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 Contained in 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 PEOPLES 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 I Page I. GENERAL INFORMATION ............................................................................................. 2 A. B. Petitioners ................................................................................................................2 Description of the Domestic Industry and Industry Support ................................... 3 1. 2. C. D. Other U.S. Producers of CASWR ............................................................... 3 Industry Support .......................................................................................... 4

Related Proceedings ................................................................................................ 5 Description of the Merchandise and Requested Scope of Investigation ............................................................................................................ 6 1. 2. 3. 4. Product Description ..................................................................................... 6 Technical Characteristics, Production Process, and Uses ........................... 6 Requested Scope of Investigation ............................................................... 7 U.S. Tariff Classification ............................................................................ 7

E. F. G. H. II. III.

Country of Exportation ............................................................................................ 8 Producers and Exporters of the Subject Merchandise ............................................. 8 Volume and Value of Imports ................................................................................. 8 Names and Addresses of U.S. Importers ................................................................. 8

INFORMATION RELATED TO COUNTERVAILABLE SUBSIDIES ............... ........... 9 THE U.S. CASWR INDUSTRY HAS BEEN MATERIALLY INJURED BY REASON OF UNFAIRLY TRADED IMPORTS OF CASWR FROM CHINA ................................................................................................................................ 9 A. The Domestic Like Product Is Co-Extensive With the Scope of the Petition and Consists of All Carbon and Certain Alloy Steel Wire

Rod .......................................................................................................................... 9
B. C. The Domestic Industry Consists of All U.S. Producers of CASWR .................... 12 Subject Imports Surpass the Statutory Negligibility Threshold ............................13

-i-

PUBLIC VERSION Table of Contents (continued) Page D. CASWR Imports from China Are Causing Material Injury to the Domestic Industry .................................................................................................13 1. The Volume of CASWR Imports from China Is Significant and Increasing ........................................................................................... 14 Unfairly Traded CASWR Imports from China Have Had Significant Negative Price Effects on the Domestic Industry ...................................................................................................... 14 a. Subject Imports Have Undersold DomesticallyProduced CASWR by Substantial Margins, Causing the Domestic Industry Lost Sales , Lost Revenue, and Price Suppression and Depression .......................................... 15 Identification of CASWR Products for Which Petitioners Request Collection of Price Data ................................ 16

2.

b.

3.

Unfairly Traded CASWR Imports from China Have Had A Significant Negative Impact on the Domestic CASWR Industry ...................................................................................................... 16 a. Decreasing U.S. Shipment and Production Trends and Low Capacity Utilization Rates for CASWR Demonstrate the Material Injury Caused by Subject Imports ..........................................................................................17 Petitioners' Declining Operating Income Demonstrates the Injurious Impact of the Substantial Volumes of Low-Priced Imports from China .............................................................................................18 Petitioners Have Lost Sales and Revenues to Unfair CASWR Imports from China ........................................................18

b.

C.

IV.

THE DOMESTIC INDUSTRY IS THREATENED WITH FURTHER MATERIAL INJURY BY REASON OF UNFAIR IMPORTS OF CASWR FROM CHINA ...................................................................................................19 CONCLUSION ................................................................................................................. 21

V.

PUBLIC VERSION

PETITION FOR THE IMPOSITION OF ANTIDUMPING AND COUNTERVAILING DUTIES 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 LLC One South Dearborn Street Chicago, IL 60603 Contact: Dan Fuller, Director Wire Rod Sales Tel: (312) 899-3153 Fax: (312) 899-3562 Email: dan.fullergarcelormittal.com Website: http://www.arcelonnittal.com Charter Steel Division of Charter Manufacturing Co., Inc. 1658 Cold Springs Road

Saukville, WI 53080
Contact: Tom Glaister, President & Chief Operating Officer Tel: (800) 43-8789 Fax: (262) 268-2340 Email: GlaisterTQchartermfg com Website: http://www.chartersteel.com Evraz Rocky Mountain Steel 1612 E. Abriendo Ave. Pueblo, CO 81004 Contact: Paige Brodksy, Vice President and General Counsel Tel: (312) 533-3689

Fax: (503) 978-4927

Email: Paijze.Brodsky a,evrazincna.com Website: http://www.evrazna.com -2-

PUBLIC VERSION

Gerdau Ameristeel US Inc. 4221 W. Boy Scout Blvd., Suite 600 Tampa, FL 33607 Contact: Jim Kerkvliet, Vice President of Sales and Marketing Tel: (813) 217-4546

Fax: (800) 628-9931

Email: JKerkvliet@gerdauameristeel.com Website: http://www.gerdauameristeel.com Keystone Consolidated Industries, Inc. 5430 LBJ Freeway, Suite 1740 Three Lincoln Centre Dallas, TX 75240 Contact: Mark Brachbill, V.P. Finance Tel: (309)-697-7628 Fax: (309)-697-7120 Email: BrachbiMgkeystonesteel.com Website: http://www.keystonesteel.com Nucor Corporation 2100 Rexford Road Charlotte, NC 28211

Contact: Douglas Gunson, General Counsel Tel: (704) 366-7000 Fax: (704) 362-4208
Email: d unsongnucor.com Website: 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:

PUBLIC VERSION

Cascade Steel Rolling Mills Inc. 3200 N. Highway 99W

P.O. Box 687

Tel: (503) 472-4181 Fax: (503) 434-5739 Email: fwaechtlerQschn.com Website: http://www.cascadesteel.com Oklahoma Steel and Wire Highway 70 South Madill, OK 73446 Tel: (800) 654-4164 Fax: (580) 795-7422 Email: dweinand@oklahomasteel.com Website: www.oklahomasteel.com Republic Engineered Products 3770 Embassy Parkway Akron, OH 44333-8367 Tel: (440) 996-0740 Fax: (440) 996-0741 Email: lbraungrepublicsteel. com Website: www.republicengineered.com Sterling Steel Company LLC/Leggett & Platt e P.O. Box 757 Number 1 Leggett Road Carthage, MO 64836 Tel: (417) 358-8131 Fax: (417) 358-4805 Email: joe.downesgleggett.com t.com Website: http://www.legget Industry Support

2.

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. -4-

PUBLIC VERSION

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, 957959, 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 -5-

PUBLIC VERSION

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

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-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. Specifically excluded are steel products possessing the above-noted physical characteristics and meeting the Harmonized Tariff Schedule of the United States (HTSUS) definitions for (a) stainless steel; (b) tool steel; (c) high nickel steel; (d) ball bearing steel; or (e) concrete reinforcing bars and rods. Also excluded are free cutting steel (also known as free machining steel) products (i.e., products that contain by weight one or more of the following elements: 0.1 percent or more of lead, 0.05 percent or more of bismuth, 0.08 percent or more of sulfur, more than 0.04 percent of phosphorus, more than 0.05 percent of selenium, or more than 0.01 All products meeting the physical percent of tellurium). description of subject merchandise that are not specifically excluded are included in this scope.

The products under investigation are currently classifiable under

subheadings 7213.91.3011, 7213.91.3015, 7213.91.3020,

7213.91.3093;

7213.91.4500,

7213.91 .6000 ,

7213.99.0030,

7227. 90.6020, 7227. 90.6010 , 7227. 20.0080 , 7227. 20.0030 , 7227.90.6030, and 7227.90.6035 of the HTSUS. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this proceeding is dispositive. 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.

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

PUBLIC VERSION

is included in Exhibit GEN-7, as required by the Department 's regulations . 351.202(b)(9). II.

See 19 C.F.R.

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 BY REASON OF UNFAIRLY TRADED IMPORTS OF CASWR FROM CHINA A. The Domestic Like Product Is Co-Extensive With the Scope of the Petition and 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 and 731-TA-953, 954, 956-959 , 961 and 962 (Final ), USITC Pub . 3546 at 6-12 ( Oct. 2002 ) (" Final Determination 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 demarcation between the various types of wire rod products, but rather indicates a continuum of at least 11 major categories of products ranging from low carbon wire rod such as industrial wire rod used for nails and coat hangers , to medium to high quality wire rod, such as that used for tire bead and prestressed concrete strand , to the highestend products , including CHQ, CSPBIC , and tire cord wire rod. In cases such as the present one, where the domestically manufactured merchandise consists of a broad spectrum of similar products , the Commission does not consider each item of merchandise to be a separate like product that is only "like" its counterpart in the scope, but considers the continuum itself to constitute 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, hotrolled 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 . Germany, and Turkey, USITC Pub. 3832 at 11. See id . at 11-12; CASWR from China,

' See also First CASWR Sunset , USITC Pub . 4014 at 6-7 ; Carbon and Certain Alloy Steel Wire Rod 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 hotrolled 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. Commission found a single like product in that case. Id. at 11.

The

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 of Circumvention 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 finding back to Commerce for further analysis and explanation. See Deacero S.A. de C.V. v. United States, Slip Op. 13-126 (Sept. 30, 2013). The Commerce Department's remand redetermination will then be subject to further review by the Court and possible further appeal. -12-

PUBLIC VERSION

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 Domestic Industry

In determining whether the domestic industry has been injured by reason of the imports under investigation , the statute directs the Commission to consider:
(1) (2) the volume of imports of the subject merchandise; 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 and Increasing

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 [ 2011 to [ 12.5] percent in 2013. Id. ] percent in

While subject imports' market share increased, the ] percent to [ ] percent over the

domestic industry's share of the market declined from [ 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 Significant Negative 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-Produced CASWR by Substantial Margins, Causing the Domestic Industry Lost Sales , Lost Revenue , and Price Suppression and Depression

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.

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PUBLIC VERSION

b.

Identification of CASWR Products for Which Petitioners Request 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 link fencing, collated nails and staples, grates, and other formed products (in green condition, e.g., NOT cleaned, coated, etc.). 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 other formed products (in green condition, e.g., NOT cleaned, coated, etc.). Mesh quality wire rod, grades C1006 through C1015, 5.5 mm (7/32 inch) through 14 mm (9/16 inch) in diameter, for manufacturing of concrete reinforcement products such as wire for A-82 applications (in green condition, e.g., NOT cleaned, coated, etc.). Grades C1050 through C1070, 5.5 mm (7/32 inch) through 6.5 mm (1/4 inch) in diameter, for spring applications excluding valve spring (in green condition, e.g. not cleaned, coated, etc.). Industrial quality wire, Grades C1060 through 1065, 5.5mm (7/32 inch) through 17.5 mm (11/16 inch) in diameter, for spring wire rod used in upholstery and mechanical applications, as well as oiltempered spring applications.

PRODUCT 2:

PRODUCT 3:

PRODUCT 4:

PRODUCT 5:

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 A Significant 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 Low Capacity Utilization Rates for CASWR Demonstrate the Material 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 . production and shipments both decreased during the 2011-13 period.' Producers' Trade and Financial Data). Domestic

See Exhibit INJ-4 (U.S.

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 actual performance information reported by the five petitioning companies during the past three years. -17-

PUBLIC VERSION

R ANGED DATA

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 the Injurious Impact of the Substantial Volumes of Low- Priced Imports 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 ] in 2011 to [

declined significantly over the past three years, falling from [

] in 2013. Id. This decline reflects both the decline in net sales quantity and the price depression and suppression experienced by the domestic industry. 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. domestic producers' operating profits declined by [ From 2011-13, the See Exhibit INJ-4 (U.S.

] 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 CASWR Imports 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 MATERIAL INJURY 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 at least 33 major producers of carbon steel wire rod in China, many of which have ] metric tons. See annual CASWR productive capacities of [ Exhibit 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 CASWR productive capacity, Chinese producers are still building additional capacity. See Exhibit INJ-5.

-19-

PUBLIC VERSION

RANGED DATA

The subject producers are highly export-oriented, with the United States being one 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 a ] percent in 2011, subject imports increased in volume market share of [ to 614,402 tons and to a market share of [ )a,^ ] percent in 2013. See section III.D.1 and Exhibit INJ-2. It is likely that subject imports will enter the United States at pricing levels that will depress and suppress U.S. prices in the imminent future, as they have during the 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 on domestic 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. PRICE DANIEL B . PICKARD CHRISTOPHER B. WELD WILEY REIN, LLP 1776 K Street, N.W. Washington , DC 20006 (202) 719-3375

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 4rcelorMittal USA LLC, Charter Steel, Evraz Rocky Mountain Steel, Gerdau Keystone Inc., and Ameristeel US Consolidated Industries, Inc.

Counsel to Nucor Corporation

ECONOMIC CONSULTANTS: GINA E. BECK JULIE H. SANTOBONI GEORGETOWN ECONOMIC SERVICES, LLC 3050 K Street, N.W., Suite 400

Washington, DC 20007 (202) 945-6660

Dated: January 31, 2014

PUBLIC VERSION

VOLUME I EXHIBITS : TABLE OF CONTENTS Exhibit GEN-1 Exhibit GEN-2 Exhibit GEN-3 Exhibit GEN-4 Exhibit GEN-5 Exhibit GEN-6 Exhibit GEN-7 Exhibit INJ-1 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

Exhibit INJ-2

Import Volume and Market Share

Exhibit INJ-3

Lost Sales and Lost Revenue Data

Exhibit INJ-4

U.S. CASWR Producers' Trade and Financial Data

Exhibit INJ-5

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 LLC Charter Evraz Rocky Mountain Stee Gerdau Ameristeel US Inc. Keystone Consolidated Industries, Inc. Nucor Corporation Petitioners ' Subtotal I I

TOTAL U .S. PRODUCTION THOSE IN SUPPORT OF THE PETITION AS A SHARE OF TOTAL U.S. PRODUCTION THOSE IN SUPPORT OF THE PETITION AS A SHARE OF THOSE EXPRESSING SUPPORT OR OPPOSITION

I
r,pvv, g0Lr%e,$ $ AN1 -N If

Source: Production figures represent actual data reported by [

0((X6+

] and [

orbnwS

Prepared by Georgebwn Economic Services

PUBLIC VERSION

DECLARATION OF [ f)CLYhe-,

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.

Z D 13 ? rod u c-+ t ova x v\4)r ma+-t d vN

eKp 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+lovn

J
3.

do.A%x.
I

s igna^vre,
January 27.20:14

Ex h ibit GEN-2

EXHIBIT G E N-2 CHRONOLOGY OF ANTIDUMPING AND COUNTERVAILING DUTY INVESTIGATIONS, SECTION 201 INVESTIGATIONS, AND OTHER RELATED PROCEEDINGS INVOLVING CASWR Antidumping and Countervailing Duty Investigations
Filing Date of , I Petition Initiation Date Type of Investigation I the Trade Act Country j Disposition

Feb. 8. 1982

Mar. 4, 1982 I Section 701 of Brazil

Belgium

I Brazil:
Investigation ("Inv.) suspended on Sept. 27, 1982 (47 i

of 1930 (the "Act'' (^ C VD .)

France ^

FR 42399) Inv. terminated on Oct. 21, 1985 (50 FR 33809)

1
Feb. 8. 1982 j Mar. 4. 1982 11 Section 303 of the Act (CVD) i
I

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

FR 50732)
Argentina South Africa Argentina: ( Inv. suspended on Sept_ 27: 1982 (47 FR 42393); i Order revoked (ITC negative sunset) (Pub. 3270. Jan.

2000)
South Africa:

`
j '

Order issued on Sept. 27. 1982 (47 FR 42396);

Order revoked on Oct. 7, 1985 in DOC changed circumstances review (50 FR 40885)

Feb. 8. 1982

Mar. 4, 1982 ' Section 731 of Venezuela

the Act (AD) I

Negative Injury (Pub. 1338, Feb. 1983)

Sept. 30, 1982 I Oct. 26, 1982 Section 731 of ; Brazil I the Act (AD) 1 Trinidad & I Tobago f

I Brazil: . Affirmative injury (Pub. 1444, Oct. 1983) Order revoked on Sept. 20, 1985 and replaced with Voluntary Restraint Agreement ("VRA") (50 FR 38150)

Trinidad & Tobago: 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 & the Act Tobago (CVD)
Section 701 of the Act { (CVD) I Nov. 23.. 1983 Dec. 21, 1983 Section 303 of the Act (CVD) Czechoslovakia i Czechoslovakia: Poland Inv. terminated (DOC negative) on Feb. 16. 1984 (49 FR 6773) Poland: Inv. terminated (DOC negative) on May 7, 1984 (49 FR 19374) i
i
i

Affirmative injury (Pub. 1444, Oct. 1983) Order revoked on Dec. 14, 1987 and replaced with VRA
(52 FR 47440) Affirmative injury (Pub. 1544, June 1984) Order revoked on Sept. 11, 1985 and replaced with VRA

Nov. 23, 1983

Dec. 21. 1983

Spain

(50 FR 37018)

i
I

Nov. 23, 1983 1 Dec. 30, 1983

Section 731 of i Argentina

the Act (AD) i Mexico i Poland

( Argentina:
Affinnative injury (Pub. 1598. Nov. 1984)

i
I
i

I
r
j

Spain

e Order revoked (ITC negative sunset) (Pub. 3270, Jan. 2000 )

Mexico: Inv. terminated (petition withdrawn) on July 6, 1984 due

to VRA (49 FR 27806)

i
l1 i

Poland: ITC negative (Pub. 1574, Sept. 1984) Spain: Affirmative injury (Pub. 1598, Nov. 1984) i Order revoked on Sept. 16, 1985 and replaced with VRA (50 FR 37560) iI Section 731 of 11 German the Act (AD) Democratic i Republic i a Inv. tenninated (petition withdrawn) on Aug. 1, 1985 and. replaced with VRA (50 FR 31213) j

!
Sept. 26, 1984 1 Apr. 8, 1985 j i i I i Oct. 24, 1984

May 3, 1985 ':. Section 731 of Poland the Act (AD) ! Portugal Venezuela j i

, Poland: Inv. terminated (petition withdrawn) on Sept. I0. 1985 { and replaced with VRA (50 FR 36909) Portugal: Inv. terminated (petition xithdrawn) on Dec. 10, 1985 and replaced with VRA (50 FR 50335) Venezuela:

I
j

I
i

Inv. terminated (petition withdrawn) on Aug. 12, 1985

and replaced with VRA (50 FR 32465)

Apr. 8, 1985

May 6, 1985

Section 701 of the Act

Portugal I Venezuela

Inv. terminated (petition withdrawn) on Dec. 1.0, 1985 and replaced with VRA (50 FR 50335)

! June 12, 1985

I Aug. 8, 1985 j

(CVD) July 11, 1985 ; Section 303 of Saudi Arabia the Act (CVD) Sept. 5, 1985 ! Section 303 Singapore
I o f th e A ct (CVD)

Order issued on Feb. 3, 1986 (51 FR 4206) Order revoked on Nov. 15, 1994 (59 FR 58814) Inv. terminated (Negative at DOC) on Tan. 27, 1986 (51
FR 3357)

Sept. 23; 1985

Oct. 18, 1.985

Section 303
of the Act (CVD)

New Zealand

Order issued on Mar. 7, 1986 (51 FR 7971)

Order revoked on May 26, 1995 due to enactment of the Uruguay Round Agreements Act of 1994 (URAA) (See

j I

60 FR 27693) I Mar. 31, 1986 Section 303

of the Act (CVD)

I
Malaysia
Zimbabwe

I Mar. 4, 1986
I

Malaysia:
Inv. terminated (petition withdrawn) on Aug. 14, 1986 (51 FR 29145) Zimbabwe:

I
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 Section 303 of Malaysia 1 ! the Act (CVD) I

Section 303 of Singapore

Order issued on Apr. 22, 1988 (53 FR 13303) Order revoked on May 26.1995 due to URAA (See 60 FR 27693)
Inv. terminated (DOC negative) on May 6,. 1988 (53 FR

Oct. 22, 1987

the Act (CVD) I ^

I
!i

16304)

Apr. 23, 1. 993

Apr. 30, 1993

Section 731 of Brazil

the Act (AD) Canada

i Canada:
Inv. terminated (petition withdrawn) on May 4, 1994(59

Japan
j ! Trinidad & Tobago

FR 23053)
Brazil & Japan:

ITC final negative (Pub. 2761, Mar. 1994) I

`
i

! Trinidad & Tobago:

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

Feb. 14, 1994 j

Mar. 14, 1994 i

Section 731 of the Act

Belgium Germany

{ Belgium: i Inv. terminated (petition withdrawn) on Aug. 2, 1994

(CVD)

(59 FR 39324)
Germany: e Inv. terminated (ITC prelim. negative) (Pub. 2760. Mar. '

! !
Feb. 14, 1994 i Mar. 14, 1994 I Section 701 of I Germany ? the Act (AD) I Feb. 26. 1997 Mar. 24; 1997 i Section 731 of Canada ! ! the Act (AD) Germany Trinidad & Tobago Venezuela
! !

1994)
j Inv. terminated (ITC prelim. negative) (Pub. 2760, Mar. 1994) ITC final negative (Pub. 3087, Mar. 1998) j

j
i

j i

Feb. 26; 1997

Mar. 24. 1997

Section 701 of Canada the Act i Germany i "Trinidad & I (CVD) Tobago Venezuela

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 the Act (AD) Canada

Egypt , South Africa, and Venezuela: Inv. terminated (ITC prelim. negative) (Pub. 3987, Mar.

Egypt
j Germany Indonesia Mexico

2008, 3r`^ Remand)

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

{ Moldova
South Africa Trinidad &

2002)
Canada:

Tobago
I

Affirmative injury (Pub. 3730. Oct. 2004, Remand)

i Order revoked (ITC negative in 1tit ^ sunset) (Pub. 4014, Jun. 2008)

'

! Ukraine i Venezuela

Brazil, Indonesia, Mexico, Moldova , and Ukraine: 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.
1, 2013) i i Trinidad & Tobago:

j )I I 6

Affirmative injury (Pub. 4170, June 2010, 2"'1 Remand) Affinnative I" sunset (Pub. 4014; Jun. 2008)

Currently in 2nd Full Sunset Review (78 FR 60316, Oct.

1.2013)

Aug. y

17 2001

Oct. 1, 2001

Section 701 of ! Brazil the Act Canada Germanv (CVD) Trinidad & Tobago Turkey i
j

T rinidad & Tobago and Turkey: e Inv. terminated (DOC negative) on Aug. 30, 2002 (67 i FR 55810) Germanv: Inv. tenninated (negligible imports) (Pub. 3546, Oct.

2002)
Canada: Affirmative injury (Pub. 3730, Oct. 2004, Remand) j Order revoked in DOC changed circumstances review

'

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 1 Dec. 7, 2005 i Section 731 of the Act (AD) China Germany ^ China, Germany and Turkey: ; Inv. terminated (ITC prelim. negative) (Pub. 3832, Jan.

Turkey

2006)

SafejZuard Investigations
Filing Date of Petition Jan. 24, 1984 Type of Investigation Section 201 of the Act (TA201-51) Section 201 of the Act . Disposition Negative with respect to carbon steel wire rod (Pub. 1553, July 1984) Affirmative, 3-3 vote; except for Canada and Mexico (Pub.

Jan. 12, 1999

(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 years and 1 day (Pres. Proclamation 7273)

On Nov. 21, 2001; the President modified the TRQ to be

allocated among four supplier country groupings (Pres. Proclamation 7505) Relief expired on March 1, 2003. ITC made an affirmative determination that Canada and Mexico were undermining the section 201 relief to the

July 24, 2001

Section 312(c) of NAFTA

Implementation Act (NAFTA-

312-1)

i
!

domestic wire rod industry (66 FR 45692, Aug. 29, 2001)

President declined to extend the import relief to imports from Canada and Mexico On Apr_ 11, 2003, ITC instituted an investigation to

Apr. H. ; 2003

Section 204(d)

of the Act

(TA-204-6)

evaluate effectiveness of the relief (68 FR 19578)

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

Exhibit GEN-3

Carbon and Certain Alloy Steel Wire Rod from Brazil , Canada, Indonesia , Mexico, Moldova , Trinidad and Tobago, and Ukraine
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 Tariff Schedule 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 the time of the original investigations general U,S. tariffs on wire rod, applicable to U,S. imports that are products of the subject countries and classified under these headings , ranged from 0.8 to 0.9 percent ad valorem for nonalloy steel and were 1 , 8 percent ad valorem for alloy steel . By January 1, 2004, these tariffs 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 cross section that typically is produced in nominal fiactional 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 wire drawers. " s Wire rod sold in the United States is categorized by "quality" according to end use. End-use categories are broad descriptions with overlapping metallurgical qualities, chemistries, and physical characteristics." 'I'able 1-12 presents quality and commodity descriptions for 1 I major types of wire rod, as indicated by the Iron and Steel Society. Industrial quality wire rod currently accounts for the majority of wire 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 chain lint: fence. Most of the industrial quality wire rod is produced and sold in the smallest cross-sectional diameter that is hot rolled in substantial commercial quantities (7/32 inch or 5,6 mm). Industrial quality wire 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. The following 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 elements can 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 1-12 Wire rod : Quality, end uses , and im p ortant characteristics
Quality Chain quality Cold-finishing quality Cold-heading quality End uses Electric welded chain Cold-drawn bars Cold-heading, cold-forging, coldextrusion products Nondeformed rods for reinforcing concrete (plain round or smooth surface rounds) Insect screen, weaving wire, florist wire Important characteristics Butt-welding properties and uniform
internal soundness

Surface quality Internal soundness, good surface quality, may require thermal

treatments
Concrete reinforcement Chemical composition important only insofar as it affects mechanical property Rods must be suitable for drawing into wire sizes as small as 0.035 inch (0.889 mm) without intermediate annealing; internal quality important Requires thermal treatment prior to drawing; however, it is not intended to be used for music wire or valve spring wire Can only be drawn a limited number of times before requiring thermal treatment Restrictive requirements for chemistry, cleanliness, segregation, decarburization, surface imperfections Internal soundness, good surface quality Restrictive requirements for cleanliness, segregation, decarburization, chemistry, surface imperfections Restrictive requirements for uniform chemistry

Fine wire

High carbon and medium-high carbon

Strand and rope, tire bead, upholstery spring, mechanical spring, screens, aluminum conductors steel reinforced core, prestressed concrete strand; pipe wrap wire is a subset Nails, coat hangers, mesh for concrete reinforcement, fencing Springs subject to high stress; valve springs are a subset

Industrial (standard) quality

Music spring wire

Scrapless nut

Fasteners produced by cold heading, cold expanding, cold punching, thread tapping Tread reinforcement in pneumatic tires

Tire cord

Welding quality

Wire for gas welding, electric arc welding, submerged arc welding, metal inert 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 highand 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 the steel's chemistry is fixed; (2) casting the steel into a semifinished shape (billet); (3) hol-rolling the billet into rod on a multistand, high-speed rolling mill; and (4) coiling and controlled cooling of the wire rod as it 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 the entire 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 integrated route 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 *** purchase billets for their specialty products."

11,1'he end uses of very high quality wire rod are those where nlanul'acturing process involve huge amounts of cold deformation ol'the steel such as in recessed quality colic heading; those that are safety critical, such as automotive wheel bolts and tire reinforcing wire; those that have very demanding consistency requirements or unusual steel chenlisty requirements, such as certain welding grades: and other applications that put unusual and dcnlanding 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 metallurgical requirements 101- carbon and alloy steel wire, rods, and bars in coils intended for the manufacture of inechanical fasteners (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/or application and does not imply "quality" in the usual sense. While wire rod meeting ASTM F2282 generally is termed 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 wire rod. a' The Stelmor deck allows for the controlled cooling of wire rod. This cooling speed imparts certain physical characteristics, enabling producers to produce a wider range ofwirc rod qualities. Must. iinot all. U.S. Wire rod producers 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 their higher quality production." Wire rod manufacturers, such as Republic, that have steelmaking capabilities, can produce their own billets for the desired end product by using more virgin iron ore to limit residues or by using more scrap for more industrial grade products, One non-U.S. producer further claims 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 hotbriquetted iron and/or pig iron to the mix, depending on the specifications for the end product and the relative 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 more DR 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 the furnace 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 secondary steel making, station the chemical content (particularly that of carbon and sulfur) is adjusted, and alloying agents 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 molten steel 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. Sled producers nlay choose to use higher portions of virgin ore, commonly in the form of'pig iron, direct reduced iron, or taconite 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'Icct yields 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. These gasses, chielly oxygen and hydrogen, cause embrittlenlent, voids, and nonmetallic inclusions. Low pressures. such US 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 more easily 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 in steel; vacuum treatment more easily removes hydrogen from the steel. I-lence the use ofdcoxidizing processes results 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 Rnm that can enter 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 the caster and the molten steel is poured at a controlled rate into a tundish, which in turn controls the rate of flow of the molten steel in to the caster's molds. The tundish may have a special design or employ electromagnetic stirring to ensure homogeneity of the steel. The strand caster is designed to produce billets in the desired cross-sectional dimensions, based on the dimensions of the rod and the design of the rolling mill. Billets may be charged directly into the rolling mill ("hot-charged") or, depending upon the rolling mill's schedule, sent to a storage yard. While in storage, they may be inspected and subjected to one 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 foreign competitors.' 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 along which the coiled rod travels prior to being collected, tied, compacted, and readied for shipment. Wire rod mills typically consist of22 to 29 rolling stands and the specialized Stelmor conveyor deck.-,'-' the need for uniform metallurgical properties requires close temperature control accomplished by accelerating or retarding the rod's cooling as it is rolled and conveyed along the Stelmor deck. This is accomplished by water 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 usually consists of approximately five stands). It then is passed through and successively reduced in size on several more stands, termed intermediate rolling. After the last intermediate rolling stand, the rolling mill usually splits into dual lines and the product is passed along to a pre-finishing mill which reduces it further in diameter. Rod mills often employ a "twist" mill for primary and intermediate rolling, but the final rolling is nearly always on a no-twist Morgan vee mill (the rolls in each of approximately five stands are set a 90-degree angles to allow the rod to be rolled without twisting). This produces a nearly uniform non-oriented grain structure in the steel. Alter exiting the last Imishing stand, the rod is coiled into concentric 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 the case ol'surface grinding, scam and folds are removed. "The rolling process, however, can be optimized for various quality levels. The rolling process fur higher quality steel, such as for cold heading quality and other surface sensitive products, must be designed to maximize surface integrity. This is managed by the number ol'rolling stands used to get to a specilic end diumeter, the design of the reductions taken at each step, and the design ol'the guiding equipment used to keep the steel moving on the proper 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 hrielol'l\aco. Ans\vers to COmmissiOnel's' Questions, p. 17.

1-26

During ro ll ing, the rod is w ate r-cooled as it tr avels along the Slel mor deck ; cooling practices are varied depending o i l the designated end use of the rod and t h e Cu Stol1l e f'S plelCrellCCS. T he speed at whi ch the r od is cooled a ffects the consistency an d forma tio n of Its mCtaIIt11LjCaI StlIICIUIe (gralll StRICtllre and physical properties such as tensile strength). It also affects scale buildup, which determines yield losses at the wire drawer. The cooling rate may be varied through the use of renlovable covers (insulating hoods which may be independently raised or lowered) over the deck or blown-air cooling, or a combination of the two, or through varying the speed of the roller table. The end user often specifies the cooling 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 rod which may be of lower quality due to uneven temperature control; the cropped ends are also used for testing 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 reheat through cooling stages of the wire rod production process.

Figure 1-1

Wire rod : Reheat and rolling process

Reheat furnace Roughing stand Finishing stands

Stelmor cooling deck

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

Domestic producers manufacture various types of wire rod on essentially the same equipment, in the same facilities, and with the same production personnel. While changes to production processes are limited, changes in chemical composition, alloying elements and other raw materials, stand fittings, and cooling 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'ormation compiled in response to Commission questionnaires concerning several types 01'\A/ire rod products produced in the United States are presented in section 111.

1-27

Ex h i b it GEN-4

Harmonized Tariff Schedule of the United States (2014)

Annotated for Statistical Reporting Purposes XV 72-18 Heading/ Subheading Slat Suffix Unit of Quantity Rates of Duly

Article Description

General

Special

Bars an rods, hot-rolled, in irregularly wound coils, o iron or nonalloy steel: Concrete reinforcing bars and rods ................. 7213.10.00 00 7213 7213.20.00 10 80 Other, of free-cutting steel ....................... Containing by weight 0.1% or more of lead........ Other ..................................... Other: Of circular cross section measuring less than 14 mm in diameter: Not tempered, not treated and not partly manufactured ........................... Tire cord-quality steel wire rod as defined in statistical note 4 of this chapter.. Of Cold Heading Quality (CHQ) steel, as defined in statistical note 5 to this chapter.. Of welding quality wire rods as defined in statistical note 6 to this chapter . , ..... , .. Other ............................... Other: Containing by weight 0.6 percent or more of carbon ............................ Other ...............................

kg....... Free ......... Free kg kg

20% 5.5%

7213.91 7213.91.30 11

......... Free kg kg

5.5%

15 20

kg kg

93

7213.91.45 00

kg....... Free kg....... Free

5.5% 6% 5.5%

7213.91.60 00 7213.99.00 30 60 90

Other ... ................................. . ...... .. Free Of circular cross section: With a diameter of 14 mm or rnore but loss ... kg than 19 mm..... With a diameter of 19 rnm or rnore........ . kg Other ....... ......................... kg

Harmonized Tariff Schedule of the United States (2014)

Annotated for Statistical Reporting Purposes
XV 72.36 beading/ Subheading Stat Suffix Unit Article Description Rates of Duty

of Quantity

General

Spodal

7227

Bars and rods, hot rolled, in irregularly wound coils, of other alloy steel: Of high-speed steel ............................. 7227.10.00 00 Of silico-manganese steel ........................ 30 Of welding quality wire rods as defined in statistical note 6 to this chapter ................ Other ..................................... Other: Of tool steel (other than high-speed steel): Not tempered, not treated, and not partly manufactured ........................... Of ball-bearing steel ................... Other ............................... Other .................................. Of ball-bearing steel ................... Other ............................... Other ..................................... Of high-nickel alloy steel ................... Of Cold Heading Quality (CHQ) steel, as defined in statistical note 5 to this chapter.....

kg....... Free ......... Free kg kg

14% 10%

7227.20.00

80 7227.90 7227.90.10 30 60 7227.90.20 30 60 7227.90.60 05 10

......... Free kg kg ......... Froe kg kg ......... Free kg

12%

11%

10%

kg

20

Of welding quality wire rods as defined in statistical note 6 to this chapter .............. kg Of a circular cross section: With a diameter of less than 14 mm....... With a diametor of 14 mm or more but less than 19 rnrn .......................... With a diameter of 19 mm or more........ Other. . ................................

30 35 40 90 7228

kg kg kg kg

Other bars and rods of other alloy steel; angles, shapes and sections, of other alloy steel; hollow drill bars and rods, of alloy or non-alloy steel: Bars and rods, of high-speed steel .................. ......... Free 7228.10.00 Not cold-formed ............................. kg 10 Cold-formed: 30 With a maximum cross-sectional dimension of less than 18 mm ......................... kg 60 7228.20 7228.20.10 00 7228.20.50 00 With a maximum cross-sectional dimension of 18 mm or more .......................... Bars and rods, of silico-manganose steel: Not cold-formed .......... .................. Cold-formed.. .............................. kg kg....... Free kg....... Free

32%

28% 28%

Harmonized Tariff Schedule of the United States (2013)

Annotated for Statistical Reporting Purposes XV 72-18 Heading / Stal Subheading Suffix Unit of Quantity Rates of Duty 1 General Special 2

Article Description

Bars and rods, hot-rolled, in irregularly wound coils, of iron or nonalloy steel: Concrete reinforcing bars and rods ................. kg....... Free 7213.10.00 00 7213 721120.00 10 80 7213.91 7213.91.30 11 15 20 93 7213.91.45 00 7213.91.60 00 7213.99.00 30 60 90 Other, of free-cutting steel ....................... ......... Free Containing by weight 0.1 % or more of lead........ kg Other .................................... kg Other: Of circular cross section measuring less than 14 mm in diameter: Not tempered, not treated and not partly manufactured ........................... ......... Free Tire cord-quality steel wire rod as defined in statistical note 4 of this chapter. , kg Of Cold Heading Quality (CHQ) steel, as defined in statistical note 5 to this chapter.. kg Of welding quality wire rods as defined in statistical note 6 to this chapter .......... kg Other .............................. kg Other: Containing by weight 0.6 percent or more of carbon.. .......................... kg....... Free Other .............................. kg....... Free Other .................................... Of circular cross section: With a diameter of 14 mm or more but less than 19 mm .......................... With a diameter of 19 mm or more........ Other . ................................ ......... Free kg kg kg

20% 5.5%

5.5%

5.5% 6% 5.5%

Harmonized Tariff Schedule of the United States (2013)

Annotated for Statistical Reporting Purposes XV 72-36 Heading / Stat Subheading Suffix Unit of Quantity Rates of Duty 1 General Special 2

Article Description

7227

Bars and rods, hot-rolled, in irregularly wound coils, of other alloy steel: Of high-speed steel ............................. kg....... Free 7227.10.00 00 Of silico- manganese steel ........................ ......... Free 30 80 Of welding quality wire rods as defined in statistical note 6 to this chapter ................ kg Other . ................................... kg Other: Of tool steel (other than high- speed steel): Not tempered, not treated, and not partly manufactured ........................... Of ball-bearing steel ................... Other . ............................. Other ................................. Of ball-bearing steel ................... Other. ............................. Other . ...................................

14% 10%

7227.20.00

7227.90 7227.90.10 30 60 7227.90.20 30 60 7227.90.60 05 10 20 85 7228

......... Free kg kg ......... Free kg kg ......... Free

12% 11% 10%

Of high-nickel alloy steel ................... kg Of Cold Heading Quality (CHQ) steel, as defined in statistical note 5 to this chapter..... kg Of welding quality wire rods as defined in statistical note 6 to this chapter ............. kg Other . ................................ kg

Other bars and rods of other alloy steel; angles , shapes and sections, of other alloy steel; hollow drill bars and rods, of alloy or non-alloy steel: Bars and rods, of high-speed steel ................. ......... Free 7228.10. 00 Not cold-formed ............ . ............... kg 10 Cold-formed: With a maximum cross-sectional dimension of 30 less than 18 mm ......................... kg 60 7228.20 7228.20.10 00 7228.20.50 00 With a maximum cross-sectional dimension of 18 mm or more .......................... kg Bars and rods, of silico -manganese steel: Not cold-formed ............................ kg....... Free Cold-formed ............................... kg....... Free

32%

28% 28%

Ex h ibit GEN-5

EXHIBIT GEN-5 LIST OF FOREIGN PRODUCERSIEXPORTERS OF CASWR FROM CHINA

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

2WIM :SS 1 Huangang Road Tiexi District Anshan, Liaoning Province, 114021 China Email: office@ansteel.com.cn Tel: +86 412 672 3090 Fax: +86 412 672 3080 Website: http://www.ansteelgroup.com Meiyuan Village Yindu District Anyang, Henan , 455004 China Email: agjt@ angang.com.cn Tel: +86 372 312 0114 Fax: +86 372 393 1892 Website: http://www.angang.com.cn Baosteel Administrative Center No. 885 Fujin Road Baoshan District, Shanghai, 201900 China Email: customer rx,baosteel.com Tel: +86 21 26647000 Fax: +86 21 26648888 Website: http://www.baosteel.com/plc e/index.asp Hexi Industrial Park Kun District Baotou City, Inner Mongolia, 14010 China Email: infogbtsteel.com Tel: +86 472 218 9000 Fax: +86 472 218 3708 Website: http://www.btsteel.com

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

Baoshan Iron & Steel Co., Ltd (Baosteel Group Corp.) ( includes Guangdong Shaoguan Iron & Steel Co., Ltd.)

Baotou Iron and Steel (Group) Co., Ltd

Beijing Jianlong Heavy Industry Group Co., Ltd.

Building 50, Block 12, Advanced Business Park, No. 188 West Road,South Ring 4, Fengtai District,Bejing, 100070 China Tel: +86 010 83627444

Fax: +86 010 83607005

Website: http://en.eiianlong.com/ilWeb/index.do?actionf^en^lish No. 36 Huanshan Road Mingshan District Benxi, Liaoning, 117022 China Email: beitaigchinabeitai.com Tel: +86 41 4486 8855 Fax: +86 41 4484 3613 Website: http://www.bxsteel.com/btsteel/index.htm Chengdu Babao Street No. 88 Guoxin Plaza, 16 floor E block Sichuan China Tel: +86 028 86277458, +86 028-86277468, +86 028 86277478 Fax: +86 028 86267458 http://www.cqgtjt.com Pan Jia Zhuang Industrial Zone, Jiu Guan Town, Huzhou City, Zhejiang, 313011 China Email: infogf isteels.com Tel: +86 572 3511711 Fax: +86 572 3511715 Website: www.fusteels.com North Bird Road 117 Liuzhou, Guangxi, 545002 China Wesbite: http://www.liuzhousteel.com/ Wesbite:
http://ww-w.gfgt.com/defaultl.g.^px

Beitai Iron & Steel Group Co., Ltd (a.k.a Beigang Group) (includes Benxi-Beiying Iron & Steel Group Co.)

Chongqing Iron and Steel (Group) Co., Ltd.

Fugang Group

Guangxi Liuzhou Iron and Steel (Group) Company

Guofeng Iron and Steel Handan Iron & Steel Group Co., Ltd.

Hangzhou Iron & Steel Group Company

Fuxing Road 232 Handan, Hebei China Email: admin@mail.hgit.cn Tel: +86 310 6072141 Wesbite: http://www.hgit.com.cn/en/index.aspx Wesbite: http://en.hzsteel.com/web/index.asp

Hebei Iron & Steel Group Co., Ltd (includes Jin Ding Heavy Industry

No.40 Yuhua West Road Shijiazhuang, Hebei, 050000

Co., Ltd.)

China
Email: infoghebgtit.com, hbgtjdzg_(iD163.com

Tel: +86 311 6677 8886 Fax: +86 311 66778662

Hebei Xinjin Iron and Steel Co., Ltd (includes Xuanhua Iron & Steel Group and Tang Steel) Website: http://www.hebgft.com Tongan North Road Wu'an City, Hebei Province, 56300 China Email: xi@xinjinsteel.com Tel: +86 310 5630685, +86 310 5688556, +86 310

5630686
Fax: +86 310 5630661 Website: http://www.xiniinsteel.com Tiantan District Jiyuan, Henan, 454650 China Email: hnig@hnig.com

Henan Jiyuan Iron & Steel Group Co., Ltd

Tel: +86 391 6688 172, +86 391 6695 008

Fax: +86 3916695008 Website: http://www.haig.com Gangcheng Road Yuetang District Xiangtan City, Hunan Province, 411101 China Tel: +86 731 5865 2516, +86 731 58659077 Fax: +86 731 58659075, + 86 731 58663053 Website: http://www.hnxg.com.cn Jin feng Zhangjiagang City, Jiangsu Province, 215625 China Tel: +86 512 5856 8872, +86 512 58568873 Fax: +86 512 5855 1627 Website: http://www.sha-steel.coM/sg YongLian Industrial park Nanfeng Town Zhangjiagang City, Jiangsu Province, 215628 China Email: officer@yong-gang.com Tel: +86 512 58612888 Fax: +86 512 58612528 Website: http://www.yong-gang.com Email: wlzx(a)pxsteel.com Website: http://www.pxsteel.com/
3

Hunan Valin Xiangtan Iron & Steel Co., Ltd (XISC) (subsidiary of Hunan Valin Iron & Steel Group Co., Ltd.)

Jiangsu Shagang Group Co., Ltd

Jiangsu Yonggang Iron & Steel Group Co., Ltd

Jiangxi PXSteel Industrial Co., Ltd.

Jinxi Group

Jiuquan Iron & Steel (Group) Co., Ltd (JISCO) (includes Yugang (Yuzhong Iron & Steel))

Kuming Iron & Steel Holding Co.,

East Third Ring Road No. 9, Building 2901, Room 3 Chaoyang District, Beijing China Wesbite: http://hbjx.com.cn No. 12 Xiongguan East Road East Xiongguan Jiayuguan City, Gansu, 735100 China Email: hon aigiiugan .com Tel: +86 937 671 141 1 Fax: +86 937 671 141 1 Website: http://www.jiggang.com Anning City, Yunnan Province, 650302

Ltd. (KISC)

China
Email: lzy7245gynk .com Tel: 86-871-68607457

Fax: 86-871-68606802
Laiwu Iron and Steel Group. Co., Ltd. Website: http://Ynkg.com/web/guest/home House before Gangcheng Avenue 99 Laiwu City, Shandong Province, 271104 China Website: http://www.laigang.com/index.asp Steel Road, No. 3 Lingyuan City, Liaoning Province China Wesbite: http://lgit.com.cn/LoginDispAction.do No. 8 Jiuhuahuaxi Road Maanshan City, Anhui Province, 243003 China Tel: +86 555 288 3492 Fax: +86 555 288 4350 Website: http://www.masteel.com.cn Wesbite: http://www.nisteel.com.cn/portal/welcome/index.*sp Room 1219 No. 669 Lvyin Road Honggutan New Area Nanchang City, Jiangxi Province, 330022 China Email: wlzxgpxsteel.com Tel: +86 791 675 3021 Website: http://www.,oxsteel.com

Ling Yuan Iron and Steel Group Co., Ltd.

Maanshan Iron & Steel Co., Ltd

Nanjing Iron and Steel United Co., Ltd. Pingxiang Iron & Steel Co., Ltd

Qingdao Iron & Steel Group Co. (Qinggang)

Rizhao Steel Group (owned by Shandong, and owns/operates Minmetals Yingkou Medium Plate Co.)

5 Zunyi Road Qingdao, Shandong Province, 266043 China Email: steelgpublic.gd.sd.cn Tel: +86 532 8481 6761 Fax: +86 532 8481 6057 Website: http://www.qdsteel.com No. 600 Yanhai Road Rizhao, Shandong, 276806 China Email: service(,rizhaosteel.com

Tel: +86 633 6188 060

Fax: +86 633 6180000 Website: http://www.rizhaosteel.com Longmen Town Hancheng City, Shaanxi Province, 715405 China Tel: +86 913 518 2222, +86 913 518 2333, +86 913 518 2300 Fax: +86 913 5182345 Website: http://www.lm-steel.com 21 Gongyebeilu Road Jinan, Shandong, 31200 China Tel: +86 531889 82126 Email: iigang_@Jigang.com.cn Websites: http://www.iigang.com.cn, htt-p://www.sdsteel.cc Zhongyang, Beijiaoqu Shanxi Province China Tel: +86 358 5033489 Fax: +86 358 5033489 Website: http://www.sxagc.com.cn China Email: cgwebechanggang com Tel: +86 355 508 6633 Website: http://www.changgang.com Shinjingshan Road Shingjingshan District, Beijing, 100041 China Email: bbtgmail.shougang.com.cn Tel: +86 88291114 Website: http://www.shougang.com.cn
5

Shaanxi Longmen Iron & Steel (Group) Co., Ltd (includes Hangzhong Iron and Steel)

Shandong Iron and Steel Group Co., Ltd.

Shanxi Zhongyang Iron and Steel Co., Ltd.

Shougang Changzhi Iron & Steel Ltd Changzhi, Shanxi, 47100

(includes Shougang Qian'an)

Shougang Group

Shougang Tonggang Group

Tangshan Iron and Steel Group Company Limited

Tempo International Industry Co., Ltd.

Tianjin Iron & Steel Group Co., Ltd

Tianjin Rockcheck Steel Group Co., Ltd.

Tonghua Iron and Steel International Building, No. 3218 Yatai Avenue B Changchun, Jilin Province, 130022 China Wesbite: http://www.jllg.com.cn/ No. 9 Riverside Road Tangshan City, Hebei Province, 063016 China Website: http://www.tangsteel.com.cn/indexl.isp Shenzhen Road, Laoshan District, Qingdao Shandong China Tel: +86 0532 8887 6338 Website: www.temposteel.com 398 Jingtang Road Dongli District, Tianjin, 300301 China Tel: +86 22 2470 6800 Fax: +86 22 2470 6820 Website: http://www.tgsteel.com Metallurgical Industry Area Gegu Town Jiannan District, Tianjin China Email: newsgrockcheck.com

Tel: +8122-58663680
Tianjin Tiantie Metallurgical Group Website: http://www.rockcheck.com Shexian Hebei Province, 056404 China Email: ttxwzx@163.com Tel: +86 310 397 0114 Website: http://www.tiantie.com Yangdi Opposite, North of Yinhe Bridge Beichen District, Tianjin China Email: zhaowg962g126.com, zhaowg962gyahoo.com Tel: +86 135 02183107 Fax: +86 222 6418488 Wesbite: http://titiantiesteel.com/main.aspx

Tianjin Tiantie Zhaer Steel Production Co., Ltd.

Tonghua Steel Group

Block B No. 3218 Yatai Street Tong Gang International Building Changchun, Jilin Province, 130022 China Email: iltg_gjltg.com.cn Tel: +86 431 88623000

Fax: +86 431 88623888

Weifang Special Steel Group Co., Ltd Website: http://www.iltg.com.cn East of Weifang Road Steel Industrial Zone Weifeng City, 261201 China Email: sales@weifangsteel.com Tel: +86 536 767 1810 Fax: +86 536 767 1810 Website: http://www.weifangsteel.com No. 3 Yangang Road Qingshan District

Wuhan Iron & Steel Co., Ltd. (Wuhan Iron & Steel (Group) Corp.)

(WISCO)

Wuhan City, Hubei Province, 430083

China Tel: +86 27 8680 7870, +86 8680 7873 Fax: +86 27 8680 7875 Website: http://www.wisco.com.en North Chongyisi Street Wuanshi, Hebei Province, 56300 China Tel: +86 310 575 2581 Fax: +86 310 573 9689 Website: http://www.vuhuasteel.com Xilin District Yichun City, Heilongjiang Province, 153025 China Email: xlgtitgl26.com Tel: +86 458 378 8334 Fax: +86 458 3716007 Website: http://www.xlsteel.com.cn 262 Gangtie Nan Street Xingtai City, Hebei, 54027 China Email: office@xtsteel.com Tel: +86 3 19 204 2022, +86 319 204 2183 Fax: +86 319 262 4517 Website: http://www.xtsteel.com

Wuanshi Yuhua Steel Co., Ltd

Xilin Iron & Steel Group

Xingtai Iron & Steel Co., Ltd

Xinyu Iron & Steel Co., Ltd

Yanjin Road Xinyu City, Jiangxi Province, 338001 China Email: xgxxygxinsteel.com.cn Tel: +86 790 629 0782 Website: http://www.xinsteel.com.cn

Exhibit GEN-6

U.S. Imports of Carbon and Alloy Steel Wire Rod Annual 2011-2013" Quantity in Short Tons , Value in U.S. Dollars, AUV in $/ton
Quantity

2011 China All Others Total 144

1,253,534

2012 241,938
1,276,956

2013 614,402 1,100,260 1,714,662

1 , 253,678 Value 2011

1 , 518,894

China All Others Total

143,155 1,076,369,396 1,076 , 512,551

AUV

2012 137,591,869 1,044,946,658 1 , 182,538 , 527

2013 311,399,286 838,367,731 1,149,767,017

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 International 16510 Northchase Dr. Houston, TX 77060

6.

Tel: 281-999-9995
Fax: 281-999-4143 Email: no email address found Website: www.ferrostaal.com 2. Commercial Metals Company (Cometals) 6565 N. MacArthur Blvd., Suite 800 Irving, TX 75039 Tel: 214-689-4300 Fax: 214-689-5886 Email: no email address found Website: www.commercialmetals.com G3 Steel Group, LLC 1633 Kirkton Drive Troy, MI 48083 Tel: 248-524-0192 Fax: 248-524-0406 Email: no email address found Website: no website found King Steel Corporation 5225 E. Crook Road Grand Blanc, MI 48439 Tel: 810-953-7637 Fax: 810-953-1718 Email: nlamphere@kingsteelcorp.com, dscribnerkkingsteelcorp.com Website: www.kingsteelcop2.com Kurt Orban Partners LLC 111 Anza Blvd., Suite 350 Burlingame , CA 94010 Tel: 650-579-3959 Fax: 650-579-3965 Email: markna,kurtorbanpartners.com Website: www.kurtorbanpartners.com

Macsteel International USA Corp. 801 Twelve Oaks Center Drive, Suite 806 Wayzata, MN 55391 Tel: 952-249-1542 Fax: 952-249-0837 Email: tkgmit r.com Website: http://macsteelintemational.com Stemcor USA Inc. 350 Fifth Avenue, Suite 1526 New York, NY 10118 Tel: 212-563-0262 Fax: 212-563-0403 Email: newyork&stemcor.com Website: www.stemeor.co.uk Tata Steel International Americas 475 North Martingdale Road, Suite 400 Schaumburg, IL 60173 Tel: 847-619-0400 or 800-542-6244 Fax: 847-619-0468 or 207-975-8499 Email: TSIA(cr^,tatasteel.com e Website: hftp://www.tatasteelamericas.com/en/ Insteel Wire Products Company 1373 Boggs Drive Mount Airy, NC 27030 Tel: 336-786-2141 Fax: 336-786-2144 Email: hwoltzginsteel.com Website: www.insteel.com

7.

3.

8.

4.

9.

5.

EXHIBIT GEN-7 U.S. IMPORTERS OF CASWR FROM CHINA

10. Duferco Steel Inc. 101 Matawan Road, Suite 400 Matawan, NJ 07747 Tel: 732-566-3130 Fax: 732-583-9406 Email: duferco(,duferconj.com, duferco@dufercosteel. com Website: www.duferco.com Hanwa American Corp. 18100 Von Karman, Suite 320 Irvine, CA 92612 Tel: 949-955-2780 Fax: 949-955-2785 Email: no email address found Website: www.hanwa.co.ip Metals Solutions LLC 31105 Bainbridge Road, Building 4 Solon, OH 44139 Tel: 440-349-9304 Fax: 440-349-9305 Email: purchasing@metalssolutions.com Website: www. metals -solutions.com Precision Metal Services, Inc. 418 Stump Road Montgomeryville, PA 18936 Tel: 215-661-0225 Fax: 215-661-0366 Email: pms ,precisionmetalservices.com Website: www.precisiomnetalservices.com Uniwire International Ltd. 509 Madison Ave., Suite 902 New York, NY 10022 Tel: 212-688-1565 Fax: 212-688-2311 Email: sales@uniwire.com Website: www.uniwireintemational.com 17. 15. Baosteel America Inc. 85 Chestnutridge Road Montvale, NJ 07645 Tel: 201-307-3555 Fax: 201-307-3358 Email: bai@baosteelusa.com Website: www.baosteelusa.com Bekaert Corp. 1395 South Marietta Parkway, Building 700, Suite 708, Marietta, Georgia 30067 Tel: 770-421-8520 Fax: 770-421-8521 Email: no email address found Website: www.bekaert.com/en.aspx Alliance Wire and Steel, Inc. 9500 West Commerce Street San Antonio, TX Tel: 210-892-0472 Fax: 210-892-0477 Email: no email address found Website: www.alliance-wire.com Metal One America, Inc. 6250 N. River Road, Suite 20155 Rosemont, IL 60018 Tel: 847-685-5446 Fax : 847-685-5430/5440 Email: darek.kusnierewiczgmtlo.com Website: www.metaloneamerica.com United Springs, Inc. 6455 Canning Street Commerce, CA 90040 Tel: 323-728-8188 Fax: 323-728-8777 Email: info@unitedspringsinc.com Website: http://unitedspringsinc.com

16. 11.

12.

18. 13.

19.

14.

EXHIBIT GEN-7 U.S. IMPORTERS OF CASWR FROM CHINA

20. M&H Metal International Packard Place, Suite 100 222 South Church Street Charlotte, NC 28202 Tel: 864-230-4114 Fax: 864-653-5598 Email: sales&mandhllc.com Website: http://haltman.wix.com/mandhllc Stena Metal Inc. 1 Landmark Square, Suite 720 Stamford, CT 06901 Tel: 203-357-0111 Fax: 203-964-8443 Email: matt. siege lkstenametal.com Website: htti):Hstenametaline.com/ ThyssenKrupp Steel Services 22355 West Eleven Mile Road Southfield, MI 48034 Tel: 248-233-5600 Fax: 248-233-5699 Email: no email address found Website: www.tkmna.com

21.

22.

Ex hib it I N J - 1

Monthly U.S. Imports of CASWR from China (quantity in short tons) Quantity China All Others Total Dec-12 53,401 69,307 122,708 Jun-13 66,145 77,219 143,364 Jan - 13 54,185 81,797 135,981 Jul-13 81,892 109,575 191,467 Feb-13 19,457 84,660 104 , 117 Aug-13 25,502 85,778 111,280 Mar - 13 36,572 83,808 120 , 379 Sep-13 81,839 82,570 164 , 409 Apr - 13 23,446 103,454 126 , 900 Oct-13 62,226 84,870 147 , 096 May-13 69,413 137,654 207,068 Nov- 13 12 Month Total 42,524 616,603 77,189 1,077,879 119,713 1,694,482

China All Others Total

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

Prepared by Georgetown Economic Services

Exhibit INJ-2

RANGED DATA
CASWR VOLUMES AND MARKET SHARES Annual 2011 - 2013
PUBLIC VERSION

2011 Import Volume (in short tons) China All Others Total U.S. Shipments Apparent Domestic Consumption Market Share of: Imports from China [ [

2012

2013*

144 1,253,534 1,253,678

241,938 1,276,956 1,518,894

614,402 1,092,673 1,714,662

4,gOt^,000^

Imports 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, for 2011, 2012 and January-November 2013 (annualized to estimate full year 2013 imports).

Prepared by Georgetown Economic Services

Exhibit INJ-3

PUBLIC VERSION NOT OTHERWISE SUSCEPTIBLE TO SUMMARY

CASWR LOST SALES

Detailed Product Description Quantity ( short tons) Price) $P per ton ($ Import Country price of Origin ($ per ton)

Customer name and contact information

Address

Date of Quote

Page 1

Ex h ib it IN J -4

RANGED DATA
U.S. CASWR Producers' Trade and Financial Data Annual 2011-2013 ( Quantity in short tons, Value in $1,000 , Average Unit Values ("AUV") in $/short tons)

PUBLIC VERSION

Trade Data: Capacity Production Capacity Utilization U.S. Shipments (Q) U.S. Shipments (V) U.S. Shipments (AUV) Production and Related Workers Financial Data: Net Sales M Operating Income Operating Income to Net Sales Ratio

2011

2012

2013

% Change 2011-2013

S,o^,DOo

t Soo

t soo

14CO

Capacity, production, shipments, employment, net sales, and operating income data represent actual data reported by Source: AMUSA, 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 . aggregated these data for purposes of this petition. I compiled and

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 M

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Wire Rod 2013 -10-16
:3464 3450

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3343.00 3345.00 3345.00 3345.00 3352.00 3361.00

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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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Monday 0111312,014

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Chinese wire rod export price moves down (30/09/2013) BEIJING, 30 Sep 13 - The export price of wire rod in China is on a downward trend at present with that of SABI008 06.5-1 Onus (boron added) at USD525-545/t FOB main ports in North China. Observers 'redict that the price will go down slightly in coming days of this week, A wire rod exporter in Tangshan, Heibei Province said that the last offer for SAE1008 06.5-10ntm (boron added) last Friday was USD525A FOB Tianjin Port, down by USDIOA compared with that of wo weeks ago, and he thought the price is likely to go down further phis week, "The domestic market gets worse and the price keeps going down, so exporters have to lower offers," said the source. The price of wire rod HPB235 06.5-iOntni from Aujiang Steel in Tangshan has decreased by RMB180/t since early September, and the current. price is RMB3,240-3,260/t (VAT included). Therefore, exporters have nothing to do but reduce offers. Considering the dim domestic market and the downward price trend, the source deemed that the export price will move down again 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.

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The source mainly deals with products from Tangshan Steel, and the milt kept its export offer as high as USD545/t FOB Tianjin Port last month, but domestic market price went down greatly recently, so the still cut the price to a normal level. Meanwhile, seeing the downward price trend, more overseas buyers prefer to watch the market and wait for a further price decline, and few of them place orders now. The source said he only took small 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

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rod milli

(23'1012013)

Shougang Qian'an Iron & Steel (Qiangang), a subsidiary of Shougang Group in northern China's Hebei province, plans to bring on stream a. wire rod mill at the end of November. The mill is the relocated No. i wire rod mill from Shougang's old site in Beijing 's Changping district. The mill, with a capacity of about 500,000 metric tons ` /vear, had been sourcing billets from Qiangang after Shougang closed its major steel making operation in Beijing s Shijingshan district at end-2010, according to a source with Qiangang. This line, Shougang's last longs product mill in Beijing, 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 for construction uses, medium carbon wire rod for processing and welding rod, and wire rod for tyre cord. After the relocation, 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 silicon sheets. The plant currently boasts a crude steel making capacity of about 8 million mt/y. Li Fu Source: steelbb.com
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Sou th Korean stainless scrap i:npor price P-reases (25!12/2013)

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

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KO BELE
Press Releases

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 Ii res ca i China starts c

U
March 14, 2013

TOKYO: March 14, 2013 - Kobe Steel , Ltd. announces that its joint venture , Kobelco Spring Wire ( Foshan ) Co.: Ltd. ( or KSIAO , has started operations in China. KSW began production of steel wire for high-quality springs in February . After obtaining product approval from its customers . KSW will go into commercial production. KS'Af w as established in January 2012 in Foshan , Guangdong Province to produce and sell steel wi!e for high-quality springs . Capitalized at 1.3 billion yen , the company has a production capacity of 600 metric tons per month . KSW is 50% owned by Kobe Steel through subsidiary Kobelco 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 is forecast to expand considerably over the medium - to long - term future, reaching 28 million cars in 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 , raising the need for the local sourcing of parts . To meet this demand , the world ' s major spring manufacturers 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 demand for 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 for steel wire . It has earned high marks from automakers in Japan, the United States and Europe for 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 quality spring products. Kobe Steel already has two companies in Thailand , one in the United States , and three in China that process steel wire rod for suspension springs and CHQ (cold heading quality) wire rod for fasteners . Through KSW , Kobe Steel , along with the equity participation and cooperation of wire rod processors . is strengthening its wire processing base and building a global supply network to supply high - quality special steel products.

Background Information
Profile of Shinko Wire Company; Ltd. Location: Established : President : Capital: Shareholding : Amagasaki , Hyogo Prefecture, Japan march 1954 Takanori Kominami 8,062 million yen Kobe Steel, Ltd. 30. 71%, treasury shares 11.24%. Shinko Wire client stock ownership 3.77%, Metal One Corporation 3.35%, Mizuho Bank, Ltd. 2.57%, other 48.36`/0 About 800 ( consolidated) Manufacture and sale of steel wire, wire rope and other products

Employees : Business :

Profile of Suncall Corporation L ocation: Established : Kyoto, Japan June 1943

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

I /13/2014

President & C.E.O.: Capital Shareholding:

Shigetsugu Yoshida 4;808 million yen 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: Business:

About 2,070 (consolidated) Manufacture and sale of automotive parts, electronic and informationrelated products, and optical communication devices

Kobelco (China] Holding Co.; Ltd. Location: Established: President: Capital: Shareholding: Employees: Business: Shanghai, China January 2011 Hiroshi Umeda USS59.44 million Kobe Steel, Ltd. 100% 22 China headquarters

d pageS ReIate'
U Iron & Steel , ire company in China to increase capital, plans to start up in Kobe Steel's steel v February

KOBE S

TEEL., LT

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-,..

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Dec 25, 2012 Source: SleelOrbis

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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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IBM
myste'I.com

A A+%-N AMAM
2012 - 11-01 14:40

an
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http://gangpi.mysteel.com/12/1101/14/D5BF33F3C39536FA.htm]

1/23/2014

(Translation)

12/2/13 recently

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

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 and 600,000 MT, respectively. However, due to the recent weak market, neither production line reaches 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

Page 4 of 6

SIEMENS
> IIome > Press Industry Sector / Metals Technologies

Siemens wire rod mill boosts capacity for Chinese steelmaker

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 in collaboration 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 laying head . 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 reach speeds of 112 meters per second. The mill will produce 5 mm to 22 mm plain rod. Hanzllonglf9 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 mills 9 to conso i ate the Province ' s steelmaking production for the local market . After all restoration projects are complete, the company merged vnih Hanz ong m expects 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 industrial customers . With end-lo-end automation technology and industrial software, solid vertical - market expertise , and technology- based services , the Sector enhances Its customers ' productivity , efficiency , and flexibility . With a global workforce of more than 100,000 employees , the Industry Sector comprises the Divisions Industry Automation , 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 metallurgical Industry . The Business Unit offers a comprehensive technology , modernization , product and service portfolio as well as Integrated automation and environmental solutions covering the entire lifecycle of plants . For more information , visit htlo :11 w w.siemens . com1metals
Reference Number: IMT201209140e Share this page

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Min Steel to commission 1,260 cubic ureter blast furnace

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It is reported that Heilongjiang Province-based Chinese steelmaker Min Iron and Steel Group 1,260 cubic meter blast furnace on which construction was completed last year will be commissioned in early April. The designed annual output capacity 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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1/23/2014

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

Addition of New Finishing Mills to Almost Double Production Speed for Chinese Steel Maker
Published on October 16, 2011 at 7:58 PM

Chinese steel producer Shanxi Zhongyang Iron and Steel Company Ltd. (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 .`i1111s, 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

Ticker

TP

Rating HOLD ` BUY*

SELL HOLD BUY

Angang Steei A,
Maanshan I&S-H Maanshan l&S-A Baosleer-A

347 HK HK$5.21 4 000898 CH : RMB5 .80a 323 HK HK$2.00*,

600808 CH 600019 CH RMB2.604 RMB6.20

Dim demand outlook with ST upside

Given our expectation that China ' s economy will inevitably enter an era of slow growth in 2012 with prolonged tightening policies on the property market, the steel industry can hardly remain immune. We maintain our NEUTRAL rating on the sector as we see opportunities for steel price rebounds In the near term due to : ( i) steel prices having dropped to the production cost level; ( ii) the gradual resumption of construction projects post - Chinese New Year (CNY); and (iii) the recent loosening of monetary policy , which is providing impetus for steel traders in China and thus driving up overall steel demand . Angang remains our preferred stock for H shares and we see Baosteel as our top pick for A shares. Expecting Slow Demand Growth of 2.8% YoY in 2012

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 Maanshan I&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. ,

Overcapacity should remain a headache for steelmakers over the next two years. Our bottom-up approach leads us to expect 2.2 % YoY growth only, much slower than FYI Is almost 10 % YoY growth.
Except for the home appliance and machinery sectors ( for which we expect 10%YoY growth in steel consumption ), demand from other sectors should rise mildly while that from the construction sector should remain flat overall, The outlook on exports remains dim due to the lack of incentives for steelmakers and lacklustre demand. On the other hand, we believe crude steel capacity will continue to expand by 30m tonnes (4% YoY) to 830m tonnes in 2012, assuming 68 . 66m tonnes of new capacity and 30m tonnes of capacity elimination.

Key 'Catalysts /Evetits

Steel prices have dropped to the production, cost.

Recent loosening of monetary policy could provide

impetus for steel traders in China, thus driving up the overall demand.

Both ASP and Cost should Decline; Limited Room for Margin Squeeze m Impacted by the economic slowdown and contracting property construction market, we expect steel prices to fall 3-6% YoY and flat steel to outperform long steel in 2012. We believe iron ore import prices peaked out in 2011 due to a gradually narrowing gap between global demand and supply, We project the Australian benchmark price to fall 8% YoY in 2012. m In November 2011, the average net margin for major medium to large-size steel 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 with many developed countries like Germany, Italy, Japan and South Korea. Given China's relatively higher GDP and FAT growth potential, we believe there is still room 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, it remains on top of the agenda in the 12th 5YP period, in which the government aims to raise the top 10 concentration ratio from 49% in 2010 to 600/0 by 2015. Crude steel demand should reach 750m tonnes by end-2015, implying a 3.7% CAGR within FY11-15E.

BOCI Research Limited Metals & Mining : Iron & Steel Michelle Leung (852) 3988 6431 michelle.leung@bocigroup.com

Angang Steel Top Pick; Maintain SELL on Maanshan I&S (H)

* We maintain HOLD on Angang H shares but upgrade A shares from HOLD to SUYwith 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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IIOC INTERNATIONAL

49

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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 This document may not be distributed in or into the PRC.

0", g1l

.130C INI'1;RNA"TIONAL

t 49- 0q M'

2012 STEEL INDUSTRY OUTLOOK

Overcapacity to Persist
Our macro economy team expects FAI growth to slow from -23.8 % in 2011 to 16-17% in 2012 and to 14-15% in 2013. We expect steel demand growth to follow a similar trend

While we expect China's economy to inevitably enter an era of slowing growth in 2012, given the prolonged tightening policies over the property market, the steel industry can hardly remain immune from the moderating macro-economy.
We forecast crude steel demand will post significant growth slowdown to 2,8% YoY, totalling 667m tonnes in 2012. Output should rise 2.2% YoY to 697m tonnes, implying over 115m-133m tonnes of excess capacity, equivalent to 14-16% of total production capacity. Our macro-economy team expects FAI growth to slow from 23.8% in 2011 to 16-17% in 2012 and to 14-15% 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 at high levels in 2012, but steel price averages should be slightly lower than those in 2011. The profitability of steel companies appears even grimmer, and the industry as a whole should continue to struggle along with meagre profits.

Under the 12th 5YP for the steel industry, the top priority of the industrial reform will be to improve the industrial concentration ratio, to tighten the controls over steel resources in the upstream and to develop the special steel and new material sectors.
Figure 4. BOCI Steel Demand and Supply Forecasts
(mt) Crude steel capacity 2005 424, 2006 49,1 2007

Changes W growth
Crude steel production yoygrowm Capacity utilisation Imports of finished steel Exports of finished steel Net import (expod) Implied steel consumption Yoygrowth

0
0% 353 83% 26 21 5 339

67 16%
419 18.5% 85% 19 43 (25" 374

541 50 10%
490 16.9% 91%0 17 . 63

2008 660.

2009 700

2010 764.'

2011 800

2012E 830

2013E 850

119 22%
500

40 6%
_566 13.1% 81%

64 9%
623 10.1%
82%

36

30 4%
697 2.2% 84% 16 46

20 2%
735

2.2% 76%
15. 59 (44) 456

682 9.5%

5.5%
86%

85%
16 49 (3;) 649

18 :
.. 25 (7) 561

(46)
415

16 43 (26) 596

16
46 (30) 705

(30)
667

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 This document may not be distributed in or into the PRC.

BBC INTERNATIONAL
Figure 5. Steel Price Trend by Product (FY09-11) (RM8/Q 6,500 6,000 5,500 5,000 4,500 4,000 3,500 3,000 -- -- - o 0 0 0 0 o 'O o 0

- - - -25mnRebar 20nm medium and thick plats Source: wwwousleal.com, BOG Research estimates

- 6.5mmwirerods - -1rrmCRC

Figure 6. Steel Demand YoY Growth Trend by Product (2009-11)

^ O O

07 d^ O7 m ^ O O O O O M try ^ C, O O O O ^--

O O

O O

O O O O in iz Q) n M O O O e- O O O- O O

r.. - - Rebar CRC I

Wire rods - Medium plate

HRC Galv and coated plat

Source: wwwsteelease .corn, BOO Research estimates

Crude Steel Capacity to Reach 830m tonnes i n 2012E

Senall-sized steel mills (1, 000-2, 000 cu n?) will be the major growth driver account fng for 74% of total near capacity in 2011-12

China crude steel production capacity reached 764m tonnes by end-2010 and approximately 800m tonnes by end-2011 according to our estimates that take into consideration 61,36m tonnes of crude steel capacity additions and around 25m tonnes of outdated capacity eliminations . By 2013 , crude steel capacity may reach 850m tonnes. Based on our channel checks , there will at least be 30m tonnes of new capacity commissioning in 2012. Within this, small-size mills will be the major growth driver accounting for 74% of total new capacity in 2011 - 12. Long steel capacity should rise sharply during 2012, with the newer- added capacity and re ar . perhaps reaching . 10.75m . tonrlcs and_9.68m tonngs for wirer , r_epresen^in-g 9% and 6 ,0 11 &apacity. The capacity of respectively, hot-ro ea -coil ( HRC) and that of medium plate should increase by 10m tonnes and 3m tonnes , respectively , representing 3.7% and 4.4% of 2011E capacity. The newly-added capacity of cold-rolled coil ( CRC) may reach 9m tonnes in 2012 , 5.2% of 2011E capacity.

1 February 2012

2012 Steel Industry Outlook This document may not be distributed in or into the PRC.

0)

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I'_i OC I INTERNATIONAL
Figure 7. Capacity and Capacity Utilisation in China Steel Industry (rnt) 900 800 700 600 500 400 .;. 300 200 100 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 1H10

2H10 Design capacity

(mt)
12
26 117

18.18
41.75 .130

.HoH % 2010 1H11 2H11 HoH %

2011

38 18
27

yoy%
2012E and afterwards Source: www..custeel.coni

50 45 18.4
>20

57.23 23.13 41.46 79

64,59

12.8
>30.00

Figure 9. New Production Lines and Capacity at Steel Mills ( 2011-12)

Type Quantity Wire rod 15 lines 15 lines 4lines 4 lines 33 lines 12 lines 2011 Capacity Quantity 16 lines 2012 Capacity

(mf)
9.90

(mt)
10.75

Rebar
HRC Medium plate CRC Galvanised plate

11,85
8.40 7.30 18.44 10.17

8lines 5.11nes
1 line 23 lines 10 lines

9.68
10.00 3.00 9.00 4.85 1.60 48.88

Silicon steel
Total Source: China UniledSleel

9 lines
92 lines

2.60
68.66

6 lines
70 lines

High Correlation between Output and Profitability

Based on the data range of 2002-11 as shown in Figure 10, we see a positive correlation between steel industry profitability and steel output growth. Given the poor profitability at present, we expect output growth to decelerate in the near term. In November 2011, the total net profit of major large and medium-sized enterprises amounted to RMB1.22bn with net margin as low as 0,43% and loss ratio (number of loss making enterprises/ total number of enterprises) increasing to 39%.
1 February 2012 2012 Steel Industry Outlook This document may not be distributed in or into the PRC. 8

11

BOC INTERNATIONAL
Figure 34. Railway FAI (RMB bn) 8,000 7,000 j 6,000 5,000 4,000 3,000 2,000 1,000 0
(%)

500

0
In t0 CO ice . n !^ oO O` OO m O Q O O F c> O N co O c" J 0 0 0 0 0 ^ W O O h .^-

M M M V' V 'cY to V^ O O ^O O ^7 ^ O `O N CD O M 1V oD O O '-- 0 C, .- O O

+; O O O ^O) ^ in ^ O O O O O

tsGt`_ (100)

3;!Kw FAI in railway aansport(LHS)

Source.* WIND Database, 80CI Research

- Cumulative YoY growth (RHS)

Exports should Remain Stable

Bogged down by the sovereign debt crisis, the European economy suffered an acute downturn in 2011. It even sparked similar situations in South Africa and some other underdeveloped countries, In 2012, the global economy should continue to encounter difficulties and uncertainties. The president of the IMF has recently stated that the growth rate of the global economy in 2012 is now estimated at less than 4%. Given the dim demand in the US and Europe amid the high-cost environment, the exports of Chinese steel face quite 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 discounts in export prices. According to steelease .com, the steel exports premium for major steel products were mostly negative as of October 2011 as shown in Figure 35.

Figure 35. Export Premium of HRC and Wire Rod 77re continuously negative export premium for HRC in 2011 implies little incentive for exports (RMB/Q 400 . 300 200
100 0

(100)
) (200.
0 0 Z 0

0 N N M

a i5

izz

oO

m O

m HRC
Source: www.steelease.com, 80CI Research

Wire rod

1 February 2012

2012 Steel Industry Outlook This document may not be distributed in or into the PRC.

19

@ t ^K 14

130C INTERNATIONAL
OEM

F11 1-

Slight Drop in Steel Price in 2012E Compared with 2011 After a sustained and pronounced fall, the steel price will remain low and steel inventorywill stay high in 2012E. To sum up our judgment of the supply and demand situation in the steel market, we expect a slight decline in the average steel price and greater fluctuations in 2012 than in 2011. Meanwhile, we reckon that a boost in demand is likely post-CNY, and the construction ramp-up for social security housing in 3Q11 could provide a boost to the steel price.

Figure 36. Steel Price Forecasts

Category Rebar

2012E
2011

Avg. price (RMR4) '4;460

4,734

YoY (%) {6)

13

Wire rod YoY Avg. price (RMB/I) (%)

HRC YoY ; Avg price (%) (RMB11)

CRC YoY ; Avg. price (%) (RMB11)

:::4,485
4,771 4,253

(o)
12

4,438`
4,672

(5)ti.
10

5,352
5,518

(3)
(2)

2010

4;179

4,251

5,606

Medium plate t Avg. price YoY (RMB11) (%J 4,513 (5) 4,750 8 4,384

Source: wwwcusleelcom, BOCI Researd?

Figure 37. Steel Inventory

(mq 2,000 ,
1,500 - - - -

0
CO O M 0 Cp O 8 0

O CO r` ti r` ao co co co m m m m O O O CD O O O O O O O O O O O O O O N M co O> M N M CO CD N Ch CO M N M Co M N M 0 0 0 0 ^'- O O O ^- O O O .- O O O O O O

- - - Total inventory
Source. www.custeel.com , BOO Research

tong steel

Flatsfeel

v.

1 February 2012

2012 Steel Industry Outlook This document may not be distributed in or into the PRC.

20

THE REMAINDER OF THIS BUSINESS PROPRIETARY EXHIBIT CONTAINS PROPRIETARY RESEARCH AND DATA ON THE CHINESE CASWR INDUSTRY AND IS NOT SUSCEPTIBLE TO SUMMARIZATION AND THEREFORE IS NOT PROVIDED WITH THIS PUBLIC VERSION