Commission Regulation (EC) No 1802/1999 of 17 August 1999 imposing a provisional anti-dumping duty on imports of certain seamless pipes and tubes originating in Croatia and Ukraine
Date: 1999-08-17
Institutions: European Commission
Subjects: Croatia, Ukraine, anti-dumping duty, import, piping, tube

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Official Journal of the European Communities

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COMMISSION REGULATION (EC) No 1802/1999

of 17 August 1999

imposing a provisional anti-dumping duty on imports of certain seamless pipes and tubes origin-
ating in Croatia and Ukraine

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(a) Community producers

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

After consulting the Advisory Committee,

Whereas:

(1)

(2)

(3)

(4)

(5)

A. PROCEDURE

On 19 November 1998, the Commission announced, by
a notice published in the Official Journal of the European
Communities (3),
an anti-dumping
initiation of
proceeding with regard to imports into the Community
of certain seamless pipes and tubes originating in
Croatia and Ukraine.

the

The proceeding was initiated following a complaint
lodged in October 1998 by the ‘Defence Committee of
the Seamless Steel Tube Industry of the European Union’
on behalf of Community producers representing 100 %
of the Community production of certain seamless pipes
and tubes.

The Commission officially advised the complainant
Community producers, exporting producers and im-
porters, suppliers and users known to be concerned as
well as associations concerned and representatives of the
exporting countries, of the opening of the proceeding.
Interested parties were given an opportunity to make
their views known in writing and to request a hearing
within the time limit set in the notice of initiation.

to all parties
The Commission sent questionnaires
known to be concerned. Replies were received from 11
Community producers, four exporting producers in the
countries
in the
Community.

concerned and eight

importers

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

(1) OJ L 56, 6.3.1996, p. 1.
(2) OJ L 128, 30.4.1998, p. 18.
(3) OJ C 353, 19.11.1998, p. 13.

— Benteler AG, Paderborn, Germany,
— Dalmine SpA., Dalmine, Italy,
— ESW Röhrenwerke GmbH, Eschweiler, Germany,
— Ovako Steel AB Tube Division, Hofors, Sweden,
— Productos Tubulares SA, Valle de Trapaga, Spain,
— Timken Desford Ltd, Leicester, United Kingdom,
— Tubos Reunidos SA, Amurrio, Spain,
— Vallourec & Mannesmann Deutschland GmbH,

Mülheim an der Ruhr, Germany,

— Vallourec & Mannesmann France SA, Boulogne

Billancourt, France,

— Voest Alpine Kindberg GmbH, Austria.

(b) Exporting producers

— Zeljezara Sisak d.d., Sisak, Croatia.

(c) Related importer in the Community

— SEPCO GmbH, Krefeld, Germany.

The dumping investigation covered the period from 1
November 1997 until 31 October 1998 (hereinafter
referred to as the ‘investigation period’ or ‘IP’). The
examination of injury covered the period from January
1997 to the end of the IP (hereinafter referred to as ‘the
period considered’).

B. PRODUCT UNDER CONSIDERATION AND LIKE

PRODUCT

1. Product under consideration

an external diameter not

The product under consideration is: seamless pipes, of
iron or non-alloy steel, of a kind used for oil and gas
pipelines, of
exceeding
406,4 mm (currently classifiable under CN codes
7304 10 10 and 7304 10 30); seamless tubes of circular
cross-section, of iron or non-alloy steel, cold-drawn or
cold-rolled
classifiable under CN code
7304 31 99); other tubes of circular cross-section, of
iron or non-alloy steel, of an external diameter not
exceeding 406,4 mm (currently classifiable under CN
codes 7304 39 91 and 7304 39 93), hereinafter referred
to as ‘seamless tubes’.

(currently

Although there are some technical differences (e.g.
standards, steel grades) between the three categories of
seamless tubes, these are not such as to establish clear
dividing lines since seamless tubes classified under one
category can be, and sometimes are, used for the same
applications as seamless tubes classified under a different
one. In addition, within each category, seamless tubes
come in a wide range of specifications but are all con-
sidered to be similar or identical in their essential phys-
ical and technical characteristics and in their end uses.

(6)

(7)

(8)

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(9)

The Ukrainian exporting producers argued that there
were in fact two separate products — line pipes, and
commodity tubes, the former being produced to higher
standards and sold directly to end users rather than to
traders. However, the Commission found that the basic
physical and technical characteristics were the same.
Also it was found that the alleged distinction was not
observed in practice since line pipes are often sold as
commodity tubes and that no clear dividing lines exist
between these products.

(10)

In line with the position previously adopted by the
Council (1), therefore, the Commission found that all
seamless tubes falling under the aforementioned CN
for the
codes are to be considered as one product
purposes of this proceeding.

2. Like product

(11)

(12)

The products exported to the Community from the two
countries concerned, those manufactured and sold in the
Community by the Community industry as well as those
domestically sold on the Croatian market were found to
have the same basic physical and technical characteris-
tics and the same uses and are therefore to be considered
as like products within the meaning of Article 1(4) of
Regulation (EC) No 384/96 (hereinafter referred to as
‘the basic Regulation’).

The Ukrainian exporting producers argued that the tubes
they produced to GOST and TU standards, i.e. tubes of
lower quality and needing fewer testing requirements,
were different
from the products produced by the
Community industry which are produced to DIN or
ASTM standards. The Commission rejected this assertion
because quality standards as such cannot be taken into
consideration in the determination of the like product.
Furthermore the Commission found that these products
had the same basic physical and technical characteristics
and the same end use as the seamless tubes produced by
the Community industry and exported by the other
country concerned in the proceeding.

C. DUMPING

1. Croatia

a) Normal value

(13)

In order to establish normal value,
it was first deter-
mined for the only exporting producer whether the total
volume of domestic sales of the product concerned was
representative in accordance with Article 2(2) of the
i.e. whether these sales represented
basic Regulation,
more than 5 % of
the product
concerned exported to the Community.

the sales volume of

(1) OJ L 120, 15.5.1993, p. 42.

It was then examined whether, for each product type
exported by the Croatian company, domestic sales of the
corresponding product type constituted 5 % or more of
the sales volume of
the same type exported to the
Community.

For those products meeting the 5 % test, it was estab-
lished 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,
the
normal value was established on the basis of
weighted average prices actually paid for all domestic
sales. Where, per product type, 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 profitable sales.

For those product types where the volume of domestic
sales was lower than 5 % of the volume exported to the
Community, or where there were insufficient domestic
sales made in the ordinary course of trade, normal value
was constructed on the basis of the cost of manufac-
turing incurred by the exporting producer concerned for
the exported product type in question plus a reasonable
amount for selling, general and administrative (SG & A)
costs and for profits in accordance with Article 2(3) and
(6) of the basic Regulation. The SG & A costs were based
on representative domestic sales and the profit margin
was based on representative domestic sales made in the
ordinary course of trade.

b) Export price

(14)

The export prices were established on the basis of prices
paid or payable for the product concerned when sold to
the first independent customer in the Community in
accordance with Article 2(8) of the basic Regulation.

c) Comparison

(15)

For the purposes of a fair comparison between the
normal value and the export price at an ex-works level,
due allowance in the form of adjustments was made for
differences which were claimed, and demonstrated, to
affect prices and price comparability. These adjustments
were made, where appropriate,
in accordance with
Article 2(10) of the basic Regulation, in respect of level
of trade, transport and credit costs.

(16)

The adjustment in respect of level of trade was made
because it was established that
the export price (to
traders) was at a different level of trade to normal value
(traders and users), and that this difference had affected
price comparability.

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d) Dumping margin

the dumping margin for

In accordance with Article 2(11) and (12) of the basic
Regulation,
the exporting
producer concerned was established on the basis of a
comparison of weighted average normal values with
weighted average export prices.

(24)

(17)

(18)

(19)

(20)

(21)

(22)

(23)

Expressed as a percentage of the cif Community frontier
the provisional dumping margin for the only
price,
Croatian exporting producer is 40,8 %.

Since the sole known exporting producer accounted for
all Croatian exports of the product concerned to the
Community, the Commission considers that the residual
dumping margin should be set at the same level.

2. Ukraine

a) Normal value

initiation of

the proceeding,

In the notice of
the
Commission proposed Brazil or the United States of
America as an appropriate market economy third
country for the purpose of establishing normal value.
Objections
to both countries were raised by the
Ukrainian exporting producers within the time limit
specified in the notice of
initiation. With regard to
Brazil, it was argued, inter alia, that the Brazilian market
was dominated by one producer and that this had an
impact on Brazilian prices. With regard to the United
States of America,
it was claimed that access to raw
materials was poor, which raised the costs of domestic
the product
producers,
concerned to the Community were not made in repres-
entative quantities, which signified a lack of competitive-
ness. Wages in the Ukraine and in the United States of
America would not be comparable either. The Czech
Republic was
suggested as an alternative analogue
country.

exports of

and that

the

It was concluded that the objections raised against the
choice of Brazil were justified. As for the United States
of America, it could not be used as an analogue country
either since all eight exporters in the United States of
America listed in the complaint refused to cooperate.
then proposed using a privately
The complainants
compiled report containing information on the sales
prices of the United States producers in order to estab-
lish normal value. This suggestion had to be rejected
since the information was not verifiable.

Three known Czech producers of pipes and tubes were
then contacted in order to ask for their cooperation, a
proposal they all turned down.

Croatia, an exporting country also concerned by this
investigation, was then proposed. The complainants as
well as
initially
the Ukrainian exporting producers
argued against Croatia on the grounds that Croatian
production capacity was below 10 % of Ukrainian

capacity and that the Croatian products did not fully
cover the size range of the Ukrainian exports.

The Commission however, after careful consideration of
all relevant factors, came to the conclusion that Croatia
could be used as a reasonable alternative. This was
substantiated by the fact that the volume of Croatian
domestic sales of the product concerned was repres-
entative of Ukrainian exports to the Community during
the IP. Croatia is also importing the product concerned
as well as exporting it. Finally, the capacity utilisation
rate of the Croatian tube company is similar to the
weighted average capacity utilisation rate of the three
cooperating Ukrainian exporting producers.

(25)

Parties to the investigation were informed that
the
Commission envisaged selecting Croatia and were given
the opportunity to comment. No comments were
received within the time limit set.

(26) Normal value was thus established on the basis of the
prices and costs of the Croatian producer for products
comparable to those sold by the Ukrainian exporting
producers to the Community, using the methodology
described at recital 13.

b) Export price

(27)

For one exporting producer, after the on-the-spot veri-
fication at the premises of one of its related importers in
the Community, the information submitted was found
not to be reliable. The export sales of this exporting
producer were therefore not taken into consideration for
the determination of the export price. For the two other
Ukrainian exporting producers, all exports were taken
into consideration for the determination of the export
price.

(28)

The export price was then established in accordance
with Article 2(8) of the basic Regulation, i.e. on the basis
of the prices actually paid or payable by independent
customers in the Community.

c) Comparison

(29)

(30)

It was found that there was no domestic production of
cold-drawn seamless tubes in Croatia. However, since
Ukrainian exports of this category to the Community
only represented 10 % of total Ukrainian exports in the
IP, it was considered reasonable to exclude them from
the calculations.

For the purpose of a fair comparison, due allowance in
the form of adjustments was made for differences which
were claimed, and demonstrated, to affect price compar-
ability. These adjustments were made, where appro-
priate,
in accordance with Article 2(10) of the basic
Regulation,

in respect of transport.

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(31) Adjustments for physical characteristics were claimed by
two Ukrainian exporting producers, to account for the
difference between Ukrainian tubes produced in accord-
ance with GOST and TU standards and standards such
as DIN and ASTM, which are commonly used by the
Community industry. GOST and TU standard tubes were
alleged to be of lower quality and to be subjected to less
rigorous testing which meant that they were sold at a
discount on the Community market.

The Commission, however, considered that the argu-
ments presented by the Ukrainian exporting producers
were not substantiated and that further information on
this claim was needed. The Commission has therefore
rejected this claim for the purpose of the provisional
determination.

d) Dumping margin

(32) On the basis of a comparison of weighted average
normal values with weighted average export prices, a
country-wide dumping margin was
established in
accordance with Article 2(11) and (12) of the basic
Regulation.

(33)

Expressed as a percentage of the cif Community frontier
price, the provisional dumping margin for all Ukrainian
companies is 123,7 %.

(37)

(38)

(39)

(40)

D. INJURY

1. Definition of the Community industry

(41)

a) Community production

fore considered not to be cooperating in the framework
of the present investigation.

The remaining 10 Community producers are Voest
Alpine Kindberg (Austria), Vallourec & Mannesmann
France (France), Benteler AG (Germany), ESW Röhren-
werke GmbH (Germany), Vallourec & Mannesmann
Deutschland GmbH (Germany), Dalmine SpA.
(Italy),
Productos Tubulares SA (Spain), Tubos Reunidos SA
(Spain), Ovako Steel AB Tube Division (Sweden) and
Timken Desford Steel Ltd (United Kingdom).

producers

accounted

These
total
Community production in the IP and thus constituted a
major proportion of Community production pursuant to
Article 5(4) of the basic Regulation. These companies are
hereinafter referred to as ‘the Community industry’.

94 % of

for

2. Preliminary remarks

from Croatia,

For the purposes of the injury and causation analysis,
the Commission has taken into account the fact that a
previous investigation concerning imports of seamless
tubes
the Czech Republic, Hungary,
Poland, Romania, Russia and the Slovak Republic was
concluded by Council Regulation (EC) No 2320/97 (1)
which imposed anti-dumping measures on these coun-
tries.

Since, for the period from 1995 to August 1996, the
previous investigation had established that imports of
seamless tubes originating in Croatia had not caused
material injury to the Community industry, it was not
considered appropriate to reanalyse the impact of
imports
the
countries
Community industry during this period.

from the

concerned

on

It was therefore concluded that for the purposes of
analysing injury and causation in the present proceeding,
the Commission would only consider data relating to
the period January 1997 to October 1998 (i.e. the end
of the IP).

(34)

The output of all companies producing seamless tubes
in the Community during-the IP has been taken into
account for the determination of Community produc-
tion. These companies are hereinafter referred to as
‘Community producers’.

(42)

Furthermore, it is to be noted that the situation of the
Community industry described below has been assessed
in the light of an expected improvement in its situation
following the imposition of the abovementioned anti-
dumping measures.

3. Community consumption

b) Community industry

(43)

(35)

It is to be noted that the complaint was lodged on behalf
of 12 Community producers of seamless tubes. These 12
producers accounted for the total Community produc-
tion at the time of the investigation.

(36) Only 10 out of the 12 complaining Community produ-
cers responded to the Commission questionnaire. As
concerns the remaining two producers, one did not
reply to the questionnaire at all, while the other only
replied in part. Both Community producers were there-

(volume of

Community consumption was based on the question-
naire replies
the Community
industry), Eurostat information (volume of imports) and
the
non-cooperating
information
Community producers'

level of sales.

sales of

available

for

(44) On the above basis, the apparent Community consump-
tion increased over the period going from 1 087 469
tonnes in 1997 to 1 195 329 tonnes in the IP, which
represents an overall

increase of 10 %.

(1) OJ L 322, 25.11.1997, p. 1.

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4. Imports into the Community from the countries

i i ) P r i c e u n d e r c u t t i n g

concerned

Croatia

a) Cumulation

(51)

(45)

The Commission examined whether imports of seamless
tubes originating in Croatia and Ukraine should be
assessed cumulatively in accordance with Article 3(4) of
the basic Regulation.

(46) As stated above, the dumping margins found for Croatia
and Ukraine were 40,8 % and 123,7 % respectively and
therefore both are well above the de minimis
level.
Import volumes from Croatia and Ukraine are compar-
able in absolute terms and were found to be significant
for both countries. Imports from Croatia amounted to
2,6 % of Community consumption in the IP while
imports
to 11,2 % of
Community consumption in the same period.

from Ukraine

amounted

(47) As regards the conditions of competition, the invest-
igation has found that during the IP seamless tubes
imported from Croatia and Ukraine were alike in all
their basic physical and technical characteristics. Further-
more seamless tubes from Croatia and Ukraine were
marketed in the Community through comparable sales
channels under
similar commercial conditions. The
imported seamless tubes were therefore considered to
compete with each other and with the seamless tubes
produced and sold in the Community.

(48)

In the light of the above, the Commission considered
that all the criteria set out in Article 3(4) of the basic
Regulation were met. The imports from Croatia and
Ukraine were therefore examined cumulatively.

b) Volume and market share of dumped imports

(49)

Imports from Croatia and Ukraine increased significantly
going from 83 783 tonnes in 1997 to 164 403 tonnes
in the IP. The corresponding market share was 7,7 % in
1997 and 13,8 % in the IP.

c) Prices of dumped imports

i ) E v o l u t i o n o f p r i c e s

(50)

The average unit prices of the seamless tubes imported
from Croatia and sold on the Community market (based
on Eurostat), expressed in ECU/kg, were 0,50 in 1997
and 0,51 in the IP. The average unit prices of seamless
tubes imported from the Ukraine and sold on the
Community market (based on Eurostat), expressed in
ECU/kg, were 0,37 in 1997 and 0,38 in the IP.

For the purpose of analysing price undercutting, in view
of the wide range of seamless tubes investigated, the
Commission classified the seamless tubes sold by the
Community industry and those imported from Croatia
according to two criteria: firstly, according to groups of
outside diameter and wall
thickness, and secondly
according to three categories, i.e. line pipes, cold-drawn
tubes and commercial tubes. A comparison was then
made between the weighted average selling prices of
Croatian seamless tubes per group and category, and the
weighted average sales prices of the Community indus-
try's seamless tubes in the same group and category.
Price comparisons were made on the basis of the sales to
the first independent customer in the Community. In
order
the
comparability,
Community industry and those of the imported prod-
ucts were free of all rebates and taxes and where appro-
priate, adjusted in terms of transport cost to ex-works or
cif Community frontier level respectively. In addition,
the import prices were adjusted to include customs
clearance and post-importation costs based on informa-
tion provided by the importers.

the prices of

to ensure

Ukraine

(52) As concerns the analysis of price undercutting regarding
sales of Ukrainian tubes, it should be mentioned that the
parties concerned did not provide information on
outside diameter and wall thickness that was sufficient
to allow the Commission to group the products in the
same manner as in the case of imports originating in
Croatia. In the absence of the abovementioned data the
Commission conducted a price undercutting calculation
on the basis of
i.e. by
selling prices of
comparing the weighted average
Ukrainian seamless tubes per CN code with the weighted
average sales prices of the Community industry's seam-
less tubes in the same CN code.

the information provided,

(53)

The price comparisons concerning Ukrainian tubes were
limited to sales to the first independent customer in the
Community made by the two exporting producers
whose sales were used for the establishment of
the
Ukrainian export price (see recital 27). The prices of the
Community industry were free of all rebates and taxes
and where appropriate, adjusted in terms of transport
cost to ex-works level. The import prices were adjusted
to include customs clearance and post-importation costs
based on information provided by the importers.

(54)

The results of the comparison showed margins of under-
cutting for both countries concerned. The weighted
average price undercutting margins expressed as a
percentage of the Community industry's prices were as
follows:

— Croatia: 19,7 %,

— Ukraine: 32,7 %.

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5. Situation of the Community industry

a) Production, capacity and capacity utilisation

to make a reasonable profit, to recover from the losses
incurred in previous years and to ensure its long-term
viability.

(55)

of

Production
industry went
from 971 019 tonnes in 1997 to 1 021 869 tonnes in
the IP.

Community

the

(56) Given that the machinery used in the production of the
product concerned is the same as that used for the
production of a wide variety of other seamless tubes not
at issue in the current proceeding (e.g. precision tubes,
stainless steel
tubes and tubes exceeding 406,4 mm
it was not considered possible to establish
diameter),
product specific capacity and capacity utilisation figures.

(57)

total

capacity of

The figures for capacity and utilisation have been calcu-
the
the
lated on the basis of
Community industry for all products produced on the
same machinery and then allocated on the basis of the
production of the product concerned. In this respect
production capacity went from 1 329 450 tonnes in
1997 to 1 306 905 tonnes in the IP. The capacity utili-
sation rate went from 73 % in 1997 to 78 % in the IP.

f) Investments

(63)

Investments (expressed in ECU thousand),
increased
going from 23 684 in 1997 to 25 020 in the IP. Invest-
ments were found mostly to be in replacement ma-
chinery.

g) Employment

(64)

Employment in the Community industry fell from 4 012
employees in 1997 to 3 927 employees in the IP.

h) Productivity

(65)

the
Productivity (volume produced per employee) of
Community industry increased over the period con-
sidered (an increase of 8 % was found between 1997 and
the IP).

b) Stocks

(58)

It is to be noted that the Community industry generally
produces the product concerned to order, consequently
the level of stocks held by the Community industry was
found not to be relevant in the assessment of the situa-
tion of the Community industry.

(66)

c) Volume of sales and market share

(59)

(60)

Sales of the Community industry increased overall by
10 % going from 671 390 tonnes in 1997 to 739 142
tonnes in the IP.

The market share held by the Community industry
remained stable going from 61,7 % in 1997 to 61,8 % in
the IP.

d) Prices

(61) On average, unit prices of the product concerned sold
by the Community industry on the Community market,
expressed in ECU/kg, were 0,62 in 1997 and 0,65
during the IP, corresponding to an increase of 4,8 %.

e) Profitability

(62)

The Community industry experienced financial diffi-
culties related to its sales of the like product during the
period under consideration. In 1997 it incurred losses
averaging – 2,4 %. In the IP the Community industry
improved its profitability reaching the break-even point
(+ 0,4 %). This level of profitability is nevertheless insuf-
ficient to generate the level of earnings that would be
required by the Community industry to cover its costs,

(67)

(68)

6. Conclusion on injury

It is to be noted that from 1997 to the IP, although the
in profit-
Community industry saw an improvement
ability, going from a loss-making situation in 1997
(– 2,4 %) to a situation of break-even in the IP (+ 0,4 %)
this level of profitability was considered to be largely
insufficient to enable the Community industry to ensure
the Community
its long-term viability. Furthermore,
industry's market share remained stable, showing that it
was unable to regain previously lost market share as had
been expected given the imposition of anti-dumping
measures on imports of the product concerned origin-
ating in the Czech Republic, Hungary, Poland, Romania,
Russia and the Slovak Republic in November 1997.

is

therefore provisionally

It
the
Community industry has suffered material injury within
the meaning of Article 3 of the basic Regulation.

concluded

that

E. CAUSATION

1. Effect of the dumped imports

It is to be noted that in a price sensitive market, such as
is the case for seamless tubes, price undercutting of the
magnitude found (between 19,7 and 32,7 %) has an
immediate and significant impact. The high volume of
imports from Croatia and Ukraine (164 403 tonnes in
the
imports
(ECU/kg 0,40 on average in the IP) which significantly
undercut those of the Community industry coincided
with the Community industry's poor financial results
and the lack of improvement in its market position.

low prices of

these

and

the

IP)

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(69)

This should be seen in the light of the imposition of
anti-dumping measures on imports of
the product
concerned originating in the Czech Republic, Hungary,
Poland, Romania, Russia and the Slovak Republic,
following which their cumulated market share decreased
from 19 % in 1997 to 14,8 % in the IP and the value of
these imports increased (going from ECU/kg 0,44 in
1997 to ECU/kg 0,47 in the IP). The Community
industry was expected to benefit from this development
by regaining some lost market share; however,
its
market share remained stable between 1997 and the IP.

2. Effect of other factors

a) Other imports

(74)

(70) As concerns the imports from the Czech Republic,
Hungary, Poland, Romania, Russia and the Slovak
Republic, after the imposition of anti-dumping measures
in November 1997 their imports decreased significantly
(from a market share of 19 % in 1997 to 14,8 % in the
IP) and the unit value of these imports increased in the
same period (from ECU/kg 0,44 in 1997 to ECU/
kg 0,47 in the IP). As regards these imports, it should
be noted that anti-dumping measures have been in force
since November 1997.

(71)

(72)

(73)

Imports from other third countries neither covered by
the previous investigation nor the present one were
found to have decreased their market share from 6,4 %
in 1997 to 4,5 % in the IP. The unit value of these
imports (based on Eurostat) was found to be signific-
antly higher than both the imports from Croatia or
Ukraine.

b) Product substitution

Certain exporting producers argued that products other
than those concerned by the current proceeding,
in
particular welded tubes, were being used as substitutes
for seamless tubes. Consequently, it was argued that any
injury suffered by the Community industry was attribut-
able to a reduction in demand for seamless tubes.

In this respect the Commission did not find any applica-
tion where seamless tubes had been substituted for
welded tubes. Furthermore, the investigation has shown
that the market for seamless tubes did not decrease, on
the contrary an increase of 11 % over the period invest-
igated was found.

3. Conclusion on causation

On the basis of the above, it was concluded that the
imports from the two countries concerned have caused
material
Indeed,
injury to the Community industry.
imports from Croatia and Ukraine have impeded the full
recovery of the injurious situation of the Community
found in the context of the previous anti-
industry,

in view of

dumping proceeding concerning this product. This
conclusion is reached in particular
the
analysis of the effect of other third country imports of
the product concerned. Data relating to such imports
does not suggest that their market impact is such as to
link between imports originating in
break the causal
Croatia and the Ukraine and the situation of
the
Community industry.

F. COMMUNITY INTEREST

1. Preliminary remarks

information submitted, whether,

The Commission provisionally examined, on the basis of
the
the
dumping and injury findings, compelling reasons exist
which would lead to the conclusion that it is not in the
Community interest to impose measures in the present
case.

despite

For this purpose, the Commission has considered the
impact of measures for all parties involved in the
proceeding.

is recalled that Regulation (EC) No 2320/97 had
It
concluded that no reasons existed not to impose meas-
ures on grounds of Community interest.

2. Collection of Community interest data

(75)

In order to assess the impact of the imposition of meas-
ures, the Commission requested information from all
including the Community
interested parties known,
producers,
It should be
noted that no replies were received from the user indus-
tries. On the basis of the information received from the
the Commission reached the
cooperating parties,
following conclusions.

importers/traders and users.

3. Impact of measures on the Community industry

(76)

It is to be noted that further to the imposition of meas-
ures in November 1997,
the Community industry's
situation improved slightly, showing that measures in
this
effective, although, as has been
explained above, the Community industry was impeded
from fully benefiting from the existing measures due to
the dumped imports from Croatia and Ukraine.

sector were

financial difficulties,

(77) Given that the Community industry had not been able
to fully recover
the
from its
Commission considers that the imposition of measures
would be effective in affording the industry the oppor-
tunity to recover from the injury suffered. In particular
given the high volume of imported seamless tubes from
the countries concerned, the imposition of measures is
likely to allow the Community industry to regain lost
market share and consequently to improve profitability.

(78)

(79)

(80)

L 218/10

EN

Official Journal of the European Communities

18. 8. 1999

4. Impact of measures on importers/traders

It is to be recalled that Regulation (EC) No 2320/97 had
foreseen that the imposition of anti-dumping measures
impact on the
would not have more than a minimal
overall situation of the importers/traders of seamless
tubes given the wide diversity of products in which they
trade.

The Commission has provisionally also concluded in the
present
investigation that given that seamless tubes
represent only a small part in the diverse range of the
products commercialised by the importers/traders, and
the fact that a number of alternative sources of supply of
seamless tubes exist that are not subject to anti-dumping
measures,
including seamless tubes produced by the
Community industry, it is unlikely that the imposition of
measures would have a significant impact on the situa-
tion of these importers/traders.

(83) Given the sharp increase in volume of dumped imports
from Croatia and Ukraine following Regulation (EC) No
2320/97, it is expected that the imposition of measures
on imports from these countries would be effective in
addressing the material injury caused by these imports. It
the
is therefore considered to be in the interest of
Community industry to impose measures.

As regards both the importers/traders and the user
industries, any impact on prices of seamless tubes is
expected only to be marginal.

The Commission has therefore concluded that, in these
circumstances, there are no compelling reasons not to
impose measures on grounds of Community interest.

G. PROVISIONAL ANTI-DUMPING MEASURES

5. Impact of measures on users

1. Injury elimination level

It is to be recalled that Regulation (EC) No 2320/97 had
foreseen that the imposition of anti-dumping measures
would only have a negligible impact on the situation of
the user industries of seamless tubes,
(including the
chemical and petrochemical industries, power stations,
the automobile and construction industries), given that
the seamless tubes represent only a small element in the
overall costs of these industries. It is to be noted that
there exists a substantial number of companies in the
Community producing tubes (12) and that there are a
high number of exporters in other countries having an
the Community market. The
important
existence of a multitude of alternative sources of supply
guarantees effective competition on the market to the
benefit of the user industries.

share of

(81) Given that no representations have been made contra-
dicting the previous findings and in view of the lack of
cooperation of users in the present investigation, it is
resulting from anti-
expected that any price effect
dumping measures would be negligible with respect to
downstream industrial users.

6. Conclusion on Community interest

(82) Given the increased volume of

imports from both
Croatia and Ukraine, in particular following the imposi-
tion of anti-dumping measures in November 1997, and
the exporting producers' behaviour on the Community
market in significantly undercutting the prices of the
Community industry, there is a likelihood that, in the
absence of measures, this trend in imports will continue
not only preventing the Community industry from bene-
fiting from the imposition of measures in the previous
case but also further aggravating the injurious situation
of the Community industry.

caused material

the dumped imports under
(84) Having established that
injury to the
consideration have
Community industry and that there are no compelling
reasons not
the measures envisaged
should be imposed at a level sufficient to eliminate the
injury caused by these imports without exceeding the
dumping margins found.

to take action,

(85)

(86)

The removal of such injury requires that the industry
should be put in a position where the prices of imports
of the product concerned originating in the countries
concerned should be increased to a non-injurious level.

For the purposes of calculating the necessary price
i.e. the injury margin, the Commission con-
increase,
sidered that the prices of the dumped imports had to be
compared with actual sales prices of the Community
industry plus a reasonable level of profit which the
industry might be expected to make in the absence of
injurious dumping from the countries under invest-
igation.

(87) On this basis, the weighted average export prices for
those products used in the determination of price under-
cutting were compared, on a cif Community frontier
level, adjusted to take account of customs duty paid and
an allowance in respect of post-importation costs, with
the actual weighted average selling prices charged by the
Community industry,
increased, where appropriate, to
reach a reasonable profit margin, in this case established
at 5 %. This profit margin, which is the same as the one
used in the previous investigation concerning the Czech
Republic, Hungary, Poland, Romania, Russia and the
Slovak Republic, was considered, for the purpose of a
provisional determination, to be the minimum profit
level that industry might be expected to achieve in the
absence of injurious dumping from the countries under
investigation.

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Official Journal of the European Communities

L 218/11

This comparison showed the following injury margins:

— Croatia: 31,2 %,
— Ukraine: 56,5 %.

(88)

(89)

(90)

2. Provisional measures

For the purpose of establishing the level of the provi-
sional duty, account was taken of the level of dumping
found and the amount of duty necessary to eliminate the
injury sustained to the Community industry.

Since the dumping margins found are higher than the
injury elimination margins,
the anti-dumping duties
should be based at the provisional stage on the injury
elimination margins.

3. Final provision

In the interest 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 measures —

HAS ADOPTED THIS REGULATION:

Article 1

— seamless tubes of circular cross-section, of iron or non-
alloy steel, cold-drawn or cold-rolled falling within CN code
7304 31 99,

— other tubes of circular cross-section, of iron or non-alloy
steel, of an external diameter not exceeding 406,4 mm
falling within CN codes 7304 39 91 and 7304 39 93.

The rate of duty applicable to the net free-at-Community-fron-
tier price of imports of the product concerned originating in
Croatia shall be 31,2 %, and it shall be 56,5 % for imports of
the product concerned originating in Ukraine.

2.
Unless otherwise specified,
concerning customs duties shall apply.

the provisions

in force

The release for free circulation in the Community of the
3.
product referred to in paragraph 1 shall be subject to the
provision of a security, equivalent to the amount of the provi-
sional 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 one
month of the date of entry into force of this Regulation.

Pursuant to Article 21(4) of Regulation (EC) No 384/96, the
parties which made themselves known within the time limit
specified in the notice of
initiation may comment on the
application of this Regulation within one month of the date of
its entry into force.

A provisional anti-dumping duty is hereby imposed on

1.
the following imports originating in Croatia and Ukraine:

— seamless pipes, of iron or non-alloy steel, of a kind used for
oil and gas pipelines, of an external diameter not exceeding
406,4 mm falling within CN codes 7304 10 10 and
7304 10 30,

Article 3

This Regulation shall enter into force on the day following 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, 17 August 1999.

For the Commission

Karel VAN MIERT

Member of the Commission