Slip Op. 08-74
UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
________________________________________
:
NUCOR CORPORATION, :
:
Plaintiff, :
:
v. :
: Court No.
UNITED STATES, : 07-00070
:
Defendant, :
:
and :
:
CORUS GROUP PLC, AG DER DILLINGER :
HÜTTENWERKE, SALZGITTER AG STAHL UND :
TECHNOLOGIE, THYSSENKRUPP STEEL AG, :
COMPANHIA SIDERÚRGICA PAULISTA, :
USINAS SIDERÚRGICAS DE MINAS GERAIS SA, :
and DUFERCO STEEL, INC., :
:
Defendant-Intervenors. :
________________________________________:
Held: Plaintiff’s motion for judgment upon the agency record
denied. The United States International Trade Commission’s final
determination affirmed.
Wiley Rein LLP, (Alan H. Price; Timothy C. Brightbill) for
Plaintiff, Nucor Corporation.
James M. Lyons, General Counsel; Neal J. Reynolds, Assistant
General Counsel, Office of the General Counsel, United States
International Trade Commission (Mary J. Alves; David B. Fishberg),
for Defendant, United States.
Steptoe & Johnson LLP, (Gregory S. McCue; Richard O.
Cunningham; Michael A. Pass) for Defendant-Intervenor, Corus Group
PLC.
Court No. 07-00070 Page 2
DeKieffer & Horgan, (Marc E. Montalbine; J. Kevin Horgan;
Merritt R. Blakeslee) for Defendant-Intervenors, AG der Dillinger
Hüttenwerke, Salzgitter AG Stahl und Technologie and ThyssenKrupp
Steel AG.
Vinson & Elkins LLP, (Christopher A. Dunn; Valerie S. Ellis)
for Defendant-Intervenors, Companhia Siderúrgica Paulista
(“COSIPA”) and Usinas Siderúrgicas De Minas Gerais SA
(“USIMINAS”).
Dated: July 9, 2008
OPINION
This matter is before the Court on motion for judgment upon
the agency record brought by plaintiff Nucor Corporation (“Nucor”
or “Plaintiff”) pursuant to USCIT Rule 56.2. Plaintiff challenges
aspects of the negative final determination by the United States
International Trade Commission (“Commission” or “ITC”) in the five-
year sunset reviews pursuant to 19 U.S.C. § 1675(c)(1)1 concerning
cut-to-length (“CTL”) steel plate products from Belgium, Brazil,
Finland, Germany, Mexico, Poland, Romania, Spain, Sweden, Taiwan
and the United Kingdom.
1
19 U.S.C. § 1675(c)(1) provides:
5 years after the date of publication of . . . a
countervailing duty order . . . an antidumping duty
order . . . the Commission shall conduct a review
to determine, in accordance with section 1675a of
this title, whether revocation of the
countervailing or antidumping duty order . . .
would be likely to lead to continuation or
recurrence of dumping or a countervailable subsidy
. . . and of material injury.
Court No. 07-00070 Page 3
JURISDICTION
The Court has jurisdiction pursuant to 28 U.S.C. § 1581(c)
(2000) and 19 U.S.C. § 1516a(a)(2)(A)(i)(I) and (B)(iii) (2000).
BACKGROUND
Plaintiff Nucor challenges the Commission’s negative final
determination in the five-year “sunset” reviews concerning CTL
steel plate products from Belgium, Brazil, Finland, Germany,
Mexico, Poland, Romania, Spain, Sweden, Taiwan, and the United
Kingdom.
On November 1, 2005, the Commission instituted five-year
sunset reviews of the countervailing duty order and antidumping
duty orders on certain carbon steel flat products from eleven
subject countries. See Certain Carbon Steel Products From
Australia, Belgium, Brazil, Canada, Finland, France, Germany,
Japan, Korea, Mexico, Poland, Romania, Spain, Sweden, Taiwan, and
the United Kingdom, 70 Fed. Reg. 62,324 (Oct. 31, 2005). Effective
February 6, 2006, the Commission determined to conduct full reviews
pursuant to section 751(c)(5) of the Tariff Act of 1930, 19 U.S.C.
§ 1675(c)(5). See Certain Carbon Steel Products From Australia,
Belgium, Brazil, Canada, Finland, France, Germany, Japan, Korea,
Mexico, Poland, Romania, Spain, Sweden, Taiwan, and the United
Kingdom, 71 Fed. Reg. 8,874 (Feb. 21, 2006).
The final determination was issued by the Commission on
Court No. 07-00070 Page 4
January 25, 2007 and was published in the Federal Register on
January 31, 2007. See Certain Carbon Steel Products From
Australia, Belgium, Brazil, Canada, Finland, France, Germany,
Japan, Korea, Mexico, Poland, Romania, Spain, Sweden, Taiwan, and
the United Kingdom, 72 Fed. Reg. 4,529 (Jan. 31, 2007). The
determinations and views of the Commission are contained in Certain
Carbon Steel Products From Australia, Belgium, Brazil, Canada,
Finland, France, Germany, Japan, Korea, Mexico, Poland, Romania,
Spain, Sweden, Taiwan, and the United Kingdom, Confidential Views
of the Commission (“Views”), Invs. Nos. AA 1921-197 (Second
Review); 701-TA-319, 320, 325-327, 348 and 350 (Second Review); and
731-TA-573, 574, 576, 578, 582-587, 612, and 614-618 (Second
Review), USITC Pub. No. 3899 (Jan. 2007).
In the final determination, the Commission determined that
revocation of the antidumping duty and countervailing duty orders
on subject countries would not be likely to lead to continuation or
recurrence of material injury to the domestic CTL plate industry.
The Commission also determined to decumulate subject imports from
Romania upon finding that such subject imports would likely compete
in the U.S. market under different conditions of competition from
other subject imports. See Views at 4. In addition, the
Commission determined that the volume of cumulated subject imports
from the remaining nine subject countries (“cumulated subject
countries”) would not be significant should the orders be revoked,
Court No. 07-00070 Page 5
and that revocation of the orders would not result in any
significant price effects and would not likely have a significant
impact on the domestic industry within the reasonably foreseeable
future. See id.
Plaintiff challenges each of these determinations arguing
that they are unsupported by substantial evidence and otherwise
contrary to law.2 See R. 56.2 Mot. And Supporting Br. Of Nucor
Corp. (“Pl.’s Br.”) at 4. The Commission responds that its
negative sunset determinations are supported by substantial
evidence and otherwise in accordance with law and requests that the
Court affirm them. See Mem. Of Def. United States International
Trade Commission In Opp’n To Pl.’s Mot. For J. On The Agency R.
(“ITC Mem.”) at 1. Defendant–Intervenors’ arguments are not
addressed separately where they parallel those of the Commission.
See Resp. Of Defendant–Intervenors Corus Group, PLC, AG der
Dillinger Hüttenwerke, Salzgitter AG Stahl und Technologie and
ThyssenKrupp Steel AG, In Opposition to Pl.’s Mot. For J. On the
Agency R. (“German-UK Resp. Br.”); Resp. Of Defendant–Intervenors
Companhia Siderúrgica Paulista (“COSIPA”) and Usinas Siderúrgicas
De Minas Gerais SA (“USIMINAS”) To Pl.’s R. 56.2 Mot. (“COSIPA &
USIMINAS Resp. Br.”).
2
Nucor does not object to the Commission’s determination
to decumulate Mexico.
Court No. 07-00070 Page 6
STANDARD OF REVIEW
When reviewing ITC determinations in sunset reviews “[t]he
court shall hold unlawful any determination, finding, or conclusion
found . . . to be unsupported by substantial evidence on the
record, or otherwise not in accordance with law.” 19 U.S.C. §
1516a(b)(1)(B)(i). “Substantial evidence is more than a mere
scintilla.” Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938).
“Substantial evidence is ‘such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion.’” Huaiyin
Foreign Trade Corp. (30) v. United States, 322 F.3d 1369, 1374
(Fed. Cir. 2003) (quoting Consol. Edison Co., 305 U.S. at 229). In
determining the existence of substantial evidence, a reviewing
court must consider “the record as a whole, including evidence that
supports as well as evidence that ‘fairly detracts from the
substantiality of the evidence.’” Huaiyin, 322 F.3d at 1374
(quoting Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1562
(Fed. Cir. 1984)).
DISCUSSION
I. Statutory Framework
The Commission and Commerce are required to conduct sunset
reviews five years after publication of an antidumping duty or
countervailing duty order or a prior sunset review. See 19 U.S.C.
§ 1675(c)(1). In a five year sunset review of an antidumping duty
Court No. 07-00070 Page 7
or countervailing duty order, the Commission determines “whether
revocation of an order . . . would be likely to lead to
continuation or recurrence of material injury within a reasonably
foreseeable time.” 19 U.S.C. § 1675a(a)(1).
In a sunset review, the Commission has discretion to
cumulatively assess the volume and effect of subject imports from
several countries for purposes of the material injury analysis, so
long as certain threshold requirements are met. See Nippon Steel
Corp. v. United States, 494 F.3d 1371, 1374 n. 4 (Fed. Cir. 2007)
(citing 19 U.S.C. § 1675a(a)(7)). In addition, “[w]hen conducting
a sunset review, the Commission is obligated to consider ‘the
likely volume, price effect, and impact of imports of the subject
merchandise on the industry if the order is revoked.’” Nippon
Steel, 494 F.3d at 1380 (quoting 19 U.S.C. § 1675a(a)(1)).
II. Cumulation In Five Year Reviews
The Commission’s statutory authority for cumulation is set out
in 19 U.S.C. § 1675a(a)(7), which provides that:
[T]he Commission may cumulatively assess the volume and
effect of imports of the subject merchandise from all
countries with respect to which reviews under section
1675(b) or (c) of this title were initiated on the same
day, if such imports would be likely to compete with each
other and with domestic like products in the United
States market. The Commission shall not cumulatively
assess the volume and effects of imports of the subject
merchandise in a case in which it determines that such
imports are likely to have no discernible adverse impact
on the domestic industry. (emphasis added).
Pursuant to this statutory authority, the Commission declined
Court No. 07-00070 Page 8
to cumulate subject imports from Romania upon finding that they are
not likely to compete with other subject imports and with the
domestic like product. See Views at 43. In refraining from
cumulating subject imports from Romania, it considered the four
conditions of competition: (1) fungibility, (2) sales or offers in
the same geographic markets, (3) common or similar channels of
distribution, and (4) simultaneous presence. See id. at 47. In
addition, the Commission considered “other considerations, such as
similarities and differences in the likely conditions of
competition of the subject imports with regard to their
participation in the U.S. market for CTL plate.” Id. at 50.
With respect to the four conditions of competition, the
Commission found that subject imports from these ten subject
countries, Belgium, Brazil, Finland, Germany, Poland, Romania,
Spain, Sweden, Taiwan and the United Kingdom,3 would be
sufficiently fungible, move in the same channels of distribution,
and compete in the same geographic markets during the same periods.
See id. at 47-49. The Commission thus concluded that there would
likely be a reasonable overlap of competition among subject imports
and between these subject imports and the domestic like product in
3
The ten subject countries considered here by the
Commission excludes the eleventh subject country Mexico. The
Commission found that subject imports from Mexico would have no
discernable adverse impact, therefore it was unnecessary for the
Commission to “decide the issue of the likelihood of a reasonable
overlap of competition with respect to subject imports from this
country.” Views at 47.
Court No. 07-00070 Page 9
the event of revocation. See id. at 49.
Nevertheless, in considering other factors, the Commission
went on to find that the subject imports from Romania “would likely
compete under different conditions of competition than would those
from the remaining nine subject countries.” Id. at 49-51. In
doing so, the Commission stated that “[t]he sole CTL plate producer
in Romania [Mittal Steel Galati] is related to a major U.S.
producer [Mittal Steel USA], Romania has more excess capacity than
any other subject country, and it is the only subject country that
is subject to tariff barriers in third-country markets.” Id. at 4.
A. The Commission’s Decision Not To Cumulate Subject Imports From
From Romania Is Supported By Substantial Evidence And In
Accordance With Law
Nucor challenges the Commission’s determination to decumulate
subject imports from Romania arguing that the determination is
contrary to the statutory authority, and unsupported by substantial
evidence and otherwise contrary to law. Specifically, Nucor puts
forth the following two bases for its position. First, Nucor
argues that the Commission’s determination is inconsistent with the
purpose of the cumulation statute and is contrary to the evidence
of record. See Pl.’s Br. at 7. Second, contending that “the ‘four
conditions of competition’ examined by the Commission in its
cumulation analysis fail to provide a logical basis for its
determination,” Nucor argues that the determination to decumulate
is unsupported by substantial evidence and otherwise contrary to
Court No. 07-00070 Page 10
law. Id. at 12. For the reasons set forth below, the Court finds
that the Commission’s determination to decumulate subject imports
from Romania is supported by substantial evidence on the record.
i. The Commission’s decision not to cumulate subject imports from
Romania is not contrary to the purpose of the cumulation
provision
First, Nucor argues that “the Commission should cumulate
imports from all countries that it finds: (i) would likely have a
discernable adverse impact on the U.S. industry in the event of
revocation; and (ii) are likely to compete with each other and with
the domestic like product.” Pl.’s Br. at 9-10. Nucor submits that
because these two statutory requirements for cumulation are met
here, the Commission’s determination to decumulate Romanian imports
constitutes an abuse of discretion. See id. at 10-11.
Nucor goes on to argue that while the cumulation statute
provides some discretion, “[t]he Commission’s discretion is . . .
limited by its obligation to be cognizant of the material injury
that is inflicted on the U.S. industry by the simultaneous
importation of unfairly traded products from multiple countries,
and Congress’ purpose behind the cumulation provision, which is to
redress such ‘hammering effects.’” Id. at 10. According to Nucor,
“any decision not to cumulate subject imports ‘[must] be predicated
upon a judgment anchored in the language and spirit of the relevant
statutes and regulations.’” Id.
Nucor thus contends that the Commission erred by failing to
Court No. 07-00070 Page 11
cumulate when the two statutory requirements were met and by
failing to cumulate in light of “the congressional intent
underlying the cumulation provision.” Id. at 11.
According to Nucor, the two statutory requirements are met.
With respect to the “discernable adverse impact,” the first prong,
Nucor states that although the Commission did not analyze this
issue, “the ‘four conditions of competition’ relied on by the
Commission in its cumulation analysis make it significantly more
likely that subject imports from Romania would compete with other
subject imports and the domestic like product in the U.S. market
and that such imports would have an adverse impact on the domestic
industry.” Id. at 11. Nucor also cites to Romania’s capacity,
capacity utilization rates, excess capacity, tariff barriers in
other North American markets and other operational differences
between Mittal Steel USA and Mittal Steel Galati, and contend that
they “all point to significant U.S. imports of Romanian plate upon
revocation.” Id.
Nucor contends that the second prong, the likelihood of
overlap of competition, is met because the Commission acknowledged
that subject imports from Romania and from other subject countries
would be fungible, move in the same channels of distribution, and
compete in the same geographic markets during the same periods.
See id. at 11.
In support of its argument that the Commission’s determination
Court No. 07-00070 Page 12
to decumulate subject imports from Romania is contrary to the
legislative intent of the cumulation provision, Nucor argues that
“subject imports from Romania are likely to have exactly the
deleterious ‘hammering’ effect on the domestic industry that
Congress sought to prevent.” Id. Nucor contends that, in addition
to the four conditions of competition, “the data show that Romania
was the single most volatile country in terms of subject imports
during the period of review, demonstrating the ability to rapidly
increase or decrease exports to the United States in reaction to
market conditions.” Id. at 11-12. Thus, Nucor states that “[i]f
Romanian producers were unconstrained by antidumping orders, it is
particularly evident that they would again export significant
quantities of subject merchandise to the U.S. market given their
prior volatility.” Id. at 12.
The Commission responds that its statutory authority to
cumulate subject imports is discretionary in nature, and therefore,
it is not required to cumulate even upon finding (1) “a discernible
adverse impact on the domestic industry” and (2) subject imports
are “likely to compete with each other and with domestic like
products.” ITC Mem. at 12. Moreover, the Commission states that
it “has wide latitude in selecting the types of factors it
considers relevant” in its cumulation analysis. Id. at 13. Within
such a statutory framework, the Commission contends that its
determination to decumulate subject imports from Romania was “fully
Court No. 07-00070 Page 13
consistent with the plain language of the statute and this Court’s
decisions.” Id. In support, the Commission states that it
considered Romania’s capacity and capacity utilization data and
“identified differences between the Romanian imports and other
subject imports, such as the existence of third country barriers to
trade for the Romanian products and the recent affiliation of the
sole Romanian producer with a significant domestic producer.” Id.
The Commission refutes Nucor’s argument that the Commission’s
determination is contrary to the purpose of the cumulation
provision (i.e., to prevent “hammering effects”) by pointing to
data reflecting a decrease in the volume of U.S. imports from
Romania subsequent to the corporate affiliation of Mittal Steel USA
and Mittal Steel Galati. See id. at 14.
“Cumulation is discretionary in five-year reviews commenced
under section 1675(c), provided that the reviews are initiated on
the same day and the ITC determines that the subject imports are
likely to compete both with each other and the domestic like
product in the United States.” Allegheny Ludlum Corp. v. United
States, 475 F. Supp. 2d 1370, 1375, 30 CIT __, __ (2006); Statement
of Administrative Action, (“SAA”) accompanying H.R. Rep. No.
103-826(I), at 887, reprinted in 1994 U.S.C.C.A.N. 4040, 4212
(Noting that “[n]ew section 752(a)(7) [1675a(a)(7)] grants the
Commission discretion to engage in a cumulative analysis.”). The
purpose of the cumulation provision is “to stem ‘competition from
Court No. 07-00070 Page 14
unfairly traded imports from several countries simultaneously
[which] often has a hammering effect on the domestic industry . .
. [that] may not be adequately addressed if the impact of the
imports are [sic] analyzed separately on the basis of their country
of origin.” H.R. Rep. No. 100-40, part 1, at 130 (1987).
The Commission “has wide latitude in selecting the types of
factors it considers relevant” in its cumulation analysis.
Allegheny, 475 F. Supp. 2d at 1380, 30 CIT at __. However, the
Commission’s “exercise of discretion [must] be predicated upon a
judgment anchored in the language and spirit of the relevant
statutes and regulations.” Id. at 1370 (quoting Freeport Minerals
Co. v. United States, 776 F.2d 1029, 1032 (Fed. Cir. 1985)).
The Court agrees with the Commission’s analysis and finds the
Commission’s determination to decumulate subject imports from
Romania fully consistent with the cumulation provision and this
Court’s decisions. Although the parties do not dispute that the
Commission’s statutory authority to cumulate is discretionary,
Nucor suggests that failure to cumulate when the two statutory
requirements for cumulation are met is contrary to statutory
authority. If Nucor’s argument is true, then the Commission could
never determine not to cumulate when the two requirements are met.
Such a reading of the statute is untenable as it would be contrary
to the plain language of the cumulation provision4 and would
4
See 19 U.S.C. § 1675a(a)(7).
Court No. 07-00070 Page 15
destroy any actual discretion of the Commission.
Moreover, the Court agrees with the Commission’s finding that
the two statutory requirements were not met here. Although the
Commission found a reasonable overlap of competition upon analysis
of the four conditions of competition, it also determined, upon
consideration of other factors, that subject imports from Romania
would compete under different conditions of competition.5
The Court is also unconvinced that the Commission’s
determination is contrary to the legislative intent of preventing
hammering effects. Although Romania’s volatility with respect to
subject imports may be a relevant factor to be considered, it is
insufficient to invalidate the Commission’s detailed cumulation
analysis supported by record evidence, including, inter alia, data
reflecting a decrease in the volume of exports from Romania
subsequent to the corporate affiliation of Mittal Steel USA and
Mittal Steel Galati. The Court is similarly unconvinced by Nucor’s
hammering effects argument since the Commission majority found that
5
Specifically, the Commission found that (1) “the
corporate affiliation between Mittal Steel Galati and Mittal
Steel USA will make it likely that ‘decisions as to how Mittal
Steel Galati will respond to revocation of the antidumping duty
order will be made at the corporate level with the best interest
of the U.S. affiliate in mind.’”; (2) Romanian capacity data
showed a different trend from that of other subject countries;
(3) Romania was the only subject country facing tariff barriers
in third-country markets as the basis for decumulation. Views at
50-51. As discussed in further detail in section ii infra, the
Court finds these findings to be supported by substantial
evidence on the record.
Court No. 07-00070 Page 16
even if it had exercised its discretion to cumulate all subject
imports, including from Romania, it still would have reached
negative determinations for all eleven countries in these reviews.6
See Views at 51 n. 255.
In sum, the Court finds that the Commission’s determination to
decumulate imports from Romania is not contrary to the purpose of
the cumulation provision and is supported by substantial evidence.
ii. The Commission’s subsidiary findings are supported by
substantial evidence and in accordance with law
Nucor alternatively argues that the Commission’s determination
to decumulate subject imports from Romania is unsupported by record
evidence and challenges the following subsidiary findings: (1)
that “the corporate affiliation between Mittal Steel Galati and
Mittal Steel USA will make it likely that ‘decisions as to how
Mittal Steel Galati will respond to revocation of the antidumping
duty order will be made at the corporate level with the best
interest of the U.S. affiliate in mind,’” Pl.’s Br. at 13; (2)
“that capacity in subject countries declined or was flat during the
period of review,” id. at 16; and (3) relying on the fact that
Romania was the only subject country facing tariff barriers in
third-country markets as the basis for decumulation, see id. at 17.
As discussed in further detail infra, Nucor points to record
6
Moreover, the two Commissioners who cumulated imports
from Romania with other subject imports still found that
revocation would not likely lead to a recurrence of injury. See
Views at 93.
Court No. 07-00070 Page 17
evidence purporting to support its positions, but the record is
replete with data supporting the Commission’s conclusion that
subject imports from Romania would likely compete under different
conditions of competition than would those from the nine cumulated
subject countries. Of course, the Court may not “displace the
[agency’s] choice between two fairly conflicting views even though
the court would justifiably have made a different choice had the
matter been before it de novo.” Universal Camera Corp. v. NLRB,
340 U.S. 474, 488 (1951). As such, the Court affirms the
Commission’s determination.
(a) The Commission’s finding that Mittal Steel Galati’s
corporate affiliation with Mittal Steel USA is a
condition of competition which distinguishes Romania from
the other subject countries is supported by substantial
evidence and in accordance with law
With respect to Mittal Steel Galati’s corporation affiliation,
the Commission majority stated that:
[t]he Romanian CTL plate industry has undergone
significant changes since the original investigations and
the first five-year reviews that distinguish it from the
CTL plate industries in the other subject countries.
Most importantly, since April 2005, the lone Romanian
producer of CTL plate has been in the same corporate
group as a major U.S. producer of CTL plate. During the
original investigations, the Commission identified two
state-owned Romanian producers of CTL plate, Sidex SA
Galati and Metalexportimport. During the first reviews,
there remained only one producer, Sidex. Since the first
five-year reviews, Sidex was privatized and purchased in
2001 by LNM Holdings, which eventually brought the
company under the control of the multinational Mittal
Group of steel companies. The Romanian producer now
operates under the name Mittal Steel Galati. As of April
2005, Mittal Steel Co., NV purchased the assets of U.S.
Court No. 07-00070 Page 18
CTL plate producer International Steel Group (“ISG”),
thereby creating Mittal Steel USA, which consequently is
now affiliated with its Romanian sister company Mittal
Steel Galati. This newly arising corporate affiliation
between Mittal Steel Galati and Mittal Steel USA will
make it likely that decisions as to how Mittal Steel
Galati will respond to revocation of the antidumping duty
order will be made at the corporate level with the best
interest of the U.S. affiliate in mind. Views at 50.
Nucor contends that the Commission erred in relying on the
corporate affiliation between Mittal Steel Galati and Mittal Steel
USA as the basis for its finding that “decisions as to how Mittal
Steel Galati will respond to revocation of the antidumping duty
order will be made at the corporate level with the best interest of
the U.S. affiliate in mind.” Pl.’s Br. at 13. According to Nucor,
Mittal is likely to sell domestically produced plates when it can
do so at a profit and will import CTL plates from other Mittal
mills when that is profitable despite any corporate affiliation.
See id. “That Mittal owns mills in both the United States and
Romania does not provide any reason for assuming that Mittal will
not import CTL plate from Romania when it might be profitable to do
so.” Id.
In addition, Nucor states that certain differences in Mittal’s
U.S. and Romanian operations may allow them to avoid direct
competition. See id. Nucor contends that even if Mittal imports
from Romania do not compete with Mittal’s domestic production, they
would still compete with and injure other U.S. producers. See id.
at 14. Nucor suggests that the fact that Mittal vociferously
Court No. 07-00070 Page 19
challenged its antidumping margins at the Commerce Department to
obtain a de minimis preliminary margin indicates an intention to
resume a sizable import to the U.S.7 See id. at 14.
The Commission, however, carefully considered and addressed
Nucor’s arguments regarding Mittal Steel Galati and Mittal Steel
USA’s corporate affiliation and reasonably rejected them. See
Views at 88-91. The Commission states that “[t]he evidence on the
record supports the argument that these corporate realignments
largely explain the recent fall in the volume of subject exports
from Romania during the period of review.” Id. at 90.
Specifically, the Commission noted that “prior to Mittal’s
acquisition of ISG’s assets in April 2005, the volume of Romania’s
exports to the United States increased from 2000 to 2004.
Subsequently, the volume of those exports fell . . . from 2004 to
2005, and such volumes were sharply lower . . . in interim 2006
than . . . during interim 2005.”8 Id. Thus, the Commission went
7
Mittal’s participation in Commerce’s administrative
review cannot be interpreted as an indication of Mittal’s
intention to resume import to the U.S. The purpose of an
administrative review is to determine the amount of antidumping
duties to be assessed upon imports previously entered during the
applicable period of review. See 19 U.S.C. § 1675(a)(1)(B).
8
Although Nucor suggests that this decline in imports is
due to an increase in antidumping duty margins, see Pl.’s Br. at
13 n. 5, the margin increase that Nucor refers to occurred in
February 2006, not in March 2005 as Plaintiff erroneously states,
see Notice of Final Results of Antidumping Duty Administrative
Review and Final Partial Rescission: Certain Cut-to-Length Carbon
Steel Plate from Romania, 71 Fed. Reg. 7008 (Feb. 10, 2006). In
(continued...)
Court No. 07-00070 Page 20
on to conclude that corporate affiliation between Mittal Steel
Galati and Mittal Steel USA “makes it unlikely that Mittal Steel
Galati will move aggressively to capture U.S. market share or sell
its products in a manner that would have a negative effect on the
prices that Mittal Steel USA receives.” Id.
The Commission also considered Nucor’s argument that the
differences in operations of Mittal Steel Galati and Mittal Steel
USA may allow them to avoid direct competition, but still compete
with and injure other U.S. producers. See id.; Pl.’s Br. at 14.
However, the Commission found credible a statement from Mittal’s
importing arm on this issue and found it to be consistent with the
amount of subject imports from Romania in interim 2006. See Views
at 50, 90-91. In addition, the Commission found that the fact that
Mittal Steel USA manufactures a full range of CTL plate products
would make it difficult for Mittal to avoid harm to its U.S.
operations should it choose to import from Romania. See id. at 91.
In comparison, Nucor’s position that Mittal’s corporate affiliation
would not restrain subject imports from Romania is merely
speculative and unsupported by record evidence.
(...continued)
fact, the record shows that there was already a substantial
decrease in imports from Romania to the United States from 2004
to 2005, well before the increase in the antidumping duty margin
in 2006. See Confidential Staff Report, Confidential
Administrative R. Doc. No. 743 (“Staff Report”), CTL-IV-66. The
record also reflects a further decrease in imports from Romania
to the United States from 2005 to interim 2006. See id.
Court No. 07-00070 Page 21
As such, the Court finds that the Commission’s finding that
Mittal Steel Galati’s corporate affiliation is a condition of
competition which distinguishes Romania from the other subject
countries is supported by substantial evidence on the record.
(b) The Commission’s findings regarding Romania’s production
capacity is supported by substantial evidence and in
accordance with law
Nucor next objects to the Commission’s finding relating to
Romania’s production capacity as compared to those of other subject
countries, and to Romania’s level of capacity utilization. See
Pl.’s Br. at 15-16. Specifically, Nucor argues that the record
contradicts the Commission’s finding that production capacity is a
condition of competition that distinguishes subject imports from
Romania. See id. at 16. Nucor further argues that the Commission
erred by determining to decumulate subject imports from Romania
based upon Romania’s excess capacity data. See id. Nucor cites to
the Commission’s own Staff Report to support its contention that
Romania and other subject countries maintained excess capacity.
According to Nucor, these findings “instead of providing support
for [the Commission’s] decision to decumulate, [they] actually
confirm that subject imports from Romania would compete with other
subject imports and cumulatively produce a ‘hammering effect’ on
the domestic like product in the U.S. market.” Id.
As such, Nucor contends that the factors relied on by the
Commission in its cumulation analysis fail to provide a logical
Court No. 07-00070 Page 22
basis for its determination to decumulate subject imports from
Romania. See id. at 17.
Nucor’s arguments lack merit. First, the Commission’s finding
on Romania’s production capacity as compared to that of the other
subject countries is more than amply supported by record evidence
as shown by a review of the relevant capacity data for the period
2000 through 2005. The Commission determined that “this type of
capacity [change] during the [period of review] was unique to the
Romanian industry, and provided another indication that Romanian
imports would compete under different conditions of competition
than other subject imports.” ITC Mem. at 16. The Court agrees
with the Commission’s analysis and finds that it is supported by
substantial evidence.
Second, the Commission accounted for excess capacity of the
other subject countries, but distinguished Romania based on the
extent of its excess capacity. See Views at 51. The Commission’s
finding is supported by substantial record evidence. Indeed, Nucor
does not challenge the accuracy of the Commission’s finding with
respect to Romania’s excess capacity, but contends that record
evidence does not provide a logical basis for the Commission’s
determination to decumulate subject imports from Romania. However,
the mere fact that Nucor would have drawn the opposite conclusion
based on the record evidence does not invalidate the Commission’s
finding when it is supported by substantial evidence on the record
Court No. 07-00070 Page 23
as it is the case here. See Universal Camera, 340 U.S. at 488.
(c) The Commission reasonably relied on the fact that Romania
was the only subject country facing tariff barriers in
third-country markets as a basis for decumulating subject
imports from Romania
Lastly, Nucor objects to the Commission’s reliance on the fact
that Romania was the only subject country facing tariff barriers in
third-country markets as a basis for decumulating subject imports
from Romania. See Pl.’s Br. at 17. Specifically, the Commission
stated that “Romania is the only subject country that faces tariff
barriers in third-country markets” and concluded that “[t]wo of
those countries with tariff barriers in place, Mexico and Canada,
limit Romania’s export markets in North America.”9 Views at 51.
Nucor on the other hand draws the conclusion that these tariff
barriers make it more likely to direct shipments to the U.S. See
Pl.’s Br. at 17.
Although the conclusion Nucor draws may have some merit, the
Commission’s conclusion is not illogical as Nucor argues. Nucor
merely draws the opposite conclusion based on the record evidence,
which again is insufficient to invalidate the Commission’s finding.
See Universal Camera, 340 U.S. at 488. Thus, the Court finds that
9
In addition, the Commission noted that the sole
Romanian producer, Mittal Steel Galati, lacked the incentive to
increase U.S. shipments because of its corporate affiliation with
Mittal Steel USA and that Romanian exports were increasingly
directed to the EU, a more attractive market in light of
Romania’s impending accession. See Views at 91.
Court No. 07-00070 Page 24
the Commission’s finding is supported by substantial evidence on
the record and in accordance with law.
III. Likely Volume, Price Effect, And Impact On The Industry
A. The Commission’s Findings Relating To Volume Of Cumulated
Subject Imports Are Supported By Substantial Evidence And In
Accordance With Law
Pursuant to 19 U.S.C. § 1675a(a)(1), the Commission must
evaluate “the likely volume, price effect, and impact of imports of
the subject merchandise on the industry if the order is revoked.”
In addition, 19 U.S.C. § 1675a(a)(2) provides:
In evaluating the likely volume of imports of
the subject merchandise if the order is
revoked . . . the Commission shall consider
whether the likely volume of imports of the
subject merchandise would be significant if
the order is revoked . . . either in absolute
terms or relative to production or consumption
in the United States. In so doing, the
Commission shall consider all relevant
economic factors, including –
(A) any likely increase in production
capacity or existing unused production
capacity in the exporting country,
(B) existing inventories of the subject
merchandise, or likely increases in
inventories,
(C) the existence of barriers to the
importation of such merchandise into
countries other than the United States,
and
(D) the potential for product-shifting if
production facilities in the foreign
country, which can be used to produce the
subject merchandise, are currently being
used to produce other products.
Court No. 07-00070 Page 25
Put simply, the Commission must determine whether, considering
the four economic factors set forth in subsections (A) through (D)
of the statute, it is “likely” that the volume of imports will be
“significant” if the unfair trade orders are revoked. See id.
“Thus, in accordance with the statute, in order to find sufficient
volume for there to be injury, the [Commission] must identify
substantial evidence from the record demonstrating that, should the
orders be revoked, it is likely that the volume of the subject
imports entering the U.S. market will be significant.” Nippon
Steel Corp. v. United States, 391 F. Supp. 2d 1258, 1275, 29 CIT
695, 712, (2005) (citing 19 U.S.C. § 1675a(a)(2)).
In its Views, the Commission found that the volume of
cumulated subject imports would not likely be significant in the
event of revocation of the orders. See Views at 5. Plaintiff
Nucor disagrees and contends that the Commission relied on the
following erroneous subsidiary findings: (1) that developments in
China would not lead to increased subject imports to the U.S.
market; (2) that production capacity in subject countries was
insignificant, that capacity increases in the reasonably
foreseeable future were unlikely to be significant and that the
excess capacity of subject producers was insignificant; (3) that
demand for CTL plates in Europe and other markets was projected to
increase; and (4) that regional exports were not evidence of
subject producers’ export orientation. See Pl.’s Br. at 19.
Court No. 07-00070 Page 26
For the reasons set forth below, the Court finds that the
Commission’s findings relating to the volume of cumulated imports
are supported by substantial evidence on the record and in
accordance with law.
i. Subsidiary Findings
(a) The Commission’s conclusion that developments in China
would not lead to increased subject imports to the U.S.
market is supported by substantial evidence and in
accordance with law
Nucor objects to the Commission’s conclusion that developments
in China would not lead to increased subject imports to the U.S.
market. See Pl.’s Br. at 19-20. In connection with that
conclusion, the Commission found that: (1) “producers in these
subject countries do not rely on the Chinese market”; (2) there is
no “evidence that China has displaced subject producers in their
home or regional markets”; (3) “although there has been a large
increase in Chinese production over the period of review, future
increases in Chinese production and Chinese net CTL plate exports
are forecast to be more moderate.” Views at 74-75. Accordingly,
the Commission concluded that the argument that “developments in
China will likely lead to increased subject imports into the U.S.
market are too speculative” and stated that “if a displacement
effect were likely, we should already have seen it, and we have
not.” Id.
With respect to these subsidiary findings, Nucor complains
Court No. 07-00070 Page 27
that the Commission failed to consider the administrative record in
its entirety, failed to explain the “overwhelming contrary
evidence” in reaching its conclusion and failed to consider
evidence material to Nucor’s arguments. Pl.’s Br. at 20.
Specifically, Nucor puts forth the following three arguments.
First, Nucor contends that “the Commission’s finding that
‘producers in subject countries do not rely on the Chinese market’
mischaracterizes [its] arguments and does not support the
Commission’s conclusions with respect to China.” Id. Nucor
explains that “China was a major market for subject producers -
importing more than one million tons from subject countries in
2003,” but “China’s plate production exploded and the country
emerged as a net exporter of plate in 2004-2005.” Id. Thus,
“[s]ubstantial volumes of plate from subject countries were
displaced from China.” Id. According to Nucor, more than 7.5
million metric tons of excess steel, including almost 2 million
tons from subject countries, was forced out of China onto the
global market.10 See id. at 21. Nucor suggests that the fact that
subject countries no longer rely on China as a primary export
market shows that a displacement effect has already occurred in
that the subject producers have already been shut out of the
Chinese market as a result of China becoming a net exporter of CTL
10
Nucor states that “China went from a net import
position of 4.2 million metric tons in 2003 to an annualized net
export position of 3.3 million tons in 2006.” Pl.’s Br. at 21.
Court No. 07-00070 Page 28
plate. See id. As such, Nucor insists that the Commission’s
conclusion that producers in subject countries do not rely on the
Chinese market is unsupported by the record evidence.
Second, Nucor asserts that the Commissions’ finding that there
is “no ‘evidence that China has displaced subject producers in
their home or regional markets’ is contradicted by the overwhelming
weight of the record evidence.” Id. In support of its finding,
the Commission stated that “the European Union already maintains
quantitative restrictions on steel products (including CTL plate)
from Russia, Ukraine, and Kazakhstan that prevent any surge in
imports from those countries into the European Union.” Views at
74, n. 415. Nucor argues that EU’s quantitative restrictions only
proves the importance of plate duties in the United States. Pl.’s
Br. at 21. According to Nucor, “the overwhelming weight of
evidence . . . demonstrates that China’s emergence as a net
exporter of plate displaced subject producers from China and
resulted in increasing volumes of Chinese plate exports to subject
countries and other markets.” Id. As such, Nucor argues that
“developments in China can impact subject imports . . . by
encroaching on their home markets, by displacing the exports of
subject producers from Asian markets, or by causing subject
producers to redirect excess inventories or capacity to the U.S.
market” and that “[a]ny of these supply shifts would increase the
likelihood and volume of subject imports returning to the United
Court No. 07-00070 Page 29
States upon revocation.” Id. at 22.
Nucor states that “developments in China adversely impacted
subject country markets such that an increase in exports to the
United States would be likely upon revocation.” See id. Nucor
points to evidence reflecting that Chinese plate exports to subject
countries increased more than 2,000 percent or roughly 1 million
tons from 2003 levels, and that other subject countries in Europe
faced increased competition from Chinese exports as well. See id.
at 22-23. In addition, Nucor cites to record evidence reflecting
that European plate prices decreased as a result of Chinese
exports, and Latin America experienced adverse impacts from Chinese
exports. See id. at 23-24. Moreover, Nucor notes that subject
countries were preparing antidumping claims against China at the
close of the record. See id. at 24. Nucor goes on to argue that
“the Commission’s sharp departure from its findings in the 2005
sunset review is also unjustified.” See id. at 25.
Third, Nucor complains that “the Commission’s contention that
‘future increases in Chinese production and Chinese net CTL plate
exports are forecast to be more moderate’ is not only misplaced but
also contradicted by the record evidence.” Id. at 26. Instead,
Nucor argues that the Commission should have looked at the balance
between production and consumption in China in order to accurately
assess Chinese oversupply and the resulting growth in volume of
export. See id. Nucor contends that “China’s continued production
Court No. 07-00070 Page 30
of plate far in excess of demand was resulting in increased
exports, substantial excess plate and downward price pressures in
global markets.” Id. Citing to certain confidential data, Nucor
contends that “China continues to produce plate well in excess of
demand and indicates that this trend will continue for the
reasonably foreseeable future.” Id. at 27.
Nucor contends that although the Commission stated in the 2005
sunset review of CTL plate that “global CTL plate capacity is
likely to grow at a rapid pace relative to global consumption over
the next several years, mainly due to developments in China” and
noted that China’s overcapacity is likely to persist for the
reasonably foreseeable future, the Commission failed to consider
this data in its final determination. Id. at 27-28. Nucor further
contends that the Commission failed to consider additional record
evidence indicating that Chinese plate exports would continue to
flood European and Latin American markets. See id. at 28-29.
The Commission disagrees and states that it responded to each
aspect of Nucor’s arguments and provided ample evidence showing
that the record did not support these claims. See ITC Mem. at 34.
The Court agrees with the Commission. Indeed, the record supports
the Commission’s position that it thoroughly considered each of
Nucor’s arguments and found against them. Specifically, the
Commission stated in the Views the following:
Domestic interested parties forecast large expansions in
global capacity, particularly in China, and project a
Court No. 07-00070 Page 31
growing imbalance between supply and demand. According
to record data, demand from China increased substantially
in recent years and contributed to increased prices both
globally and in the U.S. market. At least initially,
much of the increased demand was reportedly met by CTL
plate imported into China from other sources. As Chinese
producers continued to increase their production
capacity, by approximately 2005, China became a net
exporter of CTL plate. Although there has been a large
increase in Chinese production over the period of review,
future increases in Chinese production are not forecast
to be anywhere near as large, and the volume of China’s
net CTL plate exports is not expected to grow much beyond
the levels seen in 2006. Moreover, . . . record data do
not show any significant declines in prices in either the
U.S. or global markets associated with the change in
China’s status from a net importer to a net exporter in
2005 or the increase in its production relative to
consumption in 2006. Views at 63.
The Commission went on to state:
Domestic interested parties assert that with China’s
recent transition from a net importer to a net exporter
of CTL plate, subject imports will be displaced from the
Chinese market and from their own home and third-country
markets. [They] assert that, as a result, there will
likely be increased subject imports into the U.S. market
in the event of revocation. In contrast to the producers
in the cumulated countries involved in the 2005 CTL plate
review, . . . producers in these subject countries do not
rely on the Chinese market. Nor is there evidence that
China has displaced subject producers in their home or
regional markets. Instead, record data indicates that
subject producers have recently shipped larger volumes to
their home and regional markets. Moreover, although
there has been a large increase in Chinese production
over the period of review, future increases in Chinese
production and Chinese net CTL plate exports are forecast
to be more moderate. In sum, if a displacement effect
were likely, we should already have seen it, and we have
not. Therefore, we do not expect a displacement effect
in the reasonably foreseeable future. Id. at 74-75
(footnotes omitted).
The Court is satisfied with the Commission’s analysis and its
explanation. Moreover, the Court finds no merit to Nucor’s first
Court No. 07-00070 Page 32
argument that the Commission’s conclusion that producers in subject
countries do not rely on the Chinese market is unsupported by the
record evidence. Indeed, the Commission specifically addressed
Nucor’s argument and acknowledged that “demand from China increased
substantially in recent years and contributed to increased prices
both globally and in the U.S. market” based on arguments raised in
Nucor’s Posthearing Brief. Views at 63. The Commission then noted
that “in 2005, the percentage of total shipments to China by
subject producers were low or non-existent.” Views at 74, n. 414.
As noted by Defendant-Intervenors COSIPA and USIMINAS, most
subject countries exported commercially insignificant quantities of
CTL plate to China between 2004 and 2006, constituting less than 1
percent of the roughly 7 million ton market for CTL plate in the
U.S. See COSIPA & USIMINAS Resp. Br. at 13. In the aggregate,
subject countries constituted only 15.8 percent of total CTL plate
exports to China in the first half of 2006. See id. Indeed,
COSIPA notes that even the Plaintiff recognized that Europe and
Latin America rather than China constitute the primary export
markets for the vast majority of subject producers. See COSIPA &
USIMINAS Resp. Br. at 13; Pl.’s Br. at 34. Thus, the Court finds
that the record is replete with evidence supporting the
Commission’s finding that the subject countries do not rely on the
Chinese market.
Nucor’s second argument that the Commission ignored record
Court No. 07-00070 Page 33
evidence in finding no evidence that China has displaced subject
producers in their home or regional markets is also simply
incorrect. Again, the Commission specifically discussed this issue
and found that “subject producers have recently shipped larger
volumes to their home and regional markets.” Views at 74. Indeed,
the record reflects that Belgian, Finnish, German, Polish, and U.K.
subject producers had higher home market shipments in interim 2006
than in interim 2005, and that Brazilian, Polish, Taiwan, and U.K.
subject producers had higher regional shipments in interim 2006
than in interim 2005. See Staff Report, Tables CTL-IV-9, -14, -19,
-25, -37, -49, -51, -53, and -58.
Although Nucor contends that the EU’s quantitative
restrictions only proves the importance of plate duties in the
United States, the Commission reasonably observed that those
restrictions would prevent any surge in imports from those
countries into the European Union. See Views at 74, n. 415.
Nucor’s argument that the Commission failed to consider its
finding relating to China’s overcapacity made in the 2005 sunset
review similarly lacks merit. The Commission sufficiently
addressed and explained that “[i]n contrast to the producers in the
cumulated countries involved in the 2005 CTL plate reviews, which
the Commission found relied on the Chinese market (except for
Italy), producers in these subject countries do not rely on the
Chinese market.” Views at 74. The Commission also noted that
Court No. 07-00070 Page 34
“[i]mports from the subject countries in the 2005 reviews (except
for France) surged in volume in the period leading up to the
orders; subject producers continued to ship into the U.S. market;
subject producers increased production capacity over the period of
review; and subject producers were subject to antidumping duties in
third-country markets.” Views at 74, n. 412. The Court is thus
satisfied with the Commission’s explanation and finds it
reasonable.
The Court is also unconvinced by Nucor’s third argument that
the record evidence contradicts the Commission’s finding that
“future increases in Chinese production and Chinese net CTL plate
exports are forecast to be more moderate.” Indeed, the record
reflects that the Commission relied on the same data that Nucor
claims the Commission ignored. See Views at 63 n. 337 (stating
that Chinese production increased [a certain number of] percent
between 2000 and 2006 but was projected to increase only [a smaller
number of] percent between 2006 and 2008). Moreover, the Court
finds that the Commission did in fact analyze China’s production
and consumption to determine the extent of its oversupply. See
Views at 63, n. 334 (stating that China’s production was projected
to exceed its consumption by [a certain number of] metric tons in
2006, compared to an excess ranging from [a certain number] to [a
certain number of] metric tons annually between 2007 and 2010);
Nucor’s Posthearing Brief, Confidential Administrative R. Doc. No.
Court No. 07-00070 Page 35
636 (“Nucor’s Posthearing Brief”), Ex. 2.
In short, the Court finds no merit to all three arguments
posed by Nucor with respect to the Commission’s findings relating
to the “China effect” and finds that the Commission’s findings are
supported by substantial evidence on the record and in accordance
with law.
(b) The Commission’s findings regarding subject countries’
capacity trends are supported by substantial evidence and
in accordance with law
With respect to production capacity in subject countries, the
Commission found that “[t]here have been significant declines in
production capacity in many of the subject countries since the
original investigations, including for each of the countries with
relatively larger capacities at the time of the original
investigations” and that the record did not reflect any likely
significant increases in production capacity in the subject
countries in the reasonably foreseeable future. Views at 67. The
Commission also found that excess capacity of subject producers in
2005was “considerably smaller than the 1.1 million short tons of
excess capacity that existed among the eleven subject countries in
the first reviews.” Id. at 68-69.
Nucor complains that the Commission erred (1) in finding that
production capacity declined in many of the subject countries, see
Pl.’s Br. at 30-33, (2) in finding that there would be no
significant increases in production capacity in the reasonably
Court No. 07-00070 Page 36
foreseeable future, see id. at 31-32, and (3) by grossly
underestimating excess capacity of subject producers, see id. at
34-36.
The Commission erred, according to Nucor, by “ignor[ing] the
wealth of record evidence documenting the substantial existing
capacity . . . in both subject and non-subject countries.” Id. at
30. Nucor contends that “in seven out of 10 subject countries,
production capacity actually increased from the original
investigation to 2005” and that “[i]n the eleventh subject country
. . . production capacity increased from 1999 to 2005.” Id.
Nucor next contends that the Commission erred by relying
solely on questionnaire data with respect to its findings on
production capacity and excess capacity of subject producers.11 See
id. at 35-36. According to Nucor, respondent data were incomplete
and inadequate because fewer than half of the subject producers
responded to the questionnaire.12 See id. at 31, 35-36. Instead,
Nucor argues that the Commission should have relied upon a certain
capacity data on the record which is more comprehensive. Had the
Commission relied upon that data, Nucor contends that it would have
11
With respect to the Commission’s finding on excess
capacity of subject countries, Nucor argues that “the Commission
erred by excluding Romanian imports from consideration” because
it “impermissibly failed to cumulate subject imports from Romania
with other subject imports.” Pl.’s Br. at 36.
12
Nucor contends that the Commission’s “reliance on the
capacity data provided by respondents alone constitutes
reversible error.” Pl.’s Br. at 31.
Court No. 07-00070 Page 37
found that (1) production capacity increased in the subject
countries, see id. at 31, and (2) subject countries had a
significant excess capacity, see id. at 36.
Nucor also complains that the “evidence . . . refutes the
Commission’s assertion that there would be no significant increases
in production capacity in the foreseeable future.” Id. at 31. In
support of its argument, Nucor cites to record evidence relating to
Romania, Mexico13 and Brazil.14 See id. at 31-32.
In addition, Nucor contends that the Commission failed to
consider or address other projected production increases in certain
subject countries, which according to Nucor, provide a more
accurate indication of likely levels of exports to the U.S. market
than capacity. See id. at 32. In short, Nucor contends that
“capacity and or production increases were expected in nine of the
11 subject countries in the reasonably foreseeable future.” Id.
Lastly, Nucor argues that the Commission failed to “consider
13
Nucor’s argument based on Romania and Mexico, the two
countries that the Commission determined to decumulate, do not
merit a detailed discussion since capacity data from non-
cumulated countries are irrelevant in analyzing production
capacities of cumulated subject countries. See 19 U.S.C. §
1675a(a)(2)(A) (requiring the Commission to consider likely
increases in production capacity in the subject exporting
country).
14
With respect to Brazil’s production capacity, Nucor
supports its argument by pointing to confidential capacity data
which it claims to be more comprehensive. See Pl.’s Br. at 32.
Nucor complains that the Commission failed to address this data.
However, the Court finds that the Commission properly relied on
questionnaire data as discussed infra.
Court No. 07-00070 Page 38
the substantial record evidence documenting the massive new plate
capacity expansions expected around the globe in the reasonably
foreseeable future.” Id.
The Commission responds that it correctly found that the
“combined production capacity of the nine subject countries has
declined substantially since the original investigations.” Views
at 67.
According to the Commission, to the extent available, it
reasonably relied on capacity data that was directly submitted by
the subject producers that conformed to the scope of the reviews
and that accounted for the vast majority of production in the
subject countries. See ITC Mem. at 25-26. Indeed, the Commission
notes that most of the companies that did not respond to the
questionnaire were not producers of subject merchandise.15 See id.
at 26. The Commission further explained that the data which Nucor
contends the Commission should have relied upon were understated in
some respects and overstated in other respects. See id. at 27
(quoting Views at 56-57).
The Court agrees and is satisfied with the Commission’s
15
The Commission states that foreign producer
questionnaires covered 100 percent of subject production for four
of the nine countries cumulated by the Commission. For three of
the remaining five countries, the Commission’s questionnaires
covered the large majority of production in those countries. For
the remaining two countries, the Commission did not have
questionnaire responses but relied on the data provided by Nucor
as the best indication of those countries’ capacity levels. See
ITC Mem. at 25-26.
Court No. 07-00070 Page 39
explanation for using questionnaire responses and finds the
explanation reasonable because those responses correspond directly
to the scope of the reviews. The use of data which Nucor contends
the Commission should have relied upon, which do not directly
correspond to the scope of the reviews, was also appropriate in
instances where the subject countries’ questionnaire responses were
insufficient or absent. See 19 U.S.C. § 1677e(a).
The Court also finds that the Commission’s findings with
respect to production capacity and capacity increases are supported
by substantial evidence. The Commission reasonably relied upon
respondent questionnaire data and correctly found significant
declines in production capacity in many of the subject countries
since the original investigations. See ITC Mem. at 27; Staff
Report, Tables CTL-IV-8, -13, -18, -24, -25, -30, -36, -42, -48,
-50, -52, -57; Views at 67 n. 363. Nucor’s argument that producers
in some countries experienced increases in capacity does not
invalidate the Commission’s finding.
With respect to Nucor’s argument that the Commission should
have analyzed production increases which provide a more accurate
indication of likely levels of exports to the U.S. market than
capacity, the Court agrees with the Commission’s response that the
statute directs it to consider production capacity rather than
production increases. See ITC Mem. at 29; 19 U.S.C. §
1675a(a)(2)(A). In any event, even if Nucor’s argument that
Court No. 07-00070 Page 40
production increases provide a more accurate indication of likely
levels of exports to the U.S. market than capacity increases is
correct, the Court is satisfied with the Commission’s finding,
which included an analysis of production increases.16
Moreover, the Commission specifically recognized that the
available excess capacity is not insubstantial in relation to the
U.S. market, but found it unlikely “that such volumes would be
shipped to the United States if the finding and orders were
revoked.” Views at 68. In doing so, the Commission provided a
detailed explanation of subject producers’ high capacity
utilization, strong demand and focus on their home and regional
markets. The Court finds the Commission’s explanation reasonable
and supported by substantial evidence on the record.
(c) The Commission’s findings regarding demand conditions in
the U.S. and global markets are supported by substantial
evidence and in accordance with law
In its volume analysis, the Commission considered demand
conditions in the U.S. and global markets for the reasonably
foreseeable future. See Views at 71-72. The Commission found that
projections for “plate consumption outside of the North American
market . . . show continuing increases through 2010” and that
16
The Commission states that “because the questionnaires
asked foreign producers to report ‘any changes in the character
of [their] operations relating to the production of [CTL plate] .
. . any production increases due to improved efficiency should
have been captured in the responses along with new capacity
additions.” ITC Mem. at 29.
Court No. 07-00070 Page 41
“demand is also expected to continue to be strong in the regional
markets that subject producers currently serve” including Europe
and Latin America. Views at 72-73.
Nucor argues that the certain data contained in the
Commission’s Staff Report does not support the Commission’s finding
that demand for plate in Europe and other global markets was
projected to increase in the reasonably foreseeable future. See
Pl.’s Br. at 33-34. In support of its argument, Nucor relies on a
certain independent data contained in its Prehearing Brief. See
Nucor’s Prehearing Br., Confidential Administrative R. Doc. No. 561
(“Nucor’s Prehearing Br.”), Ex. 4, Table S.1; Ex. 7.
The Commission responds that its finding is supported by
substantial evidence and points out that instead of the
Commission’s data in its Staff Report, Nucor cites to data that
includes broader “steel plate” industry data. According to the
Commission, it correctly relied upon more narrowly tailored data
which shows an overall upward trend in demand. ITC Mem. at 33.
The Court agrees with the Commission and finds reasonable that it
relied upon more narrowly tailored data. Furthermore, the
Commission’s conclusion is supported by substantial record
evidence. As noted by the German-UK Respondents,17 even the data
cited in Plaintiff’s brief support the Commission’s finding. See
17
German-UK Respondents are Corus Group, PLC, AG der
Dillinger Hüttenwerke, Salzgitter AG Stahl und Technologie and
ThyssenKrupp Steel AG.
Court No. 07-00070 Page 42
German-UK Resp. Br. at 18-28.
In sum, record evidence, particularly the data that Plaintiff
itself cites, refutes Plaintiff’s arguments, and supports the
Commission’s findings.
(d) The Commission’s findings regarding regional exports as
evidence of subject producers’ export orientation are
supported by substantial evidence and in accordance with
law
The Commission examined the level and composition of exports
from the nine cumulated subject countries to markets other than the
United States and found that for seven subject countries for which
there was information on total shipments, “their exports . . .
represented [a small] percent of total shipments because an
important share of their shipments were consumed internally and/or
sold in their home market.” Views at 70. The Commission went on
to state that “a substantial majority of these export shipments
were to markets in the subject producers’ own geographic regions.”
Id. Thus, the Commission concluded that “we do not consider
subject producers’ within-region exports to indicate that increased
exports to the United States are likely if the finding and orders
under review are revoked.” Id. at 71.
Nucor argues that “the Commission erred by considering these
‘within-region’ exports to be equivalent of home market exports”
because “[t]he statute does not permit such an analysis.” Pl.’s
Br. at 37. Citing to 19 U.S.C. § 1677(3), Nucor submits that the
Court No. 07-00070 Page 43
Commission is not permitted to consider a customs union, such as
the European Union, as a country for the purpose of antidumping
proceedings. See id. at 37. Moreover, Nucor contends that
“barriers to trade and customs formalities within the EU still
exist,” and therefore, “the premise that producers are free from
internal barriers to trade with the EU is simply not correct.” Id.
at 37. Nucor goes on to conclude that “shipments outside a subject
producer’s home country, even if within the EU or Mercosur, must be
considered evidence of the export-orientation of that producer.”
Id. In support of its position, Nucor points to record evidence
relating to the subject countries’ export data. See id. at 38. In
addition, Nucor states that the Commission failed to consider data
indicating that subject countries exported a substantial volume of
subject merchandise outside their region. See id.
The Court finds no merit to Nucor’s arguments. First, the
Commission did not consider regional exports to be home market
sales as Nucor claims. They were explicitly considered exports.18
Second, although Nucor points out that barriers to trade and
customs formalities within the EU still exist, that fact alone does
not invalidate the Commission’s finding that “subject producers
have a significant incentive to continue to ship to markets that
are in relatively close proximity to them, and in the case of the
18
In its determination, the Commission referred to
within-region exports as “export shipments,” as distinguished
from “shipments . . . consumed internally and/or sold in their
home market.” Views at 70.
Court No. 07-00070 Page 44
European Union and Mercosur, that provide some logistical and
tariff advantages.” Views at 71. The Commission throughly
explained its reasoning as follows:
Given the geographic proximity of subject producers and
purchasers in regional markets, transportation costs are
generally lower than they would be in the case of
shipments from those producers to the United States. For
these reasons and others, foreign producers, including
Mittal, produce according to a model in which production
facilities largely serve the regional markets in which
they are located. Moreover, having invested efforts in
cultivating customers within regional markets (customers
with whom foreign producers may expect to enjoy certain
natural advantages (such as those mentioned above)),
foreign producers are not likely to abandon those
existing regional customers in favor of more speculative
and short-lived prospects with customers in the United
States. Id.
Although Nucor relies on export data for subject countries to
support its argument, the Commission reasonably found based on
record evidence that only a small portion of the subject countries’
total shipments were exported to markets outside their local
regions. Thus, the Commission’s conclusion, that subject
producers’ within-region exports did not indicate that increased
exports to the U.S. were likely upon revocation, is reasonable and
is supported by substantial evidence on the record. See Views at
71, 73, nn. 387-89.19
19
The Court is similarly unconvinced by Nucor’s argument
that the Commission failed to consider data indicating that
subject countries exported a substantial volume of subject
merchandise outside their region. The Court finds that the
record evidence amply supports the Commission’s finding that for
seven subject countries for which there was information on total
shipments, “their exports . . . represented [a small] percent of
(continued...)
Court No. 07-00070 Page 45
B. The Commission’s Finding That Cumulated Subject Imports Would
Not Likely Have Significant Price Effects Is Supported By
Substantial Evidence And In Accordance With Law
With respect to the Commission’s finding that cumulated
subject imports would not likely have significant price effects,20
Nucor puts forth the following arguments. First, Nucor argues that
the Commission’s determination that revocation of the order would
not result in any significant adverse price effects is not
supported by substantial evidence and is contrary to law. See
Pl.’s Br. at 38. According to Nucor, the Commission relied upon
its erroneous findings regarding the likely volume of subject
imports, which was unsupported by the evidence. See id.
Second, Nucor complains that, in assessing price effects of
subject imports from Romania, the Commission noted that the
(...continued)
total shipments” and that “a substantial majority of these export
shipments were to markets in the subject producers’ own
geographic regions.” Views at 70.
20
The statute provides that:
In evaluating the likely price effects of imports of
the subject merchandise if the order is revoked or the
suspended investigation is terminated, the Commission
shall consider whether -
(A) there is likely to be significant price
underselling by imports of the subject merchandise as
compared to domestic like products, and
(B) imports of the subject merchandise are likely to
enter the United States at prices that otherwise would
have a significant depressing or suppressing effect on
the price of domestic like products. 19 U.S.C. §
1675a(a)(3).
Court No. 07-00070 Page 46
percentage of underselling increased from the original
investigation to the current review, and that the margins of
underselling also remained significant during the period of review.
See id. at 38-39. Notwithstanding this underselling, the
Commission found that prices for all five pricing products have
more than doubled since 2000. See Views at 77-78. Thus, the
Commission found it unlikely that the additional volumes of subject
imports from Romania will lead to significant price declines. See
id. at 80.
Nucor objects to the Commission’s analysis on the ground that
the level of pricing is irrelevant to an underselling analysis to
the extent that a certain price level has no bearing on whether
imports will undersell the domestic product. See Pl.’s Br. at 39.
Indeed, Nucor claims that higher pricing means that underselling
will result in proportionally greater price declines. See id.
Nucor thus argues that the Commission’s determination with respect
to the price effects of subject imports from Romania is not
supported by substantial evidence and otherwise contrary to law.
With respect to Nucor’s first argument, the Court finds that
the Commission reasonably and correctly relied on its volume
findings, which were based on substantial record evidence and
otherwise consistent with law. The Commission reasonably found
that the cumulated imports would not be likely to significantly
undersell the domestic like product or significantly depress or
Court No. 07-00070 Page 47
suppress domestic prices upon revocation. See Views at 76-80. As
noted by the Commission, the record evidence reflects that “growing
demand in U.S. and global markets enabled domestic producers to
double or nearly double prices to historic highs during the [period
of review], with the largest price increases occurring during 2004,
even though there was a contemporaneous increase in the volume of
total imports.” ITC Mem. at 77-79. Moreover, “[t]he spread
between costs and net unit sales prices grew as domestic producers
issued successive price increases that more than offset their
growing costs, and demand projections were rosy.” See id.
Second, the Court finds no merit to Nucor’s argument with
respect to subject products from Romania that higher pricing means
that underselling will result in proportionally greater price
declines. The statute requires that the Commission evaluate the
likely price effects of imports and whether there is likely to be
significant price underselling. See 19 U.S.C. § 1675a(a)(3). The
Commission found underselling, but also found that prices continued
to increase and that domestic producers have passed on surcharges
and increased base prices even in the face of increasing imports in
2004 and 2005. See Views at 92. Thus, the Commission’s conclusion
that revocation of the order would not lead to adverse price
effects despite finding underselling is not illogical as Nucor
suggests. Rather, the Commission properly analyzed whether there
would be significant price effects pursuant to the statutory
Court No. 07-00070 Page 48
requirements.
C. The Commission’s Finding That Cumulated Subject Imports Would
Not Likely Have A Significant Impact On The Domestic Industry
Is Supported By Substantial Evidence And In Accordance With
Law
Lastly, Nucor disagrees with the Commission’s determination
that revocation was not likely to have a significant impact on the
domestic industry. See Pl.’s Br. at 40. Nucor contends that the
determination is not supported by substantial evidence and is
contrary to law because the Commission’s analysis was based on its
erroneous findings regarding likely volume and price effects as
discussed above. See id.
As the Court already found supra, the Commission’s findings
regarding volume and price effects are supported by substantial
evidence on the record. Moreover, the Commission provided a
thorough and detailed explanation to support its conclusion. The
Commission stated with respect to the first sunset review that it
“found the domestic industry to be in a weakened state, due at
least in part to the effects of the dumped and subsidized imports
from non-subject countries that were put under order during the
period of review.” Views at 81. In the current proceedings, the
Commission stated that “[w]e find that the domestic industry is not
currently vulnerable. Since the beginning of the period of review,
the domestic industry, through closures, bankruptcies,
Court No. 07-00070 Page 49
consolidation, and expansion, has been significantly restructured
and has emerged from this period stronger and fundamentally
changed.” Id. It went on to state that “[m]ost industry
performance indicators improved dramatically during the current
period of review,” id. at 81, and that “[t]he conditions that have
enabled the industry to become profitable since 2004 are not likely
to change in the reasonably foreseeable future,” id. at 84. The
Commission thus concluded that because the domestic industry is in
a healthy rather than vulnerable condition, revocation of the
orders on subject imports would not likely have a significant
adverse impact on the domestic industry within the reasonably
foreseeable future. See id. at 85. Thus, the Court finds that the
Commission’s conclusion is supported by substantial evidence on the
record and in accordance with law.
CONCLUSION
In accordance with the foregoing, the Court affirms the ITC’s
final determination. Plaintiff’s motion for judgment upon the
agency record is denied.
/s/ Nicholas Tsoucalas
NICHOLAS TSOUCALAS
SENIOR JUDGE
Dated: July 9, 2008
New York, New York