Council Regulation (EC) No 803/2009 of 27 August 2009 imposing a definitive anti-dumping duty on imports of certain tube and pipe fittings, of iron or steel, originating in the People’s Republic of China and Thailand, and those consigned from Taiwan, whether declared as originating in Taiwan, or not, and repealing the exemption granted to Chup Hsin Enterprise Co. Ltd. and Nian Hong Pipe Fittings Co. Ltd

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community (1) (the ‘basic Regulation’), and in particular Articles 11(2) and (3) and 13(4) thereof,

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

Whereas:

(1) By Council Regulation (EC) No 584/96 (2), a definitive anti-dumping duty was imposed on imports of certain tube and pipe fittings of iron or steel (‘TPFs’ or ‘the product concerned’), originating in, inter alia, the People’s Republic of China (the ‘PRC’) and Thailand (the original investigation). Pursuant to Article 13(3) of the basic Regulation, these measures have been extended by Council Regulation (EC) No 763/2000 (3) to cover certain imports of the product concerned which are consigned from Taiwan, based on the findings of the anti-circumvention investigation.

(2) The measures currently in force are definitive anti-dumping duties imposed by Council Regulation (EC) No 964/2003 (4) on imports of certain tube and pipe fittings of iron or steel originating in the People’s Republic of China and Thailand (countries concerned), and those consigned from Taiwan, whether declared as originating in Taiwan or not, pursuant to an expiry review in accordance with Article 11(2) of the basic Regulation (the ‘first expiry review’). The anti-dumping duty in force is 58,6 % for the People’s Republic of China and 58,9 % for Thailand except for Thai Benkan Co. Ltd. (0 %) and Awaji Materia Co. Ltd. (5) (7,4 %). Three Taiwanese companies, Chup Hsin Enterprise Co. Ltd, Rigid Industries Co. Ltd and Nian Hong Pipe Fittings Co. Ltd., are exempted from the extension of the measures to Taiwan.

(3) By Commission Decision 96/252/EC (6) undertakings were accepted from certain Thai producers. In 2004, these undertakings were withdrawn by Council Regulation (EC) No 1496/2004 (7) amending Regulation (EC) No 964/2003.

(4) Pursuant to Article 13(3) of the basic Regulation, the measures for the product concerned originating in the PRC were extended to imports consigned from Indonesia by Council Regulation (EC) No 2052/2004 (8), Sri Lanka by Regulation (EC) No 2053/2004 (9) and the Philippines by Regulation (EC) No 655/2006 (10), whether declared as originating in the Philippines, Indonesia, Sri Lanka or not.

(5) Anti-dumping measures imposed by Council Regulation (EC) No 1001/2008 (11) are currently also in force on imports of the product concerned from the Republic of Korea and Malaysia.

(6) Following the publication of a notice of impending expiry (12) of the anti-dumping measures in force on imports of TPFs originating in the PRC and Thailand, the Commission received a request for reviews pursuant to Article 11(2) and (3) of the basic Regulation.

(7) The request was lodged on 5 March 2008 by the Defence Committee of the Steel Butt-Welding Fittings Industry of the European Union (the applicant) on behalf of producers representing a major proportion, in this case more than 50 %, of the total Community production of TPFs.

(8) The request pursuant to Article 11(2) was based on the grounds that the expiry of the measures would be likely to result in a continuation or recurrence of dumping and injury to the Community industry.

(9) The request pursuant to Article 11(3) was based on information provided by the applicant that, with regard to imports of the product concerned from the PRC, the measure is no longer sufficient to counteract the injurious dumping, in particular as far as the extension of the measure to imports consigned from Taiwan is concerned. The applicant has provided prima facie evidence that the exemption of imports produced by Chup Hsin Enterprise Co. Ltd, and Nian Hong Pipe Fittings Co. Ltd. from the extended measure is no longer justified as these companies appear to be engaged in circumvention practices such as transhipment of TPFs originating in the PRC via Taiwan.

(10) Having determined, after consultation of the Advisory Committee, that sufficient evidence existed for the initiation of an expiry review and a partial interim review, limited to the exemption of TPFs produced by Chup Hsin Enterprise Co. Ltd, Kaohsiung (Taiwan) and Nian Hong Pipe Fittings Co. Ltd, Kaohsiung (Taiwan) from the extension of the anti-dumping measures imposed on imports originating in the PRC to imports consigned from Taiwan, the Commission initiated reviews (13) pursuant to Article 11(2) and (3) of the basic Regulation (the present reviews).

(11) The Commission officially advised the applicant Community producers, the other Community producers, the exporting producers in the countries concerned including Taiwan, the importers/traders, users and their associations known to be concerned, as well as the representatives of the governments of the exporting countries, of the initiation of the reviews.

(12) The Commission sent questionnaires to all these parties and to those who made themselves known within the time limit set out in the notice of initiation. The Commission also gave interested parties the opportunity to make their views known in writing and to request a hearing within the time limit set out in the notice of initiation.

(13) As a result, questionnaire replies were received from both exporting producers in Taiwan and the three sampled Community producers as well as the three sampled unrelated importers in the Community (see recitals (14) to (17) below).

(14) In view of the apparent high number of exporting producers in the PRC, unrelated importers of the product concerned in the Community and Community producers supporting the request, sampling was envisaged in the notice of initiation, in accordance with Article 17 of the basic Regulation. In order to be able to decide whether sampling would be necessary and, if so, to select a sample, the Commission requested these parties to provide the information listed in the notice of initiation in section 5.1.(a) (i) to (iii) and sent out sampling forms requesting specific information on the sales volume and prices of each Community producer, exporting producer and importer concerned.

(15) No reply was received from any Chinese or Thai exporting producers, therefore sampling was not applicable.

(16) Nine Community producers replied to the sampling form. A sample of four Community producers was selected based on the volume of their sales on the Community market during the review investigation period. These producers were requested to fill in the full questionnaire. One of the selected companies did subsequently not fill in the full questionnaire and was therefore excluded from the sample. The final sample of three companies accounted for more than 59 % of the total production of the Community industry and represented 62 % of the sales volume of the Community industry on the Community market.

(17) As far as importers of the product concerned are concerned, nine replied to the sampling form. A sample of four importers was selected based on the volume of their imports of the products concerned to the Community from the countries concerned during the review investigation period. However, one of the companies did subsequently not complete the full questionnaire and was therefore excluded from the sample.

(19) The investigation of continuation or recurrence of dumping covered the period from 1 April 2007 to 31 March 2008 (the ‘review investigation period’ or ‘RIP’). The examination of the trends relevant for the assessment of a likelihood of a continuation or recurrence of injury covered the period from 1 January 2004 up to the end of the RIP (the period considered).

(20) The product under review is the same as in the original investigation and the first expiry review: certain tube or pipe fittings (other than cast fittings, flanges and threaded fittings), of iron or steel (not including stainless steel), with a greatest external diameter not exceeding 609,6 mm, of a kind used for butt-welding or other purposes, originating in the People’s Republic of China and Thailand.

(21) TPFs are manufactured essentially by cutting and forming tubes and pipes. They are used to join tubes and pipes and come in different shapes: elbows, reducers, tees and caps, as well as different sizes and material grades. They are used mainly in the petrochemical industry, construction, energy generation, shipbuilding and industrial installations. When sold for use in the petrochemical industry, the global standard used is the ANSI standard. For other purposes, the most common standard used in the Community is the DIN standard.

(22) As in the original investigation and the first expiry review, it was found that the TPFs produced in the countries concerned, sold domestically and/or exported to the Community, have the same basic physical, technical and chemical characteristics and end uses as the products sold in the Community by the applicant Community producers and are therefore considered to be like products within the meaning of Article 1(4) of the basic Regulation.

(23) In accordance with Article 11(2) of the basic Regulation, it was examined whether the expiry of the measures would be likely to lead to a continuation or recurrence of dumping.

(24) As mentioned above, in the absence of cooperation from any exporting producers in the PRC and Thailand, this examination had to be based on information available to the Commission from other sources, such as the review request, Eurostat, Chinese Customs statistics, and the information gathered in the analogue country.

(25) In accordance with Article 18 of the basic Regulation, and in the absence of any cooperation from Thai exporting producers, the normal value was based on the data provided in the request, i.e. estimated cost of manufacturing in Thailand to which was added 15 % for SGA and 11 % for profit. There was no indication that this level of profit would exceed the profit normally realised by other exporters or producers on sales of products of the same general category in the domestic market of the country of origin as provided for in Article 2(6)(c).

(26) In accordance with Article 18 of the basic Regulation, and in the absence of cooperation from Thai exporting producers, the export price was calculated by using Eurostat data. These figures were adjusted by product types in proportion to the tonnage of each product type based on information provided in the request.

(27) To ensure a fair comparison the export price was adjusted for inland and ocean freight, insurance, commissions and packing in accordance with Article 2(10) of the basic Regulation.

(28) In order to calculate the dumping margin, the Commission compared the weighted average normal value with the average export price to the Community at ex-factory level and at the same level of trade, in accordance with Article 2(11) of the basic Regulation. This comparison showed the existence of a dumping margin for Thailand of 17,8 %, being equal to the amount by which the normal value established exceeded the export price.

(29) The existing measures provide for a single countrywide duty on all imports into the Community of the like product originating in the PRC. Accordingly, the normal value was determined on the basis of information obtained in a market economy third country (the analogue country). In the original investigation Thailand was chosen as analogue country. However, the United States of America was envisaged as analogue country in the notice of initiation as the Community industry in its review request had indicated that it was now a more appropriate choice than Thailand. However, all efforts were made to find possible alternatives in other third countries, but no companies agreed to cooperate, except for one company in the USA.

(30) The choice of the USA, in accordance with Article 2(7) of the basic Regulation, was considered to be appropriate due to its market size, the level of imports and the strong competition on this market resulting therefrom. Furthermore, as no Thai exporters cooperated in the investigation, it was considered more appropriate to base the normal value for the PRC on the verified data of the cooperating US company. Moreover, no comments were received from any interested party after the publication of the notice of initiation about the proposal to use the USA as analogue country. As a result, the normal value was based on the data provided by the producer in the USA.

(31) As regards the exports to the Community, given that no exporting producers in the PRC cooperated, findings had to be based on facts available, in accordance with Article 18(1) of the basic Regulation. Following the same methodology as in the original investigation, the export price was determined on the basis of Chinese customs statistics. These data were checked against data from Eurostat. Considerable differences in both quantity and price were found. Based on previously documented evidence of circumvention from the PRC which indicates that the use of Eurostat data were not sufficiently accurate, it was considered appropriate not to use them in this review.

(32) For the purpose of a fair comparison, and in accordance with Article 2(10) of the basic Regulation, due allowance in the form of adjustments was made for differences in respect of transport (ocean freight), insurance costs, credit cost and broker fees, which were considered to affect prices and price comparability.

(33) In accordance with Article 2(11) of the basic Regulation, the weighted average normal value, on an ex-factory USA basis, was compared to the weighted average export price on an ex-factory China basis, at the same level of trade. The above comparison showed the existence of 100 % dumping margin for the PRC.

(34) The investigation has revealed that, imports from both countries have continued at high dumped levels. The investigation did not reveal any reason why the level of dumping would disappear or decrease if the measures were to be repealed. It was therefore concluded that there is a likelihood of continuation of dumping. In addition, it has to be noted that, despite the high level of the anti-dumping duties imposed on their exports, the volumes of imports from these countries have increased massively. However, it was considered appropriate to also examine whether there would be a recurrence of dumping in increased export volumes should the existing measures be repealed.

(35) For the purpose of the examination of a likelihood of recurrence of dumping, the following factors were assessed: the evolution of the export and/or production capacity of the countries concerned, the background of circumvention in the case of the PRC and the situation in the export behavior on third country markets.

(36) In the absence of cooperation from any exporting producers in Thailand, this examination had to be based on information available to the Commission from other sources i.e. the request. The Thai annual production capacity was estimated according to the request, at 63 000 tonnes, for a domestic consumption of only 4 200 tonnes, which made the Thai industry heavily dependent on exports. The annual production was estimated to be 38 000 tonnes. As a result, the spare capacity was estimated at 25 000 tonnes.

(37) The investigation has showed that no other market worldwide could absorb this available capacity since Thailand is already subject to anti-dumping measures. These measures range from 10,68 % to 52,6 % in the USA for a product largely overlapping with the one concerned with this investigation, limited to an inside diameter of 14 inches. In addition, based on past experience and according to the request for this review, it seems that there is a general huge overcapacity worldwide and especially in South-East Asia.

(38) Consequently if measures were allowed to lapse, it is likely that a substantial part of the Thai excess capacity would be directed to the EU market, in the light of existing restrictions and the high level of the measures in force in other main markets.

(39) Given the absence of cooperation from Chinese exporting producers, the Commission services had to make use of the facts available. Since little information is known about the Chinese industry, the following conclusions rely on the information contained in the request and Chinese customs statistics. Support for these findings was also found in information that was made public in the framework of similar proceedings in the USA.

(40) According to these sources, the total Chinese production capacity for the product concerned was around 365 000 tonnes per year. The current yearly Chinese production volume, as estimated in the request, was around 291 000 tonnes. This estimation was based on the Chinese worldwide export volume given by the trade customs statistics (around 70 000 tonnes/year), and on a domestic consumption estimated at around 221 000 tonnes/year.

(41) On this basis, the Chinese spare capacity would reach 74 000 tonnes which in itself was almost sufficient to supply the total EU consumption (79 813 tonnes).

(42) Since the PRC, like Thailand, is also subject to anti-dumping measures ranging from 35,06 % to 182,9 % in the USA it is likely that a substantial part of the Chinese excess capacity would be directed to the EU market.

(43) The fact that, despite the existence of high anti-dumping duties (58,6 %) in force against Chinese imports, the Chinese exporting producers managed to increase substantially their exports to the EU from 2 550 tonnes in 2004 to 10 268 tonnes in the RIP indicates the continued strong interest of Chinese exporters in the EU market.

(44) In addition, Chinese exporters have demonstrated their continuing determination to export to the EU by any means as evidenced by the numerous attempts to circumvent the measures imposed by Regulation (EC) No 964/2003 by exporting successively through Taiwan, Indonesia, Sri Lanka and the Philippines.

(45) It is even more clear, on the basis of the Chinese customs statistics, that the EU is a very attractive market for the Chinese exporting producers since they achieved some of their highest export prices (albeit dumped) when exporting to the EU.

(46) The investigation has shown that both exporting producers in the PRC and Thailand have continued their dumping practices during the RIP.

(47) Both countries together reached 99 000 tonnes of spare capacity which was significantly more than the total Community production during the RIP (86 723 tonnes) and even more than the total Community consumption during the same period (79 813 tonnes).

(48) Given the fact that the PRC has a very large spare production capacity available and that it has already circumvented the measures, there is a strong likelihood that Chinese exporting producers would substantially increase their dumped exports of the product concerned to the Community in case existing measures were to be repealed.

(49) With respect to Thailand it should be noted that since the Thai companies are export oriented and given the attractiveness of the Community market, it is very likely that, should the existing measures be repealed, these companies would resume their exports of the product concerned to the Community market in substantial volumes and at dumped prices.