PUBLIC VERSION

Certain Carbon and Alloy Steel Wire Rod from Belarus, Italy, The Republic of Korea, The Russian Federation, The Republic of South Africa, Spain,

Turkey, Ukraine, United Arab Emirates, and The United Kingdom

Domestic Industry Presentation by Paul Rosenthal, Kelley Drye & Warren LLP

November 16, 2017

Prepared by Georgetown Economic Services, LLC

2011 2012 2013 2014 — -China —Subject Countries

Source: Official Department of Commerce Import Statistics.

fairy-7raded Subject Imports Surged Over the POI ti Replace the Oecjne in Imports from China

7.. 7

800,000

700,000 700,000

600,000

J) 500,000 0

.1•0 400,000

_c cn 300,000

200,000

100,000

0

KELLEY D RYE

Jan 2014 — Petitions filed

on China

• • •

Jan -2015 — Orders imposed

on China

•

•

2015 2016

- - -

3).2:1 A3113)1

7

U.S. Imports from China Surged from 2011 to 2013

air.77171,,17;'747' " ' '

700,000

600,000

g 500,000

8 400,000

300,000

0 200,000

100,000

2011 2012 2013 Source: USITC Pub. 4509 at C-3.

.1110.11.111111.1111111111111011111PXX=70054411111115ARAMMOSAMMIPTette=r4CIM.,Str... . • - • -.•' . .•

2015 2016

Subject Imports Quickly Replaced China and Reached Even Higher Volume Levels

800,000

700,000

-7). 600,000

0 I— 500,000

0 -C 400,000 cn

a) E 300,000

0 > 200,000

100,000

0

2014

+56.1%

Source: ITC Prehrg. Rep. at IV-4 (Table IV-2).

KELLEY D RYE

0 18.0%

16.0%

14.0%

2 12.0%

u) 10.0%

8.0%

0_ 6.0%

4.0%

2.0%

0.0%

Subject Imports Captured an Increasing Share of the U.S. Market From 2014 to 2016

2014 2015 2016 Source: ITC Prehrg. Rep. at IV-31 (Table IV-15).

D RYE

VA

Subject Market Shares Exceeded Those of China in Every Respective Year of the Investigatory Periods

Per

cent

Mark

et S

har

e

20.0%

18.0%

16.0%

14.0%

12.0%

10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

z Chinese Imports L Subject Imports

2011 /2014 2012/2015 2013 /2016 Source: ITC Prehrg. Rep. at 0-5 (Table 0-2) and USITC Pub. 4509 at C-4.

Subject Imports' Surge Continued Through the First Half of 2017

• ••••

250,000

200,000

0

150,000

I100000

'

50,000

0

1Q 2016 / 1Q 2017 2Q 2016 / 2Q 2017 3Q 2016 / 3Q 2017 - Source: KDW Prehrg. Brf. at Exh. 6.

KELLEY DRYE

The Fiiing of the Petitions in 2017 Led to a Significant Decrease in Subject Wire Rod Imports

250,000

Average lead for subject imports = 101 Days

200,000

150,000

100,000

0 >

Wire Rod Petitions Filed March 28, 2017

50,000

0

Jan Feb Mar Apr May Jun Jul Aug Sep Subject Imports Nonsubject Imports

Source: U.S. Department of Commerce.

Subject imp rts Undersed the U.S. Product in the Vast Majority of Quarterly Comparisons as Well as Based on Volume

Flat'75.,7,^

Number of Quarters —

Underselling by Subject

Imports

Underselling Volume by

Subject Imports

Number of Quarters — Overselling by Subject

Imports

Total 1,263,228

Source: ITC Prehrg. Rep. at V-29.

PUBLIC VERSION Virtually All of U.S. Purchasers Reported Subject Imports Were Lower Priced and That They Shifted Purchases To Subject Imports Principally Due To Price

Number of Purchasers

having Purchased

CASWR from subject

countries instead of domestic CASWR

Number of purchasers reporting

that imports

were lower priced

Percent purchasers reporting that price was lower

Number of purchasers

that reported shifting

purchases principally

due to price

Quantity of subject country purchases

instead of domestic

purchases where subject imports

were lower priced (tons)

...

24 18 75.0% 17

Source: ITC Prehrg. Rep. at V-35-37 (Table V-13).

PUBLIC VERSION Purchasers Overwhelmingly Reported That Subject Imports Were

Priced Lower Than the Domestic Product MEE I.LT •

10111 •11

— Source: KDW Prehrg. Br{. at 34-35.

PUBLIC VERSION Purchasers Reported U.S. Producers Were Forced to Lower

Prices to Compete With Subject Imports

Count of purchasers reporting U.S.

producers reduced prices

Simple average of estimated U.S. price reduction (percent)

Range of estimated U.S. price reductions

(percent)

5.0 15.0%

Source: ITC Prehrg. Rep. at V-41 (Table V-16).

KELLEY DRYE

Source: ITC Prehrg. Rep. at V-39-50 (Table V-15).

PUBLIC VERSION Purchasers Reported U.S. Producers Were Forced to Lower Prices to

Compete With Subject Imports ipm:41, 1P

Pri

ce

Ch

an

ge

( US

D/S

ho

rt T

on

)

-$100

-$125

-$150

-$175

-$25

-$50

-$75

$0

Unit Net Sales Values Declined More Than Unit Raw Material Costs from 2014 to 2016

--

Raw Materials Net Sales

-$200

Source: ITC Prehrg. Rep. at VI-10 (Table VI-4).

PUBLIC VERSION

Domestic Producer Prices Fell Precipitously from First Quarter 2014 to Third Quarter 2017

Source: ITC Prehrg. Rep. at V-9 to V-20.

Domestic Industry Trade Indicators Declined From Already Low Levels from 2014 to 2016

M

Capacity

Production

Domestic Shipment Volume

Domestic Shipment Value

Market Share

Production-Related Workers

Source: ITC Prehrg. Rep. at C-5.

Domestic Industry Financial Indicators Declined Substantially from 2014 to 2016

INet Sales Value

Gross Profit

Operating Income

Net Income

Operating Income/Net Sales

Net Income/Net Sales

Source: ITC Prehrg. Rep. at 0-5.

•

U.S. Producers' Profitability Plummeted by More Than 50% from 2014 to 2016

60,000

—Operating Income

Thou

sand

s of

US

D

40,000

50,000

30,000

• •

• k52,635 •

$46,408 • • • • • • • • •

—Net Income • •

•

%4111' $25,137

20,000 $21,115

2014 Source: ITC Prehrg. Rep. at C-5 Table 0-2).

2016

1,

20.0% - --Operating Income Margin

Import Market Share —Subject

16.5%

15.0%

10.2%

10.0%

5.0% 2.8%

1.9%

0.0%

Inco

me

Mar

gin (

Per

cen

t)

lit

20.0%

5.0%

2

0.0%

U.S. Producers' Profit Ratios Were Abysmal And Declining from 2014 to 2016

2014 2016 Source: ITC Prehrg. Rep. at 0-5 (Table C-2).

Only After Imports Began to Decline Did Profits Improve

20.0% - ---Operating Income Margin —Subject Import Market Share 20.0%

17.4%

15.0%

10.0%

5.0% 3.9% 5.0% ct 2 2.8%

..... NM OW Ma OW MO MIN NM 41111P MO OM ONO 4MI. MID

0.0%

0.0%

J-S 2016 Source: ITC Prehrg. Rep. at 0-5 (Table 0-2).

J-S 2017

nc

om

e M

arg

in (

Pe

rce

nt)

Jan 201 Petitions filed

on Chind

27 -

surfing Subject lm.orts More Than Replaced Import Volumes from China

800,000

700,000

600,000

u) 500,000 0

400,000

(4 300,000

200,000

100,000

0

2011 2012 2013 2014 2 China Subject Countries

Source: Official Department of Commerce Import Statistics.

2015 2016

U.S. Producers' Market Share Declined from 2011 to Interim 2017

75.0%

70.0%

Cl) 65.0%

2 60.0%

a) c.)

o_ 55.0%

50.0%

2011 2012 2013 2014 2015 2016 J-S 2017 Source: ITC Prehrg. Rep. at 0-5 (Table 0-2) and US ITC Pub. 4509 at 0-4.

$175,000

$150,000

$125,000

$100,000

$75,000

$50,000

$25,000

Op

erat

ing

Inco

me

($1,

00

0)

$0

Surging Subject Imports Prevented the U.S. Industry from Improving Financially Once Orders Were Imposed on China

,

i:

i'

kr,

,(.

:

c, Nt '+' ‘..•

.4

W

.f f

. .

.11 •

t e .

2011 2012 2013 2014 2015 2016 Source: USITC Pub. 4509 at C-4, ITC Prehrg. Rep. at C-5.

KELLEY

D RYE

PUBLIC VERSION capital Expenditures Fell Significantly Since the End

of the China Trade Case INEM -11151M7

Source: USITC Pub. 4509 at 0-4, ITC Prehrg. Rep. at VI-15.

•

The Surge in Subjec Imports Caused U.S. Producers' Shipments to Fall More apidly than the Decline in Demand

from 2014 to 2016

Per

cent

Cha

nge

60.0%

50.0%

40.0%

30.0%

20.0%

10.0%

0.0%

-10.0% -4.2% -6.0%

Growth Rate of U.S. Growth Rate of Growth Rate of U.S. Market Subject Imports Producers° Shipments

Source: ITC Prehrg. Rep. at 0-4-5 (Tables C-1 and C-2).

Non-Subject Imports Declined Over the P01

1,400,000

-7-) 1,300,000 c 0

i—

.1-. 8' u)-c 1,200,000

a) E = -6 > 1,100,000

1,000,000

2014 Source: ITC Prehrg. Rep. at IV-4 (Table IV-2).

2015 2016

WP:W'

KELLEY D RYE

Unit Net Sales Values Declined More Than Unit Raw Material Costs from 2014 to 2016

Raw Materials Net Sales $0

O -$25

O -$50

U▪ ) a -$75 U)

-$100 a) cr) c -$125

o -$150

-$175

-$200

Source: ITC Prehrg. Rep. at VI-10 Table VI-4).

ArcelorMittal USA and Republic Both Cite Unfairly Traded Imports as a Reason for their Closure

• "ArcelorMittal Georgetown, the company's primary producer of wire rod in the United States, has been severely impacted by waves of unfairly traded steel imports from China and other countries. Even in the most recent quarter, wire rod imports rose to account for 36 percent of the U.S. market."

ArcelorMittal (5/14/15)

• "With a negative 2016 economic forecast and the continued dumping of steel imports, Republic had no other option but to idle the Lorain plant."

- Republic Steel (1/17/16)

Source: KDW Prehrg. Exh. 5.

PUBLIC VERSION Based on ITC Questionnaires, Subject Producers Have Sufficient

Excess Capacity to Increase Exports to the U.S.

Faar,:,, r-rlq••

Source: ITC Prehrg. Rep. at IV-4 (Table IV-2) and VII-67 (Table VII-36).

PUBLIC VERSION Subject Countries Have More Excess Capacity to

Produce CASWR Than The Entire U.S. Market

Source: [

3:411V •••;:. -, :fiArg, • •

PUBLIC VERSION

Critical Circumstances Exist

• Commerce has found critical circumstances for Russia, South Africa, Spain, Turkey (except for Habas and lcdas), and the United Kingdom.

• Imports from each of the five subject countries rapidly increased following the filing of the petition.

• Russia up [

• South Africa up [

e Spain up [

e Turkey up [

• United Kingdom up [

• Inventory levels of the subject imports also increased rapidly. 0- The remedial effect of the orders would be seriously undermined absent

retroactive imposition of duties. Source: ITC Prehrg. Rep. at IV-9 to IV-13.

There Is a Single Like Product Encompassing All In-Scope CASWR Including Grade 1080 Tire Cord and Tire Bead CASWR

m The Commission has consistently found a single continuum like product consisting of all 11 types of CASWR in every investigation dating back to 1997.

IM The Commission expressly found grade 1080 tire cord and tire bead CASWR to be within the same continuum like product as all other CASWR in each previous case in which it examined the question (e.g., CASWR from Brazil 2002; CASWR from China 2014).

m In the Preliminary Determination, the Commission again found grade 1080 tire cord and tire bead CASWR to be within the same continuum like product as all other CASWR after applying its six-

factor test.

m No facts have changed and respondents have offered no new arguments.

1

PUBLIC VERSION

1080 Tire Cord and Tire Bead Account for a Small Share of the U.S.Market and the Increase in Subject Imports

80 tire cord and tire bead accounted for:

f tU.S. merchant market in

of the increase in subject •

ports fro m 2114 to 2016.

Source: ITC Prehrg. Rep. at 0-3-7.