Council Regulation (EC) No 964/2003 of 2 June 2003 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: 2003-06-02
Institutions: Council of the European Union
Subjects: China, Taiwan, Thailand, anti-dumping duty, import, metal product, originating product, piping

6.6.2003

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Official Journal of the European Union

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 964/2003

of 2 June 2003

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,

are consigned from Taiwan, based on the findings in an
anti-circumvention investigation.

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 384/96 of 22
December 1995, on protection against dumped imports from
countries not members of the European Community (1) (‘basic
Regulation’), and in particular Article 11(2) and (3) thereof,

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

(3)

Whereas:

A. PREVIOUS INVESTIGATION

(1)

By Regulation (EC) No 584/96 (2), 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 Thai-
land. 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/EC (3). 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of these three companies was repealed,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 dumping (4).

(2)

Pursuant to Article 13(3) of the basic Regulation, the
anti-dumping measures on imports from China have
been extended by Regulation (EC) No 763/2000 (5), to
cover certain imports of the product concerned which

(1) OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Regulation

(EC) No 1972/2002 (OJ L 305, 7.11.2002, p. 1).

(2) OJ L 84, 3.4.1996, p. 1.
(3) OJ L 84, 3.4.1996, p. 46.
(4) Commission Decision 2000/453/EC (OJ L 182, 21.7.2000, p. 25).
(5) OJ L 94, 14.4.2000, p. 1. Regulation as amended by Regulation

(EC) No 2314/2000 (OJ L 267, 20.10.2000, p. 15).

B. PRESENT INVESTIGATION

iron or steel. The request alleged that

Following the publication,
in September 2000, of a
notice (6) 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
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
the initiation of an expiry review
concerning imports originating in Croatia on the
grounds that available statistics show very low exports
worldwide
evidence
concerning the likely recurrence of injurious dumping.
Consequently, the measures applicable to imports origi-
nating in Croatia expired on 4 April 2001.

accordingly, no reliable

request

and,

(4)

(5)

Having determined, after consultation of the Advisory
Committee, that sufficient evidence existed for the initia-
tion of a review, the Commission initiated an investiga-
tion (7), pursuant to Article 11(2) of the basic Regula-
tion.

At the same time, likewise after consultation of the Advi-
sory 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 origi-
nating in Thailand.

(6) OJ C 271, 22.9.2000, p. 4.
(7) OJ C 103, 3.4.2001, p. 5.

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Official Journal of the European Union

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(6)

(7)

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 exami-
nation of the trends relevant for the assessment of a like-
lihood 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

advised

applicant
The Commission officially
the exporters and exporting
Community producers,
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.

(12)

(8)

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

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

(13)

(b) Interfit — Maubeuge, France

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

Germany

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

(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 impor-
ters 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 notice (1) 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
and
of

EU Steel Butt-welding

Industry,

Fittings

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 coun-
tries in August 2002 (2).

D. PRODUCT UNDER CONSIDERATION AND LIKE

PRODUCT

(not

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
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
(TARIC code
within CN codes
code
7307 93 11 99),
7307 93 19 99),
code
7307 99 30 98)
ex 7307 99 90 (TARIC code
7307 99 90 98).

ex 7307 93 19
ex 7307 99 30

(TARIC
(TARIC

ex 7307 93 11

and

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 char-
acteristics. 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.

E. LIKELIHOOD OF A CONTINUATION OR A RECUR-

RENCE OF DUMPING

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 conti-
nuation or recurrence of dumping. Since the imports of
the product under consideration from China and Thai-
land (with the exclusion of one exporting producer
which is no longer subject to anti-dumping measures)
were below the de minimis
the
analysis will not only focus on the likelihood of a conti-
nuation 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.

threshold in the IP,

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

(2) OJ L 228, 24.8.2002, p. 1.

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Official Journal of the European Union

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(16)

The two Thai exporting producers for which undertak-
ings are currently in force cooperated in the investiga-
tion by replying to the questionnaire which was sent out
by the Commission. No information was submitted by
any Chinese exporting producer and therefore the find-
ings 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
investigation
the same methodology as in the original
(see recitals 17 to 31 below).

LIKELIHOOD OF A CONTINUATION OF DUMPING

Thailand

Normal value

(17) As

is
the determination of normal value
as
far
concerned,
it was first established for the two coop-
erating Thai exporting producers whether their total
domestic sales of the like product were representative in
comparison with their total export sales to the Commu-
nity. In accordance with Article 2(2) of the basic Regula-
tion, 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 Regula-
tion, normal value was constructed by adding to the
manufacturing costs of the exported types, a reasonable
and administrative
percentage
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.

general

selling,

for

Comparison

(22)

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 to 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 descrip-
tion 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 Regula-
tion these requests were granted where it was demon-
strated 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 Commis-
sion 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 %.

China

Analogue country

Export price

(21)

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

(26)

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’).

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(27)

forces,

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 Thai-
land again as analogue country for the purpose of estab-
lishing normal value. Since it was found that the findings
of the previous investigation were still valid, i.e. prices
were governed by market
several producers
competed on the Thai market and the production tech-
nology 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 cooperated, Thailand
was, therefore,
in accordance with Article 2(7) of the
basic Regulation, considered to be an appropriate and
not unreasonable choice of analogue country for estab-
lishing normal value in respect of China for the product
concerned.

Normal value

(28)

In the absence of cooperation 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 estab-
lished for the cooperating 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 cooperate, 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
these
trade statistics since it was found that
export
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)

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

(31)

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.

Conclusion

(32)

The investigation has revealed that although the quanti-
ties 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.

Likelihood of a rise in dumped exports to the Community

(33)

For the purposes of the examination of a likelihood of
the
recurrence of dumping in significant quantities,
following factors were assessed: the evolution of the
export and/or production capacity, the background of
circumvention in the case of China and the situation in
the export behaviour on third country markets.

Thailand

(34)

The undertakings that have been accepted for the two
cooperating 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

(35)

The investigation showed that both cooperating compa-
nies 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 flex-
ibility in their production capacity, which represents
around 25 % of the total EC consumption. In addition,
these companies are extremely export
the fact
oriented shows that
their
they are likely to redirect
export sales to any market that would become more
attractive in terms of prices and volume.

that

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Thailand's exports to third countries

increase production and direct it to any export market,
including, were the measures
the
Community market.

to be repealed,

(36)

following

in 1992,

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
United States of America, has been considered. It was
an anti-dumping
found that
proceeding concerning imports of a product
largely
overlapping with the one concerned by this investiga-
tion, limited to a diameter below 360 mm, and origi-
nating,
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 dumping (1).

in Thailand,

inter alia,

China

Production and capacity utilisation

(37) Given the

absence of

cooperation 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 conclu-
sions 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 worldwide export volume given by the trade
statistics
and on a
domestic consumption estimated at roughly equal the
Community consumption (around 70 000 tonnes/year).

(around 17 000 tonnes/year),

(39) On this basis, the Chinese capacity utilisation rate would
be below 40 % and their spare capacity higher than the
total Community consumption.

(41)

(42)

Background of circumvention

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 impo-
sition of
the yearly
the original measures in 1995,
imports from Taiwan have on average multiplied by a
factor of 4, until an anti-circumvention investigation (2)
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

investigation,

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
limited to a diameter below
360 mm, originating, inter alia, in China. The first inves-
tigation, 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
measures would lead to continuation or recurrence of
injurious dumping.

the removal of

(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 cooperation to the inves-
tigation 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.

(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

Conclusion

(45)

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

(1) US Federal Register/Vol. 64, No 232, 3.12.1999.

(2) OJ L 94, 14.4.2000, p. 1.

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(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 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.

DEFINITION OF THE COMMUNITY INDUSTRY

The four Community producers which cooperated 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, repre-
senting 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.

F. THE SITUATION OF THE COMMUNITY MARKET

COMMUNITY CONSUMPTION

(51)

It should be noted that part of the EU producers' domestic sales are made to stockists (which did
not cooperate), 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.

EVOLUTION OF IMPORTS FROM THE COUNTRIES CONCERNED

Import volumes and market shares

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

oped as such:

Thailand

1996

111

1997

204

1998

614

1999

740

2000

IP

1 049

1 385

market shares

0,2 %

0,3 %

1,0 %

1,0 %

2,1 %

2,7 %

China

316

85

95

78

44

35

market shares

0,6 %

0,1 %

0,1 %

0,3 %

0,1 %

0,1 %

Taiwan

2 663

5 947

4 434

3 246

1 299

1 259

market shares

4,7 %

9,7 %

6,9 %

6,2 %

2,6 %

2,5 %

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(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 coin-
cides 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 Regula-
tion. 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 %.

PRICE EVOLUTION OF THE IMPORTS

(56)

Export prices of the two cooperating 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.

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

4 271

5 922

7 510

4 169

10 821

11 686

1996

1997

1998

1999

2000

IP

market shares

7,5 %

9,6 %

1,6 %

8,0 %

21,3 %

23,0 %

G. ECONOMIC SITUATION OF THE COMMUNITY INDUSTRY

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 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.

Production

Production

1996

1997

1998

1999

2000

IP

metric tonnes

42 455

44 771

46 499

43 009

43 903

46 905

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(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.

Capacity and capacity utilisation rates

Capacity

1996

1997

1998

1999

2000

IP

metric tonnes

88 400

88 400

88 400

87 300

87 900

87 900

Utilisation

48 %

51 %

53 %

49 %

50 %

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.

Sales volume of the product concerned for consumption in the EU

Sales volume in EC

1996

1997

1998

1999

2000

IP

metric tonnes

30 147

30 038

32 897

28 470

24 893

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.

Stocks

Closing stocks

1996

1997

1998

1999

2000

IP

metric tonnes

5 629

5 920

6 022

6 109

5 571

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.

Market share

Market shares

1996

1997

1998

1999

2000

IP

Community industry

52,8 %

48,9 %

50,9 %

54,7 %

49,0 %

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.

Sales prices of the Community industry

Unit price, sales in EC

1996

1997

1998

1999

2000

IP

EUR/metric tonne

1 812

1 686

1 595

1 515

1 437

1 413

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(65)

The Community industry's 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.

Profitability and return on investments

Profitability

% of net turnover in the EC

Return on investment

1996

3,1 %

7,5 %

1997

1998

1999

2000

IP

5,2 %

17,7 %

3,3 %

17,6 %

– 2,4 %

– 1,0 %

– 4,2 %

– 6,2 %

– 3,5 %

– 3,7 %

(66)

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).

(67)

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.

Cash flow

Cash flow

1996

1997

1998

1999

EUR 1 000

3 009

5 393

4 939

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 EUR 281 000 during the IP.

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.

Employment and wages

Employment and wages

Total employees

Average wages per
employee (EUR 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

(70)

(71)

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 %.

Productivity

Productivity

1996

1997

1998

1999

2000

IP

Productivity (production in
tonnes per employee)

77,6

81,7

80,2

77,5

82,1

80,9

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(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.

Investment

Investments

1996

1997

1998

1999

2000

IP

EUR 1 000

2 738

2 222

2 441

3 094

2 781

2 529

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

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 coun-
tries concerned (specifically circumvented via Taiwan), the Community industry sales and market
shares decreased.

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.

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).

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 intro-
duction. 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 invest-
ments 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 of Korea and Slovakia, and therefore definitive anti-
dumping measures were imposed against these countries in August 2002 (1).

(1) Council Regulation (EC) No 1514/2002 of 19 August 2002 (OJ L 228, 24.8.2002, p. 1).

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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 cooperating
exporting producers sold the product concerned at a significantly lower price than the Commu-
nity industry's. As to China, in the absence of cooperation 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
the Community
market, with an expected negative impact on the economic situation of
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.

I. COMMUNITY INTEREST

PRELIMINARY REMARK

(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.

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(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.

(84)

(85)

(86)

Interest of the Community industry

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.

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.

Interest of unrelated importers/traders

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.

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 associa-
tions of potential users. Only three companies replied and these all claimed not to be interested in
the proceeding.

This lack of cooperation 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.

J. CONCLUSION ON COMMUNITY INTEREST

(90) Given the above reasons, it is concluded that it is not considered that any possible impact on impor-
ters 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.

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.

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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 2314/2000, 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,

HAS ADOPTED THIS REGULATION:

Article 1

A definitive anti-dumping duty is hereby imposed on imports of tube or pipe fittings (other than cast
1.
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 origi-
nating in the People's Republic of China and Thailand.

The rate of the definitive 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

Rate of duty

TARIC additional code

People's Republic of China

Thailand

Except:
Thai Benkan Co. Ltd,
Prapadaeng-Samutprakarn

58,6 %

58,9 %

0 %

—

8851

A118

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

3.
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

TARIC additional code

Thailand

Awaji Sangyo (Thailand) Co. Ltd, Samut-
prakarn

TTU Industrial Corp. Ltd Bangkok.

8850

8850

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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 commer-

cial 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 excep-
tion 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 Luxembourg, 2 June 2003.

For the Council

The President

K. STEFANIS

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L 139/15

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

6. The exact description of the goods

7. The description of the terms of sale, including:

— price,
— the applicable payment terms,
— the applicable delivery terms,
— total discounts and rebates.

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