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 Sims Metal Management – Caps (Rotors & End Discs)

Page 1

Attachment 1 to 8479909496 Sims Metal Management – Caps (Rotors & End Discs)

In the United States, Sims Group USA Holdings Corporation, through its various operating subsidiaries and 

affiliates, each of which does business as Sims Metal Management (Sims), is a full-service ferrous and nonferrous metal recycler and processor. Recognized as an industry leader in metal recycling, Sims Metal 

Management operates more than 40 metal recycling facilities throughout the Northeast (New Jersey, New 

York, Pennsylvania, Connecticut, Rhode Island & Massachusetts), the Southeast (Virginia), the Southwest 

(Texas, Oklahoma & Arkansas), the Midwest (Illinois, Indiana & Ohio) and the West (California & Nevada).

Properly handled, the specification-grade commodities resulting from the processing of recyclable metal are 

valuable resources that can be re-melted and reshaped into new products countless times while providing 

significant economic and environmental benefits as compared to virgin materials. 

Sims Metal Management collects, processes and recycles metals ranging from iron and steel to aluminum, 

copper, and stainless steel, which it then sells to mills, smelters and foundries for use in the production of new 

steel and other metal products.

One of the principal recyclable materials from which Sims produces specification-grade steel and other metal 

commodities at its U.S. facilities for sale as raw materials to domestic and other steel mills and smelters is endof-life vehicles (ELVs). The production of metal commodities from ELVs and other metal products received 

and/or processed at a Sims metal recycling facility relies on the use of one of the eight metal shredders 

operated by Sims in the U.S. and on the use of other advanced metal processing equipment to break apart and 

reduce the size of the ELVs and other such products and to sort out the various metal commodities from the 

resulting in-process material. 

The metal shredder processes ELVs and other such products (e.g. end-of-life major appliances) by means of a 

large, rapidly rotating hammer mill to break apart the ELVs and other such products. Other components and 

equipment “downstream” of the hammer mill engage in high volume sorting and separating of the in-process

materials in order to produce the specification-grade metal commodities it sells. 

The caps the subject of this exclusion request, are some of the wear parts essential to the operation of the 

shredder and related equipment as they operate to transform millions of tons of ELVs and other such products 

into the range of specification-grade steel and other metal commodities Sims sells to steel mills, smelters and 

foundries.

An image of that part is provided below:
Attachment 1 to 8479909496 Sims Metal Management – Caps (Rotors & End Discs)

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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 heat-treated 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 heattreating 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 

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
Attachment 1 to 8479909496 Sims Metal Management – Caps (Rotors & End Discs)

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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 Sims Metal Management, especially since auto shredder operators are 

operating in an extremely cost-conscious environment, and are already combatting increases in 

transportation, energy, fuel and labor costs. The addition of these tariffs to that cost structure may well result 

in increased cost to those domestic steel mill customers who are, themselves, seeking to recover their own 

production footprint in the United States. As a result, 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 

cost-competitive and the on-going supply of cost-competitive domestic recycled steel and other metal 

products to U.S. steel mills, smelters and foundries preserved.

While we respectfully submit that these reasons alone are sufficient to grant the request of Sims Metal 

Management for a product exclusion, as a mid-sized business heavily invested in the United States, the 

continued imposition of this tariff on the auto shredder wear part imports of Sims Metal Management 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." Although the technology used to shred recyclable metal is 

proprietary based on the internally-developed intellectual property of Sims Metal Management, the 

production of these items is not in and of itself controlled. Given these facts, the continued imposition of 

additional duties at the 25% level on the wear parts imports of Sims Metal Management 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 Sims Metal Management, and the 

disclosure to any third party would compromise Sims'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 Sims Metal Management.