Anti-dumping investigation: everything you need to knowAs a fastener specialist, we closely follow the developments within the industry. On this page, you will find answers to frequently asked questions about the ongoing ant-dumping investigation and everything we know about ADD so far.
What is anti-dumping?
We can speak of “dumping” when a non-EU producer exports its products to the EU at prices that are below the normal market value. The normal market value is based on the cost price of the product or the selling price that applies in the home market of the non-EU producer.
The EU introduced anti-dumping policy to protect European production from these kind of dumping practices and to ensure a competitive environment for the EU industry. This means that European producers can file a complaint if they believe that dumping is negatively impacting their business.
After receiving an anti-dumping complaint, it is the European Commission’s responsibility to investigate the claim. If there is enough evidence, the EC will open an anti-dumping investigation. The investigation checks if products are indeed being dumped and whether those dumping practices cause injury to the European production. Based on the results of the research, the Commission may put anti-dumping measures in place.
What is currently happening in the fastener industry?
The EC announced that they started an investigation to determine if Chinese fastener producers have been dumping products in the EU. They decided on this investigation after receiving an official claim from the European association of fastener producers, the European Industrial Fastener Institute (EIFI).
The investigation consists of multiple components:
- A procedure to determine if there is dumping by producers from China. A sample of exporting producers will be invited to participate and to provide the Commission with the necessary information. It is important to confirm that the research is limited to Chinese producers, other Asian countries will not be investigated.
- A procedure to conclude if the EU is indeed injured by dumping. The EC will examine the volume of the dumped imports, their impact on prices in the EU and the effect on the European production industry. A sample of EU producers will be asked to cooperate in this part.
- A procedure to check if putting anti-dumping measures in place is not against the European interest.
It is expected that the EC will conclude the investigation by July 2021. If the conclusions of the investigation are affirmative, the Commission may decide to implement Anti-Dumping Duties (ADD). Generally these duties are in the form of an additional levy as a percentage of the invoiced amount.
What products are in scope?
The scope of the investigation is all European imports of carbon steel fasteners originating in China, with the exception of nuts, threaded rods and stud bolts.
What are the potential consequences?
Duties impact price
We have to await the outcome of the investigation to know if duties will be enforced and what the duty percentages will be. However, earlier ADD investigations over the past three decades did result in ADD measures being imposed. The previous ADD measures that were in place until 2016, included duty percentages of 85%, covering a similar scope.
Pending the investigation, the Commission may already impose temporary ADD. Upon concluding the investigation, the EC may also impose ADD retrospectively, going back 90 days. This means that any time after today, we may face a sudden price increase which is likely to have an effect on our pricing decisions consequently.
Other consequences are related to the availability of impacted products. Overall we are seeing an increased scarcity of high volume products in impacted categories. Fastener distributors are scavenging the market for these fasteners. As a result, we are forced to actively search for alternative channels.
Are other suppliers in the market also affected by this?
Yes, the changes that we already see happening as a response to the investigation, impact the European fastener industry as a whole. China is an important provider of fasteners for European suppliers. If the EC decides to put anti-dumping measures in place, these will apply to all suppliers that import products from China. It prompts us and our fellow suppliers to rethink the supply chain of the impacted fasteners.
What will happen In the long term?
ADD are generally in place for five years. After this period measures end unless the EC decides to do an expiry review. Changed circumstances of the exporters can be a reason for such an evaluation.