|
| |
REPORT OF FINDINGS ON THE ANTI-DUMPING PROTEST
AGAINST THE
IMPORTATION OF STEEL BILLETS FROM RUSSIA
(HS HEADING NOS. 7207.11 90 & 7207.20 90) UNDER SECTION 301 OF THE
TARIFF AND CUSTOMS CODE, AS AMENDED
(ANTI-DUMPING INV. NO. 99-01)
28 August 2000
P u b l i c V e r s i o n
TABLE OF CONTENTS
List of Tables and Annexes
Abbreviations/Legends
1. Executive Summary and Conclusions
2. Introduction
3. The Commission’s Inquiry
4. The Domestic Industry and Market Dumping
5. The Economic Condition of the Domestic Industry
6. Final Determination
LIST OF TABLES AND ANNEXES
Tables
1-A - Required Percentage Chemical Composition
1-B - Required Percentage Chemical Composition
1-C - Required Percentage Chemical Composition
2 - Specific Importations of Steel Billets from Russia
3 - Tariff Rates of Steel Billets
4 - The Philippine Market for Steel Billets
5 - Export Prices by Exporter: 1998
6 - Normal Values (FOB)
7 - Dumping Margins by Exporter
8 - Volume of Dumped Imports
9 - Volume of Dumped Imports Vis-à-vis Domestic Consumption and Production
10 - Market Shares
11 - Trends in Sales of Steel Billets
12 - Trends in Production, Capacity Utilization and Inventory
13 - Breakdown of Production Cost
Annexes
"A" - Computation of Dumping Margins by Exporter
ABBREVIATIONS/LEGENDS
| Amalgamated |
Amalgamated Iron Works, Inc. |
| APSMI |
Association of Philippine
Steel Mills, Incorporated |
| ASTM |
American Society of Testing
Materials |
| BIS |
Bureau of Import Services |
| BOC |
Bureau of Customs |
| CAPASCO |
Cathay Pacific Steel
Corporation |
| CRF |
Clean Report of Findings |
| Commission |
Tariff Commission |
| D.O. |
Department Order |
| DOF |
Department of Finance |
| DOLE |
Department of Labor and
Employment |
| DTI |
Department of Trade and
Industry |
| GATT |
General Agreement on Tariffs
and Trade |
| Hottick |
Hottick Investments Limited |
| MECHEL |
Chelyabinsk Integrated Iron
and Steel Works |
| Milwaukee |
Milwaukee Industries
Corporation |
| MT |
Metric Tons |
| NSC |
National Steel Corporation |
| NSO |
National Statistics Office |
| OSG |
Office of the Solicitor
General |
| PNS |
Philippine National
Standards |
| Pag-Asa |
Pag-Asa Steel Works, Inc. |
| POI |
Period of Investigation |
| PSRMA |
Philippine Steel Rolling
Mills Association |
| R.A. |
Republic Act |
| SKK |
SKK Steel Corporation |
| SAMC |
Steel Asia Manufacturing
Corporation |
SGS |
Societe
Generale de Surveillance |
| TCCP |
Tariff and Customs Code of
the Philippines |
1. EXECUTIVE SUMMARY AND CONCLUSIONS
1.1 SUMMARY
On 11 January 1999, National Steel Corporation
(NSC) filed with the Department of Finance (DOF) a dumping protest against the importation
of steel billets from Russia. The protest was supported by three other local
billet manufacturers, namely, SKK Steel Corporation (SKK), Milwaukee Industries
Corporation (Milwaukee) and Amalgamated Iron Works, Inc. (Amalgamated).
The protest was endorsed by the DOF to the Bureau of Import
Services (BIS) of the Department of Trade and Industry (DTI) on 30 March 1999 for initial
investigation. In its Initiation Report, the DTI-BIS found the information supporting the
petition of NSC as constituting a prima facie case and recommended the initiation
of a preliminary anti-dumping investigation. The notice of initiation of preliminary
investigation was published on 28 May 1999 in the Philippine Daily Inquirer and Manila
Bulletin.
On 2 August 1999, the DTI-BIS issued its report of positive
preliminary findings against seventeen (17) exporters of steel billets from Russia with
the recommendation for the imposition of a provisional measure (anti-dumping bond) ranging
from 5.51% to 29.91% of the export price.
Pursuant to Section 301 of the Tariff and Customs Code of the
Philippines, the DTI-BIS endorsed the protest together with its findings to the Tariff
Commission on 9 August 1999 for formal investigation to determine the merits of imposing a
definitive anti-dumping duty.
In compliance with procedural requirements, notices were sent to
the Philippine Embassy in Moscow, Russia and the Russian Embassy in Makati City,
Philippines informing the respective Ambassadors that the case is with the Commission for
formal investigation. Individual notifications with attached questionnaires were also sent
to the protestant, other domestic producers of steel billets, Philippine importers,
trader-exporters, Russian manufacturers/exporters, and other interested parties. Also
notified, through their embassies in Manila, were the governments of the trading firms
whose billet exports from Russia were subject to provisional measures. Invitations to the
consultation and pre-hearing conference were likewise sent to all interested parties. A
notice of public hearing was published in two (2) newspapers of general circulation on 22
December 1999. All known interested parties and concerned government agencies were also
sent individual notices.
The product under consideration is steel billets containing by
weight 0.01% or more but less than 0.25% of carbon falling under HS Subheading 7207.11 90
and steel billets containing by weight 0.25% or more of carbon classified under HS
Subheading 7207.20 90. Billets are generally used in the production of reinforcing bars
and wire rods.
The Commission’s investigation covered imports of steel
billets for the 12-month period from 01 January to 31 December 1998.
1.2
CONCLUSIONS
1.2.1 Domestic Industry Support
There are five (5) domestic manufacturers of steel
billets: NSC, Cathay Pacific Steel Corporation (CAPASCO), Amalgamated, Milwaukee and SKK.
Although the latter three (3) producers supported the anti-dumping protest filed by NSC,
they failed to comply with the necessary documentary and/or evidentiary requirements
necessary for the determination of dumping, material injury and causality, both during the
preliminary determination by the DTI-BIS and the formal investigation by the Commission.
The DTI-BIS, having established that NSC accounted for 26% of
total domestic production, considered the requirement for domestic industry support
satisfied. Further, the DTI-BIS considered NSC as the only company representing the
domestic steel billets industry.
In its Resolution of 04 February 2000, the Commission adopted
the aforementioned position of the DTI-BIS and ruled that only NSC’s submission would
be considered.
1.2.2 Like Product
Based on an assessment of the product under consideration and
locally-manufactured billets, the Commission is satisfied that domestically-produced steel
billets of cross-sectional dimensions of 100 mm x 100 mm, with lengths ranging from 3
meters to 6 meters, and conforming to PNS 230 (ASTM 33), PNS 275 (ASTM 40) and PNS 415
(ASTM 60) constitute like products to the imported product under consideration, i.e.,
Russian steel billets with cross-sectional dimensions of 60 mm x 60 mm up to 120 mm x 120
mm, of lengths of 4 meters up to 12 meters, and conforming to 5SP/PS GOST 380 or its
equivalent in other national standards.
The imported and locally produced products are comparable in
terms of quality, are used interchangeably in the production of Grade 230, Grade 275, and
Grade 415 reinforcing bars with 8 mm, 10 mm, 12 mm, 16 mm, 20 mm, 25 mm and 28 mm
diameters, and are classified under the same HS Subheading Nos. 7207.11 90 and 7207.20 90.
1.2.3 Price Difference
1.2.3 Price Difference
Export Price
The Commission based its estimates of export prices on
import entries submitted by NSC and on file with the Commission which were validated using
the Clean Report of Findings (CRFs) provided by the Societe Generale de Surveillance
(SGS). Adjusted to FOB level (i.e., CIF value less freight and insurance), export prices
ranged from US$109.50/MT to US$204.50/MT.
Normal Value
The Commission was unable to determine the normal value of
steel billets based on domestic selling prices and/or cost of production in Russia due to
unavailability of data. A certification from the Philippine Embassy in Russia submitted by
NSC stated that the bulk of steel billets produced by Russian steel mills are utilized for
their own or affiliated mills’ consumption.
Using the best-information-available option, the Commission
based its estimates of normal values on the FOB export prices of steel billets by Russia
as published in 1998 issues of Metal Bulletin. Based on port of origin, the estimated
normal values are: Far East Port -- US$140.00/MT to US$195.00/MT and Black/Baltic Sea
Ports -- US$145.00/MT to US$200.50/MT
Dumping Margin
Of the thirty-seven (37) identified exporters of steel
billets from Russia during the POI, eleven (11) had dumping margins that were not de
minimis. These margins ranged from US$2.19/MT to US$22.72/MT.
1.2.4 Negligible Volume of Dumped
Imports
Dumped imports accounted for 22% of total
Philippine imports of steel billets in 1998. Since the share of dumped imports is above
3%, same is not negligible.
1.2.5 Material Injury and Causal
Linkage
Volume of Dumped Imports
Total Philippine imports of steel
billets from Russia amounted to 396,000 MT in 1998. Relative to domestic consumption,
dumped imports accounted for 17% of the domestic market. With respect to domestic
production, dumped imports represented 73% of NSC’s 1998 production level.
Price Effects
A comparison of the average ex-factory domestic selling
price of steel billets produced by NSC and the average landed cost of dumped imports of
steel billets from Russia showed price undercutting by the latter in the 2nd
and 4th quarters of 1998. The average landed cost of dumped steel billets was
2.45% lower in the 2nd quarter and 11.31% lower in the final quarter. The
magnitude of undercutting in the 4th quarter was influenced by the large
devaluation of the Russian Ruble in September 1998.
NSC’s selling prices steadily
decreased from the 2nd quarter to the 4th quarter despite relatively
stable production costs in the first three quarters. Price depression, particularly
evident in the 2nd quarter when NSC’s price dropped by 8%, led to a lower
profit margin in the 2nd quarter and a loss in the 3rd quarter.
Price suppression occurred in the 3rd and 4th
quarters when NSC’s selling prices declined despite increases in the cost to produce
and sell. During these quarters, selling prices fell below cost. Suppression was
pronounced in the 4th quarter when NSC’s selling price fell by 7% despite
an increase in production cost of 11%. NSC’s loss grew during this period.
The incidence of price depression and suppression cannot be
attributed entirely to the dumping of Russian billets. Imports of billets from other
countries also exerted competitive pressure on NSC. Russia remained the price leader,
however, supplying 58% of total imports during the POI while other countries individually
accounted for only 6% or less.
Market Share
NSC’s share of the domestic market for steel billets
was 20% in 1996. This increased to 25% in 1997 then fell to 24% in 1998. The market was
contracting over the three-year period.
That its market share was reduced only slightly was made
possible through the remedial pricing strategies NSC adopted. Analysis of the quarterly
movements in market shares show that NSC was able to defend its share against non-dumped
imports but was unsuccessful against dumped imports.
Sales
In 1997, sales of NSC rose by 11% despite a 9% contraction
of the market. In 1998 when dumping occurred, sales of NSC paralleled the change in market
size. Moreover, the 36% reduction in its sales was greater than the 24% contraction of the
market.
The entry of dumped imports in the 1st quarter
reduced NSC’s sales by more than half relative to average quarterly sales in 1997. In
the 3rd and 4th quarters, the decreases in NSC’s sales were
invariably greater than the contraction of dumped imports despite the company’s
suppressed prices. This indicates that NSC’s prices remained uncompetitive vis-à-vis
dumped imports leading to a significant restrictive effect on the company’s sales.
Production, Capacity Utilization and Inventory
NSC’s production decreased by 2% in 1997 and 29% in
1998. Production in 1998 was affected by NSC’s shutdown for a total of 84 days for
inventory control and power allocation purposes. With annual rated capacity of 300,000 MT,
utilization dropped to 69% accordingly.
The reduction in production volumes led to declines in inventory
levels.
Cost of Production
The cost of producing a metric ton of steel billets in 1998
was 15.47% higher than the 1997 level. This increase was partly attributable to the
increase in the price of its direct material (scrap) and other conversion costs (i.e.,
fixed and transfer cost) which constituted 60% and 13% of total production cost,
respectively.
Despite the huge increase in production cost, NSC did not adjust
its selling prices upward. On the contrary, its prices were suppressed to defend its sales
and market share from dumped and non-dumped imports.
Profitability
NSC suffered a loss of P124 million from its billet
operations in 1996 but recovered in 1997, generating income (EBIT) of P75 million. In
1998, NSC incurred another loss which was more than triple the 1996 level. This loss is
attributable to the increase in production cost combined with depressed prices and reduced
sales. Since the dumping of Russian billets had a negative impact on sales and
significantly influenced NSC’s pricing, it was an important contributory factor to
the net loss sustained by NSC in 1998.
Cash Flow
The drop in sales revenue in 1998 by 30% contributed
markedly to NSC’s liquidity problem. The revenue lost could have been used to fund
working capital requirements (e.g., purchase of steel scrap for its billet production).
Since dumping had a significant dampening effect on NSC’s sales, it aggravated the
company’s cash flow problems.
Investment and Ability to Raise Capital
NSC’s inability to generate investment and raise
capital is traceable to internal problems which include enormous debt, high interest cost,
foreign exchange losses, high cost of scrap, high operating costs, and a shortage of
working capital.
Employment and Wages
The total workforce in billet operations was 158 as of
November 1998 as against 190 in 1997. The retrenchment of thirty-two (32) employees was
caused by the reduction in production and sales on which dumping had material influence.
Factors Other Than Dumping Which Caused Injury
a. Competition from Normal (Undumped)
Import
Normal imports of steel billets provided stiff competition to
the domestic industry as shown by their market performance. Imports of billets from other
countries gained an increasing share of the market from 1996 to 1998 although Russia
remained the dominant player. Competition was heightened by the decrease in the tariff
rate on billets and the realignment of currency values in the aftermath of the 1997 Asian
financial crisis.
b. Undumped imports of billets from Russia as well as billets
sourced from other countries were priced lower than billets from NSC.
Market Contraction
 |
Unfavorable economic conditions ensuing from the Asian financial
crisis that broke in 1997 dampened demand and depressed prices. The Philippine market for
steel billets contracted by 9% and 34% in 1997 and 1998, respectively. |
High Cost of Production
NSC has a cost disadvantage in the production of steel billets
arising from the lack of iron ore; expensive imported scrap and low-yield local scrap
(same constituting 60% of total production cost); and relatively higher electricity costs
and lower level of technology.
Financial Performance
In 1996, NSC incurred a loss of P2.032 billion due to the
revaluation of assets as required by incoming investor Hottick Investment Ltd. In 1997,
EBIT amounting to P0.780 billion was realized.
The company incurred another loss in 1998 with corresponding
negative returns on sales, assets and stockholders’ equity. This loss was due mainly
to the reduction in net sales by 29%.
The relative share of billet operations to NSC’s overall
operations was 21% in 1998.
Foreign Currency Losses
In 1997, NSC incurred total foreign currency losses of about
P2.5 billion. Of this amount, some P1.2 billion were capitalized and included as part of
construction costs of the company’s plant facilities and installation of machinery
and equipment and about P861 million were charged to the deficit account.
In 1998, a total of 154.9 million in foreign currency losses was
again capitalized and included as part of construction costs of the company’s plant
facilities and installation of machinery and equipment.
1.3 APPLICATION OF PROCEDURAL
MATTERS UNDER R.A. 8752 (ANTI-DUMPING ACT OF 1999)
R.A. 8752 which amends Section 301 of the TCCP was signed into
law by the President on 12 August 1999. The R.A. took effect on 4 September 1999, fifteen
(15) days following its publication on 19 August 1999 in Malaya and the Philippine
Standard.
Procedural provisions of RA 8752 are applicable to the instant
anti-dumping case. In Republic vs. Court of Appeals, G. R. No. 92326, 24 January 1992, the
Court held:
"Procedural matters are governed by the law in force
when they arise, and procedural statutes are generally retroactive in that they apply to
pending proceedings and are not confined to those begun after their enactment although,
with respect to such pending proceedings, they affect only procedural steps taken after
their enactment." (205 SCRA 356).
1.4 FINAL
DETERMINATION
The Commission finds positive evidence of price differences and
is satisfied that dumping per se caused material injury to the domestic industry.
It is therefore ordered that definitive anti-dumping
duties be imposed on the following exporters of steel billets originating from Russia:
| No. |
Exporter |
US$/MT |
%
of
Export Price |
| 1. |
Leman Commodities S.A. |
25.64 |
22.72 |
| 2. |
Metal Traders Stahl Handel |
18.00 |
14.75 |
| 3. |
Multi-Trade Enterprises AG |
17.50 |
13.57 |
| 4. |
SLAV-AG (Austria) |
16.17 |
12.41 |
| 5. |
Asia Industrial Co., Ltd. |
10.00 |
6.06 |
| 6. |
Balkan Steel Int’l.
Establishment (Liechtenstein) |
8.00 |
4.86 |
| 7. |
Pacific Atlantic Resources PTE,
Ltd. (Australia) |
6.76 |
5.51 |
| 8. |
Balli Steel (U.K.) |
6.11 |
3.62 |
| 9. |
Mitsui & Co., Ltd. (Hong
Kong) |
4.85 |
3.16 |
| 10. |
Duferco, SA (Switzerland) |
4.63 |
3.59 |
| 11. |
Zap-Sib Met Kombinat |
3.74 |
2.19 |
| 12. |
Lebgok AG (Switzerland) |
0.00 |
0.00 |
| 13. |
UVISCO, Ltd. (U.K.) |
0.00 |
0.00 |
| 14. |
UMS United Metal Supply, Ltd.
(Liechtenstein) |
0.00 |
0.00 |
| 15. |
Stenna Trading AB (Sweden) |
0.00 |
0.00 |
| 16. |
Crown Trade & Finance Ltd.
(Switzerland) |
0.00 |
0.00 |
| 17. |
Tse Yu Hong Metals, Ltd. (Hong
Kong) |
0.00 |
0.00 |
| 18. |
VANOMET AG (Switzerland) |
0.00 |
0.00 |
| 19. |
Noble Resources Corp., Ltd. (Hong
Kong) |
0.00 |
0.00 |
| 20. |
Angku-Taichung (Taiwan) |
0.00 |
0.00 |
| 21. |
BCD Supplies Ltd. (Russia) |
0.00 |
0.00 |
| 22. |
BCL Trading |
0.00 |
0.00 |
| 23. |
Borelia Ltd. (Liechtenstein) |
0.00 |
0.00 |
| 24. |
COMCE IMPLEX, Ltd. |
0.00 |
0.00 |
| 25. |
Daewoo Handels GMH Corp. (Korea) |
0.00 |
0.00 |
| 26. |
Glencore International AG
(Switzerland) |
0.00 |
0.00 |
| 27. |
Klockner Steel Trade GMBH
(Germany) |
0.00 |
0.00 |
| 28. |
MacSteel Int’l, Ltd. (U.K.) |
0.00 |
0.00 |
| 29. |
Metal Russia Corp., Ltd. |
0.00 |
0.00 |
| 30. |
OSKMET, Ltd. (U.K.) |
0.00 |
0.00 |
| 31. |
Preussag Handel GMBH (Germany) |
0.00 |
0.00 |
| 32. |
Reeferway, Ltd. (British Virgin
Islands) |
0.00 |
0.00 |
| 33. |
Satra Metallurgical, Inc. (USA) |
0.00 |
0.00 |
| 34. |
Taco Metal Asia, Ltd. |
0.00 |
0.00 |
| 35. |
Tenson Steel, Ltd. (Hong Kong) |
0.00 |
0.00 |
| 36. |
Trade Arbed PTE, Ltd. (Singapore) |
0.00 |
0.00 |
| 37. |
Voest Alpine Intertrading AG
(Austria) |
0.00 |
0.00 |
With regard to those exporters or producers
in the exporting country in question who have not exported the product to the Philippines
during the POI, their individual margins of dumping shall be determined following a review
to be initiated by the Commission and carried out on an accelerated basis, provided that
said producers or exporters can show that they are not related to any of the exporters or
producers in the exporting country who are subject to the anti-dumping duties on the
product. No anti-dumping duties shall be levied on imports from such producers or
exporters while the review is being carried out.
1.5 SUSPENSION OF IMPOSITION OF ANTI-DUMPING DUTY
Article 9.1 of the Agreement provides:
"The decision whether or not to impose an anti-dumping
duty in cases where all requirements for the imposition have been fulfilled, and the
decision whether the amount of the anti-dumping duty to be imposed shall be the full
margin of dumping or less, are decisions to be made by the authorities of the importing
Member. It is desirable that the imposition be permissive in the territory of all Members,
and that the duty be less than the margin if such lesser duty would be adequate to remove
the injury to the domestic industry."
Following an ocular inspection conducted on 8 November 1999
revealing the non-operation of NSC, the Commission orders the suspension of the imposition
of the prescribed definitive anti-dumping duties until such time that NSC can show proof
that its Billets Division is already on a normal operation status. With respect to the
four (4) other producers of steel billets, the elements of material injury and causality
were not established.
1.6 REVIEW OF THE ANTI-DUMPING DUTY
Paragraph (O) of Section 301 of the TCCP, as amended by R.A.
8752, states that:
"However, the need for the continued imposition of the
anti-dumping duty may be reviewed by the Commission when warranted motu proprio, or upon
the direction of the Secretary, taking into consideration the need to protect the domestic
industry against dumping."
"If the Commission determines that the anti-dumping
duty is no longer necessary or warranted, the Secretary shall, upon its recommendation
issue a Department Order immediately terminating the imposition of anti-dumping
duty."
2. INTRODUCTION
2.1
THE ANTI-DUMPING PROTEST
On 11 January 1999, National Steel Corporation (NSC)
filed with the Department of Finance (DOF) a dumping protest against the importation of
steel billets from Russia. The protest was supported by three other local billet
manufacturers, namely, SKK Steel Corporation (SKK), Milwaukee Industries Corporation
(Milwaukee) and Amalgamated Iron Works, Inc. (Amalgamated).
The protest was endorsed by the DOF to the Bureau of Import
Services (BIS) of the Department of Trade and Industry (DTI) on 30 March 1999 for initial
investigation. In its Initiation Report, the DTI-BIS found the information supporting the
petition of NSC as constituting a prima facie case and recommended the initiation
of a preliminary anti-dumping investigation. Notice of initiation of preliminary
investigation was published on 28 May 1999 in the Philippine Daily Inquirer and Manila
Bulletin.
On 12 August 1999, notice of affirmative findings of dumping and
application of provisional measures was published by the BIS in two (2) newspapers of
general circulation. As stated in the public notice, anti-dumping bonds ranging from 5.51%
to 29.91% of the export price would be imposed against seventeen (17) identified and other
exporters of Russian steel billets. Subsequently, the DOF directed the Bureau of Customs
(BOC), in its Indorsement of 13 August 1999, to collect said dumping bond.
On 9 August 1999, the Tariff Commission (Commission) received
the request from the BIS to undertake formal investigation of the case.
2.2 THE ROLE OF THE TARIFF COMMISSION
Upon endorsement of the case by the DTI-BIS, the Commission
conducted a formal investigation to determine the merits of imposing a definitive
anti-dumping duty. This investigation is pursuant to Section 301 (b) of the Tariff and
Customs Code of the Philippines (TCCP), as amended by Republic Act (R.A.) 7843 and further
amended by R.A. 8752, as implemented by DOF Department Order (D.O.) No. 150-95, and in
accordance with Article VI of the General Agreement on Tariffs and Trade (GATT) 1994. The
Commission’s investigation focused on the following:
 | verifying if the kind or class of article in question was imported into or sold
or was likely to be sold in the Philippines at a price less than its normal value; |
| ascertaining the difference, if any, between the export price and the normal
value of the article; and |
| determining if, as a result thereof, the domestic industry producing like
articles in the Philippines suffered, or was threatened with, injury or suffered material
retardation of the establishment of the domestic industry was caused. |
2.3 THE PROCESS OF INVESTIGATION
The investigation involved the following:
| identification of concerned parties, local and foreign; |
| notification of concerned foreign governments and distribution
of questionnaires to all parties; |
| conduct of consultation, pre-hearing conference and public hearings; |
| collection of relevant economic and financial data such as production, imports,
sales, pricing, inventory level, employment, etc.; |
| ocular inspection of local billet shops as well as rebar manufacturing plants; |
| verification of data and submissions of parties; |
| acceptance and evaluation of memoranda of parties; |
| determination of the existence of dumping and if the existence of such dumping
caused, or is likely to cause, material injury to the local industry; |
| disclosure to all interested parties of the essential facts which formed the
basis for the decision to apply definitive measures; and |
| preparation of report of final determination and submission of such to the
Secretary of Trade and Industry for the issuance of the necessary D.O. imposing the
definitive anti-dumping duty. |
2.4 INTERLOCUTORY MATTERS
On 15 January 2000, counsel for importers-protestees filed a
Petition for Review on Certiorari with prayer for temporary restraining order/ preliminary
injunction before the Court of Appeals against a Resolution of the Commission dated 14
December 2000. Said Resolution denied the Motion for Reconsideration dated 25 August 1999
filed by protestees with the BIS, and subsequently endorsed to the Commission, on the
affirmative finding of dumping and application of provisional measures by the BIS.
The Office of the Solicitor-General filed its Comments on 15
July 2000. The case remains pending with the Court.
2.5 SCOPE OF THE ANTI-DUMPING INVESTIGATION
The investigation covered the importation of steel billets from
Russia which might have injured, was likely to injure, or might have retarded the
establishment of, an industry producing like product in the Philippines.
3. THE COMMISSION’S INQUIRY
3.1 PRODUCT UNDER CONSIDERATION
The product subject of the anti-dumping protest is hereafter
referred to as the "product under consideration."
Steel billets are semi-finished steel products obtained by
hot-rolling puddled bars, pilings and ingots. These are nearly square in cross-section and
are used for re-rolling and drawing into bars, rods, wire rods, and arc wires. Steel
billets are used as raw materials by steel rolling mills producing steel bars and wire
rods.
The goods covered by the original protest are steel billets from
Russia which were imported in different sizes as follows: 60 mm x 60 mm x 4.0 meters to
9.0 meters; 65 mm x 65 mm x 9 meters; 80 mm x 80 mm x 9 meters to 11.7 meters; and 100 mm
x 100 mm x 1meter to 11.8 meters.
In its preliminary investigation, the BIS determined the like
product to be "steel billets with typical square section of 100 mm x 100 mm in
lengths of 3 meters to 6 meters with carbon content of 0.13% to 0.38% and are used for the
production of 8 mm, 10 mm, 12 mm, 16 mm, 20 mm, 25 mm and 28 mm rebars of Structural,
Grade 275 and Grade 415 varieties."
3.2 PERIOD OF INVESTIGATION
For the determination of dumping, the Commission’s
investigation covered imports of steel billets from Russia during the 12-month period
beginning 01 January 1998 and ending 31 December 1998. For the assessment of injury, the
period of investigation (POI) was the three-year interval from 1996 to 1998.
3.3 NOTIFICATIONS
3.3.1 Formal Investigation/Questionnaires
On 23 August 1999, notifications were sent to Ambassador Anatoli
Khmelnitski of the Embassy of Russia and Philippine Ambassador to Russia Jaime S. Bautista
informing them of the Commission’s formal investigation of the anti-dumping protest
filed by NSC. Likewise notified, through their embassies in Manila, were the governments
of the trading firms whose exports of billets from Russia were subject to provisional
measures.
Individual notifications with attached questionnaires were also
sent to NSC, four (4) domestic manufacturers, forty-eight (48) exporters, and thirty-one
(31) importers. Parties were given thirty (30) days from receipt of the questionnaire to
accomplish and return same to the Commission.
3.3.2 Consultation
Along with the notification of formal investigation on 23
August 1999, the various parties were informed of a consultation for the purpose of
exploring the possibility of amicable settlement/price undertaking and to apprise the
parties on the procedure of investigation and other related matters necessary for the
speedy disposition of the case. Held on 27 August 1999, the consultation was attended by
the legal counsels and/or representatives of both protestant (NSC) and protestees
(importers and exporters) plus a representative from the Russian Embassy.
3.3.3 Pre-Hearing Conference
Invitations to a pre-hearing conference were sent on 25 and 26
October 1999 for purposes of setting the schedule and procedures of the public hearing,
for obtaining stipulation and admission of facts and documentary evidence, and to discuss
other relevant matters necessary for the expeditious and/or otherwise orderly conduct of
the hearings. The pre-hearing conference was held on 29 October 1999 and was attended by
the legal counsels and/or representatives of protestant and protestees.
It was agreed during the conference that parties would submit
their respective evidences for assessment and evaluation by the Commission prior to the
conduct of the public hearings. The following deadlines were agreed upon: 5 November 1999
- evidence on product comparability; 19 November 1999 – evidence on normal value,
export price, and the economy of Russia; and 10 December 1999 – evidence on injury
and causality.
Ten (10) hearing dates were also set, all in the month of
January 2000. The specific dates were: 5, 7, 10, 12, 14, 17, 20, 21, 24, and 26 January
2000.
3.3.4 Public Hearing
Notice of public hearing was published on 22 December 1999 in
the Philippine Star and Today. All known interested parties and concerned
government agencies were also sent individual notices.
A total of five (5) public hearings were conducted (on 10, 14
and 17 January and on 7 and 28 February 2000) during which the legal counsels and
representatives of the protestant and protestees were in attendance. Principal memoranda
were submitted by protestant and protestees on 23 March 2000 and 24 March 2000,
respectively. No counter-memoranda were filed.
3.3.5 Ocular Inspection and Verification of
Information
Ocular inspection of manufacturing facilities and/or
verification of information submitted were conducted for these six (6) firms agreeable to
such: NSC, SKK, Milwaukee, Cathay Pacific Steel Corporation (CAPASCO), Steel Asia
Manufacturing Corporation (SAMC), and Pag-Asa Steel Works, Inc. (Pag-Asa).
3.4 BASIS OF INQUIRY
For purposes of final
determination, the Commission limited its investigation according to the provisions of
Section 6.10 of the Agreement which state:
"Authorities may limit their examination either to a
reasonable number of interested parties or products by using samples which are
statistically valid on the basis of information available to the authorities at the time
of the selection, or to the largest percentage of volume of the exports from the country
in question which can be reasonably investigated."
Furthermore, parties who failed to submit answers to the
questionnaires were governed by the provisions of Section 6.8 of the Agreement which
provide:
"In cases in which any interested party refuses access
to, or otherwise does not provide, necessary information within a reasonable period or
significantly impedes the investigation, preliminary and final determinations, affirmative
or negative, may be made on the basis of facts available…"
3.5 DOMESTIC PRODUCERS
3.5.1 National Steel Corporation
NSC is one of the country’s largest manufacturing companies
and is a pioneer in the iron and steel industry. It has four major operating facilities:
an electrolytic tinning line producing tinplates; a hot mill producing hot-rolled coils
and plates; a cold mill producing cold-rolled coils and tin mill black plates; and a
billet shop producing steel billets.
NSC’s main office is at the NSC Bldg., 377 Sen. Gil J.
Puyat Avenue, Makati City. Its plant is located along Tominobo National Highway, Camp
Overton, Suarez, Iligan City. At the time of its shutdown on 7 November 1999, NSC was
majority-owned by Malaysian firm Hottick Investments Limited (Hottick).
Major Positions/Issues
| Russia is a non-market economy. The Philippine Embassy in Russia reported that
the bulk of steel billets produced by Russian steel mills are utilized by their own
affiliated mills and are not sold in the domestic market. The Embassy has also been unable
to get reliable information on the domestic price or Home Consumption Value of steel
billets in Russia for 1998. In several anti-dumping investigations conducted by the United
States, the Russian Federation was treated as a non-market economy country. |
| The appropriate surrogate country to determine normal value is Turkey since: (a)
it is at a comparable level of economic development with Russia, (b) it is a significant
producer of steel billets similar to Russia, and (c) the United States has ruled and
chosen Turkey as the most appropriate surrogate country for Russia in its anti-dumping
investigations because of comparability in terms of overall economic development with
Russia. |
| The normal value of Russian steel billets based on the known published export
price of steel billets from Turkey in 1998 is $155/ metric ton to $235/metric ton. |
| Local producers of steel bars interchangeably utilize Russian or locally produced
billets attesting to the comparability of these products. Tests conducted on the resulting
physical properties and chemistry of steel bars produced from either Russian or local
billets give very similar results. Steel bars produced from local billets comply and
conform to Philippine National Standards. |
| The importation of Russian steel billets has adversely affected the profitability
and financial viability of NSC. NSC was forced to price its steel billets at below cost in
order to remain competitive price-wise with Russian billets, NSC’s sales volumes were
reduced, and net losses were sustained from 1996 to 1998. |
Answers to Questionnaire
|
Although NSC failed to respond to the Commission’s
questionnaire, it manifested its adoption of its earlier submission to the BIS. NSC also
submitted affidavits on normal value, product comparability, injury, causal link, and the
economy of Russia.
|
Ocular Inspection
|
Ocular inspections of NSC’s billet shop in Iligan City were
conducted on 16-17 September 1999 and 8-9 November 1999. During the initial inspection,
the Commission discovered no operation in the billet shop. The team was informed that the
shop had been temporarily closed since 7 September 1999 due to the shortage of steel
scraps used as raw material. It was expected, however, that operation would resume in
October. At the second inspection, the Commission was informed that the billet shop was
shut down on 2 November 1999. |
The information that follows was based on inspection of the
actual facilities, examination of documents/records, and discussions with NSC plant
personnel:
| NSC’s billet shop is ISO-certified. The plant has a cooling table designed
for seven (7) meter long billets and has two (2) electric arc furnaces which produce 100
mm x 100 mm x 3 meters to 6 meters steel billets (Commercial size billets). The annual
rated capacity is 300,000 metric tons (MT). |
| NSC can produce billets longer than six (6) meters but this will require a major
overhaul of the operation, substantial investments, temporary interruption of operation,
and time to change the capability design of the plant. |
| The billet manufacturing process follows modern routing wherein steel billets are
manufactured from classified and well-segregated scrap in the electric arc furnaces. NSC
used coke, iron and steel scraps, hot briquetted iron (HBI) and direct reduced iron (DRI)
as raw materials. About 40% of NSC’s steel scrap requirements were imported. |
| There were 152 personnel when the shop was shut down on 2 November 1999. |
Verification of Information
Verification of information submitted by NSC was conducted on
13, 18 and 19 January 2000, and 14 and 15 February 2000.
3.5.2 Cathay Pacific Steel Corporation
CAPASCO’s main office is located at the 25th
Floor, Galleria Corporate Center, EDSA corner Ortigas Avenue, Quezon City. Its
billet-making plant may be found at F.P. Felix Avenue, Cainta, Rizal.
Major Positions/Issues
| Being both a producer and importer of steel billets, CAPASCO manifested that
local and imported billets have comparable quality. It is the chemical composition of a
billet that is critical, i.e., whether the standard for the level of undesirable elements
present in a billet is met. |
| From the second half of 1998 up to early 1999, it was more economical to import
rather than manufacture billets. |
Answers to Questionnaire
The Commission sent two questionnaires: a Domestic
Manufacturer’s Questionnaire and an Importer’s Questionnaire. CAPASCO responded
only to the latter: its response was received by the Commission on 24 September 1999.
Ocular Inspection
An ocular inspection of CAPASCO’s billet shop in Cainta was
conducted on 6 October 1999. Below are the major findings:
| The firm is both a producer and importer of steel billets. CAPASCO consumes its
entire billet production for its rebar and wire rod production. It imports billets because
its billet output is insufficient. |
| The company has two (2) electric arc furnaces with maximum capacities of 30 tons
each. The furnace in the Cainta plant has an annual capacity of 230,000 tons. The other
furnace is located in a plant in Taguig with an annual capacity of 70,000 tons. |
| To produce billets, the firm imports hot briquetted iron (HBI) and direct reduced
iron (DRI) from China, India and Sabah while pig iron is imported from China. Domestic
scrap is also used. |
| The firm’s billets are used to produce structural (Grade 33), Grade 40 and
Grade 60 rebars. |
| The rolling mill furnace in the Cainta plant requires three (3) meter billets.
Imported billets of greater lengths are cut to meet the three (3) meter requirement. |
3.5.3 Milwaukee Steel Corporation
Milwaukee’s billet shop and rolling mill are located in its plant in
Apalit, Pampanga.
Major Positions/Issues
 | The company experienced difficulties due to the dumping of steel billets from
Russia. Daily production fell by half and around 40% of the labor force was retrenched due
to the decline in demand for local billets caused by dumping. |
| The importation of Russian steel billets caused injury to the company. Milwaukee
was unable to raise prices and was forced to sell its steel billets at the same price as
imported Russian steel billets just to maintain its sales and market share. This price was
either just enough to cover its cost of production or even below. |
Answers to Questionnaire
Milwaukee did not respond to the Commission’s questionnaire
and merely submitted an affidavit on its injury from dumping. Information the company
provided to the BIS and subsequently forwarded to the Commission was limited.
Ocular Inspection
The ocular inspection of Milwaukee’s billet shop was conducted on 7 October
1999. The following information were gathered:
| The company has both a billet shop and a rolling mill that produces rebars. |
| Locally-sourced scrap is used to manufacture billets. |
| The billet shop can produce up to 7,000 tons daily. |
| Billets are both internally used and sold to other rolling mills. |
3.5.4 SKK Steel Corporation
SKK’s billet shop is located in San Simon, Pampanga.
Major Positions/Issues
| The dumping of Russian steel billets depressed demand for local billets to the
extent that the company had to shut down the operation of one of its electric arc
furnaces. |
| The importation of Russian steel billets injured the company. To maintain its
market share and sell its billets, SKK was forced to sell its steel billets at the same
price as imported Russian steel billets. This price was either just enough to cover cost
of production or even below. As a consequence, the company sustained losses of P25
million. |
Answers to Questionnaire
SKK failed to respond to the Commission’s questionnaire.
Its only submission was an affidavit attesting to its injury from dumping. Information SKK
submitted to BIS and forwarded to the Commission was limited.
Ocular Inspection
An ocular inspection was conducted on 7 October 1999. The main
findings were:
| The plant has two (2) electric arc furnaces with capacities of 20 tons per heat.
One furnace is not operating. |
| Scrap metal procured locally serves as raw material. |
| SKK’s billets are used in the production of structural (Grade 33), Grade 40
and Grade 60 rebars. The firm has been producing billets for ten (10) years. |
| Production operates on three (3) shifts daily and the total number of workers is
300. |
3.5.5 Amalgamated Iron Works, Inc.
Amalgamated’s main office is located at the 23rd
Floor, Galleria Corporate Center, EDSA corner Ortigas Avenue, Quezon City. Its billet shop
may be found at 297 Pablo dela Cruz St., San Bartolome, Novaliches, Quezon City.
| The importation of Russian billets injured the company since it was forced to
sell its billets at a price that was either barely enough to cover cost of production or
even below in order to maintain its market share and sales. |
| The company’s inability to raise prices and its having to match the price of
Russian steel billets caused losses of P528 thousand. |
Answers to Questionnaire
| Amalgamated did not respond to the Commission’s
questionnaire. However, it submitted an affidavit on its injury from dumping. Information
the company provided to BIS and later forwarded to the Commission was limited.
|
3.5.6 Other Domestic Manufacturers
As stated in the BIS preliminary report, Phoenix Iron and
Steel Corporation (PISCOR) provided information to the BIS that its operations have been
shut down since 1997. Moreover, ESCOR, also known as Osaka Steel Manufacturing, Inc.,
submitted information relevant to their importations and thus was treated by the
Commission as an importer of steel billets.
3.6 RUSSIAN MANUFACTURERS/EXPORTERS
3.6.1 Chelyabinsk Integrated Iron and Steel Works
Chelyabinsk Integrated Iron and Steel Works
(MECHEL) is a major producer of special and quality steel in Russia with total capacity of
five (5) million tons of rolled bars, forgings and flat products per year. Its production
range covers stainless, high speed, tool, spring, ball bearing, engineering, and free
cutting steels and super alloys.
Located in the city of Chelyabinsk with a population of over 1.3
million people, MECHEL is considered one of the city’s major employers. A total of
27,000 are employed with the company.
MECHEL did not respond to the Commission’s questionnaire.
However, the company, along with Glencore International (an identified exporter),
manifested through counsel that it would adopt as evidence the consolidated reply earlier
submitted by the Philippine Steel Rolling Mills Association (PSRMA) and Association of
Philippine Steel Mills, Inc. (APSMI) to the BIS. It submitted a principal memorandum
raising the following issues:
| Russian billets are superior in quality, i.e., less residual
elements, superior formability for hot and cold working, higher density, preferred
isotropic microstructure and internal soundness, due to the raw material and production
process used. The resulting rebars possess superior ductility, elongation and bending
properties. |
| NSC's billet chemistry is quite inflexible while the Russians
are willing to alter their chemistry given enough lead-time. |
|
| For NSC to produce other billet sizes would entail high
expenses which it cannot afford. |
| The different sizes imported from Russia are necessary because
of differing mill configurations and product requirements. Longer billets are preferred
because they allow users increased flexibility and productivity. |
|
On Dumping
| Russian export prices are within the range of world export
prices. |
|
| The export prices of billets from Turkey,
as surrogate country, cannot be used as alternative normal value. The use of the Analogue
Country Method is not sanctioned by either the WTO or R.A. 8752, and under R.A. 7843, it
is the normal value of the like articles in the proxy country, and not the export price,
which may be used as alternative normal value.
|
|
| The use of third country export prices
(from METAL BULLETIN) as alternative normal value gave negative dumping margins and
negligible volume of dumped imports.
|
|
| On Injury and Causal Linkage |
|
| There is no price undercutting since the landed cost of
billets is always higher than NSC’s selling prices. |
| Alleged price depression/suppression by NSC are really
adjustments to (a) unfavorable economic conditions which dampened steel demand and
depressed prices and (b) the reduction in landed cost of steel billets arising from the
decrease in the tariff to 5% in 1998. |
|
| NSC's relative share of the domestic market
is increasing from 1996 to 1998. Imports from other countries are also increasing while
those from Russia declined.
|
|
| The declining trend of NSC's inventory
proves that it has no difficulty selling same locally. This is consistent with experience
of re-rollers that NSC’s supply is inadequate, i.e., only around 15% of demand.
Billet producers themselves import indicating inadequate local supply.
|
|
| NSC's decline in output and capacity
utilization is attributable to its lack of raw materials. NSC could not purchase raw
materials continuously due to lack of working capital. Its impaired ability to raise
working capital arose from its financial difficulties (e.g., it was in default on its bank
loans). NSC's mismanagement of its finances/loan obligations is the principal cause of its
financial difficulties.
|
|
| A loss of P2.5 billion was incurred in 1996
due to revaluation of assets as required by incoming investor Hottick.
|
|
| Foreign exchange losses (P2.5 B in 1997)
contributed to the deterioration of NSC's financial position by increasing its peso
obligations and interest.
|
|
| The reduction of NSC personnel started as
early as 1993-94 when major projects did not materialize and later, as a requirement for
privatization. This caused it to incur high severance pay which affected its normal
profitability.
|
|
| NSC's cost of raw materials should not
increase since global scrap prices are on the decline.
|
|
| NSC cannot survive without adequate tariff
protection. It is non-competitive due to high production costs arising from lack of iron
ore and high electricity cost. In addition, NSC's low/obsolete technology caused it to
incur delays, expensive downtimes, reduced capacity utilization, non-competitive costs,
product defects, and low equipment productivity.
|
|
| NSC is an unreliable supplier in terms of
delivery, flexibility in meeting product specifications and assurance of quality which
drove the downstream industry to import.
|
|
| The Asian financial crisis caused a
realignment of currency values that made foreign steel more price-competitive and led to
rising imports. The continued devaluation of the Russian Ruble makes Russian steel exports
more competitive.
|
|
| All other alleged producers of steel
billets had profitable operations from 1996 to 1998 save NSC.
|
|
3.6.2 Other Exporters
The following exporters failed to
respond to the Commission’s questionnaire: AIOC Moscow; Amur Steel; Balkan Steel
Int’l Establishment; Balli Steel; BCD Supplies Ltd.; Beloretsky Met Zavod (Beloretsk
Iron and Steel Works); Borelia Ltd.; Cargill Enterprises Inc.; Crown Trade and Finance
Ltd.; Daewoo Handels GMH Corp.; Donald & Macarthy Pte. Ltd.; Glencore International
AG; Klockner Steel Trade GMBH; Lebgok AG; MacSteel Int’l, Ltd.; Magnitogorskiy
Metallurgischenkiy Kombinat (Magnitogorsk Iron & Steel); Maximet Co. Ltd.; MECHEL;
Metal Russia Corp., Ltd.; Mitsui & Co., Ltd. (HK); Moscow Met Zavod Serpi Molot; Noble
Resources Corp., Ltd.; Norex St. Petersburg; Omutninsk Metallurgical; OSKMET, Ltd.;
Oskolskiy Electromellurgichesky Kombinat; Pacific Atlantic Resources PTE, Ltd.; Preussag
Handel GMBH; Primary Industries (UK) Ltd.; Reeferway, Ltd.; Satra Metallurgical, Inc.;
Severstal; Sibelectrostal Metallurgical; Stenna Trading AB; Taco Metal Asia, Ltd.; Trade
Arbed PTE, Ltd.; Transmet SPB Ltd.; Trans-world Metals Ltd.; Truboimpex; Tse Yu Hong
Metals Ltd.; UMS United Metal Supply Ltd.; Ural Precision Alloy Works Joint Stock Co.;
UVISCO, Ltd.; VANOMET AG; Voest Alpine Intertrading AG; Volgograd Steel Works; Zap-Sib Met
Kombinat; and Zlatoustoviskiy Met Zavod.
3.7 IMPORTERS
3.7.1 Pag-Asa Steel Works, Inc.
Pag-Asa’s plant and main office may be found along Amang
Eulogio Rodriquez Avenue, Bo. Manggahan, Pasig City.
| Imported billets are superior to local billets (e.g., less residual elements,
stable level of residual elements) and billet quality impacts greatly on the quality of
the finished product (e.g., ductility). |
| Longer billets are preferred because there is less wastage. The standard length
of billets imported by Pag-Asa is nine (9) meters. Thus, the firm did not import longer
billets just to circumvent the provisional measure. |
Answers to Questionnaire
The firm failed to submit its response to the Commission’s
questionnaire. However, it responded to the questionnaire sent by BIS during the
preliminary investigation which was subsequently forwarded to the Commission.
Ocular Inspection
An ocular inspection conducted on 11 October 1999 yielded the
following information:
| The firm manufactures reinforcing steel bars and rods and has been operating for
35 years. It produces steel bars (Grades 33, 40 and 60) with sizes ranging from 8 mm to 50
mm and lengths of 5 meters to 12 meters. Mill certificates are sent out with each batch
delivered. |
| There are two (2) rolling mills – one is 35 years old and the other is 5
years old – with a total combined annual capacity of 300,000 metric tons. Due to
depressed demand, the mills are operated alternately. Employment has fallen from 300
workers to 208. |
| Billets measuring 1.8 meters are used since the firm’s furnace is two (2)
meters. The billets are cut to the required length. |
| Pag-Asa sources its billets from various countries – Japan, Malaysia,
Australia, South Africa, Ukraine, Russia and Romania. About 140,000 metric tons of billets
are imported monthly. |
3.7.2 Steel Asia Manufacturing Corporation
SAMC’s 16-hectare plant is located at Ciudad Industria,
Bahay Pari, Meycauayan, Bulacan. The company’s owners are the Yao family with 40% of
total shares, NatSteel Ltd. of Singapore with another 40%, and Harrisburg Resources with
the remaining 20%.
Major Positions/Issues
| Billets produced by NSC are comparable in terms of quality with Russian billets. |
| However, there are distinct advantages to using longer, i.e., 12 meter, billets.
These are: less billet gaps which reduce waste from head/tail crops; less tracking and
storage cost; less storage space; faster unloading; less damage to the heating furnace;
higher mill utilization; higher product yield/productivity. |
| Since 12 meter long billets are not produced locally, SAMC sources its billets
from Russia. |
Answers to Questionnaire
The firm failed to submit its response to the Commission’s
questionnaire. However, it had previously responded to the BIS questionnaire which was
forwarded to the Commission.
Ocular Inspection
An ocular inspection was conducted on 24 September 1999 during
which the following were ascertained:
| The plant started operation in October 1997. The company takes pride in being the
first and only ISO-9002 certified deformed steel bar producer in the country. |
| The company is engaged in the manufacture of reinforcing bars with diameters
ranging from 10 mm to 50 mm. Its mill has a rated capacity of 400,000 MT per year or 70 MT
per hour. |
| The mill is also capable of producing light sections (angle, flat and channel
bars) and rods. |
| SAMC’s mill furnace is designed for 12 meter long billets. |
| There are a total of 180 employees with 120 workers involved in production. |
| The firm claims to have a 25% share of the domestic market for rebars. |
3.7.3 Other Importers
Seventeen (17) importers did not submit their responses
to the Commission’s questionnaire but responded to the BIS questionnaires which were
forwarded to the Commission. These importers were: Biñan Steel Corporation; Builders
Steel Corporation; Capitol Steel Corporation; Dallas Steel Corporation; Filipino Metals
Corporation; First Tandem Steel Corporation; Galaxie Steel Corporation; Grand Asia Metal
Corporation; Interworld Steel Mills, Inc.; Kudos Metal Corporation; Legacy Steel
Corporation; Lunar Steel Corporation; Martian Steel Corporation; Maxima Steel Mills
Corporation; Osaka Steel Manufacturing, Inc.; Sonic Steel Industries, Inc.; and Venus
Steel Corporation.
No information was received from the following: Armstrong
Industries Corporation; Cadiz Steel Corporation; Cathay Metal Corporation; Cebu Steel
Corporation; Cebu Worldwide Hardware; Continental Steel Manufacturing Corporation; First
Metro Integrated Steel Corporation; Nippon East Knitting Corporation; Pacific Mills, Inc.;
Philippine Nail & Wire Corporation; Scope Industries, Inc.; and Universal Steel
Smelting Co., Inc.
A consolidated reply was submitted to the BIS by the industry
associations PSRMA and APSMI. This reply was forwarded to the Commission.
3.8 CONSIDERATION OF INFORMATION/EVIDENCE SUBMITTED
In its appreciation of the evidence submitted, the Commission exercised due
diligence in the determination of the existence of dumping, material injury, causal link,
and product comparability.
4. THE DOMESTIC INDUSTRY AND MARKET
4.1 LIKE PRODUCT
According to Article 2.6 of the Agreement, the term "like
product" shall be interpreted to mean:
"… a product which is identical, i.e. alike in all
respects, to the product under consideration, or in the absence of such a product, another
produunder consideration."
4.1.1 The Domestic Product
The domestic products are steel billets of cross-sectional
dimensions of 100 mm x 100 mm, with lengths of 3 meters to 6 meters, and conforming to
Philippine National Standards (PNS) 230, PNS 275 and PNS 415. These are suitable for the
production of reinforcing bars (rebars) of diameters 8 mm, 10 mm, 12 mm, 16 mm, 20 mm, 25
mm and 28 mm.
4.1.2 Factors Considered in Determining Like Product
- Chemical Composition/Mechanical Properties
Billets usually fall under particular steel grades such as the
established system of classification devised by the American Iron and Steel
Institute/Society of Automotive Engineers (AISI/SAE). Russian systems, on the other hand,
rely on the GOST scheme of classification.
The domestic industry produces commercial quality steel billets
that conform to the PNS based on American Society of Testing Materials (ASTM)
specifications. Thus, PNS 230 is equivalent to ASTM 33, PNS 275 is equivalent to ASTM 40,
and PNS 415 is equivalent to ASTM 60.
Based on submissions by three billet manufacturers, below are
the required percentage chemical composition of steel billets that will be used to
manufacture long steel products of Grade 230 (ASTM Grade 33), Grade 275 (ASTM Grade 40)
and Grade 415 (ASTM Grade 60) varieties:
Table 1-A. Required Percentage Chemical Composition
Elements |
Carbon |
Manganese |
Phosphorus |
Sulfur |
Silicon |
Specification |
(C) |
(Mn) |
(P) |
(S) |
(Si) |
Wire Rods
SAE 1010
SAE 1015 |
0.13 max
0.13-0.18 |
0.60
max
0.30-0.60 |
0.40
max
0.05 max* |
0.05 max
0.05 max* |
0.20 max
0.30 max |
PNS49 Gr 230
SAE 1020M A
SAE 1022M B |
0.17-0.22
0.25-0.30 |
0.30-0.60
0.50-0.80 |
0.05
max*
0.05 max* |
0.05 max*
0.05 max* |
0.10-0.35
0.10-0.35 |
PNS49 Gr 275
SAE 1030M A
SAE 1527M B |
0.25-0.30
0.27-0.32 |
0.70-1.00
0.90-1.20 |
0.05
max
0.05 max |
0.05 max
0.05 max |
0.10-0.35
0.10-0.35 |
PNS49 Gr 415
SAE 1536M NW
SAE 1527M W |
0.32-0.38
0.26-0.32 |
1.20-1.50
1.20-1.50 |
0.05
max
0.05 max |
0.05 max
0.05 max |
0.10-0.35
0.20-0.40 |
SAE 1015 – Chemistry range
applicable to rebars of sizes below 10 mm diameter, light shapes and sections.
PNS49 Gr 230/275 A - Chemistry range normally applicable to smaller diameter rebars.
PNS49 Gr 230/275 B - Chemistry range normally applicable to big diameter rebars.
PNS49 Gr 415 NW - Chemistry without vanadium for normal application.
PNS49 Gr 415 W - Chemistry with addition of vanadium alloy for high strength application. |
| |
Specific Applications |
Standard |
PNS |
ASTM |
1. |
Wire
rods |
- |
510 |
2. |
Structural
grade rebars |
49
Gr 230 |
A36 |
3. |
Grade
40 rebars |
49
Gr 275 |
A615
or Gr 40 |
4. |
Grade
60 rebars |
49
Gr 415* |
A615
or Gr 60 |
5. |
Grade
60 rebars |
49
Gr 415** |
A
706 |
Source:
NSC Technical Brochure
*
Non-weldable grade
**
Weldable grade (high tensile)
Table 1-B. Required Percentage Chemical Composition
| Element |
ASTM 33
(PNS 230) |
ASTM 40
(PNS 275) |
ASTM 60
(PNS 415) |
C |
0.17 - 0.22 |
0.28 - 0.32 |
0.28 - 0.32 |
Mn |
0.50 - 0.65 |
0.70 - 1.0 |
1.20 - 1.50 |
Si |
0.15 - 0.25 |
0.15 - 0.25 |
0.15 - 0.30 |
S |
0.05 max |
0.05 max |
0.05 max |
P |
0.05 max |
0.05 max |
0.05 max |
Cu |
0.20 max |
0.30 max |
0.30 max |
Cr |
0.30 max |
0.20 max |
0.20 max |
Ni |
0.20 max |
0.20 max |
0.20 max |
Sn |
0.05 max |
0.05 max |
0.05 max |
Source:
Milwaukee Industrial Corporation
Table 1-C. Required Percentage Chemical
Composition
Element |
PNS 230 |
PNS 275 |
PNS 415 |
ASTM 33A |
ASTM 33B |
ASTM 40A |
ASTM 40B |
ASTM 60A |
ASTM 60B |
C |
0.17 - 0.22 |
0.20 - 0.25 |
0.25 - 0.30 |
0.25 - 0.32 |
0.32 - 0.38 |
0.20 - 0.32 |
Mn |
0.30 - 0.60 |
0.50 - 0.80 |
0.70 - 1.00 |
0.90 - 1.20 |
1.20 - 1.50 |
1.20 - 1.50 |
P |
0.05 max |
0.05 max |
0.05 max |
0.05 max |
0.05 max |
0.05 max |
S |
0.05 max |
0.05 max |
0.05 max |
0.05 max |
0.05 max |
0.05 max |
Si |
0.10 - 0.75 |
0.10 - 0.35 |
0.10 - 0.35 |
0.10 - 0.35 |
0.10 - 0.35 |
0.20 - 0.40 |
Cu |
0.45 max |
0.45 max |
0.45 max |
0.45 max |
0.45 max |
0.40 max |
Ni |
0.40 max |
0.40 max |
0.40 max |
0.40 max |
0.40 max |
0.25 max |
Cr |
0.40 max |
0.40 max |
0.40 max |
0.40 max |
0.40 max |
0.25 max |
Sn |
0.07 max |
0.07 max |
0.07 max |
0.07 max |
0.07 max |
0.04 max |
Source:
SKK Steel Corporation
In the case of steel billets imported from
Russia, the chemical composition is in accordance with GOST 380-88/3SP/PS or 5SP/PS or
GOST 380-94/3SP/PS or 5SP/PS specifications as shown below:
Table 2. Specific Importations of Steel
Billets from Russia
| Name of Producer (Exporter)
- Glencore International |
| Goods
Description - Prime Steel Billets |
| Grade - 5SP/PS GOST 380 - 88
|
| Importer - Pag-Asa Steel
Works, Inc. |
Chemistry |
C |
Mn |
Si |
P |
S |
Cu |
Cr |
Ni |
0.28 |
0.50 |
0.05 |
0.04 |
0.05 |
0.30 |
0.25 |
0.25 |
0.37 |
0.80 |
0.03 |
max |
Max |
Max |
max |
max |
| |
| Name of Producer (Exporter)
- Kuznetsk Steel Works |
| Goods Description - Prime
Steel Billets |
| Grade - 5SP/PS GOST 380
– 88 |
| Importer - Steel Asia Mfg.
Corp. |
Chemistry |
C |
Mn |
Si |
P |
S |
Cu |
Cr |
Ni |
0.28 |
0.50 |
0.05 |
0.04 |
0.045 |
0.30 |
0.30 |
0.30 |
0.37 |
0.80 |
0.35 |
Max |
Max |
Max |
max |
max |
The hot-rolling of billets into rebars does
not change the chemical composition: the original chemistry remains essentially unchanged.
Rebar manufacturers use billet chemistries based on composition limits predefined by rebar
standards. Correct billet composition together with proper hot rolling determines final
rebar properties. If the billet chemistry is correct, then the required physical
properties of the bars will be attained.
With respect to billet "formability" (i.e., the
ability to be formed from a square cross-section into a circular or other cross-section),
this depends mainly on two factors: (a) billet chemistry (e.g., the higher the carbon
content of the billet, the harder it is) and (b) rolling temperature (e.g., a higher
temperature allows easier rolling). Formability is minimally dependent on the method of
production of the billet, whether by Electric Arc Furnace or Blast Furnace.
As previously discussed, there are requirements for billet
chemistry under the PNS and GOST. A comparison of these requirements shows that they are
comparable. Thus, locally produced billets have the same "formability"
characteristics for both hot and cold working as steel billets imported from Russia.
Based on a comparison of the chemical composition limits
required by the PNS and the counterpart Russian (GOST) standards, the Commission is
satisfied that domestic steel billets are comparable in terms of quality to imported
Russian billets.
b. Physical
Characteristics
Steel billets are typically 50mm x 50mm up to 150mm x 150mm in
cross-section and 6 meters, 9 meters and 12 meters in length.
The domestic steel billet industry produces 100mm x 100mm x 3
meter to 6 meter billets.
As shown in import entries, the billets imported from Russia
have the following dimensions: 60 mm x 60 mm by 4 meters to 6 meters; 80 mm x 80 mm by 9
meters to 11 meters; 100 mm x 100 mm x 6 meters to 11.8 meters; and 120 mm x 120 mm x 12
meters.
Uses
Locally-produced billets with 100 mm x 100 mm diameter and
lengths ranging from 3 meters to 6 meters are suitable for the production of Grade 230,
Grade 275, and Grade 415 rebars with 8 mm, 10 mm, 12 mm, 16 mm, 20 mm, 25 mm and 28 mm
diameters.
Russian billets with cross-sectional dimensions of 60 mm x 60 mm
up to 120 mm by 120 mm and lengths ranging from 4 meters to 12 meters are suitable for the
production of the same grades of rebars with the same diameters. In addition, larger
diameter rebars (i.e., 32 mm, 36 mm, 40 mm, and 50 mm) can also be produced from the
larger cross-sectional and longer Russian billets.
Importers of Russian billets are also users of locally produced
billets, whether of Grade 230, Grade 275 or Grade 415 varieties. This means that local
producers of steel bars interchangeably utilize Russian or locally produced billets.
Steel billets of Grade 415 variety, which are sometimes
loosely-termed as "high carbon" or "high quality" grade, have been
produced by local billet manufacturers and were purchased and satisfactorily used by local
re-rollers based on delivery receipts of local billet producers to local customers.
The Commission is satisfied with the interchangeability of usage
of the local product and the product under consideration.
Manufacturing Methods and Technology
Billets are produced either by rolling an ingot or bloom or
directly through continuous casting from scrap.
Locally produced steel billets are made from coke, iron or steel
scraps, hot briquetted iron (HBI) and direct reduced iron (DRI) using the Electric Arc
Furnace (EAF) process. HBI is made of relatively pure iron obtained from iron ore and is
added to scrap to modify steel billet chemistry.
Imported billets from Russia are made from virgin iron ore
through the Blast Furnace (BF) or Basic Oxygen Furnace (BOF) method. The BF or BOF methods
of manufacturing billets are more productive per heat than the EAF process.
The difference in production process and raw material used has
some impact on both billet chemistry and physical appearance. Continuously cast billets
from scrap inherently contain higher amounts of residual elements than billets rolled from
ingots or blooms. Physically, the former have sharp corners whereas the latter exhibit
clearly reduced corners with more defined corner radii.
As already discussed, requirements for billet chemistry are
provided by the PNS for domestic billets and the comparable GOST standard for Russian
billets. Thus, the Commission is satisfied that domestic steel billets are comparable to
Russian billets despite differences in raw material and production process.
Tariff Classification
The product under consideration and domestic steel billets fall
under the same HS Subheadings. Steel billets containing by weight 0.01% or more but less
than 0.25% of carbon are classified under HS Subheading 7207.11 90 while steel billets
containing by weight 0.25% or more of carbon are classified under HS Subheading 7207.20
90.
The tariffs on steel billets were at 10% from 1991 to 1997 and
5% from 1998 to 2000.
Table 3. Tariff Rates of Steel Billets
EO
470
(effectivity date:
24 August 1991) |
EO 264
(effectivity date:
28 August 1995) |
EO 465
(effectivity date:
22 January 1998) |
1991 |
1992 |
1993 |
1994 |
1995 |
1996 |
1997 |
1998 |
1999 |
2000 |
10% |
10% |
10% |
10% |
10% |
10% |
10% |
5% |
5% |
5% |
4.1.3 Conclusion
The Commission is satisfied that
domestically-produced steel billets of cross-sectional dimensions of 100 mm x 100 mm, with
lengths ranging from 3 meters to 6 meters, and conforming to PNS 230 (ASTM 33), PNS 275
(ASTM 40) and PNS 415 (ASTM 60) constitute like products to the imported product under
consideration, i.e., Russian steel billets with cross-sectional dimensions of 60 mm x 60
mm up to 120 mm x 120 mm, of lengths of 4 meters up to 12 meters, and conforming to 5SP/PS
GOST 380 or its equivalent in other national standards.
4.2 THE DOMESTIC INDUSTRY
Under Article 4.1 of the Agreement, domestic industry is defined
as:
"Domestic producers as a whole of the like product or
to those whose collective output of the products constitutes a major proportion of the
total domestic production of those products…"
Article 5.4 of the Agreement states that an investigation shall
not be initiated unless the application has been made by or on behalf of the domestic
industry:
"The application shall be considered to have been made
‘by or on behalf of the domestic industry’ if it is supported by those domestic
producers whose collective output constitutes more than 50 per cent of the total
production of the like product produced by that portion of the domestic industry
expressing either support for or opposition to the application. However, no investigation
shall be initiated when domestic producers expressly supporting the application account
for less than 25 per cent of total production of the like product produced by the domestic
industry."
There are five (5) domestic manufacturers of steel billets: NSC,
CAPASCO, Amalgamated, Milwaukee and SKK. As earlier stated, the dumping protest filed by
NSC was supported by the latter three (3) producers.
In its Initiation Report, the BIS noted that information
submitted on the domestic industry referred only to NSC’s billet operations. However,
since NSC accounted for 26% of total domestic production, even in the absence of
information on the operations of the other producers supporting the petition, the 25% WTO
requirement for industry support was deemed satisfied for the purpose of initiation.
In its preliminary determination, the BIS considered NSC as the
only company representing the domestic steel billets industry since NSC alone submitted
complete evidence relevant to their operations during the POI.
4.3 THE PHILIPPINE MARKET FOR STEEL BILLETS
The Philippine market for steel billets has been shrinking from
1996 to 1998. In 1996, almost 1.5 million metric tons were required. This fell by 9% in
1997 to 1.3 million metric tons. The following year, domestic consumption fell further to
less than a million metric tons representing a decline of 33%.
Table 4. The Philippine Market for Steel Billets
|
Year |
Market Share (%) |
Domestic
Industry |
Russia |
Other
Countries |
1996 |
20.34 |
55.85 |
23.81 |
1997 |
24.76 |
48.62 |
26.62 |
1998 |
23.96 |
44.54 |
31.50 |
Sources of basic data: NSC & NSO Foreign Trade Statistics
In 1996, NSC supplied 20% of the domestic requirement for
billets. Its share of the market rose to 25% in 1997 then fell to 24% in 1998. On the
other hand, the share of billets sourced from Russia has been falling, from 56% in 1996 to
45% two years hence.
Aside from Russia, billets are also sourced from such countries
as Malaysia, Japan, Indonesia, China and South Africa. These countries have been supplying
a growing portion of the market from 24% in 1996 to nearly 32% in 1998.
In 1998, a total of 31 importer-users were identified to have
sourced their steel billets from Russia.
5. DUMPING
Dumping occurs when any specific kind or class of foreign
article is imported or brought into the Philippines at a price less than the normal value.
5.1 EXPORT PRICE
The export price is the price paid or the selling price to an
importer in the Philippines of articles purchased at arm’s length transaction,
excluding any post exportation charges such as ocean freight and overseas insurance.
The Commission based its estimates of export prices on import
entries submitted by NSC and on file with the Commission. These were validated using the
Clean Report of Findings (CRFs) provided by the Societe Generale de Surveillance
(SGS).
The available information permitted adjustment for ocean freight
and overseas insurance only. Adjusted to FOB level, i.e., CIF value less freight and
insurance, export prices ranged from US$109.50/MT to US$204.50/MT.
Table 5. Export Prices by Exporter: 1998
| No. |
Exporter |
FOB
Export Price (US$/MT) |
| 1. |
Angku-Taichung (Taiwan) |
204.19 |
| 2. |
Asia Industrial Co., Ltd. |
165.00 |
| 3. |
Balkan Steel Int’l.
Establishment (Liechtenstein) |
164.50 |
| 4. |
Balli Steel (U.K.) |
168.50 –
170.50 |
| 5. |
BCD Supplies Ltd. (Russia) |
170.00 –
180.00 |
| 6. |
BCL Trading |
178.00 –
181.00 |
| 7. |
Borelia Ltd. (Liechtenstein) |
183.00 |
| 8. |
COMCE IMPLEX, Ltd. |
181.35 |
| 9. |
Crown Trade & Finance Ltd.
(Switzerland) |
168.43 –
193.93 |
| 10. |
Daewoo Handels GMH Corp. (Korea) |
174.00 –
179.50 |
| 11. |
Duferco, SA (Switzerland) |
128.00 –
177.00 |
| 12. |
Glencore International AG
(Switzerland) |
151.50 |
| 13. |
Klockner Steel Trade GMBH
(Germany) |
178.00 |
| 14. |
Lebgok AG (Switzerland) |
171.50 |
| 15. |
Leman Commodities S.A. |
109.50 –
121.50 |
| 16. |
MacSteel Int’l, Ltd. (U.K.) |
180.00 |
| 17. |
Metal Russia Corp., Ltd. |
186.93 –
193.93 |
| 18. |
Metal Traders Stahl Handel |
122.00 |
| 19. |
Mitsui & Co., Ltd. (Hong
Kong) |
138.72 –
172.65 |
| 20. |
Multi-Trade Enterprises AG |
129.00 |
| 21. |
Noble Resources Corp., Ltd. (Hong
Kong) |
165.50 –
176.25 |
| 22. |
OSKMET, Ltd. (U.K.) |
160.00 –
170.00 |
| 23. |
Pacific Atlantic Resources PTE,
Ltd. (Australia) |
120.00 –
184.14 |
| 24. |
Preussag Handel GMBH (Germany) |
170.00 –
180.00 |
| 25. |
Reeferway, Ltd. (British Virgin
Islands) |
175.75 |
| 26. |
Satra Metallurgical, Inc. (USA) |
202.03 –
202.10 |
| 27. |
SLAV-AG (Austria) |
130.33 |
| 28. |
Stenna Trading AB (Sweden) |
136.00 –
175.00 |
| 29. |
Taco Metal Asia, Ltd. |
155.93 –
194.00 |
| 30. |
Tenson Steel, Ltd. (Hong Kong) |
176.50 |
| 31. |
Trade Arbed PTE, Ltd. (Singapore) |
175.50 –
188.50 |
| 32. |
Tse Yu Hong Metals, Ltd. (Hong
Kong) |
170.47 –
177.46 |
| 33. |
UMS United Metal Supply, Ltd.
(Liechtenstein) |
163.00 |
| 34. |
UVISCO, Ltd. (U.K.) |
169.55 –
180.00 |
| 35. |
VANOMET AG (Switzerland) |
172.75 –
185.00 |
| 36. |
Voest Alpine Intertrading AG
(Austria) |
185.00 –
197.00 |
| 37. |
Zap-Sib Met Kombinat |
170.65 –
171.65 |
Source: 1998 Import Entries
5.2 NORMAL VALUE
Article 2.1 of the Agreement defines normal value as:
"… the comparable price, in the ordinary course of
trade, for the like product when destined for consumption in the exporting country."
The Agreement further states in Article 2.2 that:
"When there are no sales of the like product in the
ordinary course of trade in the domestic market of the exporting country or when, because
of the particular market situation or the low volume of sales in the domestic market of
the exporting country, such sales do not permit a proper comparison, the margin of dumping
shall be determined by comparison with a comparable price of the like product when
exported to an appropriate third country, provided that this price is representative, or
with the cost of production in the country of origin plus a reasonable amount for
administrative, selling and general costs and for profits.
The Commission has ruled that the Russian Federation is not
a state-controlled economy with respect to the iron and steel industry (Report of Findings
on Anti-Dumping Protest Against the Importation of Cold-Rolled Steel Coils and Sheets from
Russia dated 23 December 1999). Following this ruling, normal values for steel billets
should be based on selling prices and costs in the Russian domestic market.
The Commission was unable to determine the normal value of steel
billets based on domestic selling prices and/or cost of production in Russia due to the
unavailability of data. A certification from the Philippine Embassy in Russia submitted by
protestant reported that the bulk of steel billets produced by Russian steel mills is
utilized by their own or affiliated mills.
Using the best-information-available option, the Commission
based its estimates of normal values on FOB export prices of steel billets by Russia
(originating from different ports, i.e., Far East port, Black Sea/Baltic Sea port) as
published in 1998 issues of METAL BULLETIN. Shown below are the normal values that were
derived:
Table 6. Normal Values (FOB)
| Period of
Investigation: 1998 |
Black
Sea/Baltic Sea Ports
(US$/MT) |
Far East
Port
(US$/MT) |
January |
185.00 –
195.00 |
187.50 –
200.50 |
February |
177.50 –
185.00 |
180.00 –
187.50 |
March |
172.50 –
177.50 |
175.00 –
180.00 |
April |
172.50 |
175.00 |
May |
172.50 –
175.00 |
175.00 |
June |
175.00 |
175.00 |
July |
170.00 –
175.00 |
170.00 –
175.00 |
August |
165.00 –
170.00 |
165.00 –
170.00 |
September |
165.00 |
165.00 |
October |
142.50 –
157.50 |
147.50 –
157.50 |
November |
140.00 –
142.50 |
145.00 –
147.50 |
December |
140.00 |
145.00 –
146.50 |
Source: 1998 issues of METAL BULLETIN
5.3 DETERMINATION OF DUMPING
Article 2.4 of the Agreement sets the terms for comparing
the normal value and the export price:
"A fair comparison shall be made between the export
price and normal value. This comparison shall be made at the same level of trade, normally
at the ex-factory level, and in respect of sales made at as nearly as possible the same
time. Due allowance shall be made in each case, on its merits, for differences which
affect price comparability, including differences in conditions and terms of sales,
taxation, levels of trade, quantities, physical characteristics, and any other differences
which are also demonstrated to affect price comparability…"
Based on the estimated normal values derived from published
Russian export prices of steel billets, dumping margins ranging from US$25.64/MT to
US$0.19/MT or 22.72% to 0.11% of the export price were determined for nineteen (19)
exporters/traders. Negative dumping margins were calculated for the rest. (See Annex
"A" for the detailed computations.)
Table 7. Dumping Margins by Exporter
| No. |
Exporter |
US$/MT |
%
of
Export Price |
| 1. |
Leman Commodities S.A. |
25.64 |
22.72 |
| 2. |
Metal Traders Stahl Handel |
18.00 |
14.75 |
| 3. |
Multi-Trade Enterprises AG |
17.50 |
13.57 |
| 4. |
SLAV-AG (Austria) |
16.17 |
12.41 |
| 5. |
Asia Industrial Co., Ltd. |
10.00 |
6.06 |
| 6. |
Balkan Steel Int’l.
Establishment (Liechtenstein) |
8.00 |
4.86 |
| 7. |
Pacific Atlantic Resources PTE,
Ltd. (Australia) |
6.76 |
5.51 |
| 8. |
Balli Steel (U.K.) |
6.11 |
3.62 |
| 9. |
Mitsui & Co., Ltd. (Hong
Kong) |
4.85 |
3.16 |
| 10. |
Duferco, SA (Switzerland) |
4.63 |
3.59 |
| 11. |
Zap-Sib Met Kombinat |
3.74 |
2.19 |
| 12. |
Lebgok AG (Switzerland) |
3.07 |
1.79 |
| 13. |
UVISCO, Ltd. (U.K.) |
2.27 |
1.34 |
| 14. |
UMS United Metal Supply, Ltd.
(Liechtenstein) |
2.00 |
1.23 |
| 15. |
Stenna Trading AB (Sweden) |
1.82 |
1.34 |
| 16. |
Crown Trade & Finance Ltd.
(Switzerland) |
1.80 |
1.04 |
| 17. |
Tse Yu Hong Metals, Ltd. (Hong
Kong) |
1.71 |
1.01 |
| 18. |
VANOMET AG (Switzerland) |
0.56 |
0.32 |
| 19. |
Noble Resources Corp., Ltd. (Hong
Kong) |
0.19 |
0.11 |
| 20. |
Angku-Taichung (Taiwan) |
0.00 |
0.00 |
| 21. |
BCD Supplies Ltd. (Russia) |
0.00 |
0.00 |
| 22. |
BCL Trading |
0.00 |
0.00 |
| 23. |
Borelia Ltd. (Liechtenstein) |
0.00 |
0.00 |
| 24. |
COMCE IMPLEX, Ltd. |
0.00 |
0.00 |
| 25. |
Daewoo Handels GMH Corp. (Korea) |
0.00 |
0.00 |
| 26. |
Glencore International AG
(Switzerland) |
0.00 |
0.00 |
| 27. |
Klockner Steel Trade GMBH
(Germany) |
0.00 |
0.00 |
| 28. |
MacSteel Int’l, Ltd. (U.K.) |
0.00 |
0.00 |
| 29. |
Metal Russia Corp., Ltd. |
0.00 |
0.00 |
| 30. |
OSKMET, Ltd. (U.K.) |
0.00 |
0.00 |
| 31. |
Preussag Handel GMBH (Germany) |
0.00 |
0.00 |
| 32. |
Reeferway, Ltd. (British Virgin
Islands) |
0.00 |
0.00 |
| 33. |
Satra Metallurgical, Inc. (USA) |
0.00 |
0.00 |
| 34. |
Taco Metal Asia, Ltd. |
0.00 |
0.00 |
| 35. |
Tenson Steel, Ltd. (Hong Kong) |
0.00 |
0.00 |
| 36. |
Trade Arbed PTE, Ltd. (Singapore) |
0.00 |
0.00 |
| 37. |
Voest Alpine Intertrading AG
(Austria) |
0.00 |
0.00 |
5.4 DE MINIMIS MARGIN OF DUMPING
As stated in Article 5.8 of the Agreement:
"There shall be immediate termination if the margin of
dumping is de minimis. The margin of dumping shall be considered de minimis if the margin
is less than 2 percent, expressed as a percentage of the export price."
Of the thirty-seven (37) identified exporters of steel billets
from Russia during the POI, eleven (11) have dumping margins that are not de minimis. Their
margins range from 2.19% to 22.72% of the export price.
6. THE ECONOMIC CONDITION OF THE DOMESTIC INDUSTRY
6.1 DETERMINATION OF INJURY
In Article 3 of the Agreement, the injury factors that must be
evaluated by the investigating authority are set out:
| the volume of dumped imports; |
| the effect of the dumped imports on prices in the domestic market for the like
product; and |
| the consequent impact of the dumped imports on domestic producers of the like
product. |
For purposes of its material injury and causality determination,
the Commission considered only the submission of NSC as the domestic industry. While SKK,
Milwaukee and Amalgamated expressed their support to the anti-dumping protest filed by
NSC, they failed to comply with the documentary and/or evidentiary and other requirements
necessary for the determination of dumping, material injury and causality. Thus,
information on the domestic industry presented in the succeeding discussion refers only to
NSC’s operation.
6.1.1 Volume of Dumped Imports
The Negligibility Threshold
Article 5.8 of the Agreement provides for the immediate
termination of dumping cases when the volume of dumped imports is found to be negligible:
"There shall be immediate termination in cases where the
authorities determine that … the volume of dumped imports, actual or potential…
is negligible…The volume of dumped imports shall normally be regarded as negligible
if the volume of dumped imports from a particular country is found to account for less
than 3 percent of imports of like product in the importing Member, unless countries which
individually account for less than 3 percent of the imports of like product in the
importing Member collectively account for more than 7 percent of imports of like product
in the importing Member."
Imports of steel billets from Russia in 1998 totaled 396,000
MT. Of this volume, 151,000 MT (or 38%) were imported at dumped prices.
Table 8. Volume of Dumped Imports
| Year: 1998 |
Imports from Russia
(‘000 MT) |
Imports from Other Countries
(‘000 MT) |
Total Philippine Imports
(‘000 MT)2/ |
Share of Dumped Imports to Total Philippine Imports (%) |
|
Dumped1/ |
Undumped |
Total |
Q1 |
30 |
15 |
45 |
101 |
146 |
20.55 |
Q2 |
48 |
132 |
180 |
48 |
228 |
21.05 |
Q3 |
42 |
88 |
130 |
91 |
221 |
19.00 |
Q4 |
31 |
10 |
41 |
40 |
81 |
38.27 |
Total |
151 |
245 |
396 |
280 |
676 |
22.34 |
Sources: :1/ 1998 Import Entries
2/ NSO Foreign Trade Statistics
The volume of dumped imports accounted for 22% of
total Philippine imports of steel billets of 676,000 MT. Since this share is above 3%,
same is not negligible.
Volume Effects
Article 3.2 of the Agreement specifically provides that:
"With regard to the volume of dumped imports, the
investigating authorities shall consider whether there has been a significant increase in
dumped imports, either in absolute terms or relative to production or consumption in the
importing Member."
Consumption of steel billets increased in the 2nd
quarter then fell in the 3rd and 4th quarters. Quarterly sales of
NSC as well as the quarterly volume of dumped imports followed the same pattern.
Table 9. Volume of Dumped Imports Vis-à-vis
Domestic Consumption and Production
| Year:
1998 |
Percentage Share of Dumped Imports to |
Domestic
Consumption |
Domestic
Production |
Q1 |
16.48 |
44.78 |
Q2 |
15.53 |
92.31 |
Q3 |
14.63 |
60.00 |
Q4 |
27.93 |
172.22 |
Total |
16.98 |
72.95 |
Sources of basic data: NSC; NSO Foreign Trade
Statistics; 1998 Import Entries
Relative to production, dumped imports
represented around 73% of NSC’s 1998 production level. However, NSC suspended
operations during two periods in 1998: from 22 April to 5 May and from 24 October to 31
December. During the 1st and 3rd quarters when production was
normal, quarterly dumped imports represented 45% and 60% of NSC’s quarterly
production levels.
With respect to domestic consumption, dumped imports accounted
for 17% of total consumption in 1998. Accounting for 15% to 16% of the market in the first
three quarters, the market share of dumped imports rose to 28% in the final quarter.
6.1.2 Price Effects
Article 3.2 of the Agreement states:
"With regard to the effect of the dumped imports on
prices, the investigating authorities shall consider whether there has been a significant
price undercutting by the dumped imports as compared with the price of a like product of
the importing Member, or whether the effect of such imports is otherwise to depress prices
to a significant degree or prevent price increases, which otherwise would have occurred,
to a significant degree."
Price undercutting occurs when the prices of dumped imports are
significantly lower than the prices of the like domestic product.
The incidence of price undercutting was determined by comparing
the average landed cost of dumped steel billets from Russia against the average ex-factory
domestic selling price of local billets. The figures show that undercutting occurred in
the 2nd and 4th quarters despite consistently falling ex-factory
selling prices. The average landed cost of dumped steel billets was 2.45% lower in the 2nd
quarter and 11.31% lower in the final quarter. The magnitude of undercutting in the 4th
quarter was influenced by the devaluation of the Russian Ruble by 114% in September 1998.
Price depression occurs when the prices of dumped imports force
down the prices of the like product.
NSC’s average domestic selling prices of steel billets
steadily declined in the 1st quarter to the last quarter despite relatively
stable production costs in the first three quarters. Price depression was particularly
evident in the 2nd quarter when NSC’s price dropped by 8% although
production cost decreased by merely 3%. The reduction in selling prices led to a lower
profit margin in the 2nd quarter and a loss in the 3rd quarter.
Price suppression occurs when the prices of dumped imports
prevent increases in the prices of the like product which would otherwise have occurred.
The incidence of price suppression occurred in the 3rd
and 4th quarters when NSC’s selling prices declined despite increasing
cost to produce and sell. During these quarters, selling prices fell below cost and NSC
incurred growing losses. Suppression was pronounced in the 4th quarter when
NSC’s price fell by 7% despite an 11% increase in production cost.
The incidence of price depression and suppression cannot be
attributed entirely to the dumping of Russian billets. Average peso landed costs of
billets imported from countries other than Russia were declining during the POI and were
lower than the average landed cost of undumped billets from Russia. However, Russia
remained the price leader: it accounted for 58% of total imports while the various
countries individually accounted for only 6% or less of total Philippine imports of
billets.
6.1.3 Injury Factors
Market Share
NSC’s share of the domestic market for steel billets was
20% in 1996. This increased to 25% in 1997 then declined to 24% in 1998. That its market
share was reduced only slightly was made possible through the pricing strategy (i.e.,
price depression and suppression) NSC undertook.
Table 10. Market Shares
| Year |
Market
Share (%) |
Domestic
Industry |
Dumped
Imports |
Non-Dumped
& Other Countries |
1996 |
20.34 |
--- |
79.66 |
1997 |
24.76 |
--- |
75.24 |
1998 |
|
|
|
Q1 |
19.78 |
16.48 |
63.74 |
Q2 |
26.21 |
15.53 |
58.25 |
Q3 |
23.00 |
14.63 |
62.37 |
Q4 |
27.03 |
27.93 |
45.04 |
Total |
23.96 |
16.98 |
59.06 |
Sources of basic data: NSC; NSO Foreign Trade
Statistics; 1998 Import Entries
In the 1st quarter of dumping, dumped imports
captured 16% of the market and eroded the shares of both NSC and non-dumped imports. From
an annual market share of 25% in 1997, NSC’s share of the market during the quarter
shrank by 20% to 20%. The share of non-dumped imports decreased by 15%.
The following quarter, NSC captured the increase in consumption
thus recovering its market share, mainly at the expense of non-dumped imports. NSC’s
depressed price during the quarter minimally affected the share of dumped imports which
remained at 16%.
In the 3rd quarter, the market contracted by 7% and
the shares of NSC and dumped imports fell by 12% and 6%, respectively. In the final
quarter, there was further contraction of the market. Although the market shares of both
NSC and dumped imports increased, the rise in the latter by 90% was much higher and
allowed it to capture a larger slice of the market vis-à-vis NSC. Price suppression by
NSC during this quarter showed its impact on non-dumped imports whose market share fell to
45%.
Overall, NSC was able to defend its share against non-dumped
imports by trying to remain price-competitive (price depression and suppression) but was
unsuccessful against dumped imports.
Sales
In 1997, sales of NSC rose by 11% despite a 9% contraction
of the market. Revenue from sales correspondingly increased.
Table 11. Trends in Sales of Steel Billets
Year |
% Change In
Sales Volume |
% Change in
Sales Revenue |
1996 |
--- |
--- |
1997 |
11.04 |
12.68 |
1998 |
(35.84) |
(29.58) |
Source of basic data: NSC
In 1998 when dumping occurred, sales of NSC mirrored the
decrease in consumption. Moreover, the 36% reduction in its sales was greater than the 34%
decline in the total consumption of steel billets.
The entry of dumped imports in the 1st quarter
reduced NSC’s sales by more than half relative to average quarterly sales in 1997. In
the 3rd and 4th quarters, sales of NSC and dumped imports both fell
consistent with the reduction in quarterly consumption levels. However, the quarterly
decreases in NSC’s sales were invariably greater than the contraction of dumped
imports despite the company’s suppressed prices. This indicates that NSC’s
prices remained uncompetitive vis-à-vis dumped imports leading to a significant
restrictive effect on the company’s sales.
Production, Capacity Utilization and Inventory
NSC’s production load declined by 2.35% from 1996 to
1997 and by 28.87% from 1997 to 1998 parallel to the contraction of the market for steel
billets. In 1997, operations shut down ten (10) days earlier in December due to high
inventory. In 1998, the billet shop shut down for a total of 84 days for inventory control
purposes (April 22 to May 5) and power allocation purposes (October 24 to December 31).
Table 12. Trends in Production, Capacity Utilization and
Inventory
| |
%
Change In |
Year |
Production
Volume |
Capacity
Utilization |
Actual
Ending Inventory |
1996 |
--- |
--- |
--- |
1997 |
(2.35) |
(2.02) |
(82.50) |
1998 |
(28.87) |
(28.86) |
(71.43) |
Source of basic data: NSC
Declining production volumes led to corresponding reductions in both
inventory and capacity utilization levels.
It is noted that NSC had the capacity to supply more than
three-fifths of the volume of dumped imports (151,000 MT) in 1998.
Cost of Production
NSC uses both local (own mill-generated and from other domestic
sources) and imported scrap (shredded). In 1996 and 1997, imported scrap provided 38% of
NSC’s scrap requirements. In 1998, the share of imported scrap fell slightly to 33%.
Shredded scrap commands a higher price than ordinary imported scrap.
The cost of producing a metric ton of steel billets in 1998 was
15.47% higher than the 1997 level. This increase is partly attributable to the rise in the
price of its direct material (scrap) and other conversion costs (i.e., fixed and transfer
cost) which constituted 60% and 13% of total production cost, respectively.
Table 13. Breakdown of Production Cost
| Factors of |
Percentage Share to Total |
Production |
1997 |
1998 |
| Direct Materials |
59.10 |
59.15 |
| Conversion Cost: Direct
Labor
Factory Overhead:
Variable
Fixed
Transfer Cost
Other (semi-variable) |
1.87
30.65
0.98
4.99
2.40 |
1.91
26.30
1.67
8.22
2.75 |
| Total |
100.00 |
100.00 |
Source of basic data: NSC
Despite the huge increase in production cost, NSC did not adjust
its selling prices upward. On the contrary, its prices were suppressed to defend its sales
and market share from dumped and non-dumped imports.
Profitability
NSC suffered a loss from its billet operation
in 1996 but recovered in 1997. Return on sales based on EBIT was negative 5% in 1996 and
3% in 1997.
In 1998, NSC suffered another loss. Return on sales was negative
20%. This loss is attributable to the increase in production cost (described above)
combined with depressed prices and reduced sales. Since the dumping of Russian billets had
a negative impact on sales and significantly influenced NSC’s pricing, it was an
important contributory factor to the net loss sustained by NSC in 1998.
Cash Flow
The drop in sales revenue in 1998 by 30% contributed
markedly to NSC’s liquidity problem. The revenue lost could have been used to fund
working capital requirements (e.g., purchase of steel scrap for its billet production).
Since dumping had a significant dampening effect on NSC’s sales, it aggravated the
company’s cash flow problems.
Investment and Ability to Raise Capital
NSC’s inability to generate investment and raise
capital is traceable to its internal problems which include enormous debt, high interest
cost, foreign exchange losses, high cost of scrap, high operating costs, and a shortage of
working capital.
On 31 July 1998, NSC entered into a debt re-structuring
agreement with its creditor banks. The company could not service its loans because it had
been suffering huge losses which aggregated to around P15 billion by year-end 1998.
Employment and Wages
The total workforce in billet operations was 158 as of
November 1998 as against 190 in 1997. The retrenchment of thirty-two (32) employees was
caused by the reduction in production and sales on which dumping had material influence.
6.1.4 Factors Other than Dumping
The Commission evaluated factors other than dumping which
could have caused injury to the domestic industry.
Competition from Normal (Undumped) Imports
Normal or undumped imports of steel billets provided stiff
competition to the domestic industry. Imports of billets from countries other than Russia
gained an increasing share of the market from 24% in 1996 to 32% in 1998 (Table 4).
Individually, however, these countries accounted for 6% or less of total imports of
billets in 1998. Imports from Russia continued to dominate the market, accounting for 45%.
Less dumped imports, Russia’s market share in 1998 was 28%.
The intensity of competition with imports was heightened by the
decrease in the tariff rate on steel billets from 10% in 1997 to 5% in 1998. This was
further aggravated by the realignment of currency values in the aftermath of the 1997
Asian financial crisis. The Russian Ruble fell from US$1 = 6.00 RR (January 1998) to US$1
= 19.94 RR (December 1998). The Philippine peso did not depreciate as much, i.e. from $1 =
P29.47 in 1997 to $1 = P41.04 in 1998.
In 1998, undumped imports of steel billets coming from Russia
enjoyed a price advantage over NSC’s billets. Billets from other countries, except
Malaysia, were priced even lower.
Market Contraction
Unfavorable economic conditions ensuing from the Asian
financial crisis that broke in 1997 dampened demand and depressed prices.
As previously discussed, the Philippine market for steel billets
contracted by 9% and 34% in 1997 and 1998, respectively.
High Cost to Produce
Producers in Russia enjoy a competitive advantage in
steelmaking due to the availability of the required natural resources (e.g., iron ore,
fossil fuels). They also benefit from economies of scale.
In contrast, NSC was burdened by the lack of iron ore; expensive
imported scrap; low-yield local scrap; high cost of electricity; and low level of
technology.
Financial Performance
The Asian financial crisis that struck in mid-1997 led to a
general economic slowdown characterized by a devaluation of the peso, high interest rates,
tight financial credit and a decline in construction activities. These less-than-desirable
conditions led to the contraction of the domestic steel market and affected NSC in terms
of foreign currency losses, higher financing costs, and reduced production and sales.
In 1996, NSC recorded a loss from operation amounting to P2.032
billion owing mainly to the revaluation of assets as required by incoming investor
Hottick. In 1997, EBIT amounting to P0.780 billion was realized
The following year saw another loss, with corresponding negative
returns on sales, assets and stockholders’ equity. This was due mainly to the 29%
reduction in net sales from 1997 to 1998.
The huge interest expenses charged to operations were also
contributory to the company’s losses. Total interest cost (including those
capitalized to property, plant and equipment) was at the billion-peso level from 1996 to
1998.
The relative share of billet operations to NSC’s overall
operations was 21% in 1998.
Foreign Currency Losses
The higher peso requirement for servicing NSC’s
dollar-denominated loans due to the sharp devaluation of the peso adversely affected the
company’s financial position.
In 1997, NSC incurred total foreign currency losses of about
P2.5 billion. Of this amount, some P1.2 billion were capitalized and included as part of
construction costs of the company’s plant facilities and installation of machinery
and equipment and about P861 million were charged to the deficit account.
In 1998, a total of 154.9 million in foreign currency losses was
again capitalized and included as part of construction costs of the company’s plant
facilities and installation of machinery and equipment.
7. FINAL DETERMINATION
7.1 REPUBLIC ACT 8752 (ANTI-DUMPING ACT OF 1999)
R.A. 8752 which amends Section 301 of the TCCP was signed by the
President on 12 August 1999. It became effective on 4 September 1999 fifteen (15) days
after its publication on 19 August 1999 in Malaya and Philippine Standard.
7.2 APPLICATION OF PROCEDURAL MATTERS UNDER R.A. 8752
Procedural provisions of R.A. 8752 are applicable to the instant
anti-dumping case. In Republic vs. Court of Appeals, G.R. No. 92326, 24 January 1992, the
Court held:
"Procedural matters are governed by the law in force
when they arise, and procedural statutes are generally retroactive in that they apply to
pending proceedings and are not confined to those begun after their enactment although,
with respect to such pending proceedings, they affect only procedural steps taken after
their enactment." (205 SCRA 356)
7.3 CONCLUSION
The Commission finds that:
- price differences exist between the normal values and export prices of steel
billets from Russia;
- dumping per se of steel billets originating in or exported from Russia during the
POI (22% of total Philippine imports) caused material injury to NSC as reflected in the
actual decline in sales, market share, profits and employment; and
- factors other than dumping, i.e., competition from undumped imports, market
contraction, high cost of production, foreign exchange losses and high interest cost on
loan obligations, also injured NSC and, combined with dumping, led to a significant
overall impairment of its position.
In view of the foregoing, the elements constituting dumping
having been established, it is hereby ordered that anti-dumping duties be imposed on steel
billets originating from Russia with carbon content of 0.13% to 0.38% and used for the
production of 8 mm, 10 mm, 12 mm, 16 mm, 20 mm, 25 mm and 28 mm rebars of Grade 230, Grade
275 and Grade 415 varieties. The corresponding anti-dumping duty shall be imposed on the
following exporters:
| No. |
Exporter |
US$/MT |
%
of
Export Price |
| 1.* |
Leman Commodities S.A.* |
25.64 |
22.72 |
| 2. |
Metal Traders Stahl Handel |
18.00 |
14.75 |
| 3. |
Multi-Trade Enterprises AG |
17.50 |
13.57 |
| 4. |
SLAV-AG (Austria) |
16.17 |
12.41 |
| 5. |
Asia Industrial Co., Ltd. |
10.00 |
6.06 |
| 6. |
Balkan Steel Int’l.
Establishment (Liechtenstein) |
8.00 |
4.86 |
| 7. |
Pacific Atlantic Resources PTE,
Ltd. (Australia) |
6.76 |
5.51 |
| 8. |
Balli Steel (U.K.) |
6.11 |
3.62 |
| 9. |
Mitsui & Co., Ltd. (Hong
Kong) |
4.85 |
3.16 |
| 10. |
Duferco, SA (Switzerland) |
4.63 |
3.59 |
| 11. |
Zap-Sib Met Kombinat |
3.74 |
2.19 |
| 12. |
Lebgok AG (Switzerland) |
0.00 |
0.00 |
| 13. |
UVISCO, Ltd. (U.K.) |
0.00 |
0.00 |
| 14. |
UMS United Metal Supply, Ltd.
(Liechtenstein) |
0.00 |
0.00 |
| 15. |
Stenna Trading AB (Sweden) |
0.00 |
0.00 |
| 16. |
Crown Trade & Finance Ltd.
(Switzerland) |
0.00 |
0.00 |
| 17. |
Tse Yu Hong Metals, Ltd. (Hong
Kong) |
0.00 |
0.00 |
| 18. |
VANOMET AG (Switzerland) |
0.00 |
0.00 |
| 19. |
Noble Resources Corp., Ltd. (Hong
Kong) |
0.00 |
0.00 |
| 20. |
Angku-Taichung (Taiwan) |
0.00 |
0.00 |
| 21. |
BCD Supplies Ltd. (Russia) |
0.00 |
0.00 |
| 22. |
BCL Trading |
0.00 |
0.00 |
| 23. |
Borelia Ltd. (Liechtenstein) |
0.00 |
0.00 |
| 24. |
COMCE IMPLEX, Ltd. |
0.00 |
0.00 |
| 25. |
Daewoo Handels GMH Corp. (Korea) |
0.00 |
0.00 |
| 26. |
Glencore International AG
(Switzerland) |
0.00 |
0.00 |
| 27. |
Klockner Steel Trade GMBH
(Germany) |
0.00 |
0.00 |
| 28. |
MacSteel Int’l, Ltd. (U.K.) |
0.00 |
0.00 |
| 29. |
Metal Russia Corp., Ltd. |
0.00 |
0.00 |
| 30. |
OSKMET, Ltd. (U.K.) |
0.00 |
0.00 |
| 31. |
Preussag Handel GMBH (Germany) |
0.00 |
0.00 |
| 32. |
Reeferway, Ltd. (British Virgin
Islands) |
0.00 |
0.00 |
| 33. |
Satra Metallurgical, Inc. (USA) |
0.00 |
0.00 |
| 34. |
Taco Metal Asia, Ltd. |
0.00 |
0.00 |
| 35. |
Tenson Steel, Ltd. (Hong Kong) |
0.00 |
0.00 |
| 36. |
Trade Arbed PTE, Ltd. (Singapore) |
0.00 |
0.00 |
| 37. |
Voest Alpine Intertrading AG
(Austria) |
0.00 |
0.00 |
With regard to those exporters or producers in the exporting country in question
who have not exported the product to the Philippines during the POI, their individual
margins of dumping shall be determined following a review to be initiated by the
Commission and carried out on an accelerated basis, provided that said producers or
exporters can show that they are not related to any of the exporters or producers in the
exporting country who are subject to the anti-dumping duties on the product. No
anti-dumping duties shall be levied on imports from such producers or exporters while the
review is being carried out.
7.4 SUSPENSION OF IMPOSITION OF ANTI-DUMPING DUTY
Article 9.1 of the Agreement provides:
"The decision whether or not to impose an anti-dumping
duty in cases where all requirements for the imposition have been fulfilled, and the
decision whether the amount of the anti-dumping duty to be imposed shall be the full
margin of dumping or less, are decisions to be made by the authorities of the importing
Member. It is desirable that the imposition be permissive in the territory of all Members,
and that the duty be less than the margin if such lesser duty would be adequate to remove
the injury to the domestic industry."
Following an ocular inspection conducted on 8 November 1999
revealing the non-operation of NSC, the Commission orders the suspension of the imposition
of the prescribed definitive anti-dumping duties until such time that NSC can show proof
that its Billets Division is already on a normal operation status. With respect to the
four (4) other producers of steel billets, the elements of material injury and causality
were not established.
7.5 REVIEW OF THE ANTI-DUMPING DUTY
Paragraph (O) of Section 301 of the TCCP, as amended by R.A.
8752, states that:
"However, the need for the continued imposition of the
anti-dumping duty may be reviewed by the Commission when warranted motu propio, or upon
the direction of the Secretary, taking into consideration the need to protect the domestic
industry against dumping."
"If the Commission determines that the anti-dumping duty is
no longer necessary or warranted, the Secretary shall, upon its recommendation, issue a
Department Order immediately terminating the imposition of anti-dumping duty."
7.6 ISSUANCE OF DEPARTMENT ORDER
Paragraph (I) of Section 301 of the TCCP, as amended by R.A.
8752, provides that:
"The Secretary shall, within ten (10) days from receipt
of the affirmative final determination by the Commission, issue a Department Order
imposing an anti-dumping duty on the imported product, commodity, or article, unless he
has earlier accepted a price undertaking from the exporter or foreign producer. He shall
furnish the Secretary of Finance with the copy of the Order and request the latter to
direct the Commissioner of Customs to collect within three (3) days from receipt thereof
the definitive anti-dumping duty."
Let copies of the decision be furnished the Protestant, the
Protestees and the Embassy of Russia. The Secretary of the Department of Trade and
Industry shall, within ten (10) days from receipt of this decision, issue a Department
Order for the imposition of definitive anti-dumping duty on the aforementioned product and
the suspension thereof until such time that NSC can show proof that its Billets Division
is already on a normal operations status.
Let copies of the dispositive portion of the decision be
published immediately in two (2) newspapers of general circulation.
SO ORDERED.
28 August 2000
EMMANUEL T. VELASCO, Ph.D.
Chairman
ANTHONY R.A. ABAD
EDGARDO B. ABON
Commissioner
Commissioner
* In a Resolution dated 30 April 2001, the
Secretary of the Department of Trade and Industry (DTI) ordered the
exclusion of Leman Commodities SA from the list of identified exporters of
dumped billets from Russia based on the Commission's evaluation of documents
after representation from said exporter that billets exported by Leman was
sourced from Ukraine.
[ Home ] [ Up ] [ Anti-Dumping Investigation ] [ CRC and Sheets ] [ Billet ] [ HRC ] [ PP ] [ Flowchart ] [ IRR ] [ Tinplates ] [ crc-malaysia ] [ Float glass-Final ] [ CRC-Malaysia-final ] [ AD00-02 ]
|
