# EUR-Lex - 52013PC0256 - EN

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# 52013PC0256

**Proposal for a COUNCIL IMPLEMENTING REGULATION imposing a definitive anti-dumping duty on imports of certain tungsten electrodes originating in the People's Republic of China following an expiry review pursuant to Article 11(2) of Council Regulation (EC) No 1225/2009 /* COM/2013/0256 final - 2013/0134 (NLE) */**

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EXPLANATORY MEMORANDUM

Context of the proposal

|| Grounds for and objectives of the proposal This proposal concerns the application of Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community (‘the basic Regulation’), in the expiry review proceeding concerning the anti-dumping duty in force in respect of imports of certain tungsten electrodes originating in the People's Republic of China (‘the PRC’). ||

|| General context This proposal is made in the context of the implementation of the basic Regulation and is the result of an investigation which was carried out in line with the substantive and procedural requirements laid out in the basic Regulation.

|| Existing provisions in the area of the proposal By Regulation (EC) No 260/2007[1] the Council imposed a definitive anti-dumping duty on imports of tungsten electrodes originating in the PRC. The measures took the form of an ad valorem duty at the level of 63,5%. Individual anti-dumping duty rates were granted to three Chinese exporters (rates from 17,0% to 41,0%).

|| Consistency with other policies and objectives of the Union Not applicable.

Consultation of interested parties and impact assessment

|| Consultation of interested parties

|| Interested parties concerned by the proceeding have had the possibility to defend their interests during the investigation, in line with the provisions of the basic Regulation.

|| Collection and use of expertise

|| There was no need for external expertise.

|| Impact assessment This proposal is the result of the implementation of the basic Regulation. The basic Regulation does not provide for a general impact assessment but contains an exhaustive list of conditions that have to be assessed.

Legal elements of the proposal

|| Summary of the proposed action On 9 March 2012, the Commission announced by a notice, published in the Official Journal of the European Union[2], the initiation of an expiry review of the anti-dumping measures applicable to imports of tungsten electrodes originating in the PRC. The review was initiated following a substantiated request lodged by European Association of Metals (EUROMETAUX) on behalf of Union producers representing more than 25% of the Union production of certain tungsten electrodes. The review investigation found continuation of dumping and injury should anti-dumping measures be lifted. It was further established that the maintenance of measures was not against the interest of the Union. Therefore, it is suggested that the Council adopts the attached proposal for a Regulation, which should be published in the Official Journal of the European Union by 4 June 2013 at the latest, in order to prolong the existing measures.

|| Legal basis Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community.

|| Subsidiarity principle The proposal falls under the exclusive competence of the European Union. The subsidiarity principle therefore does not apply.

|| Proportionality principle The proposal complies with the proportionality principle for the following reasons:

|| The form of action is described in the above-mentioned basic Regulation and leaves no scope for national decision.

|| Indication of how financial and administrative burden falling upon the Union, national governments, regional and local authorities, economic operators and citizens is minimized and proportionate to the objective of the proposal is not applicable.

|| Choice of instruments

|| Proposed instruments: regulation.

|| Other means would not be adequate for the following reason: The basic Regulation does not provide for alternative options.

Budgetary implication

|| The proposal has no implication for the Union budget.

2013/0134 (NLE)

Proposal for a

COUNCIL IMPLEMENTING REGULATION

imposing a definitive anti-dumping duty on
imports of certain tungsten electrodes originating in the People's Republic of China following an expiry review pursuant to Article 11(2) of Council Regulation (EC) No 1225/2009

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union,

Having regard to Council Regulation (EC) No
1225/2009 of 30 November 2009 on protection against dumped imports from
countries not members of the European Community [3]
('the basic Regulation'), and in particular Article 9(4) and 11(2), (5) and (6)
thereof,

Having regard to the proposal from the
European Commission ('Commission') after consulting the Advisory Committee,

Whereas:

A. PROCEDURE

1.           Measures in force

(1)       Following an investigation (the 'original investigation')
the Council, by Regulation (EC) No 260/2007[4], imposed
a definitive anti-dumping duty on imports of certain tungsten electrodes
originating in the People’s Republic of China (‘the PRC’) (the 'original measures').
The measures took the form of an ad valorem duty of 63,5% for all
companies except three Chinese exporting producers to whom individual duties
were granted.

2.           Initiation of an expiry
review

(2)       On
9 March 2012, the Commission announced by a notice (‘Notice of initiation’)[5], published in the Official Journal of the European Union,
the initiation of an expiry review of the anti-dumping measures applicable to
imports of certain tungsten electrodes originating in the People's Republic of
China ('the PRC').

(3)       The review was initiated
following a substantiated request lodged by Eurométaux (‘the applicant’) on
behalf of a Union producer representing more than 50%, of the Union production
of certain tungsten electrodes.

(4)       The request was based on
the grounds that the expiry of the measures would be likely to result in a
continuation of dumping and injury to the Union industry.

3.           Investigation

3.1.        Review investigation period
and the period considered

(5)       The investigation of continuation
or recurrence of dumping covered the period from 1 January 2011 to 31 December
2011 (‘the review investigation period’ or ‘RIP’). The examination of the
trends relevant for the assessment of the likelihood of continuation or
recurrence of injury covered the period from 1 January 2008 to the end of the
RIP (‘the period considered’).

3.2.        Parties concerned by the
investigation

(6)       The Commission officially
advised the applicant, the other known Union producer, exporting producers in
the PRC, unrelated importers and users known to be concerned, producers in the potential
analogue countries and the representatives of the PRC of the initiation of the
expiry review. Interested parties were given the opportunity to make their
views known in writing and to request a hearing within the time limit set out
in the Notice of initiation.

(7)       All interested parties,
who so requested and showed that there were particular reasons why they should
be heard, were granted a hearing.

(8)       In view of the apparently
large number of exporting producers in the PRC and unrelated importers in the Union involved in the investigation, sampling was envisaged in the Notice of initiation, in
accordance with Article 17 of the basic Regulation. In order to enable the
Commission to decide whether sampling would be necessary and, if so, to select
a sample, the above parties were requested, pursuant to Article 17 of the basic
Regulation, to make themselves known within 15 days of the publication of the
notice of initiation and to provide the Commission with the information
requested in the Notice of initiation.

(9)       Three importers made
themselves known. None of them, however, imported certain tungsten electrodes
originating in the PRC during the RIP.

(10)     As only two exporting
producers from the PRC came forward with the requested information it was not
necessary to select a sample of exporting producers.

(11)     The Commission sent
questionnaires to all parties known to be concerned and to those who made
themselves known within the deadlines set in the Notice of initiation. Replies
were received from two Union producers, two exporting producers in the PRC and
one producer in the USA.

(12)     The Commission sought and
verified all the information it deemed necessary for the determination of the
likelihood of continuation or recurrence of dumping and resulting injury and of
the Union interest. Verification visits were carried out at the premises of the
following companies:

(a)
Union producers

–
Plansee SE, Austria

–
Gesellschaft für Wolfram Industrie mbH, Germany

(b)
Exporting producers in the PRC

–
Shandong Weldstone Tungsten Industry Co., Ltd., Zibo,

–
Shaanxi Yuheng Tungsten & Molybdenum
Industrial Co., Ltd Baoji

(c)
Related company to one cooperating
exporting producer in the PRC

–
Shanghai Weldstone Asia Co., Ltd., Shanghai

(d)
Related companies to one cooperating
exporting producer in the European Union

–
Weldstone GmbH, Wilnsdorf, Germany

–
Binzel Benelux bvba, Eke – Nazareth, Belgium

(e)
Analogue Country

–
Global Tungsten & Powders Corp, Towanda, USA

B. PRODUCT UNDER REVIEW AND LIKE
PRODUCT

(13)     The
product concerned is the same as that covered by Council Regulation (EC) No
260/2007, namely tungsten welding electrodes, including tungsten bars and rods
for welding electrodes, containing 94% or more by weight of tungsten, other
than those obtained simply by sintering, whether or not cut to length,
originating in the PRC (‘TE’ or ‘the product under review’), currently falling
within CN codes ex 8101 99 10 and ex 8515 90 00.

(14)     The product under review is
used in welding and similar processes. TE are used in a wide variety of
industrial sectors such as construction, shipbuilding, automobile
manufacturing, marine, chemical and nuclear engineering, aerospace as well as
oil and gas pipelines. Based on the physical and chemical characteristics and
the substitutability of the different types of the product from the perspective
of the user, all TE are considered to constitute a single product for the
purpose of this proceeding.

(15)     The investigation confirmed
that, as in the original investigation, the product under review and that
manufactured and sold on the domestic market of the PRC, as well as that produced
and sold by the Union industry on the Union market and that produced and sold
on the analogue country market have the same basic physical and technical
characteristics and the same basic uses and are therefore considered to be
alike within the meaning of Article 1(4) of the basic Regulation.

C. LIKELIHOOD OF A CONTINUATION OR
A RECURRENCE OF DUMPING

1.           Preliminary remarks

(16)     In accordance with Article
11(2) of the basic Regulation, it was examined whether dumping was currently
taking place and whether the expiry of the existing measures would be likely to
lead to a continuation or recurrence of dumping.

(17)     As explained above, it was
not necessary to select a sample of exporting producers in the PRC. The two
cooperating companies covered the imports of product concerned from the PRC to
the Union in a range of 80% to 85% during the RIP. On this basis, it was
concluded that cooperation was high.

(18)     One of the cooperating
exporting producers benefited from market economy treatment (‘MET’) in
accordance with Article 2(7)(c) of the basic Regulation, while the second
benefited from individual treatment (‘IT’) in accordance with Article 9(5) of
the basic Regulation, granted to them during the original investigation. It is
recalled that in the context of investigations in accordance with Article 11(2)
of the basic Regulation, MET and IT are not reconsidered. A third company, who
did not cooperate in the current expiry review, was granted IT in the original
investigation.

2.           Dumping of imports during
the RIP

2.1.        Analogue country

(19)     Since the PRC is an economy
in transition and in accordance with the provisions of Article 2(7)(a) of the
basic Regulation, normal value for exporting producers not granted market
economy treatment has to be determined on the basis of the price or constructed
value in an appropriate market economy third country (‘analogue country’).

(20)     As in the original
investigation, the United States of America (‘the USA’) was proposed as
analogue country in the Notice of initiation for the purpose of establishing
normal value. Interested parties were given the opportunity to comment on the
appropriateness of this choice. No comments were received in this regard.

(21)     The Commission also examined
whether other countries could be a reasonable choice of an analogue country and
identified other third countries from
which imports of tungsten electrodes were recorded in Eurostat. Potential known
producers in these countries were contacted and invited to cooperate in the
investigation. However, no cooperation was obtained.

(22)     It was considered that the USA was representative as a reference market, especially in view of the openness and
competitiveness of their domestic market. The USA was used also as an analogue
country in the original investigation. No new or changed circumstances which
would justify a change appeared to exist nor were any such circumstances communicated
to the Commission.

(23)     Therefore, the USA has been used as an analogue market economy country for the purpose of this review. The
only known USA producer was contacted and agreed to cooperate, to reply to the
questionnaire and to accept a verification visit. The verified sales and
production figures of this company have been used for the determination of the
normal value for companies not granted MET during the original investigation.

2.2.        Normal value

(24)     For the company granted MET
in the original investigation, normal value has been established based on its
data. In accordance with Article 2(2) of the basic Regulation, it was examined
whether the domestic sales of TE to independent customers were representative
during the RIP, i.e. if the sales volume of the product intended for domestic
consumption represented 5 % or more of their exports of the product under
review to the Union.

(25)     It was subsequently
examined whether the domestic sales of the like product could be regarded as
being made in the ordinary course of trade pursuant to Article 2(4) of the
basic Regulation, by establishing the proportion of profitable sales to
independent customers on the domestic market.

(26)     For the types of the
product concerned where the domestic sales were representative and made in the
ordinary course of trade, normal value was established on the prices paid by
independent customers in the exporting country. For the remaining types of the
product under review the normal value had to be constructed in accordance with
Article 2(3) of the basic Regulation. Therefore, the established normal value
was calculated using the company’s cost of manufacturing and adding selling,
general and administrative costs (SG&A) and profit achieved on the domestic
sale made in the ordinary course of trade in accordance with Article 2(6) of
the basic Regulation.

(27)     Following disclosure one
party argued that the methodology used to determine SG&A expenses was
different from the one used in the original investigation which may have had an
impact on the determination of the profit margin used to calculate the
constructed normal value in accordance with Article 2(6) of the basic
Regulation. Further to the information already previously submitted in the
investigation the party did not substantiate its claim by any evidence. It is
noted that in accordance with Article 2(5) of the basic Regulation SG&A
expenses were allocated on turnover basis and that this methodology was also
used in the original investigation.

(28)     Profit used in the initial
investigation was not from the OCOT test (ordinary course of trade) as none of
the exported types of the product concerned were sold on the domestic market in
the ordinary course of trade. The current expiry review showed that some types
of the product concerned were profitable and therefore, in compliance with
Article 2(3) and (6) of the basic Regulation, profit of these profitable
transactions was used for constructing the normal value.

(29)     As far as the company not
granted MET in the original investigation is concerned, pursuant to Article
2(7)(a) of the basic Regulation, normal value was established on the basis of
information collected from the cooperating producer in the analogue country. Domestic
sales of the producer in the analogue country were found to be made in
sufficient quantities and in the ordinary course of trade and could thus be
used as a basis to determine normal value for the company not granted MET.

2.3.        Export price

(30)     Regarding
the company granted MET, all export sales to the Union were made via related
importers and subsequently resold to related and unrelated companies in the Union. The export price was therefore constructed, pursuant to Article 2(9) of the basic
Regulation, on the basis of the price at which the imported products were first
resold to an independent buyer, duly adjusted for all costs incurred between
importation and resale, as well as a reasonable margin for SG&A and
profits. In this regard, the related companies’ own SG&A costs were used.

(31)     Following
disclosure one party argued that when determining SG&A of the related
importers, certain expenses were taken into consideration that were related to the
sales of other products than the product concerned and that these expenses should
therefore be excluded. It is noted that the verified SG&A expenses as
provided by the companies concerned were taken into consideration when
constructing the export price in accordance with Article 2(9) of the basic
Regulation. The claim that the SG&A expenses reported included SG&A
expenses from sales of other products was not supported by any evidence and had
therefore to be rejected.

(32)     In
addition, the comments submitted by on interested party on export prices were
based on an erroneous quotation of the relevant currency. Therefore this claim
was rejected.

(33)     As far
as the profit margin is concerned, none of the unrelated importers in the Union cooperated. In the original investigation, the profit margin of the related importers
was used, based on the fact that the activities of the unrelated importers were
not sufficiently comparable to that of the related importer concerned. The investigation
showed that the activities of the related importer were the same during the RIP
as during the investigation period of the original investigation, i.e. the
majority of the TE imported was further integrated into the main product
produced by the group, the welding torch. It should also be noted that the TE
are of minor value compared to the end-product. On this basis and as in the
original investigation it was concluded that the related importer’s own profit
margin would constitute an accurate basis for a profit margin to construct the
export price.

(34)     Regarding
the company granted IT in the original investigation, all export sales to the
Union were made directly to independent customers established in the Union. In accordance with Article 2(8) of the basic Regulation, the export price was therefore
established on the basis of the prices actually paid or payable.

(35)     The
determination of the export price of all other producers established in the PRC
was based on imports statistics available in the Article 14(6) database.

(36)     In
accordance to Article 11(10) of the basic Regulation, export prices were
established by deducting the anti-dumping duties paid, as none of the parties
submitted anyevidence that the duty was duly reflected in resale prices and
subsequent selling prices in the Union market.

2.4.        Comparison

(37)     The comparison between
normal value and export price was made on an ex-works basis.

(38)     For the purpose of ensuring
a fair comparison between the normal value and the export price of the both cooperating
exporting producers, and in accordance with Article 2(10) of the basic
Regulation, due allowance in the form of adjustments was made with regard to
differences in transport, insurance and credit costs which affected prices and
price comparability.

2.5.        Dumping margin

(39)     As provided for under
Article 2(11) of the basic Regulation, the dumping margin was established on
the basis of a comparison of the weighted average normal value with the
weighted average export price.

(40)     For the cooperating
exporting producer granted MET in the original investigation this comparison
showed that this company continued dumping at significant levels.

(41)     For the cooperating
exporting producer granted IT in the original investigation as well as country-wide
dumping margin applicable to all other non-cooperating exporting producers in the
PRC showed a significant level of dumping even higher than in the original
investigation.

3.           Development of imports
should measures be repealed

3.1.        Preliminary remark

(42)     Further to the finding of
the existence of dumping during the RIP, the likelihood of continuation of
dumping should measures be repealed was investigated.

(43)     In this regard, it should
be noted that the cooperating exporting producers represented only around 10%
of the total production capacity in The PRC. Therefore, findings had to be largely
based on information submitted in the review request as well as publicly available
information. The export price behaviour of Chinese producers to other third
country markets, the Chinese production capacity as well as available spare
capacities and the attractiveness of the Union market for Chinese exporters were
considered in particular.

3.2.        Export price behaviour of
Chinese producers to other third country markets

(44)     As far as exports to other
third country markets are concerned, it should be noted that the statistical
information available from Chinese public databases covers a broader product
scope than the product under review and therefore no meaningful analysis of
quantities exported to other markets or prices on these markets could be made. The
two cooperating producers from the PRC did not export to unrelated customers in
other third markets. On this basis, the export prices to other third country
markets during the RIP could not be reliably established and no firm
conclusions could be drawn on the basis of the information available.

3.3.        Spare capacity of the
Chinese producers

(45)     The
data on the basis of which the analysis below is made were provided by the
applicant in the review request and was cross-checked with publicly available
information.

(46)     On
this basis, capacities of producers in the PRC were estimated at 1 600 000 kg.
The applicant’s estimation of the capacity utilisation of Chinese producers is
around 63% resulting in an unused capacity of about 600 000 kg, exceeding
nearly five times the total Union consumption during the RIP. Thus, there are
large quantities available for export from the PRC, in particular, because
there are no indications that third country markets or the domestic market
could absorb this significant spare capacity.

3.4.        Volume and prices of dumped
imports from the PRC

(47)     Imports from the PRC into
the Union increased by 9% over the period considered and reached the level of well
above 50 000 kilograms during the RIP representing approximately half of the total
EU consumption during the RIP.

(48)     Throughout the period
considered, import prices were fluctuating and followed the same trends as the
sales prices of the Union industry on the Union market. Overall, import prices
increased from 2008 to the RIP by 42% and were still at dumped levels. The price
growth is mainly explained by the higher cost of the main raw material
(tungsten powder) during the RIP.

3.5.        Attractiveness of the Union
market

(49)     The Union market is among
the largest in the world reaching around 20 % of the world consumption of TE. Chinese
companies have shown a serious interest in developing their presence on the
Union market which is supported by the fact that they maintained and even increased
their significant market share of 45 % during the RIP.

3.6.        Conclusion of the likelihood
of continuation of dumping

(50)     The foregoing analysis
demonstrates that Chinese imports continued to enter the Union market at dumped
prices with significant dumping margins. Given most notably the analysis of
price levels on the Union market, and the interest Chinese exporters have shown
in the Union market, as well as the significant spare capacities available in the
PRC, going far beyond the total Union consumption, it can be concluded there is
a strong likelihood of continuation of dumping should measures be removed.

D. SITUATION ON THE UNION MARKET

1.           Definition of the Union
industry

(51)     The current investigation
confirmed that TE is manufactured by two producers in the Union. Both producers
cooperated fully with the investigation.

(52)     The above companies
constitute the Union industry within the meaning of Article 4(1) and 5(4) of
the basic Regulation and will hereafter be referred to as the 'Union industry'.

2.           Preliminary remark

(53)     Since there are only two
companies which constitute the Union industry, the data referring to the Union
industry will be either presented in indexed form or ranges, so as to protect
confidentiality pursuant to Article 19 of the basic Regulation.

(54)     Since imports under CN code
level from Eurostat also included products other than TE, information on
imports have been analysed at TARIC code level, supplemented by data collected
in accordance with Article 14(6) of the basic Regulation. TARIC data are
considered confidential as they provide a level of detail which allows for identification
of parties. For this reason some information is presented in ranges.

3.           Union Consumption

(55)     Union consumption was
established on the basis of the sales volume of the Union industry on the Union
market, and import data from Eurostat, at TARIC code
level supplemented by information from data collected in accordance with
Article 14(6) of the basic Regulation.

(56)     Between 2008 and the RIP (‘period
considered’), Union consumption decreased by 16%. Consumption in the Union has decreased substantially between 2008 and 2009, and has increased since, without
reaching the pre-crisis levels during the RIP. From the
low peak in 2009 to the RIP, Union consumption increased by almost 40%.

Table 1

Consumption

Volume (kilograms) || 2008 || 2009 || 2010 || RIP

Consumption || 140 000 – 150 000 || 90 000 – 100 000 || 110 000 – 120 000 || 120 000 – 130 000

Index (2008=100) || 100 || 61 || 75 || 84

Source: Questionnaire replies, Eurostat, Article 14(6) database

4.           Volume and market share of
dumped imports from the PRC

(57)     The volumes and market shares of
dumped imports from the PRC was established on the basis of statistical
information provided at TARIC level supplemented by information from data
collected in accordance with Article 14(6) of the basic Regulation.

(58)     Notwithstanding the
absolute decrease of the Union consumption, the volume of imports of the
product under review originating in the PRC increased by 9% over the period
considered, keeping a level well above 50 000 kg during the RIP (see Table 2).
This increase, together with the general reduction of the Union consumption
during the period considered, led to an increase of the market share of the
Chinese exporters to approximately half of the total Union market.

Table 2

Imports from the PRC

|| 2008 || 2009 || 2010 || RIP

Volume || 51 771 || 36 188 || 39 953 || 56 289

Index (2008=100) || 100 || 70 || 77 || 109

Market share || 35% - 40% || 35% - 40% || 35% - 40% || 45% - 50%

Source: Eurostat, Article 14(6) database

5.           Prices of the imports from
the PRC

5.1.        Evolution of prices

(59)     Prices from the PRC increased
in the region of 40% between the year 2008 and the RIP, with a sharp increase
during the RIP. The price growth is mainly explained by the higher cost of the
main raw material (tungsten powder) during the RIP.

Table 3

Prices of the imports from the PRC

|| 2008 || 2009 || 2010 || RIP

Prices EUR/Kg || 36.59 || 33.83 || 41.56 || 51.83

Index (2008=100) || 100 || 92 || 114 || 142

Source: Eurostat, Article 14(6) database

5.2.        Price undercutting

(60)     The investigation revealed that import prices from the PRC
were undercutting the Union industry average prices. An undercutting margin of
37% was established during the RIP, and when including the anti-dumping duty in
the calculation, the undercutting margin was still
significant at a level of 24%. The calculation was based on a comparison of the
CIF export prices of the cooperating exporting producers with the average Union
industry prices at ex-work level. The prices were considered representative for
the PRC as the two cooperating exporting producers covered around 80% of the
imports of TE from the PRC.

(61)     Following disclosure one exporting
producer claimed that prices were not compared on a per-type basis and due to
alleged significant price variations between different product types the
undercutting levels calculated were not meaningful. On the basis of the
information available, a price comparison on a per-type basis was only possible
for part of the Union industry’s sales on the Union market and only for part of
the export sales made to the Union. However, the party did not present evidence
that would call into question the reasonableness of the methodology applied.
This claim had therefore to be rejected.

(62)     Following disclosure it was
also argued that the Chinese import prices and the Union industry’s sales
prices on the Union market were not compared at the same level of trade. This
claim was not substantiated as the party concerned did not submit any
information or evidence that demonstrated consistent and distinct differences
in function and prices of the seller for the alleged different levels of trade.
This claim was therefore rejected.

6.           Imports from other third countries

(63)     The volume of imports and prices from other countries
during the period considered is shown in the table below. The volumes and
market shares of imports from other third countries were established on the
basis of statistical information provided at TARIC level supplemented by
information from data collected in accordance with Article 14(6) of the basic
Regulation.

Table 4

Imports from other third countries

|| 2008 || 2009 || 2010 || RIP ||

Vietnam || || || || ||

Volume of imports (Kgs) || 27 878 || 14 184 || 13 776 || 25 833 ||

Index (2008=100) || 100 || 51 || 49 || 93 ||

Price EUR / Kg || 44.36 || 45.34 || 46.02 || 56.01 ||

Index (2008=100) || 100 || 102 || 104 || 126 ||

South Korea || || || || ||

Volume of imports (Kgs) || 21 299 || 8 174 || 11 051 || 3 319 ||

Index (2008=100) || 100 || 38 || 52 || 16 ||

Price EUR / Kg || 50.99 || 44.16 || 44.16 || 59.31 ||

Index (2008=100) || 100 || 87 || 87 || 116 ||

Other third countries || || || || ||

Volume of imports (Kgs) || 7 641 || 6 247 || 10 942 || 9 186 ||

Index (2008=100) || 100 || 82 || 143 || 120 ||

Price EUR / Kg || 43.24 || 59.82 || 64.98 || 57.75 ||

Index (2008=100) || 100 || 138 || 150 || 134 ||

Total || || || || ||

Volume of imports (Kgs) || 56 818 || 28 605 || 35 779 || 38 338 ||

Index (2008=100) || 100 || 50 || 63 || 67 ||

Market share of imports from other third countries || 35% - 40% || 30% - 35% || 30% - 35% || 30% - 35% ||

Price EUR / Kg || 46.70 || 48.17 || 51.25 || 56.71 ||

Index (2008=100) || 100 || 103 || 110 || 121 ||

Source: Eurostat, Article 14(6) database ||

(64)     Import volumes from other third
countries to the Union market decreased during the period considered by around
33%. Market shares decreased over the period considered and were between 30% to
35% during the RIP. Prices from other third countries increased by 21% over the
same period.

(65)     It is recalled that in the
original investigation there were no significant imports of the like product to
the Union market other than from the PRC. The original investigation established
that the core markets of the remaining US and Japanese producers were their
respective domestic markets. It was therefore concluded that imports from
countries other than the PRC were extremely small.

(66)     Information provided by the
Union industry alleged that there is no existing production of TE in Vietnam and South Korea and that imports from those countries were in fact coming from the PRC. However,
no information was obtained confirming this allegation during the current
investigation.

7.           Economic situation of the
Union industry

7.1.        Preliminary
remarks

(67)     Pursuant to Article 3(5) of
the basic Regulation, the Commission examined all relevant economic factors and
indices having a bearing on the state of the Union industry.

(68)     Since the Union industry is
composed of only two producers, the data are reported in ranges for
confidentiality reasons.

7.2.        Production, production capacity and capacity utilisation

(69)     The Union industry’s production decreased each year during the period considered. By the end of RIP,
the production had decreased by 29% compared to 2008.
The trend has been particularly negative during 2009, with a decrease of more
than 40%.

Table 5

Total Union production

Volume (kgs) || 2008 || 2009 || 2010 || RIP

Production || 60 000 – 70 000 || 35 000 – 40 000 || 50 000 – 60 000 || 40 000 – 50 000

Index (2008=100) || 100 || 60 || 82 || 71

Source: Questionnaire replies

(70)     Production
capacity remained stable during the period considered. As production decreased,
the resulting capacity utilisation showed an overall decrease of 27% between
2008 and the RIP, reaching a 41% capacity utilisation during the RIP. Detailed
data is shown below:

Table 6

Production capacity and capacity utilisation

Volume (kgs) || 2008 || 2009 || 2010 || RIP

Production capacity || 95 000 – 110 000 || 95 000 – 110 000 || 95 000 – 110 000 || 95 000 – 110 000

Index (2008=100) || 100 || 100 || 100 || 100

Capacity utilisation || 57% || 35% || 47% || 41%

Index (2008=100) || 100 || 60 || 82 || 73

Source: Questionnaire replies

7.3.        Stocks

(71)     The level of closing stocks
of the Union industry decreased by 20% between 2008 and the RIP. This trend is
in line with the trend of decreasing consumption on the Union market over the
same period.

Table 7

Closing stock

Volume (kgs) || 2008 || 2009 || 2010 || RIP

Closing stock || 5 000 – 15 000 || 5 000 – 15 000 || 5 000 – 15 000 || 5 000 – 15 000

Index (2008=100) || 100 || 70 || 85 || 80

Source: Questionnaire replies

7.4.        Sales volume

(72)     The sales volume of the
Union industry on the Union market to unrelated customers decreased by 23% between 2008 and the
RIP, with a sharp decrease between 2008 and 2009. This negative trend has been
sharper than the decrease in the total consumption, with the exception of year
2010.

Table 8

Sales to unrelated customers

|| 2008 || 2009 || 2010 || RIP

Volume (kgs) || 40 000 – 50 000 || 25 000 – 30 000 || 35 000 – 40 000 || 30 000 – 35 000

Index (2008=100) || 100 || 65 || 87 || 77

Source: Questionnaire replies

7.5.        Market share

(73)     As a result of what observed in the previous
recital regarding sales volume of the Union industry on the Union market, the market share held by
the Union industry fell during the period considered. The Union
industry, whilst losing sales volumes, was able to maintain its market shares
through 2009 and 2010, but suffered a setback during the RIP, with declining
sales notwithstanding the growing market. This resulted in a market share of between
20% to 25%, slightly lower than the one which was registered at the beginning
of the period considered.

Table 9

Union market share

|| 2008 || 2009 || 2010 || RIP

Union market share || 25% - 30% || 25% - 30% || 30% - 35% || 20% - 25%

Index (2008=100) || 100 || 107 || 117 || 91

Source: Questionnaire replies, Eurostat, Article 14(6)
database

7.6.        Growth

(74)     As explained above, consumption in the Union has decreased substantially between 2008 and 2009, as a result of the economic
downturn, and has increased since, without reaching the pre-crisis levels during
the RIP. The Union industry, whilst losing sales volumes, was able to maintain its
market shares through 2009 and 2010, but suffered a setback during the RIP,
with declining sales notwithstanding the growing market.

7.7.        Employment and productivity

(75)     The level of employment of
the Union industry declined between 2008 and the RIP by 13%.

(76)     Following the fall in
production, the productivity per employee, measures as output in kg per
employee, has also decreased during the period considered. Detailed data is
shown below:

Table 10

Total Union employment and productivity

|| 2008 || 2009 || 2010 || RIP

Index of employees || 100 || 65 || 84 || 87

Index of productivity || 100 || 92 || 106 || 83

Source: Questionnaire
replies

7.8.        Unit sales prices

(77)     Unit sales prices of the
Union industry to unrelated customers in the Union decreased slightly between
2008 and 2010, partly reflecting the impact of the economic crises. Between
2010 and the RIP unit sales prices increased substantially. Overall, the prices
of the Union industry increased by 35% during the period considered. This price
development, in particular between 2010 and the RIP, was caused by the increase
of prices of the main components making up TE.

Table 11

Unit price of Union sales

|| 2008 || 2009 || 2010 || RIP

Unit price of Union sales (EUR per unit) || 80-120 || 80-120 || 80-120 || 100-140

Index (2008=100) || 100 || 94 || 96 || 135

Source: Questionnaire
replies

7.9.        Profitability

(78)     Profitability improved
between 2008 and the RIP, after having reached a lower level in 2009 and 2010.
However profitability remained negative throughout the whole period considered.

Table 12

Profitability

|| 2008 || 2009 || 2010 || RIP

Profitability Union sales Index (2008=100) || 100 || 95 || 95 || 104

Source:
Questionnaire replies

7.10.      Investment and return on
investment

(79)     Investment in the business of the product concerned significantly
decreased during the period considered.

(80)     Return on investment
followed the profitability trend. In 2008 the Union industry registered a
negative return on investment which slightly improved, though it remained negative,
during the RIP.

Table 13

Investments and Return on Investment

Index (2008=100) || 2008 || 2009 || 2010 || RIP

Investments || 100 || 2 || 23 || 18

Return on investment || 100 || 100 || 96 || 103

Source: Questionnaire
replies

7.11.      Cash flow and ability to
raise capital

(81)     The cash-flow, which is the
ability of the industry to self-finance its activities, expressed as a
percentage of the turnover of the product concerned, significantly improved
during the period considered, although it remained negative.

Table 14

Cash flow

|| 2008 || 2009 || 2010 || RIP

Cash flow Index (2008=100) || 100 || 99 || 96 || 106

Source:
Questionnaire replies

7.12.      Wages

(82)     Between
2008 and the RIP the wages of the Union industry decreased by 16% in line with
the reduction of the number of employees.

7.13.      Magnitude of dumping margin

(83)     Despite the measures in
force substantial dumping continued during the RIP at a level which is significantly
above the current level of measures. Given the large spare capacity, the actual
volumes of imports from the PRC and prices significantly undercutting the Union
industry’s sales price, the impact on the Union industry of the actual margins
of dumping cannot be considered to be negligible.

7.14.      Recovery from past dumping

(84)     It was analysed whether the
Union industry recovered from the effects of past dumping. Despite the
anti-dumping measures in force, the Union industry did not manage to recover
from past dumping. As a response to the price pressure of the Chinese imports the
Union industry tried to keep their market share but had losses as a result.

8.           Conclusion on the
situation of the Union industry

(85)     The Union industry remained in a
vulnerable economic situation and continued to suffer material injury. Almost all injury indicators relating to the financial performance
of the Union industry deteriorated during the period considered. Consequently, it could not be concluded that the
situation of the Union industry was secure.

(86)     As a response to the price
pressure of the Chinese imports the Union industry tried to keep its market
share, but selling at prices largely below the break-even level. Indeed, the increase
of the sales prices of the Union industry between 2010 and the RIP is linked to
the increase of raw material prices and did not cover the total cost of the
Union industry.

(87)     In conclusion, the
difficulties of the Union industry can be clearly linked to the massive
presence of Chinese low-priced imports of the product under review on the Union
market, which are sold at significantly dumped prices, despite the measures in
force. This factor was enough to determine a situation where the Union industry
suffer losses in an attempt to keep a reasonable market share. In addition,
these difficulties have been further deepened throughout almost the entire
period considered by two factors: the downturn of the market during the
economic crisis of 2008-09 and, even if to a minor extent, the sudden increase
of raw material costs during the RIP. This led to a scenario where losses have
reached significant levels.

(88)     In view of the negative
development of the indicators pertaining to the Union industry, it is
considered that the Union industry continued to suffer material injury within
the meaning of the Article 3(5) of the basic Regulation during the period
considered.

E. LIKELIHOOD OF CONTINUATION OF
INJURY

1.           Preliminary remarks

(89)     During
the period considered, the Union industry appeared in a vulnerable situation,
still exposed to the injurious effect of the dumped imports from the PRC.

(90)     In accordance with Article
11(2) of the basic Regulation, imports from the country concerned were assessed
in order to establish if there was a likelihood of continuation of injury,
should measures be allowed to lapse.

2.           Chinese import volumes

(91)     It is recalled that
consumption on the Union market decreased significantly since the original
investigation mainly due to the economic downturn. In these circumstances, the
Chinese import volumes increased to a level well above 50 000 kg during the RIP.
As to the import volumes, this has increased by 9% while the market share of
the Union industry decreased.

3.           spare capacity in the PRC

(92)     As described in recital (41),
based on the information available there is significant spare capacity
available in the PRC. It can be expected that a large part of this spare
capacity could be used to increase imports in the Union market in the absence
of anti-dumping measures. This is because there are no indications that third country
markets or the Chinese domestic markets could absorb the significant Chinese spare
capacity. Therefore, the capacity to significantly increase imports to the Union exists. The estimation of the unused capacity would exceed nearly five times the
Union consumption during the RIP.

(93)     Moreover, information
submitted during the investigation indicated important distortions in the raw
material (ammonium
paratungstate – 'APT') market used to manufacture the
product under review. This raw material is subject to export quotas imposed by
the Chinese authorities as well as export taxes. This limits the exports of APT
and artificially increases its world price. These distortions are likely to
confer further incentives to the Chinese industry to produce and export at low
prices, while the Union industry has to produce the like product on the basis
of artificially high raw material prices.

4.           Attractiveness of the
Union market

(94)     It was demonstrated that
the Chinese exporting producers showed a continuous interest in the Union
market and were able to increase import volumes at the expense of the sales of the
Union industry. They even increased their already significant market share
during the RIP.

5.           Conclusion

(95)     The
Union industry had been suffering from the effects of the Chinese dumped
imports for several years and is currently still in a fragile economic
situation.

(96)     If measures were allowed to
lapse there is a strong likelihood of increased dumped imports which could
seriously threaten the existence of the Union industry. Indeed, in the PRC
there is a significant spare capacity which is likely to be largely directed to
the Union market, at dumped prices undercutting the Union industry sales prices
in the Union market, should measures be allowed to lapse.

(97)     In view of the findings of
the investigation, namely the continuation of dumping, the spare capacity in the
PRC, the distortion found in the market for raw materials, the potential of the
exporting producers in the PRC to redirect their export volumes to the Union
market, the price behaviour of the Chinese exporters clearly undercutting the
prices of the Union industry and the attractiveness of the Union market, any
repeal of the measures would point to a likelihood of continuation of injury.

F. UNION INTEREST

1.           Introduction

(98)     In accordance with Article
21 of the basic Regulation, it has been examined whether the maintenance of the
existing measures would be against the Union interest as a whole. The
determination of the Union interest was based on an appreciation of the various
interests involved, i.e. those of the Union industry, of importers and of
users. All interested parties were given the opportunity to make their views
known pursuant to Article 21(2) of the basic Regulation.

(99)     It should be recalled that
in the original investigation the imposition of measures was considered not to be
against the interest of the Union. Furthermore, the fact that the present
investigation is a review, thus analysing a situation in which anti-dumping
measures have already been in place, allows the assessment of any undue
negative impact on the parties concerned by the current anti-dumping measures.

(100)   On this basis it was
examined whether, despite the conclusion on the likelihood of a continuation of
injurious dumping, compelling reasons existed which would lead to the
conclusion that it is not in the Union interest to maintain measures in this
particular case.

2.           Interest of the Union
industry

(101)   In
view of the situation of the Union industry and the analysis on the likelihood
of recurrence of injury, it is clear that the Union industry would be likely to
experience a serious deterioration of its financial situation in case the
anti-dumping measures were allowed to lapse. Throughout the period considered
the Union industry lost production and sales volume while imports from the
country concerned increased despite the measures in force. During the same
period the financial situation of the Union industry deteriorated as it
experiences heavy losses. Therefore, effective competitive conditions need to
be enforced on the Union market.

(102)   It
is considered that the continuation of measures would benefit the Union
industry, which should then be able to increase sales volumes and improve its
financial situation. By contrast, the discontinuation of the measures would seriously
threaten the viability of the Union industry.

3.           Interest of users

(103)   None of the 15 contacted
users came forward to cooperate. As in the original investigation no
questionnaire replies were received from interested users. In the original
investigation the non-cooperation was explained by the low impact of TE on their
production costs as it appears that quality and reliability are primary
criteria for customers. Given the apparent marginal impact of the product under
review on the costs of downstream products, it was concluded that measures
would not adversely impact the user industry.

4.           Interest of importers

(104)   Three importers contacted
the Commission at the beginning of the investigation, but they were not
considered as being interested parties since they had not imported the product
concerned from the PRC during the RIP. Given that importers of TE did not show
any interest during the investigation, it was concluded that it would not be
clearly against EU interest to maintain measures.

5.           Conclusion

(105)   Given the above, it is
concluded that there are no compelling reasons against the maintenance of the
current anti-dumping measures.

G. ANTI-DUMPING MEASURES

(106)   All parties were informed of
the essential facts and considerations on the basis of which it was intended to
recommend that the existing measures be maintained. They were also granted a
period to submit comments subsequent to that disclosure. The submissions and
comments were duly taken into consideration where warranted.

(107)   It follows from the above
that, as provided for by Article 11(2) of the basic Regulation, the
anti-dumping measures applicable to imports of certain tungsten electrodes
originating in the PRC, imposed by Council Regulation (EC) No 260/2007 should
be maintained.

(108)   In order to minimise the
risk of circumvention due to the high difference in the duty rates, it is
considered that special measures are needed in this case to ensure the proper
application of the anti-dumping duties. These special measures, which only
apply to companies for which an individual duty rate is introduced, include the
following: the presentation to the customs authorities of the Member States of
a valid commercial invoice, which shall conform to the requirements set out in
the Annex to this Regulation. Imports not accompanied by such an invoice shall
be made subject to the residual anti-dumping duty applicable to all other
producers.

HAS ADOPTED THIS REGULATION:

Article 1

1.           A definitive anti-dumping
duty is hereby imposed on imports of tungsten welding electrodes, including
tungsten bars and rods for welding electrodes, containing 94% or more by weight
of tungsten, other than those obtained simply by sintering, whether or not cut
to length, currently falling within CN codes ex 8101 99 10 and ex 8515 90 00
(TARIC codes 8101 99 10 10 and 8515 90 00 10) and originating in the People's
Republic of the China.

2.           The rate of duty
applicable to the, net free-at-Union-frontier price, before duty, of the
products described in paragraph 1, and manufactured by the companies listed
below shall be as follows:

Company || Anti-Dumping Duty || TARIC Additional Code

Shandong Weldstone Tungsten Industry Co., Ltd || 17,0 % || A754

Shaanxi Yuheng Tungsten & Molybdenum Industrial Co., Ltd || 41,0 % || A755

Beijing Advanced Metal Materials Co., Ltd || 38,8 % || A756

All other companies || 63,5 % || A999

3.           The application of the
individual duty rates specified for the companies mentioned in paragraph 2
shall be conditional upon presentation to the customs authorities of the Member
States of a valid commercial invoice, which shall conform to the requirements
set out in the Annex. If no such invoice is presented, the duty rate applicable
to “all other companies” shall apply.

4.           Unless otherwise
specified, the provisions in force concerning customs duties shall apply.

Article 2

This Regulation shall enter into force on
the day following that of its publication in the Official Journal of the
European Union.

This
Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For
the Council

The
President

ANNEX

The
valid commercial invoice referred to in Article 1(3) of this Regulation must
include a declaration signed by an official of the company, in the following
format:

1.
The name and function of the official of the company which has issued the
commercial invoice.

2.
The following declaration ‘I, the undersigned, certify that the [volume] of
tungsten electrodes sold for export to the European Union covered by this
invoice was manufactured by (company name and address) (TARIC additional code)
in (country concerned). I declare that the information provided in this invoice
is complete and correct.’

[1]               OJ L 72, 13.3.2007, p. 1

[2]               OJ C 71, 9.3.2012, p. 23

[3]               OJ L 343, 22.12.2009, p. 51.

[4]               OJ L 72, 13.3.2007, p. 1.

[5]               OJ C 71, 9.3.2012, p. 23.