CELEX: 51998PC0581
Language: en
Date: 1998-10-16
Title: Proposal for a Council Regulation (EC) imposing a definitive anti-dumping duty on imports of stainless steel bars originating in India and collecting definitively the provisional duty imposed

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                              Brussels, 16.10.1998
                                                              COM(98)581 final
-Ms'                                         Proposal for a
Jjffift
                                   COUNCIL REGULATION (EC)
            imposing a definitive anti-dumping duty on imports of stainless steel bars originating
                        in India and collecting definitively the provisional duty imposed
                                    (presented by the Commission)
   NX- .'""
 *>R"*'.!
 ---pagebreak---  ---pagebreak---                          EXPLANATORY MEMORANDUM
1) The Commission, by Regulation (EC) No 1084, on 30 May 1998 imposed
   provisional anti-dumping duties on imports of stainless steel bars originating in
   India. On 18 July 1998 the Commission, by Regulation (EC) No 1556/98,
   imposed provisional countervailing duties on imports of stainless steel bars
   originating in India, amending the provisional anti-dumping duties.
2) For ils definitive findings the Commission has taken into account the arguments
   raised by interested parties following provisional disclosure, as well as any
   changes subsequently made to the provisional findings. However, the essential
   findings of the Commission, i.e. that the Community industry has suffered
   material injury caused by the dumped imports from India, are confirmed.
3) Modifications of the dumping margins were made, where necessary, in respect of
   claims made by the co-operating exporters concerned.
4) After the imposition of provisional measures it was noted that one Indian
   company, which had for the purpose of provisional findings been considered as a
   party without export sales during the investigation period, had actually exported
   the product concerned to the Community during the investigation period.
   Consequently, an individual dumping margin was established for this exporter at
   the stage of definitive findings.
5) Revised price undercutting and injury elimination margins were also established
   to exclude transactions of Indian product types for which no matching Community
   product type ensuring, however, that the remaining transactions were sufficiently
   representative.
6) In accordance with Article 9 of Council Regulation (EC) No 384/96 the
   Commission therefore proposes that the Council impose definitive anti-dumping
   duties on imports of stainless steel bars originating in India.
7) When the Anti-Dumping Committee was consulted on the imposition of definitive
   measures a majority of the Member States was in favour of the proposal.
                                     4-
 ---pagebreak---                               COUNCIL REGULATION (EC) No
                                                  of
 imposing a definitive anti-dumping duty on imports of stainless steel bars originating
                 in India and collecting definitively the provisional duty imposed
THE COUNCIL OF THE EUROPEAN UNION
Having regard to the Treaty establishing the European Community,
Having regard to Council Regulation (EC) No 384/96 of 22 December 1995 on
protection against dumped imports from countries not members of the European
Community (*) as last amended by Regulation (EC) No 905/98 (2), and in particular
Article 9 thereof,
Having regard to the proposal submitted by the Commission alter consulting the
Advisory Committee,
Whereas:
                               A. PROVISIONAL MEASURES
(1)      By Commission Regulation (EC) No 1084/98 (3) (hereafter referred to as 'the
         provisional duty Regulation') a provisional anti-dumping duty was imposed on
         imports into the Community of stainless steel bars (hereinafter referred to as
         'SSB* or 'the product concerned*) falling within CN codes 7222 20 11, 7222 20
         21,7222 20 31, and 7222 20 81 originating in India.
(*) OJ L 36,6.3.19%, p. 1.
( 2 ) OJ L 128,30. 4. 1998, p. 18.
( 3 ) O J L 155,29.5. 1998, p. 3.
                                             3
 ---pagebreak--- (2)   The provisional duty Regulation was amended by Commission Regulation (EC)
      No 1556/98 (4) imposing a provisional countervailing duty on imports of the
      same product originating in India. Pursuant to Article 14(1) of Regulation (EC)
      No 384/96 (hereinafter referred to as the 'Basic Regulation') and Article 24(1)
      of Regulation (EC) No 2026/97 on protection against subsidized imports from
      countries not members of the European Community (5), this amendment was
      necessary in order to avoid the product being subject to both anti-dumping and
      countervailing duties for the purpose of dealing with one and the same situation
      arising from dumping or from export subsidization.
                           B. SUBSEQUENT PROCEDURE
(3)   Following the adoption of the Regulation imposing provisional duties, several
      interested parties submitted comments in writing. The parties who so requested
      were granted an opportunity to be heard by the Commission.
(4)  The Commission continued to seek and verify all information it deemed
     necessary for its definitive findings.
(4) OJ L 202,18. 7.1998, p. 40.
(5) OJL288.21. 10.1997, p. 1.
 ---pagebreak--- (5) Parties were informed of the essential facts and considerations on the basis of
    which it was intended to recommend the imposition of a definitive anti-dumping
     duty and the definitive collection of amounts secured by way of provisional
     duty. They were also granted a period in which to make representations
     subsequent to this disclosure.
(6) The oral and written comments submitted by the interested parties were
    considered and, where appropriate, the definitive findings were changed
    accordingly.
      C. PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT
(7) The product concerned by the investigation is stainless steel bars and rods, not
    further worked than cold-formed or cold-finished, containing by weight 2.5% or
    more of nickel, of circular cross-section as well as of other cross sections.
(8) Following the adoption of the Regulation imposing provisional duties, some
    Indian exporting producers argued that the products exported to the Community
    and those sold on the domestic market in India were not comparable, for
    instance in terms of chemical characteristics, and consequently could not be
    considered to be a like product.
                                5"
 ---pagebreak---  (9)  This claim could not be accepted since it was found that SSB produced and sold
      domestically in India as well as Indian SSB sold on the Community market had
      the same basic physical, technical and chemical characteristics and uses. The
      question of whether there were, on a per type basis, any differences between
      SSB sold domestically and on the export market was dealt with in the context of
      the determination of normal value and the comparison of normal value with
      export prices.
(10) One exporting producer claimed that products corresponding to the standard
     DIN 1013 fell within the scope of the current anti-dumping proceeding and
     should therefore be taken into consideration. It was found, however, that these
     products were hot rolled bars and therefore not covered by the scope of the
     investigation as set out in the notice of initiation (6) and the provisional duty
     Regulation. In addition, it was noted that they did not fall within the relevant
     CN codes subject to measures. Consequently, this claim was not accepted.
(11) As no other arguments were presented, thefindingsset out in recitals (9) to (12)
     of the provisional duty Regulation are confirmed.
(6) OJC 264,30. 8. 1997, p. 2.
                                     C
 ---pagebreak---                                       D. DUMPING
 1.   General
(12) The determination of dumping in the provisional duty Regulation did not take
      into account any differences in diameter when classifying the various product
      types since it was-concluded that this did not have an impact on the production
      costs per kilogram or on the selling price per kilogram. However, two exporting
      producers claimed that the diameter of the product concerned had an impact on
      the average cost of production per kilogram and that it should consequently be
     taken into consideration in the dumping determination. They also provided
      sufficient evidence to this effect. This claim was accepted.
2.   Normal value
a)   Methodology used to determine normal value
(13) The majority of the exporting producers objected to the methodology used to
     determine normal value as set out in the third paragraph of recital (14) of the
     provisional duty Regulation. They argued that the normal value of the
     companies with insufficient or no domestic sales should have been constructed
     rather than based on domestic sales of other Indian exporting producers
     investigated. However this argument could not be accepted because this
     approach is specifically provided for in Article 2(1) of the Basic Regulation.
 ---pagebreak--- (14) In support of the argument that it was not appropriate to base normal value on
     the domestic sales of other Indian exporting producers it was also claimed that
     the respective domestic sales were not representative since they allegedly
     represented only a small percentage of total Indian exports to the Community.
     However, in the current proceeding normal value was established on the basis of
     other exporting producers' domestic sales for comparable product types only
     when their sales accounted for 5% or more of the volume exported to the
     Community by each company considered, i.e. when they were representative, as
     defined by Article 2(2) of the Basic Regulation, and were in the ordinary course
     of trade.
(15) In view of the above, the claim concerning the methodology used to establish
     normal value was rejected.
                              8
@L3S:l^iïkl
 ---pagebreak--- b)   Average profit rate of domestic sales
(16) Some exporting producers argued that the average profit rate established for
     domestic sales of the product concerned was unreasonable since it was
     substantially higher than the profit margin of 5% mentioned in recital (74) of the
     provisional duty Regulation and in the complaint as a reasonable profit rate for
     the Community industry. ITiese exporting producers claimed that a profit rate of
     5% should also be used for the determination of constructed normal value. In
     this respect it should be noted that, pursuant to Article 2(6) of the Basic
     Regulation, where an exporting producer had domestic sales of the like product
     in representative quantities and in the ordinary course of trade, the amount for
     profit used for constructing normal value was based on the weighted average of
     the actual amounts determined for such domestic sales of the like product.
     Where this was not possible, the amount for profit was based, pursuant to
     Article 2(6)(a) of the Basic Regulation, on the weighted average of the actual
     amounts determined for other exporting producers subject to investigation in
     respect of domestic sales of the like product which were representative and in
     the ordinary course of trade.
(17) In view of the above, the claim concerning the profit rate was rejected.
                                   3
 ---pagebreak---  c)    Second quality products
 (18) Some Indian companies, which sold second quality products on their domestic
       market during the investigation period, argued that these by-products were
      products concerned and should therefore be included in the normal value
      determination. However, these products differed substantially from first quality
      products in terms of quality, physical characteristics, market perception and
      selling price. Consequently, since only first quality products were exported to
      the Community, the claim was rejected.
(19) Since no other comments concerning normal value were presented, the findings
      set out in recitals (13) to (15) of the provisional duty Regulation are confirmed.
3.    Export price
(20) Some exporting producers contested the Commission's standard practice of
      using monthly average exchange rates to convert the export price into domestic
      currency. They claimed that the exchange rates applied to actual transactions
      should have been used. In this respect, it was noted that the differences between
      daily and monthly exchange rates were only marginal. Moreover, depending on
      the transactions, these differences resulted in either slightly higher or lower
      export prices, i.e. the negative differences were offset by the positive
      differences. As a result, the difference between both approaches was, on
      average, not significant. Consequently, the approach followed for the
      determination of provisional findings was confirmed and, therefore, the above
      claim was rejected.
                                        •lo
 ---pagebreak--- (21) One company that made export sales to its subsidiary in the Community
     contested the approach explained in recital (17) of the provisional duty
     Regulation concerning the profit to be deducted for determining a constructed
     export price. This company claimed that the information on the sales of its
     European subsidiary should be used for the above purpose. Since no profit was
     made on these sales, the company contended that no profit be deducted from the
     price to the first independent buyer in order to construct the export price.
     However, according to Article 2(9) of the Basic Regulation, the adjustment to
     be made in order to determine a reliable export price shall include profits
     accruing. Following the practice consistently applied by the Commission and
     the Council and confirmed by the Court of Justice, it was not found appropriate
     to base the calculation of the-profit margin on information from the related
     importer since this profit margin can be influenced by the relation to the
     exporter. The request is therefore rejected and the approach outlined in recital
     ( 17) of the provisional duty Regulation is definitively confirmed.
(22) In the absence of any further arguments concerning the establishment of the
     export price, the findings as set out in recital (16) and (17) of the provisional
     duty Regulation are confirmed.
4.   Comparison
                                      n
 ---pagebreak--- a)   Import charges and indirect taxes
(23) Some companies claimed that the adjustment granted for import charges should
     be extended to certain additional imported materials subject to import duties.
     This claim could be accepted only to the extent that it was proved that, pursuant
     to Article 2(10)(b) of the Basic Regulation, the materials indicated were
     physically incorporated into the products concerned sold for consumption in the
     exporting country and if the charges were not collected or refunded in respect of
     the product containing such material when exported to the Community.
b)   Level of trade
(24) One company reiterated its claim for an allowance for differences in levels of
     trade on the grounds that, while it sold for export solely to distributors, it sold to
     both distributors and end-users on the domestic market. It was alleged that the
     prices charged to domestic end-users were consistently higher than the prices
     charged to domestic distributors. This request was not granted for the reasons
     given in recital (21) of the provisional duty Regulation.
c)   Credit
(25) It was requested that, in order to determine the credit costs of export sales,
     interestratesprevailing on international markets for borrowing foreign currency
     should be used rather than Indian domestic interest rates. This request was
     granted.
                                    lz
 ---pagebreak--- d)   Currency conversions
(26) Some companies claimed an allowance for currency conversions pursuant to
     Article 2(10)(j) of the Basic Regulation on the grounds that the foreign
     currencies in which they invoiced their export sales had devalued significantly
     against the Indian rupee during the investigation period. These companies
     claimed that, for exchange rate purposes, the date of sale should be the date of
     the purchase order and, in addition, that the exchange rate prevailing 60 days
     before the purchase order date should be used for the dumping calculation. The
     claim that the date of purchase order should be treated as the date of sale could
     not be accepted since this date did not reflect the material terms of sale more
     appropriately than the date of invoice.
(27) However, where applicable, an allowance for currency conversion was made in
     accordance with Article 2(10)(j) of the Basic Regulation by granting the
     exporting producers 60 days to reflect a sustained movement in exchange rates
     of some foreign currencies in which the export sales of the companies concerned
     were invoiced.
(28) As no other arguments were presented concerning comparison of normal value
     and export price, the remaining findings set out in recitals (18) to (21) of the
     provisional duty Regulation are confirmed.
5.   Dumping margins
(29) In the absence of comments on the determination of the dumping margin, the
     methodology set out in recital (22) of the provisional duty Regulation is hereby
     confirmed.
                                  I a-
 ---pagebreak---  (30) After the imposition of provisional measures it was noted that Chandan Steel
       Ltd., which had for the purpose of provisional findings been considered as a
       party without export sales during the investigation period, had actually exported
       the product concerned to the Community during the investigation period.
       Consequently, an individual dumping margin was established for this exporter
      at the stage of definitive findings.
(31 ) The definitive dumping margins expressed as a percentage of the net free-at-
      Community-frontier price are as follows:
      - Bhansali Bright Bars Pvt Ltd. /
          Bhansali Ferromet Pvt Ltd., Mumbai                                 16.6%
      - Chandan Steel Ltd., Umbergaon                                        26.9%
      - Facor (Ferro Alloys Corp. Ltd.), Nagpur                               7.4%
      - Grand Foundry Ltd., Mumbai                                           10.2%
      - Isibars Ltd., Mumbai             '                                    6.6%
      - Mukand Ltd., Mumbai                                                  14.0%
      - Panchmahal Steel Ltd., Baroda                                         8.7%
      - Parekh Bright Bars Pvt Ltd., Thane                                    4.2%
      - Raajratna Metal Industries Ltd., Ahmedabad                           13.0%
      - Venus Wire Industries Ltd., Mumbai                                   12.4%
      - Viraj Alloys Ltd. / Viraj Impoexpo Ltd, Mumbai                        4.8%
(32) The dumping margin definitively established for Indian companies other than
      those cooperating in this investigation, expressed as a percentage of the net free-
      at-Community-frontier price, is 26.9%. In this respect, the Council took into
      consideration the high level of cooperation and set the country wide dumping
      margin at the highest dumping margin found for a cooperating exporting
      producer.
(33) For the new exporter mentioned in recital (6) of the provisional duty Regulation
      (Sindia Steel Ltd.) the definitive dumping margin was established according to
      the approach explained in recital (22) of the provisional duty Regulation. The
      dumping margin definitively established for this company, expressed as a
      percentage of the netfree-at-Community-frontierprice, is 9.5%.
                                       \u
 ---pagebreak---                                       E. INJURY
1.   Preliminary remark
(34) The findings on injury, causation and Community interest in the parallel anti-
     dumping and anti-subsidy investigations are identical,. All company specific
     calculations are based on the same data.
2.   Community industry
(35) After additional verification it was found that the cumulated production volume
     of the Community industry of SSB does not account for 45% of total
     Community production, as erroneously set out in the provisional duty
     Regulation, but for 38% of total Community production. This percentage
     suffices to comply with the conditions in Articles 4(1) and 5(4) of the Basic
     Regulation.
3.   Consumption in the Community, market shares and import volumes from
     India
(36) Following the disclosure, no comments were received as regards consumption
     of SSB in the Community, the market shares and the volume of imports from
     India. Consequently, the findings made in recitals (29) to (32) of the provisional
     duty Regulation are confirmed.
                                       If
 ---pagebreak---  4.    Prices of dumped and subsidized imports from India and undercutting
 a)    Calculation of the undercutting margins
 (37) As explained in the provisional duty Regulation (recitals 33 to 42), a detailed
       undercutting analysis was carried out for each of the Indian producers concerned
       showing significant undercutting margins. The undercutting margins were
       calculated by comparing per product type the weighted average export prices at
       Community frontier level with the weighted average ex-factory sales prices of
      the Community industry to unrelated parties. Indian product types for which no
      matching Community product type was found were excluded from the
      calculation after it had been established that the remaining transactions were
      sufficiently representative. If exports were made through related companies the
      export prices were duly adjusted for costs between importation and resale to the
      first independent customer in the Community as well as for profits accruing. An
      adjustment was made to the Community industry's sales prices for transport
      costs within the Community. Whereas the Indian exporters sold exclusively to
      traders, the Community industry sold to end-users and traders. Consequently,
      the Community industry's sales to end-users were adjusted to a trader level. In
      addition, the Indian export prices were adjusted for handling charges at
      Community border level.
(38) Several Indian producers reiterated their requests for an adjustment concerning
      differences in Indian and Community lead times between order and delivery and
      concerning differences in reliability of delivery time. They claimed in particular
      that they regularly had to issue credit notes to their customers due to late
      deliveries. However, credit notes for late deliveries do not indicate that longer
      Indian lead times or unreliability of delivery times affected the sales price when
      the price negotiations took place. Consequently, the claim for this adjustment
      cannot be granted. In this respect, it was also taken into account that the
       contractual delivery times of the Indian producers often varied between four and
       six months without this having an effect on the agreed sales price.
                                       \C
 ---pagebreak--- (39) All Indian producers also repeated their request for an adjustment for quality
     differences. In particular, they alleged that SSB produced by the Community
     producers had a higher machinability which would reduce cycle times in further
     transformation processes of the SSB. In this respect, it was noted that some
     Community producers did indeed sell a certain proportion of products under a
     trademark indicating higher machinability. However, it was found that there
     was no consistent price pattern indicating that the products with higher
     machinability were sold at higher prices and would thus have a higher market
     value. Consequently, an adjustment could not be granted, since an effect on
     prices and price comparability was not established. In addition, it was noted that
     all Indian producers had made an identical claim for an adjustment, disregarding
     potential quality differences amongst their products.
(40) One Indian company claimed that the sales price of the Community industry
     consisted of a base price and a so-called 'alloy surcharge', i.e. a price element
     for alloys contained in SSB. The company requested that the alloy surcharge be
     excluded from the Community sales prices for the purpose of the undercutting
     and underselling calculations. This request could not be granted since the alloy
     surcharge was part of the sales price that was paid by the customers. In this
     respect, it was noted that the Indian sales prices also contained an alloy element,
     even if this was not expressly referred to in the invoice.
                                       ' ^
 ---pagebreak--- (41) Taking into account the corrections described above, the undercutting margins
     amount to:
      - Bhansali Bright Bars Pvt Ltd. /
         Bhansali Ferromet Pvt Ltd., Mumbai                                 14.5 %
      - Chandan Steel Ltd., Umbergaon                                       14.9%
      - Facor (Ferro Alloys Corp. Ltd.), Nagpur                             13.0%
      - Grand Foundry Ltd., Mumbai                                          13.2%
      - Isibars Ltd., Mumbai                                                19.4%
      - Mukand Ltd., Mumbai                                                 17.8%
      - Panchmahal Steel Ltd., Baroda                                       13.9%
      - Parekh Bright Bars Pvt Ltd., Thane                                   5.8%
      - Raajratna Metal Industries Ltd., Ahmedabad                          15.8 %
      - Venus Wire Industries Ltd., Mumbai                                  12.8%
      - Viraj Alloys Ltd. / Viraj Impoexpo Ltd, Mumbai                      15.7 %
(42) The weighted average undercutting margin calculated for Sindia Steel Ltd. (cf.
      recital (33) above) amounted to 16.8%. It was concluded that these undercutting
      margins were significant.
b)   Allegation of anti-competitive behaviour
(43) In their comments following the disclosure, the Indian companies continued to
      argue that the calculation of undercutting margins as well as the findings on
      other injury factors, causality and Community interest would be meaningless in
      the context of this investigation in view of the Commission decision in the
      competition case IV/35.814, "Alloy Surcharge" (7). This decision stated that
      Community producers of stainless steel flat products had modified 'in a
      concerted fashion the reference values used to calculate the alloy surcharge, a
      practice having the object and effect of restricting and distorting competition
      within the common market'.
(44) In this respect it is recalled that the decision related to stainless steel 'flat
      products' as opposed to stainless steel bars which belong to the category of long
      products. Moreover, the producers of flat products arid the producers of SSB
(7) Commission Decision of 2Î. 1. 1998, OJ L100, 1.4. 1998, p.55.
 ---pagebreak---       are, to a large extent, not identical and the number of SSB producers is
      significantly higher than that of the flat steel producers.
(45) The Indian producers have, however, repeated their allegation that a concerted
      practice existed for SSB. Some of these companies have also lodged a formal
      complaint with the Commission, pursuant to Article 3 of Council Regulation
      (EEC) No 17 (8), concerning SSB. In order to support their allegation, the Indian
      companies submitted that one of the national steel associations in the
      Community circulated to all of its members on a monthly basis a list of the alloy
      surcharges applied by the most important producer in this country. In addition,
      they submitted that this producer applied the same coefficient (so-called yield
      factor) in order to calculate the alloy surcharge for SSB on the basis of the alloy
      surcharge for flat products as a trader in a different Member State. They alleged
      that the information provided conclusive evidence of a concerted practice in the
      SSB market.
(46) It this respect it is important to note that the application of an alloy surcharge
      system as such including the use of a yield factor is not illegal. The alloy
      surcharge system allows a stainless steel producer - in a legal manner - to reflect
      the price variations of the market prices for alloy elements in the sales prices to
       its customers and thus to protect itself against the risk of significant fluctuations
       in the cost of production. It was also noted that the use of an alloy surcharge is
       common to other steel markets outside the Community and has, with a short
       interruption, been applied in the Community for many years. In addition, for
       ECSC-products, Article 60 of the ECSC Treaty and the implementing
       Community legislation requires the Community producers to inform the
 (8) OJ 13,21. 2.1962, p. 204.
                                            15
 ---pagebreak---      Commission and anyone interested of the applicable surcharge (Article 6.b of
     Decision No 37/54 of 29 July 1954 (*)).
(47) Consequently and in accordance with the Commission Decision in case
     IV/35.814, the application of an alloy surcharge system could only be illegal if
     the alloy surcharge system were applied in a concerted, i.e. anti-competitive,
     manner. However, no conclusive evidence of this was found in the course of the
     investigation.
(48) In addition, it was found that the price of the Community producers for identical
     products to comparable customers in identical periods varied, resulting in
     different levels of profitability for the Community industry.
(49) In the light of the above it was concluded that the findings on injury and
     Community interest, including the calculation of undercutting margins, were not
     meaningless as alleged by the Indian companies. Consequently, the Indian
     request that the investigation be terminated forthwith could not be granted.
     Similarly, it was not possible to suspend the anti-dumping investigation until the
     Commission had concluded its investigation relating to the alleged anti-
     competitive behaviour because anti-dumping investigations have to be
     concluded within a maximum of 15 months from initiation according to Article
     6 (9) of the Basic Regulation.
C9) OJ 18, 01.08.1954, p. 470
                                       2o
 ---pagebreak--- (50) However, it was noted that the Commission is continuing its investigation
     regarding the alleged anti-competitive behaviour. Should the Commission find
     that a concerted practice existed, the conditions to initiate a review ex officio
     would be fulfilled. Such a review would be carried out expeditiously, i.e. within
     maximum 12 months, in order to investigate whether and to what extent the
     relevant findings on injury, causation and Community interest are affected by
     such an anti-competitive practice.
5.   Situation of the Community industry
(51) Following the adoption of the Regulation imposing provisional duties no
     comments were received as regards the situation of the Community industry in
     respect of production volume, capacity and capacity utilisation, sales volume,
     market share, sales prices, profitability, employment and stocks. Consequently,
     the findings as laid down in recitals (44) to (55) of the provisional duty
     Regulation are confirmed.
     However, the Government of India questioned the conclusions drawn from these
     findings, in particular it was alleged that the drop in the Community production
     figures cannot be blamed on the decreasing Indian imports. This argument
     concerns causality which is dealt with below. Finally, the Government of India
     claimed that the Community industry increased their sales to related parties
     from 1994 to the IP 12 (see recital 28 of the provisional duty Regulation). This
     does, however, not invalidate the findings and conclusions on total sales (in
     particular a negative development of the market share since 1994) and on sales
     to unrelated parties which are also used for the purpose of price undercutting
     calculations.
(52) On &e basât of the above it was concluded mat the Community industry is
     suffering material iftjury as set out in recital (56) of the provisional duty
     Regulation.
 ---pagebreak---                                    F. CAUSATION
(53) Following the adoption of the Regulation imposing provisional duties, some
     Indian companies questioned whether the injury suffered by the Community
     industry was caused by the dumped and subsidized imports from India. In
     particular, it was alleged that the injury was caused by other factors, namely low
     priced imports from other countries. In addition, it was alleged that other
     Community producers had not followed the same trend as the Community
     industry.
(54) In this respect, it is worth noting that Indian imports were present in significant
     volumes throughout the period considered and peaked at a level of 9.1% market
     share in 1996. It has also been established that these imports were made at
     prices significantly undercutting the Community industry's prices. Account was
     further taken of the fact that a number of traders buy SSB both from Indian and
     Community sources, which leads to the market being transparent and price
     sensitive.
      It was noted that the above trends established for the Indian imports coincided
      with the deterioration of the Community industry's situation, in particular its
      loss of market share and the depression of its prices since 1995. In the presence
      of dumped and subsidized imports of SSB originating in India during the
                                       22.
 ---pagebreak---      investigation period, the Community industry had to lower its prices
     significantly, regardless of the consequences for profitability. Consequently, a
     causal link between dumped and subsidized imports and material injury suffered
     by the Industry was found to exist.
(55) It was also investigated whether factors other than the dumped and subsidized
     imports could have contributed to the injury suffered by the Community
     industry. In this respect, it was noted that imports from other countries were
     made either in quantities below or close to the thresholds set out in Article 5(7)
     of the Basic Regulation and/or at higher prices than Indian imports.
     Consequently these imports cannot have broken the causal link between the
     dumped and subsidized imports from India and injury suffered by the
     Community industry.
(56) In addition, the allegation by some Indian producers that the situation of other
     Community producers was significantly better than that of the Community
     industry was investigated. In this respect, it should be recalled that detailed and
     verified data is only available for the Community industry. Taking into account
     the transparency and the price sensitivity of the SSB market in the Community,
     it seemed however, not unreasonable to conclude that other Community
     producers are likely to have followed a trend similar to that of the Community
     iadttstry, in particular as regards prices.
(57) Finalry, it was argued that the decrease in the SSB sales prices of the
     Community industry since 1995 was the result of a decrease in alloy prices. In
     this respect, it was however noted that any change in the world market prices for
                                      23
 ---pagebreak---       the alloys applies equally to the Indian producers and consequently has no
      influence on the undercutting found. In addition, it was noted that the
      Community industry had also significantly lowered its base prices.
(58) In the light of the above, the findings set out in the provisional duty Regulation
      (recitals (57) to (65)) are confirmed, i.e. that the low priced dumped and
      subsidized imports from India have, when taken in isolation, caused material
      injury to the Community industry. In addition, it has been established that, given
      the amount of dumping involved, the contribution of dumping to the injury
      caused by the imports in question has been significant.
                            G. COMMUNITY INTEREST
(59) Following the adoption of the Regulation imposing provisional duties no
      substantiated comments were received as regards the Community interest
      analysis set out in recitals (66) to (71) of the provisional duty Regulation.
(60) Consequently, it is concluded that the imposition of measures will lead to a
      reinstatement of effective competition that will enable the Community industry
      to regain the lost market share and improve its profitability.
 (61) In the absence of a reaction from the users and importers, it was assumed that
       the impact of any expected price increase would be limited, also taking into
       account the level of the duty proposed. As regards the upstream industry, it was
                                          2.(4
 ---pagebreak---      concluded that a reinstatement of fair trade would lead to an improvement in its
     competitiveness.
(62) Summarising, it was concluded that the findings set out in recitals (66) to (71)
     of the provisional duty Regulation can be confirmed. In particular, there are no
     compelling reasons to suppose that it would be not in the interest of the
     Community to impose measures.
                          H. ANTI-DUMPING MEASURES
(63) Based on the above conclusions on dumping, injury, causal link and Community
     interest, it was considered what form and level the definitive anti-dumping
     measures would have to take in order to remove the trade distorting effects of
     injurious dumping and to restore effective competitive conditions on the
     Community SSB market.
(64) Accordingly, as explained in recitals (72) to (74) of the provisional duty
     Regulation a non-injurious level of prices was calculated which would allow the
     Community industry to cover its cost of production and obtain a reasonable
     return for sales of the product concerned.
(65) One Indian company argued that the calculation of the non-injurious price level
     was incorrect since the profit margin for all product types was identical. It
     should be noted that the non-injurious price level was calculated on the basis of
     the average sales prices per product type minus the actual weighted average
     profit margin of the Community industry plus a reasonable profit, as explained
     above. This approach was deemed to be the most appropriate for the purpose of
     this investigation.
(66) The comparison of the non-injurious price levels with the export prices of the
     Imâkm producers ted \o the following injury margins, expressed in relation to the
     free at Community frontier price level:
     - Bhansali Bright Bars Pvt Ltd, /
         Bhansali Ferromet Pvt Ltd., Mumbai                                18.4%
                                   25"
 ---pagebreak---       -  Chandan Steel Ltd., Umbergaon                                      19.0%
      -  Facor (Ferro Alloys Corp. Ltd.), Nagpur                            16.5%
      -  Grand Foundry Ltd., Mumbai                                         16.6%
      -  Isibars Ltd., Mumbai            \                                  25.5%
      -  Mukand Ltd., Mumbai                                                25.3%
      -  Panchmahal Steel Ltd., Baroda                                      17.6%
     -   Parekh Bright Bars Pvt Ltd., Thane                                  7.5%
     -   Raajratna Metal Industries Ltd., Ahmedabad                         19.8%
     -   Venus Wire Industries Ltd., Mumbai                                 16.1%
     -   Viraj Alloys Ltd. / Viraj Impoexpo Ltd, Mumbai                     20.2%
(67) For the newcomer, Sindia Steels Ltd., as laid down in recital (77) of the
     provisional duty Regulation the weighted average of the injury margins of the
     cooperating Indian companies is applied. This resulted in an injury margin of
     22.1%.
(68) In accordance with Article 9(4) of the Basic Regulation, the duty rate should
     correspond to the dumping margin, unless the injury margin is lower. This led
     to the following rates of duty for the cooperating producers:
     - Bhansali Bright Bars Pvt Ltd. /
         Bhansali Ferromet Pvt Ltd., Mumbai                                 16.6%
     - Chandan Steel Ltd., Umbergaon                                        19.0%
     - Facor (Ferro Alloys Corp. Ltd.), Nagpur                               7.4%
     - Grand Foundry Ltd., Mumbai                                           10.2%
     - Isibars Ltd., Mumbai                                                  6.6%
     - Mukand Ltd., Mumbai                                                  14.0%
     - Panchmahal Steel Ltd., Baroda                                         8.7%
     - Parekh Bright Bars Pvt Ltd., Thane                                    4.2%
     - Raajratna Metal Industries Ltd., Ahmedabad                           13.0%
     - Venus Wire Industries Ltd., Mumbai                                   12.4%
     - Viraj Alloys Ltd. / Viraj Impoexpo Ltd, Mumbai                        4.8%
(69) For Sindia Steels Ltd. the duty rate should be 9.5%.
(70) In order to avoid granting a bonus for non-cooperation and to ensure that no
      circumvention of the anti-dumping measures takes place, it was considered
      appropriate to establish the duty rate for the non-cooperating companies at the
      level of the highest duty rate imposed, i.e. 19.0% since there was a high level of
      cooperation from Indian exporting producers.
                                     2<Ç
 ---pagebreak--- (71) In accordance with Article 14(1) of the Basic Regulation no product shall be
        subject to both anti-dumping and countervailing duties for the purpose of
        dealing with one and the same situation arising from dumping or from export
        subsidization. As the dumping and subsidy margins have been established on
        imports of the product in question ( i0 ) it is necessary to determine whether and
        to what extent the subsidy and the dumping margins arise from the same
        situation.
(72) In the case in question all of the investigated subsidy schemes have been found
        to constitute export subsidies within the meaning of Article 3(4)(a) of
        Regulation (EC) No 2026/97. In these circumstances it is not considered
        appropriate to impose both countervailing and anti-dumping duties to the full
        extent of the relevant subsidy and dumping margins established. Consequently,
        the anti-dumping duties are to be reduced by the amount of the countervailing
        duty established in parallel anti-subsidy investigation to reflect the actual
        dumping margins remaining after the imposition of the countervailing duties
        offsetting the effect of the export subsidies.
(73) Accordingly, the definitive anti-dumping duties are as follows:
        - Bhansali Bright Bars Pvt Ltd. /
          Bhansali Ferromet Pvt Ltd., Mumbai                                               2.2%
        - Facor (Ferro Alloys Corp. Ltd.), Nagpur                                             0%
        - Chandan Steel Ltd., Umbergaon                                                       0%
        - Grand Foundry Ltd., Mumbai                                                          0%
        - Isibars Ltd., Mumbai                                                                0%
        - Mukand Ltd., Mumbai                                                                 0%
        - Panchmahal Steel Ltd., Baroda                                                     8.7%
        - Parekh Bright Bars Pvt Ltd., Thane                                                4.2%
        - Raajratna Metal Industries Ltd., Ahmedabad                                          0%
        - Sindia Steels Ltd., Nashik                                                          0%
        - Venus Wire Industries Ltd., Mumbai                                                  0%
        - Viraj Alloys Ltd. / Viraj Impoexpo Ltd, Mumbai                                      0%
(10) Cf. Council Regulation (EC) No           /98 imposing a definitive countervailing duty on imports of
     stainless steel bars originating in India, published in this OJ.
                                              2>
 ---pagebreak---       - AU other companies                                                     0%
      The duty rates apply cumulatively to the duty rates imposed in the parallel anti-
      subsidy proceeding.
                                 I. UNDERTAKINGS
(74) After expiry of the deadline to submit proposals for undertakings an exporting
      producer submitted a proposal for an undertaking. This company offered to
      respect certain minimum prices. This offer was examined and it was found that
      due to the large variety of the product types concerned and the significant price
      fluctuations for the product concerned it would be difficult to set prices which
      would eliminate the injurious effects of dumped and subsidized imports.
      Consequently, the offer for this undertaking could not be accepted.
J. COLLECTION OF THE PROVISIONAL DUTIES
(75) Considering the conclusions on dumping and injury definitively established, the
     provisional duty should be collected: For the period between entry into force of
     the provisional duty Regulation and entry into force of Regulation (EC) No
      1556/98 the amount secured by way of provisional anti-dumping duty should be
     definitively collected at the duty rate definitively calculated and set out in
      recitals (68) to (70) unless the provisional duty rate is lower than the definitive
     duty rate, in which case the provisional duty rates should prevail..
      For the period following the entry into force of Regulation (EC) No 1556/98 the
      amount secured by way of provisional anti-dumping duty should be definitively
    . collected at the duty rates set out in recital (73).
      Amounts secured in excess of the respective definitive duty rates shall be
      released.
HAS ADOPTED THIS REGULATION:
                                         2?
 ---pagebreak---                                               Article 1
 1. A definitive anti-dumping duty is hereby imposed on imports of stainless steel bars
     falling within CN codes 7222 20 11, 7222 20 21, 7222 20 31, and 7222 20 81
    originating in India.
2. Products manufactured by the companies listed below shall be subject to the
    following rates of duty applicable to the net, free-at-Communityfrontierprice:
                     Manufacturer                    Rate of duty (%)  Taric additional code
    - Bhansali Bright Bars Pvt Ltd.,              "~22                 8226                ""
      Bhansali Ferromet Pvt Ltd., Mumbai
    - Chandan Steel Ltd., Umbergaon                 6                  8593
    - Facor (Ferro Alloys Corp. Ltd.), Nagpur       0                  8400
    - Grand Foundry Ltd., Mumbai                    0                 8401
    - Isibars Ltd., Mumbai                          0                  8402
    - Mukand Ltd., Mumbai                           6                  8403
    - Panchmahal Steel Ltd., Baroda                 87                 8404
    - Parekh Bright Bars Pvt Ltd., Thane            42                8594
    - Raajratna Metal Industries Ltd., Ahmedabad    0                  8405
    - Sindia Steels Ltd., Nashik                    0                  8406
    - Venus Wire Industries Ltd., Mumbai            0                  8407
    - Viraj Alloys Ltd., Viraj Impoexpo Ltd,        0                 8410
       Mumbai
    - All other companies                           0                  8900
3. Unless otherwise specified, the provisions in force concerning customs duties shall
    apply.
                                              Article 2
For the period between entry into force of Regulation (EC) No 1084/98 and entry into
force of Regulation (EC) No 1556/98 the amount of provisional anti-dumping duty
                                               25
 ---pagebreak---  secured by way of Regulation (EC) No 1084/98 shall be definitively collected at the
 rates set out in recitals (68) to (70) of this Regulation, unless the duty rates set out in
 Regulation (EC) No 1084/98 are lower than those set out in recitals (68) to (70), in
 which case the duty shall be definitively collected in the amount corresponding to the
 duty rates set out in Regulation (EC) No 1084/98.
 For the period following the entry into force of Regulation (EC) No 1556/98, the
amount of provisional anti-dumping duties secured by way of Regulation (EC) No
 1556/98 shall be definitively collected at the duty rates set out in Article 1 (2).
Amounts secured in excess of the respective definitive dutyratesshall be released.
                                          Article 3
This Regulation shall enter into force on the day following that of its publication in
the Official Journal of the European Communities.
This Regulation shall be binding in its entirety and directly applicable in all Member
States.
Done at Brussels,
For the Council
The President
                                          Jo
 ---pagebreak---                                                                    ISSN 0254-1475
                                                           COM(98) 581 final
                                              DOCUMENTS
EN                                                                02   11 10
                                    Catalogue number : CB-CO-98-585-EN-C
                                                             ISBN 92-78-39905-1
Office for Official Publications of the European Communities
L-2985 Luxembourg
                                         il