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COMMISSION DECISION No 708/89/ECSC

of 17 March 1989

imposing a provisional anti-dumping duty on imports of certain flat-rolled products of iron or non-alloy steel, cold-rolled, originating in Yugoslavia

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Coal and Steel Community,

Having regard to Commission Decision No 2424/88/ECSC of 29 July 1988 on protection against dumped or subsidized imports from countries not members of the European Coal and Steel Community (1), as rectified (2), and in particular Article 11 thereof,

After consultations within the Advisory Committee as provided for by the above Decision,

Whereas:

A. PROCEDURE

(1) In March 1988 the Commission received a complaint lodged by the European Confederation of Iron and Steel Industries (Eurofer) on behalf of producers whose collective output constitutes the majority of Community production of the product in question. The complaint contained evidence of dumping and of material injury resulting therefrom, which was considered sufficient to justify the initiation of a proceeding. The Commission accordingly announced, by a notice published in the Official Journal of the European Communities (1) the initiation of an anti-dumping proceeding concerning imports into the Community of flat-rolled products of iron onon-alloy steel (excluding 'electrical steels') of a width of 600 mm or more, cold-rolled, not clad, plated or coated, falling within CN codes 7209 11 00, 7209 12 90, 7209 13 90, 7209 14 90, 7209 21 00, 7209 22 90, 7209 23 90, 7209 24 91, 7209 24 99, 7209 31 00, 7209 32 90, 7209 33 90, 7209 34 90, 7209 41 00, 7209 42 90, 7209 43 90, 7209 44 90, 7209 90 10 and 7209 90 90, and originating investigation.

(2) The Commission officially so advised the exporters and importers known to be concerned, the representatives of the exporting country and the complainants and gave the parties directly concerned the opportunity to make known their views in writing and to request a hearing.

(3) The majority of the Yugoslav producers/exporters and some importers known to the Commission made their views known in writing. One of the importers requested a hearing which was granted.

(4) No submissions were made by or on behalf of Community purchasers or processors of the cold-rolled flat products of iron or steel concerned.

(5) The Commission sought and verified all information it deemed to the necessary for the purpose of a preliminary determination and carried out investigations at the premises of the following companies:

EEC producers:

- Stahlwerke Peine-Salzgitter AG, Salzgitter, Federal Republic of Germany,

- Cockerill Sambre SA, Seraing, Belgium,

- Italsider SpA, Genoa, Italy,

- Hoogovens Groep BV, Ijmuiden, Netherlands,

- British Steel plc, London, United Kingdom.

EEC importers:

- Sam Industriestoffhandelsgesellschaft mbH, Werne, Federal Republic of Germany,

- Intersteel and Metals srl., Milan, Italy.

(6) The Commission requested and received detailed written submissions from complainant Community producers and some importers and verified the information therein to the extent considered necessary.

(7) The Commission also sent questionnaires to the Yugoslav producers known to be concerned in order to obtain the necessary information and granted ample extension of the time-limit laid down for the reply. However, the Yugoslav producers submitted incomplete information and refused in particular to disclose details of quantities and prices with regard to their domestic market and certain export transactions. Under these circumstances the Commission concluded that on the spot verification was not warranted and decided to base its preliminary determinations on the available evidence.

(8) The investigation of dumping covered the period from 1 January 1987 to 30 June 1988.

B. DUMPING

(a) Normal value

(9) As the Yugoslav producers refused to submit information with regard to sales of cold-rolled flat products of iron or steel on the domestic market, the Commission provisionally established normal values on the basis of the published basis prices (1) as they applied during the investigation period, referred to in the Exchange of Letters which appears in the Final Act of the Agreement between the Member States of the European Coal and Steel Community and the European Coal and Steel Community, of the one part, and the Socialist Federal Republic of Yugoslavia, of the other part - 83/42/ECSC (2).

(b) Export prices

(10) As the Yugoslav producer falled to submit detailed information on its export transactions permitting to determine the export prices to the Community for the products in question, the Commission based its preliminary determination on the available evidence.

For this purpose the Commission used information from import licence applications transmitted to the Commission by the competent national authorities, in particular the purchase prices declared by applicant importers. As far as possible the Commission verified this information at the premises of those importers which were ready to cooperate.

(c) Comparison

(11) In comparing normal value, i.e., basis prices less cusltoms duty, with export prices the Commission took account, where appropriate and to the extent of the evidence available, of differences in conditions and terms of sale such as transport, insurance, forwarding and handling costs.

(12) Since the basis prices are calculated cif Comunity frontier, all comparisions were made at the level cif Community frontier, duty unpaid.

(d) Dumping margins

(13) Export prices as established using the method described in recital 10 were compared with the corresponding normal value derived from the published basis prices transaction by transaction, the margins of dumping being equal to the amount by which the normal value as established exceeds the prices for export to the Community.

(14) The above preliminary examination of the facts shows the existence of dumping, the weighted average margin being 15,4 %.

C. INJURY

(15) With regard to injury caused by the dumped imports the evidence available to the Commission shows that imports from Yugoslavia increased from 10 115 tonnes in 1985 to 114 372 tonnes in 1987 and 80 777 tonnes in the first six months of 1988. Their corresponding market share climbed from 0,4 % in 1985 to 4,2 % in 1987 and 5,6 % in the first half of 1988. The most affected Member States were Italy and the United Kingdom. The market share of the imports concerned shot up from 0,7 % in 1985 to 14,8 % in the second half of 1987 in Italy, and from zero in 1985 to 12,5 % in the first half of 1988 in the United Kingdom.

(16) The evidence available to the Commission also indicates that the prices at which the dumped imports form Yugoslavia were sold in the Community undercut the prices of Community producers during the investigation period to a varying degree between 7 % and 25 %. Price undercutting was established by the Commission on the basis of price alignments to offers made for imports of cold-rolled flats originating in Yugoslavia notified to the Commission by Community producers.

The Commission has received notifications of price alignments against offers of the Yugoslav product in the investigation period for a total quantity of about 290 000 tonnes exceeding substantially the volume of dumped imports. This evidence shows that in addition to the injury caused by direct loss of sales through the volume increase of dumped imports from Yugoslavia considerable damage was generated by undercutting the prices of Community producers. The defensive price alignments to low priced offers of the dumped products caused a loss of revenue to Community producers which can be estimated at a minimum of ECU 21,5 million. On the basis the Commission has determined the weighted average margin of price undercutting provisionally at 14,75 % during the investigation period.

(17) The information available to the Commission also reveals that sales by Community producers of cold-rolled flats, measured by deliveries to merchants on the Community market which are in direct competition to the imports from Yugoslavia concerned, declined by 8,5 % between 1984, when

imports from Yugoslavia stood at a market share of 0,4 % and 1987, when the Yugoslav market share had reached 4,2 %. The Commission also considered that over the same period consumption of cold-rolled flats on the free market in the Community had increased by 5,5 %.

(18) The consequent impact on the Community industry was a loss of sales and a decline of their market share combined with a substantial loss of revenues. The dumped imports from Yugoslavia also prevented the Community industry, just emerging from a crisis situation, to benefit in full from the recovery of demand for cold-rolled flats and to obtain the necessary improvement of their profitability.

(19) The Commission has also considered whether injury has been caused by other factors such as a decline in Community consumption and imports from other third countries not alleged to be dumping. It was provisionally established that imports from other third countries have also moderately progressed during the investigation period. However, due to the stronger increase in Community consumption their market share fell by 1,5 percentage points while the Yugoslav share increased by 3,7 percentage points in the same period.

The evidence available to the Commission shows in addition that more than 90 % of the imports from other third countries have been originating in countries with which the Commission has concluded voluntary steel arrangements. The Commission is therefore satisfied that these imports, because of the quantitative limitation, the decline in their market share and the obligations of these countries to respect the Community price rules cannot be considered as factor that may have caused material injury to the Community industry.

(20) The substantial increase in dumped imports and the prices at which they are offered for sale in the Community led the Commission to determine that, provisionally, the effect of the dumped imports of certain cold-rolled flat products of iron or steel originating in Yugoslavia taken in isolation has to be considered as constituting material injury to the Community industry concerned.

D. COMMUNITY INTEREST

(21) The Commission had to take into account that the Community steel industry is faced with the necessity to continue its restructuring efforts and that the return to normal market conditions following the gradual lifting of the crisis regime introduced by the Commission can only be achieved if fair trading conditions are established in the market.

In this context imports of significant quantities of dumped products into the Community also put into question the objectives sought by the external measures adopted within the framework of the Community steel policy; third countries which have concluded steel trade arrangements with the Community will only respect and renew these arrangements if they see a reasonable chance of seiling the quantities provided for at price levels agreed.

(22) In spite of the recent recovery of the steel market, which was just sufficient to overcome the crisis situation and permitted the Commission to lift the system to production quotas, serious difficulties remain for the Community steel industry. It is further necessary to continue the restructuring efforts with a view to better adaptation of capacities to the medium-term demand prospects, to modernize equipment and to rationalize production processes. For this purpose it is a necessary condition that operations of Community producers are not prevented by foreign exporters'unfair practices from prices of Community producers are realized in the Community market. In the light of this situation and the factors referred to above the Commission has come to the conclusion that it is in the Community's interest that action be taken.

In order to prevent further injury being caused during the remainder of the proceeding this action should take the form of a provisional anti-dumping duty to be imposed on imports of certain cold-rolled flat products of iron or steel originating in Yugoslavia.

E. RATE OF DUTY

(23) Taking into account that it is necessary for the Community industry to achieve its published list prices in order to generate a sufficient flow of earnings and to keep the impact of restructuring within acceptable limits, the duty should be less than the dumping margin but sufficient to eliminate the injury found and be expressed as an amount in ecus to be paid on each tonne imported into the Community. This form of duty, seems more appropriate in the light of the specific circumstances of the market for the relevant products in order to ensure the effectiveness of the measure and to prevent evasion. On this basis the Commission determined the amount of the provisional duty necessary to eliminate the injury to be ECU 54 to be paid on each tonne imported into the Community.

(24) A period should be fixed within which the parties concerned may make their views known and request a hearing,

HAS ADOPTED THIS DECISION:

Article 1

1. A provisional anti-dumping duty is hereby imposed on imports of flat-rolled products of iron or non-alloy steel (excluding 'electrical steels') of a width of 600 mm or more, cold-rolled, not clad, plated or coated, corresponding to CN codes 7209 11 00, 7209 12 90, 7209 13 90, 7209 14 90, 7209 21 00, 7209 22 90, 7209 23 90, 7209 24 91, 7209 24 99, 7209 31 00, 7209 32 90, 7209 33 90, 7209 34 90, 7209 41 00, 7209 42 90, 7209 43 90, 7209 44 90, 7209 90 10 and 7209 90 90, originating in Yugoslavia.

2. The amount of the duty shall be ECU 54 per 1 000 kilograms.

3. The provisions in force concerning customs duties shall apply.

4. The release for free circulation in the Community of the products referred to in paragraph 1 shall be subject to the provision of a security, equivalent to the amount of the provisional duty.

Article 2

Without prejudice to Article 7 (4) (b) and (c) of Decision No 2424/88/ECSC, the parties concerned may make known their views in writing and apply to be heard by the Commission within one month of the entry into force of this Decision.

Article 3

This Decision shall enter into force on the day following that of its publication in the Official Journal of the European Communities.

Subject to Articles 11, 12 and 14 of Decision No 2424/88/ECSC, it shall apply for a period of four months, unless the Commission adopts definitive measures before the expiry of that period.

This Decision shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 17 March 1989.

For the Commission

Frans ANDRIESSEN

Vice-President

(1) OJ No L 209, 2. 8. 1988, p. 18.

(2) OJ No L 273, 5. 10. 1988, p. 19.

(3) OJ No C 184, 14. 7. 1988, p. 4.

(1) OJ No C 120, 15. 5. 1985, p. 25,

OJ No C 119, 5. 5. 1987, p. 3,

OJ No C 333, 11. 12. 1987, p. 2 and

OJ No C 17, 22. 1. 1988, p. 2.

(2) OJ No L 41, 14. 2. 1983, p. 113.