anti-dumping commission report no. 445 351 450/epr 445 - archived... · req response to exporter...

PUBLIC RECORD

CUSTOMS ACT 1901 - PART XVB

ANTI-DUMPING COMMISSION

REPORT NO. 445

REVIEW OF ANTI-DUMPING MEASURES HOLLOW STRUCTURAL SECTIONS EXPORTED TO

AUSTRALIA

FROM THE KINGDOM OF THAILAND

May 2018

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Report No. 445 – Hollow Structural Sections – Thailand 2

CONTENTS

CONTENTS................................................................................................................................................ 2

ABBREVIATIONS ...................................................................................................................................... 3

1 SUMMARY ........................................................................................................................................ 4

1.1 INTRODUCTION ................................................................................................................................. 4 1.2 LEGISLATIVE BACKGROUND ............................................................................................................... 4 1.3 FINDINGS ........................................................................................................................................ 5 1.4 RECOMMENDATION ........................................................................................................................... 5

2 BACKGROUND ................................................................................................................................. 6

2.1 INITIATION ....................................................................................................................................... 6 2.2 EXISTING ANTI-DUMPING MEASURES ................................................................................................... 6 2.3 REVIEW PROCESS ............................................................................................................................ 7 2.4 STATEMENT OF ESSENTIAL FACTS ...................................................................................................... 8 2.5 EXTENSIONS OF TIME ........................................................................................................................ 8

3 THE GOODS AND LIKE GOODS ...................................................................................................... 9

3.1 THE GOODS SUBJECT TO THE ANTI-DUMPING MEASURES ....................................................................... 9 3.2 TARIFF CLASSIFICATION .................................................................................................................... 9 3.3 LIKE GOODS ................................................................................................................................... 10

4 VARIABLE FACTORS – DUMPING DUTY NOTICE ........................................................................ 11

4.1 FINDING ........................................................................................................................................ 11 4.2 EXPORTER QUESTIONNAIRES AND VERIFICATION ................................................................................ 11 4.3 PACIFIC PIPE ................................................................................................................................. 12 4.4 SAHA THAI..................................................................................................................................... 20 4.5 THAI PREMIUM ............................................................................................................................... 24 4.6 ATLANTIC ...................................................................................................................................... 28 4.7 UNCOOPERATIVE AND ALL OTHER EXPORTERS ................................................................................... 30

5 NON-INJURIOUS PRICE ................................................................................................................. 31

5.1 INTRODUCTION ............................................................................................................................... 31

6 FINDINGS AND EFFECT OF THE REVIEW .................................................................................... 33

6.1 FINDINGS ...................................................................................................................................... 33 6.2 RECOMMENDATIONS ....................................................................................................................... 33

7 RECOMMENDATIONS .................................................................................................................... 36

7.1 RECOMMENDATIONS ....................................................................................................................... 36

8 APPENDICES AND ATTACHMENTS .............................................................................................. 38

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ABBREVIATIONS

the Act Customs Act 1901

ADN Anti-Dumping Notice

ADRP Anti-Dumping Review Panel

the Assistant Minister Assistant Minister for Science, Jobs and Innovation and Assistant Minister to the Minister for Jobs and Innovation

Atlantic Atlantic Pipe Company Limited

ATM Austube Mills Pty Ltd

CHS Circular hollow sections

the Commission the Anti-Dumping Commission

the Commissioner the Commissioner of the Anti-Dumping Commission

CON 445 Consideration Report No. 445

CTMS cost to make and sell

the Customs Amendment Customs Amendment (Anti-Dumping Measures) Act 2017

the Direction Customs (Extension of Time and Non-cooperation) Direction 2015

the Dumping Duty Act Customs Tariff (Anti-Dumping) Act 1975

the Dumping Duty Regulation Customs Tariff (Anti-Dumping) Regulation 2013

EPR Electronic Public Record

FOB free on board

GAAP generally accepted accounting principles

the goods the goods the subject of the application (also referred to as the goods under consideration or GUC)

HRC Hot-rolled coil

HSS Hollow structural sections

IDD interim dumping duty

The Manual Dumping and Subsidies Manual

NIP non-injurious price

OCOT ordinary course of trade

Orrcon Orrcon Steel Limited

Pacific Pipe Pacific Pipe Public Company Limited

the Regulation Customs (International Obligations) Regulation 2015

REQ Response to exporter questionnaire

REP 254 Anti-Dumping Commission Report No. 254

review period 1 October 2016 to 30 September 2017

RHS Rectangular or square hollow sections

Saha Thai Sahathai Steel Pipe Public Company Limited

SEF Statement of Essential Facts

Thai Premium Thai Premium Pipe Co Ltd

Thailand the Kingdom of Thailand

USP Unsuppressed selling price

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1 SUMMARY

1.1 Introduction

This report sets out the Commissioner of the Anti-Dumping Commission’s (the Commissioner’s) recommendations to the Assistant Minister for Science, Jobs and Innovation to the Minister for Jobs and Innovation (the Assistant Minister)1 in relation to a review of the anti-dumping measures (in the form of a dumping duty notice) applying to certain hollow structural sections (HSS or the goods) exported to Australia from the Kingdom of Thailand (Thailand).

This review was initiated on 19 October 2017 after the Commissioner considered an application lodged by Pacific Pipe Public Company Limited (Pacific Pipe).

Pacific Pipe considered it appropriate to review the anti-dumping measures applying to HSS, as the measures affect them, on the basis that one or more of the variable factors relevant to the taking of the anti-dumping measures, in relation to the applicant, have changed. Pacific Pipe alleges that the variable factor that has changed is export price.

The Anti-Dumping Commission (the Commission) considers that the export price is likely to have changed for all exporters of the goods to Australia from Thailand and therefore recommended to the Assistant Minister that the review be extended to include all Thai exporters. The Assistant Minister agreed to this request.2

1.2 Legislative background

Division 5 of Part XVB of the Customs Act 1901 (the Act) sets out,3 among other things, the procedures to be followed by the Commissioner when undertaking a review of anti-dumping measures.

Division 5 empowers the Commissioner to reject or not reject an application for review of anti-dumping measures. If the Commissioner does not reject the application, he is required to publish a notice indicating that it is proposed to review the anti-dumping measures.4

The Commissioner must, after conducting a review of the variable factors relevant to the taking of the anti-dumping measures, give the Assistant Minister a report recommending that:

the dumping duty notice remain unaltered; or

the dumping duty notice have effect in relation to a particular exporter, or to exporters generally, as if different variable factors had been ascertained.5

1 On 20 December 2017, the Prime Minister appointed the Parliamentary Secretary to the Minister for Jobs and Innovation as the Assistant Minister for Science, Jobs and Innovation. For the purposes of this decision the Minister is the Assistant Minister. 2 Subsection 269ZC(4)(b) of the Act provides that if the Commissioner decides not to reject an application for review of anti-dumping measures, the Commissioner may, if he considers that the review applied for should be extended to include any additional matter, recommend to the Assistant Minister that the review be extended accordingly. 3 All references to legislation in this report are to the Customs Act 1901, unless otherwise specified.

4 Subsection 269ZC(4)(a).

5 Subsection 269ZDA(1).

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1.3 Findings

The Commissioner finds, in relation to exports of HSS to Australia from Thailand by the applicant, and other exporters, during the period 1 October 2016 to 30 September 2017 (the review period), that the variable factors relevant to the taking of the anti-dumping measures in relation to all exporters have changed.

1.4 Recommendation

The Commissioner recommends to the Assistant Minister that the notice have effect in relation to all exporters from Thailand as if different variable factors had been ascertained.

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2 BACKGROUND

2.1 Initiation

On 19 October 2017, following consideration of an application for review lodged by Pacific Pipe, the Commissioner initiated a review of the anti-dumping measures applying to the goods exported to Australia from Thailand.

Notification of the initiation of the review was made in ADN No. 2017/136, which was published on the Commission’s website6 on 19 October 2017.

Consideration Report No. 445 (CON 445) was also published on the Commission’s website, detailing the Commissioner's reasons for not rejecting the application.

The review examined exports to Australia during the review period (1 October 2016 to 30 September 2017).

2.2 Existing anti-dumping measures

2.2.1 Original Investigation

The anti-dumping measures, the subject of the review application, were initially imposed by public notice on 19 August 2015, by the then Assistant Minister to the Minister for Industry and Science, following consideration of the Anti-Dumping Commission Report No. 254 (REP 254).7 The measures have not been the subject of a review since they were imposed in August 2015.

As a result of an accelerated review application (Anti-Dumping Commission Report No. 382), lodged by the exporter, Thai Premium Pipe Co Ltd (Thai Premium), Thai Premium received specific measures with effect from 19 October 2016.

Particulars of the dumping margins established for each of the exporters, and the effective rates of duty determined as a result of the initial investigation, or accelerated review, are set out in the following table:

6 www.adcommission.gov.au 7 Refer to Anti-Dumping Commission Report No. 254 on the Commission’s website at www.adcommission.gov.au for further details. NOTE: all further references in the footnote to the Commission’s website will mean www.adcommission.gov.au

Exporter / Manufacturer Effective Rate of Duty Duty Method

Sahathai Steel Pipe Public Company Limited 5.7% Ad valorem

Pacific Pipe 15.1% Ad valorem

Samchai Steel Industries Public Company Limited 19.8% Ad valorem

Thai Premium 0% Floor price

Uncooperative and all other exporters 29.7% Ad valorem

http://www.adcommission.gov.au/



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2.3 Review process

If anti-dumping measures have been taken in respect of certain goods, an affected party may consider it appropriate to seek a review of those anti-dumping measures as they affect a particular exporter or exporters generally. Accordingly, the affected party may apply for,8 or the Assistant Minister may request, that the Commissioner conduct,9 a review of those anti-dumping measures if one or more of the variable factors has changed.

The Assistant Minister may initiate a review at any time. However, a review application from an affected party must not be lodged earlier than 12 months after publication of the notice imposing the original anti-dumping measures or the notice declaring the outcome of the last review.10

If an application for a review of anti-dumping measures is received and not rejected, the Commissioner has up to 155 days, or such longer time as the Assistant Minister may allow, to conduct a review and report to the Assistant Minister on the review of the anti-dumping measures.11

During the course of a review, the Commissioner examined whether the variable factors have changed.

Variable factors in this particular review are a reference to:12

the ascertained export price;

the ascertained normal value; and

the non-injurious price (NIP).

Within 110 days of the initiation of a review, or such longer time as allowed,13 the Commissioner must place on the public record a statement of essential facts (SEF) on which he proposes to base recommendations to the Assistant Minister concerning the review of the anti-dumping measures.14

The Commissioner must, after conducting a review of anti-dumping measures and within 155 days, or such longer period as the Assistant Minister may allow, give the Assistant Minister a report setting out recommendations on the review of the measures.

In making recommendations in his report to the Assistant Minister, the Commissioner must have regard to:

the application for review;

any submission relating generally to the review of the anti-dumping measures to which the Commissioner has had regard for the purpose of formulating the SEF;

8 Subsection 269ZA(1) of the Act.

9 Subsection 269ZA(3) of the Act.

10 Subsection 269ZA(2)(a) of the Act. 11 Subsection 269ZDA(1) of the Act. 12 Subsection 269T(4E) of the Act. 13 On 19 January 2017, the former Assistant Minister delegated the powers and functions of the Minister under section 269ZHI to the Commissioner. Refer to ADN No. 2017/10 for further information. 14 Subsection 269ZD(1) of the Act.

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the SEF; and

any submission made in response to the SEF that is received by the Commissioner within 20 days of it being placed on the public record.

Additionally, the Commissioner may have regard to any other matter he considers to be relevant to the review.15

After the Assistant Minister considers the report, along with any other information that the Assistant Minister considers relevant, a notice is to be published declaring that the dumping duty notice:

remain unaltered; or

have effect, in relation to a particular exporter or to exporters generally, as if different variable factors had been ascertained.

The Assistant Minister must make a declaration within 30 days of receiving the report or, if the Assistant Minister considers there are special circumstances that prevent the declaration being made within that period, such longer period as the Assistant Minister considers appropriate.

2.4 Statement of essential facts

On 12 April 2018, the Commissioner placed on the public record the SEF in relation to this review, which sets out the essential facts on which the Commissioner proposed to base his final recommendations to the Assistant Minister for the review. The submissions made in response to the SEF are available on the Electronic Public Record (EPR) on the Commission’s website.

2.5 Extensions of time

As noted in ADN No. 2018/16, an extension of time was granted, on 31 January 2018, in relation to Review 445 for 30 days, for the publication of the SEF and Final Report. Following this extension of time, a further notice ADN No. 2018/31, was published on the Commission’s website, granting an extension of a further 35 days for the publication of the SEF and Final Report.

15 Paragraph 269ZDA(3)(b).

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3 THE GOODS AND LIKE GOODS

3.1 The goods subject to the anti-dumping measures

The goods the subject of the anti-dumping measures (the goods), and therefore this review are:

certain electric resistance welded pipe and tube made of steel, comprising circular and non-circular hollow sections in galvanised and non-galvanised finishes, whether or not including alloys. The goods are normally referred to as either CHS (circular hollow sections) or RHS (rectangular or square hollow sections). The goods are collectively referred to as HSS (hollow structural sections). Finish types for the goods include pre-galvanised, hot-dipped galvanised (HDG), and non-galvanised HSS.

Sizes of the goods are, for circular products, those exceeding 21 mm up to and including 165.1 mm in outside diameter and, for oval, square and rectangular products those with a perimeter up to and including 950.0 mm. CHS with other than plain ends (such as threaded, swaged and shouldered) are also included within the goods coverage.

The following goods are excluded from the anti-dumping measures:

Conveyor tube made for high speed idler rolls on conveyor systems, with inner and outer fin protrusions removed by scarfing (not exceeding 0.1 mm on outer surface and 0.25 mm on inner surface), and out of rounds standards (i.e. ovality) which do not exceed 0.6 mm in order to maintain vibration free rotation and minimum wind noise during operation);

Precision RHS with a nominal thickness of less than 1.6 mm (i.e. not used in structural applications); and

Stainless steel CHS and RHS sections.

3.2 Tariff classification

The goods are currently classified to the following tariff subheadings and statistical codes in Schedule 3 to the Customs Tariff Act 1995:

7306.30.00 (statistical codes 31, 32, 33, 34, 35, 36 and 37); 7306.50.00 (statistical code 45); 7306.61.00 (statistical codes 21, 22, 25 and 90); 7306.69.00 (statistical code 10); and

7306.90.00 (statistical code 12).

These tariff classifications and statistical codes may include goods that are both subject and not subject to the review. The listing of these tariff classifications and statistical codes are for convenience or reference only and do not form part of the goods description. Please refer to the goods description for details of the goods the subject of this review.

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3.3 Like goods

Subsection 269T(1) defines like goods as:

“…goods that are identical in all respects to the goods under consideration or that, although not alike in all respects to the goods under consideration, have characteristics closely resembling those of the goods under consideration”.

The definition of like goods is relevant in the context of this review in determining the normal value of goods exported to Australia, the NIP and the goods subject to the dumping duty notice. The Commission’s framework for assessing like goods is outlined in Chapter 2 of the Commission’s Dumping and Subsidies Manual (the Manual).16

16 Available on the Commission’s website.

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4 VARIABLE FACTORS – DUMPING DUTY NOTICE

4.1 Finding

The Commissioner finds that the variable factors relevant to the determination of dumping duty payable under the Customs Tariff (Anti-Dumping) Act 1975 (Dumping Duty Act) have changed.

The Commissioner recommends to the Assistant Minister that the dumping duty notice have effect to exporters generally as if different variable factors had been ascertained.

4.2 Exporter questionnaires and verification

In addition to the applicant, Pacific Pipe, the Commission identified two additional exporters of the goods to Australia from Thailand in the review period.

They are:

Sahathai Steel Pipe Public Company; and

Thai Premium Pipe Co Ltd.

Another Thai HSS manufacturer, Atlantic Pipe Company Limited (Atlantic), submitted an application for an accelerated review of the dumping notice with respect to their goods exported to Australia from Thailand. The Commissioner initiated the accelerated review on 9 November 2017. On receipt of a letter from Atlantic, dated 19 November 2017, withdrawing its application for an accelerated review and seeking participation in this review, the Commission ceased the accelerated review of the anti-dumping measures applicable to Atlantic.

Each exporter subject to this review, including Atlantic, was invited to complete an exporter questionnaire. Four exporters provided a detailed response to the exporter questionnaire (REQ). Non-confidential versions of the REQs are available on the EPR.

The Commission selected two exporters, Saha Thai and Pacific Pipe, for onsite verification of their information. Verification reports setting out the Commission’s findings are available on the EPR. Saha Thai and Pacific Pipe represent more than 95 per cent of the volume of the goods exported to Australia from Thailand during the review period.

The Commission elected not to undertake onsite visits for Atlantic and Thai Premium. The Commission was able to benchmark the information provided in the REQs by these exporters with the information verified onsite for Saha Thai and Pacific Pipe.

4.2.1 Uncooperative exporters

Pursuant to subsection 269T(1), an exporter is an “uncooperative exporter” where the Commissioner is satisfied that an exporter did not give the Commissioner information that the Commissioner considered to be relevant to the review, within a period the Commissioner considered to be reasonable, or where the Commissioner is satisfied that an exporter significantly impeded the review.

Section 8 of the Customs (Extensions of Time and Non-cooperation) Direction 2015 (the Direction) states that the Commissioner must determine an exporter to be an uncooperative

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exporter, on the basis that no relevant information was provided in a reasonable period, if that exporter fails to provide a response or fails to request a longer period to do so within the legislated period. After having regard to the Direction, the Commissioner determined that all exporters which did not provide a REQ, or which did not request a longer period to provide a response within the legislated period, are uncooperative exporters for the purposes of this review.

As provided for in subsection 269TACAB(1), for uncooperative exporters, export price and normal value were worked out in accordance with subsections 269TAB(3) and 269TAC(6), respectively, by having regard to all relevant information.

4.3 Pacific Pipe

4.3.1 Verification of information

The Commission conducted onsite verification of the data submitted by Pacific Pipe in its REQ.

4.3.2 Export price

Pacific Pipe exported a small volume of HSS to Australia in the review period when compared to the volume it exported to Australia in the original investigation period (2013-14 FY).17 The Commission has considered whether the requirements of subsection 269TAB(2A) have been met, and therefore, whether Pacific Pipe’s export price is to be determined under subsection 269TAB(2B).

Subsection 269TAB(2A) specifies that the export price of the goods exported to Australia may be determined by the Minister in accordance with subsection 269TAB(2B) if:

(a) the price is being ascertained in relation to an exporter of those goods (whether the review is of the measures as they affect a particular exporter of those goods, or as they affect exporters of those goods generally); and

(b) the Minister determines that there is insufficient or unreliable information to

ascertain the price due to an absence or low volume of exports of those goods to Australia by that exporter having regard to the following:

(i) previous volumes of exports of those goods to Australia by that exporter; (ii) patterns of trade for like goods;

(iii) factors affecting patterns of trade for like goods that are not within the control of the exporter.

The Commission has considered these elements as set out above in regards to Pacific Pipe as follows:

17 Financial Year

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Previous volumes of exports by Pacific Pipe – subsection 269TAB(2A)(b)(i)

Pacific Pipe has previously exported the goods prior to the review period, during the original investigation period (1 July 2013 to 30 June 2014) and in subsequent quarters.

The Commission has compared previous export volumes to those volumes in the current review period and finds that Pacific Pipe is exporting HSS to Australia in lower volumes than previously.

Patterns of trade for like goods – subsection 269TAB(2A)(b)(ii)

The Commission has examined exports of HSS to Australia from all sources. This examination indicates that, despite a decline in imports of HSS from Pacific Pipe, demand for HSS persists in the Australian domestic market generally, and there does not appear to have been a marked decline in the overall volume of HSS exports to Australia.

In addition, other exporters exporting HSS to Australia from Thailand, experienced an increase in volumes of goods sold to Australia. The Commission therefore considers that Pacific Pipe’s low volume of exports to Australia during the review period does not pertain to an absence of exports, or low volume of exports, to Australia generally.

Factors affecting patterns of trade – subsection 269TAB(2A)(b)(iii)

The Commission notes that the explanatory memorandum18 for the Customs Amendment identifies factors that may affect patterns of trade for like goods that are not within the control of the exporter. Such factors may include supply disruptions or natural events (such as flood, drought or fire) that affect production levels.

The Commission found that Pacific Pipe manufactured and sold like goods on the domestic market and to third countries during the review period (see the exporter verification report on the public record). The Commission considers that this indicates that there do not appear to be any factors (such as natural events) that are not within the control of Pacific Pipe that are affecting trade for like goods.

Commission’s consideration – subsection 269TAB(2A)

Having regard to the above, the Commission considers that, for Pacific Pipe, there is insufficient or unreliable information to ascertain an export price due to a low volume of exports to Australia by that exporter. Pacific Pipe previously exported the goods to Australia in higher volumes and, despite the reduction in exports from Pacific Pipe, imports of HSS overall have not similarly declined. In addition, Pacific Pipe has not demonstrated that there are factors affecting the patterns of trade that are beyond its control.

Therefore, the Commission considers it appropriate to ascertain export prices under subsection 269TAB(2B). Pursuant to this subsection, the Commission is able to determine an export price having regard to any of the following:

18 Refer page 31 of the explanatory memorandum to the Customs Amendment (Anti-Dumping Measures) Act 2017.

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a previous export price for the goods exported to Australia by Pacific Pipe, established in accordance with subsection 269TAB(1), for a decision of a kind mentioned in subsection 269TAB(2D);19

the price paid or payable for like goods sold by Pacific Pipe in arms length transactions for exportation from Thailand to a third country determined by the Minister to be an appropriate third country;20 or

an export price for like goods exported to Australia from Thailand by another exporter or exporters established in accordance with subsection 269TAB(1) for a decision mentioned in subsection 269TAB(2D).21

Previous export price – subsection 269TAB(2B)(a)

An export price for Pacific Pipe was determined under subsection 269TAB(1) for the purposes of publishing the notice under subsections 269TG(1) and (2)22 with respect to the original investigation. The decisions to publish notices under subsections 269TG(1) and (2) are decisions referred to in subsection 269TAB(2D). Therefore subsection 269TAB(2B)(a) is available for determining the export price.

Third country export price – subsection 269TAB(2B)(b)

Pacific Pipe indicated in its REQ that it did export like goods to third countries during the review period. The Commission confirmed third country exports by Pacific Pipe during an onsite verification visit.23The Commission did not find any evidence to suggest exports to third countries were not at arms length. Therefore subsection 269TAB(2B)(b) is available for determining the export price.

Another exporter’s export price – subsection 269TAB(2B)(c)

Saha Thai and Thai Premium both exported the goods to Australia and are also subject to this review. Subsection 269TAB(2E) provides that, for the purposes of subsection 269TAB(2B)(c), a decision, as listed in subsection 269TAB(2D), must be (a) made not more than 2 years before the day the Commissioner published a notice of the review, and (b) made by the day the notice of review is published under section 269ZDB. Both exporters will have their export price determined under subsection 269TAB(1). Therefore subsection 269TAB(2B)(c) is available for determining Pacific Pipe’s export price.

Commission’s consideration – subsection 269TAB(2B)

All three methodologies set out under subsection 269TAB(2B) are available for determining Pacific Pipe’s export price.

The Commission has considered all the methodologies available and has determined that the current export prices of other exporters’, exporting the goods to Australia in the review period, being established in accordance with subsection 269TAB(1) in this review, is the most

19 Subsection 269TAB(2B)(a) of the Act 20 Subsection 269TAB(2B)(b) of the Act 21 Subsection 269TAB(2B)(c) of the Act 22 See REP 254 23 See Pacific Pipe’s exporter visit report, document 14 on the electronic record (EPR 445) on the Commission’s website.

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appropriate method to use to determine Pacific Pipe’s export price as these prices reflect current market conditions and market prices of the goods exported to Australia from Thailand.

The Commission established export prices for Pacific Pipe, pursuant to subsection 269TAB(2B)(c), using the export price of like goods exported to Australia from Thailand by other exporters, where the export price of these exporters were determined in accordance with subsection 269TAB(1). The Commission determined the weighted average export prices of Saha Thai’s and Thai Premium’s product mix during the review period.

The Commission has found that the resulting ascertained export price for Pacific Pipe in respect to HSS has changed since Investigation 254.

4.3.3 Submissions made with respect to the application of subsection 269TAB(2A)

Pacific Pipe Public Company Limited

Pacific Pipe, in a submission dated 14 March 2018,24 claims that ‘[f]ollowing the imposition of the 15.1% ad valorem dumping duty rate, Pacific Pipe’s exports were negatively impacted by factors beyond its control which resulted in its export volumes reducing to approximately [XX] tonnes during the current review period’25.

Pacific also submits that the various investigations, reviews and accelerated reviews since imposition of dumping duties on HSS has had a direct impact on Pacific Pipe’s export sales, and that competition from alternate suppliers, exporting HSS from third countries, is outside the control of the exporter.

Austube Mills Pty Ltd

On 6 April 2018, ATM provided a response to the submission made by Pacific Pipe on 14 March 2018. ATM sought clarification on the name used in the submission, Pacific Pipe Steel Co. Ltd, is the same as the exporter, Pacific Pipe.

Additionally, ATM states that Pacific Pipe proposes an unsound interpretation of the subsection 269TAB(2A) and their submission should be dismissed. ATM point out that the question to consider is if “there is insufficient or unreliable information to ascertain the [export price]”.26 ATM argue that to determine if an exporter was a ‘low volume’ exporter during the review period, the Commission must adequately consider all three factors pertaining to ‘low volume’ exports. ATM also notes the Customs Amendment and the Explanatory Memorandum do not impose a hierarchy when considering the factors, or that the presence of all three are necessary to satisfy the decision maker that the ‘low volume’ of exports is unreliable or insufficient.

ATM finds the suggestion by Pacific Pipe that the low volume of its exports during the current review period are a result of the imposition of dumping duties ‘defies belief’27. ATM states that the exporter, Pacific Pipe, may overcome its absence from the Australian market by adjusting its price to the Australian market conditions.

24 Pacific Pipe’s submission can be found on the EPR, item number 13, on the Commission’s website. 25 Page 1 – Submission by Pacific Pipe on EPR 445, item number 13, on the Commission’s website. 26 Emphasis added in submission by ATM – refer to EPR 445, item number 15, on the Commission’s website. 27 Page 2 in submission by ATM – EPR 445, item number 15, on the Commission’s website.

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The Commission’s assessment

It is the Commission’s view that Pacific Pipe has not been able to provide sufficient evidence to demonstrate that factors outside its control affected its trade volumes during the review period. The Commission considers that anti-dumping measures in place in relation to the Pacific Pipe’s exports of HSS to Australia are not a result of factors outside their control. In fact the measures directly resulted from the behaviour of Pacific Pipe during the original investigation period, in the sense that the goods were priced and sold by the exporter willingly at that time, and were found to have been dumped.

The Commission has confirmed that any reference made to ‘Pacific Pipe Steel Co. Ltd’ in the submission by Pacific Pipe, dated 14 March 2018, is, in fact, referring to Pacific Pipe.

4.3.4 Normal value

The Commission found that, in the review period, Pacific Pipe had arms length sales on the domestic market at prices that were in the ordinary course of trade. The Commission is satisfied that the prices paid in domestic sales of HSS are suitable for assessing normal value under subsection 269TAC(1).

The Commission has found that the resulting ascertained normal value for Pacific Pipe in respect to HSS has changed since Investigation 254.

4.3.5 Adjustments

To ensure the normal value is comparable to the export price of goods exported to Australia, the Commission considered various adjustments in accordance with subsection 269TAC(8).

The Commission is satisfied that there is sufficient and reliable information to justify the adjustments below, in accordance with subsection 269TAC(8), including a timing adjustment where there were no domestic sales of a particular model in a particular quarter. The Commission considers these adjustments are necessary to ensure a fair comparison of normal values and export prices:

Adjustment Type Deduction/addition

Domestic inland transport Deduct the cost of domestic inland transport

Domestic handling expenses Deduct the cost of domestic handling expenses

Domestic credit terms Deduct the cost of domestic credit terms

Domestic packaging Deduct the cost of domestic packaging

Export handling and other Add the cost of export handling and other

Export packaging Add the cost of export packaging

Export inland transport Add the cost of export inland transport

Specification adjustments Add/deduct specification adjustments as appropriate

Timing adjustments Add/deduct timing adjustments as appropriate

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4.3.6 Dumping margin

The Commission has calculated a dumping margin in respect of the goods exported to Australia by Pacific Pipe for the review period. The margin is 5.6 per cent.

The Commission’s calculations are included at Confidential Appendix 1.1 – 1.5.

4.3.7 Submissions in response to the SEF

The Commission received submissions from Orrcon, ATM and Pacific Pipe, dated 30 April 2018, 2 and 3 May 2018 respectively28, in relation to the methodology used in determining Pacific Pipe’s dumping margin in SEF 445. The submissions raise the following two issues:

application of low/no volume provisions – subsections 269TAB(2A) and (2B);

adjustments; and

model matching.

Orrcon Steel Limited

Application of ‘low/no volume’ provisions – 269TAB(2A) and (2B)

Orrcon notes that the Commission has considered the three arms available to determine an export price for Pacific Pipe under subsection 269TAB(2B). Orrcon questions the suitability of the use of other exporters’ prices during the review period, believing this would provide Pacific Pipe with a more favourable export price than it would otherwise have had.

Orrcon states that it considers that the proposed methodology to determine an export price for Pacific Pipe is simply a reflection of the export price of Saha Thai. The utilisation of Saha Thai’s export prices, as opposed to the earlier ascertained export prices of Pacific Pipe, again provides a favourable outcome for Pacific Pipe.

Normal value adjustments

Orrcon notes that it is difficult to make comment on the information provided with respect to the normal value determined for Pacific Pipe. Orrcon notes this in conjunction with comments for Thai Premium and Atlantic.



In its submission ATM reiterates its support of the Commission’s proposed determination of Pacific Pipe’s export price on the basis that there is insufficient or unreliable information due the low volume of exports by this exporter.

28 Refer to EPR 445, items 18, 19 and 20, on the Commission’s website.

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Adjustments with respect to specification

ATM notes that a specification adjustment has been made to two models of black HSS sold by Pacific Pipe on the domestic market. ATM argue that any cost differential between black and painted models is irrelevant when making fair comparisons and a specification adjustment should not be applied.

Adjustment with respect to timing

ATM also notes the timing adjustment applied to quarters where Pacific Pipe has no domestic sales at arms length in the ordinary course of trade. ATM argue that the Commission should consider the existence of periodic or targeted dumping by the exporter.

Pacific Pipe Public Company Limited


In its submission Pacific Pipe states that ATM, in its submission of 6 April 2018, has misunderstood the key points made by Pacific Pipe in its submission of 14 March 2018. Pacific Pipe states it has not suggested that the reason for the reduction in its export volume is due to having been found dumping by the Commission, and that it continues to export HSS to Australia at prices above comparable domestic selling prices.

Pacific Pipe claims that it is the pricing behaviour of third country exporters’ that is beyond its control. Pacific Pipe asserts that these exporters have been found to be exporting the goods at dumped prices,29 and this has resulted in the reduction in volume of HSS that Pacific Pipe exports to Australia. Pacific Pipe feel it is reasonable for the Commission to conclude that the exporter did not seek to reduce its export volumes in an effort to achieve a favourable outcome in this review.

Pacific Pipe disagreed with the Commission’s preliminary assessment that Pacific Pipe meets the definition of a low volume exporter. It asserts that the reason for the low volume of exports of HSS to Australia during the review period is pricing behavior of third country exporters’, exporting HSS to Australia at dumped prices.

Further, Pacific Pipe disputes the assessment by the Commission that imposed measures directly resulted from the behaviour of Pacific Pipe during the original investigation period. Pacific Pipe state that the dumping margin found in the original investigation was purely a function of inappropriate model matching.

Pacific Pipe requests the Commission reconsider its preliminary findings and seek to have its export price determined pursuant to subsection 269TAB(1).

Model matching

If the Commission holds to its view that export prices for Pacific Pipe should be determined under subsection 269TAB(2B), Pacific Pipe questions the method used for model matching its domestic HSS models with other exporters’ exported models of HSS. Pacific Pipe contends that adjustments are required and question the use of ‘gauge’ with respect to

29 Review to Review of Measures No. 419. Details of this review can be found on the EPR on the Commission’s website.

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identifying model categories, and the differences in the model matching used in determining Saha Thai’s normal values.

Pacific Pipe states that, if it is to understand that ‘gauge’ refers to the combination of outside diameter and wall thickness, it is therefore clear that the Commission has not established comparable domestic models for comparison with export models, and that any grouping of Pacific Pipe’s domestic models into discrete diameter and thickness classes for CHS models without an attempt to match thickness and diameter according to the gauges identified in the Australian standard is fundamentally flawed.



The Commission notes the claims made by Pacific Pipe that the reduction in volume of HSS it exported to Australia during the review period is primarily due to third country exporters, exporting HSS to Australia at dumped prices, and that this reduction in volume is beyond the control of Pacific Pipe.

The Commission considered the volumes of HSS exported to Australia by Pacific Pipe both during the original investigation period and the current review period, in which volumes are lower in the latter period. The Commission notes that third country exports were present at the time of both the original investigation period and the current review period, and that Pacific Pipe’s claim that it is competing against dumped prices in the Australian market does not take into account that exporters from third countries were subject to measures on HSS exported and sold in the Australian market during both periods.30

The Commission, in considering only the exports of Pacific Pipe, notes that the exporter was competing in both the investigation and review periods in similar environments and that there has been no evidence provided to the Commission to indicate that the Commission should amend its preliminary assessment. The Commission considers Pacific Pipe to be a ‘low volume’ exporter and finds that there is insufficient or unreliable information to be able to determine an export price according to subsection 269TAB(1).

In determining an export price pursuant to subsection 269TAB(2B) for Pacific Pipe, the Commission notes that the current export prices established according to subsection 269TAB(1) of two other exporters, exporting the goods to Australia in the review period, provides the most contemporary information on export prices. The weighted average export prices of Saha Thai and Thai Premium during the review period are used by the Commission to determine an export price for Pacific Pipe. The weighted average export price does not solely reflect the export price of Saha Thai as claimed by Orrcon.

Adjustments with respect to specification

The Commission applied a specification adjustment with regard to two models of black HSS sold on the domestic market by Pacific Pipe.31 The specification adjustments were based on the verified cost to make difference between the black and painted models. Following its analysis of Pacific Pipe’s sales information, the Commission is satisfied that whether HSS is

30 Anti-dumping measures were imposed on 3 July 2012 for exporters exporting HSS from China, Korea, Malaysia and Taiwan. Refer International Trade Remedies Branch Report No. 177 and more recently to a review of measures in REV 419. See the Commission’s website. 31 As footnote 30.

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black or painted is a factor that affects price comparability. The Commission is satisfied, therefore, that it is appropriate to make an adjustment for this factor to ensure the normal value is properly comparable ot the export price.

Adjustments with respect to timing

As explained in the SEF, the Commission matched domestic and export sales models according to the product’s profile, standard, pipe size (for CHS), gauge, finish and end type. Gauge is defined as the thickness of the HSS as set out as follows in Pacific Pipe’s exporter verification report.

Gauge (thickness) as follows (for all profiles):

A B C

<= 2mm > 2mm to <= 5mm > 5mm

Pacific Pipe did not comment on the proposed models when given an opportunity to respond to the draft exporter visit report and has provided no compelling reasons why designating models according to Australian standards provides a better measure of price comparability than the models proposed by the Commission. The Commission also notes that the models proposed by Pacific Pipe based on the Australian standards relate on to CHS HSS. The Commission considers the criteria used to match export and domestic models reasonable reflects factors that affect price comparability for Pacific Pipe.

Adjustments with respect to model matching

In matching models of HSS sold by Pacific Pipe on the domestic market with models of HSS exported to Australia by Saha Thai and Thai Premium, the Commission applied a specification adjustment in order to provide a meaningful comparison.32 The Commission used sales of HSS to Australia with similar dimensions to establish the adjustment factor.

4.4 Saha Thai


The Commission conducted onsite verification of the data submitted by Saha Thai in its REQ.

4.4.2 Export price

Having regard to:

(i) previous volumes of exports of those goods to Australia by Saha Thai; (ii) patterns of trade for like goods; (iii) factors affecting patterns of trade for like goods that are not within the control of the

exporter

32 Refer to page 15 of the Verification Report on EPR 445, item number 14, on the Commission’s website.

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the Commission does not consider that there is insufficient or unreliable information to ascertain the export price due to the absence or low volume of exports to Australia. Saha Thai has not reduced the amount of HSS it exports to Australia during the review period, when compared to its previous volumes.

The Commission is satisfied that, for Saha Thai’s exports to Australian customers, Saha Thai is the exporter and the goods were exported to Australia otherwise than by the importer and were purchased in arms length transactions by the importer from the exporter.

The export price was established under subsection 269TAB(1)(a), as the price paid by the importer to the exporter, excluding any part of that prices that relates to post-exportation charges.

The Commission has found that the resulting ascertained export price for Saha Thai in respect to HSS has changed since Investigation 254.

4.4.3 Normal value

The Commission found that, for two models of HSS exported to Australia in the review period, there were corresponding arms length sales on the domestic market at prices that were in the ordinary course of trade, with sufficient volume of sales in the domestic market. The Commission is satisfied that the prices paid in respect of those models of domestic sales of HSS are suitable for assessing normal value under subsection 269TAC(1). All other models exported to Australia either did not have sufficient volumes of comparable domestic models or were not sold in the domestic market. The Commission therefore constructed normal values under subsection 269TAC(2)(c), and in accordance with sections 43, 44 and 45 of the Customs (International Obligations) Regulation 2015 (the Regulation).

The cost of production has been determined in accordance with subsection 43(2) of the Regulation. As required by subsection 269TAC(5B), in ascertaining the normal value of the goods in accordance with subsection 269TAC(2)(c), the amount of profit included in the normal value has been determined having regard to subsection 45(2) of the Regulation.

The normal value for Saha Thai is determined using a weighted average of all models, both ascertained under subsection 269TAC(1) and subsection 269TAC(2)(c). The Commission has found that the resulting ascertained normal value for Saha Thai in respect to HSS has changed since Investigation 254.

4.4.4 Adjustments

To ensure the normal value is comparable to the export price of goods exported to Australia, the Commission considered various adjustments in accordance with subsections 269TAC(8) and (9).

The Commission is satisfied that there is sufficient and reliable information to justify the adjustments below, in accordance with subsections 269TAC(8) and (9), including a timing adjustment where there were no domestic sales of a particular model in a particular quarter. The Commission considers these adjustments are necessary to ensure a fair comparison of normal values and export prices.

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Domestic inland transport Deduct the cost of inland transport

Domestic credit costs Deduct the cost of credit

Export packing Add the cost of Packing

Export handling and other Add the cost of Handling and Other

Timing adjustments Add/deduct timing adjustments as appropriate


The Commission has calculated a dumping margin in respect of the goods exported to Australia by Saha Thai for the review period. The margin is -3.6 per cent.



The Commission received submissions from Orrcon and ATM, dated 30 April 2018 and 2 May 2018 respectively,33 in relation to the methodology used in determining Saha Thai’s dumping margin in SEF 445. The submissions raise the following issues:

profit used for constructed normal value;

the absence of transport fees incurred for export sales;

export packing costs; and

cost to make and sell.


Profit used for construction of normal value

Orrcon contends that the profit applied to models where normal value are constructed for Saha Thai, pursuant to subsection 269TAC(2)(c), do not fully reflect the high value add of a galvanised product, and requests the Commission to carefully reconsider.


Transport for export sales

ATM notes that an adjustment applied in the original investigation34 for Saha Thai for transport costs of exports was not applied in this review. ATM refers to a statement in the exporter verification report for Saha Thai that states ‘As there are no transport fees incurred for export sales due to the proximity of the harbour, no upward adjustment is required.’35

33 Refer to EPR 445, items 18 and 19, on the Commission’s website. 34 Refer to Investigation 254 on the Commission’s website. 35 Refer to page 10 in the Verification Report on the EPR 445, item number 17, on the Commission’s website.

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ATM questions the absence of transport costs by pointing to the distance between Saha Thai’s site and the Laem Chabang Port, being approximately 116 kilometres. Additionally, ATM points out that in the original investigation an adjustment for inland transport was applied.36

Packing costs

ATM states the upward adjustment for packing costs applied in this review was not applied in the same way it was applied in the original investigation (INV 254). In the review the adjustment is based on the weighted average cost of packing over the review period using the volume of exports.

ATM notes that details of packing were provided in the original investigation (INV 254) and question why Saha Thai were not able to provide the same information for the review, believing this suggests an attempt by Saha Thai to have a lower adjustment applied than is required.

Cost to make and sell

ATM notes limited information is provided with regard to the cost elements examined by the Commission during the onsite visit to Saha Thai apart from the statement in the Verification Report ‘the verification team did not identify any issues.’

More specifically, ATM seek clarity on consideration given to the painting costs incurred by Saha Thai, where, in the original investigation, the visit team were able to inspect the production facilities and operation lines and were able to verify the paint costs against source documents.


Profit used for construction of normal value

The Commission, in constructing normal values for certain models according to subsection 269TAC(2)(c), has worked out the profit applied by using data relating to the production and sale of like goods by the exporter in the ordinary course of trade, in line with subsection 45(2) of the Regulation. In the determining the profit, the Commission has calculated a weighted average of models sold in the ordinary course of trade, including galvanised models, and therefore considers that the higher profitability of galvanised models has been considered and incorporated into the constructed normal values.

Transport for export sales

The Commission verified that the export sales drop off point is directly across the road from the manufacturing facility; therefore the Commission’s view is that no transport adjustment is required.

Export packing costs

The Commission has considered the methods used to apply an upwards adjustment for export packing in both the original investigation (INV 254) and this review in determining normal values for like goods sold on the domestic market by Saha Thai. The Commission

36 Refer to the EPR 254 on the Commission’s website.

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notes that in both cases a weighted average of the packing costs was used for the adjustment.

The Commission considers the methodology in the current review to be appropriate.

Cost to make and sell

The Commission verified figures provided by Saha Thai for the CTMS of HSS models for both the domestic market and export to Australia. The Commission states in the Verification Report for Saha Thai that:

‘[t]he verification team verified the completeness and relevance of SAHA’s cost to make and sell (CTMS) spreadsheets by reconciling it to audited financial statements in accordance with ADN no. 2016/30.

The verification team did not identify any issues. Details of this verification process are contained in the verification work program, and its relevant attachments, as Confidential Attachment 1.37

The Commission is satisfied that all aspects of CTMS for HSS models sold by Saha Thai on the domestic market and exported to Australia, including painting costs, are complete and accurate.

4.5 Thai Premium


The Commission conducted a desktop verification of the data submitted by Thai Premium in its REQ, whereby the Commission compared average domestic and export selling prices by model and quarter, average production costs and the nature and magnitude of adjustments.

4.5.2 Export price

The Commission has considered the exports of HSS by Thai Premium to Australia with respect to subsection 269TAB(2A) in order to determine if the ascertained export price should be determined in accordance with subsection 269TAB(2B).

Having regard to:

(i) previous volumes of exports of those goods to Australia by Thai Premium; (ii) patterns of trade for like goods; (iii) factors affecting patterns of trade for like goods that are not within the control of the

exporter

the Commission does not consider that there is insufficient or unreliable information to ascertain the export price due to the absence or low volume of exports to Australia and does not consider Thai Premium to be a ‘low volume’ exporter. Refer to Confidential Attachment 3.

37 Refer EPR 445, item 17, on the Commission’s website.

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The Commission is satisfied that, for Thai Premium’s exports to Australian customers, Thai Premium is the exporter and the goods were exported to Australia otherwise than by the importer and were purchased in arms length transactions by the importer from the exporter.

The export price was established under subsection 269TAB(1)(a), as the price paid by the importer to the exporter, excluding any part of that price that relates to post-exportation charges.

Thai Premium made an application to the Commission on 19 October 2016 for an accelerated review with respect to HSS exports to Australia from Thailand.38 Thai Premium did not export the goods to Australia during the review period of 1 October 2015 to 30 September 2016. As such, sufficient information was not available to enable the export price of the goods to be ascertained pursuant to subsection 269TAB(1). As a result, the Commission determined the export price pursuant to subsection 269TAB(3), having regard to all relevant information. Consequently, the Commission determined the ascertained export price to be same amount as that determined to be the ascertained normal value. This price was at FOB terms.

The Commission has found that the resulting ascertained export price for Thai Premium in respect to HSS has changed since Accelerated Review 382.

4.5.3 Normal value

The Commission found that, for all models of HSS exported to Australia in the review period, there were corresponding arms length sales on the domestic market at prices that were in the ordinary course of trade. The Commission is satisfied that the prices paid in respect of those models of domestic sales of HSS are suitable for assessing normal value under subsection 269TAC(1).

The Commission found that the normal value for Thai Premium in respect to HSS has changed since last ascertained in Accelerated Review 382.

4.5.4 Adjustments


The Commission is satisfied that there is sufficient and reliable information to justify the adjustments below, in accordance with subsection 269TAC(8). The Commission considers these adjustments are necessary to ensure a fair comparison of normal values and export prices:

38 Refer REP 382 on the Commission’s website.

PUBLIC RECORD






Export inland transport Add the cost of export inland transport.


The Commission has calculated a dumping margin in respect of the goods exported to Australia by Thai Premium for the review period. The margin is 0.7 per cent.



The Commission received submissions from Orrcon and ATM, dated 30 April 2018 and 2 May 2018 respectively, and a subsequent submission from ATM dated 4 May 2018,39 in relation to the methodology used in determining Thai Premium’s dumping margin in SEF 445. The submissions raise the following issues:

lack of public record of benchmark verification;

form of interim dumping duties (IDD) proposed; and

determination of normal value.


Orrcon notes that it is difficult to make comment on the information provided with respect to the normal value determined for Thai Premium. Orrcon notes this in conjunction with comments for Pacific Pipe and Atlantic.


Public record of benchmark verification

ATM notes that there is no public record of the benchmark verification activities conducted by the Commission with respect to Thai Premium.

Proposed interim dumping duty

ATM have concerns that the Commission intends on recommending an ad valorem IDD rate as opposed to a combination measure. ATM contend that a low rate of 0.7 per cent will only encourage Thai Premium to dump HSS at higher margins, with no recourse for at least 12 months.

39 Refer to EPR 445, items 18, 19 and 21.

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Determination of normal value

ATM claims that Thai Premium should have disclosed that the HSS manufactured for sale in the Thai domestic market by Thai Premium is almost exclusively unpainted. In contrast, ATM state that HSS for export to Australia by Thai Premium is mostly painted.

ATM refer to a statement it made in its exporter briefing document that ‘[p]ainted product unlikely to be sold domestically so adjustment required to compare with export sales.’ ATM contend that in the absence of domestic sales of like goods, the normal value should be constructed taking into consideration the cost of painting.


Public record of benchmark verification

The Commission acknowledges that there has been no public record published on the EPR with respect to verification activities relating to Thai Premium.

The Commission made a risk-based decision to conduct a desktop verification on the data and responses provided by Thai Premium in its REQ. The Commission determines this on an exporter by exporter basis. Where an exporter has been benchmarked against other verified exporters and the results are deemed consistent, the Commission will generally not undertake further verification activities.

The Commission benchmarked calculations for Thai Premium against onsite verified calculations of Pacific Pipe and Saha Thai, finding the results to be consistent with other exporters and within acceptable levels.

Proposed interim dumping duty

While the Commission notes that a disadvantage of an ad valorem duty is that some exporters may circumvent measures by deliberately lowering export prices in order to minimise the effects of the duty, there is no evidence provided to suggest that Thai Premium would seek to circumvent the measures.

It is an advantage to use an ad valorem duty where:

there are many models of the goods; and

where the goods are subject to significant price variations over time.

The Commission considers the advantages of an ad valorem duty make it an appropriate duty in this case.

Determination of normal value

Subsection 269TAC(1) provides that the normal value of goods exported to Australia is the price paid or payable for like goods sold in the ordinary course of trade on the domestic market in the country of export that are arms length transactions by the exporter. Normal value cannot be ascertained under subsection 269TAC(1) where:

there are no sales, or an absence of relevant sales;

there is a low volume of relevant sales; or

sales are unsuitable because of a situation in the market of the country of export.

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The Commission found that there were sufficient sales of painted like goods on the domestic market by Thai Premium, at arms length, to be able to determine normal value pursuant to subsection 269TAC(1), without the need for an adjustment. The Commission benchmarked its normal value calculations against onsite verified normal value calculations of Pacific Pipe and Saha Thai and found the variations to be within acceptable levels.

4.6 Atlantic


The Commission conducted a desktop verification of the data submitted by Atlantic in its REQ, by comparing average domestic selling prices and production costs to other exporters during the review period.

4.6.2 Export price

It is the Commission’s view that the application of subsection 269TAB(1) would require Atlantic to have exported the goods to Australia during the review period. Atlantic did not export the goods to Australia during the review period. As such, sufficient information is not available to enable the export price of the goods to be ascertained using:

the price paid or payable by the importer, less transport or other charges arising after exportation of the goods;40 or

the price at which the goods were sold by the importer in Australia less prescribed deductions;41 or

the price having regard to all the circumstances of the exportation.42

As the Commission has found that Atlantic did not export the goods to Australia during the review period, the Commission has considered whether the requirements of subsection 269TAB(2A) have been met and therefore whether Atlantic’s export price should be determined under subsection 269TAB(2B).

The Commission notes that the explanatory memorandum to the Customs Amendment states:

...where an Exporter has never exported the goods subject to measures to Australia. In a review of measures in relation to that Exporter, if there have still been no exports, it may be appropriate to determine that Exporter’s export price under subsection 269TAB(3) despite the methods in new subsection 269TAB(2B) [of the Act].

Noting this, and considering the elements of (i) previous volumes of exports, (ii) patterns of trade for like goods and (iii) factors affecting patterns of trade for like goods that are not within the control of the exporter, in respect of Atlantic, the Commission considers Atlantic not to be a ‘low volume’ exporter as defined in subsection 269TAB(2A).

40 Refer subsection 269TAB(1)(a) of the Act. 41 Refer subsection 269TAB(1)(b) of the Act. 42 Refer subsection 269TAB(1)(c) of the Act.

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Therefore, the Commission considers it appropriate that the export price, for the purposes of this review, be determined under subsection 269TAB(3), having regard to all relevant information.

The Commission considers it appropriate to determine the ascertained export price to be the same amount as that determined to be the ascertained normal value for the purposes of this review. This is on the basis that Atlantic, having not yet exported HSS to Australia, has not been found to have dumped goods, therefore the ascertained normal value of like goods sold in the domestic market by Atlantic is the most relevant and reliable information available to determine Atlantic’s ascertained export price.

4.6.3 Normal value

The Commission found that, during the review period, Atlantic made arms length sales on the domestic market at prices that were in the ordinary course of trade. The Commission is satisfied that the prices paid in respect of those domestic sales of HSS are suitable for assessing normal value under subsection 269TAC(1).

The Commission found that the normal value for Atlantic is different to the currently ascertained normal value for uncooperative and all other exporters, to which Atlantic is presently subject.

4.6.4 Adjustments


The Commission is satisfied that there is sufficient and reliable information to justify the adjustments below, in accordance with subsection 269TAC(8). The Commission considers these adjustments are necessary to ensure a fair comparison of normal values and export prices:





Export inland transport Add the cost of export inland transport.


The Commission has calculated a dumping margin in respect of the goods exported to Australia by Atlantic for the review period. The margin is 0 per cent.


PUBLIC RECORD



The Commission received a submission from Orrcon, dated 30 April 2018,43 in relation to the methodology used in determining Atlantic’s dumping margin in SEF 445. The submission notes that it is difficult to make comment on the information provided with respect to the normal value determined for Atlantic. Orrcon notes this in conjunction with comments for Pacific Pipe and Thai Premium.

4.7 Uncooperative and all other exporters

4.7.1 Uncooperative and all other exporters

The Commission considers that, for uncooperative and all other exporters, sufficient information has not been furnished, or is not available, to enable the export price of goods to be ascertained under subsections 269TAB(1) or 269TAB(2B).

Therefore, in accordance with 269TACAB(1), the export price for uncooperative and all other exporters has been calculated under subsection 269TAB(3) using the lowest weighted average export price calculated for cooperating exporters.

4.7.2 Normal value

The Commission considers that, for uncooperative and all other exporters, sufficient information has not been furnished or is not available to enable the normal value of goods to be ascertained under the subsections preceding subsection 269TAC(6), and therefore the normal value of those goods is such amount as is determined by the Minister having regard to all relevant information.

Therefore, in accordance with 269TACAB(1), the normal value for uncooperative and all other exporters has been calculated under subsection 269TAC(6) using the highest weighted average normal value calculated for cooperating exporters.


The Commission has calculated a dumping margin in respect of the goods exported to Australia by uncooperative and all other exporters for the review period. The margin is 8.7 per cent.

The Commission’s calculations are included at Confidential Appendix 6.

43 Refer to EPR 445, item 18.

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5 NON-INJURIOUS PRICE

5.1 Introduction

5.1.1 Non-injurious Price (NIP)

The NIP is defined in section 269TACA of the Act as “the minimum price necessary to prevent the injury, or a recurrence of the injury” caused by the dumped or subsidised goods the subject of a dumping duty notice or a countervailing duty notice. The NIP is ordinarily determined by having regard to the Australian industry’s selling prices from a period where the industry was not affected by dumping.

5.1.2 Lesser Duty Rule

The calculation of the NIP is relevant for the purposes of the lesser duty rule under the Dumping Duty Act.44

Where goods are subject to a dumping duty notice, the level of dumping duty imposed by the Assistant Minister cannot exceed the margin of dumping, but, where the NIP of the goods is less than the normal value of the goods, the Assistant Minister must also have regard to the desirability of fixing a lesser amount of duty.

5.1.3 The Commission’s preferred approach to establishing unsuppressed selling prices

The Commission generally derives the NIP by first establishing a price at which the Australian industry might reasonably sell its product in a market unaffected by dumping. This price is referred to as the unsuppressed selling price (USP).

The Commission’s preferred approach to establishing the USP is set out in chapter 23 of the Dumping and Subsidy Manual45 and observes the following hierarchy:

industry selling prices at a time unaffected by dumping;

constructed industry prices – industry cost to make and sell plus profit; or

selling prices of un-dumped imports.

Having calculated the unsuppressed selling price, the Commission then calculates a NIP by deducting the costs incurred in getting the goods from the export FOB point (or another point if appropriate) to the relevant level of trade in Australia. The deductions normally include overseas freight, insurance, into-store costs and amounts for importer expenses and profit.

5.1.4 The Commission’s Assessment

During the original investigation, the Commission determined the USP utilising Australian industry’s CTMS for the investigation period plus an amount for profit achieved by the Australian industry during the period of January to September 2008. The Commission chose January to September 2008 as the period to calculate profit because material injury, if any, to the Australian industry was negligible during that period. A separate USP was calculated by

44 Refer subsection 8(5B) of the Dumping Duty Act. 45 Available on the Commission’s website.

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finish and the NIP for each finish was then calculated by deducting amounts for post exportation costs.

For the purpose of this review, a weighted average USP for each finish (black, painted, galvanised) has been determined based on a weighted average of all Australian industry CTMS data during the review period plus an amount of profit achieved by Australian industry in the period of January to September 2008. This approach is consistent with the original investigation and Reviews 265, 266, 285, 419 and Continuation 379, which established a profit in a period unaffected by dumping. The Commission acknowledges that the profit figure is now ten years old. However, despite the Australian industry’s improved profitability occurring during the review period, the Commission has confirmed that dumping is still occurring that is affecting the market.

The USP for each finish has been weighted by the volume of exports of each finish by each exporter to calculate an all product USP specific to each exporter.

The NIP has been calculated to FOB delivery terms by deducting the USP amounts for:

importer profit;

importer expenses;

Australian customs duty, port charges, delivery commission, storage and handling; and

overseas freight and insurance.

In the context of this review, the sum of the ascertained export price and the dumping margin for each of the exporters currently subject to the notice was lower than the NIP and hence the NIP is not the operative measure for any exporters.

Details of the USP and NIP calculations are at Confidential Appendix 7.


The Commission received a submission from Orrcon, dated 30 April 2018,46 in relation to the methodology used in determining Atlantic’s dumping margin in SEF 445. The submission notes that the proposed USP determination is consistent with past HSS enquiries involving the review of applicable measures. Orrcon supports the Commission’s basis for determining a USP and NIP.

46 Refer to EPR 445, item 18.

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6 FINDINGS AND EFFECT OF THE REVIEW

6.1 Findings

The Commissioner has found that, in relation to exports of HSS to Australia from Thailand for all exporters generally, during the review period:

the ascertained export price has changed;

the ascertained normal value has changed; and

the ascertained NIP has changed.

6.2 Recommendations

6.2.1 Dumping duty proposed

The Commissioner recommends to the Assistant Minister that the dumping duty notice applying to exports of the goods from Thailand have effect as if different variable factors had been ascertained.

Consistent with the current form of anti-dumping measures, the Commissioner recommends that the duties be calculated in respect of any IDD that may become payable:

using the floor price method for exporters with a negative or zero dumping margin in the review period; and

using the ad valorem duty method for all other exporters.47

The table below lists the amounts of IDD that will apply.


The Commission received submissions from Orrcon and ATM, dated 30 April 2018 and 2 May 2018 respectively,48 in relation to the proposed dumping duties in SEF 445. The submissions raise the following issues:

inconsistent measures than with past HSS investigations and/or reviews;

Australian industry preference for combination method of measures; and

an implied preference for a floor price method only in specific circumstances.

47 Pursuant to subsection 5(2) of the Customs Tariff (Anti-Dumping) Regulation 2013. 48 Refer to EPR 445, items 18 and 19.

Exporter / Manufacturer Effective Rate of Duty Duty Method

Pacific Pipe Public Company Limited 5.6% Ad valorem

Sahathai Steel Pipe Public Company Limited 0% Floor Price

Thai Premium Pipe Co Ltd 0.7% Ad valorem

Atlantic Pipe Company Limited 0% Floor price

Uncooperative and all other exporters 8.7% Ad valorem

PUBLIC RECORD



Inconsistent measures than with past HSS investigations and/or reviews

Orrcon contends that the proposed method recommended to calculate the dumping duty is inconsistent with past investigations involving HSS exports to Australia.

Orrcon’s preference for a combination method to calculate the dumping duty

Orrcon, in its submission, states its preference for measures to be based on the combination method.


The details of ATM’s submissions with respect to proposed dumping duties specific to Thai Premium are discussed above at point 4.5.6.

Implied preference for a floor price method only in specific circumstances

ATM also suggests that it is implied that the Commission’s use of a floor price method may only be used where the dumping margin is either zero or negative, noting there is no legislative requirement for such constraint.


Inconsistent measures than with past HSS investigations and/or reviews

The duty method imposed as a result of the original investigation (INV 254) is outlined in section 2.2.1 of this report. The then Assistant Minister to the Minister for Industry and Science imposed measures in August 2015 calculated on the ad valorem method. In October 2016, as a result of an accelerated review application by Thai Premium, a floor price method of calculating the dumping duty was imposed for this exporter.

The methods recommended to calculate dumping duties with respect to HSS exported to Australia from Thailand in this review are consistent with the original investigation and subsequent accelerated review.

Orrcon’s preference for a combination method to calculate the dumping duty

Prior to June 2013, the only method available to the Minister for calculating the dumping duty was the combination duty method. The Customs Tariff (Anti-Dumping) Regulation 2013 (the Dumping Duty Regulation) provided additional methods to the Minister, and now include:

combination of fixed and variable duty method;

fixed duty method;

floor price duty method; and

ad valorem duty method.

PUBLIC RECORD


The Commission has published guidelines on the application of forms of dumping duties on its website.49 The policy guides both the Commission, in forming its recommendations to the Minister, and applicants, in preparing their applications or submissions to the Commission.

The form of dumping duty, all having the purpose of removing the injurious effects of dumping, will better suit the particular circumstances of some dumping cases more so than other forms of duty.

In determining the most appropriate form of measures, the Commission seeks to be consistent with the original investigation (INV 254). As noted in the report relating to the original investigation, HSS has various price points primarily for the different finishes. As stated in the guidelines published on the Commission’s website, the combination of fixed and variable method may not suit situations where there are many model types with different prices.

The Commission has made the assessment that the ad valorem method of duty calculation is the most appropriate method in calculating the dumping duty for exports of HSS from Thailand to Australia by Pacific Pipe and Thai Premium. The ad valorem method is also, in

the Commission’s opinion, the most appropriate method to calculate the relevant duty for the category of exporters ‘Uncooperative and all other’.

With respect to conducting a review of measures, where the Commission has determined there is no dumping, or a negative dumping margin for a specific exporter, the Commission finds it appropriate to use a floor price method of calculating a dumping duty. The Commission determined Saha Thai to have a negative dumping margin.

In determining the appropriate method to calculate a dumping duty for an exporter that has not yet exported HSS to Australia, in this case Atlantic, the Commission finds it appropriate to use a floor price method.

Implied preference for a floor price method only in specific circumstances

The Commission, as stated above, has no preference for a method of calculating a dumping duty in a general sense. The Commission, in line with published policy guidelines, prefers a flexible approach to determining a method of calculating dumping duties to best suit the circumstances of a particular case. The Commission agrees that there is no legislative constraint on applying the floor price method.

49 See ‘Guidelines on the application of forms of Dumping Duty’, November 2013, Anti-Dumping Commission, http://www.adcommission.gov.au/accessadsystem/investigations/Documents/Guidelineformsofdumpingduty-November2013.pdf

http://www.adcommission.gov.au/accessadsystem/investigations/Documents/Guidelineformsofdumpingduty-November2013.pdf

http://www.adcommission.gov.au/accessadsystem/investigations/Documents/Guidelineformsofdumpingduty-November2013.pdf

PUBLIC RECORD


7 RECOMMENDATIONS

7.1 Recommendations

The Commissioner recommends that the Assistant Minister declare:

in accordance with subsection 269ZDB(1)(a)(iii), with effect from the day following publication of the notice declaring the outcome of the review, and for the purposes of the Act and the Dumping Duty Act, the dumping duty notice is taken to have effect in relation to exports from Thailand have effect as if different variable factors had been ascertained.

The Commissioner recommends the Assistant Minister be satisfied that:

in accordance with subsection 269TAB(3), sufficient information is not available to enable the export price of HSS exported to Australia from Thailand by Atlantic to be ascertained under the subsection 269TAB(1); and

in accordance with subsection 269TAC(2)(a)(i), the normal value of certain models of HSS exported to Australia from Thailand by Saha Thai cannot be ascertained under subsection 269TAC(1) because of the absence, or low volume, of relevant sales of like goods in the domestic market.

The Commissioner recommends that the Assistant Minister determine:

in accordance with subsection 269TAB(2A)(b), that there is insufficient or unreliable information to ascertain the export price for Pacific Pipe due to a low volume of exports of those goods exported to Australia by Pacific Pipe, having regard to previous volumes of exports of those goods to Australia by that exporter, patterns of trade for like goods, and factors affecting patterns of trade for like goods that are not within the control of the exporter; and

in accordance with subsection 269TAC(2)(c), that the normal value of certain models of HSS exported from Thailand by Saha Thai is the sum of:

- the cost of production or manufacture of HSS in Thailand as set out in Confidential Appendix 2.2, and

- on the assumption that the certain models of HSS, instead of being exported, had been sold for home consumption in the ordinary course of trade in Thailand, the administrative, selling and general costs associated with the sale and profit on that sale as set out in Confidential Appendix 2.2

as adjusted in accordance with subsection 269TAC(9), as set out in section 4.4.4 of the report, to ensure that the normal value of the goods so ascertained is properly comparable to the export price of the goods;

in accordance with subsection 269TAB(3), export prices for ‘uncooperative and all other’ exporters from Thailand subject to the anti-dumping measures, having regard to all relevant information;

PUBLIC RECORD


in accordance with subsection 269TAC(6), normal values for ‘uncooperative and all other’ exporters from Thailand subject to the anti-dumping measures, having regard to all relevant information;

pursuant to subsection 8(5) of the Dumping Duty Act, that the interim dumping duty payable on HSS exported to Australia from Thailand by:

- Saha Thai and Atlantic is an amount to be worked out in accordance with the floor price method pursuant to subsections 5(4) and (5) of the Dumping Duty Regulation; and

- all other exporters, including Pacific Pipe and Thai Premium, is an amount to be worked out in accordance with the ad valorem method pursuant to subsection 5(7) of the Dumping Duty Regulation.

The Commissioner recommends the Assistant Minister not to have regard to:

in accordance with subsection 8(5B) of the Dumping Duty Act, in relation to HSS exported to Australia from Thailand, the desirability of specifying a method such that the sum of amounts outlined in subsections 8(5B)(c) and (d) of the Dumping Duty Act do not exceed the non-injurious price in light of the findings in this report that the non-injurious price is greater than the normal value.

PUBLIC RECORD


8 APPENDICES AND ATTACHMENTS

Confidential Appendix 1.1 – 1.5 Pacific Pipe calculations of export price and normal value

Confidential Appendix 2.1 – 2.5 Saha Thai calculations of export price and normal value

Confidential Attachment 3 Thai Premium consideration under ss269TAB(2A)

Confidential Appendix 4.1 – 4.5 Thai Premium calculations of export price and normal value

Confidential Appendix 5.1 – 5.3 Atlantic calculation of normal value

Confidential Appendix 6 Uncooperative and all other exporters calculations

Confidential Appendix 7 NIP and USP calculations