2000S0283—EN—23.05.2002—003.001—1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B COMMISSIONDECISIONNo283/2000/ECSC
of4February2000
imposingadefinitiveanti-dumpingdutyonimportsofcertainflatrolledproductsofironornon-
alloysteel,ofawidthof600mmormore,notclad,platedorcoated,incoils,notfurtherworkedthanhot-rolled, originatinginBulgaria, India,SouthAfrica, TaiwanandtheFederal RepublicofYugoslavia and accepting undertakings offered by certain exporting producers and terminating
theproceedingconcerningimportsoriginatinginIran
(OJL31,5.2.2000,p.15)
Amendedby:
OfficialJournal
No page date
►M1CommissionDecisionNo2009/2000/ECSCof22September2000 L240 12 23.9.2000
►M2CommissionDecisionNo1357/2001/ECSCof4July2001 L182 27 5.7.2001
►M3CommissionDecisionNo841/2002/ECSCof21May2002 L134 11 22.5.2002
Correctedby:
►C1Corrigendum,OJL119,20.5.2000,p.39(2000/283/EC)
▼B
COMMISSIONDECISIONNo283/2000/ECSC
of4February2000
imposing a definitive anti-dumping duty on imports of certain flat
rolled productsofironornon-alloysteel, ofawidthof600mmormore, not clad, plated or coated, in coils, not further worked thanhot-rolled,originatinginBulgaria,India,SouthAfrica,Taiwanand
the Federal Republic of Yugoslavia and accepting undertakings
offered by certain exporting producers and terminating the
proceedingconcerningimportsoriginatinginIran
THECOMMISSIONOFTHEEUROPEANCOMMUNITIES,
Having regard to the Treaty establishing the European Coal and SteelCommunity,
Having regard to Commission Decision No 2277/96/ECSC of 28
November 1996 on protection against dumped imports from countries
not members of the European Coal and Steel Community(
1), as
amended byCommissionDecision No1000/99/ECSC(2),andinparti-
cularArticles8and9thereof,
AfterconsultingtheAdvisoryCommittee,Whereas:
A.PROCEDURE
1.Initiation
(1)On 7 January 1999, the Commission announced by means of a
notice (hereinafter referred to as the ‘Notice of Initiation’)published in the Official Journal of the European Commu-
nities(
3) the initiation of an anti-dumping proceeding with
regard to imports into the Community of certain flat rolled
products of iron or non-alloy steel, of a width of 600 mm ormore, not clad, plated or coated, in coils, not further workedthanhot-rolled,originatinginBulgaria,India,Iran,SouthAfrica,Taiwan and the Federal Republic of Yugoslavia (hereinafter
referredtoas‘Yugoslavia’).
(2)The proceeding was initiated as a result of a complaint lodged
by Eurofer on behalf of Community producers representing amajor proportion of the total Community production of the
product concerned within themeaning ofArticles 4(1)and5(4)
of Commission Decision (EC) No 2277/96/ECSC, hereinafterreferred to as the ‘Basic Decision’. The complaint containedevidence of dumping of the product concerned and of materialinjury resulting therefrom, which was considered sufficient tojustifytheinitiationofaproceeding.
2.Investigation
(3)The Commission officially advised the exporting producers in
theexportingcountries (hereinafter referredtoasthe‘exportingproducers’)andimportersaswellastheirrepresentativeassocia-tionsknowntobeconcerned,therepresentativesoftheexportingcountries and the complaining Community producers of the
initiationoftheproceeding.TheCommissionsentquestionnaires
to all these parties and to those who made themselves knownwithin the time limit set in the Notice of Initiation. Pursuant toArticle6(5)oftheBasicDecision,theCommissionalsogavetheparties directly concerned the opportunity to make their viewsknowninwritingandtorequestahearing.2000S0283—EN—23.05.2002—003.001—2
(1) OJL308,29.11.1996,p.11.
(2) OJL122,12.5.1999,p.35.
(3) OJC4,7.1.1999,p.3.
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(4)Certain exporting producers,complaining Community producers
andimporterssubmittedcommentsinwriting.
All interested parties who requested a hearing within the time
limit set and who indicated that they were likely to be affectedby the result of the proceeding and that there were particularreasonswhytheyshouldbeheard,weregrantedsuchahearing.
(5)All parties were informed of the essential facts and considera-tionsonthebasisofwhichitwasintendedtorecommend
(i) theimpositionofdefinitive anti-dumping dutiesonimports
fromBulgaria,India,SouthAfrica,TaiwanandYugoslavia,
(ii)►
C1the acceptance of undertakings offered by certain
exportingproducersand ◄
(iii) theterminationoftheproceedingagainstimportsfromIran.
In accordance with the provisions of Article 20 of the Basic
Decision parties were also granted a period within which they
couldmakerepresentationssubsequenttothisdisclosure.
(6)The oral and written comments submitted by the parties were
considered and, where appropriate, the definitive findings have
beenmodifiedaccordingly.
(7)The Commission sought and verified all the information itdeemednecessaryforthepurposeofadefinitivedetermination.
Verification visits were carried out at the premises of the
followingcompanies:
—Complaining Community producers:
— AceraliaCorporacionSid.,Madrid,Spain
— BritishSteelPlc,London,UnitedKingdom— CockerillSambreSA,Brussels,Belgium— HoogovensSteelBV,IJmuiden,Netherlands— ILVASpa,Genoa,Italy
— SidmarNV,Gent,Belgium
— SalzgitterAG,Salzgitter,Germany— StahlwerkeBremenGmbH,Bremen,Germany— SOLLAC,Paris,France— ThyssenKruppStahlAG,Duisburg,Germany
—Exporting producers:
(a) Bulgaria
KremikovtziCorp,Sofia
(b) India
EssarSteelLtd,Hazira
TataIron&SteelCompanyLtd,Calcutta
SteelAuthorityofIndiaLtd,NewDelhi
(c) Iran
MobarakehSteelCompany,Esfahan
(d) SouthAfrica
IscorLtd,Pretoria
HighveldSteel&VanadiumCorpLtd,Witbank
(e) Taiwan
ChinaSteelCorp,Kaohsiung
YiehLoongEnterpriseCo.,Ltd,Kaoshiung
(f) Yugoslavia
In view of the particular situation in Yugoslavia, no
investigation was carried out at the premises of Sartid2000S0283—EN—23.05.2002—003.001—3
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a.d., the only exporting producer in that country that
madeitselfknowntotheCommission.
—Unrelated importer — user company in the Community:
MarcegagliaSpa,GazoldodegliIppoliti,Italy
—Importers related to the exporting producers:
(a)Iran: AscotecGmbH,Düsseldorf,Germany
Irascos.r.l.,Genova,ItalyTara Steel Trading GmbH, Düsseldorf,
Germany
UnitechSteel(UK)Ltd,London,United
Kingdom
(b)SouthAfrica: Macsteel International UK Ltd, London,
UnitedKingdom
Macsteel International BelgiumNV,
Antwerpen,Belgium
Macsteel International Stahlhandel
GmbH,Düsseldorf,Germany
(8)Theinvestigationofdumpingcoveredtheperiodfrom1January
1998to31December1998(hereinafterreferredtoasthe‘inves-
tigation period’). The examination of injury covered the periodfrom1January1995uptotheendofthedumpinginvestigationperiod(hereinafteralsoreferredtoasthe‘periodexamined’).
B.PRODUCTCONCERNEDANDLIKEPRODUCT
1.Productconcerned
(9)The product concerned is certain flat rolled products of iron or
non-alloysteel,ofawidthof600mmormore,notclad,platedor coated, in coils, not further worked than hot-rolled (herein-after ‘hot-rolled coils’). This product is currently classifiable
within CN codes 72081000, 72082500, 72082600,
72082700, 72083600, 72083710, 72083790(
1), 72083810,
72083890,72083910,72083990.
(10)Hot-rolled coils are generally obtained in steel mills by hotrolling semi-finished steel products after the final rolling passor after pickling or continuous annealing. Hot-rolled coils are
woundintoaregularcoil.
For steel mills, which produce a great range of flat products of
steel, hot-rolled coils are used as a pre-material for manufac-turing other steel products (wide and narrow strips, all cold
rolled products, tubes, etc.). Hot-rolled coils can be of various
gradesand dimensions.The vast majority of importsfrom thirdcountriesintotheCommunityconsistof‘structuralsteels’(suchasS235andS275accordingto‘Euronorm’EN10025)and‘mildsteels’(suchasDD11,DD12,DD13accordingtoEN10011and
the ‘Deutsche Industrie-Norm’ DIN 1614/1). Coils are conven-
tionally between 1.5 and 15 mm thick and from 600 to2050mmwide.EachoftheCNcodeslistedabovecorrespondsto a specific product type as differentiated by width and thick-nesswithintheaboveranges.
(11)The product concerned is also classified into two distinct cate-gories according to its finishing: black hot-rolled coils2000S0283—EN—23.05.2002—003.001—4
(1) SeecorrigendumpublishedinOJC27,2.2.1999,p.30.
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(hereafter referred to as ‘black coils’) which are the basic
product and pickled hot-rolled coils (hereafter referred to as‘pickledcoils’)which,afterbeinghot-rolled,gothroughanaddi-
tionalsurfacetreatment called pickling.Thedistinctionbetween
blackcoilsandpickledcoilsisalsoreflected inthestructureofthe combined nomenclature as coils classified under the twocategoriesbelongtospecificandseparateCNcodes.
(12)Althoughimportsfromthecountriesconcernedaremainlyblackcoils, the investigation showed that imports cover all the CNcodes and thus all the different products listed above. Notwith-standing the fact that each CN code corresponds to adistinguishabletypeofhot-rolledcoil,itwasfoundthattheyall
have identical or similar physical and technical characteristics,
uses and applications. Accordingly, all types of hot-rolled coilsformone single product falling under the CN code listed inrecital(9)above.
2.Likeproduct
(13)The investigation has shown that the hot-rolled coils imported
fromthe countries concerned are identical to or com parable to
the Community-produced products, in particular in terms of the
gradesandtherangeofdimensionsavailable.
(14)Some exporting producers claimed that the product concernedwhich they produce and sell is not interchangeable and not
comparable as such with the Community-produced product.
They claimed that the production process of the Communityproducers was more advanced and even used different tech-nology, thus producing a higher quality product. Theymentioned that users sometimes had to re-roll the imported
products before they could be processed further. They therefore
claimed that their product was not a like product to that of thecomplainingCommunityproducers.
(15)Obviously,any difference in the production processresulting insurface or chemical defects may lead to a lower market value.
However, the investigation showed that, in general both the
Community-produced product and the imported product stillhave the same basic physical characteristics and uses, eventhough the products are not identical, in particular in terms ofquality, across suppliers and across shipments of a given
supplier. This, however, cannot lead to the conclusion that hot-
rolled coil imported from the countries concerned is not a likeproduct to that produced by the Community industry and soldintheCommunity.
(16)Theinvestigationalsoshowedthatthegradesanddimensionsoftheproductconcernedimportedfromthecountriesconcernedareidentical or comparable to the products sold on the domesticmarketofthecountriesconcerned.
(17)Onthisbasis,itwasconcludedthathot-rolledcoilsproducedinthe countries concerned and sold on the domestic markets ofthese countries, hot-rolled coils exported to the Communityfromthese countries and hot-rolled coils produced and sold bythe complaining Community producers on the Communitymarket,arealikewithinthemeaningofArticle1(4)oftheBasic
Decision.
C.DUMPING
1.NormalValue
(18)In order to establish normal value, it was first determined for
each of the cooperating exporting producers whether the totalvolume of the domestic sales of the product concerned wasrepresentativeinaccordancewithArticle2(2)oftheBasicDeci-sion,i.e.whetherthesesalesrepresentedatleast5%ofthesalesvolumeoftheproductconcernedexportedtotheCommunity.2000S0283—EN—23.05.2002—003.001—5
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Itwasthenexamined foreach exporting producer whether total
domestic salesofeach producttypeconstituted 5%ormoreofthesalesvolumeofthesametypeexportedtotheCommunity.
Forthoseproducttypesmeetingthe5%test,itwasestablished
whethersufficientsaleshadbeenmadeintheordinarycourseoftradeinaccordancewithArticle2(4)oftheBasicDecision.
Where,perproducttype,theweightedaveragesellingpricewas
equaltoorhigherthantheweightedaverageunitcostandwhere
the volume of domestic sales equal to or above unit costrepre-sented at least 80 % of sales, normal value was established onthe basis of the weighted average prices actually paid for alldomestic sales. Otherwise, normal value was established on the
basisoftheweightedaveragepricesactuallypaidfortheprofit-
abledomesticsalesonlyunless,perproducttype,thevolumeofprofitabletransactionswaslowerthan10%ofthesalesvolume.
(19)Forthoseproducttypeswherethevolumeofdomesticsaleswaslower than 5 % of the volume exported to the Community, orwhere the volume of profitable domestic sales was less than10 %, domestic sales of those product types were consideredinsufficientwithinthemeaningofArticle2(3)oftheBasicDeci-
sionandwerethereforedisregarded.Inthesecases,normalvalue
was based on the weighted average of the prices charged byother exporting producers in the country concerned, if they hadrepresentative domestic sales of the corresponding product typemadeintheordinarycourseoftradeinaccordance withArticle
2(1)oftheBasicDecision.
(20)Where, per product type, there were insufficient sales or norepresentative domestic sales by other exporting producers in
the country concerned, normal value was constructed on thebasis of the costs of manufacturing incurred by the exportingproducer concerned for the exported product type in questionplusareasonable amountforselling,general andadministrative(SG&A)costsandprofitsinaccordancewithArticle2(3)and(6)
of the Basic Decision. In general, for each exporting producer,
the SG&A were based on its representative domestic sales andthe profit margin based on its representative domestic salesmade in the ordinary course of trade. However, in one case,there was only one cooperating exporting producer in thecountryconcerned withoutrepresentative domestic sales.There-
fore,theweightedaverage oftheSG&Aandprofitoftheother
cooperating exporting producers were used, to the extent thattheseproducershadrepresentativesalesandsalesintheordinarycourseoftraderespectively.
2.Exportprice
(21)Where export sales to the Community were made directly to
independent importers export prices were established on the
basis of the prices actually paid or payable by these importers
inaccordancewithArticle2(8)oftheBasicDecision.
(22)Where export sales were made to importers in the Communitywhich were related to the exporting producer, the export priceswereconstructedonthebasisofthepricesatwhichtheimportedproductswerefirstresoldtoindependentbuyersintheCommu-nity, in accordance with Article 2(9) of the Basic Decision.Adjustments were made for all costs incurred between importa-
tion and resale, including a reasonable margin for SG&A plus
profit.
3.Comparison
(23)Forthepurposesofafaircomparisondueallowance,intheform
of adjustments, was made for differences claimed under Article2(10) of the Basic Decision and demonstrated to affect pricecomparability.Onthisbasis,adjustmentsweremadewithregardto import charges and indirect taxes, discounts, rebates, trans-2000S0283—EN—23.05.2002—003.001—6
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port, insurance, handling, loading and ancillary costs, packing,
credit,after-salescostsandcommissions.
(24)Two companies in India claimed an allowance for importcharges.PursuanttoArticle2(10)(b)oftheBasicDecisionthese
requests were partially granted to the extent that it was proved
that the materials on which import duties were payable hadbeen physically incorporated into the products concerned soldonthedomestic market andthattheimportdutieshadnotbeencollected or refunded in respect of the product exported to theCommunity.
(25)One Indian company requested an adjustment for differences in
quantitiesonthegroundsthat thequantities soldperinvoice on
the domestic market were smaller than the quantities sold pershipment on the Community market. It was claimed that salestotheCommunityweremadeatalowerpriceduetothelargerquantities involved. Since no link was demonstrated withdiscountsorrebates,asrequiredbyArticle2(10)(c)oftheBasic
Decision,thisrequesthadtoberejected.
(26)The two exporting producers in South Africa contended that
variousrebate schemesapplied todomestic salesofthe productconcerned and that the normal value shouldbe reduced accord-ingly. Adjustments could only be made to the extent that theirlinkwiththesalesunderinvestigationwasproved.
(27)Theexporting producerinYugoslaviaclaimed that thevalue oftheir exports should be calculated using the alleged market
exchange rate. However, as the rate used in the financial
accounts was the official exchange rate and as the companieswere not able to present sufficient evidence demonstrating thatthecorrectratetobeusedwasthemarketexchangerate,itwasdecided tousethe official exchange rate tocalculate the exportprice.
4.Dumpingmargins
a)General method
(28)InaccordancewithArticle2(10)and(11)oftheBasicDecision,
thedumpingmarginswereestablishedonthebasisofacompar-ison between the weighted average normal value per producttype and the weighted average export price at ex-factory level
forthesameproducttypeandatthesameleveloftrade.
(29)For exporting producers concerned by the proceeding who didnotreplytotheCommission'squestionnaire,didnotmakethem-
selvesknownordidnotsupplynecessaryinformationduringtheinvestigation, the dumping margin was determined on the basisof the facts available in accordance with the provisions ofArticle18(1)oftheBasicDecision.
AcomparisonofEurostatfigureswiththedataonthevolumeof
exportstotheCommunitysuppliedbythecooperatingexportingproducers was made in order to establish per exporting countryconcerned the level of cooperation in the current investigation.As a result, for all countries subject to investigation, with the
exceptionofTaiwan,itwasfoundthattheoveralllevelofcoop-
eration was high. The Commission therefore considered itappropriate to set the dumping margin for the non cooperatingcompaniesatthelevelofthehighestindividualdumpingmarginestablished for a cooperating exporting producer in the country
concerned,sincetherewasnoreasontobelievethatanoncoop-
eratingexportingproducerhaddumpedatalevellowerthanthehighest level found. Since for Taiwan the level of cooperationwasfoundtobelow,infactsignificantlybelow50%,thelevelof the residual dumping margin was set at the level of thehighestquarterlydumpingmarginfoundinthatcountry.2000S0283—EN—23.05.2002—003.001—7
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The above approach was also considered necessary in order to
avoid creating a bonus for non-cooperation and an opportunityforcircumvention.
b)Dumping margins per country
(30)The dumping margins, expressed as a percentage of the CIF
priceatCommunityfrontierlevel,are:
(31)Bulgaria
KremikovtziCorp 27,1%Residual 27,1%
(32)India
EssarSteelLtd 55,8%SteelAuthorityofIndiaLtd 56,3%TataIron&SteelCompanyLtd 29,4%Residual 56,3%
(33)SouthAfrica
IscorLtd 47,8%HighveldSteel&VanadiumCorpLtd 37,8%Residual 47,8%
(34)Taiwan
ChinaSteelCorp ►M17,1%◄
YiehLoongEnterpriseCoLtd 2,1%Residual 30,3%
(35)Yugoslavia
Sartida.d. 56,1%Residual 56,1%
(36) Iran
As set out in recital (69) below, it was found that the imports
fromIran were below the de minimisthreshold foreseen in
Article5(7)oftheBasicDecision.Therefore,itwasnotconsid-ered necessary to carry out a dumping determination withrespecttothiscountry.
D.COMMUNITYINDUSTRY
1.DeterminationoftherelevantCommunitymarket
(37)For the purposes of establishing whether the Community
industryhadsufferedinjuryand,inthiscontext,fordeterminingconsumption and the various economic indicators related to the
situation of the Community industry, it had to be examined
whether production of this industry destined for the captivemarket should be excluded for the purposes of this analysis orwhether injury and consumption should be assessed in relationtotheentireproductionoftheCommunityindustry.
(38)There are sixteen producers of hot-rolled coils in the Commu-nity. Around 70 % of the hot-rolled coils manufactured bytheseproducersareusedinacaptivemarket,i.e.theyarefurthertransformedbytheseproducersinanintegratedprocess(herein-2000S0283—EN—23.05.2002—003.001—8
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after referred to as ‘captive market’). These hot-rolled coils
followaninternalprocessoftransferstodownstreamprocessingworks,forwhichnoinvoicesareissuedsincethetransfersoccur
within the same legal entity. The remaining production (herein-
after referred to as ‘free market’) is sold to both related andunrelatedparties.
(39)In this respect, the complainant claimed that two separatemarkets should be distinguished. It claimed that the hot-rolled
coilsdestinedforacaptivemarketwerenotindirectcompetition
with dumped imports. Consequently, the imports subject toinvestigation could not affect this market. In parallel, thecomplainant has claimed that the remaining production wassoldonthefreemarketwherecompetitionwithdumpedimports
takesplace.Themainpurchasersonthefreemarketareindepen-
dentcold-rollingmillssuchastubemakers,steelservicecentres(hereinafter referred to as ‘SSC's’), steel merchants and stock-holders. Only the hot-rolled coils sold on the free market aresubjecttothecomplaint.
(40)Exporting producers and importers of hot-rolled coils onto the
Community market claimed that the definition of the product
concerned and the like product covered all hot-rolled coils.They claimed in particular that there was no clear separationbetween the captive and free markets and that the definition ofthe free market made by the complainant was arbitrary. They
therefore requested that the assessment of the Community
market should include the captive market and the free markettakentogether.
(41)In support of this claim, reference was made to the Gimelec
judgment(1) of the European Court of Justice. They stated that
in the above-mentioned ruling, the Court referred to the
following factors to rule out the existence of two separatemarkets:
— theproductconcernedwassoldonthesamemarketandused
forthesamepurposes;
— theCommunityproducerssoldtheproductconcernedbothto
relatedandunrelatedcustomersandchargedmoreorlessthesameprice;
— companies on the downstream market used to buy the
product concerned not only from related Communitysuppliers but also fromim porters or other unrelated produ-cers.
(42)Someexportingproducersclaimedthat,inthelightoftheabove
judgement,thelegalconditionstoseparatethemarketswerenot
metinthepresentcase.TheyconsideredthatCommunityprodu-cers could choose, depending on market conditions, to sellalternatively to the free and captive markets since Communityproduction of the two categories of hot-rolled coils is alike. Itwas claimed that the alleged movements between the two
segments of the market legally prevented the exclusion of part
of Community production from the examination of injury, andinparticularfromCommunityconsumption.
(43)InthisrespecttheCommissionmadethefollowingfindings:
(a) Given the high level of integration existing in the steel
industry in general and in the production of the productconcerned in particular, the Community producers of the
product concerned merely physically transferred, without
invoicing, hot-rolled coils intended for the captive market.No invoices were issued since the parties involved did nothaveseparatelegalidentities.Asaresult,therewere,withinthe captive market, no prices for transfers comparable tothoseinthefreemarket.2000S0283—EN—23.05.2002—003.001—9
(1) CaseNoC-315-90of27.11.1991
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(b) The Community industry did not produce for stockpiling
hot-rolledcoilswhichcouldsubsequentlybedeliveredeitherforcaptiveuseorsoldonthefreemarket.Thisisbecauseall
users of hot-rolled coils, including the integrated processes
of the Community industry, have technical constraints forthe production of downstreamproducts. As a result, m ove-ments, if any, of hot-rolled coils between the two marketsareinsignificant.
(c) The investigation showed that the integrated Community
producers did not purchase the product concerned for thecaptivemarketfromindependentpartiesinsideoroutsideoftheCommunity.Asaresulthot-rolledcoilsintendedforthe
captivemarketwerenotincompetitionwithotherhot-rolled
coilsavailable intheCommunity.Consequently,thecaptivemarketcanclearlybedistinguishedfromthefreemarket.
(44)On this basis the Commission considers that the separationbetweenthefreeandthecaptivemarketisfullyinlinewiththerequirements of the Basic Decision and the Community institu-tionspastpractice.
(45)Forthepurposesofestablishingtheeconomicindicatorsrelevantfortheinjuryanalysissuchasdevelopmentofsales,profitability,etc.,theCommissionconsideredwhethersalesfromCommunityproducerstorelatedpartieshavingseparatelegalentities,should
ingeneralbeincludedinthedeterminationofthefreemarket.It
was found that such sales were made at more or less the sameprices as those charged to independent parties. In addition, inlinewithclaimsbycertainexportingproducerstheinvestigationhas confirmed that these related parties are free to source theirpurchasesfromeitherrelatedorunrelatedsuppliersinoroutside
theCommunity.Consequently, itwasconcluded thatsalesfrom
Community producers to related parties having separate legalentities were in competition with sales from independentsuppliers such as those located in the countries concerned andthatthesesalesshouldthereforebeincludedinthedetermination
ofsalesinthefreemarket.
(46)One Community producer claimed, however, that its sales to
related parties should be considered as belonging to the captive
market. It was argued that the prices invoiced to its related
parties were not the market prices and were significantlydifferent fromthose applied to independent custom ers. Theproducer added that the parent company did not allow anyrelated parties to purchase hot-rolled coils fromindependentparties on the free market. Consequently, hot-rolled coils sold
to related parties were not affected by any direct competition
fromother hot-rolled coils. They should therefore be excludedfromthedeterminationofthefreemarket.
(47)Theinvestigationconfirmedthatthepolicyofthatgroupwasnotto allow its related parties to purchase hot-rolled coils on thefree market. Furthermore, the analysis of sales prices showedthat the prices invoiced to these related parties were in manyinstances significantly different fromm arket prices charged toindependentparties.Moreover,allthesalesweremadetorelated
users who used the products captively without reselling them
onwards, as such. Consequently, the Commission concludedthat the sales of the hot-rolled coils concerned could not beconsideredasbeingsoldonthefreemarketandshouldthereforenotbeincludedinthedeterminationofthefreemarket.
(48)Inconclusion,hot-rolledcoilsusedbyCommunityproducersaspre-material for further transformation in an integrated processwithin one single legal entity were considered to be part of a
captivemarket.Thesameappliestosalesbytheaforementioned
Community producer who could demonstrate that its sales to arelatedcustomerdidindeedbelongtoacaptivemarket.Allothersales of the producers in the Community were considered to bepart of the free market. Consequently, the situation of theCommunityindustryintermsofthedevelopmentofthevarious2000S0283—EN—23.05.2002—003.001—10
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economic indicatorssuchasproduction,sales,market shareand
profitabilitywasexaminedwithrespecttothefreemarket.
(49)Itshouldbenoted that theabove findingsregarding the separa-tionandthedetermination oftheabovemarketsarereflected inthedatacollectedintheframeworkoftheECSCTreaty,inparti-cularforthesurveillanceofthesteelmarkets.Indeed,suchdatadifferentiates the use of the hot-rolled coils basically along thesamelines.
2.DefinitionoftheCommunityindustry
a)Total Community production
(50)Severalexportingproducersclaimedthatanumberofproducers
in the Community should be excluded from the definition ofCommunity production given that they had imported hot-rolledcoilsfromthecountriesconcerned.
(51)The Commission found that none of the producers investigatedhad imported hot-rolled coils from the countries concernedduring the period examined. However, certain SSC's and tubeproducersrelatedtotheseCommunityproducershadmadesuchimportsduringthatperiod.
(52)In line with the findings on the definition of the relevantCommunitymarketsoutlinedinrecitals(37)to(49),theinvesti-gation confirmed, however, that these related parties had actedindependentlyfromtheproducersrelatedtothemintheiropera-tionsonthefree market. Consequently, thepurchasescould notaffectthestatusofthesaidcompaniesasCommunityproducers
oftheproductconcerned.
(53)Accordingly, it was considered that there were no grounds for
excluding any producers from the definition of Communityproduction of hot-rolled coils. In accordance with Article 4(1)of the Basic Decision all sixteen producers operating in the
CommunitymarketrepresenttotalCommunityproduction.
b)Community industry
(54)Thecomplaintwaslodgedonbehalfofelevenoutofthesixteen
Community producers of hot-rolled coils while the remaining
fivesupportedthecomplaint.
(55)TheCommissionreceived tenrepliestoquestionnairesfromthecomplainantCommunityproducers.OnesmallproducerdecidednottoprovidetheCommissionwitharesponse.
(56)Two of the ten Community producers that replied to theCommission's questionnaire, were unable to provide all datarequestedduringtheinvestigationinaformatwhichwouldallowitsaggregation withthedata available fortheotherCommunityproducers.
(57)Someexporting producersclaimed that atleast oneCommunityproducer included in the definition of the Community industryset out above received preferential treatment in relation to therequirements imposed on interested parties during anti-dumpinginvestigations.InparticulartheyarguedthatthesaidCommunityproducer did not provide the Commission with a reply to its
questionnaire within the statutory deadlines for the imposition
ofprovisionalduties.Theyconsideredthatthisconstitutesdiscri-minatory treatment and violates Article 6(2) of the BasicDecision.
(58)ItshouldbenotedthatalltheCommunityproducersincludedin
thedefinitionoftheCommunityindustryrepliedtotheCommis-
sion's questionnaire within the deadlines set forth in the BasicDecisionandthereforewithinthedeadlinefortheimpositionofprovisional measures. The Commission considers that all inter-ested parties in the present proceeding in similar situation weregiven equal treatment. Consequently, any claims suggesting an2000S0283—EN—23.05.2002—003.001—11
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infringementtoArticle6(2)oftheBasicDecisionanddiscrimi-
natorytreatmentbytheCommissionarenotfounded.
(59)In conclusion, the eight Community producers having fullycooperatedintheinvestigationmakeuptheCommunityindustryfor the purposes of this proceeding and they accounted for
around 65 % of the total Community production of the product
concerned.
(60)These producers are accordingly considered as the Communityindustryandarereferredtoassuchhereinafterastheyrepresenta major proportion of total Community production within themeaningofArticle4(1)oftheBasicDecision.
E.INJURY
1.Apparentconsumption
(61)Apparentconsumptionofhot-rolledcoilsintheCommunitywas
established on the basis of the total sales made by the 16
Community producers on the free market and total imports of
the product concerned into the Community as indicated in theEurostat import statistics andthe exporting producers'replies tothequestionnaires.
(62)From1995uptotheinvestigationperiod,apparentconsumptionin the Community increased by9 %, namely from 18,4 milliontonnesto20,1milliontonnes.In1995thefreemarketwaschar-acterised by exceptionally high sales prices and good demand,
particularly for Community-produced hot-rolled coils. The
following year, however, the volume of the market decreasedby11%.
(63)Between 1996 and the investigation period, apparent consump-tion increased steadily. The main growth occurred between1996 and 1997 when the market increased by 22 %. Between1997andtheinvestigationperiod,itincreasedbyonly0,4%.
2.Importsfromthecountriesconcerned
a)Negligible imports
(64)Based on the provisions of Articles 3(4) and 5(7) of the Basic
Decision, the assessment of whether or not imports were negli-
gible was made in relation to apparent consumption of theproductconcernedontheCommunitymarket.
(65)On the basis of Eurostat statistics imports originating in threeexporting countries, namely India, Iran and South Africa, wereslightly above the 1% threshold foreseen in Article 5(7) of theBasicDecision.
(66)IranclaimedthatitwasinappropriatetouseEurostatstatisticsinassessingitsmarketsharegiventhatanon-the-spotinvestigationcarriedoutatthepremisesoftheonlyexportingproduceroper-
ating in that country confirmed significantly lower export
volumes to the Community. Accordingly, as was the case inpastproceedings,theyarguedthattheCommissionshouldassesstheIranianmarketshareonthebasisofthefindingsmadeduringitson-the-spotinvestigation.
(67)India and South Africa contested the determination of apparentconsumption, claiming that their imports were negligible andthat they should, like Iran, be excluded fromthe scope of the
investigation.
(68)Asmentioned above, it was found that onthe basis of EurostatimportstatisticsthemarketshareheldbyIranwasjustabovethe
de minimisthreshold,namely1,2%.However,itwasalsofound
thatthesestatisticsconflictedwiththeinformationcollectedandverified during the Commission on-the-spot verification for theonlyexportingproducerinIran.Accordingly,theEurostatStatis-tics were thus not considered sufficiently precise to base the2000S0283—EN—23.05.2002—003.001—12
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assessmentofthemarket shareheldbythatcountryexclusively
onthem.Thesestatistics weretherefore alsocompared withtheinformation available from interested parties in the proceeding,
notably the only exporting producer in Iran and its related
importers based in the Community. This comparison waspossible and particularly relevant in the present case becauseonly one producer operated in Iran. As this producer and itsrelated companies based in the Community cooperated fully in
theproceeding it waspossibletoverify hisclaimbya straight-
forwardcomparisonbetweentheverifiedexporttransactionsandEurostat. This verification and comparison established exportlevels fromIran significantly below the de minimisthreshold
andconcludedthatanydifference betweenthecompany'sinfor-mation and Eurostat's was not a result of exports to the
CommunityfromIranviaotherthirdcountries.
(69)Under these circumstances it was considered prudent that in
order to establish the market share held by Iran, duly verified
data should be used. Accordingly, it is concluded that exports
fromIran are below the de minimisthreshold, that any injury
fromim ports originating in Iran could only be negligible andthattheproceedingshouldbeterminatedwithrespecttoIran.
(70)With respect to the claimby the Indian and South Africanexportingproducerstheevidencesubmittedprovidednogroundsfor considering their imports into the Community as negligible,in particular given the methodology used to determine the rele-vant Community market set out in recitals (37) to (49) above.
Indeed,unlikeinthecaseofIran,therelevantEurostatinforma-
tion and the replies to the Commission's questionnaire did notshow imports below the de minimisthreshold. Consequently,
the imports from India and South Africa were considered to beabovethe de minimisthresholdsetoutinArticles3(4)and5(7)
oftheBasicDecision.
b)Cumulative assessment of imports
(71)The Commission considered whether imports ofhot-rolled coils
originating in Bulgaria, India, South Africa Taiwan and Yugo-slavia should be assessed cumulatively in accordance withArticle3(4)oftheBasicDecision.
(72)Itwasthereforeexaminedwhetherallcriteriaweremettocumu-late imports from the countries concerned. The results of theexaminationshowedthat:
— the margin of dumping relating to each country, as shown
above,wasmorethan de minimis;
— thevolumeofimportsfromeach countrywasnotnegligible
whencomparedtoCommunityconsumption;
— the analysis of the conditions of competition between
imported hot-rolled coils and the conditions of competitionbetween imported hot-rolled coils and the like Communityproduct also indicated that imports from the countries
concerned shouldbe cumulated. Indeed, the exporting coun-
tries concerned mainly sold hot-rolled coils on the freeCommunity market directly to unrelated customers, such ascold rolling mills, tube makers, SSC's and steel merchants.Hot-rolled coilswerealsoimported via related salescompa-nies, which subsequently sold the product concerned to the
same categories of customers mentioned above. The investi-
gation showed that the Community industry was selling thelike product through the same sales channels and to thesame categories of customers. Finally, it was found that asimilarpricingpolicywasfollowedforallthesesales.
(73)Accordingly,contrarytothesuggestionmadebysomeexportingproducers, the Commission concluded that all conditions justi-fying the cumulation of the imports from the above-mentionedcountriesweremet.2000S0283—EN—23.05.2002—003.001—13
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c)Volume of the imports concerned
(74)BasedonEurostatimportstatistics,between1995andtheinves-
tigationperiod,thevolumeofimportsintotheCommunityfromthe countries concerned increased by 229 %, namely from 0,65million tonnes to 2,14 million tonnes. The increase of imports
between 1995 and 1996 was very limited (+ 0,10 million
tonnes). The main increase occurred between 1997 and theinvestigationperiod(+1,26milliontonnes).
(75)Theanalysisofthedevelopmentsduringtheinvestigationperiodindicated that imports from all the countries concerned weremade mainly during the first half of the investigation period(1,3million tonnes); they subsequently dropped by42%in thesecondhalfoftheinvestigationperiodbutwerestillsignificantlyhigherthaninthesecondhalfof1997.
(76)Asalreadymentionedinrecital(11)above,thevarioustypesofhot-rolled coils are commonly classified into two distinct cate-gories: black coils and pickled coils. The investigation showed
that black coils covered around 90 % of all hot-rolled coils
importedfromthecountriesconcerned.
d)Market share of imports
(77)Themarketshareheldbytheexportingproducersincreasedfrom
3,5%to10,7%between1995andtheinvestigationperiod.The
actual increases in import volume thus allowed the countriesconcerned to gain 7,2 percentage points of the share of theCommunitymarket.
(78)Themain increases inmarket shareoccurred between 1997andthe investigation period, when the countries concerned gained6,3-percentagepointsmarketshare.
e)Price undercutting
(79)In order to evaluate any possible price undercutting, prices of
comparable types of hot-rolled coils were, as far as possible,compared under similar sales conditions on the Communitymarket, in the same Member State and to the same customers.ThepricesoftheexportingproducerfreeatCommunityfrontier
werecomparedwiththeCommunityindustry'sex-factoryprices.
Wherenecessary,exportingcountries'salespriceswereadjustedto a free at Community-frontier level, customs duty paid andincluding relevant import costs. Similarly, these prices werealsoadjustedtoensurecomparisonatthesameleveloftradeas
that of the Community industry. Alladjustments were based on
the evidence collected and verified by the Commission duringtheinvestigation.
(80)As already mentioned in recital (14) some exporting producerssuggested that the hot-rolled coils they produced and sold ontheCommunitymarketwerenotofacomparablequalitytothatoftheCommunityindustry.Oneexportingproducerclaimedthatunlike the Community industry's production process, theirproductswerenotproducedthroughcontinuouscastingandthis
causedchemicalandsurfacedefectswhichlowertheyieldwhen
thecoilsareprocessedfurther.Inaddition,thefactthattheydonot have an automatic ‘coiler’ leads to thickness and widthvariations,andthustoapoorerquality.Theysubmittedevidenceto this effect and consequently requested a price adjustment for
differences in quality in the context of the price comparisons
whichweremadeindeterminingpriceundercutting.
(81)The Commission found that, in general, a price adjustment for
differences in quality was not justified, particularly as such
differences were not apparent to users, and as it emerged fromthe investigation that any alleged difference in quality does notnecessarily affect the use of the product concerned. For oneparticular exporting producer, however, the evidence providedindicated that the requested quality adjustment was partly justi-2000S0283—EN—23.05.2002—003.001—14
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fied.Althoughadetailedinvestigationoftheleveloftheadjust-
mentrequestedrevealedthattheclaimwasoverestimated,basedontheevidenceavailablehalfoftherequestedadjustmentcould
begranted.
(82)Accordingly, the results of the price comparison expressed as a
percentageofCommunityindustrypricesareasfollows:
— Bulgaria:6,8%
— India:6,7%
— ESSAR:6,1%
— Tata:6,1%and— SAIL:19,1%
— SouthAfrica:5,3%
— Iscor:4,9%and
— HighveldSteel:27,0%
— Taiwan:4,3%
— YiehLong:3,9%and
— CSC:7,5%
— Yugoslavia:12,4%
3.Situation of the Community industry between 1995 and
theinvestigationperiod
a)Production
(83)The investigation showed that Community industry's production
peakedat12,5milliontonnesin1997.Fortheremainder oftheperiodexamined theCommunityindustry'sproductionremainedstableataround11,4milliontonnesalthoughafallinconsump-tion was observed in 1996. It should be noted that this
production was either sold on the free market or exported to
thirdcountries.
(84)As the production capacity of the Community industry is usedfor hot-rolled coils intended for both the free and the captive
market, it wasalso considered necessary to analyse information
onsuchcaptiveproductioninordertoascertainthatanydropinthe production intended for the free market was not due to anincreasedneedforthecaptivemarket.
(85)Itwasfoundthatbetween1995andtheinvestigationperiod,thisproduction increased by 2 %, or by around 0,6 million tonnes.Thisindicated a relatively stable captive production.Asregardsthetrendsincaptiveproductionbetween1997andtheinvestiga-tion period, these were similar to those observed above for the
productionintendedforthefreemarket.
(86)Consequently, the decrease in production intended for the free
marketisnotduetoagreaterneedforcaptiveproduction.
b)Capacity and capacity utilisation
(87)It is to be noted that production facilities can be used for
products destined for both the free and the captive markets, aswell as for other products not concerned by this proceeding(including othersteel grades andother steel products).Capacityutilisation related to the product concerned has therefore been
established on the basis of the capacities officially declared to
the Commission within the framework of the ECSC Treaty.Thesecapacitiesareestablishedaccordingtospecificparametersandmustnotbeconfusedwiththegrossornameplate capacity.Thegrossornameplate capacityisthehighestpossiblecapacityachievable without taking into account factors such as the
personnel available, holiday periods, set-up times, maintenance,
etc.
(88)The capacity utilisation rate of the Community industry was87 % between 1995 and the investigation period, except in2000S0283—EN—23.05.2002—003.001—15
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1997whentheCommunityindustry'sproductionwasatitspeak
andtheratereached93%.Atthattime,boththeconsumptionofhot-rolled coils destined for the free market and those destined
forthecaptivemarketwerehigh.
(89)The high utilisation rates were found to be normal bearing in
mind that in heavy industry, particularly in the steel industry,high capacity utilisation is necessary to reduce the impact ofthehighfixedcostsofproduction.
c)Orders received and sales volume
i) Ordersreceived
(90)Inordertocomplementtheanalysisonsales,thedevelopmentof
the orders received by the Community industry was examined.
Forthispurpose,theCommunity industrysubmitted data which
isalsoavailable under the framework ofthe surveillance oftheCommunitysteelmarketundertheECSCTreaty.Althoughthesedata do not reflect exactly the situation with respect to theproduct concerned but encompassed a slightly broader category
of products, it wasfound that this aggregation of data could be
considered representative for the situation of the productconcerned. These data showed that 1997 was a year where thelevel of orders was high as compared to the situation foundduring the investigation period. Contrary to the stable develop-ment of the apparent consumption between 1997 and the
investigation period shown above, orders received by the
Community industry declined by 17 % between 1997 and theinvestigationperiod.
(91)The above finding suggests that the economic activity of theCommunity industry was more regular and evenly spreadthroughout the year 1997 when the volume of orders receiveddeveloped more in line with sales volume. Furthermore, given
the existence of a time lag between orders and deliveries, the
reductionintheordersreceivedindicatedareductionoftheleveloftheeconomicactivity,whichwillbeexaminedbelow.
ii) Sales
(92)During the period examined, the volume of sales slightly
increased from 9,6 million tonnes to 9,7 million tonnes, anincreaseof1%.
(93)Within that period, the trend in sales volume broadly reflectedthe evolution of consumption. However, between 1997 and the
investigation period, the Community industry's sales decreased
by12%whileconsumptionincreasedslightly.
(94)The Community industry submitted that the injury indicatorconcerningsalessetoutabovehasbeenestablishedonthebasisof transactions delivered and invoiced during the periods speci-fied. In this context, it is important to point out that theCommunity industry has organised its production process insuchawaythatusers'ordersmadeonagivendatearedelivered
and invoiced and thus sold to them, with a time lag of at least
three months. Therefore, in order to make a meaningful assess-ment of the development, which occurred during any givenperiod, not only the actual sales but also the orders receivedduring such a period have to be analysed. It is considered that
anydevelopmentobservedwithrespecttotheseordersisbound
totranslateintocorrespondingdevelopmentsofsaleswithatimelagthereafter.
iii) Differentiationoftypeofsales
(95)TheCommunityindustryarguedthatinordertoassesstheactual
injuryitsuffered,thedevelopmentofsalesfordifferenttypesofhot-rolled coils under investigation, namely black coils ascompared to pickled coils, should be analysed separately. The2000S0283—EN—23.05.2002—003.001—16
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claim was that given the high share of dumped imported black
coils in total imports, the development of the Communityindustry sales volume and sales prices for that type of coils
wouldindicateaparticularlyinjurioussituation.
(96)Investigation of this particular issue showed that from1995 up
to the investigation period (1998), the volume of black coils
sold by the Community industry on the free market decreased
by13%,whereasthevolumeofpickledcoilssoldincreasedby34 %. In absolute terms, this represents a decrease of around 1million tonnes insalesofblack coils andan increase ofaround0,5milliontonnesinsalesofpickledcoils.
(97)ItalsoconfirmedthatthesharebetweenthesalesofblackcoilsandpickledcoilsfortheCommunityindustrywasmorebalancedthanthatoftheexportingproducers.From1995upto1997theshare insales volume was70% ofblack coils against 30%of
salesofpickled coils.Duringtheinvestigation periodthisshare
became60%and40%respectivelyforblackandpickledcoils.This development in total sales clearly shows that during theinvestigationperiodashiftoccurredfromblacktopickledcoils,i.e. from a category of products where imports were morepresenttooneweretheywerelessprominent.
d)Price evolution
(98)Duringtheperiodexamined theCommunityindustry'sweighted
averagesalespricedecreasedby10%.In1995salespriceswereat their highest for ten years. They continued to follow adecreasing trend until 1997 (- 17 % and - 3 % compared to
1995and1996respectively) butrecovered from1997uptothe
endoftheinvestigationperiod(+9%).
e)Market share
(99)From1995uptotheinvestigationperiod,themarketshareheld
bythe Community industry decreased by3,7 percentage points,
dropping from52,0 % in 1995 to 48,3 % in the investigation
period.
(100)Between1995and1996andbetween1996and1997themarket
shareheldbytheCommunity industryincreased by1,1and1,8
percentagepointsrespectively.
(101)Between 1997 and the investigation period, however, theCommunity industry lostall the market share previously gained
andfelltoalowerlevelthanthatin1995.Thelossesamounted
to 6,6 percentage points. Further analysis of this situation indi-catedthatmarket sharewaslostduetoadecreaseinsalesbothto related and unrelated customers on the Community freemarket.
f)Profitability
(102)The average return on sales made by the Community industry
for the product concerned from1995 up to the investigationperiod decreased by 39 %. The high profits (20,7 %) achievedin 1995 were the result of high prices on the market at that
time.In1996,despiteadownturninthemarketandareduction
insalesprices(-15%),theCommunityindustryremainedprof-itable. However, the recovery in sales volume in 1997 did notallow that industry to increase its profit margin since its salespricesagaindecreasedby3%.
(103)During the investigation period profitability recovered slightlyfromits 1997 level. The increase in sales prices during theinvestigation period (9 % compared to 1997) allowed theCommunity industry to achieve a profit margin of 12,9 %. The
Communityindustryclaimedthatthislevelofprofitwasreason-
able.
(104)Some exporting producers suggested that the Communityindustryachievedanextremelyhighlevelofprofitabilityduring2000S0283—EN—23.05.2002—003.001—17
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the investigation period and that the development of this indi-
catoraloneshouldhavewarrantedimmediate termination oftheproceeding. They said that such profit was significantly higher
thanthatconsideredreasonablebytheCommissioninpastanti-
dumpingcasesinvolvingsteelproducts.
(105)Inthisrespectitshouldbenotedthattherelevant provisionsof
theBasicDecisionandtheWTOAnti-dumpingagreement state
that the determination of injury shall be based on positiveevidenceof(a)thevolumeofdumpedimportsandtheeffectofdumped imports on prices on the Community market for likeproducts;and(b)theconsequentimpactofthoseimportsonthe
Community industry. Moreover, they specify that consideration
shall be given to whether there has been a significant increasein the volume of dumped imports, either in absolute terms orrelative to consumption in the Community. Furthermore, theyalso specify that consideration shall be given to whether therehas been significant price undercutting by dumped imports or
whether the effect of such imports was to depress prices to a
significantdegreeortopreventpriceincreases.Nooneormoreof these factors can necessarily give decisive guidance. Finally,theystatethattheexaminationoftheimpactofdumpedimportson the domestic industry shall include an evaluation of all the
relevant economic factors and indices having a bearing on the
state of the industry, including the magnitude of the actualmarginsofdumping,actualandpotentialdeclineinsales,profit,output,marketshare,productivity,utilisationofcapacity,factorsaffecting prices, etc. The Basic Decision specifically states thatthis list is not exhaustive, nor can any one or more of these
factorsnecessarilygivedecisiveguidance.
(106)In the present case, the investigation has shown that imports of
dumped imports have significantly increased in absolute and
relative terms. In addition, low-priced dumped imports were
foundtosignificantlyundercuttheCommunityindustry'sprices.Allthe above conditions being met, the Commissionhasevalu-ated the potential and actual developments of a number ofrelevanteconomicfactorsinitsinvestigationbeforereachingitsdefinitive conclusions. Accordingly, it is considered that the
suggestion by some exporting producers that only the level of
profitability should have warranted the termination of theproceeding is clearly against the provisions of the Basic Deci-sion.
(107)Furthermore, theeconomic situation ofthe Community industryduringtheinvestigationperiod,inparticularitspriceandprofit-abilitysituation,mustbeseeninthelightofthestructureofthehot-rolledcoilsmarketandthedevelopmentsthatoccurredinthe
economicsituationoftheCommunityindustryduringtheinves-
tigationperiod,assetoutinpoint4below.
(108)Finally, it is considered that the comparison of a specificeconomic indicator pertaining to the Community industry with
the same economic indicator worldwide level is not relevant in
thecontextofanti-dumpingproceedings.
g)Investments and employment
(109)Theinvestigationshowedthatinvestmentsweremademainlyin
thereplacement ofmachinery andequipment. Duringtheinves-
tigation period, the level of investment was similar to the 1995level.Investmentswereincreasedby32%ascomparedto1995,consistentwiththehighdemandin1997.
(110)As regards employment, the Community industry manufacturesvariousproductsonthesamesiteandwiththesamemachinery,notably hot-rolled coils. The investigation showed that duringthe period examined employment for the production of theproductconcerneddecreasedby4%.2000S0283—EN—23.05.2002—003.001—18
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h)Summary of the situation of the Community industry between
1995 and the investigation period
(111)Someexportingproducersclaimedthatadeterminationofinjuryduring the investigation period could not be carried out on thebasisofacomparisonofthesituationoftheCommunityindustryestablished in the years 1995 and 1997. They found that, in
particular, price and profitability levels in 1995, production,
capacity utilisation, sales volume and market share levels in1997 were not representative of what their levels should beunder conditions of fair competition. They thus argued that onthe basis of the other findings over the entire period examined,
it could not reasonably be concluded that the Community
industrysufferedmaterialinjury.
(112)Inthisrespectitshouldbenotedthat,intheaboveclaim,inter-ested parties have not stated in which respect some economic
indicatorsestablishedin1995and1997couldnotbeconsidered
representative.Theymerelystatedthatpricesandprofitsin1995and production, capacity utilisation, sales volume and marketshare were not representative. In other words, the above claimsuggests that a significant part of the data established during
theinvestigationcarriedoutbytheCommissionshouldbedisre-
garded in the present proceeding without any evidence orexplanationsindicatingthattheconditionsofnormalcompetitionwerenotmetin1995and1997.Giventhatduringitsinvestiga-tion the Commission found no evidence to corroborate theallegation that normal competition was not taking place on the
Communitymarketduringtheyears1995and1997,itisconsid-
eredthattherearenogroundstodisregardsuchinformation.
(113)The Commission thus examined the developments of the
economicsituationoftheCommunityindustrywithintheperiod
examined, and its overall economic situation between 1995 andtheinvestigationperiod,onayearlybasis.
(114)The investigation showed that between 1997 and the investiga-
tion period, with a slight increase in apparent consumption, the
Community industry increased its sales prices by 9 % but wasnotabletomaintainitssalesvolume,whichdecreasedby12%.Accordingly,theCommunityindustrylost6,6percentage pointsor14%ofmarket share.Furthermore, the Community industry
productiondecreasedby9%,leadingalsotoareducedcapacity
utilisation. Despite these negative developments profitabilityincreasedfrom6,3%to12,9%.
(115)Theinvestigationalsoshowedthatbetween1997andtheinves-
tigation period imports from the countries concerned increased
significantly in terms of volume (+ 143 %), leading to adoubling of their market share (+ 6,3 percentage points).Althoughthecountriesconcernedincreasedtheirsalespricesby7 % they were nevertheless found to be undercutting the prices
oftheCommunityindustryby8%onaverageduringtheinves-
tigationperiod.
4.Analysis of the situation of the Community industry
duringtheinvestigationperiod
a)Preliminary remarks
(116)The Community industry claimed that prices and thus profits
remained at a high level in the first half of the investigation
periodbecauseapparentconsumptionandthereforedemandwas
exceptionally high, even though it was not matched by acommensurate actual consumption. This led, in the first half ofthe investigation period, to an overstocking which was largelyfed by the imports concerned, and, in the second half of the
investigationperiod,toasignificantde-stocking.
(117)Furthermore, the Community industry indicated that a more
refinedanalysisofsalesbyproducttypesandsaleschannelsforwhich there is head-on competition between the Community2000S0283—EN—23.05.2002—003.001—19
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industry and imports would be necessary in the present case to
showthefullextentoftheinjurysuffered.Thisentailsadiffer-entiated analysis of sales of black as opposed to pickled coils,
and sales channels where longer-termcontracts are concluded
asopposedtoothersales.
(118)Finally, the Community industry claimed that a more detailed
analysis of the four quarters of the investigation period was
necessary given the existence of a time lag between ordersplaced by purchasers and deliveries made to them. It wasclaimed that such time lags effectively delayed the negativeimpact of the imports concerned. The Community industry
claimedthatitwasthereforenecessarytofurtherinvestigatethe
developmentofordersreceivedduringtheinvestigationperiod.
(119)Alloperatorsonthesteelmarket agreed thatbusinessismainly
carried out on a quarterly basis. Production is organised on the
basis of quarterly plans and prices. Both orders and deliveriesare negotiated accordingly. Therefore, the suggestion made bysome exporting producers that the partitioning of the investiga-tion period, in particular into quarters, did not constitute anobjective evaluation of the possible injury suffered by the
Community industry was not founded. The above claims of the
Community industry have therefore been investigated andanalysedassetoutbelow.
(120)In order to have an overview of the cyclical nature of theactivityoftheCommunityindustryandtocrosscheckthequar-terly developments of its economic situation, the Commissionalsocollectedquarterlydatafortheperiod1996uptothesecondquarterof1999.
b)Cyclical nature of the steel industry
(121)Accordingtothecomplainant,thereareseasonalfluctuationson
the steel market in that the first two quarters of each calendaryeararenormallybetterthanthelasttwoquarters.Suchseasonal
fluctuations could mainly be observed in sales activity. Sales
would normally be affected in the third quarter of the year duetotheholidayperiodintheuserindustries,buttheyshouldpickupagaininthefourthquarter.Giventhatsomeoftheabovealle-gations made by the Community industry required a quarterlyanalysis it was important to ensure that any development
observed did not merely reflect normal quarterly fluctuations.
This analysis was particularly relevant as the complainantalleged that the trends observed within the investigation periodwerefarbeyondthenormalcycles.
(122)For the evaluation of the cyclical nature of the hot-rolled coilbusiness, the Commission found that the trends in productionandsalesfortheCommunityindustryfrom1996uptotheinves-tigationperiodwereasfollows:
(%)
1stquarter 2ndquarter 3rdquarter 4thquarter
Production
—1996 93 97 95 100
—1997 97 100 97 97
—IP(1998) 100 94 77 70
Salesvolume
—1996 87 90 91 100
—1997 97 100 97 97
—IP(1998) 100 87 68 61
Salesvalue
—1996 100 96 89 942000S0283—EN—23.05.2002—003.001—20
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(%)
1stquarter 2ndquarter 3rdquarter 4thquarter
—1997 95 100 99 98
—IP(1998) 100 88 63 51
(123)Withregardtoproduction,itwasfoundthatthethirdquarterdid
not necessarily show the lowest level of activity. In 1996 and1997, the greatest difference found was 7 % between the firstand the fourth quarter of 1996 and the trend in production was
linear in those years. During the investigation period however
the levels of production in the third and in the fourth quarterwere far lower when compared to the first quarter, indicatingthat the fluctuations observed in that period were far beyondthenormalseasonalfluctuations.
(124)Concerningsalesvolume,thedownturnobservedinthethirdandfourthquarterswasevenmorepronouncedduringtheinvestiga-tionperiod.Salesactivityinthesecondhalfoftheinvestigationperiod was exceptionally low and far beyond the normalseasonalfluctuations.
(125)The above quarterly analysis covering the years 1996 and 1997as well as the investigation period, shows that the trendsobservedduringthislatterperiodarefarbeyondthenormalfluc-tuations linked to the cyclical nature of the hot-rolled coilbusiness.
c)Apparent consumption and overstocking
(126)Asindicated in recital (61) above, the development of apparent
consumption on a yearly basis was quite stable, in particular
between 1997 and the investigation period. It should be under-
lined that apparent consumption, by definition, does not reflectactual use, i.e. actual consumption of the product concerned byits users. The difference between apparent consumption andactual consumption is basically the quantity of stocks kept atvarious levels of the distribution chain, i.e. in the present case
byimporters,traders,dealers,SSCsandusers.
(127)The examination of this particular issue showed that apparent
consumptionwassignificantlyhigherinthefirsttwoquartersoftheinvestigationperiodthaninthelasttwoquarters.Inaddition,the comparatively steady development in apparent consumption
found throughout 1997 did not occur during the investigation
period. This difference in trends was particularly obvious whencomparing the end of 1997 and the beginning of the investiga-tion period, as there was a considerable increase in apparentconsumption between these two time periods. This suggests anincrease in stocks, whereas the reverse was true if the fourth
quarterof1997iscomparedwiththefourthquarteroftheinves-
tigationperiod,indicating asignificantdecreaseinstocksinthelasttwoquartersoftheinvestigationperiod.
(128)As it has been alleged that these stocks played a particularlyimportant role in the development of the market during the
investigation period, it was considered necessary to establish
thequarterlyapparentconsumptionnotonlyfortheinvestigationperiodbutalsofor1997.
(129)Toconfirmthesefindings,therelevantdevelopmentshouldalsohave been established for actual consumption. However, its
determination washampered bythe fact that cooperation of the
variousrelevantinterestedpartiesinthedistributionchainandatuserlevel wasnotcomplete. Nevertheless,theCommissionwasable toestablish thestocksheld attrader'slevel onthe basisofEurostat information gathered in the framework of the ECSCTreaty.2000S0283—EN—23.05.2002—003.001—21
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(130)In line with the above findings on apparent consumption, this
information showed that there was a considerable build-up of
stockattraderlevelbetweentheendof1997andthebeginningoftheinvestigationperiod.Anincreaseof29%betweenfourthquarter 1997 and first quarter of the investigation period and afurtherincreaseof11%betweenthefirstquarteroftheinvesti-gation period and the second quarter ofthe investigation period
wereobserved.
(131)This information also confirmed a considerable decrease in
stockstowardstheendoftheinvestigationperiod(-22%).The
use of stocks became clear when comparing the level of stocks
atthe endofboththe firstandsecond semesters ofthe investi-gation period. A comparison of the quarterly development ofstocksin1997withthequarterlydevelopmentduringtheinves-tigationperiodalsoconfirmstheabovefindings.
(132)Thistrendofoverstockinginthefirsttwoquartersoftheinves-tigation period was confirmed in a submission received by anexporting producer under investigation and by the informationfrom a major user of the product concerned on the Community
market.Thisuserheldstockswhichinthemiddleoftheinvesti-
gationperiodweremorethandoublethoseheldatthebeginningof this period, while there was no indication of a significantdifference in the underlying activity between the beginning andtheendoftheinvestigationperiodbythisuser.
(133)The investigation thus confirmed the Community industry'sclaimthat considerable overstocking occurred at the beginningoftheinvestigationperiod.Inthefirsttwoquartersoftheinves-
tigation period apparent consumption was significantly higher
thanactual consumption, while forthe third andfourthquartersoftheinvestigationperiodthedifferencewasreversed.
(134)Inabsoluteterms,itwasfoundthatapparentconsumptionduringthe first half of the investigation period exceeded apparentconsumption in the first half of 1997 by around 1,5 milliontonnes.
(135)Some interested parties claimed that the Community industrylargely contributed tothe overstockingobservedduringthe firsthalfoftheinvestigationperiod.Inthisrespectitshouldbenotedthat, as shownbelow, the Community industry'ssales started todeclinerightfromthebeginningoftheinvestigationperiod.This
suggeststhattheCommunityindustrydidnotplayanimportant
roleinfeedingtheoverstockingobserved.
d)Production and capacity utilisation
(136)Onaquarterly basis,productiondecreased by23%inthethird
quarter and by 30 % in the fourth quarter of the investigation
period as compared to the first quarter of the investigationperiod.
(137)Inlinewiththedecreaseinproduction,therateofcapacityutili-
sation also decreased by 12 % in the third quarter of the
investigation period and by 17 % in the fourth quarter ascomparedtothefirstquarteroftheinvestigationperiod.
(138)Similarly, it was found that production and capacity utilisationwere declining when compared with the relevant quarterlyactivityin1997.Inthethirdandfourthquartersoftheinvestiga-tionperiodascomparedtothethirdandfourthquarterof1997,production decreased by 20 % and 11 % respectively, capacity
utilisationby12%and18%.
e)Sales volume, sales prices and profitability
i) Salesvolume
(139)TheCommunityindustrysalesvolumedecreasedby32%inthe
third quarter of the investigation period and by 39 % in thefourthquarterascomparedtothefirstquarter.2000S0283—EN—23.05.2002—003.001—22
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(140)Furthermore, as already mentioned in the year-to-year analysis,
theCommunityindustryclaimed thatamorerefinedanddiffer-
entiated analysisofitsvarioustypesofsalesandsaleschannelsshould be made, as this would show that the sales competingdirectlywiththeimportsconcernedaremoreaffectedthanothersales. In addition to the differentiation between sales of blackcoils and pickled coils, that industry claimed that a proportion
of its sales were the result of long-termdelivery and sales
contracts,concluded,forexample,withtheautomobileindustry.These contracts typically cover a period of up to one year,during which delivery quantities and prices are fixed. Theexportingproducersconcerneddobasicallynotsupplythecusto-
mersundersuchcontracts.
(141)In order to carry out a detailed analysis the above mentioned
types of sales were grouped and are referred to as ‘long-term’
sales as compared to ‘other’ sales. Similarly, the development
ofsales,salespricesandprofitability ofblackandpickledcoilsduringtheinvestigationperiodwerealsoanalysed.
(142)The sales volume of long-term sales was much more stablethroughout the quarters of the investigation period than the restofthesalesactivity.Indeed,thedecreaseinlong-termsaleswas20 % in the third quarter and 22 % in the fourth quarter ascompared to the first quarter of the investigation period. Thedecrease in other sales was much more pronounced namely
35%and43%inthe thirdandthefourthquarter respectively,
ascomparedtothefirstquarteroftheinvestigationperiod.
(143)The same was true when analysing the sales volume of black
compared to pickled coils. During the investigation period the
volume ofpickled coils solddeveloped ina smoother waythanthat of black coils. The decrease in the sales volume of blackcoil was as high as 39 % in the third quarter and 44 % in thefourth quarter as compared to the first quarter of the investiga-
tionperiodwhereasthedecrease inpickledcoilswaslimited to
21%and29%respectively.
ii) SalespricesoftheCommunityindustry
(144)During the first two quarters of the investigation period sales
prices of hot-rolled coils were by and large stable, namely at a
level ofECU306and308pertonnerespectively. Subsequentlythey fell down to ECU 286 per tonne during the third quarterandtoECU254pertonneduringthefourthquarteroftheinves-tigationperiod.Overallthisrepresentsadecreaseof17%duringtheinvestigationperiod.
(145)The analysis of prices differentiated by types of sales showedthatpricesforlong-termsaleslargelyremainedstableinthefirstthree quarters of the investigation period, only decreasing from
ECU 320 per tonne to ECU 312 per tonne, namely a decrease
of2%.Thedecrease waslimited to10%whencomparing thefirst and the fourth quarter of the investigation period. Bycontrast, prices for other sales had already decreased by 10 %betweenthefirstandthethirdquarteroftheinvestigationperiodand by 21 % between the first and the fourth quarter of the
investigationperiod.
(146)The comparison between the development of prices of black
coils and pickled coils showed that prices of the former
decreasedmuchmorethanthoseofthelatter.Theresultofthese
differingtrendswasthatpricesacrosscategoriesdifferedsignifi-cantly more at the end of the investigation period than at thebeginning. Indeed, prices for pickled coils, only decreasingfromECU 328 per tonne to ECU 316 per tonne, nam ely a
decrease of 4 %. The decrease was limited to 12 % when
comparing the first and the fourth quarter of the investigationperiod.Bycontrast,pricesforblackcoilshadalreadydecreasedby 10 % between the first and the third quarter and by 22 %between the first and the fourth quarter of the investigationperiod.2000S0283—EN—23.05.2002—003.001—23
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iii) Profitability
(147)Onaquarterlybasis,itemergedthatprofitabilitywasverygood
duringthefirsthalfoftheinvestigationperiod.Giventhepreci-pitation of price decreases throughout the subsequent quarters,profitability continued to decrease, namely from 16,8 % duringthe first quarter of the investigation period to - 2,6 % in the
fourthquarter.
(148)Thedifferentiationinsalesshowedsignificantdecreasesinprof-
itability fromthe very start of the investigation period for the
salesofblackcoilsandsalesotherthanthelongtermsales.
(149)The investigation showed that profitability for the long term
sales was very good in the first half of the investigation period(around 21 %) and remained positive throughout the investiga-
tion period, namely 8 % in the fourth quarter of the
investigation period. Similarly other sales were also profitableat around 16 % in the first half of the investigation period. Inline with the development of demand for hot-rolled coils, itsubsequentlycollapsedinthethirdandthefourthquarterofthe
investigation period to become negative (- 7 %) in the fourth
quarteroftheinvestigationperiod.
(150)Thesameobservationsweremade onprofitability differentiatedfor black coils and pickled coils where profitability for both
types was good in the first half of the investigation period.
Subsequently, profitability for pickled coils remained positivethroughouttheinvestigationperiod(4,5%inthefourthquarter)whereas profitability in black coils sales significantly decreasedin the third quarter of the investigation period and reached alevel of losses as high as - 16,5 % in the fourth quarter of the
investigationperiod.
(151)In conclusion, overall sales, prices and profitability all fell
duringtheinvestigationperiod.Thistrendwassignificantlyless
pronounced for sales made in market segments where fewer
dumped imports were present. In terms of prices and resultingprofitability, the situation of the Community industry remainedrelatively stable duringthetime inwhichapparent consumptionboomed. The investigation has also shown that the Communityindustry did not increase its sales volume in line with the
increase in the apparent consumption. By contrast, price levels
and profitability remained at a high level at a time of strongandincreasingdemand.
(152)Theinvestigation alsoshowedthatthepurchasepricesofmajorcostitemsinthecostofproductiondecreasedduringtheinvesti-gationperiod.Notably,theprice ofironoredecreased byupto12 % and scrap by up to 40 % and the price of oil dropped tothe level of 1970. Accordingly, the cost of raw materialdecreased limiting the level of the losses incurred, particularly
duringtheinvestigationperiod.
(153)In order to complete the above analysis on sales volume, sales
pricesandprofitability,itwasfoundthattheseeconomicindica-
tors were also declining when compared with the relevant
quarterly activity in1997.Inthe third andfourthquarter oftheinvestigation period as compared to the third and fourth quarterof1997,salesvolumedecreasedby24%and27%respectively,salespriceswere6%and19%lower.Asregardsprofitability,itwasfoundthatitwas15percentagepointslowerinthefourth
quarteroftheIPascomparedtothefourthquarterof1997.
(154)Asshowninthechapterbelow,inassessingthedevelopmentsin
salesvolume,salespricesandprofitabilityitisimportanttonote
thatthereisatimelagbetweenpricenegotiationwithcustomers
and invoicing and delivery by the Community industry. Thus,when considering in particular the developments in other salesthe prices applied during the first quarter of the investigationperiodwereinfactnegotiated duringthefourthquarterof1997andsoon.2000S0283—EN—23.05.2002—003.001—24
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f)Time lag between the situation of the Community industry and
the market developments
(155)As already mentioned in the year-to-year analysis above, theCommunityindustryallegedthat,inassessingitspriceandprof-itability development, the existence of a time lag between thesales of the goods and price negotiation with customers relatedto such sales should be considered. In practice, it was claimed,thenegotiationsprecededthesalesbyatleastonequarter.
(156)Theinvestigationhasshownthatsmoothproductionplanningforan effective capacity utilisation resulted in a time lag betweenthe order and the sale. This time lag was indeed found to bearound one quarter. In other words sales in the first quarter ofthe investigation period are the result of orders negotiated and
concludedinthefourthquarterof1997.
(157)Given the existence of this time lag, the quarterly trend estab-
lished in the orders received by the Community industryshowed a significant decrease during the investigation period.InlinewiththeclaimbytheCommunityindustry,thisnegative
trendispronouncedrightfromthefirstquarteroftheinvestiga-
tion period compared to the trend determined for sales volumeandproduction.Thevolumeoftheordersreceivedinthesecondquarter of the investigation period were 17 % lower than thosereceivedinthefirstquarter.Furthermore,itemergedthatarela-
tively highlevel oforderswasreceived inthe fourthquarter of
1997, corresponding to deliveries/sales effected in the firstquarteroftheinvestigationperiod.
(158)ThesefindingsarethusconsistentwiththeclaimbytheCommu-nity industry that the relatively positive economic situation
duringthefirsthalfoftheinvestigationperiodmerelyreflectsa
healthy level of orders received during the last quarter of 1997and the first quarter of the investigation period, namely whendemandwasstillhigh.
g)Conclusion on the situation of the Community industry in the
investigation period
(159)The quarterly analysis indicated that the economic situation ofthe Community industry deteriorated significantly during theinvestigation period, in particular in the second half. This dete-
rioration went far beyond the seasonal fluctuations observed
duringthepreviousyearsonaquarterlybasis.
(160)Inparticular,itwasfoundthatinthethirdquarteroftheinvesti-gationperiodascompared totheaverage activity oftheperiod,all the injury indicators followed a negative trend: production
decreased by 10 %, capacity utilisation by 6 %, sales volume
by 14 %, sales prices by 2,4 % and profitability decreased by2,1percentagepoints.
(161)Furthermore, the developments observed during the fourthquarteroftheinvestigationperiodindicatedthatthesituationof
the Community industry only deteriorated further: as compared
to the average activity of the investigation period, productiondecreased by 18 %, capacity utilisation by 10 %, sales volumeby22%,pricesby13%profitabilitybecamenegative(-2,6%onnetturnover),adecreaseof15,5percentagepoints.
5.Developmentsaftertheinvestigationperiod
(162)Asmentionedabove,theoverstockingwhichoccurredduringthe
first half of the investigation period led to a relatively positive
market situation reflected in the good level of prices on the
Community market during this time period. Accordingly profit-ability of the Community industry was still good. However, inview of the fact that this situation was not supported by anunderlying positive development in the user markets but waslikely to lead to negative developments after a certain time lag2000S0283—EN—23.05.2002—003.001—25
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it was considered necessary also to confirmthis scenario by
analysingdevelopmentsaftertheendoftheinvestigationperiod.
(163)Aspointedoutbysomeexportingproducersitwasfoundthatacertaindegreeofrecoveryoccurredinthevolumeproducedandsold by the Community industry at the beginning of 1999.However, it should be noted that the level of production and
salesweresignificantlylowerthanthoseatthebeginningofthe
investigationperiodandthoseof1997.Inthisrespect,theinves-tigation showed that the economic situation of the Communityindustry continued to deteriorate after the investigation period,in particular in terms of a decrease in sales price and profit-abilityduringthetwofirstquartersof1999.
(164)This confirmed the negative effect of the massive overstockingwhichoccurred at the beginning of the investigation period andthe de-stocking which began during the third quarter of theinvestigation period and continued, despite a decrease in actual
imports,throughoutthefirsthalfof1999.Apartfromtheeffect
ofoverstocking,thedelaywithwhichthenegativedevelopmentoftheCommunityindustryoccurredwasalsoduetothetimelagunder which the Community industry operates with its custo-mers. This is apparent not only from the development of the
injury indicators such as production, sales, prices and profit-
ability,butalsofromthedevelopmentoftheordersreceivedbytheCommunityindustry.
(165)Some parties have claimed that the imposition of anti-dumping
measures in the present proceeding was unnecessary as the
importsconcernedceasedaftertheinvestigationperiod.
(166)The investigation showed that, based on generally available orunverified information, imports, in particular for some of the
countriesconcernedbythepresentproceeding,havefallensince
thebeginningoftheinvestigationperiod.However,thisisnotanunusual phenomenon in anti-dumping investigations as marketparticipants, in particular importers, take into account the factthat investigations require prudent assessment of the market
insofar as they can lead to the imposition of anti-dumping
measures. The reaction of market participants can be more orless pronounced. In any event, taking into account the decreasein imports, which may be limited in time, to justify the non-impositionofanti-dumping measureswouldallowtheexportingproducers concerned to adopt a stop-and-go policy for their
exports. It is considered that this would have highly disruptive
effect on the Community market for any product and thereforecan not in the present circumstances serve as a justification fornotimposinganti-dumpingmeasures.
(167)Finally, it has been claimed that the phenomenon of highimportsconcentrated inthe investigation periodwasonlyshort-lived. In the meantime market prices in the Community havereached levels which ensure a quick recovery of the economicsituationoftheCommunityindustry.
(168)It should be noted that detailed analysis demonstrates thatCommunityindustrypricescontinuedtodeteriorate andreachedverylowlevelsduringthefirsttwoquartersof1999.Thispricedecrease triggered considerable financial losses, which the
Community industry incurred during a considerable period of
time.
6.Conclusiononinjury
(169)Ontheonehand,theyear-to-yearanalysisofthesituationofthe
Communityindustryintheperiodfrom1995totheinvestigation
period showeda number ofnegative developments. In addition,
thequarterlyanalysisindicatedthattheeconomicsituationoftheCommunity industry significantly deteriorated throughout theinvestigation period. Contrary to the suggestion made by someexporting producers and taking into account the special charac-teristics of the Community market in terms of oversupply and2000S0283—EN—23.05.2002—003.001—26
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time lag between orders and deliveries these developments are
representative of the economic situation of the Communityindustryduringthewholeinvestigationperiod.
(170)The investigation has also shown that these negative develop-ments continued and even worsened after the end of theinvestigation period, a development which is particularly rele-vant in view of the functioning and the situation of theCommunity market. It has been ascertained that this deteriora-
tion went far beyond the seasonal fluctuations observed in
previousyearsonaquarterlybasis.
(171)To summarise, it was found that, during the third and fourthquarters of the investigation period, all the injury indicatorsfollowed a negative trend compared to the average activity ofthe investigation period: production decreased by 11 % and
18 % respectively, capacity utilisation by 6 % and 10 %, sales
volume by 14 % and 22 %, sales prices were negotiated 2,4 %and13%belowtheaveragepriceoftheinvestigationperiodandprofitabilitydecreasedby2,1and15,5percentagepointsrespec-tively.
(172)Similarly it wasfoundthat these economic indicators were also
declining whencompared with the relevant quarterly activity in
1997. In the third and fourth quarter of the investigation periodascompared tothethirdandfourthquarterof1997:productiondecreasedby20%and11%respectively,capacityutilisationby12 % and 18 %, sales prices were 6 % and 19 % and profit-
ability was positive both in 1997 and during the investigation
periodbutitwas15percentagepointslowerinthefourthquarterof the IP as compared to the fourth quarter of 1997. All thesetrends were confirmed during the two quarters after the investi-gationperiod.
(173)Theinvestigationthenrevealedthattheabovetrendswouldhave
been even more negative without specific sales such as those
under long termcontracts or those of pickled coils, which areless affected by the imports concerned. The orders received bytheCommunityindustryfordeliveryinthefourthquarteroftheinvestigation period were 31 % lower than those received fordeliveryinthefirstquarteroftheinvestigationperiod.
(174)On the other hand, the year-to-year analysis has shown thataverage profit rates increased from1997 to the investigationperiod, reaching a level of 12,9 %. Profits and sales pricesremained stable during the first quarters of the investigationperiod.
(175)Regardingthesefindings,whichcouldatfirstsightappeartobecontrary toa finding ofinjury, the investigation hasshownthatthey were in line with a high level of apparent consumptionduring the first semester of the investigation period which, theinvestigation has confirmed, was not matched by actualconsumption. As a consequence, the prices and profits of the
Community industry (whose sales did not develop in line with
theoverstocking) remained stablebutwereboundtodeterioratethereafter in view of the fact that the significant apparentconsumption was not met by a commensurate actual consump-tion. Indeed, during the second part of the investigation period,apparentconsumptiontumbledasthemassivestockswereused,
whichinturnprovokedasignificantpriceandprofitdecrease.
(176)The subsequent analysis of the economic situation of the
Communityindustryinthefirsttwoquartersof1999confirmedthatthesenegativetrendswerenotconfinedtotheinvestigationperiodandwerethedirectresultsofthedevelopmentsduringthe
investigation period. While production and sales volume
improvedsomewhatcomparedtothesecondhalfoftheinvesti-gation period, sales prices and profitability continued todecrease.ItshouldbenotedthattheBasicDecisionasconfirmedby the jurisprudence of the Court permits the informationpertaining to the time period after the end of the investigation2000S0283—EN—23.05.2002—003.001—27
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periodtobetakenintoaccount,inparticularinordertoestablish
whether trends observed during the investigation periodcontinue.
(177)Based on the developments in the situation of the Communityindustryduringtheperiodfrom1995totheinvestigationperiodandduringtheinvestigationperiodinparticular,theCommissionhas concluded that the Community industry has suffered injuryduring the investigation period. Contrary to the suggestion that
the economic indicators showing injury are largely outweighed
by other indicators showing lack of injury, the above detailedinvestigation showed that all economic indicators developednegatively, in particular profits and sales prices with a time lagofafewmonths.Themagnitudeoftheinjurysufferedenablesittobeclassifiedasmaterial inaccordance withtheprovisionsof
Article3(6)oftheBasicDecision.
F.CAUSATION
1.Introduction
(178)In the present analysis it should be borne in mind that the
productconcerned isaverypricesensitiveproduct.Inaddition,the market for this product, as shown above, has a number ofparticular characteristics: the relationship between the Commu-nity industry and certain users is long-term; production set upand planning entails a certain time lag between order and
delivery; and the Community industry operates more in certain
marketsegmentsthantheexportingproducersconcerned.Never-theless, these characteristics do not call into question the factthattheproductsproducedandsoldbytheCommunityindustryandthoseimportedbythecountriesconcernedarelikeproducts.
Itonlyindicates that certain sales channels andcertain typesof
product are more prone to competition from the importsconcernedthanothers.
(179)In order to reach its conclusions on the cause of the injurysufferedbytheCommunity industry,theCommissionexaminedtheimpactofthedumpedimportsfromthecountriesconcerned.
At the same time, the impact of other known factors and their
possible consequences on the situation of that industry werealso analysed. Such analysis ensured that any injury caused byother factors than dumped imports would be identified and notattributedtotheseimports.
(180)Theotherfactorsexamined were:thedevelopment ofconsump-
tion, the oversupply of the Community market, the impact of
hot-rolled coils imported into the Community from other thirdcountries, the behaviour of other Community producers notincludedinthedefinitionoftheCommunityindustry,theexportperformances of the Community industry and the world-widesituationofthesteelbusiness.
2.Impactofdumpedimports
a)Impact of the volume of dumped imports and stockpiling
(181)The investigation showed that the imports concerned increased
considerably, in particular between 1997 and the investigation
period. While in 1995, only 0,65 million tonnes of hot-rolledcoils entered the Community market from the countriesconcerned, representing 17 % of total imports, in 1997, thisrose to 0,88 million tonnes. During the period between 1995
and1997,theincreaseinthevolumeofhot-rolledcoilsimported
from the countries concerned waslimited to 0,2million tonnes.During the investigation period the volume of dumped importsreached 2,1 million tonnes and covered 45 % of all imports,thisrepresentsanoverallincreaseof229%fortheperiodexam-ined.2000S0283—EN—23.05.2002—003.001—28
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(182)Consequently,themajorincreaseinimportsoccurredduringthe
period 1997 to the investigation period and particularly during
the first two quarters. The investigation showed that over 1,3million tonnes were delivered onto the Community marketduring this six-month period. This represents more than threetimes the import volume ofthe second semester 1997.Between1997 and the investigation period, the imports in question
increased by 143 % and the market share held by the countries
concernedmorethandoubled,namelyanincreaseof6,3percen-tagepoints.
(183)During the period from1995 to the investigation period whileCommunity consumption increased by 9 %, the Communityindustry's sales volume increased by only 1 % and it thus lost
3,7percentagepointsofitsmarketshare.
(184)Asfarasthe period ofthe import surge(1997tothe investiga-
tion period) is concerned, it coincided with the deterioration ofthe Community industry's situation. Production decreased by9 % and sales volume by 12 %. The loss in market shareamountedto6,6percentagepointsandordersby17%.
(185)In addition, the development of import volumes, taken togetherwith the development of apparent consumption shown earlier,indicates that the dumped imports concerned mainly fed theincreaseinstocks,andthustheincreaseinapparentconsumptioninthefirsttwoquartersoftheinvestigation period,whereasthesalesoftheCommunityindustrydecreasedfromtheverybegin-
ningoftheinvestigationperiod.
(186)The investigation revealed that contrary to the exporting produ-
cers in question the Community industry is not very present inthe traders' sales channel. As regards certain large operators, itshowed that these ordered few or no hot-rolled coils fromtheCommunity industry during the third and the fourth quarter of
the investigation period. This resulted in a significant drop in
sales which started during the third quarter of the investigationperiod(-28%)andwhichcontinued(-12%)duringthefourthquarter. This in turn had a significant negative influence onprices and profitability of the Community industry during the
lasttwoquartersoftheinvestigationperiod.
(187)In order to fully assess this development it should be borne in
mind that the development of the situation of the Communityindustry was particularly negative, pronounced and immediatein sales channels and for product types in which the exportingproducers are mainly active. Indeed, these producers are not
very active in sales channels where long-termsales contracts
are concluded The Community industry has fared relativelybetter in these sales channels than in others, where competitionfromimportsismorepronounced.Ithasalsobeenshownabovethat the Community industry's sales of black coils, whichaccount for around 90 % of the imports concerned, have been
developingverynegativelythroughouttheinvestigationperiod.
b)Impact of the import price level and functioning of the steel
market
(188)The investigation showed that the situation of the Community
industryremainedstableintermsofpricesandthereforeoverall
profitability during the first two quarters of the investigationperiod, although import prices from the countries concernedcontinuously decreased during the whole investigation period.InthisrespecttheinvestigationhasshownthatthedevelopmentofpricesandprofitsoftheCommunityindustryweredue,onthe
one hand, to the general functioning of the market in terms of
the time lag between orders made by and deliveries to clientsand, on the other hand, by the development of stocks and thusapparentconsumptionduringtheinvestigationperiod.
(189)Concerning the general functioning of the market, it has beenfound that given the time lag between orders and deliveries2000S0283—EN—23.05.2002—003.001—29
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(namely one quarter), the situation of the Community industry
during the first quarter of the investigation period, basicallyreflected thesituation ofordersplaced duringthefourthquarter
of1997,whenimportsstartedtoincrease.
(190)In terms of the development of apparent consumption, it has
been found that the situation of the Community market in
general and of the Community industry in particular during the
first quarter of the investigation period corresponded to a timeperiod of spectacular growth in stocks — and thus apparentconsumption. This allowed prices and profits to remain highdespite the increase in imports which occurred at the same
time. The dumped imports thus had the biggest impact on the
economic situation of the Community industry when it becameclearthatthegrowthinstocksandthusinapparentconsumptionwas not matched by a growth in actual consumption. Indeed,given the considerable fall indemand forhot-rolled coils at theend of the investigation period, Community industry prices
decreasedby17%andprofitabilitybecamenegative.
(191)Thecomplainantclaimedthatattheendof1997andduringthe
entire investigation period the exporting producers adopted a
policy ofsystematic price decrease andwere continually under-
cutting the Community industry's prices. This precipitated andhastenedthefallinsalespricesontheCommunitymarketduringthatperiod.
(192)The investigation showed that the exporting producers indeed,reduced their price during the last quarter of 1997 while theCommunity industry attempted to maintain its price level untilJune 1998. In July 1998, the Community industry reduced itssalesprices.Theirsalesprices,whichwereover300ECU/tonne
in January 1998, fell to around 250 ECU/tonne in December
1998.
(193)ThisdramaticdecreaseinpricesisexplainedbythefactthattheexportingproducerscontinuedtoundercuttheCommunityindus-
try'spricesthroughouttheinvestigation period.Itistobenoted
that thelevel ofthe undercutting wasloweratthe beginning ofthe investigation period and became increasingly more signifi-cant throughout the investigation period. The Communityindustry had to reduce its prices in order to continue partici-
pating in the market, in particular from the middle of the
investigationperiodonwards.
(194)Inthisrespect it istobenoted that steel isa major commodityproduct and the indicative base price of hot-rolled coils is
published daily in specialised newspapers and is well know by
all operators present on the market. The products produced andsold by the Community industry and those imported by thecountries concerned are highly sensitive to price movementswhicharequicklytransmittedthroughthemarket.
Theabovethussuggeststhatoverall thefindingsoftheinvesti-
gation show that the imports concerned caused the negative
development in the economic situation of the Communityindustry.
c)Conclusion on the impact of dumped imports
(195)Itisconsideredthatthehighvolumesofdumpedimports,which
accumulated in the Community market within a very short
period, depressed prices and led to a reduced market share ofthe Community industry. These high import volumes allowedcertain large Community-based users to accumulate stocks withnegativerepercussionsonpricenegotiationwiththeCommunity
industry as early as in the second quarter of the investigation
period and to extend the period over which such importsdepressed prices. Moreover, given the general transparency ofthe market, users and purchasers in the Community marketbecame quickly aware of the low price policy applied by theexporting producers. This precipitated and hastened the fall of2000S0283—EN—23.05.2002—003.001—30
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salespriceonamarketwithnegativeresultsonmarketshareand
profitabilityoftheCommunityindustry.
(196)Consequently, it is concluded that the presence of low-priceddumped imports played an important role in the deterioratingsituation of the Community industry and thus to the materialinjurysufferedbythatindustryduringtheinvestigationperiod.
3.Impactofotherfactors
a)Development of consumption
(197)During the period examined apparent consumption on the
Community market increased continuously by 9 %. During the
period between 1997 and the investigation period apparent
consumptionincreasedby0,4%.
(198)Consequently, given the continuous positive development inconsumption volume since 1996, it is considered that it cannotbe linked to the injurious situation suffered by the Community
industryduringtheinvestigationperiod.
b)Oversupply of the Community market
(199)Certain exporting producers claimed that there was an over-
supply of the Community market at the beginning of theinvestigation period. They argued that the Community industrywas continuously increasing its deliveries on the market and
wasthusthemaincontributingfactorintheoversupply.Accord-
ingly,theyarguedthatthehighrateofcapacityutilisationoftheCommunity producers resulting from high deliveries shouldexcludeanyinjurytobeattributedtoimportsfromthecountriesconcerned.
(200)The detailed analysis of the development in apparent consump-tion in 1997 as compared to the investigation period showedthat during the first two quarters of the investigation periodapparent consumptionwas1,4million tonneshigherthaninthecorrespondingquartersof1997.Thiscomparisonshouldbeseen
inthelightofthefactthat1,3millionofdumpedhot-rolledcoils
were imported from the countries concerned in the first twoquarters of the investigation period whereas the correspondingvolume imported in the same period in 1997 was about 0,3million tonnes. This represents an increase of 1 million tonnesduringthefirsthalfoftheinvestigationperiod.
(201)Furthermore, it is recalled that traders significantly increasedtheir stocks in the first half of the investigation period, thusparticipating to the oversupply of the Community market. Theinvestigation revealed that the Community industry is not very
active inthetraders saleschannel whereasthe exporting produ-
cers sold significant quantities via traders. Accordingly, theCommunity industry did not feed the stocks piled by tradersduringtheinvestigationperiod.
(202)In conclusion, the investigation has shown that the increase indumped imports was considerable (in terms of market shareimportsmorethandoubled)duringtheinvestigationperiodwhileitwasfoundthattheCommunityindustrylostsalesandexperi-enced a drop in production resulting in a fall in market share.Accordingly, the increase in low-priced-dumped imports largely
contributedtotheoversupply.
c)Imports of hot-rolled coils from other third countries
(203)In addition to the countries concerned by the present investiga-
tion,othercountriesexportedhot-rolledcoilstotheCommunitymarket.DuringtheinvestigationperiodthemainexporterswereRussia, Slovakia, Romania, Hungary, South Korea and Indo-nesia.2000S0283—EN—23.05.2002—003.001—31
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(204)Some exporting producers argued that they have been unduly
discriminated against in comparison to some other third coun-
tries mentioned above which were excluded from the scope oftheinvestigation.
(205)In this respect it is pointed out that no complaint against theabove third countries was lodged and that therefore no prima
facieevidence ofdumpingandinjuryjustifyingtheinitiation of
an antidumping investigation was received. As furthermore, theinvestigation has not brought to light any evidence of injuriousdumping practices by such third country exports the allegationofdiscriminationisnotfounded.
(206)Duringtheperiodexamined,otherthirdcountries'shareoftotalimports of the product concerned onto the Community marketwhile remaining significant showed a decreasing trend. Theimport volume decreased from 3,1 million tonnes in 1995 to2,6milliontonnesintheinvestigationperiod,namelyadecrease
by17 % in terms of volume. The share of these imports repre-
sented 83 % of total import volume in 1995 but only 55 %during the investigation period. Accordingly, throughout theperiod examined, the share of the Community market held bytheotherthirdcountriesdecreasedby22%.
(207)Import prices from other third countries followed the generaldownwardtendencyintheCommunitymarketanddecreasedby9%.
(208)Based on the above facts and considerations it was found thatimports from other third countries remained significant and
enjoyed a continued presence in the Community market during
the period examined. However, it also emerged that while thesituation of the Community industry only deteriorated in parti-cular from1997 to the investigation period, nam ely when theimports concerned surged massively, the increase in importsfromotherthirdcountrieswasverylimited.
(209)Accordingly, the suggestion by some exporting producers thattheimportsofhot-rolledcoilsfromotherthirdcountriesarethecause of the injury suffered by the Community industry cannotbetakenintoconsideration.
d)Other producers in the Community
(210)Duringtheinvestigationperiod,theproducersintheCommunity
notincluded inthe definition of the Community industryrepre-
sented35%oftotalCommunityproduction.
(211)Basedontheinformationavailable,duringtheperiodexamined,
theeconomicsituationoftheotherproducersofhot-rolledcoilsin the Community was similar to that of the Community
industry. During the investigation period their sales volume
increased by 5 %, namely an increase below the increase inconsumption.Accordingly,theirshareofthemarketintermsofvolume decreased by 4 %. Furthermore, these producers alsosuffered fromprice depression as the decrease in sale value by6 % indicates and their sales prices were in line with those of
theCommunityindustry.
(212)Consequently,theimpactoftheotherproducersintheCommu-
nity on the deteriorating economic situation of the Communityindustrywaslimited.
e)Export activity of the Community industry
(213)Certain exporting producers claimed that the situation of the
Community industry deteriorated because of the decrease in its
exportactivityduringtheperiodexamined.
(214)The investigation showed that the sales volume destined for
exports to third countries decreased by 536000 tonnes between1995 and the investigation period and by 299000 tonnesbetween 1997 and the investigation period. This represents a2000S0283—EN—23.05.2002—003.001—32
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decreaseof4,8%and2,9%respectivelyofthetotalsalesofthe
Community industry. On this basis, the Commission does notexclude that such a decrease in the export sales affected the
overalleconomicsituationoftheCommunityindustry.However,
it is recalled that the present investigation exclusively coveredthe economic situation of the Community industry as regardsthe Community free market. Consequently, the injury sufferedbythe Community industry hasbeen demonstrated onthe basis
of Community market indicators. Accordingly, prices and
revenues fromexport sales were irrelevant and thereforeexcludedfromtheinjuryanalysis.
f)Community industry's preference to supply captive market
(215)AnumberofusersoftheproductconcernedontheCommunity
market stated that the Community industry had attempted toincrease the integration of its activities over the period exam-ined. At the end of 1997, the Community industry hadallegedly given priority to supplying related parties in the
captive market before supplying independent parties onthe free
market withtheresult that theuserswereforced toobtain theirsupplies from outside the Community. Therefore, injury couldnotbecausedbythedevelopmentofimports.
(216)TheCommissionfoundthatbetween 1997andtheinvestigationperiod the evolution of sales volume to both related and unre-
lated customers showed decreasing trends. The fact that the
supply to the captive market followed a similar trend indicatesthat production capacity was available. This decline in salesvolume indicated that there was no shortage of supply of theproduct concerned, which could have led to a decrease in the
salesvolumetounrelatedparties.
g)World-wide situation in the steel business
(217)Several exporting producers claimed that the situation of the
Community industry, in particular in the second part of the
investigation period, was largely due to the deterioration of the
worldwidesituationofthesteelbusiness.
(218)Basedontheinformation available itemerged thataworldwidedownturn occurred during the investigation period. Sales pricesdecreasedintheUSA,JapanandSouthKorea.However,itwas
foundthat sales prices in these countries were 15%,24% and
7%respectively,higherthanthoseintheCommunityattheendoftheinvestigationperiod.
(219)Consequentlytheworldwidesituationofthesteelindustryandinparticular the situation in Southeast Asia, cannot explain thedeterioration of the economic situation of the Community
industryduringtheperiodexamined.
4.Conclusiononcausation
(220)The above analysis indicates that factors other than dumped
imports from the countries concerned may have contributed to
thedifficultstateoftheCommunity industryduringtheinvesti-gation period. However, the investigation has shown that thesuddenincreaseinimports,thepricedepressionandpriceunder-cutting practised by the exporting producers had significantlynegative consequences on the situation of the Community
industry. Therefore, it is concluded that these imports, taken in
isolation,hadcausedmaterialinjurytotheCommunityindustry.
G.COMMUNITYINTEREST
1.Preliminaryremarks
(221)The purpose of anti-dumping measures is to remedy unfair
trading practices having an injurious effect on the Communityindustry and re-establish a situation of effective competition on2000S0283—EN—23.05.2002—003.001—33
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the Community market. In addition to dumping, injury and the
cause of this injury, the Commission examined whether anycompelling reasons existed which could lead to the conclusion
that it is not in the Community interest to impose measures.
For this purpose, and in accordance with Article 21(1) of theBasic Decision, the impact of possible measures on all partiesinvolved in this proceeding and the consequences of taking ornot taking measures, were considered on the basis of the
evidenceavailable.
2.InterestoftheCommunityindustry
(222)In case of injurious dumping caused by low-priced dumped
imports,the interest ofa Community industryisthat conditions
ofeffectivecompetitionarerestored.
(223)TheinvestigationhasshownthattheCommunitymarketofhot-
rolledcoilswascharacterised bythepresenceofproductsorigi-
nating in the countries concerned which were sold at prices
undercutting those of the Community industry. The resultinginjurious situation could be contained as long as the volumeimported was limited. However, the high volume of dumpedimports,whichsuddenlyfloodedontheCommunitymarketinavery short time during the investigation period, caused a price
depression,whichhadasignificantimpactonthefinancialsitua-
tion of the Community industry. This situation leaves theCommunity industry in a seriously weakened position and thisindustryhasaninterestinitbeingcorrected.
(224)Duringtheperiodexamined,theCommunityindustry,aswellasother producers located in the Community, undertook importantrationalisationandrestructuringprojectsthatarestillgoingonatpresent.Therealisationoftheseprojectsisimportantinviewof
the globalisation of the steel market. This activity of the
Communityindustryataworldwideleveldemonstratesitsadapt-ability,itscompetitivenessandviability.
(225)With anti-dumping measures in force, employment, whichincreased during the period examined, could be maintained andpossibly increased, depending on the evolution of consumption.TheresultsoftheinvestigationhaveshownthattheCommunityindustry lost significant sales volume and saw its pricesdecrease, in particular towards the end of the investigation
period. The proposed anti-dumping duties, which amount to
around 8 % for cooperating exporting producers on a weightedaverage level, should allow the Community industry to recoverfromits injurious situation by either increasing its own pricesand/orsalesquantities.
(226)Inviewoftheinadequateprofitabilityin1996and1997andthematerial injury suffered during the investigation period, it ishighly probable that the financial situation of the Community
industry will deteriorate further in the absence of any measures
tocorrectthenegativeeffectsofdumpedimports.Thismayulti-matelyleadtocutsinproductionorclosuresofcertainfacilitiesandthereforethreatenemploymentintheCommunity.
3.Interestofusersandrelated activities intheCommunity
(227)Inorder toevaluate theimpact onusersoftaking ornottaking
measures, the Commission sent questionnaires to the knownusers on the Community market. An on-the-spot investigationtookplaceatthepremisesofamajoruserinordertoverifytheinformation submitted. The following conclusions are based on
theresponsesreceivedfromusers.
(228)Users were found to have themselves imported 40 % of total
imports of hot-rolled coils from the countries concerned. They
employ4000peopleintheCommunity.
(229)Users claimed that in the event of the imposition of measures,
they would no longer have a choice in their sources of supply2000S0283—EN—23.05.2002—003.001—34
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and they feared that they would become entirely dependent on
the goodwill of the Community producers. In particular it wasclaimed that these producers had to supply a large captive
market and that they already held a share of 75 % of the
Community free market. They recalled that these producers'salesonthecaptivemarketaswellasalargeshareoftheirsaleson the free market was destined for related companies, whosedownstreamproducts were in direct com petition with their own
products. The users in question also indicated that the Commu-
nity industry supplied independent users only after therequirementsoftheirrelatedcompanieshadbeenfullysatisfied.They also claimed that the related user companies alreadybought the product concerned below the market price. Underthesecircumstances,theuserswereoftheopinionthattheimpo-
sition of anti-dumping measures would give the Community
industrya decisive andunjustified competitive advantage inthedownstreamm arkets which would not be in the interest of theCommunity.
(230)Finally,theseusersclaimed thattheimpositionofanti-dumpingduties was likely to cause shortage of supply for independentbuyers,aswasthe caseintheCommunity market attheendof1997. This situation would clearly be an infringement to theECSCTreaty.
(231)It is to be noted that the purpose of the imposition of anti-dumping measures is not to prevent users from importing hot-rolled coils fromthe countries concerned, rather to ensure thatthese imports are made at non-injurious prices. Even with the
impositionofanti-dumpingmeasures,theseproductswillalways
be present in the Community market and will ensure that thechoiceofsupplyismaintainedforuserscompanies.
(232)The Commission estimated that a weighted average anti-dumping duty of 8 % on hot-rolled coils imported from thecountries concerned may prompt at maximum an increase ofaround 1.6 % in the overall cost of the user companies' rawmaterials. This extra cost would cause an estimated increase inthe full cost of production of about 1.1 %, given the mix of
varioussourcesofpurchasesandtheaveragevalueaddedinthe
downstreamproducts.
(233)This estimated extra cost of production incurred by the usercompanies, either charged or not to the subsequent purchasers,
isnotsuchastoendangertheprofitabilityoftheuserindustries.
Moreover,thiscostshouldbeseeninthelightofexpectedposi-tivedevelopmentsinthehot-rolledcoilsmarketswhengovernedbyeffectivetradeconditions.
(234)Concerning the level of sales price in the free market, it isrecalled that no significant differences were found between theprices applied by the Community industry to related and unre-lated customers. Moreover, the claim purporting that theCommunity industry did not supply or had set up priorities for
its supplies of hot-rolled coils depending on the relationship
with the purchaser during the period examined cannot be takenintoconsideration asnoevidence inthisrespect hasbeenmadeavailable. More to the contrary, it has been found that certainsales contracts concluded with the Community industry were
cancelled.
(235)Basedontheforegoing,itisconsideredthatanynegativeeffects
onusersfromtakingmeasuresagainstdumpedimportsfromthecountries concerned cannot outweigh the positive effects from
which all the other operators active on the Community market
willbenefit.
4.Consequencesoncompetition intheCommunitymarket
(236)Someparties claimed that anti-dumping measures wouldreduce
competitionontheCommunitymarket,encouragingthecreationof big steel groups. They argued that in the recent past major2000S0283—EN—23.05.2002—003.001—35
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steelcompanies, suchasBritish Steel andSollac, hadincreased
insizebymergingwithorbypurchasingothersteelcompanies.Thesegroupsarealsoincompetitioninthedownstreamproducts
with independent users, mostly small and medium size enter-
prises. The consequences of such a concentration may be thedisappearanceofmanyindependentusersresultinginthereduc-tionofemploymentintheCommunity.
(237)Concerning the alleged restriction in competition, it is recalledthatthereareanumberofalternative sourcesofsupplysuchasRussia, Indonesia, Hungary, Romania, South Korea, Slovakia,Brazil, etc, exporting hot-rolled coils to the Community. Thereare alsoseveral hundredSSC's,stockholders anddealers selling
the product concerned mainly to small and medium size users.
Finally,thereareseveralCommunitysteelproducers,inadditionto the Community industry, located in Finland, France, AustriaandGreece.
(238)Furthermore,giventhatthelevelofthemeasuresproposedisnotsuch,fromaneconomicpointofview,toforeclosetheCommu-nity market to the countries concerned there appears to be noriskofrestrictingcompetitionintheCommunitymarket.
5.ShortageofsupplyontheCommunitymarket
(239)Certain exporting producers fromthe countries concerned and
users in the Community claimed that the imposition of anti-dumping measures would cause a shortage of supply, in parti-cular for independent users industries. This claimwasbased onthefactthattheCommunityindustryaloneisnotabletosupplythewholeCommunityfreemarketinparticulargivenitscurrent
highcapacityutilisationlevels.
(240)Other interested parties claimed that the Community industry
doesnot have the capacity to supply its ownrelated companiesin the free market and, is therefore not in the position to
compensateforanydecreaseinimportscausedbytheimposition
ofanti-dumpingmeasures.
(241)In this respect it should be noted that as the producers in the
Communitycannotsupplythewholeofthefreemarket,imports
from third countries will always be needed and the Communitymarketwillalwaysbeenopentosuchimports,providedtheyaremadeinrespectoftheprovisionsoftheBasicDecision.
(242)In any event, the Community industry, other producers in theCommunity and exporting producers in other third countrieswill be able to continue to supply the Community market. Theexportingproducersinthecountriesconcernedwillalsobeableto continue to supply the Community market given that themeasuresproposedarenotsuchastoclosethemarkettothem.
(243)Based on the above facts and considerations, the claimthat theimposition of anti-dumping measures will entail a shortage ofsupplyisnotconsideredtobefounded.
6.ConclusionontheCommunityinterest
(244)The Commission considers that the imposition of anti-dumping
duties is necessary to prevent further imports of low-priceddumped imports and avoid the situation of the Communityindustry to deteriorate further. Moreover, the imposition ofmeasuresinthepresentcasewillre-establisheffective competi-
tiveconditionsforalloperatorsintheCommunity.Furthermore,
having examined the various interests involved in the presentproceeding, no compelling reasons were found to exist againsttheimpositionofdefinitiveanti-dumpingmeasures.Theimposi-tionofdefinitiveanti-dumpingmeasuresisthereforenotagainsttheCommunityinterest.2000S0283—EN—23.05.2002—003.001—36
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H.DEFINITIVEMEASURES
(245)Having established that the dumped imports originating in
Bulgaria, India, South Africa, Taiwan and Yugoslavia have
causedmaterialinjurytotheCommunityindustryandthatthere
are no compelling reasons not to take action, definitive anti-dumpingmeasuresshouldbeadopted.
1.Injuryeliminationlevel
(246)Forestablishingthelevelofduty,accounthasbeentakenofthe
dumpingmarginsfoundandoftheamountofthedutynecessary
to eliminate the injury caused by dumped imports to theCommunity industry. The necessary price increase was deter-mined on the basis of a comparison of the weighted averageimport price, as established for the undercutting calculations,
with the non-injurious price of the different types of hot-rolled
coilssoldbytheCommunityindustryontheCommunitymarket.
(247)It was considered that the amount of duty necessary to removethe effects of injurious dumping should allow the Communityindustrytocoveritscostsofproductionandobtainareasonableprofit on sales. In this respect, it was considered that the profit
margin before tax of 12,9 % on turnover claimed by the
Community industry was an appropriate basis, regard beinggiven to the need for long-terminvestm ents and for a rate ofreturn, which the Community industry could reasonably expectintheabsenceofinjuriousdumping.
(248)AccordinglyandgiventheprofitraterealisedbytheCommunity
industryduringtheinvestigationperiod,injuryeliminationlevels
were determined on a type by type basis as the differencebetween the actual net sales price of the Community industryand the actual net sales price of the comparable importedmodels. The difference was then expressed as a percentage ofthe CIF import price at the Community frontier customs duty
unpaid.
2.Level ofdefinitiveduties
(249)In the light of the foregoing, it is considered that a definitive
anti-dumping duty should be imposed at the level of the
dumpingmarginfound,butshouldnotbehigherthantheinjury
margin set out above in accordance with Article 9(4) of theBasicDecision.
(250)Asfar as the parallel anti-subsidy proceeding regarding importsfromIndia, South Africa and Taiwan is concerned it should benoted that, in accordance with Article 12(
1) of Commission
DecisionNo1889/98/ECSC,thecountervailing dutyrateshould
correspond to the subsidy margin unless the injury margin islower.
(251)InaccordancewithArticle24(1)oftheaboveDecisionNo1889/98/ECSC and Article 14(1) of the Basic Decision, no productshall be subject to both antidumping and countervailing duties
for the purposes of dealing with one and the same situation
arising fromdum ping or fromexport subsidisation. As anti-dumping duties should be imposed on imports of the productconcerned it is necessary to determine whether, and to whatextent, the subsidy and the dumping margin arise from thesamesituation.
(252)In the case in question all of the schemes investigated in Indiahave been found to constitute export subsidies within themeaning of Article 3(4)(a) of the above Decision No 1889/98/ECSC.Assuch,thesubsidiescanaffecttheexportpricesoftheIndianexportingproducers,thusleadingtoincreasedmarginsofdumping. In other words, the dumping margins established are2000S0283—EN—23.05.2002—003.001—37
(1) OJL245,4.9.1998,p.3.
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wholly or partly due to the existence of export subsidies. In
these circumstances it is not considered appropriate to imposeboth countervailing and anti-dumping duties to the full extent
oftherelevantsubsidyanddumpingmarginsestablished.There-
fore, in the case of India, the anti-dumping duties need to beadjusted to reflect the actual dumping margins remaining afterthe imposition of the countervailing duties offsetting the effectoftheexportsubsidies.
(253)InthecaseofTaiwan,theschemesinvestigateddonotconstituteexport subsidies. Accordingly, duties may be imposed at theratesofthefull amountofdumpingandsubsidymarginsestab-lished,subjecttotheinjurymarginsnotbeingexceeded.
(254)In the case of South Africa, as the level of subsidisation wasfoundtobe de minimis,nocountervailing dutiesareimposedat
thepresentstage.Inthesecircumstances,anti-dumpingdutiesat
the full rate of the injury margins are imposed given that these
arelowerthanthedumpingmargins.
(255)The rates of duty applicable to the free-at-Community-frontierprice, before duty and taking into account the results of the
anti-subsidyproceeding,shallbe:
Country/CompanyDumping
margin%Injury
margin%Export
subsidy
margin%Proposed
counter-
vailingduty
%ADdutyto
beimposed
%
Bulgaria 27,1 7,5 7,5
Kremikovtzi 27,1 7,5 7,5
India 56,3 23,8 13,1 13,1 10,7
Essar 55,8 6,4 4,9 4,9 1,5
SAIL 56,3 23,8 12,3 12,3 11,5TISCO 29,4 6,4 8,7 6,4 0SouthAfrica 47,8 38,3 0 0 37,8Iscor 47,8 5,2 0 0 5,2
Highveld&Vana-
dium37,8 38,3 0 0 37,8
Taiwan 30,3 29,3 0 4,4 24,9CSC 7,1 8,9 0 4,4 2,7
YiehLoong 2,1 3,9 0 0 2,1
Yugoslavia 56,1 15,4 15,4Sartid 56,1 15,4 15,4
(256)Theindividualcompanyanti-dumpingdutyratesspecifiedinthis
Decision were established on the basis of the findings of thepresent investigation. Therefore, they reflect the situation found
during that investigation with respect to the above companies.
Thesedutyrates(asopposedtothecountry-widedutyapplicableto ‘all other companies’) are thus exclusively applicable toimports of products originating in the country concerned andproducedbythecompaniesandthusbythespecificlegalentities
mentioned. Imported products produced by any other company
not specifically mentioned in the operative part of this Regula-tion with its name and address, including entities related tothose specifically mentioned, cannot benefit from these ratesand shall be subject to the duty rate applicable to ‘all othercompanies’.2000S0283—EN—23.05.2002—003.001—38
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(257)Any claimrequesting the application of these individual
company anti-dumping duty rates (e.g. following a change in
thenameoftheentityorfollowingthesettingupofnewproduc-tionorsalesentities)shouldbeaddressedtotheCommission(
1)
forthwithwithallrelevantinformation,inparticularanymodifi-cationinthecompany'sactivitieslinkedtoproduction,domesticand export sales associated with e.g. that name change or that
changeintheproduction andsalesentities. TheCommission, if
appropriate, will, after consultation of the Advisory Committee,amend the Decision accordingly by updating the list of compa-niesbenefitingfromindividualdutyrates.
3.Undertakings
(258)Exporting producers in Bulgaria, India, South Africa have
offered a price undertaking in accordance with Article 8(1) oftheBasicDecision.
(259)One exporting producer in Yugoslavia expressed its willingness
to give a price undertaking. However, in view of a number of
problems relating to the product code number and the fact thatamajorityofsalestotheEuropeanUnionweremadeviarelatedcompanies, it was considered that the Commission would beunabletomonitortheundertakingproperly.Theexporter‘sofferwas therefore rejected and the company was informed accord-
ingly,inaccordancewithArticle8(3)oftheBasicDecision.
(260)The Commission considers that the undertaking offered by the
exporting producers in Bulgaria, in India, and in South Africacanbeaccepted.Theacceptanceofthepriceundertakingshould
beconditionalonthepresentationtotheMemberStates'customs
services of a valid undertaking invoice clearly identifying theproducer and containing the information listed in the Annex.Where no such invoice is presented, the appropriate rate ofanti-dumpingdutywillbepayable.
(261)Itshouldbenotedthatintheeventofabreachorwithdrawaloftheundertakingananti-dumpingdutymaybeimposed,pursuanttoArticles8(9)and10oftheBasicDecision.
I.TERMINATIONOFTHEPROCEEDING
(262)In view of the findings on the level of imports originating in
Iran,theproceedingwithrespecttothiscountryshouldbetermi-nated,
HASADOPTEDTHISDECISION:
Article 1
1. A definitive anti-dumping duty is hereby imposed on imports of
certain flat rolled products of iron or non-alloy steel, of a width of600 mm or more, not clad, plated or coated, in coils, not furtherworked than hot-rolled originating in Bulgaria, India, South Africa,
TaiwanortheFederalRepublicofYugoslaviafallingwithinCNcodes
72081000, 72082500, 72082600, 72082700, 72083600,72083710, 72083790, 72083810, 72083890, 72083910,72083990.
2. The rates of duty for products manufactured by the companies
listed in the table below applicable to the free-at-Community-frontierprice,beforeduty,shallbe:
Country CompanyRateofADduty
(%)TARICadditional
code
Bulgaria Allcompanies 7,5 A9992000S0283—EN—23.05.2002—003.001—39
(1) EuropeanCommissionDirectorate-General TradeDirectorateCDM24-8/
38RuedelaLoi/Wetstraat200B-1049Brussels/Belgium
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Country CompanyRateofADduty
(%)TARICadditional
code
India Essar Steel Ltd, 27th KM, Surat
Hazira Road, Hazira 394 270,
Dist:Surat,State:Gujarat1,5 A076
The Steel Authority of India
Limited,CentralMarketingOrgani-
sation, Transport & Shipping
Department, Ispat Bhawan 40,
Jawaharlal Nehru Road, Calcutta
70007111,5 A077
Tata Iron & Steel Company
Limited, 43 Chowringhee Road,
Calcutta7000710 A078
Ispat Industries Ltd, ‘Park Plaza’,
71ParkStreet,Calcutta70001614 A204
JindalVijayanagarSteelLtd,Jindal
Mansion,5-A.G.DeshmukhMarg,
Mumbai40002618,1 A270
Allothercompanies 10,7 A999
SouthAfrica IscorLimited,RogerDyasonRoad,
Pretoria West, and Saldanha Steel
(Pty) Ltd, Private Bag X11,
Saldanha73955,2 A079
Allothercompanies 37,8 A999
Taiwan China Steel Corp., 1 Chung Kang
Road, Hsiao Kang, Kaohsiung
81233►M12,7◄A080
►C1
Yieh Loong Enterprise Co.,
Ltd,◄317 Yu Liao Road, Chiao
TouHsiang,KaohsiungHsien2,1 A081
Allothercompanies 24,9 A999
Federal Republic of
YugoslaviaAllcompanies 15,4 —
3. Notwithstanding paragraph 1, the definitive duty shall not apply
to imports realised for free circulation in accordance with the provi-
sionsofArticle2.
4. Unless otherwise specified, the provisions in force concerning
customsdutiesshallapply.
Article 2
1. The undertakings offered in connection with this anti-dumping
proceedingby
Company Country TARICadditionalcode
KremikovtziCorporation,1870Sofia,Botunetz Bulgaria A082
Essar Steel Ltd, 27th KM, Surat Hazira Road,
Hazira394270 ,Dist:Surat,State:GujaratIndia A083
►M1The Steel Authority of India Limited,
CentralMarketingOrganisation,Transport&
ShippingDepartment,IspatBhawan40,Jawa-
harlalNehruRoad,Calcutta—700071 ◄India A0842000S0283—EN—23.05.2002—003.001—40
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Company Country TARICadditionalcode
IspatIndustriesLtd,‘ParkPlaza’,71ParkStreet,
Calcutta700016India A204
Highveld Steel & VanadiumCorporation
Limited,
POBox111,Witbank1035SouthAfrica A085
areherebyaccepted.
2. Imports pursuant to these undertakings, when released for free
circulation, shall be exempted from the anti-dumping duty set inArticle 1(2) when they are manufactured and directly exported andinvoiced to an importing company in the Community by a companylisted in the table of paragraph 1 and declared under the appropriateTARICadditionalcode.
The exemption shall be conditional upon presentation to the relevant
Member State's customs services of a valid ►
M3Commercial
Invoice◄issued by the exporting company containing the essential
elementslistedintheAnnex.
Article 3
PursuanttoArticle14(6)ofDecision(EC)No2277/96/ECSC,Member
States' reports to the Commission shall indicate for each release forfree circulation, the year and month of import, the CN code, TaricandTaricadditional codes,thetypeofmeasure,thecountryoforigin,
the quantity, the value, the anti-dumping duty, the Member State of
import and, where appropriate, the serial number of the productioncertificate.
Article 4
The anti-dumping proceeding concerning imports of certain flat-rolled
productsofironornon-alloysteel,ofawidthof600mmormore,notclad,platedorcoated,incoils,notfurtherworkedthanhot-rolledorigi-natinginIranisherebyterminated.
Article 5
ThisDecisionshallenterintoforceonthedayfollowingitspublication
inthe Official Journal of the European Communities .
ThisDecisionshallbebindinginitsentiretyanddirectlyapplicablein
allMemberStates.2000S0283—EN—23.05.2002—003.001—41
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ANNEX
Information necessary for commercial invoices accompanying sales made
subjecttotheundertaking(Article 2(2))
1. The heading ‘COMMERCIAL INVOICE ACCOMPANYING GOODS
SUBJECTTOANUNDERTAKING’.
2. Thenameofthecompanyissuingthecommercialinvoice.
3. Thecommercialinvoicenumber.4. Thedateofissueofthecommercialinvoice.
5. TheTARICadditionalcodeunderwhichthegoodsontheinvoicearetobe
customs-clearedattheCommunityfrontier(asspecifiedintheDecision).
6. Theexactdescriptionofthegoods,including:
— thecompanyproductcodenumber(CPC)(ifapplicable),
— theproductcodenumber(PCN)(asestablishedintheundertakingoffered
bytheproducingexporterinquestion),
— thetechnicalspecificationofthePCN,— CNcode,— quantity(tobegivenintonnes).
7. Thedescriptionofthetermsofthesale,including:
— pricepertonne,
— theapplicablepaymentterms,— theapplicabledeliveryterms,— totaldiscountsandrebates.
8. Nameofthefirstbuyeractingasanimportertowhichtheinvoiceisissued
directlybythecompany.
9. The name of the official of the company that has issued the commercial
invoiceandthefollowingsigneddeclaration:
‘I, the undersigned, certify that the sale for direct export to the European
Community of the goods covered by this invoice is being made within the
scope and under the terms of the undertaking offered by … (name of
company), and accepted by the European Commission through Decision No
841/2002/ECSC. I declare that the information provided in this invoice is
completeandcorrect.’2000S0283—EN—23.05.2002—003.001—42