NOTIFICATION
PRELIMINARY FINDINGS
New Delhi, the 17.6.1998
14/1/97/ADD- Having
regard to the Customs Tariff Act 1975 as amended in 1995 and the Customs Tariff
((Identification, Assessment and Collections of Anti- Dumping Duty on Dumped Articles and
for Determination of Injury) Rules, 1995, thereof:
A. PROCEDURE
The procedure described
below has been followed with regard to the investigation:
i) The
designated Authority (hereinafter also referred to as Authority), under the above Rules
received a written application from Steel Authority of India (
hereinafter also referred to as SAIL). Essar
Steel Ltd., (hereinafter also referred to as Essar) on behalf
of the domestic industry, alleging dumping of Hot Rolled Coils/Sheets/Strips (also
referred to as subject goods) originating in or exported from
ii) The
application was supported by M/s. Tata Iron & Steel Co.
Ltd., (hereinafter also referred to as TISCO) and Lloyds Steel Ltd., (hereinafter also
referred to as Lloyds)
iii) Preliminary scrutiny of the application revealed certain deficiencies, which were subsequently rectified by the petitioners. The petition was, therefore, considered as properly documented.
iv) The Authority on the basis of
sufficient evidence submitted by the petitioners decided to initiate the investigations
against imports of HRC/Sheet/Plates/Strips from the said countries. The Authority notified
the Embassies of the said countries about the receipt of dumping allegation before
proceeding to initiate the investigation in accordance with sub-Rule 5(5) of the Rules.
v) The
Authority issues a public notice dated 6th October 1997 published in
the Gazette of India, Extraordinary, initiating anti-dumping investigations concerning
imports of HRC/Sheet/Plates/Strips classified under custom heading 72.08 of the Customs
Tariff Act, 1975 originating in or exported from the said countries. The classification
is, however, indicative only and in no way binding on the scope of the present
investigation.
vi) The Authority forwarded a copy
of the public notice to all the known exporters (whose details were made available by the
petitioners) and industry associations and gave them opportunity to make their views known
in writing in accordance with the Rules 6(2).
vii) The Authority
also forwarded a copy of the public noticed to all the known importers of
HRC/Sheet/Plates/Strips in
viii) Request was made to
the Central Board of Excise and Customs (CBEC) to arrange details of imports of
HRC/Sheet/Plates/Strips made in
ix) The Authority provided a copy of the petition to the known exporters and the Embassies of the said countries in accordance with rules 6(3) supra. A copy of the petition was also provided to other interested parties, wherever requested.
x) The
Authority sent questionnaire, to elicit relevant information, the following known
exporters in accordance with the rule 6(4):
a)
(i)
(ii) Novilipetsk Metkombinat (Leptsk Iron & Steel Works)
(iii) Cherepovets
Iron & Steel Works (renames as A.O. Severestal)
b)
(i)
Mariupol Iron & Steel Works
(ii) Azovstal & Steel Works
(iii) Zaoirshtal Iron & Steel Works
(iv)
c)
(i)
Karagonda Metallurgical Works (Ispat
Karmet)
A number of parties requested for extension of time, which was allowed by the Authority by four weeks. Response to the questionnaire was filed by the following:
v Ispat Karmet
v JSC Severtal
v
v
v Azovsral Iron & Steel Works
v Zaporizhstal
Joint Stock
v Novolipstsk
Iron & Steel Corpn. (NLMK)
v Ministry of Foreign Economic
Relation and
In addition, responses were
also filed by M/s. Euro Export Ltd.,
xi)
The Embassies of the said countries sin
xii)
A questionnaire was sent to the known importers of HRC/Sheet/ Plates/Strip in
A number of parties
requested for extension of time, which also was allowed by the Authority by four weeks.
Response to the questionnaire was filed by the following:
v Bhusha Steel And
Strips Ltd., U.P.
v Graham Firth Steel Products
(I) Ltd., Mumbai
v Ispat Industries,
v Jai Corpn.,
Mumhai
v Ruchi Strips Alloys Ltd,
v Siddharth Tubes Ltd.,
v Uttam Steels Ltd., Mumbai
v National Steel Industries
Ltd,
v Pennar Steel Ltd
v Raymond Steel Thane
v Indian Sugar & General Engg. Corpn,,
v All
v Man Industries India Ltd.
xiii. Additional information regarding injury was sought from the petitioners, TISCO and Lloyds, which was also furnished.
xiv. The Authority got on-the-spot investigation conducted at the premises of the petitioner to he extent deemed necessary.
xv. The Authority kept available non-confidential version of the evidence presented by various interested parties in the form of a public file for inspection by the interested parties;
xvi.
Cost investigations were also conducted to work out optimum cost of production and
cost to make and
sell the subject goods in India on the basis of Generally Accepted Accounting Principles (GAAP) and the information furnished by the
petitioners so as to ascertain if anti-dumping duty lower than dumping margin would be
sufficient to remove injury to the domestic industry.
xvii **** in this
notification represents information furnished by an interested party on confidential basis
and 32 considered by the Authority under the Rules:
xviii. Investigations were carried out
for the period starting from
B. PETITIONERS’ VIEWS
2. The Petitioners have raised the following, major issues in their petition and subsequent submissions,
(i)
Russia/Ukraine/Kazakhstan are resorting to dumping their products not only in India but
world over. They have also indicated the dumping margins determined by other countries.
(ii)
The domestic industry
has also represented
during the investigation
that there is a sudden increase in imports from CIS countries in Dec
97 and Jan 98 and the trend is likely to continue in Feb-March
98 also. The prices of MR products have fallen further and subsequent bookings are taking
place at a price further below than this. Therefore,
provisional anti-dumping duty may be levied pending investigation with retrospective
effect.
3. VIEWS OF EXPORTERS:
(a) M/s. Zaporishstal from Ukraine has stated that petitioners have brought their allegation
of dumping on the premise that Ukraine is still a non-market economy (NME). They
have denied this by stating that
(i) Currency
Convertibility – It is stated that their new national currency unit is “hryvna” with free internal convertibility of hryvna into foreign currencies and availability of foreign
currencies to legal persons and individuals, with an exchange rate formed on the basis of
market trading.
(ii) Wage and
collective bargaining-
(iii) There is no limitation
on foreign investment in
(iv) Govt. does not directly interfere
in the business activity of the owners. The percentage of state owned companies and
private companies are 29.8% and 70.2% respectively.
(v) State companies involved in production and sales of goods/services
are independent from state control in their day to day operation,
(vi)
(vii) M/s. Zaposizhstal
has denied the injury allegations. They have stated that the petition lacks the clear
evidence of injury that could be linked to imports from
v No decline in output
It is stated that Indian
Steel Industry is healthy. The volume of production increased by 745419 MT in 1995-96 (16.48% growth and by
1291843 Mt in 1996-97 over 12995-96 (24.53%) growth. Thus the production has increased in
absolute terms and Indian Steel Industry is booming with introduction of new capacities
and full utilization of old capacities.
v No decline in Sales:
It is stated by the exporter
that sales volume increased by 487458 MT in 1995-96 over 1994-95 (growth rate 16.54%) and
by 11,47,888 MT in 1996-97 over 1995-96 (growth rate of
33.42%). The sales volume of TISCO & Lloyds had increased by 141.28% in 1996-97 over
1994-95. The only producer who was experiencing slight decrease in sale volume under
period of investigation is SAIL. However, this was due to the fact that Essar with substantial capacity of production entered into the
market. Taking these companies together, their sales volume in period of investigation
increased by 974477MT over 1995-96 (growth rate of 42.83%). Thus the slight loss of share
of sales by SAIL can be attributed to the tremendous growth of sales by the competing
Indian producers and not by dumping.
v There
is no sign of decline or retardation of Indian Industry. In fact, Government of India had
decided to encourage creation of new capacities and to expand the existing steel plants
due to the substantial demand of domestic steel products.
v Petitioners attempt to tie
the growth of unemployment to the imported material over the period of 1994-97 is
erroneous. Unemployment is being dependent on other factors and has been growing over last
seven years as per available data even when there were no imports from the countries
concerned.
v There
is an overall decrease in imports as well as decrease in imports from
v The
cumulative imports from
(b) M/s Ispat Karnet JSC,
(i)
(ii)
The exporter has stated that Essar and TISCO are
related to certain importers of the subject goods from the named countries and therefore,
should be excluded from being part of domestic industry.
It is alleged that the said goods are imported by M/s. Steel Co. Gujarat Ltd and by
M/s Tata SSL. It is stated that Essar
holds about 10% shares of steel Co Gujarat and Tata-SSL is a
subsidiary of TISCO and accordingly they are related.
Thus, Essar & TISCO should be excluded from the
investigations.
(iii)
There is no injury
to the domestic producers as :
v domestic
industry has increased its market share
v total
imports in absolute terms have decreased and thus imports
have lost market share.
v There
is no significant increase in volume of imports from the said countries
v Volume of subject imports is
not significant
v Capacity utilization is
maintained. The low capacity utilization of Essar is no caused
by alleged dumped imports but because it was the first year of operation
v The
fall in employment is not due to dumping but due to excess staff
v The entry of Essar in 1996-97 with a production of 1.2 Million tonne of HR
products resulted in increased competition among the domestic producers and Essar market share is at the cost of other domestic producers,
v Increased inventory of SAIL
was due to Essar and not due to the allegedly dumped goods.
v The domestic industry is selling hot
rolled products
below the landed value of imported goods and hence there is no price
suppression or depression of domestic industry as a result of imports.
(c) The Ministry of Foreign
Economic Relation and Trade of Ukraine has stated that the initiation notification does
not contain or otherwise make available, adequate information on date of initiation
products and its complete description, prices, volume of goods, evidence on like products
evidence on that there is no significant difference in the production process of the like product. Such lack of information casts doubts upon
the allegations by petitioner. It fact the non-confidential version should be in
sufficient details to permit a reasonable understanding. The data on anti-dumping duties
levied by other countries on
(d) M/s. MMK has stated that the
product under investigation is Hot rolled Coil Plates, Sheets and Strips. However their 4
type of products may not be regarded as being “like articles” as these are
classified under different sub-headings of Indian Custom Tariff Classification, there are
different manufacturing process at some stage of production, quality and technical
differences as well we differences in use and perception by the market and in price. The
injury, if any, to domestic industry in
(e) M/s. Azovstal Iron & Steel Works has stated that the product
(HRC/Sheet/Strips/plates) raised by the petitioner is too
generic a term. The petition filed by the petitioner is vague and lacks material
particulars and evidence. The technology and the manufacturing process used by the
exporter and the petitioner are different form each other. The conditions of manufacturing
are also vastly different. The quality of the products produced by the exporter and
petitioner is not similar. The product of the M/s. Azovstal are user specific and cannot be clubbed and
considered under the general term. They have also alleged that petitioner has disclosed a
totally false picture of the actual domestic price as far as the exporter is concerned.
The material considerations for any likely injury have not been stated and no evidence to
the alleged injury has been produced, and only a vague argument to this effect has been
made.
4. VIEWS
OF IMPORTERS
(a) TISCO itself is
one of the importers from the countries involved in the investigations and they sold the
HRC imported by them to Indian customers on the international prices. Hence TISCO has get no locus standing to support
the petition
(b) The domestic industry should
be bifurcated into different competitive market segments and as such they should be treated as separate industry
and not domestic industry as a whole. HR
Coil of thickness 1.5 mm to 2 mm are not manufactured in
(c) The allegation
of the petitioner that imports of HRC/Sheets/Plates/Strips have increased, their profit have
declined and inventories have gone up is not
true. In fact the sale, production and profit of Essar have
gone up.
(d) There is no
depressive effect in domestic price of HRC in
(e) Domestic industry has neither suffered material injury not import of HRC pose threat of material injury. In fact imports have resulted into healthy competition and has also resulted into improvement of domestic manufacturers. They have interest cost of the domestic industry should not be borne by consuming industry.
(f) There is
vast difference in the quality of HRC being imported from the said countries compared to
that of petitioner and supporting domestic companies. The quality of petitioner companies
and supporting companies is sub-standard and is not up to mark as required for producing
good quality standard tubes. M/s. SAIL is not in a position to supply close tolerance for
the thickness as desired by importers and thus the material is to be imported. Practically
all the consumers are having problems in the quality of the material supplied by SAIL
(g) If anti-dumping duty is levied, the product manufactured from HRC in India will be
costing more
in international market. Thus
export production will practically come to halt.
(h) The credit period allowed by domestic industry is 30-37 days and beyond this interest @ 21-24% is charged whereas in the case of imported goods, credit is available for 180 days @ 6-7% p.a. Thus the domestic industry is not having any capacity financially to match the credit requirements.
(i)
The domestic industry is not having fixed marketing policy. It is changing on day
to day basis and customer to customer basis resulting into cut throat competition among
end users.
(j)
The petitioner companies are not in
a position
to match
the delivery requirement
of customer. The petitioner companies
are not in a position to execute the orders in bulk quantities at a time as compared to
the imported material where the supplies are coming in bulk.
(k) Indian Steel manufacturer have catered to only general grades and are not equipped and mentally
ready to make higher grade steel. Because of
their inability to go for higher grade of plates, the importers do not have choice but to
look beyond Indian boundaries for raw material.
(l)
Essar & TISCO should be excluded from being part
of domestic industry’ as they are related to importers.
(m)
Since domestic industry has Increased its market share,
imports have lost market share, the increase in Import from subject countries is not
significant, employment reduction is not caused by imports, there is no price suppression
and thus there is no causal link between the allegedly dumped import and alleged injury to
the domestic industry. The proceedings for levy of anti-dumping should be terminated.
(n) The price quoted by
the petitioner for HR Plates from
(o)
It is wrong to state that the coils/sheets/plates/strips are being consumed
interchangeably in case of plates, the
production of domestic industry in limited. Therefore
the hot rolled plates should
be excluded from the anti-dumping investigations.
5. VIEW EXPRESSED BY OTHERS
The trade representative of
Russian Federation of India New Delhi has represented that imports from Russia of HR
coils/sheet meet approximately only 1.5% of the Indian consumption and thus it can not consequently affect adversely interior producers price or cause any material injury.
D. EXAMINATION OF THE ISSUES RAISED
6.
The submission made by the exporters, importers, petitioners and other interested
parties have been examined, considered and have been dealt at appropriate places in the
notification, hereinafter.
E. PRODUCT UNDER CONSIDERATION
7. The product
considered in this report for the purpose of the present investigation is Hot Rolled
Coils/Sheets/Plates/Strips of a width 600MM or more having thickness between 1.5mm &
20mm (both inclusive), not clad plated or coated, (also referred to HRC/S/P/S).
The size of the product is
as under:
v 1.5 mm to 20 mm for coils
v less
than and upto 5mm for sheets
v 5 mm and above for plate
The end use of the product
is for:
v Cold rolling purposes for
subsequent usage in Cold Rolling industry
v Pipes and Tubes Grade
v Sheet and Plates grade
v Saw pipes grade
8. Hot Rolled Coil/Sheet/Plates/Strips is classified under Chapter 72. The custom classification, manufacturing process and usage of the product indicated herein are however, indicative only and are in no way binding on the scope of the product under consideration.
9. The Authority observes that the petitioner has filed a combined petition submitted for Hot Rolled Coils, Sheets, Plates, and Strips. The data of production sales, costing, etc. are not submitted separately for each kind of product. The authority also observed that the production process upto a particular stage for all these items are same and depending upon the size and further processing the product is differentiated. Accordingly, authority has considered all these 4 products as single product for the purpose of assessment of injure
F.
LIKE ARTICLES
10.
Rules 2 (d) specifies
that “Like article” means an article which is identical or alike in all respect
under investigation or in the absence of such an article, another article, having
characteristics closely resembling those of the articles under investigation. The Hot
Rolled Coils/Sheets/Strips/Plates produced by industry are substitutable by the hot rolled
coils/sheets/strips/plates imported from
G.
DOMESTIC INDUSTRY
11. Petition has been
tiled by M/s Steel Authority of India (SAIL) and by Essar
Steel Ltd. (Essar) as petitioners.
12.
M/s Lloyds Steel Industries Ltd. and the Tata Iron
& Steel Co. Ltd, are other producers of the alleged dumped
goods supporting the petition.
It has been pointed out to the Authority that M/s Steelco Gujarat Ltd. has imported the alleged product and is related to Essar
as it holds about 10% of its shareholding and hence they are related. Also, it is pointed
out that M/s. Tata SSL is a subsidiary of TISCO and,
therefore, they are related. In terms of Rule 2(b) of the Customs Tariff (Determination of
Injury) Rules 1995, the two should be excluded from the definition of domestic industry.
On this, M/s. Essar has clarified that only 7.1% shares of
Steel Co Gujarat Ltd. are held by
Essar. They have one common director. It is further clarified
that Essar is neither having a controlling interest in Steelco Gujarat nor has a majority or directors and does not in any
way control the management of Steelco Gujarat and thus they are not related companies. M/s.
Essar has also stated that it has some shareholding in other
companies but does not have any representative on the board of such companies. M/s. TISCO
has stated that there are two common directors in TISCO and Tata
SSL, and TISCO holds 45% equity share of Tata SSL. However TISCO has further stated that Tata SSL is an independently managed company and its management is
not controlled by TISCO. In fact, TISCO and Tata SSL compete
for some products such as wire rods in the market. It is also stated by Essar that even otherwise, the production of SAIL along with TISCO
& Lloyds Steel who Save supported the petition, would be sufficient for the purpose of
petitioners qualifying the definition of domestic industry.
13.
The Author has observed that with regard to relationship of Essar with
importers, it is not disputed mat Essar holds equity in. Steelco, which has imported the subject goods, the mere fact that Essar holds equity in a company, which has imported the subject goods does not disqualify it from the definition of domestic
industry. There is no indication to suggest
that Essar controls Steelco or Steelco controls Essar or both of them
are controlled by a third company. The imports
made by Steelco, therefore, do not disqualify Essar from the purview of domestic industry. However, in case of
TISCO, the Authority observes that Tata SSL does appear to be
in a position to exercise control over Tata SSL and therefore,
deserves to be excluded from the definition of domestic industry.
H. DUMPING
14 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 transshipped 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 or
export, the normal value shall be determined with reference to its price in the country of
origin.
15. The Authority sent
questionnaire to the exporters from the subject countries in terms of the section cited
above. The claims made by the exporters with regard to normal value and export price are as under
16.(i) Zaporizhstai Joint-Stoc Co.,
The company has claimed
price adjustment on account of inland freight and customs duty while calculating the
export price to
They have shown the domestic
price as US$ *** and have claimed US$ *** as inland freight Thus domestic price is US$ ***
However they have stated
that only *** MT were sold in the domestic market and hence it is net representative i.e.
less than 5% of the export sales. Terms in domestic market and export to
It is further stated that they sold the product under steel grades 3PS and 08 KP.
However, due to
the inefficiency of company’s data base,
it is impracticable to further divide these two produces. Therefore they have submitted
information under a unified definition i.e. non Alloy Steel grade HRC.
The supporting documents are in Russian language without English Translation and Therefore could not be analyzed.
(ii)
It has been stated that they
have not exported any HR Coil or sheet to
(iii) Azovstal & Steel Works,
They have exported Hot
Rolled Plates during the period of investigation. They have claimed the price adjustment
on account of packing charges, inland freight, handling, custom clearance charges while
calculating export price to
(iv) Ispat Karmet-
The exporter who is the only
steel producer in
(v) Novolipstsk Iron & Steel Corpn. (NLMK),
It has been indicated that
the company is not directly selling to
However, it is not clear
whether they have exported coil or plate or sheet or strip as the information is given
grade wise.
They have stated that in the
domestic market it is impossible to account for all the discounts (***) and surcharge
(***) applicable by NISC as it is hard to determine on which sale the discount or
surcharge was applied. Therefore prices in the domestic sales, due to the particular
market situated would not serve
as a proper comparison for export sales to
However adequate evidence
has not been submitted.
(vi) JSC
It appears that they are
producers of the product but exporting the products through traders. They submitted data
for all the products together. They have claimed the price adjustments on account of
inland freight in the export prices to
(vii)
The details on ‘sale
structure for export to India (App 3A) and sales structure for domestic sales (App 3B) and
sale price structure for export to countries other than India have not been submitted. The
reason given for non-submission is that “Since MMK supplied its products on FCA terms
both for domestic and third country market, Table 3A, B, C are not filed”. However, the reasoning is not
clear.
With regard to the Normal
Value, it has been stated that the selling price of MMK in domestic market is influenced
by several factors including those, which are typical for the present stage of development
“for Russian Economy, Only 10-12% of
domestic deliveries may be treated in the “Normal
course ff trade”. Due to crisis of
non payment, deliveries are conceded on barter basis and it has to re-sell the product so received with the aim of
receiving real money. Due to high risk of buyer inability to pay, the price charged by MMK
for delivery or app 90% of HR product are artificially
high because MMK has to take
into account risk, credit cost and
transaction cost Adjustments’ are required to be made in domestic prices to ensure
fair outcome o, investigation However, no details or data have been submitted.
As regards the Export Price,
It is stated that MMK does not export directly to
Examination Of The Claims Of The Exporters By The Authority
17. The Authority has
examined the Claims of the various exporters as stated above in accordance with the Rules and the observations of the
Authority in respect of each exporter are as under.
(i) Zaporizhstal
Joint-Stock Co.,
The sale in domestic market
is low and therefore is not representative for the purpose of determination of normal value in accordance
with Sec 9A(1) c(i). The Authority also attempted to determine the normal value in accordance with Sec
9A(1) c(ii) (a) whereby normal value is comparable
representative price of the like article when exported from the exporting country or territory to an appropriate third country as
determined in accordance with the rules made under Sub Section (6). The exporter has
submitted that
(ii) Azovstal Iron &
Steel Works,
The Authority has allowed
the claims made by the exporter in export price and normal value on the basis of domestic
price, subject to verification.
(iii) Ispat Karmet
The Authority notes that the
exporter has furnished the normal value and export price in respect of HRC/Sheet
separately and hence it would be appropriate to consider the dumping margin separately.
They have not claimed any price adjustment in the domestic market price. Therefore the
normal value is calculated on the basis of domestic price as submitted by exporter.
(iv) Novolipstsk Iron &
Steel Corpn. (NLMK),
The Authority observes that
the exporter has submitted the grade wise information without indicating whether the
product exported is HRC or HR Sheet or HR Strips or HR Plates. They have
not explained the difference in the quality or technical characteristics of various
grades. The exporter further stated that cut of 7 grades exerted to
(v) JSC Severstal -
The Authority observes that
the exporter has not claimed any deduction while calculating the domestic price. It is
further observed they are claiming *** as inland freight while calculating the export
price to
(vi)
In view of the submission
made by the exporter as already discussed above the authority is not able to determine the
normal value and export price on the basis of information submitted by the exporter. Thus, the Authority determine the normal value on
the basis of cost of production as claimed by the petitioner The export price is
calculated as claimed by the petitioner.
COMPARISON & MARGIN OF DUMPING
18. the
rules relating to comparison provides as follows:
“While arriving at
margin of dumping, the Designated Authority shall make a fair comparison between the
export price and the normal value. The comparison shall be made at the same level or
trade, normally at ex-works level, and respect of sales made at as nearly possible the same time. Due allowance shall be made in each case, on its
merits, for differences which affect price comparatively, including differences in
conditions and terms of sales, taxation, levels of trade, quantities, physical
characteristics and any other differences which are demonstrated to affect price
comparability.” :
19. For the purpose of fair comparison between the normal value and the export price, the authority took into account the information furnished by the exporter, importers, and petitioners. The principles of deciding the normal value in relation to article has already been specified in paragraph 14 also.
20. The normal value, export price and dumping margin have already been discussed in para 15 above and accordingly the dumping margins in respect of each exporter is as under:
Name of Exporter
|
Dumping margin as % of export price
|
|
1. |
Zaporishtal |
118.99% |
2. |
Azovstal |
8.96% |
3. |
Ispat
Karmet |
|
-Sheet |
18.46% |
|
-Coil |
NIL |
|
4. |
Novolipstech |
78.37% |
5. |
JSC Severstal |
1% |
6. |
MMK |
56.71% |
J. INJURY
21. The Authority observes that the petitioners as well
as exporters have not submitted data separately for each kind of
product i.e. HRC, Sheet, Plates, Strips. Accordingly the Authority has analyzes the injury
keeping in view para 3 of
‘The effect of the
dumped imports shall be assessed in relation to the domestic production of the like
article when available data permit the separate identification of that production on the
basis of such criteria as the production process,
producers sales and profit If
such separate identification of the production is not possible, the effects of the dumped imports shall be assessed by the examination of the
production of the narrowest group or range of products which includes the like product,
for which the necessary information can be provided.”
22. Under Rule 11 supra,
Annexure-II, when a finding of Injury is arrived at, such finding shall involve
determination of the injury to the domestic industry.
“Taking into account ail relevant facts including
the volume of dumped imports, their effect on prices in the 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 article in India,
or whether the effect of such imports is otherwise to depress prices to a significant
degree or prevent price increases, which otherwise would have occurred, to a significant
degree.
23. Annexure II (iii)
under rule 11 supra further provides that in case where imports of a product from more
than one country are being simultaneously subjected to Anti-dumping investigation. The
Designated Authority will cumulatively assess the effect of such imports, only when it
determines that the margin of dumping established in relation to the imports from each
country is more than two percent expressed as percentage of export price and the volume of
the imports from each country is three percent of the imports of the like article or where the export of the individual countries less than
three percent, the imports cumulatively accounts for more than seven percent of the
imports of like article, and cumulative assessment of the effect of imports is appropriate
in light of the conditions of competition between the imported article and the like
domestic articles.
The Authority notes that the margin of dumping and quantum of imports from subject
countries are more than the limits prescribed above. Cumulative assessment of the effect
of imports is appropriate since the export prices from the subject countries were directly
competing with the prices offered by the domestic industry in the Indian market.
24. Analysis of Injury Indicators
(a) Quantum of Imports
The total imports of the
products in the country were 923560, 887029 and 851682 MT in 1994-95, 1995-96 &
1996-97 respectively. Thus, there is a declining trend in the imports in absolute terms.
In relative terms, the total imports were less by 3.95% in 1995-96 over 1994-95 and by
3.98% in 1996-97
over 1995-96, The petitioner has shown imports for
The imports from said
countries were 77827, 234147 and 191854 MT in 1994-95, 1995-96 & 1996-97 respectively.
Though there is a significant-increase in 1995-96 over 1994-95, but in 1996-97, the
imports have gone down by 22% over 1995-96. The share of said countries in total imports
was 8.43%, 26.39% and 22.52% respectively.
Thus, it can be observed
that:
v Total imports are showing a
declining trend.
v Total imports from said
countries in 1996-97 are less as compared to 1995-96. However as compared to 1994-95 there
is a significant rise.
v Their
shore of imports has grown
(b) Production & Capacity Utilization:
It is observed that the
installed capacity was 48.23 lac tonnes
in 1994-95 and 1995-96. However this was increased to 68.23 lacs tonnes with the entry of Essar in
1996-97. Thus a capacity of 20 lacs tonnes
was added in 1996-97. There was a significant rise of 41.47% in the installed capacity in
1996-97 over 1995-96. The production, excluding captive consumption, was 2440528, 2606789
and 3699358 tonnes in 1994-95, 1995-96 and 1996-97
respectively. This shows a growth of 6.81% and 41.91% in 1995-96 and 1996-97,
respectively over the previous years. Thus, there was a substantial increase in the
production of domestic industry as a whole individually, the
production of SAIL has declined marginally in 1996-97 over 1995-96, while the production
of others was higher in 1996-97 over 1995-96. Thus the production is showing an upward
trend over the years.
It is observed that the
capacity utilization of the industry was 84.71%, 90.79% and 80.93% respectively in
1994-95, 95-96 and 1996-97. However analyzing the information further it was observed that
decline in capacity utilization in 1996-97 over 1995-96 was mainly due to Essar whose capacity utilization was only 64.4%. It is urged by
exporters/importers that this low capacity utilization was due to the fact that this was
first year of production for Essar. Otherwise, the capacity
utilization of SAIL was marginally lower in 1996-97 over 1995-96 whereas for other
producer it was higher. Thus it can be concluded that production is showing an upward
trend and capacity, utilization is, more or less, stable.
(c)
Sales
The indigenous sales were
2473346, 2505066 and 3188418 MT in 1994-95, 1995-96 and 1996-97 respectively. The growth
rate wad 1.28% and 27.28% in 1995-96 and 1996-97 over the previous years. The export sales
were 59000 MT, 81028 MT and 387026 MT in 1994-95 & 1996-97 respectively. The growth
rate was 37.33% and 377.64% in 1995-96 & 1996-97 over the previous year.
Thus, indigenous sales and export sale are showing growth over the years.
(d) Market Share
It is observed that total
demand of HR products was 3397196 MT, 3847180 MT and 4040100 MT. Thus there is a rise in
the demand over the years. The quantum of total imports was 923560, 887029 and 851682 MT
in 1994-95, 1995-96 and 1996-97 respectively. Thus the share of imports in meeting the
demand was 27.18%, 23.06% and 21.08% in 1994-95, 1995-96 and 1996-97 respectively. The
indigenous share in total market demand was 73.72%, 76.96% and 78.92% respectively in
1994-95, 1995-96 and 1996-97 respectively. Thus it is observed that the share of imported
products is declining over the year and the indigenous share is rising over the years.
Even if the demand is considered including captive consumption by the domestic industry,
the same trend is observed.
(e) Closing Stocks
It is observed that the
closing stock of HR products was 292732, 360107 and 597061 MT respectively in 1994-95,
1995-96 and 1996-97. However it is also observed that the significant rise in inventory is
with SAIL. The inventories of Lloyds have gone down.
(f)
The Authority may observe
the sales realization and profit PMT for domestic industry, which is as under:-
Year
Cost Realization (Rs.) Profit/ Loss
1994-95
*** ***
***
1995-96
*** ***
***
1996-97
*** ***
***
Average cost of production
of the domestic industry increased by 14.77% 1996-97 and the sales realization declined by
0.53% over the same period. However, cost of production of SAIL (Bokaro
Steel Plant) increased by 4.7%, whereas the increase was 11.15% and 11.58% for SAIL (Rourkela Steel Plant) and Lloyds respectively. Further, sales of SAIL (Bokaro
Steel Plant) constituted approx. 45% of the sales of the demesne industry it is also noted
that 1996-97 was the first year of commercial
production in case of Essar, whose costs are significantly
higher than that of SAIL (Bokaro
Steel Plant) The increase in the cost of production of the domestic industry in 1996-97
as compared to the previous year appears to be on account of the
higher cost of production of Essar.
With regard to sales
realization, there is no evidence to suggest that the sales realization on the domestic
industry in the investigation period was lower as compared to the previous year because of
dumped imports. In fact, the Authority notes that sales realization of SAIL (both Rourkela Steel Plant and Bokaro Steel
Plant} are lower than Essar by 13.5% it is further noted that the sales realisation
or SAIL is significantly lower than the landed value of
imports from the subject countries,
considering the prevailing level of basic customs duties. Though average sales realization
of the domestic industry was marginally lower than the previous year, the same can be attributed to the
lower realisation by SAIL as compared to other constituents of
the domestic industry.
With regard to the
profitability of the domestic industry, the Authority finds that the profit per unit of production of
the domestic industry declined by 58.61% in the investigation period as compared to the previous year. Though the decline
in profitability is significant, there is no evidence to suggest the reasons for the same
can be attributed to dumped imports from the subject
countries Apparently the reasons for the same can be attributed to the lower sales
realization by SAIL as compared to the other constituents of the domestic industry and
landed price of imports’
(g) Employment:
It is observed by Authority the number
of persons employed has gone down marginally, but there is no clear indication showing decline
in the employment due to dumping.
25. The Authority notes that
factors like decrease in volume of imports in absolute terms, increase in production and sales, capacity utilization
as analyzed do not show injury to the domestic industry.
Factors such as increase in closing stocks, inability to increase selling price and
decline in profitability
shows that the domestic industry has suffered some injury.
K. CAUSAL LINK
In establishing whether the
Injury to the domestic industry was caused by the imports from the subject countries,
the Authority has considered the following factors:
(a)
There is significant increase in the production of the Indian industry, as
discussed in para 24 above. The decline in the sales of SAIL
is significantly higher than the increase in the imports from the subject countries. The
increased imports from the subject countries cannot, therefore, be held to be a reason for
decline in the output of SAIL.
(b) Increase in stocks is primarily on account of the stocks of SAIL’ The increase in Stock with SAIL is far more than the increase in the imports from the subject countries. The increase in stock cannot, therefore, be attributed to dumped imports.
(c)
The decline in profitability in the investigation period as compared to the
previous year is significant. However, it is also found that the profitability of the
domestic industry declined because of decline in the profitability of SAIL, whose sales
realization is far lower than that of Essar and TISCO in the
investigation period. It is also found
that the sales realization of SAIL is lower than the landed value of imports from the
subject countries thereby implying that the imports from the subject countries have not
forced SAIL to reduce its selling prices in the investigation period.
As discussed above, there is
nit sufficient evidence to suggest that the reasons for declining profitability, rising
stocks and to increase prices can be attributed to imports from the subject countries and
that the material injury was caused to the domestic industry from the dumped imports. The
Authority, therefore notes that there is no causal link established between the dumped
imports and material injury to the domestic industry.
L. CONCLUSION
27. The Designated
Authority after considering the forgoing, concludes that:
(a) The subject goods originating in or exported from the said countries have been exported to India below their normal value resulting in dumping margin as discussed in para 20 above
(b)
The domestic industry has suffered injury as discussed in para
25 above,
(c) There is no
causal link established between the dumped imports
and material
injury to
the domestic industry, as discussed in para 26 above.
28. In view of the above
analysis, there appears to be little justification to recommend that provisional duties at
this stage. However, the Authority shall continue with the investigations for final
determination.
(RATHI VINAY JHA, Designated Authority)