BIS Decision Document – Steel Duty Exclusion Request EXCLUSION REQUEST NUMBER: BIS-2018-0006-0034 Summary:    Requester: Borusan Mannesmann Pipe U.S. Inc. ("BMP") Product description: Welded casing used in drilling for oil or gas of iron or nonalloy steel, with an outside diameter of 9.625", with a wall thickness of 11.99 mm. HTSUS: 7306292000 Analysis: The Bureau of Industry and Security (“BIS”) has received a request, referenced above, to exclude certain steel articles from the duties initially imposed by the President in Presidential Proclamation 9705 of March 8, 2018 (“Proclamation”), in exercise of his authority to adjust imports under Section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862). The Proclamation authorized the Secretary of Commerce, in consultation with other executive branch agencies as appropriate, to provide relief from the additional duties imposed, upon request by a directly affected party, for: 1) any steel article determined not to be produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality or 2) based upon specific national security considerations. The above-captioned request for relief (“exclusion request”) has met the requirements for consideration as a “complete submission” under Supplement No. 1 to 15 CFR Part 705. BIS has considered the evidence provided, including in the exclusion request as well as any applicable objection filings and its report to the President of January 11, 2018, has solicited and taken into account analysis provided by the International Trade Administration (ITA), and assessed other interagency comments as applicable. In examining whether the relevant steel article is produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality, ITA recommends finding, based on all of the evidence presented, that the product referenced in the above-captioned exclusion request is produced in the United States in a sufficient and reasonably available amount and of a satisfactory quality, and recommends denying the request for an exclusion. BIS accepts ITA’s recommended findings as to the domestic availability of the product, and finds that no overriding national security concerns require that this exclusion request be granted notwithstanding the domestic availability. Final Recommendation: The Bureau of Industry and Security recommends that the above-captioned exclusion request should be denied. This denial is without prejudice and the requester may file a new exclusion request for this product if, for example, new or different facts or circumstances exist which meet the criteria for approving an exclusion request. DECISION ON EXCLUSION REQUEST BIS-2018-0006-0034 ✔ _____________________ I approve denying this exclusion request. _____________________ I do not approve denying this exclusion request. _____________________ I would like to discuss. ___________________________________ Deputy Assistant Secretary of Export Administration 06/19/18 ______________________ Date Certain browser plug-ins or extensions, such as Grammarly, may interfere with submitting comments on the comment form. If you have issues, please disable browser plugins and extensions, refresh the page, and try submitting your comment again. If you need additional assistance, please contact the Help Desk at 1-877-378-5457. BIS-2018-0006-0031 - BMP US Carbon and Alloy Pipe and Tube - HTS 7306292000 Objection 3 The is a Comment on the Bureau of Industry and Security (BIS) Other: EXCLUSION DENIED - BMP US Carbon and Alloy Pipe and Tube - HTS 7306292000 For related information, Open Docket Folder ID: BIS-2018-0006-3712 Tracking Number: 1k2-930e-9e5r Document Information Comment Date Posted: May 17, 2018 Zekelman Industries plant in Blytheville, AR is capable of making this product in J55 or upgradeable product. The Blytheville mill has run OCTG products for many years until its idling in late 2015 due to oversupply by imports. RIN: Not Assigned Attachments (1) BIS-2018-0006-0031 - Objection 3 - Zekelman Industries Inc. View Attachment: Show More Details Submitter Information Submitter Name: Randy Boswell OMB Control Number: 0694-0138 Expiration Date: 9/12/2018 Objection Filing to Posted Section 232 Exclusion Request: Steel Objection Filing Requirements: Any individual or organization in the United States may file an Objection to an Exclusion Request. Where relevant, organizations must provide factual information on 1) the steel products that they manufacture in the United States, 2) the production capabilities at steel manufacturing facilities that they operate in the United States; and 3) the availability and delivery time of the products that they manufacture relative to the specific steel product that is subject to an Exclusion Request. For an Objection Filing to be considered, it must be submitted as an electronic document using this Excel-based template. Paper submissions will not be accepted. Organizations submitting an Objection Filing on an Exclusion Request should provide specific information, as relevant, on the product that their company can provide that is comparable to the steel product that is the subject of the Exclusion Request. This information should include 1) discussion on the suitability of its product for the application identified by the Exclusion Requestor, and 2) a full technical description of the properties of the product it manufactures relative to specifications provided in the Exclusion Request posted on regulations.gov, including information on dimensions, strength, toughness, ductility, magnetic permeability, surface finish, coatings, and other relevant data. A separate Objection Filing must be submitted on each Exclusion Request, citing the specific steel product and dimension covered in the request posted on regulations.gov. All applicable question blocks in this form must be completed for the Objection Filing to be accepted for consideration. Organizations electing to attach supporting documents must provide a single submission only in PDF format that must not exceed 25 pages in total. All information submitted in the Exclusion Request is subject to public disclosure. Do not provide sensitive Personally Identifiable Information. Organizations should upload their Objection Filing covering a single steel Exclusion Request to the corresponding Exclusion Request on https://www.regulations.gov/ under Docket Number BIS-2018-0006. An Objection Filing must be submitted to regulations.gov no later than 30 days from the date the Exclusion Request is posted in regulations.gov. Processing of the Exclusion Request, including consideration of Objection Filings, will take approximately 90 business days. When Exclusion Requests are approved, notification will made on regulations.gov. For questions related directly to completing this form, contact BIS via email (steel232@bis.doc.gov) or telephone (202-482-5642). Instruction: State the name, address, and related contact information for the organization submitting the Objection Filing. Provide the same information for the Exclusion Requestor that is the subject of this Objection Filing, relying on information in the request notice posted on regulations.gov. Also provide the regulations.gov identification number issued for the submitter of the Exclusion Request, the HTSUS code for the steel product, and annual quantity of imported steel product at issue. This information is found in the Exclusion Request document posted on regulations.gov. Organization Filing Objection to Requested Exclusion Full Organization Legal Name Street Address 1.a Organization Requesting Exclusion Full Organization Legal Name Zekelman Industries Inc. 227 W Monroe Street Borusan Mannesmann Pipe US Inc 363 N Sam Houston Parkway East, Suite 630 Street Address Houston City Chicago City State Illinois State Texas Zip Code 60606 Zip Code 77060 Headquarters Country United States Point of Contact Name Randy Boswell Phone Number 312-275-1610 E-mail Address randy.boswell@zekelman.com Web Site Address www.zekelman.com regulations.gov Identification # BIS-2018-0006-0043 10-Digit HTSUS Code 7306292000 Annual Exclusion Quantity Requested (Kilograms) 3,500,000 kg Identify the reasons your organization objects to an Exclusion Request being granted to the applicant cited above. Written comments may be submitted (not required) to supplement information that your organization has provided in the Objection Filing form on the Exclusion Request, but total attachments may not exceed 25 pages. Organizations making an Objections Filing should identify factual problems that they encounter in the Exclusion Request (e.g., product description). Indicate what type of order the Exclusion Request that is the subject of the Objection Filing would pertain to: Standard Product 1.b The product is listed as OCTG 5.5 J55 Casing, but they outline in their comments that this is also used as a green tube to be upgraded to L80 or P110. Our substitute product listed below is a green tube for upgrade from our Niles plant. The Blytheville plant can make either green tube or J55. Current Annual Plant % Plant Utilization City State Is the steel product type identified in the Exclusion Request currently manufactured by your organization in the United States -Yes/No- Current Production Capacity (mt) 1.c , or can it immediately be made (within 8 weeks) by your organization, in a company-owned plant in the United States? If 200,000 mt Warren Ohio 80% "Yes" identify the location(s) of your steel production facilities in the United States. Yes Comments 1.d This organization does not currently manufacture the identified steel product, but can produce the product identified in the Exclusion Request within the following time period at the following facilities: Comments Days City State Current Annual Plant Production Capacity (mt) % Plant Utilization Current 180 Blytheville Arkansas 300,000 mt 40% This plant is not currently API certified nor does it make green tube. However the plant has the capability to make both green tube now and API product pending the certification process. Does this organization currently manufacture, or can immediately manufacture (within 8 weeks), in a company-owned plant located in the United States a substitute product for the identified steel product that has similar form, fit, function, and 1.e performance? If "Yes" identify the location(s) of your steel production facilities in the United States, current plant capacity and utilization This organization does not currently manufacture the identified steel product, but can make a substitute product that has 1.f similar form, fit, function, and performance within the following time period at the following facilities: -Yes/No- Yes Days City State Current Annual Plant Production Capacity (mt) % Plant Utilization Current Niles Ohio 90,000 mt 65% City State Current Annual Plant Production Capacity (mt) % Plant Utilization Current Comments Continued On Next Page Page 1 of 3 Objection Filing to Posted Section 232 Exclusion Request: Steel - Continued No Production Capacity 2.a Select "Yes" for any assertions identified in the Exclusion Request that your organization is challenging: Yes Insufficient Volume Product Quality Shipping Time Unique Steel Product Other (specify here) Discuss 1) the suitability of your organization's steel product compared to that identified by the Exclusion Requestor, and 2) provide a full technical description of the properties of the product it manufactures relative to specifications cited in the Exclusion Request posted in regulations.gov. This description must include information on dimensions, plus performance factors such as strength, toughness, ductility, magnetic permeability, surface finish, coatings, and other relevant data. 2.b We can manufacture OCTG to 5.5"OD to J55 and in green tube suitable to upgrade to OCTG L80 and P110. The product is to an industry standard specification and will perform to the specification listed in exclusion request. State the chemical composition of the specific steel product that your organization can manufacture at a company-owned production facility located in the United States. Numbers may appear rounded, but full values will be stored. Chemical Composition 2.c Chemical Aluminum Minimum % 0.02% Maximum % 0.08% Chemical Niobium Minimum % Maximum % Antimony Bismuth Boron 0.00% Selenium Carbon Chromium Cobalt Copper Iron Lead Manganese Molybdenum Nickel 0.06% 0.10% [Other - List Below] [Other - List Below] 0.24% 0.20% 0.16% 1.20% 0.28% 0.35% 0.20% 1.40% Silicon Sulfur Nitrogen Phosphorous Tellurium Titanium Tungsten Vanadium 0.01% 0.01% 0.02% 0.15% 0.01% 0.03% 0.01% 0.04% 0.01% 0.02% 0.35% 0.93% 0.04% 0.02% Zirconium Comments: Provide the following information on the single steel product that is the subject of this Objection Filing: 1) dimensional information covering the single steel product subject to the Exclusion Request; 2) performance data for tensile strength, yield strength, hardness impact, shear and test temperature. Numbers may appear rounded, but full values will be stored. Steel Product Specifications (Millimeters) Thickness 2.d Inside Diameter Outside Diameter Toughness (If Applicable) Strength Length Width Height Tensile Strength Mega Pascal (MPa) Hardness (specify Yield method below - Strength Brinnell, Mega Pascal Rockwell, (MPa) Vickers, etc.) N/A Minimum 7.72 mm Maximum 7.72 mm Not required 139.7 mm 9906 mm 139.7 mm 14640 mm N/A N/A Test Type Drop-Weight Tear Testing Impact (Charpy) Testing Other (specify type in comment box) Temperature (?C) 524 MPa 383 MPa Joules 763 MPa 548 MPa % Shear Comments: Provide the following information on the single steel product that is the subject of this Objection Filing: 1) performance data for ductility, magnetic permeability, surface finish; and 2) metal coating process, material type, weight, and thickness. Numbers may appear rounded, but full values will be stored. Global Ductility Elongation % 2.e Reduction -in-Area % Local Ductility (If Applicable) Magnetic Permeability (If Applicable) Bendability (Bend Magnetic Hole Expansion Radius/Sheet Permeability % Thickness [Epstein Test] [millimeter] Magnetic Permeability [Greer Lab Method] Surface Finish (If Applicable) Stacked Wide Sheet [ASTM A804/ A804M-04 (2015)] Profilometer - [SAE J911] Minimum 21% N/A N/A N/A N/A N/A Maximum 39% N/A N/A N/A N/A N/A Select any additional processing methods used: Coating Type and Composition (If Applicable) Composition Coating (e.g., Zn, Al, Si, Weight Product Name Coating Mg, other [Grams per Sq. Coating and intentionally Thickness Meter] Method Abbreviation added [micrometers] elements or alloys Acetone, Butil 150 10 Acetate, Temporary Other (specify; e.g. painted) Varnishing Toluene, 350 25 Xylene, Ethyl Other (specify) Comments: Continued On Next Page Page 2 of 3 Objection Filing to Posted Section 232 Exclusion Request: Steel - Continued 3.a What percentage of the total steel product tonnage requirement covered under the Exclusion Request that is the subject of this Objection Filing can your organization manufacture at its U.S. plants on a timely basis? 100% 3.b State the number of days required by your organization to ship from its U.S. manufacturing plant the steel product covered by this Exclusion Request from the time the purchase order is received: 75 3.c State the number of days required to manufacture the steel product covered by this Exclusion Request from the time a binding purchase order is received: 5 3.d State the delivery time in days for the steel product covered under this Exclusion Request from the time it is shipped from your manufacturing plant to the Exclusion Requestor's loading dock: 10 Comments: In answering question 3.b through 3.d we used the logic as follows: We assumed 500 ton minimum deliveries. 3.b We assumed that lead time to get raw material for the purchase order is ~60 days. 3.c the manufacture time includes coil slitting and pipe manufacture. 3.d The time to ship is predicated on shipping via rail. this time could be reduced if shipped via truck. Identify the reasons your organization objects to an Exclusion Request being granted to the applicant. Written comments may be submitted (not required) for each of the reasons your organization has cited in the Objection Filing form. Organizations filing Objections should identify factual problems in the Exclusion Request (e.g., product description). 3.e Comments: Has the organization making the Exclusion Request asserted that there is no capability in the United States to manufacture this type of steel product it requires? If "Yes" provide comments in the space below. Has the Exclusion Requestor supported its assertion of product uniqueness with engineering and scientific data, or independent laboratory tests results? 3.f No No Not Applicable Does your organization have technical data to disprove the assertions of the Exclusion Requestor? If "Yes" provide comments in the space below, or in attachments. Comments: 3.g Has the organization making this Objection Filing within the last two years attempted to sell, or successfully sold, the steel product described in the Exclusion Request to the exclusion requestor previously? Yes Does your organization manufacture a steel product similar to that cited in the Exclusion Request for which it has asked to Exclusion Requestor, within two years of the filing of the Exclusion Request, to perform a formal technical qualification to determine equivalency in form, fit, function and performance? No Not Did the Exclusion Requestor accept or reject the request to perform a formal technical qualification? Applicable We have contacted Borusan about being a supplier of green tube and API product outside their current US production capabilities. We did not get to a formal process as they were not interested until they learned the outcome of their exclusion Comments: requests. I have additional information to provide that is proprietary or otherwise business confidential that is relevant and necessary to this submission: Yes Instruction: This Objection Filing must be submitted by an organization official authorized to certify the document as being accurate and complete. CERTIFICATION The undersigned certifies that the information herein supplied in response to this questionnaire is complete and correct to the best of his/her knowledge. It is a criminal offense to willfully make a false statement or representation to any department or agency of the United States Government as to any matter within its jurisdiction. [18 U.S.C. 1001 (1984 & SUPP. 1197)] Company Name: Randy Boswell Name of Authorizing Official: Phone Number: 312-275-1610 Title of Authorizing Official Email of Authorizing Official: Zekelman Industries Inc President - Wheatland Energy Tubulars randy.boswell@zekelman.com If the Point of Contact is different from the Authorizing Official provide point-of-contact information below. Point-of-Contact Name: E-mail Address: Randy Boswell randy.boswell@zekelman.com Title President - Wheatland Energy Tubulars Phone Number 312-275-1610 Paperwork Reduction Act Notice Per the Paperwork Reduction Act of 1995, public reporting burden for this collection of information is estimated to average 4 hours per response, including the time to review instructions, search existing data sources, gather and maintain data needed, and complete and review the collection of information. Send comments regarding this burden estimate or any other aspects of this collection of information, to 1401 Constitution Avenue, NW, HCHB 1093, Office of Technology Evaluation, Bureau of Industry and Security, U.S. Department of Commerce, Washington, DC 20230 attn: 0694-0138. Commerce may not collect this information, and you are not required to respond; unless this OMB number is displayed. Page 3 of 3