $1,181 $928 11.4 41.8 (21.4)

Ending inventory quantity......................................................... 193,261 235,846 266,868 38.1 22.0 13.2

Inventories/total shipments (fn1).............................................. 4.9 6.1 7.4 2.4 1.2 1.2

Production workers.................................................................. 2,239 2,269 2,192 (2.1) 1.3 (3.4)

Hours worked (1,000s)............................................................. 4,552 4,587 4,329 (4.9) 0.8 (5.6)

Wages paid ($1,000)............................................................... 166,385 174,648 156,838 (5.7) 5.0 (10.2)

Hourly wages (dollars per hour)............................................... $36.55 $38.07 $36.23 (0.9) 4.2 (4.8)

Productivity (short tons per 1,000 hours)................................. 858 846 844 (1.6) (1.5) (0.2)

Unit labor costs........................................................................ $42.58 $45.02 $42.91 0.8 5.7 (4.7)

Net sales:

Quantity................................................................................. 3,910,832 3,836,475 3,623,777 (7.3) (1.9) (5.5)

Value..................................................................................... 3,040,941 2,858,572 2,552,054 (16.1) (6.0) (10.7)

Unit value.............................................................................. $778 $745 $704 (9.4) (4.2) (5.5)

Cost of goods sold (COGS)..................................................... 2,736,933 2,622,587 2,358,335 (13.8) (4.2) (10.1)

Gross profit of (loss)................................................................. 304,008 235,985 193,719 (36.3) (22.4) (17.9)

SG&A expenses....................................................................... 86,722 87,633 86,025 (0.8) 1.1 (1.8)

Operating income or (loss)....................................................... 217,286 148,352 107,694 (50.4) (31.7) (27.4)

Capital expenditures................................................................ 54,987 79,929 178,827 225.2 45.4 123.7

Unit COGS............................................................................... $700 $684 $651 (7.0) (2.3) (4.8)

Unit SG&A expenses............................................................... $22 $23 $24 7.1 3.0 3.9

Unit operating income or (loss)................................................ $56 $39 $30 (46.5) (30.4) (23.1)

COGS/sales (fn1)..................................................................... 90.0 91.7 92.4 2.4 1.7 0.7

Operating income or (loss)/sales (fn1)..................................... 7.1 5.2 4.2 (2.9) (2.0) (1.0)

fn1.--Report data are in percent and period changes are in percentage points.

fn2.--Undefined. 

Source: Compiled from data submitted in response to Commission questionnaires and from official Commerce statistics.

C-3

(Quantity=short tons; Value=1,000 dollars; Unit values, unit labor costs, and unit expenses=dollars per short ton; Period changes=percent--exceptions noted)

Report data Period changes

Calendar year Calendar year
Table C-2

Wire rod: Summary data concerning the U.S. merchant market, 2011-13

2011 2012 2013 2011-13 2011-12 2012-13

U.S. consumption quantity:

Amount..................................................................................... 4,198,093 4,334,460 4,303,835 2.5 3.2 (0.7)

Producers' share (fn1)............................................................. 70.1 65.0 60.3 (9.8) (5.2) (4.7)

Importers' share (fn1):

China..................................................................................... 0.0 5.6 14.4 14.4 5.6 8.8

All others sources, nonsubject.............................................. 29.9 29.5 25.3 (4.5) (0.4) (4.1)

Total imports.................................................................... 29.9 35.0 39.7 9.8 5.2 4.7

U.S. consumption value:

Amount..................................................................................... 3,483,577 3,405,179 3,107,268 (10.8) (2.3) (8.7)

Producers' share (fn1)............................................................. 67.2 63.0 60.4 (6.8) (4.2) (2.6)

Importers' share (fn1):

China..................................................................................... 0.0 4.3 10.8 10.8 4.3 6.5

All others sources, nonsubject.............................................. 32.8 32.7 28.8 (4.0) (0.1) (3.9)

Total imports.................................................................... 32.8 37.0 39.6 6.8 4.2 2.6

U.S. imports from:

China: CDE

Quantity................................................................................. 144 241,938 618,818 429,778.4 167,968.5 155.8

Value..................................................................................... 162 146,221 335,879 207,726.4 90,374.7 129.7

Unit value.............................................................................. $1,123 $604 $543 (51.7) (46.2) (10.2)

Ending inventory quantity...................................................... 0 *** 132,312 fn2 fn2 231.4

All other sources:

Quantity................................................................................. 1,253,533 1,276,955 1,089,818 (13.1) 1.9 (14.7)

Value..................................................................................... 1,142,676 1,115,063 895,764 (21.6) (2.4) (19.7)

Unit value.............................................................................. $912 $873 $822 (9.8) (4.2) (5.9)

Ending inventory quantity...................................................... 54,949 *** *** *** *** ***

Total imports:

Quantity................................................................................. 1,253,677 1,518,893 1,708,635 36.3 21.2 12.5

Value..................................................................................... 1,142,838 1,261,284 1,231,643 7.8 10.4 (2.4)

Unit value.............................................................................. $912 $830 $721 (20.9) (8.9) (13.2)

Ending inventory quantity...................................................... 54,949 72,757 *** *** 32.4 ***

U.S. producers':

Average production capacity quantity (fn 3)............................. 5,173,168 5,131,954 5,073,815 (1.9) (0.8) (1.1)

Production quantity (fn 3)......................................................... 3,907,416 3,879,060 3,655,088 (6.5) (0.7) (5.8)

Capacity utilization (fn1)........................................................... 75.5 75.6 72.0 (3.5) 0.1 (3.5)

Commercial U.S. shipments:

Quantity................................................................................. 2,944,416 2,815,567 2,595,200 (11.9) (4.4) (7.8)

Value..................................................................................... 2,340,739 2,143,895 1,875,625 (19.9) (8.4) (12.5)

Unit value.............................................................................. $795 $761 $723 (9.1) (4.2) (5.1)

Export shipments:

Quantity................................................................................. 34,687 26,748 24,319 (29.9) (22.9) (9.1)

Value..................................................................................... 28,888 31,597 22,566 (21.9) 9.4 (28.6)

Unit value.............................................................................. $833 $1,181 $928 11.4 41.8 (21.4)

Ending inventory quantity (fn 3)............................................... 193,261 235,846 266,868 38.1 22.0 13.2

Inventories/total merchant market shipments (fn1).................. 6.5 8.3 10.2 3.7 1.8 1.9

Production workers (fn 3)......................................................... 2,239 2,269 2,192 (2.1) 1.3 (3.4)

Hours worked (1,000s) (fn 3) .................................................. 4,552 4,587 4,329 (4.9) 0.8 (5.6)

Wages paid ($1,000) (fn 3)...................................................... 166,385 174,648 156,838 (5.7) 5.0 (10.2)

Hourly wages (dollars per hour) (fn 3)..................................... $36.55 $38.07 $36.23 (0.9) 4.2 (4.8)

Productivity (short tons per 1,000 hours) (fn 3)........................ 858 846 844 (1.6) (1.5) (0.2)

Unit labor costs (fn 3)............................................................... $42.58 $45.02 $42.91 0.8 5.7 (4.7)

Net sales:

Quantity................................................................................. 2,979,103 2,842,314 2,619,518 (12.1) (4.6) (7.8)

Value..................................................................................... 2,369,626 2,175,493 1,898,192 (19.9) (8.2) (12.7)

Unit value.............................................................................. $795 $765 $725 (8.9) (3.8) (5.3)

Cost of goods sold (COGS)..................................................... 2,138,066 2,007,406 1,762,347 (17.6) (6.1) (12.2)

Gross profit of (loss)................................................................. 231,560 168,087 135,845 (41.3) (27.4) (19.2)

SG&A expenses....................................................................... 69,832 69,485 67,354 (3.5) (0.5) (3.1)

Operating income or (loss)....................................................... 161,728 98,602 68,491 (57.7) (39.0) (30.5)

Unit COGS............................................................................... $718 $706 $673 (6.3) (1.6) (4.7)

Unit SG&A expenses............................................................... $23 $24 $26 9.7 4.3 5.2

Unit operating income or (loss)................................................ $54 $35 $26 (51.8) (36.1) (24.6)

COGS/sales (fn1)..................................................................... 90.2 92.3 92.8 2.6 2.0 0.6

Operating income or (loss)/sales (fn1)..................................... 6.8 4.5 3.6 (3.2) (2.3) (0.9)

fn1.--Report data are in percent and period changes are in percentage points.

fn2.--Undefined. 

fn3.--Represents firms' overall wire rod operations, not specific to merchant market operations.

Source: Compiled from data submitted in response to Commission questionnaires and from official Commerce statistics.

C-4

(Quantity=short tons; Value=1,000 dollars; Unit values, unit labor costs, and unit expenses=dollars per short ton; Period changes=percent--exceptions noted)

Report data Period changes

Calendar year Calendar year