EC, July 15, 1994, No 1751-94

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Coal and Steel Community,

Having regard to Commission Decision No 2424-88-ECSC of 29 July 1988 on protection against dumped or subsidized imports from countries not members of the European Coal and Steel Community (1), and in particular Article 12 thereof,

Having informed the EC-Poland Association Council in accordance with Article 33 of the Europe Agreement between the EC and Poland and no solution having been found thereunder,

After consultations within the Advisory Committee as provided for by the above Decision,

Whereas:

A. PROVISIONAL MEASURES (1) The Commission, by Decision No 67-94-ECSC (2) imposed a provisional anti-dumping duty on imports of hematite pig-iron, originating in Brazil, Poland, Russia and Ukraine.

(2) The Commission by Decision No 1022-94-ECSC extended the period of validity of the provisional measures for a further two months (3).

B. SUBSEQUENT PROCEDURE (3) Following the imposition of the provisional anti-dumping duty, exporters from Poland, Russia and the Government of Ukraine as well as organizations representing foundries within the Community requested and were granted an opportunity to be heard by the Commission and made submissions expressing their views which were taken into account as considered appropriate.

(4) Upon request, the parties were informed of the essential facts and considerations on the basis of which it was intended to recommend the imposition of definitive measures and the definitive collection of amounts secured by way of a provisional duty. They were also granted a period within which to make representations subsequent to the disclosure.

(5) The oral and written comments submitted by the parties were considered and, where appropriate, the Commission's findings were modified to take account of them.

C. LIKE PRODUCT (6) It has been stated by some foundries and associations in the Community (users of the product concerned) that the major Community producer uses inputs other than hematite iron for the production of its foundry pig-iron, that this product could not serve the same purposes as the imported pig-iron produced from hematite iron ore, and that therefore this producer's foundry pig-iron and the imported foundry pig-iron are not like products within the meaning of Article 2 (12) of Decision No 2424-88-ECSC. They further argued that on this basis the producer in question should be excluded from the list of Community producers and that the proceeding should be terminated.

The Commission has established that, although the major EC producer does indeed use input other than hematite iron ore for its production of foundry pig-iron, its product has the same essential physical, technical and chemical characteristics as foundry pig-iron made from hematite iron ore, and the available evidence shows that the products are interchangeable. These products are therefore considered like products within the meaning of Article 2 (12) of the said Decision.

It must also be stated that the term hematite pig-iron although derived from the iron ore from which it is normally produced i.e. hematite (an ore which lends itself in particular to the production of foundry pig-iron), is also commonly used to distinguish this type of pig-iron from spheroidal pig-iron, which has quite different technical and chemical properties. Hematite pig-iron is also described as pig-iron for grey casting.

The Commission therefore confirms its conclusions on like product as outlined in Commission Decision No 67-94-ECSC.

D. DUMPING (7) No new arguments on dumping has been received since the imposition of the provisional measures.

Consequently, the preliminary determination on dumping as regards imports of the product concerned from Brazil, Poland, Russia and Ukraine are confirmed.

E. INJURY (8) The Government of Ukraine submitted data which referred to exports which took place after the investigation period and does not alter the determination of injury suffered by the Community industry (see recitals 28 to 46 inclusive of Decision No 67-94-ECSC).

As no new evidence regarding injury and causation to the Community industry was received, the Commission confirms the conclusion on injury reached in Commission Decision No 67-94-ECSC.

F. COMMUNITY INTEREST (9) The Committee of the European Foundry Associations, and the German and British foundry associations argued that the introduction of provisional anti-dumping measures in the form of a variable duty on imports of hematite pig-iron had already increased the price for this product to such a level that the Community foundries would lose their competitive edge on the world market. This in turn would lead to a loss of employment in the foundry industry that would be significantly higher than that of the Community pig-iron producers had the Commission not introduced protective measures.

The arguments advanced included the sharp increases in the price of the type of scrap used by the foundries (a raw material used in addition to, or as a substitute for hematite pig-iron for the production of grey cast iron) as well as the strong pressures exercised by the automotive industry on the foundries to lower their prices.

(10) To take account of the strong views expressed by and on behalf of the foundries, the Commission entered into active dialogue with the associations in order to be able to reach a proper and balanced decision with respect to the Community interests involved.

(11) The information supplied by the foundry associations permitted the following conclusions:

The total production of the Community foundries during the years 1990, 1991 and 1992 was 8 824 000 tonnes, 8 706 000 tonnes and 8 181 000 tonnes respectively.

The production directly related to grey cast iron (the type of product that is produced from hematite pig-iron) was 5 890 000 tonnes in 1990, 5 728 000 tonnes in 1991 and 5 345 000 tonnes in 1992.

The percentage of production relating to grey cast iron was therefore 67 % for 1990 and 66 % for both 1991 and 1992.

The total number of people employed during each of the three years was 160 130, 167 597 and 152 553.

On the basis of the available evidence, the Commission assumed that 66 % to 67 % of this workforce was involved in the production of grey cast iron.

During 1993, the year before the entry into force of the provisional measures concerned, the price of scrap used by foundries increased steadily, an increase which only recently seems to have come to a halt.

The data provided to the Commission show that the price of scrap in Germany during 1993 increased from ECU 93/tonne in January 1993 to ECU 117/tonne in December. Similar increases were recorded in France: from ECU 92/tonne to ECU 109/tonne, in Italy: from ECU 102/tonne to ECU 135/tonne and in the UK: from ECU 80/tonne to ECU 120/tonne.

During the same year the prices of hematite pig-iron decreased slightly in Germany from ECU 236/tonne to ECU 234/tonne and from ECU 208/tonne to ECU 190/tonne in France, remained steady in Italy at ECU 176-177/tonne and showed a slight increase in the UK from ECU 158/tonne to ECU 168/tonne.

The data show, furthermore, that hematite pig-iron accounted for 8,3 % of the cost of production of foundry products in Germany, 15 % of the cost in France, 11 % in Italy and 3,5 % in the United Kingdom.

(12) Against this background, the Commission has concluded that the introduction of a minimum price of ECU 149 (CIF Community frontier) on imports of hematite pig-iron from the countries concerned will not negatively affect the cost of production of the foundries in the Community.

The present level of the market prices of hematite pig-iron appears to be caused, first and foremost, by the increasing scarcity of the scrap which is used in combination and partially as substitution for the hematite pig-iron. A continuation of this scarcity might be expected due to the increasing use of electrical furnaces for the production of steel as these furnaces can make greater use of scrap than the traditional blast furnace. This scarcity has, as a consequence, an increasing demand for pig-iron.

Under these circumstances, it can be concluded that the introduction of definitive measures similar to those provisionally imposed, will have no negative effect on the end users of the product concerned, and will provide the Community producers of hematite with a safety net in the event of a recurrence of the situation in which the Community industry suffered material injury caused by the dumping practiced by the exporting countries concerned.

(13) The Commission, therefore, confirms its preliminary conclusions that the interests of the Community call for protective measures against imports of hematite pig-iron, originating in Brazil, Poland, Russia and Ukraine.

(14) In view of the evolutionary character of the market situation with regard to the product concerned, and of the Community interest to safeguard the competitiveness of its end users, it appears necessary to closely monitor further developments and possible negative effects on such end-users and to envisage that, in accordance with the provisions of Article 14 of Commission Decision No 2424-88-ECSC, a review will be initiated at any appropriate point in time.

G. UNDERTAKINGS (15) The Commission has received an offer of an undertaking within the meaning of Article 10 (2) of Commission Decision No 2424-88-ECSC on behalf of the Polish producers of the product concerned.

This offer is in the form of a minimum price undertaking at the level of ECU 149/tonne (cif Community frontier).

Taking into consideration the principal of equal treatment for all producers and exporters of hematite pig-iron in each of the countries concerned, the fact that the measures proposed will in this case have the same effect as a minimum price undertaking, but without the added difficulties of monitoring and control, the Commission considered, after consultation with the Member States, that the offer of an undertaking should not be accepted in this particular instance.

H. DEFINITIVE MEASURES (16) The provisional findings of the Commission having been confirmed, the definitive measures should be the same as those determined in the provisional Decision,

HAS ADOPTED THIS DECISION:

Article 1

1. A definitive anti-dumping duty is hereby imposed on imports into the Community of hematite pig-iron falling within CN code 7201 10 19, originating in Brazil, Poland, Russia and Ukraine.

2. The amount of the duty shall be the difference between the price of ECU 149/tonne and the accepted customs value (free at EC frontier) in all cases where this value is less than the above price.

3. For the purpose of calculating the duty payable, the minimum price shall be converted into the relevant national currency at an exchange rate established in the same way as that used for a calculation of customs value.

4. The provisions in force concerning customs duties shall apply.

Article 2

1. The amounts secured by way of provisional anti-dumping duty pursuant to Commission Decision No 67-94-ECSC shall be collected at the level of the duty definitively imposed and any amount secured in excess of the amount of the anti-dumping duty definitively imposed shall be released.

2. The provisions of Article 1 (4) above shall also apply for the definitive collection of the amounts provisionally determined.

Article 3

1. This Decision shall enter into force on the day following its publication in the Official Journal of the European Communities.

2. This Decision shall be subject to review in accordance with the provisions of Article 14 of Commission Decision No 2424-88-ECSC after a period of one year has elapsed.

This Decision shall be binding in its entirety and directly applicable in all Member States.

(1) OJ No L 209, 2. 8. 1988, p. 18.

(2) OJ No L 12, 15. 1. 1994, p. 5.

(3) OJ No L 112, 3. 5. 1994, p. 19.