Council Regulation (EC) No 1256/2008 of 16 December 2008 imposing a definitive anti-dumping duty on imports of certain welded tubes and pipes of iron or non-alloy steel originating in Belarus, the People's Republic of China and Russia following a proceeding pursuant to Article 5 of Regulation (EC) No 384/96, originating in Thailand following an expiry review pursuant to Article 11(2) of the same Regulation, originating in Ukraine following an expiry review pursuant to Article 11(2) and an interim review pursuant to Article 11(3) of the same Regulation, and terminating the proceedings in respect of imports of the same product originating in Bosnia and Herzegovina and Turkey
Date: 2008-12-16
Institutions: European Commission
Subjects: Belarus, Bosnia and Herzegovina, China, Thailand, Türkiye, Ukraine, anti-dumping duty, originating product, piping, tube

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I

(Acts adopted under the EC Treaty/Euratom Treaty whose publication is obligatory)

REGULATIONS

COUNCIL REGULATION (EC) No 1256/2008

of 16 December 2008

imposing a definitive anti-dumping duty on imports of certain welded tubes and pipes of iron or
non-alloy steel

— originating in Belarus, the People's Republic of China and Russia following a proceeding

pursuant to Article 5 of Regulation (EC) No 384/96,

— originating in Thailand following an expiry review pursuant to Article 11(2) of the same

Regulation,

— originating in Ukraine following an expiry review pursuant to Article 11(2) and an interim

review pursuant to Article 11(3) of the same Regulation,

— and terminating the proceedings in respect of imports of the same product originating in Bosnia

and Herzegovina and Turkey

THE COUNCIL OF THE EUROPEAN UNION,

alia in Thailand, Turkey and Ukraine (the ‘measures in
force’) (2).

Having regard to the Treaty establishing the European Commu-
nity,

Having regard to the Council Regulation (EC) No 384/96 of
22 December 1995 on protection against dumped imports from
countries not members of the European Community (1) (‘the
basic Regulation’), and in particular Articles 9, 11(2) and 11(3)
thereof,

2.

PRESENT INVESTIGATION

2.1.

Complaint

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

Whereas:

(2) A complaint was lodged on 20 August 2007 by the
Defence Committee of the Welded Steel Tube Industry of
the European Union (the Defence Committee),
the
complainant, on behalf of producers representing a major
the total
in this case more than 50 %, of
proportion,
Community production of certain welded tubes and pipes,
of iron or non-alloy steel.

A.

PROCEDURE

1.

MEASURES IN FORCE

(1)

The Council, by Regulation (EC) No 1697/2002 imposed
definitive anti-dumping duties on imports of certain welded
tubes and pipes, of iron or non-alloy steel originating inter

(1) OJ L 56, 6.3.1996, p. 1.

(3)

The complaint contained sufficient evidence of dumping of
the said product, originating in Belarus, Bosnia and

(2) OJ L 259, 27.9.2002, p. 8. On 1 May 2004 the European Union
enlarged to include 10 new Member States,
inter alia the Czech
Republic and Poland. As from that date, the antidumping measures
in force in the Community of 15 Member States were automatically
extended to be applied also by the new Member States to imports
from third countries. Measures against the new Member States
automatically lapsed on the same date.

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Herzegovina, the People's Republic of China (‘PRC’) and
Russia, and of material injury resulting therefrom to justify,
after having consulted the Advisory Committee,
the
initiation of a proceeding.

from Thailand, Turkey and Ukraine (the ‘expiry review’) and
an interim review as far as imports from Turkey are
concerned with regard to imports of certain welded tubes
and pipes, of iron or non-alloy steel (the ‘Turkey interim
review’).

2.2.

Requests for review

(4) On 25 June 2007, a request

for reviews pursuant

to
Article 11(2) and 11(3) of the basic Regulation was lodged
the Welded Steel Tube
by the Defence Committee of
Industry of
the complainant, on
behalf of producers representing a major proportion, in this
case more than 50 %, of the total Community production
of certain welded tubes and pipes, of iron or non-alloy steel.

the European Union,

(5)

The request contained sufficient evidence for the initiation
the anti-dumping measures
of an expiry review of
applicable to imports of the said product from Thailand,
Turkey and Ukraine; and an interim review, covering
dumping and injury, as far as imports from Turkey are
concerned. After having consulted the Advisory Commit-
tee, the Commission initiated reviews in accordance with
Article 11(2) and (3) of the basic Regulation.

imports of

(6) Regarding Turkey, the request contained sufficient evidence
that
the product concerned remained at
significantly high levels both in absolute terms and in
terms of market share. It further stated that the volumes
and prices of the imported product concerned from this
country had, among other consequences, a negative impact
on the market share held and on the level of prices charged
by the Community industry, resulting in substantial adverse
effects on the overall performance and the financial
situation of the Community industry.

(7) A request for a partial interim review pursuant to Arti-
cle 11(3) of the basic Regulation was lodged on 15 October
2007 by Interpipe Group, an exporter from Ukraine. The
request was limited in scope to the examination of
dumping.

2.3.

Initiation

(8) On 26 September 2007, the Commission announced by a
notice (‘notice 1’) published in the Official Journal of the
European Union (1),
the initiation of an anti-dumping
proceeding pursuant to Article 5 of the basic Regulation
with regard to imports of certain welded tubes and pipes, of
iron or non-alloy steel originating in Belarus, Bosnia and
Herzegovina, the People's Republic of China and Russia (the
‘anti-dumping investigation’).

(9) On the same day, pursuant to Article 11(2) and (3) of the
basic Regulation, the Commission announced by a notice
(‘notice 2’) published in the Official Journal of the European
Union (2), the initiation of an expiry review for imports

(10) On 24 January 2008, pursuant Article 11(3) of the basic
Regulation, the Commission published in the Official Journal
of the European Union (3) a notice of initiation (‘notice 3’) of
an interim review limited to the dumping of one exporter
of certain welded tubes and pipes, of iron or non-alloy steel
originating in Ukraine, the Interpipe Group (the ‘Ukraine
interim review’).

(11) The abovementioned investigations have been treated
jointly since they are obviously interlinked with each other,
in particular as regards the determination of injury and
likelihood of recurrence of injury. For the sake of good
administration,
they have been combined in a single
Regulation.

3.

PARTIES CONCERNED BY THIS PROCEEDING

(12) The Commission services officially advised the complai-
nant,
the Community producers mentioned in the
complaint and the request, any other known Community
producers, importers, traders, the known exporting produ-
cers in Belarus, Bosnia and Herzegovina,
the People's
Republic of China, Russia, Thailand, Turkey and Ukraine,
and the authorities of the countries concerned.

(13)

Interested parties were given an opportunity to make their
views known in writing and to request a hearing within the
time limits set in the notices of initiation. A number of
exporting producers and Community producers repre-
sented by the complainant made use of this opportunity
and submitted claims
considered during the
to be
investigation.

3.1.

Sampling

(14)

In view of the large number of exporting producers for
certain exporting countries, Community producers and
importers involved in the investigations, the application of
sampling techniques was envisaged wherever relevant in the
anti-dumping proceeding, the expiry review and the Turkey
interim review, as set out in recitals 8 and 9 above, in
accordance with Article 17 of the basic Regulation.

(15)

In order to enable the Commission to decide whether
sampling would be necessary and, if so, to select a sample,
exporting producers and representatives acting on their

(1) OJ C 226, 26.9.2007, p. 7.
(2) OJ C 226, 26.9.2007, p. 12.

(3) OJ C 17, 24.1.2008, p. 14.

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importers were
behalf, Community producers
requested to make themselves known and to provide
information as specified in the notices of initiation.

and

3.1.1. Sampling of the Community producers

(16) Fifteen parties, 13 complainants

and 2 supporting
producers, replied to the sampling form, a further 2
companies cooperated by completing a mini-questionnaire.
The
cooperation reached around 95 % of
Community production.

level of

(17)

In accordance with Article 17 of the basic Regulation, the
sample was selected, after consultation with the complai-
nant, based on the largest representative volume of sales. As
a result of this exercise, a sample of 9 companies was
selected. The sampled companies accounted for 67 % of the
total Community production during the IP.

3.1.2. Sampling of the importers

(18) Around 140 importers were contacted based on the
information available to the Commission. Out of those
140, 16 declared that they were not importing welded
tubes from the countries concerned and 3 companies
replied that they were no longer active on the market of the
product concerned. Thirteen unrelated importers replied to
the questionnaire, but only two submitted a complete
response. The cooperating unrelated importers represented
less than 5 % of total imports concerned — a very low level
of cooperation.

3.1.3. Sampling of the exporters

(19) As mentioned in the notices of initiation, sampling was
envisaged for the exporters/producers in the PRC, Russia,
Turkey, Ukraine, and Thailand. Detailed information on the
sampling exercise per country concerned is set out in the
analysis for each country below.

4.

VERIFICATION OF INFORMATION RECEIVED

(20) The Commission sought and verified all the information it
deemed necessary for the purpose of the determination of
dumping, resulting injury and Community interest. Infor-
mation submitted by the following companies was verified
on-spot:

(a) Community industry producers

— Corus Tubes UK, United Kingdom

— Corus Tubes BV, the Netherlands

— Laminaciones Arregui SL, Spain

— Ruukki Sverige AB, Sweden.

For the remaining 3 sampled companies:

— Mittal steel Iasi, Romania

— Arvedi Tubi Acciaio spa, Italy

— Zelezarny Veseli a.s., Czech Republik (in this case
the verification method entailed a detailed
analysis and cross-check of the reply on the
basis of supporting documentation provided)

(b) Unrelated importers

— Comercial de Tubos, Spain

— Anastel Ltd, United Kingdom;

(c)

Exporting producers and producers in the People's
Republic of China

— Jinghua Steel Pipe Group:

— Hengshui Jinghua Steel Pipe Co. Ltd

— Tangshan Jinghua Steel Pipe Co. Ltd

— Laiwu Jinghua Steel Pipe Co. Ltd

— Jilin Jinghua Steel Pipe Co. Ltd

— Guangzhou Jinghua Steel Pipe Co. Ltd

— Chengdu Pengzhou Jinghua Steel Pipe Co.

Ltd.

— Zhejian Kingland Group:

— Zhejian Kingland Pipeline and Technologies

Co. Ltd

— Kingland Group Co. Ltd.

— Fubo Group:

— Jäkl Karvina, Czech Republik (member of the

— Shandong Fubo Group Co. Ltd

ArcelorMittal Group)

— Zibo Fubo Steel Pipes Factory Co. Ltd.

— ArcelorMittal Poland SA, Poland (member of the

ArcelorMittal Group)

— Weifang East Steel Pipe Co. Ltd;

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— Huludao Group:

— Interpipe Europe, SA

— Huludao City Steel Pipe Industrial Co. Ltd

— Huludao Seven-Star Steel Pipe Group Co.

Ltd

— Jiangsu Guoqiang Zinc-plating Industrial Co. Ltd;

(d)

Exporting producers in Russia

— TMK Group (Joint Stock Company Taganrog
Metallurgical Works (‘Tagmet’), Taganrog)

— OMK Group (Open Joint Stock Company Vyksa

Steel Works (‘VMZ’), Vyksa)

In each of the two groups only the producer with the
largest volume of Community exports was verified.

Related traders in Russia

In order to avoid any circumvention in the future,
dumping margins have been calculated on a group-
wide basis;

(g)

Exporting producer in Bosnia and Herzegovina

— Unis Fabrika cijevi a.d., Derventa;

(h) Operator in Belarus

— Mogilev Metallurgical Works Joint Stock Com-

pany

Unrelated importer and owner of exports:

— FB Stahlhandel GmbH;

(i)

Exporting producers in Turkey

— CJSC Trade House TMK, Moscow, TMK Group

— Cayirova Boru Sanayi ve Ticaret AŞ (1)

— Closed Joint Stock Company United Metallurgi-
cal Company (‘UMC’), Moscow, OMK Group

— Yücel Boru ve Profil Endüstrisi AŞ

— OMK Steel, LLC, Moscow, OMK Group

— Noksel Çelik Boru Sanayi AŞ, Ankara

Related importer

— TMK Sinara Handel GmbH, Köln, Germany, TMK

Group

In order to avoid any circumvention in the future,
dumping margins have been calculated on a group-
wide basis;

(e)

Exporting producer in Thailand

— Samchai Steel Industries Public Company Ltd.,

Samutsakorn, Thailand;

— Erbosan Erciyas Boru Sanayii ve Ticaret AŞ,

Kayseri

— Borusan Mannesmann Boru Sanayi ve Ticaret

AŞ, Istanbul

— Toscelik Profil ve Sac Endustrisi AS, Iskenderun.

In order to avoid any circumvention in the future,
dumping margins have been calculated on a group-
wide basis.

(f)

Exporting producers in Ukraine

5.

INVESTIGATION PERIOD

— OJSC Interpipe Novomoskovsk Pipe Production

Plant

— OJSC Interpipe Nizhnedneprovsk Tube Rolling

Plant.

Related traders/importers located in Ukraine:

— Interpipe Ukraine LLC

Related traders/importers located outside Ukraine:

(21) The investigation of dumping and injury for the anti-
dumping investigation covered the period from 1 July 2006
to 30 June 2007 (‘investigation period’ or
‘IP’). The
examination of trends in the context of the injury analysis
covered the period from 1 January 2004 to the end of the
IP (‘period under consideration’). The same IP was also used
for the Turkey interim review and for the expiry review,
which also had the same period under consideration.

(22) The investigation period for the Ukraine interim review
covered the full calendar year 2007 (‘Interpipe investigation
period’ or ‘IIP’).

— Interpipe-M LLC.

(1) For this company as well as for Yücel Boru ve Profil Endüstrisi AŞ

and Noksel Çelik Boru Sanayi AŞ, Ankara, see recital 143.

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6.

DISCLOSURE

(23) All parties were informed of

facts and
considerations on the basis of which it was intended to
recommend:

the essential

therefore concluded, as has been done in previous
investigations covering the same product, that all types of
the product concerned should be considered as a single
product for the purpose of the investigation.

— the imposition of definitive anti-dumping duties on

imports from certain countries

(29) For the purposes of the expiry review, the Turkey interim
review and the Ukraine interim review,
the product
concerned is the same as that covered by the original and
previous investigation, mentioned under recital 1.

— the termination of the proceeding against imports

from Bosnia and Herzegovina and Turkey

8.

LIKE PRODUCT

(24)

In accordance with the provisions of the basic Regulation,
parties were granted a period in which they could make
representation subsequent to this disclosure.

(25) The oral and written comments submitted by the parties
the definitive

were considered and, when appropriate,
findings have been modified accordingly.

B.

PRODUCT CONCERNED AND LIKE PRODUCT

7.

PRODUCT CONCERNED

(26) The product concerned is welded tubes and pipes, of iron
or non-alloy steel, of circular cross-section and of an
external diameter not exceeding 168,3 mm, excluding line
pipe of a kind used for oil or gas pipelines, casing and
tubing of a kind used in drilling for oil or gas, precision
tubes and tubes and pipes with attached fittings suitable for
conducting gases or
for use in civil aircraft,
originating in Belarus, Bosnia and Herzegovina, the People's
Republic of China, Russia, Thailand, Turkey and Ukraine. It
is normally declared within CN codes ex 7306 30 41,
ex 7306 30 49, ex 7306 30 72 and ex 7306 30 77.

liquids

(30) The product produced in Belarus, Bosnia and Herzegovina,
the People's Republic of China, Russia, Thailand, Turkey and
Ukraine and exported to the Community is alike in all
aspects to the product sold on the domestic market of these
countries as well as to the product produced by the
Community producers and sold on the Community market.
The same is true with regard to the product produced and
sold for export to the Community as compared to the
product produced and sold in the USA which served as a
market economy third country for the People's Republic of
China and Belarus. All
these products were therefore
considered to be alike within the meaning of Article 1(4) of
the basic Regulation.

C.

DUMPING

1.

GENERAL METHODOLOGY

(31) The general methodology set out below has been applied to
all exporting operators as appropriate. The subsequent
presentation of the findings on dumping aspects for the
countries concerned describes therefore only those issues
which are specific to a particular exporting country.

(27) Welded tubes and pipes are used in a wide range of
applications including amongst others, the conveyance of
water, steam, natural gas, air and other liquids and gases in
plumbing, heating and ventilation systems, air-conditioner
units, automatic sprinkler systems, and other similar uses.
Quite often they are also used for construction purposes,
fence tubing, protection means and
for
scaffoldings.

load-bearing,

2.

NORMAL VALUE

(32)

In accordance with Article 2(2) of the basic Regulation, it
was first examined for each cooperating exporting producer
whether its domestic sales of welded tubes and pipes were
representative, i.e. whether the total volume of such sales
represented at least 5 % of its total export sales volume to
the Community.

(28) The major raw material for the product concerned is hot-
rolled coils, which are formed into tubes. Welded tubes and
pipes may then further be treated by coating or galvanisa-
tion. These further treatments are intended to increase the
quality of the product. They are mostly delivered with plain
ends, but can also have bevelled or threaded ends, with or
without couplings. The product concerned is produced in
numerous sizes and according to various standards and
classifications. They are, to a considerable extent,
inter-
changeable with regard to their end-use and, therefore,
there exists a significant degree of overlap and competition
between the various types of the product concerned. It is

(33) The Commission subsequently identified those types of
sold domestically that were
welded tubes and pipes
identical or directly comparable with the types sold for
export to the Community. With regard to the examination
on the basis of product type, the Commission considered
domestically sold and exported product types, which had
similar origin, size (outside diameter), wall thickness, outer
finish and end finish as being directly comparable.

(34) For each type sold by the exporting producers on their
domestic markets and found to be directly comparable with

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the type of welded tubes and pipes 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 welded tubes and pipes 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 welded tubes and
pipes exported to the Community.

(35) An examination was also made whether the domestic sales
of each type of welded tube could be regarded as having
been made in the ordinary course of trade, pursuant to
Article 2(4) of the basic Regulation. This was done by
establishing for each exporting producer in the country
concerned, the proportion of profitable sales to indepen-
dent customers on the domestic market, of each exported
type of the product concerned on the domestic market
during the investigation period.

(a)

(b)

(c)

For those product types where more than 80 %, by
volume, of sales on the domestic market were not
below unit costs, i.e., where the average sales price of
the product type concerned was equal to or higher
than the average production cost for the product type
concerned, normal value was calculated as the average
price of all domestic sales of the product type in
question irrespective of whether these sales were
profitable or not.

For those product types where at least 10 % but no
more than 80 %, by volume, of sales on the domestic
market were not below unit costs, normal value was
calculated as the weighted average sales price of those
transactions which were made at or above unit costs
of the type in question.

For those product types where less than 10 %, by
volume, was sold on the domestic market at a price
not below unit cost, it was considered that the product
type concerned was not sold in the ordinary course of
trade
and therefore, normal value had to be
constructed in accordance with Article 2(3) of the
basic Regulation.

(36) For those product types where there were no domestic sales
made in the ordinary course of trade,
it was examined
whether normal value could be established on the basis of
the domestic prices of other producers in accordance with
Article 2(1) of the basic Regulation. If no reliable domestic
prices of other producers were available constructed
normal value was used, in accordance with Article 2(3) of
the basic Regulation.

(37)

If the normal value was constructed in accordance with
Article 2(3) of the basic Regulation, the selling, general and
administrative expenses (‘SG&A’) and amount of profit were

based on actual data pertaining to production and sales, in
the ordinary course of trade, of the like product, by the
exporting producer in question, pursuant to Article 2(3)
and (6) of the basic Regulation.

3.

EXPORT PRICE

(38)

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.

(39) Where the export sale was made via a related importer and
it was not deemed to be reliable, the export price was
constructed, pursuant to Article 2(9) of the basic Regula-
tion, 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 importer's own SG&A costs were
used. The profit margin was established on the basis of the
information available from cooperating unrelated impor-
ters.

(40)

In cases where there was no export price and consequently
no resale of
imported products the export price was
constructed, pursuant to Article 2(9) of the basic Regula-
tion, on any reasonable basis.

4.

COMPARISON

(41) The normal value and export prices for comparable
product types 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 Arti-
cle 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.

5.

DUMPING MARGIN FOR THE COMPANIES INVESTI-
GATED

(42) As a general rule and according to Article 2(11) of the basic
the dumping margin for each exporting
Regulation,
producer was established on the basis of a comparison
between the weighted average normal value with the
weighted average export price per product type.

(43)

In cases of groups of several companies related to each
other a common dumping margin applicable for all
companies in the group, was established,
in accordance
with the standard practice of the Commission in order to
avoid potential circumvention of the measures.

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6.

RESIDUAL DUMPING MARGIN

7.4.

Comparison

(44) 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.

(45)

In order to determine the residual dumping margin, the
level of cooperation was first established. The level of
cooperation was considered to be high when the volume of
exports by the cooperating exporting producers was close
to that provided by Eurostat for the country concerned and
there was no reason to believe that any exporting producer
abstained from cooperating.
In such cases, the residual
dumping margin was set at the level of the cooperating
company with the highest dumping margin, in order to
ensure the effectiveness of any measure.

(46)

In general, where the level of cooperation was low, the
residual dumping margin was set at the highest margin
established for a representative model for another cooperat-
ing producer. This approach was also considered necessary
in order to avoid rewarding non-cooperation.

7.

BOSNIA AND HERZEGOVINA

7.1.

General remarks

(47) The imports from Bosnia and Herzegovina amounted to 33
kilotonnes (KT) in the IP and reached a market share of
about 2,5 %. The largest exporting producer represented
more than 90 % of the total production in Bosnia and
Herzegovina (destined for domestic market and exports). It
cooperated with the investigation and replied to the
questionnaire.

7.2.

Normal value

(48) The total volume of domestic sales of the like product was
representative, as defined in recital (32). In accordance with
the general methodology described above, normal value
was based on prices paid or payable, in the ordinary course
of
in Bosnia and
Herzegovina, or, where applicable, constructed.

trade, by independent customers

7.3.

Export price

(49)

In all cases the product concerned was sold to independent
customers in the Community. Thus, the export price was
based on the prices paid or payable by unrelated customers
in the Community, pursuant to Article 2(8) of the basic
Regulation.

(50) The exporter contested the transport cost rate alleged by
the complainant. Indeed, it could demonstrate during the
on-spot investigation that such costs were lower.

(51) The normal value and export price were compared on an
ex-works basis. For
the purpose of ensuring a fair
comparison, due allowance in the form of adjustments
was made for differences affecting price comparability in
accordance with Article 2(10) of the basic Regulation. After
disclosure, one party questioned alleged adjustments made
for physical characteristics made by the Commission.
However, adjustments for physical characteristics were
neither warranted nor actually applied when calculating the
dumping margin for the sole exporting producer in Bosnia
and Herzegovina.

7.5. Dumping margin

(52) The comparison between the normal value and the export
price on a weighted average to weighted average basis was
applied and this method showed a dumping margin of
0,7 %.

(53) Since the dumping margin is de minimis, i.e. less than 2 %,
in accordance with Article 9(3) of the basic Regulation, the
proceeding against Bosnia and Herzegovina should be
terminated without imposition of measures. The nature and
impact of imports from this country are analysed in the
injury part under ‘other factors’.

8.

THE PEOPLE'S REPUBLIC OF CHINA (PRC)

8.1.

General remarks

(54) As reported by Eurostat (all CN Codes), Chinese imports
increased sharply in the recent years from 22 KT in 2004 to
111 KT in 2006 (180 KT in the IP). The PRC is thus by far
the biggest importer on the Community market with a
market share which increased from 1,8 % in 2004 to more
than 13,8 % in the IP. The cooperating producers have
reported even higher volumes of 233 KT exports. Six
sampled companies reported 219 KT. A first implication of
this discrepancy is that the market penetration and share of
Chinese exports is even more significant than originally
thought.

(55) This discrepancy in quantities reported by Eurostat and by
the cooperating producers could also correspond to a
customs misdeclaration of the product concerned. This
coincides with the allegations made by the Community
industry, which indicate that the product concerned is
being misdeclared. The investigation as a whole has shown
that operators may sell different types of
tubes (some
belonging to the product concerned, some not) under the
same invoice. It is therefore not excluded that, depending

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on how clearly these differences are specified on the
invoice, this could be used for an incorrect declaration by a
declarant of the product concerned under codes other than
those associated to the product concerned.

Criterion 1 — Business decisions are made in response to market
signals, without significant State interference, and costs reflect
market values

8.2. Market economy treatment (MET)

(56) Pursuant to Article 2(7)(b) of the basic Regulation, in anti-
dumping investigations concerning imports originating in
the PRC, 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.

(57) Briefly, and for ease of reference only, the MET criteria are

set out in a summarised form below:

1.

2.

3.

4.

Business decisions and costs are made in response to
market conditions and without State interference.

Accounting records are independently audited, in line
with international accounting standards and applied
for all purposes.

There are no significant distortions carried over from
the former non-market economy system.

Legal certainty and stability is provided by bankruptcy
and property laws.

5.

Currency exchanges are carried out at the market rate.

(58) Following the initiation of

the present

investigation, a
sample of six Chinese producers/groups of producers
(‘entities’) was selected, all of which had claimed MET
pursuant to Article 2(7)(b) of the basic Regulation and
replied to the MET claim form within the given deadlines.
Pursuant to their claims they were verified on spot. It is the
Commission's consistent practice to examine whether a
group of related companies as a whole fulfils the conditions
for MET. Therefore, where a subsidiary or any other
company related to the applicant is a producer and/or an
exporter and/or a trader of a product concerned,
the
company was invited to complete a separate MET claim
form.

(60)

In many cases the documentation of the companies was not
reliable. Some companies presented different versions of
the same document (e.g. corrected business licences, two
different sets of Articles of Association with different
shareholders, Articles of Association that have never been
signed). The local authorities not only accepted such a
situation but even issued corresponding certificates and
documents without any substantiation. Such unreliable
documents made the legal
the companies
uncertain and suggested that state influence has not been
eliminated.

status of

(61)

In some other cases, there were ambiguities regarding the
business license. In one case, initially a business license was
produced which specified neither the start nor the end date
of operation. At a later stage, a version was produced which
contained only an end-date. This casts a general doubt on
the reliability of documents produced.

(62) After the Commission's findings had been disclosed, the
companies generally pointed out
they were privately
owned. However, contrary to their claims, state interference
was also established where there was no or only partial
state ownership. As demonstrated above, other elements led
to the conclusion that on balance there was significant state
interference.

(63) The comments received were not such as to alter the
Commission's findings. It was concluded that the compa-
nies were subject to significant State interference.

Criterion 2 — Firms have one clear set of independently audited
accounting records

(64) A number of irregularities were found with regard to the
accounting practices of the investigated companies. For all
entities it was found that the accounts were not kept in a
coherent manner.

(59) Pursuant to on-spot-verifications at the premises of the six
sampled entities, it was decided that all their MET claims
had to be rejected. This was due to the fact that none of the
entities fulfilled criteria 1, 2, and 3 (see analysis below). The
investigation revealed that all entities fulfil criteria 4 and 5.
This means
the bankruptcy and property laws
guarantee stability and legal certainty and that the exchange
rate conversions are carried out at market rates.

that

investment).

(65) For example, some irregularities were established with
regard to the manner in which companies increased their
registered capital (the increase of capital did not reflect any
the
In some cases
actual
company's equity was never deposited in cash or in kind.
In some other cases, bad debts were not booked in
accordance with international accounting standards. The
financial statements of some companies did not reflect the
registered capital as stated in the company documents like
Articles of Association or Business Licence. Irregularities

the value of

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established with regard to depreciation (some
were
companies ceased to depreciate some assets) or land-use
rights, which were not booked properly.

reply to the exporter concerned. However, none of the
comments received was such as to alter the findings on
market economy treatment.

(66) Some entities claimed that

the irregularities

in the
accounting system should not have had an impact on the
decision on MET to such an extent. According to those
claims, the irregularities in the accounting system, even if
numerous, are not sufficient in themselves to lead to the
conclusion that criterion 2 is not met. However, even
assuming that criterion 2 could be deemed to be met if
accounting irregularities could be qualified as minor, in this
particular case, as explained in the previous paragraphs, the
irregularities were not minor.

(67)

It was also claimed in some cases that the accounts were
audited by external, hence independent, auditors. However,
the auditors did not point out any of the problems that
were found during the investigation and were thus not in
line with international accounting standards. Therefore, the
entities concerned could not demonstrate that they had one
clear set of basic accounting records which were indepen-
dently audited in line with international standards.

Criterion 3 — No distortions carried over from the non-market
economy system

(68) There were also irregularities with regard to land-use
contracts. In many cases no proof of payment for land-use
rights could be presented, which, given the fact that land is
State-owned, exposes those entities to significant state
influence. Some entities failed to present reliable evidence
on the acquisition and transfer of shares. In some cases the
revaluation of assets had been clearly arbitrary. The
irregularities of the privatisation process shed doubts upon
all subsequent transfers of shares and seem to be the source
of power for local authorities to interfere with the operation
of some of the companies.

8.3.

Individual treatment (IT)

(72) Pursuant

to Article 2(7)(a) of

the basic Regulation, a
country-wide duty, if any, is established for countries falling
under that Article, except in those cases where companies
are able to demonstrate that they meet all criteria set out in
Article 9(5) of the basic Regulation.

(73) The nature of State interference

established for all
companies affects their activity as a whole. Therefore, it
cannot be excluded that such an influence would impact on
the determination of export prices and quantities as well as
the determination of the terms of sale and other related
aspects regarding export activity.

(74) Equally,

it

the exports

the totality of

is recalled that

the six investigated entities
covered almost
into the
Community. Given this concentration, the relatively small
number of market operators and the significant level of
state interference established with regard to all entities
investigated, it cannot be excluded that state interference
will be used to circumvent measures if individual exporters
are given different duty rates.

(75) Consequently, the companies could not demonstrate that
they fulfilled criteria (b) and (e), as set out in Article 9 (5) of
the basic Regulation.

8.4. Determination of normal value for all exporting

producers not granted MET

8.4.1. Analogue country

(69) Consequently, the irregularities concerning the privatisation
process still have an impact on the current situation and
operations of the companies, since the production costs
and the value of assets are subject to significant distortions
carried over from the former non-market economy system.

(76) According to Article 2(7) of the basic Regulation, normal
value for companies to which MET could not be granted
was established on the basis of the prices or constructed
value in an analogue country.

(70) The Advisory Committee was consulted and the parties
directly concerned were informed accordingly. The Com-
munity industry was given the opportunity to comment,
but no comments were received concerning the MET
determination.

(77)

(71) The Commission received comments

from the MET
applicants. Those comments have been addressed where
appropriate, either in the analysis above or in an individual

In notice 1, the Commission indicated its intention to use
the USA as an appropriate analogue country for the
purpose of establishing normal value for the PRC and
Belarus, and interested parties were invited to comment.
One interested party objected to this proposal, indicating
that Turkey would be a more appropriate choice and
pointing out that, according to Article 2(7) of the basic
Regulation, where appropriate, a market economy third
country which is subject to the same investigation shall be
used. It was further noted that Turkey was used as an
analogue country for Ukraine in the original investigation.

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(78) However, the institutions maintained their view that the
USA was a more appropriate choice of analogue country
for the purposes of the present new investigation, in view
of the arguments set out below.

(82) Furthermore, the production process and the access to raw
materials are comparable in the USA and the PRC, the latter
not appearing to enjoy any discernible natural advantage in
the production and sale of the product concerned.

(79) Firstly,

the Community institutions would agree,

in
principle, that in a review it would be logical to take as a
starting point to use the same analogue country as in the
original investigation (although even in a review there may
be valid reasons for a change). However, in as far as the PRC
and Belarus are concerned, this regulation is not based on a
review, but on a new investigation. Such considerations
there do not apply. Moreover, as explained elsewhere in this
Regulation, pursuant to the WTO beef and rice (Mexico)
Appellate Body report, (1) those Turkish companies who
were found to have a zero-duty in the original investigation
to the present
were not
proceeding. The institutions therefore do not have a full
picture of normal value on the Turkish market. In addition,
certain distortions appear to exist on the Turkish market. In
particular, the market share of imports in Turkey was very
low, at 3,3 %, whereas the market penetration of imports in
the USA was at 39 %. Such low market share of imports
may point to some impediment in international competi-
tion on the Turkish market, despite that fact that there are
around 15 known producers in Turkey.

considered to be

subject

(80) On the other hand, the USA is a large market for welded
tubes in general and for the product concerned, of a similar
size as the Community. The degree of competition appears
to be significant. There appear
to be more than 15
domestic producers
in competition with each other,
accounting for a significant level of domestic sales when
compared to Chinese exports to the Community.

(81)

In addition, there are significant imports into the USA from
third countries, notwithstanding the existence of anti-
dumping measures during the IP on imports from several
countries (Taiwan, Mexico, Turkey, Thailand, Brazil, India,
and Korea). During the IP, imports were estimated to cover
more than a third of the US consumption, and originated,
for ca. three quarters of the volume of
imports, from
countries which were subject to 0 % customs duties and not
subject to anti-dumping duties. In fact, the IP corresponds
to a period where the USA authorities were investigating
the Chinese exports for the alleged injurious dumping
practices, which led in January 2008 to the imposition of
measures (later amended in April 2008 and ranging from
69,2 % to 85,55 %) (2). These measures thus have had no
discernible impact on the aforementioned analysis, but
rather point to the price levels in the USA during the IP
which could well be artificially suppressed or depressed due
to the impact of the dumped Chinese imports.

(1) Appellate Body report on Mexico — Definitive Anti-Dumping Measures
on Beef and Rice: Complaint with Respect to Rice (WT/DS295/AB/R) and
the Panel report (WT/DS295/R), as modified by the Appellate Body
report.

(2) Federal Register/Vol. 73, No 10/Tuesday, January 15, 2008/Notices,
p. 2456; Federal Register/Vol. 73, No 80/Thursday, April 24, 2008/
Notices, p. 22130.

(83) Comparing Turkey and the USA on that basis, it has been
concluded that the USA is a more appropriate analogue
country for the PRC and Belarus.

(84) Questionnaires were sent to all known producers in the
USA. The Commission received a reply from a significant
producer. Both the production and the domestic sales of the
cooperating producer were representative for the purpose
of establishing normal value.

8.4.2. Determination of normal value in the analogue country

(85) Following the choice of USA as an analogue country and
pursuant to Article 2(7)(a) of the basic Regulation, normal
value was established on the basis of information received
from the cooperating producer in the analogue country, i.e.
on the basis of prices paid or payable, in accordance with
the methodology set out in recitals 32 to 37 above.

(86) The domestic sales of the producer of the like product were
found to be representative compared to the product
concerned exported to the Community by the exporting
producers in the PRC. Furthermore, its domestic sales were
considered to be made in the ordinary course of trade.

8.5.

Export price

(87) Where export sales to the Community were made directly
to independent customers, the export prices were estab-
lished on the basis of the prices actually paid or payable for
the product concerned in accordance with Article 2(8) of
the basic Regulation.

(88) Where export sales to the Community were made through
unrelated trading companies, export prices were established
on the basis of the prices of the product when sold for
export to the trading companies i.e. to an unrelated buyer,
by the producers concerned in accordance with Article 2(8)
of the basic Regulation.

8.6.

Comparison

(89) 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

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for differences affecting prices and price comparability in
accordance with Article 2(10) of
the basic Regulation.
Appropriate adjustments concerning transport and insur-
ance, credit, commission and bank charges were granted
where warranted. Due adjustments were also made for
physical differences, wherever necessary.

and covers the transportation, handling and insurance
expenses from Belarus to the EU. Throughout the process
of manufacturing, the German importer remains the owner
of the product concerned exported from Belarus. Due to
the fact that under the tolling agreement there is no actual
export price, it had to be constructed.

8.7. Determination of Dumping

(90)

In order to calculate the country-wide dumping margin
applicable to all exporters in the PRC, the Commission first
established the level of cooperation. A comparison was
made between the total imports of the product concerned
originating in the PRC calculated on the basis of Eurostat
and the volume of exports as reported in the questionnaire
replies
in the PRC. As
mentioned above in recital 54 there was a discrepancy
between the quantity of exports as reported by Eurostat and
the quantity declared by the exporting producers in their
questionnaire replies (180 KT as compared to 216 KT). On
this basis it was established that the level of cooperation
was very high.

submitted by the exporters

(91) The dumping margin was consequently calculated as
follows. The export price was calculated on the basis of
the detailed information provided by the cooperating
exporters in the questionnaire replies, with the exception
of one entity, the reply of which was not complete and
made impossible the comparison of the physical character-
istics of the products. The export price was compared to
the normal value established in the analogue country.

(92) The country-wide level of dumping was established at

130,8 % of the CIF Community frontier price.

9.

BELARUS

9.1.

General remarks

(93) According to Article 2(7)(a) of the basic Regulation, Belarus
is not considered a market-economy country. Therefore the
normal value in respect of Belarusian exports to the
Community was determined on the basis of data obtained
from a producer in a market-economy third country.

(94) During the IP, imports from Belarus totalled around 29 KT
and had thus a market share of about 2,3 %. The only
known Belarusian manufacturer cooperated with the
investigation and sent a questionnaire reply. It works under
a tolling agreement with two importers in Germany and
Switzerland. Only the EU-based importer cooperated with
the investigation.

(95) Under the tolling agreement the German importer, who is
an independent entity from the Belarusian manufacturer,
supplies the latter with the raw material and covers all
expenses linked to their imports into Belarus (transporta-
tion, handling and insurance costs). It then pays a tolling fee

(96) A comparison was made between the total imports of the
product concerned originating in Belarus calculated on the
basis of Eurostat (using CN codes ex 7306 30 41, ex 7306
30 49,
and the
ex 7306 30 72 and ex 7306 30 77)
volume of exports as reported in the questionnaire replies
submitted by the cooperating manufacturer and the
aforementioned German operator. On this basis it was
established that the level of cooperation was low, i.e. 30 %
of the overall Belarusian exports to the Community.

(97) There were no requests for individual treatment pursuant to

Article 9(5) of the basic Regulation.

9.2.

Normal value

(98) Normal value was established on the basis of the prices or
constructed value in an analogue country, pursuant to
Article 2(7) of the basic Regulation.

9.2.1. Analogue country

(99) As mentioned above in the part concerning the PRC,
notice 1 indicated USA as an appropriate analogue country
for the purpose of establishing normal value for Belarus as
well as the PRC. The main reasons justifying the choice of
the USA, mentioned above in the analysis of the PRC, also
apply to Belarus. Two parties opposed the choice of the
USA as an analogue country and suggested Turkey instead.
The main reasons that led the Commission to choose the
USA over Turkey have been outlined in recitals 76 to 84
above.

(100) Consequently, the methodology detailed in recitals 32 to
37 has been applied to determine the normal value.

9.3.

Export price

(101) The data furnished by the German importer only related to
a part of the products originating in Belarus and exported
to the Community. No data were furnished for the other,
very substantial part of those imports. Therefore, use had
to be made, with regard to that latter part to the best facts
available pursuant to Article 18 of the basic Regulation.

(102) Two main sources of information were analysed. Eurostat
data was not considered adequate. Firstly,
it contained
tolling transactions with the German operator for which
there was no export price. Secondly,
it contained also
tolling transactions with the Swiss company which did not
cooperate. It should also be stressed that, according to the
claim by certain parties, and according to the website of the

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Interpipe Group, the Ukrainian company which is the
subject of the Ukraine interim review, this group is related
both to the Swiss company and to the Belarusian company.
In the absence of any cooperation from the Swiss company,
no export prices could be established for the transactions
made by it.

but replies were received only from two, therefore sampling
was no longer necessary.

10.2. Normal value

(103) On the other hand, the detailed type-by-type data from
transactions associated with the aforementioned German
operator, including the operator's cost and expenses, were
available. This allowed the investigating authority to
establish the export price on a type-by-type basis, as
explained below. This was therefore considered the best
information available to the Commission.

(109) For both exporting producers, domestic sales of

the
product concerned were representative as defined in
recital 32. In accordance with the methodology described
in recitals 33 et seq., normal value was based on prices paid
or payable, in the ordinary course of trade, by independent
customers in the Russian Federation.

(104) The export price was constructed on the basis of the price
of the product concerned sold to the first independent
customer of the cooperating German importer. In this
specific case, due to the tolling agreement, certain
adjustments had to be made in order to establish a reliable
export price, at the Community frontier level. Adjustments
incurred between the
were thus made for all costs
Community border and the first independent customer of
the German importer. These included SG&A and profit of
the German importer, as well as transportation, insurance
and custom fees within the Community.

9.4.

Comparison

(105) 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 allowances in the form of adjustments were
made for differences affecting prices and price compar-
ability in accordance with Article 2(10) of
the basic
Regulation. Appropriate adjustments concerning physical
characteristics,
insurance costs and customs
charges were granted where they were found to be justified,
accurate and supported by verified evidence.

transport,

(110) With regard to manufacturing costs, and in particular
energy costs, as far as gas is concerned, it was examined
whether the gas prices paid by the exporting producers
reasonably reflected the costs associated with the produc-
tion and distribution of gas.

(111) It was found that the domestic gas price paid by the
exporting producers was around one fourth of the export
price of natural gas from Russia. In this regard, all available
data indicates that domestic gas prices in Russia are
regulated prices, which are far below market prices paid in
unregulated markets for natural gas. Therefore, since gas
costs were not
reasonably reflected in the exporting
producers' records as provided for in Article 2(5) of the
basic Regulation, they had to be adjusted accordingly. In the
absence of any sufficiently representative, undistorted gas
prices relating to the Russian domestic market,
it was
considered appropriate to base the adjustment, in accor-
dance with Article 2(5), on the basis of information from
other representative markets. The adjusted price was based
on the average price of Russian gas when sold for export at
the German/Czech border (Waidhaus), adjusted for local
distribution costs. Waidhaus, being the main hub for
Russian gas sales to the EU, which is both the largest
market for the Russian gas and has prices reasonably
reflecting costs, can be considered a representative market
within the meaning of Article 2(5) of the basic Regulation.

9.5. Determination of dumping

(106) On this basis the country-wide level of dumping was
established at 92,4 % of the CIF Community frontier price.

(112) For those product types where the normal value was
constructed, as described above, the construction was done
on the basis of the manufacturing costs of the exported
types after the adjustment for the gas cost.

10.

RUSSIA

10.1. General remarks

10.3. Export price

(107) The volume of Russian imports amounted to around 36

KT, corresponding to a market share of 3,3 % in the IP.

(108) Due to the apparent large number of exporting producers,
a sample was initially selected. In that context, four groups
were notified to reply to the Commission's questionnaire,

(113) For those cases where exports to the Community were
made via a related importer located in the Community, a
constructed export price has been established pursuant to
Article 2(9) of the basic Regulation. In cases where exports
were made to independent customers in the Community,
via a related trader located in the Russian Federation,
export prices were based on prices paid or payable by
independent customers in the Community.

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10.4. Comparison

(114) Appropriate adjustments concerning credit, transport costs
and ancillary charges were made where they were found to
be warranted and supported by verified evidence.

10.5. Dumping margin

(115) The comparison between the normal value and the export
price showed the existence of dumping. After disclosure,
comments were submitted by both Russian exporting
producers.
In the first case, substantiated comments,
dealing in particular with adjustments on constructed
normal values,
led to a minor change of the dumping
margin, which will have no impact on the anti-dumping
duty, as the revised dumping margin is still above the injury
margin. In the second case, the interested party pointed to a
clerical mistake leading to the double counting of the
SG&A; this mistake has been corrected. On that basis, the
dumping margins (per group of exporting producer)
expressed as a percentage of the CIF import price at the
Community border, duty unpaid, are the following:

— TMK Group (Seversky Pipe Plant Open Joint Stock
Company and Joint Stock Company Taganrog
Metallurgical Works) — 22,7 %,

— OMK Group (Open Joint Stock Company Vyksa Steel
Works and Joint Stock Company Almetjvesk Pipe
Plant) — 10,1 %.

10.6. Conclusions on dumping regarding Russia

(116) Since the level of cooperation was high (more than 90 % of
the exports of the product concerned from the Russian
Federation to the Community, as reported in Eurostat), the
residual dumping margin applicable to all other exporters
in the Russian Federation was set at the same level as the
one established for the cooperating exporting producer
TMK Group, namely 22,7 %.

D.
LIKELIHOOD OF A CONTINUATION AND/OR
RECURRENCE OF DUMPING ACCORDING TO ARTI-
CLE 11(2) OF THE BASIC REGULATION; ADEQUACY OF
THE LEVEL OF THE MESURE AS REGARDS DUMPING
ACCORDING TO ARTICLE 11(3) OF THE BASIC
REGULATION

1.

GENERAL

it was examined whether there were changed circumstances
since the original investigation regarding dumping which
could be considered to be of a lasting nature.

2.

THAILAND

2.1.

Preliminary remarks

(119) Unlike in the original investigation there were no exports
the product concerned from Thailand in the IP
of
according to Eurostat data. The
cooperating
producer declared no export sales to the Community,
and no other exporting operators cooperated. Thai export
statistics did suggest that there were some Thai exports
recorded in the IP that could relate also in part to the
product concerned but these were in any event negligible in
terms of volume and would thus not have been
representative.

single

(120) The cooperation level in the current review was very low,
with only one Thai producer making itself known in the
course of the proceeding. According to the complaint and
as confirmed from publicly available data,
there were
however at least twelve other producers of the product
these
concerned in Thailand during the IP. None of
cooperated in the investigation and as a consequence the
cooperation level corresponded to less than 10 % of the
total estimated Thai production of the product concerned.

2.2. Dumping of imports during the investigation

period

(121) The single cooperating Thai producer had no exports to the
Community during the IP. Considering that there were no
exports of
the product concerned to the Community
originating in Thailand, there could be no continuation of
dumping. It follows that the analysis in this case has to be
based on the likelihood of recurrence of dumping should
measures be terminated.

2.3. Development of imports should measures be

repealed

2.3.1. Preliminary remarks

(122) As outlined in recital 120, the investigation has shown that
there were at
the product
concerned in Thailand during the IP and only one
cooperated in the investigation.

thirteen producers of

least

(117) In accordance with Article 11(2) of the basic Regulation, it
was examined whether dumping was likely to continue or
recur upon a possible expiry of the measures in force
against Thailand, Turkey and the Ukraine.

(118) Further,

in accordance with Article 11(3) of the basic
Regulation, for Turkey and for the one Ukrainian company,

(123) It was examined to what extent data from the one
cooperating Thai producer could be used for the purpose
of analysing the overall situation pertaining to the likely
development of exports from Thailand as well as, more
specifically, to serve as a benchmark in terms of indicators
of domestic and export prices, costs, production capacities
and capacity utilisation.

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(124) In this respect a number of deficiencies were noted in
relation to the data provided by the cooperating company.
Firstly, the company was unable to reconcile domestic and
export prices with actual transactions and with its audited
accounts for the IP. Furthermore the company could not
provide a breakdown of the cost of production by product
control number, as defined in the questionnaires sent to
interested parties (‘PCN’). The producer was only able to
provide the cost of production as the average of the cost of
production broken down between black and galvanised of
all the PCNs produced. Evidence of the PCNs' cost structure
from different producers in other countries concerned by
the investigation including the Community, showed that
there indeed is a large variation in the cost of production
per PCN. This also applies to the specific product types
produced and sold by the Thai company in question. Under
these circumstances, a cost breakdown that does not allow
a comparison per PCN cannot be considered sufficient for
the purpose of determining domestic normal value.

(125) Even in the event that such data could have been obtained
it should be borne in mind that the cooperating producer
corresponded to less than 10 % of the total production of
the product concerned in Thailand meaning that the data in
any event would have to be complemented by other
statistical material in order to assess the representativity for
the purpose of the country wide assessment.

(126) The company was notified of the Commission's intention
to apply Article 18 of
the basic Regulation and the
reasons for which this was considered necessary within a
reasonable period of time, due account being taken of the
time-limits of the investigation. Comments were received,
thoroughly analysed and replied to in detail. None
of explanations given by the company was considered to
be satisfactory as to allow the Commission to avoid the
application of best facts available to the areas highlighted
above.

2.3.2. Production, unused capacities and likelihood that these
capacities would be directed to the Community

(130) The complaint shows a spare capacity in Thailand of more
than 370 KT, accounting for almost 30 % of the total
capacity. This spare capacity corresponds to more than
25 % of the total Community consumption (as defined in
recital 231) which could be directed toward the Commu-
nity market.

(131) The level of spare capacity was even more pronounced in
the cooperating producer, which represented less than
10 % of
the Thai total production in the IP. For this
producer, spare capacities of above 50 % were found in the
IP.

(132) Together, these factors point to the existence of significant
spare capacity in Thailand.
In the absence of evidence
showing that this capacity could be absorbed by increased
domestic sales, sales to other
the
production of products other than the product concerned,
it is concluded that should measures expire, such spare
capacities would in all likelihood be directed towards the
Community, not
the Community's
least because of
attractiveness as an export market.

third countries or

(133) Considering that the Community market is one of the
biggest in the world, its sheer size makes it attractive to any
Thai exporting producer of the product concerned. The
potential importance of the Community market is further
enhanced by the fact that the US which is another major
market, has measures in place against
imports from
Thailand.

(134) Taken together with the relatively attractive price level in
the Community, where well developed distribution chan-
nels exist, it is considered that, in the absence of measures,
there would be a clear economic incentive for a shift of
exports away from major third markets such as the US and
towards the Community.

(127) Consequently, information on domestic and export prices
to other countries for Thai exporters has been based on
best facts available including the complaint and publicly
available information.

(135) Overall, under these circumstances it is considered that any
increase in the current capacity utilisation is likely to be
directed towards exports, and specifically to the Commu-
nity market.

(128) Conversely, data pertaining to stocks, production level and
capacity that had been provided by the company could be
verified. This information in conjunction with data from
the complaint could therefore be used to establish the
production volume and capacity of all exporting producers
in Thailand.

2.3.3. Likely price levels

(136) A number of factors point to the likelihood that Thai
export prices to the Community would be dumped.

(129) In view of the above, the following considerations were
taken into account when assessing the likely impact should
measures be repealed.

(137) To start with, exports to major third country markets
appear to have been made at dumped prices. This was
confirmed by the existence of US anti-dumping measures
in the range of 15 % for Thai exports of welded tubes. This
points to a more general pattern of behaviour based on
dumping to large third markets. The fact that Thai exports

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to the Community stopped after measures were imposed
appears to reinforce the idea that Thai exporting producers
would be unable or unwilling to sell at non-dumped price
levels.

dumping margin for the exporting producers in Turkey was
established on the basis of a comparison of a weighted
average normal value with a weighted average export price.

(138) In addition, for the product under consideration, which is
in general rather homogeneous, would-be Thai sellers
would be likely to provide products at the prevailing prices
of other imports in the Community. As has been concluded
in the sections above, the import prices of other exporting
countries are generally low. When considering that
potential export prices of Thai producing exporters are
likely to have to mirror
these low prices and when
considering the cost structure of the product concerned,
which is heavily based on steel coil and zinc prices that
have seen a significant increases across the world, it would
be likely that export prices would be dumped.

2.4.

Conclusion

(139) A significant amount of Thai exports would therefore be
likely to be sold in the Community at dumped prices
should measures be allowed to lapse.

3.

TURKEY (i): GENERAL DUMPING AND ARTICLE 11(2)
ASPECTS

3.1.

General issues

(140) The complainant claimed that the dumped imports from
Turkey would likely lead to a very serious injury to the
Community industry, should the measures be allowed to
lapse. In the context of the interim review (see below) the
complainant
should be
adjusted upwards due to the allegedly increased dumping
and injury levels.

submitted that

the measures

(141) Statistical data showed that imports from Turkey amounted
to 110 KT, representing almost 9 % of the Community
consumption (as defined in recital 231). There was a
discrepancy between the amounts reported by Eurostat and
those reported by the companies (138 KT). Reference is
made to comments made under recital 55.

It differs

(142) The general methodology used to calculate dumping (set
out in recitals 31 to 46 above) has been applied to all
from the
in Turkey.
exporting producers
methodology applied in the original investigation, which
was used exceptionally for
some exporters due to
currency fluctuations during the original
significant
investigation period. Due to these fluctuations,
it was
considered more appropriate in the original investigation
to make a comparison between the monthly weighted
average normal value and the monthly weighted average
export price. However, these exceptional circumstances
were absent in the current investigation and the standard
methodology, as described in recitals 31 to 46 above, was
in the current investigation, the
applied instead. Thus,

(143) The following companies: Cayirova Boru Sanayi ve Ticaret
AS, Istanbul, Yücel Boru ve Profil Endüstrisi AS, Istanbul,
and Noksel Çelik Boru Sanayi AŞ, Ankara, each of whose
individual dumping margin in the original
investigation
was zero, were initially investigated in the review and
chosen as part of the sample. However, although Arti-
cle 9(3) of the basic Regulation provides that companies
with a zero or de minimis margin in the original
it does not
investigation may be included in a review,
such
the Community institutions
oblige
companies. Moreover, after the adoption of
the basic
in the case Mexico-Beef and Rice, the WTO
Regulation,
dispute settlement body has
interpreted the relevant
provision of
the ADA as prohibiting reviews of such
companies. Therefore, the Community institutions con-
cluded that it is appropriate not to use data gathered during
the review concerning these three companies. Conse-
quently, these companies were excluded from the sample.
Moreover, in this Regulation, it is assumed that none of
these companies are currently engaged in dumping.

to include

3.2.

Sampling (exporters) and cooperation

(144) Sampling forms were sent out to 15 potential producers/
exporters in Turkey and 8 of
them responded. Three
companies/groups, which account for 41 % of the total
Turkish imports into the Community, were selected for the
sample.

3.3.

Normal value

(145) As mentioned above

the normal value was

either
constructed or established on the basis of prices paid or
payable, in the ordinary course of trade, by independent
customers in Turkey. Some of the adjustments claimed by
the exporting producers have been rejected or amended.

3.3.1. Credit costs

(146) Following the disclosure of

the Commission's findings
some of the exporters claimed that credit costs should be
established on the basis of the actual payment terms agreed
between the producers and their customers. These claims
were accepted.

3.3.2. Duty drawback

(147) Certain companies claimed an allowance for duty draw-
backs on the grounds that import charges were levied on
the raw material used for the like product when intended
for consumption in Turkey but were refunded when the
product was sold for export to the Community.

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(148) In one case, the amount claimed was found to be higher
than the amount of duty levied on materials physically
incorporated in the like product sold in the domestic
market. It was established that the duty burden was less
because that company/group of companies used in their
domestic production not only coils imported with a duty
but also coils imported with 0 % duty rate, as well as locally
purchased coils. Consequently,
allowances were
adjusted accordingly.

the

(149) Another company for which the allowance was originally
rejected claimed that it should have been allowed as their
domestically sold products did bear the burden of the duty.
The claim was partly accepted.

(150) In this context, it was claimed by the Community industry
that this would be a countervailable subsidy. However, it
has to be noted that the present proceeding is an anti-
dumping investigation. Therefore, this allegation has not
been analysed.

3.3.3. Selling, general and administrative expenses (SG&A)

(151) One of the Turkish exporters, for those of its sales for
which the normal value had to be constructed, claimed
negative SG&A. This was due to the fact that their foreign
currency exchange gains were substantial and higher than
the total amount of SG&A. In this case those financial gains
were disregarded. Only financial costs related to the
companies'
loans were taken into account. The SG&A
were thus adjusted accordingly.

3.4.

Export price

(152) In all cases the product concerned was sold to independent
customers in the Community. Thus, for all exporters, the
export price was based on the prices paid or payable by
unrelated customers
to
Article 2(8) of the basic Regulation.

in the Community, pursuant

3.5.

Comparison

(153) The normal value and export price were compared on an
ex-works basis. For
the purpose of ensuring a fair
comparison, due allowance in the form of adjustments
was made for differences affecting price comparability in
accordance with Article 2(10) of the basic Regulation.
Accordingly, adjustments were made for rebates, discounts,
transport, handling, charging costs, bank charges and
and
insurance
supported by verified evidence.

costs, where

appropriate

and credit

3.6. Dumping during the investigation period

(154) The dumping margin for the exporting producers in Turkey
was established on the basis of a comparison of a weighted
average normal value with a weighted average export price,
in accordance with Article 2(11) and (12) of the basic
Regulation.

(155) The comparison of weighted average export prices with a
weighted average normal value showed the following
dumping margins:

— Erbosan Erciyas Boru Sanayii ve Ticaret AŞ, Kayseri

(‘Erbosan’) 0,5 %,

— Borusan Mannesmann Boru Sanayi ve Ticaret AŞ,

Istanbul (‘Borusan’) 1,4 %,

— Toscelik Profil ve Sac Endustrisi AS,

Iskenderun

(‘Toscelik’) 0,9 %.

(156) Two companies declared their intention to cooperate but
were not included in the sample. Given that the dumping
margins determined for all the companies in the sample
were de minimis and the cooperation in the investigation
was very high, the countrywide dumping margin was also
considered to be de minimis.

(157) Therefore, it is concluded that there was no continuation of
dumping in case of Turkey. The further analysis in the
framework of Article 11(3) of the basic Regulation will
therefore solely concentrate on the likelihood of recurrence
of dumping.

3.7.

Likelihood analysis

3.7.1. General remarks

(158) The EU market is undeniably a very attractive market for
the Turkish producers. This is due to a number of factors,
the first of which is size. Size pertains not only to the large
consumption, but also to the fact that most Turkish exports
to other third country markets are fragmented — i.e. small
quantities being shipped to many different destinations. In
that sense the Community is more attractive as a single
destination with large absorption capacity.

(159) Geographical proximity is another important factor, as
transportation costs for these products are not insignif-
icant.

(160) The Community is also a traditional market for Turkish
exporters who have well established distribution channels
and a wide range of clients.

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3.7.2. Share of exports to the EU and pricing practices

3.7.5. Price factors

(161) Despite the measures

the

in force exports

sampled companies

from Turkey
continued throughout the IP. However, no dumping was
found for any of the sampled companies. It should be noted
that
and the non-sampled
companies that cooperated in the current reviews as well
as those whose margin in the original investigation was
found to be zero or de minimis cover around 90 % of total
Turkish exports to the Community. The market for these
Turkish exports appears to be stable and there is no
indication that the companies would change their pricing
strategies. Furthermore, the three sampled companies as
well as those three whose dumping margin in the original
investigation was found to be zero or de minimis are by far
the biggest players on the market and price leaders.
Therefore, it is likely that any other company would rather
follow their pricing practices. It thus appears unlikely that
dumping would recur for Turkey. Nevertheless, for the sake
of completeness, the factors below were also examined.

(164) The price differences between Turkish exports to the
Community and to third countries have not been
significant and depended on the company concerned.
After further analysis subsequent to the disclosure, it was
established that the Turkish export prices to third countries
were slightly higher than those to the Community. Given
that no dumping was established for Turkey in respect of
their exports to the Community, it can be assumed that
generally exports to third countries were not made at
dumped prices. There are also no other indications that
Turkish exporters would change their price strategy.
the
Nothing in the circumstances of
situation of the exporters as a whole showed that they
were likely to change their overall market behaviour.

the market or

(165) In view of the foregoing it is concluded that dumping is not

likely to recur for imports originating in Turkey.

3.7.3. Unused capacity in Turkey

4.

TURKEY (ii): ARTICLE 11(3) ASPECTS

(162) The investigation established a total spare capacity of about
143 000 tonnes in the IP for the cooperating producers,
including sampled and non-sampled companies. This
quantity would correspond to around 10 % of the total
Community consumption (as defined in recital 231) of
welded tubes.

(166) The complainant claimed that the measures in force did not
prevent the continuation of dumped imports and that the
level of measures was no longer sufficient to counteract the
injurious dumping by imports of the product concerned
from Turkey.

3.7.4. Possible absorption capacity of third country markets

export quantities

(163) The largest third-country market for the product concerned
(the USA) has antidumping measures in place for Turkish
exports ranging up to 14,7 %. This would imply that, other
things being equal, the USA would not be likely to absorb
significant additional
from Turkey.
However, the fact that the exports to third countries are
fragmented with shipments to many different destinations
appears to indicate that the Turkish exporters are actively in
the process of exploring new markets, and it is therefore
not unlikely that third country markets could absorb some
of the capacities. In addition, taking into account the actual
ratio of Turkish exports to the Community and to third
countries (70/30),
the same ratio can reasonably be
expected if the currently unused capacities were sold. This
into the
would then amount
Community of around 100 000 tonnes, which would
correspond to an additional market share of 7 %, based on
the IP consumption figures. It has to be noted, however,
that this would be the maximum theoretical increase of
sales based on the assumption that the spare capacity is
used at the rate of 100 %, which is rare in such industry.

to an additional

import

4.1.

Lasting nature of changed circumstances

(167) As found above, imports from Turkey no longer continued
to be made at dumped prices. Indeed, all levels of dumping
established in the present
investigation are below the
de minimis threshold. In particular, this is true for three
companies, which originally were found to be dumping.

(168) The Community market will, as mentioned, most likely
remain an attractive market for the Turkish exporters in
terms of prices as well as well-established and long-lasting
commercial relations. At the same time, Turkish producers
sell significant volumes on their domestic market. These
quantities are sold at competitive and relatively low prices,
when compared to other major markets, including the EU
and USA. Indeed, domestic prices and subsequently normal
values were at such levels that dumping in respect to
exports to the Community has disappeared entirely.

(169) The investigation has not detected any other circumstances
which would suggest that the price and dumping are likely
the
to change if measures are allowed to lapse. For
companies that have been subject to zero-duties since the

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investigation,

the considerations based on the
original
Mexico Beef and Rice report, as explained above in recital 143
will continue to apply. As regards the other companies, the
present investigation indeed showed that circumstances
have changed, as they were found not be dumping any
more. In addition, no compelling reasons are at hand that
would indicate that such changed circumstances are not of
a lasting nature. Moreover, all investigated companies made
exports to third countries in 2006 and the IP at prices
higher than export prices to the Community. In the same
periods, exports to the Community were made at prices
exceeding domestic sale prices. This clearly indicates that
the changed circumstances (exports no longer dumped) are
of a lasting nature.

satisfactory as to allow the Commission to avoid the
application of best facts available to the area highlighted
below.

(176) Following the disclosure, the complainant claimed that the
case should be terminated as the cooperation of the sole
Ukrainian producer was so poor that the Commission had
to use Article 18 of the basic Regulation to adjust the cost
it should be noted that
of manufacturing. However,
Article 18 was applied in order to allow the Commission
to complete the information submitted by the sole
Ukrainian cooperating producer by using the best
information available. The claim was therefore rejected.

4.2.

Conclusion

(170) It can therefore be concluded that, should the measures be
allowed to lapse, the exports to the Community will not be
likely to be made at dumped prices. Also, the changed
circumstances with respect to the original
investigation
lack of dumping can reasonably be
regarding the
considered to be of a lasting nature.

(171) In view of

the foregoing the proceeding concerning

imports originating in Turkey should be terminated.

5.

UKRAINE (i): ARTICLE 11(3) ASPECTS

5.1.

General remarks

(172) The Interpipe Group alleged that a comparison of normal
value based on its own costs/domestic prices and its export
prices to a third country market comparable to the EU,
would lead to a reduction of dumping significantly below
the level of the current measures. Therefore, it is alleged
that the continued imposition of the measure at its current
level was no longer necessary to offset dumping.

(173) During the course of the investigation, the company was
notified of the Commission's intention to apply Article 18
of the basic Regulation. This was because the company did
not provide cost of production data in the product type
(product control number (PCN))
format required. The
company only submitted cost of production data as an
average of all the product types produced in a specific
workshop.

(174) Examination of

the facts

the cost of
production data submitted could not be accepted by the
Commission as they would not permit a proper compar-
ison with domestic market selling prices by product type.

showed that

(175) The company was notified of the reasons why this was
necessary within a reasonable period of time as required by
Article 18(4) of the basic Regulation. Comments were
received, analysed and replied to in detail. None of the
explanations given by the company was considered to be

5.2.

Normal value

(177) The Commission examined whether the domestic sales
could be considered as being made in the ordinary course
of trade pursuant to Article 2(4) of the basic Regulation. To
this end, the cost of production of the product produced
and sold by the cooperating exporting producers on the
domestic market was examined.

(178) OJSC Interpipe Novomoskovsk Pipe Production Plant
(NMPP), which produces the product concerned, failed to
provide a breakdown of the cost of production (‘CoP’) by
PCN. This exporting producer only provided the average
CoP of all the PCNs produced in each of its two workshops.
Evidence of
structure from different
producers in other countries concerned by the investiga-
tion including the Community showed that there is a large
variation in the cost of production per PCN.

the PCNs' cost

(179) OJSC Interpipe Nizhnedneprovsk (NTRP) tube rolling plant
which is related to NMPP, submitted the break down of the
CoP per PCN.

(180) As explained in recital 173,

In addition,

the Commission applied
Article 18 of the basic Regulation to NMPP to obtain the
cost of production by PCN. The option of using data
available from the original investigation was considered,
but as Ukraine has since been granted market economy
status, such data was not considered to be the best
information available.
the Commission
considered that the quality of the information reported
by the Community industry was such as would allow
conclusions to be drawn on the Cost of Production (CoP)
per Product Control Number
the
information submitted by the cooperating Community
industry was considered to be the most reliable and the
best information available from which to derive the CoP
per PCN. In this respect, the findings of the investigation
showed that the variances between the cheapest Commu-
nity industry PCN and all other PCNs could be calculated.
This variance was then applied to the average CoP reported
by NMPP. When there was a match between the PCN
produced by the Community industry and the same PCN
produced by NTRP, the NTRP cost was used.

(PCN). Therefore,

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(181) The same party questioned the fact that the Commission
used data from the IP to construct the normal value and the
export price in the IIP. Some of the claims related thereto
were accepted. The Commission considered the weighted
average of the CIF export prices to the Community during
In
the overlapping six months of both proceedings.
to allow a fair comparison within the same
addition,
period of
time, between the weighted average normal
values of each type of the product concerned exported to
the Community when compared to the weighted average
export price of each corresponding type of the product
concerned,
the cooperating
producers was adjusted. The adjustment was made to
reflect the cost of manufacturing for the same six months
taken into account to calculate the CIF export prices to the
Community. The sole Ukrainian cooperating exporter
argued that
the unit
from the related company, OJSC
manufacturing cost
Interpipe Nizhnedneprovsk (NTRP)
tube rolling plant,
when the PCNs are nearly identical to those produced by
OJSC Interpipe Novomoskovsk Pipe Production Plant
(NMPP). As explained in recital 175, the Commission has
however evidence of
large variations in the cost of
production per PCN. This claim thus was rejected.

the Commission should use

the cost of production of

5.3.

Export price

(182) As regards to the exports to the Community, the group
exported a negligible volume of the product concerned to
the Community during the IIP. These transactions, on their
own, could not be considered as representative to establish
whether any change of behaviour of a lasting nature had
taken place.

(183) The Interpipe Group suggested using exports to third
countries in order to establish the level of prices at which
In
the exports to the Community would take place.
particular, the exporter claimed that exports to Russia
should be used in this regard. The company provided
evidence of its exports to third country markets, and to the
Russian market.

(184) It was first determined whether the export volumes of the
product concerned to the third countries proposed by the
Interpipe Group were sufficiently significant in terms of
overall sales. In this respect it was concluded that sales to
Russia represented more than half of the total exports of
the group and were in principle adequate to draw
conclusions, should the Russian market be sufficiently
similar to the Community.

(185) On the basis of

the information at the Commission's
disposal,
it was examined whether Russia had similar
market conditions and structure to those which exist in the
Community, in order to assess whether exports to Russia
are a reliable proxy of
to the
Community for the purposes of establishing a new level
of the measure.

likely export prices

(186) On the one hand, the size of the Russian market for the
product concerned, like that of the Community, appears to
be significant and the product types sold in both areas are
generally similar.

(187) On the other hand, salient differences were detected
between the two markets. To start with, significant import
duties exist in Russia, in contrast to the absence of such
duties in the Community (1). This is reflected in import
shares which are significantly lower than in the Commu-
nity. In addition, the production sector in Russia appears to
be much more concentrated, with a handful of
large
producers accounting for the bulk of activity — whereas in
the Community activity is spread across a larger number of
producers. Also, channels of distribution appear to involve
fewer stockists than in the Community. Furthermore, the
fact
in the
significant Russian dumping exists
Community points to differences in price formation and
to distortions in the Russian domestic market without
which such practices could not exist.

that

(188) In addition,

the existence of dumping indicates that
domestic price levels in Russia are above the prices at
which exporters would be likely to export
to the
Community. This is because prevailing prices for importers
which maintain a significant presence in the Community
are likely to be at the same level as those of Russian export
prices and because of the homogeneous nature of the
product concerned, which implies that exporters wishing
to make inroads in the Community would, in all likelihood,
need to align themselves to the level of prices of the lowest
bidders.

(189) The foregoing points to dissimilarities which would affect
price formation and hence levels, and which therefore
imply that Russian prices may not be used for the purpose
of establishing a new level of measures.

(190) The Commission further examined whether export prices
to third countries other than Russia could be used for this
purpose. It was first examined whether the second largest
market in terms of exports could be taken as a reference
country. However, this option was disregarded, as Belarus is
not a market economy country. Sales to other countries
were also analysed but their exports volumes were too
small to be considered as representative.

(191) In these circumstances, the use of export prices from
Ukraine to Russia (and to other third countries where the
applicant exported during the IIP) cannot be considered as

(1)

In addition a safeguard investigation regarding the product
concerned is on-going. If its conclusions are similar to the safeguard
measures imposed at the end of 2006 on pipes of larger diameter (a
special duty of 8 % was introduced then), this would introduce a
further structural difference as compared to the Community.

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representative of the likely export price behaviour to the
Community and are therefore disregarded. In view of the
above, it was instead considered necessary to apply Arti-
cle 2(9) of the basic Regulation for the Interpipe Group. In
this respect,
the weighted
it was considered whether
average of the CIF export prices to the Community during
the IP from all the cooperating exporting producers in all
countries
could be
aggregated on a per PCN basis and used as a reference to
establish an export price for the Ukrainian exporting
producer.

concerned by the

investigation,

(192) This method was found to be appropriate since it

is
reasonable to presume that should Ukrainian exports enter
the Community market, they would not deviate to any
significant extent from the price pattern of their direct
competitors, i.e. the other exporters to the Community.

that these elements are more appropriately reflected as
‘commissions’/‘mark-ups’
accordance with Arti-
in
cle 2(10)(i) of the basic Regulation, quod non, the resulting
dumping margin would be the same. Since the profit of the
related company was affected by the fact that it purchased
under inter-company conditions, a reasonable profit was
therefore determined on the basis of data gathered from
independent importers/traders cooperating with the inves-
tigation.

(198) Following disclosure, the Community industry claimed that
the Basic Regulation and WTO law do not allow the
calculation of dumping margins when there are no exports
made to the Community. For the reasons stated in the
previous recitals, it is reiterated that Article 2(9) of the basic
Regulation explicitly mentions that when there is no export
price, such price may be constructed on any reasonable
basis. Consequently, the claim is rejected.

(193) As explained in recital 181, when establishing the export
price, the Commission only used the data from the six
overlapping months of the IP and IIP.

5.4. Dumping margin

(194) The matching PCN unit export prices of these exporters
were thus used to establish the export price of the Interpipe
group.

(195) Following the disclosure,

the sole Ukrainian exporting
producer claimed that when determining the export price,
no deduction should be made for the related company's
SG&A and profit, as Article 2(9) of the basic Regulation is
It was argued that
not applicable in the present case.
Article 2(9) of the basic Regulation only applies to related
importers located in the Community as its wording makes
a clear distinction between ‘importation and resale’. It was
further argued that the related company acts as an export
department.

(196) It should be noted that, for sales of the product concerned
to the Community, the sole Ukrainian exporting producer
consigned the product concerned directly to the Commu-
nity, invoiced its related company in Switzerland for each
consignment and received payment accordingly. Thus, the
exporting producer performed all functions of an exporter.
The related company in Switzerland negotiated sales
contracts and invoiced the first independent buyer in the
Community. The related company also arranged the
delivery of the products sold.

(197) Concerning the disclosure

comments made by the
Ukrainian company, it is held that export prices may be
constructed under Article 2(9) of the basic Regulation
where there is no export price (first option under arti-
cle 2(9)). Again under Article 2(9), export prices can be
constructed on any reasonable basis. Such reasonable basis
will also cater for a deduction of the related company's
SG&A and a reasonable profit. Even if it was considered

(199) The comparison between the normal value calculated as
described above and the export price also calculated as
described above, showed the existence of dumping. The
dumping margin for the Ukrainian group expressed as a
percentage of the CIF import price at the Community
border, duty unpaid, is the following:

Interpipe Group (OJSC Interpipe Novomoskovsk Pipe
Production Plant and OJSC Interpipe Nizhnedneprovsk
tube rolling plant): 10,7 %.

5.5.

Conclusions on dumping regarding Ukraine

(200) In conclusion, dumping by the Interpipe Group was found
to exist at the level described in recital 199. As regards all
other exporting producers in the Ukraine, the applicable
residual dumping margin will not change.

6.

UKRAINE (ii): ARTICLE 11(2) ASPECTS

6.1.

Preliminary remarks

(201) The exported volumes from the country concerned to the
EU have steadily decreased from 29 KT in 2002 to 17,2 KT
in 2005 to nearly nil in the IP.

(202) Only two Ukrainian producers belonging to the same
group (the Interpipe Group) made themselves known and
submitted a questionnaire reply, OJSC Interpipe Novomos-
kovsk Pipe Production Plant and OJSC Interpipe Nizhned-
neprovsk Tube Rolling Plant.

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(203) It was established that

there were at

least another 7
producers operating in Ukraine. On the basis of
the
information available to the Commission, the Interpipe
Group accounts
the Ukrainian
for around 26 % of
production. Under these conditions, it is considered that
the level of cooperation was very low.

6.2. Dumping of imports during the investigation

period

(204) The single cooperating Ukrainian group producer had
negligible exports to the Community during the IP. The
the product
very low level of Ukrainian exports of
concerned to the Community was not representative and
thus did not provide a reliable and meaningful basis for
establishing whether there was a continuation of dumping.
It was therefore considered appropriate to base the analysis
in this case on the likelihood of recurrence of dumping
should measures be terminated.

6.3. Development of imports should measures be

repealed

6.3.1. Preliminary remarks

(205) As outlined in recital 203, the investigation has shown that
there were at least 7 producers of the product concerned in
Ukraine during the IP and only one group cooperated in
the investigation.

(206) It was examined to what extent data from the one
cooperating Ukrainian group could be used for the purpose
of analysing the overall development of likely exports from
Ukraine as well as, more specifically,
to serve as a
benchmark in terms of indicators of domestic and export
prices, costs, production capacities and capacity utilisation.

(207) The information pertaining to stocks, production level and
capacity that was provided by the company has been used
in conjunction with data from the complaint in order to
establish the production volume and capacity of Ukrainian
producers.

(208) In view of the above, the following considerations were
taken into account when assessing the likely impact should
measures be repealed.

6.3.2. Production, unused capacities and likelihood that these
capacities would be directed to the Community.

(209) Based on the information available to the Commission, it
was established that production capacity of the product
concerned in the Ukraine exceeds 400 KT per year.

is concluded that

third countries or the production of products other than
the product concerned,
should
it
measures expire, significant spare capacities would in all
likelihood be directed towards the Community, not least
because of the Community's attractiveness as an export
market. This is further confirmed by the significant spare
capacity existing at the Interpipe Group.

(211) Considering that the Community market is one of the
biggest in the world, its sheer size makes it attractive to any
Ukrainian exporting producer of the product concerned.

(212) It is recalled that the Interpipe Group supplies coils from
Ukraine to the manufacturing company Mogilev in Belarus,
which transforms the product on a toll manufacturing basis
into the product concerned, which is
then sold by
Interpipe's Swiss subsidiary to the Community. Throughout
the process, Interpipe maintains ownership of the product.
As mentioned above, these exports have been found to be
dumped. Especially since it is proposed to impose measures
on Belarus, it cannot be excluded that certain exports made
by the group from Belarus would be sourced instead from
Ukraine.

(213) Taken together with the relatively attractive price level in
the Community, where well developed distribution chan-
nels exist, it is considered that, in the absence of measures,
there would be a clear economic incentive for a shift of
exports away from third markets such as Russia or Belarus
and towards the Community.

(214) Overall, under these circumstances, it is considered that any
increase in the current capacity utilisation is likely to be
directed towards exports, and specifically to the Commu-
nity market.

6.3.3. Likely price levels

(215) In a context of low cooperation and of the information
mentioned above, it is considered that the allegations made
in the complaint as to likelihood of recurrence of dumping
supported by
should be confirmed. This
additional factors.

further

is

(216) The export prices to other third countries are at the same
level as that of
the prevailing import prices in the
Community. This would imply that it is likely that export
prices to such other third countries are also dumped,
pointing to a more general pattern of behaviour based on
dumping.

(210) In the absence of evidence showing that this capacity could
be absorbed by increased domestic sales, sales to other

(217) In addition for the product under consideration, which is in
general rather homogeneous, would-be Ukrainian sellers
would be likely to provide products at the prevailing prices

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of other imports in the Community. As has been concluded
in the sections above, the import prices of other exporting
countries are generally low. When considering that
potential export prices of Ukrainian producing exports
are likely to have to mirror these low prices and when
considering the cost structure of the product concerned,
which is heavily based on steel coil and zinc prices that
have seen significant increases across the world, it would be
likely that export prices would be dumped at around
10,7 % as concluded in recital 199.

(224) In respect of the Community producers, the sales volumes
were ascertained by using the information from the
responses of the Community industry together with the
information available in the complaint for the Community
sales of the two non-cooperating producers.

(225) As to the volumes of imports from countries concerned
and third countries, the following sources of information
were examined:

6.4.

Conclusion

— full CN code data from Eurostat,

(218) A significant amount of Ukrainian exports would therefore
be likely to be sold in the Community at dumped prices
should measures be allowed to lapse.

— other statistical information of a confidential nature

available to the Commission,

E.

1.

INJURY ASPECTS (ANTI-DUMPING INVESTIGATION,
EXPIRY REVIEW, TURKEY INTERIM REVIEW)

DEFINITION OF THE COMMUNITY INDUSTRY AND
COMMUNITY PRODUCTION

(219) Within the Community, it was found that the like product
was manufactured by 17 companies which cooperated with
the
complaint and
2 Community producers that did not cooperate with the
investigation. No Community producer came forward and
opposed the investigation.

investigation and supported the

(220) In the absence of the cooperation of 2 producers in the
Community, the Community production was established
on information submitted in the complaint and the
information collected during the investigation from the
cooperating producers.

(221) The 17 cooperating Community producers accounted for
95 % of the total production in the Community of the
product concerned. They were deemed to constitute the
Community industry within the meaning of Article 4(1) of
the basic Regulation.

(222) The sampled Community producers in the investigation
accounted for around 67 % of the production of the like
product of the Community industry during the investiga-
tion period.

— information on imports available from interested

parties.

(226) In addition, according to the complaint, no deduction
should be made to the CN Code data, to cover products
which were not
the product concerned because no
significant quantities of other products have been imported
under these CN codes

(227) On this basis, it was concluded that, for the purposes of
establishing volume and price trends for the whole period
under consideration, full CN Codes were the most adequate
source.

(228) The following comments are useful

in this context. For
Belarus,
in the absence of other information regarding
prices and covering the full period under consideration and
after analysing the price levels emanating from Eurostat
and those from the German operator mentioned above, it
is considered that Eurostat statistics are the most accurate
source for the trends in prices.

(229) For China the investigation established that imports to the
EU market from the cooperating exporting producers were
higher than the import statistics as mentioned in table 2
(below). Given that price levels were similar between the
two sets of data, and in order to ensure that the figures are
not overstated, it was decided that official statistics would
be used, not least because this approach had no material
injury and causation, when
impact on the analysis of
compared to using the data obtained from the cooperating
exporting producers.

2.

COMMUNITY CONSUMPTION

(223) The consumption of

the product concerned on the
Community market was established on the basis of the
volume of sales on the Community market of all producers
within the Community plus imports from the countries
concerned as well as third countries.

(230) Considering that Turkish imports from the cooperating
exporters were higher than shown by Eurostat data, a
similar reasoning applies to Turkey. Again, this approach
had no material
injury and
causation, when compared to using the data obtained from
the cooperating exporting producers.

impact on the analysis of

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(231) The consumption established as outlined above (‘Commu-
nity consumption’)
increased by 9 % during the period
under consideration, i.e. from 1 234KT tonnes in 2004 to
1 342KT tonnes during the IP. More specifically,
the
Community consumption shows a decrease by 12 % in

2005 before increasing again in 2006 and during the IP.
The drop in consumption for the year 2005 is attributable
to destocking (and therefore decreased purchasing) by the
stockists in 2005 after increased purchases in 2004.

Table 1

2004

2005

2006

IP

EU Consumption (Tonnes)

1 234 037

1 082 125

1 282 737

1 342 657

Index

100

88

104

109

3.

IMPORTS FROM THE COUNTRIES CONCERNED AND
FROM THE THIRD COUNTRIES

3.1.1. Margin of dumping

(232) For the anti-dumping investigation countries, i.e. Belarus,
the People's Republic of China and Russia it was examined
whether the conditions were such so as to allow for an
analysis of all
imports to be cumulated. With below
de minimis dumping, exports from Bosnia and Herzegovina
were instead considered under other exports in section 3.4
as well as under other causes below in section 4. The
imports from the expiry review countries and from Turkey
(in the context of the Turkey interim review) were analysed
separately. In this context it is recalled that dumping levels
for Turkey were below the de minimis threshold and that the
imports volumes as concern Thailand and Ukraine together
and separately also were de minimis. However, for the latter
two countries a likelihood of recurrence of
injurious
dumping has been found, as is set out in section F below.

3.1.

Cumulation

(233) The Commission examined whether dumped imports of
the product concerned originating in Belarus, the People's
Republic of China and Russia,
should be assessed
cumulatively in accordance with Article 3(4) of the basic
Regulation.

(234) This Article provides that the effects of imports from two
or more countries simultaneously subject to the same
investigation shall be cumulatively assessed when (i) the
margin of dumping established in relation to the imports of
each country is more than de minimis as defined in Arti-
cle 9(3) of the basic Regulation; (ii) the volume of imports
of each country is not negligible; and (iii) the conditions of
competition between the imported products and the
condition of competition between the imported products
and the like products in the Community makes such an
assessment appropriate.

(235) All

imports from the PRC, Russia and Belarus meet

requirement (i) mentioned in recital 234 above.

3.1.2. Volume of dumped imports

(236) The volumes of imports from the PRC, Russia and Belarus
are more than de minimis and therefore not negligible (as
can be seen in table 2 below).

3.1.3. Conditions of competition

(237) As regards the conditions of competition, the investigation
showed that the product concerned imported at dumped
prices from the countries concerned and the product
produced and sold by the Community industry were alike
in all their essential physical and technical characteristics.
The same applies for a comparison of
the dumped
imported products from the various countries concerned.

(238) Furthermore, on that basis, these products are interchange-
able and were marketed in the Community during the
period under consideration through comparable sales
channels, e.g. stockists and traders.

(239) In addition, the investigation established that competition
took place throughout the various Member States of the
Community and across all the various types of the product
concerned including galvanised products, black products
and tubes with other outer finishing. Therefore, the imports
of the welded tubes were considered to compete with each
other and with the ones produced in the Community.

(240) The pricing behaviour of the various cumulated countries
was also examined. This analysis
these
countries were undercutting and underselling the prices
of the Community industry and, as shown at recital 244,
the prices followed similar trends.

showed that

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(241) Certain parties argued that imports originating in Russia
should be decumulated from the investigation as imports
from this country show a diverging trend in import
volumes and market share in a market where demand is
increasing. In this respect,
it should be noted that the
volumes of imports into the Community market remained
substantial at all
the period under
times throughout
consideration. In addition, dumped imports from all three
countries (Belarus, the People's Republic of China and
Russia) increased significantly in the last two years which
were analysed, and general price levels followed the same
trends and were in the same order of magnitude,
particularly in the IP as shown by individual company

data. Furthermore all of the cumulated imports undercut
the prices of the Community industry in the IP.

(242) On the basis of

the above,

it was concluded that all
conditions justifying cumulation as described in Arti-
cle 3(4) of the basic Regulation were met. It has therefore
been decided that imports of welded tubes originating in
Belarus, the People's Republic of China and Russia should
be assessed cumulatively. These countries will be jointly
referred to as the ‘cumulated countries’ and the imports
from these countries will be jointly referred to as
‘cumulated imports’.

Table 2 — Imports volumes (tonnes)

2004

2005

2006

IP

21 781

42 036

12 827

54 120

30 124

22 056

110 922

184 887

34 148

28 191

36 057

29 615

China

Russia

Belarus

Total cumulated imports

76 644

106 300

173 261

250 559

Ukraine

Thailand

25 173

17 210

4 501

90

0

0

2 753

0

Other imports

222 096

162 177

238 150

238 441

Of which Bosnia and Herzegovina

Of which Turkey

6 836

95 049

11 011

85 018

30 032

99 843

33 095

110 994

Total imports

324 003

285 687

415 912

491 753

Table 3 — Market Share (%)

2004

2005

2006

Belarus

China

Russia

Cumulated imports

Ukraine

Thailand

Other imports

Of which Bosnia and Herzegovina

Of which Turkey

1,0

1,8

3,4

6,2

2,0

0,0

18,0

0,6

7,7

Total imports

26,3

2,0

5,0

2,8

9,8

1,6

0,0

15,0

1,0

7,9

26,4

2,2

8,6

2,7

13,5

0,4

0,0

18,6

2,3

7,8

32,4

IP

2,2

13,8

2,7

18,7

0,2

0,0

17,8

2,5

8,3

36,6

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3.2.

Cumulated volume and market share

(243) The cumulated imports have increased from 76 644 tonnes
in 2004 to 250 559 tonnes during the IP, i.e. by more than
200 %. Since the consumption of the product concerned
during the period under consideration has increased by
9 %, the market share held by cumulated imports of the
product concerned increased from 6,2 % in 2004 to
18,7 % in the IP. The developments of imports and market
shares of the product concerned during the period under
consideration are shown in tables 2 and 3 above.

3.3.

Prices and Undercutting

3.3.1. Evolution of prices

for anti-dumping investigation

countries

(244) The weighted average price of imports from the countries
concerned developed as follows over the period under
consideration:

Table 4 — Import prices (EUR/tonne)

China

Russia

Belarus

2004

2005

2006

IP

460

481

456

537

543

495

520

551

503

557

603

549

(245) Table 4 was sourced from the Comext database at full CN
Code level. The general trend of the import prices into the
Community shows an increase in line with the general
increase of prices for all operators on the EU market.

the Community industry side, the relevant sales prices were
those to independent customers, adjusted when necessary
to ex-works level. During the IP, based on the different
product types defined in the questionnaire, the average
undercutting margins were as follows:

Table 5 — Undercutting

China

TMK Russia

OMK Russia

Belarus

IP

43 %

12 %

15 %

22 %

3.3.3. Evolution of prices and price undercutting for the expiry

review

(248) For Ukraine and Thailand, it is recalled that the volumes of
imports were below de minimis and it was thus considered
that the prices, and hence the price evolution and the
undercutting calculations, would not be reliable and
meaningful.

3.4.

Imports from other third countries

3.4.1.

Import volume and market share in the review

(249) As shown in tables 2 and 3, imports from third countries
including those from Bosnia and Herzegovina and from
Turkey slightly increased from 222 096 tonnes in 2004 to
238 441 tonnes during the IP. The market share held by
these imports remained at around 18 % over this period.

3.3.2. Price undercutting for the anti-dumping investigation

countries

4.

SITUATION OF THE COMMUNITY INDUSTRY

(246) For

analysis on the

the determination of

the price undercutting,

the
Commission based its
information
submitted at a detailed product type level in the course
of the investigation by the sampled exporting producers for
China. For Russia, the data of the cooperating exporting
producer was used. For Belarus, data from the cooperating
German operator was used.

(247) This export price data was compared to a weighted average
price of the sampled Community producers at the same
detailed product
in order to ensure a fair
comparison at the same level of trade. In all cases this
analysis took into account actual export prices of the
exporting producers at CIF Community frontier level. For

type level

(250) Pursuant

to Article 3(5) of

the basic Regulation,

the
Commission examined all relevant economic factors and
indices having a bearing on the state of the Community
industry. This analysis was carried out for the nine sampled
companies as mentioned in recital 20 which had completed
full questionnaires. The factors examined for the sampled
companies
and wages,
investments, profitability, return on investment, cash flow
and ability to raise capital. However, for some indicators
(analysed below as macro indicators)
information was
available and used for all 17 companies (including the nine
sampled companies) of the Community industry. These
macro indicators were market share, sales volume in the,
Community production and production capacity.

included prices,

employment

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4.1. Macro indicators

4.1.1. Production, production capacity and capacity utilisation

(251) The production of the Community industry decreased by
10 % from 2004 to the IP. The production capacity was
calculated according to a standard methodology applied to
the whole Community industry. This methodology took
into account the actual capacity over the long term by
such as
allowing for normal production stoppages
maintenance and it was also the methodology normally
employed within the Community industry. The production

capacity for the product concerned decreased moderately
during the period under consideration, from 2 218 597
tonnes in 2004 to 2 132 322 (or by 4 %) during the IP.

(252) The capacity utilisation also declined, mirroring a decline in
production, from around 44 % to 41 % over the period
under consideration. In this respect it should however be
noted that this factor is not the most relevant injury
indicator in this sector, as plants and production equipment
are also used to manufacture other
tubes and other
products that are not subject to this investigation.

Table 6 — Community industry

2004

2005

2006

IP

Production capacity (tonnes)

2 218 597

2 211 597

2 136 747

2 132 322

Production volume (tonnes)

970 080

832 973

914 663

875 477

Index of production volume (%)

Capacity utilisation (%)

100

43,7

85,9

37,7

94,3

42,8

90,2

41,1

4.1.2. Sales volume and market share

(253) The data in table 7 show a clear decrease in sales volume for the Community industry on the
Community market. This situation is further emphasised by the fact that the overall consumption, as
shown in Table 1, increased by 9 % over the same period. After a certain degree of stability was
maintained in 2004 and 2005, the market share of the Community industry dropped significantly in
2006 and the IP. This is in contrast to constant or increasing market shares (see recital 243) for dumped
imports from the PRC, Belarus and Russia individually and an increasing market share of the cumulated
countries throughout the period under consideration.

Table 7 — Community Industry

2004

2005

2006

IP

Sales (tonnes)

901 934

788 338

858 725

842 804

Market share (%)

73,1

72,9

66,9

62,8

4.2. Micro indicators

4.2.1. Stocks

(254) The stock level of the sampled Community producers dropped by 23 % between 2004 and 2005 and
then was constant thereafter. A calculation of the stock rotation through the period under consideration
showed that the stock level remained at around 30 days of sales. The investigation has confirmed that the
level of stocks is not considered as a significant indicator in this respect as the Community industry
usually works on a production to order basis and thereby holds relatively little stock.

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Stocks (tonnes)

Index (%)

Stock rotation (days)

Table 8

2004

2005

2006

IP

63 632

49 074

48 716

49 008

100

35

77,1

31

76,6

29

77,0

30

4.2.2. Sales prices

4.2.3. Profitability

(255) The average unit selling price to unrelated customers in the
Community increased by 14,8 % during the period under
consideration. This increasing trend must however be seen
in the context of a significant increase of the cost of
production during the same period. The increase in the
cost of production was mainly due to a substantial increase
in the purchase price of the major raw materials, i.e. coils,
zinc, and energy — as explained in recital 287. In general
terms, there was no substantial change in the product mix
over the period under consideration which would distort
the trend in sales prices shown below in table 9.

Table 9

2004

2005

2006

IP

Sales prices in EUR/
MT

660

691

711

758

Index (%)

100

104,7

107,7

114,8

(256) The increase of the cost of production during the period
under consideration was not matched by a corresponding
increase of the sales price; this was mainly the result of
strong pressure by imports from the countries concerned.
Under these circumstances the Community industry was
unable to pass on the increase in price of the raw material
to its customers.

(257) The Community industry prices were thus suppressed, even
if prices saw an increase in absolute terms. In other words,
the price increase would have been much greater in the
absence of the dumped imports.

(258) Moreover, the sales prices on the Community market were
undercut by between around 12 % and 43 % as explained
in recital 246 and subsequent.

(259) The overall profitability of

turnover of

the sampled producers in
respect of the product concerned is based on the weighted
average profitability on net
the product
concerned sold to unrelated customers on the EU market.
During the period under consideration the profitability
level deteriorated,
In
addition, the level of profitability was clearly insufficient
throughout the period under consideration and, bearing in
mind that this situation has continued over many years, it
evidently jeopardizes the very existence of at least part of
this industry.

reaching - 1,0 % during the IP.

(260) The profitability level never reached the target profit of 5 %

mentioned in recital 352 and subsequent.

Table 10 — Profitability (%)

2004

2005

2006

IP

Profit/Net turnover

0,9

- 2,6

- 1,9

- 1,0

4.2.4. Employment, productivity and wages

(261) Employment of

sampled Community producers
decreased by 23,5 % during the period under consideration
from 2 772 workers in 2004 to 2 123 during the IP.

the

(262) The wages calculated by taking the average cost per
employee have increased from EUR 15 668 in 2004 to
EUR 21 558 during the IP. One major reason for this
increase in wages per employee is explained by the strong
salary increase in the Community industry companies
situated in the 10 countries which became members of the
EC in 2004.

(263) This increase is however more than compensated by the
combined effect of the aforementioned decrease in labour
and the significant increase (17 %) in productivity. This
underlines the continuing efforts by Community industry
to increase efficiency.

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Table 11 — Employment

2004

2 772

100

2005

2 350

84,7

2006

2 179

78,6

Number of employees

Index (%)

Wage cost per employee (EUR)

15 668

17 836

20 945

Index (%)

Production per employee

Index (%)

100

238

100

113,8

133,7

238

100

283

119

IP

2 123

76,5

21 558

137,6

278

117

4.2.5.

Investments, return on investment

(264) The investigation confirmed that no important capital
expenditure in relation to the companies' overall activity
was undertaken by the sampled Community producers in
the business involving the product concerned. No invest-
ments were done to increase the production capacity as
demonstrated in recitals 251 and 252. Under the current
market conditions, the Community industry did not invest
instead took steps to
in an increase in capacity but
its existing
maintain and enhance the efficiency of

production equipment. Some investments in the welded
tubes-related activity were also made with regard to
environmental and health and safety matters.

(265) The level of the return on investment expressed as the
relation between the net profit of the sampled Community
producers and the gross book value of its fixed assets
mirrors the profitability trend as explained in recital 259.
Its level is very low and remains negative as from the year
2005.

Table 12

2004

2005

2006

IP

Investment

14 880 328

14 939 859

11 600 607

10 548 216

Return on investment (%)

1,4 %

- 3,5 %

- 2,7 %

- 1,8 %

4.2.6. Cash flow and ability to raise capital

(266) The development of

the cash flow generated by the
sampled Community producers in relation to sales of the
product concerned on the EU market mirrored the
development of the profitability. It is worth noting that
while the cash flow is low, it remained positive during the
period under consideration with the exception of the year
2005 where it was only just negative.

(267) The investigation has not detected that the Community
industry was experiencing difficulties in its ability to raise
capital. It should, however, be noted that the ability to raise
capital may be considered a less meaningful indicator for
this investigation. This is because most of the producers of
the product concerned of the Community industry are part
of large corporate groups. Therefore, the ability to raise
capital is closely linked to the performance of the group as
a whole rather than the individual performance of the
product concerned. However the fact that none of these

large groups made decisions to invest in new production
facilities shows that in recent years the return on such
investments has not been adequate

Table 13

2004

2005

2006

IP

Cash flow ( % of
turnover)

5,5 %

- 0,4 %

1,0 %

1,6 %

4.2.7. Growth

(268) As explained in recital 253, it has to be noted that the
market share of the Community industry fell by 10,3
the Community
percentage points while the level of

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consumption increased by 9 %. This indicates clearly that
the Community producers have not been able to grow
sufficiently in the market conditions observed in the period
under consideration.

reflecting the fact that the Community industry is incurring
losses.

(273) Community industry indicators have shown an overall
negative evolution during the period under consideration
and have demonstrated that material injury has taken place.
In this context seemingly positive developments, such as
the increase in sales prices, must be compared to the more
significant increase of the costs of the major raw materials/
components which have outweighed such positive trends.

(274) Based on the foregoing analysis,

it appears that

the
Community industry is
in a difficult economic and
financial situation and has suffered material injury within
the meaning of the Article 3 of the basic Regulation. This
conclusion can be applied to the Community industry as a
whole, given the high level of representativeness of the
sampled Community producers and the fact that the macro
indicators were analysed for all the companies of
the
Community industry as explained in recital 250 above.

5.

CAUSATION

5.1.

Introduction

(275) In accordance with Article 3(6) and (7) of

the basic
Regulation it was examined whether the material injury
suffered by the Community industry had been caused by
from the countries concerned.
the dumped imports
Furthermore, known factors other
than the dumped
imports, which might have injured the Community
industry were examined to ensure that any injury caused
by those factors was not attributed to the dumped imports.

4.2.8. Magnitude of the dumping margin in the context of the

anti-dumping investigation

(269) As concerns the substantial margin of dumping found
during the IP for imports from the PRC, for Russia and for
Belarus and given the volume and prices on imports
involved, the impact of the magnitude of dumping margin
cannot be considered as negligible.

4.2.9. Magnitude of the dumping margin in the context of the

expiry review

(270) For Ukraine and Thailand it is recalled that the exports in
the IP were below de minimis and were thus not considered
a reliable and meaningful basis for establishing a dumping
margin. It is therefore considered appropriate to base the
assessment on the likelihood of recurrence of injurious
dumping, as set out in section F below.

4.2.10. Recovery from the effects of past dumping

(271) The expected recovery of the Community industry from
the effects of past dumping has not entirely materialised as
shown by the low profitability and certain of the inability
to significantly raise sales volumes,
together with a
significant loss of market share. The industry has in recent
years been faced with substantial volumes of dumped
imports from the PRC, Russia, and Belarus, which has
hampered its expected recovery.

5.2.

Effect of
cumulated countries

the dumped imports

from the

4.3.

Conclusion on injury

(272) Both individually and taken together, import volumes from
the cumulated countries (as defined in recital 242) have
maintained a significant presence in the Community
market throughout the period under consideration. Since
they have even increased considerably both in
2005,
absolute and relative terms. Together, their market share
increased from around 6 % in the year 2004 to around.
10 % in 2005 and from that level to around 19 % in the IP
as explained in recital 243. Moreover the dumped imports
from these countries show individually a significant level of
price undercutting. Underselling margins are substantial,

(276) As explained above, imports from the cumulated countries
have increased by more than 200 % during the period
under consideration. In terms of market share; the share of
cumulated countries has increased from 6,2 % to 18,7 %.
In addition, there is a clear coincidence in time between the
deterioration of the situation of the Community industry
and the important increase of dumped imports from the
cumulated countries. Although Table 4 shows that prices of
imports originating in the cumulated countries have
increased over the period under consideration, this should
be viewed in the context of the equivalent general price
increase on the Community market as explained in
recital 255.

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Table 14 — Imports volume

2004

2005

2006

IP

Cumulated countries (tonnes)

76 644

106 300

173 261

250 559

Market share

6,2 %

9,8 %

13,5 %

18,7 %

(277) Imports from the cumulated countries have increased their
penetration of
the EU market and have taken over
significant market shares previously held by countries that
are subject to the expiry review (with the exception of
Turkey) as well as those from third countries not subject to
the investigation and the Community industry. In fact the
Community industry lost over 10 percentage points of
market share over the period under consideration. It was
during this same period that imports from the cumulated
countries gained over 10 percentage points as shown at
Table 14 above.

(278) This penetration was possible because these imports were
made at very low prices. Imports from cumulated countries
the Community producers by
have undercut
substantial amount as shown in recital 247.

those of

(279) The impact of the dumped imports from the cumulated
countries is the injurious situation described above at
section 4 whereby a downward pressure on prices has
resulted in the Community industry not achieving adequate
levels of profitability and even losses. In addition, negative
trends were identified for many other injury factors such as
production, employment and market share. As seen above
in recital 273 there was also a clear coincidence in time
between the increase in imports from the cumulated
countries and the negative trends seen in the injury
indicators.

5.3.

Effect of imports from other sources

5.3.1. Bosnia and Herzegovina

5.3.2. Turkey

the prices of

(281) These imports totalled around 111 000 tonnes or 8,3 % of
the Community consumption on the Community market
during the IP. The average import price was EUR 620 per
tonne which undercut
the Community
industry. Nevertheless, as can be seen from Table 4, the
the three
Turkish prices were higher
cumulated countries. The difference in price becomes even
further pronounced when taking into account the fact that
Turkish producers exported mainly black tubes to the
Community market (i.e. those with a low cost) whereas
imports
from the cumulated countries were mainly
galvanised tubes (i.e. those with a high cost). Furthermore,
the volumes of imports from the cumulated countries are
125 % higher than those from Turkey.

than those of

(282) Bearing in mind the volumes and the undercutting involved
it is concluded that a not insignificant part of the injury
suffered can be attributed to the imports from Turkey.
However when compared with the
the
cumulated imports, as detailed above, a much greater part
the injury can be attributed to imports from the
of
cumulated countries.
It is therefore concluded that the
injury caused by the imports from Turkey is not such as to
break the causal link between the injury suffered by the
Community industry and the dumped imports from the
cumulated countries.

impact of

5.3.3. Ukraine, Thailand

(283) Imports from Ukraine and Thailand were negligible and are
thus not considered to have caused material injury to the
Community industry.

(280) Imports from Bosnia and Herzegovina totalled around
33 000 tonnes or 2,5 % of the Community consumption
on the Community market. The average import price was
EUR 576 per tonne giving an indication that they have
undercut the prices of the Community industry. Never-
theless, bearing in mind the volumes involved,
it was
concluded that only a small part of the injury can be
attributed to these imports, and that this does not break the
causal link between the injury suffered by the Community
industry and the dumped imports from the cumulated
countries.

5.3.4. Effect of imports from other third countries

(284) In 2004, imports from other third countries (excluding
Bosnia, Turkey, Ukraine and Thailand)
totalled around
127 000 tonnes or 10,3 % of the Community consump-
tion on the Community market. During the period under
consideration this import level fluctuated but by the IP
returned to the same level of the Community consumption.
The average import price in the IP was EUR 735 per tonne
in comparison with EUR 586 for 2004. Bearing in mind
that the exact type of these imports was not known, it was
it
difficult to perform price comparisons. Nevertheless,

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appears that the prices from other third countries are much
higher than those of the cumulated countries and the other
countries concerned. This would suggest that imports from
other
third countries are (at most) undercutting the
Community industry prices to a lesser degree than dumped
imports, or that they would not undercut at all. It can not
therefore be concluded that they contribute substantially to
the injury suffered by the Community industry or that they
break the causal link.

absence of dumped imports it would have been possible for
the Community industry to pass on these cost increases —
or at least a substantial part of them — to its customers.

(289) In addition, it is underlined that such input cost increases
are not limited to the Community and that given the nature
of
their level and development would be
expected to be similar in the countries concerned.

the inputs,

5.4.

Effect of other factors

5.4.1. Performance on export markets

(285) The sampled Community producers experienced a fall in
export sales volume from around 60 000 tonnes to around
20 000 tonnes over the period under consideration. It was
assessed whether this decrease had contributed to the
injury suffered by the Community industry. The volume of
sales on third markets never exceeded 10 % of the total
sales volume over the period under consideration, and such
sales constituted a limited amount (ca. 5 %) of the total of
production which indicates that export sales were not a
substantial contributor to the performance of the Com-
munity industry.

(286) Furthermore it should be noted that

the investigation showed that

the profitability
quoted in recital 259 relates only to sales on the EU market
and is therefore not affected by the above fall in export
sales volume. Also,
the
profitability of sales on the Community market and on
third markets were comparable in each year of the period
under consideration. This shows that there was no real
difference between performance on the EU and export
markets. It was therefore concluded that,
if any, only a
negligible part of the injury suffered by the Community
industry could eventually be attributed to this factor, and
that it was thus not such as to break the causal link.

5.4.2. Fluctuation of raw material prices

(287) The cost of raw material is a major proportion of the total
cost of production of the product concerned (over 75 % of
the total cost of production if energy is included). As a
result, welded tubes prices are highly dependant on the
influence of raw material costs. The most important raw
materials were coils, zinc and energy. These components
increased by more than 20 %, 200 % and 50 % respectively
over the period under consideration.

5.4.3. Competitiveness and capacity utilisation of the Commu-

nity industry

(290) It was examined whether

the injury suffered by the
Community industry resulted from a lack of competitive-
ness by the Community industry and/or by low capacity
utilisation rates. In order to examine this, the cost structure
of the Community industry was compared with that of the
exporting producers. Indeed, some differences in manu-
facturing costs were identified such as wage rates, energy
costs, environmental and health and safety costs.

(291) In respect of capacity utilisation,

it is recalled that this
indicator should not be overestimated as Community
industry was able to produce other products on the same
equipment. Furthermore, it would be more probable that
problems in terms of capacity utilisation would be linked
to the loss of market share of Community industry which
was caused by dumped imports.

(292) Some parties have argued that increasing operating costs
have affected the competitiveness of
the Community
industry and caused the injury described above at section 4.
In this respect it must be underlined that these extra
operating costs are not substantial enough to have caused
the material injury identified by this investigation.

(293) It should be remembered that the cost of the raw materials
and energy represented more than 75 % of the total cost of
production of the finished tubes. Therefore the potential
impact of any increases in other operating costs could in
any event only have an effect on 25 % of the total cost of
production. Such increases have been modest, so that their
impact would not be material.

(294) During the investigation, no structural

inefficiency was
detected which would make the Community industry
uncompetitive. On the contrary, as stated in table 11, the
Community industry improved its productivity by 17 %
during the period under consideration.

(288) As explained in recitals 255 and 256, sales prices have also
increased over the same period. However these prices have
not
increased to the extent necessary to reflect cost
increases because of the pressure on the sales prices of
competitors on the market and in particular due to the
pressure of unfair trade of the dumped imports. Therefore
the investigation concluded that raw material prices in
injury because in the
themselves were not a cause of

(295) Furthermore, the investigation revealed that the EU market
was very competitive not least as a consequence of the very
large number of companies operating on the market. In
addition to the 19 Community producers, dozens of
importers from around the world also contributed to the
strong competition on the EU market. Therefore as
explained in the recitals above, it was concluded that the

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Community industry was in general very competitive and
that any lack of competitiveness did not cause the injury
suffered by the Community industry.

5.4.4. Currency fluctuation

(296) Some interested parties alleged that the injury suffered by
the Community industry was caused by currency fluctua-
tions which had the effect of encouraging imports to the
EU.

(297) It is recalled that the investigation has to examine whether
the dumped imports (in terms of prices and volumes) have
caused material
injury to the Community industry or
whether such material injury was due to other factors. In
this respect, with regard to prices, Article 3(6) of the basic
Regulation states that it is necessary to show that the price
level of the dumped imports causes injury. It therefore
merely refers to a difference between price levels, and there
is thus no requirement to analyse the factors affecting the
level of those prices.

the

substantiated,

It should also be borne in mind that, even if the allegation
was
relatively low proportion of
depreciation in terms of total costs would in any event
limit the impact of this allegation, and therefore it was
concluded that heavy investments have not contributed to
the injury suffered by the Community industry.

5.4.7. Cyclical nature of the steel industry

(302) It was alleged that the cyclical nature of the steel industry
contributed to the injury suffered i.e. it is alleged that the IP
fell at the low point of the cycle. First, it is underlined that
injurious dumping can very well occur at all points in the
economic cycle. In addition, as shown by the analysis of
consumption at recital 231, the investigation does not
support this argument. Indeed, consumption in the IP was
buoyant and was clearly not at the low point of the cycle.
The claim was therefore rejected.

5.5.

Conclusion on causation

(298) Notwithstanding the above for many of the exporting
countries concerned by this investigation sales are usually
made in USD. However the fluctuation of the USD to the
EUR over the period under consideration was limited to
only 6 %. The more important depreciation of the USD
occurred after the end of the IP. From July 2007 to April
2008, the USD depreciated by 16 % compared to the EUR.

increase in market share,

(303) The coincidence in time between, on the one hand, the
increase of dumped imports from the cumulated countries,
the undercutting and
their
underselling found, and on the other hand, the deteriora-
tion of the situation of the Community industry leads to
the conclusion that the dumped imports are a cause of the
material injury suffered by the Community industry.

(299) It was therefore concluded that currency fluctuations have

not caused material injury to the Community producers.

5.4.5. Strikes

that

(300) Some interested parties made a general allegation (without
naming companies or time periods involved)
the
injury suffered by Community industry was self-inflicted
and resulted from problems with industrial action and
the producers in the new
strikes relating to some of
Member States. In this respect it should be recalled that no
substantiated evidence was put forward in support of this
claim. Furthermore, the accusation only related to part of
the Community industry. However similar injurious trends
were found for producers in both the old and the new
Member States. It can therefore be concluded that even in
the event that some Community industry producers were
affected by strikes and industrial action this fact would not
have been strong enough to break the causal link between
dumping and injury.

5.4.6. Heavy investments

(304) After analysing the known, salient other factors together
with allegations made by interested parties as detailed in
recital 285 and subsequent, it is concluded that they are
not such as to break the causal link between the dumped
imports from the countries concerned and the material
injury suffered by the Community industry.

F.

LIKELIHOOD OF CONTINUATION OR RECURRENCE

OF INJURY (EXPIRY REVIEW AND TURKEY INTERIM
REVIEW)

(305) In accordance with Article 11(2) of the basic Regulation,
imports from countries currently being reviewed were
assessed in order to establish if there was a likelihood of
continuation or recurrence of injury.

(306) With regard to the likely effect on the Community industry
of the expiry of the measures in force, the following factors
were considered in line with the elements summarised
above in respect of
the likelihood of continuation or
recurrence of dumping.

(301) It was alleged that heavy investments by the Community
industry contributed to the injury suffered. As stated at
recital 264, the investigation showed that no such heavy
investment was made over the period under consideration.

(307) As explained above in recitals 223 and subsequent, while
consumption increased by 9 %,
the forecast of world
consumption of the product concerned, although poten-
tially subject to a certain cyclical trend, is not expected to

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change to a major degree in the foreseeable future.
Alternative products such as plastic piping have not been
able to replace, to a large degree, welded tubes and thus
decrease their consumption.

precarious economic situation. If this injurious situation
continues/recurs the very existence of this industry would
be jeopardized.

1.

UKRAINE

(308) Since the imposition of

the measures,

imports from
Ukraine have fallen to de minimis quantities. However, as
mentioned in recitals 172 and subsequent, there are clear
indications that in the absence of measures significant
imports from Ukraine would re-enter the Community
market at dumped prices. Such prices would also be likely
to undercut significantly those of the Community industry,
given the fact that such prices would in all
likelihood
mirror those set by the lowest bidder in the Community.

2.

THAILAND

(309) Recitals 119 (and subsequent) concluded that significant
volumes would in all likelihood be exported from Thailand
to the Community at dumped prices. These prices would
also be likely to undercut significantly those of
the
Community industry, given the fact that such prices would
in all likelihood mirror those set by the lowest bidder in the
Community.

3.

TURKEY

(310) Bearing in mind that above it is concluded that there is no
likelihood of continuation or recurrence of dumping, no
further analysis is required here on the likelihood of
continuation or recurrence of injury.

(311) In respect of injury issues relating to the interim review
(Article 11(3) of
the basic Regulation) no analysis is
required here because the review concluded that there was
no dumping or likelihood of recurrence of dumping for
this country.

4.

CONCLUSION ON THE CONTINUATION/RECURRENCE
OF INJURY

those of

(312) The likely consequence of the lifting of measures would
therefore be a large increase in imports from both Ukraine
and Thailand at prices which undercut
the
Community industry. Such imports would most likely have
significant detrimental effects on the Community industry.
Under such circumstances the Community industry would
either have to follow the decrease in prices in order to
maintain market share, or maintain sales prices at current
levels and instead lose customers and eventually sales. In
the former case, Community industry would have to
operate at a loss and in the latter case the loss of sales as
such would eventually lead to increased costs followed by
losses.

(314) Therefore the investigation has revealed that there is, for
imports from both Ukraine and Thailand, a clear likelihood
of recurrence and continuation of injury to a Community
industry that has been suffering the consequences of
injurious dumping for many years. In respect of imports
injurious dumping is not expected to
from Turkey,
continue or recur.

G.

COMMUNITY INTEREST

1.

INTRODUCTION

(315) Pursuant to Article 21 of the basic Regulation, it has been
examined whether despite the conclusions on dumping,
injury and causal link, compelling reasons exist that would
lead to the conclusion that it is not in the Community
interest to impose anti-dumping measures on imports from
the countries concerned or to extend the measures in force.

the measures in force,

(316) In order to assess the likely impact of the imposition or
non-imposition of measures and of the extension or expiry
of
the Commission requested
information from all known interested parties. On this
basis,
to 116
importers, stockists and users. No other interested party
made itself known within the deadlines.

the Commission sent questionnaires

(317) Thirty-two of the contacted unrelated importers replied.
Out of them, 16 declared that they were not importing
from the concerned countries and three that they are no
longer active in this area of business. Of the remaining 13
unrelated importers only two submitted a complete
questionnaire response. Therefore, it was not necessary to
apply sampling.

2.

COMMUNITY INDUSTRY

(318) It is recalled that it was concluded that the Community
in

suffered material

injury, as

set out

industry has
recitals 250 to 274.

(319) The imposition of anti-dumping measures is likely to allow
the Community Industry to increase its sales, its market
share and its sales prices. The Community industry would
then be able to reach the levels of profitability which it
would achieve in the absence of dumped imports, and to
take advantage of growth in the Community market: this
would encourage investments and the overall competitive-
ness of the industry.

(313) Moreover, the Community industry has suffered the effects
of dumped imports for many years and is currently in a

(320) The continuation of the measures in force will allow the
Community Industry to continue operating in the frame-
work of fair competition vis-à-vis imports originating from

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Thailand and the Ukraine. As a result, the positive effects
deriving from the imposition of the new anti-dumping
measures will not be thwarted by unfair competition.

Moreover, given the relatively low impact of the product
concerned in users' costs, importers/stockists would likely
be able to pass on increases in price to their customers.

(321) If

the
fair market conditions were to be restored,
Community industry is likely to regain competitiveness
and increase its profit margin to more adequate levels. The
Community industry has actually proven to be structurally
viable through its economic results in the last decade:
despite recurring unfair competition from the imports of
dumped products, it has been able to slow down its loss of
market shares. Moreover, as set out in recital 295, the
Community Industry is competitive and able to increase its
productivity.

(322) On the other hand, should existing anti-dumping measures
be repealed and new anti-dumping measures not be
there will be further trade distortion which
imposed,
would lead to a progressive retreat of the Community
industry from the market. The repeal of current measures
and the important production capacity from the countries
concerned, especially the PRC, would likely lead to an
increasing amount of dumped imports to the Community
market. In these conditions, it would become more and
more difficult for the Community industry to recover and
to defend its market
lack of
investments in the Community industry may eventually
jeopardize its long-term survival.

share. Moreover

the

3.

UNRELATED IMPORTERS/STOCKISTS

(323) It

is recalled that

the cooperating unrelated importers
represented less than 5 % of the total import volume of the
product concerned to the Community during the IP.

(324) A number of exporters did however argue that the impact
of measures on importers/traders would be substantial as
they would face increasing costs for their imports from the
countries concerned.

(325) Should anti-dumping measures be imposed, the level of
imports originating in the countries concerned would
likely decrease. Furthermore, a moderate increase in the
sale price of the product concerned in the Community may
indeed occur, thus affecting the economic situation of
importers/stockists, especially those sourcing from the
countries under investigation. This would be because the
resale prices they could offer to their customers would be
more comparable to those competitors which also sourced
from the Community industry.

is

likely to be moderate,

(326) However, this impact on the situation of importers and
since the product
traders
concerned represents a small part of
their overall
commercial activities. On the basis of the information
provided by those importers/stockists which sent valid
responses, it is clear that they also sell many other steel
the product concerned
products.
represented on average less than 4 % of the total turnover.

found that

It was

(327) On this basis, it has been concluded that the imposition of
anti-dumping measures and the continuation of
the
measures in force is not likely to have a serious negative
impact on the situation of
importers/stockists in the
Community.

4.

USER INDUSTRY

(328) The main user of the product concerned in the Community
is the construction industry. The demand for the product
concerned is therefore dependent upon the situation of this
industry.

(329) As set out in recital 316, neither interested users nor their
representative associations have made themselves known
during the investigation.

(330) A number of other exporters did however assert that the
impact on users/consumers would be substantial should
measures be imposed. In particular it was claimed that
measure would be detrimental to competition and lead to
an increase in costs for users/consumers.

(331) As set out in recital 302 it cannot be excluded that the
price of the product concerned in the Community would
increase moderately. Nevertheless, the negative impact of
increased costs on users/consumers would likely be low,
since the effect of the price of the product concerned in the
users/consumers' total costs is moderate.

(332) As to the claim made by several exporters that imposition
of measures to the group of countries covered by the new
investigation would effectively prevent competition in the
Community, the imposition of anti-dumping measures and
the maintain of measures in force will
improve the
condition of the Community Industry and thus, together
with suppliers from third countries not concerned by the
measures as well as non-dumping exporters from the
countries concerned, ensure the presence of a wide range of
suppliers on the Community market.

(333) Taking into account the above, it is concluded that the
imposition of any anti-dumping measure is not likely to
cause a considerable damage to the economic situation of
the users of the product concerned.

5.

UPSTREAM INDUSTRY

(334) The main raw material used in the production of the

product concerned is hot rolled coils (‘HRC’).

(335) As set out in recital 316, neither interested upstream
producers of HRC nor their representative associations
have made themselves known during the investigation.

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(336) Should the measures not be imposed, the Community
producers of HRC would likely face a reduction in demand,
as a consequence of the reduced activity of the Community
producers of the product concerned.

(337) On this basis, it has been concluded that the imposition of
anti-dumping measures is in the interest of producers of
the main raw material used in the production of
the
product concerned in the Community.

H.

TERMINATION OF THE PROCEEDING IN RESPECT

OF BOSNIA AND HERZEGOVINA AND OF TURKEY

(344) In view of

the findings set out

in recitals 52 and
respectively 170 onwards, it has been concluded that the
proceeding should be terminated in respect of Bosnia and
Herzegovina and of Turkey.

6.

CONCLUSION ON COMMUNITY INTEREST

I.

UNDERTAKINGS

(338) The continuation of

the measures on imports of

the
product concerned from Thailand and the Ukraine and the
imposition of anti-dumping measures on imports originat-
ing in Belarus, the People's Republic of China and Russia
are likely to allow the Community industry to stop losing
market shares, regain lost sales and a return to adequate
profitability. If, however, measures in force were repealed
the
and anti-dumping measures were not
Community industry would likely face a growing unfair
competition problem which would drive certain Commu-
nity producers out of the market; an additional cost would
be the shutting down or the reconversion of machineries.

imposed,

(339) Some negative effects of the imposition of anti-dumping
measures would be a decrease in the volume imported and
moderate costs increases for importers/stockists and users/
consumers, due to a higher sales price of the product
concerned in the Community.

(340) The level of increase in sales prices would nevertheless not
be considerable since competition would remain amongst
Community producers, imports originating in the coun-
tries concerned made at non-dumped or non-injurious
prices and imports originating in other third countries.

(341) Finally, it has been argued by one interested party that,
according to economic literature, anti-dumping measures
entail ‘severe welfare costs for the importing countries’. No
evidence was provided in this regard in the context of the
product and economic operators concerned by this case.
The present investigation has to consider the case on its
own merits: according to this approach, importers/stockists
and users/consumers of the product concerned are unlikely
to suffer serious consequences, given the very low impact
of the price of certain welded tubes on the final costs for
their products or purchases.

(342) The upstream industry is likely to benefit

from the
continuation of measures in force and from the imposition
of anti-dumping measures, in the form of a wider demand
of HRC in the Community market.

(345) Two exporting producers in Russia and the sole in Belarus
offered price undertakings in accordance with Article 8(1)
of the basic Regulation.

(346) Those offers were examined. The investigation showed that
most of
the findings and considerations laid down in
Regulation (EC) No 1697/2002 (see recitals 77 and 78)
which led to the rejection of all undertaking offers during
that investigation are still valid. Namely, the investigation
confirmed that:

— the product concerned is a commodity product with a
considerable volatility in prices even in the very short
term, and therefore not very suitable for a fixed price
undertaking, the volatility is due to the variation in
prices of raw materials, namely hot rolled coils and
zinc, which constitute major but variant components
of the cost of production. Not only do raw material
prices as such fluctuate significantly, such fluctuations
are often exacerbated by fluctuations of the EUR/USD
exchange rate. It is noted that in particular zinc is
commonly traded on a USD basis. A monthly revision
of prices would be necessary. If the minimum prices
were indexed to the price of hot rolled coils and zinc,
different
to be
indexing formulae would have
established by sub-product group, since the energy
and manpower per tonne vary between sizes. For this
reason, should a review formula system be imple-
mented, it would be necessary to establish between 3
and 4 sub-formulae for each category of product
according to the size range.

(347) In addition, the product concerned is characterised by a
considerable number of product types with some char-
acteristics not easily discernible upon importation. This
makes it virtually impossible to establish minimum import
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.

(343) Taking into account all of the above factors, it is concluded
that there are no compelling reasons to repeal the existing
measures and not to impose new anti-dumping duties.

(348) It is also noted that additionally to those product related
reasons, there are company specific reasons to reject the
undertaking offers. With regard to the Belarusian producer,
it is firstly recalled that Belarus is non-market economy

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In addition,

the basic
country as stipulated in Article 2(7)(a) of
Regulation and that
the company did not apply for
individual treatment (IT) as laid down in Article 9(5) of the
basic Regulation.
its cooperation in this
investigation was only partial as mentioned in recitals 101
to 104 and therefore the acceptance of a price undertaking
was also considered to be inappropriate for general policy
reasons. With regard to one Russian exporting producer, it
is noted that it also sells other products than the product
concerned to the same customers in the EU. On this basis,
this risk of cross-compensation is considered to be too
high. With regard to the second Russian exporting
producer, the company had difficulties to report accurate
and reliable data which was mainly due to weaknesses in its
accounting system. In these circumstances, the Commis-
sion considered that
the company does not have the
necessary infrastructure to implement an undertaking and
to allow for an effective monitoring.

(349) Therefore, these price undertaking offers were rejected.

J.

ANTI-DUMPING MEASURES

(350) In view of the conclusions reached above, the measures in
place applicable to imports of
the product concerned
originating in Thailand and Ukraine should be maintained
as in the previous regulation except for OJSC Interpipe
whose margin is indicated below:

Country

Company

Anti-dumping
duty %

Thailand

Saha Thai Steel Pipe Co. Ltd

All other companies

Ukraine

OJSC Interpipe Nihnedeneprovsky
Tube Rolling Plant and OJSC Inter-
pipe Novomoskovsk Pipe Produc-
tion Plant

All other companies

21,7

35,2

10,7

44,1

(351) In addition, definitive measures on imports of the product
concerned originating in the PRC, Russia, and Belarus
should be imposed as described below.

1.

INJURY ELIMINATION LEVEL

(352) The level of the definitive anti-dumping measures should
be sufficient
injury to the
to eliminate the material
Community industry caused by the dumped imports,
without exceeding the dumping margins found. When
calculating the amount of duty necessary to remove the
it was
effects of

the materially injurious dumping,

considered that any measures should allow the Community
industry to cover its costs and obtain a profit before tax
that could be reasonably achieved under normal conditions
of competition, i.e. in the absence of dumped imports.

(353) It was alleged by the complainant during the investigation
that a 10,8 % normal profit should be used in this
investigation based on the return on turnover achieved in
2004 for the product concerned. This claim was based on
5 selected Community producers and 2004 was chosen as
being representative because the anti-dumping measures in
force were partially effective in offsetting the effect of the
dumped imports.

(354) However the investigation showed that the profitability rate
achieved by even these 5 selected Community producers
was much lower that the 10,8 % claimed. Furthermore,
2004 was not considered to be an appropriate period for
this assessment because injurious dumping was taking
place at that time.

(355) In the previous investigation, it was considered that a profit
margin of 5 % of
turnover could be regarded as an
appropriate level that the Community industry could be
expected to obtain in the absence of injurious dumping
based on data from 1997 and 1998. As this information
was not recent, other sources were used to find out if it was
still appropriate. Firstly, welded tubes are a very mature
product, the production processes for which have hardly
changed since 1997. Secondly, recent data available from
the BACH database for a wide range of metal manufactur-
ing companies gives profitability levels of around 5 %.

(356) It was therefore concluded that a 5 % profitability level

remains appropriate for this product.

(357) The non-injurious price was obtained by adding the
normal profit as calculated above to the cost of production
of each product type. Any difference between this non
injurious price and the export price of the same product
type was then expressed as a percentage of the total CIF
import value.

(358) For

the Chinese cooperating exporting companies,
it
should be recalled that none were granted MET nor IT
and therefore a country-wide injury margin was calculated.
The calculation was based on the cooperating exporting
producers. The data for one Chinese exporter was excluded
from this calculation since sufficiently complete PCN data
were not reported to the Commission.

(359) As far as Belarus is concerned, a country-wide duty was
also calculated based on the import prices of the German
importer as mentioned at recital 95 in the absence of
sufficient cooperation.

19.12.2008

EN

Official Journal of the European Union

L 343/37

(360) In respect of Russia the cooperating exporting producers
were granted individual injury margins For non coopera-
tors, bearing in mind that the cooperation level was above
80 %, the country-wide injury margin was set at the level of
the highest cooperator.

HAS ADOPTED THIS REGULATION:

Article 1

(361) In view of the conclusions reached above, the following

injury margins were calculated:

Country

Company

The PRC

All companies

Russia

TMK Group (Seversky Pipe Plant
Open Joint Stock Company and Joint
Stock Company Taganrog Metallur-
gical Works)

OMK Group (Open Joint Stock
Company Vyksa Steel Works and
Joint Stock Company Almetjvesk
Pipe Plant)

All other companies

Belarus

All companies

Injury
margin %

90,6

16,8

20,5

20,5

38,1

2.

DEFINITIVE DUTIES

Ukraine

the basic Regulation,

(362) In light of the foregoing, and in accordance with Arti-
cle 9(4) of
it is considered that
definitive anti-dumping measures should be imposed on
imports originating in the PRC, Russia and Belarus at the
level of the lowest of the dumping and injury margins, in
accordance with the lesser duty rule.

(363) On the basis of the above, the proposed definitive duties

are as follows:

Country

Company

The PRC

All companies

Anti-dumping
duty %

90,6

1. A definitive anti-dumping duty is hereby imposed on
imports of welded tubes and pipes, of iron or non-alloy steel, of
circular cross-section and of an external diameter not exceeding
168,3 mm, excluding line pipe of a kind used for oil or gas
pipelines, casing and tubing of a kind used in drilling for oil or
gas, precision tubes and tubes and pipes with attached fittings
suitable for conducting gases or liquids for use in civil aircraft,
falling within CN codes ex 7306 30 41, ex 7306 30 49, ex 7306
30 72 and ex 7306 30 77 (TARIC codes 7306 30 41 20,
7306 30 49 20, 7306 30 72 80 and 7306 30 77 80)
and
originating in Belarus, the People's Republic of China, Russia,
Thailand and Ukraine.

free-at-Community-frontier price, before duty,

2. The rate of the definitive antidumping duty applicable to the
net
the
products described in paragraph 1 and produced by the
companies below shall be as follows:

for

Country

Company

Thailand

Saha Thai Steel Pipe Co. Ltd

All other companies

OJSC Interpipe Nihnedene-
provsky Tube Rolling Plant and
OJSC Interpipe Novomoskovsk
Pipe Production Plant

All other companies

The PRC

All companies

Russia

(365) TMK Group (Seversky Pipe
Plant Open Joint Stock
Company and Joint Stock
Company Taganrog Metal-
lurgical Works)

OMK Group (Open Joint Stock
Company Vyksa Steel Works and
Joint Stock Company Almetjvesk
Pipe Plant)

All other companies

Anti-
dumping
duty %

TARIC
additional
code

21,7

35,2

A405

A999

10,7

44,1

90,6

A345

A999

—

16,8

A892

10,1

20,5

38,1

A893

A999

—

Russia

(364) TMK Group (Seversky Pipe

Belarus

All companies

Plant Open Joint Stock Com-
pany and Joint Stock Com-
pany Taganrog Metallurgical
Works)

OMK Group (Open Joint Stock
Company Vyksa Steel Works and
Joint Stock Company Almetjvesk
Pipe Plant)

All other companies

Belarus

All companies

16,8

10,1

20,5

38,1

3. Unless otherwise specified, the provisions in force concern-
ing customs duties shall apply.

Article 2

The anti-dumping proceeding concerning imports of the product
concerned originating in Bosnia and Herzegovina is hereby
terminated

L 343/38

EN

Official Journal of the European Union

19.12.2008

Article 3

Article 4

The anti-dumping proceeding concerning imports of the product
concerned originating in Turkey is hereby terminated

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

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

Done at Brussels, 16 December 2008.

For the Council

The President

R. BACHELOT-NARQUIN