1. Proceedings
1.1 Introduction
20. A request for a reassessment was made by Pacific Wire (a business unit of Fletcher Building Ltd) the sole New Zealand producer of galvanised wire. The basis of the request was that the reference prices imposed following the investigation that was completed in April 2004 are now ineffective because of the increases in raw material costs, which have resulted in price increases of the finished product.
21. The purpose of this report is to provide written advice to interested parties of the findings of the reassessment. It should be noted that this report provides a summary only of the information, analysis and conclusions relevant to this reassessment, and should not be accorded any status beyond that.
22. Section 14(6) of the Dumping and Countervailing Duties Act 1988 (the Act) states:
(6) The [Chief Executive] may initiate a reassessment of any rate or amount of anti-dumping or countervailing duty determined under subsection (4) of this section, including any elements of any formula used to establish such a rate or amount,-
(b) Where a request for a reassessment is submitted to the [Chief Executive] by an interested party who submits evidence justifying the need for a reassessment; or
(c) Following the completion of a review carried out under subsection (8) of this section-
and the Minister may determine a new rate or amount in accordance with subsection (4) of this section, and, in that event, shall give notice of the new rate or amount.
23. On 10 March 2005 the Chief Executive, acting pursuant to section 14(6)(b) of the Act, formally initiated a reassessment of the anti-dumping duty on galvanised steel wire of high, medium and low tensile strength between (and including) 2 mm and 4.5 mm in diameter.
Background
Application
24. The application for the current reassessment of the rate or amount of anti-dumping duty on galvanised wire from Malaysia was made by Pacific Wire on the basis that the prices of inputs into the manufacture of galvanised wire, such as the raw material steel scrap and the processed input wire rod, had increased significantly and the current level of duty was ineffectual in relieving injury caused by dumped galvanised wire originating from Malaysia.
History of Anti-Dumping Duties on Imports of Galvanised Wire
25. On the 31 October 2002 the Minister of Commerce imposed anti-dumping duties on imports of galvanised wire originating from South Africa (hereinafter referred to as the South African investigation). The goods are described as galvanised steel wire of high, medium and low tensile strength between 2 mm and 4.5 mm in diameter, but EXCLUDING galvanised steel spring wire AS1472 exceeding 4 mm in diameter.
26. On the 24 March 2004 the Minister of Commerce imposed anti-dumping duties on imports of galvanised wire originating from Malaysia (hereinafter referred to as the Malaysian investigation). The goods (subject goods) are described as galvanised steel wire of high, medium and low tensile strength between (and including) 2 mm and 4.5 mm in diameter.
27. The current method of imposing anti-dumping duty on imports of galvanised wire from Malaysia is in the form of Normal Value (Value for Duty Equivalent) (NV(VFDE)) reference price amounts on goods supplied by two exporters (NV(VFDE) reference prices are explained below at paragraph 237.) For other exporters an ad valorem rate applies which is capped by a NV(VFDE) amount. One Malaysian supplier is exempt from anti-dumping duty as it was found not to be dumping during the Malaysian investigation.
1.2 Period of Reassessment
28. Imports of the subject goods were examined over the year ended 28 February 2005 (the POR) in order to determine if a new rate or amount of anti-dumping duty should be determined.
1.3 Interested Parties
New Zealand Industry
29. The request was submitted by Pacific Wire, a business unit of Fletcher Building Limited, the sole New Zealand producer of galvanised wire.
Exporters/Suppliers
30. The following companies have been identified from data obtained from the New Zealand Customs Service (Customs) as supplying the subject goods over the POR. Aspac Alliance Steel Sdn Bhd (Aspac), an exporter in the original investigation, did not supply any of the subject goods to New Zealand and accordingly is not recorded below.
Southern Wire Industries (Malaysia) Sdn Bhd
31. Southern Wire Industries (Malaysia) Sdn Bhd (Southern Wire) is a wholly owned subsidiary of Southern Steel Berhad which is a public company listed on the Kuala Lumpur Stock Exchange. Southern Wire manufactures steel wires, ropes, strands and a wide range of steel wire products.
32. Southern Wire provided a comprehensive response to the manufacturer's questionnaire.
RCI Wire Sdn Bhd
33. RCI Wire Sdn Bhd (RCI) has supplied the subject goods to New Zealand importers over the POR. In the Malaysian investigation the goods supplied by RCI were found not to be dumped and therefore were exempt from the application of anti-dumping duty and from reconsideration during this reassessment.
SMI Wire Sdn Bhd
34. SMI Wire Sdn Bhd (SMI) is a wholly owned subsidiary of South Malaysian Industries Berhad which is a publicly listed company on the Kuala Lumpur Stock Exchange. SMI manufactures a range of galvanised wire products.
35. SMI provided a partial questionnaire response. Further information was required to determine the ex-factory export and domestic prices of the subject goods but it has not been provided.
Importers
36. The following importers have been identified from Customs data over the POR as importing the subject goods.
Euro Corporation Ltd
37. Euro Corporation Ltd (Euro) is a privately owned company specialising in the distribution and manufacture of steel, rural and fastening products. Euro is based in Auckland but also operates a warehouse and factory in Christchurch.
38. Over the POR Euro imported from [Text deleted due to confidentiality] tensile galvanised wire of diameters from xxxxmm to xxxxmm in coils that ranged from xxxx to xxxxkg. [Text deleted due to confidentiality] Euro advised that purchases [Text deleted due to confidentiality].
39. Euro provided a comprehensive response to the importers questionnaire.
Olex New Zealand Ltd Trading as Olex Cables NZ
40. Olex New Zealand Ltd (Olex) is a wholly owned subsidiary of Olex Holdings Pty Limited, Australia. Olex is a manufacturer of electric power cables which are manufactured at its facility located in New Plymouth.
41. Over the POR Olex imported from [Text deleted due to confidentiality], ACSR (Aluminium Conductor Steel Reinforced) wire and heavy galvanised wire (HGW). Olex stated that it was necessary to import certain sizes of [Text deleted due to confidentiality] as the whole range is not produced in New Zealand. Olex also found up to the commencement of 2005, that it needed to purchase HGW from [Text deleted due to confidentiality] due to constraints in its manufacturing facility regarding the presentation of the coils.
42. Olex provided a comprehensive response to the importers questionnaire.
1.4 Goods Subject to Anti-Dumping Duty
43. The goods which are the subject of the application are:
Galvanised steel wire of high, medium and low tensile strength between (and including) 2 mm and 4.5 mm in diameter.
44. Some ACSR core wire has been imported under the same tariff items as the subject goods. ACSR core wire consists of a single galvanised, solid steel core. ACSR core wire is designed to provide strength to electricity transmission lines and high voltage overhead lines, where it is combined with strands of conductive aluminium wire.
45. During the South African and Malaysia investigations into galvanised wire no consideration was given to whether ACSR wire was a like good to the goods made by the New Zealand industry as at that time it was not imported. Pacific Wire has advised that it does not manufacture ACSR core wire and it does not consider that this product is a like good. Olex has also advised that Pacific Wire does not manufacture an appropriate wire for use as ACSR core wire suggesting that the tensility specification could not be met.
46. The ACSR core wire imported by Olex comes within the above description of goods subject to anti-dumping duty above and could attract anti-dumping duty as a high tensile galvanised wire imported [Text deleted due to confidentiality]. The description of goods cannot be amended during a reassessment to exclude this good. In order to establish whether ACSR core wire is a like good to goods made by the New Zealand industry, the Ministry would be need to conduct a confined review on this matter. An interested party may request a review to address this issue but would need to include with any such request positive evidence justifying the need for a review.
47. The subject goods enter New Zealand under the following tariff classifications:
7217 Wire of iron or non-alloy steel
7217.20 - Plated or coated with Zinc:
7217.20.10 - - Containing by weight less than 0.6% carbon
. . . Containing by weight less than 0.25 % carbon:
. . . . Fencing Wire:
. . . . . 1.6 mm or more, but less than 2.5 mm in diameter:
05L kg . . . . . . Coils, not exceeding 50 kg
07G kg . . . . . . Other
. . . . . 2.5 mm or more, but less than 4 mm in diameter:
08E kg . . . . . . Coils, not exceeding 50 kg
09C kg . . . . . . Other
. . . . . 4 mm or more in diameter:
11E kg . . . . . . Coils, not exceeding 50 kg
13A kg . . . . . . Other
. . . . Other
Other:
15H kg . . . . . 1.6 mm or more, but less than 2.5 mm in diameter
16F kg . . . . . 2.5 mm or more, but less than 3.55 mm in diameter
17D kg . . . . . 3.55 mm or more, but less than 4.5 mm in diameter
18B kg . . . . . 4.5 mm or more, but less than 5.5 mm in diameter
. . . Other:
. . . . Fencing Wire:
. . . . . 1.6 mm or more, but less than 2.5 mm in diameter:
25E kg . . . . . . Coils, not exceeding 50 kg
27A kg . . . . . . Other
. . . . . 2.5 mm or more, but less than 4 mm in diameter:
28K kg . . . . . . Coils not exceeding 50 kg
29H kg . . . . . . Other
. . . . . 4 mm or more in diameter:
31K kg . . . . . . Coils, not exceeding 50 kg
33F kg . . . . . . Other
35B kg . . . . . 1.6 mm or more, but less than 2.5 mm in diameter
36L kg . . . . . 2.5 mm or more, but less than 3.55 mm in diameter
37J kg . . . . . 3.55 mm or more, but less than 4.5 mm in diameter
39E kg . . . . . 4.5 mm or more in diameter
7217.20.90 - - Other
. . . Fencing Wire:
. . . . 1.6 mm or more, but less than 2.5 mm in diameter:
05D kg . . . . . Coils, not exceeding 50 kg
07L kg . . . . . Other
. . . . 2.5 mm or more, but less than 4 mm in diameter
08J kg . . . . . Coils, not exceeding 50 kg
09G kg . . . . . Other
. . . . 4 mm or more in diameter:
11J kg . . . . . Coils, not exceeding 50 kg
13E kg . . . . . Other
. . . Other:
15A kg . . . . 1.6 mm or more, but less than 2.5 mm in diameter
16K kg . . . . 2.5 mm or more, but less than 3.55 mm in diameter
17H kg . . . . 3.55 mm or more, but less than 4.5 mm in diameter
18F kg . . . . 4.5 mm or more in diameter
48. Applicable duty rates are:
| Normal | 6.5% |
|---|
| Australia | Free |
|---|
| Canada | Free |
|---|
| LDC | 5% |
|---|
| LLDC | Free |
|---|
| Pac | Free |
|---|
49. Customs data shows the country of origin and country of export as Malaysia. This means the goods are directly exported to New Zealand and do not pass in transit through another country. Malaysia qualifies for LDC preference under the New Zealand Customs tariff.
1.5 Reassessment Details
50. In tables, column totals may differ from individual figures because of rounding. The term VFD refers to value for duty for Customs purposes. The units of measure are kilograms (kg) unless otherwise specified.
1.6 Exchange Rates
51. Article 2.4.1 of the Anti-Dumping Agreement provides as follows:
When the comparison under paragraph 4 [of Article 2] requires a conversion of currencies, such conversion should be made using the rate of exchange on the date of sale8, provided that when a sale of foreign currency on forward markets is directly linked to the export sale involved, the rate of exchange in the forward sale shall be used. Fluctuations in exchange rates shall be ignored and in an investigation the authorities shall allow exporters at least 60 days to have adjusted their export prices to reflect sustained movements in exchange rates during the period of investigation.
8 Normally, the date of sale would be the date of contract, purchase order, order confirmation, or invoice, whichever establishes the material terms of sale.
52. In this report normal values are expressed in Malaysian Ringgit (MYR). Export transactions took place in United States dollars (USD). As in the Malaysian investigation the Ministry has used the sales order (S/O) confirmation date as the date of sale and the exchange rate has been sourced using the interbank rates listed on the OANDA.com currency conversion website.
1.7 Disclosure of Information
53. The Ministry of Economic Development makes available all non-confidential information to any interested party through its Public File system.
54. A copy of the Act and the Anti-Dumping Agreement is available at:
55. Article 6.7 of the Anti-Dumping Agreement provides as follows:
In order to verify information provided or to obtain further details, the authorities may carry out investigations in the territory of other Members as required, provided they obtain the agreement of the firms concerned and notify the representatives of the government of the Member in question, and unless that Member objects to the investigation. The procedures described in Annex I shall apply to investigations carried out in the territory of other Members. Subject to the requirement to protect confidential information, the authorities shall make the results of any such investigations available, or shall provide disclosure thereof pursuant to paragraph 9, to the firms to which they pertain and may make such results available to the applicants.
56. A verification visit was made to Southern Wire Industries (Malaysia) Sdn Bhd.
57. Southern Wire commented on the content of the verification report after the release of the interim report. Southern Wires comments have not resulted in any changes to the Ministry's conclusions in the interim report.
58. Article 6.8 of the Anti-Dumping Agreement provides as follows:
In cases in which any interested party refuses access to, or otherwise does not provide, necessary information within a reasonable period or significantly impedes the investigation, preliminary and final determinations, affirmative or negative, may be made on the basis of the facts available. The provisions of Annex II shall be observed in the application of this paragraph.
59. SMI provided an exporters questionnaire response. However, the information was not complete enough to establish an export price(s) and normal values(s). Further information was requested from SMI but it was not received.
60. Where sufficient information has not been provided to enable the export price or normal value to be ascertained, in accordance with section 6 of the Act, such amounts can be determined having regard to all available information.
61. In view of the failure by SMI to provide all of the necessary information decisions have been made on the basis of the facts available.
Pacific Wire's Submission Regarding Extensions of Time Given to Interested Parties
62. In response to the interim report Pacific Wire expressed concern that "…repeated requests for extensions of time (all of which have been granted by the Ministry) are a pattern of activity by Euro and its associates that is [Text deleted due to confidentiality]." Pacific Wire provided examples which relate to the Ministry granting an extension for the completion of the importer's questionnaire completed by Euro and the granting of additional time for Southern Wire to consider the draft verification report.
Ministry's Consideration of the Issue
63. Article 6 of the Agreement requires that all interested parties shall be given notice of the information which the Ministry requires and ample opportunity to present in writing all evidence which is considered relevant in respect of the investigation in question. Paragraph 1.1 of Article 6 of the Agreement prescribes that due consideration should be given to any request for an extension of time to complete a questionnaire and, upon good cause shown, an extension should be granted whenever practicable. Euro requested an extension to complete the importer's questionnaire because of the delay between notification of initiation and receipt of the questionnaire. The Ministry considered this a reasonable request and it was decided that the due date would be thirty days from the date of receipt of the questionnaire. Euro later requested another extension of nine days due to heavy work commitments at that time. Euro therefore had thirty nine days in total to complete the importers questionnaire.
64. With regard to Southern Wire's draft verification report the Ministry gave Southern Wire one week to comment on the content and any confidential information. Southern Wire did not respond by the date set and upon a reminder being sent requested an extension of just over three weeks. The Ministry declined this request but allowed another five days. When Southern Wire did not respond as requested the Ministry notified Southern Wire that it would be basing its findings in the interim report on the verified information discussed and recorded in the verification report and completed the interim report on that basis.
65. The Ministry considers that the requests by interested parties for an extension of time in order to supply the information required for the reassessment were not unreasonable. In granting extensions during this reassessment the Ministry considers it was meeting its obligations under both Article 6.1.1 and under New Zealand administrative law. The Ministry cannot comment on whether the requests for extension were [Text deleted due to confidentiality] but it does not consider that any extension granted significantly impeded the reassessment.
Pacific Wire's Submission on Related Parties
66. Also in its submission on the interim report, Pacific Wire expressed concern that the Ministry did not "note or act upon" specific cautions in relation to what it considered a "related party circumstance". Pacific Wire explicitly noted that the Ministry stated it was cautious about using transactions between related companies in relation to establishing Pacific Wire's cost of wire rod but did not expressly state the same caution when considering Southern Wire's cost of wire rod, which Pacific Wire submitted was also purchased from a related company.
67. Pacific Wire also suggested that the Ministry did not check whether Southern Wire "might be submitting an incorrectly high carbon cost gap" i.e. intentionally paying an inflated price to its supplier for high carbon (HC) wire rod. Pacific Wire said this would result in the Ministry making an artificially large downward adjustment to normal values where the transaction used to establish normal values consisted of a sale of low carbon (LC) galvanised wire.
68. Pacific Wire also proposed that the Ministry "should take some more steps to be more fully informed" about various [Text deleted due to confidentiality] which Pacific Wire contend that [Text deleted due to confidentiality]. Pacific Wire noted it has made allegations in relation to such [Text deleted due to confidentiality] previously and considered the matter "[Text deleted due to confidentiality]".
Ministry's Consideration of the Issue
69. The Ministry noted in the interim report that it always conducted verification processes with due scepticism. While the Ministry may refer explicitly to its caution in some circumstances and not in others, this cannot be considered reason to believe that the Ministry has not conducted itself with due scepticism or in an objective manner.
70. The Ministry noted its caution in relation to Pacific Wire's purchase of wire rod because of the [Text deleted due to confidentiality] difference in cost of wire rod [Text deleted due to confidentiality] sets the price of wire rod sold by Pacific Steel to Pacific Wire. Quite clearly such a material change would have a substantial affect on a non-injurious price (NIP) calculated using a current cost of production plus pre-injury profit margin method.
71. Although the Ministry does not note express caution in the interim report when referring to Southern Wire's purchase of wire rod to assess the validity of the information provided by Southern Wire the Ministry sighted a number of invoices relating to purchases by Southern Wire of both HC and LC wire rod. Some of the invoices were compared to the purchase order. The Ministry also compared the differences in Southern Wire's purchase price of both HC and LC wire rod, the "carbon cost gap", between different months of the POR and between the POR generally and the Malaysian investigation. The Ministry found no cause for further enquiry.
72. In relation to Pacific Wire's submission about the various [Text deleted due to confidentiality], the Ministry has taken note of the [Text deleted due to confidentiality] made by Pacific Wire and considered them when conducting verification and analysis to the extent that it is appropriate. During the verification processes and within the scope of the whole reassessment the Ministry is satisfied with the authenticity of the documents and submissions that it has relied on in forming its conclusions.
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