Commission Regulation (EC) No 616/1999 of 23 March 1999 imposing a provisional anti-dumping duty on imports of stainless steel wires with a diameter of less than 1 mm originating in the Republic of Korea
Date: 1999-03-23
Institutions: European Commission
Subjects: South Korea, anti-dumping duty, import, originating product, steel, wire

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I

(Acts whose publication is obligatory)

COMMISSION REGULATION (EC) No 616/1999

of 23 March 1999

imposing a provisional anti-dumping duty on imports of stainless steel wires
with a diameter of less than 1 mm originating in the Republic of Korea

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

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
the European
Community (1), as last amended by Regulation (EC) No
905/98 (2), and in particular Article 7 thereof,

not members

of

After consulting the Advisory Committee,

Whereas:

(1)

(2)

A. PROCEDURE

On 25 June 1998, the Commission announced, by
a notice published in the Official Journal of the
European Communities (3),
the initiation of an
anti-dumping proceeding with regard to imports
into the Community of stainless steel wires with a
diameter of less than 1 mm originating in the
Republic of Korea (hereafter ‘Korea'). A parallel
anti-subsidy investigation was initiated on the same
date.

The proceeding was initiated as a result of a
complaint lodged in May 1998 by the European
Confederation of Iron and Steel Industries (Eurofer)
on behalf of Community producers representing a
major proportion of the Community production of
steel wires. The complaint contained
stainless
evidence of dumping of the said product and of
material
injury resulting therefrom, which was
considered sufficient, after consultation, to justify
the initiation of a proceeding.

(3)

The Commission officially advised the complain-
ant Community producers, exporting producers,
and users known to be
importers,

suppliers

(1) OJ L 56, 6. 3. 1996, p. 1.
(2) OJ L 128, 30. 4. 1998, p. 18.
(3) OJ C 199, 25. 6. 1998, p. 8.

concerned as well as associations concerned and
representatives of the exporting countries. Inter-
ested parties were given the opportunity to make
their views known in writing and to request a
hearing within the time limit set in the notice of
initiation. All parties who so requested were
granted a hearing.

(4)

(5)

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

The Commission sought and verified all the infor-
mation it deemed necessary for the purposes of a
preliminary determination of dumping, injury and
Community interest and carried out verification
visits at the premises of the following companies:

(a) Community producers

— AB Sandvik Steel, Sandviken, Sweden

— Bekaert N.V., Zwevegem, Belgium

— Gusab Stainless, Mjolby, Sweden

— Sprint-Metal, Paris, France

— Sprint Metal Edelstahlzieherei GmbH,

Hemer, Germany

— Rigby-Maryland Stainless Ltd., Liversedge,

United Kingdom

— Rodacciai S.p.a and Rodasider S.r.l, Bosisio

Parrini, Italy

— Societa Italiana Kanthal S.p.a, Cinisello

Balsamo, Italy

(b) Exporting producers in Korea

— Dae Sung Rope MFG. Co. Ltd., Pusan

— Korea Sangsa Co. Ltd., Seoul/Pusan

— Korea Welding Electrode Co. Ltd., Seoul

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— Kowel Special MFG Steel Wire Co. Ltd.,

Pusan

— Seah Metal Products Co. Ltd., Chang Won

— Shine Metal Co. Ltd., Pusan

(c) Importers

in the Community

related to

(10)

exporting producers

— Kos Europe GmbH, D(cid:129)sseldorf, Germany

(d) Importers in the Community not related to

exporting producers

— Trio Handels GmbH, Eppstein, Germany

— Bodo Trading GmbH, Dreieich, Germany

(6)

The dumping investigation covered the period
from 1 April 1997 to 31 March 1998 (hereafter
referred to as ‘the investigation period' or ‘IP').

The examination of injury covered the period from
1 January 1994 to 31 March 1998 (hereafter
referred to as the ‘period considered').

(7)

(8)

B. PRODUCT UNDER CONSIDERATION AND

LIKE PRODUCT

1. Product under consideration

The product under consideration is wire of stainless
steel, containing by weight 2,5 % or more of
nickel, other than containing by weight 28 % or
more but no more than 31 % of nickel and 20 %
or more but not more than 22 % of chromium,
having a diameter of less than 1 mm (hereinafter
‘SSW'). This product is currently classifiable with
CN code ex 7223 00 19.

This product is basically defined by its physical
aspect as cold finished wire and its classification
into a specific group of stainless steel grades. SSW
is obtained by shaping wire rod by operations
which reduce the cross-section of the wire rod. The
final cross-section is generally round. Several
processes are used to transform wire rod into SSW.
Depending on customer requirements SSW will
have specific mechanical or chemical character-
istics
steel
grade) and surface aspects (bright, mat, coated),
which result in a large number of product types,
(hereinafter
references or
models). Despite those differences, all types of SSW
are to be considered as one product.

(tensile strength, diameter,

also referred to as

stainless

(9)

SSW, i.e. stainless steel wire with a diameter of less
than 1 mm, is manufactured by wet drawing and
obtained by reducing the diameter
through a
machine equipped with multiple oil-lubricated
dies. SSW production is substantially more costly

than the manufacturing of bigger sizes (1 mm or
more) because it involves several successive trans-
formation stages to obtain the required product
characteristics and is more labour-intensive.

SSW is further transformed by users which manu-
facture, for example, ultra-fine filtration elements,
weaving wire, springs, etc. These semi-finished
products are then used in sectors such as the auto-
motive,
textile, medical
applications, etc.

electro-mechanical,

(11) During the investigation it has been provisionally
found that there are differences in physical charac-
teristics and uses between stainless steel wires with
a diameter of 1 mm or more on the one hand and
with a diameter of less than 1 mm on the other
hand. These physical differences relate in particular
to tensile strength, coating and ductability. In addi-
tion, the use of fine wires is largely concentrated in
the field of ultra-fine applications such as medical
and surgery equipment, fine filters etc., while large
wires are mainly used for construction, bearings, in
the automotive industry and certain mechanical
and household applications. For these reasons it
appears that there is very limited interchangeability
between large
applications.
However, the question whether a clear dividing line
can be drawn between these two products will be
further investigated.

fine wires’

and

(12)

(13)

2. Like product

the

investigation established that

SSW
The
produced in Korea and sold domestically or
exported to the Community and the SSW produced
and sold in the Community by the complainant
Community producers had effectively identical
physical characteristics and uses and were thus like
products within the meaning of Article 1(4) of
Council Regulation (EC) No 384/96 (hereinafter
referred to as ‘the Basic Regulation').

C. DUMPING

1. Normal value

In order to establish normal value, it was first deter-
mined for the co-operating exporting producers of
the countries involved in the proceeding whether
the total volume of
the
product concerned were representative in accord-
ance with Article 2(2) of the Basic Regulation, i.e.
whether these sales represented more than 5 % of
the
concerned
exported to the Community.

the domestic sales of

the product

volume of

sales

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

For those product types meeting the 5 % test, it
was established whether sufficient sales had been
made in the ordinary course of trade in accordance
with Article 2(4) of the Basic Regulation.

Where, per product type, the volume of domestic
sales above unit cost represented at least 80 % of
sales, normal value was established on the basis of
the weighted average prices actually paid for all
domestic sales. Where, per product
the
volume of profitable transactions was lower than
80 %, but not lower than 10 % of sales, normal
value was established on the basis of the weighted
average prices actually paid for the remaining prof-
itable domestic sales.

type,

those product

For
types where the volume of
domestic sales was lower than 5 % of the volume
exported to the Community, or where the volume
of profitable domestic sales was less than 10 %,
domestic sales of those product types were consid-
ered insufficient within the meaning of Article 2(4)
of the Basic Regulation and were therefore disre-
garded. In these cases, normal value was based on
the weighted average of the prices charged by other
producers in the country concerned for repres-
entative domestic
corresponding
sales of
product type made in the ordinary course of trade
in accordance with Article 2(1) of the Basic Regula-
tion.

the

Where, per product type, there were insufficient
sales or no representative domestic sales by other
producers in the country concerned, normal value
was constructed on the basis of the costs of manu-
facturing incurred by the exporting producer
concerned for the exported product type in ques-
tion plus a reasonable amount for SG&A costs and
profits in accordance with Article 2(3) and (6) of the
Basic Regulation. The SG&A were based on repres-
entative domestic sales and the profit margin based
on representative domestic sales made in the or-
dinary course of trade.

2. Export price

(14) Where export sales to the Community were made
directly to independent
importers export prices
were established on the basis of the prices actually

paid or payable by these importers in accordance
with Article 2(8) of the Basic Regulation.

(15) Where export sales were made to importers in the
Community which were related to the exporting
producer, the export prices were constructed on the
basis of the prices at which the imported products
were first resold to independent buyers in the
Community, in accordance with Article 2(9) of the
Basic Regulation. Adjustments were made for all
costs incurred between importation and resale,
including a reasonable margin for SG&A plus
profit. The level of profit was determined on the
basis of information on profits achieved by the
co-operating unrelated importers of
the product
concerned in the Community.

(16)

(17)

(18)

In this connection, one related Korean importer in
the Community requested to decrease its SG&A
expenses by the amount of commissions received
from the parent company in Korea. It was estab-
lished that the commissions paid from Korea to
this related importer in the Community were in
fact based on sales made directly by the parent
company
in the
Community and that no services were rendered by
the related importer in connection with these sales.
Consequently these commissions were not taken
into consideration for the establishment of
the
constructed export price.

independent

customers

to

3. Comparison

For the purposes of a fair comparison due allow-
ance, in the form of adjustments, was made for
differences claimed under Article 2(10) of the Basic
Regulation and demonstrated to affect price
comparability. On this basis, adjustments were
made with regard to indirect taxes, import taxes,
charges for transport, insurance, handling, loading,
ancillary costs, packing, credit, aftersales costs and
commissions.

Six companies claimed an allowance for import
charges. Pursuant to Article 2(10)(b) of the Basic
Regulation the request was fully rejected for one
company since it was not able to prove that raw
materials had been imported with payment of
duties and had been physically incorporated in the
product concerned sold on the domestic market.
For the other five companies the allowance was
partially granted to the extent that it was proved
that the materials on which import duties were
payable had been physically incorporated into the

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products concerned sold on the domestic market
and that the import duties had not been collected
or refunded in respect of the product exported to
the Community.

(19) One company requested an adjustment for differ-
ences in the level of trade on the grounds that on
the domestic market all its sales were made directly
to customers whereas on the Community market
part of
its sales were made through a related
importer. It was argued that since all expenses
incurred by the related importer would be deducted
from the export price for the comparison,
the
indirect selling expenses incurred for the domestic
sales should be deducted from the domestic price
as well.

This claim could provisionally not be accepted
because the exporting producer concerned was not
able to demonstrate that the constructed export
price was at a different level of trade than the
normal value and that this difference affected price
comparability as required by Article 2(10)(d) of the
Basic Regulation.

4. Dumping margins

(20)

In accordance with Article 2(10) and (11) of the
Basic Regulation,
the weighted average normal
value was compared with the weighted average
export prices. For exporting producers involved in
the proceeding who did not reply to the Commis-
sion’s questionnaire or did not make themselves
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 Regula-
tion.

A comparison of Eurostat figures with the data on
the volume of exports to the Community supplied
by the co-operating exporting producers was made
in order to establish the level of co-operation in the
current investigation. As a result, it was found that
the overall
level of co-operation was high. The
Commission therefore considered it appropriate to
set the dumping margin for the non co-operating
companies at the level of the highest individual
dumping margin established for a co-operating
exporting producer, since there was no reason to
believe that a non co-operating exporting producer
had dumped at a level lower than the highest level
found.

The above approach was also considered necessary
in order to avoid creating a bonus for non-coopera-
tion and an opportunity for circumvention.

(21)

The dumping margins, expressed as a percentage of
the CIF price at Community frontier level, are:

— Dae Sung Rope MFG Co. Ltd:
— Korea Sangsa Co. Ltd:
— Korea Welding Electrode:
— Korea Special MFG Steel Wire Co.

Ltd:

— Seah Metal Products Co. Ltd:
— Shine Metal Co. Ltd:

0,0 %,
0,6 %,
0,0 %,

17,0 %,
0,0 %,
2,7 %.

D. INJURY

1. Definition of the Community industry

Community Producers

(22)

The Community production, within the meaning
of Article 4(1)(a) of the Basic Regulation, is consti-
tuted by:

— producers on behalf of which the complaint
was
lodged and which co-operated in the
investigation (‘the co-operating complainants'),
— producers on behalf of which the complaint
was lodged and which did not co-operate in the
investigation (‘the non co-operating
com-
plainants'), and

— other Community producers which are not
complainants and did not co-operate in the
proceeding but did not oppose to it.

Community industry

(23)

(24)

The co-operating complainants fulfil the require-
ments of representativeness within the meaning of
the Basic Regulation, since they
Article 5(4) of
account
total
Community production of the product concerned
and are
the
Community industry within the meaning of Article
4(1) of the same Regulation.

therefore deemed to constitute

than 75 % of

for more

the

2. Preliminary remark: competition aspects

In the course of the three parallel anti-dumping
and anti-subsidy investigations concerning stainless
steel wire, i.e. those with a diameter of 1 mm or
more and also concerning the product concerned,
i.e. those with a diameter of less than 1 mm (AS-
385), some interested parties have argued that all
data submitted by the Community industry within
the framework of the current proceeding would be
unreliable as a result of the uniform application of
the ‘alloy surcharge' system and it would, therefore,
not be possible to conduct any accurate injury
analysis.

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Surcharge') (1) which stated

These parties based their allegations on the find-
ings set out in a Commission Decision (IV/35.814,
the
‘Alloy
Community producers of stainless steel — flat
products — have 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'.

that

the

fact

that

They acknowledged the
above
Decision related to flat products (as opposed to
long products, such as stainless steel wires), but
they argued that, firstly a concerted practice also
existed for stainless steel wires and, secondly, that
even if such a practice would not be established for
them, the existing illegal practice for flat products
would have a synergy or downstream effect on
stainless steel wires.

Given the possible relevance of these arguments in
the current proceeding, the Commission examined
any possible effects on the reliability of the data
collected.

(25)

As SSW are not produced, for technical reasons,
from flat products, any downstream effect of the
concerted practice found for flat products on SSW
is doubtful. Moreover, no evidence has been found
either that the above concerted practice would have
been applied by suppliers of raw material for SSW.
Futhermore, the producers of flat products and of
SSW are, to a large extent, not identical and the
number of SSW producers is significantly higher
than that of flat steel producers.

In this respect, while the exporting producers
concerned have filed a complaint (IV/E-1/37.271)
with DG IV on 5 October 1998, there has been no
investigation opened by DG IV concerning the
alleged infringement of Article 85 of the EC Treaty
with respect to the product concerned. Indeed, this
complaint is in fact an extension of the complaint
(likewise
concerning stainless
belonging to the category of long products) files
with DG IV on 3 February 1998 (IV/E-1/36.930)
for which, pursuant to Article 6 of Commission
(EC) Regulation 99/63, a letter of rejection of
complaint has been sent to the complainants on 28
October 1998, although a final decision has not yet
been adopted.

steel bright bars

In accordance with the above-mentioned Decision,
the application of an alloy surcharge system could
only be illegal if it were applied in a concerted
manner. However,
investigation has
the current
shown that there is no uniform application of the
alloy surcharge by the Community industry: some

(1) Commission Decision 98/247/ECSC (OJ L 100, 1. 4. 1998).

companies apply it for all their customers or only
the some of them, others do not apply it at all.

Furthermore, it was noted that — when comparing
the sales prices of the members of the Community
industry among themselves — the sales prices for
identical references varied. Finally, even where it is
applied, the alloy surcharge constitutes only a small
percentage in the total price of
the product
concerned.

The Commission therefore concludes that there is
no evidence that the injury data collected be unreli-
able as a result of the application of the ‘alloy
surcharge'.

3. Community consumption

of

consumption

the
the Commission relied

For the purpose of the assessment of the apparent
product
Community
on data
concerned,
concerning the sales volume of
the product
concerned in the Community provided by the co-
operating Community industry and EUROFER.
These data have been added to import
figures
established on the basis of the data submitted by
the co-operating exporting producers from the
country concerned as well as on Eurostat.

(26) During the period 1994 to the investigation period,
the apparent Community consumption of SSW
expressed in tonnes amounted to 17 171 in 1994,
20 045 in 1995, 17 857 in 1996, 20 088 in 1997
and 21 810 during the investigation period. Thus,
product
Community
concerned increased by 27 % between 1994 and
the investigation period.

consumption

the

of

(27)

(28)

4. Volume and market shares of the imports

concerned

The dumped imports
in tonnes developed as
follows: 1 158 in 1994, 1 875 in 1995, 2 847 in
1996, 3 977 in 1997 and 4 415 during the invest-
igation period, which corresponds to an overall
increase of 281 %, representing in the investigation
period nearly 4 times the volume of imports in
1994.

The market shares of imports from Korea have also
significantly and steadily increased as follows: 7 %
in 1994, 9 % in 1995, 16 % in 1996, 20 % in 1997
and 20 % in the investigation period, which cor-
responds to an overall increase of 185 %, over the
period 1994 to the investigation period.

It should be noted that, despite the fact that only
two Korean companies were found to be selling at
dumped prices, the country-wide weighted average

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dumping margin was above the de minimis level,
and their market share was above the level required
under Article 5(7) of the Basic Regulation.

it has started to recover towards the IP (80,5 %), it
did not reach the previous levels.

5. Prices of the imports concerned

(c) Sales volume

(a) Price evolution

(35)

(29)

The average prices of the exporting producers in
ECU per kg have evolved as follows: 4,35 in 1994,
increasing up to 5,02 in 1995, and steadily
decreasing from that time onwards to 4,83 in 1996,
4,66 in 1997 and 4,67 in the investigation period.

(b) Price undercutting

M e t h o d o l o g y

sales of

The development of
the Community
industry remained relatively stable between 1994
and the IP (slightly increasing from 11 312 to
11 884 tonnes), although it reflects to a certain
extent
the above mentioned exceptional market
situation in 1995 (12 511 tonnes) and during the IP
(11 884 tonnes). However, sales did not follow the
expansion of the apparent Community consump-
tion, which increased by 27 % between 1994 and
the
the
Community industry only went up by 5 % during
the same period of time.

investigation period, whilst

sales of

the

sales prices of
For
investigation period,
matching models, both for
the Community
industry and the exporting producers, established
on a customer-delivered basis, have been compared.
The export price at a customer-delivered level has
been obtained by adding to the export CIF values a
and
reasonable percentage
freight costs from the Community border to the
final customer.

covering insurance

The exporting country-wide undercutting margin
has been calculated on the basis of a weighted
average of the undercutting margins found for the
co-operating exporting producers.

(d) Market shares

(36)

The steady decrease of the market share of the
Community industry by 12 percentage points
between 1994 and the investigation period (from
66 % to 54 %) shows that the Community industry
did not benefit in terms of market shares from the
expansion of the Community consumption or from
the exceptional situation of the market in 1995
(with a decreasing market share in 1995 of 62 %
and 58 % in 1996) and during the IP, strongly
suffering from the increase of dumped imports and
not being able to recover its earlier market position.

U n d e r c u t t i n g m a r g i n

The weighted average undercutting margin which
has been established for Korea is 12,1 % (with
individual undercutting margins ranging between
10,6 % and 31,1 %)

(37)

6. Situation of the Community industry

(a) Production

Total production in tonnes of
the Community
industry evolved as follows: 12 664 in 1994, 14 289
in 1995, 11 651 in 1996, 12 915 in 1997 and
14 138 in the investigation period, with an overall
increase of 11 %. Thus, it followed the evolution of
the market, reflecting the exceptional market situ-
ation in 1995, the ensuing decrease and the upward
trend of the market during the investigation period.

(b) Capacity utilisation

(34)

The capacity utilisation rate of the Community
industry reached its peak in 1995 (89,1 %) and has
significantly decreased in 1996 (69,9 %). Although

(e) Prices

originating

in Korea

The average sales prices per kg of the Community
industry increased between 1994 (ECU 5,04), 1995
(ECU 5,78) and 1996 (ECU 5,86). Low-priced
imports
substantially
increased as from 1996 and the majority of the
members of the Communty industry maintained
their prices whilst other followed the low prices of
dumped imports and reduced them. As from 1996
and until the IP, average prices of the Community
industry have substantially decreased (5,21 in 1997
and 5,19 in the investigation period), which indi-
cates that the Community industry has suffered
from price depression. In addition, the Community
industry, as a reaction to the increase of low-priced
imports, had no choice but to stop production and
sales of certain standard product models, priv-
ileging some market niches where prices (but also
and direct
costs of production) were higher
competition from Korean imports was
less
pronounced. Therefore, it can be assumed that the
price decrease would have been even more accentu-
ated if the Community industry had kept on manu-
facturing all product references.

(30)

(31)

(32)

(33)

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(f) Employment

(43)

the
is therefore provisionally concluded that
It
Community industry has suffered material injury.

(38)

(39)

(40)

(41)

The Community industry’s workforce has steadily
decreased as from 1995, when the market situation
the workforce
led to a significant
directly linked to the product concerned within the
Community. Indeed, it increased from 499 in 1994
to 566 in 1995 and went down since then to 521 in
the investigation period.

increase of

(g) Investments

Investments, which had come to a peak in 1995
(4 592 KECU),
significantly decreased in 1996
(1 498 KECU). Although they increased again in
1997 (2 532 KECU and 2 481 KECU during the
investigation period), they did not however reach
the earlier levels.

(h) Profitability

The profitability of the Community industry went
down between 1994 (3,6 %) and the investigation
period (–0,6 %) even though its development
reflected likewise the positive situation of 1995
(8,5 %). The Community industry is
suffering
losses in spite of the above-mentioned improve-
ment in the market situation at the end of 1997
(–0,8 %) and during the investigation period. It
can be assumed that the trend would have been
even worse if the Community industry had kept on
producing and selling those models subject to the
most
from Korean
exports.

aggressive pricing policy

7. Conclusion on injury

the market developments

Between 1994 and the investigation period, the
sales of the Community industry remained rela-
tively stable. Even if they reflected to a certain
extent
in 1995 and
slightly increased towards the investigation period,
following a strong decrease in 1996, they did not
follow the expansion of the Community consump-
tion which substantially increased,
i.e. by 27 %,
from 17 171 tonnes to 21 810 tonnes during the
same period of time. This resulted in a continuous
drop of the Community industry’s market share.

E. CAUSATION

(44)

(45)

1. Effect of the dumped imports

The significant increase of the volume (+281 %)
and of the market shares (from 7 % to 20 %) of the
dumped imports between 1994 and the invest-
igation period as well as the substantial undercut-
ting found (12,1 % on weighted average and
ranging between 10,6 % and 31,1 %) coincided
the
with the deterioration of
Community industry in terms of loss of market
shares, price depression as well as deteriorating
profitability.

the situation of

The market
for SSW within the Community
expanded by 27 % between 1994 and the end of
the investigation period. Nevertheless,
the sales
volume of the Community industry, even though
reflecting to a certain extent the evolution of the
market, only increased by 5 %, not following that
expansion. By contrast, the imports from Korea
considerably increased (+281 %) over the same
period, and its market share considerably increased
by 122 % between 1995 and 1997. This coincided
with the downward trend of the situation of the
Community industry, which lost market shares and
had to lower both its investments and its prices as
from 1996, resulting in financial losses in 1997.

tried to maintain their

(46) When faced with low-priced imports originating in
Korea, in 1996, the majority of the Community
sales prices,
producers
whereas a few others reduced them. Both strategies
resulted in a negative impact on profitability either
directly (lower prices) or indirectly (high prices led
to lower sales volume resulting in higher produc-
tion costs per ton). As from 1996, all Community
producers substantially lowered their sales prices,
which had a further negative impact on their prof-
itability, even though they tried to concentrate on
certain market niches to avoid being affected even
the dumped
more strongly by the effects of
imports. This clearly shows the price sensitivity of
the market and the important impact of the price
undercutting practised by the Korean producers.

(42) Despite a certain increase of the production of the
Community industry and its relatively stable sales
volume and prices, its profitability went down to
losses between 1994 and the investigation period,
not benefiting from the expanding market situation
during that time.

2. Effect of other factors

(47)

In accordance with Article 3(7) of the Basic Regula-
tion,
the Commission has examined whether
factors other than the dumped imports might have

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Official Journal of the European Communities

24. 3. 1999

had an effect on the situation of the Community
industry, with particular regard to the role of other
Community producers not co-operating in the
investigation and of imports from other countries.

(51)

(a) Other Community producers

(c) Other

to

the

The Commission also examined whether other
than the above-mentioned might have
factors
the
contributed
Community industry, in particular, a contraction in
demand or
in the patterns of
consumption, developments in technology and the
export performance
the
Community industry.

and productivity of

changes

suffered

injury

the

by

(48)

(49)

(50)

The exporting producers stated that in view of the
sales volumes and market shares of the other non-
complaining Community producers, these produ-
cers might have contributed to the injury suffered
by the Community industry. However,
in this
respect, it was noted that the sales volume of these
other Community producers remained more or less
stable between 1994 and the investigation period
(and actually decreased from 1995 to the invest-
igation period by 21 %). In addition, their market
share substantially decreased,
from 23 % to
16 % from 1994 to the investigation period. This
clearly shows that they did not benefit from the
expansion of the Community market either. As to
their sales prices, no information is available as to
the existence of any price undercutting of
the
Community industry’s sales prices, although taking
into account the transparency of the market for
SSW,
the non-co-operating
Community producers are likely to have followed a
similar trend than the Community industry. The
argument should therefore be rejected.

is concluded that

i.e.

it

(b) Third countries’ imports

The exporting producers also alleged that imports
from third countries,
in particular Switzerland,
might have contributed to the injury suffered by
the Community industry.

Imports
from Switzerland remained stable in
volume and their market share was also stable
between 1994 and the
investigation period,
the total Community
accounting for 3 % of
consumption during that period, whereas Korean
imports went up from 7 % to 20 % during the
same period. As to prices, no indication of any
price undercutting of the Community industry’s
sales prices was found in the course of the invest-
igation. As
are
concerned, for individual countries, sales volumes
and small market shares either remained stable
slightly
during the same period of
increased and there is no indication of price under-
cutting of the Community industry’s sales prices
either. The argument should therefore be rejected.

third countries

as other

time or

far

(52) As to the development of demand and the changes
in the pattern of consumption, it has been previ-
for SSW has
ously established that
expanded between 1994 and the investigation
period and that the Community industry did not
benefit from this expansion, whilst the exporting
producers substantially increased their sales volume
and market share.

the market

(53)

(54)

(55)

(56)

In relation to the developments in technology and
the productivity of the Community industry, it has
been established that the Community industry has
tried to maintain its production and investment
levels between 1994 and the investigation period in
order not
to lose competitiveness. Its level of
exports has been stable over the period considered
and the Community industry’s sales have proved to
be more profitable in export markets than on the
Community market.

Thus, it can be concluded that other factors than
dumped imports were not such as to break the
causal link between the dumped imports and the
material
the Community
suffered by
industry therefrom.

injury

3. Conclusion on causation

In view of the above, it is provisionally concluded
that dumped imports from Korea have caused
material injury to the Community industry.

the
This does not prejudge the conclusions of
Commission
anti-subsidy
the
proceeding against imports of stainless steel wire
with a diameter of less than 1 mm originating in
India and Korea.

parallel

in

F. COMMUNITY INTEREST

1. General comment

(57)

For the investigation of Community interest, the
Commission examined two scenarios, i.e. the most
likely effects in the event that anti-dumping meas-
ures were imposed, and the most likely effects in
the event that such measures were not imposed. In

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Official Journal of the European Communities

L 79/9

that anti-dumping measures,

this context, particular consideration was given to
the effect
if any,
would have on the Community industry, on
suppliers of the raw material and on users of the
product concerned.

neither employment nor significant
were directly related to the product concerned.

investment

(63)

This justifies the provisional conclusion that anti-
dumping measures, if any, will most likely not have
a decisive impact on the unrelated importers.

2. Community

industry

and

other

Community producers

4. Suppliers

(a) General

(58)

The Community industry has proven to be a struc-
turally viable industry, able to adapt its product
range to the changing competitive conditions on
the market and to concentrate on market niches
where there was less competition from dumped
imports.

(59) Despite this structurally viable background, it can
however not be excluded that this industry would
reduce its manufacturing activities for the product
concerned in the Community if no measures
against dumping were taken. This conclusion is
justified in view of the duration of the deteriorating
profitability situation suffered due to dumped
imports.
the price-
the dumped imports will
depressive effect of
continue to frustrate all efforts of the Community
industry to regain a satisfactory margin of profit-
ability.

Indeed, without measures,

(60)

(61)

(b) Employment

The situation of
the Community industry has
steadily deteriorated since 1995. Should this trend
continue, the Community industry might be forced
to stop production in the Community, and around
500 jobs directly linked to the product concerned
would be endangered in the Community. On the
the imposition of measures would
other hand,
enable this
industry to maintain and further
develop its activities in the Community.

(c) R&D

The product concerned requires continuous invest-
ments in R&D, mainly related to the production
process, i.e. to the development of environmentally
friendly and energy-saving manufacturing techno-
logies. In this respect, the Community industry had
to reduce substantially its investments and this
negative trend will continue if no measures are
taken.

(64)

The following 6 suppliers co-operated in the
investigation and the data they submitted were
verified by the Commission:

— Acciaierie Valbruna s.r.l, Vicenza, Italy

— Acciaierie Bolzano s.r.l, Bolzano, Italy

— Cogne Acciai Speciali, Aosta, Italy

— Fagersta Stainless AB, Fagersta, Sweden

— Roldan SA, Madrid, Spain

— Ugine Savoie Imphy, Ugine, France

(65)

Two other replies were received from suppliers of
the Community industry, Avesta Sheffield Ltd
(Sheffield, United Kingdom) and Krupp Edelstahl-
profile (Siegen, Germany). These suppliers raised
the argument that they suffered both from direct
competition from third countries’ imports of wire
rod, which had substantially increased during the
last years, and from the upstream effect of the
dumped imports of the product concerned. Indeed,
since competition for stainless steel wires was
fierce, the Community industry had tried to find
cheaper suppliers for the raw material, sourcing as a
consequence in countries outside the Community,
i.e. Korea, India and Taiwan and had exerted price
pressure on its suppliers in order to secure low raw
material prices.

(66) Anti-dumping duties on the product concerned
would help the Community suppliers of stainless
steel wire rod to improve their deteriorating
economic situation and to regain profitability,
which would enable them to carry out the neces-
sary investments.

5. Users

(67) Users are wires processors whose semi-finished
products are used afterwards in ultra-fine applica-
tions,
for
certain domstic
medical purposes, etc. Out of the 60 questionnaires
sent, only four replies were received:

appliances,

filters,

3. Unrelated importers

(62)

Limited co-operation was obtained from unrelated
importers of
concerned in the
co-operating companies,
Community. For

the product
the

— Bever GmbH, Kirchhunden, Germany

— Tucai SA, Barcelona, Spain

— Tubiflex, Orbassano, Italy

— Max Rhodius GmbH, Weissenburg, Germany

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Official Journal of the European Communities

24. 3. 1999

(68)

The limited co-operation justifies the provisional
conclusion that anti-dumping duties, if any, will
most likely not have a decisive impact on the user
industry, either because this raw material is not a
significant cost factor for them or because their
production of downstream products relating to
SSW only accounts for a small proportion of their
total production. Furthermore, it is expected that,
given the relatively moderate duty rates proposed
for the exporting producers concerned, the high
number of competing producers located in the
Community, and the existence of imports from
other third countries, the measures are not likely to
lead to an overall major price increase for SSW in
the Community.

6. Competition and trade distorting effects

(69) As to trade effects of possible anti-dumping duties.
although the product concerned is being exported
by the Community industry to other third coun-
tries,
they are not exported to the country
concerned due, amongst others, to the high import
duties existing for SSW. Furthermore, due to the
current
the Community
market
the few open markets where
demand for steel remains strong.

international
is one of

situation,

(70) With respect to the effects of possible measures on
competition in the Community, some interested
parties have argued that duties would lead to the
producers
disappearance
concerned from the Community market,
thus
considerably weakening competition, and to an
increase of the prices for SSW.

exporting

the

of

(71)

(72)

In view of the above-mentioned market position of
the exporting producers, the relatively low duties
proposed, the large number of producers in the
Community as well as the transparency of
the
market,
it can be concluded that Community
producers will continue to have a considerable
number of strong competitors on the Community
market. Thus, users will also in future benefit from
the choice of different suppliers of the product
concerned.

Finally, certain interested parties have argued that
it could not be in the interest of the Community to
impose measures taking into account the afore-
mentioned alleged practices in the calculation of
the alloy surcharge. In this respect reference is
made to the comments made above under recitals
(24) et subseq.

7. Conclusion on Community interest

(73) Given the above reasons, it is provisionally consid-
ered that there are no compelling reasons against
the imposition of anti-dumping duties.

G. PROVISIONAL ANTI-DUMPING MEASURES

1. Injury elimination level

the conclusions on dumping,
(74) On the basis of
injury, causal
link and Community interest, the
Commission considers it necessary to adopt provi-
sional anti-dumping duties
further
injury being caused to the Community by the
dumped imports.

to prevent

(75)

the Commission took account of

For the purpose of determining the level of these
the
duties,
dumping margins found and of the amount of duty
necessary to eliminate the injury sustained by the
Community industry. 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 recital
(30) et
subseq. with the non-injurious price of different
references or models by the Community industry
on the Community market. The non-injurious
price has been obtained by adding to the sales price
of the Community industry its average actual loss
and by further adding a profit margin of 5 %. This
profit margin corresponds to what has been found
as a minimum necessary in earlier cases for this
type of industry. Any difference resulting from this
comparison was then expressed as a percentage of
the total CIF import value.

2. Provisional measures

(76)

In the light of the foregoing, it is considered that
anti-dumping duty should be
the provisional
imposed at the level of the dumping margins found
but should not be higher than the injury margins,
in accordance with Aricle 7(2) of the Basic Regula-
tion.

(77) As far as the parallel anti-subsidy proceeding is
concerned it should be noted that, in accordance
with Article 12(1) of Council Regulation (EC) No
2026/97, the countervailing duty rate should cor-
respond to the amount of subsidy unless the injury
margin is lower.

(78)

In accordance with Article 24(1) of the above Regu-
lation (EC) No 2026/97 and Article 14(1) of the
Basic Regulation, no product shall be subject to
both anti-dumping and countervailing duties for

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Official Journal of the European Communities

L 79/11

the purposes of dealing with one and the same
situation arising from dumping or from export
subsidization. As anti-dumping duties should be
imposed on imports of the product in question it is
necessary to determine whether, and to what
extent, the subsidy and the dumping margins arise
from the same situation.

As far as any non-cooperating exporting producer
is concerned, in view of the high level of co-opera-
tion found,
the highest company specific anti-
dumping duty found should be applied. This was
found to be 17,0 %.

(79)

In the case in question several of
the subsidy
schemes investigated have been found to constitute
export subsidies within the meaning of Article
3(4)(a) of the above Regulation (EC) No 2026/97. As
such, the subsidies can only affect the export prices
of the Korean exporting producers, thus leading to
increased margins of dumping. In other words, the
dumping margins established are wholly or partly
due to the existence of export subsidies. 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. Therefore, the anti-
dumping duties need to be adjusted to reflect the
actual dumping margins remaining after the im-
position of the countervailing duties offsetting the
effect of the export subsidies.

(80) On the basis of the above, the proposed provisional
duty rates, expressed as a percentage of the CIF
Community border price, customs duty unpaid,
taking into account the results of the anti-subsidy
proceeding, are as follows:

Company

AD duty %

Dae Sung Rope Mfg Co Ltd
Korea Sangsa Co Ltd/Myung Jin Co Ltd
Korea Welding Electrode
Kowel Special Steel Wire Co
SeAH Metal Products Co Ltd
Shine Metal Products

0
0
0
17,0
0
0

H. FINAL PROVISION

(81)

In the interests of sound administration, a period
should be fixed within which the interested parties
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 provisional and may have to be
reconsidered for the purposes of any definitive
duty,

HAS ADOPTED THIS REGULATION:

Article 1

1.
A provisional anti-dumping duty is hereby imposed
on imports of wire of stainless steel with a diameter of
less than 1 mm, containing by weight 2,5 % or more of
nickel, excluding wire containing by weight 28 % or
more but no more than 31 % of nickel and 20 % or
more but not more than 22 % of chromium,
falling
within CN code 7223 00 19 (TARIC code 7223 00 1910)
and originating in Korea.

2.
This anti-dumping duty has been adjusted to reflect
the actual dumping margins remaining after the imposi-
tion of the countervailing duties as provisionally deter-
mined in Commission Regulation (EC) No 619/1999 (1).

The rate of duty applicable to the net

3.
Community-frontier price, before duty,
follows:

free-at-
shall be as

Manufacturers

Rate of duty
(%)

Taric additional
code

Dae Sung Rope Mfg Co. Ltd, Pusan
Korea Sangsa Co. Ltd, Seoul/Pusan
Korea Welding Electrode Co. Ltd, Seoul
Kowel Special Steel Wire Co.
SeAH Metal Products Co. Ltd, Chang Won
Shine Metal Co. Ltd, Pusan i.
All other Korean companies

0
0
0
17,0
0
0
17,0

A015
A016
A013
A018
A019
A014
A999

(1) See page 60 of this Official Journal.

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Official Journal of the European Communities

24. 3. 1999

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

4.
apply.

5.
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

Without prejudice to Article 20 of Regulation (EC) No 384/96, the interested parties may
make known their views in writing and apply to be heard orally by the Commission within
15 days of the date of entry into force of this Regulation.

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

This Regulation shall enter into force on the day following that of 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, 23 March 1999.

For the Commission

Leon BRITTAN

Vice-President