UNITED STATES INTERNATIONAL TRADE COMMISSION STAINLESS STEEL AND ALLOY TOOL STEEL Report to the President on Investigation No. TA-201-5 Under Section 201 of the Trade Act of 1974 ) ' USITC Publication 756 Washington, D.C. January 1976 UNITED STATES INTERNATIONAL TRADE COMMISSION COMMISSIONERS Will E. Leonard, Chairman Daniel Minchew, Vice Chairman George M. Moore Catherine Bedell Joseph 0. Parker Italo H. Ablondi Kenneth R. Mason, Secretary to the Commission Address all communications to United States International Trade Commission Washington, D. C. 20436 C 0 N T E N T S Report to the President------------------------------------------ 1 Determinations, findings, and recommendations of the Commission---------------------------------------------- 3 Views of Commissioners Moore and Bedell---------------------- 7 Views of Chairman Leonard------------------------------------ 14 Views of Vice Chairman Minchew------------------------------- 35 Views of Commissioner Ablondi--------------------------------- 49 Information obtained in the investigation: Introduction------------------------------------------------- A-1 Description and uses: Stainless steel------------------------------------------- A-3 Alloy tool steel----------------------------------------- A-6 U.S. tariff treatment---------------------------------------- A-8 Domestic producers------------------------------------------- A-10 Producers' efforts to compete with imports---------------- A-13 Channels of distribution: U.S. producers' channels of distribution------------- A-15 Importers' channels of distribution------------------ A-18 Concentration of stainless steel and alloy tool steel sales by steel service centers--------------- A-20 The question of increased imports----------------------------- A-22 U. S. imports: · Total stainless steel and alloy tool steel----------- A-23 Total stainless steel-------------------------------- A-23 Stainless-steel sheet and strip---------------------- A-24 Stainless-steel bar---------------------------------- A-24 Stainless-steel plate-------------------------------- A-24 Stainless-steel rod---------------------------------- A-25 Stainless-steel ingots, blooms, slabs, billets, and sheet bars------------------------------------- A-25 Alloy tool steel------------------------------------- A-25 Flat-rolled products--------------------------------- A-26 Stainless-steel bar, stainless-steel rod, and alloy tool steel----------------------------------- A-26 Increase or decrease in imports for various product categories and for various time periods---------------- A-27 Ratio of imports to consumption-------------------------- A-28 Ratio of imports to production--------------------------- A-29 Changes in sources and types of U.S. imports-------------- A-30 The question of serious injury to the domestic industry------- A-35 Capacity-------------------------------------------------- A-36 Domestic production-------------------------------------- A-37 U. S. producers' shipments: Stainless-steel and alloy tool steel----------------- A-38 Stainless-steel-------------------------------------- A-38 Stainless-steel sheet and strip---------------------- A-39 Stainless-steel bar--------------~------------~------­ A-39 Stainless-steel plate-------------------------------- A-39 Stainless-steel rod---------------------------------- A-39 Stainless-steel ingots, blooms, slabs, billets, and sheet bars-------------------------------------- A-40 ii CONTENTS Information obtaines in the investigation--Continued The question of serious injury to the domestic industry--Continued U.S. producers' shipments--Continued Alloy tool steel------------------------------------- A-40 Flat-rolled products--------------------------------- A-40 Stainless-steel rod and bar and alloy tool steel------ A-40 Average unit value of shipments-------------------------- A-41 Unshipped orders----------------------------------------- A-43 Average lead times---------------------------------------- A-44 Inventories---------------------------------------------- A-45 U.S. exports---------------------------------------------- A-46 Alloy tool steel------------------------------------- A-47 U.S. producers' exports---------------------------------- A-47 Employment trends---------------------------------------- A-48 Man-hours worked------------------------------------- A-SO Output per man-hour---------------------------------- A-52 Prices: Price trends for stainless steel and alloy tool steel-- A-53 Price comparison of domestic and imported stainless steel and alloy tool steel--------------------------- A-57 Stainless-steel plate------------------------------ A-57 Stainless-steel sheet and strip-------------------- A-58 Stainless-steel bar-------------------------------- A-59 Stainless-steel wire rod--------------------------- A-60 Alloy tool steel----------------------------------- A-64 Alloy tool steel bar-------------------------------- A-64· Profit-and-loss experience-------------------------------- A-68 Overall establishment operations--------------------- A-68 Stainless steel and alloy tool steel------------- A-69 Stainless steel---------------------------------- A-70 Alloy tool steel--------------------------------- A-71 Flat-rolled stainless steel---------------------- A-72 Stainless-steel bar and rod and alloy tool steel-- A-73 Capital expenditures and research-and-development expenses------------------------------------------- A-74 Sununary----------------------------------------------- A-75 The question of imports as a substantial cause of serious injury--------------------------------------------- A-76 Demand factors------------------------------------------- A-76 U.S. consumption------------------------------------------ A-77 Possible important and substantial causes of serious injury or threat of serious injury--------------------- A-78 Quantity effect--------------------------------------- A-79 Price effect------------------------------------------ A-82 Foreign producers, production capacity, and exports------ A-86 The Japanese industry-------------------------------- A-86 The Swedish industry--------------------------------- A-87 Foreign stainless-steel production capacity---------- A-92 Stainless-steel exports------------------------------- A-92 Statistical appendix---------------------------------------------- B-1 iii Statistical Tables Page 1. Stainless steel products, alloy tool steel, and. total stainless steel and alloy tool steel: U.S. produ- cers' shipments, exports of domestic merchandise, imports for consumption, and apparent consumption, by item, 1970-74, January-September 1974, and January-September 1975--------------------------------- B-1 2. Flat rolled products and rod and bar products, including alloy tool steel: U.S. producers' shipments, exports of domestic merchandise, imports for consumption, and apparent con sumption, by item, 1970-74, January-September 1974, and January-September 1975----------------------- B-2 3. Stainless steel: U.S. producers' shipments, exports of domestic merchandise, imports for consumption, and apparent consumption, by pro duct grovps, 1970-74, January-September 1974, and January-September 1975----------------------------- B-3 4. Stainless steel and tool steel: U.S. imports for consumption, by type, 1968 and 1969-------------------- B-4 5. Total stainless-steel products, except pipes, tubes, and wire: U.S. imports for consumption, by prin cipal sources, 1970-74, January-September 1974, January-September 1975, and 5 year average, 1970-74------------------------------------------------ B-5 6. Stainless steel sheet and strip: U.S. imports for consumption, by principal sources, 1970-1974, January-September 1974 and January-September 1975 and 5 year average------------------------------------- B-6 7. Stainless steel bar: U.S. imports for consumption, by principal sources, 1970-1974, January-September 1974 and January-September 1975 and 5 year average----- B-7 8. Stainless steel plate: U.S. imports for consumption, by principal sources, 1970-1974, January-September 1974 and January-September 1975 and 5 year average----- B-8 9. Stainless steel wire rod: U.S. imports for con sumption, by principal sources, 1970-74, January September 1974, January-September 1975, and 5 year average----------------------------------------- B-9 10. Stainless steel ingots, blooms, slabs, billets and sheet bars: U.S. imports for consumption, by principal sources, 1970-1974, January-September 1974 and January-September 1975 and 5 year average------------------------------------------------8-10 Statistical Tables--Cont. Page 11. Alloy tool steel: U.S. imports for consumption, by principal sources, 1970-1974, January September 1974 and January-September 1975 and 5 year average-------------------------------------8-11 12 Tool steel bars: U.S. imports for consumption, by principal sources, 1970-1974, January September 1974 and January-September 1975 and 5 year average-------------------------------------8-12 13. Tool steel rod: U.S. imports for consumption, by principal sources, 1970-74, January September 1974 and January-September 1975 and 5 year average-------------------------------------8-13 14. All other forms of tool steel except hollow drill: U.S. imports for consumption by principal sources, 1970-1974, January-September 1974 and January- September 1975 and 5 year average----------------------8-14 15. Capacity to melt stainless steel and tool steel, capacity to roll stainless plates, sheet, and strip, and·capacity to manufacture stainless steel bars, stainless rod, and tool steel, 1970-74, January-September 1974, and January- September 1975-----------------------------------------B-15 16. Utilization of the capacity to melt stainless steel and tool steel, of the capacity to roll stainless plates,, sheets, and strip, and of the capacity to manufacture stainless steel bars, stainless rod, and tool steel, 1970-74, January-September 1974, and January-September 1975-----------------------------8-16 17. Stainless steel and tool steel: U.S. production, total and by types, 1970-74, January-September 1974, and January-September 1975-----------------------B-17 18. Stainless steel and tool steel: Domestic ship ments of U.S.-made stainless steel, by types, and tool steel, 1970-74, January-September 1974, and January-September 1975-----------------------8-18 19. Stainless steel and tool steel: Average unit value of U.S. producers' shipments and U.S. producers' cost of goods sold, by types, 1970-74 and, by · . quarters, January 1974-September 1975------------------8-19 20. Stainless steel and tool steel: Average unit value of U.S. importers' sales price to U.S. consumers and average unit value of pur chase price paid by U.S. importers to foreign producers, by types, 1970-74 and, by quarters, January 1974-September 1975----------------------------8-20 v Statistical Tables--Cont. Page 21. Stainless steel and tool steel: Average profit and-loss sales margins for U.S. producers and U.S. importers, by types, 1970-74 and, by quarters, January 1974-September 1975------------------8-21 22. Unshipped orders of U.S.-made stainless steel, by type, and tool steel, Jan. 1, 1970-Jan. 1, 1974, and, by quarters, Apr. 1, 1974-0ct. 1, 1975---------------------------------------------------8-22 23. Stainless steel, by type, and tool steel: Importers' unshipped orders, Jan. 1, 1970- Jan. 1, 1974, and, by quarters, Apr. 1, 1974- 0ct. 1, 1975-------------------------------------------B-23 24 Stainless steel, by type, and tool steel: Average and lo-hi lead times for delivery from melt of new orders of U.S. producers, by quarters, Jan. 1, 1974-0ct. 1, 1975-----------------8-24 25. Stainless steel,'by type, and tool steel: Average and 10-hi lead times for delivery from melt of new orders of imports, by quarters, Jan. 1, 1974-0ct. 1, 1975--------------------8-25 26. Stainless steel, by type, and tool steel: U.S. producers' inventories, Jan. 1, 1970- Jan. 1, 1974, and, by quarters, Apr. 1, 1974- 0ct. 1, 1975-------------------------------------------8-26 27. Stainless steel, by type, and tool steel: Importers' inventories, January 1, 1970- January 1, 1974, and by quarters, April 1, 1974- 0ctober 1, 1975----~-----------------------------------8-27 28. Stainless steel and tool steel: Consumers' inven- tories, by types, and by specified dates, Jan. 1, 1973-0ct. 1, 1975--------------------------------------B-28 29. Total stainless steel, except pipes, tubes and wire: U.S. exports of domestic merchandise by principal markets, 1970-1974, January-June 1974, and January-June 1975--------------------------------------8-29 30. Alloy tool steel: U.S. exports of domestic mer- chandise, by principal markets, 1970-1974, January-June 1974, and January-June 1975---------------B-30 31. Stainless steel, by type, and tool steel: U.S. producers' exports, 1970-74 and, by quarters, January 1974-September 1975------------------8.-31 vi Statistical Tables--Cont. Page 32-43. Range and average of lowest net selling prices received by U.S. producers and importers from sales of selected types of stainless steel and alloy tool steel products, 1970-1973, and by quarters, January. 1974-September 1975------------------------------------------------8-32-8-4 44. Profit-and-loss experience of 17 U.S. producers of stainless steel and/or alloy steel on their overall estab lishment operations, 1970-74 and Jan.-Sept. 1974-75----------------------------------8-44 45. Profit-and-loss experience of 16 U.S. producers of stainless steel and alloy tool steel on their production of stain less steel plate, sheet and strip, rods, and bars and alloy tool steel, 1970-74, January-September 19 74 , and January- September 1975--------------------------------------8-45 46. Capital expenditures reported by 15 U.S. producers of stainless steel and/or alloy tool steel for the facilities used in the manufacture, warehousing, and marketing, of stainless steel and alloy tool steel, 1971-74 and the budgeted figures for 1975- 76--------------------------------------------------8-48 vii Figures 1. Stainless steel and alloy steel, total---------------- C-2 2. U.S. imports of stainless steel and alloy tool steel, total----------------------------------------------- C-3 3. Stainless steel, total-------------------------------- C-4 4. U.S. imports of stainless steel, total---------------- C-5 5. Plate------------------------------------------------- C-6 6. U.S. imports of plate--------------------------------- C-7 7. Sheet and strip--------------------------------------- C-8 8. U.S. imports of sheet and strip----------------------- C-9 9. Bars--------------------------------------------------C-10 10. U.S. imports of bars------------------~---------------C-11 11. Rods--------------------------------------------------C-12 12. U.S. imports of rods----------------------------------C-13 13. Bars and rods-----------------------------------------C-14 14. U.S. imports of bars and rods-------------------------C-15 15. Alloy tool steel-------------------~------------------C-16 16. U.S. imports of alloy tool steel-------------~--------C-17 17. Flat-rolled products----------------------------------C-18 18. U.S. imports of products------------------C-19 flat~rolled 19. Stainless-steel bars and rods and alloy tool steel----C-20 20. U.S. imports of stainless-steel bars and rods and alloy tool steel------------------------------------C-21 Note.--The whole of the Commission's report to the President may not be made public since it contains certain information that would result in the disclosure of the operations of individual concerns. This published report is the same as the report to the President, except that the above-mentioned information has been omitted. Such omissions are indicated by asterisks. vii Figures 1. Stainless steel and alloy steel, total---------------- C-2 2. U.S. imports of stainless steel and alloy tool steel, total----------------------------------------------- C-3 3. Stainless steel, total-------------------------------- C-4 4. U.S. imports of stainless steel, total---------------- C-5 5. Plate------------------------------------------------- C-6 6. U.S. imports of plate--------------------------------- C-7 7. Sheet and strip--------------------------------------- C-8 8. U.S. imports of sheet and strip----------------------- C-9 9. Bars--------------------------------------------------C-10 10. U.S. imports of bars------------------~---------------C-11 11. Rods--------------------------------------------------C-12 12. U.S. imports of rods----------------------------------C-13 13. Bars and rods-----------------------------------------C-14 14. U.S. imports of bars and rods-------------------------C-15 15. Alloy tool steel-------------------~------------------C-16 16. U.S. imports of alloy tool steel-------------~--------C-17 17. Flat-rolled products----------------------------------C-18 18. U.S. imports of products------------------C-19 flat~rolled 19. Stainless-steel bars and rods and alloy tool steel----C-20 20. U.S. imports of stainless-steel bars and rods and alloy tool steel------------------------------------C-21 Note.--The whole of the Commission's report to the President may not be made public since it contains certain information that would result in the disclosure of the operations of individual concerns. This published report is the same as the report to the President, except that the above-mentioned information has been omitted. Such omissions are indicated by asterisks.