Organization Name:

Note: Representatives submitting on behalf of an organization must enter information below.

Requestor Representative:

Section 301 Investigation: China's Acts, Policies, and Practices Related to Technology 

Transfer, Intellectual Property, and Innovation - Form to Request Exclusion of Product

When submitting a product exclusion request using this form, enter the specified 

information in the following fields and explain the basis and rationale for your statements. 

By completing this form, you certify that the information provided is complete and 

correct to the best of your knowledge. 

1. Indicate whether the comment contains business confidential information (BCI), is a public

document, or is a public version of a BCI document.

3.

2. Please provide a complete and detailed description of the product of concern:

4.

5. Requestor's relationship to the product:

CONTINUED BELOW

*

10-digit HTSUS item number* for product you wish to address in this product exclusion request:

Use numerical characters only with no special characters (example: 1023456789). For help in finding 

the HTSUS item number associated with your product, see https://hts.usitc.gov/

1

7.

6. Does this submission in regulations.gov include additional attachments?

Please indicate whether any additional attachment contains business confidential

information (BCI), is a public document, or is a public version of a BCI document.

VERSION 1

Requestor Information

Requestor Name (Last, First):
END 2

8. Is this product, or a comparable product, available from sources in the United States?:

VERSION 1

11. Please provide information in support your request, taking account of the instructions

provided in Section B of the Federal Register notice (note: text entered below can extend

beyond the apparent size of this box).

9. Is this product, or a comparable product, available from sources in third countries?:

10. Please provide the value and quantity (with units) of the Chinese-origin product of concern

that you purchased for each calendar year specified. Limit this figure to the products

purchased by your firm (or by members of your trade association) alone. Please provide 

estimates if precise figures are unavailable.

2016 Value:

2015 Value:

2017 Value:

2016 Quantity:

2015 Quantity:

2017 Quantity:
Attachment 1 to 8479909496 Schnitzer Steel (Shredder Wear Parts-ROTORS AND END DISC CAPS) P

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Attachment 1 to 8479909496 Schnitzer Steel (Shredder Wear Parts-ROTORS AND END DISC CAPS) P

Founded in 1906, Schnitzer Steel is a Portland, Oregon-based global leader in the metals recycling industry. 

Properly handled, scrap metal is a continuous and valuable resource that can be re-melted and reshaped into 

new products countless times while providing significant economic and environmental benefits as compared 

to virgin materials. Schnitzer collects, processes and recycles metals ranging from iron and steel to aluminum, 

copper, lead, stainless steel and zinc, which it then provides to mills and foundries for use in the production of 

new steel and other metal products. Today, Schnitzer operates 95 recycling facilities, including seven deep 

water ports – on both U.S. coasts and in Hawaii and Puerto Rico – which enable the efficient delivery of 

processed scrap metals to mills and foundries around the world.

One of the principal sources of supply for the scrap metal Schnitzer processes at its U.S. facilities is end-of-life 

vehicles, though Schnitzer processes myriad types of metal feedstock, including appliances and scrap 

generated from building demolition. The processing of large pieces of scrap metal within a Schnitzer recycling 

facility relies on several distinct processes, including shredding. Shredding is accomplished through the use of 

scrap steel shredders that break down large pieces of scrap metal (again, including whole autos) into small 

pieces. In turn, steel manufacturers—including many in the USA—melt shredded scrap in order to 

manufacture new steel. Shredders like those operated by Schnitzer process approximately 50% of the scrap 

steel generated in the US and 100% of scrapped automobile hulks.

The following picture shows a shredder and all the constituent wear parts:
Attachment 1 to 8479909496 Schnitzer Steel (Shredder Wear Parts-ROTORS AND END DISC CAPS) P

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ROTORS AND END DISC CAPS, the subject of this exclusion request, constitute one of the wear parts essential 

to the breaking down of the metal feedstock to prepare the metal for repurposing into new steel and other 

metal products. An image of that part is provided below:

Shredder wear parts are generally made of three types of material that have an effect on cost. The majority of 

these replacement components are made of manganese steel that absorbs impact and is resistant to abrasion, 

and thus can process metal scrap up to three times the hardness of the parts. The second type is made of alloy 

steel that can be used to make rotors and end caps, as well as hammers, grates, cutter bar, anvils, and liners 

(other parts for which we are requesting exclusions). Alloy steel hammers, for example, the primary part used 

to shred autos, are used to process lighter gauge scrap. These hammers cost more than hammers made of 

manganese steel. The hardness of the alloy hammers makes them brittle and sustainable to premature failure 

when exposed to excessive hard metals, as occurs when shredding metal. [ 

 

 .] As alloy hammers are not economical to use in our shredders, the same applies to all other wear 

part components of the shredder, including rotors and end disc caps. The third type, differentially heattreated alloy – or DHT – is a material also used for front walls. DHT rotors and end disc caps are nearly twice as 

hard as traditional manganese alloy rotors and end disc caps, requiring a four-step heat-treating process (as 

compared to a single-step heat-treating process for traditional manganese alloy parts). The process creates a 

significantly harder wear component with a better wear life span but also a much higher cost than both 

manganese and alloy steel parts. [ 

 

 .]

Manganese parts are one-third to one-half the price of the alternatives and, therefore, are a preferred option 

where wear part production is concerned. With more than 90% of the manganese steel parts used in the 

United States manufactured in China, turning to Chinese producers of these components is the only reliable
Attachment 1 to 8479909496 Schnitzer Steel (Shredder Wear Parts-ROTORS AND END DISC CAPS) P

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option available in today's marketplace. This is not to say that auto shredders and parts suppliers have not 

tried to find additional suppliers to diversify the purchasing of these parts. There is one foundry in the United 

States, but the operation is too small to meet the requirements of all shredders operating in the United States.

As of October 2018, their lead time to delivery required parts is 50 weeks, whereas typical times from China 

are 18-24 weeks. Germany is a source of the higher priced DHT hammers and has a small niche customer base 

in the United States. Foundries in Canada and Peru can meet quality standards, but are smaller operations 

that provide significantly higher-priced products and do not have the production capacity to satisfy continuous

U.S. demand. Foundries in India, Middle East, Mexico, Malaysia and Australia have been approached, but 

similar capacity constraints, as well as higher prices, quality issues or a combination of these limitations has 

prevented U.S. companies from establishing long-term arrangements to purchase their products. Finally, even 

were a viable alternative identified, transitioning from existing suppliers to a new supplier situated outside of 

China cannot be accomplished lightly, as it requires a significant investment in design, development and 

testing before final approval for the on-going production and supply of wear parts may be achieved. In the 

end, therefore, auto shredders in the United States must source about 81-85% of their parts from China in 

order to remain competitive and satisfy customer needs. 

Given the repetitive need for these wear parts, the 25% tariff imposed under Section 301 has already had a 

significant adverse financial impact on Schnitzer Steel. Auto shredders are operating in an extremely costconscious environment, and are already combatting increases in transportation, energy, fuel and labor costs. 

The addition of these tariffs to that cost structure promises to not only negatively impact Schnitzer, but will

result in increased cost to those customers who are, themselves, seeking to recover their own production 

footprint in the United States. In either instance, an industry which the Administration has strongly targeted

and supported as a key partner in the resurgence of U.S. industry will be harmed. Taken in totality, we 

respectfully request that this exclusion request be granted so that the auto shredder industry may remain costcompetitive and the on-going supply of recycled steel and other metal products to U.S. mills and foundries 

preserved.

While we respectfully submit that these reasons alone are sufficient to grant Schnitzer Steel's request for a 

product exclusion, as a mid-sized business heavily invested in the United States, the continued imposition of 

this tariff on Schnitzer Steel's auto shredder wear part imports will not eliminate the harmful and unfair 

practices associated with China that were identified by USTR in its Section 301 Report. The production of 

these wear parts does not fall within any of the 10 categories identified by China as part of its Made in China 

2025 industrial plan and will not, therefore, further those ambitions in any substantive way. Nor, for that 

matter, is the production of the wear part the result of any of the unfair trade practices identified by USTR in 

its report on China's "Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and 

Innovation." Given these facts, the continued imposition of additional duties at the 25% level on Schnitzer 

Steel's wear parts imports will not have any practical impact on the elimination of China's unfair trade 

practices.

I hereby certify that the information provided is complete and correct to the best of my knowledge. The 

bracketed information set forth in this submission is business confidential to Schnitzer Steel Industries, Inc. and 

the disclosure to any third party would compromise Schnitzer Steel's competitive position, which would 

adversely affect the Company's financial and operational performance. The bracketed information is neither 

subject to public disclosure nor disclosed to the public; it remains confidential at all times to the internal 

management and business operations of Schnitzer Steel Industries, Inc.