PUBLIC VERSION

STAINLESS STEEL BAR FROM BRAZIL, INDIA, JAPAN AND SPAIN Domestic Industry Presentation by

Michael Kerwin, Georgetown Economic Services, LLC

July 12, 2018

Prepared by Georgetown Economic Services, LLC

U.S. Imports of SSB from Brazil Increased During the Original Investigation

5,000

i;"i* 4,000

+.1 3,000

0 _C

2,000

ci)

0 1,000

0

1 0/ ea

4,594

1991 1993

2 Source: ITC Prehrg. Rep. at B-3.

PUBLIC VERSION

Brazilian Producers' Idle Capacity in 2017 [

] Imports from Brazil

Note: [

3 Source: ITC Prehrg. Rep. at IV-26, B-3.

PUBLIC VERSION Brazil's Reported Capacity and Excess

Capacity Are Understated in the Staff Report

't?

Source: [ ] and 4 ITC Prehrg. Rep. at IV-26.

PUBLIC VERSION

Brazil Is Export Oriented

5 Source: ITC Prehrg. Rep. at IV-26.

Exports of SSB to the United States Rose as a Share of Total Brazilian Exports

2005 2011 2017 3.0%

6 Source: GTA Export Statistics, Second Review USITC Pub. 3895 at IV-13, Third Review USITC Pub. 4341 at 1-10.

Kelley rye

1,402

00 1-` 11/. 00

c:(41 - \•(‘-

717

0

4-1

16 3,000

_C

2,000 CU

0 1,000

0

4,000

U.S. Imports of SSB from India Surged During the Original Investigation

5,000

1991 1993

7 Source: ITC Prehrg. Rep. at B-3.

PUBLIC VERSION

Indian Producers' Idle Capacity in 2017 Exceeds Peak

Pre-Order Imports from India

8 Source: ITC Prehrg. Rep. at B-3 and Dorn. Ind. Prehrg. Brf. at 17 and Exh. 3.

PUBLIC VERSION Idle Capacity in 2017 Would Allow India to Capture a Higher

Share of the U.S. Market Than It Had Pre-Order

Source: ITC Prehrg. Rep. at B-3 and C-3 and Dom. Ind. Prehrg. Brf. at Exh. 3.

Kelley Drye

PUBLIC VERSION India's Reported Capacity and Excess

Capacity Are Understated in the Staff Report

Source:[ ] and 1 0 ITC Prehrg. Rep. at IV-48 and E-3.

The Nonresponding Producers in India Have Significant Capacities to Produce SSB

• Aamor Inox, which was established in 2004, has an annual SSB capacity of

75,000 short tons.

• Ambica Steel has an annual capacity of 80,000 tons to produce SSB.

• D.H. Exports's capacity to produce SSB is 12,000 MT per year.

• Facor Steels has an overall capacity to produce 60,000 tons per year of

alloys, carbon and stainless steel.

• India Steel Works has an annual production capacity of 30,000 tons of

stainless bright bars.

• As of 2012, Panchmahal Steel Limited had an annual production capacity

of 72,000 metric tons to produce stainless long products, including

stainless bar, and was operating at just 40 percent of its capacity.

• Venus Wires has an overall production capacity of 60,000 tons per year to

produce stainless bars and wires.

11 Source: Dom. Ind. Prehrg. Brf. at 16-17 and Exh. 2.

Kelley Drye 1 2 Source: Dom. Ind. Prehrg. Brf. at Exh. 3.

PUBLIC VERSION

India Is Export Oriented

1993

U.S. Imports of SSB from Japan Increased In the Final Year of the P01

16,000

Tf7 14,500

0

13,000

z 11,500

10,000

1992

1.00/0 Increase offs

foga,

wara. NIP

mea.

13 Source: ITC Prehrg. Rep. at B-3.

PUBLIC VERSION

The Responding Japanese Producers Have Sufficient Excess

Capacity to [

14 Source: ITC Prehrg. Rep. at IV-48, C-3 and [ I QR at 11-11.

PUBLIC VERSION Japan's Reported Capacity and Excess

Capacity Are Understated in the Staff Report

Source: [ ] and 1 5 ITC Prehrg. Rep. at IV-50.

PUBLIC VERSION

Japan Is Export Oriented

• Based the responding Japanese producers, Japan's exports of SSB ranged between [ ] tons and

] tons from 2015 to 2017.

• Based on Global Trade Atlas statistics, Japan's exports of SSB [ ] ranging from 49,770 tons and 54,019 tons during the same period.

In the second review, the Commission found that Japan was export oriented based on the same factual pattern, with Global Trade Atlas showing exports of roughly 50,000 short tons.

1 6 Source: ITC Prehrg. Rep. at IV-48 and IV-52 and [ ] For. Prod. QR atI1-11.

Kelley Drye

U.S. Imports of SSB from Spain Increased During the Original Investigation

8,000

7,000

TIT c 6,000

4-)

5,000

4,000

w 3,000

2,000

tom

0

A 0 Ina e iu " 3

wow woo

woo

woo

sso. wow

1991

17 Source: ITC Prehrg. Rep. at B-3.

1993

PUBLIC VERSION The Subject Spanish Producers Have Sufficient Excess

Capacity to [ ] Their Exports to the U.S. Market in Relation to Peak Volumes During the Original P01

Kelley Drye

1 8 Source: ITC Prehrg. Rep. at IV-57.

PUBLIC VERSION Spain's Reported Capacity and Excess

Capacity Are Understated in the Staff Report

Source: [ ] and 1 9 ITC Prehrg. Rep. at IV-57.

PUBLIC VERSION

Spain Is Export Oriented

Kelley Drye 20 Source: Dorn. Ind. Prehrg. Brf. at Exh. 3.

35,000

30,000

O 25,000

o▪ 20,000

• 15,000

10,000

0 5,000

0

1991 1992 1993

22.0% Increase

Cumulated Subject Imports of SSB Increased During the Original Investigation

21 Source: ITC Prehrg. Rep. at B-3.

PUBLIC VERSION The Subject Producers Have Sufficient Excess Capacity to

Increase [ ] Their Exports to the U.S. Market in Relation to Peak Volumes During the Original POI

Kelley Drye 22 Source: ITC Prehrg. Rep. at B-3, Dorn. Ind. Prehrg. Brf. at Exh. 7.

PUBLIC VERSION Responding Subject Producers Have Sufficient Excess

Capacity to Supply the Vast Majority of the U.S. Market

23 Source: ITC Prehrg. Rep. at C-3 and Dom. Ind. Prehrg. Brf. at Exh. 7 (excess capacity including [ ).

PUBLIC VERSION

Price Remains a Key Purchasing Factor • Fifteen of 16 responding purchasers stated price was "very important" in

their SSB purchasing decisions.

• "Price" was the most often cited top three factor firms consider in their

purchasing decisions for SSB.

• Fifteen of 16 responding purchasers reported that they "sometimes" or

"usually" purchase the lowest-priced product.

•

•

Hey 24 Source: ITC Prehrg. Rep. at 11-20 to 11-21 and U.S. Purch. QRs at 111-19, 111-24, and 111-21.

65.4%

India (Subject)

Spain

Total 34 of 52

PUBLIC VERSION

The Subject Countries Undersold the Domestic Product During

the Current Period of Review Even With the Orders in Place

25 Source: ITC Prehrg. Rep. at V-20.

PUBLIC VERSION

Purchasers Indicated That There Would Likely Be

Negative Price Effects if the Orders Are Revoked

26 Source: See Purch. QRs at 111-30.

Kelley Drye

The U.S. Industry Remains in a Vulnerable Condition

• For the current period of review as a whole, the domestic

industry was barely breaking even, with net income representing

just 0.4 percent of sales value.

• The domestic industry's operating income margin of 4.8 percent

in 2017 was similar to the operating margin of 4.4 percent in

1999, when the Commission found that the domestic industry

was vulnerable.

• Domestic industry capacity utilization in 2017 stood at just 45.6

percent, lower than in the original investigation or in any of the

previous sunset reviews.

27 Source: ITC Prehrg. Rep. at I-12 to I-13, C-5.

Kelley Drye

PUBLIC VERSION

Non-Subject Imports Have Taken an Increasing Share

of the U.S. Market Since the Original Investigation

28 Source: ITC Prehrg. Rep. at B-3, C-3.

52.0%

46.2%

Domestic Industry Capacity Utilization Has Fallen Between 1993 and 2017

n P

erce

nt

54.0%

52.0%

50.0%

48.0%

46.0%

44.0%

42.0%

45.6%

1993 1999 2005 2010 2017

29 Source: ITC Prehrg. Rep. at 1-12.

Fourth Review

2017

ttp& .

nvestiga ion 1993

U.S. Producers' Market Share

PUBLIC VERSION

Changes in SSB Market Since Original Investigation

63.1% 57.9% 34.5% 49.8%

Nonsubject Import Market Share 13.5% 34.1% [ ] [ ] [

Capacity Utilization 52.6% 50.8% 52.0% 46.2% 45.6%

Total Imports 59,058 87,320 124,496 108,688 160,481

30 Source: ITC Prehrg. Rep. at1-10 to 1-12.

Trade and Financial Factors Have Deteriorated Since

2005 During the Second Review

Apparent Domestic Consumption (Quantity)

U.S. Shipments (Quantity)

U.S. Shipments (Value)

Gross Profit

Operating Income

Average Unit Net Sales Value ($/ton)

295,751

171,255

$756,242

$142,556

$82,275

$4,813

1 3 9 768 11

159,287 4

$738, 242

$94,656

$39,020

$4,694 Jr

31 Source: ITC Prehrg. Rep. at 1-12 to 1-13.

_