DG Safeguards Initiates Investigation on Stainless Steel CR Sheets on Jindal Complaint

[Safeguard Initiation Notice No. D-22011/17/2014 dated 19th September 2014]

Sub: Initiation of safeguard investigation concerning imports of Cold Rolled Flat Products of Stainless Steel of chromium type, 400 series encompassing all Martensitic and Ferritic grades as per ASTM A 240/A240 M and equivalent/ comparable specifications in other standards like UNS, IS, Chinese DIN, JIS, BIS, EN etc.", excluding (i) width 1700mm and above and (ii) JBS (Jindal Blade Steel) grade and its equivalent into India.

An application has been filed before me under Rule 5 of the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997 by M/s. Jindal Stainless Limited, Jindal Centre, 12 Bikaji Cama Place, New Delhi-110066 through his consultant M/s. TPM Solicitors & Consultants, New Delhi for imposition of Safeguard Duty on imports of "Cold Rolled Flat Products of Stainless Steel of chromium type, 400 series encompassing all Martensitic and Ferritic grades as per ASTM A 240/A240 M and equivalent/ comparable specifications in other standards like UNS, IS, Chinese DIN, JIS, BIS, EN etc.", excluding (i) width 1700mm and above and (ii) JBS (Jindal Blade Steel) grade and its equivalent into India hereinafter referred to as ‘PUC’ (Product under consideration) into India to protect the domestic producers of ‘PUC’ against serious injury/threat of serious injury caused by the increased imports of ‘PUC’ into India. The ‘PUC’ is being imported falling under subheading 1975 under sub-headings 72193112, 72193111, 72193210, 72193310, 72193410, 72193510, 72202021 and 72209021 of the Customs Tariff Act 1975. The classification is however indicative only and in no way binding on the scope of the present investigations.

2.   Domestic Industry

M/s. Jindal Stainless Limited, Jindal Centre, 12 Bikaji Cama Place, New Delhi-110066, claimed that his production account for more than 85% of the total production of ‘PUC’ in the country & represent a major proportion of the Indian production of ‘PUC’ in the country and thus have the standing to file the present petition.

3.   Product Involved

The product under consideration is "Cold Rolled Flat Products of Stainless Steel of chromium type, 400 series encompassing all Martensitic and Ferritic grades as per ASTM A 240/A240 M and equivalent/ comparable specifications in other standards like UNS, IS, Chinese DIN, JIS, BIS, EN etc.", excluding (i) width 1700mm and above and (ii) JBS (Jindal Blade Steel) grade and its equivalent.

The ‘PUC’ are mainly used for the manufacture of white consumer goods, processed equipment, dairy equipment, automotive components, rail carts, metro coaches, architecture. building and construction, etc.

4.   Period of Investigation (POI)

The applicant for the purpose of the present application has considered the data for four years period. The applicant has submitted all the data from 2011-12 to 2014-15 (April to June 2014). The period for investigation selected is 2011-12 to 2014-15 (Annualised) which is long enough in order to take into consideration the market conditions and to ascertain the need of imposition of Safeguard Duty.

5.   Source of information

The import data for the ‘PUC’ has been taken from Cybex, Noida (Transaction wise) from 2011-12 to 2014-15 (April to June 2014) and same has been taken into consideration for analysis. The domestic data from 2011-12 to 2013-14 (Till January 2014) has been submitted by the domestic industry and the same has been verified by on-site visit by the department on the basis of excise records to the extent deemed necessary. The domestic data for February 2014 to June 2014 has been provided by the DI, duly certified, which was verified on the basis of excise records and the verified data has been taken into consideration for injury analysis.

6.   Increased Imports (Absolute & in relative terms)

‘PUC’ are imported into India from a number of countries, and primarily from Japan, Korea, China, EU, USA and Mexico. The imports of ‘PUC’ have shown an increasing trend in absolute terms as well as in relative terms. The imports of ‘PUC’ during the financial year is 2011-12 to 2014-15 (Annualised) remained as under:

6(a)   Increased imports in absolute terms:

2011-12

2012-13

2013-14

2014-15 (upto June 2014)

2014-15 (Annualised)

64,889

87,051

87,178

25,925

103700

100

134

134

-

160

The Imports have increased from 64,889 MT in 2011-12 to 103700 MT in 2014-15 (Annualised) which shows an increasing trend both in absolute terms as compared to base year and with preceding year i.e. 2013-14 and from base year in relative terms.

6(b)   Imports in relation to Production:

During the period 2011-12 to 2014-15 (Annualised) the market percentage of import in relation to production has increased from 81% to 94% as evident from the following details:

Financial Year

Total Imports (MT)

All India Production (MT)

% of import with respect to production

2011-12

64,889

79,857

81

2012-13

87,051

97,140

90

2013-14

87,178

1,08,829

80

2014-15 (Annualised)

1,03,700

1,10,100

94

7.    Serious Injury

The applicant have claimed that the increased imports of ‘PUC’ have caused and are threatening to cause serious injury to the domestic producers of ‘PUC’ as indicated by the following factors:

(a)  Production: The production of the domestic industry increased in 2014-15 as compared to the base year 2011-12, from. 67,876 MT in 2011-12 to 97,350 MT in 2014-15 (Annualised).

Year

Qty(MT)

Indexed

2011-12

67,876

100

2012-13

83,240

123

2013-14

94,929

140

2014-15 (Q1 Annualised)

97,350

143

(b)  Share of domestic producers in domestic demand: Market share of domestic producers has fallen in the most recent period. Applicants had a market share of 45% in 2011-12 which fell to 43% during 2014-15 (Annualised). During the same period, the market share of import increased from 46% in 2011-12 to 50% in 2014-15 (Annualised).

Financial Year

Total Import (MT)

Sales of DI (MT)

Sales of other Indian Producers (MT)

Total Demand (MT)

Market Share (%)

 

 

 

 

 

DI

Import

2011-12

64,889

63,729

11,981

141,014

45

46

2012-13

87,051

75,391

13,900

176,827

43

49

2013-14

87,178

81,344

13,900

183,102

44

48

2014-15 (Annualised)

1,03,700

89,672

12,750

206,478

43

50

(c)  Changes in the level of Sales :- The sales of the domestic industry increased from 63,729 MT in 2011-12 to 89,672 MT in 2014-15 (Annualised) i.e. in indexed points the increase is from 100 to 141, but during the same period the increase in demand is from 100 to 146 indexed points as shown in the above table.

(d)  Profit/loss - The profitability of the domestic industry has steeply deteriorated to such a situation that the domestic industry is now suffering financial losses. This is shown in the table below:-

Financial Year

Profitability (Rs. / MT) (Indexed)

2011-12

-100

2012-13

-315

2013-14

-953

2014-15 (Q1)

-957

8.   Productivity

During the period 2011-12 to 2014-15 (Q1), the productivity has increased on indexed basis to 143 in 2014-15 (Q1) as is evident from the table below:

2011-12

2012-13

2013-14

2014-15 (Q1)

(Indexed) 100

123

140

143

9.   Employment

During the period 2011-12 to 2014-15 (Q1), the employment has increased from 2445 to 2601 as is evident from the table below:

2011-12

2012-13

2013-14

2014-15 (Q1)

2445

2599

2593

2601

10. Capacity Utilisation

During the period 2011-12 to 2014-15 (Q1), the capacity utilization of DI has decreased from 61 % in 2011-12 to 49% in 2014-15 (Annualised) as is evident from the table below:

Financial Year

Installed Capacity (MT)

Capacity Utilisation (%)

2011-12

110635

61

2012-13

197979

42

2013-14

197979

48

2014-15 (Annualised)

197979

49

11.  The domestic industry has requested for immediate imposition of safeguard measures for a period of four years in their application. The domestic industry has also requested for imposition of provisional safeguard duty in view of steep deterioration in performance of the domestic industry as a result of increased imports of product under consideration.

12.  The application has been examined and it has been found that prima facie increased imports of ‘PUC’ have caused or are threatening to cause serious injury to the domestic producers of ‘PUC’ and accordingly, it has been decided to initiate an investigation through this notice.

13.  All interested parties may make their views known within a period of 30 days from the date of this notice to:

The Director General (Safeguards)

Bhai Vir Singh Sahitya Sadan: 2nd Floor,

Bhai Vir Singh Marg,

Gole Market, New Delhi-110 001, INDIA.

Telefax: 011-23741542/ 23741537

E-mail: dgsafeguards@nic.in

14.  All known interested parties are also being addressed separately.

15.  Any other party to the investigation who wishes to be considered as an interested party may submit its request so as to reach the Director General (Safeguards) on the aforementioned address within 21 days from the date of this notice.

16.  In terms of Rule 6 (7) of Customs Tariff (Identification and Assessment of Safeguard

Duty) Rules, 1997, any interested party may inspect the public file containing non-confidential versions of the evidence submitted by the other interested parties after the expiry of 30 days from the date of this notice.