Silicon Metal from Russia Investigation No. 731-TA-991 (Third Review) Publication 5058 May2020 U.S. International Trade Commission Washington, DC 20436 U.S. International Trade Commission COMMISSIONERS David S. Johanson, Chairman Rhonda K. Schmidtlein Jason E. Kearns Randolph J. Stayin Amy A. Karpel Catherine DeFilippo Director, Office of Operations Staffass igned Nitin Joshi, Investigator David Gubberman, Industry Analyst PamelaDavis, Economist David Boy land, Accountant Ann-Marie Carton, Statistician Jason Miller, Attorney 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 Silicon Metal from Russia Investigation No. 731-TA-991 (Third Review) Publication 5058 May2020 CONTENTS Page Determination ....................................................................................................................... 1 Views of the Commission ....................................................................................................... 3 Part I: Introduction .............................................................................................................. I-1 Background ................................................................................................................................ I-1 The original investigation ...................................................................................................... I-2 Commission Remand Proceedings ........................................................................................ I-3 The first five-year review ....................................................................................................... I-4 The second five-year review .................................................................................................. I-4 Previous and related investigations .......................................................................................... I-5 Summary data ........................................................................................................................... I-6 Statutory criteria ..................................................................................................................... I-10 Organization of report ............................................................................................................. I-12 Commerce’s reviews ............................................................................................................... I-12 Administrative reviews ........................................................................................................ I-12 Five-year reviews ................................................................................................................. I-12 The subject merchandise ........................................................................................................ I-14 Commerce’s scope .............................................................................................................. I-14 Tariff treatment ................................................................................................................... I-14 The product ............................................................................................................................. I-15 Description and applications ............................................................................................... I-15 Manufacturing processes .................................................................................................... I-18 Domestic like product issues ................................................................................................... I-22 U.S. market participants .......................................................................................................... I-23 U.S. producers ..................................................................................................................... I-23 U.S. importers ...................................................................................................................... I-26 U.S. purchasers .................................................................................................................... I-27 Apparent U.S. consumption .................................................................................................... I-28 i CONTENTS Page Part II: Conditions of competition in the U.S. market........................................................... II-1 U.S. market characteristics ....................................................................................................... II-1 Channels of distribution ........................................................................................................... II-1 Geographic distribution ........................................................................................................... II-3 Supply and demand considerations ......................................................................................... II-4 U.S. supply ............................................................................................................................ II-4 U.S. demand ......................................................................................................................... II-6 Impact of 232 tariffs ............................................................................................................... II-10 Substitutability issues ............................................................................................................. II-10 Lead times .......................................................................................................................... II-10 Knowledge of country sources ........................................................................................... II-11 Factors affecting purchasing decisions............................................................................... II-12 Comparisons of domestic products, subject imports, and imports from other countries II-15 Comparison of U.S.-produced and imported silicon metal ................................................ II-16 Elasticity estimates ................................................................................................................. II-18 U.S. supply elasticity ........................................................................................................... II-19 U.S. demand elasticity ........................................................................................................ II-19 Substitution elasticity ......................................................................................................... II-19 Part III: Condition of the U.S. industry ................................................................................ III-1 Overview.................................................................................................................................. III-1 Changes experienced by the industry ................................................................................. III-5 Anticipated changes in operations ...................................................................................... III-7 U.S. production, capacity, and capacity utilization ................................................................. III-7 Constraints on capacity ..................................................................................................... III-11 U.S. producers’ U.S. shipments and exports ......................................................................... III-11 ii CONTENTS Page Part III: Condition of the U.S. industry ...................................................................... Continued U.S. producers’ inventories ................................................................................................... III-14 U.S. producers’ imports and purchases ................................................................................ III-15 U.S. employment, wages, and productivity .......................................................................... III-17 Financial experience of U.S. producers ................................................................................. III-18 Background ........................................................................................................................ III-18 Operations on silicon metal............................................................................................... III-18 Capital expenditures and research and development expenses ...................................... III-37 Assets and return on assets ............................................................................................... III-38 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-1 U.S. importers’ imports subsequent to September 30, 2019 ................................................. IV-6