Commission Regulation (EC) No 1084/98 of 28 May 1998 imposing a provisional anti-dumping duty on imports of stainless steel bars originating in India
Date: 1998-05-28
Institutions: European Commission
Subjects: India, anti-dumping duty, anti-dumping legislation, bar, import, steel

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L 155/3

COMMISSION REGULATION (EC) No 1084/98

of 28 May 1998

imposing a provisional anti-dumping duty on imports of stainless steel bars
originating in India

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(5)

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 384/96 of
22 December 1995 on protection against dumped imports
the European Com-
from countries not members of
munity (1),
(EC)
by Regulation
No 905/98 (2), and in particular Article 7 thereof,

amended

last

as

After consulting the Advisory Committee,

Whereas:

The Commission sought and verified all the infor-
mation it deemed necessary for the purpose of a
preliminary determination and carried out invest-
igations at
the following com-
panies:

the premises of

(a) Community producers

— Cogne Acciai Speciali Srl, Aosta, Italy,

— Krupp Edelstahlprofile GmbH,

Siegen,

Germany,

— Rodacciai SpA, Bosisio Parrini, Italy,

— Sprint Metal Edelstahlziehereien GmbH,

Hemer, Germany,

A. PROCEDURE

— Trafilerie Bedini Srl, Peschiera Borromeo,

(1)

(2)

(3)

In August 1997 the Commission announced by a
notice (hereafter ‘notice of initiation’) published in
the Official Journal of the European Commun-
ities (3) the initiation of an anti-dumping proceed-
ing with regard to imports into the Community of
stainless steel bars (hereafter ‘SSB’) originating in
India and commenced an investigation.

producers

The proceeding was initiated as a result of a
complaint lodged by the European Confederation
of Iron and Steel Industries (Eurofer) on behalf of
Community
a major
proportion of the Community production of SSB.
The complaint contained evidence of dumping and
of material injury resulting therefrom, which was
considered sufficient to justify the initiation of a
proceeding.

representing

exporting producers

The Commission officially advised the Community
producers,
and importers
known to be concerned, the representatives of the
exporting country and the complainant of the initi-
it gave the parties
ation of
concerned the opportunity to make their views
known in writing and to request a hearing.

the proceeding;

A number of exporting producers in India as well
as some producers, importers and suppliers in the
Community made their views known in writing.
All parties who so requested within the time limits
set
initiation were granted a
hearing.

in the notice of

(4)

The Commission sent questionnaires to all parties
known to be concerned and received replies from a
number of companies in the Community and
India.

(1) OJ L 56, 6. 3. 1996, p. 1.
(2) OJ L 128, 30. 4. 1998, p. 18.
(3) OJ C 264, 30. 8. 1997, p. 2.

Italy,

— Ugine-Savoie SA, Ugine, France.

During the verification visit to Rodacciai SpA
the company withdrew its cooperation and
consequently the information provided by this
company could not be taken into account for
the investigation.

(b) Exporting producers in India

— Bhansali

Pvt
Ferromet Pvt Ltd, Mumbai,

Brightbars

Ltd/Bhansali

— Facor (Ferro Alloys Corp. Ltd), Nagpur,

— Grand Foundry Ltd, Mumbai,

— Isibars Ltd, Mumbai,

— Mukand Ltd, Mumbai,

— Panchmahal Steel Ltd, Baroda,

— Raajratna Metal Industries Ltd. Ahmedabad,

— Venus Wire Industries Ltd, Mumbai,

— Viraj Alloys Ltd, Mumbai.

(c) Importers in the Community related to ex-

porting Indian producers

— Isibars GmbH, D(cid:129)sseldorf, Germany,

— Mukand International Ltd, London, United

Kingdom.

(d) Importers in the Community not related to

exporting Indian producers

— Thyssen

Schulte

GmbH, Dortmund,

Germany,

— Ibero Edelstahlhandel & Co KG, M(cid:129)lheim,

Germany,

— Metaalcompagnie ‘Brabant’, Valkenswaard,

Netherlands.

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(6)

(7)

(8)

(9)

(10)

(11)

In the course of the investigation, it was found that
Ibero Edelstahlhandel and Thyssen Schulte were, in
fact, related to Community producers.

After the initiation of the proceeding the Indian
producer Sindia Steels Ltd applied for newcomer
treatment in the sense of Article 11(4) of Council
Regulation (EC) No 384/96 (hereafter referred to as
‘the Basic Regulation’). The Commission then
sought and verified all information deemed neces-
sary for the purposes of a preliminary determina-
tion and carried out investigations at the premises
of this company.

The investigation of dumping covered the period
from 1 October 1996 to 30 June 1997 (hereafter
referred to as ‘the investigation period’ or ‘IP’). The
injury covered the period from
examination of
1994 to the end of the IP.

It should be recalled that on 30 October 1997 the
Commission initiated an anti-subsidy investigation
on the same originating in India (1). This investiga-
tion is still in progress.

B. PRODUCT UNDER CONSIDERATION AND

LIKE PRODUCT

1. Product under consideration

The product concerned is stainless steel bars and
rods, not further worked than cold-formed or cold-
finished, containing by weight 2,5 % or more of
nickel, of circular cross-section as well as of other
cross-sections, currently classifiable within CN
codes 7222 20 11, 7222 20 21, 7222 20 31 and
7222 20 81.

steel

Stainless
is characterised by a significant
content of nickel, chromium and in some instances
molybdenum. These alloys protect stainless steel
against corrosion. SSB are used by a variety of
industrial users, such as the automobile, building,
industries.
mechanical engineering and chemical

shape,

There exists a wide variety of types of SSB differen-
tolerance and
tiated by alloy content,
diameter. Despite the existence of these types of
SSB, they all fall under the broad definition of SSB
because
same basic physical,
the
chemical and technical characteristics and the same
uses and are distributed via the same distribution
channels. They are consequently considered as

they have

(1) OJ C 328, 30. 10. 1997, p. 16.

forming one single category of product
purposes of this investigation.

for the

2. Like product

(12)

The Commission found that SSB produced and
sold in India as well as the SSB produced and sold
in the Community were alike within the meaning
of Article 1(4) of the Basic Regulation to the SSB
exported from India to the Community because
they had the same physical, chemical and technical
characteristics and uses.

C. DUMPING

1. Normal value

(13)

In order to establish normal value, for each ex-
porting producer it was first analysed whether the
the product
its domestic sales of
volume of
concerned was representative in accordance with
Article 2(2) of the Basic Regulation, i.e. whether
these sales represented more than 5 % of the sales
volume of the product concerned exported to the
Community.

(14)

It was then examined whether its total domestic
sales of each product type constituted 5 % or more
of the sales volume of the same type exported to
the Community.

least 80 % of

For those product types meeting the 5 % repres-
it was assessed whether sufficient
entativity test,
sales had been made in the ordinary course of trade
in accordance with Article 2(4) of the Basic Regula-
tion. Where, per product type, the volume of sales
above unit cost was at
the total
domestic sales volume, normal value was es-
tablished on the basis of
the weighted average
prices actually paid for all domestic sales. Where,
per product type, the volume of profitable transac-
tions was lower than 80 %, but not less than 10 %
of the total domestic sales volume, normal value
the weighted
was established on the basis of
average prices actually paid for
the profitable
domestic sales only.

Where, per product type, the volume of domestic
sales was lower than 5 % of the volume destined
for export to the Community, or where the volume
of profitable domestic sales was less than 10 %,
domestic sales of that product type were considered
insufficient in the sense of Article 2(2) and (4) of
the Basic Regulation and were therefore dis-
regarded. In these cases, normal value was based on

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the weighted average of the prices charged by other
exporting producers in the country concerned for
representative domestic sales of the corresponding
product type made in the ordinary course of trade.

expenses

sales by other

and administrative

Where, per product type, there were no such rep-
resentative domestic
exporting
producers in the country concerned, normal value
was constructed in accordance with Article 2(3) and
(6) of the Basic Regulation, i.e. on the basis of all
costs of manufacturing incurred by the exporting
producer concerned for the exported product type
in question plus a reasonable amount for selling,
general
(hereafter
‘SG&A’) and profit. The SG&A and profit were
usually based on domestic sales of those product
types of the like product made by the producer in
question in representative quantities and in the
ordinary course of
trade. However, where the
exporting producer concerned did not sell the like
product on the domestic market in representative
quantities or in the ordinary course of trade, the
amount for SG&A and profit was established in
accordance with Article 2(6)(a) of the Basic Regula-
tion, i.e. on the basis of the weighted average of the
actual amounts determined for other exporting
producers subject to the investigation in respect of
representative domestic
the product
concerned made in the ordinary course of trade.

sales of

(15)

for those product

The manufacturing costs of one company which
did not sell the product concerned on the domestic
market were found to be unreliable. Consequently,
in accordance with Article 18 of the Basic Regula-
types for which normal
tion,
value had to be constructed, manufacturing costs
were based on the weighted average of all manufac-
turing costs incurred by other exporting producers
for
type plus a reasonable
for
amount
SG&A and profit was established in accordance
with Article 2(6)(a) of the Basic Regulation as in-
dicated above.

for SG&A and profit. The amount

the same product

2. Export price

(16) Where export sales to the Community were made
directly so unrelated importers, in accordance with
Article 2(8) of the Basic Regulation, export prices
were established on the basis of the prices actually
paid or payable by these independent customers.

(17) Where export sales were made to importers in the
Community which were related to an exporting
in accordance with the provisions of
producer,

the Basic Regulation,

Article 2(9) of
the export
prices were constructed on the basis of the prices at
which the imported products were first resold to
independent buyers. Adjustments were made for all
incurred between importation and resale,
costs
including a reasonable margin for SG&A and profit.
The level of profit was determined on the basis of
submitted by the co-
information on profits
operating unrelated importers of
the products
concerned in the Community where such informa-
tion was considered reliable.

3. Comparison

(18)

(19)

For the purposes of a fair comparison, due al-
lowance in the form of adjustments was made for
differences which were claimed and demonstrated
to affect price comparability. In accordance with
Article 2(10) of the Basic Regulation, these adjust-
ments were made in respect of import charges and
indirect taxes, transport,
insurance, handling and
ancillary costs, packing, credit costs, commissions
and currency conversions.

Some companies claimed an allowance for currency
conversions pursuant to Article 2(10)(j) of the Basic
Regulation on the grounds that the foreign curren-
cies in which they invoiced their export sales had
devalued significantly against
the Indian rupee
during the IP.

These companies claimed that
the date of sale
should be the date of the purchase order and that
the exchange rate prevailing 60 days before the
purchase order date should be used for
the
dumping calculation.

However, as the companies concerned did not
submit any evidence to show that at the time of the
purchase order, precautionary measures had been
taken to cover them against the currency exchange
risk, it was assumed that this risk was implicitly
accepted. Consequently, the claim was provisionally
rejected but the matter will be investigated further.

(20)

Some companies claimed an allowance for import
duties due on imported raw materials. They based
their claim on the ‘Pass book scheme’. Under this
scheme, when the finished goods incorporating the
raw materials are exported,
the import duties
payable are compensated for in the form of import
duty exemptions on future imports.

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However, pursuant to Article 2(10)(b) of the Basic
Regulation, this allowance was only granted where
it was shown that the materials on which import
duties were paid were physically incorporated in
the product concerned sold on the domestic
the import duties were not
market and that
collected or refunded in respect of
the product
exported to the Community.

(21) One company claimed an adjustment

for dif-
ferences in levels of trade on the grounds that,
while it sold for export solely to distributors, it sold
to both distributors and end-users on the domestic
market. It was alleged that the prices charged to
domestic end-users were consistently higher than
the prices charged to domestic distributors.

This request was not granted since the company
could not demonstrate that there were consistent
and distinct differences in prices for the alleged
different levels of trade in the domestic market. In
particular, it was found for some product types that
the average price to domestic end-users was lower
than the average price to domestic distributors.

4. Dumping margin

(22)

Pursuant to Article 2(11) of the Basic Regulation
the dumping margins were established on the basis
of a comparison between the weighted average
normal value and the weighted average export
prices at ex-factory level and at the same level of
trade.

(23)

The dumping margins expressed as a percentage of
the net free-at-Community-frontier price were as
follows:

— Bhansali Brightbars Pvt Ltd/Bhansali

Ferromet Pvt Ltd, Mumbai

16,7 %

— Facor (Ferro Alloys Corp. Ltd), Nagpur 10,9 %

— Grand Foundry Ltd, Mumbai

— Isibars Ltd, Mumbai

— Mukand Ltd, Mumbay

— Panchmahal Steel Ltd, Baroda

12,2 %

17,7 %

17,3 %

11,4 %

— Parekh Bright Bars Pvt. Ltd, Thane

15,5 %

— Raajratna Metal Industries Ltd,

Ahmedabad

14,4 %

— Venus Wire Industries Ltd, Mumbai

15,4 %

— Viraj Alloys Ltd, Mumbai

10,9 %.

(24)

In the course of the investigation it was established
that Bhansali Brightbars and Bhansali Ferromet
were related companies. Given the risk that anti-
dumping measures could be circumvented by
channelling exports to the Community through the
company with the lower dumping margin if two
it was
different margins were

established,

concluded that only one dumping margin, based
on the weighted average of the dumping margin
found for both, should be established for the two
companies.

(25)

For any exporting producer concerned which
neither replied to the Commission’s questionnaire
nor otherwise made itself known,
the dumping
margin was determined on the basis of the facts
available in accordance with the provisions of
Article 18(1) of the Basic Regulation.

A comparison of Eurostat figures with the data on
the volume of exports to the Community of the
cooperating exporting producers was made in order
to establish the level of cooperation in the current
investigation.

Since the level of cooperation was high,
the
Commission’s services considered it appropriate to
base the dumping margin for non-cooperating
companies on the highest dumping margin found
for the cooperating exporting producers in the
country concerned since there was no reason to
believe that a non-cooperating exporting producer
had dumped at a level
lower than the highest
found.

This approach was considered necessary in order to
avoid creating a bonus for non-cooperation and an
opportunity for circumvention.

the dumping margin provisionally
Accordingly,
established for
the non-cooperating exporting
producers in India is 17,7 %, expressed as per-
centage of the free-at-Community frontier price.

(26) With regard to the exporting producer mentioned
in recital 6, it was established that all the condi-
tions set out in Article 11(4) of the Basic Regula-
tion for the initiation of a new exporter review were
met. The Commission concluded that, in this par-
ticular case, the dumping margin applicable to this
producer and to any company meeting the same
conditions should be set at a level different to that
applicable to non-cooperating exporting producers,
which is at the highest level because of their non-
cooperation and in order to prevent circumvention.
In these circumstances it was considered appro-
priate that the weighted average dumping margin
found for the cooperating Indian companies, i.e.
15,5 %, should apply to this company.

D. INJURY

1. Community industry

(27)

The aggregated production of the five Community
producers of SSB that had supported the complaint
and fully cooperated with the Commission (see

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recital 5) accounts for 45 % of total Community
production. These
the
Community industry as defined in Articles 4(1) and
5(4) of the Basic Regulation.

companies

constitute

2. General remarks

(28)

It will be recalled that the IP has a duration of only
nine months. Therefore, for the purpose of com-
parison, the findings relating to the IP were extra-
polated to 12 months in order to allow for a com-
parison on a yearly basis (hereinafter ‘IP12’).

3. Consumption in the Community

(29)

The apparent consumption of SSB in the Commu-
nity during the period January 1994 to June 1997
was based on total production in the Community
plus total
imports minus total exports. In this
respect, the Commission relied on data provided by
the Community industry,
the other producers
located in the Community and Eurofer, as well as
on Eurostat statistics.

(30) During the period 1994 to June 1997 the total
consumption in the Community expressed in
tonnes amounted to 117 039 in 1994, 146 025 in
1995, 113 448 in 1996, and 148 457 in IP12.

4. Import volumes and market

share of

dumped imports

(31)

(32)

The Indian import volume in tonnes developed as
follows: 7 597 tonnes in 1994, 11 170 tonnes in
1995, 10 329 tonnes in 1996 and 8 311 tonnes in
IP12, which corresponds to an overall increase of
2 732 tonnes or 36 % between 1994 and 1996.

The Indian market share (based on Eurostat data)
increased constantly from 6,5 % in 1994 to 7,6 %
in 1995 and to 9,1 % in 1996. This corresponds to
an increase of 40 % when comparing the years
1994 and 1996. During the IP the market share
dropped but remained at the significant level of
5,6 %.

5. Prices of dumped imports from India and

price undercutting

(33)

It has been established for the period from 1994 to
the IP that, based on Eurostat figures, imports from
India have been made consistently at prices which

undercut those of the Community industry. This
analysis has been confirmed in detail for the IP.

(34)

type,

In particular, in order to establish whether prices of
the cooperating Indian exporters undercut
the
Community industries’
sales prices, a detailed
analysis was carried out for each of them for sales
made during the IP. This was done by comparing,
per product
their weighted average export
prices with the weighted average sales prices of the
Community industry to unrelated parties. If exports
were made through related companies the export
prices were duly adjusted for costs between impor-
tation and sales to the first independent customer.
For the purposes of comparison, the products were
grouped into product
types according to steel
grade, shape, diameter and tolerance.

(35) Adjustments to the Indian export prices were made
where appropriate for transport costs and handling
charges
free-at-
Community-frontier level, customs-cleared price.

in order

arrive

the

to

at

(36) An adjustment to the sales prices of the Com-
munity producers was made for differences in
levels of trade since it was found that the Indian
producers sold to traders only whereas the Com-
munity industry sold to both traders and users,
granting significant discounts
to traders. The
adjustment was made by reducing the Community
industry’s sales prices to end-users reflecting the
discounts granted. Furthermore,
the Community
industry’s sales prices were adjusted where appro-
priate for transport costs.

(37)

(38)

The Indian exporting producers
requested an
adjustment for alleged quality differences, which
could not be granted since the chemical composi-
tion of the product concerned is governed by inter-
national standards. The request was only made in a
general manner, i.e. no company-specific informa-
tion was provided by the Indian producers which,
as a consequence, could not be properly verified.

for

Indian requests

(Indian producers

an adjustment
Similarly,
concerning (1) different lead times between order
and delivery and (2) different price-setting mech-
anisms
fixed prices
whereas Community producers use a base price
system and add a alloy surcharge for nickel, chro-
mium and molybdenum) could not be granted
since it was not demonstrated that they affected
price comparability.

sell

at

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(39)

(40)

they used payment

Furthermore, a request for an adjustment for dif-
ferences in payment terms made by two Indian
exporting producers could not be accepted. The
Indian exporting producers had stated that,
terms applied by the
contrary to the payment
Community industry,
terms
requiring payment approximately 30 days before
the goods were delivered. This statement is contra-
dicted by the findings of the Commission, which
the Indian producers concerned
established that
apply payment terms requesting payment 60 days
after the shipping date. Since transport from India
to the Community does not exceed, on average, 30
days, the Indian producers received payment not
before, but after delivery, as was found for the
Community industry.

Finally, the Indian producers requested that India’s
exemption from the 4,2 % customs duty on the
product concerned under the GSP regime be taken
into account for the calculation of price undercut-
ting and injury elimination (see recital 75). Ac-
cording to to these producers the Indian export
prices should be increased by 4,2 % ‘as if’ imports
from India did not benefit from the GSP system.
This argument was not accepted because the calcu-
lation of price undercutting is based on the actual
prices paid on the market. Hypothetical duties can
therefore not be considered. The relevant legisla-
tion, in particular Article 13 of Regulation (EC) No
3281/94, states that the granting of GSP treatment
does not preclude to counteract injurious dumping.

(41)

the duly adjusted weighted
The comparison of
average export prices with the weighted average
sales prices of
the Community industry showed
that the Indian exporting producers had undercut
the sales prices of the Community producers as
follows:

— Bhansali Brightbars Pvt Ltd/Bhansali

Ferromet Pvt Ltd, Mumbai

14,5 %

— Facor (Ferro Alloys Corp. Ltd), Nagpur 16,5 %

— Grand Foundry Ltd, Mumbai

— Isibars Ltd, Mumbai

— Mukand Ltd, Mumbay

— Panchmahal Steel Ltd, Baroda

13,3 %

19,5 %

17,9 %

13,9 %

— Parekh Bright Bars Pvt Ltd, Thane

15,5 %

— Raajratna Metal Industries Ltd,

Ahmedabad

16,8 %

— Venus Wire Industries Ltd, Mumbai

13,2 %

— Viraj Alloys Ltd, Mumbai

19,8 %.

(42)

(43)

the

For
Indian exporting producers Bhansali
Brightbars and Bhansali Ferromet it was decided,
for the reasons set out in recital 24, that only one
undercutting margin, based on the weighted
average of the undercutting margin found for both,
should be established for the two companies.

In the course of the investigation, certain Indian
producers argued that the calculation of undercut-
ting margins would be meaningless in the context
of this investigation in view of the findings set out
in a recent Commission Decision in competition
matters (Case IV/35.814 — Alloy Surcharge) (1).

This Decision stated that Community producers of
stainless steel,
flat products, had modified ‘in a
concerted fashion the reference values used to
calculate the alloy surcharge, a practice having the
object and effect of
restricting and distorting
competition within the common market’.

It should be noted, however, that this Decision
does not relate to the product subject to the anti-
dumping investigation. SSB fall into the category
stainless steel long products, as opposed to stainless
steel flat products, the product concerned by the
abovementioned Commission Decision.

at

The Indian companies confirmed this distinction,
but alleged that a concerted practice also existed for
SSB. Two of
them lodged a formal complaint
pursuant to Article 3 of Council Regulation No
stage, no conclusive
this
17 (2). However,
evidence was submitted or made available to the
Commission which suggested that the producers of
SSB had ‘in a concerted manner agreed on a price
setting mechanism of SSB’. In this context it is
important to underline that the producers of stain-
less steel, flat products, and the producers of SSB
are, to a large extent, not identical.

In addition, it was noted that, when comparing the
sales prices of the Community industry, the sales
prices for identical product
types sold to com-
parable categories of customers varied substantially
it was
within the same time period. Moreover,
noted that sales prices varied over different time
periods (with a downward trend since 1995) res-
ulting in different
levels of profitability for the
producers making up the Community industry over
different periods. The Commission therefore
concluded that, contrary to the allegation of the
Indian producers, there was nothing at this stage of
the investigation to indicate that the undercutting
calculation was meaningless.

(1) Commission Decision of 21 January 1998 (OJ L 100, 1. 4.

1998, p. 55).

(2) OJ 13, 21. 2. 1962, p. 204/62.

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6. Situation of the Community industry

6.1. Production volume,

capacity and capacity

utilisation

(44) During the period 1994 to June 1997 the total
production of the Community industry expressed
in tonnes amounted to 60 800 in 1994, 65 459 in
1995, 53 070 in 1996, and 66 640 in IP12.

(45)

It was concluded that the total production of the
Community industry had fluctuated over the recent
years in reaction to changes in demand and low-
priced imports from India. While 1995 in terms of
production can be described as a successful year for
the Community industry due to very high demand,
1996 showed a significant drop in the level of
production. This was due to a decrease in Commu-
nity consumption in 1996 and to the Indian ex-
porting producers selling their products at very low
prices, thereby undercutting the sales prices of the
Community industry. During the IP, the produc-
tion of the Community industry increased again,
benefiting from higher demand, but only achieved
lower sales prices.

(46) As far as the development of capacity and capacity
utilisation is concerned, the Community industry
uses the same machines for the manufacture of
other products. Therefore, it is difficult to assess the
precise capacity and capacity utilisation rates for
the product concerned. Hence, it was considered
appropriate not to draw any conclusions on the
basis of these two factors.

6.2. Sales volume

(47)

(48)

The sales volume by the Community industry to
unrelated parties in the Community (expressed in
tonnes) was 31 659 in 1994, 33 264 in 1995, 22 988
in 1996, 21 081 in IP and 28 108 in IP12, whereas
the sales volume to related parties was 12 977 in
1994, 13 675 in 1995, 11 930 in 1996, 13 092 in IP
and 17 456 in IP12.

It was concluded that the sales volume to unrelated
parties in the Community as well as the combined
volume to unrelated and related parties in the
trend as was
Community followed a
observed for
the volume of production. Sales
volumes have fluctuated over the past few years and
1996 showed a particularly significant drop. This

similar

trend was only reversed after
reductions during the IP with a higher
volume in this period when compared with 1996.

significant price
sales

(49)

This development corresponds to a loss of more
than 11 % of sales volumes to unrelated parties
when comparing 1994 and IP12. In this respect it
was also noted that the Community industry could
not benefit from the overall growth in the market.

6.3. Market share

(50) While

share of

the market

in the market share of

Indian imports
increased significantly between 1994 and 1996 (see
above), the same period showed a negative develop-
ment
the Community
industry. For sales to both related and unrelated
parties it was noted that while the Community
industry accounted for 38,1 % of the market in
1994, its market share amounted to 32,1 % in 1995
and 30,8 % in 1996. This corresponds to a loss of
19,2 %. The market share reached its lowest level
in the IP with 30,7 %.

(51) As regards sales to unrelated parties only, it was
established that the market share decreased signifi-
cantly from 27 % in 1994 to 22,8 % in 1995 and
to 20,1 % in 1996. Again, this corresponds to a loss
of 25,6 %. The market share reached its lowest
level in the IP with 18,9 %.

6.4. Sales prices

(52)

The sales prices of the Community industry have
followed a downward trend since 1995. In order to
prevent further losses of market share the Commu-
nity industry has lowered its prices by 21 % since
1995. Expressed in index form the sales prices
decreased from 134 in 1995 to 126 in 1996 and to
106 in the IP (index 100 corresponds to 1994).

6.5. Profitability

(53) As regards profitability, the investigation showed
that with one exception all the producers forming
the Community industry were in a better financial
situation in 1994 than during the IP. The profit
margins of all companies dropped significantly,
notably between 1995 and the IP,
and one
losses
company in particular
during the IP. The weighted-average profit margin
during the IP was unsatisfactory for all but one
producer due to the reduction in sales prices.

faced significant

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29. 5. 98

The index of
the profit margin developed as
follows: 100 in 1994, 312 in 1995, 151 in 1996 and
73 in the IP.

of the price undercutting practised by the Indian
exporting producers.

6.6. Employment and stocks

(54) As regards employment, the Community industry’s
workforce remained almost stable at 602 in 1994 to
592 during the IP. In some instances redundancies
could only be avoided by short-time working.

(55)

The stocks increased by more than 3 000 tonnes
between 1994 and the IP and amounted to 10 923
tonnes by the end of the IP.

7. Conclusions

(56)

the

the
From the above it can be concluded that
Community industry is suffering material
injury.
The main injury factors are the significant price
undercutting practised by the Indian exporting
producers,
the
Community industry’s sales prices, the unsatisfac-
tory profitability,
the significant gain in market
share by the Indian exporting producers from 1994
to 1996 and the corresponding loss of market share
by the Community industry;
the losses in sales
volumes and the increase in stocks.

consequent depression of

E. CAUSATION

1. Effect of the dumped imports

(59) Certain Indian exporting producers submitted that
they had not caused any material injury since they
only sold to a limited number of traders whereas
the Community producers also sold to users and
traders which were not customers of the Indian
there would only be
producers. Accordingly,
limited competition between the
Indian and
Community products affecting 35 % of the total
Community market. This argument is contradicted
by the transparency of the market reacting quickly
to changes in prices and the possibility for the
Indian producers to sell to other purchasers in the
Community.

2. Other factors

(60)

The Commission also considered whether other
factors such as the overall development of
the
market, the behaviour of the Community industry
itself or imports from other countries could have
caused the injury suffered by the Community
industry.

(61) Certain Indian producers alleged that

In any event, as

the com-
plainant Community industry was inefficient and
drew the attention in particular to the low rate of
capacity utilisation.
indicated
above, it was not considered appropriate to use the
capacity utilisation rate as a decisive injury factor.
However, any decrease in capacity utilisation would
occur at a time of a substantial decrease in sales of
the Community industry coinciding with an
increase in dumped imports.

(57)

The rapid increase in the market share held by
Indian imports (40 % between 1994 and 1996) and
the substantial price undercutting found (up to
16,3 %) coincide with the deterioration of the situ-
ation of the Community industry, in particular its
loss of market share, depressed prices and unsatis-
factory profitability.

(58) When faced with dumped imports originating in
the Community industry had the choice,
India,
after the successful year of 1995, of either main-
taining its prices or of following the dumped prices
with negative consequences for profitability. In
1996, some Community producers tried to main-
tain their sales prices at a high level, while others
reduced them. Both strategies resulted in a negative
impact on profitability either directly (lower prices)
or indirectly (lower sales volume resulting in higher
overheads per
tonne sold). During the IP all
Community producers lowered their sales prices
still further, which again had a negative impact on
their profitability. This clearly shows the price
sensitivity of the market and the important impact

(62)

(63)

In the course of the investigation it was also con-
sidered whether the situation of the producers in
the Community which were not part of
the
Community industry as defined in recital 27 was
any different from the situation of the Community
industry. Due to a lack of verifiable information
and taking into account the transparency of the
SSB’s market in the Community, in particular as
regards prices, it is concluded that the other produ-
cers located in the Community are likely to have
followed a similar trend to the cooperating produ-
cers.

Furthermore, it was found that imports from other
countries had had no decisive impact on the
Community industry. These imports were made
either in negligible quantities and/or at higher
prices. Only Russian imports appear, on average, to
have been made at lower prices than those from
India, but the quantities imported during the IP
accounted only for 1,2 % of
the Community
market.

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L 155/11

(64)

(65)

Finally, the Indian producers have argued that the
prices of hot-rolled bars, i.e. the major raw material
for the production of SSB, and the prices of SSB
have not followed the same downward trend over
recent years. This allegedly has led to difficulties
for non-integrated producers, as they were forced to
purchase their raw materials at higher prices. The
difficulties of the non-integrated producers could
therefore not be attributed to the Indian imports.
The latter was not substantiated and could not
therefore be taken into consideration at this stage.

(69)

(70)

3. Conclusion

In view of the coincidence in time between the
level of price undercutting, the reduction in the
sales price of
the Community industry and the
unsatisfactory profitability, as well as the significant
market share gained by the Indian imports from
1994 to 1996 (a trend which could only be reversed
after price decreases by the Community industry)
and the corresponding loss of market share suffered
by the Community industry, it was concluded that
the dumped imports from India, taken in isolation,
injury to the Community
had caused material
industry.

F. COMMUNITY INTEREST

(66)

In accordance with Article 21 of the Basic Regula-
tion, and in order to evaluate whether the adoption
the
of anti-dumping measures would be against
the
a whole,
the Community as
interest of
Commission examined the impact of measures on
the various interests involved.

(67) Measures cannot be applied where the Community
institutions, on the basis of
information
submitted, clearly conclude that it not in the in-
terest of the Community to apply such measures.

all

(68)

the outcome of

In order to investigate this issue, questionnaires
were sent to 59 users of SSB but no substantiated
replies were received. This was considered as
meaning that
the investigation
would probably not have a significant impact on
users, either because SSB are not a significant cost
factor for them or because their production of
downstream products relating to SSB only accounts
for a small proportion of total production. Anyhow,
it was noted that any price increase resulting from
the anti-dumping measures would be moderate
given the high number of competitors inside and
outside the Community.

14 suppliers of raw material to SSB Community
producers were also contacted. Their replies in-
dicated that the re-establishment of fair trade would
lead to benefits to this upstream industry from the
point of view of production, sales, employment and
profitability.

Finally, it has been argued that it could not be in
the interest of the Community to impose measures
taking into account
the aforementioned alleged
practices in the calculation of the alloy surcharge.
In this respect reference is made to the comments
made above. Furthermore, consideration was given
to the fact that no user replied to the Commission’s
questionnaire, arguing that purchase prices of the
Community industry for SSB were injustifiably
high.

(71)

In short, there was no evidence to suggest that it
was not
the Community to
impose measures.

in the interest of

G. PROVISIONAL DUTY

the conclusions on dumping,
(72) On the basis of
injury, causal
the
Commission considers it necessary to adopt provi-
sional anti-dumping measures.

link and Community interest,

(73)

(74)

the Commission took account of

For the purpose of determining the level of these
the
measures,
dumping margins found and the amount of duty
necessary to eliminate the injury sustained by the
Community industry.

To that effect, the Commission considered that the
prices of dumped imports should be increased to a
non-injurious level. The necessary price increase
was determined on the basis of a comparison of the
weighted average import price used to establish
price undercutting, as outlined in rectial 34 et seq.
with the weighted average cost of production of the
Communtiy industry and a reasonable return on
sales of the product concerned. In this respect a
profit rate of 5 % on turnover was used. The
Commission considers this profit level sufficient
given the nature of the product concerned.

(75)

This comparison showed the following injury
margins
(expressed in relation to the free-at-
Community-frontier price level):

— Bhansali Brightbars Pvt Ltd/Bhansali

Ferromet Pvt Ltd, Mumbai

18,3 %

— Facor (Ferro Alloys Corp. Ltd), Nagpur 11,5 %

— Grand Foundry Ltd, Mumbai

16,7 %

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29. 5. 98

— Isibars Ltd, Mumbai
— Mukand Ltd, Mumbai
— Panchmahal Steel Ltd, Baroda
— Parekh Bright Bars Pvt Ltd, Thane
— Raajratna Metal Industries Ltd,

Ahmedabad

— Venus Wire Industries Ltd, Mumbai
— Viraj Alloys Ltd, Mumbai

25,0 %
24,5 %
17,6 %
15,5 %

21,2 %
16,5 %
23,5 %.

— Venus Wire Industries Ltd, Mumbai
— Viraj Alloys Ltd, Mumbai

15,4 %
10,9 %.

For Sindia Steels Ltd the duty rate should be
15,5 %.

(79)

In order
for non-
to avoid granting a bonus
cooperation, it was considered appropriate to estab-
lish the duty rate for the non-cooperating com-
panies at the level of the highest duty rate found,
i.e. 17,7 %.

(76) As regards the Indian producers Bhansali Bright-
bars and Bhansali Ferromet it was decided that
only one injury margin, based on the weighted
average of
the margins for both, should be es-
tablished for the two companies.

(77)

(78)

For the newcomer Sindia Steels Ltd it was con-
sidered that, due to the lack of comparable data, the
calculated using a
injury margin should be
weighted average of
the
cooperating Indian companies. This resulted in an
injury margin of 22 %.

the injury margins of

In accordance with Article 7(2) of the Basic Regula-
tion the duty rate should correspond to the
dumping margin, unless the injury margin is lower.
The following rates of duty therefore apply for the
cooperating producers:

— Bhansali Brightbars Pvt Ltd/Bhansali

Ferromet Pvt Ltd, Mumbai

16,7 %
— Facor (Ferro Alloys Corp. Ltd), Nagpur 10,9 %
12,2 %
— Grand Foundry Ltd, Mumbai
17,7 %
— Isibars Ltd, Mumbai
17,3 %
— Mukand Ltd, Mumbai
11,4 %
— Panchmahal Steel Ltd, Baroda
— Parekh Bright Bars Pvt. Ltd, Thane
15,5 %
— Raajratna Metal Industries Ltd,

Ahmedabad

14,4 %

H. FINAL PROVISION

(80)

In the interests of sound administration, a period
should be fixed within which the interested parties
which made themselves known within the time
limit specified in the notice of initiation may make
their views known in writing and request a hearing.
Furthermore, it should be stated that the findings
made for the purposes of this Regulation are provi-
sional and may have to be reconsidered for the
purposes of any definitive duty,

HAS ADOPTED THIS REGULATION:

Article 1

A provisional anti-dumping duty is hereby imposed
1.
on imports of stainless steel bars and rods not further
worked than cold-formed or cold-finished, containing by
weight 2,5 % or more of nickel, of circular cross-section
as well as of other cross-sections, falling within CN codes
7222 20 11, 7222 20 21, 7222 20 31 and 7222 20 81 and
originating in India.

The rate of duty applicable to the net

2.
free-at-
Community-frontier price, before duty, shall be as follows:

Manufacturer

Rate of duty
(%)

Taric additional
code

Bhansali Bright Bars Pvt Ltd, / Bhansali Ferromet Pvt Ltd,
Mumbai

Facor (Ferro Alloys Corp. Ltd), Nagpur

Grand Foundry Ltd, Mumbai

Isibars Ltd, Mumbai

Mukand Ltd, Mumbai

Panchmahal Steel Ltd, Baroda

Parekh Bright Bars Pvt Ltd, Thane

Raajratna Metal Industries Ltd, Ahmedabad

16,7

10,9

12,2

17,7

17,3

11,4

15,5

14,4

8226

8400

8401

8402

8403

8404

8406

8405

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L 155/13

Manufacturer

Rate of duty
(%)

Taric additional
code

Sindia Steels Ltd, Nashik

Venus Wire Industries Ltd, Mumbai

Viraj Alloys Ltd/Viraj Impoexpo Ltd, Mumbai

All other companies

15,5

15,4

10,9

17,7

8406

8407

8400

8900

Unless otherwise specified, the provisions in force

3.
concerning customs duties shall apply.

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

Article 2

Pursuant to Article 21(4) of Regulation (EC) No 384/96,
the parties concerned may comment on the application of
this Regulation within one month of the date of its entry
into force.

Article 3

Without prejudice to Article 20 of Regulation (EC) No
384/96,
the interested parties which made themselves
known within the time limit specified in the notice of
initiation may make known their views in writing and
apply to be heard orally by the Commission within one
month of the date of entry into force of this Regulation.

This Regulation shall enter into force on the day fol-
lowing its publication in the Official Journal of the
European Communities.

Article 1 of this Regulation shall apply for a period of six
months.

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

Done at Brussels, 28 May 1998.

For the Commission

Leon BRITTAN

Vice-President