The International Trade Administration of Commission of South Africa (ITAC) has issued its final determination in the investigation into alleged dumping of non-articulated welded link chains made from round section iron or steel wire, bars or rods of 4 mm or more, but not exceeding 20 mm from China: Final Determination.
McKinnon Chain, a Division of Scaw South Africa (Pty) Ltd, submitted an application to ITAC alleging that non-articulated welded link chains manufactured from round section iron or steel wire, bars or rods of a diameter of 4 mm or more, but not exceeding 20 mm (‘welded link chains’), are being dumped on the Southern African Customs Union (SACU) market, causing material injury and a threat of material injury to the SACU industry.
ITAC subsequently initiated an anti-dumping investigation into the alleged dumping of welded link chains originating in or imported from the People’s Republic of China (China), through a Government Gazette notice of 17 September 2021.
On the basis of the information available, ITAC made a preliminary determination that the welded chain links product originating in or imported from China was dumped onto the SACU market causing material injury and a threat of material injury to the SACU industry. The ITAC’s preliminary findings are contained in its Preliminary Report No.686 (‘Preliminary Report’).
On 01 April 2022, the South African Revenue Service (SARS) imposed provisional anti-dumping duties on welded link chains through a Government Gazette notice.
Subsequently, ITAC invited comments from all known interested parties on its preliminary determination. ITAC made a final determination that dumping of the subject product originating in or imported from China was taking place, causing material injury and a threat of material injury to the SACU industry.
ITAC therefore recommended to the Trade, Industry and Competition Minister that anti-dumping duties be imposed on welded link chains originating in or imported from China.
In considering ITAC’s recommendation, the minister noted, inter alia, that the volumes of the alleged dumped imports had declined over the investigation period. The minister further observed, based on ITAC’s report, that the decline in imports was more rapid than the rate of decline in domestic consumption. ITAC’s recommendation also indicated that there had been a significant reduction in imports from China over the period of the investigation. The minister further noted that the overall market share of the McKinnon Chain appeared to be rising over the period of investigation.
Regarding the impact on prices, the minister noted, inter alia, that the McKinnon Chain’s ex-factory selling price had increased over the investigation period and that the McKinnon Chain had not experienced price undercutting over the period of investigation.
In the case of the impact on McKinnon Chain, the minister noted, inter alia, that while the profitability and return on investment were negative for much of the investigation period, these operational measures had improved across the period and were positive for tariff subheading 7315.82.05 in 2021. The minister further noted that productivity had improved over the period for both products.
Furthermore, the minister found that although the information available indicated that sales volumes, output and capacity utilisation all declined over the investigation period, these declines appeared to be in line with broader trends in the economy, resulting from economic disruptions caused by and associated with COVID-19. The minister further noted that the declines indicated that the applicant appeared to be performing better than reported declines in consumption levels, suggesting a marginal improvement in performance relative to the available market.
Regarding the threat of material injury, the minister, inter alia, noted that China had increased its freely disposable capacity; the evidence contained in ITAC’s report indicated a significant reduction in imports from China over the period of the investigation.
The minister therefore decided to reject ITAC’s recommendation. This rejection was based on the minister’s belief that ITAC’s recommendation did not duly empower him to establish, to a reasonable degree of certainty, that material injury or the threat of it from dumped imports, had been inflicted on the McKinnon Chain.
Recognising that as the global economy recovers from the impact of the COVID-19 pandemic, circumstances may change, the minister further requested ITAC to monitor imports of the wire link chains and to act where required to protect the local industry from unfair trade.
