Proposal for a Council Regulation (EC) imposing a definitive anti-dumping duty on imports of stainless steel bars originating in India and collecting definitively the provisional duty imposed
Date: 1998-10-16
Institutions: European Commission
Subjects: India, anti-dumping duty, bar, import, steel

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  16.10.1998 
COM(98)581  final 

-Ms' 
Jjffift 

Proposal for a 

COUNCIL REGULATION (EC) 

imposing a definitive anti-dumping duty on imports of stainless steel bars originating 

in India and collecting definitively the provisional duty imposed 

(presented by the Commission) 

NX-  .'"" 

*>R"*'.! 

EXPLANATORY  MEMORANDUM 

1)  The  Commission,  by  Regulation  (EC)  No  1084,  on  30  May  1998  imposed 
provisional  anti-dumping  duties  on  imports  of  stainless  steel  bars  originating  in 
India.  On  18  July  1998  the  Commission,  by  Regulation  (EC)  No  1556/98, 
imposed  provisional  countervailing  duties  on  imports  of  stainless  steel  bars 
originating  in India, amending the provisional  anti-dumping duties. 

2)  For  ils  definitive  findings  the  Commission  has  taken  into  account  the  arguments 
raised  by  interested  parties  following  provisional  disclosure,  as  well  as  any 
changes  subsequently  made  to  the  provisional  findings.  However,  the  essential 
findings  of  the  Commission,  i.e.  that  the  Community  industry  has  suffered 
material  injury caused by the dumped imports  from  India, are confirmed. 

3)  Modifications  of the dumping  margins were  made, where necessary,  in respect  of 

claims made by the co-operating exporters concerned. 

4)  After  the  imposition  of  provisional  measures  it  was  noted  that  one  Indian 
company,  which had for the purpose of provisional  findings  been  considered  as a 
party  without  export  sales  during  the  investigation  period,  had  actually  exported 
the  product  concerned  to  the  Community  during  the  investigation  period. 
Consequently,  an individual  dumping  margin  was  established  for  this  exporter at 
the stage of definitive  findings. 

5)  Revised  price  undercutting  and  injury  elimination  margins  were  also  established 
to exclude transactions of Indian product types  for which no matching  Community 
product  type  ensuring,  however,  that the  remaining  transactions  were  sufficiently 
representative. 

6)  In  accordance  with  Article  9  of  Council  Regulation  (EC)  No  384/96  the 
Commission  therefore  proposes  that  the  Council  impose  definitive  anti-dumping 
duties on imports of stainless steel bars originating in India. 

7)  When the Anti-Dumping  Committee was consulted on the imposition of  definitive 

measures a majority of the Member States was in favour of the proposal. 

4-

COUNCIL REGULATION (EC) No 

of 

imposing a definitive anti-dumping duty on imports of stainless steel bars originating 

in India and collecting definitively  the provisional duty imposed 

THE COUNCIL OF THE EUROPEAN UNION 

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  from  countries  not  members  of  the  European 
Community  (*) as last amended by Regulation (EC) No 905/98 (2), and in particular 

Article 9 thereof, 

Having  regard  to  the  proposal  submitted  by  the  Commission  alter  consulting  the 

Advisory Committee, 

Whereas: 

A. PROVISIONAL MEASURES 

(1)  By Commission  Regulation  (EC) No  1084/98 (3) (hereafter  referred  to  as  'the 

provisional duty Regulation') a provisional anti-dumping duty was imposed on 

imports  into  the  Community  of  stainless  steel  bars  (hereinafter  referred  to  as 

'SSB* or 'the product concerned*) falling within CN codes 7222 20  11, 7222 20 

21,7222 20 31, and 7222 20 81 originating in India. 

(*)  OJ L 36,6.3.19%, p. 1. 
(2)  OJ L 128,30.  4.  1998, p. 18. 
(3) O JL  155,29.5.  1998, p. 3. 

3 

(2)  The provisional duty Regulation was amended by Commission Regulation (EC) 
No  1556/98 (4) imposing  a  provisional  countervailing  duty  on  imports  of  the 

same product originating in India. Pursuant to Article  14(1) of Regulation  (EC) 

No 384/96 (hereinafter  referred  to as the  'Basic  Regulation')  and  Article  24(1) 

of Regulation  (EC) No 2026/97 on protection  against  subsidized  imports from 
countries  not  members  of  the  European  Community  (5), this  amendment  was 

necessary in order to avoid the product being subject to both anti-dumping  and 

countervailing duties for the purpose of dealing with one and the same situation 

arising from dumping or from export subsidization. 

B. SUBSEQUENT PROCEDURE 

(3)  Following  the adoption  of the  Regulation  imposing  provisional  duties,  several 

interested parties submitted comments in writing. The parties who so requested 

were granted an opportunity to be heard by the Commission. 

(4)  The  Commission  continued  to  seek  and  verify  all  information  it  deemed 

necessary for its definitive findings. 

(4)  OJ L 202,18. 7.1998, p. 40. 
(5)  OJL288.21. 10.1997, p. 1. 

(5)  Parties were informed  of the essential  facts and considerations  on the basis of 

which it was intended to recommend the imposition of a definitive anti-dumping 

duty  and the  definitive  collection  of  amounts  secured  by  way  of  provisional 

duty.  They  were  also  granted  a  period  in  which  to  make  representations 

subsequent to this disclosure. 

(6)  The  oral  and  written  comments  submitted  by  the  interested  parties  were 

considered  and,  where  appropriate,  the  definitive  findings  were  changed 

accordingly. 

C. PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT 

(7)  The product concerned by the investigation 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. 

(8)  Following  the  adoption  of  the  Regulation  imposing  provisional  duties,  some 

Indian exporting producers argued that the products exported to the Community 

and  those  sold  on  the  domestic  market  in  India  were  not  comparable,  for 

instance  in  terms  of  chemical  characteristics,  and  consequently  could  not  be 

considered to be a like product. 

5" 

(9)  This claim could not be accepted since it was found that SSB produced and sold 

domestically  in India as well as Indian SSB sold on the Community market had 

the  same  basic  physical,  technical  and chemical  characteristics  and  uses.  The 

question of  whether there  were,  on a per type  basis,  any  differences  between 

SSB sold domestically and on the export market was dealt with in the context of 

the  determination  of  normal  value  and the  comparison  of  normal  value  with 

export prices. 

(10)  One  exporting  producer  claimed  that  products  corresponding  to  the  standard 

DIN  1013  fell  within  the  scope  of  the  current  anti-dumping  proceeding  and 

should therefore be taken into consideration. It was found, however, that these 

products  were  hot  rolled  bars and therefore  not  covered  by  the  scope  of  the 
investigation as set out  in the notice  of  initiation (6) and the provisional  duty 

Regulation. In addition, it was noted that they did not fall  within the relevant 

CN codes subject to measures. Consequently, this claim was not accepted. 

(11)  As no other arguments were presented, the findings set out in recitals (9) to (12) 

of the provisional duty Regulation are confirmed. 

(6)  OJC 264,30. 8.  1997, p. 2. 

C 

D. DUMPING 

1.  General 

(12)  The determination of dumping in the provisional  duty Regulation did not take 

into account any differences  in diameter when classifying  the various product 

types since it was-concluded that this did not have an impact on the production 

costs per kilogram or on the selling price per kilogram. However, two exporting 

producers claimed that the diameter of the product concerned had an impact on 

the average cost of production per kilogram and that it should consequently be 

taken  into  consideration  in  the  dumping  determination.  They  also  provided 

sufficient evidence to this effect. This claim was accepted. 

2.  Normal value 

a)  Methodology used to determine normal value 

(13)  The majority of the exporting producers objected to the methodology  used to 

determine normal value as set out in the third paragraph of recital (14) of the 

provisional  duty  Regulation.  They  argued  that  the  normal  value  of  the 

companies with insufficient  or no domestic sales should have been constructed 

rather  than  based  on  domestic  sales  of  other  Indian  exporting  producers 

investigated.  However  this  argument  could  not  be  accepted  because  this 

approach is specifically provided for in Article 2(1) of the Basic Regulation. 

(14)  In support  of the argument that it was not appropriate to base normal  value on 

the domestic  sales of other Indian exporting producers it was also claimed  that 

the  respective  domestic  sales  were  not  representative  since  they  allegedly 

represented only a small percentage of total Indian exports to the Community. 

However, in the current proceeding normal value was established on the basis of 

other exporting  producers'  domestic  sales  for  comparable  product  types  only 

when  their  sales  accounted  for  5% or  more  of  the  volume  exported  to  the 

Community by each company considered, i.e. when they were representative, as 

defined by Article 2(2) of the Basic Regulation, and were in the ordinary course 

of trade. 

(15)  In view  of the above, the claim concerning  the methodology  used to establish 

normal value was rejected. 

@L3S:l^iïkl 

8 

b) 

Average profit  rate  of domestic  sales 

(16)  Some  exporting  producers  argued  that  the  average  profit  rate  established  for 

domestic  sales  of  the  product  concerned  was  unreasonable  since  it  was 

substantially  higher than the profit margin of 5% mentioned  in recital (74) of the 

provisional  duty Regulation and in the complaint  as a reasonable profit  rate  for 

the Community industry. ITiese exporting producers claimed that a profit rate of 

5% should  also  be  used  for  the  determination  of  constructed  normal  value.  In 

this  respect  it  should  be  noted  that,  pursuant  to  Article  2(6)  of  the  Basic 

Regulation, where an exporting producer had domestic  sales of the like product 

in representative  quantities  and  in the  ordinary  course  of  trade,  the  amount  for 

profit  used for constructing  normal value was based on the weighted average  of 

the  actual  amounts  determined  for  such  domestic  sales  of  the  like  product. 

Where  this  was  not  possible,  the  amount  for  profit  was  based,  pursuant  to 

Article  2(6)(a)  of  the  Basic  Regulation,  on  the  weighted  average  of  the  actual 

amounts  determined  for  other  exporting  producers  subject  to  investigation  in 

respect  of  domestic  sales  of  the  like  product  which  were  representative  and  in 

the ordinary course of trade. 

(17)  In view of the above, the claim concerning the profit rate was rejected. 

3 

c) 

Second quality products 

(18)  Some  Indian companies, which sold second quality products on their domestic 

market  during  the  investigation  period,  argued  that  these  by-products  were 

products  concerned  and  should  therefore  be  included  in  the  normal  value 

determination. However, these products differed  substantially from first quality 

products  in  terms  of  quality,  physical  characteristics,  market  perception  and 

selling  price. Consequently,  since only first quality  products  were  exported  to 

the Community, the claim was rejected. 

(19)  Since no other comments concerning normal value were presented, the  findings 

set out in recitals (13) to (15) of the provisional duty Regulation are confirmed. 

3. 

Export price 

(20)  Some  exporting  producers  contested  the  Commission's  standard  practice  of 

using monthly average exchange rates to convert the export price into domestic 

currency.  They  claimed  that the  exchange  rates  applied  to  actual  transactions 

should have been used. In this respect, it was noted that the differences between 

daily and monthly exchange rates were only marginal. Moreover, depending on 

the  transactions,  these  differences  resulted  in  either  slightly  higher  or  lower 

export  prices,  i.e.  the  negative  differences  were  offset  by  the  positive 

differences.  As  a  result,  the  difference  between  both  approaches  was,  on 

average,  not  significant.  Consequently,  the  approach  followed  for  the 

determination of provisional  findings  was confirmed  and, therefore, the above 

claim was rejected. 

•lo 

(21)  One  company  that  made  export  sales  to  its  subsidiary  in  the  Community 

contested  the  approach  explained  in  recital  (17)  of  the  provisional  duty 

Regulation  concerning  the profit  to  be deducted  for  determining  a  constructed 

export  price.  This  company  claimed  that  the  information  on  the  sales  of  its 

European subsidiary should be used for the above purpose. Since no profit  was 

made on these sales, the company contended that no profit be deducted from the 

price  to  the  first  independent  buyer  in  order  to  construct  the  export  price. 

However, according to Article  2(9) of the  Basic  Regulation,  the adjustment  to 

be  made  in  order  to  determine  a  reliable  export  price  shall  include  profits 

accruing.  Following  the  practice  consistently  applied  by  the  Commission  and 

the Council and confirmed  by the Court of Justice, it was not found  appropriate 

to  base  the  calculation  of  the-profit  margin  on  information  from  the  related 

importer  since  this  profit  margin  can  be  influenced  by  the  relation  to  the 

exporter.  The request  is therefore  rejected  and the  approach  outlined  in  recital 

( 17) of the provisional duty Regulation is definitively  confirmed. 

(22)  In  the  absence  of  any  further  arguments  concerning  the  establishment  of  the 

export  price, the findings as  set out  in recital  (16) and  (17) of the  provisional 

duty Regulation are confirmed. 

4.  Comparison 

n 

a) 

Import charges and indirect taxes 

(23)  Some companies claimed that the adjustment granted for import charges should 

be  extended  to  certain  additional  imported  materials  subject  to  import duties. 

This claim could be accepted only to the extent that it was proved that, pursuant 

to  Article  2(10)(b)  of  the  Basic  Regulation,  the  materials  indicated  were 

physically incorporated into the products concerned sold for consumption in the 

exporting country and if the charges were not collected or refunded in respect of 

the product containing such material when exported to the Community. 

b)  Level of trade 

(24)  One company reiterated its claim for an allowance  for differences  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 for the reasons 

given in recital (21) of the provisional duty Regulation. 

c)  Credit 

(25)  It  was  requested  that,  in  order  to  determine  the  credit  costs  of  export  sales, 

interest rates prevailing on international markets for borrowing foreign currency 

should  be  used  rather  than  Indian  domestic  interest  rates.  This  request  was 

granted. 

lz 

d)  Currency conversions 

(26)  Some  companies  claimed  an  allowance  for  currency  conversions  pursuant  to 

Article 2(10)(j)  of  the  Basic  Regulation  on  the  grounds  that  the  foreign 

currencies  in which they  invoiced their export  sales had  devalued  significantly 

against  the  Indian  rupee  during  the  investigation  period.  These  companies 

claimed that, for exchange rate purposes, the date of sale should be the date of 

the  purchase  order  and,  in addition,  that  the exchange  rate prevailing  60  days 

before  the purchase order date should be used for the dumping calculation. The 

claim that the date of purchase order should be treated as the date of sale could 

not  be accepted  since this date did  not  reflect  the material  terms  of  sale  more 

appropriately than the date of invoice. 

(27)  However, where applicable, an allowance for currency conversion was made in 

accordance  with  Article 2(10)(j)  of  the  Basic  Regulation  by  granting  the 

exporting producers 60 days to reflect  a sustained  movement  in exchange rates 

of some foreign currencies in which the export sales of the companies concerned 

were invoiced. 

(28)  As no other arguments were presented  concerning comparison of normal value 

and  export price, the  remaining findings set  out  in recitals  (18) to (21) of the 

provisional duty Regulation are confirmed. 

5.  Dumping margins 

(29)  In the  absence of comments on the determination  of the  dumping  margin, the 

methodology set out in recital (22) of the provisional duty Regulation is hereby 

confirmed. 

I a-

(30)  After  the  imposition  of  provisional  measures  it  was  noted  that  Chandan  Steel 

Ltd.,  which  had  for  the  purpose  of  provisional  findings  been  considered  as  a 

party without export sales during the investigation period, had actually  exported 

the  product  concerned  to  the  Community  during  the  investigation  period. 

Consequently,  an individual  dumping  margin  was  established  for  this  exporter 

at the stage of definitive  findings. 

(31 )  The  definitive  dumping  margins  expressed  as  a  percentage  of  the  net  free-at-

Community-frontier  price are as follows: 

-  Bhansali Bright Bars Pvt Ltd. / 

Bhansali Ferromet Pvt Ltd., Mumbai 

-  Chandan Steel Ltd., Umbergaon 
-  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 
-  Venus Wire Industries Ltd., Mumbai 
-  Viraj Alloys Ltd. / Viraj Impoexpo Ltd, Mumbai 

16.6% 
26.9% 
7.4% 
10.2% 
6.6% 
14.0% 
8.7% 
4.2% 
13.0% 
12.4% 
4.8% 

(32)  The  dumping  margin  definitively  established  for  Indian  companies  other  than 

those cooperating in this investigation, expressed as a percentage of the net free-

at-Community-frontier  price,  is  26.9%.  In  this  respect,  the  Council  took  into 

consideration  the  high  level  of  cooperation  and  set  the  country  wide  dumping 

margin  at  the  highest  dumping  margin  found  for  a  cooperating  exporting 

producer. 

(33)  For the new exporter mentioned in recital (6) of the provisional  duty  Regulation 

(Sindia  Steel  Ltd.) the  definitive  dumping  margin was  established  according  to 

the  approach  explained  in  recital  (22)  of  the  provisional  duty  Regulation.  The 

dumping  margin  definitively  established  for  this  company,  expressed  as  a 

percentage of the net free-at-Community-frontier price, is 9.5%. 

\u 

1. 

Preliminary remark 

E. INJURY 

(34)  The findings on injury,  causation  and  Community  interest  in  the parallel  anti 

dumping  and  anti-subsidy  investigations  are  identical,.  All  company  specific 

calculations are based on the same data. 

2.  Community industry 

(35)  After  additional verification  it was found  that the cumulated production  volume 

of  the  Community  industry  of  SSB  does  not  account  for  45%  of  total 

Community  production,  as  erroneously  set  out  in  the  provisional  duty 

Regulation,  but  for  38%  of  total  Community  production.  This  percentage 

suffices  to  comply  with  the  conditions  in  Articles  4(1)  and  5(4)  of  the  Basic 

Regulation. 

3.  Consumption  in the Community, market shares and import volumes  from 

India 

(36)  Following the disclosure, no comments were received  as regards  consumption 

of  SSB in the Community,  the market  shares and  the volume of  imports from 

India. Consequently, the findings made  in recitals (29) to (32) of the provisional 

duty Regulation are confirmed. 

If 

4. 

Prices of dumped and subsidized imports from India and undercutting 

a)  Calculation of the undercutting margins 

(37)  As explained  in  the provisional  duty  Regulation  (recitals  33 to  42), a  detailed 

undercutting analysis was carried out for each of the Indian producers concerned 

showing  significant  undercutting  margins.  The  undercutting  margins  were 

calculated by comparing per product type the weighted average export prices at 

Community frontier level  with the weighted  average ex-factory  sales prices  of 

the Community industry to unrelated parties. Indian product types for which no 

matching  Community  product  type  was  found  were  excluded  from  the 

calculation  after  it  had  been  established  that  the  remaining  transactions  were 

sufficiently  representative. If exports were made through related companies the 

export prices were duly adjusted  for costs between importation and resale to the 

first independent customer in the Community as well as for profits accruing. An 

adjustment  was  made  to  the  Community  industry's  sales  prices  for  transport 

costs within the Community.  Whereas the  Indian exporters  sold  exclusively  to 

traders,  the  Community  industry  sold  to  end-users  and  traders.  Consequently, 

the Community industry's sales to end-users were adjusted  to a trader level.  In 

addition,  the  Indian  export  prices  were  adjusted  for  handling  charges  at 

Community border level. 

(38)  Several Indian producers reiterated their requests for  an adjustment  concerning 

differences  in Indian and Community lead times between order and delivery and 

concerning differences  in reliability of delivery time. They claimed in particular 

that  they  regularly  had  to  issue  credit  notes  to  their  customers  due  to  late 

deliveries.  However, credit notes for  late deliveries do not indicate that longer 

Indian lead times or unreliability of delivery times affected  the sales price when 

the  price  negotiations  took  place.  Consequently,  the  claim  for  this  adjustment 

cannot  be  granted.  In  this  respect,  it  was  also  taken  into  account  that  the 

contractual delivery times of the Indian producers often varied between four and 

six months without this having an effect  on the agreed sales price. 

\C 

(39)  All  Indian  producers  also  repeated  their  request  for  an  adjustment  for  quality 

differences.  In  particular,  they  alleged  that  SSB  produced  by  the  Community 

producers had a higher machinability  which would reduce cycle times  in further 

transformation  processes  of  the  SSB.  In  this  respect,  it  was  noted  that  some 

Community  producers  did  indeed  sell  a certain  proportion  of  products  under  a 

trademark  indicating  higher  machinability.  However,  it  was  found  that  there 

was  no  consistent  price  pattern  indicating  that  the  products  with  higher 

machinability  were  sold  at higher prices  and would  thus  have  a higher  market 

value.  Consequently,  an  adjustment  could  not  be  granted,  since  an  effect  on 

prices and price comparability was not established.  In addition, it was noted that 

all Indian producers had made an identical claim for an adjustment,  disregarding 

potential quality differences  amongst their products. 

(40)  One  Indian  company  claimed  that  the  sales  price  of  the  Community  industry 

consisted  of  a base  price and a so-called  'alloy  surcharge',  i.e.  a price  element 

for alloys contained in SSB. The company  requested that the alloy  surcharge be 

excluded from the  Community  sales prices  for the purpose  of  the  undercutting 

and underselling calculations.  This request could not be granted since the  alloy 

surcharge  was  part  of  the  sales  price  that  was  paid  by  the  customers.  In  this 

respect, it was noted that the Indian sales prices also contained an alloy element, 

even if this was not expressly referred to in the invoice. 

'^ 

(41)  Taking  into  account  the  corrections  described  above,  the  undercutting  margins 

amount to: 

-  Bhansali Bright Bars Pvt Ltd. / 

Bhansali Ferromet Pvt Ltd., Mumbai 

-  Chandan Steel Ltd., Umbergaon 
-  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 
-  Venus Wire Industries Ltd., Mumbai 
-  Viraj Alloys Ltd. / Viraj Impoexpo Ltd, Mumbai 

14.5 % 
14.9% 
13.0% 
13.2% 
19.4% 
17.8% 
13.9% 
5.8% 
15.8 % 
12.8% 
15.7 % 

(42)  The  weighted  average  undercutting  margin  calculated  for  Sindia  Steel  Ltd.  (cf. 

recital (33) above) amounted to  16.8%. It was concluded that these undercutting 

margins were  significant. 

b) 

Allegation  of anti-competitive  behaviour 

(43)  In their comments  following  the disclosure, the  Indian companies  continued  to 

argue  that  the  calculation  of  undercutting  margins  as  well  as  the  findings  on 

other injury factors, causality and Community  interest would  be meaningless  in 

the  context  of  this  investigation  in  view  of  the  Commission  decision  in  the 

competition  case  IV/35.814,  "Alloy  Surcharge"  (7).  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'. 

(44)  In  this  respect  it  is  recalled  that  the  decision  related  to  stainless  steel  'flat 

products' as opposed to stainless steel bars which belong to the category of long 

products.  Moreover,  the  producers  of  flat  products  arid the  producers  of  SSB 

(7)  Commission Decision of 2Î.  1. 1998, OJ L100,  1.4.  1998, p.55. 

are,  to  a  large  extent,  not  identical  and  the  number  of  SSB  producers  is 

significantly  higher than that of the flat steel producers. 

(45)  The  Indian producers  have,  however,  repeated  their  allegation  that  a concerted 

practice  existed  for  SSB.  Some  of  these  companies  have  also  lodged  a  formal 

complaint  with  the  Commission,  pursuant  to  Article  3  of  Council  Regulation 

(EEC) No  17 (8), concerning SSB. In order to support their allegation, the Indian 

companies  submitted  that  one  of  the  national  steel  associations 

in  the 

Community circulated to all of its members on a monthly basis a list of the alloy 

surcharges  applied  by the most  important producer in this  country.  In addition, 

they  submitted  that  this  producer  applied  the  same  coefficient  (so-called  yield 

factor) in order to calculate the alloy  surcharge for SSB on the basis of the alloy 

surcharge for flat products as a trader in a different  Member State. They  alleged 

that the information provided conclusive evidence of a concerted practice in the 

SSB market. 

(46)  It this  respect  it  is  important  to note  that the  application  of  an  alloy  surcharge 

system  as  such  including  the  use  of  a  yield  factor  is  not  illegal.  The  alloy 

surcharge system allows a stainless steel producer -  in a legal manner - to reflect 

the price variations of the market prices for alloy  elements  in the sales prices to 

its customers and thus to protect itself against the risk of significant  fluctuations 

in the cost of production. It was also noted that the use of an alloy  surcharge  is 

common  to  other  steel  markets  outside  the  Community  and  has,  with  a  short 

interruption,  been  applied  in  the  Community  for  many  years.  In  addition,  for 

ECSC-products,  Article  60  of  the  ECSC  Treaty  and  the 

implementing 

Community  legislation  requires  the  Community  producers  to  inform  the 

(8)  OJ  13,21. 2.1962, p. 204. 

15 

Commission and anyone  interested  of the applicable  surcharge  (Article  6.b  of 

Decision No 37/54 of 29 July 1954 (*)). 

(47)  Consequently  and  in  accordance  with  the  Commission  Decision  in  case 

IV/35.814, the application of an alloy surcharge system could only be illegal  if 

the  alloy  surcharge  system  were  applied  in  a concerted,  i.e.  anti-competitive, 

manner. However, no conclusive evidence of this was found in the course of the 

investigation. 

(48)  In addition, it was found that the price of the Community producers for identical 

products  to  comparable  customers  in  identical  periods  varied,  resulting  in 

different levels of profitability for the Community industry. 

(49)  In  the  light  of  the  above  it  was  concluded  that  the findings on  injury  and 

Community interest, including the calculation of undercutting margins, were not 

meaningless  as  alleged  by  the  Indian  companies.  Consequently,  the  Indian 

request  that  the  investigation  be  terminated  forthwith  could  not  be  granted. 

Similarly, it was not possible to suspend the anti-dumping investigation until the 

Commission  had  concluded  its  investigation  relating  to  the  alleged  anti 

competitive  behaviour  because  anti-dumping  investigations  have  to  be 

concluded within a maximum of 15 months from initiation according to Article 

6 (9) of the Basic Regulation. 

C9)  OJ 18, 01.08.1954, p. 470 

2o 

(50)  However,  it  was  noted  that  the  Commission  is  continuing  its  investigation 

regarding  the  alleged  anti-competitive  behaviour.  Should  the  Commission  find 

that  a  concerted  practice  existed,  the  conditions  to  initiate  a  review  ex  officio 

would be fulfilled.  Such a review would be carried out expeditiously,  i.e.  within 

maximum  12  months,  in  order  to  investigate  whether  and  to  what  extent  the 

relevant  findings  on  injury,  causation  and  Community  interest  are  affected  by 

such an anti-competitive practice. 

5. 

Situation of the Community  industry 

(51)  Following  the  adoption  of  the  Regulation  imposing  provisional  duties  no 

comments were received  as regards the  situation of the  Community  industry  in 

respect  of  production  volume,  capacity  and  capacity  utilisation,  sales  volume, 

market share, sales prices, profitability,  employment  and stocks.  Consequently, 

the  findings  as  laid  down  in  recitals  (44)  to  (55)  of  the  provisional  duty 

Regulation are confirmed. 

However, the Government of India questioned the conclusions drawn from these 

findings,  in particular it was alleged that the drop in the Community  production 

figures  cannot  be  blamed  on  the  decreasing  Indian  imports.  This  argument 

concerns  causality which is dealt with below.  Finally, the Government of  India 

claimed  that  the  Community  industry  increased  their  sales  to  related  parties 

from  1994 to  the IP 12 (see  recital  28  of the provisional  duty Regulation).  This 

does,  however,  not  invalidate  the  findings  and  conclusions  on  total  sales  (in 

particular a negative development of the market share since  1994) and on  sales 

to  unrelated  parties  which  are  also  used  for  the  purpose  of  price  undercutting 

calculations. 

(52)  On  &e  basât  of  the  above  it  was  concluded  mat  the  Community  industry  is 

suffering  material  iftjury  as  set  out  in  recital  (56)  of  the  provisional  duty 

Regulation. 

F. CAUSATION 

(53)  Following  the  adoption  of  the  Regulation  imposing  provisional  duties,  some 

Indian  companies  questioned  whether  the  injury  suffered  by  the  Community 

industry  was  caused  by  the  dumped  and  subsidized  imports  from  India.  In 

particular, it was alleged that the injury was caused by other factors, namely low 

priced  imports  from  other  countries.  In  addition,  it  was  alleged  that  other 

Community  producers  had  not  followed  the  same  trend  as  the  Community 

industry. 

(54)  In this respect, it is worth noting that Indian imports were present in  significant 

volumes throughout the period considered and peaked at a level of 9.1% market 

share  in  1996.  It  has  also  been  established  that  these  imports  were  made  at 

prices significantly  undercutting the Community industry's prices. Account was 

further  taken of the fact that a number of traders buy SSB both from Indian and 

Community  sources,  which  leads  to  the  market  being  transparent  and  price 

sensitive. 

It was noted that the above trends established  for  the Indian imports  coincided 

with  the  deterioration  of  the  Community  industry's  situation,  in  particular  its 

loss of market share and the depression of its prices since  1995.  In the presence 

of  dumped  and  subsidized  imports  of  SSB  originating  in  India  during  the 

22. 

investigation  period,  the  Community 

industry  had  to 

lower 

its  prices 

significantly,  regardless  of  the  consequences  for  profitability.  Consequently,  a 

causal  link between dumped and subsidized  imports and material  injury  suffered 

by the Industry was found to exist. 

(55)  It was  also  investigated  whether  factors  other than the  dumped  and  subsidized 

imports  could  have  contributed  to  the  injury  suffered  by  the  Community 

industry.  In  this  respect,  it  was  noted  that  imports  from  other  countries  were 

made either in quantities below or close to the thresholds  set out in Article  5(7) 

of  the  Basic  Regulation  and/or  at  higher  prices  than  Indian 

imports. 

Consequently  these  imports  cannot  have  broken  the  causal  link  between  the 

dumped  and  subsidized  imports  from  India  and  injury  suffered  by  the 

Community industry. 

(56)  In addition,  the allegation  by  some  Indian producers  that the  situation  of  other 

Community  producers  was  significantly  better  than  that  of  the  Community 

industry was investigated.  In this respect, it should be recalled that detailed and 

verified  data is only available for the Community  industry.  Taking  into account 

the transparency and the price sensitivity  of the  SSB  market in the  Community, 

it  seemed  however,  not  unreasonable  to  conclude  that  other  Community 

producers are  likely  to have  followed  a trend similar to that of the  Community 

iadttstry, in particular as regards prices. 

(57)  Finalry,  it  was  argued  that  the  decrease  in  the  SSB  sales  prices  of  the 

Community  industry  since  1995  was the result  of  a decrease  in alloy  prices. In 

this respect, it was however noted that any change in the world market prices for 

23 

the  alloys  applies  equally  to  the  Indian  producers  and  consequently  has  no 

influence  on  the  undercutting  found.  In  addition,  it  was  noted  that  the 

Community industry had also significantly  lowered its base prices. 

(58)  In the light of the above, the findings  set out in the provisional duty  Regulation 

(recitals  (57)  to  (65))  are  confirmed,  i.e.  that  the  low  priced  dumped  and 

subsidized  imports  from  India  have,  when  taken  in  isolation,  caused  material 

injury to the Community industry. In addition, it has been established that, given 

the  amount  of  dumping  involved,  the  contribution  of  dumping  to  the  injury 

caused by the imports in question has been  significant. 

G. COMMUNITY INTEREST 

(59)  Following  the  adoption  of  the  Regulation  imposing  provisional  duties  no 

substantiated  comments  were  received  as  regards  the  Community  interest 

analysis set out in recitals (66) to (71) of the provisional duty Regulation. 

(60)  Consequently,  it  is  concluded  that  the  imposition  of  measures  will  lead  to  a 

reinstatement of effective  competition that will enable the Community  industry 

to regain the lost market share and improve its profitability. 

(61)  In the absence of a reaction from the users and  importers, it was assumed  that 

the  impact  of  any  expected  price  increase  would  be  limited,  also  taking  into 

account the level of the duty proposed.  As regards the upstream industry, it was 

2.(4 

concluded  that a reinstatement  of fair trade would  lead to an improvement  in its 

competitiveness. 

(62)  Summarising,  it was  concluded  that the  findings  set out  in recitals  (66)  to  (71) 

of the provisional  duty Regulation  can be  confirmed.  In particular,  there are no 

compelling  reasons  to  suppose  that  it  would  be  not  in  the  interest  of  the 

Community to impose measures. 

H. ANTI-DUMPING  MEASURES 

(63)  Based on the above conclusions on dumping, injury, causal link and Community 

interest,  it  was  considered  what  form  and  level  the  definitive  anti-dumping 

measures  would  have  to  take  in order to  remove  the  trade distorting  effects  of 

injurious  dumping  and  to  restore  effective  competitive  conditions  on  the 

Community  SSB market. 

(64)  Accordingly,  as  explained  in  recitals  (72)  to  (74)  of  the  provisional  duty 

Regulation a non-injurious level of prices was calculated which would allow the 

Community  industry  to  cover  its  cost  of  production  and  obtain  a  reasonable 

return for sales of the product concerned. 

(65)  One Indian company  argued that the calculation of the non-injurious price  level 

was  incorrect  since  the  profit  margin  for  all  product  types  was  identical.  It 

should be noted that the non-injurious price level  was calculated on the basis  of 

the  average  sales  prices  per  product  type  minus  the  actual  weighted  average 

profit  margin of  the Community  industry  plus a reasonable  profit,  as  explained 

above. This approach was deemed to be the most appropriate for the purpose  of 

this investigation. 

(66)  The  comparison of  the  non-injurious  price  levels  with  the  export  prices  of  the 

Imâkm producers ted \o the following injury margins, expressed in relation to the 

free at Community frontier price level: 

-  Bhansali Bright Bars Pvt Ltd, / 

Bhansali Ferromet Pvt Ltd., Mumbai 

18.4% 

25" 

-  Chandan Steel Ltd., Umbergaon 
-  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 
-  Venus Wire Industries Ltd., Mumbai 
-  Viraj Alloys Ltd. /  Viraj Impoexpo Ltd, Mumbai 

\ 

19.0% 
16.5% 
16.6% 
25.5% 
25.3% 
17.6% 
7.5% 
19.8% 
16.1% 
20.2% 

(67)  For  the  newcomer,  Sindia  Steels  Ltd.,  as  laid  down  in  recital  (77)  of  the 

provisional  duty  Regulation  the  weighted  average  of  the  injury  margins  of  the 

cooperating  Indian  companies  is  applied.  This  resulted  in  an  injury  margin  of 

22.1%. 

(68)  In  accordance  with  Article  9(4)  of  the  Basic  Regulation,  the  duty  rate  should 

correspond to the dumping margin, unless  the  injury margin is  lower.  This  led 

to the following  rates of duty for the cooperating producers: 

-  Bhansali Bright Bars Pvt Ltd. / 

Bhansali  Ferromet Pvt Ltd., Mumbai 

-  Chandan Steel Ltd., Umbergaon 
-  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 
-  Venus Wire Industries Ltd., Mumbai 
-  Viraj Alloys Ltd. / Viraj Impoexpo Ltd, Mumbai 

(69)  For Sindia Steels Ltd. the duty rate should be 9.5%. 

16.6% 
19.0% 
7.4% 
10.2% 
6.6% 
14.0% 
8.7% 
4.2% 
13.0% 
12.4% 
4.8% 

(70)  In  order  to  avoid  granting  a  bonus  for  non-cooperation  and  to  ensure  that  no 

circumvention  of  the  anti-dumping  measures  takes  place,  it  was  considered 

appropriate  to  establish  the  duty  rate  for  the  non-cooperating  companies  at the 

level  of the highest duty rate imposed, i.e.  19.0% since there was a high level  of 

cooperation from Indian exporting producers. 

2<Ç 

(71)  In  accordance  with  Article  14(1)  of  the  Basic  Regulation  no  product  shall  be 

subject  to  both  anti-dumping  and  countervailing  duties  for  the  purpose  of 

dealing  with  one  and the  same  situation  arising  from  dumping  or  from  export 

subsidization.  As  the  dumping  and  subsidy  margins  have  been  established  on 

imports of the product in question (i0)  it is  necessary  to determine  whether and 

to  what  extent  the  subsidy  and  the  dumping  margins  arise  from  the  same 

situation. 

(72)  In the case  in question  all  of the investigated  subsidy  schemes  have  been  found 

to  constitute  export  subsidies  within  the  meaning  of  Article  3(4)(a)  of 

Regulation  (EC)  No  2026/97.  In  these  circumstances  it  is  not  considered 

appropriate  to  impose  both  countervailing  and  anti-dumping  duties  to  the  full 

extent  of the relevant  subsidy  and dumping  margins established.  Consequently, 

the  anti-dumping  duties  are to  be  reduced  by  the  amount  of  the  countervailing 

duty  established  in  parallel  anti-subsidy  investigation  to  reflect  the  actual 

dumping  margins  remaining  after  the  imposition  of  the  countervailing  duties 

offsetting  the effect  of the export subsidies. 

(73)  Accordingly, the definitive  anti-dumping duties are as follows: 

- Bhansali Bright Bars Pvt Ltd. / 

Bhansali Ferromet Pvt Ltd., Mumbai 
- Facor (Ferro Alloys Corp. Ltd.), Nagpur 
- Chandan Steel Ltd., Umbergaon 
- 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 
- Sindia Steels Ltd., Nashik 
- Venus Wire Industries Ltd., Mumbai 
- Viraj Alloys Ltd. / Viraj Impoexpo Ltd, Mumbai 

2.2% 
0% 
0% 
0% 
0% 
0% 
8.7% 
4.2% 
0% 
0% 
0% 
0% 

(10) Cf.  Council Regulation (EC) No 

/98  imposing a definitive  countervailing duty on  imports of 

stainless steel bars originating in India, published in this OJ. 

2> 

- AU other companies 

0% 

The duty rates apply cumulatively  to the duty rates imposed  in the parallel anti-

subsidy proceeding. 

I. UNDERTAKINGS 

(74)  After  expiry  of the deadline to submit proposals  for  undertakings  an  exporting 

producer  submitted  a  proposal  for  an  undertaking.  This  company  offered  to 

respect certain minimum prices. This offer  was examined and it was found  that 

due to the large variety of the product types concerned and the significant  price 

fluctuations  for  the product concerned  it would  be difficult  to  set prices which 

would  eliminate  the  injurious  effects  of  dumped  and  subsidized  imports. 

Consequently, the offer  for this undertaking could not be accepted. 

J. COLLECTION OF THE PROVISIONAL DUTIES 

(75)  Considering the conclusions on dumping and injury  definitively  established, the 

provisional duty should be collected: For the period between entry into force of 

the  provisional  duty  Regulation  and  entry  into  force  of  Regulation  (EC)  No 

1556/98 the amount secured by way of provisional anti-dumping duty should be 

definitively  collected  at  the  duty  rate  definitively  calculated  and  set  out  in 

recitals (68) to (70) unless the provisional duty rate is lower than the  definitive 

duty rate, in which case the provisional duty rates should prevail.. 

For the period following the entry into force of Regulation (EC) No  1556/98 the 

amount secured by way of provisional anti-dumping duty should be  definitively 

. collected at the duty rates set out in recital (73). 

Amounts  secured  in  excess  of  the  respective  definitive  duty  rates  shall  be 

released. 

HAS ADOPTED THIS REGULATION: 

2? 

Article 1 

1.  A definitive anti-dumping duty is hereby imposed on imports of stainless steel bars 

falling  within  CN  codes  7222  20  11, 7222  20  21, 7222  20  31, and  7222  20  81 

originating in India. 

2.  Products  manufactured  by  the  companies  listed  below  shall  be  subject  to  the 

following rates of duty applicable to the net, free-at-Community frontier price: 

Manufacturer 

Rate of duty (%) 

Taric additional code 

"" 

- Bhansali Bright Bars Pvt Ltd., 
Bhansali Ferromet Pvt Ltd., Mumbai 

"~22 

- Chandan Steel Ltd., Umbergaon 

- 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 

- Sindia Steels Ltd., Nashik 

- Venus Wire Industries Ltd., Mumbai 

- Viraj Alloys Ltd., Viraj Impoexpo Ltd, 

Mumbai 

- All other companies 

6 

0 

0 

0 

6 

87 

42 

0 

0 

0 

0 

0 

8226 

8593 

8400 

8401 

8402 

8403 

8404 

8594 

8405 

8406 

8407 

8410 

8900 

3.  Unless otherwise specified, the provisions in force concerning customs duties shall 

apply. 

Article 2 

For the period between entry into force of Regulation (EC) No  1084/98 and entry into 

force  of  Regulation  (EC) No  1556/98  the amount of  provisional  anti-dumping duty 

25 

secured by way of Regulation (EC) No  1084/98 shall be definitively  collected at the 

rates set out in recitals (68) to (70) of this Regulation, unless the duty rates set out in 

Regulation (EC) No  1084/98  are lower than those  set out in recitals (68) to (70), in 

which case the duty shall be definitively  collected  in the amount corresponding to the 

duty rates set out in Regulation (EC) No 1084/98. 

For the  period  following  the  entry  into  force  of  Regulation  (EC)  No  1556/98,  the 

amount  of provisional  anti-dumping  duties  secured by  way  of  Regulation  (EC)  No 

1556/98 shall be definitively collected at the duty rates set out in Article 1  (2). 

Amounts secured in excess of the respective definitive duty rates shall be released. 

Article 3 

This Regulation shall enter into force  on the day following  that of  its publication in 

the Official Journal of the European Communities. 

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

States. 

Done at Brussels, 

For the Council 

The President 

Jo 

ISSN 0254-1475 

COM(98) 581 final 

DOCUMENTS 

EN 

02  11  10 

Catalogue  number  :  CB-CO-98-585-EN-C 

ISBN  92-78-39905-1 

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