UNITED STATES INTERNATIONAL TRADE COMMISSION In the Matter of: ) ) Investigation Nos.: STAINLESS STEEL BAR FROM ) 701-TA-413 and FRANCE, GERMANY, ITALY, ) 731-TA-913-916 and 918 ITALY, KOREA AND THE ) (Review) UNITED KINGDOM ) Pages: 1 through 320 Place: Washington, D.C. Date: November 6, 2007 HERITAGE REPORTING CORPORATION Official Reporters 1220 L Street, N.W., Suite 600 Washington, D.C. 20005 (202) 628-4888 1 THE UNITED STATES INTERNATIONAL TRADE COMMISSION In the Matter of: ) ) Investigation Nos.: STAINLESS STEEL BAR FROM ) 701-TA-413 and FRANCE, GERMANY, ITALY, ) 731-TA-913-916 and 918 ITALY, KOREA AND THE ) (Review) UNITED KINGDOM ) Tuesday, November 6, 2007 Room No. 101 U.S. International Trade Commission 500 E Street, S.W. Washington, D.C. The hearing commenced, pursuant to notice, at 9:30 a.m., before the Commissioners of the United States International Trade Commission, the Honorable DANIEL R. PEARSON, Chairman, presiding. APPEARANCES: On behalf of the International Trade Commission: Commissioners: DANIEL R. PEARSON, CHAIRMAN SHARA L. ARANOFF, VICE CHAIRMAN DEANNA TANNER OKUN, COMMISSIONER CHARLOTTE R. LANE, COMMISSIONER IRVING A. WILLIAMSON, COMMISSIONER DEAN A. PINKERT, COMMISSIONER Staff: MARILYN R. ABBOTT, SECRETARY TO THE COMMISSION WILLIAM R. BISHOP, HEARINGS AND MEETINGS COORDINATOR SHARON D. BELLAMY, HEARINGS AND MEETINGS COORDINATOR JEANNA LO, INVESTIGATOR Heritage Reporting Corporation (202) 628-4888 2 APPEARANCES: (Cont'd.) Staff: ALAN TREAT, INDUSTRY ANALYST CATHERINE DEFILIPPO, ECONOMIST MARY KLIR, ACCOUNTANT/AUDITOR MICHAEL HALDENSTEIN, ATTORNEY DOUGLAS CORKRAN, SUPERVISORY INVESTIGATOR Foreign Government Appearance: SIBYLLE ZITKO, Legal Advisor, Delegation of the European Commission to the United States Organization and Witness: On behalf of The Domestic Industry: MIKE MCGARRY, Vice President, Bar Business Group, Carpenter Technology Corporation JAMES RAUCH, National Sales Manager, Stainless Crucible Specialty Metals JIM GUGINO, Products Manager, Dunkirk Specialty Steel JACK SIMMONS, Manager, Marketing and Product Development, Electralloy MISSY BILZ, Marketing and Distribution Manager, North American Stainless MICHAEL EBERTH, Commercial Manager, Outokumpu Stainless, Inc. TOM CARLSON, Plant Manager, Valbruna Slater Stainless, Inc. VALTER VIERO, Secretary, Valbruna Slater Stainless, Inc. EDWARD J. BLOT, President, Ed Blot and Associates MICHAEL T. KERWIN, Economist, Georgetown Economic Services, LLC BRAD HUDGENS, Economist, Georgetown Economic Services, LLC DAVID HARTQUIST, Of Counsel LAURENCE J. LASOFF, Of Counsel MARY T. STALEY, Of Counsel GRACE W. KIM, Of Counsel Heritage Reporting Corporation (202) 628-4888 3 On behalf of Ugitech S.A., Ugitech USA, Inc.: DANIELE CEREDA, Automotive Product Manager, Ugitech DANIEL O'DONNELL, Board Member, Ugitech USA, Inc. ROBERT CRANDALL, Ph.D., Senior Fellow, The Brookings Institution LISA RAISNER, Government Affairs Specialist, Shearman & Sterling LLP ROBERT S. LARUSSA, Of Counsel RYAN A.T. TRAPANI, Of Counsel On behalf of Bessey Prazisionsstahl GmbH BGH Edelstahlwerke GmbH, Deutsche Edelstahlwerke GmbH, Schmiedewerke Groditz GmgH, Walzwerke Einsal GmbH: ULLA A. PLENKERS, Senior Vice President, Mill Direct Services, Schmolz-Bickenbach USA, Inc. TODD L. SEWELL, President, Specialty Steel Supply DAN BENDITZ, CEO, Continental Alloys & Services BRUCE MALASHEVICH, President & CEO, Economic Consulting Services, LLC MARC E. MONTALBINE, Of Counsel On behalf of Sandvik Bioline: ALEXANDER W. SIERCK, Of Counsel STACIE B. LIEBERMAN, Of Counsel On behalf of Corus Engineering Steels: BRUCE MALASHEVICH, President & CEO, Economic Consulting Services, LLC MARK D. DAVIS, Of Counsel Heritage Reporting Corporation (202) 628-4888 4 I N D E X PAGE TESTIMONY OF SIBYLLE ZITKO, LEGAL ADVISOR, 7 DELEGATION OF THE EUROPEAN COMMISSION TO THE UNITED STATES TESTIMONY OF DAVID A. HARTQUIST, KELLEY DRYE 11 COLLIER SHANNON TESTIMONY OF MARC E. MONTALBINE, DEKIEFFER 15 & HORGAN TESTIMONY OF JAMES RAUCH, NATIONAL SALES MANAGER, 20 STAINLESS, CRUCIBLE SPECIALTY METALS TESTIMONY OF MIKE MCGARRY, VICE PRESIDENT, BAR 24 BUSINESS GROUP, CARPENTER TECHNOLOGY CORPORATION TESTIMONY OF JACK SIMMONS, MANAGER, MARKETING 29 AND PRODUCT DEVELOPMENT, ELECTRALLOY TESTIMONY OF TOM CARLSON, PLANT MANAGER, VALBRUNA 32 SLATER STAINLESS, INC. TESTIMONY OF JIM GUGINO, PRODUCTS MANAGER, 35 DUNKIRK SPECIALTY STEEL TESTIMONY OF MISSY BILZ, MARKETING AND DISTRIBUTION 38 MANAGER, NORTH AMERICAN STAINLESS TESTIMONY OF MICHAEL EBERTH, COMMERCIAL MANAGER 40 OUTOKUMPU STAINLESS, INC. TESTIMONY OF EDWARD BLOT, PRESIDENT, ED BLOT 42 AND ASSOCIATES TESTIMONY OF MICHAEL T. KERWIN, ECONOMIST, 51 GEORGETOWN ECONOMIC SERVICES, LLC TESTIMONY OF LARRY LASOFF, KELLEY DRYE 118 COLLIER SHANNON Heritage Reporting Corporation (202) 628-4888 5 I N D E X PAGE TESTIMONY OF ROBERT S. LARUSSA, OF COUNSEL, 182 UGITECH USA, INC. TESTIMONY OF ROBERT CRANDALL, Ph.D., 190 SENIOR FELLOW, THE BROOKINGS INSTITUTION TESTIMONY OF BRUCE MALASHEVICH, PRESIDENT & CEO, 199 ECONOMIC CONSULTING SERVICES, LLC TESTIMONY OF DANIELE CEREDA, PRODUCT MANAGER, 205 UGITECH TESTIMONY OF DANIEL O'DONNELL, BOARD MEMBER, 208 UGITECH USA, INC. TESTIMONY OF MARK D. DAVIS, OF COUNSEL 211 CORUS ENGINEERING STEELS TESTIMONY OF ALEXANDER W. SIERCK, OF COUNSEL 214 SANDVIK BIOLINE TESTIMONY OF ULLA A. PLENKERS, SENIOR 219 VICE PRESIDENT, MILL DIRECT SERVICES, SCHMOLZ-BICKENBACH USA, INC. TESTIMONY OF TODD L. SEWELL, PRESIDENT, 222 SPECIALTY STEEL SUPPLY TESTIMONY OF DAN BENDITZ, CEO, 223 CONTINENTAL ALLOYS & SERVICES CLOSING STATEMENT OF DAVID A. HARTQUIST, 304 KELLEY DRYE COLLIER SHANNON CLOSING STATEMENT OF ROBERT S. LARUSSA, OF COUNSEL 310 UGITECH USA, INC. Heritage Reporting Corporation (202) 628-4888 6 1 P R O C E E D I N G S 2 (9:30 a.m.) 3 CHAIRMAN PEARSON: Good morning. On behalf 4 of the U.S. International Trade Commission, I welcome 5 you to this hearing on Investigation Nos. 701-TA-413 6 and 731-TA-913-916 and 918 (Review), involving 7 Stainless Steel Bar from France, Germany, Italy, Korea 8 and the United Kingdom. 9 The purpose of these five year review 10 investigations is to determine whether revocation of 11 the countervailing duty order on stainless steel bar 12 from Italy and the antidumping duty orders on 13 stainless steel bar from France, Germany, Italy, Korea 14 and the United Kingdom would be likely to lead to 15 continuation or recurrence of material injury to an 16 industry in the United States within a reasonably 17 foreseeable time. 18 The witness list, notice of investigation 19 and transcript order forms are available at the public 20 distribution table. All prepared testimony should be 21 given to the Secretary. Please do not place testimony 22 directly on the public distribution table. All 23 witnesses must be sworn in by the Secretary before 24 presenting testimony. 25 I understand that parties are aware of the Heritage Reporting Corporation (202) 628-4888 7 1 time allocations. Any questions regarding time 2 allocations should be directed to the Secretary. 3 Finally, if you will be submitting documents that 4 contain information you wish classified as business 5 confidential, that request should comply with 6 Commission Rule 201.6. 7 Madam Secretary, are there any preliminary 8 matters? 9 MS. ABBOTT: No, Mr. Chairman. 10 CHAIRMAN PEARSON: Very well. Let us 11 proceed with opening statements. 12 MS. ABBOTT: Our first speaker is Ms. 13 Sibylle Zitko, Legal Advisor, Delegation of the 14 European Commission to the United States. 15 CHAIRMAN PEARSON: Welcome to the 16 Commission, Ms. Zitko. Please proceed. 17 MS. ZITKO: Good morning, my name is Sibylle 18 Zitko, I am a Legal Advisor at the Delegation of the 19 European Commission to the United States. The 20 European Commission would like to thank the 21 International Trade Commission for the opportunity to 22 appear at this hearing. 23 We would like to briefly outline today the 24 main reasons why we believe that the antidumping order 25 on stainless steel bar from France, Germany, Italy and Heritage Reporting Corporation (202) 628-4888 8 1 the U.K. should be revoked. The EC will limit its 2 remarks today to data which is in the public domain 3 and to more general arguments. 4 We are prepared to support these arguments 5 with additional confidential data and figures in the 6 posthearing brief if need be. The EC's intervention 7 is also without prejudice to other arguments which may 8 be advanced by interested parties in favor of the 9 removal of the order. 10 The EC is limiting its intervention to the 11 four EU subject countries and is without prejudice to 12 the additional analysis and decision with regard to 13 subject merchandise from Korea. As elaborated in more 14 detail in its prehearing brief, the EC believes that 15 there are a number of objective factors clearly 16 showing that there's no likelihood of continuation or 17 recurrence of any injury caused to the U.S. domestic 18 industry by imports of subject merchandise from 19 Germany, France, Italy and the U.K. 20 The main such factor is the fact that the 21 overwhelming majority of EC exporters of stainless 22 steel bar representing a share of close to 75 percent 23 of imports from the countries concerned are no longer 24 subject to the antidumping order mainly as the result 25 of the revocation of the order by the U.S. Department Heritage Reporting Corporation (202) 628-4888 9 1 of Commerce in its Section 129 implementation of the 2 WTO ruling on zeroing. 3 In terms of global imports, this figure 4 translates into imports representing