Nucor Corp. v. United States

Slip Op. 10-10

UNITED STATES COURT OF INTERNATIONAL TRADE

Before: Gregory W. Carman, Judge
________________________________________
:
NUCOR CORPORATION, :
:
Plaintiff, :
:
and :
:
UNITED STATES STEEL CORPORATION and AK :
STEEL CORPORATION, : Consol.
: Court No. 07-00454
Plaintiff-Intervenors, : PUBLIC VERSION
:
v. :
:
UNITED STATES, :
:
Defendant. :
________________________________________:

[The Court affirms, in its entirety, the United States
International Trade Commission’s Remand Determination, dated July
8, 2009.]

Wiley Rein LLP, (Daniel B. Pickard; Alan H. Price; Maureen
E. Thorson; Lori E. Scheetz) for Plaintiff, Nucor Corporation.

Skadden, Arps, Slate, Meagher & Flom, LLP, (James C. Hecht;
John J. Mangan; Robert E. Lighthizer; Stephen P. Vaughn; Stephen
J. Narkin) for Plaintiff-Intervenor, United States Steel
Corporation.

King & Spalding, LLP, (Joseph W. Dorn; Jeffrey M. Telep) for
Plaintiff-Intervenor, AK Steel Corporation.

Kelley Drye and Warren, LLP, (Kathleen W. Cannon; Paul C.
Rosenthal; R. Alan Luberda) for Amicus, ArcelorMittal USA.

James M. Lyons, General Counsel; Andrea C. Casson, Assistant
General Counsel, Office of the General Counsel, United States
International Trade Commission (Marc A. Bernstein; Robin L.
Turner), for Defendant, United States.

Dated: January 27, 2010
Court No. 07-00454 Page 2

OPINION

CARMAN, Judge: This matter comes before the Court following

its decision in Nucor Corp. v. United States, 33 CIT ___, 605 F.

Supp. 2d 1361 (2009), in which the Court remanded a decision of the

United States International Trade Commission (“ITC” or

“Commission”) which found that revocation of certain antidumping

and countervailing duty orders would not be likely to lead to the

continuation or recurrence of material injury to the domestic hot-

rolled steel industry. See Hot-Rolled Steel Products From

Argentina, China, India, Indonesia, Kazakhstan, Romania, South

Africa, Taiwan, Thailand, and Ukraine (“Final Determination”),

USITC Pub. 3956, Inv. Nos. 701-TA-404-408 and 731-TA-898-902 and

904-908 (Review) (Oct. 2007) (PR 453) (CR 427).1 This lawsuit

arose from Plaintiff’s and Plaintiff-Intervenors’ challenges to the

Commission’s Final Determination, and ensuing Motion for Judgment

on the Agency Record under USCIT Rule 56.2. The parties allege,

inter alia, that the ITC’s negative injury determination in the

five-year sunset review of the countervailing duty order on hot-

rolled steel products from South Africa and the antidumping duty

orders on hot-rolled steel from Kazakhstan, Romania and South

Africa was unsupported by substantial evidence. In its opinion,

the Court found that the ITC had failed to provide an adequate

1
Hereinafter all documents in the confidential record will
be designated “CR” and all documents in the public record
designated “PR.”
Court No. 07-00454 Page 3

explanation or substantial evidentiary support for certain findings

relating to the likely volume, price effect, and impact of subject

imports from the affected countries. As a result, the Court

remanded the matter and instructed the Commission to reevaluate and

explain more fully its negative injury determination in light of

the Court’s findings. See Nucor, 33 CIT at ___, 605 F. Supp. 2d

1361, 1381-82.

The Court now reviews the Commission’s findings pursuant to

the Court’s remand2 (“Remand Determination”), dated July 8, 2009,

in which the ITC’s revocation decision remains unchanged from the

Final Determination. Plaintiff, Nucor Corporation (“Nucor”) and

Plaintiff-Intervenors, United States Steel Corporation (“U.S.

Steel”) and AK Steel Corporation (“AK Steel”) (collectively

“Plaintiffs” or “Domestic Producers”) assert that the Remand

Determination is also unsupported by substantial evidence or

otherwise contrary to law and urge the Court to remand the matter

for further consideration. The Commission, joined by Amicus,

ArcelorMittal USA,3 argues that the decision should be sustained.

For the reasons set forth below, the Court affirms the Remand

Determination of the ITC.

2
All references are made to the confidential version of
this document filed under CR 441R.
3
ArcelorMittal USA (“Mittal USA”) is an affiliate of
ArcelorMittal International (“ArcelorMittal”) which is the
corporate parent of the subject producers.
Court No. 07-00454 Page 4

I. JURISDICTION

This Court has jurisdiction pursuant to 28 U.S.C. § 1581(c)

(2006) and 19 U.S.C. § 1516a(a)(2)(A)(i)(I) (2006).

II. STANDARD OF REVIEW

Review of the Commission’s redetermination pursuant to the

Court’s remand is conducted under the substantial evidence and in

accordance with law standard, which is set forth in 19 U.S.C. §

1516a(b)(1)(B)(i) (2006) (“The 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.”). 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. v.

NLRB, 305 U.S. 197, 229 (1938)). “Substantial evidence requires

more than a mere scintilla, but is satisfied by something less than

the weight of the evidence.” Altx, Inc. v. United States, 370 F.3d

1108, 1116 (Fed. Cir. 2004) (internal citations and quotation marks

omitted). The Court “must affirm a Commission determination if it

is reasonable and supported by the record as a whole, even if some

evidence detracts from the Commission’s conclusion.” Nippon Steel

Corp. v. United States, 458 F.3d 1345, 1352 (Fed. Cir. 2006)

(internal citations and quotation marks omitted). There must be a

“rational connection between the facts found and the choice made”
Court No. 07-00454 Page 5

in an agency determination if it is to be characterized as

supported by substantial evidence and otherwise in accordance with

law. Burlington Truck Lines, Inc. v. United States, 371 U.S. 156,

168 (1962).

III. BACKGROUND

The Court presumes familiarity with its decision in Nucor,

which provides background discussion on the five-year sunset review

that Plaintiffs contest in this judicial proceeding. Below, the

Court provides only that background information specific to the

Remand Determination now before the Court.

In August and November of 2001, the Commission unanimously

determined that the domestic hot-rolled steel industry was

materially injured by reason of subsidized imports of hot-rolled

steel from Argentina, India, Indonesia, South Africa, and Thailand,

and by reason of less than fair value imports of hot-rolled steel

from Argentina, China, India, Indonesia, Kazakhstan, the

Netherlands, Romania, South Africa, Taiwan, Thailand, and Ukraine.

See Hot Rolled Steel Products From Argentina and South Africa, Inv.

Nos. 701-TA-404 and 731-TA-898 and 905 (Final), USITC Pub. 3446

(Aug. 2001) (PR 65); Hot-Rolled Steel Products From China, India,

Indonesia, Kazakhstan, The Netherlands, Romania, South Africa,

Taiwan, Thailand, and Ukraine, Inv. Nos. 701-TA-405-408 and 731-TA-

899-904 and 906-908 (Final), USITC Pub. 3468 (Nov. 2001) (PR 66)

(collectively “Original Determinations”). Accordingly, between
Court No. 07-00454 Page 6

September 2001 and December 2001, the United States Department of

Commerce (“Commerce”) published countervailing duty orders on hot-

rolled steel from Argentina, India, Indonesia, South Africa, and

Thailand, as well as antidumping duty orders on hot-rolled steel

from Argentina, China, India, Indonesia, Kazakhstan, the

Netherlands, Romania, South Africa, Taiwan, Thailand and Ukraine.

See Final Determination at I-2.

On August 1, 2006, the Commission initiated five-year sunset

reviews to determine whether revocation of the countervailing duty

and antidumping duty orders on hot-rolled steel products from

Argentina, China, India, Indonesia, Kazakhstan, the Netherlands,

Romania, South Africa, Taiwan, Thailand and Ukraine would likely

lead to the continuation or recurrence of material injury to the

domestic hot-rolled steel industry. See Hot-Rolled Steel Products

from Argentina, China, India, Indonesia, Kazakhstan, Netherlands,

Romania, South Africa, Taiwan, Thailand, and Ukraine, 71 Fed. Reg.

43,521 (Aug. 1, 2006) (PR 3). At the conclusion of the sunset

reviews, the Commission determined that revocation of the

antidumping and countervailing duty orders on hot-rolled steel from

China, India, Indonesia, Taiwan, Thailand and Ukraine would likely

lead to the continuation or recurrence of material injury. See

Final Determination at 3 (PR 453). However, the Commission

determined that revocation of the orders on hot-rolled steel from

Argentina, Kazakhstan, Romania and South Africa (“subject
Court No. 07-00454 Page 7

countries”) would not be likely to lead to continuation or

recurrence of material injury to an industry in the United States

within a reasonably foreseeable time.4 Id.

Domestic Producers subsequently initiated actions in this

Court seeking review of the ITC determinations. On March 9, 2009,

after briefing and oral argument the Court remanded the

Commission’s negative determinations in part, ordering the ITC to:

(1) reevaluate its flawed reasoning for the finding that
ArcelorMittal companies and/or Mittal USA would limit
subject imports from the subject countries; (2) reassess
and further explain the basis for its findings that
significant imports in any region of the country are
likely to have a disruptive impact on the overall U.S.
market, and that any pricing practices that would
negatively impact Mittal USA’s competitors are likely to
also impact Mittal USA; (3) reassess and further explain
the behavior of ArcelorMittal and its predecessor, the
Ispat organization, with respect to their business
practices in exporting to countries in which they
maintain production facilities; (4) reassess and further
explain evidence opposed to the ITC’s volume
determination, including excess capacity, export
orientation of the subject countries’ producers,
attractiveness of the U.S. market, and capacity increases
in alternative export markets; (5) reassess the potential
price effects in accordance with its revised volume
determination; and (6) reassess its likely impact
analysis in accordance with its revised volume and price
effects determinations, and account for and explain the
poor performance of the domestic industry in the latter
portion of the period of review.

See Nucor, 33 CIT at ___, 605 F. Supp 2d 1361, 1381-83.

On remand, the Commission reopened the record with respect to

4
Plaintiffs do not challenge the Commission’s negative
final determination with respect to hot-rolled steel products
from Argentina. See Plaintiff’s Rule 56.2 Mot. for Summ. J. On
the Agency R. at 1 n.1.
Court No. 07-00454 Page 8

certain issues, inviting parties to offer additional information on

matters relating to the remand and submit written comments. See

Hot-Rolled Steel Products From Kazakhstan, Romania, and South

Africa, Inv. Nos. 701-TA-407 and 731-TA-902, 904, 905 (Review)

(Remand) 74 Fed. Reg. 21,821 (May 11, 2009). As much of the Court

directed inquiry focused on the business practices of

ArcelorMittal, the Commission permitted Mittal USA to participate

as a party in the proceeding. The Commission issued its Remand

Determination on July 8, 2009, once again finding that revocation

of the countervailing duty order on hot-rolled steel from South

Africa and the antidumping duty orders on hot-rolled steel from

Kazakhstan, Romania and South Africa would not be likely to lead to

the continuation or recurrence of material injury to the domestic

industry within a reasonably foreseeable time. See Remand

Determination at 2.

IV. DISCUSSION

This Court’s remand instructions were carefully delineated

into six areas for further review by the Commission: four involving

volume, one involving price effects and one involving likely impact

on the domestic industry. See Nucor, 33 CIT at ___, 605 F. Supp 2d

1361. The Court will hew to that framework in evaluating the

Commission’s determination on remand.

1. ArcelorMittal’s Limitation of Subject Imports

A. The Commission’s Determination on Remand
Court No. 07-00454 Page 9

Pursuant to the Court’s instructions, the Commission

specifically examined whether, upon revocation of the antidumping

and countervailing duty orders, ArcelorMittal or Mittal USA would

limit imports from the subject countries. See Nucor 33 CIT at ___,

605 F. Supp. 2d 1361, 1381. The Commission’s analysis once again

led it to the conclusion that ArcelorMittal’s likely behavior with

respect to the hot-rolled steel mills it operates in Kazakhstan,

Romania and South Africa would not result in significant volumes of

subject imports entering the U.S. market. See Remand Determination

at 10. The Commission relied on information submitted by

Arcelormittal, in both the five-year reviews and remand proceeding,

as evidence of the firm’s decision to serve the U.S. market

principally through its American subsidiary, Mittal USA. See id.

According to the ITC, this strategy of constraining imports in

furtherance of maximizing domestic production did in fact serve to

maintain price stability and promote Arcelormittal’s overall

corporate interests. See Defendant’s Rebuttal to Plaintiff’s

Comments on Remand Determination (“ITC Rebuttal Comments”) at 15.

B. Parties’ Arguments

The Commission argues that ArcelorMittal’s strategy for its

subsidiaries to supply home and regional markets, and not to serve

export markets where the company is a producer, limits the

motivation of the subject producers in Kazakhstan, Romania and

South Africa to significantly increase shipments to the U.S.
Court No. 07-00454 Page 10

market.5 As support for this position, Defendant points to the

substantial investment ArcelorMittal has made in its subsidiary,

Mittal USA.6 Because Mittal USA accounts for such a large segment

of ArcelorMittal’s production overall, and in light of the domestic

producer’s prominence in the U.S. market, the Commission concludes,

it is in ArcelorMittal’s best interests to limit the amount of

imports of hot-rolled steel. Similarly, the ITC points to the

decision by ArcelorMittal to provide Mittal USA with the right to

veto any imports from other ArcelorMittal facilities, and its

policy of serving the U.S. market principally through Mittal USA.

See Remand Determination at 10. Inasmuch as the production of hot-

rolled steel in the subject countries is controlled entirely by

ArcelorMittal, these practices, according to the Commission, “serve

as a powerful deterrent to significant volumes of subject imports

entering the U.S.” See id.

Specifically, the Commission relies on statements from two of

5
Mills owned by ArcelorMittal are responsible for virtually
all production of subject hot-rolled steel in Kazakhstan, Romania
and South Africa. See Final Determination at 44 n.255.
6
Mittal USA is the composite of acquisitions and
consolidations of former U.S. steel companies owned and operated
by Mittal Steel Co. NV. In 2006, Mittal Steel Co. NV merged with
Arcelor SA, creating the new entity ArcelorMittal International.
See Final Determination at 17 n.88. Over six billion dollars were
spent in acquiring the companies that make up Mittal USA, which
accounts for approximately [[ ]] of Arcelormittal’s worldwide
production (this figure includes ArcelorMittal’s U.S. and
Canadian based operations). See ArcelorMittal Factual Submission
on Remand, ex. 7 (CR 433R); Remand Determination at 13.
Court No. 07-00454 Page 11

ArcelorMittal’s corporate officers. The first, Louis L. Schorsch,

the company’s president and chief executive officer, provided

testimony during the hearing describing the approval required for

the entry of merchandise from other ArcelorMittal mills.7 See

Administrative Record, Tr. at 218-19 (PR 253). The second, an

affidavit from [[

]] discusses the factors ArcelorMittal

considers in deciding whether or not to export to the United States

merchandise produced in overseas ArcelorMittal facilities.8 See

ArcelorMittal Factual Submission on Remand, Ex. 8, ¶ 5 (CR 433R).

In addition, the ITC identifies empirical data from the importer

questionnaires which indicate that U.S. hot-rolled steel imports by

ArcelorMittal decreased noticeably subsequent to the merger of

Arcelor SA and Mittal Steel Co. NV. See Remand Determination at

7
The relevant portions of Schorsch’s testimony include the
statement “Now, we do import some material into the [S]tates in a
variety of products. The way that is done is: Nothing comes into
this market or, for that matter, any other market where we
operate, where we bring material in from another part of the
world without, let’s say, the approval and management of the
marketing, or the commercial organization, in that home country.
So the interest of the home country takes precedence.” Hearing
Tr. pp. 218-19 (PR 253).
8
[[

]] ArcelorMittal Factual Submission on
Remand, Ex. 8, ¶ 5 (CR 433R).
Court No. 07-00454 Page 12

12. This, says the Commission, is the effect of ArcelorMittal’s

corporate strategy which perceived that maintaining the

profitability and market share of Mittal USA was in its overall

interest. See id.

In response to Plaintiffs’ theoretical model showing how

ArcelorMittal would likely benefit from subject imports even if

doing so caused harm to Mittal USA, the Commission found this

scenario “lacking in probative value.” Id. at 14. Citing the lack

of any documentation to support the figures reported, the ITC

argues that even a slight variation of these figures results in

adverse financial consequences for ArcelorMittal. Moreover, the

ITC points to the difficulty in precisely gauging the price effects

of subject imports in such a manner as to calculate accurately the

level of imports necessary to achieve such a favorable result. See

id. at 15.

By contrast, Plaintiffs argue that the record does not support

the premise that ArcelorMittal will restrain subject imports from

lower production cost facilities if such imports would maximize

overall corporate profits. See Nucor Corporation’s Comments on

Remand Determination (“Nucor Comments”) at 9. As Plaintiffs recite

the record, the evidence demonstrates that if ArcelorMittal can

produce and sell steel for consumption in the U.S. more profitably

through its mills overseas, “thereby increasing company-wide

profits, it will do so.” Id. According to this theory, any
Court No. 07-00454 Page 13

potential harm to Mittal USA would be outweighed by the benefit to

Arcelormittal’s overall operations. Plaintiffs argue that it is a

core principal of the director/officer’s fiduciary duty to maximize

profits of the entire company for the benefit of its shareholders.

See id. This basic tenet of corporate law is discussed in two

affidavits submitted by Plaintiffs. The first, [[

]] discusses the obligation a corporate officer has

to his shareholders, which is the maximization of corporate profits

even at the expense of one of its subsidiaries. See Nucor Factual

Submission on Remand, Attachment 1, Affidavit of [[ ]] ¶

3 (CR 434R) (“I have never witnessed a company make a decision that

benefits its subsidiary at a cost to overall operational profits.”)

The second, Michael Meyers, the general manager of sales of U.S.

Steel, speaks to the “imperative that the producer do what is in

the best interest of its overall operation, not that of each

affiliated entity.” Nucor Comments at 10; U.S. Steel Factual

Submission on Remand, Affidavit of Michael Meyers, ¶ 5 (CR 435R).

Thus, according to Plaintiffs, “a rational business model requires

companies to maximize profits for the entire enterprise, rather

than protecting one business unit at the expense of total corporate

profits.” Nucor Comments at 10.

In support of this assertion, U.S. Steel presented two

hypothetical profit maximization scenarios purporting to show how

ArcelorMittal could serve its overall corporate interest by
Court No. 07-00454 Page 14

importing hot-rolled steel from the subject countries, while

concomitantly causing U.S. prices to fall. See Comments on the

Remand Determination Filed by United States Steel Corporation

(“U.S. Steel Comments”) at 11.

C. Analysis

During a five-year review, the ITC determines whether

revocation of an antidumping or countervailing duty 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 making this decision, the Commission “is required to consider

whether the likely volume, price effect, and impact of imports of

the subject merchandise on the industry will be significant if an

order is revoked.” United States Steel Corp. v. United States, 32

CIT ___, 572 F. Supp. 2d 1334, 1341 (2008) (internal citation

omitted). Plaintiffs argue that the ITC made several erroneous

findings which it contends are not supported by substantial

evidence. U.S. Steel and Nucor attack the substantiality of the

Commission’s likely volume determination by offering their own

evidence in support of an alternative result. Essentially,

Plaintiffs claim that the testimony on which they rely is a more

adequate basis from which to draw a conclusion. The task for the

reviewing court, however, is not to evaluate the evidence the

Commission collects during its review, or to decide the weight to

be assigned to a particular piece of evidence. See United States
Court No. 07-00454 Page 15

Steel Group v. United States, 96 F.3d 1352, 1357 (Fed. Cir. 1996).

It is the Commission’s task to evaluate the evidence it collects in

conducting an investigation or review, and “certain decisions, such

as the weight to be assigned a particular piece of evidence, lie at

the core of that evaluative process.” See id.

In the case at bar, the Commission acted within its

discretionary authority when it discounted the probative value of

Plaintiffs’ profit maximization scenarios. On the basis of the

data that was compiled with respect to the risk of adverse price

effects on the circumstances of Plaintiffs’ hypothetical, the

Commission evaluated the competing economic data to reach a well-

supported conclusion. The risk of adverse price effects may well

be considered high in instances, such as the one here, where there

is a high degree of interchangeability between hot-rolled steel

from a variety of sources. Thus, the likelihood that prices could

be driven to a point that would adversely affect both ArcelorMittal

and Mittal USA is significant. In addition, the Commission now

points to data from the importer questionnaires which reveal that

imports from ArcelorMittal mills overseas were noticeably [[ ]]

in interim 2007 than in interim 2006. See Remand Determination at

12 n.45; see also Mittal Steel NA, Importer Questionnaire at 11-13

(CR 155); Arcelor International, Importer Questionnaire at 10-11

(CR 137). Such evidence is consistent with Defendant’s argument

concerning the effects of ArcelorMittal’s corporate policy of
Court No. 07-00454 Page 16

providing Mittal USA with the right to veto any imports from other

ArcelorMittal production facilities. While it is true, as

Plaintiffs point out,9 that there are circumstances under which

ArcelorMittal could conceivably increase its overall profits in the

U.S. market even if doing so caused harm to Mittal USA, the mere

plausibility of a set of given circumstances is insufficient to

overcome the high barrier to reversal of an agency determination.

ArcelorMittal’s fiduciary obligations to its shareholders and its

role as corporate parent are not mutually exclusive. The welfare

of one does not inevitably result in the demise of the other, and

Plaintiffs’ have offered only innuendo and speculation as evidence

to the contrary. The ITC’s reliance on testimony from

ArcelorMittal officials about the policies and practices of which

these witnesses have first hand knowledge cannot be considered

unreasonable. Therefore, all the agency has done is reach an

alternate conclusion based upon data it has assigned greater

evidentiary weight.

In its prior opinion, the Court voiced concerns over the

sufficiency of the ITC’s explanation for its findings on

ArcelorMittal’s likely behavior upon revocation of the orders at

issue here. On remand, however, the Commission has proffered

9
The two hypothetical scenarios provided by U.S. Steel
demonstrate that there are a number of potential combinations of
prices and costs that could incentivize the importation of hot-
rolled steel from the subject countries. See U.S. Steel Comments
at 11.
Court No. 07-00454 Page 17

additional grounds on which it based its original decision. This

explanation is sufficient to meet the ITC’s burden of offering a

rational basis between the facts found and the choices made.

Accordingly, the Court finds the Commission’s determination, in

this regard, to be supported by substantial evidence and otherwise

in accordance with law.

2. Regional Imports and Pricing Practices

A. The Commission’s Determination on Remand

This Court previously objected to the basis cited for the

Commission’s determination that significant imports into any region

of the country are likely to have a disruptive impact on the

overall U.S. market, and that any price impact on Mittal USA’s

competitors would also negatively impact Mittal USA. Nucor, 33 CIT

at ___, 605 F. Supp. 2d 1361, 1379. The Court explained that the

“only data” cited by the Commission in support of its conclusions

was “a chart listing producers and importers by region,” and that

with nothing more to rely upon, the Commission’s volume

determination could not be sustained. Id. (citing Final

Determination at Table II-1 (PR 453)). The Court also pointed to

the testimony of “an executive of ArcelorMittal that its imports

may affect competitors in this market who are in different

geographies or serve different market segments, and so on.” Id.

Accordingly, the Court instructed the Commission to reassess and

further substantiate its findings. Id. 33 CIT at ___, 605 F. Supp.
Court No. 07-00454 Page 18

2d 1361, 1381.

On remand, the Commission explained that the record does not

reveal any regional markets within the United States to which

ArcelorMittal could direct subject imports while maintaining

stability in the U.S. market overall and protecting its domestic

subsidiary from harm. Remand Determination at 17. The Commission

obtained additional information from Mittal USA during the remand

proceeding and concluded that “the record does not indicate any

gaps in Mittal USA’s geographic coverage.” Id. at 17.

Additionally, the Commission obtained nationwide pricing data

for hot-rolled steel and determined that while prices in the United

States show some regional variation (owing to freight costs and

distances between producers and purchasers), the prices in the

different regions show a high degree of correlation. Id. at 19.

The Commission therefore concluded that even if ArcelorMittal were

to bring subject imports to a region of the United States where

Mittal USA does not produce hot-rolled steel, “any significant

influx of imports into a particular region that would cause a

regional price dislocation would affect prices nationwide –

including those in the regions where Mittal USA does operate

mills.” Id. at 20.

Finally, the Commission again considered whether there was any

evidence that ArcelorMittal might manufacture niche products in the

subject countries that it could import to compete with Mittal USA’s
Court No. 07-00454 Page 19

competitors. In concluding that this was unlikely, the ITC pointed

to three pieces of evidence. First, in the Final Determination,

the ITC found a high degree of interchangeability between the

products, regardless of source. Id. at 21. Second, there were no

purchasers of hot-rolled steel that indicated in response to ITC

questionnaires that Kazakhstan, Romania or South Africa were the

source of any unique niche products. Id. Finally, witnesses for

Nucor and U.S. Steel could not identify any niche products that

ArcelorMittal is manufacturing in the subject countries. Id.

B. Parties’ Arguments

In response, Plaintiffs point to the testimony of witnesses

Louis Schorsch and [[ ]]. Schorsch testified that

subject imports “may affect competitors in this market who are in

different geographies or serve different market segments, and so

on.” Nucor Comments at 13; U.S. Steel Comments at 20. Whereas

[[ ]] suggested that ArcelorMittal is capable of supplying

particular market segments or geographic regions that Mittal USA

would be unable to supply. Nucor Comments at 13; U.S. Steel

Comments at 20-21. Plaintiffs are of the opinion that these

statements work as something of an admission against interest by

ArcelorMittal, and should be dispositive on the ITC’s likely volume

determination.

Both Nucor and U.S. Steel, once again, rely on the

hypothetical scenarios purporting to show how ArcelorMittal could
Court No. 07-00454 Page 20

benefit financially from importing subject goods, in spite of

having a large domestic presence in the U.S. market. Nucor

Comments at 15; U.S. Steel Comments at 25. Nucor also emphasized

that a “large percentage of Mittal USA’s domestic sales are sold on

a contract basis.” Nucor Comments at 16. Nucor reasoned that if

a [[ ]] amount of production by Mittal USA is already

accounted for by long-term contracts, then Mittal USA is only

competing on the spot market for a portion of its overall

production, making it easier to import subject goods without

harming itself. Id.

Friend of the Court Mittal USA rebuts Plaintiffs’ arguments by

invoking the pricing data and customer list Mittal USA provided to

the Commission on remand which demonstrated “largely identical”

prices by region, and a “widespread” customer base. ArcelorMittal

USA Rebuttal Comments (“Mittal USA Rebuttal Comments”) at 8.

Mittal USA also provided evidence of its “actual business

practices” of “ensur[ing] that prices in a geographic region that

might be served by imports of an affiliate were consistent with

prices in other regions in which Mittal Steel USA was selling, and

did not disrupt U.S. market prices.” Id. at 9.

Defendant, ITC, rebuts Plaintiffs’ arguments by pointing out

that it explicitly considered the testimony of the two

ArcelorMittal executives in its Remand Determination. ITC Rebuttal

Comments at 16 (citing Remand Determination at 17). Defendant
Court No. 07-00454 Page 21

points out that neither of the witnesses affirmatively declared

that there were “U.S. regional markets or specialty products that

Mittal USA could not serve or supply,” but instead had phrased

their comments “in the conditional.” Id. The Commission also

defended its consideration of the niche products argument by

pointing out that neither Nucor nor U.S. Steel identified “any hot-

rolled steel products that they produce, but Mittal USA does not.”

Id. at 20. The ITC found this inability of Plaintiff and

Plaintiff-Intervenor to be weighty, and thereby concluded that

“there are no such actual products.” Id.

C. Analysis

The Court finds that there is substantial evidence in the

record to support the Commission’s finding that significant imports

in any region of the country are likely to have a disruptive impact

on the overall U.S. market. The strongest evidence that the ITC

points to in support of this finding consists of pricing data

submitted by Mittal USA on remand. The ITC analyzed the regional

price data in pairs, and concluded that the correlation coefficient

for prices between the West and Midwest, the Midwest and Gulf, and

the Gulf and the West, each exceeded 0.98, respectively. Remand

Determination at 20 n.69. It is true that the ITC’s analysis does

not include any empirical historical observation of the actual

national price effect of some burst of regionally-confined imports

in the past. As such, it would be difficult to state with absolute
Court No. 07-00454 Page 22

certainty what effect an influx of regionally-confined imports

would have on nationwide prices. However, the Commission did not

attempt to make such a bold prognostication. Instead, it merely

concluded that “any significant influx of imports into a particular

region that would cause a regional price dislocation would affect

prices nationwide.” Id. at 20 (emphasis added). The Court finds

that a reasonable mind would accept the high level of correlation

between regional prices as adequate support for this conclusion,

formed as a conditional statement, and therefore constitutes

substantial evidence within the meaning of the standard of review.

See Huaiyin Foreign Trade Corp., 322 F.3d at 1374.

The Court finds that there is also substantial evidence in the

record to support the Commission’s finding that pricing practices

that would negatively impact Mittal USA’s competitors are likely

also to impact Mittal USA. Specifically, the Court notes the

evidence indicating that there are no regional markets in the

United States to which ArcelorMittal could direct imports while

maintaining stability in the U.S. market and protecting its

domestic subsidiary from harm. On remand, Mittal USA submitted a

chart purporting to show domestic shipments of hot rolled steel

more than 1000 miles from Chicago. See ArcelorMittal Factual

Submission on Remand, Ex. 6, (CR 433R). This chart indicates that

between 2005 and the first quarter of 2007, Mittal USA shipped hot

rolled steel to 12 continental states that have some portion of
Court No. 07-00454 Page 23

land further than 1000 miles from Chicago. See id. The chart

clearly indicates that Mittal USA’s domestic shipments reach all

regions of the United States. The Court further notes the

Producers’ Questionnaire, filled out by Mittal USA, explicitly

indicates that every geographic market area in the United States is

served by the firm’s hot-rolled steel. See Mittal USA Producers’

Questionnaire, Part IV-B-9 (CR 126). The Court finds that taken

together, the questionnaire response and chart constitute more than

a mere scintilla of evidence in support of the ITC’s conclusion

that there are no regions of the U.S. where ArcelorMittal could

import hot rolled steel, to which Mittal USA does not already ship

domestically. See Altx, Inc., 370 F.3d at 1116.

The Court also finds that the arguments advanced by Plaintiff

and Plaintiff-Intervenor do not effectively undermine the

Commission’s conclusion. Specifically, the ITC has given

appropriate consideration to the testimony of Louis Schorsch and

the affidavit of [[ ]] which are the subject of much ado

by Plaintiffs. See Remand Determination at 16-17. Not only is it

inappropriate for the Court to re-weigh this evidence, or to

require the ITC to do so, but when the statements are viewed in

context, it is clear that they do not amount to the veritable

admissions against interest as Plaintiffs suggest.10 As for

10
Schorsch prefaces his statement about the effect imports
may have on ArcelorMittal’s competitors by explaining that import
decisions are made in a way that ensures the price and volume
Court No. 07-00454 Page 24

Plaintiffs’ contentions that “a large percentage” of Mittal USA’s

sales are made pursuant to contract, and therefore do not compete

on the spot market; the Court notes Plaintiffs’ own concession

that, “large percentage” or not, [[ ]] of Mittal USA’s sales

do compete on the spot market–-a percentage large enough to ensure

Mittal USA’s ongoing concern with spot market prices. Nucor

Comments at 16. In sum, the Court sustains this aspect of the

ITC’s volume determination as supported by substantial evidence and

otherwise in accordance with law.

3. Prior Business Practices

A. The Commission’s Determination on Remand

In its remand instructions, the Court required the Defendant

to further explain the behavior of ArcelorMittal and its

predecessor company, Ispat International, with respect to their

past practice of exporting to countries in which they maintained

production facilities.11 Consistent with its earlier findings, the

levels will not disrupt Mittal USA’s domestic operations. See
Administrative Record, Tr. at 219 (PR 253) [[ ]] statement
about the decision to permit ArcelorMittal International to serve
certain geographic regions outside of Mittal USA’s scope was
framed strictly in the hypothetical. See ArcelorMittal Factual
Submission on Remand, Ex. 8, ¶ 6 (CR 433R).
11
During the original period of investigation, Ispat
International owned Ispat Inland, Inc. (a U.S. producer) as well
as Ispat Karmet, the only hot-rolled steel producer in
Kazakhstan. Within this period, U.S. imports from Kazakhstan went
from 130,329 short tons in 1998 to 192,470 short tons in 2000, an
increase of 47.7 percent. See Final Determination at I-8 (Table
I-1) (PR 453).
Court No. 07-00454 Page 25

Commission determined that the record does not support an inference

that ArcelorMittal will likely make significant shipments of hot-

rolled steel from its low cost production facilities into the U.S.

market. See Remand Determination at 26. Unlike its previous

position, however, the ITC does not rely solely on a market share

analysis of Ispat and its affiliates. Instead, the Defendant

identifies changes in the policy, structure and export trends of

the ArcelorMittal organization since the original period of

investigation.

B. Parties’ Arguments

On remand, the Commission offers three distinct evidentiary

points as the basis for its determination. First, Arcelormittal

exerts a more centralized system of control over its exports from

affiliated producers than did its predecessor Ispat International.

See Remand Determination at 23. According to the ITC, this is an

important change in the evolution of Mittal USA and distinguishes

its practices from those of Ispat. After the formation of

ArcelorMittal the newly formed entity continued the policy, [[

]] of not using third-party trading companies.12

See id. Prior to the adoption of this policy, whereby Ispat - and

ultimately ArcelorMittal - became the solitary sales agent for

12
[[

]] Remand
Determination at 23.
Court No. 07-00454 Page 26

corporate affiliates abroad, imports of subject merchandise from

these affiliates were not controlled by the corporate parent. See

id. The efficacy of this policy, argues Defendant, is evidenced by

the decrease in quantity of hot-rolled steel imported by Ispat from

Kazakhstan during the original period of investigation. Because

Ispat was responsible for approximately [[ ]] of the

imports from Kazakhstan in 1998, but only [[ ]] of those

imports in 2000, the increase in subject imports during the

original period of investigation was due not to Ispat, but rather

the third-party traders that the new corporate policy was intended

to eliminate. Compare Final Staff Report at Table I-1 (CR 376)

(U.S. import data from Kazakhstan during original period of

investigation), with ArcelorMittal Factual Submission on Remand,

Ex. 5 (CR 433R) (breakdown of hot-rolled steel imports from

Kazakhstan by Ispat during the original period of investigation);

see also Remand Determination at 23-24.

Second, the Commission restates its previous position that

Mittal USA has a [[ ]] larger presence in the U.S. market than

did Ispat Inland, and that this larger market share provides a

strong incentive to strictly adhere to its stated policy of

maintaining market stability through the restriction of imports

from affiliated producers. See Remand Determination at 24.

Finally, in accordance with the court’s instructions, the ITC

examined the pattern of Mittal USA’s exports to Western Europe in
Court No. 07-00454 Page 27

light of the presence of other ArcelorMittal production facilities.

The ITC can identify only one shipment of hot-rolled steel to a

European country in which ArcelorMittal maintained a presence, a

single 12,000 ton shipment to Belgium.13 See Remand Determination

at 25. Therefore, the Commission argues, the record does not

support the inference that ArcelorMittal will likely export

significant shipments of subject merchandise to countries in which

it operates hot-rolled steel production facilities. See id. at 26.

In Plaintiffs’ first assertion of error, they posit that the

behavior of the Ispat organization prior to the assignment of the

antidumping and countervailing duty orders is “far more probative”

of ArcelorMittal’s future behavior than crediting a policy

instituted after the orders were put in place. U.S. Steel Comments

at 28. Therefore, Plaintiffs argue, the Commission is in error to

give more weight to policies made effective after the institution

of relief as opposed to those actions taken when the subject

countries had unlimited access to the U.S. market - a condition

that would be replicated if the orders are revoked. See id. For

example, the 47.7 percent increase in imports of hot-rolled steel

by Ispat from Kazakhstan, during the original period of

investigation, is identified by Plaintiffs as evidence of the

likely future behavior of ArcelorMittal based upon the theory that

13
Because the questionnaires relied on by the Commission
did not break down export quantities by destination, there is a
dearth of record evidence on this point.
Court No. 07-00454 Page 28

should the orders be revoked, ArcelorMittal will similarly increase

the volume of hot-rolled steel exported to the U.S. market. See

Nucor Comments at 17.

Next, Plaintiffs challenge the ITC’s conclusion that the

record is limited to only one specific instance in which

ArcelorMittal exported hot-rolled steel to a European country

wherein it maintained a production facility. As alleged by

Plaintiffs, “the record actually contains very significant evidence

about Mittal USA’s exports to Europe.” U.S. Steel Comments at 29.

The evidence to which Plaintiffs refer includes two press releases;

one in which Mittal USA acknowledges the previously identified

12,000 ton shipment to Belgium; and another describing Mittal USA’s

intention to become an active exporter of steel. See U.S. Steel’s

Post-Hearing Brief, Ex’s. 15, 16 (PR 328). The third piece of

evidence Plaintiffs cite to is the testimony of Louis Schorsch who

speaks briefly about exports to Western Europe. See Administrative

Record, Tr. at 334 (PR 253). Plaintiffs suggest that this evidence

is indicative of ArcelorMittal’s intention to take advantage of the

relatively attractive market conditions in the U.S. even if that

market contains another ArcelorMittal facility. See U.S. Steel

Comments at 30.

Lastly, Plaintiffs discount the Commission’s reiteration of

its market analysis claim, arguing that it is essentially the same

explanation rejected by the Court in its previous opinion. See
Court No. 07-00454 Page 29

U.S. Steel Comments at 27; Nucor Comments at 18.

C. Analysis

In evaluating whether the likely volume of subject imports

will contribute to the recurrence or continuation of material

injury within a reasonably foreseeable time, the ITC is statutorily

required to take into account numerous factors including its

previous injury determination conducted prior to the order being

issued. See 19 U.S.C. § 1675a(a)(1)(A). As the Statement of

Administrative Action accompanying the statute explains, the

purpose of this inquiry is to examine the most recent period of

time in which subject imports competed without the discipline of an

antidumping or countervailing order in place. See Uruguay Round

Agreements Act, Statement of Administrative Action (“SAA”), H.R.

5110 (H.R. Doc. No. 103-316), reprinted in 1994 U.S.C.C.A.N. 4040,

4209. Section 1675a(a)(1)(A) does not, however, require a “full

blown reconsideration” of the original injury determination in a

sunset review. See Consolidated Fibers, Inc. v. United States, 30

CIT 1820, 1823, 465 F. Supp. 2d 1338, 1341 (2006). Instead, that

provision simply requires the Commission take into account its

findings as to volume, price, and impact of subject imports prior

to the institution of an order. Neither the statute nor its

legislative history direct the ITC to distinguish every factor of

its original investigation findings from those made in a sunset

review. Presently, the ITC did not disregard the findings from its
Court No. 07-00454 Page 30

original investigation, but rather cited to such findings

repeatedly. See, e.g., Remand Determination at 22-25. The

Commission discussed its negative determination in terms of the

likely volume of imports from the subject countries while

incorporating and distinguishing various aspects of the original

investigation. See id. at 21-26. Therefore, Plaintiffs’ claim

that the behavior of ArcelorMittal’s predecessor, Ispat, is far

more probative than the current practices of the corporation and

its affiliates, merely replicates their previous position urging

the Court to re-weigh the evidence considered by the Commission.

Once again, the Court is disinclined to accept Plaintiffs’

invitation to displace the agency’s interpretation of that evidence

with its own.

The Court rejects Plaintiffs’ argument on additional grounds.

Namely, that they have pointed to no evidence impeaching the

credibility of the data relied on by the Commission. Other than

the single 12,000 ton shipment to Belgium, the press reports cited

by Plaintiffs make no mention of any actual exports of hot-rolled

steel to a country with an ArcelorMittal affiliate. At most, the

statements relied upon by Plaintiffs indicate a willingness on the

part of Mittal USA to expand its export activity to parts of

Western Europe, which may or may not include countries in which

ArcelorMittal has a production facility. Such vague and

circumstantial evidence is simply insufficient to overcome
Court No. 07-00454 Page 31

Plaintiffs’ high burden in this case. In this way, the witness

testimony, e-mail correspondence and producer’s questionnaire

utilized by the Commission in making its determination must

preponderate. Accordingly, the Court holds that the ITC adequately

investigated and explained the basis for its finding that the prior

business practices of ArcelorMittal’s predecessor, Ispat

International, do not support an inference that ArcelorMittal will

likely make significant export shipments to other countries in

which it operates hot-rolled steel production facilities.

4. Neglected Volume Considerations

A. The Commission’s Determination on Remand

This Court previously found that there were several pieces of

evidence in the record that had not been properly considered by the

Commission in its initial sunset review determination, and that if

considered, may have weighed against revoking the relevant orders.

On remand, the ITC was instructed to “reassess and further explain

evidence opposed to the ITC’s volume determination, including

excess capacity, export orientation of the Mittal Countries’

producers, attractiveness of the U.S. market, and capacity

increases in alternative export markets.” Nucor, 33 CIT at ___,

605 F. Supp. 2d 1361, 1382.

With respect to excess capacity of the subject countries, the

Commission determined that while the Court had correctly identified

excess capacity at the end of the period of review, it was not
Court No. 07-00454 Page 32

persuaded that the subject producers could or would utilize that

capacity. Remand Determination at 26-27. In support, the

Commission pointed out that through the duration of the period of

investigation and the period of review, capacity utilization

remained well below maximum. Id. at 27. On this basis, the

Commission concluded that the subject producers’ excess capacity is

nothing more than “theoretical.” Id. The Commission also

concluded that “ArcelorMittal lacks the incentive to increase

capacity utilization . . . in light of its corporate policies.”

Id. at 28. Moreover, the excess capacity of the subject countries

is [[ ]]

and Mittal USA has shown higher levels of capacity utilization as

well. Id.

With respect to export orientation of the subject countries,

the ITC found that exports, when viewed as a proportion of total

shipments, remained “relatively stable throughout the period of

review, ranging between [[ ]] percent and [[ ]] percent

during the six calendar years.” Id. at 28-29. The Commission

found that these percentages did not “signify that the subject

industries are heavily export-oriented.” Id. at 29. The ITC also

noted that the majority of these subject producers’ exports were

directed to regions outside the U.S.: from Kazakh and Romanian

producers to [[ ]], from Romania to

[[ ]], and from South Africa [[
Court No. 07-00454 Page 33

]] Id. at 29 n.104.

With respect to the attractiveness of the U.S. market, the

Commission included a footnote in its remand determination

acknowledging that the U.S. market has a “relatively open nature”

and “higher prices than some other world markets.” Id. at 29

n.105. However, the Commission reasoned that in light of

ArcelorMittal’s U.S. and Canadian operations and stated corporate

policies, the attractiveness of the U.S. market was unlikely to

incentivize the subject producers to target the U.S. market. Id.

With respect to capacity increases in export markets,

specifically China, the ITC’s finding was twofold. First, China

had not been a primary export market for any of the subject

producers before it shifted from being a net-importer to being a

net-exporter, so the subject countries did not lose an export

market as a result of China’s shift. Id. at 29. Second, the ITC

found that the subject countries’ primary export markets were not

in southeast Asia, where it reasoned China would be directing most

of its exports. Id. Consequently, the ITC determined that the

subject countries did not face increased competition from China as

a result of China’s shift in status from net-importer to net-

exporter. Id. at 29-30.

B. Parties’ Arguments

Plaintiffs focus their remand comments on excess capacity by

highlighting what appears to be large excess capacity in the
Court No. 07-00454 Page 34

subject countries. Nucor points out that the subject countries

experienced a “nearly [[ ]] increase in capacity” during

the period of review, which, in absolute terms, is “[[

]] volume of subject imports from the Mittal Countries during

the last year of the period of investigation.” Nucor Comments at

20. Accordingly, Nucor asserts that the Commission’s conclusion

that the subject countries have experienced “‘at most incremental

growth in capacity and incremental declines in capacity utilization

in the subject countries,’” is fallacious. Id. (quoting Remand

Determination at 8); see also U.S. Steel Comments at 31-35.

Nucor also takes issue with the Commission’s characterization

of the subject countries’ excess capacity as merely “theoretical.”

Nucor Comments at 21. Nucor argues that data relating to excess

capacity was obtained by questionnaires which “specifically

instructed the Mittal country producers to report actual, not

theoretical, capacity, and [that] there is no evidence to suggest

that they did not report actual capacity.” Id. U.S. Steel points

out that the questionnaire instructions specifically request that

the respondent provide “‘[t]he level of production that [the

producer] could reasonably have expected to attain during the

specified periods.’” U.S. Steel Comments at 15 (quoting Foreign

Producer Questionnaire Instructions at 8 (PR 132)).

Nucor and U.S. Steel also both push back on the Commission’s

finding about the export orientation of the subject countries.
Court No. 07-00454 Page 35

Nucor argues that Romania, Kazakhstan and South Africa export a

“[[ ]] of total shipments than [[

]] and [that] in its

affirmative determination for China, India, Indonesia, Taiwan,

Thailand, and Ukraine, the Commission relied on subject producers’

export orientation to support continuation of the orders.” Nucor

Comments at 22-23. Nucor claims that it is “arbitrary for the

Commission to cite a particular factor in support of continuation

in one instance, but discount it entirely in another wherein the

evidence in support is greater.” Id. at 23. U.S. Steel argues

that the figures the Commission identified as reflecting the

proportion of subject producers’ export shipments to total

shipments ([[ ]] percent), are misleading because [[

]] U.S. Steel Comments at 32-33. U.S. Steel

claims that the proportion of export shipments to commercial

shipments suggests [[

]] Id. at 33.

With respect to the attractiveness of the U.S. market, U.S.

Steel charges that the extent of the Commission’s treatment of this

issue – a footnote - is insufficient. Id. at 33-34. And last,

U.S. Steel challenges the Commission’s remand determination on the
Court No. 07-00454 Page 36

capacity increases of alternative export markets, namely, China.

U.S. Steel claims that in 2006, [[ ]] percent of exports from

the subject producers “went to Asian markets other than China.”

Id. at 35. In the same year, of “the Chinese producers who

responded to the Commission’s questionnaire” 57.7 percent of their

exports were shipped to this same market. Id. U.S. Steel thereby

concludes that Chinese producers are focused on a market that is

critical to producers in the Mittal Countries. Id.

In its rebuttal comments, the Commission reiterated that

during the nine-year period examined by the ITC, [[

]] tons of excess capacity in the subject countries

was never utilized. ITC Rebuttal Comments at 26. The ITC also

acknowledged that U.S. Steel is correct in pointing out that a

relatively large portion of the subject countries’ shipments were

exports, but pointed out that this proportion of exports during the

period of review remained “relatively stable.” Id. The Commission

attempted to defend its characterization of the subject countries’

excess capacity as “theoretical” by emphasizing that in using that

term, it only meant to draw attention to the fact that the subject

producers have no history of operating at full capacity, and are

unlikely to do so in the near future. Id. at 27. Moreover, the

ITC asserts that the mere existence of excess capacity in the

subject producers “is insufficient to mandate a finding of

significant likely subject import volume.” Id. at 28 (citing Nucor
Court No. 07-00454 Page 37

Corp. v. United States, 32 CIT ___, 569 F. Supp. 2d 1328, 1349

(2008)).

With respect to U.S. Steel’s arguments about the effect of

China on the subject producers, the ITC points out that it

considered China’s production extensively, and determined that the

subject producers’ exports to third countries were not affected by

increasing exports from China. Id. at 28-29. The Commission also

extensively and repeatedly emphasized its belief that ArcelorMittal

will abide by corporate policies to have producers focus on local

markets, to limit production to promote market stability, and to

permit Mittal USA veto power over subject imports. See generally

id. at 26-31. The Commission concludes by accusing Nucor and U.S.

Steel of wanting the Court to do nothing more than re-weigh the

evidence that the Commission already considered. Id. at 31.

C. Analysis

The Court shares Plaintiffs’ concerns about the Commission’s

characterization of the excess capacity of the subject countries as

“theoretical,” to the extent that this suggests that subject

producers are incapable of utilizing the excess capacity that they

have reported. See Remand Determination at 27. As U.S. Steel

pointed out, the subject producers were explicitly instructed to

provide data about the level of production that the producer “could

reasonably have expected to maintain during the specified periods.”

Foreign Producer Questionnaire Instructions at 9. Moreover, closer
Court No. 07-00454 Page 38

inspection of the Foreign Producer Questionnaire responses provided

by the Mittal affiliated producers in Romania, South Africa and

Kazakhstan confirms that all three producers complied with that

instruction. In their responses, each Mittal affiliated subject

producer indicated that production capacity had been adjusted

downward to take into account lost production time due to planned

and unplanned repairs, delays, maintenance and other shutdowns.

See Foreign Producer Questionnaire of Mittal Steel Galati at Ex. 3

(CR 113); Foreign Producer Questionnaire of Mittal Steel South

Africa at 23 (CR 78); and Foreign Producer Questionnaire of

Temirtau at 15 (CR 145). In light of what appear to be carefully

calculated responses, the ITC’s characterization of subject

producer excess capacity as merely “theoretical” is problematic.

Presumably, the purpose of the Commission’s query into subject

producer excess capacity during a sunset review is to determine

whether the subject producers would be capable of ramping up

production if the orders are permitted to expire. While a report

of little or no excess capacity would weigh in favor of permitting

the antidumping orders to sunset, a report of significant excess

capacity may be a legitimate cause of concern for the domestic

industry. The Commission should not seek to diminish the weight of

reported subject producer excess capacity by characterizing it as

“theoretical,” and thereby implying that the subject producers are

somehow incapable of utilizing their reported unused capacity. The
Court No. 07-00454 Page 39

numbers speak for themselves.

Nevertheless, the Court’s objection is primarily with the

Commission’s terminology. The excess capacity figures do not

suggest that the subject producers are incapable of expanding

output, but when considered in light of historically low capacity

utilization rates, there is reason to believe that the subject

producers are unlikely to expand output, even upon revocation of

the orders. Moreover, the Court also finds significant that the

scale of the subject producers’ excess capacity is [[ ]] by

the excess capacity of Mittal USA. See Remand Determination at 28.

Given ArcelorMittal’s policy to source locally, these figures

support the Commission’s conclusion that dumping or injury is not

likely to recur if the orders are revoked.

With respect to export orientation of the subject producers,

the Court finds that the arguments of Plaintiff and Plaintiff-

Intervenor are ineffective. First, U.S. Steel’s contention that

the percentages cited by the Commission [[

]] rather than of total shipments, as

the Commission claims, is untrue. See U.S. Steel Comments at 32.

Based on the data found in the Final Staff Report at Tables IV-31,

IV-35, and IV-40, the Court finds that the percentage of exports as

a share of total shipments does, indeed, range from [[
Court No. 07-00454 Page 40

]] percent.14 Moreover, U.S. Steel fails to offer a compelling

reason why this figure does not accurately represent the extent to

which the subject producers are export oriented, and why the better

ratio to consider is total exports to total commercial shipments.

Surely, the volume of production that is internally consumed is

pertinent to the question of how export-oriented a particular

producer is.15

Turning to Plaintiff’s concerns regarding export orientation,

the Court is similarly unconvinced. Plaintiff is correct that in

the Commission’s initial sunset review determination, the ITC

referred to the hot-rolled steel industries of Kazakhstan, Romania,

and South Africa, along with the six other countries for which

14
Total shipments is a composite figure that includes
internal consumption, commercial home market shipments, and total
exports. The figure for total shipments is usually close to, but
not identical to total production, the difference owing primarily
to carryover end of period inventories. In [[ ]], the total
exports from the Mittal countries totaled [[ ]] short
tons, while total shipments from the Mittal countries totaled
[[ ]] short tons, for a ratio of [[ ]] percent. In
[[ ]], by comparison, the total exports from the Mittal
countries totaled [[ ]] short tons, while total shipments
from the Mittal countries totaled [[ ]] short tons, for
a ratio of [[ ]] percent. See Final Staff Report at Table IV-
31, IV-35, and IV-40 (CR 376).
15
For example, suppose 98% of a subject producer’s total
shipments was internally consumed, 2% of total shipments were
exported, and nothing was shipped commercially to the home
market. Under U.S. Steel’s reasoning, such a producer would be
considered extremely export dependent, because all of its
commercial shipments are being exported. However, under the
Commission’s more logical analysis, it is clear that such a
producer is not that export-dependent at all, exporting a mere 2%
of total shipments.
Court No. 07-00454 Page 41

antidumping orders remained in place, as “export[ing] a large

percentage of total shipments.” Views of the Commission at 20 (CR

427). Context, however, is everything. In this portion of its

opinion, the Commission was deciding whether or not to cumulate the

respective subject countries for the purposes of the sunset review.

See id. at 13-29. Specifically, as a part of that inquiry, the

Commission was addressing the question of whether the subject

imports “are likely to have no discernible adverse impact on the

domestic industry in the event of revocation of orders covering

those imports.” Id. at 20. The Commission characterized the

percentage of exports from the Mittal Countries as “large” in the

course of deciding that imports from the Mittal Countries were not

likely to have no discernible adverse impact. In other words,

because of the specific question the Commission was addressing at

the cumulation stage, the bar had been set low. The Court finds

that it is not arbitrary, nor even inconsistent to characterize

export percentage as “large” because a country’s exports are not

likely to have no discernible adverse impact, and then

subsequently, to find that the same country is not “heavily export-

oriented” when those percentages fall in the range of [[

]] percent16. See id.; see also Remand Determination at 28-

16
The Court also notes that export orientation is not
considered in isolation, and that the percentages discussed above
are meaningless apart from considering absolute volumes. While
Kazakhstan, Romania and South Africa may have larger percentages
of exports to total shipments than the other six countries, in
Court No. 07-00454 Page 42

29.

Next, the Court considers the argument of Plaintiff-Intervenor

with respect to the attractiveness of the U.S. market. Ultimately,

the Commission has credited the testimony and data provided by

ArcelorMittal regarding its corporate policies to source hot-rolled

steel locally and to provide the domestic subsidiary veto power

over imports. Because the Court has already found that the

Commission’s acceptance of ArcelorMittal’s stated corporate

policies is supported by substantial evidence and otherwise in

accordance with law, the Court is satisfied with the agency’s

explanation of the attractiveness of the U.S. market. See

Discussion IV.1.C., supra.

On the issue of China’s shift from net-importer to net-

exporter status, this Court’s previous instructions to the

Commission consisted essentially of a requirement to address, and

at a minimum, to explain why China is irrelevant with respect to

the Mittal Countries. The Court finds that in the Commission’s

Remand Determination, it has thoroughly considered the evidence

about the shift in China’s import/export patterns. See Remand

Determination at 29-30. The Court agrees that the arguments of the

Plaintiff-Intervenor on this issue amount to nothing more than a

2006, total export volumes of the three countries was
[[ ]] short tons, while the export volume of the other
six countries was [[ ]] short tons. See Final Staff
Report at Table IV-31, IV-35, and IV-40 (CR 376); see also Views
of the Commission at 50 (CR 427).
Court No. 07-00454 Page 43

desire to re-weigh the evidence. While it is true that comparable

percentages of exports are directed to Asian markets other than

China from the Mittal Countries, on one hand, and from China, on

the other, the Court does not see reason to disturb the

Commission’s volume determination on that basis. For the foregoing

reasons then, the Court finds that the Commission’s determination

regarding excess capacity, export orientation, the attractiveness

of the U.S. market and China’s shift from net-importer to net-

exporter status to be supported by substantial evidence in the

record and otherwise supported by law.

5. Potential Price Effects

A. The Commission’s Determination on Remand

The Court predicated its remand instructions on the potential

price effects of the subject imports on the correlative effects of

the Commission’s faulty volume analysis. Because the relationship

between the imports’ potential price effects and their volume is

obvious, it logically follows that likely volume findings deemed

unsupported by substantial evidence would impact the agency’s

conclusions with regard to price effects. As a result, the ITC was

ordered on remand to reassess its potential price effects analysis

in accordance with the agency’s revised volume determination.

Consistent with its decision in the Final Determination, the

ITC concluded that upon revocation of the antidumping and

countervailing duty orders, the likely volume of subject imports
Court No. 07-00454 Page 44

will be small, and in light of ArcelorMittal’s efforts to price

these imports in a manner so as not to disrupt the U.S. market for

hot-rolled steel, there will not likely be significant underselling

of hot-rolled steel from the subject countries. See Remand

Determination at 32; see also Final Determination at 46.

B. Parties’ Arguments

Both Nucor and U.S. Steel advance arguments that are grounded

on the assumption that the Commission’s likely volume finding

cannot be sustained. As such, Plaintiffs aver, that finding cannot

support the agency’s likely price effects analysis. See U.S. Steel

Comments at 36; Nucor Comments at 23. Nucor further alleges that

the ITC disregarded significant pricing evidence, and cites to data

from the Final Determination demonstrating that the average unit

values17 (“AUVs”) of the subject countries’ home markets and third

country exports were [[ ]] than the AUV of U.S.

commercial shipments during the period of review. See Nucor

Comments at 23-24 n.9. Thus, Nucor maintains, the potential for

significant underselling of hot-rolled steel in the U.S. market

combined with the Commission’s recognition that even moderate

levels of undersold merchandise will have a significant price

suppressing or depressing effect, undermines the ITC’s analysis.

17
Average unit values are computed by multiplying, the
price of each product times the quantity sold, adding these
figures, and then dividing by the total number of products sold.
See United States Steel Group, 96 F.3d at 1364.
Court No. 07-00454 Page 45

See id. at 24.

The Commission bases its price effects determination primarily

on the reaffirmation of its likely volume analysis. That is to

say, while ArcelorMittal may import modest levels of hot-rolled

steel into the U.S. from its overseas affiliates, the volume of

such imports would not be significant. Moreover, Defendant claims,

the stated policy of ArcelorMittal is to ensure that when the

company did import products from its affiliates [[

]] Remand

Determination at 32.

C. Analysis

Having already found that the Commission’s likely volume

determination is supported by substantial evidence and otherwise in

accordance with law, the Court rejects Plaintiffs’ arguments

regarding the sufficiency of the agency’s price effects analysis.

In addition, Plaintiffs’ complaint about the ITC’s assessment of

the pricing evidence is clearly in error. Far from being

dismissive of the pricing data, the Commission cited to this

information in the explanation of its price effects determination.

See Remand Determination at 31-32. In fact, the ITC specifically

discussed the underselling data from both the original period of

investigation and the five-year review. See id. While

acknowledging the instances of underselling which form the basis of
Court No. 07-00454 Page 46

Nucor’s claim, the ITC concluded that this evidence was not

dispositive when examined against the backdrop of ArcelorMittal’s

practices regarding imports from affiliated firms. To be sure,

this evaluation of the evidence is more than mere conjecture, and

the agency’s decision is reasonably discernible to the Court. See

NSK Corp. v. United States, 33 CIT ___, 637 F. Supp. 2d 1311, 1318

(2009) (citing NMB Singapore Ltd. v. United States, 557 F.3d 1316,

1319-20 (Fed. Cir. 2009)). Therefore, the Court finds that the

Commission sufficiently explained its price effects findings in the

context of its likely volume determination as mandated by the

Court. As a result, the Commission’s determination is supported by

substantial evidence and otherwise in accordance with law.

6. Likely Impact

A. The Commission’s Determination on Remand

The Court instructed the Commission on remand to reconsider

its likely impact determination in light of its revised volume and

price effects determinations. Nucor, 33 CIT ___, 605 F. Supp 2d

1361, 1383. The Commission was also required to “account for and

explain the poor performance of the domestic industry in the latter

portion of the POR.” Id. Because the ITC did not reach a

different conclusion on either the volume issue or the price

effects issue, it similarly concluded that the subject imports were

not likely to have a significant impact on the domestic industry.

Remand Determination at 33. The Commission also attributed the
Court No. 07-00454 Page 47

domestic industry’s poor performance in the latter portion of the

POR to “flat or declining prices after 2006.” Id. However, “[a]ll

Commissioners who are joining this opinion concluded that the

industry was not in a vulnerable condition, notwithstanding

substantial performance declines in interim 2007, in light of its

overall profitability since 2004.” Id.

B. Parties’ Arguments

Plaintiff Nucor responds to the Commission’s likely impact

determination simply by invoking its objections to the Commission’s

volume and price effects determinations, without raising any new

objection. Nucor Comments at 24-25. Plaintiff-Intervenor U.S.

Steel contends that in reaching an affirmative determination in the

original sunset review on certain countries (not involved in this

litigation), the Commission determined that imports from those

countries would have a negative impact on the domestic industry.

U.S. Steel Comments at 37. The Commission responds to Nucor’s

comments by pointing out that Plaintiff does not raise any new

arguments on the likely impact analysis, and urges that the ITC

should be affirmed. ITC Rebuttal Comments at 32-33.

C. Analysis

As the Court has already sustained the Commission’s volume and

price effects analyses, and upon hearing no compelling argument

from Plaintiff or Plaintiff-Intervenor as to why the ITC’s likely

impact analysis is flawed, the Court finds that the likely impact
Court No. 07-00454 Page 48

analysis is supported by substantial evidence and is otherwise in

accordance with law.

CONCLUSION

For all the reasons set forth above, the Commission’s negative

injury determination, reached on remand, is sustained in its

entirety. Judgment shall be entered accordingly.

/s/ Gregory W. Carman
GREGORY W. CARMAN
JUDGE

Dated: January 27, 2010
New York, New York