CASE NO. (OI) 24/2019– Preliminary Findings in the Anti-Dumping Original Investigation concerning imports of Dimethyl Formamide (DMF) originating in or exported from China PR and Saudi Arabia.
MINISTRY OF COMMERCE AND INDUSTRY
(Department of Commerce)
(DIRECTORATE GENERAL OF TRADE REMEDIES)
NOTIFICATION
New Delhi, the 18th August, 2020
PRELIMINARY FINDINGS
CASE NO. (OI) 24/2019
Sub: Preliminary Findings in the Anti-Dumping Original Investigation concerning imports of “Dimethyl Formamide” (DMF) originating in or exported from China PR and Saudi Arabia.
A. F. No. 6/37/2019-DGTR.— A. BACKGROUND OF THE CASE
1. M/s. Balaji Amines Ltd (hereinafter also referred to as “the Applicant”) has filed an application before the Designated Authority (hereinafter also referred to as “the Authority”) on behalf of the domestic industry, in accordance with the Customs Tariff Act, 1975 as amended from time to time (hereinafter also referred to as the “Act”) and the Customs Tariff (Identification, Assessment and Collection of AntiDumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 as amended from time to time (hereinafter also referred to as the “Rules”) for Original Investigation of Anti-dumping Duty concerning imports of “Dimethyl Formamide” (DMF) (hereinafter also referred to as “subject goods” or “product under consideration” or “PUC”), originating in or exported from Saudi Arabia and China PR (hereinafter also referred to as the “subject countries”).
2. The Authority, on the basis of prima facie evidence submitted by the Applicant, issued a public notice vide Notification F. No. 6/37/2019-DGTR dated 14th January, 2020, published in the Gazette of India Extraordinary, initiating the subject investigation in accordance with Section 9A of the Act read with Rule 5 of the Rules to determine existence, degree and effect of the alleged dumping of the subject goods, originating in or exported from the subject countries, and to recommend the amount of antidumping duty, which if levied, would be adequate to remove the alleged injury to the Domestic Industry.
B. PROCEDURE
3. The procedure described herein below has been followed with regard to the subject investigation:
a) The Authority notified the Embassy of the Subject Country in India about the receipt of the present anti-dumping application before proceeding to initiate the investigation in accordance with Sub-Rule (5) of Rule 5 supra.
b) The Authority issued a public notice dated 14th January, 2020 published in the Gazette of India Extraordinary, initiating anti-dumping investigation concerning imports of the subject goods from the subject country.
c) The Authority sent a copy of the initiation notification to the Embassy of the subject country in India, known producers/exporters from the subject country, known importers/users and the domestic industry as well as other domestic producers as per the addresses made available by the Applicant and requested them to make their views known, in writing, within the prescribed time limit.
d) The Authority provided a copy of the non-confidential version of the application to the known producers/exporters and to the Embassy of the subject country in India in accordance with Rule 6(3) of the Rules.
e) The Embassy of the subject country in India was also requested to advise the exporters/producers from its country to respond to the questionnaire within the prescribed time limit. A copy of the letter and questionnaire sent to the producers/exporters was also sent to them along with the names and addresses of the known producers/exporters from the subject country.
f) The Authority sent Exporter’s questionnaires to the following known producers/exporters in the subject country in accordance with Rule 6(4) of the Rules:
Saudi Arabia
i. Methanol Chemicals Company
ii. Fahad Thnayan AI Thnayan and PA
iii. Barwil Agencies Ltd
China PR
iv. Shandong Hualu-Hengsheng Chemical Co Ltd
v. Hualu Holding Group Co., Ltd
vi. Zibo Luzhong Chemical & Light Industry Co., Ltd
vii. Anhui Huaihua Fine Chemicals Co., Ltd
viii. Zhejiang Jiangshan Chemical Co., Ltd
g) In response, the following exporters/producers from the subject countries filed exporter’s questionnaire response;
i. Methanol Chemicals Company, Saudi Arabia,
ii. M/s Luxi Chemical Group Co. Ltd., Chlor-Alkali Chemical Branch, China, now known
as M/s Liaocheng Luxi Mehtylamine Chemical Co., Ltd.
iii. M/s Shandong Liaocheng Luxi New Material Sale Co., Ltd., China and
iv. M/s Liaocheng Ruijin (Hong Kong) Co., Limited.
h) The Authority sent Importer’s Questionnaire to the following known importers/users of subject goods in India calling for necessary information in accordance with Rule 6(4) of the Rules:
i. Orchid Chemicals and Pharmaceuticals Ltd
ii. Symed Labs Ltd
iii. Matrix Laboratories Ltd
iv. Dorf-Ketal Chemicals India Pvt Ltd
v. Harman Finochem Ltd
vi. Ramkamal Chemicals Pvt Ltd
vii. Piramal Enterprises Ltd
viii. Matrix Laboratories Ltd
ix. AMI Organics Pvt Ltd
x. Pasupati Acrylon Limited
xi. Indian Acrylics Ltd
xii. Wockhardt Ltd
xiii. Yogesh Dyestuff Products Pvt Ltd
xiv. Sun Pharmaceutical Industries Ltd
xv. Lupin Ltd
xvi. Aurobindo Pharma Ltd.
i) In response, the following importers/users have responded and filed importer’s questionnaire;
i. Ramniklal S Gosalia & Co
ii. Aurobindo Pharma Ltd
iii. Pasupati Acrylon Limited
iv. Indian Acrylics Ltd
j) The Authority, upon request, granted extension, to file Exporter Questionnaire Response (EQR) by 02.03.2020, which was placed in the public domain through DGTR’s website.
k) The Authority made available non-confidential version of the evidence presented/submissions made, in the form of a public file kept open for inspection by the interested parties.
l) Request was made to the Directorate General of Commercial Intelligence and Statistics (DGCI&S) to provide the transaction-wise details of imports of subject goods for the past three years, and the period of investigation, which was received by the Authority. The Authority has relied upon the DGCI&S data for computation of the volume of imports and its analysis after due examination of the transactions.
m) The Non-Injurious Price (NIP) has been determined based on the cost of production and cost to make & sell the subject goods in India based on the information furnished by the Domestic Industry on the basis of Generally Accepted Accounting Principles (GAAP) and Annexure III to the Rules so as to ascertain whether Anti-Dumping duty lower than the dumping margin would be sufficient to remove injury to the Domestic Industry.
n) The information/data submitted by the Applicant has been examined during desk study and relied upon for the purpose of preliminary findings, which will be verified at the appropriate stage from the original records of the Applicant.
o) The Period of Investigation for the purpose of the present anti-dumping investigation is from 1st January, 2019 to 30th September, 2019 (9 Months). The injury investigation period has however, been considered as the period from April 2016 – March 2017, April 2017 – March 2018, April 2018 – March 2019 and the POI.
p) ‘***’ in this preliminary findings represents information furnished on confidential basis and so considered by the Authority under the Rules.
q) The exchange rate adopted by the Authority for the subject investigation is US$ = Rs. 71.03.
C. PRODUCT UNDER CONSIDERATION AND LIKE ARTICLE
4. At the stage of initiation, the product under consideration was defined as:
“i) The product under consideration in the present investigation is Di Methyl Formamide and has also been referred as DMF.
ii) ‘Di Methyl Formamide ’, is a colourless, high boiling polar aprotic solvent with a characteristic odor. It is stable on heating and under its distillation temperature range and is freely miscible with water, alcohols, ethers, ketones, ester, carbon disulfide and chlorinated and aromatic hydrocarbons. The application and uses of the subject goods can be broadly categorized as follows;
a. As a solvent in pharmaceuticals manufacturing;
b. As a solvents in Acrylic Polymers manufacturing;
c. As a feedstock for synthesis of derivatives of DMF;
d. As a solvent in pesticides formulations
iii) The PUC is primarily declared under Customs subheading 29211110 at the time of imports. However, the subheading is indicative only and is not binding on the scope of the PUC since the chances of imports of PUC getting reported under other subheadings cannot be ruled our as claimed by the petitioner. It would not be appropriate to restrict the scope of PUC to customs subheading alone and what is relevant is the product description.
Submissions made by the Domestic Industry
5. The submissions made by the Domestic Industry with regard to product under consideration and like article are as follows:
i. The product under consideration in the present case is ‘Dimethyl Formamide’ (DMF) originating in or exported Saudi Arabia and China PR. Dimethyl Formamide is the organic compound with the formula C3H7NO or HCON(CH3)2 and bears the chemical nomenclature ‘N,NDIMETHYLFORMAMIDE’.
ii. ‘Dimethyl Formamide’, is a colorless, high boiling polar aprotic solvent with a characteristic odor. It is stable on heating and under its distillation temperature range and is freely miscible with water, alcohols, ethers,ketones, ester, carbon disulfide and chlorinated and aromatic hydrocarbons.
iii. The product under consideration is imported under Chapter 29 of the Customs Tariff Act, 1975 under customs sub-heading 29211110. The customs classification is indicative only and not binding on scope of the product under consideration.
iv. There is no difference in product produced by the Applicant and exported from the subject country.
Submissions made by the other interested parties
6. The submissions made by the exporters, importers, users and other interested parties with regard to product under consideration and like article, and considered relevant by the Authority, are as follows:
i. There is no difference of technical or physical characteristics for the PUC imported from country concerned with that produced in India. However, the landed price for the PUC imported from country concerned with that produced in India could be different.
ii. The product under consideration sold in subject countries’ domestic market, and the products exported to India are identical in physical and chemical characteristics.
iii. There are no known differences in the product domestically manufactured and product imported.
iv. The product under consideration is a single product, physically and chemically identical in all markets. The only difference is that the product is sold in bulk or in drums.
Examination of the Authority
7. The submissions made by the Domestic Industry with regard to the PUC related issues are examined and addressed hereunder.
8. The product under consideration for the purpose of present investigation is “Dimethyl Formamide (DMF)” originating in or exported from Saudi Arabia and China PR.
9. It is a colorless, high boiling polar aprotic solvent with a characteristic odor. It is stable on heating and under its distillation temperature range and is freely miscible with water, alcohols, ethers, ketones, ester, carbon disulfide and chlorinated and aromatic hydrocarbons. The PUC is used as a solvent in pharmaceuticals manufacturing, Acrylic Polymers manufacturer and pesticides formulations. It is used as a feedstock for synthesis of derivatives of DMF.
10. PUC is classifiable under Chapter 29 of the Customs Tariff Act, 1975 under sub-heading 2921 1110. However, the customs classification is indicative only and is in no way binding on the scope of the present investigation.”
11. It is also noted from the responses submitted by the opposing interested parties that there are no differences in the subject goods domestically manufactured and those which are imported. Based on the information available on record, it is noted that there is no known difference in the subject goods produced by the petitioner and the product under consideration produced and exported from the subject countries. The two products are comparable in terms of essential product characteristics such as physical & chemical characteristics, manufacturing process & technology, functions & uses, product specifications, pricing, distribution & marketing and tariff classification of the goods etc. The two are technically and commercially substitutable. Therefore, for the purpose of the present preliminary findings, the subject goods produced by the petitioner in India are found as ‘Like Article’ to the subject goods being imported from the subject countries under Rule 2 (d) of the AD Rules.
D. DOMESTIC INDUSTRY AND STANDING
Submissions made by the Domestic Industry
12. The submissions made by the Domestic Industry with regard to scope of Domestic Industry & standing so far are as follows;
a. The Applicant M/s. Balaji Amines Ltd is the sole producer of the subject goods in India and production by the Applicant constitutes 100% share of total Indian production of subject goods. The Applicant has not imported the product under consideration or is not related to exporters/importers of the subject goods. Thus, the Applicant fulfills the requirements of standing and also constitutes domestic industry as defined in Rule 2 (b) of the AD Rules.
b. It may be noted that M/s RCF Ltd was also a producer of subject goods, but it has not produced the subject goods for some time now.
Submission of other interested parties
13. No submissions have been made by other interested parties with regard to scope of domestic industry and its standing.
Examination of the Authority
14. Rule 2 (b) of the Rules defines the “domestic industry” as under:
“domestic industry” means the domestic producers as a whole engaged in the manufacture of the like article and any activity connected therewith or those whose collective output of the said article constitutes a major proportion of the total domestic production of that article except when such producers are related to the exporters or importers of the alleged dumped article or are themselves importers thereof in such case the term ‘domestic industry’ may be construed as referring to the rest of the producers”
15. It is noted that the application has been filed by M/s Balaji Amines Ltd. who has claimed to be the sole producer of subject goods in India. As per the petition, M/s Rashtriya Chemical & Fertilizers Ltd (RCF Ltd) was also a producer of subject goods. However, as provided in the petition, M/s RCF has not produced the subject goods for quite some time. It is also noted that M/s RCF Ltd has neither supported the petition nor opposed it.
16. M/s Balaji Amines Ltd. has not imported the PUC from the subject countries and is not related either to any exporter or producer of the PUC in the subject countries or any importer of the PUC in India.
17. No submissions have been made by other interested parties with regard to scope of domestic industry and its standing.
18. Accordingly, the Authority provisionally holds that for the purpose of this investigation, the Applicant satisfies the standing requirement and constitutes the domestic industry in terms of Rule 2(b) and Rule 5(3) of the Rules.
E. MISCELLANEOUS ISSUES
Submissions made by the Domestic Industry
19. Certain miscellaneous submissions put forth by the domestic industry at this stage is noted as follows:
i. The case requires immediate levy of preliminary measures as the domestic industry have been suffering financial losses during the POI and the trend is just continuing. The discussion of overall injury in the petition shows that the enormity of such injury is just increasing on all key parameters of injury.
ii. The losses are directly linked to the injury created by dumped imports and immediate reliefs are necessary in the form of interim measures so that the DI can sustain in manufacturing pending the investigation.
iii. The facts of the present case shows significant import of the subject goods from subject countries which has increased in absolute terms at aggravated level of dumping (55 to 60 %) and such targeted dumping need quick measures to arrest the impacts on the DI. In fact, the dumped imports held about 78% of the Indian demand and any fair share in demand to the DI can be ensured by imposition of anti-dumping duties only
iv. No anti-dumping duties on import of PUC at the end of a recent Anti-dumping investigation concerning the subject goods [F. No.6/37/2017-DGAD dated 23.10.2018] apparently been taken as a golden opportunity by the producers/exporters from subject countries to increase dumping in India and after the said findings, the vigor of dumping has sky rocketed.The DI has again come before the Authority but with a much aggravated situation of injury. If Anti dumping Duty is not levied at the earliest, there will be complete closure of the domestic industry and therefore, pray for immediate provisional measures pending detailed investigations and definitive measures by the Authority.
Submission of other interested parties
20. The submissions made by the opposing parties in their responses are as follows:
i. Imposition of anti-dumping duties shall impact the users/importers adversely.
ii. The users are against the imposition of anti-dumping duties.
iii. Imposition of anti dumping duties shall lead to monopolistic behaviour by the Applicant.
iv. The imposition of anti dumping duty will lead to an increase in the input cost for products at the end of users. Any increase in the input cost will make the product uncompetitive for tenders for exports. This will potentially lead to less of exports resulting in decline of Forex earning.
v. It is not possible for the company to switch to other sources for supply of product under investigation within a short duration of time. This is due to the fact the domestic industry in India has very limited capacity to supply the subject goods and the prices are not competitive as compared to the imported DMF.
Examination by the Authority
21. Submissions made by the interested parties and the Applicant with regard to miscellaneous issues, as mentioned above, have been examined below:
a) As regards the need for interim measures raised by the applicant, the Authority has taken note of the submissions made by the applicant and opposing interested parties so far in this investigation and has examined the same in accordance with the Rules and is addressed appropriately at relevant place in this provisional findings.
b) With regard to the apprehensions of the opposing parties that the anti-dumping duties shall lead to monopolistic behavior of the domestic industry and adversities to the users, it is noted that the any anti-dumping duty is intended to remove the injurious effects caused by such dumping and no duties beyond lower of the injury/dumping margin is recommended, if any found necessary. Anti-dumping duties per se will not restrict the availability of the goods to the users. Any gap in the supply of PUC against total demand in the country cannot justify dumping and consequent injury, if any.
F. NORMAL VALUE, EXPORT PRICE & DETERMINATION OF DUMPING MARGIN
Submissions made by the Domestic Industry
22. The following submissions have been made by the Domestic Industry:
a) China should be treated as a non-market economy and normal value in case of the subject countries should be determined in accordance with para-7 and 8 of Annexure I of the Rules. In terms of Para 8 in Annexure 1 to the Rules, it is presumed that the producers of the subject goods in China are operating under non-market economy conditions. Therefore, normal value of the subject goods in China PR has been estimated in terms of Para 7 of Annexure 1 to the Rules.
b) In view of the above, normal value has been determined for the subject country on the basis of cost of production in India, based on the cost of the domestic industry duly adjusted with selling, general and administrative expenses. This methodology has been considered by the Designated Authority in the earlier investigations against China PR.
c) Export price from subject country has been determined considering volume and value of imports for the proposed period of investigation as per transaction wise data collected from the DGCI&S. Adjustments have been made for freight, insurance, port expenses, and bank charges.
d) Considering the normal value and export price as discussed above, the dumping margin has been determined, details of which can be seen from the petition on record. The dumping margins from the subject country are above de minimis levels and significant.
Submissions by the other interested parties
23. The Authority sent questionnaires to the known producers/exporters from the subject countries, advising them to provide information in the form and manner prescribed by the Authority. The following producers/exporters have filed the prescribed questionnaire responses:
i. M/s Methanol Chemicals Company
ii. M/s Luxi Chemical Group Co. Ltd., Chlor-Alkali Chemical Branch, China now known as M/s Liaocheng Luxi Mehtylamine Chemical Co., Ltd.,
iii. M/s Shandong Liaocheng Luxi New Material Sale Co., Ltd., China and
iv. M/s Liaocheng Ruijin (Hong Kong) Co., Limited
24. No specific submissions on the normal value, export price and dumping margin aspects have been made by the opposing interested parties at this stage. However, the responses filed by the opposing parties have been taken into consideration for the determination of normal value, export price and dumping margin to the extent found relevant.
Examination by the Authority
Normal Value
25. Under Section 9A (1)(c), normal value in relation to an article means:
(i) the comparable price, in the ordinary course of trade, for the like article when meant for consumption in the exporting country or territory as determined in accordance with the rules made under sub-section (6); or
(ii) when there are no sales of the like article in the ordinary course of trade in the domestic market of the exporting country or territory, or when because of the particular market situation or low volume of the sales in the domestic market of the exporting country or territory, such sales do not permit a proper comparison, the normal value shall be either-
(a) comparable representative price of the like article when exported from the exporting country or territory or an appropriate third country as determined in accordance with the rules made under subsection (6); or
(b) the cost of production of the said article in the country of origin along with reasonable addition for administrative, selling and general costs, and for profits, as determined in accordance with the rules made under sub-section (6):
Provided that in the case of import of the article from a country other than the country of origin and where the article has been merely transshipped through the country of export or such article is not produced in the country of export or there is no comparable price in the country of export, the normal value shall be determined with reference to its price in the country of origin.
26. Article 15 of China’s Accession Protocol in WTO provides as follows: “Article VI of the GATT 1994, the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (“Anti-Dumping Agreement”) and the SCM Agreement shall apply in proceedings involving imports of Chinese origin into a WTO Member consistent with the following:
“(a) In determining price comparability under Article VI of the GATT 1994 and the Anti-Dumping Agreement, the importing WTO Member shall use either Chinese prices or costs for the industry under investigation or a methodology that is not based on a strict comparison with domestic prices or costs in China based on the following rules:
(i) If the producers under investigation can clearly show that market economy conditions prevail in the industry producing the like product with regard to the manufacture, production and sale of that product, the importing WTO Member shall use Chinese prices or costs for the industry under investigation in determining price comparability;
(ii) The importing WTO Member may use a methodology that is not based on a strict comparison with domestic prices or costs in China if the producers under investigation cannot clearly show that market economy conditions prevail in the industry producing the like product with regard to manufacture, production and sale of that product.
(b) In proceedings under Parts II, III and V of the SCM Agreement, when addressing subsidies described in Articles 14(a), 14(b), 14(c) and 14(d), relevant provisions of the SCM Agreement shall apply; however, if there are special difficulties in that application, the importing WTO Member may then use methodologies for identifying and measuring the subsidy benefit which take into account the possibility that prevailing terms and conditions in China may not always be available as appropriate benchmarks. In applying such methodologies, where practicable, the importing WTO Member should adjust such prevailing terms and conditions before considering the use of terms and conditions prevailing outside China.
(c) The importing WTO Member shall notify methodologies used in accordance with subparagraph (a) to the Committee on Anti-Dumping Practices and shall notify methodologies used in accordance with subparagraph (b) to the Committee on Subsidies and Countervailing Measures.
(d) Once China has established, under the national law of the importing WTO Member, that it is a market economy, the provisions of subparagraph (a) shall be terminated provided that the importing Member’s national law contains market economy criteria as of the date of accession. In any event, the provisions of subparagraph (a)(ii) shall expire 15 years after the date of accession. In addition, should China establish, pursuant to the national law of the importing WTO Member, that market economy conditions prevail in a particular industry or sector, the non-market economy provisions of subparagraph (a) shall no longer apply to that industry or sector.”
27. It is noted that while, the provision contained in Article 15 (a) (ii) have expired on 11.12.2016, the provision under Article 2.2.1.1 of WTO read with obligation under 15 (a) (i) of the Accession protocol require criterion stipulated in para 8 of the Annexure I of the India’s Rules to be satisfied through the information/data to be provided in the supplementary questionnaire on claiming the market economy status.
Determination of Normal Value and Export Price for all cooperating Producers and Exporters in China PR
Normal Value
28. At the stage of initiation, the Authority, after evaluating the options under Para 7 to Annexure I of the Rules, had prima facie concluded that options other than Constructed Normal Value are not feasible for the determination of Normal Value in this case. Upon initiation, the Authority advised the producers/exporters in China PR to respond to the notice of initiation and provide information relevant to determination of whether their data/information could be adopted for the purpose of normal value determination.
29. The Authority sent copies of market economy treatment/supplementary questionnaire to all the known producers/ exporters for providing relevant information in this regard. But none of the producers/exporters have claimed MET status. In view of this position as well as the fact that neither the petitioner nor any other interested parties have provided any information with regard to any of the provisos of Rule 7 of Annexue 1 of the Rules. The NV has therefore been constructed by adopting cost of production in India as normated with due adjustment for SGA expenses and a reasonable profit at the rate of 5% on cost of production in accordance with Para 6(8) of the Rules. The Normal value therefore proposed as US$ **** per MT for the purpose of preliminary findings.
Export Price
30. The Authority notes that M/s Luxi Chemical Group Co. Ltd., Chlor-Alkali Chemical Branch, China, now known as M/s Liaocheng Luxi Mehtylamine Chemical Co., Ltd., M/s Shandong Liaocheng Luxi New Material Sale Co., Ltd., China and M/s Liaocheng Ruijin (Hong Kong) Co. limited, the related entities, have responded and have provided the information to determine the Net Export Price (NEP). The expenses on account of Ocean freight, Marine Insurance and others have been reduced from their CIF export prices. The net ex-factory export price, after adjustment of the above expenses is claimed as US$ **** per MT. The same has been adopted for the purpose of preliminary findings, pending further verification.
Determination of Normal Value and Export Price for all non cooperating Producers and Exporters in China PR
31. The Authority notes that no other producer/ exporter from China PR has responded to the exporter’ questionnaire. Therefore, the normal value as determined for cooperative producers/ exporters as stated above on the basis of facts available as per Rule 6(8) has been adopted for non cooperative producers/exporters as well.
Export Price for non cooperating producers/exporters from China PR
32. The Authority notes that no other producer/exporter from China PR has responded to the Authority in the present investigation. For all the non-cooperative producers/exporters in China PR, the Authority has determined net export price adopting the least export price from the responses filed by cooperative producers/exporters, that is, M/s Luxi Chemical Group Co. Ltd., Chlor-Alkali Chemical Branch, China, now known as M/s Liaocheng Luxi Mehtylamine Chemical Co., Ltd., M/s Shandong Liaocheng Luxi New Material Sale Co., Ltd., China and M/s Liaocheng Ruijin (Hong Kong) Co. limited. The net export price of US$ **** Per MT has been adopted for the purpose of preliminary findings.
Determination of Normal Value and Export Price for cooperating producers and exporters in Saudi Arabia
Normal value
33. It is noted that Methanol Chemicals Company from Saudi Arabia has filed the EQ Response in the present case to claim individual margins. It was first seen, whether the domestic sales of the subject goods by the responding producer/ exporter in their domestic market were representative or not and viable for permitting determination of normal value on the basis of their domestic selling prices and whether the ordinary course of trade test was satisfied as per the data provided by the Company. The Company has provided transaction-wise details of the sales of the like article in their home market. It has been found that the domestic sales of the subject goods by the responding producer/ exporter in their domestic market were not representative as it was lower than 5% of total exports of PUC to India. Details of exports to third country other than India was sought from the producer/exporter. The exporter has provided the details of Export Price to countries other than India. For the purpose of Preliminary findings, the Authority has proposed to consider the Normal value on the basis of Cost Of Production of the producer/exporter of PUC. The normal value is determined as US$ **** per MT for the purpose of preliminary findings, pending further investigation.
Export Price
34. The Authority notes from the Exporters Questionnaire Response filed by Methanol Chemicals Company from Saudi Arabia that the company has exported **** MT of subject goods to India during the POI. The company has submitted adjustments on account of inland freight and port handling expense, ocean freight, ocean insurance, credit expense and bank charge and the same has been considered to work out the ex-factory export price. The net export price determined for the Company comes to US$ **** per MT for POI, for the purpose of preliminary findings pending further determination.
Normal Value for non cooperating producers/exporters from Saudi Arabia
35. The Authority notes that no other producer/ exporter from Saudi Arabia have responded to the exporter’ questionnaire. The NV has therefore been constructed by adopting cost of production in India as normated with due adjustment for SGA expenses and a reasonable profit at the rate of 5% on cost of production in accordance with Para 6(8) of the Rules. The Normal value therefore proposed as US$ **** per MT for the purpose of preliminary findings.
Export Price for non cooperating producers/exporters from Saudi Arabia
36. The Authority notes that no other producer/exporter from Saudi Arabia has responded to the Authority in the present investigation. For all the non-cooperative producers/exporters in Saudi Arabia, the Authority has determined net export price by adopting the least export price from the responses filed by Methanol Chemicals Company. The net export price so determined is US$ **** Per MT.
Dumping Margin
37. The ex-factory export price to India has been compared with the normal value to determine the dumping margins. The table below shows the weighted average dumping margins during the POI for all the producers of the subject goods originating in or exported from subject countries.
38. It is seen that the dumping margins are significant and more than the limits prescribed under the Rules in respect of exports made from each of the subject countries.
Dumping Margin Table
|
S.No. |
Country |
Producer |
Normal Value US$/ MT | Net Export
Price US$/ MT |
Dumping Margin US$/ MT |
Dumping Margin % |
Dumping Margin (Range %) |
| 1 | China PR | M/s Liaocheng Luxi Mehtylamine Chemical Co., Ltd., | **** | **** | **** | **** | 60-70 |
| 2 | China PR | Non cooperative Producers/ exporters | **** | **** | **** | **** | 75-80 |
| 3 | Saudi
Arabia |
M/s Methanol Chemicals Company | **** | **** | **** | **** | 25-30 |
| 4 | Saudi
Arabia |
Non cooperative Producers/ exporters | **** | **** | **** | **** | 110-120 |
G. INJURY ASSESSMENT AND CAUSAL LINK
Submissions made by the Domestic Industry
39. The Domestic Industry has submitted in the petition inter alia as follows:
i. Cumulative assessment of the effect of imports is appropriate in light of the conditions of competition between the imported article and the like domestic articles.
ii. Volume of dumped imports from subject countries have increased significantly and in absolute terms during the POI. Such increase in imports are in a precipitous manner by offering dumped prices.
iii. The increase in imports by the POI should be read with reductions in prices which would show that the producers/exporters from subject countries reduced the prices further to dominate the market creating significant price injury to the DI. Dumping has been adopted as a strategy to enjoy such share in Indian demand and this has curtailed the anticipated volume growth at the end of the DI. The DI has now started to bleed with financial losses.
iv. Volume of dumped imports from subject countries has been at price undercutting and suppressing levels which impacted the pricing decisions of the domestic industry.
v. The price undercutting has been significantly positive from China PR and Saudi Arabia individually and also cumulatively. Thus, the dumped imports created price undercutting effects on the prices offered by the domestic industry by forcing the domestic industry to sell at such low levels which did not even permit recovery of cost leaving the DI to suffer losses.
vi. The NSR of the DI is clearly a depressed and non-profit making one. Thus, domestic industry faced price suppression effect which is evident in the fact that the increase in price was suppressed by the landed price of imports.
vii. The information in the petition shows that although injury parameters such as production volume, capacity utilization, sales and market share have shown some increases in the injury period and in the POI, the fact remains that the actual performance on such parameters were below par levels and the increases are the result of very low base numbers and have not been any meaningful growth per se.
viii. The domestic industry could operate only at a level of *** capacity utilization during the POI and such a low utilization is the result of the fact that about 78% of the market share in demand was held by dumped imports.
ix. The effects of such low level of utilization created by the dumped imports are reflected in other volume parameters also and the cascading effects of low volumes are reflected in the price parameters also.
x. Material injury suffered by the domestic industry on account of dumping of subject goods from subject countries is visible in the price parameters also. The landed price of dumped imports which were creating price undercutting, price suppression/depression and underselling effects forced the DI to sell at a price below even its cost of production and as a result the DI once again started making financial losses from the year 2018-19 and the losses were highest during the POI.
xi. The profitability of the domestic industry which had turned slightly positive by 2017-18 viz. the base year once again turned into huge losses by the present POI. Profits per unit declined from -100 points in the base year to -479 points in the POI which is a sharp and significant fall.
xii. There has been a significant fall in ROCE from 2018-19 and through the POI as a result of financial losses suffered by the DI on account of price injury created by the dumped imports. ROCE became very negative in the range of ****.
xiii. It is apparent that the producers/exporters from subject countries reduced their prices so drastically and such targeted dumping with drastic price cut has forced the DI to reduce its prices beyond any reduction in cost leading to material injury on account of all profitability parameters.
xiv. The adverse situation in volume and price parameters is further reflected in other core parameters of injury as well. Thus, the domestic industry has suffered material injury on account of dumping of subject goods from China PR and Saudi Arabia.
xv. The injury caused to the domestic industry is on account of dumped imports of PUC from subject countries only. Had there been no dumping the situation of the domestic industry would have been that of better performance and profitability with significant market share and moderate capacity utilization. This shows injury suffered by the DI were on account of dumping of subject goods from subject countries only.
xvi. The decision of the Authority not to recommend any duty on import of PUC at the end of a recent Anti-dumping investigation concerning the subject goods apparently been taken as a golden opportunity by the producers/exporters from subject countries to dump more in India and after the said findings, the vigor of dumping has sky rocketed. The DI is before the Authority once again but this time with a bleeding and much aggravated situation of injury. No anti-dumping duty at the earliest shall lead to the complete closure of the domestic industry and therefore, the industry prays for immediate provisional measures pending detailed investigations and definitive measures by the Authority.
Submissions made by the other interested parties
40. The submissions made by the other interested parties inter alia in their response in the context of injury are noted as follows:
i) Imports from subject countries are not causing any injury to the domestic industry.
ii) Imposition of anti-dumping duties on the PUC will have catastrophic effect on importers and endusers that rely on the imports for raw materials. Further, such imposition of duty would leave importers at the mercy and whims of domestic producers which do not have sufficient capability to cater to the domestic demand.
Examination of the Authority
41. The Authority has taken note of the submissions made by the petitioner and opposing interested parties so far in this investigation and has examined the same in accordance with the Anti-Dumping Rules and is addressed appropriately at relevant place in this provisional findings.
i. Cumulative Assessment
42. Para (iii) of Annexure II of the Anti-Dumping Rules provides that in case where imports of a product from more than one country are being simultaneously subjected to anti- dumping investigation, the Authority will cumulatively assess the effect of such imports, in case it determines that:
a) Margin of dumping established in relation to the imports from each country is more than two percent expressed as percentage of export price and the volume of imports from each country is three percent (or more) of the import of like article or where the import of individual countries is less than three percent, the imports collectively account for more than seven percent of the import of like article; and
b) Cumulative assessment of the effect of imports is appropriate in the light of the conditions of competition between the imported article and the like domestic articles.
43. The Authority notes that:
a) The subject goods are being dumped into India from subject countries. The margin of dumping from each of the subject countries is more than the de-minimis limits prescribed under the Rules.
b) The volume of imports from each of the subject countries is individually more than 3% of total volume of imports.
c) Cumulative assessment of the effect of imports is appropriate as the exports from the subject countries not only directly compete inter se but also with the like article offered by the Domestic Industry in the Indian market.
d) In view of the above, the Authority considers that it is appropriate to assess injury to the Domestic Industry cumulatively from imports of the subject goods from the subject countries.
e) Rule 11 of Antidumping Rules read with Annexure II provides that an injury determination shall involve examination of factors that may indicate injury to the Domestic Industry, “…. taking into account all relevant facts, including the volume of dumped imports, their effect on prices in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles….”. In considering the effect of the dumped imports on prices, it is considered necessary to examine whether there has been a significant price undercutting by the dumped imports as compared with the price of the like article in India, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which otherwise would have occurred, to a significant degree. For the examination of the impact of the dumped imports on the Domestic Industry in India, indices having a bearing on the state of the industry such as production, capacity utilization, sales volume, inventory, profitability, net sales realization, the magnitude and margin of dumping, etc. have been considered in accordance with Annexure II of the Anti-Dumping Rules.
ii. Volume Effect of Dumped Imports on the Domestic Industry
a. Assessment of Demand/Apparent Consumption
44. The Authority has taken into consideration, for the purpose of the present investigation, demand or apparent consumption of the product in India as the sum of domestic sales of the Indian Producers and imports from all sources. The demand so assessed has increased during the injury investigation period and the POI.
| Particulars | Unit | 2016-17 | 2017-18 | 2018-19 | POI- Jan-2019 to Sept- 2019 | POI Annualized |
| Imports from China PR | MT | 10,237 | 5,624 | 9,392 | 6,379 | 8505 |
| Imports from Saudi Arabia | MT | 23,802 | 26,101 | 35,456 | 23,120 | 30827 |
| Total Imports from Subject Countries | MT | 34,039 | 31,725 | 44,848 | 29,499 | 39,332 |
| Trend | Indexed | 100 | 93 | 132 | 116 | 116 |
| Total Imports from Other Countries | MT | 3,218 | 3,110 | 3,017 | 821 | 1,094 |
| Total Imports into the Country | MT | 37,257 | 34,835 | 47,865 | 30,319 | 40,426 |
| Domestic Sales of Petitioner | MT | **** | **** | **** | **** | **** |
| Trend | Indexed | 100 | 255 | 177 | 304 | 304 |
| Domestic Sales of Other Producers | MT | **** | **** | **** | **** | **** |
| Trend | Indexed | 100 | 100 | 100 | 100 | 100 |
| Total Demand | MT | 40,496 | 43,104 | 53,603 | 37,698 | 50,264 |
| Trend | Indexed | 100 | 106 | 132 | 124 | 124 |
45. As can be seen from the above table, demand for the subject goods in India has shown significant increases over the injury period and POI (A). The demand which was 40,496 in the base year increased to 50,264 in the POI (A). Thus, any decline in demand cannot be noted as the cause of injury suffered by the domestic industry. Imports and also sales of the domestic industry increased in the same period.
b. Import Volumes from subject countries
46. With regard to the volume of the dumped imports, the Authority is required to consider whether there has been a significant increase in dumped imports, either in absolute terms or relative to production or consumption in India.
| Particulars | Unit | 2016-17 | 2017-18 | 2018-19 | POI- Jan-2019 to Sept- 2019 | POI Annualized |
| Imports from China PR | MT | 10,237 | 5,624 | 9,392 | 6,379 | 8505 |
| Imports from Saudi Arabia | MT | 23,802 | 26,101 | 35,456 | 23,120 | 30827 |
| Total Imports from Subject Countries | MT | 34,039 | 31,725 | 44,848 | 29,499 | 39,332 |
–
| Market Share in Import Volume | ||||||
| China PR | % | 27 | 16 | 20 | 21 | 21 |
| Saudi Arabia | % | 64 | 75 | 74 | 76 | 76 |
| Share of Subject Countries | % | 91 | 91 | 94 | 97 | 97 |
| Share of Other Countries | % | 9 | 9 | 6 | 3 | 3 |
| Total | % | 100 | 100 | 100 | 100 | 100 |
47. It is seen that dumped imports of the subject goods from the subject countries have increased in absolute terms from 34039 MT in 2016-17 to 39332 MT in POI (A). Also, share of dumped imports from subject countries in overall imports into India increased while the share of imports from other countries decreased in the injury period and in the POI (A).
c. Subject Country Imports in relative terms
| Particulars | Unit | 2016-17 | 2017-18 | 2018-19 | POI- Jan-2019 to Sept- 2019 | POI Annualized |
| Total Imports from Subject Countries | MT | 34,039 | 31,725 | 44,848 | 29,499 | 39,332 |
| Total Demand | MT | 40,496 | 43,104 | 53,603 | 37,698 |
50,264 |
| Production of DI | MT | **** | **** | **** | **** | **** |
| Trend | Indexed | 100 | 204 | 158 | 175 | 233 |
| Imports from subject countries relative to Indian consumption | % | 84 | 74 | 84 | 78 | 78 |
| Imports from subject countries relative to production of DI | % | **** | **** | **** | **** | **** |
| Trend | Indexed | 100 | 45 | 83 | 49 | 49 |
48. It is seen that the dumped imports from subject countries in relation to production and demand decreased in the POI (A) as compared to the base year and previous years except 2018-19, though such imports have increased in absolute terms by the POI (A) and the share of such dumped imports remained substantial in overall demand.
d. Market Share in Demand
| Particulars | Unit | 2016-17 | 2017-18 | 2018-19 | POI- Jan-2019 to Sept- 2019 | POI
Annualized |
| Total Imports from Subject Countries | MT | 34,039 | 31,725 | 44,848 | 29,499 | 39,332 |
| Sales of Domestic Industry | MT | **** | **** | **** | **** | **** |
| Trend | Indexed | 100 | 255 | 177 | 304 | 304 |
| Total Demand | MT | 40,496 | 43,104 | 53,603 | 37,698 | 50,264 |
| Market Share in Demand | ||||||
| Domestic Industry | % | **** | **** | **** | **** | **** |
| Trend | Indexed | 100 | 237 | 137 | 250 | 250 |
| Imports from subject countries | % | 84 | 74 | 84 | 78 | 78 |
| Imports from other countries | % | 8 | 7 | 6 | 2 | 2 |
| Sales of other producers | % | **** | **** | **** | **** | **** |
| Trend | Indexed | 100 | 100 | 100 | 100 | 100 |
| Total | % | 100 | 100 | 100 | 100 | 100 |
49. The Authority notes that the market share of the subject imports have declined in the overall demand by the POI (A) in comparison to the base year though the same have increased over the year 2017-18. The share of the Petitioner in demand has increased over the injury period and POI (A). Even though the share of dumped imports in demand declined, the same remained at 78% during the POI (A) which is noted as a significant level.
iii. Price Effect of The Imports On The Domestic Industry
50. With regard to the effect of the dumped imports on prices, it is required to be analyzed whether there has been a significant price undercutting by the alleged dumped imports as compared to the price of the like products in India, or whether the effect of such imports is otherwise to depress prices or prevent price increases, which otherwise would have occurred in the normal course. The impact on the prices of the Domestic Industry on account of the dumped imports from subject countries has been examined with reference to price undercutting, price underselling, price suppression and price depression, if any. For the purpose of this analysis, the cost of production, net sales realization (NSR) and the non-injurious price (NIP) of the Domestic Industry have been compared with landed price of imports of the subject goods from the subject countries.
a) Price Undercutting
51. For the purpose of price undercutting analysis, the net selling price of the Domestic Industry has been compared with the landed value of imports from the subject countries. While computing the net selling price of the Domestic Industry all taxes, rebates, discounts and commissions have been deducted and sales realization at ex works level has been determined for comparison with the landed value of the dumped imports. Accordingly, the undercutting effects of the dumped imports from the subject countries work out as follows:
| Particulars | Unit | China PR | Saudi Arabia | Subject Countries |
| Net Sales Realization | Rs./Kg | **** | **** | **** |
| Trend | Indexed | 100 | 100 | 100 |
| Landed Price (LV) | Rs./Kg | 58.80 | 56.73 | 57.76 |
| Price Undercutting | Rs./Kg | **** | **** | **** |
| Trend | Indexed | 100 | 179 | 139 |
| Price Undercutting | % of LV | **** | **** | **** |
| Price Undercutting | Range | 1-5 | 5-10 | 5-10 |
52. From the aforesaid table, it can be seen that the imports from subject countries are coming at prices below the domestic selling price of the Petitioner. Thus, price undercutting during the period of investigation is positive for the subject countries, both individually and cumulatively.
b) Price Suppression/Depression
53. In order to determine whether the dumped imports are depressing the domestic prices and whether the effect of such imports is to suppress prices to a significant degree or prevent price increases which otherwise would have occurred in normal course, the changes in the costs and prices over the injury period, were compared as below:
| Particulars | Unit | 2016-17 | 2017-18 | 2018-19 | POI- Jan-2019 to Sept- 2019 |
| Cost of Sales | Rs./Kg | **** | **** | **** | **** |
| Indexed | 100 | 101 | 127 | 120 | |
| Domestic Selling Price | Rs./Kg | **** | **** | **** | **** |
| Indexed | 100 | 113 | 128 | 108 | |
| Landed Value- Subject Countries | Rs./Kg | 50.60 | 60.59 | 68.78 | 57.76 |
| Indexed | 100 | 120 | 136 | 115 |
54. From the above table, it can be seen that the imports from subject countries were coming at prices much lower than the cost of sales of the Domestic Industry. This has forced the Domestic Industry to reduce its prices during POI (A) and has led to a situation in which the Domestic Industry has been forced to sell below its cost of sales leading to financial losses. It is also noted that though the cost of sales and NSR increased over the years, landed price of dumped imports have been consistently below the cost and price of the domestic industry indicating adverse price effects from such landed value.
c) Price Underselling
55. The non-injurious price (NIP) of the Domestic Industry has been determined and compared with the landed value of the subject goods to arrive at the extent of price underselling. The NIP of the product under consideration has been determined by adopting information/data relating to the cost of production for the period of investigation on the basis of principles mentioned in Annexure III of the Rules. The analysis shows that during the period of investigation, the landed value of subject imports was below the non-injurious price of the Domestic Industry, as can be seen from the table below, demonstrating positive price underselling effect:
| Particulars | Unit | China PR | Saudi Arabia |
| Landed Value for POI | Rs./Kg | 58.80 | 56.73 |
| Non-Injurious Price (NIP) | Rs./Kg | **** | **** |
| Injury Margin | Rs./Kg | **** | **** |
| % | **** | **** | |
| Range | 35-40 | 40-45 |
56. From the aforesaid table, it can be seen that the imports are coming into India at a price much lower than the non-injurious price of the domestic industry. Thus, the price underselling from the subject countries during the POI is positive and quite significant.
iv. Economic Parameters of the Domestic Industry
57. Annexure II to the Anti-Dumping Rules requires that the determination of injury shall involve an objective examination of the consequent impact of dumped imports on domestic producers of such products. With regard to consequent impact of dumped imports on domestic producers of such products, the Anti-dumping Rules further provide that the examination of the impact of the dumped imports on the Domestic Industry should include an objective and unbiased evaluation of all relevant economic factors and indices having a bearing on the state of the industry, including actual and potential decline in sales, profits, output, market share, productivity, return on investments or utilization of capacity; factors affecting domestic prices, the magnitude of the margin of dumping; actual and potential negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital investments.
58. The Authority has examined the injury parameters objectively taking into account various facts and arguments made by the interested parties in their submissions so far.
a) Production, Capacity, Sales and Capacity Utilization
59. The performance of the domestic industry with regard to production, domestic sales, capacity & capacity utilization was as follows:
| Particulars | Unit | 2016-17 | 2017-18 | 2018-19 | POI- Jan-2019 to Sept- 2019 | POI Annualized |
| Installed Capacity | MT | **** | **** | **** | **** | **** |
| Indexed | 100 | 100 | 100 | 75 | 100 | |
| Production | MT | **** | **** | **** | **** | **** |
| Indexed | 100 | 205 | 158 | 175 | 234 | |
| Capacity Utilization | % | **** | **** | **** | **** | **** |
| Indexed | 100 | 205 | 158 | 234 | 234 | |
| Domestic Sales | MT | **** | **** | **** | **** | **** |
| Indexed | 100 | 255 | 177 | 228 | 304 |
60. The capacity, production, sales and capacity utilization of the Petitioner was in a positive trend but still the Petitioner has not been able to increase the sales of product concerned commensurate with the demand because of the significant volume of dumped imports coming from subject countries. The increase in sales of domestic industry is noted along with the market share of about 78% held by the dumped imports in the POI (A).
b) Profitability, return on investment and cash profits
61. Profitability, return on investment and cash profits of the Domestic Industry over the injury period is given in the table below: –
| Particulars | Unit | 2016-17 | 2017-18 | 2018-19 | POI- Jan-2019 to Sept- 2019 | POI Annualized |
| Profit/Loss | Rs. Kg | **** | **** | **** | **** | **** |
| Trend | Indexed | -100 | 248 | -78 | -479 | -479 |
| Profit/(Loss) before Int. & Tax (PBIT) |
Rs. Lacs |
**** |
**** |
**** |
**** |
**** |
| Trend | Indexed | -100 | 761 | -141 | -1661 | -1661 |
| Cash Profit | Rs. Lacs | **** | **** | **** | **** | **** |
| Trend | Indexed | 100 | 620 | 89 | -831 | -831 |
| Capital Employed | Rs. Lacs | **** | **** | **** | **** | **** |
| Trend | Indexed | 100 | 104 | 104 | 109 | 109 |
| Return on Capital Employed | % | **** | **** | **** | **** | **** |
| Trend | Indexed | -100 | 731 | -136 | -1529 | -1529 |
62. From the above table, it is noted that:
a) Profitability of Domestic Industry has been adversely affected due to the intensified dumping by producers/exporters from subject countries. Profit before interest and tax (PBIT) of the Domestic Industry have significantly declined during the POI (A) and was in the negative territory. The PBIT which was – 100 indexed points in 2016-17 increased to 761 points in 2017-18 and declined sharply to -1661 indexed points during the POI (A).
b) Per unit profit also declined sharply by the POI (A) and was in the negatives during the POI (A). The per unit losses incurred by the domestic industry is noted as significant.
c) Similarly, cash profits of the Domestic Industry have reduced significantly.From cash profit of 100 indexed points in 2016-17, it has decreased to -831 indexed points during the POI (A).
d) Similar to the profitability, Return on capital employed also declined drastically by the POI (A) to -1529 indexed points from -100 indexed points in 2016-17. The fall in ROCE during the POI (A) is even sharper if compared with the year 2017-18 wherein the ROCE was in the positive territory. The domestic industry’s ROCE during the POI is noted as negative in the range of ***.
c) Employment, productivity and wages
63. Employment, productivity and wages of Domestic Industry over the injury period are given in the table below.
| Particulars | Unit | 2016-17 | 2017-18 | 2018-19 | POI- Jan-2019 to Sept- 2019 | POI Annualized |
| Profit/Loss | Rs. Kg | **** | **** | **** | **** | **** |
| Trend | Indexed | -100 | 248 | -78 | -479 | -479 |
| Profit/(Loss) before Int. & Tax (PBIT) | Rs. Lacs | **** | **** | **** | **** | **** |
| Trend | Indexed | -100 | 761 | -141 | -1661 | -1661 |
| Cash Profit | Rs. Lacs | **** | **** | **** | **** | **** |
| Trend | Indexed | 100 | 620 | 89 | -831 | -831 |
| Capital Employed | Rs. Lacs | **** | **** | **** | **** | **** |
| Trend | Indexed | 100 | 104 | 104 | 109 | 109 |
| Return on Capital Employed | % | **** | **** | **** | **** | **** |
| Trend | Indexed | -100 | 731 | -136 | -1529 | -1529 |
–
| Particulars | Unit | 2016-17 | 2017-18 | 2018-19 | POI- Jan-2019 to Sept- 2019 |
| Employment | Nos | **** | **** | **** | **** |
| Trend | Indexed | 100 | 105 | 105 | 105 |
| Wages | Rs. Kg | **** | **** | **** | **** |
| Trend | Indexed | 100 | 107 | 123 | 120 |
| Productivity per employee | MT/Person | **** | **** | **** | **** |
| Trend | Indexed | 100 | 195 | 151 | 223 |
64. It is noted that the employment of the Domestic Industry was almost constant throughout the injury investigation period and during the POI. However, productivity per employee increased significantly by the POI.
d) Inventories
65. Inventory position with the Domestic Industry over the injury period is given in the table below:
| Particulars | Unit | 2016-17 | 2017-18 | 2018-19 | POI- Jan-2019 to Sept- 2019 |
| Average Inventory | MT | **** | **** | **** | **** |
| Indexed | 100 | 102 | 112 | 89 |
66. It is noted that the average inventory with the domestic industry declined in the POI as compared to the base year.
e) Growth
67. The Authority notes that growth of the Domestic Industry with regard to volume parameters like production and domestic sales have been positive but price parameters such as profits, return on investment etc. have been declining and the growth was negative during the POI.
f) Ability to raise capital investments
68. The Authority notes that given the rising demand of the product in the country, the Domestic Industry has made significant investments in plant and machinery. However, despite these investments, the performance of the Domestic Industry has deteriorated considerably, and further investment may get adversely affected.
g) Factors affecting domestic prices
69. The examination of the import prices from the subject countries, change in the cost structure, competition in the domestic market, factors other than dumped imports that might be affecting the prices of the Domestic Industry in the domestic market, etc. shows that the landed value of imported material from the subject countries is below the selling price, cost of sales and the non-injurious price of the Domestic Industry, causing significant price undercutting as well as price underselling in the Indian market apart from financial losses. It is also noted that the demand for the subject goods was showing significant increase during the injury period including the POI and therefore it could not have been a factor affecting domestic prices. Thus, it can be provisionally concluded that the principal factor affecting the domestic prices is the dumped imports of subject goods from subject countries.
h) Magnitude of Injury and Injury Margin
70. The Authority has determined Non-Injurious Price for the Domestic Industry on the basis of principles laid down in Anti-Dumping Rules read with Annexure III, as amended. The NIP of the product under consideration has been determined by adopting information/data relating to the cost of production for the period of investigation. The NIP of the Domestic Industry has been worked out and it has been compared with the landed price from producers/exporters from the subject countries for calculating injury margin. The ‘all others’ rate has been determined based on the facts available with the Authority.
Injury Margin
| S. No. | Country | Producer | NIP US$/MT | Landed Value US$/MT | Injury Margin US$/MT | Injury Margin % | Injury Margin % Range |
| 1 | China PR | M/s Liaocheng Luxi Mehtylamine Chemical Co., Ltd., | *** | *** | *** | *** |
30-50 |
| 2 | China PR | All non cooperating producers/ exporters | *** | *** | *** | *** | 35-55 |
|
3 |
Saudi Arabia | M/s Methanol Chemicals Company | *** | *** | *** | *** |
35-55 |
| 4 | Saudi Arabia | All non cooperating producers/ exporters | *** | *** | *** | *** | 60-80 |
H. NON-ATTRIBUTION ANALYSIS
71. As per the AD Rules, the Authority, inter alia, is required to examine any known factors other than the dumped imports which at the same time are injuring the Domestic Industry, so that the injury caused by these other factors may not be attributed to the dumped imports. Factors which may be relevant in this respect include, inter alia, the volume and prices of imports not sold at dumped prices, contraction in demand or changes in the patterns of consumption, trade restrictive practices of and competition between the foreign and domestic producers, developments in technology and the export performance and the productivity of the Domestic Industry. It has been examined below whether factors other than dumped imports could have contributed to the injury to the Domestic Industry.
(i) Volume and price of imports from third countries
72. The imports from countries other than the subject countries are not significant in volume terms so as to cause or threaten to cause injury to the Domestic Industry. Imports from other countries put together accounted for less than 3% in total imports and less than 3% of total demand/consumption in India. Thus, it cannot be said that imports from other countries are causing injury.
(ii) Export Performance
73. The Authority has considered the data for domestic operations only for its injury analysis.
(iii) Contraction in demand Changes in pattern of consumption
74. It is noted that the demand of the subject goods has increased consistently over the entire injury period. Thus, it can be provisionally concluded that the injury to the Domestic Industry was not due to contraction in demand.
(iv) Trade restrictive practices of and competition between the foreign and domestic producers
75. The import of the subject goods is not restricted in any manner and the same are freely importable in the country. No evidence has been submitted by any interested party to suggest that the conditions of competition between the foreign and the domestic producers have undergone any change.
(v) Developments in technology
76. None of the interested parties have furnished any evidence to demonstrate significant changes in the technology that could have caused injury to the Domestic Industry.
(vi) Changes in pattern of consumption
77. The domestic industry is producing the type of goods that have been imported into India. Possible changes in pattern of consumption are not a factor that could have caused claimed injury to the domestic industry.
(vii) Performance of the domestic industry with respect to other products
78. The Authority notes that the performance of other products being produced and sold by the domestic industry has not affected the assessment made by the Authority of the domestic industry’s performances. The information considered by the Authority is with respect to the product under consideration only.
(viii) Productivity of the domestic industry
79. The Authority notes that deterioration in productivity has not caused injury to the domestic industry. Rather, productivity per employee has seen an increasing trend.
I. INDIAN INDUSTRY’S INTEREST & OTHER ISSUES
80. The Authority notes that the purpose of anti-dumping duties, in general, is to eliminate injury caused to the Domestic Industry by the unfair trade practices of dumping so as to re-establish a situation of open and fair competition in the Indian market, which is in the general interest of the Country. Imposition of anti-dumping measures would not restrict imports from the subject countries in any way, and, therefore, would not affect the availability of the product to the consumers
J. CONCLUSION ON INJURY & CAUSAL LINK:
81. The Authority provisionally concludes as under:
a) Imports of the subject goods from the subject countries have increased in absolute terms over the entire period of investigation.
b) The landed price of imports from the subject countries has declined in POI as compared to previous year.
c) There is price undercutting, suppression and depression due to low priced dumped imports coming in to India.
e) Significant share of the market share have been held by dumped imports throughout the injury period and POI. Such aggressive share of dumped imports impacted the growth of market share of domestic industry even after several years of operation.
f) The Domestic Industry’s profitability, cash profits and return on capital employed has been adversely affected and was negative in the POI (A). Except in 2017-18, the domestic industry has been incurring financial losses.
g) The price undercutting and price underselling from the subject countries during the POI is positive.
K. CONCLUSION & RECOMMENDATIONS
82. After examining the submissions made by the interested parties and issues raised therein; and considering the facts available on record, the Authority provisionally concludes that:
a) There is increase in imports of subject goods from subject counties in absolute terms as compared to the previous years.
b) The product under consideration has been exported to India from the subject countries below their normal values.
c) The Domestic Industry has suffered material injury.
d) Material injury has been caused by the dumped imports of subject goods from subject countries.
83. The Authority notes that the investigation was initiated and notified to all interested parties and adequate opportunity was given to the Domestic Industry, exporters, importers and other interested parties to provide positive information on the aspect of dumping, injury and causal link. Having initiated and conducted the investigation into dumping, injury and causal link in terms of the provisions laid down under the Anti-Dumping Rules, the authority is of the view that imposition of provisional duty is required to offset dumping and injury, pending completion of the investigation. Therefore, Authority considers it necessary and recommends imposition of provisional anti-dumping duty on imports of subject goods from the subject countries.
84. In terms of provision contained in Rule 4(d) of the Rules, the Authority recommends imposition of provisional anti-dumping duty equal to the lesser of margin of dumping and the margin of injury, so as to remove the injury to the Domestic Industry. Accordingly, the Authority recommends imposition of provisional antidumping duty on the imports of subject goods, originating in or exported from subject countries, from the date of notification to be issued in this regard by the Central Government, equal to the amount mentioned in Column 7 of the duty table appended below. The landed value of imports for this purpose shall be assessable value as determined by the Customs under Customs Act, 1962 and applicable level of custom duties except duties levied under Section 3, 3A, 8B, 9, 9A of the Customs Tariff Act, 1975.
DUTY TABLE
| Sl. No. | Heading | Descri-ption | Country of origin | Country of export | Producer | Amo-unt | Unit | Curr-ency |
| (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) |
| 1 | 29211110 | Dimethyl Formamide (DMF) | China PR | China PR | M/s Liaocheng Luxi Mehty-lamine Chemical Co., Ltd., | 317.78 | MT | US$ |
| 2 | 29211110 | Dimethyl Formamide (DMF) | China PR | China PR | Any other producer except M/s Liaocheng Luxi Mehty-lamine Chemical Co., Ltd., | 346.32 | MT | US$ |
| 3 | 29211110 | Dimethyl Formamide (DMF) | China PR | Any country other than China PR | M/s Liaocheng Luxi Mehty-lamine Chemical Co., Ltd., | 317.78 | MT | US$ |
| 4 | 29211110 | Dimethyl Formamide (DMF) | China PR | Any country other than China PR | Any other producer except M/s Liaocheng Luxi Mehty-lamine Chemical Co., Ltd., | 346.32 | MT | US$ |
| 5 | 29211110 | Dimethyl Formamide (DMF) | Any country other than China PR | China PR | M/s Liaocheng Luxi Mehty-lamine Chemical Co., Ltd., | 317.78 | MT | US$ |
| 6 | 29211110 | Dimethyl Formamide (DMF) | Any country other than China PR |
China PR |
Any other producer except M/s Liaocheng Luxi Mehty-lamine Chemical Co., Ltd., | 346.32 | MT | US$ |
| 7 | 29211110 | Dimethyl Formamide (DMF) | Saudi Arabia | Saudi Arabia | M/s Methanol Chemicals Company | 163.97 | MT | US$ |
| 8 | 29211110 | Dimethyl Formamide (DMF) | Saudi Arabia | Saudi Arabia | Any other producer except M/s Methanol Chemicals Company | 471.16 | MT | US$ |
| 9 | 29211110 | Dimethyl Formamide (DMF) | Saudi Arabia | Any country other than Saudi Arabia | M/s Methanol Chemicals Company | 163.97 | MT | US$ |
| 10 | 29211110 | Dimethyl Formamide (DMF) | Saudi Arabia | Any country other than Saudi Arabia | Any other producer except M/s Methanol Chemicals Company | 471.16 | MT | US$ |
| 11 | 29211110 | Dimethyl Formamide (DMF) | Any country other than Saudi Arabia | Saudi Arabia | M/s Methanol Chemicals Company | 163.97 | MT | US$ |
| 12 | 29211110 | Dimethyl Formamide (DMF) | Any country other than Saudi Arabia | Saudi Arabia | Any other producer except M/s Methanol Chemicals Company | 471.16 | MT | US$ |
L. FURTHER PROCEDURE
85. The procedure as below would be followed subsequent to notifying the preliminary findings:
i. The Authority invites comments on these provisional findings from all the interested parties and the same, considered relevant by the Authority, would be considered in the final findings.
ii. Domestic Industry, exporters, importers and other interested parties known to be concerned are being addressed separately by the Authority, who may make their views known, within thirty days from the date of the publication of these preliminary findings.
iii. Any other interested party may also make known its views within thirtydays from the date of publication of these findings.
iv. The Authority would conduct further verification to the extent deemed necessary.
v. The Authority would disclose the essential facts as per the Rules before announcing the final findings.
BIDYUT BEHARI SWAIN, Spl. Secy. and Designated Authority
