Anti-dumping duties on South African galvanised wire

Commerce Minister Lianne Dalziel has announced that, from today, provisional anti-dumping duties will be imposed on galvanised wire from South Africa.

The decision follows provisional results from a continuing investigation into claims that the South African galvanised wire is sold to New Zealand up to 25 per cent cheaper than in South Africa.

“The duties, ranging from 10 to 33 per cent, will prevent further material injury to the New Zealand industry until a full dumping investigation can be completed in late December,” said Lianne Dalziel.

The dumping investigation was launched on 28 June 2002 following claims by the New Zealand producer, Pacific Wire, that South African galvanised wire was being sold to New Zealand importers at prices lower than what it is sold for on the South African domestic market.

Initial findings of the investigation have found that imports of the wire are being dumped at prices up to 25 per cent cheaper than prices in South Africa. Initial findings confirm material injury to the New Zealand industry, represented by Pacific Wire.

Provisional anti-dumping duties may be imposed any time after 60 days from the start of an investigation, if they are needed to prevent further material injury being caused by dumped imports during the remainder of the investigation. The need for these duties was investigated following a request by Pacific Wire that provisional anti-dumping duties be imposed.

“It is clear to me that provisional anti-dumping duties are required to prevent further injury in this case,” said Lianne Dalziel.

Goods Subject to Provisional Anti-dumping Duties

Provisional anti-dumping duties will apply to the following goods:

“Galvanised wire of high, medium and low tensile strength between 2mm and 4.5 mm in diameter”

Galvanised wire is steel wire that has been given a protective coating of zinc and is used in the agricultural and horticultural industries, mainly for fencing and downstream manufacturing.

Import Volumes

About 9,600 tonnes of galvanised wire was imported into New Zealand in the year ended June 2002 of which 1,250 tonnes was from South Africa. Imports from South Africa in the year ended June 2002 have increased by 79 percent when compared to imports in the year ended June 2001. Australia is also a major source of imports of galvanised wire.

Rates of Duty

Duties have been imposed at full weighted average margins of dumping (see below for an explanation of “dumping”) at the following percentages of the value for duty at the time of importation.
Supplier Duty %
Cape Gate Fence and Wire Works (Pty) Ltd 33
Consolidated Wire Industries (Pty) Ltd 27
Independent Galvanising (Pty) Ltd 10
Other Suppliers 33
Completion of Investigation

The investigation will continue until late December. The Minister of Commerce must make a final determination by 25 December 2002.

If the amount of any provisional duty paid by importers during the investigation period exceeds the amount, if any, of any final duty, the amount of the excess will be refunded.

Interested Parties

The application for an investigation was lodged by Pacific Wire, a wholly owned division of Fletcher Steel Limited. Pacific Wire is the only New Zealand producer of galvanised steel wire.

Significant South African exporters are: Cape Gate Fence and Wire Works (Pty) Ltd; Consolidated Wire Industries (Pty) Ltd; and Independent Galvanising (Pty) Ltd.

Significant importers of galvanised wire from South Africa are: Anchor Wire Limited; Euro Corporation Limited; Hurricane Wire Products; Paul Industries; and Ullrich Machinery Corporation Limited.

Dumping

Goods are dumped if the price at which they are sold to New Zealand importers is less than the price at which they are normally sold on the domestic market in the country of export. The difference in these prices is the margin of dumping.

The investigation has examined imports of galvanised wire from South Africa over the year ended May 2002 and has provisionally found that 98 percent of these imports were dumped. Dumping margins range from 10 to 33 percent. One South African exporter of very small quantities was found to be not dumping.

Dumping is not illegal, nor is it inconsistent with the GATT and other World Trade Organisation Agreements. WTO members have agreed, however, that action may be taken against dumped goods which cause or threaten to cause material injury to a domestic industry.

Injury

The investigation to date has found that imports of South African galvanised wire have increased significantly. Pacific Wire’s prices have been undercut by most of the dumped imports. The dumped imports have forced Pacific Wire’s price down and restricted its ability to increase prices to reflect increased costs, resulting in a decline in profits.

Dumping Investigations

The Trade Remedies Group of the Ministry of Economic Development completes dumping investigations in terms of the Dumping and Countervailing Duties Act 1988 and consistent with the WTO Anti-dumping Agreement.

Investigations involve thorough checking of the evidence in the application document, and extensive gathering and analysis of industry and trade data to establish whether dumping is causing or threatening to cause material injury to the New Zealand industry.

The investigation was initiated on 28 June 2002. Within 150 days of initiating an investigation, in this case by 25 November 2002, the Ministry is required to inform all interested parties of the essential facts and conclusions likely to form the basis for any final determination.

The investigation must be completed by 180 days from initiation, that is by 25 December 2002. By this date the Minister of Commerce must make a final determination of whether or not the goods are dumped and are causing or threatening to cause material injury to the industry.

Anti-dumping Action

Applicant industries may ask that provisional anti-dumping duties be applied to dumped imports. Provisional anti-dumping duties may be imposed at any time after 60 days from the date of the initiation of an investigation, if they are needed to prevent material injury being caused during the remainder of the investigation. Pacific Wire asked that provisional anti-dumping duties be imposed.

If the Minister of Commerce makes a final determination that dumping is causing or threatening to cause material injury to the New Zealand industry, the Minister may impose final anti-dumping duties. Any final duties would be set at a level calculated to remove the injury to the local industry, and as such can be lower than the margin of dumping.

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