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considered that there is no justification for the abnormally low prices of steel wire rod, which do not
substantially reflect market values. This conclusion applies equally to the sector as a whole as well as
individually to all of the investigated sampled companies”.
Choice of comparative country
Since China is not recognised as a market economy EU regulations require that export prices are compared with
a ‘normal value’, derived from domestic sales prices in an ‘analogue’ market economy, in order to determine the
level of dumping. This is a critical aspect of the calculation leading to the proposed anti-dumping duty levels.
The complainants proposed India, a choice against which there was robust objection from European distributor
associations. In recognition of these concerns the Commission affirms that it “actively sought the cooperation from
known producers of fasteners worldwide, including in Taiwan”. However, it says, none were prepared to do so.
Only two Indian companies volunteered to cooperate, and only one provided sufficient information to be used
for the calculations. Reliance on data from a single Indian company has generated considerable criticism of the
anti-dumping procedure, understood to also have been voiced strongly when trade ministry officials met to vote
on the Commission’s proposal.
Standing of complainants
Last year there was considerable speculation that the output of the complainants might not total the 25% of
community production required by the anti-dumping regulation, something that could have resulted in the
termination of the investigation. The Commission is explicit that the “production of Community producers that
supported the complaint and fully cooperated in the investigation represents 27% of the production of the
product concerned in the Community.”
The document also confirms that some EU manufacturers imported fasteners from China. The Commission
found these were ‘significantly lower levels’ than alleged and determined that “the centre of interest of these
companies was undoubtedly in the Community, and that despite their imports from the PRC they should all be
considered as part of the Community production.”
Market share and injury
Concluding its report on injury, the document affirms: “Between 2003 and the IP (the Investigation Period
01.10.2006-30.09.2007) the volume of dumped imports from the PRC increased by almost 180% reaching a 26%
market share.” It continues, “The sales prices of the Community industry were substantially undercut by those of
the dumped imports of the product concerned. On a weighted average price undercutting was over 40%.”
The document concludes that Community producers lost over 6.8 percentage points of market share in the
period from 2004 to end September 2007 and that this coincided with a “significant increase in the volume of
dumped imports.” It also notes that PRC prices remained “relatively stable and low” whereas Community producer
prices followed the upward trend of raw material costs. EU producers were constrained from passing on price
increases by the levels of dumped product. The net effect, the Commission says was “a lack of sufficient levels of
profitability, and low return on investment and cash flow”.
In response to claims that insufficient EU capacity exists to take up demand following the application of duties,
the Commission says, “Community producers are currently using about one-half of their production capacity,
and are technically capable of producing all kinds of fasteners if justified by market conditions.” For the
distribution associations this assertion remains highly contentious, even in today’s depressed market.
The Commission also appears to have taken into account the potential for future serious injury, were
anti-dumping measures not to be applied. It notes: “The Community industry has already lost most of its mar-
ket share to imports in some market segments, but it could also lose the market in its current strong products, if
the present trends continue.”
Effect on different market segments
The potential for future injury is reiterated, when the document addresses the interest of the community
industry and also states “The imposition of measures is expected to prevent further distortions and restore fair
competition on the market.” Improvement in the financial situation of the Community industry is expected “to
allow it to continue investments in technology and modernise its production facilities, thus guaranteeing the
Community industry’s survival.”
The Commission argues that importers buy only a proportion of their fasteners from China, sourcing also from
the Community industry and producers elsewhere in the world. It says, “Therefore, eventual measures which
would only be applied to a limited portion of the product range would have an even more limited impact since
the provision of logistic services is generating new costs and revenues. Hence, should measures be imposed,
Community importers could still offer the same level of services to their customers given the significant and
diversified production capacities available in the Community with no significant impact on the Community
importers' profitability.”
In relation to the interests of users and consumers the Commission argues that “in most of the cases,
fasteners only constitute a small part of the total production cost and the anti-dumping duties would not have a
major impact on the costs and the competitive situation of those industries”.
Commenting on “competition and trade distorting effects” the Commission believes that “competition will
most likely remain strong after the imposition of anti-dumping measures” and it considers that “exporting
producers in the PRC will be able to continue to sell the product concerned, albeit at non-injurious prices, as
they have a strong market position in the Community.”
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