MINISTRY OF
COMMERCE
NOTIFICATION
FINAL FINDINGS
Subject: Anti dumping investigation concerning imports of graphite
electrodes from
ADD/IW/43-Having regard to the Customs Tariff Act
1975 as amended in 1995 and the Customs Tariff (Identification, Assessment and Collection
of Anti Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995,
thereof:
A. PROCEDURE
1.
The Procedure described below has been followed:
i)
The Designated Authority (hereinafter also referred to as the Authority) notified
preliminary findings vide Notification no. ADD/IW/43 dated
ii) The
Authority forwarded a copy of the preliminary findings to known interested parties who
were requested to furnish their views, if any, on .the preliminary findings within forty
days of the date of the letter;
iii) The
Authority also forwarded a copy of the preliminary findings to the Embassies of USA,
Austria, France, Germany, Italy, Spain, China PR and Belgium in New Delhi with a request
that the exporters and other interested parties may be advised to furnish their views on
the preliminary findings;
iv) The
Authority held an oral hearing on
v) NPG
graphite electrodes in these findings refers to normal power grade graphite electrodes and
high power grade graphite electrodes. UHP graphite electrodes refers to ultra high power
grade graphite electrodes.
vi) In accordance
with Rule 16 of the Rules supra, the essential facts/basis considered for these findings
were disclosed to known interested parties and comments received on the same have also
been duly considered in these findings;
vii) The Authority
made available the public file to the interested parties containing non-confidential
version of all evidence submitted to the Authority by various interested parties. All
parties who made request for inspection, in writing, were allowed to inspect the public
file;
B.
PETITIONERS VIEWS
2.
The petitioner raised the following arguments:
a) The petitioner complained of dumping of UHP
electrodes from
b) The goods produced by the domestic industry
are similar to the goods imported from .the subject countries;
c) Normal value of Ucar
is established by the quotations of Ucar for sale in the home
market. The same was supplemented by the
extracts from Carbon Data Bank;
d) The petitioner furnished evidence of export
price also in its petition, on confidential basis, which established dumping by Ucar;
e) All countries within the European community
should be covered in the imposition of duty;
f) Normal value in
g) The export price from
h) In case of China PR, the petitioner
established normal value based on constructed value. The information furnished by the
exporter being inadequate, the Authority should determine the normal value based on
constructed value;
i) The
petitioner furnished details of export price of NPG electrodes from
j) The export price from China PR has
remained the same over the past three to four years in spite of world-wide phenomenon of
increase in the cost of production;
k) The petitioner relied upon the preliminary
findings to established the injury to the domestic industry;
l) The domestic manufacturers are exporting
graphite electrodes to survive. The balance sheets of the companies does not reflect the
correct position, as the companies are engaged in export activities and other activities
not related to production and sale of graphite electrodes;
m) The customs duties were 40 percent during the
investigation period and now have declined to 22 percent. This has adversely affected the
domestic industry;
n) The European Commission, in its findings
relating to Tungstic Oxide and Tungstic
Acid case held in 1993 that an industry may suffer from material injury despite the fact
that it has improved profitability during the reference period, especially when the
improvement is not genuine or lasting and the improved profitability may be because of
other reasons such as exports undertaken by the domestic industry;
o) The profitability of the domestic industry
should be viewed in the light of the fact that graphite electrodes industry is a highly
capital intensive industry involving large outlay of capital;
p) Inadequate profit margins in case of NPG
electrodes and virtually no profit margins in case of UHP electrodes has resulted in
inadequate generation of resources for upgradation of
technology and maintenance of minimum economic standards.
C. VIEWS OF
EXPORTERS, IMPORTERS AND OTHER INTERESTED PARTIES
3. The
importers and exporters have expressed their views, and the same are briefly mentioned
below:
a) The Authority should approach Central Board of
Excise and Customs (CBEC) again and collect authentic import data. In view of varied and
diversified nature of the product, the Authority should not consider single normal value
and export price for the entire range of the product involved;
b) The export price claimed by the petitioner is
not correct in case of Ucar. The Authority should determine
the export price on the basis of the information provided by Ucar;
c) Demand for High Power and UHP electrodes was
9965 MT as on 31.07.97 as against gross capacity of 11490 MT.
d) Ucar furnished
details of electrodes shipped from each country alongwith size
for the investigation period and argued that the total volume of imports claimed at around
2515 MT during 1995 and 1996 by the petitioner is around the double of the exports done by
Ucar;
e) Loss of production: The Steels scenario in
f) It is not established by the petitioner
that they can produce UHP electrodes, nor the producers have technology required to
produce UHP electrodes. This is established by the very fact that the Indian producers
cannot market UHP electrodes at the international prices.
g) The Indian producers were well protected by
the high customs duties and were supplying inferior quality, were raising prices at their
will, had poor after-sales services and gave delayed delivery. The anti-dumping duties
have been requested by the petitioners to protect themselves against the easy access to
international manufacturers.
h) The international producers have minimum
variations in the quality parameters, resulting in consistency. The imported electrodes
are longer in length (upto 110") as against Indian
produce (72"). The Indian producers sell short length also. The longer the electrode,
the better it is.
i) The
imported HP electrodes (by Ucar) are also made using needle calcined petroleum coke (CPC), whereas the Indian producers use
different CPC. The Authoritys decision to club NPG electrodes and HP electrodes is,
therefore, not correct. NPG electrodes and HP are made using different processes and raw
materials and should not be put together as same article.
j) The Authoritys observation that
"various sizes result from the same technology, processing and raw material" is
incorrect. Electrode size depends upon the current carrying capacity. Further, the
chemical compositions of different sizes are not same. The electrodes sold by Ucar differs in dimensions, such as length, nipple size, chemical
and physical compositions and, therefore, cannot be used interchangeably.
k) The contention of the Authority that the Ucar has exported the goods from a country other than the country of
origin is incorrect. Ucar has exported the goods from the
country where it is produced and the same has not been modified in or exported from a
different country.
l) The capacity utilisation
of the petitioner declined for the following reasons:
i)
Expansion of capacity: All the three Indian producers have increased their capacity
from around 23000 MT (1975) to around 43000 MT (1996) and are expected to reach 54000 MT
(1998). At the same time, several units have closed internationally because of excess
capacity;
ii) Non-availability
of power: The three producers have indicated again and again that their production
suffered due to non-availability of power;
iii) Raw material:
Needle coke is not available to the Indian producers, affecting production. This is proved
even from the fact that the Indian producers had to import needle coke from
iv) The capacity utilisation of the Indian producers suffered due to its inability to
export as per projections.
v) The capacity utilisation should be considered in the context of bottlenecks in
capacities at various stages of production;
vi) There were labour unrest during the investigation period for certain period of
time resulting in go-slow which affected the capacity utilisation.
D.
EXAMINATION BY AUTHORITY
4. The
submissions made by the petitioner, exporters, importers and other interested parties have
been examined, considered and, wherever appropriate, have been dealt hereinafter.
E. PRODUCT
UNDER CONSIDERATION, LIKE ARYICLES AND DOMESTIC INDUSTRY
5. Under Rule
2(d) "like article" means an article which is identical or alike in all respects
to the article under investigation for being dumped in India or in the absence of such an
article, another article which although not alike in all respects, has characteristics
closely resembling those of the articles under investigation.
6. Arguments
raised by the interested parties and the examination of the same by the Authority is as
under
Arguments
raised:
a) There are
three types of graphite electrodes, namely NPG electrodes, UHP electrodes, and High Power
electrodes. The clubbing of High Power with NPG electrodes done by the Authority is
inappropriate, as the two differ in respect of a number of technical parameters. Liaoning Minmetals has argued that their
High Power electrodes are equivalent to the NPG electrodes of the Indian industry. The
exporter has further argued that the its NPG electrodes differs from Indian NPG electrodes
in terms of consumption. The exporter claimed that consumption of its NPG electrodes is
higher by 20% compared to consumption of Indian NPG electrodes.
Authoritys
position:
The above
contention, in fact, establishes that the high power electrodes are a variation of NPG
electrodes. Though the NPG electrodes imported from China PR and produced by the Indian
industry differ in terms of some technical parameters, the two are consumed
interchangeably, are similar in terms of functions and uses, manufacturing technology,
pricing, distribution & marketing and tariff classification. Further, Liaoning Minmetals itself has accepted
that its high power is similar to NPG electrodes produced by the Indian industry. The
Authority further notes that though the exporter volunteered to furnish its cost of
production for high power, the same was not furnished.
Arguments
raised:
b) M/s.
Engineers International produced evidence in the form of a letter from M/s. Sunflag Iron and Steel Ltd. and argued that the graphite electrodes
produced by Ucar is not a like article to the graphite
electrodes produced by the domestic industry. The letter produced by Engineers
International states, with regard to Ucars electrodes,
that the electrode nipple length is 50 mm more than existing nipple and, therefore, these
electrodes (produced by Ucar) cannot be used in conjunction
with existing electrodes.
Authoritys
position:
The Authority
observes that the evidence produced by Engineers International, in fact, establishes the
claim of the petitioner that the consumers switched their requirements between the
overseas and the Indian product. Even if the goods imported from the subject countries
and/or goods produced by the Indian producers require minor modifications/ alterations,
before consumption, as appears from the letter of M/s. Sunflag
Iron and Steel Ltd., the test of substitutability is not disproved.
7. The
product under consideration which has been investigated for dumping has been defined in
the preliminary findings, which is graphite electrodes of the following two types:
Ultra
High Power grade graphite electrodes (referred to as UHP electrodes);
Normal
Power grade graphite electrodes, including its variations, High Power grade (referred to
as NPG electrodes).
8. In order
to establish that the graphite electrodes produced by the domestic industry is a like
article to the graphite electrodes exported from the subject countries, the Authority took
into account such characteristics as physical characteristics (size, chemical composition,
raw materials), manufacturing process and technology, functions and uses, product
specifications, pricing, distribution & marketing, and tariff classification of the
goods.
9. The
Authority has compared the characteristics of the UHP graphite electrodes produced by the
domestic industry with the characteristics of the UHP graphite electrodes from the subject
countries, except China PR to satisfy the test of like article. Similarly, the Authority
has compared the characteristics of the NPG graphite electrodes produced by the domestic
industry with the characteristics of the NPG graphite electrodes from
10. The Authority notes
that the graphite electrodes produced and sold by the domestic industry has
characteristics closely resembling to the graphite electrodes exported from the subject
countries, even though some of the factors are not identical.
11. The Authority confirms
paras 5 to 9 of the preliminary findings and confirms that NPG
electrodes produced by the domestic industry is a like article to NPG electrodes exported
from China PR and UHP electrodes produced by the domestic industry is a like article to
the UHP electrodes exported by the subject countries excepting China PR within the meaning
of the rules supra.
F.
DUMPING
12.
Under Section 9A(1)(c), normal value in relation to an article means:
(i)
the comparable price, in the ordinary course of trade, for the like article when
meant for consumption in the exporting country or territory as determined in accordance
with the rules made under sub-section (6); or
(ii) when there are
no sales of the like article in the ordinary course of trade in the domestic market of the
exporting country or territory, or when because of the particular market situation or low
volume of the sales in the domestic market of the exporting country or territory, such
sales do not permit a proper comparison, the normal value shall be either-
(a) comparable representative price of the like article
when exported from the exporting country or territory or an appropriate third country as
determined in accordance with the rules made under sub-section (6); or
(b) the cost of production of the said article in the
country of origin along with reasonable addition for administrative, selling and general
costs, and for profits, as determined in accordance with the rules made under sub-section
(6):
Provided that in
the case of import of the article from a country other than the country of origin and
where the article has been merely transhipped through the
country of export or such article is not produced in the country of export or there is no
comparable price in the country of export, the normal value shall be determined with
reference to its price in the country of origin.
13. Arguments raised by
the interested parties and the examination of the same by the Authority is as under:
Arguments
raised:
I) M/s.
Hindustan Produce Company wrote that although all the arguments raised by them were
included in the preliminary findings, neither their name nor the name of the exporter
represented by them (M/s.
Authoritys
position:
The Authority
notes that neither Hindustan Produce company, nor its principals have filed any response
to the exporters questionnaire sent by the Authority. Since the exporter has not
furnished information requested by the Authority, the Authority has not determined
separate dumping margin in respect of the exporter.
II)
Liaoning Minmetals has
raised the following arguments:
a) In
b) The
exporter has not dumped NPG electrodes in
c) The cost
of production estimated by the Authority is incorrect. The cost of production depends on
the costs of major inputs such as power, calcined petroleum
coke and coal tar pitch, which are available in abundance and competitive prices in China;
d) In case
there were any deficiencies in the information furnished by the exporter, the exporter
should have been asked to explain.
e) The
exporter volunteered to give a price undertaking in the event of imposition of
anti-dumping duty.
Authoritys
position:
The Authority
notes that the exporter has not furnished complete information requested by the Authority.
The argument of the exporter that additional information could be called by the Authority
from the exporter is not tenable, as it is obligatory on the part of the exporter to
furnish complete response to the Authority in the form and manner prescribed and within
the time limits laid down by the Authority. The Authority, therefore, considers it
appropriate to determine dumping margin with reference to Liaoning
Minmetals also on the basis of cost of production constructed
for China PR.
With regard to the
willingness of the exporter to extend price undertaking, the Authority observes that the
exporter has merely extended its willingness to offer price undertaking and has not made
any offer in terms of prices at which it was willing to export the goods to
III)
European Union:
The views expressed by European Union are, inter-alia,
as under:
Arguments
raised:
a) There are
no specific findings with regard to the alleged dumped imports from
Authoritys
position:
The Authority has
given detailed methodology with regard to determination of normal value. In case of
exports from these countries by Ucar, normal value has been
determined on the basis of normal value in
Arguments
raised:
b) The
dumping margin in case of
Authoritys position:
It is clarified
that the dumping margin in case of
IV) Ucar Inc.
Ucar International Inc. authorised M/s.
Engineers International to attend meetings on their behalf but reserved its right to also
present information directly to the Authority.
Arguments
raised:
a) The
contention of the Authority that Ucar has exported the goods
from a country other than country of origin is incorrect. Ucar
has exported the goods from the country where it is produced and the same has not been
altered or exported from a different country.
Authoritys
position:
The finding of the
Authority in para 15 of the preliminary findings that even
though Ucar might have produced the electrodes at any of its
plant, the exports to
With regard to
export price, the Authority observes that Engineers International furnished, on behalf of Ucar, volume of exports made and size of the electrode exported by
it from different countries. The exporter has, however, not furnished export price of
different sizes exported by it from different countries. The information furnished by
Engineers International, therefore, cannot be relied upon for determination of dumping
with reference to the size of electrode. The information has, however, been correlated
with the information furnished by the importers, to the extent available, to determine the
extent of injury to the domestic industry.
V)
Other issues:
With regard to the
non-submission of the import data by CBEC, the Authority observes that the primary
responsibility for furnishing the information with respect to the export volumes and
prices rests with the exporters. The exporters known to be concerned as also the Embassies
of the concerned countries were informed by the Authority about the investigations and
were requested to make available relevant information. Further, the importers were also
requested to furnish, inter-alia, the details of imports made
by them. The Authority relied upon the information furnished by the exporters and
importers to the extent necessary and feasible. The Authority is, therefore, in possession
of information relating to imports of graphite electrodes in India., Non-receipt of any
information from CBEC does not imply that the Authority is not in possession of the
sufficient information to arrive at a just and fair decision. Further, contention of the
interested party(ies) is factually incorrect to the extent
that the Authority has not determined uniform export price and/or normal value for all
types of graphite electrodes. The Authority has determined separate normal values and
dumping margins in respect of NPG and UHP electrodes for each country under investigation.
In view of the
foregoing, the Authority confirms the preliminary findings with regard to determination of
dumping. The dumping margins comes as under:
| S. No. |
Name of the Exporter/Country |
Dumping margin (% of export price) |
| 1. |
Ucar Inc., |
45 |
| 2. |
In case of exports from |
57 |
| 3. |
In case of exports from China PR a.
b. |
75 70 |
| 4. |
93 |
|
| 5. |
60 |
|
| 6. |
88 |
|
| 7. |
56 |
|
| 8. |
43 |
G.
INJURY
14. Arguments raised by
the interested parties and the examination of the same by the Authority is as under
Arguments
raised:
a) The
preliminary findings are not specific on profitability of the Indian industry. In spite of
increase in selling prices by the Indian industry for both NPG and UHP electrodes, it is
difficult to accept that a small decline of 5% in the sales should have resulted in
financial loss or loss in profits.
b) The
conclusion with regard to the material injury is not convincing in view of increase in
production, selling prices and marginal reduction in sales quantities. The conclusion with
regard to threat of material injury appears to be based on conjecture/remote possibility,
and the same is not supported by any statistics/figures.
Authoritys position on (a) and (b) above:
The Authority has
given a detailed finding on injury to the domestic industry. The factors which led to
determination of threat of material injury have also been brought out in the preliminary
findings. The finding of injury to the domestic industry is based on all factors
cumulatively and collectively affecting the domestic industry.
Arguments
raised:
c) The Indian
industry increased prices of 20" elatttrodes during the
investigation period from Rs. 90000 pmt to Rs. 116000 pmt. No producer who is under the threat of imports can
afford to increase the prices and would, in fact, reduce the prices substantially.
d) It is a
general trade practice that an exporter sells at higher prices in the domestic market as
compared to export market to get a foothold in such market.
Authoritys
position on (c) and (d) above:
The argument, in
fact, is an acceptance of the fact of dumping by such exporter. The reasons for such
dumping are irrelevant. Though the petitioner companies increased their prices, the same
were in view of the increase in the cost of production. The increase in the selling prices
by the petitioner companies has to be seen with reference to the reduction in the market
share of the petitioner companies. As observed in the preliminary findings, the market
share of the domestic industry declined sharply, from 99% (1992-93) to 72.58% (1995-96),
whereas the same increased sharply from 0.96% (1992-93) to 27.42% (1995-96).
Arguments
raised:
e) Considering
the preliminary findings that the domestic industry was forced to sell UHP electrodes at
losses and the fact that the domestic industry was exporting UHP electrodes at prices
lower than the prices in the domestic market, the Indian industry would be making huge
losses on the exports also. In such a situation, the share of UHP electrodes in the
petitioner companies production would not be steadily going up. Further, since the
Indian industry is making profits on NPG electrodes (as observed by the Authority in the
preliminary findings), the share of NPG electrodes would haves gone up.
Authoritys
position:
It would be
incorrect to assess the profitability of exports by comparing with the prices at which UHP
electrodes is sold in the home market by the Indian companies, without considering the
cost of production. Information available with the Authority establishes that the cost of
production of the Indian industry is lower for the electrodes produced for exports, as the
Indian companies had certain cost advantages in case of exports. The Authority has,
however, not investigated the profitability of the petitioner companies from exports, as
the same is beyond the scope of the present investigations.
Arguments
raised:
f) Total
imports of UHP electrodes constitutes 3.5% of total production of electrodes in the
country.
Authoritys
position:
The comparison of
imports of UHP electrodes with the total production of electrodes by the Indian industry
is inappropriate. The total imports of electrodes in India from the subject countries are
significant with reference to the total consumption of electrodes in India, as brought out
in para 41 of the preliminary findings.
Arguments
raised:
g) The
preliminary findings establishes that the Indian industry was making profits on sale of
NPG electrodes (and, therefore, there is no injury to the domestic industry on NPG
electrodes).
Authoritys
position:
The Authority
holds that the domestic industry was selling NPG electrodes at profit in the investigation
period. Financial losses to the domestic industry is not a pre-requisite to hold that the
domestic industry has suffered injury. All the factors brought out in the preliminary
findings, collectively and cumulatively establish that the domestic industry has
suffered material injury and the imports of NPG electrodes from China PR pose a threat of
material injury.
Arguments
raised:
h)
Decline in the sales of Indian industry is due to closure of electric arc furnace.
Authoritys
position:
The claim of the
interested parties that the Steel production has gone down in
Arguments
raised:
i)
Quantum of injury has not been ascertained and it has been assumed that the price
differential between the landed price and the sale price in
Authoritys
position:
The Authority has
consistently ascertained the extent of injury to the domestic industry as the difference
between the fair selling price (for the domestic industry) and the landed price of
imports. Correlation of the normal value with the landed price of imports to assess the
extent of injury is not supported by law.
15. With regard to the
contention of Liaoning Minmetals
that consumption of its NPG electrodes was higher by 20 percent, the Authority notes that
the same is relevant for determination of the extent of injury. The Authority further
notes that there is no denial of the claim of Liaoning Minmetals by the petitioner. Though the argument does not establish
that the goods produced by the petitioner are not like article to the goods exported by Liaoning Minmetals, it would be
necessary to allow price adjustment on account of higher consumption while comparing with
the Indian electrodes.
16. The contention that
the petitioner cannot produce UHP electrodes is unsubstantiated and without merit, as the
petitioner companies produces electrodes which are being sold as UHP electrodes not only
in the Indian market but also overseas.
17. Preliminary findings
with regard to the injury to the domestic industry is not based on any single parameter,
such as production, sales, stocks, etc. affecting the domestic industry. The Authority has
very clearly held in the preliminary findings that various indicators relating to the
domestic industry, collectively and cumulatively
establish that the domestic industry has suffered material injury. Since imports from more
than one country are being simultaneously subjected to anti dumping investigation, the
injury to the domestic industry has been assessed cumulatively from the imports from these
countries in accordance with the conditions specified in Annexure II to the Rules. The
arguments of the interested parties that the production or capacity utilisation
suffered because of non-availability of power or raw materials (CPC) or bottlenecks in the
production or inability to meet the export projections does not establish that the
domestic industry has not suffered material injury.
H.
CAUSAL LINK
18. In establishing that
injury to the domestic industry has been caused by the dumped imports, the Authority took
into account the following factors:
i)
Reduction in market share of the domestic industry was a direct consequence of the
imports from the subject countries;
ii) imports
from the subject countries resulted in significant price undertaking in the Indian market;
iii) Imports
from the subject countries resulted in significant price suppressions in the Indian
market, preventing the Indian industry from recovering its price increases.
I.
FINAL FINDINGS
19.
The Authority, in view of the foregoing concludes that:
NPG electrodes originating in or
exported from China PR and UHP electrodes originating in or exported from USA, Austria,
France, Germany, Italy, Spain, and Belgium has been exported to India below its normal
value;
the domestic industry has suffered
material injury;
the injury has been caused to the
domestic industry by the exports originating in or exported from the subject countries.
20. The Authority confirms
the preliminary findings with regard to imposition of anti- dumping duty and recommends
imposition of definitive anti-dumping duties on all exports of NPG graphite electrodes
(including its variation, High Power) originating in or exported from China PR and all
imports of UHP electrodes originating in or exported from the USA, Austria, France,
Germany, Italy, Spain, and Belgium at the rates specified below:
S. No. |
Products originating in or exported from |
Name of exporter/country |
Size of the electrode |
Amount of Duty (Rs. pmt) |
1. |
Any exporter |
between and including 26" to 30" |
NIL |
|
IN CASE OF |
||||
2. |
Peoples Republic of |
a.) b.) c.) Any other exporter |
all sizes upto
24" all sizes upto
24" all sizes upto
24" |
5517 13114 20818 |
IN CASE OF HIGH POWER
GRAPHITE ELECTRODES |
||||
3. |
a.) Ucar Inc.
b.) Exporter other than above |
all sizes upto
24" all sizes upto
24" |
20714 20714 |
|
4. |
a.) SGL Carbon AG
b.) Exporter other than above |
24 upto and including 22 24 upto and including 22 |
10337 22235 10337 22235 |
|
5. |
Any exporter |
all sizes upto
24" |
30997 |
|
6. |
Any exporter |
all sizes upto
24" |
22947 |
|
7. |
Any exporter |
all sizes upto
24" |
28649 |
|
8. |
Any exporter |
all sizes upto
24" |
18427 |
|
9. |
Any exporter |
all sizes upto
24" |
18220 |
|
21. Subject to above, the
Authority confirms the preliminary findings dated 9.6.1997.
22. An appeal against this
order shall lie to the Customs, Excise and Gold (Control) Appellate Tribunal in accordance
with the Act supra.
RATHI VINAY JHA,
Designated Authority