UNITED STATES INTERNATIONAL TRADE COMMISSION WW-CARBON FERROCHROMIUM Report to the President on Investigation No. TA-201-20 Under Section 201 of the Trade Act of 1974 USITC Publication 825 Washington, D. C. July 1977 UNITED STATES INTERNATIONAL TRADE COMMISSION COMMISSIONERS Daniel Minchew, Chairman Joseph O. Parker, Vice Chairman George M. Moore Catherine Bedell Italo H. Ablondi Kenneth R. Mason, Secretary to the Commission This report was principally prepared by Nicholas C. Talerico, Minerals and Metals Division James S. Kennedy, Minerals and Metals Division assisted by Marvin C. Claywell, Operations Division N. Timothy Yaworski, Office of the General Counsel Charles W. Ervin, Supervisory Investigator Address all communications to United States International Trade Commission Washington, D .. c. 20436 FOR RELEASE AT WILL CONTACT: Kenneth R. Mason July 11,.1977 (202) 523-0161 USITC 77-052 LOW-CARBON FERROCHROMIUM IMPORTS NOT CAUSING SERIOUS !~JURY The United States International Trade Commission today reported to the President pursuant to the provisions of section 201 of the Trade Act of 1974 that imports of low-carbon ferro- chromium are not causing serious injury or the threat there- of to the relevant U.S. industry. Commissioners Daniel Minchew, Catherine Bedell, and Italo H. Ablondi formed the majority with their negative findings. Commissioner George M. Moore found in the affirmative that increased imports of low-carbon ferrochromium were a sub- stantial cause of the threat of serious iTijury to the domestic industry. Commissioner Joseph 0. Parker did not participate in the decision. There are three U.S. producers of low-carbon ferrochromi~m: Satralloy, Inc.; Globe Metallurgical Division, Interlake, Inc.; and Union Carbide Corp. These firms' shipment_s of low-carbon ferrochromium were valued at about $41 million in 1976. ( more ) LOW-CARBON FERROCHROMIUM IMPORTS NOT CAUSING SERIOUS INJURY 2 U.S. imports of low-carbon ferrochromium, most of which come from the Republic of South Africa, Rhodesia, and Japan, amounted to 42,961 shbrt tons~ chromium content, having a foreign value of about $55 million in 1976. Copies of the Commission's report, Low-Carbon Ferrochromium (USITC_Publication 825), containing the views of the Commissioners and information developed during the course of the investigation (No. TA-201-20), may be obtained from the Office of the Secretary, United States International Trade Commission, 701 E Street NW., Washington, D.C. 20436. 0 0 0 C 0 N T E N T S Report to the President-------------------~-------------------- 1 Determination of the Commission--------------------~----------- 2 Views of Chairman Daniel Minchew, Commissioners Catherine Bedell, and Italo H. Ablondi---------------------------------- 4 Views of ComTrrissioner George H. Moore-------------------------- 8 Informatjon obtained in the investigation: Introduction----------------------------------------------- A-1 Description and uses--------------------------------~-----­ A-2 Low-carbon ferrochromium------------------------------­ A-2 High-carbon ferrochromium-----------------------------­ A-3 Ferros i l icon chromium---------------------------------­ A-3 Substitutability of the chromium-containing ferroalloys-----------------------------------------­ A-5 U. S. tariff treatment-------------------------------------- A-6 Status of General Services Administration programs----­ A-6 History of the Rhodesian chrome embargo-------------------­ A-6 The question of increased imports-------------------------- A-8 U. S. imports------------------------------------------- A-8 Factors affecting U.S. imports------------------------­ A-8 Ratios of U.S. imports to production and consumption--- A-12 The question of serious injury to the domestic industry---- A-15 U. S. producers----------------------------------------­ A-15 Capacity----------------------------------------------- A-16 Furnace convertibility--------------------------------­ A-17 Domestic production-----------------------------------­ A-17 U. S. producers' shipments-----------------------------­ A-18 Inventories: Producers' inventories----------------------------- A-21 Consumers' inventories-----------~----------------- A-21 Importers' inventories----------------------------- A-25 U.S. exports------------------------------------------- A-25 Employment--------------------------------------------- A-25 Man-hours------------------------------------------ A-27 Productivity--------------------------------------- A-27 Employee earnings---------------------------------- A-27 Price relationship between domestic and imported low- carbon ferrochromium--------------------------------- A-29 Price trends--------------------------------------- A-33 Profit-and-loss experience of U.S. producers----------- A-35 Overall operations of the establishments----------- A-35 Operations on low-carbon ferrochromium------------- A-37 Operations on other products produced within the same establishments-------------------------- A-37 Comparison of net operating profit margins for low-carbon ferrochromium with those for other product lines or industries---------------------- A-38 CONTENTS Investment in productive facilities-------------------- A-39 The question of imports as a substantial cause of serious injury------------------------------------------- A-39 U.S. consumption--------------------------------------- A-41 Causes of injury-------------------·-------------------- A-43 Lost sales--------------------------------------------- A-46 Foreign industry--------------------------------------- A-47 The Japanese industry------------------------------ A-47 The South African industry------------------------- A-47 The Rhodesian industry----------------------------- A-47 Effect of technological change on U.S. and world low-carbon ferrochromium consumption------------- A-48 Appendix A. Public Law 95-12 and related information---------- A-50 Appendix B. Statistical tables-------------------------------- A-68 Appendix C. Study by Union Carbide Corp----------------------- A-83 Appendix D. Responses of imports to changes in the prices of imported low-carbon ferrochromium and domestic low-carbon ferrochromium and to changes in U.S. economic indicators----- A-99 Appendix E. Figures------------------------------------------- A-102 Figures 1. Low-carbon ferrochromium: U.S. imports with trend lines, 1968-76 and 1971-76------------------------------------ A-10 2. Low-carbon ferrochromium: Ratio of imports to production, 1968-76------------------------------------------------ A-13 3. Low-carbon ferrochromium: Ratio of imports to consump- tion, 1968-76------------------------------------------ A-14 4. Low-carbon ferrochromium: U.S. imports arid production, 1972-76------------------------------------------------ A-19 5. Low-carbon ferrochromium: U.S. imports and producers' shipments, 1972-76------------------------------------- A-20 6. Low-carbon ferrochromium: U.S. importers', producers', and consumers' inventories by quarters, 1972-76------- A-23 7. Low-carbon ferrochromium: U.S. imports and producers' inventories 1972-76----------------------------------- A-24 8. Low-carbon ferrochromium: Average number of production and related workers employed in producing low-carbon ferrochromium, by quarters, 1972-76------------------- A-26 9. Low-carbon ferrochromium: Man-hours worked by production and related workers producing low-carbon ferrochromium, by quarters, 1972-76----------------------------------- A-28 10'. Low-carbon ferrochromium: U.S. 'producers' and importers' lowest net prices (68%-73% chromium, .05% carbon), by quarters, 1970-76------------------------------------- A-31 CONTENTS 11. Low-carbon ferrochromium: U.S. producers' and import~rs' lowest net prices (no chromium specification,· .025 percent carbon), by quarters, 1970-76------------------ A-32 12. Wholesale price indexes for low-carbon ferrochromium and other selected commodities, 1970-76-------------------- A-34 13. Chromium ferroalloys: U.S. consumption, total, and by types, 1972-76----------------------------------------- A-42 14. Low-carbon ferrochromium: U.S. consumption and imports, 1972-76------------------------------------------------ A-44 15. Chromium ferroalloys: U.S. production, total, and by types, 1972-76------------------------------------~---- A-103. 16. Chromium ferroalloys: U.S. producers' shipments, total, and by types, 1972-76---------------------------------- A-104 TABLES 1. Ferrochromium: U.S. imports of high-carbon ferrochromium and ferrochromium silicon, 1968-76--------------------- A-69 2. Low-carbon ferrochromium: Average unit value of U.S. imports, by sources, 1968-76--------------------------- A-70 3. Chromium ferroalloys: U.S. production, total, and by types, 1972-76-----------------~----------------------- A-71 4. Chromium ferroalloys: U.S. producers' shipments, by types, 1972-76----------------------------------------- A-72 5. Chromium ferroalloys: Producers's, consumers', and importers' inventories, by types and by quarters, Jan. 1, 1972-Jan. 1, 1977----------------------------- A-73 6. Ferrochromium: U.S. exports, 1972-75, January-October 1975, and January-October 1976----------------------~- A-74 7. Average number of persons and the average number of production and related workers employed in producing low-carbon and high carbon ferrochromium and ferrosili- con chromium, by quarters, 1972-76--~------------------ A-75 8. Chromium ferroalloys: Man-hours worked by production and related workers producing all products, low-carbon and high-carbon