Proposal for a Council Regulation imposing a definitive anti-dumping duty on imports of certain seamless pipes and tubes, of iron or steel originating in Croatia, Romania, Russia and Ukraine, repealing Council Regulations (EC) No 2320/97 and (EC) No 348/2000, terminating the interim and expiry reviews of the anti-dumping duties on imports of certain seamless pipes and tubes of iron or non-alloy steel originating, inter alia, in Russia and Romania and terminating the interim reviews of the anti-dumping duties on imports of certain seamless pipes and tubes of iron or non-alloy steel originating, inter alia, in Russia and Romania and in Croatia and Ukraine
Date: 2006-06-06
Institutions: European Commission
Subjects: Croatia, Romania, Russia, Ukraine, anti-dumping duty, import, piping, tube

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 6.6.2006 
COM(2006) 268 final 

Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty on imports of certain seamless pipes and tubes, 
of iron or steel originating in Croatia, Romania, Russia and Ukraine, repealing Council 
Regulations (EC) No 2320/97 and (EC) No 348/2000, terminating the interim and expiry 
reviews of the anti-dumping duties on imports of certain seamless pipes and tubes of 
iron or non-alloy steel originating, inter alia, in Russia and Romania and terminating 
the interim reviews of the anti-dumping duties on imports of certain seamless pipes and 
tubes of iron or non-alloy steel originating, inter alia, in Russia and Romania and in 
Croatia and Ukraine 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1)  CONTEXT OF THE PROPOSAL 

110 

•  Grounds for and objectives of the proposal 

This  proposal  concerns  the  application  of  Council  Regulation  (EC)  No  384/96  of 
22 December 1995 on protection against dumped imports from countries not members 
of  the  European  Community,  as  last  amended  by  Council  Regulation  (EC)  No 
2117/2005 of 21 December 2005 ("the basic Regulation") in the proceeding concerning 
imports  of  certain  seamless  pipes  and  tubes,  of  iron  or  steel  originating  in  Croatia, 
Romania, Russia and Ukraine. 

120 

•  General context 

This proposal is made in the context of the implementation of the basic Regulation and 
is the result of an investigation which was carried out in line with the substantive and 
procedural requirements laid out in the basic Regulation. 

139 

141 

219 

229 

230 

•  Existing provisions in the area of the proposal 

There are no existing provisions in the area of the proposal. 

•  Consistency with other policies and objectives of the Union 

Not applicable. 

2)  CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

•  Consultation of interested parties 

Interested  parties  concerned  by  the  proceeding  have  already  had  the  possibility  to 
defend their interests during the investigation, in line with the provisions of the basic 
Regulation. 

•  Collection and use of expertise 

There was no need for external expertise. 

•  Impact assessment 

This proposal is the result of the implementation of the basic Regulation. 

The  basic  Regulation  does  not  foresee  a  general  impact  assessment  but  contains  an 
exhaustive list of conditions that have to be assessed. 

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3)  LEGAL ELEMENTS OF THE PROPOSAL 

305 

•  Summary of the proposed action 

The initiation of the present investigation, in March 2005, followed a complaint lodged 
by the Defence Committee of the Seamless Steel Tube Industry of the European Union 
(‘the complainant’), concerning imports of certain seamless pipes and tubes (‘SPT’), of 
iron  or  steel  originating  in  Croatia,  Romania,  Russia  and  Ukraine.  The  product 
concerned is classified under 11 CN codes (‘extended product scope’). 

At  the  same  time,  the  Commission  initiated  ex-officio  two  interim  reviews  of  the 
existing  measures  covering  5  of  the  11  CN  codes  (‘original  product  scope’)  against 
Russia  and  Romania  and  against  Croatia  and  Ukraine  because  those  measures  would 
have to be amended or repealed if measures were to be imposed on the broader product 
scope of the new investigation. 

Dumping  has  been  found  for  all  countries  involved,  with  dumping  margins  ranging 
from  11,7 %  to  17,8 %  for  Romania,  from  24,1 %  to  35,8 %  for  Russia,  29,8 %  for 
Croatia, and from 12,3 % to 25,7 % for Ukraine. This dumping has been found to cause 
material  injury  to  the  Community  producers  (with  injury  margins  higher  than  the 
dumping margins in all cases). 

The Community interest of imposing anti-dumping measures on imports of SPT from 
the  four  countries  mentioned  above  was  examined  and  it  was  found  no  compelling 
reason why measures should not be imposed. 

On the basis of the above, it is proposed to impose definitive anti-dumping measures 
on  imports  of  SPT  originating  in  Croatia,  Romania,  Russia  and  Ukraine  and  to 
terminate the on-going interim reviews mentioned above. 

Member States were consulted and supported this proposal. 

It  is  proposed  that  the  Council  adopt  the  attached  proposal  for  a  Regulation  which 
should  be  published  in  the  Official  Journal  as  soon  as  possible  and  not  later  than 
29 June 2006. 

310 

•  Legal basis 

Council  Regulation  (EC)  No  384/96  of  22  December  1995  on  protection  against 
dumped  imports  from  countries  not  members  of  the  European  Community,  as  last 
amended by Council Regulation (EC) No 2117/2005 of 21 December 2005.  

329 

•  Subsidiarity principle 

The proposal falls under the exclusive competence of the Community. The subsidiarity 
principle therefore does not apply. 

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•  Proportionality principle 

The proposal complies with the proportionality principle for the following reason(s). 

The form of action is described in the above-mentioned basic Regulation and leaves no 
scope for national decision. 

Indication  of  how  financial  and  administrative  burden  falling  upon  the  Community, 
national governments, regional and local authorities, economic operators and citizens is 
minimized and proportionate to the objective of the proposal is not applicable. 

•  Choice of instruments 

Proposed instruments: Regulation. 

Other means would not be adequate for the following reason(s). 

The above-mentioned basic Regulation does not foresee alternative options. 

331 

332 

341 

342 

4)  BUDGETARY IMPLICATION 

The proposal has no implication for the Community budget. 

409 

E-3244 

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Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty on imports of certain seamless pipes and tubes, 
of iron or steel originating in Croatia, Romania, Russia and Ukraine, repealing Council 
Regulations (EC) No 2320/97 and (EC) No 348/2000, terminating the interim and expiry 
reviews of the anti-dumping duties on imports of certain seamless pipes and tubes of 
iron or non-alloy steel originating, inter alia, in Russia and Romania and terminating the 
interim reviews of the anti-dumping duties on imports of certain seamless pipes and 
tubes of iron or non-alloy steel originating, inter alia, in Russia and Romania and in 
Croatia and Ukraine 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, 

Having  regard  to  Council  Regulation  (EC)  No  384/96  of  22  December  1995  on  protection 
against dumped imports from countries not members of the European Community1 (‘the basic 
Regulation’), and in particular Article 8, 9, 11(2) and 11(3) thereof, 

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

Whereas: 

1. 

PROCEDURE 

1.1 

Initiation 

(1) 

On  31  March  2005,  the  Commission  announced  by  a  notice  (‘notice  of  initiation’), 
published  in  the  Official  Journal  of  the  European  Union2,  the  initiation  of  an  anti-
dumping proceeding concerning imports into the Community of certain seamless pipes 
and  tubes  (‘SPT’),  of  iron  or  steel  (‘extended  product  scope’)  originating  in  Croatia, 
Romania,  Russia  and  Ukraine  and  the  initiation  of  two  interim  reviews  of  the  anti-
dumping duties on imports of SPT of iron or non-alloy steel (‘original product scope’) 
originating, inter alia, in Russia and Romania and in Croatia and Ukraine. 

1 

2 

OJ  L  56,  6.3.1996,  p.  1.  Regulation  as  last  amended  by  Regulation  (EC)  No  2117/2005  (OJ  L  340, 
23.12.2005, p.17). 
OJ C 77, 31.3.2005, p. 2. 

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(2) 

(3) 

The  anti-dumping  proceeding  was  initiated  following  a  complaint  lodged  on 
14 February 2005 by the Defence Committee of the Seamless Steel Tube Industry of 
the European Union (‘the complainant’) on behalf of producers representing a major 
proportion,  in  this  case  more  than  50 %,  of  the  total  Community  production  of  the 
extended  product  scope.  The  complaint  contained  evidence  of  dumping  of  the  said 
product and of material injury resulting there from, which was considered sufficient to 
justify the initiation of a proceeding. 

The interim reviews were initiated by the Commission on its own initiative, pursuant 
to  Article  11(3)  of  the  Council  Regulation  (EC)  No  384/96  on  protection  against 
dumped imports from countries non member of the European Community (the ‘basic 
Regulation’)3,  in  order  to  allow  for  any  amendment  or  repeal  necessary  of  the 
definitive anti-dumping measures imposed by Council Regulations (EC) No 2320/974 
and  348/20005  on  imports  of  the  original  product  scope  from,  inter  alia,  Croatia, 
Romania,  Russia  and  Ukraine  (‘the  definitive  measures’).  The  necessary  amendment 
or repeal  may arise,  should  it  be determined that measures are to be imposed on the 
extended product scope, due to the fact that the products upon which measures have 
been imposed by Council Regulations (EC) No 2320/97 and 348/2000, fall within the 
extended product scope. 

1.2  Measures in force on the original product scope 

(4) 

Regulation (EC) No 2320/97 imposed anti-dumping duties on imports of the original 
product  scope  originating,  inter  alia,  in  Romania  and  Russia.  By  Decisions 
97/790/EC6  and  2000/70/EC7,  undertakings  were  accepted  from  exporters  in,  inter 
alia, Romania and Russia. By Regulation (EC) No 1322/20048, it was decided to no 
longer  apply  the  measures  in  force  on  imports  of  the  original  product  scope  from 
Romania  and  Russia  as  a  matter  of  prudence  in  connection  with  an  anti-competitive 
behaviour  of  certain  Community  producers  in  the  past9.  Recital  20  of  the  same 
Regulation confirmed the interim and expiry reviews, initiated in November 200210, to 
be still ongoing until new findings would be available to permit an assessment for the 
future  on  the  basis  of  new  data  that  could  in  any  event  not  be  affected  by  the  anti-
competitive conduct. 

3 

4 

5 

6 
7 
8 
9 
10 

OJ  L  56,  16.3.96,  p.  1,  Regulation  as  last  amended  by  Council  Regulation  (EC)  N°  2117/2005 
(OJ L 340, 23.12.2005, p.17). 
OJ L 322, 25.11.1997, p. 1, Regulation as last amended by Regulation (EC) No 1322/2004 (OJ L 246, 
20.7.2004, p. 10). 
OJ  L  45,  17.2.2000,  p.  1,  Regulation  as  last  amended  by  Regulation  (EC)  No  258/2005  (OJ  L  46, 
17.2.2005, p. 7). 
OJ L 322, 25.11.1997, p. 63. 
OJ L 23, 28.1.2000, p. 78. 
OJ L 246, 20.7.2004, p. 10. 
See recitals (9) et seq. of Regulation (EC) No 1322/2004. 
OJ C 288, 23.11.2002, p. 2. 

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(5) 

(6) 

Following  a  review  investigation  carried  out  in  accordance  with  Article 11(3)  of  the 
basic  Regulation,  the  Council,  by  Regulation  (EC)  No  258/200511,  amended  the 
definitive measures imposed by Regulation (EC) No 348/2000, repealed the possibility 
of  exemption  from  the  duties  provided  for  in  Article  2  of  the  same  Regulation  and 
imposed  an  anti-dumping  duty  of  38,8 %  on  imports  of  the  original  product  scope 
from Croatia and an anti-dumping duty of 64,1 % on imports of the original product 
scope from Ukraine with the exception of imports from Dnepropetrovsk Tube Works 
(‘DTW’) which are subject to an anti-dumping duty of 51,9 %.  

By  Decision  2005/133/EC12,  the  Commission  partially  suspended  the  definitive 
measures for a period of nine months, with effect from 18 February 2005. The partial 
suspension was extended for a further period of one year by Council Regulation (EC) 
No  1866/200513.  Therefore,  the  duties  in  force  are  those  established  by  Council 
Regulation (EC) No 348/2000, i.e. 23 % for Croatia and 38,5 % for Ukraine. 

1.3 

Provisional measures 

(7) 

Given the need to further examine certain aspects of the investigation and also because 
of  the  interrelation  with  the  interim  and  expiry  reviews,  referred  to  in  section  1.2. 
above,  it  was  decided  to  continue  the  investigation  without  the  imposition  of 
provisional measures.  

1.4 

Parties concerned by the proceeding 

(8) 

(9) 

(10) 

The  Commission  officially  advised  the  exporting  producers  in  Croatia,  Romania, 
Russia and Ukraine, the importers/traders, users, suppliers and associations known to 
be  concerned,  the  representatives  of  the  exporting  countries  concerned  and  the 
complainant  Community  producers  and  other  Community  producers  known  to  be 
concerned  of  the  initiation  of  the  proceeding.  Interested  parties  were  given  the 
opportunity to make their views known in writing and to request a hearing within the 
time limit set in the notice of initiation. 

In view of the large number of Russian and Ukrainian exporting producers listed in the 
complaint,  the  large  number  of  Community  importers  of  the  product  concerned  and 
the  large  number  of  Community  producers  supporting  the  complaint,  the  notice  of 
initiation envisaged the use of sampling for the determination of dumping and injury, 
in accordance with Article 17 of the basic Regulation. 

In  order  to  enable  the  Commission  to  decide  whether  sampling  would  be  necessary 
and,  if  so,  to  select  a  sample,  all  Russian  and  Ukrainian  exporting  producers, 
Community  importers  and  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 during the investigation 
period (1 January 2004 to 31 December 2004).  

11 
12 
13 

OJ L 46, 17.2.2005, p. 7. 
OJ L 46, 17.2.2005, p. 46. 
OJ L 300, 17.11.2005, p. 1. 

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1.4.1  Sampling of exporters/producers 

(11)  After  examination  of  the  information  submitted  by  the  Russian  and  Ukrainian 
exporting  producers  and  due  to  the  fact  that  in  both  countries  the  majority  of 
companies  belong  to  large  producer  groups,  it  was  decided  that  sampling  was  not 
necessary with regard to Russia and Ukraine. 

1.4.2  Sampling of Community industry and importers 

(12)  With  regard  to  Community  producers,  in  accordance  with  Article  17  of  the  basic 
Regulation,  a  sample  was  selected  based  on  the  largest  representative  volume  of 
production and sales of Community producers, which can reasonably be investigated 
within the time available. On the basis of the information received from Community 
producers, the Commission selected five companies located in four different Member 
States.  One  of  the  originally  sampled  Community  producers  did  subsequently  not 
cooperate and was replaced by another Community producer. In terms of production 
volume  the  five  sampled  companies  represented  49 %  of  the  total  Community 
production.  In  accordance  with  Article  17(2)  of  the  basic  Regulation,  the  parties 
concerned  were  consulted  and  raised  no  objection.  In  addition,  the  remaining 
Community  producers  were  requested  to  provide  certain  general  data  for  the  injury 
analysis.  In  view  of  the  small  number  of  responses  received  by  importers,  it  was 
decided that sampling of importers was not necessary. 

1.5  Market economy treatment/Individual treatment claim forms 

(13) 

In  order  to  allow  exporting  producers  in  Ukraine  to  submit  a  claim  for  market 
economy  treatment  (‘MET’)  or  individual  treatment  (‘IT’),  if  they  so  wished,  the 
Commission  sent  claim  forms  to  the  Ukrainian  exporting  producers  known  to  be 
concerned. Claims for MET, or for IT in case the investigation establishes that they do 
not  meet  the  conditions  for  MET,  were  received  from  three  groups  of  exporting 
producers and their related companies. 

1.6  Questionnaires 

(14)  The  Commission  sent  questionnaires  to  all  parties  known  to  be  concerned  and  to  all 
other companies that made themselves known within the deadlines set out in the notice 
of initiation. Replies were received from three Romanian exporting producers together 
with their two related companies, two groups of Russian exporting producers together 
with five related companies, three of them located in the Community, and three groups 
of  Ukrainian  exporting  producers  and  their  related  companies.  Questionnaire  replies 
were also received from five Community producers. Although six importers replied to 
the  sampling  form,  only  three  cooperated  by  submitting  a  full  questionnaire  reply. 
Another importer agreed to have a verification visit carried out at its premises, despite 
the fact that it did not submit a questionnaire reply.  

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(15)  The Commission sought and verified all the information it deemed necessary for the 
purpose  of  a  determination  of  dumping,  resulting  injury  and  Community  interest. 
Verification visits were carried out at the premises of the following companies: 

Community producers 

-Dalmine S.p.A., Bergamo, Italy 

-Rohrwerk Maxhütte GmbH, Sulzbach-Rosenberg, Germany 

-Tubos Reunidos S.A., Amurrio, Spain 

-Vallourec & Mannesmann France S.A., Boulogne Billancourt, France 

-V & M Deutschland GmbH, Düsseldorf, Germany 

Exporting producers in Romania 

-S.C. Artrom S.A., Slatina 

-S.C. Silcotub S.A., Zalau 

-S.C. Mittal Steel Roman S.A., Roman 

Exporting producers in Russia 

-Volzhsky Pipe Works Open Joint Stock Company (‘Volzhsky’), Volzhsky  

-Joint Stock Company Taganrog Metallurgical Works (‘Tagmet’), Taganrog 

-Joint  Stock  Company  Pervouralsky  Novotrubny  Works 
Pervouralsk 

(‘Pervouralsky’), 

-Joint Stock Company Chelyabinsk Tube Rolling Plant (‘Chelyabinsk’), Chelyabinsk 

Related company in Russia 

-CJSC Trade House TMK, Moscow 

Exporting producers in Ukraine 

-CJSC Nikopolsky Seamless Tubes Plant Niko Tube, Nikopol 

-CJSC Nikopol Steel Pipe Plant Yutist (Yutist), Nikopol 

-OJSC Dnepropetrovsk Tube Works (DTW), Dnepropetrovsk  

-OJSC Nizhnedneprovsky Tube Rolling Plant (NTRP), Dnepropetrovsk 

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Related trader in Ukraine 

-SPIG Interpipe, Dnepropetrovsk, related to NTRP and Niko Tube 

Related trader in Switzerland 

-SEPCO S.A., Lugano, related to NTRP and Niko Tube  

Related importer  

-Sinara Handel GmbH, Köln, related to Artrom  

Unrelated importers 

-Thyssen Krupp Energostal S.A., Torun, Poland 

-Assotubi S.P.A., Cesena, Italy 

-Bandini Sider S.R.L., Imola, Italy 

1.7 

Investigation period 

(16)  The  investigation  of  dumping  and  injury  covered  the  period  from  1  January  2004  to 
31 December  2004  (the  ‘investigation  period’  or  ‘IP’).  The  examination  of  trends 
relevant  for  the  assessment  of  injury  covered  the  period  from  1  January  2001  to  the 
end of the IP (‘the period considered’). 

2. 

PRODUCT CONCERNED AND LIKE PRODUCT 

2.1 

Product concerned 

(17)  The product concerned is certain seamless pipes and tubes (‘SPT’), of iron or steel, of 
circular cross-section, of an external diameter not exceeding 406,4 mm with a Carbon 
Equivalent Value (CEV) not exceeding 0,86 according to the International Institute of 
Welding  (IIW)  formula  and  chemical  analysis.  The  product  concerned  is  currently 
classified  under  CN  codes  ex  7304  10  10,  ex  7304  10  30,  ex  7304  21  00, 
ex 7304 29 11,  ex  7304  31  80,  ex  7304  39  58,  ex  7304  39  92,  ex  7304  39  93, 
ex 7304 51 89,  ex  7304  59  92  and  ex  7304  59  9314  (TARIC  codes  7304  10  10  20, 
7304 10  30  20,  7304  21  00  20,  7304  29  11  20,  7304  31  80  30,  7304  39  58  30, 
7304 39 92 30, 7304 39 93 20, 7304 51 89 30, 7304 59 92 30 and 7304 59 93 20). 

(18)  The  product  concerned  is  used  in  a  wide  variety  of  applications,  like  line  pipes  to 
transport  liquids,  in  the  construction  business  for  piling,  for  mechanical  uses,  gas 
tubes, boiler tubes and oil and country tubular goods (‘OCTG’) for drilling, casing and 
tubing for the oil industry.  

14 

As defined in Commission Regulation (EC) No 1719/2005 of 27 October 2005 amending Annex I to 
Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common 
Customs  Tariff  (OJ  L  286,  28.10.2005,  p.1).  The  product  coverage  is  determined  in  combining  the 
product  description  in  Article  1(1)  and  the  product  description  of  the  corresponding  CN  codes  taken 
together. 

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(19)  SPT take very different forms at the time of their delivery to the users. They can be 
e.g.  galvanized,  threaded,  delivered  as  green  tubes  (i.e.  without  any  heat  treatment), 
with special ends, different cross-sections, cut to size or not. There are no generalized 
standard  sizes  for  the  tubes,  which  explains  why  most  of  the  SPT  are  made  upon 
customers’  order.  SPT  are  normally  connected  by  welding.  However,  in  particular 
cases  they  can  be  connected  by  their  thread  or  be  used  alone,  although  they  remain 
weldable.  The  investigation  showed  that  all  SPT  share  the  same  basic  physical, 
chemical and technical characteristics and the same basic uses. 

(20)  The  definition  of  the  product  scope  of  this  proceeding  was  contested  by  some 
interested parties. Firstly, some parties alleged that some product types included in the 
product  description  have  different  basic  mechanical  and  chemical  characteristics 
(see recitals  (21)  to  (26)).  Secondly,  several  claims  challenged  the  use  of  the 
weldability  criterion  and  the  CEV  threshold  which  are  linked  (see  recitals  (27)  to 
(36)).  Furthermore,  one  party  requested  that  so-called  ‘certified  SPT’  should  be 
exempted from the product scope (see recital (37)). 

Other basic physical, chemical and technical characteristics and end-uses 

(21) 

It was alleged that some product types included in the product description, namely the 
OCTG  and  gas  tubes,  would  have  different  basic  mechanical  and  chemical 
characteristics  and  end-uses  as  compared  to  the  other  SPTs  and  would  not  be 
interchangeable.  

(22)  The  product  as  defined  consists  in  different  product  types.  However,  product  types 
falling in different segments (including bottom end and top end) will be considered as 
forming  a  single  product  if  there  are  no  clear  dividing  lines  between  the  various 
segments,  i.e.  if  there  is  some  overlapping  and  competition  between  adjoining 
segments. This is the case in the present proceeding, as evidence was submitted that 
the  alloyed  and  non-alloy  tubes  subject  to  investigation  could  be  used  for  the  same 
end-uses, and that there are no clear dividing lines inside both the non-alloyed and the 
alloyed tubes categories. 

(23)  As  regards  the  OCTG  and  gas  tubes,  the  investigation  showed  that  they  have, 
inter alia, comparable chemical characteristics to the remaining SPT types since they 
fall within the 0,86 CEV threshold. Furthermore, they share other basic characteristics 
with the remaining product types, such as outside diameter and wall thickness.  

(24)  As  far  as  the  end-uses  of  the  OCTG  and  gas  tubes  are  concerned,  certain  exporting 
producers argued that OCTG and gas tubes would be used in different applications and 
not be interchangeable with the remaining SPT types. In this respect, it was found that 
plain  end  OCTGs  currently  classified  under  CN  code  7304 21 00  and  used  in  the 
construction  sector  are  interchangeable  with  other  non  alloy  steel  tubes  currently 
classified  under  CN  code  7304  39 58.  There  is  therefore  at  least  a  partial  overlap  as 
regards the end-use of the different SPT types. 

(25)  On the basis of the above, the claim that, on the one hand, OCTG and gas tubes and, 

on the other hand, other SPT types are not interchangeable is rejected.  

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CEV is a chemical characteristic of the product 

(26)  Another exporting producer claimed that the CEV was not a chemical characteristic of 
the product, since it is not directly linked to the chemical composition of an SPT, but 
is  a  function  of  it.  Whereas  it  is  true  that  the  CEV  is  the  result  of  a  formula,  the 
formula  is  directly  linked  to  the  chemical  composition  of  the  product,  and  allows  a 
comparison  of  different  grades  of  steel  regarding  the  weldability.  The  CEV  is  not 
linked either to any technical or mechanical characteristic of steel, and solely depends 
on its chemical composition. On this basis, it is considered that the CEV is a chemical 
characteristic of the product, and this claim was rejected. 

Weldability being an unsuitable criterion to determine the product scope 

(27)  Some parties argued that the criterion of weldability as such is an irrelevant property 
for  the  product  concerned  since  a  significant  part  of  the  products  included  in  the 
product scope (threaded tubes and OCTG tubes) are claimed not to be ever welded. It 
was therefore claimed that by using weldability as a criterion, different products were 
artificially being considered as one single product. 

(28) 

It  should  firstly  be  noted  that  weldability  is  indeed  a  chemical  and  technical 
characteristic (since it depends on the chemical composition of a steel and determines 
the weldability of it) common to all SPT. As most of SPT are connected by welding, it 
is  an  essential  feature  for  the  definition  of  the  product.  Secondly,  with  regard  to 
threaded  tubes  and  OCTG  which  might  usually  not  be  welded,  the  investigation 
showed that they remain nevertheless weldable and thus also share this basic chemical 
and  technical  characteristic.  Moreover,  it  cannot  be  excluded  that  threaded  or 
threadable SPT as well as OCTG would be transformed into weldable SPT by a simple 
removal  action.  In  particular  as  regards  OCTG,  there  is  evidence  that  the  same  tube 
may  be  classified  under  two  different  categories  (and  even  CN  codes)  purely 
depending on its end use, i.e. usage in the construction or in the oil drilling industry. 
Finally, it was found that certain imports from the countries concerned which had been 
classified as OCTG had not been used in the oil/gas sector. 

(29)  An  exporter  submitted  that  according  to  European  Norms,  only  one  steel  grade  is 
suitable for threadable tubes, and that these products could thus be distinguished from 
other  SPTs.  However,  the  analysis  of  the  different  norms  existing  for  OCTG  in 
particular  has  shown  that  there  is  not  a  unique  steel  grade  which  can  be  used  for 
producing threadable tubes.  

(30)  Given the above, the weldability of SPT is considered a suitable criterion to determine 
the  product  scope.  The  argument  that  the  proposed  definition  of  the  product  is 
artificially grouping different products is therefore rejected. 

CEV threshold being unsuitable to determine the weldability of SPT 

(31) 

It was claimed that the use of the CEV threshold was not a criterion allowing to define 
the product scope as it would not be a suitable criterion to determine the weldability of 
different types of SPT. 

EN 

12 

   EN 

 
(32)  The investigation showed that the CEV is indeed an indicator which is directly linked 
at the same time to the chemical composition of the steel and to its weldability. A high 
CEV not only means that the steel contains more carbon and/or alloys but also means 
that the steel is less easy to weld. On the other hand, a lower CEV value means that the 
steel  is  less  rich  in  carbon  and/or  alloys  and  also  easier  to  weld.  In  other  words, 
different levels of CEV require different conditions for welding. A steel with a level of 
CEV  of  0,86  will  already  require  special  welding  conditions  and  therefore  not 
normally  be  welded.  Thus,  as  the  CEV  is  an  indicator  of  the  weldability,  the  CEV 
threshold  was  considered  a  relevant  criterion  for  the  determination  of  the  product 
scope. 

(33)  An  exporting  producer  claimed  that  the  CEV  was  only  one  of  many  chemical, 
technical and mechanical characteristics of the steel, and therefore could not be used 
alone to define the product scope. It is noted in this regard that the CEV is considered 
a suitable criterion to determine the product scope. Moreover, as the product definition 
shows,  CEV  is  not  the  only  criterion  used.  Last  but  not  least,  the  comparability  of 
product  types  was  done  on  a  more  detailed  basis,  taking  into  account  various 
characteristics of the product (e.g. dimensions and heat treatment). 

CEV of 0,86 was set in an arbitrary manner 

(34)  Moreover, some interested parties alleged that the threshold CEV of 0,86 was set in an 
arbitrary manner as the limit for easy weldabilty would be lower than 0,86. However, 
the  CEV  value  of  0,86  is  not  linked  to  the  concept  of  easy  weldability.  Indeed,  the 
complainant Community industry argued and provided evidence that it represents the 
maximum CEV value for a non-alloyed steel that can be used for SPT according to the 
European norms. 

(35)  Therefore, it is concluded that both the use of the CEV and the defined threshold of 
0,86  capture a  range of products which can be considered as a single product, albeit 
excluding from the definition, for instance, stainless steel or ball bearing tubes, which 
have CEV values higher than 0,86. 

(36)  On  the  basis  of  the  above,  the  CEV  threshold  as  proposed  by  the  applicant  was 

maintained in the definition of the product concerned. 

“Certified SPT” 

(37)  One of the importers in the Community claimed that so called “certified” SPT should 
not  fall  within  the  product  scope.  These  SPT  are  produced  according  to  a  certified 
procedure approved by the Italian Ministry for Public Works and used in consolidation 
works in construction projects in Italy. However, it was established that all types of the 
product concerned, including certified SPT, had the same basic physical, chemical and 
technical  characteristics  and  end-uses.  No  evidence  was  found  which  would  have 
allowed to conclude that these certified tubes would be a different product and should 
therefore be excluded from  the  scope  of the  measures  (nor  did  the  company  provide 
any such evidence). This claim had therefore to be rejected. 

EN 

13 

   EN 

 
(38)  On the basis of the above, it was concluded that all SPT, notwithstanding the different 
possible  product  types,  constitute  one  product  for  the  purpose  of  this  proceeding 
because they have the same basic physical, chemical and technical characteristics and 
the same basic uses. 

2.2 

Like product 

(39)  The product exported to the Community from Croatia, Romania, Russia and Ukraine, 
the product produced and sold on the domestic market of these countries as well as the 
product  produced  and  sold  in  the  Community  by  the  Community  producers  were 
found  to  have  the  same  basic  physical  and  technical  and  chemical  characteristics  as 
well as the same uses and are therefore considered as like products within the meaning 
of Article 1(4) of the basic Regulation. 

3. 

DUMPING 

3.1  General methodology  

(40)  The  general  methodology  set  out  hereinafter  has  been  applied  to  all  cooperating 
exporting  producers  in  Croatia,  Romania,  Russia,  as  well  as  for  the  cooperating 
Ukrainian  exporting  producers  for  which  MET  was  granted.  The  presentation  of  the 
findings on dumping for each of the countries concerned therefore only describes what 
is specific for each exporting country. 

3.1.1  Normal value 

(41) 

In accordance with Article 2(2) of the basic Regulation, it was first examined for each 
cooperating  exporting  producer  whether  its  domestic  sales  of  the  product  concerned 
were  representative,  i.e.  whether  the  total  volume  of  such  sales  represented  at  least 
5 %  of  the  total  export  sales  volume  of  the  producer  to  the  Community.  The 
Commission subsequently identified those types of the product concerned sold on the 
domestic  market  by  the  companies  having  overall  representative  domestic  sales  that 
were  identical  to  or  directly  comparable  with  the  types  sold  for  export  to  the 
Community. 

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

(43)  Subsequently,  it  was  examined  whether  each  type  of  the  product  concerned  sold 
domestically  in  representative  quantities  could  be  considered  as  being  sold  in  the 
ordinary  course  of  trade  pursuant  to  Article  2(4)  of  the  basic  Regulation,  by 
establishing  the  proportion  of  profitable  sales  to  independent  customers  on  the 
domestic market of the product type in question.  

EN 

14 

   EN 

 
(44) 

In cases where the sales volume of the relevant product type, sold at a net sales price 
equal to or above the calculated cost of production, represented more than 80 % of the 
total sales volume of that 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  actual 
domestic  price,  calculated  as  a  weighted  average  of  the  prices  of  all  domestic  sales 
made during the IP, irrespective of whether these sales were profitable or not. In cases 
where the 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,  provided  that 
these sales represented 10 % or more of the total sales  volume of that type. In cases 
where the volume of profitable sales of any product type represented less than 10 % of 
the  total  sales  volume,  it  was  considered  that  this  particular  type  was  sold  in 
insufficient  quantities  for  the  domestic  price  to  provide  an  appropriate  basis  for  the 
establishment of the normal value.  

(45)  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 be applied. 
In  this  regard,  the  Commission  used  constructed  normal  value.  In  accordance  with 
Article  2(3)  of  the  basic  Regulation,  normal  value  was  constructed  by  adding  to  the 
exporter’s  manufacturing  costs  of  the  exported  types,  adjusted  where  necessary,  a 
reasonable percentage for selling, general and administrative expenses (‘SG&A’) and 
a  reasonable  margin  of  profit.  Pursuant  to  Article  2(6)  of  the  basic  Regulation,  the 
percentage for SG&A and profit margin were based on the average SG&A and profit 
margin of sales in the ordinary course of trade of the like product. 

3.1.2  Export price 

(46) 

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. 

(47)  Where  the  export  sale  was  made  via  related  importers,  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. In this regard, the related importers’ own SG&A costs 
were used. The profit margin was established on the basis of the information available 
from cooperating unrelated importers. 

3.1.3  Comparison 

(48)  The  normal  value  and  export  prices  were  compared  on  an  ex-works  basis.  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. 
Appropriate  adjustments  were  granted  in  all  cases  where  they  were  found  to  be 
reasonable, accurate and supported by verified evidence. 

EN 

15 

   EN 

 
3.1.4  Dumping margin for the companies investigated 

(49)  According  to  Article  2(11)  and  (12)  of  the  basic  Regulation,  for  each  exporting 
producer the weighted average normal value was compared with the weighted average 
export price per product type.  

(50)  For  those  exporting  producers  found  to  be  related  companies,  a  weighted  average 
dumping  margin  was  calculated  in  accordance  with  the  standard  practice  of  the 
Commission for related exporting producers.  

3.1.5  Residual dumping margin 

(51)  For  non-cooperating  companies,  a  residual  dumping  margin  was  determined  in 

accordance with Article 18 of the basic Regulation, on the basis of the facts available. 

3.2 

Croatia 

3.2.1  Non-cooperation of the Croatian exporter 

(52)  The sole producer in Croatia, Mechel Željezara Ltd., went into liquidation in autumn 
2004.  In  its  place,  a  new  legal  entity  named  Valjaonica  Cijevi  Sisak  d.o.o.  (‘VCS’) 
was  founded  by  the  Croatian  Privatisation  Foundation,  a  governmental  institution  in 
charge of the privatisation process in Croatia.  

(53)  VCS  informed  the  Commission  that  it  was  not  able  to  cooperate  in  the  current 
investigation, since its legal predecessor had formally ceased to exist and production 
of  SPT  had  stopped  in  July  2004.  According  to  the  company,  it  did  not  have  the 
authorisation  to  disclose  any  commercial,  accounting  or  production  data  held  by  its 
previous owners. Therefore, since it was not possible to establish the dumping margin 
based on the company’s own data, it was calculated on the basis of facts available, in 
accordance with Article 18 of the basic Regulation. 

(54)  From the information submitted it appears that VCS resumed the production of SPT in 
June  2005.  The  company  may  lodge  a  request  for  an  interim  review  in  accordance 
with Article 11(3) of the basic Regulation.  

3.2.2  Normal value 

(55) 

In the absence of any other information, the normal value was calculated on the basis 
of facts available, i.e. information in the complaint.  

3.2.3  Export price 

(56)  The export price was calculated on the basis of Eurostat data for the IP.  

3.2.4  Comparison 

(57)  Pursuant to Article 2(10) of the basic Regulation, adjustments were made to the export 
price  in  respect  of  transport  and  insurance  costs  and  commissions,  based  on 
information in the complaint.  

EN 

16 

   EN 

 
3.2.5  Dumping margin 

(58)  The  dumping  margin,  expressed  as  a  percentage  of  the  CIF  import  price  at  the 

Community border, duty unpaid, is as follows: 

Company 

Valjaonica Cijevi Sisak d.o.o.  

Dumping margin 

29,8 % 

(59)  Since  VCS  is  the  sole  producer  of  the  product  concerned  in  Croatia,  the  residual 

dumping margin was set at the same level. 

3.3 

Romania 

(60)  Questionnaire  replies  were  received  from  three  exporting  producers,  two  of  which 

being related to importers of the product concerned in the Community.  

3.3.1  Normal value 

(61)  For  all  three  exporting  producers,  the  total  volume  of  domestic  sales  of  the  like 
product was representative as defined in recital (41) above. For the majority of product 
types  normal  value  was  based  on  prices  paid  or  payable,  in  the  ordinary  course  of 
trade,  by  independent  customers  in  Romania.  However,  for  some  product  types  the 
domestic sales were insufficient to be considered representative or they were not made 
in  the  ordinary  course  of  trade,  and  therefore  normal  value  was  constructed  as 
described in recital (45). 

3.3.2  Export price 

(62)  Most  of  the  export  sales  of  one  exporting  producer  to  the  Community  during  the  IP 
were to two related importers. The export price was therefore constructed as described 
in recital (46).  

(63)  This exporter contested the calculation made by the Commission and argued that the 
profit  margin  used  was  excessive.  It  stated  that  the  average  profit  margin  calculated 
based  on  the  figures  provided  by  the  three  cooperating  unrelated  importers  in  the 
Community  was  not  representative,  as  it  never  sold  products  to  these  companies.  It 
further argued that the three companies were bigger than the importers to which it sold 
its products, that in the last investigation, a lower profit margin was used, and that the 
actual profit of the two related importers was lower than the average profit rate used 
by the Commission.  

(64) 

In this respect, it should be noted that it is the Institutions’ consistent practice to use 
the  weighted  average  profit  of  unrelated  importers,  where  warranted,  for  the 
adjustment provided for in Article 2(9) of the basic Regulation. Whether the exporter 
actually sold its products to these companies is not relevant in the determination of a 
reasonable  margin  for  profit  pursuant  to  Article  2(9)  of  the  basic  Regulation. 
Furthermore, no evidence as to how the size of importers would influence their profit 
rate  was  submitted.  Finally,  due  to  the  relation  between  exporters  and  their  related 
importers, the profit of related importers cannot be used as a basis or as a reference in 
this  context  because  the  level  of  profit  of  the  related  importer  will  depend  on  the 
transfer price between the related parties. This claim was therefore rejected.  

EN 

17 

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(65)  A substantial part of the export sales of another exporting producer to the Community 
was to two companies, one being related to the exporter and one having been related to 
it during part of the IP. The latter did not cooperate in the investigation, and its resale 
price  to  independent  customers  in  the  Community  was  thus  not  submitted  to  the 
Commission.  The  only  export  prices  available  for  those  transactions  to  the  related 
importer  having  been  related  to  the  exporter  during  part  of  the  IP  were  the  prices 
agreed  between  the  exporter  and  its  related  importer.  It  was  established  that  those 
prices were equivalent to arm’s length prices. Indeed, a price comparison between the 
period during which the two companies were related and the period within which they 
were  not  related  any  longer  showed  that  there  were  no  significant  differences  in  the 
unit  prices  charged.  Moreover,  the  prices  charged  to  this  related  importer  were 
compared with prices charged to unrelated customers in the EC and they were found in 
line. The export price was thus based, for those transactions, on the sales price of the 
Romanian exporting producer to its related trading company.  

(66)  As  regards  the  transactions  to  the  other  related  company,  which  cooperated  in  the 
investigation, it was found that the product concerned was further transformed by the 
related company before it was resold in the Community. In that case, no resale price of 
the  product  concerned  to  an  independent  customer  in  the  Community  could  be 
determined.  However,  sufficient  evidence  was  found  that  the  transfer  price  between 
the Romanian exporting producer and its related company in the Community could be 
considered  as  equivalent  to  an  arm’s  length  price,  provided  that,  pursuant  to  Article 
2(10)(d)(i) of the basic Regulation, an adjustment for level of trade for those original 
equipment  manufacturer  (OEM)  sales  were  made.  Indeed,  a  comparison  was  made 
between  the  prices  charged  for  all  models  to  the  related  importer  and  to  unrelated 
importers. Therefore, the export price was based on the transfer price. 

(67)  The  investigation  showed  that  the  export  sales  of  the  third  exporting  producer  were 
made  directly  to  unrelated  customers  in  the  Community.  Therefore,  the  export  price 
was established on the basis of export prices actually paid or payable for the product 
concerned when sold to the first independent customer in the Community as described 
in recital (46). 

(68)  This exporting producer requested that part of the sales of the product concerned to the 
Community should be excluded from the dumping calculation on the grounds that the 
production  of  certain  models  of  SPT  had  been  stopped  at  some  point  during  the  IP. 
However,  as  explained  above,  it  is  the  Institution’s  practice  to  take  normally  into 
account all sales of the product concerned to unrelated parties in the weighted average 
export price. It should also be noted that sales of those types of the product concerned 
occurred during the IP in important volumes and that in addition it was found that the 
production  facilities  for  those  types  of  SPT  had  not  been  dismantled  and  could  be 
started again in the future. Given the above, the claim was rejected. 

3.3.3  Comparison 

(69)  Adjustments  were  made,  where  appropriate,  in  accordance  with  Article  2(10)  of  the 
basic  Regulation,  in  respect  of  discounts  for  differences  in  quantities,  transport, 
insurance, handling, loading, and ancillary costs, credit, commissions, and differences 
in level of trade.  

EN 

18 

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(70)  One exporting producer claimed adjustments for differences in level of trade, for extra 
logistics  costs  which  were  allegedly  incurred  for  domestic  sales  and  not  for  export 
sales and for differences in quantities. However, the exporter did not substantiate the 
claims nor did the investigation otherwise establish that these claims were warranted. 
Therefore, they had to be rejected. The claim for differences in quantities was partially 
rejected  insofar  as  the  amount  claimed  could  not  be  justified  with  the  evidence 
collected  on  the  spot  and  the  information  provided  in  the  exporting  producer’s 
questionnaire response.  

(71)  Another exporting producer claimed adjustments for differences in inflation, currency 

conversions, level of trade and differences in indirect selling expenses.  

(72)  With regard to the claim for an adjustment for the inflation, it should be noted that the 
inflation rate in Romania was at a level of 10,8 % during the investigation period, far 
from  hyperinflation  level.  As  it  was  not  found  that  price  comparability  had  been 
affected,  the  claim  was  rejected.  The  exporter  objected  to  this  conclusion  and 
reiterated its claim for an allowance. However, no new argument or evidence rebutting 
the preliminary conclusion was submitted and it is confirmed that the claim is rejected. 
It  should  also  be  noted  that  the  possibility  of  a  quarterly  assessment  was  envisaged, 
but declined by the exporter. 

(73)  As  regards  currency  conversions,  the  exporting  producer  claimed  that  it  should  be 
granted a period of 60 days to reflect movements in the currency exchange rates, under 
the  provision  of  Article  2(10)(j)  of  the  basic  Regulation.  It  was  found  that  this 
provision  cannot  be  applied  in  this  case,  as  evidence  was  found  that  no  sustained 
movement in the relevant currency exchange rates occurred during the IP, but merely 
fluctuations  of  a  small  amplitude.  Therefore,  this  claim  had  to  be  rejected,  and  the 
conversion of currencies was based in all cases on the rate  at  the date of invoice, as 
provided for by Article 2(10)(j) of the basic Regulation.  

(74)  As regards the claim for differences in level of trade, the investigation showed that for 
certain categories of customers, for which the claim was made, consistent and distinct 
differences  in  functions  and  prices  existed  at  the  level  claimed  by  the  exporting 
producer. The claim was therefore accepted as regards the categories of customers for 
which  the  differences  could  be  demonstrated,  and  only  partially  accepted  as  regards 
the other categories of customers for which the difference was found to be lower than 
claimed by the exporting producer. In the latter case, the calculation of the adjustment 
was based on the evidence collected at the premises of the exporting producer.  

(75)  As regards the claim for difference in indirect selling expenses, it was found redundant 
with  the  adjustments  granted  for  differences  in  level  of  trade,  and  it  was  therefore 
rejected. 

(76)  Furthermore, following the comments received from exporters, some clerical mistakes 

were corrected, and dumping margins were recalculated accordingly. 

EN 

19 

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3.3.4  Dumping margin 

(77)  The comparison between the normal value and the export price showed the existence 
of dumping. The dumping margins expressed as a percentage of the CIF import price 
at the Community border, duty unpaid, are the following: 

Company 

S.C. Artrom S.A. 

S.C. Mittal Steel Roman S.A. 

S.C. Silcotub S.A. 

Dumping margin 

17,8 % 

17,7 % 

11,7 % 

(78)  Since the level of cooperation was high (more than 80 % of the exports of the product 
concerned from Romania to the Community) and there was no reason to believe that 
any exporting producer deliberately abstained from cooperation, the residual dumping 
margin  applicable  to  all  other  exporters  in  Romania  was  set  at  the  same  level  as  the 
one  established  for  the  cooperating  exporting  producer  S.C.  Artrom  S.A.,  namely 
17,8 %. 

3.4 

Russia 

(79)  Questionnaire  replies  were  received  from  two  groups  of  exporting  producers,  one  of 
which  consists  of  four  producers  and  five  related  companies  (‘TMK  group’)  and  the 
other one of two producers (‘Pervouralsky and Chelyabinsk’).  

3.4.1  Non-cooperation of TMK Group 

(80)  The  questionnaire  replies  of  all  four  producers  and  the  five  related  companies  were 
significantly  deficient  and  inconsistent,  and  except  for  two  related  companies,  no 
replies were received by the deadline given for completing the questionnaire replies.  

(81)  On-spot  verifications  were  carried  out  at  two  of  the  four  producers  and  one  related 
company in Russia but these revealed further weaknesses of the questionnaire replies. 
Regarding the two producers visited, no reliable normal value and export prices could 
be  established  since  both  domestic  and  export  sales  listings  were  largely  deficient; 
values  and  quantities  did  not  correspond  with  invoices  and  product  control  numbers 
(‘PCNs’)  were  found  to  be  wrong.  Furthermore,  no  reliable  cost  of  production  data 
could be obtained.  

(82)  Given this entirely unsatisfactory cooperation of the two producers visited, the highly 
deficient  questionnaire  replies  of  the  two  remaining  producers  of  the  group,  in 
particular the fact that one producer did not provide any sales listings, and the fact that 
no  replies  were  provided  to  the  deficiency  letters  of  the  Commission  by  the  given 
deadline, it was decided not to carry out verification visits at the other two producers 
of the group. 

(83)  Only two of the three related importers provided a more comprehensive questionnaire 
reply, of which only one was verifiable whereas the resale listing of the other related 
importer was largely deficient. Therefore, even the related importers only cooperated 
partially, and to a very poor degree indeed. 

EN 

20 

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(84)  The TMK group claimed that they could not properly cooperate because of the choice 
of  the  PCN,  which  in  their  opinion  was  inadequate  given  the  very  diversified 
production  range  of  the  four  producers.  It  should  be  noted,  however,  that  the 
classification of the product concerned into the proposed PCN structure did not cause 
any problems to either the Community producers or other exporting producers, some 
of which also produce a large variety of SPT. The claim was therefore rejected.  

(85) 

In view of the above, it was considered that the dumping margin for the TMK Group 
could  not  be  established  on  the  basis  of  their  own  data.  The  dumping  margin  was 
therefore determined on the basis of facts available, in accordance with Article 18 of 
the basic Regulation. 

3.4.1.1 Normal value 

(86) 

In  this  case,  it  was  found  that  the  normal  value  information  established  for 
Pervouralsky  and  Chelyabinsk  would  constitute  the  most  appropriate  facts  available, 
pursuant  to  Article  18  of  the  basic  Regulation..  Indeed,  this  information  seemed  to 
reflect best the situation on the Russian market.  

(87)  Pursuant  to  Article  2(5)  of  the  basic  Regulation  the  price  of  gas  used  for  the 
calculation of cost of production in the complaint was adjusted in the same manner as 
for the two cooperating producers, as described below in recitals (94) to (99) to reflect 
market prices for gas during the IP. 

3.4.1.2 Export price 

(88)  The export price was calculated on the basis of Eurostat data for the IP, reduced by the 
quantities  and  values  obtained  from  the  two  cooperating  producers  listed  infra  in 
recital (91).  

3.4.1.3 Comparison 

(89)  Pursuant to Article 2(10) of the basic Regulation, adjustments were made to the export 
price  in  respect  of  transport  and  insurance  costs  and  commissions,  based  on 
information in the complaint.  

3.4.1.4 Dumping margin 

(90)  The comparison between the normal value and the export price showed the existence 
of dumping. The dumping margin expressed as a percentage of the CIF import price at 
the Community border, duty unpaid, is the following:  

Company 

Volzhsky Pipe Works Open Joint Stock Company,  
Joint Stock Company Taganrog Metallurgical Works, 
Sinarsky Pipe Works Open Joint Stock Company and 
Seversky Tube Works Open Joint Stock Company 

Dumping margin 

35,8 % 

EN 

21 

   EN 

 
3.4.2  Pervouralsky and Chelyabinsk  

(91)  Chelyabinsk and Pervouralsky were separate legal entities during the IP, but since the 
end  of  2004  they  are  related  as  Chelyabinsk  owns  the  majority  of  shares  in 
Pervouralsky, and directly controls the company. Therefore, only one duty should be 
imposed on the group. 

3.4.2.1 Normal value 

(92)  For  both  exporting  producers,  domestic  sales  of  the  product  were  representative  as 
defined in recital (41). In accordance with the methodology described in recitals (42) 
to (45),  normal  values were  established, depending on the product type exported, on 
the basis of sales prices of all sales, of sales prices of profitable sales only or on the 
basis of constructed normal values.  

(93) 

It  was  found  that  the  cost  allocation  of  the  company  for  certain  individual  product 
types did neither reflect the large variation in domestic sales prices, nor the important 
cost drivers. Thus, it had to be considered as unreliable. Therefore facts available were 
used as set out in Article 18 of the basic Regulation. In this case, a profit for the whole 
group  had  to  be  calculated  based  on  all  sales  of  the  product  concerned  which  was 
subsequently used for the determination of normal values. 

(94)  With  regard  to  the  manufacturing  costs,  and  in  particular  energy  costs,  it  was  found 
during  the  investigation  that  electricity  prices  paid  by  both  companies  reasonably 
reflected the actual production costs of the electricity purchased. This was evidenced 
in this case by the fact that the electricity prices were in line with international market 
prices,  when  compared  to  countries  like  Norway  and  Canada,  which  also  rely  on 
hydroelectricity.  However,  the  same  could  not  be  said  with  regard  to  gas  prices. 
Indeed  it  was  found  that  the  gas  prices  paid  by  both  companies  did  not  reasonably 
reflect the costs of gas.  

(95) 

It  was  established  on  the  basis  of  data  found  in  the  Russian  gas  provider  OAO 
Gazprom’s published annual report for 2004, that the domestic price of gas paid by the 
two Russian producers was much lower than the average export prices from Russia to 
both Western and Eastern parts of Europe. The same report states: ‘Gazprom Group is 
required to supply natural gas to Russian consumers at prices regulated by the Federal 
Tariff  Service.  As  of  now  these  prices  are  lower  than  the  international  prices  for 
natural gas.’ and further: ‘OAO Gazprom together with the Russian Federation carry 
out a lot of work to optimize the regulated gas wholesale prices’. Moreover, the price 
of  gas  paid  by  the  two  Russian  producers  was  significantly  lower  than  the  gas  price 
paid by the Romanian and Community producers. 

(96) 

In  view  of  the  above,  it  was  considered  that  the  gas  prices  paid  by  the  two  Russian 
SPT  producers  in  the  investigation  period  could  not  reasonably  reflect  the  costs 
associated with the production and distribution of gas.  

(97)  Therefore, as provided for in Article 2(5) of the basic Regulation, the gas costs of the 
two Russian exporting producers were adjusted to reflect market prices for gas during 
the IP, based on the price of gas for export to Western Europe, net of transport costs 
and excise duty.  

EN 

22 

   EN 

 
(98)  Both producers argued that the costs of gas were properly reflected in their accounting 
records and that an adjustment in accordance with Article 2(5) of the basic Regulation 
was not warranted. In this regard, it is not disputed that the companies had correctly 
accounted  for  the  prices  paid  to  their  gas  provider.  However,  the  adjustment  is 
justified by the fact that the price of the gas purchased does not reasonably reflect the 
cost of production and distribution of gas. 

(99)  The two producers further claimed that it had not been proven that prices charged by 
Gazprom to industrial users are below cost-recovery levels. However, several publicly 
available  sources  confirm  the  approach  of  the  Commission,  among  them  the  policy 
brief ‘The Economic Survey of the Russian Federation, 2004’, published by OECD in 
July 2004.  

3.4.2.2 Export price 

(100)  All export sales to the Community were made directly to independent customers and 

therefore the export price was established as set out in recital (46).  

3.4.2.3 Comparison 

(101)  Adjustments were made, in accordance with Article 2(10) of the basic Regulation, in 

respect of transport, handling, loading, and ancillary costs, packing and commissions. 

3.4.2.4 Dumping margin 

(102)  The comparison between the normal value and the export price showed the existence 
of dumping. The dumping margin expressed as a percentage of the CIF import price at 
the Community border, duty unpaid, is the following: 

Company 

Joint Stock Company Chelyabinsk Tube Rolling Plant 
and 
Joint Stock Company Pervouralsky Novotrubny Works 

Dumping margin 

24,1 % 

3.4.3  Conclusion on dumping regarding Russia 

(103)  Since the companies mentioned in recital (79) represent all export sales from Russia to 
the  Community,  the  residual  dumping  margin  was  set  at  the  same  level  as  the  one 
established for the non-cooperating group of exporting producers, namely 35,8 %. 

3.5 

Ukraine 

3.5.1  MET 

(104)  At  the  time  of  initiation  of  this  investigation,  Article  2(7)(b)  of  the  basic  Regulation 
was  applicable  to  Ukraine.  This  Article  stated  that  the  procedure  in  anti-dumping 
investigations, concerning imports originating in Ukraine, was that normal value shall 
be  determined  in  accordance  with  paragraphs  1  to  6  of  the  said  Article  for  those 
producers  which  were  found  to  meet  the  criteria  laid  down  in  Article 2(7)(c)  of  the 
basic Regulation. 

EN 

23 

   EN 

 
(105)  Briefly, and for ease of reference only, these criteria, fulfilment of which the applicant 

companies have to demonstrate, are set out in summarised form below: 

–  Business  decisions  are  made  in  response  to  market  signals,  without  significant 

State interference, and cost reflect market values; 

–  Firms  have  one  clear  set  of  basic  accounting  records  which  are  independently 
audited,  in  line  with  international  accounting  standards  and  are  applied  for  all 
purposes; 

–  There  are  no  significant  distortions  carried  over  from  the  former  non-market 

economy system; 

–  Legal certainty and stability is guaranteed by bankruptcy and property laws; 

–  Exchange rate conversions are carried out at the market rate. 

(106)  Three  groups  of  Ukrainian  exporting  producers  requested  MET  pursuant  to  Article 
2(7)(b)  of  the  basic  Regulation  and  replied  to  the  MET  claim  form  for  exporting 
producers. 

(107)  The Commission sought and verified at the premises of these companies all necessary 

information submitted in their MET applications.  

(108)  The  investigation  showed  that  the  three  groups  of  Ukrainian  exporting  producers 
mentioned  above  fulfilled  all  the  criteria  required  and  they  were  therefore  granted 
MET.  

(109)  The  Community  industry  was  given  the  opportunity  to  comment  and  objected  that 
several of the five criteria set out in Article 2(7)(c) of the basic Regulation were not 
met by all exporting producers. More specifically, the Community industry argued that 
(i) the State might take back control of certain of the privatised exporting producers; 
(ii) the State intervened in their day-to-day decisions; (iii) the regulations and laws in 
force  in  Ukraine  during  the  IP  as  regards  labour,  bankruptcy  and  property  did  not 
guarantee  proper  market  economy  conditions;  and  (iv)  State  intervention  took  place 
with regard to export sales price and costs of inputs. The comments of the Community 
industry were duly taken into account.  

(110)  However,  these  comments  did  not  provide  sufficient  evidence  that  any  of  the  five 
criteria  against  which  the  Ukrainian  exporting  producers’  claims  for  MET  was 
analysed  pursuant  to  Article  2(7)(c)  of  the  basic  Regulation  as  described  above  was 
not  fulfilled.  Indeed,  the  investigation  showed  that  no  significant  interference  of  the 
State was taking place in the companies’ business decisions.  

(111)  In this respect, it can be recalled that partial State ownership is not as such, according 
to  the  Commission’s  practice,  sufficient  grounds  to  consider  that  criterion  1  of 
Article 2(7)(c) of the basic Regulation is not fulfilled.  

(112)  It was also found that the costs of the main inputs reflected market values.  

EN 

24 

   EN 

 
(113)  As regards gas and electricity prices, they were found to be in line with average prices 
in Ukraine, although lower than the prices in Europe and other markets. This was not 
deemed  to  be  sufficient  grounds,  however,  to  consider  that  criterion  1  was  not 
fulfilled, since gas and electricity only represent a relatively minor part of the cost of 
production of SPT and since these prices, in so far as they were found to be distorted, 
have  been  adjusted  to  market  prices  for  the  purpose  of  the  dumping  calculation  (see 
recitals (119) to (127)).  

(114)  Furthermore, the investigation showed that the laws in force in Ukraine with regard to 
employment  and  labour  conditions  were  in  line  with  market  economy  principles.  In 
particular, it was found that the three groups of exporting producers were free to hire 
or dismiss their staff.  

(115)  Similarly, no argument brought forward by the Community industry was able to rebut 
the  conclusion  of  the  Commission  that  bankruptcy  and  property  laws  guaranteed 
proper market economy conditions for the three groups of exporters. 

(116)  There  was  therefore  no  reason  not  to  grant  MET  to  the  three  groups  of  Ukrainian 
exporting producers. The Advisory Committee was consulted and did not object to the 
conclusions of the Commission. 

3.5.2  Dumping calculation 

(117)  Questionnaire  replies  were  received  from  three  groups  of  exporting  producers.  One 
group  consists  of  two  producers  and  two  related  traders,  whereas  another  group 
consists of one producer and two related traders, whilst the latter exporting producer 
has no related company involved in the production or sale of the product concerned.  

3.5.3  Normal value 

(118)  For all three groups of exporting producers, the total volume of domestic sales of the 
like product was representative as defined in recital (41). For part of the product types 
normal value was based on prices paid or payable, in the ordinary course of trade, by 
independent  customers in Ukraine, and for the product types for which the domestic 
sales  were  insufficient  to  be  considered  representative  or  they  were  not  made  in  the 
ordinary course of trade, normal value was constructed as described in recital (45).  

(119)  With  regard  to  the  manufacturing  costs,  and  in  particular  energy  costs,  it  was  found 
during the investigation that energy prices paid by the three groups of companies were 
regulated by the State and significantly lower than international prices.  

(120)  The prices charged by the Ukrainian State-owned and/or State-regulated suppliers of 
electricity  to  the  three  groups  of  exporting  producers  were  compared  to  prices  in 
Romania  as  well  as  to  prices  in  the  Community  for  the  same  general  category  of 
electricity users. In all cases, these prices were found to be considerably lower than the 
prices  in  Romania  and  in  the  Community,  and  it  was  concluded  that  the  electricity 
prices paid by the Ukrainian exporters did not reasonably reflect the actual production 
and sale costs of the electricity purchased.  

EN 

25 

   EN 

 
(121)  The three cooperating Ukrainian exporters opposed to these conclusions and submitted 
that the costs reported in their accounting records reflected the price actually paid to 
their  suppliers  of  electricity.  However,  none  of  the  arguments  put  forward  could 
explain  the  differences  found  with  prices  in  Romania  and  average  prices  in  the 
Community, and the conclusions above were confirmed. 

(122)  The same approach was followed as regards gas prices. A comparison showed that gas 
prices  charged  to  Ukrainian  exporters  by  their  State-owned  and/or  State-regulated 
suppliers  were  around  half  the  prices  in  Romania  and  also  considerably  lower  than 
average  prices  charged  in  the  Community  for  gas  to  the  same  general  category  of 
customers.  

(123)  During  the  IP,  Ukraine  got  a  major  part  of  its  supplies  of  gas  from  Russia.  OAO 
Gazprom’s  stated  in  its  annual  report  2004  that:  ‘As  it  supplie[d]  gas  to  CIS  states, 
OAO «Gazprom» pursue[d] its main strategic objective of providing environment for 
unimpeded  transit  of  Russian  gas  to  Europe  through  and  their  territory’  and  further 
that: ‘In the reporting year 84,9 % of the total amount of gas supplied to Ukraine […] 
was  treated  as  payment  for  transit  services’.  The  export  price  of  gas  from  Russia  to 
Ukraine  could  therefore  not  serve  as  a  proper  basis  for  comparison  to  determine 
whether  the  gas  prices  paid  by  the  Ukrainian  exporters  reflected  the  cost  associated 
with  the  production  and  sale  of  the  gas  purchased,  since  this  export  price  may  well 
have been influenced by the barter trade agreement. 

(124)  Moreover,  the  prices  paid  by  Ukrainian  exporting  producers  were  compared  to  the 
average  export  price  from  Russia  to  Western  and  Eastern  Europe,  as  determined 
above,  as  well  as  to  average  gas  prices  in  North  America,  which  were  determined 
using  Nymex  Henry  Hub  index  for  gas.  In  both  cases  they  were  found  considerably 
lower. 

(125)  Given the above, it was concluded that the gas prices paid by the Ukrainian exporting 
producers,  which  were  in  direct  relation  with  the  export  price  declared  by  OAO 
Gazprom for exports to Ukraine and which was found to be very likely influenced by 
an existing barter trade agreement, did not reasonably reflect the costs associated with 
production and sale of the gas purchased.  

(126)  Again  the  three  cooperating  Ukrainian  exporters  opposed  to  these  conclusions  and 
submitted that the costs reported in their accounting records reflected the price actually 
paid  to  their  suppliers  of  gas.  However,  the  arguments  put  forward  were  not  able  to 
rebut  the  conclusions  above,  insofar  as  the  price  of  the  gas  supplied  by  Russia  to 
Ukraine was significantly affected by an agreement in place during the IP concerning 
the  transit  of  gas  through  Ukraine,  as  confirmed  by  the  annual  report  for  2004  of 
“OAO Gazprom”.  

EN 

26 

   EN 

 
(127)  Therefore, as provided for in Article 2(5) of the basic Regulation, the electricity and 
gas costs of the Ukrainian exporting producers were adjusted to reasonably reflect the 
costs associated with the production and sale of electricity and gas during the IP. The 
adjustment was based on an average of the prices observed during the IP in Romania, 
a  market-economy  country  which  also  imports  gas  from  Russia,  and  is  roughly  the 
same distance from the Russian gas fields. The average price for Romania was based 
on  the  verified  data  collected  at  Romanian  exporting  producers  of  the  product 
concerned. It has to be noted that this average price is not significantly different from 
the average gas export price determined above for Russia. 

(128)  One  exporter  claimed  that  the  profit  margin  used  for  the  construction  of  the  normal 
value  was  different  from  the  average  profit  made  by  this  exporter  on  sales  on  the 
domestic  market,  and  too  high.  This  claim  had  to  be  rejected  as  the  profit  used  in 
constructing  normal  value  was  the  one  calculated  in  accordance  with  the  applicable 
provision, i.e. the first sentence of Article 2(6) of the basic Regulation. In other words, 
the profit margin used equalled the profit margin pertaining to production and sales, in 
the ordinary course of trade, of the like product on the Ukrainian domestic market. It 
was calculated based on the information which was submitted by the company in its 
questionnaire response and could be verified. 

3.5.4  Export price 

(129)  Two groups of exporting producers made the vast majority of their export sales via a 
related  trading  company  located  in  a  third  country.  The  export  price  for  those  two 
groups  of  exporting  producers  was  established  on  the  basis  of  the  related  trading 
companies’ resale prices to the first independent customers in the Community, except 
for  the  few  transactions  which  corresponded  to  direct  sales  of  those  exporting 
producers  to  independent  customers  in  the  Community.  In  the  latter  case,  the  export 
price was determined as the price actually paid or payable for the product when sold 
for export from Ukraine to the Community. 

(130)  Another  exporting  producer  made  all  its  sales  to  independent  customers  in  the 
Community,  and  the  export  price  was  therefore  established,  as  described  in  recital 
(46), on the price actually paid or payable for the product when sold for export from 
Ukraine to the Community. 

3.5.5  Comparison 

(131)  Adjustments  were  made,  where  appropriate,  in  accordance  with  Article  2(10)  of  the 
basic  Regulation,  in  respect  of  discounts  for  transport,  insurance,  handling,  loading, 
and ancillary costs, credit, and commissions.  

EN 

27 

   EN 

 
(132)  For  the  two  groups  of  exporting  producers  which  channelled  most  of  their  sales 
through related traders, an adjustment to the export price for a commission was made 
in  accordance  with  Article  2(10)(i)  of  the  basic  Regulation,  in  the  cases  where  sales 
were made through these related traders, as these related traders had functions similar 
to those of an agent working on a commission basis. The level of the commission was 
calculated based on direct evidence pointing to the existence of such functions. In this 
context,  in  the  calculation  of  the  commission,  the  SGA  expenses  incurred  by  the 
related  traders  to  sell  the  product  concerned  produced  by  Ukrainian  producers  were 
taken into account, as well as a reasonable profit margin. This latter was based on a 
weighted  average  of  the  profit  margins  for  sales  of  like  products  to  unrelated 
customers found for the three unrelated importers in the Community which cooperated 
with the investigation and submitted information which was verified. 

(133)  The  two  groups  of  exporters  contested  the  calculation  made  by  the  Commission  and 
argued  that  the  profit  margin  used  in  this  adjustment  was  excessive.  One  group  of 
exporters  alleged  that  one  of  the  unrelated  importers  imported  and  resold  only  one 
type of tubes, which was not sold in the EC by the Ukrainian exporter. Moreover, both 
groups  of  exporters  stated  that  the  average  profit  margin  calculated  based  on  the 
figures provided by the three cooperating unrelated importers in the Community was 
not  reasonable,  since  the  weighted  average  profit  margin  found  was  higher  than  the 
target profit of the Community industry.  

(134)  In this respect, it should be noted that the assertion that the profit margin used to base 
this  adjustment  was  higher  than  the  target  profit  of  the  Community  industry  is  not 
relevant. Both profit margins are established in a different context and serve different 
purposes. In addition, it does not prove that the profit margin used is not reasonable. In 
the  present  case,  it  should  be  reminded  that  the  profit  margin  used  was  based  on 
verified  information  submitted  by  cooperating  companies  and  pertaining  to  the  IP. 
Furthermore,  no  evidence  as  to  how  the  types  of  the  like  products  sold  by  these 
cooperating  companies  would  have  biased  the  calculation  of  the  profit  margin  was 
provided. Under these circumstances, the adjustment, pursuant to Article 2(10)(i), for 
sales made via the related trading companies, is maintained.  

(135)  Furthermore, following the comments received from exporters, some clerical mistakes 

were corrected, and dumping margins were recalculated accordingly. 

3.5.6  Dumping margin 

(136)  The comparison between the normal value and the export price showed the existence 
of dumping. The dumping margins expressed as a percentage of the CIF import price 
at the Community border, duty unpaid, are the following: 

Company 

Dumping margin 

OJSC Dnepropetrovsk Tube Works 

CJSC Nikopolsky Seamless Tubes Plant Niko Tube and 
OJSC Nizhnedneprovsky Tube Rolling Plant 

CJSC Nikopol Steel Pipe Plant Yutist 

12,3 % 

25,1 % 

25,7 % 

EN 

28 

   EN 

 
(137)  Since the level of cooperation was high (more than 80 % of the exports of the product 
concerned from Ukraine to the Community), and there was no reason to believe that 
any  exporting  producer  deliberately  abstained  from  cooperation,  the  residual  margin 
applicable  to  all  other  exporters  in  Ukraine  was  set  at  the  same  level  as  the  one 
established  for  the  cooperating  exporting  producer  CJSC  Nikopol  Steel  Pipe  Plant 
Yutist, namely 25,7 %. 

4. 

Injury 

4.1 

Community production 

(138)  Within the Community the product concerned is known to be manufactured by eight 
producers on behalf of which the complaint was lodged. They are located in Germany, 
Italy,  Spain,  France  and  Austria  and  represent  62 %  of  the  Community  production 
which amounted to 2 618 771 tonnes during the IP.  

(139)  Furthermore, there were at initiation stage twelve known Community producers which 
were  not  complainants  located  in  UK,  Poland,  Czech  Republic,  Sweden,  Italy  and 
Slovakia.  Other  Community  producers  which  had  not  been  known  at  initiation  stage 
mainly  located  in  the  new  Member  States  were  also  contacted.  Only  two  of  these 
producers submitted basic information concerning the production and sales of the like 
product for the period under consideration. On this basis, the Community production 
of the like product amounted to 2 618 771 tonnes in the IP. 

4.2 

Community industry 

(140)  The following Community producers supported the complaint: 

-Benteler Stahl/Rohr, Paderborn, Germany  

-Dalmine S.p.A., Bergamo, Italy 

-Rohrwerk Maxhütte GmbH, Sulzbach-Rosenberg, Germany 

-Tubos Reunidos S.A., Amurrio, Spain 

-Vallourec & Mannesmann France S.A, Boulogne Billancourt, France 

-V&M Deutschland GmbH, Düsseldorf, Germany 

-Voest Alpine Tubulars GmbH, Kinderberg-Aumuehl, Austria 

(141)  As these eight complainant cooperating  Community  producers represent 61 % of the 
Community  production  of  the  product  concerned,  they  constitute  the  Community 
industry within the meaning of Articles 4(1) and 5(4) of the basic Regulation.  

(142)  It  is  noted  that  one  of  the  complaining  producers  (Dalmine)  is  related  to  one  of  the 
cooperating  Romanian  exporting  producers  (Silcotub)  and  imported  the  product 
concerned  from  the  latter.  It  has  been  verified  that  these  imports  were,  however, 
limited in comparison to the production volume of Dalmine and mainly to complement 
its product range. It was therefore concluded that this relationship was not such as to 
exclude this Community producer from the definition of the Community industry. 

EN 

29 

   EN 

 
4.3 

Community consumption 

(143)  The Community consumption was established on the basis of the sales volumes on the 
Community  market  of  the  five  sampled  Community  producers  and  by  all  other 
producers in the Community which submitted such information plus imports from all 
third countries under the relevant CN codes according to Eurostat.  

(144)  On the basis of these data, it was found that over the period considered, consumption 
decreased  by  8 %  from  2 149 024  tonnes  2001  to  1 985 361  tonnes  in  2004.  First, 
consumption decreased considerably by 14 % in 2002 compared to 2001 and remained 
stable  in  2003  after  which  it  picked  up  again  in  2004,  when  it  amounted  to 
1 985 361 tonnes. Consumption of SPT is related to the overall economic cycle and in 
particular  to  developments  in  the  oil  and  gas  sector.  The  increase  of  consumption  in 
the IP could be explained by the fact that high oil and gas prices in 2004 encouraged 
investments in these sectors and therefore increased the demand for certain STP.  

Table 1 

Community 
consumption 
(tonnes) 

2001 

2002 

2003 

2004 (IP) 

2 149 024 

1 855 723 

1 851 502 

1 985 361 

Index 

100 

86 

86 

92 

4.4 

Imports of SPT from the countries concerned 

Cumulation  

(145)  The  Commission  considered  whether  the  effects  of  imports  of  SPT  originating  in 
Croatia, Ukraine, Romania and Russia should be assessed cumulatively in accordance 
with Article 3(4) of the basic Regulation.  

Margin of dumping and volume of imports 

(146)  As indicated above, the present investigation has shown that average dumping margins 
established  for  each  of  the  four  countries  concerned  are  above  the  de  minimis 
threshold  as  defined  in  Article  9(3)  of  the  basic  Regulation,  and  that  the  volume  of 
imports from each of these countries is not negligible in the sense of Article 5(7) of the 
basic Regulation (their respective market shares attaining 1,3 % for Croatia, 4,3 % for 
Romania, 4,6 % for Ukraine and 11,3 % for Russia in the IP).  

EN 

30 

   EN 

 
 
Conditions of competition  

(147)  Import  volumes  increased  from  all  countries  concerned,  except  from  Ukraine  which 
maintained  its  imports  on  a  high  level  over  the  period  considered.  Price  trends  of 
imports are similar for all countries concerned, undercutting significantly the prices of 
the  Community  industry.  The  average  price  levels  of  the  imports  of  the  countries 
concerned  were  all  significantly  below  the  Community  industry  price  level.  Import 
prices from Croatia, Ukraine and Romania were broadly at the same level. Russia had 
significantly  lower  price  levels  which  may,  however,  be  the  result  of  a  different 
product mix exported to the Community. As mentioned above, it has been established 
that  the  product  concerned  imported  from  the  four  countries  and  the  like  product 
produced and sold by the Community industry share the same basic technical, physical 
and  chemical  characteristics  and  end-uses.  In  addition,  all  products  were  sold  via 
similar  sales  channels  to  the  same  customers  and  were  found  to  be  competing  with 
each other.  

(148)  On  the  basis  of  the  above,  it  was  concluded  that  all  conditions  justifying  the 
cumulation  of  imports  of  SPT  originating  in  the  four  countries  concerned  by  the 
investigation were met.  

(149)  Some  exporting  producers  in  Ukraine  and  Romania  argued  that  imports  from  their 
countries should not be cumulated to those of the other countries under investigation 
for the injury and causation analysis since trends in import volumes were different. In 
this  respect,  it  is  noted  that  the  import  trends  are  only  one  of  the  many  parameters 
which  are  examined  in  this  context.  The  fact  that  the  import  levels  from  the  various 
countries  are  not  identical,  is  not  as  such  a  reason  to  de-cumulate.  Indeed,  in  recital 
(147),  the  similarities  between  the  imports  from  the  four  countries  subject  to 
investigation  have  been  described.  On  this  basis,  and  in  the  absence  of  any  further 
indications concerning a lack of competition, it is not possible to distinguish the effect 
of the imports from these four countries simply on the basis of the respective volume 
trends.  On  the  contrary,  the  similarities  described  above  warrant  a  cumulative 
assessment.  

(150)  In  the  present  case,  it  was  found  for  all  four  countries,  including  Ukraine  and 
Romania,  that  the  imported  products  on  the  one  hand  and  the  Community  produced 
products  on  the  other  hand  shared  the  same  basic  physical  and/or  chemical 
characteristics (see recital (39) concerning the like product). Moreover, imports from 
each  of  the  four  countries  were  significant,  i.e.  above  the  negligibility  threshold 
defined in Article 5(7) of the basic Regulation. In this respect, it is noted that imports 
from Ukraine and Romania represented a market share of more than 4,5 % and 4,3 % 
respectively. Finally, and in addition to the arguments stated above, imports from all 
four countries were significantly undercutting the prices from the Community industry 
(from 22 to 43 %), Ukrainian and Romanian imports undercutting by 36 % and 22 % 
the Community industry prices (see below). On the basis of the above, it is concluded 
that all conditions are met for the cumulation of imports from the four countries under 
investigation  for  the  purpose  of  injury  and  causation  analysis.  The  claim  for  de-
cumulation had therefore to be rejected. 

EN 

31 

   EN 

 
Cumulated volume and market share 

(151)  Imports from the four countries concerned increased from 304 268 tonnes in 2001 to 
426 186 tonnes in the IP. The combined market share increased from 14,2 % in 2001 
to  21,5 %  during  the  IP.  This  has  to  be  seen  against  the  background  of  a  declining 
consumption. 

Table 2 

2001 

2001 

2002 

2004 (IP) 

Imports (tonnes) 

304 268 

307 441 

342 626 

426 186 

Index 

100 

101 

113 

140 

Market share 

14,2 % 

16,6 % 

18,5 % 

21,5 % 

Prices 

(152)  The  weighted  average  price  of  imports  of  SPT  originating  in  the  four  countries 
increased by 16 %, i.e. from EUR 433 per tonne to EUR 501 per tonne between 2001 
and  the  IP.  Between  2001  and  2002  prices  initially  slightly  decreased  by  3 %  from 
EUR  433  to  EUR  418  and  dropped  further  in  2003  to  EUR  397,  after  which  they 
sharply increased to EUR 501, i.e. a significantly higher level than in 2001. The price 
increase in the IP can mainly be linked to the increase in the cost of raw materials in 
the IP.  

Table 3 

Weighted 
average  CIF 
Community  frontier  price 
(€/tonne)  

Index 

Undercutting 

2001 

2002 

2003 

2004 (IP) 

433 

100 

418 

97 

397 

92 

501 

116 

(153)  For the determination of price undercutting, the Commission analysed data referring to 
the IP. The relevant sales prices of the Community industry were those to independent 
customers, adjusted where necessary to an ex-works level, i.e. excluding freight costs 
in the Community and after deduction of discounts and rebates. Prices for the different 
types  of  SPT  defined  in  the  questionnaires  were  compared  with  the  sales  prices 
charged  by  the  exporters,  net  of  discounts,  and  adjusted,  where  necessary,  to  CIF 
Community  frontier  with  an  appropriate  adjustment  for  the  anti-dumping  duties  and 
post-importation costs.  

(154)  For  the  calculation  of  weighted  average  undercutting  margins,  export  prices  of 
cooperating producers and Eurostat data were taken into consideration. During the IP, 
the  weighted  average  undercutting  margin  was  43 %  for  Russia,  36 %  for  Ukraine, 
22 % for Romania and 26 % for Croatia. 

EN 

32 

   EN 

 
 
 
4.5 

Situation of the Community industry 

(155)  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 factors having a bearing on the state of the Community industry during the 
period considered. 

Production  

(156)  The  production  volume  showed  a  similar  trend  to  that  of  consumption,  although  the 
decline  during  2002  and  2003  and  recovery  during  the  IP  was  more  pronounced  in 
relative terms than the decline and recovery of consumption during the same periods. 
It  sharply  declined  by  21 %,  from  1 495 278  tonnes  in  2001  to  1 174 414  tonnes  in 
2002.  In  2003,  the  production  volume  reached  only  three  quarters  of  the  volume 
produced in 2001. However, in line with the improved demand situation resulting from 
the investment activity in the oil and gas industry during the IP, the production volume 
increased again and reached 1 290 258 tonnes in the IP.  

Table 4 

Production 
(tonnes) 

Index 

2001 

2002 

2003 

2004 (IP) 

1 495 278 

1 174 414 

1 126 188 

1 290 258 

100 

79 

75 

86 

Capacity of production and capacity utilisation rates 

(157)  The  production  capacity  was  established  on  the  basis  of  the  nominal  capacity  of  the 
production units owned by the Community industry, taking into account interruptions 
in production as well as the fact that in certain cases part of the capacity had been used 
for other products manufactured with the same production lines. 

(158)  SPT production capacity has remained stable during the period considered. However, 
capacity utilisation rates diminished by 12 percentage points from 87 % to 75 %, as a 
result  of  the  decrease  in  the  production  volume.  The  increase  of  capacity  utilisation 
during  the  IP  is  a  result  of  the  increased  production  volume  in  the  IP  against  the 
background of a stable production capacity. 

Table 5 

Capacity 
production 
(tonnes) 

Index 

Capacity 
utilisation 

2001 

2002 

2003 

2004 (IP) 

of 

1 722 350 

1 717 919 

1 709 605 

1 709 078 

100 

87 % 

100 

68 % 

99 

66 % 

99 

75 % 

EN 

33 

   EN 

 
 
 
Stocks 

(159)  As far as stocks are concerned, the vast majority of production is made in response to 
orders. Therefore, whilst an increase in stocks of 13 % was observed over the period 
considered,  it  is  considered  that  in  this  case  stocks  were  not  a  relevant  indicator  of 
injury.  

Table 6 

Stocks (tonnes) 

Index 

Investments 

2001 

95 032 

100 

2002 

100 471 

106 

2003 

90 979 

96 

2004 (IP) 

107 521 

113 

(160)  Between  2001  and  the  IP,  investments  for  the  production  of  the  like  product 
diminished from EUR 66 852 644 to EUR 26 101 700 and were only made to maintain 
production  capacity  at  its  current  level  and  not  with  the  purpose  to  increase  the 
production volume.  

Table 7 

2001 

2002 

2003 

IP 

Investments (EUR) 

66 852 644 

56 581 829 

45 518 515 

26 101 700 

Index 

100 

85 

68 

39 

Sales and market share 

(161)  It was found that sales of the Community industry to related customers were made at 
market  prices  and  therefore  those  sales  were  also  taken  into  consideration  for  the 
analysis of sales and market share of the Community industry. 

(162)  SPT  sales  in  volume  on  the  Community  market  decreased  from  862 054  tonnes  in 
2001 to 725 145 tonnes in 2002, i.e. by 16 %, and further to 683 985 tonnes in 2003, 
where  demand  was  exceptionally  low  according  to  the  Community  industry.  During 
the IP, sales picked up again and reached 729 555 tonnes, which is still considerably 
lower than the level of 2001.  

(163)  Whereas overall SPT sales in volume on the Community market decreased from 2001 
to the IP by 15 %, at the same time, Community consumption decreased by only 8 % 
and hence the Community industry experienced a loss of market share amounting to 
3 percentage points. The market share dropped from 40,1 % in 2001 to 36,7 % in the 
IP.  

Table 8 

Sales  in  the 
EC (tonnes) 

Index 

Market 
share 

2001 

2002 

2003 

IP 

862 054 

725 145 

683 985 

729 555 

100 

84 

79 

85 

40,1 % 

39,1 % 

36,9 % 

36,7 % 

EN 

34 

   EN 

 
 
 
 
Prices 

(164)  The  Community  industry’s  average  unit  selling  price  increased  by  10 %  over  the 
period considered as a result of the increased cost of raw material, which impacted the 
whole industry.  

(165)  After  a 4 %  increase in  average prices  from  EUR  672  in  2001  to  EUR  701  in  2002, 
prices  hit  rock  bottom  at  EUR  651  in  2003,  after  which  they  considerably  increased 
again in the IP when they reached EUR 736. 

(166)  Depending  on  the  production  process,  the  Community  industry  either  used  scrap  or 
billets and ingots as raw material for the production of SPT. The raw material is the 
major cost driving component in the production cost of SPT and has a direct impact on 
the sales price evolution. Whereas in 2001 and 2002 raw material accounted for 35 % 
of the full production cost of SPT of the Community industry and for 38 % in 2003, 
during the IP the cost for raw material represented already 47 % of full cost.  

(167)  Indeed, it was found that average prices of raw materials went up sharply during 2004, 
which was reflected in the higher sales prices of the Community industry and higher 
import prices alike. 

Table 9 

2001 

2002 

2003 

Weighted  average 
price (€/tonne) 

Index 

672 

100 

701 

104 

651 

97 

IP 

736 

110 

Profitability and cash flow 

(168)  During the period considered the weighted average profitability on net turnover of the 
Community industry decreased sharply from 3 % in 2001 to -10 % in the IP. The trend 
in profitability does not develop in line with the trend in sales value. Profitability of 
the product concerned was indeed more negative during the IP than in any of the three 
preceding years, whereas sales actually increased in the IP compared to the levels in 
2002  and  2003.  The  reason  for  this  development  is  that  the  increase  in  raw  material 
prices could not be completely reflected in sales prices. Indeed, the increased costs of 
raw materials could not be passed on to the end customers due to the low price level of 
imports from the countries concerned.  

Table 10 

Pre-tax 
margin  

profit 

2001 

3 % 

2002 

-9 % 

2003 

IP 

-5 % 

-10 % 

EN 

35 

   EN 

 
 
 
(169)  The Community industry generated a negative cash flow of EUR -16 735 140 during 
the  IP.  The  liquidity  of  the  Community  industry  turned  very  negative  in  2003,  after 
which  the  cash  flow  situation  somewhat  improved,  but  still  remained  far  from  re-
gaining a positive level. Cash flow had to be calculated on the basis of the net profit 
before tax for the product sold in and outside the Community which was positive in 
2002  (EUR  26  million)  but  turned  into  a  major  net  loss  in  2003  (minus  86  million) 
which  explains  the  massive  drop  in  cash  flow  between  2002  and  2003.  The  trend  in 
cash flow did not evolve in line with the trend in profitability as depreciation, which is 
typically high for this capital intensive industry, declined between 2002 and 2003 from 
EUR  51 795 853 
to 
EUR 58 820 712. However, the cash flow situation remained negative during the IP. 

to  EUR  48 276 850,  but 

increased  again 

the  IP 

in 

Table 11 

2001 

2002 

2003 

IP 

Cash flow (EUR)  

68 221 405 

83 464 355 

-35 612 924 

-16 735 140 

Index 

100 

122 

-52 

-25 

Return on net assets  

(170)  The return on net assets was calculated by expressing the pre-tax net profit of the like 
product sold in and outside the Community as a percentage of the net book value of 
fixed  assets  allocated  to  the  like  product  sold  in  and  outside  the  EC.  The  negative 
evolution  of  this  indicator  after  2001  is  caused,  on  the  one  hand,  by  the  declining 
investments in the like product from 2001 to the IP, and, on the other hand, by the pre-
tax  profit  of  the  like  product  sold  in  and  outside  the  Community,  which  was  still 
positive  in  2001  and  2002,  but  turned  negative  in  2003.  Return  on  assets  albeit 
improving in the IP compared to 2003, it still only reached -11 % during the IP. The 
profit  figure  used  for  determining  this  factor  was  the  profit  obtained  both  of  the 
Community  industry’s  domestic  sales  and  export  sales.  This  was  necessary  because 
the  assets  were  used  for  both  sales  channels  and  an  allocation  to  the  assets  was 
impossible.  

Table 12 

Return 
assets 

on 

net 

Ability to raise capital 

2001 

10 % 

2002 

2003 

IP 

6 % 

-18 % 

-11 % 

(171)  With the exception of one company, there was no claim from the Community industry 
nor indication that the Community industry encountered problems to raise capital for 
its activities and it was therefore concluded that the Community industry, as a whole, 
was in a position to raise capital for its activities throughout the period considered  

EN 

36 

   EN 

 
 
 
Employment and wages 

(172)  Employment in the Community industry decreased by 13 % and labour cost declined 

by 9 % during the period considered. 

Table 13 

Employees 

Index 

2001 

6 058 

100 

2002 

5 424 

90 

2003 

5 276 

87 

IP 

5 245 

87 

Labour cost (EUR/year) 

275 296 896 

251 059 144 

244 153 692 

249 190 971 

Index 

100 

91 

89 

91 

Productivity 

(173)  Productivity measured in output (production) per employee per year amounted to the 

same level in the IP as in 2001, after a decrease in 2002 and 2003.  

Table 14 

2001 

2002 

2003 

Productivity 
(tonnes/employee) 

Index 

247 

100 

217 

88 

213 

86 

IP 

246 

100 

Growth 

(174)  While Community consumption decreased by 8 % between 2001 and the IP, the sales 
volume  of  the  Community  industry  to  unrelated  and  related  customers  decreased  by 
15 %.  On  the  other  hand,  the  market  share  of  imports  from  the  four  countries 
concerned went up by 7,3 percentage points. Thus, sales by the Community industry 
declined much more sharply than the demand during the period considered. 

Magnitude of the dumping margin and recovery from past dumping 

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

(176)  As  demonstrated  in  the  analysis  of  the  injury  indicators  above,  the  economic  and 
financial  situation  of  the  Community  industry  did  not  improve  further  to  the 
imposition  of  anti-dumping  measures  on  imports  of  parts  of  the  product  concerned 
from  Russia  and  Romania  in  1997  and  from  Croatia  and  Ukraine  in  February  2000. 
They also evidence that the Community is still in a fragile and vulnerable situation. 

EN 

37 

   EN 

 
 
 
4.6 

Conclusion on injury 

(177)  The  analysis  of  the  injury  indicators  revealed  that  the  situation  of  the  Community 
industry deteriorated significantly after 2001 and reached rock bottom in 2003. During 
the IP, the injury indicators showed an improvement compared to the extremely bad 
situation in 2003. The improved situation in the IP can be linked to a generally better 
market situation in the IP and in particular to the higher demand for SPT products by 
the oil and gas industries. However, the Community industry was by far not able to get 
back to the level of 2001, i.e. prior to the increase of dumped imports. In this respect, 
it is noted that the increase of sales prices observed in the IP was not even sufficient to 
fully reflect the increased costs of raw materials, let alone to improve the situation of 
the Community industry. 

(178)  It  is  true  that  at  first  sight  some  injury  indicators  showed  a  stable  (ability  to  raise 
capital,  employment)  or  even  positive  (average  sales  prices)  development.  However, 
most  other  injury  indicators  (e.g.  profitability,  investments,  production  and  sales 
volumes) showed a clear negative evolution over the period considered, albeit slightly 
improving  during  the  IP  as  compared  to  the  preceding  year.  However,  this 
improvement does not change the picture as the most relevant injury indicators remain 
negative.  

(179)  As far as the positive development in prices is concerned, the price increase during the 
IP cannot be attributed to an improvement of the situation of the Community industry, 
but  was  a  mere  consequence  of  the  increased prices of raw materials. Moreover, the 
above factors showing a stable development do not determine the overall state of the 
Community  industry.  Indeed,  given  the  vastly  negative  development  of  the  profit-
related indicators, the viability of the industry is even at stake if - in the medium term 
if not before - this situation is not remedied.  

(180)  Following the disclosure of definitive findings, some exporting producers argued that 
the Community industry was not suffering from material injury during the IP. It was 
claimed that publicly available data suggested that the Community industry was in a 
sound  financial  situation  and  that  sales  and  profitability  of  the  Community  industry 
showed a positive trend during the IP. 

(181)  It  is  noted  that  annual  financial  results  of  some  Community  producers  were  indeed 
positive  during  the  IP,  sales  volumes  increased  and  profitable  results  were  achieved. 
However, whereas the overall financial situation of some Community producers in the 
IP  has  in  fact  been  favourable,  the  relevant  analysis  must  be  based  on  the  financial 
performance of the Community industry with regard to the production and sales in the 
Community  market  of  the  like  product. As the  like  product does not account for the 
entire production volume of the Community industry neither of their entire sales in the 
Community,  it  was  found  that  despite  the  overall  good  performance  of  some 
Community producers of SPT, material injury existed as far as the like product sold in 
the Community was concerned.  

(182)  In the light of the foregoing, it is concluded that the Community industry has suffered 

material injury within the meaning of Article 3(6) of the basic Regulation. 

EN 

38 

   EN 

 
5. 

CAUSATION 

5.1 

Introduction 

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

5.2 

Effect of the dumped imports 

(184)  Imports  from  the  four  countries  concerned  increased  considerably  during  the  period 
considered, i.e. by 40 % in terms of volume, and by 7,3 percentage points in terms of 
market  share.  At  the  same  time,  average  prices  of  imports  originating  in  the  four 
countries concerned undercut the average Community industry prices by 32 % in the 
IP.  The  price  increase  of  the  dumped  imports  noticed  during  the  IP  merely  reflected 
the  increase  of  costs  of  raw  materials.  The  substantial  increase  in  the  volume  of 
imports  of  the  four  countries  concerned  and  their  gain  in  market  share  during  the 
period  under  consideration,  at  prices  which  remained  well  below  those  of  the 
Community industry, coincided with the evident deterioration of the overall financial 
situation of the Community industry during the same period.  

(185)  Unit  prices  of  the  Community  industry  also  increased  over  the  period  under 
consideration  by  10 %.  However,  these  prices  were  depressed  and  could  not  even 
cover  the  massive  increase  of  cost  of  raw  materials  as  evidenced  by  the  significant 
level of losses incurred by the Community industry.  

(186)  Based on the above considerations, it would appear that the low-priced imports from 
the  four  countries  concerned  have  had  a  determining  role  in  the  deterioration  of  the 
situation of the Community industry, which is reflected in particular in the insufficient 
development  of  sales  prices  as  well  as  in  the  decrease  of  production,  sales  volumes, 
market share, and in the sharp decrease of profitability and diminishing investments. 

5.3 

Effect of other factors 

Decrease in the EC consumption 

(187)  Community  consumption  decreased  by  8 %  during  the  period  considered.  However, 
the decrease in consumption in itself cannot be considered as the determining cause of 
the injurious situation of the Community industry as sales of the Community industry 
declined  in  relative  terms  more  than  consumption  during  the  period  considered 
(respectively -16 % and -14 % between 2001 and the end of the IP). Moreover, it was 
shown  that  imports  from  the  countries  concerned  increased  in  the  period  considered 
and  were  thus  taking  over  the  Community  industry’s  lost  market  share.  For  these 
reasons,  it  was  found  that  the  decrease  of  consumption  could  not  have  been  a 
substantial cause of the injury suffered by the Community industry. 

EN 

39 

   EN 

 
Imports originating in third countries other than the four countries concerned 

(188)  According  to  Eurostat  and  to  the  information  collected  during  the  investigation,  the 
main third countries from which SPT are imported are Japan, Argentina and the USA. 

(189)  Imports  from  Japan  amounted  to  52 960  tonnes  in  2001  and  decreased  by  34 %  to 
34 857 tonnes over the period considered. The market share of Japanese imports of the 
product  concerned  amounted  to  2,5 %  in  2001,  which  declined  to  1,8 %  in  the  IP. 
Japanese imports were made at prices which at least doubled those of the Community 
industry.  Hence  imports  from  Japan  were  not  considered  as  having  had  a  negative 
effect on the situation of the Community industry.  

(190)  Imports  from  Argentina  increased  by  52 %,  from  30 962  tonnes  in  2001  to 
46 918 tonnes  in  the  IP.  This  corresponds  to  a  market  share  which  increased  by  one 
percentage  point  from  1,4 %  in  2001  to  2,4 %  in  the  IP.  The  price  level  of  imports 
from Argentina remained throughout the period considered well above the one of the 
four  countries  considered,  e.g.  in  the  IP  the  average  CIF  price  per  tonne  of  imports 
from Argentina amounted to EUR 660, whereas the weighted average CIF price of the 
four countries concerned was EUR 501 per tonne. In the course of the analysis the fact 
that one Community producer is related to an exporting producer located in Argentina 
has  been  taken  into  consideration.  It  was,  however,  demonstrated  that  the  SPT 
imported  by  this  Community  producer  from  its  related  company  in  Argentina,  were 
neither in terms of quantities nor prices a determining reason for the injurious situation 
of this particular Community producer and of the Community imports were industry as 
a whole.  

(191)  As to the USA, Eurostat statistics show that the market share of imports of SPT from 
the USA  increased  from  0,6 % in 2001 to 1,8 % in the IP. Average selling prices of 
US  at  the  beginning  of  the  period  under  consideration  at  EUR  2 414  per  tonne,  i.e. 
almost  four  times  higher  than  those  of  the  Community  industry  and  subsequently 
decreased  hugely  by  77 %  to  EUR  797  per  tonne  during  the  IP,  still  exceeding  the 
Community  industry’s  prices  by  8 %.  Therefore,  despite  the  increased  imports  from 
the USA, given their price level, they cannot be considered as a substantial cause of 
the injury suffered by the Community industry. 

(192)  It  was  claimed  that  imports  from  Argentina  and  United  States  have  been  steadily 
increasing  since  2001  and  that  their  combined  market  share  exceeded  4 %  in  the  IP 
and that US prices remained below those charged by exporting producers in three out 
of the four countries concerned. 

(193)  The allegation that US prices were lower than those charged by three out of the four 
countries  concerned  is  not  borne  out  by  the  facts.  More  generally,  it  was  concluded 
that in particular in view of their high price levels, these imports cannot be regarded as 
a determining cause of the injury. 

EN 

40 

   EN 

 
(194)  One exporting producer claimed that the Community industry was primarily active in 
the  production  and  sales  of  high  end  product  categories  (OCTGs)  which  would 
compete with imports from Japan, Argentina and the United States. It was argued that 
imports from these three countries combined represented an increase of market share 
of  1,5  percentage  points  between  2001  and  the  IP  and  that  imports  from  these  three 
countries  were  replacing  SPT  produced  by  the  Community  industry  rather  than  SPT 
imported from Russia and Ukraine.  

(195)  It is pointed out that the Community industry despite more putting more emphasis on 
the  production  of  high  end  added  value  products,  continues  producing  all  different 
types of SPT, including low end products in substantial quantities. As a matter of fact, 
OCTGs  only  represent  a  small  share  of  the  Community  industry’s  activities,  namely 
5 % of the total sales volume and 7 % of the total sales value of the like product sold 
on the Community market during the IP. The increase of the combined market share of 
Japan, Argentina and the United States by 1,5 percentage points from 4,5 % in 2001 to 
6,0 % in the IP can, if at all, only be linked to a minor degree to the more pronounced 
loss  of  market  share  of  the  Community  industry  during  the  same  period,  i.e.  from 
40,1 % to 36,7 %. Consequently, the claim that imports of these three countries caused 
material injury to the Community industry has to be rejected. 

(196)  One  exporting  producer  claimed  that  the  Commission  services  omitted  to  take  into 
account the impact of SPT imports from the new Member States. Mainly for Slovakia, 
it was argued that these imports were previously found to have been made into the EC 
at injurious dumped prices. Such imports were  subject to  anti-dumping duties which 
lapsed as a result of enlargement in the middle of the IP. It was also claimed that such 
imports were the cause of the loss in market share of the Community industry. 

(197)  However, it is noted that sales volume from the Community industry and from other 
European  producers 
respectively  by  around 
133 000 tonnes and by 112 000 tonnes between 2001 and 2004, whereas, at the same 
increased  by  around 
the 
time, 
120 000 tonnes15  

(including  Slovakia)  decreased 

the  four  countries  concerned 

imports  from 

(198)  As  to  the  imports  from  Slovakia  before  enlargement,  it  cannot  be  claimed  that  such 
imports could cause injurious dumping to the Community Industry for the period 2001 
until enlargement (i.e. 1st May 2004) since they were subject to anti-dumping duties 
re-establishing a level playing field with the Community Industry. Any possible effect 
of these sales inside the EU 25 as from 1st of May is not considered such as to reverse 
the injury findings or break the causal link between the dumped imports from the four 
countries  under  investigation  and  the  injury  suffered  by  the  Community  Industry. 
Indeed,  an  analysis  of  imports  of  the  product  concerned  from  Slovakia  into  the 
Community market before and after enlargement based on Eurostat showed that in the 
year of accession, these imports of the product concerned in the rest of the Community 
market  (EU-24)  increased  by  7 %  or  5 911  tonnes  compared  to  the  year  before 
accession. This increase in  volume is  very  small as  compared to  the development of 
imports from the four countries concerned. 

15 

Note that consumption went down by 165 000 tonnes between 2001 and 2004. 

EN 

41 

   EN 

 
                                                 
(199)  Given the above, it is concluded that the market share of the Community industry did 

not diminish as a result of intra-Community competition.  

(200)  Therefore,  the  claim  that  intra-community  competition  could  be  the  cause  of  the 
decrease of loss of market share of the Community industry is hereby rejected.  

Market cyclicality and exchange rates 

(201)  In reaction to the disclosure of definitive findings, one exporting producer stated that 
the factor of cyclicality of the steel market had not be taken into account as required 
by article 3(7) of the basic Regulation.  

(202)  In this respect it is noted that the exporting producer did not submit any evidence to 
substantiate the claim that the cyclicality of the steel market has caused the injurious 
situation of the Community industry. In addition, it is noted that the cyclicality of the 
steel  market  should  have  an  impact  on  the  Community  industry  and  exporting 
producers  alike.  Hence,  a  downward  cycle  in  the  SPT  market  which  allegedly  had  a 
negative  impact  on  the  state  of  the  Community  industry  should  have  also  had  a 
negative  impact  on  the  volume  of  SPT  imports,  i.e.  import  volumes  from  the  four 
countries  concerned  should  have  decreased.  However,  as  described  in  recital  (151), 
cumulated import volumes of the four countries concerned increased every single year 
from 2001 to 2004. Therefore, it is concluded that the cyclicality of the steel market 
cannot be considered as having caused the injury suffered by the Community industry. 

(203)  One company claimed that the fall in the value of the USD versus the EUR from 2001 
to the IP had an impact on the situation of the Community industry without providing 
any evidence that these exchange rate fluctuations actually had a negative impact on 
the  performance  of  the  Community  industry.  In  the  absence  of  any  substantiated 
information  showing  that  the  injury  situation  of  the  Community  industry  has  been 
influenced  by  a  appreciation  of  the  EUR  against  the  USD,  it  is  concluded  that 
exchange rate fluctuation did not break the causal link between dumped imports and 
the  injurious  situation  of  the  Community  industry.  Moreover,  the  analysis  of  the 
Community  industry  was  based  on  the  financial  performance  of  the  like  product 
produced and sold in the Community market. As the vast majority of sales of the like 
product in the Community market was invoiced in EUR and as all major production 
expenses were also primarily made in EUR, exchange rate fluctuations did in any case 
not have a major impact on the injurious situation of the Community industry. 

(204)  In  view  of  the  above  described  evolution  of  volumes,  price  and  market  shares  of 
imports  originating  in  other  third  countries,  it  is  concluded  that  the  material  injury 
suffered by the Community industry cannot be attributed to these imports.  

Increase of raw material prices 

(205)  It has been claimed by two exporting producers that the decrease in profitability was a 
result of the rise in raw material cost and could therefore not be linked with dumped 
imports from the countries  concerned. Indeed, the cost for  scrap or  billets  which  are 
the  main  raw  materials  for  the  production  of  SPT  increased  significantly  over  the 
period  considered.  It  was  evidenced  by  two  Community  producers  that  the  price  of 
scrap increased between the last quarter of 2003 and the last quarter of the IP by 66 % 
and  77 %  respectively.  One  Community  producer  demonstrated  that  over  the  whole 

EN 

42 

   EN 

 
period  considered,  from  2001  until  the  IP,  the  scrap  price  more  than  doubled  from 
EUR 99 per tonne in 2001 to EUR 253 per tonne in the IP. A similar price trend could 
be observed with regard to average prices of billets.  

(206)  However, material injury to the Community industry was not caused by the increased 
raw  material  prices  as  such,  but  as  explained  in  recital  (168).  by  the  fact  that  the 
Community  industry  was  unable  to  pass  on  these  higher  costs  to  the  customers. 
Indeed, due to the dumped imports from the countries concerned which substantially 
undercut the Community industry’s prices, the Community industry could not increase 
its  sales  prices  to  an  amount  which  would  have  duly  reflected  the  increase  of  raw 
material prices. 

(207)  Following the disclosure of definitive findings, one exporting producer claimed that it 
was  incorrect  to  state  that  profitability  decreased  in  the  IP  because  Community 
producers  were  unable,  due  to  the  price  pressure  from  dumped  imports,  to  increase 
prices  at  such  levels  as  to  cover  the  increase  in  raw  materials.  According  to  this 
company,  the  price  of  raw  materials  (scrap)  in  the  IP  increased  by  15,8 %.  It  was 
argued that prices of dumped imports increased in excess of the increase of the costs 
of raw materials.  

(208)  However,  as  mentioned  above,  evidence  obtained  in  the  course  of  the  investigation 
showed  that  the  cost  increase  of  raw  material  of  the  Community  producers  was  far 
higher  than  the  alleged  15,8 %  during  the  IP.  Based  on  the  information  provided  by 
some Community producers, it was also found that the increase in raw material prices 
exceeded  the  increase  of  the  weighted  average  price  of  SPT  from  the  four  countries 
concerned  throughout  the  period  considered.  Therefore,  the  argument  is  maintained 
that due to the price  pressure  from dumped imports,  the Community producers were 
unable to increase prices and render sales profitable. 

Anti-competitive behaviour of certain Community producers 

(209)  Anti-dumping measures in force since 1997 on the original product scope concerning 
Romania and Russia are no longer applied since July 2004 as a matter of prudence in 
connection with an anti-competitive behaviour of certain Community producers in the 
past.  

(210)  Some exporting producers and importers requested that the extent to which the cartel 
formed by certain Community producers could have had an impact on the performance 
of the overall Community industry be investigated.  

(211)  In this regard, it was found that there was no overlap in time between the duration of 
the  infringement  of  some  Community  producers  (1990  until  1995  and,  for  certain 
products, until 1999) and the period considered (2001 until 2004) of the present anti-
dumping  proceeding.  Moreover,  no 
the 
investigation  that  prices  of  the  Community  industry  or  other  injury  indicators  were 
influenced by any anti-competitive behaviour Given the above, and in the absence of 
any  information  or  indication  to  the  contrary,  it  can  be  concluded  that  the  cartel 
formed  by  certain  Community  producers  before  2001  did  not  have  an  effect  on  the 
injurious situation of the Community industry during the period considered.  

information  has  been  found  during 

EN 

43 

   EN 

 
(212)  Following the disclosure of definitive finding, one exporting producer claimed that the 
Commission  services  failed  to  examine  the  likely  effects  of  recovery  to  normal 
competitive  conditions  of  the  Community  industry  following  the  end  of  the  cartel 
behaviour in 1999. It was argued that the overlap in time of the cartel behaviour and 
the  period  under  consideration  of  the  present  proceeding  was  irrelevant  and  that  the 
Commission services had erred in its assessment with respect to the analysis of injury 
and causality and may have violated Article 3(7) of the basic Regulation. 

(213)  Firstly, it is underlined that only a small part of the product concerned, namely OCTGs 
(classified under CN 7304 21 00 20 and , CN 7304 29 11 20) was concerned by the 
cartel proceeding. During the IP, the volume of OCTGs sold in the Community market 
represented only 5 % of the total sales volume of the Community industry. 

(214)  Moreover,  it  is  considered  that  the  two  years  period  between  the  end  of  the  cartel 
behaviour  and  the  beginning  of  the  period  used  for  the  injury  determination  is 
sufficient  as  to  have  allowed  for  a  return  to  normal  competitive  conditions  for  the 
Community industry. However, the situation during the IP was injurious.  

(215)  Given the above, this claim is rejected. 

5.4 

Conclusion on causation  

(216)  The  coincidence  in  time  between,  on  the  one  hand,  the  increase  in  dumped  imports 
from the countries concerned, the increase in market shares and the undercutting found 
and,  on  the  other  hand,  the  evident  deterioration  in  the  situation  of  the  Community 
industry,  leads  to  the  conclusion  that  the  dumped  imports  caused  the  material  injury 
suffered  by  the  Community  industry  within  the  meaning  of  Article  3(6)  of  the  basic 
Regulation.  

6. COMMUNITY INTEREST 

(217)  In accordance with Article 21 of the basic Regulation, it has to be examined whether, 
despite the conclusion on injurious dumping, compelling reasons exist for concluding 
that it is not in the Community interest to adopt measures in this particular case. The 
likely impact of possible measures on all parties involved in the proceeding and also 
the consequences of not taking measures have to be considered in this respect. 

6.1 

Community industry 

(218)  The  injurious  situation  of  the  Community  industry  resulted  from  its  difficulty  to 

compete with the low-priced, dumped imports.  

(219)  It is considered that the imposition of measures will enable the Community industry to 
increase  the  volume  of  its  sales  and  market  share  and  thereby  generating  better 
economies of scale and thus the necessary profit level to justify continued investment 
in its production facilities. 

EN 

44 

   EN 

 
(220)  Should measures not be imposed, the deterioration of the situation of the Community 
industry would continue. It would not be able to invest in new production capacity and 
to compete effectively with imports from third countries. Some companies would have 
to cease the production of the like product and lay off their employees. It is therefore 
concluded  that  the  imposition  of  anti-dumping  measures  is  in  the  interest  of  the 
Community industry. 

(221)  One  non-complainant  producer  in  the  Community  which  is  related  to  an  exporting 
producer in Romania claimed that producers in the Community would already work at 
full production capacity and would not be able to meet the high demand for SPT on 
the Community market and in third countries. The company argued that consequently 
the imposition of duties would lead to a shortage of supply on the Community market. 
However,  as  stated  above,  the  investigation  revealed  that  throughout  the  period 
considered, the Community industry had significant spare production capacity which 
could  be  used  in  the  future  to  produce  the  product  concerned  in  order  to  meet  the 
demand for SPT on the Community market. 

(222)  It  was  also  claimed  that  the  imposition  of  measures  would  result  in  a  limitation  of 
competition  on  the  Community  market.  It  is  noted  that  besides  the  complaining 
producers, there are several significant other producers of the product concerned in the 
new  Member  States  as  mentioned  in  recital  (139).  The  number  of  producers  in  the 
Community is considered such as to ensure competition within this market, even with 
the imposition of antidumping measures. Furthermore, as mentioned in recitals (188) 
to (195), producers in other third countries (e.g. in the USA) are also competing with 
the  Community  industry  with  similar  products  and  prices.  Therefore  it  is  considered 
that the imposition of measures will neither jeopardize the supply of SPT nor restrict 
competition on the Community market.  

6.2 

Interest of unrelated importers 

(223)  As  far  as  importers  are  concerned,  only  three  unrelated  importers  replied  to  the 
questionnaire and a verification visit was subsequently carried out to two of them. A 
fourth unrelated importer accepted a verification visit at a late stage in the proceeding. 
The  volumes  of  the  product  concerned  imported  by  these  four  importers  represented 
8 % of the total imports in the Community and 3 % of the Community consumption.  

(224)  In  view  of  the  fact  that  the  majority  of  all  imports  of  SPT  into  the  Community  is 
channelled  through  importers  which  are  related  to  exporting  producers  and  less  than 
half  of  all  imports  enter  the  Community  market  through  unrelated  importers,  the 
imports  of  the  four  unrelated  importers  can  be  considered  as  representative  for  all 
other unrelated importers.  

(225)  For  one  of  the  importers,  imports  of  the  product  concerned  represented  22 %  of  its 
total  imports  of  SPT  and  the  corresponding  sales  value  represented  3 %  of  its  total 
turnover during the IP. These sales were highly profitable during the IP. Taking into 
account that the majority of suppliers of this company are located in the Community or 
in countries not concerned by the imposition of anti-dumping duties, the impact of the 
imposition of anti-dumping measures cannot be considered as significant. 

EN 

45 

   EN 

 
(226)  A second importer whose main activity consisted in importing and transforming SPT, 
imported all SPT from the countries concerned, in particular from Russia. A small part 
of  these  imports  consisted  of  so-called  “certified  tubes”  It  is  thus  considered  that  an 
imposition of duties on imports from Russia will have a negative impact on the overall 
business activity and particularly on the profitability of this company. However, taking 
into consideration that there is currently besides this importer only one other supplier 
of certified SPT in the Community, it is very likely that any price increase due to the 
anti-dumping  duty  on  this  product  can  be  passed  on  to  the  final  customer. 
Furthermore, the company would also be able to source at least a part of its purchases 
from  a  local  supplier  in  the  Community  or  to  substitute  part  of  their  purchases  with 
other products than the product concerned.  

(227)  The  other  two  cooperating  importers  whose  import  volumes  represented  also  only  a 
minor  share  of  the  total  import  volume  of  the  product  concerned  during  the  IP 
considered themselves as not affected by an imposition of duties. 

(228)  In the light of the above, it is considered that importers would be affected differently 
by the imposition of anti-dumping measures depending on their individual situation. It 
can  thus  be  concluded  that  the  imposition  of  measures  may  indeed  possibly  have  a 
significant  negative  effect  on  the  financial  situation  of  one  importer.  On  average 
however,  it  is  not  expected  that  measures  have  a  significant  financial  impact  on  the 
overall situation of the importers. 

6.3 

Interest of users  

(229)  No user of the product concerned replied to the questionnaire sent by the Commission. 
However, the investigation showed that SPT are used mainly by construction and oil 
companies.  According  to  the  information  available,  SPT  are  part  of  larger  projects 
(boilers, pipelines, construction) of which they form only a limited part. Therefore, it 
was concluded that the impact on costs resulting from the imposition of antidumping 
measures  on  SPT  would  very  likely  not  result  in  a  significant  impact  in  the  costs  of 
such users, and thus giving a possible explanation to the lack of cooperation of users in 
the present proceeding.  

(230)  On the basis of the above findings, and in the absence of any other element or reaction 
from consumer organisations, it is concluded that the impact of the proposed measures 
on the consumers is likely to be marginal. 

(231)  Therefore,  it  is  concluded  that  there  are  no  compelling  reasons  on  the  grounds  of 

Community interest, why anti-dumping duties should not be imposed. 

7. 

DEFINITIVE ANTI-DUMPING MEASURES 

7.1 

Injury elimination level 

(232)  In order to prevent further injury being caused by the dumped imports, it is considered 

appropriate to adopt anti-dumping measures. 

EN 

46 

   EN 

 
(233)  The measures should be imposed at a level sufficient to eliminate the injury caused by 
these  imports  without  exceeding  the  dumping  margin  found.  When  calculating  the 
amount  of  duty  necessary  to  remove  the  effects  of  the  injurious  dumping,  it  was 
considered that any measures should allow the Community industry to cover its costs 
of  production  and  to  obtain  overall  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 the sales of the like product in 
the Community. Taking into account the average level of profitability obtained by the 
Community  industry  in  2001,  it  was  found  that  a  profit  margin  of  3 %  of  turnover 
could  be  regarded  as  an  appropriate  minimum  which  the  Community  industry  could 
have  expected  to  obtain  in  the  absence  of  injurious  dumping.  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  calculations,  with  the  non-
injurious price of products sold by the Community industry on the Community market. 
The  non-injurious  price  has  been  obtained  by  adjusting  the  sales  price  of  the 
Community  industry  by  the  actual  loss/profit  made  during  the  IP  and  by  adding  the 
above  mentioned  profit  margin.  Any  difference  resulting  from  this  comparison  was 
then expressed as a percentage of the total CIF import value. 

7.2 

Definitive measures 

(234)  In the light of the foregoing, it is considered that in accordance with the Article 9 of 
the  basic  Regulation,  definitive  anti-dumping  measures  on  imports  of  the  product 
concerned should be imposed at the level of the lowest of the dumping and the injury 
margins found, in accordance with the lesser duty rule.  

(235)  As the injury elimination levels are higher than the dumping margins established, the 
definitive measures should be based on the latter. The residual dumping margins were 
set at the level for the company with the highest individual margin in each country. 

(236)  The  following  duty  rates,  expressed  as  a  percentage  of  the  CIF  Community  border 

price, customs duty unpaid, are as follows:  

Country 

Croatia 
Romania 

Russia 

Ukraine 

Company 

Rate of duty (%)  

All companies 
S.C. Artrom S.A. 
S.C. Mittal Steel Roman S.A 
S.C. Silcotub S.A. 
All other companies 
Joint Stock Company Chelyabinsk Tube 
Rolling Plant and Joint Stock Company 
Pervouralsky Novotrubny Works 
All other companies 
OJSC Dnepropetrovsk Tube Works 
CJSC Nikopolsky Seamless Tubes Plant 
Niko Tube and OJSC Nizhnedneprovsky 
Tube Rolling Plant  
CJSC Nikopol Steel Pipe Plant Yutist 
All other companies 

29,8 % 
17,8 % 
17,7 % 
11,7 % 
17,8 % 
24,1 % 

35,8 % 
12,3 % 
25,1 % 

25,7 % 
25,7 % 

EN 

47 

   EN 

 
 
 
 
 
 
 
 
(237)  The individual company specific anti-dumping duties specified in this Regulation were 
established  on  the  basis  of  the  findings  of  the  present  investigation.  Therefore,  they 
reflect  the  situation  found  during  the  investigation  with  respect  to  these  companies. 
These duties (as opposed to the country-wide duty applicable to “all other companies”) 
are  thus  exclusively  applicable  to  imports  of  products  originating  in  the  country 
concerned  and  produced  by  the  companies  and  thus  by  the  specific  legal  entities 
mentioned.  Imported  products  produced  by  any  other  company  not  specifically 
mentioned  in  the  operative  part  of  this  Regulation  with  its  name,  included  entities 
related to those specifically mentioned, cannot benefit from these duties and shall be 
subject to the duties applicable to “all other companies”.  

(238)  Any claim requesting the application of these individual company anti-dumping duty 
rates (e.g. following a change in the name of the entity or following the setting up of 
new production or sales entities) should be addressed to the Commission16 forthwith 
with all relevant information, in particular any modification in the company's activities 
linked to production, domestic and export sales associated with e.g. that name change 
or  that  change  in  the  production  and  sales  entities.  If  warranted,  the  appropriate 
arrangements  will  be  made,  including  by  updating  the  list  of  companies  benefiting 
from  individual  duty  rates.  In  order  to  ensure  a  proper  enforcement  of  the  anti-
dumping  duty,  the  country-wide  duty  level  should  not  only  apply  to  the  non-
cooperating  exporter,  but  also  to  those  companies  which  did  not  have  any  exports 
during  the  IP.  However,  the  latter  companies  are  invited,  when  they  fulfil  the 
requirements of Article 11(4) of the basic Regulation, second paragraph, to present a 
request for a review pursuant to that Article in order to have their situation examined 
individually. 

(239)  As  far  as  the  identification  of  the  CEV  threshold  by  Custom  authorities  at  the 
Community border is concerned, the identification of the CEV can be done indirectly 
through  the  verification  of  the  11  CN  codes  under  which  the  product  concerned  is 
classified.  Throughout  the  period  considered,  99,9 %  of  all  imports  of  the  product 
concerned  were  SPT  with  a  CEV  below  the  0,86  threshold.  Therefore,  it  was 
concluded that all SPT imports from the countries concerned under the 11 CN codes 
should be considered as the product concerned, except in those very rare cases when 
the  importer  is  able  to  demonstrate  that  the  CEV  of  the  goods  imported  exceeds  the 
0,86 threshold. 

7.3 

Exemption request 

(240)  One importer who imported so-called ‘certified SPT’ in the Community suggested that 
his  company  should  be  excluded  from  the  application  of  the  anti-dumping  duty. 
However,  the  company  has  not  invoked  any  reasons  on  the  basis  of  which  such  an 
individual  exemption  would  be  justified.  It  should  be  noted  that  this  importer  was 
importing dumped SPT which caused injury to the Community industry and that there 
was  therefore  no  reason  to  grant  any  individual  exemption  to  this  company. 
Furthermore,  it  was  considered  that  exempting  this  importer  from  the  anti-dumping 
duties would constitute an inappropriate high risk  of  circumvention  of  the  measures. 

16 

European Commission 
Directorate-General Trade  
B-1049 Brussels / Belgium 

EN 

48 

   EN 

 
                                                 
 
Indeed, since also certified tubes can be used in a variety of applications, it could not 
be sufficiently ensured that these imports would only be used in construction works in 
Italy. 

7.4 

Partial suspension request 

(241)  Following  the disclosure of definitive findings, one importer  requested  a nine-month 
(extendable  for  a  further  period  of  12  months)  partial  suspension  of  the  duties  on 
certain imports of the product concerned, produced by the Russian exporting producer 
TMK,  classified  under  CN  code  7304  39  92  and  certified  by  the  Italian  Ministry  of 
Labour for utilisation in public construction works in Italy.  

(242)  The  importer  argued  that  a  partial  suspension  would  be  justified  on  grounds  of 
Community interest according to article 14(4) of the basic Regulation. It was claimed 
that  without  the  partial  suspension  of  measures  the  importer  would  stop  importing 
certified  tubes  and  consequently  only  one  single  company  producing  certified  SPT 
would be left in Italy which would hence constitute a monopoly.  

(243)  The  importer  claimed  that  the  partial  suspension  of  measures  would  not  cause  any 
injury to the alleged single Community producer whose production volume of certified 
SPT allegedly only covers approximately two thirds of the annual demand of certified 
SPT  in  Italy.  The  importer  argued  further  that  a  partial  suspension  of  the  measures 
could  be  easily  monitored  by  Italian  customs  through  a  simple  verification  of  the 
certification  documents  which  have  to  be  presented  to  customs  at  each  import 
transaction .  

(244)  As far as the argument is concerned that the non-partial suspension of measures would 
create  a  monopoly  in  the  Community  market,  it  is  noted  that  whereas  during  the  IP 
two  producer  existed  in  Italy  producing  certified  SPT  since  the  end  of  2005  there  is 
indeed only one company left. However, it could be shown that during the IP dumped 
imports of certified tubes from Russia undercut prices of certified tubes produced by 
the Community industry to such extent that the Community producers were not able to 
compete with these dumped imports and consequently had to cease or sharply reduce 
the  production  of  certified  SPT.  As  the  fact  that  only  one  Community  producer  of 
certified  SPT  remained  in  the  Community  market  was  actually  a  consequence  of 
dumped imports of certified SPT from Russia, the argument that partially suspending 
the duties  would  not cause any injury to the Community industry has to be rejected. 
On the contrary, it is expected that the imposition of duties will lead to an increase of 
competition  and  the  re-entry  of  other  Community  producers  of  certified  tubes  in  the 
Community market. 

(245)  Whereas  it  is  acknowledged  that  the  monitoring  of  the  partial  suspension  could  in 
principle  be feasible  by customs authorities in Italy, the requested partial suspension 
has also to be rejected on the same grounds as the exemption request mentioned before 
in recital (240). Granting a partial suspension of measures for one individual importer 
would  constitute  an  inappropriate  high  risk  of  circumvention,  as  certified  SPT 
imported by this company could also be used for other purposes than in construction 
works in Italy.  

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7.5 

Undertakings 

(246)  The  same  importer  suggested  that  an  undertaking  should  be  accepted  from  its 
supplying Russian exporting producer. The undertaking should set a duty free import 
volume  with  a  quantitative  ceiling.  The  importer  argued  that  imports  up  to  such 
quantity would be used solely in public construction projects in Italy. Therefore, these 
imports would not cause any injury to Community industry. Furthermore, there would 
be insufficient supply of certified SPT in the Community. However, it should be noted 
that in accordance with Article 8(1) of the basic Regulation only exporting producers 
can offer undertakings, but not importers. Therefore, this request was rejected. 

(247)  Following the disclosure of essential facts and considerations on the basis of which it 
was  intended  to  recommend  the  imposition  of  definitive  anti-dumping  duties,  the 
majority of exporting producers in the countries concerned offered price undertakings 
in accordance with Article 8(1) of the basic Regulation.  

(248)  However, the product concerned is characterised by a considerable number of product 
types with some characteristics not easily discernible upon importation. This makes it 
virtually impossible to establish minimum  prices for each product type which would 
be  meaningful  and  could  be  properly  monitored  by  the  Commission  and  by  the 
customs  authorities  of  the  Member  States  upon  importation.  Moreover,  the  product 
concerned has shown in the last years a considerable volatility in prices and therefore 
it  is  not  suitable  for  a  fixed  price  undertaking  for  an  extended  period  of  time.  The 
volatility in prices is due to the volatility of raw material prices, namely metal billets, 
ingots  or  steel  scrap,  which  constitute  major  but  variant  components  of  the  cost  of 
production. If the minimum import prices were indexed to the price of one of the raw 
materials,  different  indexing  formulae  would  have  to  be  established  by  sub-product 
group  making  the  determination  of  the  parameters  of  indexation  formulae  and  the 
monitoring of the undertakings extremely complex. 

(249)  In  addition,  it  is  recalled  that  undertakings  were  accepted  in  the  past  for  certain 
products  falling  within  the  product  scope  of  the  current  investigation.  Those 
undertakings that were based on the principle that prices per product group would fall 
in line with the price structure in use in the Community proved to be very difficult to 
monitor  by  the  Commission  or  were  found  to  have  failed  to  raise  prices  to  non-
injurious levels that would restore fair trade on the Community market17.  

(250)  Moreover,  in  a  number  of  cases  the  product  classification  proposed  was  not 
sufficiently detailed to allow a proper monitoring, or the price level proposed did not 
allow for the removal of injurious dumping. 

17 

See recital (137) of Regulation (EC) No 258/2005 

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(251)  In view of the above, in particular the difficulties in monitoring the different minimum 
import  prices,  it  is  considered  that  undertakings  are  not  workable  in  principle. 
However, given the upcoming accession of Romania to the Community, the duration 
of  the  measures  against  Romania  will  be  limited  in  time.  Therefore,  the  risk  of 
circumvention of the minimum import prices by the Romanian exporters is limited and 
so is the potential for significant changes of the prices. Accordingly the Commission 
by Regulation [INSERT], accepted the undertaking offers of the Romanian exporting 
producers. The reasons for accepting this undertaking are set out in more detail in this 
Regulation.  The  Commission  recognises  that  the  undertaking  offers  eliminate  the 
injurious effect of dumping and limit to a significant degree the risk of circumvention.  

(252)  To further enable the Commission and the customs authorities to effectively monitor 
the compliance of the companies with the undertakings, when the request for release 
for free circulation is presented to the relevant customs authority, exemption from the 
anti-dumping  duty  is  to  be  conditional  on  (i)  the  presentation  of  an  undertaking 
invoice, which is a commercial invoice containing at least the elements listed and the 
declaration stipulated in the Annex; (ii) the fact that imported goods are manufactured, 
shipped and invoiced directly by the said companies to the first independent customer 
in the Community; and (iii) the fact that the goods declared and presented to customs 
correspond precisely to the description on the undertaking invoice. Where the above 
conditions are not met the appropriate anti-dumping duty shall be incurred at the time 
of acceptance of the declaration for release into free circulation. 

(253)  Whenever  the  Commission  withdraws,  pursuant  to  Article  8(9)  of  the  basic 
Regulation,  its  acceptance  of  an  undertaking  following  a  breach  by  referring  to 
particular  transactions  and  declares  the  relevant  undertaking  invoices  as  invalid,  a 
customs debt shall be incurred at the time of acceptance of the declaration for release 
into free circulation of these transactions. 

(254)  Importers should be aware that a customs debt may be incurred, as a normal trade risk, 
at  the  time  of  acceptance  of  the  declaration  for  release  into  free  circulation  as 
described  in  recitals  (252)  and  (253)  even  if  an  undertaking  offered  by  the 
manufacturer from whom they were buying, directly or indirectly, had been accepted 
by the Commission. 

(255)  Pursuant  to  Article  14(7)  of  the  basic  Regulation,  customs  authorities  should  inform 
the  Commission  immediately  whenever  indications  of  a  violation  of  the  undertaking 
are found. 

(256)  For  the  reasons  stated  above  the  undertakings  offered  by  the  Romanian  exporting 
producers are therefore considered acceptable by the Commission and the companies 
concerned  have  been  informed  of  the  essential  facts,  considerations  and  obligations 
upon  which  acceptance  is  based.  However,  for  the  reasons  stated  above  the 
undertakings  offered  by  the  Russian  and  Ukrainian  exporting  producers  are  not 
acceptable.  

(257)  It should be noted that in the event of a breach or withdrawal of the undertaking or a 
suspected breach, an anti-dumping duty may be imposed, pursuant to Articles 8(9) and 
(10) of the basic Regulation.  

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7.6 

Conclusion regarding the two interim reviews and existing measures 

(258)  It is recalled that, as mentioned in recital (3), two interim reviews were initiated on the 
Commission’s  own  initiative,  to  allow  for  any  amendment  or  repeal  of  the  existing 
definitive  anti-dumping  measures  in  force  on  imports  of  the  original  product  scope 
from Croatia, Romania, Russia and Ukraine. 

(259)  On the basis of the findings of the present investigation, measures should be imposed 
on  imports  of  SPT  as  defined  in  recital  (17) originating in Croatia, Romania, Russia 
and  Ukraine.  As  the  product  concerned  as  defined  in  section  2.1  covers  also  the 
product scope of the already existing measures, the continued imposition of measures 
imposed on the original product scope by Council Regulations (EC) No 2320/97 and 
348/2000,  is  no  longer  appropriate  and  therefore  those  Regulations,  as  amended, 
should be repealed.  

(260)  In parallel, the two interim reviews aforementioned, as well as the interim and expiry 
reviews  initiated  in  November  2002  and  referred  to  in  section  1.2  should  be 
terminated. 

(261)  Furthermore,  the  Regulation  (EC)  No  1866/2005  extending  the  partial  suspension  of 
measures  on  the  original  product  scope  from  Croatia  and  Ukraine  becomes  obsolete 
following the repeal of Regulation (EC) No 348/2000.  

HAS ADOPTED THIS REGULATION: 

Article 1 

A definitive anti-dumping duty is hereby imposed on imports of certain seamless pipes and 
tubes  of  iron  or  steel,  of  circular  cross-section,  of  an  external  diameter  not  exceeding 
406,4 mm  with  a  Carbon  Equivalent  Value  (CEV)  not  exceeding  0,86  according  to  the 
International  Institute  of  Welding  (IIW)  formula  and  chemical  analysis18  falling  within 
CN codes  ex  7304  10  10,  ex  7304  10  30,  ex  7304  21  00,  ex  7304  29  11,  ex  7304  31  80, 
ex 7304  39  58,  ex  7304  39  92,  ex  7304  39  93,  ex  7304  51  89,  ex  7304  59  92  and 
ex 7304 59 9319 (TARIC codes 7304 10 10 20, 7304 10 30 20, 7304 21 00 20, 7304 29 11 20, 
7304 31 80 30, 7304 39 58 30, 7304 39 92 30, 7304 39 93 20, 7304 51 89 30, 7304 59 92 30 
and 7304 59 93 20) and originating in Croatia, Romania, Russia and Ukraine. 

The rate of the definitive anti-dumping duty applicable to the net, free-at-Community-frontier 
price, before duty, of the products described above and manufactured by the companies below 
shall be as follows: 

18 

19 

The  CEV  shall  be  determined  in  accordance  with  Technical  Report,  1967,  IIW  doc.  IX-535-67, 
published by the International Institute of Welding (IIW). 
As defined in Commission Regulation (EC) No 1719/2005 of 27 October 2005 amending Annex I to 
Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common 
Customs  Tariff  (OJ  L  286,  28.10.2005,  p.1).  The  product  coverage  is  determined  in  combining  the 
product  description  in  Article  1(1)  and  the  product  description  of  the  corresponding  CN  codes  taken 
together. 

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Country 

Company 

Croatia 

All companies 

Romania 

S.C. Artrom S.A. 

Russia 

S.C. Mittal Steel Roman S.A. 

S.C. Silcotub S.A. 

All other companies 

Joint Stock Company Chelyabinsk 
Tube Rolling Plant and Joint Stock 
Company Pervouralsky Novotrubny 
Works 

All other companies 

Ukraine 

OJSC Dnepropetrovsk Tube Works 

CJSC Nikopolsky Seamless Tubes 
Plant Niko Tube and OJSC 
Nizhnedneprovsky Tube Rolling 
Plant  

CJSC Nikopol Steel Pipe Plant 
Yutist 

All other companies 

Anti-dumping 
duty 

TARIC 
Additional code

29,8 % 

17,8 % 

17,7 % 

11,7 % 

17,8 % 

24,1 % 

35,8 % 

12,3 % 

25,1 % 

25,7 % 

25,7 % 

A738 

A739 

A740 

A999 

A741 

A999 

A742 

A743 

A744 

A999 

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

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

Article 2 

1. 

Imports  declared  for  release  into  free  circulation  which  are  invoiced  by  companies 
from  which  undertakings  are  accepted  by  the  Commission  and  whose  names  are 
listed  in  Commission  Regulation  [INSERT  NUMBER],  as  from  time  to  time 
amended,  shall  be  exempt  from  the  anti-dumping  duty  imposed  by  Article  1,  on 
condition that: 

–  they are manufactured, shipped and invoiced directly by the said companies to the 

first independent customer in the Community; and 

–  such imports are accompanied by an undertaking invoice which is a commercial 
invoice  containing  at  least  the  elements  and  the  declaration  stipulated  in  the 
Annex of this Regulation; and 

–  the  goods  declared  and  presented  to  customs  correspond  precisely  to  the 

description on the undertaking invoice. 

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2. 

A  customs  debt  shall  be  incurred  at  the  time  of  acceptance  of  the  declaration  for 
release into free circulation: 

–  whenever  it  is  established,  in  respect  of  imports  described  in  paragraph  (1),  that 

one or more of the conditions listed in that paragraph are not fulfilled; or 

–  when  the  Commission  withdraws  its  acceptance  of  the  undertaking  pursuant  to 
Article  8(9)  of  the  basic  Regulation  in  a  Regulation  or  Decision  which  refers  to 
particular transactions and declares the relevant undertaking invoices as invalid. 

Article 3 

Council  Regulation  (EC)  No  2320/97,  as  last  amended  by  Council  Regulation  (EC) 
No 1322/2004  and  Council  Regulation  (EC)  No  348/2000,  as  last  amended  by  Council 
Regulation (EC) No 258/2005 are hereby repealed. 

Article 4 

The interim reviews of the anti-dumping duties on imports of SPT of iron or non-alloy steel 
originating, inter alia, in Russia and Romania and in Croatia and Ukraine, initiated in March 
2005 are hereby terminated. 

The interim and expiry reviews, initiated in November 2002 and confirmed by recital 20 of 
Regulation (EC) No 1322/2004 to be ongoing, are hereby terminated. 

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

Article 5 

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

Done at Brussels,  

For the Council 
The President 

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ANNEX 

The  following  elements  shall  be  indicated  in  the  commercial  invoice  accompanying  the 
company’s sales of certain seamless pipes and tubes, of iron or steel, to the Community which 
are subject to an Undertaking: 

The  heading  ‘COMMERCIAL  INVOICE  ACCOMPANYING  GOODS  SUBJECT 

1. 
TO AN UNDERTAKING’. 

The  name  of  the  company  mentioned  in  Article  1  of  the  Commission  Regulation 

2. 
accepting the undertaking [INSERT NUMBER] issuing the commercial invoice. 

3. 

4. 

The commercial invoice number. 

The date of issue of the commercial invoice. 

The TARIC additional code under which the goods on the invoice are to be customs 

5. 
cleared at the Community frontier. 

6. 

The exact description of the goods, including: 

–  Product  code  number  (PCN)  used  for  the  purposes  of  the  investigation  and  the 

undertaking (e.g. PCN 1, PCN 2, etc), 

–  plain language description of the goods corresponding to the PCN concerned, 

–  company product code (CPC) (if applicable), 

–  CN code, 

–  quantity (to be given in metric tonnes)  

7. 

The description of the terms of the sale, including: 

–  price per metric tonne,  

–  the applicable payment terms, 

–  the applicable delivery terms, 

–  total discounts and rebates. 

Name  of  the  company  acting  as  an  importer  in  the  Community  to  which  the 
8. 
commercial invoice accompanying goods subject to an undertaking is issued directly by the 
company. 

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The name of the official of the company that has issued the invoice and the following 

9. 
signed declaration: 

‘I, the undersigned, certify that the sale for direct export 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], and accepted by the Commission through Regulation 
[INSERT NUMBER], I declare that the information provided in this invoice is complete and 
correct.’ 

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