Commission Regulation (EC) No 358/2002 of 26 February 2002 imposing a provisional anti-dumping duty on imports of certain tube and pipe fittings, of iron or steel originating in the Czech Republic, Malaysia, Russia, the Republic of Korea and Slovakia and accepting an undertaking offered by an exporting producer in Slovakia
Date: 2002-02-26
Institutions: European Commission
Subjects: anti-dumping duty, import, iron, piping, steel, third country

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Official Journal of the European Communities

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COMMISSION REGULATION (EC) No 358/2002

of 26 February 2002

imposing a provisional anti-dumping duty on imports of certain tube and pipe fittings, of iron or
steel originating in the Czech Republic, Malaysia, Russia, the Republic of Korea and Slovakia and
accepting an undertaking offered by an exporting producer in Slovakia

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

2. Present investigation

Having regard to the Treaty establishing the European
Community,

Initiation

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 2238/2000 (2), and in partic-
ular Article 7 thereof,

After consulting the Advisory Committee,

Whereas:

A. PROCEDURE

1. Proceedings concerning other countries

(1)

(2)

By Regulation (EC) No 584/96 (3), as amended by Regu-
lation (EC) No 1592/2000 (4), the Council
imposed a
definitive anti-dumping duty on imports of certain tube
iron or steel, originating in the
or pipe-fittings, of
People's Republic of China (‘China’), Croatia and Thai-
land. The measures applying to these imports consisted
of a specific duty, except for three Thai exporting produ-
cers
accepted by
Commission Decision 96/252/EC (5). In July 2000, the
anti-dumping measure applicable to the imports of one
of these three companies was repealed, following an
interim review requested by this company, pursuant to
Article 11(3) Regulation (EC) No 384/96 (the ‘basic
absence of
Regulation’)
dumping (6).

from which undertakings were

and which showed

the

Following the publication,
in September 2000, of a
notice (7) of the impending expiry of the anti-dumping
measures in force, the Commission received a request
for an expiry review lodged by the Defence Committee
of EU Steel Butt-welding Fittings Industry, on behalf of
producers representing a major proportion of the total
Community production of certain tube or pipe-fittings
of iron or steel. An examination relating to these meas-
ures was initiated in April 2001 (8).

(1) OJ L 56, 6.3.1996, p. 1.
(2) OJ L 257, 11.10.2000, p. 2.
(3) OJ L 84, 3.4.1996, p. 1.
(4) OJ L 182, 21.7.2000, p. 1.
(5) OJ L 84, 3.4.1996, p. 46.
(6) Commission Decision 2000/453/EC (OJ L 182, 21.7.2000, p. 25).
(7) OJ C 271, 22.9.2000, p. 4.
(8) OJ L 103, 3.4.2001, p. 5.

(3)

(4)

(5)

(6)

(7)

On 17 April 2001 a complaint was lodged by the
Defence Committee of EU Steel Butt-welding Fittings
Industry (‘the complainant’), on behalf of producers
representing a major proportion of certain tube and pipe
fittings. The complaint contained evidence of dumping
of
injury resulting
therefrom, which was considered sufficient to justify the
initiation of a proceeding.

the said product and of material

Consequently, on 1 June 2001,
the Commission
announced by a notice (‘notice of initiation’) published
in the Official Journal of the European Communities (9) the
initiation of an anti-dumping proceeding with regard to
imports into the Community of certain tube and pipe
fittings, of
steel originating in the Czech
Republic, Malaysia, Russia, the Republic of Korea and
Slovakia (‘the countries concerned’).

iron or

Investigation

The Commission officially advised the exporting produ-
cers, importers/traders, users and associations of users
known to be concerned, as well as the representatives of
the exporting countries concerned and the Community
producers of the initiation of the proceeding. Interested
parties were given the opportunity to make their views
known in writing and to request a hearing within the
time limit set out in the notice of initiation.

The Commission sent questionnaires to the Community
producers, all exporters/producers, all importers/traders
as well as all users known to be concerned as well as to
all parties which made themselves known within the
deadline set out in the notice of initiation. Replies to
these
from four
Community producers and six exporting producers, as
well as from nine importers, two user organisations and
seven users.

questionnaires were

received

The Commission sought and verified all the information
deemed necessary for the purpose of a provisional deter-
mination of dumping, injury, causation and Community
interest. Verification visits were carried out at the prem-
ises of the following companies:

(9) OJ C 159, 1.6.2001, p. 4.

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— C o m m u n i t y p r o d u c e r s

— Erne Fittings GmbH & Co, Schlins, Austria

— Interfit, Maubeuge, France

— Siekmann Fittings GmbH & Co. KG, Lohne,

Germany

— Virgilio CENA & Figli SpA, Brescia, Italy

— E x p o r t i n g p r o d u c e r s

— Czech Republic

— Mavet a.s./Bovex s.r.o., Trebic

— Malaysia

industry, construction, energy generation, shipbuilding
and industrial
installations. When sold for use in the
petrochemical industry, the global standard used is the
ANSI standard. For other purposes the most common
standard used in the Community is the DIN standard.

(11) All TPFs have the same basic physical and technical
characteristics, with only the final stage of production
determining the shape which is produced. Also, it was
found that the shape of the TPF does not determine the
use to which it is put. Therefore, they are to be regarded
for the purposes of this investigation as a single product.

Like product

— Anggerik

Laksana

SDN BHD, Kepong,

Selangor Darul Ehsan

(12)

— Wing Tiek Ductile Pipe SDN BHD, Petaling

Jaya

— Slovakia

— Bohus s.r.o., Hronec

— Zeleziarne Podbrezova a.s., Podbrezova

— I m p o r t e r r e l a t e d t o Z e l e z i a r n e P o d b r e z o v a

— Pipex Italia, Milano, Italy

— U n r e l a t e d i m p o r t e r s i n t h e C o m m u n i t y

— IN.RA.BO, Bologna, Italy

— I.R.C. SpA, Cortemaggiore, Italy

— Van Leeuwen, Vilvoorde, Belgium.

The investigation of dumping and injury covered the
period from 1 April 2000 to 31 March 2001 (‘invest-
igation period’ or ‘IP’). As for the trends relevant for the
assessment of
the Commission analysed the
period from 1996 to the end of the investigation period
(‘period under examination’).

injury,

countries

concerned,

The investigation has shown that the TPFs produced in
the
sold domestically and/or
exported to the Community, have the same basic phys-
ical, technical and chemical characteristics as the prod-
ucts
sold in the Community by the complaining
Community producers and are therefore considered to
be like products within the meaning of Article 1(4) of
the basic Regulation.

B. DUMPING

(13)

i.e.

Four countries subject to the present proceeding are
market economy countries,
the Czech Republic,
the Republic of Korea and Slovakia. With
Malaysia,
regard to Russia normal value will be established in the
same way as in market economy countries provided that
the conditions set out in Article 2(7)(b)(c) of the basic
Regulation are met. Alternatively,
the provisions of
Article 2(7)(a) will be applied.

MARKET ECONOMY COUNTRIES

3. Product concerned and like product

1. General methodology

Product concerned

(14)

iron or steel

The product under examination (‘product concerned’) is
certain tube and pipe fittings (other than cast fittings,
flanges and threaded fittings), of
(not
including stainless steel), with a greatest external diam-
eter not exceeding 609,6 mm, of a kind used for butt-
welding or other purposes, currently classifiable within
CN codes ex 7307 93 11 (TARIC code 7307 93 11 91),
7307 93 19 91),
ex 7307 93 19
ex 7307 99 30 (TARIC code 7307 99 30 92)
and
ex 7307 99 90 (TARIC code 7307 99 90 92). The
product is commonly known as tube and pipe fittings
(‘TPFs’).

(TARIC

code

(10)

TPFs are manufactured essentially by cutting and
forming tubes and pipes. TPFs are used to join tubes and
pipes and come in different shapes: elbows, reducers,
tees and caps, as well as different sizes and material
grades. They are used mainly in the petro-chemical

The general methodology set out hereinafter has been
applied to imports from all exporting market economy
countries concerned. The presentation of the findings on
dumping for
the countries
concerned therefore only describes what is specific for
each exporting country.

from each of

imports

Normal value

(15) As

far as

the determination of normal value

is
concerned, the Commission first established, for each
exporting producer, whether its total domestic sales of
TPFs were representative in comparison with its total
export sales to the Community.
In accordance with
Article 2(2) of the basic Regulation, domestic sales were
considered representative when the total domestic sales
volume of each exporting producer was at least 5 % of
its total export sales volume to the Community.

(8)

(9)

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(16)

(17)

The Commission subsequently identified those types of
TPFs, sold domestically by the companies having repres-
entative domestic sales, that were identical or directly
comparable with the types sold for export
to the
Community.

For each type sold by the exporting producers on their
domestic markets and found to be directly comparable
to the type sold for export to the Community, it was
established whether domestic sales were sufficiently
representative for the purposes of Article 2(2) of the
basic Regulation. Domestic sales of a particular type of
TPF were considered sufficiently representative when the
total domestic sales volume of that type during the IP
represented 5 % or more of the total sales volume of the
comparable type of TPF exported to the Community.

(18) An examination was also made as to whether the
domestic sales of each type could be regarded as having
been made in the ordinary course of trade, by estab-
lishing the proportion of profitable sales to independent
customers of the type in question. In cases where the
sales volume of TPFs, sold at a net sales price equal to or
above the calculated cost of production, represented
80 % or more of the total sales volume and where the
weighted average price of that type was equal to or
above the cost of production, normal value was based
on the actual domestic price, calculated as a weighted
average of the prices of all domestic sales made during
the IP, irrespective of whether these sales were profitable
or not. In cases where the weighted average price was
below the cost of production or where the volume of
profitable sales of TPFs represented less than 80 % but
10 % or more of the total sales volume, normal value
was based on the actual domestic price, calculated as a
weighted average of profitable sales only.

(19)

In cases where the volume of profitable sales of any type
of TPF represented less than 10 % of the total sales
volume, it was considered that this particular type was
sold in insufficient quantities for the domestic price to
provide an appropriate basis for the establishment of the
normal value.

realised by each of

general and administrative expenses (‘SG & A’) and a
reasonable margin of profit. To this end, the Commis-
sion examined whether the SG & A incurred and the
profit
the producing exporters
concerned on the domestic market constituted reliable
data. Actual domestic SG & A expenses were considered
reliable where
the
company concerned could be regarded as representative.
The domestic profit margin was determined on the basis
of domestic sales made in the ordinary course of trade.

the domestic sales volume of

Export price

(22)

In all cases where TPFs were exported to independent
customers in the Community,
the export price was
established in accordance with Article 2(8) of the basic
Regulation, namely on the basis of export prices actually
paid or payable.

(23) Where the export sale was made via a related importer,
the export price was constructed pursuant to Article 2(9)
of the basic Regulation, namely on the basis of the price
at which the imported products were first resold to an
independent buyer.
In such cases, adjustments were
made for all costs incurred between importation and
resale and for profits accruing, in order to establish a
reliable export price. As far as the profit margin is
concerned, the latter was provisionally established on
the basis of the information available from cooperating
unrelated importers.

Comparison

(24)

For the purpose of ensuring a fair comparison between
the normal value and the export price, due allowance in
the form of adjustments was made for differences which
were claimed and demonstrated to affect price compar-
ability in accordance with Article 2(10) of the basic
Regulation. Appropriate adjustments were granted in all
cases where they were found to be justified, accurate and
supported by verified evidence.

(20) Wherever domestic prices of a particular type sold by an
exporting producer could not be used in order to estab-
lish normal value, another method had to be applied. In
this regard,
the
product concerned charged on the domestic market by
In all cases where this was not
another producer.
possible, and in the absence of any other reasonable
method, constructed normal value was used.

the Commission used the prices of

Dumping margin for the companies investigated

(25) According to Article 2(11) of the basic Regulation, for
each cooperating exporting producer
the weighted
average normal value by type was compared with the
weighted average export price.

(21)

In all cases where constructed normal value was used
and in accordance with Article 2(3) of the basic Regula-
tion, normal value was constructed by adding to the
manufacturing costs of
the exported types, adjusted
where necessary, a reasonable percentage for selling,

(26)

For non-cooperating companies, a ‘residual’ dumping
margin was determined in accordance with Article 18 of
the basic Regulation, on the basis of the facts available.

Residual dumping margin

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(27)

(28)

For those countries where there was no reason to believe
that any exporting producer abstained from cooperating,
it was decided to set the residual dumping margin at the
level of
the cooperating company with the highest
dumping margin in order to ensure the effectiveness of
any measures.

For those countries where the level of cooperation was
low, the residual dumping margin was determined on
the basis of the highest dumped export sales to the
Community of representative quantities. This approach
was also considered necessary in order to avoid giving a
bonus for non-cooperation and in view of the fact that
there were no indications that a non-cooperating party
had dumped at a lower level.

In order to determine in this case for each country
there was any abstention
concerned whether or not
from cooperation,
import volumes reported by
cooperating exporting producers were compared with
the information provided by Eurostat for the country in
question.

total

2. Czech Republic

(29)

Two exporting producers replied to the questionnaire.
These replies included data on products made by two
companies in the same factory during different parts of
the IP since the operational management of this factory
was transferred from Mavet
to Bovex on 1 January
2001. Therefore, two different calculations were made
to arrive at
for both
companies.

individual dumping margins

Dumping margin

(33)

The comparison between the normal value and the
export price showed the existence of dumping in respect
of the cooperating exporting producers. The provisional
dumping margins expressed as a percentage of the cif
import price at the Community border are:

Mavet a.s.:

Bovex s.r.o.:

17,6 %

22,4 %.

(34)

It was found that the level of cooperation for the Czech
Republic was high and the residual provisional dumping
margin was set at the same level as for the cooperating
company with the highest dumping margin, i.e. 22,4 %.

3. Malaysia

(35)

Both known exporting producers replied to the ques-
tionnaire. However, one of these exporting producers
refused to provide the necessary information. In partic-
ular, the company claimed that is was unable to provide
transaction-by-transaction listings of its domestic and
export sales and it also refused to provide copies of
invoices to the Commission. The company was warned
about the consequences of such non-cooperation, but
did not change its position. It was therefore decided to
apply Article 18 of the basic Regulation and to base
findings on the facts available for this company. Since
no company-specific data could be used, it was decided
to give the residual duty to this company.

Normal value

Normal value

(30) Normal value was established as described in recitals 15
to 21, i.e. on the basis of the prices paid or payable, in
the ordinary course of trade, by independent customers
on the domestic market in accordance with Article 2(1)
of the basic Regulation and constructed in accordance
with Article 2(3) of the basic Regulation for the type of
the product concerned sold to the Community.

(36) Normal value was established as described in recitals 15
to 21, i.e. on the basis of the prices paid or payable, in
the ordinary course of trade, by independent customers
on the domestic market in accordance with Article 2(1)
of the basic Regulation and constructed in accordance
with Article 2(3) of the basic Regulation for the type of
the product concerned sold to the Community.

Export price

Export price

(31)

The export sales were made directly to independent
customers in the Community and were therefore estab-
lished pursuant to Article 2(8) of the basic Regulation.

(37)

The export sales were made directly to independent
customers in the Community and were therefore estab-
lished pursuant to Article 2(8) of the basic Regulation.

Comparison

Comparison

(32) Adjustments were made for discounts, transport and

credit costs.

(38) Adjustments were made
handling and credit costs.

for discounts,

transport,

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(39)

(40)

(41)

The company concerned claimed an adjustment for level
of trade on the basis of the fact that on the domestic
market sales to end-users had consistently higher prices
than sales to retailers and that it carried out consistently
different functions with regard to sales to these two
different sales channels. Since it was found that this
claim was justified the adjustment was granted.

Dumping margin

The comparison between the normal value and the
export price showed the existence of dumping in respect
of the cooperating exporting producer. The provisional
dumping margin expressed as a percentage of the cif
import price at the Community border is:

Anggerik Laksana Sdn Bhd:

59,2 %.

(46)

It was found that the level of cooperation for Malaysia
was very low and the residual provisional dumping
margin was therefore set at the level of the highest
dumped product type which was found to be repres-
entative,

i.e. 75,0 %.

during the IP. These products were excluded from the
dumping calculation for Slovakia.

Normal value

(45) Normal value was established as described in recitals 15
to 21, i.e. on the basis of the prices paid or payable, in
the ordinary course of trade, by independent customers
on the domestic market in accordance with Article 2(1)
of the basic Regulation and constructed in accordance
with Article 2(3) of the basic Regulation for the type of
the product concerned sold to the Community.

Export price

Export sales made directly to independent customers in
to Article
the Community were established pursuant
2(8) of the basic Regulation, whereas export prices for
sales via the related importer of one of the exporting
producers were constructed according to Article 2(9) of
the

4. Republic of Korea

the

information available was

(42) No Korean exporting producer replied to the question-
naire. It was therefore necessary to apply Article 18 of
the basic Regulation and to base findings on the facts
available. With respect to the normal value, the most
reliable
information
contained in the complaint since it was a constructed
increased by a not
value based on the cost of tubes,
unreasonable estimate of the manufacturing costs. As
regards the export price, given that TPFs are registered as
an ex code in Eurostat, which makes the information
less precise, and given the quality of the information
provided in the complaint, which was based on a price
offer, it was considered that the complaint constituted
the more reliable information available. Both the normal
value and the export price were thus determined on the
basis of the complaint since it was considered that it
constituted the most reasonable basis.

(43)

The comparison between the normal value and the
export price showed the existence of dumping. The
provisional dumping margin expressed as a percentage
of the cif import price at the Community border is:

Republic of Korea:

83,9 %.

5. Slovakia

(44)

Both known exporting producers replied to the ques-
tionnaire. One importer in the Community related to
one of the exporting producers replied to the annex to
the questionnaire intended for related companies. The
same exporting producer also exported some products
manufactured in the Czech Republic to the Community

Comparison

(47) Adjustments were made for discounts, transport, credit

costs and commissions.

(48) One company claimed an adjustment for physical char-
acteristics, notably for the extra blasting and passivating
which is required on the domestic market. However, the
company was not able to provide any evidence for the
amount of the requested adjustment nor of the market
value of the difference. Therefore, the claim had to be
rejected.

(49)

The same company also requested an adjustment for
packing on the basis of the fact that on the domestic
market the pallets used are often not full, as opposed to
those going to export markets. However, since the
company was not able to provide any evidence for the
amount of the requested adjustment and since no effect
on the price was demonstrated, this adjustment also had
to be rejected.

Dumping margin

(50)

The comparison between the normal value and the
export price showed the existence of dumping in respect
of the cooperating exporting producers. The provisional
dumping margins expressed as a percentage of the cif
import price at the Community border are:

Bohus s.r.o.:

7,7 %

Zeleziarne Podbrezova a.s.:

15,0 %.

(51)

It was found that the level of cooperation for Slovakia
was high and the residual provisional dumping margin
was set at
the cooperating
company with the highest dumping margin, i.e. 15,0 %.

the same level as for

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RUSSIA

weighted average of the normal values established for
the cooperating Slovak exporting producers.

Market economy status

Export price

(52) No Russian exporting producer

requested market
economy status (‘MES’) pursuant to Article 2(7)(b) of the
basic Regulation. Therefore, the provisions of Article
2(7)(a) had to be applied.

(58)

Since no Russian exporting producer replied to the ques-
tionnaire and in the absence of any other reasonable
basis, the export price for Russia was established on the
basis of the complaint. The information in the complaint
was based on Eurostat.

Analogue country

Comparison

(53) According to Article 2(7) of the basic Regulation, for
non-market economy countries and for companies in
such countries to which MES pursuant to Article 2(7)(b)
of the basic Regulation could not be granted, normal
value has to be established on the basis of the price or
constructed value in a market economy third country
(‘analogue country’).

(54)

(55)

(56)

In the notice of initiation, the Commission indicated its
intention to use the Czech Republic or Slovakia as an
appropriate analogue country for the purpose of estab-
lishing normal value for Russia. No interested party
commented on this proposed choice of analogue
country.

The investigation showed that in Slovakia prices were
governed by market forces, two producers competed on
the domestic market and both cooperated, there were
significant imports from third countries and there were
indications that the production technology and process
were, to a large extent, similar in Slovakia and Russia.
Moreover, the domestic sales volume was significant as
compared to Russian export
the product
concerned to the Community.

sales of

In view of the above, it was concluded that Slovakia was
the most appropriate analogue country and that under
these circumstances the selection of Slovakia seemed to
be an appropriate and not unreasonable choice of
analogue country for establishing normal value in
respect of Russia for the product concerned, in accord-
ance with Article 2(7) of the basic Regulation.

Normal value

(57) No Russian exporting producer replied to the question-
naire. Therefore,
in order to calculate the provisional
dumping margin, the Commission had to make use of
the facts available in accordance with Article 18 of the
basic Regulation. In the circumstances of this case, i.e.
no information on the product mix of Russian exports,
and pursuant to Article 2(7)(a) of the basic Regulation,
the
normal value was determined on the basis of

(59)

For the purpose of a fair comparison, adjustments were
made for differences in transport and insurance costs,
which were found to affect prices and price compar-
ability.

Dumping margin

(60)

(61)

In accordance with Article 2(11) of the basic Regulation,
the weighted average normal value was compared with
the weighted average export price on an ex-works basis.
This comparison showed the existence of dumping. The
countrywide
provisional
dumping margin expressed as a percentage of the cif
value is 43,3 %.

single weighted

average

C. INJURY

1. Definition of the Community industry

around

represented

The four Community producers which replied to the
questionnaire
the
Community production. It should be noted that three
the
other producers,
Community production, did not fully reply to the ques-
tionnaire within the granted deadline even though they
supported the investigation.

representing around 10 % of

60 % of

(62) During the IP,

these

two of

imported from the

the above four complainant
Community producers imported the product concerned,
and one of
countries
concerned. Imports of the product concerned by these
two complainants represented 2,5 % and 10 % respec-
tively of their total sales volume in the Community.
However, despite these re-sales of imported TPFs, the
primary activity of each of these companies remained in
the Community. Furthermore, for both of these compa-
nies the imports completed their product range. Conse-
quently, the trading activities of these producers did not
affect their status as Community producers. These four
Community producers are therefore deemed to consti-
tute the Community industry within the meaning of
Article 4(1) and Article 5(4) of the basic Regulation.

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2. Community consumption

Prices of dumped imports

(63)

It should be noted that, according to the complaint, part
of the EU producers' domestic sales are made to stock-
ists (which did not cooperate), that in turn export signif-
icant quantities of the products outside the Community.
The apparent Community consumption was therefore
established on the basis of the production volume of the
Community industry and of
the other Community
producers (on the basis of the information contained in
the complaint), and on the import and export volume
based on Eurostat data.

(64) On this basis, Community consumption first increased
from around 57 000 tonnes in 1996 to around 65 000
tonnes in 1998, but subsequently dropped to around
51 000 tonnes in the IP.

3. Imports from the countries concerned

(65)

(66)

Cumulative assessment of the effects of the imports concerned

The Commission considered whether imports from the
countries concerned should be assessed cumulatively on
the basis of the criteria set out in Articles 3(4) of the
basic Regulation.

The dumping margins found regarding imports from all
countries concerned are more than de minimis,
the
volumes of imports are not negligible and the cumula-
tive assessment was considered appropriate in view of
the conditions of competition both between the imports
and between the imports and the like Community
product. This is evidenced by the fact that all imports
volumes were substantial and their market shares have
increased between 1996 and the IP, that the TPFs sold
were alike and distributed via the same trade channels
and that they all undercut the Community industry's
prices and lead to a price depression of the Community
industry's TPFs. Price trends for individual countries on
average were not considered meaningful in this context,
as they are likely to be influenced by changes in the
product mix.

(69) Although price trends

individual countries on
for
average were influenced by changes in the product mix,
an average weighted average price of imports originating
in the countries concerned was calculated. It increased
from EUR 1 378/tonne in 1996 to EUR 1 408/tonne in
It should however be noted that, during the
the IP.
period under examination,
the average price firstly
increased and reached the level of EUR 1 628/tonne in
1997, an increase of 18 %. Thereafter, it decreased by
around 15 %, between 1997 and the IP, when the
Community consumption also followed a downward
trend.

Undercutting

(70)

(71)

the countries concerned undercut

The Commission has examined whether the exporting
the
producers of
prices of the Community industry during the IP. For the
purposes of this analysis, the cif prices of the exporting
producers have been adjusted to a Community frontier,
duty paid level. These prices have then been compared,
at the level of appropriate groups of product types, to
Community producers' ex-works prices.

The undercutting margins found on this basis, by
country, either based on cooperating exporting produ-
cers, where available, or Eurostat figures, expressed as a
percentage of the Community producers' prices, are as
follows:

Country

Price undercutting

Czech Republic

Between 16 % and 18 %

Malaysia

Russia

Republic of Korea

Between 40 % and 60 %

24 %

21 %

Slovakia

Between 2 % and 40 %

It should also be noted that there was also price depres-
sion since the Community industry was loss-making
during the IP.

4. Situation of the Community industry

(67)

Therefore,
it is provisionally concluded that dumped
imports originating in the countries concerned should
be assessed cumulatively.

Preliminary remark

Volume and market share of the imports concerned

(68)

Imports of TPFs from the countries concerned into the
Community increased in volume from 1 157 tonnes in
1996 to 6 242 tonnes in the IP. The corresponding
market share increased from 2,0 % in 1996 to 12,3 % in
the IP.

(72) A number of economic indicators of the Community
industry presented below show a positive development
for the years 1996 to 1998, subsequently followed by a
deterioration thereafter. A closer analysis shows that all
improved
indicators
between 1996 and 1998, i.e. following the imposition
of measures against China and Thailand in 1996. This
changed as from 1998 to the IP, when crucial indicators
clearly deteriorated, although some others remained rela-
tively stable.

and prices

investment

except

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Production

Profitability and return on investments

(73)

The Community industry's production first increased by
around 10 % between 1996 and 1998, from around
42 500 tonnes to around 46 500 tonnes, then dropped
back to the 1996 level, but in the IP it went up again to
the level reached in 1998.

Capacity and capacity utilisation rates

total production capacity of

The
the Community
industry was relatively stable over the period under
examination and therefore the capacity utilisation level
followed a trend identical to the one of the production
volume. It was at 48 % in 1996, increased to 53 % in
1998, subsequently fell back to 49 % in 1999 and then
increased again to 53 % in the IP.

Sales volume of the product concerned for consumption in the
Community

the sales volume of

(74) Only sales destined for Community consumption have
been considered. On this basis, during the period under
the Community
examination,
decreased from around 30 100 tonnes in 1996 to
around 24 300 tonnes during the IP, an decrease of
around 19 %. It is, however, important to notice that
between 1996 and 1998 the sales volume increased by
9 %, reaching a level of around 33 000 tonnes in 1998,
and then fell back to around 24 300 tonnes in the IP.

Stocks

(75)

The level of stocks decreased by around 4 % between
1996 and the IP, from around 5 600 tonnes in 1996 to
around 5 400 tonnes in the IP. While it increased during
the first four years of the period under examination,
reaching a peak at around 6100 tonnes in 1999,
it
started to decrease considerably thereafter.

Market share

(78)

(79)

The Community industry managed to increase its profit-
ability (profits/losses as a percentage of turnover) from
3,1 % in 1996 to 5,2 % in 1997. After that year,
however, profitability continuously eroded and was in
clearly negative territory during the IP, at – 3,5 %.

The return on investments broadly followed the profit-
ability curve during the period under examination, from
7,5 % in 1996 to – 3,7 % in the IP. It should be noted
that both direct investments and a portion of invest-
ments indirectly related to the production of the product
concerned have been considered.

Cash flow

(80)

The cash-flow generated by the sales of the product
concerned increased by around 65 % between 1996 and
1998, from EUR 3 009 000 to EUR 4 939 000, and
then dramatically decreased to EUR 281 000 during the
IP.

Ability to raise capital

(81) None of the companies mentioned any current difficulty
to raise capital. However, should the cash flow continue
to deteriorate, this situation may change.

Employment and wages

(82)

Employment in the Community industry did not follow
a clear trend. It increased between 1996 and 1998, from
547 to 580 employees, decreased thereafter, but
increased again to its 1998 level during the IP. The
increase during the IP is to be put in relation to an
increasing production during the same period. Overall
wages followed a similar pattern as the number of
persons employed.

(83)

The average wages per employee remained relatively
stable during the years 1996 and 1997, and thereafter it
gradually increased. Between 1996 and the IP,
the
overall

increase was of around 7 %.

(76)

The Community industry lost 4,9 percentage points in
market shares between 1996 and the IP, from 52,8 % in
1996 to 47,9 % in the IP. From 1999 there is a clear
trend that the position of the Community industry on
the market deteriorated, as market shares decreased from
to 54,7 % in 1999 to 47,9 % in the IP.

Productivity

(84)

The productivity increased by 3 % between 1996 and
1998, from 77,6 tonnes per employee to 80,2. It then
dropped, but reached back its 1998 level during the IP.

Sales prices of the Community industry

Investment

(77)

The Community industry' average unit net sales price
decreased from EUR 1 812 in 1996 to EUR 1 413
during the IP, a decrease of 22 %. The sales prices
dropped by approximately 5 % every single year.

(85) New investments remained at a relatively stable level
during the period under examination and reached
around EUR 2,5 million in the IP. These investments
mainly consisted of renewal or improvement of existing
equipment and are not related to any capacity increases.

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Growth

2. Effect of the dumped imports

(86) As explained above, between the years 1996 and 1998,
the Community industry could benefit from the growing
market, and increased its sales volume and market share.
Thereafter however, the Community consumption and
the Community industry sales decreased.
Its market
share also deteriorated.

(90)

Magnitude of the dumping margin

(87) As concerns the impact on the Community industry of
the magnitude of the actual margins of dumping, given
the volume and the prices of the imports from the
countries concerned, this impact cannot be considered
to be negligible.

Between 1996 and 1998,
imports from the countries
concerned remained at a fairly stable level. This changed
the period under
radically during the remainder of
examination. Between 1998 and the IP, dumped imports
from the countries concerned significantly increased in
terms of volume and their market share rose from 2,7 %
to 12,3 %. As regards the corresponding export prices,
increased between 1996 and 1998, but
they first
decreased again between 1998 and the IP. The sharp
increase of imports from the countries concerned and
the significant decrease of
import prices took place
simultaneously with the deterioration of the situation of
the Community industry in terms of decreasing sales
and market share as well as price reductions and a
deteriorating profitability, as from 1998. Moreover, the
prices of the Community industry were, during the IP,
significantly undercut by most of the dumped imports.

5. Conclusion on the analysis of the situation of the

Community market

3. Effect of other factors

Imports from other third countries

(88)

The introduction of the measures against China and
Thailand clearly had a positive impact on the economic
situation of the Community industry. Most of the injury
indicators showed a positive development between 1996
and 1998. Production, capacity utilisation and sales
volume went up, resulting in a gain in market shares
and increasing employment. The profitability indicators
such as profits/losses as a percentage of turnover, return
on investments and cash flow also developed favourably.
the economic situation of
the
However, after 1998,
Community
deteriorated: while
generally
industry
production remained relatively stable and capacity utili-
sation and employment slightly increased, crucial indica-
tors such as the volume of sales and market shares, as
well as profitability, return of investments, cash flow and
prices decreased.
the
It
Community industry suffered material

is therefore concluded that

injury.

D. CAUSATION

1. Introduction

examined whether

the Commission has

(89) According to Article 3(6) and (7) of the basic Regula-
tion,
the
dumped imports of the product concerned originating in
the countries concerned have caused injury to the
Community industry to a degree that enables it to be
classified as material. Known factors other than the
dumped imports, which could at
the same time be
injuring the Community industry, were also examined to
ensure that possible injury caused by these other factors
was not attributed to the dumped imports.

(91)

Imports from other third countries increased over the
period under examination, from around 6 200 tonnes in
1996 to around 8 123 tonnes in the IP. The corre-
sponding market share also increased, from 10,9 % in
1996 to 16,0 % in the IP. Given that there is a large
number of other third countries,
it was provisionally
concluded that, although some injury might have been
inflicted by other third countries, these imports did not
break the causal link between the dumped imports from
the countries concerned and the material injury suffered
by the Community industry.

Further factors

(92)

The Commission also examined whether further factors
than the abovementioned ones might have contributed
to the injury suffered by the Community industry,
having regard to, in particular, a possible contraction in
demand, developments in technology and productivity
of the Community industry and its export performance.

(93) As

to the development of demand,

the apparent
consumption of TPFs first increased between 1996 and
1998, but then sharply decreased. While the decline in
demand since 1998 is likely to have contributed to
increased competition and exerted a certain downward
pressure on prices. However, in the absence of the price
pressure from the dumped imports, the decline in prices
and profitability of the Community industry would have
been much less marked.

(94)

In relation to the developments in technology and
productivity of the Community industry, it has carried
out considerable investments
to lose
competitiveness and it has increased its productivity.

in order not

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L 56/13

(95)

the Community
Concerning the export performance,
industry has increased its direct sales in export markets
over the period under examination by 78 %, where it
was likewise in competition with the exporting produ-
cers concerned. Direct export sales accounted for around
the Community industry
25 % of
during the IP. On this basis, the Community industry
has shown itself to be competitive. The export activity
cannot therefore have contributed to the injury suffered
by the Community industry.

the total sales of

(96)

It was therefore provisionally concluded that these devel-
opments did not break the causal
link between the
dumped imports and the material injury suffered by the
Community industry.

4. Conclusion on causation

(97)

It is provisionally concluded that the dumped imports
originating in the Czech Republic, Malaysia, Russia, the
Republic of Korea and Slovakia have caused material
injury suffered by the Community industry, given the
coincidence in time between the price decreases, the
undercutting found and the increased volumes and
market shares of the dumped imports with the decline in
sales volume, prices, profitability and market shares of
the Community industry. In addition, no other known
factors were found to break the causal
link between
dumped imports from the countries concerned and this
injury.

E. COMMUNITY INTEREST

1. Preliminary remark

(98)

In accordance with Article 21 of the basic Regulation, it
was examined whether the imposition of anti-dumping
the
measures would be
interest of
against
Community as a whole. The determination of
the
Community interest was based on an examination of all
the
the
interests
the importers/traders, and the
Community industry,
users of the product concerned.

involved i.e.

those of

various

the

(99)

In order to assess the likely impact of the imposition or
non-imposition of measures, the Commission requested
information from all interested parties which were either
known to be concerned or which made themselves
known.

(100) On this basis it was examined, whether, despite the
conclusions on dumping, on the situation of
the
Community industry, and on causation, compelling
reasons exist which would lead to the conclusion that it

is not in the Community interest to impose measures in
this particular case.

2. Interest of the Community industry

(101) The Community industry has proven to be a structurally
viable industry. This was confirmed by the positive
development of its economic situation at a time when
effective competition had been restored after the imposi-
tion of the anti-dumping measures on imports origin-
it managed to
ating in China and Thailand.
increase its cash flow substantially and it improved its
profitability from 3,1 % in 1996 to 5,2 % in 1997, when
the combined market share of dumped imports from the
countries concerned was still relatively low (below 3 %).

Indeed,

(102) Were measures to be imposed, and with the ensuing
return to fair market conditions, it is concluded that the
Community industry would be able to restore its finan-
cial position and to maintain its activities related to the
product concerned in the Community.

3. Interest of unrelated importers/traders

(103) The Commission sent questionnaires to 65 unrelated
importers/traders. Nine importers replied to the ques-
tionnaire and the Commission services verified the
replies of three companies on spot. Of the nine impor-
ters that replied, only three opposed expressly possible
measures. One of these opposed on the grounds of costs
involved in finding new suppliers. Two companies
opposed on the grounds of possible job losses. These
importers, however, buy TPFs from various countries of
origin and still have the choice to buy from exporting
producers with low measures or from countries not
this proceeding without measures.
concerned by
Compared to the total number of
these
effects were not considered to constitute a reason not to
impose provisional anti-dumping measures.

importers,

(104) 16 importers replied that they were not concerned by
the proceeding since they did not purchase from the
countries concerned during the period under exam-
ination.

(105) Given that a number of

importing companies also
traded in Community produced TPFs, and given the low
number of companies importing from the countries
concerned expressly objecting measures, combined with
the fact that, were measures imposed, other suppliers
outside the Community with no duty would still be
available, it can accordingly be concluded that the impo-
sition of measures would, overall, not have a significant
negative effect on importers or traders.

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27.2.2002

4. Interest of users

6. Conclusion on Community interest

(106) The users of the product concerned are mainly operating
in the petrochemical
industries as well as industries
active in the building sector. The Commission sent out
questionnaires to 23 user companies and five European
associations of potential users. Two associations replied.
One replied that it does not see the need to intervene
and the other one stated that its members did not use
the product concerned originating in the countries
concerned. Seven user companies replied. Three of them
stated that they did not use products originating in the
they
countries
purchased their material
inside the
Community without being aware of the origin of the
products. No user association or company opposed to
the proceeding.

concerned and four

from suppliers

replied that

(111) Given the above reasons, it is provisionally concluded
that it is unlikely that the possible impact on importers
and user industries would offset the positive effect on
the Community industry of the measures against injur-
ious dumping. Accordingly there are no compelling
reasons against the imposition of anti-dumping meas-
ures concerning imports originating in the countries
having found to have practised injurious dumping.

F. PROVISIONAL ANTI-DUMPING MEASURES

(107) This lack of opposition confirms that the TPFs represent
a very small part of total production costs for companies
using the product concerned and that an imposition of
measures would not have a significant negative effect on
users.

1. Injury elimination level

5. Competition and trade distorting effects

(108) The countries concerned accounted for 53 % of all
imports of TPFs during the IP. TPFs originating in China
and Thailand, which are currently subject
to anti-
dumping duties, accounted for a further 13 % of
imports. Whilst some exporting producers from the
countries
concerned may withdraw from the
Community market, it is reasonable to assume that most
of them will continue to supply TPFs at a non-injurious
price.
injurious dumping
from the countries concerned will make the Community
market more attractive to other sources of supply.

In addition, the absence of

(109) The continuing need for imports will ensure that a
number of competitors to the Community producers
remain on or enter the market. Together with the
Community producers,
they will ensure that users
continue to have the choice of different and competing
suppliers of the product concerned.

(112)

the conclusions reached with regard to
In view of
dumping,
injury, causation, and Community interest,
provisional anti-dumping measures should be taken in
order to prevent
further injury being caused to the
Community industry by the dumped imports. To estab-
lish the level of duty, account has been taken of the
dumping margins found and of the amount of duty
necessary to eliminate the injury suffered by the
Community industry.

(113) To establish the level of duty needed to remove the
injury caused by dumping,
injury margins have been
calculated. The necessary price increase was determined
on the basis of a comparison of the weighted average
import price with the non-injurious price of the product
concerned sold by the Community industry on the
Community market.

(114) The non-injurious price has been obtained by taking the
actual sales prices of the Community industry, adjusting
these to a break-even point, and then finally adding a
profit margin that may reasonably have been achieved in
the absence of injurious dumping. The profit margin
used for this calculation was 5 % of turnover, as this
level was reached in 1997, at a time when measures
were in place against China, Croatia and Thailand and
when the market share of imports from the countries
concerned was still relatively low.

(110) For these reasons, it is provisionally concluded that there
are no reasons why the imposition of the proposed
anti-dumping duties will have a significant impact on
competition. On the contrary,
it would eliminate the
trade-distorting effects of injurious dumping.

(115) The difference resulting from the comparison between
the weighted average import price and the non-injurious
price of the Community industry was then expressed as
a percentage of the total cif import value.

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2. Provisional measures

(116)

In the light of the foregoing, it is considered that, in accordance with Article 7(2) of the basic
Regulation, a provisional anti-dumping duty should be imposed in respect of the Czech Republic,
Malaysia, Russia, the Republic of Korea and Slovakia. This duty should be imposed at the level of the
dumping margins found, except for the Republic of Korea and Zeleziarne Podbrezova a.s., where the
injury margin was found to be lower than the dumping margin.

(117) On the basis of the above, the provisional duties are as follows:

Country

Company

Provisional duty
%

Czech Republic

Mavet a.s.

Others

Malaysia

Anggerik Laksana Sdn Bhd

Others

All companies

All companies

Zeleziarne Podbrezova a.s.

Others

Russia

Korea

Slovakia

3. Undertakings

17,6

22,4

59,2

75,0

43,3

41,0

2,3

7,7

(118) One exporting producer in Slovakia has offered a price undertaking in accordance with Article 8(1)
of the basic Regulation. The Commission considers that the undertaking can be accepted since the
company agreed to sell the product concerned at or above price levels which eliminate the injurious
effects of dumping. Furthermore, the regular and detailed reports which the company undertook to
provide to the Commission will allow for effective monitoring.
the company is
exclusively producing and selling the product concerned and therefore the risk of it circumventing
the undertaking is limited.

In addition,

(119)

In order to ensure the effective respect and monitoring of the undertaking, when the request for
release into free circulation pursuant to the undertaking is presented to the relevant customs
authority, exemption from the anti-dumping duty shall be conditional on the presentation of a
commercial invoice containing at least the elements listed in the Annex to this Regulation. This level
of information is also necessary to enable customs authorities to ascertain that shipments correspond
to the commercial documents at the required level of detail, and that they are covered by the
undertaking. Where no such invoice is presented, or where it does not correspond to the product
concerned as presented to customs, the appropriate amount of anti-dumping duty will be payable
instead.

(120)

In the event of suspected breach, breach or withdrawal of the undertaking an anti-dumping duty
may be imposed, pursuant to Article 8(9) and (10) of the basic Regulation.

G. FINAL PROVISION

(121)

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

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HAS ADOPTED THIS REGULATION:

Article 1

A provisional anti-dumping duty is hereby imposed on imports of tube and pipe fittings (other than
1.
cast fittings, flanges and threaded fittings), of iron or steel (not including stainless steel), with a greatest
external diameter not exceeding 609,6 mm, of a kind used for butt-welding or other purposes, falling
within CN codes ex 7307 93 11 (TARIC codes 7307 93 11*91 and 7307 93 11*99), ex 7307 93 19
(TARIC codes 7307 93 19*91 and 7307 93 19*99), ex 7307 99 30 (TARIC codes 7307 99 30*92 and
7307 99 30*98) and ex 7307 99 90 (TARIC codes 7307 99 90*92 and 7307 99 90*98) and originating in
the Czech Republic, Malaysia, Russia, the Republic of Korea and Slovakia.

The rate of the provisional anti-dumping duty applicable to the net, free-at-Community-frontier price,

2.
before duty, shall be as follows for the products manufactured by:

Country

Company

Czech Republic

Mavet a.s., Trebic

All other companies

Malaysia

Anggerik Laksana Sdn Bhd, Selangor Darul
Ehsan

All other companies

Russia

All companies

Republic of Korea

All companies

Slovakia

Zeleziarne Podbrezova a.s., Podbrezova

All other companies

Provisional anti-
dumping duty
(%)

TARIC additional
code

17,6

22,4

59,2

75,0

43,3

41,0

2,3

7,7

A323

A999

A324

A999

A325

A999

Notwithstanding paragraph 1, the provisional anti-dumping duty shall not apply to imports released

3.
into free circulation in accordance with Article 2.

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.

5.

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

Article 2

1.
The undertaking offered by the company below in connection with the present anti-dumping
proceeding is hereby accepted. Imports declared for release into free circulation under the following TARIC
additional code which are produced and directly exported (i.e. shipped and invoiced) by that company to a
company in the Community acting as an importer shall be exempt from the anti-dumping duty imposed by
Article 1 provided that such imports are imported in conformity with paragraph 2.

Country

Company

Slovakia

Bohus s.r.o., Nálepkova 310, 976 45 Hronec

TARIC additional
code

A329

2.

Imports mentioned in paragraph 1 shall be exempt from the anti-dumping duty on condition that:

(a) a commercial invoice containing at least the elements listed in the Annex is presented to Member States'
customs authorities upon presentation of the declaration for release into free circulation; and

(b) the goods declared and presented to customs correspond precisely to the description on the commercial

invoice.

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Article 3

1. Without prejudice to Article 20(1) of Regulation (EC) No 384/96, interested parties may request
disclosure of the essential facts and considerations on the basis of which this Regulation was adopted,
present their views in writing and request a hearing from the Commission within one month of the date of
the entry into force of this Regulation.

2.
Pursuant to Article 21(4) of Regulation (EC) No 384/96 the parties concerned may request a hearing
concerning the analyses of the Community interest and may comment on the application of this Regulation
within one month of the date of the entry in force of this Regulation.

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

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

Article 4

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

Done at Brussels, 26 February 2002.

For the Commission

Pascal LAMY

Member of the Commission

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ANNEX

The following elements shall be indicated in the commercial invoice accompanying the company's sales of tube and pipe
fittings to the Community which are subject to the undertaking.

1. The heading ‘COMMERCIAL INVOICE ACCOMPANYING GOODS SUBJECT TO AN UNDERTAKING’

2. The name of the company mentioned in Article 2(1) issuing the commercial

invoice.

3. The commercial

invoice number.

4. The date of issue of the commercial

invoice.

5. The TARIC additional code under which the goods on the invoice are to be customs cleared at the Community

frontier.

including:

6. The exact description of the goods,
— product code number (PCN),
— description of the goods corresponding to the PCN (i.e ‘PCN 1 …’,
— company product code number (CPC) (if applicable),
— CN code,
— quantity (to be given in tonnes and pieces).

‘PCN 2 …’),

7. The description of the terms of sale,
— price per tonne and per piece,
— the applicable payment terms,
— the applicable delivery terms,
— total discounts and rebates.

including:

8. Name of the company acting as an importer to which the invoice is issued directly by the company.

9. The name of the official of the company that has issued the undertaking invoice and the following signed declaration:

‘I, the undersigned, certify that the sale for direct export by [company name] to the European Community of the goods
covered by this invoice is being made within the scope and under the terms of the undertaking offered by [company
name], and accepted by the European Commission through Regulation (EC) No 358/2002.
I declare that the
information provided in this invoice is complete and correct.’