Commission Regulation (EC) No 112/2009 of 6 February 2009 imposing a provisional anti-dumping duty on imports of wire rod originating in the People's Republic of China and the Republic of Moldova
Date: 2006-02-06
Institutions: European Commission
Subjects: China, Moldova, anti-dumping duty, import, textile fibre

7.2.2009

EN

Official Journal of the European Union

L 38/3

COMMISSION REGULATION (EC) No 112/2009

of 6 February 2009

imposing a provisional anti-dumping duty on imports of wire rod originating in the People's
Republic of China and the Republic of Moldova

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty
Community,

establishing the European

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)
(the basic Regulation), and in particular Article 7 thereof,

After consulting the Advisory Committee,

Whereas:

A. PROCEDURE

1. Initiation

(1)

(2)

(3)

(4)

(5)

in irregularly wound coils, of

On 25 March 2008,
the Commission received a
complaint concerning imports of bars and rods, hot-
iron, non-alloy
rolled,
steel or alloy steel other than of stainless steel,
(wire
rod), originating in the People’s Republic of China (the
PRC), the Republic of Moldova (the RM) and Turkey.

The complaint was lodged pursuant to Article 5 of the
basic Regulation by EUROFER (the complainant) on
behalf of producers representing a major proportion, in
this case more than 25 %, of
the total Community
production of wire rod.

The complaint contained prima facie evidence of dumping
injury caused by such dumping which
and of material
was considered sufficient
to justify the opening of a
proceeding.

On 8 May 2008, a proceeding was initiated by the publi­
cation of a notice of initiation in the Official Journal of the
European Union (2) (the notice of initiation).

2. Parties concerned by the proceeding

advised

officially

exporting
The Commission
the
producers in the PRC, the RM and Turkey,
importers,
traders, users and associations known to be concerned,
the
the authorities of
complainant
other
Community producers known to be concerned of the
Interested parties were
initiation of
given the opportunity to make their views known in
writing and to request a hearing within the time limit

the RM and Turkey,
producers

the proceeding.

Community

the PRC,

and

(1) OJ L 56, 6.3.1996, p. 1.
(2) OJ C 113, 8.5.2008, p. 20.

set in the notice of initiation. All interested parties who
so requested and showed that
there were particular
reasons why they should be heard were granted a
hearing.

(MET) or

In order to allow exporting producers to submit a claim
for market economy treatment
individual
treatment (IT), if they so wished, the Commission sent
claim forms to the Chinese and Moldovan exporting
producers known to be concerned and to the authorities
of the PRC and RM. Two exporting producers from the
PRC, both consisting of groups of related companies, and
one from the RM, requested MET pursuant to Article 2(7)
of the basic Regulation, or IT should the investigation
establish that they do not meet the conditions for MET.

In view of
in the PRC and Turkey,
producers
producers
in
indicated in the notice of
methods might be applied for
dumping and injury,
the basic Regulation.

the apparent high number of exporting
importers and
Commission
sampling
the determination of
in accordance with Article 17 of

initiation that

Community,

the

the

if so,

In order to enable the Commission to decide whether
sampling would be necessary and,
to select a
sample, all exporting producers in the PRC and in
Turkey,
Community
producers were asked to make themselves known to
the Commission and to provide, as specified in the
notice of initiation, basic information on their activities
related to the product concerned.

Community

importers

and

Given the limited number of responses to the sampling
exercise, it was decided that sampling was not necessary
for Chinese and Turkish exporting producers, or for
the
and
Community
Community.

importers within

producers

(6)

(7)

(8)

(9)

(10) Questionnaires were sent to all companies in the PRC,
and Turkey who responded to the sampling exercise, to
the sole Moldovan exporting producer, to all Community
producers, users and importers who responded to the
sampling exercise, and to all other parties known to be
concerned. Replies were received from two groups of
exporting
exporting
in the
producer in the RM, six exporting producers in Turkey,
20 Community producers, one importer and eight users
in the Community.

producers

PRC,

one

L 38/4

EN

Official Journal of the European Union

7.2.2009

(11)

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

the premises of

the

(a) Exporting producers in the PRC

— Feralpi Siderurgica SpA, Lonato, Italy,

— Corus, London, United Kingdom,

— Duferco La Louviere Sales S.A, Manage, Belgium;

(e)

Importers in the Community

— Hunan Valin Xiangtan Iron & Steel Co., Ltd and
Hunan Xianggang Huaguang Wire Rod Co. Ltd,
Xiangtan, Hunan province, PRC;

— Montan Gesellschaft Voss GmbH,

Planegg,

Germany;

(b) Exporting producer in the RM

— Joint Stock Company Moldova Steel Works (here­
inafter MMZ), Rybnitsa, Transnistrian region of
the RM;
company
Panfermag Holding Ltd, Limassol, Cyprus, at its
premises in Kiev, Ukraine;

related

sales

and

its

(c) Exporting producers in Turkey

— Çolakoglu Metalurji A.S and its

related sales
company Çolakoglu dis Ticaret A.S., Karakoy,
Turkey,

— Habas Sinai ve Tibbi Gazlar Istihsal Endüstrisi AS,

Kartal, Turkey,

— Içdas Çelik Enerji Tersane ve Ulasim Sanayi AS,

Istanbul, Turkey,

— Iskenderun Demir
Iskenderun, Turkey,

ve Çelik

Fabrikalari AS,

— Kroman Çelik Sanayii AS, Kocaeli, Turkey;

(d) Producers in the Community

— Riva Fire SpA, Milan,

Italy and its

related
companies Riva Acier SA, Gargenville, France;
Riva Stahl GmbH, Hennigsdorf, Germany and
(BES)
Brandenburgische
GmbH, Brandenburg, Germany,

ElektroStahlwerke

— Global Steel Wire, Santander, Spain,

— ArcelorMittal

Hamburg

Hamburg,
Germany; ArcelorMittal Grandrange, Amneville,
France; ArcelorMittal Poland, Katowice, Poland,

GmbH,

(f) Users in the Community

— Unifer SpA, Piacenza, Italy.

(12)

In view of the need to establish a normal value for
exporting producers in the PRC and the RM to which
MET might not be granted, a verification to establish
normal value on the basis of data from an analogue
country, Brazil in this case, took place at the premises
of the following company:

— Arcelor Mittal Brazil, Belo Horizonte, Brazil.

3. Investigation period

(13)

The investigation of dumping and injury covered the
period from 1 April 2007 to 31 March 2008 (investi­
gation period or IP). The examination of
the trends
relevant for the assessment of injury covered the period
from 1 January 2004 to the end of the investigation
period (period considered).

(14)

(15)

B. PRODUCT CONCERNED AND LIKE PRODUCT

1. Product concerned

The product concerned is bars and rods, hot-rolled,
in
irregularly wound coils, of iron, non-alloy steel or alloy
steel other than of stainless steel originating in the PRC,
the RM and Turkey (the product concerned or wire rod),
declared within CN codes 7213 10 00,
normally
7213 20 00, 7213 91 10, 7213 91 20, 7213 91 41,
7213 91 49, 7213 91 70, 7213 91 90, 7213 99 10,
7213 99 90, 7227 10 00, 7227 20 00, 7227 90 10,
7227 90 50 and 7227 90 95. The product concerned
does not include stainless steel wire rod.

To produce wire rod, steel billets produced from an
electric arc furnace (EAC) or a blast furnace melt shop
are rolled through a rolling mill. Billets are progressively
reduced in cross-section by passing through a series of
rolls and then coiled. The EAC process uses metal scrap,
while the blast furnace process uses metal scrap and iron
ore.

7.2.2009

EN

Official Journal of the European Union

L 38/5

(16) Wire rod is used for welded mesh in the construction
industry (pre- or post-stressing wires and wire strands
used for
reinforcement of concrete), and has many
other uses after been drawn into wire, including in the
in the nut and bolt industry
tyre industry (tyre cord),
(fasteners), fencing products, supermarket trolleys, steel
cord, electrodes, cables, bed springs, suspension springs
and welding wire.

2. Market economy treatment (MET)

(24)

Pursuant to Article 2(7)(b) of the basic Regulation,
in
anti-dumping investigations concerning imports originat­
ing in the PRC and the RM, normal value shall be
determined in accordance with paragraphs 1 to 6 of
the said Article for those producers which are found to
meet the criteria laid down in Article 2(7)(c) of the basic
Regulation.

2. Like product

(17)

The investigation showed that the wire rod produced and
sold by the Community industry in the Community, wire
rod produced and sold on the domestic market in Brazil,
which served as an analogue country, and wire rod
produced in the PRC, the RM and Turkey and sold to
the Community and sold on the domestic Turkish
market have essentially the same basic physical and
technical characteristics and the same basic use.

(18) All the aforementioned wire rod is therefore considered
to be alike within the meaning of Article 1(4) of the
basic Regulation.

C. DUMPING

1. Application of Article 18 of the basic Regulation

(19) One Chinese exporting producer submitted a sampling
form, MET claim and answer to the anti-dumping ques­
tionnaire in due time, but failed to reply to the deficiency
letter of the Commission, even after receiving a reminder.

(20)

(21)

(22)

The company was informed about the proposed appli­
cation of Article 18 of the basic Regulation and was
given the opportunity to comment.

The company claimed that the Commission had granted
them too short deadlines for them to be able to submit
full information in their submissions and to cooperate.
Based on the fact that the company did not indicate to
the Commission any time constraints within the applied
deadlines, it was considered that no decisive arguments
were submitted or evidence provided to reverse the
decision to apply Article 18 of the basic Regulation.

The company made an appeal to the Hearing Officer.
After hearing the arguments of the company and the
observations of the Hearing Officer,
it was confirmed
that the company did not signal in good time any time
constraints and consequently did not cooperate with
sufficient diligence in the investigation.

(23)

It has been therefore considered appropriate to reject the
information submitted by this company and base the
findings on facts available.

(25)

Briefly, and for ease of reference only, the MET criteria
are set out in summarised form below:

— business decisions and costs are made in response to
market signals and without significant State inter­
ference; costs of major inputs substantially reflect
market values,

— firms have one clear set of basic accounting records
which are independently audited in line with inter­
national accounting standards (IAS) and are applied
for all purposes,

— there are no significant distortions carried over from

the former non-market economy system,

— bankruptcy

and property

laws

guarantee

legal

certainty and stability,

— exchange rate conversions are carried out at market

rates.

(26)

Following the initiation of the proceeding, two Chinese
and one Moldovan exporting producers requested MET
pursuant to Article 2(7)(b) of the basic Regulation and
replied to the MET claim form within the given deadline.

2.1. People's Republic of China

(27)

For one Chinese exporting producer, Article 18 of the
basic Regulation had to be applied (see recitals (19) to
(23)), and therefore its claim for MET was rejected.

(28) As regards the remaining Chinese exporting producer,
the company could not demonstrate that it met criteria
2 and 3. Regarding criterion 2, it was found that several
accounting policies of the company were not in line with
IAS. These problems were found to be systemic and were
not reflected in the auditors' report. Regarding criterion
3, it was found that the company was not paying the
principal of certain loans,
long after the term initially
foreseen in the loan contracts. The company was also
found to benefit from significant income tax reductions
during the IP.

L 38/6

EN

Official Journal of the European Union

7.2.2009

it was

the Chinese
Consequently,
exporting producer did not demonstrate that it fulfilled
the conditions set out
the basic
Regulation.

in Article 2(7)(c) of

concluded that

Following disclosure of the MET analysis, the Chinese
exporting producer
submitted a response where the
company agreed on non-compliance with criterion 2
but disagreed with the negative conclusion on criterion
3. In particular, the company argued that non-repayment
of the principal of a loan did not constitute a distortion
carried over from the non-market economy system but a
sign that the company enjoyed high credit rating. After
detailed examination it was found that, during the IP, the
loans in question were not covered by any contract,
therefore the company was under no legal obligation
to pay either interest or principal. The existence of
such loans significantly distorts the financial situation
of the company, and de facto constitutes a debt write
off. Additionally, the non-repayment of the principal of a
loan is not in line with market economy principles. This
argument was therefore rejected.

Furthermore, it was argued that the income tax reduction
was not a subsidy and therefore could not be treated as a
distortion carried over from the non-market economy
system. This argument was rejected as the application
of the income tax reduction is contingent upon use of
domestic equipment over imported one, and therefore
constitutes a specific subsidy.

2.2. Republic of Moldova

(33)

(34)

(35)

(36)

(37)

(29)

(30)

(31)

(32)

any of

The Moldovan producer could not demonstrate that it
the MET criteria. Regarding decision
met
making and costs (criterion 1)
it was found that the
company's top management held key positions in the
administration of the Transnistrian region of Moldova,
the breakaway but not internationally recognised ‘Trans­
nistrian Moldovan Republic’ (hereinafter TMR), and that
there were significant distortions regarding costs. With
it was found that the company
regard to criterion 2,
did not have a clear
independently audited
set of
accounting records, and serious shortcomings were iden­
tified with regard to the accuracy and consistency of the
accounts,
unreliable.
accounts
Regarding criterion 3,
there were distortions carried
from the non-market economy system which
over
affected the costs. The most significant was that
the
the company was made at a
privatisation process of
price below market value. It was also detected that the
company is frequently involved in barter trade practices.
Regarding criterion 4, concerning the legal certainty and
it was found that the company
stability of operations,
does not for the most comply with the Moldovan legal
framework. Finally, it was also found that the company
operates,
internationally
recognised and whose exchange rate is not freely set in
response to market signals (criterion 5).

in a currency not

inter alia,

rendering

thus

the

the Moldovan
it was concluded that
Consequently,
exporting producer did not demonstrate that it fulfilled
the conditions set out
the basic
Regulation.

in Article 2(7)(c) of

The Moldovan exporting producer opposed this decision.
In general, it claimed that the application of Article 2(7)
of the basic Regulation to the RM constitutes a violation
by the Community of its WTO commitments vis-à-vis
the RM.

In reply to this argument, it should be re-called that the
in
note to Article VI of the GATT acknowledges that,
cases of imports from certain countries where difficulties
may exist
in determining price comparability for the
purposes of establishing whether dumping is taking
place, WTO members may consider that a comparison
with domestic prices in such a country may not always
be appropriate. In the case of the RM, it is considered
that such difficulties exist. In these circumstances, normal
value will be determined in accordance with Article 2(7)
it is noted that
of the basic Regulation. Furthermore,
Article 2(7)(a) specifically mentions the RM in the list
of non-market
to whom this
provision applies.

economy

countries

It also claimed that mandatory time-limits set out in the
basic Regulation were not
respected. The Applicants
claimed that
the decision to reject MET should be
annulled because the Commission failed to make the
MET determination within the three-month period set
forth in Article 2(7)(c) of the basic Regulation.

It is correct that the Commission did not make the MET
determination within the three-month period following
the initiation of the investigation. However, this does not
constitute a ground for the annulment of the decision to
reject MET. While Article 2(7)(c) of the basic Regulation
the MET determination shall be made
stipulates that
within three months following the initiation of the inves­
tigation, the provision does not stipulate that missing the
three-month period has any specific consequences.
In
particular, the provision does not stipulate that if the
Commission failed to decide within the three-month
period on an exporter’s MET request,
(i) the exporter
will automatically get MET or (ii) that the institutions
may no longer impose measures against the exporter.
Thus, it follows that the mere fact that the Commission
did not respect the three-month period does not render
the decision to reject MET unlawful.

(38)

the Commission's assessment

The Moldovan exporting producer further claims that
there has been discrimination in comparison with
Ukrainian and Russian exporting producers in prior
proceedings and that
is
based on political grounds. Additionally it claims that
there are a number of errors due to lack of evidence
or because the conclusions are insufficiently reasoned,
and that
the principle of sound administration was
thus violated. The company does not detail specific
reasons for such a breach.

7.2.2009

EN

Official Journal of the European Union

L 38/7

(39)

automatically

Concerning a claim of discrimination against the RM in
regard to how MET assessments were made in previous
cases against Ukraine and Russia, it must be stated that
MET assessments are made on a case-by-case basis.
in past cases concerning these countries
Decisions
the
cannot
current
applied
be
proceeding.
that neither
It must also be pointed out
Ukraine nor Russia is currently listed in Article 2(7) of
the basic Regulation as non-market economy countries,
therefore the current situation is not comparable with the
Republic of Moldova. In light of the above, the allegation
of discrimination in treatment between the RM and other
former non-market economy countries is rejected.

to

(40)

The Moldovan company contested the Commission's
analysis of compliance with the five MET criteria.

(41)

as,

for

interference

the purpose of

Regarding criterion 1, the company argues that there is
no State
the
proceeding, references to State cannot be made with
to the TMR authorities, which are not
reference
recognised as a State. However,
it is considered that,
for the purpose of this criterion, the reference to the
State should be understood as the authorities effectively
controlling the region, whether recognised or not, who
have the capacity to interfere with the company's
decision making processes. This argument was therefore
dismissed.

(42)

The company also disagrees with the assessment of
criterion 2, claiming the company has only one set of
basic
independently
audited in line with IAS.

accounting records, which are

(43) However, it was found that the company had a first set
of accounts which were prepared according to the so-
called TMR accounting standards, which do not include a
provision for bad debts, and which were not audited. The
company had a second set of accounts, which were
consolidated with other related companies accounts and
audited, allegedly in line with IAS. This second set of
accounts received a qualified opinion from the auditors,
who expressed reservations on the valuation of the assets
by the company in 2003 and 2005. The exact reasons
for those reservations could not be made sufficiently
clear during the
company later
claimed that the reservations expressed by the auditors
were not material, but did not provide evidence in this
respect.

investigation. The

(44)

Therefore,
respect of criterion 2 had to be dismissed.

the above arguments of

the company in

(45) As for criterion 3, the company claimed that the priva­
tisation process of the company was irrelevant for the
purpose of pointing out possible distortions carried over
from the non market economy system, as the company
was subsequently re-sold at arm's length and fair market
value. However this could not be demonstrated since the
re-sale of the companies holding MMZ shares could have
included other assets and no properly documented
evaluation of those operations was submitted.

(46)

(47)

(48)

(49)

(50)

The company also claimed that, concerning barter trade
practices, the amounts of barter trade found in the inves­
tigation were not material in view of this criterion. It is
considered, however, that the materiality level of such
practices is not a valid criterion for analysis, as the real
value of the traded goods is only known to the parties
involved on the barter trade operation. Therefore the
relevant argument
is that such practices, which are
typical of non-market economies, were found to have
been regularly employed by the company. Thus the
argument of the company had to be dismissed.

company

subsequently

Concerning a loan from a related company for which the
Moldovan company could not, despite being requested to
do so, produce on spot any evidence of repayment, the
company claimed that this loan had been fully repaid.
of
The
documents allegedly as evidence of payment, but gave
no explanation on why they were not made available
on spot. The fact stays that
this evidence was not
available during on spot verifications and that this type
of submission cannot be verified at this stage of the
proceeding. Therefore the claim of the company had to
be dismissed.

submitted

copies

that

the fact

Regarding criterion 4 the company claimed that the fact
that the company was temporarily registered in the RM,
and its exports took place via the RM customs should
ensure that it complied with the RM legal framework. It
further argued that
the accounts were
the applicable laws would be
audited showed that
sufficient
It
should be noted, however, that neither the temporary
registration of a company in the RM nor the auditing
the RM’s legal
are conditional on the application of
the current ownership of
framework, and that
the
company is not
legally recognised in the RM. Those
claims were therefore dismissed.

to ensure legal certainty and stability.

rate

company

criterion 5 the

resulting from free

Regarding
claimed that
exchange rate conversions in TMR roubles are carried
sales and
out at market
purchases of currencies. However,
the
TMR currency is not recognised or traded internationally
means that it cannot be considered to have a market
value, but only a value which is administratively set by
the
argument was
therefore dismissed.

so-called TMR authorities. This

the fact

that

3. Individual treatment (‘IT’)

if any,

to Article 2(7)(a) of

the basic Regulation, a
Pursuant
countrywide duty,
is established for countries
falling under the provisions of that Article, except in
those cases where companies are able to demonstrate
that they meet all criteria set out in Article 9(5) of the
basic Regulation to be granted IT.

L 38/8

EN

Official Journal of the European Union

7.2.2009

(51)

The Chinese and Moldovan exporting producers which
did not meet the MET criteria (see recitals (28) to (33))
had also all claimed IT in the event that they were not
granted MET.

actual domestic price. This price was calculated as a
weighted average of the prices of all domestic sales of
that type made during the IP,
irrespective of whether
these sales were profitable or not.

(52) On the basis of information available, it was found that
the Chinese exporting producer met all the requirements
for IT as set out in Article 9(5) of the basic Regulation.

(53)

(54)

(55)

(56)

Regarding the sole Moldovan exporting producer, it was
found that the Moldovan exporting producer did not
meet the requirements for being granted IT as set out
in Article 9(5) of the basic Regulation, since it could not
demonstrate that export prices, quantities and conditions
were
rate
conversions were carried out at market rates, or that
State interference was not such as to permit circum­
should individual exporters be
vention of measures
given different rates of duty.

set without State

interference,

exchange

4. Normal value

4.1. Turkey

In accordance with Article 2(2) of the basic Regulation,
the Commission first examined for each exporting
producer whether the domestic sales of
the product
concerned to independent customers were representative,
i.e. whether the total volume of such sales was equal to
or greater than 5 % of the total volume of the corre­
sponding export sales to the Community.

representative

sold domestically by the

The Commission subsequently identified those product
companies having
types
overall
sales, which were
domestic
identical or directly comparable with the types sold for
export to the Community. Domestic sales of a particular
product type were considered as sufficiently representa­
tive when the volume of that product type sold on the
domestic market to independent customers during the
investigation period represented 5 % or more of
the
total volume of the comparable product type sold for
export to the Community.

The Commission subsequently examined whether the
domestic sales of each product type sold domestically
in representative quantities by each company in each
exporting country could be considered as being made
in the ordinary course of trade pursuant to Article 2(4)
of the basic Regulation. This was done by establishing
the proportion of profitable domestic sales to inde­
pendent customers, of each exported product type, on
the domestic market during the investigation period.

(57) Where the sales volume of a product type, sold at a net
to or above the calculated cost of
sales price equal
the total
production, represented more than 80 % of
sales volume of
type, and where the weighted
average price of that type was equal to or above the
cost of production, normal value was based on the

that

(58) Where the volume of profitable sales of a product type
represented 80 % or less of the total sales volume of that
type, or where the weighted average price of that type
was below the cost of production, normal value was
based on the actual domestic price, calculated as a
weighted average of profitable sales of that type only.

(59) Wherever domestic prices of a particular product type
sold by an exporting producer could not be used in
order to establish normal value, another method had to
the Commission used
regard,
In this
be
applied.
constructed
accordance with
in
value,
normal
Article 2(3) of the basic Regulation.

(60) Normal value was constructed by adding to each
exporter’s manufacturing costs of
the exported types,
adjusted where necessary, a reasonable amount
for
selling, general and administrative expenses (SG&A) and
a reasonable margin of profit.

(61)

(62)

In all cases SG&A and profit were established pursuant to
the methods set out in Article 2(6) of the basic Regu­
lation. To this end, the Commission examined whether
the SG&A incurred and the profit realised by each of the
exporting producers concerned on the domestic market
constituted reliable data.

From the five Turkish exporting producers investigated,
sales of the like product were representative. To a large
extent, normal value was based on prices paid or payable,
in the ordinary course of
trade, by independent
customers in Turkey, in accordance with Article 2(1) of
the basic Regulation.

(63) However, for those product types where the domestic
sales were insufficient or not made in the ordinary
trade, normal value was constructed in
course of
accordance with Article 2(3) of
the basic Regulation.
SG&A and profit were based on actual data pertaining
to production and sales, in the ordinary course of trade,
of the like product, by the exporting producer under
chapeau of
in accordance with the
investigation,
Article 2(6) of the basic Regulation.

4.2. PRC and RM

(64) According to Article 2(7)(a) of the basic Regulation, in
economies in transition, normal value for exporting
producers not granted MET has to be established on
the basis of the price or constructed value in a market
economy third country (analogue country). Given that
none of the exporting producers in the PRC or the RM
was granted MET, normal value for these companies had
to be established on the basis of
the data from an
analogue country.

7.2.2009

EN

Official Journal of the European Union

L 38/9

4.3. Analogue country

(65)

In the notice of initiation, Brazil was proposed as an
appropriate analogue country for the purpose of estab­
lishing normal value for the PRC and the RM. The
interested parties to comment
Commission invited all
on this proposal.

(66) Despite contacts made with a number of producers in
other third countries, no companies agreed to cooperate
except for the one Brazilian producer.

(67)

Several
interested parties submitted comments claiming
that Brazil was not an appropriate choice and proposed
Turkey as
complainant
submitted further arguments in favour of the selection
of Brazil. These arguments were analyzed and inves­
tigated by the Commission.

country. The

an analogue

(68) One interested party claimed that production methods in
the RM and Brazil were different and therefore proposed
Turkey as a more suitable analogue country for the RM.
The same party additionally claimed that the level of
in the RM and Brazil are
economic development
different. However,
the production
methods in Brazil are essentially the same or similar to
those in the PRC. The difference in production methods
between Brazil and the RM only concerns the preli­
minary process, which does not
lead to significant
differences in costs. As for the level of economic devel­
opment, it is not considered per se as a criterion for the
selection of an analogue country.

it was found that

(69)

the

It was also argued that
cooperating Brazilian
producer was related to the complainant, which would
inappropriate as analogue
render the choice of Brazil
country. This argument was not accepted. It is considered
that if prices and costs are not distorted, there is no
reason to exclude data provided by
cooperating
related to the complainant when setting
companies
in an
normal values based on the domestic sales
analogue country.

(70) One interested party claimed that

the like product
concerned was overpriced in the Brazilian domestic
market. A second interested party claimed that compe­
tition on the domestic market was distorted due to the
fact that domestic producers are vertically integrated, and
two of them would allegedly have together more than
60 % of market share.

(71)

The investigation confirmed that the domestic prices in
Brazil were quite high, as well as the profit margin
obtained by the cooperating Brazilian producer. This
could be an indication of an insufficient level of compe­
tition in the Brazilian market, caused by the fact that

there are only three producers of the like product, two
of which, as confirmed by the investigation, make up for
almost 90 % of the market.

the investigation showed that

Furthermore,
there are
around 12 producers in Turkey which, taken together
with imports from various sources, ensures a competitive
domestic market.

In any case, and to avoid the effect of high prices in the
Brazilian domestic market, and given that verified data
it
from five Turkish exporting producers are available,
was considered more appropriate to use Turkey as
analogue country rather than Brazil.

In view of the above, it is concluded that the choice of
Turkey as analogue country may be considered as more
this
appropriate
for
proceeding,
the
basic Regulation.

than Brazil
in accordance with Article 2(7)(a) of

the purpose of

4.4. Export price

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

(72)

(73)

(74)

(75)

(76) One exporting producer made some export sales via a
related importer in the Community.
In this case the
export price was constructed, pursuant to Article 2(9)
of the basic Regulation, on the basis of the price at
which the imported products were first resold to an
independent buyer, duly adjusted for all costs incurred
between importation and resale, as well as a reasonable
margin for SG&A and profits. The related importer's own
SG&A costs were used, and the profit margin was estab­
lished on the basis of the information available from
cooperating unrelated importers.

4.5. Comparison

(77)

The comparison between normal value and export price
was made on an ex-works basis.

(78)

(79)

For the purpose of ensuring a fair comparison between
the normal value and the export price, due allowance in
the form of adjustments was made for differences
affecting prices and price comparability in accordance
with Article 2(10) of the basic Regulation.

For all
investigated cooperating exporting producers
allowances for differences in transport costs, freight and
insurance costs, bank charges, packing costs, credit costs
and commissions were granted where applicable and
justified.

L 38/10

EN

Official Journal of the European Union

7.2.2009

5. Dumping margins

5.1. Chinese producers

For the only exporting producer granted IT, the dumping
margin was established by comparing their ex-works
export prices, by PCN, to the respective normal value
of the analogue country.

For all non-cooperating exporters, and given the low
level of cooperation, the residual dumping margin was
set at the level of the highest dumping margin established
for a representative quantity exported by the cooperating
exporting producer.

The provisional weighted average dumping margins
cif Community
expressed as
frontier price, duty unpaid, are:

a percentage of

the

(80)

(81)

(82)

(88)

The preliminary dumping margins are as follows:

Company name

Dumping margin

Kroman Çelik Sanayli AS (Kroman)

18,8 %

Çolakoglu Metalurji A.S (Çolakoglu)

9,8 %

Iskenderun Demir ve Çelik AȘ
(Isdemir)

Habas Sinai ve Tibbi Gazlar Istihsal
Endustri AS (Habas)

Icdas Celik Enerji Tersane ve Ulasim
Sanayii AS (Icdas)

All others (residual)

10,5 %

7,1 %

4,1 %

18,8 %

Name

Dumping margin

Valin Group

All others

36,5 %

50,5 %

D. COMMUNITY INDUSTRY

1. Community production

5.2. The Moldovan exporting producer

(83)

The calculation of the dumping margin for the Moldovan
producer was made using its verified export prices with
the domestic price of
the analogue country. As the
Moldovan producer exports to the EU are done via a
related trader, the calculation of the dumping margin is
based on a constructed export price for sales to an inde­
pendent customer in the EU, pursuant to Article 2(9) of
the basic Regulation.

(84)

The dumping margin thus calculated is 16,1 %.

cooperating Moldovan producer

(85) As cooperation was found to be high, i.e. imports from
accounted for
the
around 85 % of all
imports, a single countrywide
dumping margin was established on the basis of the
verified data of MMZ,
i.e. at the same level as for the
cooperating exporting producer.

(86)

Therefore the country wide dumping margin for the RM
is established at 16,1 %.

(89) All

available

information

including
and

information provided

concerning Community
in the
producers,
complaint
from Community
producers before and after the initiation of the investi­
gation, was used in order to establish total Community
production.

collected

data

(90) On that basis,

amount

includes

total Community production was
estimated to be around 24,9 million tonnes during the
IP. This
all
the production of
Community producers
that made themselves known
and the
estimated production of producers which
in the proceeding (silent producers).
remained silent
The silent producers account for around 30 % of total
Community production. None of the known Community
producers were neutral or opposed to the initiation of
the investigation.

(91) As regards the silent producers the Commission sent out
questionnaires to obtain more accurate data, in particular
on their sales volume and prices. However, no replies
were received from these producers. Hence,
in the
absence of any other information, the data indicated in
the complaint in respect of the silent producers was used
to establish Community production and consumption.

5.3. Turkish exporting producers

(92)

(87)

Pursuant to Article 2(11) and (12) of the basic Regulation
dumping margins were established on the basis of a
comparison of a weighted average normal value by
product type with a weighted average export price by
product type as established above.

the Community producers
The production volume of
which supported the complaint amounted to 11,1
million tonnes
representing around
45 % of
the total estimated Community production,
while other producers who supported the complaint
but did not wish to cooperate, account for 25 %.

in the IP,

thus

7.2.2009

EN

Official Journal of the European Union

L 38/11

2. Definition of the Community industry

(93) As mentioned in recital 92, the investigation showed that
Community producers that supported the complaint and
agreed to cooperate in the investigation represented
total Community production during
around 45 % of
the
therefore deemed to
constitute the Community industry within the meaning
of Article 4(1) and Article 5(4) of the basic Regulation.

IP. These producers

are

(94)

the investigation of

In view of the large number of producers that supported
the complaint and agreed to cooperate in the investi­
injury was
gation sampling for
envisaged. 20 replies were received to the sampling ques­
tionnaire sent to the known Community producers. Since
these 20 cooperating producers consisted of four groups
of companies and two independent producers,
it was
decided not to apply sampling.

(95) Given the large number of related companies included in
it was decided that the data
two of the four groups,
provided by 11 individual companies, selected on the
and also their
basis of

their production volume

geographic spread, would be verified on-spot at the pro­
visional stage. For
the remaining companies a desk
analysis of
the data submitted in their questionnaire
replies was carried out.

E. INJURY

1. Community consumption

(96)

Community consumption was established on the basis of
the total imports, derived from Eurostat, the total sales
on the Community market of the Community industry
including an
and the other Community producers,
estimate for the sales of the silent producers.

(97) As mentioned under recital 91, the silent producers were
contacted and asked to provide data,
in particular on
their production and sales of wire rod during the
period considered. However, since no cooperation was
forthcoming and in the absence of any other data
regarding their sales on the Community market,
the
data provided in the complaint was used instead.

Table 1

Community
consumption

Tonnes

Index

2004

2005

2006

2007

IP

21 517 641

20 454 603

22 438 442

23 102 366

22 754 018

100

95

104

107

106

Source: Eurostat, complaint data and questionnaire replies.

(98) Overall, Community consumption expanded by 6 % over the period considered. The expansion
started in 2006, after a temporary decrease of 5 % in 2005. After that, consumption recovered
and increased up to 2007, followed by a slight decrease during the IP. The downturn in consumption
in 2005 was a result of a lower demand in the construction industry.

2. Imports into the Community from the PRC, the RM and Turkey

2.1. Cumulation

(99)

In order to make an assessment as to the cumulation of the imports from the countries subject to
this investigation, the individual situation of each country was examined in the light of the conditions
set out in Article 3(4) of the basic Regulation.

(100) As regards the imports from the PRC and RM, it was found that their import volume was above the
de minimis threshold foreseen in Article 5(7) of the basic Regulation and that the volume of imports
from these countries was not negligible. In addition, import volumes from the two countries followed
a similar trend during the period considered, reaching a peak in 2007 and decreasing slightly
thereafter. The investigation also showed that the conditions of competition between the relevant
operators were similar, in particular during the IP. In particular, imports from these two countries
were found to undercut the prices of the Community industry. Hence it was considered that the
conditions for cumulation were met.

L 38/12

EN

Official Journal of the European Union

7.2.2009

(101) As regards imports from Turkey, the investigation showed that the cooperating exporting producers
represented practically the totality of the imports of the product concerned from that country into
the Community during the IP. As a consequence, the analysis of these imports was based on the data
provided by the cooperating exporting producers. On that basis it was found that, similarly to the
imports from the PRC and RM, the import volume from Turkey was above the de minimis threshold
foreseen in Article 5(7) of the basic Regulation and that the volume of imports from these countries
was not negligible. However, contrary to the other two countries concerned, it was found that the
conditions of competition between the relevant operators were not similar, in particular as regards
their price behaviour. Indeed these exporters were neither undercutting the prices of the Community
industry nor were they selling their products in the Community market below the non-injurious price
established for the Community industry during the IP. Hence it was considered that the conditions of
cumulation of the imports from Turkey in relation to the imports from the PRC and the RM were
not met.

(102) Based on the above,

it was provisionally concluded that

imports from Turkey should not be

cumulated with the imports from the PRC and the RM.

2.2. Dumped imports from the PRC and RM

(103)

Imports from the PRC and the RM (countries concerned) developed as follows during the period
considered:

Table 2

Total dumped imports from the
PRC and the RM

2004

2005

2006

2007

IP

Volumes (tonnes)

292 621

224 511

739 615

1 744 865

1 431 628

Index

Market share

Index

Prices (EUR/tonne)

Index

Source: Eurostat.

100

1,4 %

100

374

100

77

1,1 %

81

430

115

253

3,3 %

242

378

101

596

7,6 %

555

409

109

489

6,3 %

463

419

112

(104) The dumped imports from the countries concerned increased significantly from around 0,3 million
tonnes in 2004 to 1,4 million tonnes in 2007, i.e. almost five times. These imports peaked in 2007,
after which they showed a slightly declining trend in line with the evolution of Community
consumption.

(105) Although the average prices of dumped imports from the countries concerned increased by 12 %
it was found that they were undercutting those of the Community
in particular during the IP. As a result, their market share significantly increased from

over the period considered,
industry,
1,4 % in 2004 to 6,3 % in the IP.

2.3. Price undercutting

(106) For the purposes of analysing price undercutting, the weighted average sales prices per product type
of the Community industry to unrelated customers on the Community market, adjusted to an ex-
works level, were compared to the corresponding weighted average prices of the imports from the
countries concerned to the first independent customer, established on a cif basis, with an appropriate
adjustment for post-importation costs.

7.2.2009

EN

Official Journal of the European Union

L 38/13

(107) Cooperation from the Chinese exporters was very low. Only one producer representing 5 % of the
total export volume to the Community from the PRC cooperated in the investigation. On the basis of
comparable product
types, an average price undercutting margin of 4,5 % was found for this
producer.

(108) For all the other producers in the PRC, price undercutting was established on the basis of the average
export price as reported in Eurostat and the average price of the Community industry. On this basis,
an average price undercutting margin of 7,6 % was found.

(109) The sole Moldovan producer, MMZ, accounted for 85 % of all imports to the Community from the
RM in the IP. Therefore the undercutting margin for the RM was established based on the
comparison of the average export price of the cooperating producer with the average sales price
of the Community industry, for comparable product types. On this basis, an average price under­
cutting margin of 0,1 % was found.

(110) The above findings should be seen in the light of the fact that the product concerned is a commodity
type of product, the market of which is transparent and where all operators are aware of the prices
which are quoted. In addition, the fact that the Community market experienced increases of raw
material prices led to further pressure on sales prices, in particular during the IP.

3. Economic situation of the Community industry

3.1. Preliminary remarks

(111)

In accordance with Article 3(5) of the basic Regulation, the examination of the impact of the dumped
imports on the Community industry included an evaluation of all economic indicators for an
assessment of the state of the Community industry from 2004 to the end of the IP.

3.2. Production, production capacity and capacity utilisation

Table 3

2004

2005

2006

2007

IP

Production (tonnes)

11 475 041

10 435 463

11 464 051

11 159 222

11 122 136

Index

100

91

100

97

97

Capacity (tonnes)

14 164 000

14 652 000

14 627 000

14 846 000

15 049 000

Index

Capacity utilisation

Index

Source: Questionnaire replies.

100

81 %

100

103

71 %

88

103

78 %

97

105

75 %

93

106

74 %

91

(112) As shown in the above table, the production of the Community industry decreased by 3 % over the
period considered, although the Community consumption increased during the same period. The 9 %
decrease in production observed between 2004 and 2005 was recovered in the next year in line with
an increase of Community consumption by more than 9 %.

L 38/14

EN

Official Journal of the European Union

7.2.2009

(113) The Community industry increased its production capacity to around 15 million tonnes during the IP
in line with positive expectations in the Community market. However, in view of stagnating sales and
decreasing production volumes, the utilisation of the available capacity decreased from 81 % in 2004
to 74 % in the IP.

3.3. Sales volume and market share

(114) As mentioned under recital 94, the Community industry is constituted,

inter alia, of four groups
which include a large number of related companies. The investigation showed that there were
transfers of the product concerned between related companies. The sales figures taken into consider­
ation in the table below relate to the volume sold to the first independent customer on the
Community market.

Table 4

2004

2005

2006

2007

IP

Sales volume (tonnes)

7 596 746

6 832 143

7 585 289

7 605 382

7 570 540

Index

Market share

Index

Source: Questionnaire replies.

100

90

100

100

100

35,3 %

100

33,4 %

33,8 %

32,9 %

33,3 %

95

96

93

94

(115) While the Community consumption grew by 6 % during the period considered, the sales volume of
the product concerned by the Community industry to independent customers on the Community
market remained stable. This means that the Community industry could not benefit from the
increased consumption due to the competition from the dumped imports. Consequently the
Community industry's market share decreased by 6 % between 2004 and the IP.

(116) The loss of market share occurred despite the Community industry's efforts to move towards the

higher ends of product grades, as explained under recital 117.

3.4. Average unit prices of the Community industry

(117) Average ex-works sales prices of the Community industry to unrelated customers on the Community
market increased by 14 % over the period considered. The investigation showed that this increase in
sales prices partially resulted from shifting to higher end products, where dumped imports were not
present, but was also driven by increased production costs. It should be noted however that the
standard products represented about 80 % of the Community industry sales during the IP and thus
remained the core products of that industry.

Table 5

2005

409

99

2004

414

100

2006

435

105

2007

468

113

IP

474

114

Average price (EUR/tonne)

Index

Source: Questionnaire replies.

7.2.2009

EN

Official Journal of the European Union

L 38/15

(118)

Indeed, it was found that the average cost of production of the Community industry increased by
25 % between 2004 and the IP mainly because of the increase in the price of scrap which is the main
raw material used in the production of wire rod. The price of scrap increased by 34 % during the
same period and thus the price increase shown in the above table could cover only part of the
increase of raw material prices.

3.5. Stocks

(119) Stocks represented around 5 % of the production volume in the IP. The Community industry
decreased its stock levels by 10 % during the period considered, in particular between 2007 and
the IP. However, this decrease in stocks may indicate that a lower level of activity is foreseen in the
future. In this context it should be noted that around 20 % of the Community industry's production
is destined for captive use for further processing of downstream products. The proportion of captive
use remained stable throughout the period considered.

Table 6

2004

2005

2006

2007

IP

Stocks (tonnes)

657 667

530 578

691 413

699 508

594 408

Index

100

81

105

106

90

Source: Questionnaire replies.

3.6. Employment, wages and productivity

Table 7

2005

3 918

2004

4 131

2006

3 825

2007

4 084

IP

4 206

Employment — full-time
equivalent (FTE)

Index

100

95

93

99

102

Labour cost (EUR/FTE)

41 300

43 200

45 300

45 300

44 600

Index

Productivity (Index)

Source: Questionnaire replies.

100

100

105

96

110

108

110

98

108

95

(120) As it is generally the case in metalworking industries, the number of employees cannot be easily
increasing

reduced without compromising the output. Employment thus remained rather stable,
slightly in the IP.

(121) Despite the increase in labour costs, the investigation showed that the Community industry made
efforts to rationalise its production and reduce its costs of production in order to absorb the
significant
the
increase in the average cost of production was much less marked than the increase in scrap prices.

increase in raw material prices, as described above in recital 118. As a result

(122) Despite the increasing Community consumption over the period considered, the Community industry
was not able to increase its productivity, as could have been expected. Indeed, productivity decreased
in line with the decreasing production volume, as shown in table 3 above.

L 38/16

EN

Official Journal of the European Union

7.2.2009

3.7. Profitability, cash flow, investments, return on investment and ability to raise capital

Table 8

2005

7,1 %

50

2004

14,2 %

100

2006

8,1 %

57

2007

7,7 %

54

IP

6,7 %

47

Profitability

Index

Cash flow (1 000 EUR)

499 500

260 845

354 398

276 463

262 764

Index

100

52

71

55

53

Investments (1 000 EUR)

147 897

136 031

231 726

221 808

200 126

Index

Return on investments

Index

Source: Questionnaire replies.

100

69 %

100

92

49 %

72

157

51 %

74

150

47 %

68

135

47 %

68

(123) Profitability of the Community industry was established by expressing the pre-tax net profit of the
sales of the like product as a percentage of the turnover of these sales. Over the period considered the
profitability of the Community industry decreased from a profit of 14,2 % in 2004 to 6,7 % in the IP.
The steep decrease in profitability in 2005 may be linked to the downturn in the sector and occurred
at the same time as the decrease in consumption. In 2006 the profitability of the Community
industry recovered slightly but started to deteriorate again in 2007 and further in the IP.

(124) The Community industry increased its sales prices over the period considered. However, due to the
low-priced dumped imports it was not in a position to pass on the increased raw material costs to its
customers and benefit from the market growth which took place in those years.

(125) The trend shown by the cash flow, which is the ability of the industry to self-finance its activities,
reflects to a large extent the evolution of profitability. Although cash flow remained positive during
the period considered,
it was at a very low level compared in particular with 2004. The same
comments can be made about the return on investments, which showed a similar negative devel­
opment over the period considered.

(126) Despite its declining financial performance, the Community industry continued to invest over the
period considered. This suggests that the industry is not ready to give up production but considers
the sector to be viable. The level of investments illustrates that the sector has the ability to raise the
necessary capital. However, this ability became more limited as the cash flow significantly dete­
riorated during the period considered.

3.8. Growth

(127) The sales volume of the Community industry on the Community market stagnated between 2004
and the IP, thus preventing the Community industry from taking advantage of the expansion of
Community consumption which increased by 6 % between 2004 and the IP. As a consequence, its
market share decreased by 2 percentage points during the same period.

3.9. Magnitude of the actual margin of dumping

(128) The dumping margins for the PRC, RM and Turkey, specified above in the dumping section, are
clearly above de minimis. Given the volumes and the prices of the dumped imports, the impact of the
actual margins of dumping cannot be considered to be negligible.

7.2.2009

EN

Official Journal of the European Union

L 38/17

4. Conclusion on injury

(129) Certain injury indicators, such as sales prices (+ 14 %), production capacity (+ 6 %) and investments

(+ 35 %) show a positive trend during the period considered.

(130) However, other injury indicators such as production (– 3 %), capacity utilisation (– 9 %), market share
(– 6 %) and productivity (– 5 %) deteriorated whereas sales volume to unrelated customers on the
Community market stagnated despite the increasing consumption during the period considered. In
addition, the injury indicators related to the financial performance of the Community industry such
as cash flow (– 47 %), return on investment (– 32 %) and profitability (– 7,5 percentage points) were
seriously affected. This means that the ability of the Community industry to raise capital was also
undermined.

(131) The investigation also showed that the costs of production of the Community industry significantly
increased during the period considered, mainly due to the sharp increase in the prices of scrap
(+34 %) which is the main raw material for the production of wire rod. However, in view of the
undercutting practiced by the Chinese and Moldovan exporters during the IP, the Community
industry could not increase its sales prices in line with the increased raw material prices.

(132) Based on the above, although the Community industry remained profitable during the IP by focusing
on higher-end market segments with higher prices, its financial situation significantly deteriorated. In
the light of the foregoing, it was concluded that the Community industry suffered material injury
within the meaning of Article 3(5) of the basic Regulation.

1. Introduction

F. CAUSALITY

(133)

it was examined whether the
In accordance with Articles 3(6) and 3(7) of the basic Regulation,
dumped imports of the product concerned originating in the PRC and the RM caused injury to the
Community industry to a degree that enables it to be classified as material. Known factors other than
the dumped imports, which could at the same time be injuring the Community industry, were also
examined to ensure that possible injury caused by these other factors was not attributed to the
dumped imports.

2. Effect of the dumped imports

(134) The investigation showed that dumped imports from the PRC and the RM increased significantly, by
almost five times, over the period considered, increasing by 1.1 million tonnes between 2004 and the
IP. This increase was particularly marked between 2006 and the IP. In terms of market share,
dumped imports from the countries concerned increased their share of the Community market
from 1,4 % in 2004 to 6,3 % in the IP. In practice this corresponded to the entire increase in the
Community consumption that took place during the period considered.

(135) During the same period, although its sales volume on the Community market remained stable, the
Community industry lost market share from 35,3 % to 33,3 %, namely two percentage points.

(136) As regards prices, despite the fact that the prices of dumped imports increased by 12 % during the
period considered in line with the increased raw material prices, they were still undercutting the
the
prices charged by the Community industry on the Community market. Consequently,
Community industry was prevented from increasing its prices to cover the full
increase in raw
material prices. The profitability of the Community industry's sales on the Community market
thus decreased from 14,2 % in 2004 to 6,7 % during the IP.

(137) The investigation also showed that the wire rod market is a transparent market where the operators
are all aware of the level of the prices offered by the various sources of supply. The presence of
increasing volumes of low-priced dumped imports from the countries concerned had a negative
impact on the market overall by depressing the prices, as explained further below in recital 138.

L 38/18

EN

Official Journal of the European Union

7.2.2009

(138)

It is considered that the continued pressure exercised by the low-priced dumped imports from the
countries concerned on the Community market did not allow the Community industry to adapt its
sales prices to the increased raw material costs, in particular in the IP, when scrap prices peaked. This
explained the loss in market share, the low level of sales prices and the loss in profitability achieved
by the Community industry. It was therefore provisionally concluded that the surge of low-priced
dumped imports from the PRC and the RM had a considerable negative impact on the economic
situation of the Community industry, in particular in the IP.

3. Effect of other factors

3.1. Development of demand

(139) As mentioned in recital 98 above, the Community consumption of wire rod overall increased by 6 %
during the period considered. It is therefore considered that the evolution of consumption is not a
factor that may have contributed to the injury suffered by the Community industry.

3.2. Prices of raw material and electricity in the Community market

(140) Prices of raw material, mainly steel scrap or in some cases iron ore, have increased significantly over
the period considered. It has been argued that the increased raw material prices had an influence on
the deterioration of the economic situation of the Community industry over the period considered
and in particular in the IP, when raw material prices peaked.

(141)

It has also been claimed that the increase of the cost of electricity, a major component in the cost of
production (COP) of wire rod, was a cause of the injury suffered by the Community industry during
the IP.

(142) The investigation confirmed that the COP for the Community industry to produce wire rod increased
by 25 % during the period considered. However, in a market governed by effective trade conditions,
namely in the absence of injurious dumping, it can be expected that prices are regularly adapted to
reflect the situation of the various components of the cost of production. This did not take place in
this case. Although the Community industry increased its sales prices, it was not sufficient to prevent
the significant fall in its profitability. Accordingly, it was rather the undercutting practiced by the
Chinese and Moldovan exporters which have depressed the prices on the Community market and
prevented the Community industry from passing on the increased raw material prices to their
customers.

3.3. Captive production of the Community industry

(143)

In general, a higher volume of production leads to economies of scale which are beneficial for the
producer concerned. The Community industry is mostly vertically integrated and the captive
production is used for further processing into value added products in the downstream industry.
The investigation did not point to any production problem linked to these downstream products.
Indeed, as mentioned above in recital 119 captive use remained stable over the period considered.

(144) On that basis, it was considered that the captive production of the Community industry did not

contribute to the deterioration of its financial situation, in particular during the IP.

3.4. Sales of high end products by the Community industry

(145)

It has been argued that the Community industry is not suffering injury because it has shifted its
production and sales on the Community market towards high end products and would therefore be
shielded from dumped imports which are mainly concentrated in the standard segment of the wire
rod market.

(146) However, the above statement is contradicted by the findings of the investigation. Even if, as stated in
recital 117, the Community industry partly shifted to higher-end products, in particular during the IP,
it was found that 80 % of its sales volume consisted of standard products which were thus suffering
from the direct competition with low-priced dumped imports from the countries concerned.

7.2.2009

EN

Official Journal of the European Union

L 38/19

(147)

It was therefore considered that the shift to higher end products allowed the Community industry to
limit the decrease in its profitability over the period considered and in particular during the IP.

3.5. Self-inflicted injury

(148) One party argued that the Community industry made significant imports of wire rod from the
countries concerned and that any injury suffered by that industry should thus be considered as
self-inflicted.

(149) The examination of this claim showed that the imports of the product concerned made by the
Community industry were very low and represented less than 1 % of their production during the IP.
Therefore any injury caused by these imports would be at most negligible.

3.6. Export performance of the Community industry

(150) Although the analysis of injury and causation focused on the situation of the Community industry in
the Community market, its export performance was examined as a potential other factor that may
explain the injury found. The analysis showed that the export sales to unrelated parties made by the
Community industry remained relatively modest
(around 7 %) during the period considered.
Moreover, there was a declining trend of the share of export sales during the period considered.
The decrease in export sales volume, from around 900 000 tonnes in 2004 to around 500 000
tonnes during the IP, may be explained by the decrease in production during the same period.
However, the export price was higher than the price that the Community industry was charging
to its customers on the Community market. Hence, it was considered that the decrease in export
volume cannot explain the level of injury suffered by the Community industry and in particular the
significant drop in profitability during the IP.

3.7. Imports from other third countries

(151) The trends in import volumes and prices from other third countries between 2004 and the IP were as

follows:

Table 9

Other third countries

2004

2005

2006

2007

IP

Imports (tonnes)

1 202 566

1 417 431

1 437 307

1 070 978

1 040 648

Index

Market share

Index

Price (EUR/tonne)

Index

Source: Eurostat.

100

5,6 %

100

392

100

119

7,0 %

125

419

107

120

6,4 %

115

436

111

89

4,6 %

83

495

126

87

4,6 %

82

508

130

(152) The main other third countries exporting wire rod to the Community are Switzerland, Ukraine and
Brazil. As shown in the above table, the imports from other third countries lost sales volume and
market share during the period considered and their prices were relatively high during the IP.

(153) On the basis of the above, it was provisionally concluded that the imports from Turkey and from
other third countries did not contribute to the material injury suffered by the Community industry.

L 38/20

EN

Official Journal of the European Union

7.2.2009

3.8. Other producers in the Community

(154) The analysis of data pertaining to the Community market suggested that all the other Community
producers did not gain but lost market share during the period considered. The investigation did not
point to any particular problem concerning the competition between Community producers, or to
any trade distorting effect which may explain the material injury found for the Community industry.

(155) Based on the above, it was provisionally concluded that the producers not included in the definition
of the Community industry did not contribute to the injury suffered by the Community industry.

4. Conclusion on causation

(156) The above analysis demonstrated that there was a substantial increase in the volume and market
share of the low-priced dumped imports originating in the PRC and the RM between 2004 and the
IP. In addition, it was found that these imports were made at significantly dumped prices which were
below the prices charged by the Community industry on the Community market for similar product
types.

(157) This increase in volume and market share of the low-priced dumped imports from the PRC and the
RM coincided with an overall increase of the demand in the Community but also with the negative
development in the market share of the Community industry and a deterioration of the main
indicators pertaining to its economic situation during the IP. Indeed, the Community industry's
profitability more than halved between 2004 and the IP.

(158) The examination of the other known factors which could have caused injury to the Community
industry revealed that none of these factors could have had a significant negative impact on that
industry, in particular during the IP.

(159) Based on the above analysis, which has properly distinguished and separated the effects of all known
factors on the situation of the Community industry from the injurious effects of the dumped imports,
it was provisionally concluded that the imports from the PRC and the RM have caused material injury
to the Community industry within the meaning of Article 3(6) of the basic Regulation.

5. Imports from Turkey

Table 10

Turkey

2004

2005

2006

2007

IP

Imports (tonnes)

540 040

581 432

754 811

625 409

560 669

Index

Market share

Index

Price (EUR/tonne)

Index

Source: Eurostat.

100

2,5 %

100

397

100

108

2,8 %

112

369

93

139

3,4 %

136

388

98

116

2,7 %

93

444

112

104

2,5 %

100

458

115

(160) As shown in the above table, import volumes from Turkey increased by 4 %, thus slightly less than
the increase in consumption during the period considered. In contrast to imports from the PRC and
the RM, import volumes from Turkey peaked in 2006, after which they showed a decreasing trend.
Their market share also peaked in 2006, after which it decreased and reached the level of 2004 in
the IP.

7.2.2009

EN

Official Journal of the European Union

L 38/21

(161) The average import prices increased by 15 % over the
period considered. As described above in paragraph
2.1, imports from Turkey were not found to be under­
cutting the prices of the Community industry on the
Community market during the IP. In addition, no under­
selling was found by these imports.

(162)

In view of the above it is concluded that imports from
Turkey did not contribute to the injury suffered by the
Community industry.

market share lost during the period considered, with a
further positive impact on its economic situation and
profitability.

(167)

It was therefore concluded that the imposition of provi­
sional anti-dumping measures to imports originating in
the PRC and in the RM would be in the interest of the
Community industry.

3. Importers

G. COMMUNITY INTEREST

1. Preliminary remark

(163)

for

the

despite

concluding

examined whether,

In accordance with Article 21 of the basic Regulation, it
was
provisional
conclusion on injurious dumping, compelling reasons
in the
that
existed
Community interest to adopt provisional anti-dumping
measures in this particular case. The analysis of
the
Community interest was based on an appreciation of
all the various interests involved, including those of the
Community industry, importers and users of the product
concerned.

it was not

(168) Questionnaires were

sent

to nine

importers.

they did not want

Four
importers explicitly stated that
to
cooperate whereas four other importers did not react.
This indicates that the importers would not be greatly
affected by the imposition of measures. Only one
importer cooperated in the investigation by replying to
the questionnaire and allowing an on-spot verification of
its reply. According to data provided by this importer, it
sources wire rod predominantly from Turkey. Therefore,
should measures be imposed on imports of wire rod
from the PRC and the RM, it would not be affected.

2. Community industry

(169)

It was therefore concluded, based on the information
available,
anti-
dumping measures would not have a significant impact
on the importers.

imposition of provisional

that

the

(164) The Community industry is composed of numerous
producers
Community,
throughout
employing directly over 4 000 people related to the
product concerned.

located

the

4. Users

(165) The Community industry has suffered material

injury
caused by the dumped imports from the PRC and the
RM. It is recalled that most injury indicators showed a
negative trend during the period considered. In particular
injury indicators related to the financial performance of
the Community industry, such as cash flow, return on
investments and profitability were seriously affected. In
the absence of measures, a further deterioration in the
Community industry's economic situation appears very
likely.

(166)

the costs of

It is expected that the imposition of provisional anti-
dumping duties will restore effective trade conditions
on the Community market and that the price of wire
rod will reflect
the various components
and the market conditions. The investigation showed
that a price increase of 3 % or an increase in sales
volume would be sufficient
to allow this industry to
quickly restore its financial situation. It can be expected
that the imposition of provisional measures would enable
the Community industry to regain at least part of the

(170) Questionnaires were sent

to 28 users. However only
eight users, accounting for 15 % of imports of wire rod
from the countries concerned during the IP, cooperated
in the investigation. These users located in Italy, Spain,
Poland
1 % of
Community consumption, are active in various industrial
sectors, mainly
and
mechanical engineering.

construction

representing

automotive,

Belgium,

only

and

in

(171) Three of the cooperating users (belonging to an Associ­
ation) are active in the construction industry. During the
IP they accounted together for 12 % of all
imports of
In the same period
wire rod from the PRC and RM.
they sourced the majority of
their wire rod (58 %)
from the two countries concerned, while the rest was
purchased from either other
the
Community industry.
it was found that
In addition,
wire rod accounts for a substantial proportion of their
cost of production. Therefore, it cannot be excluded that
the imposition of measures could have a negative impact
on these users. However, taking into account the avail­
ability of alternative sources of supply,
in other third
countries not subject
to measures as well as in the
Community, this impact should be limited.

third countries or

L 38/22

EN

Official Journal of the European Union

7.2.2009

(172) The users' association referred to above in recital 171,
whose members are active in the construction sector and
in some instances in direct competition with some of the
vertically integrated Community producers, alleged that
the imposition of measures would lead to a shortage of
supply in this particular sector. It is considered, however,
that given the existing spare capacity in the Community
as well as alternative supply sources available in other
third countries, including Turkey, there should be no risk
of shortage on the Community market. In addition, the
exporting producers in the PRC and the RM should be
able to continue to sell the product concerned on the
Community market, albeit at non-injurious prices.

(173) One of the eight cooperating users did not import any
wire rod from the countries concerned during the IP.
Therefore, this company should not be affected nega­
tively by the imposition of measures.

(174) As regards the remaining four users in the Community,
they accounted for 3 % of the total imports of wire rod
from the countries concerned and are mainly active in
the automotive sector and mechanical engineering. These
users mainly purchased their wire rod from suppliers in
the Community and other third countries and the share
of imports from the countries concerned in relation to
their total imports was found to be very low (5 %) during
the IP. In these circumstances, it is considered that the
imposition of measures would not have a significant
impact on the financial situation of these companies.

(175) Taken the above into consideration, it was provisionally
concluded that, on the basis of the information available,
the effect of the anti-dumping measures, if any, will most
likely not have a material
impact on the users of the
product concerned.

5. Conclusion on Community interest

(176)

In view of the above, it was provisionally concluded that
overall, based on the information available concerning
the Community interest,
are no compelling
reasons against the imposition of provisional measures
on imports of wire rod originating in the PRC and the
RM.

there

H. PROVISIONAL ANTI-DUMPING MEASURES

1. Injury Elimination Level

(177)

the conclusions reached with regard to
In view of
dumping,
resulting injury, causation and Community
interest, provisional measures should be imposed in
order to prevent
further injury being caused to the
Community industry by the dumped imports from the
PRC and the RM.

(178) For the purpose of determining the level of these duties,
account was taken of the dumping margins found and
the amount of duty necessary to eliminate the injury
sustained by the Community industry.

that

any measures

(179) When calculating the amount of duty necessary to
the injurious dumping it was
remove the effects of
allow the
should
considered
Community industry to cover its costs of production
and to obtain a profit before tax that could be reasonably
achieved by an industry of this type in the sector under
normal conditions of competition, i.e. in the absence of
dumped imports, on sales of the like product in the
Community. The pre-tax profit margin used for this
calculation was of 9.9 %, established on the basis of
the profit achieved by the Community industry for the
years prior to the peak in dumped imports, namely 2004
to 2006. On this basis, a non-injurious price was
calculated for
the like
product.

the Community industry for

(180) The necessary price increase was then determined on the
basis of a comparison of the weighted average import
price, as established for the price undercutting calcu­
lations, with the non-injurious price of products sold
by the Community industry on the Community market.
Any difference resulting from this comparison was then
expressed as a percentage of the total cif import value.

(181)

In order to calculate the residual injury elimination level
for all other exporting producers in the PRC, it should be
recalled that the level of cooperation was low. Therefore
the margin for the non-cooperators was established on
the basis of the highest margin found for a representative
quantity sold by the cooperating exporter on the
Community market.

(182) As regards the RM, the level of cooperation was high.
Hence, data available and verified during the investigation
was used to calculate the country-wide injury elimination
level for the country. The margin is based on the average
price found in the RM for certain transactions during the
IP.

2. Provisional measures

(183)

it is considered that,

in
In the light of the foregoing,
accordance with Article 7(2) of
the basic Regulation,
provisional anti-dumping duties should be imposed on
imports originating in the PRC and the RM at the level of
the lower of the dumping and the injury margins,
in
accordance with the lesser duty rule.
In this case, all
duty rates should accordingly be set at the level of the
injury margins found.

(184) No provisional anti-dumping duties are to be imposed on

imports originating in Turkey.

7.2.2009

EN

Official Journal of the European Union

L 38/23

(185)

the present

investigation. Therefore,

the situation found during that

Individual company anti-dumping duty rates specified in
the
this Regulation were established on the basis of
findings of
they
reflect
investigation
with respect to these companies. These duty rates (as
opposed to the countrywide duty applicable to all
other companies) are thus exclusively applicable to
imports
country
concerned and produced by the companies and thus by
the specific legal entities mentioned. Imported products
specifically
produced by
this Regulation,
mentioned in the operative part of
including
specifically
mentioned, cannot benefit
from these rates and shall
to the duty rate applicable to ‘all other
be subject
companies’.

company not

any other

originating

products

in the

entities

related

those

to

of

(e.g.

(186) Any claim requesting the application of these individual
following a
company anti-dumping duty rates
change in the name of
the entity or following the
setting up of new production or sales entities) should
be addressed to the Commission forthwith with all
relevant information,
in particular any modification in
the company's activities linked to production, domestic
and export sales associated with, for example, that name
that change in the production and sales
change or
entities. If appropriate the Commission will, after consul­
tation of the Advisory Committee, amend the Regulation
accordingly by updating the list of companies benefiting
from individual duty rates.

(187) The proposed anti-dumping duties are the following:

Company

Injury
elimination
margin

Dumping
margin

Anti-dumping
duty rate

Valin Group
(PRC)

8,6 %

36,5 %

8,6 %

PRC residual duty

24,6 %

50,5 %

24,6 %

RM country-wide
duty

3,7 %

16,1 %

3,7 %

I. FINAL PROVISION

(188)

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

HAS ADOPTED THIS REGULATION:

Article 1

A provisional anti-dumping duty is hereby imposed on
1.
in irregularly wound
imports of bars and rods, hot-rolled,
iron, non-alloy steel or alloy steel other than of
coils, of
7213 10 00,
steel,
stainless
7213 91 41,
7213 20 00,
7213 99 10,
7213 91 49,
7213 99 90,
7227 90 10,
7227 90 50 and 7227 90 95 and originating in the People's
Republic of China and the Republic of Moldova.

7213 91 10,
7213 91 70,
7227 10 00,

7213 91 20,
7213 91 90,
7227 20 00,

falling within

CN codes

The rate of the provisional anti-dumping duty applicable
2.
to the net, free-at-Community-frontier price, before duty, of the
products described in paragraph 1 and produced by the
companies below shall be as follows:

Country

Company

Duty

TARIC
additional codes

People's Republic of
China

Valin Group

8,6 %

A930

Republic of Moldova

All other
companies

All
companies

24,6 %

A999

3,7 %

—

The release for free circulation in the Community of the
3.
product referred to in paragraph 1 shall be subject
to the
provision of a security equivalent to the amount of the provi­
sional duty.

Unless otherwise

4.
concerning customs duties shall apply.

specified,

the provisions

in force

Article 2

Without prejudice to Article 20 of Regulation (EC) No 384/96,
interested parties may request disclosure of the essential facts
and considerations on the basis of which this Regulation was
adopted, make their views known in writing and apply to be
heard orally by the Commission within one month of the date
of entry into force of this Regulation.

Pursuant to Article 21(4) of Regulation (EC) No 384/96, the
parties concerned may comment on the application of this
Regulation within one month of the date of its entry into force.

L 38/24

EN

Official Journal of the European Union

7.2.2009

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

Article 3

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

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

Done at Brussels, 6 February 2009.

For the Commission

Catherine ASHTON
Member of the Commission