PUBLIC VERSION
STAINLESS STEEL BAR FROM BRAZIL, INDIA, JAPAN AND SPAIN Domestic Industry Presentation by
Michael Kerwin, Georgetown Economic Services, LLC
July 12, 2018
Prepared by Georgetown Economic Services, LLC
U.S. Imports of SSB from Brazil Increased During the Original Investigation
5,000
i;"i* 4,000
+.1 3,000
0 _C
2,000
ci)
0 1,000
0
1 0/ ea
4,594
1991 1993
2 Source: ITC Prehrg. Rep. at B-3.
PUBLIC VERSION
Brazilian Producers' Idle Capacity in 2017 [
] Imports from Brazil
Note: [
3 Source: ITC Prehrg. Rep. at IV-26, B-3.
PUBLIC VERSION Brazil's Reported Capacity and Excess
Capacity Are Understated in the Staff Report
't?
Source: [ ] and 4 ITC Prehrg. Rep. at IV-26.
PUBLIC VERSION
Brazil Is Export Oriented
5 Source: ITC Prehrg. Rep. at IV-26.
Exports of SSB to the United States Rose as a Share of Total Brazilian Exports
2005 2011 2017 3.0%
6 Source: GTA Export Statistics, Second Review USITC Pub. 3895 at IV-13, Third Review USITC Pub. 4341 at 1-10.
Kelley rye
1,402
00 1-` 11/. 00
c:(41 - \•(‘-
717
0
4-1
16 3,000
_C
2,000 CU
0 1,000
0
4,000
U.S. Imports of SSB from India Surged During the Original Investigation
5,000
1991 1993
7 Source: ITC Prehrg. Rep. at B-3.
PUBLIC VERSION
Indian Producers' Idle Capacity in 2017 Exceeds Peak
Pre-Order Imports from India
8 Source: ITC Prehrg. Rep. at B-3 and Dorn. Ind. Prehrg. Brf. at 17 and Exh. 3.
PUBLIC VERSION Idle Capacity in 2017 Would Allow India to Capture a Higher
Share of the U.S. Market Than It Had Pre-Order
Source: ITC Prehrg. Rep. at B-3 and C-3 and Dom. Ind. Prehrg. Brf. at Exh. 3.
Kelley Drye
PUBLIC VERSION India's Reported Capacity and Excess
Capacity Are Understated in the Staff Report
Source:[ ] and 1 0 ITC Prehrg. Rep. at IV-48 and E-3.
The Nonresponding Producers in India Have Significant Capacities to Produce SSB
• Aamor Inox, which was established in 2004, has an annual SSB capacity of
75,000 short tons.
• Ambica Steel has an annual capacity of 80,000 tons to produce SSB.
• D.H. Exports's capacity to produce SSB is 12,000 MT per year.
• Facor Steels has an overall capacity to produce 60,000 tons per year of
alloys, carbon and stainless steel.
• India Steel Works has an annual production capacity of 30,000 tons of
stainless bright bars.
• As of 2012, Panchmahal Steel Limited had an annual production capacity
of 72,000 metric tons to produce stainless long products, including
stainless bar, and was operating at just 40 percent of its capacity.
• Venus Wires has an overall production capacity of 60,000 tons per year to
produce stainless bars and wires.
11 Source: Dom. Ind. Prehrg. Brf. at 16-17 and Exh. 2.
Kelley Drye 1 2 Source: Dom. Ind. Prehrg. Brf. at Exh. 3.
PUBLIC VERSION
India Is Export Oriented
1993
U.S. Imports of SSB from Japan Increased In the Final Year of the P01
16,000
Tf7 14,500
0
13,000
z 11,500
10,000
1992
1.00/0 Increase offs
foga,
wara. NIP
mea.
13 Source: ITC Prehrg. Rep. at B-3.
PUBLIC VERSION
The Responding Japanese Producers Have Sufficient Excess
Capacity to [
14 Source: ITC Prehrg. Rep. at IV-48, C-3 and [ I QR at 11-11.
PUBLIC VERSION Japan's Reported Capacity and Excess
Capacity Are Understated in the Staff Report
Source: [ ] and 1 5 ITC Prehrg. Rep. at IV-50.
PUBLIC VERSION
Japan Is Export Oriented
• Based the responding Japanese producers, Japan's exports of SSB ranged between [ ] tons and
] tons from 2015 to 2017.
• Based on Global Trade Atlas statistics, Japan's exports of SSB [ ] ranging from 49,770 tons and 54,019 tons during the same period.
In the second review, the Commission found that Japan was export oriented based on the same factual pattern, with Global Trade Atlas showing exports of roughly 50,000 short tons.
1 6 Source: ITC Prehrg. Rep. at IV-48 and IV-52 and [ ] For. Prod. QR atI1-11.
Kelley Drye
U.S. Imports of SSB from Spain Increased During the Original Investigation
8,000
7,000
TIT c 6,000
4-)
5,000
4,000
w 3,000
2,000
tom
0
A 0 Ina e iu " 3
wow woo
woo
woo
sso. wow
1991
17 Source: ITC Prehrg. Rep. at B-3.
1993
PUBLIC VERSION The Subject Spanish Producers Have Sufficient Excess
Capacity to [ ] Their Exports to the U.S. Market in Relation to Peak Volumes During the Original P01
Kelley Drye
1 8 Source: ITC Prehrg. Rep. at IV-57.
PUBLIC VERSION Spain's Reported Capacity and Excess
Capacity Are Understated in the Staff Report
Source: [ ] and 1 9 ITC Prehrg. Rep. at IV-57.
PUBLIC VERSION
Spain Is Export Oriented
Kelley Drye 20 Source: Dorn. Ind. Prehrg. Brf. at Exh. 3.
35,000
30,000
O 25,000
o▪ 20,000
• 15,000
10,000
0 5,000
0
1991 1992 1993
22.0% Increase
Cumulated Subject Imports of SSB Increased During the Original Investigation
21 Source: ITC Prehrg. Rep. at B-3.
PUBLIC VERSION The Subject Producers Have Sufficient Excess Capacity to
Increase [ ] Their Exports to the U.S. Market in Relation to Peak Volumes During the Original POI
Kelley Drye 22 Source: ITC Prehrg. Rep. at B-3, Dorn. Ind. Prehrg. Brf. at Exh. 7.
PUBLIC VERSION Responding Subject Producers Have Sufficient Excess
Capacity to Supply the Vast Majority of the U.S. Market
23 Source: ITC Prehrg. Rep. at C-3 and Dom. Ind. Prehrg. Brf. at Exh. 7 (excess capacity including [ ).
PUBLIC VERSION
Price Remains a Key Purchasing Factor • Fifteen of 16 responding purchasers stated price was "very important" in
their SSB purchasing decisions.
• "Price" was the most often cited top three factor firms consider in their
purchasing decisions for SSB.
• Fifteen of 16 responding purchasers reported that they "sometimes" or
"usually" purchase the lowest-priced product.
•
•
Hey 24 Source: ITC Prehrg. Rep. at 11-20 to 11-21 and U.S. Purch. QRs at 111-19, 111-24, and 111-21.
65.4%
India (Subject)
Spain
Total 34 of 52
PUBLIC VERSION
The Subject Countries Undersold the Domestic Product During
the Current Period of Review Even With the Orders in Place
25 Source: ITC Prehrg. Rep. at V-20.
PUBLIC VERSION
Purchasers Indicated That There Would Likely Be
Negative Price Effects if the Orders Are Revoked
26 Source: See Purch. QRs at 111-30.
Kelley Drye
The U.S. Industry Remains in a Vulnerable Condition
• For the current period of review as a whole, the domestic
industry was barely breaking even, with net income representing
just 0.4 percent of sales value.
• The domestic industry's operating income margin of 4.8 percent
in 2017 was similar to the operating margin of 4.4 percent in
1999, when the Commission found that the domestic industry
was vulnerable.
• Domestic industry capacity utilization in 2017 stood at just 45.6
percent, lower than in the original investigation or in any of the
previous sunset reviews.
27 Source: ITC Prehrg. Rep. at I-12 to I-13, C-5.
Kelley Drye
PUBLIC VERSION
Non-Subject Imports Have Taken an Increasing Share
of the U.S. Market Since the Original Investigation
28 Source: ITC Prehrg. Rep. at B-3, C-3.
52.0%
46.2%
Domestic Industry Capacity Utilization Has Fallen Between 1993 and 2017
n P
erce
nt
54.0%
52.0%
50.0%
48.0%
46.0%
44.0%
42.0%
45.6%
1993 1999 2005 2010 2017
29 Source: ITC Prehrg. Rep. at 1-12.
Fourth Review
2017
ttp& .
nvestiga ion 1993
U.S. Producers' Market Share
PUBLIC VERSION
Changes in SSB Market Since Original Investigation
63.1% 57.9% 34.5% 49.8%
Nonsubject Import Market Share 13.5% 34.1% [ ] [ ] [
Capacity Utilization 52.6% 50.8% 52.0% 46.2% 45.6%
Total Imports 59,058 87,320 124,496 108,688 160,481
30 Source: ITC Prehrg. Rep. at1-10 to 1-12.
Trade and Financial Factors Have Deteriorated Since
2005 During the Second Review
Apparent Domestic Consumption (Quantity)
U.S. Shipments (Quantity)
U.S. Shipments (Value)
Gross Profit
Operating Income
Average Unit Net Sales Value ($/ton)
295,751
171,255
$756,242
$142,556
$82,275
$4,813
1 3 9 768 11
159,287 4
$738, 242
$94,656
$39,020
$4,694 Jr
31 Source: ITC Prehrg. Rep. at 1-12 to 1-13.
_