Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil, Japan, and Russia
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Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil, Japan, and Russia Investigation Nos. 701-TA-384 and 731-TA-806-808 (Second Review) Publication 4237 June 2011 U.S. International Trade Commission Washington, DC 20436 U.S. International Trade Commission COMMISSIONERS Deanna Tanner Okun, Chairman Irving A. Williamson, Vice Chairman Charlotte R. Lane Daniel R. Pearson Shara L. Aranoff Dean A. Pinkert Robert B. Koopman Acting Director of Operations Staff assigned Nathanael Comly, Investigator Gerald Houck, Industry Analyst Craig Thomsen, Economist David Boyland, Accountant Marc Bernstein, Attorney Steven Hudgens, Statistician Douglas Corkran, Supervisory Investigator Address all communications to Secretary to the Commission United States International Trade Commission Washington, DC 20436 U.S. International Trade Commission Washington, DC 20436 www.usitc.gov Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil, Japan, and Russia Investigation Nos. 701-TA-384 and 731-TA-806-808 (Second Review) Publication 4237 June 2011 CONTENTS Page Determinations.................................................................. 1 Views of the Commission ......................................................... 3 Separate and dissenting views of Commissioners Charlotte R. Lane and Dean A. Pinkert ........ 47 Part I: Introduction and overview ................................................. I-1 Background .................................................................. I-1 The original investigations and subsequent five-year reviews ........................ I-2 Suspension agreements ...................................................... I-3 Summary data ............................................................. I-5 Previous and related Title VII investigations ........................................ I-10 Previous and related section 332 investigations ...................................... I-12 Previous and related safeguard investigations ....................................... I-14 Statutory criteria and organization of the report...................................... I-16 Statutory criteria ........................................................... I-16 Organization of the report.................................................... I-17 Commerce’s reviews........................................................... I-18 Administrative reviews ...................................................... I-18 Five-year reviews .......................................................... I-20 Distribution of Continued Dumping and Subsidy Offset Act funds ....................... I-21 The subject merchandise........................................................ I-23 Commerce’s scope.......................................................... I-23 Tariff treatment ............................................................ I-24 The product .................................................................. I-25 Description and applications .................................................. I-25 Manufacturing processes ..................................................... I-26 Domestic like product issues .................................................... I-29 U.S. market participants........................................................ I-30 U.S. producers............................................................. I-30 U.S. importers............................................................. I-33 U.S. purchasers ............................................................ I-37 Apparent U.S. consumption ..................................................... I-37 U.S. market shares ............................................................ I-39 Part II: Conditions of competition in the U.S. market ................................ II-1 Channels of distribution........................................................ II-1 Geographic distribution ........................................................ II-1 Supply and demand considerations ................................................ II-3 U.S. supply ............................................................... II-3 U.S. demand .............................................................. II-10 Substitutability issues .......................................................... II-17 Purchaser characteristics ..................................................... II-17 Knowledge of country sources ................................................ II-17 Factors affecting purchasing decisions .......................................... II-18 Comparison of domestic products, subject imports, and nonsubject imports ............. II-22 Elasticity estimates............................................................ II-25 U.S. supply elasticity ........................................................ II-26 U.S. demand elasticity....................................................... II-26 Substitution elasticity ....................................................... II-26 i CONTENTS Page Part III: Condition of the U.S. industry ............................................ III-1 Overview.................................................................... III-1 Background ............................................................... III-4 Changes experienced in the industry ............................................ III-4 Anticipated changes in operations.............................................. III-4 U.S. capacity, production, and capacity utilization ................................... III-4 Constraints on capacity...................................................... III-6 Alternative and downstream products ........................................... III-7 U.S. producers’ shipments ...................................................... III-9 U.S. producers’ inventories ..................................................... III-11 U.S. producers’ imports and purchases ............................................. III-12 U.S. producers’ employment, wages, and productivity ................................ III-13 Financial condition of the U.S. industry ............................................ III-14 Background ............................................................... III-14 Producers’ operations on hot-rolled steel ........................................ III-14 Research and development expenses, capital expenditures, assets, and return on investment III-19 Part IV: U.S. imports and the foreign industries ..................................... IV-1 U.S. imports ................................................................. IV-1 Overview................................................................. IV-1 Imports from subject and nonsubject countries .................................... IV-2 Leading nonsubject sources of imports .......................................... IV-3 U.S. importers’ imports subsequent to December 31, 2010 ............................. IV-5 U.S. importers' inventories...................................................... IV-6 Cumulation considerations...................................................... IV-8 Geographic markets......................................................... IV-9 Presence in the market ....................................................... IV-9 The industry in Brazil .......................................................... IV-9 Overview................................................................. IV-9 Hot-rolled steel operations.................................................... IV-10 Alternative and downstream products .......................................... IV-13 The industry in Japan .......................................................... IV-15 Overview................................................................. IV-15 Hot-rolled steel operations.................................................... IV-16 Alternative and downstream products .......................................... IV-20 The industry in Russia ......................................................... IV-22 Overview................................................................. IV-22 Hot-rolled steel operations.................................................... IV-23 Alternative and downstream products .......................................... IV-27 The global market............................................................. IV-28 Production and capacity ...................................................... IV-28 Consumption.............................................................. IV-29 Prices.................................................................... IV-31 ii CONTENTS Page Part V: Pricing and related information ............................................ V-1 Factors affecting prices......................................................... V-1 Raw material costs.......................................................... V-1 Energy costs............................................................... V-4 U.S. inland transportation costs................................................ V-4 Exchange rates............................................................. V-5 Pricing practices.............................................................. V-7 Pricing methods ............................................................ V-7 Sales terms and discounts .................................................... V-8 Price leadership............................................................ V-8 Regional price differences.................................................... V-8 Price data ..................................................................