MINISTRY
OF COMMERCE
NOTIFICATION
Subject: Anti-Dumping investigation
concerning imports of Dead Burnt Magnesite(DBM) originating
from the People’s Republic of China -Preliminary Findings.
F. No. 7/2/94-ADD-The Government of
India 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
2.
The procedure described below has been followed:
(i)
The Designated Authority
(hereinafter referred to Authority), under the above Rules, received a written petitioner
from Magnesite Association of India on behalf of the domestic industry, alleging dumping
of dead burnt Magnesite (hereinafter referred to DBM) originating from the People’s
Republic of China; (hereinafter referred to China PR).
(ii)
The Authority notified the Embassy of China PR about the receipt of dumping
allegations made by the petitioner before proceeding to initiate an investigation in
accordance with sub-rules (5) supra.
(iii)
The Authority issued a Public Notice dated 16.5.1995 published in the Gazette of
India, Extraordinary, initiating anti dumping proceedings concerning imports of DBM
classified under heading 2519.90 Schedule I of the Customs Tariff Act, 1975 and No.
2519.90.03 under Indian Trade classification (Based on harmonised Commodity Description
and Coding System) originating from the Peoples’ republic of China.
(iv) The Authority
forwarded copy of he said public notice to the known exporters, importers, industry
associations and to the complainant and gave them an opportunity to make their views known
writing and to request for an oral hearing.
(v)
All the exporters were
provided a copy of the petition filed by the domestic industry. A copy of the petition was
also supplied to the embassy of the People’s Republic of China.
(vi)
The Authority sent
questionnaires, to elicit relevant information, to the following exporters.
1.
M/s. China National Metals & Minerals, Import and export Corporation, China
2.
M/s. Zhuhal
metals & Minerals Co. Ltd.,
3.
M/s.
4.
M/s.
5.
M/s. Otavi
Otavi Minen Act Metgenthalerall Co.,
(vii) The
Embassy of the People’s Republic of
(viii)
Indian Refractory Makers Association, an association of user industry, was also
provided with a copy of the petition and an opportunity to furnish information relevant to
the investigation in accordance with Rule 6(5) of the Rules supra.
(ix) The
questionnaire was sent to the following importers of DBM:-
(1)
M/s. Steel Authority of
India, Bokaro
(2)
M/s. Steel Authority of
India, Bhilai
(3)
M/s. Steel Authority of
India, Rourkela
(4)
M/s. Vizag
Steel Plant, Vishakapatnam
(5)
M/s. Tata
Iron & Steel Co.Ltd., Jamshedpur
(6)
M/s. Indian Iron & Steel
Co. ltd., Bumpur
(7)
M/s. Steel Authority of India, Durgapur
(8)
M/s. Bharat Refractories
Ltd., Dhanbad
(9)
M/s. Burn Standard Co. Ltd.,
Calcutta
(10)
M/s. Orissa Cement Ltd., Sundargarh
(11)
M/s. Orissa
Industries Ltd.,
(12)
M/s. Tata
Refactories Ltd., Karuppur, Salem
(13)
M/s. Marathwada
Refractories Ltd., Aurangabad
(14)
M/s. Valley Refractories
Ltd., Dhanbad.
(x)
An
1. Indian
Refractory Makers Association, Calcutta
2. M/s.
Burn Standard Ltd.
3.
M/s. Orissa Cement Ltd.,
4.
M/s. Orissa Industries Ltd.
(xi) All
the parties who attended the said public hearing were advised to present the submissions
made in the public hearing in writing for obtaining counter comments from the other
party(ies) to the investigation and the written submissions made by the party(ies) were
made available to the other party(ies) for their counter comments.
(xii) The
Authority sought and verified information deemed necessary for the investigation, and to
this end investigations were carried out at the premises of the following companies:
a)
M/s. Tamil Nadu Magnesite Corporation, Salem
b)
M/s. Dalmia
Magnesite Corporation, Salem
c)
Office of the petitioner,
i.e. Magnesite Association of India, Salem
(xiii) The Authority wrote to the DGCIS, Calcutta for supplying import details of DBM having MgO content ranging from 85% to 92% DGCIS. Calcutta replied that the said details are not being maintained and therefore cannot be supplied.
(xiv) The
Authority also conducted cost investigation and worked out optimum Cost of Production and
Cost of Make and Sell DBM in India on the basis of Generally Accepted Accounting
Principles and the principle of the best available information in accordance with rule 6(8) supra to ascertain
the quantum of anti dumping duty necessary to remove the injury to the domestic industry.
(xv) The
investigation covered the period from 1st April, 1993 to 31st March,
1994.
(xvi) Under
the Rule 17 supra, the Central Government has extended the time limit by six months to
conclude the investigation.
B.
PETITIONER’S VIEWS
3.
The petitioner made the following main points:
(a)
Product processes in Chin and in India are similar and consequently the cost of
production in two countries are not expected to differ widely.
(b)
There is no inherent natural advantage in Chinese methodology of production,
processing shipment and deliver,
(c)
The articles are like, regardless of the origin.
(d)
The users are the same,
regardless of the origin
(e)
Heavy dumping is being done
by China.
(f)
Indian producers have begun
to suffer grievous injury and are facing extinction.
(g)
This injury is primarily and
predominantly due to Chinese dumping of large scale imports of DBM at abnormally low
prices which forced domestic producers to curtail production and to take recourse to
lay-off, even voluntary retirement of workmen to trim down the labour force which could
not be gainfully employed.
(h)
It is in India’s
interest to impose adequate anti-dumping duty on Chinese DBM.
(i)
The DBM being imported from
North Korea is on superior grade having 93% MgO content, and therefore does not fall into
the product into consideration, which is DBM having MgO content 85% - 92%.
4.
None of the exporters or their representatives attended the public hearing or submit any comment in writing.
5.
Importers and Indian Refractory Makers Association (hereinafter referred to as
IRMA) denying the various allegations made by the petitioner, highlighted the following
main points:-
(a)
Production by
petitioner’s members does not constitute 75% of the total production in
(b)
DBM being produced by the domestic industry and the reference grade DBM being
imported from the China RP are not “like
product”. Member petitioner does not produce reference grade of the same quality as
that of Chinese DBM.
(c)
Production of DBM having MgO content between 90% to 92% and Silica content less
than 4%^ is very negligible in India. The imports of DBM and fused Magnesite from the
China RP having MgO contents more than 92% does not have potential of causing material
injury, real or foreseen.
(d)
Rates of supply of DBM from China are higher than those from Indian Supplies.
Inspite of cheaper import price from North Korea as compared to China, imports from North
Korea have declined in 1993-94 as compared to 1992-93. Price is therefore, not the sole
consideration for import of Chinese DBM.
(e)
Demand for DBM with less than 92% MgO content has already reduced and is likely to
be curtailed in the coming years.
(f)
Domestic industry is not in a position to meet full demand. The Indian DBM industry
has not been able to produce and supply DBM in spite of firm orders in hand.
(g)
China RP has imposed export duty on exports of DBM.
(h)
The present high Customs duty on imports of DBM has been hurting the user industry
for quite some time.
(i)
Reference to imposition of anti dumping duty by EC is extraneous and misleading, as
member countries of EC produce DBM having 90% MgO and less than 4% Silica content.
(j)
cost of Production in China is much different from India in view of certain natural
advantages enjoyed by China, productivity of labour, waste ratio etc.
(k)
Since M/s. Himalayan magnetite has been referred to BIFR in 1990-91, there cannot
be any injury to them because of importation from China.
(l)
The imports prices from the People’s Republic of China are directly affected
by quantity of DBM ordered, chartering of shipping vessel at favorable rates, bulk or
packaged shipments etc.
6.
The submissions made by the importers, petitioner and other interested parties have
been examined and considered while arriving at
these findings and have been dealt with at appropriate places in these findings.
7.
The Authority confirms, in the absence of any direct response from the exporters in
the prescribed format having made the findings on the basis of the information available
to it and as per Rule 6(8) supra.
8.
Dead Burnt Magnesite is a naturally occurring magnesium carbonate. It can have MgO
content ranging from 80% to 99%. The dead Burnt Magnesite under consideration involves MgO
content ranging from 85% to 92% and has been referred
to as reference grade DBM in these findings. Dead Burnt Magnesite is mainly used in
the refectory industry to make formed and unformed refractories which are then used in the
Steel making and Cement industries. Dead Burnet Magnesite is classified under customs code
2519.90 of the Customs Tariff and under 2519.90.03 under Indian Trade Classification
(based on Harmonised Commodity Description).
9.
Indian Refectory Makers Association stated that grade and qualities of DBM vary,
amongst other factor(s) with MgO and Silica contents in it. The higher Silica impurities
are not suitable for the principal/major range of basis refractory productions of their
members and pleaded that the DBM being produced by the domestic industry and the reference
grade DBM being imported from the PR of China are not like product.
10. the
petitioner submitted that the DBM of the reference grade, produced in India is a
“Like Article” the technology and type of equipment used is more or less the
same worldwide. Both Chinese and Indian producers use a multitude of kiln types (shaft and
rotary for dead brining). Both use are as mined and hand sorted and methodology for
crushing screening, sizing, grinding and bagging of the article is the same both in China
and in India.
11. The
petitioner argued that DBM having an MgO content higher than 92 percent requires special
intermediate processes such as beneficiation by Floatation process or chemical
beneficiation before calcining. This has not been refuted by
IRMA, IRMA has argued that DBM having MgO content between 99-92% is not produced in
substantial quantities. It was also noted that the DBM
being imported from China and being produced by the domestic industry are being
used interchangeably. The Authority, after considering all these factors conclude that the
DBM being imported from China and that produced by the domestic industry are like article
under the rules supra.
12. The
Authority finds that though the contents of impurities in the form of Silica content may
have impact on the quality of DBM to be used for specific applications, MgO contents seems
to be the major factor in determining the grade of
DMB, IRMA admitted that MgO content is one of the major determinates, though the same is
not he sole factor. It is obvious that lower the MgO content in DBM, higher would be
impurities or contents of foreign material other than MaO,
like Silica. Authority, however, noted that IRMA. The association of the user industry,
could not provide sufficient documentary evidence about the specification of DBM being
procured by their members from Domestic Industry and that imported from China. On the
other hand, during the investigation, it is noticed that the reference grade material has
been imported from China as well as
procured from prima-facie conclusion that the DBM of reference grade has product, the
customers are common and both being used interchangeably.
13. The
Authority finds in view of the above that reference grade of DBM of Chinese origin being
imported into
H.
DOMESTIC STATUS
14. The
petition has been filed by Magnesite Association of India, E 2 Maharani Bagh,
(1) M/s. Tamil Nadu Magnesite Corporation Ltd., Salem having its works at Salem .
(2) M/s. Dalmia Magnesite Ltd., Salem, having its works at Salem.
(3) M/s. Khaitan Hostombe Spinels Ltd., having its works
at Tanakpur, Dist. Nanital.
(4) M/s. Almore Magnesite Ltd., having its works at Almora
(5) M/s. Himalayan Magnesite
Ltd., having its woks at Pithorgarh
15. Magnesite
Association of India is an Association of Magnesite Miners. Manufacturers and Traders in
India and out of 20 producers of DBM in Indian. 16 producers are members of the Association. The petitioner represents producers
accounting for nearly 87% of the total production of reference grade DBM meant for
external sale in 1993-94. The petitioner has, however, requested to consider the companies
mentioned in para 14 supra whose actual production in 1993-94 accounted for over 75% of
the total production of DBM meant for external sales in that year as forming the part of
the domestic industry. It has been, however, found during the course of the investigation
that M/s. Almora Magnesite Ltd.,
is related to M/s. Tata Refractories
Ltd., who is an importer of the subject goods M/s. Almora Magnesite Ltd. has therefore not been considered as part of domestic
industry in accordance with rule 2(b) of the
Rule supra. The Authority confirms that the remaining four companies listed in para 14
above constitute domestic industry in accordance with rule 2(b) of the Rules supra.
16. The
petitioner has not provided domestic prices of DBM in the People’s Republic of
17. None
of the exporters have furnished any information with regard to Normal value, though some
of them acknowledge the letter enclosing the copy of initiation notification and
questionnaire sent by the Authority and had desired information which was also supplied to
them. Though IRMA claimed that the cost of production in China is much different from
India in view of certain natural advantages enjoyed by China, neither they nor any other
party quantified the extent of adjustments required in this regard.
18. Suggestions
of petitioner to consider either Turkey as reference country having domestic price of USD
213/- MT of DBM or India as a surrogate country was made public by the Authority through
Gazette Notification of initiation of investigation and informed to the interested
parties. In spite of the ample opportunity provided to them through correspondence as well
as in a meeting arranged on 27.6.95, none of them raised any objection or provided
information besides the petitioner.
19. Under
section 9A sub-section (1) Clause (c), the normal value may be determined on the basis of
comparable representative price of the like article when exported from the exporting
country or from an appropriate third country, or
the cost of production of the said article in the country of origin. Considering the facts
of the case, the Authority decided to take into account
the constructed cost at US$ 182 per MT as the Normal value under sub clause (c)(ii) (b).
20. The
Authority notes that the import details reported by the importers for the purpose of
custom clearances, as compiled by DGCIS, Calcutta cannot be relied upon for the purpose of
export price determination, as all the imports of DBM having MgO content ranging from 85%
to 99% have all been cleared under custom code 2519.90 and segregate data about imports of
the reference grade DBM are not available with DGCIS, Calcutta, as detailed in para 2
supra. None of the exporters to whom request was made by the Authority has made the
relevant information available in the prescribed proforma. The importers have, however,
responded to the Authority’s request for information.
The import details furnished by the importers are cumulatively more than the import
details furnished by the petitioner. The Authority has, therefore, arrived at weighted
average export price for each exporter on the basis of the details furnished by the
importers, as detailed in the following paras.
21. The
importers have furnished following details in the form of a statement.
a)
The Name and addresses of the exporters who have exported the subject goods.
b)
A statement containing transaction wise details of
imports, such as quantity imported, CIF value, landing charges, handling charges,
custom duty and countervailing duty paid, and landed value of the imports.
c)
A statement containing
summerised position of imports.
d)
A Statement containing
details of purchase of the subject goods from the domestic manufacturers.
The
Authority has, on the basis of the above information worked out exporter wise export
price.
22.
The petitioner claimed adjustments of USD 55 per MT towards insurance and freight
charges, 0.68% on CIF towards Agents Commission (as the reference grade DBM of Chinese
origin material is being offered by agents of manufacturer of the article in China PR and
USD 20 per MT towards inland transportation cost from Chinese manufacturing plant to be
Chinese port because the plants are located 400 – 1000 kilometers away from the
Chinese ports.
23. IRMA,
as association of user industry while pleasing that FOB or CIF prices for any goods
including DBM are substantially independent entities, objected to the derivation of FOB
export price by deducting freight from CIF export price. Authority finds that the
association, though objected to the derivation of FOB price from CIF, has neither provided
the figures of FOB export price nor the extent of freight and insurance element in CIF
price inspite of the fact that their members have imported the reference grade material
from China PR during the investigation period.
24. Authority
examined the views of the petitioner and user industry in the light of written submission
made by the importers and decided to make adjustments of 0.68% and 1.125% of cif export
price towards agents commission and insurance respectively and USD 35 per MT towards
freight in the cif export price to work-out the FOB export price. In the absence of
documentary evidence, the adjustments for inland transportation in FOB export price as
claimed by the petitioner has not been considered in these provisional findings an the
same has been treated as export price top compare with normal value.
25. For
the purpose of a fair comparison between the normal value and the export price, the
authority took into account the information supplied by the petitioner, the importers, and
the best information available with it in the absence of any direct response in the
prescribed form and manner from the exporters. The Authority has compared normal value
with weighted average export price for DBM of the reference grade for individual exporter and arrived at Dumping Margins as Follows:
Exporter
In USD/MT
Dumping Margin
China Metallurgical Import Export Corpn.
157.25
Sima Resources Gmbh
26. The
Authority notes that the Normal Value and Export Price during the investigation period
only are relevant for deciding dumping, and the current Export Price to India or
international prices or export duty levied by China PR are not relevant for the purpose.
27.
Under Rule 11 supra, when a finding of injury is arrived at, such finding shall
involve determination of the injury to the domestic industry, “… taking into
account all relevant facts, including the volume of dumped imports, their effect on price
in domestic market for like articles and the consequent effect of such imports on domestic
producers of such articles….” In considering the effect of the dumped imports on
prices. It is considered necessary to examine whether there has been a significant price
undercutting by the dumped imports as compared with the price of the like product in
India, or whether the effect of such imports is otherwise to depress price to a
significant degree or prevent price increases, which otherwise would have occurred, to a
significant degree.
28. For
the examination of the impact on the domestic industry in India, the authority considered
such further indices having a bearing on the state of industry as production, capacity
utilisation, sales, stock profitability and net sales realisation.
(a) Volume
and Market Share of Dumped Import.
29. Imports of DBM from
the People’s Republic of China increases from 11179 MT in 1991-92 to 14193 MT in
1992-93, and 34500 MT in 1993-94, resulting in sharp increase in volume of imports in
absolute terms.
30.
Market share of the imports from the People’s Republic of China increased to
33% during 1993-94 from 11% in the previous
year, in relation to production and consumption in India, as a result of increase in its
volume, coupled with decline in the sales of the domestic industry.
31.
The export price of exports from the People’s Republic of China declined from
Rs. 5833 per MT (1992-93) to Rs. 4487 per MT (1993-94), showing a decline of about 23%.
(b) Production
Trend and Capacity Utilisation:
32. Production
of the domestic industry declined sharply from 76408 MT to 37089 MT, representing a
decline of about 51% in the investigation period as compared to the previous period. The
overall capacity utilisation has also declined from 63% in 1992-93 to 30% in 1993-94. One
of the petitioner companies has been forced to shot down plant for about three months and
mines for about four months in view of high stocks.
(c)
33. Sales
of the domestic industry declined fro: 66191 MT (1992-93) to 46225 MT (1003-94),
representing a decline of about 30% in the investigation period as compared to the
previous period.
(d) Selling
Price Trend:
34. Average
realisation from sales of DBM to the domestic industry increased marginally from Rs. 5483
PMT 91992-93) to Rs. 5733 PMT in 1993-94. The same is, however, far below the cost of
production.
(e) Stock
Trend:
35. Stock
of the furnished product with the domestic industry declined from 49605 MT (1992-93) to
40336 MT (1993-94). The reduction in stock in 1994-95 are apparently a result of very low production.
(f) Profitability
Trend:
36. The
domestic industry is suffering net losses from the sale of DBM at prices much below is
cost of production, and the same have increased from Rs. 112.14 lacs
(1992-93) to Rs. 1260.22 lacs (1993-94).
(g) Employment:
37. The
domestic industry has been forced to curtail employment and two of the petitioner
companies M/s. Tamil Nadu Magnestire
Ltd. and M/s. Dalmia Magnesite
Ltd. have been forced to reduce manpower significantly (593 and 540 workers respectively)
by resorting to Voluntary Retirement Scheme at a substantial cost.
(h) Conclusion on
Injury:
38. The Authority finds
that:
(i) The imports have increased in absolute terms from the People’s Republic of China, during the investigation period as compared to the previous period.
(ii)
The share of the People’s Republic of
(iii) the exports from the People’s Republic of China resulted in price suppression in the markets and forced the domestic industry to keep its prices to unremunerative levels and prevented it from recovering its full cost of production.
(iv) The various indicators relating to domestic industry such as Production, Capacity Utilisation, Sales Quantities, Average Sales realisations, Profit/Loss, Employment etc. collectively establish that the domestic industry has suffered material injury.
39. The Authority is,
thus, led to the inescapable conclusion that the domestic industry has suffered material
injury.
40. In
determining whether material injury to the domestic industry was caused by the dumped
imports, the Authority took into account the following facts:
(j)
The imports of the product
from the People’s Republic of China increased in
absolute terms and relative to the consumption of the product in India. The share
of the People’s Republic of China in the total imports also increased. As a direct
consequence, the domestic industry has lost its market share.
(ii) The imports from the People’s Republic of China suppressed the price of the domestic industry to such an extent that the domestic industry to such an extent that the domestic industry was prevented from recovering its full cost of production and earn a reasonable profit from the sales of DBM in India.
41. The
purpose of anti dumping duties is in general to eliminate dumping which is causing injury
to the domestic industry and to re-establish the situation of open and fair competition on
the Indian market which is in general interest of the country.
42. The
Authority confirms that it has worked out reasonable Selling Price of DBM in India for the
domestic industry has also considered the optimum cost of production at attainable level
of Capacity Utilisation to ascertain the extent of anti dumping duty necessary to remove
the injury to the domestic industry.
43. Industry
being caused to the petitioner from factors other then dumping have not been considered by
the Authority while recommending the amount of Anti Dumping Duty necessary to remove the
full extent of injury of the petitioner.
44. The
Authority confirms that the imports are more than de minimus limits
45. The
purpose of anti dumping duty as detailed in para 41, is to remove the unfair practice and
not to alter the levy of Custom Duty.
46. The
increase in imports of DBM of Chinese origin in absolute terms as well relative to the
consumption in the country is in spite of contraction in demand in the Country. It
therefore, cannot be held that the contraction in demand alone has resulted in injury to
the domestic industry. The sharp reduction is production of the domestic industry is
attributable to the increase in the imports from China RP also. Nevertheless, while
arriving at the extent of the injury caused to the domestic industry, the Authority has
considered fair selling price at optimum level of capacity utilisation.
O.
FINDINGS
47. The
Authority, accordingly, has come to the conclusion that:
(i)
DBM originating from the People’s Republic of China ha been exported to India
below its normal value.
(ii)
The injury has been caused by the imports originating from the People’s
Republic of China.
(iii)
The injury has been caused by the imports originating from the People’s
Republic of China.
48. The
Authority considers it necessary to impose a provisional anti dumping duty on imports of
DBM originating from the People’s Republic of China in order to remove the material
injury to the domestic industry, pending final determination.
49. The
Authority considered whether a duty lower than the dumping margin would be enough to
remove the injury. The weighted average landed price of all the exports by an exporter,
for the purpose, was compared with the fair selling price of DBM produced by the domestic
industry, determined at an optimum level of capacity utilisation, for the period of
investigation. Where the differenced was less than the dumping margin, lesser duty to the
extent of injury is recommended, whereas duty to the extent of full dumping margin is
recommended in other cases, and accordingly the Authority recommends that a provisional
anti dumping duty in respect of following exporters may be imposed, pending final
determination.
Exporter’s Name
Amount of Duty
(Rs. per MT)
China Metallurgical Import-Export Corpn.
1333
Sima Resources Gmbh Germany
1925
China Sounngang International Trade &
Engg. Corpn.
1778
Exporter
other than above
1925
50.
The exporter, importers known to be concerned are being addressed separately, who
may make known their views and apply, if desired to be orally heard. Any other interested
party may also known its views to the Authority within
40 days of the date of this
notification.
T.S.
VIJAYARAGHAWAN, Designated Authority
and Additional Secretary