Proposal for a Council Regulation imposing definitive anti-dumping duties on imports of certain tube or pipe-fittings, of iron or steel, originating in the People's Republic of China and Thailand, and those consigned from Taiwan, whether declared as originating in Taiwan or not.
Date: 2003-05-16
Institutions: European Commission
Subjects: China, Thailand, anti-dumping duty, import (EU), originating product, piping

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 16.05.2003
COM(2003)264 final

Proposal for a

COUNCIL REGULATION

imposing definitive anti-dumping duties on imports of certain tube or pipe-fittings, of
iron or steel, originating in the People's Republic of China and Thailand, and those
consigned from Taiwan, whether declared as originating in Taiwan or not.

(presented by the Commission)

EXPLANATORY MEMORANDUM

On 4 April 2001, the Commission initiated an expiry review investigation of the measures in
force in respect of imports of certain tube or pipe-fittings, of iron or steel, originating in the
People's Republic of China and Thailand, after receipt of a request made by the Community
producers, indicating that the expiry of the measures would be likely to lead to a continuation
or recurrence of injurious dumping. At the same time, the Commission initiated an ex officio
interim  review  relating  to  imports  originating  in  Thailand  and  limited  to  the  form  of  the
measures,  in  view  of  the  enforcement  problems  encountered  in  the  monitoring  of  the
undertaking in place.

The attached proposal for a Council Regulation is based on the findings on dumping, injury
and  Community  interest  and  on  the  analysis  of  the  possible  effects  of  the  removal  or
maintenance of the measures in force.

The  investigation  confirmed  the  likelihood  of  recurrence  of  injurious  dumping  should  the
measures be repealed in respect of the countries concerned.

The investigation concerning the form of the measures applicable to Thailand is still on-going
and final conclusions will be subject to a separate Council Regulation.

It  is,  therefore,  proposed  that  the  Council  adopt  the  attached  proposal  for  a  Regulation  by
which the existing measures would be prolonged.

2

Proposal for a

COUNCIL REGULATION

imposing definitive anti-dumping duties on imports of certain tube or pipe-fittings, of
iron or steel, originating in the People's Republic of China and Thailand, and those
consigned from Taiwan, whether declared as originating in Taiwan or not.

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having  regard  to  Council  Regulation  (EC)  No  384/96  of  22  December  1995  (‘Basic
Regulation’),  on  protection  against  dumped  imports  from  countries  not  members  of  the
European Community1, as last amended by Regulation (EC) No 1972/20022, and in particular
Articles 11(2) and 11(3) thereof,

Having  regard  to  the  proposal  submitted  by  the  Commission,  after  consulting  the  Advisory
Committee,

Whereas:

A.  PREVIOUS INVESTIGATION

(1)

(2)

By Regulation (EC) No 584/963 , the Council imposed a definitive anti-dumping duty
on imports of certain tube or pipe-fittings, of iron or steel, originating in the People's
Republic  of  China  (‘China’),  Croatia  and  Thailand.  The  measures  applying  to  these
imports  consisted  of  an  ad-valorem  duty,  except  for  three  Thai  exporting  producers
from which undertakings were accepted by Commission Decision 96/252/EC4. 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)  of  the  Basic  Regulation  and  which  showed  the  absence  of
dumping5.

Pursuant  to  Article  13(3)  of  the  Basic  Regulation,  the  anti-dumping  measures  on
imports from China have been extended by Regulation (EC) No 763/20006 of 10 April
2000,  as  amended  by  Regulation  (EC)  No  2314/20007  of  17  October  2000,  to  cover
certain imports of the product concerned which are consigned from Taiwan, based on
the findings in an anti-circumvention investigation.

1 OJ L 56, 6.3.1996, p.1.
2 OJ L 305, 7.11.2002, p.1.
3 OJ L 84, 3.4.1996, p. 1.
4 OJ L 84, 3.4.1996, p. 46.
5 Commission Decision 2000/453/EC (OJ L 182, 21.7.2000, p. 25)
6 OJ L 94, 14.4.2000, p. 1.
7 OJ L 267, 20.10.2000, p. 15.

3

                                                
(3)

(4)

(5)

(6)

(7)

B.  PRESENT INVESTIGATION

Following the publication, in September 2000, of a notice8 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  producers  representing  a  major  proportion  of  the  total  Community
production  of  certain  tube  or  pipe-fittings  of  iron  or  steel.  The  request  alleged  that
injurious  dumping  of  imports  originating  in  China  and  Thailand  (‘the  countries
concerned’)  would be  likely  to  recur  if  measures  expired.  The  applicant  Community
producers  did  not  request  the  initiation  of  an  expiry  review  concerning  imports
originating  in  Croatia  on  the  grounds  that  available  statistics  show  very  low  exports
world-wide and, accordingly, no reliable evidence concerning the likely recurrence of
injurious  dumping.  Consequently,  the  measures  applicable  to  imports  originating  in
Croatia expired on 4 April 2001.

Having  determined,  after  consultation  of  the  Advisory  Committee,  that  sufficient
evidence  existed  for  the  initiation  of  a  review,  the  Commission  initiated  an
investigation9, pursuant to Article 11(2) of the Basic Regulation.

At  the  same  time,  likewise  after  consultation  of  the  Advisory  Committee,  the
Commission  initiated  an  ex  officio  interim  review  pursuant  to  Article  11(3)  of  the
Basic Regulation, in order to examine the appropriateness of the form of the measures
concerning the imports originating in Thailand.

The investigation regarding the continuation and/or recurrence of dumping and injury
covered the period from 1 April 2000 to 31 March 2001 (‘IP’). The examination of the
trends relevant for the assessment of a likelihood of a continuation and/or recurrence
of  injury  covered  the  period  from  1  January  1996  up  to  the  end  of  the  IP  (‘period
under review’).

The Commission officially advised the applicant Community producers, the exporters
and exporting producers in China and Thailand, importers/traders, user industries, and
associations  of  users  known  to  be  concerned,  as  well  as  the  representatives  of  the
Chinese and Thai Governments of the initiation of the review. 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 also gave the parties directly
concerned  the  opportunity  to  make  their  views  known  in  writing  and  to  request  a
hearing.

(8)

The  following  Community  producers  replied  to  the  questionnaire,  and  verification
visits were carried out at their premises:

(a) Erne Fittings GmbH & Co – Schlins, Austria

(b) Interfit – Maubeuge, France

(c) Siekmann Fittings GmbH & Co. KG – Lohne, Germany

(d) Virgilio CENA & Figli S.p.a.– Brescia, Italy

8 OJ C 271, 22.9.2000, p. 4.
9 OJ C 103, 3.4.2001, p. 5.

4

                                                
(9)

The  two  following  exporting  producers  in  Thailand  replied  to  the  questionnaire  and
verification visits were also carried out at their premises:

(a) TTU Industrial Corp., Ltd., Bangkok

(b) Awaji Sangyo (Thailand) Co., Ltd., Samutprakarn

(10)

The  Commission  sent  questionnaires  to  57  unrelated  importers/traders,  23  user
industries and 5 associations of user industries. Two questionnaire replies by importers
have been received and these were subsequently verified on spot:

(a) INRABO S.R.L – Bologna, Italy

(b) IRC Spa – Cortemaggiore, Italy

C.  ONGOING INVESTIGATION CONCERNING OTHER COUNTRIES

(11) By  a  notice10  published  in  the  Official  Journal  dated  1  June  2001,  the  Commission
initiated  an  investigation  concerning  imports  of  the  same  product  and  originating  in
the  Czech  Republic,  the  Republic  of  Korea,  Malaysia,  Russia  and  Slovakia.  This
proceeding  was  initiated  upon  receipt  of  a  complaint  lodged  by  the  Defence
Committee of EU Steel Butt-welding Fittings Industry, and containing sufficient prima
facie  evidence of injurious dumping  practices  caused by  imports  originating  in  these
five  countries.  Definitive  anti-dumping  measures  were  imposed  against  imports
originating in those countries in August 200211.

D.  PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT

(12)

(13)

The product concerned is the same as in the original investigation, i.e. certain tube or
pipe fittings (other than 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 (‘product concerned’ or ‘tube or pipe
fittings’), currently classifiable within CN codes ex  7307 93  11 (Taric code 7307  93
11 99), ex 7307 93 19 (Taric code 7307 93 19 99) ex 7307 99 30 (Taric code 7307 99
30 98) and ex 7307 99 90 (Taric code 7307 99 90 98).

Tubes  or  pipe  fittings  are  used  to  join  tubes  or  pipes  and  come  in  several  different
shapes  (elbows,  tees,  reducers  and  caps),  material  grade  and  sizes.  They  can
accordingly  be  categorised in different types  according to these  characteristics. They
are  mainly  used  in  primary  industries,  such  as  chemicals,  oil  refining,  energy
generation, construction and shipbuilding.

(14) As  in  the  previous  investigation,  this  investigation  has  shown  that  the  tube  or  pipe
fittings of iron or steel, produced in the countries concerned, sold domestically and/or
exported to the Community have the same basic physical and chemical characteristics
as the products sold in the Community by the applicant Community producers and are
considered  to  be  like  products,  within  the  meaning  of  Article  1(4)  of  the  Basic
Regulation.

10 OJ. C 159, 1.6.2001, p.4.
11 OJ L 228, 24.8.2002, p. 1.

5

                                                
E.  LIKELIHOOD OF A CONTINUATION OR A RECURRENCE OF DUMPING

1.  Preliminary remark

(15) Under Article 11(2) of the Basic Regulation, the purpose of this type of review is to
determine  whether  or  not  the  expiry  of  the  measures  would  be  likely  to  lead  to  a
continuation  or  recurrence  of  dumping.  Since  the  imports  of  the  product  under
consideration from China and Thailand (with the exclusion of one exporting producer
which  is  no  longer  subject  to  anti-dumping  measures)  were  below  the  de  minimis
threshold in the IP, the analysis will not only focus on the likelihood of a continuation
of dumping, but also on whether the removal of the measures would be likely to lead
to  a  recurrence  of  dumping  in  significant  volumes.  It  should  be  noted  that  in  the
original investigation the  market  shares  of  China  and  Thailand  were  8.5%  and  2.6%
respectively.

(16)

The  two  Thai  exporting  producers  for  which  undertakings  are  currently  in  force  co-
operated in  the investigation by replying  to  the  questionnaire  which  was  sent  out  by
the  Commission.  No  information  was  submitted  by  any  Chinese  exporting  producer
and therefore the findings related to their situation had to be established on the basis of
the  facts  available,  in  accordance  with  Article  18  of  the  Basic  Regulation.  In
accordance with Article 11(9) of the Basic Regulation, the Commission employed the
same methodology as in the original investigation (see Recitals (17) to (31) below).

2.  Likelihood of a continuation of dumping

(a) Thailand

Normal value

(17) As far  as the determination of normal value is concerned, it was first established  for
the two co-operating Thai exporting producers whether their total domestic sales of the
like  product  were  representative  in  comparison  with  their  total  export  sales  to  the
Community.  In accordance with Article 2(2) of the Basic Regulation, this was found
to be the case.

(18)

The Commission subsequently identified those product types, sold domestically by the
companies concerned, that were identical or directly comparable to the types sold for
export to the Community.

(19) Wherever domestic prices of a particular product type sold by  an exporting producer
could not be used in order to establish normal value either because they had not been
sold on the domestic market or not in the ordinary course of trade, another method had
to  be  applied.  In  the  absence  of  any  other  reasonable  method,  constructed  normal
value was used.

(20)

In all cases where constructed normal value was used and in accordance with Article
2(3)  of  the  Basic  Regulation,  normal  value  was  constructed  by  adding  to  the
manufacturing costs of the exported types, a reasonable percentage for selling, general
and  administrative  expenses  (“SG&A”)  and  a  reasonable  margin  of  profit.  The
domestic  profit  margin  was  determined  on  the  basis  of  domestic  sales  made  in  the
ordinary course of trade.

6

(21)

(22)

Export price

Since  all  export  sales  of  the  product  under  consideration  were  made  directly  to
independent  customers  in  the  Community,  the  export  price  was  established  in
accordance with Article 2(8) of the Basic Regulation on the basis of the prices actually
paid or payable.

Comparison

For the purposes of a fair comparison by product type on an ex-factory basis and at the
same level of trade, due allowance was made for differences which were claimed and
demonstrated to affect price comparability. These adjustments were made in respect of
import charges, transport, insurance, handling costs, packing, credit and commissions
in accordance with Article 2(10) of the Basic Regulation.

(23) One Thai exporting producer claimed an adjustment for credit cost on the grounds that
it was standard  practice  to  grant  30-90  days  of  credit  to  known  domestic  customers.
This  claim  was  rejected  because  the  applicant  failed  to  show,  e.g.  by  means  of
contracts or a description of the payment terms on the invoices, that this was a factor
taken into account in the determination of the prices charged.

(24) Both  Thai  companies  claimed  an  allowance  for  import  charges.  Pursuant  to  Article
2(10)(b)  of  the  Basic  Regulation  these  requests  were  granted  where  it  was
demonstrated  that  the  materials  on  which  import  duties  were  payable  had  been
physically incorporated into the products concerned sold on the domestic market and
that the import duties had not been collected or were refunded in respect of the product
exported to the Community. Only one of the two companies was able to demonstrate
this.

Dumping margin

(25)

In  order  to  calculate  the  dumping  margin,  the  Commission  compared  the  weighted
average normal value to the average export price to the Community at ex-factory level
and at the same level of trade. This comparison showed the existence of dumping for
both companies concerned, ranging from about 23 to about 88 %.

(b) China

Analogue country

(26)

(27)

The  existing  measures  provide  for  a  single  countrywide  duty  on  all  imports  into  the
Community of tube and pipe fittings originating in China. Accordingly, normal value
was  determined  on  the  basis  of  information  obtained  in  a  market  economy  third
country (‘the analogue country’).

Thailand had served as an analogue country in the original investigation. In the notice
of initiation of this expiry review it was therefore envisaged to choose Thailand again
as analogue country for the purpose of establishing normal value. Since it was found
that  the  findings  of  the  previous  investigation  were  still  valid,  i.e.  prices  were
governed  by  market  forces,  several  producers  competed  on  the  Thai  market  and  the
production technology and process were, to a large extent, similar between China and
Thailand,  as  no  interested  party  commented  on  this  choice  of  analogue  country  and
since  the  Thai  exporting  producers  co-operated,  Thailand  was,  therefore,  in

7

accordance with Article 2(7) of the Basic Regulation, considered to be an appropriate
and  not  unreasonable  choice  of  analogue  country  for  establishing  normal  value  in
respect of China for the product concerned.

Normal value

(28)

In the absence of co-operation from China, recourse had to be made to facts available.
In the circumstances of this case no information on the product mix of Chinese exports
was  available,  and  therefore  the  determination  of  the  normal  value  had  to  be
established  on  the  basis  of  the  weighted  average  of  the  various  normal  values
established  for  the  co-operating  Thai  exporting  producers  during  the  investigation
period.

Export price

(29) As regards the exports to the Community, given that exporting producers in China did
not  co-operate,  findings  had  to  be  based  on  the  facts  available,  in  accordance  with
Article  18(1)  of  the  Basic  Regulation.  The  export  price  was  thus  determined  on  the
basis  of  Chinese  export  trade  statistics  since  it  was  found  that  these  appeared  to  be
more reliable for the product concerned than Eurostat data. In this context it should be
noted that the Eurostat statistics for the product concerned  are  ex  codes,  i.e.  they  do
not exclusively include the product concerned, and that the Chinese data were more in
line with the complaint.

Comparison

(30)

(31)

For the purpose of a fair comparison, and in accordance with Article 2(10) of the Basic
Regulation,  due  allowance  in  the  form  of  adjustments  was  made  for  differences  in
respect  of  transport  and  insurance  costs,  which  were  considered  to  affect  prices  and
price comparability.

Dumping margin

In accordance with Article 2(11) of the Basic Regulation, the weighted average normal
value, on an ex-factory Thai basis, was compared to the weighted average export price
on  an  ex-factory  China  basis,  at  the  same  level  of  trade.  The  above  comparison
showed the existence of significant dumping.

(c)  Conclusion

(32)

The  investigation  has  revealed  that  although  the  quantities  imported  were  limited,
imports  from  both  countries  have  continued  at  considerably  dumped  levels.  The
investigation did not reveal any reason why the level of dumping would disappear or
decrease if the measures were to be repealed. It was therefore concluded that there is a
likelihood of continuation of dumping. However, it was considered appropriate to also
examine whether there would be a recurrence of dumping in increased export volumes
should the existing measures be repealed.

3.  Likelihood of a rise in dumped exports to the Community

(33)

For  the  purposes  of  the  examination  of  a  likelihood  of  recurrence  of  dumping  in
significant quantities, the following factors were assessed: the evolution of the export

8

and/or production capacity, the background of circumvention in the case of China and
the situation in the export behaviour on third country markets.

(a) Thailand

(34)

(35)

(36)

The  undertakings  that  have  been  accepted  for  the  two  co-operating  exporting
producers, in the framework of the original proceeding, had the effect of limiting their
sales  to  the  Community  market  during  the  investigation  period.  No  breach  of
undertakings has been observed during this period.

Export capacity

The  investigation  showed  that  both  co-operating  companies  have  a  very  significant
propensity  to  export,  as  during  the  period  under  review,  more  than  80%  of  their
production  of  the  product  concerned  was  exported.  It  appears  that  these  companies
have  considerable  flexibility  in  their  production  capacity,  which  represents  around
25%  of  the  total  EC  consumption.  In  addition,  the  fact  that  these  companies  are
extremely  export  oriented  shows  that  they  are  likely  to  redirect  their  export  sales  to
any market that would become more attractive in terms of prices and volume.

Thailand's exports to third countries

In  view  of  the  low  volume  currently  imported  into  the  Community,  the  export
behaviour  of  the  Thai  exporting  producers  on  one  of  their  main  export  markets,  the
USA,  has  been  considered.  It  was  found  that  in  1992,  following  an  anti-dumping
proceeding  concerning  imports  of  a  product  largely  overlapping  with  the  one
concerned by this investigation, limited to a diameter below 360 mm, and originating,
inter  alia,  in  Thailand,  the  US  administration  found  margins  of  dumping  for  this
country ranging from 10.7% to 50.8%. More importantly, in December 1999, pursuant
to  an  expiry  review,  it  was  concluded  that  the  removal  of  these  measures  would  be
likely to lead to the continuation or recurrence of dumping12.

(b) China

Production and capacity utilisation

(37) Given the absence of co-operation from Chinese exporting producers, the Commission
services had to make use of the facts available. Since little information is known about
the Chinese  industry, the following  conclusions rely  on the  information  contained  in
the complaint and Chinese export trade statistics. Support for these findings was also
found in information that was made public in the framework of similar proceedings in
the USA.

(38) According  to  these  sources,  the  total  Chinese  production  capacity  for  the  product
concerned  is  around  250  000  metric  tonnes  per  year.  The  current  yearly  Chinese
production  volume,  as  estimated  in  the  complaint,  is  around  90  000  tonnes.  This
estimation  is  based  on  the  Chinese  world-wide  export  volume  given  by  the  trade
statistics (around 17 000 tonnes /  year), and on a domestic consumption estimated at
roughly equal the Community consumption (around 70 000 tonnes / year).

12 US Federal Register/ Vol. 64, No 232, 3.12.1999

9

                                                
(39) On this basis, the Chinese capacity utilisation rate would be below 40% and their spare

capacity higher than the total Community consumption.

(40) Consequently,  the  large  production  capacity  available  in  China,  combined  with  the
size of the Chinese domestic market, gives Chinese exporting producers considerable
flexibility  to  switch  both  between  markets  and  product  types.  These  producers  are
therefore  able  to  quickly  increase  production  and  direct  it  to  any  export  market,
including, were the measures to be repealed, the Community market.

Background of circumvention

(41)

(42)

It should be noted that the Chinese exporting producers not only have the capacity to
massively resume their exports to the Community, but are also inclined to do so. This
is demonstrated by the fact that, after the imposition of the original measures in 1995,
the yearly imports from Taiwan have on average multiplied by a factor of 4, until an
anti-circumvention investigation13 showed that most of these imports were actually of
Chinese origin  and therefore measures applicable to China were  extended to  Taiwan
(with the exception of three Taiwanese producers) in June 2000.

Chinese exports to third countries

The  export  behaviour  of  Chinese  producers  on  other  significant  markets  for  the
product concerned was also investigated. In this respect, the USA initiated, in the last
decade,  three  different  investigations  concerning  imports  of  a  product  largely
overlapping with the one concerned by this investigation, limited to a diameter below
360 mm, originating, inter alia, in China. The first investigation, which took place in
1992,  established  very  high  margins  of  dumping  (up  to  182.9%),  and  therefore  anti-
dumping  measures  were  imposed  against  imports  of  the  product  concerned
originating,  inter  alia,  in  China.  Two  years  later,  in  1994,  a  second  investigation
determined  that  these  anti-dumping  measures  were  circumvented  by  shipping  the
products  through  Thailand.  Finally,  the  anti-dumping  measures  in  force  have  been
reviewed in 1999 with the conclusion that the removal of the measures would lead to
continuation or recurrence of injurious dumping.

(43) All  this  shows  that  if  the  measures  were  to  be  repealed,  the  Chinese  producers  will
very  likely  adopt  the  same  export  behaviour  on  the  EC  market,  a  market  which  is
comparable to the one of the USA.

(44)

Finally, the absence of Chinese co-operation to the investigation is an indication that
no Chinese producer was willing or able to show that no dumping would take place if
measures were to be repealed.

4.  Conclusion

(45)

The  investigation  has  shown  that  both  China  and  Thailand  have  continued  their
dumping practices during the investigation period.

(46) Given the fact that China has a very large spare production capacity available and that
it  has  already  circumvented  the  measures,  there  is  a  strong  likelihood  that  Chinese

13 OJ L 94, 14.4.2000, p. 1.

10

                                                
exporting producers would substantially increase their dumped exports of the product
concerned to the Community in case existing measures were to be repealed.

(47) With  respect  to  Thailand  it  should  be  noted  that  since  the  Thai  companies  are  very
export oriented and given the attractiveness of the Community market, it is very likely
that,  should  the  existing  measures  be  repealed,  these  companies  would  resume  to
export the product concerned to the Community market in substantial volumes and at
dumped prices.

(48)

(49)

(50)

Finally, reference is made to the dumped sales of Chinese and Thai exporters on the
US market and the US anti-dumping measures which have been renewed in 1999.

In summary, it  is highly  probable that  imports  to  the  Community  from  the  countries
concerned  will  resume  in  significant  quantities  and  at  dumped  prices,  should  the
measures be repealed.

F.  DEFINITION OF THE COMMUNITY INDUSTRY

The  four  Community  producers  which  co-operated  fully  in  the  investigation
represented  around  60%  of  the  Community  production  of  the  product  concerned
during the IP and therefore constitute the Community industry within the meaning of
Article  4(1)  and  Article  5(4)  of  the  Basic  Regulation.  It  should  be  noted  that  three
other producers, that also participated in the review request, representing around 10%
of the Community production, did not subsequently reply to the questionnaire within
the granted deadline. Two of these producers support the proceeding, while the third
one did not express any opinion regarding the proceeding.

G.  THE SITUATION OF THE COMMUNITY MARKET

1.  Community consumption

(51)

It should be noted that part of the EU producers’ domestic sales are made to stockists
(which  did  not  co-operate),  that  in  turn  export  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  request),  and  on  the  Community
import and export volume based on Eurostat data.

(52) On this basis, it was established that the Community consumption first increased from
around  57  000  tonnes  in  1996  to  around  64  500  tonnes  in  1998,  but  subsequently
dropped to around 50 800 tonnes in the IP.

2.  Evolution of imports from the countries concerned

(a) Import volumes and market shares

(53) With  respect  to  the  countries  concerned  and  Taiwan,  the  import  volume  and  market

shares developed as such:

11

Thailand
market shares

PRC
market shares

Taiwan
market shares

1996
111
0.2%

316
0.6%

2 663
4.7%

1997
204
0.3%

85
0.1%

5 947
9.7%

1998
614
1.0%

95
0.1%

4 434
6.9%

1999
740
1.0%

78
0.3%

3 246
6.2%

2000
1 049
2.1%

44
0.1%

1 299
2.6%

IP
1 385
2.7%

35
0.1%

1 259
2.5%

(54)

The  overall  Thai  imports  significantly  increased  from  around  100  tonnes  in  1996  to
around 1 400 tonnes during the IP. The most significant increase took place between
1999 and 2000, which coincides with the entry into force of the Commission Decision
to  repeal  the  measures  for  one  Thai  exporting  producer,  resulting  from  an  interim
review pursuant to article 11(3) of the Basic Regulation. When considering only those
companies  still  subject  to  anti-dumping  duties,  the  increase  in  volume  remained
however limited, with a market share increasing from 0.3% in 1996 to 0.5% during the
IP.  It  should  be  noted  that  in  the  previous  investigation  period  (from  1  July  to  31
December 1993), the Thai market shares were 2.6%.

(55) As shown above, the volume of imports from China also remained limited during the
period  under  review.  It  should  however  be  recalled  that  an  anti-circumvention
investigation concluded that a significant part of the imports from Taiwan was in fact
of  Chinese  origin.  The  sharp  decrease  of  these  imports  in  2000  coincides  with  the
extension  of  the  anti-dumping  measures  on  Chinese  imports  to  certain  imports  from
Taiwan. In the previous investigation period the Chinese market shares reached 8.5%.

(b) Price evolution of the imports

(56)

Export prices of the two co-operating Thai producers have increased by 6% between
1996 and the IP. However, over the whole period under review, they followed no clear
trend, with ups and downs of less than 10% of the average price during this period.

(57) According  to  Eurostat  statistics,  the  Chinese  export  prices  overall  decreased  by  7%
between 1996 and the IP. Like the Thai prices, they followed no clear trend during the
period under review.

3.  Import volume and market shares from countries not concerned

(58) As to imports  from  the  countries  not  concerned  by this proceeding,  and as shown in
the table below, they significantly increased from around 4 300 tonnes in 1996 to 11
700  tonnes  during  the  IP.  Their  overall  increase  in  market  shares  during  the  period
under review is 15.5 percentage points.

Countries not concerned
market shares

1996
4 271
7.5%

1997
5 922
9.6%

1998
7 510
11.6%

1999
4 169
8.0%

2000
10 821
21.3%

IP
11 686
23.0%

4.  Economic situation of the Community industry

(a) Preliminary remark

(59)

The economic indicators presented below show  a  positive  development for the  years
1996  to  1998,  subsequently  followed  by  a  deterioration  of  the  overall  economic
situation of the Community industry. This development should be seen in the light of
the  imposition  of  the  definitive  anti-dumping  measures  in  1995,  the  circumvention

12

practices  and  the  related  extension  of  the  measures  to  certain  imports  originating  in
Taiwan  in  2000,  and  finally  the  increasing  volume  of  dumped  imports  from  other
countries subject to a separate proceeding.

(b) Production

Production
metric tonnes

1996
42 455

1997
44 771

1998
46 499

1999
43 009

2000
43 903

IP
46 905

(60)

The Community industry’s production first increased by 10% between 1996 and 1998,
then fell back to the 1996 level, to go up again to the level reached in 1998.

(c)  Capacity and capacity utilisation rates

Capacity
metric tonnes
Utilisation

1996
88 400
48%

1997
88 400
51%

1998
88 400
53%

1999
87 300
49%

2000
87 900
50%

IP
87 900
53%

(61)

The total production capacity of the Community industry was relatively stable over the
period  under  review  and  therefore  the  capacity  utilisation  level  followed  a  trend
identical to the one of the production volume.

(d) Sales volume of the product concerned for consumption in the EU

Sales volume in EC
metric tonnes

1996
30 147

1997
30 038

1998
32 897

1999
28 470

2000
24 893

IP
24 313

(62) As  explained  above,  only  sales  destined  for  EU  consumption  have  been  considered.
On  this  basis,  during  the  period  under  review,  the  sales  volume  of  the  Community
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.

(e)  Stocks

Closing stocks
metric tonnes

1996
5 629

1997
5 920

1998
6 022

1999
6 109

2000
5 571

IP
5 401

(63)

The  level of stocks decreased by  around 4%  between 1996 and the  IP. While  it  was
more or less stable during the first four years of the period under review, it started to
decrease considerably after 1999.

(f)  Market share

Market shares
Community industry

1996
52.8%

1997
48.9%

1998
50.9%

1999
54.7%

2000
49.0%

IP
47.9%

(64)

The Community industry decreased by 4.9 percentage points in market shares between
1996 and the IP. However, between 1996 and 1999, the market shares increased by 1.9
percentage  point,  resulting  from  the  imposition  of  the  measures  currently  under
review. Thereafter, the position of the Community industry on the market deteriorated.

(g) Sales prices of the Community industry

Unit price, sales in EC
€/metric tonne

1996
1 812

1997
1 686

1998
1 595

1999
1 515

2000
1 437

IP
1 413

13

(65)

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

(h) Profitability and return on investments

(66)

(67)

Profitability
% of net turnover in the EC
Return on investment

1996
3.1%
7.5%

1998
1997
5.2%
3.3%
17.7% 17.6%

1999
-2.4%
-1.0%

2000
-4.2%
-6.2%

IP
-3.5%
-3.7%

The Community industry managed to increase  its  profitability  from  3.1%  in  1996  to
5.2% in 1997. After that year, however, profitability continuously decreased and was
clearly  negative  during  the  IP,  at  -3.5%.  It  should  be  noted  that  the  Community
industry  was  in  a  loss  making  situation  of  around  -7%  on  turnover  during  the
investigation period of the original investigation (July to December 1993).

The  return  on investments  broadly followed  the  profitability  curve  during  the  period
under  review.  It  should  be  noted  that  both  direct  investments  and  a  portion  of
investments  indirectly  related  to  the  production  of  the  product  concerned  have  been
considered.

(i)  Cash flow

Cash flow
1 000 €

1996
3 009

1997
5 393

1998
4 939

1999
1 773

2000
638

IP
281

(68)

The  cash-flow  generated  by  the  sales  of  the  product  concerned  increased  by  around
65% between 1996 and 1998 and then dramatically decreased to 281 000 € during the
IP.

(j)  Ability to raise capital

(69) None  of  the  companies  mentioned  any  current  difficulty  to  raise  capital.  However,

should the cash flow continue to deteriorate, this situation may change.

(k) Employment and wages

Employment and wages
Total employees
Average  Wages  per  employee
(1 000 €)

1996
547
33.4

1997
548
33.6

1998
580
35.1

1999
555
34.5

2000
535
35.1

IP
580
35.9

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 came
back 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.

The  average  wages  per  employee  remained  stable  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%.

(70)

(71)

(l)  Productivity

Productivity
Productivity (production in tonnes
per employee)

1996
77.6

1997
81.7

1998
80.2

1999
77.5

2000
82.1

IP
80.9

14

(72)

Productivity increased by 3% between 1996 and 1998, from 77.6 tonnes per employee
to 80.2. It then decreased but regained its 1998 level during the IP.

(m) Investment

Investments
1 000 €

1996
2 738

1997
2 222

1998
2 441

1999
3 094

2000
2 781

IP
2 529

(73) New investments remained at a relatively stable level during the period under review.
These investment mainly consisted of renewal or improvement of existing equipment
and are not related to any capacity increases.

(n) Growth

(74) 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  decreased  and,  in  spite  of  the
decreasing import volume from the countries concerned (specifically circumvented via
Taiwan), the Community industry sales and market shares decreased.

(o) Magnitude of dumping margin

(75)

In view of the low volume of imports from the countries concerned during the IP, the
magnitude  of  the  established  dumping  margin  is  expected  to  have  negative  effects
especially  if  the  volume  of  the  imports  concerned  increases  in  the  future.  In  this
context  the  conclusions  in  heading  E.4.  are  recalled,  which  stated  that  it  is  highly
probable that imports to the Community from the countries concerned will resume in
significant quantities and at dumped prices, should the measures be repealed.

(p) Recovery from the effects of past dumping

(76) As  indicated  by  the  positive  evolution  of  most  of  the  above  listed  indicators,  the
economic situation of the Community industry recovered, in the  years 1996 to 1998,
from  the  injurious  effect  of  dumped  imports  originating  in  the  two  countries
concerned.  Thereafter  the  situation  deteriorated  again,  resulting  from  the  effect  of
increasing dumped imports from other third countries (see heading C).

5.  Conclusion on the analysis of the situation of the Community market

(77)

The  introduction  of  the  measures  against  China  and  Thailand  clearly  had  a  positive
impact  on  the  economic  situation  of  the  Community  industry  when  compared  to  the
situation  before  their  introduction.  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 return on turnover, return on investments and cash flow
also developed favourably. Had the measures not been circumvented by imports from
Taiwan,  this  development  would  have  been  even  more  favourable.  However,  after
1998,  the  economic  situation  of  the  Community  industry  generally  deteriorated:
volume of sales, market shares  and  production decreased  as well  as  profitability  and
prices. The injury suffered by the Community industry during this period was caused
by dumped imports originating in the Czech Republic, Malaysia, Russia, the Republic

15

of Korea and Slovakia, and therefore definitive anti-dumping measures were imposed
against these countries in August 200214.

H.  LIKELIHOOD OF CONTINUATION AND/OR RECURRENCE OF INJURY

(78)

In order to assess the likely effect of the expiry of the measures in force, the following
elements were considered:

(a)  As explained under recitals (33) to (44):

- there are clear indications that the Chinese and Thai producers have the potential to
raise and / or redirect their export volumes to the Community market;

-  on  the  basis  of  the  export  price  behaviour  established  in  respect  of  Chinese  and
Thai exports to the USA, it is likely that, in the absence of measures, producers in the
countries  concerned  would  readopt  a  policy  of  dumped  prices  on  the  Community
market.  Indeed,  on  an  overall  basis,  the  prices  charged  to  these  export  markets  are
lower  than  the  prices  of  the  Community  industry,  even  though  a  detailed  analysis
could not be carried out in view of the  numerous variety of  different product types
and  accordingly  the  impossibility  to  establish  precise  price  comparisons  for  all
product types.

(b) The  investigation  showed  that,  on  the  basis  of  comparable  product  types,  the  Thai  co-
operating  exporting  producers  sold  the  product  concerned  at  a  significantly  lower  price
than the Community industry’s. As to China, in the absence of co-operation and due to the
variety of product types and thus import  prices, no price comparison on  a  type  per  type
basis could be carried out. However, the available facts indicate that the average Chinese
import  price  is  significantly  lower  than  the  one  practised  by  Thai  producers.  It  can
accordingly  be  concluded  that  the  difference  between  the  sales  prices  of  the  products
concerned originating in China and the Community industry’s, without imposition of anti-
dumping duties, is at least as significant as for imports originating in Thailand.

(c)  These  low  prices  would  most  likely  continue  to  be  charged  by  the  countries  concerned,
also in order to regain their lost market shares. Such a price behaviour, coupled with the
ability of China and Thailand to deliver significant quantities of the product concerned on
the  Community  market,  would  in  all  likelihood  have  the  effect  of  reinforcing  the  price-
depressive  trend  on  the  market,  with  an  expected  negative  impact  on  the  economic
situation of the Community industry.

(79) Moreover,  the  lapsing  of  the  measures  against  Chinese  imports  would  entail  the
lapsing  of  the  circumvention  measures  with  regard  to  the  imports  of  the  product
concerned from Taiwan. In this respect it should be recalled that,  as explained under
recital  (41),  the  measures  against  Chinese  imports  were  found  to  be  massively
circumvented  and  therefore  extended  to  Taiwan.  Should  these  measures  against
Taiwan be repealed, there is a strong likelihood that circumvention will resume.

(80) On the basis of the above, it is concluded that, should the measures be repealed, there

is a likelihood of recurrence of injury from China and Thailand.

14 Council Regulation (EC) No 1514/2002 of 19.08.2002, OJ L 228, 24.08.2002, p. 1.

16

                                                
1.  Preliminary remark

I.  COMMUNITY INTEREST

(81) According  to  Article  21  of  the  Basic  Regulation,  it  was  examined  whether
maintenance  of  the  existing  anti-dumping  measures  would  be  against  the  interest  of
the Community as  a whole. The  determination  of the Community interest was based
on  an  appreciation  of  all  the  various  interests  involved,  i.e.  those  of  the  Community
industry, the importers/traders as well as the users of the product under consideration.

(82)

It should be recalled that, in the previous investigation, the adoption of measures was
considered not to be against the interest of the Community. Furthermore, the fact that
the present investigation is a review, thus analysing a situation in which anti-dumping
measures  have  already  been  in  place,  allows  the  assessment  of  any  undue  negative
impact on the parties concerned by the current anti-dumping measures.

(83) On this basis it was examined whether, despite the conclusions on the likelihood of a
recurrence of injurious dumping, compelling reasons existed which would lead to the
conclusion  that  it  is  not  in  the  Community  interest  to  maintain  measures  in  this
particular case.

2.  Interest of the Community industry

(84)

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  imposition  of  the  anti-dumping
measures that are currently in force. The level of profit it could reach two years after
the imposition of the measures was considered at the time of the original investigation
to be reasonable with regards to what the industry could be expected to obtain in the
absence of dumped imports.

(85)

It  can  reasonably  be  expected  that  the  Community  industry  will  continue  to  benefit
from  the  measures  currently  imposed.  Should  the  measures  not  be  maintained,  it  is
likely that the  Community  industry  will  suffer  injury,  even  if  action  is  taken  against
the other countries that are importing at dumped prices.

3.  Interest of unrelated importers/traders

(86)

The  Commission  sent  questionnaires  to  57  unrelated  importers/traders.  Only  two
importers  replied  to  the  questionnaire.  One  of  these  importers  used  to  purchase  the
product  concerned  from  China,  but  changed  its  supplier  after  the  measures  were
imposed.  It  claimed  accordingly  not  to  be  affected  whether  measures  were  to  be
maintained  or  repealed.  The  second  importer  is  in  favour  of  the  prolongation  of  the
measures and claimed that unfair trade behaviour before measures were imposed had a
distorting effect on the Community market.

(87) Nineteen other importers replied that they were not concerned by the proceeding since
they  did  not  purchase  from  the  countries  concerned  during  the  period  under  review.
No  other  reaction  was  received  and  it  can  accordingly  be  concluded  that  the
maintenance of the measures will not have a significant negative effect on importers or
traders.

17

4.  Interest of users

(88)

(89)

The  users  of  the  product  concerned  are  mainly  petrochemical  industries  as  well  as
industries active in the building sector. The Commission sent out questionnaires to 23
users and 5 European associations of potential users. Only three companies replied and
these all claimed not to be interested in the proceeding.

This lack of co-operation appears to confirm that the tube or pipe fittings represent a
very  small  part  of  total  production  costs  for  these  companies,  and  that  the  measures
currently  in  force  did  not  have  any  substantial  negative  effect  on  their  economic
situation.

5.  Conclusion on Community interest

(90) Given  the  above  reasons,  it  is  concluded  that  it  is  not  considered  that  any  possible
impact  on  importers  and  user  industries  would  be  capable  of  offsetting  the  positive
effect  on  the  Community  industry  of  the  measures  against  recurrent  injurious
dumping. Accordingly there are no compelling reasons against the continuation of the
anti-dumping measures.

J.  FORM OF THE MEASURES AS REGARDS THAILAND

(91) As  stated  in  the  notice  of  initiation,  the  interim  review  regarding  the  form  of  the
measure  for  imports  originating  in  Thailand  was  initiated  by  the  Commission  on  its
own initiative.

(92) No final conclusions in this respect have been reached yet and the investigation is still

on-going.

K.  ANTI-DUMPING MEASURES

(93) All  parties  were  informed  of  the  essential  facts  and  considerations  on  the  basis  of
which  it  is  intended  to  recommend  that  the  existing  measures  be  maintained..  They
were also granted a period to make representations subsequent to this  disclosure. No
comments were received which were of a nature to change the above conclusions.

(94)

It  follows  from  the  above  that,  as  provided  for  by  Article  11(2)  of  the  basic
Regulation, the anti-dumping measures applicable to imports of tube or pipe fittings,
of  iron  or  steel,  originating  in  China  and  Thailand  or  consigned  from  Taiwan,  as
extended  by  Council  Regulation  (EC)  No  763/2000  and  as  amended  by  Council
Regulation  (EC)  No 2313/2000,  should  be  maintained.  It  is  recalled  that  these
measures  consist  of  an  ad-valorem  duty  for  both  countries  concerned,  with  the
exception  of  the  imports  of  the  product  concerned  which  are  manufactured  and  sold
for  export  to  the  Community  by  two  Thai  companies  for  which  undertakings  have
been accepted.

18

HAS ADOPTED THIS REGULATION:

Article 1

1.  Article  A  definitive  anti-dumping  duty  is  hereby  imposed  on  imports  of  tube  or
pipe fittings  (other than  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 code 7307 93 11*99), ex 7307 93 19 (Taric code 7307 93 19*99),
ex 7307 99 30 (Taric code 7307 99 30*98) and ex 7307 99 90 (Taric code 7307 99
90*98) and originating in the People's Republic of China and Thailand.

2.  The  rate  of  the  definitive  anti-dumping  duty  applicable  to  the  net,  free-at-
Community-frontier  price,  before  duty,  shall  be  as  follows  for  the  products
manufactured by:

Country

Rate of
duty

TARIC
additional
code

People’s Republic of China

58.6%

-

Thailand

58.9%

8 851

Except:
Thai Benkan Co. Ltd,
Prapadaeng-Samutprakarn

0%

A 118

3. Notwithstanding paragraph 1, the definitive anti-dumping duty shall not apply to
imports released into free circulation in accordance with Article 2.

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

Article 2

1.  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 the company below 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 of this article

Country

Company

Thailand Awaji Sangyo (Thailand) Co. Ltd., Samutprakarn

TTU Industrial Corp. Ltd. Bangkok.

TARIC
additional code

8850

8850

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

19

(a)

(b)

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

the goods declared and presented to customs correspond precisely to the description
on the commercial invoice.

Article 3

The definitive anti-dumping duty imposed by Article 1 on imports originating in the People's
Republic of China is hereby extended to imports of the same fittings (TARIC Codes: 7307 93
11  91;  7307  93  19  91;  7307  99  30  92;  7307  99  90  92)  consigned  from  Taiwan  (TARIC
additional code  A 999),  with the  exception of  those  produced  by  Chup  Hsin  Enterprise  Co.
Ltd,  Kaohsiung  (Taiwan)  (TARIC  additional  code  A  098),  Rigid  Industries  Co.  Ltd,
Kaohsiung (Taiwan) (TARIC additional code A 099) and Niang Hong Pipe Fittings Co. Ltd,
Kaohsiung (Taiwan) (TARIC additional code A 100).

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

Article 4

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

Done at Brussels,

For the Council
The President

20

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.

2.

3.

4.

5.

6.

7.

8.

9.

The  heading  “COMMERCIAL  INVOICE  ACCOMPANYING  GOODS  SUBJECT
TO AN UNDERTAKING”

The name of the company mentioned in Article 2.1. issuing the commercial invoice

The commercial invoice number

The date of issue of the commercial invoice

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

The exact description of the goods

The description of the terms of sale, including:

–  price,

–  the applicable payment terms,

–  the applicable delivery terms,

–  total discounts and rebates.

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

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 [Decision 1996/252/EC]. I declare that the information provided in this
invoice is complete and correct.”

21