U.S. International Trade Commission

Publication 4237 June 2011

Washington, DC 20436

Hot-Rolled Flat-Rolled 

Carbon-Quality Steel Products 

from Brazil, Japan, and Russia

Investigation Nos. 701-TA-384 and 731-TA-806-808 (Second Review)
U.S. International Trade Commission

COMMISSIONERS 

 

Deanna Tanner Okun, Chairman 

Irving A. Williamson, Vice Chairman 

Charlotte R. Lane 

Daniel R. Pearson 

Shara L. Aranoff 

Dean A. Pinkert

Robert B. Koopman

Staff assigned

Address all communications to 

Secretary to the Commission 

United States International Trade Commission 

Washington, DC 20436

Acting Director of Operations

Nathanael Comly, Investigator 

Gerald Houck, Industry Analyst 

Craig Thomsen, Economist 

David Boyland, Accountant 

Marc Bernstein, Attorney 

Steven Hudgens, Statistician 

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

Washington, DC 20436 

www.usitc.gov

Publication 4237 June 2011

Hot-Rolled Flat-Rolled 

Carbon-Quality Steel Products 

from Brazil, Japan, and Russia

Investigation Nos. 701-TA-384 and 731-TA-806-808 (Second Review)
 
CONTENTS

Page

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

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

Separate and dissenting views of Commissioners Charlotte R. Lane and Dean A. Pinkert . . . . . . . . 47

Part I: Introduction and overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1

The original investigations and subsequent five-year reviews . . . . . . . . . . . . . . . . . . . . . . . . I-2

Suspension agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-3

Summary data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-5

Previous and related Title VII investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-10

Previous and related section 332 investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-12

Previous and related safeguard investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-14

Statutory criteria and organization of the report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-16

Statutory criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-16

Organization of the report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-17

Commerce’s reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-18

Administrative reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-18

Five-year reviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-20

Distribution of Continued Dumping and Subsidy Offset Act funds . . . . . . . . . . . . . . . . . . . . . . . I-21

The subject merchandise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-23

Commerce’s scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-23

Tariff treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-24

The product . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-25

Description and applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-25

Manufacturing processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-26

Domestic like product issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-29

U.S. market participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-30

U.S. producers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-30

U.S. importers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-33

U.S. purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-37

Apparent U.S. consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-37

U.S. market shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-39

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

Channels of distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

Geographic distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1

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

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

U.S. demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-10

Substitutability issues .......................................................... II-17

Purchaser characteristics ..................................................... II-17

Knowledge of country sources ................................................ II-17

Factors affecting purchasing decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-18

Comparison of domestic products, subject imports, and nonsubject imports ............. II-22

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

U.S. supply elasticity ........................................................ II-26

U.S. demand elasticity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-26

Substitution elasticity ....................................................... II-26

i
CONTENTS

Page

Part III: Condition of the U.S. industry ............................................ III-1

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-1

Background ............................................................... III-4

Changes experienced in the industry ............................................ III-4

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

U.S. capacity, production, and capacity utilization ................................... III-4

Constraints on capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-6

Alternative and downstream products ........................................... III-7

U.S. producers’ shipments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-9

U.S. producers’ inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-11

U.S. producers’ imports and purchases ............................................. III-12

U.S. producers’ employment, wages, and productivity ................................ III-13

Financial condition of the U.S. industry ............................................ III-14

Background ............................................................... III-14

Producers’ operations on hot-rolled steel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . III-14

Research and development expenses, capital expenditures, assets, and return on investment III-19

Part IV: U.S. imports and the foreign industries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1

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

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-1

Imports from subject and nonsubject countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-2

Leading nonsubject sources of imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-3

U.S. importers’ imports subsequent to December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-5

U.S. importers' inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-6

Cumulation considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-8

Geographic markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-9

Presence in the market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-9

The industry in Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-9

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

Hot-rolled steel operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-10

Alternative and downstream products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-13

The industry in Japan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-15

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

Hot-rolled steel operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-16

Alternative and downstream products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-20

The industry in Russia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-22

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-22

Hot-rolled steel operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-23

Alternative and downstream products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-27

The global market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-28

Production and capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-28

Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-29

Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV-31

ii
CONTENTS

Page

Part V: Pricing and related information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

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

Raw material costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-1

Energy costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-4

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

Exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-5

Pricing practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-7

Pricing methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-7

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

Price leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-8

Regional price differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-8

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

Price trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-9

Price comparisons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V-16

Appendixes

A. Federal Register notices and the Commission’s statement on adequacy . . . . . . . . . . . . . . . . . . A-1

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

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

D. Responses of U.S. producers, U.S. importers, U.S. purchasers, and foreign producers 

 concerning the significance of the subject orders and suspension agreement and 

 the likely effects of revocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1

E. Hot-rolled steel: Financial results, selected financial information by firm, and variance 

 analysis (Valuation of internal consumption and transfers to related firms based on cost 

 plus allocated gross profit of downstream products) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1

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

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

iii

UNITED STATES INTERNATIONAL TRADE COMMISSION 

 

Investigation Nos. 701-TA-384 and 731-TA-806-808 (Second Review) 

HOT-ROLLED FLAT-ROLLED CARBON-QUALITY 

STEEL PRODUCTS FROM BRAZIL, JAPAN, AND RUSSIA 

DETERMINATIONS 

On the basis of the record1

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

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

1930 (19 U.S.C. ' 1675(c)), that termination of the suspension agreement on hot-rolled flat-rolled 

carbon-quality steel products from Russia would be likely to lead to continuation or recurrence of material 

injury to an industry in the United States within a reasonably foreseeable time. The Commission further 

determines that revocation of the countervailing duty order on hot-rolled flat-rolled carbon-quality steel 

products from Brazil and revocation of the antidumping duty orders on hot-rolled flat-rolled carbon-quality 

steel products from Brazil and Japan would not be likely to lead to continuation or recurrence of material 

injury to an industry in the United States within a reasonably foreseeable time. 2 

BACKGROUND

The Commission instituted these reviews on April 1, 2010 (75 F.R. 16504) and determined on July 

6, 2010 that it would conduct full reviews (75 F.R. 42782, July 22, 2010). Notice of the scheduling of the 

Commission=s reviews and of a public hearing to be held in connection therewith was given by posting 

copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, 

and by publishing the notice in the Federal Register on October 12, 2010 (75 F.R. 62566). The hearing 

was held in Washington, DC, on April 6, 2011, and all persons who requested the opportunity were 

permitted to appear in person or by counsel. 

 

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

 2

 Commissioners Charlotte R. Lane and Dean A. Pinkert dissent with respect to the determinations regarding 

hot-rolled flat-rolled carbon-quality steel products from Brazil and Japan. 
 
VIEWS OF THE COMMISSION

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

Act of 1930, as amended (the Act), that termination of the suspended investigation on hot-rolled flatrolled carbon-quality steel products (“hot-rolled steel”) from Russia would be likely to lead to

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

foreseeable time. We also determine that revocation of the countervailing duty order on hot-rolled steel

from Brazil and the antidumping duty orders on hot-rolled steel from Brazil and Japan would not be likely

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

reasonably foreseeable time.1

I. BACKGROUND

In June 1999, the Commission determined that an industry in the United States was being

materially injured by reason of imports of hot-rolled steel from Japan that were being sold in the United

States at less than fair value (LTFV).2

 The Department of Commerce issued an antidumping duty order

with respect to subject imports from Japan in June 1999.3

In August 1999, the Commission determined that an industry in the United States was being

materially injured by reason of subsidized and LTFV imports of hot-rolled steel from Brazil and LTFV

imports of hot-rolled steel from Russia.4

 Commerce had suspended the countervailing duty and

antidumping duty investigations on imports from Brazil and Russia in July 1999.5

 The Russian

suspension agreement remains effective. Commerce terminated the suspension agreement with respect to

the antidumping duty investigation on subject imports from Brazil in February 2002 and issued an

antidumping duty order in its place in March 2002.6

 In September 2004, Commerce terminated the

 1 Commissioner Charlotte R. Lane and Commissioner Dean A. Pinkert dissent with respect to subject imports

from Brazil and Japan. They determine that revocation of the countervailing duty order on hot-rolled steel from

Brazil and the antidumping duty orders on hot-rolled steel from Brazil and Japan would be likely to lead to

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

See Separate and Dissenting Views of Commissioners Charlotte R. Lane and Dean A. Pinkert. They join sections I,

II, III, IV.A.-E., and V.A.-C. of this opinion.

 2

 Certain Hot-Rolled Steel Products from Japan, Inv. No. 731-TA-807 (Final), USITC Pub. 3202 (June 1999)

(“Original Japan Determination”). In making its determination on subject imports from Japan, the Commission

cumulated subject imports from Brazil, Japan, and Russia.

 3

 Antidumping Duty Order: Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Japan, 64 Fed.

Reg. 34778 (Jun. 29, 1999). 

 4

 Certain Hot-Rolled Steel Products from Brazil and Russia, Inv. Nos. 701-TA-384, 731-TA-806, 808 (Final),

USITC Pub. 3223 (Aug. 1999). In these determinations, the Commission adopted the substantive analysis for

cumulated subject imports it made in the Original Japan Determination. USITC Pub. 3223 at 3.

 5

 Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil: Suspension of Antiumping Duty

Investigation, 64 Fed. Reg. 38792 (July 19, 1999); Suspension of Countervailing Duty Investigation, 64 Fed. Reg

38797 (July 19, 1999); Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from the Russian Federation: 

Suspension of Antidumping Duty Investigation, 64 Fed. Reg. 38642 (July 19, 1999).

 6

 Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil: Final Results of Antidumping Duty

Administrative Review and Termination of the Suspension Agreement, 67 Fed. Reg. 6226 (Feb. 11, 2002); Notice of

Antidumping Duty Order, 67 Fed. Reg. 11093 (Mar. 12, 2002).

3
suspension agreement with respect to the countervailing duty investigation on subject imports from Brazil

and issued a countervailing duty order in its place.7

The Commission instituted the first five-year reviews concerning hot-rolled steel from Brazil,

Japan, and Russia in May 2004. It conducted full reviews based on adequate domestic interested party

group response and adequate respondent interested party group response for the review on subject imports

from Russia; there were no respondent interested party responses concerning the reviews on subject

imports from Brazil or Japan. In April 2005, the Commission made affirmative determinations in each of

the reviews.8

 Commerce subsequently issued notices continuing the countervailing duty order on subject

imports from Brazil, the antidumping duty orders on subject imports from Brazil and Japan, and the

suspension agreement on subject imports from Russia.9

The Commission instituted the instant reviews on April 1, 2010.10 The domestic producers of

hot-rolled steel that responded to the notice of institution were ArcelorMittal USA, LLC (“AMUSA”),

Nucor Corp. (“Nucor”), United States Steel Corp. (“U.S. Steel”), Gallatin Steel, SSAB NAD, and Steel

Dynamics, Inc. (“SDI”).11 Collectively, these producers will be referred to as “Domestic Producers.” 

Respondents from each subject country also responded to the notice of institution. These

included: (1) Companhia Siderurgica Nacional (“CSN”) and Usinas Siderurgicas de Minas Gerais SA

(“Usiminas”), producers and exporters of subject merchandise from Brazil (jointly “Brazilian

Respondents”); (2) JFE Steel Corp., and Nippon Steel Corp., producers and exporters of subject

merchandise from Japan;12 and (3) JSC Severstal, Novolipetsk Steel (“NLMK”), and Magnitogorsk Iron

& Steel (“MMK”), producers and exporters of subject merchandise from Russia (collectively “Russian

Respondents”). On July 6, 2010, the Commission determined that, for each review, both the domestic

interested party response and the respondent interested party response were adequate. Accordingly, the

Commission determined to conduct full reviews for each order and suspension agreement under review.13

II. DOMESTIC LIKE PRODUCT

A. Legal Standard

In making its determination under section 751(c) of the Act, the Commission defines “the

domestic like product” and the “industry.”14 The 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

 7 Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil: Termination of Suspension

Agreement and Notice of Countervailing Duty Order, 69 Fed. Reg. 56040 (Sept. 17, 2004).

 8

 Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil, Japan, and Russia, Inv. Nos. 701-

TA-384, 731-TA-806-808 (Review), USITC Pub. 3767 (Apr. 2005) (“First Five-Year Review Determinations”). 

Commissioners Okun and Pearson reached negative determinations with respect to all three subject countries.

 9

 70 Fed. Reg. 30413 (May 26, 2005) (Brazil, Japan AD); 70 Fed. Reg. 30417 (May 26, 2005) (Brazil CVD); 70

Fed. Reg. 32571 (June 3, 2005) (Russia).

 10 75 Fed. Reg. 16504 (April 1, 2010).

 11 Gallatin, SSAB, and SDI were represented by common counsel in these reviews and submitted briefs jointly. 

They will be referred to as “Gallatin Group.”

 12 Kobe Steel Ltd., Nisshin Steel Co., and Sumitomo Metal Industries, Ltd., producers and exporters of subject

merchandise from Japan, also participated as parties in these reviews. JFE, Nippon Steel, and these three firms will

collectively be referred to as “Japanese Respondents.”

 13 Explanation of Commission Determination of Adequacy, reprinted in Confidential Report (CR) and Public

Report (PR), App. A. The CR reflects the revisions in INV-JJ-050 (May 11, 2011).

 14 19 U.S.C. § 1677(4)(A).

4
investigation under this subtitle.”15 The Commission’s practice in five-year reviews is to look to the like

product definition from the original determination and any completed reviews and consider whether the

record indicates any reason to revisit the prior findings.16

B. Product Description

Commerce has defined the imported merchandise within the scope of the orders and suspension

agreement under review as follows:

certain hot-rolled flat-rolled carbon-quality steel products of a rectangular shape, of a

width of 0.5 inch or greater, neither clad, plated, nor coated with metal, and whether or

not painted, varnished, or coated with plastics or other non-metallic substances, both in

coils (whether or not in successively superimposed layers) regardless of thickness, and in

straight lengths, of a thickness less than 4.75 mm and a with measuring at least 10 times

the thickness. Universal mill plate (i.e., flat-rolled products rolled on four faces or in a

closed box pass, of a width exceeding 150 mm but not exceeding 1250 mm and of a

thickness not less than 4 mm, not in coils and without patterns in relief) of a thickness not

less than 4.0 mm is not included within the scope of these orders. 

Specifically included in the scope are vacuum degassed, fully stabilized

(commonly referred to as interstitial-free (“IF”)) steels, high strength low alloy (“HSLA”)

steels, and the substrate for motor lamination steels. IF steels are recognized as low

carbon steels with micro-alloying levels of elements such as titanium and/or niobium

added to stabilize carbon and nitrogen elements. HSLA steels are recognized as steels

with micro-alloying levels of elements such as chromium, copper, niobium, titanium,

vanadium, and molybdenum. The substrate for motor lamination steels contain

micro-alloying levels of elements such as silicon and aluminum.

Steel products included in the scope of the orders, regardless of definitions in the

Harmonized Tariff Schedules of the United States (“HTSUS”), are products in which: 

(1) iron predominates, by weight, over each of the other contained elements; (2) the

carbon content is 2 percent or less, by weight, and; (3) none of the elements listed below

exceeds the quantity, by weight, respectively indicated:

1.80 percent of manganese, or

1.50 percent of silicon, or

1.00 percent of copper, or

0.50 percent of aluminum, or

1.25 percent of chromium, or

0.30 percent of cobalt, or

0.40 percent of lead, or

1.25 percent of nickel, or

 15 19 U.S.C. § 1677(10); 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); Timken Co. v. United States, 913 F. Supp. 580, 584 (Ct. Int’l Trade 1996); Torrington Co. v.

United States, 747 F. Supp. 744, 748-49 (Ct. Int’l Trade 1990), aff’d, 938 F.2d 1278 (Fed. Cir. 1991); see also S.

Rep. No. 249, 96th Cong., 1st Sess. 90-91 (1979).

 16 See, e.g., Internal Combustion Industrial Forklift Trucks From Japan, Inv. No. 731-TA-377 (Second Review),

USITC Pub. 3831 at 8-9 (Dec. 2005); Crawfish Tail Meat From China, Inv. No. 731-TA-752 (Review), USITC Pub.

3614 at 4 (July 2003); Steel Concrete Reinforcing Bar From Turkey, Inv. No. 731-TA-745 (Review), USITC Pub.

3577 at 4 (Feb. 2003).

5
0.30 percent of tungsten, or

0.012 percent of boron, or

0.10 percent of molybdenum, or

0.10 percent of niobium, or

0.41 percent of titanium, or

0.15 percent of vanadium, or

0.15 percent of zirconium.

All products that meet the written physical and chemical description provided

above are within the scope unless otherwise excluded. and in which the chemistry

quantities do not exceed any one of the noted element levels listed above, are within the

scope of these investigations unless otherwise excluded.17

Some of the products within the scope definition fall outside the traditional definition of carbon

steel. Such products are referred to as “microalloyed” steel.18

C. Prior Determinations

In both the original final determinations and the first five-year reviews, the Commission defined

the domestic like product to be coextensive with Commerce’s scope definition. It observed that there

were neither arguments nor record evidence supporting any other definition.19 

D. The Current Reviews

The Commission generally considers a number of factors in its domestic like product analysis,

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. 

In these reviews those domestic producers that have addressed the issue assert that the

Commission should again define a single domestic like product coextensive with Commerce’s scope

definition.20 Respondents have not asserted any arguments about the appropriate definition of the

domestic like product. The record in these reviews does not indicate that there have been any changes in

the product characteristics of hot-rolled steel since the original investigations.21

Based on the analysis in the original investigations, the record in these reviews, and the lack of

any contrary argument, we again define a single domestic like product encompassing those hot-rolled

steel products described by the scope definition.

 17 75 Fed. Reg. 47541, 47542 (Aug. 6, 2010). The notice lists 14 types of hot-rolled steel that are outside or

specifically excluded from the scope. Id. at 47542-43. 

 18 CR at I-28, PR at I-23.

 19 Original Japan Determination, USITC Pub. 3202 at 4; First Five-Year Review Determinations, USITC Pub.

3767 at 8-9.

 20 U.S. Steel Prehearing Brief at 10-11; AMUSA Prehearing Brief at 4.

 21 CR at I-30-37, PR at I-25-29.

6
III. DOMESTIC INDUSTRY

A. Legal Standard

Section 771(4)(A) of the Act defines the relevant industry as the domestic “producers as a

[w]hole 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.”22 In defining the domestic

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

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

domestic merchant market, provided that adequate production-related activity is conducted in the United

States.23 These reviews, as did the original investigations and the first five-year reviews, raise issues

concerning whether appropriate circumstances exist to exclude any domestic producers from the domestic

industry pursuant to the related parties provision.

B. Related Parties

Section 771(4)(B) of the Act allows the Commission, if appropriate circumstances exist, to

exclude from the domestic industry producers that are related to an exporter or importer of subject

merchandise or which are themselves importers.24 Exclusion of such a producer is within the

Commission’s discretion based upon the facts presented in each case.25

In the original investigations, the Commission found that two domestic producers were related

parties but that appropriate circumstances did not exist to exclude any producer from the domestic

industry.26 In the first five-year reviews, the Commission determined that three firms (California Steel

Industries (“CSI”), Severstal, and Gallatin) were or may have been related parties by virtue of joint

ownership interests with producers and exporters of subject merchandise, and that two firms were related

parties because they imported subject merchandise. The Commission found that appropriate

circumstances did not exist for the exclusion of any of these producers from the domestic industry.27

 22 19 U.S.C. § 1677(4)(A).

 23 See, e.g., United States Steel Group v. United States, 873 F. Supp. 673, 682-83 (Ct. Int’l Trade 1994), aff’d, 96

F.3d 1352 (Fed. Cir. 1996).

 24 19 U.S.C. § 1677(4)(B).

 25 The primary factors the Commission has examined in deciding whether appropriate circumstances exist to

exclude a related party are as follows:

(1) the percentage of domestic production attributable to the importing producer;

(2) the reason the U.S. producer has decided to import the product subject to investigation, i.e., whether the

firm benefits from the LTFV sales or subsidies or whether the firm must import in order to enable it to continue

production and compete in the U.S. market; and

(3) the position of the related producer vis-à-vis the rest of the industry, i.e., whether inclusion or exclusion

of the related party will skew the data for the rest of the industry.

See, e.g., Torrington Co. v. United States, 790 F. Supp. 1161 (Ct. Int’l Trade 1992), aff’d without opinion, 991 F.2d

809 (Fed. Cir. 1993).

 26 Original Japan Determination, USITC Pub. 3202 at 5-6. 

 27 First Five-Year Review Determinations, USITC Pub. 3767 at 9-11.

7
During the period examined in these reviews, no domestic producer purchased or imported

subject merchandise.28 Several domestic producers, however, share common ownership with importers or

exporters of subject merchandise. AMUSA is *** owned by ArcelorMittal, S.A., a Luxembourg

corporation, which in turns owns (among other firms) ArcelorMittal Brasil, an exporter of subject

merchandise from Brazil.29 Gallatin is *** owned by ArcelorMittal Dofasco, which is in turn owned by

ArcelorMittal S.A., which owns ArcelorMittal Brasil.30 CSI is *** owned by JFE, an exporter of subject

merchandise from Japan.31 Duferco Farrell’s ultimate owner is Steel Invest and Finance, S.A., a

Luxembourg corporation that is 50 percent owned by NLMK, an exporter of subject merchandise from

Russia.32 NLMK Beta is owned by a holding company solely owned by NLMK.33 North Star BlueScope

(“NSBS”) is 50 percent owned by *** Cargill Inc., which during the period of review imported subject

merchandise from ***.34 The production facilities owned by Severstal US Holdings LLC (“Severstal

US”) are *** owned by JSC Severstal, a producer and exporter of subject merchandise from Russia.35

Because the record indicates that NLMK Beta and the Severstal US firms are controlled by

exporters of subject merchandise, these companies are related parties pursuant to section 771(4)(B)(ii)(II)

of the Act.36 Because AMUSA and ArcelorMittal Brasil are each controlled by ArcelorMittal, S.A.,

AMUSA is a related party pursuant to section 771(4)(b)(ii)(III) of the Act.37 The record is not clear

whether JFE’s *** ownership of CSI, NLMK’s effective 50 percent ownership of Duferco Farrell, an

ArcelorMittal subsidiary’s *** ownership of Gallatin, or Cargill’s effective 50 percent ownership of

NSBS is sufficient to constitute “control” of these firms. In the first reviews, when CSI’s ownership was

structured as it is now, the Commission did not resolve the issue. It instead proceeded with an analysis of

whether appropriate circumstances existed to exclude CSI from the domestic industry if it was a related

party.38 We follow the same approach here.39

We conclude that appropriate circumstances do not exist to exclude from the domestic industry

any of the producers affiliated with importers or exporters of subject merchandise. We observe initially

that such affiliations are common in the industry; at least 11 of the 14 U.S. producers that responded to

the Commission questionnaire reported some affiliation with subject or nonsubject producers or exporters

 28 CR at III-20, PR at III-12.

 29 CR at I-41 & n.84, PR at I-32 & n.84; CR/PR, Table I-10; *** Producers’ Questionnaire Response, EDIS Doc.

No. 442291, response to questions I-4-5.

 30 CR at I-41-42 & n.87, PR at I-32 & n.87; CR/PR, Table I-10.

 31 CR/PR, Tables I-10, IV-9.

 32 See http://www.nlmksteel.com/StandardPage____721.aspx (viewed and printed April 13, 2011). On April 21,

2011, NLMK announced its intention to acquire 100 percent of Duferco Farrell; the transaction is anticipated to

close on June 30, 2011. See CR at I-41 n.86, PR at I-32 n.86.

 33 CR at I-42, PR at I-32-33; CR/PR, Table I-10.

 34 CR/PR, Tables I-10, I-11; http://www.northstarbluescope.com/aboutus/about.htm (viewed and printed April 13,

2011).

 35 CR at I-42, PR at I-33; CR/PR, Table I-10; *** Producers’ Questionnaire, EDIS Doc. No. 442280, response to

question I-7.

 36 19 U.S.C. § 1677(4)(b)(ii)(II).

 37 19 U.S.C. § 1677(4)(b)(ii)(III).

 38 See Confidential First Review Determinations, EDIS Doc. No. 230055 at 13-14.

 39 AMUSA, the only party to address the issue of related parties, contends that appropriate circumstances do not

exist to exclude from the domestic industry any of the producers with affiliations to exporters or importers of subject

merchandise. AMUSA Prehearing Brief at 5-7.

8
of hot-rolled steel.40 Indeed, the seven firms that are affiliated with exporters and importers of subject

merchandise collectively accounted for over *** percent of 2010 U.S. production.41

The principal focus of each of the seven firms is U.S. production. None of the seven firms itself

either imported or purchased subject merchandise. Each had appreciable to very substantial U.S.

production; moreover, in every instance the firm’s U.S. production was far greater than the exports or

imports of subject merchandise for which its affiliate was responsible.42 The record contains no

indication that the export or import activities of an affiliate would likely benefit the U.S. producer’s

financial performance, and no party argued for the exclusion of any related party producer. Accordingly,

we define the domestic industry as all U.S. producers of hot-rolled steel.

IV. CUMULATION

A. Original Determinations

In the original investigations, the Commission cumulated subject imports from the three subject

countries.43 It found that subject imports from all three subject countries were fungible with both the

domestic like product and with each other. This finding relied on market participants’ reports that hotrolled steel from the various sources was interchangeable. It also relied on the fact that, although some

quality and product differences limited the Russian product’s suitability for certain end uses, significant

proportions of the subject imports from all three countries and the like product were fairly standardized,

commodity grade products, generally manufactured to industry standards and suitable for a wide range of

applications. Also, there was significant overlap within ASTM grades in the same thicknesses, and

substantial proportions of domestic and subject merchandise were sold without additional processing.44

The Commission found geographic overlap based on sales of the domestic like product and

subject imports from all three subject countries throughout the United States, and the presence of subject

imports from each of the three countries to some degree in each of the four geographic regions during the

period of investigation.45 It also found simultaneous presence in the market.46

Finding the subject imports and domestic like product were generally sold in the same channels

of distribution, the Commission noted that the domestic producers and subject importers sold hot-rolled

steel to distributors, processors, or service centers, manufacturers of tubular products and other end users,

although domestic producers also internally transferred significant amounts to make downstream

products.47 

B. First Five-Year Review Determinations

In the first five-year reviews, the Commission cumulated imports from all three subject countries. 

The Commission first found that subject imports from each of the subject countries would not be likely to

have no discernible adverse impact on the domestic industry upon revocation. For each of the countries,

 40 CR at I-41-42, PR at I-32-33.

 41 CR/PR, Table I-10.

 42 See, CR/PR, Tables I-10, III-4, III-11; *** Foreign Producers’ Questionnaires, response to question II-15; ***

Importers Questionnaire, response to question II-7.

 43 Original Japan Determination, USITC Pub. 3202 at 6-9.

 44 Original Japan Determination, USITC Pub. 3202 at 8-9. 

 45 Original Japan Determination, USITC Pub. 3202 at 7-8 & n.29. 

 46 Original Japan Determination, USITC Pub. 3202 at 7. 

 47 Original Japan Determination, USITC Pub. 3202 at 7 & n.28.

9
the Commission observed that the subject imports were good substitutes for the domestic like product,

that the United States was a relatively attractive export market, and that price played an important role in

purchasing decisions. The Commission further emphasized for each of the subject countries that subject

imports were present in the U.S. market in appreciable quantities, that the subject industry had excess

capacity and was likely to increase capacity, that a substantial share of the industry’s merchant market

sales were exported, and that the producers in the industry had previously demonstrated the ability to shift

volumes between home and export markets.48

The Commission found a likely reasonable overlap of competition among imports from all

subject sources and between these imports and the domestic like product. With respect to fungibility, the

Commission found that majorities of all market participants found the domestic like product and the

subject imports always or frequently interchangeable; majorities of U.S. producers and purchasers also

found imports from the different subject countries interchangeable with each other. Additionally, there

were perceptions that quality of the subject imports from Russia had improved since the original

investigations.49 With respect to geographic overlap, the Commission found that four responding U.S.

producers and six importers that sold merchandise from each subject country reported selling hot-rolled

steel nationwide; there was also substantial overlap between the domestic like product and the subject

imports in specific geographical areas.50 There was overlap with respect to channels of distribution

because significant proportions of both the domestic like product and imports from each subject country

were sold to distributors and service centers.51 Additionally, the domestic like product and imports from

each of the subject countries were present in the U.S. market during each year of the period of review.52

In the first reviews, the Commission found no likely differences in conditions of competition

pertinent to subject imports from Brazil, Japan, and Russia that would warrant declining exercise of

discretion to cumulate the subject imports. The Commission observed that the parties asserted no

arguments in this respect.53

C. Legal Standard

Section 752(a) of the Act provides as follows:

the Commission may cumulatively assess the volume and effect of imports of the subject

merchandise from all countries with respect to which reviews under section 1675(b) or

(c) of this title were initiated on the same day, if such imports would be likely to compete

with each other and with domestic like products in the United States market. The

Commission shall not cumulatively assess the volume and effects of imports of the

subject merchandise in a case in which it determines that such imports are likely to have

no discernible adverse impact on the domestic industry.54

 48 First Five-Year Review Determinations, USITC Pub. 3767 at 15-16 (Brazil), 16-18 (Japan), 18-21 (Russia).

 49 First Five-Year Review Determinations, USITC Pub. 3767 at 22.

 50 First Five-Year Review Determinations, USITC Pub. 3767 at 22-23.

 51 First Five-Year Review Determinations, USITC Pub. 3767 at 23.

 52 First Five-Year Review Determinations, USITC Pub. 3767 at 23.

 53 First Five-Year Review Determinations, USITC Pub. 3767 at 23.

 54 19 U.S.C. § 1675a(a)(7).

10
Cumulation therefore is discretionary in five-year reviews, unlike original investigations which are

governed by section 771(7)(G)(I) of the Act.55 The Commission may exercise its discretion to cumulate,

however, only if the reviews are initiated on the same day, the Commission determines that the subject

imports are likely to compete with each other and the domestic like product in the U.S. market, and

imports from each such subject country are not likely to have no discernible adverse impact on the

domestic industry in the event of revocation. Our focus in five-year reviews is not only on present

conditions of competition, but also on likely conditions of competition in the reasonably foreseeable

future.

The statutory threshold for cumulation is satisfied in these reviews because all five reviews were

initiated on the same day: April 1, 2010.56 We consider the following issues in deciding whether to

exercise our discretion to cumulate the subject imports as follows: (1) whether imports from any of the

three subject countries are precluded from cumulation because they are likely to have no discernible

adverse impact on the domestic industry; (2) whether there is a likelihood of a reasonable overlap of

competition among imports of hot-rolled steel from Brazil, Japan, and Russia, and between subject

imports from each of these sources and the domestic like product; and (3) whether differences in the

likely conditions of competition under which subject imports are likely to compete in the U.S. market for

hot-rolled steel support declining to exercise our discretion to cumulate all subject imports.57 58

Domestic Producers argue that the Commission should cumulate imports from all three subject

countries. Brazilian Respondents argue that the Commission should not cumulate subject imports from

Brazil with any other subject imports because revocation of the orders on subject imports from Brazil

would have no discernible adverse impact upon the domestic industry and because subject imports from

Brazil would likely compete under different conditions of competition than imports from the other subject

countries. Japanese Respondents likewise argue that the Commission should not cumulate subject

imports from Japan with any other subject imports because revocation of the order on subject imports

from Japan would have no discernible adverse impact on the domestic industry and because subject

imports from Japan would likely compete under different conditions of competition than imports from the

 55 19 U.S.C. § 1677(7)(G)(i); see also, e.g., Allegheny Ludlum Corp. v. United States, 475 F. Supp. 2d 1370,

1378 (Ct. Int’l Trade 2006) (recognizing the wide latitude the Commission has in selecting the type of factors it

considers relevant in deciding whether to exercise discretion to cumulate subject imports in five-year reviews);

Nucor Corp. v. United States, 569 F. Supp. 2d 1328, 1337-38 (Ct. Int’l Trade 2008); United States Steel Corp. v.

United States, 572 F. Supp.2d 1334 (Ct. Int’l Trade 2008); Nucor Corp. v. United States, 594 F. Supp. 2d 1302,

1345-47 (Ct. Int’l Trade 2008), aff’d, 601 F.3d 1291 (Fed. Cir. 2010).

 56 See 75 Fed. Reg. 16437 (Apr. 1, 2010).

 57 Chairman Okun and Commissioner Pearson note that while they consider the same issues discussed in this

section in determining whether to exercise their discretion to cumulate the subject imports, their analytical

framework begins with whether imports from the subject countries are likely to face similar conditions of

competition. For those subject imports which are likely to compete under similar conditions of competition, they

next proceed to consider whether there is a likelihood of a reasonable overlap of competition whereby those imports

are likely to compete with each other and with the domestic like product. Finally, if based on that analysis they

intend to exercise their discretion to cumulate one or more subject countries, they analyze whether they are

precluded from cumulating such imports because the imports from one or more subject countries, assessed

individually, are likely to have no discernible adverse impact on the domestic industry. See Steel Concrete

Reinforcing Bar From Belarus, China, Indonesia, Korea, Latvia, Moldova, Poland, and Ukraine, Invs. Nos. 731-TA873 to 875, 877 to 880, and 882 (Review), USITC Pub. 3933 (Jul. 2007) (Separate and Dissenting Views of

Chairman Daniel R. Pearson and Commissioner Deanna Tanner Okun Regarding Cumulation). Accord Nucor Corp.

v. United States, 605 F. Supp. 2d 1361, 1372 (Ct. Int’l Trade 2009); Nucor Corp. v. United States, 594 F. Supp. 2d

1302, 1345-47 (Ct. Int’l Trade 2008), aff’d, 601 F.3d 1291 (Fed. Cir. 2010).

 58 As discussed further below, Commissioners Lane and Pinkert take a different approach in determining how to

exercise their discretion to cumulate or not cumulate subject imports.

11
other subject countries. Russian Respondents argue that the Commission should not cumulate subject

imports from Russia with any other subject imports because these imports would likely compete under

different conditions of competition than subject imports from Brazil or Japan.

D. Likelihood of No Discernible Adverse Impact59

The statute precludes cumulation if the Commission finds that subject imports from a country are

likely to have no discernible adverse impact on the domestic industry.60 Neither the statute nor the

Uruguay Round Agreements Act (“URAA”) Statement of Administrative Action (“SAA”) provides

specific guidance on what factors the Commission is to consider in determining that imports “are likely to

have no discernible adverse impact” on the domestic industry.61 With respect to this provision, the

Commission generally considers the likely volume of subject imports and the likely impact of those

imports on the domestic industry within a reasonably foreseeable time if the orders are revoked.

Based on the record, we do not find that imports from any of the three subject countries are likely

to have no discernible adverse impact on the domestic industry in the event of revocation of the orders or

termination of the suspended investigation. Our analysis for each of the subject countries takes into

account the nature of the product and the behavior of subject imports in the original investigations. 

Brazil. In the original investigations, the volume of subject imports from Brazil increased from

254,166 short tons in 1996 to 436,685 short tons in 1997, and then to 451,462 short tons in 1998. After

the Commission’s affirmative determinations, subject imports from Brazil fell to 49,809 short tons in

1999 and then rose to 158,565 short tons in 2000. Subject imports from Brazil fell to 2,587 short tons in

2001 and have never exceeded 3,000 short tons in any year since. Subject imports from Brazil reached

their peak market penetration of 0.6 percent in 1997 and 1998; since 2001, market penetration of these

imports has never reached 0.05 percent.62

The Commission received responses to its foreign producers’ questionnaire from three companies

believed to account for virtually all 2010 production of hot-rolled steel in Brazil.63 These producers’

exports constituted between 3.8 and 12.1 percent of their annual shipments, and between *** percent of

annual commercial shipments, during the period of review. Reporting Brazilian producers’ annual

capacity utilization rates ranged between 85.3 and 98.5 percent during the period of review, with capacity

utilization during 2010 at 90.7 percent.64 65

 59 Because Chairman Okun and Commissioner Pearson have determined that imports from each of the subject

countries would likely compete under different conditions of competition, they do not reach the issue of likelihood of

no discernible adverse impact and do not join this portion of the opinion.

 60 19 U.S.C. § 1675a(a)(7).

 61 SAA, H.R. Rep. No. 103-316, vol. I at 887 (1994).

 62 CR/PR, Table I-1.

 63 CR at IV-11-12, PR at IV-9-10. 

 64 CR/PR, Table IV-7.

 65 Commissioner Lane and Commissioner Pinkert find new capacity coming online to be particularly relevant to

their finding of likely discernible adverse impact with respect to Brazil. They note that approximately *** of

Usiminas’s new *** metric ton hot strip mill is new capacity that will be ramping up from ***. In addition, new

entrant Gerdau Açominas is expected to bring an 800,000 metric ton facility online beginning in 2012. 

Commissioner Lane notes also that ArcelorMittal Brasil has an additional *** metric tons of hot strip mill

capacity coming online in ***, while Commissioner Pinkert -- because of ArcelorMittal Brasil's stated intentions

regarding the U.S. market -- places little weight on the new ArcelorMittal Brasil capacity except insofar as it is likely

to cause other Brazilian producers to increase their shipments to the U.S. market. CR at IV-13, n.27, PR at IV-11

n.27; CR at IV-14, PR at IV-11; Tr. at 96 (Mull).

12
In light of the existence of some unused capacity in Brazil, as well as the Brazilian industry’s

history of exporting at least a modest amount of its shipments, we cannot conclude that upon revocation

of the orders, subject imports from Brazil would remain at the minimal quantities present during the

2005-10 period of review. Instead, upon revocation, subject imports from Brazil are likely to enter the

United States in at least small quantities. We consequently conclude that, upon revocation, subject

imports from Brazil are not likely to have no discernible adverse impact on the domestic industry.

Japan. In the original investigations, the volume of subject imports from Japan increased from

240,976 short tons in 1996 to 548,822 short tons in 1997, and then spiked to 2.7 million short tons in

1998. After issuance of the antidumping duty order, subject imports from Japan fell to 61,798 short tons

in 1999 and then to 17,109 short tons in 2000. Between 2001 and 2010, subject imports from Japan

ranged from a low of 5,009 short tons in 2005 to a high of 16,086 short tons in 2004; 2010 imports of

15,033 short tons were near the peak reached during the 2005-10 period for which data were collected in

these reviews.66 Subject imports from Japan reached their peak market penetration of 3.6 percent in 1998. 

For every year in the 2005-10 period, subject imports from Japan accounted for less than 0.05 percent of

apparent U.S. consumption.67

Five companies believed to account for a substantial portion of 2010 Japanese production of hotrolled steel responded to the Commission’s foreign producers’ questionnaire.68 These producers’ total

exports constituted between *** percent of their annual shipments, and between *** percent of annual

commercial shipments, during the period of review. Reporting Japanese producers’ annual capacity

utilization rates ranged between 70.0 and 97.8 percent during the period of review, with capacity

utilization during 2010 at 91.3 percent.69

In light of the existence of some unused capacity in Japan, as well as the Japanese industry’s

history of exporting some portion of its shipments, we cannot conclude that upon revocation, subject

imports from Japan would remain at the minimal quantities present during the 2005-10 period of review. 

Instead, subject imports from Japan are likely to enter the United States in at least small quantities. We

consequently conclude that, upon revocation, subject imports from Japan are not likely to have no

discernible adverse impact on the domestic industry.

Russia. In the original investigations, the volume of subject imports from Russia increased from

847,764 short tons in 1996 to 2.0 million short tons in 1997, and then to 3.8 million short tons in 1998,

when market penetration reached a peak of 5.1 percent. After the suspension agreement became

effective, subject imports from Russia fell to 14,612 short tons in 1999 and then fluctuated irregularly the

succeeding five years, ranging from a low of 5,845 short tons in 2001 to a high of 904,101 short tons in

2004. Subject imports from Russia then declined to 299,275 short tons in 2005, increased to 789,288

short tons in 2006, and then declined the next three years, reaching a period low of 1,708 short tons in

2009. In 2010 subject imports from Russia increased to 125,079 short tons, and accounted for 0.2 percent

of apparent U.S. consumption.70

Three companies believed to account for a substantial portion of current Russian production of

hot-rolled steel responded to the Commission’s foreign producers’ questionnaire.71 These producers’

exports constituted between 24.3 and 37.4 percent of their annual shipments, and between 53.0 and 70.5

percent of annual commercial shipments, during the period of review. Reporting Russian producers’

 66 CR/PR, Table I-1. 

 67 CR/PR, Table I-1.

 68 CR at I-21, IV-20, PR at I-18, IV-15. According to an industry monitoring service, the five firms represent ***

percent of Japan’s 2010 hot-strip rolling capacity. CR at IV-20 n.34, PR at IV-15 n.34.

 69 CR/PR, Table IV-11.

 70 CR/PR, Table I-1. 

 71 CR at IV-31, PR at IV-22.

13
annual capacity utilization rates ranged between 80.6 and 92.6 percent during the period of review, with

capacity utilization during 2010 at 87.2 percent.72

Subject imports from Russia have been present in the U.S. market throughout the period of

review, at times in appreciable quantities, notwithstanding the suspension agreement. Moreover, the

Russian industry has unused capacity and a strong export orientation. In light of these considerations, we

conclude that subject imports from Russia are not likely to have no discernible adverse impact upon

termination of the suspended investigation.

E. Likelihood of a Reasonable Overlap of Competition73

The Commission generally has considered four factors intended to provide a framework for

determining whether the imports compete with each other and with the domestic like product.74 Only a

“reasonable overlap” of competition is required.75 In five-year reviews, the relevant inquiry is whether

there likely would be competition even if none currently exists because the subject imports are absent

from the U.S. market.76

Fungibility.

77 In these reviews, large majorities of U.S. producers reported that products were

“always” interchangeable for all domestic like product-subject country and subject country-subject

country comparisons. Majorities or pluralities of purchasers reported that products were “always”

interchangeable in every comparison. Majorities of U.S. importers found products “always” or

“frequently” interchangeable in all comparisons.78

Geographic Overlap. During the period of review, U.S. producers and importers of subject

merchandise from Russia sold hot-rolled steel in all U.S. regions, importers of subject merchandise from

 72 CR/PR, Table IV-15.

 73 Because Chairman Okun and Commissioner Pearson have determined that imports from each of the subject

countries would likely compete under different conditions of competition, they do not reach the issue of likelihood of

reasonable overlap of competition and do not join this portion of the opinion.

 74 The four factors generally considered by the Commission in assessing whether imports compete with each

other and with the domestic like product are as follows: (1) the degree of fungibility between the imports from

different countries and between imports and the domestic like product, including consideration of specific customer

requirements and other quality related questions; (2) the presence of sales or offers to sell in the same geographical

markets of imports from different countries and the domestic like product; (3) the existence of common or similar

channels of distribution for imports from different countries and the domestic like product; and (4) whether the

imports are simultaneously present in the market. See, e.g., Wieland Werke, AG v. United States, 718 F. Supp. 50

(Ct. Int’l Trade 1989).

 75 See Mukand Ltd. v. United States, 937 F. Supp. 910, 916 (Ct. Int’l Trade 1996); Wieland Werke, 718 F. Supp.

at 52 (“Completely overlapping markets are not required.”); United States Steel Group v. United States, 873 F. Supp. 

673, 685 (Ct. Int’l Trade 1994), aff’d, 96 F.3d 1352 (Fed. Cir. 1996). We note, however, that there have been

investigations where the Commission has found an insufficient overlap in competition and has declined to cumulate

subject imports. See, e.g., Live Cattle From Canada and Mexico, Inv. Nos. 701-TA-386 and 731-TA-812 to 813

(Prelim.), USITC Pub. 3155 at 15 (Feb. 1999), aff’d sub nom, Ranchers-Cattlemen Action Legal Foundation v.

United States, 74 F. Supp. 2d 1353 (Ct. Int’l Trade 1999); Static Random Access Memory Semiconductors from the

Republic of Korea and Taiwan, Inv. Nos. 731-TA-761 to 762 (Final), USITC Pub. 3098 at 13-15 (Apr. 1998).

 76 See generally Chefline Corp. v. United States, 219 F. Supp. 2d 1313, 1314 (Ct. Int’l Trade 2002).

 77 Commissioner Lane notes that, with respect to fungibility, her analysis does not require such similarity of

products that a perfectly symmetrical fungibility is required and that this factor would be better described as an

analysis of whether subject imports from each country and the domestic like product could be substituted for each

other. See Separate Views of Commissioner Charlotte R. Lane, Certain Lightweight Thermal Paper from China,

Germany, and Korea, Inv. Nos. 701-TA-451 and 731-TA-1126-1128 (Preliminary), USITC Pub. 3964 (Nov. 2007).

 78 CR/PR, Table II-8.

14
Japan sold hot-rolled steel in all U.S. regions except the Rocky Mountains, while importers of subject

merchandise from Brazil sold hot-rolled steel in three regions: the Northeast, Midwest, and Central

Southwest.79 Consequently, during the period of review the domestic like product and imports from all

subject sources were sold in the Northeast, Midwest, and Central Southwest.

Channels of Distribution. Throughout the period of review, a majority of the domestic industry’s

commercial shipments and a predominant percentage of the commercial shipments from each subject

country were sold to distributors and service centers.80

Simultaneous Presence in Market. In these reviews, the domestic like product and imports from

each of the subject countries except Brazil were present throughout the period of review.81 Small

amounts of subject imports from Brazil were shipped in each year from 2006 to 2010.82

Conclusion. The record in these reviews indicates that market participants generally perceive the

domestic like product and the subject imports as interchangeable. Additionally, there are overlaps in

channels of distribution, as commercial shipments of both the domestic like product and imports from

each subject country are predominantly to distributors and service centers, and geographic concentration,

as the domestic like product and imports from each subject country are present in multiple regional

markets. Although the volume of subject imports from Brazil was extremely low during the period of

review, the domestic like product and imports from all three subject countries were simultaneously

present in the U.S. market during five of the six years of the period of review. Additionally, the focus is

on likely competition in the event of revocation. As we found in the discussion of no discernible adverse

impact, upon revocation subject imports from Brazil would likely return to the U.S. market in at least

small quantities, indicating a likelihood of simultaneous presence.

In light of these considerations, and the lack of any contrary argument, we find that there is a

likely reasonable overlap of competition between the domestic like product and imports from each subject

country and between imports from each subject country.

 79 CR/PR, Table II-2.

 80 CR/PR, Table II-1.

 81 CR/PR, Table IV-1. There were subject imports from Japan during every month of the period of review. There

were subject imports from Russia during at least nine months of every year of the period of review except 2009,

when entries occurred in only one month. CR/PR, Table IV-4.

 82 CR/PR, Tables IV-1, IV-4. See also CR at IV-10-11, PR at IV-9.

15
F. Other Likely Conditions of Competition83

In determining whether to exercise our discretion to cumulate the subject imports, we assess

whether the subject imports from Brazil, Japan, and Russia are likely to compete under similar or

different conditions in the U.S. market in the event of revocation.84 We observe that in these reviews,

unlike the first five-year reviews, respondents offered several arguments concerning potential likely

differences in conditions of competition. As explained below, we find that imports from the different

countries are likely to compete in the U.S. market under different conditions of competition if the orders

are revoked or suspended investigation terminated.

Brazil. Subject imports from Brazil are likely to compete under different conditions of

competition than subject imports from Japan or Russia. The Brazilian industry is distinguishable from the

Japanese and Russian industries because it is significantly less export oriented. Brazilian producers’

shipments of hot-rolled steel during the period of review were primarily to the home market. The

proportion of total shipments that were either internal consumption or commercial home market

shipments increased from 87.9 percent in 2005 to 92.7 percent in 2010. During the period of review, the

 83 Commissioners Lane and Pinkert do not join this section of the opinion. Instead, they explain their analysis of

other considerations as follows. Where, in a five-year review, they do not find that the subject imports would be

likely to have no discernible adverse impact on the domestic industry if the orders were revoked, and find that such

imports would be likely to compete with each other and with the domestic like product in the U.S. market, they

cumulate them unless there is a condition or propensity – not merely a trend – that is likely to persist for a reasonably

foreseeable time and that significantly limits competition such that cumulation is not warranted. Based on the record

in these reviews, they find that there is no such condition or propensity with respect to the subject imports.

Hot-rolled steel is commonly produced to ASTM specifications, and the majority of market participants

found imports from each subject source to be at least “frequently” interchangeable with each other and with the

domestic like product. CR/PR, Table II-8. Most U.S. producers reported that differences other than price were

never important in selling hot-rolled steel. Most importers and purchasers reported that there were “sometimes” or

“never” differences other than price that were important. CR/PR, Table II-9. Commissioners Lane and Pinkert thus

consider hot-rolled steel produced in the subject countries and in the United States to be highly interchangeable. 

All three subject producers have significant capacity and export a significant percentage of their annual

commercial shipments. Japanese producers are not prevented from shifting sales from Asian markets to the United

States by their memoranda of understanding with downstream processors in Asia because the memoranda are ***.

CR at IV-26 n. 45, PR at IV-18 n.45. Further, Japanese producers have a price incentive to sell in the U.S. market

rather than to Asian customers. MEPS data show that transaction prices for hot-rolled steel imports in China from

2009 to 2011 were significantly lower than U.S. prices, and *** country and region-specific pricing data show that

prices for hot-rolled steel imports to the Far East from 2009 to 2011 were generally lower than U.S. prices. CR/PR,

Tables IV-24-25. Brazil, whose export orientation is more modest than that of Japan, has substantial new capacity

coming on line that will very likely exceed growth in the Brazilian market. Thus, Brazilian production capacity is

projected to increase by *** percent in 2012, while Brazilian consumption, which is projected to decline in 2011, is

projected to increase by only *** percent in 2012. CR/PR, Tables IV-22-23. Much of the resultant excess capacity

will likely come to the U.S. market as a consequence of the attractiveness of U.S. prices relative to those of other

Brazilian export markets. *** Foreign Producers’ Questionnaire Responses. 

Accordingly, Commissioners Lane and Pinkert do not find any condition or propensity sufficient to restrain

subject imports from Japan or Brazil (or, for that matter, Russia) from competing with each other and the domestic

like product in the U.S. market. Indeed, they find that, if the orders were revoked and the suspended investigation

terminated, there would be significant incentives for producers in all of the subject countries to increase substantially

their shipments to the U.S. market.

 84 See, e.g., Nucor Corp. v. United States, 601 F.3d 1291, 1296-97 (Fed. Cir. 2010) (Commission may reasonably

consider likely differing conditions of competition in deciding whether to cumulate subject imports in five-year

reviews); Allegheny Ludlum Corp., 475 F. Supp. 2d at 1378 (recognizing the wide latitude the Commission has in

selecting the type of factors it considers relevant in deciding whether to exercise discretion to cumulate subject

imports in five-year reviews); Nucor Corp., 569 F. Supp. 2d at 1337-38.

16
export shipments of all Brazilian producers constituted only between 3.8 and 12.1 percent of their annual

shipments.85 This figure includes data for ArcelorMittal Brasil. Daniel Mull, the executive vice president

of AMUSA who has authority to determine whether any exports from ArcelorMittal affiliates will enter

the United States market, testified at the Commission hearing that he would not approve such exports

from Brazil.86 The two current Brazilian producers whose corporate policies would not preclude them

from exporting hot-rolled steel to the United States have an even lower export orientation. The ratio of

export shipments to total shipments of Brazilian producers CSN and Usiminas was only *** percent in

2009 and *** percent in 2010.87 By contrast, during the period of review, Japanese producers’ export

shipments constituted between *** percent of their annual shipments, and Russian producers’ export

shipments constituted between 24.3 and 37.4 percent of their annual shipments.88

Furthermore, subject imports from Brazil historically have had a much smaller and more stable

presence in the U.S. market than imports from the other two subject countries. Going back to 1996, and

encompassing the original period of investigation, subject imports from Brazil have never had more than

an 0.6 percent share of the quantity of apparent U.S. consumption. By contrast, during the same period

subject imports from Japan have had market penetration as high as 3.6 percent and subject imports from

Russia have had market penetration as high as 5.1 percent. In addition, subject imports from Brazil have

not been characterized by the large fluctuations in presence in the U.S. market displayed by subject

imports from Japan and Russia. The largest annual increase in market penetration by subject imports

from Brazil occurred from 1996 to 1997, during the original period of investigation, and was only 0.2

percentage points. In contrast, market penetration of subject imports from Japan and Russia increased by

2.8 and 2.3 percentage points respectively from 1997 to 1998, but remained flat for subject imports from

Brazil. Additionally, subject imports from Russia had two annual market penetration increases of over

0.5 percentage points even after the suspension agreement became effective.89

Japan. Subject imports from Japan would likely compete under different conditions of

competition than subject imports from Brazil or Russia. One reason for this difference stems from

Japan’s heavy focus on Asian export markets. During the period of review, the percentage of Japanese

exports shipped to Asian markets ranged between *** percent on an annual basis. Accounting for the

Japanese industry’s internal transfers and home-market commercial shipments makes the Japanese

 85 CR/PR, Table IV-7.

 86 Tr. at 96 (Mull). We find Nucor’s challenges to the veracity of Mr. Mull’s testimony, see Nucor Posthearing

Brief at 10, ex. 1 at 44-45, baseless. As we explained in rejecting essentially identical Nucor arguments in prior

reviews involving hot-rolled steel products, ArcelorMittal’s policy of permitting AMUSA executives to veto

potential hot-rolled steel imports from other ArcelorMittal affiliates – the policy Mr. Mull unequivocally testified he

would invoke concerning potential imports from ArcelorMittal Brasil – is both economically rational and credible. 

Hot-Rolled Steel Products from Kazakhstan, Romania, and South Africa, Inv. Nos. 701-TA-407, 731-TA-902, 904,

905 (Review) (Remand), USITC Pub. 4088 at 5-9 (July 2009), aff’d sub nom. Nucor Corp v. United States, 675 F.

Supp.2d 1340 (Ct. Int’l Trade 2010).

 87 See CSN, Usiminas Foreign Producers’ Questionnaires. We decline to “exclude” ArcelorMittal Brasil from the

Brazilian industry, as Brazilian Respondents have suggested, on the grounds that hot-rolled steel from ArcelorMittal

Brasil is merchandise currently subject to the orders. Notwithstanding this, the statute directs that the Commission

“shall consider all relevant economic factors” in analyzing likely subject import volume and impact. 19 U.S.C. §

1675a(a)(2), (a)(4). Mr. Mull’s testimony that he will exercise his authority to veto any hot-rolled steel imports from

ArcelorMittal Brasil is among the “relevant economic factors” we consider in evaluating likely conditions of

competition, and in ascertaining whether any excess capacity, or likely capacity increases, for the entire Brazilian

industry are likely to result in increased subject imports should the orders under review be revoked. Consequently,

we have separately examined data pertaining to CSN and Usiminas, the two firms that would not be precluded by

corporate policy from exporting subject merchandise to the United States, when appropriate.

 88 CR/PR, Tables IV-11, IV-15.

 89 CR/PR, Table I-1.

17
industry’s focus on home and regional markets even more overwhelming; during the period of review

between *** percent of the Japanese industry’s total shipments were directed either to Japan or other

Asian markets.90 By contrast, neither of the other subject industries has such a predominant regional

focus. During the period of review, the Brazilian industry directed appreciable percentages of its export

shipments to a variety of different regions, including the European Union (EU), Asia, and other markets.91

Similarly, the Russian industry directed an appreciable percentage of its export shipments to markets in

the EU, Asia, and other markets outside these regions and the United States.92 Additionally, while Japan

consistently directed the vast majority of its exports to Asia during the period of review, neither the

Brazilian nor Russian industries showed similar stability in export patterns.93

Subject imports from Japan also have displayed different pricing patterns than imports from the

other two subject countries. The original period of investigation was characterized by the subject imports

from Japan predominantly overselling the domestic like product. Similarly, in neither the first reviews

nor the current reviews – in which Japanese price observations were limited – was there predominant

underselling by subject imports from Japan. By contrast, subject imports from Brazil and Russia each

predominantly undersold the domestic like product during the original period of investigation, and subject

imports from Russia also predominantly undersold the domestic like product during the period examined

in the first reviews.94

Conclusion. Because we have determined that subject imports from Brazil would likely compete

under different conditions of competition than subject imports from Japan or Russia, we do not cumulate

subject imports from Brazil with subject imports from Japan or Russia. Because we have determined that

subject imports from Japan would likely compete under different conditions of competition than subject

imports from Brazil or Russia, we do not cumulate subject imports from Japan with subject imports from

Brazil or Russia. Accordingly, we also do not cumulate subject imports from Russia with subject imports

from Brazil or Japan.

V. WHETHER REVOCATION OF THE ANTIDUMPING DUTY AND COUNTERVAILING

DUTY ORDERS AND TERMINATION OF THE SUSPENDED INVESTIGATION ARE

LIKELY TO LEAD TO CONTINUATION OR RECURRENCE OF MATERIAL INJURY

WITHIN A REASONABLY FORESEEABLE TIME

A. Legal Standards

In a five-year review conducted under section 751(c) of the Act, Commerce will revoke an

antidumping or countervailing duty order unless (1) it makes a determination that dumping or

subsidization is likely to continue or recur and (2) the Commission makes a determination that revocation

of the antidumping or countervailing duty order “would be likely to lead to continuation or recurrence of

 90 CR/PR, Table IV-11. Japanese Respondents indicated that their focus on Asia was due in part to the fact that

Asia has been the region of the world in which consumption has grown the most. See Japanese Respondents

Prehearing Brief at 5-6. *** data indicate that between 2005 and 2010, consumption of hot-rolled steel in East and

Southeast Asia grew by ***, while consumption in all other regions combined declined. CR/PR, Table IV-22.

 91 This is true for both the industry as a whole and for the two Brazilian producers likely to engage in exports to

the United States. CR/PR, Table IV-7; CSN, Usiminas Foreign Producers’ Questionnaires.

 92 CR/PR, Table IV-15.

 93 For Brazil, *** was the largest export market in 2009 and 2010, but not in preceding years. CR/PR, Table IV7. Russian exports to various regional markets fluctuated irregularly during the period of review. CR/PR, Table IV15.

 94 See Original Japan Determination, USITC Pub. 3202 at V-15; First Five-Year Review Determinations, USITC

Pub. 3767, Table V-7.

18
material injury within a reasonably foreseeable time.”95 The SAA states that “under the likelihood

standard, the Commission will engage in a counterfactual analysis; it must decide the likely impact in the

reasonably foreseeable future of an important change in the status quo – the revocation or termination of a

proceeding and the elimination of its restraining effects on volumes and prices of imports.”96 Thus, the

likelihood standard is prospective in nature.97 The U.S. Court of International Trade has found that

“likely,” as used in the five-year review provisions of the Act, means “probable,” and the Commission

applies that standard in five-year reviews.98 99 100

The statute states that “the Commission shall consider that the effects of revocation or termination

may not be imminent, but may manifest themselves only over a longer period of time.”101 According to

the SAA, a “‘reasonably foreseeable time’ will vary from case-to-case, but normally will exceed the

‘imminent’ timeframe applicable in a threat of injury analysis in original investigations.”102

Although the standard in a five-year review is not the same as the standard applied in an original

antidumping duty investigation, it contains some of the same fundamental elements. The statute provides

that the Commission is to “consider the likely volume, price effect, and impact of imports of the subject

merchandise on the industry if the orders are revoked or the suspended investigation is terminated.”103 It

directs the Commission to take into account its prior injury determination, whether any improvement in

 95 19 U.S.C. § 1675a(a).

 96 SAA at 883-84. The SAA states that “{t}he likelihood of injury standard applies regardless of the nature of the

Commission’s original determination (material injury, threat of material injury, or material retardation of an

industry). Likewise, the standard applies to suspended investigations that were never completed.” Id. at 883.

 97 While the SAA states that “a separate determination regarding current material injury is not necessary,” it

indicates that “the Commission may consider relevant factors such as current and likely continued depressed

shipment levels and current and likely continued {sic} prices for the domestic like product in the U.S. market in

making its determination of the likelihood of continuation or recurrence of material injury if the order is revoked.” 

SAA at 884.

 98 See NMB Singapore Ltd. v. United States, 288 F. Supp. 2d 1306, 1352 (Ct. Int’l Trade 2003) (“‘likely’ means

probable within the context of 19 U.S.C. § 1675(c) and 19 U.S.C. § 1675a(a)”), aff’d mem., 140 Fed. Appx. 268

(Fed. Cir. 2005); Nippon Steel Corp. v. United States, 26 CIT 1416, 1419 (2002) (same); Usinor Industeel, S.A. v.

United States, 26 CIT 1402, 1404 nn.3, 6 (2002) (“more likely than not” standard is “consistent with the court’s

opinion;” “the court has not interpreted ‘likely’ to imply any particular degree of ‘certainty’”); Indorama Chemicals

(Thailand) Ltd. v. United States, Slip Op. 02-105 at 20 (Ct. Int’l Trade Sept. 4, 2002) (“standard is based on a

likelihood of continuation or recurrence of injury, not a certainty”); Usinor v. United States, 26 CIT 767, 794 (2002)

(“‘likely’ is tantamount to ‘probable,’ not merely ‘possible’”).

 99 For a complete statement of Chairman Okun’s interpretation of the likely standard, see Additional Views of

Vice Chairman Deanna Tanner Okun Concerning the “Likely” Standard in Certain Seamless Carbon and Alloy Steel

Standard, Line and Pressure Pipe From Argentina, Brazil, Germany, and Italy, Invs. Nos. 701-TA-362 (Review) and

731-TA-707 to 710 (Review)(Remand), USITC Pub. 3754 (Feb. 2005).

 100 Commissioner Lane notes that, consistent with her views in Pressure Sensitive Plastic Tape From Italy, Inv.

No. AA1921-167 (Second Review), USITC Pub. 3698 (June 2004), she does not concur with the U.S. Court of

International Trade’s interpretation of “likely,” but she will apply the Court’s standard in these reviews and all

subsequent reviews until either Congress clarifies the meaning or the U.S. Court of Appeals for the Federal Circuit

addresses this issue.

 101 19 U.S.C. § 1675a(a)(5).

 102 SAA at 887. Among the factors that the Commission should consider in this regard are “the fungibility or

differentiation within the product in question, the level of substitutability between the imported and domestic

products, the channels of distribution used, the methods of contracting (such as spot sales or long-term contracts),

and lead times for delivery of goods, as well as other factors that may only manifest themselves in the longer term,

such as planned investment and the shifting of production facilities.” Id.

 103 19 U.S.C. § 1675a(a)(1).

19
the state of the industry is related to the order or the suspension agreement under review, whether the

industry is vulnerable to material injury if the orders are revoked or the suspension agreement is

terminated, and any findings by Commerce regarding duty absorption pursuant to 19 U.S.C.§

1675(a)(4).104 The statute further provides that the presence or absence of any factor that the Commission

is required to consider shall not necessarily give decisive guidance with respect to the Commission’s

determination.105

In evaluating the likely volume of imports of subject merchandise if the orders under review are

revoked and/or the suspended investigation is terminated, the Commission is directed to consider whether

the likely volume of imports would be significant either in absolute terms or relative to production or

consumption in the United States.106 In doing so, the Commission must consider “all relevant economic

factors,” including four enumerated factors: (1) any likely increase in production capacity or existing

unused production capacity in the exporting country; (2) existing inventories of the subject merchandise,

or likely increases in inventories; (3) the existence of barriers to the importation of the subject

merchandise into countries other than the United States; and (4) the potential for product shifting if

production facilities in the foreign country, which can be used to produce the subject merchandise, are

currently being used to produce other products.107

In evaluating the likely price effects of subject imports if the orders under review are revoked

and/or the suspended investigation is terminated, the Commission is directed to consider whether there is

likely to be significant underselling by the subject imports as compared to the domestic like product and

whether the subject imports are likely to enter the United States at prices that otherwise would have a

significant depressing or suppressing effect on the price of the domestic like product.108

In evaluating the likely impact of imports of subject merchandise if the orders under review are

revoked ad/or the suspended investigation is terminated, the Commission is directed to consider all

relevant economic factors that are likely to have a bearing on the state of the industry in the United States,

including but not limited to the following: (1) likely declines in output, sales, market share, profits,

productivity, return on investments, and utilization of capacity; (2) likely negative effects on cash flow,

inventories, employment, wages, growth, ability to raise capital, and investment; and (3) likely negative

effects on the existing development and production efforts of the industry, including efforts to develop a

derivative or more advanced version of the domestic like product.109 All relevant economic factors are to

be considered within the context of the business cycle and the conditions of competition that are

distinctive to the industry. As instructed by the statute, we have considered the extent to which any

improvement in the state of the domestic industry is related to the orders and agreement under review and

whether the industry is vulnerable to material injury upon revocation or termination.110

 104 19 U.S.C. § 1675a(a)(1). Commerce has not issued any duty absorption findings with respect to hot-rolled

steel from Brazil, Japan, or Russia. See CR at I-22 n.41; PR at I-18 n.41.

 105 19 U.S.C. § 1675a(a)(5). Although the Commission must consider all factors, no one factor is necessarily

dispositive. SAA at 886.

 106 19 U.S.C. § 1675a(a)(2).

 107 19 U.S.C. § 1675a(a)(2)(A-D).

 108 See 19 U.S.C. § 1675a(a)(3). The SAA states that “{c}onsistent with its practice in investigations, in

considering the likely price effects of imports in the event of revocation and termination, the Commission may rely

on circumstantial, as well as direct, evidence of the adverse effects of unfairly traded imports on domestic prices.” 

SAA at 886.

 109 19 U.S.C. § 1675a(a)(4).

 110 The SAA states that in assessing whether the domestic industry is vulnerable to injury if the order is revoked,

the Commission “considers, in addition to imports, other factors that may be contributing to overall injury. While

these factors, in some cases, may account for the injury to the domestic industry, they may also demonstrate that an

(continued...)

20
In these reviews, the Commission received questionnaire responses from 14 domestic producers

of hot-rolled steel who are believed to constitute all or virtually all 2010 domestic production. It received

questionnaire responses from 38 importers of hot-rolled steel, which are believed to have accounted for

82.8 percent of U.S. imports from all subject sources and 31.0 percent of imports from other sources in

2010.111 Foreign producers’ questionnaire responses were received from three Brazilian producers,

accounting for virtually all of that country’s 2010 production of hot-rolled steel, five Japanese producers

accounting for a substantial portion of that country’s 2010 production of hot-rolled steel, and three

Russian producers accounting for a substantial proportion of that country’s 2010 production of hot-rolled

steel.112 When appropriate in these reviews, we have relied on the facts otherwise available, which consist

of information from the original investigations and first reviews, as well as information submitted in these

reviews, including information the parties provided in their briefs and hearing testimony, questionnaire

responses, and information available from published sources.113 114 

B. Findings in the Prior Proceedings

1. The Original Investigations

Conditions of Competition. In the original investigations, the Commission identified several

pertinent conditions of competition. The Commission first found that the terms of the statute’s captive

production provision (19 U.S.C. 1677(7)(C)(iv)) were met and, therefore, it focused analysis primarily on

the merchant market when assessing market share and the factors affecting the financial performance of

the domestic industry.115 The Commission also found that apparent U.S. consumption of hot-rolled steel

 110 (...continued)

industry is facing difficulties from a variety of sources and is vulnerable to dumped or subsidized imports.” SAA at

885.

 111 CR at I-21, PR at I-17-18. Staff additionally compiled data concerning one U.S. producer that ceased

operations in 2007. CR at I-21 n. 39, PR at I-18 n.39.

 112 CR at IV-11, IV-20, IV-31, PR at IV-9-10; IV-15, IV-22.

 113 19 U.S.C. § 1677e(a) authorizes the Commission to “use the facts otherwise available” in reaching a

determination when (1) necessary information is not available on the record or (2) an interested party or any other

person withholds information requested by the agency, fails to provide such information in the time or in the form or

manner requested, significantly impedes a proceeding, or provides information that cannot be verified pursuant to 19

U.S.C. § 1677m(i). The verification requirements in 19 U.S.C. § 1677m(i) are applicable only to Commerce. See

Titanium Metals Corp. v. United States, 155 F. Supp. 2d 750, 765 (Ct. Int’l Trade 2002) (“the ITC correctly

responds that Congress has not required the Commission to conduct verification procedures for the evidence before

it, or provided a minimum standard by which to measure the thoroughness of Commission investigations.”).

 114 Chairman Okun notes that the statute authorizes the Commission to take adverse inferences in five-year

reviews, but such authorization does not relieve the Commission of its obligation to consider the record evidence as

a whole in making its determination. See 19 U.S.C. § 1677e. She generally gives credence to the facts supplied by

the participating parties and certified by them as true, but bases her decision on the evidence as a whole, and does

not automatically accept participating parties’ suggested interpretations of the record evidence. Regardless of the

level of participation, the Commission is obligated to consider all evidence relating to each of the statutory factors

and may not draw adverse inferences that render such analysis superfluous. “In general, the Commission makes

determinations by weighing all of the available evidence regarding a multiplicity of factors relating to the domestic

industry as a whole and by drawing reasonable inferences from the evidence it finds most persuasive.” SAA at 869.

 115 Original Japan Determination, USITC Pub. 3202 at 9-10. Three of the six commissioners (Bragg, Crawford,

and Askey), while also making affirmative determinations with a focus on the industry as a whole, concluded that

the captive production provision did not apply. Id. at 25-29. 

21
was strong during the period examined in both the total market and the merchant market, and that subject

imports increased during the period examined, while nonsubject imports remained relatively stable.116

The Commission observed that, although there were some quality differences with respect to the

Russian merchandise when compared to the domestic like product and subject imports from Brazil and

Japan, the domestic like product and subject imports were broadly interchangeable, and purchasers had

identified price (along with product quality, consistency, and availability) as among the most important

factors in making purchasing decisions.117

The Commission also noted that the domestic industry consisted of both integrated producers and

minimill producers. The integrated producers generally used a basic oxygen furnace method of

production, which uses molten steel as the primary input material, and generally also owned facilities for

production of downstream articles made from the hot-rolled steel and, thus, captively consumed a

significant portion of their hot-rolled steel production. On the other hand, the minimills, which were

generally the more recent entrants in the industry, used electric arc furnaces, which use scrap steel as the

primary input material. The minimills were generally more sensitive to merchant market competition

because their captive, downstream operations generally were not as substantial as those of the integrated

producers, and they generally maintained a lower proportion of long-term contracts and, thus, sold more

of their production in the spot market.118

Finally, the Commission noted that there had been a strike at General Motors (“GM”) for five

weeks in June and July of 1998, which resulted in a reduction in purchases of subject and nonsubject steel

products by GM and its suppliers.119

Subject Import Volume. The quantity of cumulated subject imports increased over the

investigation period, more than doubling from 1996 to 1997 and more than doubling again from 1997 to

1998, for a volume of 7.0 million short tons in 1998. Subject import merchant market share increased

from 5.0 percent in 1996 to 21.0 percent in 1998. During the same period, the share of U.S. consumption

held by nonsubject imports was essentially flat, while the domestic industry’s market share declined in

the merchant market from 80.4 percent in 1996 to 65.6 percent in 1998, and in the total market from 92.3

percent in 1996 to 84.8 percent in 1998. The Commission found that both the volume and increase in the

volume of subject imports were significant.120

Price Effects. The Commission found that price was an important factor in purchasing decisions

and that the subject imports were broadly substitutable, notwithstanding some quality differences with

respect to Russian hot-rolled steel. The Commission observed that the most precipitous declines in the

price of the domestic like product and subject imports occurred in the third and fourth quarters of 1998,

when the subject imports were peaking. The Commission found a mixed pattern of underselling over the

period, with overselling predominating in 1996, but underselling predominating in 1997 (underselling in

48 of 64 instances) and 1998 (45 of 67 instances). The Commission noted that there were fewer instance

of underselling by the Japanese merchandise early in the period, but in 1998, when Japanese producers

shifted to more commodity-type products, underselling by the Japanese merchandise increased. The

Commission observed that the impact on minimills confirmed that the end of period declines in domestic

prices resulted from causes other than competition within the domestic industry, and rejected respondents’

contentions that domestic price declines were caused by the GM strike. The Commission also found that

 116 Original Japan Determination, USITC Pub. 3202 at 10.

 117 Original Japan Determination, USITC Pub. 3202 at 10-11.

 118 Original Japan Determination, USITC Pub. 3202 at 11.

 119 Original Japan Determination, USITC Pub. 3202 at 11.

 120 Original Japan Determination, USITC Pub. 3202 at 12-13.

22
prices declined at a greater rate than cost of goods sold, and concluded that the subject imports had

significant price-depressing effects on domestic prices.121

Impact. The Commission found that the cumulated subject imports gained market share at the

expense of the domestic industry, at a time when the domestic industry was adding capacity

commensurate with increased apparent consumption. Domestic producers’ production and shipments

declined from 1997 to 1998, and operating income declined by more than half in that time frame. The

steep decline in the ratio of operating income to net sales was largely due to declines in the industry’s

shipments and sales in 1998. Moreover, a comparison of data for the first and second halves of 1998

indicated worsening performance in the second half, when the cumulated subject imports reached their

highest levels in the period. Thus, the Commission found that the industry’s performance was

substantially poorer than would be expected given record demand in 1998. While recognizing that other

factors, especially increased intra-industry competition, contributed to the industry’s poorer performance

in 1998, the Commission concluded that the substantially increased volume of subject imports at

declining prices had materially contributed to the industry’s deteriorating performance, as reflected in

nearly all economic indicators, and it concluded that the industry was materially injured by reason of the

subject imports.122

2. The First Five-Year Reviews123

Conditions of Competition. In the first reviews, the Commission found that the domestic industry

continued to consist of both integrated producers and minimills. There had been several changes in the

composition of the industry due to bankruptcies, consolidations, and reorganizations. The Pension

Benefit Guaranty Corp. had assumed pension obligations of several of the bankrupt firms, improving the

cost structures of the surviving entities. Industry consolidation reduced the number of domestic producers

from 24 in 1998 to 18 in 2004.124 Notwithstanding improvements in the industry’s cost structure, its

performance continued to be poor from 1998 to 2003. Its performance improved considerably in 2004

due to favorable market conditions, notwithstanding increases in raw materials costs.125

The Commission found that demand for hot-rolled steel in the United States depended on demand

in certain downstream industries, such as automotive, construction, and those using further processed

products, all of which were tied to some extent to overall economic activity.126 

The Commission next discussed developments in the world market for steel. It found that both

worldwide production and consumption of hot-rolled steel increased substantially during the period of

review. China accounted for a significant proportion of the growth in steel demand, and during the period

of review was a net importer of hot-rolled steel until the fourth quarter of 2004, when it became a net

exporter. Continued increases in Chinese hot-rolled steel production capacity were likely. As a result,

some exports that previously had been directed to China would be free to go to other markets.127 

Capacity to produce subject merchandise had increased in all three subject countries. 

Consumption had grown in Brazil and Russia, and was expected to increase. Consumption in the

 121 Original Japan Determination, USITC Pub. 3202 at 14-16.

 122 Original Japan Determination, USITC Pub. 3202 at 16-21.

 123 Chairman Okun and Commissioner Pearson dissented in the first reviews and did not join the majority's

analysis of conditions of competition. First Five-Year Review Determinations, USITC Pub. 3767 at 51-57 (Separate

and Dissenting Views of Vice Chairman Deanna Tanner Okun and Commissioner Daniel R. Pearson).

 124 First Five-Year Review Determinations, USITC Pub. 3767 at 27.

 125 First Five-Year Review Determinations, USITC Pub. 3767 at 28.

 126 First Five-Year Review Determinations, USITC Pub. 3767 at 28.

 127 First Five-Year Review Determinations, USITC Pub. 3767 at 29-30.

23
Japanese market, by contrast, had increased less rapidly than capacity during the period of review and

was projected to be stagnant in the reasonably foreseeable future.128

The Commission further found that worldwide demand for hot-rolled steel, including demand in

China, would grow in the reasonably foreseeable future at a rate less than the increase in capacity. Likely

U.S. demand growth was expected to be moderate.129

The record indicated high substitutability between subject imports and the domestic like product. 

Price and quality were important purchasing considerations. The quality of subject imports from Russia

had improved so that they were comparable to the domestic like product and subject imports from Brazil

and Japan.130

The Commission found that most sales by domestic producers were on a spot basis or pursuant to

short-term contracts of less than one year in duration. Most importer sales were made on the spot market

or pursuant to short-term contracts. Surcharges for energy and raw materials costs were particularly

common in 2004.131

Likely Volume. The Commission found that cumulated subject import volume declined the year

the orders were imposed and the suspension agreement went into effect, fluctuated for the next four years,

and increased to a period peak in 2004, largely because of an increase in subject imports from Russia. It

cited several factors in support of the proposition that subject producers would likely increase exports to

significant levels upon revocation.132

First, capacity in each of the subject countries increased significantly during the period of review

and further capacity or production increases were likely in each of the subject countries during the

reasonably foreseeable future. The Commission found that unused capacity in the subject countries was

significant in terms of both the U.S. merchant and overall markets, and that the capital-intensive nature of

hot-rolled steel production provided strong incentives to the subject producers to make full use of

available capacity.133 The Commission further found that the industries in the subject countries were

export-oriented to a significant degree, and had demonstrated the ability to shift exports quickly from

their home markets to export markets and among export markets.134

The Commission found several reasons why the subject producers were likely to shift exports to

the United States upon revocation. First, the United States was an attractive market because of its size,

openness, and high prices. Second, increased Chinese production, and the development of China as a net

exporter of hot-rolled steel, would likely necessitate that the subject producers find other markets for

exports that had previously been directed to China. Third, there were impediments to the importation of

hot-rolled steel from each subject country into certain third-country markets.135

The Commission acknowledged that the type of regional market collapse observed in the original

investigations was unlikely to recur, and that subject imports were unlikely to return to the peak levels

observed in the original investigations. It nonetheless found that the significant additional volumes of

 128 First Five-Year Review Determinations, USITC Pub. 3767 at 30.

 129 First Five-Year Review Determinations, USITC Pub. 3767 at 29-30.

 130 First Five-Year Review Determinations, USITC Pub. 3767 at 30.

 131 First Five-Year Review Determinations, USITC Pub. 3767 at 31.

 132 First Five-Year Review Determinations, USITC Pub. 3767 at 31.

 133 First Five-Year Review Determinations, USITC Pub. 3767 at 32-33. The Commission also observed that there

was the capability of product shifting in the subject countries, although it did not rely on this consideration in finding

significant subject import volumes likely. Id. at 33.

 134 First Five-Year Review Determinations, USITC Pub. 3767 at 33-35.

 135 First Five-Year Review Determinations, USITC Pub. 3767 at 35-36. The Commission found that exchange

rate fluctuations would not serve to diminish the attractiveness of the U.S. market. Id. at 36.

24
subject imports likely upon revocation would be sufficient to have negative effects on domestic sales and

prices.136

Likely Price Effects. The Commission found that price was a key factor in purchasing decisions

for hot-rolled steel. It also found that, because of the improved quality of subject imports from Russia,

there was even broader interchangeability among the subject imports and the domestic like product than

in the original investigations.137

The Commission found that while prices for the domestic like product rose sharply in 2004,

prices were trending lower in later 2004 and early 2005 as producers’ orders had declined. The

Commission also found that increased subject imports from Russia played a role in this price decline. 

Additionally, during the portion of the period of review where subject imports from Russia were

increasing, the subject imports generally undersold the domestic like product. The Commission also

noted that inventory buildups by U.S. service centers that occurred during the conclusion of the period of

review would likely be drawn down in the reasonably foreseeable future, adding to further downward

price pressure in the U.S. market.138

The Commission found that significant underselling upon revocation by the subject imports

would be likely based on the pricing behavior in the original investigations, the importance of price in

purchasing decisions, and the substitutability of the subject imports and the domestic like product. It

further found that the volumes of subject imports likely upon revocation would have significant price

depressing or suppressing effects.139

Likely Impact. The Commission characterized data concerning the domestic industry’s

vulnerability as “mixed.” Because of restructuring, the industry had made great strides in improving its

efficiency and productivity. Notwithstanding this, the industry experienced five years of poor financial

performance before attaining substantial profitability in 2004. The Commission found that the principal

factor that permitted this improved performance was an increase in global demand over supply associated

with a sharp upsurge in Chinese demand for hot-rolled steel. The Commission characterized the

conditions that permitted the improved performance as temporary and unlikely to continue into the

foreseeable future in light of China’s becoming a net exporter of hot-rolled steel by the fourth quarter of

2004.140

In the environment of deteriorating prices and increasing raw materials costs that the Commission

found was likely, it concluded that the industry was susceptible to the continuation or recurrence of

material injury. It found that upon revocation, the likely increase in subject import volume and

consequent price effects would have a significant adverse impact on the domestic industry.141

C. Conditions of Competition and the Business Cycle

In evaluating the likely impact of the subject imports on the domestic industry if an order is

revoked or a suspended investigation terminated, the statute directs the Commission to consider all

relevant economic factors “within the context of the business cycle and conditions of competition that are

distinctive to the affected industry.”142 The following conditions of competition inform our

determinations.

 136 First Five-Year Review Determinations, USITC Pub. 3767 at 36.

 137 First Five-Year Review Determinations, USITC Pub. 3767 at 37.

 138 First Five-Year Review Determinations, USITC Pub. 3767 at 37-38.

 139 First Five-Year Review Determinations, USITC Pub. 3767 at 38.

 140 First Five-Year Review Determinations, USITC Pub. 3767 at 39-41.

 141 First Five-Year Review Determinations, USITC Pub. 3767 at 41-42.

 142 19 U.S.C. § 1675a(a)(4).

25
1. Demand Conditions

Demand for hot-rolled steel is a function of the demand for the downstream products that

incorporate hot-rolled steel. These include a vast array of applications in the automotive, automobile

parts, appliance, and construction industries.143 As has been the case in prior investigations and reviews,

the majority of U.S. hot-rolled steel production is consumed internally or transferred to affiliates for

downstream processing into cold-rolled and/or galvanized or plated products, cut-to-length plate, or

welded pipe.144 In 2010, producers captively consumed or transferred to affiliates about 60 percent of

domestic shipments for further processing; the remaining shipments were sold in the merchant market.145

Demand for hot-rolled steel in the United States tends to follow broad demand trends in the

national economy. As a result, steel demand expands and contracts when the economy does.146 This is

confirmed by trends in apparent U.S. consumption of hot-rolled steel during the period of review. 

Apparent consumption rose from 65.9 million short tons in 2005 to 71.6 million short tons in 2006, the

period peak.147 Indicators of hot-rolled steel demand such as U.S. automobile sales and construction

spending also were at high levels or period peaks in 2006, and then remained relatively close to these

levels, but declining, in 2007.148 Apparent U.S. consumption of hot-rolled steel also declined, falling to

63.7 million short tons in 2007 and 59.6 million short tons in 2008.149 A recession in the United States

caused gross domestic product (GDP) to decline during the latter portion of 2008 and 2009.150 During the

recession, demand for hot-rolled steel fell sharply, declining to a period low of 40.4 million short tons in

2009.151 GDP growth returned in the fourth quarter of 2009, and continued during 2010, although growth

was generally fairly modest in automotive sales and at best uneven in construction spending.152 Apparent

U.S. consumption of hot-rolled steel in 2010 grew to 56.1 million short tons, a figure still below that for

each year in the period of review except 2009.153

The parties have presented divergent forecasts for likely demand in the U.S. market. Domestic

Producers acknowledge that demand has recently been on the upswing, but characterize recovery from the

2009 economic downturn as slow and characterize likely demand growth as lackluster.154 By contrast,

 143 CR at II-15, PR at II-11.

 144 CR at I-30-31, PR at I-25.

 145 CR at II-15 n.21, PR at II-11 n.21; CR/PR, Table III-7.

 146 CR at II-17, PR at II-11-12.

 147 CR/PR, Table I-14. Merchant market apparent U.S. consumption displayed the same trends as total apparent

U.S. consumption during the period of review. Open market consumption increased from 27.3 million short tons in

2005 to a period peak of 31.7 million short tons in 2006. CR/PR, Table I-15.

 148 CR/PR, Figures II-2, II-3.

 149 CR/PR, Table I-14. Apparent U.S. consumption in the merchant market declined to 27.6 million short tons in

2007 and then to 25.9 million short tons in 2008. CR/PR, Table I-15.

 150 CR/PR, Figure II-1.

 151 CR/PR, Table I-14. Apparent U.S. consumption in the merchant market declined to a period low of 16.0

million short tons in 2009. CR/PR, Table I-15.

 152 CR/PR, Figures II-1-3.

 153 CR/PR, Table I-14. Apparent U.S. consumption in the merchant market increased to 23.9 million tons in

2010.

 154 Tr. at 79 (Scherrbaum), 193 (Busse); AMUSA Prehearing Brief at 39; Gallatin Group Prehearing Brief at 10;

Nucor Prehearing Brief at 26-29; U.S. Steel Prehearing Brief as at 21-26, 28-29; Nucor Posthearing Brief, ex. 1 at

68-69, 73.

26
respondents characterize likely U.S. demand prospects as good.155 ***, an industry monitoring service,

projects that U.S. consumption of hot-rolled sheet will increase by *** percent in 2011 and *** percent in

2012; projected consumption for 2012, however, is still below consumption *** reported for any year

between 2005 and 2008.156

*** reports that on a worldwide basis, consumption of hot-rolled sheet increased in 2006 and

2007, declined the next two years, and reached a period peak in 2010. Consumption from 2005 to 2010

declined in North America (including the United States), Europe, and Japan. The region with by far the

largest increase in consumption was East and Southeast Asia other than Japan. There was more modest

growth from 2005 to 2010 in Brazil and Russia; in each of these countries reported consumption declined

in both 2008 and 2009.157 *** projects additional increases in worldwide hot-rolled sheet consumption in

2011 and 2012. Consistent with the experience from 2005 to 2010, the area with the largest projected

increase in consumption is East and Southeast Asia other than Japan. Japan’s projected consumption in

both 2011 and 2012 is lower than that reported for 2010; in Brazil consumption is projected to decline in

2011 and increase by *** percent in 2012; Russian consumption is projected to increase by *** percent in

2011 and *** percent in 2012.158

2. Supply Conditions

During the period of review, the domestic industry satisfied the bulk of domestic demand for hotrolled steel. On an annual basis, the domestic industry supplied between 91.0 and 94.7 percent of the

total market and between 79.6 and 87.8 percent of the merchant market during the period of review.159

There has been some further consolidation in the domestic industry since the first reviews, as NLMK

acquired both Beta and a 50 percent interest in Duferco Farrell, U.S. Steel acquired and then closed the

hot-rolled production of Lone Star, and AMUSA was formed from the prior operations of Mittal Steel and

International Steel Group. Severstal US acquired facilities during the period of review and began

operations of a new facility, Severstal-Columbus, in August 2007; in March 2011, however, Severstal

sold three of its five U.S. mills to the Renco Group.160 One new producer, ThyssenKrupp USA, began

operations in 2010 and Nucor opened its Castrip mill in Arkansas in the fourth quarter of 2009.161 The

domestic industry’s capacity was 2.3 percent lower in 2010 than it was in 2005.162

Nonsubject imports accounted for between 5.0 and 7.9 percent of total apparent U.S.

consumption, and between 11.6 and 17.8 percent of apparent U.S. open market consumption, on an

annual basis during the period of review.163 The two largest sources of nonsubject imports were Canada

and Korea.164

Imports from subject sources were a very small presence in the U.S. market during the period of

review. Imports from subject sources combined accounted for between less than 0.05 and 1.1 percent of

 155 Joint Respondents Prehearing Brief at 43-49; Joint Respondents Posthearing Brief at 5-6; Ford Posthearing

Brief, response to questions at 20-22.

 156 CR/PR, Tables IV-22-23.

 157 CR/PR, Table IV-22.

 158 CR/PR, Tables IV-22-23.

 159 CR/PR, Tables I-14-15.

 160 CR/PR, Tables I-10, III-1, Figure I-3.

 161 CR/PR, Table III-2.

 162 CR/PR, Table III-4.

 163 CR/PR, Tables I-14-15.

 164 CR/PR, Table IV-2.

27
total apparent U.S. consumption, and between 0.1 and 2.5 percent of open market consumption, on an

annual basis during the period of review. Nearly all of this was attributable to subject imports from

Russia, as subject imports from Japan never exceeded 0.1 percent of either total or open-market

consumption and subject imports from Brazil never reached 0.05 percent of either total or open market

consumption during any single year.165

On a worldwide basis, *** reports that global production of hot-rolled steel increased from 2005

to 2007, declined in 2008 and 2009, and rose to a period peak in 2010.166 It projects that global

production will increase further in 2011 and 2012.167 The region with the largest projected increase is

East and Southeast Asia.168 *** projects increases in production in 2011 and 2012 in the United States,

Brazil, and Russia, but forecasts 2011 and 2012 production in Japan to be below the level of 2010.169

3. Other Likely Conditions of Competition

Majorities of market participants found imports from each subject source at least frequently

interchangeable with each other and with the domestic like product.170 Hot-rolled steel sold in the United

States is commonly produced to specifications published by ASTM International.171

Hot-rolled steel is produced in the United States by two processes. In the integrated process, the

principal raw material is iron ore, which is smelted in a blast furnace using coke, usually supplemented

with coal, natural gas, or fuel oil, to produce molten pig iron, which is drained into a large ladle and

transported to an oxygen steelmaking furnace.172 In the nonintegrated or “minimill” process, the raw

material is scrap, which is melted in an electric arc furnace.173 Prices for both coke and scrap displayed

high volatility during the period of review. Prices for imported coke trended generally lower from 2005

to 2007, increased sharply to a period peak in 2008, declined sharply during the latter portion of 2008,

and fluctuated irregularly thereafter.174 Scrap prices generally declined during the first portion of 2005,

fluctuated upwards during the latter portion of 2005, 2006, and 2007, almost trebled in price during the

first seven months of 2008, dropped to near period lows by the beginning of 2009, and thereafter

fluctuated upwards.175 U.S. producers’ projections concerning likely raw materials cost trends were

mixed, with a majority anticipating continued volatility.176 Brazilian and Japanese Respondents argue that

several large domestic producers (Nucor, U.S. Steel, AMUSA, and SDI) are shielded from the effects of

swings in raw materials costs due to their growing ownership of suppliers of the raw materials used in

hot-rolled steel production.177 The executives of these companies testified, however, that such vertical

 165 CR/PR, Tables I-14-15.

 166 CR/PR, Table IV-19.

 167 CR/PR, Table IV-20.

 168 CR/PR, Tables IV-19-20.

 169 CR/PR, Tables IV-19-20.

 170 CR/PR, Table II-8.

 171 See CR at I-31, PR at I-25.

 172 CR at I-32, PR at I-26.

 173 CR at I-33, PR at I-26.

 174 CR/PR, Figure V-3.

 175 CR/PR, Figure V-1.

 176 CR at V-5, PR at V-3.

 177 Joint Respondents Prehearing Brief at 54-58.

28
integration does not insulate the hot-rolled steel production operations from volatility in raw materials

pricing.178

Eight of 17 U.S. producers reported that they have included surcharges in their sales contracts to

cover changes in the prices of raw materials at some point since 2005. Twenty of 28 U.S. purchasers

reported paying such surcharges during the period of review.179

Domestic producers make an overwhelming percentage of their sales on a made-to-order basis. 

This tends to constrain the accumulation of inventories at the producer level.180

All but one of the 14 U.S. producers indicated that the majority of their 2010 sales were in the

spot market. Most U.S. producers also sell pursuant to short-term contracts; over time the amount of spot

market and short-term contract sales has increased as the volatility of raw materials costs has made

longer-term contracts riskier for producers.181 During the period of review, the subject imports were also

sold predominantly in the spot market, as 15 of 20 responding importers reported that at least 95 percent

of their 2010 sales were in the spot market.182 183

D. Termination of the Suspended Investigation on Subject Imports from Russia Is

Likely to Cause Continuation or Recurrence of Material Injury to the Domestic

Industry within a Reasonably Foreseeable Time

1. Likely Volume of Subject Imports

The suspension agreement concerning hot-rolled steel from Russia contains two elements. The

first element is a quantitative limitation, which is determined by a formula taking into account the

previous year’s export limit, apparent consumption in the United States, and whether the Ministry of

Trade of the Russian Federation adopted premium reference prices. Additionally, portions of the export

limit may be carried over to the following period or carried back to the prior period.184 The second

element is a reference price that Commerce issues each quarter, which establishes a minimum price for

subject imports from Russia in the U.S. market.185

The quantity of subject imports from Russia fluctuated during the period of review. Subject

import quantity increased from 299,275 short tons in 2005 to 789,288 short tons in 2006, fell sharply to

136,293 short tons in 2007, and then continued to fall the next two years, reaching a period low of 1,708

short tons in 2009. In 2010 subject imports from Russia increased to 125,079 short tons.186 Subject

imports from Russia accounted for 0.5 percent of the quantity of total apparent U.S. consumption in 2005,

1.1 percent in 2006, and 0.2 percent or less the four subsequent years.187 Thus, during the period of

 178 Tr. at 137-38 (Surma), 138-39 (Di Micco), 140-41 (Blume).

 179 CR at V-2-3, PR at V-2.

 180 CR at II-6, PR at II-5.

 181 CR at V-10, PR at V-7-8.

 182 CR at V-11, PR at V-8.

 183 Commissioner Lane and Commissioner Pinkert do not join the remainder of this opinion. See Separate and

Dissenting Views of Commissioners Charlotte R. Lane and Dean A. Pinkert.

 184 CR at I-5-6, PR at I-4.

 185 CR at I-5, PR at I-4.

 186 CR/PR, Table IV-1.

 187 CR/PR, Table I-14. Subject imports from Russia accounted for 1.1 percent of the quantity of apparent U.S.

open market consumption in 2005, 2.5 percent in 2006, and 0.5 percent or less the four subsequent years. CR/PR,

Table I-15.

29
review, subject imports from Russia were able rapidly to increase their presence in the U.S. market

notwithstanding the provisions of the suspension agreement.

Should the suspended investigation be terminated, Russian producers would have the capability

of directing significant amounts of additional subject imports to the United States. The Russian industry

has available excess capacity. Capacity utilization during 2010 was 87.2 percent, which was 5.4

percentage points below the period peak. Additionally, Russian producers have reportedly recently

completed or plan in the reasonably foreseeable future capacity increases.188

More importantly, during the period of review Russian producers had a significant export

orientation and a tendency to shift exports rapidly between different markets. Reporting Russian

producers’ exports constituted between 24.3 and 37.4 percent of their annual shipments, and between 53.0

and 70.5 percent of annual commercial shipments, during the period of review. Contrary to Russian

Respondents’ assertions, the record does not indicate that the Russian industry is significantly increasing

the proportion of shipments it supplies to the home market. The percentage of Russian producers’

shipments directed to the home market, either for internal consumption or as commercial shipments, only

increased by 1.3 percentage points between 2005 and 2010, and was lower in 2010 than in 2006, 2007, or

2008.189

In the first reviews, the Commission noted that “[w]itnesses on behalf of the Russian producers

stated that it is a normal pattern for Russian producers to shift exports to markets where they can obtain a

more favorable price.”190 While Russian Respondents made no similar admissions in their written

submissions in these reviews, and did not appear at the Commission hearing, the record in these reviews

indicates that this pattern has not changed. As stated above, during the period of review the quantity of

subject imports from Russia that entered the United States showed large fluctuations. The same is true for

Russian exports to Asia, which varied between *** percent of total shipments on an annual basis, and

showed year-to-year fluctuations as high as *** short tons. The share of total shipments to markets

outside the EU, United States, and Asia, which received the largest quantity of export shipments during

the period of review, varied from *** percent. The record consequently indicates that Russian producers

do not focus on a single export market or regional group of markets, but change export emphasis as

market conditions warrant.191

Consequently, Russian producers have the ability to supply significant additional quantities of

subject imports to the United States both by utilizing excess capacity and by shifting exports between

sources, as they have done in the past. We also find that they would likely have the incentive to direct

significant quantities of subject imports to the United States should the suspended investigation be

terminated. We observe, as we did in the prior reviews, that the U.S. market is relatively large and

open.192 Moreover, as explained above, the experience under the current suspension agreement indicates

that Russian producers will shift large quantities of exports from other markets to the United States when

they perceive that conditions are attractive, and then shift them back to other markets when they perceive

 188 CR/PR, Table IV-15. *** anticipates increasing capacity by *** short tons by 2012. There are also reports of

an additional *** short ton capacity increase in 2010 by OMK Steel, a producer that did not complete a

questionnaire. CR at IV-33, PR at IV-23.

 189 CR/PR, Table IV-15. Moreover, while *** data project increases in Russian hot-rolled steel sheet

consumption in 2010 and 2011, CR/PR, Tables IV-22-23, they also project increases in Russian hot-rolled steel

production. CR/PR, Tables IV-18-19.

 190 First Five-Year Review Determinations, USITC Pub. 3767 at 20.

 191 CR/PR, Table IV-15. While Russian Respondents argue that they intend focusing on supplying Chinese and

Asian export markets, Russian Respondents Posthearing Brief at 14-16, the record does not indicate that Asian

export markets are growing in significance to Russian producers. To the contrary, Russian exports to Asia in 2010

were *** percent lower than those in 2005 and *** percent lower than those in 2009. Id.

 192 See CR/PR, Table IV-23; see generally First Five-Year Review Determinations, USITC Pub. 3767 at 35.

30
that U.S. conditions are unattractive.193 The termination of the suspension agreement would likely serve

to make the U.S. market a considerably more favorable environment for subject imports from Russia than

it was during most of the period of review. In this regard, although the United States did not always offer

higher prices for hot-rolled steel than all other world markets during the period of review, U.S. prices

were consistently attractive.194 Such prices would likely prove attractive to exporters, such as those

trading in subject imports from Russia, that tend to switch to markets offering a favorable environment. 

Indeed, the most recent pricing observations for 2011 indicate that the United States offers higher prices

compared to other major export markets,195 and Russian producers have demonstrated their interest in the

U.S. market by making repeated recent offers to sell hot-rolled steel in the United States, even with the

suspension agreement in effect.196 Additionally, antidumping duty orders on hot-rolled steel from Russia

that are effective in Argentina, Indonesia, Thailand, Peru, and Mexico, as well as a quantitative restriction

on exports to the EU, serve to restrict the availability of export markets for Russian hot-rolled steel, which

would further likely increase the attractiveness of the U.S. market should the suspended investigation be

terminated.197

For these reasons, we find that a significant quantity of subject imports from Russia is likely upon

termination of the suspended investigation.198

 193 See CR/PR, Figure I-1.

 194 CR/PR, Tables IV-24-25, Figure V-2.

 195 CR/PR, Tables IV-24-25.

 196 AMUSA Posthearing Brief, ex. 2; Nucor Posthearing Brief, ex. 2; U.S. Steel Posthearing Brief, ex. 5. 

Individual offers are reported to be as large as *** than the quantity of actual or arranged imports Russian producers

reported to the Commission. Compare U.S. Steel Posthearing Brief, ex. 5, ¶ 9 with CR at IV-6, PR at IV-5. Russian

Respondents contend that there is no proof that these offers have resulted in any sales. Russian Respondents

Posthearing Brief at 6. Russian Respondents do not, however, deny the existence of the offers. Nor do they explain

why hot-rolled steel from Russia would be offered in the United States if they have no interest in supplying the U.S.

market.

Additionally, the existence of these offers serves to rebut a principal argument of the Russian Respondents,

which is that they would not export significant quantities of subject merchandise to the United States because

NLMK and Severstal own hot-rolled steel mills in this country. This argument disregards that MMK, *** Russian

producer, ***, see CR/PR, Table IV-14; U.S. Steel Posthearing Brief, ex. 5, does not own any U.S. production

facilities. In any event, the materials Russian Respondents have submitted do not indicate that NLMK or Severstal

have policies comparable to that of ArcelorMittal to bar imports that might disrupt pricing in the U.S. market. 

NLMK merely asserts that it will request traders to “slow down” exports to markets in which it has affiliates if it

senses that such exports may give rise to potential trade actions. NLMK Posthearing Statement. This is not a policy

precluding such imports. Severstal’s stated policy against disruptive exports that might injure its affiliates, Russian

Respondents Posthearing Brief, ex. 1, cannot be reconciled with recent offers in the U.S. market for Russian steel

produced by JSC Severstal. See Tr. at 87-88 (Di Micco); Nucor Posthearing Brief, ex. 2.

The existence of these offers further rebuts the argument of Russian Respondents that freight costs serve as

a disincentive to increasing exports to the United States. In this respect, we observe that although the Russian

Respondents have provided a table purporting to list freight and handling costs for U.S. exports over the period of

review, this table indicates that the most recent freight costs are not at peak levels. Russian Respondents Prehearing

Brief, ex. 2. Moreover, Russian Respondents have provided no information that would permit a comparison of

freight and handling costs for U.S. exports to those costs for exports to other markets.

 197 CR at IV-34, PR at IV-24. Because of the quantitative restriction, Russian exports to the EU were fairly stable

during the period of review. CR/PR, Table IV-15. While the EU quantitative restriction will expire if Russia joins

the World Trade Organization, there no indication in the record when Russia’s accession to the WTO, which has

been pending for more than a decade, will likely be completed.

 198 In our examination of likely subject import volume, we have also examined several other considerations,

although we do not place principal reliance on them in making our finding.

(continued...)

31
2. Likely Price Effects of Subject Imports

We again find, as we did in the original investigations and first five-year reviews, that price is an

important factor in purchasing decisions. Twenty-eight of 32 reporting purchasers reported that price was

a “very important” factor in purchasing decisions.199 Twelve of 31 reporting purchasers reported that

price was the first-ranked factor in purchasing decisions, and nine reported it was the second-ranked.200

Although more purchasers ranked quality than price as either the first- or second-ranked factor in

purchasing decisions, purchasers did not perceive substantial quality distinctions between the domestic

like product and subject imports from Russia. Purchasers were asked whether they required seven

specific quality factors in the hot-rolled steel that they purchased, and if so, whether they would continue

purchasing hot-rolled steel from different sources; majorities stated, with respect to each factor, that they

would purchase hot-rolled steel from domestic sources and subject imports from Russia, although the

majorities were larger for the domestic like product than for subject imports from Russia.201

In these reviews, the Commission collected information on four pricing products. It received data

accounting for approximately 47.5 percent of reported U.S. producers’ commercial shipments of hotrolled steel, and 79.3 percent of reported U.S. shipments of subject imports from Russia.202 Prices for

each of the four domestically produced products declined from the first quarter to the third quarter of

2005, before increasing through the third quarter of 2006. Prices then declined irregularly through the

end of 2007. Prices increased sharply from the last quarter of 2007 to the third quarter of 2008, then

dropped sharply through the second quarter of 2009. Prices for three of the four products reached period

lows in the second quarter of 2009 and then increased irregularly through the second quarter of 2010;

prices for all of the products declined during the final two quarters of 2010. Prices for each of the four

domestically produced products were lower in the fourth quarter of 2010 than in the first quarter of 2005. 

Price trends for the subject imports from Russia generally followed the same trends displayed by the

domestically produced product, although with greater volatility. For the two Russian products sold in the

 198 (...continued)

We examined inventories of the subject merchandise. In 2010, end-of-period inventories of subject

merchandise from Russia were at low absolute levels in both the United States and Russia. CR/PR, Tables IV-3, IV15.

We also examined the potential for product shifting. Russian producers make nonsubject products in the

same hot-strip mills at which they produce subject hot-rolled steel. CR/PR, Table IV-16. These nonsubject products

are principally cut to length plate or alloy hot-rolled steel. CR at IV-37, PR at IV-27. Russian producers

additionally internally consume some of the subject merchandise they produce for further processing into

downstream products such as cold-rolled steel or tubular goods. CR/PR, Tables IV-15-16. These downstream

and/or nonsubject products are typically higher value products than the subject merchandise, because they require

either additional alloying elements or further value-added processing. Cf. U.S. Steel Posthearing Brief, ex. 43 (alloy

higher valued product than hot-rolled sheet). The record contains no information suggesting why hot-rolled steel

producers would have an economic incentive to shift production from a higher-valued product to the subject

merchandise.

 199 CR/PR, Table II-5.

 200 CR/PR, Table II-4.

 201 CR/PR, Table II-6. Additionally, none of the parties to the reviews argued that there were substantial quality

differences between the domestic like product and subject imports from Russia.

 202 CR at V-13, PR at V-9. The products were: (1) hot-rolled low-carbon steel plate in coils, as rolled; (2) hotrolled low-carbon steel sheet, as rolled; (3) hot-rolled low-carbon steel sheet, pickled, oiled and temper rolled; and

(4) hot-rolled high-strength low-alloy steel plate in coils, as rolled. See CR at V-12, PR at V-9. 

32
market throughout the period of review, prices for one were higher in the fourth quarter of 2010 than in

the first quarter of 2005, and prices for the other were lower.203

The subject imports from Russia undersold the domestic like product in 27 of 67 quarterly

comparisons. During 2006, however, the year in the period of review that subject imports from Russia

had their peak presence in the U.S. market, and also the year in which Russian shipments of the four

pricing products were at their peak quantities, the subject imports undersold the domestic like product in

10 of 11 quarterly comparisons.204 The tendency of subject imports from Russia to increase their

frequency of underselling when their presence in the U.S. market grows was similarly present in the

original investigations and the first reviews.205

We likewise find in these reviews that the significant quantities of subject imports from Russia

likely upon termination of the suspended investigation would likely result in significant underselling. 

Because the domestic like product and subject imports are good substitutes and price is an important part

of purchasing decisions, once subject imports from Russia are free from the pricing restrictions of the

suspension agreement, to attract sales they would likely be offered at lower prices than the domestic like

product, as previously occurred when subject import volume from Russia increased. We also observe that

during the original period of investigation, the most recent time that subject imports from Russia were

free from the pricing restrictions of the suspension agreement, subject imports from Russia undersold the

domestic like product in the overwhelming majority of comparisons.206 The prevalence of spot market

sales in the U.S. market, as explained in section V.C.3. above, would facilitate the use of underselling to

obtain sales and increase market share for the subject imports from Russia.

In this event, given the importance of price in purchasing decisions, domestic producers would

need to cut prices to match subject import price competition and make sales. Consequently, we find that

on termination of the suspended investigation subject imports from Russia are likely to enter the United

States at prices that would likely have significant suppressing or depressing effects on the price of the

domestic like product.

 203 CR/PR, Tables V-1-4, CR at V-13, V-22, PR at V-9-10.

 204 CR/PR, Tables V-1-4. Indeed, during the period of review the quantity of subject imports involved in

underselling observations (*** short tons) was greater than that involved in overselling observations (*** short

tons), despite the greater number of overselling observations. Id.

 205 Original Japan Determination, USITC Pub. 3202 at V-15 (although predominant underselling during all

periods, frequency of underselling increased as volume of subject imports from Russia increased); First Five-Year

Review Determinations, USITC Pub. 3767 at 38. Additionally, the bulk of confirmed lost sales allegations during

the original investigations concerned subject imports from Russia. Original Japan Determinations, USITC Pub.

3202 at V-16.

 206 Original Japan Determination, USITC Pub. 3202 at V-15.

33
3. Likely Impact of Subject Imports207

As previously discussed, during the period of review the domestic industry experienced some

consolidation, some sales of existing mills, and one new entrant. Capacity showed fairly minor

fluctuations, increasing from 81.5 million short tons in 2005 to a period high of 82.2 million short tons

annually in 2006-07, then declining until reaching a period low of 78.2 million short tons in 2009, and

then increasing to 79.7 million tons in 2010.208 Production followed similar trends, increasing from 62.9

million tons in 2005 to a period high of 65.9 million tons in 2006, declining moderately the next two

years, falling sharply to a period low of 39.6 million tons in 2009, and then increasing to 54.9 million

short tons in 2010, which was still the second lowest annual figure of the period.209

Total U.S. shipments and U.S. commercial shipments each followed the same trends as

production. Each rose to a period peak in 2006, declined the next two years, fell sharply in 2009, and

increased in 2010 to a level below that observed in any year between 2005 and 2008.210 End-of-period

inventories fluctuated on both an absolute and relative basis during the period of review; inventories

declined from 1.8 million short tons in 2005 to 1.6 million short tons in 2010 and were 2.9 percent of

production at the conclusion of both years.211

Employment declined during the latter portion of the period of review. There were 23,757

production and related workers (PRWs) in 2005. Employment levels fluctuated until reaching a period

peak of 24,599 PRWs in 2008. Employment then fell to 20,187 PRWs in 2009 before increasing to

21,682 PRWs in 2010. Hourly wages of $32.53 in 2010 were above those of $28.54 in 2005, but below

the levels reported in 2007 and 2008. Productivity, measured in short tons per thousand hours, rose from

1,134.7 in 2005 to a period peak of 1,259.0 in 2006, declined the next three years until reaching a period

low of 1,039.5 in 2009, and then rose to 1,159.5 in 2010.212

The financial performance of the domestic industry displayed substantial fluctuations during the

period of review. From 2005 to 2008, the domestic industry displayed consistently profitable

performance, with operating income ratios ranging between a low of 9.2 percent in 2007 to a high of 18.1

percent in 2006. During 2008, the one year when raw materials costs and cost of goods sold increased

sharply on a per unit basis, unit sales volumes increased even more rapidly and the domestic industry

obtained a 13.9 percent operating ratio. By contrast, in 2009 the industry recorded a operating ratio of

negative 11.3 percent as 11 of 13 producers reported operating losses. Although per unit costs fell,

revenues declined far more sharply because of the large decline in output in a recessionary environment. 

 207 The SAA states that in assessing whether the domestic industry is vulnerable to injury if the order is revoked,

the Commission “considers, in addition to imports, other factors that may be contributing to overall injury. While

these factors, in some cases, may account for the injury to the domestic industry, they may also demonstrate that an

industry is facing difficulties from a variety of sources and is vulnerable to dumped or subsidized imports.” SAA at

885, 19 U.S.C. § 1675a(a)(4). Section 752(a)(6) of the Tariff Act states that “the Commission may consider the

magnitude of the margin of dumping or the magnitude of the net countervailable subsidy” in making its

determination in a five-year review. 19 U.S.C. § 1675a(a)(6). The statute defines the “magnitude of the margin of

dumping” to be used by the Commission in five-year reviews as “the dumping margin or margins determined by the

administering authority under section 1675a(c)(3) of this title.” 19 U.S.C. § 1677(35)(C)(iv). See also SAA at 887.

Commerce conducted an expedited five-year review with respect to the suspension agreement concerning

subject imports from Russia. It found a likely margin of 73.59 percent for named exporter JSC Severstal and an all

others rate of 184.56 percent. 75 Fed. Reg. 47263, 47264 (Aug. 5, 2010). 

 208 CR/PR, Table III-4.

 209 CR/PR, Table III-4.

 210 CR/PR, Table III-7. 

 211 CR/PR, Table III-8. 

 212 CR/PR, Table III-9.

34
In 2010, when demand and production recovered – albeit, as discussed above, not to the levels

experienced prior to the economic downturn – financial performance improved and the industry’s

operating ratio was again positive, at 2.3 percent.213 The industry’s capital expenditures fluctuated

upwards during the period of review, reaching a peak in 2010 which largely reflected expenditures ***.214

Research and development expenses, which were much lower than capital expenses, declined from 2005

to 2010 and were lower in 2010 than in all but one year of the period of review.215

We conclude that the domestic industry is not currently in a vulnerable condition. The

performance of the domestic industry during the period of review largely reflected demand conditions,

with the domestic industry showing very good financial performance in 2005 through 2008, when

demand was generally strong,216 and extremely poor financial performance in 2009, when demand

plummeted due to a severe economic downturn. It achieved modestly profitable performance in 2010,

when demand recovered to some extent but was still below the levels reached before the downturn. 

Domestic Producers have emphasized that operating performance in 2010 was worse than it was in 1998,

the final year of the original period of investigation. Although we would not characterize the industry’s

2010 operating performance as robust, neither do we consider it unduly poor in light of that year’s

apparent consumption, which was below levels of 13 of the 14 previous years.217 Because some

improvement in U.S. demand is likely in 2011 and 2012,218 the industry’s condition in the reasonably

foreseeable future is likely to improve. We find that in the context of the business cycle, the industry is

not vulnerable notwithstanding its lackluster 2010 financial performance.219

Nevertheless, the industry is not in such a strong condition, nor are likely demand conditions

sufficiently positive, that the industry could withstand significantly increased low-priced subject imports

from Russia without likely sustaining significant adverse effects. We have found that the volume of

subject imports would likely increase significantly should the suspended investigation on hot-rolled steel

from Russia be terminated. We have further found that these additional volumes of subject imports

would be priced in a manner that would likely undersell the domestic like product and have significant

 213 CR/PR, Table III-10. The financial data cited above values internal consumption and transfers to affiliated

firms based on a constructed fair market value. See CR at III-23, PR at III-14. Such a valuation methodology is one

that the Commission has used in its most recent reviews of hot-rolled steel products. Hot-Rolled Steel Products from

Argentina, China, India, Indonesia, Kazakhstan, Romania, South Africa, Taiwan, Thailand, and Ukraine, Inv. Nos.

701-TA-404-408, 731-TA-898-902 and 904-908 (Review), USITC Pub. 3956 at III-20-III-23 (Oct. 2007). Domestic

hot-rolled steel producers also reported financial data under a methodology that valued internal consumption and

transfers to affiliates at cost plus an allocated share of the gross profits of downstream products. This valuation

method, which AMUSA and U.S. Steel argue is more representative, showed similar trends to the constructed

market value methodology, but yielded lower operating margins in the years when the domestic industry operated

profitably. See CR/PR, Table E-1. Our principal reliance on the constructed market value methodology does not

affect our analysis of vulnerability below.

 214 CR/PR, Table III-13.

 215 CR/PR, Table III-13.

 216 We do not find that the maintenance of the orders and suspension agreement over the current period of review

is significantly responsible for the industry’s improved performance from 2005 to 2008. We instead find that the

improved performance the domestic industry achieved during this period is a function of strong demand conditions

unrelated to the orders and suspension agreement under review and the continued effects of the industry

restructuring, most of the key elements of which occurred prior to the current review period.

 217 CR/PR, Table I-1.

 218 CR/PR, Tables IV-22-23.

 219 The industry’s ability to resume profitable operations in the first year following recovery from an economic

downturn contrasts to the pattern observed in the first reviews. After apparent U.S. consumption fell noticeably in

2001, the industry did not attain profitable operations for another three years. CR/PR, Table I-1.

35
depressing or suppressing effects on prices for the domestic like product. Consequently, to compete with

the likely additional volumes of subject imports from Russia, the domestic industry would likely lose

sales unless it cuts prices or restrains price increases. Any lost sales or lost revenues due to the subject

imports would lead to likely declines in output, market share, productivity, employment, wages, growth,

and financial performance.220

In conducting our analysis of likely impact, in addition to demand, we have also considered the

role of factors other than subject imports from Russia, so as not to attribute likely injury from them to the

subject imports. For the reasons stated below, we have concluded that revocation of the orders on subject

imports from Brazil or Japan would not be likely to lead to significant subject import volumes, significant

price effects, or a significant impact on the domestic industry. We have also considered the role of

imports from sources other than Brazil, Japan, or Russia. The record does not support the contention that

the current level of import market penetration in the U.S. market, nearly all of which is attributable to

imports from sources other than Brazil, Japan, or Russia,221 constitutes a ceiling for likely import market

penetration. In 2010, imports from all sources accounted for 5.5 percent of total apparent U.S.

consumption. This is 3.5 percentage points below the maximum import penetration achieved during the

period of review, and 9.7 percentage points below the maximum import penetration achieved during the

original period of investigation, when subject imports from Russia alone achieved a peak 5.1 percent

market penetration.222 The record consequently cannot support a conclusion that any additional subject

imports from Russia likely upon termination of the suspended investigation would simply be at the

expense of nonsubject imports. Moreover, because additional subject imports from Russia would likely

have adverse price effects on the domestic like product, they would have an adverse impact on the

domestic industry’s revenues and financial performance.

Consequently, consideration of factors other than the subject imports from Russia does not detract

from our finding that these imports are likely to have a significant adverse impact on the domestic

industry within a reasonably foreseeable time should the suspended investigation be terminated.

E. Revocation of the Antidumping and Countervailing Duty Orders on Subject

Imports from Brazil Is Not Likely to Lead to Continuation or Recurrence of

Material Injury to the Domestic Industry within a Reasonably Foreseeable Time

1. Likely Volume of Subject Imports

Subject imports from Brazil had only a minimal presence in the U.S. market during the period of

review. There were no subject imports from Brazil in 2005. The quantity of subject imports rose to a

period peak of 2,237 short tons in 2006, and since then annual quantities have ranged between 46 and 512

short tons.223 Throughout the period of review, subject imports from Brazil accounted for less than 0.05

percent of apparent U.S. consumption.224

We acknowledge that Brazilian producers have some ability to increase exports. In 2010, the

Brazilian industry had capacity of 15.8 million short tons, a period high, and capacity utilization of 90.7

 220 In this respect, we have considered that it is undisputed that the subject imports and the domestic like product

will be competing in the merchant market.

 221 CR/PR, Tables I-14-15.

 222 CR/PR, Table I-1.

 223 CR/PR, Table IV-1.

 224 This is true in terms of both the total market and the merchant market. CR/PR, Tables I-14-15.

36
percent. During the period of review, capacity utilization in Brazil had been as high as 98.5 percent.225

Additionally, the Brazilian industry anticipates adding new capacity in the reasonably foreseeable future. 

Usiminas anticipates completing installation of a new *** hot strip mill by ***.226 Additionally, two new

firms have announced plans to begin hot-rolled steel production in Brazil at facilities that may begin

production by the end of 2012. Gerdau Açominas is expected to open a new 800,000 metric ton mill in

2012.227 Companhia Siderurgica Suape is expecting to open a new *** mill. Although the mill was

originally scheduled to open in 2014, the company has indicated ***.228 We observe, however, that new

steel mills typically do not produce at their rated capacity from the time they open; instead, one to three

year ramp-up periods are anticipated before the new Brazilian mills could produce at full capacity.229

While the existence of unused and additional capacity makes some increase in subject imports

from Brazil possible upon revocation, other factors support a conclusion that any such increase would be

small. Brazilian producers are heavily focused on supplying their home market and we find this focus is

likely to continue in the reasonably foreseeable future. With respect to the industry as a whole, during

each year of the period of review, the percentage of the Brazilian industry’s shipments directed to the

home market was at least 87.9 percent, and in 2010 was 92.7 percent.230 During the period of review, hotrolled steel prices in Brazil were consistently higher, often by substantial amounts, than hot-rolled steel

prices in North America.231 This would indicate that there would be no economic incentive for Brazilian

producers to shift to the United States production that they currently direct towards the home market.232

In addition to favorable prices in Brazil, demand for hot-rolled steel there is projected to increase in the

reasonably foreseeable future. While *** predicts a *** decline in hot-rolled steel consumption in Brazil

in 2011,233 it projects a *** percent increase in consumption in 2012, the first year that the new hot-rolled

 225 CR/PR, Table IV-7.

 226 CR at IV-14, PR at IV-11. Usiminas reports that approximately *** of the new capacity is intended to ***. 

Id.

 227 CR at IV-14, PR at IV-11.

 228 CR at IV-14, PR at IV-11; AMUSA Posthearing Brief, ex. 7.

 229 See CR at IV-14, PR at IV-11.

 230 CR/PR, Table IV-7. In light of the statement of a senior ArcelorMittal official that ArcelorMittal Brasil will

not be permitted to export hot-rolled steel to the U.S. market upon revocation, Tr. at 96 (Mull), we have also

separately examined the data of CSN and Usiminas, the two Brazilian producers that do have the potential to direct

exports to the United States. These firms have an even stronger orientation to supplying the home market than the

industry as a whole. In 2009 and 2010 respectively, *** percent of these firms’ shipments were directed to the home

market. CSN and Usiminas Foreign Producers’ Questionnaires.

 231 CR/PR, Table IV-26. Additionally, the average unit values that Brazilian producers reported for home market

shipments were *** higher than the average unit values these producers reported for export shipments throughout the

period of review. CR/PR, Table IV-7.

 232 Domestic Producers argue that CSN will have an incentive to export hot-rolled steel instead of slab to its

affiliated U.S. production operation, CSN LLC, for use as an input in its cold-rolling and hot-dip galvanizing

operation. AMUSA Prehearing Brief at 15-16; Nucor Prehearing Brief at 12. Even assuming arguendo this is true,

it is not likely to result in significant import quantities. During the six years of the period of review, CSN’s exports

of slab to CSN LLC amounted to *** short tons, or less than *** short tons per year. CR at IV-12 n.25, PR at IV-10

n.25. CSN LLC has indicated that *** even if the orders are revoked. CR at D-10, PR at D-1.

 233 CR/PR, Table IV-22-23. Most of the projected decline is attributable to the first half of the year. See ***

(Apr. 2011), EDIS Doc. No. 450537, table S.11. Brazilian authorities, by contrast, project growth in Brazilian GDP,

as well as growth in Brazilian steel-consuming industries, in 2011. Brazilian Respondents Posthearing Brief, app. at

17, 39.

37
steel capacity in Brazil will begin production in appreciable quantities.234 This increase in consumption

renders it unlikely that the additional capacity will serve to force Brazilian producers to direct significant

additional quantities of shipments to export markets during 2011-12 notwithstanding their lack of heavy

export orientation during the period of review.235

Additionally, during the period of review Brazilian producers exhibited a relatively stable pattern

of shipments to different export markets, with no history of large shifts. The record indicates that during

the period of review, Brazil shipped appreciable quantities of hot-rolled steel to a number of different

export markets.236 Canada is the only country other than the United States that now imposes antidumping

duties on hot-rolled steel from Brazil.237 Nevertheless, the record does not indicate any pattern of surges

in exports to particular markets during the period of review by exporters likely to direct shipments to the

United States upon revocation, even during periods when there was unused capacity. Indeed, export

shipments declined in four of the five annual comparisons during the period of review. The largest

increase in exports to any particular destination was a *** short ton increase in exports to Asia between

2008 and 2009.238 This, however, was largely attributable to ***.239 In this respect we emphasize that,

going back to the original period of investigation, the U.S. market has never experienced any sharp surges

of subject imports from Brazil. The largest annual increase in such imports since 1996 occurred between

1996 and 1997, during the original period of investigation, amounted to 182,519 short tons, and increased

Brazil’s market penetration by only 0.2 percentage points.240 In light of this history, and the fact that

subject imports from Brazil are now essentially absent from the U.S. market, as they have been since

2001,241 we find that the type of rapid increase that would be needed to bring subject imports from Brazil

to significant levels in the reasonably foreseeable future is unlikely.

Although we find that the Brazilian industry’s unused capacity and projected capacity increases

make some increase in subject imports from Brazil possible upon revocation, any such increase would

likely be modest. The strong home market orientation of both the Brazilian industry as a whole and those

producers likely to export to the United States, the economic incentives of directing hot-rolled steel

shipments to the home market, rather than the United States, and the lack of any history of import surges

either to any market during the period of review or to the United States at any time since 1996, all support

our finding that the volume of subject imports from Brazil would not be significant upon revocation.242

 234 CR/PR, Table IV-23, CR at IV-14, PR at IV-11.

 235 Domestic Producers contend that Brazilian producers will be motivated to seek export markets, despite any

orientation to the home market, because of increasing competition from imports in the Brazilian market, as well as

increasing intra-industry competition. See AMUSA Prehearing Brief at 12-13; U.S. Steel Prehearing Brief at 72-73. 

We do not agree. Initially, the record does not indicate that the current competitive environment in Brazil has served

to depress hot-rolled steel prices there. To the contrary, the record indicates that 2010 hot-rolled steel prices in

Brazil were near period peaks, in contrast to the situation in the United States and other world markets. CR/PR,

Tables IV-25-26. Moreover, since 2009 Brazil has raised the tariff on hot-rolled steel imports from zero to 12

percent and has imposed minimum customs values. Nucor Posthearing Brief at 9; Brazilian Respondents

Posthearing Brief, app. at 37.

 236 CR/PR, Table IV-7.

 237 CR at IV-15, PR at IV-12.

 238 CR/PR, Table IV-7.

 239 See *** Foreign Producers’ Questionnaire, response to question II-8 (EDIS Doc. 449662).

 240 CR/PR, Table I-1.

 241 CR/PR, Table I-1.

 242 In our examination of likely subject import volume, we have also examined several other considerations.

We examined inventories of the subject merchandise. In 2010, there were *** end-of-period inventories of

subject merchandise from Brazil in the United States. CR/PR, Table IV-3. While end-of-period inventories of

(continued...)

38
2. Likely Price Effects of Subject Imports

We incorporate by reference our discussion in section V.D.2. above concerning the importance of

price in purchasing decisions. Purchasers did not perceive substantial quality distinctions between the

domestic like product and subject imports from Brazil. A majority of purchasers reported that the

domestic like product and subject imports from Brazil were comparable in the factor of overall quality

meets industry standards.243 Additionally, purchasers were asked whether they required seven specific

quality factors in the hot-rolled steel that they purchased, and if so, whether they would continue

purchasing hot-rolled steel from different sources. Substantial majorities stated, with respect to each

factor, that they would purchase hot-rolled steel from domestic sources and from Brazil.244

We incorporate by reference our discussion in section V.D.2. concerning pricing trends for the

domestic like product observed during the period of review. There was only one pricing observation

reported for subject imports from Brazil.245 In that observation, the subject imports oversold the domestic

like product.246 In the original investigations, subject imports from Brazil undersold the domestic like

product in 36 observations and oversold the domestic like product in 22 observations. Over the 58

comparisons, there was an average underselling margin of 1.4 percent.247

We have previously found that there could be some increase in subject imports from Brazil upon

revocation of the orders under review, but that this would serve only modestly to increase the nearly nonexistent quantities of subject imports from Brazil present in the U.S. market throughout the period of

review. Even should these additional imports be priced in the same manner as the imports from Brazil

during the original period of investigation, this would result in a mixed incidence of overselling and

underselling. In light of the modest potential amounts of subject imports from Brazil and projected growth

in U.S. demand, this is unlikely to have significant price effects. We find at the likely prevailing

volumes, any underselling by subject imports from Brazil would likely not be significant, and would be

unlikely to have significant price-depressing and -suppressing effects.

 242 (...continued)

subject merchandise in Brazil reached a period peak in 2010, increasing *** from 2009 levels, CR/PR, Table IV-7,

Brazilian Respondents reported that this was a temporary phenomenon and an industry trade publication reported

that inventory levels had declined during the first two months of 2011. Brazilian Respondents Prehearing Brief at

32, ex. 1 (Steel Business Briefing article on “Brazil sees ends of flats destocking”). The available information on

inventories does not detract from our conclusion that significant subject import volumes are not likely upon

revocation.

We also examined the potential for product shifting. During the period of review, Brazilian producers

produced only very small quantities of nonsubject products in the same hot-strip mills at which they produce subject

hot-rolled steel. CR/PR, Table IV-8. Brazilian producers additionally internally consume some quantities of the

subject merchandise they produce for further processing into downstream products. CR/PR, Tables IV-7-8. As we

explained in section V.D.3 above, the record contains no information suggesting why hot-rolled steel producers

would have an economic incentive to shift production from higher-valued nonsubject products to the subject

merchandise. 

 243 CR/PR, Table II-7.

 244 CR/PR, Table II-6.

 245 CR at V-22, PR at V-10.

 246 CR/PR, Table V-6.

 247 Original Japan Determinations, USITC Pub. 3202 at V-15.

39
3. Likely Impact of Subject Imports248

We incorporate by reference our discussion in section V.D.3. above concerning the current

condition of the domestic industry, as well as our findings that the domestic industry is not currently

vulnerable and that improvements in the condition of the domestic industry during the first four years of

the period of investigation are not significantly related to the existence of the orders under review.

In view of our findings regarding the likely volume and price effects of subject imports from

Brazil, we conclude that subject imports from Brazil would not be likely to have a significant adverse

impact on the domestic industry’s output, sales, market share, profits, or return on investments if the

orders are revoked. In light of projected demand growth for hot-rolled steel in the United States, the

modest additional volumes of subject imports from Brazil likely upon revocation should be insufficient to

take any significant market share from the domestic industry. Moreover, because these imports are

unlikely to have significant price effects, they are unlikely to cause any significant diminution in the

domestic industry’ revenues or financial performance.249 We accordingly determine that revocation of the

antidumping and countervailing duty orders on subject imports from Brazil is unlikely to lead to the

continuation or recurrence of material injury to the domestic industry within a reasonably foreseeable

time.

F. Revocation of the Antidumping Duty Order on Subject Imports from Japan Is Not

Likely to Lead to Continuation or Recurrence of Material Injury to the Domestic

Industry within a Reasonably Foreseeable Time

1. Likely Volume of Subject Imports

Subject imports from Japan maintained a steady and very small presence in the U.S. market

during the period of review. The quantity of subject imports from Japan was 5,009 short tons in 2005,

then increased during the next three years, reaching a period peak of 15,577 short tons in 2008. Subject

imports from Japan then declined to 9,053 short tons in 2009 before increasing to 15,033 short tons in

2010.250 Throughout the period of review, subject imports from Japan accounted for 0.1 percent or less of

apparent U.S. consumption.251 

We acknowledge that Japanese producers have the ability to increase exports. In 2010, the

capacity utilization of the Japanese industry was 91.3 percent; during the period of review, reported

capacity utilization has been as high as 97.8 percent. We further acknowledge that the Japanese

industry’s reported excess of capacity over production in 2010 exceeded 5.1 million short tons – a

 248 Commerce conducted an expedited second five-year review with respect to the antidumping duty order on

subject imports from Brazil. It found likely margins ranging from 41.27 percent to 43.40 percent for three named

exporters and an all others rate of 42.12 percent. 75 Fed. Reg. 47541, 47543 (Aug. 6, 2010). 

Commerce conducted a full five-year review with respect to the countervailing duty order on subject

imports from Brazil. It made an affirmative determination on likely subsidies but found zero margins for all named

exporters and for all others. 75 Fed. Reg. 75455, 75457 (Dec. 3, 2010). Commerce determined that while

countervailable benefits had been allocated (resulting in the zero margins), revocation of the order was not

appropriate because the subsidy programs had not been terminated. See Issues and Decision Memorandum from

Susan H. Kuhbach to Ronald K. Lorentzen (Nov. 29, 2010).

 249 In this respect, we have considered that it is undisputed that the subject imports and the domestic like product

will be competing in the merchant market.

 250 CR/PR, Table IV-1.

 251 This was true in both the total market and the open market. CR/PR, Tables I-14-15.

40
substantial quantity.252 None of the responding Japanese producers reported any anticipated changes in

their hot-rolled steel operations.253

The industry in Japan has a substantial export orientation. During the period of review, reporting

producers’ total exports constituted between *** percent of their annual shipments, and between ***

percent of annual commercial shipments.254 This export orientation is likely to continue, as *** projects

hot-rolled steel consumption in Japan in 2011 and 2012 to be below the levels of 2010.255

We observe, however, that throughout the period of review, Japan’s exports have been

consistently and overwhelmingly focused on the Asian market. The percentage of export shipments

reporting Japanese producers directed to Asian markets ranged between *** percent on an annual basis

during the period of review.256

We find that the Japanese producers’ strong focus on Asian export markets is likely to continue in

the reasonably foreseeable future. The Asian market is now the world’s largest market for hot-rolled

steel; according to ***, in 2010 consumption of hot-rolled steel in East and Southeast Asia was ***

greater than consumption in North America.257 Moreover, *** projects that the robust growth in hotrolled steel consumption that occurred in East and Southeast Asia during the period of review will

continue into the reasonably foreseeable future.258 This is in distinct contrast to the circumstances in the

original period of investigation. In 1998, because of a financial crisis in Asia, hot-rolled steel

consumption dropped sharply in East and Southeast Asia while it continued to increase in North America;

during that year, consumption of hot-rolled steel in East and Southeast Asia was only *** that of North

America.259 The size, projected dynamic growth, and proximity to Japan of the Asian market provides a

strong incentive for Japanese producers to continue to direct their shipments, as well as any unused

capacity, to that market, rather than the smaller and less quickly growing U.S. market.

Moreover, Japanese producers have significant long-term relationships with customers in their

Asian export markets. Japanese Respondents have documented that the *** of their 2010 exports to

Asian markets were to customers in which they have investments or with which they have joint venture

 252 CR/PR, Table IV-11.

 253 CR at IV-24, PR at IV-17.

 254 CR/PR, Table IV-11.

 255 CR/PR, Tables IV-22, IV-23. The parties were asked to brief the likely effects of March 11, 2011 earthquakes

and subsequent tsunami on likely Japanese demand for hot-rolled steel. Domestic Producers and Japanese

Respondents provided disparate projections, but agreed that “it is difficult to conclusively address the implications of

the situation in Japan for its steel industry,” U.S. Steel Prehearing Brief at 63, “[t]he issue that remains uncertain is

what effect this disaster will have on demand for steel in Japan as well as globally,” AMUSA Posthearing Brief, ex.

1 at 37, and “[t]he consequence of reconstruction-related demand on the Japanese hot-rolled steel industry cannot yet

be estimated with any precision.” Japanese Respondents Posthearing Brief, app. at 15. In light of these

acknowledged uncertainties, our analysis neither projects nor relies upon the likely effects of the disasters. 

Consequently, the record does not support a finding that the disasters are likely to have significant effects either on

Japanese demand for hot-rolled steel or on exports to the United States.

 256 CR/PR, Table IV-11.

 257 CR/PR, Table IV-22. In contrast to other major world regions, hot-rolled steel consumption in East and

Southeast Asia increased from 2008 to 2009. Id. Japanese exports also increased from 2008 to 2009, in substantial

part because of increased exports to Asia. CR/PR, Table IV-11. Thus, U.S. Steel’s contention that during the period

of review the Japanese industry increased exports notwithstanding poor demand conditions, U.S. Steel Prehearing

Brief at 68, does not accurately reflect the record, as growing exports typically coincided with growing consumption.

 258 CR/PR, Tables IV-22-23.

 259 CR at IV-42 n.56, PR at IV-29 n.56; ***.

41
agreements or other memoranda of understanding, or which are long-term customers.260 It is true, as

Domestic Producers argue in their Final Comments, that the record does not indicate that these

arrangements are tantamount to contractual commitments to purchase fixed quantities of Japanese hotrolled steel.261 Nevertheless, the existence of numerous such long-term arrangements indicates that

Japanese producers would likely continue to focus on maintaining and increasing supplies to these

customers, rather than to direct their efforts to supplying the U.S. market, where sales are predominantly

on the spot market.

This is particularly true because the Japanese producers achieved strong growth in their Asian

export markets during the period of review. During the period of review, exports of hot-rolled steel from

Japan to Asia increased from *** short tons in 2005 to *** short tons in 2010. Exports to Asia increased

during every annual comparison but one. Exports to Asia showed *** growth in 2010, increasing by ***

short tons.262 We find that the trend in growth of exports to Asia is likely to continue in the reasonably

foreseeable future, given the continuing nature of many of the Japanese industry’s customer-supplier

relationships and projected growth in Asian markets.263

In addition to the Japanese industry’s strong focus on Asian export markets, and likely continued

growth in supplying these markets, there are several other reasons why we find that a significant increase

in the volume of subject imports from Japan is not likely upon revocation. Initially, we observe that the

pattern of sharp increases in subject imports from Japan that occurred during the original period of

investigation is unlikely to recur because of the significant changes in conditions of competition. As

previously discussed, during the original investigations, demand in Asia plummeted due to a financial

crisis while demand continued to grow in the United States.264 By contrast, during the period of review

demand in East and Southeast Asia grew at a considerably greater rate in both absolute and relative terms

than the United States, and this pattern of demand growth is likely to continue in the reasonably

foreseeable future.265

Second, while Japanese exports to non-Asian markets, particularly those outside the United States

and the EU, did increase on both a relative and absolute basis during the period of review, those increases

have been gradual and the record does not indicate that the Japanese industry has made sudden shifts into

individual non-Asian markets, even at those times when it had substantial excess capacity. The record

indicates that the largest annual increase in Japanese exports to any individual non-Asian market occurred

in Mexico from 2005 to 2006, when exports increased by *** metric tons.266 This figure is equivalent to

 260 Japanese Respondents Posthearing Brief at 7, ex. 6; Japanese Respondents Prehearing Brief, ex. 3.

 261 This is illustrated by the sample Memorandum of Understanding that Japanese Respondents submitted. The

memorandum ***. See attachment to electronic mail message from Christopher Wood to Nathanael Comly (Apr.

27, 2011).

 262 CR/PR, Table IV-11.

 263 By contrast, the record fails to support Domestic Producers’ hypothesis that projected growth in production in

Asian markets outside Japan will displace Japanese producers from Asian export markets. Indeed, after 2006, hotrolled sheet production consistently exceeded hot-rolled sheet consumption in East and Southeast Asia. *** (April

2011), EDIS Doc. No. 450537, Tables S.15, S.25. Notwithstanding this, as explained above, during the period of

review Japanese exports were not displaced from Asian export markets. To the contrary, they displayed strong

growth. The record provides no indication that this pattern is likely to change, particularly because *** does not

project surplus production in East and Southeast Asia for 2011 and 2012 in quantities materially exceeding those

during the period of review. Id.

 264 See also, e.g., Steel, Inv. No. TA-201-73, USITC Pub. 3479 at 56-58 (Dec. 2001).

 265 CR/PR, Tables IV-22-23.

 266 Nucor Prehearing Brief, ex. 5. This is based on Japanese official export data covering a somewhat broader

product scope than the subject merchandise. There were also increases in exports from 2009 to 2010 to several

(continued...)

42
only *** percent of 2010 apparent U.S. consumption.267 This consideration provides further support for

our conclusion that, to the extent that Japanese producers do increase exports to the United States

notwithstanding their historic and likely continued focus on Asian export markets, any such increase is

unlikely to be significant.

Third, a review of the data on the record on world market prices does not support the conclusion

that prices for hot-rolled steel in the United States are so consistently higher than prices in other export

markets that Japanese producers would have a strong motivation to divert significant additional quantities

of hot-rolled steel from the Asian export markets on which they focus to the United States. While the

record contains reports that, for the most recent periods, United States prices for hot-rolled steel exceed

those in other major export markets, this has not been consistently true throughout the period of review,

or even for fairly recent periods.268 For example, *** reports that the U.S. price was less than or no more

than *** per short ton greater than the Far East import price for each month between August and

November 2010.269 Similarly, MEPS reports that the U.S. price was less than or no more than $11 per

short ton greater than the Taiwan price during this same period.270

Fourth, the only trade remedy order to which hot-rolled steel from Japan is currently subject is an

antidumping duty order from Thailand.271 Thailand’s order is subject to several exceptions and has not

deterred Japanese exports to that country.272

The Japanese industry’s heavy focus on Asian markets which have been and likely will continue

to be areas of further export growth, the absence of large annual increases in Japanese exports to

individual non-Asian markets during the period of review, and the lack of a consistent U.S. price

advantage all support our conclusion that, despite the presence of unused capacity, any likely increase in

subject imports from Japan upon revocation would be relatively small in the context of the U.S. market. 

Because subject imports from Japan are currently present in the market in only very small quantities, we

conclude that likely subject import volume would not be significant upon revocation.273

 266 (...continued)

different Latin American countries in a range between *** and *** metric tons. Id. *** estimates that from 2009 to

2010, hot-rolled steel consumption in Latin America increased by *** percent. CR/PR, Table IV-22.

 267 See CR/PR, Table I-14.

 268 See CR/PR, Figure IV-2. Because these data are based on comparable products, we rely on them instead of

the average unit value information reported in the foreign producers’ questionnaires, which may be affected by

variations in product mix between different export markets.

 269 CR/PR, Table IV-25.

 270 CR/PR, Table IV-24. By contrast, Japanese Respondents introduced evidence indicating that ocean freight

rates to the United States were at least *** per metric ton greater than ocean rates to a Far East port in 2010. 

Japanese Respondents Prehearing Brief, ex. 5.

 271 Hot-rolled steel from Japan is the subject of a current antidumping duty investigation in Pakistan. CR at IV25, PR at IV-18.

 272 See CR at IV-24-25, PR at IV-18; Nucor Prehearing Brief, ex. 5.

 273 In our examination of likely subject import volume, we have also examined several other considerations.

We examined inventories of the subject merchandise. In 2010, the quantity of end-of-period inventories of

subject merchandise from Japan in the United States was at a very low level. CR/PR, Table IV-3. Throughout the

period of review, inventories of subject merchandise in Japan were at low and relatively stable levels relative to

production or shipments. CR/PR, Table IV-11. The available information on inventories supports our conclusion

that significant subject import volumes are not likely upon revocation.

We also examined the potential for product shifting. Japanese producers do make nonsubject products in

the same hot-strip mills at which they produce subject hot-rolled steel. CR/PR, Table IV-12. These nonsubject

products are principally higher valued products such as cut-to-length plate or alloy hot-rolled steel. CR at IV-29, PR

(continued...)

43
2. Likely Price Effects of Subject Imports

We incorporate by reference our discussion in section V.D.2. above concerning the importance of

price in purchasing decisions. Purchasers did not perceive substantial quality distinctions between the

domestic like product and subject imports from Japan. A majority of purchasers reported that the

domestic like product and subject imports from Japan were comparable in the factors of overall quality

meets industry standards and overall quality exceeds industry standards.274 Additionally, purchasers were

asked whether they required seven specific quality factors in the hot-rolled steel that they purchased, and

if so, whether they would continue purchasing hot-rolled steel from different sources. Substantial

majorities stated, with respect to each factor, that they would purchase hot-rolled steel from domestic

sources and from Japan.275

We incorporate by reference our discussion in section V.D.2. concerning pricing trends for the

domestic like product observed during the period of review. There were 14 quarterly pricing observations

for subject imports from Japan, accounting for 6.1 percent of reported U.S. shipments of such

merchandise.276 The observations concerned only one of the four pricing products, and covered the

period from January 2005 to June 2008. Prices for subject imports from Japan rose from the first quarter

of 2005 to the first quarter of 2006, and then fluctuated in a narrow range during the remaining period for

which there are observations.277 The subject imports from Japan oversold the domestic like product by

very high margins in all 14 observations.278 

There is no history of pervasive underselling by subject imports from Japan.279 In the original

investigations, subject imports from Japan undersold the domestic like product in 23 observations and

oversold the domestic like product in 39 observations. Although there were slightly more occurrences of

underselling than overselling by subject imports from Japan in 1998 (13 out of 24 observations), this was

due to increased shipments of commodity products during a time when subject imports surged into the

United States due to the Asian financial crisis, an occurrence we have found is unlikely to recur in the

reasonably foreseeable future.280 During the first reviews, subject imports from Japan undersold the

domestic like product in two observations and oversold it in two observations.281

In light of our finding that likely subject import volume would not be significant, and the historic

pattern of pricing of subject imports from Japan, which even during the original period of investigation

 273 (...continued)

at IV-20. Japanese producers additionally internally consume some of the subject merchandise they produce into

downstream products. CR/PR, Tables IV-11-12. As we explained in section V.D.3 above, the record contains no

information suggesting why hot-rolled steel producers would have an economic incentive to shift production from

higher-valued nonsubject products to the subject merchandise. 

 274 CR/PR, Table II-7.

 275 CR/PR, Table II-6.

 276 CR at V-13, PR at V-9-10.

 277 CR/PR, Table V-4.

 278 CR/PR, Table V-6. The importer that supplied the pricing data indicated that the subject imports from Japan

were ***. CR at V-24 n.18, PR at V-16 n.18.

 279 Our price effects analysis focuses on historic and likely pricing in the United States. See 19 U.S.C. §

1675a(a)(3). In light of this, Nucor’s arguments concerning Japanese exporters’ purportedly aggressive pricing

behavior in Latin American markets, Nucor Posthearing Brief, ex. 1 at 15-16, are not relevant to our statutory

inquiry.

 280 Original Japan Determinations, USITC Pub. 3202 at 15, V-15.

 281 First Five-Year Review Determinations, USITC Pub. 3767, Table V-7.

44
were more likely to oversell than undersell the domestic like product, we find that significant underselling

by subject imports from Japan is unlikely if the order is revoked. Because of the lack of either likely

significant volumes or likely significant underselling, we further find that upon revocation subject imports

from Japan are also not likely to have significant price-depressing or -suppressing effects.

3. Likely Impact of Subject Imports282

We incorporate by reference our discussion in section V.D.3. above concerning the current

condition of the domestic industry, as well as our findings that the domestic industry is not currently

vulnerable and that improvements in the condition of the domestic industry during the first four years of

the period of investigation are not significantly related to the existence of the orders under review.

In view of our findings regarding the likely volume and price effects of subject imports from

Japan, we conclude that subject imports from Japan would not be likely to have a significant adverse

impact on the domestic industry’s output, sales, market share, profits, or return on investments if the

orders are revoked. In light of projected demand growth for hot-rolled steel in the United States, the

relatively small additional volumes of subject imports from Japan likely upon revocation should be

insufficient to take any significant market share from the domestic industry. Moreover, because these

imports are unlikely significantly to undersell the domestic like product or have other significant price

effects, they are unlikely to cause any significant diminution in the domestic industry’ revenues or

financial performance.283 We accordingly determine that revocation of the antidumping duty order on

subject imports from Japan is unlikely to lead to the continuation or recurrence of material injury to the

domestic industry within a reasonably foreseeable time.

CONCLUSION

For the foregoing reasons, we determine that termination of the suspended investigation from

Russia would be likely to lead to continuation or recurrence of material injury to the domestic industry

within a reasonably foreseeable time. We determine that revocation of the antidumping and

countervailing duty orders on subject imports from Brazil, and revocation of the antidumping duty order

on subject imports from Japan, would not be likely to lead to continuation or recurrence of material injury

to the domestic industry within a reasonably foreseeable time.

 282 Commerce conducted an expedited second five-year review with respect to the order on subject imports from

Japan. It found likely margins ranging from 17.70 percent to 40.26 percent for three named exporters and an all

others rate of 22.92 percent. 75 Fed. Reg. 47541, 47543 (Aug. 6, 2010). 

 283 In this respect, we have considered that it is undisputed that the subject imports and the domestic like product

will be competing in the merchant market.

45

SEPARATE AND DISSENTING VIEWS OF COMMISSIONERS 

CHARLOTTE R. LANE AND DEAN A. PINKERT

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

duty order on hot-rolled flat-rolled carbon-quality steel products (“hot-rolled steel”) from Brazil, the

antidumping duty orders on hot-rolled steel from Brazil and Japan, and termination of the suspended

investigation on hot-rolled steel from Russia (“revocation/termination”) would be likely to lead to the

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

foreseeable time. We join our colleagues’ findings with respect to the domestic like product, domestic

industry, legal standards, conditions of competition, discernible adverse impact, and likely reasonable

overlap of competition. As noted in the majority opinion, however, we have exercised our discretion to

cumulate imports from all subject countries for purposes of assessing the likelihood of continuation or

recurrence of material injury upon revocation/termination. We write separately to explain our conclusion

that revocation/termination would be likely to lead to the continuation or recurrence of material injury to

the domestic industry within a reasonably foreseeable time. 

Revocation of the Orders on Brazil and Japan and Termination of the Suspended Investigation on

Russia Are Likely to Lead to Continuation or Recurrence of Material Injury to the Domestic

Industry

Likely Volume of Subject Imports:

In the original investigations, the Commission found that cumulated subject import volume

increased steadily from 1.3 million short tons in 1996 to 7.0 million short tons in 1998. The market share

of these imports rose from 2.0 percent in 1996 to 9.3 percent in 1998, an increase of 7.3 percentage

points. During the same period, the market share of domestic production declined from 92.3 percent to

84.8 percent, a decrease of 7.5 percentage points that was almost entirely due to the increased market

penetration of the cumulated subject imports from Brazil, Japan, and Russia. After the orders and

suspension agreement came into effect, subject imports dropped significantly. From 1999 through the

current period of review, cumulated subject imports were much lower than during the original period of

investigation.1

 

During the current period of review, the volume and market share of cumulated subject imports

from Brazil, Japan, and Russia, under the discipline of the orders and suspension agreement, fluctuated

but remained at relatively low levels similar to those during the first period of review. Specifically,

cumulated subject imports ranged from a low of 10,909 short tons in 2009 to a high of 803,320 short tons

in 2006.2

 Cumulated subject import volume in 2010 was 140,624 short tons.3 The market share of these

subject imports fluctuated between a high of 1.1 percent in 2006 and a low of near 0.0 percent in 2009,

ending at 0.3 percent in 2010.4

 Considering the level of subject imports during the original period of

investigation and their greatly reduced level after the orders and suspension agreement came into effect,

the record indicates that the orders and suspension agreement have led to a reduced presence of subject

imports in the United States.

 1 CR/PR, Table I-1. 

 2

 CR/PR, Table C-1.

 3

 CR/PR, Table C-1.

 4

 CR/PR, Table C-1.

47
In evaluating the likely volume of imports of subject merchandise upon revocation/termination,

the Commission is directed to consider whether the likely volume of imports would be significant either

in absolute terms or relative to production or consumption in the United States.5

 In doing so, the

Commission must consider “all relevant economic factors,” including any likely increase in production

capacity or existing unused production capacity in the exporting countries, inventories of the subject

merchandise, the existence of barriers to the importation of the subject merchandise into countries other

than the United States, and the potential for product shifting from other products to the subject product.6

Numerous factors indicate that subject producers are likely to increase exports to the United

States to a significant level if the orders are revoked and the suspended investigation is terminated. 

Capacity in the subject countries has increased significantly since the original investigations. Capacity in

Brazil increased from 10.5 million short tons in 1998 to more than 15.8 million short tons in 2010.7

Capacity in Japan increased from 53.8 million short tons in 1998 to 59.2 million short tons in 2010.8

Capacity in Russia increased from 21.2 million short tons in 1998 to 23.3 million short tons in 2010.9

The cumulated subject producers’ capacity of 98.3 million short tons in 2010 was nearly two times the

apparent U.S. consumption of 56.1 million short tons.10

Subject producers can ship additional hot-rolled steel to the U.S. market. Excess production

capacity in the subject countries is estimated to have totaled 9.6 million short tons in 2010,11 equivalent to

17.1 percent of the U.S. market in 2010. Moreover, subject country producers have plans to significantly

expand production capacity within a reasonably foreseeable time, 12 and end-of-period inventories were at

their highest level of the review period in 2010.13

 5 19 U.S.C. § 1675a(a)(2). 

 6

 19 U.S.C. § 1675a(a)(2)(A-D). 

 7

 CR/PR, Table IV-7; USITC Pub. 3202 at Table VII-1. 

 8

 CR/PR, Table IV-11; USITC Pub. 3202 at Table VII-2. 

 9

 CR/PR, Table IV-15; USITC Pub. 3202 at Table VII-3. 

 10 CR/PR, Table C-1. 

 11 The countries’ unused capacities are 1.5 million short tons for Brazil (see CR/PR, Table IV-7), 5.2 million

short tons for Japan (see CR/PR, Table IV-11), and 3.0 million short tons for Russia (see CR/PR, Table IV-15).

 12 In 2010, ArcelorMittal Brasil began ramping up expanded hot strip mill capacity at its Tubarão facility, which

has a rated capacity of *** metric tons, an increase from a *** metric ton capacity at that mill. ArcelorMittal Brasil

reports that the new capacity will be fully online in ***. CR at IV-13, note 27; PR at IV-11, note 27. A senior

ArcelorMittal official testified that ArcelorMittal Brasil will not export subject merchandise to the U.S. market. Tr.

at 96 (Mull). We find that ArcelorMittal Brasil’s new capacity will likely put pressure on other Brazilian producers

to sell their hot-rolled steel in the large and open U.S. market if the orders on Brazil were revoked. 

Brazilian producer Usiminas is finalizing the installation of a new *** hot strip mill at its Cubatão facility,

approximately *** of which is reported to be ***, with installation expected to be complete in *** and capacity

expected to ramp up during the *** time frame. New entrant Gerdau Açominas is expected to bring an 800,000

metric ton facility online beginning in 2012, which will ramp up through 2015. Companhia Siderurgica Suape is

expected to bring a *** metric ton facility online, although it is unclear whether the plant will come online beginning

in 2014 or earlier in 2012, CR at IV-14, PR at IV-11; AMUSA Posthearing Brief, Exhibit 7. 

Russian producer NLMK reported plans to increase hot-rolled steel capacity by *** short tons by 2012. 

Additional expansions reportedly were completed in 2010 by OMK Steel, which did not complete a questionnaire

(***). CR/PR, IV-33. None of the responding Japanese producers reported any plans to increase capacity; however,

Tokyo Steel, a smaller producer with limited downstream operations that did not respond to the Commission’s

questionnaires, reportedly commissioned a new hot-rolled steel facility in Tahara in 2010. CR at IV-24; PR at IV17. 

 13 CR/PR, Tables IV-7, IV-11, and IV-15. 

48
The industries in the subject countries, in aggregate, are export oriented to a substantial degree,14

with exports accounting for roughly *** percent of shipments of the combined industries in 2010.15

Equally important, subject producers have demonstrated an ability to compete in the United States at

varying volume levels, to increase production, and to shift large volumes relatively quickly from market

to market (switching back and forth from captive to open markets, from the home market to export

markets, and from one export market to another).16

The United States is one of the most attractive markets due to its size, openness, and relatively

high prices. Hot-rolled steel is produced to well-known ASTM specifications and is highly

interchangeable from different sources. U.S. importers and service centers have shown themselves to be

ready and able to source foreign-produced steel and to be capable of increasing their acquisition of it with

little delay.17 

U.S. prices for hot-rolled steel were higher than those of most of the subject countries’ major

export markets throughout the period of review.18 As noted earlier, contrary to Respondents’ arguments,

 14 The export orientation of Brazilian producers is more moderate than that of producers in Japan or Russia. 

Brazilian producers’ exports fluctuated over the period of review between 519,182 short tons and 1.6 million short

tons, accounting for between 3.8 percent and 12.1 percent of the producers’ total shipments. Those exports,

however, accounted for significantly higher percentages of Brazilian producers’ total open market shipments

(ranging between *** percent), because only *** of total shipments were to the open market. CR/PR, Table IV-7. 

The Brazilian producers thus have at least a moderate export orientation. 

Japanese producers’ exports fluctuated over the period of review between *** short tons in 2005 and ***

short tons in 2010, accounting for between *** percent and *** percent of the producers’ total shipments. CR,

Table IV-11. Internal consumption by the Japanese producers was relatively stable at approximately 60 percent of

overall shipments. CR at IV-24; PR at IV-17. Japanese producers’ exports constituted between *** and *** percent

of their annual commercial shipments. CR, Table IV-11

Russian producers’ exports fluctuated over the period of review between 4.7 million short tons and 7.3

million short tons, accounting for between 24.3 percent and 37.4 percent of the producers’ total shipments. CR/PR,

Table IV-15. Internal consumption by Russian producers accounted for approximately half of the Russian industry’s

total shipments. Russian producers’ exports constituted between 53.0 and 70.5 percent of their annual commercial

shipments. CR, Table IV-15. 

 15 This percentage is based on cumulated subject country total shipments of 87.6 million short tons and exports of

*** million shorts tons. Specifically, Brazilian producers’ total shipments were 13.7 million short tons in 2010, 1.0

million short tons of which were exports. CR/PR, Table IV-7. Japanese producers’ total shipments were 53.6

million short tons in 2010, *** short tons of which were exports. CR/PR, Table IV-11. Russian producers’ total

shipments were 20.3 million short tons in 2010, 6.1 million short tons of which were exports. CR/PR, Table IV-15.

 16 Subject producers reduced their exports to the United States dramatically following the issuance of the orders

and suspension of the Russian investigation. CR/PR, Table I-1. Subject producers’ exports fluctuated broadly

among export markets during the current period of review. E.g., CR/PR, Table IV-7 (Brazilian exports to the EU

ranged from *** to *** short tons, to Asia from *** to *** short tons, and to all other markets from *** to *** short

tons), Table IV-11 (Japanese exports to the United States ranged from *** to *** short tons, to the EU from ***

short tons, to Asia from *** to *** short tons, and to all other markets from *** to *** short tons), and Table IV-15

(Russian exports to the United States ranged from a high of *** short tons in 2006 to a low of *** short tons in

2009, to the EU from *** short tons to *** short tons, to Asia from *** to *** short tons, and to all other markets

from *** to *** short tons).

 17 See, e.g., CR/PR Appendix D, responses from ***. 

 18 CR/PR, Tables IV-24 and IV-25. Although we recognize that average unit value (AUV) data can be affected

by product mix, we have taken AUV data into account here because we have limited pricing comparison data

available to us in these reviews. 

Japanese producers’ AUVs for exports to the United States were higher than those for Japanese home

market shipments and exports to the European Union, Asia, and all other markets in every year of the period of

49
Japanese producers have a price incentive to sell in the U.S. market rather than to Asian customers. They

are not prevented from doing so by their memoranda of understanding with downstream processors in

Asia because those memoranda are ***.19 Given that subject producers have significant excess capacity,

they have an incentive to ship significant volumes of hot-rolled steel to the U.S. market absent the orders

and suspension agreement. 

Producers indicated that facilities currently used to produce other products can be used to produce

subject merchandise. Specifically, all eleven responding subject producers reported producing alternative

and downstream products such as cut-to-length plate, alloy hot-rolled steel, and cold-rolled steel on the

equipment used to produce subject merchandise.20

There are also impediments to the importation of the subject merchandise into certain thirdcountry markets that increase the likelihood that subject imports would return to the U.S. market in

significant quantities upon revocation/termination. Hot-rolled steel from Brazil is subject to antidumping

duties in Canada.21 Hot-rolled steel from Japan is subject to an antidumping duty order in Thailand and is

subject to an ongoing antidumping duty investigation in Pakistan.22 Hot-rolled steel from Russia is

subject to a quota in the European Union as well as antidumping duty orders in Argentina, Indonesia,

Mexico, Peru and Thailand.23

We are not persuaded by respondents that stronger demand in Asian countries and Brazil, as well

as subject producers’ established relationships in other export markets, have eliminated the economic

incentive for subject producers to divert exports from other markets to the United States24 or that subject

imports are not likely to return to the U.S. market upon revocation/termination. Despite strong demand in

Asia and Brazil, subject producers had nearly 10 million short tons of excess production capacity in 2010. 

Furthermore, subject producers in Japan and Brazil are increasing production capacity by more than the

projected increases in their home market consumption in 2011 and 2012.25 Although demand is

increasing in Asia, so is production, which will create an incentive for Japanese producers to seek new

review. CR/PR, Table IV-11. Russian producers’ AUVs for exports to the United States were higher than that for

their other exports in three of the six years of the period of review. CR/PR, Table IV-15. Although Brazilian

producers’ AUVs for exports to third county markets were generally *** than U.S. domestic industry shipment

AUVs for most of the period of review, they were *** than U.S. domestic shipment AUVs in 2010, CR/PR at Tables

III-7 and IV-7, and two of the three Brazilian producers exported hot-rolled steel to third country markets at AUVs

generally below U.S. domestic shipment AUVs throughout the period of review. ***. We note, however, the

testimony from Mr. Daniel Mull concerning ArcelorMittal Brasil’s intentions regarding the U.S. market.

 19 CR at IV-26, n.45, PR at IV-18, n.45. *** country and region-specific pricing data show that prices for hotrolled steel imports to the Far East from 2009 to 2011 were generally significantly lower than U.S. prices. CR/PR,

Table IV-25. Similarly, MEPS data on negotiated transaction prices show that prices for hot-rolled steel imports in

China were significantly lower than U.S. prices. CR/PR, Table IV-24. 

 20 CR at IV-18, IV-29, and IV-37; PR at IV-13, IV-20, and IV-27. 

 21 CR at IV-15, PR at IV-12. 

 22 CR at IV-25, PR at IV-18. 

 23 CR at IV-34, PR at IV-24.

 24 Joint Respondents Prehearing Brief at 6-9, 59-61, and 65-69; Ford Prehearing Brief at 9, 16-18; Joint

Respondents Posthearing Brief at 9-12.

 25 Japan’s projected consumption in both 2011 and 2012 is lower than reported consumption for 2010. CR/PR,

Tables IV-22-23. Brazil’s projected consumption in 2011 is lower than 2010 consumption and is projected to

increase only by *** percent in 2012. CR/PR, Tables IV-22-23. Brazilian production capacity, on the other hand, is

projected to increase by *** percent in 2012. CR/PR, Table IV-17. 

50
customers in the near future.26 Given that hot-rolled steel production is capital intensive and entails high

fixed costs, subject producers have a strong incentive to make full use of all available capacity in order to

spread those fixed costs over a greater quantity of sales, especially if they can export to the United States

where prices tend to be higher than in other major export markets. In addition, respondents’ arguments

fail to recognize that, in order to increase exports to the United States, it is not necessary for subject

producers to divert exports from markets in which they have established relationships. Rather, given their

current excess capacity, their plans to increase production capacity, and their existing inventories, they

can simply increase overall exports. 

For all of the above reasons, we find that producers in the subject countries have both the ability

and incentive to ship significant quantities of hot-rolled steel to the United States upon

revocation/termination. Accordingly, we conclude that the likely volume of imports of the subject

merchandise, both in absolute terms and relative to consumption in the United States, would be

significant absent the restraining effects of the orders and suspension agreement.

Likely Effects of Subject Import Pricing

Price is a very important factor in purchasing decisions for this product.27 The domestic like

product and the subject imports are highly interchangeable.28 Most sales of both the domestic like

product and the subject imports are made on the spot market to distributors and service centers.29 The

product is available from multiple suppliers, and it can be purchased on the spot market. Under these

conditions of competition, sustained underselling by even a relatively moderate quantity of subject

imports is likely to have significant adverse effects on domestic industry prices and sales. 

We find that the likely pricing of the likely significantly increased volumes of cumulated subject

imports following revocation/termination would have significant adverse effects on prices for the

domestic like product and/or would result in lost sales. In these reviews, price comparisons between the

domestic like product and subject product from Brazil, Japan, and Russia are limited largely due to the

substantial reduction in the volume of subject imports following the imposition of the orders and

suspension agreement. Moreover, the comparisons we can perform reflect prices of the subject imports

under the discipline of the orders or suspension agreement. Nevertheless, subject imports from these

three countries undersold the domestic like product in 27 of 82 quarterly pricing comparisons by margins

ranging from 0.1 percent to 24.1 percent.30 Looking back to the original investigations, subject imports

from these three countries predominantly undersold the domestic like product in 1997 (underselling in 48

of 64 pricing comparisons) and 1998 (45 of 67 pricing comparisons).31

In addition, as discussed above, absent the orders and suspension agreement, there is an incentive

for subject producers to ship their excess capacity to the U.S. market as well as divert shipments from

many third-country markets and to do so at prices that undercut U.S. producers’ prices. We conclude that 

 26 Compare *** data projecting production of hot-rolled steel from East and Southeast Asia to increase by *** 

short tons from 2011 to 2015 and *** data projecting consumption of hot-rolled sheet from East and Southeast Asia

to increase by *** short tons from 2011 to 2015. Consumption data by *** are for sheet only and do not include

coiled plate. CR/PR at Tables IV-20 and IV-23. 

 27 CR/PR, Table II-4 and Table II-5.

 28 CR at II-25, PR at II-17 and CR/PR, Table II-8.

 29 CR at V-9-11, PR at V-7-8; CR/PR, Table II-1.

 30 CR/PR, Table V-6.

 31 USITC Pub. No. 3202 at V-15. 

51
there will likely be significant price underselling absent the restraining effects of the orders and

suspension agreement.

Because price is important to purchasing decisions, the presence of significant quantities of hotrolled steel imports that are likely to enter the United States and undersell the domestically produced

product after revocation/termination will force domestic hot-rolled steel producers to either lower prices,

forego price increases necessary to offset increases in costs, or lose sales. In light of these considerations,

we conclude that, upon revocation/termination, the prices of the subject imports would likely significantly

depress or suppress domestic prices and/or result in lost sales. 

Likely Impact of Subject Imports

We have examined the performance indicators in the trade and financial data for the domestic

hot-rolled steel industry during the period of review. The domestic industry performed well until 2009,

that is, until the U.S. economic recession and the resultant decrease in apparent U.S. consumption caused

performance to deteriorate. As explained below, although conditions improved in 2010, we do not find

robust performance by the domestic industry coming out of the steep downturn. 

Domestic capacity fluctuated within a narrow band, although it decreased in 2009 and recovered

below 2008 levels in 2010. Production and capacity utilization enjoyed robust performance until

sometime in 2008, after which there was a rapid deterioration in 2009 and moderate recovery in 2010.32

Specifically, production fluctuated within a narrow range from 2005 to 2007, between 61.9 and 65.9

million short tons, before falling in 2008 to 56.5 million short tons and then decreasing by nearly 30

percent in 2009 to 39.6 million short tons; it increased to 54.9 million short tons in 2010. Similarly,

capacity utilization ranged between 75.3 percent and 80.2 percent from 2005 to 2007, before decreasing

to 69.0 percent in 2008 and falling precipitously to 50.7 percent in 2009. It recovered only to 68.9

percent in 2010.33 Even in the more productive 2005 to 2007 period, the domestic industry’s production

and capacity utilization levels were generally lower than during the first reviews and original period of

investigation.34

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

similar to that for production. Total U.S. shipments fluctuated within a range from 60 and 65 million

short tons from 2005 to 2007, decreased to 56.0 million short tons in 2008, and then decreased by over 30

percent in 2009 to 38.1 million short tons. U.S. shipments recovered to 53.0 million short tons in 2010. 

Commercial U.S. shipments followed a similar pattern.35

The domestic industry held approximately 94 percent of the U.S. market over the period of

review, except for a downward fluctuation in 2006.36 Subject imports from Japan and Russia

remained in the U.S. market at much lower levels after the imposition of trade remedies. Subject imports

from Brazil essentially left the U.S. market.37 Nonsubject imports maintained a stable U.S. market share

of roughly 5 percent throughout the period of review, except for 2006, when nonsubject imports held a

7.9 percent market share.38

 32 CR/PR at Table III-4. 

 33 CR/PR at Table III-4.

 34 CR/PR at Tables III-4, C-1. 

 35 CR/PR at Table III-7. Export shipments were low relative to total shipments -- under 3.0 percent or less. Id. 

Domestic industry inventories relative to U.S. and total shipments remained at low levels. CR/PR at Table III-8. 

 36 CR/PR at Table I-14. 

 37 CR/PR at Table I-1. 

 38 CR/PR at Table I-14. 

52
The number of production and related workers employed in the domestic industry decreased from

2005 to 2007, increased in 2008, fell sharply in 2009, and enjoyed a moderate recovery in 2010. Hours

worked and productivity declined to period lows in 2009.39 

The majority of U.S. hot-rolled steel production is internally consumed to produce downstream

products.40 Given this condition of competition, the staff report suggests two methodologies for assessing

the domestic industry’s performance – the constructed fair market value methodology (“constructed FMV

methodology”) (Table III-10), which is the traditional approach used by the Commission, and the cost

plus allocated gross profit of downstream products methodology (“cost plus downstream profit

methodology”) (Appendix E). 

The constructed FMV methodology assigns fair market value to internal consumption based on

commercial sales values, adjusted as necessary.41 The cost plus downstream profit methodology values

internal consumption transfers based on the cost of the hot-rolled steel plus the gross profit of the

downstream products, allocated based on the relative cost share of the downstream product of the hotrolled steel. Both methodologies have significant merit given the high level of internal consumption in

this industry.42 We have placed equal weight on each of them in assessing the financial performance of

the domestic industry, as we did in the 2007 reviews on hot-rolled steel from different countries.43

Although the trends shown under the two approaches are similar, the cost plus downstream profit

approach generally reflects lower levels of profitability. 

The domestic industry was profitable in the early years of the period of review. Applying the

constructed FMV methodology between 2005 and 2008, for three out of four years, operating margins

were above thirteen percent and operating income was at or above five billion dollars. In the same period,

applying the cost plus downstream profit methodology, for three out of four years, operating margins

were above eight percent and operating income was at or above three billion dollars.44

Profitability deteriorated sharply in 2009 and recovered partially in 2010. Applying the

constructed FMV methodology, the domestic industry experienced an operating loss of 11.3 percent and

an operating loss of 2.3 billion dollars in 2009, which recovered to a positive operating margin of only 2.3

percent and operating income of 759 million dollars in 2010. Applying the cost plus downstream profit

methodology, the domestic industry experienced an operating loss of 10.2 percent and negative operating

 39 Production and related workers decreased from 23,757 in 2005 to 22,968 in 2006 and increased to 23,384 in

2007 and 24,599 in 2008 before falling sharply to 20,187 in 2009; the number of workers recovered to 21,682 in

2010. Hours worked decreased gradually from 2005 to 2008 before falling sharply in 2009 and recovering in 2010

(close to 2008 levels). Hours worked in 2010, however, were well below 2005 levels. Productivity fluctuated

between 2005 and 2007 before decreasing in 2008 and 2009 and then recovering in 2010. CR/PR at Table III-9.

 40 To demonstrate the importance of internal consumption, we note that 56.2 percent of the domestic industry’s

sales during the period of review were internally consumed; 40.8 percent were commercial sales and 3.0 percent

were transfers to related firms. CR at III-22; PR at III-14. 

 41 The constructed FMV methodology either directly uses the value of comparable commercial sales, or, if

necessary, uses commercial sales values adjusted to reflect differences in relative cost. 

 42 The constructed FMV methodology ties the value of the internally consumed products to the actual prices of

the domestic like product sold in the commercial market, but does not take into account the profit made by the

domestic industry in producing the downstream products. The cost plus downstream profit methodology does take

the profit made in producing the downstream product into account. We note, however, that this alternative

methodology derives profit for one product, in part, from the profit made on another, related, product. 

 43 Hot-Rolled Steel Products from Argentina, China, India, Indonesia, Kazakhstan, Romania, South Africa,

Taiwan, Thailand, and Ukraine, Inv. Nos. 701-TA-404-408 and 731-TA-898-902 and 904-908 (Review), USITC

Pub. No. 3956 (Oct. 2007) at 41, n.237. 

 44 CR/PR, Tables III-10 and Appendix Table E-1. 

53
income of 2.1 billion in 2009, which recovered to a positive operating margin of only 1.3 percent and

operating income of 421 million dollars in 2010.45 

The domestic industry’s ratio of cost of goods sold (COGS) to net sales increased irregularly

from 81.4 percent to 84.3 percent between 2005 and 2008, before increasing sharply to 108.6 percent in

2009 and declining to a still elevated level of 94.9 percent in 2010 (constructed FMV methodology).46

The COGS-to-sales ratios were similar using the cost plus downstream profit methodology.47 Thus, the

domestic industry had difficulty covering its costs in 2009 and 2010.48 

Based on the foregoing data, we find the domestic industry to be vulnerable. Although it

performed well early in the period of review, financial performance and employment deteriorated sharply

in 2009 and have not rebounded to pre-2009 levels since that time. Trade indicators in 2010 remained at

the second-lowest levels seen in the period of review. 

We have found that cumulated subject import volumes from Brazil, Japan, and Russia will likely

increase to significant levels in the reasonably foreseeable future if the orders are revoked and the

suspended investigation terminated. Because subject imports are interchangeable with the domestic like

product and price is an important factor in purchasing decisions, such increases in subject import volume

will likely have the effect of decreasing the domestic industry’s production, shipments, employment,

market share, and financial performance, thus preventing the domestic industry from completing its

recovery.

Additionally, the likely aggressive pricing of subject imports will force the domestic industry to

cut prices for the domestic like product, forego price increases necessary to offset increases in costs, or

lose sales. Under any of these scenarios, the domestic industry’s revenues will likely decline

significantly. This, in turn, will likely lead to declines in the industry’s operating performance.

We consequently find that revocation/termination in regard to the cumulated subject imports will

likely have a significant adverse impact on the domestic industry. We therefore determine that revocation

of the countervailing duty and antidumping duty orders on hot-rolled steel from Brazil and Japan, and

termination of the suspended investigation on hot-rolled steel from Russia, would likely lead to

continuation or recurrence of material injury to the domestic hot-rolled industry within a reasonably

foreseeable time.

 45 CR/PR. Tables III-10 and Appendix Table E-1. 

 46 CR/PR. Tables III-10 and Appendix Table E-1. 

 47 The domestic industry’s ratio of cost of goods sold (COGS) to net sales increased irregularly from 84.8 percent

to 89.2 percent from 2005 to 2008 before increasing sharply to 107.5 percent in 2009 and declining to a still elevated

level of 95.9 percent in 2010 (cost plus downstream profit methodology). CR/PR at Table E-1. 

 48 The domestic industry’s capital expenditures increased over the period of review due primarily to *** and the

construction of ThyssenKrupp’s new plant in Calvert, Alabama. 

54
PART I: INTRODUCTION AND OVERVIEW

BACKGROUND

On April 1, 2010, the U.S. International Trade Commission (“Commission” or “USITC”) gave

notice, pursuant to section 751(c) of the Tariff Act of 1930, as amended (“the Act”),1

 that it had instituted

reviews to determine whether revocation of the countervailing duty order on hot-rolled flat-rolled carbonquality steel products (“hot-rolled steel”) from Brazil, and the antidumping duty orders on hot-rolled steel

from Brazil and Japan, and the termination of the suspended investigation on hot-rolled steel from Russia

would likely lead to the continuation or recurrence of material injury to a domestic industry.2 3

 On July 6,

2010, the Commission determined that it would conduct full reviews pursuant to section 751(c)(5) of the

Act.4

 Selected information relating to the background and scheduling of this proceeding appears in the

following tabulation:5

Effective date Action

June 29, 1999 Commerce’s antidumping duty order on hot-rolled steel from Japan (64 FR 34778)

July 6, 1999

Commerce’s suspension of the countervailing duty and antidumping duty investigations on

hot-rolled steel from Brazil (64 FR 38792 and 38797, July 19, 1999)

July 12, 1999

Commerce’s suspension of the antidumping duty investigation on hot-rolled steel from Russia

(64 FR 38642, July 19, 1999)

March 12, 2002

Commerce’s issuance of an antidumping duty order on hot-rolled steel from Brazil (67 FR

11093) following Commerce’s termination of the suspension agreement (67 FR 6226,

February 11, 2002)

May 3, 2004

Commerce’s initiation and Commission’s institution of first five-year reviews (69 FR 24118,

24189)

September 26,

2004

Commerce's termination of the suspension agreement and issuance of a countervailing duty

order on hot-rolled steel from Brazil (69 FR 56040, September 17, 2004)

May 12, 2005

Commerce's continuation of the countervailing duty order on hot-rolled steel from Brazil (70

FR 30417, May 26, 2005), continuation of the antidumping duty orders on hot-rolled steel from

Brazil and Japan (70 FR 30413, May 26, 2005), and continuation of the suspended

antidumping duty investigation on hot-rolled steel from Russia (70 FR 32571, June 3, 2005)

April 1, 2010

Commerce’s initiation and Commission’s institution of second five-year reviews (75 FR 16437,

16504)

Tabulation continued on next page.

 1 19 U.S.C. 1675(c).

 2 Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil, Japan, and Russia, 75 FR 16504, April 1,

2010. All interested parties were requested to respond to this notice by submitting the information requested by the

Commission.

 3

 In accordance with section 751(c) of the Act, the U.S. Department of Commerce (“Commerce”) published a

notice of initiation of five-year reviews of the subject antidumping duty orders, countervailing duty orders, and

suspension agreement concurrently with the Commission’s notice of institution. Initiation of Five-Year (“Sunset”)

Review, 75 FR 16437, April 1, 2010. 

 4 Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil, Japan, and Russia, 75 FR 42782, July 22,

2010. The Commission found that with respect to each of the subject reviews both the domestic and respondent

interested party group responses to its notice of institution were adequate.

 5

 The Commission’s notice of institution, notice to conduct full reviews, scheduling notice, and statement on

adequacy appear in appendix A and may also be found at the Commission’s web site (internet address

www.usitc.gov). Commissioners’ votes on whether to conduct expedited or full reviews may also be found at the

web site.

I-1
Effective date Action

July 6, 2010 Commission’s determination to conduct full five-year reviews (75 FR 42782, July 22, 2010)

August 5, 2010

Commerce’s final results of expedited five-year review of the suspended antidumping duty

investigation on hot-rolled steel from Russia (75 FR 47263)

August 6, 2010

Commerce’s final results of expedited five-year reviews of the antidumping duty orders on hotrolled steel from Brazil and Japan (75 FR 47541)

October 1, 2010 Commission’s scheduling of the reviews (75 FR 62566, October 12, 2010)

December 3,

2010

Commerce’s final results of full five-year review of the countervailing duty order on hot-rolled

steel from Brazil (75 FR 75455)

April 6, 2011 Commission’s hearing1

May 19, 2011 Commission’s vote

June 6, 2011 Commission’s determinations transmitted to Commerce

 1 A list of witnesses appearing at the hearing is presented in app. B.

The Original Investigations and Subsequent Five-Year Reviews

On September 30, 1998, petitions were filed with Commerce and the Commission alleging that an

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

imports of certain hot-rolled flat-rolled carbon steel products from Brazil, Japan, and Russia.6

 Sales of

such products were allegedly subsidized with respect to Brazil and made at less than fair value (LTFV)

with respect to Brazil, Japan, and Russia. On May 6, 1999, Commerce made a final affirmative dumping

determination with respect to Japan. The Commission made its final affirmative injury determination on

June 18, 1999,7

 and Commerce issued an antidumping duty order on imports from Japan on June 29,

1999.8

 In July 1999, Commerce signed suspension agreements with respect to Brazil and Russia.9 10

On May 4, 2004, the Commission instituted the first five-year reviews on the antidumping duty

orders on hot-rolled steel from Brazil and Japan, and the suspended countervailing duty and antidumping

duty investigations from Brazil and Russia, respectively. As described below, following the July 28,

 6 The petitions were filed by Bethlehem Steel Corporation (Bethlehem, PA); USX Corporation (Pittsburgh, PA);

Ispat Inland Incorporated (“Ispat Inland,” East Chicago, IN); LTV Corporation (“LTV,” Cleveland, OH); National

Steel Corporation (“National,” Mishawaka, IN; National was not a petitioner with respect to Japan); California Steel

Industries (Fontana, CA); Gallatin Steel Company (“Gallatin,” Ghent, KY); Geneva Steel Holdings (“Geneva,”

Vineyard, UT); Gulf States Steel (“Gulf States,” Gadsden, AL); IPSCO Incorporated (Muscatine, IA); Steel

Dynamics Incorporated (“SDI,” Butler, IN); Weirton Steel Corporation (“Weirton,” Weirton, WV); The

Independent Steelworkers Union (“ISU,” Weirton, WV); and the United Steelworkers of America (“USWA,”

Pittsburgh, PA). 

 7 Certain Hot-Rolled Steel Products From Japan, Determination, 64 FR 33514, June 23, 1999.

 8 Antidumping Duty Order: Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Japan, 64 FR

34778, June 29, 1999. The antidumping duty order regarding hot-rolled steel from Japan was the subject of dispute

resolution proceedings brought by Japan before the World Trade Organization (WTO). See United States -

Anti-Dumping Measures on Certain Hot-Rolled Steel Products From Japan, WT/DS184/R (February 28, 2001), and

WT/DS184/AB/R, AB 2001-2 (July 24, 2001).

 9 Suspension of Antidumping Duty Investigation: Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From

the Russian Federation, 64 FR 38642, July 19, 1999; Suspension of Antidumping Duty Investigation: Hot-Rolled

Flat-Rolled Carbon-Quality Steel Products From Brazil, 64 FR 38792, July 19, 1999.

 10 Unless indicated otherwise, the following discussion regarding suspension agreements is based on information

contained in Certain Hot-Rolled Flat-Rolled Carbon Quality Steel Products From Brazil, Japan, and Russia,

Investigation Nos. 701-TA-384 and 731-TA-806-808 (Review), USITC Publication 3767, April 2005, pp. I-2-I-4.

I-2
2004 request of the Government of Brazil, the suspension agreement with Brazil was terminated, and

subsequently Commerce issued a countervailing duty order on such imports. Following the

Commission’s11 and Commerce’s12 affirmative determinations with respect to Brazil and Japan,

Commerce published the continuation of antidumping duty orders on Brazil and Japan and countervailing

duty order on Brazil on May 26, 2005.13 Following the Commission’s14 and Commerce’s15 affirmative

determinations with respect to Russia as part of the first reviews, the suspension agreement was

continued.16 

Suspension Agreements

Brazil

The Commission made its final affirmative injury determination with respect to subject imports

from Brazil on August 24, 1999.17 On July 6, 1999, Commerce had signed an agreement with CSN,

USIMINAS, and COSIPA (Brazilian hot-rolled steel producers) suspending the antidumping duty

investigation. The agreement required that: (1) hot-rolled steel be sold at or above the established

reference price; and (2) for each entry of each exporter, the amount by which the estimated normal value

exceeded the export price (or constructed export price) would not exceed 15 percent of the weighted

average amount by which the estimated normal value exceeded the export price (or constructed export

price).18 Commerce conducted an administrative review of this agreement and determined that CSN and

USIMINAS/COSIPA had violated its terms.19 Because these violations were not inconsequential and

frustrated the purposes of the agreement, the agreement was terminated. Subsequent to the termination of

the suspension agreement with respect to the antidumping duty investigation on imports of hot-rolled

steel products from Brazil, Commerce issued an antidumping duty order on such imports.20 

Also on July 6, 1999, Commerce signed an agreement with the Government of Brazil suspending

the countervailing duty investigation. The suspension agreement provided that: (1) the Government of

 11 Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil, Japan, and Russia, 70 FR 23886,

May 5, 2005.

 12 Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil; Final Results of the Expedited

Sunset Review of Antidumping Duty Order, 69 FR 54630, September 9, 2004; and Hot-Rolled Flat-Rolled

Carbon-Quality Steel From Brazil; Final Results of the Expedited Sunset Review of the Countervailing Duty Order,

69 FR 70655, December 7, 2004.

 13 Continuation of Antidumping Duty Orders; Certain Hot–Rolled Flat–Rolled Carbon–Quality Steel Products

From Brazil and Japan, 70 FR 30413; and Continuation of Countervailing Duty Order; Certain Hot–Rolled

Flat–Rolled Carbon–Quality Steel Products From Brazil, 70 FR 30417, May 26, 2005.

 14 Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil, Japan, and Russia, 70 FR 23886,

May 5, 2005.

 15 Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from the Russian Federation; Final Results of

Expedited Sunset Review of Suspended Antidumping Duty Investigation, 69 FR 54633, September 9, 2004.

 16 Continuation of Suspended Antidumping Duty Investigation: Certain Hot-Rolled Flat-Rolled Carbon-Quality

Steel Products from the Russian Federation, 70 FR 32571 June 3, 2005.

 17 Certain Hot-Rolled Steel Products From Brazil and Russia, 64 FR 46951, August 27, 1999.

 18 Suspension of Antidumping Duty Investigation: Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From

Brazil, 64 FR 38792, July 19, 1999.

 19 Certain Hot-Rolled Flat-Rolled Carbon Quality Steel Products From Brazil: Final Results of Antidumping

Duty Administrative Review and Termination of the Suspension Agreement, 61 FR 6226, February 11, 2002.

 20 Antidumping Duty Order: Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil,

61 FR 11093, March 12, 2002.

I-3
Brazil would not provide any new or additional export or import substitution subsidies on the subject

merchandise; and (2) the Brazilian government would restrict the volume of direct or indirect exports to

the United States of subject merchandise from all Brazilian producers/exporters. No exports were

permitted from the date of the agreement until September 30, 1999. Quota levels were established for the

export limit periods beginning in October 1999. The quota level for each year through 2004 was set at

295,000 metric tons (325,248 short tons).21 On July 28, 2004, the Government of Brazil formally

requested that the Department of Commerce terminate the agreement suspending the countervailing duty

investigation on imports of hot-rolled steel products from Brazil. Subsequent to the termination of the

suspension agreement, Commerce issued a countervailing duty order on such imports.22 

Russia

On July 19, 1999, Commerce made a final affirmative dumping determination with respect to

Russia.23 The Commission made its final affirmative injury determination on August 24, 1999.24

Effective July 12, 1999, Commerce had suspended the antidumping duty investigation on such imports

from Russia.25 The suspension agreement implemented export quota levels and reference prices to restrict

the volume of hot-rolled steel imports from Russia. The suspension agreement provided that no Russian

shipments were permitted during a “moratorium period” from February 22, 1999 to December 31, 1999. 

The agreement specified export quota levels for the years 2000-03. Thereafter, the quota would be

determined by a formula, taking into account the previous year’s export limit, apparent consumption in

the United States, and the adoption of premium reference prices by the Ministry of Trade of the Russian

Federation. The agreement set an initial reference price and stipulated that Commerce would issue

reference prices for each quarter.26 In addition, the suspension agreement provided for up to 15 percent of

the export limit (if not used) to be carried over to the subsequent export limit period and for up to 15

percent of the export limit for any period to be carried back to the last 60 days of the previous export limit

period. The Russian government formally requested, and was granted on October 26, 2004, permission to

carry back 15 percent of its 2005 export limit, or 122,192 metric tons, to 2004. Imports of hot-rolled steel

from Russia to the United States filled 18.5 percent of the carry-back quantity; the remaining amount, or

99,637 metric tons, was carried forward to 2005. On July 22, 2004, and August 31, 2005, pursuant to

requests from the Russian government, the Department agreed to add certain new grades of merchandise

to its reference price calculation. There have been no other related findings or rulings since that time, and

the suspension agreement remains in effect. Figure I-1 presents the suspension agreement export limits

and figure I-1 presents the reference prices for each quarter and the midwest spot price.

 21 Suspension of Countervailing Duty Investigation: Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel

Products From Brazil, 64 FR 38791, July 19, 1999.

 22 Agreement Suspending the Countervailing Duty Investigation on Hot-Rolled Flat-Rolled Carbon-Quality Steel

From Brazil; Termination of Suspension Agreement and Notice of Countervailing Duty Order, 69 FR 56040,

September 26, 2004.

 23 Notice of Final Determination of Sales at Less Than Fair Value: Certain Hot-Rolled Flat-Rolled

Carbon-Quality Steel Products From the Russian Federation, 64 FR 38626, July 19, 1999.

 24 Certain Hot-Rolled Steel Products from Brazil and Russia, 64 FR 46951, August 27, 1999.

 25 Suspension of Antidumping Duty Investigation: Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From

the Russian Federation, 64 FR 38642, July 19, 1999.

 26 Ibid.

I-4
Figure I-1

Hot-rolled steel: Imports from Russia and export limit, 2000-10

Source: Table I-13 and Department of Commerce, International Trade Administration, Import Administration, Office

of Policy.

Figure I-2

Hot-rolled steel: Spot price and Russian suspension agreement reference prices, July 2000-March

2011

* * * * * * *

Summary Data

Table I-1 presents a summary of data from the original investigations and the current full fiveyear reviews. 

I-5
Table I-1

Hot-rolled steel: Comparative data from the original investigations and the first and second reviews, 1996-

2010

(Quantity in short tons, value in 1,000 dollars, shares/ratios in percent)

Item 1996 1997 1998 1999 2000 2001

U.S. consumption quantity:

Amount 68,498,545 70,981,304 75,251,117 73,064,292 74,000,452 63,309,100

U.S. producers’ share1 92.3 90.8 84.8 91.5 90.2 95.3

U.S. importers’ share:1

Brazil 0.4 0.6 0.6 0.1 0.2 0.0

Japan 0.4 0.8 3.6 0.1 0.0 0.0

Russia 1.2 2.8 5.1 0.0 0.2 0.0

Subtotal, subject imports 2.0 4.2 9.3 0.2 0.5 0.0

All other sources 5.7 5.0 5.9 8.4 9.3 4.7

Total imports 7.7 9.2 15.2 8.5 9.8 4.7

U.S. imports from:

Brazil:

Quantity 254,166 436,685 451,462 49,809 158,565 2,587

Value 83,585 140,581 133,442 11,442 51,679 972

Unit value $329 $322 $296 $230 $326 $376

Japan:

Quantity 240,976 548,822 2,684,756 61,798 17,109 6,872

Value 103,780 208,400 801,295 22,958 10,566 6,136

Unit value $431 $380 $298 $371 $618 $893

Russia:

Quantity 847,764 2,016,018 3,843,641 14,612 183,236 5,845

Value 222,710 564,866 923,303 3,096 54,130 1,670

Unit value $263 $280 $240 $212 $295 $286

Subtotal, subject countries

Quantity 1,342,906 3,001,525 6,979,859 126,219 358,910 15,303

Value 410,075 913,847 1,858,040 37,496 116,376 8,779

Unit value $305 $304 $266 $297 $324 $574

All other sources:

Quantity 3,905,460 3,519,507 4,428,038 6,107,058 6,884,190 2,988,797

Value 1,342,387 1,223,035 1,411,701 1,628,159 2,072,340 818,356

Unit value $344 $348 $319 $267 $301 $274

Total:

Quantity 5,248,366 6,521,032 11,407,897 6,233,277 7,243,100 3,004,100

Value 1,752,462 2,136,882 3,269,741 1,665,654 2,188,717 827,134

Unit value $334 $328 $287 $267 $302 $275

I-6
Table I-1--Continued

2002 2003 2004 2005 2006 2007 2008 2009 2010

67,319,017 66,794,467 73,173,003 65,860,369 71,625,604 63,674,080 59,636,710 40,402,675 56,090,768

93.0 95.9 92.9 94.1 91.0 94.7 93.9 94.4 94.5

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.2 0.0 1.2 0.5 1.1 0.2 0.1 0.0 0.2

0.2 0.1 1.3 0.5 1.1 0.2 0.2 0.0 0.3

6.8 4.1 5.8 5.4 7.9 5.0 5.9 5.6 5.3

7.0 4.1 7.1 5.9 9.0 5.3 6.1 5.6 5.5

383 53 2,978 0 2,237 50 46 148 512

268 32 1,393 0 1,856 37 48 128 402

$700 $598 $468 (2

) $830 $733 $1,047 $863 $785

6,372 10,838 16,086 5,009 11,795 15,504 15,577 9,053 15,033

7,244 13,385 16,451 3,911 8,549 10,263 13,666 10,897 14,636

$1,137 $1,235 $1,023 $781 $725 $662 $877 $1,204 $974

160,712 32,485 904,101 299,275 789,288 136,293 76,425 1,708 125,079

52,268 10,951 477,902 169,124 411,375 69,061 72,989 1,751 69,708

$325 $337 $529 $565 $521 $507 $955 $1,025 $557

167,466 43,376 923,164 304,284 803,320 151,847 92,048 10,909 140,624

59,779 24,368 495,746 173,035 421,780 79,361 86,703 12,776 84,745

$357 $562 $537 $569 $525 $523 $942 $1,171 $603

4,555,184 2,707,705 4,270,579 3,564,545 5,639,254 3,196,799 3,532,867 2,263,178 2,955,493

1,411,112 903,410 2,178,142 1,948,688 2,937,894 1,752,308 2,799,480 1,203,403 1,828,647

$310 $334 $510 $547 $521 $548 $792 $532 $619

4,722,650 2,751,082 5,193,743 3,868,829 6,442,574 3,348,646 3,624,915 2,274,087 3,096,118

1,470,891 927,778 2,673,888 2,121,722 3,359,674 1,831,669 2,886,183 1,216,179 1,913,392

$311 $337 $515 $548 $521 $547 $796 $535 $618

I-7
Table I-1--Continued 

Hot-rolled steel: Comparative data from the original investigations and the first and second reviews, 1996-

2010

(Quantity in short tons, value in 1,000 dollars, shares/ratios in percent)

Item 1996 1997 1998 1999 2000 2001

U.S. producers’:

Capacity quantity 67,334,504 70,028,075 73,544,818 79,753,478 78,628,005 75,720,188

Production quantity 63,646,185 64,851,934 64,373,004 67,105,961 67,386,943 60,766,642

Capacity utilization1 94.5 92.6 87.5 84.1 85.7 80.3

U.S. shipments:

Quantity 63,250,179 64,460,272 63,843,220 66,831,015 66,757,352 60,305,000

Value 19,557,310 19,908,384 18,975,513 19,243,625 20,125,145 15,771,409

Unit value $309 $309 $297 $288 $301 $262

Export shipments:

Quantity 321,628 295,757 169,935 381,123 629,677 439,741

Value 98,392 100,419 56,663 127,527 210,190 132,840

Unit value $306 $340 $333 $335 $334 $302

Ending inventory quantity 2,571,136 2,604,164 2,771,350 2,171,160 2,200,050 2,377,183

Inventory/total shipments1 4.0 4.0 4.3 3.2 3.3 3.9

Production workers 33,965 33,518 32,885 30,598 30,052 25,403

Hours worked (1,000) 73,597 71,634 68,574 70,140 68,518 53,641

Wages paid ($1,000) 1,695,944 1,728,447 1,677,417 1,719,492 1,718,745 1,347,716

Hourly wage $23.04 $24.13 $24.46 $24.52 $25.08 $25.12

Productivity (tons/1,000 hours) 864.8 905.3 938.7 930.7 954.8 1,102.8

Net sales:

Quantity 63,417,605 64,363,248 63,717,428 65,011,396 65,064,855 59,137,139

Value 21,790,830 22,619,412 21,341,169 18,686,036 19,615,006 15,497,237

Unit Value $344 $351 $335 $287 $301 $262

Cost of goods sold 20,416,429 20,361,604 19,794,103 18,874,219 19,370,550 17,727,263

Gross profit or (loss) 1,374,401 2,257,808 1,547,066 (188,183) 244,456 (2,230,026)

SG&A 943,570 1,007,956 986,607 1,051,745 1,065,627 1,443,380

Operating income or (loss) (value) 430,831 1,249,852 560,459 (1,239,928) (821,171) (3,673,406)

Unit cost of goods sold $322 $316 $311 $290 $298 $300

Unit operating income or (loss) $7 $19 $9 ($19) ($13) ($62)

Cost of goods sold/sales (percent)1 93.7 90.0 92.8 101.0 98.8 114.4

Operating income or (loss)/sales1 2.0 5.5 2.6 (6.6) (4.2) (23.7)

 1 Reported data are in percent and period changes are in percentage points.

 2

 Not applicable.

Note.–During 2002-03, the United States applied safeguard measures (shaded).

Source: Compiled from data submitted in response to Commission questionnaires and from official Commerce statistics. Data for 1996-98 are

compiled from Certain Hot-Rolled Steel Products from Japan, Invs. Nos. 731-TA-807 (Final), USITC publication 3202, June 1999, tables IV-9, IV-7, III2, IV-7, III-3, III-5, and VI-5. Data for 1999-2004 are compiled from Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil, Japan,

and Russia, Invs. Nos. 701-TA-384 and 731-TA-806-808 (Review), USITC publication 3767, April 2005, table C-1.

I-8
Table I-1--Continued 

2002 2003 2004 2005 2006 2007 2008 2009 2010

71,225,171 78,490,049 79,113,331 81,533,511 82,208,701 82,201,768 81,842,235 78,225,675 79,679,215

63,349,150 65,192,980 68,229,669 62,859,112 65,890,974 61,878,281 56,497,372 39,635,900 54,913,361

88.9 83.1 86.2 77.1 80.2 75.3 69.0 50.7 68.9

62,596,367 64,043,385 67,979,260 61,991,540 65,183,030 60,325,434 56,011,795 38,128,588 52,994,650

19,508,721 19,246,760 35,913,036 32,655,274 36,196,777 32,939,269 42,714,673 19,958,283 31,887,648

$312 $301 $528 $527 $555 $546 $763 $523 $602

491,594 1,486,803 685,931 1,084,187 756,886 1,462,893 1,353,996 1,155,035 1,653,241

166,699 433,613 374,873 595,336 451,987 796,552 1,144,536 581,216 1,004,170

$339 $292 $547 $549 $597 $545 $845 $503 $607

1,857,701 1,668,456 1,846,384 1,809,058 1,759,945 1,849,851 1,000,610 1,352,124 1,617,837

2.9 2.5 2.7 2.9 2.7 3.0 1.7 3.4 3.0

22,837 22,863 21,480 23,757 22,968 23,384 24,599 20,187 21,682

49,046 48,875 48,143 55,396 52,337 51,768 51,573 38,130 47,358

1,271,385 1,420,795 1,456,957 1,580,898 1,627,286 1,688,018 1,743,741 1,209,585 1,540,481

$25.92 $29.07 $30.26 $28.54 $31.09 $32.61 $33.81 $31.72 $32.53

1,249.8 1,297.1 1,378.2 1,134.7 1,259.0 1,195.3 1,095.5 1,039.5 1,159.5

61,457,255 63,767,589 66,638,302 61,217,248 64,467,613 60,308,179 56,681,495 38,665,824 53,701,466

19,072,702 19,102,195 34,823,477 32,838,165 36,284,259 33,163,647 43,492,778 20,467,750 32,440,446

$310 $300 $523 $536 $563 $550 $767 $529 $604

17,936,959 19,352,199 25,428,123 26,727,626 28,836,551 29,328,706 36,666,888 22,222,065 30,772,148

1,135,743 (250,004) 9,395,354 6,110,539 7,447,708 3,834,941 6,825,890 (1,754,315) 1,668,298

1,492,586 1,453,050 1,886,866 880,886 887,239 775,461 785,364 567,477 909,717

(356,843) (1,703,054) 7,508,488 5,229,653 6,560,469 3,059,480 6,040,526 (2,321,792) 758,581

$292 $303 $382 $437 $447 $486 $647 $575 $573

($6) ($27) $113 $85 $102 $51 $107 $(60) $14

94.0 101.3 73.0 81.4 79.5 88.4 84.3 108.6 94.9

(1.9) (8.9) 21.6 15.9 18.1 9.2 13.9 (11.3) 2.3

I-9
PREVIOUS AND RELATED TITLE VII INVESTIGATIONS

The Commission has conducted a number of previous import relief investigations on certain

carbon steel products or substantially similar merchandise. Table I-2 presents data on previous and

related title VII investigations for hot-rolled steel.

Table I-2

Hot-rolled steel: Previous and related investigations, 1982-2010

Original investigation First review

Current status

Date1 Number Country Outcome Date1 Outcome

1982 701-TA-94 Belgium Affirmative2 - - Petition withdrawn 10/29/82

1982 701-TA-95 Brazil Negative2 -- -

1982 701-TA-96 France Affirmative2 - - Petition withdrawn 10/29/82

1982 701-TA-97 Italy Affirmative2 - - Petition withdrawn 10/29/82

1982 701-TA-98 Luxembourg Negative2 -- -

1982 701-TA-99 Netherlands Negative - - -

1982 701-TA-100 United Kingdom Negative2 -- -

1982 701-TA-101 Germany Affirmative2 - - Petition withdrawn 10/29/82

1982 701-TA-156 Spain Negative2 -- -

1982 701-TA-171 Korea Affirmative - - ITA revoked 10/10/85

1982 731-TA-61 Belgium Affirmative2 - - Terminated 11/10/82

1982 731-TA-62 France Affirmative2 - - Terminated 11/10/82

1982 731-TA-63 Italy Affirmative2 - - Terminated 11/10/82

1982 731-TA-64 Luxembourg Negative2 -- -

1982 731-TA-65 Netherlands Negative - - -

1982 731-TA-66 United Kingdom - - - Petition withdrawn 1/30/82

1982 731-TA-67 Germany Affirmative2 - - Terminated 11/10/82

1983 701-TA-206 Brazil Affirmative - - ITA revoked 9/5/85

1984 731-TA-153 Brazil Affirmative - - ITA revoked 8/21/85

1985 701-TA-227 Austria Negative - - -

1985 701-TA-228 Sweden Negative - - -

1985 701-TA-229 Venezuela Affirmative2 - - Terminated 7/19/85

Table continued on following page. 

I-10
Table I-2--Continued

Hot-rolled steel: Previous and related investigations, 1982-2010

Original investigation First review

Current status

Date1 Number Country Outcome Date1 Outcome

1985 731-TA-219 Austria Negative - - -

1985 731-TA-220 Finland - - - Petition withdrawn 1/18/85

1985 731-TA-221 Hungary Affirmative2 - - Petition withdrawn 6/4/85

1985 731-TA-222 Romania Affirmative2 - - Terminated 7/19/85

1985 731-TA-223 Venezuela Affirmative2 - - Terminated 7/19/85

1992 701-TA-329 Belgium Negative - - -

1992 701-TA-330 Brazil Negative - - -

1992 701-TA-331 France Negative - - -

1992 701-TA-332 Germany Negative - - -

1992 701-TA-333 Italy Negative2 -- -

1992 701-TA-334 Korea Negative - - -

1992 701-TA-335 New Zealand Negative - - -

1992 731-TA-588 Belgium Negative - - -

1992 731-TA-589 Brazil Negative - - -

1992 731-TA-590 Canada Negative - - -

1992 731-TA-591 France Negative - - -

1992 731-TA-592 Germany Negative - - -

1992 731-TA-593 Italy Negative2 -- -

1992 731-TA-594 Japan Negative - - -

1992 731-TA-595 Korea Negative - - -

1992 731-TA-596 Netherlands Negative - - -

1998 701-TA-384 Brazil Affirmative 2004 Affirmative Under review

1998 731-TA-806 Brazil Affirmative 2004 Affirmative Under review

1998 731-TA-807 Japan Affirmative 2004 Affirmative Under review

1998 731-TA-808 Russia Affirmative 2004 Affirmative Under review

2000 701-TA-404 Argentina Affirmative 2006 Negative Order not continued3

2000 701-TA-405 India Affirmative 2006 Affirmative Order in place

2000 701-TA-406 Indonesia Affirmative 2006 Affirmative Order in place

2000 701-TA-407 South Africa Affirmative 2006 Negative Order not continued3

Table continued on next page. 

I-11
Table I-2--Continued

Hot-rolled steel: Previous and related investigations, 1982-2010

Original investigation First review

Current status

Date1 Number Country Outcome Date1 Outcome

2000 701-TA-408 Thailand Affirmative 2006 Affirmative Order in place

2000 731-TA-898 Argentina Affirmative 2006 Negative Order not continued3

2000 731-TA-899 China Affirmative 2006 Affirmative Order in place

2000 731-TA-900 India Affirmative 2006 Affirmative Order in place

2000 731-TA-901 Indonesia Affirmative 2006 Affirmative Order in place

2000 731-TA-902 Kazakhstan Affirmative 2006 Negative Order not continued3

2000 731-TA-903 Netherlands Affirmative 2006 Affirmative Terminated 6/27/074

2000 731-TA-904 Romania Affirmative 2006 Negative Order not continued3

2000 731-TA-905 South Africa Affirmative 2006 Negative Order not continued3

2000 731-TA-906 Taiwan Affirmative 2006 Affirmative Order in place

2000 731-TA-907 Thailand Affirmative 2006 Affirmative Order in place

2000 731-TA-908 Ukraine Affirmative 2006 Affirmative Order in place

 1 “Date” refers to the year in which the investigation or review was instituted by the Commission.

 2

 Preliminary determination.

 3

 Commerce published the revocation of the subject order on November 20, 2007 (72 FR 65293).

 4

 Commerce published notice of its final results in the five-year review concerning the antidumping duty order on hot-rolled

steel from the Netherlands on June 27, 2007 (72 FR 35220). In those final results, Commerce revoked the order effective

November 29, 2006. Accordingly, the Commission terminated its five-year review regarding hot-rolled steel from the Netherlands

effective June 27, 2007 (72 FR 40322, July 24, 2007).

Source: Compiled from Commission determinations published in the Federal Register.

PREVIOUS AND RELATED SECTION 332 INVESTIGATIONS

The Commission has conducted a number of previous section 332 investigations on certain

carbon steel products or substantially similar merchandise. Table I-3 presents data on previous and

related general research investigations on hot-rolled steel.

I-12
Table I-3

Hot-rolled steel: Previous and related Section 332 investigations

Investigation

No.

Year of

investigation Report title

Publication

 No.

Publication

date

332-153 1983

Monthly Report on Selected Steel

Industry Data (1

) (1)

332-209 1985

Annual Survey Concerning

Competitive Conditions in the Steel

Industry and Industry Efforts to

Adjust and Modernize

1729

1881

2019

2115

2226

Aug. 1985

Sept. 1986

Sept. 1987

Sept. 1988

Oct. 1989

332-153 1983

Monthly Report on Selected Steel

Industry Data (1

) (1)

332-214 1985

The Effects of Restraining U.S.

Steel Imports on the Exports of

Selected Steel-Consuming

Industries 1788 Dec. 1985

332-226 1986

Monthly Reports on the Status of

the Steel Industry2 (

3

) (3)

332-231 1986

U.S. Global Competitiveness: Steel

Sheet and Strip Industry 2050 Jan. 1988

332-256

1988

The Western U.S. Steel Market:

Analysis of Market Conditions and

Assessment of the Effects of

Voluntary Restraint Agreements on

Steel Producing and SteelConsuming Industries 2165 Mar. 1989

332-270 1989

The Effects of the Steel Voluntary

Restraint Agreements on U.S.

Steel-Consuming Industries 2182 May 1989

332-289 1990

Steel Industry Annual Report: On

Competitive Conditions in the Steel

Industry and Industry Efforts to

Adjust and Modernize

2316

2436

Sept. 1990

Sept. 1991

332-327 1992

Steel: Semiannual Monitoring

Report

2558

2655

2682

2759

2807

2878

Sept. 1992

June 1993

Sept. 1993

April 1994

Sept. 1994

June 1995

Table continued on next page.

I-13
Table I-3--Continued

Hot-rolled steel: Previous and related Section 332 investigations

Investigation

No.

Year of

investigation Report title

Publication

 No.

Publication

date

332-452 2003

Steel-Consuming Industries:

Competitive Conditions with

Respect to Steel Safeguard

Measures 3632 Sept. 2003

 1 The Commission issued 36 monthly reports beginning in February 1983 and ending in March 1986. 

 2

 The reports were shifted to a quarterly basis with the first quarterly report being published in March 1991. 

 3

 As part of this investigation, the Commission issued 66 reports; USITC Publication 1942, January 1987, focused on carbon

and alloy sheet and strip, while many publications under this investigation may have had data related to hot-rolled steel.

Source: Cited Commission publications.

PREVIOUS AND RELATED SAFEGUARD INVESTIGATIONS

Hot-rolled steel products have been the subject of both safeguard investigations and other

arrangements to limit the importation of steel products. A description of such measures since 1980

appears in the staff report for the first review of the subject orders.27 The following discussion focuses on

the most recent safeguard action to include hot-rolled steel.

Following receipt of a request from the Office of the United States Trade Representative

(“USTR”) on June 22, 2001, the Commission instituted investigation No. TA-201-73, Steel, under section

202 of the Trade Act of 197428 to determine whether certain steel products, including hot-rolled steel,

were being imported into the United States in such increased quantities as to be a substantial cause of

serious injury, or the threat thereof, to the domestic industries producing articles like or directly

competitive with the imported article.29 On July 26, 2001, the Commission received a resolution adopted

by the Committee on Finance of the U.S. Senate (“Senate Finance Committee” or “Committee”)

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

1974.30 Consistent with the Senate Finance Committee’s resolution, the Commission consolidated the

investigation requested by the Committee with the Commission’s previously instituted investigation No.

TA-201-73.31 On December 20, 2001, the Commission issued its determinations and remedy

recommendations. The Commission reached an affirmative determination with respect to certain carbon

flat-rolled steel (including hot-rolled steel). 

On March 5, 2002, following determinations regarding serious injury or threat of serious injury

by the Commission under section 202 of the Trade Act of 1974, the President announced the safeguard

measures that he planned to implement to facilitate efforts by various domestic steel industries and their

workers to make a positive adjustment to import competition with respect to certain steel products. The

safeguard measures encompassed 10 different product categories for which the Commission made

 27 Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil, Japan, and Russia: Investigations

Nos. 701-TA-384 and 731-TA-806-808 (Review), USITC Publication 3767, April 2005, pp. I-9-10.

 28 19 U.S.C. § 2252.

 29 Institution and Scheduling of an Investigation under Section 202 of the Trade Act of 1974 (19 U.S.C. 2252) (the

Act), 66 FR 35267, July 3, 2001.

 30 19 U.S.C. § 2251.

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

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

2001.

I-14
affirmative determinations or was evenly divided. Presidential Proclamation 7529 implemented the

safeguard measures, principally in the form of tariffs and tariff-rate quotas, effective March 20, 2002, for

a period of three years and one day. Import relief relating to certain carbon flat-rolled steel (including

hot-rolled steel) consisted of an additional tariff of 30 percent ad valorem on imports in the first year, 24

percent in the second year, and 18 percent in the third year.32 33 The President also instructed the

Secretary of the Treasury and the Secretary of Commerce to establish a system of import licensing to

facilitate the monitoring of imports of certain steel products.34

The safeguard measures applied to imports of certain steel products from all countries except

Canada, Israel, Jordan, and Mexico, which had entered into free trade agreements with the United States,

and most developing countries that were members of the World Trade Organization. The President’s

initial proclamation also excluded numerous specific products from the measures, and was followed by

subsequent additional exclusions.

On September 19, 2003, the Commission submitted a mid-term report to the President and the

Congress on the results of its monitoring of developments in the steel industry, as required by section

204(a)(2) of the Trade Act of 1974.35 The Commission’s monitoring report noted that, although growth

in demand for carbon and alloy flat-rolled steel products (the product category that included hot-rolled

steel) was at most modest and total imports increased, output-related indicators for the domestic industry

such as production, capacity utilization, and shipments increased in the first relief year, as did labor

productivity. Per-unit net sales rose while per-unit costs fell (despite rising raw material costs), resulting

in improved financial performance.36

On December 4, 2003, President Bush terminated the U.S. measure with respect to increased

tariffs, following receipt of the Commission’s mid-point monitoring report in September 2003, and after

seeking information from the U.S. Secretary of Commerce and U.S. Secretary of Labor, having

determined that the effectiveness of the action taken had been impaired by changed circumstances.37

Import licensing, however, remained in place through March 21, 2005, and continues in modified form at

this time.38

On March 21, 2005, the Commission instituted an investigation under section 204(d) of the Trade

Act of 1974 for the purpose of evaluating the effectiveness of the relief action imposed by the President

on imports of certain steel products. The Commission’s report on the evaluation was transmitted to the

President and the Congress on September 19, 2005.

 32 Presidential Proclamation 7529 of March 5, 2002, To Facilitate Positive Adjustment to Competition From

Imports of Certain Steel Products, 67 FR 10553, March 7, 2002. 

 33 The increased duties were reduced from 30 percent to 24 percent on March 20, 2003.

 34 The Department of Commerce published regulations establishing such a system on December 31, 2002.

 35 Steel: Monitoring Developments in the Domestic Industry, Inv. No. TA-204-9, USITC Publication 3632,

September 2003.

 36 Steel: Monitoring Developments in the Domestic Industry, Inv. No. TA-204-9, Volume I, USITC Publication

3632, September 2003, p. ix.

 37 Presidential Proclamation 7741 of December 4, 2003, To Provide for the Termination of Action Taken With

Regard to Imports of Certain Steel Products, 68 FR 68483, December 8, 2003.

 38 Proclamation 7741 terminated the tariff-rate quota and the increased import duties on certain steel products, but

directed the Secretary of Commerce to continue the monitoring system until the earlier of March 21, 2005, or such

time as the Secretary establishes a replacement program. On March 11, 2005, Commerce published an interim final

rule to implement a replacement program for the period beyond March 21, 2005. Steel Import Monitoring and

Analysis System, 70 FR 12133, March 11, 2005. On December 5, 2005, Commerce published its final rule. Steel

Import Monitoring and Analysis System, 70 FR 72373, December 5, 2005.

I-15
STATUTORY CRITERIA AND ORGANIZATION OF THE REPORT

Statutory Criteria

Section 751(c) of the Act requires Commerce and the Commission to conduct a review no later

than five years after the issuance of an antidumping or countervailing duty order or the suspension of an

investigation to determine whether revocation of the order or termination of the suspended investigation

“would be likely to lead to continuation or recurrence of dumping or a countervailable subsidy (as the

case may be) and of material injury.”

Section 752(a) of the Act provides that in making its determination of likelihood of continuation

or recurrence of material injury--

(1) IN GENERAL.-- . . . the Commission shall determine whether

revocation of an order, or termination of a suspended investigation,

would be likely to lead to continuation or recurrence of material injury

within a reasonably foreseeable time. The Commission shall consider

the likely volume, price effect, and impact of imports of the subject

merchandise on the industry if the order is revoked or the suspended

investigation is terminated. The Commission shall take into account--

(A) its prior injury determinations, including the

volume, price effect, and impact of imports of the subject

merchandise on the industry before the order was issued

or the suspension agreement was accepted, 

(B) whether any improvement in the state of the

industry is related to the order or the suspension

agreement, 

(C) whether the industry is vulnerable to

material injury if the order is revoked or the suspension

agreement is terminated, and 

(D) in an antidumping proceeding . . .,

(Commerce’s findings) regarding duty absorption . . ..

(2) VOLUME.--In evaluating the likely volume of imports of the

subject merchandise if the order is revoked or the suspended

investigation is terminated, the Commission shall consider whether the

likely volume of imports of the subject merchandise would be significant

if the order is revoked or the suspended investigation is terminated,

either in absolute terms or relative to production or consumption in the

United States. In so doing, the Commission shall consider all relevant

economic factors, including--

(A) any likely increase in production capacity or

existing unused production capacity in the exporting

country, 

(B) existing inventories of the subject

merchandise, or likely increases in inventories, 

(C) the existence of barriers to the importation

of such merchandise into countries other than the United

States, and 

I-16
(D) 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.

(3) PRICE.--In evaluating the likely price effects of imports of

the subject merchandise if the order is revoked or the suspended

investigation is terminated, the Commission shall consider whether--

(A) there is likely to be significant price

underselling by imports of the subject merchandise as

compared to domestic like products, and 

(B) imports of the subject merchandise are likely

to enter the United States at prices that otherwise would

have a significant depressing or suppressing effect on

the price of domestic like products.

(4) IMPACT ON THE INDUSTRY.--In evaluating the likely

impact of imports of the subject merchandise on the industry if the order

is revoked or the suspended investigation is terminated, the Commission

shall consider all relevant economic factors which are likely to have a

bearing on the state of the industry in the United States, including, but

not limited to–

(A) likely declines in output, sales, market share,

profits, productivity, return on investments, and

utilization of capacity, 

(B) likely negative effects on cash flow,

inventories, employment, wages, growth, ability to raise

capital, and investment, and 

(C) likely negative effects on the existing

development and production efforts of the industry,

including efforts to develop a derivative or more

advanced version of the domestic like product.

The Commission shall evaluate all such relevant economic factors . . .

within the context of the business cycle and the conditions of competition

that are distinctive to the affected industry.

Section 752(a)(6) of the Act states further that in making its determination, “the Commission may

consider the magnitude of the margin of dumping or the magnitude of the net countervailable subsidy. If

a countervailable subsidy is involved, the Commission shall consider information regarding the nature of

the countervailable subsidy and whether the subsidy is a subsidy described in Article 3 or 6.1 of the

Subsidies Agreement.”

Organization of the Report

Information obtained during the course of the reviews that relates to the statutory criteria is

presented throughout this report. A summary of trade and financial data for hot-rolled steel as collected

in the reviews is presented in appendix C. U.S. industry data are based on the questionnaire responses of

I-17
14 U.S. producers of hot-rolled steel39 that are believed to have accounted for all or virtually all domestic

production of hot-rolled steel in 2010.40 U.S. import data and related information are based on

Commerce’s official import statistics and the questionnaire responses of 38 U.S. importers of hot-rolled

steel that are believed to have accounted for 82.8 percent of the total subject U.S. imports in 2010 and for

31.0 percent of total U.S. imports of hot-rolled steel from other sources. Foreign industry data and related

information are based on the questionnaire responses of 11 producers of hot-rolled steel: 3 producers in

Brazil, 5 producers in Japan, and 3 producers in Russia, collectively accounting for more than 90 percent

of 2010 production. Responses by U.S. producers, importers, purchasers, and foreign producers of hotrolled steel to a series of questions concerning the significance of the existing antidumping and

countervailing duty orders and suspension agreement and the likely effects of revocation of such orders

and suspension agreement are presented in appendix D. Appendix E presents the industry's financial

results using the following valuation methodology for internal consumption and transfers to related firms: 

the underlying cost of the hot-rolled steel plus the downstream product's gross profit as allocated based on

relative cost.

COMMERCE’S REVIEWS

Administrative Reviews41

The following tables present information on Commerce’s administrative reviews of the subject

orders.42

Brazil

Commerce has not completed any administrative reviews of the countervailing duty with regard

to subject imports of hot-rolled steel from Brazil.43

Commerce conducted one administrative review of the antidumping duty suspension agreement

on hot-rolled steel from Brazil. The period of review was July 19, 1999 to June 30, 2000 and the results

 39 Severstal North America reported data separately for its five establishments (Severstal Dearborn, Inc, Severstal

Columbus, LLC, Severstal Sparrows Point, LLC, Severstal Warren, Inc., and Severstal Wheeling, Inc.). Subsequent

to the submission of questionnaire responses, RG Steel LLC acquired three of these establishments (Severstal

Sparrows Point, LLC, Severstal Warren, Inc., and Severstal Wheeling, Inc.). 

One additional U.S. producer, Lone Star, which U.S. Steel closed down soon after acquiring it in 2007, did not

provide a questionnaire response in these reviews. Therefore, Staff utilized data from its questionnaire responses in

Hot-Rolled Steel Products from Argentina, China, India, Indonesia, Kazakhstan, Netherlands, Romania, South

Africa, Taiwan, Thailand, and Ukraine, Inv. Nos. 701-TA-404-408 and 731-TA-898-903 and 905-908 (Review) and

Certain Circular Welded Carbon Quality Steel Line Pipe from China and Korea, Inv. Nos. 701-TA-455 and 731-TA1149-1150 (Preliminary).

 40 Staff compared the U.S. producers that responded to the Commission's questionnaires to those producers

identified by the steel analysts at ***. See ***. According to this comparison, responding U.S. producers accounted

for 100 percent of hot strip rolling capacity in the United States in 2010.

 41 Commerce has not issued any duty absorption findings with respect to hot-rolled steel from the subject

countries.

 42 For previously reviewed or investigated companies not included in an administrative review, the cash deposit

rate continues to be the company-specific rate published for the most recent period.

 43 The latest review (initiated on October 28, 2010) was rescinded on February 10, 2011. Certain Hot-Rolled

Carbon Steel Flat Products From Brazil: Rescission of Countervailing Duty Administrative Review, 76 FR 7546

(February 10, 2011).

I-18
were published in the Federal Register on February 11, 2002.44 Commerce determined that CSN and

USIMINAS/COSIPA had violated the suspension agreement. Because these violations were not

inconsequential and frustrated the purposes of the Agreement, the suspension agreement was terminated. 

Since the termination of the suspension agreement, Commerce has completed three antidumping

duty administrative reviews with regard to subject imports of hot-rolled steel from Brazil. The results of

the administrative reviews are shown in table I-4. 

Table I-4

Hot-rolled steel: Administrative reviews of the antidumping duty order for Brazil

Date results published Period of review Producer or exporter Margin (percent)

Oct. 7, 2005 (70 FR 58683)

03/01/2003 -

02/29/2004

Companhia Siderurgica

Nacional 0.00

All others 42.12

Oct. 28, 2005 (70 FR 62297)

03/01/2004 -

08/31/2004

Companhia Siderurgica

de Tubarao 0.00

All others 42.12

Oct. 19, 2010 (75 FR 64254)

03/01/2008 -

02/28/2009

USIMINAS/COSIPA 5.16

All others 42.12

Source: Cited Federal Register notices.

Japan

Commerce has completed three antidumping duty administrative reviews with regard to subject

imports of hot-rolled steel from Japan. The results of the administrative reviews are shown in table I-5. 

Table I-5

Hot-rolled steel: Administrative reviews of the antidumping duty order for Japan

Date results published Period of review Producer or exporter Margin (percent)

Jan. 17, 2002 (67 FR 2408)

02/19/1999 - 

05/31/2000

Kawasaki Steel

Corporation 0.00

All others 22.92

June 1, 2006 (71 FR 31157)

06/01/2004 - 

05/31/2005

JFE Steel Corporation 40.26

Kawasaki Steel

Corporation 40.26

June 11, 2009 (74 FR 27775)

06/01/2007 - 

05/31/2008

JFE Steel Corporation 40.26

Kobe Steel Ltd. 40.26

Nippon Steel Corporation 40.26

All others 22.92

Source: Cited Federal Register notices.

 44 Certain Hot-Rolled Flat-Rolled Carbon Quality Steel Products From Brazil: Final Results of Antidumping

Duty Administrative Review and Termination of the Suspension Agreement, 67 FR 6226 (February 11, 2002). 

I-19
Russia

Commerce has not conducted any administrative reviews of the suspended antidumping duty

investigation on imports of hot-rolled steel from Russia. 

Five-Year Reviews

Commerce has issued the final results of its reviews with respect to all subject countries. Table

I-6 presents the countervailable subsidy margins and table I-7 presents the dumping margins calculated by

Commerce in its original investigations, first reviews, and second reviews.45

Table I-6

Hot-rolled steel: Commerce’s original, first, and second five-year review countervailable subsidy

margins for producers/exporters, by subject country

Producer/exporter

Original margin

(percent)

First five-year

review margin

(percent)

Second five-year

review margin

(percent)

Brazil1

CSN 6.35 6.35 0.00

USIMINAS/COSIPA 9.67 9.67 0.00

All others 7.81 7.81 0.00

 1 Countervailing duty order, 64 FR 38742, July 19, 1999; suspension of countervailing duty investigation, 64 FR

38797, July 19, 1999; final results of Commerce’s first review, 69 FR 70655, December 7, 2004; final results of

Commerce's second review, 75 FR 75455, December 3, 2010. In its second review, Commerce determined that

while all countervailable benefits had been allocated (resulting in the zero rate), revocation of the order was not

appropriate because subsidy programs had not terminated. See Memorandum from Susan H. Kuhbach to Ronald

K. Lorentzen, November 29, 2010.

Source: Cited Federal Register notices.

 45 With respect to countervailable subsidies, Commerce identified the following government programs in Brazil:

C Pre-1992 Equity Infusions;

C Debt-to-Equity Conversions Provided by COSIPA in 1992 and 1993; and

C Debt-to-Equity Conversion Provided by CSN in 1992.

I-20
Table I-7

Hot-rolled steel: Commerce’s original, first, and second five-year review dumping margins for

producers/exporters, by subject country

Producer/exporter

Original margin

(percent)

First five-year review

margin (percent)

Second five-year

review margin

(percent)

Brazil1

CSN 41.27 41.27 41.27

USIMINAS/COSIPA 43.40 43.40 43.40

All others 42.12 42.12 42.12

Japan2

Nippon Steel Corporation 19.65 18.37 19.95

NKK Corporation 17.68 17.70 17.70

Kawasaki Steel Corporation 67.14 40.26 40.26

All others 29.30 22.92 22.92

Russia3

JSC Severstal 73.59 73.59 73.59

All others 184.56 184.56 184.56

 1 Antidumping duty order, 64 FR 38756, July 19, 1999; suspension of antidumping duty investigation, 64 FR 38792,

July 19, 1999; final results of Commerce’s first review, 69 FR 54631, September 9, 2004; final results of Commerce’s

second review, 75 FR 47541, August 6, 2010.

 2

 Antidumping duty order, 64 FR 24329, May 6, 1999; final results of Commerce’s first review, 69 FR 61792, October

21, 2004; final results of Commerce’s second review, 75 FR 47541, August 6, 2010.

 3

 Antidumping duty order, 64 FR 38626, July 19, 1999; suspension of antidumping duty investigation, 64 FR 38642,

July 19, 1999; final results of Commerce’s first review, 69 FR 54633, September 9, 2004; final results of Commerce’s

second review, 75 FR 47263, August 5, 2010.

Source: Cited Federal Register notices.

DISTRIBUTION OF CONTINUED DUMPING AND SUBSIDY OFFSET ACT FUNDS

The Continued Dumping and Subsidy Offset Act of 2000 (“CDSOA”) (also known as the Byrd

Amendment) provides that assessed duties received pursuant to antidumping or countervailing duty

orders must be distributed to affected domestic producers for certain qualifying expenditures that these

producers incur after the issuance of such orders.46 During the review period, qualified U.S. producers of

hot-rolled steel were eligible to receive disbursements from the U.S. Customs and Border Protection

(“Customs”) under CDSOA relating to the orders covering the subject merchandise beginning in Federal

fiscal year 2001.47 Tables I-8 and I-9 present CDSOA disbursements and claims for Federal fiscal years

2005-10, by source and by firm, respectively.48

 46 Section 754 of the Tariff Act of 1930, as amended (19 U.S.C. § 1675(c)). The Deficit Reduction Act of 2005

repealed the CDSOA with respect to duties on entries of goods made and filed on or after October 1, 2007. See Pub.

L. No. 109-171, 120 Stat. 4, 154 (2006).

 47 19 CFR 159.64 (g).

 48 The Federal fiscal year begins on October 1 and ends on September 30 of the next calendar year.

I-21
Table I-8

Hot-rolled steel: CDSOA disbursements, by source, Federal fiscal years 2005-10

Item

Federal fiscal year

2005 2006 2007 2008 2009 2010

Disbursements (dollars)

Brazil1 (

2

) (2) 468 13,804 (2) (2)

Japan3 307,434 1,881,139 2,136,043 2,055,130 777,228 444,631

Russia (2

) (2) (2) (2) (2) (2)

 Total 307,434 1,881,139 2,136,511 2,068,934 777,228 444,631

 1 During 2007-08, U.S. Customs withheld a total of $90.49 due to either administrative actions or pending

litigation.

 2

 No disbursement for this period.

 3

 During 2006 and 2008-10, U.S. Customs withheld a total of $62,424.36 due to either administrative actions or

pending litigation.

Note.--Because of rounding, figures may not add to the totals shown.

Source: U.S. Customs and Border Protection’s CDSOA Annual Reports. Retrieved from

www.cbp.gov/xp/cgov/import/add_cvd.

Table I-9

Hot-rolled steel: CDSOA disbursements, by firm, and total claims, Federal fiscal years 2005-10

Item

Federal fiscal year

2005 2006 2007 2008 2009 2010

Disbursements (dollars)

ArcelorMittal USA Inc.1 89,971 567,175 589,461 486,668 182,570 104,445

California Steel Industries 11,533 70,156 77,548 71,160 26,757 15,307

Evraz Inc. NA (2

) (2) (2) (3) (3) (3)

Gallatin Steel Co. 13,162 83,495 95,478 88,918 33,433 19,127

IPSCO Steel Inc./SSAB 

Iowa Inc.1 4,592 30,447 36,530 32,341 12,160 6,957

Nucor Corp 75,155 458,879 530,221 506,546 190,462 108,960

Severstal North America

Inc.1 34,657 165,622 188,233 325,876 122,530 70,097

Steel Dynamics Inc. 17,377 110,704 129,331 120,617 45,352 25,945

United States Steel Corp. 60,987 394,661 489,710 436,807 163,963 93,793

 Total 307,434 1,881,139 2,136,511 2,068,934 777,228 444,631

Claims (1,000 dollars)

 Total 158,097,203 194,073,763 232,048,896 247,818,554 247,811,901 247,808,286

 1

 Consolidated.

 2

 The company was not listed that year.

 3

 No disbursement for this period.

Note.--Because of rounding, figures may not add to the totals shown.

Source: U.S. Customs and Border Protection’s CDSOA Annual Reports. Retrieved from

www.cbp.gov/xp/cgov/import/add_cvd.

I-22
THE SUBJECT MERCHANDISE

Commerce’s Scope

The products subject to the countervailing duty order, antidumping duty orders, and suspension

agreement under review, as defined by Commerce, are certain hot-rolled flat-rolled carbon-quality steel

products of a rectangular shape, of a width of 0.5 inch (1.27 cm) or greater, neither clad, plated, nor

coated with metal and whether or not painted, varnished, or coated with plastics or other non-metallic

substances, in coils (whether or not in successively superimposed layers)49 regardless of thickness, and in

straight lengths, of a thickness less than 4.75 mm and of a width measuring at least 10 times the

thickness.50 Specifically included are vacuum degassed, fully stabilized (commonly referred to as

interstitial-free or “IF”) steels, high strength low alloy (“HSLA”) steels, and the substrate for motor

lamination steels.51 Those steel products within the scope definition that are outside the traditional

definitions of carbon steel will be referred to, collectively, as “microalloyed” steel in this report.52

Products included in the scope of these reviews, regardless of HTSUS definitions,53 are products

in which: (1) iron predominates, by weight, over each of the other contained elements; (2) the carbon

content is 2 percent or less, by weight; and (3) none of the elements listed below exceeds the quantity, by

weight, respectively indicated: 

1.80 percent of manganese, or 1.25 percent of nickel, or 

1.50 percent of silicon, or 0.30 percent of tungsten, or 

1.00 percent of copper, or 0.012 percent of boron, or 

0.50 percent of aluminum, or 0.10 percent of molybdenum, or 

1.25 percent of chromium, or 0.10 percent of niobium, or 

0.30 percent of cobalt, or 0.41 percent of titanium, or

0.40 percent of lead, or 0.15 percent of vanadium, or 

0.15 percent of zirconium. 

All products that meet the physical and chemical description provided above are within the scope of these

reviews unless otherwise excluded.54

 49 This language, “whether or not in successively superimposed layers,” differs from the Harmonized Tariff

Schedule of the United States (“HTSUS”) definition of flat-rolled products, which includes coiled product only in

successively superimposed layers. Product coiled differently, such as narrow product in spirally oscillated coils, that

is, wound back and forth across a spool, does not meet the definition of flat-rolled products. Spirally oscillated coils

would be classified as a bar product in the HTSUS. See, e.g., Customs Ruling letters NY 87847 Feb. 21, 2002 and

NY R03189, February 23, 2006. 

 50 Universal mill plate (i.e., flat-rolled products rolled on four faces or in a closed box pass, of a width exceeding

150 mm but not exceeding 1250 mm and of a thickness of not less than 4 mm, not in coils and without patterns in

relief) is not included within the scope of these reviews.

 51 IF steels are recognized as low-carbon steels with micro-alloying levels of elements such as titanium and/or

niobium added to stabilize carbon and nitrogen elements. HSLA steels are recognized as steels with micro-alloying

levels of elements such as chromium, copper, niobium, titanium, vanadium, and molybdenum. The substrate for

motor lamination steels contains micro-alloying levels of elements such as silicon and aluminum. 

 52 The Commission found these products to be part of the domestic like product during the original investigations. 

 53 The HTSUS subheadings appear in the section of this report entitled “Tariff Treatment.”

 54 The following are excluded by Commerce: alloy hot-rolled steel products in which at least one of the chemical

elements exceeds those listed above (including e.g., ASTM specifications A543, A387, A514, A517, and A506);

SAE/AISI grades of series 2300 and higher; ball bearing steels, as defined in the HTSUS; tool steels, as defined in

the HTSUS; silicomanganese (as defined in the HTSUS) or silicon electrical steel with a silicon level exceeding 1.50

(continued...)

I-23
Tariff Treatment

The subject merchandise is provided for in headings 7208, 7210, 7211, 7212, 7225, and 7226 of

the HTSUS.55 U.S. tariffs on hot-rolled steel ranged as high as 4.8 percent ad valorem in 1999. As a

 54 (...continued)

percent; ASTM specifications A710 and A736; and USS abrasion-resistant steels (USS AR 400, USS AR 500). In

addition, hot-rolled steel which meets the following chemical (in percent by weight), physical, and mechanical

specifications also are excluded: 

• Product (1): Carbon 0.10-0.14 percent, Manganese 0.90 percent maximum, Phosphorus 0.025 percent maximum,

Sulphur 0.005 percent maximum, Silicon 0.30-0.50 percent, Chromium 0.50-0.70 percent, Copper 0.20-0.40

percent, Nickel 0.20 percent maximum, Width = 44.80 inches maximum; Thickness = 0.063-0.198 inches; Yield

Strength = 50,000 psi minimum; and Tensile Strength = 70,000-88,000 psi.

• Product (2): Carbon 0.10-0.16 percent, Manganese 0.70-0.90 percent, Phosphorus 0.025 percent maximum,

Sulphur 0.006 percent maximum, Silicon 0.30-0.50 percent, Chromium 0.50-0.70 percent, Copper 0.25 percent

maximum, Nickel 0.20 percent maximum, Molybdenum 0.21 percent maximum, Width = 44.80 inches maximum;

Thickness = 0.350 inches maximum; Yield Strength = 80,000 psi minimum; and Tensile Strength = 105,000 psi. 

• Product (3): Carbon 0.10-0.14 percent, Manganese 1.30-1.80 percent, Phosphorus 0.025 percent maximum,

Sulphur 0.005 percent maximum, Silicon 0.30-0.50 percent, Chromium 0.50-0.70 percent, Copper 0.20-0.40

percent, Nickel 0.20 percent maximum, Vanadium 0.10 maximum (wt), Cb 0.08 percent maximum, Width = 44.80

inches maximum; Thickness = 0.350 inches maximum; Yield Strength = 80,000 psi minimum; and Tensile

Strength = 105,000 psi Aim. 

• Product (4) Carbon 0.15 percent maximum, Manganese 1.40 percent maximum, Phosphorus 0.025 percent

maximum, Sulphur 0.01 percent maximum, Silicon 0.50 percent maximum, Chromium 1.00 percent maximum,

Copper 0.50 percent maximum, Nickel 0.50 percent maximum, Niobium 0.005 percent maximum, Aluminum

0.01-0.07 percent, Treated with Ca, Width = 39.37 inches; Thickness = 0.181 inches maximum; Yield Strength =

70,000 psi minimum for thicknesses less than or equal to 0.148 inches and 65,000 psi minimum for thicknesses >

0.148 inches; and Tensile Strength = 80,000 psi minimum. 

• Product (5) Hot-rolled dual phase steel, phase-hardened, primarily with a ferritic-martensitic microstructure,

containing 0.9 percent up to and including 1.5 percent silicon by weight, further characterized by either (i) tensile

strength between 540 N/mm2

 and 640 N/mm2 and an elongation percentage greater than or equal to 26 percent for

thicknesses of 2 mm and above, or (ii) a tensile strength between 590 N/mm2 and 690 N/mm2

 and an elongation

percentage greater than or equal to 25 percent for thicknesses of 2mm and above. 

• Product (6) Hot-rolled bearing quality steel, SAE grade 1050, in coils, with an inclusion rating of 1.0 maximum

per ASTM E 45, Method A, with excellent surface quality and chemistry restrictions as follows: 0.012 percent

maximum phosphorus, 0.015 percent maximum sulfur, and 0.20 percent maximum residuals including 0.15

percent maximum chromium. 

• Product (7) Grade ASTM A570-50 hot-rolled steel sheet in coils or cut lengths, width of 74 inches (nominal,

within ASTM tolerances), thickness of 11 gauge (0.119 inch nominal), mill edge and skin passed, with a minimum

copper content of 0.20 percent.

 55 Non-alloy hot-rolled flat-rolled steel is imported under the following statistical reporting numbers of the

HTSUS: 7208.10.1500, 7208.10.3000, 7208.10.6000, 7208.25.3000, 7208.25.6000, 7208.26.0030, 7208.26.0060,

7208.27.0030, 7208.27.0060, 7208.36.0030, 7208.36.0060, 7208.37.0030, 7208.37.0060, 7208.38.0015,

7208.38.0030, 7208.38.0090, 7208.39.0015, 7208.39.0030, 7208.39.0090, 7208.40.6030, 7208.40.6060,

7208.53.0000, 7208.54.0000, 7208.90.0000, 7210.70.3000, 7210.90.9000, 7211.14.0030, 7211.14.0090,

7211.19.1500, 7211.19.2000, 7211.19.3000, 7211.19.4500, 7211.19.6000, 7211.19.7530, 7211.19.7560,

7211.19.7590, 7212.40.1000, 7212.40.5000, 7212.50.0000. Certain hot-rolled flat-rolled carbon-quality steel

covered by this order, including vacuum degassed, fully stabilized steel, high strength low alloy steel, and the

substrate for motor lamination steel may also enter under the following provisions: 7225.11.0000, 7225.19.0000,

7225.30.3050, 7225.30.7000, 7225.40.7000, 7225.99.0090, 7226.11.1000, 7226.11.9030, 7226.11.9060,

7226.19.1000, 7226.19.9000, 7226.91.5000, 7226.91.7000, 7226.91.8000, and 7226.99. Although the HTSUS

statistical reporting numbers are provided for convenience and customs purposes, the written description of the

(continued...)

I-24
result of the U.S. tariff concessions in the World Trade Organization (WTO), U.S. tariffs on hot-rolled 

steel were reduced in stages, beginning in 1995, and were eliminated beginning in 2004.

THE PRODUCT

Description and Applications56

Steel is generally defined as a combination of carbon and iron that is usefully malleable as first

cast, and in which iron predominates, by weight, over each of the other contained elements and the carbon

content is two percent or less, by weight.57 Carbon steel includes most common grades of steel and is

generally less expensive to produce than the various grades of alloy steels, due primarily to the cost of the

alloying elements. 

The majority of hot-rolled steel production is consumed internally or transferred to affiliates for

downstream processing into cold-rolled and/or galvanized or plated products, cut-to-length plate, or

welded pipe. The remainder is sold commercially to end users, service centers, and to steel processors for

conversion into downstream steel products, including cold-rolled steel, coated steel, and pipe products. 

Information summarizing the channels of distribution for hot-rolled steel is presented in Part II. 

Hot-rolled steel is used in general structural functional areas where surface finish and light weight

are not crucial. Such steel is well suited for and extensively used in automotive applications such as body

frames and wheels, pipes and tubes, and floor decks in steel construction. Hot-rolled steel also is used in

transportation equipment (such as rail cars, ships, and barges), non-residential construction, appliances,

heavy machinery, and machine parts. Although uses of hot-rolled steel include applications where

surface finish and lightweight have not been crucial, “lightweighting” is becoming increasingly

important. As a result, producers are striving to produce higher-strength steel in thinner thicknesses in

order to substitute for regular-strength hot-rolled or even for cold-rolled steel in thicknesses of 2 mm or

less. High-strength, low-alloy (“HSLA”) steels are used in structural applications for the construction,

automotive, machinery, and equipment industries where strength and other attributes are important. 

IF steel is low-carbon steel having unique deep-drawing ability on stamping presses.58 Steel may compete

against other materials, such as aluminum, plastics, and advanced composites.

Common material specifications for hot-rolled steel are ASTM A1011, which applies to products

less than 0.230 inch in thickness, and ASTM A1018, which applies to material 0.230 inch or greater in

thickness. Both specifications cover hot-rolled carbon steel, including commercial steel, drawing quality

steel, high-strength low-alloy steel, and ultra-high strength steel sheet and strip, in coils and cut lengths

(coils only for A1018). 

 55 (...continued)

merchandise under order is dispositive.

 56 Unless otherwise noted, the information in this section is drawn from Certain Hot-Rolled Steel Products from

Japan, Inv. No. 731-TA-807 (Final), USITC Publication 3202, June 1999, pp. I-4-9, and Certain Hot-Rolled FlatRolled Carbon-Quality Steel Products From Brazil, Japan, and Russia: Investigations Nos. 701-TA-384 and 731-

TA-806-808 (Review), USITC Publication 3767, April 2005, pp. I-17-21. 

 57 Harmonized Tariff Schedule of the United States (2011), chap. 72, note 1(d), Steel: Ferrous materials other

than those of heading 7203 which (with the exception of certain types produced in the form of castings) are usefully

malleable and which contain by weight 2 percent or less of carbon. However, chromium steels may contain higher

proportions of carbon. 

 58 Certain Hot-Rolled Steel Products from Japan, Inv. No. 731-TA-807 (Final), USITC Publication 3202, June

1999, p. I-9.

I-25
Manufacturing Processes59

The manufacturing processes for certain hot-rolled steel products are summarized below. In

general, the production of hot-rolled steel encompasses three distinct stages: (1) melting and refining, (2)

casting molten steel into semi-finished forms, and (3) hot-rolling semi-finished forms into flat-rolled

carbon steel mill products.

Steel’s major production inputs are coke, iron ore, limestone, and scrap. Coke is a refined carbon

product produced by baking coal to drive off volatile matter, and is the principal fuel used to produce hot

metal in blast furnaces. Iron ore is melted to produce liquid metal. Limestone is used to flux the liquid

metal, thus purifying it. Scrap is used for a portion of the basic oxygen furnace charge; hot metal

accounts for the remainder. In addition, scrap is a major input for electric arc furnace (EAF) production. 

Scrap contains non-ferrous tramp elements so production that uses a lower ratio of scrap to hot metal can

generate the clean, pure steel often required for certain value-added applications.

Melt Stage 

Steel for the manufacture of hot-rolled steel products is produced from raw materials by either an

“integrated” or “nonintegrated” process. The nonintegrated, or scrap-based, process produces molten

steel by melting scrap or scrap substitutes in an EAF.60 In an integrated process, iron ore (the principal

iron-containing raw material) is smelted in a blast furnace, using coke, usually supplemented with coal,

natural gas, or fuel oil, to produce molten pig iron, which is drained into a large ladle and transported to

an oxygen steelmaking furnace. The molten pig iron is poured into a steelmaking furnace, together with a

lesser amount of steel scrap and flux materials such as burnt lime, burnt dolomite, and fluorspar. Highpurity oxygen is injected into the furnace and reacts with dissolved carbon and other impurities in the

charge materials, raising the temperature to that necessary for further processing. Molten steel is poured

or “tapped” from the furnace to a ladle to be transported to a ladle metallurgy station and then to casting.

In a “nonintegrated” process, the principal source of iron is steel scrap, and melting occurs in an

electric-arc furnace. Primary iron products including cold pig iron, direct-reduced iron and hot-briquetted

iron are also used as raw materials in electric-arc furnace steelmaking.61 The charge materials are melted

by electrical current passing though an arc between an electrode and the material in the furnace. Oxygen

is also used to oxidize impurities, but at a fraction of the amounts used in oxygen steelmaking. After

melting, the molten steel is tapped into a ladle for further processing.

Whether integrated or nonintegrated, steelmakers typically utilize a secondary steelmaking stage,

also called a ladle metallurgy station. Shifting the final refining stages to the ladle metallurgy station

allows shorter cycles in the primary steelmaking vessel, effectively raising steelmaking capacity. Special

ladle treatments include ladle desulfurization and vacuum degassing, which improve steel cleanliness,

formability, surface quality, chemistry, and strength. Steelmakers employ additional techniques to refine

the product further into extra-clean or low-carbon steels. These refinements are needed to satisfy

 59 Unless otherwise noted, the information in this section is drawn from Certain Hot-Rolled Steel Products from

Japan, Inv. No. 731-TA-807 (Final), USITC Publication 3202, June 1999, pp. I-4-9, and Certain Hot-Rolled FlatRolled Carbon-Quality Steel Products From Brazil, Japan, and Russia: Investigations Nos. 701-TA-384 and 731-

TA-806-808 (Review), USITC Publication 3767, April 2005, pp. I-17-21. 

 60 To control product quality further, newer thin-slab flat-rolled mills are using to various degrees scrap

substitutes such as direct-reduced iron, hot-briquetted iron, and iron carbide.

 61 Because scrap is generally considered to be the main raw material for electric-arc steelmaking and these

primary iron products reduce the amount of scrap needed, they are often referred to as “scrap substitutes.” Their use

depends upon their prices relative to that of scrap and upon particular end-product-related requirements for material

containing smaller amounts of undesirable elements than does scrap.

I-26
stringent surface or internal requirements or microcleanliness quality and mechanical properties.62

Steelmakers may adjust the chemical content by adding alloying elements or by lowering the carbon

content (decarburization), or adjusting the temperature of the steel for optimum casting. While carbon

content may be reduced further by subsequent hydrogen annealing of the coiled steel, the steel’s essential

characteristics are established prior to the casting stage. 

Slab Casting Stage

Following the production of molten steel with the desired properties, the steel is cast into a form

that can enter the rolling process. Continuous casters convert molten steel into slabs for rolling into

finished product. The vast majority of carbon sheet steels produced in the United States are continuously

cast.63 There are two broad categories of continuous casting used by most U.S. and foreign integrated

producers of hot-rolled steel products: conventional or thick-slab continuous casters and thin-slab casters. 

The conventional process is used by most U.S. integrated producers, whereas most of the nonintegrated

facilities use thin- or thinner-slab casting processes. Differences between thin-slab casting and

conventional continuous-strand slab casting include the shape of the casting mold, the desired thickness

of the slab, and the linkage of steel casting with direct hot rolling.64 One benefit of thin slab casting is

that it eliminates the need for a reheat furnace. 

Rolling Stage

Hot-rolled carbon steel flat products are produced on hot-strip mills. Essential components of a

hot-strip mill are a rolling mill, a run-out table for cooling the hot-rolled strip after rolling, and equipment

to coil the strip. Depending upon the planned capacity of the operation, the thickness of the slabs entering

the mill, and properties of the hot-rolled coil to be produced, there are many different configurations of

hot-strip mills. When rolling from a thick slab, as described above, there is normally slab heating

furnace, a roughing train consisting of several rolling stands (sets of rollers), typically four to five, that

reduce the slab or a single reversing stand in which the slab is passed back and forth through the stand

and a finishing train with an additional four to seven stands to further reduce the thickness and impart the

desired surface finish to the steel. The steel then exits the finishing train onto a runout table where the

product is subjected to a combination of water sprays, laminar jets, and/or air cooling to remove mill scale

and reduce the temperature of the steel. The steel is then coiled at the end of the runout table. Hot-rolled

steel destined for the sheet market can be either shipped as black band, or cleaned in an acid bath and sold

as pickled band. These products are used in non-critical surface applications such as automotive frames

and wheels, construction products, pipe, off-highway equipment, and guardrails.

“Thin” slabs are typically 2 to 3 inches in thickness, and are transferred directly from the casting

operation to the rolling mill. Because thin slabs require fewer rolling passes than thick slabs, the

roughing mill may be not be required and the finishing train may be a single, reversing mill rather than a

 62 The goals of secondary steelmaking include controlling gases (e.g., decreasing the concentration of oxygen,

hydrogen, and nitrogen, called “degassing”), reducing sulfur, removing undesirable nonmetallic inclusions such as

oxides and sulfides, changing the composition and/or shape of oxides and sulfides that cannot be completely

removed, and improving the mechanical properties of the finished steel. U.S. Steel, The Making, Shaping and

Treating of Steel, p. 671. 

 63 Continuous slab casting bypasses several steps of the conventional ingot casting process by casting steel

directly into semifinished shapes, called slabs, in the desired cross-sectional dimensions. The many benefits derived

from this quicker casting method include increased yield, improved product quality, decreased energy consumption,

and less pollution. U.S. Steel, The Making, Shaping and Treating of Steel, p. 745S746. 

 64 For a description of thin-slab casting processes, See “Thin-Slab Casting and Rolling,” Steel Times

International, July 1998, pp. 28-30. 

I-27
series of in-line mills as described above. The reversing mill would be of the “Steckel” type, having the

ability to coil the strip between passes in special furnaces on each side of the mill, in order to conserve

temperature.65

Using a newly developed process, twin-roll strip casting, Nucor has built two facilities that cast a

solid strip approximately 2 mm thick directly from a pool of molten steel established between two

counter-rotating rolls. The strip is fed directly into a single hot-rolling mill for reduction to final

thickness and then along a cooling table to a coiler. The first of these new facilities started up in 2002

and the second, more advanced unit, started up in 2009.66 Advantages claimed for the twin-roll strip

casting process in comparison to conventional thick-slab or thin-slab processing include the capability to

economically produce hot-rolled steel 1 to 2 mm in thickness, which can be used in some applications as

a substitute for more expensive cold-rolled steel. In addition, a steel plant incorporating the twin-roll strip

casting practice may be built at a much lower capital cost, with a lower economic capacity, than a

conventional hot-rolling plant.67

Broadly speaking, a producer of hot-rolled steel may be considered to be: (1) an integrated mill,

producing steel from iron ore and a limited amount of scrap, and with a thick slab casting and rolling

operation; (2) a “mini” or electric furnace mill, producing steel from purchased scrap and supplemented

with primary iron products (scrap substitutes), usually with a thin slab casting and rolling operation; or

(3) a rolling-only operation, with no on-site steelmaking, using slabs purchased from other steelmakers

(usually imported). Each of these three types of operations has an inherent cost structure that differs from

the other two; an integrated producer typically has the highest fixed costs and the highest value added in

its cost structure; a mini-mill generally has higher raw material costs but less value added; and a rollingonly operation has the lowest value added but the highest raw material cost. In the United States, the

rolling-only operations until recently comprised a number of locations that, at one time, had integrated

steelmaking facilities, but the operator shut down the steelmaking and continued to operate the rolling

mills. Recently, however, a new rolling-only plant has been built by ThyssenKrupp Steel USA in Calvert

City, AL, that will roll slabs imported from a related company in Brazil. 

Subsequent Operations

Hot-rolled steel may undergo a number of subsequent processes before being used internally by a

steel producer or sold. Processing subsequent to hot-rolling may include a temper pass to improve

surface finish, gauge tolerance, and coil tightness; pickling and light oil coating;68 and operations that

level, slit, or shear hot-strip mill products to width or length. If the hot-rolled product is designated for

cold-reduction and coating, it is first pickled. In the pickling process, the hot-rolled steel product is

subjected to a series of acid baths that essentially remove the oxides on the surface that result from

exposure to water and the atmosphere. The steel is then treated with an oil that is compatible with the

 65 The primary distinction lies in the placement of a heated coilbox on either side of a single stand reversing mill. 

For additional details on Steckel mills, See Certain Carbon Steel Plate from China, Russia, South Africa, and

Ukraine, Invs. Nos. 731-TA-753-756 (Final), USITC Publication 3076, December 1997.

 66 In 1988, BHP Steel of Australia and Ishikawajima-Harima Heavy Industries (“IHI”) of Japan began a

collaborative effort to determine the commercial feasibility of twin-roll strip casting of steel. BHP and IHI needed a

partner with the ability to commercialize the process (trademarked as “Castrip”) and in 2000 Nucor Corp. joined

BHP and IHI to form Castrip LLC. Castrip LLC owns the technology and Nucor Corp. has the exclusive license to

the process in the United States. For more information on the Castrip® process, see Castrip LLC’s website,

www.castrip.com. 

 67 Castrip LLC’s website, www.castrip.com, accessed March 15, 2011.

 68 During the hot-rolling process, exposure to water and air results in the formation of oxides on the surface of the

steel. Pickling involves passing the hot-rolled product through a series of acid baths to remove the oxides. The

material is then dried and oiled to prevent reformation of oxides, and recoiled. 

I-28
mill’s cold-reduction mill, cold-reduced,69 annealed, and temper passed. It might then be coated with a

metallic coating.70 Pickling, oiling, tempering, leveling, slitting, or shearing can take place at the mill;

alternatively, a mill can arrange for these operations to be performed at a nearby service center.71 Steel

service centers serve as distributors of flat-rolled steel products. Many service centers maintain extensive

inventories of a variety of steel products, providing availability and inventory management services for

customers of all sizes, including those with smaller purchasing needs that must place low-volume orders. 

Some service centers perform value-added processing, such as uncoiling, flattening, and cutting flatrolled products to length or burning hundreds of intricate parts from a single sheet.

DOMESTIC LIKE PRODUCT ISSUES

In its original determinations, the Commission defined the domestic like product as consisting of

all hot-rolled steel, as defined in Commerce’s scope.72 In its notice of institution in these current five-year

reviews, the Commission solicited comments from interested parties regarding the appropriate domestic

like product and domestic industry.73 The domestic producers indicated in their response to the

Commission’s notice of institution in these second five-year reviews that they “do not object” to the

Commission’s definitions of domestic like product74 and domestic industry and Russian producer

Severstal indicated that it agrees with the Commission’s definitions. Respondents JFE Steel Corp.

(“JFE”) and Nippon Steel Corp. (“NSC”) stated in their response that they would like to reserve the

opportunity to comment with respect to the definitions in any full review.75 Companhia Siderurgica

Nacional and Companhia Siderurgica Nacional LLC (“CSN”), Open Joint Stock Company Magnitogotsk

Iron and Steel Works (“MMK”), and Novolipetsk (“NLMK”) stated that they take no position on the

definitions and USIMINAS did not indicate its position in its response.76 No party requested that the

Commission collect data concerning other possible domestic like products in their comments on the

Commission’s draft questionnaires or in subsequent submissions.

 69 Cold-reduction rolling involves a fairly large reduction in the thickness of the hot-rolled material, typically

ranging from 25 to 90 percent. The term “cold-rolling” refers to any process in which the product is fed into a

rolling mill at ambient temperature. Cold-rolling can be performed for a variety of reasons, including a desired

reduction in product thickness, a need to impart specific mechanical properties, or to impart a specific surface

texture. A cold-rolling mill typically has five to seven roll stands. 

 70 Flat-rolled steel products are coated with metals or nonmetallic substances to improve their aesthetics, reduce

final product cost, improve corrosion resistance, and anticipate the requirements of downstream forming operations. 

 71 Certain Hot-Rolled Steel Products from Japan, Inv. No. 731-TA-807 (Final), USITC Publication 3202, June

1999, p. I-8. 

 72 Certain Hot-Rolled Steel Products from Japan, Inv. No. 731-TA-807 (Final), USITC Publication 3202, June

1999, p. 5.

 73 Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil, Japan, and Russia, 75 FR 16504, April 1,

2010.

 74 ArcelorMittal’s prehearing brief, p. 7, U.S. Steel’s prehearing brief, p. 11

 75 Respondents did not further address the definition of domestic like product.

 76 Response of the domestic interested parties, May 3, 2010, p. 38; Response of Severstal p. 10, Response of JFE,

p. 8; Response of NSC, p. 9; Response of CSN, p. 10; Response of MMK, p. 8; Response of NLMK, p. 9.

I-29
U.S. MARKET PARTICIPANTS

U.S. Producers

The domestic hot-rolled steel industry has experienced a number of changes since the

Commission’s original investigations of hot-rolled steel in 1999. Since that time, the domestic industry

has restructured, with bankruptcies, consolidations, and reorganizations having changed the composition

of domestic production. In the original investigations, the Commission received questionnaire responses

of 24 of 28 U.S. producers that accounted for an estimated 95 percent of production of the domestic like

product during 1998.77 The original 12 petitioning producers represented *** percent of total reported

1998 production.78 In the Commission's first five-year reviews, 18 mills, representing nearly all

production of hot-rolled steel in the United States, provided the Commission with data on their hot-rolled

steel operations.79 In these current proceedings, the Commission issued producers’ questionnaires to all

known domestic producers, all of which provided the Commission with information on their hot-rolled

steel operations. These firms are believed to account for all or virtually all U.S. production of hot-rolled

steel in 2010.80 Presented in table I-10 is a list of current domestic producers of hot-rolled steel and each

company’s position on continuation of the orders, production location(s), related and/or affiliated firms,

and share of reported production of hot-rolled steel in 2010.81

 77 The Commission identified 28 known U.S. producers that were active at any time during original investigations

including: Acme, AK, Armco, Beta, Bethlehem, Caparo, CSI, DSC, Gallatin, Geneva, Gulf States, IPSCO,

Ispat/Inland, Lone Star, LTV, National, Newport, North Star/BHP, Nucor, Oregon, Rouge, SDI, TRICO,

Tuscaloosa, USX, WCI, Weirton, and WPS.

 78 Certain Hot-Rolled Steel Products from Japan, Invs. Nos. 731-TA-807 (Final), USITC Publication 3202, June

1999, p. III-1, and Investigations Nos. 701 -TA-384 & 73 1 -TA-806-808 (Final): Certain Hot-rolled Steel Products

from Brazil, Japan, and Russia--Staff Report, INV-W-113, May 27, 1999, p. III-1.

 79 The 18 U.S. producers that supplied the Commission with usable questionnaire information during the first

reviews were: AK, Beta, California Steel Industries, Duferco, Gallatin, IPSCO, ISG, Lone Star, Ispat Inland, North

Star, NSG, Nucor, Oregon, SDI, Severstal, USS, WCI, and WPS.

 80 Staff compared the U.S. producers that responded to the Commission’s questionnaires to those producers

identified by the steel analysts at ***. See ***. According to this comparison, responding U.S. producers accounted

for 100 percent of hot strip rolling capacity in the United States in 2010.

 81 The following firms operate mini-mills: Gallatin, NLMK Beta, North Star Bluescope, Nucor, Severstal

Columbus, SSAB Enterprises, and Steel Dynamics; the following firms operate integrated mills: AK Steel,

ArcelorMittal, Severstal Dearborn, Severstal Sparrows Point, Severstal Warren, Severstal Wheeling, and U.S. Steel;

and the following firms do not perform steel melting: California Steel Industries, Duferco Farrell, Evraz Oregon

Steel Mills, and ThyssenKrupp Steel USA.

I-30
Table I-10 

Hot-rolled steel: U.S. producers, positions on the orders, U.S. production locations, related and/or

affiliated firms, and shares of 2010 reported U.S. production

Firm Mill location(s) Parent company Position on orders

Share of

production

(percent)

AK Steel Middletown, OH AK Steel (U.S.) *** ***

ArcelorMittal

Burns Harbor, IL

Cleveland, OH

East Chicago, IN

Riverdale, IL

ArcelorMittal S.A.

(Luxembourg) *** ***

California Steel

Industries Fontana, CA

***% JFE Steel (Japan)

***% Vale S.A. (Brazil) *** ***

Duferco Farrell Farrell, PA Duferco (Switzerland)1 *** ***

Evraz Oregon Steel

Mills Portland, OR

Evraz Group S.A.

(Luxembourg) *** ***

Gallatin Ghent, KY

***% ArcelorMittalDofasco

(Canada)2

***% Gerdau North America

(U.S.) *** ***

NLMK Beta Portage, IN

Top Gun Investment Corp. II

(U.S.)3 *** ***

North Star

BlueScope Delta, OH

***% NSS Ventures (U.S.)

***% BlueScope Steel

(Australia) *** ***

Nucor

Blytheville, AR

Trinity, AL

Tuscaloosa, AL

Crawfordsville, IN

Huger, SC Nucor (U.S.) *** ***

Severstal North

America4

Severstal

Columbus Columbus, MS

Severstal North America

(U.S.) *** ***

Severstal

Dearborn Dearborn, MI

Severstal North America

(U.S.) *** ***

Severstal

Sparrows Point5

Sparrows Point,

MD

Severstal North America

(U.S.) *** ***

Severstal

Warren5 Warren, OH

Severstal North America

(U.S.) *** ***

Severstal

Wheeling5 Wheeling, WV

Severstal North America

(U.S.) *** ***

SSAB Enterprises

Muscatine, IA

Axis, AL Svenskt AP (Sweden) *** ***

Steel Dynamics Butler, IN Steel Dynamics (U.S.) *** ***

ThyssenKrupp Steel

USA Calvert, AL ThyssenKrupp (Germany)6 *** ***

U.S. Steel

Fairfield, AL

Granite City, IL

Gary, IN

Ecorse, MI

Dravosburg, PA U.S. Steel (U.S.) *** ***

Table continued on next page.

I-31
Table I-10–Continued

Hot-rolled steel: U.S. producers, positions on the orders, U.S. production locations, related and/or affiliated firms, and shares of 2010 reported U.S. production

 1 On April 21, 2011, NLMK announced that it had reached an agreement to increase to 100 percent from 50 percent its

share of the partnership that owns Duferco Farrell. The change in ownership is subject to regulatory approvals and is

expected to be completed by June 30, 2011. NLMK acquires full control over rolling assets of its joint venture with

Duferco, found at http://www.nlmksteel.com/StandardPage____1280.aspx, retrieved on April 25, 2011. 2

 On February 20, 2007, Dofasco announced that it had become part of the ArcelorMittal group. 3

 Top Gun Investment Corp. II is a holding company wholly by NLMK (Russia). NLMK, About NLMK, Group structure,

Subsidiaries and associates, found at http://www.nlmksteel.com/StandardPage.aspx?id=209, retrieved on March 7, 2011. 4

 Severstal North America, which represents *** percent of 2010 U.S. production, reported data separately for its five

establishments. (also see http://www.severstalna.com/about-us/north-american-operations.html, retrieved on March 7,

2011). Severstal North America is a wholly owned subsidiary of OAO Severstal (Russia). Severstal North America,

corporate profile, found at http://www.severstalna.com/about-us/corporate-profile.html, retrieved on March 7, 2011. 5

 In March 2011, Renco Group Inc. acquired these steel producing facilities from Severstal to create a new steel

company, RG Steel LLC.

 6

 ThyssenKrupp Steel USA is a wholly owned subsidiary of ThyssenKrupp Steel & Stainless (U.S.), which in turn is a

wholly-owned subsidiary of ThyssenKrupp A.G. (Germany). See

http://www.thyssenkrupp.com/independent/beteiligungen_steel_americas_en.html, retrieved on March 7, 2011.

Source: Compiled from information submitted in response to Commission questionnaires and cited documents.

Several U.S. producers are related to foreign producers of the subject merchandise or to U.S.

importers of the subject merchandise.82 ArcelorMittal is related to subject exporter ArcelorMittal Brasil,83

as well as other exporters of hot-rolled steel throughout the world (e.g., Belgium, Czech Republic, France,

Germany, Romania, and Spain). In addition, ArcelorMittal is related to several foreign producers of hotrolled steel in nonsubject countries.84 California Steel Industries is related to *** importers/exporters and

foreign producer JFE Steel (Japan).85 Duferco Farrell is related to *** importers/exporters Duferco Steel

(U.S.) and Duferco S.A. (Switzerland), and related to producers NLMK Beta (U.S.), NLMK Lipetsk

(Russia),86 and Duferco LaLouviere (Belgium).87 Evraz Oregon Steel Mills is related to foreign producer

Evraz Regina Steel (Canada). Gallatin is related to foreign producer ArcelorMittal Dofasco (Canada).88

NLMK Beta is related to *** importer/exporter Duferco Farrell (U.S.), and producers Duferco Farrell

 82 No U.S. producers reported having any contracts with foreign producers of subject merchandise.

 83 Accounting for *** percent of reported Brazilian production in 2010.

 84 Specifically, ArcelorMittal Annaba (Algeria), ArcelorMittal Gent (Belgium), ArcelorMittal Liege (Belgium),

ArcelorMittal Tubarao (Brazil), ArcelorMittal Dofasco (Canada), ArcelorMittal Ostrava (Czech Republic),

ArcelorMittal Atlantique et Lorrain (France), ArcelorMittal Mediterranee (France), ArcelorMittal Bremen

(Germany), ArcelorMittal Eisenhutenstadt (Germany), ArcelorMittal Temirtau JSC (Kazakstan), ArcelorMittal

Skopje (Macedonia), ArcelorMittal Poland, ArcelorMittal Galati (Romania), ArcelorMittal Espana (Spain),

ArcelorMittal Sestao (Spain), ArcelorMittal South Africa, and Gallatin (U.S. joint venture).

 85 Accounting for *** percent of reported Japanese production in 2010. Under the shareholders agreement, both

stockholders JFE Steel and Vale control the election of the board of the directors and indirectly election of other

officers in the firm. California Steel Industries 2010 10-K, p. 30.

 86 Accounting for *** percent of reported Russian production in 2010. On April 21, 2011, NLMK announced

that it had reached an agreement to increase to 100 percent from 50 percent its share of the partnership that owns

Duferco Farrell. The change in ownership is subject to regulatory approvals and is expected to be completed by

June 30, 2011.

 87 Duferco reportedly manages the joint-venture firms, including Duferco Farrell, while NLMK is reported to

provide slab to support the production of flat steel production, including hot-rolled steel. NLMK and Duferco to

create a joint venture acquiring steel production facilities in Europe and USA, NLMK press release, November 27,

2006, found at http://www.nlmksteel.com/StandardPage____910.aspx, retrieved on May 3, 2011.

 88 ArcelorMittal Dofasco is related to producer ArcelorMittal USA which accounted for *** percent of reported

U.S. production in 2010. ArcelorMittal Dofasco is also related to subject Brazilian producer ArcelorMittal Brasil,

which accounted for *** percent of reported Brazilian production in 2010.

I-32
(U.S.) and NLMK Lipetsk (Russia).89 North Star BlueScope is related to *** importers/exporters Cargill

Ferrous (U.S.) and BlueScope America (U.S.), as well as to foreign producers New Zealand Steel (New

Zealand), BlueScope Steel (Australia), and BlueScope Steel Western Port Works (Australia). Nucor is

related to *** importer/exporter Nucor Trading USA (U.S.). Severstal North America and its individual

establishments are related to foreign producer OAO Severstal (Russia).90 SSAB Americas is related to ***

importers/exporters Svenskt Stal AB (Sweden), also a related foreign producer, and SSAB Inc. (U.S.). 

ThyssenKrupp Steel USA is related to foreign producer ThyssenKrupp Steel Europe (Germany). U.S.

Steel is related to *** importers/exporters USS-Posco Industries (U.S.), United Spiral Pipe (U.S.), and

U.S. Steel Canada. In addition, U.S. Steel is related to foreign producers U.S. Steel Canada, U.S. Steel

Kosice (Slovak Republic), and U.S. Steel Serbia. As discussed in Part III, no domestic producers

imported or purchased from importers subject merchandise.

Figure I-3 illustrates the changes in company/mill ownership that have occurred since the original

investigations.

U.S. Importers

The Commission received usable data from 52 importers during the original investigations and

from 15 firms during the first reviews.91 In these current proceedings, the Commission issued importers’

questionnaires to 93 firms believed to be importers of subject hot-rolled steel, as well as to all U.S.

producers of hot-rolled steel. Usable questionnaire responses were received from 37 companies,

representing 72.8 percent of total imports from Brazil, Japan, and Russia during 2005-10. Table I-11 lists

all responding U.S. importers of hot-rolled steel from the three subject countries and other sources, their

locations, and their shares of reported U.S. imports in 2010.92 As shown in table I-11, many U.S.

importers are affiliated with non-U.S. entities, including in some cases producers of hot-rolled steel. 

Among the U.S. importers affiliated with foreign producers/exporters of hot-rolled steel were the

following:93

• ArcelorMittal 

• CSN

• Duferco Farrell

• Marubeni-Itochu Steel America

• Mitsui USA

• Okaya USA

• Posco America

• PSL North America

• Salzgitter Mannesmann

• SSAB Americas

• Tata Steel International

• ThyssenKrupp Materials NA

• USS-Posco Industries

 89 Accounting for *** percent of reported Russian production in 2010.

 90 Accounting for *** percent of reported Russian production in 2010.

 91 Certain Hot-Rolled Steel Products from Japan, Invs. Nos. 731-TA-807 (Final), USITC publication 3202, June

1999, p. IV-1, and Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil, Japan, and Russia: 

Investigations Nos. 701-TA-384 and 731-TA-806-808 (Review), USITC Publication 3767, April 2005, p. I-49.

 92 The largest importer of hot-rolled steel from Canada, the largest nonsubject source of hot-rolled steel was ***,

accounting for approximately *** percent of total imports during 2005-10 (ranging from *** percent in 2005 to ***

percent in 2010). U.S. producers accounted for approximately *** percent of hot-rolled steel imported from Canada

during 2005-10 (ranging from low of *** percent in 2010 to high of *** percent in 2008).

 93 In addition, four importers (***) reported having any contracts with foreign producers of subject merchandise.

I-33
Figure I-3

Hot-rolled steel: Openings, closings, and consolidations of U.S. mills, 1998, 2004 and 2010

U.S. mills in 1998 U.S. mills in 2004 U.S. mills in 2010

AK Steel AK Steel AK Steel

Armco

Beta Beta NLMK Beta

Duferco Farrell (50%

Caparo NLMK) Duferco Farrell

California Steel Industries California Steel Industries California Steel Industries

IPSCO IPSCO SSAB

North Star/BHP North Star/BHP North Star Blue Scope

Oregon Steel Mills Oregon Steel Mills Evraz Oregon Steel Mills

Steel Dynamics Steel Dynamics Steel Dynamics

Lone Star Lone Star

U.S. Steel National Steel U.S. Steel (Lone Star closed 2007)

USX

Nucor

Trico Steel Nucor Nucor

Tuscaloosa Steel

Acme

International Steel Group1

ArcelorMittal

Bethlehem1

LTV Steel

Weirton Steel

Ispat Inland Mittal Steel

Gallatin (50% ArcelorMittal) Gallatin Gallatin

Rouge Steel Severstal

Severstal1

WCI Steel

WCI Steel

Wheeling Pittsburgh Steel Wheeling Pittsburgh Steel

Severstal Columbus

DSC (closed 1996)

Geneva Geneva (closed 2004 and

core assets sold to firms in

China)

Newport Newport (closed 2001)

Gulf States Gulf States (closed 2000)

 1 In March 2011, Renco Group Inc. acquired three steel-producing facilities from Severstal: Severstal Wheeling Inc., Severstal

Warren LLC, and Severstal Sparrows Point LLC (part of Bethlehem Steel during the original investigations), to create a new steel

company, RG Steel LLC. 

Source: Compiled from data submitted in response to Commission questionnaires, Certain Hot-Rolled Steel Products from

Japan, Invs. Nos. 731-TA-807 (Final), USITC Publication 3202, June 1999, table III-1, and Certain Hot-Rolled Flat-Rolled

Carbon-Quality Steel Products From Brazil, Japan, and Russia: Investigations Nos. 701-TA-384 and 731-TA-806-808 (Review),

USITC Publication 3767, April 2005, table I

I-34
Table I-11

Hot-rolled steel: U.S. importers, source(s) of imports, U.S. headquarters, and shares of imports in

2010

Firm Headquarters Parent

Source of

imports

Share of reported 2010 imports (percent)

Brazil Japan Russia Other Total2

Ahmsa International San Antonio, TX

Altos Hornos de

Mexico *** *** *** *** *** ***

ArcelorMittal Dofasco Hamilton, ON

AcelorMittal

(Luxembourg) *** *** *** *** *** ***

ArcelorMittal

International Chicago, IL

ArcelorMittal

(Luxembourg) *** *** *** *** *** ***

Cargill Hopkins, MN None *** *** *** *** *** ***

Commercial Metals Irving, TX None *** *** *** *** *** ***

Companhia

Siderurgica (CSN) Terre Haute, IN

CSN Panama

(Luxembourg) *** *** *** *** *** ***

Cotia USA New York, NY

Cotia Vitoria

(Brazil) *** *** *** *** *** ***

Coutinho & Ferrostaal Houston, TX

MPC (Germany)

Man Ferrostaal

(Germany)

Villacero Group

(Mexico) *** *** *** *** *** ***

Duferco Farrell Farrell, PA

Duferco

(Switzerland) *** *** *** *** *** ***

Honda Trading

America Marysville, OH

Honda Trading

(Japan)

America Honda

Motor (U.S.) *** *** *** *** *** ***

Leavitt Tube Chicago, IL

MKK USA (U.S.)

Sumitomo Corp.

of America

(U.S.) *** *** *** *** *** ***

MacSteel International

USA White Plains, NY

MacSteel

International

Trading

(Netherlands) *** *** *** *** *** ***

MacSteel Service

Centers USA

Newport Beach,

CA None *** *** *** *** *** ***

Marubeni-Itochu Steel

America New York, NY

Marubeni-Itochu

Steel (Japan) *** *** *** *** *** ***

Metal One America Rosemont, IL

Metal One

Holdings (U.S.) *** *** *** *** *** ***

Metallia USA Fort Lee, NJ None *** *** *** *** *** ***

Mitsui USA New York, NY Mitsui (Japan) *** *** *** *** *** ***

Table continued on next page.

I-35
Table I-11--Continued

Hot-rolled steel: U.S. importers, source(s) of imports, U.S. headquarters, and shares of imports in

2010

Firm Headquarters Parent

Source of

imports

Share of reported 2010 imports (percent)

Brazil Japan Russia Other Total

Nippon Steel Trading

America Los Angeles, CA

Nippon Steel

Trading (Japan) *** *** *** *** *** ***

Noble Americas Stamford, CT

Noble

Resources

(Switzerland) *** *** *** *** *** ***

Nucor Trading USA Los Angeles, CA

Nucor (U.S.)

Serimner

Holding

(Switzerland)

Nucor Trading

(Switzerland) *** *** *** *** *** ***

Okaya USA Torrance, CA

Okaya & Co.

(Japan) *** *** *** *** *** ***

Posco America Fort Lee, NJ

Posco (Korea)

Posco-Canada *** *** *** *** *** ***

PSL North America

Bay St. Louis,

MS

PSL Ltd. (India)

HSAW Solution

(U.S.)

Lloyd Systems

(U.S.) *** *** *** *** *** ***

Queen City Steel Charlotte, NC None *** *** *** *** *** ***

Ryerson Chicago, IL

Platinum Equity

(U.S.) *** *** *** *** *** ***

Salzgitter

Mannesmann Houston, TX

Salzgitter

Mannesmann

(Germany) *** *** *** *** *** ***

Samuel Son & Co. Mississauga, ON None *** *** *** *** *** ***

Schaeffler Group USA Fort Mill, SC None *** *** *** *** *** ***

SSAB Coraopolis, PA

Svenskt Stal

(Sweden) *** *** *** *** *** ***

Stemcor USA New York, NY

Stemcor Holding

(U.K.) *** *** *** *** *** ***

Sunbelt Group Houston, TX

Russel Metals

(Canada) *** *** *** *** *** ***

Tata Steel

International

(Americas) Schaumburg, IL

Tata Steel

International

Holdings (U.S.) *** *** *** *** *** ***

Table continued on next page.

I-36
Table I-11--Continued

Hot-rolled steel: U.S. importers, source(s) of imports, U.S. headquarters, and shares of imports in

2010

Firm Headquarters Parent

Source of

imports

Share of reported 2010 imports (percent)

Brazil Japan Russia Other Total

Tata Steel

International (NA) Schaumburg, IL

Tata Steel

International

Holdings (U.S.) *** *** *** *** *** ***

ThyssenKrupp

Materials NA Southfield, MI

ThyssenKrupp

USA *** *** *** *** *** ***

Toyota Tsusho

America Georgetown, KY

Toyota Tsusho

(Japan) *** *** *** *** *** ***

U.S. Steel Pittsburgh, PA None *** *** *** *** *** ***

USS-Posco Industries Pittsburg, CA

Pitcal/U.S. Steel

(U.S.)

Posco-California

(U.S.) *** *** *** *** *** ***

Total 100.0 100.0 100.0 100.0 100.0

Note.–Several firms did not import in 2010 but did import during the period for which data were collected, and therefore are

listed.

Note.–Because of rounding, figures may not add to the totals shown.

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

U.S. Purchasers

The Commission issued purchaser questionnaires to 65 purchasers. The Commission received

questionnaires from 34 of these firms, 32 of which provided useable data, as well as additional unsolicited

questionnaires.94 Further information regarding these purchasers is presented in table I-12.

Table I-12

Hot-rolled steel: Purchaser names, locations, type of purchaser, and quantity of hot-rolled steel

purchased in 2010

* * * * * * *

APPARENT U.S. CONSUMPTION

Data concerning apparent U.S. consumption of hot-rolled steel during the period for which data

were collected in this proceeding are shown in table I-13 and figure I-4. Apparent U.S. consumption

increased in 2006, then declined to its lowest point in 2009, and then rose in 2010, though to levels below

2005-08. 

 94 ***. The majority of their responses were identical, with the exception of questions regarding sourcing of

their hot-rolled steel, e.g., the quantity of hot-rolled steel purchased. These responses are treated as one response

unless otherwise indicated. 

I-37
Table I-13

Hot-rolled steel: U.S. shipments of domestic product, U.S. shipments of imports, and apparent

U.S. consumption, 2005-10

Item

Calendar year

2005 2006 2007 2008 2009 2010

Quantity (short tons)

U.S. producers’ U.S. shipments--

Open market shipments 23,418,285 25,214,571 24,204,952 22,306,071 13,692,198 20,809,160

Captive U.S. market shipments 38,573,255 39,968,459 36,120,482 33,705,724 24,436,390 32,185,490

Subtotal 61,991,540 65,183,030 60,325,434 56,011,795 38,128,588 52,994,650

U.S. imports from--

Brazil 0 2,237 50 46 148 512

Japan 5,009 11,795 15,504 15,577 9,053 15,033

Russia 299,275 789,288 136,293 76,425 1,708 125,079

Subtotal 304,284 803,320 151,847 92,048 10,909 140,624

Nonsubject countries 3,564,545 5,639,254 3,196,799 3,532,867 2,263,178 2,955,493

Total U.S. imports 3,868,829 6,442,574 3,348,646 3,624,915 2,274,087 3,096,118

Open-market U.S. consumption 27,287,114 31,657,145 27,553,598 25,930,986 15,966,285 23,905,278

Apparent U.S. consumption 65,860,369 71,625,604 63,674,080 59,636,710 40,402,675 56,090,768

Value (1,000 dollars)

U.S. producers’ U.S. shipments--

Open market shipments 12,631,398 14,324,743 13,372,670 17,558,950 7,210,186 12,618,918

Captive U.S. market shipments 20,023,876 21,872,034 19,566,599 25,155,723 12,748,097 19,268,730

Subtotal 32,655,274 36,196,777 32,939,269 42,714,673 19,958,283 31,887,648

U.S. imports from--

Brazil 0 1,856 37 48 128 402

Japan 3,911 8,549 10,263 13,666 10,897 14,636

Russia 169,124 411,375 69,061 72,989 1,751 69,708

Subtotal 173,035 421,780 79,361 86,703 12,776 84,745

Nonsubject countries 1,948,688 2,937,894 1,752,308 2,799,480 1,203,403 1,828,647

Total U.S. imports 2,121,722 3,359,674 1,831,669 2,886,183 1,216,179 1,913,392

Open-market U.S. consumption 14,753,120 17,684,417 15,204,339 20,445,133 8,426,365 14,532,310

Apparent U.S. consumption 34,776,996 39,556,451 34,770,938 45,600,856 21,174,462 33,801,040

Note.–Because of rounding, figures may not add to the totals shown.

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

I-38
Figure I-4

Hot-rolled steel: Apparent U.S. consumption, by sources, 2005-10

Source: Table I-13.

U.S. MARKET SHARES

Total U.S. market share data are presented in table I-14, while table I-15 presents open-market

consumption and market shares. The share of apparent U.S. consumption held by U.S. producers

fluctuated during the period for which data were collected, ending the period slightly higher than at the

beginning. Domestic producers accounted for between 80 and 88 percent of open-market consumption

and between 91 and 95 percent of total consumption during the period examined in these reviews. 

Subject imports accounted for less than 1 percent to over 2 percent of open-market consumption and 0 to

1 percent of apparent U.S. consumption during this period.

I-39
Table I-14

Hot-rolled steel: Total U.S. consumption and market shares, 2005-10

Item

Calendar year

2005 2006 2007 2008 2009 2010

Quantity (short tons)

Apparent U.S. consumption 65,860,369 71,625,604 63,674,080 59,636,710 40,402,675 56,090,768

Value (1,000 dollars)

Apparent U.S. consumption 34,776,996 39,556,451 34,770,938 45,600,856 21,174,462 33,801,040

Share of quantity (percent)

U.S. producers’ U.S. shipments 94.1 91.0 94.7 93.9 94.4 94.5

U.S. imports from--

Brazil 0.0 0.0 0.0 0.0 0.0 0.0

Japan 0.0 0.0 0.0 0.0 0.0 0.0

Russia 0.5 1.1 0.2 0.1 0.0 0.2

Subtotal 0.5 1.1 0.2 0.2 0.0 0.3

Nonsubject countries 5.4 7.9 5.0 5.9 5.6 5.3

All countries 5.9 9.0 5.3 6.1 5.6 5.5

Share of value (percent)

U.S. producers’ U.S. shipments 93.9 91.5 94.7 93.7 94.3 94.3

U.S. imports from--

Brazil 0.0 0.0 0.0 0.0 0.0 0.0

Japan 0.0 0.0 0.0 0.0 0.1 0.0

Russia 0.5 1.0 0.2 0.2 0.0 0.2

Subtotal 0.5 1.1 0.2 0.2 0.1 0.3

Nonsubject countries 5.6 7.4 5.0 6.1 5.7 5.4

All countries 6.1 8.5 5.3 6.3 5.7 5.7

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires and from official Commerce statistics.

I-40
Table I-15

Hot-rolled steel: Open-market U.S. consumption and market shares, 2005-10

Item

Calendar year

2005 2006 2007 2008 2009 2010

Quantity (short tons)

Apparent U.S. consumption 27,287,114 31,657,145 27,553,598 25,930,986 15,966,285 23,905,278

Value (1,000 dollars)

Apparent U.S. consumption 14,753,120 17,684,417 15,204,339 20,445,133 8,426,365 14,532,310

Share of quantity (percent)

U.S. producers’ U.S. shipments 85.8 79.6 87.8 86.0 85.8 87.0

U.S. imports from--

Brazil 0.0 0.0 0.0 0.0 0.0 0.0

Japan 0.0 0.0 0.1 0.1 0.1 0.1

Russia 1.1 2.5 0.5 0.3 0.0 0.5

Subtotal 1.1 2.5 0.6 0.4 0.1 0.6

Nonsubject countries 13.1 17.8 11.6 13.6 14.2 12.4

All countries 14.2 20.4 12.2 14.0 14.2 13.0

Share of value (percent)

U.S. producers’ U.S. shipments 85.6 81.0 88.0 85.9 85.6 86.8

U.S. imports from--

Brazil 0.0 0.0 0.0 0.0 0.0 0.0

Japan 0.0 0.0 0.1 0.1 0.1 0.1

Russia 1.1 2.3 0.5 0.4 0.0 0.5

Subtotal 1.2 2.4 0.5 0.4 0.2 0.6

Nonsubject countries 13.2 16.6 11.5 13.7 14.3 12.6

All countries 14.4 19.0 12.0 14.1 14.4 13.2

Note.–Because of rounding, figures may not add to the totals shown.

Source: Compiled from data submitted in response to Commission questionnaires and from official Commerce statistics.

I-41
 
PART II: CONDITIONS OF COMPETITION IN THE U.S. MARKET

Hot-rolled steel is an input used in a variety of end-use goods including downstream steel

products (i.e., cold-rolled and corrosion-resistant steel), pipes and tubes, construction materials, autos, and

appliances. Since 2005, the growth of China as a producer and consumer of hot-rolled steel, the

economic downturn in the United States and abroad, and fluctuating availability and pricing of raw

material inputs have had an effect on the hot-rolled steel market.

CHANNELS OF DISTRIBUTION

The majority (55 to 60 percent during 2005-10) of domestically produced hot-rolled steel is used

internally by U.S. producers for the production of cold-rolled steel, coated steel, cut-to-length plate, and

welded pipe. Commercial shipments accounted for more than one-third of U.S. hot-rolled steel

production (35 to 40 percent during 2005-10). The remainder was transferred to related firms or

exported.

Commercially, hot-rolled steel is sold to distributors, processors, and service centers; pipe and

tube producers; and other end users/manufacturers, including automobile assemblers and suppliers. As

presented in table II-1, more than half of all U.S. commercial shipments are made to service

centers/distributors.1

 With respect to subject imports, a greater share of shipments of imported hot-rolled

steel was shipped to distributors/service centers than domestically produced hot-rolled steel. Japaneseproduced hot-rolled steel was shipped in each year to other end users, especially in the automotive sector

(four of five responding foreign purchasers reported selling hot-rolled steel to the United States solely for

automotive purposes). As shipments of Russian-produced hot-rolled steel declined after 2007, so did the

share of shipments sold to tubular products manufacturers. This share decreased from a period high of

*** percent in 2006 to *** in 2010. The share of shipments of imported nonsubject hot-rolled steel to

tubular products producers declined steadily from 2005 to 2010. 

GEOGRAPHIC DISTRIBUTION

Producers and importers were requested to provide information on both the broad general market

areas served by their hot-rolled steel and specific geographic market areas served by their firm. Table II-2

presents information provided by U.S. producers and importers on the market areas in which they sell

hot-rolled steel. 

 1 Service centers may serve the role of broker, distributor and/or processor. Service centers may process hotrolled steel by pickling, oiling, tempering, leveling, slitting, or shearing.

II-1
Table II-1

Hot-rolled steel: Channels of distribution for commercial shipments of domestic product and

subject imports sold in the U.S. market (as a percent of total shipments), by year and by country,

2005-10

2005 2006 2007 2008 2009 2010

Share of quantity (percent)

Domestic industry:

 Shipments to distributors/service centers 57.5 55.6 56.1 53.2 52.5 53.8

 Shipments to tubular products manufacturers 18.0 20.7 19.9 23.5 17.7 20.6

 Shipments to other end users 24.5 23.7 24.0 23.3 29.8 25.6

Brazil:

 Shipments to distributors/service centers -- -- -- -- *** ***

 Shipments to tubular products manufacturers -- -- -- -- *** ***

 Shipments to other end users -- -- -- -- *** ***

Japan:

 Shipments to distributors/service centers *** *** *** *** *** ***

 Shipments to tubular products manufacturers *** *** *** *** *** ***

 Shipments to other end users *** *** *** *** *** ***

Russia:

 Shipments to distributors/service centers *** *** *** *** *** ***

 Shipments to tubular products manufacturers *** *** *** *** *** ***

 Shipments to other end users *** *** *** *** *** ***

Nonsubject countries:

 Shipments to distributors/service centers 79.1 81.8 85.9 78.4 82.0 88.2

 Shipments to tubular products manufacturers 17.8 16.2 9.7 7.7 6.7 2.2

 Shipments to other end users 3.1 2.0 4.4 14.0 11.3 9.6

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

II-2
Table II-2

Hot-rolled steel: Geographic market areas in the United States served by domestic producers and

importers of subject product

Region

Producers Importers

United States Brazil Japan Russia Other

 Northeast 7 2 1 5 10

 Midwest 11 1 3 8 9

 Southeast 10 0 4 6 13

 Central Southwest 8 2 1 9 13

 Mountains 7 0028

 Pacific Coast 8 0 1 4 12

 Other 4 0 0 1 2

Note.--There were a total of 16 U.S. producers and 13 importers that responded to this question. Firms were not

limited in the number of market areas that they could report and, in fact, many firms identified general and specific

market areas. 

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

U.S. SUPPLY AND DEMAND CONSIDERATIONS

U.S. Supply

Domestic Production

Based on available information, in the short term, staff believes that U.S. hot-rolled steel

producers have the capability to respond to changes in demand with moderate changes in shipments of

U.S.-produced hot-rolled steel to the U.S. market. In the medium term, U.S. hot-rolled steel producers

have the capability to respond to changes in demand with moderate to large changes in shipments of U.S.-

produced hot-rolled steel. Factors contributing to this degree of responsiveness of supply are discussed

below.

Industry capacity

U.S. producers’ reported capacity utilization for hot-rolled steel fluctuated greatly over the period

for which data were collected. Capacity utilization for domestic hot-rolled steel producers increased from

77.1 percent in 2005 to a period high of 80.2 percent in 2006 before declining to 50.7 percent in 2009,

reflecting, in part, depressed demand due to the 2008-09 economic downturn. Capacity utilization

rebounded to 68.9 percent in 2010. During 2005-10, total capacity also fluctuated within a 4 million ton

range; it was 82.2 million tons when capacity utilization was at its peak in 2006, and was 78.2 million

tons in 2009 when capacity utilization was at its period nadir. As capacity utilization began to recover,

II-3
capacity increased slightly to 79.7 million tons in 2010.2

 This level of capacity utilization indicates that

U.S. producers of hot-rolled steel have available capacity with which they could increase production of

hot-rolled steel in the event of a price change in the short term. As is discussed in Part III of this report,

the extended idling of facilities has reduced overall domestic capacity. However, a new ThyssenKrupp

Steel USA carbon steel plant opened in 2010 in Alabama, which will be supplied by more than three

million tons of slab from a related company in Brazil and eventually have a capacity of 5 million tons. In

2011, the Renco Group announced the purchase of three hot-rolled steel plants from Severstal, prompting

speculation of greater available capacity and increased production.3

A majority of producers (10 of 14) and responding importers (17 of 28) noted that U.S. supply

conditions had not changed since 2005. Of those that noted changes, the opening of new U.S. mills

(specifically, those of ThyssenKrupp in Alabama, Nucor in Arkansas, and Severstal in Ohio), the

economic crisis, and domestic mill shutdowns were identified by more than one firm. Also noted by at

least one producer or importer were: consolidations, increased globalization, better technology, and nonunion mills taking market share from unionized mills. Sixteen of 31 responding purchasers reported that

supply conditions in the hot-rolled steel market had changed since 2005. Several purchasers noted a tight

supply of domestic steel during the recession. Purchaser *** indicated that at the bottom of the cycle, 19

of 28 U.S. blast furnaces were idled, and, though starting up again in 2009, steel for the automotive sector

was in tight supply just as the “Cash for Clunkers” program was in effect. Other purchasers noted short

supply earlier in the period, with one noting that it faced controlled order placement several times in

2005-08. One purchaser, (***), included a *** which noted that the domestic industry was short on

supply, with record-low inventories and limited import supply (which would contribute to increased

prices in 2008). Other purchasers indicated short supply of raw materials, industry consolidation,

ThyssenKrupp’s new plant, and increased foreign demand as affecting the supply of domestically

produced hot-rolled steel. 

Four producers indicated that they had refused, declined, or been unable to supply purchasers at

some point since 2005. *** did so because ***. *** has declined to sell to potential customers with

poor credit or a previous bad experience. At times in 2006 and 2008, *** was operating above rated

capacity so it could not fill all requested orders. In 2008, *** had a production shortfall due to a ***, and

so could not meet all purchase requests.

Alternative markets

Domestic producers’ export share has been increasing since 2006, but accounted for 3.0 percent

or less of total shipments throughout 2005-10, indicating that domestic hot-rolled steel producers are

constrained in their ability to shift shipments between the United States and other markets in response to

price changes. In their questionnaire responses, U.S. producers reported that they find it difficult to shift

product to markets outside of the United States. Although most of the 14 hot-rolled steel producers

reported that they exported some hot-rolled steel, nine indicated that in general it is difficult to shift from

shipping domestically to exporting. High transportation costs, along with exchange rate concerns, 

competition with countries which are increasing efforts to export, and costs associated with changing

business plans impede the ability to export. 

 2 At its highest, domestic capacity reached 82.2 million tons in 2007.

 3

 “Severstal mill returns to Renco ownership,” March 3, 2011, found at

http://www.vindy.com/news/2011/mar/03/severstal-mill-returns-to-renco-ownershi/, retrieved March 10, 2011, and

“Renco mill restart plan stirs market concerns,” Metal Bulletin Research, March 3, 2011.

II-4
Inventory levels

 Thirteen of fourteen producers reported making at least 95 percent of their sales on a made-toorder basis, so inventories are relatively small.4

 U.S. producers’ inventories, as a share of U.S. producers’

total shipments, ranged between 1.7 (end of 2008) and 3.4 percent (end of 2009) during the period 2005-

10, and were equivalent to approximately 3 percent of total shipments in all other years. These relatively

small levels of inventories suggest that U.S. producers are constrained in their ability to respond to

changes in demand with relatively large changes in the quantity shipped. 

Production alternatives

All producers stated that they were unable to switch production from hot-rolled steel to other

products. This differs somewhat from U.S. producers’ views at the time of the Commission’s previous

review of the subject orders and suspension agreements in 2004-05. In that review, two producers

reported that they could switch production from hot-rolled steel to carbon steel plate and to alloy coil with

minimal cost.5

 

Subject Imports

Based on available information, staff believes that subject hot-rolled steel producers have the

capability to respond to changes in demand with moderate to large changes in shipments of hot-rolled

steel to the U.S. market. Factors contributing to this degree of responsiveness of supply are discussed

below.6

 4 Hot-rolled steel that is shipped commercially accounts for approximately one-third of production, with the bulk

of production being internally consumed. This contributes to the small shares when comparing inventories to

production or total shipments.

 5 Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil, Japan, and Russia, Inv. Nos.

701-TA-384 and 731-TA-806-808 (Review), USITC Publication 3767, April 2005, p. II-5.

 6

 Generally, factors such as relatively low levels of capacity utilization, relatively high inventory levels, and the

existence of alternative markets would indicate an increased supply responsiveness. Alternative markets may

include export shipments, home market commercial sales, and internal consumption for the production of

downstream products. Of these three factors, the existence of exports indicates the subject country’s degree of

export orientation and experience in export marketing. Home market commercial sales could be diverted to export

markets, especially if the industry in the subject country is already experienced in exporting. Internal consumption is

less likely to be diverted because such diversion would require scaling back or idling the productive capacity used to

manufacture downstream products. However, diverting internal consumption may be somewhat easier if the subject

country has developed export markets and home market commercial sales. Moreover, economic conditions,

production costs of hot-rolled steel relative to downstream products, and the current sales prices and profit margins

in the hot-rolled steel market relative to the market for downstream products likely affect the degree to which subject

producers would choose to divert internal consumption of hot-rolled steel to the commercial market.

II-5
Subject Imports from Brazil7

Based on available information, suppliers of hot-rolled steel from Brazil have the capability to

respond to changes in demand with small to moderate changes in the quantity shipped to the U.S. market. 

Supply responsiveness is enhanced by some excess capacity, period-high inventories, and the existence of

a strong and growing home and non-U.S. export markets, but reduced by internal consumption. 

Industry capacity--Reported Brazilian capacity increased irregularly between 2005 and 2010, from 14.5

million short tons to 15.8 million short tons in 2010. During this period, capacity utilization of Brazilian

hot-rolled steel producers decreased from 93.2 percent in 2005 to 89.6 percent in 2006, but increased to

98.5 percent in 2007, before decreasing to 85.3 percent in 2009. Capacity utilization in Brazil has since

increased to 90.7 percent in 2010. Brazilian foreign producers indicated that they produce relatively

small amounts of other products using the same machinery and workers used to make hot-rolled steel, and

therefore have an inability to shift production to hot-rolled from other products.

Inventory levels--Available data indicate that Brazilian hot-rolled steel producers’ inventories relative to

shipments decreased irregularly from 4.3 percent in 2005 to 3.2 percent in 2008 before increasing to 8.3

percent in 2010, the peak level for the period under review.8

 These data indicate that Brazilian producers

have some ability to use inventories as a means to increase shipments to the U.S. market. There were

virtually no U.S.-held inventories of Brazilian hot-rolled steel throughout the period.

Alternative markets--Internal consumption and transfers accounted for more than *** of all Brazilian

steel production in 2005-10. The remainder was shipped commercially.9

 In 2010, Brazilian home market

shipments accounted for 92.7 percent of its total shipments. Accordingly, Brazilian exports accounted for

between 3.8 and 12.1 percent of shipments in 2005-10. Brazilian producers of hot-rolled steel reported

shipping product to the European Union, China, Asian markets other than China, Mexico, and South

American markets.10 These data indicate that Brazilian hot-rolled steel producers have an active home

market and other non-U.S. export markets from which they could shift shipments to the United States. 

The ability of Brazilian producers to shift sales from their home market or from non-U.S. export

markets to the U.S. market may be moderated by existing relationships with current customers and

differences in the products. Foreign producers were asked to describe how easily they could shift sales of

hot-rolled steel between the U.S. market and alternate country markets. All three responding Brazilian

producers provided information. *** is not shipping to the United States because *** are supplying that

demand. It did note, however, that it is not difficult to shift sales between international markets because

the products are very similar, if not the same. *** stated that the limited amount of commercial

shipments of hot-rolled steel not dedicated to downstream steel production are heavily focused on

growing the Brazilian market. Demand in Brazil is reportedly expected to increase, particularly as

construction expands, and prices in Brazil are generally higher than in the United States. Furthermore, it

 7 Staff compared the Brazilian producers that responded to the Commission’s questionnaires to those producers

identified by the steel analysts at ***. See ***. According to this comparison, the three responding Brazilian

producers accounted for 100 percent of hot strip rolling capacity in Brazil in 2010.

 8

 Brazilian respondent interested parties noted that ***. Brazilian respondent interested parties’ posthearing brief,

app. 1, p. 39.

 9

 Among shipments that were not consumed internally, the majority of Brazilian producers' commercial shipments

of hot-rolled steel were shipped to the Brazilian home market during 2005-10, increasing from *** percent in 2005

to a period high of *** percent in 2008. In 2010, Brazilian home market shipments accounted for *** percent of 

total commercial shipments. 

 10 Brazilian producers reported very limited subject exports of hot-rolled steel to the United States since 2005.

II-6
would not want to harm its long-term commercial relationships and commitments in ***. *** reported

that it is not easy to shift sales between the U.S. market and alternate country markets because it has

abandoned the U.S. market and has abandoned the commercial contacts it had in the United States for

those in Latin America and Europe. No Brazilian producer indicate any anticipated changes in the

availability of subject hot-rolled steel in the United States.

Sales characteristics--No foreign producers reported contract or availability characteristic data for 2010,

as there were no reported exports of hot-rolled steel from Brazilian producers to the United States in

2010. 

Subject Imports from Japan11

Based on available information, the five responding suppliers of hot-rolled steel from Japan have

the capability to respond to changes in demand with small to moderate changes in the quantity shipped to

the U.S. market. Supply responsiveness is enhanced by the existence of a strong home market and nonU.S. export markets, particularly those in Asia, but hampered by limited excess capacity, and low levels

of inventories in Japan. As discussed in Part IV, recent events in Japan are likely to affect its hot-rolled

steel industry, at least indirectly via affected downstream industries, although the magnitude of the impact

is unclear at this time.

Industry capacity--Reported Japanese capacity to produce hot-rolled steel decreased from 55.6 million

short tons in 2005 to 54.8 million short tons in 2006 before reaching 59.2 million short tons in 2010. 

During this period, capacity utilization increased from 93.2 percent in 2005 to 97.8 percent in 2007,

before declining to 88.5 percent in 2008 and 70.0 percent in 2009. Most recently, capacity utilization has

rebounded to 91.3 percent in 2010. Japanese producers can manufacture hot-rolled alloy steel using the

same workers and equipment, but all reported they cannot shift between the two. *** stated that it cannot

shift because all its production is made-to-order from customers that do not alter their needs. 

*** stated that it cannot shift because it does not want to alienate long-term customers and wants to

maintain good operating ratios for downstream products. 

Inventory levels--All responding Japanese producers indicated that they manufacture hot-rolled steel only

on a made-to-order basis, with lead times ranging from 2 to 6 months. As such, inventories are typically

very low. Available data indicate that Japanese producers’ inventories, relative to total shipments,

declined irregularly from 2.1 percent in 2005 to 1.9 percent in 2008 before increasing to 2.6 percent in

2010. These data indicate that Japanese producers are constrained in their ability to use inventories as a

means to increase shipments to the U.S. market. Inventories of Japanese-produced hot-rolled steel held in

the United States, relative to shipments, increased irregularly from *** percent in 2005 to *** percent in

2008. They decreased substantially in 2009, to *** percent of U.S. shipments, before increasing to ***

percent by the end of 2010.

Alternative markets--Internal consumption and transfers accounted for approximately three-fifths of all

Japanese hot-rolled steel production in 2005-10, with the exception of 2008. The sum of internal

consumption and Japanese home market shipments decreased from *** percent of total shipments to ***

 11 Staff compared the Japanese producers that responded to the Commission’s questionnaires to those producers

identified by the steel analysts at ***. See ***. According to this comparison, the five responding Japanese

producers accounted for *** percent of hot strip rolling capacity in Japan in 2010. The remaining Japanese capacity

is attributed by *** to Tokyo Steel, although additional small producers were identified by domestic interested

parties. U.S. Steel prehearing brief, p. 45.

II-7
percent of total shipments between 2005 and 2008. In 2009, such shipments decreased further, to ***

percent of all shipments, but increased to *** percent of total shipments in 2010. Limited volumes were

exported to the United States and the European Union in each year, while an increasing share went to

other Asian and non-Asian markets.12 *** responding Japanese producers reported shipping exports to

China, South Korea, Thailand, and *** reported shipping to other Asian nations. Additionally, ***

reported shipping to Latin America and the Middle East, while *** reported exporting to Greece and

Saudi Arabia. Shipments to Asian markets increased irregularly, from *** percent of total shipments in

2005 to *** percent in 2010, whereas exports to non-U.S., EU, and Asian markets increased from ***

percent of total shipments in 2005 to *** percent of total shipments in 2010. Based on these data,

Japanese producers have the ability to shift some shipments from their home market and other non-U.S.

export markets to the United States. 

The ability of Japanese producers to shift sales from its home market or from non-U.S. export

markets to the U.S. market may be moderated by vertical integration within Asia, strong demand in nonU.S. markets, and differences in products which Japan supplies. ***. *** reported that it has long-term,

continuous commitments which it cannot break. Nippon has developed joint ventures and other

partnerships throughout Asia for downstream (e.g., cold-rolled and corrosion-resistant steel) production.13

*** stated that its sales in the United States are for a particular end user. *** stated it has that strong

Asian demand from its existing customers such as Japanese automobile company subsidiaries, which

source parts for the entire life cycle of a part. At the hearing, witnesses for the respondent interested

parties testified that Japanese producers manufacture and export to the United States a high-quality

“specialty” steel which is not manufactured elsewhere, despite the existence of the order.14

Sales characteristics--All responding foreign producers in Japan reported that 100 percent of their sales

of hot-rolled steel in 2010 to U.S. customers were pursuant to short-term contracts of between three and

six months. Four of the five reported that prices cannot be renegotiated, both quantity and prices are

fixed, and that contracts typically do not contain a meet-or-release clause. No Japanese producer

indicated any anticipated changes in the availability of subject hot-rolled steel in the United States.

 12 Approximately *** of Japan’s commercial shipments of hot-rolled steel were shipped to the Japanese home

market in 2005-08. In 2009, however, home market commercial shipments decreased to *** percent of all

commercial shipments, and were *** percent of all commercial shipments in 2010. 

 13 Japanese respondent interested parties prehearing brief, pp. 10-13, 31, and exh. 3, and hearing transcript, pp.

230-231 (Aoyama).

 14 See, e.g., hearing transcript p. 231 and 233-234 (Aoyama), and 236 (Wood), and Japanese respondent interested

parties’ prehearing brief, pp. 21-22. “Specialty” steel is principally comprised of hot-rolled steel supplied to

automotive and re-rolling customers in the United States and is typically characterized by a high tensile strength for

automotive customers or *** re-roller customers. Japanese respondent interested parties’ posthearing brief, app. 1,

p. 28 and exh. 7.

II-8
Subject Imports from Russia15

Based on available information, staff believes suppliers of hot-rolled steel from Russia have the

capability to respond to changes in demand with relatively large changes in the quantity shipped to the

U.S. market. Russian producers’ supply responsiveness is enhanced by some available capacity, the

existence of a strong home market and a variety of non-U.S. export markets, but diminished by very low

levels of inventories.

 

Industry capacity--Reported Russian capacity to produce hot-rolled steel remained between 23.1 million

and 24.2 million short tons during 2005-10. Capacity utilization for Russian hot-rolled steel producers

increased from 88.5 percent in 2005 to 92.6 percent in 2007. In 2008 and 2009, capacity utilization

dropped to 81.6 and 80.6 percent, respectively, before increasing to 87.2 percent in 2010. These data

indicate that there is some unused capacity which Russian producers could use to increase production of

hot-rolled steel in the event of a price increase. 

All three responding Russian producers produce other products (hot-rolled alloy steel and plate)

using the same workers and equipment, but only *** reported shifting production between making hotrolled steel and other steel. *** stated that the price difference between hot-rolled steel and alternative

products is insignificant, and that it has a relatively stable order book for those products. *** stated that it

can switch between hot-rolled coils, hot-rolled sheet, and cut-to-length plate, but typically would switch

sales by markets rather than by switching products. 

Inventory levels--All responding Russian producers indicated that they manufacture hot-rolled steel only

on a made-to-order basis, with lead times ranging from 45 days to 5 months. Available data indicate that

Russian hot-rolled steel producers’ inventories, relative to shipments, ranged between *** and ***

percent during the period 2005-10. These data indicate that Russian producers are not able to use

inventories as a means to increase shipments to the U.S. market. Inventories of Russian-produced hotrolled steel held in the United States, as a percentage of U.S. shipments, fluctuated greatly during the

period. Between 2005 and 2007, U.S.-held inventories were between *** and *** percent of U.S.

shipments of Russian hot-rolled steel. In 2008, however, this increased to *** percent. These inventories

declined in 2009 to *** percent before increasing to *** percent in 2010.

Alternative markets--Internal consumption and transfers accounted for slightly more than half (50.6 to

54.1 percent) of all Russian hot-rolled steel production for five of the six years under review.16 The

remainder of Russia’s production was shipped commercially. Overall, Russia’s internal consumption and

home market shipments accounted for between 62.6 and 75.7 percent of total shipments during 2005-10.17

Markets other than Asia, the EU, and the United States accounted for the largest share of exports in each

of the years. The share of total shipments exported to the United States was *** percent in 2005,

increasing to *** percent in 2006, but were never more than *** percent of total shipments after 2006. 

Between 2005 and 2010, exports to the EU (e.g., Germany, Greece, Italy, Latvia, Poland, Spain, and the

 15 Staff compared the Russian producers that responded to the Commission’s questionnaires to those producers

identified by the steel analysts at ***. See ***. According to this comparison, the three responding Russian

producers accounted for *** percent of hot strip rolling capacity in Russia in 2010. The remaining Russian capacity

is attributed by *** to Urals Steel and to OMK Steel, although an additional small producer was identified by

domestic interested parties. U.S. Steel prehearing brief, p. 45. 

 16 The exception is 2009, when 46.9 percent of production was internally consumed or transferred.

 17 The majority of Russian producers’ commercial shipments of hot-rolled steel were exported during 2005-10.

The Russian home market nonetheless accounted for between 29.5 percent and 44.5 percent of commercial

shipments during 2005-10. 

II-9
UK)18 ranged between *** and *** percent of total shipments, and exports to countries other than the

United States, the EU, and Asia (e.g., Belarus, Egypt, Iran, Morocco, Nigeria, Turkey, and Ukraine)

ranged between *** percent and *** percent of total shipments. Russian export shipments to Asia were

highly variable. In 2005, exports to Asia (e.g., Bangladesh, China, India, Korea, Uzbekistan, and

Vietnam) accounted for *** percent of total shipments, then dropped to *** to *** percent of total

shipments in 2006-08 before increasing to *** percent in 2009. In 2010, this figure was in between the

two extremes, at *** percent. Based on these data, it is likely that Russian hot-rolled steel producers have

the ability to shift shipments from their home market and other non-U.S. export markets to the United

States. 

The ability of Russian producers to shift sales from their home market or from non-U.S. export

markets to the U.S. market may be moderated by existing relationships with current customers. ***

stated that it is able to shift sales between markets since most antidumping measures have expired. 

Exports to the EU, however, are more difficult since the EU has a quota of 1.1 million metric tons for hotrolled steel from Russia. *** Russian producers that provided information on this issue, ***, reported

that it is difficult to shift exports to the United States, since they ***.19 ***, so long lead times make it

difficult to ship to firms that may not want to add risk in a volatile market. Furthermore, high freight

costs and low availability of ships bound for the United States make logistics difficult. Also, *** believes

that the quota on shipments to Europe will be lifted after Russian accession to the WTO in 2011 or 2012. 

Sales characteristics–*** reported that *** percent of its exports to U.S. customers in 2010 were sold on

the spot market.20 *** reported that its 2010 exports to U.S. customers were pursuant to contracts that

were typically 12 months in length, fixed quantity, with price renegotiable, but not containing a meet-orrelease clause. Two of three Russian producers expect availability of Russian-produced hot-rolled steel

in the United States to decrease due to ***. 

Nonsubject Imports

The five largest sources of nonsubject imports during 2005-10 were Canada, Korea, Australia,

Mexico, and the Netherlands. Combined, these countries accounted for 87.6 percent of imports of hotrolled steel in 2010. They have consistently accounted for the majority of U.S. imports, including

approximately 90 percent during 2007-10. Specifically, after accounting for 69.3 percent in 2005 and

56.0 percent in 2006, they accounted for between 87.6 and 91.3 percent of imports in 2007-10.

U.S. Demand

Based on available information, hot-rolled steel purchasers are likely to respond to changes in the

price of hot-rolled steel with relatively small changes in their purchases of hot-rolled steel. The main

contributing factors to the low responsiveness of demand are the low cost share and the lack of

commercially viable substitute products. 

 18 ***.

 19 Both of these firms reported that *** of their sales are made on a contract basis and that the length of these

contracts is one year.

 20 *** also reported, however, that all of its steel is produced on a made-to-order basis, as was also noted by the

other Russian producers. 

II-10
End Uses

U.S. demand for hot-rolled steel depends on the level of demand for downstream products using

hot-rolled steel products.21 Some of the hot-rolled steel is sold to service centers which may further

process the hot-rolled steel to customer specifications while other hot-rolled steel is used in a diverse

array of industries such as automobiles, auto parts, appliances, and construction. Various importers,

producers, and foreign producers reported the use of hot-rolled steel in pipes, tubes, shelving racks, torque

converter covers, agricultural equipment, construction equipment, industrial machinery, automotive parts,

shipbuilding machinery, tin mill products, boilers, cranes, platforms, guard rails, and pilings. Hot-rolled

steel purchasers also noted using hot-rolled steel in products such as automotive suspension parts, beam

assemblies, brake components, bumpers, conduit, dishwashers, electrical housings, hollow structural

shapes, hydraulic tanks, lawn mower decks, refrigerators, steel grating, and washing machines. 

Four producers, one importer, and four purchasers reported that there have been changes in end

uses since 2005; some are new products and others represent a change in inputs. Producer *** stated that

more sophisticated hot-rolled products have been used in some cold-rolled and corrosion-resistant

applications. Producer *** indicated the renewable energy sector is a new end use. Producer ***

reported the use of lighter-gauge hot-rolled steel in new applications. Importer *** indicated that more

light gauge HSLA hot-rolled is being used in galvanizing. Purchaser *** noted steel utility poles and

frames for solar panels as new end uses. Purchaser *** stated that new automotive parts may take the

place of old automotive parts whose life cycle has ended. Purchaser *** stated that there is more use in

the mining exploration industry. While most producers, importers, and purchasers reported that they did

not anticipate changes in the end uses of hot-rolled steel, a few producers, importers, and purchasers

reported that they saw continued evolution and development of the end uses such as the consumption of

more light gauge hot-rolled steel and the replacement of some more costly, less “green” products. In

contrast, purchasers *** noted they anticipate decreasing direct usage in the automotive industry as zinc

coated steel use increases and as there is a shift from full-frame chassis to a unibody chassis.

Foreign producers reported as to whether the end uses for hot-rolled steel they produce vary by

destination country. Two of three Brazilian producers reported that the end uses are the same in the home

market and in export markets. The other Brazilian producer, ***, stated that most of the hot-rolled steel it

produces for the domestic market is used ***. Four of five Japanese producers indicated that the hotrolled steel they sell to U.S. purchasers is used ***, whereas the hot-rolled steel produced for home

market and third-country markets has a variety of end uses. *** noted that it supplies mostly commercial

steel to the U.S. and third-country markets, whereas since 2005 it has supplied ***.22

Business Cycles

Industry participants generally agree that the hot-rolled steel industry experiences recurrent

expansions and contractions. U.S. industry representatives have referred to the steel industry as being

cyclical in nature. In general, demand for hot-rolled steel tends to follow the broad demand trends in the

 21 In 2010, approximately 60 percent of total domestic shipments of certain hot-rolled steel was either consumed

internally within domestic mills or transferred to affiliated companies for further processing. The primary use for

these intra-company transfers is in the production of cold-rolled steel. Hot-rolled steel is the only product that can

be used in the cold-reduction process and substitution with other products is not possible. 

 22 This was the only significant change in the product range, product mix, or product marketing that was

identified by any foreign producer. No foreign producer expects any changes in these factors in the U.S. market.

II-11
U.S. economy.23 U.S. producers, importers, and purchasers were asked if the hot-rolled steel market was

subject to business cycles or conditions of competition distinctive to the hot-rolled steel industry. Seven

producers and 16 importers responded “no,” while 7 producers and 12 importers responded “yes.” Of the

32 responding purchasers, 19 reported “yes” while 13 stated “no.” Responses were highly varied. The

identified distinctive conditions of competition included: availability of steel, dependence on global

economic conditions (especially construction), industry consolidation, scrap demand from China, demand

for further-processed steel, more profitable steel products, and demand from various downstream

industries. Purchasers also described three types of business cycles which affect the hot-rolled steel

market. First, *** described an inventory cycle of purchasers trying to “beat the next price increase,”

which further pushes up the price of hot-rolled steel, and then ending up with extra inventory and ceasing

purchasing until the price declines. Purchasers *** and *** reported a 12-month cycle, strengthening in

the first quarter, peaking in the second quarter, falling in the third quarter, and reaching bottom in the

fourth quarter of a given year, with order books filling up for the next year during the holiday season. 

The third cycle described by several purchasers is a multi-year cycle driven by broad manufacturing

(especially in the auto and energy sectors) and construction cycles. 

Producers, importers, and purchasers were also asked if business cycles or conditions of

competition distinctive to the hot-rolled steel industry have changed since 2005. Eight of 14 producers

and 13 of 29 importers identified changes in conditions of competition or business cycles since 2005,

most frequently noting the increased volatility of pricing and demand and the economic downturn as

causing the changes. Among purchasers, 18 responded “yes,” while 14 responded “no.” The most

frequently noted changes in the conditions of competition by purchasers were the increased volatility in

prices and availability of hot-rolled steel. Purchasers described changes in availability attributable to

industry consolidations, the idling of domestic production due to decreases in demand, new capacity

being brought on line,24 increasing steel consumption outside the United States, and China’s growth. Two

purchasers also reported that business cycles have become shorter since 2005. 

Apparent Consumption

Available data indicate that apparent U.S. consumption of hot-rolled steel increased 8.8 percent

from 2005 to 2006 (from 65.9 million short tons to 71.6 million short tons), then declined through 2009

(to 40.4 million short tons - a 43.6 percent decrease) before rising by 38.8 percent in 2010 (56.1 million

short tons). Overall, apparent consumption was 14.5 percent lower in 2010 compared with 2005. 

 Numerous responding firms indicated that demand for hot-rolled steel generally tracks overall

economic conditions. Quarterly real growth in U.S. GDP is presented in figure II-1. Average forecasts

for U.S. real GDP growth are 2.9 percent in 2011 and 3.2 percent in 2012.25 Petitioners presented

testimony at the hearing noting that in particular the automotive, construction, and energy sectors have an

effect on the demand for hot-rolled steel. Real industrial production is predicted to increase by 4.5

percent in 2011 and 4.1 percent in 2012. In fact, “vehicle production may be a particular contributor to

faster growth in manufacturing. Unit sales of autos and light trucks continue to improve and in February 

 23 See Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil, Japan, and Russia, Inv. Nos.

701-TA-384 and 731-TA-806-808 (Review), USITC Publication 3767, April 2005, p. II-1.

 24 One purchaser noted that the glut of global capacity was occurring as global demand was contracting severely.

 25 Blue Chip Economic Indicators, Vol. 36, No. 4, April 10, 2011. This average or “consensus” rate is derived

from monthly interviews of leading business economists and is one of the best known organizations for consensus

macroeconomic forecasts. See http://www.aeaweb.org/RFE/showRes.php?rfe_id=35&cat_id=, retrieved March 15,

2011. 

II-12
Figure II-1

Real U.S. GDP growth: Percentage change, quarterly, January 2005-March 2011 

Source: Bureau of Economic Analysis.

rose to their highest monthly level since the August 2009 ‘cash for clunkers’ surge.”26 General Motors

reported that it expects to increase production *** percent between 2010 and 2011.27

Monthly U.S. auto sales figures are presented in figure II-2. Auto sales decreased at the same

time as the general decline in the U.S. economy both in the United States and worldwide. At the hearing,

domestic interested parties reported that a large number (31⁄2-4 million vehicles per year) of auto sales

prior to 2008 were made using home-equity financing, leading to an unsustainable level of demand.28

Auto sales in the United States have since recovered to 13.3 million units on an annualized basis, and

have been predicted to be over 13 million units for full-year 2011.29 Worldwide production of cars

increased from 46.8 million units in 2005 to 53.2 million units in 2007 before decreasing to 47.7 million

units by 2009. Car production has increased more that 20 percent since 2009, however, reaching a record

58.3 million units in 2010.30 Worldwide commercial vehicle31 production increased irregularly 

-8

-6

-4

-2

0

2

4

6

2005200620072008

2009

2010

2011

Percentage change

Real quarterly GDP growth

 26 Ibid., p. 11.

 27 Letter from ***.

 28 Hearing transcript, p. 122 (Conway).

 29 “Auto Sales May Top Analysts’ Earlier Estimates on Job Recovery,” Bloomberg News, April 11, 2011,

included as exh. 2 to respondent interested parties’ Joint Brazilian and Japanese posthearing brief and hearing

transcript, p. 242 (Vandevert).

 30 International Organization of Motor Vehicle Manufacturers, retrieved April 18, 2011, found at 

http://oica.net/category/production-statistics/.

 31 Includes light commercial vehicles, heavy trucks, coaches, and buses.

II-13
Figure II-2

U.S. automotive sales: Automobile and truck retail sales, monthly, on an seasonally adjusted,

annualized basis, January 2005-February 2011 

Source: Bureau of Economic Analysis.

from 19.6 million units in 2005 to 20.1 million units in 2007, before declining to 14.0 million units in

2009. In 2010, worldwide commercial vehicle production increased to 19.3 million units.32 Purchaser

Ford noted that worldwide motor vehicle production will increase further in 2011.33 

Figure II-3 shows total construction spending on a monthly basis and a leading economic

indicator known as the Architecture Billings Index (“ABI”).34 Total construction spending is comprised

of residential and non-residential spending. Nonresidential spending generally increased from January

2005 until October 2008, and has been generally declining since that time. Residential spending, on the

other hand, increased between January 2005 and March 2006, declined until July 2009, and has been

fluctuating just above that level since July 2009. The ABI generally declined from March 2007 (the

period when the first data is available) until January 2009, partially recovered in 2009, and has been

increasing irregularly since March 2010. 

Demand for hot-rolled steel is driven partially by the demand for welded pipe. One measure of

shipments of welded pipe (continuous and ERW pipe, as reported by Metal Bulletin Research) increased

from 2.8 million short tons in 2005 to 3.1 million short tons 2007. Shipments decreased in 2008 to 2.6

million tons and decreased precipitously in 2009, to 1.1 million short tons, before increasing to 1.8

million short tons in 2010.35

0

5

10

15

20

25

200520062007200820092010

2011

Millions of vehicles

 32 International Organization of Motor Vehicle Manufacturers, retrieved April 18, 2011, found at 

http://oica.net/category/production-statistics/.

 33 Respondent interested party Ford’s posthearing brief, p. 1.

 34 The Architecture Billings Index is derived from a monthly “Work-on-the-Boards” survey which is produced by

the American Institute or Architects Economics and Market Research Group. The ABI is reported to provide a 9- to

12-month glimpse into the future of nonresidential construction activity. Found at 

http://www.architectmagazine.com/economic-conditions/abi-report.aspx, retrieved April 13, 2011. 

 35 Metal Bulletin Research, various issues, January 2006-February 2011.

II-14
Figure II-3

U.S. construction activity: Total construction spending (residential and nonresidential), monthly,

January 2005-February 2011, and the Architecture Billings Index, monthly, March 2007-February

2011 

Source: U.S. Census Bureau and Architect Magazine.

Demand Perceptions

Producers, importers, purchasers, and foreign producers were asked to discuss trends in demand

in the United States during 2005-10. All but one responding U.S. producers (11 of 12) reported that

demand for hot-rolled steel had fluctuated since 2005, noting steady or increasing demand before the

economic downturn started in 2008, then a decline in 2008-09, and some recovery in 2010.36 A majority

of responding importers (18 of 29) and purchasers (21 of 31) provided a similar assessment, with 8

importers and 6 purchasers noting a decrease in domestic demand and 3 importers and 2 purchasers

reporting “no change.” Only two purchasers identified increasing demand, with each noting that an

increase in lower-gauge mini-mill production capabilities which would lead to a shift from cold-rolled

steel to hot-rolled steel.37 Among foreign producers, two each reported increasing, decreasing, and

fluctuating U.S. demand for hot-rolled steel, and one reported that there was no change. 

Purchasers were also asked to describe how demand for their end-use products had changed since

2005. Fourteen reported that demand for the end-use products had fluctuated, four noted an increase, one

noted a decrease, and one stated that it had not changed. Eighteen of 22 responding purchasers noted that

the changes had affected their demand for hot-rolled steel. Purchasers identified changes in the appliance,

automotive, construction, and pipe markets as directly affecting demand for hot-rolled steel. Purchaser

*** also noted that demand for lighter, more fuel-efficient cars which use less hot-rolled steel than fullsize trucks will fluctuate inversely with the price of gas; therefore demand for hot-rolled steel will vary

somewhat with gas prices. 

When asked about anticipated future changes in hot-rolled steel demand in the United States, 3 of

10 producers, 15 of 28 importers, 11 of 32 purchasers, and 5 of 7 foreign producers responded that they

anticipate increasing demand. Six producers, 8 importers, and 16 purchasers anticipate fluctuating

demand, while only one importer and one purchaser anticipate decreasing demand. A large majority of

200

400

600

800

1 ,0 0 0

1 ,2 0 0

1 ,4 0 0

2005200620072008200920102011

Billions of dollars

0

1 0

2 0

3 0

4 0

5 0

6 0

7 0

Index value

S eas onally adjus ted annual rate c ons truc tion s pending A rc hitec ture B illings Index

 36 The other producer reported decreasing demand in the United States for hot-rolled steel since 2005.

 37 This shift would not affect demand greatly, as hot-rolled steel is used in the production of cold-rolled steel.

II-15
responses indicated that general economic trends would be the reason if they identified that demand

would either fluctuate or increase. Purchaser *** anticipates declining demand due to a “continued

decline in domestic manufacturing.” One producer, two foreign producers and four importers and

purchasers each reported not anticipating any changes in U.S. hot-rolled steel demand. Recently, the

Chairman and CEO of Steel Dynamics reported that “there is strength in many of the end-markets the

company serves, notably automotive, transportation, energy, industrial, agricultural and construction

equipment.”38

Substitute Products

Seven of 14 responding U.S. producers, 4 of 23 responding importers, and 3 of 11 foreign

producers listed one or more substitutes products for hot-rolled steel. Substitutes include other types of

steel (e.g., alloy, cold-rolled, galvanized, and stainless), and other types of material (e.g., aluminum,

carbon fiber, composites, concrete, copper, ductile iron, non-ferrous materials, and plastics). Seventeen

of the 35 responding purchasers reported that there were substitutes for hot-rolled steel which, in addition

to those reported by the producers, importers, and foreign producers, included downstream products (e.g.,

coated products and seamless tubing), wood, stainless steel, aluminum alloy, and hot-rolled plate. 

 Substitution depends greatly upon the intended end use for the hot-rolled steel. End uses for

which other steel products could be used included agricultural equipment, appliances, automotive,

building components, exhaust flanges, galvanized steel, laser machines, pipe and tube, and tanks. Other

non-steel substitutes could be used in building, poles and posts, sheet molded composites, stamped parts,

and water transmission. 

U.S. producers, importers, purchasers, and foreign producers were asked if the price of substitutes

affected the price of hot-rolled steel. None of the U.S. producers, importers, or foreign producers and

only one of the 14 responding purchasers reported that the price of substitutes had an effect on the price

of hot-rolled steel. ***, the only purchaser reporting that the price of substitutes did affect the price of

hot-rolled steel, reported that both concrete and other steel products were substitutes in the construction or

manufacturing industries.

None of the U.S. producers, importers, or foreign producers reported that there had been changes

in substitutes for hot-rolled steel since 2005; one purchaser (***) reported that its core engineering

strategy is an ongoing review of material substitutions possibilities. 

None of the producers or importers reported that they expected changes in substitutes for hotrolled steel. Two purchasers reported that they expect changes in substitutes: one expects high strength

steel to increase in popularity while the other expects new substitutes from normal innovation, but did not

note any specific areas in which it expect this innovation to occur. One foreign producer reported the

increasing use of plastic, copper, and stainless steel in potable water pipe applications. 

Cost Share

The cost share of final end-use products accounted for by hot-rolled steel depends greatly upon

the end use in which it is needed. Producers, importers, and purchasers were asked to estimate the

percentage of the total cost of the end product accounted for by the cost of the hot-rolled steel. Producer

and importer estimates of cost shares ranged from less than 1 percent (e.g., agricultural products and

construction projects) to about 80 to 90 percent (agricultural and construction equipment, cut-to-length

 38 “Mill cuts send flat-rolled steel tags in about-face,” American Metal Markets, April 20, 2011, found at

http://www.amm.com/Article/2811634/Mill-cuts-send-flat-rolled-steel-tags-in-about-face.html, retrieved April 26,

2011.

II-16
plate, pipe, tube, storage racks, and warehousing).39 Purchaser cost-share estimates ranged from 1 percent

or less (for deck products, front rail outer frames for pickups and SUVs, refrigerators, steel joists, and

washing machines) to 70 to 90 percent (for pipe, tube, hollow shapes, and steel gratings). 

SUBSTITUTABILITY ISSUES

The degree of substitution between domestic and imported hot-rolled steel depends upon such

factors as relative prices, quality (e.g., formability, performance, surface quality, etc.), and conditions of

sale (e.g., price discounts/rebates, lead times between order and delivery dates, payment terms, product

services, etc.). Based on available data, staff believes that overall there is a high degree of substitutability

between domestically produced hot-rolled steel and hot-rolled steel imported from Brazil, Japan, and

Russia.

Purchaser Characteristics

Purchaser questionnaires were sent to 65 purchasers. Responses were received from 34 of these

firms, 32 of which provided useable data, and unsolicited questionnaires were also received.40 Detailed

information regarding these purchasers is presented in Part I. Sixteen purchasers buy hot-rolled steel on a

daily basis, seven on a weekly basis, six on a monthly basis, one quarterly, two annually, and five on

some other basis. Only two purchasers reported changing their purchasing patterns since 2005, but they

both described how they intend to change their purchasing patterns in the future: *** reported that it

wants to contract every two years, and *** noted that it could purchase twice monthly as forecasting

technology improves. Purchasers reported contacting between 1 and 8 suppliers before purchasing hotrolled steel, but on average between 3 and 4 suppliers are contacted.

Knowledge of Country Sources

Purchasers were asked to indicate the countries of origin for which they have actual hot-rolled

steel marketing/pricing knowledge. All 38 responding purchasers were familiar with U.S.-produced hotrolled steel, 4 were familiar with product from Brazil, 7 were familiar with product from Japan, 4 were

familiar with product from Russia, and 14 were familiar with those from other countries, including

Canada, China, Egypt, France, Germany, Hungary, India, Malaysia, Mexico, the Netherlands, New

Zealand, South Korea, Spain, Sweden, Thailand, and Turkey. 

Purchasers were also asked how frequently they and their customers made purchasing decisions

based on the country of origin or the manufacturer of hot-rolled steel. The majority of purchasers

reported that they always or usually make purchase decisions based on country of origin; however, the

majority of their customers sometimes or never make hot-rolled steel purchasing decisions based on

country of origin. The manufacturer is relatively much less important: approximately 90 percent of

purchasers and their customers reported that they only sometimes or never make hot-rolled steel

purchasing decisions based on the manufacturer (table II-3).41

 39 Answers seem somewhat dependent on what responding firms consider the “end use.” For example, steel may

account for a large cost of agricultural equipment, but a small share of the final cost of the crop that is produced.

 40 ***. The majority of their responses were identical, with the exception of questions regarding sourcing of their

hot-rolled steel, e.g., the quantity of hot-rolled steel purchased. These responses are treated as one response unless

otherwise indicated. 

 41 The *** were compiled separately for this calculation, as their answers were not the same.

II-17
Table II-3

Hot-rolled steel: Purchaser responses to questions regarding the origin of their purchases

Purchaser/customer decision Always Usually Sometimes Never

Purchaser makes purchase decision based on

country of origin 9 14 9 6

Purchaser makes purchase decision based on the

manufacturer 0 4 13 18

Purchaser’s customer makes purchase decision

based on country of origin 2 6 10 14

Purchaser’s customer makes purchase decision

based on the manufacturer 1 2 15 12

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

Factors Affecting Purchasing Decisions

Major Factors in Purchasing

Purchasers were asked to identify the three major factors considered by their firm in deciding

from which firm to buy hot-rolled steel (table II-4). Quality was reported to be one of the top three

factors by all 32 of the responding purchasers, and price was reported to be one of the top three factors by

31 firms. Quality was the most frequently cited most important factor (cited by 17 purchasers), quality

was the most frequently reported second most important factor (10 purchasers), and price and

delivery/lead times were the most frequently reported third most important factor (10 purchasers). 

Table II-4

Hot-rolled steel: Ranking factors used in purchasing decisions, as reported by U.S. purchasers

Factor

Number of firms reporting

First Second Third Total

Quality 17 10 5 32

Price 12 9 10 31

Availability 1 8 4 13

Delivery/lead times 1 5 10 16

Product range 0 0 3 3

Other1 1001

 1 Other includes approval process ***. 

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

Of the 33 purchasers which responded when asked how often they purchase the hot-rolled steel

that is offered at the lowest price, 21 firms indicated “usually,” 10 firms indicated “sometimes,” 2 firms

indicated “always,” and no firms indicated “never.” Twenty-three purchasers listed reasons why they

purchased higher-priced hot-rolled steel even though lower-priced hot-rolled steel was available. Reasons

indicated by purchasers included: quality, service, delivery/reliability of supply, availability, size range,

approval by customers, minimum order size, partnerships, and technical assistance. Most firms did not

specify the country of origin of the higher-priced hot-rolled steel that they purchased.

II-18
Twenty-four purchasers also reported that they purchased hot-rolled steel from one source

although a comparable product was available at a lower price from another source. Reasons provided

include: availability to meet customer schedule, freight rates, lead time, long-term relationship with

supplier, quality, purchasing a specific size range, and preference for domestic product.

Purchasing Patterns42

Purchasers were asked a number of questions about whether their purchasing patterns for hotrolled steel from subject and nonsubject sources had changed since 1999. Twenty-six of 36 responding

purchasers reported that they had purchased hot-rolled steel from Brazil, Japan, or Russia before 1999,

but only one of these reported no changes in its purchasing patterns since 1999. One firm reported that it

had discontinued its purchases from Japan because of the order, two purchasers reported decreasing their

purchases since the order (one from Russia and one from Russia and Japan). Five reported changes in

purchases for reasons other than the order, with most of these reporting changes because of decreased

availability of product from subject countries.

Eleven purchasers reported that they did not purchase from nonsubject countries before or after

the orders or suspension agreement; 18 reported that their purchases from nonsubject countries were

essentially unchanged; 2 increased their purchases from nonsubject countries because of the orders; and 6

changed their purchases from nonsubject countries for reasons other than the orders (e.g., availability,

price, and supply risk management). 

Importance of Specified Purchase Factors

Purchasers were asked to rate the importance of 15 factors when making their purchasing

decisions (table II-5). The factors listed as “very important” by at least half of the responding firms were

product consistency (30 purchasers); availability and reliability of supply (29 purchasers each); delivery

time, quality meets industry standards, and price (28 purchasers each); U.S. transportation costs (21

purchasers); delivery terms (19 purchasers); product range (18 purchasers); and technical support (17

purchasers each).

Factors Determining Quality

Purchasers were asked to identify the factors that determine the quality of hot-rolled steel. 

Purchasers reported numerous specific factors. These factors include the following: chemistry;

consistency (e.g., gauge controls, consistency of finish, and consistency of product between coils and

batches); physical properties (e.g., formability, impact toughness, yield/tensile strengths, and ductility);

shape (e.g., flatness, width, thickness); surface (e.g., clean, free of pits and corrosion, and quality of 

milled edges); and other factors (e.g., adherence to specifications, meeting ASTM standards, level of

camber, quality of certification, sound welds, strip profile, and type of steel-making equipment). 

Purchasers were also asked to report whether they require each of seven listed product

characteristics in the hot-rolled steel that they purchase and, if so, whether they would consider 

purchasing hot-rolled steel from the United States and the subject countries based on these

characteristics.43 As shown in table II-6, almost all of responding purchasers found that hot-rolled steel 

 42 The *** were compiled separately for this section, as their answers were not the same.

 43 Those characteristics include surface quality, tight gauge control, steel cleanliness, coil-to-coil and batch-tobatch consistency, cut-edge, tight chemistry tolerances, and formability. 

II-19
Table II-5

Hot-rolled steel: Importance of purchase factors, as reported by purchasers

Factor

Very important Somewhat important Not important

Number of firms responding

Availability 29 3 0

Delivery terms 19 13 0

Delivery time 28 4 0

Discounts offered 14 15 3

Extension of credit 13 9 10

Minimum quantity

requirements 9 17 6

Overall quality meets industry

standards 28 4 0

Overall quality exceeds

industry standards 13 13 6

Packaging 11 15 6

Price 28 4 0

Product consistency 30 2 0

Product range 18 12 2

Reliability of supply 29 3 0

Technical support/service 17 14 1

U.S. transportation costs 21 10 1

Other1 5 01

 1 “Other” includes country of origin, financial stability, offering 12 month fixed prices, payment terms, and

quality certification.

Note.--Not all purchasers responded for each factor.

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

from the United States tend to have each of these characteristics. Japanese hot-rolled steel was next most

likely to be reported to have these characteristics followed by Brazilian hot-rolled steel, and Russian hotrolled steel. Although preferences may differ, the majority of responding purchasers reported product

from each of the three subject countries had each of these characteristics. 

Five of the 32 responding purchasers reported that certain grades/types/sizes of hot-rolled steel

were available from only one source (either domestic or foreign). They reported that certain strength

grades are only available from a single source (e.g., ***); and some width and thicknesses are available

from only one source (e.g., ***). 

II-20
Table II-6

Hot-rolled steel: Information on certain quality factors required by U.S. purchasers, by factor and

by source1

Quality factor is required? Yes No

If so, would you purchase from:

U.S. Brazil Japan Russia

Y N Y N Y N YN

Formability 28 5 31 0 15 1 20 1 13 2

Steel cleanliness 27 2 30 0 11 5 16 5 10 7

Tight gauge control 27 3 29 0 9 5 16 5 9 7

Tight chemistry tolerances (carbon or other

elements) 26 6 30 2 15 1 21 1 12 2

Coil-to-coil and batch-to-batch consistency 25 4 28 1 10 5 16 5 9 7

Surface quality (i.e., skin passed) 24 5 27 0 9 5 15 5 8 7

Cut-edge 17 12 26 1 13 6 17 6 11 8

 1 Purchasers were asked whether they require any of the listed product characteristics in the hot-rolled steel

that they purchase and, if so, whether they would consider purchasing hot-rolled steel from the countries listed

(taking into account that factor). Data in the table represent the number of purchasers for each factor.

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

Supplier Certification

Twenty-nine of 34 responding purchasers reported they require their suppliers to become certified

or pre-qualified for all the hot-rolled steel that they purchase.44 Factors considered in certification or prequalification include: ASTM certification; competitiveness; experience with the supplier (e.g., mill visits,

referrals from trusted sources, suppliers’ demonstrated ability to supply on time and at expected quality,

and suppliers’ financial stability); product characteristics (e.g., physical characteristics, chemical

requirements); range of products; and lead times. The time to qualify a new supplier ranged from a low

of one day to a high of one year; most purchasers reported that it took three months or less to qualify a

new supplier.

Purchasers were also asked if, since 2005, any domestic or foreign producers had failed in their

attempts to certify or qualify their hot-rolled steel with their firm or if any producers had lost their

approved status. Thirty-one of the 33 responding purchasers indicated that no domestic or foreign

producer had failed in its attempts to certify or qualify hot-rolled steel nor had any producers lost their

approved status. Of the two firms that reported that firms had failed to be certified or lost their

certification, one reported that Chinese product frequently failed to qualify because of quality, mill test

reports which lacked integrity, or delivery delays, while the other reported that some products from ***

had been disqualified, but the firms were working to solve the production issues and re-qualify them.

 44 This response compiles *** separately.

II-21
Lead Times

Most U.S. producers and importers reported that the vast majority (and in many cases all) of their

sales are produced to order rather than being sold from inventory. Thirteen of 14 responding producers

reported that 95 percent or more of their sales were of product made-to-order. Similarly, 13 of the 15

responding importers reported that 90 percent or more of their sales were of product made-to-order. The

majority of U.S. producers making hot-rolled steel on a produce-to-order basis reported lead times of four

to six weeks; for those limited number of firms that reported sales from inventories, lead times ranged

from 1 to 2 weeks. Importers reported lead times ranged from about 2 to 6 months for product that is

made to order, while lead times from inventories ranged from 1 to 7 days.

Comparisons of Domestic Products, Subject Imports, and Nonsubject Imports

Purchasers were asked a number of questions comparing hot-rolled steel produced in the United

States, subject countries, and nonsubject countries. First, purchasers were asked for a country-by-country

comparison on the same 15 factors (table II-7) for which they were asked to rate the importance. For the

U.S. product compared to the Brazilian product, most responding purchasers reported U.S. product was

superior to the Brazilian product for all characteristics except the following: minimum quantity

requirements, overall quality meets industry standards, packaging, and product consistency (for which

most reported they were comparable). At least half of responding purchasers reported that the U.S.

product was superior to Japanese product in terms of six factors (availability, delivery terms, delivery

time, price, reliability of supply, and U.S. transportation costs); the majority reported that the U.S. and

Japanese product were comparable in terms of seven factors (discounts offered, extension of credit,

overall quality meets industry standards, overall quality exceeds industry standards, packaging, product

consistency, and technical support). A majority of purchasers reported U.S. product was superior to

Russian product for all factors except five. They reported U.S. and Russian product were comparable for

packaging, and price. For extension of credit and minimum quantity requirement, two each reported U.S.

was superior and U.S. was comparable with Russian product, and for discounts offered two reported U.S.

and Russian products were comparable, one reported the U.S. product was superior to Russian product,

and one reported U.S. was inferior to Russian product. 

Producers, importers, and purchasers were asked how frequently hot-rolled steel from different

countries were interchangeable (table II-8). Almost all responding U.S. producers reported that the

domestic and imported products are always or frequently interchangeable; one producer, however, 

reported that the Russian product is only sometimes interchangeable as a result of packaging, surface,

consistency, lead times, and on-time delivery. 

Most importers agreed that domestic and subject imported products were always or frequently

interchangeable. Two importers reported that U.S. and Brazilian product were only sometimes

interchangeable, four importers reported that U.S. and Japanese product was either sometimes or never

interchangeable, and five reported that U.S. product was only sometimes interchangeable with product

from Russia. Two importers reported generally that there are differences in surface quality, cleanliness of

steel, and tolerances among countries, while one reported differences in quality and specifications. One

importer reported that Japanese quality was not available from U.S. producers, while another reported that

the Japanese product was more consistent for some products. One importer reported that some Russian

mills may not produce steel of an adequate quality. 

II-22
Table II-7

Hot-rolled steel: Comparisons of product by source country, as reported by purchasers

Factor

U.S. vs Brazil U.S. vs Japan U.S. vs Russia

U.S. vs

Nonsubject

SC I SC I SC I SC I

Number of firms responding 

Availability 5 1 0 4 3 1 4 0 0 12 11 1

Delivery terms 5 1 0 4 4 0 4 0 0 11 13 0

Delivery time 6 0 0 7 1 0 4 0 0 12 11 1

Discounts offered 3 2 0 1 5 1 1 2 1 3 14 5

Extension of credit 4 1 0 1 6 0 2 2 0 6 16 0

Minimum quantity

requirements 2 4 0 3 4 1 2 2 0 3 21 0

Overall quality

meets industry

standards 2 4 0 0 7 1 3 1 0 2 22 0

Overall quality

exceeds industry

standards 3 2 0 0 5 2 4 0 0 7 16 0

Packaging 1 4 0 1 5 1 1 3 0 3 20 0

Price 4 2 0 4 4 0 0 4 0 5 11 8

Product consistency 2 4 0 0 6 2 4 0 0 5 19 0

Product range 5 1 0 2 3 3 3 1 0 11 13 0

Reliability of supply 5 1 0 4 4 0 4 0 0 10 14 0

Technical

support/service 5 1 0 2 5 1 4 0 0 9 15 0

U.S. transportation

costs 5 1 0 5 3 0 4 0 0 13 11 0

Note.--S=first listed country’s product is superior; C=both countries’ products are comparable; I=first listed country’s

product is inferior. 

Note.--Not all companies gave responses for all factors.

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

A substantial majority of purchasers (14 of 16 for Brazil, 18 of 20 for Japan, and 10 of 15 for

Russia) stated that hot-rolled steel from the United States was always or frequently interchangeable with

subject imports. None of the purchasers reported why product was only sometimes or never

interchangeable. 

II-23
Table II-8

Hot-rolled steel: U.S. firms’ perceived degree of interchangeability of products produced in the

United States and other countries1

Country comparison

U.S. producers U.S. importers U.S. purchasers

AFSNAFSNAFSN

U.S. vs. Brazil 9 1 0 0 8 11 2 0 8 6 1 1

U.S. vs. Japan 9 1 0 0 9 9 1 3 12 6 1 1

U.S. vs. Russia 8 1 1 0 5 12 5 0 6 4 4 1

Brazil vs. Japan 8 2 0 0 8 10 2 0 8 4 0 1

Brazil vs. Russia 8 1 1 0 5 12 4 0 6 3 2 1

Japan vs. Russia 8 1 1 0 8 10 4 0 8 2 0 2

U.S. vs. nonsubject 8 1 1 0 6 14 3 0 9 9 5 1

Brazil vs. nonsubject 8 1 1 0 7 11 3 0 6 4 1 1

Japan vs. nonsubject 8 1 1 0 7 10 2 0 9 3 1 1

Russia vs. nonsubject 8 1 1 0 7 11 3 0 6 3 2 1

 1

 Producers, importers, and purchasers were asked if hot-rolled steel produced in the United States and in

other countries is used interchangeably.

Note.--“A” = Always, “F” = Frequently, “S” = Sometimes, “N” = Never.

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

Foreign producers were asked if the hot-rolled steel they produce and sell to their home market is

interchangeable with that sold in the United States or third-country markets. All three Brazilian

producers replied “yes.” Three of five Japanese producers and two of three Russian producers replied

“no,” citing differences in specification standards.45 

The majority of producers, importers, and purchasers reported that product from different subject

countries were either always or frequently interchangeable with product from other subject countries

(table II-8). The differences reported were the same as those reported comparing U.S. product with

subject product. Similarly, most U.S. producers, importers, and purchasers reported that product from

nonsubject countries was always or frequently interchangeable with both U.S. product and product from

each of the subject countries. 

In addition, producers, importers, and purchasers were asked to assess how often differences

other than price were significant in sales of hot-rolled steel from the United States, subject countries, or

nonsubject countries (table II-9). Most U.S. producers reported that differences other than price were

never important for any country combination. In contrast, responses by importers and purchasers were

more mixed. When comparing the United States to subject countries, most importers and purchasers

reported that there were “sometimes” or “never” differences other than price. However, a number 

 45 One of these Russian producers referenced an answer to an earlier questions which would indicate a “no”

response.

II-24
Table II-9

Hot-rolled steel: U.S. firms’ perceived significance of differences other than price between hotrolled steel produced in the United States and hot-rolled steel produced in other countries1

Country comparison

U.S. producers U.S. importers U.S. purchasers

AFSNAFS NAFSN

U.S. vs. Brazil 0 0 1 9 4 2 6 7 5 2 5 4

U.S. vs. Japan 0028715 65374

U.S. vs. Russia 0 0 0 9 4 3 7 7 4 1 7 4

Brazil vs. Japan 0028525 64234

Brazil vs. Russia 0 1 1 8 4 3 6 6 4 1 4 4

Japan vs. Russia 0118425 63145

U.S. vs. nonsubject 0 0 2 8 4 4 7 7 5 1 11 5

Brazil vs. nonsubject 0028435 65134

Japan vs. nonsubject 0028425 64144

Russia vs. nonsubject 0028425 64144

 1

 Producers, importers and purchasers were asked if differences other than price between hot-rolled steel

produced in the United States and in other countries were a significant factor in their sales of the products.

Note.--“A” = Always, “F” = Frequently, “S” = Sometimes, “N” = Never.

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

reported there were “always” or “frequently” differences other than price (6 of 19 importers and 7 of 16

purchasers for Brazil, 8 of 19 importers and 8 of 19 purchasers for Japan, and 7 of 21 importers and 5 of

16 purchasers for Russia). Most responding purchasers reported that there were sometimes or never

differences than prices for all subject vs. nonsubject country comparisons. 

Differences reported by purchasers noting differences include: availability/accessibility/lead

times, customer preferences, domestic/“Buy America”/NAFTA purchase requirements, product

consistency, product range, quality, reliability of supply, technical support/service, and

transportation/freight costs. These firms did not specify for which country pairs these differences

occurred. Two firms reported specific differences between U.S. and Japanese product. Purchaser ***

reported that if product is not from the United States or Japan, then quality is always a concern, since

Japan has a reputation for very high quality but producers from every other country must prove their

quality. 

II-25
ELASTICITY ESTIMATES

This section discusses elasticity estimates. Parties were encouraged to comment on these

estimates in their prehearing or posthearing briefs. Joint Brazilian and Japanese respondent interested

parties did so, noting that the suggested elasticities were a reasonable description of the general U.S. hotrolled steel market.46

U.S. Supply Elasticity47

The domestic supply elasticity for hot-rolled steel measures the sensitivity of the quantity

supplied by U.S. producers to changes in the U.S. market price of hot-rolled steel. The elasticity of

domestic supply depends on several factors including the level of excess capacity, the ease with which

producers can alter capacity, producers’ ability to shift to production of other products, the existence of

inventories, and the availability of alternate markets for U.S.-produced hot-rolled steel. Earlier analysis

of these factors indicates that the U.S. industry has a moderate ability to increase or decrease shipments to

the U.S. market; an estimate in the range of 2 to 4 is suggested.

U.S. Demand Elasticity

The U.S. demand elasticity for hot-rolled steel measures the sensitivity of the overall quantity

demanded to a change in the U.S. market price of hot-rolled steel. This estimate depends on factors

discussed earlier such as the existence, availability, and commercial viability of substitute products, as

well as the component share of hot-rolled steel in the production of any downstream products. Based on

the available information, the aggregate demand for hot-rolled steel is likely to be in a range of -0.75 to 

-1.0. Purchasers would not likely be very sensitive to changes in the price of hot-rolled steel and would

continue to demand fairly constant quantities over a considerably wide range of prices.

Substitution Elasticity

The elasticity of substitution depends upon the extent of product differentiation between the

domestic and imported products.48 Product differentiation, in turn, depends upon such factors as quality

and conditions of sale. Based on available information, the elasticity of substitution between domestic

and subject imports is likely to be moderate and in the range of 3 to 5, with more specialized products

falling in the lower part of this range.49

 46 Joint Brazilian and Japanese respondent interested parties noted, however, that there were no foreign supply

elasticities included in the staff report. Joint Brazilian and Japanese respondent interested parties’ posthearing brief,

app. 1, p. 19. These estimates are not typically presented in staff reports. 

 47 A supply function is not defined in the case of a non-competitive market.

 48 The substitution elasticity measures the responsiveness of the relative U.S. consumption levels of the subject

imports and the domestic like products to changes in their relative prices. This reflects how easily purchasers switch

from the U.S. product to the subject products (or vice versa) when prices change.

 49 Joint Brazilian and Japanese respondent interested parties contend that this substitution elasticity does not

capture the nature of Japanese exports to the United States being focused on “very high quality specialty hot-rolled

steel,” and the estimate for Japan should be “much smaller.” Joint Brazilian and Japanese respondent interested

parties’ posthearing brief, app. 1, p. 19. 

II-26
PART III: CONDITION OF THE U.S. INDUSTRY

OVERVIEW

During the period since the filing of the original petitions, the U.S. industry has experienced

substantial consolidation. In addition, several U.S. mills have been acquired by foreign companies. 

Table III-1 summarizes important industry events that have taken place in the U.S. industry since

September 30, 1998.

Table III-1

Hot-rolled steel: Survey of industry events since September 30, 1998

Year Company

Description of event

(Merger, shutdown, bankruptcy, change in capacity, etc.)

1998 Bethlehem Steel Acquisition: Acquires Lukens, Inc., a producer primarily of plate products,

but with some capability to produce heavy plate in coils. 

Inland Steel Acquisition: Was acquired by Ispat International, Inc., a London-based

holding company of mostly minimill steel companies in several countries.

Caparo Steel Acquisition: Was acquired by the Duferco Group, a Swiss trading company.

1999 AK Steel Acquisition: Acquires Armco Inc., a producer primarily of stainless and

silicon steel flat products, but also a producer of hot-rolled steel.

2000 Gulf States Steel Closure: In Chapter 11 bankruptcy proceedings and ceases production. 

Company is liquidated and equipment is sold to companies in China.

LTV Steel Bankruptcy: Files for Chapter 11 bankruptcy protection.

Wheeling-Pittsburgh

Steel Corp.

Bankruptcy: Files for Chapter 11 bankruptcy protection.

2001 Bethlehem Steel Corp. Bankruptcy: Files for Chapter 11 bankruptcy protection. Pension taken over

by the Pension Benefit Guaranty Corporation (“PBGC”).

Geneva Steel Co. Emergence from bankruptcy: Emerges from Chapter 11 bankruptcy

protection filed in 1999 but ceases production in November 2001. Although

Geneva Steel once again enters Chapter 11 bankruptcy proceedings in 2002,

the company never re-starts production.

NS Group Closure: Ceases producing its own hot-rolled steel and purchases hot-rolled

steel as an input for its downstream products. 

Trico Steel Co. Closure and bankruptcy: Ceases operations after receiving no funding from

its major shareholder, LTV, and files for Chapter 11 bankruptcy protection. 

2002 Acme Steel Bought out: In Chapter 11 bankruptcy protection during the original

investigations. Pension taken over by PBGC. Company is liquidated and a

new company, the International Steel Group (ISG), purchases and operates

Acme’s major assets. 

Gallatin Steel Co. Acquisition: Purchases assets of Huntco Steel (a service center) in Ghent,

KY and is now able to process its own hot-rolled steel products.

Geneva Steel Bankruptcy: Files for Chapter 11 bankruptcy protection again.

ISG Acquisition: ISG is created by the acquisition of LTV and Acme Steel.

LTV Steel Bought out: ISG purchases many of the assets of LTV and LTV is liquidated.

National Steel Bankruptcy: Files for Chapter 11 bankruptcy protection. Pension taken over

by PBGC.

Nucor Acquisition: Acquires Trico Steel Co.

Table continued on next page.

III-1
Table III-1--Continued

Hot-rolled steel: Survey of industry events since September 30, 1998

Year Company Description of event

(Merger, shutdown, bankruptcy, change in capacity, etc.)

2002 Trico Steel Co. Bought out: Acquired by Nucor.

Domestic Industry Safeguard measures: Applied on flat-rolled (including hot-rolled) steel and

other steel products, March 2002-December 2003.

2003 Bethlehem Steel Bought out: Acquired by ISG.

Geneva Steel Bankruptcy: Enters Chapter 7 bankruptcy proceedings. 

International Steel

Group

Acquisition: Acquires Bethlehem Steel.

National Steel Bought out: U.S. Steel purchases and operates substantially all of the

assets and National is liquidated.

Oregon Steel Manufacturing Change: Idles melt shop in Portland, OR, and relies solely on

purchased slabs for feedstock at that facility.

Rouge Steel Bankruptcy: Files for Chapter 11 bankruptcy protection. Pension taken over

by PBGC.

U.S. Steel Acquisition: Acquires the integrated steelmaking assets of National Steel. 

WCI Bankruptcy: Files for Chapter 11 bankruptcy protection.

Weirton Steel Bankruptcy: Files for Chapter 11 bankruptcy protection. Pension taken over

by PBGC.

Wheeling-Pittsburgh Bankruptcy: Emerges from Chapter 11 bankruptcy protection.

2004 Corus Tuscaloosa Bought out: Nucor purchases substantially all of Tuscaloosa’s steelmaking

assets. 

Geneva Steel Closure: Core assets sold to firms in China and are no longer operating in

the United States. 

ISG Acquisition: Purchases substantially all of the assets of Weirton Steel.

North Star Bought out: Cargill, Inc. (parent company of North Star) sells fixed assets

and working capital of North Star to Gerdau Ameristeel.

Nucor Acquisition: Purchases substantially all of the steelmaking assets of Corus

Tuscaloosa.

Rouge Steel Bought out: Acquired by the Severstal Group, a Russian-owned entity, and

is renamed Severstal North America.

Weirton Steel Bought out: ISG acquires the assets of Weirton Steel.

2005 Ispat Inland Bought out: LNM Holdings and Ispat International (parent company of U.S.

steel mill Ispat Inland) merge, creating a new entity - Mittal Steel Co. NV.

ISG Bought out: ISG is acquired by a new entity - Mittal Steel Co. NV.

Mittal Steel USA Inc. Acquisition: Mittal Steel Co. NV is a new entity created by the acquisition of

Ispat International (parent company of U.S. steel company Ispat Inland) and

LNM Holdings (all are companies headquartered in the Netherlands). As part

of the same transaction, Mittal subsequently acquires ISG.

2006 Mittal Steel USA Inc. Acquisition: Mittal Steel Co. NV (parent company of Mittal Steel USA Inc.) 

announces merger with Arcelor SA (Luxembourg-based), creating a new entity

Arcelor Mittal; the legal completion of the merger between Mittal and Arcelor

was completed in 2007.

Table continued on next page.

III-2
Table III-1--Continued

Hot-rolled steel: Survey of industry events since September 30, 1998

Year Company

Description of event

(Merger, shutdown, bankruptcy, change in capacity, etc.)

2007 Evraz Group Acquisition: Acquires the assets of Oregon Steel.

Mittal Steel USA Inc. Divestiture: The U.S. Department of Justice rules that Mittal must divest its

Sparrows Point, MD facility (formerly owned by Bethlehem Steel) for antitrust

regulations concerning the production of tin mill products. Mittal agrees to sell

that mill to E2 Acquisition Corp., a joint venture involving Esmark Inc.,

Wheeling-Pittsburgh Steel, and two equity investors (Brazilian iron ore

producer CVRD and Ukraine’s Industrial Union of Donbass). This agreement

fails and the Sparrows Point facility is sold to Severstal in 2008.

IPSCO Bought out: Acquired by SSAB Americas (Sweden).

SeverCorr New Producer: Starts operation of a newly-built plant in Columbus, MI.

Lone Star Bought out: Acquired by U.S. Steel, which subsequently announces the

permanent closure of Lone Star’s steelmaking and rolling capability.

Wheeling-Pittsburgh Merger: Merges with Esmark Inc., a steel service center chain, October 2007.

U.S. Steel Acquisition: Acquires Stelco, Inc. (Ontario, Canada), a major Canadian

producer of hot-rolled steel, November 2007.

2008 Severstal Acquisition: Acquires WCI Steel Inc., Warren, OH, and renames the unit

Severstal Warren LLC.

Severstal Acquisition: Acquires the Sparrow Point MD operations of ArcelorMittal SA

and renames the unit Severstal Sparrows Point LLC.

Severstal Acquisition: Acquires Esmark Inc., including Wheeling-Pittsburgh Steel

Corp, which it renames Severstal Wheeling Inc.

Severstal Buyout: Completes the buyout of the founding group of managers of

SeverCorr, Columbus, MI, increasing its ownership share to 85 percent. 

Renames the unit Severstal Columbus Inc.

NMLK Acquisition: AcquiresBeta Steel, Portage, IN.

2009 Severstal Shutdown: Idles Wheeling and Warren facilities.

2010 Severstal Restart: Warren facility restarted. 

Severstal Shutdown: Idles Sparrows Point facility.

ThyssenKrupp Steel

USA

New producer: ThyssenKrupp Steel USA commences operations at a newly

constructed plant in Calvert City AL, producing HRC from imported

semifinished steel.

2011 RG Steel LLC Acquisition: Privately-owned Renco Group Inc., acquires three steel

producing facilities from Severstal: Severstal Wheeling Inc., Severstal Warren

LLC, and Severstal Sparrows Point LLC, to create a new steel company, RG

Steel LLC.

Source: American Metal Market (various issues); Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From

Argentina, China, India, Indonesia, Kazakhstan, Romania, South Africa, Taiwan, Thailand, and Ukraine: Investigations

Nos. 701-TA-404-408 and 731-TA-898-902 and 904-908 (Review), USITC Publication 3956, October 2007, p. III-2.

III-3
Background

Information in this section is based on the questionnaire responses of 14 current and one former

domestic producers that accounted for all or virtually all domestic production in 2010.1

 

Changes Experienced by the Industry

Domestic producers were asked to indicate whether their firm had experienced any plant

openings, relocations, expansions, acquisitions, consolidations, closures, or prolonged shutdowns because

of strikes or equipment failure; curtailment of production because of shortages of materials or other

reasons, including revision of labor agreements; or any other change in the character of their operations or

organization relating to the production of hot-rolled steel since 2005. All domestic producers indicated

that they had experienced such changes; their responses are presented in table III-2.

Table III-2

Hot-rolled steel: Changes in the character of U.S. producers’ operations since January 1, 2005

* * * * * * *

Anticipated Changes in Operations

The Commission asked domestic producers to report anticipated changes in the character of their

operations relating to the production of hot-rolled steel. Their responses appear in table III-3. The

majority of firms did not anticipate such changes. Among the firms that do anticipate such changes, the

largest were tentative about the impact of the market on their future operating rates and project plans.2

 

Table III-3

Hot-rolled steel: Anticipated changes in the character of U.S. producers' operations

* * * * * * *

U.S. CAPACITY, PRODUCTION, AND CAPACITY UTILIZATION

U.S. producers’ capacity, production, and capacity utilization data for hot-rolled steel are

presented in table III-4.3 4

 Capacity and production fluctuated but decreased overall, despite recovering in

 1 Severstal North America reported data separately for its five establishments (Severstal Dearborn, Inc, Severstal

Columbus, LLC, Severstal Sparrows Point, LLC, Severstal Warren, Inc., and Severstal Wheeling, Inc.). For the

purposes of this section of the report, unless otherwise noted, data for each establishment have been reported

separately. Former U.S. producer, Lone Star, was closed down by U.S. Steel soon after acquiring it in 2007.

 2

 Of the two U.S. producers that provided informal business plans pertaining to hot-rolled steel, both ***

anticipated slight increases in production and sales of hot-rolled steel in 2011, and *** predicting slightly lower

prices than in 2010.

 3

 *** reported production of downstream product cold-rolled steel, but did not reflect this in its hot-rolled

production or shipment data; accordingly, Staff has adjusted the company’s data to incorporate these volumes into

production and internal consumption of hot-rolled steel.

 4

 Both ArcelorMittal and Severstal Sparrows Point initially reported data for the Sparrows Point facility before

the acquisition by Severstal in May 2008, therefore Staff has adjusted data to eliminate this double counting. Lone

(continued...)

III-4
2010 from their period lows in 2009. All but two firms (***) reported a decline in production in 2009,5

and all but two firms (***) reported increases in production in 2010. The largest increases and decreases

in production during the period for which data were collected involved the largest firms, in terms of both

capacity and production. *** represented the majority of the decline in production in 2007, and along

with ***, represented the majority of the production declines in 2008 and 2009. In addition, these ***

large producers also represented the majority of the increase in production in 2010.6

Table III-4

Hot-rolled steel: U.S. capacity, production, and capacity utilization, 2005-10

Item

Calendar year

2005 2006 2007 2008 2009 2010

Capacity (short tons) 81,533,511 82,208,701 82,201,768 81,842,235 78,225,675 79,679,215

Production (short tons) 62,859,112 65,890,974 61,878,281 56,497,372 39,635,900 54,913,361

Capacity utilization (percent) 77.1 80.2 75.3 69.0 50.7 68.9

Note.–***.

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

During the period for which data were collected, two firms, Severstal Columbus and

ThyssenKrupp Steel USA, began production in new hot-rolled steel mills. Severstal Columbus initiated

hot-rolled steel operations in the fourth quarter of 2007,7

 while ThyssenKrupp Steel USA’s hot-strip mill 

began production in July 2010.8

 The additional capacity of Severstal Columbus in 2008, however, was

offset by reductions in capacity by *** which reported declines in 2008 production capacity of *** short

tons and *** short tons, respectively.9

 These two firms, along with ***, comprised the majority of the

decline in domestic industry’s capacity in 2009.10

 4 (...continued)

Star, which U.S. Steel closed down soon after acquiring it in 2007, did not provide a questionnaire response in these

reviews. Therefore, Staff utilized data from its questionnaire responses in Hot-Rolled Steel Products from

Argentina, China, India, Indonesia, Kazakhstan, Netherlands, Romania, South Africa, Taiwan, Thailand, and

Ukraine, Inv. Nos. 701-TA-404-408 and 731-TA-898-903 and 905-908 (Review) and Certain Circular Welded

Carbon Quality Steel Line Pipe from China and Korea, Inv. Nos. 701-TA-455 and 731-TA-1149-1150 (Preliminary).

 5

 Many of these firms specifically noted that these declines were due to low demand, with several firms

attributing this to general economic conditions.

 6

 In 2010, ***, compared to 2009 levels.

 7 Severstal Reinforces Commitment to the US Steel Market as SeverCorr Begins Production, Severstal press

release, October 23, 2007, found at http://www.severstal.com/eng/media/news/document649.phtml, retrieved March

2, 2011.

 8 ThyssenKrupp, welcome, found at http://www.thyssenkruppsteelusa.com/, retrieved March 2, 2011.

 9

 ***.

 10 ***.

III-5
Figure III-1

Hot-rolled steel: U.S. producers’ capacity, production, and capacity utilization, 2005-10

Source: Table III-4.

Constraints on Capacity

The Commission asked domestic producers to report constraints on their capacity to produce hotrolled steel. Four domestic producers responded that they did not experience capacity constraints.11 The

remaining firms provided the information presented in table III-5 regarding their constraints on capacity. 

 11 The domestic producers that indicated that they had no constraints on capacity include ***.

III-6
Table III-5

Hot-rolled steel: U.S. producers' constraints on capacity

* * * * * * *

Alternative and Downstream Products

The Commission asked domestic producers to report production of other or downstream products

on the same equipment and machinery, and/or using the same production and related workers employed

to produce hot-rolled steel. Six companies (***) indicated that they produce other products on their

hot-rolled steel equipment and machinery. Twelve domestic producers (***) responded that they do not

produce other products on the same equipment and machinery used to make hot-rolled steel. 

Data on domestic producers’ capacity, production, and capacity utilization for alternative steel

products are presented in table III-6. The reported capacity, production, and capacity utilization for all six

categories of steel products fluctuated throughout the period for which data were collected with reported

capacity and production levels generally lower during 2010 than reported during 2005.12 ArcelorMittal

and Nucor reported production of slab casting, nonsubject hot-strip, cold-rolled steel, coated steel and

steel plate (cut from coils), while U.S. Steel reported production of slab casting, cold-rolled steel, coated

steel, steel plate (cut from coils), and tubular products. Gallatin was the only domestic producer which

reported producing only subject hot-rolled steel. In total, 13 firms reported production of slabs,13 6

reported production of nonsubject products on their hot-strip mill,14 15 13 reported production of coldrolled steel,16 12 reported production of coated steel,17 5 reported production of steel plate (cut from

coils),18 and 2 reported production of tubular products.19

 12 The exception to this was tubular products, which declined in 2009 but ended the review period with higher

levels of capacity and comparable levels of production relative to 2005.

 13 AK Steel, ArcelorMittal, NLMK Beta, North Star BlueScope, Nucor, Severstal Columbus, Severstal Dearborn,

Severstal Sparrows Point, Severstal Warren, Severstal Wheeling, SSAB Americas, Steel Dynamics, and U.S. Steel.

 14 ***.

 15 Over the period for which data were collected, hot-strip mill production of nonsubject product represented less

than *** percent of total hot-strip mill production in any given year for ***, but represented between approximately

*** percent for ***.

 16 AK Steel, ArcelorMittal, California Steel Industries, Duferco Farrell, Nucor, Severstal Columbus, Severstal

Dearborn, Severstal Sparrows Point, Severstal Warren, Severstal Wheeling, Steel Dynamics, ThyssenKrupp Steel

USA, and U.S. Steel.

 17 AK Steel, ArcelorMittal, California Steel Industries, Nucor, Severstal Columbus, Severstal Dearborn, Severstal

Sparrows Point, Severstal Warren, Severstal Wheeling, Steel Dynamics, ThyssenKrupp Steel USA, and U.S. Steel.

 18 ArcelorMittal, Evraz Oregon Steel Mills, Nucor, Severstal Wheeling, and U.S. Steel.

 19 California Steel Industries and U.S. Steel (in addition, former U.S. producer Lone Star also produced tubular

products).

III-7
Table III-6

Hot-rolled steel: U.S. producers' capacity, production, and capacity utilization for alternative and

downstream products, 2005-10

Item

Calendar year

2005 2006 2007 2008 2009 2010

Slab casting:1

Capacity (short tons) 76,156,484 77,349,484 77,436,656 78,659,731 75,560,246 76,546,646

Production (short tons) 64,665,962 65,449,390 63,078,022 59,699,230 41,184,543 56,678,953

Capacity utilization (percent) 84.9 84.6 81.5 75.9 54.5 74.0

Hot-strip mill:

Capacity (short tons) 84,906,281 85,880,181 85,954,093 86,602,581 83,299,375 83,046,045

Production (short tons)

Subject 62,859,112 65,890,974 61,878,281 56,497,372 39,635,900 54,913,361

Nonsubject2 2,997,633 3,372,483 4,429,742 4,132,895 2,374,945 3,914,657

Total 65,856,745 69,263,457 66,308,023 60,630,267 42,010,845 58,828,018

Capacity utilization (percent) 77.6 80.7 77.1 70.0 50.4 70.8

Cold-rolled steel:

Capacity (short tons) 45,413,675 45,540,144 46,263,787 44,952,740 40,651,647 40,225,915

Production (short tons) 34,453,506 34,888,537 31,582,218 28,499,383 21,705,106 27,327,288

Capacity utilization (percent) 75.9 76.6 68.3 63.4 53.4 67.9

Coated steel:

Capacity (short tons) 25,113,570 25,342,190 25,436,150 23,923,857 22,030,437 22,315,833

Production (short tons) 18,823,487 19,393,111 17,970,800 15,965,484 11,495,001 15,511,065

Capacity utilization (percent) 75.0 76.5 70.7 66.7 52.2 69.5

Steel plate (cut from coils):

Capacity (short tons) 1,870,000 1,920,000 1,980,000 1,858,000 1,775,042 1,785,042

Production (short tons) 850,551 1,004,361 1,046,111 917,826 446,123 625,514

Capacity utilization (percent) 45.5 52.3 52.8 49.4 25.1 35.0

Tubular products:

Capacity (short tons) *** *** *** *** *** ***

Production (short tons) *** *** *** *** *** ***

Capacity utilization (percent) *** *** *** *** *** ***

 1 Slab casting production for U.S. producer Lone Star, which was shut down in 2007, was not available and is not

included. 

 2

 Examples include hot-rolled alloy steel and discrete plate produced on a Steckel mill.

Note.–Because of rounding, figures may not add to the totals shown.

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

III-8
U.S. PRODUCERS’ SHIPMENTS

Data on U.S. producers’ shipments of hot-rolled steel are presented in table III-7.20 The quantity

of U.S. shipments increased between 2005 and 2006, declined in 2007 and 2008 and more sharply in

2009 before increasing in 2010, although U.S. shipments were still below 2005 levels. The value of U.S.

shipments was also lower at the end of the period compared with 2005, although to a lesser degree.21 As a

share of total shipments, commercial shipments increased between 2005 and 2007, declined in 2008 and

2009, then rose in 2010, and closed 2010 at a higher level than in 2005. Internal consumption followed

the opposite trend, ending below 2005 levels. Internal consumption was reported by thirteen firms.22

Both transfers to related firms and exports were less than 4 percent of total shipments throughout the

period examined.23 

Average unit values for all forms of shipments peaked in 2008 and, despite a sharp decline in

2009, closed 2010 higher than in 2005. Average unit values for export shipments were higher than the

unit values for U.S. commercial shipments in each year except in 2007, when export values were $7 per

short ton lower, and in 2009, when export values were $24 per short ton lower. 

Table III-7

Hot-rolled steel: U.S. producers’ shipments, by types, 2005-10

Item

Calendar year

2005 2006 2007 2008 2009 2010

Quantity (short tons)

Commercial shipments 23,418,285 25,214,571 24,204,952 22,306,071 13,692,198 20,809,160

Internal consumption 37,184,587 38,348,101 34,056,743 31,856,117 23,437,062 30,226,652

Transfers to related firms 1,388,668 1,620,358 2,063,739 1,849,607 999,328 1,958,838

U.S. shipments 61,991,540 65,183,030 60,325,434 56,011,795 38,128,588 52,994,650

Export shipments 1,084,187 756,886 1,462,893 1,353,996 1,155,035 1,653,241

Total shipments 63,075,727 65,939,916 61,788,327 57,365,791 39,283,623 54,647,891

Table continued on following page.

 20 *** reported production of downstream product cold-rolled steel, but did not reflect this in its hot-rolled

production or shipment data; accordingly Staff has adjusted *** data to incorporate this into production and internal

consumption of hot-rolled steel.

 21 The value of U.S. shipments fluctuated over the period, rising and falling in each subsequent year, although

falling more sharply in 2009 and rising more sharply in 2010.

 22 ***.

 23 Three firms reported no export shipments, ***. Of the others that reported exports, *** reported the highest

share of export shipments (***) to total shipments, with the remaining firms reporting less than 10 percent in any

given year. Of the 15 firms that reported exports, 12 reported Canada as a principal export market, 10 reported

Mexico, and 2 reported other markets in South America or Europe.

III-9
Table III-7--Continued

Hot-rolled steel: U.S. producers' shipments, by types, 2005-10

Item

Calendar year

2005 2006 2007 2008 2009 2010

Value (1,000 dollars)

Commercial shipments 12,631,398 14,324,743 13,372,670 17,558,950 7,210,186 12,618,918

Internal consumption 19,276,549 20,958,296 18,409,405 23,650,360 12,202,896 18,087,921

Transfers to related firms 747,327 913,738 1,157,194 1,505,363 545,201 1,180,809

U.S. shipments 32,655,274 36,196,777 32,939,269 42,714,673 19,958,283 31,887,648

Export shipments 595,336 451,987 796,552 1,144,536 581,216 1,004,170

Total shipments 33,250,610 36,648,764 33,735,821 43,859,209 20,539,499 32,891,818

Unit value (per short ton)

Commercial shipments $539 $568 $552 $787 $527 $606

Internal consumption 518 547 541 742 521 598

Transfers to related firms 538 564 561 814 546 603

U.S. shipments 527 555 546 763 523 602

Export shipments 549 597 545 845 503 607

Total shipments 527 556 546 765 523 602

Share of quantity (percent)

Commercial shipments 37.1 38.2 39.2 38.9 34.9 38.1

Internal consumption 59.0 58.2 55.1 55.5 59.7 55.3

Transfers to related firms 2.2 2.5 3.3 3.2 2.5 3.6

U.S. shipments 98.3 98.9 97.6 97.6 97.1 97.0

Export shipments 1.7 1.1 2.4 2.4 2.9 3.0

Total shipments 100.0 100.0 100.0 100.0 100.0 100.0

Note.–Because of rounding, figures may not add to the totals shown.

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

III-10
U.S. PRODUCERS’ INVENTORIES

As shown in table III-8 inventories fluctuated in absolute and relative terms between 2005 and

2010. U.S. producers’ inventories ended in 2010 lower than in 2005 in absolute terms, but were

comparable relative to production and shipments. The domestic industry's inventories of hot-rolled steel

peaked in 2007, then in 2008 declined sharply in absolute and relative terms, falling to period lows. 

Throughout the period for which data were collected, the *** largest firms, in terms of both capacity and

production, generally generated the largest increases and decreases in producer inventories. In addition to

these producers, *** had the second largest decline in inventories in 2008, which along with *** helped

offset the increases in inventories by the largest domestic producers and ***. In 2008, *** reported its

largest, and fourth largest industry decline, in inventories. Over one-half of the increase in inventories in

2010 were due to ***.

Table III-8

Hot-rolled steel: U.S. producers’ end-of-period inventories, 2005-10

Item

Calendar year

2005 2006 2007 2008 2009 2010

Inventories (short tons) 1,809,058 1,759,945 1,849,851 1,000,610 1,352,124 1,617,837

Ratio to production (percent) 2.9 2.7 3.0 1.8 3.4 2.9

Ratio to U.S. shipments (percent) 2.9 2.7 3.1 1.8 3.5 3.1

Ratio to total shipments (percent) 2.9 2.7 3.0 1.7 3.4 3.0

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

Steel inventories are held by numerous market participants, including producers, end users,

importers, and service centers.24 Steel service centers inventory and distribute steel for industrial

customers.25 Figure III-2 illustrates the trends in steel service center shipments and inventories that have

taken place over January 2005-March 2011.

 24 Public data on inventory holdings are available for those inventories held in storage or at service centers. 

According to the Metal Service Center Institute, in December 2010, more than 4.6 million tons of carbon flat-rolled

products, excluding plate, were held in inventory in the United States. This figure is approximately 25 percent lower

than the 2004 annual average inventory of 6.1 million tons in inventory. Compiled from data obtained from the

Metal Service Center Institute, Data on shipments and inventories of carbon flat-rolled products (excluding plate),

found at www.ssci.org/Reports.aspx, retrieved March 10, 2011.

 25 Today’s Metal Service Center Institute, Metals Service Center Institute, found at

http://www.ssci.org/Description.aspx, retrieved March 10, 2011. 

III-11
Figure III-2

Carbon steel flat-rolled product (excluding plate): Steel service center's shipments and 

inventories, January 2005-March 2011

Source: Compiled from Metal Service Center Institute data.

U.S. PRODUCERS’ IMPORTS AND PURCHASES

No domestic producer imported or purchased subject merchandise from importers. *** were the

only domestic producers that directly imported from nonsubject sources.26 Only one U.S. producer, ***,

purchased from importers hot-rolled steel (***) from nonsubject countries. In addition, four domestic

producers (***) reported purchases from other sources, believed to be U.S. distributors.27

 26 ***.

 27 These producers reported total purchases of *** short tons valued at $*** during 2005-10.

III-12
U.S. PRODUCERS’ EMPLOYMENT, WAGES, AND PRODUCTIVITY

The U.S. producers’ aggregate employment data for hot-rolled steel are presented in table III-9.28

The number of production and related workers (“PRWs”) employed by the domestic hot-rolled producers

declined between 2005 and 2010 by 2,075 or 8.7 percent.29 A substantial portion of the decline in PRWs

between 2005 and 2010 (particularly between 2008 and 2009) was attributed to producers with integrated

mills, even when taking into account that these firms accounted for a larger number of PRWs in the

domestic industry. ***, with a decline of *** PRWs, accounted for the largest overall decline in the

number of PRWs between 2005-10. Most of the decline was in ***. The next largest decline of PRWs

was by *** which had several operations idled or curtailed production, followed by ***, which idled its

mill between ***. In addition to these two firms, *** contributed to the decline in PRWs in 2009, the

year in which employment of PRWs barely topped 20,000.30 

Table III-9

Hot-rolled steel: U.S. producers’ employment-related data, 2005-10

Item

Calendar year

2005 2006 2007 2008 2009 2010

Production and related workers

(PRWs) 23,757 22,968 23,384 24,599 20,187 21,682

Hours worked by PRWs (1,000

hours) 55,396 52,337 51,768 51,573 38,130 47,358

Hours worked per PRW 2,332 2,279 2,214 2,097 1,889 2,184

Wages paid to PRWs (1,000

dollars) 1,580,898 1,627,286 1,688,018 1,743,741 1,209,585 1,540,481

Hourly wages $28.54 $31.09 $32.61 $33.81 $31.72 $32.53

Productivity (short tons produced

per 1,000 hours) 1,134.7 1,259.0 1,195.3 1,095.5 1,039.5 1,159.5

Unit labor costs (per short ton) $25.15 $24.70 $27.28 $30.86 $30.52 $28.05

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

 28 Both ArcelorMittal and Severstal Sparrows Point initially reported data for the Sparrows Point facility before

the acquisition by Severstal in May 2008, therefore Staff has adjusted data to eliminate this double counting. Lone

Star, which U.S. Steel closed down soon after acquiring it in 2007, did not provide a questionnaire response in these

reviews, therefore data was used from its response to a 2007 investigation on Hot-Rolled Steel.

 29 A witness for United Steelworkers of America, AFL-CIO/CLC reported that it agreed to the consolidation of

the steel industry involving major workforce reductions and changes in workplace rules to increase productivity. 

The witness further noted that during the 2008 downturn, in addition to the reductions in PRWs, VEBA fund

payments (which help provide healthcare, prescription drug benefits, supplemental Medicare for current and future

retirees) were deferred. Hearing transcript, pp. 72, 76, and 155 (Conway).

 30 ***.

III-13
 31 As noted in Part I of this report, the Severstal facilities in Columbus, MS, Dearborn, MI, Sparrows Point, MD,

Wheeling, WV, and Warren, OH, responded to the Commission’s questionnaire as individual producers. In the

relevant tables of this section of the report, the financial results of the above-referenced Severstal facilities are

presented separately. ***. USITC auditor prehearing notes. USITC auditor posthearing notes. 

 32 ***.

 33 These shares are generally consistent with the first reviews when commercial sales, internal consumption, and

transfers to related firms represented 58.6 percent, 37.8 percent, and 3.6 percent, respectively, of the cumulative

sales quantity for the period 1999-2004. Certain Hot-Rolled Flat-Rolled Carbon Quality Steel Products From

Brazil, Japan, and Russia, Invs. Nos. 701-TA-384 and 731-TA-806-808 (Review), USITC Publication 3767, April

2005, based on table III-15, p. III-18. 

 34 The Commission’s variance analysis is calculated in three parts: sales variance, cost of goods sold (“COGS”)

variance, and sales, general and administrative (“SG&A”) expenses variance. Each part consists of a price variance

(in the case of the sales variance) or a cost variance (in the case of the COGS and SG&A variances) and a volume

(quantity) variance. The sales or cost variance is calculated as the change in unit price/cost times the new volume,

while the volume variance is calculated as the change in volume times the old unit price/cost. Summarized at the

bottom of the respective tables, the price variance is from sales, the cost/expense variance is the sum of those items

from COGS and SG&A, respectively, and the net volume variance is the sum of the price, COGS, and SG&A

volume variances. All things being equal, a stable overall product mix generally enhances the utility of the

Commission’s variance analysis. 

III-14

FINANCIAL EXPERIENCE OF THE U.S. PRODUCERS

Background

The financial results of fifteen U.S. producers of hot-rolled steel are presented in this section of

the report.31 Financial results were primarily reported on the basis of U.S. generally accepted accounting

principles (“GAAP”).32 With the exception of North Star BlueScope and ThyssenKrupp Steel USA,

which reported on a fiscal-year basis ending May 31 and September 30, respectively, U.S. producers

reported their financial results on a calendar-year basis.

Internal consumption is the largest category of overall hot-rolled steel activity, representing 56.2

percent of the period’s cumulative sales quantity. The next largest category is commercial sales (40.8

percent of cumulative sales quantity), followed by a relatively small level of transfers to related firms (3.0

percent of cumulative sales quantity).33 As shown in the company-specific table presented in this section

of the report, the relative importance of these categories to each U.S. producer was not uniform. 

*** together accounted for *** percent of the period’s cumulative sales quantity. With respect to

U.S. producers with operations throughout the period, the remaining company-specific shares of

cumulative sales quantity ranged from *** to ***. 

Producers’ Operations on Hot-Rolled Steel 

Table III-10 presents the overall financial results of the U.S. industry’s operations on hot-rolled

steel. Corresponding financial information by producer for selected items is presented in table III-11. 

Table III-12 presents a variance analysis of the U.S. producer financial results.34 As reflected in these

tables, fair market values assigned to internal consumption and transfers to related firms are based on

commercial sales values adjusted for differences, if any, in the cost of hot-rolled steel consumed for

commercial sales and the cost of hot-rolled steel consumed for internal consumption/transfers to related

firms (“constructed fair market value”). Alternatively, appendix E presents the industry’s financial results

using the following valuation methodology for internal consumption and transfers to related firms: the
III-15

Table III-10

Hot-rolled steel: Results of U.S. producers’ operations (valuation of internal consumption and transfers to related

firms based on constructed fair market value), fiscal years 2005-10

Item

Fiscal year

2005 2006 2007 2008 2009 2010

Quantity (short tons)

Commercial sales 24,344,276 25,945,597 25,600,972 23,968,147 14,704,148 22,105,802

Internal consumption 35,472,139 36,895,220 32,643,468 30,858,858 22,940,450 29,481,432

Transfers to related firms 1,400,833 1,626,796 2,063,739 1,854,490 1,021,226 2,114,232

 Total net sales 61,217,248 64,467,613 60,308,179 56,681,495 38,665,824 53,701,466

Value ($1,000)

Commercial sales 13,287,725 14,632,834 14,186,400 18,421,332 8,097,837 13,413,463

Internal consumption 18,795,552 20,733,613 17,820,753 23,559,417 11,811,807 17,740,302

Transfers to related firms 754,888 917,812 1,156,494 1,512,029 558,106 1,286,681

 Total net sales 32,838,165 36,284,259 33,163,647 43,492,778 20,467,750 32,440,446

Raw material 16,121,273 17,514,992 17,630,112 24,011,346 13,779,544 20,345,940

Direct labor 2,526,317 2,534,368 2,421,692 2,507,339 2,047,414 2,392,885

Other factory costs 8,080,036 8,787,191 9,276,902 10,148,203 6,395,107 8,033,323

 Total cost of goods sold 26,727,626 28,836,551 29,328,706 36,666,888 22,222,065 30,772,148

Gross profit or (loss) 6,110,539 7,447,708 3,834,941 6,825,890 (1,754,315) 1,668,298

Selling expenses 33,221 32,806 25,842 29,151 22,379 28,037

General and administrative expenses 847,665 854,433 749,619 756,213 545,098 881,680

 Total SG&A expenses 880,886 887,239 775,461 785,364 567,477 909,717

Operating income or (loss) 5,229,653 6,560,469 3,059,480 6,040,526 (2,321,792) 758,581

Interest expense 302,305 348,672 521,261 482,487 516,328 490,125

Other expenses 14,373 62,123 7,722 484,762 46,876 70,467

CDSOA funds received 2,737 13,552 10,991 10,306 9,308 7,126

Other income items 36,838 49,727 63,570 20,902 30,342 132,023

Net income or (loss) 4,952,550 6,212,953 2,605,058 5,104,485 (2,845,346) 337,138

Depr. and amortization (incl. above) 825,666 893,528 874,768 846,992 978,079 1,046,666

Est. cash flow from operations 5,778,216 7,106,481 3,479,826 5,951,477 (1,867,267) 1,383,804

Ratio to net sales (percent)

Raw material 49.1 48.3 53.2 55.2 67.3 62.7

Direct labor 7.7 7.0 7.3 5.8 10.0 7.4

Other factory costs 24.6 24.2 28.0 23.3 31.2 24.8

 Total cost of goods sold 81.4 79.5 88.4 84.3 108.6 94.9

Gross profit or (loss) 18.6 20.5 11.6 15.7 (8.6) 5.1

 Total SG&A expenses 2.7 2.4 2.3 1.8 2.8 2.8

Operating income or (loss) 15.9 18.1 9.2 13.9 (11.3) 2.3

Net income or (loss) 15.1 17.1 7.9 11.7 (13.9) 1.0

Table continued on next page.
 35 Hot-Rolled Steel Products From Argentina, China, India, Indonesia, Kazakhstan, Romania, South Africa,

Taiwan, Thailand, and Ukraine, Invs. Nos. 701-TA-404-408 and 731-TA-898-902 and 904-908 (Review), USITC

Publication 3956, October 2007, pp. 40-41. 

 While most U.S. producers provided different valuations for internal consumption and transfers to related firms

as requested in the U.S producer questionnaire, several U.S. producers did not. In response to a staff question

regarding why it did not apply the valuation methodologies requested, ***. E-mail with attachment from *** to

USITC auditor, February 16, 2011. ***. 

III-16

Table III-10--Continued

Hot-rolled steel: Results of U.S. producers’ operations (valuation of internal consumption and transfers to related

firms based on constructed fair market value), fiscal years 2005-10

Item

Fiscal year

2005 2006 2007 2008 2009 2010

Unit value (dollars per short ton)

Commercial sales 546 564 554 769 551 607

Internal consumption 530 562 546 763 515 602

Transfers to related firms 539 564 560 815 547 609

 Total net sales 536 563 550 767 529 604

Raw material 263 272 292 424 356 379

Direct labor 41 39 40 44 53 45

Other factory costs 132 136 154 179 165 150

 Total cost of goods sold 437 447 486 647 575 573

Gross profit or (loss) 100 116 64 120 (45) 31

SG&A expenses 14 14 13 14 15 17

Operating income or (loss) 85 102 51 107 (60) 14

Number of companies reporting

Data 14 14 14 13 13 14

Operating losses 3 1 4 2 11 6

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

underlying cost of the hot-rolled steel plus the gross profit of downstream products as allocated based on

relative cost (“cost plus allocated gross profit of downstream products”).35

Table III-11

Hot-rolled steel: Selected financial information of U.S. producers’ operations (valuation of internal consumption

and transfers to related firms based on constructed fair market value), fiscal years, 2005-10

* * * * * * *
III-17

Table III-12

Hot-rolled steel: Variance analysis of the financial results of U.S. producers’ operations (valuation of internal

consumption and transfers to related firms based on constructed fair market value), fiscal years 2005-10

Item

Fiscal year

2005-10 2005-06 2006-07 2007-08 2008-09 2009-10

Total net sales:

 Price variance 3,633,898 1,702,533 (779,561) 12,323,455 (9,201,265) 4,013,580

 Volume variance (4,031,617) 1,743,561 (2,341,051) (1,994,324) (13,823,763) 7,959,116

 Total net sales variance (397,719) 3,446,094 (3,120,612) 10,329,131 (23,025,028) 11,972,696

Cost of goods sold:

Raw material:

 Cost variance (6,203,913) (537,751) (1,245,183) (7,441,436) 2,600,025 (1,208,065)

 Volume variance 1,979,246 (855,968) 1,130,063 1,060,202 7,631,777 (5,358,331)

 Net raw material variance (4,224,667) (1,393,719) (115,120) (6,381,234) 10,231,802 (6,566,396)

Direct labor:

 Cost variance (176,730) 126,085 (50,841) (231,278) (337,009) 450,689

 Volume variance 310,162 (134,136) 163,517 145,631 796,934 (796,160)

 Net direct labor variance 133,432 (8,051) 112,676 (85,647) 459,925 (345,471)

Other factory costs:

 Cost variance (945,292) (278,141) (1,056,658) (1,429,175) 527,587 848,594

 Volume variance 992,005 (429,014) 566,947 557,874 3,225,509 (2,486,810)

 Net other factory cost variance 46,713 (707,155) (489,711) (871,301) 3,753,096 (1,638,216)

Net cost of goods sold:

 Cost variance (7,325,934) (689,806) (2,352,682) (9,101,889) 2,790,603 91,218

 Volume variance 3,281,412 (1,419,119) 1,860,527 1,763,707 11,654,220 (8,641,301)

 Total net cost of goods sold (4,044,522) (2,108,925) (492,155) (7,338,182) 14,444,823 (8,550,083)

Gross profit variance (4,442,241) 1,337,169 (3,612,767) 2,990,949 (8,580,205) 3,422,613

SG&A expenses:

 Expense variance (136,979) 40,418 54,534 (56,536) (31,733) (121,570)

 Volume variance 108,148 (46,771) 57,244 46,633 249,620 (220,670)

 Total SG&A variance (28,831) (6,353) 111,778 (9,903) 217,887 (342,240)

Operating income variance (4,471,072) 1,330,816 (3,500,989) 2,981,046 (8,362,318) 3,080,373

Summarized as:

 Price variance 3,633,898 1,702,533 (779,561) 12,323,455 (9,201,265) 4,013,580

 Net cost/expense variance (7,462,913) (649,388) (2,298,148) (9,158,425) 2,758,870 (30,352)

 Net volume variance (642,056) 277,671 (423,280) (183,984) (1,919,923) (902,855)

Source: Compiled from data submitted in response to Commission questionnaires.
 36 AK Steel 2005 10-K, p. 17 (noting that “{t}he industry was particularly hard hit by the economic downturn that

continued until the end of 2003”). Certain Hot-Rolled Flat-Rolled Carbon Quality Steel Products From Brazil,

Japan, and Russia, Invs. Nos. 701-TA-384 and 731-TA-806-808 (Review), USITC Publication 3767, April 2005,

based on table III-15, p. III-18. 

 37 Letter from *** to USITC auditor, January 31, 2011. 

 With regard to average sales values in 2008 and 2009, U.S. Steel stated that it ***. Letter from *** to USITC

auditor, January 27, 2011.

 ArcelorMittal stated that ***. Letter from *** to USITC auditor January 27, 2011. 

 38 All things being equal, given the substantially larger declines in company-specific sales and production

quantity in 2009 compared to 2008, average direct labor and other factory costs would generally be expected to

reach their highest level in 2009 due to substantially reduced fixed cost absorption in that year. According to

(continued...)

III-18

Net Sales Quantity and Value

The beginning of the period reflects a continuation of stronger demand which began in 2004.36

As shown in table III-10, the industry’s total sales quantity reached its highest level in 2006 and then

subsequently declined with a notably sharp drop in 2009. Table III-11 shows that the majority of U.S.

producers reported lower sales quantity in 2009 compared to 2008. 

Notwithstanding declines in total sales quantity in 2007 and 2008, the value of the industry’s

revenue reached its highest absolute level in 2008 due to higher average sales value. Table III-11 shows

that all U.S. producers reported substantially higher average sales values in 2008 than in 2007. Likewise,

in 2008 U.S. producers collectively reported the period’s highest average raw material costs. In 2009,

this pattern was reversed with almost all U.S. producers reporting sharp declines in average sales values

which were only partially offset by corresponding declines in average raw material costs. U.S. producers

generally indicated that this pattern reflected extreme supply and demand conditions in 2009.37

With a few exceptions, as shown in table III-11, most U.S. producers reported somewhat higher

average sales values in 2010 compared to 2009.

Operating Costs and Expenses

Raw material costs represent the single largest component of overall COGS: 62.7 percent of total

COGS on a cumulative basis. As shown in table III-11, average raw material costs and direct laborand

other factory costs (i.e., conversion costs) vary from company to company and generally reflect

underlying differences in steel production; e.g., the average raw material costs reported by ***, an

integrated producer, are consistently lower than those of ***, a mini-mill producer, while its average

other factory costs are higher. This pattern is consistent with the lower relative cost of the more basic raw

materials consumed in integrated steel production and the corresponding higher cost to convert these raw

materials into steel. With respect to non-start-up operations, the highest average raw material costs were

reported by *** which do not have steel production and instead purchase steel in semi-finished slab form. 

While company-specific patterns of change in average raw material costs were not uniform throughout

the entire period, table III-11 shows that most U.S. producers reported sharp increases in average raw

material costs in 2008 compared to 2007 followed by declines in 2009.

After raw materials, the largest component of reported COGS is other factory costs, 29.1 percent

on a cumulative basis, followed by direct labor at 8.3 percent. Company-specific changes in average

direct labor and other factory costs were mixed during the period with some companies reporting their

highest average direct labor and other factory costs in 2008, while others reported the highest average

value for these items in 2009. As shown in table III-11, ***.38
 38(...continued)

ArcelorMittal, ***. Letter from *** to USITC auditor, January 27, 2011. 

 U.S. Steel reported ***. Letter from *** to USITC auditor, January 27, 2011 . 

 39 The notable increase in 2009 “Other income items” shown in table III-10 primarily reflects ***. Auditor

prehearing notes. 

 40 While changes in average sales value and average raw material cost generally tracked each other during the

period (i.e., the exception being 2007 when average sales value declined compared to 2006, while corresponding

average raw material costs increased), the year-to-year net change in average sales value and corresponding average

raw material cost alternated between positive and negative: positive $18 per short ton between 2005 and 2006,

negative $34 per short ton between 2006 and 2007, positive $86 per short ton between 2007 and 2008, negative $171

per short ton between 2008 and 2009, and positive $52 per short ton between 2009 and 2010. As indicated by these

net changes, the effective “metal margin” also fluctuated during the period and reached its highest level on an

average per short ton basis in 2008. Notwithstanding other factors which impacted profitability, the alternating

pattern of positive and negative net change in average sales value and raw material costs follows the same general

pattern of positive and negative operating income variance shown in table III-12. 

 41 Letter from *** to USITC auditor, February 18, 2011. 

 42 E-mail with attachment from *** to USITC auditor, February 16, 2011 .

 43 Auditor prehearing notes. ***. Ibid.

 44 Letter from *** to USITC auditor, January 18, 2011.

III-19

Non-Recurring Charges

A number of companies included non-recurring charges in COGS and SG&A expenses with ***

reporting notably large amounts in 2008 and 2009, respectively: ***.39

Profitability 

Table III-10 shows that the industry’s gross profit, on an absolute and relative basis, was at its

highest level in 2006. Notwithstanding variability in average direct labor and other factory costs, changes

in the industry’s gross profit margin primarily reflect the extent to which changes in average raw material

costs were or were not offset by corresponding changes in average sales value.40

As shown in table III-11 and with respect to the operating results of larger quantity producers,

***.41

Table III-11 also shows that, while *** were the *** companies to report operating income

throughout the period, ***.42

As noted in a previous section of this report, ThyssenKrupp Steel USA’s new mill in Calvert, AL

began operations in 2010. ***.43 Staff notes that under U.S. GAAP start-up costs are expensed

immediately and that ***.

Research and Development Expenses, Capital Expenditures, Assets, and Return on Investment

Table III-13 presents data on company-specific research and development (“R&D”) expenses,

capital expenditures, total assets, and return on investment. 

As shown in table III-13, *** were the only U.S. producers that reported R&D expenses. ***,

which accounted for *** of cumulative R&D expenses (*** percent), stated that the reported amounts

***.44
 45 Letter from *** to USITC auditor, January 27, 2011. 

 46 ***. E-mail from *** to USITC auditor, February 17, 2011.

 47 Letter from *** to USITC auditor, January 18, 2011.

III-20

Table III-13

Hot-rolled steel: Value of research and development expenses, capital expenditures, total assets, and return on

investment of U.S. producers, fiscal years 2005-10

Fiscal year

2005 2006 2007 2008 2009 2010

R&D expenses Value ($1,000)

* * * * * * *

Capital expenditures Value ($1,000)

* * * * * * *

 Total capital expenditures 957,002 816,414 1,864,978 1,506,657 1,546,009 2,369,384

Total assets Value ($1,000)

* * * * * * *

 Total assets 12,440,860 12,914,941 15,169,831 16,550,668 15,030,810 19,323,050

Return on investment Ratio to total assets (percent)

2

* * * * * * *

 Average ROI 42.0 50.8 20.0 37.0 (15.4) 3.9

 1

 ***

 2

 Return on investment, as presented in this table, is the ratio of annual operating income (loss) to total assets. ***. The operating

income (loss) used to calculate the return on investment in this table incorporates values for internal consumption and transfers to related

firms based on constructed fair market value.

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

Table III-13 shows that the industry’s total capital expenditures increased during the period

examined and reached their highest level in 2010. ***, which accounted for *** percent of cumulative 

capital expenditures, the *** company-specific share and just above the cumulative share accounted for

by ***, stated that it ***.45

The 2009 and 2010 capital expenditures reported by ThyssenKrupp Steel USA, representing ***

percent of cumulative capital expenditures, reflect the construction of the company’s new steel mill in

Calvert, AL.46 Similarly, Severstal’s capital expenditures (all facilities combined) increased notably in

2007 and 2008 due primarily to the construction of the company’s new mill in Columbus, MS. On an

overall basis, Severstal accounted for *** percent of the industry’s cumulative capital expenditures. 

According to Nucor, whose capital expenditures ***.47 Nucor accounted for *** percent of

cumulative capital expenditures.
PART IV: U.S. IMPORTS AND THE FOREIGN INDUSTRIES

U.S. IMPORTS

Overview

The Commission issued questionnaires to 93 firms believed to have imported hot-rolled steel

between 2005 and 2010. Thirty-seven firms provided data and information in response to the

questionnaires, while 28 firms indicated that they had not imported hot-rolled steel during the period for

which data were collected.1

 Based on official Commerce statistics for imports of hot-rolled steel,

importers’ questionnaire data accounted for 46.2 percent of total U.S. imports during 2005-10 and 72.8

percent of total subject-country imports during 2005-10. Firms responding to the Commission’s

questionnaire accounted for the following shares of U.S. imports of hot-rolled steel during the review

period:

• Virtually all of the subject imports from Brazil; 

• Virtually all of the subject imports from Japan;

• 71.4 percent of the subject imports from Russia; and

• 44.3 percent of hot-rolled steel imports from all other countries.

In light of the data coverage by the Commission’s questionnaires, import data in this report are

based on official Commerce statistics.2

 Imports of micro-alloy steel (overwhelmingly from nonsubject

countries) accounted for 2.6 percent of the total quantity of imports reported by all U.S. importers in their

questionnaire responses during 2005-10.3

One importer reported entering or withdrawing hot-rolled steel from foreign trade zones and one

importer did so from bonded warehouses.4

 No importers reported imports of hot-rolled steel under the

temporary importation under bond program. 

 1 One importer, ***, reported importing from Russia and other sources, but did not provide useable data. 

Questionnaires issued to six firms were returned as undeliverable because the company could not be located, and the

remaining firms did not provide a response.

 2

 Import data were based on the following HTS statistical reporting numbers: HTS 7208.10.1500, 7208.10.3000,

7208.10.6000, 7208.25.3000, 7208.25.6000, 7208.26.0030, 7208.26.0060, 7208.27.0030, 7208.27.0060,

7208.36.0030, 7208.36.0060, 7208.37.0030, 7208.37.0060, 7208.38.0015, 7208.38.0030, 7208.38.0090,

7208.39.0015, 7208.39.0030, 7208.39.0090, 7208.40.6030, 7208.40.6060, 7208.53.0000, 7208.54.0000,

7208.90.0000, 7211.14.0090, 7211.19.1500, 7211.19.2000, 7211.19.3000, 7211.19.4500, 7211.19.6000,

7211.19.7530, 7211.19.7560, and 7211.19.7590. Import data do not include the following HTS statistical reporting

numbers that cover primarily coated or other forms of nonsubject merchandise: 7210.70.3000, 7210.90.9000,

7211.14.0030, 7212.40.1000, 7212.40.5000, and 7212.50.0000. This approach is consistent with that used in the

most recent five-year review concerning hot-rolled steel. See Hot-Rolled Steel Products From Argentina, China,

India, Indonesia, Kazakhstan, Romania, South Africa, Taiwan, Thailand, and Ukraine, Investigation Nos.

701-TA-404-408 and 731-TA-898-902 and 904-908 (Review), USITC Publication 3956, October 2007, tables IV-1

and IV-2.

 3

 Two firms (***) imported micro-alloy steel from Japan, no firms imported micro-alloy steel from Brazil or

Russia, and two firms (***) imported micro-alloy steel from all other sources.

 4

 ***.

IV-1
Imports from Subject and Nonsubject Countries

Table IV-1 presents data for U.S. imports of hot-rolled steel from Brazil, Japan, Russia, and all

other sources. As shown in table IV-1, total subject imports were at their highest level in 2006 before

declining to their lowest level in 2009. Russia was the largest subject source throughout the period except

in 2009, when imports from Russia fell 97.8 percent (compared to 2008) to their lowest level.5

 Subject

imports from Brazil remained minimal during 2005-10, while subject imports from Japan increased from

2005 to 2008, declined by 41.9 percent in 2009, then recovered in 2010, with quantities approximately

three times higher than in 2005. Imports of hot-rolled steel from nonsubject countries fluctuated

throughout the period, ending 17.1 percent below 2005 levels.

Unit values of subject imports declined between 2005 and 2007, increased substantially in 2008

and 2009, then fell in 2010, ending above 2005 levels. Unit values of imports from subject and

nonsubject countries were relatively close, except in 2008 and particularly in 2009.6

 Unit values of

imports from Russia were generally the lowest among the imports from subject countries, except in 2008

and 2009. 

Table IV-1

Hot-rolled steel: U.S. imports, by sources, 2005-10

Source

Calendar year

2005 2006 2007 2008 2009 2010

Quantity (short tons)

Brazil 0 2,237 50 46 148 512

Japan 5,009 11,795 15,504 15,577 9,053 15,033

Russia 299,275 789,288 136,293 76,425 1,708 125,079

Subtotal 304,284 803,320 151,847 92,048 10,909 140,624

Other sources 3,564,545 5,639,254 3,196,799 3,532,867 2,263,178 2,955,493

Total 3,868,829 6,442,574 3,348,646 3,624,915 2,274,087 3,096,118

Value (1,000 dollars)

1

Brazil 0 1,856 37 48 128 402

Japan 3,911 8,549 10,263 13,666 10,897 14,636

Russia 169,124 411,375 69,061 72,989 1,751 69,708

Subtotal 173,035 421,780 79,361 86,703 12,776 84,745

Other sources 1,948,688 2,937,894 1,752,308 2,799,480 1,203,403 1,828,647

Total 2,121,722 3,359,674 1,831,669 2,886,183 1,216,179 1,913,392

Table continued on next page.

 5 Imports from Russia represented between 83.0 percent and 98.4 percent of subject imports, except in 2009 when

their share fell to 15.7 percent.

 6

 In 2009 unit values of subject imports were greater than twice that of imports from nonsubject countries.

IV-2
Table IV-1--Continued

Hot-rolled steel: U.S. imports, by sources, 2005-10

Source

Calendar year

2005 2006 2007 2008 2009 2010

Unit value (per unit)

Brazil (2

) $830 $733 $1,047 $863 $785

Japan $781 725 662 877 1,204 974

Russia 565 521 507 955 1,025 557

Subtotal 569 525 523 942 1,171 603

Other sources 547 521 548 792 532 619

Total 548 521 547 796 535 618

Share of quantity (percent)

Brazil 0.0 0.0 0.0 0.0 0.0 0.0

Japan 0.1 0.2 0.5 0.4 0.4 0.5

Russia 7.7 12.3 4.1 2.1 0.1 4.0

Subtotal 7.9 12.5 4.5 2.5 0.5 4.5

Other sources 92.1 87.5 95.5 97.5 99.5 95.5

Total 100.0 100.0 100.0 100.0 100.0 100.0

 1 Landed, duty-paid.

 2

 Not applicable.

Source: Compiled from official Commerce statistics.

Leading Nonsubject Sources of Imports

During the period for which data were collected, imports of hot-rolled steel entered the United

States from a variety of sources other than the three subject countries. The leading nonsubject suppliers

are shown in table IV-2. Nonsubject imports peaked early in the review period, reaching their highest

level in 2006. The leading nonsubject sources were Canada,7

 followed by Korea.8 These two countries

combined accounted for 34.4 - 61.4 percent of imports of hot-rolled steel from nonsubject sources during

2005-10.9

 7 According to proprietary Customs data, the largest importer of hot-rolled steel from Canada was ***,

accounting for approximately *** percent of total imports during 2005-10 (ranging from *** percent in 2005 to ***

percent in 2010). U.S. producers accounted for approximately *** percent of hot-rolled steel imported from Canada

during 2005-10 (ranging from low of *** percent in 2010 to high of *** percent in 2008).

 8

 *** accounted for approximately *** percent of total imports of hot-rolled steel from Korea during 2005-10

(ranging from low of *** percent in 2010 to a high of *** percent in 2005). The second largest importer of hotrolled steel from Korea was ***, accounting for approximately *** percent of total imports during 2005-10.

 9

 These two countries were also the leading nonsubject sources in 2010, accounting for 38.4 percent and 17.0

percent of total imports of hot-rolled steel from nonsubject sources, respectively.

IV-3
Table IV-2

Hot-rolled steel: U.S. imports from leading nonsubject sources, 2005-10

Source

Calendar year

2005 2006 2007 2008 2009 2010

Quantity (short tons)

Canada 940,655 984,396 1,360,056 1,453,932 915,370 1,136,367

Korea 670,553 955,873 601,905 708,485 457,911 503,676

Australia 281,618 479,082 394,399 580,415 234,665 456,586

Mexico 272,591 402,957 245,233 179,693 276,284 294,378

Netherlands 306,093 336,709 234,643 227,025 183,248 196,560

Germany 45,678 95,922 31,331 49,786 15,436 91,088

New Zealand 59,654 129,226 119,259 66,825 44,650 87,498

India 6,618 62,234 17,665 185 0 58,849

France 239,905 170,666 80,379 56,988 41,398 50,369

Finland 4,351 5,419 0 0 33,964 46,567

All other 736,830 2,016,771 111,930 209,533 60,252 33,557

Total 3,564,545 5,639,254 3,196,799 3,532,867 2,263,178 2,955,493

Value (1,000 dollars)

1

Canada 548,535 603,798 784,642 1,149,319 485,421 723,575

Korea 327,720 454,540 288,386 484,208 275,797 293,918

Australia 151,528 231,445 205,815 460,803 115,540 264,133

Mexico 141,769 226,267 131,536 138,748 128,700 181,595

Netherlands 153,606 176,248 127,467 157,925 86,662 117,127

Germany 29,512 58,846 18,710 36,980 8,665 60,869

New Zealand 36,551 71,054 67,876 50,613 21,322 53,409

India 4,951 32,418 10,464 291 0 43,973

France 143,011 101,858 50,031 43,206 22,907 31,150

Finland 2,376 2,981 0 0 29,689 34,432

All other 409,129 978,438 67,380 277,387 28,701 24,466

Total 1,948,688 2,937,894 1,752,308 2,799,480 1,203,403 1,828,647

Table continued on next page.

IV-4
Table IV-2--Continued

Hot-rolled steel: U.S. imports from leading nonsubject sources, 2005-10

Source

Calendar year

2005 2006 2007 2008 2009 2010

Unit value (per unit)

Canada $583 $613 $577 $790 $530 $637

Korea 489 476 479 683 602 584

Australia 538 483 522 794 492 578

Mexico 520 562 536 772 466 617

Netherlands 502 523 543 696 473 596

Germany 646 613 597 743 561 668

New Zealand 613 550 569 757 478 610

India 748 521 592 1,571 (2

) 747

France 596 597 622 758 553 618

Finland 546 550 (2

) (2) 874 739

All other 555 485 602 1,324 476 729

Average 547 521 548 792 532 619

 1 Landed, duty-paid.

 2

 Not applicable.

Source: Compiled from official Commerce statistics.

U.S. IMPORTERS’ IMPORTS SUBSEQUENT TO DECEMBER 31, 2010

The Commission requested importers to indicate whether they had imported or arranged for

importation of hot-rolled steel from subject countries for delivery after December 31, 2010. Data on the

actual and arranged imports for 2011 are presented in the following tabulation.

Source

2011

Jan.-Mar. Apr.-June July-Sept. After Sept. Total

Quantity (short tons)

Brazil 0 0 0 0 0

Japan *** *** *** *** ***

Russia *** *** *** *** ***

All other sources 19,304 8,761 0 0 28,065

IV-5
Commerce reported that actual and preliminary Customs import data (6-digit level) for

January-March 2011 were 51 short tons from Brazil, 1,919 short tons from Japan, and 8,553 short tons

from Russia. Commerce also reported that import licenses have been granted for hot-rolled steel in April

2011 of 187 short tons from Brazil, 873 short tons from Japan, and 18,364 short tons from Russia.10 11

U.S. IMPORTERS’ INVENTORIES

Table IV-3 presents data for end-of-period inventories of U.S. imports of hot-rolled steel from

Brazil, Japan, and Russia and all other sources held in the United States. Inventories of imports from

subject countries, after rising between 2005 and 2006, fluctuated throughout the remainder of period,

rising and falling in each successive period. Inventories of imports from Japan were largely accounted for

by ***. Inventories of imports from Russia during 2005-07 were mostly held by ***,12 while different

importers represented the majority of inventories in different years between 2008 and 2010. Inventories

of nonsubject imports fell from 2005 to their lowest levels in 2007, then increased to their highest levels

in 2008, before declining in 2009 and 2010. *** reported the majority of inventories of imports from

nonsubject counties during 2005-10.13 The increase in 2008 was largely attributed to *** which imported

*** in that year and reported *** quantities of shipments in 2008.

 10 US Department of Commerce, Import Administration, Steel Import Monitoring & Analysis System (SIMA),

found at http://ia.ita.doc.gov/steel/license/, retrieved on May 5, 2011.

 11 Russian producer *** reported that it ***. The firm reported U.S. sales of *** short tons during JanuaryMarch 2011. Email from ***, May 4, 2011. Russian producer ***, which ***. In addition, the firm stated that ***. 

Email from ***, May 3, 2011. Russian producer *** reported that ***. The firm reported U.S. sales of *** short

tons during January-March 2011. Email from ***, May 5, 2011.

 12 *** held lower quantities of inventories and represented a lower share of total inventories of imports from

Russia in 2008-10.

 13 These firms along with importers *** reported the vast majority of inventories of imports from nonsubject

countries.

IV-6
Table IV-3

Hot-rolled steel: U.S. importers’ end-of-period inventories of imports, by source, 2005-10

Item

Calendar year

2005 2006 2007 2008 2009 2010

Imports from Brazil:

Inventories (short tons) *** *** *** *** *** ***

Ratio to U.S. imports (percent) *** *** *** *** *** ***

Ratio to total shipments of imports 

(percent) *** *** *** *** *** ***

Imports from Japan:

Inventories (short tons) *** *** *** *** *** ***

Ratio to U.S. imports (percent) *** *** *** *** *** ***

Ratio to total shipments of imports 

(percent) *** *** *** *** *** ***

Imports from Russia:

Inventories (short tons) *** *** *** *** *** ***

Ratio to U.S. imports (percent) *** *** *** *** *** ***

Ratio to total shipments of imports 

(percent) *** *** *** *** *** ***

Subtotal:

Inventories (short tons) 10,381 20,596 9,595 31,423 5,317 12,870

Ratio to U.S. imports (percent) 5.5 3.7 8.7 33.7 14.7 11.1

Ratio to total shipments of imports 

(percent) 5.2 3.8 7.9 44.0 8.5 11.8

Imports from all other sources:

Inventories (short tons) 137,535 121,753 47,962 281,431 116,272 94,568

Ratio to U.S. imports (percent) 7.0 4.1 3.5 20.5 15.0 10.3

Ratio to total shipments of imports 

(percent) 7.2 4.2 3.5 25.5 12.6 10.2

Imports from all sources:

Inventories (short tons) 147,916 142,349 57,557 312,854 121,589 107,438

Ratio to U.S. imports (percent) 6.8 4.1 3.8 21.3 15.0 10.4

Ratio to total shipments of imports 

(percent) 7.0 4.2 3.8 26.6 12.3 10.4

1

 Not applicable.

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

IV-7
CUMULATION CONSIDERATIONS

In assessing whether subject imports are likely to compete with each other and with the domestic

like product with respect to cumulation, the Commission generally has considered the following four

factors: (1) the degree of fungibility, including specific customer requirements and other quality-related

questions; (2) presence of sales or offers to sell in the same geographic markets; (3) common channels of

distribution; and (4) simultaneous presence in the market. Channels of distribution and fungibility

(interchangeability) are discussed in Part II of this report. Additional information concerning geographic 

markets and simultaneous presence in the market is presented below. 

For the purposes of its original determinations and first five-year review determinations, the

Commission cumulated imports from Brazil, Japan, and Russia.14

Domestic interested parties contend that all of the statutory requirements for cumulation have

been met, and the similarities in the conditions of competition far outweigh any differences among the

countries that exist. Moreover, the domestic interested parties maintain that there are no propensities or

conditions that are likely to persist for reasonable foreseeable future that would significantly limit

competition.15

Brazilian respondents contend that subject imports from Brazil should not be cumulated with

imports from Japan and Russia since the volumes of imports from Brazil will have no discernable adverse

impact on the domestic industry.16 Moreover, the Brazilian respondents argue that several conditions of

competition unique to Brazil warrant separate consideration. Among these conditions are the historical

lack of export-orientation (particularly towards the United States), Brazilian producers’ focus on the

growing domestic Brazilian market, higher prices in Brazil than in the United States, and high capacity

utilization rates.17

Japanese respondents contend that the Commission should not cumulate imports from Japan with

imports from Brazil or Russia because the low levels of Japanese imports and relatively higher average

unit values of these imports are likely to have no discernable adverse impact on the domestic U.S.

industry.18 In addition, the Japanese respondents maintain that several conditions of competition 

distinguish Japanese circumstances from the other two subject countries, including the Japanese

producers’ long-term and consistent focus on home and Asian export markets, an export strategy focusing

on high-quality hot-rolled steel for use in the automotive industry and supply of substrate to Asian

producers of downstream products, the historical lack of interest in the U.S. market, and the

reconstruction efforts in Japan following the Tohoku earthquake and tsunami.19

Russian respondents did not offer direct arguments concerning cumulation.

 14 Certain Hot-Rolled Steel Products from Japan, Invs. Nos. 731-TA-807 (Final), USITC Publication 3202, June

1999, p. 9; Certain Hot-Rolled Steel Products from Brazil and Russia, Invs. Nos. 701-TA-384 (Final) and 731-TA806 and 808 (Final), USITC Publication 3223, August 1999, p. 3; and Certain Hot-Rolled Flat-Rolled

Carbon-Quality Steel Products From Brazil, Japan, and Russia, Invs. Nos. 701-TA-384 and 731-TA-806-808

(Review), USITC Publication 3767, April 2005, p. 23.

 15 ArcelorMittal USA’s prehearing brief, p. 7; Gallatin Steel, SSAB NAD, and Steel Dynamics’ prehearing brief,

p. 6; Nucor’s posthearing brief, p. 3; and U.S. Steel’s posthearing brief, p. 7.

 16 Hearing transcript, p. 302 (Stoel).

 17 CSN and USIMINAS’ posthearing brief, p. 1 and hearing transcript, pp. 220-221. The Brazilian respondents

also argue that the Commission should exclude Brazilian producer ArcelorMittal Brasil from its consideration of the

likely impact of Brazilian imports on the U.S. market. Ibid., p. 12 and hearing transcript, p. 267 (Stoel).

 18 Japanese producers’ posthearing brief, p. 2 and hearing transcript, pp. 301-302 (Wood).

 19 Japanese producers’ posthearing brief, pp. 3-4.

IV-8
Geographic Markets

As noted previously, hot-rolled steel produced in the United States is shipped nationwide. During

2005-10, the top Customs district for imports from Brazil was Philadelphia, PA, while for imports from

Japan it was Savannah, GA. The top two Customs districts for Russia were Houston-Galveston, TX, and

New Orleans, LA. Additional information on geographic markets may be found in Part II of this report. 

Presence in the Market

Table IV-4 presents data on the monthly entries of U.S. imports of hot-rolled steel, by source,

during 2005-10. Hot-rolled steel produced in each of the two larger subject countries (Japan and Russia)

was generally present in most months during 2005-10, with the exception of hot-rolled steel from Russia

in 2009 which was present in only one month of that year. Imports from the other subject country, Brazil,

were relatively more sporadic with no entries in 2005 and less than half the months in 2007-10. Imports

from all other sources combined were present throughout the period.

Table IV-4

Hot-rolled steel: U.S. imports, monthly entries into the United States, by sources, January 2005-

December 2010

Country

Calendar year

2005 2006 2007 2008 2009 2010

Brazil 0 8 4 2 3 4

Japan 12 12 12 12 12 12

Russia 10 11 9 9 1 12

All others 12 12 12 12 12 12

Source: Compiled from official statistics of Commerce.

THE INDUSTRY IN BRAZIL

Overview

Three firms, accounting for virtually all Brazilian production of hot-rolled steel in 1998, provided

data in response to the Commission’s questionnaire in the original investigations: COSIPA, CSN, and

USIMINAS.20 In the first reviews, COSIPA, CSN, and USIMINAS provided data on their Brazilian

operations, as did CST.21 Although created in 1976 as a joint venture between Kawasaki of Japan and

Ilva of Italy, CST did not begin operations until 1983 and did not bring its hot-strip mill online until

2002.22 Finally, three companies provided data in response to Commission questionnaires in the current

reviews: ArcelorMittal Brasil (formerly CST), CSN, and USIMINAS, which fully integrated COSIPA in

 20 Staff Report, INV-W-113 (May 27, 1999), p. VII-2. A fourth Brazilian firm, Acesita, stated that it had not

exported hot-rolled steel to the United States between 1996 and 1998. Ibid.

 21 Staff Report, INV-CC-040 (March 29, 2005), p. IV-11. A fifth Brazilian firm, Mangels Industria e Comercio

Ltda., stated that it had not produced or exported hot-rolled steel since January 1, 1999. Ibid.

 22 ArcelorMittal, History, found at http://www.cst.com.br/english/company/profile/history/history.asp, retrieved

on March 2, 2011. 

IV-9
2010.23 These firms are believed to account for virtually all current Brazilian production of hot-rolled

steel.24 Presented in table IV-5 is a list of the responding Brazilian producers of hot-rolled steel and each

company’s primary mill location(s), related and/or affiliated U.S. hot-rolled steel producer, and share of

reported Brazilian production of hot-rolled steel in 2010. Brazilian producer ArcelorMittal Brasil is

related to U.S. producer ArcelorMittal USA, which accounted for *** percent of reported U.S. production

in 2010 as well as Gallatin, which accounted for *** percent of U.S. production in 2010.25

Table IV-5

Hot-rolled steel: Brazilian producers’ primary mill locations, U.S. producer affiliation, and share of

2010 reported Brazilian production

Producer name Primary mill location(s) U.S. producer affiliation Share of production (percent)

ArcelorMittal Brasil Tubarao

ArcelorMittal USA

Gallatin ***

CSN Volta Redonda None ***

USIMINAS Cubatao, Ipatinga None ***

Source: Compiled from data submitted in response to Commission questionnaires and Metal Bulletin Ltd., Iron & Steel

Works of the World, 18th edition.

Hot-Rolled Steel Operations

Table IV-6 presents responding Brazilian producers ArcelorMittal Brasil, CSN, and USIMINAS 

production, capacity, and capacity utilization data during calendar years 2005-10. *** reported having a

business plan or any internal documents that describe, discuss, or analyze expected future market

conditions for hot-rolled steel. As discussed in greater detail below, *** provided a multi-year marketing

analysis for hot-rolled steel. 

Table IV-6

Hot-rolled steel: Brazilian producers' production, capacity, and capacity utilization, 2005-10

* * * * * * *

Production of Hot-Rolled Steel in Brazil

The combined capacity to produce hot-rolled steel in Brazil increased moderately between 2005

and 2008. In 2009, capacity dropped below 14 million short tons for the only time during the period for

 23 CSN owns 9.45 percent of USIMINAS and is reported to be increasing its stake to 10 percent, which would

give it the right to a seat on the company’s board. CSN getting closer to 10% stake in Usiminas, Metal Bulletin,

April 20, 2011, found at

http://www.metalbulletin.com/Article/2810590/CSN-getting-closer-to-10-stake-in-Usiminas.html.

 24 Staff compared the Brazilian producers that responded to the Commission’s questionnaires to those producers

identified by the steel analysts at ***. See ***. According to this comparison, the three responding Brazilian

producers accounted for 100 percent of hot strip rolling capacity in Brazil in 2010.

 25 Brazilian hot-rolled steel producer CSN owns CSN, LLC, a cold rolling and hot-dip galvanizing operation

located in Terre Haute, IN. In certain years, CSN, LLC imported slab from *** for ***. During 2005-10 CSN

imported *** short tons from *** and produced *** short tons of cold-rolled steel. Thus, slab imports from ***

were equivalent to *** percent of cold-rolled steel produced by CSN, LLC during 2005-10. Email from Craig

Lewis, counsel to CSN and CSN, LLC, April 29, 2011, May 4, 2011, and May 5, 2011.

IV-10
which data were collected, reflecting ***.26 However, capacity rose above 15 million short tons in 2010,

as *** and ArcelorMittal Brasil began ramping up expanded hot strip mill capacity at its Tubarão

facility.27 Actual production was far more variable, rising between 2006 and 2007 to peak at more than

14 million short tons, declining in both 2008 and 2009, and then recovering in 2010 to above 14 million

short tons, just short of the previous peak production level in 2007. Brazilian producers’ capacity

utilization reflected the general growth in capacity and fluctuating production, exceeding 90 percent in

every year except 2006 and 2009.

Brazilian producer USIMINAS is finalizing the installation of a new *** hot strip mill at its

Cubatão facility, approximately *** of which is reported be ***.28 Installation is expected to be complete

in *** and capacity is expected to ramp up during the *** time frame. Production is expected by

USIMINAS to support ***, *** ahead of the 2014 World Cup and 2016 Olympics, and ***. USIMINAS

also is *** at its Ipatinga facility. In 2009, Vale announced an agreement with a Brazilian firm, Aço

Cearense, to build a future joint-venture hot-rolling mill with a capacity of 750,000 metric tons of

flat-rolled steel. In October 2010, Vale announced that it had been granted an installation license for its

slab mill to be built in Brazil's northern Para state and that the output of that mill would feed the planned

joint venture rolling mill, as well as the California Steel Industries joint venture in the United States in

which Vale owns a 50 percent interest.29 Finally, new entrants Gerdau Açominas and Companhia

Siderurgica Suape are expected to bring 800,000 and *** metric ton facilities online beginning in 2012

(ramping up through 2015) and 2014 (ramping up through ***), respectively.30 

Shipments of Hot-Rolled Steel Produced in Brazil

Brazilian producers’ shipments of hot-rolled steel generally mirrored production trends, but

exhibited a less pronounced recovery in 2010 when inventories rose. The Brazilian home market was the

primary destination for these shipments, with shares increasing over the period from 88 percent in 2005 to

93 percent in 2010. The increasing level of shipments within Brazil initially reflected growing

commercial shipments, at least between 2005 and 2008; more recently, both commercial shipments and

internal consumption decreased sharply in 2009 and rebounded in 2010. Brazilian producers’ exports of

hot-rolled steel, in contrast, declined both absolutely and relative to total shipments between 2005 and

2010, with declines in shipments to the European Union, Asia, and all other markets (primarily Latin

America). Exports of each of the reporting firms all declined in 2007 and 2008, the two years with the

largest declines, then exports by each firm rebounded in 2009. *** accounted for the largest share of total

exports in every year except 2005 (roughly *** the next largest exporter in most years). Brazilian

producers’ exports of hot-rolled steel to the United States during this period were minor; indeed, in ***

out of the six years for which data were collected, no Brazilian producer reported exporting hot-rolled

 26 Email from ***, April 29, 2011.

 27 The Tubarão hot strip mill has a rated capacity of *** metric tons, an increase from *** metric tons. 

ArcelorMittal Brasil reports that the new capacity will be fully online in *** and will ***. See also *** (confirming

that ArcelorMittal Brasil is in the process of ***). 

 28 Brazilian producers posthearing brief, app. 1, p. 4, and hearing transcript, pp. 290-291 (Dunn).

 29 Metal Bulletin, Vale's planned Alpa mill to source semifinished to CSI, June 21, 2010, and ILAFA: Vale gets

installation licence for 2.5 million tpy slab mill in northern Brazil, October 26, 2010.

 30 See ***. See also

Gerdau Açominas, Brazil, invests in new plate and Steckel mills, found at

http://www.steel-grips.com/newsdesk/americas/Gerdau_A_ominas_Brazil_invests_in_new_plate_and_Steckel_mills

.html, retrieved on March 9, 2011.

IV-11
steel to the United States. In addition to the United States, imports of hot-rolled steel from Brazil are

subject to antidumping duties in Canada.

*** provided a multi-year sales plan reflecting its expectation that its domestic merchant market

shipments will experience *** percent average annual growth during 2012-15, in line with its expectation

that the Brazilian market will increase ***, thus permitting *** to *** its home market share. Growth is

expected to *** in 2015, ahead of the 2016 summer Olympic games in Brazil. *** projects a *** percent

average decline in export shipments during the 2012-15 timeframe.

Table IV-7 presents the responding Brazilian producers’ hot-rolled steel operations in Brazil

during calendar years 2005-10.

Table IV-7

Hot-rolled steel: Brazilian producers’ capacity, production, shipments, and inventories, 2005-10

Item

Calendar year

2005 2006 2007 2008 2009 2010

Quantity (short tons)

Capacity 14,585,769 15,037,865 15,039,993 14,883,374 13,841,291 15,834,506

Production 13,592,807 13,467,297 14,810,515 13,453,151 11,810,642 14,364,521

End of period inventories 580,892 443,515 499,189 436,347 453,794 1,137,943

Shipments:

 Internal consumption *** *** *** *** *** ***

 Commercial home market

 shipments *** *** *** *** *** ***

 Exports:

 United States *** *** *** *** *** ***

 European Union *** *** *** *** *** ***

 Asia *** *** *** *** *** ***

 All other markets *** *** *** *** *** ***

 Total exports 1,624,172 1,542,905 979,203 519,182 1,278,197 1,002,685

 Total shipments 13,456,511 13,604,674 14,754,840 13,515,993 11,793,194 13,680,372

Value ($1,000)

Commercial shipments:

 Home market *** *** *** *** *** ***

 Exports to--

 United States *** *** *** *** *** ***

 European Union *** *** *** *** *** ***

 Asia *** *** *** *** *** ***

 All other markets *** *** *** *** *** ***

 Total exports 1,179,065 956,813 607,528 455,384 677,985 526,114

 Total shipments 5,079,604 4,561,866 5,764,683 7,352,128 4,983,891 6,658,818

Table continued on next page.

IV-12
Table IV-7--Continued

Hot-rolled steel: Brazilian producers’ capacity, production, shipments, and inventories, 2005-10

Item

Calendar year

2005 2006 2007 2008 2009 2010

Average unit value (dollars per short ton)

Commercial shipments:

 Home market $*** $*** $*** $*** $*** $***

 Exports to--

 United States *** *** *** *** *** ***

 European Union *** *** *** *** *** ***

 Asia *** *** *** *** *** ***

 All other markets *** *** *** *** *** ***

 Total exports 726 620 620 877 531 525

 Total shipments 920 785 904 1,215 964 1,109

Ratios and shares (percent)

Capacity utilization 93 89.6 98.5 90.4 85.3 90.7

Inventories to production 4.3 3.3 3.4 3.2 3.8 7.9

Inventories to total shipments 4.3 3.3 3.4 3.2 3.8 8.3

Share of total quantity of:

 Internal consumption *** *** *** *** *** ***

 Home market *** *** *** *** *** ***

Exports to–

 United States *** *** *** *** *** ***

 European Union *** *** *** *** *** ***

 Asia *** *** *** *** *** ***

 All other markets *** *** *** *** *** ***

 Total exports 12.1 11.3 6.6 3.8 10.8 7.3

 1 Not applicable.

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

Alternative and Downstream Products

As shown in table IV-8, the three responding Brazilian producers typically reported producing

less than *** short tons of products such as cut-to-length plate or alloy hot-rolled steel on the same

equipment used to produce subject merchandise, although this figure surpassed *** short tons in 2008. 

Brazilian producers generally reported producing approximately 7 million short tons of cold-rolled steel,

of which approximately *** short tons was coated, although both of these figures were depressed in 2009. 

Brazilian producers also reported the production from hot-rolled steel of plate cut from coils, but in

substantially smaller volumes. In each year between 2005 and 2010, Brazilian producers’ capacity

IV-13
utilization for their downstream operations was lower than the capacity utilization of their hot-strip mills,

except in 2009, when capacity utilization for *** operations matched or surpassed capacity utilization for

the Brazilian hot-strip mills.

Table IV-8

Hot-rolled steel: Brazilian producers’ capacity, production, and capacity utilization for alternative

and downstream products, 2005-10

Item

Calendar year

2005 2006 2007 2008 2009 2010

Slab casting:

Capacity (short tons) *** *** *** *** *** ***

Production (short tons) *** *** *** *** *** ***

Capacity utilization (percent) *** *** *** *** *** ***

Hot strip mill:1

Capacity (short tons) 14,660,788 15,100,788 15,128,125 15,001,580 13,902,328 15,931,015

Production (short tons)

Subject 13,592,689 13,466,840 14,810,911 13,453,196 11,811,139 14,364,717

Nonsubject2 *** *** *** *** *** ***

Total *** *** *** *** *** ***

Capacity utilization (percent) *** *** *** *** *** ***

Cold-rolled steel:

Capacity (short tons) 8,049,454 8,272,860 8,260,532 8,081,009 7,424,681 7,709,339

Production (short tons) 7,112,795 7,194,599 7,573,178 6,741,302 6,230,128 6,735,726

Capacity utilization (percent) 88.4 87.0 91.7 83.4 83.9 86.9

Coated steel:

Capacity (short tons) *** *** *** *** *** ***

Production (short tons) *** *** *** *** *** ***

Capacity utilization (percent) *** *** *** *** *** ***

Steel plate (cut from coils):

Capacity (short tons) *** *** *** *** *** ***

Production (short tons) *** *** *** *** *** ***

Capacity utilization (percent) *** *** *** *** *** ***

Tubular products:

Capacity (short tons) 000000

Production (short tons) 000000

Capacity utilization (percent) (3

) (3) (3) (3) (3) (3)

Table continued on next page.

IV-14
Table IV-8--Continued

Hot-rolled steel: Brazilian producers’ capacity, production, and capacity utilization for alternative

and downstream products, 2005-10

 1 Because of minor reporting discrepancies, figures may not match data reported in table IV-7.

 2

 Examples include hot-rolled alloy steel and discrete plate produced on a Steckel mill.

 3

 Not applicable.

Note.–Because of rounding, figures may not add to the totals shown.

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

THE INDUSTRY IN JAPAN

Overview

Six firms, accounting for an estimated 90 percent of Japanese production of hot-rolled steel in

1998, provided data in response to the Commission’s questionnaire in the original investigations: 

Kawasaki, Kobe, Nippon, Nisshin, NKK, and Sumitomo.31 In the first reviews, only JFE Steel Corp.

(formed from the merger of Kawasaki and NKK in 2002) provided data on its Japanese operations.32

Finally, five companies provided data in response to Commission questionnaires in the current reviews: 

JFE, Kobe, Nippon, Nisshin, and Sumitomo.33 These firms are believed to account for a substantial

portion of current Japanese production of hot-rolled steel.34 Presented in table IV-9 is a list of the

responding Japanese producers of hot-rolled steel and each company’s primary mill location(s), related

and/or affiliated U.S. hot-rolled steel producer, and share of reported Japanese production of hot-rolled

steel in 2010.35 

 31 Staff Report, INV-W-113 (May 27, 1999), p. VII-4. 

 32 Staff Report, INV-CC-040 (March 29, 2005), p. IV-17. One Japanese company, Takasago Tekko, K.K., stated

that it had not produced or exported hot-rolled steel since January 1, 1999. Ibid.

 33 According to a statement released on February 3, 2011, Nippon and Sumitomo “jointly announced that they

have agreed to commence consideration of the integration of their entire businesses (the “Business Integration”),

targeted for October 1, 2012.” See “Commencement of Consideration of Business Integration of Nippon Steel

Corporation and Sumitomo Metal Industries, Ltd.” 

 34 Staff compared the Japanese producers that responded to the Commission’s questionnaires to those producers

identified by the steel analysts at ***. See ***. According to this comparison, the five responding Japanese

producers accounted for *** percent of hot strip rolling capacity in Japan in 2010. The remaining Japanese capacity

is attributed by *** to Tokyo Steel. There are other steel producers in Japan including Nakayama Steel Works,

Nippon Yakin Kogyo, Nippon Metal Industry, and Daido Steel. While there is limited available data on these

companies regarding their production of hot-rolled steel, the first firm operates a mini-mill and the latter three are

producers of stainless steel and all firms are believed to produce relatively small volumes, if any, of subject hotrolled steel. Metal Bulletin Ltd., Iron & Steel Works of the World, 18th edition.

 35 In addition, Japanese producer Nippon is a partner with ArcelorMittal in two U.S.-based joint ventures: 

ArcelorMittal Tek (40 percent interest), a continuous cold rolling mill located in New Carlisle, IN, and ArcelorMittal

Kote (50 percent interest), a galvanizing plant adjacent to ArcelorMittal Tek, with both hot-dip and electrolytic

galvanizing lines.

IV-15
Table IV-9

Hot-rolled steel: Japanese producers’ primary mill locations, U.S. producer affiliation, and share

of 2010 reported Japanese production

Producer name

Primary mill

location(s)

U.S. producer

affiliation

Share of production

(percent)

JFE

Chiba, Keihin,

Kurashiki, Fukuyama CSI ***

Kobe Kakogawa None ***

Nippon

Yawata, Hirohata,

Nagoya, Kimitsu, Oita None ***

Nisshin Kure None ***

Sumitomo Kashima, Wakayama None ***

Source: Compiled from data submitted in response to Commission questionnaires, and Metal Bulletin Ltd., Iron &

Steel Works of the World, 16th and 18th editions.

Hot-Rolled Steel Operations

Table IV-10 presents responding Japanese producers JFE, Kobe, Nippon, Nisshin, and Sumitomo

production, capacity, and capacity utilization data during calendar years 2005-10. *** reported having a

business plan or any internal documents that describe, discuss, or analyze expected future market

conditions for hot-rolled steel. As discussed in greater detail below, *** provided planning documents

that addressed hot-rolled steel and related operations. 

Table IV-10

Hot-rolled steel: Japanese producers’ production, capacity, and capacity utilization, 2005-10

* * * * * * *

Staff notes that these documents and other supply and demand forecasts do not take into account

the impact of the Tohoku Pacific earthquake and tsunami of March 11, 2011. This occurrence is a

tragedy on many levels. Focusing on hot-rolled steel, however, the effects are not entirely clear. Short

term disruptions reportedly have been largely a result of power outages or restrictions, rather than

substantial structural damage to key facilities, many of which have already resumed at least some 

production.36 37 The Kashima Works of Sumitomo Metal Industries, which produces heavy plate as well

as hot-rolled steel and a variety of downstream products, was the most heavily damaged of the Japanese

mills. On May 2, Sumitomo announced that it expected to achieve overall normal operation at Kashima

 36 Nippon noted that Japanese steel mills are energy self-sufficient, and that while one plant was damaged it was

expected to return to normal operations in the near future, and that it had not had a significant impact on the supply

side. Hearing transcript, p. 269 (Aoyama).

 37 Both Japanese respondents and domestic producers contend that the overall direct effect on hot-rolled steel

industry in Japan is expected to be limited. Japanese respondents’ posthearing brief, app. p. 15, ArecelorMittal’s

posthearing brief, exh. 1, p. 37, Nucor’s posthearing brief, p. 2, and U.S. Steel’s posthearing brief, p. 15.

IV-16
by the end of May.38 However, longer term questions remain regarding the nature of demand, such as a

potential surge in construction demand counterbalanced by possible reductions in the Japanese

automotive sector as well as potential negative effect on the overall Japanese economy. Some analysts

suggest that the Japanese steel industry, defined broadly, has sufficient capacity to meet Japan’s

anticipated reconstruction needs and will not require imports, except perhaps in the near term. However,

damage to port facilities as well as other transportation infrastructure may impact Japanese steel trade

generally, including downstream products, as well as raw material availability.39

Production of Hot-Rolled Steel in Japan

The combined capacity to produce hot-rolled steel in Japan increased between 2005 and 2010,

rising from less than 56 million short tons in 2005 to a period peak of more than 59 million short tons in

2010. Capacity declined only between 2005 and 2006, when ***.40 Production increased between 2005

and 2007 to peak at more than 55 million short tons, before declining in both 2008 and 2009, and then

recovering in 2010 to almost 54 million short tons, just short of the previous peak production level in

2007. Japanese producers’ capacity utilization reflected the growing capacity and fluctuating production,

exceeding 90 percent in 2005, 2006, and 2007 (when it reached nearly 98 percent), then dropping below

90 percent for the first time in the period in 2008. Japanese producers’ capacity utilization dipped to 70

percent in 2009, but recovered to surpass 90 percent in 2010.

None of the responding Japanese producers reported any anticipated changes in their hot-rolled

steel operations, a position that is consistent with analysis by ***. However, Tokyo Steel, a smaller

producer with limited downstream operations that did not respond to the Commission’s questionnaires,

reportedly commissioned a new hot-rolled steel facility in Tahara in 2010.41 

Shipments of Hot-Rolled Steel Produced in Japan

Japanese producers’ shipments of hot-rolled steel closely tracked production trends throughout

the period for which data were collected. Internal consumption by the Japanese producers themselves

consistently accounted for the largest share of shipments, and was relatively stable at approximately 60

percent of overall shipments. Commercial sales in the Japanese home market accounted for just over ***

percent of total shipments in 2005, but decreased markedly in 2009 and remained depressed in 2010, both

absolutely and as a share of total shipments. Japanese producers’ exports of hot-rolled steel, in contrast,

exhibited year-on-year volume growth in each year of the period examined except 2008, and increased as

a share of total shipments from less than *** percent in 2005 to nearly *** percent in 2010. Japanese

producers’ exports of hot-rolled steel to the United States and the European Union during this period were

relatively minor, while exports to Asia approached *** percent of total shipments by 2009 and 2010. 

Key markets for Japanese hot-rolled steel in Asia include Korea, China, Thailand, and, increasingly,

 38 SMI expects normal ops at Kashima by end-May, Metal Bulletin, May 3, 2011.

 39 See, e.g., “Japan Steelmakers Resume Shipments But Output Seen Curtailed” by Alex MacDonald, Dow Jones

Newswires, March 15, 2011, found at http://online.wsj.com/article/BT-CO-20110315-711682.html, retrieved on

March 17, 2011; see also “Japan steel capacity can feed massive reconstruction,” by Manolo Serapio Jr. and Yuko

Inoue, Reuters, March 16, 2011, found at http://in.reuters.com/article/2011/03/16/idINIndia-55625220110316,

retrieved on March 17, 2011.

 40 ***.

 41 The Tahara hot strip mill is believed to increase Tokyo Steel’s hot-rolled steel capacity by *** metric tons, or

approximately *** short tons. See ***.

IV-17
Vietnam.42 Hot-rolled steel from Japan (other than that used for vehicles, electronics, or electrogalvanizing operations) is subject to an antidumping duty order in Thailand. Hot-rolled steel from Japan

is also the subject of an ongoing antidumping duty investigation in Pakistan.

Looking ahead, JFE’s 2010 business report (included in its questionnaire but available from

JFE’s website) stresses growth in Asian markets generally but no significant growth in the Japanese

market. JFE emphasizes R&D-intensive “Only One” and “Number One” products as well as expanding

relationships in China and India. *** projects increasing foreign demand but decreasing domestic

demand. ***, like JFE, emphasizes high-end products; it also aims to ***. *** also sees future growth in

Asian markets other than Japan, and seeks to capitalize on its existing technology strengths and to expand

into developing markets through its own global sales network and through alliance partnerships.43 44

Japanese producer *** reported joint ventures with downstream processors of hot-rolled steel

throughout Asia with ownership interest ranging from *** percent to *** percent, and *** reported joint

ventures with ownership interest ranging from *** percent to *** percent. *** reported share ownership

of downstream processors of hot-rolled steel throughout Asia with ownership interest ranging from ***

percent to *** percent. In addition, *** reported supply memoranda of understanding (“MOU”) with

downstream processors of hot-rolled steel throughout Asia.45

Table IV-11 presents the responding Japanese producers’ hot-rolled steel operations in Japan

during calendar years 2005-10. 

 42 See, e.g., questionnaire responses of *** (stressing in particular its commercial relationships with ***) and ***

(listing ongoing and prospective partnerships with downstream producers in ***).

 43 See questionnaire responses of ***, ***, and ***.

 44 In addition, Nippon and Sumitomo identified the following objectives for their anticipated merger: “The

Companies would, through the Business Integration, accelerate their global strategies and realize a level of

competitiveness which is globally outstanding in all aspects, including technology, quality, and cost, by combining

their respective resources that each has built up, and generate synergies through consolidation of the superiority area

in their respective businesses. By implementing these measures, the Companies, in the midst of drastic changes to

the overall business environment, aim to become a truly world-leading comprehensive steel manufacturer. In

addition, through the Business Integration, the Companies aim to better respond to the needs of customers both in

Japan and overseas and desire to contribute to further development of the Japanese and global economy and

improvement of global society.” See “Commencement of Consideration of Business Integration of Nippon Steel

Corporation and Sumitomo Metal Industries, Ltd.”

 45 Japanese respondents' posthearing brief, app. p. 1 and exh. 3. Japanese producers note that the ***. The

Japanese producers emphasize the importance of long-term relationships with their customers and contend that these

agreements are a part of these relationships. Email from J. Christopher Wood, counsel to Japanese producers, April

27, 2011 and hearing transcript, p. 240 (Wood).

IV-18
Table IV-11

Hot-rolled steel: Japanese producers' capacity, production, shipments, and inventories, 2005-10

Item

Calendar year

2005 2006 2007 2008 2009 2010

Quantity (short tons)

Capacity 55,567,044 54,820,273 56,347,341 56,947,882 57,638,211 59,163,638

Production 51,774,147 52,965,027 55,086,464 50,404,075 40,335,191 53,994,048

End of period inventories 1,056,482 1,242,511 1,262,984 945,694 1,016,686 1,394,754

Shipments:

 Internal consumption 31,722,159 32,731,947 34,088,119 29,811,425 24,158,056 32,310,389

 Commercial home market

 shipments *** *** *** *** *** ***

 Exports:

 United States *** *** *** *** *** ***

 European Union *** *** *** *** *** ***

 Asia *** *** *** *** *** ***

 All other markets *** *** *** *** *** ***

 Total exports *** *** *** *** *** ***

 Total shipments 51,060,407 52,779,098 55,066,091 50,721,465 40,264,199 53,616,980

Value ($1,000)

Commercial shipments:

 Home market *** *** *** *** *** ***

 Exports to--

 United States *** *** *** *** *** ***

 European Union *** *** *** *** *** ***

 Asia *** *** *** *** *** ***

 All other markets *** *** *** *** *** ***

 Total exports *** *** *** *** *** ***

 Total shipments 9,065,255 9,098,654 9,947,757 14,656,514 8,845,272 13,662,871

Table continued on next page.

IV-19
Table IV-11--Continued

Hot-rolled steel: Japanese producers' capacity, production, shipments, and inventories, 2005-10

Item

Calendar year

2005 2006 2007 2008 2009 2010

Average unit value (dollars per short ton)

Commercial shipments:

 Home market $*** $*** $*** $*** $*** $***

 Exports to--

 United States *** *** *** *** *** ***

 European Union *** *** *** *** *** ***

 Asia *** *** *** *** *** ***

 All other markets *** *** *** *** *** ***

 Total exports *** *** *** *** *** ***

 Total shipments 469 454 474 701 549 641

Ratios and shares (percent)

Capacity utilization 93.2 96.6 97.8 88.5 70.0 91.3

Inventories to production 2.0 2.3 2.3 1.9 2.5 2.6

Inventories to total shipments 2.1 2.4 2.3 1.9 2.5 2.6

Share of total quantity of:

 Internal consumption 62.1 62.0 61.9 58.8 60.0 60.3

 Home market *** *** *** *** *** ***

Exports to--

 United States *** *** *** *** *** ***

 European Union *** *** *** *** *** ***

 Asia *** *** *** *** *** ***

 All other markets *** *** *** *** *** ***

 Total exports *** *** *** *** *** ***

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

Alternative and Downstream Products

As shown in table IV-12, the five responding Japanese producers typically reported producing 2.3

million to 2.6 million short tons of products such as cut-to-length plate or alloy hot-rolled steel on the

same equipment used to produce subject merchandise, although this figure dropped below 1.8 million

short tons in 2009. Japanese producers generally reported producing 27 to 29 million short tons of coldIV-20
rolled steel, of which 16 to 18 million short tons generally was coated.46 Japanese producers also reported

the production from hot-rolled steel of tubular products and plate cut from coils, but in substantially

smaller volumes. In each year between 2005 and 2010, Japanese producers’ capacity utilization for their

downstream operations was lower than the capacity utilization of their hot-strip mills.

Table IV-12

Hot-rolled steel: Japanese producers’ capacity, production, and capacity utilization for alternative

and downstream products, 2005-10

Item

Calendar year

2005 2006 2007 2008 2009 2010

Slab casting:

Capacity (short tons) 87,039,939 88,263,746 89,197,766 90,758,947 90,483,380 94,875,835

Production (short tons) 79,475,357 82,014,516 85,240,137 84,919,617 66,262,730 83,483,455

Capacity utilization (percent) 91.3 92.9 95.6 93.6 73.2 88.0

Hot strip mill:1

Capacity (short tons) 58,046,904 57,362,379 59,012,998 59,607,971 60,119,932 61,853,686

Production (short tons)

Subject 51,761,147 52,952,027 55,060,464 50,376,075 40,321,191 53,969,048

Nonsubject2 2,273,674 2,317,323 2,566,340 2,466,044 1,768,640 2,531,386

Total 54,034,821 55,269,350 57,626,804 52,842,119 42,089,831 56,500,434

Capacity utilization (percent) 93.1 96.4 97.7 88.6 70.0 91.3

Cold-rolled steel:

Capacity (short tons) 33,008,287 33,676,893 33,796,707 34,110,260 33,551,451 33,252,473

Production (short tons) 27,474,662 27,644,868 29,001,552 28,772,599 19,952,423 27,822,948

Capacity utilization (percent) 83.2 82.1 85.8 84.4 59.5 83.7

Coated steel:

Capacity (short tons) 18,650,157 19,621,096 19,963,535 19,802,818 19,332,141 19,248,101

Production (short tons) 16,192,717 16,796,295 18,146,443 17,042,054 12,420,446 16,245,978

Capacity utilization (percent) 86.8 85.6 90.9 86.1 64.2 84.4

Steel plate (cut from coils):

Capacity (short tons) *** *** *** *** *** ***

Production (short tons) *** *** *** *** *** ***

Capacity utilization (percent) *** *** *** *** *** ***

Table continued on next page.

 46 The exception to this was 2009, in which Japanese producers produced approximately *** percent less coldrolled steel and coated steel than in other years during 2005-10.

IV-21
Table IV-12–Continued

Hot-rolled steel: Japanese producers’ capacity, production, and capacity utilization for

alternative and downstream products, 2005-10

Item

Calendar year

2005 2006 2007 2008 2009 2010

Tubular products:

Capacity (short tons) *** *** *** *** *** ***

Production (short tons) *** *** *** *** *** ***

Capacity utilization (percent) *** *** *** *** *** ***

 1 Because of minor reporting discrepancies, figures may not match data reported in table IV-11.

 2

 Examples include hot-rolled alloy steel and discrete plate produced on a Steckel mill.

Note.–Because of rounding, figures may not add to the totals shown.

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

THE INDUSTRY IN RUSSIA

Overview

Three firms, accounting for an estimated *** percent of Russian production of hot-rolled steel in

1998, provided data in response to the Commission’s questionnaire in the original investigations: 

Magnitogorsk Iron and Steel Works (MMK), Novolipetsk Iron and Steel Corp. (NLMK), and JSC

Severstal.47 In the first reviews, MMK, NLMK, and Severstal again provided data on their Russian

operations.48 Finally, these same three companies, MMK, NLMK, and Severstal, provided data in

response to Commission questionnaires in the current reviews. These firms are believed to account for

virtually all current Russian production of hot-rolled steel.49 Presented in table IV-13 is a list of the

responding Russian producers of hot-rolled steel and each company’s primary mill location(s), related

and/or affiliated U.S. producer, and share of reported Russian production of hot-rolled steel in 2010.

 47 Staff Report, INV-W-113 (May 27, 1999), p. VII-6.

 48 Staff Report, INV-CC-040 (March 29, 2005), p. IV-26. 

 49 Staff compared the Russian producers that responded to the Commission’s questionnaires to those producers

identified by the steel analysts at ***. See ***. According to this comparison, the three responding Russian

producers accounted for *** percent of hot strip rolling capacity in Russia in 2010. The remaining Russian capacity

is attributed by *** to Urals Steel and to OMK Steel. There are other steel producers in Russia, including Mechel

Steel Group. While there is limited available data on these companies regarding their production of hot-rolled steel,

these firms are believed to produce relatively small volumes, if any, of subject hot-rolled steel. 

IV-22
Table IV-13

Hot-rolled steel: Russian producers’ primary mill locations, U.S. producer affiliation, and share of

2010 reported Russian production

Producer name Primary mill location(s) U.S. producer affiliation

Share of production

(percent)

MMK Magnitogorsk None ***

NLMK Lipetsk

NLMK Beta, Duferco

Farrell ***

Severstal Cherepovets

Severstal Dearborn,

Severstal Columbus ***

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

Hot-Rolled Steel Operations

Table IV-14 presents responding Russian producers MMK, NLMK, and Severstal production,

capacity, and capacity utilization data during calendar years 2005-10. *** reported having a business

plan or any internal documents that describe, discuss, or analyze expected future market conditions for

hot-rolled steel. As discussed in greater detail below, *** provided internal research and externallygenerated documents used to analyze export markets for hot-rolled steel.

Table IV-14

Hot-rolled steel: Russian producers’ production, capacity, and capacity utilization, 2005-10

* * * * * * *

Production of Hot-Rolled Steel in Russia

The combined capacity to produce hot-rolled steel in Russia increased between 2005 and 2009,

when it topped 24 million short tons. In 2010, capacity dropped below 23.3 million short tons, the

second-lowest level during the period for which data were collected, reflecting reductions by ***. 

Production peaked much earlier in the period, surpassing 21 million short tons in 2006 and again in 2007,

before falling below 20 million short tons in 2008 and 2009. In 2010, Russian production exceeded 20

million short tons but did not recover to 2005 levels, largely as a result of a decline in production levels

by ***. Russian capacity utilization in 2010 was below 90 percent - comparable to capacity utilization in

2005 and substantially higher than levels during 2008-09, but below the peak capacity utilization rates

exceeded 92 percent recorded in 2006-07.

*** anticipates increasing hot-rolled steel capacity by *** short tons by 2012, although less than

*** of that increase is expected to be available for commercial shipments.50 Additional expansions

reportedly were completed by OMK Steel, which did not complete a questionnaire, in 2010 (***), while

OAO Tulachermet is expected to bring *** of new hot-rolled steel capacity online in ***.51

 50 Questionnaire response of ***.

 51 See ***.

IV-23
Shipments of Hot-Rolled Steel Produced in Russia

Russian producers’ shipments of hot-rolled steel generally mirrored production trends, peaking in

2006-07 at over 21 million short tons, falling below 20 million short tons in 2008-09, and ending the

period for which data were collected above 20 million short tons, but still below initial 2005 levels. The

Russian home market was the primary destination for these shipments, as growth in internal consumption

and especially open market shipments during 2005-07, combined with a marked decline in exports,

particularly in 2008, drove the home market share of total Russian shipments above 75 percent by 2008. 

This trend reversed sharply in 2009, however, as strong export growth offset marked declines in

commercial and non-commercial home market shipments.52 While this burst of exports was not

maintained in 2010, exports continued to account for approximately 30 percent of total Russian

shipments, a ratio similar to that in 2005, the beginning of the period for which data were collected.

Russian export shipments were directed to a variety of markets during the period for which data

were collected. The most stable export market for Russian hot-rolled steel was the European Union,

which consistently accounted for approximately *** percent of total Russian shipments. The United

States accounted for substantially less than *** percent of total Russian shipments of hot-rolled steel

during 2007-10, but accounted for nearly *** percent in 2006. Shipments to Asian markets shifted

markedly over the period for which data were collected, ranging from less than *** percent of total

shipments (in ***) to more than *** percent (in ***). Other markets (including Belarus, Turkey, Iran,

Morocco, Ukraine, Egypt, and Nigeria), however, proved to be a large and growing share of total Russian

shipments, in aggregate accounting for approximately *** percent of total Russian shipments of hotrolled steel by 2009-10. Exports of hot-rolled steel (including stainless steel and other alloy steel) from

Russia face a quantitative restriction in the European Union of approximately 1.1 million metric tons of

flat products in coils (although this restriction will expire if Russia joins the WTO)53 as well as

antidumping duty orders in Argentina, Indonesia, Thailand, Peru, and Mexico.

***’s analysis of regional markets describes a more promising demand environment for Russia

and China than for Europe or the United States. In terms of supply, *** emphasizes the low cost position

of Russian producers (benefitting exports) and contrasts it with higher production costs in both Europe

and China (although noting official efforts in China to close inefficient capacity). *** highlights its own

investments in crude and finished steel capacity as well as efforts to expand its vertical integration in

energy and raw materials and increase production efficiency. Table IV-15 presents the responding

Russian producers’ hot-rolled steel operations in Russia during calendar years 2005-10.

 52 Throughout 2005-10, internal consumption typically accounted for over one-half of total shipments.

 53 Official Journal of the European Union, L 300/52, November 17, 2007, found at

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:300:0052:0070:EN:PDF, retrieved on March 16,

2011.

IV-24
Table IV-15

Hot-rolled steel: Russian producers' capacity, production, shipments, and inventories, 2005-10

Item

Calendar year

2005 2006 2007 2008 2009 2010

Quantity (short tons)

Capacity 23,605,139 23,342,574 23,097,313 23,705,139 24,151,764 23,267,100

Production 20,900,987 21,563,337 21,377,055 19,345,701 19,468,894 20,299,268

End of period inventories *** *** *** *** *** ***

Shipments:

 Internal consumption 10,900,288 11,676,376 11,377,496 10,481,810 9,130,985 10,259,191

 Commercial home market

 shipments 3,405,456 4,114,571 4,447,631 4,174,191 3,051,629 3,879,231

 Exports:

 United States *** *** *** *** *** ***

 European Union *** *** *** *** *** ***

 Asia *** *** *** *** *** ***

 All other markets *** *** *** *** *** ***

 Total exports 6,567,144 5,794,144 5,547,632 4,710,338 7,282,670 6,124,399

 Total shipments 20,872,888 21,585,090 21,372,759 19,366,338 19,465,284 20,262,821

Value ($1,000)

Commercial shipments:

 Home market 1,594,737 1,985,914 2,332,496 3,171,430 1,242,907 2,046,343

 Exports to--

 United States *** *** *** *** *** ***

 European Union *** *** *** *** *** ***

 Asia *** *** *** *** *** ***

 All other markets *** *** *** *** *** ***

 Total exports 2,403,092 2,190,349 2,607,622 3,007,542 2,551,809 2,828,259

 Total shipments 3,997,829 4,176,263 4,940,118 6,178,972 3,794,716 4,874,602

Table continued on next page.

IV-25
Table IV-15--Continued

Hot-rolled steel: Russian producers' capacity, production, shipments, and inventories, 2005-10

Item

Calendar year

2005 2006 2007 2008 2009 2010

Average unit value (dollars per short ton)

Commercial shipments:

 Home market 468 483 524 760 407 528

 Exports to--

 United States *** *** *** *** *** ***

 European Union *** *** *** *** *** ***

 Asia *** *** *** *** *** ***

 All other markets *** *** *** *** *** ***

 Total exports 366 378 470 638 350 462

 Total shipments 401 421 494 695 367 487

Ratios and shares (percent)

Capacity utilization 88.5 92.4 92.6 81.6 80.6 87.2

Inventories to production *** *** *** *** *** ***

Inventories to total shipments *** *** *** *** *** ***

Share of total quantity of:

 Internal consumption 52.2 54.1 53.2 54.1 46.9 50.6

 Home market 16.3 19.1 20.8 21.6 15.7 19.1

Exports to--

 United States *** *** *** *** *** ***

 European Union *** *** *** *** *** ***

 Asia *** *** *** *** *** ***

 All other markets *** *** *** *** *** ***

 Total exports 31.5 26.8 26.0 24.3 37.4 30.2

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

IV-26
Alternative and Downstream Products

As shown in table IV-16, the three responding Russian producers reported a general decline in the

production of products such as cut-to-length plate or alloy hot-rolled steel on the same equipment used to

produce subject merchandise, with volume dropping from nearly *** short tons in 2005 to below ***

short tons in 2009, before partially recovering above *** short tons in 2010. Cold-rolled steel production,

in contrast, reached approximately 8.7 million short tons in 2006-07 and was generally near or above the

8-million-ton mark throughout the period for which data were collected, with approximately 2.5 million

to 3.5 million short tons further processed into coated steel. Russian producers also reported variable

levels of production from hot-rolled steel of tubular products and plate cut from coils, with the latter

nearly reaching 3.8 million short tons in 2008. In each year between 2005 and 2010, Russian producers’

capacity utilization for their downstream operations was lower than the capacity utilization of their hot

strip mills.

Table IV-16

Hot-rolled steel: Russian producers’ capacity, production, and capacity utilization for alternative

and downstream products, 2005-10

Item

Calendar year

2005 2006 2007 2008 2009 2010

Slab casting:

Capacity (short tons) 33,830,171 35,291,021 34,743,866 34,627,795 33,361,547 35,285,190

Production (short tons) 32,313,205 34,209,544 35,566,505 32,891,027 29,321,610 33,736,022

Capacity utilization (percent) 95.5 96.9 102.4 95.0 87.9 95.6

Hot strip mill:

Capacity (short tons) 23,802,874 23,498,495 23,167,905 23,725,963 24,170,409 23,295,099

Production (short tons)

Subject 20,900,945 21,563,308 21,377,027 19,345,691 19,468,870 20,299,240

Nonsubject1 *** *** *** *** *** ***

Total *** *** *** *** *** ***

Capacity utilization (percent) *** *** *** *** *** ***

Cold-rolled steel:

Capacity (short tons) 9,204,198 9,565,806 9,444,730 9,832,827 9,816,904 9,606,941

Production (short tons) 7,986,974 8,701,975 8,652,925 8,149,387 7,346,213 8,166,458

Capacity utilization (percent) 86.8 91.0 91.6 82.9 74.8 85.0

Coated steel:

Capacity (short tons) 2,950,962 3,554,818 3,718,464 3,931,438 4,298,440 4,542,503

Production (short tons) 2,437,703 2,962,194 3,369,156 3,204,175 3,040,888 3,482,398

Capacity utilization (percent) 82.6 83.3 90.6 81.5 70.7 76.7

Table continued on next page.

IV-27
Table IV-16–Continued

Hot-rolled steel: Russian producers’ capacity, production, and capacity utilization for alternative

and downstream products, 2005-10

Item

Calendar year

2005 2006 2007 2008 2009 2010

Steel plate (cut from coils):

Capacity (short tons) 3,607,096 3,453,458 3,948,629 4,575,034 3,828,117 4,093,352

Production (short tons) 2,446,288 2,910,128 3,653,587 3,786,721 2,374,548 3,081,148

Capacity utilization (percent) 67.8 84.3 92.5 82.8 62.0 75.3

Tubular products:

Capacity (short tons) *** *** *** *** *** ***

Production (short tons) *** *** *** *** *** ***

Capacity utilization (percent) *** *** *** *** *** ***

 1 Examples include hot-rolled alloy steel and discrete plate produced on a Steckel mill.

Note.–Because of rounding, figures may not add to the totals shown.

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

THE GLOBAL MARKET

Production and Capacity

Worldwide hot-rolled steel capacity is concentrated in four regions (from greatest to smallest): 

China, Europe, Asia (except China), and North America. Table IV-17 presents rated capacities of hotrolled steel facilities, by region (in 1,000 short tons).

Table IV-17

Hot-rolled steel: Global and regional production capacity for hot strip rolling, 2010, and planned

changes in capacity, 2011–12

* * * * * * *

Global production of hot-rolled steel has grown considerably in recent years, primarily due to

production in China. According to one published source, global production increased by approximately

*** percent during 1999–2004, and by *** percent during 2005–10.54 Despite a decline in production in

2008 and 2009 corresponding to the economic decline in those years, production increased in 2010,

reaching an all-time record level, driven by growth in Asia–primarily in China. Data compiled by *** on

historical, current, and projected global production of hot-rolled steel are presented in tables IV-18

through IV-20.

 54 ***. Production data compiled by *** are for ***. Global production levels in 1999 were just beginning to

recover from the lower levels achieved in 1998, a year in which absolute production volumes declined globally as

well as in nearly every major producing region. See ***. 

IV-28
Table IV-18

Hot-rolled steel: Global and regional production of hot-rolled steel, 1999-2004

* * * * * * *

Table IV-19

Hot-rolled steel: Global and regional production of hot-rolled steel, 2005-10

* * * * * * *

Table IV-20

Hot-rolled steel: Forecast of global and regional production of hot-rolled steel, 2011-15

* * * * * * *

Consumption

Data compiled by *** on historical, current, and forecasted global consumption of hot-rolled steel

are presented in tables IV-21 through IV-23.55 Consumption increased by *** percent during 1999S2004,

with most of the increase in East and Southeast Asia, primarily in China.56 During 2005-10, consumption

increased by another *** percent, despite a setback in consumption during the economic recession of

2008-09. Again, growth in Southeast Asia, including China, was primarily responsible for the increase. 

Global consumption is forecasted to continue to increase during 2011-15, with growth in all regions and

the greatest consumption increase in China. 

Table IV-21

Hot-rolled steel: Global, regional, and individual country consumption of hot-rolled sheet,

1999-2004

* * * * * * *

Table IV-22

Hot-rolled steel: Global, regional, and individual country consumption of hot-rolled sheet, 2005-10

* * * * * * *

 55 ***.

 56 Global consumption levels in 1999 were beginning to recover from the lower levels in 1998, a year that saw

substantial declines in consumption in Asia, Russia and other regional markets, and to a lesser extent Latin America,

but not in North America. See ***. This is consistent with the sequence of events known as the “Asian financial

crisis.” The initial crisis spread from Thailand in mid-1997 through Asia, and then more broadly, including Russia

and Brazil by 1998. According to Commerce, reduced Asian steel demand, declining Asian currency values, and

increased U.S. steel demand contributed to an increase in U.S. steel imports. See Global Steel Trade: Structural

Problems and Future Solutions, International Trade Administration, U.S. Department of Commerce, July 2000, pp.

17-29.

IV-29
Table IV-23

Hot-rolled steel: Forecast of global, regional, and individual country consumption of hot-rolled

sheet, 2011-15

* * * * * * *

U.S. producers, importers, purchasers, and foreign producers were asked if demand for hot-rolled

steel outside the United States had changed since 2005. Eight producers reported that demand had

fluctuated outside the United States. Three noted increases in demand in developing countries (two

referenced China specifically), and one noted declining demand in Europe. Twelve of 25 responding

importers and 11 of 21 responding purchasers also described demand outside the United States as having

fluctuated since 2005. The reason that was most frequently offered for this pattern is the same as with

U.S. demand - the global recession. In addition, one producer, nine importers, and nine purchasers

described demand outside the United States as having increased since 2005. Developing countries

(specifically China and India, or Asia in general) were most often described as the regions where demand 

for hot-rolled steel was growing. Four importers and one purchaser described demand outside the United

States as having decreased since 2005. The reasons offered included: the global recession, decreasing

demand in the EU and Canada, and high steel prices. 

Foreign producers were asked about changes in demand in their home markets since 2005. One

Brazilian producer each noted increasing, decreasing, and unchanging demand. All Japanese producers

reported fluctuating demand in Japan for hot-rolled steel since 2005. Two Russian producers reported

decreasing demand in Russia, and one reported fluctuating demand in Russia. One foreign producer

(***) reported ***.

Regarding third-country markets, 8 of 11 foreign producers noted increasing demand, while one

each noted fluctuating, decreasing, and unchanging demand. Trends described by foreign producers

include increasing Chinese and other Asian demand, particularly for hot-rolled steel for automobiles,57

and demand fluctuating with global economic conditions. 

*** reported that, according to World Steel Dynamics, world apparent steel consumption is

estimated to be 1.41 billion tons in 2010, 1.48 billion tons in 2011, and 1.55 billion tons in 2012. It

predicts that the apparent world steel consumption excluding China will rise by 6 percent in 2011, and in

2012 recover to the 2007 pre-crisis level.

When asked about anticipated future changes in hot-rolled steel demand outside the United

States, 4 producers, 16 importers, and 15 purchasers reported that they anticipate increasing demand. 

Seven producers, 8 importers, and 8 purchasers anticipate fluctuating demand, while no firm anticipates

decreasing demand.58 A number of responses indicated that general economic trends in developing

countries such as Brazil, Russia, India, and China would be the reason why demand would fluctuate or

increase. Growth in infrastructure and manufacturing (e.g., automotive and appliance industries) was

noted as specific reasons where developing country growth would occur. Purchaser *** anticipates

increasing demand due to manufacturing relocating to outside U.S. borders. 

Foreign producers were asked about anticipated changes in demand in their home markets. All

three Brazilian producers anticipate increasing demand in their home market. ***. 

Two of the five responding Japanese producers reported anticipating fluctuating demand in Japan,

and one each anticipates increasing, decreasing, and unchanging demand for hot-rolled steel When

 57 *** stated that Japanese steel manufacturers were somewhat less impacted by the global recession due to

growth in Japanese automotive plants which relocated to other Asian countries. 

 58 One producer, three importers, and two purchasers anticipate no change in demand outside the United States.

IV-30
describing the home market, Japanese producers anticipate demand will be “stable,” “limited,” “gradually

increase,” or experience “not ... high growth.” 

All three Russian producers reported anticipating increasing demand in Russia. *** stated that

*** has reported that “Russian consumption will increase by *** percent per year.” *** submitted the

metals consultancy GFMS’s forecast that hot-rolled steel demand in Russia would be 4.3 million metric

tons in 2011, surpassing the level of 2005, and 4.64 million metric tons in 2012. *** stated that it

“expects Russian HR steel demand to reach the 2007 peak by 2013.” It anticipates increasing demand

due to the “active development of Russian automotive industry, increasing hot-rolled steel demand from

the domestic railroads and shipbuilding industries, under-investment for infrastructure during the previous

years for maintenance, infrastructure development for the Sochi 2014 Winter Olympics and 2018 World

{Cup} Soccer Championship, and increasing steel demand from the energy industry.”

Regarding third-country markets, 10 of 11 foreign producers anticipate increasing demand in

third-country markets, particularly in Asia. 

Prices

The Commission asked U.S. producers and importers to compare prices for hot-rolled steel in

U.S. and non-U.S. markets. Ten of the 14 responding producers provided price comparisons. *** stated

that the United States, due to its size and openness, has an attractive market, particularly for Japanese and

Russian hot-rolled steel producers, which have been low-price leaders in the world export market during

the last year or two. *** asserted that, because of a protected home market, Brazil can offer very low

export prices for hot-rolled steel, comparable to those of China, and that the new hot-rolling mill

scheduled to come on line in the spring of 2011 will increase the amount of hot-rolled steel to be exported

from Brazil. *** stated that prices in the United States are relatively attractive compared to those in other

markets and that fact, combined with the relative openness of the U.S. market makes it extremely

attractive to exporters in non-U.S. markets such as the three counties at issue in this review. *** reported

that U.S. prices are higher than those in Europe and Asia except during periods of economic recession,

such as 2003 and 2009-10. *** and *** noted that U.S. prices are higher than those in some regions and

lower than those in other regions. ***, ***, ***, and *** referred to prices published by CRU or Steel

Benchmarker for comparison; *** noted that Benchmarker shows U.S. prices to be highest, China lowest,

and the rest of the world in between. *** stated that prices of hot-rolled steel in *** “mirror” those in the

United States.

Responses to this question were received from 22 of the 36 importers of hot-rolled steel. ***

provided answers similar to those of their related U.S. steel producers. Several importers reported

specific pricing as of the date of their responses: *** reported a price of $544 per ton for the United

States, compared to $608 for Europe and $599 for China; *** reported a current U.S. price of $753 per

ton compared to a “global” price of $635 stowed; *** reported prices for the fourth quarter of 2010 as

$520-$580 per ton in the United States, compared to $500-$600 in Asia and $475-$530 in Europe; and

*** reported a current price of $710 per ton for the United States, compared to $618 for China and $599

for Europe-Black Sea.59 *** noted that prices in the United States are similar to those in Canada while

 59 Prices in this paragraph were reported by respondents as either dollars per metric ton (tonne) or dollars per

short ton. Those that were reported as dollars per metric ton have been converted by USITC staff to dollars per short

ton for ease of comparison.

IV-31
*** stated that prices are $36 per ton higher in South America. *** reported that comparisons are not

possible because U.S. material meeting their specifications is not available.60

Published price data, including that referred to by certain respondents, are available from several

reputable sources, although often such data are available by subscription only and cannot be reproduced

without consent of their publisher. These data, however, are collected based on different product

categories, timing, and commercial considerations, and so may not be directly comparable with each

other. Moreover, such data are distinct from the pricing data presented in Part V of this report, which are

collected directly from U.S. producers and U.S. importers according to precise product definitions.

Average world prices and country- and region-specific monthly transaction prices, as compiled

by Management Engineering & Production Services (“MEPS”), are presented in table IV-24 and figures

IV-1 and IV-2. As the data show, the country- and region-specific monthly transaction prices follow

roughly the same trends as the average world prices.

Table IV-24

Hot-rolled steel: Negotiated transaction prices (ex mill) for prime hot-rolled steel, by selected

country, and by month, January 2005-February 2011

* * * * * * *

Source: Compiled from data published by MEPS, found at http://www.meps.co.uk/World%20Carbon%20Price.htm. 

 60 Other responses were less specific: “market in U.S. about $50 MT higher as of 01-01-2011" (***); “HRC lower

in the U.S. market than in other markets worldwide” (***); “We hear about some discrepancies” (***); “Ever

changing” (***); “Not much difference” (***); “Constantly shifting” (***).

IV-32
Figure IV-2

Prices for hot-rolled steel, by selected country, January 2005-February 2011

* * * * * * *

*** is another source of price data. *** compiles country- and region-specific pricing

data, as shown in table IV-25.

Table IV-25

Hot-rolled steel: Prices for hot-rolled steel, by selected country or region, and by month, January

2005-March 2011

* * * * * * *

Average North America- and Brazil-specific monthly transaction prices, as compiled by Steel

Business Briefing, are presented in table IV-26. 

Table IV-26

Hot-rolled steel: Prices (average) for hot-rolled steel, by selected country or region, and by month,

January 2007-January 2011

Month

Price (dollars per short ton)

North America Brazil

2007

January 500 617

February 520 658

March 565 617

April 570 617

May 570 658

June 530 667

July 510 674

August 500 710

September 510 710

October 520 708

November 530 708

December 530 757

Table continued on next page.

IV-33
Table IV-26–Continued

Hot-rolled steel: Prices (average) for hot-rolled steel, by selected country or region, and by month,

January 2007-January 2011

Month

Price (dollars per short ton)

North America Brazil

2008

January 560 758

February 655 758

March 725 839

April 1,010 862

May 1,093 1,048

June 1,079 1,093

July 1,088 1,261

August 1,040 1,266

September 998 1,207

October 838 1,015

November 685 968

December 540 889

2009

January 515 939

February 510 860

March 462 843

April 419 833

May 386 884

June 388 890

July 489 924

August 526 955

September 587 969

October 565 1,060

November 520 1,036

December 529 1,023

Table continued on next page.

IV-34
Table IV-26–Continued

Hot-rolled steel: Prices (average) for hot-rolled steel, by selected country or region, and by

month, January 2007-January 2011

Month

Price (dollars per short ton)

North America Brazil

2010

January 590 1,034

February 603 995

March 653 989

April 690 1,107

May 708 1,067

June 667 1,169

July 606 1,089

August 579 1,121

September 603 1,201

October 572 1,159

November 569 1,159

December 686 1,096

2011

January 800 1,110

Source: Compiled from data published by Steel Business Briefing, hot-rolled steel prices of FOB Midwest Mill and Brazil,

Brazilian and Japanese Joint Respondent prehearing brief, exh. 12 (pubic version).

IV-35

PART V: PRICING AND RELATED INFORMATION

FACTORS AFFECTING PRICES

Prices of hot-rolled steel purchased by U.S. users depend on the quality, properties, and intended

end use of the steel. Important pricing factors include the carbon content of the hot-rolled steel and its

levels of alloy elements; the metallurgical properties of the hot-rolled steel, such as the purity and grain

structure of the steel; and surface and edge qualities. These elements typically are measured in terms of

AISI and SAE grades, which generally rate the steel’s chemistry, and ASTM specifications, which rate

the steel for mechanical and physical properties. Prices also depend on additional processing such as

pickling and oiling, temper rolling, edge trimming, cutting to size and weight, and packaging. Finally,

prices typically reflect the nature of the purchase agreement, including the quantity purchased; whether

the agreement is a spot sale or a longer-term contract; and, at times, surcharges for raw materials,

transportation, fuel, and/or energy.1

Raw Material Costs

At least seven U.S. producers specifically noted that scrap, iron (either pig iron, iron pellets,

direct reduced iron, or iron ore), and alloys were the raw materials used in the production of hot-rolled

steel. Coke was identified by four producers, and coal by three. Additionally, three non-integrated

producers reported that steel slabs were the primary raw material used to manufacture hot-rolled steel. Of

the producers, only *** reported a change in its raw materials since 2005, stating that it ***.2

 

Between 2005 and 2010, the price of heavy melt scrap steel on a monthly basis varied from a low of $141

per short ton in June 2005 to a high of $866 per short ton in July 2008 (see figure V-1). In general, prices

of scrap steel generally rose from mid-2005 to early 2008 before surging in mid-2008. Prices spiked in

July 2008 before the global recession, then decreased by more than 70 percent by December 2008. Since

that time, prices of scrap steel have been increasing, and by March 2011 were higher than pre-spike 2008

levels. 

 1 Hot-Rolled Steel Products from Argentina, China, India, Indonesia,Kazakhstan, Romania, South Africa,

Taiwan, Thailand, and Ukraine, Inv. Nos. 701-TA-404-408 and 731-TA-898-902 and 904-908 (Review), USITC

Publication 3956, October 2007, p. V-1.

 2

 Foreign producers in all three subject countries indicated that the same or similar raw materials were used in

their manufacturing processes. Foreign producers in Brazil and Japan reported that contracts for raw materials were

typically of a longer term (up to *** for iron ore for multiple producers in each country) than those used by foreign

producers in Russia. Since 2005, however, contract lengths have typically become shorter for producers in Brazil

and Japan.

V-1
Figure V-1

Scrap steel: American Metal Market #1 busheling (consumer buying price), Chicago, and ferrous

#1 industrial heavy melt, Chicago, monthly prices, January 2005-March 2011

Source: American Metal Market.

Eight of 17 producers reported that they have included surcharges in their sales contracts for hotrolled steel to cover changes in the prices of raw materials at some point since 2005, while only 2

importers have done so. Some of these producers noted that it is not a standard practice, but rather is

negotiated on a case-by-case basis. One U.S. producer, ***, reported that a raw material surcharge was

only used in 2005. Twenty of 28 responding purchasers reported paying raw material/scrap surcharges on

their purchases of hot-rolled steel since 2005, although surcharges were not applied throughout the entire

2005-10 period. Purchaser *** stated that “Generally all U.S. producers utilized surcharges since 2005.” 

Surcharges may be applied on a purchaser-by-purchaser and contract-by contract basis. Nine purchasers

noted the continued presence of surcharges, either for scrap or fuel/transportation in 2010.3

 

A majority of producers and importers reported a correlation between changes in the price of raw

materials and the price of hot-rolled steel. Published data suggest that the price of hot-rolled steel is

indeed highly sensitive to the price of scrap iron. The correlation between two indices of the price of

scrap and the three indices of the price of hot-rolled steel (lagged one month) for 2005 to 2011 ranged

between 0.82 and 0.90.4

 The relationship is demonstrated in figure V-2. These data indicate that since

January 2011, the price spread between scrap and hot-rolled steel has been increasing. At the hearing,

0

100

200

300

400

500

600

700

800

900

1,000

2005200620072008

2009

20102011

Dollars per short ton

Scrap, no. 1 busheling Scrap, ferrous, no. 1 industrial heavy melt

 3 Longer-term contracts would be more likely to include surcharges which would hedge against fluctuations in

raw material prices.

 4

 Several producers noted that steel surcharges were based on the price of scrap for the preceding month. These

indices include American Metal Market’s scrap #1 busheling, Chicago; scrap #1 industrial heavy melt, Chicago; hotrolled sheet, Midwest; hot-rolled coil, import; and ***.

V-2
however, one industry representative reported that “We have increased our hot-rolled prices recently, but

that is because our raw material cost increase which have been massive, not because the market is

strong.”5

Figure V-2

Scrap and hot-rolled steel: Price indices for scrap and hot-rolled steel, monthly, January 2005-

March 2011

* * * * * * *

Coke is used to charge the blast furnaces. Several integrated steel producers manufacture their

own coke from coal stocks, and even sell coke to other steel companies, while others import coke. As

seen in figure V-3, c.i.f. import unit values of coke were generally declining until 2008 when they

increased greatly. After September 2008, unit values decreased precipitously and were at early 2008

levels until early 2010. Since then, unit values nearly doubled but began to generally decline in late 2010.

Figure V-3

Coke: Unit values of imports of coke for blast furnaces (on a c.i.f. basis), monthly, January 2005-

February 2011

Source: Compiled from official Commerce statistics, HTS subheading 2704.00.00.

All producers and 20 of 28 responding importers anticipated changes in the price of raw materials

in the foreseeable future. Eight producers anticipate continuing volatility in raw material pricing, while

four anticipate increasing prices and one anticipates decreasing prices. Three producers stated that

demand drives these trends, whereas *** reported that the scrap supply in the market is very tight and is

driven by global capacity, in particular in China and (increasingly) in Turkey. Importers also noted

volatile and increasing raw material prices. Importer *** reported that coke and coal contracts are

0

100

200

300

400

500

600

700

800

2005

2006

20007

2008200920102011

Dollars per short ton

Coke import price (c.i.f.)

 5 Hearing transcript, p. 52 (DiMicco).

V-3
changing from a yearly to a quarterly basis. Furthermore, it noted that the increasing role of China as a

consumer is one reason why it believes raw material prices will continue to increase. 

Energy Costs

Energy costs are an important factor in hot-rolled steel production, especially for mills using

electric arc furnaces. Available data indicate that annual average industrial prices of electricity (per

kilowatt hour) generally increased from 5.23 cents in January 2005 to 6.35 cents in January 2011 (figure

V-4).6

 Natural gas prices (per thousand cubic feet) spiked during late 2005 and mid-2008. Natural gas

prices hit a period low in September 2009, and have not recovered to pre-2008 prices since that time. 

Prices for electricity and natural gas are not forecasted to vary appreciably from 2010 levels in 2011-12. 

Figure V-4

Industrial natural gas and electricity: monthly prices, January 2005-March 2011 and April 2011-

December 2012 (forecast)

Source: Short Term Energy Outlook, Energy Information Administration, retrieved from www.eia.doe.gov, April 13,

2011.

U.S. Inland Transportation Costs

Questionnaire responses indicate that U.S. inland transportation costs for hot-rolled steel ranged

between 2 and 5.5 percent for U.S. producers (with an average of 3.9 percent) and between 1 and 18

percent for U.S. importers (with an average of 6.6 percent). Producers and importers were also asked to

estimate the percentage of their sales that occurred within 100 miles of their storage or production facility,

between 100 and 1,000 miles, and over 1,000 miles. Nine of 14 producers and 14 of 18 importers

reported that 40 percent or more of their shipments were made within 100 miles, averaging 41 percent for

producers and 68 percent for importers. Six importers reported only shipping within 100 miles of their

0

2

4

6

8

10

12

14

2005

2006

2007

2008

2009

2010

2011

2012

Dollars per thousand cu ft. (natural gas)

0

1

2

3

4

5

6

7

8

9

Cents per kilowatt-hour (electricity)

Natural gas Electricity

Forecast

 6 As shown in figure V-4, energy prices appear to be highly cyclical, with electricity prices increasing in the

summer and natural gas prices increasing in the winter, due to seasonal demand. 

V-4
importation facility or warehouse. Ten of 14 producers and six of 18 importers reported that 40 percent

or more of their sales were shipped between 101 and 1,000 miles to their customers, averaging 48 percent

of producers’ shipments and 31 percent of importers’ shipments.

Thirteen of 14 producers arrange for transportation to their purchasers at least some of the time. 

Twelve of 23 responding importers reported that they arrange for transportation, whereas 11 of their

purchasers arrange for transportation by themselves. Twelve of 14 producers sell on an f.o.b. basis,

whereas half of importers sell on an f.o.b. basis and half on a delivered basis.

Three producers (***) have added fuel or transportation surcharges to the price that they charge

for hot-rolled steel since 2005, as have four importers (***). Twelve purchasers reported having paid fuel

or transportation surcharges since 2005.

Exchange Rates

Brazil’s currency appreciated 70 percent against the dollar over January 2005-December 2010 in

real terms, half of which occurred in 2009-10. Recently, however, Brazilian authorities have enacted

numerous reforms in an attempt to curb this appreciation.7

 Japan’s currency depreciated against the dollar

in 2005 in real terms, and maintained approximately that level until mid-2008, when it began appreciating

against the dollar. By the last quarter of 2010, the yen had appreciated 7 percent against the dollar in real

terms. The Russian currency appreciated against the dollar in real terms by over 60 percent between the

first quarter of 2005 and the third quarter of 2008. By the first quarter of 2009, it had given back all but 6

percent of that appreciation. Since that point, however, the ruble has generally appreciated against the

dollar and was 36 percent higher in the last quarter of 2010 than the first quarter of 2005 (28 percent

higher than the first quarter of 2009). For more information, see figure V-5.

 7 See, e.g., “FACTBOX-How Brazil is trying to curb currency appreciation”, March 15, 2011, retrieved April 8,

2011, found at http://www.reuters.com/article/2011/03/15/brazil-forex-idUSN1524033620110315.

V-5
Figure V-5

Exchange rates: Indices of the nominal and real exchange rates between the Brazilian real, 

Japanese yen, and Russian ruble and the U.S. dollar, by quarters, January 2005- December 2010

Figure continued on next page.

0

20

40

60

80

100

120

140

160

180

2005

2006

2007

2008

2009

2010

Brazil

Jan.-Mar. 2005=100

Nominal exchange rate Real exchange rate

V-6
Figure V-5--Continued

Exchange rates: Indices of the nominal and real exchange rates between the Brazilian real, 

Japanese yen, and Russian ruble and the U.S. dollar, by quarters, January 2005- December 2010

Source: International Financial Statistics, International Monetary Fund.

PRICING PRACTICES

Pricing Methods

U.S. producers establish prices in a variety of ways. All producers use transaction-by-transaction

negotiation, 9 of 14 sell via contracts, and only two (***) sell off of published price lists. U.S. producer

*** reported that it stopped selling via a price list after discovering that importers were allegedly using

the list to undercut its prices. The majority of responding importers (23 of 29) also use transaction-bytransaction negotiation, with nine selling via contracts and three (***) selling via published price lists. 

All but two purchasers (***) reported their purchases of hot-rolled steel usually involve negotiations with

suppliers. Eighteen of 32 responding purchasers noted that they tend to vary their purchases from a given

supplier within a specified time period based on the price offered for that period.

Thirteen of 14 U.S. producers indicated that the majority of their sales were on the spot market in

2010 (more than 80 percent, based on a simple average), and 13 also sell via short-term contracts. Only

*** sells solely in the spot market. Three producers also reported selling via long-term contracts in 2010

(***), although *** also responded to questions regarding long-term contracts. Long-term contracts

reportedly do not contain meet-or-release clauses. Three producers reported that both prices and

quantities are fixed, while the other two reported fixing prices only. Two of the five also noted that prices

could be renegotiated within the contract period. Short-term contracts were reported to vary greatly in

length–between one and 12 months– and with regard to the terms of the contract (e.g., meet-or-release

clauses, raw material surcharges, etc.).8

 

Russia

0

20

40

60

80

100

120

140

160

180

2005

2006

2007

2008

2009

2010

Jan.-Mar. 2005=100

Nominal exchange rate Real exchange rate

 8 Long-term contracts are defined as contracts of more than 12 months. Short-term contracts include multiple

deliveries that may be as long as 12 months.

V-7
A greater proportion of hot-rolled steel is being sold on the spot market or via contracts that are

of a shorter length when compared with the market conditions prevailing in the first review.9

 While there

is a proportion of purchasers that need long-term contracts, raw material cost volatility has made longerterm contracts riskier, and thus, shorter-term sales more widespread, even for auto manufacturers such as

Ford.10 Between 98 and 100 percent of hot-rolled steel is purchased by auto manufacturers on a shortterm basis, according to ***. *** reported buying any hot-rolled steel via long-term contract, which

amounted to ***. Two witnesses for the domestic interested parties stated that iron ore producers will not

sell iron ore for a period of longer than three months, leading to the reduction in the availability of longerterm hot-rolled steel contracts.11

Fifteen of 20 responding importers reported at least 95 percent of their 2010 hot-rolled steel sales

were on the spot market, and four importers reported at least 90 percent of their 2010 hot-rolled steel sales

were via short-term contract. The other importer reported an equal split between spot sales and short-term

contract sales. Importers’ contracts were somewhat more consistent across companies. Four of the seven

responding importers that sell via short-term contract reported contract lengths of between three and four

months. None of these importers typically renegotiates prices within the contract period or has meet-orrelease clauses, and six of seven fix both price and quantity.

Sales Terms and Discounts

Five of 14 producers offer quantity discounts to at least one customer and three offer annual total

volume discounts. Among importers, ***, which bases discounts on individual customers, was the only

importer which noted offering discounts. All but two producers allow an early payment discount of up to

1⁄2 percent, whereas only three importers offer an early payment discount.

Price Leadership

Purchasers were asked which firms in the industry they consider to be price leaders.12 In nearly

every instance, firms considered to be price leaders in the industry were domestic mills. Nucor was

mentioned by the greatest number of purchasers (25), followed by ArcelorMittal (14), U.S. Steel (9), and

AK Steel (8). Also noted were Severstal North America, Kenwal, California Steel Industries, Steel

Dynamics, NLMK Beta, and “minimills” generically. Purchasers noted that price changes are typically

communicated two to three months before delivery for spot purchases, and within a day of an

announcement of a price increase, most other mills have adjusted their prices accordingly. Further, they

noted that prices are announced monthly, although price changes could occur at any time. 

Regional Price Differences

Producers and importers were asked if regional price differences existed in the hot-rolled steel

market. Nine of 14 producers indicated that prices could be slightly higher on shipments to the West

Coast, with a majority of these indicating that this was mostly due to increased freight costs, although a

few noted that the lack of producers/competitive situations affects demand in this area as well. No

producer reported any variances in pricing related to a price transmission lag. Nine importers also

 9 Certain Hot-Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil, Japan, and Russia, Inv. Nos.

701-TA-384 and 731-TA-806-808 (Review), USITC Publication 3767, April 2005, pp. V-5-6.

 10 Hearing transcript, pp. 186-188 (Blume, Busse, Scherrbaum) and 249 (McConnell).

 11 Hearing transcript, pp. 187-188 (Blume and Busse).

 12 A price leader is defined as: (1) a firm that initiates a price change, either upward or downward, that is

followed by other firms, or (2) a firm that has a significant impact on prices. 

V-8
indicated that the West Coast typically has higher pricing, and three additionally noted that prices differ

due to freight costs, but did not specify the West Coast as the region with higher pricing. Four importers

further noted the lack of producers on the West Coast leading to higher prices. Only importer ***

reported that there were any timing differences, noting that the West Coast is typically slower to react to

price changes. 

PRICE DATA

The Commission requested U.S. producers and importers of hot-rolled steel to provide quarterly

data for the total quantity and f.o.b. value of hot-rolled steel products that were shipped to unrelated

customers in the U.S. market. Data were requested for the period January 2005 to December 2010. The

products for which pricing data were requested are as follows:

Product 1.–Hot-rolled carbon steel plate in coils, as-rolled unprocessed, not pickled or temperrolled, not high strength, produced to AISI-1006-1025 grade (including, but not limited to,

ASTM A36), 0.187" through 0.625" in nominal or actual thickness, 40" through 72" in width.

Product 2.–Hot-rolled carbon sheet in coils, commercial quality, SAE 1006-1015 or ASTM

A1011 equivalent, not high strength, not pickled and oiled, not temper-rolled, 0.090" through

0.171" in nominal or actual thickness, 40" to 72" in width. 

Product 3.–Hot-rolled carbon sheet in coils, commercial quality, SAE 1006-1015 or ASTM

A1011 equivalent, pickled and oiled, temper-rolled, not high strength, 0.090" through 0.171" in

nominal or actual thickness, 40" to 72" in width. 

Product 4.–Hot-rolled carbon plate in coils, as-rolled (unprocessed), not pickled or temper-rolled,

in high strength low alloy qualities according to SAE J 1392, ASTM A-572/656/1011, 0.187"

through 0.625" in nominal or actual thickness, 40" through 72" in width.

All 14 U.S. producers and 13 importers of hot-rolled steel from Brazil, Japan, and/or Russia

provided usable pricing data for sales of the requested products, although not all firms reported pricing for

all products for all quarters. Eleven of the 13 reported data for Russia, and one company each provided

data for Brazil and Japan. By quantity, pricing data reported by responding firms in 2005-10 accounted

for approximately 47.5 percent of reported U.S. producers’ commercial shipments of hot-rolled steel, ***

percent of reported U.S. shipments of subject imports from Brazil, 6.1 percent of the reported U.S.

shipments of subject imports from Japan, and 79.3 percent of reported U.S. shipments of subject imports

from Russia.13

Price Trends

As shown in tables V-1 through V-4 and in figures V-6 through V-9, weighted-average U.S.

quarterly f.o.b. prices of hot-rolled steel products 1-4 declined from the first quarter to the third quarter of

2005, before increasing through the third quarter of 2006. Prices then declined irregularly through the

end of 2007. Prices increased by 69 to 82 percent from the last quarter of 2007 to the third quarter of

2008. As the U.S. economy went into recession, prices dropped swiftly, to around 2007 levels or below

 13 With regard to Japan, there was very little data reported for the products for which pricing data were requested.

Many of the subject products imported from Japan are characterized as specialty steel items for the automotive

industry by Japanese respondent interested parties. Four of five Japanese foreign producers reported that they

exported only this type of hot-rolled steel during 2005-10.

V-9
(for products 2 and 3). Prices for domestically produced products 1, 2, and 3 then increased through the

second quarter of 2010 before declining through the end 2010.14 Overall, prices for all U.S.-produced

hot-rolled steel products decreased between the first quarter of 2005 and the last quarter of 2010. More

detailed information is presented in table V-5. 

Price data for hot-rolled steel products from Brazil (as reported by U.S. importers) were reported

in only one quarter and for only one product, so no trends are available. Prices for hot-rolled steel

imported from Japan were available only for product 4, and displayed price trends dissimilar to those for

domestically produced hot-rolled steel. Prices increased by *** percent between the first quarter of 2005

and the first quarter of 2006. Prices then stayed within *** percent of those levels through the second

quarter of 2008, when sales of imported Japanese product 4 ceased. Price trends for the four pricing

products imported from Russia and sold in the United States generally followed the trends displayed by

domestically produced hot-rolled steel, although with greater variability. This increased volatility is

likely due to the smaller and less consistent volume of shipments of Russian-produced hot-rolled steel

compared the volume of domestically produced and sold hot-rolled steel. 

Purchasers were also asked if there has there been a change in the price of hot-rolled steel since

2005, and if so, if the price of U.S.-produced hot-rolled steel changed more or less than the price of

imported hot-rolled steel from Brazil, Japan, and Russia. Only one purchaser (***) reported that there

had not been any changes in prices of hot-rolled steel. Seventeen purchasers reported that prices of

domestic and imported hot-rolled steel have changed by the same amount. Two purchasers reported that

U.S. prices had decreased relative to Russian prices, and one indicated that U.S. prices had decreased

relative to Brazilian prices. Additionally, one purchaser indicated that U.S. prices had increased relative

to Japanese prices. 

U.S. producers have announced successive price increases since late 2010. As shown in figure V2, as of January 2011, prices for hot-rolled sheet and coil had reached nearly $800 per short ton. 

Published sources noted in February 2011 that the price for hot-rolled steel continued to climb and that

Severstal announced a price of $900 per short ton for orders placed after February 11, 2011, with

additional announcements expected.15 Published reports in March indicated upward price movements,

although with somewhat more emphasis on supply and demand factors and less on input costs.16

Published reports in mid-to-late April have indicated that prices have eased from $900 per ton back to

$860-880 per ton, due to slight declines in scrap prices and the threat of new steelmaking capacity

entering the market. Keith Busse, Chairman and CEO of Steel Dynamics reported that “I don’t think it’s

any big surprise that the market has tempered itself a little bit. It may have more future movement in it,

but right now it’s paused in the (mid-$800s) and there’s a good likelihood as the economy continues to

grow that it could move forward somewhat.”17

 14 Product 4 did not follow the same pattern as the other products in 2009. Its price decline was more extended,

declining through the first quarter of 2010, save for a price increase in the last quarter of 2009. Product 4 did,

however, decline from the second to the fourth quarters of 2010 along with the trend observed in domestically

produced pricing products 1 through 3.

 15 “Severstal North America increases hot-rolled steel to $900/st EXW,” Platts February 17, 2011, retrieved

February 28, 2011, found at http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Metals/6842956.

 16 See, e.g., “SSAB Americas hikes plate, sheet,” American Metal Markets, March 14, 2011, found at

http://www.amm.com/Article/2786884/Search/Results/SSAB-Americas-hikes-plate-sheet.html?Keywords=SSAB%2

c+plate&OrderType=1, retrieved on March 17, 2011; see also

“US hot band tags on run, more hikes seen looming,” American Metal Markets, March 16, 2011, found at

http://www.amm.com/Article.aspx?ArticleID=2788665&LS=EMS502682, retrieved on March 17, 2011.

 17 “Mill cuts send flat-rolled steel tags in about-face,” American Metal Markets, April 20, 2011, found at

http://www.amm.com/Article/2811634/Mill-cuts-send-flat-rolled-steel-tags-in-about-face.html, retrieved April 26,

2011.

V-10
Table V-1

Hot-rolled steel: Weighted-average f.o.b. prices and quantities of domestic and imported product

11

 and margins of underselling/(overselling), by quarters, January 2005-December 2010 2

Period

United States Russia

Price

(per short ton)

Quantity

(short tons)

Price

(per short ton)

Quantity

(short tons)

Margin

(percent)

2005:

 Jan.-Mar. $613.81 1,485,275 $*** *** ***

 Apr.-June 564.86 1,306,476 *** *** ***

 July-Sept. 464.26 1,365,469 *** *** ***

 Oct.-Dec. 521.31 1,511,241 *** *** ***

2006:

 Jan.-Mar. 549.25 1,581,112 *** *** ***

 Apr.-June 564.90 1,705,076 *** *** ***

 July-Sept. 606.36 1,450,850 *** *** ***

 Oct.-Dec. 565.97 1,115,547 *** *** ***

2007:

 Jan.-Mar. 525.99 1,309,029 *** *** ***

 Apr.-June 562.65 1,351,072 *** *** ***

 July-Sept. 547.84 1,228,228 *** *** ***

 Oct.-Dec. 526.34 1,454,985 *** *** ***

2008:

 Jan.-Mar. *** *** *** *** ***

 Apr.-June *** *** *** *** ***

 July-Sept. *** *** *** *** ***

 Oct.-Dec. *** *** *** *** ***

2009:

 Jan.-Mar. *** *** *** *** ***

 Apr.-June *** *** *** *** ***

 July-Sept. *** *** *** *** ***

 Oct.-Dec. *** *** *** *** ***

2010:

 Jan.-Mar. *** *** *** *** ***

 Apr.-June *** *** *** *** ***

 July-Sept. *** *** *** *** ***

 Oct.-Dec. *** *** *** *** ***

1

 Hot-rolled carbon steel plate in coils, as-rolled unprocessed, not pickled or temper-rolled, not high strength, produced to

AISI-1006-1025 grade (including, but not limited to, ASTM A36), 0.187" through 0.625" in nominal or actual thickness, 40" through

72" in width. 2

 Data for product 1 imported from Brazil were reported only in ***. ***. 

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

V-11
Table V-2

Hot-rolled steel: Weighted-average f.o.b. prices and quantities of domestic and imported product

21

 and margins of underselling/(overselling), by quarters, January 2005-December 2010

Period

United States Russia

Price

(per short ton)

Quantity

(short tons)

Price

(per short ton)

Quantity

(short tons)

Margin

(percent)

2005:

 Jan.-Mar. $598.81 738,674 $*** *** ***

 Apr.-June 535.30 635,209 *** *** ***

 July-Sept. 438.14 691,751 *** *** ***

 Oct.-Dec. 505.75 757,362 *** *** ***

2006:

 Jan.-Mar. 526.45 795,573 *** *** ***

 Apr.-June 552.28 893,370 *** *** ***

 July-Sept. 594.63 765,298 *** *** ***

 Oct.-Dec. 543.04 534,322 *** *** ***

2007:

 Jan.-Mar. 503.18 748,366 *** *** ***

 Apr.-June 551.88 908,680 *** *** ***

 July-Sept. 548.48 812,817 *** *** ***

 Oct.-Dec. 538.72 819,834 *** *** ***

2008:

 Jan.-Mar. 584.50 890,497 *** *** ***

 Apr.-June 799.20 973,170 *** *** ***

 July-Sept. 963.16 721,755 -- 0 --

 Oct.-Dec. 696.49 347,264 *** *** ***

2009:

 Jan.-Mar. 524.52 354,398 *** *** ***

 Apr.-June 432.43 345,876 *** *** ***

 July-Sept. 506.65 603,145 -- 0 --

 Oct.-Dec. 601.09 609,851 *** *** ***

2010:

 Jan.-Mar. 548.02 478,482 *** *** ***

 Apr.-June 635.33 494,543 *** *** ***

 July-Sept. 551.47 427,274 *** *** ***

 Oct.-Dec. 524.95 431,711 *** *** ***

1

 Hot-rolled carbon sheet in coils, commercial quality, SAE 1006-1015 or ASTM A1011 equivalent, not high strength, not

pickled and oiled, not temper-rolled, 0.090" through 0.171" in nominal or actual thickness, 40" to 72" in width. 

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

V-12
Table V-3

Hot-rolled steel: Weighted-average f.o.b. prices and quantities of domestic and imported product

31

 and margins of underselling/(overselling), by quarters, January 2005-December 2010

Period

United States Russia

Price

(per short ton)

Quantity

(short tons)

Price

(per short ton)

Quantity

(short tons)

Margin

(percent)

2005:

 Jan.-Mar. $657.16 268,330 -- 0 --

 Apr.-June 598.55 255,568 -- 0 --

 July-Sept. 510.65 242,337 -- 0 --

 Oct.-Dec. 560.43 277,784 -- 0 --

2006:

 Jan.-Mar. 569.65 316,135 -- 0 --

 Apr.-June 595.26 295,221 $*** *** ***

 July-Sept. 645.79 269,613 *** *** ***

 Oct.-Dec. 619.38 198,271 *** *** ***

2007:

 Jan.-Mar. 581.75 263,620 -- 0 --

 Apr.-June 624.56 284,044 -- 0 --

 July-Sept. 580.94 307,298 -- 0 --

 Oct.-Dec. 582.16 260,761 -- 0 --

2008:

 Jan.-Mar. 630.36 347,678 -- 0 --

 Apr.-June 840.22 295,561 -- 0 --

 July-Sept. 1,030.97 215,815 -- 0 --

 Oct.-Dec. 803.05 138,291 -- 0 --

2009:

 Jan.-Mar. 587.71 121,410 -- 0 --

 Apr.-June 478.12 133,267 -- 0 --

 July-Sept. 495.41 176,512 -- 0 --

 Oct.-Dec. 548.53 177,983 -- 0 --

2010:

 Jan.-Mar. 589.60 225,909 -- 0 --

 Apr.-June 689.89 188,680 -- 0 --

 July-Sept. 657.31 191,682 -- 0 --

 Oct.-Dec. 609.34 181,022 -- 0 --

1

 Hot-rolled carbon sheet in coils, commercial quality, SAE 1006-1015 or ASTM A1011 equivalent, pickled and oiled,

temper-rolled, not high strength, 0.090" through 0.171" in nominal or actual thickness, 40" to 72" in width. 

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

V-13
Table V-4

Hot-rolled steel: Weighted-average f.o.b. prices and quantities of domestic and imported product

41

 and margins of underselling/(overselling), by quarters, January 2005-December 2010

Period

United States Japan Russia

Price

(per short

ton)

Quantity

(short

tons)

Price

(per short

ton)

Quantity

(short

tons)

Margin

(percent)

Price

(per short

ton)

Quantity

(short

tons)

Margin

(percent)

2005:

 Jan.-Mar. $672.51 399,251 $*** *** *** -- 0 --

 Apr.-June 599.84 312,487 *** *** *** $*** *** ***

 July-Sept. 486.22 327,647 *** *** *** -- 0 --

 Oct.-Dec. 538.54 402,689 *** *** *** *** *** ***

2006:

 Jan.-Mar. 566.27 467,921 *** *** *** *** *** ***

 Apr.-June 579.26 465,121 *** *** *** *** *** ***

 July-Sept. 623.41 467,358 *** *** *** *** *** ***

 Oct.-Dec. 597.88 354,725 *** *** *** *** *** ***

2007:

 Jan.-Mar. 569.37 416,702 *** *** *** -- 0 --

 Apr.-June 618.12 457,592 *** *** *** *** *** ***

 July-Sept. 614.20 435,588 *** *** *** -- 0 --

 Oct.-Dec. 598.53 439,976 *** *** *** *** *** ***

2008:

 Jan.-Mar. 605.25 515,938 *** *** *** *** *** ***

 Apr.-June 807.71 551,794 *** *** *** *** *** ***

 July-Sept. 1,012.13 562,599 -- 0 -- *** *** ***

 Oct.-Dec. 870.25 331,599 -- 0 -- -- 0 --

2009:

 Jan.-Mar. 773.04 248,342 -- 0 -- *** *** ***

 Apr.-June 640.20 159,938 -- 0 -- *** *** ***

 July-Sept. 625.20 294,663 -- 0 -- *** *** ***

 Oct.-Dec. 739.98 388,604 -- 0 -- -- 0 --

2010:

 Jan.-Mar. 597.83 277,964 -- 0 -- *** *** ***

 Apr.-June 686.34 312,491 -- 0 -- *** *** ***

 July-Sept. 662.83 352,543 -- 0 -- *** *** ***

 Oct.-Dec. 596.42 250,183 -- 0 -- *** *** ***

1

 Hot-rolled carbon plate in coils, as-rolled (unprocessed), not pickled or temper-rolled, in high strength low alloy qualities

according to SAE J 1392, ASTM A-572/656/1011, 0.187" through 0.625" in nominal or actual thickness, 40" through 72" in width.

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

V-14
Figure V-6

Hot-rolled steel: Weighted-average quarterly f.o.b. prices and quantities of domestic and imported

product 1, 2005-10

* * * * * * *

Figure V-7

Hot-rolled steel: Weighted-average quarterly f.o.b. prices and quantities of domestic and imported

product 2, 2005-10

* * * * * * *

Figure V-8

Hot-rolled steel: Weighted-average quarterly f.o.b. prices and quantities of domestic and imported

product 3, 2005-10

* * * * * * *

Figure V-9

Hot-rolled steel: Weighted-average quarterly f.o.b. prices and quantities of domestic and imported

product 4, 2005-10

* * * * * * *

Table V-5

Hot-rolled steel: Summary of weighted-average f.o.b. prices for products 1-4 from the United

States, Japan, and Russia1

Item Number of

quarters

Low price 

(per short ton)

High price

(per short ton)

Change in price2

(percent)

Product 1 

United States 24 *** *** ***

Russia 24 *** *** ***

Product 2

United States 24 432 963 (12.3)

Russia 22 *** *** ***

Product 3 

United States 24 478 1,031 (7.3)

Russia 3 *** *** ***

Product 4

United States 24 486 1,012 (11.3)

Japan 14 *** *** ***

Russia 18 *** *** ***

 1 Only one data point was provided for pricing products from Brazil. 2 Percentage change from the first quarter in which price data were available to the last quarter in which price data

were available, based on unrounded data.

Source: Tables V-1 to V-4.

V-15
Price Comparisons

Price comparisons between U.S.-produced and imported hot-rolled steel were reported in 82

instances. In 55 of 82 instances, the imported product was priced above the domestically produced

product, while in 27 of the 82 instances, the imported product was priced below the domestic product

(table V-6). With respect to Brazil and Japan (which accounted for 15 instances), the imported product

was always priced higher than the U.S. product. Brazil accounted for one instance of overselling, with a

margin of *** percent. The margins for the 14 quarters of overselling for Japan ranged from *** percent

to *** percent.18 Hot-rolled steel imported from Russia undersold the domestic product in 27 of 67

quarters, with margins averaging 8.3 percent. In the remaining 40 quarters, margins of overselling

averaged (15.6) percent.19 

Table V-6

Hot-rolled steel: Number of quarters of underselling and (overselling) and highest and lowest

margins of underselling and (overselling), by product number, January 2005-December 2010

Product

and

Country

Number of

quarters of

underselling

Number of

quarters of

(overselling)

Margins of underselling Margins of (overselling)

Average 

(percent) 

Range (percent)

Average 

(percent)

Range (percent)

Min Max Min Max

Brazil1

1 0 1 -- -- -- *** *** ***

Japan2

4 0 14 -- -- -- *** *** ***

Russia3

1 4 20 *** *** *** *** *** ***

2 9 13 *** *** *** *** *** ***

3 3 0 *** *** *** -- -- -- 

4 11 7 *** *** *** *** *** ***

Subtotal 27 40 8.3 0.1 24.1 (15.6) (0.1) (52.2)

Total 27 55 8.3 0.1 24.1 (63.6) (0.1) (270.2)

 1 In the original investigations, there were 36 instances of underselling and 22 instances of overselling for Brazil; in the 2005

reviews, there were 7 instances of underselling and 23 instances of overselling.

 2

 In the original investigations, there were 23 instances of underselling and 39 instances of overselling for Japan; in the 2005

reviews, there were 2 instances of underselling and 2 instances of overselling. 

 3

 In the original investigations, there were 63 instances of underselling and 9 instances of overselling for Russia; in the 2005

reviews, there were 42 instances of underselling and 36 instances of overselling. 

Source: Compiled from data submitted in response to Commission questionnaires and Certain Hot-Rolled Flat-Rolled

Carbon-Quality Steel Products From Brazil, Japan, and Russia, Inv. Nos. 701-TA-384 and 731-TA-806-808 (Review), USITC

Publication 3767, April 2005, p. V-15.

 18 ***. Staff telephone interview with ***, March 15, 2011.

 19 In 2005, 9 of the 10 quarters of comparison showed overselling, while 14 of the 15 quarters of comparison in

2006 showed underselling. The other years had relatively mixed patterns of overselling and underselling.

V-16
APPENDIX A

FEDERAL REGISTER NOTICES AND THE 

COMMISSION’S STATEMENT ON ADEQUACY

A-1

EXPLANATION OF COMMISSION DETERMINATION ON ADEQUACY

in

Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil, Japan, and Russia 

Inv. Nos. 701-TA-384 and 731-TA-806-808 (Second Review)

On July 6, 2010, the Commission determined that it should proceed to full reviews in each of the

subject five-year reviews pursuant to section 751(c)(3)(B) of the Tariff Act of 1930, as amended,

19 U.S.C. § 1675(c)(3)(B).

The Commission received one response to the notice of institution from domestic interested

parties, which was jointly filed by United States Steel Corp., ArcelorMittal USA Inc., Nucor Corp., Steel

Dynamics, Inc., Gallatin Steel Co., and SSAB Enterprises LLC (collectively “Domestic Producers”). 

Each of the Domestic Producers is a U.S. producer of hot-rolled flat-rolled carbon-quality steel products

(“hot rolled steel”). The Commission determined that the individual responses of each of the Domestic

Producers was adequate. Because Domestic Producers collectively account for a substantial proportion of

domestic hot rolled steel production, the Commission also determined that the domestic interested party

group response was adequate. 

With respect to the reviews of the antidumping duty and countervailing duty orders on subject

merchandise from Brazil, the Commission received two sets of responses to the notice of institution from

respondent interested parties. One of these was jointly filed by Companhia Siderurgica Nacional (CSN),

a producer and exporter of subject merchandise from Brazil, and Companhia Siderurgica Nacional LLC

(CSN LLC), an affiliated importer of subject merchandise. The other was filed by Usinas Siderurgicas de

Minas Gerais (Usiminas), a producer and exporter of subject merchandise from Brazil. The Commission

found that each individual response was adequate. Because CSN and Usiminas collectively account for a

substantial proportion of the production of subject merchandise from Brazil, the Commission determined

that the respondent interested party group response was adequate for the reviews of the orders covering

subject merchandise from Brazil.

With respect to the review of the antidumping duty order on subject merchandise from Japan, the

Commission received individually adequate responses from two respondent interested parties, JFE Steel

Corp. and Nippon Steel Corp., each of which is a producer and exporter of subject merchandise from

Japan. Because JFE and Nippon collectively account for a substantial proportion of the production of

subject merchandise from Japan, the Commission determined that the respondent interested party group

response was adequate for the review on the order covering subject merchandise from Japan. 

With respect to the review of the suspension agreement on subject merchandise from Russia, the

Commission received individually adequate responses from three respondent interested parties,

Magnitogorsk Iron and Steel Works (MMK), Novolipetsk Steel (NLMK), and JSC Severstal, each of

which is a producer and exporter of subject merchandise from Russia. Because MMK, NLMK, and

Severstal collectively represent a substantial proportion of production of subject merchandise from

Russia, the Commission determined that the respondent interested party group response was adequate for

the review of the suspension agreement covering subject merchandise from Russia.

Consequently, in each of the subject reviews both the domestic interested party group response

and the respondent interested party group response was adequate. The Commission accordingly

determined to conduct full reviews in each of the subject reviews.

A record of the Commissioners’ votes is available from the Office of the Secretary and the

Commission’s web site (http://www.usitc.gov).
 
16504 Federal Register / Vol. 75, No. 62 / Thursday, April 1, 2010 / Notices 

1No response to this request for information is 

required if a currently valid Office of Management 

and Budget (OMB) number is not displayed; the 

OMB number is 3117–0016/USITC No. 10–5–212, 

expiration date June 30, 2011. Public reporting 

burden for the request is estimated to average 15 

hours per response. Please send comments 

regarding the accuracy of this burden estimate to 

the Office of Investigations, U.S. International Trade 

Commission, 500 E Street, SW., Washington, DC 

20436. 

Indian Reservation, Oregon may 

proceed after that date if no additional 

claimants come forward. 

The Northwest Museum, Whitman 

College is responsible for notifying the 

Confederated Tribes of the Umatilla 

Indian Reservation, Oregon that this 

notice has been published. 

Dated: March 16, 2010 

Sherry Hutt, 

Manager, National NAGPRA Program. 

[FR Doc. 2010–7252 Filed 3–31–10; 8:45 am] 

BILLING CODE 4312–50–S 

DEPARTMENT OF THE INTERIOR 

Bureau of Land Management 

[CO200–LLCOF00000–L07770900–XZ0000– 

241A00] 

Notice of Meeting, Front Range 

Resource Advisory Council 

AGENCY: Bureau of Land Management, 

Interior. 

ACTION: Notice of public meeting. 

SUMMARY: In accordance with the 

Federal Land Policy and Management 

Act (FLPMA) and the Federal Advisory 

Committee Act of 1972 (FACA), the U.S. 

Department of the Interior, Bureau of 

Land Management (BLM) Front Range 

Resource Advisory Council (RAC), will 

meet as indicated below. 

DATES: The meeting will be held April 

20, 2010 from 9:15 a.m. to 4 p.m. 

ADDRESSES: BLM Royal Gorge Field 

Office, 3028 East Main Street, Can ̃ on 

City, Colorado 81212. 

FOR FURTHER INFORMATION CONTACT: Cass 

Cairns, Front Range RAC Coordinator, 

BLM Royal Gorge Field Office, 3028 E. 

Main St., Can ̃ on City, CO 81212. Phone: 

(719) 269–8553. E-mail: 

ccairns@blm.gov. 

SUPPLEMENTARY INFORMATION: The 15- 

member Council advises the Secretary 

of the Interior, through the Bureau of 

Land Management, on a variety of 

planning and management issues 

associated with public land 

management in the BLM Front Range 

District, which includes the Royal Gorge 

Field Office and the San Luis Valley 

Public Lands Center, Colorado. Planned 

agenda topics include: Arkansas River 

Travel Management Plan Supplemental 

Rules process; BLM Renewable Energy 

Team; 2010 Spring and Fall Prescribed 

Burn Program, and the 2010 Fire Season 

Outlook; Manager updates on current 

land management issues that include; 

Park Center Well; American Recovery 

Reinvestment Act projects update; 

status of Over The River draft 

Environmental Impact Statement; and 

establishing the 2010 Front Range RAC 

meeting schedule. 

This meeting is open to the public. 

The public is encouraged to make oral 

comments to the Council at 9:30 a.m. or 

written statements may be submitted for 

the Council’s consideration. Depending 

on the number of persons wishing to 

comment and time available, the time 

for individual oral comments may be 

limited. Summary minutes for the 

Council Meeting will be maintained in 

the Royal Gorge Field Office and will be 

available for public inspection and 

reproduction during regular business 

hours within thirty (30) days following 

the meeting. Meeting minutes and 

agenda (10 days prior to each meeting) 

are also available at: http:// 

www.blm.gov/rac/co/frrac/co_fr.htm. 

Dated: March 26, 2010. 

Anna Marie Burden, 

Acting State Director. 

[FR Doc. 2010–7287 Filed 3–31–10; 8:45 am] 

BILLING CODE 4310–JB–P 

DEPARTMENT OF THE INTERIOR 

Bureau of Land Management 

[L58820000.PH0000.LXRSMA990000; HAG 

10–0198] 

Meeting Notice for the Medford District 

Resource Advisory Council 

AGENCY: Bureau of Land Management, 

Interior. 

ACTION: Meeting notice for the Medford 

District Resource Advisory Council. 

SUMMARY: Pursuant to the Federal Land 

Policy and Management Act and the 

Federal Advisory Committee Act, the 

U.S. Department of the Interior, Bureau 

of Land Management (BLM) Medford 

District Resource Advisory Council 

(Medford RAC) will meet as indicated 

below: 

DATES: The Medford RAC meeting will 

begin 8:30 a.m. PDT on April 21, 2010. 

ADDRESSES: The Medford RAC will meet 

at the Medford Interagency Office, 3040 

Biddle Road in Medford, Oregon. 

FOR FURTHER INFORMATION CONTACT: Jim 

Whittington, Medford District Public 

Affairs Officer, 3040 Biddle Road, 

Medford, OR 97504 or via phone at 541– 

618–2220 or via electronic mail at 

jim_whittington@blm.gov. 

SUPPLEMENTARY INFORMATION: The 

meeting agenda includes decisions on 

Title II project submissions and other 

matters as may reasonably come before 

the council. The public is welcome to 

attend all portions of the meeting and 

may make oral comments to the Council 

at 9:30 a.m. on April 21, 2010 at the 

meeting location. Those who verbally 

address the Medford RAC are asked to 

provide a written statement of their 

comments or presentation. Unless 

otherwise approved by the RAC Chair, 

the public comment period will last no 

longer than 30 minutes, and each 

speaker may address the RAC for a 

maximum of three minutes. If 

reasonable accommodation is required, 

please contact the BLM’s Medford 

District Public Affairs Officer at 541– 

618–2220 as soon as possible. 

Timothy B. Reuwsaat, 

District Manager, Medford District Office. 

[FR Doc. 2010–7376 Filed 3–31–10; 8:45 am] 

BILLING CODE 4310–33–P 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation Nos. 701–TA–384 and 731– 

TA–806–808 (Second Review)] 

Hot-Rolled Flat-Rolled Carbon-Quality 

Steel Products From Brazil, Japan, and 

Russia 

AGENCY: United States International 

Trade Commission. 

ACTION: Institution of five-year reviews 

concerning the countervailing duty 

order on certain hot-rolled flat-rolled 

carbon-quality steel products (‘‘hotrolled steel’’) from Brazil, the 

antidumping duty orders on hot-rolled 

steel from Brazil and Japan, and the 

suspended investigation on hot-rolled 

steel from Russia. 

SUMMARY: The Commission hereby gives 

notice that it has instituted reviews 

pursuant to section 751(c) of the Tariff 

Act of 1930 (19 U.S.C. 1675(c)) (the Act) 

to determine whether revocation of the 

countervailing duty order on hot-rolled 

steel from Brazil, the antidumping duty 

orders on hot-rolled steel from Brazil 

and Japan, and the suspended 

investigation on hot-rolled steel from 

Russia would be likely to lead to 

continuation or recurrence of material 

injury. Pursuant to section 751(c)(2) of 

the Act, interested parties are requested 

to respond to this notice by submitting 

the information specified below to the 

Commission; 1 to be assured of 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 75, No. 62 / Thursday, April 1, 2010 / Notices 16505 

consideration, the deadline for 

responses is May 3, 2010. Comments on 

the adequacy of responses may be filed 

with the Commission by June 14, 2010. 

For further information concerning the 

conduct of these reviews and rules of 

general application, consult the 

Commission’s Rules of Practice and 

Procedure, part 201, subparts A through 

E (19 CFR part 201), and part 207, 

subparts A, D, E, and F (19 CFR part 

207), as most recently amended at 74 FR 

2847 (January 16, 2009). 

DATES: Effective Date: April 1, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Mary Messer (202–205–3193), Office of 

Investigations, U.S. International Trade 

Commission, 500 E Street, SW., 

Washington, DC 20436. Hearingimpaired persons can obtain 

information on this matter by contacting 

the Commission’s TDD terminal on 202– 

205–1810. Persons with mobility 

impairments who will need special 

assistance in gaining access to the 

Commission should contact the Office 

of the Secretary at 202–205–2000. 

General information concerning the 

Commission may also be obtained by 

accessing its Internet server (http:// 

www.usitc.gov). The public record for 

these reviews may be viewed on the 

Commission’s electronic docket (EDIS) 

at http://edis.usitc.gov. 

SUPPLEMENTARY INFORMATION: 

Background. On June 29, 1999, the 

Department of Commerce (‘‘Commerce’’) 

issued an antidumping duty order on 

imports of hot-rolled steel from Japan 

(64 FR 34778). Effective July 6, 1999, 

Commerce suspended the antidumping 

and countervailing duty investigations 

on such imports from Brazil (64 FR 

38792 and 38797, July 19, 1999). Note: 

I switched the order here because the 

AD suspension is the one cited first. 

and, effective July 12, 1999, Commerce 

suspended the antidumping duty 

investigation on such imports from 

Russia (64 FR 38642, July 19, 1999). 

After terminating the suspension 

agreement with respect to the 

antidumping duty investigation on 

imports of hot-rolled steel from Brazil 

(67 FR 6226, February 11, 2002), 

Commerce issued an antidumping duty 

order on such imports (67 FR 11093, 

March 12, 2002). Effective September 

26, 2004, Commerce terminated the 

suspension agreement with respect to 

the countervailing duty investigation on 

imports of hot-rolled steel from Brazil 

and issued a countervailing duty order 

on such imports (69 FR 56040, 

September 17, 2004). Following fiveyear reviews by Commerce and the 

Commission, effective May 12, 2005, 

Commerce issued a continuation of the 

countervailing duty order on hot-rolled 

steel from Brazil (70 FR 30417, May 26, 

2005), the antidumping duty orders on 

hot-rolled steel from Brazil and Japan 

(70 FR 30413, May 26, 2005), and the 

suspended investigation on imports of 

hot-rolled steel from Russia (70 FR 

32571, June 3, 2005). The Commission 

is now conducting second reviews to 

determine whether revocation of the 

orders and termination of the suspended 

investigation would be likely to lead to 

continuation or recurrence of material 

injury to the domestic industry within 

a reasonably foreseeable time. It will 

assess the adequacy of interested party 

responses to this notice of institution to 

determine whether to conduct full or 

expedited reviews. The Commission’s 

determinations in any expedited 

reviews will be based on the facts 

available, which may include 

information provided in response to this 

notice. 

Definitions. The following definitions 

apply to these reviews: 

(1) Subject Merchandise is the class or 

kind of merchandise that is within the 

scope of the five-year reviews, as 

defined by Commerce. 

(2) The Subject Countries in these 

reviews are Brazil, Japan, and Russia. 

(3) The Domestic Like Product is the 

domestically produced product or 

products which are like, or in the 

absence of like, most similar in 

characteristics and uses with, the 

Subject Merchandise. In its original and 

full five-year review determinations, the 

Commission found one Domestic Like 

Product consisting of all hot-rolled steel, 

as defined in Commerce’s scope. 

(4) The Domestic Industry is the U.S. 

producers as a whole of the Domestic 

Like Product, or those producers whose 

collective output of the Domestic Like 

Product constitutes a major proportion 

of the total domestic production of the 

product. In its original and full five-year 

review determinations, the Commission 

defined the Domestic Industry as all 

producers of hot-rolled steel. 

(5) An Importer is any person or firm 

engaged, either directly or through a 

parent company or subsidiary, in 

importing the Subject Merchandise into 

the United States from a foreign 

manufacturer or through its selling 

agent. 

Participation in the reviews and 

public service list. Persons, including 

industrial users of the Subject 

Merchandise and, if the merchandise is 

sold at the retail level, representative 

consumer organizations, wishing to 

participate in the reviews as parties 

must file an entry of appearance with 

the Secretary to the Commission, as 

provided in section 201.11(b)(4) of the 

Commission’s rules, no later than 21 

days after publication of this notice in 

the Federal Register. The Secretary will 

maintain a public service list containing 

the names and addresses of all persons, 

or their representatives, who are parties 

to the reviews. 

Former Commission employees who 

are seeking to appear in Commission 

five-year reviews are advised that they 

may appear in a review even if they 

participated personally and 

substantially in the corresponding 

underlying original investigation. The 

Commission’s designated agency ethics 

official has advised that a five-year 

review is not considered the ‘‘same 

particular matter’’ as the corresponding 

underlying original investigation for 

purposes of 18 U.S.C. 207, the post 

employment statute for Federal 

employees, and Commission rule 

201.15(b)(19 CFR 201.15(b)), 73 FR 

24609 (May 5, 2008). This advice was 

developed in consultation with the 

Office of Government Ethics. 

Consequently, former employees are not 

required to seek Commission approval 

to appear in a review under Commission 

rule 19 CFR 201.15, even if the 

corresponding underlying original 

investigation was pending when they 

were Commission employees. For 

further ethics advice on this matter, 

contact Carol McCue Verratti, Deputy 

Agency Ethics Official, at 202–205– 

3088. 

Limited disclosure of business 

proprietary information (BPI) under an 

administrative protective order (APO) 

and APO service list. Pursuant to 

section 207.7(a) of the Commission’s 

rules, the Secretary will make BPI 

submitted in these reviews available to 

authorized applicants under the APO 

issued in the reviews, provided that the 

application is made no later than 21 

days after publication of this notice in 

the Federal Register. Authorized 

applicants must represent interested 

parties, as defined in 19 U.S.C. 1677(9), 

who are parties to the reviews. A 

separate service list will be maintained 

by the Secretary for those parties 

authorized to receive BPI under the 

APO. 

Certification. Pursuant to section 

207.3 of the Commission’s rules, any 

person submitting information to the 

Commission in connection with these 

reviews must certify that the 

information is accurate and complete to 

the best of the submitter’s knowledge. In 

making the certification, the submitter 

will be deemed to consent, unless 

otherwise specified, for the 

Commission, its employees, and 

contract personnel to use the 

information provided in any other 

mstockstill on DSKH9S0YB1PROD with NOTICES

16506 Federal Register / Vol. 75, No. 62 / Thursday, April 1, 2010 / Notices 

reviews or investigations of the same or 

comparable products which the 

Commission conducts under Title VII of 

the Act, or in internal audits and 

investigations relating to the programs 

and operations of the Commission 

pursuant to 5 U.S.C. Appendix 3. 

Written submissions. Pursuant to 

section 207.61 of the Commission’s 

rules, each interested party response to 

this notice must provide the information 

specified below. The deadline for filing 

such responses is May 3, 2010. Pursuant 

to section 207.62(b) of the Commission’s 

rules, eligible parties (as specified in 

Commission rule 207.62(b)(1)) may also 

file comments concerning the adequacy 

of responses to the notice of institution 

and whether the Commission should 

conduct expedited or full reviews. The 

deadline for filing such comments is 

June 14, 2010. All written submissions 

must conform with the provisions of 

sections 201.8 and 207.3 of the 

Commission’s rules and any 

submissions that contain BPI must also 

conform with the requirements of 

sections 201.6 and 207.7 of the 

Commission’s rules. The Commission’s 

rules do not authorize filing of 

submissions with the Secretary by 

facsimile or electronic means, except to 

the extent permitted by section 201.8 of 

the Commission’s rules, as amended, 67 

FR 68036 (November 8, 2002). Also, in 

accordance with sections 201.16(c) and 

207.3 of the Commission’s rules, each 

document filed by a party to the reviews 

must be served on all other parties to 

the reviews (as identified by either the 

public or APO service list as 

appropriate), and a certificate of service 

must accompany the document (if you 

are not a party to the reviews you do not 

need to serve your response). 

Inability to provide requested 

information. Pursuant to section 

207.61(c) of the Commission’s rules, any 

interested party that cannot furnish the 

information requested by this notice in 

the requested form and manner shall 

notify the Commission at the earliest 

possible time, provide a full explanation 

of why it cannot provide the requested 

information, and indicate alternative 

forms in which it can provide 

equivalent information. If an interested 

party does not provide this notification 

(or the Commission finds the 

explanation provided in the notification 

inadequate) and fails to provide a 

complete response to this notice, the 

Commission may take an adverse 

inference against the party pursuant to 

section 776(b) of the Act in making its 

determinations in the reviews. 

Information To Be Provided in 

Response to This Notice of Institution: If 

you are a domestic producer, union/ 

worker group, or trade/business 

association; import/export Subject 

Merchandise from more than one 

Subject Country; or produce Subject 

Merchandise in more than one Subject 

Country, you may file a single response. 

If you do so, please ensure that your 

response to each question includes the 

information requested for each pertinent 

Subject Country. As used below, the 

term ‘‘firm’’ includes any related firms. 

(1) The name and address of your firm 

or entity (including World Wide Web 

address) and name, telephone number, 

fax number, and E-mail address of the 

certifying official. 

(2) A statement indicating whether 

your firm/entity is a U.S. producer of 

the Domestic Like Product, a U.S. union 

or worker group, a U.S. importer of the 

Subject Merchandise, a foreign producer 

or exporter of the Subject Merchandise, 

a U.S. or foreign trade or business 

association, or another interested party 

(including an explanation). If you are a 

union/worker group or trade/business 

association, identify the firms in which 

your workers are employed or which are 

members of your association. 

(3) A statement indicating whether 

your firm/entity is willing to participate 

in these reviews by providing 

information requested by the 

Commission. 

(4) A statement of the likely effects of 

the revocation of the antidumping and 

countervailing duty orders and the 

termination of the suspended 

investigation on the Domestic Industry 

in general and/or your firm/entity 

specifically. In your response, please 

discuss the various factors specified in 

section 752(a) of the Act (19 U.S.C. 

1675a(a)) including the likely volume of 

subject imports, likely price effects of 

subject imports, and likely impact of 

imports of Subject Merchandise on the 

Domestic Industry. 

(5) A list of all known and currently 

operating U.S. producers of the 

Domestic Like Product. Identify any 

known related parties and the nature of 

the relationship as defined in section 

771(4)(B) of the Act (19 U.S.C. 

1677(4)(B)). 

(6) A list of all known and currently 

operating U.S. importers of the Subject 

Merchandise and producers of the 

Subject Merchandise in each Subject 

Country that currently export or have 

exported Subject Merchandise to the 

United States or other countries after 

2004. 

(7) A list of 3–5 leading purchasers in 

the U.S. market for the Domestic Like 

Product and the Subject Merchandise 

(including street address, World Wide 

Web address, and the name, telephone 

number, fax number, and E-mail address 

of a responsible official at each firm). 

(8) A list of known sources of 

information on national or regional 

prices for the Domestic Like Product or 

the Subject Merchandise in the U.S. or 

other markets. 

(9) If you are a U.S. producer of the 

Domestic Like Product, provide the 

following information on your firm’s 

operations on that product during 

calendar year 2009, except as noted 

(report quantity data in short tons and 

value data in U.S. dollars, f.o.b. plant). 

If you are a union/worker group or 

trade/business association, provide the 

information, on an aggregate basis, for 

the firms in which your workers are 

employed/which are members of your 

association. 

(a) Production (quantity) and, if 

known, an estimate of the percentage of 

total U.S. production of the Domestic 

Like Product accounted for by your 

firm’s(s’) production; 

(b) Capacity (quantity) of your firm to 

produce the Domestic Like Product (i.e., 

the level of production that your 

establishment(s) could reasonably have 

expected to attain during the year, 

assuming normal operating conditions 

(using equipment and machinery in 

place and ready to operate), normal 

operating levels (hours per week/weeks 

per year), time for downtime, 

maintenance, repair, and cleanup, and a 

typical or representative product mix); 

(c) the quantity and value of U.S. 

commercial shipments of the Domestic 

Like Product produced in your U.S. 

plant(s); and 

(d) the quantity and value of U.S. 

internal consumption/company 

transfers of the Domestic Like Product 

produced in your U.S. plant(s). 

(e) the value of (i) net sales, (ii) cost 

of goods sold (COGS), (iii) gross profit, 

(iv) selling, general and administrative 

(SG&A) expenses, and (v) operating 

income of the Domestic Like Product 

produced in your U.S. plant(s) (include 

both U.S. and export commercial sales, 

internal consumption, and company 

transfers) for your most recently 

completed fiscal year (identify the date 

on which your fiscal year ends). 

(10) If you are a U.S. importer or a 

trade/business association of U.S. 

importers of the Subject Merchandise 

from the Subject Country(ies), provide 

the following information on your 

firm’s(s’) operations on that product 

during calendar year 2009 (report 

quantity data in short tons and value 

data in U.S. dollars). If you are a trade/ 

business association, provide the 

information, on an aggregate basis, for 

the firms which are members of your 

association. 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 75, No. 62 / Thursday, April 1, 2010 / Notices 16507 

(a) The quantity and value (landed, 

duty-paid but not including 

antidumping or countervailing duties) 

of U.S. imports and, if known, an 

estimate of the percentage of total U.S. 

imports of Subject Merchandise from 

each Subject Country accounted for by 

your firm’s(s’) imports; 

(b) the quantity and value (f.o.b. U.S. 

port, including antidumping and/or 

countervailing duties) of U.S. 

commercial shipments of Subject 

Merchandise imported from each 

Subject Country; and 

(c) the quantity and value (f.o.b. U.S. 

port, including antidumping and/or 

countervailing duties) of U.S. internal 

consumption/company transfers of 

Subject Merchandise imported from 

each Subject Country. 

(11) If you are a producer, an exporter, 

or a trade/business association of 

producers or exporters of the Subject 

Merchandise in the Subject 

Country(ies), provide the following 

information on your firm’s(s’) 

operations on that product during 

calendar year 2009 (report quantity data 

in short tons and value data in U.S. 

dollars, landed and duty-paid at the 

U.S. port but not including antidumping 

or countervailing duties). If you are a 

trade/business association, provide the 

information, on an aggregate basis, for 

the firms which are members of your 

association. 

(a) Production (quantity) and, if 

known, an estimate of the percentage of 

total production of Subject Merchandise 

in each Subject Country accounted for 

by your firm’s(s’) production; and 

(b) Capacity (quantity) of your firm to 

produce the Subject Merchandise in 

each Subject Country (i.e., the level of 

production that your establishment(s) 

could reasonably have expected to 

attain during the year, assuming normal 

operating conditions (using equipment 

and machinery in place and ready to 

operate), normal operating levels (hours 

per week/weeks per year), time for 

downtime, maintenance, repair, and 

cleanup, and a typical or representative 

product mix); and 

(c) the quantity and value of your 

firm’s(s’) exports to the United States of 

Subject Merchandise and, if known, an 

estimate of the percentage of total 

exports to the United States of Subject 

Merchandise from each Subject Country 

accounted for by your firm’s(s’) exports. 

(12) Identify significant changes, if 

any, in the supply and demand 

conditions or business cycle for the 

Domestic Like Product that have 

occurred in the United States or in the 

market for the Subject Merchandise in 

the Subject Country(ies) after 2004, and 

significant changes, if any, that are 

likely to occur within a reasonably 

foreseeable time. Supply conditions to 

consider include technology; 

production methods; development 

efforts; ability to increase production 

(including the shift of production 

facilities used for other products and the 

use, cost, or availability of major inputs 

into production); and factors related to 

the ability to shift supply among 

different national markets (including 

barriers to importation in foreign 

markets or changes in market demand 

abroad). Demand conditions to consider 

include end uses and applications; the 

existence and availability of substitute 

products; and the level of competition 

among the Domestic Like Product 

produced in the United States, Subject 

Merchandise produced in the Subject 

Country(ies), and such merchandise 

from other countries. 

(13) (OPTIONAL) A statement of 

whether you agree with the above 

definitions of the Domestic Like Product 

and Domestic Industry; if you disagree 

with either or both of these definitions, 

please explain why and provide 

alternative definitions. 

Authority: These reviews are being 

conducted under authority of title VII of the 

Tariff Act of 1930; this notice is published 

pursuant to section 207.61 of the 

Commission’s rules. 

Issued: March 19, 2010. 

By order of the Commission. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. 2010–6623 Filed 3–31–10; 8:45 am] 

BILLING CODE 7020–02–P 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation No. 337–TA–661] 

In the Matter of Certain Semiconductor 

Chips Having Synchronous Dynamic 

Random Access Memory Controllers 

and Products Containing Same; Notice 

of Commission Determination To 

Review in Part an Initial Determination 

Finding Respondents in Violation of 

Section 337; Denial of Respondents’ 

Joint Motion To Extend Target Date; 

Schedule for Briefing on the Issues on 

Review and on Remedy, Public 

Interest, and Bonding 

AGENCY: U.S. International Trade 

Commission. 

ACTION: Notice. 

SUMMARY: Notice is hereby given that 

the U.S. International Trade 

Commission has determined to review 

in part the presiding administrative law 

judge’s (‘‘ALJ’’) Initial Determination on 

Violation of Section 337 (‘‘ID’’) and 

Recommended Determination on 

Remedy and Bond finding that 

Respondents violated section 337 of the 

Tariff Act of 1930 by importation into 

the United States, the sale for 

importation, or the sale within the 

United States after importation, of 

certain semiconductor chips having 

synchronous dynamic random access 

memory controllers and products 

containing same by reason of 

infringement of one or more claims of 

U.S. Patent Nos. 6,470,405 (‘‘the ’405 

patent’’), 6,591,353 (‘‘the ’353 patent’’), 

and 7,287,109 (‘‘the ’109 patent’’). 

FOR FURTHER INFORMATION CONTACT: Paul 

M. Bartkowski, Office of the General 

Counsel, U.S. International Trade 

Commission, 500 E Street, SW., 

Washington, DC 20436, telephone (202) 

708–5432. Copies of non-confidential 

documents filed in connection with this 

investigation are or will be available for 

inspection during official business 

hours (8:45 a.m. to 5:15 p.m.) in the 

Office of the Secretary, U.S. 

International Trade Commission, 500 E 

Street, SW., Washington, DC 20436, 

telephone (202) 205–2000. General 

information concerning the Commission 

may also be obtained by accessing its 

Internet server at http://www.usitc.gov. 

The public record for this investigation 

may be viewed on the Commission’s 

electronic docket (EDIS) at http:// 

edis.usitc.gov. Hearing-impaired 

persons are advised that information on 

this matter can be obtained by 

contacting the Commission’s TDD 

terminal on (202) 205–1810. 

SUPPLEMENTARY INFORMATION: The 

Commission instituted Inv. No. 337– 

TA–661 on December 10, 2008, based 

on a complaint filed by Rambus, Inc. of 

Los Altos, California (‘‘Rambus’’). 73 FR 

75131–2. The complaint, as amended 

and supplemented, alleges violations of 

section 337 of the Tariff Act of 1930, as 

amended, 19 U.S.C. 1337 (‘‘section 

337’’), in the importation into the United 

States, the sale for importation, and the 

sale within the United States after 

importation of certain electronic devices 

by reason of infringement of certain 

claims of the ’353 patent, the ’405 

patent, the ’109 patent, as well as 

certain claims of U.S. Patent Nos. 

7,117,998 (‘‘the ’998 patent); 7,210,016 

(‘‘the ’016 patent’’); 7,287,119 (‘‘the ’119 

patent’’); 7,330,952 (‘‘the ’952 patent’’); 

7,330,953 (‘‘the ’953 patent’’); and 

7,360,050 (‘‘the ’050 patent’’). The 

Commission’s notice of investigation 

named the following respondents: 

NVIDIA Corporation of Santa Clara, 

California; Asustek Computer, Inc. of 

Taipei, Taiwan; ASUS Computer 

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42782 Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Notices 

29. Glen Elder ID, Glen Elder Unit, 

P–SMBP, Kansas: Intent to enter into a 

contract for repayment of extraordinary 

maintenance work on the spillway 

structure in accordance with ARRA. 

30. Glen Elder ID, Glen Elder Unit, 

P–SMBP, Kansas: Amendment to extend 

the expiration date of the water service 

contract and renewal of long-term water 

service contract. 

31. State of Kansas Department of 

Wildlife and Parks, Glen Elder Unit, 

P–SMBP, Kansas: Reclamation is 

contemplating a contract for the 

remaining conservation storage in 

Waconda Lake. 

32. Arkansas Valley Conduit, 

Fryingpan-Arkansas Project, Colorado: 

Consideration of a repayment contract 

for the Arkansas Valley Conduit. 

33. North Havre County WD, Milk 

River Project, Montana: Reclamation is 

contemplating a contract amendment for 

a change in the point of delivery of a 

portion of the District’s water under 

contract. 

34. Milk River Irrigation Project Joint 

Board of Control, Milk River Project, 

Montana: Reclamation is contemplating 

a new contract for transferring O&M 

responsibilities of Fresno Dam and 

Reservoir and Nelson Dikes and 

Reservoir. 

35. State of Wyoming, Pathfinder Dam 

and Reservoir, North Platte Project, 

Wyoming: The State of Wyoming has 

requested a water service contract for 

water to be stored in Pathfinder 

Reservoir associated with the 

implementation of the Pathfinder 

Modification Project. 

36. Loup Valley’s Rural Public Power 

District, North Loup Division, P–SMBP, 

Nebraska: Proposed sale of 

Reclamation’s share in joint-owned 

power line to the co-owner of the line. 

37. Northern Colorado Water 

Conservancy District, Colorado Big 

Thompson Project, Colorado: Intent to 

enter into a contract for repayment of 

extraordinary maintenance work on the 

Pole Hill Canal in accordance with 

ARRA. 

38. Frenchman Valley ID, FrenchmanCambridge Division, P–SMBP, Nebraska: 

Consideration of a request for a 

repayment of extraordinary 

maintenance work on stilling basin 

outlet works at Enders Dam, in 

accordance with Subtitle G of Public 

Law 111–11. 

39. H & RW ID, FrenchmanCambridge Division, P–SMBP, Nebraska: 

Consideration of a request for a 

repayment contract for outlet works 

modification at Enders Dam, in 

accordance with the Omnibus Public 

Lands Management Act of 2009. 

40. Individual irrigators, Cambridge 

Unit, Frenchman-Cambridge Division, 

P–SMBP, Nebraska: Consideration of a 

request for a long-term excess capacity 

conveyance contract for transporting 

nonproject irrigation water. 

41. Southeastern Colorado Water 

Conservancy District, FryingpanArkansas Project, Colorado: 

Consideration of a request to amend the 

existing water service contract to adjust 

the annual project water payments. 

42. Scotty Phillip Cemetery, MniWiconi Project, South Dakota: 

Consideration of a new long-term M&I 

water service contract. 

43. Barretts Minerals, East Bench 

Unit, P–SMBP, Montana: Renewal of 

long-term water service contract. 

44. George A. Stevens, Lower Marias 

Unit, P–SMBP, Montana: Renewal of 

long-term water service contract. 

45. Northern Colorado Water 

Conservancy District, Colorado Big 

Thompson Project, Colorado: Amend or 

supplement the repayment contract to 

include the Carter Lake Dam Additional 

Outlet Works and Flatiron Power Plant 

Bypass facilities. 

46. Colorado Springs Utilities, 

Fryingpan-Arkansas Project, Colorado: 

Consideration of a request for a longterm contract for the use of excess 

capacity in the Fryingpan-Arkansas 

Project and annual repayment for the 

operation, maintenance, and 

replacement costs of the single-purpose 

municipal works. 

47. Garrison Diversion Conservancy 

District, Garrison Diversion Project, 

North Dakota: Intent to enter into 

temporary or interim irrigation or 

miscellaneous use water service 

contracts to provide up to 1,000 acrefeet of water annually for terms of up to 

5 years. 

48. Garrison Diversion Conservancy 

District, Garrison Diversion Unit, P– 

SMBP, North Dakota: Intent to enter 

into a project pumping power contract 

with the District to pump project water 

to authorized areas in conformance with 

the Dakota Water Resources Act of 2000. 

The following actions have been 

completed since the last publication of 

this notice on November 26, 2009: 

1. (27) Individual Irrigations, Lower 

Marias Unit, P–SMBP, Montana: 

Execute long-term water service 

contracts for commercial irrigation from 

Lake Elwell and the Marias River below 

Tiber Dam. Contract was executed on 

December 4, 2009. 

2. (42) Individual contractors; Canyon 

Ferry Unit, P–SMBP; Montana: Replace 

temporary 1-year contracts with shortterm water service contracts for minor 

amounts of less than 1,000 acre-feet of 

M&I water annually from the Missouri 

River, Canyon Ferry Dam. Contract was 

executed on December 4, 2009. 

3. (43) Keyhole Country Club; Keyhole 

Unit, P–SMBP; South Dakota: 

Reclamation is contemplating a contract 

reassignment from the Shattuck Hills 

Homeowner’s Association to the 

Keyhole Country Club. The proposed 

action will involve a change in the point 

of delivery for the 50 acre-feet of water 

under the existing contract. Contract 

was executed on November 16, 2009. 

4. (47) Rocky Mountain National Park, 

Colorado—Big Thompson Project, 

Colorado: Amendment to the existing 

memorandum of understanding for 

project water. Contract was executed on 

October 20, 2009. 

5. (49) Mirage Flats ID, Mirage Flats 

Project, Nebraska: Request to amend 

contract to change billing date from May 

to July. Contract was executed on 

October 30, 2009. 

Dated: June 11, 2010. 

Roseann Gonzales, 

Director, Policy and Administration, Denver 

Office. 

[FR Doc. 2010–17933 Filed 7–21–10; 8:45 am] 

BILLING CODE 4310–MN–P 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation Nos. 701–TA–384 and 731– 

TA–806–808 (Second Review)] 

Hot-Rolled Flat-Rolled Carbon-Quality 

Steel Products From Brazil, Japan, and 

Russia 

AGENCY: United States International 

Trade Commission. 

ACTION: Notice of Commission 

determinations to conduct full five-year 

reviews concerning the countervailing 

duty order on certain hot-rolled flatrolled carbon-quality steel products 

(‘‘hot-rolled steel’’) from Brazil, the 

antidumping duty orders on hot-rolled 

steel from Brazil and Japan, and the 

suspended investigation on hot-rolled 

steel from Russia. 

SUMMARY: The Commission hereby gives 

notice that it will proceed with full 

reviews pursuant to section 751(c)(5) of 

the Tariff Act of 1930 (19 U.S.C. 

1675(c)(5)) to determine whether 

revocation of the countervailing duty 

order on hot-rolled steel from Brazil, the 

antidumping duty orders on hot-rolled 

steel from Brazil and Japan, and the 

suspended investigation on hot-rolled 

steel from Russia would be likely to lead 

to continuation or recurrence of material 

injury within a reasonably foreseeable 

time. A schedule for the reviews will be 

established and announced at a later 


sroberts on DSKD5P82C1PROD with NOTICES
Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Notices 42783 

1The record is defined in sec. 207.2(f) of the 

Commission’s Rules of Practice and Procedure (19 

CFR 207.2(f)). 

2The Commission unanimously determined that 

there was no reasonable indication that an industry 

in the United States was materially injured or 

threatened with material injury by reason of subject 

imports of STPP from China alleged to be sold at 

less than fair value and subsidized by the 

Government of China. Certain Sodium and 

Potassium Phosphate Salts from China: 

Determinations, 74 FR 61173, November 23, 2009. 

date. For further information concerning 

the conduct of these reviews and rules 

of general application, consult the 

Commission’s Rules of Practice and 

Procedure, part 201, subparts A through 

E (19 CFR part 201), and part 207, 

subparts A, D, E, and F (19 CFR part 

207). 

DATES: Effective Date: July 6, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Mary Messer (202–205–3193), Office of 

Investigations, U.S. International Trade 

Commission, 500 E Street, SW., 

Washington, DC 20436. Hearingimpaired persons can obtain 

information on this matter by contacting 

the Commission’s TDD terminal on 202– 

205–1810. Persons with mobility 

impairments who will need special 

assistance in gaining access to the 

Commission should contact the Office 

of the Secretary at 202–205–2000. 

General information concerning the 

Commission may also be obtained by 

accessing its Internet server (http:// 

www.usitc.gov). The public record for 

these reviews may be viewed on the 

Commission’s electronic docket (EDIS) 

at http://edis.usitc.gov. 

SUPPLEMENTARY INFORMATION: On July 6, 

2010, the Commission determined that 

it should proceed to full reviews in the 

subject five-year reviews pursuant to 

section 751(c)(5) of the Act. The 

Commission found that with respect to 

each of the subject reviews both the 

domestic and respondent interested 

party group responses to its notice of 

institution (75 FR 16504, April 1, 2010) 

were adequate. A record of the 

Commissioners’ votes, the 

Commission’s statement on adequacy, 

and any individual Commissioner’s 

statements will be available from the 

Office of the Secretary and at the 

Commission’s Web site. 

Authority: These reviews are being 

conducted under authority of title VII of the 

Tariff Act of 1930; this notice is published 

pursuant to section 207.62 of the 

Commission’s rules. 

By order of the Commission. 

Issued: July 15, 2010. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. 2010–17857 Filed 7–21–10; 8:45 am] 

BILLING CODE 7020–02–P 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation Nos. 701–TA–473 and 731– 

TA–1173 (Final)] 

Certain Potassium Phosphate Salts 

From China 

Determinations 

On the basis of the record 1 developed 

in the subject investigations, the United 

States International Trade Commission 

(Commission) determines, pursuant to 

sections 735(b) and 705(b) of the Tariff 

Act of 1930 (19 U.S.C. 1671d(b) and 

1673d(b)) (the Act), that an industry in 

the United States is materially injured 

by reason of imports from China of 

certain potassium phosphate salts, 

specifically anhydrous dipotassium 

phosphate (‘‘DKP’’) and tetrapotassium 

pyrophosphate (‘‘TKPP’’), provided for 

in subheadings 2835.24.00 (DKP) and 

2835.39.10 (TKPP) of the Harmonized 

Tariff Schedule of the United States, 

that have been found by the Department 

of Commerce (Commerce) to be sold in 

the United States at less than fair value 

(LTFV) and subsidized by the 

Government of China. 

The Commission also determines that 

an industry producing anhydrous 

monopotassium phosphate (‘‘MKP’’), 

provided for in subheading 2835.24.00 

of the Harmonized Tariff Schedule of 

the United States, is not materially 

injured or threatened with material 

injury, nor that the establishment of an 

industry is materially retarded, by 

reason of imports from China, that have 

been found by Commerce to be sold in 

the United States at LTFV and 

subsidized by the Government of China. 

Background 

On September 24, 2009, a petition 

was filed with the Commission and 

Commerce by ICL Performance Products 

LP, St. Louis, MO, and Prayon, Inc., 

Augusta, GA, alleging that an industry 

in the United States is materially 

injured or threatened with material 

injury by reason of LTFV and 

subsidized imports of DKP, MKP, 

sodium tripolyphosphate (‘‘STPP’’), and 

TKPP from China.2 The final phase of 

the investigations was scheduled by the 

Commission following notification of a 

preliminary determination by 

Commerce that imports of DKP, MKP, 

and TKPP from China were being sold 

at LTFV and subsidized within the 

meaning of sections 733(b) and 703(b) of 

the Act (19 U.S.C. § 1671b(b)). Notice of 

the scheduling of the final phase of the 

Commission’s investigations and of a 

public hearing 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 April 1, 2010 (Certain 

Potassium Phosphate Salts from China, 

75 FR 16509). The hearing was held in 

Washington, DC, on June 2, 2010, and 

all persons who requested the 

opportunity were permitted to appear in 

person or by counsel. 

The Commission transmitted its 

determination in these investigations to 

the Secretary of Commerce on July 15, 

2010. The views of the Commission are 

contained in USITC Publication 4171 

(July 2010), entitled Certain Potassium 

Phosphate Salts From China: 

Investigation Nos. 701–TA–473 and 

731–TA–1173 (Final). 

By order of the Commission. 

Issued: July 15, 2010. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. 2010–17863 Filed 7–21–10; 8:45 am] 

BILLING CODE 7020–02–P 

INTERNATIONAL TRADE 

COMMISSION 

Notice of Receipt of Complaint; 

Solicitation of Comments Relating to 

the Public Interest 

AGENCY: U.S. International Trade 

Commission. 

ACTION: Notice. 

SUMMARY: Notice is hereby given that 

the U.S. International Trade 

Commission has received a complaint 

entitled ‘‘In Re Certain Flat Panel Digital 

Televisions and Components Thereof’’; 

the Commission is soliciting comments 

on any public interest issues raised by 

the complaint. 

FOR FURTHER INFORMATION CONTACT: 

Marilyn R. Abbott, Secretary to the 

Commission, U.S. International Trade 

Commission, 500 E Street, SW., 

Washington, DC 20436, telephone (202) 

205–2000. The public version of the 

complaint can be accessed on the 

Commission’s electronic docket (EDIS) 

at http://edis.usitc.gov, and will be 

available for inspection during official 

business hours (8:45 a.m. to 5:15 p.m.) 

in the Office of the Secretary, U.S. 


sroberts on DSKD5P82C1PROD with NOTICES
62566 Federal Register / Vol. 75, No. 196 / Tuesday, October 12, 2010 / Notices 

refer to the docket number (‘‘Docket No. 

2759’’) in a prominent place on the 

cover page and/or the first page. The 

Commission’s rules authorize filing 

submissions with the Secretary by 

facsimile or electronic means only to the 

extent permitted by section 201.8 of the 

rules (see Handbook for Electronic 

Filing Procedures, http://www.usitc.gov/ 

secretary/fed_reg_notices/rules/ 

documents/ 

handbook_on_electronic_filing.pdf ). 

Persons with questions regarding 

electronic filing should contact the 

Secretary (202–205–2000). 

Any person desiring to submit a 

document to the Commission in 

confidence must request confidential 

treatment. All such requests should be 

directed to the Secretary to the 

Commission and must include a full 

statement of the reasons why the 

Commission should grant such 

treatment. See 19 CFR 201.6. Documents 

for which confidential treatment by the 

Commission is properly sought will be 

treated accordingly. All nonconfidential 

written submissions will be available for 

public inspection at the Office of the 

Secretary. 

This action is taken under the 

authority of section 337 of the Tariff Act 

of 1930, as amended (19 U.S.C. 1337), 

and of sections 201.10 and 210.50(a)(4) 

of the Commission’s Rules of Practice 

and Procedure (19 CFR 201.10, 

210.50(a)(4)). 

Issued: October 6, 2010. 

By order of the Commission. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. 2010–25547 Filed 10–8–10; 8:45 am] 

BILLING CODE 7020–02–P 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation Nos. 701–TA–384 and 731– 

TA–806–808 (Second Review)] 

Hot-Rolled Flat-Rolled Carbon-Quality 

Steel Products From Brazil, Japan, and 

Russia 

AGENCY: United States International 

Trade Commission. 

ACTION: Scheduling of full five-year 

reviews concerning the countervailing 

duty order on hot-rolled flat-rolled 

carbon-quality steel products (‘‘hotrolled steel’’) from Brazil, the 

antidumping duty orders on hot-rolled 

steel from Brazil and Japan, and the 

suspended antidumping duty 

investigation on hot-rolled steel from 

Russia. 

SUMMARY: The Commission hereby gives 

notice of the scheduling of full reviews 

pursuant to section 751(c)(5) of the 

Tariff Act of 1930 (19 U.S.C. 1675(c)(5)) 

(the Act) to determine whether 

revocation of the countervailing duty 

order on hot-rolled steel from Brazil, the 

antidumping duty orders on hot-rolled 

steel from Brazil and Japan, and/or the 

suspended investigation on hot-rolled 

steel from Russia would be likely to lead 

to continuation or recurrence of material 

injury within a reasonably foreseeable 

time. The Commission has determined 

that these reviews are extraordinarily 

complicated, and will therefore exercise 

its authority to extend the review period 

by up to 90 days pursuant to 19 U.S.C. 

1675(c)(5)(B). For further information 

concerning the conduct of these reviews 

and rules of general application, consult 

the Commission’s Rules of Practice and 

Procedure, part 201, subparts A through 

E (19 CFR part 201), and part 207, 

subparts A, D, E, and F (19 CFR part 

207). 

DATES: Effective Date: October 1, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Joshua Kaplan (202–205–3184), Office 

of Investigations, U.S. International 

Trade Commission, 500 E Street, SW., 

Washington, DC 20436. Hearingimpaired persons can obtain 

information on this matter by contacting 

the Commission’s TDD terminal on 202– 

205–1810. Persons with mobility 

impairments who will need special 

assistance in gaining access to the 

Commission should contact the Office 

of the Secretary at 202–205–2000. 

General information concerning the 

Commission may also be obtained by 

accessing its Internet server (http:// 

www.usitc.gov). The public record for 

these reviews may be viewed on the 

Commission’s electronic docket (EDIS) 

at http://edis.usitc.gov. 

SUPPLEMENTARY INFORMATION: 

Background. On July 6, 2010, the 

Commission determined that responses 

to its notice of institution of the subject 

five-year reviews were such that full 

reviews pursuant to section 751(c)(5) of 

the Act should proceed (75 FR 42782, 

July 22, 2010). A record of the 

Commissioners’ votes, the 

Commission’s statement on adequacy, 

and any individual Commissioner’s 

statements are available from the Office 

of the Secretary and at the 

Commission’s Web site. 

Participation in the reviews and 

public service list. Persons, including 

industrial users of the subject 

merchandise and, if the merchandise is 

sold at the retail level, representative 

consumer organizations, wishing to 

participate in these reviews as parties 

must file an entry of appearance with 

the Secretary to the Commission, as 

provided in section 201.11 of the 

Commission’s rules, by 45 days after 

publication of this notice. A party that 

filed a notice of appearance following 

publication of the Commission’s notice 

of institution of the reviews need not 

file an additional notice of appearance. 

The Secretary will maintain a public 

service list containing the names and 

addresses of all persons, or their 

representatives, who are parties to the 

reviews. 

Limited disclosure of business 

proprietary information (BPI) under an 

administrative protective order (APO) 

and BPI service list. Pursuant to section 

207.7(a) of the Commission’s rules, the 

Secretary will make BPI gathered in 

these reviews available to authorized 

applicants under the APO issued in the 

reviews, provided that the application is 

made by 45 days after publication of 

this notice. Authorized applicants must 

represent interested parties, as defined 

by 19 U.S.C. 1677(9), who are parties to 

the reviews. A party granted access to 

BPI following publication of the 

Commission’s notice of institution of 

the reviews need not reapply for such 

access. A separate service list will be 

maintained by the Secretary for those 

parties authorized to receive BPI under 

the APO. 

Staff report. The prehearing staff 

report in the reviews will be placed in 

the nonpublic record on March 17, 

2011, and a public version will be 

issued thereafter, pursuant to section 

207.64 of the Commission’s rules. 

Hearing. The Commission will hold a 

hearing in connection with the reviews 

beginning at 9:30 a.m. on April 6, 2011, 

at the U.S. International Trade 

Commission Building. Requests to 

appear at the hearing should be filed in 

writing with the Secretary to the 

Commission on or before March 29, 

2011. A nonparty who has testimony 

that may aid the Commission’s 

deliberations may request permission to 

present a short statement at the hearing. 

All parties and nonparties desiring to 

appear at the hearing and make oral 

presentations should attend a 

prehearing conference to be held at 9:30 

a.m. on April 1, 2011, at the U.S. 

International Trade Commission 

Building. Oral testimony and written 

materials to be submitted at the public 

hearing are governed by sections 

201.6(b)(2), 201.13(f), 207.24, and 

207.66 of the Commission’s rules. 

Parties must submit any request to 

present a portion of their hearing 

testimony in camera no later than 7 

business days prior to the date of the 

hearing. 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 196 / Tuesday, October 12, 2010 / Notices 62567 

Written submissions. Each party to the 

reviews may submit a prehearing brief 

to the Commission. Prehearing briefs 

must conform with the provisions of 

section 207.65 of the Commission’s 

rules; the deadline for filing is March 

28, 2011. Parties may also file written 

testimony in connection with their 

presentation at the hearing, as provided 

in section 207.24 of the Commission’s 

rules, and posthearing briefs, which 

must conform with the provisions of 

section 207.67 of the Commission’s 

rules. The deadline for filing 

posthearing briefs is April 15, 2011; 

witness testimony must be filed no later 

than three days before the hearing. In 

addition, any person who has not 

entered an appearance as a party to the 

reviews may submit a written statement 

of information pertinent to the subject of 

the reviews on or before April 15, 2011. 

On May 11, 2011, the Commission will 

make available to parties all information 

on which they have not had an 

opportunity to comment. Parties may 

submit final comments on this 

information on or before May 13, 2011, 

but such final comments must not 

contain new factual information and 

must otherwise comply with section 

207.68 of the Commission’s rules. All 

written submissions must conform with 

the provisions of section 201.8 of the 

Commission’s rules; any submissions 

that contain BPI must also conform with 

the requirements of sections 201.6, 

207.3, and 207.7 of the Commission’s 

rules. The Commission’s rules do not 

authorize filing of submissions with the 

Secretary by facsimile or electronic 

means, except to the extent permitted by 

section 201.8 of the Commission’s rules, 

as amended, 67 FR 68036 (November 8, 

2002). Even where electronic filing of a 

document is permitted, certain 

documents must also be filed in paper 

form, as specified in II (C) of the 

Commission’s Handbook on Electronic 

Filing Procedures, 67 FR 68168, 68173 

(November 8, 2002). 

Additional written submissions to the 

Commission, including requests 

pursuant to section 201.12 of the 

Commission’s rules, shall not be 

accepted unless good cause is shown for 

accepting such submissions, or unless 

the submission is pursuant to a specific 

request by a Commissioner or 

Commission staff. 

In accordance with sections 201.16(c) 

and 207.3 of the Commission’s rules, 

each document filed by a party to the 

reviews must be served on all other 

parties to the reviews (as identified by 

either the public or BPI service list), and 

a certificate of service must be timely 

filed. The Secretary will not accept a 

document for filing without a certificate 

of service. 

Authority: These reviews are being 

conducted under authority of title VII of the 

Tariff Act of 1930; this notice is published 

pursuant to section 207.62 of the 

Commission’s rules. 

Issued: October 6, 2010. 

By order of the Commission. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. 2010–25551 Filed 10–8–10; 8:45 am] 

BILLING CODE 7020–02–P 

DEPARTMENT OF JUSTICE 

Notice of Lodging of Consent Decree 

Under the Clean Air Act 

Notice is hereby given that on 

September 30, 2010, a proposed Consent 

Decree in United States v. BP Products 

North America Inc, (Civil No. 4:10-cv3569), was lodged with the United 

States District Court for the Southern 

District of Texas. 

This settlement relates to BP Products 

North America Inc.’s (‘‘BP Products’’) 

petroleum refinery located in Texas 

City, Texas (the ‘‘Texas City Refinery’’). 

The United States alleges civil claims 

against BP Products for violations at the 

Texas City Refinery of Clean Air Act 

(‘‘CAA’’) Section 112(r) and the 

Chemical Accident Prevention 

Provisions promulgated at 40 CFR part 

68. The United States’ CAA claims, 

which are stated in a Complaint also 

filed on September 30, 2010 in the 

above-referenced matter, arise from 

three events—two fires and a leak of 

regulated substances—at the Texas City 

Refinery. The Complaint also alleges 

violations of Part 68 reporting 

requirements. 

Under the proposed Consent Decree, 

BP Products will pay a civil penalty to 

the United States in the amount of $15 

million. The Consent Decree also 

requires BP Products to regularly report 

to EPA on indicators of process safety at 

the Texas City Refinery, including: (1) 

The status of equipment inspections, (2) 

whether operations employees have 

received process safety training, and (3) 

whether additional accidental releases 

of regulated substances have occurred at 

the Texas City Refinery. 

The Department of Justice will receive 

comments relating to the Consent 

Decree for a period of thirty (30) days 

from the date of this publication. 

Comments should be addressed to the 

Assistant Attorney General, 

Environment and Natural Resources 

Division, and either e-mailed to 

pubcomment-ees.enrd@usdoj.gov or 

mailed to P.O. Box 7611, U.S. 

Department of Justice, Washington, DC 

20044–7611, and should refer to United 

States v. BP Products North America 

Inc., Civil Action No. 4:10-cv-3569 (S.D. 

Tex.), and D.J. Ref. 90–5–2–1–08741. 

The Consent Decree may be examined 

at the Office of the United States 

Attorney, Southern District of Texas, 

919 Milam, Suite 1500, Houston, TX 

77208 and at U.S. EPA Region 6, 1445 

Ross Avenue, Dallas, Texas 75202. 

During the public comment period, the 

Consent Decree may also be examined 

on the following Department of Justice 

Web site: http://www.usdoj.gov/enrd/ 

Consent_Decrees.html. A copy of the 

Consent Decree may also be obtained by 

mail from the Consent Decree Library, 

P.O. Box 7611, U.S. Department of 

Justice, Washington, DC 20044–7611 or 

by faxing or e-mailing a request to Tonia 

Fleetwood (tonia.fleetwood@usdoj.gov), 

fax no. (202) 514–0097, phone 

confirmation number (202) 514–1547. In 

requesting a copy by mail, from the 

Consent Decree Library, please enclose 

a check in the amount of $8.50 (25 cents 

per page reproduction cost) for the 

Consent Decree payable to the U.S. 

Treasury. 

Maureen L. Katz, 

Assistant Chief, Environmental Enforcement 

Section, Environment and Natural Resources 

Division. 

[FR Doc. 2010–25520 Filed 10–8–10; 8:45 am] 

BILLING CODE 4410–15–P 

DEPARTMENT OF JUSTICE 

Notice of Lodging of Settlement 

Agreement 

Notice is hereby given that on October 

5, 2010, a proposed settlement 

agreement in United States v. Sunoco, 

Inc., et al., Civil Action No. 05–6336, 

was lodged with the United States 

District Court for the Eastern District of 

Pennsylvania. 

In this action the United States 

sought, under the Pennsylvania Uniform 

Contribution Among Tortfeasors Act, 42 

Pa. Cons. Stat. Ann. §§ 8321–27, and the 

Pennsylvania Storage Tank and Spill 

Prevention Act, 35 Pa. Stat. Ann. 

§§ 6021.101–.2104, the recovery of 

environmental cleanup costs incurred 

by the United States at the former 

Defense Supply Center Philadelphia 

(‘‘DSCP’’) property located at 2800 South 

20th Street in Philadelphia, 

Pennsylvania. The United States also 

alleged—and sought an order under the 

Pennsylvania Clean Streams Law, 35 Pa. 

Stat. Ann. §§ 691.1–.1001, directing the 

defendants to abate—ongoing migration 

of petroleum hydrocarbons from a 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 150 / Thursday, August 5, 2010 / Notices 47263 

1See Initiation of Five-Year (‘‘Sunset’’) Review, 75 

FR 16437 (April 1, 2010) (Notice of Initiation). 

the Federal Register on February 26, 

2010. See 75 FR 8919. 

Under the CZMA, the Secretary must 

close the decision record in an appeal 

160 days after the notice of appeal is 

published in the Federal Register. 16 

U.S.C. 1465. The CZMA, however, 

authorizes the Secretary to stay closing 

of the decision record for up to 60 days 

when the Secretary determines it is 

necessary to receive, on an expedited 

basis, any supplemental information 

specifically requested by the Secretary 

to complete consistency review. 16 

U.S.C. 1465(b)(3). 

After reviewing the decision record 

developed to date, the Secretary has 

determined that supplemental and 

clarifying information needs to be 

requested in order to complete 

consistency review. In order to allow 

receipt of this information, the Secretary 

hereby stays closure of the decision 

record until October 4, 2010. 

Additional information on this appeal 

is available at the NOAA, Office of 

General Counsel for Ocean Services, 

1305 East-West Highway, Room 6111, 

Silver Spring, MD 20910 and on the 

following Web site: http:// 

www.ogc.doc.gov/czma.htm. 

[Federal Domestic Assistance Catalog No. 

11.419 Coastal Zone Management Program 

Assistance.] 

Dated: August 2, 2010. 

Joel La Bissonniere, 

Assistant General Counsel for Ocean Services, 

NOAA. 

[FR Doc. 2010–19297 Filed 8–4–10; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–821–809] 

Certain Hot-Rolled Flat-Rolled CarbonQuality Steel Products From the 

Russian Federation; Final Results of 

the Expedited Sunset Review of 

Antidumping Duty Suspended 

Investigation 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

ACTION: Notice of expedited sunset 

review of the antidumping duty 

suspended investigation on certain hotrolled flat-rolled carbon-quality steel 

products from the Russian Federation; 

final results. 

SUMMARY: On April 1, 2010, the 

Department of Commerce (‘‘the 

Department’’) initiated a sunset review 

of the antidumping duty suspended 

antidumping duty investigation of 

certain hot-rolled flat-rolled carbonquality steel products (‘‘hot-rolled steel’’) 

from the Russian Federation (‘‘Russia’’).1

On the basis of the notice of intent to 

participate, an adequate substantive 

response submitted on behalf of the 

domestic interested parties, and no 

participation from respondent interested 

parties, the Department conducted an 

expedited sunset review of the 

suspended antidumping duty 

investigation pursuant to section 

751(c)(3)(B) of the Act and section 

351.218(e)(1)(ii)(C) of the Department’s 

regulations. As a result of this sunset 

review, the Department determined that 

termination of the antidumping duty 

suspended investigation would likely 

lead to continuation or recurrence of 

dumping at the levels listed below in 

the section entitled ‘‘Final Results of 

Review.’’ 

DATES: Effective Date: August 5, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Anne D’Alauro or Sally C. Gannon, 

Office of Policy, Import Administration, 

International Trade Administration, 

U.S. Department of Commerce, 14th 

Street & Constitution Avenue, NW., 

Washington DC 20230; telephone: 202– 

482–4830 or 202–482–0162, 

respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On April 1, 2010, the Department 

initiated a sunset review of the 

suspended antidumping duty 

investigation on hot-rolled steel from 

Russia in accordance with section 

751(c) of the Tariff Act of 1930, as 

amended (‘‘the Act’’). See Notice of 

Initiation, 75 FR 16437 (2010). Section 

351.218(d)(1)(i) of the Department’s 

regulations provides domestic interested 

parties opportunity to file a Notice of 

Intent to Participate in a Sunset Review 

within 15 days of initiation of review. 

The Department received notices of 

intent to participate within the 

applicable deadline specified in section 

351.218(d)(1)(i) of the Department’s 

regulations on behalf of Nucor 

Corporation, United States Steel 

Corporation, Gallatin Steel, SSAB North 

America Division, ArcelorMittal USA, 

Inc., and Steel Dynamics, Inc. 

(collectively ‘‘domestic interested 

parties’’). The domestic interested 

parties claimed interested-party status 

as producers of subject merchandise in 

the United States as defined by section 

771(9)(C) of the Act. In addition, 

domestic interested parties assert that 

they are not related to a foreign 

producer/exporter and are not 

importers, or related to importers, of the 

subject merchandise. 

The Department’s regulations at 

section 351.218(d)(3)(i) state that all 

interested parties participating in a 

sunset review must submit a complete 

substantive response to a Notice of 

Initiation within 30 days of initiation of 

the sunset review. On May 3, 2010, the 

Department received a complete 

substantive response from the domestic 

interested parties within the 30-day 

deadline specified in the Department’s 

regulations under section 

351.218(d)(3)(i). After examining the 

substantive response from the domestic 

interested parties, on May 21, 2010, the 

Department determined that the 

response was adequate, consistent with 

the requirements of 19 CFR 351.218(e). 

See Memorandum from Anne D’Alauro, 

Senior Policy Analyst, Office of Policy, 

Import Administration, to Sally C. 

Gannon, Director for Bilateral 

Agreements, Office of Policy, Import 

Administration, regarding ‘‘Sunset 

Review of the Agreement Suspending 

the Antidumping Investigation of 

Certain Hot-Rolled Flat-Rolled CarbonQuality Steel Products from the Russian 

Federation: Adequacy Determination’’ 

(May 14, 2010). See also Letter from 

Barbara E. Tillman, Director, Office 6, 

AD/CVD Operations, Import 

Administration, to Ms. Catherine 

DeFilippo, Director, Office of 

Investigations, International Trade 

Commission (May 21, 2010). Although 

the Department received a letter of 

appearance on behalf of the Russian 

Ministry of Economic Development, the 

Department did not receive any notices 

of intent to participate or substantive 

responses from respondent interested 

parties to this proceeding. As a result, 

pursuant to section 751(c)(3)(B) of the 

Act and section 351.218(e)(1)(ii)(C)(2) of 

the Department’s regulations, the 

Department conducted an expedited 

(120-day), sunset review of this 

antidumping duty suspended 

investigation. 

Scope of the Suspended Investigation 

See Appendix 1. 

Analysis of Comments Received 

All issues raised in this sunset review 

are addressed in the ‘‘Issues and 

Decision Memorandum’’ (‘‘Decision 

Memo’’) from Paul Piquado, Deputy 

Assistant Secretary for Policy and 

Negotiations, Import Administration, to 

Ronald Lorentzen, Deputy Assistant 

Secretary for Import Administration, 

dated July 30, 2010, which is hereby 

adopted by this notice. The issues 

mstockstill on DSKH9S0YB1PROD with NOTICES

47264 Federal Register / Vol. 75, No. 150 / Thursday, August 5, 2010 / Notices 

discussed in the Decision Memo include 

both the likely effects of termination of 

the suspension agreement and 

underlying investigation and the 

magnitude of the margin likely to 

prevail if the suspended investigation 

were terminated. Parties can find a 

complete discussion of all issues raised 

in this sunset review and the 

corresponding recommendations in this 

public memo, which is on file in room 

1117 of the main Commerce Building. 

In addition, a complete version of the 

Decision Memo can be accessed directly 

on the Web at http://ia.ita.doc.gov/frn, 

under the heading ‘‘August 2010’’. The 

paper copy and electronic version of the 

Decision Memo are identical in content. 

Final Results of Review 

The Department determines that 

termination of the suspended 

antidumping duty investigation on hotrolled steel from Russia would be likely 

to lead to continuation or recurrence of 

dumping at the following weightedaverage margins: 

Manufacturers/producers/ 

exporters 

Weightedaverage 

margin 

(percent) 

JSC Severstal ............................. 73.59 

Russia-Wide Rate ....................... 184.56 

This notice also serves as the only 

reminder to parties subject to 

administrative protective orders (‘‘APO’’) 

of their responsibility concerning the 

return or destruction of proprietary 

information disclosed under APO in 

accordance with 19 CFR 351.305 of the 

Department’s regulations. Timely 

notification of the return or destruction 

of APO materials or conversion to 

judicial protective order is requested. 

Failure to comply with the regulations 

and terms of an APO is a violation 

which is subject to sanction. 

We are issuing and publishing the 

results and notice in accordance with 

sections 751(c), 752(c), and 777(i)(1) of 

the Act. 

Dated: July 30, 2010. 

Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration. 

Appendix I 

For the purposes of this Suspension 

Agreement, ‘‘hot-rolled steel’’ means certain 

hot-rolled flat-rolled carbon-quality steel 

products of a rectangular shape, of a width 

of 0.5 inch or greater, neither clad, plated, 

nor coated with metal and whether or not 

painted, varnished, or coated with plastics or 

other non-metallic substances, in coils 

(whether or not in successively 

superimposed layers) regardless of thickness, 

and in straight lengths, of a thickness less 

than 4.75 mm and of a width measuring at 

least 10 times the thickness. 

Universal mill plate (i.e., flat-rolled 

products rolled on four faces or in a closed 

box pass, of a width exceeding 150 mm but 

not exceeding 1250 mm and of a thickness 

of not less than 4 mm, not in coils and 

without patterns in relief) of a thickness not 

less than 4.0 mm is not included within the 

scope of this agreement. 

Specifically included in this scope are 

vacuum degassed, fully stabilized (commonly 

referred to as interstitial-free (‘‘IF’’)) steels, 

high strength low alloy (‘‘HSLA’’) steels, and 

the substrate for motor lamination steels. IF 

steels are recognized as low carbon steels 

with micro-alloying levels of elements such 

as titanium and/or niobium added to 

stabilize carbon and nitrogen elements. 

HSLA steels are recognized as steels with 

micro-alloying levels of elements such as 

chromium, copper, niobium, titanium, 

vanadium, and molybdenum. The substrate 

for motor lamination steels contains microalloying levels of elements such as silicon 

and aluminum. 

Steel products to be included in the scope 

of this agreement, regardless of HTSUS 

definitions, are products in which: (1) Iron 

predominates, by weight, over each of the 

other contained elements; (2) the carbon 

content is 2 percent or less, by weight; and 

(3) none of the elements listed below exceeds 

the quantity, by weight, respectively 

indicated: 1.80 percent of manganese, or 1.50 

percent of silicon, or 1.00 percent of copper, 

or 0.50 percent of aluminum, or 1.25 percent 

of chromium, or 0.30 percent of cobalt, or 

0.40 percent of lead, or 1.25 percent of 

nickel, or 0.30 percent of tungsten, or 0.012 

percent of boron, or 0.10 percent of 

molybdenum, or 0.10 percent of niobium, or 

0.41 percent of titanium, or 0.15 percent of 

vanadium, or 0.15 percent of zirconium. 

All products that meet the physical and 

chemical description provided above are 

within the scope of this agreement unless 

otherwise excluded. The following products, 

by way of example, are outside and/or 

specifically excluded from the scope of this 

agreement: 

—Alloy hot-rolled steel products in which at 

least one of the chemical elements exceeds 

those listed above (including e.g., ASTM 

specifications A543, A387, A514, A517, 

and A506). 

—SAE/AISI grades of series 2300 and higher. 

—Ball bearing steels, as defined in the 

HTSUS. 

—Tool steels, as defined in the HTSUS. 

—Silico-manganese (as defined in the 

HTSUS) or silicon electrical steel with a 

silicon level exceeding 1.50 percent. 

—ASTM specifications A710 and A736. 

—USS Abrasion-resistant steels (USS AR 

400, USS AR 500). 

—Hot-rolled steel coil which meets the 

following chemical, physical and 

mechanical specifications: 

C Mn P S Si Cr Cu Ni 

0.10–0.14% ........................... 0.90% Max ... 0.025% Max 0.005% Max 0.30–0.50% .. 0.50–0.70% .. 0.20–0.40% .. 0.20% Max 

Width = 44.80 inches maximum; Thickness 

= 0.063–0.198 inches; Yield Strength = 

50,000 ksi minimum; Tensile Strength = 

70,000–88,000 psi. 

—Hot-rolled steel coil which meets the 

following chemical, physical and 

mechanical specifications: 

C Mn P S Si Cr Cu Ni 

0.10–0.16% ........................... 0.70–0.90% .. 0.025% Max 0.006% Max 0.30–0.50% .. 0.50–0.70% .. 0.25% Max ... 0.20% Max 

Mo 

0.21% Max.

Width = 44.80 inches maximum; Thickness 

= 0.350 inches maximum; Yield Strength = 

80,000 ksi minimum; Tensile Strength = 

105,000 psi Aim. 

—Hot-rolled steel coil which meets the 

following chemical, physical and 

mechanical specifications: 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 75, No. 150 / Thursday, August 5, 2010 / Notices 47265 

C Mn P S Si Cr Cu Ni 

0.10–0.14% ........................... 1.30–1.80% .. 0.025% Max 0.005% Max 0.30–0.50% .. 0.50–0.70% .. 0.20–0.40% .. 0.20% Max 

V(wt.) Cb 

0.10 Max ................................ 0.08% Max.

Width = 44.80 inches maximum; Thickness 

= 0.350 inches maximum; Yield Strength = 

80,000 ksi minimum; Tensile Strength = 

105,000 psi Aim. 

—Hot-rolled steel coil which meets the 

following chemical, physical and 

mechanical specifications: 

C Mn P S Si Cr Cu Ni 

0.15% Max ............................ 1.40% Max ... 0.025% Max 0.010% Max 0.50% Max ... 1.00% Max ... 0.50% Max ... 0.20% Max 

Nb Ca Al 

0.005% Min ........................... Treated ......... 0.01–0.07%.

Width = 39.37 inches; Thickness = 0.181 

inches maximum; Yield Strength = 70,000 

psi minimum for thicknesses ≤ 0.148 inches 

and 65,000 psi minimum for thicknesses 

>0.148 inches; Tensile Strength = 80,000 psi 

minimum. 

—Hot-rolled dual phase steel, phasehardened, primarily with a ferriticmartensitic microstructure, contains 0.9 

percent up to and including 1.5 percent 

silicon by weight, further characterized by 

either (i) tensile strength between 540 N/ 

mm2 and 640 

N/mm2 and an elongation percentage ≥26 

percent for thicknesses of 2 mm and above, 

or (ii) a tensile strength between 590 N/ 

mm2 and 690 N/mm2 and an elongation 

percentage ≥25 percent for thicknesses of 2 

mm and above. 

—Hot-rolled bearing quality steel, SAE grade 

1050, in coils, with an inclusion rating of 

1.0 maximum per ASTM E 45, Method A, 

with excellent surface quality and 

chemistry restrictions as follows: 0.012 

percent maximum phosphorus, 0.015 

percent maximum sulfur, and 0.20 percent 

maximum residuals including 0.15 percent 

maximum chromium. 

• Grade ASTM A570–50 hot-rolled steel 

sheet in coils or cut lengths, width of 74 

inches (nominal, within ASTM tolerances), 

thickness of 11 gauge (0.119 inches nominal), 

mill edge and skin passed, with a minimum 

copper content of 0.20 percent. 

The covered merchandise is classified in 

the Harmonized Tariff Schedule of the 

United States (‘‘HTSUS’’) at subheadings: 

7208.10.15.00, 7208.10.30.00, 7208.10.60.00, 

7208.25.30.00, 7208.25.60.00, 7208.26.00.30, 

7208.26.00.60, 7208.27.00.30, 7208.27.00.60, 

7208.36.00.30, 7208.36.00.60, 7208.37.00.30, 

7208.37.00.60, 7208.38.00.15, 7208.38.00.30, 

7208.38.00.90, 7208.39.00.15, 7208.39.00.30, 

7208.39.00.90, 7208.40.60.30, 7208.40.60.60, 

7208.53.00.00, 7208.54.00.00, 7208.90.00.00, 

7210.70.30.00, 7210.90.90.00, 7211.14.00.30, 

7211.14.00.90, 7211.19.15.00, 7211.19.20.00, 

7211.19.30.00, 7211.19.45.00, 7211.19.60.00, 

7211.19.75.30, 7211.19.75.60, 7211.19.75.90, 

7212.40.10.00, 7212.40.50.00, 7212.50.00.00. 

Certain hot-rolled flat-rolled carbon-quality 

steel covered include: Vacuum degassed, 

fully stabilized; high strength low alloy; and 

the substrate for motor lamination steel may 

also enter under the following tariff numbers: 

7225.11.00.00, 7225.19.00.00, 7225.30.30.50, 

7225.30.70.00, 7225.40.70.00, 7225.99.00.90, 

7226.11.10.00, 7226.11.90.30, 7226.11.90.60, 

7226.19.10.00, 7226.19.90.00, 7226.91.50.00, 

7226.91.70.00, 7226.91.80.00, and 

7226.99.00.00. Although the HTSUS 

subheadings are provided for convenience 

and Customs purposes, the written 

description of the covered merchandise is 

dispositive. 

[FR Doc. 2010–19285 Filed 8–4–10; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

National Oceanic and Atmospheric 

Administration 

RIN: 0648–XX99 

Fisheries of the Gulf of Mexico; 

Southeast Data, Assessment, and 

Review (SEDAR) update; greater 

amberjack 

AGENCY: National Marine Fisheries 

Service (NMFS), National Oceanic and 

Atmospheric Administration (NOAA), 

Commerce. 

ACTION: Notice of SEDAR Assessment 

Webinar I for Gulf of Mexico greater 

amberjack. 

SUMMARY: The SEDAR update of the 

assessment of the Gulf of Mexico stock 

of greater amberjack will consist of a 

series of webinars. This assessment will 

update the stock assessment conducted 

under SEDAR 9. See SUPPLEMENTARY

INFORMATION. 

DATES: The first Assessment webinar 

will occur on August 25, 2010, from 1 

p.m.—4 p.m. The established times may 

be adjusted as necessary to 

accommodate the timely completion of 

discussion relevant to the assessment 

process. Such adjustments may result in 

the meeting being extended from, or 

completed prior to the time established 

by this notice. See SUPPLEMENTARY

INFORMATION. 

ADDRESSES: The Webinars may be 

attended by the public. Those interested 

in participating should contact Julie A. 

Neer at SEDAR (See FOR FURTHER

INFORMATION CONTACT) to request an 

invitation providing webinar access 

information. 

A listening station will be available at 

the Gulf of Mexico Fishery Management 

Council office located at 2203 N Lois 

Avenue, Suite 1100, Tampa, FL 33607. 

Those interested in participating via the 

listening station should contact Julie A. 

Neer at SEDAR (See FOR FURTHER

INFORMATION CONTACT) at least 1 day 

prior to the webinar. 

FOR FURTHER INFORMATION CONTACT: Julie 

A. Neer, SEDAR Coordinator, 4055 

Faber Place Drive, Suite 201, North 

Charleston, SC 29405; telephone: (843) 

571–4366; e-mail: julie.neer@safmc.net 

SUPPLEMENTARY INFORMATION: The Gulf 

of Mexico, South Atlantic, and 

Caribbean Fishery Management 

Councils, in conjunction with NOAA 

Fisheries and the Atlantic and Gulf 

States Marine Fisheries Commissions 

have implemented the Southeast Data, 

Assessment and Review (SEDAR) 

process, a multi-step method for 

determining the status of fish stocks in 

the Southeast Region. A full benchmark 

assessment conducted under SEDAR 

includes three workshops: (1) Data 

Workshop, (2) Stock Assessment 

Workshop Process and (3) Review 

Workshop. The product of the Data 

Workshop is a data report which 

compiles and evaluates potential 

datasets and recommends which 

datasets are appropriate for assessment 

analyses. The product of the Stock 

Assessment Workshop is a stock 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 75, No. 151 / Friday, August 6, 2010 / Notices 47541 

Name of Project Name of Operator Geographical Service Area Original Federal Register Notice 

Los Angeles MBEC .................. University of Southern California.California Counties of: Los Angeles & Ventura.71 FR 42351, as amended by 74 FR 58246. 

Nevada MBEC ......................... New Ventures Capital Development Company.State of Nevada ...................... 71 FR 42351, as amended by 74 FR 58246. 

Northern California MBEC ....... Asian, Inc ................................ California Counties of: Santa 

Clara, Alameda, San Francisco, San Mateo, San Benito, Monterey, Santa Cruz, 

Sonoma, Napa, Solano, 

Contra Costa, Mendocino, 

San Joaquin, Sacramento, & 

Marin.

71 FR 42351, as amended by 74 FR 58246. 

Washington MBEC ................... Seattle Business Assistance 

Center.

State of Washington ................ 71 FR 42351, as amended by 74 FR 58246. 

Award extensions and their 

additional funding described herein will 

be made at the sole discretion of MBDA 

and the Department of Commerce using 

the following evaluation criteria: (1) The 

MBEC’s overall program performance 

rating during the 2009 program year; (2) 

the availability of appropriated funds; 

and (3) MBDA’s and the Department of 

Commerce’s priorities. MBDA will 

review each of the MBEC’s overall 

performance ratings as evaluated 

through the standardized performance 

reports and assessments required under 

the MBEC Program to determine which 

projects will be offered an extension. 

MBDA will prioritize those MBEC 

awards meeting the above criteria that 

also have current award periods 

scheduled to end on or before January 

31, 2010. In addition, although MBDA is 

allowing the award period for all of the 

above-referenced MBEC projects to be 

extended, it is possible that not all 

projects will be offered an extension and 

that some or all awards will be extended 

for less than a nine-month period. 

A total of approximately $1.1 million 

in FY 2010 funds is available under the 

Consolidated Appropriations Act, 2010, 

Public Law 111–117, to fund award 

extensions for the MBEC projects 

referenced in this notice. MBDA also 

anticipates that additional appropriated 

funds will be available in FY 2011 to 

fund award extensions for those MBEC 

projects not receiving extensions during 

FY 2010. In no event will MBDA or the 

Department of Commerce be responsible 

for any costs incurred outside of the 

current award period by the incumbent 

operators of the MBEC projects affected 

by this notice if the MBEC Program fails 

to receive funding, or if an award 

extension is not made because of other 

MBDA or Department of Commerce 

priorities. Publication of this 

announcement does not oblige MBDA or 

the Department of Commerce to award 

any extensions or to obligate any 

available funds. 

Department of Commerce Pre-Award 

Notification Requirements for Grants 

and Cooperative Agreements 

The Department of Commerce PreAward Notification Requirements for 

Grants and Cooperative Agreements 

contained in the Federal Register notice 

of February 11, 2008 (73 FR 7696) are 

applicable to this notice. 

Paperwork Reduction Act 

This document contains collection of 

information requirements subject to the 

Paperwork Reduction Act (PRA). The 

use of the MBDA Performance Online 

Database and Standard Forms 424, 424A 

and 424B has been approved by Office 

of Management and Budget (OMB) 

under the control numbers 0640–0002, 

4040–0004, 4040–0006 and 4040–0007, 

respectively. Notwithstanding any other 

provisions of law, no person is required 

to respond to, nor shall any person be 

subject to a penalty for failure to comply 

with a collection of information subject 

to the PRA unless that collection 

displays a currently valid OMB Control 

Number. 

Executive Order 12866 

This notice has been determined to be 

not significant for purposes of E.O. 

12866. 

Executive Order 13132 (Federalism) 

It has been determined that this notice 

does not contain policies with 

Federalism implications as that term is 

defined in Executive Order 13132. 

Administrative Procedure Act/ 

Regulatory Flexibility Act 

Prior notice and an opportunity for 

public comment are not required by the 

Administrative Procedure Act for rules 

concerning public property, loans, 

grants, benefits, and contracts. 5 U.S.C. 

553(a)(2). Because notice and 

opportunity for comment are not 

required pursuant to 5 U.S.C. 553 or any 

other law, the analytical requirements of 

the Regulatory Flexibility Act, 5 U.S.C. 

601 et seq., are inapplicable. Therefore, 

a regulatory flexibility analysis is not 

required and has not been prepared. 

Authority: 15 U.S.C. 1512 and Executive 

Order 11625. 

Dated: August 3, 2010. 

David A. Hinson, 

National Director, Minority Business 

Development Agency. 

[FR Doc. 2010–19486 Filed 8–5–10; 8:45 am] 

BILLING CODE 3510–21–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[A–351–828, A–588–846] 

Hot–Rolled Flat–Rolled Carbon–Quality 

Steel Products from Brazil and Japan: 

Final Results of Expedited Sunset 

Reviews of the Antidumping Duty 

Orders 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: On April 1, 2010, the 

Department of Commerce (the 

Department) initiated sunset reviews of 

the antidumping duty orders on hot– 

rolled flat–rolled carbon–quality steel 

products from Brazil and Japan, 

pursuant to section 751(c) of the Tariff 

Act of 1930, as amended (the Act). The 

Department has conducted expedited 

(120–day) sunset reviews for both orders 

pursuant to 19 CFR 

351.218(e)(1)(ii)(C)(2). As a result of 

these sunset reviews, the Department 

finds that revocation of the antidumping 

duty orders would be likely to lead to 

continuation or recurrence of dumping. 

EFFECTIVE DATE: August 6, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Jacqueline Arrowsmith or Milton Koch, 

AD/CVD Operations, Office 6, Import 

Administration, International Trade 

Administration, U.S. Department of 

Commerce, 14th Street and Constitution 

Avenue, NW, Washington, DC 20230; 


sroberts on DSKD5P82C1PROD with NOTICES
47542 Federal Register / Vol. 75, No. 151 / Friday, August 6, 2010 / Notices 

telephone: (202) 482–5255 and (202) 

482–2584, respectively. 

SUPPLEMENTARY INFORMATION: 

Background 

On April 1, 2010, the Department 

published the notice of initiation of the 

second sunset reviews of the 

antidumping duty orders on hot–rolled 

flat–rolled carbon–quality steel products 

from Brazil and Japan pursuant to 

section 751(c) of the Act. See Initiation 

of Five–Year (‘‘Sunset’’) Review, 75 FR 

16437 (April 1, 2010). 

The Department received notices of 

intent to participate on behalf of United 

States Steel Corporation, Nucor 

Corporation, Gallatin Steel, SSAB 

N.A.D., Steel Dynamics, Inc., and 

ArcelorMittal USA Inc. (collectively 

‘‘domestic interested parties’’), within 

the deadline specified in 19 CFR 

351.218(d)(1)(i). The companies claimed 

interested party status under section 

771(9)(C) of the Act as producers of the 

subject merchandise in the United 

States. 

The Department received an adequate 

substantive response to the notice of 

initiation from the domestic interested 

parties within the deadline specified in 

19 CFR 351.218(d)(3)(i). We received no 

substantive responses from respondent 

interested parties with respect to either 

of the orders covered by these sunset 

reviews. As a result, pursuant to 19 CFR 

351.218(e)(1)(ii)(C)(2), the Department 

has conducted expedited (120–day) 

sunset reviews of the antidumping duty 

orders on hot–rolled flat–rolled carbon– 

quality steel products from Brazil and 

Japan. 

Scope of the Orders 

The products covered by the 

antidumping duty orders are certain 

hot–rolled flat–rolled carbon–quality 

steel products of a rectangular shape, of 

a width of 0.5 inch or greater, neither 

clad, plated, nor coated with metal and 

whether or not painted, varnished, or 

coated with plastics or other non– 

metallic substances, in coils (whether or 

not in successively superimposed 

layers) regardless of thickness, and in 

straight lengths, of a thickness less than 

4.75 mm and of a width measuring at 

least 10 times the thickness. Universal 

mill plate (i.e., flat–rolled products 

rolled on four faces or in a closed box 

pass, of a width exceeding 150 mm, but 

not exceeding 1250 mm and of a 

thickness of not less than 4 mm, not in 

coils and without patterns in relief) of 

a thickness not less than 4.0 mm is not 

included within the scope of the orders. 

Specifically included in the scope are 

vacuum degassed, fully stabilized 

(commonly referred to as interstitial– 

free (IF)) steels, high strength low alloy 

(HSLA) steels, and the substrate for 

motor lamination steels. IF steels are 

recognized as low carbon steels with 

micro–alloying levels of elements such 

as titanium and/or niobium added to 

stabilize carbon and nitrogen elements. 

HSLA steels are recognized as steels 

with micro–alloying levels of elements 

such as chromium, copper, niobium, 

titanium, vanadium, and molybdenum. 

The substrate for motor lamination 

steels contains micro–alloying levels of 

elements such as silicon and aluminum. 

Steel products to be included in the 

scope of the orders, regardless of 

Harmonized Tariff Schedule of the 

United States (HTSUS) definitions, are 

products in which: 1) iron 

predominates, by weight, over each of 

the other contained elements; 2) the 

carbon content is 2 percent or less, by 

weight; and 3) none of the elements 

listed below exceeds the quantity, by 

weight, respectively indicated: 

1.80 percent of manganese, or 

1.50 percent of silicon, or 

1.00 percent of copper, or 

0.50 percent of aluminum, or 

1.25 percent of chromium, or 

0.30 percent of cobalt, or 

0.40 percent of lead, or 

1.25 percent of nickel, or 

0.30 percent of tungsten, or 

0.012 percent of boron, or 

0.10 percent of molybdenum, or 

0.10 percent of niobium, or 

0.41 percent of titanium, or 

0.15 percent of vanadium, or 

0.15 percent of zirconium. 

All products that meet the physical 

and chemical description provided 

above are within the scope of the orders 

unless otherwise excluded. The 

following products, by way of example, 

are outside and/or specifically excluded 

from the scope of the orders: 

• Alloy hot–rolled steel products in 

which at least one of the chemical 

elements exceeds those listed above 

(including e.g., ASTM 

specifications A543, A387, A514, 

A517, and A506). 

• SAE/AISI grades of series 2300 and 

higher. 

• Ball bearing steels, as defined in the 

HTSUS. 

• Tool steels, as defined in the 

HTSUS. 

• Silico–manganese (as defined in the 

HTSUS) or silicon electrical steel 

with a silicon level exceeding 1.50 

percent. 

• ASTM specifications A710 and 

A736. 

• USS Abrasion–resistant steels (USS 

AR 400, USS AR 500). 

• Hot–rolled steel coil which meets 

the following chemical, physical 

and mechanical specifications: 

C Mn P S Si Cr Cu Ni 

0.10 - 0.14% ................ 0.90% Max 0.025% Max 0.005% Max 0.30 - 0.50% 0.50 - 0.70% 0.20 - 0.40% 0.20% Max 

Width = 44.80 inches maximum; 

Thickness = 0.063 - 0.198 inches; 

Yield Strength = 50,000 ksi minimum; 

Tensile Strength = 70,000 - 88,000 psi. 

• Hot–rolled steel coil which meets 

the following chemical, physical 

and mechanical specifications: 

C Mn P S Si Cr Cu Ni Mo 

0.10 - 0.16% .................... 0.70 - 

0.90% 

0.025% Max 0.006% Max 0.30 - 

0.50% 

0.50 - 

0.70% 

0.25% Max 0.20% Max 0.21% Max 

Width = 44.80 inches maximum; 

Thickness = 0.350 inches maximum; 

Yield Strength = 80,000 ksi minimum; 

Tensile Strength = 105,000 psi Aim. 

• Hot–rolled steel coil which meets 

the following chemical, physical 

and mechanical specifications: 


sroberts on DSKD5P82C1PROD with NOTICES
Federal Register / Vol. 75, No. 151 / Friday, August 6, 2010 / Notices 47543 

C Mn P S Si Cr Cu Ni V(wt.) Cb 

0.10 - 0.14% ............... 1.30 - 

1.80% 

0.025% 

Max 

0.005% 

Max 

0.30 - 

0.50% 

0.50 - 

0.70% 

0.20 - 

0.40% 

0.20% Max 0.10 Max 0.08% Max 

Width = 44.80 inches maximum; 

Thickness = 0.350 inches maximum; 

Yield Strength = 80,000 ksi minimum; 

Tensile Strength = 105,000 psi Aim. 

• Hot–rolled steel coil which meets 

the following chemical, physical 

and mechanical specifications: 

C Mn P S Si Cr Cu Ni Nb Ca Al 

0.15% 

Max ... 1.40% Max 0.025% 

Max 

0.010% 

Max 

0.50% Max 1.00% Max 0.50% Max 0.20% Max 0.005% 

Min 

Treated 0.01 - 

0.07% 

Width = 39.37 inches; Thickness = 

0.181 inches maximum; Yield Strength 

= 70,000 psi minimum for thicknesses ≤ 

0.148 inches and 65,000 psi minimum 

for thicknesses >0.148 inches; Tensile 

Strength = 80,000 psi minimum. 

• Hot–rolled dual phase steel, phase– 

hardened, primarily with a ferritic– 

martensitic microstructure, contains 

0.9 percent up to and including 1.5 

percent silicon by weight, further 

characterized by either (i) tensile 

strength between 540 N/mm2 and 

640 N/mm2 and an elongation 

percentage ≥ 26 percent for 

thicknesses of 2 mm and above, or 

(ii) a tensile strength between 590 

N/mm2 and 690 N/mm2 and an 

elongation percentage ≥ 25 percent 

for thicknesses of 2mm and above. 

• Hot–rolled bearing quality steel, 

SAE grade 1050, in coils, with an 

inclusion rating of 1.0 maximum 

per ASTM E 45, Method A, with 

excellent surface quality and 

chemistry restrictions as follows: 

0.012 percent maximum 

phosphorus, 0.015 percent 

maximum sulfur, and 0.20 percent 

maximum residuals including 0.15 

percent maximum chromium. 

• Grade ASTM A570–50 hot–rolled 

steel sheet in coils or cut lengths, 

width of 74 inches (nominal, within 

ASTM tolerances), thickness of 11 

gauge (0.119 inch nominal), mill 

edge and skin passed, with a 

minimum copper content of 0.20%. 

The merchandise subject to the orders 

is classified in the HTSUS at 

subheadings: 7208.10.15.00, 

7208.10.30.00, 7208.10.60.00, 

7208.25.30.00, 7208.25.60.00, 

7208.26.00.30, 7208.26.00.60, 

7208.27.00.30, 7208.27.00.60, 

7208.36.00.30, 7208.36.00.60, 

7208.37.00.30, 7208.37.00.60, 

7208.38.00.15, 7208.38.00.30, 

7208.38.00.90, 7208.39.00.15, 

7208.39.00.30, 7208.39.00.90, 

7208.40.60.30, 7208.40.60.60, 

7208.53.00.00, 7208.54.00.00, 

7208.90.00.00, 7210.70.30.00, 

7210.90.90.00, 7211.14.00.30, 

7211.14.00.90, 7211.19.15.00, 

7211.19.20.00, 7211.19.30.00, 

7211.19.45.00, 7211.19.60.00, 

7211.19.75.30, 7211.19.75.60, 

7211.19.75.90, 7212.40.10.00, 

7212.40.50.00, 7212.50.00.00. 

Certain hot–rolled flat–rolled carbon– 

quality steel products are covered by the 

orders, including: vacuum degassed, 

fully stabilized; high strength low alloy; 

and the substrate for motor lamination 

steel may also enter under the following 

tariff numbers: 7225.11.00.00, 

7225.19.00.00, 7225.30.30.50, 

7225.30.70.00, 7225.40.70.00, 

7225.99.00.90, 7226.11.10.00, 

7226.11.90.30, 7226.11.90.60, 

7226.19.10.00, 7226.19.90.00, 

7226.91.50.00, 7226.91.70.00, 

7226.91.80.00, and 7226.99.00.00. 

Although the HTSUS subheadings are 

provided for convenience and Customs 

purposes, the written description of the 

merchandise covered by the orders is 

dispositive. 

Analysis of Comments Received 

All issues raised in these reviews are 

addressed in the ‘‘Issues and Decision 

Memorandum: Final Results of 

Expedited Sunset Reviews of the 

Antidumping Duty Orders on Hot– 

Rolled Flat–Rolled Carbon–Quality 

Steel Products from Brazil and Japan’’ 

from Edward C. Yang, Acting Deputy 

Assistant Secretary for Antidumping 

and Countervailing Duty Operations, to 

Ronald K. Lorentzen, Deputy Assistant 

Secretary for Import Administration, 

dated concurrently with this notice 

(‘‘Issues and Decision Memorandum’’), 

which is hereby adopted by this notice. 

The issues discussed in the Issues and 

Decision Memorandum include the 

likelihood of continuation or recurrence 

of dumping and the magnitude of the 

margins likely to prevail if the orders 

were revoked. Parties can find a 

complete discussion of all issues raised 

in these reviews and the corresponding 

recommendations in this public 

memorandum which is on file in the 

Central Records Unit, room 1117 of the 

main Commerce Department building. 

In addition, a complete version of the 

Issues and Decision Memorandum can 

be accessed directly on the Internet at 

http://ia.ita.doc.gov/frn. The paper copy 

and electronic version of the Issues and 

Decision Memorandum are identical in 

content. 

Final Results of Reviews 

We determine that revocation of the 

antidumping duty orders on hot–rolled 

flat–rolled carbon–quality steel products 

from Brazil and Japan would be likely 

to lead to continuation or recurrence of 

dumping at the following weighted– 

average percentage margins: 

Producer/Exporter for Brazil 

Weighted 

Average 

Margin 

Companhia Siderurgica Nacional 41.27% 

Usinas Siderurgicas de Minas 

Gerais ...................................... 43.40% 

Companhia Siderurgica Paulista 43.40% 

All Others .................................... 42.12% 

Producer/Exporter for Japan 

Weighted 

Average 

Margin 

Kawasaki Steel Corporation ....... 40.26% 

NKK Corporation ........................ 17.70% 

Nippon Steel Corporation ........... 19.95% 

All Others .................................... 22.92% 

This notice also serves as the only 

reminder to parties subject to 

administrative protective orders (APO) 

of their responsibility concerning the 

return or destruction of proprietary 

information disclosed under APO in 

accordance with 19 CFR 351.305. 

Timely notification of the return or 

destruction of APO materials or 

conversion to judicial protective orders 

is hereby requested. Failure to comply 

with the regulations and terms of an 


sroberts on DSKD5P82C1PROD with NOTICES
47544 Federal Register / Vol. 75, No. 151 / Friday, August 6, 2010 / Notices 

APO is a violation which is subject to 

sanction. 

We are issuing and publishing the 

results and notice in accordance with 

sections 751(c), 752(c), and 777(i)(1) of 

the Act. 

Dated: July 30, 2010. 

Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. 2010–19454 Filed 8–5–10; 8:45 am] 

BILLING CODE 3510–DS–S 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[Docket No. I.D. GF001] 

Grants to Manufacturers of Certain 

Worsted Wool Fabrics 

AGENCY: Department of Commerce, 

International Trade Administration. 

ACTION: Notice announcing the 

availability of grant funds. 

SUMMARY: The purpose of this notice is 

to inform potential applicants that the 

Department of Commerce is providing 

financial assistance in calendar year 

2010 for U.S. manufacturers of certain 

worsted wool fabrics. Section 

4002(c)(6)(A) of the Miscellaneous 

Trade and Technical Corrections Act of 

2004 (Pub. L. 108–429, 118 Stat. 2603) 

(the ‘‘Act’’) authorizes the Secretary of 

Commerce to provide grants to persons 

(including firms, corporations, or other 

legal entities) who were, during 

calendar years 1999, 2000, and 2001, 

manufacturers of two categories of 

worsted wool fabrics. The first category 

are manufacturers of worsted wool 

fabrics, containing 85 percent or more 

by weight of wool, with average fiber 

diameters greater than 18.5 micron 

(Harmonized Tariff Schedule of the 

United States (HTS) heading 

9902.51.11); the total amount of 

available funds is $2,666,000, to be 

allocated among such manufacturers on 

the basis of the percentage of each 

manufacturers’ production of worsted 

wool fabric included in HTS 9902.51.11. 

The second category are manufacturers 

of worsted wool fabrics, containing 85 

percent or more by weight of wool, with 

average fiber diameters of 18.5 micron 

or less (HTS heading 9902.51.15, 

previously HTS heading 9902.51.12); 

the total amount of available funds is 

$2,666,000, to be allocated among such 

manufacturers on the basis of the 

percentage of each manufacturers’ 

production of worsted wool fabric 

included in HTS 9902.51.15. Funding 

for the worsted wool fabrics grant 

program will be provided by the 

Department of the Treasury from 

amounts in the Wool Apparel 

Manufacturers Trust Fund (the ‘‘Trust 

Fund’’). The total amount of grants to 

manufacturers of worsted wool fabrics 

described in HTS 9902.51.11 shall be 

$2,666,000 in calendar year 2010. The 

total amount of grants to manufacturers 

of worsted wool fabrics described in 

HTS 9902.51.15 shall also be $2,666,000 

in calendar year 2010. 

DATES: Applications by eligible U.S. 

producers of certain worsted wool 

fabrics must be received and validated 

by Grants.gov, postmarked, or provided 

to a delivery service on or before 5 p.m. 

EDT, August 20, 2010. Validation or 

rejection of your application by 

Grants.gov may take up to 2 business 

days after submission. Applications 

received after the closing date and time 

will be rejected/returned to the sender 

without further consideration. Use of 

U.S. mail or another delivery service 

must be documented with a receipt. No 

facsimile or electronic mail applications 

will be accepted. 

ADDRESSES: The standard application 

package is available at http:// 

www.grants.gov. For applicants without 

Internet access, an application package 

may be received by contacting Mr. Jim 

Bennett, Office of Textiles and 

Apparel—Rm. 3100, International Trade 

Administration, U.S. Department 

Commerce, Washington, DC 20230, 

phone (202) 482–4058, e-mail: 

James.Bennett@trade.gov. 

FOR FURTHER INFORMATION CONTACT: 

Technical questions can be directed to 

Jim Bennett, Office of Textiles and 

Apparel, U.S. Department of Commerce, 

(202) 482–4058; 

James.Bennett@trade.gov. Grants related 

administration questions concerning 

this program should be addressed to 

Janet Russell, Department of Commerce 

Grants Officer, (301) 713–0942; 

Janet.J.Russell@noaa.gov. For assistance 

with using grants.gov, contact 

support@grants.gov. 

SUPPLEMENTARY INFORMATION: The items 

listed below are required before an 

award can be made. Failure to submit 

items below by the application date will 

result in the application not being 

reviewed. Applicants must have 

produced in the United States, during 

calendar years 1999, 2000 and 2001, 

worsted wool fabrics of a kind described 

in HTS 9902.51.11 or 9902.51.15. 

Applicants must provide: (1) Company 

name, address, contact and phone 

number; (2) Federal tax identification 

number; (3) the name and address of 

each plant or location in the United 

States where worsted wool fabrics of the 

kind described in HTS 9902.51.11 or 

HTS 9902.51.15 was woven by the 

applicant in 1999, 2000 and 2001; (4) 

the name and address of each plant or 

location in the United States where the 

applicant is weaving worsted wool 

fabrics of the kind described in HTS 

9902.51.11 or HTS 9902.51.15 as of the 

date of application; (5) the quantity, in 

linear yards, of worsted wool fabric 

production described in HTS 9902.51.11 

or 9902.51.15, as appropriate, woven in 

the United States in each of calendar 

years 1999, 2000 and 2001; and (6) the 

value of worsted wool fabric production 

described in HTS 9902.51.11 or 

9902.51.15, as appropriate, woven in the 

United States in each of calendar years 

1999, 2000 and 2001. 

This data must indicate actual 

production (not estimates) of worsted 

wool fabric of the kind described in 

HTS 9902.51.11 or 9902.51.15. At the 

conclusion of the application, the 

applicant must attest that ‘‘all 

information contained in the 

application is complete and correct and 

no false claims, statements, or 

representations have been made.’’ 

Applicants should be aware that, 

generally, pursuant to 31 U.S.C. 3729, 

persons providing a false or fraudulent 

claims, and, pursuant to 18 U.S.C. 1001, 

persons making materially false 

statements or representations, are 

subject to civil or criminal penalties, 

respectively. Information that is marked 

‘‘business confidential’’ will be protected 

from disclosure to the full extent 

permitted by law. 

Other Application Requirements: 

Complete applications must also 

include the following forms and 

documents: CD–346, Applicant for 

Funding Assistance; CD–511, 

Certification Regarding Lobbying; SF– 

424, Application for Federal Assistance; 

and SF–424B, Assurances—NonConstruction Programs. 

Electronic Access: The federal 

funding opportunity announcement for 

this program can be accessed via the 

Grants.gov Web site at http:// 

www.grants.gov. The announcement 

will also be available by contacting the 

program officials identified under the 

section labeled FOR FURTHER

INFORMATION CONTACT. Applicants must 

comply with all requirements contained 

in the full funding opportunity 

announcement. 

Statutory Authority: Section 4002(c) 

(6) of the Miscellaneous Trade and 

Technical Corrections Act of 2004 (Pub. 

L. 108–429, 118 Stat. 2603) (the ‘‘Act’’), 

and amended by Section 1633 of the 

Pension Protection Act of 2006 (Pub. L. 

109–280); Division C, Title 111, Section 

325 (b) of the Emergency Economic 


sroberts on DSKD5P82C1PROD with NOTICES
Federal Register / Vol. 75, No. 232 / Friday, December 3, 2010 / Notices 75455 

1Bethlehem Steel Corporation, US Steel Group, a 

unit of USX Corporation, Ispat Inland Steel, LTV 

Steel Company, Inc., National Steel Corporation, 

California Steel Industries, Gallatin Steel Company, 

Geneva Steel, Gulf States Steel Inc., IPSCO Steel 

Inc., Steel Dynamics, Weirton Steel Corporation, 

Independent Steelworkers Union, and United 

Steelworkers of America were petitioners in the 

original investigation. In 2002, International Steel 

Group was formed; International Steel Group 

reported that it is the successor to LTV Steel 

Company Inc., Weirton Steel Corporation, and 

Bethlehem Steel Corporation, which are no longer 

in existence. In 2005, International Steel Group and 

Ipsat Inland Steel merged with Mittal Steel 

Company NV. In 2006, Arcelor and Mittal Steel 

Company NV merged, and Mittal Steel’s U.S. hotrolled steel operations became a part of 

ArcelorMittal USA. ArcelorMittal USA stated that 

it is a U.S. producer of hot-rolled steel and an 

interested party pursuant to section 771(9)(C) of the 

Act. See April 15, 2010 Notice of Intent to 

Participate letter from ArcelorMittal USA to the 

Department. Nucor Corporation is also a domestic 

producer of subject merchandise. According to the 

domestic interested parties, IPSCO Steel Inc. is now 

known as SSAB N.A.D. 

2The Department found that USIMINAS owned 

49.79 percent of COSIPA during the period of 

investigation. See Final Affirmative Countervailing 

Duty Determination: Certain Hot-Rolled Flat-Rolled 

Carbon-Quality Steel Products From Brazil, 64 FR 

38741, 38744 (July 19, 1999). Accordingly, the 

Department treated these two producers as a single 

company for purposes of the investigation in 

accordance with section 771(33)(E) of the Act. 

Dated: November 29, 2010. 

Susan H. Kuhbach, 

Acting Deputy Assistant Secretary for 

Antidumping and Countervailing Duty 

Operations. 

[FR Doc. 2010–30381 Filed 12–2–10; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

International Trade Administration 

[C–351–829] 

Certain Hot-Rolled Flat-Rolled CarbonQuality Steel Products From Brazil: 

Final Results of Full Sunset Review of 

Countervailing Duty Order 

AGENCY: Import Administration, 

International Trade Administration, 

Department of Commerce. 

SUMMARY: On April 1, 2010, the 

Department of Commerce (the 

Department) initiated the second sunset 

review of the countervailing duty (CVD) 

order on certain hot-rolled flat-rolled 

carbon-quality steel products (hot-rolled 

steel) from Brazil, pursuant to section 

751(c) of the Tariff Act of 1930, as 

amended (the Act). On the basis of a 

notice of intent to participate and an 

adequate substantive response filed on 

behalf of the domestic interested 

parties,1 and adequate responses from 

Usinas Siderurgicas de Minas Gerais 

and Companhia Siderurgica Paulista 

(USIMINAS/COSIPA) 2 and Companhia 

Siderurgica Nacional (CSN), producers 

of hot-rolled steel, and the Government 

of Brazil (GOB), the Department 

determined to conduct a full sunset 

review of this CVD order pursuant to 

section 751(c) of the Act and 19 CFR 

351.218(e)(2). As a result of our 

analysis, the Department finds that 

revocation of the CVD order would 

likely lead to continuance or recurrence 

of a countervailable subsidy. 

DATES: Effective Date: December 3, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Milton Koch, AD/CVD Operations 

Office 6, Import Administration, 

International Trade Administration, 

U.S. Department of Commerce, 14th 

Street and Constitution Avenue, NW., 

Washington, DC 20230; telephone: (202) 

482–2584. 

SUPPLEMENTARY INFORMATION: 

Background 

On April 1, 2010, the Department 

initiated the second sunset review of the 

countervailing duty order on hot-rolled 

steel from Brazil in accordance with 

section 751(c) of the Act. See Initiation 

of Five-Year (‘‘Sunset’’) Review, 75 FR 

16437 (April 1, 2010). The domestic 

interested parties timely filed a notice of 

intent to participate. The Department 

received substantive responses filed on 

behalf of the domestic interested parties, 

and responses from USIMINAS/COSIPA 

and CSN, producers of hot-rolled steel, 

and the GOB. Based on a finding that 

the substantive responses were 

adequate, the Department determined to 

conduct a full sunset review of this CVD 

order pursuant to section 751(c) of the 

Act and 19 CFR 351.218(e)(2). See 

Memorandum from Jacqueline 

Arrowsmith, Trade Compliance Analyst, 

to Barbara Tillman, Director, AD/CVD 

Operations, Office 6 re: Adequacy 

Determination in Countervailing Duty 

Sunset Review Of Hot-Rolled Carbon, 

Steel Flat Products from Brazil—Second 

Countervailing Duty Review (2005 

through 2009) (May 21, 2010). 

On July 20, 2010, the Department 

issued the preliminary results of the full 

sunset review, finding a likelihood of 

continuation or recurrence of 

subsidization with a net countervailable 

subsidy likely to prevail of zero percent 

for USIMINAS/COSIPA, CSN and all 

other companies. See Certain Hot-Rolled 

Flat-Rolled Carbon-Quality Steel 

Products from Brazil: Preliminary 

Results of Full Sunset Review, 75 FR 

43931 (July 27, 2010). Interested parties 

were invited to comment on the 

preliminary results. On September 15, 

2010, the Department received timely 

case briefs from domestic interested 

parties, USIMINAS/COSIPA, and CSN. 

On September 20, 2010, the Department 

received rebuttal briefs from the same 

parties. 

Scope of the Order 

The products covered by the order are 

certain hot-rolled flat-rolled carbonquality steel products of a rectangular 

shape, of a width of 0.5 inch or greater, 

neither clad, plated, nor coated with 

metal and whether or not painted, 

varnished, or coated with plastics or 

other non-metallic substances, in coils 

(whether or not in successively 

superimposed layers) regardless of 

thickness, and in straight lengths, of a 

thickness less than 4.75 mm and of a 

width measuring at least 10 times the 

thickness. Universal mill plate (i.e., flatrolled products rolled on four faces or 

in a closed box pass, of a width 

exceeding 150 mm, but not exceeding 

1250 mm and of a thickness of not less 

than 4 mm, not in coils and without 

patterns in relief) of a thickness not less 

than 4.0 mm is not included within the 

scope of the order. 

Specifically included in the scope are 

vacuum degassed, fully stabilized 

(commonly referred to as interstitial-free 

(‘‘IF’’)) steels, high strength low alloy 

(‘‘HSLA’’) steels, and the substrate for 

motor lamination steels. IF steels are 

recognized as low carbon steels with 

micro-alloying levels of elements such 

as titanium and/or niobium added to 

stabilize carbon and nitrogen elements. 

HSLA steels are recognized as steels 

with micro-alloying levels of elements 

such as chromium, copper, niobium, 

titanium, vanadium, and molybdenum. 

The substrate for motor lamination 

steels contains micro-alloying levels of 

elements such as silicon and aluminum. 

Steel products to be included in the 

scope of the order, regardless of 

Harmonized Tariff Schedule of the 

United States (‘‘HTSUS’’) definitions, are 

products in which: (1) Iron 

predominates, by weight, over each of 

the other contained elements; (2) the 

carbon content is 2 percent or less, by 

weight; and (3) none of the elements 

listed below exceeds the quantity, by 

weight, respectively indicated: 

1.80 percent of manganese, or 

1.50 percent of silicon, or 

1.00 percent of copper, or 

0.50 percent of aluminum, or 

1.25 percent of chromium, or 

0.30 percent of cobalt, or 

0.40 percent of lead, or 

1.25 percent of nickel, or 

0.30 percent of tungsten, or 

0.012 percent of boron, or 

0.10 percent of molybdenum, or 

0.10 percent of niobium, or 

0.41 percent of titanium, or 

0.15 percent of vanadium, or 

0.15 percent of zirconium. 

mstockstill on DSKH9S0YB1PROD with NOTICES

75456 Federal Register / Vol. 75, No. 232 / Friday, December 3, 2010 / Notices 

All products that meet the physical 

and chemical description provided 

above are within the scope of the order 

unless otherwise excluded. The 

following products, by way of example, 

are outside and/or specifically excluded 

from the scope of the order: 

• Alloy hot-rolled steel products in 

which at least one of the chemical 

elements exceeds those listed above 

(including e.g., ASTM specifications 

A543, A387, A514, A517, and A506). 

• SAE/AISI grades of series 2300 and 

higher. 

• Ball bearing steels, as defined in the 

HTSUS. 

• Tool steels, as defined in the 

HTSUS. 

• Silico-manganese (as defined in the 

HTSUS) or silicon electrical steel with 

a silicon level exceeding 1.50 percent. 

• ASTM specifications A710 and 

A736. 

• USS Abrasion-resistant steels (USS 

AR 400, USS AR 500). 

• Hot-rolled steel coil which meets 

the following chemical, physical and 

mechanical specifications: 

C Mn P S Si Cr Cu Ni 

0.10–0.14% 0.90% Max 0.025% Max 0.005% Max 0.30–0.50% 0.50–0.70% 0.20–0.40% 0.20% Max 

Note: Width = 44.80 inches maximum; Thickness = 0.063–0.198 inches; Yield Strength = 50,000 ksi minimum; Tensile Strength = 70,000– 

88,000 psi. 

• Hot-rolled steel coil which meets 

the following chemical, physical and 

mechanical specifications: 

C Mn P S Si Cr Cu Ni Mo 

0.10–0.16% 0.70–0.90% 0.025% Max 0.006% Max 0.30–0.50% 0.50–0.70% 0.25% Max 0.20% Max 0.21% Max 

Note: Width = 44.80 inches maximum; Thickness = 0.350 inches maximum; Yield Strength = 80,000 ksi minimum; Tensile Strength = 105,000 

psi Aim. 

• Hot-rolled steel coil which meets 

the following chemical, physical and 

mechanical specifications: 

C Mn P S Si Cr Cu Ni V(wt.) Cb 

0.10–0.14% 1.30–1.80% 0.025% Max 0.005% Max 0.30–0.50% 0.50–0.70% 0.20–0.40% 0.20% Max 0.10% Max 0.08% Max 

Note: Width = 44.80 inches maximum; Thickness = 0.350 inches maximum; Yield Strength = 80,000 ksi minimum; Tensile Strength = 105,000 psi Aim. 

• Hot-rolled steel coil which meets 

the following chemical, physical and 

mechanical specifications: 

C Mn P S Si Cr Cu Ni Nb Ca Al 

0.15% Max 1.40% Max 0.025% Max 0.010% Max 0.50% Max 1.00% Max 0.50% Max 0.20% Max 0.005% Max Treated 0.01–0.07% 

Width = 39.37 inches; Thickness = 0.181 inches maximum; Yield Strength = 70,000 psi minimum for thicknesses ≤0.148 inches and 65,000 psi minimum for 

thicknesses >0.148 inches; Tensile Strength = 80,000 psi minimum. 

• Hot-rolled dual phase steel, phasehardened, primarily with a ferriticmartensitic microstructure, contains 0.9 

percent up to and including 1.5 percent 

silicon by weight, further characterized 

by either (i) tensile strength between 

540 N/mm2 and 640 N/mm2 and an 

elongation percentage ≥ 26 percent for 

thicknesses of 2 mm and above, or (ii) 

a tensile strength between 590 N/mm2

and 690 N/mm2 and an elongation 

percentage ≥ 25 percent for thicknesses 

of 2mm and above. 

• Hot-rolled bearing quality steel, 

SAE grade 1050, in coils, with an 

inclusion rating of 1.0 maximum per 

ASTM E 45, Method A, with excellent 

surface quality and chemistry 

restrictions as follows: 0.012 percent 

maximum phosphorus, 0.015 percent 

maximum sulfur, and 0.20 percent 

maximum residuals including 0.15 

percent maximum chromium. 

• Grade ASTM A570–50 hot-rolled 

steel sheet in coils or cut lengths, width 

of 74 inches (nominal, within ASTM 

tolerances), thickness of 11 gauge (0.119 

inch nominal), mill edge and skin 

passed, with a minimum copper content 

of 0.20%. 

The merchandise subject to the order 

is classified in the HTSUS at 

subheadings: 7208.10.15.00, 

7208.10.30.00, 7208.10.60.00, 

7208.25.30.00, 7208.25.60.00, 

7208.26.00.30, 7208.26.00.60, 

7208.27.00.30, 7208.27.00.60, 

7208.36.00.30, 7208.36.00.60, 

7208.37.00.30, 7208.37.00.60, 

7208.38.00.15, 7208.38.00.30, 

7208.38.00.90, 7208.39.00.15, 

7208.39.00.30, 7208.39.00.90, 

7208.40.60.30, 7208.40.60.60, 

7208.53.00.00, 7208.54.00.00, 

7208.90.00.00, 7210.70.30.00, 

7210.90.90.00, 7211.14.00.30, 

7211.14.00.90, 7211.19.15.00, 

7211.19.20.00, 7211.19.30.00, 

7211.19.45.00, 7211.19.60.00, 

7211.19.75.30, 7211.19.75.60, 

7211.19.75.90, 7212.40.10.00, 

7212.40.50.00, 7212.50.00.00. 

Certain hot-rolled flat-rolled carbonquality steel covered by the order, 

including: Vacuum degassed, fully 

stabilized; high strength low alloy; and 

the substrate for motor lamination steel 

may also enter under the following tariff 

numbers: 7225.11.00.00, 7225.19.00.00, 

7225.30.30.50, 7225.30.70.00, 

7225.40.70.00, 7225.99.00.90, 

7226.11.10.00, 7226.11.90.30, 

7226.11.90.60, 7226.19.10.00, 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 75, No. 232 / Friday, December 3, 2010 / Notices 75457 

7226.19.90.00, 7226.91.50.00, 

7226.91.70.00, 7226.91.80.00, and 

7226.99.00.00. Although the HTSUS 

subheadings are provided for 

convenience and customs purposes, the 

written description of the merchandise 

covered by the order is dispositive. 

Analysis of Comments Received 

All issues raised in this review are 

addressed in the Issues and Decision 

Memorandum (Decision Memorandum) 

from Susan H. Kuhbach, Acting Deputy 

Assistant Secretary for Antidumping 

and Countervailing Duty Operations, to 

Ronald K. Lorentzen, Deputy Assistant 

Secretary for Import Administration, 

dated concurrently with this notice, 

which is hereby adopted by this notice. 

Parties can find a complete discussion 

of all issues raised in this review and 

the corresponding recommendation in 

this public memorandum which is on 

file in the Central Records Unit, Room 

7046 of the main Commerce building. In 

addition, a complete version of the 

Decision Memorandum can be accessed 

directly on the Internet at http:// 

ia.ita.doc.gov/frn. The paper copy and 

electronic version of the Decision 

Memorandum are identical in content. 

Final Results of Review 

The Department determines that 

revocation of the CVD order would 

likely lead to continuation or recurrence 

of a countervailable subsidy. The net 

countervailable subsidy likely to prevail 

if the order were revoked is zero percent 

for USIMINAS/COSIPA, CSN, and all 

other companies. 

This notice also serves as the only 

reminder to parties subject to 

administrative protective orders (APO) 

of their responsibility concerning the 

return or destruction of proprietary 

information disclosed under APO in 

accordance with 19 CFR 351.305. 

Timely notification of the return or 

destruction of APO materials or 

conversion to judicial protective orders 

is hereby requested. Failure to comply 

with the regulations and terms of an 

APO is a violation which is subject to 

sanction. 

We are issuing and publishing the 

results and notice in accordance with 

sections 751(c), 752, and 777(i)(1) of the 

Act. 

Dated: November 29, 2010. 

Ronald K. Lorentzen, 

Deputy Assistant Secretary for Import 

Administration. 

[FR Doc. 2010–30383 Filed 12–2–10; 8:45 am] 

BILLING CODE 3510–DS–P 

DEPARTMENT OF COMMERCE 

National Institute of Standards and 

Technology 

Advisory Committee on Earthquake 

Hazards Reduction Meeting 

AGENCY: National Institute of Standards 

and Technology, Department of 

Commerce. 

ACTION: Notice of open meeting. 

SUMMARY: The Advisory Committee on 

Earthquake Hazards Reduction (ACEHR 

or Committee), will hold a meeting via 

conference call on Tuesday, December 

21, 2010 from 1 p.m. to 3:30 p.m. 

Eastern Daylight Time (EDT). The 

primary purpose of this meeting is to 

develop recommendations for public 

release on the upcoming New Madrid 

Bicentennial events. Interested members 

of the public will be able to participate 

in the meeting from remote locations by 

calling into a central phone number. 

DATES: The ACEHR will hold a meeting 

via conference call on Tuesday, 

December 21, 2010, from 1 p.m. until 

3:30 p.m. Eastern Daylight Time (EDT). 

The meeting will be open to the public. 

Interested parties may participate in the 

meeting from their remote location. 

ADDRESSES: Questions regarding the 

meeting should be sent to National 

Earthquake Hazards Reduction Program 

Director, National Institute of Standards 

and Technology, 100 Bureau Drive, Mail 

Stop 8604, Gaithersburg, Maryland 

20899–8604. For instructions on how to 

participate in the meeting, please see 

the SUPPLEMENTARY INFORMATION section 

of this notice. 

FOR FURTHER INFORMATION CONTACT: Dr. 

Jack Hayes, National Earthquake 

Hazards Reduction Program Director, 

National Institute of Standards and 

Technology, 100 Bureau Drive, Mail 

Stop 8604, Gaithersburg, Maryland 

20899–8604. Dr. Hayes’ e-mail address 

is jack.hayes@nist.gov and his phone 

number is (301) 975–5640. 

SUPPLEMENTARY INFORMATION: The 

Committee was established in 

accordance with the requirements of 

Section 103 of the NEHRP 

Reauthorization Act of 2004 (Pub. L. 

108–360). The Committee is composed 

of 15 members appointed by the 

Director of NIST, who were selected for 

their technical expertise and experience, 

established records of distinguished 

professional service, and their 

knowledge of issues affecting the 

National Earthquake Hazards Reduction 

Program. In addition, the Chairperson of 

the U.S. Geological Survey (USGS) 

Scientific Earthquake Studies Advisory 

Committee (SESAC) serves in an exofficio capacity on the Committee. The 

Committee assesses: 

• Trends and developments in the 

science and engineering of earthquake 

hazards reduction; 

• The effectiveness of NEHRP in 

performing its statutory activities 

(improved design and construction 

methods and practices; land use 

controls and redevelopment; prediction 

techniques and early-warning systems; 

coordinated emergency preparedness 

plans; and public education and 

involvement programs); 

• Any need to revise NEHRP; and 

• The management, coordination, 

implementation, and activities of 

NEHRP. 

Background information on NEHRP 

and the Advisory Committee is available 

at http://nehrp.gov/. 

Pursuant to the Federal Advisory 

Committee Act, 5 U.S.C. app., notice is 

hereby given that the Advisory 

Committee on Earthquake Hazards 

Reduction (ACEHR) will hold a meeting 

via conference call on Tuesday, 

December 21, 2010, from 1 p.m. until 

3:30 p.m. Eastern Daylight Time (EDT). 

There will be no central meeting 

location. The public is invited to 

participate in the meeting by calling in 

from remote locations. The primary 

purpose of this meeting is to develop 

recommendations for public release on 

the upcoming New Madrid Bicentennial 

events. 

Members of the public who would 

like to listen to the meeting are required 

to register by close of business Tuesday, 

December 14, 2010. Please submit your 

name, time of participation, e-mail 

address, and phone number to Michelle 

Harman. At the time of registration, 

participants will be provided with 

detailed instructions on how to dial in 

from a remote location in order to 

participate. Michelle Harman’s e-mail 

address is michelle.harman@nist.gov, 

and her phone number is (301) 975– 

5324. 

Individuals and representatives of 

organizations who would like to offer 

comments and suggestions related to the 

Committee’s affairs are invited to 

request detailed instructions on how to 

dial in from a remote location to 

participate in the meeting. 

Approximately fifteen minutes will be 

reserved from 3:15 p.m.–3:30 p.m. 

Eastern Daylight Time (EDT) for public 

comments; speaking times will be 

assigned on a first-come, first-serve 

basis. The amount of time per speaker 

will be determined by the number of 

requests received, but is likely to be 

about 3 minutes each. Questions from 

the public will not be considered during 

this period. Speakers who wish to 

mstockstill on DSKH9S0YB1PROD with NOTICES

62566 Federal Register / Vol. 75, No. 196 / Tuesday, October 12, 2010 / Notices 

refer to the docket number (‘‘Docket No. 

2759’’) in a prominent place on the 

cover page and/or the first page. The 

Commission’s rules authorize filing 

submissions with the Secretary by 

facsimile or electronic means only to the 

extent permitted by section 201.8 of the 

rules (see Handbook for Electronic 

Filing Procedures, http://www.usitc.gov/ 

secretary/fed_reg_notices/rules/ 

documents/ 

handbook_on_electronic_filing.pdf ). 

Persons with questions regarding 

electronic filing should contact the 

Secretary (202–205–2000). 

Any person desiring to submit a 

document to the Commission in 

confidence must request confidential 

treatment. All such requests should be 

directed to the Secretary to the 

Commission and must include a full 

statement of the reasons why the 

Commission should grant such 

treatment. See 19 CFR 201.6. Documents 

for which confidential treatment by the 

Commission is properly sought will be 

treated accordingly. All nonconfidential 

written submissions will be available for 

public inspection at the Office of the 

Secretary. 

This action is taken under the 

authority of section 337 of the Tariff Act 

of 1930, as amended (19 U.S.C. 1337), 

and of sections 201.10 and 210.50(a)(4) 

of the Commission’s Rules of Practice 

and Procedure (19 CFR 201.10, 

210.50(a)(4)). 

Issued: October 6, 2010. 

By order of the Commission. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. 2010–25547 Filed 10–8–10; 8:45 am] 

BILLING CODE 7020–02–P 

INTERNATIONAL TRADE 

COMMISSION 

[Investigation Nos. 701–TA–384 and 731– 

TA–806–808 (Second Review)] 

Hot-Rolled Flat-Rolled Carbon-Quality 

Steel Products From Brazil, Japan, and 

Russia 

AGENCY: United States International 

Trade Commission. 

ACTION: Scheduling of full five-year 

reviews concerning the countervailing 

duty order on hot-rolled flat-rolled 

carbon-quality steel products (‘‘hotrolled steel’’) from Brazil, the 

antidumping duty orders on hot-rolled 

steel from Brazil and Japan, and the 

suspended antidumping duty 

investigation on hot-rolled steel from 

Russia. 

SUMMARY: The Commission hereby gives 

notice of the scheduling of full reviews 

pursuant to section 751(c)(5) of the 

Tariff Act of 1930 (19 U.S.C. 1675(c)(5)) 

(the Act) to determine whether 

revocation of the countervailing duty 

order on hot-rolled steel from Brazil, the 

antidumping duty orders on hot-rolled 

steel from Brazil and Japan, and/or the 

suspended investigation on hot-rolled 

steel from Russia would be likely to lead 

to continuation or recurrence of material 

injury within a reasonably foreseeable 

time. The Commission has determined 

that these reviews are extraordinarily 

complicated, and will therefore exercise 

its authority to extend the review period 

by up to 90 days pursuant to 19 U.S.C. 

1675(c)(5)(B). For further information 

concerning the conduct of these reviews 

and rules of general application, consult 

the Commission’s Rules of Practice and 

Procedure, part 201, subparts A through 

E (19 CFR part 201), and part 207, 

subparts A, D, E, and F (19 CFR part 

207). 

DATES: Effective Date: October 1, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Joshua Kaplan (202–205–3184), Office 

of Investigations, U.S. International 

Trade Commission, 500 E Street, SW., 

Washington, DC 20436. Hearingimpaired persons can obtain 

information on this matter by contacting 

the Commission’s TDD terminal on 202– 

205–1810. Persons with mobility 

impairments who will need special 

assistance in gaining access to the 

Commission should contact the Office 

of the Secretary at 202–205–2000. 

General information concerning the 

Commission may also be obtained by 

accessing its Internet server (http:// 

www.usitc.gov). The public record for 

these reviews may be viewed on the 

Commission’s electronic docket (EDIS) 

at http://edis.usitc.gov. 

SUPPLEMENTARY INFORMATION: 

Background. On July 6, 2010, the 

Commission determined that responses 

to its notice of institution of the subject 

five-year reviews were such that full 

reviews pursuant to section 751(c)(5) of 

the Act should proceed (75 FR 42782, 

July 22, 2010). A record of the 

Commissioners’ votes, the 

Commission’s statement on adequacy, 

and any individual Commissioner’s 

statements are available from the Office 

of the Secretary and at the 

Commission’s Web site. 

Participation in the reviews and 

public service list. Persons, including 

industrial users of the subject 

merchandise and, if the merchandise is 

sold at the retail level, representative 

consumer organizations, wishing to 

participate in these reviews as parties 

must file an entry of appearance with 

the Secretary to the Commission, as 

provided in section 201.11 of the 

Commission’s rules, by 45 days after 

publication of this notice. A party that 

filed a notice of appearance following 

publication of the Commission’s notice 

of institution of the reviews need not 

file an additional notice of appearance. 

The Secretary will maintain a public 

service list containing the names and 

addresses of all persons, or their 

representatives, who are parties to the 

reviews. 

Limited disclosure of business 

proprietary information (BPI) under an 

administrative protective order (APO) 

and BPI service list. Pursuant to section 

207.7(a) of the Commission’s rules, the 

Secretary will make BPI gathered in 

these reviews available to authorized 

applicants under the APO issued in the 

reviews, provided that the application is 

made by 45 days after publication of 

this notice. Authorized applicants must 

represent interested parties, as defined 

by 19 U.S.C. 1677(9), who are parties to 

the reviews. A party granted access to 

BPI following publication of the 

Commission’s notice of institution of 

the reviews need not reapply for such 

access. A separate service list will be 

maintained by the Secretary for those 

parties authorized to receive BPI under 

the APO. 

Staff report. The prehearing staff 

report in the reviews will be placed in 

the nonpublic record on March 17, 

2011, and a public version will be 

issued thereafter, pursuant to section 

207.64 of the Commission’s rules. 

Hearing. The Commission will hold a 

hearing in connection with the reviews 

beginning at 9:30 a.m. on April 6, 2011, 

at the U.S. International Trade 

Commission Building. Requests to 

appear at the hearing should be filed in 

writing with the Secretary to the 

Commission on or before March 29, 

2011. A nonparty who has testimony 

that may aid the Commission’s 

deliberations may request permission to 

present a short statement at the hearing. 

All parties and nonparties desiring to 

appear at the hearing and make oral 

presentations should attend a 

prehearing conference to be held at 9:30 

a.m. on April 1, 2011, at the U.S. 

International Trade Commission 

Building. Oral testimony and written 

materials to be submitted at the public 

hearing are governed by sections 

201.6(b)(2), 201.13(f), 207.24, and 

207.66 of the Commission’s rules. 

Parties must submit any request to 

present a portion of their hearing 

testimony in camera no later than 7 

business days prior to the date of the 

hearing. 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 196 / Tuesday, October 12, 2010 / Notices 62567 

Written submissions. Each party to the 

reviews may submit a prehearing brief 

to the Commission. Prehearing briefs 

must conform with the provisions of 

section 207.65 of the Commission’s 

rules; the deadline for filing is March 

28, 2011. Parties may also file written 

testimony in connection with their 

presentation at the hearing, as provided 

in section 207.24 of the Commission’s 

rules, and posthearing briefs, which 

must conform with the provisions of 

section 207.67 of the Commission’s 

rules. The deadline for filing 

posthearing briefs is April 15, 2011; 

witness testimony must be filed no later 

than three days before the hearing. In 

addition, any person who has not 

entered an appearance as a party to the 

reviews may submit a written statement 

of information pertinent to the subject of 

the reviews on or before April 15, 2011. 

On May 11, 2011, the Commission will 

make available to parties all information 

on which they have not had an 

opportunity to comment. Parties may 

submit final comments on this 

information on or before May 13, 2011, 

but such final comments must not 

contain new factual information and 

must otherwise comply with section 

207.68 of the Commission’s rules. All 

written submissions must conform with 

the provisions of section 201.8 of the 

Commission’s rules; any submissions 

that contain BPI must also conform with 

the requirements of sections 201.6, 

207.3, and 207.7 of the Commission’s 

rules. The Commission’s rules do not 

authorize filing of submissions with the 

Secretary by facsimile or electronic 

means, except to the extent permitted by 

section 201.8 of the Commission’s rules, 

as amended, 67 FR 68036 (November 8, 

2002). Even where electronic filing of a 

document is permitted, certain 

documents must also be filed in paper 

form, as specified in II (C) of the 

Commission’s Handbook on Electronic 

Filing Procedures, 67 FR 68168, 68173 

(November 8, 2002). 

Additional written submissions to the 

Commission, including requests 

pursuant to section 201.12 of the 

Commission’s rules, shall not be 

accepted unless good cause is shown for 

accepting such submissions, or unless 

the submission is pursuant to a specific 

request by a Commissioner or 

Commission staff. 

In accordance with sections 201.16(c) 

and 207.3 of the Commission’s rules, 

each document filed by a party to the 

reviews must be served on all other 

parties to the reviews (as identified by 

either the public or BPI service list), and 

a certificate of service must be timely 

filed. The Secretary will not accept a 

document for filing without a certificate 

of service. 

Authority: These reviews are being 

conducted under authority of title VII of the 

Tariff Act of 1930; this notice is published 

pursuant to section 207.62 of the 

Commission’s rules. 

Issued: October 6, 2010. 

By order of the Commission. 

Marilyn R. Abbott, 

Secretary to the Commission. 

[FR Doc. 2010–25551 Filed 10–8–10; 8:45 am] 

BILLING CODE 7020–02–P 

DEPARTMENT OF JUSTICE 

Notice of Lodging of Consent Decree 

Under the Clean Air Act 

Notice is hereby given that on 

September 30, 2010, a proposed Consent 

Decree in United States v. BP Products 

North America Inc, (Civil No. 4:10-cv3569), was lodged with the United 

States District Court for the Southern 

District of Texas. 

This settlement relates to BP Products 

North America Inc.’s (‘‘BP Products’’) 

petroleum refinery located in Texas 

City, Texas (the ‘‘Texas City Refinery’’). 

The United States alleges civil claims 

against BP Products for violations at the 

Texas City Refinery of Clean Air Act 

(‘‘CAA’’) Section 112(r) and the 

Chemical Accident Prevention 

Provisions promulgated at 40 CFR part 

68. The United States’ CAA claims, 

which are stated in a Complaint also 

filed on September 30, 2010 in the 

above-referenced matter, arise from 

three events—two fires and a leak of 

regulated substances—at the Texas City 

Refinery. The Complaint also alleges 

violations of Part 68 reporting 

requirements. 

Under the proposed Consent Decree, 

BP Products will pay a civil penalty to 

the United States in the amount of $15 

million. The Consent Decree also 

requires BP Products to regularly report 

to EPA on indicators of process safety at 

the Texas City Refinery, including: (1) 

The status of equipment inspections, (2) 

whether operations employees have 

received process safety training, and (3) 

whether additional accidental releases 

of regulated substances have occurred at 

the Texas City Refinery. 

The Department of Justice will receive 

comments relating to the Consent 

Decree for a period of thirty (30) days 

from the date of this publication. 

Comments should be addressed to the 

Assistant Attorney General, 

Environment and Natural Resources 

Division, and either e-mailed to 

pubcomment-ees.enrd@usdoj.gov or 

mailed to P.O. Box 7611, U.S. 

Department of Justice, Washington, DC 

20044–7611, and should refer to United 

States v. BP Products North America 

Inc., Civil Action No. 4:10-cv-3569 (S.D. 

Tex.), and D.J. Ref. 90–5–2–1–08741. 

The Consent Decree may be examined 

at the Office of the United States 

Attorney, Southern District of Texas, 

919 Milam, Suite 1500, Houston, TX 

77208 and at U.S. EPA Region 6, 1445 

Ross Avenue, Dallas, Texas 75202. 

During the public comment period, the 

Consent Decree may also be examined 

on the following Department of Justice 

Web site: http://www.usdoj.gov/enrd/ 

Consent_Decrees.html. A copy of the 

Consent Decree may also be obtained by 

mail from the Consent Decree Library, 

P.O. Box 7611, U.S. Department of 

Justice, Washington, DC 20044–7611 or 

by faxing or e-mailing a request to Tonia 

Fleetwood (tonia.fleetwood@usdoj.gov), 

fax no. (202) 514–0097, phone 

confirmation number (202) 514–1547. In 

requesting a copy by mail, from the 

Consent Decree Library, please enclose 

a check in the amount of $8.50 (25 cents 

per page reproduction cost) for the 

Consent Decree payable to the U.S. 

Treasury. 

Maureen L. Katz, 

Assistant Chief, Environmental Enforcement 

Section, Environment and Natural Resources 

Division. 

[FR Doc. 2010–25520 Filed 10–8–10; 8:45 am] 

BILLING CODE 4410–15–P 

DEPARTMENT OF JUSTICE 

Notice of Lodging of Settlement 

Agreement 

Notice is hereby given that on October 

5, 2010, a proposed settlement 

agreement in United States v. Sunoco, 

Inc., et al., Civil Action No. 05–6336, 

was lodged with the United States 

District Court for the Eastern District of 

Pennsylvania. 

In this action the United States 

sought, under the Pennsylvania Uniform 

Contribution Among Tortfeasors Act, 42 

Pa. Cons. Stat. Ann. §§ 8321–27, and the 

Pennsylvania Storage Tank and Spill 

Prevention Act, 35 Pa. Stat. Ann. 

§§ 6021.101–.2104, the recovery of 

environmental cleanup costs incurred 

by the United States at the former 

Defense Supply Center Philadelphia 

(‘‘DSCP’’) property located at 2800 South 

20th Street in Philadelphia, 

Pennsylvania. The United States also 

alleged—and sought an order under the 

Pennsylvania Clean Streams Law, 35 Pa. 

Stat. Ann. §§ 691.1–.1001, directing the 

defendants to abate—ongoing migration 

of petroleum hydrocarbons from a 


srobinson on DSKHWCL6B1PROD with NOTICES
APPENDIX B

HEARING WITNESSES

B-1
B-2
CALENDAR OF PUBLIC HEARING

Those listed below appeared as witnesses at the United States International Trade

Commission’s hearing:

Subject: Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from

Brazil, Japan, and Russia

Inv. Nos.: 701-TA-384 and 731-TA-806-808 (Second Review)

Date and Time: April 6, 2011 - 9:30 a.m.

Sessions were held in connection with these reviews in the Main Hearing Room (room 101),

500 E Street, SW, Washington, D.C.

CONGRESSIONAL APPEARANCES:

The Honorable Mark Pryor, United States Senator, Arkansas

The Honorable Peter J. Visclosky, U.S. Representative, 1st District, Indiana

The Honorable Tim Murphy, U.S. Representative, 18th District, Pennsylvania

The Honorable Jason Altmire, U.S. Representative, 4th District, Pennsylvania

The Honorable Mo Brooks, U.S. Representative, 5th District, Alabama

OPENING STATEMENTS:

In Support of Continuation of Orders (Alan H. Price, Wiley Rein LLP)

In Opposition to Continuation of Orders (Craig A. Lewis, Hogan Lovells)

B-3
In Support of the Continuation of

 the Countervailing Duty Order, Antidumping

 Duty Orders, and Suspension Agreement:

Skadden, Arps, Slate, Meagher & Flom LLP 

Washington, D.C.

on behalf of

United States Steel Corporation (“U.S. Steel”)

John P. Surma, Jr.,Chairman and Chief Executive 

Officer, U.S. Steel

Joseph R. Scherrbaum, Jr., Vice President, Sales,

U.S. Steel

Robert Y. Kopf, III, General Manager, North American

Flat Roll Marketing, U.S. Steel

Bert J. Phillips, General Manager, Automotive, U.S. Steel

Dr. Seth T. Kaplan, Principal, The Brattle Group

Robert E. Lighthizer )

James C. Hecht )

) – OF COUNSEL

Stephen P. Vaughn )

Stephen J. Narkin )

Wiley Rein LLP

Washington, D.C.

on behalf of

Nucor Corporation (“Nucor”)

Daniel R. DiMicco, Chief Executive Officer

and Chairman, Nucor 

Rick Blume, Director, Sales and Marketing

Manager, Nucor

B-4
In Support of the Continuation of

 the Countervailing Duty Order, Antidumping Duty

 Orders, and Suspension Agreement (continued):

Dr. Seth T. Kaplan, Principal, The Brattle Group 

Alan H. Price )

) – OF COUNSEL

Timothy C. Brightbill )

Kelley Drye & Warren LLP

Washington, D.C.

on behalf of

ArcelorMittal USA LLC

Daniel Mull, Executive Vice President, Sales and

Marketing, ArcelorMittal USA LLC

Roy Platz, Director, Marketing, ArcelorMittal 

USA LLC

Thomas Conway, International Vice President,

United Steelworkers of America, 

AFL-CIO/CLC

Paul C. Rosenthal )

) – OF COUNSEL

Kathleen W. Cannon )

Schagrin Associates

Washington, D.C.

on behalf of

SSAB N.A.D.

Gallatin Steel Company

Steel Dynamics, Inc.

Tobin Pospisil, President, Gallatin Steel Company

Keith Busse, Chairman and Chief Executive Officer, 

Steel Dynamics, Inc.

Roger B. Schagrin ) – OF COUNSEL

B-5
In Opposition to the Continuation to the

 Countervailing Duty Order, Antidumping Duty

 Orders, and Suspension Agreement:

Winston & Strawn LLP

Washington, D.C.

on behalf of

Usinas Siderurgicas De Minas Gerais (“Usiminas”)

Thomas J. Prusa, Professor of Economics,

Rutgers University

Christopher A. Dunn )

) – OF COUNSEL

Matthew P. McCullough )

Gibson, Dunn & Crutcher LLP

Washington, D.C.

on behalf of

JFE Steel Corporation

Kobe Steel, Ltd.

Nippon Steel Corporation

Nisshin Steel Co., Ltd.

Sumitomo Metal Industries, Ltd.

Takeo Aoyama, Executive Vice President, General

Manager, Chicago Office, Nippon Steel U.S.A

Inc.

Thomas J. Prusa, Professor of Economics,

Rutgers University

J. Christopher Wood ) – OF COUNSEL

B-6
In Opposition to the Continuation to the 

 Countervailing Duty Order, Antidumping Duty

 Orders, and Suspension Agreement (continued):

Hogan Lovells

Washington, D.C.

on behalf of

Companhia Siderurgica Nacional (“CSN”)

Manuel Raimundez Alvarez, Export Manager,

Companhia Siderurgica Nacional

Thomas J. Prusa, Professor of Economics,

Rutgers University

Craig A. Lewis )

) – OF COUNSEL

Jonathan T. Stoel )

Hogan Lovells

Washington, D.C.

on behalf of

Ford Motor Company (“Ford”)

Paul K. Vandevert, International Trade Attorney,

Ford

Mark S. McConnell )

) – OF COUNSEL

Deen Kaplan )

REBUTTAL/CLOSING REMARKS

In Support of Continuation of Orders (Paul C. Rosenthal, 

Kelley Drye & Warren, and Roger B. Schagrin, 

Schagrin Associates) 

In Opposition to Continuation of Orders (Christopher A. Dunn, 

Winston & Strawn LLP, and Mark S. McConnell,

Hogan Lovells)

B-7

APPENDIX C

SUMMARY DATA

C-1

Table C-1

Hot-rolled steel: Summary data concerning the total U.S. market, 2005-10

(Quantity=short tons, value=1,000 dollars, unit values, unit labor costs, and unit expenses are per short ton; period changes=percent, except where noted)

Reported data Period changes

Item 2005 2006 2007 2008 2009 2010 2005-10 2005-06 2006-07 2007-08 2008-09 2009-10

U.S. consumption quantity:

 Amount . . . . . . . . . . . . . . . . . . . 65,860,369 71,625,604 63,674,080 59,636,710 40,402,675 56,090,768 -14.8 8.8 -11.1 -6.3 -32.3 38.8

 Producers' share (1) . . . . . . . . . 94.1 91.0 94.7 93.9 94.4 94.5 0.4 -3.1 3.7 -0.8 0.4 0.1

 Importers' share (1):

 Brazil . . . . . . . . . . . . . . . . . . . . 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -0.0 -0.0 0.0 0.0

 Japan . . . . . . . . . . . . . . . . . . . 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -0.0 0.0

 Russia . . . . . . . . . . . . . . . . . . . 0.5 1.1 0.2 0.1 0.0 0.2 -0.2 0.6 -0.9 -0.1 -0.1 0.2

 Subtotal . . . . . . . . . . . . . . . . . 0.5 1.1 0.2 0.2 0.0 0.3 -0.2 0.7 -0.9 -0.1 -0.1 0.2

 All other sources . . . . . . . . . . . 5.4 7.9 5.0 5.9 5.6 5.3 -0.1 2.5 -2.9 0.9 -0.3 -0.3

 Total imports . . . . . . . . . . . . . 5.9 9.0 5.3 6.1 5.6 5.5 -0.4 3.1 -3.7 0.8 -0.4 -0.1

U.S. consumption value:

 Amount . . . . . . . . . . . . . . . . . . . 34,776,996 39,556,451 34,770,938 45,600,856 21,174,462 33,801,040 -2.8 13.7 -12.1 31.1 -53.6 59.6

 Producers' share (1) . . . . . . . . . 93.9 91.5 94.7 93.7 94.3 94.3 0.4 -2.4 3.2 -1.1 0.6 0.1

 Importers' share (1):

 Brazil . . . . . . . . . . . . . . . . . . . . 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 -0.0 -0.0 0.0 0.0

 Japan . . . . . . . . . . . . . . . . . . . 0.0 0.0 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 -0.0

 Russia . . . . . . . . . . . . . . . . . . . 0.5 1.0 0.2 0.2 0.0 0.2 -0.3 0.6 -0.8 -0.0 -0.2 0.2

 Subtotal . . . . . . . . . . . . . . . . . 0.5 1.1 0.2 0.2 0.1 0.3 -0.2 0.6 -0.8 -0.0 -0.1 0.2

 All other sources . . . . . . . . . . . 5.6 7.4 5.0 6.1 5.7 5.4 -0.2 1.8 -2.4 1.1 -0.5 -0.3

 Total imports . . . . . . . . . . . . . 6.1 8.5 5.3 6.3 5.7 5.7 -0.4 2.4 -3.2 1.1 -0.6 -0.1

U.S. imports from:

 Brazil:

 Quantity . . . . . . . . . . . . . . . . . . 0 2,237 50 46 148 512 (2) (2) -97.7 -8.7 221.9 245.9

 Value . . . . . . . . . . . . . . . . . . . . 0 1,856 37 48 128 402 (2) (2) -98.0 30.4 165.3 214.5

 Unit value . . . . . . . . . . . . . . . . ----- $830 $733 $1,047 $863 $785 (2) (2) -11.7 42.8 -17.6 -9.1

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** *** *** *** ***

 Japan:

 Quantity . . . . . . . . . . . . . . . . . . 5,009 11,795 15,504 15,577 9,053 15,033 200.1 135.5 31.4 0.5 -41.9 66.1

 Value . . . . . . . . . . . . . . . . . . . . 3,911 8,549 10,263 13,666 10,897 14,636 274.2 118.6 20.1 33.2 -20.3 34.3

 Unit value . . . . . . . . . . . . . . . . $781 $725 $662 $877 $1,204 $974 24.7 -7.2 -8.7 32.5 37.2 -19.1

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** *** *** *** ***

 Russia:

 Quantity . . . . . . . . . . . . . . . . . . 299,275 789,288 136,293 76,425 1,708 125,079 -58.2 163.7 -82.7 -43.9 -97.8 7,222.1

 Value . . . . . . . . . . . . . . . . . . . . 169,124 411,375 69,061 72,989 1,751 69,708 -58.8 143.2 -83.2 5.7 -97.6 3,880.3

 Unit value . . . . . . . . . . . . . . . . $565 $521 $507 $955 $1,025 $557 -1.4 -7.8 -2.8 88.5 7.3 -45.6

 Ending inventory quantity . . . . *** *** *** *** *** *** *** *** *** *** *** ***

 Subtotal:

 Quantity . . . . . . . . . . . . . . . . . . 304,284 803,320 151,847 92,048 10,909 140,624 -53.8 164.0 -81.1 -39.4 -88.1 1,189.0

 Value . . . . . . . . . . . . . . . . . . . . 173,035 421,780 79,361 86,703 12,776 84,745 -51.0 143.8 -81.2 9.3 -85.3 563.3

 Unit value . . . . . . . . . . . . . . . . $569 $525 $523 $942 $1,171 $603 6.0 -7.7 -0.5 80.2 24.3 -48.5

 Ending inventory quantity . . . . 10,381 20,596 9,595 31,423 5,317 12,870 24.0 98.4 -53.4 227.5 -83.1 142.1

 All other sources:

 Quantity . . . . . . . . . . . . . . . . . . 3,564,545 5,639,254 3,196,799 3,532,867 2,263,178 2,955,493 -17.1 58.2 -43.3 10.5 -35.9 30.6

 Value . . . . . . . . . . . . . . . . . . . . 1,948,688 2,937,894 1,752,308 2,799,480 1,203,403 1,828,647 -6.2 50.8 -40.4 59.8 -57.0 52.0

 Unit value . . . . . . . . . . . . . . . . $547 $521 $548 $792 $532 $619 13.2 -4.7 5.2 44.6 -32.9 16.4

 Ending inventory quantity . . . . 137,535 121,753 47,962 281,431 116,272 94,568 -31.2 -11.5 -60.6 486.8 -58.7 -18.7

 All sources:

 Quantity . . . . . . . . . . . . . . . . . . 3,868,829 6,442,574 3,348,646 3,624,915 2,274,087 3,096,118 -20.0 66.5 -48.0 8.3 -37.3 36.1

 Value . . . . . . . . . . . . . . . . . . . . 2,121,722 3,359,674 1,831,669 2,886,183 1,216,179 1,913,392 -9.8 58.3 -45.5 57.6 -57.9 57.3

 Unit value . . . . . . . . . . . . . . . . $548 $521 $547 $796 $535 $618 12.7 -4.9 4.9 45.6 -32.8 15.6

 Ending inventory quantity . . . . 147,916 142,349 57,557 312,854 121,589 107,438 -27.4 -3.8 -59.6 443.6 -61.1 -11.6

U.S. producers':

 Average capacity quantity . . . . . 81,533,511 82,208,701 82,201,768 81,842,235 78,225,675 79,679,215 -2.3 0.8 -0.0 -0.4 -4.4 1.9

 Production quantity . . . . . . . . . . 62,859,112 65,890,974 61,878,281 56,497,372 39,635,900 54,913,361 -12.6 4.8 -6.1 -8.7 -29.8 38.5

 Capacity utilization (1) . . . . . . . . 77.1 80.2 75.3 69.0 50.7 68.9 -8.2 3.1 -4.9 -6.2 -18.4 18.2

 U.S. shipments:

 Quantity . . . . . . . . . . . . . . . . . . 61,991,540 65,183,030 60,325,434 56,011,795 38,128,588 52,994,650 -14.5 5.1 -7.5 -7.2 -31.9 39.0

 Value . . . . . . . . . . . . . . . . . . . . 32,655,274 36,196,777 32,939,269 42,714,673 19,958,283 31,887,648 -2.4 10.8 -9.0 29.7 -53.3 59.8

 Unit value . . . . . . . . . . . . . . . . $527 $555 $546 $763 $523 $602 14.2 5.4 -1.7 39.7 -31.4 15.0

 Export shipments:

 Quantity . . . . . . . . . . . . . . . . . . 1,084,187 756,886 1,462,893 1,353,996 1,155,035 1,653,241 52.5 -30.2 93.3 -7.4 -14.7 43.1

 Value . . . . . . . . . . . . . . . . . . . . 595,336 451,987 796,552 1,144,536 581,216 1,004,170 68.7 -24.1 76.2 43.7 -49.2 72.8

 Unit value . . . . . . . . . . . . . . . . $549 $597 $545 $845 $503 $607 10.6 8.8 -8.8 55.2 -40.5 20.7

 Ending inventory quantity . . . . . 1,809,058 1,759,945 1,849,851 1,000,610 1,352,124 1,617,837 -10.6 -2.7 5.1 -45.9 35.1 19.7

 Inventories/total shipments (1) . 2.9 2.7 3.0 1.7 3.4 3.0 0.1 -0.2 0.3 -1.2 1.7 -0.5

 Production workers . . . . . . . . . . 23,757 22,968 23,384 24,599 20,187 21,682 -8.7 -3.3 1.8 5.2 -17.9 7.4

 Hours worked (1,000s) . . . . . . . 55,396 52,337 51,768 51,573 38,130 47,358 -14.5 -5.5 -1.1 -0.4 -26.1 24.2

 Wages paid ($1,000s) . . . . . . . . 1,580,898 1,627,286 1,688,018 1,743,741 1,209,585 1,540,481 -2.6 2.9 3.7 3.3 -30.6 27.4

 Hourly wages . . . . . . . . . . . . . . . $28.54 $31.09 $32.61 $33.81 $31.72 $32.53 14.0 8.9 4.9 3.7 -6.2 2.5

 Productivity (tons/1,000 hours) . 1,134.7 1,259.0 1,195.3 1,095.5 1,039.5 1,159.5 2.2 10.9 -5.1 -8.3 -5.1 11.5

 Unit labor costs . . . . . . . . . . . . . $25.15 $24.70 $27.28 $30.86 $30.52 $28.05 11.5 -1.8 10.5 13.1 -1.1 -8.1

 Net sales:

 Quantity . . . . . . . . . . . . . . . . . . 61,217,248 64,467,613 60,308,179 56,681,495 38,665,824 53,701,466 -12.3 5.3 -6.5 -6.0 -31.8 38.9

 Value . . . . . . . . . . . . . . . . . . . . 32,838,165 36,284,259 33,163,647 43,492,778 20,467,750 32,440,446 -1.2 10.5 -8.6 31.1 -52.9 58.5

 Unit value . . . . . . . . . . . . . . . . $536 $563 $550 $767 $529 $604 12.6 4.9 -2.3 39.5 -31.0 14.1

 Cost of goods sold (COGS) . . . . 26,727,626 28,836,551 29,328,706 36,666,888 22,222,065 30,772,148 15.1 7.9 1.7 25.0 -39.4 38.5

 Gross profit or (loss) . . . . . . . . . 6,110,539 7,447,708 3,834,941 6,825,890 (1,754,315) 1,668,298 -72.7 21.9 -48.5 78.0 (3) (3)

 SG&A expenses . . . . . . . . . . . . 880,886 887,239 775,461 785,364 567,477 909,717 3.3 0.7 -12.6 1.3 -27.7 60.3

 Operating income or (loss) . . . . 5,229,653 6,560,469 3,059,480 6,040,526 (2,321,792) 758,581 -85.5 25.4 -53.4 97.4 (3) (3)

 Capital expenditures . . . . . . . . . *** *** *** *** *** *** *** *** *** *** *** ***

 Unit COGS . . . . . . . . . . . . . . . . $437 $447 $486 $647 $575 $573 31.2 2.5 8.7 33.0 -11.2 -0.3

 Unit SG&A expenses . . . . . . . . . $14 $14 $13 $14 $15 $17 17.7 -4.4 -6.6 7.8 5.9 15.4

 Unit operating income or (loss) . $85 $102 $51 $107 ($60) $14 -83.5 19.1 -50.1 110.1 (3) (3)

 COGS/sales (1) . . . . . . . . . . . . . 81.4 79.5 88.4 84.3 108.6 94.9 13.5 -1.9 9.0 -4.1 24.3 -13.7

 Operating income or (loss)/

 sales (1) . . . . . . . . . . . . . . . . . 15.9 18.1 9.2 13.9 (11.3) 2.3 -13.6 2.2 -8.9 4.7 -25.2 13.7

 (1) "Reported data" are in percent and "period changes" are in percentage points.

 (2) Not applicable.

 (3) Undefined.

Note.--Financial data are reported on a fiscal year basis and may not necessarily be comparable to data reported on a calendar year basis. Because of rounding, figures may not add to the totals shown.

Unit values and shares are calculated from the unrounded figures.

Source: Compiled from data submitted in response to Commission questionnaires and from official Commerce statistics.

C-3
 
APPENDIX D

RESPONSES OF U.S. PRODUCERS, U.S. IMPORTERS, 

U.S. PURCHASERS, AND FOREIGN PRODUCERS 

CONCERNING THE SIGNIFICANCE OF THE SUBJECT ORDERS AND

SUSPENSION AGREEMENT AND THE LIKELY 

EFFECTS OF REVOCATION

D-1

* * * * * * *

APPENDIX E

HOT-ROLLED STEEL: FINANCIAL RESULTS, SELECTED FINANCIAL

INFORMATION BY FIRM, AND VARIANCE ANALYSIS 

(VALUATION OF INTERNAL CONSUMPTION AND TRANSFERS TO 

RELATED FIRMS BASED ON COST PLUS ALLOCATED 

GROSS PROFIT OF DOWNSTREAM PRODUCTS)

E-1

Table E-1

Hot-rolled steel: Results of U.S. producers’ operations (valuation of internal consumption and transfers to related

firms based on cost plus allocated gross profit of downstream products), fiscal years 2005-10

Item

Fiscal year

2005 2006 2007 2008 2009 2010

Quantity (short tons)

Commercial sales 24,344,276 25,945,597 25,600,972 23,968,147 14,704,148 22,105,802

Internal consumption 35,472,139 36,895,220 32,643,468 30,858,858 22,940,450 29,481,432

Transfers to related firms 1,400,833 1,626,796 2,063,739 1,854,490 1,021,226 2,114,232

 Total net sales 61,217,248 64,467,613 60,308,179 56,681,495 38,665,824 53,701,466

Value ($1,000)

Commercial sales 13,287,724 14,632,834 14,186,400 18,421,332 8,097,837 13,413,463

Internal consumption 17,458,939 18,731,819 17,081,766 21,202,430 11,993,613 17,427,175

Transfers to related firms 776,008 940,638 1,216,337 1,498,351 579,542 1,262,666

 Total net sales 31,522,671 34,305,291 32,484,503 41,122,113 20,670,992 32,103,304

Raw material 16,121,273 17,514,992 17,630,112 24,011,346 13,779,544 20,345,940

Direct labor 2,526,317 2,534,368 2,421,692 2,507,339 2,047,414 2,392,885

Other factory costs 8,080,036 8,787,191 9,276,903 10,148,203 6,395,107 8,033,323

 Total cost of goods sold 26,727,626 28,836,551 29,328,707 36,666,888 22,222,065 30,772,148

Gross profit or (loss) 4,795,045 5,468,740 3,155,796 4,455,225 (1,551,073) 1,331,156

Selling expenses 33,221 32,806 25,842 29,151 22,379 28,037

General and administrative expenses 847,665 854,433 749,619 756,213 545,098 881,680

 Total SG&A expenses 880,886 887,239 775,461 785,364 567,477 909,717

Operating income or (loss) 3,914,159 4,581,501 2,380,335 3,669,861 (2,118,550) 421,439

Interest expense 302,305 348,672 521,261 482,487 516,328 490,125

Other expenses 14,373 62,123 7,722 484,762 46,876 70,467

CDSOA funds received 2,737 13,552 10,991 10,306 9,308 7,126

Other income items 36,838 49,727 63,570 20,901 30,342 132,023

Net income or (loss) 3,637,056 4,233,985 1,925,913 2,733,819 (2,642,104) (4)

Depr. and amortization (incl. above) 825,666 893,528 874,768 846,992 978,079 1,046,666

Est. cash flow from operations 4,462,722 5,127,513 2,800,681 3,580,811 (1,664,025) 1,046,662

Ratio to net sales (percent)

Raw material 51.1 51.1 54.3 58.4 66.7 63.4

Direct labor 8.0 7.4 7.5 6.1 9.9 7.5

Other factory costs 25.6 25.6 28.6 24.7 30.9 25.0

 Total cost of goods sold 84.8 84.1 90.3 89.2 107.5 95.9

Gross profit or (loss) 15.2 15.9 9.7 10.8 (7.5) 4.1

 Total SG&A expenses 2.8 2.6 2.4 1.9 2.7 2.8

Operating income or (loss) 12.4 13.4 7.3 8.9 (10.2) 1.3

Net income or (loss) 11.5 12.3 5.9 6.6 (12.8) (0.0)

Table continued on next page.

E-3
Table E-1--Continued

Hot-rolled steel: Results of U.S. producers’ operations (valuation of internal consumption and transfers to related

firms based on cost plus allocated gross profit of downstream products), fiscal years 2005-10

Item

Fiscal year

2005 2006 2007 2008 2009 2010

Unit value (dollars per short ton)

Commercial sales 546 564 554 769 551 607

Internal consumption 492 508 523 687 523 591

Transfers to related firms 554 578 589 808 567 597

 Total net sales 515 532 539 725 535 598

Raw material 263 272 292 424 356 379

Direct labor 41 39 40 44 53 45

Other factory costs 132 136 154 179 165 150

 Total cost of goods sold 437 447 486 647 575 573

Gross profit or (loss) 78 85 52 79 (40) 25

SG&A expenses 14 14 13 14 15 17

Operating income or (loss) 64 71 39 65 (55) 8

Number of companies reporting

Data 14 14 14 13 13 14

Operating losses 3 2 4 3 11 6

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

Table E-2

Hot-rolled steel: Selected financial information of U.S. producers’ operations (valuation of internal consumption

and transfers to related firms based on cost plus allocated gross profit of downstream products), fiscal years,

2005-10

* * * * * * *

E-4
Table E-3

Hot-rolled steel: Variance analysis of the financial results of U.S. producers’ operations (valuation of internal

consumption and transfers to related firms based on cost plus allocated gross profit of downstream products), fiscal

years 2005-10

Item

Fiscal year

2005-10 2005-06 2006-07 2007-08 2008-09 2009-10

Total net sales:

 Price variance 4,450,744 1,108,906 392,581 10,591,093 (7,380,851) 3,394,163

 Volume variance (3,870,111) 1,673,714 (2,213,369) (1,953,483) (13,070,270) 8,038,149

 Total net sales variance 580,633 2,782,620 (1,820,788) 8,637,610 (20,451,121) 11,432,312

Cost of goods sold:

Raw material:

 Cost variance (6,203,913) (537,751) (1,245,183) (7,441,436) 2,600,025 (1,208,065)

 Volume variance 1,979,246 (855,968) 1,130,063 1,060,202 7,631,777 (5,358,331)

 Net raw material variance (4,224,667) (1,393,719) (115,120) (6,381,234) 10,231,802 (6,566,396)

Direct labor:

 Cost variance (176,730) 126,085 (50,841) (231,278) (337,009) 450,689

 Volume variance 310,162 (134,136) 163,517 145,631 796,934 (796,160)

 Net direct labor variance 133,432 (8,051) 112,676 (85,647) 459,925 (345,471)

Other factory costs:

 Cost variance (945,292) (278,141) (1,056,659) (1,429,175) 527,587 848,594

 Volume variance 992,005 (429,014) 566,947 557,875 3,225,509 (2,486,810)

 Net other factory cost variance 46,713 (707,155) (489,712) (871,300) 3,753,096 (1,638,216)

Net cost of goods sold:

 Cost variance (7,325,934) (689,806) (2,352,683) (9,101,888) 2,790,603 91,218

 Volume variance 3,281,412 (1,419,119) 1,860,527 1,763,707 11,654,220 (8,641,301)

 Total net cost of goods sold (4,044,522) (2,108,925) (492,156) (7,338,181) 14,444,823 (8,550,083)

Gross profit variance (3,463,889) 673,695 (2,312,944) 1,299,429 (6,006,298) 2,882,229

SG&A expenses:

 Expense variance (136,979) 40,418 54,534 (56,536) (31,733) (121,570)

 Volume variance 108,148 (46,771) 57,244 46,633 249,620 (220,670)

 Total SG&A variance (28,831) (6,353) 111,778 (9,903) 217,887 (342,240)

Operating income variance (3,492,720) 667,342 (2,201,166) 1,289,526 (5,788,411) 2,539,989

Summarized as:

 Price variance 4,450,744 1,108,906 392,581 10,591,093 (7,380,851) 3,394,163

 Net cost/expense variance (7,462,913) (649,388) (2,298,149) (9,158,424) 2,758,870 (30,352)

 Net volume variance (480,550) 207,825 (295,597) (143,143) (1,166,430) (823,822)

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

E-5