Proposal for a Council regulation imposing a definitive anti-dumping duty on imports of certain tube and pipe fittings, of iron or steel, originating in the Republic of Korea and Malaysia following an expiry review pursuant to Article 11(2) of Regulation (EC) No 384/96
Date: 2008-09-12
Institutions: European Commission
Subjects: Malaysia, South Korea, anti-dumping duty, anti-dumping legislation, import, originating product, piping

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 12.9.2008 
COM(2008) 546 final 

Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty on imports of certain tube and pipe fittings, of 
iron or steel, originating in the Republic of Korea and Malaysia following an expiry 
review pursuant to Article 11(2) of Regulation (EC) No 384/96 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

Context of the proposal 

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  tube  and  pipe  fittings  (other  than  cast  fittings,  flanges  and 
threaded fittings), of iron or steel (not including stainless steel), with a greatest external 
diameter not exceeding 609.6 mm, of a kind used for butt-welding or other purposes, 
originating in the Republic of Korea and Malaysia. 

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. 

Existing provisions in the area of the proposal 

Council Regulation (EC) No 1514/2002 imposing definitive anti-dumping measures on 
imports  of  certain  tube  and  pipe  fittings  of  iron  or  steel,  originating  in  the  Czech 
Republic, Malaysia, Russia, the Republic of Korea and Slovakia 

Consistency with the other policies and objectives of the Union 

Not applicable. 

Consultation of interested parties and impact assessment 

Consultation of interested parties 

Interested  parties  concerned  by  the  proceeding  were  given  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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Legal elements of the proposal 

Summary of the proposed action 

The current expiry review was initiated on 18 August 2007 further to a request lodged 
by the Defence Committee of the Steel Butt-Welding Fittings Industry of the European 
Union.  Definitive  measures  were  originally  imposed  in  August  2002.  The  anti-
dumping duties in force for Malaysia are: 59.2% for Anggerik Laksana Sdn Bhd and 
75%  for  all  other  companies;  for  the  Republic  of  Korea  the  duty  is  44%  for  all 
companies. 

The  attached  proposal  for  a  Council  Regulation  maintaining  the  above-mentioned 
measures  is  based  on  the  definitive  findings  on  dumping,  injury,  causation  and 
Community interest. 

It is therefore proposed that the Council adopt the attached proposal for a Regulation 
which  should  be  published  in  the  Official  Journal  of  the  European  Union  as  soon  as 
possible. 

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.  

Subsidiarity principle 

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

Proportionality principle 

The proposal complies with the proportionality principle for the following reasons: 

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: 

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

Budgetary implication 

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The proposal has no implication for the Community budget. 

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Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty on imports of certain tube and pipe fittings, of 
iron or steel, originating in the Republic of Korea and Malaysia following an expiry 
review pursuant to Article 11(2) of Regulation (EC) No 384/96 

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 Articles 9 and 11(2) thereof, 

After consulting the Advisory Committee, 

Whereas: 

1. 

(1) 

(2) 

A. PROCEDURE 

Measures in force 

In August 2002, definitive anti-dumping measures on imports of certain tube and pipe 
fittings ("TPFs" or "the product concerned") originating, inter alia, in the Republic of 
Korea  and  Malaysia  ("countries  concerned")  were  imposed  by  Council  Regulation 
(EC)  No  1514/20022  ("original  investigation").  The  anti-dumping  duties  in  force  for 
Malaysia are: 59.2% for Anggerik Laksana Sdn Bhd and 75% for all other companies; 
for the Republic of Korea the duty is 44% for all companies. 

Outside  the  scope  of  this  proceeding,  anti-dumping  measures  are  currently  in  force 
imposed  by  Council  Regulation  (EC)  Nº  964/20033  on  exports  from  the  People's 
Republic  of  China  (58.6%)  and  Thailand  (58.9%),  with  the  exception  of  two 
companies  in  Thailand,  and  those  consigned  from  Taiwan,  whether  declared  as 
originating  in  Taiwan  or  not.  The  measures  for  the  product  concerned  originating  in 
China  were  extended  to  imports  of  the  same  product  consigned  from  Indonesia  by 
Council  Regulation  (EC)  No  2052/20044,  Sri  Lanka  by  Council  Regulation  (EC)  No 

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OJ  L  56,  6.3.1996,  p.  1,as  last  amended  by  Council  Regulation  (EC)  No  2117/2005  (OJ  L  340, 
23.12.2005, p. 17.) 
OJ L 228, 24.08.2002, p. 1. 
OJ  L  139,  6.6.2003,  p.  1,  as  last  amended  by  Council  Regulation  (EC)  No  1496/2004  (OJ  L  275, 
25.08.2004, p. 1.). 
OJ L 355, 01.12.2004, p. 4. 

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2. 

(3) 

(4) 

(5) 

(6) 

3. 

(7) 

(8) 

(9) 

(10) 

2053/20045  and  the  Philippines  by  Council  Regulation  (EC)  No  655/20066,  whether 
declared as originating in the Philippines, Indonesia, Sri Lanka or not.  

Request for a review 

Following  the  publication  of  a  notice  of  impending  expiry7  of  the  anti-dumping 
measures  in  force  on  imports  of  TPFs  originating  in  the  Republic  of  Korea  and 
Malaysia,  the  Commission  received  a  request  to  review  these  measures  pursuant  to 
Article 11(2) of the basic Regulation. 

The request was lodged on 23 May 2007 by the Defence Committee of the Steel Butt-
Welding  Fittings  Industry  of  the  European  Union  ("the  applicant")  on  behalf  of 
producers  representing  a  major  proportion,  in  this  case  more  than  50%,  of  the  total 
Community production of certain tube and pipe fittings. 

The request was based on the grounds that the expiry of the measures would be likely 
to  result  in  a  continuation  or  recurrence  of  dumping  and  injury  to  the  Community 
industry. 

Having  determined,  after  consultation  of  the  Advisory  Committee,  that  sufficient 
evidence  existed  for  the  initiation  of  a  review,  the  Commission  initiated  an 
investigation8 pursuant to Article 11(2) of the basic Regulation. 

Investigation 

The  Commission  officially  advised  the  applicant  Community  producers,  the  other 
Community  producers,  the  exporting  producers  in  the  countries  concerned,  the 
importers/traders, users and their associations known to  be concerned, as well as the 
representatives of the governments of both exporting countries, of the initiation of the 
review.  

The  Commission  sent  questionnaires  to  all  these  parties  and  to  those  who  made 
themselves known within the time limit set out in the notice of initiation.  

The  Commission  also  gave  interested  parties  the  opportunity  to  make  their  views 
known in writing and to request a hearing within the time limit set out in the notice of 
initiation. 

In view of the apparent high number of exporting producers in the Republic of Korea, 
importers/traders of the product concerned and Community producers, sampling was 
envisaged  in  the  notice  of  initiation,  in  accordance  with  Article  17  of  the  basic 
Regulation. In order to be able to decide whether sampling would be necessary and, if 
so,  to  select  a  sample,  the  Commission  sent  out  sampling  forms  requesting  specific 
information  on  the  average  sales  volume  and  prices  of  each  Community  producer, 
exporting producer and importer concerned. No reply was received from any Korean 
exporting  producer  and  eleven  replies  were  received  from  importers.  Only  four 

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OJ L 355, 01.12.2004, p. 9. 
OJ L 116, 29.04.2006, p. 1. 
OJ C 286, 23.11.2006, p. 8. 
OJ C 192, 18.08.2007, p. 15. 

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Community  producers  replied  to  the  sampling  form.  It  was  therefore  decided  that 
sampling was not necessary. 

(11)  Four Community producers replied to the questionnaire, but one sent a partial answer 
and  failed  to  reply  after  a  deficiency  letter  had  been  sent.  Regarding  Malaysia,  two 
replies  to  the  questionnaire  were  received,  one  from  a  newcomer  company  and  the 
other from a company that later on refused the verification visit. No Korean exporting 
producers  replied  to  the  questionnaire.  Two  importers  submitted  a  reply  to  the 
questionnaire.  

(12)  The  Commission  sought  and  verified  all  information  deemed  necessary  for  the 
purposes of  determining  the likely continuation or recurrence of dumping and  injury 
and the Community interest. Verification visits were carried out at the premises of the 
following companies:  

a) Applicant Community producers 

–  Erne Fittings GmbH, Schlins, Austria 

–  Interfit S.A., Maubeuge, France 

–  Virgilio Cena & Figli S.p.A, Brescia, Italy 

b) Newcomer producer in Malaysia 

Pantech Steel Industries SDN. BHD., Selangor, Malaysia 

4. 

Investigation period 

(13)  The investigation of continuation or recurrence of dumping covered the period from 1 
July 2006 to 30 June 2007 (hereinafter referred to as the "IP"). The examination of the 
trends  relevant  for  the  assessment  of  a  likelihood  of  a  continuation  or  recurrence  of 
injury  covered  the  period  from  1  January  2002  up  to  the  end  of  the  IP  (the  ‘period 
considered’).  

B. PRODUCT CONCERNED AND LIKE PRODUCT 

1. 

Product concerned 

(14)  The product under review is tube and pipe fittings (other than cast fittings, flanges and 
threaded  fittings),  of  iron  or  steel  (not  including  stainless  steel),  with  a  greatest 
external  diameter  not  exceeding  609.6  mm,  of  a  kind  used  for  butt-welding  or  other 
purposes,  originating  in  the  Republic  of  Korea  and  Malaysia  (‘the  product 
concerned’), currently classifiable within CN codes ex 7307 93 11, ex 7307 93 19, ex 
7307 99 30 and ex 7307 99 90.  

(15)  TPFs are manufactured essentially by cutting and forming tubes and pipes. They are 
used to join tubes and pipes and come in different shapes: elbows, reducers, tees and 
caps,  as  well  as  different  sizes  and  material  grades.  They  are  used  mainly  in  the 
petrochemical  industry,  construction,  energy  generation,  shipbuilding  and  industrial 
installations. When sold for use in the petrochemical industry, the global standard used 

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is  the  ANSI  standard.  For  other  purposes,  the  most  common  standard  used  in  the 
Community is the DIN standard.  

2. 

Like product  

(16)  As in the original proceeding, the investigation has shown that the TPFs produced in 
the  countries  concerned,  sold  domestically  and/or  exported  to  the  Community,  have 
the  same  basic  physical,  technical  and  chemical  characteristics  and  end  uses  as  the 
products  sold  in  the  Community  by  the  applicant  Community  producers  and  are 
therefore considered to be like products within the meaning of Article 1(4) of the basic 
Regulation. 

C. LIKELIHOOD OF A CONTINUATION OF DUMPING 

(17) 

In accordance with Article 11(2) of the basic Regulation, it was examined whether the 
expiry of the measures would be likely to lead to a continuation of dumping.  

3. 

Preliminary remarks 

(18)  As mentioned above, in the absence of co-operation from any exporting producers in 
Korea and Malaysia, except for one newcomer company, this examination had to be 
based on information available to the Commission from other sources. In this respect, 
and in accordance with the provisions of Article 18 of the basic Regulation, Eurostat 
data  referring  to  the  8-digit  CN  code,  checked  against  other  sources,  were  used  to 
establish  import  quantities  and  prices.  Facts  available  were  used  to  calculate  the 
dumping  margin,  i.e.  in  this  case  the  information  contained  in  the  request  and  US 
statistics. 

(19)  Due to the current small volume of imports of TPFs from Korea and Malaysia in the 
EU, the Commission had to use data from another country. The USA was considered 
appropriate,  since  the  market  is  of  a  similar  size,  with  many  domestic  producers  but 
also with a large proportion of imports, making this market a very competitive one. In 
addition, the USA is the major destination for exports from Korea and Malaysia.  

4. 

Dumping of imports during the investigation period 

a) Normal value 

(20) 

In accordance with Article 18 of the basic Regulation, and in the absence of any co-
operation from Korean or Malaysian exporting producers, except from one newcomer 
company,  the  normal  value  was  based  on  the  data  provided  in  the  request,  i.e. 
estimated cost of manufacturing to which was added 12.3% and 15.1% for SGA and 
5.6%  and  6%  for  profit  for  Korea  and  Malaysia  respectively,  both  expressed  as  a 
percentage  of  turnover.  It  is  considered  that  the  above  percentages  are  rather 
conservative.  

b) Export price 

(21) 

In  accordance  with  Article  18  of  the  basic  Regulation,  and  in  the  absence  of  co-
operation  from  both  Korean  and  Malaysian  exporting  producers,  except  from  one 
newcomer  company,  the  export  price  was  calculated  by  using  the  Korean  and 
Malaysian export prices for the product concerned to the USA, derived from the USA 

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import  statistics.  These  figures  were  adjusted  by  product  types  in  proportion  to  the 
tonnage of each product type based on information provided in the request.  

c) Comparison 

(22)  The weighted average normal value was compared with the weighted average export 
price  of  TPFs,  in  accordance  with  Article  2(11)  of  the  basic  Regulation,  both  at  ex-
works level.  

(23)  For the purpose of ensuring a fair comparison between normal value and export price, 
account was taken of differences in factors affecting prices and price comparability in 
accordance  with  Article  2(10)  of  the  basic  Regulation.  In  this  respect,  adjustments 
were  made  for  inland  and  ocean  freight,  insurance,  handling,  loading  and  ancillary 
costs.  

d) Dumping margin 

(24)  The comparison of constructed normal value and constructed export price showed the 
existence of dumping in both countries concerned, the dumping margin being equal to 
the  amount  by  which  the  normal  value  established  exceeded  the  export  price.  The 
dumping margin found, as a percentage of the CIF Community-frontier import price, 
was 15.1% for Korea and 61.3% for Malaysia. 

5. 

Developments of imports should measures be repealed 

a) Preliminary remarks  

(25)  Further  to  the  analysis  of  the  existence  of  dumping  during  the  IP,  the  likelihood  of 
continuation of dumping was also examined. In the absence of co-operation from any 
Korean  or  Malaysian  exporting  producers,  except  for  one  newcomer  company,  and 
given the lack of publicly available information on the TPF industry, the conclusions 
below  rely  mainly  on  the  facts  available  in  accordance  with  Article  18  of  the  basic 
Regulation, namely Eurostat data, the review request, and US Statistics. 

b) Korean and Malaysian production capacity 

(26)  The capacity available in both Korea and Malaysia is estimated at 35 300 tonnes and 
their  export  capacity  at  20 000  tonnes.  This  represents  more  than  one  quarter  of  the 
Community consumption.  

c) Korean and Malaysian export prices to the Community 

(27)  As mentioned in the preliminary remarks, the exports of the product concerned from 
the two countries concerned to the Community market are almost non-existent. With 
regard to the exports to other third countries, it is alleged in the request that the exports 
of the product concerned to the USA are made at dumped prices.  

d) Conclusion on the likelihood of a continuation of dumping 

(28) 

In  the  light  of  the  above,  i.e.  the  high  dumping  margins,  the  huge  spare  capacity 
available  in  these  countries  together  with  their  high  export  capacities,  it  may  be 
concluded that dumped imports from these two countries to the EU would resume if 

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the  measures  were  allowed  to  lapse.  In  addition,  despite  the  high  level  of  the  anti-
dumping duties imposed on their exports which virtually ceased, none of the exporting 
producers in Malaysia requested an interim review. Furthermore, it should be borne in 
mind  that  the  Korean  exporting  companies  have  never  co-operated  in  the  original 
investigation. The absence of co-operation in this investigation also suggests that these 
exporting  producers  were  not  willing  or  able  to  show  that  no  dumping  would  take 
place if measures were allowed to lapse. 

D. DEFINITION OF THE COMMUNITY INDUSTRY 

(29)  Three companies co-operated fully in the investigation. These companies are located 
in  France  (Interfit),  Austria  (Erne  Fittings)  and  Italy  (Virgilio  Cena).  The  Austrian 
group also has a related company in Germany (Siekmann Fittings). The investigation 
established  that  the  three  applicant  and  fully  co-operating  Community  producers 
represented  more  than  50%  of  the  Community  production  of  TPFs  and  therefore 
constitute the Community industry within the meaning of Articles 4(1) and 5(4) of the 
basic Regulation.  

E. SITUATION ON THE COMMUNITY MARKET 

6. 

Consumption in the Community market 

(30)  Community  consumption  was  based  on  the  combined  volume  of  sales  made  by  the 
applicant  Community  producers  and  other  Community  producers,  based  on  the 
request,  and  imports  from  the  countries  concerned  and  imports  from  other  third 
countries, both based on Eurostat.  

(31)  On  this  basis,  during  the  period  considered,  Community  consumption  increased  by 
26%,  from  58 561  tonnes  in  2002  to  73 519  tonnes  during  the  IP.  Tube  and  pipe 
fittings are used mainly in the petrochemical industry, construction, energy generation, 
shipbuilding and industrial installations which, combined with the recovery of the steel 
industry, may explain this rise. 

(32)  TABLE 1 – Community consumption 

Community consumption 

2002 

2003 

2004 

2005 

2006 

IP 

Tonnes 

Index 

Y/Y trend 

58 561 

62 122 

64 480 

56 255 

65 667 

73 519 

100 

100 

106 

110 

6 

4 

96 

-14 

112 

16 

126 

13 

Source: EUROSTAT, request, verified questionnaire replies of the Community industry 

7. 

Imports from the countries concerned 

a) Volume and market share 

(33)  Volumes  imported  from  Malaysia  and  Korea  decreased  drastically  from  404  to 
11 tonnes.  This  seems  to  be  the  result  of  the  anti-dumping  measures  in  force  since 
February 2002. Their market share is de minimis. 

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(34)  TABLE 2 – Imports from the countries concerned 

the  countries 

2002 

2003 

2004 

2005 

2006 

IP 

Imports  from 
concerned 

Tonnes 

Index 

Y/Y trend 

Market 
share 
Community Consumption  

in  %  of 

Source: EUROSTAT  

404 

100 

100 

1% 

22 

5 

-95 

54 

13 

8 

94 

23 

10 

17 

4 

-19 

11 

3 

-1 

0,04% 

0,08% 

0,17% 

0,03% 

0,01% 

b) Price evolution of the imports and undercutting 

(35)  Due  to  very  limited  imports  from  the  countries  concerned  and  in  view  of  the  large 
variety  of  different  types  of  products,  prices  in  Eurostat  cannot  be  considered  as  a 
reliable source for a detailed analysis.  

(36) 

In  the  absence  of  co-operation  in  the  countries  concerned,  the  undercutting  margins 
were calculated using the same methodology as in the request, i.e. by comparing the 
export  prices  of  the  countries  concerned  to  the  USA  and  prices  of  the  applicants 
charged on the Community market. The undercutting margin is 25.2% for Korea and 
53.3% for Malaysia. 

8. 

Economic situation of the Community industry 

a) Production, production capacity and capacity utilisation 

(37)  The Community industry’s production increased by 5% during the period considered, 

while Community consumption increased by 26%.  

(38)  TABLE 3 – Production volume 

Production volume 

2002 

2003 

2004 

2005 

2006 

IP 

Tonnes 

Index 

Y/Y trend 

46 454 

43 504 

47 155 

40 881 

49 300 

48 922 

100 

100 

94 

-6 

102 

8 

88 

-14 

106 

105 

18 

-1 

Source: Verified questionnaire replies of the Community industry 

(39)  During  the  period  considered,  the  production  capacity  of  the  Community  industry 

increased by 6%, despite a slight decrease in 2003.  

(40)  TABLE 4 – Production capacity 

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Production capacity 

2002 

2003 

2004 

2005 

2006 

IP 

Tonnes 

Index 

Y/Y trend 

89 400 

87 800 

89 700 

90 300 

94 800 

95 000 

100 

100 

98 

-2 

100 

101 

106 

106 

2 

1 

5 

0 

Source: Verified questionnaire replies of the Community industry 

(41)  During the period considered capacity utilisation decreased by 1%. 

(42)  TABLE 5 – Capacity utilisation 

Capacity utilisation 

2002 

2003 

2004 

2005 

2006 

IP 

% 

Index 

Y/Y trend 

52% 

50% 

53% 

45% 

52% 

51% 

100 

100 

95 

-5 

101 

6 

87 

-14 

100 

13 

99 

-1 

Source: Verified questionnaire replies of the Community industry 

b) Sales volume and sales prices 

(43)  The  Community  industry’s  sales  to  unrelated  customers  on  the  Community  market 

increased by 11% between 2002 and IP.  

(44)  TABLE 6 – Community industry’s sales to unrelated parties 

Community 
industry’s 
sales 
unrelated parties 

to 

2002 

2003 

2004 

2005 

2006 

IP 

Tonnes 

Index 

Y/Y trend 

34 968 

34 893 

38 401 

32 841 

36 908 

38 750 

100 

100 

100 

-0,2 

110 

10 

94 

-16 

106 

12 

111 

5 

Source: Verified questionnaire replies of the Community industry 

(45)  During  the  period  considered  the  average  sales  prices  charged  by  the  Community 
industry  on  the  Community  market  increased  gradually.  The  total  increase  between 
2002 and the IP was 63%. This rise is partly explained by the increase in the cost of 
the main raw material, steel tubes, and partly by a shift in two Community producers' 
production scope to focus on more expensive special types.  

(46)  TABLE 7 – Community industry’s sales price 

Community 

2002 

2003 

2004 

2005 

2006 

IP 

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industry’s sales price 

EUR/tonne 

1 553 

1 652 

1 783 

2 133 

2 217 

2 528 

Index 

Y/Y trend 

100 

100 

106 

6 

115 

8 

137 

23 

143 

5 

163 

20 

Source: Verified questionnaire replies of the Community industry 

c) Market share 

(47)  The  overall  market  share  held  by  the  Community  industry  from  2002  to  the  IP 

decreased by 7 percentage points.  

(48)  TABLE 8– Market share of the Community industry’s sales 

Market  share  of  the 
Community 
industry’s sales 

2002 

2003 

2004 

2005 

2006 

IP 

Percentage of market 

60% 

56% 

60% 

58% 

56% 

53% 

Source: EUROSTAT and verified questionnaire replies of the Community industry 

d) Growth 

(49)  While  Community  consumption  increased  by  26%  during  the  period  considered,  the 
volume  of  Community  industry  sales  on  the  market  increased  by  only  11%  and  the 
Community  industry  market  share  on  the  market  decreased  by  7  percentage  points. 
Thus,  the  growing  trend  in  Community  consumption  was  not  followed  by  a 
corresponding increase in Community industry sales. 

e) Profitability and return on investments 

(50)  During the period considered profitability, expressed as a percentage of net sales value 

to unrelated parties, developed as follows: 

(51)  TABLE 9 – Profitability 

Profitability 

2002 

2003 

2004 

2005 

2006 

IP 

Percentage of net sales value 

2% 

1% 

4% 

1% 

6% 

10% 

Source: Verified questionnaire replies of the Community industry 

(52)  The  Community  industry’s  profitability  followed  a  positive  trend,  in  line  with  the 
increase  in  the  Community  industry  sales  prices.  Despite  a  significant  decrease  in 
2003  and  2005,  overall  profitability  reached  10%.  This  was  due  to  a  switch  to  the 
production of products with a higher added value during the period considered, when 
the average profit made by the Community industry was 4%. 

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(53)  Return on investments, expressed as profits/losses in relation to the net book value of 

investments, followed the same trend as profitability. 

(54)  TABLE 10 – Return on investments 

Return 
investments 

% 

Index 

Y/Y trend 

on 

2002 

2003 

2004 

2005 

2006 

IP 

6% 

100 

100 

2% 

37 

-63 

11% 

184 

147 

4% 

62 

-122 

18% 

37% 

310 

248 

618 

309 

Source: Verified questionnaire replies of the Community industry 

f) Cash flow 

(55)  There  were  considerable  fluctuations  in  cash  flow  between  2002  and  2005  and  a 
dramatic increase in 2006 and during the IP. This increase of cash flow also indicates 
that the industry was recovering. This level of cash flow allows companies to invest in 
the TPF business again after low periods.  

(56)  TABLE 11 – Cash flow 

Cash flow 

2002 

2003 

2004 

2005 

2006 

IP 

EUR 

Index 

Y/Y trend 

1 310 693  3 826 570  2 378 520  1 233 797  7 559 501  10040180 

100 

100 

292 

192 

181 

-110 

94 

-87 

577 

483 

766 

189 

Source: Verified questionnaire replies of the Community industry 

g) Investments and ability to raise capital 

(57)  The Community industry increased investments by 65% during the period considered. 
Most  of  them  were  concentrated  on  machinery  to  increase  productivity.  None  of  the 
companies investigated mentioned any current difficulty in raising capital. 

(58)  TABLE 12 – Investments 

Investments 

2002 

2003 

2004 

2005 

2006 

IP 

EUR 

Index 

Y/Y trend 

5 839 416  5 824 908  3 438 352  7 422 926  9 986 636  9 643 822 

100 

100 

100 

-0,2 

59 

-41 

127 

68 

171 

44 

165 

-6 

Source: Verified questionnaire replies of the Community industry 

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h) Stocks 

(59)  The table below shows that closing stocks maintained a stable curve; nevertheless, in 

the period considered there is a small decrease of around 1%.  

(60)  TABLE 13 – Stocks 

Closing  Stock 
Volume 

Tonne 

Index 

Y/Y trend 

in 

2002 

2003 

2004 

2005 

2006 

IP 

7 233 

7 115 

7 449 

7 206 

7 580 

7 190 

100 

100 

98 

-2 

103 

5 

100 

-3 

105 

5 

99 

-5 

Source: Verified questionnaire replies of the Community industry 

i) Employment, productivity and labour cost 

(61)  After a decrease of 5% in 2003, during the period considered the overall labour force 

decreased by 2%.  

(62)  TABLE 14 – Employment 

Employment  

2002 

2003 

2004 

2005 

2006 

IP 

Number 
employees 

Index 

Y/Y trend 

of 

760 

725 

719 

692 

729 

741 

100 

100 

95 

-5 

95 

-0,8 

91 

-3 

96 

5 

98 

2 

Source: Verified questionnaire replies of the Community industry 

(63) 

In line with the increase in production and the decrease in employment, productivity 
improved by 8% during the investigation period. 

(64)  TABLE 15 – Productivity 

Productivity 

2002 

2003 

2004 

2005 

2006 

Tonnes/employee 

61 

Index 

Y/Y trend 

100 

100 

60 

98 

-2 

66 

107 

9 

59 

97 

-11 

68 

111 

14 

Source: Verified questionnaire replies of the Community industry 

IP 

66 

108 

-3 

(65)  During  the  period  considered  the  labour  costs  of  the  Community  industry  gradually 
increased.  The  total  increase  in  labour  cost  for  the  period  considered  was  22%.  The 

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main increase in labour costs happened in a company which changed its product mix 
from  commodities  to  specialized  products,  which  required  higher  professional 
qualifications. 

(66)  TABLE 16 – Labour Costs 

2002 

2003 

2004 

2005 

2006 

IP 

Labour 
Costs/ 
Wages 

EUR 

28 941 652  28 436 139  29 607 915  29 754 664  33 069 402  35 312 821 

Index 

100 

Y/Y trend  100 

98 

-2 

102 

4 

103 

1 

114 

11 

122 

8 

Source: Verified questionnaire replies of the Community industry 

9. 

Effect of other factors 

a) Export activity of the Community industry 

(67)  The  Community  industry’s  exports  of  tube  and  pipe  fittings  during  the  period 
considered  were  not  very  stable,  showing  strong  fluctuations.  Overall,  the  level  of 
exports  to  third  countries  decreased  by  15%,  this  reduction  being  mainly  due  to  the 
unfavourable EUR/USD exchange rate. 

(68)  TABLE 17 – Exports of the Community industry 

Exports 
Community industry 

of 

the 

Tonnes 

Index 

2002 

2003 

2004 

2005 

2006 

IP 

10 893  8 003 

9 358 

8 410 

11 890 

9 278 

Y/Y trend 

100 

-27 

100 

73 

86 

12 

77 

-9 

109 

32 

85 

-24 

Source: Verified questionnaire replies of the Community industry 

b) Import volumes and prices from other third countries 

(69)  Council  Regulation  (EC)  Nº  964/2003  imposed  anti-dumping  duties  on  imports  of 
TPFs  from  the  People's  Republic  of  China  (58.6%) and Thailand (58.9%).  Measures 
are applicable for the product concerned originated in China and consigned from one 
of the following countries: the Philippines, Indonesia, Sri Lanka and Taiwan. Despite 
the  measures  in  force  against  imports  from  China,  their  exports  to  the  EU  are 
increasing steadily. 

(70)  The  total  import  volumes  of  TPFs  from  third  countries  other  than  the  countries 
concerned  more  than  doubled  during  the  period  considered,  increasing  from  9 654 
tonnes in 2002 to 24 105 tonnes at the end of the IP.  

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(71) 

Import  volumes  of  TPFs  into  the  Community  from  countries  other  than  Korea  and 
Malaysia developed as follows: 

(72)  TABLE 18 – Imports from other third countries 

Imports 
third countries 

from  other 

2002 

2003 

2004 

2005 

2006 

IP 

Tonnes 

Index 

9 654 

12 453 

11 488 

13 344 

19 020 

24 105 

100 

129 

119 

-10 

138 

19 

197 

59 

250 

53 

Y/Y trend 

100 

29 

Source: EUROSTAT 

(73)  The  market  share  of  imports  originating  in  third  countries  other  than  the  countries 
concerned reached 33% of the EU consumption. This means an increase of 99% in the 
period considered from 16 to 33%.  

(74)  TABLE 19 – Market share of imports from other third countries 

Market  share  imports 
third 
other 
from 
countries 

2002 

2003 

2004 

2005 

2006 

IP 

Percentage of market 

16% 

20% 

18% 

24% 

29% 

33% 

Index 

Y/Y trend 

100 

100 

122 

22 

108 

-14 

144 

36 

176 

32 

199 

23 

Source: EUROSTAT and market information provided by the applicant producers 

(75)  TABLE 20 – Main imports into the EU 

from  other 
in 

countries 

2002 

2003 

2004 

2005 

2006 

IP 

859 

1428 

1772 

2236 

5846 

8339 

1101 

2372 

1894 

2540 

1835 

1214 

767 

694 

1522 

1569 

1537 

1763 

676 

1508 

778 

558 

4774 

1224 

1552 

1622 

5854 

1475 

2096 

2334 

Imports 
third 
tonnes 

China  

Taiwan 

Vietnam 

India 

Thailand 

c) Recovery from the effects of dumping 

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(76)  As shown by the positive evolution of most of the indicators listed above, in the years 
2002  to  mid-2007  the  economic  situation  of  the  Community  industry  has  partially 
recovered from the injurious effect of dumped imports originating in the two countries 
concerned. 

10. 

Conclusion on the situation of the Community industry 

(77)  The measures in force have led to a partial recovery of the Community industry since 
2002. The Community industry managed to increase its sales volumes and its prices. 
Injury  indicators  such  as  production,  production  capacity,  profitability,  investments, 
return  on  investments  and  productivity  also  showed  a  positive  development.  This 
demonstrates 
its 
competitiveness. As a result, Community industry sales in the Community have been 
profitable since 2002.  

industry  made  efforts 

the  Community 

improve 

that 

to 

(78)  However, the Community industry did not manage to take advantage of the significant 
growth in consumption in the Community and some of the positive factors are also the 
result  of  the  disappearance  of  a  significant  Community  producer  in  the  United 
Kingdom,  whose  activities  were  taken  over  by  two  of  the  companies  supporting  the 
request. 

(79) 

(80) 

It may nevertheless be concluded that the introduction of measures against Korea and 
Malaysia had a positive impact on the economic situation of the Community industry. 

In view of the tentative recovery of the Community industry, the continuation of injury 
caused  by  dumped  imports  could  not  be  established.  It  was  therefore  examined 
whether there would be recurrence of injury if the measures were allowed to lapse. 

F. LIKELIHOOD OF RECURRENCE OF INJURY 

(81)  As  mentioned  above,  the  Korean  and  Malaysian  producers  have  the  potential  to 
redirect  huge  export  volumes  to  the  Community  market  if  measures  are  allowed  to 
lapse.  According  to  the  request,  these  countries  are  heavily  dependent  on  export 
markets: 75% for Korea and 84% for Malaysia. In addition, it seems that other export 
markets, such as the USA and Japan, could not absorb the spare capacity, since export 
volumes  to  these  countries  are  already  significant,  and  therefore  these  would  be 
directed  to  the  Community  market.  In  addition,  it  seems  that  there  is  a  general 
overcapacity on the Asian market. 

(82)  With regard to prices, it was found from US statistics that the Malaysian and Korean 
export  prices  to  the  USA  were  lower  than  those  of  the  Community  industry.  Even 
though a detailed analysis could not be carried out because of the many different types 
of  products,  it  is  likely  that  these  exporters  will  align  their  prices  with  the  very  low 
ones  from  the  other  Asian  countries  in  order  to  regain  their  lost  market  share.  Such 
pricing  behaviour,  attested  by  their  non  co-operation  coupled  with  their  ability  to 
deliver  significant  quantities  of  the  product  concerned  to  the  Community  market, 
would suggest a negative impact on the Community industry.  

(83) 

In addition, it should be borne in mind that the Community industry needs to remain 
competitive to produce a certain volume of standard products, which are therefore in 

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direct  competition  with  the  imports  from  Korea  and  Malaysia,  in  order  to  make 
economies of scale.  

(84) 

In the light of the above, it is concluded that allowing the measures to lapse would in 
all likelihood result in a recurrence of injury to the Community industry caused by the 
dumped imports. 

G. COMMUNITY INTEREST 

1. 

Introduction 

(85)  According  to  Article  21  of  the  basic  Regulation,  it  was  examined  whether  a 
prolongation of the existing anti-dumping measures would be contrary to the interests 
of the Community industry as a whole. The determination of the Community interest 
was  based  on  an  appreciation  of  all  the  various  interests  involved,  i.e.  those  of  the 
Community  industry,  the  importers/traders  as  well  as  the  users  of  the  product 
concerned. No submissions were received from users. 

(86) 

In  order  to  assess  the  likely  impact  of  the  continuation  or  non-continuation  of  the 
measures, the Commission requested information from all interested parties mentioned 
above. The Commission sent sampling questionnaires to  64  importers of the product 
concerned and received eleven answers. The Commission sent a questionnaire to these 
eleven  companies  and  only  received  two  partial  answers  which  did  not  provide  any 
evidence  that  the  measures  in  force  had  materially  affected  them.  It  is  clear  that  the 
importers  have  found  other  sources  of  supply,  as  can  be  seen  from  the  significant 
market  share  (33%)  held  by  other  third  countries,  which  showed  that  conditions  of 
competition on the Community market are ensured. 

(87)  Furthermore,  the  fact  that  the  present  investigation  is  a  review,  thus  analysing  a 
situation  in  which  anti-dumping  measures  have  already  been  in  place,  allows  the 
assessment of any undue negative impact on the parties concerned by the current anti-
dumping measures.  

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

2. 

Interests of the Community industry 

(89)  The  Community  industry  has  proved  to  be  a  structurally  viable  industry.  This  was 
confirmed  by  the  positive  development  of  its  economic  situation  at  a  time  when 
effective  competition  had  been  restored  after  the  imposition  of  the  anti-dumping 
measures  that  are  currently  in  force.  Indeed,  the  efforts  made  by  the  Community 
industry  to  rationalise  its  production  and  enhance  its  competitiveness  have  led  to  a 
reasonable profit in the last two years of the period considered.  

(90)  Given  the  above,  it  appears  necessary  to  maintain  the  existing  measures  in  order  to 
avoid  the  adverse  effects  of  dumped  imports,  which  could  endanger  the  recovery 
process of the Community industry and ultimately its very existence. It has also to be 
borne  in  mind  that  if  the  Community  industry  disappeared,  there  would  also  be  a 

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negative  impact  on  the  downstream  industry,  since  the  latter  would  see  a  significant 
reduction in its choice of suppliers.  

3. 

Interests of importers/traders 

(91)  As stated above, only two of the 64 unrelated importers replied to the Commission's 
questionnaire.  However,  they  did  not  express  any  negative  opinions  on  a  possible 
continuation  of  measures.  The  lack  of  co-operation  is  in  itself  an  indication  that  this 
sector  did  not  suffer  any  substantial  negative  effect  on  its  economic  situation  as  a 
result  of  the  measures.  This  is  confirmed  by  the  fact  that  the  importers  continued  to 
trade the product concerned in significant volumes, even raising the volume imported 
during the period considered.  

(92) 

It  is  therefore  concluded  that  the  economic  situation  of  the  importers  of  the  product 
concerned  has  not  been  negatively  influenced  by  the  imposition  of  the  anti-dumping 
measures  currently  in  force.  On  the  same  grounds,  it  is  also  unlikely  that  a 
continuation of the measures would lead to a deterioration in their economic situation 
in the future.  

4. 

Interests of users 

(93)  No users made themselves known in the current investigation. The users of the product 
concerned  are  mainly  the  petrochemical  and  building  industries.  Their  lack  of  co-
operation seems to confirm that the tube or pipe fittings represent a very small part of 
their total production costs and that the measures in force do not appear to have caused 
any loss of competitiveness for them. 

(94) 

It was concluded that maintaining the measures at the same level would not imply any 
deterioration in the situation of the users. 

5. 

Conclusion on Community interest 

(95)  The investigation has shown that the existing anti-dumping measures have allowed the 
Community industry to recover to a certain extent. If measures were allowed to lapse, 
this would endanger the recovery process and possibly lead to the disappearance of the 
Community industry. Therefore, the continuation of measures is in the interest of the 
Community industry.  

(96)  Furthermore, in the past, the existing measures appear not to have had any significant 
negative  effects  on  the  economic  situation  of  users  and  importers.  It  is  therefore 
concluded that there are no compelling reasons against the continuation of the existing 
anti-dumping measures.  

H. ANTI-DUMPING MEASURES 

(97)  All  parties  concerned  were  informed  of  the  essential  facts  and  considerations  on  the 
basis of which it is intended to recommend that the existing measures be maintained. 
They were also granted a period within which to make representations after disclosure. 
No  comments  were  received  from  Korea;  one  comment  was  received  from  a 
Malaysian company, but not such as to alter the above conclusions. 

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(98) 

It  follows  from  the  above  that,  as  provided  for  by  Article  11(2)  of  the  basic 
Regulation, the anti-dumping duties on imports of tube and pipe fittings originating in 
the  Republic  of  Korea  and  Malaysia,  imposed  by  Regulation  (EC)  No  1514/2002, 
should be maintained. 

HAS ADOPTED THIS REGULATION: 

Article 1 

(1) 

A definitive anti-dumping duty is hereby imposed on imports of tube and pipe fittings 
(other than cast fittings, flanges and threaded fittings), of iron or steel (not including 
stainless  steel),  with  a  greatest  external  diameter  not  exceeding  609.6 mm,  of  a  kind 
used  for  butt-welding  or  other  purposes,  originating  in  the  Republic  of  Korea  and 
Malaysia and falling within CN codes ex 7307 93 11, ex 7307 93 19, ex 7307 99 30 
and ex 7307 99 90 (TARIC codes 7307 93 11 91, 7307 93 11 93, 7307 93 11 94, 7307 
93 11 95, 7307 93 11 99, 7307 93 19 91, 7307 93 19 93, 7307 93 19 94, 7307 9319 95, 
7307 93 19 99, 7307 99 30 92, 7307 99 30 93, 7307 99 30 94, 7307 99 30 95, 7307 99 
30 98, 7307 99 90 92, 7307 99 90 93, 7307 99 90 94, 7307 99 90 95, 7307 99 90 98).  

(2) 

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

Country 

Company 

Rate  of  duty 
(%) 

TARIC 
Additional 
Code 

Malaysia 

Republic of Korea 

Anggerik Laksana Sdn Bhd, 
Selangor Darul Ehsan 
All other companies 

All companies 

59.2 

75 

44 

A324 

A999 

- 

(3) 

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

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

Article 2 

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

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Done at Brussels, […] 

For the Council 
The President 
[…] 

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