Pub 4441

Non-Oriented Electrical Steel from China,
Germany, Japan, Korea, Sweden, and

Taiwan
Investigation Nos. 701-TA-506-508 and 731-TA-1238-1243 (Preliminary)
Publication 4441
December 2013
U.S. International Trade Commission
Washington, DC 20436

COMMISSIONERS
Irving A. Williamson, Chairman
Daniel R. Pearson
Shara L. Aranoff
Dean A. Pinkert
David S. Johanson
Meredith M. Broadbent
Robert B. Koopman
Director, Office of Operations
Staff assigned
Edward Petronzio, Investigator
Gerald Houck, Industry Analyst
John Benedetto, Economist
Charles Yost, Accountant
Mara Alexander, Statistician
Carolyn Holmes, Statistical Assistant
David Fishberg, Attorney
Courtney McNamera, Attorney
James McClure, Supervisory Investigator
Address all communications to

Secretary to the Commission
United States International Trade Commission

www.usitc.gov
Non-Oriented Electrical Steel from China,

Germany, Japan, Korea, Sweden, and
Taiwan
Publication 4441
December 2013
CONTENTS
Page
Determinations...............................................................................................................................1
ViewsoftheCommission...............................................................................................................3
PartI:Introduction................................................................................................................I1
Background................................................................................................................................I1
Statutorycriteriaandorganizationofthereport.....................................................................I1
Statutorycriteria...................................................................................................................I1
Organizationofreport...........................................................................................................I2
Marketsummary.......................................................................................................................I3
Summarydataanddatasources...............................................................................................I3
Previousandrelatedinvestigations..........................................................................................I4
NatureandextentofallegedsubsidiesandsalesatLTFV........................................................I4
Allegedsubsidies...................................................................................................................I4
AllegedsalesatLTFV.............................................................................................................I4
Thesubjectmerchandise..........................................................................................................I5
Commercesscope................................................................................................................I5
Tarifftreatment.....................................................................................................................I6
Theproduct...............................................................................................................................I6
Manufacturingprocesses......................................................................................................I7
DescriptionofCRML..............................................................................................................I8
Domesticlikeproductissues.....................................................................................................I9
Domesticindustry...................................................................................................................I12
PartII:ConditionsofcompetitionintheU.S.market............................................................II1
U.S.marketcharacteristics.......................................................................................................II1
U.S.marketsegments..............................................................................................................II1
Channelsofdistribution...........................................................................................................II1
Supplyanddemandconsiderations.........................................................................................II3
U.S.supply............................................................................................................................II3
CONTENTS
Page
PartII:ConditionsofcompetitionintheU.S.market(Continued).............................................
U.S.demand.......................................................................................................................II10
Substitutabilityissues.............................................................................................................II13
Leadtimes..........................................................................................................................II13
Purchasers..........................................................................................................................II13
ComparisonofU.S.producedandimportedproduct.......................................................II14
PartIII:U.S.producersproduction,shipments,andemployment.......................................III1
U.S.producers.........................................................................................................................III1
U.S.production,capacity,andcapacityutilization.................................................................III3
U.S.producersU.S.shipmentsandexports...........................................................................III3
U.S.producersinventories.....................................................................................................III3
U.S.producersimportsandpurchases..................................................................................III4
U.S.employment,wages,andproductivity............................................................................III4
PartIV:U.S.imports,apparentU.S.consumption,andmarketshares................................IV1
U.S.importers..........................................................................................................................IV1
U.S.imports.............................................................................................................................IV2
Negligibility..............................................................................................................................IV5
Cumulationconsiderations.....................................................................................................IV6
ApparentU.S.consumption....................................................................................................IV6
U.S.marketshares..................................................................................................................IV7
RatioofimportstoU.S.production........................................................................................IV8
PartV:Pricingdata...............................................................................................................V1
Factorsaffectingprices............................................................................................................V1
Rawmaterialcosts...............................................................................................................V1
U.S.inlandtransportationcosts...........................................................................................V4
Pricingpractices.......................................................................................................................V4
Pricingmethods....................................................................................................................V4
ii
CONTENTS
Page
PartV:Pricingdata(Continued)................................................................................................
Salestermsanddiscounts....................................................................................................V5
Pricedata..................................................................................................................................V5
Pricetrends...........................................................................................................................V8
Pricecomparisons................................................................................................................V8
Lostsalesandlostrevenue......................................................................................................V9
Purchasercomments..........................................................................................................V10
PartVI:FinancialexperienceofU.S.firms...........................................................................VI1
Background..............................................................................................................................VI1
OperationsonNOES................................................................................................................VI1
Netsales..............................................................................................................................VI2
Costs/expenses....................................................................................................................VI2
Profitability..........................................................................................................................VI3
Varianceanalysis.................................................................................................................VI3
Capitalexpendituresandresearchanddevelopmentexpenses............................................VI4
Assetsandreturnoninvestment............................................................................................VI4
Capitalandinvestment...........................................................................................................VI5
Actualnegativeeffects........................................................................................................VI5
Anticipatednegativeeffects................................................................................................VI5
PartVII:Threatconsiderationsandinformationonnonsubjectcountries..........................VII1
TheindustryinChina..............................................................................................................VII3
TheindustryinGermany........................................................................................................VII3
TheindustryinJapan.............................................................................................................VII5
TheindustryinKorea.............................................................................................................VII6
TheindustryinSweden..........................................................................................................VII7
TheindustryinTaiwan...........................................................................................................VII8
U.S.inventoriesofimportedmerchandise............................................................................VII8
iii
CONTENTS
Page
PartVII:Threatconsiderationsandinformationonnonsubjectcountries(Continued)..............
U.S.importersoutstandingorders........................................................................................VII9
Antidumpingorcountervailingdutyordersinthirdcountrymarkets..................................VII9
Informationonnonsubjectcountries....................................................................................VII9
Appendixes
A.
FederalRegisternotices....................................................................................................A1
B.
Calendarofthepublicconference....................................................................................B1
C.
Summarydata...................................................................................................................C1
Note.Informationthatwouldrevealconfidentialoperationsofindividualconcernsmaynot
bepublishedandthereforehasbeendeleted.Suchdeletionsareindicatedbyasterisks.
iv
UNITED STATES INTERNATIONAL TRADE COMMISSION

NON-ORIENTED ELECTRICAL STEEL FROM CHINA, GERMANY, JAPAN, KOREA,
SWEDEN, AND TAIWAN
DETERMINATIONS
On the basis of the record 1 developed in the subject investigations, the United States
International Trade Commission (Commission) determines, pursuant to sections 703(a) and
733(a) of the Tariff Act of 1930 (19 U.S.C. '' 1671b(a) and 1673b(a)) (the Act), that there is a
reasonable indication that an industry in the United States is materially injured by reason of
imports from China, Germany, Japan, Korea, Sweden, and Taiwan of non-oriented electrical
steel, provided for in subheadings 7225.19.00 and 7226.19.10, and 7226.19.90 of the
Harmonized Tariff Schedule of the United States, that are alleged to be sold in the United States
at less than fair value (LTFV), and by reason of imports of non-oriented electrical steel that
are allegedly subsidized by the Governments of China, Korea, and Taiwan.2
COMMENCEMENT OF FINAL PHASE INVESTIGATIONS
Pursuant to section 207.18 of the Commission=s rules, the Commission also gives notice
of the commencement of the final phase of its investigations. The Commission will issue a
final phase notice of scheduling, which will be published in the Federal Register as provided in
section 207.21 of the Commission=s rules, upon notice from the Department of Commerce
(Commerce) of affirmative preliminary determinations in the investigations under sections
703(b) or 733(b) of the Act, or, if the preliminary determinations are negative, upon notice of
affirmative final determinations in those investigations under sections 705(a) or 735(a) of the
Act. Parties that filed entries of appearance in the preliminary phase of the investigations
need not enter a separate appearance for the final phase of the investigations. Industrial
users, and, if the merchandise under investigation is sold at the retail level, representative
consumer organizations have the right to appear as parties in Commission antidumping and
countervailing duty investigations. The Secretary will prepare a public service list containing
the names and addresses of all persons, or their representatives, who are parties to the
investigations.
The record is defined in sec. 207.2(f) of the Commission=s Rules of Practice and Procedure (19
CFR ' 207.2(f)).
2
Commissioners Shara L. Aranoff and F. Scott Kieff did not participate.
BACKGROUND
On September 30, 2013, a petition was filed with the Commission and Commerce by AK
Steel Corp., West Chester, Ohio, alleging that an industry in the United States is materially
injured or threatened with material injury by reason of LTFV and subsidized imports of
non-oriented electrical steel from China, Korea, and Taiwan and LTFV imports of non-oriented
electrical steel from China, Germany, Japan, Korea, Sweden, and Taiwan. Accordingly, effective
September 30, 2013, the Commission instituted countervailing duty investigation Nos.
701-TA-506-508 and antidumping duty investigation Nos. 731-TA-1238-1243 (Preliminary).
Notice of the institution of the Commission=s investigations and of a public conference
to be held in connection therewith was given by posting copies of the notice in the Office of the
Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice
in the Federal Register of October 22, 2013 (78 FR 62660). The conference was held in
Washington, DC, on November 6, 2013, and all persons who requested the opportunity were
permitted to appear in person or by counsel.

ViewsoftheCommission
Basedontherecordinthepreliminaryphaseoftheseinvestigations,wefindthatthere
isareasonableindicationthatanindustryintheUnitedStatesismateriallyinjuredbyreasonof
importsofnonorientedelectricalsteel(NOES)fromChina,Germany,Japan,Korea,Sweden,
andTaiwanthatareallegedlysoldintheUnitedStatesatlessthanfairvalueandimportsof
NOESthatareallegedlysubsidizedbytheGovernmentsofChina,Korea,andTaiwan.1
I.
TheLegalStandardforPreliminaryDeterminations
Thelegalstandardforpreliminaryantidumpingandcountervailingdutydeterminations
requirestheCommissiontodetermine,basedupontheinformationavailableatthetimeofthe
preliminarydeterminations,whetherthereisareasonableindicationthatadomesticindustryis
materiallyinjuredorthreatenedwithmaterialinjury,orthattheestablishmentofanindustryis
materiallyretarded,byreasonoftheallegedlyunfairlytradedimports.2Inapplyingthis
standard,theCommissionweighstheevidencebeforeitanddetermineswhether(1)the
recordasawholecontainsclearandconvincingevidencethatthereisnomaterialinjuryor
threatofsuchinjury;and(2)nolikelihoodexiststhatcontraryevidencewillariseinafinal
investigation.3
II.
Background
ThepetitionsintheseinvestigationswerefiledonSeptember30,2013,byAKSteel
Corporation(AKSteel),adomesticproducerofNOES.Petitionerappearedattheconference
andsubmittedapostconferencebrief.
Severalrespondententitiesparticipatedintheseinvestigations.BaoshanIron&Steel
Ltd.,aproducerofsubjectmerchandisefromChina,andtheChinaIronandSteelAssociation
(collectivelyChineseRespondents)appearedattheconferenceandfiledapostconference
brief.ThyssenKruppSteelEuropeAG,aproducerofsubjectmerchandisefromGermany,and
ThyssenKruppSteelNorthAmerica,animporterofsubjectmerchandisefromGermany
(collectivelyThyssenKrupp),appearedattheconferenceandsubmittedapostconferencebrief,
asdidC.D.WalzholzKG(CDW),aproducerofsubjectmerchandisefromGermany.4JFESteel
CorporationandNipponSteel&SunimotoMetalCorporation(collectivelyJapanese
Respondents),producersofsubjectmerchandisefromJapan,appearedattheconferenceand
CommissionersAranoffandKieffdidnotparticipateintheseinvestigations.
19U.S.C.1671b(a),1673b(a)(2000);seealsoAmericanLambCo.v.UnitedStates,785F.2d
994,100104(Fed.Cir.1986);AristechChem.Corp.v.UnitedStates,20CIT353,35455(1996).Noparty
arguesthattheestablishmentofanindustryintheUnitedStatesismateriallyretardedbytheallegedly
unfairlytradedimports.
3
AmericanLambCo.,785F.2dat1001;seealsoTexasCrushedStoneCo.v.UnitedStates,35
F.3d1535,1543(Fed.Cir.1994).
4
CDWandThyssenKrupparealsoreferredtocollectivelyasGermanRespondents.
2

jointlysubmittedapostconferencebrief.CogentPowerInc.(Cogent)andSurahammarsBruk
AB(collectivelySwedishRespondents),animporterofthesubjectmerchandisefromSweden
andaproducerofthesubjectmerchandisefromSweden,respectively,appearedatthe
conferenceandsubmittedapostconferencebrief.ChinaSteelCorporation(ChinaSteelor
TaiwaneseRespondent),aproducerofthesubjectmerchandisefromTaiwan,appearedatthe
conferenceandfiledapostconferencesubmission.
U.S.industrydataarebasedonquestionnaireresponsesoftwofirms,AKSteeland
NucorCorporation(Nucor),whicharebelievedtoaccountforallU.S.productionofNOES
during2012.5Exceptasnoted,U.S.importdataarebasedontheofficialU.S.Departmentof
Commerce(Commerce)statisticsandquestionnaireresponsesfrom25U.S.importers,
representing87.4percentoftotalsubjectimportsin2012(bycountry,76.2percentofimports
fromChina,108.5percentofimportsfromGermany,71.8percentofimportsfromJapan,99.3
percentofimportsfromKorea,99.2percentofimportsfromSweden,and90.1percentof
importsfromTaiwan).6TheCommissionreceivedresponsestoitsquestionnairesfromten
foreignproducers/exportersofsubjectmerchandise:twoproducersofNOESinChina,
accountingfor***percentofU.S.importsofNOESfromChinain2012;threeproducersof
NOESinGermany,accountingfor***ofU.S.importsofNOESfromGermanyin2012;three
producers/exportersofNOESfromJapan,accountingfor***percentofU.S.importsofNOES
fromJapanin2012;oneproducerofNOESinKorea,accountingfor***percentofU.S.imports
ofNOESfromKoreain2012;andoneproducerofNOESinSweden,accountingfor***percent
ofU.S.importsofNOESfromSwedenin2012.7
III.
DomesticLikeProduct
A.
LegalStandard
IndeterminingwhetherthereisareasonableindicationthatanindustryintheUnited
Statesismateriallyinjuredorthreatenedwithmaterialinjurybyreasonofimportsofthe
subjectmerchandise,theCommissionfirstdefinesthedomesticlikeproductandthe
industry.8Section771(4)(A)oftheTariffActof1930,asamended(theTariffAct),defines
therelevantdomesticindustryastheproducersasawholeofadomesticlikeproduct,or
thoseproducerswhosecollectiveoutputofadomesticlikeproductconstitutesamajor
proportionofthetotaldomesticproductionoftheproduct.9Inturn,theTariffActdefines
ConfidentialReport(CR)atI4,III1;PublicReport(PR)atI3,III1.
CRatI4I5,IV1,PRatI34,IV1.CoveragewascalculatedbasedonofficialCommerce
importstatisticsrelativetothequantityofimports,inshorttons,reportedinquestionnairedatain
2012.CRatI5,n.4,PRatI4,n.4.
7
CRatVII3,VII5,VII8,VII12,VII15,PRatVII3,VII58.
8
19U.S.C.1677(4)(A).
9
19U.S.C.1677(4)(A).
6

domesticlikeproductasaproductwhichislike,orintheabsenceoflike,mostsimilarin
characteristicsanduseswith,thearticlesubjecttoaninvestigation.10
Thedecisionregardingtheappropriatedomesticlikeproduct(s)inaninvestigationisa
factualdetermination,andtheCommissionhasappliedthestatutorystandardoflikeor
mostsimilarincharacteristicsandusesonacasebycasebasis.11Nosinglefactoris
dispositive,andtheCommissionmayconsiderotherfactorsitdeemsrelevantbasedonthe
factsofaparticularinvestigation.12TheCommissionlooksforcleardividinglinesamong
possiblelikeproductsanddisregardsminorvariations.13AlthoughtheCommissionmustaccept
Commercesdeterminationastothescopeoftheimportedmerchandisethatissubsidized
and/orsoldatlessthanfairvalue,14theCommissiondetermineswhatdomesticproductislike
theimportedarticlesCommercehasidentified.15TheCommissionmay,whereappropriate,
includedomesticarticlesinthedomesticlikeproductinadditiontothosedescribedinthe
scope.16
10
19U.S.C.1677(10).
See,e.g.,CleoInc.v.UnitedStates,501F.3d1291,1299(Fed.Cir.2007);NECCorp.v.
DepartmentofCommerce,36F.Supp.2d380,383(Ct.IntlTrade1998);NipponSteelCorp.v.United
States,19CIT450,455(1995);TorringtonCo.v.UnitedStates,747F.Supp.744,749n.3(Ct.IntlTrade
1990),affd,938F.2d1278(Fed.Cir.1991)(everylikeproductdeterminationmustbemadeonthe
particularrecordatissueandtheuniquefactsofeachcase).TheCommissiongenerallyconsidersa
numberoffactorsincludingthefollowing:(1)physicalcharacteristicsanduses;(2)interchangeability;
(3)channelsofdistribution;(4)customerandproducerperceptionsoftheproducts;(5)common
manufacturingfacilities,productionprocesses,andproductionemployees;and,whereappropriate,(6)
price.SeeNippon,19CITat455n.4;TimkenCo.v.UnitedStates,913F.Supp.580,584(Ct.IntlTrade
1996).
12
See,e.g.,S.Rep.No.96249at9091(1979).
13
See,e.g.,Nippon,19CITat455;Torrington,747F.Supp.at74849;seealsoS.Rep.No.96249
at9091(Congresshasindicatedthatthelikeproductstandardshouldnotbeinterpretedinsucha
narrowfashionastopermitminordifferencesinphysicalcharacteristicsorusestoleadtothe
conclusionthattheproductandarticlearenotlikeeachother,norshouldthedefinitionoflike
productbeinterpretedinsuchafashionastopreventconsiderationofanindustryadverselyaffected
bytheimportsunderconsideration.).
14
See,e.g.,USEC,Inc.v.UnitedStates,34Fed.Appx.725,730(Fed.Cir.2002)(TheITCmaynot
modifytheclassorkindofimportedmerchandiseexaminedbyCommerce.);AlgomaSteelCorp.v.
UnitedStates,688F.Supp.639,644(Ct.IntlTrade1988),affd,865F.3d240(Fed.Cir.),cert.denied,
492U.S.919(1989).
15
HosidenCorp.v.AdvancedDisplayMfrs.,85F.3d1561,1568(Fed.Cir.1996)(theCommission
mayfindasinglelikeproductcorrespondingtoseveraldifferentclassesorkindsdefinedbyCommerce);
Cleo,501F.3dat1298n.1(Commerces{scope}findingdoesnotcontroltheCommissions{like
product}determination.);Torrington,747F.Supp.at74852(affirmingtheCommissions
determinationdefiningsixlikeproductsininvestigationswhereCommercefoundfiveclassesorkinds).
16
See,e.g.,PureMagnesiumfromChinaandIsrael,Inv.Nos.701TA403and731TA89596
(Final),USITCPub.3467at8n.34(Nov.2001);Torrington,747F.Supp.at74849(holdingthatthe
Commissionisnotlegallyrequiredtolimitthedomesticlikeproducttotheproductadvocatedbythe
petitioner,coextensivewiththescope).
11
B.
TheProduct
Initsnoticeofinitiation,Commercedefinedtheimportedmerchandisewithinthescope
oftheseinvestigationsasfollows:
The merchandise subject to these investigations consists of nonoriented

electrical steel (NOES), which includes coldrolled, flatrolled, alloy steel
products,whetherornotincoils,regardlessofwidth,havinganactualthickness
of0.20mmormore,inwhichthecorelossissubstantiallyequalinanydirection
ofmagnetizationintheplaneofthematerial.Thetermsubstantiallyequalin
thepriorsentencemeansthatthecrossgraindirectionofcorelossisnomore
than1.5timesthestraightgraindirection(i.e.,therollingdirection)ofcoreloss.
NOEShasamagneticpermeabilitythatdoesnotexceed1.65teslawhentested
atafieldof800A/m(equivalentto10oersteds)along(i.e.,parallelto)therolling
direction of the sheet (i.e., B800 value). NOES contains by weight at least 1.25
percentofsiliconbutlessthan3.5percentofsilicon,notmorethan0.08percent
ofcarbon,andnotmorethan1.5percentofaluminum.
NOES is subject to these investigations whether it is fully processed (fully

annealed to develop final magnetic properties) or semiprocessed (finished to
finalthicknessandphysicalformbutnotfullyannealedtodevelopfinalmagnetic
properties);whetherornotitiscoated(e.g.,withenamel,varnish,naturaloxide
surface, chemically treated or phosphate surface, or other nonmetallic
materials).FullyprocessedNOESistypicallymadetotherequirementsofASTM
specification A 677, Japanese Industrial Standards (JIS) specification C 2552,
and/or International Electrotechnical Commission (IEC) specification 6040484.
Semiprocessed NOES is typically made to the requirements of ASTM
specificationA683.However,thescopeoftheseinvestigationsisnotlimitedto
merchandisemeetingthespecificationsnotedabove.
NOES is sometimes referred to as coldrolled nonoriented electrical steel

(CRNO),nongrainoriented(NGO),nonoriented(NO),orcoldrollednongrain
oriented(CRNGO).Thesetermsareinterchangeable.17
17
NonOrientedElectricalSteelFromthePeoplesRepublicofChina,theRepublicofKorea,and
Taiwan:InitiationofCountervailingDutyInvestigations,78Fed.Reg.68412,68416(DeptofCommerce
Nov.14,2013);NonOrientedElectricalSteelFromthePeoplesRepublicofChina,Germany,Japan,the
RepublicofKorea,Sweden,andTaiwan:InitiationofAntidumpingDutyInvestigations,78Fed.Reg.
69041,69047(DeptofCommerceNov.18,2013).OnNovember22,2013,Petitionerrequestedthat
Commercerevisethescopelanguagetodefinemorepreciselytheintendedscopeoftheinvestigations.
PetitionAmendmentToClarifytheProposedScopeDefinition,November22,2013.Specifically,
Petitionerseekstorevisethescopetorequiremorethan1.00percentsiliconratherthan1.25percent
siliconandtorequireasurfaceoxidecoating,removingthelanguagewhichindicatesthatthescope
(Continued)

NOESisaflatrolled,alloysteelproductthatisusedtomanufacturelaminationsthatare
assembledinstackstoproducemagneticcoresforalternatingcurrentelectricalapparatus.
NOEShasdesirablemagneticpropertiesthataresimilarinalldirections(nonoriented),in
contrasttograinorientedelectricalsteel(GOES),whichhassuperiormagneticpropertiesinthe
lengthwisedirectionofthesheet,butlessfavorablepropertiesinotherdirections.Thus,NOES
isusedprimarilytoproducelaminationsforwhichthedirectionofthemagneticfluxinthe
apparatusisconstantlychanging,suchasforrotatingmachinery(e.g.,motorsandgenerators),
whereasGOESisusedprimarilyinstaticequipment,suchastransformers,forwhichthe
laminationscanbeproducedinsuchawayastotakeadvantageofthefavorabledirectionality
ofthesteel.NOESisalsousedinsmallstaticapparatus,suchassmall,lowvoltage
transformersandlightingballasts,ifthehighercostofGOEScannotbejustifiedbypotential
savingsinimprovedenergyefficiency.18
NOESissoldinsheetorstripform,eitherincoilsorinstraightlengths.Twotypesof
NOESareproduced:fullyprocessedNOES,forwhichtheproducerperformsthefinalannealing;
andsemiprocessedNOES,which,althoughitisannealedbytheproducer,mustbeannealed
onceagainbytheenduserafterbeingpunchedorotherwiseformedintolaminationsinorder
toachieveitspotentialmagneticproperties.BothdomesticandimportedNOESareproduced
incompliancewithspecificationsissuedbyASTMInternational(ASTM),orproprietaryor
internationalspecifications.19
NOES,ascurrentlydefinedinthescopedefinition,isproducedofsteelthatisalloyed
with1.25percentormoreofsilicon,withaluminumusuallyaddedinlesseramounts.Both
siliconandaluminumincreasetheelectricalresistivityofsteel,resultinginlowerlossofenergy
infinishedmotorsorapparatusproducedusingNOES.20
C.
Analysis
PetitionerarguesthattheCommissionshoulddefinethedomesticlikeproducttobe
NOES,inamannercoextensivewiththescopeofthesubjectmerchandiseandnotdefinethe
domesticlikeproducttoincludeGOESorcoldrolledmotorlaminationsteel(CRML)because
therearecleardividinglinesbetweenNOESandeachofthoseproducts.21Chinese
RespondentsandtheTaiwaneseRespondentarguethattheCommissionshoulddefinethe
domesticlikeproducttoincludeCRML.TheyassertthatCRMLrepresentsalowcost
alternativetoNOESinabroadrangeofapplications,thatthe1.25percentsiliconlevelreliedon
(Continued)
includesNOESwhetherornotitiscoated.Id.Iftherequesttomodifythescopeisgranted,itwould
havetheeffectofexcludingfromthescopemerchandiseliketheNOESproductNucorproduces
domestically.CommercehasnotactedonPetitionersrequestasofthetimetherecordclosedinthese
preliminaryphaseinvestigations.Accordingly,wehavereliedonthescopedefinitionCommerce
publishedinitsnoticesofinitiation.
18
CRatI8I9,PRatI6.
19
CRatI9,PRatI67.
20
CRatI9,PRatI7.
21
PetitionersPostconferenceBriefat314.

byPetitionertodefineNOESisartificialandarbitrary,andthattheCommissionpreviously
foundNOESandCRMLtobepartofabroadercontinuumofcoldrolledelectricalsheet
products.22
Basedontherecordinthepreliminaryphaseoftheseinvestigations,wehavedefineda
singledomesticlikeproductconsistingofNOESthatiscoextensivewiththescopeofthese
investigations.23
PhysicalCharacteristicsandUses.NOESandCRMLarebothproducedfromsteelalloyed
withsilicon.24CRMListypicallyproducedfromsteelhavingasomewhatlowercontentof
silicon.25NOES,ascurrentlydefinedinthescope,containsover1.25percentsiliconand
generallycontainsabout2percentsilicon,dependingonthegrade.26NOESderivesits
magneticpropertiesprimarilyfromitssiliconcontent,withsemiprocessedNOESrequiring
additionalannealingtoachieveitspotentialmagneticpropertiesafteritisstampedor
otherwiseformedintolaminationstoremovethestrainscausedbystampingorforming,which
areharmfultomagneticproperties.27NOESisnotnormallytemperrolled.28Themagnetic
propertiesofCRMLaredevelopedasaresultofheavytempermillextensionrollingatthe
producingmillfollowedbyadecarburizingannealofthestampedlaminationsbythecustomer
toachieveitspotentialmagneticproperties.29BothNOESandCRMLhavemagneticproperties
thatarenotorientedinaparticulardirection,andbothNOESandCRMLareusedtoproduce
laminationsthatareassembledtoproducemagneticcoresforelectricalapparatuses,although
theextenttowhichCRMLmaybeusedinthesameapplicationsasNOESisunclearonthe
currentrecord.30
22
ChineseRespondentsPostconferenceBriefat16;TaiwaneseRespondentsPostconference
ResponsetoStaffQuestionsat39.Althoughnotchallengingthedefinitionofthedomesticlikeproduct
inthepreliminaryphaseinvestigations,JapaneseRespondentsarguethatinanyfinalphase
investigations,theCommissionwillneedtoexaminewhetherthedomesticlikeproductshouldbe
expandedtoincludeCRML,givenitspriorfindingsregardingcompetitiveoverlapbetweenthetwo
products.JapaneseRespondentsPostconferenceBriefat24.
23
NopartyarguesthatGOESshouldbeincludedinthedomesticlikeproduct,andtherecord
indicatesthattherearecleardividinglinesbetweenNOESandGOES.CRatI8I9,PRatI6.
Specifically,themagneticpropertiesofGOESareoptimizedinonedirection,whichdictatesdifferent
enduses,andGOESissoldatahigherprice.Id.Therecordalsoindicatesthatonlytwooutof17
respondingimportersreportedthatGOEScouldbeusedasasubstituteforNOES.CRatII21,PRatII
12.Inaddition,thereisnothingintherecordtocontradictPetitionersassertionsthatNOESandGOES
aremanufacturedusingdistinctproductionprocesses,aresoldtodifferentcustomers,andare
perceivedbycustomerstobefundamentallydifferentproducts.PetitionersPostconferenceBriefat6
7.
24
CRatI12,PRatI8.
25
CRatI12,PRatI8.
26
CRatI12,PRatI8.Nucor,***.CRatI11andI18,n.45,PRatI8%I12n.45.
27
CRatI9,n.11,PRatI6n.11.
28
CRatI11,PRatI8.
29
CRatI12,PRatI8.
30
CRatI8I13,PRatI68.Thepartiesdisputetheextentofanyoverlapinenduses.
AccordingtoPetitioner,CRMLisalmostalwaysusedinlowvoltage,intermittentusehouseholddevices
(Continued)

ManufacturingFacilities,ProductionProcessesandEmployees.NOESproductionbegins
withthemeltingofsteelineitheranelectricarcfurnaceorabasicoxygenfurnace,withthe
moltensteelthenbeingsubjectedtovariousproceduressuchasargonoxygenrefining,ladle
metallurgytreatment,andvacuumdegassing,allofwhichacttoreduceundesirable
contaminantsandrefinethechemistryofthesteel.31Alloysincludingsiliconandaluminumare
added.Thesteelisnextcontinuouslycastintoslabsthatarerolledonacontinuoushotstrip
milltoproducehotrolledcoils,whicharethenuncoiledforadditionalprocessingand
recoiled.32Inthesubsequentcoilprocessing,thecoilsareannealedandcleaned,rolledto
orderedthicknessonacoldrollingmill,annealedagainonacontinuousannealinglineusinga
controlled,decarburizingatmosphere,andprovidedwithatightlyadherentsurfaceoxideto
preventthelaminationsfromstickingtooneanotherandtoincreaseelectricalresistance.33
Coilsmaybeslittoorderedwidth.34FullyprocessedNOESisusuallyprovidedwithanapplied
coatingtofurtherincreaseelectricalresistance.35SemiprocessedNOESissubsequently
stampedorotherwiseformedintolaminationsandmustagainbeannealedbytheenduserto
removestrainsthatareharmfultomagneticpropertiescausedbythestampingorformingand
toachieveitspotentialmagneticqualities.36
CRMLisproducedfromsteelthathasbeenrefinedtoalowcarboncontent,through
vacuumorotherprocessing,followedbycontinuouscasting,hotrolling,pickling,coldrolling,
annealing,andtemperrolling.37Theannealingprocessistypicallyperformedoncoilsinbatch
annealingfurnaces,althoughsomeproducersmayusecontinuousannealing.38
(Continued)
thatcantolerateCRMLsrelativelypoorcoreloss,heatbuildupsandinefficientelectricityusage,suchas
hairdryers,handheldmixers,garagedooropeners,sumppumps,andpowertools.Petitioners
PostconferenceBriefat9(citingTr.at29(Pfeiffer)).Incontrast,NOESisusedinmachineswherethe
efficientuseofelectricityisdesirable,suchashighervoltage,higherpowerorcompactsizedmotorsin
locomotives,aircraft,andotherindustrialapplications,wherehighpowerandexcessiveheatgeneration
rendermaterialswithhighcorelossvaluesunacceptable.Id.at9(citingTr.at2930(Pfeiffer)).
PetitioneralsoclaimsthatNOES,ratherthanCRML,isusedinmotorsthatoperatecontinuouslysuchas
industrialfans,pumps,rollingmills,andoilandgasdrillingequipment,sothatendusersdonotincur
excessiveelectricitycosts.Id.Ontheotherhand,theChineseRespondentsarguethatinsmalland
mediummotorsCRMLcanbeacosteffectivealternativetoNOES,thatwhenproperlyannealedCRML
canoffercorelossescomparabletomanygradesofNOES,andthatthepricingproductsforwhichthe
CommissionsoughtinformationoverlapandcompetewithCRML.ChineseRespondents
PostconferenceBriefat56(citingTr.at9495(Weinstein))&ResponsetoStaffQuestionsat3.
31
CRatI10,PRatI7.
32
CRatI10,PRatI7.
33
CRatI10,PRatI7.
34
CRatI10,PRatI7.
35
CRatI10,PRatI7.
36
CRatI9,PRatI6.
37
CRatI12,PRatI8.
38
CRatI12I13,PRatI8.

PetitionerreportedthatitproducesGOESandNOES,whichinvolvedistinctproduction
processes,butthatitdoesnotproduceCRML.39Petitioneralsoreportedthatitusesthesame
melting,casting,andhotrollingequipmenttoproduceotherproductsinadditiontoNOES,
includingstainlesssteel,GOES,andcarbonsteel,butitsNOEScoilprocessingequipmentisused
exclusivelyforNOES.40Nucorreportedtheproductionof***usingthesameequipment,
machinery,andworkersasareusedinNucorsproductionofaCRMLproductthatitstates
meetsthedefinitionofNOES.41
ChannelsofDistribution.Thelimitedrecordinthepreliminaryphaseofthese
investigationssuggeststhatbothNOESandCRMLaresoldtoendusers,servicecenters,and
distributors,althoughPetitionercontendsthatNOESandCRMLaretypicallysoldindistinct
marketsegments.42
Interchangeability.Thelimitedrecordinthepreliminaryphaseoftheseinvestigations
suggeststhatthereisatleastsomeinterchangeabilitybetweenNOESandCRML,buttheparties
disagreeastotheextentandfrequencyofanyactualoverlapinenduses.Petitioneragrees
thatCRMLmaybeusedinsteadofNOESinsomeapplicationsbutcontendsthatthoseuses
wouldbelimitedtolowvoltage,lowefficiencymotorswherehighefficiencyisnotrequired.43
RespondentscontendthatCRMLandNOESarehighlyinterchangeable,butconcedethereare
limitationsontheextenttowhichCRMLcanreplaceNOESinallapplications.44
ProducerandCustomerPerceptions.PetitionerperceivesNOESandCRMLtobedistinct
products,withverylittleoverlapinenduses.NucorproducesCRMLthatsatisfiesthe
descriptionofNOES,asdefinedbythescopeoftheproduct,butthelimitedrecorddoesnot
indicatewhetherNucorperceivesNOESandCRMLtobedistinctproducts.45Moreover,***
and17importersreportedthattherewerenosubstitutesforNOES,whileonlythreeimporters
namedCRMLasasubstituteforNOESinlaminations,transformers,andmotors.46
39
CRatIII3,PRatIII2;PetitionersPostconferenceBriefat7,11&Exhibit1.
CRatI11,PRatI7.
41
CRatIII3,PRatIII2.Nucor,***.CRatI11andI18,n.45,PRatI8&I12n.45.
42
43
44
Tr.at9495(Weinstein)(statingthatCRMLisnotagoodsubstituteforNOESinvariableand
highfrequencymotors));Tr.at149(Weinstein)(statingthatthereisaverylargepercentageoftheNOES
marketthatcannotbereplacedbyCRML);ChineseRespondentsPostconferenceBrief,Responseto
StaffQuestionsat3(statingthatcustomerspreferNOEStoCRMLinseveralcircumstances,including
integralmotorsthatrequirehighefficiencyandconsistentworkingconditions;motorsinwhichthe
designimposessizerestrictionsthatpreventtheuseofCRML,whichcannotbesufficientlylaminated;
somelargersizeindustrialmotors,whichneedthickcoating,anduseNOESwithextracoating;andnew
electricalvehiclemotordesignsthatneedthingauge,lowcorelossNOES).
45
CRatI11andI18,n.45,PRatI8andI12n.45.Initsquestionnaireresponse,Nucor***.
46
CRatII20,PRatII12.OneimporternotedthatCRMLcouldsubstituteforsemiprocessed
NOESbutnotfullyprocessedNOES,andanotherdescribedCRMLasasubstituteforNOESuptothe
highestgradeforNOES,claimingthatsomeofitspurchasersstatedthattheyswitchfromNOEStoCRML
ifNOESpricesrise.CRatII20,PRatII12.
40
10

Price.TherecordindicatesthatNOESistypicallysoldatahigherpricethanCRML.47
Conclusion.Basedonthelimitedrecordinthepreliminaryphaseofthese
investigations,wedefineasingledomesticlikeproduct,NOES,thatiscoextensivewiththe
scopeintheseinvestigations.48TherecordindicatesthattherearedifferencesbetweenNOES
andCRMLinphysicalcharacteristics,productionprocesses,andpricesandthatthePetitioner
alongwithamajorityofimportersreportthattherearenoproductsthatcouldserveas
substitutesforNOES.Thelimitedrecordalsosuggeststhatthereisatleastsomedegreeof
interchangeabilitybetweenthetwoproducts.Althoughthepartieshavepresenteddivergent
viewsregardingthisissue,theyappeartoagreethatCRMLmaybeabletoreplaceNOESin
someapplications.***,forexample,producesCRMLthatfitsthephysicalandchemical
definitionofNOES,asdefinedbythescopeoftheseinvestigations.Weintendtoexaminethis
likeproductissuefurtherinanyfinalphaseinvestigations.49
IV.
DomesticIndustry
Thedomesticindustryisdefinedasthedomesticproducersasawholeofadomestic
likeproduct,orthoseproducerswhosecollectiveoutputofadomesticlikeproductconstitutes
amajorproportionofthetotaldomesticproductionoftheproduct.50Indefiningthedomestic
industry,theCommissionsgeneralpracticehasbeentoincludeintheindustryproducersofall
domesticproductionofthelikeproduct,whethertollproduced,captivelyconsumed,orsoldin
thedomesticmerchantmarket.
TheCommissionreceivedquestionnaireresponsesfromtwofirms,Petitionerand
Nucor,believedtorepresentallU.S.productionofNOES,withPetitioneraccountingforthe
largemajorityofNOESproductionintheUnitedStates.51Therearenorelatedpartyissuesin
thispreliminaryphaseoftheseinvestigations.52
Accordingly,basedonourdefinitionofthedomesticlikeproduct,wedefinethe
domesticindustryasAKSteelandNucor,thetwoknownU.S.producersofNOES.
47
CRatI11,II21,PRatI8,II12.
Thedomesticlikeproductanalysisbeginswiththescopedefinition,andtheinscopeproduct
intheseinvestigationsislimitedtoNOES.Consequently,respondentsargumentsthattheCommission
definedthedomesticlikeproductsmorebroadlyinpriorinvestigationshavingmuchbroaderscope
definitionsi.e.,allcoldrolledsteelhavelittlepertinencetoouranalysis.
49
Weinviteanypartythatplanstoassertanalternativedomesticlikeproductdefinitioninany
finalphaseinvestigationtoraisetheissueandindicatethoseproductsonwhichtheCommissionshould
collectdatainitscommentsonthedraftquestionnaires.
50
19U.S.C.1677(4)(A).
51
CRatIII1,PRatIII1.
52
CRatIII1,n.1&III6,PRatIII1,n.1&III4.
48
11

V.
Cumulation53
A.
InGeneral
Forpurposesofevaluatingthevolumeandpriceeffectsforadeterminationof
reasonableindicationofmaterialinjurybyreasonofsubjectimports,section771(7)(G)(i)ofthe
TariffActrequirestheCommissiontocumulatesubjectimportsfromallcountriesastowhich
petitionswerefiledand/orinvestigationsselfinitiatedbyCommerceonthesameday,ifsuch
importscompetewitheachotherandwiththedomesticlikeproductintheU.S.market.In
assessingwhethersubjectimportscompetewitheachotherandwiththedomesticlike
product,theCommissiongenerallyhasconsideredfourfactors:
(1)
the degree of fungibility between subject imports from different
countries and between subject imports and the domestic like product,
including consideration of specific customer requirements and other
qualityrelatedquestions;
(2)
thepresenceofsalesorofferstosellinthesamegeographicmarketsof
subjectimportsfromdifferentcountriesandthedomesticlikeproduct;
(3)
the existence of common or similar channels of distribution for subject
importsfromdifferentcountriesandthedomesticlikeproduct;and
(4)
whetherthesubjectimportsaresimultaneouslypresentinthemarket.54
Whilenosinglefactorisnecessarilydeterminative,andthelistoffactorsisnot
exclusive,thesefactorsareintendedtoprovidetheCommissionwithaframeworkfor
53
PursuanttoSection771(24)oftheTariffAct,importsfromasubjectcountryofmerchandise
correspondingtoadomesticlikeproductthataccountforlessthan3percentofallsuchmerchandise
importedintotheUnitedStatesduringthemostrecent12monthsforwhichdataareavailable
precedingthefilingofthepetitionshallbedeemednegligible.19U.S.C.1671b(a),1673b(a),
1677(24)(A)(i),1677(24)(B);seealso15C.F.R.2013.1(developingcountriesforpurposesof19U.S.C.
1677(36)).Negligibilityisnotanissueintheseinvestigations.Thedataavailable,basedonofficial
Commercestatistics,indicatethatsubjectimportsfromeachsubjectcountryexceedtherequisite3
percentstatutorynegligibilitythreshold.FromAugust2012toJuly2013,themostrecent12month
periodpriortothefilingofthepetitionsforwhichdataareavailable,U.S.importsfromChinaaccounted
for22.4percentofthetotalimportsofNOESbyquantity,U.S.importsfromGermanyaccountedfor
11.8percentofthetotalimportsofNOESbyquantity,U.S.importsfromJapanaccountedfor22.2
percentofthetotalimportsofNOESbyquantity,U.S.importsfromKoreaaccountedfor5.6percentof
thetotalimportsofNOESbyquantity,U.S.importsfromSwedenaccountedfor11.6percentofthetotal
importsofNOESbyquantity,andU.S.importsfromTaiwanaccountedfor20.3percentofthetotal
importsofNOESbyquantity.CRatIV6IV7,PRatIV5&CR/PRatTableIV4.
54
SeeCertainCastIronPipeFittingsfromBrazil,theRepublicofKorea,andTaiwan,Inv.Nos.
731TA27880(Final),USITCPub.1845(May1986),affd,FundicaoTupy,S.A.v.UnitedStates,678F.
Supp.898(Ct.IntlTrade),affd,859F.2d915(Fed.Cir.1988).
12

determiningwhetherthesubjectimportscompetewitheachotherandwiththedomesticlike
product.55Onlyareasonableoverlapofcompetitionisrequired.56
B.
Analysis
Petitionerarguesthat,becausetherelevantcriteriaforcumulationaresatisfied,the
CommissionshouldcumulatesubjectimportsfromChina,Germany,Japan,Korea,Sweden,and
Taiwan.57SwedishRespondentsarguethattheCommissionshouldnotcumulatesubject
importsfromSwedenwithimportsfromtheothersubjectcountriesbecauseofdifferencesin
theformoftheproductsoldfromSweden,channelsofdistribution,andnonpricefactors,
whichitcontendsareofparamountimportancetoitscustomers.Theyalsocontendthatthey
serveanichemarketandalimitednumberoflongtimecustomersindiscretegeographic
locationsandconsequentlydonotparticipateinthelargermarketforNOES.58
Intheseinvestigations,thethresholdcriterionforcumulationissatisfiedbecause
Petitionerfiledtheantidumpingdutypetitionswithrespecttosubjectcountriesandthe
countervailingdutypetitionswithrespecttoChina,Korea,andTaiwanonthesameday,
September30,2013.59Wethusexaminewhetherthereisareasonableoverlapofcompetition
betweensubjectimportsfromChina,Germany,Japan,Korea,Sweden,andTaiwanand
betweensubjectimportsfromeachsourceandthedomesticlikeproduct.
Fungibility.Therecordinthepreliminaryphaseoftheseinvestigationsindicatesthat
NOESisatleastmoderatelyfungible,regardlessofsource.60BothU.S.producersdescribed
NOESfromallsourcesas***interchangeable,whilemostrespondingimportersreportedthat
NOESfromthevarioussourceswasfrequentlyorsometimesinterchangeable.61When
askedwhetherdifferencesotherthanpriceareeversignificanttopurchaserschoosingbetween
thedomesticlikeproductandsubjectimportsoramongsubjectimports,bothU.S.producers
reportedthatdifferencesotherthanpriceare***significant,whilealargemajorityof
importersindicatedthatdifferencesotherthanpricewereatleastsometimessignificant.62
AlthoughSwedishRespondentscontendthatsubjectimportsfromSwedenarenot
fungiblewiththedomesticlikeproductorsubjectimportsfromothersubjectcountries,the
55
See,e.g.,WielandWerke,AGv.UnitedStates,718F.Supp.50(Ct.IntlTrade1989).
TheStatementofAdministrativeAction(SAA)totheUruguayRoundAgreementsAct(URAA),
expresslystatesthatthenewsectionwillnotaffectcurrentCommissionpracticeunderwhichthe
statutoryrequirementissatisfiedifthereisareasonableoverlapofcompetition.H.R.Rep.No.103
316,Vol.Iat848(1994)(citingFundicaoTupy,678F.Supp.at902);seeGossGraphicSys.,Inc.v.United
States,33F.Supp.2d1082,1087(Ct.IntlTrade1998)(cumulationdoesnotrequiretwoproductstobe
highlyfungible);WielandWerke,AG,718F.Supp.at52(Completelyoverlappingmarketsarenot
required.).
57
58
SwedishRespondentsPostconferenceBriefat412.
59
Noneofthestatutoryexceptionstocumulationapplies.
60
CRatII22,PRatII13.
61
CRatII24II25,PRatII14&CR/PRatTableII4.
62
CR/PRatTableII5.
56
13

recordindicatesthatmarketparticipantsperceptionsoftheinterchangeabilityofsubject
importsfromSwedenwiththedomesticlikeproductandimportsfromothersubjectcountries
werenotappreciablydifferentfromtheirperceptionsoftheinterchangeabilityofimportsfrom
othercountries.63Furthermore,withrespecttotheassertionthatimportsfromSwedenare
notfungiblewithimportsfromothersourcesbecauseimportsfromSwedenaresoldinslitform
ratherthanwidecoils,therecordindicatesthatimportsfromSwedenconsistedofbothwide
coilsandslitcoils.64
ChannelsofDistribution.Thelimitedrecordinthesepreliminaryinvestigationsindicates
someoverlapinthechannelsofdistribution.U.S.producersandimportersofNOESfrom***
sold***,whileimportersofNOESfrom***reportedsellingonlytoendusers.65Importersof
NOESfrom***soldmainlytodistributors,butalsosoldtoendusersineachyearandeach
interimperiodoftheperiodofinvestigation(POI),withappreciablesharesofimportshipments
beingdirectedtoendusersin2010andinterim2013.66
GeographicOverlap.Therecordindicatesanoverlapinsalesofthedomesticlike
productandsalesofthesubjectimportsfromallsourcesinthesamegeographicmarkets.U.S.
producersreportedsellingNOEStoallsixregionsinthecontiguousUnitedStates,andall
importersofNOESfromeachofthesubjectcountries,exceptforSwedenandTaiwan,also
reportedsellingNOEStoallsixregionsofthecontiguousUnitedStates.67Importersofsubject
NOESfromTaiwanreportedsellingtofiveofthesixspecifiedregions,whileimportersof
subjectNOESfromSwedenreportedsellingtofourofthesixspecifiedregions.68
SimultaneousPresenceinMarket.Officialimportstatisticsindicatethatimportsof
NOESfromGermany,Japan,andSwedenenteredtheUnitedStateseverymonthduringthePOI
andthatimportsofNOESfromChinaandTaiwanenteredineverymonthbutone,while
importsofNOESfromKoreaenteredtheUnitedStatesin36outof42months.69
Conclusion.AlthoughSwedishRespondentsarguethatsubjectimportsfromSwedendo
notcompetewiththedomesticlikeproductandsubjectimportsfromothersources,the
record,asdiscussedabove,indicatesareasonableoverlapofcompetitionbetweensubject
importsfromSwedenandthedomesticlikeproductandbetweensubjectimportsfromSweden
andothersubjectimports.Therecordinthepreliminaryphaseoftheseinvestigationsdoesnot
indicatealackoffungibilitybetweensubjectimportsfromSwedenandimportsfromother
subjectcountriesandthedomesticlikeproduct.Aspreviouslydiscussed,subjectimportsfrom
63
CR/PRatTableII4.
CR/PRatTablesV3V10(showingpricingdataonimportsofNOESfromSwedenforeachof
theeightpricingproducts,whichrepresentNOESsoldincoils).
65
CRatII2,PRatII2&CR/PRatTableII1.
66
CR/PRatTableII1.Specifically,importersofNOESfrom***reportedthat***percentof
shipmentsweretoendusersin2010,***percentofshipmentsweretoendusersin2011,***percent
ofshipmentsweretoendusersin2012,and***percentofshipmentsweretoendusersfromJanuary
toJune2013.Id.TherecordfurtherindicatesthatoneimportersoldsubjectimportsfromTaiwanand
importsfromthreeothersubjectcountries.CRatV12,PRatV7&CR/PRatTableV3,note.
67
CR/PRatTableII2.
68
CR/PRatTableII2.
69
CRatIV8IV9,PRatIV6.
64
14

Swedendonotappeartobeadistinctproduct,andmarketparticipantsperceptionsofthe
interchangeabilityofsubjectimportsfromSwedenparalleledthoseforothersubjectsources.70
Therecordfurtherindicatesgeographicoverlapandsimultaneouspresence.Whileallsubject
importsfromSwedenaresoldtoendusers,thedomesticindustryandallsubjectsources
exceptTaiwansellheavilytothatchannel,andsubjectimportsfromTaiwanhavehadsufficient
presenceinthatchanneltoconstituteareasonableoverlap.
Consequently,therecordindicatesareasonableoverlapofcompetitionamongsubject
importsfromChina,Germany,Japan,Korea,Sweden,andTaiwanandbetweensubjectimports
fromeachsourceandthedomesticlikeproduct.Becausetheantidumpingandcountervailing
dutypetitionswerefiledonthesameday,andwefindthatthereisareasonableoverlapof
competitionbetweenandamongsubjectimportsandthedomesticlikeproduct,wecumulate
subjectimportsfromChina,Germany,Japan,Korea,Sweden,andTaiwanforouranalysisof
whetherthereisareasonableindicationofmaterialinjurybyreasonofsubjectimports.
VI.
ReasonableIndicationofMaterialInjurybyReasonofSubjectImports
A.
LegalStandard
Inthepreliminaryphaseofantidumpingandcountervailingdutyinvestigations,the
CommissiondetermineswhetherthereisareasonableindicationthatanindustryintheUnited
Statesismateriallyinjuredorthreatenedwithmaterialinjurybyreasonoftheimportsunder
investigation.71Inmakingthisdetermination,theCommissionmustconsiderthevolumeof
subjectimports,theireffectonpricesforthedomesticlikeproduct,andtheirimpacton
domesticproducersofthedomesticlikeproduct,butonlyinthecontextofU.S.production
operations.72Thestatutedefinesmaterialinjuryasharmwhichisnotinconsequential,
immaterial,orunimportant.73Inassessingwhetherthereisareasonableindicationthatthe
domesticindustryismateriallyinjuredbyreasonofsubjectimports,weconsiderallrelevant
economicfactorsthatbearonthestateoftheindustryintheUnitedStates.74Nosinglefactor
isdispositive,andallrelevantfactorsareconsideredwithinthecontextofthebusinesscycle
andconditionsofcompetitionthataredistinctivetotheaffectedindustry.75
AlthoughthestatuterequirestheCommissiontodeterminewhetherthereisa
reasonableindicationthatthedomesticindustryismateriallyinjuredbyreasonofunfairly
tradedimports,76itdoesnotdefinethephrasebyreasonof,indicatingthatthisaspectofthe
70
CR/PRatTableII4.
19U.S.C.1671b(a),1673b(a).
72
19U.S.C.1677(7)(B).TheCommissionmayconsidersuchothereconomicfactorsasare
relevanttothedeterminationbutshallidentifyeach{such}factor...{a}ndexplaininfullitsrelevance
tothedetermination.19U.S.C.1677(7)(B).
73
19U.S.C.1677(7)(A).
74
19U.S.C.1677(7)(C)(iii).
75
19U.S.C.1677(7)(C)(iii).
76
19U.S.C.1671b(a),1673b(a).
71
15

injuryanalysisislefttotheCommissionsreasonableexerciseofitsdiscretion.77Inidentifyinga
causallink,ifany,betweensubjectimportsandmaterialinjurytothedomesticindustry,the
Commissionexaminesthefactsofrecordthatrelatetothesignificanceofthevolumeandprice
effectsofthesubjectimportsandanyimpactofthoseimportsontheconditionofthedomestic
industry.Thisevaluationunderthebyreasonofstandardmustensurethatsubjectimports
aremorethanaminimalortangentialcauseofinjuryandthatthereisasufficientcausal,not
merelyatemporal,nexusbetweensubjectimportsandmaterialinjury.78
Inmanyinvestigations,thereareothereconomicfactorsatwork,someorallofwhich
mayalsobehavingadverseeffectsonthedomesticindustry.Sucheconomicfactorsmight
includenonsubjectimports;changesintechnology,demand,orconsumertastes;competition
amongdomesticproducers;ormanagementdecisionsbydomesticproducers.Thelegislative
historyexplainsthattheCommissionmustexaminefactorsotherthansubjectimportsto
ensurethatitisnotattributinginjuryfromotherfactorstothesubjectimports,thereby
inflatinganotherwisetangentialcauseofinjuryintoonethatsatisfiesthestatutorymaterial
injurythreshold.79Inperformingitsexamination,however,theCommissionneednotisolate
theinjurycausedbyotherfactorsfrominjurycausedbyunfairlytradedimports.80Nordoesthe
77
AngusChemicalCo.v.UnitedStates,140F.3d1478,148485(Fed.Cir.1998)({T}hestatute
doesnotcompelthecommissionerstoemploy{aparticularmethodology}.),affg944F.Supp.943,
951(Ct.IntlTrade1996).
78
TheFederalCircuit,inaddressingthecausationstandardofthestatute,hasobservedthat
{a}slongasitseffectsarenotmerelyincidental,tangential,ortrivial,theforeignproductsoldatless
thanfairvaluemeetsthecausationrequirement.NipponSteelCorp.v.USITC,345F.3d1379,1384
(Fed.Cir.2003).ThiswasreaffirmedinMittalSteelPointLisasLtd.v.UnitedStates,542F.3d867,873
(Fed.Cir.2008),inwhichtheFederalCircuit,quotingGeraldMetals,Inc.v.UnitedStates,132F.3d716,
722(Fed.Cir.1997),statedthatthiscourtrequiresevidenceintherecordtoshowthattheharm
occurredbyreasonoftheLTFVimports,notbyreasonofaminimalortangentialcontributionto
materialharmcausedbyLTFVgoods.SeealsoNipponSteelCorp.v.UnitedStates,458F.3d1345,
1357(Fed.Cir.2006);TaiwanSemiconductorIndustryAssnv.USITC,266F.3d1339,1345(Fed.Cir.
2001).
79
SAA,H.R.Rep.103316,Vol.Iat85152(1994)({T}heCommissionmustexamineother
factorstoensurethatitisnotattributinginjuryfromothersourcestothesubjectimports.);S.Rep.96
249at75(1979)(theCommissionwillconsiderinformationwhichindicatesthatharmiscausedby
factorsotherthanlessthanfairvalueimports.);H.R.Rep.96317at47(1979)(inexaminingthe
overallinjurybeingexperiencedbyadomesticindustry,theITCwilltakeintoaccountevidence
presentedtoitwhichdemonstratesthattheharmattributedbythepetitionertothesubsidizedor
dumpedimportsisattributabletosuchotherfactors;thosefactorsincludethevolumeandpricesof
nonsubsidizedimportsorimportssoldatfairvalue,contractionindemandorchangesinpatternsof
consumption,traderestrictivepracticesofandcompetitionbetweentheforeignanddomestic
producers,developmentsintechnologyandtheexportperformanceandproductivityofthedomestic
industry);accordMittalSteel,542F.3dat877.
80
SAAat85152({T}heCommissionneednotisolatetheinjurycausedbyotherfactorsfrom
injurycausedbyunfairimports.);TaiwanSemiconductorIndustryAssn,266F.3dat1345.({T}he
Commissionneednotisolatetheinjurycausedbyotherfactorsfrominjurycausedbyunfairimports....
Rather,theCommissionmustexamineotherfactorstoensurethatitisnotattributinginjuryfromother
(Continued)
16

byreasonofstandardrequirethatunfairlytradedimportsbetheprincipalcauseofinjury
orcontemplatethatinjuryfromunfairlytradedimportsbeweighedagainstotherfactors,such
asnonsubjectimports,whichmaybecontributingtooverallinjurytoanindustry.81Itisclear
thattheexistenceofinjurycausedbyotherfactorsdoesnotcompelanegative
determination.82
Assessmentofwhethermaterialinjurytothedomesticindustryisbyreasonofsubject
importsdoesnotrequiretheCommissiontoaddressthecausationissueinanyparticularway
aslongastheinjurytothedomesticindustrycanreasonablybeattributedtothesubject
importsandtheCommissionensure{s}thatitisnotattributinginjuryfromothersourcesto
thesubjectimports.8384Indeed,theFederalCircuithasexaminedandaffirmedvarious
Commissionmethodologiesandhasdisavowedrigidadherencetoaspecificformula.85
(Continued)
sourcestothesubjectimports.(emphasisinoriginal));AsociaciondeProductoresdeSalmonyTrucha
deChileAGv.UnitedStates,180F.Supp.2d1360,1375(Ct.IntlTrade2002)({t}heCommissionisnot
requiredtoisolatetheeffectsofsubjectimportsfromotherfactorscontributingtoinjuryormake
brightlinedistinctionsbetweentheeffectsofsubjectimportsandothercauses.);seealsoSoftwood
LumberfromCanada,Inv.Nos.701TA414and731TA928(Remand),USITCPub.3658at10001(Dec.
2003)(Commissionrecognizedthat{i}fanallegedotherfactorisfoundnottohaveorthreatentohave
injuriouseffectstothedomesticindustry,i.e.,itisnotanothercausalfactor,thenthereisnothingto
furtherexamineregardingattributiontoinjury),citingGeraldMetals,132F.3dat722(thestatute
doesnotsuggestthatanimporterofLTFVgoodscanescapecountervailingdutiesbyfindingsome
tangentialorminorcauseunrelatedtotheLTFVgoodsthatcontributedtotheharmfuleffectson
domesticmarketprices.).
81
S.Rep.96249at7475;H.R.Rep.96317at47.
82
SeeNippon,345F.3dat1381(anaffirmativematerialinjurydeterminationunderthestatute
requiresnomorethanasubstantialfactorshowing.Thatis,thedumpingneednotbethesoleor
principalcauseofinjury.).
83
MittalSteel,542F.3dat87778;seealsoid.at873(WhiletheCommissionmaynotenteran
affirmativedeterminationunlessitfindsthatadomesticindustryismateriallyinjuredbyreasonof
subjectimports,theCommissionisnotrequiredtofollowasinglemethodologyformakingthat
determination...{andhas}broaddiscretionwithrespecttoitschoiceofmethodology.)citingUnited
StatesSteelGroupv.UnitedStates,96F.3d1352,1362(Fed.Cir.1996)andS.Rep.96249at75.
84
CommissionerPinkertdoesnotjointhisparagraphorthefollowingthreeparagraphs.He
pointsoutthattheFederalCircuit,inBratsk,444F.3d1369,andMittalSteel,heldthattheCommission
isrequired,incertaincircumstanceswhenconsideringpresentmaterialinjury,toundertakeaparticular
kindofanalysisofnonsubjectimports,albeitwithoutrelianceuponpresumptionsorrigidformulas.
MittalSteelexplainsasfollows:
WhatBratskheldisthatwherecommodityproductsareatissueandfairlytraded,price
competitive,nonsubjectimportsareinthemarket,theCommissionwouldnotfulfill
itsobligationtoconsideranimportantaspectoftheproblemifitfailedtoconsider
whethernonsubjectornonLTFVimportswouldhavereplacedLTFVsubjectimports
duringtheperiodofinvestigationwithoutacontinuingbenefittothedomesticindustry.
444F.3dat1369.Underthosecircumstances,BratskrequirestheCommissionto
considerwhetherreplacementoftheLTFVsubjectimportsmighthaveoccurredduring
(Continued)
17

TheFederalCircuitsdecisionsinGeraldMetals,Bratsk,andMittalSteelallinvolved
casesinwhichtherelevantotherfactorwasthepresenceinthemarketofsignificant
volumesofpricecompetitivenonsubjectimports.TheCommissioninterpretedtheFederal
CircuitsguidanceinBratskasrequiringittoapplyaparticularadditionalmethodology
followingitsfindingofmaterialinjuryincasesinvolvingcommodityproductsandasignificant
marketpresenceofpricecompetitivenonsubjectimports.86Theadditional
replacement/benefittestlookedatwhethernonsubjectimportsmighthavereplacedsubject
importswithoutanybenefittotheU.S.industry.TheCommissionappliedthatspecific
additionaltestinsubsequentcases,includingtheCarbonandCertainAlloySteelWireRodfrom
TrinidadandTobagodeterminationthatunderliestheMittalSteellitigation.
MittalSteelclarifiesthattheCommissionsinterpretationofBratskwastoorigidand
makesclearthattheFederalCircuitdoesnotrequiretheCommissiontoapplyanadditional
testnoranyonespecificmethodology;instead,thecourtrequirestheCommissiontohave
evidenceintherecordtoshowthattheharmoccurredbyreasonoftheLTFVimports,and
requiresthattheCommissionnotattributeinjuryfromnonsubjectimportsorotherfactorsto
subjectimports.87Accordingly,wedonotconsiderourselvesrequiredtoapplythe
replacement/benefittestthatwasincludedinCommissionopinionssubsequenttoBratsk.
TheprogressionofGeraldMetals,Bratsk,andMittalSteelclarifiesthat,incases
involvingcommodityproductswherepricecompetitivenonsubjectimportsareasignificant
factorintheU.S.market,theCourtwillrequiretheCommissiontogivefullconsideration,with
adequateexplanation,tononattributionissueswhenitperformsitscausationanalysis.88
Thequestionofwhetherthematerialinjurythresholdforsubjectimportsissatisfied
notwithstandinganyinjuryfromotherfactorsisfactual,subjecttoreviewunderthesubstantial
(Continued)
theperiodofinvestigation,anditrequirestheCommissiontoprovideanexplanationof
itsconclusionwithrespecttothatfactor.
542F.3dat878.
85
NucorCorp.v.UnitedStates,414F.3d1331,1336,1341(Fed.Cir.2005);seealsoMittalSteel,
542F.3dat879(BratskdidnotreadintotheantidumpingstatuteaProcrusteanformulafor
determiningwhetheradomesticinjurywasbyreasonofsubjectimports.).
86
MittalSteel,542F.3dat87579.
87
MittalSteel,542F.3dat873(quotingfromGeraldMetals,132F.3dat722),87579&n.2
(recognizingtheCommissionsalternativeinterpretationofBratskasaremindertoconductanon
attributionanalysis).
88
Tothatend,aftertheFederalCircuitissueditsdecisioninBratsk,theCommissionbeganto
presentpublishedinformationorsendoutinformationrequestsinfinalphaseinvestigationsto
producersinnonsubjectcountriesthataccountedforsubstantialsharesofU.S.importsofsubject
merchandise(if,infact,therewerelargenonsubjectimportsuppliers).Inordertoprovideamore
completerecordfortheCommissionscausationanalysis,theserequeststypicallyseekinformationon
capacity,production,andshipmentsoftheproductunderinvestigationinthemajorsourcecountries
thatexporttotheUnitedStates.TheCommissionplanstocontinueutilizingpublishedorrequested
informationinfinalphaseinvestigationsinwhichtherearesubstantiallevelsofnonsubjectimports.
18

evidencestandard.89CongresshasdelegatedthisfactualfindingtotheCommissionbecauseof
theagencysinstitutionalexpertiseinresolvinginjuryissues.90
B.
ConditionsofCompetitionandtheBusinessCycle
Thefollowingconditionsofcompetitioninformouranalysisofwhetherthereisa
reasonableindicationofmaterialinjurybyreasonofsubjectimports.
1.
DemandConditions
U.S.demandforNOESdependsondemandforU.S.produceddownstreamproducts,
suchaselectricmotors,lowvoltagetransformers,andgenerators.91NOESaccountsfora
highlyvariableshareofthecostofenduseproducts.NOESisestimatedtoaccountfor2084
percentofthecostofanelectricalmotor,80percentofthecostofatransformer,and20
percentofthecostofagenerator.92U.S.purchasersofNOESareendusers,distributors,and
servicecentersthatperformlaminatingorstampingpriortosellingtheNOESproductstothe
sameendusers.93
Marketparticipantsperceptionsofdemandtrendsweremixed.***indicatedthat
demandhasdecreasedsinceJanuary1,2010,duetolowerdemandfromthemining,
locomotive,andindustrialsegments,butthatNOESwouldresumealongertermtrendof
increasedgrowthinthesesegmentsafterthenext12to18months.94***reportedthat
demandforNOEShasfluctuatedsince2010withnocleartrend.95Importersweredivided
regardingchangesinU.S.demandforNOESduringthePOI.96
89
Weprovideinourrespectivediscussionsofvolume,priceeffects,andimpactafullanalysisof
otherfactorsallegedtohavecausedanymaterialinjuryexperiencedbythedomesticindustry.
90
MittalSteel,542F.3dat873;NipponSteelCorp.,458F.3dat1350,citingU.S.SteelGroup,96
F.3dat1357;S.Rep.96249at75(ThedeterminationoftheITCwithrespecttocausationis...complex
anddifficult,andisamatterforthejudgmentoftheITC.).
91
CRatII16,PRatII10.PetitionerreportedthatnewU.S.DepartmentofEnergyefficiency
requirementsforsmalltransformerswillgointoeffectinJanuary2016andthat,althoughthatsegment
ofthemarketdoesnotaccountforamajorportionofitsbusiness,thoserequirementswilleffectively
eliminateNOESfromthatsegment.CRatII16,n.22,PRatII10,n.22.
92
CRatII16II17,PRatII10.
93
CRatII2&II23,PRatII1&II13;CR/PRatTableII1;Tr.at53(Pfeiffer),63(Konstantinidis).
94
CRatII19,PRatII11.
95
CRatII19,PRatII11.
96
CR/PRatTableII3.ThelargemajorityofimportersindicatedthatU.S.demandforNOES
increased,fluctuated,orremainedunchanged.ImportersthatreportedincreasedU.S.demandfor
NOESattributedtheincreasetovariousreasons,includingrecoveryfromtherecessionin2009andthe
newproductionofelectricvehicles.CRatII19,PRatII11.Importersreportingdecreaseddemand
attributedittoweaknessinthebroadereconomy,producersofdownstreamproductsmoving
productiontoAsiaandMexico,andlowernaturalgasprices,whichledtodecreaseddemandfornon
gaselectricalenergyapplicationsandmadeannealingCRMLmorecosteffective.CRatII19II20,PR
atII11II12.
19

AsmeasuredbyapparentU.S.consumption,demandincreased***percentfrom2010
to2011,beforedecreasing***percentbetween2011and2012.97Overall,itincreasedby***
percentfrom2010to2012.98
SeveralrespondentsarguedthatdemandforNOESsufferedduetocompetitive
pressurefromdomesticallyproducedCRML,whichtheystatehascompetedwithNOESsince
wellbefore2010.99Asdiscussedabove,onlythreeimportersnamedCRMLasasubstitutefor
NOESinlaminations,transformers,andmotors,while***and17importersreportedthatthere
werenosubstitutesforNOES.100Asalsodiscussedabove,thelimitedrecordinthepreliminary
phaseoftheseinvestigationssuggestsatleastsomeinterchangeabilitybetweenNOESand
CRML,althoughthepartieshavepresenteddisparateviewsaboutthedegreeandextentof
overlapinenduses.Inanyfinalphaseoftheseinvestigations,weintendtoexaminewhether
andtowhatextenttheavailabilityofCRMLaffectsU.S.demandforNOES.
2.
SupplyConditions
SourcesofsupplyofNOEStotheU.S.marketduringthePOIincludedthedomestic
industry,subjectimports,andimportsfromnonsubjectsources.101
PetitionerAKSteelandNucoraretheU.S.manufacturersofNOES.102AKSteel
accountedfor***percentoftotaldomesticproductionin2012,whileNucor,whichproduced
CRMLthatmeetsthephysicalandchemicaldescriptionofNOES,accountedfor***percent.103
BothfirmsreportedthatmostoftheiroverallU.S.productionconsistedofproductsotherthan
NOES.104
97
CRatII18&IV9,PRatII11&IV6.ApparentU.S.consumptionofNOESincreasedfrom***
shorttonsin2010to***shorttonsin2011,thendeclinedto***shorttonsin2012;apparentU.S.
consumptionofNOESwas***shorttonsinJanuaryJune2012(interim2012)and***shorttonsin
interim2013.CR/PRatTableIV6.ApparentU.S.consumptionwas***percentlowerininterim2013
thanininterim2012.CRatII18&IV9,PRatII11&IV6.
98
CR/PRatTableC1.
99
E.g.,JapaneseRespondentsPostconferenceBriefat521;ChineseRespondents
PostconferenceBriefat16;TaiwaneseRespondentsPostconferenceResponsetoStaffQuestionsat2
9.TheTaiwaneseRespondentclaimsthatCRMLbeganseriouslytocompetewithNOESmorethan15
yearsagoandthatcompetitionhasacceleratedinrecentyearswiththedevelopmentofmoreadvanced
CRMLproducts.TaiwaneseRespondentsPostconferenceResponsetoStaffQuestionsat2.Chinese
RespondentssimilarlydescribeCRMLasamatureproduct.ChineseRespondentsPostconferenceBrief,
ResponsestoStaffQuestionsat3.
100
CRatII20,PRatII12.
101
CR/PRatTableIV5.
102
CRatIII1III2,PRatIII1.
103
CR/PRatTableIII1.
104
CRatIII3,n.5,PRatIII2,n.5.Specifically,AKSteelreportedthatinitsfacilitieswhereit
producesbothGOESandNOES,***percentofitsproductionin2012consistedofGOES,whilethe
remaining***percentconsistedofNOES.Id.Nucorreportedthat***percentofitsoverallproduction
consistedof***,withtheremaining***percentconsistingofNOES.Id.
20

FormostofthePOI,thedomesticindustrywasthesecondlargestsourceofNOES,
supplying***oftheU.S.marketin2011and2012,butsupplying***oftheU.S.marketin
2010.Thedomesticindustrysshareofapparentconsumption,byquantity,was***percentin
2010,***percentin2011,and***percentin2012.105
CumulatedsubjectimportswerethelargestsuppliersofNOEStotheU.S.marketin
2011and2012.Themarketshareofcumulatedsubjectimportswas,byquantity,***percent
in2010,***percentin2011,and***percentin2012.106
NonsubjectimportshadaverysmallpresenceintheU.S.marketthroughoutthePOI.
Nonsubjectimportsmarketshare,byquantity,was***percentin2010,***percentin2011,
and***percentin2012.107
3.
SubstitutabilityandOtherConditions
Basedontherecordinthepreliminaryphaseoftheseinvestigations,wefindthatthere
isamoderatetohighdegreeofsubstitutabilityamongdomesticallyproducedNOESandNOES
fromallsubjectsources.Asexplainedabove,bothU.S.producersdescribedNOESfromall
sourcesas***interchangeable,whilemostrespondingimportersreportedthatNOESfromthe
varioussourceswasfrequentlyorsometimesinterchangeable.108
Wealsofindthatpriceisatleastamoderatelyimportantfactorinpurchasingdecisions.
Asdescribedabove,whenaskedwhetherdifferencesotherthanpriceareeversignificantto
purchaserschoosingbetweenthedomesticlikeproductandsubjectimportsoramongsubject
imports,bothU.S.producersreportedthatdifferencesotherthanpriceare***significant.109
Responsesfromimportersweremixed,butanappreciablepercentageofimportersreported
105
CR/PRatTableIV6.Thedomesticindustrysshareofapparentconsumption,byquantity,
was***percentininterim2012and***percentininterim2013.Id.
106
CR/PRatTableIV6.Themarketshareofcumulatedsubjectimportswas,byquantity,***
percentininterim2012and***percentininterim2013.Id.
107
CR/PRatTableIV6.Nonsubjectimportsmarketshare,byquantity,was***percentin
interim2012and***percentininterim2013.Id.
108
CRatII24II25,PRatII14&CR/PRatTableII4.PetitionerassertsthatmostNOESsoldin
theU.S.marketiswarrantedtomeetASTMspecificationsand,therefore,ishighlyinterchangeable.CR
atII24,PRatII14.Incontrast,intheirresponsestotheCommissionsquestionnaires,several
importersclaimedthattheyimportedproductsfromsubjectsourcesthatthedomesticindustrydidnot
produce.CRatII26,PRatII14.Forexample,certainimportersclaimedthatcertaingradesofNOES
werenotavailable,orwereonlyavailableinlimitedquantity,fromthedomesticindustry.Id.Some
importersclaimedthatcustomersrequestedNOESfromspecificmills.Id.***statedthatitexportsa
speciallydesignedNOESproductdevelopedtomeetthespecificationsofadedicatedcustomer.Id.;see
alsoCDWsPostconferenceBriefat23.AnimporterlikewisestatedthatsomeofitsNOESproducts
wereproducedtoparticularspecificationsdevelopedbyaspecificproducerofacertaintypeof
electricalvehiclemotor.Id.***statedthatits***isDFARScompliantanddesignedforusebythe
customerwithoutfurtherprocessing.Id.
109
CR/PRatTableII5.Alargemajorityofimportersindicatedthatdifferencesotherthanprice
wereatleastsometimessignificant.Id.
21

thatfactorsotherthanpricewereonly***or***significant.110Severalpurchasersindicated
thatpricewasapertinentconsiderationintheirpurchasingdecisions.111
SeveralpartiesreportedqualificationprocessesforsupplyingNOES,butdisputedthe
extenttowhichtheseprocessesactasabarriertosupplyingNOEStoaparticularcustomer.
Petitionercontendsthat,duetothelimitednumberofNOESsuppliers,thequalificationprocess
isrelativelyeasy,generallyresultinginapprovalwithinamatterofweeksfollowingatrial
shipment.112Severalrespondents,ontheotherhand,describealongerandmoreinvolved
process.113Otherrespondentsdescribelongstandingcustomerrelationships,someofwhich
involveproducingNOEStouniquespecifications,codevelopedbytheNOESproducerandits
customer.114
RawmaterialinputsintheproductionofNOESincludesteelscrap,ferrosilicon,natural
gas,andelectricity.115Rawmaterialcostsrepresentedbetween***and***percentofthe
costsofgoodssold(COGS)forNOESover2010to2012.116U.S.producersaveragecostofraw
materialspershorttonincreasedfrom$***in2010to$***in2011,anddecreasedto$***in
2012;itwaslowerininterim2013($***)thanininterim2012($***).117***.***.118
C.
VolumeofSubjectImports
Section771(7)(C)(i)oftheTariffActprovidesthattheCommissionshallconsider
whetherthevolumeofimportsofthemerchandise,oranyincreaseinthatvolume,eitherin
absolutetermsorrelativetoproductionorconsumptionintheUnitedStates,issignificant.119
110
CR/PRatTableII5.Whenaskedwhetherdifferencesotherthanpriceareeversignificantto
purchaserschoosingbetweenthedomesticlikeproductandsubjectimports,approximately37to60
percentofrespondingimportersreportedthatnonpricefactorswereonly***or***significant.Id.
Whenaskedwhetherdifferencesotherthanpriceareeversignificanttopurchaserschoosingamong
subjectimports,generallybetween30to80percentofrespondingimportersreportedthatnonprice
factorswereonly***or***significant.Id.
111
CRatV48,PRatV9.
112
CRatII23,PRatII14;Tr.at24(Pfeiffer).
113
CRatII24,PRatII14.ChineseRespondentsclaimthatthequalificationprocesstosupply
NOEStocustomersintheUnitedStatestakesonetooneandahalfyears,andthiscreatesasubstantial
barrierfornewvendors.CRatII24,PRatII14;ChineseRespondentsPostconferenceBrief,Responses
toStaffQuestionsat3.SwedishRespondentscontendthatthequalificationprocessesthatitundergoes
foritscustomersismorerigorousthanPetitionerclaims,rangingfromthreemonthstotwoyears,and
thatcustomersdonotwanttoexpendthetimeandexpensetoqualifysuppliersifthereisalreadyan
approvedsource.SwedishRespondentsPostconferenceBrief,ResponsestoStaffQuestionsat31&
exhibit1.ThyssenKruppstatesthatthequalificationprocesstakes12to18months.ThyssenKrupps
PostconferenceBrief,ResponsestoStaffQuestionsat2.
114
SwedishRespondentsPostconferenceBriefat3;CDWsPostconferenceBriefat23.
115
CR/PRatFigureV1.
116
CRatV1,PRatV1.
117
CR/PRatTableVI2.
118
CRatV6,PRatV4.
119
19U.S.C.1677(7)(C)(i).
22

CumulatedsubjectimportsheldasubstantialpresenceintheU.S.marketthroughout
thePOI.Cumulatedsubjectimportsincreasedfrom55,507shorttonsin2010to74,215short
tonsin2011andreached76,006shorttonsin2012.120Asexplainedabove,apparentU.S.
consumptionincreasedoverallby***percentfrom2010to2012.121Thevolumeofcumulated
subjectimportsrosefaster,increasingby36.9percentduringthisperiod.122
Themarketshare(byquantity)ofcumulatedsubjectimportsincreasedfrom***
percentin2010to***percentin2011and***percentin2012.123Thisgaininmarketshare
cameattheexpenseofthedomesticindustry.Thedomesticindustrysmarketsharedecreased
from***percentin2010to***percentin2011and***percentin2012.124Themarketshare
heldbynonsubjectimportsincreasedfrom***percentin2010to***percentin2011,before
decliningslightlyto***percentin2012.125
CumulatedsubjectimportsofNOESwerealsosignificantrelativetodomestic
production.Theratioofcumulatedsubjectimportstodomesticproductionincreasedfrom***
percentin2010to***percentin2011and***percentin2012.126
Forpurposesofthesepreliminarydeterminations,wefindthatthecumulatedvolume
ofsubjectimportsissignificantbothinabsolutetermsandrelativetoconsumptionand
productionintheUnitedStates.
D.
PriceEffectsoftheSubjectImports
Section771(7)(C)(ii)oftheTariffActprovidesthat,inevaluatingthepriceeffectsof
subjectimports,theCommissionshallconsiderwhether
(I)therehasbeensignificantpriceundersellingbytheimportedmerchandiseas
comparedwiththepriceofdomesticlikeproductsoftheUnitedStates,and
(II) the effect of imports of such merchandise otherwise depresses prices to a
significant degree or prevents price increases, which otherwise would have
occurred,toasignificantdegree.127
120
CR/PRatTableIV3.Cumulatedsubjectimportswere41,812shorttonsininterim2012and
26,481shorttonsininterim2013.
121
CR/PRatTableC1.ApparentU.S.consumptionininterim2013was***percentlowerthan
ininterim2012.Id.
122
CR/PRatTableC1.Thevolumeofcumulatedsubjectimportsininterim2013was36.7
percentlowerthanininterim2012.Id.
123
CR/PRatTableIV6.Cumulatedsubjectimportsheld***percentofU.S.marketsharein
interim2012and***percentofmarketshareininterim2013.Id.
124
CR/PRatTableIV6.Thedomesticindustrysmarketsharewas***percentininterim2012
and***percentininterim2013.Id.
125
CR/PRatTableIV6.Nonsubjectimportsheld***percentofU.S.marketshareininterim
2012and***percentofmarketshareininterim2013.Id.
126
CR/PRatTableIV7.Theratiowas***percentininterim2012and***percentininterim
2013.Id.
127
19U.S.C.1677(7)(C)(ii).
23

AsdiscussedinsectionVI.B.3above,therecordinthesepreliminaryphase
investigationsindicatesthatthereisamoderatetohighdegreeofsubstitutabilitybetween
domesticallyproducedNOESandNOESimportedfromsubjectcountriesandthatpriceisat
leastamoderatelyimportantfactorinpurchasingdecisions.128
TheCommissioncollectedquarterlypricingdataoneightNOESproducts.129OneU.S.
producerand17importersprovidedusablepricingdataforsalesoftherequestedproducts,
althoughnotallfirmsreportedpricingforallproductsandallquarters.130
Thepricingdatashowundersellingbycumulatedsubjectimportsin218of296quarterly
pricecomparisons.131Themarginsofundersellingrangedfrom***percent,withtheaverage
marginbeing***percent.132Giventhefrequencyofundersellingandthemagnitudeofthe
undersellingmargins,wefindthepriceundersellingtobesignificantforpurposesofthese
preliminarydeterminations.
PricesforU.S.producedNOESgenerallyincreasedfrom2010to2011,beforedeclining
in2012andinterim2013.133Pricesforfouroutoftheeightpricingproductswerelowerinthe
secondquarterof2013thantheywereatthestartofthePOI.134Pricingdataforthesubject
importsweremorevaried,bothintermsofpricechangesbetweenthefirstandlastquartersof
theperiod,andwithrespecttowhenthehighestorlowestvalueswereobserved.135
128
CR/PRatTablesII4andII5.
Thepricingproductswereasfollows:Product1M19,0.450.50mmthickness,fully
processed,maximumcoreloss2.90W/kg(1.5t;50Hz),600mmormorewide,coated;Product2M22,
0.450.50mmthickness,fullyprocessed,maximumcoreloss3.10W/kg(1.5t;50Hz),600mmormore
wide,coated;Product3M22,0.600.65mmthickness,fullyprocessed,maximumcoreloss2.65W/kg
(1.5t;50Hz),lessthan600mmwide,coated;Product4M36,0.450.50mmthickness,fullyprocessed,
maximumcoreloss3.50W/kg(1.5t;50Hz),600mmormorewide,coated;Product5M36,0.60
0.65mmthickness,fullyprocessed,maximumcoreloss4.10W/kg(1.5t;50Hz),600mmormorewide,
coated,welded;Product6M36,0.450.50mmthickness,fullyprocessed,maximumcoreloss
3.50W/kg(1.5t;50Hz),lessthan600mmwide,coated;Product7M43,0.600.65mmthickness,fully
processed,maximumcoreloss4.35W/kg(1.5t;50Hz),600mmormorewide,coated;andProduct8
M45,0.600.65mmthickness,fullyprocessed,maximumcoreloss4.80W/kg(1.5t;50Hz),600mmor
morewide,coated.CRatV9,PRatV5V6.
130
CRatV9,PRatV6.Reportedpricingproductsrepresented***percentofU.S.shipmentsof
U.S.producedproducts,***percentofshipmentsofsubjectimportsfromChina,***percentof
shipmentsofsubjectimportsfromGermany,***percentofshipmentsofsubjectimportsfromJapan,
***percentofshipmentsofsubjectimportsfromKorea,***percentofshipmentsofsubjectimports
fromSweden,and***percentofshipmentsofsubjectimportsfromTaiwanin2012.CRatV910,PRat
V6.
131
CR/PRatTableV12.
132
CR/PRatTableV12.Petitionerstatedthatitscustomershadtolditthatsubjectimports
wereundersellingitspricesbyapproximately25percentandthatitrespondedbyloweringpricesin
2013.CRatV46,PRat8;Tr.at32(Peterson).
133
CR/PRatTablesV3V10.
134
CR/PRatTablesV3toV10(priceswerelowerattheendofthePOIthanatthestartfor
productsone,three,five,andeight,whilepriceswerehigherforproductstwo,four,six,andseven).
135
CR/PRatTablesV3toV10.
129
24

Therecordinthepreliminaryphaseoftheseinvestigationscontainsevidencethat
subjectimportspreventedpriceincreasesforthedomesticproduct,whichotherwisewould
haveoccurred,toasignificantdegree.OverthePOI,thedomesticindustrysratioofCOGSto
netsaleswashighandincreasedirregularlyfrom***percentin2010to***percentin2012;it
was***percentininterim2012and***percentininterim2013.136Thesedatasupporta
findingthatthedomesticproducerswereunabletoraisetheirpricessufficientlytocoverrising
costsinlightofsignificantcompetitionfromthelowerpricedsubjectimports.
Thereisfurthersupportforourfindingofpricesuppressionintherecordinformation
onlostsalesandlostrevenueexperiencedbythedomesticindustry.Petitionermade***lost
salesallegationstotaling$***andinvolving***shorttonsofNOESand***lostrevenue
allegationstotaling$***andinvolving***shorttonsofNOES.137***purchaserexplicitly
agreedwith***lostsalesallegationsinvolvingatleast$***,and***purchasersagreedwith
***ofthelostrevenueallegationstotalingatleast$***.138Therewerealsonumerous
allegationsthatpurchasersdidnotformallyconfirm,butneverthelesssuggestthatthe
domesticindustrylostsalesduetolowpricedsubjectimports.139
Forpurposesofthesepreliminarydeterminations,wefindthepriceundersellingbythe
subjectimportstobesignificantandalsofindevidencethatthesubstantialvolumeofsubject
importshaspreventedpriceincreases,whichotherwisewouldhaveoccurred,toasignificant
degree.
E.
ImpactoftheSubjectImports140
Section771(7)(C)(iii)oftheTariffActprovidesthattheCommission,inexaminingthe
impactofthesubjectimportsonthedomesticindustry,shallevaluateallrelevanteconomic
factorswhichhaveabearingonthestateoftheindustry.Thesefactorsincludeoutput,sales,
inventories,capacityutilization,marketshare,employment,wages,productivity,profits,cash
flow,returnoninvestment,abilitytoraisecapital,researchanddevelopment,andfactors
affectingdomesticprices.Nosinglefactorisdispositiveandallrelevantfactorsareconsidered
136
CR/PRatTableC1.UnitCOGSrosefrom$***in2010to$***in2011,and$***in2012;it
was$***ininterim2012and$***ininterim2013.136
137
CRatV47,PRatV9.
138
CR/PRatTablesV13,V14.
139
Althoughpurchaser***.CR/PRatTableV14.***.CR/PRatTableV14.Weintendto
seekmoreinformationforanumberofthelostsaleandlostrevenueallegationsinanyfinalphaseof
theseinvestigations,andweencouragethemarketparticipantstosubmitdocumentationoftheir
transactionsthatsupporttheirclaims.
140
Initsnoticeinitiatingtheantidumpingdutyinvestigations,Commerceestimatedantidumping
dutymarginsof244.54percentto407.52forimportsofNOESfromChina,73.74percentto98.84
percentforimportsofNOESfromGermany,88.63percentto204.79percentforimportsofNOESfrom
Japan,16.00percentto68.82percentforimportsofNOESfromKorea,62.17percentto126.72percent
forimportsofNOESfromSweden,and52.23percentto101.51percentforimportsofNOESfrom
Taiwan.CRatI6,PRatI45.
25

withinthecontextofthebusinesscycleandconditionsofcompetitionthataredistinctiveto
theaffectedindustry.
Therecordofthepreliminaryphaseoftheseinvestigationsindicatesthatthedomestic
industrysperformancedeclinedoverthePOIforvirtuallyallfactors.Afterincreasingfrom***
shorttonsin2010to***shorttonsin2011,thedomesticindustrysproductionfellto***
shorttonsin2012,a***percentdeclinefrom2010to2012,andwaslowerininterim2013
(***shorttons)thanininterim2012(***shorttons).141Capacitywasaconstant***shorttons
from2010to2012andwas***shorttonsduringtheinterimperiods.Accordingly,the
domesticindustrysrateofcapacityutilizationincreasedfrom***percentin2010to***
percentin2011,butthenfellto***percentin2012,anoveralldeclineof***percentage
points,andwaslower(***percent)ininterim2013thanininterim2012(***percent).142
From2010to2012,asapparentU.S.consumptionofNOESincreasedby***percent,
thedomesticindustrysU.S.shipmentsofNOESincreasedbyonly***percentfrom***short
tonsin2010to***shorttonsin2012.143ThedomesticindustrysshareofapparentU.S.
consumptionsteadilydecreasedfrom***percentin2010to***percentin2011and***
percentin2012,anoveralldeclineof***percentagepoints,althoughitwashigherininterim
2013(***percent)thanininterim2012(***percent).144
Thenumberofproductionworkers,hoursworked,andwagespaidincreasedfrom2010
to2011,beforedecliningin2012.Theseindicatorswerelowerininterim2013thanininterim
2012.145
Thelargemajorityoffinancialindicatorsshowedpoorordecliningoveralltrendsover
theperiod.Salesrevenuesincreasedfrom$***in2010to$***in2011,beforedecliningto
$***in2012,andwerelowerininterim2013$(***)thanininterim2012$(***).146The
domesticindustrysoperatingincomeimprovedslightlyfroma***in2010toa***in2011,
beforefallingtoa***,andwaslowerininterim2013(***)thanininterim2012(***).147The
domesticindustrysoperatingmarginsfollowedasimilarpatternofimprovingfrom***percent
141
CR/PRatTablesIII2&C1.
CR/PRatTablesIII2&C1.
143
CR/PRatTablesIII4&C1.ApparentU.S.consumptionwas***percentlowerininterim
2013thanininterim2012,andU.S.producersU.S.shipmentsofNOESwere***percentlowerduring
thisperiod.U.S.producersendofperiodinventoriesdeclinedfrom***shorttonsin2010to***short
tonsin2011,andthento***shorttonsin2012.Inventorieswere***shorttonsininterim2012and
***shorttonsininterim2013.CR/PRatTableIII5&C1.
144
CR/PRatTablesIV6&C1.
145
CR/PRatTableIII8.Thenumberofproductionworkerswas***in2010,***in2011,***in
2012,***ininterim2012,and***ininterim2013.Thetotalhoursworkedwere***in2010,***in
2011,***in2012,***ininterim2012,and***ininterim2013.Wagespaidwere$***in2010,$***in
2011,$***in2012,$***ininterim2012,and$***ininterim2013.Workerproductivitywas***short
tons(per1,000hours)in2010,***shorttonsin2011,***shorttons2012,***shorttonsininterim
2012,and***shorttonsininterim2013.CR/PRatTableIII6.
146
CR/PRatTableVI1.
147
CR/PRatTableVI1.
142
26

in2010to***percentin2011,beforedecliningto***percentin2012,andwaslowerin
interim2013(***percent)thanininterim2012(***percent).148
Asdiscussedabove,wehavefoundthevolumeofcumulatedsubjectimportsandthe
marketshareofthoseimportstohavebeensignificantoverthePOI,thattheseimports
significantlyundersoldthedomesticlikeproduct,andthatthereisevidenceofsignificantprice
suppressionbythesubjectimports.Thedomesticindustrysoperatingincomeandmarket
sharedeclinedfrom2010to2012,despiteanincreaseindemandandunusedcapacityover
thatperiod.149Virtuallyallofthedomesticindustryseconomicindicatorswerelowerin
interim2013thanininterim2012.Consequently,wefind,forpurposesofthepreliminary
phaseoftheseinvestigations,thatthereisareasonableindicationthatthesignificantvolume
oflowpricedsubjectimportshadasignificantimpactonthedomesticindustry.150
Wehavealsoconsideredtheroleofotherfactorsinourassessmentoftheimpactofthe
subjectimports.Asdiscussedabove,nonsubjectimportsdidnothaveasignificantpresencein
theU.S.marketthroughoutthePOI.151Accordingly,wedonotfindtherelativelysmallvolume
ofnonsubjectimportstobeacauseofthedifficultiesexperiencedbythedomesticindustry.152
Respondentpartiesarguethatthedomesticindustrysconditioniscausedbyfactors
otherthansubjectimports,includingvolumeandpricepressuresduetocompetitionbetween
NOESanddomesticallyproducedCRML,thedeclineindemandforNOESintheU.S.market
sinceJuly2012,andthelimitednumberofdomesticNOESsuppliers.153Thereislimited
148
CR/PRatTableVI1.Thedomesticindustryscapitalexpendituresdeclinedfrom$***in2010
to$***in2012andwerelowerininterim2013($***)thanininterim2012($***).CR/PRatTableVI4.
149
Thedomesticindustrysoperatingincomefellby***percent,anditsmarketsharefellby***
percentagepointsfrom2010to2012,whileapparentU.S.consumptionofNOESincreasedby***
percentduringthisperiod.CR/PRatTableC1.
150
Respondentsarguethatcompetitionbetweenthedomesticlikeproductandsubjectimports
isattenuatedbecausecertainsubjectproducersprovidespecializedproductorfocusonlongstanding
customerrelationships.Theythusassertthatanydifficultiesthedomesticindustryisexperiencing
cannotbecausedbysubjectimports.E.g.,JapaneseRespondentsPostconferenceBriefat523,
ThyssenKruppsPostconferenceBriefat311,CDWsPostconferenceBriefat15;ChineseRespondents
PostconferenceBriefat56;SwedishRespondentsPostconferenceBriefat1724;Taiwanese
RespondentsPostconferenceBriefat23.Inanyfinalphaseoftheseinvestigationswewillissue
purchasersquestionnaires,thedatafromwhichwillpermitustoevaluaterespondentsargumentmore
meaningfullythanispossibleonthecurrentrecord.
151
Asdiscussedearlier,themarketshareheldbynonsubjectimportswas***percentin2010,
***percentin2011,***percentin2012,***percentininterim2012,and***percentininterim2013.
CR/PRatTableIV8.
152
Basedontherecordevidenceinthepreliminaryphaseoftheseinvestigations,Commissioner
Pinkertfindsthatpricecompetitive,nonsubjectimportswerenotasignificantfactorintheU.S.market
forNOESduringtheperiodofinvestigation.CR/PRatTableC1.NonsubjectimportsshareoftheU.S.
marketwas***percentin2010,***percentin2011,***percentin2012,***percentininterim2012,
and***percentininterim2013.Id.
153
E.g.,JapaneseRespondentsPostconferenceBriefat523,ThyssenKruppsPostconference
Briefat311,CDWsPostconferenceBriefat15;ChineseRespondentsPostconferenceBriefat56;
(Continued)
27

informationintherecordofthesepreliminaryphaseinvestigationstopermitustoassessthe
impactoftheseallegedotherfactors.Basedontherecordbeforeus,wecannotconcludethat
thesefactorsindividuallyortogetheramounttoclearandconvincingevidenceofnomaterial
injurytothedomesticindustrybyreasonofcumulatedsubjectimports.Weintendtoexamine
thosefactorsandtheireffectonthedomesticindustryinanyfinalphaseinvestigations.
Forpurposesofthesepreliminarydeterminations,weconcludethatthecumulated
subjectimportshavehadasignificantadverseimpactonthedomesticindustry.
VII.
Conclusion
Forthereasonsstatedabove,wedeterminethatthereisareasonableindicationthatan
industryintheUnitedStatesismateriallyinjuredbyreasonofsubjectimportsofNOESfrom
China,Germany,Japan,Korea,Sweden,andTaiwanthatareallegedlysoldintheUnitedStates
atlessthanfairvalueandallegedlysubsidizedsubjectimportsofGOESfromChina,Korea,and
Taiwan.
(Continued)
SwedishRespondentsPostconferenceBriefat1724;TaiwaneseRespondentsPostconferenceBriefat
23.
28
PARTI: INTRODUCTION
BACKGROUND
TheseinvestigationsresultfromapetitionfiledwiththeU.S.DepartmentofCommerce
(Commerce)andtheU.S.InternationalTradeCommission(USITCorCommission)byAK
SteelCorp.,WestChester,Ohio,onSeptember30,2013,allegingthatanindustryintheUnited
Statesismateriallyinjuredandthreatenedwithmaterialinjurybyreasonofsubsidizedimports
ofnonorientedelectricalsteel(NOES)1fromChina,Korea,andTaiwanandlessthanfair
value(LTFV)importsfromChina,Germany,Japan,Korea,SwedenandTaiwan.Thefollowing
tabulationprovidesinformationrelatingtothebackgroundoftheseinvestigations.23
Effective date
September 30, 2013
November 6, 2013
November 14, 2013
November 18, 2013
December 2, 2013
December 2, 2013
December 9, 2013
Action
Petition filed with Commerce and the Commission;
institution of Commission investigations (78 FR 62660,
October 22, 2013)
Commissions conference
Commerces notice of initiation of countervailing duty
investigations (78 FR 68412, November 14, 2013)
Commerces notice of initiation of antidumping
investigations (78 FR 69041, November 18, 2013)
Commissions vote
Commissions determination
Commissions views
STATUTORYCRITERIAANDORGANIZATIONOFTHEREPORT
Statutorycriteria
Section771(7)(B)oftheTariffActof1930(theAct)(19U.S.C.1677(7)(B))provides
thatinmakingitsdeterminationsofinjurytoanindustryintheUnitedStates,theCommission
shallconsider(I)thevolumeofimportsofthesubjectmerchandise,(II)the
effectofimportsofthatmerchandiseonpricesintheUnitedStatesfor
SeethesectionentitledTheSubjectMerchandiseinPartIofthisreportforacomplete
descriptionofthemerchandisesubjecttotheseinvestigations.
2
PertinentFederalRegisternoticesarereferencedinapp.A,andmaybefoundattheCommissions
website(www.usitc.gov).
3
Alistofwitnessesthatappearedattheconferenceispresentedinapp.Bofthisreport.
I1
domesticlikeproducts,and(III)theimpactofimportsofsuch
merchandiseondomesticproducersofdomesticlikeproducts,butonlyin
thecontextofproductionoperationswithintheUnitedStates;and...
mayconsidersuchothereconomicfactorsasarerelevanttothe
determinationregardingwhetherthereismaterialinjurybyreasonof
imports.
Section771(7)(C)oftheAct(19U.S.C.1677(7)(C))furtherprovidesthat
Inevaluatingthevolumeofimportsofmerchandise,theCommissionshall
considerwhetherthevolumeofimportsofthemerchandise,orany
increaseinthatvolume,eitherinabsolutetermsorrelativetoproduction
orconsumptionintheUnitedStatesissignificant.
...
Inevaluatingtheeffectofimportsofsuchmerchandiseonprices,the
Commissionshallconsiderwhether...(I)therehasbeensignificantprice
undersellingbytheimportedmerchandiseascomparedwiththepriceof
domesticlikeproductsoftheUnitedStates,and(II)theeffectofimports
ofsuchmerchandiseotherwisedepressespricestoasignificantdegreeor
preventspriceincreases,whichotherwisewouldhaveoccurred,toa
significantdegree.
...
Inexaminingtheimpactrequiredtobeconsideredundersubparagraph
(B)(i)(III),theCommissionshallevaluate(withinthecontextofthe
businesscycleandconditionsofcompetitionthataredistinctivetothe
affectedindustry)allrelevanteconomicfactorswhichhaveabearingon
thestateoftheindustryintheUnitedStates,including,butnotlimitedto
...(I)actualandpotentialdeclineinoutput,sales,marketshare,profits,
productivity,returnoninvestments,andutilizationofcapacity,(II)factors
affectingdomesticprices,(III)actualandpotentialnegativeeffectson
cashflow,inventories,employment,wages,growth,abilitytoraise
capital,andinvestment,(IV)actualandpotentialnegativeeffectsonthe
existingdevelopmentandproductioneffortsofthedomesticindustry,
includingeffortstodevelopaderivativeormoreadvancedversionofthe
domesticlikeproduct,and(V)in{anantidumpinginvestigation},the
magnitudeofthemarginofdumping.
Organizationofreport
PartIofthisreportpresentsinformationonthesubjectmerchandise,allegedsubsidy
programs,dumpingmargins,domesticlikeproduct,andthedomesticindustry.PartIIofthis
reportpresentsinformationonconditionsofcompetitionandotherrelevanteconomicfactors.
PartIIIpresentsinformationontheconditionoftheU.S.industry,includingdataoncapacity,
I2
production,shipments,inventories,andemployment.PartsIVandVpresentthevolumeof
subjectimportsandpricingofdomesticandimportedproducts,respectively.PartVIpresents
informationonthefinancialexperienceofU.S.firms.PartVIIpresentsthestatutory
requirementsandinformationobtainedforuseintheCommissionsconsiderationofthe
questionofthreatofmaterialinjuryaswellasinformationregardingnonsubjectcountries.
MARKETSUMMARY
NOESistypicallyusedintheproductionoflargeandsmallmotors,generators,lighting
ballasts,andignitioncoils.TheCommissionreceivedU.S.producerquestionnairesfromtwo
firms,AKSteelandNucor,withAKSteelaccountingforthevastmajority(***percent)ofNOES
productionintheUnitedStatesin2012.LeadingproducersofNOESoutsidetheUnitedStates
includeBaoshanIron&SteelCo.,Ltd.(Baosteel)andAngangSteelCompanyLimited
(Angang)ofChina;ArcelorMittalEisenhttenstadtGmbH(ArcelorMittalGermany),C.D.
WalzholzKG(CDW),andThyssenKruppSteelEuropeAG(ThyssenKrupp)ofGermany;JFE
SteelCorporation(JFESteel)andNipponSteel&SumitomoMetalCorporation(Nippon
Steel)ofJapan;PohangIronandSteelCompany(POSCO)ofKorea;SurahammarsBruksAB
(Surahammars)ofSweden;andChinaSteelCorporation(ChinaSteel)ofTaiwan.The
leadingU.S.importersofNOESinclude:BaoAmerica(China);CDWAmericaandThyssenKrupp
Europe(Germany);Kanematsu(Japan);POSCOAmerica(Korea);CogentPower(Sweden);and
Metallia(Taiwan).
ApparentU.S.consumptionofNOEStotaledapproximately***shorttons***in2012.
U.S.producersU.S.shipmentsofNOEStotaled***shorttons***in2012,andaccountedfor
***percentofapparentU.S.consumptionbyquantityand***percentbyvalue.U.S.imports
fromsubjectsourcestotaled76,006shorttons($90.7million)in2012andaccountedfor***
percentofapparentU.S.consumptionbyquantityand***percentbyvalue.U.S.importsfrom
nonsubjectsourcestotaled6,242shorttons($8.1million)in2012andaccountedfor***
percentofapparentU.S.consumptionbyquantityand***percentbyvalue.
SUMMARYDATAANDDATASOURCES
AsummaryofdatacollectedintheseinvestigationsispresentedinappendixC,tableC
1.Exceptasnoted,U.S.industrydataarebasedonquestionnaireresponsesoftwofirmsthat
accountedforalloftheU.S.productionofNOESduring2012andU.S.importdataarebasedon
theofficialCommercestatisticsandquestionnaireresponsesfrom25companies,representing
87.4percentoftotalsubjectimports(76.2percentofimportsfromChina,108.5percentof
importsfromGermany,71.8percentofimportsfromJapan,99.3percentofimportsfrom
I3
Korea,99.2percentofimportsfromSweden,and90.1percentofimportsfromTaiwan)in
2012.4
PREVIOUSANDRELATEDINVESTIGATIONS
NOES,asdefinedinthescopeoftheseinvestigations,hasnotbeenthesubjectofany
priorcountervailingorantidumpingdutyinvestigationsintheUnitedStates;however,the
Commissionhasconductedpriorinvestigationsoncoldrolledsteelproductscontainingupto
2.25percentsilicon.5
NATUREANDEXTENTOFALLEGEDSUBSIDIESANDSALESATLTFV
Allegedsubsidies
OnNovember14,2013,CommercepublishedanoticeintheFederalRegisterofthe
initiationofitscountervailingdutyinvestigationonNOESfromChina,Korea,andTaiwan.Based
onCommercesreviewofthepetitions,Commercefoundthattherewassufficientinformation
toinitiateaCVDinvestigationon30allegedprogramsinChina,17allegedprogramsinKorea,
and6allegedprogramsinTaiwan.6
AllegedsalesatLTFV
OnNovember18,2013,CommercepublishedanoticeintheFederalRegisterofthe
initiationofitsantidumpingdutyinvestigationsonNOESfromChina,Germany,Korea,Japan,
SwedenandTaiwan.7Commercehasinitiatedantidumpingdutyinvestigationsbasedon
estimateddumpingmarginsof244.54percentto407.52percentforNOESfromChina,73.74
percentto98.84percentforNOESfromGermany,88.63percentto204.79percentforNOES
CoveragewascalculatedbasedonofficialCommerceimportstatistics(subheadings7225.19.00
7226.19.10,and7226.19.90oftheHarmonizedTariffScheduleoftheUnitedStates(HTSUS)compared
tothequantityofimports,inshorttons,reportedinquestionnairedatain2012.OfficialCommerce
statisticsmaycontainproductsthatareexcludedbythescopeoftheseinvestigationssiliconelectrical
steelcontaining0.6percentormore,butlessthan1.25percentofsilicon.
5
CertainColdRolledSteelProductsfromArgentina,Brazil,Japan,Russia,SouthAfrica,andThailand,
Inv.Nos.701TA393and731TA829830,833834,836,and838(Final),USITCPublication3283,
March,2000.CertainColdRolledSteelProductsfromAustralia,India,Japan,Sweden,andThailand,Inv.
Nos.731TA965,971972,979,and981(Final),USITCPublication3536,September2002.
6
NonorientedElectricalSteelfromThePeoplesRepublicofChina,theRepublicofKorea,and
Taiwan:InitiationofCountervailingDutyInvestigations,78FR68412,November14,2013.
7
NonorientedElectricalSteelfromThePeoplesRepublicofChina,Germany,Japan,theRepublicof
Korea,SwedenandTaiwan:InitiationofAntidumpingInvestigations,78FR69041,November18,2013.
I4
fromJapan,16.00percentto68.82percentforNOESfromKorea,62.17percentto126.72
percentforNOESfromSweden,and52.23percentto101.51percentforNOESfromTaiwan.
THESUBJECTMERCHANDISE
Commercesscope8
Commercehasdefinedthescopeoftheseinvestigationsasfollows:9
Themerchandisesubjecttotheseinvestigationsconsistsofnonoriented
electricalsteel(NOES),whichincludescoldrolled,flatrolled,alloysteel
products,whetherornotincoils,regardlessofwidth,havinganactual
thicknessof0.20mmormore,inwhichthecorelossissubstantiallyequal
inanydirectionofmagnetizationintheplaneofthematerial.Theterm
substantiallyequalinthepriorsentencemeansthatthecrossgrain
directionofcorelossisnomorethan1.5timesthestraightgraindirection
(i.e.,therollingdirection)ofcoreloss.NOEShasamagneticpermeability
thatdoesnotexceed1.65Teslawhentestedatafieldof800A/m
(equivalentto10Oesteds)along(i.e.,parallelto)therollingdirectionof
thesheet(i.e.,B800value).NOEScontainsbyweightatleast1.25percent
ofsiliconbutlessthan3.5percentofsilicon,notmorethan0.08percent
ofcarbon,andnotmorethan1.5percentofaluminum.
NOESissubjecttotheseinvestigationswhetheritisfullyprocessed(fully
annealedtodevelopfinalmagneticproperties)orsemiprocessed
(finishedtofinalthicknessandphysicalformbutnotfullyannealedto
developfinalmagneticproperties);whetherornotitiscoated(e.g.,with
enamel,varnish,naturaloxidesurface,chemicallytreatedorphosphate
surface,orothernonmetallicmaterials).FullyprocessedNOESistypically
madetotherequirementsofASTMspecificationA677,JISspecificationC
2552,and/orIECspecification6040484.SemiprocessedNOESis
typicallymadetotherequirementsofASTMspecificationA683.However,
OnNovember22,2013,Petitioner(AKSteel)requestedthatCommercerevisethescopelanguage
todefinemorepreciselytheintendedscopeoftheinvestigationstocoversubjectimportsofNOESand
toavoidcoveringcoldrolledmotorlaminationelectricalsteel.PetitionAmendmentToClarifythe
ProposedScopeDefinition,November22,2013.
9
NonorientedElectricalSteelfromThePeoplesRepublicofChina,theRepublicofKorea,and
Taiwan:InitiationofCountervailingDutyInvestigations,78FR68412,November14,2013.Nonoriented
ElectricalSteelfromThePeoplesRepublicofChina,Germany,Japan,theRepublicofKorea,Swedenand
Taiwan:InitiationofAntidumpingInvestigations,78FR69041,November18,2013.
I5
thescopeoftheseinvestigationsisnotlimitedtomerchandisemeeting
thespecificationsnotedabove.
NOESissometimesreferredtoascoldrollednonorientedelectricalsteel
(CRNO),nongrainoriented(NGO),nonoriented(NO),orcoldrollednon
grainoriented(CRNGO).Thesetermsareinterchangeable.
Tarifftreatment
BaseduponthescopesetforthbytheDepartmentofCommerce,informationavailable
totheCommissionindicatesthattheproductssubjecttothepetitionsareclassifiablein
subheadings7225.19.007226.19.10,and7226.19.90oftheHarmonizedTariffScheduleofthe
UnitedStates(HTS).Certainproductssubjecttothesepetitionsmayalsobeimportedunder
statisticalreportingnumbers7225.50.8085,7225.99.0090,7226.92.5000,7226.92.7050,
7226.92.8050,and7226.99.0180.10AlthoughHTSUSsubheadingsareprovidedforconvenience
andcustomspurposes,thewrittendescriptionofthescopeisdispositive.
THEPRODUCT
Theproductcoveredbytheseinvestigations,NOES,isaflatrolled,alloysteelproduct
thatisusedtomanufacturelaminationsthatareassembledinstackstoproducemagneticcores
foralternatingcurrentelectricalapparatus.NOEShasdesirablemagneticpropertiesthatare
similarinalldirections(nonoriented),incontrasttograinorientedelectricalsteel(GOES),
whichhassuperiormagneticpropertiesinthelengthwisedirectionofthesheet,butless
favorablepropertiesinotherdirections.Thus,NOESisusedprimarilytoproducelaminations
forwhichthedirectionofthemagneticfluxintheapparatusisconstantlychanging,suchasfor
rotatingmachinerysuchasmotorsandgenerators,whereasGOESisusedprimarilyinstatic
equipment,suchastransformers,forwhichthelaminationscanbeproducedinsuchawayas
totakeadvantageofthefavorabledirectionalityofthesteel.NOESisalsousedinsmallstatic
apparatus,suchassmall,lowvoltagetransformersandlightingballasts,ifthehighercostof
GOEScannotbejustifiedbypotentialsavingsinimprovedenergyefficiency.
NOESissoldineithersheetorstripform,eitherincoilsorinstraightlengths.Twotypes
ofNOESareproduced:fullyprocessedNOES,whichisfinalannealedbytheproducer;and
semiprocessedNOES,which,althoughitisannealedbytheproducer,mustbeannealedonce
againbytheconsumerafterbeingpunchedorotherwiseformedintolaminationsinorderto
achieveitspotentialmagneticproperties.11BothdomesticandimportedNOESareproducedin
10
ForeachoftheseHTSprovisions,thegeneralornormaltraderelationsrateofdutyisfree.
Theprocessesofflattening,punchingorshearingNOESintoindividuallaminationsintroduces
strainswithinthesteelthatareharmfultomagneticproperties.Annealingofthelaminationsremoves
thestrainsandachievesthepotentialmagneticproperties.
11
I6
compliancewithspecificationsissuedbyASTMInternational(ASTM),12orproprietaryor
internationalspecifications.13
Asdefinedbythescope,NOESisproducedofsteelthatisalloyedwith1.25percentor
moreofsilicon,withaluminumusuallyaddedinlesseramounts.Bothsiliconandaluminum
increasetheelectricalresistivityofsteel,resultinginlowerlossofenergyinfinishedmotorsor
apparatusproducedusingNOES.
Manufacturingprocesses14
TheproductionofNOESbeginswiththemeltingofsteelineitheranelectricarcfurnace
orabasicoxygenfurnace.15Moltensteelistransferredinaladlewhereotherproceduressuch
asargonoxygenrefining,ladlemetallurgytreatment,andvacuumdegassingmaybeemployed.
Thesestepsrefinethechemistryofthesteelbyreducingundesirablecontaminants.Alloys
includingsiliconandaluminumareadded.Thesteelisthencontinuouslycastintoslabs,which
arerolledonacontinuoushotstripmilltoproducehotrolledcoils.Allsubsequentprocessingis
doneoncontinuousprocessinglinesforwhichthecoilsareuncoiled,passedthroughthe
processinglinesandrecoiledafterprocessing.Thefirststepofcoilprocessingisannealingand
cleaning.Next,coilsarerolledtoorderedthicknessonacoldrollingmill.16Next,coilsare
annealedforthefinaltimeonacontinuousannealinglineusingacontrolled,decarburizing
atmosphereandprovidedwithatightlyadherentsurfaceoxidethatservestoprevent
laminationsfromstickingtooneanotherandtoincreaseelectricalresistancebetween
laminations.FullyprocessedNOESisusuallyprovidedwithanappliedcoating,called
coreplate,tofurtherincreaseelectricalresistancebetweenlaminations.Finally,coilsmaybe
slittoorderedwidth.
Accordingtopetitioner,subjectforeignproducersinChina,Germany,Japan,Korea,
Sweden,andTaiwangenerallyusesimilarprocessestoproduceNOES.17AKSteel,the
petitioner,usesthesamemelting,casting,andhotrollingequipmentthatisusedtoproduce
NOEStoproduceotherproducts,includingstainlesssteel,grainorientedelectricalsteeland
carbonsteel.AKSteelscoilprocessingequipmentforNOESisseparatefromitsfacilitiesfor
otherproductsandisusedexclusivelyforNOES.18
12
SpecificationASTMA677coversfullyprocessedtypesofNOESandASTMA683covers
semiprocessedtypes.BothspecifypropertiesforNOESofthecommonlyproducedthicknessesof0.0185
inchesand0.025inches.A677alsospecifiespropertiesfor0.014inchthickmaterial.
13
InternationalstandardsareverysimilartoASTMstandards.Conferencetranscript,p.71(Schoen).
14
ThedescriptionofthemanufacturingprocessforNOESisbasedontestimonyattheStaff
Conference.Conferencetranscript,pp.2122(Petersen).
15
PetitionerAKSteelproducesNOESinanelectricarcfurnace,whereassomeoftheproducersin
subjectcountriesusebasicoxygenfurnaces.
16
Insomecases,toproduceverythinproduct,coilsmaybecoldrolledtoanintermediatethickness,
annealedandcoldrolledtotheorderedthickness.
17
Conferencetranscript,p.22.(Petersen)
18
Conferencetranscript,p.18.(Petersen).
I7
***.19NOESisnotnormallytemperrolled.
DescriptionofCRML
Coldrolledmagneticlaminationqualitysteel(CRML)isasteelsheetproductthat,like
NOES,isusedtoproducelaminationsforelectricalapparatus.20LikeNOES,CRMLisnon
oriented,thatis,ithassimilarmagneticpropertiesinalldirections.CRMLwasdevelopedasan
improvedqualityofcoldrolledsteeltoofferalowercostalternativetoNOESformagnetic
laminations.ThemarketforCRMLismuchlargerthanthatforNOES.21CRMLisproducedby
producersofcoldrolledsteelsheet,usingthesameequipmentusedtoproducethatproduct.
NOESandCRMLbothareproducedfromsteelcontainingsignificantamountsofsilicon,
whichincreasestheelectricalresistivityofthesteelandresultsinlowerenergylossesin
magneticlaminations.NOEScontainsover1.25percentsiliconandgenerallyabout2percent
silicon,dependingupongrade.CRMLcontaininglessthan1.25percentsiliconisexcludedfrom
thescopeoftheseinvestigations.ThemagneticpropertiesofCRMLaredevelopedasaresultof
heavytempermillextensionrollingattheproducingmillfollowedbydecarburizingannealof
thestampedlaminationsbythecustomer.NOES,incontrast,isnottemperrolledafteritsfinal
annealingprocessatthemill.LaminationsproducedofCRML,likethoseproducedofsemi
processedNOES,areannealedbythecustomerinordertodeveloptheirpotentialmagnetic
properties.FullyprocessedNOESisusuallycoatedwithaninsulatingcoatingattheproducing
millafterannealing,andlaminationsareusedasstamped,notannealedafterstamping.
CRMLisproducedfromsteelthathasbeenrefinedtoalowcarboncontent,through
vacuumorotherprocessing,followedbycontinuouscasting,hotrolling,pickling,coldrolling,
annealing,andtemperrolling.22Theannealingstepiscommonlyperformedoncoilsinbatch
annealingfurnacesratherthanbyuncoilingthestripandpassingitthroughacontinuous
furnaceasisdoneforNOES,althoughcontinuousannealingmaybeusedbysomeproducers.
Fortemperrollingafterannealing,highextensionsareused(incomparisontorelativelylow
extensionsusedforconventionalcoldrolledsteelsheet.)23
19
Staffphonenoteswith***,November14,2013.
CRMLwasearliernamedcoldrolledmotorlaminationsheet,butwasrenamedbyASTMas
coldrolledmagneticlaminationqualitysteel,toreflectmoregeneralapplications.Theacronym
CRMLisusedgenerallytorefertoeithermotorlaminationsheetormagneticlaminationsheetand
thereisnointendeddistinctionbetweenthetwo.U.S.SteelFactsandFigures,U.S.SteelColdRolled
MagneticLaminationQualitySteel,p.9.
21
AccordingtoJapaneserespondents,CRMLconsumptionisordersofmagnitudeoverNOES
consumption.Japaneserespondentspostconferencebrief,p.9.Accordingtoestimatesby***.
Japaneserespondentspostconferencebrief,Exhibit5,p.6.
22
ASTMA726Paragraph5.2.Seealso,U.S.SteelFactsandFigures,U.S.SteelColdRolledMagnetic
LaminationQualitySteel,p.9.
23
ASTMA726Paragraph5.2.1.Specialemphasismaybeplacedonhighextensions(2to10%)
duringthetemperrollafterannealing.Seealso,JapaneserespondentsExhibit5,***Seealso,U.S.
(continued...)
20
I8
DOMESTICLIKEPRODUCTISSUES
TheCommissionsdecisionregardingtheappropriatedomesticproduct(s)thatarelike
thesubjectimportedproductisbasedonanumberoffactorsincluding:(1)physical
characteristicsanduses;(2)commonmanufacturingfacilitiesandproductionemployees;(3)
interchangeability;(4)customerandproducerperceptions;(5)channelsofdistribution;and(6)
price.Informationregardingthesefactorsisdiscussedbelow.
Thepetitionerarguesthatthedomesticlikeproductshouldbedefinedascoextensive
withthescopeoftheinvestigationsandthatthedomesticlikeproductincludeallNOESinthe
proposedscopeoftheinvestigations.24RespondentsChinaSteelandBaosteelarguethatthe
domesticlikeproductintheseinvestigationsshouldincludebothNOESandCRML.25
PhysicalCharacteristicsandUses
PetitionerarguesthatNOESandCRMLhavedifferentchemistries,notingthatthescope
oftheinvestigationsdefinessemiprocessedandfullyprocessedNOEStohaveaminimum
siliconcontentof1.25percent,whiletheASTMspecificationforfullyprocessedCRMLlimitsthe
siliconcontenttoamaximumof1percentandtheASTMspecificationforsemiprocessedCRML
doesnotindicateeitheraminimumormaximumsiliconcontent.Petitioneralsocontendsthat
becausesiliconistheprimarydriverofthemagneticpropertiesofironsiliconalloysteel,NOES
achievessuperiormagneticpropertiesandhasfarlowercorelossesthanCRML.26
ChinaSteelmaintainsthatwhileNOESachievesitsmagneticpropertiesprimarilyby
meansofhighersiliconcontent,CRMLisabletoachievesimilarpropertiesbymeansofnormal
coldrollingwithrevisedchemistryfollowedbyfinalannealingbythecustomer.27Accordingto
testimonyatthestaffconference,postannealing,CRMLcanprovideequivalentmaximumcore
lossvaluestoNOESforeachoftheeightpricingproductsspecifiedbytheCommission.28
(continued)
SteelFactsandFigures,U.S.SteelColdRolledMagneticLaminationQualitySteel,p.10,CRlamination
steelisproducedwithtempermillextensionsofasmuchastentimestheextensionsappliedtoregular
coldrolledsheet.
24
Petitionerspostconferencebrief,p.3.Petitioneralsoarguesthatthereisacleardividingline
betweenNOESandgrainorientedelectricalsteel(GOES).Petitionerspostconferencebrief,pp.67.
However,nopartieshavearguedthatthedomesticlikeproductshouldincludeGOES.Forthepurposes
ofthesepreliminaryinvestigations,Japaneserespondentsagreetoacceptthelikeproductdefinition
proposedbythePetitioner,butarguethattheCommissionwillneedtoexaminedomesticlikeproduct
issuesconcerningthecompetitiverelationshipbetweenNOESandCRMLinanyfinalphaseofthese
investigations.Japaneserespondentspostconferencebrief,p.2.
25
ChinaSteelspostconferencebrief,p.3.Baoshanspostconferencebrief,p.1.
26
Maximumcorelossisameasureoftheamountofcurrentthatiswasted,asheat,whenthe
electricalcurrentpassesthroughthesteel.Petitionerspostconferencebrief,pp.78.
27
ChinaSteelspostconferencebrief,p.5.
28
Conferencetranscript,pp.9495(Weinstein).
I9
BaosteelarguesthatNOESandCRMLarebothcoldrolledsteelproductsthatinpreviouscases
havebeenconsideredpartofthesamelikeproduct.29
PetitionermaintainsthatbecausetherearedifferentmodesofproductionforNOESand
CRML,eachhavesubstantiallydifferentsurfaces.30Withregardtotestingprotocols,Petitioner
arguesthatASTMrequiresthatNOESbemuchmoreextensivelytestedandcertifiedthan
CRML,whichresultsinasignificantlyhighercostofcomplianceandqualityassurance.31
Interchangeability
PetitionercontendsthatbecauseCRMLislessefficientthanNOES,CRMLcouldonly
serveasasubstituteforNOESinlowvoltage,lowefficiencymotorswherehighefficiencyisnot
required.32RespondentsChinaSteelandBaosteelarguethatCRMLisinterchangeablewith
NOESforabroadrangeofapplications.33
Channelsofdistribution
Petitionercontendsthatbecauseoftheirdifferentphysicalcharacteristicsandprices,
CRMLandNOESaregenerallysoldindistinctmarketsegments.Petitionerarguesthat
substantiallyallofAKSteelsNOESproductionandvirtuallyall,ifnotall,ofthesubjectimports
arefullyprocessedNOES.Incontrast,petitionersubmitsthatCRMListypicallynotsoldfully
processed.34ChinaSteelandBaosteelcontendthatbothNOESandCRMLaresoldthrough
similarchannelsofdistributionbysteelmanufacturerstoendusersand,insomecases,to
distributors.35
Customerandproducerperceptions
Petitionerarguesthatbecauseoftheirdifferentphysicalcharacteristics,uses,and
productionprocesses,producersandcustomersperceiveNOESandCRMLasdistinct
29
Baoshanspostconferencebrief,p.1.
PetitionernotesthatallNOES,whetherfullyprocessedorsemiprocessed,hasasmoothsurface
finishandathin,tightlyadherentsurfaceoxidewhichhassufficientinsulatingabilitiesandthatNOESis
commonlyappliedwithanadditionalcoatingforhigherlevelsofinsulatingability.Petitionernotesthat
ASTMforCRMLdictatesaroughenedsurfacetextureachievedbyrollingonmillsthathavebeen
roughenedbymechanical,chemical,orelectricalmeansandaddsthatthatCRMLdoesnothaveeithera
naturalorappliedinsulationcoatings.Petitionerspostconferencebrief,p.8.
31
Petitionerspostconferencebrief,p.9.
32
33
34
PetitionerarguesthatCRMLssemiprocessedsheetcannotbesubstitutedforfullyprocessed
NOES.Petitionerspostconferencebrief,p.10.
35
30
I10
products.36RespondentsChinaSteelandBaosteelcontendthatcustomerandproducer
perceptionsofCRMLandNOESaresimilar.37
Commonmanufacturingfacilitiesandproductionemployees
PetitionerarguesthatNOESandCRMLareproducedindifferentfacilitieswithdistinct
productionprocessesandequipment,maintainingthatCRMLisproducedusingtraditional
routingforcarbonsteel,withabatchannealingprocess,whileNOESisproducedusinga
continuousannealingprocess.38Petitioneralsocontendsthatthefinishingstepsinthe
productionprocessforNOESandCRMLdifferaswell.ForNOES,thefinalstepconsistsof
continuousannealinginacontrolledatmosphereandtheapplicationofanappliedinsulation
coating,whileforCRML,thefinalstepistocoldreduceandflattenthesteelandnottoadvance
itsmagneticpropertiesresultinginanuncoatedroughsurfacetextureunlikethesmooth
coatedsurfaceofNOES.39
ChinaSteelarguesthatthereisnothingontherecordtosuggestthatsemiprocessed
NOESandCRMLcouldnotbeproducedonthesameproductionequipmentandthattheonly
significantdifferencewouldappeartobethesiliconcontentofeach.40Baosteelarguesthat
whilethereareuniquequalitiesintheproductionofNOES,bothNOESandCRMLarecoldrolled
products.41
Price
PetitionerarguesthattherearesignificantdifferencesinpricebetweenNOESandCRML
becausetheproductionprocessforNOESismorecomplexandexpensivethantheproduction
processforCRMLandthemagneticandphysicalpropertiesofNOESaresuperiortothoseof
CRML.PetitionercontendsthatpricesofNOEStendtobeatleast50percenthigherthanprices
forCRML.42ChinaSteelarguesthat,whencomparedatthepointofsale,CRMLisconsiderably
lowerpricedthanfullyprocessedNOESandthat,evenafterfactoringintheadditionalcostsof
annealing,CRMLcanbeanattractive,lowerpricealternativetobothfullyprocessedand
semiprocessedNOESforthoseapplicationsthatdonotrequireaninsulationcoating.43Baosteel
addsthatpricedrivestheoverlapincompetitionbetweenNOESandCRML.44
36
Petitionerspostconferencebrief,pp.1011.
38
AKSteeldoesnotproduceCRML.ArcelorMittal,Nucor,andU.S.SteelallproduceCRML,butonly
NucorproducesbothCRMLandtheNOESasdefinedinthescopeoftheseinvestigations.
39
ASTMspecificationsreflectdifferentproductionprocessesforNOESandCRML.Petitioners
postconferencebrief,pp.1112.
40
41
42
43
44
37
I11
DOMESTICINDUSTRY
PetitionerarguesthatAKSteelcomprisestheentiretyofthedomesticindustry,because
itistheonlyU.S.producerofNOES.45ChinaSteelarguesthatthedomesticlikeproductinthese
investigationsshouldincludebothCRMLandNOES;therefore,itarguesthatthedomestic
industryshouldincludenotonlyAKSteel,butalsodomesticproducersofCRML,includingU.S.
Steel,ArcelorMittal,andNucor.46
45
Petitionerspostconferencebrief,p.14.Subsequenttothefilingofthepostconferencebriefs,
NucorprovideaquestionnaireresponseindicatedthatitproducesNOES.AKSteelsproductionofNOES
accountedfor***percentoftotalU.S.productionin2012.
46
I12
PARTII: CONDITIONSOFCOMPETITIONINTHEU.S.MARKET
U.S.MARKETCHARACTERISTICS
NOESisprimarilyusedtomakeelectricmotorsandgenerators,andislikelyasubstantial
costofthoseproducts.PartiesdifferovertowhatextentNOEScompeteswithgrainoriented
electricalsteel(GOES)andcoldrolledmotorlamination(CRML),withpetitionersdescribing
littleoverlapandrespondentsdescribingsubstantialoverlap.PetitionersdescribeNOES
demandasgenerallyfollowingwidereconomictrends.Ontheotherhand,respondentsstated
thatNOESdemandhasbeenhurtbycompetitionwithCRML,evenasmanyimportersalso
describednew,highergraderequirementsforNOESinsomedownstreamproducts.
U.S.MARKETSEGMENTS
AsdiscussedinPartI,NOEScanbesoldinfullyprocessedorsemiprocessedform,
dependingonwhetherthepurchaserperformsthefinalannealing(ofsemiprocessedNOES)or
theproducerdoes(offullyprocessedNOES).Currently,allimportsofNOESarefullyprocessed;
however,petitionerstatedthatifdutieswereplacedonlyonfullyprocessedNOES,importers
couldevadethedutieswithimportsofsemiprocessedNOES.1Petitionerstatedthat
semiprocessedNOESaccountsforapproximately***percentofitssalesofNOES,andadded
thatpricesforsemiprocessedNOESfollowthesametrendsasforfullyprocessedNOES,at
approximately***percentthepricelevel.2
CHANNELSOFDISTRIBUTION
AsdiscussedinPartI,beforebeingincorporatedintoamotorortransformer,NOESis
stampedintolaminationsandassembledintocores.AKSteeldoesnothavelaminatingand
stampingcapability,soeithertheenduserperformsthisfunction,orAKSteelsellsNOEStoa
laminator/stamper,whichinturnsellstoanultimateenduser.AKSteelestimatedthat
approximately20percentofitsshipmentsaretolaminatorsandstampers.3AKSteelalso
describedNOESdistributorsasservingtheportionofthemarketthatwantsquickdelivery
withoutholdingtheirowninventory.4
Conferencetranscript,pp.2223(Petersen).
Petitionerspostconferencebrief,responsetostaffquestions,pp.67.
3
Conferencetranscript,p.53(Pfeiffer).
4
Conferencetranscript,p.63(Konstantinidis).
2
II1

U.S.producersandimporters5of***NOESsold***whileimportersof***NOESsold
mainlytoendusers,andimportersof***NOESsoldmainlytodistributors,asshownintableII
1.6
Table II-1
NOES: U.S. producers and importers U.S. shipments, by sources and channels of distribution,
2010-2012, January-June 2012, and January-June 2013
*
Geographic distribution
U.S.producer***reportedsellingNOEStomostregionsintheUnitedStateswhile***
reportedselling***(tableII2).ImportersreportedsellingtomostU.S.regions,butnotas
oftentothewesternUnitedStatesastotheeasternUnitedStates.Attheconference,German
andSwedishrespondentsdescribedtheirNOESasfocusedonafewspecificcustomersin
specificregions,andnotpresentinallU.S.geographicregions.7
ForU.S.producerAKSteel,***percentofsaleswerewithin100milesoftheir
productionfacility,***percentwerebetween101and1,000miles,and***percentwereover
1,000miles.ForU.S.producerNucor,***percentwerebetween101and1,000miles,and***
percentwereover1,000miles.Weightingimportersresponsesbytheirshipments,importers
sold39.1percentoftheirNOESwithin100milesoftheirU.S.pointofshipment,48.6percent
between101and1,000miles,and12.3percentover1,000miles.Importersshowedsome
variationinresponsebycountry.Themajorityof***materialwasshippedlessthan100miles;
themajorityof***materialwasshippedbetween100and1,000miles;andthemajorityof***
materialwasshippedover1,000miles.
Table II-2
NOES: Geographic market areas in the United States served by U.S. producers and importers, by
number of responding firms
*
***.
***.
7
Conferencetranscriptp.102(LaFrankie),p.106(McPhie),andp.115(Kaufman).SeealsoWalzholz
andCDWspostconferencebrief,pp.45,andThyssenKruppspostconferencebrief,p.11.
6
II2

SUPPLYANDDEMANDCONSIDERATIONS
U.S.supply
Domesticproduction
Basedonavailableinformation,U.S.producersofNOEShavetheabilitytorespondto
changesindemandwithmoderatetolargechangesinthequantityofshipmentsofU.S.
producedNOEStotheU.S.market.Themaincontributingfactorstothisdegreeof
responsivenessofsupplyaretheavailabilityofunusedcapacity,theexistenceofsome
alternatemarketsandinventories,andtheabilitytoproducealternateproducts.
Industrycapacity
PetitionerdescribeditselfasabletoproduceNOESinallsizesandgrades.8Domestic
capacity***from2010to2012,ascapacityutilizationwasalways***orless.Thisrelatively
lowlevelofcapacityutilizationsuggeststhatU.S.producersmayhavesubstantialcapacityto
increaseproductionofNOESinresponsetoanincreaseinprices.
Alternativemarkets
U.S.producersexportsasapercentageoftotalshipmentswereapproximately***
percentin2010,butdecreasedtounder***percentin2012asU.S.producersexport
shipmentsdeclined.TheselevelsindicatethatU.S.producersmayhaveasomeabilitytoshift
shipmentsbetweentheU.S.marketandothermarketsinresponsetopricechanges.
Inventorylevels
U.S.producersinventoriesasapercentofshipmentsrangedfromapproximately***to
***percentover201012,buthadrisentonearly***percentinJanuaryJune2013.These
inventorylevelssuggestthatU.S.producersmayhavesomeabilitytorespondtochangesin
demandwithchangesinthequantityshippedfrominventories.
Productionalternatives
U.S.producer***statedthatitcouldswitchproductionfromNOESto***while***
statedthatitcouldswitchproductionfromNOESto***.
Supplyconstraints
OneimporterstatedthatpurchasersneedimportedNOESintheU.S.marketincaseof
supplyissueswiththeU.S.producerofNOES,andanotherstatedthatAKSteelhadplaced
II3

purchasersonallocationseveraltimesoverthelasttenyears.9***statedthatithadnothad
anydifficultysupplyingNOESsinceJanuary1,2010.Itaddedthat***.10***indicatedthatit
hadexperienceddifficultysupplyingNOES,***.11
SubjectimportsfromChina
Basedonavailableinformation,producersofNOESfromChinahavetheabilityto
respondtochangesindemandwithmoderatetolargechangesinthequantityofshipmentsof
NOEStotheU.S.market.ResponsivenessofsupplyforChineseproducersofNOESis
constrainedbyhighlevelsofreportedcapacityutilization.However,thevolumeofChinese
producersshipmentsofNOEStothirdcountrymarketswaslargerthantotalU.S.NOES
consumptionin2012.
Industrycapacity
PetitionerdescribedChineseproducersashavingsubstantialandlargeexcesscapacity,
andasaddingmorecapacity,includingforhighgradeNOES.12Chineseproducersreported
unchangedcapacityover201012,withcapacityutilizationrangingfromapproximately***to
***percent.
Alternativemarkets
Chineseproducersshipped***percentormoreoftheirNOEStotheirhomemarket,
butexportstononU.S.marketswerelargerthanU.S.consumptionofNOESin2012.
Inventorylevels
Chineseproducersinventoriesrangedfromapproximately***to***percentoftheir
shipmentsover2010to2012.
Chineseproducers***.
Conferencetranscript,p.92(Azeyanagi)andp.9799(Weinstein).
***.
11
See***.
12
Conferencetranscript,p.43(Jones),andpetitionerspostconferencebrief,p.38.
10
II4

Supplyconstraints
***statedthatithadtodeclineorreducecustomerorderssince2010duetosupply
allocationsandtheavailabilityofcapacityforhighgradeNOES.NootherimportersofChinese
NOESreporteddifficultiesinsupplyingNOES.
SubjectimportsfromGermany
Basedonavailableinformation,producersofNOESfromGermanyhavetheabilityto
NOEStotheU.S.market.ResponsivenessofsupplyforGermanproducersofNOESis
constrainedbyhighlevelsofreportedcapacityutilization.However,thevolumeofGerman
producersshipmentsofNOEStothirdcountrymarketswasover***percentoftotalU.S.
NOESconsumptionin2012.
Industrycapacity
GermanproducersstatedthattheuncoatedandotherNOESthattheysellintheUnited
StatesarenotproducedbyU.S.NOESproducers.13Germanproducersreportedcapacitythat
rangedfromover***thousandtonstoover***thousandtonsover201012.Theyalso
reportedcapacityutilizationlevelsofatleast***percentoverthesameperiod.
Alternativemarkets
GermanproducerThyssenKruppstatedthatithadbeenexportingNOEStotheUnited
StatesforaspecificcustomerthatstoppedU.S.productionofitsdownstreamproductusing
NOESin2012.ItindicatedthatithassincereduceditsU.S.exportsandhasnoplanstodivert
themtootherU.S.purchasers.14Nearly***percentofGermanproducersshipmentsin2012
weretotheirhomemarket.However,Germanproducersexportedapproximately***percent
oftheirtotalshipmentstothirdcountrymarketsover2010to2012.Suchexportswereover
***thousandtonsin2012,downfromlevelsin2010and2011.
Inventorylevels
Germanproducersinventorylevelswereapproximately***percentofshipmentsover
2010to2012.
Germanproducer***statedthatitcouldproduce***onthesameequipmentituses
toproduceNOES.
13
Conferencetranscript,pp.102(LaFrankie)and106(McPhie).
Conferencetranscript,p.103(LaFrankie).
14
II5

Supplyconstraints
NoimportersofGermanNOESreporteddifficultiesinsupplyingNOES.
SubjectimportsfromJapan
Basedonavailableinformation,producersofNOESfromJapanhavetheabilityto
respondtochangesindemandwithlargechangesinthequantityofshipmentsofNOEStothe
U.S.market.Themaincontributingfactorstothelargedegreeofresponsivenessofsupplyare
theavailabilityofunusedcapacity,thedemonstratedabilitytoincreasecapacity,andthe
existenceoflargealternatemarkets.
Industrycapacity
Japaneseproducersreportedcapacityrosefromover***thousandtonsin2010to
over***thousandtonsin2012.Duringthesameperiod,capacityutilizationdroppedfromover
***percenttounder***percent.
Alternativemarkets
Attheconference,JFEdescribeditselfasfocusedontheAsian,andspecificallyChinese,
marketsforNOES.15ExportstononU.S.marketswereover***thousandtonsin2012and
almost***thousandtonsin2011.
Inventorylevels
Inventorylevelswereover***percentofshipmentsin2010and2011,andthen
declinedtounder***percentin2012.
***statedthat***couldproduce***onthesameproductlinesonwhichthey
producedNOES.
Supplyconstraints
NoimportersofJapaneseNOESreporteddifficultiesinsupplyingNOES.
SubjectimportsfromKorea
Basedonavailableinformation,theKoreanNOESproducerhastheabilitytorespondto
changesindemandwithmoderatetolargechangesinthequantityofshipmentsofNOESto
theU.S.market.ResponsivenessofsupplyfortheKoreanproducerofNOESisconstrainedby
15
Conferencetranscript,p.159(Azeyanagi).
II6

***.However,thevolumeoftheKoreanproducers***,andrepresentedalargeshareof
Koreanproducerstotalshipments.
Industrycapacity
Attheconference,petitionerdescribedKoreanproducersasupgradingtheirNOES
productionfacilitieswiththeencouragementoftheKoreangovernment.16TheKorean
producerreportedthatitscapacitywas***atover***thousandtons,withcapacityutilization
atover***percentinJanuaryJune2013,butotherwisealwaysover***percentover201012.
Alternativemarkets
ExportstononU.S.marketswereneverlessthan***thousandtonsover201012,and
representedalmost***percentormoreoftheKoreanproducersshipmentsoverthesame
period.
Inventorylevels
Inventorieswere***percentofshipmentsorlessover201012.
***.
Supplyconstraints
***statedthatithadexperiencedsomedifficultyinmakingtimelyshipmentssince
2010.NootherimportersofKoreanNOESreporteddifficultiesinsupplyingNOES.
SubjectimportsfromSweden
Basedonavailableinformation,producersofNOESfromSwedenhavetheabilityto
respondtochangesindemandwithlargechangesinthequantityofshipmentsofNOEStothe
U.S.market.Themaincontributingfactorstothisdegreeofresponsivenessofsupplyare***.
16
Conferencetranscript,p.44(Jones).
II7

Industrycapacity
Swedishcapacitywas***over20102012andfellinJanuaryJune2013fromJanuary
June2012.Capacityutilization,however,fellfromalmost***percentin2011tounder***
percentin2012.
Alternativemarkets
Attheconference,CogentPowerdescribedU.S.importsfromSwedenasalmostthe
samefor20years,andconcludedthatthoseexportsdidnotindicatethatSwedishNOES
productionwasexportorientedinawaythatwouldleadtogreaterexportstotheUnited
States.17ExportstononU.S.marketswerealittleover***thousandtonsin2012,representing
over***ofSwedishproducersshipments.
Inventorylevels
Inventoriesrosefromunder***percentofshipmentsin2010toover***percentin
2012.
***statedthatitcouldproduce***onthesameequipmentitusestoproduceNOES.
Supplyconstraints
NoimportersofSwedishNOESreporteddifficultiesinsupplyingNOES.
SubjectimportsfromTaiwan
Basedonavailableinformation,producersofNOESfromTaiwanhavetheabilityto
NOEStotheU.S.market.Themaincontributingfactorstothisdegreeofresponsivenessof
supplyarethe***andtheexistenceofalternatemarkets.
Industrycapacity
Attheconference,petitionerdescribedTaiwanproducerChinaSteelashavingbegun
capacityexpansionsatitsNOESproductionfacility.18***reported***capacityover2010to
2012,***.***alsoreportedcapacityutilizationthatrangedbetween***and***percent
over201012.
17
Conferencetranscript,pp.15859(Harper).
18
II8

Alternativemarkets
***exportstothirdcountrymarketswerenearly***thousandtonsin2012,nearly***
ofitsshipments.
Inventorylevels
Inventoriesasapercentofshipmentsrangedbetweenapproximately***and***
percentover201012
***.
Supplyconstraints
NoimportersofTaiwanNOESreporteddifficultiesinsupplyingNOES.
Nonsubjectimports
ImportsofNOESfromnonsubjectcountrieswerelessthan***percentofU.S.NOES
consumptionover201012.Thelargestsourcesofnonsubjectimportsduring201012were
FranceandAustralia.SeePartVIIformoreinformationonnonsubjectimports.
FactorsAffectingSupply
Mostproducersandimportershadnotobservedanychangesintheproductrange,mix,
ormarketingofNOESsinceJanuary1,2010,althoughafewreportedproducinghighergrade
NOESinresponsetodemand.***and20importersindicatedthattherehadnotbeenany
changes.***statedthattherehadbeenchanges,citingthinnergaugerequirementsand
worldwideovercapacity.Fiveimportersalsodescribedchangesinproductrange,citingsupplier
responsestoincreaseddemandforelectricvehiclemotorsandhighergradeNOES
requirementsatendusers,elaboratingthathighergrademeantthinnergaugesand/orhigher
siliconcontent.
PetitionersnotedthatinJuly2013,BrazilimposedantidumpingdutiesonNOESfrom
China,Korea,andTaiwan.TheystatedthatBrazilsimportsofNOESfromthosecountries
beforethedutieswerehigherthanallU.S.NOESimports.19ImporterMetalliastatedthatsome
BrazilianpurchasersnowcannotfindalternativesourcesofNOESandarecontinuingto
purchaseNOESfromthosecountries.20PetitioneralsodescribedseverallargeNOESproduction
facilitiesbeingbuiltbyforeignownedNOESproducersinIndiaandVietnam,andforecastthat
19
Conferencetranscript,p.11(Dorn).
Conferencetranscript,p.126(Weinstein).
20
II9

productionfromthesefacilitieswouldplacecompetitivepressureonexistingsubjectcountry
producers.21
U.S.demand
Basedonavailableinformation,theoveralldemandforNOESislikelytoexperience
moderatechangesinresponsetochangesinprice.NOESlikelyrepresentsasomewhattovery
substantialcostshareofdownstreamproducts,buttherearesubstituteproducts,thoughtheir
rangemaybelimited.
Enduses
U.S.demandforNOESdependsonthedemandforU.S.produceddownstream
products.U.S.producersreportedendusesaselectricmotors,lowvoltagetransformers,22and
generators,butdidnotknowtheshareofthecostsofthefinalproductsaccountedforby
NOES.Importersreportedthesameenduses,aswellasreportingslitcoilsofNOESasanend
use.Manyimportersalsodidnotknowtheshareofthecostsofthefinalproductsaccounted
forbyNOES,butothersestimated2084percentofthecostsofamotor,80percentofthecost
ofatransformer,and20percentofthecostofagenerator.Inresponsetolostsalesandlost
revenueallegations(seePartV),severalNOESpurchasersstatedthatincreasedNOEScosts
couldmaketheirproductsuncompetitive,implyingthatNOEScostsareanimportantportion
oftheiroverallcosts.
Businesscycles
Mostproducersandimportersdidnotreportdistinctivebusinesscyclesnorchanging
businesscyclesforNOES.Thosethatdidseedistinctivecyclesoftendescribedincreased
demandforhighergradeNOESorpurchasersmovingtheirproductionoffshore.
***and18of24importersindicatedthattheNOESmarketwasnotsubjecttoany
distinctbusinesscyclesorconditionsofcompetition.However,***statedthatdemandis
seasonal,lowerinthewinterandhigherinthespringandthesummer.Siximportersalso
describeddistinctbusinesscyclesorconditionsofcompetitionintheNOESmarket.Among
thosesiximporters,***citedcompetitionbasedonqualityfactorssuchascoreloss.***
describedincreasedcapacityinChina.***indicatedthatitscustomersthatparticipateinthe
agriculturalmarkethaveseasonaldemand,andthatdemandfromtheenergysegmentis
influencedbythepricesofnaturalgasandcoal.***characterizedU.S.NOEScustomersas
21
Conferencetranscript,p.47(Jones),andpetitionerspostconferencebrief,pp.4546.
PetitionerstatedthatnewDepartmentofEnergyefficiencyrequirementsforsmalltransformers
willgointoeffectinJanuary2016,andthattheserequirementswilleffectivelyeliminateNOESfromthat
demandsegment.Petitionerdescribedthissegmentasnotamajorpartofitsbusiness.Conference
transcript,pp.26and51(Pfeiffer).
22
II10

pushingtheenvelopeforincreasedefficiencymorethancustomersinEuropeandAsia,
resultinginU.S.demandbeingparticularlystrongforhighergradeNOES.
***and15importersindicatedthattherehadnotbeenanychangesinthebusiness
cyclesorconditionsofcompetitionforNOESsinceJanuary1,2010.Fiveimportersindicated
thattherehadbeenchanges,describingaggressivepricingofproductfromAsia;increased
competitiononquality,suchaslowercoreloss;increasedU.S.electricvehicleproduction;and
decreaseddemandfrompurchasersoffshoringproductionduetothehighU.S.costofNOES.
Apparentconsumption
ApparentU.S.consumptionofNOESincreasedover***percentfrom2010to2011,
thenfellalmost***percentfrom2011to2012,andwasmorethan***percentlowerin
JanuaryJune2013thanJanuaryJune2012.
Demandtrends
U.S.producersdescribed***U.S.demandforNOESsince2010,whileimporterswere
splitonwhetherU.S.demandwasincreasingorfluctuating(tableII3).Petitionerdescribed
NOESdemandasfollowinggeneralU.S.economicgrowthaswellastrendsincertainspecific
endusemarketssuchaslargemotorsforminingequipmentandlocomotives.23
Table II-3
NOES: Firms responses regarding U.S. demand, by number of responding firms
*
U.S.producer***indicatedthatU.S.demandhaddecreasedsinceJanuary1,2010due
tolowerdemandfromthemining,locomotive,andindustrialsegments.Itattributedlower
demandfromthosesegmentstomacroeconomicconditions.U.S.producer***statedthat
NOESdemandhadfluctuatedwithnocleartrend.Attheconference,AKSteelplacedemphasis
onlowerdemandfromtheminingsegment(inwhichNOESisusedinmotorsinmining
equipment)asadriverforlowerNOESdemand,andforecastnoimprovementinthisarea.24In
itspostconferencebrief,petitioner***.25
Amongimporters,thosedescribingincreasedU.S.demandattributedtheincreaseto
recoveryfromtherecessionin2009andtonewproductionofelectricvehicles.Chinese
producerBaosteelindicatedthatitanticipateshigherU.S.demandforNOES,especiallyfor
lowercoreloss,thinnergaugeNOES.26Thosedescribingdecreaseddemandattributedthe
decreasetoweaknessinthebroadereconomy.Atthestaffconference,Metalliaalsodescribed
23
Petitionerspostconferencebrief,responsestostaffquestions,p.6.
25
Petitionerspostconferencebrief,responsestoquestions,pp.67,andstaffinterviewwith***.
26
CISAspostconferencebrief,exhibit1.
24
II11

aU.S.producerexitingtheU.S.industryin2004,inpartbecausedownstreamcustomerswere
movingproductiontoAsiaandMexico.27Similarly,ChinaSteelnamed***asdownstream
producersthathadexitedtheU.S.marketandopenedplantsinChinaand/orMexico.It
continuedthat,withcopperandaluminumpricesthesameglobally,manyNOESuserscompete
basedonthecostofsteel.28CDWstatedthatlowernaturalgaspriceshadledtoreduced
demandfromthenongaselectricalenergyapplicationsinwhichNOESisused,aswellas
makingitmorecosteffectivetoannealCRML.29(SeePartVformoreinformationonnaturalgas
prices).
***indicatedthatforeigndemandhadbeendecreasingsince2010duetodecreased
demandfromEuropeandChina.***addedthatdemandinAsiancountrieshaddiminishedas
infrastructureprojectswerefinished.However,apluralityofimportersdescribedforeign
demandforNOESasincreasing,citingtheelectrificationofdevelopingeconomies,steady
growthindemandfromAsia,newproductionofelectricvehicles,andrecoveryfromtherecent
economicdownturn.Attheconference,Metallianotedthatanimportantelementofglobal
demandforNOESiscompressorsforrefrigerators,andasrefrigeratorusehasexpandedinthe
developingworld,sohastheuseofNOES.30
Substituteproducts
SubstitutesforNOESarelikelylimited,dependingonhowsubstitutableNOESandCRML
are.***and17importersreportedthattherewerenosubstitutes.Siximportersdidname
substitutes.ThreenamedCRMLasasubstituteinlaminations,transformers,andmotors,with
***notingthatCRMLcouldsubstituteforsemiprocessedNOESbutnotfullyprocessedNOES.
TwonamedGOESandonenamedthingaugeNOESasasubstituteinmotorsandtransformers.
***describedCRMLasasubstituteforNOESatuptothehighestNOESgrades,andstatedthat
someofitspurchasershadtolditthattheyswitchfromNOEStoCRMLifNOESpricesrise.***
continuedthatforsomehighgradeNOESapplications,GOESmaybeasubstitute.
Threeoftheimportersthatnamedsubstitutesstatedthatchangesinthepriceof
substituteshadnotaffectedthepriceofNOES.***notedthatthingaugeNOES(oflessthan
0.2mm)isusedforenhancedmachineperformance,andismuchmoreexpensivethanNOES.
However,twoimportersthatnamedGOESasasubstitute,andonethatnamedCRMLasa
substitute,statedthatchangesinsubstitutepriceshadaffectedNOESprices.Amongthese,***
elaboratedthat,asGOESpricesincreased,someGOESusersswitchtoNOES.
Intheconferenceandintheirbriefs,partiespresenteddifferentviewsofhowmuch
CRMLcansubstituteforNOES.PetitionerdescribedNOESandCRMLasmadeusingdifferent
productionmethods,havingdifferentsurfaces,andusedindifferentapplications.Metallia
describedCRMLasalowercostsubstituteformanygradesofNOES.31Whileitwasreluctantto
27
ChinaSteelsPostconferencebrief,p.2.
29
Conferencetranscript,p.105(McPhie).
30
31
Conferencetranscript,pp.9597(Weinstein).
28
II12

makeanexactestimateduetolackofdocumentation,itstatedthatCRMLcouldhavetaken
between15and30percentoftheU.S.marketforNOES.32ChinaSteelindicatedthatCRML
begancompetingwithNOESapproximately15yearsago,andthecompetitionhas
acceleratedmorerecently.33SeePartIformoreonNOESandCRML.
SUBSTITUTABILITYISSUES
ThedegreeofsubstitutionbetweendomesticandimportedNOESdependsuponsuch
factorsasrelativeprices,quality,andconditionsofsale.Producersandimportersdisagreedon
howinterchangeableU.S.andsubjectNOESare.Someimporterslistedparticularsubject
importsthattheystatedwereavailableinlimitedquantitesfromU.S.producers,butasmall
majorityofrespondingimportersusuallyindicatedthatU.S.andimportedNOESwereatleast
frequentlyinterchangeable.ThereisatleastsomeoverlapinpurchasersbetweenU.S.
producersandimporters.Basedontheseandotheravailabledata,staffbelievesthatthereis
moderatetohighdegreeofsubstitutabilitybetweendomesticallyproducedNOESandNOES
importedfromsubjectsources.
Leadtimes
NOESisprimarilyproducedtoorder.AmongU.S.producers,***reportedthat***
percentofits2012salesofNOESwereproducedtoorder,withaleadtimeof***.***.***
reportedthat***percentofitssaleswereproducedtoorder,withaleadtimeof42days.
Amongimporters,74.4percentofallimporters2012saleswereproducedtoorder,
with25.6percentfromtheimportersU.S.inventory.ImportersofNOESfrommostcountries
hadmostoftheirsalesproducedtoorder,exceptimportersofNOESfromSweden,whichhad
themajorityoftheirsalesfromU.S.inventory.Mostimportersreportedleadtimesof90180
daysforproductproducedtoorder.Attheconference,Metalliastatedthatproductfrom
Taiwanhasaleadtimeoffivemonths.34
Purchasers
Petitionerdescribedpurchasersaseitherendusersinmotorsandgenerators(andtoa
lesserextent,lowvoltagetransformers)oraslaminationstampersorservicecenters,which
processand/ordistributeproducttothesameendusesectors.35
Producersandimporterswereaskedtonametheir10largestcustomersin2012.***
included***.***included***.Allofthesefirmsexcept***werealsonamedbyatleastone
importer.Importersalsonamedotherfirmsnotlistedbyproducers.
32
Conferencetranscript,pp.147148(Weinstein),149(Mendoza).
34
35
33
II13

PetitionerdescribedqualificationofNOESatpurchasersasusuallytakingamatterof
weeks.36MetalliadescribedqualificationforNOESasrigorousandinvolvingtestingthe
NOESinthepurchasersapplication.37Baosteel,ThyssenKruppEurope,andThyssenKrupp
NorthAmericadescribedqualificationastakingayeartoayearandahalf.38
ComparisonofU.S.producedandimportedproduct
PetitionerdescribedNOESascompetingintheU.S.marketonthebasisofprice,with
salessometimeslostoverpricedifferencesofpenniesperpound.ItstatedthatmostNOES
soldintheU.S.marketiswarrantedtomeetASTMspecifications,andsoishighly
interchangeableamongsources.39Ontheotherhand,importersoftendescribedtheirproducts
asnotsubstitutableforproductsfromAKSteel.
InordertodeterminewhetherU.S.producedNOEScangenerallybeusedinthesame
applicationsasimportsfromChina,Germany,Japan,Korea,Sweden,andTaiwan,U.S.
producersandimporterswereaskedwhethertheproductscanalways,frequently,
sometimes,orneverbeusedinterchangeably.AsshownintableII4,producersdescribed
NOESfromvarioussourcesas***interchangeable,whileimportersweremorelikelyto
describeNOESfromvarioussourcesasfrequentlyorsometimesinterchangeable.
Table II-4
NOES: Perceived interchangeability between NOES produced in the United States and in other
countries, by country pair
*
Inadditionalcomments,importersoftendescribedproductsthattheyimportedfrom
subjectsources,andthattheystatedthatU.S.producersdidnotproduce.Forexample,***
statedthatgradeslowerthanJIS50A470andthosehigherthanM15werenotavailable,or
wereavailableonlyinlimitedquantities,fromU.S.producers.***describedsimilarissues.***
notedthatsomecustomersrequestNOESfromspecificJapanesemills.(***alsostatedthat
somecustomersrequestproductfromspecificmills,butdidnotindicatefromwhich
countries]).***statedthatithasdevelopedsomeofitsNOEStomeetthespecificationsof
purchaser***.***describedotherNOESnotcommerciallycompetitivewith***productfor
thispurchaser.40***statedthatits***NOESisDFARScompliant41anddesignedtobeusedby
36
Conferencetranscript,pp.2324(Pfeiffer).
38
CISAspostconferencebrief,exhibit1,andThyssenKruppspostconferencebrief,answertostaff
question4.
39
Conferencetranscript,pp.2324(Pfeiffer).
40
Seealso***.
37
II14

thecustomerwithoutfurtherprocessing,limitingitscompetitionwithotherNOES.***stated
that,becausetheelectricvehiclemotorwasdevelopedinJapan,theNOESthatthemotoruses
wasalsodevelopedbyJapaneseproducer***toparticularspecifications,andisnot
interchangeablewithotherNOES.Additionally,***statedthatChineseNOESoftenhasa
performanceequivalenttoJapaneseorKoreanNOES,butthatcustomersmayprequalifythe
Chinesematerial.
Producersandimporterswerealsoaskedtoassesshowoftendifferencesotherthan
priceweresignificantinsalesofNOESfromtheUnitedStates,subject,ornonsubjectcountries.
AsseenintableII5,producersdescribedNOESfromdifferentsourcesas***differentin
factorsotherthanprice,whileimportersexpressedmixedassessmentsofhowoften
differencesotherthanpriceweresignificant,butrarelydescribedsuchdifferencesasnever
significant.
Table II-5
NOES: Significance of differences other than price between NOES produced in the United States
and in other countries, by country pair
*
Inadditionalcomments,***statedthat,forsometypesofNOES,productfromthe
UnitedStatesandcombinationsinvolvingproductfromallsubjectcountriesarepreferred.For
example,itcitedU.S.andChinese35mmNOESashavingverygoodcorelossandhigh
permeabilityinthedirectionofrolling.***statedthatforeignabilitytoproduceNOESproducts
notproducedbytheU.S.producerwasareasonwhyfactorsotherthanpricecouldbe
significantinsalesofNOES.***statedthatU.S.producersareoftenveryreluctantto
producelowergradesofNOES.***statedthatitsimportedNOES(from***)service,short
leadtimes,andconsistentqualitymakeitapreferredproductforpurchasers.Otherimporters
reiteratedtheircommentsoninterchangeability.
(continued)
41
DFARSstandsforDefenseFederalAcquisitionRegulationSupplement,regulationsforDepartment
ofDefensepurchasing.Seehttps://www.federalregister.gov/defensefederalacquisitionregulation
supplementdfars.
II15
PART III: U.S. PRODUCERS PRODUCTION, SHIPMENTS, AND

EMPLOYMENT
The Commission analyzes a number of factors in making injury determinations (see 19
U.S.C. 1677(7)(B) and 1677(7)(C)). Information on the subsidies was presented in Part I of
this report and information on the volume and pricing of imports of the subject merchandise is
presented in Part IV and Part V. Information on the other factors specified is presented in this
section and/or Part VI and (except as noted) is based on the questionnaire responses of two
firms that accounted for the all of U.S. production of NOES during 2012.
U.S. PRODUCERS
The Commission received U.S. producer questionnaires from two firms, AK Steel and
Nucor. These two firms are believed to represent all of U.S. production of NOES. AK Steel,
which accounted for *** percent of U.S. production of NOES in 2012, is a wholly-owned
subsidiary of AK Steel Holding Corporation and is publicly traded on the New York Stock
Exchange.
AK Steel is a leading producer of NOES. 2 To produce NOES, AK Steel utilizes its electric
arc furnace at its facility in Butler, Indiana to melt and cast cold-rolled or hot-rolled steel with
the desired chemistries. The finishing of the production processes for all of AK Steels NOES
takes place at its facility in Zanesville, Ohio, whether it is a semiprocessed or fully processed
product. 3 AK Steel sells NOES in both wide coil and slit form. During the period, roughly ***
percent of AK Steels shipments were in wide coils. 4 Nucor reported producing NOES at its
facilities in Crawfordsville, IN.
Table III-1 lists U.S. producers of NOES, positions on the petition, their production
locations, and shares of total production in 2012.
1
Two firms, ArcelorMittal and U.S. Steel, reported that they have not produced NOES since January
1, 2010. Neither AK Steel nor Nucor are related to firms that are engaged in importing NOES from
subject countries into the United States. Neither firm is related to firms that are engaged in exporting
NOES from the subject countries to the United States nor are they related to any firms, either domestic
or foreign, that are engaged in the production of NOES.
2
Conference transcript, p. 17 (Peterson).
3
AK Steels Butler, IN facility produces a finished GOES product, but it does not produce a
semiprocessed or fully processed NOES product. Conference transcript, pp. 17-18 (Peterson).
4
Petitioners postconference brief, Answer to staff questions, p. 9.
III-1
Table III-1
NOES: U.S. producers of NOES, their positions on the petition, production locations, production,
and shares of reported production, 2012
Firm
Position on orders
Share of production
(percent)
U.S. production locations
AK Steel
Petitioner
Butler, PA and Zanesville, OH
***
Nucor
***
Crawfordsville, IN
***
Total
100.0
Source: Compiled from data submitted in response to Commission questionnaires.
When asked to indicate whether their firm has experienced any changes in relation to
the production of NOES since January 1, 2010, AK Steel reported ***. Nucor reported that ***.
When asked to describe the constraints that set limits on the their firms production of NOES
and its ability to shift production capacity between products, AK Steel and Nucor indicated ***.
AK Steel reported the production of GOES, while Nucor reported the production of ***
using the same equipment, machinery, and workers used in the production of NOES. Data
concerning U.S. producers overall capacity and production data with regard to these products
are presented in table III-2. 5
Table III-2
NOES: U.S. producers overall capacity and production of products on the same equipment as
NOES, 2010-12, January-June 2012, and January-June 2013
*
AK Steel reported that *** percent of its overall production was accounted for by GOES and the
remaining *** percent was accounted for by NOES in 2012. Nucor reported that *** percent of its
overall production was accounted for by *** and the remaining *** percent was accounted for by NOES
in 2012.
III-2
U.S. PRODUCTION, CAPACITY, AND CAPACITY UTILIZATION

Table III-3 presents U.S. producers production, capacity, and capacity utilization. U.S.
production capacity *** throughout the period. Production of NOES reported by U.S. firms
increased by *** percent between 2010 and 2011, but decreased by *** between 2011 and
2012. Capacity utilization decreased by *** percentage points between 2010 and 2012 and was
*** percent lower in interim 2013 compared to interim 2012.
Table III-3
NOES: U.S. producers production, capacity, and capacity utilization, 2010-2012, January-June
2012, and January-June 2013
*
U.S. PRODUCERS U.S. SHIPMENTS AND EXPORTS

Table III-4 presents U.S. producers U.S. shipments, export shipments, and total
shipments. U.S. shipments of NOES increased by *** percent between 2010 and 2011, but
decreased by *** percent between 2011 and 2012 and were *** percent lower in interim 2013
compared to interim 2012. Export shipments, which accounted for *** percent of total
shipments in 2012, decreased by *** percent between 2010 and 2012 and were *** percent
lower in interim 2013 compared to interim 2012.6 U.S. firms were asked to report separately,
their U.S. shipments of semiprocessed and fully processed NOES in 2012. AK Steel reported
that *** percent of its 2012 U.S. commercial shipments consisted of fully processed NOES and
*** percent consisted of semiprocessed NOES. Nucor reported that *** percent of its 2012 U.S.
commercial shipments consisted of fully processed NOES and *** percent of its 2012 U.S.
commercial shipments consisted of semiprocessed NOES.
Table III-4
NOES: U.S. producers U.S. shipments, exports shipments, and total shipments, 2010-2012,
January-June 2012, and January-June 2013
*
U.S. PRODUCERS INVENTORIES

Table III-5 presents U.S. producers end-of-period inventories and the ratio of these
inventories to U.S. producers production, U.S. shipments, and total shipments over the period
examined. U.S. producers inventories decreased between 2010 and 2012 and were higher in
Principal export markets identified include ***.
III-3
interim 2013 compared to interim 2012. Ratios of inventory to U.S. production ranged from ***
percent to *** percent over the period. 7
Table III-5
NOES: U.S. producers inventories, 2010-2012, January-June 2012, and January-June 2013
*
U.S. PRODUCERS IMPORTS AND PURCHASES

No U.S. producers reported imports or purchases of NOES during the period examined.
U.S. EMPLOYMENT, WAGES, AND PRODUCTIVITY
Table III-6 shows U.S. producers employment-related data during the period
examined.8 As detailed in table III-6, the number U.S. production and related workers (PRWs)
increased irregularly between 2010 and 2012, but was lower in interim 2013 than in interim
2012. In March 2012, AK Steel reported the ratification of a three-year labor agreement with
the UAW covering about 185 hourly production and maintenance workers at its Zanesville, Ohio
facility and a four-year labor agreement covering about 1,250 hourly production and
maintenance employees at its Butler, Pennsylvania facility.
Table III-6
NOES: Average number of production and related workers, hours worked, wages paid to such
employees, hourly wages, productivity, and unit labor costs, 2010-2012, January-June 2012, and
January-June 2013
*
Nucor reported that ***.

UAW members ratify early labor agreement for Butler Works,
http://www.aksteel.com/news/press_release.aspx?doc_id=919, and UAW members ratify early labor
agreement for Zanesville Works,
http://www.aksteel.com/news/press_release.aspx?doc_id=897&year=2012, retrieved November 6,
2013.
8
III-4
PARTIV: U.S.IMPORTS,APPARENTU.S.CONSUMPTION,ANDMARKET
SHARES
U.S.IMPORTERS
TheCommissionissuedimporterquestionnairesto33firmsbelievedtobeimportersof
NOES. Usablequestionnaireresponseswerereceivedfrom25companies,2representing87.4
percentoftotalsubjectimports(76.2percentofimportsfromChina,108.5percentofimports
fromGermany,71.8percentofimportsfromJapan,99.3percentofimportsfromKorea,99.2
percentofimportsfromSweden,and90.1percentofimportsfromTaiwan)in2012.3
TableIV1listsallrespondingU.S.importersofNOES,theirheadquarters,thecountries
theyimportfrom,andtheirsharesofsubjectU.S.importsin2012.***reportedenteringand
withdrawingNOESfrombondedwarehouses.***importingNOESundertheTemporary
ImportationUnderBondprogram.4
1
Table IV-1
NOES: U.S. importers, headquarters, source of imports, share of imports, 2012
Firm
Angang America
Aperam
ArcelorMittal America
Baosteel America
CDW America
Cogent Power
Daewoo America
Felchar Manufacturing
JFE Shoji America
Kanematsu America
Table continued on next page.
Headquarters
East Brunswick, NJ
New Providence, NJ
Chicago, IL
Montvale, NJ
Cleveland, OH
Burlington, ON
Teaneck, NJ
Binghampton, NY
Long Beach, CA
New York, NY
Source(s) of imports
***
***
***
***
***
***
***
***
***
***
Share of
subject
imports
(percent)
***
***
***
***
***
***
***
***
***
***
TheCommissionissuedquestionnairestothosefirmsthat,basedonareviewofdataprovidedby
U.S.CustomsandBorderProtection(Customs),mayhaveaccountedformorethan***percentof
totalimportsunderHTSsubheadings7225.19.00,7226.19.10,and7226.19.90.
2
ThefollowingfirmsreportedthattheyhadnotimportedNOESfromanycountryatanytimesince
January1,2010:***.
3
CoveragewascalculatedbasedonofficialCommerceimportstatisticscomparedtothequantityof
imports,inshorttons,reportedinquestionnairedatain2012(14.1millionshorttonsforChina,9.6
millionshorttonsforGermany,18.5millionshorttonsforJapan,7.3millionshorttonsforKorea,9.4
millionshorttonsforSweden,and17.1millionshorttonsforTaiwan).
4
***.Emailfrom***,November11,2013.***.Emailfrom***,November14,2013.
IV1

Table IV-1Continued
NOES: U.S. importers, headquarters, source of imports, share of imports, 2012
Dover, DE
***
Magcor
New
York,
NY
***
Marubeni-Itochu America
Burnaby, BC
***
Marubeni-Itochu Canada
Smyma, TN
***
Metal One America
Fort Lee, NJ
***
Metallia
New York, NY
***
Mitsui
Arnold, PA
***
National Material
Fort Lee, NJ
***
POSCO America
New York, NY
***
SteelSummit
Bernardsville, NJ
***
Sujani
Rosemont, IL
***
Sumitomo America
Park Ridge, IL
***
Tempel Steel
Duisburg, Germany
***
ThyssenKrupp Europe
***
ThyssenKrupp North America Southfield, MI
Houston, TX
***
Voestalpine
Total
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
100.0
***submittedanimporterquestionnaire;however,inlatercorrespondencewithstaff,thefirm
indicatedthatitwasnottheimporterofrecordformostofthematerialthatissold.Onthebasisof
thatstatement,staffhasnotused***importdatainordertoavoiddoublecounting.Seeemailfrom
***,November7,2013.
OftherespondingU.S.importers,anumberoffirmsreportedbeingrelatedtofirmsthat
areengagedintheproductionofNOESorbeingrelatedtofirmsengagedinimportingor
exportingNOES.AlistofthesefirmsispresentedintableIV2.
Table IV-2
NOES: Related U.S. importers
*
U.S.IMPORTS
TableIV3presentsdataforU.S.importsofNOES.U.S.importsofNOESfromsubject
sourcesaccountedforatleast91.2percentoftotalU.S.importsovertheperiod.In2012,Japan
wasthelargestsubjectsourceofU.S.importsofNOES,followedbyTaiwanandChina.Import
volumetrendsamongthecountriesvariedbetween2010and2012.Between2010and2012,
thevolumeofimportsofNOESfromChina,Sweden,andTaiwanincreased,whilethevolumeof
IV2

importsofNOESfromGermanyandJapandecreased.5Overall,thequantityofimportsfrom
subjectsourcesincreasedby36.9percentbetween2010and2012,butwas36.7percentlower
ininterim2013comparedtointerim2012.
U.S.importsofNOESfromnonsubjectsourcesaccountedforbetween4.2percentand
8.8percentoftotalU.S.importsovertheperiod.FranceandAustraliawerethetwolargest
nonsubjectsourcesofU.S.importsofNOESin2012,accountingforthevastmajorityof
nonsubjectimports.
Table IV-3
NOES: U.S. imports, by source, 2010-12, January-June 2012, and January-June 2013
Item
2010
China
Germany
Japan
Korea
Sweden
Taiwan
Subtotal, subject
All others
Total U.S. imports
8,275
10,831
20,124
5,267
4,235
6,776
55,507
3,559
59,066
China
Germany
Japan
Korea
Sweden
Taiwan
Subtotal, subject
All others
Total U.S. imports
7,642
12,372
22,816
5,526
6,595
7,929
62,879
4,640
67,520
Calendar year
January-June
2011
2012
2012
2013
Quantity (short tons)
16,401
14,071
7,394
8,217
14,385
9,568
5,852
3,795
22,747
18,540
11,323
6,915
6,880
7,331
4,062
1,357
8,599
9,359
4,979
3,559
5,203
17,136
8,201
2,637
74,215
76,006
41,812
26,481
7,151
6,242
2,956
1,168
81,366
82,248
44,768
27,648
Value (1,000 dollars)1
19,702
15,400
8,508
7,912
19,492
11,224
6,944
4,163
29,889
23,625
14,517
8,535
7,605
6,830
3,941
1,311
14,467
15,394
8,359
5,283
6,459
18,231
8,945
2,485
97,615
90,704
51,213
29,688
11,485
8,066
4,003
1,621
109,101
98,770
55,216
31,309
Between2010and2012,U.S.importsofNOESfrom:Chinaincreasedby70.1percent;Sweden
increasedby121.0percent;andTaiwanincreasedby152.9percent.Between2010and2012,U.S.
importsofNOESfrom:GermanyandJapandecreasedby11.7percentand7.9percent,respectively.
IV3

Table IV-3--Continued
NOES: U.S. imports, by source, 2010-12, January-June 2012, and January-June 2013
Item
2010
China
Germany
Japan
Korea
Sweden
Taiwan
Average, subject
All others
Average, total imports
$924
1,142
1,134
1,049
1,557
1,170
1,133
1,304
1,143
China
Germany
Japan
Korea
Sweden
Taiwan
Subtotal, subject
All others
Total U.S. imports
14.0
18.3
34.1
8.9
7.2
11.5
94.0
6.0
100.0
China
Germany
Japan
Korea
Sweden
Taiwan
Subtotal, subject
All others
Total U.S. imports
11.3
18.3
33.8
8.2
9.8
11.7
93.1
6.9
100.0
Calendar year
January-June
2011
2012
2012
2013
Unit value (per short ton)
$1,201
$1,094
$1,151
$963
1,355
1,173
1,186
1,097
1,314
1,274
1,282
1,234
1,105
932
970
966
1,682
1,645
1,679
1,484
1,242
1,064
1,091
942
1,315
1,193
1,225
1,121
1,606
1,292
1,354
1,388
1,341
1,201
1,233
1,132
Share of quantity (percent)
20.2
17.1
16.5
29.7
17.7
11.6
13.1
13.7
28.0
22.5
25.3
25.0
8.5
8.9
9.1
4.9
10.6
11.4
11.1
12.9
6.4
20.8
18.3
9.5
91.2
92.4
93.4
95.8
8.8
7.6
6.6
4.2
100.0
100.0
100.0
100.0
Share of value (percent)
18.1
15.6
15.4
25.3
17.9
11.4
12.6
13.3
27.4
23.9
26.3
27.3
7.0
6.9
7.1
4.2
13.3
15.6
15.1
16.9
5.9
18.5
16.2
7.9
89.5
91.8
92.8
94.8
10.5
8.2
7.2
5.2
100.0
100.0
100.0
100.0
Landed, duty-paid.
Note.Because of rounding, figures may not add to the totals shown.

IV4

NEGLIGIBILITY
Thestatuterequiresthataninvestigationbeterminatedwithoutaninjury
determinationifimportsofthesubjectmerchandisearefoundtobenegligible.6Negligible
importsaregenerallydefinedintheTariffActof1930,asamended,asimportsfromacountry
ofmerchandisecorrespondingtoadomesticlikeproductwheresuchimportsaccountforless
than3percentofthevolumeofallsuchmerchandiseimportedintotheUnitedStatesinthe
mostrecent12monthperiodforwhichdataareavailablethatprecedesthefilingofthe
petitionortheinitiationoftheinvestigation.However,ifthereareimportsofsuchmerchandise
fromanumberofcountriessubjecttoinvestigationsinitiatedonthesamedaythatindividually
accountforlessthan3percentofthetotalvolumeofthesubjectmerchandise,andifthe
importsfromthosecountriescollectivelyaccountformorethan7percentofthevolumeofall
suchmerchandiseimportedintotheUnitedStatesduringtheapplicable12monthperiod,then
importsfromsuchcountriesaredeemednottobenegligible.7Importsfromeachsubject
countryanditsshareoftotalimportsarepresentedintableIV4.
Table IV-4
NOES: U.S. imports and shares of total imports, by sources, August 2012-July 2013
Imports
Share of total imports
Country
(short tons)
(percent)
China
14,162
22.4
7,470
11.8
Japan
14,056
22.2
Korea
3,542
5.6
Sweden
7,362
11.6
Taiwan
12,863
20.3
59,455
93.9
3,875
6.1
63,330
100.0
Germany
Subtotal (subject)
All others (nonsubject)
Total
Source: Compiled from official Commerce Statistics, HTS numbers 7225.19.00, 7226.19.10, and
7226.19.90
Sections703(a)(1),705(b)(1),733(a)(1),and735(b)(1)oftheAct(19U.S.C.1671b(a)(1),
1671d(b)(1),1673b(a)(1),and1673d(b)(1)).
7
Section771(24)oftheAct(19U.S.C1677(24)).
IV5

CUMULATIONCONSIDERATIONS
Inassessingwhetherimportsshouldbecumulated,theCommissiondetermines
whetherU.S.importsfromthesubjectcountriescompetewitheachotherandwiththe
domesticlikeproductandhasgenerallyconsideredfourfactors:(1)fungibility,(2)presenceof
salesorofferstosellinthesamegeographicalmarkets,(3)commonorsimilarchannelsof
distribution,and(4)simultaneouspresenceinthemarket.Issuesconcerningfungibility,
geographicalmarkets,andchannelsofdistributionareaddressedinPartIIofthisreport.
Petitionerarguesthatimportsfromallsubjectsourcesshouldbecumulatedbecause
therecordindicatesmorethanareasonableoverlapincompetitionandsatisfiesthestatutory
requirementmandatingcumulationintheCommissionsevaluationofmaterialinjuryandthe
Commissionsevaluationofthreatofmaterialinjury.8RespondentsfromChina,Germany,
Japan,andSwedenarguethatforthepurposesoftheCommissionsthreatanalysis,imports
fromChina,Germany,Japan,andSwedenshouldbedecumulated.9
OfficialCommercestatisticsshowthatthemajorityofU.S.importsofNOESfromChina,
Korea,andTaiwanenteredtheUnitedStatesthroughNewOrleans;themajorityofU.S.imports
fromNOESfromGermanyenteredtheUnitedStatesthroughPhiladelphia,PA;Cleveland,OH;
andSavannah,GA;andthemajorityofU.S.importsofNOESfromJapanandSwedenentered
throughNewOrleans,LAandHoustonGalveston,TX.OfficialCommercestatisticsalsoindicate
thatimportsofNOESfromGermany,Japan,andSwedenwereenteredeverymonthduringthe
periodofinvestigation;importsofNOESfromChinaandTaiwanenteredtheUnitedStatesin
everymonthbutoneandimportsofNOESfromKoreaenteredtheUnitedStatesin36ofthe42
months.10
APPARENTU.S.CONSUMPTION
TableIV5presentsdataonapparentU.S.consumptionforNOESovertheperiod
examined.AsdetailedintableIV5,apparentU.S.consumption,byquantity,increasedby***
percentbetween2010and2011,beforedecreasing***between2011and2012.ApparentU.S.
consumptionwas***percentlowerininterim2013thanininterim2012.U.S.producersU.S.
shipmentlevelswere***,increasing***percentbetween2010and2011anddecreasing***
between2011and2012.U.S.producersU.S.shipmentswere***percentlowerininterim
2013thanininterim2012.
Petitionerspostconferencebrief,p.19and34.
Baoshanspostconferencebrief,p.7.ThyssenKruppspostconferencebrief,p.1.Conference
transcript,p.102(LaFrankie)andp.106(McPhie);Japaneserespondentspostconferencebrief,p.42;
Conferencetranscript,p.116(Kaufmann).
10
OfficialCommercestatistics,HTSsubheadings7225.19.00,7226.19.10,and7226.19.90.
9
IV6

Table IV-5
NOES: U.S. shipments of domestic product, U.S. imports, by sources, and apparent U.S.
consumption, 2010-12, January-June 2012, and January-June 2013
Item
U.S. producers' shipments
U.S. imports from-China
Germany
Japan
Korea
Sweden
Taiwan
Subtotal, subject sources
All other sources
Total imports
Apparent consumption
U.S. producers' shipments
U.S. imports from-China
Germany
Japan
Korea
Sweden
Taiwan
Subtotal, subject sources
All other sources
Total imports
Apparent consumption
2010
Calendar year
January-June
2011
2012
2012
2013
***
***
***
***
***
8,275
10,831
20,124
5,267
4,235
6,776
55,507
3,559
59,066
***
16,401
14,385
22,747
6,880
8,599
5,203
74,215
7,151
81,366
***
14,071
9,568
18,540
7,331
9,359
17,136
76,006
6,242
82,248
***
Value ($1,000)
***
***
***
7,642
12,372
22,816
5,526
6,595
7,929
62,879
4,640
67,520
***
19,702
19,492
29,889
7,605
14,467
6,459
97,615
11,485
109,101
***
15,400
11,224
23,625
6,830
15,394
18,231
90,704
8,066
98,770
***
7,394
5,852
11,323
4,062
4,979
8,201
41,812
2,956
44,768
***
8,217
3,795
6,915
1,357
3,559
2,637
26,481
1,168
27,648
***
***
***
8,508
6,944
14,517
3,941
8,359
8,945
51,213
4,003
55,216
***
7,912
4,163
8,535
1,311
5,283
2,485
29,688
1,621
31,309
***
Source: Compiled from data submitted in response to Commission questionnaires and from official
statistics of the U.S. Department of Commerce.
U.S.MARKETSHARES
U.S.marketsharedataarepresentedintableIV6.Asdetailedbelow,U.S.producers
marketshare,byquantity,decreasedby***percentagepointsbetween2010and2012and
was***percentagepointshigherininterim2013thanininterim2012.
IV7

Table IV-6
NOES: Apparent U.S. consumption and market shares, 2010-12, January-June 2012, and JanuaryJune 2013
*
RATIOOFIMPORTSTOU.S.PRODUCTION
TableIV7presentsdataontheratioofU.S.importstoU.S.production.Asdetailed
below,theratioofimportstoU.S.productionincreasedfrom***percentin2010to***
percentin2012.Theratiowas***percentininterim2013comparedwith***percentin
interim2012.
Table IV-7
NOES: Ratio of U.S. imports to U.S. production, 2010-12, January-June 2012, and January-June
2013
Calendar year
January-June
Item
2010
2011
2012
2012
2013
U.S. production
***
***
***
***
***
U.S. imports from:
China
8,275
16,401
14,071
7,394
8,217
Germany
10,831
14,385
9,568
5,852
3,795
Japan
20,124
22,747
18,540
11,323
6,915
Korea
5,267
6,880
7,331
4,062
1,357
Sweden
4,235
8,599
9,359
4,979
3,559
Taiwan
6,776
5,203
17,136
8,201
2,637
Subject sources
55,507
74,215
76,006
41,812
26,481
All others
3,559
7,151
6,242
2,956
1,168
Total imports
59,066
81,366
82,248
44,768
27,648
Ratio of imports to production (percent)
U.S. imports from:
China
***
***
***
***
***
Germany
***
***
***
***
***
Japan
***
***
***
***
***
Korea
***
***
***
***
***
Sweden
***
***
***
***
***
Taiwan
***
***
***
***
***
Subject sources
***
***
***
***
***
All others
***
***
***
***
***
Total
***
***
***
***
***
Source: Compiled from data submitted in response to Commission questionnaires and from official
statistics of the U.S. Department of Commerce.
IV8
PARTV: PRICINGDATA
FACTORSAFFECTINGPRICES
Rawmaterialcosts
Rawmaterialsrepresentedbetween***and***percentofthecostsofgoodssoldfor
NOESover2010to2012,makingrawmaterialcostsa***factorinthepriceofNOES.
ForU.S.producers,theprimaryinputcostsusedinmanufacturingNOESareforscrap
steel,ferrosilicon,***,andelectricity.1Scrapsteeliscurrentlyamuchlargercostcomponent
thanferrosilicon.ForintegratedproducersofNOES,suchassomesubjectcountryproducers,
ironoreandcokingcoalwouldlikelybetheprincipalrawmaterialinputs.***.
***describedthepricesofrawmaterialsusedtoproduceNOESasfluctuatingfromyear
toyear.However,***addedthatpricesforrawmaterialshavegenerallyincreasedoverthe
lastthreeyears,andexpectedthosepricestocontinuetoincreaseinto2014.Importers
generallydescribedironore,cokingcoal,and/orhotrolledbandastheprimaryrawmaterials
forNOES,withsomeimportersaddingthatpricesforthesematerialshadfalleninrecentyears.
Severalotherimportersdescribedrawmaterialpricesasaffectedbyotherindustrialsectors
(includingthoseinChina)demandforthesamerawmaterials.***statedthatAKSteelhad
insulateditselffromfluctuationsinNOESrawmaterialpricesbecauseitownscaptivesupplies
ofthoserawmaterials.***statedthatrawmaterialspriceshadhadlittleeffectonthepriceof
NOES.Ontheotherhand,JapaneserespondentsstatedthatNOESpriceshadbeenfollowing
rawmaterialtrends.2
Pricetrendsforscrapsteel,ferrosilicon,electicity,andnaturalgasareshowninfigureV
1.Pricesforscrapsteelandferrosiliconroseinlate2010orearly2011,andwhiledown
somewhatfromearly2011,remain15to20percentaboveJanuary2010levels.Naturalgas
pricesfellfromearly2010toearly2012,buthaverisensincethen.Naturalgaspricesremain
nearly40percentbelowJanuary2010levels.Asidefromseasonalfluctuations,theindustrial
priceofelectricitygenerallyremainedatthesamelevelsinceJanuary2010.
Conferencetranscript,p.62(Petersen),andandpetitionerspostconferencebrief,answerstostaff
questions,pp.89.
2
Japaneserespondentspostconferencebrief,p.25.
V1
Figure V-1
NOES: Price trends of inputs, January 2010 to September 2013
Figure continued on next page.
V2
Figure V-1Continued.
NOES: Price trends of inputs, January 2010 to September 2013
V3
U.S.inlandtransportationcosts
***and19importersreportedthattheytypicallyarrangetransportationofNOESto
theircustomerslocations,while***and2importersreportedthattheirpurchasersarrange
transportation.U.S.producersreportedthattheirU.S.inlandtransportationcostsrangedfrom
0(***3)to10percent(***).Importersreportedcostsof3to8percent,withimporters***
amongthosereporting3percentand***amongthosereporting78percent.
PRICINGPRACTICES
Pricingmethods
U.S.producersandimporters4reportedusingtransactionbytransactionnegotiations
andcontractsfortheirsalesofNOES,aspresentedintableV1.
Table V-1
NOES: U.S. producers and importers reported price-setting methods, by number of responding
firms1
Method
U.S. producers
Importers
***
12
Transaction-by-transaction
***
18
Contract
***
1
Set price list
***
0
Other
1
The sum of responses down will not add up to the total number of responding firms as each firm was
instructed to check all applicable price setting methods employed. Five importers reported both
transaction-by-transaction negotiations and contracts.
***.56
U.S.producersandimportersreportedsellingthemajorityoftheirNOESundershort
termcontracts(uptoanincluding12months).AsshownintableV2,U.S.producersand
importersreportedtheir2012U.S.commercialshipmentsofNOESbytypeofsale.7
Staffinterviewwith***.
***.
5
Emailfrom***November7,2013,andpetitionerspostconferencebrief,answerstostaff
questions,pp.89.
6
***indicatedthatit***.Baosteel,ThyssenKruppEurope,andThyssenKruppNorthAmerica
indicatedthattheydidnotusesurcharges.CISAspostconferencebrief,exhibit1,andThyssenKrupps
postconferencebrief,answertostaffquestion6.
4
V4
***reportedthat***shorttermcontractswereusuallyfor***.Nineimporters
reportedshorttermcontractsof90days,andsevenadditionalimportersreportedshortterm
contractsof30180days.Only***reportedlongtermcontractdurationsofseveralyears.
ForU.S.producersofNOES,shorttermcontracts***pricerenegotiationand***meet
orreleaseprovisions.***.ForimportersofsubjectcountryNOES,shorttermcontracts
generallydidnotallowpricerenegotiation(***),fixedeitherpriceandquantity(***importers)
oronlyprice(***importers),anddidnothavemeetorreleaseprovisions(***importers,
versus***thatdid).The***importerswithlongtermcontractsdescribedsuchcontractsas
***pricerenegotiation,***meetorreleaseprovisions,andfixing***.
Table V-2
NOES: U.S. producers and importers shares of U.S. commercial shipments by type of sale, 2012
*
Salestermsanddiscounts
***andthreeimporterstypicallyquotepricesonanf.o.b.basis,while19importers
quotepricesonadeliveredbasis.Twentythreeimporters***donotofferdiscountsfortheir
salesofNOES.However,***reportedofferingquantitydiscountsandannualvolume
discounts.***and15importersreportedsalestermsofnet30days,6importersreportedsales
termsofnet60days,andtwoimportersreportedotherterms.
PRICEDATA
TheCommissionrequestedU.S.producersandimporterstoprovidequarterlydatafor
thetotalquantityandf.o.b.valueofthefollowingNOESproductsshippedtounrelatedU.S.
customersduringJanuary2010toJune2013.8
Product1.M19,0.450.50mmthickness,fullyprocessed,maximumcoreloss2.90
W/kg(1.5T;50Hz),600mmormorewide,coated.
(continued)
7
Ascanbeseeninthetable,theaverageforallimporterswas***percentof2012commercial
shipmentsundershorttermcontracts,andimportersofNOESfromallsubjectcountriesexcept
Swedenhadatleast***percentundershorttermcontracts.ImportersofSwedishNOESreported***
percentunderlongtermcontracts,***percentshorttermcontracts,andthebalanceasspotsales.
However,***reportedthatitsaveragecontractdurationforlongtermsaleswas***.
8
ImporterMetalliaandTaiwanproducerChinaSteelstatedthatallthepricingproductscompete
withCRMLproducts.ChinaSteelprovidedalistofwhatitdescribedascompetingCRMLproductsinits
postconferencebrief.Conferencetranscript,pp.95and132(Weinstein),andChinaSteels
postconferencebrief,exhibit2.
V5
W/kg(1.5T;50Hz),lessthan600mmwide,coated.
W/kg(1.5T;50Hz),lessthan600mmwide,coated.
OneU.S.producerand17importersprovidedusablepricingdataforsalesofthe
requestedproducts,althoughnotallfirmsreportedpricingforallproductsforallquarters.9
Pricingdatareportedbythesefirmsaccountedforapproximately***percentofU.S.
producersshipmentsofNOESin2012,***percentofU.S.shipmentsofsubjectimportsfrom
Chinain2012,***percentofU.S.shipmentsofsubjectimportsfromGermanyin2012,10***
percentofU.S.shipmentsofsubjectimportsfromJapanin2012,***percentofU.S.shipments
ofsubjectimportsfromKoreain2012,***percentofU.S.shipmentsofsubjectimportsfrom
Swedenin2012,and***percentofU.S.shipmentsofsubjectimportsfromTaiwanin2012.
Pricedataforproducts18arepresentedintablesV3toV10andfigureV2.
Severalimporterslikelysuppliedvaluedatainthousandsofdollars.Staffcontactedthesefirmsand
correctedtheirvaluedatauponconfirmation.Twofirms,***,didnotreplytostaffinquiries.Staff
adjustedtheirvaluedatabyafactorof1,000.Additionally,***submitted***.Seeemailfrom***,
November7,2013.Additionally,staffhasremovedonequarterofdatafrom***inwhichitreporteda
quantityof1,000tonsandavalueof$0,andonequarterofdataeachfrom***.Seeemailsfrom***,
November8,2013.
10
ThyssenKruppEuropeandThyssenKruppNorthAmericastatedthattheirpricingdataare
distortedbecausetheyselluncoatedNOESinmastercoilsratherthanslit,resultinginalowerprice
product.ThyssenKruppspostconferencebrief,p.14.
V6
Table V-3
NOES: Weighted-average f.o.b. prices and quantities of domestic and imported product 11 and
margins of underselling/(overselling), by quarters, January 2010-June 2013
*
Table V-4
*
Table V-5
*
Table V-6
*
Table V-7
*
Table V-8
*
Table V-9
*
*
*
*
*
*
*
Table V-10
*
V7
Figure V-2
NOES: Weighted-average prices and quantities of domestic and imported product, by quarters,
January 2010-June 2013
*
Pricetrends
PricesforNOESpricingproductsshowedmixedtrendsduringJanuary2010toJune
2013.TableV11summarizesthepricetrends,bycountryandbyproduct.Asshowninthe
table,domesticpricechangesrangedfromadecreaseof28.0percenttoanincreaseof10.8
percentduringJanuary2012toJune2013,whileimportpricechangesrangedfromadecrease
of43.9percenttoanincreaseof47.1percent.
Table V-11
NOES: Summary of weighted-average f.o.b. prices for products 1-8 from the United States and
subject countries
*
Pricecomparisons
AsshownintableV12,pricesforNOESimportedfromsubjectcountrieswerebelow
thoseforU.S.producedproductin218of296instances;marginsofundersellingrangedfrom
0.2to49.4percent.Intheremaining78instances,pricesforNOESfromsubjectcountrieswere
between0.2to68.9percentabovepricesforthedomesticproduct.
Table V-12
NOES: Instances of underselling/overselling and the range and average of margins, by country,
January 2010-June 2013
Underselling
Overselling
Number
Average
Average
of
Range
margin
Number of
Range
margin
Source
instances
(percent)
(percent)
instances
(percent)
(percent)
China
47
2.6 to 42.7
24.3
1
3.1 to 3.1
3.1
Germany
50
3.2 to 40.1
18.4
11
1.1 to 17.5
5.8
Japan
45
0.6 to 23.1
9.2
26
0.4 to 28.3
11.9
Korea
16
14.7 to 49.4
28.0
1
15.3 to 15.3
15.3
Sweden
34
0.2 to 38.5
12.6
34
0.2 to 68.9
18.3
Taiwan
26
2.3 to 30.5
17.2
5
2.7 to 23.6
9.5
Total
218
0.2 to 49.4
17.4
78
0.2 to 68.9
V8
13.6
Attheconference,petitionerstatedthatitscustomershadtolditthatsubjectimports
wereundersellingitspricesbyapproximately25percent.Itaddedthatitrespondedby
loweringpricesin2013.11
LOSTSALESANDLOSTREVENUE
TheCommissionrequestedU.S.producersofNOEStoreportanyinstancesoflostsales
orrevenuetheyexperiencedduetocompetitionfromimportsofNOESfromsubjectcountries
sinceJanuary2010.OfthetworespondingU.S.producers,***reportedthat***hadtoeither
reducepricesorrollbackannouncedpriceincreases.12The***lostsalesallegationstotaled
$***andinvolved***shorttonsofNOES,andthe***lostrevenueallegationstotaled$***
andinvolved***shorttonsofNOES.13Staffattemptedtocontactallnamedpurchasersanda
summaryoftheinformationobtainedfollowsinthedescriptionsbelowandintablesV13and
V14.14
Purchasersnamedinthelostsalesandlostrevenueallegationsalsowereasked
whethertheyshiftedtheirpurchasesofNOESfromU.S.producerstosuppliersofNOESfrom
China,Germany,Japan,Korea,Sweden,andTaiwansinceJanuary2010.Inaddition,theywere
askedwhetherU.S.producersreducedtheirpricesinordertocompetewithsuppliersofNOES
fromthosecountries.15
Twoofthesixrespondingpurchasers(including***)reportedthattheyhadshifted
purchasesofNOESfromU.S.producerstosubjectimportssinceJanuary2010;oneofthese
purchasers(***)reportedthatpricewasthereasonfortheshift.***describedthevolumeof
salesthatitshiftedduetopriceas***.***statedthatithadshiftedpurchases,buttheshift
wasdueto***,andnotduetoprice.***didnotindicatewhetherithadshiftedpurchasesor
not,butdidstatethatithas***.Itcontinuedthat***.
However,fourpurchasers(including***)statedthattheyhadnotshifted.***stated
thatithadbeenpurchasing***.***referenceditsextensivecomments,summarizedbelow.
Threepurchasers(***)reportedthatU.S.producershadreducedtheirpricesinorderto
competewiththepricesofsubjectimports.***indicatedthatU.S.producersreducedtheir***
in2013.(***indicatedthattheydidnotknow).However,twopurchasers(including***
11
Conferencetranscript,p.32(Petersen).
***.
13
Inseveralinstances,volumesweresuppliedforthreeallegationstogether.Inthesecases,staffhas
dividedthevolumesandvaluesequallyamongthethreeallegations.
14
Inthesetables,pricesarepresentedinshorttons.Infaxestopurchasers,however,priceswere
presentedinhundredweight,amorecommonlyusedmeasureintheindustry.Additionally,severalof
theallegationsinvolved***.Seeemailfrom***,andpetition,exhibitI12.
15
***didnotrespondtothesequestions.
12
V9
reportedthatU.S.producershadnotreducedtheirprices.***elaboratedthat***.***added
that***.
Purchasercomments
***.16***
Table V-13
NOES: U.S. producers lost sales allegations
*
Table V-14
NOES: U.S. producers lost revenue allegations
*
16
***
V10
PARTVI: FINANCIALEXPERIENCEOFU.S.FIRMS
BACKGROUND
AKSteelandNucorprovideduseablefinancialdataontheiroperationsproducingNOES.
AKSteelisthepetitionerandbothfirmsproducedthisproductintheUnitedStatesin2012.1
***.BothfirmsappeartosellNOEStomanufacturersofelectricalmotorsandgeneratorsinthe
infrastructureandmanufacturingmarkets.2ThereisadistinctionbetweenAKSteelandNucor
insofaras***.Forbothfirms,salesofNOESrepresentsonlya***fractionoftheoverall
business.3
OPERATIONSONNOES
IncomeandlossdataforthetworeportingU.S.firmsonNOESarepresentedintable
VI1,andarebrieflysummarizedhere.Generallyspeaking,salesquantitydeclinedirregularly
from2010to2012andwaslowerinJanuaryJune2013thaninJanuaryJune2012.Salesvalue
rose***irregularlyduringthefullyearlyperiodsbutlikesalesquantitywas***ininterim2013
thanininterim2012.4Totalcostofgoodssold(COGS)***irregularlybetweentheyearly
periodsandwas***interim2013thanininterim2012.Totalselling,generalandadministrative
(SG&A)expenses***from2010to2012andwere***inJanuaryJune2013thaninJanuary
June2012.Thecombinedoperatinglossincreasedfrom2010to2012andwas***higherin
JanuaryJune2013comparedwiththeperiodoneyearearlier.5Incomeandlossdataare
presentedseparatelyforthetwoU.S.firmsintableVI2.
***.Bothfirmsreporteddataineachperiodduring2010June2013.***.AKSteelprovideda***.
AKSteel,2012AnnualReportandForm10K,p.32.Muchofthediscussiononthispageofthe10K
regardingtheelectricalsteelmarketisrelevantonlytoGOES,whichisusedinpowertransmissionand
distributiontransformers,andisoutsidethescopeoftheseinvestigations.
3
AKSteelsoperationsonNOESconstitute***firmsoveralloperations.NOESisincludedinthe
segmentproducingandsellingstainlesssteelproductsandelectricalsteelproducts.Thelattercategory
consistsofgradesofGOESandNOES,whicharebothproducedashotrolledsteelsheetattheAKSteels
plantatButler,PennsylvaniaandfinishedatitsplantinZanesville,Ohio.AKSteelstotalsaleswere
$5,933.7millionanditsoperatinglosswas$128.1millionin2012.NOESoperationsrepresent***
percentoftotalsalesand***percentofthefirmsoveralloperatingloss.SalesofNOESaccountedfor
about***percent,byquantity,ofsalesofthefirmsshipmentsofstainlessandelectricalsteels
(segmentreportingthatincludesNOES).AKSteels2012AnnualReportandForm10K,pp.15and17.
Likewise,NOESconstitutes***.
4
AKSteelspostconferencebriefindicatesthat***.Petitionerspostconferencebrief,p.30.
5
InAKSteelsdiscussionof2012financialresults,itstatedthatThechallengingdomesticandglobal
economicconditionsthattheCompany,andmuchofthesteelindustry,havefacedsincethebeginning
oftheglobalrecessionin2008continuedin2012andhadanegativeimpactontheCompanysfinancial
performance...TheCompanyalsocontinuedtoexperienceadeclineinelectricalsteelpricingduring
(continued...)
2
VI1
Table VI-1
NOES: Results of operations of U.S. firms, 2010-12, January-June 2012, and January-June 2013
Table VI-2
NOES: Results of operations of U.S. firms, by firm, 2010-12, January-June 2012, and January-June
2013
Netsales
AsmaybeseenfromtablesVI1andVI2,totalsalesincreasedfrom2010toahighin
2011basedongreatervolumeandaverageunitvalueofsales.Totalsalesdeclinedfrom2011
to2012asbothvolumeandaverageunitvalueswerelower.Totalnetsaleswerelowerin
JanuaryJune2013versusthecomparableperiodin2012forthesamereason.6Asdepictedin
tableVI2,AKSteel***.7BothfirmstotalnetsalesincludeU.S.commercialshipmentsand
exports.8Exports***.Theshareofexportsintotalshipments***.AKSteelsshipmentsof
semiprocessedNOESaccountedfor***ofitstotalshipmentsin2012;Nucorsshipmentsof
semiprocessedNOESaccountedfor***ofitstotalshipmentsinthatyear.9
Costs/expenses
TotalCOGSonavaluebasisandasaratiotosales***between2010and2012.While
totalCOGSwere***inJanuaryJune2013thaninJanuaryJune2012,theratioofCOGStosales
***.AsshownintableVI2,theratioofCOGStosales***between2010and2012.Whilethe
ratiowas***.TheaverageunitvalueofCOGS***betweenthefullyearlyperiodsandwas***
(continued)
theyear,particularlywithregardtointernationalsales,asaresultoftheweakglobaleconomic
conditionsandincreasedglobalproductioncapacity.AKSteels2012AnnualReportandForm10K,p
16.AKSteelnotedthatnetsalestocustomersoutsidetheUnitedStatesalsowerelowerin2012
comparedto2011.ThefirmalsostatedthatamajorityofrevenuefromsalesoutsidetheUnitedStates
isassociatedwithelectricalandstainlesssteelproducts.Ibid.p.18.
6
Seenote4,earlierinthissectionofthereport.
7
Inresponsetoaquestionfromstaff,Nucorstated***.EmailtoCommissionstafffrom***,
November18,2013.
8
Nucorexportedto***andAKSteelexportedto***.
9
Calculatedfromthequestionnaireresponsesof***.
VI2
ininterim2013thanininterim2012.ThecostcomponentsofCOGS***.10Ontheotherhand,
***.11
TotalSG&Aexpensesdeclined***between2010and2012andwerelowerinJanuary
June2013versusthecomparableperiodin2012.ThedollarvalueofSG&Aexpensesis***,as
depictedintableVI2.
Profitability
AsshownintableVI1,totaloperating***.AsshownintableVI2,***.12Netincome
beforetaxesandcashflowsfollowedthetrendsofoperatingincomeor(loss).Only***.13
Varianceanalysis
AvarianceanalysisfortheoperationsofAKSteelandNucoronNOESispresentedin
tableVI3.14TheinformationforthisvarianceanalysisisderivedfromtableVI1.Thisindicates
thatthe***.
10
Allthingsbeingequal,giventhe***.
Changesinaverageunitvaluesofsalesandrawmaterialcostsgenerallytrackedeachother
between2010and2012andbetweentheinterimperiods.Theyeartoyeardifferenceinthechangeof
thesetwovaluesindicateswhetherthemetalspreadwidenedornarrowed(widenedindicatessales
unitvaluesrosemore,orfellless,thantheaverageunitvalueofrawmaterialcosts,whereas
narrowedindicatestheopposite).Themetalspread***.
12
Initspostconferencebrief,AKSteelreportedthat***.Petitionerspostconferencebrief,answers
toquestionsfromCommissionstaff,p.7.
13
Aportionof***.SeeemailtoCommissionstafffrom***,November19,2013.AKSteelhasa
definedbenefitpensionandmedicalbenefitsplan;itprovidesnoncontributorypensionandvarious
healthcareandlifeinsurancebenefitstoasignificantportionofitsemployeesandretirees.The
pensionplanisnotfullyfunded.Thecontributionamountsarepresentedanddiscussedinthefirms
2012Form10Konpages5964.Inaddition,AKSteelrecognizedpensioncorridorchargesinitsannual
report($268.1millionand$157.3millionin2011and2012,respectively).Theseareaccruednoncash
charges,whichreflectunrecognizedactuarialnetgainsorlossesthatexceed10%ofthelargerof
projectedbenefitobligationsorplanassets.Foradiscussionofthis,seeAKSteels2012Form10K,p.7.
Thepensioncorridorchargewas***.EmailtoCommissionstafffrom***,November19,2013.
Nucormakescontributionstoaprofitsharingandretirementsavingsplan(termedadefined
contributionplan).Thefirmalsohasamedicalplancoveringcertaineligibleearlyretirees.SeeNucors
2012AnnualReport,p.62.
14
TheCommissionsvarianceanalysisiscalculatedinthreeparts:Salesvariance,costofsales
variance(COGSvariance),andSG&Aexpensevariance.Eachpartconsistsofapricevariance(inthecase
ofthesalesvariance)oracostorexpensevariance(inthecaseoftheCOGSandSG&Aexpense
variance),andavolumevariance.Thesalesorcost/expensevarianceiscalculatedasthechangeinunit
priceorperunitcost/expensetimesthenewvolume,whilethevolumevarianceiscalculatedasthe
changeinvolumetimestheoldunitpriceorperunitcost/expense.Summarizedatthebottomofthe
(continued...)
11
VI3
Table VI-3
NOES: Variance analysis on the operations of U.S. firms, 2010-12, January-June 2012, and
January-June 2013
CAPITALEXPENDITURESANDRESEARCHANDDEVELOPMENTEXPENSES
TableVI4presentscapitalexpendituresandresearchanddevelopment(R&D)
expensesmadebyAKSteelandNucor.AKSteelreportedthatthesegenerallyconsistedofa
newhighlyefficientelectricarcfurnace,anewladlemetallurgyfurnace,andseveralupgrades
ofprocessingequipmentatitsplantsinButler,Pennsylvania,andZanesville,Ohio.15Nucor
reported***.16
Table VI-4
NOES: Capital expenditures and research and development expenses of U.S. firms, 2010-12,
January-June 2012, and January-June 2013
ASSETSANDRETURNONINVESTMENT
TableVI5presentsdataonthetotalassetsanditsreturnoninvestment(ROI)forthe
tworeportingU.S.firms.17ROIisaratiothatiscalculatedbydividingoperatingincomeor(loss)
bytotalassets.ROIfollowedthetrendinoperatingincomeorloss,shownearlierintableVI1.
(continued)
table,thepricevarianceisfromsales;thecost/expensevarianceisthesumofthoseitemsfromCOGS
andSG&Avariances,respectively,andthevolumevarianceisthesumofthevolumecomponentsofthe
netsales,COGS,andSG&Aexpensevariances.Theoverallvolumecomponentofthevarianceanalysisis
generallysmall.
15
Conferencetranscript,p.66(Schoen).
16
InanemailtoCommissionstaff***.EmailtoCommissionstafffrom***,November15,2013.
17
AttheconferencestaffaskedAKSteeltodefineadequatereturn.Thisquestionreferredto***.
AKSteeldefineditas***.Petitionerspostconferencebrief,answerstoquestionsfromCommission
staff,p.7.Bywayofillustrationofthefirmscostofcapital,inNovember2012AKSteelissued$350
millionaggregateprincipalamountof8.750%seniorsecurednotesdueDecember2018;inthesame
monthitissued$150millionof5.0%seniorunsecurednotesdueDecember2019.Bothissuanceswere
usedtorepayoutstandingborrowingsunderthefirmscreditfacility.Thefirmhasacreditfacilityof$1.1
billionatanominalinterestrateof2.3percent,whichexpiresin2016.SeeAKSteelsannualreport,pp.
57.ItmaybenotedthatNucorsnotesduein2018haveaninterestrateofapproximately5.85%.Nucor
alsohasanunsecuredcreditfacilityforupto$1.50billioninrevolvingloansbasedonthecreditratingof
thefirmsseniorunsecureddebt.SeeNucors2012AnnualReport,p.57.
VI4
Table VI-5
NOES: U.S. firms total assets and return on investment, 2010-12, January-June 2012, and
January-June 2013
CAPITALANDINVESTMENT
TheCommissionrequestedU.S.producersofNOEStodescribeanyactualorpotential
negativeeffectsofimportsofNOESfromChina,Germany,Japan,Korea,Sweden,and/or
Taiwanontheirfirmsgrowth,investment,abilitytoraisecapital,developmentandproduction
efforts,orthescaleofcapitalinvestments.TheresponsesofAKSteelandNucorareshown
below.
Actualnegativeeffects
AKSteel:***.
Nucor:***.
Anticipatednegativeeffects
AKSteel:***.Thiscommentwasmadewithrespecttoeachofthesubjectcountries.
Nucor:***.Thiscommentwasmadewithrespecttoeachofthesubjectcountries.
VI5
PART VII: THREAT CONSIDERATIONS AND INFORMATION ON

NONSUBJECT COUNTRIES
Section 771(7)(F)(i) of the Act (19 U.S.C. 1677(7)(F)(i)) provides that
In determining whether an industry in the United States is threatened

with material injury by reason of imports (or sales for importation) of the
subject merchandise, the Commission shall consider, among other
relevant economic factors 1-(I) if a countervailable subsidy is involved, such information as may be
presented to it by the administering authority as to the nature of
the subsidy (particularly as to whether the countervailable subsidy
is a subsidy described in Article 3 or 6.1 of the Subsidies
Agreement), and whether imports of the subject merchandise are
likely to increase,
(II) any existing unused production capacity or imminent, substantial
increase in production capacity in the exporting country indicating
the likelihood of substantially increased imports of the subject
merchandise into the United States, taking into account the
availability of other export markets to absorb any additional
exports,
(III) a significant rate of increase of the volume or market penetration of
imports of the subject merchandise indicating the likelihood of
substantially increased imports,
(IV) whether imports of the subject merchandise are entering at prices
that are likely to have a significant depressing or suppressing
effect on domestic prices, and are likely to increase demand for
further imports,
(V) inventories of the subject merchandise,
Section 771(7)(F)(ii) of the Act (19 U.S.C. 1677(7)(F)(ii)) provides that The Commission shall
consider {these factors} . . . as a whole in making a determination of whether further dumped or
subsidized imports are imminent and whether material injury by reason of imports would occur unless
an order is issued or a suspension agreement is accepted under this title. The presence or absence of
any factor which the Commission is required to consider . . . shall not necessarily give decisive guidance
with respect to the determination. Such a determination may not be made on the basis of mere
conjecture or supposition.
VII-1
(VI) the potential for product-shifting if production facilities in the foreign

country, which can be used to produce the subject merchandise,
are currently being used to produce other products,
(VII)
in any investigation under this title which involves imports of both

a raw agricultural product (within the meaning of paragraph
(4)(E)(iv)) and any product processed from such raw agricultural
product, the likelihood that there will be increased imports, by
reason of product shifting, if there is an affirmative determination
by the Commission under section 705(b)(1) or 735(b)(1) with
respect to either the raw agricultural product or the processed
agricultural product (but not both),
(VIII)
the actual and potential negative effects on the existing

development and production efforts of the domestic industry,
including efforts to develop a derivative or more advanced version
of the domestic like product, and
(IX) any other demonstrable adverse trends that indicate the probability
that there is likely to be material injury by reason of imports (or
sale for importation) of the subject merchandise (whether or not it
is actually being imported at the time). 2
Information on the nature of the alleged subsidies was presented earlier in this report;
information on the volume and pricing of imports of the subject merchandise is presented in
Parts IV and V; and information on the effects of imports of the subject merchandise on U.S.
producers existing development and production efforts is presented in Part VI. Information on
inventories of the subject merchandise; foreign producers operations, including the potential
for product-shifting; any other threat indicators, if applicable; and any dumping in thirdcountry markets, follows. Also presented in this section of the report is information obtained
for consideration by the Commission on nonsubject countries.
Section 771(7)(F)(iii) of the Act (19 U.S.C. 1677(7)(F)(iii)) further provides that, in antidumping
investigations, . . . the Commission shall consider whether dumping in the markets of foreign countries
(as evidenced by dumping findings or antidumping remedies in other WTO member markets against the
same class or kind of merchandise manufactured or exported by the same party as under investigation)
suggests a threat of material injury to the domestic industry.
VII-2
THE INDUSTRY IN CHINA

Table VII-1 presents data provided by Baosteel and Angang, two producers of NOES in
China. 3 Chinese exports of NOES to the United States, all of which consisted of fully processed
NOES, accounted for *** percent of U.S. imports of NOES from China in 2012. 4 Chinese
production capacity *** between 2010 and 2012 but ***. Chinese producers home market
shipments accounted for the vast majority (***) percent of their total shipments in 2012.
Exports of NOES from China to the United States, which accounted for no more than ***
of its total shipments over the period, decreased between 2010 and 2012 and were higher in
interim 2013 than in interim 2012. Exports to markets other than the United States accounted
for between *** and *** percent of total shipments over the period.5 Baosteel and Angang
reported that *** and *** percent of their respective total sales in the most recent fiscal year
were represented by sales of NOES. *** reported maintaining inventories of NOES in the United
States since 2010.
Table VII-1
NOES: Data for producers in China, 2010-2012, January-June 2012, and January-June 2013
*
THE INDUSTRY IN GERMANY

Tables VII-2 present data provided by ArcelorMittal Germany, 6 CDW, 7 and
ThyssenKrupp, 8 three producers of NOES in Germany. These firms exports to the United States,
all of which consisted of fully processed NOES, accounted for *** percent of U.S. imports of
NOES from Germany in 2012. Exports of NOES to the United States accounted for no greater
than *** percent of German producers reported total shipments.9 Based on testimony
3
Baosteel is related to Baosteel America Inc., an importer of NOES in the United States. CISA believes
that ***. CISAs postconference brief, p. 6. Angang is related to Angang America, an importer of NOES in
the United States. Angang ***.
4
CISA argues that official import data with regard to China are inaccurate, citing ***. According to
official import statistics, imports from China increased by 70.1 percent between 2010 and 2012; ***
over the same period.
5
Principal export markets identified included: ***.
6
ArcelorMittal Germany is related to NOES producers ArcelorMittal Frdek-Mstek (Czech Republic)
and ArcelorMittal Mediteranee (France) as well as ArcelorMittal America, an importer of NOES in the
United States. ArcelorMittal Germany reported ***.
7
CDW is related to CDW Services, an importer of NOES in the United States.
8
ThyssenKrupp is related to ThyssenKrupp Electrical Steel India Private Limited, a producer of NOES
in India, and ThyssenKrupp Steel North America, an importer of NOES in the United States.
9
Virtually all (other than a few sample test shipments) of ThyssenKrupps exports of NOES to the U.S.
consist of master coils, which are not slit. ThyssenKrupps postconference brief, Answers to staff
questions, p. 3.
VII-3
presented at the staff conference, exports of NOES from Germany to the United States are
projected to decrease due of specific developments in customer relationships. 10 German
producers cite EU countries as their principal export markets. 11 ArcelorMittal Germany, CDW
and ThyssenKrupp reported that *** percent, *** percent and *** percent of their respective
total sales in the most recent fiscal year were represented by sales of NOES.
When asked to describe changes in relation to the production of NOES, ThyssenKrupp
reported ***. When asked to describe the constraints that set limits on the firms production
capacity, ArcelorMittal Germany reported that ***; CDW reported ***; and ThyssenKrupp cited
the ***. ThyssenKrupp also noted that production capacity of NOES is limited by ***.
When asked if their firms have the ability to switch production between NOES and other
products using the same equipment and labor, ArcelorMittal Germany reported that ***.
ThyssenKrupp indicated that it has conducted test runs for certain cold-rolled products at its
NOES facility, ensuring that it will be able utilization unused NOES capacity in the future. 12 In its
questionnaire response, ***. Although it does not currently do so, *** using the same
equipment and machinery used to produce NOES.
When asked to identify what other products are made on the same equipment and
machinery used in the production of NOES, ***. Table VII-3 provides overall capacity and
production data with regard to these products.
Table VII-2
NOES: Data for producers in Germany, 2010-2012, January-June 2012, and January-June 2013
*
Table VII-3
NOES: German producers overall capacity and production of products on the same equipment
as NOES, 2010-12, January-June 2012, and January-June 2013
*
10
ThyssenKrupps largest U.S. customer for NOES shifted much of its stamping operations from the
United States to Germany in 2012. As a result, ThyssenKrupp halted all of its U.S. exports of NOES to this
customer and has redirected these shipments to the German market. Conference transcript, p. 103
(LaFrankie) and ThyssenKrupps postconference brief, p. 12. CDW's projected exports in 2013 and 2014
are lower because a major customer that accounted for over half of its U.S. sales (***), completed a
major product using a specialized product manufactured by CDW in 2012 and does not plan to begin
another one. Conference transcript, pp. 107-108 (McPhie) and CDWs postconference brief, p. 6.
11
ThyssenKrupps postconference brief, p. 17.
12
Conference transcript, p. 104 (LaFrankie) and ThyssenKrupps postconference brief, p. 15.
VII-4
THE INDUSTRY IN JAPAN

Table VII-4 presents data provided by Metal One, 13 JFE, 14 and Nippon Steel, 15 three
producers/exporters of NOES in Japan. These firms exports to the United States, all of which
consisted of fully processed NOES, accounted for *** percent of U.S. imports of NOES from
Japan in 2012. Exports of NOES from Japan accounted for no greater than *** percent of total
shipments over the period. Exports of NOES from Japan increased between 2010 and 2012, but
were lower in interim 2013 than in interim 2012. Exports to markets other than the United
States accounted for the between *** and *** over the period, with principal export markets
being identified as ***. JFE and Nippon Steel reported that *** percent and their respective
total sales in the most recent fiscal year were represented by sales of NOES.
When asked to describe changes in relation to the production of NOES, JFE reported
that *** and Nippon Steel reported the ***. 16 Nippon Steel added that ***. When asked to
describe the constraints that set limits on the firms production capacity, JFE reported that ***.
Nippon Steel added that ***.
When asked if their firms have the ability to switch production between NOES and other
products using the same equipment and labor, JFE identified *** and Nippon Steel indicated
***.
When asked to identify what other products are made on the same equipment and
machinery used in the production of NOES, Nippon Steel reported *** and JFE reported ***. 17
Table VII-5 provides Japanese producers overall capacity and production data with regard to
products that use the same equipment and machinery used to produce NOES.
Table VII-4
NOES: Data for producers in Japan, 2010-2012, January-June 2012, and January-June 2013
*
13
Metal One is related to Metal One America, an importer of NOES in the United States. Metal One
reported ***.
14
JFE is related to JFE Shoji America, an importer of NOES in the United States. JFE has reportedly
entered into a technical assistance arrangement with JSW Steel to produce NOES in India by late 2014.
Conference transcript, p. 47 (Jones).
15
Nippon Steel is related to Sumitomo America, an importer of NOES in the United States. Nippon
Steel is related to China Steel Sumikin-Vietnam Joint Stock Company, a joint venture with China Steel of
Taiwan, which will produce NOES in Vietnam. Conference transcript, p. 47-48 (Jones).
16
Nippon Steel reported ***.
17
Based on the scope of these investigations, NOES is defined as having a thickness of 0.20 mm or
more and containing by weight at least 1.25 percent of silicon and less than 3.5 percent of silicon.
VII-5
Table VII-5
NOES: Japanese producers overall capacity and production of products on the same equipment
*
THE INDUSTRY IN KOREA

Table VII-6 presents data provided by POSCO, the sole producer of NOES in Korea.18
POSCOs exports to the United States, all of which consisted of fully processed NOES, accounted
for *** percent of U.S. imports of NOES from Korea in 2012. POSCOs exports to the United
States, which accounted for no greater than *** percent of total shipments, decreased
between 2010 and 2012 and were lower in interim 2013 than in interim 2012. POSCO cited
South Asia and China as its principal export markets. POSCO reported that *** percent and
their respective total sales in the most recent fiscal year were represented by sales of NOES.
When asked to describe the constraints that set limits on the firms production capacity,
POSCO reported that ***.
POSCO reported *** using the same equipment and machinery used in the production
of NOES. Table VII-7 provides POSCOs overall capacity and production data with regard to
products that use the same equipment and machinery used to produce NOES.
Table VII-6
NOES: Data for producers in Korea, 2010-2012, January-June 2012, and January-June 2013
*
Table VII-7
NOES: Korean producers overall capacity and production of products on the same equipment as
NOES, 2010-12, January-June 2012, and January-June 2013
*
18
The Commission also received a foreign producer questionnaire from Hyundai; however, ***.
POSCO is related to POSCO America and Daewoo America, two importers of NOES in the United States.
POSCO is reportedly nearing completion of a NOES facility in India. Conference transcript, p. 47 (Jones).
VII-6
THE INDUSTRY IN SWEDEN

Table VII-8 presents data provided by Surahammars, the sole producer of NOES in
Sweden. 19 Surahammars exports to the United States, all of which consisted of fully processed
NOES, accounted for *** percent of U.S. imports of NOES from Sweden in 2012. Surahammars
exports to the United States, which accounted for between *** percent and *** percent over
the period, increased between 2010 and 2012, but were lower in interim 2013 than in interim
2012. Cogent Power, the firm responsible for handling Surahammars imports into the United
States, supplies slit products (including blanks), as opposed to wide coils, dedicated for the end
customers use.20 Exports to markets other than the United States, identified principally as ***,
accounted for between *** percent and *** percent of the firms total shipments.
Surahammars reported that *** percent of its total sales in the most recent fiscal year were
represented by sales of NOES.
When asked to describe changes in relation to the production of NOES, Surahammars
reported ***.21 When asked to describe the constraints that set limits on the firms production
capacity, Surahammars reported ***. When asked if their firms have the ability to switch
production between NOES and other products using the same equipment and labor,
Surahammars reported that it ***.
Surahammars reported *** using the same equipment and machinery used in the
production of NOES. Table VII-9 provides Surahammars overall capacity and production data
with regard to products that use the same equipment and machinery used to produce NOES.
Table VII-8
NOES: Data for producer in Sweden, 2010-2012, January-June 2012, and January-June 2013
*
19
Cogents postconference brief, p. 2.

A small percentage of NOES from Sweden was sold, without Surahammars or Cogents knowledge,
into the U.S. market in coil form. These shipments accounted for *** percent of Surahammars U.S.
shipment of NOES during the period. Surahammars noted that this is not a normal channel for U.S. sales
of Swedish NOES. Surahammars and Cogent have reportedly taken steps to ensure that such shipments
will not occur in the future. Cogents postconference brief, pp.3-5
21
According to testimony at the staff conference, Surahammars has reduced its workforce and with
it, production capacity. Conference transcript, pp. 112-113 (Harper). As detailed in table VII-8,
Surahammars reported production capacity was lower in interim 2013 than in interim 2012 and is
projected to be ***.
20
VII-7
Table VII-9
NOES: Swedish producers overall capacity and production of products on the same equipment
*
THE INDUSTRY IN TAIWAN

Table VII-10 presents data provided by China Steel, the sole producer of NOES in
Taiwan. 22 China Steels exports to the United States, all of which consisted of fully processed
NOES, accounted for *** percent of U.S. imports of NOES from Taiwan in 2012. China Steels
exports to the United States, which accounted for between *** percent and *** percent over
the period, increased between 2010 and 2012, but were lower in interim 2013 than in interim
2012.23 Exports to markets other than the United States, particularly to China and South Asian
countries, accounted for the majority of China Steels total shipments. China Steel reported that
*** percent of its total sales in the most recent fiscal year were represented by sales of NOES.
When asked to identify any anticipated changes in relation to the production of NOES,
China Steel reported ***. China Steel noted that the ***. When asked to identify the
constraints that set limits on the firms production capacity, China Steel reported ***.
Table VII-10
NOES: Data for producers in Taiwan, 2010-2012, January-June 2012, and January-June 2013
*
U.S. INVENTORIES OF IMPORTED MERCHANDISE
NOES.
Table VII-11 presents data on U.S. importers reported end-of-period inventories of
24
22
Conference transcript, p. 94 (Weinstein). China Steel is related to China Steel Sumikin-Vietnam

Joint Stock Company, a joint venture with Nippon Steel, which will produce NOES in Vietnam. China
Steel is also reportedly building a NOES facility in India. Conference transcript, pp. 47-48 (Jones). The
Commission also received a questionnaire response from Leicong; ***.
23
All of China Steels exports to the United States consisted of NOES in coil, not slit form. China
Steels postconference brief, p. 2.
24
Firms that imported NOES from *** reported no end-of-period inventories; therefore, those
countries do not appear in table VII-10.
VII-8
Table VII-11
NOES: U.S. importers inventories, 2010-2012, January-June 2012, and January-June 2013
*
U.S. IMPORTERS OUTSTANDING ORDERS

The Commission requested importers to indicate whether they imported or arranged for
the importation of NOES from China, Germany, Japan, Korea, Sweden, and Taiwan after June
30, 2013. Table VII-12 presents these data.
Table VII-12
NOES: Arranged imports, July 2013-June 2014
*
ANTIDUMPING OR COUNTERVAILING DUTY ORDERS IN THIRD-COUNTRY MARKETS

On July 17, 2013, Brazils Foreign Trade Chamber, Camex, imposed antidumping duties
on imports of NOES From China, Taiwan, and Korea. The duties range from between $175.94 to
$432.95 per ton on imports from China; from $132.50 to $231.40 per ton on imports from
Korea; and from $198.34 to $567.16 per ton on imports from Taiwan. 25
INFORMATION ON NONSUBJECT COUNTRIES
In assessing whether the domestic industry is materially injured or threatened with
material injury by reason of subject imports, the legislative history states that the
Commission must examine all relevant evidence, including any known factors, other than the
dumped or subsidized imports, that may be injuring the domestic industry, and that the
Commission must examine those other factors (including non-subject imports) to ensure that it
is not attributing injury from other sources to the subject imports. 26
25
Brazil trade body sets anti-dumping penalties on GNO steel imports,

http://in.reuters.com/article/2013/07/17/snippet-idINL1N0FN0DG20130717, retrieved November 5,
2013. Brazilian authorities defined NOES as having between 0.6 percent and 6.0 percent of silicon.
Baoshans postconference brief, p. 4.
26
Mittal Steel Point Lisas Ltd. v. United States, Slip Op. 2007-1552 at 17 (Fed. Cir. Sept. 18, 2008),
quoting from Statement of Administrative Action on Uruguay Round Agreements Act, H.R. Rep. 103-316,
Vol. I at 851-52; see also Bratsk Aluminum Smelter v. United States, 444 F.3d 1369 (Fed. Cir. 2006).
VII-9
AccordingtoofficialCommerceimportstatistics,U.S.importsofNOESfromnonsubject
sourcesaccountedforbetween4.2and8.8percentoftotalU.S.importswithFranceand
AustraliabeingthetwolargestnonsubjectsourcesofNOESovertheperiod.27Inaddition,firms
respondingtotheCommissionsU.S.importersquestionnaireidentifiedNOESproducersin
othernonsubjectcountriesincludingAustria(VoestalpineAG),Brazil(AperamS.A.),andRussia
(Novolipetsk).Asnotedearlier,anumberofNOESproducersinsubjectcountries(POSCOof
Korea,JFEofJapan,andChinaSteelofJapan)arebuildingorareplanningonexpandingNOES
capacityinIndiaandVietnam.28
27
NOESproducersinthesecountriesincludeBlueScopeSteel(Australia)andArcelorMittal
Mediteranee(France).
28
Conferencetranscript,pp.4748(Jones).
VII10
ContainsBusinessProprietaryInformation
APPENDIXA
FEDERALREGISTERNOTICES
A1
ContainsBusinessProprietaryInformation
TheCommissionmakesavailablenoticesrelevanttoitsinvestigationsandreviewsonits
website,www.usitc.gov.Inaddition,thefollowingtabulationpresents,inchronologicalorder,
FederalRegisternoticesissuedbytheCommissionandCommerceduringthecurrent
proceeding.
Citation
Title
78FR62660
NonOrientedElectricalSteelFrom
October22,2013 China,Germany,Japan,Korea,
Sweden,andTaiwan:Institutionof
AntidumpingandCountervailingDuty
InvestigationsandSchedulingof
PreliminaryPhaseInvestigations
78FR68412,
thePeople'sRepublicof
November14,
2013
China,theRepublicofKorea,and
Taiwan:InitiationofCountervailing
DutyInvestigations
78FR69041,
November18,
2013
thePeople'sRepublicof
China,Germany,Japan,theRepublic
ofKorea,SwedenandTaiwan:
InitiationofAntidumping
DutyInvestigations
A3
Link
http://www.gpo.gov/fdsys/pkg/FR
20131022/html/201324337.htm
20131114/html/201327316.htm
20131118/html/201327304.htm
APPENDIXB
CONFERENCEWITNESSES
B1
CALENDAR OF PUBLIC PRELIMINARY CONFERENCE

Those listed below appeared as witnesses at the United States International Trade
Commissions preliminary conference:
Subject:
Inv. Nos.:
Date and Time:
Non-Oriented Electrical Steel from China, Germany,

Japan, Korea, Sweden, and Taiwan
701-TA-506-508 and 731-TA-1238-1243 (Preliminary)
November 6, 2013 - 9:30 a.m.
Sessions were held in connection with these preliminary investigations in the Main
Hearing Room (room 101), 500 E Street, S.W., Washington, DC.
OPENING REMARKS:
Petitioner (Joseph W. Dorn, King & Spalding)
Respondents (James P. Durling, Curtis, Mallet-Prevost, Colt and Mosle LLP)
In Support of the Imposition of Antidumping and Countervailing Duty Orders:
King & Spalding
Washington, DC
on behalf of
AK Steel Corporation
Eric Petersen, Vice President of Sales and Customer Service, AK Steel
Corporation
Geoff Pfeiffer, General Manager of Specialty Steel Sales, AK Steel Corporation
Steve Konstantinidis, Products Manager of Electrical Steel, AK Steel
Corporation
Jerry Schoen, Principal Engineer, Product Development & Applications
Engineering, AK Steel Corporation
Jeffrey Zackerman, Assistant General Counsel, Commercial Affairs,
AK Steel Corporation
Joseph W. Dorn
Stephen A. Jones
Brian E. McGill
B3
)
) OF COUNSEL
)
In Opposition to the Imposition of

Antidumping and Countervailing Duty Orders:
Morris Manning & Martin LLP
Washington, DC
on behalf of
China Steel Corporation (CSC)
Jonathan Weinstein, Vice President Sales, Metallia U.S.A., LLC
Julie C. Mendoza
R. Will Planert
)
) OF COUNSEL
)
Curtis, Mallet-Prevost, Colt & Mosle LLP

Washington, DC
on behalf of
JFE Steel Corporation (JFE)
Nippon Steel & Sumitomo Metal Corporation (NSSMC)
Hiroyuki Azeyanagi, Staff Manager, JFE Steel Corporation
Daniel L. Porter
James P. Durling
Matthew P. McCullough
)
) OF COUNSEL
)
Dentons US LLP
Washington, DC
on behalf of
China Iron and Steel Association (CISA)
Mark Lunn
B4
) OF COUNSEL
Steptoe & Johnson LLP

Washington, DC
on behalf of
Cogent Power Inc.
Surahammars Bruks AB
Ron Harper, President, Cogent Power
Joel Kaufman
Alice A. Kipel
)
) OF COUNSEL
)
Hughes Hubbard & Reed LLP

Washington, DC
on behalf of
ThyssenKrupp Steel Europe AG
ThyssenKrupp Steel North America Inc.
Robert L. LaFrankie
) OF COUNSEL
Iain R. McPhie
) OF COUNSEL
Squire Sanders (US) LLP

Washington, DC
on behalf of
C.D. Wlzholz KG (Wlzholz)
REBUTTAL/CLOSING REMARKS:
Petitioner (Joseph W. Dorn, King & Spalding)
Respondents (Matthew P. McCullough, Curtis, Mallet-Prevost,Colt and Mosle LLP )
B5
Contains Business Proprietary Information
APPENDIX C
SUMMARY DATA
C-1
Table C-1
NOES: Summary data concerning the U.S. market, 2010-12, January to June 2012, and January to June 2013
(Quantity=short tons; Value=1,000 dollars; Unit values, unit labor costs, and unit expenses=dollars per short ton; Period changes=percent--exceptions noted)
Report data
Calendar year
2011
2010
U.S. consumption quantity:
Amount....................................................................................
Producers' share (1)................................................................
Importers' share (1):
China.....................................................................................
Germany...............................................................................
Japan....................................................................................
Korea....................................................................................
Sweden.................................................................................
Taiwan..................................................................................
Subtotal, subject................................................................
All others sources, nonsubject..............................................
Total imports...................................................................
U.S. consumption value:
Amount....................................................................................
Producers' share (1)................................................................
Importers' share (1):
China.....................................................................................
Germany...............................................................................
Japan....................................................................................
Korea....................................................................................
Sweden.................................................................................
Taiwan..................................................................................
Subtotal, subject................................................................
All others sources, nonsubject..............................................
Total imports...................................................................
U.S. importers' U.S. imports from:
China:
Quantity.................................................................................
Value.....................................................................................
Unit value..............................................................................
Ending inventory quantity......................................................
Germany:
Quantity.................................................................................
Value.....................................................................................
Unit value..............................................................................
Japan:
Quantity.................................................................................
Value.....................................................................................
Unit value..............................................................................
Korea:
Quantity.................................................................................
Value.....................................................................................
Unit value..............................................................................
Sweden:
Quantity.................................................................................
Value.....................................................................................
Unit value..............................................................................
Taiwan:
Quantity.................................................................................
Value.....................................................................................
Unit value..............................................................................
Subtotal, subject sources:
Quantity.................................................................................
Value.....................................................................................
Unit value..............................................................................
All other sources:
Quantity.................................................................................
Value.....................................................................................
Unit value..............................................................................
Total imports:
Quantity.................................................................................
Value.....................................................................................
Unit value..............................................................................
January to June
2012
2013
2012
Period changes
Calendar year
2010-11
2011-12
2010-12
Jan-June
2012-13
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***`
***`
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***`
***`
***`
***`
***`
***`
***`
***`
***`
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***`
***`
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***`
***`
***`
***`
***`
***`
***`
***`
***`
***
***
***
***
***
***
***
***
***
C
8,275
7,642
924
0
D
16,401
19,702
1,201
0
E
14,071
15,400
1,094
0
F
7,394
8,508
1,151
0
G
8,217
7,912
963
0
##
##
##
##
70.1
101.5
18.5
(2)
98.2
157.8
30.1
(2)
(14.2)
(21.8)
(8.9)
(2)
11.1
(7.0)
(16.3)
(2)
10,831
12,372
1,142
***
14,385
19,492
1,355
***
9,568
11,224
1,173
***
5,852
6,944
1,186
***
3,795 ##
4,163 ##
1,097 ##
***
(11.7)
(9.3)
2.7
***
32.8
57.6
18.6
***
(33.5)
(42.4)
(13.4)
***`
(35.2)
(40.0)
(7.5)
***
20,124
22,816
1,134
1,390
22,747
29,889
1,314
1,982
18,540
23,625
1,274
2,403
11,323
14,517
1,282
1,462
##
##
##
##
(7.9)
3.5
12.4
72.9
13.0
31.0
15.9
42.6
(18.5)
(21.0)
(3.0)
21.2
(38.9)
(41.2)
(3.7)
54.4
5,267
5,526
1,049
***
6,880
7,605
1,105
***
7,331
6,830
932
***
4,062
3,941
970
***
1,357 ##
1,311 ##
966 ##
***
39.2
23.6
(11.2)
***
30.6
37.6
5.3
***
6.6
(10.2)
(15.7)
***`
(66.6)
(66.7)
(0.5)
***
4,235
6,595
1,557
***
8,599
14,467
1,682
***
9,359
15,394
1,645
***
4,979
8,359
1,679
***
3,559 ##
5,283 ##
1,484 ##
***
121.0
133.4
5.6
***
103.1
119.4
8.0
***
8.8
6.4
(2.2)
***`
(28.5)
(36.8)
(11.6)
***
6,776
7,929
1,170
0
5,203
6,459
1,242
0
17,136
18,231
1,064
0
8,201
8,945
1,091
0
2,637
2,485
942
0
##
##
##
##
152.9
129.9
(9.1)
(2)
(23.2)
(18.5)
6.1
(2)
229.4
182.2
(14.3)
(2)
(67.8)
(72.2)
(13.6)
(2)
55,507
62,879
1,133
3,255
74,215
97,615
1,315
6,941
76,006
90,704
1,193
7,189
41,812
51,213
1,225
6,758
26,481
29,688
1,121
5,981
##
##
##
##
36.9
44.3
5.3
120.9
33.7
55.2
16.1
113.2
2.4
(7.1)
(9.3)
3.6
(36.7)
(42.0)
(8.5)
(11.5)
3,559
4,640
1,304
0
7,151
11,485
1,606
0
6,242
8,066
1,292
0
2,956
4,003
1,354
0
1,168
1,621
1,388
0
##
##
##
##
100.9
147.5
23.2
(2)
(12.7)
(29.8)
(19.5)
(2)
(60.5)
(59.5)
2.5
(2)
59,066
67,520
1,143
3,255
81,366
109,101
1,341
6,941
82,248
98,770
1,201
7,189
44,768
55,216
1,233
6,758
27,648
31,309
1,132
5,981
##
##
##
##
37.8
61.6
17.3
113.2
1.1
(9.5)
(10.4)
3.6
(38.2)
(43.3)
(8.2)
(11.5)

C-3
6,915
8,535
1,234
2,258
75.4
73.8
(0.9)
(2)
39.2
46.3
5.1
120.9
Table C-1 continued

NOES: Summary data concerning the U.S. market, 2010-12, January to June 2012, and January to June 2013
(Quantity=short tons; Value=1,000 dollars; Unit values, unit labor costs, and unit expenses=dollars per short ton; Period changes=percent--exceptions noted)
Report data
Calendar year
2011
2010
U.S. producers':
Average capacity quantity..........................
Production quantity...................................................................
Capacity utilization (1)..............................................................
U.S. shipments:
Quantity...................................................
Value.....................................................................................
Unit value..............................................................................
Export shipments:
Quantity................................................
Value.....................................................................................
Unit value..............................................................................
Ending inventory quantity.........................................................
Inventories/total shipments (1).................................................
Production workers..................................................................
Hours worked (1,000s)............................................................
Wages paid ($1,000)...............................................................
Productivity (short tons per 1,000 hours)..................................
Unit labor costs........................................................................
Net Sales:
Quantity...........................................................
Value.....................................................................................
Unit value..............................................................................
Cost of goods sold (COGS).....................................................
Gross profit of (loss)................................................................
SG&A expenses.......................................................................
Operating income or (loss).......................................................
Capital expenditures.................................................................
Unit COGS...............................................................................
Unit SG&A expenses...............................................................
Unit operating income or (loss)................................................
COGS/sales (fn1)....................................................................
Operating income or (loss)/sales (fn1).....................................
January to June
2012
2013
2012
Period changes
Calendar year
2010-11
2011-12
2010-12
Jan-June
2012-13
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***`
***`
***`
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***`
***`
***`
***
***
***
***
***
***
***
***
***
***
***
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***
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***
***
***
***
***
***
***
***
***`
***`
***`
***`
***`
***`
***`
***`
***`
***`
***
***
***
***
***
***
***
***
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***
***
***
***
***
***
***`
***`
***`
***`
***`
***`
***`
***`
***`
***`
***`
***`
***`
***
***
***
***
***
***
***
***
***
***
***
***
***
Notes:
(1)--Report data are in percent and period changes are in percentage points.
(2)--Undefined.
Source: Compiled from data submitted in response to Commission questionnaires and official statistics of the U.S. Department of Commerce.
C-4

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Non-Oriented Electrical Steel from China,

Germany, Japan, Korea, Sweden, and

U.S. International Trade Commission

U.S. International Trade Commission

Address all communications to

U.S. International Trade Commission

Non-Oriented Electrical Steel from China,

UNITED STATES INTERNATIONAL TRADE COMMISSION

Commissioners Shara L. Aranoff and F. Scott Kieff did not participate.

The merchandise subject to these investigations consists of nonoriented

NOES is subject to these investigations whether it is fully processed (fully

NOES is sometimes referred to as coldrolled nonoriented electrical steel

PART III: U.S. PRODUCERS PRODUCTION, SHIPMENTS, AND

U.S. production locations

Butler, PA and Zanesville, OH

Source: Compiled from data submitted in response to Commission questionnaires.

U.S. PRODUCTION, CAPACITY, AND CAPACITY UTILIZATION

U.S. PRODUCERS U.S. SHIPMENTS AND EXPORTS

U.S. PRODUCERS INVENTORIES

Principal export markets identified include ***.

U.S. PRODUCERS IMPORTS AND PURCHASES

Nucor reported that ***.

Note.Because of rounding, figures may not add to the totals shown.

Figure continued on next page.

PART VII: THREAT CONSIDERATIONS AND INFORMATION ON

In determining whether an industry in the United States is threatened

(VI) the potential for product-shifting if production facilities in the foreign

in any investigation under this title which involves imports of both

the actual and potential negative effects on the existing

THE INDUSTRY IN CHINA

THE INDUSTRY IN GERMANY

THE INDUSTRY IN JAPAN

THE INDUSTRY IN KOREA

THE INDUSTRY IN SWEDEN

Cogents postconference brief, p. 2.

THE INDUSTRY IN TAIWAN

U.S. INVENTORIES OF IMPORTED MERCHANDISE

Table VII-11 presents data on U.S. importers reported end-of-period inventories of

Conference transcript, p. 94 (Weinstein). China Steel is related to China Steel Sumikin-Vietnam

U.S. IMPORTERS OUTSTANDING ORDERS

ANTIDUMPING OR COUNTERVAILING DUTY ORDERS IN THIRD-COUNTRY MARKETS

Brazil trade body sets anti-dumping penalties on GNO steel imports,

CALENDAR OF PUBLIC PRELIMINARY CONFERENCE

Non-Oriented Electrical Steel from China, Germany,

In Opposition to the Imposition of

Curtis, Mallet-Prevost, Colt & Mosle LLP

Steptoe & Johnson LLP

Hughes Hubbard & Reed LLP

Squire Sanders (US) LLP

Contains Business Proprietary Information

Table continued on next page.

Table C-1 continued

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