Certain Special Quality Hot-Rolled and SemiFinished Carbon and Alloy Steel Products from Brazil

306 Pages·2014·9.97 MB·English

CERTAIN SPECIAL QUALITY HOT-ROLLED
AND SEMIFINISHED CARBON AND ALLOY
STEEL PRODUCTS FROM BRAZIL
Determination of the Commission in
Investigation No. 731-TA-572
(Preliminary) Under the Tariff Act
of 1930, Together With
the Information Obtained
in the Investigation
.....
, __, ·; .. ·. . ·.:
USITC PUBLICATION 2537
JULY 1992
.. ~-~ :: . . .: - .~.-..' ;-·;\"-. _.,_. .. .. ·. .· ·
ates International Trade Commission
on, DC 20436
UNITED STATES INTERNATIONAL TRADE COMMISSION
COMMISSIONERS
Don E. Newquist, Chairman
Peter S. Watson, Vice Chairman
David B. Rohr
Anne E. Brunsdale
Carol T. Crawford
Janet A. Nuzum
Robert Rogowsky
DirccLor of Operations
------------
Staff assigned:
Diane J. Mazur, Investigator
SLephanie Kaplan, Commodity-Industry Analysl
Clark Workman, Economisl
Chand Mehta, Accountant/Auditor
Scou Andersen, Auomcy
Robert Carpenter, Supervisory Investigator
Address all communications to
Secretary to the Commission
United States International Trade Commission
\Vashington, DC 20436
CONTENTS
Determination ............................................................ . 1
Views of Chairman Newquist, Vice-Chairman Watson, and
Commissioner Nuzum ..................................................... . 3
Separate Views of Commissioner David B. Rohr ............................ . 37
Dissenting Views of Commissioners Brunsdale and Crawford ................ . 55
Information obtained in the investigation ............................... . I-1
Introduction .......................................................... . I-3
Previous and related investigations ................................... . I-4
General steel products investigations ............................... . I-4
Investigations of special quality carbon steel products ............. . I-4
The product .................................................. ; ........ . I-4
Description ..........................................· . .............. . 1-4
Free-machining steels ............................•................. 1-7
Manufacturing process ................................................ . I-8
Melt stage ........................................................ . 1-8
Casting stage ..................................................... . I-10
Hot-rolling stage ......................................· ........... . I-12
Semifinished vs. hot-rolled steel. .............................. . I-13
Cut-lengths vs. coiled ............................................ . I-13
Bars vs. rods .................................................... . I-14.
Uses ..................................................... ·.·.··.· .. ··· I-15
Questionnaire responses ......... , ................................. . I-16
Imported and domestic product comparison .......................... . I-16
Substitute products .................................· ................ . I-18
U.S. tariff treatment ................. ·. .............................. . I-19
Voluntary restraint agreements ...................................... . I-20
Bilateral consensus agreements/multilateral consensus agreement ..... . I-21
Like product considerations ......................................... ·. . I-22
The nature and extent of alleged sales at less than fair value ........ . I-22
The U.S. market .................... , .................................. . I-23
U.S. producers ...............; ....................................... . I-23
Company profiles .................................................. . I-23
Other special quality steel producers ............................. . I-28
Product lines ..., .................................................... . I-28
Minimills .....................· ................. ·. ................... . I-29
U.S. importers ...................................................... . 1-30
U.S. producers' imports ........................•................... I-30
Apparent U.S. consumption ........................................... . I-31
Market trends ...................................................... . 1-31
Trends in apparent consumption .................................... . I-32
U.S. producers' share of apparent consumption ..................... . I-32
Channels of distribution ............................................ . I-32
ii
CONTENTS
Information obtained in the investigations--Continued
Consideration of alleged material injury to an industry
in the United States ......... : ... : ................................ . I-41
U.S. production, capacity, and capacity utilization ................. . I-42
U.S. producers' U.S. shipments ....................................... . I-42
U.S. producers' exports ............... , ............................. . I-42
U.S. producers' inventories ........................................ . I-54
U.S. producers' employment and wages ............................... . I-56
Financial experience of U.S. producers ............................. . I-61
Subject special quality steel products ........................... . I-61
Semi finished .................................................... . I-61
Cut bars and rods ...................................... ·. ........ . I-63
Semifinished and cut bars and rods combined .................... . I-69
Free-machining steel products .................................... . I-69
Semif inished ................................................... . I-69
Bars and rods ........................ ·. ......................... . I-70
All special quality steel products ............................... . I-70
s'eniifinished ................................................... . I-70
B'ars and rods .................................................. . I-77
Investment in productive facilities .............................. . I-77
Capital expenditures ............................................. . I-77
Research ·and development expenses ...............· ................. . I-77
Impact of imports on capital and investment ...................... . I-88
Consideration of the q11estion of threat: of material injury ........... . I-89
Ability of foreign producers to generate exports and the
availability of export markets other than the United States .... . I-90
Respondents' data ................................................ . I-,91
Additional information regarding the Brazilian industry .......... . I-91 ·
Respondents represented by counsel. ............................ . I-91
Other Brazilian manufacturers/exporters ........................ . I-96
EC dumping duty· order ............................................ . I-97
U.S. importers' inventories ........................................ . I-97
Consideration of the causal relationship be.tween imports of the
subject products and alleged material injury ..................... . 1-98
Imports ............................................................. . 1-98
Market· penetration of imports ...................................... . I-99
Prices: ............ ., ............................................... . I-114
Market characteristics ........................................... . I-114
Questionnaire price data ......................................... . I-115
Price trends ..................................................... . I-116
Price comparisons ................................................ . I-116
Exchange rates ..................................................... . I-118
Lost sales and lost revenues ....................................... . 1-118
iii
CONTENTS
Appendices
A. The Commission's and Commerce's Federal Register notices............ A-1
B. List of witnesses appearing at conference........................... B-1
C. Glossary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
D. Comments on differences and similarities in physical/metallurgical
characteristics and uses of semifinished and hot-rolled products.. D-1
E. Comments on differences and similarities in manufacturing processes
of semifinished and hot-rolled products........................... E-1
F. Tariff headnotes and nomenclature................................... F-1
G. Available information on alternative "like product" industries...... G-1
H. Summary data on operations of traditional and minimill producers.... H-1
J. Effects of imports on producers' existing development and
production efforts, growth, investment, and ability raise
~o
capital ........................................................... J-1
K. EC preliminary dumping decision ................... ·•................. K-1
L. Market shares of imports on a cumulated basis....................... L-1
Figures
1. Simplified steelmaking flowchart ........................... _. ..... . I-9
2. Steel products and processes ..................................... . I-11
G-1. Like-product scenarios: Certain steel products .................. . G-2
Tables
1. Special quality carbon and alloy steel products: Previous
and related investigations since 1921.......... ... .............. .. . I-5
2. Special quality carbon and alloy steel products: Shares of
shipments of U.S.-produced product, by end uses, 1991 ............. I-17
3. Special quality carbon and alloy steel products: U.S. producers,
location of producing facility, position on petition, and share of
production in 1991................................................ I-24
4. Carbon and alloy steel products: U.S. producers' production
capabilities, by types, 1991. ..................................... I-28
SA. Subject special-quality steel products: U.S. shipments of domestic
product, U.S. imports, and apparent U.S. consumption, by products,
1989-91, January-March 1991, and January-March 1992 ............... I-33
SB. Free-machining steel products: U.S. shipments of domestic
product, U.S. imports, and apparent U.S. consumption, by products,
1989-91, January-March 1991, and January-March 1992 ............... I-35
SC. All special-quality ste~l products: U.S. shipments of domestic
product, U.S. imports, and apparent U.S. consumption, by produ~ts,
1989-91, January-March 1991, and January-March 1992 ............... I-37
iv
CONTENTS
Tables--Continued
6. Special quality carbon and alloy steel products: Shares of
shipments of product (in percent), by channels of distribution,
1991.............................................................. I-39
7. Special quality carbon and alloy steel products:
U.S. capacity, production, and capacity utilization, by products,
1989-91, January-March 1991, and January-March 1992 ............... I-43
BA. Subject special quality carbon and allow steel products:
Shipments by U.S. producers, by products and by types,
1989-91, January-March 1991, and January-March 1992............... I-45
SB. Free-machining carbon and allow steel products:
Shipments by U.S. producers, by products and by types,
1989-91, January-March 1991, and January-March 1992 ...... : ........ I-48
SC. All special quality carbon and allow steel products:
Shipments by U.S. producers, by products and by types,
1989-91, January-March 1991, and January-March 1992 ............... I-51
9. Special quality carbon and alloy steel products: U.S.
producers' U.S. shipments (domestic shipments and company
transfers), by types, 1989-91, January-March 1991, and
January-March 1992 ..... ;........................................... I-54
10. Special quality carbon and alloy steel products: End-of
period inventories of U.S. producers, by products, 1989-91,
January-March 1991, and January-March 1992 ....................... I-55
11. Average number of U.S. production and related workers producing
special-quality steel products, hours worked, wages and total
compensation paid to such employees, and hourly wages,
productivity, and unit production costs, by products,
1989-91, January-March 1991, and January-March 1992 ............... I-57
12. Income-and-loss experience of U.S. producers on their operations
producing subject special-quality carbon steel semifinished
products, fiscal years 1989-91, January-March 1991, arid
January-March 1992 ........................ ~ .................... ;.. I-62
13. Income-and-loss experience of U.S. producers on their operations
producing subject special-quality alloy steel semifinished
products, fiscal years 1989-91, January-March 1991, and
January-March 1992 ....................................... ;........ I-64
14. Income-and-loss experience of U. s-. producers on their operations
producing subject special-quality carbon and alloy steel
semifinished products, fiscal years 1989-91, January-March 1991,
and January-March 1992............................................ I-65
15. Income-and-loss experience of U.S. producers on their operations
producing subject special-quality carbon steel cut bars and rods
fiscal years 1989-91, January-March 1991, and
January-March 1992................................................ I-66
16. Income-and-loss experience of U.S. producers on their operations
producing subject special-quality alloy steel cut bars and rods
fiscal years 1989-91, January-March 1991, and
January-March 1992................................................ I-67
v
CONTENTS
Tables--Continued
17. Income-and-loss experience of U.S. producers on their operations
producing subject special-quality carbon and alloy steel
cut bars and rods, fiscal years 1989-91, January-March 1991,
and January-March 1992 ..... ·. .................. ; . . . . . . . . . . . . . . . . . . . I.-68
18. Income-and-loss experience of U.S. producers on their operations
producing free-machining semifinished carbon steel lead
and bismuth products, fiscal years 1989-91, January-March 1991,
and January-March 1992............................................ 1-69
19. Income-and-loss experience of U.S. producers on their operations
producing free-machining carbon steel bars and rods,
fiscal years 1989-91, January-March 1991,and January-March 1992... I-71
20. Income-and-loss experience of U.S. producers on their operations
producing free-machining alloy steel bars and rods,
fiscal years 1989-91, January-March 1991,and January-March 1992 ... I-72
21. Income-and-loss experience of U.S. producers on their operations
producing free-machining carbon and alloy steel bars and rods,
fiscal years 1989-91, January-March 1991,and January-March 1992 ... I-73
22. Income-and-loss experience of U.S. producers on their operations
producing special-quality carbon steel semifinished products,
fiscal years 1989-91, January-March 1991,and January-March 1992... I-74
23. Income-and-loss experience of U.S. producers on their operations
producing special-quality alloy steel semifinished products,
fiscal years 1989-91, January-March 1991,and January-March 1992 ... 1-75
24. Income-and-loss experience of U.S. producers on their operations
producing special-quality carbon and alloy steel semifinished
products, fiscal years 1989-91, January-March 1991,and
January-March 1992........... ... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-76
25. lncome-·and-loss experience of U.S. producers on their operations
producing special-quality carbon steel bars and rods,
fiscal years 1989-91, January-March 1991,and January-March 1992 ... 1-78
26. Income-and-loss experience of U.S. producers on their operations
producing special-quality alloy steel bars and rods,
fiscal years 1989-91, January-March 1991,and January-March 1992... 1-79
27. Income-and-loss experience of U.S. producers on their operations
producing special-quality carbon and alloy steel bars and rods,
fiscal years 1989-91, January-March 1991,and January-March 1992... 1-80
28A. Value of assets and return on assets of U.S. producers of
semifinished steel products, fiscal years 1989-91, January-
March 1991, and January-March 1992 ................................ 1-81
28B. Value of assets and return on assets of U.S. producers of
subject special quality cut bars and rods, fiscal years 1989-91,
January-March 1991, and January-March 1992 ........................ 1-84
28C. Value of assets and return on assets of U.S. producers'
establishments wherein all special quality steel products are
produced, fiscal years 1989-91, January-March 1991, and
January-March 1992................................................ 1-85
vi
CONTENTS
Tables--Continued
29. Capital expenditures by U.S. producers of special quality steel
products, by products, fiscal years 1989-91, January-March 1991,
and January-March ·1992............................................ I-87
30. Research and development expenditures of U.S. producers of special
quality steel products, by products, fiscal years 1989-91,
January-March 1991, and January-March 1992 ........................ I-88
31. Subject special-quality carbon and alloy steel products:
Brazilian capacity, production, capacity utilization,
and shipments, 1989-91, January-March 1991, January-March 1992,
and projected 1992................................................ I-92
32. Certain special-quality semifinished and hot-rolled
cut~length
carbon and alloy steel products: U.S. imports, by products
and by sources, 1989-91, January-March 1991, and
January-March 1992 ................................................ I-100
33A. Subject special-quality semifinished and hot-rolled cut-length
carbon and alloy steel products: U.S. shipments of domestic
product, U.S. imports, and U.S. apparent consumption, by
products, 1989-91, January-March 1991, and
January-March 1992 ...... , ........ ·. ............................... I-102
33B. Free-machining special-quality semifinished and hot-rolled
carbon and alloy steel products: U.S. shipments of domestic
product, U.S. imports, and U.8. apparent consumption, by
products, 1989-91, January-March 1991, and
January-March 1992 ......................... ·..................... I-106
33C. Total special-quality semifinished and hot-rolled
carbon and alloy steel products: U.S. shipments of domestJc
product, U.S. imports, and U.S. apparent consumption, by
products, 1989-91, January-March 1991, and
January-March 1992.............................................. I-110
34. Weighted-average net f .o.b. prices of product 1 reported by U.S.
producers and importers, and margins of underselling
(overselling), by quarters, January 1989-March 1992 ............... I-117
35. Weighted-average net f .o.b. prices of product 2 reported by U.S.
producers and importers, and margins of underselling
(overselling), by quarters, January 1989-March 1992 ............... I-117
36. Weighted-average net f.o.b. prices of product 3 reported by U.S.
producers and importers, and margins of underselling
(overselling), by quarters, January 1989-March 1992 ............... I-117
37. Weighted-average net f.o.b. prices of product 5 reported by U.S.
producers and importers, and margins of underselling
(overselling), by quarters, January 1989-March 1992 ............... I-117
38. Weighted-average net f.o.b. prices of product 6 reported by U.S.
producers and importers, and margins of underselling
(overselling), by quarters, January 1989-March 1992 ............... I-117
vii
CONTENTS'
Tables--Continued
39. Exchange rates: Indexes of nominal and real exchange rates of
the Brazilian cruzeiro, and indexes of producer prices in
the United States and Brazil, by quarters,
January 1989-March 1992........................................... I-117
G-1. Subject special-quality.carbon steel semifinished products:
Summary data concerning the U.S. market, 1989-91,
January-March 1991, and January-March 1992. .. .. . . . .......... ... . G-4
G-2. Lead & bismuth free-machining carbon steel semifinished products:
Summary data concerning the U.S. market, 1989-91,
January-March 1991, and January-March 1992.. .. . . .. ........ .. . .. . G-4
G-3. All free-machining carbon steel semifinished products:
Summary data concerning the U.S. market, 1989-91,
January-March 1991, and January-March 1992. ... .. .. ..... .. . .. . .. . G-4
G-4. All special-quality carbon steel semifinished products:
Summary data concerning the U.S. market, 1989-91,
January-March 1991, and January-March 1992.... .. ......... .. .. .. . G-4
G-5. Merchant-quality carbon steel semifinished products:
Summary data concerning the U.S. market, 1989-91,
January-March 1991, and January-March 1992.... .. ... .... .. ....... G-4
G-6. All carbon steel semifinished products:
Summary data concerning the U.S. market, 1989-91,
January-March 1991, and January-March 1992.... .. ... ... . . . .... .. . G-4
G-7. Subject special-quality alloy steel semifinished products:
Summary data concerningthe U.S. market, 1989-91,
January-March 1991, and January-March 1992.. .. .. ... .. . . . . . ... .. . G-4
G-8. Lead & bismuth free-machining alloy steel semifinished products:
Summary data concerning .the U.S. market, 1989-91,
January-March 1991, and January-March 1992. ... .. ... . . . . .. . ... .. . G-4
G-9. All free-machining alloy steel semifinished products:
Summary data concerning the U.S. market, 1989-91,
January-March 1991, and January-March 1992. .. . . . ... . . . ... ....... G-4
G-10. All free-machining alloy steel semifinished products:
Summary data concerning the U.S. market, 1989-91,
January-March 1991, and January-March 1992.. ....... ...... .... .. . G-4
G-11. Subject special-quality carbon & alloy steel semifinished
products: Summary data concerning the U.S. market, 1989-91, ·
January-March 1991, and January-March 1992... ... . . . . . . ... . .. . . . . G-4
G-12. Lead & bismuth free-machining carbon & alloy steel semifinished
products: Summary data concerning the u.s; market, 1989-91,
January-March 1991, and January-March 1992... ... . . . . .. ... ....... G-4
G-13. All free-machining carbon & alloy steel semifinished
products: Summary data concerning the U.S. market, 1989-91,
January-March 1991, and January-March 1992.. ... .. . . ...... ... . . . . G-5
viii
CONTENTS
Tables--Continued
G-14. All special-quality carbon & alloy steel semifinished
products: Summary data concerning the U.S. ·market, 1989-91,
January-March 1991, and January-March 1992... .. . . . . . . . . . . . . . . . . . G-6
G-15. All carbon & alloy steel semifinished products:
Summary data concerning the U.S. market, 1989-91,
January-March 1991, and January-March 1992.. ... .. . . . . . .. .. . . . . . . G-7
G-16. Subject special-quality carbon steel cut bars (including cut
rods): Summary data concerning the U.S. market, 1989-91,
January-March 1991, and January-March 1992.. .. . . . . . . . . .. .. . .. . . . G-7
G-17. Subject special-quality alloy steel cut bars (including cut
rods): Summary data concerning the U.S. market, 1989-91,
January-March 1991, and January-March 1992............. .. . .. .. . . . G-7
G-18. Subject special-quality carbon & alloy steel cut bars
(including cut rods): Summary data concerning the U.S. market,
1989-91, January-March 1991, an.d January-March 1992............. G-7
G-19. Certain special-quality carbon steel coiled bars:
Summary data concerning the U.S. market, 1989-91,
January-March 1991, and January-March 1992...... .. . . . . . . . .. . . . . . G-7
G-20. Certain special-quality alloy steel coiled bars:
Summary data concerning the U.S. market, 1989-91,
January•March 1991, and January-March 1992.. ... ... .. . . . . . .. . . .. . G-7
G-21. Certain special-quality carbon & alloy steel coiled bars:
Summary data concerning the U.S. market, 1989-91,
January-March 1991, and January-March 1992... ..... .. . . . . . .. . .... G-7
G-22. Certain special-quality carbon steel bars (including cut
rods): Summary data concerning the U.S. market, 1989-91,
January-March 1991, and January-March 1992.. ... .. . . . . . . . . .. . . . . . G-7
G-23. Lead & bismuth free-machining carbon steel bars (including cut
rods): Summary data concerning the U.S. market, 1989-91,
January-March 1991, and January-March 1992.. .. . . . . . . . . . . . . . . . .. . G-7
G-24. All free-machining carbon steel bars (including cut
rods): Summary data concerning the U.S. market, 1989-91,
January-March 1991, and January-March 1992.. .. . . . . . . . . . . . . . . . . . . G-7
G-25. All special-quality carbon steel bars (including cut rods):
Summary data concerning the U.S. market, 1989-91,
January-March 1991, and January-March 1992............... .. . . .. . G-7
G-26. Merchant-quality carbon steel bars (including cut rods):
Summary data concerning the U.S. market, 1989-91,
January-March 1991, and January-March 1992..... ... ... .. . . . .. . . . . G-7
G-27. All carbon steel bars (including cut rods):
Summary data concerning the U.S. market, 1989-91,
January-March 1991, and January-March 1992...... .. ... .. . . ... . .. . G-7
G-28. Certain special-quality alloy steel bars (including cut rods):
Summary data concerning the U.S. market, 1989-91,
January-March 1991, and January-March 1992...... .. ... .. . . . .. . .. . G-7