DECISION

IMPLEMENTATION OF TEMPORARY ANTI-DUMPING ACTIONS

THE MINISTER OF INDUSTRY AND TRADE

Pursuant to Ordinance on Anti-dumping No. 20/2004/PL-UBTVQH11 dated April 29, 2004 of Standing Committee of the National Assembly on anti-dumping;

Pursuant to the Government's Decree No. 90/2005/NĐ-CP dated July 11, 2005 providing guidelines for the Ordinance on Anti-dumping;

Pursuant to the Government's Decree No. 95/2012/NĐ-CP dated November 12, 2012, defining the functions, tasks, powers and organizational structure of the Ministry of Industry and Trade;

At the request of the Director of Vietnam Competition Authority,

DECISION:

Article 1. Temporary anti-dumping actions shall be applied to plated steel imported into Vietnam bearing the following HS codes:7210.41.11; 7210.41.12; 7210.41.19; 7210.49.11; 7210.49.12; 7210.49.13; 7210.49.19; 7210.50.00; 7210.61.11; 7210.61.12; 7210.61.19; 7210.69.11; 7210.69.12; 7210.69.19; 7210.90.10; 7210.90.90; 7212.30.10; 7212.30.20; 7212.30.91; 7212.30.99; 7212.50.11; 7212.50.12; 7212.50.19; 7212.50.21 7212.50.22; 7212.50.29; 7212.50.91; 7212.50.92; 7212.50.99; 7212.60.10; 7212.60.20; 7212.60.90; 7225.92.90; 7226.99.11; 7226.99.91 from the People’s Republic of China (including Hong Kong) and Korea (case AD02). Details are provided in the Announcement enclosed herewith.

Article 2. Procedures for implementation of temporary anti-dumping actions shall comply with regulations of law on anti-dumping.

Article 3. This Decision comes into force after 15 days from the day on which it is signed.

Article 4. The Director of Vietnam Competition Authority, heads of units and relevant parties are responsible for the implementation of this Decision.

ANNOUNCEMENT

OF TEMPORARY ANTI-DUMPING ACTIONS
(Enclosed with Decision No. 3584/QĐ-BCT dated September 01, 2016 of the Minister of Industry and Trade)

Pursuant to Ordinance on Anti-dumping No. 20/2004/PL-UBTVQH11 and the Government's Decree No. 90/2005/NĐ-CP the Ministry of Industry and Trade hereby announce application of temporary anti-dumping actions to plated steel imported from the People’s Republic of China (including Hong Kong) and Korea (Case AD02).

1. Basic information

On March 03, 2016, the Ministry of Industry and Trade issued Decision No. 818/QĐ-BCT on investigation into application of anti-dumping actions to plated steel imported into Vietnam from China (including Hong Kong) and Korea.

On May 23, 2016, the Ministry of Industry and Trade issued Decision No. 2003/QĐ-BCT to extend the deadline for giving the preliminary determinations on the aforementioned affair (to August 03, 2016). On August 04, 2016, the Vietnam Competition Authority (the investigating authority) sent the draft preliminary determinations to relevant parties for comments.

In consideration of comments about the draft preliminary determinations, the investigating authority has completed the preliminary determinations, which is the basis for application of temporary anti-dumping actions.

2. Requesting party

The party that requests application of anti-dumping actions consists of the following four Vietnamese plated steel producers:

a) China Steel Sumikin Vietnam JSC (CSVC)

Address: My Xuan A2 Industrial Park, My Xuan hamlet, Tan Thanh district, Ba Ria – Vung Tau province, Vietnam

b. Southern Steel Sheet Co. Ltd (SSSC)

Address: Road 9, Bien Hoa I Industrial Park, Dong Nai province, Vietnam

c. Nam Kim Steel JSC

Address: N1 avenue, An Thanh Manufacturing Zone, Thuan An district, Binh Duong province, Vietnam

d. Ton Dong A Corporation

Address: No. 5, Road 5, Song Than Industrial Park, Di An ward, Di An town, Binh Duong province

3. Imports on which anti-dumping duty is imposed

3.1. Name: Plated steel

3.2. Categories: The subject merchandise includes flat-rolled carbonate steel, in rolls and not in rolls, containing by weight 0.6% or more of carbon, coated or plated with anti-corrosion metal such as zinc or aluminum or ferrous alloy using any method for coating ferrous alloy with zinc, regardless of thickness and width.

3.3. HS codes according to current Import Classification Nomenclature

HS codes of products on which anti-dumping duty is imposed  when they are imported into Vietnam 7210.41.11; 7210.41.12; 7210.41.19; 7210.49.11; 7210.49.12; 7210.49.13; 7210.49.19; 7210.50.00; 7210.61.11; 7210.61.12; 7210.61.19; 7210.69.11; 7210.69.12; 7210.69.19; 7210.90.10; 7210.90.90; 7212.30.10; 7212.30.20; 7212.30.91; 7212.30.99; 7212.50.11; 7212.50.12; 7212.50.19; 7212.50.21 7212.50.22; 7212.50.29; 7212.50.91; 7212.50.92; 7212.50.99; 7212.60.10; 7212.60.20; 7212.60.90; 7225.92.90; 7226.99.11; 7226.99.91 (totally 35 HS codes).

3.4. Basic characteristics: plated steel, coated with metal, able to resist corrosion with great adhesion and malleability. The anti-corrosion ability and other useful abilities of steel are enhanced by an appropriate ratio by weight of carbon and other elements.

3.5. Primary uses: plated steel is used as building materials, for manufacture of automobile parts, partitions, fridge back-frames, computer chassis, ventilation ducts, air conditioner backplates, glazed metal, pipes, lashing belts, furniture, doors, sliders, etc. Plated steel can also be used as background material for pre-painted galvanised iron (PPGI) Plated steel can be used in various circumstances depending on clients’ quality requirement, physical properties, class and uses of products.

4. Temporary anti-dumping duty

According to the preliminary determinations given by the investigating authority, the Ministry of Industry and Trade hereby imposes temporary anti-dumping duty on foreign producers/exporters as follows:

4.1. Regarding goods originating in China (including Hong Kong)

4.1.1. Duty rates applied to cooperative producers/exporters

4.1.2. Anti-dumping duty rate applied to other producers/exporters: 38.34%

4.2. Regarding goods originating in Korea

4.2.1. Duty rates applied to cooperative producers/exporters

4.2.2. Anti-dumping duty rate applied to other producers/exporters: 19.00%

In order to be eligible for anti-dumping duty rates applied to cooperative producers/exporters, the importer shall submit the following documents while following customs procedures:

- A commercial contract on which the exporter is one of the aforementioned producers/exporters or trade companies;

- The Mill-test Certificate or similar documents showing that the producer is one of the aforementioned producers/exporters;

- A Certificate of Origin showing that goods originate in China (including Hong Kong) or Korea.

5. Time limit for implementation of temporary anti-dumping actions

The temporary anti-dumping action comes into force after 15 days from the day on which the Ministry of Industry and Trade issues the Decision on application of temporary anti-dumping action, which is September 16, 2016. The temporary anti-dumping action shall be effective until January 13, 2017 inclusive, which is 120 days. The temporary anti-dumping action shall be lifted when the Minister of Industry and Trade issues a decision on official anti-dumping action.

Where the final decision of the Minister of Industry and Trade shows that the application of an anti-dumping action is unnecessary or the final anti-dumping duty is lower that the temporary anti-dumping duty, the tax difference shall be refunded to taxpayers as prescribed by law. Where the final anti-dumping duty is higher than the temporary anti-dumping duty, taxpayers are not required to pay the tax difference.

6. Establishments to which temporary anti-dumping action is applied

According to information provided by relevant parties and the preliminary determinations, the investigating authority determines that:

- The subject merchandise is dumped into Vietnam’s market from the subject countries with determined dumping margins;

- The domestic manufacturing has been materially injured;

- There is causality between the dumping and material injury to by domestic manufacturing.

The preliminary determinations have been sent by the investigating authority to relevant parties as prescribed by law. The summary of the preliminary determinations is provided in Appendix 1 enclosed herewith.

7. Subsequent procedures

After the temporary anti-dumping action comes into force, the General Department of Customs shall apply anti-dumping duty to the subject merchandise from producers/exporters in subject countries/territories. The specific anti-dumping duty rates are specified in Section 4 of this document.

In the next phase of investigation, the investigating authority shall visit the cooperative enterprises to verify the information they provided as the basis for recalculating the dumping margins. The visit plan and schedule shall be informed to each enterprise by the investigating authority within a reasonable time frame.

After the visit, the investigating authority shall hold a public hearing with relevant parties in order for all parties to comments. the Information about the public hearing shall be sent to relevant parties and posted on www.vca.gov.vn or www.qlct.gov.vn by the investigating authority.

After the end of the public hearing, the investigating authority shall send the draft preliminary determinations to relevant parties for comments.

The official determinations given by the investigating authority, comments of relevant parties and the Anti-dumping and Countervailing Council shall be the basis for the Minister of Industry and Trade to issue an official decision.

8. Contact:

Information about the decision on application of temporary anti-dumping action is posted on www.moit.gov.vn and www.vca.gov.vn or www.qlct.gov.vn.

Mailing address:

Address: No. 25, Ngo Quyen street, Hoan Kiem district, Hanoi, Vietnam

Tel: (+84 4) 222.05002 (extension number: 1039) or (+84 4) 222.05018

Investigator in charge:

Nguyen Thi Nguyet Nga: [email protected]

Vu Quynh Giao: [email protected]

APPENDIX 1

ANNOUNCEMENT OF TEMPORARY ANTI-DUMPING ACTION
(Enclosed with Decision No. 3584/QĐ-BCT dated September 01, 2016 of the Minister of Industry and Trade)

SUMMARY OF PRELIMINARY DETERMINATIONS[1]

I. Domestic manufacturing

On March 18, 2016, the investigating authority sent the questionnaires to producers of similar products. Upon expiration of the deadline for responding, the investigating authority received 07 responses from the following domestic producers:

China Steel Sumikin Vietnam JSC (CSVC)

Ton Dong A Corporation

Southern Steel Sheet Co. Ltd (SSSC)

Nam Kim Steel JSC

Hoa Sen Group

Dai Thien Loc Corporation

Chinh Dai Ltd.

Pursuant to Clause 5 Article 2 of the Ordinance on Anti-dumping: “Domestic manufacturing is a collection of domestic producers or representative thereof whose volume, quantity or value of exports makes up a substantial portion of the total volume, quantity or value of similar domestic products …”.

Pursuant to Article 4 of Decree No. 90/2005/NĐ-CP: “A substantial portion means at least 50% of the total volume, quantity or value of similar domestic products”.

In this case, the quantity of similar products of the aforementioned domestic producers is 84.19%, which satisfy the criterion for domestic manufacturing.

II. Imports and impacts thereof

1. Total import volume and inconsiderable import volume

Table 1: Import volume of the subject merchandise in the period of investigation (POI)

Source: General Department of Customs

Chart 1: Import volume from 02 subject countries

Unit: Tonne

According to this chart, the volume of imports from both subject countries/territories was 3% higher than total volume of similar imports in POI.  Therefore, both of them are not eligible for termination of investigation specified in Clause 4(a) Article 2 and Clause 2(c) Article 19 of the Ordinance on Anti-dumping.

2. Analysis of absolute increase in import volume

Table 2: Import volume of and ratio of the subject merchandise

Source: General Department of Customs

According to the data provided by the General Department of Customs, the total volume of imports from the subject countries in POI is 865,851 tonnes, which increases by 220% YoY (compared to (270,279 tonnes) and is highest over the last 04 years.

The volume of imports from the two subject countries has increased by more than 40 times over 04 years, from 21,498 tonnes in POI-3 to 865,851 tonnes in POI. In the period from POI-3 to POI, the import ratio from the two subject countries also increases from 62% to 95% of total imports into Vietnam.

According to the data provided by the General Department of Customs and the analysis above, the investigating authority finds an absolute increase in total import volume of the subject merchandise from subject countries into Vietnam in POI.

3. Analysis of relative increase in import volume

Table 3: Import volumes and domestic sales

Source: Domestic producers and General Department of Customs

Chart 2: Comparison between increase in import volumes and domestic sales

Blue: Domestic sales
Orange: Import volumes from subjects countries/territories

Source: Domestic producers and General Department of Customs

According to the table and chart above, during POI the increase in volumes of imports from the two subject countries is approximately 220%, which is 3 times the increase in total domestic sales (62%). This shows the pressure on similar domestic products.

In POI, the increase in import volume is 158% higher than increase in domestic sales. Therefore, the investigating authority determines that there is a relative increase in import volume compared to domestic sales in POI.

4. Impacts of imports on pricing

To analyze the impacts of imports on pricing, the investigating authority calculated selling prices for imports in Vietnam’s market and selling prices for similar domestic products at the same level of trade. To be specific:

Selling prices of imports are calculated according to the average import price (inclusive of import duty) according to the data provided by the General Department of Customs plus (+) importation cost and reasonable profits provided by importers, including:

- Delivery cost;

- Storage cost;

- Customs cost.

Table 4: Average prices for imports

Unit: Index 100

Source: Domestic producers and General Department of Customs

Selling prices for similar domestic products are average prices set by domestic producers

Table 5: Selling prices set by domestic producers

Unit: Index 100

Source: Domestic producers

4.1. Price depression

Table 6: Price depression

Unit: Index 100

Source: Investigating authority

Over 3 years before POI, selling prices for imports had a tendency to be stable over the years. Among them, average selling prices for imports in POI-2 and POI-2 were lower than those for similar domestic products. However, in POI, the selling price for imports drastically dropped to more than half of that in POI-3.

Facing the tendency for selling prices for imports to drastically drop in POI, domestic producers had to reduce their prices by approximately 30% compared to those in POI-3. This shows how imports depress prices for domestic products.

Chart 3: Comparison between selling prices for domestic products and imports

Blue continuous line: Selling price for imports
Orange dotted line: Selling price for domestic products

Source: General Department of Customs, domestic producers and importers

4.2: Price suppression

Table 7: Comparison between production cost and selling prices for domestic products

Unit: Index 100

Source: Domestic producers

According to the above table, during the first two years of the period of investigation, the production cost is 20% - 30% lower than the selling price. This means with stable costs and prices, domestic producers still have profit to sustain their production.

However, they suddenly changed in POI-1 and POI when production cost was always higher than selling prices of domestic products. Especially in POI, the production cost is 20% - 30% higher than the selling price.

In POI, the production cost reduced by 5% - 15%. However, to compete with domestic products, the selling price dropped nearly by 50%. Therefore, the investigating authority finds price suppression effect on domestic products.

Chart 4: Comparison between production cost and selling prices for domestic products

Blue continuous line: Production cost
Orange dotted line: Selling price for domestic products

Source: Domestic producers

II. Indicators for assessment of injury to domestic manufacturing

1. Production and capacity of domestic producers

1.1. Domestic production

Table 8. Domestic production

Unit: Index 100

Source: Domestic producers

Chart 5: Increase in domestic production and import volume from the two subject countries

Blue continuous line: Increase/decrease rate of domestic production (%)
Orange dotted line: Increase/decrease rate of import volume from subject countries (%)

Source: Domestic producers

Over the period from POI-3 to POI, the domestic production of plated steel increased. In POI-2, the production increased by 49.16% compared to that in POI-3. In POI-1, the production increased by 44.89% compared to that in POI-2. In POI, the production increased by 43.29% compared to that in POI-1.

However, the increase in domestic production failed to keep pace with the rapid increase in import volume from the two subject countries. The increase in import volume from the two subject countries is 220.35% compared to POI-1, much higher than the 43.29% increase in domestic production.

1.2. Utilized of domestic producers

Table 9. Designed capacity and utilized capacity of domestic producers

Unit: Index 100

Source: Domestic producers

Over the period from POI-3 to POI, the total designed capacity of domestic producers relatively increased by 17.35%, 34.80% and 24.27% respectively.

The utilized capacity increased by 100, 127, 107 and 115 respectively (Index 100). These figures show no injury to domestic manufacturing.

2. Sales of domestic products

Table 10. Sales of domestic products

Unit: Index

Source: Domestic producers

Chart 6: Sales of domestic products and imports from the two subject countries

Blue dotted line: Sales of domestic products (tonne)
Orange continuous line: Import volume from the two subject countries (tonne)

Source: General Department of Customs, domestic producers and VSA

The total sales of domestic products over the period from POI-3 to POI were 100, 145, 236 and 307 respectively (index 100).

However, the increase in sales of domestic products failed to keep up with the rapid increase in import volume from the two subject countries. Over the period from POI-3 to POI, the sales of domestic products increased by 45.00%, 63.04% and 30.07% respectively, much lower than the 745.10%, 48.77% and 220.35% increase in import volume from the two subject countries.

3. Domestic stock

Table 11. Domestic stock

Unit: Index 100

Source: Domestic producers

The domestic stock kept increasing over the period from POI-3 to POI. POI-1 marks a rapid increase in stock (from 130 in POI-2 to 223 in POI-1). In POI, stock kept increasing to 249, which is 2.5 times the stock in POI-3.

Chart 7. Domestic stock

Source: Domestic producers

4. Domestic market share

Table 12. Domestic plated steel market share

Unit: Index 100

Source: General Department of Customs, domestic producers and VSA

Over the period from POI-3 to POI, the total domestic sales increased by 7 times. However, the domestic market share has significantly changed each year. To be specific, the market share of domestic producers gradually decreases from 100 (POI-3) to 43.67 (POI). Meanwhile, the market share of imports from the two subject countries increased from 100 (POI-3) to 572 (POI). Compared to POI-1, the market share of imports from the two subject countries rapidly increased while market shares of other sectors sharply dropped.

5. Revenue and profit

Table 13: Revenue and profit from sales of domestic products

Unit: Index 100

Source: Domestic producers

Over the period from POI-3 to POI, the revenue from domestic sales experienced significant growth. In POI-1, the revenue of this industry increased by 35% compared to the previous year. In POI, it only increased by more than 10%.

Though the sales of domestic products increased by more than 30% in POI but revenue only increased by 10.49%. This means revenue is negatively affected by rapid decrease in selling prices.

Chart 8: Revenue and profit from sales of domestic products

Blue continuous line: Revenue
Red dotted line: Profit

Source: Domestic producers

In the opposite to the growth in revenue, the profit of this industry clearly dropped from 90.18 in POI to -26.02 in POI-1 and -254  in POI. Besides, the return on sales ratio had a tendency to rapidly drop during the period of investigation.

6. Investment

Table 14. Investment by domestic producers

Unit: Index 100

Source: Domestic producers

Table 15: Return on assets

Unit: Index 100

Source: Domestic producers

In POI-1 and POI, investment by domestic producers in plated steel rapidly increased because of expectation of growing demand.

In reality, the ROA keeps dropping from 66.45% to -21.84% in 4 years. This means investment was not as effective as expected.

Chart 9: Return on assets

Source: Domestic producers

7. Labor

Labor in POI-2 slightly increased compared to POI-3 and increased in POI-1 and POI. The change in labor in this period is smaller than the increase in capacity. This shows that domestic producers downsized to reduce costs.

Chart 10. Direct labor of domestic producers

Source: Domestic producers

Table 16. Labor of domestic producers

Unit: Index 100

Chart 11: Increase/decrease in quantity of workers compared to production and capacity for production of similar domestic products

Orange: Capacity
Black and white: Production
Blue continuous line: Direct labor

Source: Domestic producers

The chart above shows that in POI-1, the quantity of workers increased by 10.55% compared to POI-2. However, this increase is still lower than the increase in capacity (34.8%) and production (41.72%).  This phenomenon happened again in POI.

8. Assessment of injury to domestic manufacturing

By assessing the indicators above, the investigating authority determines that:

Import of the subject merchandise: total import volume from the subject countries in POI was 865,851 tonnes, which increased by 220% YoY ((270,279 tonnes) and is the highest import volume over the last 4 years. Besides, the investigating authority also finds a relative increase in import volume compared to domestic sales.

Price impact: Through analyses in 4.2.3.1 and 4.3.2.2, imports are found depressing and suppressing prices for similar domestic products, especially in POI-1 and POI.

Production: Over the period from POI-3 to POI, the domestic production kept increasing. However, the increase rate is dropping and is much smaller than the rate of increase in import volume from the two subject countries.

Both designed capacity and utilized capacity indicators increased during the period of investigation. This indicator does not indicate injury to domestic manufacturing.

The sales of domestic products experienced an increase during the period of investigation. However, the increase rate is still much smaller than the rate of increase in import volume from the two subject countries.

The stock kept rising throughout the period of investigation. Especially in POI, the stock rose by 2.5 times that in POI-3.

The market share of domestic producers continuously decreased over the period from POI-3 to POI while the market share of imports from the two subject countries rise sharply and continuously. The volume of imports from other countries dropped over the period from POI-3 to POI.

Over the period from POI-3 to POI, the revenue from domestic manufacturing stilly achieved significant growth. However, the profit remarkably dropt, especially in POI-1 and POI when big loss was incurred.

In POI-1 and POI, return on assets was negative, as opposed to the period from POI-3 to POI-2.

The number of workers in POI-1 and POI experienced an insignificant increase.

In consideration of the aforesaid indicators, pursuant to Clause 2 Article 12 of the Ordinance on Anti-dumping and Clause 2 Article 24 of Decree 90, the investigating authority determines that domestic manufacturing has been materially injured.

III. CAUSALITY

Pursuant to Article 3 of the Anti-dumping Agreement and Article 29 of Decree 90, apart from dumping acts and material injury to domestic manufacturing, the investigating authority also consider other factors to explain the reason for injury or threat of injury to domestic manufacturing.

1. Non-dumping import volume

Table 17: Volume of imports from other countries

Source: General Department of Customs

In POI, the ratio of imports from other sources was 4.52%; that from the two subject country was 95.48%. Besides, since POI-3, the total import of subject countries keep rapidly rising while imports from other sources continuously fluctuated and dropped from 37.57% in POI-3 to 4.52% in POI. Therefore, imports from other countries are not the cause of injury to domestic manufacturing.

2. Domestic consumption

The total domestic consumption over the period from POI-3 to POI keep increasing from [*****] tonnes to [*****] (see Chart 12). This shows that material injury to domestic manufacturing is not due to the change or decrease in total consumption.

Chart 12: Domestic consumption

Source: Relevant parties

3. Productivity

Table 18. Productivity of domestic producers

Unit: Index 100

Source: Domestic producers

The increase in productivity indicates productivity in POI rose by nearly 159% compared to POI-3 and kept remarkably rose over the period from POI-3 to POI. This means productivity is not the cause of material injury to domestic manufacturing.

4. Technological development

Nowadays, technologies and production lines of domestic producers meet all production demands. There is almost no remarkable difference between technologies from subject countries and those of domestic manufactures.

5. Trade restriction against domestic producers

Over the period from POI-3 to POI, the investigating authority did not find any act of trade restriction against domestic producers as well as illegal competition between domestic producers that might have read to such material injury to domestic manufacturing.

6. Export by domestic producers

Table 19. Export volume and revenue from export by domestic producers

Unit: Index 100

Source: Domestic producers

Over the period of investigation, the volume of export by domestic producers increased by 29.43% YoY. Besides, the revenue from export in POI also increased by 20% compared to POI-1. Therefore, export is not the cause of injury to domestic manufacturing.

7. Assessment of causality

In consideration of other factors that might cause or threaten to cause material injury to domestic manufacturing, the investigating authority finds that:

(i) import volume from non-subject countries did not increase,

(ii) domestic consumption increased in POI,

(iii) Productivity increased during the period of investigation,

(iv) there is not remarkable difference between production technologies of domestic and foreign producers.

(iv) no trade restrictions between domestic and imported merchandise, and

(v) the volume of export by domestic producers increased during the period of investigation.

For that reasons, the investigating authority did not have the grounds for determining that material injury to domestic manufacturing is caused by factors other than the investigated imports. The investigating authority determines that there is causality between dumping from the two subject countries and material injury to domestic manufacturing.