HOT ROLLED STRUCTURAL STEEL SECTIONS · semi-finished steel for Liberty Steel’s rolling facilities across all of its sites. The Whyalla Steelworks produces steel using a basic oxygen

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REVIEW OF MEASURES 499

CONTINUATION INQUIRY 505

HOT ROLLED STRUCTURAL STEEL SECTIONS

EXPORTED FROM JAPAN, KOREA, TAIWAN (EXCEPT FOR EXPORTS BY FENG HSIN STEEL CO LTD) AND THAILAND

VISIT REPORT - AUSTRALIAN INDUSTRY

ONESTEEL MANUFACTURING PTY LTD

(TRADING AS LIBERTY STEEL)

THIS REPORT AND THE VIEWS OR RECOMMENDATIONS CONTAINED HEREIN WILL BE REVIEWED BY THE CASE MANAGEMENT TEAM AND MAY NOT REFLECT THE FINAL POSITION OF THE ANTI-DUMPING COMMISSION

April 2019

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Continuation Inquiry 505 - HRS – Australian Industry Visit Report – Liberty Steel

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CONTENTS

CONTENTS .................................................................................................................................................................. I

ABBREVIATIONS ........................................................................................................................................................ II

1 BACKGROUND.................................................................................................................................................. 1

2 LIKE GOODS AND THE AUSTRALIAN INDUSTRY ................................................................................................ 2

2.1 THE GOODS ..................................................................................................................................................... 2 2.2 THE AUSTRALIAN INDUSTRY ................................................................................................................................. 3 2.3 LIKE GOODS ..................................................................................................................................................... 3 2.4 PRELIMINARY ASSESSMENT ................................................................................................................................. 4

3 THE AUSTRALIAN MARKET ............................................................................................................................... 5

3.1 THE AUSTRALIAN HRS MARKET ............................................................................................................................ 5

4 VERIFICATION OF SALES ................................................................................................................................... 7

4.1 VERIFICATION OF SALES DATA TO FINANCIAL STATEMENTS ........................................................................................... 7 4.2 VERIFICATION OF SALES DATA TO SOURCE DOCUMENTS ............................................................................................... 7 4.3 RELATED PARTY CUSTOMERS ................................................................................................................................ 7 4.4 IMPORTS BY THE APPLICANT ................................................................................................................................. 7 4.5 EXPORT SALES .................................................................................................................................................. 7 4.6 SALES – CONCLUSION......................................................................................................................................... 7

5 VERIFICATION OF COST TO MAKE AND SELL ..................................................................................................... 8

5.1 VERIFICATION OF COSTS TO FINANCIAL STATEMENTS .................................................................................................. 8 5.2 VERIFICATION OF COSTS TO SOURCE DOCUMENTS ...................................................................................................... 8 5.3 RELATED PARTY SUPPLIERS .................................................................................................................................. 8 5.4 COSTS TO MAKE AND SELL – CONCLUSION ............................................................................................................... 8

6 ECONOMIC CONDITION OF LIBERTY STEEL ....................................................................................................... 9

6.1 IMPORT PARITY PRICING ..................................................................................................................................... 9 6.2 PRICE DEPRESSION AND PRICE SUPPRESSION........................................................................................................... 10 6.1 PROFIT AND PROFITABILITY ................................................................................................................................ 10 6.2 SALES REVENUE .............................................................................................................................................. 12 6.3 SALES VOLUME ............................................................................................................................................... 12 6.4 MARKET SHARE .............................................................................................................................................. 13 6.5 OTHER ECONOMIC FACTORS .............................................................................................................................. 13 6.6 CONCLUSION ................................................................................................................................................. 16

7 IMPACT OF THE EXPIRY OF ANTI-DUMPING MEASURES ................................................................................. 18

7.1 CONTINUATION OR RECURRENCE OF DUMPING ....................................................................................................... 18 7.2 CONTINUATION OR RECURRENCE OF MATERIAL INJURY ............................................................................................. 18

8 UNSUPPRESSED SELLING PRICE ...................................................................................................................... 19

9 FORM OF MEASURES ..................................................................................................................................... 20

10 APPENDICES AND ATTACHMENTS .................................................................................................................. 21

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ABBREVIATIONS

the Act Customs Act 1901

ADN Anti-Dumping Notice

ABF Australian Border Force

Liberty Steel OneSteel Manufacturing Pty Ltd trading as Liberty Steel

the Commission the Anti-Dumping Commission

the Commissioner the Commissioner of the Anti-Dumping Commission

CTMS cost to make and sell

the goods hot rolled structural steel

IDD interim dumping duty

inquiry period 1 January 2018 to 31 December 2018

NIP non-injurious price

HRS hot rolled structural steel

USP unsuppressed selling price

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1 BACKGROUND

On 23 November 2018 and in accordance with subsection 269ZHB(1) of the Customs Act 1901 (the Act) 1, the Commissioner of the Anti-Dumping Commission (the Commissioner or the Commission respectively) published a notice2 on the Commission’s website inviting the following persons to apply for the continuation of the anti-dumping measures:

the person whose application under section 269TB resulted in the anti-dumping measures (subsection 269ZHB(1)(b)(i)); or

persons representing the whole or a portion of the Australian industry producing like goods to the goods covered by the anti-dumping measures (subsection 269ZHB(1)(b)(ii).

On 21 January 2019, an application for the continuation of the anti-dumping measures was received from OneSteel Manufacturing Pty Ltd trading as Liberty Steel (Liberty Steel). A non-confidential version of the application is available on the Commission’s public record.

Following consideration of the application, the Commissioner decided not to reject the application and initiated Continuation Inquiry 505. Notification of the initiation of the inquiry was made in Anti-Dumping Notice (ADN) No. 2019/21, which was published on the Commission’s website on 11 February 2019. In ADN No. 2019/21 it was indicated that the Commissioner will examine the period from 1 January 2018 to 31 December 2018 (the inquiry period) to determine whether the anti-dumping measures should:

(i) remain unaltered; or

(ii) cease to apply to a particular exporter or to a particular kind of goods; or

(iii) have effect in relation to a particular exporter or to exporters generally, as if different variable factors had been ascertained; or

(iv) expire on the specified expiry day.

1 All legislative references are to the Customs Act 1901, unless otherwise specified. 2 ADN No. 2019/173 refers.

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2 LIKE GOODS AND THE AUSTRALIAN INDUSTRY

2.1 The goods

The goods to which the current anti-dumping measures apply are:

Hot rolled structural steel sections in the following shapes and sizes, whether or not containing alloys:

universal beams (I sections), of a height greater than 130mm and less than 650mm;

universal columns and universal bearing piles (H sections), of a height greater than 130mm and less than 650mm;

channels (U sections and C sections) of a height greater than 130mm and less than 400mm; and

equal and unequal angles (L sections), with a combined leg length of greater than 200mm.

Sections and/or shapes in the dimensions described above, that have minimal processing, such as cutting, drilling or painting do not exclude the goods from coverage of the investigation.

2.1.1 Excluded goods

The measures do not apply to the following goods:

hot rolled ‘T’ shaped sections, sheet pile sections and hot rolled merchant bar shaped sections, such as rounds, squares, flats, hexagons, sleepers and rails; and

sections manufactured from welded plate (e.g. welded beams and welded columns).

2.1.2 Tariff Classifications

Goods identified as hot rolled non-alloy steel sections, as per the shapes and sizes described above, are classified to the following tariff subheadings in schedule 3 to the Customs Tariff Act 1995:

Tariff subheading Statistical code

7216.31.00 30

7216.32.00 31

7216.33.00 32

7216.40.00 33

Table 1 – HRS Tariff Subheadings

Goods identified as hot rolled alloy steel sections, as per the shapes and sizes described above, are classified to tariff subheading 7228.70.00 (statistical codes 11 and 12) in schedule 3 of the Customs Tariff Act 1995.

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2.2 The Australian industry

Liberty Steel is the only manufacturer of HRS in Australia. Liberty Steel’s manufacturing facilities are:

the fully integrated Whyalla Steelworks including the hot rolled structural steel mill;

two electric arc furnaces (EAF) located in Newcastle, New South Wales and Laverton, Victoria;

bar mills at Sydney and Laverton;

rod mills at Newcastle and Laverton; and

wire mills located in various locations in Australia.

At the verification visit, Liberty Steel described its process to produce HRS. Liberty Steel also accommodated a tour of the Whyalla Steelworks. The Whyalla Steelworks produces semi-finished steel for Liberty Steel’s rolling facilities across all of its sites. The Whyalla Steelworks produces steel using a basic oxygen steelmaking (BOS) system, in which liquid steel is cast into blooms, billets, or slabs. Bloom is the feed product for making HRS. Billet is used as feed for rod and bar products (not subject to this inquiry). Slab is produced for export (not subject to this inquiry). HRS that is made by the Australian industry and that is the subject of this inquiry is all produced at the Whyalla Steelworks.

2.3 Like goods

Like goods, in relation to the goods under consideration, are defined under section 269T(1) of the Customs Act 1901 as:

… goods that are identical in all respects to the goods under consideration or that, although not alike in all respects to the goods under consideration, have characteristics closely resembling those of the goods under consideration.

In its application, Liberty Steel claimed that the imported goods possess similar characteristics to the locally produced goods. The following summarises the verification team’s assessment of whether the locally produced goods are identical to, or closely resemble, the goods the subject of the application and are thereby like goods.

The Commission considers that the Australian industry produces like goods on the following grounds:

Physical likeness: The primary physical characteristics of the goods and locally produced goods have similar shape, dimensions, appearance, weight and are produced to meet Australian standards;

Commercial likeness: The goods manufactured by the Australian industry and the imported goods are commercially alike, directly competitive and are sold to common customers in the Australian market;

Functional likeness: Both the goods manufactured by the Australian industry and the imported goods are functionally alike as they have the same range of end uses; and

Production likeness: The goods manufactured by the Australian industry are manufactured in a similar manner to the imported goods.

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The findings on physical, commercial, functional and production likeness described above, and in REP 223, confirm that Liberty Steel produces goods that have characteristics closely resembling the goods the subject of the application.

The Commission considers that at least one substantial process in the manufacture of HRS is carried out in Australia and that the goods manufactured by Liberty Steel to be like goods to the goods under consideration.

2.3.1 Model Control Code structure

As set out in ADN No. 2019/21, the Commission will undertake model matching using the proposed Model Control Code (MCC) structure to identify key characteristics that will be used to match models of the goods exported to Australia and like goods sold domestically in the country of export.

Table 2 – Model control codes

Liberty Steel provided sales data for the Australian industry in its application in accordance with the MCC structure set out in Table 2.

2.4 Preliminary assessment

The verification team is satisfied that there are like goods wholly manufactured in Australia by Liberty Steel, and that there is therefore an Australian industry, being Liberty Steel, producing like goods.

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3 THE AUSTRALIAN MARKET

The analysis detailed in this chapter is based on verified information submitted by Liberty Steel, importers and exporters, import data from the Australian Border Force (ABF) and submissions by interested parties. This analysis has also been conducted with regard to qualitative information related to market structure, practices and trends provided by interested parties or obtained by the Commission.

3.1 The Australian HRS market

The Commission has found that the Australian HRS market is predominantly supplied by several distributors. The distributors source products from the Australian industry or from overseas suppliers. Most of the distributors’ HRS sales are to end users who further process the goods into other products. These end users are in the construction, manufacturing and mining industries.

Figure 1 indicates the size of the entire Australian HRS market has fluctuated since 2010. In 2018 it was slightly larger than 2010.

Figure 1 – Australian HRS Market Size

At the verification visit, Liberty Steel stated the following.

In respect of exports of HRS from Japan, volumes increased during the original investigation in 2014 and declined thereafter indicating that exporters from Japan are willing export the goods where anti-dumping measures are not present or ineffective and that they are able to do so because they have maintained distribution links in the Australian market.

In respect of exports of HRS from Korea, volumes increased after the original investigation in 2014 because a low dumping margin coupled with ad valorem form

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of measures allowed Hyundai to absorb the anti-dumping measures by decreasing its export prices.

In respect of exports of HRS from Taiwan, the setting of a floor price for Tung Ho Steel Enterprise (Tung Ho) in Review 346 caused the anti-dumping measures to become ineffective and Tung Ho increased its export volumes.

In respect of exports of HRS from Thailand, once market prices rose above the floor price set for Siam Yamato Steel (SYS) in Review 346, the anti-dumping measures became ineffective and SYS increased its export volumes.

At the verification visit, Liberty Steel also stated that these export activities indicate that exporters of HRS from Japan, Korea, Taiwan and Thailand are willing to export the goods at dumped prices if anti-dumping measures were discontinued or ineffective.

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4 VERIFICATION OF SALES

4.1 Verification of sales data to financial statements

The verification team verified the completeness and relevance of Liberty Steel’s sales listing by reconciling it to management reports and audited financial statements in accordance with ADN No. 2016/30.

The verification team did not identify any issues with the verification of the sales listing to management reports and audited financial statements.

Details of this verification process are contained in the verification work program at Confidential Attachment 1.

4.2 Verification of sales data to source documents

The verification team verified the accuracy of Liberty Steel’s sales listing by reconciling it to source documents in accordance with ADN No. 2016/30.


The verification team did not identify any material matters during this process.

4.3 Related party customers

The verification team identified that a significant proportion of Liberty Steel’s sales were made to related party customers.

The verification team compared the selling prices and price determination methods between related and unrelated customers and is satisfied Liberty Steel’s sales to its related customers are arm’s length transactions.

Further details of the work undertaken are contained in the verification work program at Confidential Attachment 1.

4.4 Imports by the applicant

Liberty Steel imported a small volume of the goods during the inquiry period.

The Commission examined the ABF import database and confirmed that products matching the goods description were imported by Liberty Steel during the inquiry period.

4.5 Export sales

Liberty Steel exported a small volume of like goods during the inquiry period. The verification team considered the volume exported immaterial compared to the volume of domestic sales and therefore these sales were not examined in detail.

4.6 Sales – conclusion

The verification team considers that the sales listing provided by Liberty Steel is complete, relevant and an accurate reflection of sales of the goods during the inquiry period.

The verification team considers Liberty Steel’s sales data to be suitable for analysing the financial and economic performance of its operations during the inquiry period.

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5 VERIFICATION OF COST TO MAKE AND SELL

5.1 Verification of costs to financial statements

The verification team verified the completeness and relevance of Liberty Steel’s cost data by reconciling it to audited financial statements and management reports in accordance with ADN No. 2016/30.


The verification team identified an issue with the reported selling, distribution and administration expenses, as outlined below.

5.1.1 Selling, distribution and administration expenses

The verification team identified a formula error in respect of Liberty Steel’s determination of administrative expenses. Specifically it had incorrectly calculated the sales volume which resulted in a material adjustment to the unit administration cost. Liberty Steel submitted a revised Appendix A6 cost to make and sell (CTMS) worksheet. The Commission is satisfied that the revised spreadsheet is accurate. Details of this exception can be found at Confidential Attachment 1.

5.2 Verification of costs to source documents

The verification team verified the accuracy of Liberty Steel’s cost data by reconciling it to source documents in accordance with ADN No. 2016/30.


The verification team did not find any issues with the verification of the costs data to source documents.

5.3 Related party suppliers

The verification team observed that a significant proportion of Liberty Steel’s raw materials and inputs to its production processes are purchased from related parties and that the price paid to related parties is based on market rates.

The verification team is satisfied that prices paid to related party suppliers are arm’s length transactions.

5.4 Costs to make and sell – conclusion

The verification team considers that Liberty Steel’s revised CTMS data at Appendix A6 is a reasonably complete, relevant and accurate reflection of the actual costs to manufacture and sell the goods during the inquiry period.

The verification team compared the verified costs for the inquiry period with the costs provided in the Appendix A6 on a quarterly basis and is satisfied these costs are suitable for analysing the economic performance of Liberty Steel’s HRS operations during the period from 1 January 2014 (the injury analysis period).

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6 ECONOMIC CONDITION OF LIBERTY STEEL

In its application, Liberty Steel claims, among other things, that:

If the anti-dumping measures expire, exports from Japan, Korea, Taiwan and Thailand at dumped prices will continue or recur and will cause it to experience material injury.

Exporters from Japan, Korea, Taiwan and Thailand have maintained their distribution channels to Australia and have continued to export the goods under consideration to Australia.

Steel exporters are affected by global overcapacity and trade distortions from several steel trade defence actions abroad.

Liberty Steel’s domestic prices are directly influenced by the price of imported goods. Applications for reviews and accelerated reviews by exporters in respect of the goods under consideration indicate their intent to continue to export the goods to Australia.

In its application for the continuation of measures, Liberty Steel indicated that continued dumping would cause it to experience material injury in the forms of reduced:

prices;

sales volume;

revenue;

profit and profitability;

market share; and

capacity utilisation.

This chapter considers the economic condition of the Australian industry from 1 January 2010 to 31 December 2018. This period has been examined in order to analyse trends in the economic condition of the Australian industry before and after the imposition of the anti-dumping measures.

6.1 Import parity pricing

In the original investigation (223), the Commission found that OneSteel sets its prices by applying an Import Parity Pricing (IPP) process in which it must negotiate prices with reference to offers made in the HRS market for imported goods. It was found that HRS exported to Australia from the subject countries at dumped prices required Liberty Steel to match those prices. This resulted in OneSteel achieving lower prices than it might have otherwise and consequently experiencing material injury.

In its application for the continuation of measures, Liberty Steel stated that it continues to apply the IPP process and that pricing in the Australian market is driven by prices of HRS exported from Japan, Korea, Taiwan and Thailand. Liberty Steel also stated that known import offers in the market are used as a tool by customers to negotiate lower prices from Liberty Steel.

The verification team found that Liberty Steel does continue to apply the IPP process and that the processes of price setting and negotiation described in REP 223 and in Liberty Steel’s application remain in place.

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6.2 Price depression and price suppression

Price depression occurs when a company, for some reason, lowers its prices. Price suppression occurs when price increases, which otherwise would have occurred, have been prevented. An indicator of price suppression may be the margin between revenues and costs.

Figure 2 indicates Liberty Steel’s unit price and unit cost to make and sell (CTMS) for HRS.

Figure 2 – Indices of Liberty Steel HRS Unit Revenue and Cost to Make and Sell

After anti-dumping measures were imposed, Liberty Steel’s HRS prices fell but recovered to new high levels by 2018. As such, it is not possible to conclude that Liberty Steel has experienced price depression in that time. However, Liberty Steel has been unable achieve prices sufficiently high to cover the increasing CTMS of HRS. As such, the Commission considers that Liberty Steel has experienced injury in the form of price suppression.

6.1 Profit and profitability

Figure 3 indicates Liberty Steel’s unit profit and unit profitability (unit gain or loss divided by unit price) for HRS.

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Figure 3 –Liberty Steel Profitability

Figure 4 indicates Liberty Steel’s unit profit or loss for HRS.

Figure 4 –Liberty Steel Unit Gain or Loss

Since 2014, the year when anti-dumping measures were imposed, Liberty Steel’s unit profit and profitability of HRS sold in Australia declined. In 2018, profit and profitability recovered somewhat, but only to similar levels of loss as those achieved before anti-dumping measures were put in place. Liberty Steel has not achieved positive results on profit and profitability in the entire period since 2010.

The Commission considers that Liberty Steel has experienced injury in the forms of reduced profits and profitability.

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6.2 Sales revenue

Figure 5 indicates Liberty Steel’s net sales revenue for HRS in the Australian market.

When anti-dumping measures were imposed in November 2014, net sales revenue was in decline. This decline continued in 2015. Since 2015, sales revenue recovered somewhat, but not to levels achieved from 2011 to 2014.

Figure 5 – Index of Liberty Steel HRS Net Sales Revenue

6.3 Sales volume

Figure 6 indicates Liberty Steel’s total sales volumes for HRS in the Australian market.

When anti-dumping measures were imposed in November 2014, sales volumes were in decline. This decline continued in 2015. Since 2015, sales volumes recovered somewhat, but not to levels achieved from 2010 to 2014.

Figure 6 – Index of Liberty Steel HRS Sales Volume

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6.4 Market share

Figure 7 indicates Liberty Steel’s market share by volume increased from 2010 to 2013 and then decreased until 2017. It recovered somewhat in 2018, but not to levels achieved before or since anti-dumping measures were imposed in 2014. The annual volume of sales and market share of HRS from countries or exporters not under consideration has not been material since 2010.

Figure 7– Australian HRS Market Shares by Volume

6.5 Other economic factors

In Appendix A7 to the application, Liberty Steel provided information in relation to other injury factors on a financial year (July to June) basis for the period from 1 July 2009 to 30 June 2108.

6.5.1 Capacity utilisation

Figure 8 indicates Liberty Steel’s capacity utilisation, which is based on the highest production level achieved in 2013/14, the greatest amount it has achieved for HRS, has trended downwards since 2009/10.

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Figure 8 – Liberty Steel HRS Production Capacity Utilisation

6.5.2 Capital investment

Figure 9 indicates Liberty Steel’s level of capital investment in the production of HRS has remained relatively constant from 2010 to 2016 apart from 2011 when the blast furnace was upgraded.

Figure 9 – Index of Liberty Steel Capital Investment in HRS Production (A$)

6.5.3 Return on investment

Figure 10 indicates Liberty Steel’s return on investment (ROI) in the production of HRS declined from 2010 to 2016. From 2016 to 2018, ROI recovered to 2010 levels. However, ROI has been negative for the entire period since 2010 except for 2013 when it was positive by a marginal amount.

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Figure 10 – Liberty Steel Return on Investment in HRS Production

6.5.4 Employment

Figure 11 indicates Liberty Steel’s staff levels related to the production of HRS have declined since 2010.

Figure 11 – Index of Liberty Steel Employees in HRS Production

6.5.5 Wages

Figure 12 indicates Liberty Steel’s average paid to staff producing HRS has increased overall since 2010, but has fallen since 2014.

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Figure 12 – Liberty Steel Employees Average Wages (A$ per hour)

6.5.6 Productivity

Figure 13 indicates Liberty Steel’s productivity, measured as the tonnes of like goods produced per person hour, increased from 2010 to 2014, but has since declined to a level similar to that in 2010.

Figure 13 – Index of Liberty Steel HRS Productivity (tonnes per hour)

6.6 Conclusion

Based on an analysis of the information provided by Liberty Steel in the application and verified during the verification visit, the verification team considers that Liberty Steel has experienced injury since 2010 in the forms of:

price suppression;

reduced sales volume;

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reduced revenue;

reduced profit and profitability;

reduced market share; and

reduced capacity utilisation.

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7 IMPACT OF THE EXPIRY OF ANTI-DUMPING MEASURES

Subsection 269ZHF(2)) provides that the Commissioner must not recommend that the Minister take steps to secure the continuation of the anti-dumping measures unless the Commissioner is satisfied that the expiration of the anti-dumping measures would lead, or would be likely to lead, to a continuation of, or a recurrence of:

the dumping; and

the material injury that the anti-dumping measure is intended to prevent.

Liberty Steel claims that should the measures expire, this would lead to a continuation or a recurrence of dumping and that that would cause material injury to the company.

7.1 Continuation or recurrence of dumping

At the visit, Liberty Steel reiterated claims that it made in its application that:

Steel exporters are being impacted by global overcapacity and trade distortions resulting from several steel trade defence actions abroad.

Exporters from Japan, Korea, Taiwan and Thailand have maintained their distribution channels to Australia and have continued to export the goods under consideration to Australia.

Exports of the goods increased when, as Liberty steel claims, anti-dumping measures were either outdated or not effective.

Applications for reviews and accelerated reviews by exporters in respect of the goods under consideration indicate their intent to continue to export the goods to Australia.

The verification team has found that exporters of HRS from Japan, Korea, Taiwan and Thailand have maintained their distribution channels to Australia and have continued to export the goods under consideration to Australia. The other claims made by Liberty Steel will be further analysed by the case team with reference to the claims made by Liberty Steel and other pertinent information. This analysis will be described in the SEF.

7.2 Continuation or recurrence of material injury

At the visit, Liberty Steel reiterated its claim that domestic prices are directly influenced by the price of imported goods. The verification team’s finding that Liberty Steel continues to apply the IPP process supports Liberty Steel’s claim. This claim will be further analysed by the case team with reference to the claims made by Liberty Steel and other pertinent information. This analysis will be described in the SEF.

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8 UNSUPPRESSED SELLING PRICE

Unsuppressed selling price (USP) and non-injurious price (NIP) issues are examined at an early stage of an inquiry. The Commission generally derives the NIP by first establishing a price at which the applicant might reasonably sell its product in a market unaffected by dumping. This price is referred to as the USP.

As part of the inquiry, the Commission will establish the USP. The USP is generally established by using the following hierarchy:

Market approach: industry selling price at a time when the Australian market was unaffected by dumping;

Construction approach: the Australian industry’s CTMS, plus a reasonable rate of profit; or

Selling prices of un-dumped imports in the Australian market.

Having calculated the USP, the Commission then calculates the NIP by deducting costs incurred in getting the goods to the Free on Board (FOB) point at export (or another point if appropriate). The deductions normally include overseas freight, duty, insurance, into store costs and amounts for other importer expenses and profit.

At the visit, Liberty Steel claimed that the Australian HRS market has been affected by dumping for a long time and that the market approach is not suitable.

Liberty Steel claimed that the construction approach is the most suitable and that the rate for profit of 8 per cent for the steel industry would be appropriate because a recently concluded European safeguard inquiry determined this to be a minimum rate for the steel industry.

Liberty Steel claimed that the selling prices of un-dumped imports in the Australian market approach is not suitable because it is impossible to assert that non-dumped goods are unaffected by dumped goods.

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9 FORM OF MEASURES

At the visit, Liberty Steel claimed that the combination method of interim duty calculation is the most effective means of ensuring that sufficient interim duty is collected to cover the correct amount of final duty payable. At the visit, Liberty Steel demonstrated why it considers that the combination form of measures is a more efficient model (when compared to measures in the form of an ad valorem rate) at achieving this outcome in both rising and falling markets.

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10 APPENDICES AND ATTACHMENTS

Confidential Attachment 1 Verification work program

Confidential Appendix 1 Revised Appendices

HOT ROLLED STRUCTURAL STEEL SECTIONS · semi-finished steel for Liberty Steel’s rolling facilities across all of its sites. The Whyalla Steelworks produces steel using a basic oxygen

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