Government Moves into High Gear to Protect Industry -Three Anti-dumping Findings Released to Suffer Stiff Duties Soon

·     Met Coke, Colour Coated Steel and Jute Products from Bangladesh and Nepal

·     Commerce Ministry Releases Final Findings in Investigation, Customs Notifications to Implementation to Follow

Met Coke

·     Investigation recommends final anti-dumping duties of $25.20/MT (China) and $16.29/MT (Australia).

·     Step of Provisional verification and data verification skipped

·     China incidence works out 12.5% of import value, five percent protection in Budget already available.

·     Protection to Saurashtra Gujarat Units will hurt downstream foundries.

·     “Low Ash” used for making met coke not available in India.

·     Earlier impost on China 2004-2009 period lapsed after failure of sunset review

·     Japan Investigation terminated on request of domestic industries

[Ref: Anti-dumping Final Findings Notification No. 14/9/2015-DGAD dated 20th October 2016]

Views of the domestic industry and the opposing interested parties

Views of the interested parties with regard to the product under consideration are:

·     The PUC is incorrectly identified and, if at all, it should be amended to only cover low ash Met Coke with ash content less than 15%. There exists no reason to show why the PUC should extend to Met Coke with ash content up to 18% when on two earlier occasions the DGAD in the Final Findings concerning import of Metallurgical Coke restricted the scope of the examination to Met Coke with ash content up to 15% only. It was also noted that the input-out norms of DGFT suggest that ash content of 15% or less is the appropriate indicator for identifying low ash Met Coke.

·     The PUC is incorrectly defined and Met Coke containing low ash (upto 12.5%) is to be excluded.

·     The PUC is incorrectly defined and Met Coke containing low ash (upto 12.5%), low phosphorous (up to 0.018%) and low sulphur (upto 0.65%) is to be excluded.

·     The PUC is incorrectly defined and Met Coke containing low ash (upto 12%), low moisture (upto 5%), low phosphorous (up to 0.035%) and low sulphur (upto 0.65%) is to be excluded.

·     The lump coke used by steel producing companies in their blast furnaces is to be excluded from the scope of the PUC as this is not produced by the domestic industry.

·     The producers who are captive users of Met coke cannot be legally excluded from the scope of the domestic industry.

·     The producers who are captive users of Met Coke cannot be excluded / included by cherry picking to establish standing. No explanation has been provided as to why Jindal Stainless Ltd. has been included as a supporting producer when Jindal Stainless Ltd. is also a producer using PUC for captive use. It must also be noted that the companies such as Nilanchal Ispat Nigam Limited and Sathavahana Ispat Ltd., which have substantial sales in the domestic market, have not been included in the analysis.

·     The practice of putting onus on the producer/manufacturer to complete the value chain by filling exporter/trader responses is wrong. Whether the producer/manufacturer has exported the subject goods through one exporter/trader or through several, and if one of them denies to cooperate with DGAD, then the whole responses filed by the producer/manufacturer and its exporters/traders are penalized by rejected the data on the ground of value chain, which is again against DGAD law and practice because there is no such written law globally which speaks so and here it is being used as one of the anti-dumping mechanism tools to reject the exporters/ traders filed data/Information.

·     The normal value for market economy country cannot be constructed based on the cost of the petitioners. The legal provisions at best provide for construction of the normal value based on the cost of production in the domestic market of the exporting country only. Therefore, the normal value as constructed for Australia must be rejected.

·     Japan cannot be taken as surrogate country as it is not the appropriate market economy third country pursuant to Annexure I of the AD Rules as the normal value calculated based on the domestic prices of the like product in Japan are likely to be much higher than that of China due to devaluation of Yen. Coal imported by Japan from Australia like India results in higher purchase cost due to freight cost and high labour cost. It is further stated that the GDP per person in Japan is much higher as compared to China and the plants in China are more advanced than the plants in Japan.

·     No basis has been provided for calculation of the normal value. The constructed normal value for Australia is much higher than the international prevailing prices of the PUC.

[Click here for full text of Final Findings]

Coated Steel

Provisional Anti-dumping Duty of $849 per tonne on Colour Coated Steel from China and EU

[Ref: Anti-dumping Final Findings Notification No.  No.14/28/2016-DGAD dated 20th October 2016]

Items Covered: Pre-painted, painted, colour coated or organic coated flat steels in coils or not in coils whether or not with metallic coated substrate of zinc, aluminium-zinc or any other substrate coating

·     Twin Complainant Essar Steel and JSW Steel Coated Products

·     Indian Companies Arcelor Mittal and Tata Corus found dumping in Home country, Thyssen the Steel Giant also named

·     Injury margins into EU case go up to 60% while China injury margin only 30%

The domestic industry has already received multiple protection in violation of the WTO Agreements:

·     Increase of customs duty

·     Minimum import price

·     Anti-dumping investigations on other steel products

[Click here for full text of Final Findings]

Jute Products

·     India slapped anti-dumping duty on LDC countries of South Asia namely, Bangladesh and Nepal on IJMA (Indian Jute Mill Association) Complaints

·     India-Bangladesh and India-Nepal relation based on Free and Open Trade at Zero Duty affected substantially.

·     10-20 percent dumping margin claimed.

·     Complex duty structure with rate varying from Nil to $20 -$102 per tonne slapped on jute yarn with default of $97.19 per tonne

·     Hessian fabrics $351.72 per tonne; Sacking bag $138.97 per tonne

·     Nepal Duties in the region of $8.18 to $38.90 depending upon the item

·     More than 200 Bangladesh companies and 38 from Nepal named

·     Entire value chain starting from yarn, fabrics and sacking covered in impost

·     Normal value constructed as domestic price of Jute products in Bangladesh not available! (Bangladesh is the largest producer of the Jute products in the world)

·     Step of Preliminary findings and verification of data dropped, Incomplete and biased investigation alleged

·     Shift to non-environment friendly plastic bags expected with price rise in Jute products

[Ref: Anti-dumping Final Findings Notification No.  No. 14/19/2015-DGAD dated 20th October 2016]

·     There is no evidence or name of the nineteen companies that shut down as a result of imports.

·     Most of the petitioners are importers and therefore they do not have standing. Market intelligence provides that except Hukumchand Jute Mills, Naihati Jute Mills Co. Ltd, Bowreah Jute Mills Private Ltd, Murlidhar Ratanlal Exports Limited (Unit: India Jute Mills) and Murlidhar Ratanlal Exports Limited (Unit: Hastings Jute Mills) all others are importers.

·     Petitioners have erroneously mentioned that only Gloster and Budge Budge have imported. The standing should be reanalyzed after removing these two companies.

·     The volume of imports of the petitioners and their share in production should also be disclosed.

·     36% does not constitute major proportion as per Rule 2(b).

·     The petitioners have done cherry picking as only 15 companies have been chosen where there are 91 mills and 31 members from the petitioning association.

·     Supporters should be distinguished from petitioners while determining major proportion of production.

·     More than 10 petitioner companies directly imported PUC from Bangladesh and petitioner has itself admitted to imports by two companies.

·     The petitioner does not have standing and total production of 36% disqualifies them to be an industry as per AD rule of WTO.

·     As per Article 11(a) of SAFTA, constructive remedies refer specifically to consultations and undertakings. Consultations were conducted and there were no requests of price undertaking by the subject country and therefore it can’t be looked into.

·     The petitioners have not separately provided data related to market share, domestic sales, and imports volumes of three product categories.

·     Any shock on export performance of Jute sector in Bangladesh will have a deteriorating effect on employment situation.

·     As per Article 11(a) of SAFTA, constructive remedies should be looked into.

·     The balance of trade is heavily inclined in favour of India and imposition of antidumping duties will worsen the situation.

·     The trade gap situation will worsen as Indian imports are much more than Bangladesh imports.

·     Bangladesh had promptly lifted a temporary ban on export of jute products on friendly concerns raised by India. This should be reciprocated.

·     To ensure undue profit margin, Indian mills are importing Bangladeshi Low Quality Raw Jute in Huge Quantity which is being used to produce sacking. Therefore, imports are helping Indian Jute Mills.

·     Jute is a common heritage of India and Bangladesh and imposition of antidumping duties will impede growth of this industry.

[Click here for full text of Final Findings]