Steel Wire Rod Petition General & Injury Narrative

PUBLIC VERSION

DOC Investigation Nos. A-570-012 and C-570-013 ITC Investigation Nos. 701-TA-___ and 731-TA-___ Total No. of Pages: 124 Original Investigation AD/CVD Operations Petitioners' Business Proprietary Information for Which Proprietary Treatment Has Been Requested Containedin Volume 1 at Pages 14-15 and 17-20, and Exhibits GEN-1, INJ-2, INJ-3, INJ-4 and INJ-5 PUBLIC VERSION

BEFORE THE INTERNATIONAL TRADE ADMINISTRATION OF THE U.S. DEPARTMENT OF COMMERCE

AND THE U.S. INTERNATIONAL TRADE COMMISSION

ANTIDUMPING AND COUNTERVAILING DUTY PETITION

VOLUME I GENERAL and INJURY SECTIONS

CARBON AND CERTAIN ALLOY STEEL WIRE ROD FROM THE PEOPLE’S REPUBLIC OF CHINA

PETITIONERS: ARCELORMITTAL USA LLC, CHARTER STEEL, EVRAZ ROCKY MOUNTAIN STEEL,

GERDAU AMERISTEEL US INC., KEYSTONE CONSOLIDATED INDUSTRIES, INC., AND NUCOR CORPORATION

ALAN H. PRICE DANIEL B. PICKARD CHRISTOPHER B. WELD WILEY REIN, LLP 1776 K Street, N.W. Washington, DC 20006 (202) 719-3375 Counsel to Nucor Corporation

PAUL C. ROSENTHAL KATHLEEN W. CANNON R. ALAN LUBERDA BENJAMIN BLASE CARYL KELLEY DRYE & WARREN LLP 3050 K Street, N.W., Suite 400 Washington, D.C. 20007 (202) 342-8400 Counsel to ArcelorMittal USA LLC, Charter Steel, Evraz Rocky Mountain Steel, Gerdau Ameristeel US Inc., and Keystone Consolidated Industries, Inc.

GINA E. BECK, Consultant JULIE H. SANTOBONI, Consultant January 31, 2014

PUBLIC VERSION

Table of Contents

VOLUME IPage

I. GENERAL INFORMATION ............................................................................................. 2

A. Petitioners ................................................................................................................2

B. Description of the Domestic Industry and Industry Support ................................... 3

1. Other U.S. Producers of CASWR ............................................................... 3

2. Industry Support .......................................................................................... 4

C. Related Proceedings ................................................................................................ 5

D. Description of the Merchandise and Requested Scope ofInvestigation ............................................................................................................ 6

1. Product Description ..................................................................................... 6

2. Technical Characteristics, Production Process, and Uses ........................... 6

3. Requested Scope of Investigation ............................................................... 7

4. U.S. Tariff Classification ............................................................................ 7

E. Country of Exportation ............................................................................................ 8

F. Producers and Exporters of the Subject Merchandise ............................................. 8

G. Volume and Value of Imports ................................................................................. 8

H. Names and Addresses of U.S. Importers ................................................................. 8

II. INFORMATION RELATED TO COUNTERVAILABLE SUBSIDIES ............... ........... 9

III. THE U.S. CASWR INDUSTRY HAS BEEN MATERIALLY INJUREDBY REASON OF UNFAIRLY TRADED IMPORTS OF CASWR FROMCHINA ................................................................................................................................ 9

A. The Domestic Like Product Is Co-Extensive With the Scope of thePetition and Consists of All Carbon and Certain Alloy Steel WireRod .......................................................................................................................... 9

B. The Domestic Industry Consists of All U.S. Producers of CASWR .................... 12

C. Subject Imports Surpass the Statutory Negligibility Threshold ............................13

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Table of Contents(continued)

Page

D. CASWR Imports from China Are Causing Material Injury to theDomestic Industry .................................................................................................13

1. The Volume of CASWR Imports from China Is Significantand Increasing ........................................................................................... 14

2. Unfairly Traded CASWR Imports from China Have HadSignificant Negative Price Effects on the DomesticIndustry ...................................................................................................... 14

a. Subject Imports Have Undersold Domestically-Produced CASWR by Substantial Margins, Causingthe Domestic Industry Lost Sales , Lost Revenue,and Price Suppression and Depression .......................................... 15

b. Identification of CASWR Products for WhichPetitioners Request Collection of Price Data ................................ 16

3. Unfairly Traded CASWR Imports from China Have Had ASignificant Negative Impact on the Domestic CASWRIndustry ...................................................................................................... 16

a. Decreasing U.S. Shipment and Production Trendsand Low Capacity Utilization Rates for CASWRDemonstrate the Material Injury Caused by SubjectImports ..........................................................................................17

b. Petitioners' Declining Operating IncomeDemonstrates the Injurious Impact of theSubstantial Volumes of Low-Priced Imports fromChina .............................................................................................18

C. Petitioners Have Lost Sales and Revenues to UnfairCASWR Imports from China ........................................................18

IV. THE DOMESTIC INDUSTRY IS THREATENED WITH FURTHERMATERIAL INJURY BY REASON OF UNFAIR IMPORTS OFCASWR FROM CHINA ...................................................................................................19

V. CONCLUSION ................................................................................................................. 21

PUBLIC VERSION

PETITION FOR THE IMPOSITION OF ANTIDUMPING AND COUNTERVAILINGDUTIES ON IMPORTS OF CARBON AND CERTAIN ALLOY STEEL WIRE

ROD FROM THE PEOPLE'S REPUBLIC OF CHINA

This petition is filed on behalf of the U.S. industry producing carbon and certain alloy

steel wire rod ("CASWR"). The petitioners in this case are ArcelorMittal USA LLC, Charter

Steel, Evraz Rocky Mountain Steel, Gerdau Ameristeel US Inc., Keystone Consolidated

Industries, Inc., and Nucor Corporation (collectively "petitioners"). These companies account

for the majority of CASWR production in the United States and represent the U.S. industry

producing CASWR within the meaning of sections 702(c)(4) and 732(c)(4) of the Tariff Act of

1930, as amended (the "Act"). 19 U.S.C. §§ 167la(c)(4), 1673a(c)(4).

Volume II of this petition presents evidence that CASWR from the People's Republic of

China ("PRC" or "China") is being, or is likely to be, sold in the United States at less than fair

value within the meaning of section 731(1) of the Act. 19 U.S.C. § 1673(1). In addition,

Volume III of this petition presents evidence that the Government of China is providing

countervailable subsidies with respect to the manufacture, production, and export of CASWR.

within the meaning of section 701(a)(1) of the Act. 19 U.S.C. § 1671(a)(1). This petition

demonstrates that the U.S. industry producing CASWR is being materially injured, and is

threatened with further material injury, by reason of unfairly traded imports from China within

the meaning of sections 701(a)(2) and 731(2) of the Act. 19 U.S.C. §§ 1671(a)(2), 1673(2).

Petitioners, therefore, request that: (1) antidumping duties be imposed on CASWR from China

in an amount equal to the amount by which the normal value exceeds the export price or

constructed export price of the merchandise; and (2) countervailing duties be imposed on imports

of CASWR from China in an amount equal to the net countervailable subsidy.

PUBLIC VERSION

This petition sets forth the information reasonably available to petitioners and is filed in

conformity with the requirements of section 351.202 of the regulations of the U.S. Department of

Commerce ("Commerce" or "the Department"), 19 C.F.R. § 351.202, and section 207.11 of the

regulations of the U.S. International Trade Commission ("ITC" or "Commission"), 19 C.F.R.

§ 207.11.

1. GENERAL INFORMATION

A. Petitioners

This petition is filed on behalf of the U.S. CASWR industry by the following domestic

manufacturers:

• ArcelorMittal USA LLCOne South Dearborn StreetChicago, IL 60603Contact: Dan Fuller, Director Wire Rod SalesTel: (312) 899-3153Fax: (312) 899-3562Email: dan.fullergarcelormittal.comWebsite: http://www.arcelonnittal.com

• Charter SteelDivision of Charter Manufacturing Co., Inc.1658 Cold Springs RoadSaukville, WI 53080Contact: Tom Glaister, President & Chief Operating OfficerTel: (800) 43-8789Fax: (262) 268-2340Email: GlaisterTQchartermfg comWebsite: http://www.chartersteel.com

• Evraz Rocky Mountain Steel1612 E. Abriendo Ave.Pueblo, CO 81004Contact: Paige Brodksy, Vice President and General CounselTel: (312) 533-3689Fax: (503) 978-4927Email: Paijze.Brodsky a,evrazincna.comWebsite: http://www.evrazna.com

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• Gerdau Ameristeel US Inc.4221 W. Boy Scout Blvd., Suite 600Tampa, FL 33607Contact: Jim Kerkvliet, Vice President of Sales and MarketingTel: (813) 217-4546Fax: (800) 628-9931Email: [email protected]: http://www.gerdauameristeel.com

• Keystone Consolidated Industries, Inc.5430 LBJ Freeway, Suite 1740Three Lincoln CentreDallas, TX 75240Contact: Mark Brachbill, V.P. FinanceTel: (309)-697-7628Fax: (309)-697-7120Email: BrachbiMgkeystonesteel.comWebsite: http://www.keystonesteel.com

• Nucor Corporation2100 Rexford RoadCharlotte, NC 28211Contact: Douglas Gunson, General CounselTel: (704) 366-7000Fax: (704) 362-4208Email: d unsongnucor.comWebsite: http://www.nucor.com

B. Description of the Domestic Industry and Industry Support

This petition is filed on behalf of the domestic industry producing CASWR, as defined in

the scope of this petition (section I.D, infra), and meets the statutory support requirement as

described below and as set forth in Exhibit GEN-1.

1. Other U.S. Producers of CASWR

In addition to the named petitioners, other known U.S. producers of CASWR are:

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• Cascade Steel Rolling Mills Inc.3200 N. Highway 99WP.O. Box 687Tel: (503) 472-4181Fax: (503) 434-5739Email: fwaechtlerQschn.comWebsite: http://www.cascadesteel.com

• Oklahoma Steel and WireHighway 70 SouthMadill, OK 73446Tel: (800) 654-4164Fax: (580) 795-7422Email: [email protected]: www.oklahomasteel.com

• Republic Engineered Products3770 Embassy ParkwayAkron, OH 44333-8367Tel: (440) 996-0740Fax: (440) 996-0741Email: lbraungrepublicsteel. comWebsite: www.republicengineered.com

e• Sterling Steel Company LLC/Leggett & PlattP.O. Box 757Number 1 Leggett RoadCarthage, MO 64836Tel: (417) 358-8131Fax: (417) 358-4805Email: joe.downesgleggett.comWebsite: http://www.leg etg t.com

2. Industry Support

Sections 702 and 732 of the Act requires that "the domestic producers or workers who

support the petition account for at least 25 percent of the total production of the like product."

19 U.S.C. §§ 167la(c)(4)(A)(i), 1673a(c)(4)(A)(i). In addition, the statute requires that "the

domestic producers or workers who support the petition account for more than 50 percent of the

' Sterling Steel Company, LLC operates as a subsidiary of Leggett & Platt, Incorporated.

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production of the domestic like product produced by the portion of the industry expressing

support for or opposition to the petition." 19 U.S.C. §§ 1671a(c)(4)(A)(ii), 1673a(c)(4)(A)(ii).

As shown in the attached Exhibit GEN-1, the U.S. producers who are known to be in

support of the petition surpass both the 25 percent and 50 percent thresholds for industry support

established in the statute.

C. Related Proceedings

Petitioners have not filed for import relief pursuant to sections 337 or 702 of the Tariff

Act of 1930, as amended, ("the Act") (19 U.S.C. §§ 1337 and 1671a) or section 232 of the Trade

Expansion Act of 1962 (19 U.S.C. § 1862), with respect to the merchandise that is the subject of

this petition. A chronology of all prior antidumping and countervailing duty proceedings,

section 201 investigations, and related proceedings covering CASWR is provided in Exhibit

GEN-2 to this volume. Based on petitions filed in 2001, there are currently antidumping duty

orders in place against CASWR from Brazil, Indonesia , Mexico, Moldova, Trinidad & Tobago,

and Ukraine, and a countervailing duty order is in place against CASWR imports from Brazil.

See Carbon and Certain Alloy Steel Wire Rod from Brazil, Canada, Indonesia, Mexico,

Moldova, Trinidad & Tobago, and Ukraine, Inv. Nos. 701-TA-417 and 731-TA-953, 954, 957-

959, 961 and 962 (Review), USITC Pub. 4014 (June 2008) ("First CASWR Sunset"). A full

sunset review of these orders is currently being conducted. See Carbon and Certain Alloy Steel

Wire Rod From Brazil Indonesia Mexico Moldova, Trinidad and Tobago, and Ukraine: Notice

of Commission Determination To Conduct Full Five-Year Reviews, 78 Fed. Reg. 60,316 (Oct. 1,

2013).

In 2005, the domestic industry filed antidumping duty cases against CASWR from China,

Germany, and Turkey. The Commission reached preliminary negative determinations and those

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investigations were subsequently terminated. See Carbon and Certain Alloy Steel Wire Rod

from China, Germany, and Turkey, Inv. Nos. 731-TA-1099-1101 (Preliminary), USITC Pub.

3546 (Jan. 2006); Carbon and Certain Alloy Steel Wire Rod from China, Germany, and Turkey,

71 Fed. Reg. 132 (Jan. 3, 2006).

Other than the actions described in Exhibit GEN-2, petitioners have not filed, are not

presently filing, and have not otherwise initiated proceedings for import relief with respect to the

merchandise that is the subject of this petition.

D. Description of the Merchandise and Requested Scope of Investigation

1. Product Description

The merchandise covered by these investigations is certain hot-rolled products of carbon

steel and alloy steel, in coils, of approximately round cross section, less than 19.00 mm, in solid

cross-sectional diameter.

2. Technical Characteristics , Production Process, and Uses

The characteristics, production process, and uses of CASWR were fully explained by the

Commission in the most recent sunset reviews it conducted. See First CASWR Sunset, USITC

Pub. 4014 at I-22-I-27. The relevant pages of that publication are attached as Exhibit GEN-3.

Note that the scope language of these investigations differ from the previous investigations in

two ways. First, the scope language in the previous investigations listed a lower diameter of 5.0

mm, reflecting the known commercial availability of hot-rolled CASWR products in the United

States at the time that those investigations were initiated. Because CASWR with diameters less

than 5 mm has become commercially available in the United States since that time, the scope of

this petition contains no specified lower diameter. Second, the scope of this petition does not

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PUBLIC VERSION

contain an exclusion for grade 1080 tire cord quality wire rod or grade 1080 tire bead quality

wire rod.

3. Requested Scope of Investigation

The following language describes the imported merchandise that petitioners intend to

cover in these investigations:

The merchandise covered by this investigation is certain hot-rolledproducts of carbon steel and alloy steel, in coils, of approximatelyround cross section, less than 19.00 mm, in solid cross-sectionaldiameter. Specifically excluded are steel products possessing theabove-noted physical characteristics and meeting the HarmonizedTariff Schedule of the United States (HTSUS) definitions for (a)stainless steel; (b) tool steel; (c) high nickel steel; (d) ball bearingsteel; or (e) concrete reinforcing bars and rods. Also excluded arefree cutting steel (also known as free machining steel) products(i.e., products that contain by weight one or more of the followingelements: 0.1 percent or more of lead, 0.05 percent or more ofbismuth, 0.08 percent or more of sulfur, more than 0.04 percent ofphosphorus, more than 0.05 percent of selenium, or more than 0.01percent of tellurium). All products meeting the physicaldescription of subject merchandise that are not specificallyexcluded are included in this scope.

The products under investigation are currently classifiable undersubheadings 7213.91.3011, 7213.91.3015, 7213.91.3020,7213.91.3093; 7213.91.4500, 7213.91 .6000 , 7213.99.0030,7227.20.0030 , 7227.20.0080 , 7227.90.6010 , 7227.90.6020,7227.90.6030, and 7227.90.6035 of the HTSUS. Although theHTSUS subheadings are provided for convenience and customspurposes, the written description of the scope of this proceeding isdispositive.

4. U.S. Tariff Classification

CASWR is currently classifiable in the following HTSUS subheadings: 7213.91.3011,

7213.91.3015, 7213.91.3020, 7213.91.3093; 7213.91.4500, 7213.91.6000, 7213.99.0030,

7227.20.0030, 7227.20.0080, 7227.90.6010, 7227.90.6020, 7227.90.6030, and 7227.90.6035.

See Exhibit GEN-4.

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PUBLIC VERSION

From 2011 through 2013, certain subject alloy wire rod products were classified with

non-subject hot-rolled bar products in HTSUS basket category 7227.90.6085. As of January 1,

2014, HTSUS 7227.90.6085 was replaced with four new breakouts, including 7227.90.6030

(covering circular alloy wire rod with a diameter of less than 14 mm) and 7227.90.6035

(covering circular alloy wire rod with a diameter of 14 mm or more but less than 19 mm). The

remaining two new HTSUS numbers, 7227.90.6040 (circular alloy bars and rods with a diameter

of 19 mm or more) and 7227.90.6090 (shapes other than circular), are considered bar products

outside the scope of this investigation.

E. Country of Exportation

The CASWR that is the subject of this petition is produced in and exported from China.

Petitioners have no knowledge that the subject merchandise is currently being transshipped

through any third country to the United States.

F. Producers and Exporters of the Subject Merchandise

Pursuant to the Department's regulations, 19 C.F.R. § 351.202(b)(7)(i)(A), a list of

known producers and exporters of CASWR from China is included in Exhibit GEN-5.

G. Volume and Value of Imports

The volume and value of U.S. imports of CASWR from China are presented at Exhibit

GEN-6 for calendar years 2011, 2012, and 2013, as required by the Department's regulations.

See 19 C.F.R. § 351.202(b)(8). These data are taken directly from the Commerce Department

IM-146 import reports.

H. Names and Addresses of U.S. Importers

Based on information reasonably available to petitioners, a list of known and suspected

importers of CASWR from China during the 12-month period preceding the filing of this petition

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PUBLIC VERSION

is included in Exhibit GEN-7, as required by the Department 's regulations . See 19 C.F.R.

§ 351.202(b)(9).

II. INFORMATION RELATED TO COUNTERVAILABLE SUBSIDIES

Information related to countervailable subsidies provided by the Government of China

with respect to the manufacture, production, and export of CASWR in China is provided in

Volume III of this petition.

III. THE U.S. CASWR INDUSTRY HAS BEEN MATERIALLY INJURED BYREASON OF UNFAIRLY TRADED IMPORTS OF CASWR FROM CHINA

A. The Domestic Like Product Is Co-Extensive With the Scope of the Petitionand Consists of All Carbon and Certain Alloy Steel Wire Rod

The domestic like product in this case mirrors the scope of the petition and consists of all

carbon and certain alloy steel wire rod. This domestic like product definition is consistent with

the statute and supported by the like product definition the Commission adopted in its

investigation and review of imports from Brazil, Indonesia, Mexico, Moldova, Trinidad &

Tobago and Ukraine.' Section 771(10) of the Act defines the domestic like product as "a product

which is like, or in the absence of like, most similar in characteristics and uses with, the article

subject to an investigation." 19 U.S.C. § 1677(10). In defining the like product, the Commission

looks for clear dividing lines among possible like products and disregards minor variations.

Hosiden Corp. v. Advanced Display Mfrs., 85 F.3d 1561 (Fed. Cir. 1996). Applying the

statutory standard in the 2002 determination, the Commission found all wire rod to comprise a

single continuum like product with no clear demarcations by type, grade, size or use:

2 See Carbon and Certain Alloy Steel Wire Rod from Brazil, Canada, Germany, Indonesia,Mexico , Moldova, Trinidad & Tobago , Turkey and Ukraine, Inv. Nos . 701-TA-417-421 and731-TA-953, 954, 956-959 , 961 and 962 (Final), USITC Pub . 3546 at 6-12 (Oct. 2002) ("FinalDetermination in CASWR from Brazil et al."); First CASWR Sunset , USITC Pub. 4014 at 8.

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PUBLIC VERSION

As a general matter , the record demonstrates no clear demarcationbetween the various types of wire rod products, but rather indicatesa continuum of at least 11 major categories of products rangingfrom low carbon wire rod such as industrial wire rod used for nailsand coat hangers , to medium to high quality wire rod, such as thatused for tire bead and prestressed concrete strand , to the highest-end products , including CHQ, CSPBIC , and tire cord wire rod. Incases such as the present one, where the domesticallymanufactured merchandise consists of a broad spectrum of similarproducts , the Commission does not consider each item ofmerchandise to be a separate like product that is only "like" itscounterpart in the scope, but considers the continuum itself toconstitute the domestic like product.

Final Determination in CASWR from Brazil et al., USITC Pub. 3546 at 7. Based on the

statutory standard and the Commission's prior like product determinations on CASWR, all

carbon and certain alloy steel wire rod comprises a single like product.'

All CASWR have similar of physical characteristics and are "intermediate circular, hot-

rolled products that are sold in irregularly wound coils ." Id. at 9 . While wire rods of different

grades, end use categories or sizes are not interchangeable, "there is an overlap of metallurgical

qualities , chemistry , and physical characteristics and a continuum of products with a wide variety

of uses ." Id. at 10 . All wire rod is sold through similar channels of trade, and all wire rod is

generally produced using the same basic manufacturing process and on the same hot-rolling

mills regardless of size or other physical characteristics . Id. at 10-11. Customers and producers

perceive all wire rod as comprising a single continuum of products , sharing overlapping

characteristics that create a continuum of prices . See id . at 11-12; CASWR from China,

Germany, and Turkey, USITC Pub. 3832 at 11.

' See also First CASWR Sunset, USITC Pub . 4014 at 6-7 ; Carbon and Certain Alloy Steel WireRod from China, Germany , and Turkey , Inv. Nos . 731-TA- 1099-1101 (Prelim .), USITC Pub.3832 at 9-11 (Jan. 2006)("CASWR from China, Germany , and Turkey").

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PUBLIC VERSION

As noted in section I.D.2 above, the scope of this case differs from the scope of the

existing CASWR orders in that it does not contain an expressed exclusion of 1080 tire cord

quality and grade 1080 tire bead quality wire rod and does not reference a lower diameter range

for CASWR. These differences in scope do not change the Commission's like product analysis.

In the 2002 investigations, the Commission found "a single like product consisting of all wire

rod, including the certain grade 1080 tire cord and the grade 1080 tire bead wire rod products

that Commerce excluded from the scope of the investigations." Final Determination in CASWR

from Brazil et al., USITC Pub. 3546 at 12. Thus, inclusion of these products within the scope

does not change the Commission's like product analysis.

The removal of the lower diameter limit of 5.0 mm also does not change the like product

analysis. The 5.0 mm lower diameter identified was just beyond the bottom rolling tolerance for

7/32 inch (5.6 mm) wire rod, which was "the lowest cross-sectional diameter that was being hot-

rolled in significant commercial quantities." Id. at I-6. As the Commission recognized, "{w)ire

rod is a hot-rolled intermediate product of circular or approximately circular cross-section." Id.

at 6. Petitioners' intention was to capture all sizes of wire rod within the scope and like product

of that case, and there was no domestic or subject foreign production of hot-rolled wire rod in

diameters below 5 mm at the time of that case.

After those investigations, Mexican wire rod producer Deacero S.A. de C.V developed

the ability to hot-roll CASWR in diameters below 5 mm on the same mill as it produced larger

diameter CASWR. Thus, by the time the industry filed antidumping cases against China,

Germany and Turkey in late 2005, the Commission's report noted that hot-rolled CASWR was

"typically produced in nominal fractional diameters from 3/16 inch (4.75 mm) to 47/64 inch

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PUBLIC VERSION

(18.7 mm)." CASWR from China, Germany, and Turkey, USITC Pub. 3832 at I-6. The

Commission found a single like product in that case. Id. at 11.

Furthermore, on October 1, 2012, Commerce published in the Federal Register an

affirmative circumvention determination with respect to Mexico that "wire rod with an actual

diameter of 4.75 mm to 5.00 mm by Deacero S.A. de C.V (Deacero) constitutes merchandise

altered in form or appearance in such minor respects that it should be included within the scope

of the order. 114 Recognizing that further technical advances may permit CASWR to be

commercially available in even smaller diameters, the scope language of this case removes the

bottom descriptor of diameter to effectuate the same scope and like product as in CASWR from

Brazil et al. and CASWR from China, Germany, and Turkey. Consistent with all of its prior

determinations, the Commission should conclude that the like product in this case is coterminous

with the scope language and covers all hot-rolled products of carbon steel and alloy steel, in

coils, of approximately round cross section, less than 19.00 mm, in solid cross-sectional diameter

not specifically excluded from the scope.

B. The Domestic Industry Consists of All U.S.. Producers of CASWR

Section 771(4)(A) of the Act defines the relevant industry as the "producers as a {w}hole

of a domestic like product, or those producers whose collective output of a domestic like product

constitutes a major proportion of the total domestic production of the product." 19 U.S.C.

§ 1677(4)(A). Based on this definition, the domestic industry consists of all U.S. producers of

4 Carbon and Certain Alloy Steel Wire Rod from Mexico: Affirmative Final Determination ofCircumvention of the Antidumping Duty Order on Wire Rod from Mexico, 77 Fed. Reg. 59,892(Oct. 1, 2012). The U.S. Court of International Trade has remanded the circumvention findingback to Commerce for further analysis and explanation. See Deacero S.A. de C.V. v. UnitedStates, Slip Op. 13-126 (Sept. 30, 2013). The Commerce Department's remand redeterminationwill then be subject to further review by the Court and possible further appeal.

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CASWR. These producers are the six petitioning companies as well as the domestic producers

identified in section I.B.1, supra.

C. Subject Imports Surpass the Statutory Negligibility Threshold

Pursuant to section 771(24) of the statute, imports from any single country that account

for less than 3 percent of the total import volume for subject merchandise in the most recent

12-month period for which data are available that precedes the filing of the petition are

considered negligible. 19 U.S.C. § 1677(24)(A)(i). Exhibit INJ-1 sets forth monthly U.S.

import volumes for CASWR from China for the period December 2012 through November 2013,

the most recent 12-month period for which data are currently available. As those data indicate,

imports of CASWR from China significantly exceed the statutory negligibility threshold.

Specifically, for the 12-month period examined, imports from China accounted for 36.4 percent

of total imports. See Exhibit INJ-1.

D. CASWR Imports from China Are Causing Material Injury to the DomesticIndustry

In determining whether the domestic industry has been injured by reason of the imports

under investigation , the statute directs the Commission to consider:

(1) the volume of imports of the subject merchandise;

(2) the effect of imports of that merchandise on prices in the United States for the

domestic like product; and

(3) the impact of imports of such merchandise on domestic producers in the context

of production operations within the United States.

19 U.S.C. § 1677(7)(B). Information reasonably available to petitioners indicates that increasing

volumes of dumped and subsidized imports from China have been, and continue to be, a cause of

material injury to the domestic CASWR industry.

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PUBLIC VERSION RANGED DATA

1. The Volume of CASWR Imports from China Is Significant andIncreasing

The volume of unfairly priced CASWR imports from China has rapidly increased over

the past three years. The total volume of subject imports rose from 144 tons in 2011 to 614,402

tons in 2013, representing an increase of 426,568 percent in absolute terms from 2011-13. See

Exhibit INJ-2. As a share of the U.S. market, subject imports rose from [ ] percent in

2011 to [ 12.5] percent in 2013. Id. While subject imports' market share increased, the

domestic industry's share of the market declined from [ ] percent to [ ] percent over the

2011-13 period. Subject import market share grew by substantially more that the estimated

[ ] percent growth in domestic consumption over the same period.

2. Unfairly Traded CASWR Imports from China Have Had SignificantNegative Price Effects on the Domestic Industry

In its 2002 investigations of CASWR from multiple countries, the Commission found

that price was one of the most important factors in CASWR sales in the U.S. market. Final

Determination in CASWR from Brazil et al. USITC Pub. 3546 at 28 and 29. Similarly, the

Commission found in the first CASWR sunset review that "price plays an important role in the

purchasing decision for wire rod." First CASWR Sunset, USITC Pub. 4014 at 33. CASWR

remains a price-sensitive product. The low-priced, dumped and subsidized subject imports in

these investigations have had significant negative price effects on the domestic CASWR

industry. Price underselling by unfairly-traded imports of CASWR from China has significantly

depressed the prices at which domestic producers have sold CASWR during the past three years.

PUBLIC VERSION

a. Subject Imports Have Undersold Domestically-ProducedCASWR by Substantial Margins, Causing the DomesticIndustry Lost Sales , Lost Revenue, and Price Suppression andDepression

Based on the domestic industry 's examples of lost sales provided at Exhibit INJ-3,

import prices from China show consistent, significant, and widespread underselling of U.S.

producer's prices. See Exhibit INJ-3 (Lost Sales and Lost Revenue Data). In 2013, the

underselling margins by imports from China were generally in the [ ] percent range. Id.

The average unit values ("AUVs") of imports from China fell significantly over the 2011-2013

period, dropping from $994 per ton in 2011 to the extremely low level of $507 per ton in 2013.

See Exhibit GEN-6 (Volume and Value of U.S. Imports). Chinese import AUVs were well

below the AUVs of other countries, with the average import AUV of all other countries standing

at $762 per ton in 2013. Id.

The underselling and declining prices of imports from China resulted in the depression of

U.S. producer prices during the 2011-2013 period. See Exhibits INJ-3 (Lost Sales and Lost

Revenue Data) and INJ-4 (U.S. Producers' Trade and Financial Data). As U.S. producers were

forced to reduce their prices to compete with low-priced subject imports, domestic producers'

prices fell over the past three years. Notably, the AUV of domestic producers' U.S. shipments

declined from [ ] per ton in 2011 to [ ] in 2013. See Exhibit INJ-4 (U.S.

Producers' Trade and Financial Data).

The lost sales and lost revenue examples provided in Exhibit INJ-3 demonstrate that

subject imports caused U.S. producers to lose sales volume and revenue, negatively affecting

their bottom line. See Exhibits INJ-3 and INJ-4.

-15-

PUBLIC VERSION

b. Identification of CASWR Products for Which PetitionersRequest Collection of Price Data

Pursuant to Section 207.11(b)(2)(iv) of the Commission ' s regulations , 19 C.F.R.

§ 207.11(b)(2)(iv), petitioners recommend that the Commission collect pricing data on the

following CASWR products:

PRODUCT l: Industrial quality wire rod, grade C1006, 5.5 mm (7/32 inch)through 12 mm (15/32 inch ) in diameter, for hangers, chain linkfencing, collated nails and staples, grates, and other formedproducts (in green condition, e.g., NOT cleaned, coated, etc.).

PRODUCT 2: Industrial quality wire rod, grades C 1008 through C 1010, 5.5 mm(7/32 inch) through 12 mm (15/32 inch ) in diameter, for hangers,chain link fencing, collated nails and staples, grates, and otherformed products (in green condition, e.g., NOT cleaned, coated,etc.).

PRODUCT 3: Mesh quality wire rod, grades C1006 through C1015, 5.5 mm(7/32 inch) through 14 mm (9/16 inch) in diameter, formanufacturing of concrete reinforcement products such as wire forA-82 applications (in green condition, e.g., NOT cleaned, coated,etc.).

PRODUCT 4: Grades C1050 through C1070, 5.5 mm (7/32 inch) through 6.5 mm(1/4 inch) in diameter, for spring applications excluding valvespring (in green condition, e.g. not cleaned, coated, etc.).

PRODUCT 5: Industrial quality wire, Grades C1060 through 1065, 5.5mm (7/32inch) through 17.5 mm (11/16 inch) in diameter, for spring wirerod used in upholstery and mechanical applications, as well as oil-tempered spring applications.

These price descriptors accounted for a significant percentage of sales made in the United States

of CASWR during the past three years and, accordingly, are the appropriate products for the

Commission's analysis and comparison of U.S. producer and import prices.

3. Unfairly Traded CASWR Imports from China Have Had ASignificant Negative Impact on the Domestic CASWR Industry

In assessing whether the domestic industry is materially injured by reason of

unfairly-traded imports, the Commission considers relevant statutory factors reflecting the state

-16-

PUBLIC VERSION

of the domestic industry. See 19 U.S.C. § 1677(7)(c)(iii). The domestic CASWR industry has

suffered material injury by reason of subject imports, as manifested in the market share lost to

the unfairly-traded imports, suppressed and depressed U.S. prices, and resultant weakness and

deterioration of key U.S. industry trade and financial indicators. The significant volume of

subject imports that has undersold domestically-produced CASWR has caused U.S. production

and shipment cutbacks. The reduction in domestic sales volume, as well as suppression and

depression of U.S. prices by imports, has resulted in lost sales , decreased employment and

financial deterioration. These data, described in more detail below, provide evidence of a causal

link between rising imports of dumped and subsidized CASWR from China and the material

injury being suffered by the U.S. industry producing CASWR.

a. Decreasing U.S. Shipment and Production Trends and LowCapacity Utilization Rates for CASWR Demonstrate theMaterial Iniury Caused by Subiect Imports

The substantial increase in subject imports' share of the CASWR market has resulted in

the domestic industry's loss of sales volume and substantial production declines . Domestic

production and shipments both decreased during the 2011-13 period.' See Exhibit INJ-4 (U.S.

Producers' Trade and Financial Data). The displacement of U.S. producer sales by unfairly-

traded subject imports led to anemic capacity utilization in the domestic industry. By 2013, the

U.S. industry was utilizing only [ ] percent of its capacity. Id. Petitioners have ample

capacity to supply CASWR customers ' requirements but have been unable to supply more

CASWR to the market due to lost sales and market share to the high volume of lower-priced,

dumped, and subsidized subject imports.

' The data in Exhibit INJ-4 (U.S. Producers' Trade and Financial Data) represent actualperformance information reported by the five petitioning companies during the past three years.

-17-


In addition, the loss of U.S. market share and decrease in CASWR shipments over the

past three years has had a negative effect on domestic industry employment. Specifically,

petitioners' employment and related workers ("PRWs") declined from [ f S00] workers in 2011

to [ 1,45b] workers in 2013. See Exhibit INJ-4 (U.S. Producers' Trade and Financial Data).

The growth in volume and unfair pricing of subject imports are directly affecting the livelihood

of workers in the United States.

b. Petitioners ' Declining Operating Income Demonstrates theInjurious Impact of the Substantial Volumes of Low-PricedImports from China

The financial performance of the domestic CASWR industry also displayed deterioration

as a result of unfairly traded imports from China. The domestic industry's net sales value

declined significantly over the past three years, falling from [ ] in 2011 to [

] in 2013. Id. This decline reflects both the decline in net sales quantity and the price

depression and suppression experienced by the domestic industry. See Exhibit INJ-4 (U.S.

Producers' Trade and Financial Data).

The increasing volumes of low-priced imports that continually undercut U.S. producer

prices resulted in declining operating profits for the U.S. industry. Id. From 2011-13, the

domestic producers' operating profits declined by [ ] percent. Id. The financial deterioration

of the domestic CASWR industry is directly related to declining sales and revenue resulting from

increased volumes of unfairly-priced imports.

C. Petitioners Have Lost Sales and Revenues to Unfair CASWRImports from China

The existence of a causal link between rising import volume and market share and U.S.

producers' declining profits and market share is corroborated by the anecdotal lost sales and lost

revenue information collected and attached as Exhibit INJ-3. This exhibit identifies instances in

-18-

PUBLIC VERSION

which petitioners lost sales to unfairly traded CASWR imports from China, as well as

transactions in which petitioners lost revenues due to being forced to lower their prices in

response to competing bids from unfairly-traded CASWR imports from China. Id. This

evidence of lost sales and revenues ties the financial performance of the domestic industry to the

injurious price and volume of dumped and subsidized subject imports.

IV. THE DOMESTIC INDUSTRY IS THREATENED WITH FURTHER MATERIALINJURY BY REASON OF UNFAIR IMPORTS OF CASWR FROM CHINA

In addition to analyzing present material injury, the statute requires the Commission to

determine whether the domestic industry is threatened with material injury by reason of the

unfair imports. 19 U.S.C. § 1677(7)(F). In making this determination, the Commission is

directed to examine a number of factors specified in the statute, including, inter alia, an increase

in foreign producers' productive capacity or existing unused capacity; a significant rate of

increase of the volume or market penetration of the subject imports; and the likelihood that

imports of the subject merchandise are entering at prices that will have a significant depressing

or suppressing effect on domestic prices. 19 U.S.C. § 1677(7)(F)(i).

As indicated below, there is ample evidence that imports of CASWR from China also

present a massive and imminent threat of further material injury to the domestic industry.

• Chinese CASWR productive capacity is massive. Petitioners have identified atleast 33 major producers of carbon steel wire rod in China, many of which haveannual CASWR productive capacities of [ ] metric tons. SeeExhibit INJ-5. Total production of CASWR in China was over [

] in the first eleven months of 2013. Id. at []. This massive capacity dwarfs the [ ]

of annual apparent U.S. consumption of CASWR in 2013. See Exhibit INJ-2.

• Despite massive inventories and millions of tons of unused Chinese CASWRproductive capacity, Chinese producers are still building additional capacity. SeeExhibit INJ-5.

-19-


• The subject producers are highly export-oriented, with the United States beingone of their primary export markets. Id. and Exhibit INJ-2.

• There has been a significant rate of increase in subject import volume and U.S.market share during the 2011-2013 period. From a volume of 144 tons and amarket share of [ ] percent in 2011, subject imports increased in volumeto 614,402 tons and to a market share of [ )a,^ ] percent in 2013. See sectionIII.D.1 and Exhibit INJ-2.

• It is likely that subject imports will enter the United States at pricing levels thatwill depress and suppress U.S. prices in the imminent future, as they have duringthe past three years. See section III.D.2. In the face of recent price aggression,the threat of continued suppressing and depressing effects of subject imports ondomestic prices is real and imminent. See id.

PUBLIC VERSION

V. CONCLUSION

For the reasons stated in this petition , petitioners request that the Commerce Department

and the International Trade Commission initiate antidumping and countervailing duty

investigations of CASWR from China.

Respectfully submitted,

1.^'j B yawk -ALAN H. PRICEDANIEL B . PICKARDCHRISTOPHER B. WELDWILEY REIN, LLP1776 K Street, N.W.Washington , DC 20006(202) 719-3375

PAUL C. ROSENTHALKATHLEEN W. CANNONR. ALAN LUBERDABENJAMIN BLASE CARYLKELLEY DRYE & WARREN LLP3050 K Street , N.W., Suite 400Washington , D.C. 20007(202) 342-8400

Counsel to Nucor Corporation

ECONOMIC CONSULTANTS:

Counsel to 4rcelorMittal USA LLC, CharterSteel, Evraz Rocky Mountain Steel, GerdauAmeristeel US Inc., and KeystoneConsolidated Industries, Inc.

GINA E. BECKJULIE H. SANTOBONIGEORGETOWN ECONOMIC SERVICES, LLC3050 K Street, N.W., Suite 400Washington, DC 20007(202) 945-6660

Dated: January 31, 2014

PUBLIC VERSION

Exhibit GEN-1

Exhibit GEN-2

Exhibit GEN-3

Exhibit GEN-4

Exhibit GEN-5

Exhibit GEN-6

Exhibit GEN-7

Exhibit INJ-1

Exhibit INJ-2

Exhibit INJ-3

Exhibit INJ-4

Exhibit INJ-5

VOLUME I EXHIBITS : TABLE OF CONTENTS

Industry Support Data

History of Prior Actions

Description of Merchandise, USITC Pub. 4014, pp. I-22 - I-27

Excerpts from HTSUS Chapter 72, 2013-2014

Chinese CASWR Producers and Exporters

Volume and Value of U.S. Imports

List of U.S. Importers

Negligibility Chart: U.S. Imports Dec. 2012 -Nov. 2013

Import Volume and Market Share

Lost Sales and Lost Revenue Data

U.S. CASWR Producers' Trade and Financial Data

Articles Concerning Chinese CASWR Industry

Exhibit GEN-1

PUBLIC VERSION

RANGED DATA

Carbon and Certain Alloy Steel Wire Rod ("CASWR")

STANDING CALCULATIONS

U.S. PRODUCTION IN 2013 (in short tons):

ArcelorMittal USA LLCCharterEvraz Rocky Mountain SteeGerdau Ameristeel US Inc.Keystone Consolidated Industries, Inc.Nucor CorporationPetitioners ' Subtotal

TOTAL U .S. PRODUCTION

THOSE IN SUPPORT OF THE PETITION AS A SHAREOF TOTAL U.S. PRODUCTION

THOSE IN SUPPORT OF THE PETITION AS A SHAREOF THOSE EXPRESSING SUPPORT OR OPPOSITION

II

I

I

Source: Production figures represent actual data reported by [ r,pvv, g0Lr%e,$ $ AN1-N If

] and [ orbnwS0((X6+

I

Prepared by Georgebwn Economic Services

PUBLIC VERSION

DECLARATION OF [ f)CLYhe-, 1

I, [ r-so. f_ ] do hereby declare and state that:

1. [ De d ay-avyt \ s ex pert ^+n ce and pos f+10 ".

I

2. IZ D 13 ? rod u c-+ t ova x v\4)rma+-t d vNeKp lainai--^0 N .

I

[name I

[ name. I

[Mme I

s^9hoc^r2,

January 27, 2014

PUBLIC VERSION

DECLARATION OF f, AaYy\e--

I' 1 ►n0.Ylfle 1 do hereby declare and state that;

Cynplocjer and po%t+lovnI

J

3. I do.A%x.I

s igna^vre,

January 27.20:14

Exhibit GEN-2

EXHIBIT G E N-2

CHRONOLOGY OF ANTIDUMPING AND COUNTERVAILING DUTY INVESTIGATIONS, SECTION201 INVESTIGATIONS, AND OTHER RELATED PROCEEDINGS INVOLVING

CASWR

Antidumping and Countervailing Duty Investigations

Filing Date of , I Initiation Type of Country DispositionPetition Date Investigation j

Feb. 8. 1982 Mar. 4, 1982 I Section 701 of Brazil I Brazil:I the Trade Act Belgium Investigation ("Inv.) suspended on Sept. 27, 1982 (47

of 1930 (the France FR 42399)"Act'' VD(C.) i ^ Inv. terminated on Oct. 21, 1985 (50 FR 33809)

Belgium & France:1 Inv. terminated (petition withdrawn) on Nov. 9, 1982 (47j FR 50732)

Feb. 8. 1982 j Mar. 4. 1982 11 Section 303 of Argentina Argentina:the Act South Africa ( Inv. suspended on Sept_ 27: 1982 (47 FR 42393);(CVD) i Order revoked (ITC negative sunset) (Pub. 3270. Jan.

i2000)

I South Africa:

` e Order issued on Sept. 27. 1982 (47 FR 42396);Order revoked on Oct. 7, 1985 in DOC changed

j ' circumstances review (50 FR 40885)

Feb. 8. 1982 Mar. 4, 1982 ' Section 731 of Venezuela Negative Injury (Pub. 1338, Feb. 1983)the Act (AD) I

Sept. 30, 1982 I Oct. 26, 1982 Section 731 of ; Brazil I Brazil:I I the Act (AD) 1 Trinidad & Affirmative injury (Pub. 1444, Oct. 1983)1

fTobago . Order revoked on Sept. 20, 1985 and replaced with

Voluntary Restraint Agreement ("VRA") (50 FR 38150)

Trinidad & Tobago:j • Affirmative injury (Pub. 1444, Oct. 1983)

• Order revoked on Dec. 3, 1987 and replaced with VRA(52 FR 45982)

May 16.1983 June 15, 1983 Section 303 of Trinidad & Affirmative injury (Pub. 1444, Oct. 1983)the Act Tobago Order revoked on Dec. 14, 1987 and replaced with VRA(CVD) I

(52 FR 47440)

Nov. 23, 1983 Dec. 21. 1983 Section 701 of Spain Affirmative injury (Pub. 1544, June 1984)the Act Order revoked on Sept. 11, 1985 and replaced with VRA

{I

(CVD) ! (50 FR 37018)

Nov. 23.. 1983 Dec. 21, 1983 Section 303 Czechoslovakia i Czechoslovakia:of the Act Poland Inv. terminated (DOC negative) on Feb. 16. 1984 (49 FR(CVD) 6773)

Poland:• Inv. terminated (DOC negative) on May 7, 1984 (49 FR

i ii I

I

I

{

19374)

iI

I

2

Nov. 23, 1983 1 Dec. 30, 1983 Section 731 of i Argentina ( Argentina:the Act (AD) i Mexico Affinnative injury (Pub. 1598. Nov. 1984)

i i Poland e Order revoked (ITC negative sunset) (Pub. 3270, Jan. i

ISpain 2000)

I r 1Mexico:

j Inv. terminated (petition withdrawn) on July 6, 1984 duei { to VRA (49 FR 27806)

iPoland:

l1ITC negative (Pub. 1574, Sept. 1984)

Spain:i ® Affirmative injury (Pub. 1598, Nov. 1984)

i Order revoked on Sept. 16, 1985 and replaced with VRA! (50 FR 37560)

iI

Sept. 26, 1984 Oct. 24, 1984 Section 731 of 11 German a Inv. tenninated (petition withdrawn) on Aug. 1, 1985 jthe Act (AD) Democratic and. replaced with VRA (50 FR 31213)

1iIi

i Republici

Apr. 8, 1985 May 3, 1985 ':. Section 731 of Poland , Poland:j i the Act (AD) ! Portugal Inv. terminated (petition withdrawn) on Sept. I0. 1985

Venezuelaj

{ and replaced with VRA (50 FR 36909)

iPortugal:

Inv. terminated (petition xithdrawn) on Dec. 10, 1985

Iand replaced with VRA (50 FR 50335)

IVenezuela:

I I Inv. terminated (petition withdrawn) on Aug. 12, 1985j i and replaced with VRA (50 FR 32465)

Apr. 8, 1985 May 6, 1985 Section 701 Portugal Inv. terminated (petition withdrawn) on Dec. 1.0, 1985of the Act I Venezuela and replaced with VRA (50 FR 50335)

! (CVD)June 12, 1985 July 11, 1985 ; Section 303 of Saudi Arabia Order issued on Feb. 3, 1986 (51 FR 4206)

the Act • Order revoked on Nov. 15, 1994 (59 FR 58814)(CVD)

I Aug. 8, 1985j

Sept. 5, 1985 !I

Section 303f th A t

Singapore . Inv. terminated (Negative at DOC) on Tan. 27, 1986 (51e co

(CVD)FR 3357)

Sept. 23; 1985 Oct. 18, 1.985 Section 303 New Zealand • Order issued on Mar. 7, 1986 (51 FR 7971)of the Act . Order revoked on May 26, 1995 due to enactment of the(CVD) Uruguay Round Agreements Act of 1994 (URAA) (See

j

I I I60 FR 27693)

I Mar. 4, 1986 Mar. 31, 1986 Section 303 Malaysia Malaysia:I of the Act Zimbabwe Inv. terminated (petition withdrawn) on Aug. 14, 1986

(CVD) (51 FR 29145)

IZimbabwe:

Order issued on Aug. 15, 1986 (53 FR 13303)Order revoked on Sept. 29, 1995 due to URAA (60 FR

I 50503)

Sept- 3, 1987 i Sept. 307 1987 1 Section 303 of Malaysia i • Order issued on Apr. 22, 1988 (53 FR 13303)! the Act Order revoked on May 26.1995 due to URAA (See 60

(CVD) I FR 27693)

Oct. 22, 1987 Section 303 of Singapore i • Inv. terminated (DOC negative) on May 6,. 1988 (53 FRthe Act I 16304)

I ^

(CVD)

!i

4

Apr. 23, 1. 993 Apr. 30, 1993 Section 731 of Brazil i Canada:the Act (AD) Canada Inv. terminated (petition withdrawn) on May 4, 1994(59

Japan FR 23053)Trinidad &

j ! Tobago Brazil & Japan:ITC final negative (Pub. 2761, Mar. 1994)

I !Trinidad & Tobago:

` Inv. terminated (negative prelim. injury) (Pub. 2647,June 1993)

i

Feb. 14, 1994 Mar. 14, 1994 Section 731 of Belgium { Belgium:the Act Germany i Inv. terminated (petition withdrawn) on Aug. 2, 1994

j i (CVD) (59 FR 39324)

Germany:' e Inv. terminated (ITC prelim. negative) (Pub. 2760. Mar.

!!

1994)

Feb. 14, 1994 i Mar. 14, 1994 I Section 701 of I Germany j Inv. terminated (ITC prelim. negative) (Pub. 2760, Mar.? the Act (AD) I 1994) j

Feb. 26. 1997 Mar. 24; 1997 i Section 731 of Canada ITC final negative (Pub. 3087, Mar. 1998)! ! the Act (AD) Germany j

Trinidad &Tobago

^

!

i

Venezuela

!

j

j

ij

i

Feb. 26; 1997

i

Mar. 24. 1997

I

I

Section 701 of Canadathe Act i Germany(CVD) i "Trinidad &

TobagoVenezuela

i

Germany:Inv_ terminated (negligible imports) (Pub. 3075; Nov.1997)

Canada , Trinidad & Tobago, Venezuela:ITC final negative (Pub. 3075; Nov. 1997)

Aug. 31, 2001 Oct. 2. 2001 ' Section 731 of Brazil Egypt, South Africa, and Venezuela:the Act (AD) Canada Inv. terminated (ITC prelim. negative) (Pub. 3987, Mar.

Egypt 2008, 3r`^ Remand)j Germany

Indonesia Germany:Mexico • Inv. terminated (negligible imports) (Pub_ 3546, Oct.

I ; { Moldova 2002)South AfricaTrinidad & Canada:Tobago Affirmative injury (Pub. 3730. Oct. 2004, Remand)

I ! Ukrainei Venezuela

® Order revoked (ITC negative in 1tit sunset) (Pub. 4014,

' Jun. 2008)i

Brazil, Indonesia, Mexico, Moldova , and Ukraine:i • Affirmative injury (Pub. 3546, Oct. 2002)

i• Affinnative 1" sunset (Pub. 4014, Jun. 2008)

• Currently in 2"d Full Sunset Review (78 FR 60316, Oct.i 1, 2013)

ii

Trinidad & Tobago:

• Affirmative injury (Pub. 4170, June 2010, 2"'1 Remand)j o Affinnative I" sunset (Pub. 4014; Jun. 2008)I • Currently in 2nd Full Sunset Review (78 FR 60316, Oct.)

I1.2013)

6

Aug. 17 2001y

Oct. 1, 2001 Section 701 of ! Brazil rinidad & Tobago and Turkey:Tj the Act Canada i e Inv. terminated (DOC negative) on Aug. 30, 2002 (67

(CVD) Germanv FR 55810)Trinidad &Tobago Germanv:

i Turkey Inv. tenninated (negligible imports) (Pub. 3546, Oct.i 2002)

j Canada:Affirmative injury (Pub. 3730, Oct. 2004, Remand)

j Order revoked in DOC changed circumstances reviewi ' on Jan. 23, 2004 (69 FR 333 0)

Brazil:e Affirmative injury (Pub. 3546, Oct. 2002)e Affirmative I" sunset (Pub. 4014, Jun. 2008). Currently in 2"d Full Sunset Review (78 FR 60316, Oct.

1, 2013)

Nov. 10, 2005 Dec. 7, 2005 i Section 731 of China ^ China, Germany and Turkey:

1 the Act (AD) Germany ; Inv. terminated (ITC prelim. negative) (Pub. 3832, Jan.Turkey 2006)

7

SafejZuard Investigations

Filing Date of Petition Type of Investigation Disposition

Jan. 24, 1984 Section 201 of the Act (TA- . Negative with respect to carbon steel wire rod (Pub. 1553,201-51) July 1984)

Jan. 12, 1999 Section 201 of the Act e Affirmative, 3-3 vote; except for Canada and Mexico (Pub.(TA-201-69) 3207; July 1999)

• President announced relief to the industry on Feb. 16;2000; in the form of tariff rate quota (`' FRQ") for 3 yearsand 1 day (Pres. Proclamation 7273)

• On Nov. 21, 2001; the President modified the TRQ to beallocated among four supplier country groupings (Pres.Proclamation 7505)

• Relief expired on March 1, 2003.

July 24, 2001 Section 312(c) of NAFTA . ITC made an affirmative determination that Canada andImplementation Act (NAFTA- Mexico were undermining the section 201 relief to the312-1) i domestic wire rod industry (66 FR 45692, Aug. 29, 2001)

• President declined to extend the import relief to imports! from Canada and Mexico

Apr. H. ; 2003 Section 204(d) of the Act e On Apr_ 11, 2003, ITC instituted an investigation to(TA-204-6) evaluate effectiveness of the relief (68 FR 19578)

On August 28; 2003; the ITC transmitted its report to thePresident and Con<_7ress (Pub. 3629, Aug. 2003)

8

Exhibit GEN-3

Carbon and Certain Alloy Steel Wire Rodfrom Brazil , Canada, Indonesia , Mexico,

Moldova , Trinidad and Tobago, andUkraine

I nvestigation Nos. 701-TA-417 and 731-TA-953, 954, 957-959, 961, and 962(Review)

Publication 4014 June 2008

Washington, DC 20436

Tariff "Treatment

Wire rod is imported under the following statistical reporting numbers ofthe Harmonized TariffSchedule ofthe United States ("HTS"): 7213.91.301 1, 7213.91.3015, 7213.91.3092, 7213,91,4500,7213,91,6000, 7213.99.0030, 7213.99.0090, 7227.20.0000, 7227. 90.6010, and 7227,90,6080," At thetime of the original investigations general U,S. tariffs on wire rod, applicable to U,S. imports that areproducts of the subject countries and classified under these headings , ranged from 0.8 to 0.9 percent advalorem for nonalloy steel and were 1 , 8 percent ad valorem for alloy steel . By January 1, 2004, thesetariffs had been eliminated , resulting in a general duty rate of"Free,"

THE DOMESTIC LIKE PRODUCT

Description and Uses

Wire rod is a hot-rolled intermediate steel product of circular or approximately circular crosssection that typically is produced in nominal fi•actional diameters from 7/32 inch (5.6 nun) to 47/64 inch(18.7 mm) and sold in irregularly wound coils, primarily for subsequent drawing and finishing by wiredrawers. " s Wire rod sold in the United States is categorized by "quality" according to end use. End-usecategories are broad descriptions with overlapping metallurgical qualities, chemistries, and physicalcharacteristics."

'I'able 1-12 presents quality and commodity descriptions for 1 I major types of wire rod, asindicated by the Iron and Steel Society. Industrial quality wire rod currently accounts for the majority ofwire rod consumed in the United States. It is primarily intended for drawing into industrial (or standard)quality wire that, in turn, is used to manufacture such products as nails, reinforcing wire mesh and chainlint: fence. Most of the industrial quality wire rod is produced and sold in the smallest cross-sectionaldiameter that is hot rolled in substantial commercial quantities (7/32 inch or 5,6 mm). Industrial qualitywire rod generally is manufactured From low- or medium-low-carbon steel.'"

17 "I,here have been several changes to the FITS classifications for reporting IJ,S. imports of wire rod. Thefollowing are the relevant statistical reporting numbers Rn- subject wire rod during previous periods:

2002: 7213.91.3010, 7213.91.3090, 7213.91.4510, 7213.91.4590. 7213.91.6010, 72 13,91.6090,7213.99.0031, 7213.99.0038, 7213.99,0090, 7227,20.0010, 7227.20,0020, 7227,20.0095, 7227.90.6051,7227.90.6053, and 7227.90.6059.

2003: 7213.91.301(1, 7213.91.3090, 7213.91.4510, 7213.91.4590, 7213.91.6010. 7213.91,6090.72- 13,99.0031, 7213,99.0038, 7213.99.0090, 7227.20.0010, 7227.20.0020, 7227.20.0095, 7227,90,605 1,7227.90.6053, and 7227.90.6059.

2004: 7213.91,301 I, 7213,91.3091, 7213.91.4500, 7213.91.6000, 7213.99.0030. 7213.99.0090,7227.20.0000, and 7227.90.6050.

2005: 7213.91.3011, 7213.91,3015, 7213.91.3092, 7213.91.4500, 7213.91.6000, 7213.99.0030,7213.99.0090. 7227.20.0000, and 72227.90.6050.

2006-08: 7213.91.301 1, 7213.91.3015, 7213.91.3092, 72 13.91.4 5001 7213.91.6000, 7213.99.0030,7213,99,0090, 7227.20.0000, 7227.90.6010, and 7227.90.6080.

31 Wire drawers (also referred to as redi'mvers) manulitcture wire and wwire products and may be independent of"the wire rod manufacturers or may be affiliated parties.

Steel ductility, hardness, and tensile strength are positively correlated with carbon content. Alloying elementscan be added dining the melt stage of the steelmaking process to convey various characteristics to 1110 wire rod.

10 Iron and Steel Society, Steel Products kfonuul: Carbon Steel IVire and Rocls, August 1993.. p. 36.

1-22

Table 1-12Wire rod : Quality, end uses , and im portant characteristics

Quality End uses Important characteristics

Chain quality Electric welded chain Butt-welding properties and uniforminternal soundness

Cold-finishing quality Cold-drawn bars Surface quality

Cold-heading quality Cold-heading, cold-forging, cold- Internal soundness, good surfaceextrusion products quality, may require thermal

treatments

Concrete reinforcement Nondeformed rods for reinforcing Chemical composition importantconcrete (plain round or smooth surface only insofar as it affects mechanicalrounds) property

Fine wire Insect screen, weaving wire, florist wire Rods must be suitable for drawinginto wire sizes as small as 0.035inch (0.889 mm) withoutintermediate annealing; internalquality important

High carbon and medium-high Strand and rope, tire bead, upholstery Requires thermal treatment prior tocarbon spring, mechanical spring, screens, drawing; however, it is not intended

aluminum conductors steel reinforced to be used for music wire or valvecore, prestressed concrete strand; pipe spring wirewrap wire is a subset

Industrial (standard) quality Nails, coat hangers, mesh for concrete Can only be drawn a limited numberreinforcement, fencing of times before requiring thermal

treatment

Music spring wire Springs subject to high stress; valve Restrictive requirements forsprings are a subset chemistry, cleanliness, segregation,

decarburization, surfaceimperfections

Scrapless nut Fasteners produced by cold heading, Internal soundness, good surfacecold expanding, cold punching, thread qualitytapping

Tire cord Tread reinforcement in pneumatic tires Restrictive requirements forcleanliness, segregation,decarburization, chemistry, surfaceimperfections

Welding quality Wire for gas welding, electric arc Restrictive requirements for uniformwelding, submerged arc welding, metal chemistryinert gas welding

Source: Iron and Steel Society, Steel Products Manual: Carbon Slee/ Wire and Rods, August 1993, pp. 35-37.

I-23

Other relatively large-volume qualities of wire rod consumed in the United States include high-

and medium-high carbon and cold-heading quality. 1-ligh- and medlun-high carbon wire rod are intended

for drawing, into wire for such products as strand, upholstery Spring, mechanical Sprint),, rope, screens, and

pre-stressed concrete wire." Cold-heading quality wire rod meeting ASTM F2282, a quality standard,generally is used in the production of industrial fasteners and other products that must be cold headed,

cold forged, or cold-extruded."'

Manufacturing Process

The manufacturing process for wire rod consists of several stages: (1) steelmaking, where thesteel's chemistry is fixed; (2) casting the steel into a semifinished shape (billet); (3) hol-rolling the billetinto rod on a multistand, high-speed rolling mill; and (4) coiling and controlled cooling of the wire rod asit passes along a Stelmor deck (a specialized conveyor Unique to the wire rod industry).''

U.S. and foreign wire rod Inal1ufactUITI-S have made capital investments in their production

Iacilities to improve processing efficiencies and product quality. Standards ol'product quality (e.g.,

tighter dimensional tolerances, control over residuals, and coil weight) have become higher across theentire range of wire rod products largely in response to customer demands for improved performance on

the customer's equipment. These improvements have tended to blur the distinctions among quality terms

over time."Most US. wire rod producers use minimill technology to melt scrap in an electric arc furnace.

The exceptions to this are (1) Republic Technologies (formerly USS/Kobe), which employs the integratedroute to steelmaking (i.e., a basic oxygen furnace using pig iron, which is produced from iron ore), and(2) those rod producers who are not steelmakers and, therefore, purchase billets. Both *** purchasebillets for their specialty products."

11,1'he end uses of very high quality wire rod are those where nlanul'acturing process involve huge amounts ofcold deformation ol'the steel such as in recessed quality colic heading; those that are safety critical, such asautomotive wheel bolts and tire reinforcing wire; those that have very demanding consistency requirements orunusual steel chenlisty requirements, such as certain welding grades: and other applications that put unusual anddcnlanding rcquircntcnts on the steel. Posthcaring brieful'k aeu. Ans\\ers to Commissioners' Questions p. 15.

ASfM F2282 establishes quality assur,ulcc requirements 1101111C physical, nlechtill iCa1. and metallurgicalrequirements 101- carbon and alloy steel wire, rods, and bars in coils intended for the manufacture of inechanicalfasteners (bolts, nuts, rivets, screws, washers, and special parts mallUNCtured cold). The steel industry uses the term"quality" to designate material having characteristics particularly well suited to a specific labricanon and/orapplication and does not imply "quality" in the usual sense. While wire rod meeting ASTM F2282 generally istermed cold-heading quality, other rod, not meeting the standard, also may be classified as cold-heading quality.ASTM F2282, however, is the standard identified in the I H'S for classifying imports of cold-heading quality wirerod.

a' The Stelmor deck allows for the controlled cooling of wire rod. This cooling speed imparts certain physicalcharacteristics, enabling producers to produce a wider range ofwirc rod qualities. Must. iinot all. U.S. Wire rodproducers have installed controlled cooling capacities.

1 Carbon arnlCerleiii?AllnpSteel Wire KoditomC'hina. Germane. anell'urkev. /revs. ;Vos. 73/-1:4-1099-//U/(Preliminary), USITC Publication 3832, January 2006. p. 1-8.

-IS . S producer questionnaire, I1-6.

1-24

Wire rod producers that purchase billets, such as ***," may purchase virgin steel billets for theirhigher quality production." Wire rod manufacturers, such as Republic, that have steelmakingcapabilities, can produce their own billets for the desired end product by using more virgin iron ore tolimit residues or by using more scrap for more industrial grade products, One non-U.S. producer furtherclaims the use of virgin iron ore enables it to produce its highest quality wire rod.'"

Minimills use scrap as their primary raw material and may add direct reduced iron (DRI) or hot-briquetted iron and/or pig iron to the mix, depending on the specifications for the end product and therelative costs of the rave materials. Minimills that produce high quality rod products, such as high carbon,cold heading quality, fire cord quality, and/or other special quality wire rod may use less scrap and moreDR I than other steelmakers, however the production process in general does not change.

Melt Stage

There are two primary process routes by which steel for rod is made in the United States and the

seven subject countries: the integrated process, which employs blast furnaces and basic oxygen furnaces

(BOFs), and the nonintegrated production processes which utilizes an electric are furnace (EW') to

produce raw steel, in both processes, pig iron, steel scrap, and/or DR I" is charged into 1301-'s or FAY"s.

Most of the steel produced in the United States Im rod production is melted !font scrap it) Ill ["Al",

although pig iron may be used as part of the [?Al' charge. Alloy agents are added to the liquid steel to

impart specific properties to finished steel products. The molten steel is poured or tapped from thefurnace to a ladle, which is an open-topped, refractory-lined vessel that has an olT center opening in its

bottom and is equipped with a nozzle. Meanwhile, the primary steelmaking vessel (I-AP or 1301") may be

charged with new materials to begin another relining cycle.Molten steel typically is treated in a ladle metallurgy station, where its chemistry is refined to

give the steel those properties required for specific applications, At the ladle metallurgy, or secondarysteel making, station the chemical content (particularly that of carbon and sulfur) is adjusted, and alloyingagents may be added. The steel may be degassed (eliminating oxygen and hydrogen) at low pressures.'Ladle metallurgy stations are equipped with electric are power to adjust the temperature ofthe moltensteel for optimum casting and to allow it to serve as a holding reservoir for tile lundish.

10 ***. [-mail from *** March 19, 2008.

'" * * * questionnaire responses. Virgin here refers to billets from iron ore that is mined and refined. Sledproducers nlay choose to use higher portions of virgin ore, commonly in the form of'pig iron, direct reduced iron, ortaconite pellets, in their production mix to limit residual elements found in recycled scrap.

's ***,s questionnaire, II- l.

" The advantage of using DR) or pig iron (1301' steel) is the low levels ofresidual elements (copper, chromium,nickel, molybdenum, and tin) and reduced gaseous content (parliculttt'ly nitrogen) that tlley impart to the steel.Compared to i3Of steel, FAP scrap-based steel contains higher levels of certain residuals. which adversely al'Icctyields and drawing efficiencies.. and limit such scrap-based steel use in certain critical applications.

}0 Liquid steel absorbs gasses from the aunosphere and from the materials used in the steehnaking process. Thesegasses, chielly oxygen and hydrogen, cause embrittlenlent, voids, and nonmetallic inclusions. Low pressures. suchUS in a vacuum, aid the release. of oxygen in gas form without the need For additions of "deoxidizeas" such as silicon,altnninunl, or titanium, Which form nonmetallic inclusions. Additionally, carbon content may be reduced moreeasily at low pressure (because it combines with oxygen to form carbon monoxide and is released in gas Form),resulting in a more ductile steel, Moreover, hydrogen gas causes embrittlcment, low ductility, and blow holes insteel; vacuum treatment more easily removes hydrogen from the steel. I-lence the use ofdcoxidizing processesresults in more efficient process and cleaner steel

1-25

Casting Stage

Once molten steel with the requisite properties has been produced, it is cast into a Rn•m that canenter the rolling process. Continuous (strand) casting is the method primarily used in the United States.In strand casting, the ladle containing molten steel is transferred from the ladle metallurgy station to thecaster and the molten steel is poured at a controlled rate into a tundish, which in turn controls the rate offlow of the molten steel in to the caster's molds. The tundish may have a special design or employelectromagnetic stirring to ensure homogeneity of the steel. The strand caster is designed to producebillets in the desired cross-sectional dimensions, based on the dimensions of the rod and the design of therolling mill. Billets may be charged directly into the rolling mill ("hot-charged") or, depending upon therolling mill's schedule, sent to a storage yard. While in storage, they may be inspected and subjected toone or more conditioning operations (grinding, or turning for example) to ready them for hot rolling.This preparation is more common with cold-heading quality rods intended to be made into fasteners."

Rolling Stage

The wire rod rolling process determines the rod's size (diameter) and dimensional precision,

depth ol'decarbtn'IZation, surface defects and seams, amount of mill scale, structural grain size, and within

limits set by the chemistry, tensile strength and other physical properties. ']'here is little or no difference

among the wire rod rolling mills in the United States, or between U.S. mills and their foreigncompetitors.' A larger billet will produce a heavier coil. Also, usable coil size may be limited by the

capabilities of the wire drawer's equipment and machinery.Modern rod rolling mills consist of five parts: a roughing mill, an intermediate mill, a

pre-finishing mill, a no-twist finishing mill, and a coiler combined with a conveyor cooling bed alongwhich the coiled rod travels prior to being collected, tied, compacted, and readied for shipment. Wire rodmills typically consist of22 to 29 rolling stands and the specialized Stelmor conveyor deck.-,'-' the need foruniform metallurgical properties requires close temperature control accomplished by accelerating orretarding the rod's cooling as it is rolled and conveyed along the Stelmor deck. This is accomplished bywater quench, forced air drafts, or by lowering removable hoods overtop the deck. Metallurgical quality,temperature, and dimensional tolerance usually are inspected in-line,

Exiting the reheat furnace, the billet is initially reduced on the roughing mill (which usuallyconsists of approximately five stands). It then is passed through and successively reduced in size onseveral more stands, termed intermediate rolling. After the last intermediate rolling stand, the rolling millusually splits into dual lines and the product is passed along to a pre-finishing mill which reduces itfurther in diameter. Rod mills often employ a "twist" mill for primary and intermediate rolling, but thefinal rolling is nearly always on a no-twist Morgan vee mill (the rolls in each of approximately five standsare set a 90-degree angles to allow the rod to be rolled without twisting). This produces a nearly uniformnon-oriented grain structure in the steel. Alter exiting the last Imishing stand, the rod is coiled intoconcentric loops and placed on a conveyor which moves the hot wire rod along while it cools.

" The purpose of these surface treatments is to make the steel billet softer and more ductile (annealing): in thecase ol'surface grinding, scam and folds are removed.

"The rolling process, however, can be optimized for various quality levels. The rolling process fur higherquality steel, such as for cold heading quality and other surface sensitive products, must be designed to maximizesurface integrity. This is managed by the number ol'rolling stands used to get to a specilic end diumeter, the designof the reductions taken at each step, and the design ol'the guiding equipment used to keep the steel moving on theproper path through the mill. Nosthearing brief of Ivaco, Answers to Commissioners' Questions. p. 17.

"The Stelmor deck may be optimized for specilir end products. ***. f'osthcaring hriel•ol'l\aco. Ans\vers to

COmmissiOnel's' Questions, p. 17.

1-26

During ro ll ing, the rod is wate r-cooled as it travels along the Slel mor deck ; cooling practices arevaried depending o i l the designated end use of the rod and th e Cu Stol1l e f'S pl•elCrellCCS. The speed atwhi ch the rod is cooled a ffects the consistency and formation of Its mCtaIIt11•LjCaI Stl•IICIUI•e (gralll StRICtllre

and physical properties such as tensile strength). It also affects scale buildup, which determines yieldlosses at the wire drawer. The cooling rate may be varied through the use of renlovable covers (insulatinghoods which may be independently raised or lowered) over the deck or blown-air cooling, or acombination of the two, or through varying the speed of the roller table. The end user often specifies thecooling practice of tile rod purchased.

At the end of the cooling deck, workers crop the ends of each rod to remove the part of the rodwhich may be of lower quality due to uneven temperature control; the cropped ends are also used fortesting and inspection. The rod is then collected onto a carrier, transferred to a "c" hook, com patted, tied,and readied for shipment, or for further finishing or in-house fabrication. Figure 1-1 illustrates the reheatthrough cooling stages of the wire rod production process.

Figure 1-1Wire rod : Reheat and rolling process

Reheat furnace

Roughing stand

Finishing stands

Stelmor cooling deck

h/iwvwv.steel-n.comlesales/gen4ral/uslcao /wire rod/. accessed March 10, 2008Source: POSCO Web site, tal

Domestic producers manufacture various types of wire rod on essentially the same equipment, inthe same facilities, and with the same production personnel. While changes to production processes arelimited, changes in chemical composition, alloying elements and other raw materials, stand fittings, andcooling speed determine the quality of the wire rod produced. The basic equipment, machinery,facilities, and production personnel, however, remain, the same for the production of industrial quality,tire cord quality, welding quality, and cold heading quality wire rod. Company-specific inl'ormationcompiled in response to Commission questionnaires concerning several types 01'\A/ire rod productsproduced in the United States are presented in section 111.

1-27

Exhibit GEN-4

Harmonized Tariff Schedule of the United States (2014)Annotated for Statistical Reporting Purposes

XV72-18

Heading/ Slat Unit Rates of Duly

Subheading Suf- Article Description of

fix Quantity General Special

7213 Bars an rods, hot-rolled, in irregularly wound coils, o ironor nonalloy steel:

7213.10.00 00 Concrete reinforcing bars and rods ................. kg....... Free 20%

7213.20.00 Other, of free-cutting steel ....................... ......... Free 5.5%10 Containing by weight 0.1% or more of lead........ kg80 Other ..................................... kg

Other:7213.91 Of circular cross section measuring less than

14 mm in diameter:7213.91.30 Not tempered, not treated and not partly

manufactured ........................... ......... Free 5.5%11 Tire cord-quality steel wire rod as

defined in statistical note 4 of this chapter.. kg

15 Of Cold Heading Quality (CHQ) steel, asdefined in statistical note 5 to this chapter.. kg

20 Of welding quality wire rods as defined instatistical note 6 to this chapter . , ..... , .. kg

93 Other ............................... kg

Other:7213.91.45 00 Containing by weight 0.6 percent or more

of carbon ............................ kg....... Free 5.5%

7213.91.60 00 Other ............................... kg....... Free 6%

7213.99.00 Other ... ................................. . ...... .. Free 5.5%Of circular cross section:

30 With a diameter of 14 mm or rnore but lossthan 19 mm..... ... kg

60 With a diameter of 19 rnm or rnore........ . kg90 Other ....... ......................... kg


XV72.36

beading/ Stat Unit Rates of Duty

Subheading Suf- Article Description offix Quantity General Spodal

7227 Bars and rods, hot rolled, in irregularly wound coils, ofother alloy steel:

7227.10.00 00 Of high-speed steel ............................. kg....... Free 14%

7227.20.00 Of silico-manganese steel ........................ ......... Free 10%

30 Of welding quality wire rods as defined instatistical note 6 to this chapter ................ kg

80 Other ..................................... kg

7227.90 Other:Of tool steel (other than high-speed steel):

7227.90.10 Not tempered, not treated, and not partlymanufactured ........................... ......... Free 12%

30 Of ball-bearing steel ................... kg60 Other ............................... kg

7227.90.20 Other .................................. ......... Froe 11%30 Of ball-bearing steel ................... kg60 Other ............................... kg

7227.90.60 Other ..................................... ......... Free 10%

05 Of high-nickel alloy steel ................... kg

10 Of Cold Heading Quality (CHQ) steel, asdefined in statistical note 5 to this chapter..... kg

20 Of welding quality wire rods as defined instatistical note 6 to this chapter .............. kg

Of a circular cross section:30 With a diameter of less than 14 mm....... kg35 With a diametor of 14 mm or more but less

than 19 rnrn .......................... kg40 With a diameter of 19 mm or more........ kg

90 Other. . ................................ kg

7228 Other bars and rods of other alloy steel; angles, shapesand sections, of other alloy steel; hollow drill bars and rods,of alloy or non-alloy steel:

7228.10.00 Bars and rods, of high-speed steel .................. ......... Free 32%10 Not cold-formed ............................. kg

Cold-formed:30 With a maximum cross-sectional dimension of

less than 18 mm ......................... kg

60 With a maximum cross-sectional dimension of18 mm or more .......................... kg

7228.20 Bars and rods, of silico-manganose steel:7228.20.10 00 Not cold-formed .......... .................. kg....... Free 28%

7228.20.50 00 Cold-formed.. .............................. kg....... Free 28%


XV72-18

Heading/ Stal Unit Rates of DutySubheading Suf- Article Description of 1 2


7213 Bars and rods, hot-rolled, in irregularly wound coils, of ironor nonalloy steel:

7213.10.00 00 Concrete reinforcing bars and rods ................. kg....... Free 20%

721120.00 Other, of free-cutting steel ....................... ......... Free 5.5%10 Containing by weight 0.1 % or more of lead........ kg80 Other .................................... kg

Other:7213.91 Of circular cross section measuring less than

14 mm in diameter:7213.91.30 Not tempered, not treated and not partly

manufactured........................... ......... Free 5.5%11 Tire cord-quality steel wire rod as

defined in statistical note 4 of this chapter. , kg

15 Of Cold Heading Quality (CHQ) steel, asdefined in statistical note 5 to this chapter.. kg

20 Of welding quality wire rods as defined instatistical note 6 to this chapter .......... kg

93 Other .............................. kg

Other:7213.91.45 00 Containing by weight 0.6 percent or more

of carbon.. .......................... kg....... Free 5.5%

7213.91.60 00 Other .............................. kg....... Free 6%

7213.99.00 Other .................................... ......... Free 5.5%Of circular cross section:

30 With a diameter of 14 mm or more but lessthan 19 mm .......................... kg

60 With a diameter of 19 mm or more........ kg90 Other . ................................ kg


XV72-36

Heading/ Stat Unit Rates of Duty

Subheading Suf- Article Description of 1 2


7227 Bars and rods, hot-rolled, in irregularly wound coils, ofother alloy steel:

7227.10.00 00 Of high-speed steel ............................. kg....... Free 14%

7227.20.00 Of silico- manganese steel ........................ ......... Free 10%

30 Of welding quality wire rods as defined instatistical note 6 to this chapter ................ kg

80 Other . ................................... kg

7227.90 Other:Of tool steel (other than high-speed steel):

7227.90.10 Not tempered, not treated, and not partlymanufactured ........................... ......... Free 12%

30 Of ball-bearing steel ................... kg60 Other . ............................. kg

7227.90.20 Other ................................. ......... Free 11%30 Of ball-bearing steel ................... kg60 Other. ............................. kg

7227.90.60 Other . ................................... ......... Free 10%

05 Of high-nickel alloy steel ................... kg

10 Of Cold Heading Quality (CHQ) steel, asdefined in statistical note 5 to this chapter..... kg

20 Of welding quality wire rods as defined instatistical note 6 to this chapter ............. kg

85 Other . ................................ kg

7228 Other bars and rods of other alloy steel; angles , shapesand sections, of other alloy steel; hollow drill bars and rods,of alloy or non-alloy steel:

7228.10.00 Bars and rods, of high-speed steel ................. ......... Free 32%10 Not cold-formed ............ . ............... kg

Cold-formed:30 With a maximum cross-sectional dimension of

less than 18 mm ......................... kg

60 With a maximum cross-sectional dimension of18 mm or more .......................... kg

7228.20 Bars and rods, of silico -manganese steel:7228.20.10 00 Not cold-formed ............................ kg....... Free 28%

7228.20.50 00 Cold-formed ............................... kg....... Free 28%

Exhibit GEN-5

EXHIBIT GEN-5

LIST OF FOREIGN PRODUCERSIEXPORTERS OFCASWR FROM CHINA

FOREIGN^ _ PROD UC:ER/[?\PORI'ElZAnshan Iron & Steel Group Corp.

2WIM :SS

1 Huangang RoadTiexi DistrictAnshan, Liaoning Province, 114021ChinaEmail: [email protected]: +86 412 672 3090Fax: +86 412 672 3080Website: http://www.ansteelgroup.com

Anyang Iron & Steel Group Co., Ltd(AISCO) (Angang GroupInternational)

Baoshan Iron & Steel Co., Ltd(Baosteel Group Corp.) ( includesGuangdong Shaoguan Iron & SteelCo., Ltd.)

Baotou Iron and Steel (Group) Co.,Ltd

Meiyuan VillageYindu DistrictAnyang, Henan, 455004ChinaEmail: [email protected]: +86 372 312 0114Fax: +86 372 393 1892Website: http://www.angang.com.cnBaosteel Administrative CenterNo. 885 Fujin RoadBaoshan District, Shanghai, 201900ChinaEmail: customer rx,baosteel.comTel: +86 21 26647000Fax: +86 21 26648888Website: http://www.baosteel.com/plc e/index.aspHexi Industrial ParkKun DistrictBaotou City, Inner Mongolia, 14010ChinaEmail: infogbtsteel.comTel: +86 472 218 9000Fax: +86 472 218 3708Website: http://www.btsteel.com

I

Beijing Jianlong Heavy Industry Building 50, Block 12, Advanced Business Park, No. 188Group Co., Ltd. West Road,South Ring 4,

Fengtai District,Bejing, 100070ChinaTel: +86 010 83627444Fax: +86 010 83607005Website:http://en.eiianlong.com/ilWeb/index.do?actionfên^lish

Beitai Iron & Steel Group Co., Ltd No. 36 Huanshan Road(a.k.a Beigang Group) (includes Mingshan DistrictBenxi-Beiying Iron & Steel Group Benxi, Liaoning, 117022Co.) China

Email: beitaigchinabeitai.comTel: +86 41 4486 8855Fax: +86 41 4484 3613Website: http://www.bxsteel.com/btsteel/index.htm

Chongqing Iron and Steel (Group) Chengdu Babao Street No. 88Co., Ltd. Guoxin Plaza, 16 floor E block

SichuanChinaTel: +86 028 86277458, +86 028-86277468,+86 028 86277478Fax: +86 028 86267458http://www.cqgtjt.com

Fugang Group Pan Jia Zhuang Industrial Zone, Jiu Guan Town,Huzhou City, Zhejiang, 313011ChinaEmail: infogf isteels.comTel: +86 572 3511711Fax: +86 572 3511715Website: www.fusteels.com

Guangxi Liuzhou Iron and Steel North Bird Road 117(Group) Company Liuzhou, Guangxi, 545002

ChinaWesbite: http://www.liuzhousteel.com/

Guofeng Iron and Steel Wesbite:http://ww-w.gfgt.com/defaultl.g.^px

Handan Iron & Steel Group Co., Ltd. Fuxing Road 232Handan, HebeiChinaEmail: [email protected]: +86 310 6072141Wesbite: http://www.hgit.com.cn/en/index.aspx

Hangzhou Iron & Steel Group Wesbite: http://en.hzsteel.com/web/index.aspCompany

2

Hebei Iron & Steel Group Co., Ltd No.40 Yuhua West Road(includes Jin Ding Heavy Industry Shijiazhuang, Hebei, 050000Co., Ltd.) China

Email: infoghebgtit.com, hbgtjdzg_(iD163.comTel: +86 311 6677 8886Fax: +86 311 66778662Website: http://www.hebgft.com

Hebei Xinjin Iron and Steel Co., Ltd Tongan North Road(includes Xuanhua Iron & Steel Wu'an City, Hebei Province, 56300Group and Tang Steel) China

Email: [email protected]: +86 310 5630685, +86 310 5688556, +86 3105630686Fax: +86 310 5630661Website: http://www.xiniinsteel.com

Henan Jiyuan Iron & Steel Group Tiantan DistrictCo., Ltd Jiyuan, Henan, 454650

ChinaEmail: [email protected]: +86 391 6688 172, +86 391 6695 008Fax: +86 3916695008Website: http://www.haig.com

Hunan Valin Xiangtan Iron & Steel Gangcheng RoadCo., Ltd (XISC) (subsidiary of Yuetang DistrictHunan Valin Iron & Steel Group Xiangtan City, Hunan Province, 411101Co., Ltd.) China

Tel: +86 731 5865 2516, +86 731 58659077Fax: +86 731 58659075, + 86 731 58663053Website: http://www.hnxg.com.cn

Jiangsu Shagang Group Co., Ltd Jin fengZhangjiagang City, Jiangsu Province, 215625ChinaTel: +86 512 5856 8872, +86 512 58568873Fax: +86 512 5855 1627Website: http://www.sha-steel.coM/sg

Jiangsu Yonggang Iron & Steel YongLian Industrial parkGroup Co., Ltd Nanfeng Town

Zhangjiagang City, Jiangsu Province, 215628ChinaEmail: [email protected]: +86 512 58612888Fax: +86 512 58612528Website: http://www.yong-gang.com

Jiangxi PXSteel Industrial Co., Ltd. Email: wlzx(a)pxsteel.comWebsite: http://www.pxsteel.com/

3

Jinxi Group East Third Ring Road No. 9, Building 2901, Room 3Chaoyang District, BeijingChinaWesbite: http://hbjx.com.cn

Jiuquan Iron & Steel (Group) Co., No. 12 Xiongguan East RoadLtd (JISCO) (includes Yugang East Xiongguan(Yuzhong Iron & Steel)) Jiayuguan City, Gansu, 735100

ChinaEmail: hon aigiiugan .comTel: +86 937 671 141 1Fax: +86 937 671 141 1Website: http://www.jiggang.com

Kuming Iron & Steel Holding Co., Anning City, Yunnan Province, 650302Ltd. (KISC) China

Email: lzy7245gynk .comTel: 86-871-68607457Fax: 86-871-68606802Website: http://Ynkg.com/web/guest/home

Laiwu Iron and Steel Group. Co., House before Gangcheng Avenue 99Ltd. Laiwu City, Shandong Province, 271104

ChinaWebsite: http://www.laigang.com/index.asp

Ling Yuan Iron and Steel Group Co., Steel Road, No. 3Ltd. Lingyuan City, Liaoning Province

ChinaWesbite: http://lgit.com.cn/LoginDispAction.do

Maanshan Iron & Steel Co., Ltd No. 8 Jiuhuahuaxi RoadMaanshan City, Anhui Province, 243003ChinaTel: +86 555 288 3492Fax: +86 555 288 4350Website: http://www.masteel.com.cn

Nanjing Iron and Steel United Co., Wesbite:Ltd. http://www.nisteel.com.cn/portal/welcome/index.*spPingxiang Iron & Steel Co., Ltd Room 1219 No. 669 Lvyin Road

Honggutan New AreaNanchang City, Jiangxi Province, 330022ChinaEmail: wlzxgpxsteel.comTel: +86 791 675 3021Website: http://www.,oxsteel.com

4

Qingdao Iron & Steel Group Co. 5 Zunyi Road(Qinggang) Qingdao, Shandong Province, 266043

ChinaEmail: steelgpublic.gd.sd.cnTel: +86 532 8481 6761Fax: +86 532 8481 6057Website: http://www.qdsteel.com

Rizhao Steel Group (owned by No. 600 Yanhai RoadShandong, and owns/operates Rizhao, Shandong, 276806Minmetals Yingkou Medium Plate ChinaCo.) Email: service(,rizhaosteel.com

Tel: +86 633 6188 060Fax: +86 633 6180000Website: http://www.rizhaosteel.com

Shaanxi Longmen Iron & Steel Longmen Town(Group) Co., Ltd (includes Hancheng City, Shaanxi Province, 715405Hangzhong Iron and Steel) China

Tel: +86 913 518 2222, +86 913 518 2333, +86 913 5182300Fax: +86 913 5182345Website: http://www.lm-steel.com

Shandong Iron and Steel Group Co., 21 Gongyebeilu RoadLtd. Jinan, Shandong, 31200

ChinaTel: +86 531889 82126Email: [email protected]: http://www.iigang.com.cn,htt-p://www.sdsteel.cc

Shanxi Zhongyang Iron and Steel Zhongyang, BeijiaoquCo., Ltd. Shanxi Province

ChinaTel: +86 358 5033489Fax: +86 358 5033489Website: http://www.sxagc.com.cn

Shougang Changzhi Iron & Steel Ltd Changzhi, Shanxi, 47100(includes Shougang Qian'an) China

Email: cgwebechanggang comTel: +86 355 508 6633Website: http://www.changgang.com

Shougang Group Shinjingshan RoadShingjingshan District, Beijing, 100041ChinaEmail: bbtgmail.shougang.com.cnTel: +86 88291114Website: http://www.shougang.com.cn

5

Shougang Tonggang Group Tonghua Iron and Steel International Building, No. 3218Yatai Avenue BChangchun, Jilin Province, 130022ChinaWesbite: http://www.jllg.com.cn/

Tangshan Iron and Steel Group No. 9 Riverside RoadCompany Limited Tangshan City, Hebei Province, 063016

ChinaWebsite: http://www.tangsteel.com.cn/indexl.isp

Tempo International Industry Co., Shenzhen Road, Laoshan District,Ltd. Qingdao Shandong

ChinaTel: +86 0532 8887 6338Website: www.temposteel.com

Tianjin Iron & Steel Group Co., Ltd 398 Jingtang RoadDongli District, Tianjin, 300301ChinaTel: +86 22 2470 6800Fax: +86 22 2470 6820Website: http://www.tgsteel.com

Tianjin Rockcheck Steel Group Co., Metallurgical Industry AreaLtd. Gegu Town

Jiannan District, TianjinChinaEmail: newsgrockcheck.comTel: +8122-58663680Website: http://www.rockcheck.com

Tianjin Tiantie Metallurgical Group ShexianHebei Province, 056404ChinaEmail: [email protected]: +86 310 397 0114Website: http://www.tiantie.com

Tianjin Tiantie Zhaer Steel Yangdi Opposite, North of Yinhe BridgeProduction Co., Ltd. Beichen District, Tianjin

ChinaEmail: zhaowg962g126.com, zhaowg962gyahoo.comTel: +86 135 02183107Fax: +86 222 6418488Wesbite: http://titiantiesteel.com/main.aspx

6

Tonghua Steel Group Block B No. 3218 Yatai StreetTong Gang International BuildingChangchun, Jilin Province, 130022ChinaEmail: iltg_gjltg.com.cnTel: +86 431 88623000Fax: +86 431 88623888Website: http://www.iltg.com.cn

Weifang Special Steel Group Co., East of Weifang RoadLtd Steel Industrial Zone

Weifeng City, 261201ChinaEmail: [email protected]: +86 536 767 1810Fax: +86 536 767 1810Website: http://www.weifangsteel.com

Wuhan Iron & Steel Co., Ltd. No. 3 Yangang Road(Wuhan Iron & Steel (Group) Corp.) Qingshan District(WISCO) Wuhan City, Hubei Province, 430083

ChinaTel: +86 27 8680 7870, +86 8680 7873Fax: +86 27 8680 7875Website: http://www.wisco.com.en

Wuanshi Yuhua Steel Co., Ltd North Chongyisi StreetWuanshi, Hebei Province, 56300ChinaTel: +86 310 575 2581Fax: +86 310 573 9689Website: http://www.vuhuasteel.com

Xilin Iron & Steel Group Xilin DistrictYichun City, Heilongjiang Province, 153025ChinaEmail: xlgtitgl26.comTel: +86 458 378 8334Fax: +86 458 3716007Website: http://www.xlsteel.com.cn

Xingtai Iron & Steel Co., Ltd 262 Gangtie Nan StreetXingtai City, Hebei, 54027ChinaEmail: [email protected]: +86 3 19 204 2022, +86 319 204 2183Fax: +86 319 262 4517Website: http://www.xtsteel.com

7

Xinyu Iron & Steel Co., Ltd Yanjin RoadXinyu City, Jiangxi Province, 338001ChinaEmail: xgxxygxinsteel.com.cnTel: +86 790 629 0782Website: http://www.xinsteel.com.cn

8

Exhibit GEN-6

U.S. Imports of Carbon and Alloy Steel Wire RodAnnual 2011-2013"

Quantity in Short Tons , Value in U.S. Dollars, AUV in $/ton

Quantity

2011 2012 2013

China 144 241,938 614,402

All Others 1,253,534 1,276,956 1,100,260

Total 1 , 253,678 1 , 518,894 1,714,662

Value

2011 2012 2013

ChinaAll Others

143,155

1,076,369,396

137,591,869

1,044,946,658

311,399,286

838,367,731Total 1,076 , 512,551 1 , 182,538 , 527 1,149,767,017

AUV

China

All Others

994.13

858.67

568.71

818.31

506.83

761.97

Total 858 . 68 778.55 670.55

Source : U.S. Department of Commerce*2013 represents annualized January-November 2013 actual data.

Prepared by Georgetown Economic Services

Exhibit GIN-7

EXHIBIT GEN-7

U.S. IMPORTERS OF CASWR FROM CHINA

1. C&F International16510 Northchase Dr.Houston, TX 77060

6. Macsteel International USA Corp.801 Twelve Oaks Center Drive,Suite 806

Tel: 281-999-9995 Wayzata, MN 55391Fax: 281-999-4143 Tel: 952-249-1542Email: no email address foundWebsite: www.ferrostaal.com

Fax: 952-249-0837Email: tkgmit r.comWebsite:

2. Commercial Metals Company http://macsteelintemational.com(Cometals)6565 N. MacArthur Blvd., Suite 800Irving, TX 75039

7. Stemcor USA Inc.350 Fifth Avenue, Suite 1526

Tel: 214-689-4300 New York, NY 10118Fax: 214-689-5886 Tel: 212-563-0262Email: no email address foundWebsite: www.commercialmetals.com

Fax: 212-563-0403Email: newyork&stemcor.comWebsite: www.stemeor.co.uk

3. G3 Steel Group, LLC1633 Kirkton DriveTroy, MI 48083

8. Tata Steel International Americas475 North Martingdale Road, Suite 400

Tel: 248-524-0192 Schaumburg, IL 60173Fax: 248-524-0406 Tel: 847-619-0400 or 800-542-6244Email: no email address foundWebsite: no website found

Fax: 847-619-0468 or 207-975-8499Email: TSIA(cr^,tatasteel.comWebsite:

e

4. King Steel Corporation hftp://www.tatasteelamericas.com/en/5225 E. Crook RoadGrand Blanc, MI 48439 9. Insteel Wire Products CompanyTel: 810-953-7637 1373 Boggs DriveFax: 810-953-1718 Mount Airy, NC 27030Email: [email protected], Tel: 336-786-2141dscribnerkkingsteelcorp.com Fax: 336-786-2144Website: www.kingsteelcop2.com Email: hwoltzginsteel.com

Website: www.insteel.com5. Kurt Orban Partners LLC

111 Anza Blvd., Suite 350Burlingame , CA 94010Tel: 650-579-3959Fax: 650-579-3965Email: markna,kurtorbanpartners.comWebsite: www.kurtorbanpartners.com

1

EXHIBIT GEN-7


10. Duferco Steel Inc.101 Matawan Road, Suite 400Matawan, NJ 07747Tel: 732-566-3130Fax: 732-583-9406Email: duferco(,duferconj.com,duferco@dufercosteel. comWebsite: www.duferco.com

11. Hanwa American Corp.18100 Von Karman, Suite 320Irvine, CA 92612Tel: 949-955-2780Fax: 949-955-2785Email: no email address foundWebsite: www.hanwa.co.ip

15. Baosteel America Inc.85 Chestnutridge RoadMontvale, NJ 07645Tel: 201-307-3555Fax: 201-307-3358Email: [email protected]: www.baosteelusa.com

16. Bekaert Corp.1395 South Marietta Parkway,Building 700, Suite 708,Marietta, Georgia 30067Tel: 770-421-8520Fax: 770-421-8521Email: no email address foundWebsite: www.bekaert.com/en.aspx

12. Metals Solutions LLC31105 Bainbridge Road, Building 4Solon, OH 44139Tel: 440-349-9304Fax: 440-349-9305Email: [email protected]: www.metals-solutions.com

13. Precision Metal Services, Inc.418 Stump RoadMontgomeryville, PA 18936Tel: 215-661-0225Fax: 215-661-0366Email:pms ,precisionmetalservices.comWebsite:www.precisiomnetalservices.com

14. Uniwire International Ltd.509 Madison Ave., Suite 902New York, NY 10022Tel: 212-688-1565Fax: 212-688-2311Email: [email protected]: www.uniwireintemational.com

17. Alliance Wire and Steel, Inc.9500 West Commerce StreetSan Antonio, TXTel: 210-892-0472Fax: 210-892-0477Email: no email address foundWebsite: www.alliance-wire.com

18. Metal One America, Inc.6250 N. River Road, Suite 20155Rosemont, IL 60018Tel: 847-685-5446Fax : 847-685-5430/5440Email: darek.kusnierewiczgmtlo.comWebsite: www.metaloneamerica.com

19. United Springs, Inc.6455 Canning StreetCommerce, CA 90040Tel: 323-728-8188Fax: 323-728-8777Email: [email protected]: http://unitedspringsinc.com

2

EXHIBIT GEN-7


20. M&H Metal InternationalPackard Place, Suite 100222 South Church StreetCharlotte, NC 28202Tel: 864-230-4114Fax: 864-653-5598Email: sales&mandhllc.comWebsite:http://haltman.wix.com/mandhllc

21. Stena Metal Inc.1 Landmark Square, Suite 720Stamford, CT 06901Tel: 203-357-0111Fax: 203-964-8443Email: matt.sie eg lkstenametal.comWebsite: htti):Hstenametaline.com/

22. ThyssenKrupp Steel Services22355 West Eleven Mile RoadSouthfield, MI 48034Tel: 248-233-5600Fax: 248-233-5699Email: no email address foundWebsite: www.tkmna.com

3

Exhibit INJ- 1

A

Monthly U.S. Imports of CASWR from China(quantity in short tons)

Quantity

Dec-12 Jan -13 Feb-13 Mar-13 Apr-13 May-13China

All Others53,40169,307

54,185

81,79719,457

84,66036,572

83,80823,446

103,45469,413

137,654Total 122,708 135,981 104,117 120,379 126,900 207,068

Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13China

All Others66,14577,219

81,892

109,57525,502

85,77881,83982,570

62,226

84,87042,524

77,189Total 143,364 191,467 111,280 164,409 147,096 119,713

Source: U.S. Department of Commerce, IM146 Report

12 Month Total

616,603

1,077,8791,694,482


Exhibit INJ-2

RANGED DATACASWR VOLUMES AND MARKET SHARES

Annual 2011 - 2013

2011 2012 2013*

Import Volume (in short tons)China 144 241,938 614,402All Others 1,253,534 1,276,956 1,092,673

Total 1,253,678 1,518,894 1,714,662

U.S. Shipments [Apparent Domestic Consumption [ 4,gOt^,000^

Market Share of:Imports from China [ 0Imports from All Others [U.S. producers [

Source: U.S. Department of Commerce and actual shipment data by [ S0%XCe,

* Import data are actual import statistics from Department of Commerce, Census Bureau, IM146, for2011, 2012 and January-November 2013 (annualized to estimate full year 2013 imports).

PUBLIC VERSION


Exhibit INJ-3

PUBLIC VERSION NOT OTHERWISE SUSCEPTIBLE TO SUMMARY

CASWR LOST SALES

Customer name and contact information AddressDetailed Product

DescriptionDate of Quote

Quantity(shorttons)

$ per tonPrice)

($ P

Countryof Origin

Importprice

($ per ton)

Page 1

Exhibit INJ-4

RANGED DATA PUBLIC VERSION

U.S. CASWR Producers' Trade and Financial DataAnnual 2011-2013

(Quantity in short tons, Value in $1,000 , Average Unit Values ("AUV") in $/short tons)

Trade Data:CapacityProductionCapacity UtilizationU.S. Shipments (Q)U.S. Shipments (V)U.S. Shipments (AUV)Production and Related Workers

2011 2012

[ S,o^,DOo

[

[ t Soo t soo

% Change

2013 2011-2013

14CO

Financial Data:Net Sales MOperating Income

Operating Income to Net Sales Ratio

Source: Capacity, production, shipments, employment, net sales, and operating income data represent actual data reported byAMUSA, Charter, Evraz, Gerdau, Keystone, and Nucor to Georgetown Economic Services. These data were compiled and aggregated

by Georgetown Economic Services.

DECLARATION OF GINA BECK

I, Gina Beck , do hereby declare and state that:

1. I am Senior Economist with Georgetown Economic Services ("GES"). I have

worked for GES for 18 years.

2. I received actual capacity , production, shipment, employment, net sales, and

operating income data from petitioners , AMUSA, Charter, Evraz, Gerdau , Keystone, and Nucor.

I reviewed the data, and they are accurate to the best of my knowledge . I compiled and

aggregated these data for purposes of this petition.

January 29, 2014

Exhibit INJ-5

China Wire Rod price, China Wire Rod Daily prices provided by SunSirs, China Commo... Page 1 of 2

SunSirs--China Commodity Data Group

Horne

M

Bulk Commodity Index Spot Pricey

Global Language: UK DE 6 JP e, KR

China Wire Rod Price

:3464

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2013-10-16 - 2014-01-14

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10116 10/25 11/03 11/12 11/21 11/30 12/09 12/18 12/27 01'05

Commodity Sectors Price Date

Wire Rod Steel 3343.00 2014-01-13

Wire Rod Steel 3345.00 2014-01-12

Wire Rod Steel 3345.00 2014-01-11

Wire Rod Steel 3345.00 2014-01-10

Wire Rod Steel 3352.00 2014-01-09

Wire Rod Steel 3361.00 2014-01-08

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Links Bloomberg - Reuters - Xinhua News Agency - China News Service(CNS) - CCTV-2- 21 cbh- cnsb

Vertical Websites China Exporters - ChinaChemical - Chemindex - PharmNet- China Medical Device.. TexNet- Chil

Market Place Toocle Global- 1'oocle China-'Toocle Japan- 1"oocle Korea- Toocle Russia- ToorlC Vietnam

littp://www.suiisirs.com/ul(/pi-odetail-740.html 1/13/2014

Chinese wire rod export price moves down (30/09/2013)

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power plant in Viownin

(26/12/20131

BEIJING, 30 Sep 13 - The export price of wire rod in China is ona downward trend at present with that of SABI008 06.5-1 Onus (boronadded) at USD525-545/t FOB main ports in North China. Observers

'redict that the price will go down slightly in coming days of thisweek,

A wire rod exporter in Tangshan, Heibei Province said that thelast offer for SAE1008 06.5-10ntm (boron added) last Friday wasUSD525A FOB Tianjin Port, down by USDIOA compared with that ofwo weeks ago, and he thought the price is likely to go down further

phis week,

"The domestic market gets worse and the price keeps goingdown, so exporters have to lower offers," said the source. The price of wire rod HPB235 06.5-iOntni fromAujiang Steel in Tangshan has decreased by RMB180/t since early September, and the current. price isRMB3,240-3,260/t (VAT included). Therefore, exporters have nothing to do but reduce offers. Considering thedim domestic market and the downward price trend, the source deemed that the export price will move downagain this week.

Another wire rod exporter in Tangshan said the current quotation for SAE1008 06.5-1 Onun (boron added)front Tangshan Steel is USD528A FOB Tianjin Port, down by USD17/t compared with that of early September.

The source mainly deals with products from Tangshan Steel, and the milt kept its export offer as high asUSD545/t FOB Tianjin Port last month, but domestic market price went down greatly recently, so the still cutthe price to a normal level. Meanwhile, seeing the downward price trend, more overseas buyers prefer to watchthe market and wait for a further price decline, and few of them place orders now. The source said he only tooksmall orders of no more than 1,000t this month, white the regular monthly sales volume is 2,000-3,000t.

Asian Metal

y jPnnl --Zama to trend QlFceul;ock .`Hooitmar

Other hews

HRC prices to rise In Vietnam in January (13/01/2014)

- Chinese flats suppliers forecast market rebound in January'"` (1310112014)

Vietnam's PVN signs contract to construct power plant (0210112014)

Vietnam successful at controlling inflation, increasing exports in 2013 (25!12/2013)

South Korean stainless scrap import price increases (2511212013)

Mitsubishi Corporation to build 1,200 MW thermal power plant in Vietnam (25/1212013)

Vietnam users ask PM to scrap plan for anti-dumping lax on sto[el (2411212013)

Border trade needs nurturing' officials (24/12J2013)

USA's Peabody Energy to eslablish jout venture with Chine's Shenhua Group (2411212013)

China's Benxi Iron & Steel maintains offers of January-produced flats (24/12/2013)

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Chinese wire rod export price moves down (30/09/2013)

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R'r ;ell' !: Ltf-r%i (.01,11 •.C, I' kh, j (- CAT^+L [7(ar(' I'I'i.,F. Ci74<F•l.,cTP D ; Ri).il'.C' 1'S FICO HI If1.DING MAI EHIAL', I RAIIING COMPANYI51h I I.. Sadin.v, l oil r. I I IA Pnslum Str

14ull U^hC 143rd. DI.,l. 1, 111, MC, Vwimilrr.

Tc1'. (84.8) ;8 212 960Pax: (8%4.3) .18 217 104 -.18 2 42 140

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I id0lradet^'licuhc'u'nodupnl.(nm

http://www.iicotradiiig.com.vii/en-us/zone/175/news/1623-chinese-wire-rod-export-price-.., 1/13/2014

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C E - Catalogue T; .e completed projects 92 Tim g Vie} PP,, ^ iis3,

S ouga.ncg. Qian'an to star1 up 5 000 nitly stir€re rod milli (23'1012013)

Shougang Qian'an Iron & Steel (Qiangang), a subsidiary ofShougang Group in northern China's Hebei province, plans tobring on stream a. wire rod mill at the end of November. Themill is the relocated No. i wire rod mill from Shougang's oldsite in Beijing 's Changping district.

The mill, with a capacity of about 500,000 metrictons` /vear, had been sourcing billets from Qiangang after

Products

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'GH-1 ED NEWS

Shougang closed its major steel making operation in Beijing sShijingshan district at end-2010, according to a source withQiangang. This line, Shougang's last longs product mill inBeijing, was shut down in March of this year for relocating to

iangang in order to save billet transport and re-heating costs.

A company source with Shougang said the mill previously produced mainly low carbon wire rod forconstruction uses, medium carbon wire rod for processing and welding rod, and wire rod for tyre cord. After therelocation, the product mix Avould be essentially the same as before, he added.

It will be the first rod mill installed at Qiangang, which predominantly produces hot rolled coils and siliconsheets. The plant currently boasts a crude steel making capacity of about 8 million mt/y.

Li FuSource: steelbb.com

,;;r I.. ICS, ^.. ... ... _.... ..,aa ck .............

HRC prces to rise in Vietnam in January "° "13i"01 12014)

Chinese "Pats suppliers forecast rnarket rebound ir, January - (13101/2014)

Vietnam's PVN signs contract tc construct po er Nlant (0210112014)

Vietnam successful at controll:rg in fla tion, mcreas ng exports in 2013 (25/12,2013)

South Korean stainless scrap i:npor price P-reases (25!12/2013)

http:i'â,^\N.iicot.radin`.com.viVen-us/zone/175/news/1810-shouQano-gianan-to-start-up-500000-mty-wire-rod-mill-2S102013.aspx 1/14/2014

KOBELE

Press Releases

a

The information on this Web site is presented "as is." Product availability, organization, and other content may differ from

the time the mfCrmation was origina!ly posted. Changes may take place without notice.

Kobe feel's wire rod resIi Uca i China starts c

March 14, 2013

TOKYO: March 14, 2013 - Kobe Steel , Ltd. announces that its joint venture , Kobelco SpringWire ( Foshan ) Co.: Ltd. ( or KSIAO , has started operations in China. KSW began production ofsteel wire for high-quality springs in February . After obtaining product approval from itscustomers . KSW will go into commercial production.

KS'Af was established in January 2012 in Foshan , Guangdong Province to produce and sellsteel wi!e for high-quality springs . Capitalized at 1.3 billion yen , the company has a productioncapacity of 600 metric tons per month . KSW is 50% owned by Kobe Steel through subsidiaryKobelco Holding (China) Co.; Ltd.; Kobe Steel 's China headquarters . Shinko Wire Company:Ltd. and Suncall Corporation each have a 25% equity share . The president is Hidenori Sakai.

China. the world ' s largest auto market , produced about 19 million cars in 2012 . Production isforecast to expand considerably over the medium - to long -term future, reaching 28 million carsin 2020.

http_/:`N\»^\N.kohelco. cojp!en lislL'releases/2013;1188212 13522_html 1/13/2014

Consequently , world automakers have been expanding their production bases in China , raisingthe need for the local sourcing of parts . To meet this demand , the world 's major springmanufacturers have been actively adding new production lines and increasing their capacity to

make engine valve springs and other high -quality springs . This, in turn , has increased demandfor high-quality steel wire, the material from which the springs are made.

Kobe Steel has a roughly 50 % share of the world market for steel wire rod. the base material forsteel wire . It has earned high marks from automakers in Japan, the United States and Europefor its wire rod . Booming demand in China le8 Kobe Steel to form KSW, its first overseas

company to process wire rod into wire for use in engine valve springs and other high qualityspring products.

Kobe Steel already has two companies in Thailand , one in the United States , and three inChina that process steel wire rod for suspension springs and CHQ (cold heading quality) wirerod for fasteners . Through KSW , Kobe Steel , along with the equity participation and cooperationof wire rod processors . is strengthening its wire processing base and building a global supplynetwork to supply high-quality special steel products.

Background Information

Profile of Shinko Wire Company; Ltd.

Location: Amagasaki , Hyogo Prefecture, JapanEstablished : march 1954

President : Takanori KominamiCapital: 8,062 million yen

Shareholding : Kobe Steel, Ltd. 30. 71%, treasury shares 11.24%. Shinko Wire clientstock ownership 3.77%, Metal One Corporation 3.35%, Mizuho Bank,

Ltd. 2.57%, other 48.36`/0Employees : About 800 (consolidated)Business : Manufacture and sale of steel wire, wire rope and other products

Profile of Suncall Corporation

L ocation: Kyoto, JapanEstablished : June 1943

http:'/^,\ \N-\v, kobelco.co.jp/en-elishh -eleases!?013/118b212_13522.html I /13/2014

President & C.E.O.: Shigetsugu Yoshida

Capital 4;808 million yenShareholding: Itochu Corporation 24.98%, The Master Trust of Japan; Ltd. (Kobe

Steel, Ltd.) 14.88%; treasury shares 7.08%, The Sumitomo Trust and

Banking, Co., Ltd. 2.94%: Bank of Kyoto, Ltd. 2.26%, other 47.86%0

Employees: About 2,070 (consolidated)Business: Manufacture and sale of automotive parts, electronic and information-

related products, and optical communication devices

Kobelco (China] Holding Co.; Ltd.

Location: Shanghai, China

Established: January 2011

President: Hiroshi Umeda

Capital: USS59.44 million

Shareholding: Kobe Steel, Ltd. 100%

Employees: 22

Business: China headquarters

ReIate'd pageS

U Iron & Steel

Kobe Steel's steel v, ire company in China to increase capital, plans to start up in

February

KOBE STEEL., LTD.O KOBE STEEL, LTD. 1995-2014

lhttp:!/A-'A1k'.kobelco.co.jp%ZnzlisiVreleasesf2013'1188212_13522.htm1 If1 3 /2014

Changzhi Steel to Start Production at New Wire Rod Project in Ja-,.. http://resources.made-in-china,com/article/company-news/umJxr7-,...

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Shanxi Province based Chinese steelmaker Changzhi Iron and Steel Co a subsidiary of Shougang Group, has

started to carry out trial tests at its new high speed wire rod project, as announced by Shougang Group on

December 20.

Construction work on the project started in April of the current year, while production operations are expected to

commence in January 2013 . The designed annual output of high speed wire rod is 1.1 million tonne, with an

estimated annual output value of CNY 7. 5 billion (LSD 1. 2 billion). The wire rod products will be in a diameter

range of 5 . 5 to 25 mm , and will include medium carbon steel, high carbon steel and cold forging steel.

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IBMmyste'I.com

N AMAMA A+%-- an2012- 11-01 14:40 iA)U*#63FY Â%atl

a.

http://gangpi.mysteel.com/12/1101/14/D5BF33F3C39536FA.htm] 1/23/2014

(Translation)

12/2/13 Hebei Xinjin Iron and Steel Co. Ltd. launched its second wire rod production linerecently

Hebei Xinjin Iron and Steel Co. Ltd. launched its second wire rod production line recently

2012-11-01 14:40 Source: Ganglian News

Recently, Hebei Xinjin Iron and Steel Co. Ltd. has launched its second wire rod production line;the two wire rod production lines have designed annual production capacities of 500,000 MT and600,000 MT, respectively. However, due to the recent weak market, neither production linereaches the maximum production capacity.

Source: http ://gangpi .mysteel .com/12/1101/14/D5BF33F3C39536FA.html

Translated by Georgetown Economic Services, LLC

Press Releases - Siemens Global Website

SIEMENS

> I•Iome > Press Industry Sector / Metals Technologies

Siemens wire rod mill boosts capacity for Chinese steelmaker

Page 4 of 6

Linz, Austria , 2012-Sep.19

Carbon product producer Hanzhong Iron & Steel Group Company, Ltd. will expand its capacity with anew wire rod mill supplied by Siemens VAI Metals Technologies.The plant will be in Ding Jun Shan Town, Mian County in Shaanxi Province , China . When commissioned , the mill will produce 600,000 tons per year . Built incollaboration with CISDI Engineering Co., Ltd., the project is expected to start up in early 2013.

Finishing end of a high speed rod outlet from Siemens

For the new wire rod mill of Hanzhong Iron & Steel , Siemens will design and supply a Morgan No-Twist mill, Morgan Rod Reducing /Sizing mill , pinch roll and layinghead . In addition , Siemens VAI is designing shears , the Morgan Stalmor conveyor and the reform area of the new rod mill . The new equipment is designed to reachspeeds of 112 meters per second. The mill will produce 5 mm to 22 mm plain rod.

Hanzllonglf9â Ild Steel is asub dia y of Shaanxi Steel Group . Many of its production lines were damaged by an earthquake in May 2008 . Several local steel millsmerged vnih Hanz ong m 9 to conso i ate the Province 's steelmaking production for the local market . After all restoration projects are complete, the companyexpects to have a steel capacity of more than 10 million tons.

Further Information about solutions for steel works , rolling mills and processing lines Is available at htto://vAvw .sietnens . coin/metals

A photo supplements this press release. Please see: httg://vmw . siemens . con/mt-picture/IMT201209140

The Siemens Industry Sector (Erlangen, Germany ) is the world 's leading supplier of innovative and environmentally friendly products and solutions for industrialcustomers . With end-lo-end automation technology and industrial software, solid vertical -market expertise , and technology-based services , the Sector enhances Itscustomers ' productivity , efficiency , and flexibility . With a global workforce of more than 100,000 employees , the Industry Sector comprises the Divisions IndustryAutomation , Drive Technologies and Customer Services as well as the Business Unit Metals Technologies . For more information , visit I)tto://wwv .slaniens .comfindustrv

The Metals Technologies Business Unit (Linz, Austria ), part or the Siemens Industry Sector , Is one of the world 's leading life cycle partners for the metallurgicalIndustry . The Business Unit offers a comprehensive technology , modernization , product and service portfolio as well as Integrated automation and environmentalsolutions covering the entire lifecycle of plants . For more information , visit htlo :11 w w.siemens .com1metals

Reference Number: IMT201209140e

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Thu 2014/01/23 Eio e S.,at.s i cs q Lai esf` Price q Sui7p?'p&Deaiand i7 Iodaz' s Fobs uaut` us' : O

Min Steel to commission 1,260 cubic ureter blast furnace

Dubie I;ck>01Autoa7 ! i F_ k. promulgator : La^yoSteei issue date : 201i-4-g -4:04:17 read : 116 times j=

It is reported that Heilongjiang Province-based Chinese steelmaker Min Iron and Steel Group 1,260 cubic meter blastfurnace on which construction was completed last year will be commissioned in early April. The designed annual outputcapacity of the blast furnace is 1.02 million tonnes.

Xilin Steel expects its finished steel output capacity to reach 4.50 million tonnes to 5.00 million tonnes in 2012; rising to

5.50 million tonnes to 6.00 million tonnes in 2013. Meanwhile, construction work on phase two of the steelmaker's

technology innovation project, valued at a cost of CNY 800 million will start in the near future.

The phase two project consists of one 1,260 cubic meter blast furnace, one 120 tonnes converter and a high speed wire

rod production line with an annual output capacity of 1 million tonnes. Annual sales revenues from the completed phase

two are expected to reach MY 4.8 billion

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llttp://w-ww.langesteel.com/onews.asp?id=36522 1/23/2014

Addition of New Finishing Mills to Almost Double Production Speed for Chinese Steel Maker

Addition of New Finishing Mills to Almost DoubleProduction Speed for Chinese Steel MakerPublished on October 16, 2011 at 7:58 PM

Chinese steel producer Shanxi Zhongyang Iron and Steel CompanyLtd. (ZICO) contracted with ,`fi'xr L(u ', r ',$gr

add a high-speed mini finishing mill to each of its three rod mills.The new mills will be located in a suburb of Zhongyang County,Shanxi Province, China.

This will almost double the mills' production speed. Commissioning is expected in late 2012.

High-speed mini finishing mill for long-product rolling mills from Siemens VAI Metals Technologies.

After the three finishing mills begin operation, the annual output of each trill will increase to 700.000 tons from 500,000 tons and thus

considerably enhance Z.I SCO's production capacity. Meanwhile. with the three high-sliced mini finishing mills, the company will also

be able to produce small sizes, Willi one, plant producing rod from 6.5 nnni to 10 mill and rebar from 8 nlm to 10 nlm. and in the other

two .ì1111s, rod f1'ol'll 5.5 111111 to 16 rnm and rebar fronn 8 runt to 14 rnm. Speeds are guaranteed at 105 meters poi ,,econd. The scope

of supply front Sionlens VAI also includes guides. The electrical and aulornation package will be supplied by :3ienle:ns L.imiled China,

utilizing the standard Siroll LR solution platform for long. product rolling mills and including the mediurn voltage drive.

A mid-size private company established in 1985, ZISCO is an integrated mining, steel making and power generation company, which

produces carbon grade rod and rebar for the Chinese construction market. It produced 3.6 million tons of steel wire it) 2009.

About Siemens Metals Technologies Business Unit

The Metals Technologies Business Unit (Linz, Austria), part of the Siemens Indusuy Sector, is one of the world's leading suppliers of

plant c:onsnuclion and engincaeling in the iron and slc:Ci industry as well as in the flat rolling sr:gmenl of d1e ahullinunl industry. The

IIUSirless Unit offers I, conlprellen lve product ana "elvice portfolio for metalluryiGal olants and equq;rlwill m" ,wall ai: nlr..glali:cl

awonllMlol, and c:nv!n.n lilealiad '>oIt!lions c: ,vir!n g Ole canine Witcy"Ie of 1)1141111s;

Saved from URL hltp://wvdw.azoln.cominews.aspx?nev;slD=30894

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Company

ngangSteel H

Angang Steei A,Maanshan I&S-H

Maanshan l&S-A

Baosleer-A

Ticker TP Rating

347 HK HK$5.21 4 HOLD `000898 CH : RMB5.80a BUY*

323 HK HK$2.00*, SELL

600808 CH RMB2.604 HOLD

600019 CH RMB6.20 BUY

Where are we Different?d WeInciude both bottom-up and top-down analyse,

on demand forecasts.a We expect very slow demand growth at 2..8°/ YoY.

e Oarearnings forecasts for Angang and MaanshanI&S are significantly below street' s estimates

Key ,Hghlightsof this Report'

Top-down and bottom- up demand analyses.o We see limited margin squeeze forsteel mills in

nearaerm.Iron ore market outlook. ,

Key 'Catalysts /EvetitsSteel prices have dropped to the production, cost.Recent loosening of monetary policy could provideimpetus for steel traders in China, thus driving upthe overall demand.

BOCI Research LimitedMetals & Mining : Iron & Steel

Michelle Leung(852) 3988 [email protected]

Dim demand outlook with ST upsideGiven our expectation that China 's economy will inevitably enter anera of slow growth in 2012 with prolonged tightening policies on theproperty market, the steel industry can hardly remain immune. Wemaintain our NEUTRAL rating on the sector as we see opportunitiesfor steel price rebounds In the near term due to : ( i) steel priceshaving dropped to the production cost level; ( ii) the gradualresumption of construction projects post -Chinese New Year (CNY);and (iii) the recent loosening of monetary policy , which is providingimpetus for steel traders in China and thus driving up overall steeldemand . Angang remains our preferred stock for H shares and wesee Baosteel as our top pick for A shares.

Expecting Slow Demand Growth of 2.8% YoY in 2012

• Overcapacity should remain a headache for steelmakers over the next twoyears. Our bottom-up approach leads us to expect 2.2 % YoY growth only,much slower than FYI Is almost 10% YoY growth.

m Except for the home appliance and machinery sectors (for which we expect10%YoY growth in steel consumption ), demand from other sectors should risemildly while that from the construction sector should remain flat overall, Theoutlook on exports remains dim due to the lack of incentives for steelmakersand lacklustre demand. On the other hand, we believe crude steel capacity willcontinue to expand by 30m tonnes (4% YoY) to 830m tonnes in 2012,assuming 68 . 66m tonnes of new capacity and 30m tonnes of capacityelimination.

Both ASP and Cost should Decline; Limited Room for MarginSqueezem Impacted by the economic slowdown and contracting property construction

market, we expect steel prices to fall 3-6% YoY and flat steel to outperform longsteel in 2012.

• We believe iron ore import prices peaked out in 2011 due to a graduallynarrowing gap between global demand and supply, We project the Australianbenchmark price to fall 8% YoY in 2012.

m In November 2011, the average net margin for major medium to large-sizesteel mills was only 0.43% with the loss ratio expanding from 32.5% to 39%.We expect steelmakers' profitability to linger at a low level this year.China's per capita steel consumption is still low at 145.2kg as compared withmany developed countries like Germany, Italy, Japan and South Korea. GivenChina's relatively higher GDP and FAT growth potential, we believe there is stillroom for higher per capita steel consumption.

What's New in 12th 5-year Plan (5YP)?

m While China missed its 11th 5-year Plan (5YP) target for consolidation, itremains on top of the agenda in the 12th 5YP period, in which the governmentaims to raise the top 10 concentration ratio from 49% in 2010 to 600/0 by 2015.

a Crude steel demand should reach 750m tonnes by end-2015, implying a 3.7%CAGR within FY11-15E.

Angang Steel Top Pick; Maintain SELL on Maanshan I&S (H)

* We maintain HOLD on Angang H shares but upgrade A shares from HOLD toSUYwith new target prices of HK$5.21 and RMB5.80.

* We like Angang's competitive edge in its dominant flat steel exposure.® The iron ore price retreat in 2H11 (around 9% HOH) should benefit Angang's

IH12 earnings due to its 6-month booking delay mechanism.

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t 49 = A FIIOC INTERNATIONAL

a

Table of Contents

2012 INVESTMENT STRATEGY AND VALUATION .......................... 3

2012 STEEL INDUSTRY OUTLOOK .......... .................................. 6

DEMAND ANALYSIS ............................................................... 10

2012 IRON ORE PRICE OUTLOOK ........................................... 21

EVALUATION OF 11TH 5-YEAR PLAN ........................................ 26

WHAT IS NEW IN THE 12TH 5-YEAR PLAN ? .............................. 2$

BRIEF REVIEW OF THE STEEL INDUSTRY IN 2011 ..................... 31

COMPANY ANALYSIS ............................................................. 39

COMPANY UPDATE

ANGANG STEEL ...................................................................... 41

MAANSHAN I&S ......................................................................48

BAOSHAN I&S ........................................................................ 54

APPENDIX I. PRODUCTION FLOW CHARTS ................................ 56

LISTED COMPANIES IN THIS REPORT ....................................... 57

1 -February 2012 2012 Steel Industry Outlook 2This document may not be distributed in or into the PRC.

t 49- 0q M'.130C INI'1;RNA"TIONAL

0", g1l

Our macro economy team expects FAIgrowth to slow from -23.8 % in 2011 to16-17% in 2012 and to 14-15% in 2013.We expect steel demand growth tofollow a similar trend

2012 STEEL INDUSTRY OUTLOOK

Overcapacity to PersistWhile we expect China's economy to inevitably enter an era of slowinggrowth in 2012, given the prolonged tightening policies over the propertymarket, the steel industry can hardly remain immune from the moderatingmacro-economy.

We forecast crude steel demand will post significant growth slowdown to2,8% YoY, totalling 667m tonnes in 2012. Output should rise 2.2% YoY to697m tonnes, implying over 115m-133m tonnes of excess capacity,equivalent to 14-16% of total production capacity. Our macro-economy teamexpects FAI growth to slow from 23.8% in 2011 to 16-17% in 2012 and to14-15% in 2013. We expect steel demand growth to follow a similar trend,down from 8,8% in 2011 to 2.8% in 2012 (667m tonnes) and 3.2% in 2013(705m tonnes). The costs of iron ore and other raw materials should hover athigh levels in 2012, but steel price averages should be slightly lower thanthose in 2011. The profitability of steel companies appears even grimmer,and the industry as a whole should continue to struggle along with meagreprofits.

Under the 12th 5YP for the steel industry, the top priority of the industrialreform will be to improve the industrial concentration ratio, to tighten thecontrols over steel resources in the upstream and to develop the special steeland new material sectors.

Figure 4. BOCI Steel Demand and Supply Forecasts

(mt) 2005 2006 2007 2008 2009 2010 2011 2012E 2013E

Crude steel capacity 424, 49,1 541 660. 700 764.' 800 830 850

Changes 0 67 50 119 40 64 36 30 20

W growth 0% 16% 10% 22% 6% 9% 4% 2%

Crude steel production 353 419 490 500 _566 623 682 697 735

yoygrowm 18.5% 16.9% 2.2% 13.1% 10.1% 9.5% 2.2% 5.5%Capacity utilisation 83% 85% 91%0 76% 81% 82% 85% 84% 86%

Imports of finished steel 26 19 17 . 15. 18 : 16 16 16 16Exports of finished steel 21 43 63 59 25 43 49 46 46

Net import (expod) 5 (25" (46) (44).. (7) (26) (3;) (30) (30)

Implied steel consumption 339 374 415 456 561 596 649 667 705

Yoygrowth 10.3% 10.7% 10.1% 22.9% 6.3% 8.8% 2.8% 3.2%

Source: Sleelease, CU Steel, 800 Research estimates

1 February 2012 2012 Steel Industry Outlook 6This document may not be distributed in or into the PRC.

BBC INTERNATIONAL

Senall-sized steel mills (1, 000-2, 000 cun?) will be the major growth driveraccount fng for 74% of total nearcapacity in 2011-12

6,500

6,000

5,500

5,000

4,500

4,000

3,500

Figure 5. Steel Price Trend by Product (FY09-11)

(RM8/Q

o '-

0 0 0 0 o O o

- - - -25mnRebar

3,000 -- -- - -

0

- 6.5mmwirerods- - -1rrmCRC

20nm medium and thick plats

Source: wwwousleal.com, BOG Research estimates

Figure 6. Steel Demand YoY Growth Trend by Product (2009-11)

I

^ 07 d^ O7 m ^ OO O O O O O

M try ^ C,O O O O O ^-- O

O

O

O O O O

in iz Q) M nO O O e- O O O- O O

r.. - - Rebar a Wire rods HRC

CRC »»»• ••-• Medium plate Galv and coated plat

Source: wwwsteelease.corn, BOO Research estimates

Crude Steel Capacity to Reach 830m tonnes i n 2012EChina crude steel production capacity reached 764m tonnes by end-2010 andapproximately 800m tonnes by end-2011 according to our estimates thattake into consideration 61,36m tonnes of crude steel capacity additions andaround 25m tonnes of outdated capacity eliminations . By 2013 , crude steelcapacity may reach 850m tonnes.

Based on our channel checks , there will at least be 30m tonnes of newcapacity commissioning in 2012. Within this, small-size mills will be the majorgrowth driver accounting for 74% of total new capacity in 2011 -12. Longsteel capacity should rise sharply during 2012, with the newer-added capacityfor wirer and re ar .perhaps reaching . 10.75m .tonrlcs and_9.68m tonngsrespectively,• , r_epresenîn-g 9% and 6,0 11 &apacity. The capacity ofhot-ro ea -coil ( HRC) and that of medium plate should increase by 10mtonnes and 3m tonnes , respectively , representing 3.7% and 4.4% of 2011Ecapacity. The newly-added capacity of cold-rolled coil ( CRC) may reach 9mtonnes in 2012 , 5.2% of 2011E capacity.


0) 71I

' ' 0q NtOC INTERNATIONALI'_i

Figure 7. Capacity and Capacity Utilisation in China Steel Industry

(rnt)900800700600500400 .;.300200100 t

M Z;; M M a IT m

r_t:i: a Crude steel capacity (LHS)

Source: BOO Research

--Capacity utilization (RHS)

Figure 8, Blast Furnaces Built in China ( 2010-12)

Quantity Design capacity(mt)

1H10 12 18.182H10 26 41.75

.HoH % 117 .130

2010 38 57.23

1H11 18 23.13

2H11 27 41.46HoH % 50 79

2011 45 64,59

yoy% 18.4 12.82012E and afterwards >20 >30.00

Source: www..custeel.coni

Figure 9. New Production Lines and Capacity at Steel Mills (2011-12)

Type 2011 2012

Quantity Capacity Quantity Capacity

(mf) (mt)Wire rod 15 lines 9.90 16 lines 10.75

Rebar 15 lines 11,85 8lines 9.68HRC 4lines 8.40 5.11nes 10.00

Medium plate 4 lines 7.30 1 line 3.00

CRC 33 lines 18.44 23 lines 9.00

Galvanised plate 12 lines 10.17 10 lines 4.85

Silicon steel 9 lines 2.60 6 lines 1.60

Total 92 lines 68.66 70 lines 48.88

Source: China UniledSleel

High Correlation between Output and ProfitabilityBased on the data range of 2002-11 as shown in Figure 10, we see a positivecorrelation between steel industry profitability and steel output growth.Given the poor profitability at present, we expect output growth to deceleratein the near term. In November 2011, the total net profit of major large andmedium-sized enterprises amounted to RMB1.22bn with net margin as low as0,43% and loss ratio (number of loss making enterprises/ total number ofenterprises) increasing to 39%.


t K 9 q 11

BOC INTERNATIONAL

Figure 34. Railway FAI

(RMB bn)8,000 -

5,0004,0003,0002,0001,000

0

7,000 j6,000

In t0 CO ice . n !^ oO ^ WO` OO m O Q O O O OF c> O N co O c" J h

0 0 0 0 0 .^-

M M M V' V 'cY to VÔ O Ô O ^7 ^ O ÒN CD O M 1- V oDO O '-- 0 C, .- O O

77re continuously negative exportpremium for HRC in 2011 implies littleincentive for exports

(%)

500

0

tsGt`_ (100)M M M o 0

+;O O O Ô)^ O ^ inO O O O

3;!Kw FAI in railway aansport(LHS) - Cumulative YoY growth (RHS)

Source.* WIND Database, 80CI Research

Exports should Remain StableBogged down by the sovereign debt crisis, the European economy sufferedan acute downturn in 2011. It even sparked similar situations in South Africaand some other underdeveloped countries, In 2012, the global economyshould continue to encounter difficulties and uncertainties. The president ofthe IMF has recently stated that the growth rate of the global economy in2012 is now estimated at less than 4%. Given the dim demand in the US andEurope amid the high-cost environment, the exports of Chinese steel facequite a grim situation.

We expect China's 2012 steel exports to fall 6% YoY to 46m tonnes due to (i)the weak demand overseas and (ii) the lack of incentives due to the discountsin export prices. According to steelease .com, the steel exports premium formajor steel products were mostly negative as of October 2011 as shown inFigure 35.

Figure 35. Export Premium of HRC and Wire Rod

(RMB/Q400 .

(200.)0 0 0

Z

(100)

100

0

300

200

Source: www.steelease.com, 80CI Research

0 0 0

m HRC

0

N N M a i5 w izz oO m O

Wire rod


@ t ^K 14 F111-130C INTERNATIONAL

OEM

Slight Drop in Steel Price in 2012E Compared with 2011

After a sustained and pronounced fall, the steel price will remain low andsteel inventorywill stay high in 2012E. To sum up our judgment of the supplyand demand situation in the steel market, we expect a slight decline in theaverage steel price and greater fluctuations in 2012 than in 2011. Meanwhile,we reckon that a boost in demand is likely post-CNY, and the constructionramp-up for social security housing in 3Q11 could provide a boost to the steelprice.

Figure 36. Steel Price Forecasts

Category Rebar Wire rod HRC CRC Medium plate

Avg. price YoY Avg. price YoY ; Avg price YoY ; Avg. price YoY t Avg. price YoY

(RMR4) (%) (RMB/I) (%) (RMB11) (%) (RMB11) (%) (RMB11) (%J

2012E '4;460 {6) :::4,485 (o) 4,438` (5)ti. 5,352 (3) 4,513 (5)

2011 4,734 13 4,771 12 4,672 10 5,518 (2) 4,750 8

2010 4;179 4,253 4,251 t 5,606 4,384

Source: wwwcusleelcom, BOCI Researd?

Figure 37. Steel Inventory

(mq2,000 ,

0

1,500 - - - -

CO Cp O CO r` ti r` ao co co co m m m mO O O O O O O O O O O O O O O O

M 8 M N M CO CD N Ch CO M N M Co M N0 0 0 0 0 0 ^'- O O O ^- O O O .-

- - - Total inventory tong steel

O O O

M N M co O>O O O O O O

-•••• Flatsfeel

CD

Source. www.custeel.com , BOO Research

v.


THE REMAINDER OF THIS BUSINESS

PROPRIETARY EXHIBIT CONTAINS

PROPRIETARY RESEARCH AND DATA ON

THE CHINESE CASWR INDUSTRY AND IS

NOT SUSCEPTIBLE TO SUMMARIZATION

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WITH THIS PUBLIC VERSION

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