Certain Uncoated Paper from Australia, Brazil, China, Indonesia, and Portugal Investigation Nos. 701-TA-528-529 and 731-TA-1264-1268 (Final) Publication 4592 February 2016 U.S. International Trade Commission Washington, DC 20436 U.S. International Trade Commission COMMISSIONERS Meredith M. Broadbent, Chairman Dean A. Pinkert, Vice Chairman Irving A. Williamson David S. Johanson F. Scott Kieff Rhonda K. Schmidtlein Catherine DeFilippo Director of Operations Staff assigned Nathanael Comly, Investigator Vincent Honnold, Industry Analyst Amelia Preece, Economist Charles Yost, Accountant Maureen Letostak, Statistician Carolyn Holmes, Statistical Assistant David Goldfine, Attorney Douglas Corkran, Supervisory Investigator James McClure, Supervisory Investigator Special assistance from Jonathan Hsu 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 Certain Uncoated Paper from Australia, Brazil, China, Indonesia, and Portugal Investigation Nos. 701-TA-528-529 and 731-TA-1264-1268 (Final) Publication 4592 February 2016 CONTENTS Page Determinations ............................................................................................................................... 1 Views of the Commission ............................................................................................................... 3 Part I: Introduction .............................................................................................................. I-1 Background ................................................................................................................................ I-1 Statutory criteria and organization of the report ..................................................................... I-2 Statutory criteria ................................................................................................................... I-2 Organization of report ........................................................................................................... I-4 Market summary ....................................................................................................................... I-4 Summary data and data sources ............................................................................................... I-5 Previous and related investigations .......................................................................................... I-5 Nature and extent of subsidies and sales at LTFV .................................................................... I-6 Subsidies ................................................................................................................................ I-6 Sales at LTFV .......................................................................................................................... I-7 The subject merchandise .......................................................................................................... I-8 Commerce’s scope ................................................................................................................ I-8 Tariff treatment ..................................................................................................................... I-9 The product ............................................................................................................................... I-9 Description ............................................................................................................................ I-9 Applications ......................................................................................................................... I-11 Manufacturing processes .................................................................................................... I-11 Domestic like product issues ................................................................................................... I-14 Part II: Conditions of competition in the U.S. market........................................................... II-1 U.S. market characteristics....................................................................................................... II-1 U.S. purchasers ......................................................................................................................... II-1 Channels of distribution ........................................................................................................... II-1 Geographic distribution ........................................................................................................... II-2 Supply and demand considerations ......................................................................................... II-2 U.S. supply ............................................................................................................................ II-2 U.S. demand ......................................................................................................................... II-9 i CONTENTS Page Part II: Conditions of competition in the U.S. market--Continued Substitutability issues ............................................................................................................. II-12 Lead times .......................................................................................................................... II-13 Knowledge of country sources ........................................................................................... II-13 Factors affecting purchasing decisions............................................................................... II-14 Comparisons of domestic products, subject imports, and nonsubject imports ................ II-19 Comparison of U.S.-produced and imported uncoated paper .......................................... II-26 Elasticity estimates ................................................................................................................. II-30 U.S. supply elasticity ........................................................................................................... II-30 U.S. demand elasticity ........................................................................................................ II-30 Substitution elasticity ......................................................................................................... II-30 Part III: U.S. producers’ production, shipments, and employment ...................................... III-1 U.S. producers ......................................................................................................................... III-1 Changes in operations ......................................................................................................... III-3 U.S. production, capacity, and capacity utilization ................................................................. III-5 Overall paper making .......................................................................................................... III-5 Uncoated paper ................................................................................................................... III-6 U.S. producers’ U.S. shipments and exports ........................................................................... III-8 U.S. commercial shipments by type of branding ................................................................ III-9 U.S. commercial shipments by product type ...................................................................... III-9 U.S. producers’ inventories ................................................................................................... III-10 U.S. producers’ imports and purchases ................................................................................ III-10 U.S. employment, wages, and productivity .......................................................................... III-11 ii CONTENTS Page Part IV: U.S. imports, apparent U.S. consumption, and market shares ................................ IV-1 U.S. importers.......................................................................................................................... IV-1 Overview .............................................................................................................................. IV-3 U.S. imports ............................................................................................................................. IV-4 U.S. importers’ commercial U.S. shipments by type of branding ....................................... IV-5 U.S. importers’ commercial U.S. shipments by product type ............................................. IV-6 Critical circumstances .............................................................................................................. IV-7 Negligibility ............................................................................................................................ IV-10 Cumulation considerations ................................................................................................... IV-10 Fungibility .......................................................................................................................... IV-12 Presence in the market ..................................................................................................... IV-13 Geographical markets ....................................................................................................... IV-15