DGAD Initiates Investigation on CR and HR Seamless Steel Tubes from China on Complaint of ISMT, Mah Seamless, Jindal and BHEL

Normal Duty Constructed Artificially

[Anti-dumping Initiation Notification F.No.14/2/2015-DGAD dated 8^th July 2015]

Subject: Initiation of anti-dumping investigation concerning imports of “Seamless tubes, pipes & hollow profiles of iron, alloy or non-alloy steel (other than cast iron and stainless steel), whether hot finished or cold drawn or cold rolled of an external diameter not exceeding 355.6 mm or 14’’ OD’’, originating in or exported from China PR.

Whereas ISMT Ltd and Maharashtra Seamless Ltd (hereinafter also referred to as applicants) have jointly filed an application before the Designated Authority (hereinafter also referred to as the Authority), in accordance with the Customs Tariff Act, 1975, as amended from time to time (hereinafter also referred to as the Act) and Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, as amended from time to time (hereinafter also referred to as the Rules), alleging dumping of Seamless tubes, pipes & hollow profiles of iron, alloy or non-alloy steel (other than cast iron and stainless steel), whether hot finished or cold drawn or cold rolled of an external diameter not exceeding 355.6 mm or 14’’ OD (hereinafter also referred to as the subject goods), originating in or exported from China PR (hereinafter also referred to as the subject country) and requested for initiation of anti-dumping investigation and for levy of anti-dumping duty on the imports of the subject goods, originating in or exported from the subject countries.

2. AND WHEREAS, the Authority finds sufficient prima facie evidence of dumping of the subject goods from the subject country and injury to the domestic industry and causal link between the dumping and injury exists, the Authority hereby initiates an investigation into the alleged dumping, and consequent injury to the domestic industry in terms of Rule 5 of the said Rules, to determine the existence, degree and effect of any alleged dumping and to recommend the amount of anti-dumping duty which, if levied, would be adequate to remove the injury to the domestic industry.

Product under Consideration

3. The product under consideration in the present investigation has been defined as “Seamless tubes, pipes & hollow profiles of iron, alloy or non-alloy steel (other than cast iron and stainless steel), whether hot finished or cold drawn or cold rolled of an external diameter not exceeding 355.6 mm or 14’’ OD’’. The product under consideration includes boiler pipes or line pipes used in hydrocarbon industry and casing and tubing of a kind used in drilling for oil and gas exploration. However the following products have been excluded from the scope of product under consideration:

i. Seamless alloy-steel pipes, tubes and hollow profiles of specifications of ASTM A213/ASME SA 213 and ASTM A335/ ASME SA 335 or equivalent BIS/DIN/BS/EN or any other equivalent specifications.

ii. Non - API and Premium Joints / Premium Connections / Premium Threaded Tubes & Pipes.

iii. All 13 Chromium (13CR) Grade Tubes and Pipes, and

iv. Drill Collars.

4. Seamless tubes are used where strength, resistance to corrosion, microstructure and product life is very crucial. Casing/tubing are used in extraction of Crude Oil and Gas from sea as well as from earth. Line pipes are used in hydrocarbon and processing industry. Boiler pipes are used in Boilers, Heat Exchangers, Super Heaters and Condensers, and in mechanical, structural and general engineering industry, Railways etc.

5. Seamless Pipes and Tubes are classified under Customs sub-heading No. 73.04 of Chapter 73 of the Customs Tariff Act, 1975. The classification is, however, indicative only and is not binding on the scope of the present investigation.

Domestic Industry and Standing

6. The application has been jointly filed by ISMT Limited and Maharashtra Seamless Limited. Jindal Saw Limited, Bharat Heavy Electrical Limited (BHEL) and Remi Metals Ltd are the other known producers of the subject goods in India. As per information available in the application, the production of the applicants account for 66.77% of the total Indian production. The applicants have also furnished a declaration stating that they neither imported the subject goods from the subject country during the POI, nor are related to any exporter/importer of the subject goods from the subject country. From the information available in the application, the Authority notes that the production of the applicants accounts for “a major proportion” in the total production of the product under consideration in India. The Authority, therefore, determines that the applicant constitutes domestic industry within the meaning of the Rule 2 (b) and the application satisfies the criteria of standing in terms of Rule 5 (3) of the Rules supra.

Country Involved

7. The country involved in the present investigation is China PR.

Like Article

8. The applicant has claimed that there are no known significant differences in subject goods produced by the domestic industry and exported from China PR. Both products have comparable characteristics in terms of parameters such as physical & chemical characteristics, manufacturing process & technology, functions & uses, product specifications, pricing, distribution & marketing, tariff classification, etc. The goods produced by the domestic industry are comparable to the goods imported from China PR in terms of essential product properties. The domestic product is technically and commercially substitutable to the imported product. Therefore, for the purpose of present investigation, subject goods produced by the applicant are being treated as “Like Article” to the subject goods imported from China PR within the meaning of the Rules.

Normal Value

9. The applicant has claimed that China PR should be treated as a non-market economy and determined the normal value in accordance with Para 7 and 8 of Annexure I of the Rules. The applicant has claimed normal value for China PR on the basis of cost of production in India, duly adjusted. In terms of Para 8 of Annexure 1 to the Rules, it is presumed that the producers of the subject goods in China PR are operating under nonmarket economy conditions. The applicant has submitted that normal value could not be determined on the basis of price or constructed value in a market economy third country for the reason that the relevant information is not available to them. Further, they claimed that the price from market economy third country to other countries, including India, cannot be relied upon for the reasons (a) the relevant information is not publicly available, (b) summary customs information cannot be relied upon for the reason that the product under consideration does not have dedicated customs classification, (c) the investigations being conducted by other investigating authorities (Europe, USA and Canada) clearly establishes that the Chinese producers are resorting to dumping in major global markets and thus the export price to other countries would also be suppressed. The applicant has therefore, claimed normal value based on cost of production in India, including selling, general & administration expenses and reasonable profit. In view of the above non-market economy presumption and subject to rebuttal of the same by the responding exporters from china PR, normal value of the subject goods in China PR has been estimated in terms of Para 7 of Annexure 1 to the Rules.

Export Price

10. Export price of the subject goods from the subject country has been determined by considering transaction wise import data collected from the DGCI&S. Price adjustments have been made on account of ocean freight, inland freight, marine insurance, commission, port expenses, VAT, etc in the exporting country to arrive at ex-factory export price.

Dumping Margin

11. Normal value and export price have been compared at ex-factory level in respect of the subject country. There is sufficient evidence that the normal value of the subject goods in China PR, so arrived is significantly higher than the ex-factory export price indicating, prima facie, that the subject goods are being dumped by exporters from subject country into the Indian market and the dumping margin is estimated to be above de minimis.

Injury and Causal Link

12. The applicant has furnished information on various parameters relating to material injury. Analysis of the information shows that although imports have declined, but the share of imports from subject country to total imports has significantly increased during the POI as compared to the base year. The share of imports of subject goods from the subject country has also increased in relation to production & consumption in India. Imports of the product under consideration are significantly undercutting the domestic prices and the effect of such imports was to prevent price increases which otherwise would have occurred to a significant degree. On the basis of the information provided with regard to various economic parameters relating to the domestic industry, it is seen that the performance of the domestic industry materially deteriorated in terms of production, capacity utilization, domestic sales value & volume, profits, return on investments, cash flow, inventories and market share. In addition to material injury, the applicant has claimed threat of material injury on the grounds of significant difference in the domestic and imported product price, ability of the subject exporters to export significantly higher volumes, current investigations being conducted by other countries. There is sufficient evidence that the injury to the domestic industry has been caused by dumped imports from China PR to justify initiation of an anti-dumping investigation in terms of the Rules.

Period of Investigation

13. The Period of Investigation for the purpose of the present investigation is 1st January, 2014 to 31st December, 2014 (12 months). The injury investigation period will, however, cover the period 2011-12, 2012-13, 2013-14 and the POI.

Retrospective Imposition of Duties

14. The applicant has requested for retrospective imposition of duty as the injury is claimed to be caused to the domestic industry by a history of massive dumping of subject goods. They have further submitted that considering the huge volume of such imports and injury to the domestic industry, unless duty is recommended retrospectively, the desired remedial measures of anti-dumping duties may not be accomplished. The interested parties may make their submissions in this regard.

Submission of Information

15. The known exporters in the subject country and their Government through their Embassy in India, importers and users in India known to be concerned and the domestic industry are being informed separately to enable them to file all relevant information in the form and manner prescribed. Any other interested party may also make its submissions, relevant to the investigation, within the time-limit set out below and write to:

The Designated Authority

Directorate General of Anti Dumping & Allied Duties,

Ministry of Commerce & Industry,

Department of Commerce,

Government of India,

4th Floor, Jeevan Tara Building

5 Parliament Street

New Delhi - 110001

Time Limit

16. Any information relating to the present investigation should be sent in writing so as to reach the Authority at the above address not later than 40 days from the date of publication of this notification. The known exporters and importers, who are being addressed separately, are however required to submit the information within 40 (forty) days from the date of the letter addressed to them separately. If no information is received within the prescribed time limit or the information received is incomplete, the Authority may record their findings on the basis of the ‘facts available’ on record in accordance with the Anti-dumping Rules. It may be noted that no request, whatsoever, shall be entertained for extension in the prescribed time limit.

Submission of Information on Non-Confidential Basis

17. In case confidentiality is claimed on any part of the questionnaire’s response/submissions, the same must be submitted in two separate sets (a) marked as Confidential (with title, index, number of pages, etc.) and (b) other set marked as Non-Confidential (with title, index, number of pages, etc.). All the information supplied must be clearly marked as either “confidential” or “non-confidential” at the top of each page.

18. Information supplied without any mark shall be treated as non-confidential and the Authority shall be at liberty to allow the other interested parties to inspect any such nonconfidential information. Two (2) copies each of the confidential version and the nonconfidential version must be submitted.

19. For information claimed as confidential; the supplier of the information is required to provide a good cause statement along with the supplied information as to why such information cannot be disclosed and/or why summarization of such information is not possible.

20. The non-confidential version is required to be a replica of the confidential version with the confidential information preferably indexed or blanked out / summarized depending upon the information on which confidentiality is claimed. The non-confidential summary must be in sufficient detail to permit a reasonable understanding of the substance of the information furnished on confidential basis. However, in exceptional circumstances, party submitting the confidential information may indicate that such information is not susceptible of summary; a statement of reasons why summarization is not possible, must be provided to the satisfaction of the Authority.

21. The Authority may accept or reject the request for confidentiality on examination of the nature of the information submitted. If the Authority is satisfied that the request for confidentiality is not warranted or the supplier of the information is either unwilling to make the information public or to authorize its disclosure in generalized or summary form, it may disregard such information.

22. Any submission made without a meaningful non-confidential version thereof or without a good cause statement on the confidentiality claim may not be taken on record by the Authority. The Authority on being satisfied and accepting the need for confidentiality of the information provided; shall not disclose it to any party without specific authorization of the party providing such confidential information.

Inspection of Public File

23. In terms of Rule 6(7), the Designated Authority maintains a public file. Any interested party may inspect the public file containing non-confidential version of the evidence submitted by the interested parties.

Non-Cooperation

24. In case any interested party refuses access to or otherwise does not provide necessary information within a reasonable period, or significantly impedes the investigation, the Authority may record its findings on the basis of the facts available to it and make such recommendations to the Central Government as deemed fit.