Special Quality Carbon and Alloy Hot-rolled Steel Bars and Rods and Semifinished Products from Brazil, Inv. 731-TA-572 (Final)

CERTAIN SPECIAL QUALITY HOT-ROLLED AND SEMIFINISHED CARBON AND ALLOY STEEL PRODUCTS FROM BRAZIL Determination of the Commission in Investigation No. 731-TA-572 (Preliminary) Under the Tariff Act of 1930, Together With the Information Obtained in the Investigation USITC PUBLICATION 2537 JULY 1992 ates International Trade Commission on, DC 20436 ..... , __,·; .. ·.. ·.: -~- '-;".... .. ~-~ :: . . .: ....;·\-_,_ . .. ·..·· UNITED STATES INTERNATIONAL TRADE COMMISSION COMMISSIONERS Don E. Newquist, Chairman Peter S. Watson, Vice Chairman David B. Rohr Anne E. Brunsdale Carol T. Crawford Janet A. Nuzum Robert Rogowsky DirccLor of Operations ------------ Staff assigned: Diane J. Mazur, Investigator SLephanie Kaplan, Commodity-Industry Analysl Clark Workman, Economisl Chand Mehta, Accountant/Auditor Scou Andersen, Auomcy Robert Carpenter, Supervisory Investigator Address all communications to Secretary to the Commission United States International Trade Commission \Vashington, DC 20436 CONTENTS Determination ............................................................ . Views of Chairman Newquist, Vice-Chairman Watson, and Commissioner Nuzum ..................................................... . Separate Views of Commissioner David B. Rohr ............................ . Dissenting Views of Commissioners Brunsdale and Crawford ................ . Information obtained in the investigation ............................... . Introduction .......................................................... . Previous and related investigations ................................... . General steel products investigations ............................... . Investigations of special quality carbon steel products ............. . The product .................................................. ; ........ . Description .......................................... ·............... . Free-machining steels ............................•................. Manufacturing process ................................................ . Melt stage ........................................................ . Casting stage ..................................................... . Hot-rolling stage ......................................· ........... . Semifinished vs. hot-rolled steel. .............................. . Cut-lengths vs. coiled ............................................ . Bars vs. rods .................................................... . Uses ..................................................... ·.·.··.· .. ··· Questionnaire responses ......... , ................................. . Imported and domestic product comparison .......................... . Substitute products ................................. ·................ . U.S. tariff treatment ................. ·............................... . Voluntary restraint agreements ...................................... . Bilateral consensus agreements/multilateral consensus agreement ..... . Like product considerations ......................................... ·.. The nature and extent of alleged sales at less than fair value ........ . The U.S. market .................... , .................................. . U.S. producers ...............; ....................................... . Company profiles .................................................. . Other special quality steel producers ............................. . Product lines ..., .................................................... . Minimills ..................... · ................. ·.................... . U.S. importers ...................................................... . U.S. producers' imports ........................•................... Apparent U.S. consumption ........................................... . Market trends ...................................................... . Trends in apparent consumption .................................... . U.S. producers' share of apparent consumption ..................... . Channels of distribution ............................................ . 1 3 37 55 I-1 I-3 I-4 I-4 I-4 I-4 1-4 1-7 I-8 1-8 I-10 I-12 I-13 I-13 I-14. I-15 I-16 I-16 I-18 I-19 I-20 I-21 I-22 I-22 I-23 I-23 I-23 I-28 I-28 I-29 1-30 I-30 I-31 1-31 I-32 I-32 I-32 ii CONTENTS Information obtained in the investigations--Continued Consideration of alleged material injury to an industry in the United States ......... : ... : ................................ . U.S. production, capacity, and capacity utilization ................. . U.S. producers' U.S. shipments ....................................... . U.S. producers' exports ............... , ............................. . U.S. producers' inventories ........................................ . U.S. producers' employment and wages ............................... . Financial experience of U.S. producers ............................. . Subject special quality steel products ........................... . Semi finished .................................................... . Cut bars and rods ...................................... ·......... . Semifinished and cut bars and rods combined .................... . Free-machining steel products .................................... . Semif inished ................................................... . Bars and rods ........................ ·.......................... . All special quality steel products ............................... . s'eniifinished ................................................... . B'ars and rods .................................................. . Investment in productive facilities .............................. . Capital expenditures ............................................. . Research ·and development expenses ...............· ................. . Impact of imports on capital and investment ...................... . Consideration of the q11estion of threat: of material injury ........... . Ability of foreign producers to generate exports and the availability of export markets other than the United States .... . Respondents' data ................................................ . Additional information regarding the Brazilian industry .......... . Respondents represented by counsel. ............................ . Other Brazilian manufacturers/exporters ........................ . EC dumping duty· order ............................................ . U.S. importers' inventories ........................................ . Consideration of the causal relationship be.tween imports of the subject products and alleged material injury ..................... . Imports ............................................................. . Market· penetration of imports ...................................... . Prices: ............ ., ............................................... . Market characteristics ........................................... . Questionnaire price data ......................................... . Price trends ..................................................... . Price comparisons ................................................ . Exchange rates ..................................................... . Lost sales and lost revenues ....................................... . I-41 I-42 I-42 I-42 I-54 I-56 I-61 I-61 I-61 I-63 I-69 I-69 I-69 I-70 I-70 I-70 I-77 I-77 I-77 I-77 I-88 I-89 I-90 I-,91 I-91 · I-91 I-96 I-97 I-97 1-98 1-98 I-99 I-114 I-114 I-115 I-116 I-116 I-118 1-118 iii CONTENTS Appendices A. The Commission's and Commerce's Federal Register notices............ A-1 B. List of witnesses appearing at conference........................... B-1 C. Glossary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1 D. Comments on differences and similarities in physical/metallurgical characteristics and uses of semifinished and hot-rolled products.. D-1 E. Comments on differences and similarities in manufacturing processes of semifinished and hot-rolled products........................... E-1 F. Tariff headnotes and nomenclature................................... F-1 G. Available information on alternative "like product" industries...... G-1 H. Summary data on operations of traditional and minimill producers.... H-1 J. Effects of imports on producers' existing development and production efforts, growth, investment, and ability ~o raise capital ........................................................... J-1 K. EC preliminary dumping decision ................... ·•................. K-1 L. Market shares of imports on a cumulated basis....................... L-1 Figures 1. 2. G-1. Tables Simplified steelmaking flowchart ........................... _...... . Steel products and processes ..................................... . Like-product scenarios: Certain steel products .................. . 1. Special quality carbon and alloy steel products: Previous I-9 I-11 G-2 and related investigations since 1921.......... ... .............. .. . I-5 2. Special quality carbon and alloy steel products: Shares of shipments of U.S.-produced product, by end uses, 1991 ............. I-17 3. Special quality carbon and alloy steel products: U.S. producers, location of producing facility, position on petition, and share of production in 1991................................................ I-24 4. Carbon and alloy steel products: U.S. producers' production capabilities, by types, 1991. ..................................... I-28 SA. Subject special-quality steel products: U.S. shipments of domestic product, U.S. imports, and apparent U.S. consumption, by products, 1989-91, January-March 1991, and January-March 1992 ............... I-33 SB. Free-machining steel products: U.S. shipments of domestic product, U.S. imports, and apparent U.S. consumption, by products, 1989-91, January-March 1991, and January-March 1992 ............... I-35 SC. All special-quality ste~l products: U.S. shipments of domestic product, U.S. imports, and apparent U.S. consumption, by produ~ts, 1989-91, January-March 1991, and January-March 1992 ............... I-37 iv CONTENTS Tables--Continued 6. Special quality carbon and alloy steel products: Shares of shipments of product (in percent), by channels of distribution, 1991.............................................................. I-39 7. Special quality carbon and alloy steel products: U.S. capacity, production, and capacity utilization, by products, 1989-91, January-March 1991, and January-March 1992 ............... I-43 BA. Subject special quality carbon and allow steel products: Shipments by U.S. producers, by products and by types, 1989-91, January-March 1991, and January-March 1992............... I-45 SB. Free-machining carbon and allow steel products: Shipments by U.S. producers, by products and by types, 1989-91, January-March 1991, and January-March 1992 ...... : ........ I-48 SC. All special quality carbon and allow steel products: Shipments by U.S. producers, by products and by types, 1989-91, January-March 1991, and January-March 1992 ............... I-51 9. Special quality carbon and alloy steel products: U.S. producers' U.S. shipments (domestic shipments and company transfers), by types, 1989-91, January-March 1991, and January-March 1992 ..... ;........................................... I-54 10. Special quality carbon and alloy steel products: End-of period inventories of U.S. producers, by products, 1989-91, January-March 1991, and January-March 1992 ....................... I-55 11. Average number of U.S. production and related workers producing special-quality steel products, hours worked, wages and total compensation paid to such employees, and hourly wages, productivity, and unit production costs, by products, 1989-91, January-March 1991, and January-March 1992 ............... I-57 12. Income-and-loss experience of U.S. producers on their operations producing subject special-quality carbon steel semifinished products, fiscal years 1989-91, January-March 1991, arid January-March 1992 ........................ ~ .................... ;.. I-62 13. Income-and-loss experience of U.S. producers on their operations producing subject special-quality alloy steel semifinished products, fiscal years 1989-91, January-March 1991, and January-March 1992 ....................................... ;........ I-64 14. Income-and-loss experience of U. s-. producers on their operations producing subject special-quality carbon and alloy steel semifinished products, fiscal years 1989-91, January-March 1991, and January-March 1992............................................ I-65 15. Income-and-loss experience of U.S. producers on their operations producing subject special-quality carbon steel cut bars and rods fiscal years 1989-91, January-March 1991, and January-March 1992................................................ I-66 16. Income-and-loss experience of U.S. producers on their operations producing subject special-quality alloy steel cut bars and rods fiscal years 1989-91, January-March 1991, and January-March 1992................................................ I-67 v CONTENTS Tables--Continued 17. Income-and-loss experience of U.S. producers on their operations producing subject special-quality carbon and alloy steel cut bars and rods, fiscal years 1989-91, January-March 1991, and January-March 1992 ..... ·................... ; . . . . . . . . . . . . . . . . . . . I.-68 18. Income-and-loss experience of U.S. producers on their operations producing free-machining semifinished carbon steel lead and bismuth products, fiscal years 1989-91, January-March 1991, and January-March 1992............................................ 1-69 19. Income-and-loss experience of U.S. producers on their operations producing free-machining carbon steel bars and rods, fiscal years 1989-91, January-March 1991,and January-March 1992... I-71 20. Income-and-loss experience of U.S. producers on their operations producing free-machining alloy steel bars and rods, fiscal years 1989-91, January-March 1991,and January-March 1992 ... I-72 21. Income-and-loss experience of U.S. producers on their operations producing free-machining carbon and alloy steel bars and rods, fiscal years 1989-91, January-March 1991,and January-March 1992 ... I-73 22. Income-and-loss experience of U.S. producers on their operations producing special-quality carbon steel semifinished products, fiscal years 1989-91, January-March 1991,and January-March 1992... I-74 23. Income-and-loss experience of U.S. producers on their operations producing special-quality alloy steel semifinished products, fiscal years 1989-91, January-March 1991,and January-March 1992 ... 1-75 24. Income-and-loss experience of U.S. producers on their operations producing special-quality carbon and alloy steel semifinished products, fiscal years 1989-91, January-March 1991,and January-March 1992........... ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-76 25. lncome-·and-loss experience of U.S. producers on their operations producing special-quality carbon steel bars and rods, fiscal years 1989-91, January-March 1991,and January-March 1992 ... 1-78 26. Income-and-loss experience of U.S. producers on their operations producing special-quality alloy steel bars and rods, fiscal years 1989-91, January-March 1991,and January-March 1992... 1-79 27. Income-and-loss experience of U.S. producers on their operations producing special-quality carbon and alloy steel bars and rods, fiscal years 1989-91, January-March 1991,and January-March 1992... 1-80 28A. Value of assets and return on assets of U.S. producers of semifinished steel products, fiscal years 1989-91, January- March 1991, and January-March 1992 ................................ 1-81 28B. Value of assets and return on assets of U.S. producers of subject special quality cut bars and rods, fiscal years 1989-91, January-March 1991, and January-March 1992 ........................ 1-84 28C. Value of assets and return on assets of U.S. producers' establishments wherein all special quality steel products are produced, fiscal years 1989-91, January-March 1991, and January-March 1992................................................ 1-85 vi CONTENTS Tables--Continued 29. Capital expenditures by U.S. producers of special quality steel products, by products, fiscal years 1989-91, January-March 1991, and January-March ·1992............................................ I-87 30. Research and development expenditures of U.S. producers of special quality steel products, by products, fiscal years 1989-91, January-March 1991, and January-March 1992 ........................ I-88 31. Subject special-quality carbon and alloy steel products: Brazilian capacity, production, capacity utilization, and shipments, 1989-91, January-March 1991, January-March 1992, and projected 1992................................................ I-92 32. Certain special-quality semifinished and hot-rolled cut~length carbon and alloy steel products: U.S. imports, by products and by sources, 1989-91, January-March 1991, and January-March 1992 ................................................ I-100 33A. Subject special-quality semifinished and hot-rolled cut-length carbon and alloy steel products: U.S. shipments of domestic product, U.S. imports, and U.S. apparent consumption, by products, 1989-91, January-March 1991, and January-March 1992 ...... , ........ ·................................ I-102 33B. Free-machining special-quality semifinished and hot-rolled carbon and alloy steel products: U.S. shipments of domestic product, U.S. imports, and U.8. apparent consumption, by products, 1989-91, January-March 1991, and January-March 1992 ......................... ·..................... I-106 33C. Total special-quality semifinished and hot-rolled carbon and alloy steel products: U.S. shipments of domestJc product, U.S. imports, and U.S. apparent consumption, by products, 1989-91, January-March 1991, and January-March 1992.............................................. I-110 34. Weighted-average net f .o.b. prices of product 1 reported by U.S. producers and importers, and margins of underselling (overselling), by quarters, January 1989-March 1992 ............... I-117 35. Weighted-average net f .o.b. prices of product 2 reported by U.S. producers and importers, and margins of underselling (overselling), by quarters, January 1989-March 1992 ............... I-117 36. Weighted-average net f.o.b. prices of product 3 reported by U.S. producers and importers, and margins of underselling (overselling), by quarters, January 1989-March 1992 ............... I-117 37. Weighted-average net f.o.b. prices of product 5 reported by U.S. producers and importers, and margins of underselling (overselling), by quarters, January 1989-March 1992 ............... I-117 38. Weighted-average net f.o.b. prices of product 6 reported by U.S. producers and importers, and margins of underselling (overselling), by quarters, January 1989-March 1992 ............... I-117 vii CONTENTS' Tables--Continued 39. Exchange rates: Indexes of nominal and real exchange rates of the Brazilian cruzeiro, and indexes of producer prices in the United States and Brazil, by quarters, January 1989-March 1992........................................... I-117 G-1. Subject special-quality.carbon steel semifinished products: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992. .. .. . . . .......... ... . G-4 G-2. Lead & bismuth free-machining carbon steel semifinished products: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992.. .. . . .. ........ .. . .. . G-4 G-3. All free-machining carbon steel semifinished products: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992. ... .. .. ..... .. . .. . .. . G-4 G-4. All special-quality carbon steel semifinished products: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992.... .. ......... .. .. .. . G-4 G-5. Merchant-quality carbon steel semifinished products: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992.... .. ... .... .. ....... G-4 G-6. All carbon steel semifinished products: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992.... .. ... ... . . . .... .. . G-4 G-7. Subject special-quality alloy steel semifinished products: Summary data concerningthe U.S. market, 1989-91, January-March 1991, and January-March 1992.. .. .. ... .. . . . . . ... .. . G-4 G-8. Lead & bismuth free-machining alloy steel semifinished products: Summary data concerning .the U.S. market, 1989-91, January-March 1991, and January-March 1992. ... .. ... . . . . .. . ... .. . G-4 G-9. All free-machining alloy steel semifinished products: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992. .. . . . ... . . . ... ....... G-4 G-10. All free-machining alloy steel semifinished products: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992.. ....... ...... .... .. . G-4 G-11. Subject special-quality carbon & alloy steel semifinished products: Summary data concerning the U.S. market, 1989-91, · January-March 1991, and January-March 1992... ... . . . . . . ... . .. . . . . G-4 G-12. Lead & bismuth free-machining carbon & alloy steel semifinished products: Summary data concerning the u.s; market, 1989-91, January-March 1991, and January-March 1992... ... . . . . .. ... ....... G-4 G-13. All free-machining carbon & alloy steel semifinished products: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992.. ... .. . . ...... ... . . . . G-5 viii CONTENTS Tables--Continued G-14. All special-quality carbon & alloy steel semifinished products: Summary data concerning the U.S. ·market, 1989-91, January-March 1991, and January-March 1992... .. . . . . . . . . . . . . . . . . . G-6 G-15. All carbon & alloy steel semifinished products: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992.. ... .. . . . . . .. .. . . . . . . G-7 G-16. Subject special-quality carbon steel cut bars (including cut rods): Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992.. .. . . . . . . . . .. .. . .. . . . G-7 G-17. Subject special-quality alloy steel cut bars (including cut rods): Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992............. .. . .. .. . . . G-7 G-18. Subject special-quality carbon & alloy steel cut bars (including cut rods): Summary data concerning the U.S. market, 1989-91, January-March 1991, an.d January-March 1992............. G- 7 G-19. Certain special-quality carbon steel coiled bars: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992...... .. . . . . . . . .. . . . . . G-7 G-20. Certain special-quality alloy steel coiled bars: Summary data concerning the U.S. market, 1989-91, January•March 1991, and January-March 1992.. ... ... .. . . . . . .. . . .. . G-7 G-21. Certain special-quality carbon & alloy steel coiled bars: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992... ..... .. . . . . . .. . .... G-7 G-22. Certain special-quality carbon steel bars (including cut rods): Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992.. ... .. . . . . . . . . .. . . . . . G-7 G-23. Lead & bismuth free-machining carbon steel bars (including cut rods): Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992.. .. . . . . . . . . . . . . . . . .. . G-7 G-24. All free-machining carbon steel bars (including cut rods): Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992.. .. . . . . . . . . . . . . . . . . . . G-7 G-25. All special-quality carbon steel bars (including cut rods): Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992............... .. . . .. . G-7 G-26. Merchant-quality carbon steel bars (including cut rods): Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992..... ... ... .. . . . .. . . . . G-7 G-27. All carbon steel bars (including cut rods): Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992...... .. ... .. . . ... . .. . G-7 G-28. Certain special-quality alloy steel bars (including cut rods): Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992...... .. ... .. . . . .. . .. . G-7 ix CONTENTS Tables--Continued G-29. Certain lead & bismuth free-machining alloy steel bars (including cut rods): Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992... ... . .. ... . .. . . . . . .. G-7 G-30. All free-machining alloy steel bars (including cut rods): Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992... .. . . .. . . . . . . . . . . . . . G-7 G-31. All special-quality alloy steel bars (including cut rods): Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March· 1992....... .. . . .. . . . . .. . . . G-7 G-32. Certain special-quality carbon & alloy steel bars (including cut rods): Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992..... .. ... . ... ... . . . . . G-7 G-33. Lead & bismuth free-machining carbon & alloy steel bars (including cut rods): Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992.. .... .. .. . . . G-7 G-34. All free-machining carbon & alloy steel bars (including cut rods): Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992... .... .. . ... .... .. . . . G-8 G-35. All special-quality carbon & alloy steel bars (including cut rods): Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992... .. . . .. . . ........... G-9 G-36. All carbon & alloy steel bars (including cut rods): Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ...................... G-10 G-37. Certain special-quality carbon steel coiled rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ...................... G-10 G-38. Lead & bismuth carbon steel coiled rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ...................... G-10 G-39. All free-machining carbon steel coiled rods: .Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ...................... G-10 G-40. All special-quality carbon steel coiled rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ...................... G-10. G-41. All merchant-quality carbon steel coiled rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ...................... G-10 G-42. All carbon steel coiled rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ...................... G-10 G-43. Certain special-quality alloy steel coiled rods: Summary data concerning the U.S. market, 1989-9.l, January-March 1991, and January-March .1992........... . . . . . . . . . . . G-10 x CONTENTS Tables--Continued G-44. Lead & bismuth free-machining alloy steel coiled rods: Summary data concerning the U.S. market, 1989-91, . January-March 1991, and· January-March 1992 ...................... G-10 G-45. All free.-machining alloy steel coiled rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ...................... G-10 G-46. All special-quality alloy steel coiled rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ...................... G-10 G-47. Certain special-quality.carbon & alloy steel coiled rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ....... : .............. G-10 G-48. Lead & bismuth free-machining carbon & alloy steel coiled rods: Summary data concerning the U.S. market, 1989-91, January-Match 1991, and January-March 1992 ...................... G-10 G-49. All free-machining carbon & alloy steel coiled rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ...................... G-10 G-50. All special-quality carbon & alloy steel coiled rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ...................... G-10 G-51. All carbon & alloy steel coiled rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ...................... G-10 G-52. Certain special-quality carbon steel bars and rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ...................... G-10 G-53. Lead & bismuth free-machining carbon steel bars and rods: Summary data concerning the U.S. market, 1989~91, January-March 1991, and January-March 1992 ...................... G-10 G-54. All free-machining carbon steel bars and rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ......... ; ............ G-10 G-55. All special-quality carbon steel bars and rods: Summary data concerning the U.S. market, 1989~91, January-March 1991, and January-March 1992 ...................... G-10 G-56. Merchant-quality carbon steel bars and rods: · Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ...................... G-10 G-57. All carbon steel bars and rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ...................... G-10 G-58. Certain special-quality alloy steel bars and rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ...................... G-10 xi CONTENTS Tables--Continued G-59. G-60. G-61. G-62. G-63. G-64. G-65. G-66. G-67- 83. G-84. G-85- 92. G-93. G-94- 123. G-124: Lead & bismuth free-machining alloy steel bars and rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ................... . All free-machining alloy steel bars and rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ................... . All special-quality alloy steel bars and rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ................... . Certain special-quality carbon & alloy steel bars and rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ................... . Lead & bismuth free-machining carbon & alloy steel bars and rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ................... . All free-machining carbon & alloy steel bars and rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ............ ; ...... . All special-quality carbon & alloy steel bars and rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1.992 ................... . All carbon & alloy steel bars and rods: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ................... . Additional summary tables ...................................... . Subject non-free-machining carbon and alloy steel,semifinished products: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 .............., ..... . Additional summary tables ......... : ............................ . Certain special quality non-free-machlning carbon and alloy steel bars: Summary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 ................... . Additional summary tables ...................................... . Weighted-averag·e net f. o. b. prices of U.S. producers for sales of product 1 to cold finishers and sales of product 2 to steel senrice centers or distributors, and total quantities of shipments, by quarters, January 1989-March 1992 ........... . G-10 G-10 G-10 G-10 G-10 G-10 G-10 G-10 G-10 G-11 G-12 G-13 G-14 G-15 xii CONTENTS Tables--Continued H-1. All special-quality carbon & alloy steel bars and rods: Summary data concerning minimills, 1989-91, January-March 1991, and January-March 1992 ............ ·........ H-3 H-2. Ail special-quality carbon & alloy steel bars and rods: Summary data concerning traditional mills, 1989-91, January-March 1991, and January-March 1992.... .. . . . . . .. . .. . .. . H-4 L-1. Special quality carbon and alloy steel bars and rods: U.S. shipments of domestic product, U.S. imports of bars and rods (including hot-rolled lead and bismuth bars and rods subject to investigation), and apparent U.S. consumption, by products, 1989-91, January-March 1991, and January-March 1992 ............ L-3 L-2. Special quality steel semifinished products and bars and rods: U.S. shipments of domestic product~ U.S. imports of semifin- · ished products plus bars and rods (including hot-rolled lead and bismuth carbon steel bars and rods subject to investiga- tion), and apparent U.S. consumption, by products, 1989-91, January-March 1991; and January-March 1992 ................•.... L-4 Note.--Inform.ation that would reveal business proprietary operations of individ~l concerns may not be published and therefore has been deleted from this report. Such deletions are indicated by asterisks. UNITED STATES INTERNATIONAL TRADE COMMISSION Investigation No. 731-TA-572 (Preliminary) Certain Special Quality Carbon and Alloy Hot-Rolled Steel Bars an~ R~ds and Semifinished Products from Brazil Determination On the basis of the record1 dev~loped in the subject investigation, the Commission determines, 2 pursuant to .section 733(a) of,the-Tariff·Act of 1930 (19 U.S.C. § 1673b(a)), that there is a ·reasonable indication that aRindustry in the United States is materially· injured by reason' of imports from Brazil of certain special quality carbon and alloy hot-rolled steel bar.s and rods and semifinished products, 3 covered by:subheadings/statistical-reporting numbers 7207, ll, 00 > 7207 .12 • 0010 > 7207, 19, 0030 > 7207 .,20, 0025 I 7207 ,.20 :.0075; - ' 7214.30.00, 7214.40.00, 7214.50.00,, 7214·.60.00, 7224.10.0075, 722.4.90.00.45, 7224. 90. 0065, and 7228 ..30. 80 of the Harmonized Tariff Sche.dule of the United States, that are.alleged to be sold in the United· States, at less than fa-ir value. .f.' 1The record is defined in sec. 207.2(f) of the Commission's Rules of Practice and Procedure (19 CFR § 207.2(f)). 2 Commissioners Brunsdale and Crawford voted in the negative. Commissioner Rohr voted in the negative regarding finished free-machining bars. 3 For purposes of this investigation, the imports subject to investigation are certain hot-finished carbon and alloy (other than stainless, high speed, silico-manganese, and tool steel) steel bar's and rods, which have a uniform solid cross-section along their whole length and are in the shape of circles, segments of circles, ovals, rectangles, or other convex polygons. The subject bars and rods are of special bar quality engineered steel that are described in Society of Automotive Engineers (SAE) standards J403, J404, J411, Jl081, Jl249, Jl268, and modifications thereof. Also included are certain alloy ingots (other than stainless steel, high-speed steel, silico-manganese steel, tool steel, and high-nickel alloy steel), and semifinished products of carbon and alloy steel (other than stainless steel, high-speed steel, silico- manganese steel, tool steel, and high-nickel alloy steel), of circular or rectangular (including square) cross-section with a width measuring less than four times thickness, of special bar quality engineered steel. Excluded from the scope of the investigation are imports of semifinished products or hot- rolled bars and rods which contain by weight 0.03 percent or more of lead or· 0.05 percent or more of bismuth; nonalloy steel ingots or other primary forms; semifinished or hot-rolled products of merchant quality steels (American Iron and Steel Institute (AISI) grades M 1000 through M 1044); hot-rolled bars and rods in coiled form; forged bars; and reinforcing bars and rods. 2 .Background On June 9, 1992, a petition was filed with the Commission and the Department of Commerce by Republic Engineered Steels, Inc., Massillon, OH, and The Timken Company, Canton, OH, alleging that an industry in the United States is materially injured or threatened with material injury by reason of LTFV imports of certain special quality hot-rolled and semifinished carbon and alloy steel products from Brazil. Accordingly, effective June 9, 1992, the Commission instituted preliminary antidumping investigation No. 731-TA-572. Notice of the institution of the Commission's investigation and of a public conference to be held in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the Federal Register of June 17, 1992 (57 F.R. 27064). The conference was held in Washington, DC, on June 30, 1992, and all persons who requested the opportunity were permitted to appear in person or by counsel. VIEWS OF CHAIRMAN NEWQUIST, VICE CHAIRMAN WATSON, AND COMMISSIONER NUZUM Based on the record in this preliminary investigation, we determine that there is a reasonable indication that two industries in the United States -- one producing semifinished special quality carbon and alloy steels, and another producing hot-rolled special quality carbon and alloy bar (coiled and cut- length) and cut-length rod -- are materially injured by reason of imports from Brazil of certain special quality carbon and alloy hot-rolled steel bar and rod and semifinished products thereof that are alleged to be ~old at less than fair value (LTFV). I. THE LEGAL STANDARD FOR PRELIMINARY DETERMINATIONS The legal standard in preliminary antidumping investigations requires the Commission to determine whether, based on the best information available at the time of the preliminary determination, there is a reasonable indication of material injury or threat thereof to a domestic industry by reason of the subject imports. 1 In this investigation, the Commission considered whether "(l) the record as a whole contains clear and convincing evidence that there is no material injury or threat of such injury; and (2) no likelihood exists that contrary evidence wilJ. arise in a final inves.tigation. 112 The U.S. Court of Appeals for the Federal Circuit has held that this interpretation of the standard "accords with clearly discernable (sic) legislative intent and is sufficiently reasonable."3 19 U.S.C. § 1673b(a). 2 American Lamb Co. v. United States, 785 F.2d 994, 1004 (Fed. Cir. 1986). I I . LIKE PRODUCT AND DOMESTIC INDUSTRY .. In determining whether an industry in the United States is materially .. - injured or is threatened with material injury by reason of the subject ~mports, the Commission must first define the "like product" and the "indu~try." Section 771(4)(A) of the Tariff Act of 1930 (the "Act") defines the relevant industry . ' as the. "domestic producers as a whole of a like product, or those produ·cers whose collective output of the like product constitutes a major proportion of the total domestic production of that product .. .,4 In turn, the statute defines "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 investiga~ion .. 115 . " A. Background and Products Subject to Investigation In its not.ice of initiation, 6 the Department of ·commerce (Commerce) defined the class or kind of merchandise subject to investigation as follows: [H]ot-finished carbon and alloy (other than stainless, high speed, silico-manganese, and tool steel) steel bars and rods, other than forged, which have a uniform solid cross-section along their whole length and are in the shape of circles, ~egments of cir9les, ovals, rectangles, triangles, or other convex polygons, and do not conform to the definitions for semi finished steel, flat-rolled products, hot-rolled bars and rods in irregularly wound coils, reinforcing bars and rods, and wire. The subject bars and rods are of special bar quality engineered steel . . other than merchant quality 4 19 U.S.C. § 1677(4)(A). 5 19 U.S.C. § 1677(10). The Commission's determination of what is the appropriate like product or products in an investigation is· a fac-tual determination, to which we apply the statutory standard of "like" or "most similar in characteristics and uses" on a case-by-case basis. In defining the like product, the Commission generally considers a number of factors including: (1) physical characteristics and uses; (2) interchange~bility of the products; (3) channels of distribution; (4) customer and producer perceptions of the products; (5) the use of common manufacturing facilities and production employees; and where appropriate, (6) price. 6 57 Fed. Reg. 29703-04 (July 6, 1992). 4 grades . . not containing .03 percent or more of lead or 0.05 percent of bismuth.· . . . Also included in the scope of this investigation are certain alloy ingots (other than stainless steel, high-speed steel, silica-manganese steel, tool steel, and high-nickel alloy steel), and semifinished products of carbon and alloy (other than stainless steel, high-speed steel, silico- manganese steel, tool steel, and high-nickel alloy steel) steel, of circular or rectangular (including square) cross-section with a width measuring less than four times thickness, of special bar quality engineered steel ... not containing 0.03 percent or more of lead or 0.05 percent or more of bismuth . . . . This class or kind of merchandise excludes the following categories of special quality steels: 1. semifinished carbon ingots 2. alloy silico-manganese 'steels 3. lead, bismuth, tellurium, or selenium hot-rolled carbon and alloy bar and rod (lead and bismuth steels) 4. coiled carbon and alloy hot-rolled bar and rod 5. forged carbon and alloy bar 6. flat-rolled products. 7 The products covered by these investigations are all "special quality" steels. The Commission recently defined ·"special quality bar and rod" to include the following: 7 Commerce's initiation notice also stated: given (1) the clear distinction normally maintained in the steel trade between semifinished products and finished products such as bars and rods, and (2) an examinatio~ of the criteria used to evaluate class or kind of merchandise ... , we question petitioners' assertion that the subject merchandise comprises one class or kind of merchandise. Therefore, we are requesting all interested parties to comment on the scope of these proceedings, particularly whether the subject merchandise in this case comprises one class or kind of merchandise or more. Id. at 29704. 5 Special quality bar and rod is used where the steel is required to be hot- forged, heat-treated, cold-drawn, machined, or used in particular structural applications or in high product liability applications. Speci,al quality bar and rod is produced to be as free from visible surface def~cts _an~ excessive chemical segregation as is possible given the . pa.rticular metallurgy. Special quality carbon steel bar and rod generally is subjected to rigorous product analysis and chemical uniformity which are not typical of merchant quality hot-rolled carbon steel bar and rod. Special quality hot-rolled carbon steel bar and rod is used in the specialized manufacturing operations for critical components in high performance machinery.8 The special quality steel products subject to this investigation fall into two types of categories: "semifinished" ingots, blooms and billets, and "hot- rolled" bar and rod. The term "semifinished" in this investigation means the products which are the result of both conventional ingot teeming9 and continuous casting: ingots, blooms, or billets. 10 These semifinished products are normally of much greater dia.lneter than finished hot-rolled bar or rod. They have not been further worked as hot steel other than undergoing initial hot-rolling or rough shaping by forging (pressing). Most U.S. producers classify any product greater than 4 inches in cross section as "semifinished" steel. 11 8 Certain Hot-Rolled Lead and Bismuth Carbon Steel Products from Brazil, France, Germany, and the United Kingdom, Invs. Nos. 701-TA-314 through 317 (Preliminary), and Invs. Nos. 731-TA-552 through 555 (Prelfminary), USITC Pub. 2512 (June 1992) (Lead and Bismuth Investigations) at 7-8. 9 For a discussion of "ingot teeming" and "continuous casting," see the Staff Report to the Commission (July 16, 1992) in this. investigation ("Report") at 1- 13 - 1-15. 10 An "ingot" is the largest semifinished form. ·rt is produced by pouring liquid steel into a large round shaped mould. When the steel has cooled, the mould is removed and the ingot is then reheated and hot-rolled into a bloom. There are no widely accepted precise definitions for a "bloom" or "billet"; the principal distinction is one of size -- blooms are larger than billets in cross- sectional area and commonly include products greater than 7 inches in diameter. Billets normally include circular, square or rounded corner square products typically greater than 4 inches in diameter. Report I-15 n.15. Semifinished "slabs" used to make flat-rolled products are not included within this investigation. 11 Questionnaire responses. 6 The second major category of special quality steels subject to this investigation are certain imports of "hot-rolled" bar arid rod. These products are manufactured by heating (usually to above 2;200 degrees F) and reducing a' semifinished billet to a final thickness and shape by passing it through a series of rolls. 12 A "cold-finished" or "cold-formed" bar is a hot-rolled product which is descaled (submerged in an acid solution or shot blast) · to remove oxide scale formed during the hot-rolling process, and which then undergoes . additional processing at ambient temperatures in the form of polishing, turning, grinding, and/or straightening. 13 Hot-rolled "bar" includes hot-rolled products both in cut-lengths and irregularly wound coils.1 4 Bar may be round, rectangular, and hexagonal, and consist of various diameters froni 1/2 to 12 inches, with the upper limit for coiled bar being 2 inches.15 The subject imports include cut-length hot-rolled bar, but not coiled hot-rolled bar. Hot-rolled "rod" includes coiled, hot- rolled product of a solid, approximately round cross section, not under 0.20 inches nor over 0.74 inches in diameter. 16 The subject imports include cut- length rod, but not coiled rod. There were no cut-length special quality rod products manufactured by U.S. producers during the period of investigation. 17 12 Report C-4. 13 Lead and Bismuth Investigations at 5. 14 Report C-4. 15 Id. 16 Id. As used herein, neither hot-rolled carbon steel bar nor hot-rolled carbon steel rod include reinforcing bar or rod, which is part of "merchant" quality hot-rolled carbon steel bar and rod. Id. 17 Questionnaire responses; Report D-14. There were very small amounts of imports of special quality cut-length rod from Brazil during the period of investigation. 7 The special quality steels subject to investigation include both carbon and alloy steels. "Carbon steel" means all nonalloy steel ·that contains less than 2 percent carbon. 18 n Alloy steel II is defined in the Harmonized· Tariff System of. the United States (HTSUS) as steels which contain a number of different elements in specified amounts including aluminum, boron, chromium, cobalt, copper, lead, manganese, molybdenum, nickel, niobium, silicon, titanium, tungsten, vanadium, zirconium, and other elements with 0.1 percent or more of other elements. 19 A subcategory of special· quality steels is "free-machining" steels. 20 Hot-rolled free-machining steels are primarily carbon ·steel bar (only small amounts of rod) that contain properties that allow end-users of cold-finished bar to machine, forge, or cut more easily than other types of carbon steel. "Machinability" is that combination of physical and metallurgical properties of a steel that determines how easily metal may' be removed·by a cutting tool. 21 Free-machining steels are either resulphurized · (sulphur added), and/or rephosphorized (phosphorus added), renitrogenized (nitrogen added), or contain lead, bismuth, selenium or tellurium additives.22 18 Report C-3. 19 HTSUS Chapter 72, Note l(f), at 72-2. 20 The term "free-machining" is typically used in the United States and "free- cutting" is also used interchangeably in other countries. A subcategory of free- machining steels is lead and bismuth steels which are used for more intensive cutting (when more than 30 percent of the stock must be removed), while non- leaded free-machining steels are used where less intensive cutting is required. Lead and Bismuth Investigations. at 10-11. 21 Report C-5. 22 Transcript of Preliminary Conference, June 30, 1992 ("Tr.") at 77. In addition, in higher carbon steels, calcium is added to facilitate the cutting with carbide tools. See also, HTSUS, Chapter 72, subheading Note l(b). 8 B. Like Product Analysis Based on the information available to the Commission in this preliminary investigation, we find that there are. two like products:. (1) semifinished special quality carbon and alloy steel, and (2) hot-rolled special quality carbon and alloy bar, including cut-length and coiled bar, and cut-length rod. Set forth below is our analysis of .the parties' arguments. and the relevant issues. Petitioners are Republic Epgineered Steels, Inc·.. (R~public), . and The Timken Company (Timken) (collectively referred to herein. as "petitioners"~. 23 They assert that there should be one like product which consists of the same products as the subject imports and silico-manganese and semifinished high., nickel alloy steels (which are not included within_the class or kind of imported merchandise) . 24 Five Brazilian producers of the products subject to inv.estigation appeared as respondents ("Brazilian respondents") . 25 They_,generally agree with mud~ of the petitioners' proposed like product, including the combining of carbon and 23 Inland Steel Industries (Inland) and Bethlehem Steel Corporation petitioners in the recent Lead and Bismuth Investigations appearances as interested U.S. producers. (Bethlehem) entered 24 Post-Conference Brief on behalf of Republic Engineered Steels, Inc. and The Timken Company, July 6, 1992 ("Petitioners' Br.") at 1, 6-7. Petitioners also assert that lead and bismuth steels (found by the Commission in the earlier investigations to be a segment of special quality steels), large special quality forged bar (in excess of i2 inch diameter), and coiled.special quality bar and rod should be excluded from the like product definition. 25 These respondents include Ac'os Anhanguera (Villares) SA, Acesita - Cia Acos Especiais Itabiera, Mannesman S/A, Acos rinos Piratini SA, and Villares Industrias de Base SA. Several of these Brazilian respondents were also respondents in the Lead and Bismuth Investigations. Also entering appearances are two importers of the subject imports, Caterpillar Inc. (U.S. manufacturer of heavy equipment), and Raritan River ~teel. C?mpany (U.S. wire rod manufacturer). 9 alloy, and of semifinished with hot-rolled special quality products in one like product. 26 However, the Brazilian respondents contend that lead and bismuth steels.and coiled special quality hot-rolled bar and rod also should be included with the other special quality steels within a single like product. Caterpillar concurs with the Brazilian respondents, but argues that large diameter forged (too large to be hot-rolled) bar should be included within a single like product of special quality steels. 27 Inland and Bethlehem repeat many of the same arguments they raised in the Lead and Bismuth Investigations, i.e .. , that special quality lead and bismuth hot-rolled bar and rod should not be included in the same like product with other types of special quality steers.28 However, they now offer an alternative position that free-machining steels (lead and non-lead) should be a separate like product. The Cold Finished Steel Bar Institute argues that free-machining steels (defined to include only 1200 serie~ carbon steels) should be a separate like product apart from other special quality steels. 29 Finally, the Raritan River Steel Company maintains that semifinished special quality steel billets should be a separate like product.30 None of the parties asserts that the like product should include 26 Post-Conference Brief of Brazilian Respondents, July 6, 1992 ("Brazilian Br.") at 5. 27 Post-Conference Brief of Caterpillar Inc., July 6, 1992 ("Caterpillar Br.") at 6-7. 28 Post-Conference Brief of Bethlehem Steel Corp. Bar Rod & Wire Division and Inland Steel Bar Company, July 6, 1992 ("Bethlehem and Inland Br.") at 21-25. 29 Post-Conference Brief by the Cold Finished Steel Bar Institute, July 6, 1992 ("Institute Br.") at 2-6. 30 Post-Conference Brief Submitted on Behalf of Raritan River Steel Company, July 6, 1992 ("Raritan Br.") at 1-14. 10 "merchant" quality carbon steel bar and rod. Many of the parties have indicated their agreement with the Commission's preliminary determination in the Lead and Bismuth Investigations separating merchant from special quality hot-rolled bar and rod. Evidence gathered in this investigation lends further support to that conclusion. 31 Indeed, both the petitioners and the Brazilian respondents in the Lead and Bismuth Investigations have indicated in this investigation that they support excluding merchant quality carbon steel bar and rod from the like product in this investigation.32 Similarly, none of the parties argue that the like product should not include both carbon and alloy special quality steel products. 33 To the contrary, petitioners and the Brazilian respondents contend that carbon and alloy special quality steels should be combined in a single like product. The record in this investigation strongly indicates that there is no bright line distinction 31 Report E-6. Transcript of preliminary conference, June 30, 1992 ("Tr.") 94-100. 32 Petitioners' Br. at l; Brazilian Br. at 7-8. There is a substantial dispute between petitioners and the Brazilian respondents concerning whether a large portion of the subject imports are "merchant" or "special quality." Based on discussions with industry.experts and metallurgists, it would appear that the majority of the products are special quality .. Report I-122. However, it is difficult to make a definitive finding without knowledge of the end use or the specifications -- information not provided to the Commission. Thus, in this preliminary investigation, we_ have given petitioners the benefit of any doubt concerning the categorization of these imports. We will investigate this issue further in any final investigation. 33 A decade ago, the Commission found that carbon and alloy hot-rolled bars were separate like products. Certain Steel Products from Belgium. Brazil, France, Italy. Luxembourg. the Netherlands, Romania. the United Kingdom, and West Germany, Invs. Nos. 701-TA-86 through 144, 701-TA-146 and .147 (Preliminary), and Invs. Nos. 731-TA-53 through.86 (Preliminary), USITC Pub. 1221 (Feb. 1982) Vol. I at 11. However, the Commission did not provide a detailed analysis of the distinctions between carbon and alloy hot-rolled bars either in its 1982 decision or in the Commission report. 11 between carbon and alloy special quality steels.34 1. Semifinished special quality carbon and alloy steel as a separate like product35 We determine in this tnvestigation · that semifinished special quality steels should not be combined in the same like product ~ith hot-rolled special quality steel bar. In analyzing whether a semifinished product should be included in the same like product with a finished product, the· Commission typically examines five factors, including: 1) the necessity for, and costs of, further processing; 2) the degree of interchangeability of articles at dtfferent stages of production; 3) whether the article at an earlier stage of production is dedicated to use in the finished article; 4) whether there are significant independent uses or markets for the finished and unfinished articles; and 5) 34 Physical characteristics of both carbon and alloy special quaii.ty steels involve similar high levels of cleanliness, soundness and uniformity of chemical consistency. Both also have surface quality suitable for rerolling or forging. Carbon and alloy special quality steels are produced in similar sizes, shapes, and configurations. Both are sold to the same end use markets, whether it be to cold finishers, forgers, or auto and appliance maQufacturers. The end uses for both carbon and alloy steels products are very similar -- both are used for hot forging, and rerolling into special quality bars and rods. End products include forgings, bolts, fasteners, tools & construction applications. For discussion of above, ~Tr. 94-100. A number of U.S. steel producers manufacture both carbon and alloy special quality semifinished and hot-rolled bar using the same workers, processes and equipment. Both alloy and carbon steels can be heat-treated, and· the internal quality chemistry control for carbon steel is as demanding as for alloy steel. Finally; carbon and alloy special quality steels are priced similarly, except for the additional costs associated with the specific alloying elements added. Id.; Report E-3 - E-4. 3S We have included carbon semifinished ingots within the semifinished special quality like product in this investigation. The record. indicates that there continues to be some production of carbon ingots dedicated to the production of special· quality hot-rolled bar. It is neither customary nor practicable for U.S. integrated producers of carbon steel ingots to· transfer special quality ingots from hot-rolled bar and rod products to flat rolled products, and vice versa. Office of Industries Memorandum, July 17, 1992. Furthermore, there is no distinction in chemistry between special quality carbon ingots and special quality carbon blooms, billets and hot-rolled products ·of the same grade of steel. 12 whether the article at an earlier stage. of production embodie·s or imparts to the finished article an essential characteristic or· function. 36 In applying these factors, the record indicates that approximately 85 · percent of the semifinished special quality ste~l -- ingots, blooms and biliets -- produced in the United States is further hot-rolled into bar er rod by the same steel manufacturers producing the semifinished product. 37 The remaining 15 percent of semifinished steel not consumed internally is sold· by U.S. producers in an independent U.S. market to the forging industry, 38 to several wire rod producers, and at least one bar producer. 39 This· independent market in semifinished special quality steels is also the destination of the subject • imports of semifinished special quality steels. These' semifinished imports· enter the United States under separate headings in the HTSUS. for semifinished steels. 40 Generally, however, most U.S. producers of special quality bar and rod ·produce their own semifinished steel,41 The processing costs incurred in transforming a· semifinished special quality steel product into a hot-rolled product are relatively significant. 42 The Commission previously has found a separate like product where the 'costs of 36 See, ~, Fresh and Chilled Atlantic Salmon from Norway, Inv. Nos. 701-TA· 302, 731-TA-454 (Final), USITC Pub. 2371 at 8-9 (April 1991) ·(semifinished product analysis used to determine whether salmon smolt and adult.salmon should be included in same like product). 37 Report, Table BC, at I-67. 38 Id. at I-60. 39 Id. at I-32; Tr. 14. 40 Petition at 7. 41 Report I-34 - I-39. 42 Petitioners' Br. at 4-5. 13 completing a finished product were significant·. 43 Because of the necessity for ~urther processing, semifinished billets or blooms and the finish~d hot-rolied bar generally are not interchangeable in use. The·finished bar product -normally has a considerably smaller cross section than a semifinished billet, bloom, or much larger ingot. Most purchasers of bar do not have the facilities to reheat· and re-roll billets or blooms into bar. 44 Thus, the billet, bloom, or ingot cannot be used for the same purposes as the finished hot-rolled product without additional heating and hot-rolling. The hot-rolling process, which transforms the semifinished product into a finished bar or rod, enhances the mechanical qualities (tensile strength, toughness, and resistance to fatigue). of the ste"el. 45 Nevertheless, the steel chemistry, which largely determines resulting mechanical qualities, is present in both the semifinished steel arid the hot:-rolled bar and rod. 46 However, semifinished steels generally have distinctly larger and rougher physical shapes than the variety of shapes found in smaller hot-rolled finished products. In light of the fact that (1) there is an important independent market for semifinished special qu~lity steel, (2) significant costs are involved in transforming semifinished special quality steel into finished hot-rolled special 43 See Tart Cherrv Juice and Tart Cherrv Juice Concentrate from Germanv and Yugoslavia, lnvs. Nos. 731-TA-512 and 513 (Preliminary), USITC Pub. 2378 (May 1991) at 10-12 (raw cherries treated as separate like product where cost of picking and sorting was a small percentage of the total cost of processed cherry juice concentrate); Cf. Magnesium from Canada and Norway, Inv. Nos. 731-TA-528 and 529 (Preliminary), USITC Pub. 2443 (October 1991) at 1-11 (no separate like product found where, inter alia, further processing of pure magnesium into alloy is minimal compared to cost of processing raw materials into pure magnesium). 44 Tr. 92-93. 45 Tr .. 89-90. 46 See Report 1-17. 14 quality bar, and (3) many essential characteristics of the semifinished special quality steel are distinct from those of hot-rolled special quality bar, we find that semifinished special quality steel should be a separate like product.47 2. Hot-rolled special quality carbon and alloy·bar and cut-length rod as a separate like product 48 We further determine that a second like product is special quality hot- '. . rolled bar (both coiled and cut-length) and cut-length rod. 49 Petitioners argue that coiled hot-rolled special quality bar and rod should be excluded from the like product. 50 The Brazilian respondents assert there are no significant 47 In finding a separate like product for semifinished special quality steel, we also have considered the fact that semifinished special quality steel ingots, blooms and billets can and are used to produce both special quality bar and coiled rod. Data collected by t_he Comlillssion in this investigation with respect to semifinished steel could not be broken out by (a) semifinished steel used to produce bar and (b) semifinished steel used to produce rod. Because coiled rod is not subject to investigation, or included with any like product in this investigation, we cannot. logically combine semifinished special quality steel (used to make bar and rod) with hot-rolled bar. 48 We have not included "forged bars" within either like product. Forged bars are very large bars _in excess of 12 inch square or round which are too large to be rolled by any facility in the United States. Forged bars represent a very small segment of the special quality steel market, are specialized, exp.ensive products for a limited number of particular customers, and are produced by a completely different process than hot-rolled bar, ~. by means of "hammering" a heated ingot. 49 By combining cut-length rod with bar in this ~nvestigation, we do not intend to suggest that coiled rod and bar are part of the same domestic, industry. Unlike the Lead and Bismuth Investigations, the Commis~ion obtained considerable evidence in this investigation indicating that bar and coiled rod are distinct industries. Special quality bar and special quality coiled. rod have somewhat different physical characteristics, distinct end uses, are produced in different mills, using related but somewhat different processes,. are perceived as different products, are generally not interchangeable, and coiled rod is less expensive. Report D-11 - D-14. 50 One U.S. producer indicated that "if you were to uncoil a coiled product and cut it into straight lengths, you would have cut-length products." Another U.S. producer stated that "[g]enerally, special quality bar products up to approximately 2" in diameter may be supplied in straights or in coil." Questionnaire responses. 15 differences between coiled and uncoiled bar and rod in either production processes or end uses.S1 Given the fact that the subject imports specifically include only cut- length par and cut-length rod, there is. an issue whether either coiled bar and/or coiled rod should be included in the like product. a. Combining coiled bar with cut-length barS 2 Hot-rolled special quality bar in coiled form is essentially identical to cut-length bar of a similar metallurgy in terms. of physical characteristics and surface condition. Coiled and cut-length bar are both available in the same sizes and shapes up to two inches in diameter; greater diameters are only available in cut-lengths.S3 Both cut-length and coiled bar are used by cold- finishers and in cold-heading operations.S 4 Some cold-finishers prefer coiled bar because its length permits more efficient processing.SS However, some users require cut-length because they may not have the equipment to handle heavier coil, or need bar in diameters in excess of tWo inches. Thus, the choice of whether to use cut-length or coiled bar is a function of the customer's equipment, facilities and preferences. S6 . A number of U.S. producers and S1 Brazilian Br. at 11. S2 Petitioners have presented no arguments to justify the exclusion of coiled special quality bar from comparable cut-length special quality bar. Indeed, Republic and Inland produce both cut-length and coiled special quality bar in the same bar mill. Tr. 111, 119. U.S. producers Bethlehem and Inland state that "[t]here are no important differences between coiled and uncoiled bar products." Bethlehem Br. Exhibit 1 at 4. s3 Report D-9. S4 Id. at I-54-55, Table 6. SS Questionnaire response. S6 Report E-8 - E-9. 16 importers of the products under investigation have confirmed that both cut- length and coiled bar are perceived by purchasers to be essentially similar products . 57 , Many bar manufacturers use exactly the sam.e equipment, processes and workers for production of all of their bar, with the diversion-to cutting or coiling facilities made only as th~ last step.5 8 After hot-rolling, the bar is either cut to convenient shipping lengths or rolled into coils. The steel is the same in either case, with the only possible difference being greater } incidental hardness for coiled steel due to the more gradual'cooling times it requires. 59 Finally, the pr.ices of coiled and _cut-length bar are comparable. In short, the record indicates that the domestic product most like the subject imports of cut-length special quality bar is both cut-length and coiled special quality bar. Accordingly, we hold that hot-rolled special quality bar products, both cut-length and coiled, should be included in the same like product.60 57 Questionnaire responses. 58 Report E-9; Questionnaire responses .. Cut-length products require cooling beds, shears, length measuring devices, and yield planning while coils require coiling tubs and coil handling facilities. Id. 59 Id. · 60 We have also included silico-manganese and high-nickel alloy steels within both the semifinished and hot-rolled special quality bar like products. Based on the limited information available to the Commission, there appears to be no justification to exclude these alloy steels from other types of special quality steels. We will revisit this issue in any final investigation. 17 b. Excluding coiled rod from the like product of hot-rolled special quality bar and cut-length rod We further determine that cut-length rod, but not coiled rod, is included in the same like product with special quality hot-rolled carbon and alloy bar. Commerce's class or kind notice includes' special quality cut-length rod. Unlike cut-length' bar, the record indicates that none of the U.S. steel manufacturers responding to the questionn~ires produce special quality cut-length rod.61 Rather, these manufacturers report. that they make and sell cut-length and coiled bar, or coiled rod. 62.· ·The record suggests that cut-length rod has certain similar characteristics to cut-length bar of a comparable size.· Rod sizes range from 7/32 inch to 47/64 inch, with the great majority of rod being produce~ to 7/32 inch diameters. Bar siz.es generally begin at 1/2 inch· and can increase up to 12 inches in diameter. 63 Thus, in the grey area between 1/2 .inch. and 3/4 inch in which the size of bar and rod overlap, a rod between 1/2 inch and 3/4 inch is similar to a bar of a similar cross-section diameter in terms of metallurgy, and physical characteristics. 64 Both bar and rod ~f similar cross section shape 61 There appears to be only a very small amount of imports of special quality cut-length rod during the period of investig~tion. There is very limited production of lower·merchant type quality rod which is cut-to-length after the rod has already been cooled and coiled in the rod mill. Report D-14. 62 There is evidence that small quantities of low quality merchant grade rod (less than 1 percent of total rod production) are produced by several U.S. rod producers in cut-length form. This product is used in construction for low stress applications. Report D-14. 63 Report C-4, D-13. 64 Report 1-20. Less than five percent of all rod (including coiled) is produced to diameters between 1/2 inch and 3/4 inch, and the amount produced over 3/4 inch is minimal. Bar is typically produced in diameters above 1/2 inch,· with a very small amount produced below 1/2 inch. Report D-12 - D-13. 18 and diameter are produced with rolling equipment and techniques which are somewhat comparable.65 Finally, the record indicates that rod products are almost always coiled, and over 95 percent of coiled rod products are further processed into wire rod for redraw application for end use products such as tire ·cord wire or valve spring wire. 66 Coiled rod is not interchangeable with cut-length rod for the purposes of making wire rod.67 Accordingly, we find that cut-length special quality rod, but not coiled rod', is part of one like product together with special quality ·hot-rolled bar, both cut-length and coiled. 3. Proposed like product of free-machining hot-rolled carbon and alloy steel bar and cut-length rod We are not persuaded, based on the record in this preliminary investigation, that there should be a separate like product limited to hot- rolled free-ma,chining carbon steel bar and rod. Several parties have argued that free-machining steels 68 should be a separate like product aRart from other types of special quality steels. 69 65 Report I -18. 66 Questionnaire response. 67 Tr. 140-41. 68 The definitions of free-machining -and free-cutting steels are set forth in the Report in detail at I-8. The Report details the apparent lack of agreement concerning the definition and scope of "free-machining" and "free-cutting" steels among foreign and U.S. producers, and the U.S. cold finishers. 69 The Cold Finished Steel Bar Institute ("Institute"), Bethlehem and Inland, and a number of importers and producers provided information on free-machining steels. The Institute argues that the Commission should find a separate like product of free-machining steels, which they define to include all carbon steels which have been resulphurized and rephosphorized · in the 1200 carbon series (including lead/bismuth steels). Such a definition is narrower than that proposed by Bethlehem and Inland and as defined by the Commission in the Lead 19 This record indicates that free-machining steels in the 1100 a~d 1200 · carbon series grad~s are distributed primarily to cold-finishers, while approximately· 15. percent of non-free-machining. ~pe:cial quality steels are purchased by cold-finishers. 70 Howeve~, both free-m~chining and other.types·C?f special quality steels are also distributed to forgers, steel service centers, and other purchasers. 71 Free-machining steels are less likely than other special quality steels to be used in high strength or fatigue critical applications.n Some of the new evidence indicates that producers and customers perceive free-machining.steels as a distinct prod~ct with distinct uses. Bethlehem and Inland note that steel producers market free-machining steels as a separate category (like stainless and tool steel).73 There are some differences in production processes between free-machining steels and other types of special quality steels, particularly with respect to leaded steels. However, the majority of the processes for teeming, pouring, hot-rolling, inspecting, conditioning, and shipping for both non-free-machining . and free-machining steel(includlng leaded steel) are identical.74 All of the U.S. producers of free-machining steels also produce other types of speci~l and Bismuth Investigations. Id. at 10 n.29. Bethlehem and Inland raise an argument in the alternative that the Commission should find free-machining steels (including lead and bismuth steels) to be a separate like product from other special quality steels. Petitioners state that free-machining steels other than lead and btsmuth should be included in the one like product based on similar methods of manufacturing, channels of distribution and customer perce.ptions. Petitioners' Br. at 3. · 70 Report Table 6, at I-55. 71 .Id. n Questionnaire response. 73 Bethlehem and Inland Br. at 19. 74 Questionnaire response. 20 quality steels.75 The same workers generaliy are used in manufacturing all types of special quality steels. Finally, the record indicates that.while the prices for free-machining steel move together and at a premium as compared to less machinable grades, the prices for certain types of special quality steel can be more expensive than free-machining steels. 76 D. Like Product Summary Thus, for the purposes of this preliminary investigation, we find two separate like products of semifinished special quality carbon and alloy steel, and hot-rolled special quality carbon and alloy bar (coiled and cut-length) and cut-length rod. The semifinished special quality like product includes carbon and alloy ingots, blooms, and billets, lead and bismuth,n high-nickel alloy, and silico-manganese semifinished steels, but does not include semifinished forged bar or semifinished stainless and tool steels. The hot-rolled special quality like product includes lead and bismuth free-machining, silico- manganese, and high-nickel alloy steels, coiled and cut-length bar, and cut- 75 Report I-40. 76 In the Lead and Bismuth Investigations, five of the six Commissioners determined not to adopt a like product of free-machining steels, but instead determined that the like product should be the broader category of special quality steels. However, these Commissioners indicated that·such a like product ·would be examined in detail in any final investigation in this case. Id. at 22. Similarly, in the event of a final investigation, we intend to examine in greater detail whether free-machining steels should be considered a separate like product of special quality semifinished and/or special quality hot-rol~ed bar and cut- length rod. n We also are not persuaded that any substantial new evidence has been presented by petitioners or Bethlehem and Inland regarding whether lead and bi~muth steels should be considered separately from all other types of special quality steels. Most of the information provided in this investigation was available in the record of the Lead and Bismuth Investigations. For the reasons stated in the Commission's preliminary determination in Lead and Bismuth Investigations at 14-19, and in this decision, we include lead and bismuth special quality bar and cut-length rod in the same like product with other types of special quality hot-rolled bar and cut-length rod .. 21 length rod, but does not include coiled rod, stainless steels, and tool steels. We, therefore, determine that the relevant domestic industries for the purposes of our analysis consist of the domestic producers of semifinished special quality steels, ·and the domestic producers of hot-rolled special quality bar and cut-length rod.78 III. CONDITION OP' THE INDUSTRY In assessing whether there is a reasonable indication of material injury to a domestic industry by reason of allegedly dumped imports, the Commission is instructed to consider "all relevant economic factors which have a bearing on the' state of the industry in the United States . n79 In undertaking that assessment, we consider, among other relevant factors, U.S. consumption, production, shipments, capacity utilization, employment, wages, financial performance, capital investment, and research and development expenses. 80 No single factor is considered dispositive in evaluating the condition of the industry. In each investigation, the Commission considers the particular nature of each of the industries under investigation81 in the "context of the business cycle and conditions of competition that are distinctive to the affected 78 We note that there is a related parties· issue pursuant to 19 U.S. C. § 1677(4)(B) for one U.S. producer, Raritan River.·Steel Company ("Raritan") of semifinished special quality steel (dedicated to the production of wire rod) who is also importing substantial quantities of special quality semifinished billets. None of the parties has raised the related parties issue. In this preliminary investigation we determine not to exclude Raritan from our consideration of the domestic industry. We intend to investigate this issue further in any final investigation, including whether Raritan's role as an importer shields it from the effects of the unfair imports. 79 19 U.S.C. § 1677(7)(C)(iii). 80 See 19 U.S.C. § 1677(7)(C)(iii). 81 See 19 U.S.C. § 1677(7)(C)(iii). See· also H.R. Rep. No. 317, 96th Cong., 1st Sess. 36; S. Rep. No. 249, 96th Cong., 1st Sess. 88. 22 industry. nB2 A. Market characteristics The Commission has identified at least twenty, U.S. producers of semifinished special quality products. 83 Hot-rolled special quality bar is manufactured by at least nineteen different U.S. produ~ers.84 Integrated steel producers account for approximately tWo-thirds of: special quality steel production in the United States. 85 These integrated producers tradftionally have made special quality steel by proc~ssing Yr~~ o~e. maki~g coke, and iron prior to refining special quality steel.86 Many of.these integrated producers "teem" or pour hot liquid special quality steel into ingots.8 7 The other group of U_. S: producers 'of sp~cial quality steel, accounting for approximately one-third of production, are the so-called ~inimills. These minimills use electric arc furnaces and scrap as the primary raw material, and generally use continuous casting equipment' t~ cast billets and blooms. directly' bypassing the ingot process.as ' . ' Because some integrated producers now also use electric arc furnaces, '· scrap and continuous casting equipment, there increasingly is a blurring of the lines between the two types of producers. The semifinished sp.ec'ial quality and hot-rotled special quality bar products manufactured by these producers and the subject imports are used in 82 19 u.s.c. § 1677(7){C)(iii). 83 Report I-40, Table 4. 84 Id. 85 Id. at H-3. 86 Id. at I-41. 87 Id. 88 IQ. 23 the automobile, heavy equipment, and farm machinery industries. While large quantitie~ of these steel products are sold directly to ~arge manufacturers to: ... - . . . . . be further processed for use in final products, significant quantities are also sold to independent forgers, cold finishe~s .' steel distributors, and other classes of customers. Producers and importers.have indicated that demand for these products has generally decline4 since 1989 _as a result of t~e ~ecession and the declining U.S. market share of the major domestic auto producers. 89 B. Domestic industry of s~mifinished special quality steel. . . . Apparent U.S. co~sumption of semifinished special_quality steel increased by 15 percent from 5. 67 million tons to. 6. 52 million tons between 1989 and 1990, but deer.eased by 12. 6 percent to 5. 70 million tons in 1991. 90 The U.S .. producers' market share by quantity rose from 9L 1 percent in 1989 to 91. 5 percent in 1990, before declining to 89.2 percent in 1991 and 87.4 percent in< ' ~ • • • • the first quarter of 1992. 91 The U.S. producers' market share by value increased' ; - from 91 percent in. 1989 to 91. 7 percent in 1990, -before decreas_ing _to 89.9 percent in 1991, and falling further to 88. 2 perc_ent, in the first quarter of 1992. 92 The d~mestic se~ifinished special quality steel industry's capacity utilization increased from 65.1 percent in 1989 to 69_percent in 1990, before falling to 60.5 percent in 1991. The U.S. industry's shipments by quantity. increased by 15.5 percent between 1989 and 1990, but declined by 14.7 percent between 1990 and 1991. U.S. shipments by value increased from $1. 83 billion in 89 !!!- at I-137. 90 Id. at G-17, Table G-14~ 91 Id. 92 Id. 24 1989 to $1.96 billion in 1990, but fell to $1.72 billion in 19~1. Productivity declined from 1989 through 1991. The number. of producti~n- workers,. hours worked, and total compensation increased between 1989 and 1990, but declined in 1991. Total hourly compensation declined between 1989:and 1990, but rose in 1991. End-of-period inventories declined steadily from 1989 to 1991. Overall profitability, as measured by operating losses, declined substantially by 290.5 percent between 1989 and 1991. 93 Net sales increased between 1989 and 1990, but declined by a greater amount between 1990 and 1991 resulting in a net decrease during the overall period of investigation. 94 ' The cost of goods sold increased throughout the period of investigation. A number of U.S. producers indicated that the subject imports had a negative effect on their revenue and thus, a negative impact on their development and production efforts. 95 In fact, there was a major decline in capital expenditures for production of semifinished special quality steels during the period of investigation. 96 Research and development expenses for these semifinished steels increased between 1989 and 1990, but fell between 1990 and 1991. We note that production of special quality steel, both semifinished and hot-rolled bar, is highly capital intensive, and producers must have access to sufficient capital to be able to invest large sums in modern facilities, such as continuous bloom and billet casters, automated slag removal systems, and quality control inspection and conditioning equipment.97 Thus, weak operating 93 Id. 94 .Id. at Table G-14 . 95 Id. at Appendix I-3 - I-7. 96 Id. at A-107. 97 See Report I-10 - I-16; Timken trip report memorandum. 25 results are particularly Significant to the performance of this industry, as they ·indicate producers lack the internal resources to fund necessary capital development programs. In addition, poor financial performance may also limit access to external funding. C. Domestic industry producing hot-rolled special quality bar.and cut-length rod Apparent ·U.S. consumption of_ special quality hot-rolled bar (including cut-length rod) increased by 4 percent to 4.63 million tons between 1989 and 1990, but decreased by 10.8 percent to 4.13 million tons between 1990 and 1991. 98 The U.S. producers' market share by qu~ntity rose steadily from 88. 9 percent in .. 1989 to 90. 8 in 1990 before falling to 90 .1 in 1991. 99 The U.S. producers' market share by value increased from 89.8 percent in 1989 to 91.4 percent in 1990 before declining to 90.4 percent in 1991. 100 The domestic special quality hot-rolled steel bar industry's capacity utilization increased from 69.2 percent in 1989 to 71.9 percent in 1990, before falling to 62.1 percent in 1991. The U.S. industry's shipments by quantity increased by 6.3 percent between 1989 and 1990, but declined by 11.5 percent between 1990 and 1991. Shipments in the first quarter of 1992 increased by 12.6 percent. U.S. shipments by value increased from $2.06 billion in 1989 to $2.10 billion in 1990, and rose again to $2. 26 bi~lion in 1991. The number of production workers declined throughout the period of investigation. The number of hours worked and total compensation increased slightly between 1989 and 1990, but declined in 1991. End-of-period inventories increased sharply by 20. 3 98 Id. at G-38, Table G-35 .. 99 Id. 100 Id. 26 percent between 1989 and 1990, before declining by 12.2 percent between 1990 and 1991, and rising slightly in the first quarter of 1992. This industry suffered-significant decreases in overall profitability, which as measured by operating losses, declined by 70.1 percent between 1989 and 1991. Confronted with decreasing prices, the domestic industry was required to absorb increases in the cost of goods sold throughout the period of investigation. Net sales increased by 0.3 percent between 1989 and 1990, but declined by 11.4 percent between 1990 and 1991. Capital expenditures reported by U.S. producers of hot-rolled special quality bar and cut-length rod increased significantly from 1989 to 1990, but fell sharply between 1990 and 1991. 101 Research and development expenses in this industry rose·between 1989 and 1990, but stayed approximately the same between 1990 and 1991. 10 2 IV. REASONABLE INDICATION OF MATERIAL INJURY BY REASON OF ALLEGEDLY LTFV IMPORTS · In determining whether there is a reasonable indication of material injury to the domestic industry by reason of the imports under investigation, the statute 103 directs the Commission to consider: (I) the volume of imports of the merchandise which is the subject of the investigation, (II) the. effect of imports of that merchandise on prices in the United States for like prodμcts, and (III) the impact of imports of such merchandise on domestic producers of like products, but only in the context 101 Id. atA-107. 102 Id. at A-108. 103 19 U.S.C. § 1677(7)(B)(i). 27 of production operations within the. United. States. 104 In making this determination, the Commission may consider. "such o~her economic factors as are relevant to . the determination . II 105 Al though we may conside~ information that indicates that injury to the industry is ~aused by factors other than the LTFV imports, we do not weigh causes. The Commission need not determine that imports are the principal or a substantial cause of material injury. 106 Rather, the Commission need only determine whether imports are a cause of material injury. 107 108 104 Bethlehem and Inland urged the Commission to cumulate the subject imports in this investigation with imports of hot-rolled lead and bismuth bar and rod from Brazil, France, Germany, and the UK subject to the Lead and Bismuth Investigations, if our.definition of like product in this investigation is broad enough to include hot-rolled lead and bismuth bar and rod. Bethlehem and Inland Br. at 7, 25 n.44. See 19 U.S.C. § 1677(7)(iv)(I). One of the like products we have found in this investigation -- hot-rolled special quality carbon and alloy steel bar and cut- length rod - - does include hot-,rolled lead and bismuth bar and rod. We note, however, that the subject imports in this investigation and those in the Lead and Bismuth Investigations are mutually exclusive. ·we are not persuaded that there· is a sufficiently reasonable overlap of competition between the special quality lead and bismuth bar and rod imports and the much broader range of special quality semifinished and hot-~olled bar imports in this investigation to justify cumulation. Therefore, we have not cumulated imports from the Lead and Bismuth Investigations in this investigation. We intend to reconsider this issue in any final investigation, and invite the parties to comment on (1) whether .cumulation is required where separate investigations involve mutually exclusive imported products subject to investigation, and (2) if so, whether the subject imports in the two sets of investigations compete with each other, and whether there is a sufficient overlap of competition between the subject imports and the like products in this investigation. 105. 19 U.S.C. § 1677(7)(B)(ii). 106 .!:..&.:., Citrosuco Paulista S.A. v. United States, 704 F. Supp. 1075, 1101 (Ct. Int'l Trade 1988). See also S. Rep. No. 249, 96th Cong., 1st Sess. 57 (1979); H.R. Rep. No. 317, 96th Cong., 1st Sess. 46-47 (1979). 107 .See S. Rep. No. 249, 96th Cong., 1st Sess. 74-75 (1979). See also Iwatsu Electric Co. v. United States, 758 F. Supp. 1506 (CIT 1991). 108 Vice Chairman Watson believes that the courts have interpreted the statutory requirement that the Commission consider whether there is material injury "by reason of" the subject imports in a number of different ways. Compare, e.g., United Engineering, Slip Op. 91-101 at 36 ("rather it must determine whether 28 A. Semifinished special qwrlity .steel The quantity. of. subject. imports . as a· percent .of apparent domestic consumption of semifinished special _quality :steel incr,eased overall between the·· period of 1989 and 1991, falling from ·3.0 percent of -domestic consumption in 1989 to 2.2 percent in 1990, before rising to. 3.7 percent in 1991. 10? ·The value o~'.- the subject imports as a percentage of apparent domestic consumption also increased overall between the period of 1989. and 1991,. ini~ially falling from 2. 9 percent in 1989 to 2. 0 percent in 199.0, and increasing .to .3. 5 percent-- in 1991. On an abs.olute basis, the; quantity of subject imports decreased by 18. 7 percent from 1989 .to 1990, and then increased 51.8 percent in 1991, resulting· in an overall increase of 23.4 percent. 110 On the whole, we find this increasing.· volume and increasing share of consumptionaccounted for b.y the subject imports - - particularly between 1990 and 1991 when domestic consumption decreased substantially -- support a preliminary affirmative determination. The subject imports and d()mestic semifinished ·special, qu~lity steels unfairly-traded imports are contributing to such injury to the domestic industry (citations omitted). Such imports, therefore need not be the only cause of harm to the domestic industry"); Metallverken, 728 F. Supp. at 741 (affirming a determination by two Commissioners that "the imports were ·a cause· of material injury"); USX Corporation v. United States, 682 F. Supp. 60, 67 (CIT 1988) ("any causation analysis must have at its core, the issue of whether the imports at issue cause, in a non de minimis manner, the material injury. to the industry ... "); Maine Potato Council, 613 F. Supp. 1237, 1243 (CIT 1985)(Court declined to issue a remand even though the determination refers. to .. whether or not imports were a "material cause" of the domestic industry's injury). Accordingly, for purposes of this ,preliminary investigation, I have decided ~o adhere to the standard articulated by Congress in the_ legislative history of the pertinent provisions, which states, "the Commission-must sa~isfy, itself that, in iight of all the information presented, there is a sufficient causal link between the less-than-fair-value imports and the requisite injury." S. Rep. 96- 249 at 75, 96th Cong., 1st Sess. (1979). 109.~'Report G-17, Table G-14. 110 Id. at G-17, Table 14. 29 generally appear to be relatively substitutable for one another. Semifinished special quality steels are produced to internationally accepted.metallurgical, chemical and strength criteria. Many U.S. purchasers evaluate and qualify both domestic and foreign sources (including· those from Brazil) based on approved quality. 111 The quality of the Brazilian and domestic semifinished special quality product is comparable. 112 The parties acknowledged that the domestic product typically sells at a 5-8 percent premium to the imported subject product. 113 This premium reflects, i~ part, the desire of most U.S. purchasers of special quality steels to buy from U.S. producers based on more reliable service, delivery, and considerably smaller lead times. 11 4 We note, how~ver, a considerable percentage of· the Brazilian imports are sold to large U.S. purchasers based on long-term contracts which lessens the importance of the longer lead time factor. 115 On balance, we conclude that the market for semifinished special quality steel appears to be price sensitive. 116 Prices for the imported semifinished products under investigation have ·declined during much of the period of investigation even though domestic consumption and production capacity were at the similar levels in 1989 as in 111 Tr. 177-78. 112 Report 1-139. 113 Tr. 35, 108. 114 Report· 1-139. Upon the receipt of more complete pricing information in any final investigation, we will take into account such a premium in assessing any evidence of alleged price undercutting. 115 ls!· at 1-43, 1-137. 116 One importer stated at the preliminary conference that "[a] lmost every transaction is negotiated based on the competitive conditions facing the producer (importer) at the time. In essence, customers know it's a buyer's market that requires producers to behave accordingly." Tr. 143. 30 1991. 117 Many U.S. companies indicated that they have been forced to offer volume discounts and negotiate prices downward to meet competition. 11 8 In fact, unit values for domestic shipments were 4.4 percent lower in 1991 than in 1989. 119 Unit values for Brazilian imports declined even more, by 7.5 percent between 1989 and 1991. 120 There is incomplete evidence in the record regarding the reasons for such downward price movement. The Commission requested price information from U.S. producers and importers with respect to two types of semifinished special quality products. 121 In the five pricing comparisons available for the first semifinished product, import prices were lower than domestic prices in two of the five quarters. 122 In particular, the import price for the first quarter of 1992 reflected a considerable decline from the first quarter of 1989. In the second semifinished product, import prices were lower than prices for domestic product in five out of ten available quarters. Import prices for the second 117 Report I-140 - I-146. 118 Id. at 137. 119 Id. at G-17, Table G-14. 120 Id. 121 We note that evidence of underselling is· inconclusive in light of the incomplete pricing data obtained. Id. at I-140 - I-149. The Commission requested pricing data regarding seven special quality steel products from a number of U.S. producers and importers. For most of the product categories, only one or two producers provided useful information and, even in those cases, individual producers did not report prices in all quarters. Only four importers provided price information in their questionnaires. Efforts by staff to encourage importers to provide quarterly prices on other product categories not listed in. the questionnaire were unsuccessful. In any final investigation, we will vigorously seek to obtain more complete pricing information from importers, purchasers and U.S. producers. 122 Information on the following pricing discussion is set forth in the Report at I-148. 31 product declined steadily from the .first quarter of 1992. Petitioners assert that the special quality steel market (both semifinished and bar) is very competitive, with the primary basis of. competition being, price. 123 Petitioners' principal argument is that consistent price underselling by the subject Brazilian imports has depressed prices received by the dc;>.mes.tic industry for the like product. 124 The Brazilian respondents assert that lower prices for special quality steels are a result of aggressive pricing behavior ,by several U.S. producers with lower cost continuous strand casters seeking . to expand market share. 125 Caterpillar states that these Q.omestic suppliers are often the price leaders who undersell the Brazilian subject imports, 126 : Petitioner~ cite a number of instances of alleged price underselling by the .. ~ubje~t Brazilian imports resulting in lost sales or revenue. The Commission was able to confirm one lost revenue allegation by one U.S. producer of semifinished special quality steel as a result of low-priced imports from Brazil. 127 The U.S. producer reported that it was forced to reduce the delivered 123 Petitioners' Br. at 27-28. 124 Petitioners' Br. 24-28; Petition 34-40. Petitioner Timken's representative explained the pricing issue: .The.issue· here is not volume of imports, but rather the effect that the v.ery. low pricing of these imports had on the rest of the market pricing. The.volume in. and of itself would not have made the Timken Company or any othe~ producer healthy. The fundamental problem is the price level. Tr ..§8. 125 . Id. at 29-32. 126 Id, at 4-5. The Commission was not able to obtain complete pricing data from a sufficient number of U.S. producers -- including a number of U.S. producers with continuous strand casters - - which would confirm or refute such allegations. 127 Report I~l51. 32 value of its quotations by a substantial amount~ 1 28 The purchaser.acknowledged ! I that it had "threatened to increase 'its purchases of low-priced imports from Brazil unless domestic producers reduced their. prices ' on the specified products. " 129 Overall, the available informatfon with respect to se~ifi~ished special qua1ity steel in this preliml~ary i~vestigation establishes a reasonable indication that allegedly dumped imports.from Brazil, sold at declining prices, in increasing quantities, and ac~ounting for an increasing share of apparent U.S. consumption, have had an adverse. effect on domestic prices and sales and revenues of the domestic industry.· The negative revenue impact is particularly important because, as noted above, the special quality steel industry is one in which the producers mtist be able to lnvest large SUmS in capital equipment in order to remal.ri competitive. Profitability is extremely important to the continued ability ·of producers 'to remain viable competftors in the industry. We note that lower revenues appear to have contributed to the significant decrease in capital expenditures· in the semifinished special quality industry throughout the period of investigation. 130 ! B. Hot-rolled special quality bar and cut-length rod Many of the same mlirket forces and pricing factors discussed above ·regarding semifinished special quafit:y steel also apply to the domestic industry 128 Id. 129 Id. The Commission was able t9 follow-up on some of the lost sale and revenue allegations made by U.S. producers.. ·Many of the .. purchasers denied the allegations, but indicated that they had purchased Brazilian ~pecial _quaiity imports during the period of investigation. Id. at I-151 - I-155. In any final __ investigation, we will look carefully at any allegations of· lost ·sales· or revenues to determine the extent of any underselling by Brazilj.an subject imports. 130 I,g. at A-107. 33 producing hot-rolled special quality bar and cut-length rod. The quantity of subject imports as a percentage of U.S. domestic consumption of hot-rolled special quality bar and cut-length rod increased throughout the period of 1989 and 1991, increasing to 0.9 percent of domestic cons~ption in 1990 and rising again to 1. 0 percent in 1991. 131 The vaiue of the subject imports as a percentage of apparent domestic consumption also increased steadily between the period of 1989 and 1991. On an absolute basis, the quantity of subject imports increased 44.9 percent from 1989 to 1990, and then increased an additional 2.4 percent. in 1991, representing an overall increase of 48.3 percent. The comparable increase in value of the subject imports was 33.1 percent . . Imported and domestic special quality hot-rolled bar and cut-length rod generally appear to be relatively substitutable for one another. As with semifinished special quality steels, hot-rolled special quality ste.als are produced to internationally accepted standards. The quality of the Brazilian and domestic hot-rolled special quality product is . comparable. 132 As with semifinished special quality steel, the parties indicate that domestic hot- rolled special quality bar also typically sells at a 5-8 percent premium to the imported subject product, reflecting, in part, shorter lead times. 133 On balance, we conclude that the market for semifinished special quality steel appears to be price sensitive. As noted above in the discussion on semifinished special quality steel, petitioners argue that competition in the special quality hot-rolled bar market 131 Id. at G-38,·Table G-35. 132 Id. at 1-139. 133 Tr. 35, 108. 34 is based primarily on price. 134 Import prices for hot-rolled special quality bar products generally declined during much of the period of investigation.135 As in the semifinished special quality market, many U.S. companies indicated that they were forced to. offer volume discounts and negotiate prices to meet competition in the hot-rolled special quality bar market.136 The unit values of domestic shipments declined between 1989 and 1991.137 There is incomplete evidence in the record regarding the reasons for such lower prices. Petitioners cited several instances of alleged price underselling of special quality hot-rolled bar by 'the subject Brazilian imports. The Commission was not able to confirm these lost sales and revenues allegations. 138 , The Commission . requested price information from U.S. producers and i~porters with respect to five different types of special quality hot-rolled bar products. 139 Pricing comparisons were available on only three of the five products. For the first of these three products, the only comparison indicated that the import. price. was lower than . the domestic price. For the second product, .import. prices were lower than domestic prices .in all four quarters where compari·sons could be made. 140 For the third product, import prices were lower,than domestic prices in two of the ~en quarters where comparisons could be made, and were higher than domestic prices in the remaining eight quarters. 134 Petitioners' Br. at 27-28. 135 Report I-144 - I-146. 136 Id. at 137. 137 Id. at G-38, Table G-35. 138 Id. at I-151 - I-155. 139 Id. at I-144 - I-148; 140 Id. 35 We find that the available information in this preliminary. investigation. concerning the hot-rolled special quality bar market and domestic industry establishes a reaspnable indication that allegedly dumped imports from Brazil, sold at declining prices, in increasing quantities, and accounting for an increasing share of apparent U.S. consumption, have had an adverse effect on domestic prices and on the sales and revenues of the domestic industry. In addition, we note the failure of both importers and U.s.·producers to provide complete and useful information concerning pricing regarding most of the hot- rolled special quality bar products under investigation. Given the importance of pricing to both the petitioners' allegations and the respondents' arguments, we cannot conclude that there is no likelihood of evidence arising in a final investigation which will show that domestic prices are being suppressec;l by the subject imports. 141 ·Conclusion· For all of the reasons set . forth above, we determine that there is a reasonable indication that the domestic industry producing semifinished special quality steel and the domestic industry producing hot-rolled special quality bar and cut-length rod are materially injured by reason of the allegedly dumped imports from Brazil. 141 See American Lamb, 785 F. 2d at 1004. 36 37 SEPARATE VIEWS OF COMMISSIONER DAVID B. ROHR I determine that there is a reasonable indication that the domestic industries producing certain semif inished free machining steel products and certain semifinished special quality ("SQ") steel products, other than semif inished free machining steel products ("all other semifinished SQ products") are materially injured or threatened with material injury by reason of allegedly less than fair value (LTFV) imports from Brazil. I. determine that there is no reasonable indication that the domestic industry producing finished free machining bars and cut to length rod are materially injured or threatened with material injury by reason of allegedly L TFV imports from Brazil. I further determine that there is a reasonable indication that the domestic industry producing all other finished SQ bars and cut to length rod are being injured or threatened with material injury by reason of the allegedly L TFV imports from Brazil. In making this determination, I find there to be four like products corresponding to the imports subject to investigation: I. Semifinished free machining steel products 2. All other semifinishcd SQ steel products 3. Finished free machining steel products 4. All other finished SQ steel products. I find that all four of these industries arc currently experiencing material injury. For the category of finished free machining steel products, I find, in light, inter a/ia, of the insignificant volume, increases in, and market share of imports, that the allegedly L TFV imports were not a cause of and did not threaten the industry. For the other categories, I find that the record does not present clear and convincing evidence of no material injury or threat thereof. 38 LIKE PRODUCT/DOME.STIC INDUSTRY In all title VII investigations, I begin by defining the "like product" and the "domestic industry."1 This analysis starts with the imported articles subject to investigation. In its notice of initiation, 2 the Department of Commerce (Commerce) defined the articles subject to this investigation as follows: [H]ot-finished carbon and alloy ... steel bars and rods, other than forged, which have a uniform solid cross-section along their ·whole length ... The subject bars and rods are of special bar quality engineered steel that are described in Society of Automotive Engineers (SAE)' J403, J404, J41 l, Jl081, 11249, 11268, and modifications the.reof ... as classifiable _under the following subheadings of the Harmonized Tariff Schedule of the United States. (HTSUS): 7214.30, 7214.40.00 l 0, 7214.40.0030, 7214.40.0050, 7214.50.00 l 0, 7214.50.0030, 7214.50.0050, 7214.60.00 l 0, 7214.60.0030, 7214.60.0050, 7228.30.8005, and 7228.30.8050. Also included in the scope of this investigation are certain alloy ingots ... and semifinished products of carbon arid alloy ... steel, ... that are described in Society of Automotive Engineers (SAE) J403, J404, J4ll, Jl081, 11249, 11268, and modifications thereof, ... as classifiable under the following subheadings of the HTS: 7207.l l, 7207.12.0010, 7207.19.0030, 7207.20.0025, 7207.20.0075, 7224.10.0075, 7224.90.0045, and 7224.90.0065, except steels classified as other alloy steels by reason of containing by weight 0.4 percent or more of lead, or 0.1 percent or more of bismuth, tellurium, or selenium. 3 1 Section 771(4)(A) of the Tariff Act of 1930 defines the domestic industry for a particular investigation as "the domestic producers as a whole of a like product, or those producers whose collective output of the like product constitutes a major proportion of the total domestic production of that product ...." 19 U.S.C. § 1677(4)(A). "Like product" is defined as "a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to investigation ...." 19 U.S.C. § 1677(10). The Commission's decision regarding the appropriate domestic product or products like the imported articles subject to investigation is essentially a factual determination, and the Coinmission has applied the statutory standard of "like" or "most similar in characteristics and uses" on a case-by-case basis. The like product factors considered by the Commission have included: (l) physical characteristics and end uses, (2) interchangeability of the products, (3) channels of djstribution, (4) producer and customer perceptions, (5) common manufacturing facilities, production processes and production employees and, (6) where appropriate, price. Calabrian Coro. v. United States. Slip Op. 92-69 (CIT); Torrington Co. v. United States. 767 F. Supp. 744 (Ct. Int'l Trade 1990), ~ 938 F.2d 1278 (1991); Asocoflores. 693 F. Supp. 1165, 1168 n.4, 1180 n.7 (Ct. Int'l Trade 1988). No single factor is dispositive, and the Commission may conside·r other factors it deems relevant based upon the facts of a particular investigation. Generally, the Commission disregards minor variations between the articles subject to an investigation and looks for clear dividing lines between possible like products. S. Rep. No. 249, 96th Cong., lst Sess. 90-91 ( 1979). 2 57 Fed. Reg. 29703-04 (July 6, 1992).. 3 This class or kind excludes the following categories of special quality steels: I. semif inished carbon ingots 2. alloy silico-manganese steels 3. lead, bismuth, tellurium, or selenium hot-rolled carbon and alloy bar and rod (lead and bismuth steels) 4. coiled carbon and alloy hot-rolled bar and rod 39 None of the parties to this investiga_tion asserted that the like product should include "merchant" quality carbon steel bar and rod. Similarly, none of the parties argues that the like product should not include both llli2.Y and carbon SQ semifinished and hot-rolled steel products. 4 A. Free Machining Steel Products and All Other SQ Steel Products are Separate Like Products In analyzing the like product issue in this investigation, I begin with the issue of whether all SQ steels are a single like product. I note that a closely related issue was recently presented to the Commission in its recent preliminary investigation involving imports of lead and bismuth steel. Certain Hot-Rolled Lead and Bismuth Carbon Steel Products from Brazil. France. Germany. and the United Kingdom. Inv. Nos. 701-TA-314 through 317 (P) and 731· TA-SS2 through SSS (P), USITC Publication 2Sl2 (June 1992) ("lead and bismuth bars"). In my views in that investigation, I found that the evidence did not support the finding that lead and bismuth steel products were a separate like product. I did, however, conclude that the larger product category of "free machining" steel products, of which lead and bismuth steel products were a part, did satisfy the Commission's traditional criteria as a separate like S. forged carbon and alloy bar Commerce's initiation notice also indicated that it will be reviewing whether to create two separate classes or kinds, one for semifinished special quality steel, and a second for hot· rolled special quality carbon and alloy bar and rod. Specifically, Commerce noted that given (I) the clear distinction normally maintained in the steel trade between semif inished products and finished products such as bars and rods, and (2) an examination of the criteria used to evaluate class or kind of merchandise ... , we question petitioners' assertion that the subject merchandise comprises one class or kind of merchandise. Therefore, we are requesting all interested parties to comment on the scope of these proceedings, particularly whether the subject merchandise in this case comprises one class or kind of merchandise or more. ,Ul. at 29704. 4 A decade ago, the Commission found that carbon and alloy hot-rolled bars were separate like products. Certain Steel Products from Belgium. Brazil. France. Italy. Luxembourg. the Netherlands.· Romania. the United Kingdom. and West Germany. In vs. Nos. 701-TA-86 through 144, 701-TA-146 and 147 (Preliminary), and Invs. Nos. 731-TA-53 through 86 (Preliminary), USITC Pub. 1221 (Feb. 1982) ("1982 Steel Investigations"), Vol. I at 11. However, the Commission did not make a detailed analysis of the distinctions between carbon and alloy hot· rolled bars either in its 1982 decision or in the staff report. 40 product from other types of SQ steel products. 5 I believ·e that the record in this investigation supports and confirms that finding. I incorporate my analysis of the appropriateness of free machining steel products as a separate like product in these views. 6 The record in this investigation also contains additional information which supports this finding. The Commission received detailed information concerning free-machining steels from the Cold Finished Steel .Bar Institute C-lnstitute•), Bethlehem Steel and Inland Steel, and a number of importers and producers. The Commission also requested and received considerable information concerning free-machining steel compared to both lead and bismuth steels and other types of SQ steel products. With respect to physical characteristics, the record indicates that f rec-machining steel is •dirty" steel, !&..; it has sulphur, phosphorus, and/or lead/bismuth inclusions, which other types of SQ steel do not contain.7 Such inclusions permit the free-machining steel to be machined much ·more easily than other types of SQ steel. 8 In addition, free-machining steels run a higher risk of surface imperfections, and are not as good as other SQ steels in hot working operations due to· hot shortness (surface cracks caused by elevated sulphur levels). 9 Approximately two-thirds of all carbon and alloy free-machining bar and rod is distributed to cold-finishers. 10 On the other hand, only I S.6 percent of other types of SQ steel 5 Lead and Bismuth Bars at 31 - 44. · 6 Lead and Bismuth Bars, Views of Commissioner Rohr at 37-44. 7 Report l-8. 8 Bethlehem and Inland Br. at 18. 9 Producer questionnaire respon.se at 14; Producer questionnaire response at 18. 10 Report Table 6, at I-SS. 41 products are distributed to cold-finishers. 11 While a considerable majority of free-machining steels, particularly in the 1200 carbon series, are further processed by cold finishing, a great deal of other types of SQ hot-rolled bar is used in an "as rolled" condition without further processing. 12 The principal end users of free-machining steel are screw machine product makers, who use few other products in the SQ bar and rod category. 13 Unlike free-machining steels, the majority of other types of SQ steels are distributed for a variety of manufacturing applications including cold headers, spring manufacturers, and others. 14 In addition, free- machining steels are less likely to be used in high strength or fatigue critical applications than SQ products. 15 Further new evidence indicates that producers and customers perceive free-machining steels as a distinct product with distinct uses. Bethlehem and Inland note that steel producers market free-machining steels as a separate category (like stainless and tool steel). 16 Finally, the prices for free-machining steel move together and at a premium to less machinable grades. 17 I conclude that this information supports the existence of free machining steel products as a separate like product. The record does not contain comparable evidence indicating that any other types of SQ steel products are similarly distinguishable. I therefore conclude, for 11 ld,. Free machining steel in the 1200 carbon series is purchased almost exclusively by cold finishers for resale to screw machine operations. Producer questionnaire at Exhibit II. However, free machining steel in the 1100 carbon series is used not only in cold finishing applications, but also for forging. Id.. Forgers consume approximately 10 percent of the production of both free-machining and other types of SQ bar and rod. Report Table 6, at 1- SS. 12 Institute Br. at S. · 13 Institute Br. at S. 14· u I · B c.w,.; nshtute r. at J. 15 Producer Questionnaire response at 18. 16 Bethlehem and Inland Br. at 19. 17 ld,. at 6. 42 purposes of this investigation, that the articles. subject to this investigation should be divided into two like products, free machining steel products and all other SQ steel products. B. Semlfinlshed SQ Steel Products and Finished SQ Steel Products are Separate Like Products This investigation also raises the issue whether semifinished products within the scope of the investigation should be included within the same like products as the finished articles produced from them or whether they should be viewed as like products. 18 The articles subject to this investigation include a number of semifinished products, including alloy and carbon ingots, blooms and billets of a circular or rectangular cross-section with a width measuring less than four times the thickness. These products l:iave not been further worked as hot steel other than to primary hot-rolling or roughly shaped by forging. Most U.S. producers ref er to semifinished SQ steel as any product greater than .4 inches in cross section. 19 Some of the factors the Commission has traditionally examined support semifinished SQ steel products as separate like products, while other support their inclusion with the finished products. Approximately 85 percent of the semifinished SQ steel produced in the 18 In analyzing whether a semifinished product should be included in the same like product with the finished products under investigation, the Commission typically examines five factors, including: I) the necessity for, and costs of, further processing; 2) the degree of interchangeability of articles at different stages of production; 3) whether the article at an earlier stage of production is dedicated to use in the finished article; 4) whether there are significant independent uses or markets for the finished and unfinished articles; and 5) whether the article at an earlier stage of production embodies or imparts to the finished article an essential characteristic or function. ~ ~ Fresh and Chilled Atlantic Salmon from Norway. Inv. Nos. 701-TA-302, 731-TA-454. (Final), USITC Pub. 2371 at 8-9 (April 1991) (semifinished product analysis used to determine whether salmon smolt and adult salmon should be included in same like product); 3.5" Microdisks and Media Therefor from Japan. Inv. No. 731-TA-389 (Final), USITC Pub. 2170 at 7, 13-18 (March 1989) (semifinished product analysis used to determine whether complete microdisks and the coated media from which microdisks were made should be included within the same like product). The Commission previously has not addressed the issue of including semifinished ingots, blooms and billets in one like product, or in any like product with hot-rolled bar in a Title VII proceeding. In the 1982 Investigations, the Commission found separate like products of hot-rolled carbon steel bar and hot-rolled alloy steel bar, but did not include semifinished ingots, blooms and billets, and did not discuss the issue. The scope of the petition in the 1982 Investigations for hot-rolled carbon steel bar investigations appears to have been limited to only hot-rolled and not semifinished product. jg,. a-1. 19 Producer questionnaire response at l lA. 43 United States are further hot-rolled into either bar or rod by the same steel manufacturers who produced the semifinished product. 20 The semifinished SQ steel can be used either in the production of SQ bar or SQ rod. The processing costs incurred in transforming a semifinished SQ steel prod·uct into a hot-rolled product are much less than the initial costs of producing the semifinished product. 21 Because of the necessity for further processing, semifinished billets and blooms and the finished hot-rolled bar and rod generally are not interchangeable in use. One of the most essential characteristics of the finished product -- its chemistry, which largely determines resulting mechanical qualities -- is present in both the semifinished and hot-rolled bar and rod. 22 I am persuaded that it is necessary to separate semifinished SQ steel products into different like products from finished like products principally because the semifinished products can be used to produce a variety of products some of which are within the scope of this investigation and others which are outside of its scope. Generally, finished SQ steel products can be in the form of either bar or rod. The distinction between the two is essentially one of diameter, rod being a smaller diameter product. There is, however, an overlap between the two products. Whether a product is viewed as a larger diameter rod or a smaller diameter bar is a largely arbitrary choice by producers and consumers. Because of this overlap it is difficult to separate bar and rod from one another simply on the basis of nomenclature. However, both bars and rod can be coiled or cut-to-le.ngth. Both coiled and cut-to- length bar are used for the same purposes. Cut-to-length rod is also used for the same purposes as coiled and cut-to-length bar. Coiled rod is, however, a ·different· matter. Coiled rod is generally produced at dedicated rod mills which do not produc~ bars and employ different 20 Report, Table SC, at 1-67. 21 Petitioners' Br. at 4-S. 22 ~Report 1-17. 44 i) production processes from bar mills. The coiled product is used almost exclusively for the production of wire products. The producers of bar products (and cut-to-length rod, which is the overlapping product) do not generally produce coiled rod. Coiled rod is a less expensive product. Commerce has excluded the coiled product from the scope of the investigation . .. Coiled rod therf ore has different end uses, different production process. different producers. and different prices. It is therefore proper to exclude coiled rod from the like product, just as it has been excluded from the scope of the investigation by Commerce. This however, complicates the semifinished product issue because semifinished SQ steel can be used for either the production of the various products within the like product or coiled rod. If I were not to separate the semifinished products as a separate like product I would have to include them with the finished product. This would mean that some semifinsihed SQ steel would be included in the like product because it is used to make finsihed products within the like product while other semifinished SQ products would be excluded because they would be used to produce coiled rod. The semifinsihed SQ steel can be used interchangeably to produce either products within or. outside the like product, but the scope of the investigation includes all semifinished products for whatever use. The.refore to treat semishinished products within the like product for finished products would mean that my "like product" did not include all of the products covered by the scope of the investigation. This would not be legally permissible. I decline to do so. Therefore I conclude that it is necessary to separate semifinished products from the finished product. Because I have found there to be two finished products, free machining and all other SQ steels, this requires the division of the semifinished products into similar products. I therefore find that in this investigation there are four separate like products: I. Semif inished free machining steel products 2. All other semifinished SQ steel products 3. Finished free machining steel products 4. All other finished SQ steel products. C. Domestic Industry I find there are four separate industries producing these like products consisting of the 45 domestic producers of each. I note that one producer of finished bars, Raritan River Steel is an importer of semifinished steel subject to this investigation. I note that no party has argued for· the exclusion of this producer as a related party. There is no evidence on the record in this investigation suggesting that exclusion of this producer would be appropriate. I therefore do not exclude it from the domestic industry. CONDITION OF THE INDUSTRIES In assessing whether there is a reasonable indication of material injury to a domestic industry by reason of allegedly dumped imports, I consider all •relevant economic factors which have a bearing on the state of the industry in the United States ... .-23 As traditionally interpreted by the Commission, this includes U.S. apparent consumption, production, shipments, capacity utilization, employment, wages, financial performance, capital investment, and research and development expenses. 24 No single factor is dispositive in evaluating the condition of the industry. In each investigation, I consider the particular nature of the industry under investigation in the •context of the business cycle and conditions of competition that are distinctive to the affected industry;• 25 In this investigation, having. , found four separate domestic industries I now proceed to discuss the condition of each. A. Semlflnlshed Free Machlnlaa Steel Product1 26 Apparent consumption of semi finished f rec machining steel rose from 1989 to 1990 by S.S percent and declined from 1990 to 1991 by 20.8 percent, for an overall period decline of 16.4 percent. A comparison of interim data, January through March, shows an increase in 2319 U.S.C. t 1677(7)(C)(iii). 24Stt 19 U.S.C. I 1677(7)(C)(iii). • 25 19 U.S.C. t 1677(7)(C)(iii). These issues were not raised by any of the parties to this investigation, nor did the Commission receive any information relevant to business cycle considerations. Respondents did at one point, however, refer to •the cyclical nature of the textile industry.• Tr. at 119. 26 The data for this domestic industry is contained in the Report at Table G-13. 46 consumption of 42.S percent. However, given the limited period of time covered by the interim data, I do not place great weight on the interim data. Domestic production followed a trend similar to that of consumption, increasing by 5.3 percent before declining by 23.S percent, for an overall decline of 19.4 perce_nt. Capacity utilization, which never exceeded SS percent during the period of investigation, increased slightly from 1989 to 1990 before dropping precipitously in 1991. Domestic shipments roughly parallelled production, increasing 7.2 percent from 1989 to 1990 before dropping more than 22 percent in 1991. The number of production and related workers and the hours worked followed similar trends. Hourly wages and unit labor costs increased steadily with relatively larger increases in 1991. Productivity fell in each year of the period of investigation. . Net sales increased in each year of the period of investigation, as did the costs of goods sold. The cost of goods sold exceeded net sales in each year of the investigation except 1991, in which it was roughly equal to net sales. In no year did the industry report positive operating income. I conclude that this data reasonably indicate that this industry is currently experiencing material injury. B. All Other Semlflnished SQ Steel Products27 With respect to this category of steel, consumption rose by 17 percent from 1989 to 1990 before declining 10.9 percent in 1991, for an overall increase in consumption over the period of 4.2 percent. The interim data show a 6.1 percent increase in consumption. Domestic production also shows an increase from 1989 to 1990, of some 10.2 percent, substantially below the increase in consumption. Between 1990 a~d 1991, production declined 12.2 percent, which also exceeds the overall decline in consumption for that year. Overall, while. consumption increased 4.2 percent over the period, production declined 3.3 percent. 27 Data for this industry is contained in the Report at Table G-84. 47 Capacity utilization increased by 4.3 percentage points from 1989 to 1990 before declining 8 percentage points in 1991. Domestic shipments increased by 17.3 percent from 1989 to 1990, roughly equal to the increase in consumption, but declined by 13.2 percent, a larger amount than the decline in consumption, in 1991. The number of production and related workers and hours worked increased in 1990 and fell back in 1991 to a level slightly below that of 1989. Hourly wages were relatively constant, declining slightly in 1990 and increasing slightly in 1991. Unit labor costs, however, increased steadily while productivity fell consistently. Financial data was not available for this industry. The next largest aggregation of data for which reliable financial data is available is for all semifinished SQ steel.28 Net sales for this aggregation of products increased 19.9 percent from 1989 to 1990 before declining 23.1 percent in 1991, for an overall decline of 7.8 percent over the period. Cost of cost sold increased absolutely from 1989 to 1990 but declined slightly in 1991. However, as a percentage of net sales, cost of goods sold increased in each year of the investigation and exceeded net sales in both 1990 and 1991. Operating losses of increasing size were recorded in each year of the investigation. I conclude that this data provide a reasonable indication that this industry is currently experiencing material injury. C. Finished Free Machining Steel Products 29 Consumption of these products increased by 5.9 percent from 1989 to 1990 before dropping precipitously, by 19.8 percent, in 1991, for an overall decline of 15.1 percent for the period. The interim data show a substantial rebounding of consumption, by 26.4 percent. The production trends follow the same pattern as consu_mption. However, the 1990 increase in production was less than the increase in consumption, while the 1991 decrease in 28 Report at Table G-14. 29 Data for this industry is contained in the Report at Table G-34. 48 production was even larger than the large decline in consumption. Capacity utilization remained at relatively low levels throughout the period of investigation, increasing 3.9 percentage points in 1990 and declining 13.6 percentage points in 1991. Domestic shipments followed the same pattern as consumption and production increasing 6.1 percent in 1990 and declining 24 percent in 1991. Both the number of production and related workers and hours worked declined steadily over the period. Hourly wages increased steadily. Unit labor costs declined slightly in 1990 before increasing significantly in 1991. Productivity improved in 1990 before declining slightly in 1991. Net sales increased slightly in 1990, by l.l percent, before falling dramatically, by 22.l percent, in 1991. The ratio of costs of goods sold to net sales increased steadily throughout the period. Operating profits and the ratio of operating profits to net sales declined steadily, turning into losses in 1991. I conclude that this data provide a reasonable indication that this industry is currently experiencing material injury. D. All Other Finished SQ Steel Products30 Consumption of these products increased by 3.5 percent from 1989 to 1990 and then declined by 8.4 percent from 1990 to 1991, for a period decline of 5.2 percent. Interim data show an increase in consumption of 8.8 percent. Production of these products increased by 8.9 percent in 1990. Production declined in 1991 by 11.2 percent. Overall, production declined 3.3 percent. ~pacity utilization increased by 2.1 percentage points in 1990 and declined by 8.5 percentage points in 1991. Shipments increased by 6.3 percent in 1990 before declining by 8.4 percent in 1991. The number of production and related workers was relatively stable over the period. Hours worked increased by 2.1 percent in 1990 and declined by 3.1 percent in 1991. Hourly 30 Data for this industry arc contained in the Report at Table G-93. 49 wages increased slightly over the period. Unit labor costs declined significantly in 1990 before increasing significantly in 1991. Productivity improved slightly in 1990 and declined more significantly in 1991. Net sales remained relatively flat between 1989 and 1990 before declining by a significant 9.2 percent in 1991. The ratio of cost of goods sold to net sales increased steadily and significantly in each year of the investigation. The industry recorded operating profits in each year of the investigation, but the ratio of operating profits to net sales declined in each year of the investigation from a relatively good 9.8 percent in 1989 to a relatively poor 3.9 percent in 1991. I conclude that, while the data show this industry to be operating slightly better that the other three related industries, there is a reasonable indication that it too is currently experiencing material injury. CAUSATION In determining whether there is a reasonable indication that the domestic industry is materially injured by reason of the imports under investigation, the statute directs the Commission to consider: (I) the volume of imports of the merchandise which is the subject of the investigation, (II) the effect of imports of that merchandise on prices in the United States for like products, and (III) the impact of imports of such merchandise on domestic producers of like products, but only in the context of production operations within the United States. 31 In making this determination, the Commission may consider •such other economic factors as are relevant to the determination ... : 32 Although I may consider information that indicates that injury to the industry is caused by factors other than the LTFV imports, I do not weigh 31 J9 U.S.C. § l 677(7)(B)(i). 32 19 U.S.C. § 1677(7)(B)(ii). so causes. 33 I emphasize that I need not determine that imports are the principal or a substantial cause of material injury. Rather, I am required to determine whether imports are a cause of, that is, contribute to. material injury. 34 I will discuss each of the four industries I have found · ·• to be experiencing material injury in turn. A; Semiflnished Free Machining Steel Products 35 Imports of these products declined signficantly from 1989 to 1990 and increased signficantly in 1991. Relative to domestic consumption, the import penetration ratios fluctuated down and then returned to its 1989 level in 1991. The market penetration of imports was, however, always quite low. The Commission however, was able to gather little in the way of information regarding the pricing of these Brazilian imports. None of the seven products for which the Commission initially sought pricing were of semifinished free machining steel. Respondents did not provide any alternative products that would have included this category, even though the data clearly show that a not inconsiderable volume of such products were i.n fact sold in the United States. The Commission has historically found that in some products, such as steel, underselling by even relatively small volumes of imports can be a cause of injury to the domestic industry. The state of the Commission's record does not permit me to conclude that the nature of the market and pricing of this product does not conform to this historical pattern. I cannot therefore say that the evidence is clear and convincing that imports are not a cause of material injury to the domestic industry or that evidence showing that they are such a cause would not be developed in a final if pricing information specific to these 33&..&.. Citrosuco Paulista S.A. v. United States. 704 F. Supp. 1075, 1101 (Ct. Int'l Trade 1988). ~ w S. Rep. No. 249, 96th Cong., 1st Sess. 57 (1979); H.R. Rep. No. 317, 96th Cong., 1st Sess. 46-47 (1979). 34 ~ S. Rep. No. 249, 96th Cong., 1st Sess. 74-75 (1979). ~ '"-L. Iwatsu Electric Co. y. United States. 758 F. Supp. 1506 (CIT 1991). 35 The data for this domestic industry is contained in the Report at Table G-13. SI products were provided. I cannot malce a negative determination as to these products therefore. I further note that in order to make a negative finding, I would also have to find that the imports do not threaten the industry. Both volume and pricing of the imports are relevant to that finding as is other information about the foreign industry, about which the Commissio.n does not have information in a form relevant to this product category. I must therefore make an affirmative finding. B. All Other Semlflolsbed SQ Steel Products 36 Imports of these products decreased signficantly from 1989 to 1990 but increased above 1989 levels in 1991. Import market penetration followed the same trend. While relatively small, these percentages can be significant in a product such as steel. Again, I am faced with a record that contains a limited amount of information relevant to the pricing of this product. Two of the products for which the Commission gathered pricing data fall into this product category. The data show a mixed pattern of over and underselling. However, the data are very limited. The pricing data cover a relatively small percentage of the imports which entered the United States during each year of the investigation. Respondents did not provide the Commission with alternative products which would allow pricing information to have been gathered covering a significant amount of the imports. I am again forced to conclude that the record does not provide clear and convincing evidence that imports are not a cause of material injury or threaten material injury. Further imformation about the foreign industry will also be necessary if this matter returns to the Commission for a final investigation. 36 Data for this industry is contained ill the Report at Table G-84. 52 C. Finished Free Machining Ste'el 'Products37 Imports of these products from Brazil were virtually nonexistent throughout the period . . of the investigation. In no period were more than 1000 tons imported, and, in most years, imports were substantially.less than this a.mount. 38 The market penet~ation of these products was consistently insignificant during th·e period. In view of the insignificant volume of · imports, the lack of pricing data is reasonable. This volume, even given the uncertainties about the pricing of products in this market, appears too small to be a cause of present injury. While the Commission's information about the foreign industry is no more complete for ' this industry than for any of the others, I do not feel that this precludes a negative finding in this particular case. The volume of imports is insignificant and· not increasing. There is no indication that underselling of these imports will have any effect on the domestic industry. Even if some product shifting were possible, I note that the customers of the semifinished free machining steel, which would be the most likely to be shifted to this product, are not likely to be the customers for the finished product. To do so would effectively idle their expensive finishing facilities. Further, the purchasers of finished free machining steel have extensive qualification procedures and are not likely to switch significant volumes of purchases to untried Brazilian producers within any time frame which could be deemed imminent. I · therefore make a negative determination with respect to this product. D. All Other Finished SQ Steel Products39 . . Imports of these products from Brazil rose steadily throughout the period of . . investigation. Market penetration likewise rose throughout the period. While small, these 37 Data for this industry is contained in the Report at Table G-34. 38 The issue has been raised whether the imports subject to this investigation should be cumulated with the imports subject to the lead and bismuth investigation. It is not clear to me that it is proper to cumulate the imports subject to two separate investigations when those imports have been specifically defined to exclude the imports subject to the other. In any event however, the imports subject to this investigation clearly meet the criteria of negligibility and thus it would be inappropriate to cumulate them with other imports. 39 Data for this industry are contained in the Report at Table G-93. S3 volumes and these market penetration ratios are considerably larger than those for the finished free machining products. Four of the products for which the Commission sought pricing data fall into this category of finished non free machining products. Unfortunately, the volume of imports covered by these products was insignificant and respondents did not propose alternatives that would allow pricing information to have been developed on a significant percentage of the imports. I cannot conclude that further information would not establish price underselling. The record also does not contain sufficient information for me to conclude that these volumes arc not having a price depressive or suppressive effect. Further i11formation regarding the foreign industry relevant to these products is not available. I must therefore make an affirmative finding as to this product. DISSENTING VIEWS OF COMMISSIONERS BRUHSDALB AND CRAWFORD certain Special Quality an4 Alloy Bot-rolled Steel Bars and Rods and semifinished Products Thereof from Brazil Inv. No. 731-TA-527 (Preliminary) Based on the record in this preliminary investigation, we determine that there is no reasonable indication that the two industries in the United States producing semifinished special quality carbon and alloy steels, and hot-rolled special quality carbon and alloy bar (coiled and cut-length) and cut-length rods are materially injured by reason of imports of .certain special quality carbon and alloy hot-rolled steel bar and rod and semif inished products thereof from Brazil that are allegedly sold at less than fair value in the United States. THE LEGAL STANDARD FOR PRELIMINARY DETERMINATION our approach to preliminary determinations is derived from the decision in American Lamb v. United States. 1 The court's language in that decision specifies that a negative determination is appropriate only when "(1) the record as a whole contains clear and convincing evidence that there is no material injury or threat of material injury; and (2) no likelihood exists that contrary evidence will arise in a final investigation." 2 1 785 F.2d 994 (Fed. Cir. 1986). 2 l.d...., at 1001-04. "Clear and convincing" evidence supporting a negative determination must be "substantial,"· and more than a preponderance of the evidence. Since the Commission is permitted to weigh the evidence in the record, however, a negative preliminary determination may be issued if Jl.9DUl evidence 55 This does not mean, of course, that the absence of some information normally considered in a final investigation would require the Commission to find in the affirmative in a preliminary investigation. Clearly, given the short time period allowed in a preliminary investigation, the burden of requiring that all information be collected to find in the negative would nearly preclude such a finding. Rather, we consider the relation of any missing information to the likely disposition of a final investigation. In cases where there is a question as to what the evidence would show in a final investigation, we give ali benefit of doubt, as instructed by the statute, to Petitioners. LIKE PRODUCT AND DOMESTIC INDUSTRY We concur with the majority opinion on the like product and domestic industry discussion. However, we find some merit in the position that free-machining special quality bars and rods are a separate like product. 3 Free-machining steel is "dirty" in that sulphur, phosphorous, and/or lead or bismuth are added to the steel. This permits the free-machining steel to be machined more easily than supports an affirmative determination, and even if some reasonable doubt exists as to whether a negative determination is warranted. See, ~. Buildex Inc. v. Kason Industries. Inc., 849 F.2d 1461, 1463 (Fed. Cir. 1988) 3 Several parties argued in this investigation that free-machining steels should be a separate like product, although there appears to be disagreement on the definition and scope of free-machining steels. ·The Cold finished Steel Bar Institute advocates all resulphurized and rephosphurized steel, including lead and bismuth, while the Petitioner would exclude lead and bismuth. Respondents took no strong position on this issue. 56 other types of special quality steels, thus providing distinct properties. 4 Non-free-machining steels are harder and are used primarily in high-strength or fatique-critical applications. 5 More important, end users of special quality steels perceive free- machining steels as a distinct product with distinct uses. Although we find these distinctions to be compelling reasons to warrant separate like products for free-machining special quality carbon and alloy bars and rods and semifinished products and non- free-machining carbon and alloy bars and rods and semifinished products, we agree with the majority in their final assessment and give the benefit of the doubt to the Petitioners by adopting a more aggregate, two separate like-product definition. However, we note that our negative determination would not have been different if we had found four separate like products for the~e special quality steel products. CONDITIONS OP COMPET~TIOH The special quality carbon and alloy steel industries are characterized by a wide range of highly differentiated products. Unlike merchant grade steel, special quality steel is almost always 4 Free-machining steels run a higher risk of surface imperfections and are .not a good as other special quality steels in hot working operations due to surface cracks. Approximately two-thirds of all carb'on and alloy free-machining bars and rods is distributed to cold-finishers compared to only 16 percent of other types of special quality . steels. The principal consumers of free- machining steel are screw machine manufacturers. 5 Unlike free-machining steels, the majority of other types of special quality steels are distributed for a variety of manufacturing applications including cold-headers, spring manufacturers, and others. 57 made to. customer specifications at the melt stage. Although most special quality steel producers can create a product to meet customer specifications, other non-price factors, such as delivery time, reliability, and consistent quality, are significant in determining the degree of competition among suppliers. The demand for special quality carbon and alloy steel products, as intermediate products, depends largely on the level of overall economic activity. During the period of investigation, the special quality steel industries experienced · a cyclical downturn due to the recession in the durable goods sector of the economy. The major markets for specialty bar quality steel are transportation equipment, industrial machinery and equipment, and electrical equipment. Substantial quantities of special quality steel are sold directly to manufacturers to be processed into end use products. Significant quantities also are sold.· t9 ·independent forgers, cold finishers, steel distributors, and other customers for further processing. With the exception of general machinery, growth of U.S. shipments in these major industries declined throughout the period of investigation, particularly in the motor vehicles and equipment, aircraft and parts, and engines and turbines industries, which account for a substantial proportion of special quality steel consumption. Both domestic producers and importers have indicated that demand for sp.ecial quality steel products has generally declined since 1989 as a result of the recession and the declining U.S. market share of the major domestic auto producers. 58 u.s. apparent consumption of all special quality carbon and alloy steel bars and rods increased 4.0 percent between 1989 and 1990, then declined by 10.8 percent between 1990 and 1991, for an overall decline of 7.2 percent during the period of investigation. January-to-March 1992 interim data indicate that these steel products have rebounded, increasing by 11.9 percent over the same period in 1991, as a result of the turnaround in growth for primary end users. 6 The consumption of semifinished special quality steel is. largely driven by the demand for hot-rolled special quality bar and rod and to a lesser extent by the forging industry. Demand for these downstream finished hot-rolled special quality products comes from parts suppliers or original equipment manufacturers of components for incorporation in such end products as automobiles and appliances, the production of which declined between 1990 and 1991. U.S. apparent consumption of semifinished special quality carbon and alloy steel products increased 15.0 percent between 1989 and 1990 but declined by 12.6 percent between 1990 and 1991, for an overall increase of only O. 5 percent during the period of investigation. January-to-March 1992 interim data indicate that apparent consumption increased 10.6 percent over the same period in 1991. 7 6 7 Of significant note is the entry of minimills into the Staff report at Table G-35. Staff report at Table G-14. 59 production of special quality steel bars and rods. Minimills traditionally have been scrap-based, EAF steelmakers with up to 100,000 tons of raw steel-making capacity. Products were usually ~ restricted to concrete reinforcing bars, merchant bars, and in some instances light structural shapes. These mills generally served end use markets within a 200 to JOO mile radius of the mill. 8 The definition of minimills has evolved over time as both minimills and traditional pr9ducers have undergone basic changes. The definition of minimills no longer distinguishes it from integrated mills according to product line, capacity or .market area. Increases in average production capacity, and expansion of the geographic marketing area of minimills, along with their ownership of more than one production facility and their entrance into more technologically demanding products such as structurals and flat-rolled products, wire rod and, most important to this investigation, special quality steels, all have expanded competition between minimills and traditional producers. 9 Increasingly significant competition from the more cost-competitive minimills is a significant development in these special quality steel industries. CUMULATION Bethlehem and Inland Steel, petitioners in the Lead and Bismuth investigations, argued that the Commission is required to 8 Staff report at I-29. 9 Staff Report at 1-29. 60 cumulate hot-rolled lead and bismuth bar and rod imports with the subject imports in this investigation because the Commission has found a similar like product of special quality carbon and alloy hot-rolled bar and rod in both investigations. 10 We must determine whether it is proper to cumulate imports of lead and bismuth bar and rod, which are excluded from the scope of this investigation, with imports of other special quality bar and rod, which are included in the scope of this investigation, for the purpose of determining whether the domestic industry that produces all special quality bar and rod is materially injured by reason of the allegedly dumped imports. Semif inished products were not part of the previous investigation and therefore cumulation is not an issue in that case. The Commission must assess the volume and effect of imports from two or more countries of like products subject to investigation if such imports compete with each other and with the domestic like product. There is an exception in any case where the commission determines that the imports are negligible and have no discernible impact on the domestic industry. In deciding if imports are ne9li9ible, we are instructed to consider (1) the volume and market share of imports (2) whether sales have been isolated or sporadic, and (3) whether a small quantity of imports can result in price suppression or depression because of the price sensitivity of the product. In this case, imports of special quality bar and rod from 10 19 U.S.C. § 1677(7)(iv)(I). 61 Brazil accounted for 0.9 percent of the domestic market i~ terms of value in 1991. 11 At no time during the period of investigation did imports of this product account for over 1 percent of the market in terms of quantity or value. 12 In addition, during the interim period the market share of Brazilian imports declined. We do not believe that the market for special quality bar and rod is so price sensitive that even a small quantity of imports can result in price suppression or depression. This is a competitive multi-product industry, with different ~ypes of domestic producers, and a relatively large number of fairly traded imports. There is significant excess capacity in this industry that has remained throughout the period of investigation. Therefore, if Brazilian imports had not been not sold in the U.S. market, it is likely that another domestic or foreign firm would have readily supplied the steel currently being supplied by Brazil. If output remains the same, price is unlikely to rise. Because the products are not merchant quality commodities, some customers value service, and demand a rigorous supplier qualifica:tion process. 13 In addition, some customers mentioned short delivery lead times (which reduce their _inventory 11 Staff report at G-38, Table G-35 and K-3, Table K-1. If we had looked at free-machining steel as a separate like product, the market share of imports from Brazil in this case would be 0.3 percent. 12 E.g. Torrington, Slip Op. at 18 citing Coated Groundwood Paper from Austria. Belgium. Finland. France. Germany. Italy. the Netherlands. Sweden. and the United Kingdom, Inv. Nos. 731-TA-486-494 (Preliminary) ("Groundwood Paper"), USITC Pub. 2359 at 28, 30-36 (February 1991). 13 Staff report at I-121. 62 costs) and proximity to the plant as reasons for preferring to buy from domestic producers. 14 Those customers would not be particularly sensitive to price differentials between domestic and foreign firms. For all these reasons, this is not the type of industry where imports accounting for less than 1 percent of the market could have a significant depressing or suppressing effect on pr~ces. Therefore, we do not choose to cumulate imports in this case with imports in the previous investigations. 15 REASONABLE INDICATION OP MATERIAL INJURY BY REASON OP ALLEGEDLY DUMPED IMPORTS To make an affirmative determination, the statute requires the Commission to find a reasonable indication that material injury to the domestic industry is by reason of the allegedly dumped imports. In assessing the effect of dumped imports, we compare the current condition of the domestic industry to that which would have existed had imports not been dumped. Then, taking into account the condition of .the industry, we determine whether the resulting change of circumstances constitutes material injury. In determining whether material injury is by reason of allegedly dumped imports, we must consider, among other factors, (1) the volume of the imports subject to the investigation, (2) the 14 Staff report at I-118-121. 15 Ye note that although the cumulation issue usually involves two or more countries rather than two or more products from the same country, the statute specifically refers to imports in a particular case and not imports from a particular country in deciding negligibility. · 63 effect of those imports on prices in the United States for like products, and (3) the impact of those imports on domestic producers of 1 ike products. 16 Volume of Imports Imports of semif inished special quality bar and rod from Brazil accounted for 3.5 percent of the domestic market in terms of value in 1991. This was the highest market share attained by Brazilian producers during the period of investigation. In the interim period Brazilian market share declined to 2. 9 percent. 17 Domestic producers held 89.9 percent of the market in 1991, and a high of 91.7 percent in 1990. As we discussed above, imports of special quality bar and rod from Brazil accounted for 0.9 percent of the market in 1991. The market share of domestic special quality bar and rod was 90.4 percent in 1991, after reaching a high of 91.4 percent in 1990. 18 Effect of Allegedly Dumped Imports on Domestic Prices To analyze the effect of this volume of imports on 16 See 19 U.S.C. 1677(7)(B). 17 If we separated free machining and non- free machining semi finished steel, the 1991 Brazilian market share would be less than 2 percent and less than 5 percent, respectively, while the domestic market share would be about 90 percent in both cases. See Report at G-16, G-17, and G-87, Tables G-13, G-14, and G-84. 18 If we separated free-machining and non-free-machining special quality bar and rod, the 1991 Brazilian market share would be about 0 and about 1 percent respectively and the domestic market share would be about 80 percent and about 90 percent, respectively. See Staff report at G-37, G-38, and G-96, Tables G- 34 G-35, ana G-93. 64 domestic prices of the like product and on the domestic industry, we consider a number of factors about the industry and the nature of the products, such as substitutability between the subject imports and the domestic like product. In the section on cumulation we discussed the low volume of imports of special quality bar and rod from Brazil and the reasons why those imports are unlikely to suppress or depress prices for the domestic like product. Rather than explicitly discussing the substitutability, we give. Petitioners all benefit of the doubt for the purposes of this preliminary determination and find, for the reasons outlined in the cumulation section, that even if there had been no sales of special quality bar and rod at the fairly traded price, the volume of sales and the price of the domestic like product would not have been significantly higher. Even if domestic producers had captured the entire 0.9 percent of the market held by Brazil, their volume of sales would not be significantly different. 19 In the case of semifinished special quality products, there are various additional factors that make it unlikely that imports could have had a significant effect on domestic sales and prices. First of all, over 80 percent of the domestic semifinished product is further processed by the same steel manufacturer who produced the semifinished product. 20 Unless ~he price of imported 19 The same would apply to free-machining, where there were almost no imports from Brazil, and to non free-machining, where imports accounted for about 1 percent of the market. 20 Staff report at I-67, Table SC. 65 ~teel was so low that steel producers shut down their facilities and simply bought Brazilian steel for further processing, the dumping would have had no effect on production of the semi- finished product. Pricing for the purpose of intracompany transfers is not the same as pricing for the market and therefore the effect of imports would appear to be much less important. Therefore, over so percent of domestic shipments were likely to be unaffected by Brazilian imports. Of the semifinished steel sold on the market, it is unlikely that the small· volume of imports from Brazil had a significant effect on domestic prices. This is a competitive market with substantial excess capacity. In fact, capacity utilization declined to a period low of 60. 5 percent in 1991. 21 Given the industry's claims that it important to achieve higher rates of capacity utilization, it is likely that, even if Brazil sold no semifinished products, absent the dumping, other domestic producers or foreign producers of fairly traded imports would have expanded output. Producers cannot control price in a market as competitive as the market for special quality semifinished steel. Thus, while it is likely that domestic producers would gain additional volume, absent the dumping, given their already large market share the percentage increase in their output would be extremely small. 22 . 21 Staff report at Table G-14. 22 If semifinished steel was separated into free-machining and non free- machining, the same general analysis would apply. The case would be even stronger in the case of free-machining semifinished steel. 66 Impact on the Domestic Industry The statute directs the Commission to examine the impact of the subject imports on the domestic industry. The statute requires that we consider this impact in ~ight of certain relevant economic factors "within the context of the business cycle and conditions of competition that are distinctive to the affected industry. " 23 We concur with the majority on the description of conditions in the domestic special quality carbon and alloy steel bars and rods and semifinished products industries. 24 U. s. apparent consumption of all special quality carbon and alloy steel bar, including cut-length rods declined by over 322 thousand short tons during the period of investigation. During this period, imports from Brazil increased by only 13.9 thousand short tons. 25 Domestic production of finished special quality bar and rod declined by 233.2 thousand short tons. 26 As discussed above, giving the benefit of the doubt to Petitioners, even if all imports of special quality steel bars and rods from Brazil had been produced by domestic producers, U.S. production would not.have been materially different. We note that U.S. apparent consumption for all special quality carbon and alloy steel bars and rods increased 23 24 25 26 19 U.S.C. § 1677 (7)(C)(iii) cite majority opinion at __ . Staff report at Table G-35. Staff report at Table G-35. 67 by 11.9 percent between interim 1991 and interim 1992. 27 Domestic production followed this upward trend increasing by 20.4 percent over the same P.eriod in 1991. 28 we are not persuaded that the industries• decline in financial performance is related to the allegedly dumped imports. Domestic market share for special quality bars and rods increased from 89. 8 percent in 1989 to 91. 4 percent in 1990,. and then decreased to 90.4 percent in 1991. 29 While market share increased, domestic profitability declined. The value of these domestic shipments also did not follow the pattern exhibited by domestic profitability. Shipments increased by 1.9 percent between 1989 and 1990 before declining by 12.9 percent between 1990 and 1991. 30 Semifinished special quality steel products also followed a similar dfsparate path for profitability and domestic shipments. Domestic market share increased from .91.0 percent in 1989 to 91.7 percent in 1990 and then declined to 89.9 percent in 1991. 31 The value of domestic shipments increased 7.6 percent between 1989 and 1990 before declining by 12. 5 percent between 1990 and 1991. 32 However, operating losses continued to increase throughout the period of investigation despite increased market share in 1990 and 27 Staff report at Table G-35. 28 Staff report at Table G-35. 29 Staff report at Table G-14. 30 Staff report at Table G-14. 31 Staff report at Table G-14. 32 Staff report at Table G-14. 68 increased domestic shipments. We note that domestic average capacity exceeded u. s. apparent consumption during the entire perlod of investigation. That is, capacity exceeded consumption by 2.7 million short tons (47.7 percent) in 1989, 2.1 million short tons (32.6 percent) in 1990, and 2.8 million short tons (48.5 percent) in 1991. 33 We find that this.significant excess capacity has had a materially negative impact on the domestic industry. Again, giving the benefit of the doubt to Petitioners, even if all imports of special quality bars an¢i rods from Brazil had been produced domestically, the industry still would have experienced significant excess capacity during the period of investigation. We further note that instead of capacity declining during the period of investigation, as would be e.xpected from industries with large amounts of excess capacity in periods of declining demand, average capacity increased by 4.6 percent in the special quality steel bars and rods industry and by 1.0 percent in the semifinished steel industry, thus adding to the capacity problem. 34 In assessing the impact of this excess capacity on these two industries, we find that special quality steel producers operating at higher rates of capacity utilization tend to be 1 more profitable. Minimills producing special quality steels achieved capacity utilization rates of greater than 89 percent throughout the period of investigation, while traditional mills achieved their 33 34 Staff report at Table G-14. Staff report at Tables G-35 and G-14 69 highest capacity utilization rate of 59.l percent in 1990. 35 As a result; minimills had lower costs as a percentage of net sales and showed healthy operating incomes during the period of investigation in .both absolute terms and as a percent of net sales. In contrast, traditional mills showed significantly declining operating income resul1:ing in an operating loss in. 1991. 36 We note that, in 1991, traditional mills accounted for close to 65 percent of the indu$.tl;:'ies' capacity and only 46 percent of its production. 37 We furthe~ note that the sales volume of minimills expanded during the period of investigation, while the sales volume of traditional produc.ers declined. 38 ~T 01' llATBRIAL IlfJURY BY RBASOH OP THE ALLBGBDLY LBSS 'l'llAll l'AIR VALOB IMPORTS l'ROM BRAZIL The domestic industries producing special quality semifinished steel and bar and rod are not threatened with ~aterial injury by reason of allegedly dumped imports from Brazil. We have exami~ed all the relevant statutory factors, keeping in mind that this determination must be "made on the basis of evidence that the threat of material injury is real and that actual injury is imminent. such a determination may not be made on the basis of S.5 Staff report at Table H-1 and H-2. 36 Staff report at Table H-2. 37 Staff report at Table H-2. S8 Staff report at Tables H-1 and H-2. 70 mere conjecture or supposition. " 39 Brazilian capacity did not increase throughout the period ··of investigation and is projected to· ·decline in 1992 for both 'products. While capacity utilization declined throughout this period, it is projected to increase in the future. In addition, there was excess capacity throughout this period, and no indication that increased excess capacity will lead to increased imports from Brazil. There has been no substantial increase in market penetration of imports from Brazil. In the case of bar and rod, Brazilian imports never accounted for over 1 percent of the market and they declined in the interim period. 40 In the case of semifinished products, Brazilian imports increased from 2.9 percent in 1989 to 3.5 percent in 1991 (3.0 percent to 3.7 percent in terms of quantity), but declined to 2.9 percent in the interim period. 41 Finally, the European Community imposed dumping ~uties on Brazilian imports of semifinished alloy steel, in March 1992. These duties range from 1.7 percent to 15 percent. While these duties,may lead to some decrease in EC demand for Brazilian steel, it would be speculative to assume they will cause Brazilian producers to sell more steel in the U.S. market. Rather, shifts in sources of supply might occur, so that the Brazilian firm with the lower duty rate supplies relatively more steel to the EC. In 39 40 41 19 U.S.C. §1677(7)(F)(ii) Staff report at Table G-35. Staff report at Table G-35. 71 addition, Brazil only sells about 25 percent of its semifinished alloy steel in the U.S. market. 42 Given· its excess capacity throughout this investigation, it is difficult to believe that Brazil is not already selling as much steel as it can in the U.S. market. COllCLUSZOll Based on the record in this investigation, we find that the special quality carbon and alloy steel bars and rods industry is not materially injured by reason of the de minimis level of subject imports from Brazil. We further find that the semifinished special quality carbon and alloy steel products industry is not materially injured by reason of the allegedly less than fair value imports from Brazil. 42 Staff report at Table G-31. I-1 INFORMATION OBTAINED IN THE INVESTIGATION I-3 INTRODUCTION On June 9, 1992, a petition was filed with the U.S. International Trade Commission and the U.S. Department of Commerce by Republic Engineered Steels, Inc., Massillon, OH, and The Timken Company, Canton, OH. The petition alleges that imports of certain special quality carbon and alloy semifinished and hot- rolled steel products 1 from Brazil, covered by subheadings/statistical reporting numbers 7207.11.00, 7207.12.0010, 7207.19.0030, 7207.20.0025, 7207.20.0075, 7214.30.00, 7214.40.00, 7214.50.00, 7214.60.00, 7224.10.0075, 7224.90.0045, 7224.90.0065, and 7228.30.80 of the Harmonized Tariff Schedule of the United States (HTS), are being sold in the United States at less than fair value (LTFV), and that an industry in the United States is materially injured and threatened with material injury by reason of such imports. Accordingly, effective June 9, 1992,.the Commission instituted preliminary antidumping investigation No. 731-TA-572 under the applicable provisions of the Tariff Act of 1930 to determine whether there is a reasonable indication that an industry in the United States is materially injured, or is threatened with material injury, or the establishment of an industry in the United States is materially retarded by reason of imports of such merchandise into the United States. Notice of the institution of the Commission's preliminary investigation, and of the public conference to be held in connection therewith, was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the Federal Register on June 17, 1992 (57 F.R. 27064). 2 The conference was held in Washington, DC, on June 30, 1992. 3 The Commission voted on this investigation on July 21, 1992, and transmitted its determination to Commerce on July 24, 1992. 1 As defined by the Department of Commerce, the imports subject to investigation are certain hot-finished carbon and alloy (other than stainless, high speed, silica-manganese, and tool steel) steel bars and.rods, which have a uniform solid cross-section along their whole length and are in the shape of circles, segments of circles, ovals, rectangles, or other convex polygons. The subject bars and rods are of special bar quality engineered steel that are described in Society of Automotive Engineers (SAE) standards J403, J404, J411, Jl081, Jl249, Jl268, and modifications thereof. Also included are certain alloy ingots (other than stainless steel, high-speed steel, silico-manganese steel, tool steel, and high-nickel alloy steel), and semifinished products of carbon and alloy steel (other than stainless steel, high-speed steel, silico- manganese steel, tool steel, and high-nickel alloy steel), of circular or rectangular (including square) cross-section with a width measuring less than four times thickness, of special bar quality engineered steel. Excluded from the scope of the investigation are imports of semifinished products or hot- rolled bars and rods which contain by weight 0.03 percent or more of lead or 0.05 percent or more of bismuth; nonalloy steel ingots or other primary forms; semifinished or hot-rolled products of merchant quality steels (American Iron and Steel Institute (AISI) grades M 1000 through M 1044); hot-rolled bars and rods in coiled form; forged bars; and reinforcing bars and rods. 2 Copies of the Commission's institution notice and Commerce's initiation notice are presented in app. A. 3 A list of witnesses appearing at the conference is presented in app. B. I-4 Previous and Related Investigations L Certain special quality carbon and alloy steel products have been · included in a number of investigations conducted by the Commission since 1921. A listing of those investigations is presented in table 1. General Steel Products Investigations The 1982 countervailing duty and antidumping investigations resulted in negative preliminary determinations with respect to hot-rolled carbon steel bar; the petitions.with respect to hot-rolled alloy steel bars were withdrawn and the investigations terminated. In 1984 the Commission unanimously determined in a section 201 investigation that imports of carbon and alloy steel bar and wire rod products were not a substantial cause of serious injury, or threat thereof, to those domestic industries. The 1984 investigations of carbon steel wire rod resulted in an affirmative determination in the countervailing duty investigation concerning Spain, and affirmative determinations in the antidumping investigations involving Argentina, Brazil, Spain, and Trinidad and Tobago. 4 Investigations of Special Quality Carbon Steel Products In its recent investigations of certain hot~rolled lead and bismuth carbon steel products, the Commission found a like product of hot-rolled special quality carbon steel bar and rod, and preliminarily determined that there is a reasonable indication that the domestic industry producing such like product is materially injured by reason of imports of the subject hot- rolled lead and bismuth carbon steel products from Brazil, France, Germany, and the United Kingdom. 5 Commerce is expected to make its preliminary countervailing duty determinations in these investigations by September 10, 1992, and its preliminary antidumping determinations by September 21, 1992. THE PRODUCT Description6 The special quality carbon and alloy steel products covered by this investigation are semifinished and hot-rolled products that may have been subjected to direct hardening, carburizing, induction hardening, and/or nitriding; and exhibit creep resistance; and are used in applications 4 In addition, Commerce conducted several countervailing duty investigations of countries that were not signatories to the GATT subsidies code from 1986 to 1988. These investigations resulted in affirmative countervailing duty determinations regarding carbon steel wire rod from Malaysia, New Zealand, Saudi Arabia, and Zimbabwe. 5 Certain Hot-rolled Lead and Bismuth Carbon Steel Products from Brazil. France. Germany. and the United Kingdom, USITC Publication 2512, p. 22. 6 See app. C for a glossary of selected steel industry terminology. Many terms, both in the industry and the tariff, have ambiguous and apparently overlapping definitions, or cannot even be positively delineated. I-5 Table 1 Special quality carbon and alloy steel products: Previous and related investigations since 1921 Item Steel billets and bars ............ . Hot-rolled carbon steel wire rods: Belgium ......................... . France ......................• .... . Luxembourg ...................... . West Germany .................... . Carbon steel bars and shapes: Canada .......................... . Steel bars, reinforcing bars, and shapes: Australia ............... . Carbon steel wire rods and wire ... . Carbon steel wire rods and round wire ............................ . Carbon steel bars and shapes: The United Kingdom .............. . Certain steel products (Hot-rolled carbon steel bar, and hot- rolled alloy steel bar): Belgium, Brazil, France, Italy, Luxembourg, United Kingdom, West Germany .................... . Carbon and certain alloy steel products (Hot-rolled carbon steel bars) ..................... . Carbon steel wire rod: Brazil, Belgium, France, Venez·uela ....................... . Venezuela ....................... . Brazil, Trinidad and Tobago ... : .. Argentina, Mexico, Poland, Spain ......................... . Spain ........................... . Poland .......................... . Argentina, Spain ................ . German Democratic Republic ...... . Poland, Portugal, Venezuela ..... . Stainless and alloy tooi steel .... . (Alloy tool steel only) ......... . Steel Industry Annual Reports ..... . Lead and bismuth carbon steel products: Brazil, France, Germany, United Kingdom .................. . Source: Various Commission reports. Investigation number N.A. AD-27 AD-30 AD-28 AD-29 AD-39 AD-62 TEA-W-100 TEA-W-181 AD-INQ-8, 9 · 701-TA-86-144 (P) TA-201-51 701-TA-148-150 (P) 731-TA-88 (P) 731-TA-88 (F) 731-TA-113-114 (P) 731-TA-113-114 (F) 701-TA-209 (P) 731-TA-157-160 (P) 701-TA-209 (F) 731-TA-159 (F) 731-TA-157, 160 (F) 731-TA-205 (P) 701-TA-243-244 (P) 731-TA-256-258 (P) TA-201-5 TA-201-2 TA-203-3 TA-203-5 TA-201-48 TA-203-16 332-209 and 332-289 701-TA-314-317 (P) 731-TA-552-555 (P) Date of issue 1921 1963 1963 1963 1963 1964 1970 1971 1973 1978 1982 1984 1982 1983 1982 1983 1984 1984 1984 1984 1984 1985 1976 1977 1977 1979 1983 1987 Various 1992 Report No. C-7 TC 93 TC 99 TC 94 TC 95 TC 135 TC 314 TC 418 TC 566 USITC 855 USITC 1221 USITC 1553 USITC 1230 USITC 1338 USITC 1316 USITC 1444 USITC 1476 USITC 1544 USITC 1574 USITC 1598 USITC 1607 USITC 1701 USITC 756 USITC 805 USITC 838 USITC 968 USITC 1377 USITC 1975 USITC 2512 I-6 requiring critical levels of hardness and/or hardenability, strength, toughness, fatigue resistance, high-temperature creep and fracture resistance, wear resistance, machinability, and formability. The subject semifinished and hot-rolled bars and rods are commonly referred to as engineered or special bar quality (SBQ) steels, 7 and the subject imports are defined as follows: Semifinished products.--Products of solid circular or rectangular (including square) cross section, with a width measuring less than four times thickness, which have not been further worked than by being subjected to primary hot-rolling or roughly shaped by forging. These products do not include semifinished steel products which contain by weight 0.03 percent or more of lead or 0.05 percent or more of bismuth; nonalloy steel ingots or other primary forms; or semifinished products of merchant quality steels (AISI grades M 1000 through M 1044). Hot-rolled bars and rods.--Products which have been reduced to their final thickness by heating and rolling the products (bars and rods) at elevated temperature (usually above 2,200° F). These products have a solid cross section along .their length in shapes (and sizes) that include, but are not limited to: circles or segments of circles (from 0.20 to 12 inches in diameter), ovals, rectangles (including squares from 0.20 to 6 inches in width), flats (from 0.25 to 8 inches in width and from 0.23 to. 4 inches in thickness), .or other convex polygons (such as hexagonals and octagonals from 0.20 to 4.06 inches between parallel surfaces). These products do not include semifinished or hot-rolled products which contain by weight 0.03 percent or more of lead.or 0.05 percent or more of bismuth; nonalloy steel ingots or other primary forms; semifinished or hot-rolled products of merchant quality steels (AISI grades M 1000throughM1044); products wound in coils; forged bars; or reinforcing bars and rods. In contrast to merchant quality, special quality steel is typically produced to customer order and characterized by tighter surface and chemical tolerances. It is produced with minimal segregation and porosity, tighter grain size tolerances, and restrictive limits on incidental chemical element content. A tight range for chemical composition is prescribed for carbon, manganese, phosphorus, and sulfur. Standards on surface irregularities, including seams, are stricter than for merchant quality. 8 7 These products are produced from the following grades of steel: AISI carbon series 1000 (excluding grades 1000 through 1044 designated with the prefix M), 1100, 1200, and 1500; AISI alloy series 1300, 4000, 4100, 4300, 4600, 4700, 4800, 5000, 5100, 5200, 6100, 8100, 8600, 8700, 8800, 9200, 9300 and 9400; and PS-grade steels; and include Boron and H-steels in these carbon and alloy grades. 8 See app. D for a presentation of comments on the differences and similarities in the physical/metallurgical characteristics and uses of special quality vs. merchant quality steel products, as well as comparisons of other categories of carbon and alloy steel products, as compiled from responses to the Commission's producer and importer questionnaires. 1-7 Free-Machining Steels Free-machining steels are a subset of the larger category of special quality steels, whereby base grades of steel have been either resulphurized and/or rephosphorized, or have had additions of lead, bismuth, selenium, or tellurium. 9 • 10 All steel, irrespective of grade or 9 Inclusion of a definition and various subheadings for "free-cutting" steel in Chapter 72 of the tariff schedules was proposed by the EC in 1978 (there was no prior provisipn for such steel in the BTN/CCCN). The original EC definition is as follows: Non-alloy steel containing, by weight, one or more of the following elements in the specified proportions: - 0.1% or more but not more than 0.4% of sulphur - more than 0.1% of phosphorus - 0.1% or more but less than 0.5% of lead - more than 0.1% of selenium - more than 0.1% of tellurium - more than 0.1% of bismuth Over time this definition was modified based on comments from the International Standards Organization (ISO), Japan, Sweden, and Switzerland (the U.S. did not comment on the term,- its definition, or inclusion in the HS) and adopted by the CCC in February 1981 (without comment by the U.S.). The adopted definition for "free-cutting" steel was (and is) as follows: Non-alloy steel containing, by weight, one or more of the following elements in the specified proportions: - 0.08% or more of sulphur - 0.1% or more of lead - more than 0.05% of selenium - more than 0.01% of tellurium - more than 0.05% of ~ismuth 10 The record indicates that there are differences of opinion as to the definition of free-machining and/or free-cutting steel, based on the inclusion· or exclusion of certain carbon steel grades. Counsel for the Cold Finished Steel Bar Institute defines "free-machining" steel (or "free-cutting" steel) as material that has a low carbon content (0.15 percent or less), and is resulphurized and rephosphorized (1200 series steel), or has lead or bismuth injected (postconference brief of Thompson & Mitchell, p. 3). ***· For purposes of this investigation, counsel for Inland and Bethlehem has suggested that the Commission adopt the broader meaning of free-machining as a synonym for free-cutting as defined in the tariff headnotes to HTS Chapter 72, with an adjustment for lower levels of lead, as follows (postconference brief of Wiley, Rein & Fielding, p. 16, fn 28): (continued ... ) I-8 content, is machinable to some degree, and the machinability of the base steel is largely dictated by the engineering requirements for the end product. These requirements, which are properties of the base grade of the steel, include the steel's strength, ductility, and fatigue resistance. Leaded and bismuth steels possess a significantly higher level of machinability (over 30 percent in terms of productivity) compared with base grades in the 1100 and 1200 series. Lead and bismuth are insoluble and form inclusions in the steel, attaching themselves as tails to manganese sulfides. These inclusions aid chip formation and improve the lubricity or machinability of the steel. However, these steels pose problems in terms of manufacture and rolling, and their production is subject to environmental and health restrictions. Manufacturing Process Special quality carbon and alloy steel products require more ophisticated manufacturing tools, machinery, equipment, and skills than that required for merchant quality products, since the requirements for chemistry control, rigorous product analysis, surface quality, and critical engineered characteristics are much more restrictive. 11 The manufacturing process leading to the production of certain special quality carbon and alloy steel products is analyzed below and ·consists of three different stages: (1) melting, (2) casting, and (3) hot- rolling. Melt Stage Steel is produced either by the integrated or nonintegrated process (see figure 1). The nonintegrated process produces molten steel by melting scrap in an electric ,arc furnace (EAF). In contrast, the integrated process typically smelts iron ore and coke in a blast furnace to produce molten iron, which is subsequently poured into a steelmaking furnace, generally a basic oxygen furnace (BOF), together with scrap 10 ( ••• continued) Carbon steel containing one or more of the following elements: - 0.08% or more of sulphur - 0.03% or more of lead - more than 0.0SX of selenium - more than O.OlX of tellurium - more than 0.0SX of bismuth ***11 See app. E for a presentation of comments on the differences and similarities in the manufacturing processes of special quality vs. merchant quality steel products, as well as comparisons for other categories of carbon and certain alloy steel products, as compiled from responses to the Commission's producer and importer questionnaires. Figure 1 Simplified steelmaking flowchart K!f o Malltrial lilJProceaa I-9 Molten Iron Crude Steel Scrap-base process Source: Steel Industry Annual Report, USITC 2436, Sept. 1991, p. 2-2. metal. The hot metal is processed into steel when oxygen is blown into the metal bath. Lime is added to serve as a fluxing agent; it combines with impurities to form a floating layer of slag, which is later removed. Alloy steels are produced by additions of alloying agents (including chromium, nickel, and molybdenum) to liquid steel to impart specific properties to finished steel products. Molten steel is poured or tapped from the furnace to a ladle, an open-topped, refractory-lined vessel, typically with an off-center bottom opening, equipped with a nozzle. Meanwhile, the primary steelmaking vessel (EAF or BOF) may be charged with new materials to begin another refining cycle. Whether produced by the integrated or nonintegrated process, it is ~ncreasingly common for molten steel to pass through a ladle metallurgy station, where its chemistry is refined to embody the steel with properties required for specific applications. 12 At the ladle metallurgy, or secondary steelmaking, station the chemical content and temperature are adjusted for optimum casting. Significant progress towards increasing the cleanliness of special quality steels has been achieved in recent years. Important developments include the use of submerged tap holes; eccentric bottom tap holes and reladling to prevent slag carry-over on tapping; argon bubbling to assist inclusion flotation; synthetic reducing slags; vacuum 12 Ladle metallurgy stations differ in their sophistication and ability to refine steel. Steels used to produce most merchant quality products and concrete reinforcing bar are not usually processed in a ladle metallurgy station. I-10 degassing; shrouding of the teeming stream to prevent reoxidation; and corrosion resistant refractories. 13 Carbon vs. alloy steel In this investigation, the term "carbon steel" is steel that does not contain the elements listed below in excess of the quantity, by weight, respectively indicated: 1.65 percent of manganese, or 0.25 percent of phosphorus, or 0. 35 percent of sulphur, or 0.60 percent of silicon, or 0.60 percent of copper, or 0.30 percent of aluminum, or 0.20 percent of chromium, or 0.30 percent of cobalt, or 0.35 percent of lead, or 0.50 percent of nickel, or 0.30 percent of tungsten, or 0.10 percent of any other metallic element. Alloy steel is that which contains any of the elements listed above in excess of its specified quantity. Alloying agents are·· added to the liquid steel to impart specific properties to the finished~product. Both carbon and alloy special quality products are characterized by common manufacturing methods and uses. Both carbon and alloy special quality steels require similarly.high levels of cleanliness, soundness, and surface quality. Both can be heat treated and have equally rigorous internal chemistry requirements. A number of U.S. steel producers manufacture both carbon and alloy special quality semifinished and hot- rolled bars' and rods u·sing the same workers, processes, and equipment. 14 Casting Stage Once molten steel with the correct properties has been produced, it is cast into a form that can enter the rolling process (see figure 2 for a presentation of steel products and processes). In the ingot- based process, the ladle is moved by an overhead crane to a pouring platform where the steel is poured or "teemed" into ingot molds, either through the top of each mold or, in the preferred method for special quality production, through a pipe system that fills each mold from the bottom (bottom casting). As the steel begins to solidify, the mold is stripped from the ingot and the ingot is then transferred to a soaking pit, a specialized heating furnace that equalizes the temperature within the ingot. Following removal from the soaking pit, the ingots are hot- rolled on a primary breakdown mill to bloom or billet sizes and then transferred to a bar or rod mill for hot-rolling. 13 David J. Naylor, "The Future for Engineering Steels," Advanced Materials Technology International, London, Sterling Publications Ltd., 1989, p.- 31 and petition, p. 5. 14 See app. E for comments on manufacturing processes. -Figure 2 St~el products and processes Slab Hot-Rolled Sheet and Strip •.l Tin Mil Producll Welded Pipe Galvanized and other Coated FlatRoled Procb:tl 1-11 Crude Steel Hot Rolled Bars Billet and Bloom Wn Roda Ingot . Tube Rounds Cold Drawn Wire and SeanHl1 Bn Wire Products Pipe K!f Source: Steel Industry Annual Report, USITC 2436, Sept. 1991, pp. 2-3. 1-12 With respect to strand (or "continuous") casting, the ladle is transferred from the ladle metallurgy station to the caster, and the molten steel is poured at a controlled rate into a tundish, which in turn controls the rate of flow into the strand caster. The tundish may have a special design or electromagnetic stirring for the purpose of ensuring homogeneity of the steel. The strand caster is designed to produce blooms or billets in the desired cross-sectional dimensions. 15 For special quality steel, billet casting has generally not been utilized because it did not yield comparable quality to ingot or bloom casting; 16 however, certain mills have been able to successfully cast special quality as billets. 17 Although initial acceptance of continuously cast special quality product was slow, it has rapidly increased over the past 5 years. Some consumers now reportedly prefer continuously cast special quality. 18 Hot-Rolling Stage After being cast, the ingots, blooms, or billets are transferred to a hot-rolling mill where they are reduced in cross-sectional dimension. There are additional losses in weight at each processing stage of the ingot or bloom associated with the production of special quality steel. Blooms and billets are usually channeled through a reheat furnace prior to rolling. This increases the malleability of the steel, reducing energy consumption and wear in the rolling mill. The semifinished steel is successively reduced in size as it passes through several stands. Most modern rolling mills are in-line, although cross-country mills are still in use. Rod is rolled in a similar manner, although there are usually one or more additional stands in the rolling mill (or one or more additional passes made through a cross-country mill) to reduce the rod's finished diameter (most rod mills roll multiple strands). Rod is almost always coiled. Special quality steel products are usually subjected to some form of heat treatment to impart certain valued properties. This treatment consists of some form of annealing, normalizing, or quenching and tempering, or a combination of these processes. Annealing processes remove stresses, alter mechanical properties to "soften" the steel, refine grain structure, and produce a definite microstructure. Normalizing produces a more uniform 15 There are no widely accepted precise definitions for the terms blooms or billets; the principal distinction is one of size--blooms are larger than billets in cross-sectional area. Blooms were defined in the Tariff Schedule of the United States. Annotated as measuring at least 36 square inches in cross-sectional dimension; billets were defined as measuring at least 3 square inches up to 36 square inches. These distinctions were not carried over into the HTS. _ 16 Transcript of the public conference (TR), testimony of Mr .. Matthews, p. 84. 17 USITC staff fieldwork, June 24-25, 1992, and industry executives, USITC staff interview, July 7, 1992. 18 TR, testimony of Mr. Baker, p. 142, ·and USITC staff fieldwork, June 24- 25, 1992. I-13 structure and removes irregularities caused by high or low rolling or forging temperatures. Quenching and tempering harden the steel. 19 Microalloyed steel is a recently developed subset of special quality steel to provide, more economically, strength characteristics in medium- and high-carbon steels that have been traditionally obtained by the use of more expensive alloying element additions (chromium, nickel, and molybdenum), and by heat treatment. 20 Small additions of certain alloys, such as vanadium or niobium (columbium), impart the necessary properties for many applications without subsequent heat treating. U.S. consumers have been slower to. accept microalloyed steel than those in Europe and Japan. 21 Semifinished vs. hot-rolled steel The final result of both conventional ingot teeming and continuous casting is steel in one of three semifinished shapes: ingots, blooms, or billets. · Semifinished steel products may be subjected to primary hot-rolling on a breakdown mill before being considered ready for additional rolling. These products may be inspected and conditioned to minimize surface imperfections before further processing. Semifinished steel products have no other application than to be further processed into finished products. Hot rolling transforms semifinished products into their final, or near final, shape. It is referred to as "hot" rolling. because the material is heated before entering the rolling mill. The material makes repeated passes through pairs of rolls which squeeze the steel incrementally closer to its finished shape. Most special quality steel products undergo no further rolling operations during their manufacture. Hot-rolled special quality bar and rod products are suitable for forging, piercing, heat treating, cold drawing, cold forming, and machining. Cut-lengths vs. coiled After hot-rolled steel is rolled, it can be cut to convenient shipping lengths or coiled. Special quality coiled products up to approximately 2 inches in diameter are produced on a bar or rod mill equipped with reels to coil the final product. Special quality cut-length products are produced on a mill equipped with facilities to produce the cut lengths, such as shears, hot saws, or abrasive saws, as well as notch turnover hot beds to ensure product straightness off the hot-mill. 22 There is virtually no metallurgical difference between cut-length and coiled products, although the maximum diameter of coiled.products is limited. The choice between these two products is based on the purchaser's manufacturing equipment. Coiled products are 19 United States Steel, The Making, Shaping and Treating of Steel, 10th ed., (1985), pp. 954-954. 20 June 10, 1992, letter to Diane Mazur from Willis Martyn of Wiley, Rein & Fielding; and ***·21 TR, testimony of Mr. Matthews, pp. 85-86 and USITC staff fieldwork, June 25, 1992. 22 See app. E for comments on manufacturing processes. I-14 generally not used for hot forging or direct machining operations. 23 Both cut lengths and coiled products are used by cold finishers. 24 Bars vs . rods 25 Bars and rods are solid hot-rolled products produced by rolling heated billets into cut lengths or coils of a smaller predetermined cross-sectional size. Although most bars and rods are rolled from strand-cast billets, some bars, including those subject to the investigation, are hot-rolled from billets which.were processed from ingots or strand-cast blooms. In general practice, bars are rolled on a bar mill and rods are rolled on a rod mill; these two types of hot-rolling mills differ somewhat in their engineering requirements, such as the number of stands and their speed of operation. Chemistry, size tolerance, and end use typically define most differences between bars and rods. With respect to chemistry and form differences, most carbon steel rod is produced in the 1000 and 1500 series, and very little, if any, is produced in the 1100 or 1200 series, which, along with the 1000 and 1500 series are common bar grades. 26 Rods are typically produced in coils of one continuous length, unlike bars, which may be produced either in coils or cut to length. Most of the rod products that are produced in the United States are designated "wire rods," intended for being cold-drawn into wire for the production of wire products; this also means that most rod is of a circular cross-section. 27 Bars may be further hot-worked (e.g., forged), or cold-finished (including cold-drawn) depending upon their end use. Bars are hot-rolled to a number of shapes, including rounds, squares, round-cornered squares, hexagons, square- edge and round-edge flats, flats, and angles. 28 Bar tolerances are tighter and more exacting than those for rod. The specifications written for the two products reflect these differences and are based mainly on the different end uses. Hot-rolled wire rods are generally produced in nominal fractional diameters, and are not comparable to hot- rolled bars in terms of either nominal fractional diameters or accuracy of 23 See app. D for comments on characteristics and uses. 24 Id. 25 See also app. D and the memorandum prepared by Charles Yost of the Commission's Iron and Steel Branch of the Office of Industries, for an in- depth' discussion of the physical and quality distinctions between bar and rod, based on telephone surveys of industry personnel. 26 American Iron and Steel Institute, Steel Products Hanual: Wire and Rods, Carbon Steel, Mar. 1984. See definitions in app. C for a discussion of steel series. 27 According to one estimate made by a steel industry executive, approximately 95 percent of the U.S. rod production is "wire rod," with another 3 to 4 percent designated for cold-heading applications and structural applications requiring large-diameter wires welded at the intersection. 28 American Iron and Steel Institute, Steel Products Hanual: Alloy, Carbon and High Strength Low Alloy Steels: Semifinished for Forging; Hot.Rolled Bars, Cold Finished Bars, Hot Rolled Deformed and Plain Concrete Reinforcing Bars, pp. 91-94. I-15 cross section or surface finish because' of the methods of manufacture and the designation of wire rods to be drawn into wire. 29 With respect to size differences, industry usage is in transition; there is a grey area in which the definitions of bar and rod overlap, and standardized nomenclature or a distinct and clear line between bar and rod is lacking. 30 The overlap can be seen in normal usage where forms that exceed 3/4 inch in diameter are termed "bar," those under 1/2 inch in diameter are usually termed "rod," and those between 1/2 and 3/4 inches may be called "bar" or "rod," depending upon the mill or the customer and the end use. Rod sizes include those hot-.rolled coiled sections with a solid cross-sectional diameter between 5.5 mm (7/32 inch) and 18.5 mm (47/64 inch). 31 Most wire rod production is 5.5 mm (7/32 inches) material. With respect to bar sizes, the HTS limits bar to a minimum of 14 mm in cross-sectional diameter, thereby admitting a grey area of overlap between bars and rods between 14 mm and 19 mm. U.S. steel industry specifications for bar include sizes down to 7.94 mm (5/16 inch). 32 While the HTS definition provides an indication of the minimum size for bars, no provision is made for maximum size. However, the AISI uses the following guidelines for bars: rounds may be up to 10 inches in diameter; squares may be up to 8 inches; hexagons may be up to 4 inches; and flats may be up to 1.5 inches thick and 6 inches wide. 33 Uses Special quality steel is preferable for applications requiring critical and stringent levels of elasticity, strength, toughness, fatigue resistance, high-temperature creep and fracture resistance, corrosion resistance, wear resistance, machinability, and formability. Applications are found throughout the automotive, aerospace, railway, oil, coal and gas extraction, power generation, defense, chemical, agricultural, construction, and general manufacturing industries. Cars, trucks, tractors, .and off-highway vehicles 29 AISI, Steel Products Manual (Wlre and rods), p. 35. 30 Under the predecessor Tariff Schedules of the United States (TSUS), bars and wire rod were separate items. Steel bar was defined as having cross sections in the shape of circles, ovals, triangles, rectangles, _hexagons, or octagons; and imports we~e reported under separate categories based on configuration and whether or not they were cold formed. Wire rod was defined as a coiled hot-rolled product, approximately round in cross section, and not under 0.20 inch nor over 0.74 inch in diameter; imports were reported under separate categories based on carbon content and further processing. With the adoption of the HTS, hot-rolled bars and rods are classified together with a distinction between "hot-rolled bars and rods in irregularly wound coils" and "other bars and rods" (which would include hot-rolled cut- to-length bars and rods). A size dimension continues to be maintained, .however, with a separate reporting category for coiled product less than 14 millimeters (0.74 inch) in diameter. (See app. F for tariff headnotes and nomenclature.) 31 AISI, Steel Products Manual (Wlre and Rods), p. 35·, The HTS limits the upper size of rods to 19 mm (0.74 inches). 32 AISI, Steel Products Hanual (Bars), p. 91. " Ibid, pp. 91-94. I-16 . account for more than half of the engineering steels market. 34 Current applications include crankshafts, connecting rods, suspension forgings, fasteners, bearings, aircraft undercarriage components, springs, high-strength pipeline fittings, gas containers, mining chains, and hand tools. 35 Cold-finishing companies, which include some steelmakers, perform value- added work on hot-rolled bar and rod; cold-finished work includes cold- drawing (improving mechanical properties, such as increasing tensile strength, yield strength, torsional strength, hardness, and wear resistance), straightening, or other surface treatments, such as turning, grinding, and polishing. These companies in turn supply companies whose raw material specifications require tight tolerances and superior surface quality for steel bar products. Questionnaire Responses Through its questionnaires, the Commission sought data regarding the ultimate end-use customers of special quality carbon and alloy steel products, whether U.S.-produced or imported from Brazil. U.S. producers accounting for *** percent of total U.S. production in 1991 of special quality hot-rolled carbon and alloy steel bars and rods and semifinished products provided information on total U.S. shipments of the subject products by end-use customer. The data are present~d in table 2. U.S. importers of the subject product from Brazil reported that they were unable to identify end-use customers in that sales were generally made to service centers, cold- finishers, or forgers (see section of the report entitled "Channels of Distribution"). ~ Imported and Domestic Product Comparison According to testimony by Republic Engineered Steels, Inc., a producer of special quality steel products, its customers view the domestic and Brazilian product as being interchangeable in terms of quality. 36 However, according to domestic suppliers, there may be some differences between the domestic and imported products in the area of customer service. There are significantly longer lead times associated with purchasing from a foreign source, and several references have been made to the Brazilians being "unreliable" suppliers. 37 • 38 According to one domestic purchaser of both domestic and Brazilian special quality steel products, the ingot casting method used by Brazilian producers is more cost effective in making larger cross-sections. This company purchases smaller cross-sections, more economically produced on a continuous caster, from domestic suppliers. 39 34 David J. Naylor, "The Future for Engineering Steels," p. 31 and petition, at p. 5. 35 Robert A. Garvey, President, North Star Steel, "SBQ - A Major Opportunity for US Minimills," Metal Bulletin Monthly, June 1992, p. 31. 36 TR, testimony of Mr. Guilfoyle, pp. 34, 39, and 109. 37 Ibid., p. 108 and USITC staff fieldwork, June 24-25, 1992. 38 However, evidence on the record also indicates that*** 39 Caterpillar, Inc. , postconference brief, p. 3'. 1-17 Table 2 Special· quality carbon and alloy steel products: Shares of shipments of U.S.- produced product, by end uses, 1991 Item CARBON: Cut bars: Non-lead/bismuth free-machining .. Other special ...... . Sub1ect special .. . Coiled oars: Non-lead/bismuth free -machining .. Other special ...... . Certain special .. . Rods: Non-lead/bismuth free-machining .. Other special ...... . Certain special .. . Lead & bismuth ..... . All free-machining .. All special ........ . Bars and rods: Non-lead/bismuth free-machining .. Other special ...... . Certain special .. . Lead & bismuth ..... . All free-machining .. All special ........ . ALLOY: Cut bars: Non-lead/bismuth free-machining .. Other special ...... . Subject special .. . Coiled oars: Non-lead/bismuth free-machining .. Other special ...... . Certain special .. . Rods: Non-lead/bismuth . free-machining .. Other special ...... . Certain special .. . Lead & bismuth ..... . All free-machining .. All special ........ . Bars and rods: Non-lead/bismuth free -machining .. Other special ...... . Certain special .. . Lead & bismuth ..... . All free-machining .. All special ........ . --Continued on next page. Auto- motive 13. 7 22.3 20.4 10.1 45.1 40.3 37.6 30.3 30.6 50.7 45.0 31.5 15.1 21·.8 25.9 17.3 16.0 25.2 (1) 16.1 15.3 (1) 43.3 43.3 ( 1) 29.5 29.5 38.4 38.4 29.8 (1) 19.0 18.3 19.5 6.2 18.3 (In percent) Machinery, Construction industrial Mining, including equipment lumbering, maintenance & tools quarrying .8 4.6 3.7 (1) .1 .1 7.5 5.4 5.5 2.1 4.5 5.3 1.2 4.4 3.9 . 3 .9 3.6 .1 2.5 2.4 . ( 1) 3.6 3.6 2.4 2.4 3.5 .1 2.4 2.3 . 3 .2 2.3 9.6 12.9 12.1 (1) 4.3 3.7 5.0 5.6 5.5 7.0 6.1 5.6 8~3 9.2 9.1 2.0 5.9 8.5 ( 1) 13.2 12.6 (1) 9.4 9.4 (1) 17.6 17.6 16.7 16.7 17.6 (1) 13.1 12.6 2.4 .7 12.4 (1) 1. 5 1. 2 (1) 1.0 .9 (1) .9 .8 (1) (1) .7 .7 .1 .1 (1) 1.0 1.0 .7 .1 .2 (1) .5 .2 Other 75.9 58.7 62.6 89.9 49.4 55.0 49.8 58.6 58.3 40.2 44.5 57.5 75.4 57.6 60.3 80.4 77.3 62.1 99.2 68.2 69.6 (1) 45.7 45.7 ( 1) 49.3 49.3 42.5 42.5 9.1 99.2 65.3 66.7 77 .9 92.5 66.9 I-18 Table 2--Continued Special quality carbon artd alloy steel products:· Shares of shipments of U.S.- produced product, by end uses, 1991 · (In percent) Machinery, .Construction industrial Mining, Auto- including equipment lumbering, Item motive maintenance & tools quarrying Other CARBON AND ALLOY: Cut bars: Non-lead/bismuth free -machining .. 12.2 .7 8.5 .1 78.5 Other special ....... 19.6 3.7 13.0 .9 62.8 Subject special ... 18.5 3.2 12.3 .8 65.2 Coiled bars: Non-lead/bismuth free-machining .. 10.1 (1) (1) (1) 89.9 Other special ....... 44.7 .2 5.6 1.0 48.5 Certain special ... 41.0 .2 5.0 .9 53.0 Rods: Non-lead/bismuth free-machining .. 12.0 .7 7.7 .1 79.6 Other special ....... 23.2 3.2 12.0 .9 60.8 Certain special ... 21.5 2.8 11.3~· • • •• f ... 8 63.6 Lead & bismuth ...... 11.8 (1) 1.1 (1) 87.2 All free-machining .. 11. 9 .4 5 .·3 (1) 82.3 All special ......... 20.8 2.6 10.5 . 7 65.4 Bars and rods: Non-lead/bismuth . free-machining .. 13.7 1.1 7.5 .1 77 .6 Other special ....... 25.l 3.7 10.4 . 7 60.0 Certain special ... 23.7 3.4 10.1 .6 62.2 Lead & bismuth ...... 17.5 . 3 2.0 (1) 80.2 All free-machining .. 15.1 .8 5.4 (1) 78.6 All special ......... 23.3 3.2 9.5 .6 63.4 1 Not applicable or zero. Source: Compiled from data submitted in r~sponse to questionnaires of the U.S. International Trade Commission. Substitute Products The unique characteristics of special quality steel products, including temperature creep and fracture resistance, wear resistance, machinability, and formability, make them especially suited for forging into critical components. According to petitioner, no other products compete in these markets. 40 Information from firms responding to the Commission's questionnaires indicate ·that although there are generally no economically practical substitutes for 40 TR, testimony of Mr. Guilfoyle, p. 42. I-19 the subject special quality steel products, occasionally aluminum, graphite composites, or powdered metal may be used for certain applications. 41 For certain highly-machined uses, lead and bismuth steels may be an acceptable alternative. However, these steels are generally more expensive to produce, and their production is subject to extensive environmental and health restrictions. U.S. Tariff Treatment Imports of special bar quality steel products subject to this investigation, and the column 1-general (most-favored-nation) rates of duty (in percent ad valorem) applicable to imports from Brazil, 42 are provided for in the following HTS subheadings (statistical reporting numbers): 43 Semif inished products of iron or nonalloy steel .... Ingots and semif inished products of other alloy steel .................... . Hot-rolled bars and rods, other·than in irregularly wound coils, of nonalloy steel .................... . Hot-rolled bars and rods, other than in irregularly wound coils, of other alloy steel .............. . HTS sμbbeading 7207.11.00.00 7207.12.00.10 7207.19.00.30 7207. 20 .. 00. 25 7207.20.00.75 7224.10.00.75 7224.90.00.45 7224.90.00.65 7214.30.00.00 7214.40.00.10 7214.40.00.30 7214.40.00.50 7214.50.00.10 7214.50.00.30 7214.50.00.50 7214.60.00.10 7214.60.00.30 7214.60.00.50 7228.30.80.05 7228. 30. 80. 50 41 See questionnaire responses of ***· Rate of duty 4.2 5.1 4.7 6.0 42 No preferential treatment is accorded under the Generalized System of Preferences. 43 See app. F for tariff headnotes and nomenclature. " I-20 Voluntary Restraint Agreements Between October-1,· 1984, ·and March 31, 1992, imports of bar, rod, and semifinished.steel from Brazil, including the products subject to this investigation, were subject to quantitative limitations under the Voluntary Restraint Agreements (VRAs) negotiated with 19 foreign governments and the European Community. 44 The VRA program was, in part, an outgrowth of earlier trade measures during the period 1969-84, although these agreements principally covered flat-rolled products, pipe and tube, and wire rod. The immediate impetus of the VRA program was a determination by the President, on September 18, 1984, that taking "escape clause" action was not in the national economic interest; this decision followed ari investigation conducted by the Commission in ·Which imports of certain steel products were found to be a substantial cause of serious injury, or threat thereof, to certain domestic industries (Inv. No. TA-201-51). 45 The President directed the United States Trade Representative (USTR) to negotiate VRAs to cover a five-year period, October 1, 1984 through September 30, 1989, with countries whose exports to the United States had increased significantly in previous years. Although the structure of the arrangements varied from one country to another, each involved an agreement by the foreign government to limit its exports of the pertinent steel products to the United States. In order to bring the agreements into effect, U.S. producers withdrew pending unfair trade petitions, and the U.S. Government suspended antidumping and countervailing duties on steel products covered by the VRAs. The trade measures were expected to return the share of imports in the U. s·. market to a level of approximately 18.5 percent, excluding semifinished steel (subsequent Administration statements indicated such imports were limited to about 1.7 million tons per year). In this manner, export restraints were to allow the U.S. steel industry to restructure in response to the structural crisis, improve capacity utilization rates, and become competitive with foreign producers. On July 25, 1989, the President announced a Steel Trade Liberalization Program, under which the VRAs were extended for two and one-half years, ~erminating on March 31, 1992. The President directed the USTR to negotiate VRAs at an overall restraint level of 18.4 percent (the 1988 VRA import penetration level). The President authorized up to an additional one percent import penetration annually that would be available to countries that entered into bilateral consensus agreements, designed to provide incentives for countries to eliminate trade-distorting practices and to respond to concerns of steel consumers for adequate supplies of raw materials. 46 44 The restraint limits discussed in this section are more accurately defined as export limits because the countries under agreement controlled their shipments of exports in lieu of U.S. import quotas. 45 Affirmative decisions were rendered in the case of semifinished steel, plates, sheets and strip, wire and wire products, and structural shapes and units. Negative determinations were rendered in the case of wire rod, railway type products, bars, and pipe and tube. 46 -Negotiations for bilateral agreements were conducted in order to restrict trade-distorting practices, particularly subsidies to the steel industry. USTR, press release, Dec. 12, 1989. I-21 On December 12, 1989, the USTR announced that negotiations had been completed with the European Community and 16 countries, including Brazil, that previously had VRAs. As a result of the negotiations, overall restraint levels were raised. Product coverage \inder the VRAs remained essentially unchanged, although the agreements were modified·to include those specialty steel products {e.g., stainless and alloy tool steels) that were previously subject to relief under section 203 of the Trade Act of 1974. The categories for hot-rolled bar, rod, and semifinished products subject to the VRAs were broader than for those products subject to this investigation. Moreover, the VRA categories, where product coverage is specified, are broader than the products described earlier in the HTS or do not cover products subject to the investigation. In all but one case, the category limits had not been binding for several years. Nonetheless, Brazil's restraint limits for and exports of hot-rolled bars, wire rod, and .semifinished steel for the relevant periods are shoWn in the following tabulation, based on export certificate data and final. consultations conducted by Commerce's Office of Agreements Compliance {in metric tons): ·Hot-finished bars. wire rod. Bars Rod Semis 1988 Cl2 months) Exports Adjusted to U.S. ceiling 31,517 50,425 559,023 33,932 54,187 559,023 and semifinished steel: Jan.-Sept. 1989 (9 months) Exports Adjusted to U.S. ceiling 21,045 35,173 444,055 23,044 38,344 476,280 VRA period 1 Oct. 1989-Dec. 1990 (15 months) Exports Adjusted to U.S. ceiling 94,158 73,610 960,965 149,218 104,814 1,010,966 1 Final period data {Jan. 1991-Mar. 1992) not yet available. Based on the above data, the extent to which Brazil filled its VRA subcategory limits on hot-finished bars, wire rod, and semifinished steel is shown in the following tabulation {in percent): Hot-fin!shed bars. wir~ rog 1 and semif!nished steel; VRA period 1 1988 Jan. -Sept. 1989 Oct. 1989-Dec. 1990 Cl2 months) (9 months) ClS months) Bar 92.88 91.33 63.10 Rod 93.06 91. 73 70.23 Semis 100.00 93.23 95.05 1 Final period data {Jan. 1991-~ar. 1992) not yet available. Bilateral Consensus AgreementsjMultilateral Consensus Agreement When the VRAs were extended in 1989, the United States sought to address the causes of unfair trade and eliminate subsidization and overcapacity in the steel industry. The bilateral agreements attempted to include commitments by countries to prohibit export and production subsidies specifically for steel products, to reduce tariffs and nontariff barriers to steel trade, and to incorporate a binding arbitration mechanism; the bilateral consensus agreements were to be multilateralized within the General Agreement on Tariffs 1-22 and Trade (GATT) through incorporation in the Uruguay Round of multilateral GATT negotiations. 47 As envisioned, negotiations on the new Multilateral Steel Agreement (MSA) were to be completed by December 1990. On March 31, 1992, negotiations on the MSA were suspended without agreement, although conside~able progress had been made. Negotiators reportedly have agreed to continue to meet bilaterally and multilaterally, but no specific time schedule has been set. Like Product Considerations During this investigation petitioners have argued that, on the basis of the factors the Commission considers in analyzing like-product issues (physical characteristics and uses, interchangeability among products, channels of distribution, producer and customer perceptions of the articles, commonality of production facilities and employees and, where appropriate, price), there is a single like product and a single industry producing the subject special quality carbon and alloy steel products. Other parties in this investigation, using those same like-product factors, have argued that the Commission should find (a) separate like products of subject semifinished and hot-rolled special quality products, 48 (b) a separate like product of free-machining carbon steels, 49 and (c) a like product of all special quality carbon and alloy steel products (i.e., including lead and bismuth steel products and coiled products). 50 This report presents as much information as is available regarding these alternative like-product industries. In addition, appendix G presents a summary of data on these and other alternative like product industries, including an industry producing merchant quality carbon steel products. THE NATURE AND EXTENT OF ALLEGED SALES AT LESS THAN FAIR VALUE The petitioners have calculated LTFV margins (in percent ad valorem) by comparing (a) the United States price with the foreign market value (FMV), with estimated dumping margins ranging from 2 to 59 percent, (b) Brazilian home market prices with average prices derived from official U.S. import statistics, with estimated dumping margins ranging to 84 percent, and (c) the United States price with the cost of production and constructed value for Brazilian FMV, ·with estimated dumping margins ranging from 23 to 73 percent. 47 USTR, press release, Dec. 12, 1989, and accompanying fact sheet, "Steel Trade Liberalization Program." 48 Postconference brief of Jeffrey W. Carr for Raritan River Steel, p. 2. 49 Postconference brief of Wiley, Rein & Fielding for Bethlehem and Inland, p. 20. 50 Postconference brief of Willkie, Farr & Gallagher for the Villares Group, p. 12. I-23 THE U.S. MARKET This report is structured to provide data and information on three overall like-product industries as follows: I. Subject special.--The petitioners' proposed like product of special quality semifinished and hot-rolled bars and rods of carbon and alloy steel; excluding hot-rolled products in irregularly wound coils, and hot-rolled lead and bismuth carbon and alloy steel products. II. Free-machining.--The category of "free-cutting" steel as defined by the headnote to Chapter 72 of the HTS, 51 including resulfurized alloy steel.products; also includes semifinished products and hot- rolled bars and rods whether or not in irregularly wound coils, and lead and bismuth carbon and alloy steel products. III. All special.··All special quality carbon and alloy steel products, whether or not in irregularly wound coils, and including lead and bismuth carbon and alloy steel products. U.S. Producers The petition in this investigation identified seven firms as producing the subject special quality carbon and alloy steel products. The Commission sent questionnaires to each of the seven producers, as well as approximately *** other firms listed in industry references as possible producers of other special quality carbon and alloy steel products. The Commission received complete responses from *** of the firms. 52 These firms are believed to have accounted for *** percent 9f all U.S. production of the subject special quality carbon and alloy steel products in t991. Table 3 presents the major. producers of special quality carbon and alloy steel products, the locations of their plants, position on the petition, and their share of 1991 total production of special quality carbon and alloy steel products. Firms in support of the petition accounted for *** percent of U.S. production of special quality carbon and alloy steel products in 1991, those opposed accounted for *** percent, those that did not wish to take a position on the petition accounted for *** percent, and those firms that did not provide the information accounted for *** percent. The firms that produce special quality carbon and alloy steel products in the United States are described below. CQmpany Profiles American Steel & fl1re American Steel & Wire purchases billets and then produces special quality hot-rolled carbon and alloy steel products at its facilities in Cuyahoga Heights, OH, and accounted for *** percent of U.S. production of special quality carbon and alloy steel products in 1991. American's 51 See app. F for tariff headnotes . 52 Four firms did not respond to the U.S. producer's questionnaire in this investigation, but useable information was available from the firms' responses to the Commission's questionnaires in the recently completed investigation of hot-rolled lead and bismuth carbon steel products. I-24 Table 3 Special quality carbon and alloy steel products: U.S. producers, location of producing facility, position on petition, and share of production in 1991 Firm Location Position on petition1 Acme Steel ............. Riverdale, IL *** American Steel & Wire .. Cuyahoga Heights, *** OH Atlantic Steel ......... Atlanta, GA. *** Auburn Steel ........... Auburn, NY *** Bethlehem Steel Bar, Rod & Wire Div .. Johnstown, PA S Lackawanna, NY Sparrows Pt., MD Calumet Steel .......... Chicago Hghts., IL *** Chaparral Steel ........ Midlothian, TX *** Charter Steel .......... Saukville, WI *** Copperweld Steel Co .... Warren, OH *** Green River Steel ...... Owensboro, KY *** Inland Steel ~ar ....... E. Chicago, IN S Kentucky Electric ...... Ashland, KY *** Koppel Steel ........... Beaver Falls, PA *** Laclede Steel .......... St. Louis, MO *** MacSteel (Quanex) ...... Jackson, MI *** Ft. Smith; AR North Star Steel ....... St. Paul, MN *** Monroe, MI Wilton, IA Beaumont, TX Nucor .................. Norfolk, NE *** Raritan River Steel .... Perth Amboy, NJ 0 Republic Engineered Steels ............... Canton, OH S Sheffield Steel ........ Sand Springs, OK *** Timken Co .............. Canton, OH S USS/Kobe Steel ......... Lorain, OH *** Total ...........· .. . Share of U.S. production Carbon Alloy Total *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** 100.0 *** *"'-'* *** *** *** *** *** *** *** *** *** *** *** *** *** *** ****** *** *** *** *** 100.0 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** '*** *** *** *** *** *** *** 100.0 1 s-Supports, N-does not wish to take a position, and O-Opposes. 2 Not available. Note.--Totals may not add due to rounding. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. I-25 operations producing hot-rolled lead carbon steel products accounted for *** percent of the firm's total net sales in 1991, with the remainder ·accounted for by carbon and alloy wire products, and ultra-high tensile strength specialty wire. Auburn Steel Auburn Steel produces special quality carbon and alloy hot-rolled steel bars and semifinished products at its facility in Auburn, NY, and accounted for *** percent of U.S. production of such products in 1991. Auburn produces special quality products in its establishment producing rebar, merchant bar, and structurals. Bethlehem Steel, Bar, Rod & Wire Division Bethlehem produced special quality semifinished carbon and alloy steel products at its facility in Johnstown, PA; special quality hot-rolled carbon and alloy steel bar products at its facility in Lackawanna, NY; and special quality rod products at its facility in Sparrows Point, PA. 53 ·Bethlehem's Bar, Rod & Wire Division accounted for *** percent of U.S. production of special quality carbon and alloy steel products in 1991. Bethlehem's operations producing semifinished and special quality carbon and alloy steel products accounted for 100 percent of Bethlehem's Bar, Rod & Wire Div. total net sales in 1991. Calumet Steel Calumet Steel produces special quality carbon and alloy hot-rolled steel bars and semifinished products at its facility in Chicago Heights, IL, and accounted for *** percent of U.S. production of such products in 1991. Calumet's operations producing special quality steel products accounted for ***percent of its establishment's total net sales in 1991,-with the remainder accounted for by rebar, merchant bar, and structurals. Chaparral Steel Chaparral Steel produces special quality carbon and alloy hot-rolled steel bars and semifinished products at its facility in Midlothian, TX, and accounted for *** percent of U.S. production of such products in 1991. Chaparral produces special quality steel products in its establishment producing rebar, merchant bar, and structurals. 53 On Jan. 29, 1992, Bethlehem Steel Corp. announced its decision to exit the bar, rod, and wire industry, offering its Bar, Rod & Wire Div. for sale. Unable to complete a transaction for the entire division2, Bethlehem announced, on May 15, 1992, that it was initiating "an orderly phasing down" of the division, exiting the business "as quickly as possible," and reported that a "schedule for.cessation of various steelmaking and rolling operations will be announced within two weeks." (May 15, 1992, Press Release, Bethlehem Steel Corp.). 1-26 Charter Steel Charter Steel produces special quality carbon and alloy hot-rolled steel rods and semifinished products at its facility in Saukville, WI, and accounted for *** percent of U.S. production of such products in 1991. Charter produces special quality steel products in its establishment producing wire rod and wire. Copperweld Steel Co. Copperweld produces special quality semifinished and hot-rolled carbon and alloy steel products at its facility in Warren, OH, and accounted for *** percent of U.S. production of special quality steel products in 1991. Copperweld's operations producing special quality products accounted for *** percent of its establishment's total net sales in 1991. Green River Steel Green River Steel produces special quality carbon and alloy hot-rolled steel bars and semifinished products at its facility in Owensboro, KY, and accounted for *** percent of U.S. production of such products in 1991. Green River's operations producing special quality products accounted for*** percent of its establishment's total net sales in 1991. Inland Steel. Including Inland Steel Bar Co. Inland produces special quality carbon and alloy semifinished and hot- rolled steel products at its facility in East Chicago, IN, and accounted for *** percent of U.S. production of such special quality products in 1991. lnland's operations producing special quality carbon and alloy steel products accounted for *** percent of its establishment's total net sales in 1991, with the remainder accounted for by flat-rolled products (*** percent) and structurals (***percent). Laclede Steel Laclede Steel produces special quality carbon and alloy hot-rolled steel bars and semifinished products at its facility in St. Louis, MO, and accounted fpr *** percent of U.S. production of such products in 1991. Laclede produces special quality products in its establishment producing wire rod, hot-rolled strip and plate, chain, and pipe, and tube. HacSteel. a Division of Quanex MacSteel, a division of Quanex, produces special quality carbon and alloy hot-rolled steel bars and semifinished products at its facilities in Jackson, Ml, and Ft. Smith, AR, and accounted for *** percent of U.S. production of such products in 1991. MacSteel's operations producing special quality steel products accounted for *** percent of its establishment'~ total net sales in 1991. I-27 North Star Steel North Star Steel produces special quality carbon and alloy hot-rolled steel bars, rods, and semifinished products at its facilities in St. Paul, MN, Monroe, MI, Wilton, IA, and Beaumont, TX, and accounted for*** percent of U.S. production of such products in 1991. North Star's operations producing special quality steel products accounted for *** percent of its establishment's total net sales in 1991, with the remainder accounted for by merchant bar, structurals, wire rod, and rebar. Raritan River Steel Co. Raritan River produces special quality semifinished and hot-rolled carbon and. alloy steel bars and rods at its facility in Perth Amboy, NJ, and accounted for *** percent of U.S. production of special quality carbon and alloy steel products in 1991. Raritan River's operations producing special quality carbon and alloy steel products accounted for *** percent of the firm's total net sales in 1991, with the remainder accounted for by merchant quality carbon steel products. Republic Engineered Steels, Inc. Republic produces special quality semifinished and hot-rolled carbon and alloy steel products at its facility in Canton, Oij, and accounted for *** percent of U.S. production of such special quality steel products in 1991. Republic's operations producing special quality carbon and alloy steel products accounted for *** percent of its establishment's total net sales in 1991, with the remainder accounted for by cold-finished products, stainless steel, and tool steel products. Timken Co. The Timken Co. produces special quality carbon and alloy hot-rolled steel bars, rods, and semifinished products at its facility in Canton, OH, and accounted for ***percent of U.S. production of such products in 1991. Timken's operations producing special quality products accounted for *** percent of its establishment's total net sales in 1991, with the remainder accounted for by wire rod, stainless products, and pipe and tube. USS/Kobe Steel Co. USS/Kobe produces special quality semifinished and hot-rolled carbon and alloy steel bars and rods at its facility in Lorain, OH, and accounted for *** percent of U.S. production of such special quality steel products in 1991. USS/Kobe's operations producing special quality semifinished and hot-rolled carbon and alloy steel products accounted for *** percent of its establishment's total net sales in 1991, with the remainder accounted for by tubular products. Other Special Quality Steel Producers Other U.S. producers of special quality carbon and alloy steel products submitted questionnaire responses covering total establishment operations, and provided limited data on their special quality products operations. The firms are described below. Kent:ucky Electric Stee1.--Kentucky Electric Steel Corp. is a wholly- owned subsidiary of NS Group, Inc., and produces special quality carbon and alloy hot-rolled steel bars and semifinished products at its facility in Ashland KY. It accounted for ***percent of U.S. production of such products in 1991. · Kentucky Electric's operations producing special quality products accounted for *** percent of its establishment's total net sales in 1991, with the remainder accounted for by merchant quality products. Koppel Steel.·-Koppel Steel Corp. is a wholly-owned subsidiary of NS Group, Inc., and was started as a company on October 5, 1990, when it purchased certain assets of Babcock & Wilcox Tubular Products Group. Koppel produces special quality carbon and alloy hot-rolled steel bars, rods, and semifinished products (as cast blooms and billets) at its facility in Beaver Falls, PA, and accounted for ***percent of U.S. production of such products in 1991. Koppel's operations producing special quality products accounted for *** percent of its establishment's total net sales in 1991, with the remainder accounted for by seamless tubular products. 54 Nucor.--Nucor produces special quality carbon and alloy hot-rolled steel··" bars, rods, and semifinished products at its facility in Norfolk, NE, and accounted for *** percent of U.S. production of such products in 1991. Nucor's operations producing special quality products accounted for *** percent of its establishment's total net sales in 1991, with the remainder accounted for by structurals and hot- and cold-rolled sheet and coil. Product Lines Table 4 presents a listing of U.S. producers of special quality carbon and alloy steel products, as well as producers of merchant quality steel products, and the products that those firms produce (or have produced). Table 4 Carbon and alloy steel products: U.S. producers' production capabilities, by types, 1991 * * * * * * * 54 July 6, 1992, telephone interview with*** I-29 Minimills The traditional definition of a minimill distinguishes it from an integrated mill by focusing on the minimill's method of steelmaking, its product mix and geographical sales base, and its different cost structure. 55 For example, minimills have often been described as scrap-based, EAF steelmakers with up to 100,000 tons of raw steelmaking capacity. Their products were usually restricted to concrete reinforcing bars, merchant bars, and in some instances light structural shapes (e.g., small angles and channels), and they served a market located within a 200- to 300-mile radius from the mill. 56 However, the minimill concept has changed considerably since the 1960s, just as the integrated mill concept has also undergone some basic changes; for example, most integrated steelmakers have installed EAFs in at least one facility, and most utilize continuous casting to some degree. The distinction between the two types of mills currently rests on differences in the steelmaking process: one definition terms minimills as those mills that usually bypass the first three steps of steelmaking (iron ore processing, cokemaking, and irorunaking) and use scrap as the primary raw material in electric arc furnaces. In other words, the definition no longer distinguishes the minimill from an integrated mill according to its product line, its capacity, or its market. This evolution has come about because of increases in average production capacity and the geographic marketing area of minimills, their ownership of more than one production facility, and their entrance into more technologically demanding products such as structurals and flat-rolled products, special quality steels, and wire rod. 57 This blurring of the distinction between integrated mills and minimills has come about because of major changes in steelmaking technology, particularly trends toward decreasing the minimum efficient scale of production and the convergence of integrated and nonintegrated production processes. 58 In its majority opinion in the recent investigations concerning hot- rolled lead and bismuth carbon steel products, the Commission expressed interest in reviewing information regarding the operation of U.S. mini- mills. 51 Appendix H presents summary data for traditional and minimill producers separately. Information on minimill criteria is presented in the following tabulation: 55 The economic consultant for the Brazilian respondents defined minimills as (a) producing from a scrap-based process using electric arc furnaces, (b) having production capacities of a million tons or lower, (c) servicing regional rather than national markets, and (d) being nonunionized (TR, pp. 171-172). 55 William T. Hogan, S.J., Minimills and Integrated Mills (D.C. Heath and Co.: Lexington Books, Lexington, MA), 1987, p. 9. 57 There are several minimill companies with more than 1 million tons production capacity, and one with a capacity of over 4 million tons. Each of several integrated mills have production capacities of less than 1 million tons, although integrated mills are larger on average. In general, the average size of integrated mills has decreased. 58 For further discussion see, USITC, Steel Industry Annual Report On Competitive Conditions in the Steel Industry and Industry Efforts to Adjust and Modernize, .USITC Publication 2436, September 1991, pp. 3-38, 3-39. 51 Certain Hot-Rolled Lead and Bismuth Carbon Steel Products from Brazil. France. Germany. and the United Kingdom, USITC Publication 2512, June 1992, p. 26. I-30 Produc- Markets served: tion Production Production Union Re- X Shipments-- process 1 method capacit~ presentation < 500 mi. > 500 mi Bethlehem ...... EAF Ingot *** *** *** *** Border ......... EAF Cast billet *** *** *** *** Calumet ........ EAF Cast billet *** *** *** *** Chaparral ...... EAF Cast billet *** *** *** *** Copperweld ..... EAF Cast billet *** *** *** *** Green River .... EAF ·Cast billet *** *** *** *** Inland ......... BOF Bloom, cast *** *** *** *** billet MacSteel ....... EAF Cast billet *** *** *** *** North Star ..... EAF Cast billet *** *** *** *** Raritan River .. EAF Cast billet *** *** *** *** Republic ....... EAF Ingot, cast *** *** *** *** billet Sheffield ...... EAF Cast billet *** *** *** *** Timken ......... EAF Ingot *** *** *** *** USS/Kobe ....... BOF Ingot *** *** *** *** 1 EAF-Electric arc furnace and BOF-Basic oxygen furnace. 2 *** U.S. Importers Information identifying importers of special quality carbon and alloy steel products was provided by counsel for the petitioner and was verified against files provided by the U.S. Customs Service. The Commission sent questionnaires to approximately *** importers of the subject product from Brazil, which include all the known major importers of special quality carbon and alloy steel products. The *** importers are believed to account for approximately *** percent of total imports of the subject special quality carbon and alloy steel products from Brazil. Major importers and their 1991 imports (in short tons) and share of imports (in percent) of the subject products from Brazil are presented below: 60 * * * * * * * U.S. Producer•' Imports *** U.S. producers, *** reported imports of special quality semifinished and/or hot-rolled carbon and alloy steel products, reportedly to economically supplement their own product (hot-rolled and cold-finished) lines. 61 ***· Data on*** production and imports from Brazil during the period of investigation are presented below (in short tons): 62 60 The Commission has not received information from the following firms that have been identified as U.S. importers of the subje.ct products from Brazil: *** 61 *** 62 *** I-31 * * * * * * * Apparent U.S. Consumption The.demand for special quality carbon and alloy steel products, as intermediate products, depends largely on the level of overall economic activity. In general, weak demand in the automotive and construction sectors during 1991 contributed to declines in apparent U.S. consumption of special quality carbon and alloy steel products. Market Trends An examination of economic conditions in the' ·and-use markets for special quality steel shows that growth in these markets has slowed since 1988. Information received in this and other investigations indicates that the major markets for special quality steel products are transportation equipment, especially motor vehicles and equipment and aircraft and parts; industrial machinery and equipment, especially engines and turbines, construction and related machinery, and general industrial machinery; and electrical equipment. The following tabulation displays growth in these markets, 63 as measured by growth in U.S. shipments, during 1988-90: 64 lndust!::~ l.ill llli lW2 l28z·-9Q .------------(Percent change)----------------- Transportation o:oequipment ........... 6.5 2.9 9.6 Motor vehicles and equipment ........... 5.6 (1.4) (7.4) (3.7) Aircraft and parts .... (11.8) (4.4) (3.7) (18.8) Industrial machinery .... 12.4 8.3 3.5 26.0 Engines and turbines .. 2.2 (2.1) (12.6) (12.6) Construction machinery ........... 14.5 6.0 4.8 27.2 General indus~rial machinery ........... 8.5 9.1 6.6 26.2 Electrical equipment .... 7.5 4.7 (2.6) 9.6 Three major industries, motor vehicles and equipment, aircraft and parts, and engines and turbines, suffered overall negative growth between 1987 and 1990. Significantly, in the motor vehicles and equipment industry, the major consumer of special quality steel, growth fell 7.4 percent from 1989 to 1990, the first part of the period under investigation. Certain major industries experienced significant growth between 1987 and 1990. Construction machinery, general industrial machinery, and industrial machinery as a whole all grew more than 25 percent during this period. Transportation equipment as 63 Based on the closest SIC equivalent. 64 Source: U.S. Department of Commerce, 1990 Annual Survey of Manufactures, M90(AS)-2 and Aerospace Industries Association of America, Aerospace Facts and Figures 91-92, 1991. Data for 1991 on U.S. shipments in these industries are not yet available. 1-32 a whole and electrical equipment also experienced positive growth between 1987 and 1990. Factual data gathered during this investigation on apparent U.S. consumption of special quality carbon and alloy steel products, free-machining products, and all special quality products, are presented in tables 5A-C. The data are derived from responses to the Commission's questionnaires and official import statistics, and are composed of the sum of U.S. shipmen~s (domestic shipments and company transfers) of U.S.-produced products plus imports. Trends in Apparent Consumption Apparent consumption of subject special quality carbon and alloy steel products increased from 3.428 million tons in 1989 to 3.599 million tons in 1990, or by 5.0 percent based on quantity, and then decreased by 9.7 percent to 3.249 million tons during 1991. During January-March 1992, apparent consumption rose by 7.9 percent when compared to the same period in 1991. In addition to the impact of overall economic activity, the magnitude of recent increases may be partially explained by accelerated purchases from Bethlehem following the announced sale of its Bar, Rod & Wire Division. U.S. Producers' Share of Apparent Consumption ~ The U.S. producers' share of total apparent consumption of subject special quality carbon and alloy bar and rod products (based on quantity) increased from 90.1 percent in 1989 to 92.7 percent in 1990, decreased slightly to 92.3 percent in 1991, and remained stable during January-March 1992 when compared to the same period in 1991. Channels of Distribution Table 6 presents the shares of shipments of special quality carbon and alloy steel finished products by channels of distribution for both U.S. producers and U.S. importers of product from Brazil. Special quality carbon and alloy semifinished steel products are sold by both U.S. producers and importers directly to processors for rerolling or forging applications. 1-33 Table SA Subject special quality carbon and alloy steel products: U.S. shipments of domestic product, U.S. imports, and apparent U.S; consumption, by products, 1989-91, January-March 1991, and January-March 1992 Jan. -Mar. - - Item 1989 1990 1991 1991 1992 Semifinished: Carbon: Producers• U.S. ship- ments . . . . . . . U.S. imports .... Apparent consumption Alloy: Producers• U.S. ship- ments . . . . . . . U.S. imports .... Apparent consumption Carbon and alloy: Producers• U.S. ship- ments ...... . U.S. imports ... . Apparent consumption Cut bars and rods: Carbon: Producers' U.S. ship- . ments .... U.S. imports Apparent consumption Alloy: Producers' U.S. ship- ments . . . . . . . U.S. imports .... Apparent consumption Carbon and alloy: Producers' U.S. ship- ments . . . . . . . U.S. imports .... Apparent consumption Producers' share of U.S. shipments: Semifinished: . . . Alloy ..... . Carbon and alloy Cut bars and rods: Carbon . . . . . Alloy ..... . Carbon and alloy --Continued on next page. . '. Quantity (short tons) 3,149,483 3,683,546 3,147,807 850,306 957,287 312' 119 386,Z99 422,Z06 14Z,S2S 154,SZ5 3,468,602 4,070,345 3,570,513 997,831 1,111,862 1,586,036 1,815,413 1,574,050 412,304 407,453 lJ.1,861 io9,223 139,165 36,630 34,994 1,697,897 1,924,636 1,713,215 448,934 442,447 4,735,519 5,498,959 4,721,857 1,262,610 1,364,740 430,980 496,022 261,§Zl 184,152 189,569 5,166,499 5,994,981 5,283,728 1,446,765 1,554,309 1,984,278 2,085,383 1,852,973 444,573 495,761 213,827 1§1,229 124,390 29,454 30,983 2,198,105 2,246,612 1,977,363 474,027 526,744 1,106,477 1,249,277 1,145,481 281,934 288,450 124,23Z 102,Z92 1.26,432 30,162 32,ZlO 1,230,714 1,352,069 1,271,916 312,096 321, 160 3,090,755 3,334,660 2,998,454 726 ,507 784,211 3J8,064 264,021 220,825 29,616 63,693 3,428,819 3,298,§81 3,249,2Z2 Z§6,123 64Z,904 Share of the quantity of u~s. consumption (percent) 90.8 90.5 88.2 85.2 86.1 93.4 94.3 91.9 91.8 92.1 91. 7 91. 7 89.4 87.3 87.8 90.3 92.8 93.7 93.8 94.l 89.9 92.4 90.1 90.3 89.8 90;1 22.z 92,J 22 ,!t 92,2 I-34 Table 5A--Continued Subject special quality carbon and alloy steel products: U;S. shipments of domestic product, U.S. imports, and appa~en~ U.S. consumption, by products, 1989-91, January-March 1991, and January~March ·1992 Jan. -Mar. - - Item 1989 1990 1991 1991 1992 Semifinished: Carbon: Producers' U.S. ship- ments .... U.S. imports Apparent consumption Alloy: Producers' U.S. ship- ments . . . . . . . U.S. imports .... Apparent consumption Carbon and alloy: Producers' U.S. ship- ments . . . . . . . . U. S . imports . . . . . Apparent consumption Cut bars and rods: Carbon: Producers' U.S. ship- ments . . . . . . . U.S. imports .... Apparent consumption Alloy: Producers' U.S. ship- ments . . . . . . . . U.S. imports ..... Apparent consumption Carbon and alloy: Producers' U.S. ship- ments . . . . . . . . U.S. imports ..... Apparent consumption Producers' share of U.S. · shipments: Semifinished: Carbon ... . Alloy ...... . Carbon and alloy Cut bars and rods: Carbon ..... . Alloy . . . . . . . Carbon and alloy Value Cl.000 dollars) 997,278 1,072,137 947,417 247,843 101,513 109,1~9 118,680 42,454 1,098,791· 1,181,296 1,066,097 290,297 676,043 730,527 647,157 176,804 48,3Z5 45,183 53,88Z 13 I 9ZZ 724,418 - 776. 310 701,044 190,781 1,673,321 1,802,664 1,594,574 424,647 149,888 154,942 172,567" 56,431 1,823,209 l,957,606 1,767,141 481,<;>78 902,568 914,788 1,226,378 195,547 92 1 276 68,208 53, 112' 12.~08 . 994,844 982,996 1,279,490 208,055 689,448 723,855 648,052 164,652 65 I 725 55,908 66,049 16,33Z 755,173 779,763 714,101 180,989 1,592,016 1,638,643 1,874,430 360,199 158,001 124,116 119,161 28,845 1,750,017 l,Z62,Z59 1,993,591 389,04!! Share of t~e value of U.S. consumption (12ercentl 90.8 90.8 88.9 85.4 93.3 94.1 92.3 92.7 91.8 92.1 90.2 88.3 90.7 93.1 95.8 94.0 91. 3 92.8 90.8 91.0 91.0 93.0 94.0 92.6 Note.--Because of rounding, shares may not add to the totals shown. 276,228 43,330 319,558 162. 776 12,464 175,240 439,004 55,794 494,798 208,08~· 14,688 222,772 161,530 15, Z7Z 177. 307 369,614 30,465 400,019 86.4 92.9 88.7 93.4 91. l 92.4 Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission and from official statistics of the U.S. Department of Commerce. I-35 Table SB Free-machining carbon and alloy steel products: U.S. shipments of domestic product, U.S. imports, and apparent U.S. consumption, by products, 1989-.91, January-March 1991, and January-March 1992 Item Semifinished: Carbon: Producers' U.S. ship- ments . . . . . . . U.S. imports .... Apparent consumption Alloy: Producers' U.S. ship- ments .. -· ·.... . U.S. imports .... . Apparent consumption Carbon and alloy: Producers' U.S. ship- ments . . . . . . . , U.S. imports ..... Apparent consumption Bars and rods: Carbon: Producers' U.S. ship- ments ...... . U.S. imports ... . Apparent consumption Alloy: Producers' U.S. ship- ments . . . . . . . . U.S. imports ..... Apparent consumption Carbon and alloy: Producers' U.S. ship- ments . . . . . . . . U.S. imports ..... Apparent consumption Producers' share of U.S. shipments: Semifinished: Carbon . . . . Alloy ...... . Carbon and alloy Bars and rods: Carbon . . . . . . Alloy . . . . . . . Carbon and alloy --Continued on next pag~. Jan . - Mar . - - · 1989 1990 1991 1991 1992 Quantity (short tons) 840,712 893,553 694, 517 144,220 224,217 83,246 69,140 68,365 23,618 27,962 923,958 962,693 762,882 167,838 252,179 87,785 102,075 76,539 23 ,·682 21,873 2,948 6,170 9,049 1,511 1,089 90,733 108,245 85,588 25,193 22,962 928,497 995,628 771, 056 167,902 246,090 86,194 75,310 7Z,414 25,129 29,051 1,014,691 1,070,938 848,470 193 '031 275,141 820,711 851,428 661,564 152,961 212,434 222,855 2SZ,Z69 263,313 45 ,011 48,378 1,093,566 1,109,197 924' 877 197' 972 260,812 85,229 93,976 73,562 24,207 20,091 16,392 11,457 16,466 3, 712 2,501 101,621 105,433 90,028 27,919 22,592 905,940 945,404 735,126 ·177,168 232,525 289,24Z 269,226 279,7Z9 48, 723 50,879 1,195,18Z 1,214,630 1,014,905 225,891 283,404 Share of the quantity of U.S. consumption (Rercent} 91.0 92.8 91. 0 85.9 88.9 96.8 94.3 89.4 94.0 95.3 91. 5 93.0 90.9 87.0 89.4 75.0 76.8 71.5 77 .3 81. 5 83.9 89.1 81. 7 86.7 88.9 75.8 77.8 72.4 zs.4 82,0 1-36 Table 5B--Continued Free-machining carbon and alloy steel products: U.S. shipments of domestic product, U.S. imports, and apparent U.S. consumption, by products, 1989-91, January-March 1991, and January-March 1992 Item Semifinished: Carbon: Producers' U.S. ship- ments . . . . . . . U.S. imports .... Apparent consumption Alloy: Producers' U.S. ship- ments ....... . U.S. imports .... . Apparent consumption Carbon and alloy: Producers' U.S. ship- ments ....... . U.S. imports .... . Apparent consumption Bars and rods: Carbon: Producers' U.S. ship- ments ...... . U.S. imports ... . Apparent consumption Alloy: Producers' U.S. ship- ments . . . . . . . . U. S . imports . . . . . Apparent consumption Carbon and alloy: Producers' U.S. ship- ments ....... . U.S. imports .... . Apparent consumption Producers' share of U.S. shipments: Semi finished: Carbon . . . . Alloy . . . . . . . Carbon and alloy Bars and rods: Carbon ..... . Alloy . . . . . . . Carbon and alloy Jan. -Mar . - - 1989 1990 1991 1991 1992 Value Cl.000 dollars) 275,441 288,078 227,670 47,595 75,081 32.258 26.351 26.146 9.260 9.997 307,699 314,429 253,816 56,855 85 ,078 48,017 47,683 36,032 11,431 9,867 1.368 4.170 6.873 1.147 885 49,385 51,853 42,905 12,578 10,752 323,458 335,761 263,702 59,026 84,948 33.626 30.521 33.019 10.407 10.882 357,084 366,282 296. 721 69,433 95,830 414,121 420,641 323,423 77 ,212 107,327 128.123 117.766 121.595 19.389 19.999 542,244 538,407 445,018 96,601 127,326 62,556 67,057 50,096 17,000 13,536 11.370 8.220 12.662 2.902 2.013 73,926 75,277 62,758 19,902 15,549 476,677 487,698 373,519 94,212 120,863 139.493 125.986 134.257 22.291 22.012 616.170 613.684 507.776 116.503 142.875 Share of the value of U.S. consumption (percent) 89.5 91.6 89.7 83.7 88.2 97.2 92.0 84.0 90.9 91.8 90.6 91. 7 88.9 85.0 88.6 76.4 78.l 72. 7 79.9 84.3 84.6 89.1 79.8 85.4 87.1 77 .4 79.5 73.6 80.9 84.6 Note.--Because of rounding, shares may not add to the totals shown. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission and from official statistics of the U.S. Department of Commerce. I-37 Table SC All special quality carbon and alloy steel products: U.S. shipments of domestic product, U.S. imports, and apparent U.S. consumption, by products, 1989-91, January-March 1991, and January-March 1992 Item Semifinished: Carbon: Producers' U.S. ship- ments . . . . . . . U.S. imports .... Apparent consumption Alloy: Producers' U.S. ship- ments . . . . . . . . U.S. imports ..... Apparent consumption Carbon and alloy: Producers' U.S. ship- ments . . . . . . . . U.S. imports ..... Apparent consumption Bars and rods: Carbon: Producers' U.S. ship- ments . . . . . . . U.S. imports .... Apparent consumption Alloy: Producers' U.S. ship- ments . . . . . . . . U.S. imports ..... Apparent consumption Carbon and alloy: Producers' U.S. ship- ments . . . . . . . . U.S. imports ..... Apparent consumption Producers' share of U.S. shipments: Semi finished: Carbon ... . Alloy ...... . Carbon and alloy Bars and rods: Carbon ..... . Alloy . . . . . . . Carbon and alloy -·Continued on next page. Jan. -Mar. - - 1989 1990 1991 1991 1992 Quantity (short tons) 3,547,850 4,117,781 3,488,174 920, 777 1,075,319 391,918 446,230 476,882 165,757 179,501 3,939,768 4,564,011 3,965,056 1,086,534 1,254,820 1,615,932 1,844,641 1,595,542 416,642 413,948 114,809 102,903 139,165 36,630 34,994 1,730,741 1,954,544 1,734,707 453,272 448,942 5,163,782 5,962,422 5,083,716 1,337,419 1,489,267 506,Z27 556,133 616,047 202,387 214.495 5,670,509 6,518,555 5,699,763 1,539,806 1,703,762 4,656,526 4,669,781 4,318,155 1,051,300 1,203,180 1, 820, 977 1,700.011 1,517.202 356.614 492,155 6 ,477' 503 6,369,792 5,835,357 1,407,914 1,695,335 1,307,308 1,462,222 1,333,746 328,926 342,556 338,215 292,191 344,835 85,383 94,182 1,645,523 1, 754,413 1,678,581 414,309 436,738 5,963,834 6,132,003 5,651,901 1,380,226 1,545,736 2,159,192 1,992,202 l,862,03Z 4!tl 1 99Z 58§,3JZ 8,123,Q2§ 8,l24,2Q5 Z.2l3,2J8 l.822.22J 2,l32,QZ3 Share of the quantity of U.S. consumption (:eercentl 90.1 90.2 88.0 84.7 85.7 93.4 94.4 92.0 91. 9 92.2 91.1 91. 5 89.2 86.9 87.4 71. 9 73.3 74.0 74.7 71.0 79.4 83.3 79.5 79.4 78.4 73,4 75.5 zs.2 zs.1 72, 5 I-38 1 Table 5C--Continued All special quality carbon and alloy steel products: , product, U.S. imports, and apparent U.S. consumption, January-March 1991, and January-March 1992 U.S. shipments of domestic by products, 1989-91, Item Semifinished: Carbon: Producers' U.S. ship- ments . . . . U.S. imports .. Appa~ent consumption Alloy: Producers' U.S. ship- ments .. U.S. imports . Apparent consumption Carbon and alloy: Producers' U.S. ship- ments . . ... U.S. imports . . . Apparent consumption Bars and rods: Carbon: Producers' U.S. ship- ments . . U.S. imports . Apparent consumption Alloy: Producers' U.S. ship- ments . . . . . U.S. imports . Apparent consumption Carbon and alloy: Producers' U.S. ship- ments U.S. imports . Apparent consumption Producers' share of U.. S. shipments: Semifinished: Carbon . . Alloy . . . . . . Carbon and alloy Bars and rods: Carbon ..... Alloy . . . . . . Carbon and alloy Jan. -Mar. - - 1989 1990 1991 1991 1992 Value (1.000 dollars) 1,137,628 129.937 1,267,565 690,083 49.743 739,826 1,827,711 179.680 2,007,391 2,029,636 719.964 2,749,600 815,386 177.436 992,822 1,221,802 132.206 1,354,008 743,929 46.152 790,081 1,965,731 178.358 2,144,089 2,025,568 641.409 2. 66,6. 977 854;130 151.726 1,005,856 1,065,213 139. 513 1,204,726 655,521 53,887 709,408 1,720,734 193.400 1,914,134 2,229,381 565.651 2,795,032 760,742 169.469 930. 211 2,845,022 2,879,698 2,990,123 897.400 793.135 735.120 3.742.422 3.672.833 3.725.243 Share of the value of U.S. (percent) 89.7 93.3 91.0 73.8 82.1 76.0 90.2 94.2 91. 7 . 75. 9 84.9 78.4 88.4 92.4 89.9 79.8 81.8 80.3 272,073 49. 677 321,750 178,481 13.977 192,458 450,554 63.654 514;208 443,168 128.807 571,975 192,920 42.797 235,717 317,349 52.264 369 ,613 165,216 12.464 177,680 482,565 64.728 547,293 496 ,"767 172.018 668,785 193,708 43.391 237,099 636,088 690,475 171.604 215.409 807,692 905.884 consumption 84.6 92.7 87.6 77 .5 81.8 78.8 85.9 93.0 88.2 74.3 81. 7 76.2 Note.--Because of rounding, shares may not add to the totals shown. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission and from official statistics of the U.S. Department of Commerce. Table 6 Special quality carbon and a.lloy steel. products: Shares of shipments of product, by channels of distribution, 1991 Item CARBON: Cut bars-- Non-lead/bismuth free -machining .. Other special ...... . Subject special; .. Coiled bars - - Non-lead/bismuth free -machining .. Other special ...... . Certain special .. . Rods-- Non-lead/bismuth free -machining .. Other special ...... . Certain special .. . Lead & bismuth ..... . All free-machining .. All special ........ . Bars & Rods-- Non-lead/bismuth free-machining .. Other special. ..... . Certain special .. . Lead & bismuth ..... . All free-machining .. All special ........ . ALLOY: Cut bars-- Non-lead/bismuth free-machining .. Other special ...... . Subject special .. . Coiled bars- - Non-lead/bismuth free-machining .. Other special ....... . Certain special .. . Rods-- Non-lead/bismuth free -machining .. Other special ...... . Certain special .. . Lead & bismuth ..... . All free-machining .. All special ........ . --Continued on next page. <In percent) End users-- Distributor/ · Cold service centers finishers Forgers Other U.S.-produced product 15.0 38.6 . 22.l 24.3 8.1 19.9 12.6 59.4 9.1 22.7 14.0 54.3 .2 90.8 .1 8.9 3.0 29.8 18.0 49.2 2.6 39.0 15.3 43.2 (1) 96.5 (1) 3.5 (1) 9.3 3.0 87.7 (1) 12.0 2.9 85.1 (1) 83.8 (1) : 16.2 (1) 89.4 (1) 10.6 (1) 14.7 2.8 82.5 11.3 52.3 16.5 19.9 4.6 16.9 9.5 69.0 . 5.3 20.7 10.3 63.8 (1) 94.1 (1) 5.9 6.1 71.6 8.9 13.4. 4.8 26.8 9.4 59.0 1.4 (1) (1) 98.5 11.l 9.3 15.0 64.7 10.6 8.8 14.4 66.2 (1) (1) (1) (1) 2.7 22.7 .5.7 68.8 2.7 22.7 5.7 68.8 (1) (1) (1) (1) .2 34.7 (1) 65.l .2 34.7 (1) 65.1 (1) 76.0 (1) 24.0 (1) 76.0 (1) 24.0 .2 36.7 (1) 63.1 I-40 Table 6--Continued Special quality carbon and alloy steel products: Shares of shipments of pr.oduct, by channels of dis-tribution, 1991 I-41 Table 6--Continued Special quality carbon and alloy steel products: Shares of shipments of product, by channels of distribution, 1991 (In percent) End users-- Distributor/ Cold Item service centers finishers Forgers Other Imports from Brazil CAR.BON: Cut bars .............. 75.5 22.5 (1) (1) Bars & Rods ........... 53.3 47.7 (1) (1) ALLOY: Cut bars .............. 64.7 (1) (1) 35.3 Bars & rods ........... 64.7 (1) (1) 35.3 CAR.BON & ALLOY: Cut bars .............. 72.5 13. 7 (1) (1) Bars & rods ........... 56.7 32.7 (1) 10.6 1 Not applicable or zero. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. CONSIDERATION OF ALLEGED MATERIAL INJURY TO AN INDUSTRY IN THE UNITED STATES The information in this section of the report was compiled from responses to questionnaires of the U.S. International Trade Commission. The producers that provided questionnaire responses are believed to account for approximately *** percent of U.S. shipments of total special quality carbon and alloy steel products in• 1991. As mentioned previously, this report is structured to provide data and information on three overall like-product industries as follows: 65 I. Subject special.--The petitioners' proposed like product of special quality semifinished and hot-rolled bars and rods of carbon and alloy steel; excluding hot-rolled products in irregularly wound coils, and hot-rolled lead and bismuth carbon and alloy steel products. II. Free-machining.--The category of "free-cutting" steel as defined by the headnote to Chapter 72 of the HTS, 66 including resulfurized alloy steel products; also includes semifinished products and hot- rolled bars and rods whether or not in irregularly wound coils, and lead and bismuth carbon and alloy steel products. 65 See app. G for summary data for alternative like-product industry scenarios, including separate industries producing bar and rod, and lead and bismuth carbon and alloy steel products. 66 See app. F for tariff headnotes. I-42 III. All special.--All special quality carbon and alloy steel products whether or not in irregularly wound coils, and including lead and bismuth carbon and alloy steel products. U.S. Production, Capacity, and Capacity Utilization Data on reported U.S. production, average-of-period capacity, and capacity utilization in connection with operations on special quality carbon and alloy steel products are presented in table 7. Production of all subject special quality carbon and alloy steel bar and rod products increased from 3.10 million tons in 1989 to 3.42 million tons in 1990, or by 10.4 percent, and then decreased to 2.99 million tons in 1991, or by 12.7 percent. Production turned upward by 16.6 percent during January-March 1992 when compared with that in the same period in 1991. Capacity to produce subject special quality carbon and alloy steel products increased by 6.7 percent to 4.22 million tons in 1990,.as North Star and Tim.ken reported increases in capacity, and remained unchanged thereafter. Utilization of capacity to produce subject special quality .hot-rolled carbon and alloy bar and rod products increased from 77.0 percent in 1989 to 79.7 percent in 1990, and decreased to 70.0 percent in 1991. Capacity utilization increased to 70.4 percent during January-March 1992 when compared to 58.0 percent during the corresponding period of 1991. U.S. Producers' U.S. Shipments Data on U.S. producers' total shipments of special quality carbon and alloy steel products, by type of product, are presented in tables 8A-C. Semifinished special quality steel products were generally consumed internally in the further value-added production of hot-rolled carbon and alloy steel bars and rods. Aggregate U.S. shipments of the subject special qua~ity carbon and alloy bars and rods increased from 1989 to 1990 by 7.9 percent, decreased .from 1990 to 1991 by 10.l percent, and increased from interim 1991 to interim 1992 by 7.9 percent. Questionnaire data regarding U.S. shipments by selected types of special quality products are presented in table 9 and indicate that subject special quality carbon and alloy semifinished products sold as "forging" billets, and not otherwise re-rolled, accounted for a low of *** percent of U.S. shipments of special quality semifinished produc.ts in 1989, and a high of *** percent in 1990. The data also indicate that special quality coiled carbon and alloy steel products in the "overlap" category between 0.5-0.74 inch accounted for a low of *** percent of U.S. shipments of special quality coiled products during January-March 1991, and a high of *** percent in 1989. U.S. Producers' Exports Information on U.S. producers' exports of special quality carbon and alloy steel products is based on questionnaire responses of***· firms, accounting for approximately*** percent of total shipments of U.S.-produced subject special quality carbon and alloy bars and rods in 1991 (see tables 8A-C). U.S. producers' exports of subject special quality semifinished products increased*** from 1990 to a high in*** tons, representing *** percent of total U.S. shipments of the subject *** products. U.S. producers, ***, exported to Mexico and Canada. I-43 Table 7 Special quality carbon and alloy steel products: U.S. capacity,' production, and capacity utilization, by products, 1989-91, January-March 1991, and January-March 1992 Jan, -Mar. - - Item 1989 1990 1991 1991 1992 Average-of-Reriod caRacitx (short tons) Subject special-quality: Carbon: Semi finished 5;098,482 5,245,597 5,045,185 1,257,847 1,305,901 Cut bars and rods 2,599,365 2,717,855 2,675,532 678,755 683,017 Alloy: 0 Semif inished 2,214,677 2,334,919 2,353,510 574,883 566,8~7 Cut bars and rods f,361,348 1,505,381 1,523,986 500,967 450,071 Carbon and alloy: Semifinished 7,313,159 7,580,516 7,398,695 1,832,730 1,872,768 Cut bars and rods 3,960,713 4,223,236 4,199,518 1,179,722 1,133,088 Free-machining: Carbon: Semif inished 1,737,064 1,754,980 1,681,236 408,507 417,464 Bars and rods 1,557,625 1,580,111 1,577,242 395,230 404,012 Alloy: Semif inished 124,429 125,462 125,920 31,461 31,650 Bars and rods . 141,303 142,668 142,505 35' 877 35,748 Carbon and alloy: Semi finished 1,861,493 1,880,442 1,807,156 439,968 449, 114 Bars. and rods 1,698,928 l, 722, 779 1,719,747 431,107 439,760 All special-quality: Carbon: Semif inished 6,111,182 6,258,297 6,057,885 l,5ll,247 1,559,301 Bars and rods 6,138,805 6,004,295 5,986,112 1,575,500 1,580,917 Alloy: Semif inished 2,265,677 2,385,919 2,404,510 587,683 579,667 Bars and rods 2,004,348 2,150,881 2,171,986 663. 717 612,821 Carbon and alloy: Semifinished 8,376,859 8,644,216 8,462,395 2,098,930 2,138,968 Bars and rods 8.143.153 8.155.176 8.158.098 2. 239. 217 2.193.738 Production (short tons} Subject special-quality: Carbon: Semi finished 3,431, 771 3,663,161 3,200,150 842,876 951, 138 Cut bars and rods 1,983,331 2,131,346 1,844,528 430,148 513,454 Alloy: Semif inished 1,563,689 1,810,544 1,558,625 401,905 404,824 Cut bars and rods l,ll7,382 1,292,178 1,143,597 265. 611 297,909 Carbon and alloy: Semi finished 4,995,460 5,473,705 4,758,775 1,244,781 1,355,962 Cut bars and rods 3,100,713 3,423,524 2,988,125 695,759 811, 363 Free-machining: Carbon: Semif inished 868,853 906,568 693,690 141,436 227,501 Bars and rods 820,462 871t733 683,508 148,756 210,234 Alloy: Semi finished 87,149 99,983 76,373 23,517 20,849 Bars and rods 84,436 95,330 72' 147 22,023 20,946 Carbon and alloy: Semif inished 956,002 1,006,551 770,063 164,953 248,350 Bars and rods 904,898 967,063 755,655 170,779 231,180 --Continued on next page. I-44 Table 7--Continued Special quality carbon and alloy steel products: U.S. capacity, production, and capacity utilization, by products, 1989-91, January-March 1991, and January-March 1992 Item All special-quality: Carbon: Semif inished Bars and rods Alloy: Semif inished Bars and rods Carbon and alloy: Semif inished Bars and rods . Subject special-quality: Carbon: Semif inished Cut bars and rods Alloy: Semif inished Cut bars and rods . Carbon and alloy: Semi finished Cut bars and rods Free-machining: Carbon: Semif inished Bars and rods Alloy: Semif inished Bars and rods . Carbon and alloy: Semif inished Bars and rods All special-quality: Carbon: Semi finished Bars and rods Alloy: Semif inished Bars and rods . Carbon and alloy: Semif inished Bars and rods . Jan. -Mar. -- 1989 1990 1991 1991 1992 Production (short tons) 3,861,574 4,126,784 3,541,327 4,641,685 4,778,646 4,323,734 l,592,949 1,837,691 1,580,035 1,313,847 1,507,701 1,331,130 912,578 988,625 406,080 309,117 5,454,523 5,964,475 5.955.532 6.286.347 5,121,362 1,318,658 5.654.864 1.297.742 67.3 74.4 70.6 82.0 68.3 77 .0 50.0 51.5 70.0 115.2 51.4 54.4 63.2 69.2 70.3 74.7 65.1 70.4 Capacity utilization (percent) 69.8 76.4 77.5 85.8 72.2 79.7 51. 7 53.9 79.7 127.7 53.5 57.3 65.9 69.4 77 .0 79.2 69.0 71.8 63.4 67.1 66.2 75.0 64.3 70.0 41.3 42.3 60.7 96.8 42.6 44.8 58.4 63.2 65.7 69.2 60.5 64.6 67.0 61. 7 69.9 53.0 67.9 58.0 34.6 37.3 74.7 116. 7 37.5 40.9 60.4 55.5 69.l 51.4 62.8 54.4 1,076,335 1,184,108 410,294 357,498 1,486,629 l. 541.606 72.6 73.2 71.4 66.2 72.2 70.4 54.5 51.1 65.9 lll. 7 55.3 53.8 68.8 67.1 70.8 64.9 69.4 66.5 Note.--Capacity utilization is calculated using data of firms providing both capacit) and production information. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. I-45 Table SA Subject special quality carbon and alloy steel products: Shipments by U.S. producers, by products and by types 1989-91, January-March 1991, and January-March 1992 I-46 Table 8A--Continued Subject special quality carbon and alloy steel products': Shipments .by U. s. producers, by products and by types 1989-91, January-·March· 1991, and January-March 1992 Jan, -Mar, - - Item 1989 1990 1991 . 1991 1992" Value (1,000 dollars} Semifinished: Carbon: Company transfers 830,969 872, 809 804, 386. 205, 3ll 234,148 Domestic shipments 166,309 199,328 143,031 42 ,·532 42,080 Subtotal 997,278 1,072,137 947,417 247,843 276,228 Export$ *** *** *** *** *** Total ' *** *** *** *** *** Alloy: 146,349Company transfers 568,328 614,318 555, 694. 14.0, 855 Domestic shipments 107,715 ll6,209 91,463 30,455 21, 921 Subtotal 676,043 730,527 647,157 176,804 162, 776 Exports . . ***. *** *** *** *** Total *** *** *** *** *** Carbon and alloy: Company transfers 1,399,297 1,487,127 1,360,080 : .351, 660 375,003 Domestic shipments 274,024 315,537 234,494 Z2,987 64,001 Subtotal 1,673,321 1,802,664 1,594,574 424,647 439,004 Exports *** *** *** *** *** Total . *** *** *** *** *** Cut bars and rods: Carbon: Company transfers *** *** *** *** *** Domestic shipments *** *** *** *** ~- *** Subtotal 902,568 914,788 1,226,378 195,547 208,084 Exports *** *** *** *** *** Total *** *** *** *** *** Alloy: Company transfers *** *** *** *** *** Domestic shipments *** *** *** '*** *** Subtotal 689,448 723 ,855 648,052 164,652 161,530 Exports *** *** *** *** *** Total .... *** *** *** *** *** Carbon and alloy: Company transfers *** *** *** *** *** Domestic shipments *** *** *** *** *** Subtotal 1,592,016 1,638,643 1,874,430 360,199 369,614 Exports . *** *** *** *** *** Total *** *** *** *** ***: j --Continued on next page. I-47 Table 8A--Continued Subject special quality carbon and alloy steel products: Shipments by U.S .. producers, by products and by types 1989-91, January-March 1991, and ~anuary-March 1992 Item Semifinished: Carbon: Company transfers Domestic shipments Average Exports Average Alloy: Company transfers Domestic shipments Average Exports Average Carbon and alloy: Company transfers Domestic shipments Average Exports Average Cut bars and rods: Carbon: Company transfers Domestic shipments Average Exports Average Alloy: Company transfers Domestic shipments Average Exports Average . Carbon and alloy: Company transfers Domestic shipments Average Exports Average 1 Not applicable. 1989 $308.87 362.20 316.65 *** *** 408.97 548.55 426.25 *** *** 342.97 418.02 353.36 *** *** *** *** 454.86 *** *** *** *** 623.10 *** *** *** *** 515.09 *** *** Jan. -Mar. - - 1990 1991 1991 1992 Unit value (per short ton) $283.15 331.62 291. 06 *** *** 391.14 474.69 402.40 *** *** 319.60 373.03 327.82 *** *** *** *** 438.67 *** *** *** *** 579.42 *** *** *** *** 491.40 *** *** $293.69 349.76 300.98 *** *** 401.08 485.08 411.14 *** *** 329.77 392.46 337.70 *** *** *** *** 661. 84 *** *** *** ***· 565.75 *** *** *** *** 625.13 *** *** $280.77 357.24 291.48 *** *** 416.06 502.91 428.82 *** *** 324.71 406.35 336.32 *** *** *** *** 439.85 *** *** *** *** 584.01 *** *** *** *** 495.80 *** *** $280.37 344.47 288.55 *** *** 389.42 479.17 399.50 *** *** 313.33 381.17 321. 68 *** *** *** *** 419.73 *** *** *** *** 559.99 *** *** *** ***471. 32 *** *** Note.--Unit values are calculated using data of firms supplying both quantity and value information. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. 1-48 Table SB Free-machining carbon and alloy steel products: Shipments by U.S. producers, by products and by types 1989-91, January-March 1991, and January-March 1992 Item Semi finished: Carbon: Company transfers Domestic shipments Subtotal Exports Total Alloy: Company transfers Domestic shipments Subtotal Exports . . . . . Total ..... Carbon and alloy: Company transfers Domestic shipments Subtotal Exports .. Total .. Bars and rods: Carbon: Company transfers Domestic shipments Subtotal Exports Total Alloy: Company transfers Domestic shipments Subtotal Exports . . . . . Total ..... Carbon and alloy: Company transfers Domestic shipments Subtotal Exports Total --Continued on next page. 1989 *** *** 840,712 *** *** *** *** 87,785 *** *** *** *** 928,497 *** *** *** *** 820,711 *** *** *** *** 85,229 *** *** *** *** 905,940 *** *** Jan, -Mar, - - 1990 1991 1991 1992 Quantity (short tons) *** *** *** *** *** *** *** *** 893,S53 694,517 144,220 224,217 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** 102,075 76,539 23,682 21,873 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** 995,628 771,056 167,902 246,090 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** 851,428 661,564 152,961 212,434 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** 93,976 73,562 24,207 20,091 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** 945,404 735,126 177, 168 232,525 *** *** *** **-le *** *** *** **-le I-49 Table 8B--Continued Free-machining carbon and alloy steel products: Shipments by U.S. producers, by products and by types 1989-91, January-March 1991, and January-March 1992 Item Semifinished: Carbon: Company transfers Domestic shipments Subtotal Exports Total Alloy: Company transfers Domestic shipments Subtotal Exports .... . Total .... . Carbon and alloy: Company transfers Domestic shipments Subtotal Exports .. Total .. Bars and rods: Carbon: Company transfers Domestic shipments Subtotal Exports Total Alloy: Company transfers Domestic shipments Subtotal Exports . . . . . Total ..... Carbon and alloy: Company transfers Domestic shipments Subtotal Exports Total --Continued on next page. 1989 *** *** 275,441 *** *** *** *** 48,017 *** *** *** *** 323,458 *** *** *** *** 414,121 *** *** *** *** 62,556 *** *** *** *** 476' 677 *** *** Jan, -Mar, - - 1990 1991 1991 1992 Value (l, 000 dollars) *** *** *** *** *** *** *** *** 288,078 227,670 47,595 75,081 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** 47,683 36,032 11,431 9,867 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** 335,761 263,702 59,026 84,948 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** 420,641 323,423 77,212 107,327 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** 67,057 50,096 ·11,000 13 '536 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** 487,698 373,519 94,212 120,863 *** *** *** *** *** *** *** *** I-50 Table SB . Free-machining carbon and alloy steel products:· Shipments by U.S. producers, by products and by types 1989-91, January-March 1991, and January-March 1992 Item Semifinisheg: Carbon: Company transfers ·Domestic shipments Average Exports Average Alloy: . Company transfers Domestic shipments Average . Exports .. Average Carbon and alloy: Company transfers Domestic shipments Average Exports ·Average Bars and rods: Carbon: Comp~ny transfers Dome$ti~ shipments Average Exports Average Alloy: Company transfers Domestic shipments Average Exports . Average Carbon and alloy: Company transfers Domestic shipments Average Exports Average 1 ·Not available. 2 Not applicable. 1989 *** *** $327.63 *** . *** *** *** 546.98 *** *** *** *** 348.37 *** *** *** *** 504.59 *** *** *** *** 733.98 *** *** .. *** *** 526.17 *** *** Jan. -Mar. - - 1990 1991. 1991 . 1992 U~it value (per short ton} *** *** $322.40 *** *** *** *** 467.14 *** *** *** *** 337.24 *** *** *** *** 494.05 *** *** *** *** 713.55 *** *** *** *** 515.87 *** *** *** *** $327.81 *** *** *** *** 470.77 *** *** *** *** 342.00 *** *** *** *** 488.88 *** *** *** *** 681.00 *** *** *** *** 508.10 *** *** *** *** $330.02 *** ~** 'i!** *** 482.69 *** ***. *** *** 35L55 *** *** *** *** 504.78 *** *** *** *** 702.28 *** *** *** *** 531.77 *** *** *** *** $334.86 *** *** *** *** 451.10 *** *** *** *** 345.19 *** *** *** *** 505.23 *** *** *** *** 673.73 *** *** *** *** 519.78 *** *** Note.--Unit values are calculated using data of firms supplying both quantity and value information. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. I-51 Table SC All special quality carbon and alloy steel products: Shipments by U.S. producers, by products and by types 1989-91, January-March 1991, and January-March 1992 Jan. -Mar. - - Item 1989 1990 1991 1991 1992 Quantit~ (short tons} Semifinished: Carbon: Company transfers 3,073,556 3,489,564 3,048,344 795,469 946,569 Domestic shipments 474,294 628,21Z 439,830 125,308 128,750 Subtotal 3,547,850 4,117,781 3,488,174 920. 777 1,075,319 Exports *** *** *** *** *** Total . . *** *** *** *** *** Alloy: Company transfers 1,419,285 1,599,617 1,406,897 356,013 368,192 Domestic shipments 196,647 245,024 188,645 60,629 45,756 Subtotal 1,615,932 1,844,641 1,595,542 416,642 . 413. 948 Exports . . ***. *** *** *** *** Total *** *** *** *** *** Carbon and alloy: Company transfers 4,492,841 5,089,181 4,455,241 1,151,482 1,314,761 Domestic shipments 6Z0,941 873,241 628,475 185,93Z 1Z4,506 Subtotal 5,163,782 5,962,422 5,083,716 1,337,419 1,489,267 Exports . ***. *** *** *** *** Total . . *** *** *** *** *** Bars and rods: Carbon: Company transfers *** *** *** *** *** Domestic shipments *** *** *** *** *** Subtotal 4,656,526 4,669,781 4,318,155 1,051,300 1,203,180 Exports . . *** *** *** *** *** Total *** *** *** *** *** Alloy: Company transfers *** *** *** *** *** Domestic shipments *** *** *** *** *** Subtotal 1,307,308 1,462,222 1,333,746 328,926 342,556 Exports . *** *** *** *** *** Total . *** *** *** *** *** Carbon and alloy: Company transfers 470,991 496,263 472' 963 109,619 139,690 Domestic shipments 5,492,843 5,635,Z40 5,178,938 1,270,607 1,406,046 Subtotal 5,963,834 6,132,003 5,651,901 1,380,226 1,545,736 Exports *** *** *** *** *** Total *** *** *** *** *** --Continued on next page. I-52 Table 8C--Continued All special quality carbon and alloy steel products: Shipments by U.S. producers, by products and by types 1989-91, January-March 1991, and January-March 1992 Jan, -Mar. - - Item 1989 1990 1991 1991 1992 Value (1,000 dollars} Semifinished: Carbon: Company transfers 966,321 1,013,665 911,957 227,437 273,049 Domestic shipments 171,307 208,137 153,256 44,636 44,300 Subtotal 1,137,628 1,221,802 1,065,213 272,073 317,349 Exports *** *** *** *** *** Total *** *** *** *** *** Alloy: Company transfers 582,177 627,584 563,996 147 '977 143,290 Domestic shipments 107,906 ll6,345 91,525 30,504 21,926 Subtotal 690,083 743,929 655,521 178 ,481 165,216 Exports . *** *** *** *** *** Total *** *** *** *** *** Carbon and alloy: Company transfers 1,548,498 1,641,249 1,475,953 375,414 416,339 Domestic shipments 279,213 324,482 244,781 75,140 66,226 Subtotal l,827,7ll 1,965,731 1,720,734 450,554 482,565 Exports . *** *** *** *** *** Total *** *** *** *** *** Bars and rods: Carbon: Company transfers *** *** *** *** *** Domestic shipments *** *** *** *** *** Subtotal 2,029,636 2,025,568 2,229,381 443,168 496,767 Exports . . . *** *** *** *** *** Total *** *** *** *** *** Alloy: Company transfers *** *** *** *** *** Domestic shipments *** *** *** *** *** Subtotal 815,386 854,130 760,742 192,920 193,708 Exports *** *** *** *** *** Total . *** *** *** *** *** Carbon and alloy: Company transfers 198,336 211,235 200,105 45,021 60,179 Domestic shipments 2,646,686 2,668,463 2,790,018 591,067 630,296 Subtotal 2,845,022 2,879,698 2,990,123 636,088 690,475 Exports *** *** *** *** *** Total *** *** *** *** *** --Continued on next page. I-53 Table 8C--Continued All special quality carbon and allo'y steel prodμct$: Shipments by U.S. producers, by products and by types 1989-91, January-March ~991, ··and January-March 1992 Jan. -Mar,.:._ Item 1989 1990 1991 1991 1992 Unit ~alue (12er short ton) Semifinished: Carbon: Company transfers $314.40 $290.48 $299.16 $285.92 $288.46 Domestic shipments 361,18 331,31 348,44 J56,21 344,08 Average 320.65 296. 71 305.38 295.48 295.12 Exports *** *** *** *** *** Average *** *** *** *** *** Alloy: Company transfers 410.19 392.33 400.88 .. 415. 65 389.1'7 Domestic shipments 548.73 474,83 485,17 503,13 . 4Z9,19 Average 427.05 403.29 410.85 428.38 399.12 Exports *** *** *** *** *** Average *** *** *** *** *** Carbon and alloy: Company transfers 344.66 322.50 331.28 32'6.03 316.67 Domestic shipments 416,15 3Zl,58 389,48 404,12 3Z9,51 Average 353.95 329.69 338.48 336.88 324.03 Exports *** *** *** *** *** Average *** *** *** *** *** Bars and rods: Carbon: Company transfers *** *** *** *** *** Domestic shipments *** *** *** *** *** Average 435.87 433.76 516.28 421.54 412.88 Exports . *** *** *** *** *** Average *** *** *** *** *** Alloy: Company transfers *** *** *** *** *** Domestic shipments *** *** *** *** *** Average 623. 71 584.13 570.38 586.51 565.48 Exports *** *** *** *** *** Average *** *** *** *** *** Carbon and alloy: Company transfers 42Ll0 425.66 423.09 410.70 430.80 Domestic shipments 481,84 !tZ3,49 538,Z2 46;2,18 448,28 Average 477 .05 469.62 529.05 '460.86 446.70 Exports *** *** *** ***. *** Average . *** *** *** *** *** Note.--Unit values are calculated using data of firms supplying both quantity and value information. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. 1-54 Table 9 Special quality carbon and alloy steel products: U.S. producers' U.S. shipments (domestic shipments and company transfers), by selected types, 1989-91, January- March 1991, and January-March 1992 January-March- - Item 1989 1990 1991 1991 , 1992 Forging b~llets: Quantity (short tons) ..... *** *** *** *** *** Value (l,000 dollars) ..... *** *** *** *** *** ·Unit value (per ton~ ...... *** *** *** *** *** Share of tQtal HR: quantity (percent) ...... *** *** *** *** *** Mic;roalloy bars and rods: Quantity (short tons) ..... *** *** *** *** *** Value ($1,000) ..... *** *** *** *** *** Unit value (per ton) ...... *** *** *** *** *** Share of subtotal lead: quantity (percent) ...... *** *** *** *** *** Coiled rods with diameters between 0.5-0.74 inch: Quantity (short tons) ..... *** *** *** *** *** Value (l,000 dollars) ..... *** *** *** *** *** Unit value (per ton) ...... *** *** *** *** *** Share o~ total HR: quantity (percent) ...... *** *** *** *** *** Source: ~ompiled from data submitted in response to questionnaires of the U.S. Internatiortal Trade Commission. U.S. Producers' Inventories l).S. producers' inventories of subject special quality carbon and alloy steel products remained relatively low during the period of investigation, increasing from 1989 tQ 1991, and then decreasing during January-March 1992 (table 10). As a share of U.S. producers' total shipments during the preceding year, inventories of subject special quality carbon and all9y steel bars and rods increased from 11.2 percent as of December 31, 1989, to 12.7 percent as of December 31, 1990, and decreased to 12.3 percent at yearend 1991. 1-55 Table 10 Special quality carbon and alloy steel products: End-of-period inventories of U.S. producers, by products, 1989-91, January-March 1991, and January-March 1992 . Item 1989 1990 1991 Jan -Mar,-- 192t · B92 Quantity (short tons) Subject s~ecial-quality: Semifinished: Carbon *** *** *** *** *** Alloy . *** *** *** *** *** Total *** *** *** *** *** Cut bars and rods: Carbon *** ***. *** *** *** Alloy . *** *** *** *** *** Total *** *** *** *** *** Free-machinin~: Semif inishe : Carbon *** *** *** ***• *** Alloy . . *** *** *** *** *** Total *** *** *** *** *** Bars· and rods: Carbon *** *** *** *** *** Alloy . *** *** *** *** *** Total .... *** *** *** *** *** All s~ecial-quality: Semifinished: Carbon *** *** *** *** *** Alloy . *** *** *** *** *** Total *** *** *** *** *** Bars and rods: Carbon *** *** *** *** *** Alloy . *** *** *** *** *** Total *** *** *** *** *** Ratio to total shipments (percent) Subject s~ecial-quality: Semifin shed: Carbon ..... 12.2 9.2 10.6 9.4 8.4 Alloy . . . . . . to·~ 9,4 9,6 10,~ ~·9Average . . .. 1. 9.3 ro.3 9. . 8 Cut bars and rods: Carbon ll.4 12.8 12.2 13.7 11.9 "Alloy to·~ H·4 t2·3 H·3 HJAverafe . 1. . . 7 2.3 .2 Free-machin n~: Semifinishe : Carbon 18.1 15.0 15.1 20.7 11.4 Alloy 34.3 20 1 8 28,7 34.t 17,3 Average .. 18.8 15.2 15.5 21. 11.6 Bars and rods: Carbon 14.2 13.8 15.8 14.8 10.8 Alloy p.2 ~t·l 23,1 15,2 26,9 . Average .... 4.2 .2 16.o 14.8 11.2 All s~ecial-quality: Sem finished: Carbon 12.8 10.0 11.0 10.4 8.7 Alloy t0,7 9,~ 9,9 tl,O 10,0 Average .. 2.1 9. 10.1 o.6 9.o Bars and rods: Carbon 7.2 9.3 8.6 8.7 8.4 Alloy 10,6 12,2 12,1 11,6 12,9 Average 7.8 9.9 9.2 9.3 9.2 Note.--Ratios are calculated using data of firms supplying both numerator and denominator information. Part-year inventory ratios are annualized. Source: Com~iled from data submitted in response Internationa Trade Commission. to· questionnaires of t.he U.S. I-56 U.S. Producers' Employment and Vagas The average number of production and related workers producing all special quality carbon .and alloy steel products for the p~oducers that provided· employment data decreased from 6,497 in 1989 to 6,438. in 1990, or by 0.9 percent, and decreased to 6,337 in 1991, or by 1.6 percent (table 11). The averag~ hourly wage for production and related workers producing all special quality carbon and alloy steel products increased from $16.14 in 1989 to $16.24 in 1990 and to $16.47 in 1991. Most firms reported that production and related workers producing special quality semifinished and hot-rolled carbon and alloy steel products were represented by the United Steelworkers of America, and those workers accounted for *** percent of total reported subject product production and related workers. 67 The following firms reported some form of labor reductions : 68 * * * * * * * 67 Production and related workers at *** are not represented by a union. 68 ***· I-57 Table 11 Average number of U.S. production and related workers producin~ special-quality steel products, hours worked, 1 w~es and total compensation pa d to such employees, and hourly wages, pro uctivity, and unit production costs, 2 by products, 1989-91, January-March 1991, and January-March 1992 3 Item 1989 . 1990 1991 Nurn er o production and workers CPRYs) Subject seecial-quality: Semif im.shed: Carbon 1, 773 1,952 1,817 1,509 1,855 Alloy . . . . . . 1,092 1,078 895 1,017 934 Carbon and alloy 2,865 3,030 2, 712 2,526 2,789 Cut bars and ·rods: Carbon 2,344 2,256 2,062 2,026 2,128 Alloy . . . . . . 1,122 1,205 1,261 1,154 1,003 Carbon and alloy 3,466 3,461 3,323 3,180 3, 131 Free-machinin~: Semifinishe : Carbon 624 645 528 471 565 Alloy ..... 46 34 31 5~! 30 Carbon and alloy 670 679 559 595 Bars and rods: Carbon 1;547 1,464 1,321 1,293 1,548 Alloy . . . . . . 82 62 62 64 1,68~Carbon and alloy 1,629 1,526 1,383 1,357 All slecial-quality: Sem finished: Carbon 2,032 2,255 2,075 1,730 2,135 Alloy . ~,133 ~,1ot 9p 1,045 3,68~Carbon and alloy ,165 ,36 2,9 8 2, 775 Bars and rods: Carbon 4,998 4,856 4,680 4,515 4,881 Alloy . . . . . . 1,499 1,582 l,65Z 1,525 1,415 Carbon and alloy 6,497 6,438 6, Bz 6,540 6,296 Hours worked by PRWs (1,000 hoursl Subject seecial-quality: Semifinished: . Carbon 3,471 3,828 3,379 772 946 Alloy . . . . . . 2,198 2,31~ 1,754 528 486 Carbon and alloy 5,669 6,14 5, 133 1,300 1,432 Cut bars and rods: Carbon 4,894 4,810 4,497 1,096 1,200 Alloy . . . . . . 2, 271 2,530 2,403 599 560 Carbon and alloy 7,165 7,340 6,900 1,695 l,760 Free-machinin~: Semifinishe : Carbon 1,347 1,391 1,101 257 342 Alloy . 75 77 54 9 19 Carbon and alloy 1,422 1,468 1,155 266 361 Bars and rods: Carbon 2' 94.0 2,943 2,365 630 791 Alloy . . . . . . 161 135 ll8 34 30 Carbon and alloy 3,101 3,078 2,483 664 821 All slecial-quality: Sem finished: Carbon 4,181 4,610 4,025 916 1,155 Alloy . 2,~6~ ~,390 1,805 536 504 Carbon and alloy 6, 4 ,000 5,830 1,452 1,659 Bars and rods: Carbon 10,334 10,265 9,629 2,360 2,616 Alloy ...... 3 0~6 3 3p ~ 159 793 3j3~Carbon and alloy 13:~~0 13:2"'6 r:: 788 3,1S3 --Continued on next page. I-58 Table 11--Continued Average number of U.S. production and related workers producini special-quality steel ·products, hours worked, 1 w~es and total compensation paid to such employees, and hourly wages, pro uctivity, and unit production costs, 2 by products, 1989-91, January-March 1991, and January-March 1992 3 Item 1989 1990 1991 Jan -Mar,-- I99t !992 Wages paid to PR\.ls Cl. 000 dollars) Subject slecial-quality: Semifin shed: Carbon 51,624 54,726 46,327 10,540 14,043 Alloy ...... 32,005 33,038 25,885 8,054 ' ' 7, 337 .> Carbon and alloy 83,629 87,764 72,212 18,594 21, 380 Cut bars and rods: Carbori 80,132 79,355 72. 612 17,627 . 20, 244 Alloy ...... 35,473 41,308 39,H4 9,924 9,350 Carbon and alloy 115,605 120,663 112,6 27,551 29,594 Free-machinina: Semif inishe : Carbon 20,508 21,367 17,518 4,124 5,752 Alloy ...... 1,123 1,159 820 142 29~ Carbon and alloy 21,631 22,526 18,338 4,266 6,04 Bars and rods: Carbon I 51,413 52,072 43,159 11,007 14, 119 Alloy ...... 4,249 3,956 4,054 1,161 95~ Carbon and alloy 55,662 56,028 47,213 12,168 l5,01 All slecial-quality: Sem finished: Carbon . 62,498 66,849 56,752 12,889 17,647 Alloy ...... 33,039 34,132 26,650 8,182 ~,60tCarbon and alloy 95,537 l00,981 83,402 21,071 2,25 Bars and rods: Carbon 168,678 167,344 158,933 38,314 44,165 Alloy ...... 46 919 53 334 51 703 12:900 12:693 Carbon and alloy 215: 597 220:618 210'.636 51 214 56 858 Total comlensation paid to PRWs Subject slecial-quality: ( , 000 dollars) Semifin shed: Carbon I 80, 711 88,219 82,712 18,426 23,969 Alloy· ...... ·. 50,002 51,991 40,6p 18,53i 11,506 Carbon and alloy . 130. 713 146,210 123,3 7 3 ,95 35,475 Cut bars and rods: Carbon I 111,400 109,767 103,469 25,063 28,894 Alloy ...... 50,231 56,49d 55,t26 p.805 13,29~ Carbon and alloy 161,631 166,26 159,95 8,868 42,18 Free-machinina: Semifinishe : Carbon 32,180 33,480 28,733 6,695 9,136 Alloy ..... 1,791 l,~84 1,331 231 454 Carbon and alloy 33. 971 35,64 3o,o64 6,926 9,590 .Bars and rods: Carbon 78,663 79,123 68,803 17,470 22,124 Alloy ...... 6,573 6,083 6,531 l,~61 l,50t Carbon and alloy 85,236 85,206 75,334 19,31 23,63 All slecial-quality: Sem finished: Carbon . 97,809 107,372 99,863 22,242 29,693 Alloy . ... 51,660 53,6t3 41,918 12,~41 11,923 Carbon and alloy 149,469 161,0 5 141, 781 34, 83 41,616 Bars and rods: Carbon I . 239,544 238,301 234,430 56,104 66,306 Alloy . . . . . . 68 204 t4 963 75 418 18:6P 18:644 Carbon and alloy 301:148 3-3:264 30§:848 24 z 2 84 950 --Continued on next page. I-59 Table 11--Continued Average number of U.S. production and related workers producin~ special-quality steel products, hours worked, 1 w~es and total compensation paid to such employees, and hourly wages, pro uctivity, and unit production costs, 2 by products, 1989-91, January-March 1991, and January-March 1992 3 Item 1989 1990 1991 Jan, -Mar. - - 1991 1992 Subject slecial-quality: Semifin shed: Hourly wages paid to PRWs Carbon ..... $14.87 . $14.30 $13.71 $13.65 $14.84 Alloy . . . . . . 14,56 14,26 14,76 15,25 15,10 Carbon and alloy 14.75 14.28 14.07 14.30 14.93 Cut bars and rods: Carbon ..... 16.37 16.50 16.15 16.08 16.87 Alloy . . . . . . 15,62 16,33 16,55 16,SZ l~·ioCarbon and alloy 16.13 16.44 16.29 16.25 1 . 1 Free-machinina: Semif inishe : Carbon . 15.22 15.36 15.91 16.05 16.82 Alloy . 14,9t 15,05 . 15, 19 15,08 15,42 Carbon and alloy 15.2 15.34 15.88 16. 4 16.75 Bars and rods: Carbon 17.49 17.69 18.25 17.56 17.94 Alloy ...... 26,39 29,30 34,36 34,15 31,tO Carbon and alloy 17. 95 18.20 19.0l 18.41 18. 5 All slecial-quality: Sem finished: Carbon 14.95 14.50 14.10 14.07 15.28 Alloy . . 14,5~ 14,~8 14,~6 15,26 15,09 Carbon and alloy 14.8 14. 3 14. 1 14.51 15.22 Bars and rods: Carbon ..... 16.32 16.30 16.51 16.23 16.88 Alloy ...... Carbon and alloy 15:51 16 14 16:06 16 24 16:37 16 4Z 16:2t16 2 16:55 1~ SI Hourly total compensation paid to PRWs Subject stecial-quality: Semifin shed: Carbon ..... $23.25 $23.05 $24.48 $23.87 $25.34 Alloy . . . . . . 2~·05 22,44 23,19 2~.p P·6~Carbon and alloy 2 . 6 . 22. 82 24.04 2 . 1 4.7 Cut bars and rods: Carbon ..... 22.76 22.82 23.01 22.87 24.08 Alloy . . . . . . 22,~g 22,33 23,59 23,05 23,~4 Carbon and alloy 22. 22.65 23. 7 22.93 23. 7 Free-machinina: Semifinishe : Carbon· 23.89 24.07 26.10 26.05 26. 71 Alloy ... p.8a 23,~~ ~4,65 25,6t 23,89 Carbon and alloy 3.89 24. 6.03 26.o 26.57 Bars and rods: Carbon 26.76 26.89 29.09 27.86 28.11 Alloy . : : : : : 40,83 45,06 55,35 54,~4 50,23 Carbon and alloy 27.49 27.68 30.34 29. 5 28.92 All stecial-quality: Sem finished: Carbon . . 23.39 23.29 24.81 24.28 25. 71 Alloy . . P·P 22,46 23,22 23,0~ 23,81Carbon and alloy 3. 8 23.01 24.32 24. 25. Bars and rods: Carbon 23.18 23.21 24.35 23.77 25.35 Alloy . : : : : : ~~:82 ~~:8~ 2~:83 23:50 24:f9Carbon and alloy ~ 22 2~ zo 25 1 --Continued on next page. 1-60 Table 11--Continued Average number of U.S .. production ~nd related workers producin$ special-quality steel products, hours worked, 1 wages and total compensation paid to such employees, and hourly wages, pro<fuctivity, and unit production costs, 2 by products, 1989-91, January-March 1991, and January-March 1992 3 Item Subject special-quality: Semifinished: . Carbon Alloy . . . . . . Carbon and alloy. Cut bars and rods: Carbon . Alloy ..... . Carbon and alloy Free-machining: Semifinishea: Carbon Alloy . Carbon and alloy Bars and rods: Carbon .. Alloy . . . . . . Carbon and alloy All special-quality: · Semif inished: Carbon . Alloy ..... . Carbon and alloy Bars and rods: Carbon Alloy .... Carbon and alloy Subject special-quality: Semifinished: Carbon . Alloy . . . Carbon and alloy Cut bars and rods: Carbon Alloy ..... . Carbon at\d alloy Free-machining: Semifinished: Carbon Alloy ... Carbon and alloy Bars and rods: Carbon Alloy ..... . Carbon and alloy All special-quality: Semi finished: Carbon . Alloy ..... . Carbon and alloy Bars and rods: Carbon Alloy .... Carbon and alloy --Footnotes on next page. 1989 1990 1991 Ja~ -Mar.-- 19 t 1992 Productivity {short tons per hour) 0.548 .358 .475 .286 .333 .302 .562 .272 .548 .259 .175 .255 .558 .356 .487 .349 .313 .341 $42.43 63.49 48.59 80.45 66.42 75.34 43.63 103.19 134. 90 104.22 41.94 64.07 47.62 66.75 71. 77 67.82 0.531 .366 .46 .311 .335 .320 .559 .2sz.54 .274 .190 .271 .542 .363 .4~1 .357 .319 .347 0.521 .371 .470 .286 .295 .289 .533 .279 .522 .266 .166 .262 .522 .368 .474 .338 .283 .324 0.502 ·i36 . 35 .266 .257 .263 .496 .284 .490 .218 .101 .212 .500 .335 .439 .305 .248 .290 Unit labor costs (per short ton) $43.40 61.22 48.65 74.00 66.59 71.24 43.01 61.84 47.87 65.31 70.73 66.55 $47.01 62.52 Sl.20 81.05 78.65 so.16 4 .88 109.38 148.00 ll0.47 sl.27 72.42 84.34 75.04 $47.50 70.71 54. 78 87.14 89.69 88.06 52.53 91.~~53. 127.98 236.15 . 130.48 48.61 70.98 54.91 78.43 94,87 82.04 0.548 .409 .sor .300 .321 .307 .5 2 .249 .199 .248 .557 .403 .s10 .338 .310 .332 $46.21 57.93 49.45 81.21 73.83 78.66 44.51 95,42 45.57 112.29 119.59 112.48 46.11 58.73 49.14 75.36 78.22 75.98 I-61 --footnotes from table on previous pages. 1 Includes hours worked plus hours of paid leave time. 2 On the basis of total compensation paid. 3 Firms providing employment data accounted for *** percent of reported total U.S. shipments (based on quantity) in 1991. Note.--Ratios are calculated using data of firms supplying both numerator and denominator information. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. Financial Experience of U.S. Producers *** firms, 69 accounting for ***percent of U.S. production of special quality carbon and alloy steel products in 1991, supplied income-and-loss data on their operations related to special quality carbon and alloy hot-rolled steel bars and rods and semifinished products, and on their overall establishment operations. In this particular investigation, financial data for most transferred semifinished products were not collected. Therefore, the revenue and cost data for semif inished products represent primarily trade sales and associated costs. The cost data requested were the actual costs incurred for the products sold, determined in accordance with generally accepted accounting principles. Therefore, the level of sales and costs in the financial data may substantially under-represent total values and costs if transfers of all semifinished products were included. Assets, capital expenditures, and research and development expenses are allocated to the extent practical to the various products. Subject Special Quality Steel Products· Semiiinished Carbon.--*** firms, 70 accounting for*** percent of production of special quality carbon steel products in 1991, supplied income-and-loss data. These data are presented in table 12. None of the responding firms reported their internal consumption of this product; therefore, almost all reported net sales were trade sales. Net sales rose by 23 percent from 1989 to 1990 and then fell by 28 percent from 1990 to 1991. During January-March 1992, such sales remained at almost the same level when compared to the corresponding period in 1991. Aggregate operating loss margins rose from *** percent in 1989 to *** percent in 1991. Such loss margins remained at about *** percent during January-March 1991 and 1992. 69 These firms are *** 70 These firms are *** I-62 Table 12 Income-and-loss experience of U.S. producers on their operations producing subject special quality carbon steel semifinished products, fiscal years 1989-91, January-March 1991, and January-March 1992 1 Item Net sales . . . . . . . Cost of goods sold Gross profit or (loss) Selling, general, and administrative expenses Operating (loss) . . . . . Interest expense . . . . Other inco~e or (expense), net ... ·...... . Net (loss) before income taxes ........ . Depreciation and amortiza- tion Cash flow2 . . . . . . . . Cost of goods sold Gross profit or (loss) Se.lling, ·general, and administrative expenses Operating (loss) . . . . Net (loss) .before income taxes ..... Operating losses Net losses Data . . . . . . 1 These firms are ***· 1989 141,741 139.642 2,099 *** *** *** *** (5,516) 6.976 1.460 98.5 1. 5 *** *** (3. 9) 4 4 6 1990 Value 174,810 178.638 (3,828) *** *** *** *** (14,301) 7.852 (6.449) Ratio to 102.2 (2.2) *** *** (8.2) Number 5 6 6 1991 January-March-- 1991 1992 Cl.000 dollars) 126,597 38,032 37 '967 143.703 40.858 41.314 (17,106) (2,826) (3,347) *** *** *** *** *** *** *** *** *** *** *** *** (29,075) (6,764'> (6,341) 8.322. 2;140 2.190 (20.753) (4.624) (4.151) net sales (percent) . 113.5 107.4 108.8 (13.5) (7.4) (8.8) *** *** *** *** *** *** (23.0) Cl7.8) (16. 7) of firms reporting 6 5 5 6 5 7 7 7 7 z Cash flow is defined as net income or loss plus depreciation and amortization. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. I-63 Alloy.--*** firms, 71 accounting for*** percent of production of special quality alloy steel products in 1991, supplied income-and-loss data. These· data are presented in table 13. All reported net sales were trade sales. Net sales rose by 13 percent from 1989 to 1990 and then dropped by 19 percent from 1990 to 1991. Such sales fell by 28 percent during January-March 1992 compared with the corresponding period in 1991. Aggregate operating loss margins rose from*** percent in 1989 to *** percent in 1991. Such loss margins increased from *** percent during January-March 1991 to ***percent in January-March 1992. Carbon and alloy co.mbined.--Data on subject carbon and alloy semifinished product operations combined are presented in table 14. Net sales rose by 20 percent from 1989 to 1990 and then declined by 24 percent from 1990 to 1991. Such sales further fell by 11 percent from January-March 1991 to January-March 1992. The responding firms suffered aggregate operating losses in each reporting period. Aggregate operating loss margins rose from 4.1 percent in 1989 to 18.4 percent in 1991. Such loss margins increased from 11.0 percent during January-March 1991 to 14.2 percent in J8anuary-March 1992. Cu~ bars and rods Carbon.--*** firms, 72 accounting for*** percent of production of special quality carbon steel products in 1991, supplied income-and-loss data. These data are presented in table 15. Net sales rose about 'l percent from 1989 to 1990 and then fell by 10 percent from 1990 to 1991. Such sales increased by 11 percent during January-· March 1992 compared with the corresponding period in 1991. Aggregate operating income margins declined from 10.3 percent in 1989 to 5.3 percent in 1991. Such income margins increased from 2.9 percent during January-March 1991 to 7.8 percent in January-March 1992. Alloy.--*** firms, 73 accounting for*** percent of production of special quality alloy steel products in 1991, supplied income-and-loss data. These data are presented in table 16. Net sales rose by 3 percent from 1989 to 1990 and then dropped by 12 percent from 1990 to 1991. Such sales declined by 4 percent during January- March 1992 compared with the corresponding period in 1991. Aggregate·· operating income margins declined from 5. 5 percent in 1989 to l .·1 p13rcent in 1991. Such income margins increased from 1.5 percent during January-March i991 to 2.8 percent in January-March 1992. Carbon and alloy co.mbined.--Data on subject carbon and alloy cut bar and rod operations combined are presented in table 17. Net sales slightly · increased by 1 percent from 1989 to 1990 but declined by 11 percent from 1990 to 1991. Such sales rose by 3 percent from January-March 1991 to January- March 1992. Aggregate operating income margins declined from 8.2 percent in 1989 to 3.5 percent in 1991. Such income margins increased from 2.2 percent during January-March 1991 to 5.4 percent in January-March 1992. 71 These firms are *** 72 These firms are ***· 73 These firms are *** 1-64 Table 13 Income-and-loss experience of U.S. producers on their operations producing subject special quality alloy steel semifinished products, fiscal years 1989-91, January-March 1991, and January-March 19921 J: BnYsu;;:x-HBis=h- - Item Net sales . . . . . . . Cost of goods sold Gross profit or (loss) Selling, general, and administrative expenses Operating (loss) . . . . Interest expense . . . . Other income or (expense), net ......... . Net (loss) before income taxes ........ . Depreciation and amortiza- tion Cash flow2 ....... . Cost of goods sold Gross profit or (loss) Selling, general, and administrative expenses Operating (loss) . . . . Net (loss) before income taxes ..... Operating losses Net losses Data 1 These firms are ***· 1989 84,751 82.551 2,200 *** *** *** *** (5,881) 5.407 (474) 97.4 2.6 *** *** (6.9) 3 3 4 1990 Value 95,926 96.345 (419) *** *** *** *** (11,632) 5.658 (5.974) Ratio to 100.4 (0.4) *** *** <12 .1> Number 4 4 4 1991 1991 1992 Cl. 000 dollars) 77 ,877 26,087 18,816 81. 746 24.954 19.516 (3,869) 1,133 (700) *** *** *** *** *** *** *** *** *** *** *** *** (13,914) (2,079) (2,748) 5.366 1.524 1.233 (8.548) (555) (1. 515) net sales (percent> 105.0 95.7 103.7 (5.0) 4.3 (3. 7J *** *** *** *** *** *** <17.9) (8.0) <14.6' of firms reporting 5 4 4 5 4 5 5 4 5 2 Cash flow is defined as net income or loss plus depreciation and amortization. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. I-65 Table 14 Income-and-loss experience of U.S. producers on their operations producing subject special quality carbon and alloy steel semifinished products, fiscal years 1989-91, January-March i991, and January-March 1992 Januarx-March- - Item Net s~les . . . . . . . Cost of goods sold Gross profit or (loss) Selling, general, and administrative expenses Operating (loss) . . . . Interest expense . . . . Other income or (expense), net ......... . Net (loss) before income taxes . . . . . . ; . . Depreciation and amortiza- tion Cash flow 1 . • . . . .• . • Cost of goods sold Gross profit or (loss) Selling,_general, and administrative expenses Operating (loss) . . . . Net (loss) before income taxes .. • ... Operating losses Net losses Data 1989 226,492 222.193 4,299 13. 656 (9,357) 2;184 . 144 (11, 397) 12.383 986 98.l 1.9 6.0 (4.1) (5.0) 4 4 6 1990 1991 1991 1992 Value ( 1. 000 dollars) 270,736 204,474 64,119 56,783 274.983 225.449 65.812 60.830 (4,247) (20,975) (l,693) (4,047) 17.591 16.651 5.348 4.008 (21,838) (37,626) (7,041) (8,055) 3,958 3,310 1,365 773 (137) (2.053) (437) (261) (25,933) (42,989) (8,843) (9,089) 13.510 13.688 3,664 3.423 (12 .423) (29. 301) (5.179) (5.6?6> Ratio to net sales (percent) 101.6 110.3 102.6 107.1 (1. 6) (10.3) (2.6) (7 .1) 6.5 8.1 8.3 7.1 (8.1) (18.4) (11. 0) (14.2) (9.6) (21.0) (13. 8) (16. 0) Number of firms reporting 6 6 5 5 6 6 .5 7 6 7 7 7 1 Cash flow is defined as net income or loss plus depreciation and amortization. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. Table 15 1 Income-and-loss· experience of u:s. producers 'on their ·opetations producing·subject special quality carbon steel cut bars and. rods; f~sca.\ Y!ai:s i.989-91·, January_'-Marcli_ 1991, and January-March 1992 1 · t98~· 1990 Januan:-March- - Item Net sales . tost of g6o~s sold·-·. Gross profit . . . . Selling, gen~ral, and administrative expenses Operating income Startup or shutdown expense Interest expense . . . . Other expense-,. net . ;· . . Net income or (loss) before income taxes . . . . . . Depreciation and amortiza- tion-· .. ·Cash· flow2 Cost of goods sold ·Gross profit .. Selling, general, and administrative expenses Operating income . . . . Net income or (loss) before income taxes ·. Operating losses Net losses · . Data .... 1 These °firms are ***· .802,663 682,915 119,748 .. 31.227 82,521 0 3,900 1.011 77,610 l6,Q32 93,642 85.l 14.9 4.6 10.3 9,Z 3 3 12 .. Value 807,301 Z02;Z26 101,573 -42,112 59,457 540 8,694 ·5·,994 44,229 l~ I gz~. -· 6)., 102 .. Ratio~ to· 87.4 12.6 5.2 7.4 5,S Number s 5 12 ·1991 . 1991 .. 1992 (1.000 dollars) 726,167 134,794 149,452 .642,§50 12!. z93'"' 129,Z86 80,317 13,001 19~666 41,949 9,135' . -· .. 8,046 38,368 3,866 11,620 870 '236 382 11,223 2,472 2,496 15,634 ·2,226 3,240 10,641 (l,Q68) . 5,502 l9,J48 4,431 5,024 29,9§9 J,J63 10,226 .... ~. ~' . ' net sales (percent) 88.9 90.4 86.8 11.1'. 9.6 13.2 5.8 6.8 5.4 5.3 2.9 7'. 8 1. 5 (0.8) 3.7 of firms reporting 6 :· < 6 4 6 5 4 12 8 8 2 . Cash f_low is de~ined as net income or loss plus de_preciat~on and amortization. Source: Compiled from data submitted in response to questionnaires of the·U.S. International Trade Commission. I-67 Table 16 Income-and-loss experience of U.S. producers on their operations producing subject special-quality alloy steel cut.bars and rods, fiscal years 1989-91, January-March 1991, and January-March 1992 1 Januai;:~-March-- Item Net sales .. Cost of goods sold Gross profit Selling, general, and administrative expenses Operating income Startup or shutdown expense Interest expense . . . . . Other income or (expense), net .......... . Net income or (loss) before income taxes . . . . . . Depreciation and amortiza- tion Cash flow2 . . . . . . . . Cost of goods sold Gross profit Selling, general, and administrative expenses Operating income . . . . Net income or (loss) before income taxes . . . . . . Operating losses Net losses Data . . . . . . 1 . These firms are ***· . 1989 594,424 533,432 60,992 2§.!!10 32,582 0 6,263 4.508 30,827 20,844 51.6Zl 89.7. 10.3 4.8 5.5 5,2 1 3 9 1990 . Value 609,373 545,491 63,882 3~.142 30,737 70 12,699 (5,870) 12,098 22,140 34,838 Ratio to 89.5 10.5 5.4 5.0 2,0 Number 4 5 10 . 1991 1991 1992 Cl.000 dollars) 534,198 136,834 131,587 496,0lZ 126,984 121,120 38,181 9,850 10,467 ~2,544 z.s22 §,ZZ8 5,637 1,994 3,689 157 44 - 61 11,765 3,216 2, 771 (10, 291) (4.164) (2,799) (16,576) (5,430) (1,942) 23,997 6,028 5,530 Z,421 598 3,588 net sales Cpercent> 92.9 92.8 92.0 7.1 7.2 8.0 6.1 5.7 5.2 1.1 1. 5 2.8 (3,1) (4.0) Cl. 5) of firms reporting 5 4 5 6 6 5 10 10 10 2 Cash flow is defined as net income or loss plus depreciation and amortization. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. I-68 Table 17 Income-and-loss experience of U.S. producers on their operations producing subject special quality carbon and alloy steel cut bars and rods, fiscal years 1989-91, January-March 1991, and January-March 1992 Item Net sales .. Cost of goods sold Gross profit Selling, general, and administrative expenses Operating income . . . . Startup or shutdown expense Interest expense . . . . . Other income or (expense), net .......... . Net income or (loss) before income taxes . . . . . . Depreciation and amortiza- tion Cash flow 1 . • • • • • . • Cost of goods sold Gross profit Selling, general, and administrative expenses Operating income . . . . Net income or (loss) before income taxes . . . . . . Operating losses Net losses Data 1989 1,397,087 l,21§,341 180,740 65,637 115,103 0 10,163 3,497 108,437 36,876 142,313 87.1 12.9 4.7 8.2 7,8 3 3 13 1990 Value 1,416,674 1,251,219 165,455 12.261 90,194 610 21,393 Cll. 864) 56,327 39,616 95,943 Ratio to 88.3 11. 7 5.3 6.4 4,0 Number 5 6 14 1991 January-March- - 1991 1992 Cl.000 dollars) 1,260,365 271,628 281,039 1,141,861 248,771 220,906 118,498 22,851 30,133 .14,493 16,991 14,824 44,005 5,860 15,309 1,027 280 443 22,988 5,688 5,267 (25,925) (6,390) (6,039) (5,935) (6,498) 3,560 43,345 10,459 10,554 31,410 3,961 14,114 net sales (percent) 90.6 91.6 89.3 9.4 8.4 10.7 5.9 6.3 5.3 3.5 2.2 5. Li (0.5) <2.4) 1.3 of firms reporting 6 4 5 6 5 5 14 10 10 1 Cash flow is defined as net income or loss plus depreciation and amortization. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. I-69 Semifinished and cut: bars and rods combined74 The key data on subject carbon and alloy semifinished product and cut bar and rod operations combined are presented in the following tabulation: J anuar~ -~arch - - llfil!l 1989 1990 1991 llli "lill Net sales (1,000 dollars) ............ 1,623,579 1,687,410 1,464,839 335,747 337,822 Operating income or (loss) (1,000 dollars) ............ 105,746 68,356 6,379 (1,181) 7,254 Operating income or (loss) margins (percent) ............ 6.5 4.1 0.4 (0.4) 2.1 Free-Machining Steel Products 75 Semifinished Financial data were not collected on semifinished carbon and alloy lead and bismuth, or non-lead/bismuth free-machining steel products in this investigation. However, in investigations Nos. 701-TA-314-317 and 731-TA- 552-555 (Preliminary), the Commission collected data on semifinished carbon lead and bismuth free-machining operations, which are discussed below. Carbon.--*** firms, 76 accounting for*** percent of production of special quality carbon steel products in 1991, supplied income-and-loss data. These data are presented in table 18. *** Table 18 Income-and-loss experience of U.S. producers on their operations producing free-machining semifinished carbon steel lead and bismuth products, fiscal years 1989-91 * * * * * * * 74 Net sales of semifinished products include primarily trade sales only. These combined data exclude transfers t9 products other than bars and rods. 75 Aggregate data on all free-machining operations (i.e., semifinished plus bars and rods) are presented in app. table G-64. · 76 These firms are *** ·I-70 Bars and rods Carbon .. --*** firms, 77 accounting for *** percent of _production of spec·ial quality carbon steel products in 1991, supplied iricome-and-loss data. These data are presented in table 19. Net sales declined by 15 percent from 1989 to 1991, and operating income margins fell from 6.9 percent in 1989 to 0.4 percent.in 1991. Alloy.--*** firms, 78 accounting for*** percent of production of special quality alloy steel products in 1991, supplied income-and-loss data. These data are presented in table 20. Net sales rose by 7 percent from 19a9 to 1990 and then dropped by 23 percent from 1990 to 1991. In 1990 when sales peaked, these firms reported an operating income margin of 0.3 percent compared with operating loss margins of 1.1 percent in 1989 and 4.1 percent in 1991. · Carbon and alloy combined.--Data on free-machining carbon and alloy bar and rod operations combined are presented in table 21. Net sales declined by 15 percent from 1989 to 1991. Aggregate operating income margins fell from 5.8 percent in 1989 to 2.6 percent in 1990. In 1991, the responding firms suffered an operating loss margin of 0.2 percent. All Special. Quality Steel Products 79 Semif inished · Carbon.--*** firms, 80 accounting for*** percent of production of special quality carbon steel products in 1991, supplied income-~nq.-loss data. These·data are presented in table 22. Net sales rose by 24 percent from 1989 to 1990 and then dropped by 25 percent from 1990 to 1991. *** Alloy.--*** firms, 81 accounting for*** percent of production of special quality alloy steel products in 1991, supplied income-and-loss data. These- data are presented in table 23. Net sales rose by 13 percent from 1989 to 1990 and then fell by 19 percent from 1990 to 1991. *** · Carbon and alloy combined.--Data on semifinished special quality carbon and alloy steel product operations combined are presented in table 24. Net sales rose by 20 percent from 1989 to 1990 and then declined by 23 percent from 1990 to 1991. Aggregate operating loss margins jumped from 4.2 percent in 1989 to 17.7 percent in 1991. 77 These firms are ***· 78 These firms are ***· . 79 Aggregate data on all special quality steel product operations (i.e., semifinished plus bars and rods) are presented in app. table G-65. 80 These firms are *** 81 These firms are *** I-71 Table 19 Income-and-loss experience of U.S. producers .. on their operat.ions producing .. · free-machining carbon steel bars and rods, fiscal years 1989-91 1 Item Net sales . . . . . . . Cost of goods sold Gross profit or (loss) Selling, general, and administrative expenses Operating income or (loss) Cost of goods sold Gross profit or (loss) Selling, general, and administrative expenses Op~rating income or (lo~s) Operating losses Data . . . . . . 1 These firms are ***· 1989 478,389 424.702 53,687 20.882 32.805 88.8 11. 2 4.4 6.9 3 9 1990 1991 Value Cl.000 dollars) 448,503 ·'· 406,561 413·. 298 . 383.676 35,205 22. 8_85 21.553 21.144 13.652 1. 741 Ratfo to net sales (percent) - . . ' 92.2 94.4 7.8 5.6 4.8 5.2 3.0 0.4 Number of firms reporting 4 5 9 9 Source: Compiled from data submitted in response.to questionnaires of the U.S. International Trade Commission. I-72 Table 20 Incom~-and-lQss ,experience. of: .U.S. produC?ers on their ,operations producing free-machining a:l.loy steel: b.ar~ and rods,. ·f_iscal years 1989-911 Item Net sales . . . . . C.ost ,of goods sold· .Gross· profit or (loss) Selling, general, and administrative expenses Operating income or (loss) C~st of goods sold C~oss profit or (loss) Selling, general, arid administrative expenses Operating income or (loss) Operating losses Data . . . . 1 These firms are ***· 1989 75, 121, 72.842 2,279 3.072 (793) 97.0 3.0 4.1 (1.1) 2 .7 1990 Value Cl.000 dollars) 80,389 77.258. 3,131 2.900 231 Ratio to net sales (percent) 96.1 3.9 3.6 0.3 Number of firms reporting 2 8 1991 .62, 100 62.164 (64) .. 2.498 (2.562) 100.1 (0.1) 4.0 (4.1) 3 8 Source.: ·Compiled from data. submitted in re~pon~e to questionnaires of the U.S. International Trade Commission. · · 1-73 ·Table 21 Income-and-loss experience of U.S. producers on their operations producing free-machining carbon and alloy steel bars and rods, fiscal years 1989-91 ·Item Net sales . . . . . . . Cost of goods sold Gross profit or (loss) Selling, general, and administrative expenses Operating income or (loss) Cost of goods sold Gross profit or (loss) Selling, general, and administrative expenses Operating income or (loss) Operating losses Data . . . . 1989 553,510 497 544 55,966 23 954 32.012 89.9 10.l 4.3 5.8 3 9 1990 Value Cl.000 dollars)· 528,892 490 556 38,336 24 453 13.883 Ratio to net sales (percent) 92.8 7.2 4.6 2.6 Number of firms reporting 4 10 . 1991 468,661 445 840 22,821 . 23 642 (821) 95.l 4.9 5.0 <0.2) .. 5 10 s·ource: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. 1-74 Table 22 lncome-~nd-loss experience of U.S. producers on their operations producing special qμality carbon steel semifinished products, fiscal years 1989-911 Item Net sales . . . . . . . Cost of goods sold Gross profit or (loss) Selling; general, and administrative expenses Operating (loss) . . . . Cost of goods sold Gross profit or (loss) Selling, general, and admin~strative expenses Operating (loss) . . . . Operating losses Data . . . . . . 1 These firms are ***. 1989 148,964 147.023 1,941 *** ***· 98.7 1. 3 . *** *** 4 6 1990 Value Cl.000 dollars) 184,348 188.531 (4,183) *** *** Ratio to net sales (percent) 102.3 (2.3) *** .*** Number of firms report!rtg 5 6 1991 137,651 154.745 (17,094) *** *** 112.4 (12.4) *** *** 6 7 Source: Compiled from data submitted in response to questionnaires of the U.S. lntern~tional Trade Commission. I-75 Table 23 Income-and-loss experience of U.S. producers on their operations producing special quality alloy steel semifinished products, fiscal years 1989-91 1 Item Net sales . . . . . . . Cost of goods sold Gross profit or (loss) Selling, general, and administrative expenses Operating (loss) . . . . Cost of goods sold Gross profit ~r (loss) Selling, general, and administrative expenses Operating (loss) . . . . Operating losses Data .... 1 These firms are ***· 1989 84,751 82.551 2,200 *** *** 97.4 2.6 *** *** 3 4 1990 Value (1.000 dollars) Ratio to Number 95,926 96.345 (419) *** *** net sales 100.4 (0.4) *** *** (percent) of firms reporting 4 4 1991 77 ,877 81.746 (3,869) *** *** 105.0 (5.0) *** *** 5 5 Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. 1-76 Table 24 lncqme-and-loss ~xp~rience o~ U.S .., producers on thef.r operations producing special quality carbon and al~oy steel semifinished products' f_iscal y~ars 1989~91 . . ltem Net sales . . . . . , . Cost of goods sold Gross profit or (loss) Selling, gener~l, and a~inis~rative expenses Operating (loss) Cost of goods sold Gross profit or (loss) Selling, general, and . administrative expenses Operating (loss) . . . . Operating losses Data .... 1989 \ 233,715 229,574 4,141 13.888 (9. 747) 98.2 1. 8 5.9 (4.2) 4 6 1990 Value Cl.000 dollars) 280,274 284~876 .(4,602).· 17.863 (22.465) Ratio to net sales (percent) 101.6 (1.6)· 6.4 (8.0) Number of firms reporting 6 6 1991 215,528 236.491 (20,963) 17.096 (38.059) 109.7 (9.7) 7.9 (17. 7) 6 7 Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Comm"tssion. 1-77 Bars ·and rods Carbon.--*** firms, 82 accounting for*** percent of production of special quality carbon- steel products in 1991, supplled income-and-loss data. These data are presented in table 25. From 1989 to 1991, net sales fell by 10 percent, and operating income margins dropped from 8.6 percent to 2.6 percent. Alloy.--*** firms, 83 accounting for*** percent of production of special quality alloy steel products in 1991, supplied income-and-loss data. These data are presented in table 26. Net sales incre.ased by 3 percent from 1989 to 1990 and then fell by 12 percent from 1990 to 1991. Aggreg~te · operating income margins declined from 7.2 percent in 1989 to 2.3 percent in 1991. Carbon and alloy combined.--Daia on special quality carbon and alloy steel bar and rod operations combined are presented in table 27. Net sales slightly increased by about 1 percent from 1989 to 1990 but declined by 10 percent from 1990 to 1991. Aggregate operating income margins fell from 8.2 percent in 1989 to 2.5 percent in 1991. · Available income-and-loss dat_a on alternative "like-product" industries·' . ·• • l are presented in appendix G. Investment in Productive Facilities The value of property, plant, and equipment and total assets, along with the return on book value of fixed assets and the return on total assets are presented in tables 28A to 28C. Capital Expenditures Capital expenditures reported by U.S. producers are shown in table 29. Research and Development Expenses .Research and development expenses reported by U.S. producers are presented in table 30. 82 These firms are *** 83 These firms are *** I-78 Table 25 Income-and-loss experience of U.S. producers on their operations producing special q':1ality carbon steel bars and.rods, fiscal years 1989-91 1 Item Net sales . . . . . Cost of goods sold Gross profit or (l~ss) Selling, general, and administrative expenses Ope.rating,.incol!le or (loss) Cost 'of goods sold Gross profit or (loss) Selling_., general_, . and administrative expenses Operating income or (loss) .Operating losses i>ata . . . . 1 These firms are ***· 1989 1,797,875 1. 554. 508 243,367 88 241 155 126 86.5 13.5 4.9 8.6 2 14 1990 Value (1.000 dollars) Ratio to 1,794,045 i'. 595 I 219 198,826 94 078 104 748 net sales 88.9 11.1 5.2 5 8 (percent). Number of firms reporting 5 14 1991 1,618,354 1.484. 724 133,630 90 886 42 744 91. 7 8.3 5.6 2 6 7 14 Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. I-79 Table 26 Income-and-loss experience of U.S. producers on their operations producing special quality alloy steel bars and rods, fiscal years 1989-911 Item Net sales . . . . . . . Cost of goods sold Gross profit or (loss) Selling, general, and administrative expenses Operating income or (loss) Cost of goods sold Gross profit or (loss) Selling, general, and administrative expenses Operating income or (loss) Operating losses Data .... 1 These firms are ***· 1989 732,364· 646.612 85,752 33 215 52 537 88.3 11. 7 4.5 7.2 1 10 1990 Value (1.000 dollars) 754,392 671.005 83,387 38 853 44 534 Ratio to net sales (percent) 88.9 11.l 5.2 5.9 Number of firms reporting 4 11 1991 664,331 611. 081 53,250 38 018 15 232 92.0 8.0 5.7 2.3 5 11 Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. 1-80 Table 27 lncome-an4-loss experience of U.S. producers on their operations producing special quality carbon and alloy steel bars and rods, fiscal years 1989-91 Item Net sales . . . . . . Cost of goods sold Gross profit or (loss) Selling, general, and administrative expenses Operating income or (loss) Cost of goods sold Gr.oss profit o'r (loss) Selling, general, and administrative expenses Operating income or (loss) Operating losses Data . . 1989 2,530,239 2 I 201.120 329'119 121.456 207.663 87.0 13.0 4.8 8 2 2 15 1990 value Cl.000 dollars> 2,548,437 2.266.224 282,213 132.931 149.282 Ratio to net sales (percent) 88.9 11.1 5.2 59 Number of firms reporting 5 16 1991 2,282,685 2.095.805 186,880 128.904 57.976 91.8 8:2 5.6 2 5 6 16 Source: Compiled from data submitted in response to questionnai~es of the U.S. International Trade Commission. 1-81 Table 28A Value of assets and return on assets of U.S. producers of semif_inished steel products, fiscal years 1989-91, January-March 1991, and January-March 1992 Subject special quality: Carbon: Fixed assets: Original cost Book value Total assets 1 Alloy: Fixed assets: Original cost Book value . Total assets 1 . Carbon and alloy: Fixed assets: Original cost Book value Total assets 1 Free-machining: Carbon: Fixed assets: Original cost Book value Total assets 1 Alloy: Fixed assets: Original cost Book value . Total assets 1 . Carbon and alloy: Fixed assets: Original cost Book value . Total assets 1 • All special quality: Carbon: Fixed assets: Original cost Book value Total assets 1 Alloy: Fixed assets: Original cost Book value . Total assets 1 . Carbon and alloy: Fixed assets: Original cost Book value . Total assets 1 • Continued on next page. As of the end of fiscal ~y~e~a~r----------------------------~ As of Mar. 31-- 1989 1990 1991 1991 1992 Value (1.000 dollars) *** *** *** *** *** *** *** *** *** *** *** *** ***. *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** 494,404 537,961 561,204 570,616 564,229 300,165 319,380 318,223 327,537 315,432 315,042 382,611 347,076 387,757 347,964 *** *** *** *** *** *** *** *** *** 0 0 0 0 0 0 0 0 0 *** *** *** 43,674 46,253 44,190 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** 606,088 667,595 697,067 343,839 365,633 362,413 0 0 1-82 Table 28A--Continued Value of assets and return on assets of U.S. producers of semi.finished steel products, fiscal years 1989-91, January-March 19~1, and January-March 1992 Item · Subject spe~ial quality: Carbon: Operating return 3 Net return 4 Alloy: Operating return 3 Net return 4 . • . Carbon an~ alloy: Operating return 3 Net return 4 Free-machining: Carbon: Operating return 3 Net return~, . . . Alloy: . · Operating return 3 Net return 4 • . . Carbon and alloy: Oper4ting return3 . 4 Net return ... All special quality: Carbon: Operating return3 Net return 4 Alloy: Operating return 3 Net ~eturn 4 • . . Carbon and alloy: Operating return 3 Net return 4 • . . Continued on next page. As of the end of fiscal year- - 1989 *** *** *** *** (3.3) (4.0) *** *** *** *** *** *** *** *** *** *** (2.9) 0.0 As of Mar. 1990 1991 1991 · Return on book value of fixed assets (percent) 2 *** *** *** *** *** *** *** *** *** *** *** *** (7.4) (13. 7) (10.2) (8.9) (15.7) (12.8) *** *** ~ *** *** *** *** .- *** *** *** *** *** *** *** *** *** *** *** *** *** *** (7.3) (11. 9) 0.0 0.0 31-- 1992 *** *** *** *** (11.6) (13.1) I-83 Table 28A--Continued Value of assets and return on assets of U.S. producers of semifinished steel products, fiscal years 1989-91, January-March 1991, and January-March 1992 Item Subject special quality: Carbon: Operating return 3 Net return 4 Alloy: . Operating return 3 Net return 4 . . . Carbon and alloy: Operating return 3 Net return 4 Free-machining: Carbon: Operating return 3 Net return 4 . . . Alloy: Operating return 3 Net return 4 . . . Carbon and alloy: Operating return 3 Net return 4 . . . All special quality: Carbon: Operating return 3 Net return 4 . . . Alloy: Operating return 3 Net return 4 . . . Carbon and alloy: Operating return 3 Net return 4 .· As of the end of ~ear-- 1989 1990 Return *** *** *** *** (3.1) (3.9) *** *** *** *** *** *** fiscal As of Mar. 31-- 1991 1991 1992 on total assets (percent) 2 *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** *** (6.4) (12.7) (8.8) (10.7) (7. 7) (14.6) (11.1) (12.1) *** *** *** *** *** *** ***. *** *** *** *** *** 1 Defined as book value of fixed assets plus current and noncurrent assets. 2 Total establishment assets are apportioned, by firm, to product groups on the basis of the ratio of the respective book values of fixed assets. 3 Computed using data from only those firms supplying both asset and income-and-loss information, and as such, may not be derivable from data presented. Data for the partial-year periods are calculated using annualized income-and-loss information. 4 Defined as operating income or loss divided by asset value. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. 1-84 Table 28B Value of assets and return on assets of U.S. producers of subject special quality cut bars and rods, fiscal years 1989-91, January-March 1991, and January-March 1992 1 Defined as book value of fixed assets plus current and noncurrent assets. 2 Total establishment assets are apportioned, by firm, to product groups on the basis of the ratio of the respective book values of fixed assets. 3 Computed using data from only those firms supplying both asset and income-and-loss information, and as such, may not be derivable from data presented. Data for the partial-year periods are calculated using annualized income-and-loss information. 4 Defined as operating income or loss divided by asset value. 5 Negative figure, but less than significant digits displayed. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. I-85 Table 28C Value of assets and return on assets of U.S. producers' establishments wherein all special quality steel products are produced, fiscal years 1989-91, January-March 1991, and January-March 1992 Item All products of the establish- ment: Fixed assets: Original cost Book value . Total assets 1 . Bars and Rods: Free-machining: Carbon: Fixed assets: Original cost Book value . Total assets 2 • Alloy: Fixed assets: Original cost Book value . Total assets 2 . Carbon and alloy: Fixed assets: Original cost Book value . Total assets 2 . All special quality: Carbon: Fixed assets: Original cost Book value . Total assets 2 . Alloy: Fixed assets: Original cost Book value . Total assets 2 . Carbon and alloy: Fixed assets: Original cost Book value Total assets 2 All products of the establish- . ment: ... , •.:.,:·:·operating re:tu;-n 4 '· ; · ··." .• .•..• · · · Net return 5 · .,. · · · Continued on next page. As of the end of fiscal _ye_a~r.....--------------- As of Mar. 31-- 1989 1990 1991 1991 1992 6,642,589 3,020,930 4,467,527 *** 85,353 *** *** 13,146 *** 209,276 98,499 167,718 758,625 317,829 0 421,074 196,352 0 1,179,699 514,181 0 15.2 10.9 Value Cl.000 dollars) 6,971,321 3,129,619 4, 715,055 *** 106,231 195,818 *** 14,964 35,604 257,044 121,195 231,422 832,539 340,267 0 468,321 213,932 0 7,244,779 7,155,940 3,166,215 3,220,513 4,430,014 4,712,422 224,328 98,403 161,145 28,887 12,931 25,807 253,215 111, 334 186,952 882 ,918 371, 914 0 505,876 219,057 0 l,300,860 1,388,794 554,199 590,971 0 Return on book value of fixed assets (percent) 3 7.1 2.2 (8 .8) (14.3) (5.4) (10.9) 7,326,519 3,130,459 4,497 ,971 (2.1) (7 .. 2) 1-86 Table 28C--Continued Value of assets and return on assets of U.S. ~roducers' establishments wherein all special qua;l.ity steel products are produced, fiscal years 1989-91, January-March 1991, and January-March 1992 . Item Bars and Rods: Free-machining: · Carbon: · Operating 5eturn 4 Net return ... Alloy: Operating 5eturn 4 Net return ... Carbon and alloy: Operating 5eturn4 Net return . . . All special quality: Carbon: Operating 5eturn 4 Net return Alloy: Operating 5eturn 4 Net return ... Carbon and alloy: 4 Operating 5eturn Net return . . . All products of the establish- ment: Operating 5eturn 4 Net return ... Bars and Rods: Free-inachining: Carbon: Operating 5eturn 4 Net return . . . Alloy: Operating 5eturn 4 Net return · . . . Carbon and alloy: 4Operating 5eturn Net return . . . All special quality: Carbon: Operating 5eturn4 Net return Alloy: Operating 5eturn4 Net return ... Carbon and alloy: Operating 5eturn4 Net return . . . As of the end of fiscal year- - As of Mar. 31- - ~Tw9wg9w--.--.----1~9~9-o.--.--.---1~9-9-1.--.--~ 1991 1992 Return on book value ot fixed assets (percent) *** *** 10.7 0.0 0.0 0.0 *** (1. 9) (21. 7) 0.0 0.0 0.0 *** *** 6.9 0.0 0.0 0.0 *** 23.7 9.8 0.0 0.0 0.0 21.9 16.7 3.0 0.0 0.0 0.0 33.7 21.0 7.3 0.0 0.0 0 0 Return on total assets (percent) 3 10.0 5.2 ~5.5~ ~2.9~. 7 .0 2.0 9.4 6.7 *** 10.9 8.2 *** 0.0 0.0 *** (0.8) (10.9) *** 0.0 0.0 16.4 9.1 5.6 0.0 0.0 0.0 :.Defined as book value of fixed assets plus current and noncurrent assets. ~1.0~4.5 Total establishment assets are apportioned, bY. firm, to product groups on the basis of the ratio of the respective book·values of fixed assets. ComP-uted using data from only those firms supplying both asset and income-and-loss information, and as such, may not be derivable from data presented. Data for the ·parfial-year periods are calculated using annualized income-and-loss information. 5 Defined as operating income or loss divided by asset value. Defined as net income or loss divided by asset value. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. Table 29 Capital expenditures by U.S. producers of special quality steel products, by products, fiscal years 1989-91, January-March 1991, and January-March 1992 Item All products Subject special quality: Carbon: Semifinished products Cut bars and rods . Alloy: Semifinished products Cut bars and rods Carbon and alloy: Semifinished products Cut bars and rods Total . Free-machining: Carbon: Semifinished products All bars and rods Alloy: Semifinished products All bars and rods . Carbon and alloy: Semifinished products All bars and rods Total All special-quality: Carbon: Semif inished products All bars and rods Alloy: Semifinished products All bars and rods Carbon and alloy: Semif inished products All bars and rods Total (In thousands of dollars) 1989 272,797 *** 8,722 *** 6,237 26,865 14.959 41,824 *** . *** 0 .·*** *** 15.787 18,064 ***29,290 *** 7,684 29,142 36.974 66,116 1990 397,037 17,595 37. 313 6, 779 32,555 24,374 69.868 94,242 *** *** 0 *** *** 10.985 13,325 19,935 61,515 6, 779 35,029 26,714 96.544 123,258 1991 398,146 *** 21,326 *** 14,737 14,703 36.063 50,766 *** . 3, 520 0 242 *** 3.762 5,703 ***34, 175 . ***16,830 16,644 51. 005 67,649 January-March-- 1991 1992 96,476 *** 8,521 *** 4,230 3,576 12.751 16,327 *** *** *** *** *** *** 5.475 9,266 Source: Compiled from data submitted in resp.onse to questionnaires of the U.S. International Trade Commission. I-88 Table 30 Research and development expenses of U.S. producers of special quality steel products·, by products, fiscal years· ~989-91 ~· January-.March 1991, and January-March 1992 Item All products Subject special quality: ·Carbon: Semif inished products Cut bars and rods Alloy: Semifinished products Cut bars and rods Carbon and alloy: Semifinished products Cut bars and rods Total Free-machining: Carbon: Semifinished products All bars and rods Alloy: Semifinished products All bars and rods Carbon and alloy: Semif inished products All bars and rods Total All special-quality: Carbon: Semif inished products All bars and rods Alloy: Semifinished products All bars and rods Carbon and alloy: Semifinished products All bars and rods Total (Inthousands of dollars) ·1989 51,310 *** *** *** *** *** ***· . 12. 830: *** *** *** *** *** *** 624 *** *** ***· *** *** *** 13, 745 1990 . 67,813 *** *** *** ** *** *** .20,482 *** *** *** *** *** *** 1, 778 *** *** *** *** *** *** 21, 775 1991 62,225 *** *** *** *** *** *** 20,242 *** *** *** *** - *** *** 1,836 *** *** *** *** ****** 21,632 January- March- - 1991 1992 15,783 ***. *** *** *** *** *** 5,283 11,022 *** *** *** *** *** *** 4,222 Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade ColillJ!ission. . Impact of Imports on Capital and Investment The Commission requested U.S. producers to describe and explain the actual and potential negative effects of imports of certain special quality carbon and alloy steel products from Brazil on their existing development and production efforts (including efforts to develop a derivative or more advanced version of the product), growth, investment, and ability to raise capital. Their responses are shown in appendix J. I-89 Consideration of the Question of Threat of Material Injury To an Industry in the United States Section 771(7)(F)(i) of the Tariff Act of 1930 (19 U.S.C. § 1677(7)(F)(i)) provides that-- In determining whether an industry in the United States is threatened with material injury by reason of imports (or sales for importation) of the merchandise, the Commission shall consider, among other relevant economic factors 84 -- (I) If a subsidy is involved, such information as may be presented to it by the administering authority as to the nature of the subsidy (p~rticularly as to whether the subsidy is an export subsidy inconsistent with the Agreement), (II) any increase in production capacity or existing unused capacity in the exporting country likely to result in a significant increase in imports of the merchandise to the United States, (III) any rapid increase in United States market penetration and the likelihood that the penetration will increase to an injurious level, . (IV) the probability that imports of the merchandise will enter the United States at prices that will have a depressing or suppressing effect on domestic prices of the merchandise, (V) any substantial increase in inventories of the merchandise in the United States, (VI) the presence of underutilized capacity for producing the merchandise in the exporting country,, (VII) any other demonstrable adverse trends that indicate the probability that the importation (or sale for importation) of the merchandise (whether or not it is actually being imported at the time) will be the cause of actual injury, r. 84 Section 771(7)(F)(ii) of the. Act (19 U.S.C. § 1677(7)(F)(ii)) provides that "Any determination by the Commission under this title that an industry in the United States is threatened with material injury shall be made on the basis of evidence that the threat of material injury is real and that actual injury is imminent. Such a determination may not be made on the basis of mere conjecture or supposition." I-90 (VIII) the potential for product-shifting if production facilities owned or controlled by the foreign manufacturers, which can be used to produce products subject to investigation(s) under section 701 or 731 or to final orders under section 706 or 736, are also used to produce the merchandise under investigation, (IX) in any investigation under this title which involves imports of both a raw agricultural product (within the meaning of paragraph (4)(E)(iv)) and any product processed from such raw agricultural product, the likelihood that there will be increased imports, by reason of product shifting, if there is an affirmative determination by the Commission under section 705(b)(l) or 735(b)(l) with respect to either the raw agricultural product or the pro~essed agricultural product (but not both), and (X) the actual and potential negative effe~ts on the existing development and production efforts of the domestic industry, including efforts to develop a derivative or more advanced version of the like product. 85 The available information on the volume, U.S. market penetration, and pricing of imports of the subject merchandise (items (III) and (IV) above) is presented in the section entitled "Consideration of the Causal Relationship Between Imports of the Subject Merchandise and the Alleged Material Injury;" and information on the effects of imports of the subject merchandise on U.S. producers' existing development and production efforts (item (X)) is presented in appendix J. Items (I) and (IX) above are not applicable in this investigation. Available information on U.S. inventories of the subject products (item (V)); foreign producers• operations, including the potential for "product-shifting" (items (II), (VI), and (VIII) above); any other threat indicators, if applicable (item (VII) above); and any dumping in third-country markets, follows. Other threat indic~tors have not been alleged or are otherwise.not applicable. Ability of Foreign Producers to Generate Exports and the Availability of Export Markets Other Than the United States The petition identified five major manufacturers/exporters of special quality carbon and alloy steel products in Brazil: Acos Anhanguera (Villares) 85 Section 771(7)(F)(iii) of the Act (19 U.S.C. § 1677(7)(F)(iii)) further provides that, in antidumping investigations, " ... the Commission shall consider whether dumping in the markets of foreign countries (as evidenced by dumping findings or antidumping remedies in other GATT member markets against the same class or kind of merchandise manufactured or exported by the same party as under investigation) suggests a threat of material injury to the domestic industry." I-91 S/A - Anhanguera; Villares Industria de Base S/A - Vibasa; CIA Acos Especiais Itabria - Acesita; Acos Finos Piratini S/A - Piratini; and Mannesmann S/A. *** additional Brazilian manufacturers/exporters were identified as sources of imports of the subject products in responses to the Commission's importer's questionnaire and include *** Respondents' Data Information on capacity, production, inventories, and shipments of the subject special quality carbon and alloy steel products for the five major Brazilian manufacturers/exporters identified in the petition was provided by counsel and are presented in table 31. Capacity of the five Brazilian producers, representing a significan~ portion of production of special quality carbon and alloy steel products in Brazil, remained unchanged during 1989-91, but then decreased by 4.0 percent during January-March 1992 when compared to the same period in 1991. Exports to the United States by the Brazilian manufacturers accounted for 9.4 percent of total shipments of special quality carbon and alloy steel products in 1989; this share increased to 11.6 percent in 1990, and then decreased to 10.7 percent in 1991. The Brazilian firms reported operating at 76.7 percent of capacity during 1989, decreasing to 67.1 percent in 1990, and then declining to 61.8 percent during 1991. Additional Information Regarding the Brazilian Industry . Available information on additional manufacturers/exporters of special quality carbon and alloy steel products in Brazil is presented below. 86 Respondents represented by counsel Anhanguera - Agos Anhanguera (Villares) SA.--Anhanguera, part of the Villares group, was established in 1966 and currently has 1,924 employees. Anhanguera's production is ingot cast, and the company has an annual capacity of 370,000 metric tons of raw steel and 292,300 metric tons of finished steel. The company's capital equipment includes three EAFs, one vacuum degasser, one blooming mill, one billet mill, two bar mills, four bar straightening machines and three peeling machines. Anhanguera's product line is composed of carbon steel ingots, billets, round and square bars, flats, and bright bars; alloy steel ingots, billets, round and square bars, and bright bars; and bearing steel. Acesita - Cia Agos Especiais Itabira.--Acesita was established in 1944. The company's production is both ingot and continuously cast. Annual capacity is unknown. The company's capital equipment includes one blast furnace, one electric pig iron furnace, two BOFs and three EAFs, one slabbing mill, one blooming mill, three bar mills, one hot strip mill, two cold reduction mills, and one temper/skin pass mill. Acesita's product line is composed of foundry 86 Iron and Steel Works of the World, pp. 28-50. 1-92 Table 31 Subject special quality-carbon and alloy steel products: Brazilian capacity, production, capacity utilization, and shipments, by products, 1989-91, January-March 1991, January-March 1992, and projected 1992 Item Carbon:· Semifinished: Capacity ............ . Production .......... . Inventories ......... . Shipments: Home market ....... . Exports: U.S ............. . Other countries .. Total exports .. Total shipments .. Cut bars: Capacity ............ . Production .......... . Inventories ......... . Shipments: Home market ....... . Exports: U.S ............. . Other countries .. Total exports .. Total shipments .. Semifinished and bars: Capacity ............ . Production .......... . Inventories ......... . Shipments: Home market ....... . Exports: U.S ............. . Other countries .. Total exports .. Total shipments .. Alloy: Semifinished: Capacity ............ . Production .......... . Inventories ......... . Shipments: Home market ....... . Exports: Jan. -Mar. - - Projected 19921989 1990 1991 1991 1992 Quantity (short tons) 117,200 117,200 117,200 29,300 108,517 85,373 95,240 24,347 6,890 8,717 12,274 6,902 75,319 23,802 14.714 38.516 113,835 237,181 211,055 6,354 51,279 9,021 23.245 32.266 83,545 237,181 191,916 4,060 56,615 8,602 26.468 35.070 91,685 12,457 1,691 11.024 12.715 25,172 237,181 59,296 181,438 32,721 5,527 5,990 163,961 150,422 127,263 18,782 12,426 32.018 44.444 208,405 15,254 29.234 44.488 194,910 354,381 354,381 319,572 277,289 13,244 12, 777 10,340 42.305 52.645 179,908 2,998 8. 710 11.708 30,490 354,381 88,596 276,678 57,068 17,801 12,892 239,280 201,701 183,878 31,239 36,228 46.732 82.960 322,240 24,275 52.479 76.754 278,455 18,942 68. 773 87. 715 271, 593 4,689 19.734 24.423 55,662 224,141 224,141 224,141 56,035 190,475 192,252 175,069 40,229 15,803 12,582 7,785 10,555 100,405 86,279 77 I 731 39,680 29,300 105,150 15,866 74,294 5,175 4,616 13,674 72 9.219 9.291 22,965 48,308 38,756 3,164 25,695 4,666 10.759 15.425 41,120 55,833 8,565 17.554 26.119 81,952 193,230 154,045 2,469 108,181 9,435 39.488 48.923 157,104 77,608 298,380 54,622 228,339 8,339 7,085 39,369 4, 738 19.978 24. 716 64,085 164,014 18,000 57.042 75.042 239,056 58,658 234,630 33,371 197,491 8,912 9,145 15,311 85,744 U.S.............. 32,207 48,040 46,261 18,370 5,884 43,439 Other countries.. 79.300 67.316 50.989 13.485 17.374 66.948 Total exports ... ~l~l~l~.5~0~7;.__~1~1~5~.3~5~6:.....-~9~7~.2~5~0~~3~1~.8~5~5~~2~3~.2~5~8~~1~1~0~.3~8~7~ Total shipments .. 211,912 201,635 174,981 71,535 38,569 196,131 --Continued on next page. I-93 Table 31--Continued Subjec;:t spec;:ial q1:1ality carbon and alloy steel products: Brazilian capacit~i production. capacity ut1lizat1on, and shipments, by products, 1989-91, January-March 19 , January-March 1992, and projected 1992 .. Item 1989 1990 1991 Jan -Mar, -- l99t !§92 Pro~ected !99 Quantity "(short tons) Alloy--Continued: Cut bars: Capacity ............. 280,394 280,394 280,394 70,098 63,840 252,760 Production ........... 260,927 236,613 212,221 40,938 49,752 205,367 Inventories .......... 8,371 8,044 7,558 7,889 10,235 6,504 Shipments: 185,600 185,351 25,514Home market ........ 31,384 140,174 Exb~~~~: ........... Other countries .. ·Total exports .. Total shipments .. Semifinished and bars: Capacity ............. 504,535 504,535 504,535 126,133 122,498 487,390 Production ........... 451,402 428,865 387,290 81,167 83,123 402,858 Inventories .......... 24,174 20,626 ,5,343 18,444 19,147 15,649 Shipments: Home market ........ '286,005 271,630 227,954 65,194 46,695 198,742 Exb~~~~: ........... 41,623 64,529 54, 911 24,847 17,748 47,190 Other countries .. 153,671 102,405 103,566 25,144 28,828 119 I 942 Total .exports .. !§5,294 Il>6,934 158,471 49,§9! 4l>,57l> H7,l32 Total shipments .. 481, 2§9 438,564 386,43 115 ,I85 93,27! 365,874 Carbon and alloy: Semi finished: 205,335Capacity ............. 821,341 821,341 821,341 207,958 819,780 Production ........... 599,026 504,047 462,058 106,309 102,375 271, 785 Inventories .......... 22,693 21,299 20,059 17,457 14,087 13,761 Shipments: Home market ........ 210,254 170, 155 167,462 57,514 32. 722 141,577 Exb~~~~: ........... Other countries .. Total exports .. Total shipments .. Cut bars: Capacity ............. 657,575 657,575 657,575 164,394 147,148 585,990 Production ........... 535,492 489,043 451,834 83,628 100,465 359,412 Inventories .......... 14, 725 12,104 13,085 13,879 13,399 8,973 Shipments: Home market ........ 413,279 387,473 329,682 53,799 69,149 248,355 Exb~~~~: ........... 21,842 31,743 20,247 6,919 9,091 18,187 Other countries .. 106;542 64,560 95,410 20,412 '22, 213 92,482 Total exports •. 128 384 96,303 115,657 2f 1l3I 31,364 1!0~669 Total shipments .. 541,663 483 t 776 445,339 8 ,130 100,453 35 ,024 Semifinished and bars: 1 Capacity ............. 1,478,916 1,478,916 1,478,916 369' 729 355,106 1,405,770 Production ........... 1,134,518 993,090 913,892. 189,937 202,840 631,197 Inventories .......... 37,418 33,403 33,144 31,336 . 27 ,486 22,734 Shipments: Home market ........ 623,533 101,871 389,932 Exb~~~~: ........... Other countries . .- Total exports .. Total shipments .. --Continued on next page. I-94 table 31--Continued Subject special quality carbon and.alloy steel products: Brazilian c~pacity, production, capacity utilization, and shipments, by products,· 1989-91,. Ja~uary-March 1991, January-March 1992, and ·projec'ted 1992 · Carbon: Semifinished: Capacity utilization ....... . Inventories to production ........ . Share of shipments: Home market ....... . Exports: U.S ... I I I •• I I I I I I Other countries .. Cut bars: Capacity utilization ....... . Inventories to production ........ . Share of shipments: Home market ....... . Exports: U.S. I I I I I •• I. I I. I Other countries .. Semifinished and bars: Capacity utilization ....... . Inventories to production ........ . Share of shipments: Home market ....... . Exports: u.s IO o O I IO o o 0 I I I I Other countries .. Alloy: Semi finished: Capacity utilization ....... . Inventories to production ........ . Share of shipments: Home market ....... . Exports: U.S ... I ••••••• I I I Other countries .. Cut bars: Capacity utilization ....... . Inventories to production ........ . Share of shipments: Home market ....... . Exports: U.S. I I ••••••• I ••• Other countries .. --Continued on next page. 1989 92.6 6.3 66.2 20.9 12.9 89.0 3.0 78.7 6.0 15.4 90.2 4.1 74.3- 11.2 14.5 85.0 8.3 47.4 15.2 37.4 93.l 3.2 68.9 3.5 27.6 1990 1991 Jan. -Mar . - - •1991 1992 Projected 1992 Ratios and shares (percent) 72.8 10.2 61.4. 10.8 27.8 80.9 2.1 77 .2 7.8 15.0 78.2 4.6 72.4 8.7 . 18.8 85.8 6.5 42.8 23.8 33.4 84.4 3.4 78.2 7.0 14.8 81.3 12.9 61. 7 9.4 ,28.9 76.5 3.0 . 70. 7 5.7 23.5 78.l 6.4 67.7 7.0 25.3 78.1 4.4 44.7 25.9 29.4. 75.7 3.6 70.6 4.7 24.7 83.·l 54.2 7.1 8.2 49.5 59.5 6.7 0.3. 43.'8 40.l 55.2 80.2 4.6 2.0 61.6.. 62.5 9 I 8 11. 3 • 28.6 26.2 64.4 70.4 5.6 3 .8 . 56.1 ·. 61.4 8.4· ; 7 .4 35.5 31.2 70.7 6.2 68.1 10.5 . 21.4 '79.7 1.6 68.9 6.0 25.1 76·.5 3.1 68.6 7.5 23.9 71.8 ~6.9 84.2 6.6 6.7 4.6 53:6 ·33~3 35.7 28.2 29.0 23.4 18.2 37.8 40.8 58.4 77.9 81.2 4.~ 5.1 3.2 62~1. 66.4 69.4 9.. 5 9..4 4.3 28.4 24.2 26.2 I-95 Table 31--Continued Subject special quality carbon and alloy steel products: Brazilian capacity, production, capacity utilization, and shipments, by products, 1989-91, January-March 1991, January-March 1992, and projected 1992 Item Alloy--Continued: Semifinished and bars: Capacity utilization ....... , Inventories to production ........ . Share of shipments: Home market; ...... . Exports: U.S ............. . Other countries .. Carbon and alloy: Semifinished: Capacity utilization ....... . Inventories to production ........ . Share of shipments: Home market ....... . Exports: U.S ............. . Other countries .. Cut bars: Capacity utilization ....... . Inventories to production ........ . Share of shipments: Home market ....... . Exports: U.S ............. . Other countries .. Semifinished and bars: Capacity utilization ....... . Inventories to production ........ . Share of shipments: Home market ....... . Exports: U.S ............. . Other countries .. 1989 89.5 5.4 59.4 8.6 31. 9 72.9 3.8 56.8 17.3 25.9 91.2 3.1 73.2 4.6 22.3 76.7 3.3 68.4 9.4 22.2 Jan. -Mar. - - 1990 1991 1991 1992 Ratios and shares (percent) 85.0 4.8 61. 9 14.7 23.4 61.4 4.2 52.3 19.1 28.6 82.8 2.8 77 .8 7 .4 14.9 67.1 3.4 68.9 11.6 19.5 76.8 4.0 59.0 14. 2 26.8 56.3 4.3 54.4 19.7 25.9 76.1 3.3 70.7 5.2 24.2 61. 8 3.6 66.0 10.7 23.2 64.4 5.7 56.6 21.6 21.8 51. 8 4.1 53.5 23.7 22.8 56.9 4.7 61. 9 9.7 28.5 51.4 4.1 59.0 17.2 23.8 67.9 5.8 50.1 19.0 30.9 49.2 3.4 43.9 20.5 35.6 78.9 3.8 64.6 10.3 25.1 57.1 3.4 58.2 13.9 27.9 Projected 1992 82.7 3.9 54.3 12.9 32.8 80.0 5.1 50.9 18.7 30.4 80.6 2.5 69.2 5.1 25.8 80.3 3.6 61.2 11.0 27.8 Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. I-96 pig iron; carbon steel ingots, slabs, blooms, billets, round and square bars, flats, bright bars, and hot- and cold-rolled uncoated sheet and coil; stainless steel ingots, slabs, blooms, billets,· round arid square bars, and flats; alloy steel ingots, ·slabs, blooms, ·billets, round and square bars, flats, hot and cold rolled hoop and strip, hot- and cold-rolled sheet and .coil, .and electrical sheet and coil; free-cutting steel; high speed steel; leaded steel; and iron, steel and non-ferrous castings.. . . . Hannesmann - Hannesmann S/A.--Mannesmann, which is largely owned by Mannesmann AG, Germany, was established in 1952-and currently has 7,651 employees. Mannesmann's production is both ingot and continuously ca~t, and the company has an annual capacity of 7,000 metric tonnes of pig iron and one million metric tons of raw steel. The company's capital equipment includes two ·blast furnaces, three electric pig iron furnaces, one basic oxygen converter, one EAF, one continuous caster, one blooming and billet mill, one par mill, four seamless tube and pipe mills, and other pipe mills. ;Mannesmann's product line is composed of pig iron; carbon steel ingots, billets, round and square bars, flats, hexagons, seamless tubes and pipes, oil country tubular goods, cold-drawn tubes and pipes, and forged tubes and pipes; and alloy steel ingots, billets, round and·square bars, flats, hexagons, seamless tubes and pipes, OCTG, and forged tubes. Pirat:ini - At;os Finos Pirat:ini SA.--Piratini, formerly a subsidiary of Siderbras, was established in 1961 and currently has 2,400 employees. The company's production is currently ingot cast, but plans are underway to install a continuous caster. Annual capacity is unknown. The company's capital equipment includes· a direct reduction plant, one EAF, one billet mill, one bar mill, and one wire rod mill. Piratini's product line is composed of carbon ste.el billets., wire rod, round and square bars, and flats; stainless steel billets, wire rod, round and square bars, and flats; and alloy steel billets, wire rod, round and square bars, and flats. Vibasa - Villares Indust:rias de Base SA.--Vibasa, part of the Villares group, was established in 1975 and currently has 2,025 employees. Vibasa's production is ingot cast, and the company has an annual capacity of 36,000 metric tonnes of pig iron, 400,000 metric tons of raw steel, and 310,000 metric tons of finished steel. The company's capital equipment includes three EAFs, a vacuum degassing system, one blooming mill, one billet mill, one bar mill, a heavy foundry/forge,· and centrifugal casting machines for tubes. Vibasa's product line is composed of foundry pig iron; carbon steel ingots, blooms, billets, wire rod, round and square bars, flats, hexagons, and centrifugally cast tubes; alloy steel ingots, blooms, billets, wire rod, round and square bars, flats, and hexagons; bearing steel; free-cutting steel; leaded steel; and spring steel. Ot:her Brazilian manufacturers/export:ers * * * * * * * I-97 . EC Dumping Duty Order In February 1990 the Commission of the European Communities received a complaint lodged by the European Confederation of Iron and Steel Industries {Eurofer) on behalf of the majority of producers of certain semifinished products of alloy steel. The complaint contained evidence of dumping and of material injury caused by imports of certain semifinished products of special engineering alloy steel, of rectangular {including square) cross-section, hot- rolled or obtained by continuous casting, originating in Brazil and Turkey. The investigation covered the period April 1, 1989, to March 31, 1990. On March 30, 1992, 87 • 88 the EC issued its preliminary decision which established weighted-average margins of dumping and price undercutting margins., and determined that the dumped imports caused material injury to the Community industry. The EC determined that the prices of the Brazilian exporters should be increased by their price undercutting margin or their dumping margin, whichever is the lower. The margins {in percent) and definitive duties imposed are as follows: 89 Vibasa ........ . Anhanguera .... . Acesita ....... . Piratini. ..... . All other ..... . 1 Not applicable. Dumping margin 7.4 15.0 37.9 1. 7 (l) Undercutting margin 22.0 26.0 15.0 9.0 (1) U.S. Importers' Inventories Definitive fil!t:£ 4.9 15.0 8.5 1. 7 15.0 U.S. importers of special quality carbon and alloy steel products from Brazil reported almost no inventories of the subject hot-rolled bar products, but inventories of semifinished products were reported, ***· Inventories and shares of imports {in percent) of semifinished carbon and alloy products from Brazil are listed below. * * * * * * * 87 Commission {Provisional) Decision No. 891/92/ECSC, Official Journal of the European Communities {No. L 95/26, April 9, 1992) is presented in app. K. 88 Due to the complexity of the proceeding, the investigation exceeded the normal period of one year. 89 Commission (Definitive) Decision No. 1775/92/ECSC of June 30, 1992, Official Journal of the European Communities {No. L 182/23, July 2, 1992) is also presented in app. K. I-98 CONSIDERATION OF THE CAUSAL RELATIONSHIP BETWEEN IMPORTS OF THE SUBJECT PRODUCTS AND THE ALLEGED MATERIAL INJURY Imports Du~ing the· course of this investigation questions have arisen as to the reliability of information and data concerning the level o~ subject imports from Brazil. Counsel for the Brazilian respondents argues that import volume based on official import statistics, which petitioners ~ely upon for market pe~etrati~n. is overstated by virtue of the fact that .merchant quality carbon steel products are contained within the broad HTS subhe~dings for semifinished nonalloy steel products. 9° Counsel for petitioners argues that official import statistics are reliable in that (a) average unit values approximate the price of special quality steel products and (b) the merchant classification assigned Qy the respondents to the *** is not sustainable as the Brazilian manufact~r~r/supplier employs refining operations that include a vacuum degassi~g unit which is associated with the production of special quality steel products. 91 The following is a review of respondents' postconference brief regarding the controversial semifinished carbon imports from Brazil. Exhibit 3B It is difficult to determine from the paperwork whether the two sets of *** inf~rmation are double counting, or whether this information double counts what is presented in *** or exhibit 3C. * * * * * * * Based on discussions with industry experts and metallurgists, it would appear that the products listed below are the special quality carbon products that are the subject of this investigation. However, it is difficult to make a definitive finding without knowledge of the end use or the specifications. * * * * * * * Exhibit 3C * * * * * * * ~ ~ostconference brief of Willkie, Farr & Gallagher, p. 19, exh. 3. 91 July 10, 1992, submission by Mr. DePrest, Stewart & Stewart, p. 1 and attachments. 1-99 For purposes of the Commission's analysis of import volumes and values, data are presented in table 32 that contain U.S. imports .~f special quality carbon and alloy steel products based on responses ~o the __.Commis~~on•s · i~porter•s questionnaire and official U.S. import statistics. Market Penetration of Imports Shares of apparent U.S: consumption accounted for by imP.orts of .the subject special quality carbon and alloy steel products are presented in tables 33A-C. See also appendix L for apparent consumption and market· penetration tables presenting data based on cumulation of imp~rts subject to this investigation with imports of hot-rolled lead and bismuth carbon steel bars and rods. 1,.100 Table ;32.. . . . ,., . . . . . . , . . . . . . . Subjec;:t. special-qi..ia~ity steel product's: . ·u, s· .. i111ports; by products and' by sources, 1989-91, January·-March 1991; and January-March 1992 · · ·.- ,, l • • • ~- . t. . . .. . .· ·; . ' "J. : f.. ; . . :· . t Item Semi finished: Carbon: Brazil . Other sources· . ·Total Alloy: Brazil Other sources .. :: ·: · · ''Total .. · .... ·. · · Carbon and alloy: Brazil .... Other sources Total . Cut bars and rods: Carbon: Brazil Other sources Total Alloy: Brazil Other sources Total .... Carbon and alloy: Brazil .... Other sources Total Semi finished: Carbon: Brazil Other sources Total . Alloy:. Brazil Other sources Total .... Carbon and alloy: Brazil .... Other sources . Total . Cut bars and rods: Carbon: Brazil Other sources . Total . Alloy: Brazil Other sources Total .... Carbon and alloy: Brazil .... Other sources Total . --Continued on next page. -. ; 1989 1990 1991 Quantity (short tons) : ..l . - .. . ~ . 134, 935. _107 '583 186'.184 . '·2'7'9;216 319\ll9· '386,799 39, 6.86r ··· '32 ;·747 ..... 72.175 76.476 111.~61·. 109,223 172,621 140,330 258.359 355.692 25,673 188.154 213 '827 3,141 121.096 338.064 28,074 133.155 102,792 41,747 222,274 264.021 145;292 277 .414 :, 422 '706 . 67,683 ' 71.482 139,165 212,975 348.896 561,871 25o,825 184,155 8,424 21.030 29,454 3,699 26.463 30,162 12,123 47 .493 ' 59.616 Value (1.000 dollars) 41,876 59.637 lOl,513 16,846 31.529 48,375 58' 722 91.166 149,888 65 '725 13,495 144,506 l58,00l 28,738 80.421 12,069 56 .139 68,208 6,174 49.734 55,908 18,243 105.873 172' 567 11,647 41,465 ll9.l61 13,032 29.422 42,454 6,230 dJ~~ 19,262 37.169 56,431 16,337 5,483 23.362 . 28.845 36,163 118.412 4,559 26,424 30,983 3,791 28.919 32,710 ,, 8, 350 55,343 63,693 9,556 33.r4 12 ,464 15,867 39.927 55,794 2,284 12.404 14,688 1,506 14. 271 ts. 111 3,790 26.675 30.465 I-101 Table 32--Continued Subject special-quality steel products: U.S. imports, by products and by sources, 1989-91, January-March 1991, and January-March 1992 Jan, -Mar, - - Item 1989 1990 1991 1991 1992 Unit value (:eer short ton) Semifinished: Carbon: Brazil $315.01 $267.12 $271. 01 $286.61 $264.25 Other sources 320.31 288,02 285,87 288,30 285,22 Average 318.10 282.21 280.76 287. 77 280.32 Alloy: Brazil 424.48 401.14 408. 51 403.05 371.17 Other sources 436.84 426.89 367.06 365,89 342,00 Average 432.46 419.17 387.22 381. 57 356.18 Carbon and alloy: Brazil 340.18 298.40 314.70 316.15 298.44 Other sources 352.87 317.88 302.51 301.63 292. 71 Average 347.78 312.37 307 .13 306.43 294.32 Cut bars and rods: Carbon: Brazil 457.87 429.90 395. 77 428.89 500.99 Other sources 427.95 421. 61 436.65 422.97 469.42 Average 431. 55 423.05 426.98 424.66 474.07 Alloy: Brazil 553.96 451. 55 474.97 505.54 397.26 Other sources 528.38 558.06 527,97 546,69 493,48 Average 529.03 543.89 522.39 541.64 482.33 Carbon and alloy: Brazil 468.35 436.99 420.42 452.28 453.89 Other sources 46Z,28 476,32 486,30 491,90 481,99 Average 467.37 470.10 475.08 483.85 478.31 Note.--Because of rounding, figures may not add to the totals shown; unit values are calculated from unrounded figures. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission and from official statistics of the U.S. Department of Commerce. I-102 Table 33A .. Subject special quality steel products: U.S. shipments of dom~stic product, U.S. imports, and apparent U.S. consumption, by products, ,1989-91, January-Mar~h 1991 and· January-March 1992 . · Item. Semi finished: Carbon: Producers' U.S. ship- ments . U.S. imports from-- Brazil .. Other sources Total Apparent consum- ption . Alloy: Producers' U.S. ship- ments U.S. imports from-- Brazil . . . Other sources Total Apparent consum- ption .... Carbon and alloy: Producers' U.S. ship- . ments U.S. imports from-- Brazil ; . Other sources Total . Apparent consum• ption . Cut bars and rods: Carbon: Producers' U.S. ship- ments .... .U.S. imports from-- Brazil . . . . . Other sources Total Apparent consum- ption . Alloy: Producers' U.S. ship- ments U.S. imports from-- Brazil .. Other sources Total . Apparent consum- ption .... Carbon and alloy: Producers' U.S. ship- ments . . . . . . U.S. imports from-- Brazil . . . . . Other sources Total . . . Apparent consum- ption . --Continued on next page. 1989 1990 1991 Quantity (short tons) 3,149,483 132,935 186.184 319 .119 3,683,546 107,583 279.216 386.799 3,147,807 145,292 277.414 422.706 3,468,602 4,070,345 3,570,513 111. 861 1,697,897 4,735,519 172,621 258.359 430.980 1,815,413 32,747 76.4~6 109.2 3 1,924,636 5,498,959 140,330 355.692 . 496.022 1,574,050 67,683 ~1.482 1 9.165 1,713,215 4,721,857 212,975 348.896 561. 871 850 J 306 .. -45,470° 102.055 147.525 957,287 36,163 ll8.412 154.575 -997;83li 1,111,862 412,30~ 15,457 21.1p 448,934 1,262,610 60,927 123.228 184.l55 407,453 17,003 17.991 34.994 . 442 ,447 189.569 5,166,499 5,994,981 5,283,728· l,446,765 1,554,309 1,984,278 25,673 188.154 213.827 161.229 2,198,105· 2,246,612 1,852,97,3 29,429 94.961 124.390 1,977,363 1,249,277 ·1,145,481 124.237 13,673 89!119 102. 792 126.435 1,230,714 1,352,069 1,271,916 3,090,755 3,334,660 2,998,454 3.428.819 41,747 222:274 3.598.681 42,733 208:092 3.249.279 444, 5'73 8,424 21. 030 29.454 . 474,027 281,934 3,699 26.463 30.162 312,096 726. 507 12,123 47:493 59 616 786.123 495,761 4,559 26.424 30.983 526,744 288,450 3,791 28.919 32. 710 321,160 784. 211 8,350 55:343 847.904 I-103 Table 33A--Continued Subject special quality steel products: U.S. shipments of domestic product, U.S. imports, and apparent U.S. consumption, by products, 1989-91, January-March 1991, and January-March 1992 Item Semif inished: Carbon: Producers' U.S. ship- ments U.S. imports from-- Brazil .. Other sources Total Apparent consum- ption Alloy: Producers' U.S. ship- ments U.S. imports from-- Brazil .. Other sources Total Apparent consum- ption . Carbon and alloy: Producers' U.S. ship- ments ... U.S. imports from-- Brazil . . . Other sources Total . . Apparent consum- ption . Cut bars and rods: Carbon: Producers' U.S. ship- ments ... U.S. imports from-- Brazil .. Other sources Total Apparent consum- ption Alloy: Producers' U.S. ship- ments U.S. imports from-- Brazil .. Other sources Total Apparent consum- ption . Carbon and alloy: Producers' U.S. ship- ments . . . . . . U.S. imports from-- Brazil . . . . . Other sources Total . . . . Apparent consum- ption --Continued on next page. 1989 997,278 41,876 59.637 101. 513 1,098,791 676,043 16,846 31. 529 48.375 724,418 1,673,321 58, 722 91.166 149.888 1,823,209 902,568 11,755 80.521 92 I 276 994,844 689,448 1,740 63:985 755,173 1,592,016 13,495 144.506 158.00l 1. 750. 017 1990 1991 Value (1.000 dollars) 109 .159 1,181,296 730,527 13, 136 32.64~ 45.78 776,310 1,802,664 41, 874 113. 068 154.942 1,957,606 914,788 12,069 56.139 68.208 982,996 723' 855 6,174 49:734 55 908 779,763 1,638,643 18,243 105.873 124 .116 1. 762. 759 1 8.680 1,066,097 647,157 27,649 26.238 53.887 701,044 172. 567 1,767,141 1,226,378 11,647 41.465 53 .112 1,279,490 648,052 6,319 59:730 66 049 714,101 1,874,430 17,966 101.195 119.161 1. 993. 591 247,843 13, 032 29.422 42.454 290,297 1. 977 190,781 424,647 19,262 37.169 56.431 481,078 195,547 3,613 8.895 12.508 208,055 164,652 1,870 14:467 16 337 180,989 360,199 5,483 23.362 28.845 389.044 276,228 9,556 33.F4 43. 30 319,558 12 .464 175,240 439,004 15,867 39.927 55.794 494,798 208,084 2,284 12.404 14.688 222,772 177,307 30.465 400.079 1-104 Table 33A--Continued Subject special quality steel products: U.S. shipments of domestic product, U.S. imports, and apparent U.S. conswnption, by products, 1989-91, January-March 1991, and January-March 1992 Item Semif inished: Carbon: Producers• U.S. ship- ments . . . . . • U.S. imports from-- Brazil Other sources Total . . . Alloy: Producers• U.S. ship- ments • • • U.S. imports from-- Brazil • • • . Other sources Total .. Carbon and alloy: Producers• U.S. ship- ments . . . U.S. imports from-- Brazil . . . . . Other sources Total ... Cut bars and rods: Carbon: Producers' U.S. ship- ments ... U.S. imports from-- Brazil Other sources . Total .. Alloy: Producers• U.S. ship- ments ... U.S. imports fr~m- Brazll . . . . Other sources . Total .... Carbon and alloy: Producers• U.S. ship- ments . • . . U.S. imports from-- Brazil Other sources . Total • • . . • --Continued on next page. Jan. -Har. - - 1989 1990 1991 1991 1992 Share of the quantity of U.S. consumption (percent) 90.8 3.8 5.4 9.2 93.4 2.3 4.3 6.6 91. 7 3.3 5.0 8.3 90.3 1.2 8.6 9.7 89.9 .3 9.8 10.1 90.1 .8 9.0 9.9 90.5 2.6 6.9 9.5 94.3 1. 7 4.0 5.7 91.7 2.3 5.9 8.3 92.8 1.2 5.9 7.2 92.4 1.0 6.6 7.6 92.7 1.2 6.2 7.3 88.2 4.1 7.8 11.8 91.9 4.0 4.2 8.1 89.4 4.0 6.6 10.6 93.7 1.5 4.8 6.3 90.l 1.0 8.9 9.9 92.3 1.3 6.4 7.7 85.2 4.6 10.2 14.8 91.8 3.4 4.7 8.2 87.3 4.2 8.5 12.7 93.8 1.8 4.4 6.2 90.3 1.2 8.5 9.7 92.4 1.5 6.0 7.6 86.1 3.3 10.6 13.9 92.1 3.8 4.1 7.9 87.8 3.4 8.8 12.2 94.1 .9 5.0 5.9 89.8 1.2 9.0 10.2 92.5 1.0 6.5 7.5 I-105 Table 33A--Continued Subject special quality steel products: U.S. shipments of domestic product, U.S. imports, and apparent U.S. consumption, by products, 1989-91, January-March 1991, and January-March 1992 Jan, -Mar, - - Item 1989 1990 1991 1991 1992 Share of the value of U.S. consumption (12ercentl Semifinished: Carbon: Producers' U.S. ship- men ts 90.8 90.8 88.9 85.4 86.4 U.S. imports from- - Brazil 3.8 2.4 3.7 4.5 3.0 Other sources 5 ,4 6,8 Z.4 10,l 10,6 Total 9.2 9.2 ll. l 14.6 13.6 Alloy: Producers' U.S. ship- men ts 93.3 94.1 92.3 92.7 92.9 U.S. imports from- - Brazil 2.3 1. 7 3.9 3.3 3.6 Other sources 4 4 4 2 3 7 4 1 3 5 Total 6.7 5.9 7.7 7.3 7.1 Carbon and alloy: Producers' U.S. ship- men ts 91.8 92.1 90.2 88.3 88.7 U.S. imports from- - Brazil 3.2 2.1 3.8 4.0 3.2 Other sources 5.0 5,8 6,0 z.z 8,1 Total 8.2 7.9 9.8 ll. 7 11. 3 Cut bars and rods: Carbon: Producers' U.S. ship- men ts . 90.7 93.1 95.8 94.0 93.4 U.S. imports from- - Brazil 1.2 1. 2 . 9 1. 7 1.0 Other sources 8.1 5.Z 3.2 4.3 5.6 Total 9.3 6.9 4.2 6.0 6.6 Alloy: Producers' U.S. s.hip- men ts 91. 3 92.8 90.8 91.0 91.1 U.S. imports from- - Brazil . 2 .8 . 9 1.0 .8 Other sources 8 5 6 4 8.4 8.0 8.0 Total 8.7 7.2 9.2 9.0 8.9 Carbon and alloy: Producers' U.S. ship- men ts 91.0 93.0 94.0 92.6 92.4 U.S. imports from- - Brazil .8 1.0 . 9 1.4 . 9 Other sources 8.3 6.0 5.1 6.0 6.7 Total 9.0 7.0 6.0 7.4 7.6 Note.--Because of rounding, shares may not add to the totals shown. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission and from official statistics of the U.S. Department of Commerce. I-106 Table 33B Free-machining steel product~: U.S. ·shipments of domestic product, u.s-. imports, and apparent U.S. conswnption, by products, 1989-91, January-March 1991, and January-March 1992 Jan. -Mar, - - Item 1989 1990 1991 I99I 1992 Quantity (short tons) Semifinished: Carbon: Producers' U.S. ship- ments ... 840' 712 893,553 694,517 144,220 224,217 U.S. imlorts from- - · Brazi .. *** *** *** *** *** Other sources *** *** *** *** *** Total 83.246 69,I4o 68,365 23,618 27,962 Apparent consum- ption . 923,958 962,693 762,882 167,838 252,179 Alloy: Producers' U.S. ship- ments ... 87,785 102,075 76,539 23,682 21,873 U.S. imlorts from-·- Brazi .. *** *** *** *** *** Other sources ., . *** *** *** *** *** Total ..... 2,948 6, no 9,049 1.5U I.089 Apparent consum- ption .... 90,733 108,245 85,588 . 25' 193 . 22 '962 Carbon and alloy: Producers' U.S. ship- men ts 928,497 995,628 771, 056 167,902 246,090 U.S. imlorts from- - Brazi .. .. *** *** *** *** ***Other sources *** *** *** *** *** Total 86,I94 -75,310 77 ,414 25,129 29,051 Apparent consum- pt ion 1,014,691 1,070,938 848,470 193,031 275,141 Bars and rods: Carbon: Producers' U.S. ship- ments ... 820' 711 :851,428 661,564 152,961 212,434 U. S .. imlorts from- - Brazi .. *** *** *** *** ***Other sources *** *** *** *** ***Total ~72,855 257,Z69 263,313 45 ,oII 48,378 Apparent consum- ption . 1,093,566 1,109,197. 924' 877 197 '972 ' 260,812 Alloy: Producers' U.S. ship- ments ... 85,229 93,976 73,562 24,207 20,091 U.S. imlorts from- - Brazi .. *** *** *** *** *** Other sources *** *** *** *** ***Total I6, 392 H,457 I6;466 3,712 2,501 Apparent consum- ption . 101,621 105,433 90,028 27,919 22,592 Carbon and alloy: Producers' U.S. ship- men ts ...... 905,940 ·945,404 735,126 177'168: 232,525 U.S. imlorts from-- Brazi . . . . . *** . *** *** *** ***Other sources *** *** *** *** *** Total . 289,247 269,226· 279, 779 48,7B 50,879 Apparent consum- pt ion 1, 195, 187 1, 214, 630 1,~14,905. 225~S91 283.404 --Continued on next page. I-107 Table 33B--Continued Free-machining steel products: U.S. shipments of domestic product, U.S. imports, and apparent U.S. consumption, by products, 1989~91, January-March 1991, and · January-March 1992 · . Item ,. · Semifinished: Carbon: Producers' U.S. ship- ments U.S. imports from-- Brazil .. Other sources Total Apparent consum- ption Alloy: Producers' U.S. ship- ments ... U.S. imports from-- Brazil .. Other sources Total Apparent consum- ption .... Carbon and alloy: Producers' U.S. ship- ments ... U.S. imports from-- Brazil .. Other sources Total Apparent consum- ption Bars and rods: Carbon: Producers' U.S. ship- ments ... U.S. imports from-- Brazil .. Other sources Total . . . Apparent consum- ption Alloy: Producers' U.S. ship- ments U.S. imports from-- Brazil .. . Other sources Total ..... . Apparent consum- ption . Carbon and alloy: Producers' U.S. ship- ments ... U.S. imports from-- Brazil .. Other sources Total . . . . . Apparent consum- ption . --Continued on next page. 1989 275,441 *** *** 32.258 307,699 48,017 *** ***1. 368 49,385 323,458 *** *** 33.626 357,084 414,121 *** ***128.123 542,244 62,556 *** ***11. 370 73,926 476 '677 *** *** 139.493 616.170 Jan. -Mar. - - 1990 1991 1991 1992 Value (1.000 dollars) 288,078 *** *** 26.351 314,429 47,683 *** *** 4.170 51,853 335,761 *** *** 30.521 366,282 420,641 *** ***117. 766 538,407 67,057 *** ***8.220 75,277 487 ,'698 *** ***125.986 613.684 227,670 *** ***26.146 253,816 36 '032 *** *** 6.873 42,905 263,702 *** *** 33.019 296,721 323,423 *** *** 121. 595 445,018 50,096 *** *** 12.662 62,758 373,519 ****** 134.257 507. 776 47,595 *** *** 9.260 56,855 11, 431 *** ***1.147 12,578 59,026 *** *** 10.407 69,433 77,212 *** ·*** 19.389 96,601 17,000 *** *** 2.902 19,902 94,212 *** ***22.291 116.503 75,081 *** ***· 9.997 85 ,078 9,867 *** ***885 10,752 ·84,948 *** *** 10.882 95,830 107,327 *** *** 19.999 127,326 13,536 *** *** 2 .013 15,549 120,863 *** ***22.012 142.875 I-108 Table 33B--Continued Free-machining steel products: U.S. shipments of domestic product, U.S. imports, and apparent U.S. consumption, by products, 1989-91, January-Karch 1991, and January-March 1992 Jan, -MaJ: 1 - - Item 1989 l22Q 1991 1991 1992 Share of the quantity of U.S. consumption (Juu::Sientl Semi finished: Carbon: Producers' U.S. ship- men ts . . . . . 91.0 92.8 91.0 85.9 88.9 U.S. imports from-- Brazil *** *** *** *** *** Other sources *** *** *** *** *** Total . . . 9.0 7.2 9.0 14.1 11.1 Alloy: Producers' U.S. ship- ments . . . 96.8 94.3 89.4 94.0 95.3 u.s. imports from- - Brazil *** *** *** *** *** Other sources *** *** *** *** *** Total . . 3.2 5.7 10.6 6.0 4. 7 Carbon and alloy: Producers' U.S. ship- ments . . . . 91.S 93.0 90.9 87.0 89.4 U.S. imports from-- Brazil *** *** *** *** *** Other sources *** *** *** *** *** Total . 8.5 7.0 9.1 13.0 10.6 Bars and rods: Carbon: Producers• U.S. ship- men ts . . . . . . 75.0 76.8 71.5 77.3 81.5 U.S. imports from- - Brazil *** *** *** *** *** Other sources *** *** *** *** *** Total . . 25.0 23.2 28.5 22.7 18.S Alloy: Producers' U.S. ship- men ts . . . . 83.9 89.l 81. 7 86.7 88.9 U.S. imports from-- Brazil *** *** *** *** *** Other sources . *** *** *** *** *** Total . . . 16.l 10.9 18.3 13.3 11.l Carbon and alloy: Producers• U.S. ship- men ts . . . . 75.8 77 .8 72.4 78.4 82.0 U.S. imports from-- Brazil . . . . *** *** *** *** *** Other sources . . . . . . *** *** *** *** *** Total . . 24,2 22.2 27.6 21.6 18.0 --Continued on next page. I-109 Table 33B--Continued Free-machining steel products: U.S. shipments of domestic product, U.S. imports, and apparent U.S. consumption, by products, 1989-91, January-March 1991, and January-March 1992 Item Semifinished: Carbon: Producers' U.S. ship- ments U.S. imports from-- Brazil Other sources Total Alloy: Producers' U.S. ship- ments .. U.S. imports from-- Brazil Other sources Total Carbon and alloy: Producers' U.S. ship- ments U.S. imports from-- Brazil Other sources Total Bars and rods: Carbon: Producers' U.S. ship- ments U.S. imports from-- Brazil Other sources Total Alloy: Producers' U.S. ship- ments U.S. imports from-- Brazil Other sources Total Carbon and alloy: Producers' U.S. ship- ments U.S. imports from-- Brazil Other sources Total 1989 1990 Share of the 89.5 *** *** 10.5 97.2 *** *** 2.8 90.6 *** *** 9.4 76.4 *** *** 23.6 84.6 *** *** 15.4 77.4 *** *** 22.6 91. 6 *** *** 8.4 92.0 *** *** 8.0 91. 7 *** *** 8.3 78.1 *** *** 21. 9 89.1 *** *** 10.9 79.5 *** *** 20.5 Jan. -Mar. - - 1991 1991 1992 value of U.S. consumption (percent) 89.7 *** *** 10.3 84.0 *** *** 16.0 88.9 *** *** 11.1 72. 7 *** *** 27.3 79.8 *** *** 20.2 73.6 *** *** 26.4 83.7 *** *** 16.3 90.9 *** *** 9.1 85.0 *** *** 15.0 79.9 *** *** 20.1 85.4 *** *** 14.6 80.9 *** *** 19.1 Note.--Because of rounding, shares may not add to the totals shown. 88.2 *** *** 11.8 91.8 *** *** 8.2 88.6 *** *** 11.4 84.3 *** *** 15.7 87.1 *** *** 12.9 84.6 *** *** 15.4 Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission and from official statistics of the U.S. Department of Commerce. 1-110 Table 33C . All special quality steel products: U.S. ·shipments: of domestic product, U.S. imports, and appare'nt U.S. consumption, by products, 1989-91, :Janu·ary-March 1991, and January-March 1992 · · . . , Semifinished: Carbon: Producers' U.S. ship- ments . . . . . . . U.S. imports from- - . Brazil . . . . . . Other sources Total ·Apparent consum- ption Alloy: Producers' U.S. ship- ments . . . . . . U.S. imports from-- Brazil ... Other sources Total ... Apparent consum- ption .... Carbon and alloy: Producers' U.S. ship- ments . . . . . . U.S. imports from-- Brazil . . . . . .Other sources Total ... 1989 1990 1991 1991 1992 -·· Quantity (short tons) 3,547,850 4,117,781 132,935 107,583 258:983 338:647 391 918 446 230 3,939,768 4,564,011 1,615,932 39,686 75.123 . 114.809 1,730,741 5,t63,782 172,621 334.106 506. 727 1,844,641 32,747 77.156 109.903. 1,954,544 5,962,422 140,330 415.803 556 .133 3,488,174 145' 292 331:590 3,965,056 1,595,542 67,683 71.482 139.165 1,734,707 616.047 920,777 t,075,319 165 757 1,086,534 36.630 453,2?2 202.387 36,163 143:338 179 501 1,254,820 34.994 448,942 1,489,267 53,166 161. 329 214.495 Apparent consum- ption . . . . . .. 5, 670, 509 Bars and rods (including imports . of semif inished) : 6,518,555 5,699,763 1,539,806 l,7'03,762 ·Carbon: Producers' U.S. ship- ments U.S. imports from-- Brazil .. Other sources Total Apparent consum- ption .... Alloy: Producers' U.S. ship- ments . . . . . . U.S. imports from-- Brazil . . . . . Other sources Total . Apparent consum- ption .... Carbon and alloy: Producers' U.S. ship- ments U.S. imports from-- Brazil .. Other sources . . Total . . . . . . Apparent consum- ption .... --Continued on next page. 4 ' 6 56 ' 52 6 4 ' 669 ' 7 81 4 ' 318 ' 15.5 1,051,300 53,894 302.720 158,608 1.662.369 1. 820. 977 6,477 ,503 1,307,398 338. 215 1,645,523 5,963,834 201,435 1. 957. 757 2.159.192 8.123.026 135,657 1. 564. 354 i. 100 .on 6,369,792 1,462,222 46,420 245. 771 292.191 1,754,413 6,132",003 182 ,077 1.810.125 1. 992. 202 8.124.205 174,721 1. 342 ,'481 1. 517,. 202 5,835,357 1,678,581 356.614 1,407,914 328,926 19,156 66.227 85.383 _414, 309 5,651;901 -1,38Q,226 1. 862 .037 7.513.938 73,050 368.947 441.997 1.822.223 1,203,180 40, 722 451.433 492.155 1,695,335 94.182 436,738 1,545,736 61,516 524.821 586.337 2.132.073 I-111 Table 33C--Continued All special quality steel products: U.S. shipments of domestic product, U.S. imports, and apparent U.S. consumption, by ·products, 1989-91, January-March 1991, and January-March 1992 Item Semi finished: Carbon: Producers' U.S. ship- ments . . . . . . U.S. imports from-- Brazil . . . . . Other sources Total Apparent consum- ption . Alloy: Producers' U.S. ship- ments U.S. imports from-- Brazil .. Other sources Total Apparent consum- ption .... Carbon and alloy: Producers' U.S. ship- ments U.S. imports from-- Brazil .. Other sources . Total . 1989 1,137,628 129.937 1,267,565 690,083 16,846 32.897 49.743 739,826 1,827,711 58,722 120: 958 179 680 Apparent consum- ption ....... 2,007,391 Bars and rods (including imports of semifinished): Carbon: Producers' U.S. ship- ments ..... . U.S. imports from-- Brazil ..... Other sources Total Apparent consum- ption .... Alloy: ' Producers' U.S. ship- ments U.S. imports from-- Brazil .. Other sources Total Apparent consum- ption .... Carbon and alloy: Producers' U.S. ship- ments U.S. imports from-- Brazil .. Other sources Total . Apparent consum- ption .... --Continued on next page.· 2,029,636 53,631 666:333 2,749,600 815,386 18,586 158.850 177 .436 992,822 2,845,022 72,217 825:183 3.742.422 1990 1991 Value (1.000 dollars) 1,221,802 28,738 103.468 132 ! 206 1,354,008 743,929 13' 136 33.016 46.152 790,081 1,965,731 41,874 136:484 2,144,089 2,025,568 40,807 600:602 641 409 2,666,977 l5l. 726 1,005,856 2,879,698 60, 117 P3:018 93 135 3.672.833 1,065,213 39,375 100!138 139 I 513 1, 204' 726 655,521 27,649 26.238 53.887 709,408 1, 720, 734 67,024 126:376 193 400 1,914,134 2,229,381 51,022 514:629 565 651 2,795,032 760,742 33,968 135.501 169.469 930' 211 2,990,123 84,990 650:130 3.725.243 272 ,073 13,032 36.645 49.677 321,750 178,481 6,230 7.747 13, 977 192,458 450,554 19,262 44:392 63 654 514,208 443,168 16,645 112:162 128 807 571, 975 192,920 8,100 34.697 42.797 235' 717 636,088 24,745 146:859 171 604 807.692 317,349 9,556 42.~08 52. 64 369,613 12.464 177,680 547,293 496,767 11, 840 160:1£8 172 0 8 668,785 43.391 237,099 690,475 19,657 195:l5~215 0 905.884 I-112 Table 33C--Continued· All special quality steel_products: U.S. shipments of domestic product, U.S. imports, and apparent U.S. consumption, by products, 1989-91, January-March 1991, and January-March 1992 Jan. -Mar. - - Item 1989 1990 1991 1991 1992 Semifinished: Carbon: Producers' U.S. ship- ments U.S. imports from-- Brazil Other sources Total Alloy: · Producers' U.S. ship- ments U.S. imports from-- Brazil Other sources Total Carbon and alloy: Producers' U.S. ship- ments . U.S. imports from-- Brazil Other sources Total . . . . Bars and rods (including imports of semifinished): Carbon: Producers' U.S. ship- ments U.S. imports from-- Brazil Other sources Total . . Alloy: Producers' U.S. ship- ments U.S. imports from-- Brazil Other sources Total . Carbon and alloy: Producers' U.S. ship- ments U.S. imports from-- Brazil Other sources Total ... --Continued on next page. Share of the quantity of U.S. consumption (percent) 90.1 3.4 6.6 9.9 93.4 2. 3. 4.3 6.6 91.1 3.0 5.9 8.9 71.9 2.4 25.7 28.1 79.4 2.6 18.0 20.6 73.4 2.5 24.l 26.6 90 .. 2 2.4 7.4 9.8 94.4 1. 7 3.9· 5.6 91.5 2.2 6.4 8.5 73.3 2.1 24.6 26.7 83.3 2.6 14.0 16.7 75.5 2.2 22.3 24.5 88.0 3.7 8.4 12.0 92.0 3.9 4.1 8.0 89.2 3.7 7.1 10.8 74.0 3.0 23.0 26.0 79.5 4.8 15.7 20.5 75.2 3.4 21.4 24.8 84.7 4.2 11. l 15.3 91. 9. 3.4 4.7 8.1 86.9 4.0 9.2 13.l 74.7 3.8 21. 5 25.3 79.4 4.6 16.0 20.6 75.7 4.0 20.2 24.3 85.7 2.9 11.4 14.3 92.2 3.8 4.0 7.8 87.4 3.1 9.5 12.6 71.0 2.4 26.6 29.0 78.4 4.8 16.8 21.6 72.5 2.9 24.6 27.5 I-113 Table 33C--Continued All special quality steel products: U.S. shipments of domestic product, U.S. imports, and apparent U.S. consumption, by products, 1989-91, January-March 1991, and January-March 1992 Item Semi finished: Carbon: Producers' U.S. ship- ments . . U.S. imports from-- Brazil Other sources Total Alloy: . Producers' U.S.ship- ments U.S. imports from-- Brazil Other sources Total Carbon and alloy: Producers' U.S. ship- ments . U.S. imports from-- Brazil ... Other sources Total .. Bars and rods (including imports of semifinished): Carbon: Producers' U.S. ship- ments ... U.S. imports from-- Brazil Other sources Total Alloy: Producers• U.S. ship- ments .. U.S. imports from-- Brazil Other sources Total . Carbon and alloy: Producers' U.S. ship- ments U.S. imports from-- Brazil . Other sources Total 1989 Jan. -Mar. - - 1990 1991 1991 1992 Share of the value of U.S. consumption (percent) 89.7 3.3 6.9 10.3 93.3 2.3 4.4 6.7 91.0 2.9 6.0 9.0 73.8 2.0 24.2 26.2 82.1 1. 9 16.0 17.9 76.0 1. 9 22.0 24.0 90.2 2.1 7 6 9.8 94.2 1. 7 4.2 5.8 91. 7 2.0 6.4 8.3 75.9 1. 5 22.5 24.1 84.9 1. 9 13 2 15.l 78.4 1. 6 20.0 21.6 88.4 3.3 8 3 11.6 92.4 3.9 3.7 7.6 89.9 3.5 6.6 10.1 79.8 1. 8 18.4 20.2 81. 8 3.7 14 6 18.2 80.3 2.3 17.5 19.7 84.6 4.1 11 4 15.4 92.7 3.2 4.0 7.3 87.6 3.7 8.6 12.4 77.5 2.9 19.6 22.5 81.8 3.4 14.7 18.2 78.8 3.1 18.2 21.2 Note.--Because of rounding, shares may not add to the totals shown. 85.9 2.6 11 6 14.1 93.0 3.6 3.5 7.0 88.2 2.9 8.9 11.8 74.3 1.8 24.0 25.7 81. 7 3.3 15 0 18.3 76.2 2.2 21. 6 23.8 Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission and from official statistics of the U.S. Department of Commerce. 1-114 Prices . Market Characteristics The special quality carbon and alloy hot-rolled steel bars and semi- finished products subject to this investigation are used in the automobile, heavy equipment, and farm machinery industries and other major sectors of the U.S. economy. While large quantities of these steel products are sold dir.ectly to large manufacturers to be further processed for use in final products, significant quantities are also sold to independent forgers, cold finishers, steel distributors, and other classes of customers. Producers and importers have indicated that demand for these products has generally declined since 1989 as a result of the recession and the declining U.S. market.share of the major domestic auto producers. Domestic producers and importers of these steel products may quote prices on either an f .o.b. or a delivered basis or both depending upon the particular supplier's policy. *** ***importers of Brazilian products, some reported that they quote f .o.b. prices while others reported that they quote delivered prices. All of the major domestic producers publish price lists, but 'policies on discounting from the list prices vary by company. ***. 92 In c'ontrast to the domestic producers, none of the importers of the Brazilian products use price lists. Special quality carbon and alloy hot-rolleq steel bars and rods and semifinished products are commonly sold on either a contract or spot basis by domestic producers and importers from Brazil. Contract periods reportedly. range in length from 3 months to 3 years. Under the contract terms, price and quantities are commonly fixed for the agreed upon period and, in some cases. the contract allows for a premium to be charged for sub-minimum shipments. 93 Ferrostaal has ***· ***• Caterpillar is officially the importer of record for the subject steel products. 94 However, *** Special quality carbon and alloy hot-rolled steel bars, rods, and semifinished products are sold throughout the continental United States,' although some of the individual suppliers indicated that they focus on particular regions. *** sell mainly in the East and the Midwest, whereas ***'s sales are primarily in the Great Lakes area. ***stated that its sales of the Brazilian products are concentrated in the Gulf Coast, Midwest, and .West Coast regions. ***• another importer, sells mainly in the Gulf region, and ***'s sales are primarily in the Southeast and the Midwest. The majority of shipments of these products are made by truck, and the largest share of shipments are within a 500-mile radius of the producer's plant or the importer's point of shipment within the United States. 92 Telephone interview with***· 93 *** 94 Postconference brief of Powell, Goldstein, Frazer & Murphy for Caterpillar; p. 4, fn 1. I-115 Transportation costs account for a relatively small share of the total delivered prices of these steel products when shipping distances are 500 miles or less, but these costs can increase significantly for shipments beyond a 500-mile radius. Producers and importers reported that these costs range from *** to *** percent of the delivered price for shipments of less than 500 · miles. However, *** reported that its shipping costs average *** percent of the deliver.ed price for distances of more than 500 miles, and *** reporte,d that its costs for· these longer-distance shipments averaged *** percen.t of the delivered price. Evidence obtained in the investigation l~dicates th~t pr.oducers and. importers generally regard the domestic and imported special quality carbon and alloy hot-rolled steel bars anq rods and semifinished products from Brazil as essentially equivalent in quality. However, lead times for delivery .of the domestic products to steel customers are significantly shorter than those for the Brazilian products. Domestic lead times ranged from as little as one week for high volume items to as much as two months for more specialized products. In contrast, lead times for delivery of imports from Brazil ranged from ... three to five months. 95 · · Questionnaire Price Data Because of the very wide range of products covered by this investigation, the petitioner and a representative of the respondent were consulted extensively in selecting products for the purpose of obtaining prices on items that are commonly sold by both producers and importers. The seven selected products are shown below. For each of these products, producers and importers were asked to provide f.o.b. and d~livered prices for their largest sales in each quarter as well as total quantities arid values shipped in all quarters during January 1989-March 1992. · ' Product Categories Product 1: Carbon, semifinished, SAE-1548, 5.0"-7.5" round cornered squares and rounds. Product 2: Alloy, semifinished, SAE-4130, 5.0"-8.0" round cornered squares and rounds. Product 3: Hot-rolled carbon bar, SAE-1040, 3.5" round cornere~ squares. Product 4: Hot-rolled carbon bar, SAE-1045, 3.5" round cornered squares. Product 5: Hot-rolled alloy bar, SAE-4120, 2. 5"-4 .'0" rounds and round cornered squares. Product 6: Hot-rolled alloy bar, SAE-4140, 2.5"-4.0" rounds and round cornered squares. Product 7: Hot-rolled finished, SAE-ll44, 6" round bars. 95 However, evidence on the record also indicates that *** I-116 *** producers representing *** percent of total U.S. shipments of the products under investigation provided varying amounts of price information. For most of the product categories, ***producers provided a significant amount of price information and, in those cases, individual producers did not report prices in all quarters. Only*** importers provided price information in their questionnaires .. When contacted by the staff, the importers repeatedly stated that they did not sell Brazilian products that fit into the seven categories listed in the questionnaire. Efforts by the staff to encourage the importers to provide quarterly prices on other product categories that they commonly sell in competition with domestic producers were generally unsuccessful. 96 Despite these problems, the information obtained did provide information on trends in prices, and some. comparisons between domestic and import prices were possible. Price Trends Quarterly prices of domestic and imported products 1-6 are shown in tables 34 through 38. 97 The most complete domestic price data were obtained for product categories 1 and 6. The data show that prices of product 1 ***· Prices of product 6, which represent largely complete data from four domestic producers, show evidence of a downward trend during the 3-year period despite frequent, small fluctuations. The weighted-average price of this product ranged from a high of $*** in the fourth quarter· of 1989 to a low of $*** in ·the third quarter of 1991. In the case of product 5, it is clear that the price of ***· However, no clear trend in prices of product 5 is evident for the 3-year period. The other price data provided by domestic producers were not sufficient for determining trends. The prices shown for product 2 .· · represent a combination of ***· However, the data do indicate that prices were generally ***· The price data for products 3, 4, and 7 were larg~ly incomplete. 98 Prices of product 7, which are not shown in a table, were only available for three quarters. Most of the importer price data were too incomplete to determine trends. In the case of product 2, the data in table 2 show·***· Price Comparisons - Price comparisons between domestic and imported products were possible in 30 quarters during the 3-year period, for products 1, 2, 4, 5, and 6. In 14 cases the import price was lower than the domestic price, in 14 cases the import price was higher, and in the other 2 cases the domestic and import prices were approximately the same. *** 96 When contacted by the staff, ***· 97 When possible, weighted-average prices were computed for the domestic products. However, in many of the quarters the prices represent sales by only one producer or importer. 98 *** I-117 Table 34 Weighted-average net f .o.b. prices of product 1 reported by U.S. producers and importers, margins of underselling (overselling), and total shipments, by quarters, January 1989-March 1992 * * * * * * * Table 35 Weighted-average net f.o.b. prices of product 2 reported by U.S. producers and importers, margins of underselling (overselling), and total shipments, by quarters, January 1989-March 1992 * * * * * * * Table 36 Weighted-average net f .o.b. prices of product 3 reported by U.S. producers and product 4 reported by U.S. producers and importers, margins of underselling (overselling), and total shipments, by quarters, January 1989-March 1992 * * * * * * * Table 37 Weighted-average net delivered prices of product 5 reported by U.S. producers and importers, margins of underselling (overselling), and total shipments, by quarters, January 1989-March 1992 * * * * * * * Table 38 Weighted-average f.o.b prices of product 6 reported by U.S. producers and importers, margins of underselling (overselling), and total shipments, by quarters, January 1989-March 1992 * * * * * * * I-118 In their posthearing brief the respondents presented data from two large purchasers, *** and Norris Cylinder, that compared prices paid for domestic products and imports from Brazil. *** Both sets of data indicated that domestic and import prices were close to each other during the period indicated. 99 However, these data were strongly challenged by the petitioners and parties in support of the petition. Questions were raised concerning the · accuracy of the importer's shipment data, the prices reported, and the description of the product categories. 100 Exchange Rates Quarterly data reported by the International Monetary Fund indicate that during January 1989-March 1992 the nominal value of the Brazilian cruzeiro steadily decreased, ending the period at nearly 100 percent below its initial value (table 39). 101 Adjusted for movements in producer price indexes in the United States and Brazil, the real value of the Brazilian currency showed a net depreciation of 4.3 percent relative to the dollar between January-March 1989 and the first quarter of 1992. Lost Sales and Lost Revenues In their questionnaire responses, domestic producers provided a total of 32 lost sales allegations relating to imports from Brazil that involved over 220,000 short tons of special quality carbon and alloy hot-rolled steel bars and rods and semifinished products valued at over $120 million. They also provided 22 lost revenue allegations valued at over $9 million on sales of over 100,000 short tons. The staff contacted purchasers at *** companies to investigate the allegations. *** alleged that it lost revenues of $*** on. sales of *** categories of products to ***· during*** as a result of competition from imports from Brazil. *** stated that it was forced to reduce the delivered value of its quotations on sales of*** tons of steel products from $*** to $***· *** acknowledged that the allegations were generally true. He said that during *** had threatened to increase its purchases of low-priced imports from Brazil unless domestic producers reduced their prices on the specified products. However, ***believed that the actual percentage reduction in prices and lost revenues was smaller than the alleged amounts. *** further stated that *** has always bought most of its special quality steel products from domestic producers and has purchased only small amounts of imports from Brazil. He said that prices of the Brazilian imports are lower than domestic prices and that in many cases the quality of these imports is superior to the domestic product. However, he said that his 99 Postconference brief of Willkie, Farr and Gallagher for Villares, Exh. 8 and 9. 100 See July 9, 1992, letters to Mr. Bardos from Wiley, Rein & Fielding for Bethlehem Steel and Inland Steel Bar; and July 10, 1992, letter to Mr. Bardos from Stewart & Stewart for Republic and Timken. 101 International Financial Statistics, June 1992. I-119 Table 39 Exchange rates: 1 Indexes of nominal and real exchange rates of the Brazilian cruzeiro, and indexes of producer prices in the United States and Brazil, 2 by quarters, January 1989-March 1992 U.S. Brazilian Nominal Real producer producer exchange exchange Period price index price index rate index rate index 3 1989: ~ January-March ....... 100.0 100.0 100.00 100.0 April-June .......... 101.8 129.1 84.12 106.7 July-September ...... 101.4 303.6 37.92 113.5 October-December .... 101. 8 878.5 14.52 125.3 1990: January-March ....... 103.3 4,201.2 3.84 156.1 April-June .......... 103.1 8,137.9 1.85 145.8 July-September ...... 104.9 10,947.3 1. 36 141.6 October-December .... 108.1 16,375.5 0.78 117.9 1991: January-March ....... 105.9 26,646.4 0.45 113.3 April-June .......... 104.8 34,545.8 0.35 116.2 July-September ...... 104.7 48' 541.1 0.26 119.2 October-December .... 104.8 88,992.0 0.13 108.0 1992: 154' 8.10. 34 95. 74 ·'· January-March ....... 104. 6 0.06 1 Exchange rates expressed in U.S. dollars per Brazilian cruzeiro. 2 Producer price indexes--intended to measure final product.prices~-are based on period-average quarterly indexes presented in line 63 of the International Financial Statistics. , .. 3 The real exchange rate is derived from the nominal rate adjusted for relative movements in producer prices in the United States and Brazil. 4 Derived from Brazilian price data reported for January-F~brμary only. Note.--January-March 1989 - 100. The real exchange rates, calculated from precise figures, cannot in all instances be derived accurately r'rom previously rounded nominal exchange rate and price indexes. ~ource: International Monetary Fund, International Financial .s.tatistics, June 1992. 1-120 company purchases mostly from domestic producers because their shorter de~.i.yery lead times make it eas:i,er for *** to manage its inventories. **~ alleged that it lost revenues of $*** on total sales of *** short tons of*** to***• due to import competition from Brazil. ***also alleged that it.lost *** short tons of*** valued at $*** to*** as a result of this compe.t'ition. *** denied the lost revenue allegation. He said that *** had not pci'rchased the products described in the allegation from any source during *** *** could not confirm or deny the lost sales allegation, although he believed that the volume described in the allegation was too large. ***said that ***'s purchases of imports from Brazil during*** He said that most of those imports had previously gone to ***· *** alleged that it lost revenues of $*** on sales of *** short tons of products in the *** series between *** as a result of competition from imports from Brazil to ***• as a result of competition from imports from Brazil: *** further alleged.that it lost sales of*** short tons of*** categories of products in the *** series valued at $*** during *** as a result of this impc)°rt competition. *** denied the lost revenue and lost sales allegation. He said that his company does purchase imports from Brazil, but that the largest share of his purchases are from domestic producers. *** further stated that*** is ***'s largest supplier of special quality steel products because·of ***· ~** alleged that it lost revenues of $*** on sales of *** categories of ***products to***• in*** due to competition from Brazilian imports. *** denied the allegation. He said that all of ***'s purchases for*** had been negoti~ted in***• and that no additional negotiation for sales occurred in *** · *** s~id 'th~t his company buys primarily from domestic sources. He ·said :.th~t ·hi;s,"crimpariy bought approximately *** tons of domestic s·pecial quality steel products and about*** tons of Brazilian imports' in*** Ho~ever, *~*has not purchased any Brazilian imports ***· ·. . ' . - . . . . ' . - .; ~ . : . . . - : · .. *** .. f~rther st'ated that prices of Brazilian imports were far lower than ·donlestic ~prices in the early 1980s, but that the differential has narrowed significantly since that time. He believes that Brazil's prices are lower for 'carbon ~teel ·pro~ucts, b~t are often higher for al~oy steel products. .. . : . - . . . *** provided a large number of lost revenue and lost sales all~gations relating to ~**· The lost sales allegations, which involved transactions during'·***, ~~re 'valued at $***, and the' lost revenue allegations were valued at $***· *** denied the allegations. He said that his ***has been increasing its purchases of domestic special quality steel products and reducing purchases of imported Brazilian products because of their higher prices relative to comparable domestic products. He said that *** has reduced its purchases of Brazilian imports from about *** percent of its total purchases of special quality steel two years ago to about *** percent a year ago. He said that purchases of these imports have continued to decline in the past year and now account for only about*** percent of ***'s purchases of special quality steel products. 1-121 *** provided *** separate lost revenue allegations and *** separate lost sales allegations, all relating to *** The lost revenue allegations were valued at $***• and the lost sales allegations were valued at $***· *** denied all of the allegations. He said that his company did not reduce its purchases of the domestic products during the periods when the lost sales and lost revenues allegedly occurred. *** said that while *** seeks the lowest- priced quotes that it can obtain from its qualified suppliers, it does not use separate quotes of competing suppliers to bid down prices. *** also stated that all of its suppliers must undergo a rigorous qualification process before they are accepted as approved suppliers. Normally this process takes ***· Because of the lengthy qualification process that is required for approving new suppliers, his company prefers to continue providing business for its established suppliers instead of undergoing the complex process required to obtain new sources of supply. *** indicated that some Brazilian plants and some domestic plants have not beeri qualified thus far. *** said that *** divides its purchases between domestic sources and Brazil and ***· He said that its imports from ***have increased recently relative to those from Brazil because of lower prices. *** all provided a number of high-valued lost sales and lost revenues relating to *** However, *** A-1 APPENDIX A COMMISSION'S AND COMMERCE'S FEDERAL REGISTER NOTICES A-3 Federal Register I Vol. 57, No. 117 I Wednesday, June 17, 1992../ Notices (lnvestlptloa No. ?31-TA-572 {PNlllnlnmy) Certain Spedal Quality carbon and Alloy Hot-RoUed Steel Bara and Roda and Semlflnlshed Producta Thereof From Brull . AGENCY: United State1-lntemational Trade CommiHion. · Acnotc lnaUtution and scheduling of preliminary antidumpinginvestigation. SUMMARY: The Commiuion hereby gives notice of the matitutian of preliminary antidumping.investigation No. m-TA- 572 (Preliminary) under section.133(a) of the Tari.ff Act.of 1930 (19 U.S.C. 1673b(a)) to determine whether there ia a reasonable indication that .an industry in the United States is materially · . injured. or is threatened with material injury, or the establishment of an · industry_ in the United States is materially retarded. by reason of· imports from Brazil of certain 11pecial quality carbon and alloy hot-rolled steel bars and roda. and seimfinished producll thereof 1 awered by - subbeaclinga/ statistical reporting numbers 7267.11.00. 7207.12.DOlO. 7.207.19JJ030. 7207..20.0025, 7207.20JXJ75. 7214.30.00, 7214.40.00, 7214.50.00. 7214.60.00, 7224.10.D075. 7224.90.()()45, . 7224.90.0065, and 7228.30.80.of the Harmonized Tariff Schedule of the • United States. that are alleged to be sold in the United States at less than fair value. As provided in section 733(a) of the Tariff Act. the Commission must complete its preliminary antidwnping investigation in 45 days. or in this case by July 24. 1992. For further information concerning the conduct af this investigation and rules of general application, consult the Commission's Rules of Practice and Procedure, part 201, subparts A throguh E (19 CFR part 201), and part 207, subparts A and B(19 CPR part 201). EFFECTIVE DATE: June 9, 1992. FOR FURTHEll 1111FOllllATION CONTACT: Diane J. M8%ur (202-205-3184), Office of Investigations, U.S. International Trade Commission. 500 E Street SW., Washington. De 20436. Hearing-impaired persons an obtain information on this · matter by contacting the Commission'• TDD terminal on 202-205-1810. Persona Withmobility imp,ainnents who will need special assistance.in gaining access to the Commission should contact the Omce of the Secretary at 202-205-2000. IUPPUllDITARY INFORMATION: Background Thia investigation is being instituted in response to i petition filed on June 9, 1992. by Republic Engineered Steels, Inc.. Maaaillon. OH. and The Timken Company. Canton. OH. Participation in the laveatigation and Public Servica List. Persons (other thaD petitioners)° wishing to participate in this investigation a1 partie1 must file an 4700. 41111. 5000. IUJO. 1200. 1100. 8100. l8CIO. S7llO. - DIQ. 8300 and MOO: and lbe pade9 for botb cubclll·and certaiD alloJ bic1ude Boron and H- 1teela. 1'be lllbjecl lmprllta of .bot-rolled ban and rocU U9 in cul lqtba and variOUI allapn and . t!ml. 1'1le nbjact lmparU of_-jfizijohed producta · include cul certaill alloy 1teel iDIOla·and atrand c:ulinp. and 181111-wrousht illaDta and atrand c:utmp: and DaD&lloy and.certala doy 11ael rolled or foraecl blooml. billeta. ad llaba for foJ1liD8, if · cleaUn111cUor ue ID tb111 aubj111Ct hot-rolled ban and roda. £xcludecl &am th111 -Piii of lhlll invatiption ar111 lmporU of -lflniohad produc:ta or hot-rollad ban 8lld roda which coalain by w111l&bt O.D3 pen:ent or IDOl'll of lead M D.115 pereant or 11111t111 of biamuth: nCllUIUoy ateel inlOta or othlllr primary fa,_; 1111mifini1bad or hot-rolled producu of merclwlt q1l8lit1 atHla IAJS1 srada M 100ltthruvah M 10M); hol-cvu.d ban and roda ID cnilad form: fcnpd ban: and nlllfarclq ban and l'Dda. · A-4 Federal Register I Vol. 57, No. 111 I Wednesday, June 17. 1992 -/ Notices entry of appearance with the Secretary to the Commission as provided in § 201.11 and 207.10 of the Commission's rules. not later than seven (7) daya after publication of this notice in the Federal Register. The Secretary will prepare a public service list containing the names and addresses of all persons, or their representatives. who are parties to the investigation upon the expiration of the period for filina entries of appearance. Limited Disclosure of Business Proprietary lnfonnation (BPI) under an Administrative Protective Order (APO) and BPI Service List .Pursuant to I 207.7(a) of the Commission's rules. the Secretary will make BPI gathered in this preliminary investigation available to authorized applicants under the APO issued in the investigation, provided that the application is made not later than seven (7) days after the publication of this notice in the Federal Register. A separate service list will be maintained by the Secretary for those parties authorized to receive BPI under the APO. Conference. The Commission'• Director of Operations baa scheduled a conference in connection with thi1 investigation for 9:30 a.m. on June 30. 1992. at the U.S. International Trade Commiaaion Building. 500 E Street SW., Washington. DC. Parties wishing to participate in the conference should contact Diane Mazur (202-205-3184) not later than June 25. 199Z. to arrange for their appearance. Parties in support of the imposition of antidumping duties in thia investigatic;m and parties in opposition to the imposition of such duties will each be collectively allocated one hour within which to make an oral presentation at the conference. A nonparty who bas testimony that may aid the Commission's deliberations may request permission to present a short statement at the conference. Written Submissions · & provided in I 201.8 and 207.15 of the Commission'• rules. any person inay submit to the Commjpion on or before July 6. 1992. a written brief containing information and arguments pertinent to the subject matter of this investigation. Parties may file written testimony in connection with their presentation at the conference no later than three (3) daye before the conference. If briefs Ol' written testimony contain BPL they must conform with the requirements of § 201.e. 207.3, and 7J11.7 of the C•1!T'.missinn's rules. In accordance with I 201.16(c) and 207.3 of the rules, each document filed by a party to this investigation must be served on all other parties to the investigation (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: Thia inve1tiaation ii being conducted under authority of the Tariff Act of 1930. tiUe VU. This notice ia published pursuant to I 207.12 of the Commiasion'1 rules. lsaued: June 12.. 199%. By order of the Commiasion. Kenneth R. MallCln. Secretary. [FR Doc. ez-14205 F'iled &-18-92: 8:45am) ~com 1ll2IMIMI -27065 A-5 Federal Register I Vol. 57, No. 129 ./·Monday, July 6, 1992 I Notices 29703 (A-351-813) Initiation of Afttldumplng Duty Investigation: Certain Alloy and Carbon Hot Rolled Bars, Roda and Semlflnished Products of Special Bar Qualtty Engineered Steel From Brazil AGENCY: Import Administration. . lnterantional Trade Administration. DepartJnentofConunerce. EFFECTIVE DATE: July 6, 1992. FOR FURTHER INFOAMA'nON·CONTACT: . Unda Pasden or Richard Weible. Office of Agreements Compliance. Import Administration. Intemational Trade Administration. U.S. Department of Commerce. 14th Street and Constitution Avenue. NW.. Washington. DC 20230: telephone: (202) 377-ot94 or (202) 377- 0159. respectively. Initiation The Petition ' On June 9, 1e9z. we received a petition. filed in proper farm by. The T"unken. Company and Republic Engineered Steels, Inc. In accordance with 19 CFR 353.12. petitionen allege that imports of certain alloy and carbon bot rolled bars, ~da. and semifinished products of special bar quality engineered steeL · (referred to aa SBQ ban and rods) from Brazil are being• or are likely to be, sold · in the United States at less than fair value within the meaning of section 731 or the Tariff Ac1 of 1930. as amended · (the Act), and that an industry in the United States it being materially injured. or is threatened with material injury, by reason or those imports. Petitionen have stated that they have atanding to file the petition because they are interested parties. as defined under section 771(9)(C} of the Act. and because they filed the petition on behalf of the U.S. industry producing the products that are subject to these investigations. U any interested party, as described under paragraphs (C}. (D}. (E), or (F) of section 771(9) of the Act. wishes to register suppon for, or opposition to. this petition. please rue. written notification .,... with tbaA I • Swc:aamyt Administration. Under the Deputmmt'• ,.,u.a- any producer or reteUer Nekiq exclusion from a potential antidumplllg duty order must submit Us request for exclusion within 30 daya of the date or the publication of this notice. The proceduree and requirementa resardlnt the filins of such requests are contained - in 19 CPR 353.14. United States Price and Foreign Market Value Petitionen pro\ided multiple . methodologiea for calculatiJl8 United . States price (USP) and foreign market value (FMV). We have analyzed on1J the pria.to-price allegations. JI necesauy at a later date. we will analyze petitioaen' alleptiOIUI lnvolvina constructed value. Petitionen estimate of USP is based on both actual price quotes to U.S. cuetomen on a deliYered baaia and IM 145 lmpgrt atatiatica. We relied only OD the actual price quotes aa a baiia for the calculation of USP. because for selected compariSODI. the IM 145 import statistics were not contemporaneou with home. market Price& Delivered priee1 were adfuated to reOect a FOB port-or-origin basi1. No further adjustments to U.S. price were made. Petitionen' estimate of PMV i1 baaed on actual invoice• and price quotationa to Brazilian cuetomen on an ex·worb basia. and home market price liata. Becauae of the hyperinOatton tbat exi9ta in Brazil. we excluded comparilona baaed an involca pricea. certain price quote~ and liat prices. because peUtionen did not submit contemporaneoua U.S. prices. We made compartaom only on the baaia of · contemporaneoua price quotes ID the U.S. and home markets. Petttionen deducted the ICMS state valulHldded tax from all domestic price quotatlona. Prtce quotationa were reported exclusive of all other taxes. Baaed on the 199% prtce-to-prica comparlaona of USP and FMV. petitionen allege dumpiq llUU'8fDa raqias from 11 to 18 percenL Initiation of lnvutigalion Pianuant to aec:tion 732(c) of the Act, the Department mut determine. withm 2D.,. after • petition .. filed. whether the petition aeta forth allepttona nec:euary far the lniHaUon of a antidumptq daty lnvestiptfon. and whether the petition contains lnfonulioD reuonaba, availabht to pelitionen aupporttq the allepllan& We baw mUUnined the petWon ud fOUIMl tbat It C01111Jh. with tt.. A-6 .... ·' '· , .. •' ·.r' .. rqlli-a ol 81d11Ja ~1 of U.Ac:L Thai.-- fn llCCOI... wi.. aecaoe. 732 of the Acr. we are inttt.tinl an antidwnpq chlty IDvellipdon D determine whtber imporll of SBQ bare and rode from Brntl are being. OI' are likely to be. aold In the United Sta tee at leu thaa fair vaNe. Uthe lnvesdpticm proceeds aormally. Wiit will make our · prelimiDary determination by November 18. 1992. Scop. o/ lnVNligalion r.mr.iuo. Tllll tNJmla 1211"2.D GUI 7'1111.20~ 722&1a.oa7L nKllDJJDllL 8DCl 7DIBDGOn' Altfloaslt tile HTS aubMedinga are pnmdect for comenienett and ciilitoma purposea. oar written deaaiption of the scope of then proceedings Is dispositfve. · Claa of Kbld lsme The DepartmeAt baa accepted. Cor purpoaea of thia illitiatioo. peUtioner'a claim that the aubject merchandise The prodw:ta covered by tbia compri.. ane dau or kind of inveatigation are cutain hot-finialaed merchandi ... However. given (1} the · carbon and alloy (other tbm atain'e-. clear dlalriDdioe normallJ maintained high speed. ailico-manp ...... aad tam in tbe lteel trade between aemifmiabed steel) steel ban and rods. other tbu pradla:U ad fiDWled produca sucb aa forged. which have a uniform iolicl ban and rod8. and f2) u·ex.amination of cro...Mctioll along their whole lenatJL the criteria uNd to evaluate Cla• or and are in the ahape of cirdu.188J118u&a. kind of merchandise. eatabllthed in of ciJclea. ovala. rectangJn. triaqlea. Of Dinnifi«I Ptoduca Y. Unillld Slatn. 8 other convex polyROaa.. and do DOt CIT 155 (18}, we question petitioners' conform to the definitinna for aemii- asaertion that the subject merchandise fin1abed steel. flat-rolled products. bot- comprises one class or kind of · rolled ban 8Dd roda in irregulady wound coila. reinforcing ban and roda. merchandiae. Therefore. we ue and wire. The aubjact. ban and roda are requesting all IDtuested parties to f --M•lb uali • --..1 •--' COmmenlOD the scope of tbeaa0 s.,_..._ ar q ty eDglUanra •- pmceedinn particularly whether the that are described ID. Society of - Automotive Eqineen (SAE} }t03. J40I. subject awcbaDdil8 fa tbi9 e&M 1411, J1081. J1249. 11288. and compdle9 om cla• ot kind of modiflcatioaa thereof. whether tbey t. ID8ldaandLae or more. Commeall abould domeati~ or foreign. of other. than be aubmittell ID the ANi8tant Secretary merchant quality pdn M 1900 throuail for Import Adminiatralim. Room 8-099. M 10M. not containfDa by weiabt O.D3 at the abcwa addnisa wutdn. tt da,. of percent or more of lead or G.OI pen:ent the pablk:atm of this aott.ce. or mo1e of bismuth. as claniflable under. ITC M Ii"·-·:.. ·the following subheadinp of the o f--'a Harmonized Tariff Schedule of the Section 132(d} of the Act requiree m United State• (HI'S): 7Zl4 30 0000. to notifJ the ITC of thne actions end we muo.amo. muo.omo. 7Zl4.40.0050. Jinit done IO. 7Zl4.50Jl010. 7214.50.0030, 7214 50 0050, mt.ao.mio. 7214.ADCXJIC\ 1ZJ'AD OOIO helJrainaty DlllertniDalioa by ITC 7ZZl.30.I005, and 7ZZ8 30 8050 d . b Alla included in the acope of thle The rrcwfll etermtne y July 24, IDvesUgaUon are certain alloy ingoll 199%, whether there •a ree90llable (other thaA staiDlm 11ffL hi......- indM;a1*on tbat ~of SBQ ban and ateeL 1iliCCHDaJl8Blll!9e steel. tool eteeL rode. and SBQ •emifintmed products and hfab-nickel alloy ateet). and aeml- from Brlllil. ant matertallJ injurin8 er fhUabecl producta of carboA ud alloy ttu.teD .-elial intmJ to. a U.S. (other than atainleu steeL lllab-.peed IDdum,.11 tbe rrc detmmmation ia ·steel. ailiCCHDaqaneee steel. tool ete9L neptlw. tbe blHatiptlon will be and hish·nickel alloy ateel} lleeL or tennlnatlld: odmwiM. the investigation circular or rectangular (includiq will promed accurdfna to 1tatutory and aqu.me) c:rou-tection with a widda regulatory tt.. limill. m.eaamtns 1818 than four tbne9 Thia notice ii publlahed pmsuant to tblclmeu. of apeclaJ bar qulitf aectton 13Z(c)f2' of tire Act and 19 CFR eqjaeered ateel thatareclucribad.IA 353.13(bJ. Society of Automotive Engineera (SAE} J403, J40I, 1411, 11081. 11249. 11288, and modlflcationa tbreaf. ......_ lheJ be domestic ar fmetp. not cantatmas bp weilbt o.m pen:eat or man of lad or · o.o5 ptllClllt ar mare of •tamalb. u d ..tifi".. ader &be fallawmf "!lh"-dtnpaf ab HIS: 78..n.Gmla Dated: Jwe a 191& AluM.Duaa. AaWonl s.:n1417for lrnport Adzninistralia& ___ ..... B-1 APPENDIX B LIST OF WITNESSES APPEARING AT CONFERENCE B-3 CALENDAR OF THE PUBLIC CONFERENCE June 30, 1992 Investigation No. 731-TA-572 (Preliminary) Certain Special Quality Hot-Rolled Carbon and Alloy Steel Products and Semifinihsed Products Thereof from Brazil Those persons listed below appeared at the United States International Trade Commission's conference held in connection with the subject investigation at 9:30 a.m. on Tuesday, June 30, 1992, at the U.S. International Trade Commission, 500 E Street, SW, Washington, DC. In support of the imposition of antidumping duties Stewart & Stewart--Counsel Washington, DC on behalf of-- Republic Engineered Steels, Inc. Timken Company Harold V. Kelly, V.P. & General Counsel, Republic Steve Higley, V.P.-Commercial, Republic John Sears, Controller, Republic Ed Hyde, Gen. Manager-Sales, Republic Larry R. Brown, V. P. & General Counsel, Timken Scott A. Scherff, Managing Attorney, Timken George Matthews, Chief Engineer-Process Engr., Timken Paul Guilfoyle, Gen. Manager-Sales, Timken Jim Holderbaum, Gen. Manager-Business Economics, Timken Eugene L. Stewart ) James R. Cannon, Jr.) -- OF COUNSEL Geert De Prest ) Wiley, Rein & Fielding--Counsel Washington, DC on behalf of-- Inland Steel Industries, Inc., including Inland Steel Bar Co. Joseph Alvarado, Gen. Mgr. Sales, Inland Steel Bar Co. Alan Price ) -- OF COUNSEL B-4 In opposition to the imposition of antidumping duties Willkie, Farr & Gallagher--Counsel Washington, DC on behalf of-- The Villares Group Len Luscomb, Norris Cylinder Co. Ed Baker, Ferrostaal Metals Corp. Bruce Malashevich, Pres., Economic Consulting Services William H. Barringer) Daniel L. Porter ) -- OF COUNSEL David E. Bond ) C-1 APPENDIX C GLOSSARY C-3 Glossary Carbon steel Carbon steel means all nonalloy steel which is usefully malleable and contains 2 percent or less carbon. In addition, any steel classified as other alloy steel solely because it contains 0.4 percent or more by weight of lead and/or 0.1 percent or more by weight of bismuth, is classified as being .of carbon steel for purposes of this investigation. Certain alloy steel Alloy steel other than stainless steel, high-speed steel, silico- manganese steel, or tool steel. Semif inished special quality carbon and certain alloy steel products Products of solid cross section, which have not been further worked than subjected to primary hot-rolling or roughly shaped by forging, and include cast certain alloy steel ingots and strand castings and semi-wrought ingots and strand castings; and nonally and certain alloy rolled or forged blooms, billets, and slabs that are destined for use in hot-rolled products. Semifinished carbon and certain alloy steel products are provided for in subheadings 7207.11, 7207.12, 7207.19, 7207.20, 7224.10 and 7224.90 of the Harmonized Tariff Schedule of the United States (HTS). Hot-rolled carbon and certain alloy steel products Carbon and certain alloy steel which has been reduced to its final thickness by heating and rolling ~he products at elevated temperature (usually above 2,200° F). The hot-rolled carbon steel products covered by this investigation are provided for in HTS subheadings 7213.20, 7213.31, 7213.39, 7213.41, 7213.49, 7213.50, 7214.30, 7214.40, 7214.50, 7214.60, 7227.90.60, and 7228.30.80. Flat-roll~d carbon steel products are not included in this investigation. For purposes of this investigation hot-rolled carbon steel products include the following: Ho~-rolled bars Hot-rolled products, whether or not in irregularly wound coils, which have a solid cross section along their length in shapes (and sizes) that include, but are not limited to: circles or segments of circles (from 0.20 to 12 inches in diameter), ovals, rectangles (including squares from 0.20 to 6 inches in width), flats (from 1/4 to 8 inches in width and from 0.23 to 4 inches in thickness), or other convex polygons (such as hexagonals and octagonals from 0.20 to 4 1/16 inches between parallel surfaces). These products do not include reinforcing bars. Cu~-length bars.--Hot-rolled bar products not in coiled form, including circles or segments of circles in cut-lengths having a diameter from 0.20 to 12 inches. C-4 Coiled bars.--Hot-rolled bar products in irregularly wound coils, including circles or segments of circles in coiled form having a diameter from 0.75 to 12 inches. Hot-r~lled rods Coiled, semifinished, hot-rolled products of solid cross section, approximately round in cross section, not less than 0.20 inch but less than 0.75 inch in diameter. These products do not include reinforcing rods. Non-lead/bismuth free-machining steel products Nonalloy (carbon) and certain alloy steel products (other than those containing lead or bismuth) containing by weight one or more of the following elements in the specified proportions: - 0.08 percent or more of sulfur - more than 0.05 percent of selenium - more than 0.01 percent of tellurium Lead and bismuth carbon and alloy steel products Hot-rolled products or semifinished products thereof as described above that contain by weight 0.03 percent or more lead, and/or 0.05 percent or more bismuth, whether in coils or cut lengths. These products may also contain other additives such as tellurium or selenium. Hot-rolled lead and bismuth carbon steel products are principally provided for in HTS subheadings 7213.20 and 7214.30. Machina~ility Machinability is that combination of properties in a material that affects its response to removal by a cutting tool. The machining of a steel may be enhanced by additives, such as lead, bismuth, selenium, tellurium, sulphur, phosphorus, or calcium, to the steel at its liquid phase. Or, for certain types of steel, machinability may be enhanced by annealing. 1 Machinability depends upon the dynamic reactions which occur in the· workpiece material (including its chemical and metallurgical compositions), t~e machine tool, the tool's geometry, the lubricant employed, and operating conditions. Among other items, tool life, the rate of metal removal, surface finish, ease of chip removal, and the reduction of cutting forces are important criteria for evaluating a steel's machinability. 2 Additions of lead, in combination with selenium or tellurium, or bismuth significantly improve machinability, and these grades are most often 1 See, United States Steel, The Making. Shaping. and Treating of Steel, pp. 1465-1488. 2 Debanshu Bhattacharya, "Machinability of Steel," Journal of Metals, Mar. 1987, p. 32. C-5 used when the part that is to be made requires the removal of relatively large amounts of metal (greater than 30 percent, for example, according to one estimate). 3 They are most often specified when the machine to be utilized is an automatic screw machine, lathe, or drill press. 4 As indicated earlier, there are other types of additions, most of which are made at the ladle, including calcium, phosphorus, and sulphur, which also affect the machinability of the steel. Calcium is used to minimize the detrimental effect of alumina inclusions on some carbide tools; it assists castability and is often used in applications calling for casting parts to near net shape. Steel series Carbon, certain alloy, and alloy steels are categorized according to their chemical content. The primary elements that are specified are carbon, manganese, phosphorus, and sulphur for carbon steels (other elements such as copper and silicon are specified in terms of maximum allowable levels); and, these elements plus nickel'· chromium, and molybdenum for alloy steels. Carbon steel grades include the lOoo·, 1100., 1200, and 1500 series (see further description below). Alloy steel grades include the 1300, 4000, 4100, 4300, 4400, 4600, 4700, 4800, 5000, 5100, 5200, 6100, 8100, 8600, 9200, and 9300 series. The primary series for carbon steels, including special bar quality, are shown in the following tabulation: 1000 1100 1200 Comment Non-resulphuriied carbon steels with a manganese content not exceeding 1.00 percent; used for forging axles, casings, shafting applications, and cold-heading applications (e.g., production of screws, nuts, and bolts). Termed a non-free cutting steel. Lead is added to enhance machinability such as in production of small fins and threads. Resulphurized carbon steels; used in forging applications where strength is needed (e.g., connecting rods and nuts); termed a free-cutting steel. Free-cutting resulphurized and rephosphorized carbon steels; not load-bearing; includes the bulk of lead and bismuth steels for use in such applications as valves and hydraulic fittings. 1500 Carbon steels with a manganese content exceeding 1.00 percent; lead or bismuth seldom added. Calcium may be added to ameliorate effects of alumina inclusions on high-speed tool steels. 3 Staff interview with ***4 Ibid. :··:' C-6 Herchant bar quality5 This group is designated with the prefix M before the 1000 series (for example, MlOlO, a merchant low-carbon bar of the nonresulphurized series for forging). Steels in this group are known as merchant steels; the bar and rod category includes concrete reinforcing bar. They are used for structural and similar applications involving moderate cold bending, moderate hot forming, punching, and welding as used in the production of noncritical parts. They are characterized by wider physical and chemical tolerances and are produced to grade only. Merchant quality is produced to 0.50 percent maximum carbon, 0.60 percent maximum manganese, nonresulfurized, nonleaded, -0.04 percent maximum phosphorus, and 0.05 percent maximum sulfur content, i.e., standard chemical ranges and limits, used for special carbon grades, do not apply. Merchant quality bars are not produced to any specified silicon content, grain size, or other requirement that would influence the type of steel, and they may contain pronounced chemical segregation; internal porosity, surface seams, and other surface irregularities may also be present. Special bar quality6 This group includes bars and rods that are produced to customer order and are characterized by tighter surface and chemical tolerances than M- quali ty steels. Applications include forging, heat treating, cold drawing, machining, and many structural uses. The primary melting may incorporate separate degassing or refining and may be followed by secondary melting (vacuum arc remelting or electroslag remelting); deoxification is performed. The steel is produced with internal soundness, i.e., relative freedom from segregation and porosity, grain size tolerances, and limits on the content of incidental chemical elements (e.g., copper, nickel, chromium, molybdenum, or others) are restrictive, i.e., not exceeding the limits shown on the customer's purchase order. A tight range for chemical composition is prescribed for carbon, manganese, phosphorus, and sulfur. Restrictive requirements applicable to special quality.--Certain additional requirements are sometimes necessary for some applications or manufacturing processes, including the following: 7 5 ASTM Designation A 575-81, Standard Specification for Steel Bars, Carbon, Merchant Quality, M-Grades. 6 ASTM Designation A 576-81, Standard Specification for Steel Bars, Carbon, Hot-wrought, Special Quality. 7 Steel Products Manual, AISI, Aug. 1977, pp. 89 and 90. C-7 Restrictive requirement quality A & B Multiple restrictive requirement quality Scrapless nut quality Axle shaft quality Cold shearing quality Cold forging quality Cold extrusion quality A & B Cold heading quality Cold expansion quality Restrictive cold working quality Other quality designations: File quality Gun barrel quality Gun receiver quality Shell steel quality A, B, & C Spark plug leaded quality Spark plug non-leaded quality Standard tube round quality Lead and bismuth steels.--these steels are part of the group designated special quality steels; leaded steels are designated by inserting the letter L between the 2-digit nu.~ber that denotes the series and the 2-digit number that denotes the range of carbon present. 'When lead is required as an added element to a standard steel, a range of 0.15 to 0.35 percent is specified. 'When bismuth is added, a proprietary name may be used, although a letter insertion is not made. Steelmaking terminology Killed steels Killed steels are produced by adding deoxidizing elements such as silicon and aluminum to the ladle before pouring. Chemical composition and mechanical properties of killed steels are relatively uniform throughout the ingot. Alloy and carbon steels containing more than about 0.25 percent carbon are almost always fully killed. Rimmed steels Rimmed steels are cast into ingots without deoxidation by silicon or aluminum, i.e., they are not killed. As solidification proceeds, oxygen and carbon dissolved in the molten metal continue to combine, producing a characteristic effervescent action in the ingot during solidification. Chemical composition and mechanical properties vary widely throughout rimmed steel ingots, with the region near the surface being lower in carbon, sulfur and phosphorus than the average composition of the ingot. The low carbon skin generally provides a smoother surface than might be expected on a fully killed steel, although high-quality surfaces can routinely be obtained on killed steel products. Only low-carbon steels are made as rimmed steels. C-8 Semikilled steels Semikilled steels are partially deoxidized. Their characteristics, e.g. uniformity of composition and mechanical properties, fall between those of killed and rimmed ste~ls. Capped steels Capped steels are somewhat similar to rimmed steels, except that the rimming action is stopped at a specified point during the solidification process. A capped steel ingot has the low-carbon rim typical of a rimmed steel ingot, but the uniformity of composition and mechanical properties in the center that might be expected from a killed steel ingot. This combination of properties makes capped steels particularly well suited for applications involving cold forming or cold heading. Creep Slow deformation of steel under continued stress. Toughness A property that denotes an intermediate value between softness and brittleness. Tensile tests show a tough material to have a fairly high tensile strength accompanied by moderate values of elongation and reduction of area. Fatigue Failure under repeated stress. D-1 APPENDIX D COMMENTS ON DIFFERENCES AND SIMILARITIES IN PHYSICAL/METALLURGICAL CHARACTERISTICS AND USES OF SEMIFINISHED AND HOT-ROLLED PRODUCTS D-3 QUESTIONNAIRE RESPONSES The Commission's questionnaires in this investigation requested comments regarding the differences and similarities in the physical/ metallurgical characteristics and uses of selected semifinished and hot-rolled steel products. The following comments were received:I Seminished Products A) Certain special quality semifinished CARBON products vs. semifinished ALLOY products: Firm Comments ***·· ........... "Only distinction is that alloy is added to allow heat treatment in thicker sections. Depending on part size or heat treat requirements, either might be used in various machined and heat treated parts." ***· ........... . "Alloy is for strength, hardenability and toughness." ***·............ "(C)haracteristics may be exactly the same; both may be ordered in a variety of sizes and surface conditions, e.g., hot-rolled, cold drawn, turned and polished, etc. Chemical ranges for semifinished carbon products are generally not as restrictive or demanding as those for semifinished alloy products. Both products may undergo forging, machining, cold finishing, or heat treating for end use in automotive gear train, engine or suspension parts, oil. country goods, off highway equipment, etc. Yhere greater depth of hardening is required, alloy steels· would be favored over carbon steels because of their higher hardenability which is imparted to the steel as a result of alloying." ***· ............ "Both require high levels of internal cleanness, soundness and uniformity of chemical consistency. Dimensional characteristics are also the same. Both must have surface quality suitable for rerolling or forging which is usually achieved by desurfacing all or part of the surface during processing to a semifinished state." ***· ........... . "The physical differences are slight, however, the chemistries are very different and must be carefully obtained. Used for direct forgings or to be rolled into products." Firm (continued) ***· ........... . D-4 Comments "Alloy steels provide enhanced property levels, particularly in relation to strength, hardness, hardenability and impact resistance. In terms of mechanical properties such as strength, hardness and impact resistance, then the higher levels require and the greater the final section size involved, the greater probability that an alloy steel will be used. Alloy steels are more normally used in the heat- treated condition compared to carbon steels. In addition, the quality standard of the conditioned semif inished alloy products would frequently be higher than for carbon products, both for surface and internal quality, reflecting the greater expectations in use of alloy material. The semifinished products for both steels have their use in subsequent hot rolling and hot forging applications with hot rolling being the more common process. They may require some variations in process conditions in these drafting schedules and possibly cooling regimes but these are part of the normal flexible operation of any hot rolling mill and forge that deals with carbon and alloy steels." B) Certain special quality semifinished FREE-MACHINING products vs. semifinished OTHER SPECIAL QUALITY products: ***· ........... . Comments "(C)haracteristics may be exactly the same; both may be ordered in a variety of sizes and surface conditions, e.g., hot-rolled, cold drawn, turned and polished, etc. Both products may undergo forging, machining, cold finishing, or heat treating for end uses that require high machining rates. Free machining products contain machinability enhancers such as sulfur which combines with manganese in the steel to produce manganes sulfide inclusions which act as chip breakers during machining." ***· ............ "All free-machining carbon steels require a production process diametrically opposed to o~her steel products, alloy or carbon. Rather than attempting to eliminate embrittling elements like sulfur, phosphorous, lead, and bismuth (considered impurities in most applications), the producer tries to propagate these impurities and trap them in the steel. The result is a "dirty" steel, which enhances machining." ·.nm (continued) ***· ........... . ***· ........... . D-5 Comments "Many free machining additives other than lead/bismuth tend to impair mechanical properties. Sulfur can be very helpful to machining in moderate amounts without reducing properties. Don't use free-machining grades in the most demanding applications, but use intermediate levels of sulfur in very highly stressed parts." "Examples of resulferize steels are steering yokes, fittings, transmission shafts." ***· ............ "Internal quality is measured to different standards of cleanness to recognize the influence of sulphur in FM products." ***· ........... . "Like all carbon steels ~sed, the free machining steel will be selected where it will perform similarly to other plain carbon steels. The machinability of other SQ products may be improved by various techniques. The surface and internal quality standars of the other SQ products may often be greater than for free machining products." C) Certain special quality semifinished FREE-MACHINING products vs. semifinished LEAD AND BISMUTH products: Il!:m·· ··***· .......... ·... :·,. *** ............ . Comments "(C)haracteristics may be exactly the same; both may be ordered in a variety of sizes and surfac; conditions, e.g., hot-rolled, cold drawn, turned and polished, etc. Both products may undergo forging, machining, cold finishing, or heat treating for end uses that require superior machining properties. For exceptional machining rates, lead and bismuth products may be favored over free machining products." "Lead and bismuth are much more machineable than other steels. They give the steel detrimental characteristics that make it bad for extruding, cold heading, or forging." ***··· ........... "Effects on machining properties vary depending on amount of each element added. Lead/bismuth don't have as much effect as large amounts of sulfur and/or phosphorus can. Lead/bismuth can be used at higher stress levels than heavily resulfurized grades. More moderate sulfur levels can have quite good properties however." D-6 D) SPECIAL QUALITY semifinished steel products vs. MERCHANT quality semifinished products: ***· ........... . ***· ........... . ***· ........... . ***· ........... . Comments "Merchant quality semifinished products are not subject to restrictive chemical requirements of special quality products nor the rigorous product analysis requirements of these products." "Merchant quality is much more likely to contain detrimental surface and internal defects. I~'s not generally made/sold to tightly controlled specs. Used in lightly loaded structural applications no~ requiring heat treatment." "Merchant quality denotes relatively less demanding standards compared to certain SQ products in both surface and internal quality aspects. Because merchant quality involves less demanding quality levles it may be produced on lower quality steel making and casting routes. The major technical requirements of merchant quality relates to certain properties such as strength, ductility and possibly welding, and in this respect may have some similarities to the basic requirements of special quality products. However, the latter will be used for the higher quality applications where generally a wider and superior range of quality characteristics are required." "When selling MQ, the producer guarantees only that the steel falls within a broad range of carbon, manganese, phosphorous, and sulfur contents. It will not meet specified chemical content (other than carbon, manganese, sulfur, and phosphorous), grain size, or surface quality requirements. MQ steel is. typically used for structural support and non-critical parts." ***·· ........... "Merchant is not used for forging, but both are rerolled to bars or rods." D-7 Hot-Rolled Products E) Certain special quality hot-rolled CARBON products vs. hot-rolled ALLOY products: ***· ........... . ***· ........... . ***· ........... . Comments "Characteristics are the same. Uses are the same except that alloy products are used where the design or engineering requi'rements call for higher levels of strength and reliability than can be achieved in carbon products." "More physical strength is normally obtained with .alloy products vs. carbon due to chemical elements. Uses include forgings, bolts, fasteners, tools and construction applications." "Carbon is confined mainly to 1090 type steel used for automotive stabilizer bars; 1141 and 1151 steels used for automotive connecting rod applications. Alloy is composed mainly of 5160 type steels used for automotive leaf spring applications." E) Certain special quality hot-rolled FREE-MACHINING products vs. hot- rolled OTHER SPECIAL QUALITY products: ***· ........... . Comments "Characteristics are the same except for internal quality standards for FM products which are different to reflect higher sulfur content. FM products are slos not as good as SQ in hot working operations due to hot shortness. A higher percentage of FM steel are used in direct machining applications without prior alteration of the as-delivered shape by a· hot or cold forming operation. FM steels particularly those containing sulfur, are less likely to be used in high strength or fatigue critical applications then special quality proucts." F) Certain special quality hot-rolled FREE-MACHINING products vs. hot- rolled LEAD & BISMUTH products: ***· ........... . Comments "Prouction of lead and bismuth steels requires environmental an health protection considerations (EPA & OSHA) and higher teaming temperatures than their non-lead FM counterparts. Lead and bismuth are subject to somewhat narrower process windows than their FM counterparts." D-8 G) Certain special quality hot-rolled BAR products vs. hot-rolled ROD products: ***· ........... . ***· ........... . Comments "Bars are produced to tighter dimensional tolerances. Rods are semi-finished used primarily for d~awn wire products. Bars are used for multiple purposes - structural support, auto parts, etc." "Rod products have restricted size range compared to special quality bar products being limited to a size range of 7/32" to 47/64" in diameter almost always available in straights. Generally, special quality bar products up to approximately 2" diameter may be supplied in straights or in coil .... and greater than 2" diameter are supplied in straights. Special quality rod may see application in the hot rolled condition; however, the vast majority of rod products see application as wire rod for redraw application for end use products as tire cord wire or valve spring wire. As a consequence, bar products may undergo processing to produce end products not normally applied to rod products, for example, forging, heat treating, or machining." ***............. ·"Rod proucts have looser tolerances and are limited in maximum size availabi)..ity ~ ·Rod products are all · .. essentially drawn through a die to put the product in a usable form, or for .subsequent manufacturing operations. This is not essential for bar products. Bar products are also hot worked through forging which is uncommon for rods." H) Certain special quality hot-rolled CUT-LENGTH products vs. hot- rolled COILED products: Firm · Comments ***. . . . . . . . . . .. . . "Certain special quality cut length products may see the same end uses as special quality coiled products up to the maximum size limitation for producing in coil form which is approximately 2" in diameter. For certain applications, such as cold forming, it may be desirable to produce cold forged parts from heavy weight coils in a continuous manner.as opposed to individually feeding several lighter weight cut length bars. Above approximately 2" in diameter, cut length products are the only choice." ***· ............ "Cut-length products include sizes much larger than coiled products. Coiled products used primarily in cold conversion applications such as cold drawing and cold heading." Firm (continued) ***· ........... . D-9 Comments "If you were to uncoil a coiled prouct and cut it into straight lengths you would have cut-length ptqucts. Maximum diameter of coiled proucts is limited. That is not the case for cut lengths. Coiled products are generally not used for hot forging operations or for direct machining operations." I) Certain SPECIAL QUALITY hot-rolled products vs. MERCHANT quality hot- rolled products: ***· ........... . ***· ........... . ***· ........... . Comments "Merchant quality products are limited to use in light structural applications and general machinery applications and are not applicable to uses requiring forging, heat treating, cold forming, or severe bending applications." "Special quality bars require closer dimensional tolerances, cleaner, pipe-free interior quality and no surface defects, as well as special chemical compostion and properties. SQ bars are used for critical parts such as automotive drive trairis, suspension and engine components, whereas merchant quality is used for general structural uses.n "Merchant quality is usually of looser dimension tolerances and is never heat treated. Merchant quality is not produced to metallurgical characteristi~s and is far less consistent between lots than is special quality. MQ is not intended for uses beyond simple bending, cutting, or hole punching. It is used for its inherent structural strength as a steel and is used more in fabrication than manufacturing. It is generally not heat treated or machined." UNITED STATES INTERNATIONAL TRADE COMMISSION WASHINGTON. DC 20436 July 13, 1992 MEMORANDUM TO: Diane Mazur, O/INV FROM: Charles Yost, O/IND COPY: Scott Anderson, O/GC Stephanie Kaplan, O/IND SUBJECT: Telephone interviews on carbon steel rod This refers to telephone interviews on July 10, 1992 between USITC staff and engineering and marketing personnel at***· The interviews addressed the differences between "bar" and "rod", including size differences between bars and rod and, within the rod category, between •merchant quality rod" and "special quality rod". They also addressed the question of cut-to-length rods. Distinction between bars and rods With respect to the differences between bars and rods: while simplistic in its formulation, the essential difference is that bars are produced on a bar mill and rods are produced on a rod mill. These two mills are engineered and constructed differently, operate at different speeds, with a different configuration, and there are differences in the rolling stands, finishing stands, and coiling equipment used in the two types of mills. One such difference is that rod is passed along a Stelmore deck (a type of controlled cooling line) prior to coiling whereas bar is coiled directly off the finishing stands of the rolling line. None of the companies that produce both rod and bar do so on the same line; instead they tend to operate separate lines in separate facilities (the Northstar facility in Michigan for bar as opposed to the Northstar facility in Beaumont; TX for D-12 rod, the American Steel and Wire facility near Cleveland for par versus the facility in Joillet for rod, or the Bethlehem Sparrows Point, MD facility for rod as opposed to that company's bar facility at Lackawana, NY for example). Asked the question, one of the persons stated that bar cannot be produced on a rod mill and vice versa. Tolerances and specifications dictate the differences between bar and rod, at least to some degree. What is important to the rod buyer is generally not important to a purchaser of bar. Customer .concerns overlap with respect to carbon and residuals content. The rod purchaser is more concerned with certain physical characteristics of the rod--its tensile strength, reduction area and ductility, the size and amount of mill scale, and the size of the coil. The bar purchaser is more concerned with grain sizes (a metallurgical aspect), how the steel was deoxidized, and its size tolerances (including its roundness, diameter, and length). Surface q~ality has, at least to some degree, a different meaning for purchasers of rod and bar. Because rod, usually produced to a tolerance of plus or minus 1/64 inch (0.0156), is intended for drawing applications where there might be as much as a 90 percent reduction in area, roundness (or ovality) are less important. than the closer size and roundness tolerances in the bar industry. Also, most rod is shipped with mill scale on it and how the customer descales affects the rod producer's operating practices; bar may have scale on it, but the manner of customer descaling does not affect the barmaker's cooling practices. Most bar is produced to at least plus/minus 0.007 inches, which is a minimum specification and many bar producers can produce to half or quarter tolerance. Because of the less demanding shape tolerances rod is less expensive to produce than bar which serves to limit any practical overlap between bar and rod, except at the margin. Each party contacted stated that bar and rod are not interchangeable products. Bar is a nearly finished product produced to tight chemistries and dimensional tolerances. As indicated above, rod is a semifinished steel mill product intended for further processing (including drawing). There is some overlap, in terms of size for some specific applications, between bars and rods. This occurs within the size range of one-half to three-quarters inch, and is apparently mostly rebar (which is produced on a rod mill), according to one interlocutor. Size distinctions are also imparted by the type of rolling mill. Rod is typically produced in approximate diameters between 7/32 and 11/16 inches (according to the industry experts, about 90 to 95 percent of rod is produced to diameters between 7/32 and 1/2 inch, there is a limited amount that is produced to diameters between 1/2 and 3/4 inch, and a de minimus amount that is produced to diameters above 3/4 inch); bar is typically produced in diameters above 1/2 inch, with a very small amount that produced at diameters below 1/2 inch. Bar D-13 produced below 1/2 inch is reportedly a product produc.ed a.t the margin and reflects automotive industry downsizing, but the quantities are $mall. Distinction between merchant and special rod quality It is tempting to utilize bar morphology (the break between merchant bar and special quality bar for example) in an . analysis of the _rod. industry. For example, when asked t~e questio'n whether the're exists special 'quality rod, most industry personnel will answer that there is, and.indicate that there is a merchant ·or standard industrial quality rod (from which wire is fabricated into such mundane products. as fence, barbed wire, nails, and merchant wire; these people will usually indicate that the industrial quality rod is classified as low or medium low carbon, and distinguish the industrial quality rod from high quality rod or high carbon rod (which are used for more highly demanding enduses as cold finishing rods, welding quality, wood screw quality, and .tire· bead/cord). In addition there are separate designations contained in the AISI carbon steel wire and rods product manual (1984 edition) that distinguish industrial or standard quality rods as one type of rod among an assortment of qualities. However, bar nomenclature is not used in the rod industry-- i.e., the prefix "M" is not used to designate industrial or standard quality rods. Nonethless, one of the interlocutors indicated that industrial quality rod has no restrictions on chemistry, tensile strength, and finish, and is used for "down and dirty" applications, welded wire mesh for example. Others indicated that the designation ~standard rod quality,"· or "merchant grade," is reflective of older usage and does not conform to how barmakers use the term. These people indicated that all of their rod is produced to customer specifications (usually modifications to the AISI/AIME grade specifications1 ), but usually based on the customer's reactions to trial shipments. They further indicated that their mills alter their operating practices so that rod is produced to specific end-use applications, it is customer specific, and it is produced to be drawn/fabricated on the customer's equipment. This specificity (viz. the customer's equipment, operating practices, and intended end-use) is necessary because differences in equipment among facilities will result in variations in the customer's yields and production. Seen in this light, rod is a sophisticated product and all rod could be termed special quality, because it is custom-manufactured. Even the mills that use the term standard or industrial quality indicated that they produce a load of rod to a customer's specification and accept an order only after a trial shipment. 1 One indicated, "no one uses AISI specifications." D-14 Cut-to-length rod Unlike on a bar production line, where th~ bar m.ight be. diverted to either a coiler. or cut-to-length and sent to a cooling bed, rod are cooled on a Stelmore deck and coiled. There are apparently one or two instances where the rod might be straightened and cut-to ... length, but the operation is performed subsequent"to the hot-rolling and after the coil has cooled. The instances are: nondeformed concrete reiriforcingbar (produced to ASTM A61S or.A61SM), and where a piece of round steel is required for a brace on a machine frame or for construction (produced to A36 chemistry). These products are apparently industrial quality rod. E-1 APPENDIX E COMMENTS ON DIFFERENCES AND SIMII.ARITIES IN MANUFACTURING PROCESSES OF SEMIFINISHED AND HOT-ROLLED PRODUCTS E-3 QUESTIONNAIRE RESPONSES The Commission's questionnaires in this investigation requested comments regarding the differences and similarities in the manufacturing processes used in the production of selected semifinished and hot-rolled steel products. The following comments were received: Seminished Products A) Certain special quality semifinished CARBON products vs. semifinished ALLOY products: Firm Comments ***· ............ "While molten, alloy bearing material must be added to alloy grades; temperature control, and processing are critical to insure that the alloy melts go into solution and is homoginized. Alloy is added to impart certain metallurgical properties, thus alloy and carbon steels are generally interchangeable." ***· ........... . ***· ........... . ***· ............ . ***· ........... . "Machinery interchangeable. Shared difficulties are porosity, trapped gasses during solidification, slag inclusions, and internal cracking. Scrap inputs and additives/alloys would differ." "Scrap separation. Lower heating.in soaking temp for allor. Normally higher scrap rate for alloy." "(T)he same tools, i.e.; machinery and equipment, are used; however, regarding carbon steels, not all aspects of the manufacturing pro·cess necessary for alloy steel are required. Most carbon steels in small and intermediate sizes would not require vacuum degassing, whereas comparable sizes of alloy products would. During refining of alloy steels, greater time and care must be taken in akjusting alloy compostion since, depending on the complexity of _the alloy, more elemental ranges must be met than in carbon steel manufacture where only carbon and manganese ranges are required. The ranges for carbon, manganese, phosphorous, and sulfur are tighter oi more restrictive in alloy steel manufacture." "Alloy steel production process resembles that for carbon steels, except that the complicated·chemistries require more chemical analysis." nm (continued) ***· ........... . ***· ........... . E-4 Comments "Melting difference is that you add more alloys and dependent on quality level such as bearing quality, y6u refine more." "Same equipment and labor." ***~· ........... "The differences in manufacturing processes between semifinished carbon and alloy products are minimal, as the result of the quality requirements imposed by the ultimate user of the products. Differences do arise in (A) continuous casting, wherein alloy steels generally require greater precision in process controls, (B) ingot to bloom yield, wherein alloy steels have lower yields due to somewhat less permitted chemical variability in the end product, and (C) cooling practices, wherein more alloy than carbon products require controlled cooling from primary operations to avoid cracking." ***· ........... . "In our mills there is virtually no differences in our manufacturing processes. All the same manufacturing equipment is used." B) Certain special .quality semifinished FREE-MACHINING products vs. semifi~ished OTHER SPECIAL QUALiTY products: ~ Comments *** ...........-. . "Free machining grades can be very difficult in a continuous cast operation. Causes extensive clogging of ceramic openings during the pouring process." ~**. ............. "Same equipment and labor." ***· ........... . "The same machiner, equipment, and skills are required ... Free machining products, however, do require more care in the selection of the casting process; i.e., to maximize final product yields, free machining products require bottom pour ingot casting or bloom continuous casting to optimize surface quality. The surface quality of carbon and ~lloy products is similarly enhanced by bottom pour ingot casting or bloom continuous casting, but are also better adaptable to the top pour ingot casting process than are the free machining grades." Firm (continued) ***· ........... . ***· ........... . ***· ........... . E-5 Comments "When we normally make SQ it usually gets secondary process such as VAD, or ultrasonic test. You don't vacuum arc degass or sonic test resulferized steel." "Differences are minimal. Principal differences arise from the need to have a method for adding Se or Te to the molten steel for the FM steels and having an appropriate air control system for Se and Te additions. The machining additives also require the product to be processed within restrictive hot working ranges." "All free-machining carbon steel semifinished products have much higher levels of sulfur than other SBQ products. They are harder to produce, as sulfur tends to segregate more during casting than other additives, often resulting in unveve properties. Sulfur also contributes to hot shortness, a bar's tendency to crack, check, or split during rolling." C) Certain special quality semifinished FREE-MACHINING products vs. semifinished LEAD AND BISMUTH products: ***· ........... . ***· ........... . ***· ........... . ***· ........... . Comments "Up to the point of adding the machinability enhancer, the manufacturing tools, processes, and skills are the same ... lead and bismuth requires specialized equipment to manage the environmental problems associated with the lead and bismuth additions." "Specialized equipment for lead and bismuth as a capital expense and ongoing operating expenses." "Base grade free-machining carbon steel products do not req~ire a specialized tundish or dedicated injector, are less sensitive to rolling temperature and speed, and less prone to surface defects than lead and bismuth .... 12xx steels have a higher phosphorous content (than llxx steels) that hardens the steel, exacerbating rolling difficulties. Therefore, 12xx steels share production problems with lead and bismuth .... almost as difficult to cast and roll, and suffer similar defect rates." "Differences include an air environmental control system in the case of lead and bismuth and lower ingot to semifinished yield due to extra discards to assure elimination of undue additive segregation." E-6 D) Certain SPECIAL QUALITY bars and rods vs. MERCHANT quality products: ***· ........... . ***· ........... . Comments "SBQ-more critical application where extensive forging or other manufacturing stresses will be demanded. SBQ also is used in critical applications such as aircraft landing gear." "Same equipment and labor." ***· ............ "SQ products require greater refining time in melt furnace, vacuum degassing, ladel refining practices, and tighter rolling tolerances than are required for MQ products." ***· ............ "Special quality semifinished products require more sophisticated manufacturing tools, machinery, equipment, and skills than that required for semifinished merchant quality products since the requirements for chemistry control, rigorous product analysis, surface quality, and critical engineered characteristics such as strength, toughness, fatigue resistance, machinability, formability, and the like are much more restrictive and custome.r demanding." ***· ............ "Merchant does not require select scrap or raw material controls in the melting phase. Very limited refining is required. Very wide process window, few restrictions on chemistry and chemical consistency, no conditioning, minimal quality discards, high process yields." Hot-rolled products E) Certain special quality hot-rolled CAP.BON products vs. hot-rolled ALLOY products: Firm Comments ***· ............ "Shearing temperature concerns for higher carbon and alloy grades. Tighter reheat control tables and gauge/width specifications would apply on most alloy." ***·............ "No differences." ***·............ "Same equipment, process, and labor is used." ***· ............ "Same equipment and labor." E-7 F) Certain special quality hot-rolled FREE-MACHINING products vs. hot- rolled OTHER SPECIAL QUALITY products: ***· ........... . ***· ........... . ***· ........... . Comments "Same equipment and labor." "Final product inspection is more frequent in special quality." "Free machining grades have larger grain size and promote greater tendencies to slip during the rolling (forming) of the product." G) Certain special quality hot-rolled FREE-MACHINING products vs. hot- rolled LEAD & BISMUTH products: Firm Comments ***·· ........... "SBQ is less sensitive to heat fluctuations, allowing a faster rolling within a broader temperature range. SBQ does not tend to split during rolling and so do not require special heating practices, like free machining carbon steels." H) Certain special quality hot-rolled BAR products vs. hot-rolled ROD products: . ***· ........... . ***· ........... . ***· ........... . Comments "Bars and rod differ in finishing operations, dimensional tolerances, and uses." "The same manufacturing tools, processes, and skills may be required ... up to the final step of bar or rod rolling. For the production of the end product, the tools of manufacture vary; i.e., bar products are produced on a rod mill generally finished in coil form. Such a rod mill may be equipped with a Stelmor line to control the cooling of the coiled rod. The dimensional requirements of the rod are somewhat less demanding than of a comparably sized hot roll bar since the vast majority of rod in coil is drawn into wire products." "A smaller size rolling mill and associated reheating facilities are required for rod products." Firm (continued) ***· ........... . ***· ........... . ***· ........... . ***· ........... . E-8 Comments "Bar and rod are two separate products, requiring totally different mill machinery to produce." "SQ bar products are made on a 12" or 13" bar mill vs rods being produced on a rod mill." "Bar is rolled in a single strand rolling mill whereas ·rod may be rolled ·in a multi-strand mill. Rod is produced to.broader dimensional tolerances at higher production rates than bar." "Rod products are generally produced on dedicated mills different from those used for bar production. Rod mills operate at very high speeds, may have several rolling strands, specialized finishing blocks and sophisticated coiling and cooling facilities. Rod generally is produced to more controlled standards of mechanical properties, metallurgical structures and levels of su.rface oxide, surface roughness and possibly surface decarburization." ··.-: - :r- ,,.- I) Certain special quality hot-rolled CUT-LENGTH products vs. hot- rolled COILED products: ***· ........... . ***· ........... . ***· ........... . Comments "After hot-rolled steel is rolled it is either cut to convenient shipping lengths or poured into coils. There is virtually no difference between the cut- length and coiled products from a metallurgical point of view. The same raw steel and mill process is used in either case. The steel is the same ... (the only possible difference is incidental hardness level differences caused by more gradual cooling times for coiled steel). Cut lengths tend to be favored for forging or for direct machining or fabrication, while coils are used extensively in wire drawing and cold heading operations." "Cut length requires a shear to cut steel to length. Coiled products require machinery to coil the hot bar as it is rolled. Some mills have both systems." "Cut length product requires long cooling beds and shears. Coiled products require coiling tubs and cooling conveyors. Handling equipment is different." Firm (continued) ***· ........... . ***· ........... . E-9 Comment~ "The same m~nufacturing tools, processes, and skills may be required ... up to the point of the final hot rolling operation. Special quality coiled products up to approximately 2" in diameter are produced on a merchant mill equipped with facilities to produce the cut lengths such as shears, hot saws, or abrasive saws. In addition, for the cut length products, notch turnover hot beds are required to ensure product straightness off the hot mill." "Cut lengths require cooling beds, shears, length measuring devices, and yield planning where as coils require coiling tubs and coil handling facilities." J) Certain SPECIAL QUALITY hot-rolled products vs. MERCHANT quality hot- rolled products: ***· ........... . Comments "SBQ has much tighter tolerances, the processes are similar, but our equipment is not capable of holding the tight SBQ tolerances." ***· ............ "Same equipment, process and labor used." ***·............ "Same equipment and labor." ***·............ "Merchant quality does no;t require rolling facilites capable of strict temperature controls or dimensional controls." '• F-1 APPENDIX F TARIFF HEADNOTES AND NOMENCLATURE F-3 HARMONIZED TARIFF ·scHEDULE of the United States (1992) Annotated tor Statistical Reporting Purposes CHAPTER 72 IRON AND snn !!2W xv 72-1 1. In this chapter and, in the case of not.es (d), (e) and (fl below throughout the tariff schedule, the following expressions have the meanings hereby assigned to them: <•> Pia iron Iron-carbon alloys not. usefully malleable, containing more then 2 percmt by weight of carbon end which may contain by weight one or more other •l-ts within the following limits: - not more then 10 percent of chrami\D - not more than 6 percmt of ·man&eneae • not more than 3 percent. of phosphorus • not more then 8 percmt of ailicon • a total of not more then 10 percmt of other elements. (b) Spie15eleism Iron-carbon alloys centaining by weight more than 6 percent but not more than 30 percent of manganese and otherwise confozming to the specification at (a) above. (c) Ferroallm Alloys in pigs, blocks, lumps or similar primary fo1:11111, in foims obtained by continuous casting and also in granular or pl*der foims, whet.her or not aggl.cmerated, camionly used ea an additive in the manufacture of other alloys or as deoxidmtll, deaulfurizing agents or for similar uses in ferrous metallurgy and generally not usefully malleable, cantaining by night 4 percent or more of the •l-t iron and one or more of the following: - more than 10 parcmt of chramim - mra than 30 percent of manganasa - mra than 3 percent of phosphorus - mn than 8 percent of ailicon - a tot.al of more than 10 percent of other al-ts, excluding carbon, aubJact to a lllUillUD cont.ant. of 10 percent in the cue of copper. (d) BnJ, Ferrous mat.ad.ala other than thoH of heading 7203 which (with the ac9J1tion of certain types produced in the form of eating•) are usefully malleable and which contain by night 2 percent cir leas of carbon. S-V.r, chrani\111 at.eels may contain higher proportions of carbon. (a) St.a&nlaaa at.aal Alloy at.eel• containing, by waight. 1.2 percent or leaa of carbon and 10.5 percent or mre of chramim, with or wiUlout. other el-t•. xv 72-2 F-4 HARMONIZED TARIFF SCHEDULE of the United States (1992) Annotated for Statistical Reporting Purpo59s (t) Ot.her alloy steel Steeb not cc:mplying with the definition of at.ainleas ateel and containing by weight. one or more of the following •l~t.a in th• proportion ahown: - 0.3 percent. or mora of allmlimml - O. 0008 percent or more ot boron - 0.3 percent. or more ot chranium - 0.3 percent or more of cobalt - 0.4 percent or more of copper - 0.4 percent or more of lead - 1. BS percmt. or more ot 111m1ganeae - 0. 08 percent or more ot molybd- - 0.3 percent or mDre of nickel - 0. 06 percent or more of niobium - 0.6 percent. or more of liliccm. - O.OS percent or more ot t.itmium - 0.3 percmt or more of t.1mg1t.m <-lfram) - 0 .1 percent. or more of VllD8dium - O.OS percmt or more of &irconium - 0.1 percent or more of other •1-lta (acept. aul.fur, pbaspborua, carbon and nitrogen), t.aken separately. (&) Belting scrap ingot.I Of inm or Steel Pradllct.I roughly caat·in th• fom of ingots without fnder-hMdl or hot tops, or of pigs, haviJlg obviows surface fault.a llDd nat. caaplying with th• chtmical composition of pig iron, epiegelaiaen or ferroalloya. (h) GumalH Pradllcta of tihich leu thm 80 percent by -ilbt pusu tmougb s sine with a mesh epertgre of 1 am and of which 90 percmt or more by wigbt paaau tbzoqgh a aiw. with a mash aperture of S am. · (1J) Semi.finished products Cont1- cut product.a of solid nction, tlbether o: not. aubJectad to primary hot-rol.liDa: and Other products of solid aection, tlbich baft not bem fuitber worked tbm subjected to primary hot-rolling or roughly abaped by forgillg, including blanka for engl.n, abapu or Hct.iona. tbeM product.I en not. present.ad in coils. (JI:) Fl.!t-gplled product! Balled product.a of aolid rect.mgul.ar (other tbm aquare) cron Hction, which do not ccmfom to the definition at (1J) aboY9 in th• tom of: - coila of auccesaivel7 auparilllFOaad 1-yers, or - straight bngt.ha, tlbich if of a thiclmeaa laH tbm 4. 7S 1111 are of a width measuring at least 10 times the tbickneas or if of a tbicknn• of 4.7S am or more are of s width tlhich ucnds lSO am and measures at least tMic• the tbiclmus. Flat-rolled products. inclada those with patt.ema in relief derived directly frail rolling (for example, groovea, ribs, checkers., "8n, buttons, loaena••> and those which have beCI perforated, cor:Ngat.ed or polished, provided that. t.h9)' do nat. thereby u- the character of art.icln or products of other headings. Flat-rolled product.a of a shape other than rect.anau1ar or aquare, of rar liae, are to be classified aa products of a width of 600 am or more, provided that they do not usm. th• character of articles or products of other headings. F- 5 HARMONIZED TARIFF SCHEDULE of the United States (1992) Annotated tor Statistical Reporting Purposes Cl) Bars end rode. hot-rolled. in irregularly wcnmd coils xv 72-3 Bot-rolled producta in irregularly 'llOlllld coils, which have a solid croaa Hction ln th• ahape of circles, aegmcits of circles, ovals, rectangles (including squares>, triangles or other CcmVllX polygons. These products may have indentations, ribs, grooves or other defomationa produced during th• rolling process (reinforcing bars md rods). Cm) Other bars end rods Products which do not conform to arry of the definitions at (lj), Ck> or Cl) above or to the definition of wire, which have a uniform solid cross section along their whole length in the shape of circles, seg1111111ts of circles, ovals, rectangles (including squares), triangles or other convex polygons. Thea• products may: - hav• indentations, ribs, grooves or other deformations produced during the rolling process (reinforcing bars md rods); - be twisted after rolling. (n) · Males. shepes and sections Products having a uniform solid cross aection •long their whole lenath which do not confonn to any of the definitions at (ij), Ck), Cl) or Cm) above or to the definition of wire. Qiapter 72 does not include products of heading 7301 or 7302. (o) Wire Cold-fomed products ln coils, of arry UnlfoJ:m solid cross Hctlon along their whole length, which do not ccmfoJ:m to the definition of flat-rolled products. (p) Rollow drill ban and rods Hollow bars md rods of any cross aection, auitable for drills, of 11bich th• grHtaat at.emal ~ion of the cross section exceeds 15 DID but does not ezceed 52 DID, and of which the greatest int•mal ~ion does not exceed one half of the greatest eztemal d1-laion. Hollow bars and rods of iran or ateel not canfonning to this definition are to be classified in heading 7304. 2. Ferrous met.el.a cled with mother ferrous metal are to be cludfied u product.a of the ferroua metal predminating by -ight. 3. Iran or atnl products obtained by elactrolytic deposition, by preHur• cuting or by aintaring are to be cluaifled according to their fom, their cmposition md their appearace, in the headings of this chapter appropriate to aimilar hot-rolled products. Subheadins Notea 1. In this chapter the following upresaions haw the meminga heraby uaigned to th9D: ca> Alloy pig iron Pig iran containing, by •lght, one or llllr• of th• following •1-ta in the apecified proportions: - llllre than 0.2 percent of c:brGmimi - llllre than 0.3 percent of copper - mo~• thm 0. 3 percent of nickel - more than 0.1 percmt of rtll'I of th• following •l-ts: ah•tmn, 9111.ybdmms, titanimi, tungatm (110lfr•), vmadim. Cb) !!onalloy free-cutting steel lkmalloy 1teel containing by weight one or llllre of tb• followiq el-ta in th• 1pecified proportions: - 0. 08 percmt or more of sulfur - 0 .1 percmt or more of lead - more than 0. 05 percmt of aelmimi - mace than 0.01 percmt of tellurillD - more than 0.05 percc;t of bimmth. xv 72-4 F-6 HARMuNIZED TARIFF SCHEDULE o1 the United States (1992) Annotated tor Statistical Reporting Purposes (c) Silicon electrical stee~ Alloy ateela containing'_by waight at least 0.6 percmt but not more than 6 percent of silicon and not more than 0.08 percmt .of carbon. They may alao ·contain by weight not more than 1 percent of alumin\111 but no other element in a proportion that WO\lld give the steel the characteristics of another alloy steel. (d) High-speed steel Alloy steeia'containing, with.or without other el-ts, et leaat ~of the three elements molybdenum, tungsten and v11nadi1m1 with a cambined content by weight of 7· percmt or more, 0.6 percent or more of carbon and 3 to 6 percent of chromi1m1. (e) Silico=manganese steel Alloy ateela containing by weight: - 0. 35 percent or more but not more than 0. 7 percent of carbon - Q. 5 percant-. or more but not more than 1. 2 percent of manganese, and - 0.6 percent or more but not more than 2.3 percimt of silicon, but not containing any other el-t in a proportion that tlOUld give the steal the cbaracteriatica of 11110ther.alloy steel. 2. For the claaaification of ferroalloys in the subheadings of heading 7202 the following rule should be observed: Aferroalloy ia considered 11!1 binary and.classified under the relevant subheading (if it exists) if only one of the alloy •l-ta acaada the minillun percentage laid down in chapter note l(c): by analogy, it ia considered respectively as ternary or quaternary if ~ or thrae alloy al-ta exceed th• min1lluD percentage. For the application of t.ru.s rule, the unspecified "other elements" referred to in chapter note l(c) 1111st each exceed 10 percent by ..ight . . Mditipgal u.'s. Rot.ea 1. For the parpos.. of the tariff schedule .the followiDg· expruaiona have the 111eaning11 hereby assigned to them: (a) High-strength ataal Flat.-zolled products of a. thiclmaas of lns than 3 - and having a minima yield point of 275 HPa or of a thiclmea. of 3 - or ae and having a lllinilluD yield point of 355 HPa. (b) Universal mill plate Flat-rolled products rolled an four.faces or in a closed boJt pus, of a width exceeding 150 - bUt not exceeding 1,2'0 - and of thiclmeu of not lUa than 4 -. not in coila md without patterns in relief. (c) Concp\e reinforcig bars and roe!• Bot-rolled ban and mda c:cmt.aining indmt.at.iana, rills, groans or other defomat.ions produced during the rolling proc..a or twist.ad after rollillg. (d) Razor blade steel Flat-rolled products of at.ainlns steel not ovu 0.25 - in thiclmesa and not over 23 am in width, and containing by ..ight. not over 14. 7 percant. of c:hrallim, certified at the t1- of mtry to be used in the mmiufact.ure of razor · bladu. <•> Tool at.eel Alloy at.nla which contain th9 follawing caminationa of al-ts in the quantity by weight respectively indicated: (1) more than 1.2 percmt cadlon md IDDF! than 10.5 percmt. chromi1111; or (ii) not leas than O.:> percmt. carbon and 1.25 pUc:mt or more bUt. leaa than 10.5 percmt. chrcmim; or (iii) not lna than 0.85 percmt. carbon md 1 percant to 1.8 percant, incluaiv., 1111111ganeae; or (iv) 0.8 percmt. to 1.2 percant., incluaiv., chrcmim and 0.8 percent to 1.4 percant, .incluaiv., molybd-; or ~ (v) not lua than 0.5 percmt carbon and not leas than 3.5 percent molybdemn; or (vi) not lau than 0.5 perc:aat. carbon and not less than 5.5 percant. tungstm. F- 7 HARMONIZED TARIFF SCHEDULE of the United States (1992) Annotated for Statistical Repoftlng Purposes (f) Chipper knife steel Alloy tool at.eels Mlich contain, in addition t.o iron, each of the foU-ing el~t.a by weight in the amount specified: (i) not lea a than 0. 48 nor more than 0. SS percent of carbon; (ii) not leaa than 0.2 nor more than O.S percent of manganese; (iii) not leaa than 0. 7S nor more than 1. OS percent of silicon; (iv) not leaa than 7 .2S nor more than 8. 7S percent of chraDiwa; (v) not leaa than 1.2S nor more than 1. 7S percent of molybden11D; (vi) none, or not more than 1.7S percent of tungsten; and (vii) not leaa than 0. 2 nor more than 0. SS percent of vanadiwa. (g), Heat-resisting steel xv 72-S Alloy ateela containing by -ight leas than 0. 3 percent of carbon and 4 percent or more but le11 than 10. 5 percent of chrani\ID. (h) Ball-bearing steal Alloy tool at.eels Mlich contain, in addition t.o iron, each of the foll.owing •1-t.a by wight in th• llllOUllt apecified: (i) not laaa than 0.9S nor more than 1.13 percnat of carbon; (ii) not laaa than 0.22 nor more than 0.48 percnat of mmganeae; (iii) none, or not more than O. 03 percent of aulfur; (iv) none, or not more than 0.03 percent of phoaphorua; (v) not. laaa than 0.18 nor more then 0.37 percnat of silicon; (vi) not. leaa than 1.25 nor more than 1.65 perc1111t of chraDl.1111; (vii) none, or not more than 0.28 percent of nickel; (vUU none, or not more than 0.38 percent of copper; CMS (is) none, or not more then 0.09 percent. of molybd9D\lll, For the parpoaea of this chapter, unleaa the cont.ext. provide• ot.he.ndH, the t.em "!urtb•r ..Ork!d" refera t.o product.a aubJect.od to any of the following surface treatiMnta: poliahing and bumiahiq; artificial ozidation; chemical aurface treai-it.a auch u phoaphatising, ozalating end berating; coating with metal; coating with .,_tallic 1ub1tancea (e.g., -Una. vamiahing, lacquering, painting, coating wi~ plaatica material.a); or cladding. llo allowance or reduct.ion of duties for partial damage or loaa in consequence of diacoloration or rust occurring before entry ahall be made upon iron or at.eel or upon any article of iron or at.eel. xv 72-6 F-8 HARMONIZED TARIFF SCHEDULE of the United States (1992) Annotated for Statistical Reporting Purpoaes Statistical Notes 1. For the :PU"POHS of the tariff schedule, the expre11&ion high-nickel alloy steel refers to alloy steel conta.ining by weight. 24 percent or more of nickel, with or without other eltmants. . 2. For the :PU"POHS of subheading 7204 .10, waste md scrm of cast iron includes but is not necessarily limited to: cupola cast (ISRI n\Bber 252); charging box cut CISR.I number 253); heavy breakable cast CISR.I mmi>er 254); hS11118r blocks or bases (ISRI nmiber 255): burnt iron CISRI nmber 256); mixed cut CISRI nmber 257); stave plate, clean cast iron stove (ISRI number 258); clean auto cast CISR.I nmibers 259, 262 and 263); motor blocks CISR.I number 260); drop broken machinery cast (ISRI nmber 261); malleable (ISRI nmber 264); ingot molda and stools CISRI nmbers 265 and 266); and railroad ferrous scrap consiating of cut iron No. 1, No. 2, No.3 and No. 4, cut iron brake shoes and No. 1 wheels. 3. For the purposes of subheading 7204.41 or 7204.49 the expression: (a) No. 1 heavv melting includes, but is not _necessarily limited to: No. 1 heavy -lting steel CISRI nmbers 200, 201 and 202); bundled No. 1 ateel CISRI nmber 217); cut steel (ISRI nmber 233); springs and crankshafts (!SR.I mmi>er 244); ship scrap; and railroad ferrous scrap consisting of cast steel No. 1 and No. 2, railroad No.1 -lting steel, spring steel, destroyed steel·cars, destroyed steel car sides and box car roofs (note: other types of railroad farrows scrap_ are included in some of the grades listed below); . . (b) No. 2 hem melting includes, but is not neceaaarily limited to: No. 2 heavy melting steel (ISRI nmbers 203, 204, 205 and 206); bundled Ho. 2 steel (ISRI nmber 218); foundary steel (ISRI nmbers 242 and 243)_; and hard steel cut 76 cm and under (ISRI 111S11ber 248); (c) No. 1 bgndles includes, but is not nacnaarily limited to: Bo. 1 buaheling (ISRI IUllber 207); n .. black sheet clippings (ISRI mmi>er 207A); Ro. 1 bundles (ISRI mmi>er 208); electric furnace bundles (ISRI mmiler 235); silicon-bearing steel busheling, clippings, and bundles CISRI nunilers 239, 240 and 250): Ho. 1 railioad ferrous sheet acrap; and car clips: (d) Ho· 2 bundles includes, but. is not necessarily limited to: No. 2 bundles CISRI namer 209); Ro. 3 bundles CISRI nmber 214); incinerator bundles CISRI msaber 215); terne plate bundlea CISRI nmber 216); and auto alaba CISRI mmmers 224 and 225): (e) J!orinas. shcmtlinas and tuminp includes, but it not necessarily limited to: Hachine ahop turnings, shoveling turnings and iron borings CISRI nmbera .219, 220, 221, 222 and 223); briquetted iron borings (ISRI nmber 226); briquetted steel turnings CISRI mmiler 227); alloy free turnings (ISRI m.lllbers 245, 246 and 247): heavy turnings (ISRI m.aber 251): chmical borings, No. 1 and Ro. 2 (ISRI mmi>ers 267 and 271): malleable borings (ISRI mmmer 270); steal ahaviiias: and railroad ferroas scrap canaisting of No. 1 turnings and No. 2 turnings, drill.inas a/or borings; (f) Shr!dded scrap includn, but ia not necesaariq limit..t to: Shredded clippings (ISRI nmber 212>: a shredded 8lltalllbile scrap (ISRI nmi>ers 210 and 211): (g) Cut plate and atruct.ursl includes but is not. necmaily limited to: Bi:J.et., bloaD and fora• crops <ISRI nmd:ler 229); bar crOp., pmcbinga and plate acnp CISRI nmilera 230 mid 234); plate and structural CISRI mmmers 231, 232, 23!, 237 and 238); chargeable ingots mid ingot butts (ISRI ll\lliler 241); and chargeable al.ab crops (ISRI llllliler 249). Heading/ Stat. Suf. Subheading & cd 7206 7206.10.00 00 s 7206.90.00 00 8 7207 7207 .11.00 00 3 7207.12.00 10 0 so l 7207.19.00 30 9 90 6 7207.20.00 2S 3 4S 9 7S 2 90 3 7208 7208.11.00 00 2 7208.12.00 00 1 7208.13 7208.13.10 00 8 7208.13.SO 00 9 7208.14 7208.14.10 00 7 7208.14.SO 00 8 F- 9 HARMONIZED TARIFF SCHEDULE of the United States (1992) Annotated tor Statistical Reporting Purposes Units Rates ol Dutv Article Description of 1 Quantity General Soecial II. IRON AND NONALLOY STEEL Iron and nonalloy steel in ingots or other pri- mary foz:ms (excluding iron of heading 7203): Ingots ........•.•...............•••.....•...... kg ...... 4.2% Free CE.IL) 2.SZ (CA) Other ..•........•.•.............•..••.•.•...•. kg .•..•. 4.2% Free CA.E,IL) 2.SZ (CA) Sa!U.finished products of iron or nonalloy steel: Containing by weight less than 0.2S percent of carbon: Of rectangular (including square) cross section, the width measuring leaa than twice the thickness ..•.....••........•... kg ...••. 4.2% Free CE.IL) 2.SZ (CA) Other, of rectangular (other than square) cross section •....••.•.....•...•. ........ 4.2% Free CE,n> .. 2.S% (CA) Having a width measuring less then four ti.mes the thickness ...••....... kg Having a width measuring at least four ti.mes the thickness ...••..•.•.• kg Other ..•..••.•••.••.••.•...•••••••..•••.• ........ 4.2% Free CE.IL> 2.S% (CA) Of circular cross section ..•.•..•.•. kg Other ....•.•...••.....•••...•.•.••.• kg Containing by weight 0.2S percent or more of carbon .•.••....••.•....••.••..•.•...•••••.•••• ........ 4.2% Free CE.IL) 2.S% (CA) Of rectangular (including square) cross section: Having 11 width measuring leas than four ti.mes the thitjatess •..••••.•.•• kg Having a width measuring at least four times the thickness ...••..•...• kg Of circular cross section ..•••..••..•.... kg Other ..•..••..••.•••.•••.. ·••••.....•.•.•• kg Flat-rolled products of iron or nonalloy steel, of a width of 600 am or more, hot-rolled, not clad, plated or coated: In coils, not further worked than hot- rolled, of high-str911gth steel: Of a thickness exceeding 10 am .••.•••••.• kg •••••• 6% Free CE.IL) 3.6% (CA) Of a thickness of 4. 7S am or aiore but not exceeding 10 11111 •••••••••••••••••••••• kg •••••• 6% Free CE.IL) 3.6% (CA) Of a thickness of 3 am or more but less than 4.7S am: Pickled ..•.••.•.••..•••••.••.••••••• kg •••.•. S.1% Free CE,n> 3% CCA> Ot.bar •••••••••..••.•.••.•..••.•..••• kg •••••• 4.9% Free CE.IL) 2.9% CCA> Of 11 thickneH of less than 3 am: Pi:lt:&.ad •.•.•.•..•.....•.....•.•••••• kg ..••.. S.1% Free CE, IL) 3% (CA) Other •.••.•••.•.••••.•••••••.••.••.• kg .••••• 4.9% Free CE,IL) 2.9% (CA) 20% 20% 20% 20% 20% 20% 20% 20% 2 xv 72-9 0.4¢/kg + 20% 20% 0.4¢/kg + : 20% 20% Heading/ Stat. Subheading Suf. & cd 7212 7212.10.00 00 7 7212.21.00 00 4 7212.29.00 00 6 7212.30 7212.30.10 30 5 90 2 7212.30.30 00 7 7212.30.SO 00 2 7212.40 7212.40.10 00 9 7212.40.SO 00 0 7212.50.00 00 8 7212.80.00 00 6 7213 7213.10.00 00 6 7213.20.00 00 4 7213.31 7213.31.30 00 5 7213.31.80 00 8 7213.39.00 3o 7 80 0 80 4 F-10 HARMONIZED TARIFF SCHEDULE of the United States (1992) Annotated tor Statlatlcal Reporting Purpoaea Units Rates or Uutv Article Description of 1 Quantity General Soecial Flat-rolled products of iron or nonalloy ataal, of a width of leaa t.ban 600 am, clad, plated or coated: Plated or coated with tin •••..•••••••••••••••• kg •.•••• 3.51 FrH CE.IL) 2.11 (CA) Electrolytically plated or coated with sine: Of high-strength at.eel ••••••.•••••••••.•. kg •••••• 6.51 Free CE.IL) 3.91 (CA) Other •••.••••••.•••••••••••••••••••••••.. kg •.•••• 6.SZ Free CE,IL) 3.9% CCA) Otherwise plated or coated with &inc: Of a width of leas than 300 am: Of a thickneaa exceeding 0.25 am or more •....••••••••..••••••••••••••••. ........ 3.41 Free CE,IL) 21 CCA) Of a width leaa than 51 am, in coila ....................... kg Other .......................... kg Other ............................... kg ••.••• 2.41 Fm CE,IL> 1.41 (CA) Other .................................... kg ...... 6.SZ FrH CE;IL) 3.SZ (CA) Painted, varnished or coated with plutica: Of a width of leas than 300 am ••••••••••• kg ••••.• 3.41 Free CE,IL) 2% (CA) Other •.•• ~ ............................... kg •••••• 5.11 Free .CE,IL) 31 (CA) Otherwise plated or coated •••••••••••.•••••••• q ...... 6.51 Free CE.IL) 3.91 (CA) Cl.ad •••••••••• • ••••••••••• • •••• • •••••••• • •••• • q ...... 8.SZ Free (!,IL) 3.SZ (CA) Bars lllld rods, bot-rolled, in irregularly -.ii. coila, of iron or nonaUoy. at.Ml: Concrete reinforcing bars lllld rods •••••••••••• q ...... · 4.91 Free CE, IL) 2.91 (CA) Of free-cut.ting steal...................... ., .. q ...... 1.91 Free CE,IL) 1.11 CCA) Other, cont.aining by weight leas than 0. 25 percmt of carbon: Of circul.u croaa Hction muuring la• than 14 1111 in di-tar: Bot t.mlpered, not treated lllld ~ part.l.y mmi:ufactur911 ••••••••••••••••• q ...... 1.n Free (!,IL) 1.ll (CA) Other ............................... q ...... 2.31 Free <E,IL) 1.31 (CA) Other .................................... ········ 1.n Free (E,IL> 1.11 ·(CA) Of circular croaa section:· With a di.-t.er of· 14 • or more but lna than 18 •· •••••• q With a dim.tar of 19 11111 or more •••••••••••••••••••••• : •• ·•• q Other ••••••••••••••••••••••••••••••• q 61 21.51 21.51 25% 251 21.5% 251 2 xv 72-15 0.4¢/kg + 201 21.51 30% 20% 5.51 5.5% 8% s.sz F-11 HARMONIZED TARIFF SCHEDULE of the United States (1992) xv 72-16 Annotated tor Statistical Reporting Purposes Heading/ Stat. S bh d. Suf. Article Description u ea ing & cd Units of Quantity 7213 (con. Bara and rods, hot-rolled, in irregularly wound coil•, o! iran or nonalloy 1teel (con.): Other, containing by weight 0.2S percent or more but leas than 0.6 percent o! carbon: 7213.41 O! circular cross ••ctian measuring leas than 14 11111 in dillllllt•r: 7213.41.30 00 3 Not tempered, not treated and not partly manufactured .•••••••••••.••.• kg ...... 7213.41.60 00 8 Other •••.••.••••••••••••••••.•..•••• Jta •••••• 7213. 49. 00 Other •••••••••••••••••••.•••••••••••••••• 7213.SO.OO 7214 30 s 60 8 90 2 20 3 40 9 60 4 80 0 7214.10.00 00 s 7214.20.00 00 3 7214.30.00 00 1 7214.40.00 7214.SO.OO 7214.80.00 10 7 30 3 so 8 10 4 30 0 so s 10 2 30 8 so 3 O! circular cro1a 1ection: With a diemeter o! 14 11111 or more but leas than 19 am .•••••• kg With a diemeter o! 19 11111 or more •••••••••.••••••••••••••••• Othar ••••• :·••••••••••••••••••••••••• Other, containing by weight 0.6 percent or mora o! carbon •••• , ••••••••• , ••.•••••••••••••• O! circular cross 1action: kg kg With a di1111111ter o! leaa than 14 am.. kg With a di1111eter o! 14 11111 or more but leas than 19 11111................. ka With a di-ter o! 19 11111 or more.... kg Other.................................... ka Other bars and rods o! iron or nonalloy atHl, not further worked than forged, hot-rolled, hot·dr_, or hot-extruded, but including those twilted after rolling: Forged ••••••••••••••••••.•••••••••• ,, ••••.•• •• Concrete reinforcing. bars and rods .••••••••••• O! free-cutting at.eel ••••.•••••••.•••••••••••• Other, containing by weight leas than 0.2S percent of carbon •••••••.••••••••••••••••••••• Flats .•••••.•••••••••••••••••••••• ,, •••.• , Rounds •••• , •••••••••••••••••••••••••••••• Other ••••.•••••••••••••.•••••••••••••••.• Other, containing by weight O.ZS percent or more but leH than 0.6 percent of carbon •••••• Fleta ................................... . Rounda .................................. . Other ................................... . . Other, containing by weight 0.8 percent or or more of carbon ........................ , ... . . kg ...... Jta •••••• Jta •••••• Flats.................................... ka· 11.oundl...... •• ........ •••• ••• .•.••••••. •• ka Other .••••••••••• ;·....................... kg General 1.9Z 2.3Z 1.9Z 1.H 4.7Z 4.9Z 4.7Z 4.7Z 4.7Z 4.7Z Hates or outv Sl"lecial FrH (E,IL) 1.1% (CA) Frie (E,IL) 1.3% (CA) FrH (!,IL) 1.1% <CA> FrH (E,IL) 1.1% (CA) FrH (!,IL) 2.8% (CA) FrH (E,IL) 2.9% (CA) FrH (E,IL) 2.8% CCA) FrH (!,IL) 2.8% CCA) FrH (E,IL) 2.8% (CA) FrH (E,IL) 2.11 <CA> s.sz 6% s.sz 20Z 20Z 20Z 20% 20% zoz 2 Heading/ Stat. Sut. Subheading & ed 7224 7224.10.00 05 8 45 0 75 3 7224.90.00 05 1 15 9 25 7 35 5 45 3 55 0 ll5 8 75 6 7225 7225.10.00 00 2 7225.20.00 00 0 7225.30 7225.30.10 00 6 7225.30.30 05 7 50 1 7225.30.SO 30 1 llO 4 7225.30.70 00 3 F-12 HARMONIZED TARIFF SCHEDULE of the United State!# ( 1992) Annotated tor Statistical Reporting Purposes Units Hates of uutv Article Description of 1 Quantity General · sceeial IV. OTHER ALLOY STm.; eoi.LcM DRIU BARS AND l!QQS, OF ALLOY OR NONALLOY STEEL Other alloy atael in ingots or other primary forms; sanifinished products of other alloy steel: Ingots and other primary fo1111S ......•••.••.•.. ........ 5.1% Free (E,ILl 3% (CA) Of high-nickel alloy steel: ....•••...•••. kg Other: of· t.ool at.eel ...•....••...•...••••.. kg Other ..•••••..•..•.•..•.•..••....• ;. kg Other •.........•.••.••.••.•.....•••.•..•••••.•. ........ 5.1% Free (E,ILl 3% (CAl Of high-nickel alloy steel .•..•....••.... kg Other: Of t.ool at.eel: Of rectangular (including aquara) croaa section: Having a width lass than four times the thickness .. kg Having a width at least four times the thickness .. kg Other •••.••.•..••. ·.•.•....•.•.• kg Ot.har: Of rectangular (including square) croaa section: Having a width leas than four times the thicknH.11 .• kg Bwing a width at least four times t.be t.bickne1111 .• kg Of circular cross section .••••• kg Other •.••••.••.•.•••••••••••••• kg Flat-rolled prociucta of other alloy at.Ml, of a width of 600 am or man: •Of silicon electrical at.eel .••.••••••••••••••• kg •••••• 5.8% Fraa (E,IL) 3.4% (CA) Of high-speed ataal .••.•••••...•••••..•••••••• kg •••••• 10,5% Free (E,IL) 6.3% (CA) Other, =t further worked than hot-rolled, in coils: Of a t.bidalna of 4.75 am or more: Of t.ool at.eel (ot.har than high- apaed at.eel) ••••••••.•••.••••••••••• kg •••••• 9.U Fna (!,IL) 5.7% (CA) Other .•••••••••••••.•••••••••••••••• ........ 3.111 Fr ff CE.IL> 2.2% <CA> Of high-nickel alloy at•l ••••• kg Ot.har ••.••.••••...••••.•••••••• kg Of a thidmaaa of lna than 4. 75 am: Of t.ool at.eel (ot.Mr than high- apaed atHl) ••••••••.•••.••••••••••• ........ 9.8% FrH (E,IL> 5.7% (CA) Of ti.U-baarina at.aal •••••••••• ta Ot.har •••••••.•••••••••••••.••.• kg Other •••••••.•.•••••.•••.••..•••••.• kg •••••• 9.5% FrH (!,IL) 5.7% (CA) 28% 28% 28% 32% 29% 28% 29% 28% 2 xv 72-25 F-13 xv 72-28 HARMONIZED TARIFF SCHEDULE of the United States (1992) Annotated for Statistical Reporting Purposes Heading/ Stat. S bh d. Suf. u ea ing & cd Article Description Units of Quantity General 7227 Bars and rods, hot-rolled, in irregularly wound coils, of other alloy steel: 7227.10.00 00 0 Of high-speed steel. ............. ; .....•...... kg...... 5.3% 7227.20.00 00 8 Of silico-manganese steel ......•.......•...... kg...... 4.5% 7227.90 7227.90.10 7227.90.20 7227.90.60 7228 7228.10.00 30 5 60 8 30 3 60 6 05 5 50 9 10 7 30 3 60 6 7228.20 7228.20.10 00 5 7228.20.50 00 6 7228.30 7228.30.20 00 1 7228.30.40 00 7 7228.30.60 00 2 7228.30.80 05 3 50 7 7228.40.00 00 3 Other: Of tool steel (other than high-speed steel): Not tempered, not treated, and not partly manufactured ...•....•.•.•.... Of ball-bearing steel ......... . Other ...•......•............... Other ..••.......•.....•..•.......... Of ball-bearing steel ...•...... Other ....•.....•............... Other ...•..........•....•..........•....... kg kg kg kg Of high-nickel alloy steel.......... kg Other............................... kg Other bars and rods of other alloy steel; angles, shapes and sections, of other alloy steel; hollow drill bars and rods, of alloy or non- alloy steel: Bars and rods, of high-speed steel .••..•••..•. Not cold-formed.......................... kg Cold-formed: With a maxim.ml cross-sectional dimension of less than 18 lllD •••••••• kg With a maxinlml cross-sectional dimension of 18 lllD or more ..•.....•. kg Bars and rods, of silico-mangane"ae steel: 2.1% 4.2% 4.5% 11.5% Not cold-formed.......................... kg...... 6% Cold-formed.............................. kg...... 7 .5% Other bars ·and rods, not further worked than hot-rolled, hot-drawn or extruded: Of tool steel (other than high-speed steel): Of ball-bearing steel •. ·••••.•.•••.•. kg...... 6.1% Of chipper knife steel, not cold-formed......................... kg...... Free Other •.•.••..••...•..••••.••...••..• kg .••••. Other ..•••••...•...••..•..•.•.••.••..•... Of high-nickel alloy steel ..•.•..••. kg Other............................... kg Other bars and rods, not further worked 10.6% 6% than forged. . • • . . • . • • • • • • • • • . • . • • . • • • . • . • • . . • . kg. • . . . . 6% Rates or uutv _Saecial Free CE.IL) 3.1% (CA) Fre~ CE.IL) 2. 7% (CA) Free CE,IL) 1.2% (CA) Free CE.IL> 2.5% (CA) Free CE,IL) 2.7% (CA) Free CE,IL) 6.9% (CA) Free CE,IL) 3.6% (CA) Free CE.IL) 4.5% (CA) Free CE.IL) 3.6% (CA) Free (E,IL) 6.3% (CA) Free CE,IL) 3.6% (CA) Free CE.IL> 3.6% (CA) 14% 10% 12% 11% 10% 32% 28% 28% 29% 28% 29% 28% 28% 2 G-1 APPENDIX G AVAILABLE INFORMATION ON ALTERNATIVE "LIKE-PRODUCT" INDUSTRIES Figure G-1 Like-product scenarios: Certain Steel Products hem Semi- Cut-length Coiled finished bars bars Carbon: Certain epeclal G-1 G-16 G-19 L..da.lllamuth G-2 N.A. N.A. flM·lllllChlnlng G-3 N.A. N.A. Al •PKW G-4 N.A. N.A. Men:hant G-5 N.A. N.A. Total carbon G-6 N.A. N.A. Cert.in Aloy: Certain epecllll G-7 G-17 G-20 Le8d a. blernuth G-8 N.A. N.A. FIM-machlnlng G-9 N.A. N.A. Al epecllll G-10 N.A. N.A. ~n• cert81n lllloy: Certain epeclal G-11 G-18 G-21 Lead• lllarnuth G-12 N.A. N.A. f1M-machlnlng G-13 N.A. N.A. Al•pec:W G-14 N.A. N.A. Total catbon a. certain eDoy G-15 N.A. N.A. N.A. = Not Available ftable numbers) Total bars Rods G-22 G-37 G-23 G-38 G-24 G-39 ' G-25 G-40 G-26 G-41 G-27 G-42 G-28 G-43 G-29 G-44 G-30 G-45 G-31 G-46 G-32 G-47 G-33 G-48 G-34 G-49 G-35 G-50 G-36 G-51 Bars & rods G-52 G-53 G-54 G-55 G-56 G-57 G-58 G-59 G-60 G-61 G-62 G-63 G-64 G-65 G-66 Semifin., Bars & rods G-67 G-68 G-69 G-70 G-71 .G-72 G-73 G-74 G-75 G-76 G-77 G-78 G-79 G-80 G-81 G") I N Figure G-1--Continued Like-product scenarios: Certain Steel Products Item Semi- Cut-length Coiled finished bars bars Subject non-free-machining: Carbon G-82 G-85 G-88 Aloy G-83 G-86 G-89 Total carbon • certain alloy G-84 G-87 G-90 SubjKt f,..-machlnlng lnon~ad/blamuth): Carbon G-103 G-106 G-109 Aloy G-104 G-107 G-110 Total carbon • certain alloy G-105 G-108 G-111 N.A. = Not Available (table numbers) Total bars Rods G-91 G-94 G-92 G-95 G-93 G-96 G-112 G-115 G-113 G-116 G-114 G-117 Bars & rods G-97 G-98 G-99 G-118 G-119 G-120 Semlfm., Bars & rods G-100 G-101 G-102 G-121 G-122 G-123 G'") I w G-4 TABLES G-1 THROUGH G-12 CONTAIN CONFIDENTIAL BUSINESS PROPRIETARY INFORMATION. * * * * * * * G-5 Table G-13 All free-machining carbon & alloy steal samifinisbad products: SUlllllary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 CQuantity=short tons, valua•l,000 dollars, unit values and unit labor costs are par short ton, period changas•parcant, except where noted) Reported data Item U.S. consumption quantity: Amount .................... . Producers' share 1/ ....... . Importers' share 1/: Brazil (subject) ........ . All sources ............. . U.S. consumption value: Amount .................... . Producers' share 1/ ....... . Importers' share 1/: Brazil (subject) ........ . All sources ............. . U.S. importers' imports from-- Brazil (subject): Imports quantity ........ . Imports value ........... . Unit value .............. . All sources: Imports quantity ........ . Imports value ........... . Unit value .............. . U.S. producers'-- Average capacity .......... . Production ................ . Capacity utilization 1/ ... . U.S. shipments: Quantity ................ . Value ................... . Unit value .............. . Export shipments: Quantity ................ . Exports/shipments l/ ... . . Value ................... . Unit value .............. . Ending inventories ........ . Inventory/shipments 1/ .... . Production workers ........ . Hours worked (l,OOOs) ..... . Total comp. ($1,000) ...... . Hourly total comp ......... . Productivity (tons/hour) .. . Unit labor costs .......... . Net sales ................. . COGS/sales 1/ ............. . Operating income (loss) ... . Op. income (loss)/salas 1/. 1989 1,014,691 91. 5 ••• 8.5 357,084 90.6 *** 9.4 *** *** *** 86,194 33,626 - $390.12 1,861,493 956,002 51.4 928,497 323,458 $348.37 *** *** *** *** *** 18.8 670 l,422 33,971 $23.89 0.548 $43.63 *** *** *** *** 1990 1,070,938 93.0 *** 7.0 366,282 91.7 *** 8.3 *** *** *** 75,310 30,521 $405.27 1,880,442 1,006,551 53.5 995,628 335,761 $337.24 *** *** *** *** *** 15.2 679 1,468 35,264 $24.02 0.544 $44.12 *** ••• ••• ••• 1991 848,470 90.9 *** 9.1 296,721 88.9 ••• 11.1 *** ••• *** 77,414 33,019 $426.52 1,807,156 770,063 42.6 771,056 263,702 $342.00 ••• *** *** *** *** 15.5 559 1,155 30,064 $26.03 0.522 $49.88 *** *** *** *** Jan. -Har. -- 1991 1992 193,031 81.0 *** 13.0 69,433 85.0 *** 15.0 ••• *** *** 25,129 10,407 $414 .14 439,968 164,953 37.5 167,902 59,026 $351.55 *** *** *** *** *** 21.1 502 266 6,926 $26.04 0.490 $53.22 *** ••• ••• ••• 275,141 89.4 *** 10.6 95,830 88.6 *** 11.4 *** *** *** 29,051 10,882 $374.58 449, 114 248,350 55.3 246,090 84,948 $345.19 *** *** *** *** *** 11.6 595 361 9,590 $26.57 0.582 $45.57 ·~·*** ***· *** 11 'Reported data' are in percent and 'period changes' are in percentage-point. ~/ Less than 0.05 percentage points. 3/ Not applicable. ' !t Not available. Period changes· Jan. -Mar. 1989-90 1990-91 1989-91 1991-92 +5.5 +1.5 *** -1.5 +2.6 +1.1 *** -1.1 *** ••• *** -12.6 -9.2 +3.9 +1.0 +5.3 +2.2 +7.2 +3.8 -3.2 *** *** *** *** *** -3.5 +1.3 +3.2 +3.8 +0.6 -0.6 +1.1 *** *** *** *** -20.0 -2.1 *** +2.1 -19.0 -2.8 *** +2.8 *** *** *** +2.8 +8.2 +5.2 -3.9 -23.5 -10.9 -22.6 -21.5_ +1.4 *** *** ••• *** ••• +0.3 -17.7 -21.3 -14.7 +8.4 -4.2 +13.0 ·~~· ***· *** *** -16.4 -0.6 ••• +0.6 -16.9 -1. 7 *** +l. 7 ***· *** *** -10.2 -1. 8 +9.3 -2.9 -19.4 -8.7 -17.0 -18.5 -1.8 ••• *** *** *** *** -3.2 -16.6 -18.8 -11.5 +9.0 -ti .8 +14.3 ••• *** ••• ••• +42.5 +2~5 *** -2.5 +38.0 +3.6 *** -3.6 *** *** *** +15.6 +4.6 -9.6 +2.1 +50.6 +17.8 +46.6 +43.9 -1. 8 ••• *** *** *** *** -9.5 +18.5 +35.7 +38.5 +2.0 +18.9 -14. 4 *** *** *** ••• Note.--Period changes are derived from the unrounded data. Period changes involving negative period data are positive i! the !lffiOunt of the negativity decreases and negative if the amount o! the negativity increases. Part-year inventory ratios are annualized. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade COlllllission. G-6 Tabla G-14 All spacial-quality carbon & alloy· steal semifiniahad products: SU11111ary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 (Quantity-short tons, valua0 l,OOO dollars, ·unit values and unit labor coata are par abort ton, period changaa-parcent, except where noted) Item U.S. consumption quantity: Amount .................... . Producers' share l/ ....... . Importers' share 1/: Brazil (subject) ........ . All sources ............. . U.S. consumption value: Amount ................. ·... . Producers' share l/ ....... . Importers' share 1/: Brazil (subject) ........ . All sources ............. . U.S. importers' imports from-- Brazil (subject): Imports quantity ...... : .. Imports value ........... . Unit value .............. . Ending inventories ...... . All sources: Imports quantity·........ . Imports value ........... . Unit value .............. . U.S. ·producers•--· Average capacity ......... ·.. Production ................ . Capacity.utilization 1/ ... . U.S. shipnants: Quantity ................ . Value ................... . Unit value .............. . Export shipnents: Quantity ................ . Exports/ahipnents 1/ .... . Value ................... . Unit value .. ~ ........... . Ending inventories ........ . Invantory/shipnants !/.-. .. . Production workers ........ . Hours worked (l,OOOs) ..... . Total comp. ($1,000) ...... . Hourly total comp ......... . Productivity (tons/hour) .. . Unit labor costs .......... . !lat sales ................. . COGS/sales!/ ............. . Operating income (loas) ... . Op. income (loss)/salas !/. Reported data 1989 5,670,509 91. l 3.0 8.9 2,007,391 91. 0 2.9 9.0 172,621 58,722 $340.18 21, 726 506,727 179,680 $354.59 8,376,859 5,454,523 65.1 5,163,782 l,827,711 $353.95 *** ....*** *** *** . 12.l 3, 165 6,448 149,469 $23.18 0.487 $47 .62 233. 715 98.2 (9, 747) (4 .2) 1990 6,518,555 91.5 2.2 8.5 2,144,089 91. 7 2.0 8.3 140,330 41,874 $298.40 7,017 556,133 178,358 $320.71 8,644,216 5,964,475 69.0 5,962,422 1,965,731 $329.69 ....*** *** ••• *** 9.9 3,364 7,000 161,045 $23.01 0.481 $47.87. 280,274 101. 6 (22,465) (8.0) Jan. =t1ar. -- . 1991 1991 1992 5,699,763' 1,539,806' 1,703,762 89.2 86.9 87.4 3.7 10.8 1,914,134 89.9 3.5 10.l 212,975 67,024 $314.70 32,3~8 616,047 193,400 $313.94 4.0 13.1 514,208 87.6 3.7 12.4 60,927 19,262 $316.15 1?,509 202,387 63,654 $314.52 8,462,395 2,098,930 5,121,362 l,318,658 60.5 62.8 5,083,716 1,720,734' $338.48 ••• *** *** *** *** 10.7 2,998 5,830 141,781 $24.32 0.474 $51.27 215,528 109.7 (38,059) (17.7) 1,337;419 450,554 $336.88 *** *** *** *** *** 10.6 2,775 l,452 34,983 $24.09 0.439 $54.91 i1 v3/ v 3.1 12.6 547,293 88.2 2.9 ll. 8 53,166 15;867 $298,44 35,995 214,495 64,728 $301.77 2,138,968 l,486,629 69.4 l,489,267 482,565 $324.03 *** *** .. *** *** *** 9.0 3,095 l,659 41,616 $25.08 0.510 $49.14 i1 3/ 3; j; !/ 'Reported data' are in percent and 'period changes' are in percentage-point. ~/ An incraaae of lesa than 0.05 percentage points. it Not available. . Period changes Jan. -Har. 1989-90 1990•91 1989-91 1991-92 +15.0 +0.4 -0.9 -0.4 +6.8 +0.6 -1.0 -0.6 -18.7 -28.7 -12.3 -67.7 +9.8 -0.7 -9.6 +3.2 +9.3 +3.9 +15.5 +7.6 -6.9 ••• *** *** *** *** -2.2 +6.3 +8.6 +7.7 -0.8 -l. 3 +0.5 +19.9 +3.4 -130.5 -3.8 -12.6 -2.3 +l.6 +2.3 -10.7 -1.8 +l.5 +l.8 +51.8 +60.l +5.5 +361.3 +10.8 +8.4 -2.l -2.l -14.l -8.5 -14.7 -12.5 +2.7 *** *** *** *** *** +0.8 -10.9 -16.7 -12.0 +5.7 -1.3 +7.l -23.l +8.l -69.4 -9.6 +o.5 -1.9 +0.7 +l. 9 -4.6 -1.2 +0.6 +l.2 +23.4 +14.l -7.5 +49.0 +21.6 +7.6 -11.5 +1.0 -6.l -4.6 -1.6 -5.9 -4.4 *** *** *** *** *** -1.4 -5.3 -9.6 -5.l +4.9 -2.6 +7.7 -7.8 +ll.5 -290.5 -13.5 +10.6 +0.6 -0.8 -0.6 +6.4 +0.6 -0.8 -0.6 -12.7 -17.6 -5.6 +84.5 +6.0 +l.7 -4.l +l.9 +12.7 +6.5 +ll.4 +7.1 -3.8 *** *** *** *** ••• -1.6 +11.5 +14.3 +19.0 +4.l +16.3 -10.5 3/ J/ 11 i1 Note.--Period changes are derived from the unroundad data. Period changes involving negative period data are positive if the amount of the negativity decreases and negative if the amount of the negativity increases. Part-year inventory ratios are annualized. Source: Compiled froai data submitted in response to questionnaires of the U.S. International Trade Comnission. G-7 TABLES G-15 THROUGH G-33 CONTAIN CONFIDENTIAL BUSINESS PROPRIETARY INFORMATION. * * * * * * * G-8 Table G-34 All free-machining carbon & alloy steel bars (including cut rods): SUlllll8ry data concerning the. U.S. market, 1989-91, January-March 1991, and January-March 1992 (Quantity-short tons, value•l,000 dollars, unit values and unit· labor costs are per short ton, period changes"'Percent, except where noted) Reported data Item U.S. consumption quantity: Amount .................... . Producers' share!/ ....... . Importers' share !/: Brazil (subject) ........ . All sources ............. . U.S. consumption value: Amount .................... . Producers' share!/ ....... . Importers' share !/: Brazil (subject) ........ . All sources ............. . U.S. importers' imports from-- Brazil (subject): Imports quantity ........ . Imports value ........... . Unit value ...... ; ....... . All sources: Imports quantity ........ . Imports value ........... ·. Unit value .............. . U.S. producers'-- Average capacity .......... . Production ................ . Capacity utilization!/ ... . U.S. shipments: Quantity ................ . Value ................... . Unit value .............. . Export shipments: Quantity ................ . Exports/shipments!/ .... . Value ................... . Unit value .............. . Ending inventories ........ . Inventory/shipments!/ .... . Production workers ........ . Hours worked (1,000s) ..... . Total comp. ($1,000) ...... . Hourly total comp ......... . Productivity (tons/hour) .. . Unit labor costs .......... . Net sales ................. . COGS/sales!/ ............. . Operating income (loss) ... . Op. income (losa)/sale.s !/. 1989 1990 922,501 87.5 *** 12.5 481,317 87.8 *** 12.2 ••• *** *** 115,201 58,915 $511. 41 1,497,328 802,252 54.9 807,300 422,402 $523.23 *** ••• *** *** *** 12.3 1,472 2,785 78,205 $28.08 0.247 $109.57 338. 017 91.1 16,737 5.0 976,748 87.7 ••• 12.3 498,509 88.3 *** 11. 7 *** *** *** 120,447 58,438 $485.18 1,533,179 876,535 58.8 856,301 440,071 $513.92 *** *** *** ••• ••• 12.1 1,385 2, 776 78,697 $28.35 0.267 $102.05 341,871 93.7 7,883 2.3 1991 783,505 83.1 ••• 16.9 393,890 83.4 *** 16.6 ••• ••• ••• 132,431 65,482 $494.46 1,530,147 671;964 45.2 651,074 328,408 $504.41 ••• ••• ••• ••• ••• 13.9 1,222 2,174 67,610 $31.10 0.260 $113.17 266,169 96.4 (3,424) (1.3) Jan.-Mar.-- 1991 1992 173,321 89.6 *** 10.4 90,940 90.7 ••• 9.3 ••• *** ••• 18,028 8,465 $469.55 380,457 149, 711 40.7 155,293 82,475 $531.09 *** *** *** *** *** 12.5 1,213 585 17,590 $30.07 0.204 $138.97 4/ 4; 4; !1 219,121 92.9 *** 7.1 113,372 93.3 *** 6.7 *** *** *** 15,464 7,589 $490.75 389, 110 201,353 53.1 203,657 105, 783 $519.42 *** *** *** ••• ••• 9.3 1,415 718 21,337 $29.72 0.242 $118.45 4/ 4; 4; !1 1/ 'Reported data' are in percent and 'period changes' are in percentage-point. ~/ An increase of less than 0.05 percentage points. 3/ Not applicable. it Not available. Period changes Jan. -Mar. 1989-90 1990-91 1989-91 1991-92 +5.9 +0.2 *** -0.2 +3.6 +0.5 *** -0.5 ••• *** ••• +4.6 -0.8 -5.1 +2.4 +9.3 +3.9 +6.1 +4.2 -1.8 *** *** *** *** *** -0.2 -5.9 -0.3 +0.6 +1.0 +8.1 -6.9 +1.1 +2.7 -52.9 -2.6 -19.8 -4.6 *** +4.6 -21.0 -4.9 *** +4.9 *** *** *** +9.9 +12.1 +1.9 -0.2 -23.3 -13.6 -24.0 -25.4 -1.9 *** *** ••• ••• ••• +1.9 -11.8 -21. 7 -14.1 +9.7 -2.7 +10.9 -22.1 +2.7 -143.4 -3.6 -15.1 -4.4 *** +4.4 -18.2 -4.4 *** +4.4 *** *** *** +15.0 +11.1 -3.3 +2.2 -16.2 -9.7 -19.4 -22.3 -3.6 *** *** ••• *** *** +1. 7 -17 .0 -21.9 -13.5 +10.7 +5.2 +3.3 -21.3 +5.4 -120.5 -6.2 +26.4 +3.3 *** -3.3 +24.7 +2.6 *** -2.6 *** ••• *** -14 .2 -10.3 +4.5 +2.3 +34.5 +12.4 +31.1 +28.3 -2.2 *** *** *** ••• *** -3.2 +16.7 +22. 7 +21.3 -1.2 +18.7 -14.8 4/ 4; 4; y Note.--Period changes are derived from the unrounded data. Period changes involving negative period data are positive if the amount of the negativity decreases and negative if the amount of th• negativity increases. Part-year inventory ratios are annualized. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Coamission. G-9 Table G-35 All special-quality carbon & alloy steel bars (including cut roda): Suzmiary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 (Quantity=short tons, valueml,000 dollars, unit values and unit labor coats are per short ton, period changes-percent, except where noted) Item U.S. consumption quantity: Amount ...............•..... Producers' share 1/ ....... . Importers' share 1/: Brazil (subject) ........ . All sources ............. . U.S. consumption value: Amount. o o o O 0 o o I 0 0 0 o o 0 0 o o o 0 0 Producers' share 1/ ....... . Importers' share 1/: Brazil (subject) ........ . All sources ............. . U.S. importers' imports from-- Brazil (subject) Imports quantity ........ . Imports value ........... . Unit value .............. . Ending inventories ...... . All sources: Imports quantity ........ . Imports value, ......•.... Unit value .............. . U.S. producers'-- Average capacity .......... . Production ................ . Capacity utilization 1/ ... . U.S. shipments: Quantity ................ . Value ................... . Unit value .............. . Export shipments: Quantity ................ . Exports/shipments 1/ .... . Value ................... . Unit value .............. . Ending inventories ........ . Inventoi:Y/shipments 1/ .... . Production workers ........ . Hours worked (l,OOOs) ..... . Total comp. ( $1, 000). ..... . Hourly total comp ......... . Productivity (tons/hour) .. . Unit labor costs .......... . Net sales ................. . COGS/sales 1/ ............. . Operating income (loss) ... . Op. income (loss)/sales 1/. Reported data 1989 4,453,348 88.9 0.6 11.1 2,290,934 89.8 0.6 10.2 28,814 13,495 $468.35 293 493,848 233,069 $471. 94 5,895,013 3,959,643 69.2 3,959,500 2,057,865 $519.73 *** *** *** *** *** 10.9 5,153 10,415 239,371 $22.98 0.289 $79.95 1,790,692 86.8 159,538 8.9 1990 4,632,834 90.8 0.9 9.2 1991 4,130,878 90.1 1.0 9.9 2,295,045 2,020,741 91.4 90,4 0.8 8.6 41, 747 18,243 $436.99 417 424,314 198,273 $467 .28 6,175,036 4,315,918 71. 9 4,208,520 2,096, 772 $498.22 *** *** *** *** *** 12.2 5,068 10, 5.65 244, 111 $23.11 0.306 $75.88 1,796,882 88.9 112,060 6.2 0.9 9.6 42,733 17,966 $420.42 454 408,251 194,285 $475.90 6,168,818 3,726,399 62.1 3,722,627 1,826,456 $490.64 *** *** *** *** ••• 12.3 . 4,895 9,719 233,818 $24.06 0.281 $86.10 1,587,116 91.5 47,760 3.0 Jan.-Har.-- 1991 1992 985,773 ~1.4 1.2 8.6 493,469 91.8 1.1 8.2 12, 123 5,483 $452.28 2,695 84,850 40,375 $475.84 1,674,647 865,499 52.9 900,923 453,094 $502.92 ••• ••• ••• *** *** 12.5 4,708 2,445 57, 772 $23.63 0.251 $94.87 . 4/ y 4/ !1 1,102,822 92.0 0.8 8,0 534,211 92.2 0,7 7.8 8,350 3,790 $453.89 3,851 88,031 41,590 $472.45 1,625,013 1,042,107 65.8 1,014, 791 492,621 $485.44 ••• ••• *** ••• *** 11.2 4,879 2,644 65,284 $24.69 0.291 $85.42 4/ 4; 4; :ii !/ 'Reported data' are in percent and 'period changes' are in percentaee-point. ii A decrease of less than 0.05 percentage points. ii An increase of less than 0.05 percentage points. !/ Not available. Period changes Jan.-Har. 1989-90 1990-91 1989-91 1991-92 +4.0 +1.9 +0.3 -1. 9 +0.2 +1.5 +0.2 -1.5 +44.9 +35.2 -6.7 +42.3 -14.l -14.9 -1.0 +4.8 +9.0 +2.7 +6.3 +1.9 -4.l ••• *** *** *** *** +1.3 -1.6 +1.4 +2.0 +0.5 +5.8 -5.1 +0.3 +2.1 -29.8 -2.7 -10.8 -0.7 +O,l +0.7 -12.0 -1.0 +0.1 +1.0 +2.4 -1.5 -3.8 +8.9 -3.8 -2.0 +1.8 -O.l -13.7 -9.7 -11.5 -12.9 -1.5 *** ••• *** ••• ••• +O.l -3.4 -8.0 -4.2 +4.1 -8.2 +13.5 -11. 7 +2.6 -57.4 -3.2 -7.2 +1.2 +0.4 -1.2 -11.8 +0.6 +0.3 -0.6 +48.3 +33.1 -10.2 +54.9 -17.3 -16.6 +0.8 +4.6 -5.9 -7.1 -6.0 -11.2 -5.6 *** *** ••• *** ••• +1.4 -5.0 -6.7 -2.3 +4.7 -2.8 +7.7 -11.4 +4.7 -70.1 -5.9 +11.9 +0.6 -0.5 -0.6 +8.3 +0.4 -0.4 -0.4 -31.1 -30.9 +0.4 +42.9 +3.7 +3.0 -0.7 -3.0 +20.4 +12.9 +12.6 +8.7 -3.5 *** *** *** *** *** -1.3 +3.6 +8.1 +13.0 +4.5 ·+16.0 -10.0 4/ 4; 4; it Note.--Period changes are derived from the unrounded data. Period changes involving negative period data are positive if the amount of the negativity decreases and negative if the amount of the negativity increases. Part-year inventory ratios are annualized. Source:. Compiled from data submitted in response to questionnaires of the U.S. International Trade Conmission. G-10 TABLES G-36 THROUGH G-83 CONTAIN CONFIDENTIAL BUSINESS PROPRIETARY INFORMATION. * * * * * * * G-11 Table G-84 Subject non-free-machining carbon and alloy steel semifinished products: SUDJDary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 (Quantity=short tons, value=l,000 dollars, unit values and unit labor costs are per short ton, period changes=percent, except where noted) Reported data Jan.-Har.-- Item 1989 1990 1991 1991 1992 U.S. consumption quantity: Amount .................... . Producers' share l/ ....... . Importers' share 1/: Brazil. , . , , ..... , , ... , , .. All sources ............. . U.S. consumption value: Amount .................... . Producers' share 1/ ....... . Importers' share l/: Brazil. ................. . All sources ............. . U.S. importers' imports from-- Brazil: Imports quantity ........ . Imports value ........... . Unit value .............. . Ending inventories ...... . All sources: Imports quantity ........ . Imports value ..•........ ·. Unit value .....•......... U.S. producers'-- Aver.age capacity .......... . Production ................ . Capacity utilization 1/ ... . U.S. shipments: Quantity ................ . Value ................... . Unit •.·alue .............. . Export shipments: Quantity ................ . Exports/shipments!/ .... . Value ................... . Unit value .............. . Ending inventories ........ . Inventory/shipments!/ .... . Production workers ........ . Hours worked (l,OOOs) ..... . Total comp. ($1,000) ...... . Hourly total comp ..... ~ ... . Productivity (tons/hour) .. . Unit labor costs .......... . Net sales ................. . COGS/sales 1/ ............. . Operating income (loss) ... . Op. income (loss)/sales 1/. 4,655,818 91.0 *** 9.0 1,650,307 91. l *** 8.9 *** *** *** *** 420,533 146,054 $347.31 6,515,366 4,498,521 69.0 4,235,285 1,504,253 $355. 17 *** *** *** *** *** 10.6 3,235 6,312 145,928 $23.12 0.374 $61. 76 6/ 61 ii §/ 5,447,617 91.2 *** 8.8 1,777,807 91.7 *** 8.3 *** *** *** ••• 480,823 147,837 $307.47 6, 763, 774 4,957,924 73.3 4,966,794 1,629,970 $328.17 *** *** *** ••• *** 8.9 3,375 6,758 154,639 $22.88 0.380 $60.29 !I 6/ it !I 4,851,293 88.9 *** 11.1 1,617,413 90.l *** 9.9 ••• *** *** ••• 538,633 160,381 $297.76 6,655,239 4,351,299 65.3 4,312,660 1,457,032 $337.85 *** *** *** *** *** 9.8 2,985 5,591 135,057 $24.16 0.387 $62.48 !/ §./ !I !I 1,346,775 86.8 *** 13.2 444. 775 88.0 *** 12.0 *** *** *** *** 177,258 53,247 $300.39 1,658,962 1,153,705 69.5 1,169,517 391,528 $334.78 *** *** *** *** *** 9.2 2, 779 1,414 33,859 $23.95 0.358 $66.80 !I 6t it §.t 1,428,621 87.0 *** 13.0 451,463 88.1 *** 11.9 *** ••• *** ••• 185,444 53,846 $290.36 1,689,854 1,238,279 73.1 1,243,177 397,617 $319.84 ••• *** ••• *** ••• 8.5 3,078 1,566 38,924 $24.86 0.407 $61.11 §.I 6/ ii §.I 11 'Reported data' are in percent and 'period changes' are in percentage-point. 'l:.I An increase of less than 0.05 percentage points. Al A decrease of less than 0.05 percentage points. !/ An increase of 1,000 percent or more. 21 Positive figure, but less than significant digits displayed. §./ Not available. Period changes Jan.-Har. 1989-90 1990-91 1989-91 1991-92 +17.0 +0.2 *** -0.2 +7.7 +0.5 ••• -0.5 ••• *** *** *** +14.3 +1.2 -11.5 +3.8 +10.2 +4.3 +17.3 +8.4 -7.6 ••• *** ••• ••• *** -1.8 +4.3 +7.1 +6.0 -1. 0 +1.4 -2.4 6/ 61 6t it -10.9 -2.3 *** +2.3 -9.0 -1.6 ••• +1.6 *** *** *** *** +12.0 +8.5 -3.2 -1. 6 -12.2 -8.0 -13.2 -10.6 +2.9 *** *** *** ••• *** +0.9 -11.6 -17 .3 -12.7 +5.6 +1.9 +3.6 6/ 61 it §./ +4.2 -2.1 *** +2.1 -2.0 -1.1 ••• +1.1 *** *** *** *** +28.l +9.8 -14 .3 +2.1 -3.3 -3.7 +1.8 -3.1 -4.9 *** *** *** *** *** -0.8 -7.7 -11. 4 -7.4 +4.5 +3.3 +1.2 !I 6/ 61 §:1 +6.1 +0.2 *** -0.2 +1.5 'l:.I ••• *** *** *** *** +4.6 +1.1 -3.3 +1.9 +7.3 +3.6 +6.3 +1.6 -4.5 *** *** *** *** *** -0.7 +10.8 +10.7 +15.0 +3.8 +13.5 -8.5 6/ 61 i1 §./ Note.--Period changes are derived from the unrounded data. Period changes involving negative period data are positive if the amount of the negativity decreases and negative if the amount of the negativity increases. Part-year inventory ratios are annualized. Source: Compiled from deta submitted in response to questionnaires of the U.S. International Trade Conmission. G-12 TABLES G-85 THROUGH G-92 CONTAIN CONFIDENTIAL BUSINESS PROPRIETARY INFORMATION. * * * * * * * G-13 Table G-93 Certain special quality non-free-machining carbon and alloy steel bars: SUJDDary data concerning the U.S. market, 1989-91, January-March 1991, and January-March 1992 (Quantity~short tons, valueal,000 dollars, unit values and unit labor costs are per short ton, period changes"'Percent, except where noted) Item U.S. consumption quantity: Amount .................... . Producers' share!/ ....... . Importers' share !/: Brazil .................. . All sources ............. . U.S. consumption value: Amount .......•............. Producers' share!/ ....... . Importers' share !/: Brazil. ................. . All sources ............. . U.S. importers' imports from-- Brazil: Imports quantity ........ . Imports value ........... . Unit value ...•........... Ending inventories ...... . All sources: Imports quantity ........ . Imports value ............ . Unit value .............. . U.S. producers'-- Average capacity .......... . Production ................ . Capacity utilization!/ ... . u.s: shipments: Quantity ................ . Value ................... . Unit value .............. . Export shipments: Quantity ................ . Exports/shipments!/ .... . Value ................... . Unit value .............. . Ending inventories ........ . Inventory/shipments!/ .... . Production workers ........ ; Hours worked (1,000s) ..... . Total comp. ($1,000) ...... . Hourly total comp ......... . Productivity (tons/hour) .. . Unit labor costs .......... . Net sales ...... ·........... . COGS/sales !/ .. · ........... . Operating income Closs) ... . Op. income Closs)/sales !/. Reported data 1989 3,530,847 89.3 *** 10.7 1,809,617 90.4 *** 9.6 *** *** ........... 378,647 174,154 $459;94 4,397,685 3,157,391 74.1 3,152,200 1,635,463 $518.83 ...... ......... ***.....10.5 5,003. 10,150 244,924 $24.13 0.226 $107.28 1,452,675 85.8 142,801 9.8 1990 3,656,086 91. 7 *** 8.3 1,796,536 -92.2 ...... 7.8 ....•••.......... 303,867 139,835 $460.18 4. 641, 857 3,439,383 76.2 1991 3,347,373 91.8 .....8.2 1,626,851 92.1 ..... 7.9 ....•••........ 275,820 1281803 $466.98 4,638,671 3,054,435 67.7 3,352,219 ·3,071,553 1,656,701 1,498,048 $494.21 $487.72 ••• •••................ 12.3 4,921 10,293 249,680 $24.26 0.239 $101. 90 1,455,011 87.7 104, 177 7.2 .. .... ...•••....*** 11.9 4,739 9,481 238,434 $25.15 0.226 $112.06 1,320,947 90.5 51,184 3.9 Jan.-Har.-- 1991 1992 812,452 91.8 ....8.2 402,529 92.1 ....7.9 *** ....*** .... 66,822 31,910 $477.54 1,294,190 715,788 56.5 745,630 370,619 $497.05 ....•••..... •••....12.5 4,539 2,358 59,320 $25.16 0.207 $122.33 285,415 90.4 10,732 3.8 883,701 91.8 ....8.2 420,839 91.9 ....8.1 *** *** ......... 72,567 34,001 $468.55 1,235,903 840,754 69.8 811, 134 386,838 $476.91 .. ...••• ••• •••....11.8 4,534 2,470 64,521 $26.12 0.239 $109.98 300,926 88.2 20,743 6.9 !/ 'Reported data' are in percent and 'period changes' are in percentage-point. Z/ An increase of less than 0.05 percentage points. ii A decrease of less than 0.05 percentage points. Period changes Jan. -Mar. 1989-90 1990-91 1989-91 1991-92 +3.5 +2.4 ...... -2.4 -0.7 +1.8 .....-1.8 ..............••• -19.7 -19.7 +0.1 +5.6 +8.9 +2.1 +6.3 +1.3 -4.7 ...... ....... •••....+1.8 -1. 6 +1.4 +1.9 +o.5 +5.7 -5.0 +0.2 +2.0 -27.0 -2.7 -8.4 +0.1 •••-O.l -9.4 -0.1 ••• +0.1 ............. .... .. .. -9.Z -7.9 +1.5 -O.l -11.2 -8.5 -8.4 -9.6 -1.3 ••• •••....... .. .......-0.4 -3.7 -7.9 -4.5 +3.7 -5.6 +10.0 -9.Z +2.8 -50.9 -3.3 -5.2 +2.5 *** -2.5 -10.1 +1.9 ....-1.7 ............ ...... -27.2 -26.0 +1.5 +5.5 -3.3 -6.4. -2.6 -8.4 -6.0 ..................... ...+1.4 -5.3 -6.6 -2.6 +4.2' -0.3 +4.5 -9.1 +4.7 -64.Z -6.0 +8.8 y ...... +4.5 -o.z ....+0.2 •••........••• +8.6 +6.6 -1.9 -4.5 +17.5 +13.3 +8.8 +4.4 -4.l ••• •••....•••....-0.7 -0.1 +4.7 +8.8 +3.8 +15.4 -10.1 +5.4 .-z.z +93.3 +3.1 Note.--Period changes are derived from the unrounded data. Period changes involving negative period data are positive if the amount of the negativity decreases and negative if the amount of the negativity increases. Part-year inventory ratios are annualized. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Commission. ) G-14 TABLES G-94 THROUGH G-123 CONTAIN CONFIDENTIAL BUSINESS PROPRIETARY INFORMATION. * * * * * * * G-15 Prices U.S. producers were asked to provide f .o.b. plant prices and delivered prices on sales of the two selected hot-rolled bar products listed below that are not subject to this investigation for the period January-March 1989 through January-March 1992. For the product 1 category listed below, price data were requested for the largest sales to a cold finisher. For product 2, price data were requested for the largest sale to a steel service center or distributor. Importers were not asked to provide price data on these products. Product 1: Hot-rolled leaded alloy bars, 41IAO grade, in cut-lengths or coils 1/2 to 1-1/2 inch rounds. Product 2: Hot-rolled carbon steel bars, merchant quality, in cut lengths or coils, 3/16 through 2-15/16 inches in diameter, thickness, all shapes except flats, Ml016 through Ml044 grades, not thermal treated. *** domestic producers provided data that were complete or largely complete for product 1, and*** firms provided complete data for product 2. *** were the largest suppliers of product 1, and *** was the predominant supplier of product 2. No clear ~rend in the weighted-average prices was evident for either product category during the 3-year period. Table G-124 Weighted-average net f .o.b. prices of U.S. producers for sales of product 1 to cold finishers and sales of product 2 to steel service centers or distributors, and total quantities of shipments, by quarters, January 1989-March 1992 * * * * * * * H-1 APPENDIX H SUMMARY DATA ON OPERATIONS OF TRADITIONAL AND MINIMILL PRODUCERS H-3 Table H-1 All special-quality carbon & alloy steel bars and rods: SU111Dary data concerning minimill producers, 1989-91, January-March 1991, and January-March 1992 (Quantity-short tons, valuecl,000 .dollars, unit values and unit labor costs are per short ton, period changes-percent, exceet where notedl Reeorted data Jan,-Mar,-- Item 1989 1990 1991 1991 1992 U.S. producers'-- Average capacity ............ 2,408,466 2,574,540 2,492,181 752,967 703,913 Production ................. 2,572,680 2,807,815 2,629,260 633,235 693,962 Capacity utilization !/ .... 92.3 93.8 89.2 70.1 82.9 U.S. shipments: Quantity ................. 2,510,309 2,682,175 2,630,950 674,060 715,356 Value .................... 989,597 1,079,776 985,818 259,485 262,005 Unit value ............... $394.21 $402.57 $374.70 $384.96 $366.26 Export shipments: Quantity ................. "** *** *** *** *** Exports/shipments!/ ..... *** ••• ••• *** ••• Value .................... *** *** *** *** *** Unit value ............... *** *** *** *** *** Ending inventories ......... *** *** *** *** *** Inventory/shipments!/ ..... 6.4 8.3 7.3 8.3 6.7 Production workers ......... 1,927 2,009 1,968 1,895 1,876 Hours worked ( 1, OOOs) ...... 4,426 4,456 4;459 1,081 1,093 Total comp. ($1,000) ....... 100,062 102,746 100,583 23,964 26,899 Hourly total comp .......... $22.61 $23.06 $22.56 $22.17 $24.61 Productivity (tons/hour) ... 0.350 0.366 0.338 0.326 0.355 Unit labor costs .......... ·. $65.45 $63.59 $67.23 $68.86 $70.38 Net sales .................. 812,010 871,601 824,049 11 11 COGS/sales l/ .............. 80.2 79.6 81.3 11 Al Operating income Closs) .... 104,487 120,675 100,043 11 11 Op. income (loss)/sales !/. 12.9 13.8 12.1 11 Al 1/ 'Reported data' are in percent and 'period changes' are in percentage-point. 2; Big positive figure--1,000.0 percent or more. ~/ Not available. Period chane;es Jan.-Har. 1989-90 1990-91 1989-91 1991-92 +6.9 -3.2 +3.5 -6.5 +9.1 -6.4 +2.2 +9.6 +1.5 -4.6 -3.1 +12.0 +6.8 -1.9 +4.8 +6.1 +9.1 -8.7 -0.4 +1.0 +2.1 -6.9 -4.9 -4.9 *** *** *** ••• *** ••• *** ****** *** *** *** *** *** *** *** *** *** *** *** +l.9 -1.1 +0.8 -1.6 +4.3 -2.0 +2.1 -1.0 +0.7 +0.1 +0.7 +1.1 +2.7 -2.1 +0.5 +12.2 +2.0 -2.2 -0.2 +11.0 +4. 7 -7.6 -3.2 +8.9 -2.8 +5.7 +2.7 +2.2 +7.3 -5.5 +1.5 ~/ -0.6 +1.7 +1.0 11 +15.5 -17.1 -4.3 11 +l.0 -1.7 -0.7 11 Note 1.--Firms were deemed to be 11 minimill 11 producers if their method of production is billet casting. Data from the following firms have been included in the above table: *** These *** firms accounted for *** percent of U.S. production of special quality carbon and alloy steel products in 1991. Note 2.--Period changes are derived from the unrounded data. Period changes involving negative period data are positive if the amount of the negativity decreases and negative if the amount of the negativity increases. Part-year inventory ratios are annualized. Source: Compiled from data submitted in response to questionnaires of the U.S. International Trade Conmission. H-4 Table H-2 All special-quality carbon & alloy steel bars and rods: SU11111ary data concerning traditional producers, 1989-91, January-March.1991, and January-March 1992 (Quantity-short tons, value•l,000 dollars, unit values and unit labor coats are per abort ton, period changes-percent, except where noted) Reported data J!!!!,-Hai;:,-- Item !989 1990 1991 199! 19n U.S. producers'-- Average capaci i:.y ........... 4,503,547 4,349,496 4,425,137 1,176,180 1,175,450 Production ................. 2,609,052 2, 741,012 2,250,196 501,762 667,923 Capacity utilization 1/ .... 57.9 59.1 48.7 42.7 56.8 U.S. shipments: Quantity ................. 2,676,465 2,713,364 2,237. 311 546,238 646,689 Value .................... 1,447,156 1,410,013 1,595,888 28il,834 333,334 Unit value ............... $540.70 $519.66 $713.31 $528. 77 $515.45 Export shipments: Quantity ................. *** ••• *** *** *** Exports/shipments 1/ ..... *** *** ••• ••• ••• Value ...... ·.............. ••• *** ••• ••• ••• Unit value ... , ........... *** ••• ••• *** *** Ending inventories ......... ••• ••• ••• ·- ••• Inventory/shipments 1/ ..... 10.2 11.2 13.0 10.8 11.7 Production workers ......... 4,305 4,144 4,083 3,866 4,134 Hours worked (1, OOOs) ...... 8,295 8,460 7,684 1,903 2, 120 Total comp. ($1,000) ....... 195,380 199,342 196,757 47,483 54,753 Hourly tota~ comp .......... $23.53 $23.55 $25.59 $24.93 $25.82 Productivity (tons/hour) ... 0.311 0.321 0.289 0.261 0.313 . Unit labor costs ........... $75.75 $73.46 $88.41 $95.59 $82.51 Net sales ........ ; ......... 1,362,361 1,324,128 1, 114, 553 y y ' COGS/sales 1/ .............. 87.8 92.4 96.3 y y Operating income (loss) .... 116,212 39,494 (18, 630) y y Op. income (loss)/sales 1/. 8.5 3.0 Cl. 7) y y 1/ 'Reported data' are in percent and 'period changes' are in percentage-point. ~/ An increase of less than 0.05 percentage points. it A decrease of less than 0.05 percentage points. ii A decrease of less than 0.05 percentage points. fe1::iod chan5es Jan.-Har. 1989-90 1990-91 1989-91 1991-9~ -3.4 +1.7 -1.7 -0.1 +5.1 -17.9 -13.8 +33.1 +1.2 -10.4 -9.3 +14.1 +1.4 -17.5 -16.4 +18.4 -2.6 +13.2 +10.3 +15.4 -3.9 +37.3 +31.9 -2.5 *** *** *** *** ••• ••• *** ••• ••• -· *** ....••• ••• *** -··*** ·- ••• ••• +1.0 +1.8 +2.8 +0.9 -3.7 -1.5 -5.2 +6.9 +2.0 -9.2 -7.4 +11.4 +2.0 -1.3 +o.7 +15.3 +0.1 +8.6 +8.7 +3.6 +3.2 -9.7 -6.8 +20.0 -3.0 +20.4 +16.7 -13.7 -2.8 -15.8 -18.2 y +4.6 +3.8 +8.5' ii -66.0 -147.2 -116.0 y -5.5 -4.7 -10.2 y Note 1.--Firms were deemed to be "traditional" producers if their method of production includes ingot casting. Data from the following firms have been included in the above table: ***· Thea• -• firms accounted for *** percent of U.S. productio~ of special quality carbon and alloy steel products in 1991. Note 2.--Period changes are derived from the unrounded data. Period changes involving negative period data are positive if the amount of the negativity decreases and negative if th• amount of the negativity increaeea. Part-year inventory ratios are annualized. Source: Compi~ed from ~ata submitted in response to questionnaires of the U.S. International Trade Caamission. J-1 APPENDIX J EFFECTS OF IMPORTS ON PRODUCERS' EXISTING DEVELOPMENT AND PRODUCTION EFFORTS, GROWTH, INVESTMENT, AND ABILITY TO RAISE CAPITAL J-3 EFFECTS OF IMPORTS ON PRODUCERS' EXISTING DEVELOPMENT AND PRODUCTION EFFORTS, GROWTH, INVESTMENT, AND ABILITY TO RAISE CAPITAL The Commission requested U.S. producers to describe and explain the actual and potential negative effects of imports of the subject special quality carbon and alloy steel products from Brazil on their existing development and production efforts (including efforts to develop a derivative or more advanced version of the product), growth, investment, and abiltty to raise capital. The responses by producers are shown below. SUBJECT SPECIAL QUALITY CARBON AND ALLOY STEEL OPERATIONS *** firms--***--stated "No" to the actual and potential negative effects of imports of the subject special quality carbon and alloy steel products from Brazil on their operations producing those products. Comments of firms responding in the affirmative are presented below. * * * * * * * LEAD AND BISMUTH STEEL OPERATIONS The Commission also asked U.S. producers to describe and explain the negative impact of imports of subject special quality carbon and alloy steel products from Brazil on their cash flow, wages, ability to raise capital, investment, or development and production efforts on their lead and bismuth steel products operations. The responses by producers are shown below. *** firms--***--stated "No" to the negative impact of imports of subject special quality carbon and alloy steel products from Brazil on their lead and bismuth steel products operations. Comments of firms responding in the affirmative are presented below. * * * * * * * MERCHANT QUALITY STEEL OPERATIONS The Commission also asked U.S. producers to describe and explain the negative impact of imports of subject special quality carbon and alloy steel products from Brazil on their cash flow, wages, ability to raise capital, investment, or development and production efforts on their merchant quality steel products operations. All *** firms responding to this question--stated "No" to the negative impact of imports of subject special quality carbon and alloy steel products from Brazil on their merchant quality steel products operations. K-1 APPENDIX K EC DUMPING DECISIONS K-3 No L 95/26 Official journal of the European Communities 9. 4. 92 COMMISSION DECISION No 891/92/ECSC of .30 March 1992 imposing a provisional anti-dumping ducy on imports of certain semi-finished products of alloy steel, originating in Turkey and Brazil THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Coal and Steel Community, Having regard to Commission Decision No 2424/88/ ECSC of 29 July 1988 on protection against dumped or subsidized imports from countries not memben of the European Coal and Steel Community('). and in particular Anicle 11 thereof, Alter consultation within the Advisory Committee as provided for by the above Decision, Whereas: A. PROCEDURE (I) In February 1990 the Commission received a complaint lodged by the European Confederation of Iron and Steel Industries (Eurofer) on behalf of producers whose collective output constitutes the majority of Community production of the products in question. The complaint contained evidence of dumping and of material injury resulting there· from, which was considered sufficient to justify the initiation of a proceeding. The Commission accordingly announced, by a notice published in the Offi<ial Journal of 1h1 Europ1an Communi· ti1s(1), the initiation of an anti-dumping procee- ding concerning imports into the Community of cenain semi-finished products of special enginee- ring alloy steel, of rectangular (including square) cross-section, hot-rolled or obtained by continuous casting, falling within CN codes ex 7224 90 09 and ex 7224 90 IS, originating in Turkey and Brazil and commenced an investigation. (2) The Commission officially so advised th~ exporters and importers known to be concerned, the repre- sentatives of the exporting countries and the complainants and gave the parties directly concerned the OJ?portunity to make known their views in writing and to request a hearing. (3) All of the producers/exporters and some importers known to the Commission made their views known (') OJ No L 209, 2. 8. 1988, p. 18 and conigcndum in OJ No L 213, .S. 10. 1988, p. 19. (')OJ No C 144, 14. 6. 1990, p. .S. in writing. Several producers/exponers requested a hearing which was granted. (4) No submissions were made by or on behalf of Community purchasers or processors of the products concerned. (5) The Commission sought and verified all informa· tion it deemed to be necessary for the purpose of a preliminary· determination and carried out investi- gations at the premises of the following compa- nies: EEC produun: - Saarstahl AG, VOlklingen, Germany, - Thyssen Edelstahlwerke AG, Krefeld, Germany, - Edelstahlwerke Buderus AG, Wetzlar, Germany, - Krupp Stahl A~. Bochum, Germany, - KIOc:kner Stahl GmbH, Georgsmarienhutte, Germany, - Asc:ometal. Paris La Defense, France, - ILVA SpA, Sesto S. Giovanni, Italy. Non·EEC produ<1rsltxport1rs: in Brazil: - Villares lndlistriu de Base SA (Vibasa~ Slo Paulo, - A~ Anhanguera SA, Slo Paulo, - Companhia A~ Espec:iais ltabira (Acesita~ Belo Horizonte, - A~ finos Piratini SA, Porto Alegre. in Turkey: - Asil <;elik, Istanbul. (6) The Commission requested and received detailed written submissions from the complainant Community producen and some importers and verified the information therein to the extent considered necessary. (7) The investigation of dumping covered the period from I April 1989 to 31 March .1990. (8) Due to the complexity of the proceeding, in parti- cular the difficulties met by the Commission in obtaining, from some of the interested parties the relevant dat:a. the investigation exceeded the normal period of one year laid down in Article 7 (9) of Decision No 2424/88/ECSC. K-4 'J. 4. ·n. Official Journal of the European Communities No L 95/27 B. PRODUCT UNDER CONSIDERATION, LIKE PRODUCT (9) The products concerned by the proceeding are semi-finished products of rectangular (including square) cross-section, hot-rolled or obtained by continuous casting. Semi-finished products of alloy steel, also known as alloy engineering steel billets, are those steels used to make engineering compo- nents. A large proportion of engineering steels are ultimately destined for the automobile and heavy vehicle industries as components for engines, gear boxes, transmission and steering parts. Other and applications are mining, energy, aerospace and me~hanical engineering. Alloy steel is on the market in a multitude of alloys for different appli- catfons, e.g. special engineering steels such as heat trc~tablc steels, cast hardened steels, nitriding steels, steels for flame and induction hardening, roller bearing steels, spring steels, steels for bolts and nuts etc. (10) Engineering steels arc produced in forms of rectan- gular (including square) billets, bars and coils. Only rectangular billets arc considered as semi-finished products in the sense of this proceeding. Alloy steel billets arc to be distinguished from bars of alloy ·steel which consist basically of the same product but further processed. · (11) During the course of the investigation it became apparent that the words 'special engineering' and nothing to the term 'alloy steel' and that there arc no other products falling under tariff headings 7224 90 09 and 7224 90 15. Therefore the product definition can be simplified in the interests of clarity .to be : semi-finished products of alloy steel, of rectangular (including square) cross-section hot- rolled or obtained by continuous casting, falling within CN codes 7224 90 09 and 7224 90 15. (12) The Commission found that the semi-finished products of alloy steel produced by the Community industry arc like in all essential physical and tech- nical charactcristies to those imported from Turkey and Brazil, which arc also like to those sold for consumption on the Turkish and Brazilian markets. C. DUMPING 1. Nonna! value (13) The Turkish producer was found to sell significant quantities on a profitable basis on the domestic markel Therefore, domestic sales prices were chosen for the determination of normal value. (14) The inflation rate in Turkey was over 70 % per annum during the investigation period. In order to eliminate the effects of inflation, normal value was determined for the shortest. possible meaningful period, i.e. on a per month basis. (b) Brazil (1 S) In the case of all four Brazilian producers, normal values had to be constructed because substantial sales had been made at a loss or there were no· representative sales of the like products exported to the Community on the domestic market. (16) Normal value was determined by adding a reasonable amount for selling, general and adminis- trative expenses and profit to the cost of produc- tion. As only one of the four Brazilian companies concerned showed an operating profit during the reference period, the profit margin retained for this company was also applied for all other companies. (17) The constructed value was calculated on the basis of average figures for cost and profit and was established on a monthly basis in order to take account of the effects of inflation. 2. Export prices (18) The export prices for the Turkish and Brazilian producers for every export transaction to indepen- dent Community customers were determined on the basis of the prices actually paid or payable. (19) In the case of the Turkish producer six alloy steel grades accounted for approximately 70 % of the total Turkish export sales to the Community. The Commission decided, therefore, in agreement with the Turkish producer, to base the dumping calcula- tions on these six alloy steel grades. 3. Comparison (20) Normal values and export prices of the Turkish and Brazilian producers were adjusted to net ex-works level in order to take account of differences in conditions and terms of sale and were compared on a transaction by transaction basis. K-5 No L 95/28 Official Journal of the European Communities 9. •• 92 (21) Where the companies concerned could show peni· nent evidence, allowances for import charges and indirect taxes borne _by materials physically incot· porated in the like product and refunded on export were granted in accordance with Article 2 (10) (b) of Decision No 2'424/88/ECSC. (22) A Brazilian produ(er claimed that, in accordance with Article 2 (IO)(c) (Ill) of Decision No 2424/ 88/ECSC, its normal value should be reduced by the cost of credit granted for the sales under consi- deration on the domestic market because there. were no comparable costs incurred on their export transactions to the Community. (23) The Commission rejected the claim because .it considers that · the payment terms agreed in the sales contracts are directly related to the sales under consideration and that the cost of the credit granted to the customers is normally accounted for in the sales price. Furthennore it was verified that the Brazilian producer had calculated the cost of the credit terms granted and increased the sales price to its clients accordingly. As the Commission, for the purpose of comparison, has not directly allocated these costs to the constructed nonnal value, it is of the opinion that with regard to credit cost, nonnal value and export price have been established on a perfectly comparable basis. '4. Dumping margins (24) The dumping margins were calculated as being the total amount by which the normal values exceeded the prices for export to the Community. (25) The weighted ·average margins of dumping esta· blished and exressed as a percentage of the total cif value of the imports were as ·follows : · - Asil c;clik, Istanbul, Turkey 33,7 % - Villares industrias de Base SA (Vibasa), Slo Paulo, Brazil 7,4 % - A~ ·Anhanguera (Villares) SA, Slo Paulo, Brazil U,0 % - A~ Especiais Itabira (Acesita), Belo Horizonte, Brazil 37J % - A~ Finoa ·Piratini SA, Porto Alegre, Brazil J,7 %. D. INJURY 1. Volume of dumped imports and market shares (a) Cumulation (26) The Commission is of the op1n1on that for the determination of the impact on the Community indusuy, the cumulative effect of all the impons has to be taken into consideration. In analyzing whether cumulation was appropriate, the Commis· sion considered the comparability of the imported products and took further into consideration the enent to which each imported product competed in the Community with the like product of the Community indusuy. In addition, it was taken intO account that the behaviour on the Community market of all exporters was similar and that their market position was as such not negligible .. (27) Accordingly, the Commission concluded that regard should be paid to the effect of the dumped imports cumulated from all the countries and all exporters concerned. (b) Volum1 and marlm sham of dumped imports .(28) The evidence available. to the Commission shows that the combined impons into the Community from Turkey and Brazil · increased from I 0 578 tonnes in 1985 to 69 391 tonnes in 1989 and n 234 tonnes in the investigation period (April 1989 to March 1990). Over the same period Turkish imports went up from 3 880 tonnes to 20 9 59 tonnes and Brazilian imports from 6 698 tonnes to 56 27 5 tonnes. (29) The only Turkish producer known to the Commis- sion claimed that his direct shipments dispatched . to the Community during the investigation period amounted to only 14 152 tonnes as verified by the Commission and that this quantity ought to be retained for the detennination of its import volume and market share, the official uade statistics (Ewostat) beirig unreliable. (30) The · Commission considers that in this case the Eurostat Statistics reflect in a reliable manner the total quantities of the producu in question origina- . ting in Turkey which have been imported into the Community. (31) Discrepancies with dispatch figures of the producer . can stem from the time lag between the date of shipment in the counuy of origin and customs cleannce in the Community u well u from redi- rection of exports towards the Community. The Commission therefore relied on the quantities recorded by EurostaL K-6 9. 4. 92 Official Journal of the European Communities No L 95/29 (32) The imports concentrated on the German, Italian and United Kingom markets, the German market being the most affected with 46 290 tonnes repre- senting 60 % of the total dumped imports. (33) In terms of market shares based on total apparent Community consumption, the market penetration of the dumped imports increased from I .2 % in 1985 to 7,8 % in 1989 and 8,7 % during the inves- tigation period. On the German market alone, the impact of the dumped imports reached 13,7 %, an increase of I I ,I perce~tage points within two yean only. The individual market shares developed from 0,5 % in 1985 to 2,4 % in the investigation period in the case of Turkey. The Brazilian market share rose from 0,8 % to 6,3 % over the same period. 2. Price undercutting (34) The Commission established price undercutting by comparing the exporter's prices of semi-finished products of alloy steel with the corresponding weighted average prices for the identical product sold by the Community producen on an ex-works basis. The comparison was carried out,with prices cif Community border, customs cleared including port and handling charges and for every transaction made by the exporten during the investigation period. (35) The weighted aver.age undercutting margins establi- . shed, broken down by exporten, a.re : - Asil ~lik. Istanbul. Turkey 16 % - Villares Industrias de Base SA (Vibasa). Slo Paulo, Brazil 22 % - A~oes Anhanguera (Villares) SA, Sio Paulo, Brazil 26 % - A~ Especiais ltabira (Acesita). Belo Horizonte, Brazil l 5 % - A~os Finos Piratini SA. Porto Alegre, Brazil 9 %. 3. Situation of the Community industry ·(a) Saks and marlm shares (36) From a cyclical downturn which bottomed out in 1987, consumption in the Community picked up rapidly in 1988 and reached its peak in 1989 with the increase of 16 % compared to the trough in 1987. While in the beginning of the recovery, the complainant Community producen were also able to expand . their sales, they were rapidly lagging behind the overall evolution of demand because of the massively increasing inflow of dumped imports. Up to the investigation period their sales even fell below the level of 1987 which led to a significant loss of market share which decreased from 84 % in 1986 to 71 % in the investigation pe~od. (b) CapacitJ utilization (37) Between i 987 and the investigation period capacity ·utilization of the complaining Community produ- cers generally improved. This was, however, mainly achieved by streamlining production facilities, restructuring efforts of the sector and plant closures in Germany and Italy mainly induced by the conti- nued lack of satisfactory profitability in the presence of the low-priced imports. (c) Prf.ces of Community productrs (38) Between 1985 and 1987 the conjunctural downturn of demand in the Community led to a pronounced slump of prices in the Community. Although the subsequent improvement in demand allowed some Community producen to raise their prices, the possible price increase were suppressed by the competition of the dumped imports and their ·s,igni_ficant price undercutting to the exrent that prices in the investigation period scarcely exceeded the price levels in 1985. (d) Profitability (39) Because of the pttSSure on prices, Community producers had difficulties in generating satisfactory returns. In most cases, the achievable price increases were insufficient even to cover the rise in wage and raw material cost. This situation led in some cases to increasing financial losses, in others profit margins were reduced to or remained at a marginal level insufficient for a healthy develop- ment of the sector in the longer run. In particular, efforts to restructure and rationalize were in a number of cases severly hampered. (40) The Commission took into account that certain Community producers which, because of their elec- tric arc technology in the steelmaking phase could rely heavily on ferrous scrap inputs, found a certain relief on the cost side from the fall in international scrap prices combined with the devaluation of the US dollar against Community currencies. The .. resulting cost advantages partially explain the varia- tion in Community producer's profitability. However, the temporary cost advantages of this nature enjoyed by some Community producen cannot overshadow the overall injurious effects of the low priced imports. 1\.-1 No L 95/30 Official Journal of the Europnn Communities 9. 4. 92 4. Conclusions (41) The preliminary examination of the facts on injury shows that the Community indwtcy 11ras suffering a significant loss of market share, the prevention of price increases to co,·er the rise in wage and raw material costs and a deterioration of the financial results. The Commission therefore concludes that the Community industry was suffered material injury. S. Causation (42) The negative effects suffered by the Community industry coincide with the rapid increase of the dumped imporu originating in Brazil and Turkey. In fact, while imports from Brazil and Turkey increased by a factor of 7, the Community industry lost market shares and suffered important price undercutting. In a highly price sensitive market, such undercutting is extremely detrimental. The loss in market share is in sharp contrast with the brisk increase of consumption in the Community between 1987 and the investigation period. (43) The Commission also examined whether other factors than the dumped imporu might have caused injury to the Communi~· industry. With regard to the volume .and prices of imports origina- ting in other third countries, it was found that these imports also increased. However, their market share was extended between 1985 and the investi- gation period by only 1,6 percen~ points against an increase by 7,S percentage points of the dumped imports. There is, furthermore, no indication that imports from other sources than Brazil and Turkey have been dumped. (+4) The Commission also established that within the restru.cturing process of the sector a certain shift of market share between Community producers has apparently also occured. On the basis of global market figures relating to the product under consi- deration in the Community, it can be assessed that about 2' percentage points of the total loss of 12 percentage points of the complainants are attribu- table to the expansion of other. non-complaining EC producen. This npansion, however, is signifi- cantly lower than that of the dumped imports and cannot, therefore. haw had a comparable impact on the complainant industry. la fact, under these conditions, it hu to be concluded that the importi in question, through the effects of dumping, have caused material injury to the Community industry. E. COMMUNITY INTEREST (45) Production of semi-finished alloy steels is a highly specialized branch of the ECSC steel industry. Its total output represents about 12 % of the bulk raw steel production of the Community. The perfor- mance of the sector has a non-negligible influence through its linkages on the situation of the ECSC steel industry as a whole. Downstream, the industry is of vital importance for the Community manufac- turing industry. It supplies the metal-processing industry with a wide range of special alloy steels, specifically designed for the various applications. Its products are fundamental for mechanical and electrical engineering, the automqtive industry. shipbuilding, the aerospace industry and for other metallic articles. Constant research and develop- ment hu to be carried out to cope with the requi- rements qf the high-tech downstream industries for high-performance materials. In general the industry mus.t be capable of supplying about 600 different alloy steel grades to satisfy the specific needs of its customers and to develop new products to follow the progress in production techniques and increa- sing quality requirements for the finished products. The industry branches vitally depending on these products represent about 45 % of the total labour force and 40 °/e of the total production value of Community manufacturing industry. (46) It is clearly in the interest of the Community that the production of alloy steels, with its widespread ramifications in other essential setors of the manu- facturing industry, continue under healthy condi- tions and that the efficiency of the sector not be further weakened by unfair trade practices. It is therefore considered in the Community's interest to take defensive action against the dumped imports. (47) The Commission is furthermore of the opinion that protection of the Community industry against unfair price competition is also in the interest of the consumers of the products concerned. The imports against which action is to be taken repre- sent a rather limited range of basic alloy steel grades, which however provide for the ground capa- city utilization of the production equipment. Besides the necessity to guarantee the longer-run . K-8 9, 4. 92 Official journal of the European Communities No L 95/31 security of supplies and the maintenance of quality standards of the basic products, the· in.dustry must also be in the position to supply its wide range of specialities at reasonable prices. Phasing out the production of the lower-grade mass products would necessarily lead to a significant deterioration of the cost structure within the coupled production -process and would entail significant price increases for the downstream consumers for essential mate- rials. (48) The Turkish producer claimed that, except for the significant increase within the investigation period, its market share in the Community has always been at a dt minimis level and that after the reference period its market share has again been reduced to a level too insignificant to cause injury to the Community industry such that in the actual situation it could not be in the Community's inte- rest to take protective action. (49) The Commission considers that, given the volatile nature of the trade pattern in steel producti as show'n by the sudden increase of ·Turkish exports of the dumped products, there would be no guarantee ·to prevent the recurrence of injurious dumping should the investigation be concluded without protective measures. An exemption from anti- dumping measures of imports originating in Turkey because of a reduction in volume during the ongoing investigation would also be discrimina- tory towards the Brazilian producers/exporters in the light of recital (26). (SO) On the basis of this consideration, the Commiuion considers that the interests of the Community call for protective measures against dumped imports of semi-finished products of alloy steel in the form of provisional anti-dumping duties. F. PROVISIONAL DlTI'Y (St) Having established that the dumped imports under consideration have caused material injury to the Community industry and that it is in the Commu- nity's interest to take action, the measures envi- saged should be sufficient to eliminate the injury caused. However, the measures should not exceed the dumping margins. Since the main cause of the injury is the price undercutting of the Community industry's prices by the exporters, it is considered necessary to eliminate price undercutting where possible. Therefore, the prices of the exporters should be increased by· their price undercutting margin or their dumping margin, whichever is the lower. On this basis. the Commission considers that the following provisional duties should be imposed: Turkey Brazil with the exc~ption of - Villares Industrias de Base SA (Vibasa~ Sio Paulo, Brazil - A~os Finos Piratini SA, Porto Alegte, Brazil 16,0% 15,0% 7,4% 1,7% (52) A period should be fixed within which the parties concerned may make their views known and request a hearing. Furthermore, it should be stated ,that all findings made for the purpose of this Deci- sion are provisional and may have to be reconsi- dered for the purpose of any definitive duty which the Commission may propose, HAS ADOPTED THIS DECISION : Artidt J 1. A provisional anti-dumping duty is hereby imposed on imports of certain semi-finished products of alloy steel, of rectangular (including square) cross-section, hot- rolled or obtained by continuous casting, falling within CN codes 7224 90 09 and 7224 90 1S and originating in Turkey and Brazil. 2. The rate of the duty, based on the free-at- Community-frontier price, not cleared through cusioms, shall be: - 16,0 % for imports of semi-finished products of alloy steel originating in Turkey, - I 5,0 % for imports of semi-finished products of alloy steel originating in Brazil (faric additional code : 8625). 3. Notwithstanding paragraph 2, the rate of the provisi- onal anti-dumping duty shall be : - 7,4 % for products manufactured by Villares Indust- rias de Base SA (Vibasa~ Slo Paulo, Brazil (faric addi- tional code : 8624). - 1,7 % for products manufactured by A~ Finos Pira- tini SA. Porto Alegte, Brazil (faric additional code : 8623~ ' No. L 95/32 Official Journal of the. European Communities 9. 4. 92 4. The provisions in foree concerning customs duties shall apply. 5. The release for free circulation in the Communiry of the products referred to in paragraph I shall be subject to the provision of a securiry, equivalent to the amount of the provisional dury. Article 2 Without prejudice to Article 7 (4) (b) and (c) of Decision No 2424/88/ECSC; the parties concerned may . make known their views in writing and apply to be heard orally by the Commiision within one month of the date of entry into force of this Decision. Article J This Decision shall enter into force on the day following its publication in the OffiCial journal of tht European Communities. Subject to Articles 11, 12 and 13 of Decision No 2424/ 88/ECSC. Article I of this Decision shall apply for a period of four months, unless the Commission adopts definitive measures before the expiry of that period. This Decision shall be binding in its entirery and directly applicable in all Member States. Done at Brussels, 30 March 1992, For .the Commission Frans ANDlllESSEN Viu-Prtsidenl K-10 2. 7. 92 Official Journal of the European .. Communitin No L 182/23 COMMISSION DECISION No l77S/92/ECSC o( 30 June 1,991 imposin1 a definitive anti-clumping ducy' on importa of· certain semi-finished producca of alloy sceel, originatin1 in Turkey and Brazil, definitiftlf collectin1 the proYiai~nal anci-dumpiq ducy impoMCI on auch importa and accepciq aa undenakiri1 offered in connection wich che anci-clumpin1 proc:eecliag concemin1 imports of chae producca THE COMMISSION OPTHE EU~OPEAN COMMUNmES. Having regard to the Treacy establisbin1 the European Coal and Steel Community, Having regard to Commission Decision No 2424/88/ ECSC of 29 July 1988 on protection apinst dumped or subsidized imports from cou.mies no& memben of the European Coal and Steel Community('). and in particular Articles I 0 and 12 thereef, · · After consuJmions within the AdYilOfY Commiuee 11 provided for by the abow Decision, Wherea: A. PROVISIONAL MIASURU (I) The Commisaion, by Decision No 891/92/ECSC ('). imposed a provisional anti-dumpin1 duty on impona. of certain semi-finiabtd products of alloy steel, originating in Turkey and Bruit. B. SUBSEQUENT PROCIDUlll (l) Following the . impclliQoa of die provisional anti· dumpin1 duty, w nporten requesced and were pnred an oppoRUllicy ID be bead by the Commisaioa • ... submissiolll nprnaing dleir view on the dulr· (J) Upon reqUd. die parties _,. infonned of the euential fKD and consideruionl on the basis of which i1 .,.. inlendecl ID recommend the imposi· tion of definiliYe dulia and the definitive collec· tion of amouna secured by "'Y of a prcmsional ducy. They were also pnled a period within which to make repmentati0111 subsequen1 to the disclo- sure. (4) The onl and wriuen commena submitted by the.. pania were consideftd and. where appropriate, the (') OJ No L ZOt, 2. I. 1911, p. II, 11 comcted in OJ No L 273. s. 10.• , ... p. .,. (') OJ No L "- 9. 4. 1992. p. 26. Commission'• findinp were modified to tab · account of them. C. PRODUCT UNDO CONSIDEllATION (S) After the imposilion of provisional duties it became apparen1 tbal. under die producl description Biven in recital 11 and Anicle I (I) of Decision No 891/ 92/ECSC. the duties apply IO cenain semi-finished produca of alloy high-speed steel fallin1 within CN code 7224 90 I 1 to which the inves1iption did nos relate. 11 is dlcrefort considered appropriate to modify the producl dacriplion u follows in order to exclude cerain alloy high-speed 1teels from die applicalion of the ducy : serni·6niabed produces of alloy sleel. of recllftgular (including 1quare) crou- section, hoc-rolled or oblained by continuous wling. ncludin1 bigh·speed .... fallin1 within CN coda 7224 90 09 and ex 7224 90 IS. D. DUMPING Turkef (6) No new evidence on dumping ha been received since the imposition of the provisional duty and the Commiaion therefore considers its findinp :>n dumping u sec OUI in Decisioa No 891/92/ECSC to be definitjw. Coruequendy, the prelimirwy de1ermination on dumping concemin1 impons from Turkey are confirmed. Bruil (7) On the bail of the duming calculation described in recilals l.S ID 11 and 20 IO 21 of Decision No 891/92/ECSC. the Commiaion provisionally established a diffemll margin of dumping for each of the four Bruilian producm which cooperated durin1 the prelimirwy invesligation. (I) ~ no new evidence on dumpin1 bu been reaived since the imposition of the provisional ducy in rtspect of Hportl made bv Acos Anh~neuf'r~ K-11 No L 182/24 Official Journal of the European Communities 2. 7. 92 (9) (10) (II) (Villares) SA. Sao Paulo, Brazil and by A~os Finos Piratini SA. Porto Alegre, Brazil, the findings on dumping with regard to exports made by these two producers, as set out in Decision No 891/92/ECSC. are therefore considered to be definitive. Regarding the provisional dumping determination for Villares Industrias de Base SA (Vibasa), this producer claimed that the Commission, in constructing normal value, had included in the global amount of selling, general and administra- tive expenses added to manufacturing costs, certain directly related selling expenses in the domestic market which were not incurred in export transac- tions to the Community and requested an adjust- ment under Article 2 (10) (c) (i) and (v) of Commis- sion Decision No 2424/88/ECSC. On the basis of the evidence provided by the exporter, the Commission accepted this claim and amended the calculation of the weighted average dumping margin accordingly to be definitively established at 4,9 % of the cif Community frontier export prices. Regarding the provisional dumping determination for Companhia A~ Especiais ltabira (Acesita~ it was claimed by the exporter that the Cominission had overestimated the impact of inflation on production costs used for the construction of normal value by applying an incorrect index for inflation adjustment. (12) The Commission has confirmed that the adjust- ment index used to bring the export price and production cost to a comparable basis in the month cf export excessively inflated production cost. Given the degrtt of inflation in Brazil, this diffe- rence has a significant impact on the result of the dumping calculation and calls for correction. (13) It was further claimed and evidence provided that certain items in Acesita's financial expenses were related to other activities in the group, in particular Acesita's holding in affiliated companies and should therefore be considered non-operational with regard to production and sales of the products concerned by the proceeding. (14) On the .basis of the evidence submitted, the Commission took account of the arguments raised by the exporter and revised the dumping calcula- tion for Acesita. The weighted average dumping (IS) (16) margin is in consequence definitively established at 8,5 % of the cif Community frontier export prices. E. DUMPING MARGINS The weighted average margins of dumping definiti- vely established and expressed as a percentage of the cif Community frontier export prices are as follows: - Asil Celik, Istanbul, Turkey - A~os Anhanguera (Villares) SA, Sao Paulo, Brazil - A;o• fai;e.:iais ltabira (Acesita), Belo Horizonte, Brazil - Villares lndU5trias de Base SA (Vibasa~ Sao Paulo, Brazil - A~os Finos Piratini SA, Porto Alegre, Brazil 33,7% 15,0% 8,5 °to 4,9% 1,7% For those exporters who did not make themselves known in the course of investigation, the Commis- sion based its findings on the facts available in accordance with Article 7 (7) (b) of Decision No 2424/88/ECSC. It is considered appropriate in die present case and in order to avoid circumven- tion, to use the findings· of the investigation and to apply a dumping margin of 33,7 % for Turkey and ·1 s % for Brazil. F. INJURY (17) As no new evidence regarding injury and causation to the Community industry was received, the Commission confirms the conclusion on injury reached in Decision No 891/92/ECSC. G. COMMUNITY INTEREST (18) No observations were received from any user of the products concerned by the present proceeding and subject to provisional anti-dumping duties, within the time limit laid down in Article 2 of Decision No 891/92/ECSC. (19) The Commission, therefore, confirms its conclu- sions that the interests of the Community call for protective measures against dumped imports of semi-finished products of alloy steel, originating in Turkey and Brazil. K-12 2. 7. 92 Official Journal of the European Communities No L 18U25 H. RATE OF DEFINITIVE DUTY Turkey (20) With regard to exports from Turkey the provisional findings of the Commission having been confirmed, the rate of the definitive anti-dumping duty should be the same as the amo~nt of the provisional anti-dumping. duty. . Brazil (21) With the nception of those exports made by Vibasa and Acesita, the provisional findings of the Commission having been confirmed, the rate of the definitive duty should be the same as the rate of the provisional anti-duMping duty. (22) With regard to exports made by Vibasa or Acesita and in the light of the findings in recitals (9) to (14). the rate of the definitive duty should be equal to the dumping margin which has finally been calculated on the basis of the new elements pttsented by the exponers concerned since the . injUry level as determined in the provisional. deci- Sicin and definitively determined is higher than this margin. I. UNDERTAKING (23) One exponer of the Turkish product, Asil Celik. having hem informed that the main findings of the preliminary investigation would be confirmed, offered an undertaking concerning its expons of semi-finished prOducts of alloy steel to the Community. (24' The effect of this undertaking will be to revise the export prices of the products concerned to the Community. to an ntent sufficient to eliminate the injury caused .to the Community industry. The Commission believes that, administratively, it will be possible to verify that this undertaking is being respected. In view of this, the Commission consi- ders that the undertaking offered is acceptable. (25) Should this undertaking not be complied with or be withdrawn by the producer concerned, the Commission could, in accordance with Anicle 10 (6) of Commission Decision No 2424/88/ECSC, immediately impose a provisional duty on the basis of the results and conclusions of this investigation. Subsequently, a definitive duty could also be imposed by the Commission on the basis of infor- mation gathered in this investigation. (26) The Advisory Committee has been consulted in this course of action and has raised no objection. J. COLLECTION Of PROVISIONAL DU1Y (27) In view of the dumping margins found and the seriousness of the injury caused to Community producers. it is considered necessary that amounts secured by way of provisional anti-dumping duty should be definitively collected to the extent of the amount of the duty definitively imposed and that amounts exceeding these duties should be released. (28) In respect of recital (5). it is appropriate that any securities pledged by way of provisional anti- dumping duty on imports of certain semi-finished products of alloy high-speed · steel, falling within CN code ex 7224 90 15 and originating in Turkey and Brazil, be released, HAS ADOPTED THIS DECISION : Article I The undertaking given by Asil Celik Sanayi ve Ticaret A.S., Istanbul, Turkey, . is hereby accepted. Article 2 I. A definitive anti-dumping duty is hereby imposed on imports of certain semi-finished products of alloy steel. of rectangular (including square) cross-section, hot- rolled or obtained by continuous casting. excluding high- speed steel. falling within CN codes 7224 90 09 and ex 7224 90 15 (faric code : 7224 90 I 5"90), originating in Turkey and Brazil. 2. The rate of the definitive duty, based on the free-at- Community-frontier price, not cleared through customs shall be: - 16,0 % for impons of semi-finished products of alloy steel originating in Turkey (faric additional code : 8672).. . - 15,0 % for imports of semi-finished products of alloy steel originating in Brazil (faric additional code : . 8625). 3. Notwithstanding paragraph 2. the rate of the defini- tive anti-dumping duty shall be : - 8,5 % for products concerned manufactured by A~os Especiais ltabira (Acesita~ Belo Horizonte, Brazil (faric additional code : 8670~ - 4,9 % for products concerned manufactured by Villares lndllstrias de Base SA (Vibasa), Sio Paulo, Brazil (faric additional code : 8624~ - 1,7 % for products concerned manufactured by A~os Finos Piratini SA, Porto Alegre, Brazil (faric additional code : 8623). 4. Notwithstanding paragraph 2. the duty shall not apply for the products concerned manufactured by Asil Celik Sanayl Ve Ticaret AS, Istanbul, Turkey (faric addi- tional code: 8671). K-13 No l 182/26 Official journal of the European Communities 2. 7. 92 5. The provisions in force concerning customs duties shall apply. Article J 1. The amounts secured by way of provisional anti- dumping duty pursuant to Decision No 891/92/ECSC shall be collected at the rates of duty definitively imposed and any amount secured in excess of the anti-dumping duty definitively imposed shall be released. 2. With regard to the exports made by Asil Celik Sanayi Ve Ticaret AS the amounts secured by way of provisional anti-dumping duty shall be collected in full. 3. The amounts secured by way of provisional anti- dumping duty on imports of semi-finished products of alloy high-speed steel, falling within CN code ex 7224 90 1S shall be released. Article 4 This Decision shall enter into force on the day following its publication in the Official Journal of the European Communities. This Decision shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 30 June 1992. For the Commission Frans ANDRIESSEN Vice-President L-1 APPENDIX L MARKET PENETRATION OF IMPORTS ON A CUMUIATED BASIS L-3 Table L-1 Special quality carbon and alloy steel bars and rods: U.S. shipments of domestic product, U.S. imports of bars and rods (including hot-rolled lead and bismuth bars and rods subject to investigation), and apparent U.S. consumption, by products, 1989-91, January-March 1991, and January-March 1992 * * * * * * * Table L-2 Special quality steel semifinished products and bars and rods: U.S. shipments of domestic product, U.S. imports of semifinished products plus bars and rods (including hot-rolled lead and bismuth carbon steel bars and rods subject to investigation), and apparent U.S. consumption, by products, 1989-91, January-March 1991, and January-March 1992 * * * * * * *