Subject: Anti-dumping
investigation concerning import of Low Carbon Ferro Chrome (LCFC) originating to the
No. 47/ADD/94.—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 Article 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 petition from Ferro Alloys Corporation Limited, through Indian Ferro Alloys
Association dumping of Low Carbon Ferro Carbon
Ferro Chrome (hereinafter referred of LCFC) originating from
Russian, Kazakhistan and Ukraine.
(ii) The Authority notified the
embassies of
(iii) The Authority issued a
Public Notice dated 6.6.1995 published in the Gazette of India, Extraordinary, notifying
decision of initiating and dumping proceedings concerning imports of LCFC classified under
heading 7202.49 or Schedule I of the Customs Tariff Act, 1975 and NO 7202.49.00 under
Indian trade classification (Based on
Harmonized Commodity Description and Coding System) originating from Russia, K Kazakhistan
and Ukraine.
(iv) The Authority forwarded copy
of the said public notice of initiation to The known exporters, importers and the complainant.
(v) The Embassies of
Russia, Kazakhistan and Ukraine in New Delhi were also
informed about the initiation of investigation. While forwarding a copy of public notice
on initiation of the investigations, they were requested to advise the exporters/producers
from their countries to respond to the questionnaire within the prescribed time.
(vi) A copy of the petition was provided to the exporters, embassies
of Russia, Kazakhistan and Ukraine. The Trade Representation
of Russia Federation in India desired names and addresses of the Russian manufacturers/
producers, which are also supplied to them on 14.08.1995.
(vii) All India Induction Furnaces
Association was also provided a copy of the petition and was provided opportunity to
furnish information to the investigation in accordance with rule 6(5) of the Rules supra.
(viii) The exporters were addressed on 6.07.1995 again, to ascertain the country of origin of the subject goods in accordance with the proviso to the explanation to Section 9A(1) c of the Act.
(ix) The Authority sent questionnaire, to elicit relevant information to the following:
(I) Exporters
1.
M/s. Norcalloys SA, Luxemburg,
2.
M/s. Norcalloys L.P., New York,
3.
M/s. Syncret
B V., Rcrtterdamn,
The Nether land,
4.
M/s. Rutmet Inc, Ontario, Canada,
5.
M/s. Otto
Wolff, Dnsseldorf. Germany.
6.
M/s. Societe Anonyme Des Minerals, Luxemburg.
7.
M/s Derik Raphael & Co. Ltd.,
8.
M/s. Sudamin Trading, Waterloo, Belgique.
(II) Importers
1. M/s Anita International,
New Delhi,
2.
M/s. Omprakash Rakesh
Kumar, New Delhi.
3.
M/s. Shiva Alloys Pvt. Ltd, Delhi,
4. M/s.
Steel Strips Lid., Chandigarh,
5. M/s.
Chivas International, New Delhi.
6. M/s.
Lowwear Alloys Products Pvt. Ltd. New Delhi,
7
M/s. Unique Alloys Pvt. Ltd., New Delhi,
8
M/s. Kumar Steely Jagadhari,
9.
M/s. Singhania Chemicals, Ludhiana,
10.
M/s. Allied Meet Holdings Pvt. Ltd.,
New Delhi,
11 M/s. Uttar Pradesh Steels,
Napa. Muzaffarnagar
12.
M/s. Balaji Industrial Products. Jaipur.
(x)
An opportunity was also given to exporters, Importers, petitioners, Govts. of Russia, Kazakhstan and Ukraine and other interested parties to express
Their views in a public hearings held un 23rd August, 1995. The
said public hearing was attended by ;
1.
The representatives of the petitioner domestic industry viz. M/s. Ferro Alloys
Corporation Limited.
2.
Officials of Russian Trade Office in
3.
Officials of Ministry of Foreign Economic Relations and Trade of
4.
M/s. Sterling Alloys, Baroda on behalf
of the exporter M/s. Norcalloys SA, Luxemburg and M/s. Norcalloys L.P., New York
5. All
6.
M/s. Om Prakash Rakesh Kumar,
7. M/s. Shiva Alloys Pvt.
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 parity(ies)
to the investigation und the written submissions made by the parties were made available
to the other parties for their counter comments.
(xii) The Authority sought and verified information deemed
necessary for the investigation, and to this end investigation were carried out at the
premises of M/s Ferro Alloys
Corporation Limited.
(xiii) A request of the petitioner to terminate the anti-
dumping investigation against LCFC of Ukraine origin was received by the Authority under
Rule 14 supra to terminate the investigation as to the existence, degree and effect of
alleged dumping in relation to imports of LCFC or Ukrainian.
(xiv) The authority also conducted cost
investigation and worked out optimum Cost of Production and Cost to make and sell LCFC in
(xv)
The investigation covered the period from1st April 1994 to
B. PETITIONER’S
VIEWS
3. The
petitioner made the following submissions in the oral hearing which have been reproduced
in writing:
(A) LCFC being imported and being produced by the domestic industry are “like articles”.
(B)
“‘Non Market Economy” countries and as per procedure followed by
European Union and Government of Brazil,
(C)
LCFC of Russian and Kazakhistan origin is being dumped
in
(D) The dumped imports are
continuing unabated and are causing material injury to the domestic industry, and the
petitioner has suffered both in terms of the sales quantum and sales realisation.
(E) One or the producers in the organised sector (M/s. Industrial Development Corporation of Orissa Ltd.) has been forced to close its LCFC Operations due to indiscriminate dumping.
C.
VIEWS OF RUSSIAN TRADE OFFICE
4.
Representatives of The Russian Trade Office in
(a)
Starting from 1991
(b) It would have been
more reasonable to choose some other country with approximately the same level of
industrial development and products force, e.g.
Netherlands, U.K, Germany, instead or Zimbabwe for the purpose of Normal Value determination,
(c)
Complete picture with regard to imports of LCFC import in
(d) The data submitted by
the petitioner gives no idea about Cromium content (referred
to as Cr. content hereinafter) taken
as the basis for calculations.
(e) The petitioner has by
“pure coincidence” omitted the LCFC imports by M/s Mukund
Ltd. and M/s. Mahendra Ugine Steel Co. (112 MT at the
price of Rs. 41740) per MT and 58 MT at the price of Rs 35820 per MT).
(f) The petitioner
holds a monopoly in production of LCFC in the Indian market,
(g) The petition
does not contain the names of the Russian exporters.
(h) The Russian export of
LCFC la
6
The major views expressed by the exporters directly or through their agent in
(a) The petitioner
enjoys monopoly and has rationed this product since the last two decades.
(b) The petitioner has no entertained dealers, who are an
integral part of the industry.
(c) LCFC being produced by
the petitioner mainly has Carbon range 0.03%, 0.05%, and 0.10% max, whereas the imports are mainly of
the grade with 0.15 Carbon content.
(d) Anti dumping duty is
levied by those countries where duty structure is low, and the Indian customs duty is almost like an anti
dumping duty.
(e) The International
Ferro Chrome Industry was facing slump during the investigation period.
(f) All
material are of Russian origin and there is no production in Kazakistan.
(g) The prices have
increased in the international market after the investigation period and even the
petitioner has increased its prices.
7. Importers,
All India Induction Furnaces Association and other interested parties have expressed their
views, which are briefly as follows:
(a)
The petitioner is a
monopoly, and sells directly to consumers without entertaining the traders.
(b)
The international Ferro
Chrome market was in slump during investigation period. The current prices are much
higher.
(c)
Very little quantity of
LCFC was imported in 1994-95, an even now after reduction of custom duty the imports are
negligible.
(d)
The petition has been
filed with the aim of getting the customs duty increased.
(e)
The petitioner has been
making huge profits in the past.
(f)
No direct import from
these countries has been made, and all such imports whose origin could be these Countries
are routed through
8. The above
submissions made by the Russian Trade –Office, Exporters directly as also through
their agent in India, 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 finding.
9. In the absence
of any direct response from the exporters in the prescribed format, the Authority has made
the findings on the basis of the information available to it and as per Rule 6(8) supra.
10. The Authority notes
that All India Furnace Association circulated the plea of the petition to its members vide
its circular No. 22 dated 17.8.1995. The Association desired details of the calculations
made by the petitioner about its cost of production of LCFC and HCFC. The same being confidential, were not supplied. The Authority ,
however, confirms that it has conducted a verification at the premises of the petitioner
and has worked out optimum cost of production and cost to make and sell KLCFC for the domestic industry, as detailed
in procedure supra.
11. The Authority notes
that LCFC being exported originating from
12.
Low Carbon Ferro Chrome (LCFC) is Ferro Alloy required as vital input for Stainless
Steel production with very stringent specifications of Silicon, Carbon,
13. The petition ahs been filed
through Indian Ferro Alloys Association, Bombay for and on behalf of M/s. Ferro Alloys
Corporation Limited, Hindustan Times House, 8th Floor, 18-20 Kasturba Gandhi Marg, New Delhi-110 001
having its Registered Office at Shreeram Bhawan,
Tumsar (Maharashtra) and works at Shreeramnagar, Distt. Viziangaram, Andhra Pradesh. Another producer, M/s. Industrial
Development Corporation of Orissa, a Government of Orissa undertaking, has since stopped the production of LCFC . The petitioner
accounts for a majority of production of LCFC in
14. None of the exporters has
furnished the information in the prescribed proforma nor
divulged in information about domestic price of the product, though some of the exporters
confirmed having exported LCFC to
16 The Authority, during
the course of investigation, wrote to M/s. Zimbabwe Alloys Limited.
17. Russian Trade Office,
whilst objecting treatment of
18. The Authority has, under the
circumstances, for the purpose or this
preliminary determination worked out, Normal Value for Russia and Kazakhstan on the basis
of cost of production constructed for
Zimbabwe on the basis of the best
information available in account with rule
6(8) of the Rules supra and information in
India.
K. EXPORT PRICE
19. The Authority notes that the
import details reported by the importers for the purpose or custom clearance, as compiled
by DGCIS.
20. The petitioner has furnished
photocopies of some invoices and bills of entry for imports cleared at one of the custom
ports namely ICD Tugalakhabad, though matching bill of entries for all the invoices are not
submitted.
21.
M/s. Norcalloys S.A,
22. M/s. Otto Wolff HGmbH has confirmed having exported 300 MT I.CFC to
23. Derek Raphael &
Co. Ltd, an exporter has stated having shipped little or no LCFC from Russia/Kazakhistan to
24. Since no other exporter has
responded to the Authority’s request, the
Authority has worked out export price on the bus is of the copies of in voices raised
during the period of investigation viz. 1st April, 1994 to 31st
March.1995 by these exporters, and famished by the petitioner.
25. The Authority has arrived at
weighted average export
price for each exporter for LCFC having average Chromium content 66.1% as detailed in the
paragraph relating to comparison.
26. The CTF export price
has been adjusted for insurance, and ocean freight for working out FOB export price on the
basis of the best available information. The Authority notes that none of the exports arc
directly from
27. For the purpose of a
fair comparison between
the normal value and export price and in accordance with Section
9(A) (2), proviso to the explanation to Section 9(A)(c) of
the Act and rule 6(8) of the Rules supra, the
authority took into account the
information supplied by the petitioner, the importers, the exporters, and the best
information available with it in the absent
of’ any direct response in the presented form and manner from the exporters. Since
normal value has been constructed on the
basis of best available information for
S. No. |
Name of the Exporter and
Place |
Normal Value (US$/MT) |
Export Price (US$/MT) |
Dumping Margin (US$/MT) |
I |
Country of Origin –
Russian
|
|||
1. |
Derek Raphael & Co.,
|
1359 |
941.16 |
417.84 |
2. |
Norcalloys SA, Luxemburg
|
1359 |
807.11 |
551.89 |
3. |
Norcalloys LP,
|
1359 |
770.17 |
588.83 |
4. |
Societe Anonyme
Des Minerals, Luxemburg
|
1359 |
913.58 |
445.42 |
5. |
|
1359 |
822.49 |
536.51 |
II. |
Country of Origin- Kazakhistan
|
|||
Societe Anonyme
Des
Minieral Luxemburg |
1359 |
773.37 |
585.63 |
29. 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 of international prices are
not relevant for the purpose.
M. INJURY
30. 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 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 product in India, or whether the
effect of such imports us otherwise to depress prices to a significant degree or prevent
price increases, which otherwise would have occurred, to a significant degree.
The Authority examined under
Annexure-II to Rule 9(2) as to whether the effect of imports originating from
31. For the examination of the
effect of dumped imports on the domestic industry in
(a) Volume and Market
Share of Dumped Imports
32. Total imports of LCFC from
33. Market share at
(b) Production Trend and
Capacity Utilization
34. Production of LCFC of the
domestic industry declined by 16% in [he investigation period as compared to the previous
period Production during April, September and October 1994 remained very low. The overall
capacity utilisation consequent to lower production has also
declined from 71.36% in 1991-92 to 49.63% in l994-95.
(c) Sales in absolute
quantity
(d) Selling Price Trend
36. Average realisation
from sales off LCFC (exclusive of
Central excise duty) to the domestic industry increased from Rs.
54009 PMT (1993-94) to Rs 56737 PMT in 1994-95. The same
is, however, far below the cost of production.
(e) Stock Trend
37. Stock of the finished
product with the domestic industry increased to 1170 MT during investigation period as
compared to 881 MT during previous, year,
showing an increase 33% in spite of decrease in production of LCFC during the
corresponding period.
(f) Profitability Trend
38. The petitioner is engaged in
multi-product activities and its overall profitability position may not be representative.
However, on the basis of detailed cost study conducted by the Authority, it is found that
the petitioner company is suffering net losses from the sale of LCFC at prices much below its cost of
production.
(g) Conclusion on Injury
39. The Authority find that (i) the imports have increased
in absolute terms from
(ii) The share of
(iii) The exports from
(iv)
The various indicators relating to
domestic industry such as Production, Capacity Utilisation,
Sales Quantities, Average Sales Realisation, Profit/Loss etc.
collectively established that the domestic
industry has suffered material injury.
40. The Authority is, thus, lad
to the conclusion that the domestic industry has suffered material injury.
N. CASUAL LINK
41.
In determining whether material injury to the domestic industry was caused by the
dumped imports, the Authority took into account the to following facts; (i) the imports of the product from Russia and Kazakhistan
increased in absolute terms and relative to the consumption of the product in India. The
share of
(ii) The
import from
O.
INDIAN INDUSTRY’S INTEREST
42.
The purpose of anti dumping duties is
in general to eliminate dumping which is causing injury to the domestic industry and to
reestablish the situation of open and fair competition on the Indian market winch is in
the general interest of the country.
43. The authority confirms
that it has worked out reasonable selling price of
LCFC in
44. Injury being caused to
the petitioner from factors other than dumping have not been
considered by the Authority while recommending the amount of Anti Dumping duty necessary
to remove the full extent of injury to the petitioner.
45.
The Authority notes
that the system of
marketing to be adopted by an industry of a
company in the industry is at the discretion
of the industry of the company, as the case may
be, within the framework of legal
requirements, and the industry or the company
is not under obligation to follow a particular system for marketing its produce or appoint
dealers/traders.
46. The Authority notes
that petitioner can be asked to furnished the information as is reasonably available with
it, Neither the petitioner has deliberately ignored the fact of imports made by M/s. Mukund Ltd., or M/s. Mahendra Ugine (the same have been mentioned in the import details for
1992-03 furnished by the petitioner) nor the petitioner has claimed having furnished
exhaustive details of the imports. The petitioner itself has expressly stated having
furnished details of “… some of the imports cleared at ICD, Tugalakhabad
…. Which may in no way be exhaustive…”. The
Authority, however, notes that except, M/s. Norcalloys SA none of the exporters have furnished information about
the exports made by them.
47.
The authority notes
that the identity of the Russian exporters is not relevant for the present investigation in
view of the acceptance of the exporters in
accordance with proviso to the explanation to Section 9A(l)c
48. The Authority confirms
that the imports are more than de minimus limits.
49. The Authority notes
that imports are of LCFC having Carbon content ranging between 0.02%
to 0.15% and not of 0.15% only.
50.
The Authority confirms
that it has taken into consideration the level of customs duties applicable during the
investigation period.
51.
The Authority notes that whilst it could be true that the
international market was in slump during the investigation periods, normal value and
export price during the investigation period only has been considered and therefore the factum of dumping is not affected by a slump or boom in the
international market.
52.
The purpose of anti
dumping duty is, as detailed in para 42 to remove the unfair practice and not
to alter the levy Custom Duty
53. The Authority notes
that the comparison of the prices of High Carbon Ferro Chrome (HCFC) and LCFC is
irrelevant die purpose of the present investigations, except that HCFC is being used for
the production of Silicon Chrome (which in term is being used for the production of LCFC by the domestic
industry, which has been taken care by the Authority while arriving at fair selling price
for the domestic industry.
54. The Authority,
accordingly, has come to the conclusion that:-
(i)
LCFC originating from
(ii) The Indian domestic
industry has suffered material injury
(iii)
The Injury has been
caused by the imports originating from
55. On the written request
of the petitioner, the Authority under Rule 14 supra terminated the investigation against
allegation of dumping of Ukraine origin LCFC as brought out in para
2 (xiii) above.
56. The authority
considers is necessary to impose a provisional anti dumping duty on import of LCFC
originating from Russia and Kazakhstan in order to remove the material injury to the
domestic industry, pending final determination
57. The Authority
considered whether a duty lower than the dumping margin would be enough to remove the
injury. For this purpose, the exporter-wise weighted average landed price of LCFC was
compared with selling price of LCFC produced by the domestic industry considered
reasonable after taking into account an optimum level of capacity utilization, for the
period of investigation. Wherever such difference was less than the dumping margin, lesser
duty to the extent
of injury is recommended. Accordingly, the Authority hereby recommends imposition of
provisional anti dumping duty on imports of Low Carbon Ferro Chrome falling under custom
code 720249 and originating from
S. No. |
Name of the Exporter and
Place |
Normal Value (US$/MT) |
I |
Country of Origin –
Russian
|
|
1. |
Derek Raphael & Co.,
|
10,900 |
2. |
Norcalloys SA, Luxemburg
|
17,400 |
3. |
Norcalloys LP,
|
18,600 |
4. |
Societe Anonyme
Des Minerals, Luxemburg
|
12,300 |
5. |
|
16,900 |
Exporters other than above
|
18,600 |
|
II. |
Country of Origin- Kazakhistan
|
|
1. |
Societe Anonyme
Des
Minerals Luxemburg |
18,500 |
2. |
Exporters other than above
|
18,500 |
The exporters, importers known to be concerned are being addressed separately, who
may make known their views within 40 days from
the date of this publication, and apply to be orally hears. Any other interested party may
also make known its views to the Authority within 40 days of the date of this
notification.
T.S.
VIJAYRAGHAWAN, Designated Authority
And
Addl.
Secy.