The U.S. Department of Commerce announced Preliminary Determinations on countervailing duties (CVD) for corrosion resistant steels from Italy (affirmative), China (affirmative), India (affirmative) and Korea (affirmative). There was one country, Taiwan, which was found to not be subject to countervailing duties.
You will notice that there are a number of steel mills/exporters that were hit especially hard. Those mills were selected as “mandatory respondents” and they failed to participate in the investigation. Duferco, to the best of my knowledge, does not own any assets in China. A portion of Duferco Trading Company in the United States is owned by one of the Chinese steel mills. I do not completely understand the duties assigned to Dufereco and their “cross-owned companies”). I will see what I can do to get a better understanding of their situation.
In our opinion, the subsidy rates for all but China and ILVA in Italy are relatively small and probably can be absorbed by the producing mills/exporters. We will be speaking to the trading companies over the next couple of days to see what impact this ruling (as well as the critical circumstances ruling) will have on new orders and future exports.
Also, we cannot forget that an antidumping suit (AD) still exists and is we expect an announcement on, or about, December 21, 2015 on CORE products (corrosion resistant).
China producers/importers of record
Countervailable subsidies, according to the US Department of Commerce, “are financial assistance from foreign governments that benefit the production of goods from foreign companies and are limited to specific enterprises or industries, or are contingent either upon export performance or upon the use of domestic goods over imported goods.”
The results of the investigation found the following subsidy rates:
China: Yieh Phui (China) Technomaterial Co., Let. Received a subsidy rate of 26.26 percent.
China: Mandatory respondents, Angang Group Hong Kong Company, Ltd., Baoshan Iron & Steel Co., Ltd., Dufereco SA (and its cross-owned companies Hebei Iron & Steel Group and Tangshan Iron and Steel Group Co., Ltd.), Changshu Everbright Material Technology and Handan Iron & Steel Group did not participate in the investigation and were therefore hit with a subsidy rate of 235.66 percent for not cooperating in the investigation.
China: All other companies not mentioned above were hit with 26.26 percent subsidy rate.
India: Mandatory respondents JSW Steel Limited received a subsidy rate of 2.85 percent. Uttam Galva Steels Limited preliminarily received a subsidy rate of 7.71 percent. All other producers/exporters received a subsidy rate of 5.28 percent.
Italy: Commerce preliminarily determined that Acciaieria Arvedi S.p.A. and Marcegaglia S.p.A. received subsidy rates of 0.38 percent and 0.04 percent respectively, which are de minimis. ILVA S.p.A. which did not participate in the investigation, received a subsidy rate of 38.41 percent for not cooperating. All other producers/exporters from Italy have been assigned a preliminary subsidy rate of 13.06 percent.
South Korea: Dongbu Steel Co., Ltd./Dongbu Incheon Steel Co., Ltd. (Dongbu) received a subsidy rate of 1.37 percent while Union Steel Manufacturing Co. Ltd./Dongkuk Steel Mill Co., Ltd. (Union/Dongkuk) received a subsidy rate of 0.69 percent, which is de minimis. All other Korean producers/exporters have been issued a preliminary subsidy rate of 1.37 percent.
Taiwan: In the Taiwan investigation all of the companies received subsidy rates of 0.00 percent and all companies from Taiwan have a zero subsidy rate.
Those companies found to have subsidy rates the U.S. Commerce Department has instructed Border Protection to require cash deposits based on the preliminary subsidy rates.
Where Commerce found Critical Circumstances with respect to China, Italy and Korea, CBP will be instructed to impose provisional measures retroactively on entries of corrosion-resistant steel from those exporters, up to 90 days prior to publication of the respective preliminary determination Federal Register notice. There were no Critical Circumstances found with respect to corrosion-resistant steels from India. Taiwan was found to be negative and no retroactive provisional measures will be applied.
The U.S. Department of Commerce is scheduled to announce it Final Determination on, or about, January 19, 2016 unless the statutory deadline is extended.
In order for final CVD orders to be issued, both Commerce and the International Trade Commission (ITC) have to determine that the steel industry has been materially injured, or are threatened with injury. If one of the groups votes in the negative no CVD orders will be issued.
The ITC is scheduled to make its final injury determinations in March 2016.
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