Commission Decision No 307/2000/ECSC of 10 February 2000 imposing a provisional anti-dumping duty on imports of certain hot-rolled flat products of non-alloy steel originating in the People's Republic of China, India and Romania
Date: 2000-02-10
Institutions: European Commission
Subjects: China, India, Romania, anti-dumping duty, flat product, import

L 36/4

EN

Official Journal of the European Communities

11. 2. 2000

COMMISSION DECISION No 307/2000/ECSC

of 10 February 2000

imposing a provisional anti-dumping duty on imports of certain hot-rolled flat products of non-
alloy steel originating in the People's Republic of China, India and Romania

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

(4)

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

Having regard to Commission Decision No 2277/96/ECSC of
28 November 1996 on protection against dumped imports
from countries not members of the European Coal and Steel
Community (1), as amended by Commission Decision No
1000/1999/ECSC (2), and in particular Articles 7 and 8 thereof,

All exporting producers, as well as most complaining
Community producers and importers made their views
known in writing.

All interested parties who requested a hearing within the
time limit set and who indicated that they were likely to
be affected by the result of the proceeding and that there
were particular reasons why they should be heard, were
granted a hearing.

After consulting the Advisory Committee,

Whereas:

A. PROCEDURE

(5)

(6)

(1)

(2)

(3)

On 13 May 1999,
the Commission announced by
means of a notice (hereinafter referred to as the ‘notice
of initiation’) published in the Official Journal of the Euro-
pean Communities (3) the initiation of an anti-dumping
proceeding with regard to imports into the Community
of certain hot-rolled flat products of non-alloy steel
originating in the People's Republic of China (hereinafter
and
referred to as
commenced an investigation pursuant to Article 5 of
Commission Decision No 2277/96/ECSC (hereinafter
referred to as the ‘basic Decision’).

and Romania,

‘China’),

India

The proceeding was initiated as a result of a complaint
lodged by Eurofer on behalf of Community producers
representing a major proportion of the total Community
production of
concerned within the
meaning of Articles 4(1) and 5(4) of the basic Decision.
The complaint contained evidence of dumping of the
product concerned and of material injury resulting there-
from, which was considered sufficient
to justify the
initiation of a proceeding.

the product

the

advised

officially

According to Article 5(11) of the basic Decision, the
Commission
complaining
Community producers, the exporting producers, impor-
ters, suppliers and users known to be concerned as well
as their representative associations and the representa-
tives of the exporting countries of the initiation of the
proceeding. Pursuant
the basic
Decision, the Commission also gave the parties directly
concerned the opportunity to make their views known
in writing and to request a hearing.

to Article 6(5) of

(1) OJ L 308, 29.11.1996, p. 11.
(2) OJ L 122, 12.5.1999, p. 35.
(3) OJ C 133, 13.5.1999, p. 17.

In order to allow exporting producers in China to
submit a claim for market economy status or individual
treatment
the Commission sent
market economy status/individual treatment claim forms
to the Chinese exporting producers known to be
concerned.

they so wished,

if

The Commission sent questionnaires to all these parties
and to those who made themselves known within the
time limit set in the notice of initiation.

The Commission received replies to its questionnaires:

— from eleven complaining Community producers,

— from eight exporting producers in the countries

concerned,

— from one unrelated importer in the Community,

— from one Community importer

related to the

exporting producers, and

— from four user companies in the Community.

(7)

The Commission sought and verified all the information
it deemed necessary for the purpose of a preliminary
determination and carried out verification visits, where
appropriate, at the premises of the following companies:

Complaining Community producers

— Aceralia Corporación Sid., Madrid, Spain

— British Steel Plc, London, United Kingdom

— Dillinger, Dillingen, Germany

— GTS, Dunkerque, France

— ILVA SpA, Genova, Italy

— Palini and Bertoli, San Giorgio di Nogaro, Italy

— Salzgitter, Salzgitter, Germany

— Thyssen Krupp Stahl AG, Duisburg, Germany

— Trametal, Genova, Italy

— Voest Alpine, Linz, Austria

11. 2. 2000

EN

Official Journal of the European Communities

L 36/5

Exporting producers

(a) C h i n a

— Angang New Steel Company Ltd, Anshan City

— Jinan Iron & Steel Group Corporation, Jinan

— Maanshan Iron & Steel Co. Ltd, Maanshan

— Qinhuangdao Shougang Plate Mill Co. Ltd,

Qinhuangdao

— Shanghai Pu Dong Iron & Steel Co. Ltd,

Shanghai

— Wuyang Iron and Steel Co. Ltd, Wugang City

(10)

certain CN codes,
quarto plates as described above.

imports cover all different types of

2. Like product

The investigation has shown that not only the basic
physical, technical and chemical characteristics and uses,
but also the grades and the range of dimensions of the
countries
imported
product
concerned
the
to
or
Community-produced products. The same is true when
the product exported to the Community is compared to
that sold on the domestic markets in India and Romania.

from the
comparable

concerned
are

identical

(8)

(9)

(b) I n d i a

— Steel Authority of India Ltd, New Delhi

(c) R o m a n i a

— Sidex SA, Galati

Unrelated importer(s) — user(s) in the Community

— Olan SA, Araia, Spain

Importers in the Community related to the exporting producers

Romania: Sidex International plc, London, United

Kingdom

The investigation of dumping covered the period from 1
January 1998 to 31 March 1999 (hereinafter referred to
as the ‘investigation period’ or ‘IP’). The examination of
injury covered the period from 1995 up to the end of
the dumping investigation period (hereinafter also
referred to as the ‘period examined’).

B. PRODUCT CONCERNED AND LIKE PRODUCT

(12)

1. Product concerned

(13)

The product concerned is flat products of non-alloy
steel, not in coils, not further worked than hot-rolled,
without patterns in relief, with a thickness of more than
10 mm and a width of 600 mm or more falling within
CN codes ex 7208 51 30 (TARIC code 7208 51 30*10),
7208 51 50*10),
ex 7208 51 50
ex 7208 51 91 (TARIC code 7208 51 91*10)
and
ex 7208 51 99 (TARIC code 7208 51 99*10), or with a
thickness of 4,75 mm up to 10 mm and a width of
CN code
2 050 mm or more
ex 7208 52 91 (TARIC code 7208 52 91*10)
and
originating in China, India or Romania.

falling within

(TARIC

code

imports

Quarto plates are generally produced by hot-rolling slabs
and can be of various grades and dimensions. The
majority of
into the
Community consist of standard grades such as ‘struc-
(e.g. S235, S275 and S355 according to
tural steels’
‘Euronorm’ EN 10025), shipbuilding grades and boiler
grades (according to EN 10207).

from third countries

(11) On this basis,

it was concluded that quarto plates
produced in the countries concerned and sold on the
Indian and Romanian domestic markets, or exported to
the Community from all three countries, or produced
and sold by the Community industry on the Community
market, are alike within the meaning of Article 1(4) of
the basic Decision.

C. DUMPING

1. Normal value

1.1. China

1.1.1. M a r k e t e c o n o m y t r e a t m e n t

in
Pursuant to Article 2(7)(b) of the basic Decision,
anti-dumping investigations concerning imports from
China, normal value shall be determined in accordance
with paragraphs 1 to 6 of the said Article for those
producers which can show that they meet the criteria
laid down in Article 2(7)(c), i.e. that market economy
conditions prevail for them.

Six Chinese companies applied for market economy
treatment. The investigation at their premises showed,
however, that all were operating under significant State
influence. In fact, it was found that with regard to raw
materials sourcing, State interference, auditing of the
accounts, barter trade and land ownership, the criteria in
Article 2(7)(c) of the Basic Decision were not met. More
specifically, the criteria of the first indent of Article
2(7)(c) were not met by five companies, those of the
second indent were not met by two companies, those of
the third indent were not met by four companies and
those of the fourth indent were not met by three compa-
nies.
these companies were either
completely or majority State-owned.

In addition, all

For these reasons, it was concluded that none of these
companies could be granted market economy treatment.

The investigation has shown that, although imports
from the countries in question are concentrated in

(14)

The companies concerned and the Community industry
were informed of the conclusions and were given the
possibility to submit comments.

L 36/6

EN

Official Journal of the European Communities

11. 2. 2000

1.1.2. A n a l o g u e c o u n t r y

tions was not lower than 10 % of sales. Subsequently, a
weighted average normal value per CN code was calcu-
lated.

(15)

(16)

In accordance with Article 2(7) of the basic Decision, in
order to establish normal value for the Chinese compa-
nies not operating under market economy conditions,
an analogue market economy country had to be selected
for the establishment of normal value. For this purpose,
the complainant suggested Taiwan or Mexico and the
Commission proposed Taiwan. Within the time limit
specified in the notice of initiation, the Chinese com-
panies objected to this approach and suggested using
India instead. They underlined that India was a large
steel producer with production characteristics similar to
those in China. India had production costs comparable
to those in China because, like China, it had its own coal
and iron ore mines.

Since the producers in Taiwan and Mexico did not agree
to cooperate,
the Commission considered India and
Romania. Of these two countries India was considered
to be the more appropriate choice since the Indian
domestic market was the largest in size and was charac-
terised by a significant number of competing local
producers. Moreover, as explained in more detail below,
the domestic sales in India were representative for
exports from China to the Community, both in terms of
volume and in terms of product types.

1.1.3. D e t e r m i n a t i o n o f n o r m a l v a l u e

(17) As explained above, normal value was established on the
basis of the domestic prices of the Indian exporting
producer.

(18)

(19)

In accordance with Article 2(2) of the basic Decision,
domestic sales of
the like product by the Indian
exporting producer during the investigation period were
made in sufficient quantities since they accounted overall
and per type for more than 5 % of the quantities of the
to the
concerned exported from China
product
Community.

The Commission further assessed on a type-per-type
basis whether Indian sales of the like product had been
made in the ordinary course of trade in accordance with
Article 2(4) of the basic Decision. For this purpose the
full cost of production per unit during the investigation
period was compared with the unit price of each
domestic sales transaction made during that period.
Where, per product type, the volume of domestic sales
above unit cost represented at least 80 % of sales and
where the weighted average price was equal to or higher
than the weighted average cost, normal value was estab-
lished on the basis of
the weighted average prices
actually paid for all domestic sales. Otherwise, normal
value was established on the basis of
the weighted
average prices actually paid for the remaining profitable
domestic sales, since the volume of profitable transac-

1.2. India and Romania

(20)

(21)

(22)

In order to establish normal value,
it was first deter-
mined for each of the cooperating exporting producers
whether the total volume of the domestic sales of the
product concerned was representative in accordance
with Article 2(2) of the basic Decision, i.e. whether these
sales represented 5 % or more of the sales volume of the
product concerned exported to the Community. It was
found for all cooperating exporting producers that their
volumes of domestic sales represented more than 5 % of
export sales.

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

total domestic sales of each product

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 Decision.

(23) Where, per product type, the volume of domestic sales
above unit cost represented at least 80 % of sales and
where the weighted average price was equal to or higher
than the weighted average cost, normal value was estab-
lished on the basis of
the weighted average prices
actually paid for all domestic sales. Otherwise, normal
the weighted
value was established on the basis of
average prices actually paid for the remaining profitable
domestic sales, provided that the volume of profitable
transactions was lower than 80 % but not lower than
10 % of sales.

(24)

For those product 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 considered insufficient within the meaning of
Article 2(4) of the basic Decision and were therefore
In these cases, as there were no repres-
disregarded.
entative domestic sales by other producers
in the
country concerned, normal value was constructed on the
basis of the costs of manufacturing incurred by the
exporting producer concerned for the exported product
type in question plus a reasonable amount for SG&A
costs and profits in accordance with Article 2(3) and (6)
of the basic Decision. For each exporting producer, the
SG&A were based on its representative domestic sales
and the profit margin based on its
representative
domestic sales made in the ordinary course of trade.

11. 2. 2000

EN

Official Journal of the European Communities

L 36/7

(25) As to the Indian exporting producer, its domestic sales
of the product concerned were divided into so-called
sales are
‘direct
dispatched directly from the plant
to the unrelated
customer while stockyard sales are dispatched from a
network of branches located all over India.

sales’ and ‘stockyard sales’. Direct

During the on-spot investigation it was found that the
quality of the product deteriorated during its stay in the
stockyard and a large number of discounts were granted
on these sales for various reasons, one of the most
frequent being for second quality. Moreover, as these
discounts were granted in different ways, the company
was not able to identify the transactions for which a
quality discount had been given. Furthermore, export
sales covered only first quality products.

For these reasons it was decided to provisionally estab-
lish normal value on the basis of the direct sales since it
was found that they were comparable with the export
sales in terms of quality and were sold in sufficient
quantities.

2. Export price

2.1. China

(26)

The investigation showed that all export sales of the
product concerned were made to unrelated customers in
the Community. The export prices were therefore calcu-
lated in accordance with Article 2(8) of
the basic
Decision, i.e. on the basis of the prices actually paid or
payable by these independent customers.

(27) As the comparison of the data concerning exports to the
Community provided by the
cooperating Chinese
exporting producers and Eurostat statistics indicated that
these exports represented only 74 % of those reported
by Eurostat, it was concluded that the remaining sales
should be established on the basis of Eurostat data
which were considered representative for this purpose.

2.2. India and Romania

(28) 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 Decision.

related to the

(29) Where export sales were made to importers in the
Community which were
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 Decision.
Adjustments were made for all costs incurred between
importation and resale, including a reasonable margin

(30)

(31)

(32)

(33)

for SG&A plus a profit margin of 5 % considered provi-
sionally on the basis of the information available.

3. Comparison

For the purposes of a fair comparison due allowance, in
the form of adjustments, was made for differences
claimed under Article 2(10) of the basic Decision and
demonstrated to affect price comparability. On this
basis, adjustments were made with regard to rebates,
transport,
loading and ancillary
insurance, handling,
costs, credit and commissions.

to Article 2(10)(b) of

The company in India claimed an allowance for import
charges. Pursuant
the basic
Decision this request was refused since it was not
proven that the materials on which import duties were
payable had been physically incorporated into the prod-
ucts 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.

4. Dumping margins

4.1. General method

In accordance with Article 2(10) and (11) of the basic
Decision, the dumping margins were established on the
basis of a comparison between the weighted average
normal value per product type and the weighted average
export price at ex-factory level for the same product
type and at the same level of trade. With regard to India
and Romania the comparison was made at an ex-factory
level and for China at fob level.

represented by the

In order to ensure the effectiveness of the measures, a
residual dumping margin had to be determined for each
country concerned. For this purpose, the Commission
compared for each country concerned the volume of
imports
cooperating exporting
producers with the total volume of imports originating
in the exporting countries as shown in Eurostat import
statistics. As a result, for India it was found that the level
of cooperation was high (86 %). The Commission there-
fore considered it appropriate to set
the dumping
margin for the non-cooperating companies at the level
of the highest individual dumping margin established for
the cooperating exporting producer
in the country
concerned. Since for Romania the export volume of the
only cooperating exporting producer was only 27 %
compared to Eurostat data, the residual anti-dumping
margin was set at the level of the highest quarterly
dumping margin found in that country for a single
product type sold in representative quantities. The above
approach was also considered necessary in order to
avoid creating a bonus for non-cooperation and an
opportunity for circumvention.

L 36/8

EN

Official Journal of the European Communities

11. 2. 2000

(34) All six Chinese exporting producers claimed individual
treatment,
the determination of an individual
dumping margin on the basis of the individual export
prices of the companies.

i.e.

these companies
The Commission verified whether
enjoyed in fact and in law the necessary degree of inde-
pendence from the Chinese State.

None of the companies concerned showed to the satis-
faction of the Commission that they fulfilled all the
criteria. In particular, the absence of interference by the
State could not be guaranteed. Some companies failed to
demonstrate that they had full control over their supply
of raw materials and inputs in general. In addition, all
companies were either wholly or majority State-owned.
Consequently,
it was decided not to grant individual
treatment to any of these companies.

(35)

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

4.2. China

34,3 %

(36) As the six cooperating exporting producers were not
granted market economy status nor individual
treat-
ment, their export prices were taken together with Euro-
stat
in order to cover China's total exports to the
Community. Consequently, the comparison could only
be made by customs code (CN code).

independently.

the structure of

It was found that none of the producers cited had itself
imported the product in question. One trading company
belonging to the same corporate group as a complaining
Community producer had, however, made such imports
during the investigation period. This company which
including from
purchased steel throughout the world,
the producer belonging to the same group, and sold
mainly in third countries on its own account was found
to act
the
In fact,
grouping to which both companies, belong is such that
each maintains its own financial accounts, submits sepa-
rate annual reports, and has no profit and loss transfer
agreement with the holding company. Furthermore,
separate income tax returns are filed, each has its own
board of directors, and business relations with other
companies in the group are carried out at arms length
on identical terms to those applicable to other compa-
nies where no legal relationship exists. These purchases
could not, therefore, affect the status of the producer
concerned, and it was considered that there were no
grounds for excluding any producer of hot-rolled flat
products of non-alloy steel from the definition of the
Community production.

(41)

The 18 Community producers of hot-rolled flat products
of non-alloy steel mentioned above, therefore, constitute
the Community production within the meaning of
Article 4(1) of the basic Decision.

4.3. India

(37)

Steel Authority of India Ltd
Residual

4.4. Romania

(38)

Sidex SA
Residual

51,1 %
51,1 %

14,4 %
52,6 %

1.2. Community industry

(42) Of the 12 producers who lodged the complaint, ten
replied to the Commission's questionnaires, allowed on-
spot investigations and provided the Commission with
additional information when requested; they were there-
fore considered as cooperating in the investigation.

D. INJURY

1. Definition of the Community industry

1.1. Total Community production

(39) Within the Community, the product concerned is manu-

factured by:
— 12 producers which lodged the complaint,
— five

Community

producers

supporting

the

(43)

complaint, and

— one Community producer which did not support the

complaint.

(40)

that

argued

exporting

producers

Some
certain
complaining Community producers had imported hot-
rolled flat products of non-alloy steel from the countries
concerned by the proceeding during the ‘investigation
period’. The Commission therefore examined whether
any of them should be excluded from the definition of
the Community production.

These 10 Community producers are: Aceralia (Spain),
British Steel (United Kingdom), Dillinger (Germany), GTS
(France), ILVA (Italy), Palini and Bertoli (Italy), Salzgitter
(Germany), Thyssen (Germany), Trametal (Italy), Voest
Alpine (Austria). These companies accounted for more
than 75 % of total Community production in the IP, and
thus represented a major proportion of the Community
production within the meaning of Article 5(4) of the
basic Decision, and are hereinafter referred to as ‘the
Community industry’.

Eight of these companies are fully integrated, i.e. they
produce or buy within the group they belong to, the
steel slabs used for rolling the product concerned. The
two remaining companies are so-called re-rollers, which
buy steel slabs on the free market for manufacturing the
product concerned.

For the purpose of the provisional
findings, on-spot
investigations were carried out at the premises of seven
complaining producers. The total production of these
seven companies represented about 80 % of the total
output of the Community industry.

11. 2. 2000

EN

Official Journal of the European Communities

L 36/9

1.3. Other Community producers

two remaining

The
complainant producers, with
production accounting for less than 2 % of the total
output of the 12 complaining producers, did not reply
to the Commission's questionnaires; they were therefore
considered not to be cooperating in the framework of
the current
the
Community industry.

investigation and thus not part of

the six other producers, one supporter

replied
Of
partially to the Commission's questionnaires and in prin-
ciple allowed on-spot investigations, while the other five
companies did not reply at all to the Commission's
questionnaires.

These eight companies are referred to hereinafter as
‘other Community producers’.

(47)

2. Consumption

In detail,

both the same period in 1997 and the second six
months of 1998.
six-monthly apparent
consumption expressed in tonnes per month developed
as
follows: 577 795 in the second half of 1997,
660 000 in the first half of 1998, 571 000 in the
second half of 1998.

3. Imports from the countries concerned

3.1. Cumulation

from the other

Romanian authorities and some exporting producers
alleged that their imports should not be cumulated with
those
to the
proceeding, because the level of prices or the trends in
the volume of their sales were not similar. In particular,
the Romanian exporting producer
it
decreased its exports to the Community in the course of
the IP.

argued that

countries

subject

(44)

(45)

cumulated volume of

Community consumption was calculated on the basis of
the
the
Community market by the Community industry and by
the other Community producers, as well as of total
import volumes.

sales destined for

The volume of sales of the other Community producers
was estimated on the basis of the information contained
in the complaint and of the reply to the Commission's
questionnaire
producer
mentioned in recital 44. Imports were assessed on the
basis of data obtained from Eurostat or contained in the
reply to the Commission's questionnaire for exporting
producers.

submitted

other

the

by

(46) On this basis, Community consumption expressed in
tonnes per month, developed from 573 097 in 1995 to
522 349 in 1996, 558 569 in 1997 and 604 929 in the
IP.

for

the Community market

the product
In 1995,
concerned was marked by strong demand and a
sustained level of prices.
consumption
decreased by 8,9 % and then increased by 10,7 % in
1997 and a further 7,9 % in the investigation period, a
level above that reached in 1995 (+ 5,2 %).

In 1996,

As far as consumption during the IP is concerned, the
investigation has shown that it was particularly strong
during the first six months of 1998 as compared with

3.2. Volumes, market shares and prices

(48) Having carefully examined these allegations and taking
into account the conditions laid down in Article 3(4) of
the basic Decision,
the
dumping margins found for China, India and Romania
were 34,3 %, 51,1 % and 52,6 % respectively, i.e. well
above the de minimis level.

the Commission recalls that

above

significant

all, hold a

In addition, between 1995 and the IP, imports from the
three countries concerned all showed an upward trend,
the
and,
Community market. Indeed, despite a slight decrease in
the course of the IP, the volume of imports from each of
the three countries and corresponding market shares
found during the IP were significantly above the de
minimis level. Furthermore, the prices of these imports
were all

in the same range.

share of

the Commission's analysis revealed that

Finally,
the
products concerned imported from the countries under
entirely interchangeable between
investigation were
themselves and with those produced and sold by the
Community industry. All imported products were also
sold with similar pricing policies to the same customers.

It was therefore concluded that a cumulative assessment
of the effects of the imports from China, India, and
Romania was appropriate,
in accordance with Article
3(4) of the basic Decision.

(49) Data on volumes, market shares and prices were extracted from Eurostat imports statistics and

replies to Commission's questionnaires:

Total imports from countries
concerned

1995

1996

1997

Investigation period

(1/1998-3/1999)

Volume in tonnes per month

49 709

53 374

61 243

80 045

Market shares in %

Average price in ECU per tonne

8,7

288

10,2

298

11

315

13,6

321

L 36/10

EN

Official Journal of the European Communities

11. 2. 2000

During the period under consideration the cumulated volume of the dumped imports increased by
more than 66 %, the corresponding cumulated market shares increasing by 4,9 percentage points
over the period. Over the same period, prices increased by 10,1 % reaching a level of 321 EUR per
tonne.

On a per semester basis, volumes (expressed in tonnes per month) and prices (expressed in ECU per
tonne) of cumulated dumped imports developed as follows:

1995
1-6

1995
7-12

1996
1-6

1996
7-12

1997
1-6

1997
7-12

1998
1-6

1998
7-12

1999
1-3

Volumes

46 313

53 105

62 904

43 843

52 392

70 095

116 754

66 190

45 656

Prices

267

305

307

286

296

330

340

311

249

3.3. Price undercutting

(50)

For the purposes of determining price undercutting, the
Commission analysed data referring to the IP. In view of
the wide range of hot-rolled flat products under invest-
igation, the product concerned sold by the Community
industry and imported from the exporting countries was
classified into categories, according to three criteria: the
width, the thickness and the quality of steel.

Comparison was
then made on a quarterly basis
between the weighted average selling prices of imported
products per category with the weighted average sales
prices of the Community industry in the same category.
Prices used were those charged to the first independent
customer, free of all rebates, and where appropriate,
to ex-works for
adjusted in terms of
Community industry products and to CIF Community
frontier level, duty paid for imported products. In addi-
tion, the import prices were adjusted to include customs
clearance costs and post importation costs. The latter
were determined on the basis of the results of the invest-
igation carried out with respect to unrelated importers.

transport cost

(51)

The levels of price undercutting were found to be as
follows:

India:

Steel Authority of India Limited

China

Romania

Sidex

Other

12,6 %

15,4 %

11,4 %

19,0 %

4. Situation of the Community industry

4.1. Production

(52) During the ‘period examined’, production (expressed in
tonnes per month) remained almost stable, decreasing

slightly from 407 320 in 1995 to 397 647 in 1996,
peaking at 428 761 in 1997 and decreasing again by
6,7 % thus reaching 400 015 in the IP.

4.2. Capacity and utilisation rate of capacity for all
hot-rolled flat (product concerned and other steel
products)

(53) Given that the production facilities used in the manufac-
turing of the product concerned are also used for the
production of a wide variety of hot-rolled plates not
concerned by this proceeding, it was not possible nor
to establish capacity and utilisation of
meaningful
capacity figures specific to the product concerned.

Production and capacities declared to the Commission
for all hot-rolled flat products (product concerned and
other steel products)
in the framework of the ECSC
Treaty were therefore taken into consideration. The
other steel products represent around 25 % of
total
sizeable
production and are destined for different,
markets not subject to the same conditions applying on
the market for the product concerned. Information was
only available on a yearly basis until 1998.

(54) Development of

the capacity utilisation rate (ratio
between production and capacity) showed a significant
increase between 1996 and 1997,
from 71,6 % to
80,8 %, a level maintained in 1998 at 80,3 %.

(55)

industry is capital

In addition, as the steel
intensive,
producers need to keep capacity utilisation as high as
possible, in order to reduce the effect of the high-fixed
costs. Eight of
the 10 producers constituting the
Community industry are integrated. The major part of
the steel they use is produced from blast furnaces, a
process that can not easily be adapted to the fluctuations
of the market. In any case, the rate of capacity utilisation
achieved in 1997 and 1998 can not be considered as
high for an industry of this type and it is clear that the
Community industry had large reserves of capacity avail-
able in the ‘period examined’.

(57)

(58)

(59)

11. 2. 2000

EN

Official Journal of the European Communities

L 36/11

4.3. Stocks

(56)

The Community industry's closing stocks decreased
from 559 293 tonnes in 1995 to 549 598 tonnes in
1996 and to 535 812 tonnes in 1997. During the IP,
they sharply increased, reaching a level of 565 697
tonnes in 1998 and of 568 890 tonnes at the end of
March 1999.

4.4. Volume of sales in the Community and cor-

responding market shares

The volume of
sales on the Community market,
expressed in tonnes per month, decreased from 340 757
in 1995 to 315 323 in 1996 and then increased to
in line with development of
344 855 in 1997,
consumption. However, in the IP it decreased by 2 % to
reach a level of 337 841, while consumption increased
by 7,9 % in the same period. Between 1995 and the IP,
this represents overall a decrease of 0,9 % of Community
sales on the Community market, while
industry's
consumption rose by 5,2 %.

the ‘period examined’

from 59,5 % in 1995,

The corresponding market share of
the Community
industry increased regularly during the first three years
of
to
60,4 % in 1996 and to 61,7 % in 1997 before dropping
in the IP by 5,9 percentage points, reaching a share of
55,8 %. This represents an overall loss of market share
of 3,7 % between 1995 and the IP while, as mentioned
above, dumped imports increased their market share by
4,9 percentage points.

(61) On the same annual basis, profitability decreased from
13,3 % in 1995 to 6,4 % in 1996 and 6,1 % in 1997,
before improving to 8,5 % in the IP, without reaching
however its level of 1995.

4.5.2. Half-yearly analysis

(62) An analysis of weighted average prices and profitability
half year by half year for the years 1995 to 1998 and
for the last six months of the IP, corresponding to the
period from the fourth quarter 1998 to the first quarter
1999, was made.

(63) With regard to the weighted average prices of

the
Community industry, it was found that between 1995
fluctuated around an average of
and 1997 prices
ECU 378 per tonne, with a maximum variance of 9 %.

In the first half of 1998, an exceptionally high level of
ECU 412 per tonne was achieved followed by a sharp
decrease to ECU 384 per tonne in the second half of
1998 and to ECU 332 per tonne in the last six months
of the IP.

(64) During the same period, profitability followed similar
trends varying from a minimum of + 2,7 % in the
second half of 1996 to a maximum of 15 % in the first
half of 1998.
In the last six months of the IP, the
Community industry suffered losses of – 4,3 %.

4.5.3. Quarterly analysis in the IP

4.5. Average sales prices in the Community and prof-

itability

(65)

The weighted average prices and profitability in the IP
were also examined on a quarter-by-quarter basis.

of

prices

It became apparent during the investigation that an
examination
the
Community industry confined to the IP as a whole (a
period of 15 months) would lead to inappropriate
conclusions, as the Community market experienced
pronounced changes over this period.

profitability

and

of

Therefore, in order to assess the development of sales
prices in the Community and corresponding profit-
ability, data were analysed first on a yearly basis,
between 1995 and the overall IP, then on a half-yearly
basis between 1995 and the IP and finally on a quarterly
basis during the IP.

4.5.1. Year-by-year analysis

(60) Weighted average prices (expressed in ECU per tonne)
slightly decreased from 381 in 1995, to 367 in 1996,
366 in 1997 and increased to 382 in the IP, the level of
1995.

(66) During the first three quarters of 1998, the high prices
observed for Community products allowed profits
higher than 13 %, a level only achieved in 1995 when
the market was characterised by very high levels of
demand and similar levels of prices.

However, during the third and, more pronounced,
during the fourth quarter of 1998, prices started to
decrease sharply to ECU 361 per tonne, a level notice-
ably below the average price of ECU 378 per tonne
observed during the period from 1995 to 1998. In the
first quarter of 1999, prices decreased by a further
15,5 % as compared to the prices of the fourth quarter
of 1998. A comparison of prices between the first
quarter 1998 and the first quarter 1999 shows a
decrease of more than 25 %.

In parallel, profitability decreased by 9,7 percentage
points between the third and the fourth quarter 1998
and by a further 11,6 percentage points in the first
quarter 1999. Profitability between the first quarter
1998 and the first quarter 1999 shows a decrease of
more than 22,1 percentage points.

L 36/12

EN

Official Journal of the European Communities

11. 2. 2000

Detailed quarterly data on prices and profitability are contained in the following table:

I/1998

II/1998

III/1998

IV/1998

I/1999

Prices in ECU per tonne

407

417

406

P/L in %

+ 14,1

+ 15,9

+ 13,3

361

+ 3,6

305

– 8

4.6. Employment

E. CAUSATION

(67)

Employment fell from 6 943 employees in 1995, to
6 708 in 1996, to 6 290 in 1997 and to 6 008 in the
IP, which represents an overall decrease of more than
13 %.

1. Introduction

4.7. Conclusion on injury

(68)

The investigation has
the Community
industry was subject to significant price undercutting
from the dumped imports which increased substantially
in terms of volumes and market shares.

shown that

At the same time, in a market which expanded signifi-
cantly since 1996 and despite the reserves of capacity
available,
the Community industry was not able to
increase its production between 1997 and the IP. On the
contrary,
forced to reduce production and
it was
increase the level of stocks.

Between 1995 and the IP, the volume of the Community
industry's sales on the Community market remained
almost stable while consumption increased by more
than 5 %. Between 1997 and the IP, the volume of sales
decreased by 2 % while consumption expanded by more
than 7,9 %. This resulted in an overall decrease of the
share in the period
Community industry's market
considered (– 3,7 %). Between 1997 and the IP,
the
Community industry's market share dropped by 5,9
percentage points.

Up to the middle of 1998, as a result in particular of
high demand, the Community industry experienced high
prices and high profits. However,
thereafter and in
particular in the fourth quarter 1998 and the first
quarter 1999, i.e. in the last six months of the IP, the
situation of the Community industry significantly deteri-
orated,
in particular as regards prices and financial
results. In this period, prices dropped sharply by about
18 % below the average price observed during the
preceding quarter and financial results were at a loss-
making level (– 4,3 %). In the first quarter 1999, prices
decreased by – 25 % as compared to prices in the first
quarter 1998 and financial results deteriorated to about
– 8 %.

(69)

(70)

(71)

the Commission examined whether

In accordance with Article 3(6) and 3(7) of the basic
Decision,
the
material injury suffered by the Community industry had
been caused by the dumped imports from India, China
and Romania; it also examined other known factors in
order to ensure that injury caused by these factors was
not attributed to the dumped imports.

In any analysis of the steel market, it has to be borne in
mind that steel is a major commodity product and that
its base price, which is published in specialised media, is
well known by all market operators. The product
concerned by this investigation, either produced or sold
by the Community industry or imported from the coun-
tries concerned, is therefore highly price sensitive and
fluctuations in price are rapidly transmitted throughout
the market.

It should also be recalled that the market for product
concerned by this investigation is order-driven, in that
the production of a range of products which differs
widely in qualities, widths and thicknesses requires that
products are produced on demand. The impact of any
factor,
in the
Community by the Community industry can, therefore,
only be assessed by taking into account a certain time
lag.

including dumping, on the

sales

2. Effect of the dumped imports

2.1. Volume of dumped imports

(72)

In 1995, 49 709 tonnes per month were imported from
the three countries concerned, representing about 38 %
imports in the Community. The tonnage of
of total
dumped imports increased sharply in the following years
(+ 7,3 % between 1995 and 1996, + 14,7 % between
1996 and 1997, + 34,4 % between 1997 and the IP). In
the latter period, dumped imports represented more
than 47,5 % of total

imports.

In the light of the foregoing analysis,
it is therefore
provisionally concluded that the Community industry
suffered material injury within the meaning of Article
3(1) of the basic Decision.

(73)

Volumes of dumped imports were also analysed in abso-
lute terms as well as compared to the production of the
Community industry, on a half-yearly basis.

11. 2. 2000

EN

Official Journal of the European Communities

L 36/13

(74)

From a level of 52 392 tonnes per month in the first
half of 1997 volume of dumped imports increased
sharply to 70 045 tonnes per month in the second half
of 1997, then peaked at 116 754 tonnes per month in
the first half of 1998 (i.e. more than doubling the level
of the first half of 1997). In the second six months of
1998, imports dropped to 66 190 tonnes per month, a
level still well above the average observed in the period
1995 to the first half of 1997 and dropped again in the
first quarter of 1999,
falling to 45 656 tonnes per
month, a level close to the volumes imported between
1995 and the beginning of 1997.

(75) A comparison of the volumes of the dumped imports
with the production of the Community industry reveals
from the three countries
a ratio between imports
concerned and the total average production of
the
Community industry varying between 11 % in the
second half of 1996 and 16,5 % in the second half of
1998 with the exception of the first six months of the
IP, in which imports represented more than 29,2 % of
the total average production of the Community industry.

(76)

(77)

In relation to consumption, which averaged around
570 000 tonnes per month between 1995 and 1997,
the level of dumped imports in the first half of 1998, at
116 754 tonnes per month was more than 46 000
tonnes per month higher than the figure of the previous
six months, representing an exceptional additional pene-
tration of more than 8,5 % of the market. These imports
fed a particularly strong apparent consumption during
the same period. However, during the remaining IP
when it became apparent that users where not able to
absorb this increase in apparent consumption, prices
and profits deteriorated significantly.

It is clear from the above that this increased volume of
dumped imports contributed disproportionately to the
increase in apparent consumption as the Community
industry lost orders and was forced to increase stocks
from 535 812 tonnes at the end of 1997 to 565 697
tonnes at the end of 1998 and 568 890 tonnes on the
31 March 1999 and progressively reduce output from
428 761 tonnes per month in 1997 to 400 015 tonnes
per month in the IP.

2.2. Prices of dumped imports

(78)

In 1997, the price differential between the prices of the
dumped imports and those of the Community industry
ranged about ECU 50 per tonne. However, this price
differential widened to more than ECU 70 per tonne in
1998 and then reduced to about ECU 56 per tonne in
the first quarter of 1999.

The large increase in import volumes during the first
semester of the IP, given the economics of the steel
industry which operates with a certain time lag, caused a
swift destabilisation of the market depressing the prices

the IP.

In this respect,

the
during the remainder of
Community industry was obliged, in an attempt to cover
fixed costs, to maintain output levels and sell at these
dumping-induced prices. As a result, profitability in first
quarter of 1999 fell well below the break-even point.
Indeed, the movement in profits in the IP is remarkable;
from a return on sales of more than 14 % in the first
quarter of 1998 to a loss of 8 % in the first quarter of
1999, a turnaround of more than 22 percentage points.

2.3. Conclusion

(79)

Taking into account the considerable inflow of dumped
imports which were disproportionate to what,
in the
long run, the market could absorb and the consequent
increased price differential between the prices of
dumped imports and those of the Community industry
together with the deterioration of the situation of the
Community industry,
is concluded that dumped
imports from China, India and Romania caused material
injury to the Community industry, within the meaning
of Article 3(6) of the basic Decision.

it

3. Effect of other factors

3.1. Consumption

(80)

The Commission analysed whether the development of
consumption affected the situation of the Community
industry. In this respect, it is recalled that between 1995
and the IP, consumption increased by 5,2 % while
Community indusfry's sales slightly decreased.

(81)

The development of consumption cannot therefore be
considered as having had any adverse effect on the
situation of the Community industry.

3.2. Situation of the other Community producers

(82)

The situation of the other Community producers was
also taken into consideration. For this purpose,
it is
recalled that the Commission had at its disposal the
information contained in the complaint; partial coopera-
tion from one of the other Community producers had
also been obtained.

On the basis of this information, the development of the
tonnage sold by other Community producers was calcu-
lated, thus allowing the establishment of consumption
and market shares during the period in consideration.

(83)

Tonnage sold by other Community producers on the
Community market, expressed in tonnes per month,
decreased from 102 778 in 1995 to 91 210 in 1996 to
65 470 in 1997 and increased to 93 662 in the IP. The
corresponding market shares varied from 17,9 % in
1995 to 17,5 % in 1996 to 11,8 % in 1997 and to
15,5 % in the IP.

L 36/14

EN

Official Journal of the European Communities

11. 2. 2000

The drop in tonnage sold and in market share observed
between 1996 and 1997 was due to the withdrawal
from the market of one producer in the Community.
The reappearance of this producer in the investigation
period did not permit however other Community produ-
cers to regain their previous market share which in fact
fell by 2,4 percentage points between 1995 and the IP.

3.3. Oversupply

(84)

Some exporting producers in the countries concerned
argued that the market in the IP was characterised by
oversupply and overcapacity which were responsible for
any fall in performance experienced by the Community
industry.

The Commission found that
the market was indeed
saturated in the IP and that this was due to the excep-
tional increase of dumped imports between 1997 and
1998 (+ 34,4 %). This caused Community industry to
reduce production and to lose market share. Indeed, it
was the increasing dumped imports that caused over-
supply on the market and led to material injury for the
Community industry.

(85)

(86)

(87)

3.4. Anti-competitive behaviour of

the Community

industry

Some exporting producers alleged that the Community
industry's involvement in anti-competitive activity made
injury assessment impossible, as the market situation
had been completely distorted by such activity.

Their argumentation referred first
to a Commission
Decision (98/247/ECSC of 28 January 1998, alloy
surcharge case), which condemned anti-competitive
behaviour in the stainless steel sector. In this respect, it
is recalled that
investigation concerns a
product made of non-alloy steel, which is destined for a
market different from that of stainless steel. This argu-
ment is therefore not relevant.

the current

In this Decision,

system in question infringed the

they argued that an information exchange
Secondly,
trade association
system used by the German steel
existed. This assertion was based on a Commission
Decision of 26 November 1997 relating to a proceeding
pursuant to Article 65 of the ECSC Treaty (case of
Wirtschaftsvereinigung Stahl).
the
Commission concluded that, although the information
exchange
anti-
competition rules, it was not implemented by the parties
concerned following the warning letter which the
Commission sent to them on 8 July 1996. Taking into
account the time that has elapsed (two years before the
investigation period) and the fact that no documented/
substantiated information was submitted in this inves-
tigation contradicting the
the
Commission, it can be concluded that the second argu-
ment is also not relevant.

findings of

earlier

(88)

(89)

3.5. Imports from other third countries

The Commission also analysed the effect on the situa-
tion of the Community industry of imports from other
countries not subject to the current investigation. Some
exporting producers argued that Poland,
the Czech
Republic, the former Yugoslav Republic of Macedonia,
Bulgaria and the Ukraine were causing injury to the
Community industry and that any measure imposed
only on imports from India, China and Romania would
be discriminatory.

3.5.1. Imports from other third countries considered as a

whole

The volume of such third country imports and cor-
responding market shares increased during the ‘exam-
ined period’ from 13,9 % in 1995 to 15,1 % during the
IP. However, between 1997 and the IP, at a time when
the highest volume of dumped imports from the coun-
tries subject to investigation penetrated the Community
market, increasing their market share by 2,3 percentage
points, the market share of other imports decreased by
0,4 percentage points.

remained almost

(90) Over the period in consideration, the price of other
stable, varying between
imports
ECU 306 per tonne in 1996 and ECU 325 per tonne in
the IP.
In 1997, price of dumped imports, having
progressively increased since 1995, reached the level of
price of other third countries in that period (ECU 313
against ECU 315 per tonne). However,
in the IP, the
price of dumped imports decreased again, thus under-
cutting the price of other imports (ECU 317 against
ECU 325 per tonne).

(91)

Concerning imports originating in individual countries,
the following was determined:

3.5.2. Poland and the Czech Republic

(92)

The volume of
imports from Poland decreased by
24,5 % between 1995 and the IP, and imports from the
Czech Republic rose from 16 234 tonnes per month in
1995 to 25 175 tonnes per month in 1997 and then
sharply fell to 19 955 tonnes per month in the IP. In the
latter period, market share of imports from Poland and
the Czech Republic were respectively 1,8 % and 3,3 %,
with prices below those of the Community industry, but
higher than those of dumped imports.

3.5.3. The

former Yugoslav Republic

of Macedonia

(FYROM)

(93) On the basis of the information available from Eurostat,
the former Yugoslav Republic of Macedonia increased its
exports to the Community during the period in consid-
eration. In the IP, its market share was 1,9 % and its
prices were lower
the Community
industry, but higher than those of dumped imports.

than those of

11. 2. 2000

EN

Official Journal of the European Communities

L 36/15

3.5.4. Bulgaria and the Ukraine

(94)

Exports from Bulgaria decreased between 1995 and the
IP, while those from the Ukraine increased regularly over
the same period. Their respective market shares were
2 % and 1,5 % in the IP, while their prices remained
below those of Community producers and at a level
similar to that of dumped imports.

(99) Although export prices decreased in the IP,

they
dropped in proportion by far less than Community
prices. In the first quarter of 1999, export prices were
still at a level of ECU 370 per tonne, a level
in the
vicinity of
the average Community price observed
between 1995 and 1998 (ECU 378 per tonne) which
still allowed Community industry to make profits.

3.5.5. Cumulated market

share

of Poland,

the Czech

Republic, the FYROM, Bulgaria and the Ukraine

(95)

The cumulated market share of Poland,
the Czech
Republic, the FYROM, Bulgaria and Ukraine peaked at
12,6 % in 1997. However, it dropped by 2,1 percentage
points in the IP, thus reaching a level of 10,5 %.

3.5.6. Conclusion

(96)

the Czech Republic,

Based on the above analysis, it cannot be excluded that
the imports from Poland,
the
former Yugoslav Republic of Macedonia, Bulgaria and
the Ukraine may have contributed to the injury suffered
by the Community industry. This alone however is not
sufficient to break the causal link between the dumped
imports subject
to this investigation and the injury
suffered by the Community industry, particularly in view
of the fact that dumping margins were substantial, as
were the quantities of these imports throughout the
period under consideration, gaining a market share of
13,3 % in the investigation period.

3.6. Export activity of the Community industry

(97) During the period in consideration,

the Community
industry's exports, represented on average about 20 % of
its total sales. Exports expressed in tonnes per month,
increased from 62 548 in 1995 to 83 132 in 1996, to
85 055 in 1997 and then dropped to 59 969 during the
IP.

Over the same period, export prices expressed in ECU
per tonne varied from 390 in 1995, to 347 in 1996, to
379 in 1998 and 412 in the IP,
i.e. always higher,
except in 1996, than prices in the Community market.

(98) Analysis of the available data on a half yearly basis, in
1997 and in the IP, shows however that the difference
between Community
the
and
Community industry progressively increased over the
period.

export prices

of

in volumes, the Community industry's
Despite a fall
exports continued to be made at relatively sustained
prices during the investigation period.

Based on the above, it is therefore concluded, that the
deterioration of the situation of the Community industry
was not used by its export activity.

3.7. Situation of the world market

(100) Some exporting producers argued the overall instability
of the world steel market in 1998 was the main cause of
any fall in the performance of the Community industry.
In particular, it was claimed that the Asian crisis had
disrupted international trade, with former net importer
countries becoming net exporters. This resulted in a
general oversupply and a consequent fall

in prices.

(101)

It is recalled that the steel industry is capital intensive,
and changes in demand in a region often result in rapid
changes in geographical sales patterns. Steel producers
seek to maintain high rates of capacity utilisation and
when demand levels in one part of the world market do
not allow this, producers tend to increase sales to other
parts of the world to achieve desired levels of produc-
tion. International steel trade being very developed, rapid
changes in quantities traded result
in equally rapid
movements in price levels. It is not contested, therefore,
that
fluctuations in world prices and general over
supply, in particular in 1998, influenced the Community
market for hot-rolled plates and had a negative effect on
the situation of the Community industry. Indeed, such
negative effects were worldwide and not confined to the
Community market.

This cannot, however, explain the sharp price depression
in profitability suffered by the
and consequent
fall
its sales in the
Community industry in respect of
Community. As established above,
the Community
industry's prices dropped more sharply in the IP than its
export prices, with the consequent deterioration in prof-
itability observed in respect of Community sales.

In addition, the deterioration of the situation on the
world steel market cannot justify the increase in imports
from China, India and Romania at unfairly set prices.

L 36/16

EN

Official Journal of the European Communities

11. 2. 2000

(102)

4. Conclusion on causation

imports

from Poland,

It cannot be excluded that certain factors other than
dumped imports, such as the worldwide instability of
the steel market,
the Czech
Republic, the former Yugoslav Republic of Macedonia,
Bulgaria and Ukraine or
the behaviour of other
Community producers may have contributed to the
difficult condition of
the Community industry. This
however does not detract from the fact that imports of
hot-rolled steel plates of non-alloy steel originating in
India, China and Romania,
taken in isolation, have
caused material injury to the Community industry. This
conclusion is drawn in particular in view of the loss of
market share and the price depression and consequent
deterioration
the
Community industry, coinciding with the significant
increase in the quantities of dumped imports, which
gained market share and constantly undercut the prices
of the Community industry.

experienced

profitability

by

in

F. COMMUNITY INTEREST

1. Preliminary remarks

(103) The Commission also examined whether, despite the
injurious effects of dumped imports, there were compel-
ling reasons to conclude that it would not be in the
Community interest to impose measures in this case.
Pursuant
the
impact of possible measures on all parties involved in
this proceeding, and the consequences of taking or not
taking measures, were therefore examined.

to Article 21(1) of

the basic Decision,

(104) For this purpose, the Commission had at its disposal the
replies to the Commission's questionnaires submitted by
the Community producers and the importers identified
in the complaint, or which made themselves known in
the course of the investigation. In addition, on initiation
of the proceeding, Community producers were invited
to provide a list of
in the
Community, i.e. users of the product concerned. Each of
the latter subsequently received a questionnaire espe-
cially drawn up for their activity. Although question-
naires were sent to a large number of companies (about
90 companies), very few responses were received.

their main customers

(105) Finally, to complete its analysis, the Commission exam-
the ECSC
ined data submitted in the framework of
Treaty,
in particular as regards the importance of the
production of the product concerned in the total steel
activity of the Community industry. Data on deliveries
made by Community producers on their national
markets were also considered in order to identify the
main consumer industries.

2. Impact on the Community industry and its

related activities

(106) To recapitulate, the Community industry is composed of
them are medium-sized,
two

10 producers,
belonging to larger

steel groups, while

eight of

the

remaining are fully independent small-sized companies.
They are located in six Member States, Austria, France,
Germany, Italy, Spain and the United Kingdom.

the Community
The investigation has
industry faced difficulties linked to the massive inflow of
dumped imports from the three countries concerned.

shown that

In the absence of protective measures, the Community
industry would continue to be confronted by price
undercutting and subsequent price depression that led to
a marked deterioration in its financial situation. Compa-
nies would therefore be obliged to close down certain
production lines, thus putting in danger the steel groups
to which they belong. The Community industry is a
significant consumer of crude steel, and any reduction in
its production has a direct negative impact on upstream
steel production, and consequently on the employment
situation in the Community. It is therefore vital for the
steel sector to maintain the viability of the Community
industry.

The imposition of anti-dumping measures is expected to
restore fair competition and allow Community industry
to benefit from the strong efforts already undertaken to
improve efficiency.

3. Impact on users

(107) As mentioned above, the few responses to the question-
naires from users of the product concerned revealed a
lack of interest in the proceeding.

The analysis of available data in the framework of the
ECSC Treaty showed that deliveries of the Community
industry are mainly destined for merchants, which resell
the product concerned after recutting. The rest is sold to
user industries such as, in decreasing order of impor-
tance in terms of volume, shipbuilding, the steel tube
industry, structural steel work, or boilers and other
metal containers.

that

the product after

resell
recutting
Companies
the unfair prices practised by the
complained about
exporting countries concerned, which led to a serious
deterioration of prices and lowered their margins. They
clearly expressed themselves in favour of protective
measures that would restore fair competition.

Other users did not express their views, but, due to the
price sensitivity of the market, it is likely that the impo-
sition of measures would result in a price increase. The
nature of these user industries, however, is such that the
product concerned represents a low proportion of their
total costs, which may explain their lack of cooperation
in the present proceeding. Any increase in price
resulting from imposition of measures would therefore
be marginal for these industries.

11. 2. 2000

EN

Official Journal of the European Communities

L 36/17

4. Impact on importers/traders

1. Injury elimination level

(108) The Commission sent out questionnaires to a large
number of importers (about 25) in the Community; few
usable questionnaire responses were received, and no
comment was made on the impact on importers of any
protective measures.

In any event, the product concerned, which is in general
imported by specialised steel importer/traders, represents
only a small part in the diverse range of the steel prod-
ucts they handle. Given the number of alternative
sources of supply not subject to antidumping measures,
including the product concerned manufactured by the
Community industry, it is considered that the imposition
of anti-dumping measures would have no more than a
minimal impact on the overall situation of the importer/
traders in question.

5. Conclusion on Community interest

(109) Given the increase of dumped imports in the period
considered, and the significant price undercutting found,
it is likely that this trend would continue and that the
absence of measures would lead to a further deteriora-
tion of the Community industry situation.

Imposition of measures, on the other hand, would help
to restore fair competition and assist the Community
industry to restore profitability and limit the threat of
closures and staff reductions.

As regards recutters, adoption of protective measures
reasonable
would lead to the
margins.

re-establishment of

In respect of user industries and of importer/traders, any
expected price increase would only have a limited
impact.

It is therefore concluded, that in the present circum-
stances, there are no compelling reasons, why it would
not be in the Community interest to impose measures.

G. PROVISONAL DUTIES

(110) Having established that the dumped imports have caused
material
injury to the Community industry and that
there are no compelling reasons not to take action,
provisional anti-dumping measures should be adopted.

(111) For establishing the level of duty, account has been
taken of the dumping margins found and of the amount
of the duty necessary to eliminate the injury caused by
dumped imports to the Community industry. The neces-
sary price increase was determined on the basis of a
comparison of the weighted average import price, as
established for the price undercutting calculations, with
the non-injurious price of the different categories of
quarto plates sold by the Community industry on the
Community market.

(112)

It was considered that the amount of duty necessary to
remove the effects of injurious dumping should allow
the Community industry to cover its costs of production
and obtain a reasonable profit on sales. In this respect, it
was considered that the profit margin before tax of 8 %
on turnover was an appropriate basis, regard being given
to the need for long-term investments and for a rate of
return, which the Community industry could reasonably
expect in the absence of injurious dumping.

Accordingly, injury elimination levels were determined
by comparison between the weighted average non-injur-
ious price per category of the Community industry with
the weighted average selling prices of imported products
for the same category on a per quarter basis. In the case
of Romania, due to the low level of cooperation, the
residual injury margin was calculated by reference to the
category of products which was exported in repres-
entative quantities and for which the highest margin was
found. The difference was
a
percentage of the CIF import price at the Community
frontier customs duty unpaid:

then expressed as

Country/Company

Injury margin
(%)

China

India:

SAIL

Romania: Sidex

Others

13,2

21,8

9,6

18,1

2. Level of provisional duties

(113)

In the light of the foregoing,
it is considered that a
provisional anti-dumping duty should be imposed at the
level of the dumping margin found, but should not be
higher than the injury margin set out above in accord-
ance with Article 7(2) of the basic Decision.

The rates of duty applicable to the free-at-Community-
frontier price before duty shall be:

L 36/18

EN

Official Journal of the European Communities

11. 2. 2000

Country/Company

Dumping margin
(%)

Injury margin
(%)

China

India

— SAIL

Romania

— Sidex

34,3

51,1

51,1

52,6

14,4

13,2

21,8

21,8

18,1

9,6

Proposed anti-dumping duty

(%)

13,2

21,8

21,8

18,1

9,6

(114) The individual company anti-dumping duty rate specified in this Decision was established on the
basis of the findings of the present investigation. Therefore, it reflects the situation found during that
investigation with respect to this company. This duty rate (as opposed to the countrywide duty
applicable to ‘all other companies’) is thus exclusively applicable to imports of products originating
in the country concerned and produced by the company and thus by the specific legal entity
mentioned. Imported products produced by any other company not specifically mentioned in the
operative part of this Decision with its name and address,
including entities related to those
specifically mentioned, cannot benefit from this rate and shall be subject to the duty rate applicable
to ‘all other companies’.

(115) Any claim requesting the application of this individual company's anti-dumping duty rate (e.g.
following a change in the name of the entity or following the setting up of new production or sales
entities) should be addressed to the Commission (1) forthwith with all relevant information,
in
particular any modification in the company's activities linked to production, domestic and export
sales associated with e.g. that name change or that change in the production and sales entities. The
Commission, if appropriate, will, after consultation of the Advisory Committee, amend the Decision
accordingly by updating the list of companies benefiting from individual duty rates.

H. FINAL PROVISIONS

(116) A period should be fixed during which the interested parties may make their views known in writing
and request a hearing. Furthermore, it should be emphasised that all findings made for this Decision
are provisional and may have to be reconsidered for the purpose of any definitive measures which
the Commission may propose,

HAS ADOPTED THIS DECISION:

Article 1

A provisional anti-dumping duty is hereby imposed on imports of flat products of non-alloy steel, not
1.
in coils, not further worked than hot-rolled, without patterns in relief, with a thickness of more than
10 mm and a width of 600 mm or more falling within CN codes ex 7208 51 30 (TARIC code
7208 51 30*10),
(TARIC code
7208 51 91*10) and ex 7208 51 99 (TARIC code 7208 51 99*10), or with a thickness of 4,75 mm up to
10 mm and a width of 2 050 mm or more falling within CN code ex 7208 52 91 (TARIC code
7208 52 91*10) and originating in China, India or Romania.

7208 51 50*10),

ex 7208 51 91

ex 7208 51 50

(TARIC code

The rates of duty applicable to the net free-at-Community-frontier price, before duty, for products

2.
produced by the following exporting companies, shall be:

(1) European Commission

Directorate-General of Trade
Directorate C
DM 24 — 8/38
Rue de la Loi/Wetstraat 200 B-1049 Brussels/Bruxelles.

11. 2. 2000

EN

Official Journal of the European Communities

L 36/19

Country

Company

China

India

All companies

All companies

Romania

Sidex SA, Smârdan Street 1, 6200 Galati

All other companies

Rate of anti-dumping
duty

TARIC
additional code

(%)

13,2

21,8

9,6

18,1

—

—

A069

A999

3.

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

The release for free circulation in the Community of the product referred to in paragraph 1 shall be

4.
subject to the provision of a security equivalent to the amount of the provisional duty.

Article 2

Without prejudice to Article 20 of Decision No 2277/96/ECSC interested parties may request disclosure of
the essential facts and considerations on the basis of which this Decision was adopted, present their views
in writing and request a hearing from the Commission within one month of the date of entry into force of
this Decision.

Pursuant to Article 21(4) of Decision No 2277/96/ECSC, the parties concerned may request a hearing
concerning the analysis of the Community interest and may comment on the application of this Decision
within one month of the date of its entry into force.

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

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

Article 3

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

Done at Brussels, 10 February 2000.

For the Commission

Pascal LAMY

Member of the Commission