2000R0360 — EN — 12.06.2003 — 001.001 — 1
This document is meant purely as a documentation tool and the institutions do not assume any liability for its contents
►B COUNCILREGULATION(EC)No360/2000
of14February2000
imposing a definitive anti-dumping duty on imports of dead-burned (sintered) magnesia origi-
natinginthePeople's RepublicofChina
(OJ L 46, 18.2.2000, p. 1)
Amended by:
Official Journal
No page date
►M1Council Regulation (EC) No 986/2003 of 5 June 2003 L 143 5 11.6.2003
NB: This consolidated version contains references to the European unit of account and/or the ecu, which from 1 January 1999
should be understood as references to the euro — Council Regulation (EEC) No 3308/80 (OJ L 345, 20.12.1980, p. 1) andCouncil Regulation (EC) No 1103/97 (OJ L 162, 19.6.1997, p. 1).
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COUNCILREGULATION(EC)No360/2000
of14February2000
imposingadefinitiveanti-dumpingdutyonimportsofdead-burned
(sintered)magnesiaoriginatinginthePeople'sRepublicofChina
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community,
Having regard to the Council Regulation (EC) No 384/96 of 22
December 1995 on protection against dumped imports from countries
not members of the European Community (1), and in particular Articles
9 and 11(2) thereof,
Having regard to the proposal submitted by the Commission after
having consulted the Advisory Committee,
Whereas:
A.PROCEDURE
1.Measuresinforce
(1)In December 1993, definitive anti-dumping measures were
imposed by Council Regulation (EC) No 3386/93 (2) in the
form of a variable duty associated to a minimum import priceof ECU 120/tonne on imports of dead-burned (sintered)
magnesia (hereinafter DBM) originating in the People's Republic
of China. The underlying investigation period covered the periodfrom 1 July 1990 to 30 June 1991.
2.Requestforareview
(2)Following the publication of a notice of impending expiry of the
anti-dumping measures in force on imports of DBM originatingin the People's Republic of China (
3), the Commission, in June
1998, received a request to review these measures pursuant toArticle 11(2) of Council Regulation (EC) No 384/96 (hereinafter
referred to as the ‘Basic Regulation’).
(3)The request was lodged by Eurometaux, acting on behalf of
Community producers (hereinafter referred to as the ‘applicant
producers’) whose collective output of the product concerned
constitutes 62 % of the Community production of DBM.
(4)The request was based on the grounds that the expiry of the
measures would be likely to result in the recurrence of dumping
and injury to the Community industry. Having determined, afterconsultation of the Advisory Committee, that sufficient evidenceexisted for the initiation of a review, the Commission initiatedan investigation (
4) pursuant to Article 11(2) of the Basic Regu-
lation.
3.Investigation
(5)The Commission officially advised the applicant Community
producers, the exporters and exporting producers in the People'sRepublic of China (hereinafter ‘Chinese exporters’), the impor-
ters as well as their representative associations known to be
concerned, and the representatives of the government of theexporting country, of the initiation of the review. The Commis-sion sent questionnaires to all these parties and to those whomade themselves known within the time limit set in the noticeof initiation. In addition, three known producers in Turkey,2000R0360 — EN — 12.06.2003 — 001.001 — 2
(1) OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Regulation (EC) No
905/98 (OJ L 128, 30.4.1998, p. 18).
(2) OJ L 306, 11.12.1993, p. 16.
(3) OJ C 177, 10.6.1998, p. 5.
(4) OJ C 385, 11.12.1998, p. 7.
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which was chosen as an analogue country, were advised of the
initiation of the review and sent questionnaires. The Commissionalso gave the parties directly concerned the opportunity to make
their views known in writing and to request a hearing.
(6)All the applicant Community producers replied to the question-naire. Neither the Chinese exporters and exporting producers nor
the importers replied to the questionnaire. However, oneimporter made its views known in writing and another providedcertain information. Two users replied to the questionnaire andanother one provided certain information.
(7)The Commission sought and verified all information it deemednecessary for the purpose of a determination of the likely conti-nuation or recurrence of dumping and injury and of the
Community interest. Verification visits were carried out at the
premises of the following companies:
(a) applicant Community producers:
— Grecian Magnesite SA, Athens, Greece,
— Magnesitas Navarras, Pamplona, Spain;
(b) producer in the analogue country:
— Kümas AS, Kütahya, Turkey;
(c) users in the Community:
— Sambre et Dyle, Belgium,
— Bet-Ker Oy, Finland.
(8)The investigation of continuation or recurrence of dumping
covered the period from 1 January 1998 to 31 December 1998(hereinafter referred to as ‘IP’). The examination of continuation
or recurrence of injury covered the period from 1 January 1994
upto the end of the IP (hereinafter referred to as ‘IIP’).
B.PRODUCTUNDERCONSIDERATIONANDLIKEPRODUCT
1.Productunderconsideration
(9)The product under consideration is natural dead-burned
magnesia (DBM) which is processed from magnesite, that isnaturally occurring magnesium carbonate. In order to produceDBM, magnesium carbonate has to be mined, crushed, sortedand then burned in a kiln at temperatures of 1 500 to 2 000 ºC.
The result is DBM with a MgO (magnesium oxide) content
ranging from 80 to 98 %. The main impurities in DBM areSiO
2,F e2O3,A l2O3, CaO and B2O3(silicon oxide, iron oxide,
aluminium oxide, calcium oxide and boron oxide respectively).DBM is mainly used in the refractory industry to make formed
and unformed refractories. There are no significant differences in
the basic chemical and physical characteristics, the interchange-ability and the uses of the product under consideration.Therefore, as in the previous investigation, all grades of DBMshould be considered to form one single product for the purposeof this investigation.
2.Likeproduct
(10)It has been claimed by a user of the product under consideration
that DBM from the People's Republic of China was not a like
product by comparison to DBM produced and sold in the
Community. This user alleged differences in certain characteris-tics, such as the quality. In this respect the investigation hasshown that magnesite is extracted and processed into DBM insimilar ways; furthermore this latter is used to make the same
range of refractory products. While the methods of extraction,
the MgO content of the deposit and the production process mayvary, these differences do not have a significant bearing on theend product and are not such as to justify the claim that DBMoriginating in the People's Republic of China and the Commu-nity produced DBM are different in terms of chemical and2000R0360 — EN — 12.06.2003 — 001.001 — 3
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physical characteristics. This is confirmed by the fact that both
the Community producers and the Chinese exporters have anumber of customers in common.
(11)Therefore, DBM exported to the Community from the People'sRepublic of China, DBM produced and sold by the complainingCommunity industry in the Community and the DBM producedand sold in the domestic market in Turkey are considered to belike products within the meaning of Article 1(4) of the BasicRegulation.
C.LIKELIHOODOFCONTINUATIONOFDUMPING
1.Preliminary remarks
(12)In accordance with Article 11(2) of the Basic Regulation, the
purpose of this type of review with regard to the dumping
aspects is to determine whether or not, the expiry of measures
would lead to a continuation or recurrence of dumping.
2.Analoguecountry
(13)In establishing normal value, account was taken of the fact that
for this investigation the normal value for imports from the
People's Republic of China had to be based on data from a
market economy third country. In this respect, Turkey was envi-saged in the notice of initiation of this review as an appropriatemarket economy third country. An unrelated importer submittedthat Turkey was inappropriate on the ground that the access to
raw materials in Turkey was more difficult than in the People's
Republic of China: mines of magnesite in Turkey do not enjoythe same natural advantages as in the People's Republic of Chinaso that under these conditions the extracting and processing costswere higher than in Chinese mines. The same importer, more-over, claimed that the Turkish domestic market was too small
to be representative for the Chinese market. However, this
importer did not suggest any alternative market economy thirdcountry.
(14)The Commission examined whether Turkey, which was alreadyused as market economy third country in the previous investiga-tion, was still a reasonable choice. In particular it was found that
at least three Turkish companies produced and sold DBM in
Turkey in significant quantities in competition with each otherand with exporters from other countries. The question of accessto raw materials being easier in the People's Republic of Chinathan in Turkey was addressed in the original investigation andno new evidence was submitted to change the conclusion that
Turkey was an appropriate market economy third country. In so
far as such differences were shown to exist, these could be takeninto account by making the necessary adjustments in accordancewith Article 2(10) of the Basic Regulation (see recital 19). In thelight of the above, a request for cooperation was addressed to the
three known Turkish producers of which one accepted to coop-
erate.
3.Normalvalue
(15)In order to establish normal value it was first determined for the
only cooperating Turkish producer whether the total volume ofdomestic sales of the product under consideration was represen-
tative in accordance with Article 2(2) of the basic Regulation,
i.e. whether these sales represented more than 5 % of the salesvolume of the product concerned exported by the People'sRepublic of China to the Community. The domestic sales inquestion were found to be representative.
It was then established whether sufficient domestic sales of the
product under consideration had been made in the ordinarycourse of trade in accordance with Article 2(4) of the BasicRegulation. As the volume of profitable transactions was lower2000R0360 — EN — 12.06.2003 — 001.001 — 4
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than 80 %, but not lower than 10 % of sales, normal value was
established on the basis of the weighted average prices actuallypaid for the profitable sales of the product under consideration.
4.Exportprice
(16)Given the lack of cooperation from the Chinese exporters, the
export price had to be based on facts available in accordance
with Article 18 of the Basic Regulation. Eurostat figures werechosen as the appropriate basis for establishing the export price.The Eurostat average price levels were confirmed by referenceto information obtained from the one cooperating importer.
5.Comparison
(17)The weighted average normal value was compared to the
weighted average export price of DBM, in accordance with
Article 2(11) of the Basic Regulation, both at fob port producing
country level.
(18)For the purpose of ensuring a fair comparison between normalvalue and export price, account was taken for differences infactors affecting price comparability in accordance with Article2(10) of the Basic Regulation. In this respect, adjustments weremade for inland and ocean freight, insurance, handling, loading
and ancillary costs and credit costs.
(19)In the previous investigation it was accepted that access to rawmaterials was easier in the People's Republic of China than in
Turkey. With no information submitted indicating any changein this respect an allowance has been granted in order to takeinto account the difference in extraction rates between the twocountries. It has been decided to apply the same adjustment tothe normal value as was applied In the previous investigation,
i.e. a reduction of the normal value corresponding to 20 % of
the extraction cost found for the cooperating Turkish producer.
(20)Furthermore, as in the previous investigations it was consideredthat the purity of the People's Republic of China raw material ishigher than the Turkish raw material and therefore an adjustmentwas made to take account of such difference.
6.Dumpingmargin
(21)The comparison of normal value and export price showed the
existence of dumping, the dumping margin being equal to theamount by which normal value, so established, exceeded the
price for export to the Community. The dumping margin found,
as a percentage of the cif Community-frontier import price, wasvery substantial, in the order of 50 %.
(22)On the grounds that dumping has taken place at very significantlevels throughout the IP, it is considered very likely thatdumping, at the very least at similar levels, will continue if themeasures are removed.
D.LIKELIHOODOFRECURRENCEOFDUMPING
(23)Given the existence of high import volumes with very high
levels of dumping, it is not considered necessary to examine
whether dumping would recur should measures be removed.
E.DEFINITIONOFTHECOMMUNITYINDUSTRY
(24)During the IP there were four producers of DBM in the Commu-
nity. The investigation established that the two applicantCommunity producers represented 62 % of the Communityproduction of DBM and, therefore, constitute the Communityindustry within the meaning of Article 4(1) and Article 5(4) ofthe Basic Regulation.
(25)It should be noted that two out of the four Community producersrepresenting the Community industry in the previous investiga-2000R0360 — EN — 12.06.2003 — 001.001 — 5
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tion ceased their activity in 1991, i.e. in the course of the
previous investigation. The two producers were Magnomin SA,Thessaloniki, Greece, and Financial Mining, Industrial & Ship-
ping Corporation (Fimisco), Athens, Greece. Fimisco was
liquidated in 1992 and its assets were sold in 1996 to a refrac-tory producer, Viomagn, Greece. Although Viomagn was notamong the applicants of the present investigation, it is supportingit. As regards Magnomin, it has definitively ceased operations
since its mining licence expired in 1997.
(26)As concerns the non-cooperating (but non-opposing) producer
Veitsch-Radex, Austria, the investigation has shown that it is acompletely downstream integrated producer, using its output of
DBM exclusively for internal consumption.
F.ANALYSIS OF THE SITUATION IN THE COMMUNITY
MARKET
1.ConsumptionintheCommunitymarket
(27)The apparent Community consumption of DBM was established
on the basis of:
— the sales volumes of the Community producers in the
Community,
— the imports into the Community of DBM from the People's
Republic of China,
— the imports into the Community of DBM from all other third
countries.
(28)On this basis, during the IIP, consumption decreased by 2 %,from around 497 000 tonnes in 1994 to around 486000 tonnesin the IP. In particular, after a peak in 1995 (+ 20 % ascompared to 1994), demand continuously decreased reaching itslowest level in 1997. The market recovered to a considerableextent during the IP, where consumption increased by 13 %
compared to 1997.
2.Importsfromthecountryconcerned
a)Import volume and market share of the imports concerned in
the IIP
(29)The import volume of DBM originating in the People's Republicof China during the IIP did not follow the trend of the consump-tion. Between 1994 and the IP, Chinese imports increased byaround 10 %, from around 238000 tonnes to around 261000tonnes, while Community consumption decreased by 2 %. More-
over, between 1997 and the IP, the imports concerned increased
by 30 %, whilst consumption increased only by 13 %. It is to benoted that the volume imported during the IP (260967 tonnes) issignificantly higher than the corresponding level of the importsfound during the IP in the previous investigation (176 000
tonnes).
(30)The market share of imports Originating in the People's Republic
of China increased from 48 % in 1994 to 54 % in the IP. It isworth noting that during the IP in the previous investigation,the Chinese market share was established at a level corre-
sponding to index 85 as compared to a level of 100 in 1994.
b)Price evolution and price behaviour of the imports of the
product concerned
i) Price evolution of the imports concerned
(31)In view of the absence of any cooperation from Chinese expor-
ters, the price evolution of the imports from the People'sRepublic of China during the IIP has been established accordingto Eurostat data, on the basis of the average cif import prices.These prices increased by around 10 % during the IIP. In parti-2000R0360 — EN — 12.06.2003 — 001.001 — 6
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cular, between 1994 and 1995, i.e. immediately after the imposi-
tion of the definitive anti-dumping measures, prices of DBMoriginating in the People's Republic of China in the Community
increased by about 16 %. However, since 1996 these prices
started to decrease, slightly but constantly, each year. Pricesduring the IIP were always above the minimum price. It shouldbe noted that the average cif import price during the investiga-tion period of the previous investigation was around 90 ECU/
tonne.
(32)The price evolution of the imports originating in the People'sRepublic of China should be seen in the light of two main
elements found during the investigation. Firstly, Eurostat datado not seem to be necessarily accurate. Indeed, import pricesverified during the investigation on the basis of real transactionswere always lower than the Eurostat figures. However, giventhat the imports thus verified could not be considered representa-
tive in terms of volume and value, Eurostat figures have been
used to establish the price trend of Chinese imports.
(33)Secondly, the product mix exported by the Chinese exportersinto the Community changed during the IIP as compared to theprevious investigation. On the basis of data provided by theinterested parties who cooperated or provided the Commissionservices with information, it was found that, after the imposition
of the measures, the product concerned sold in the Community
by the Chinese exporters always contained 90 % or more ofMgO. By comparison, during the investigation period of theprevious investigation, imports of DBM originating in thePeople's Republic of China with an MgO content lower than90 % represented more than 50 % of total imports, i.e. the major
part represented DBM of lower quality and was therefore less
expensive, the minimum price having accordingly been calcu-lated on this lower price basis. This indicates therefore that theprice rise during the IIP can be explained by the fact that theChinese exporters were selling a larger percentage of higher
quality DBM.
(34)It should also be noted that prices of DBM originating in thePeople's Republic of China in the Community during the IIP
were always lower than the prices of both the Communityproducers (see recital 35) and other third countries (see recital59).
ii) Price behaviour of exporters
(35)In order to examine the Chinese exporters' price behaviour in
relation to the one of the Community industry during the IP,and given the lack of cooperation of the Chinese exporters, the
Commission services used two methods. Firstly, on the basis of
Eurostat, the cif export price was compared to the applicantCommunity producers' weighted average price, adjusted to ex-works level, regardless of any specific MgO content. On thisbasis, the prices of DBM originating in the People's Republic ofChina were found to be lower than those of the Community
industry.
(36)Secondly, and in view of the change in the product mixmentioned above (recital 33), it appeared more meaningful, in
order to have a realistic picture of the market behaviour of theChinese exporters, to compare the cif export price with theapplicant Community producers' price of DBM with an MgOcontent equal to or higher than 90 %. On the basis of this
approach, the sales prices of the Chinese exporters were indeed
significantly lower than those of the Community industry.
(37)The development of prices of the DBM should also be consid-ered in the light of the following. On the basis of informationprovided by one unrelated importer representing 13 % and 11 %of the total imports from the People's Republic of China Into theCommunity in 1995 and 1996, respectively, the price increasefound for around half of the volumes imported by comparison2000R0360 — EN — 12.06.2003 — 001.001 — 7
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to the original investigation period, appeared to be artificial, as
shown by the following. This importer purchased DBM fromChinese exporters at a price lower than the minimum price of
ECU 120/tonne. For the great majority of these imports, customs
clearance was then undertaken by the clients of the unrelatedimporter (i.e. actual users of the product) on the basis of theresale price paid to the latter. In this resale price the unrelatedimporter included a certain margin in order to cover its expenses
incurred in the Community and to earn a profit. By this opera-
tion, the gap between the purchase price paid to the Chineseexporter and the minimum price was filled. This operationentailed that the final price declared to the customs authoritiesby the client of the importer was higher than the minimum price,but the mechanism used to arrive at this final price also reveals
that Chinese DBM could be sold in the Community at a price
lower than ECU 120/tonne. In this respect it should also betaken into account that the original minimum price was deter-mined at the level of the importers/traders purchase prices andnot at the level of the final users purchase prices. The commer-
cial practice described above seems, therefore, to affect the
actual effectiveness of the measures. This commercial practicecould also explain why Eurostat data showed figures higherthan the actual prices verified during the investigation.
3.EconomicsituationoftheCommunityindustry
a)Production
(38)The Community industry's production of DBM decreased by
around 33 % between 1994 and the IP. It should be noted that
the decrease of the production was particularly strong between1995 and 1996, coinciding with the contraction of the consump-tion of DBM in the Community market.
(39)The investigation established that the Community industry wasforced, during the IIP, to change its product mix and to focusits production more on the lower grades of DBM. Nevertheless,it continued to produce a significant quantity (around 20 %) ofDBM with an MgO content equal to or higher than 90 %.
b)Production capacity
(40)During the IIP, the production capacity of the Community
industry remained stable.
c)Capacity utilisation
(41)Capacity utilisation decreased by 34 % between 1994 and the IP.
d)Sales volume
(42)The total sales volume of the Community industry decreased by
around 36 % between 1994 and the IP. It should be pointed outthat, whilst in 1995, after the imposition of the measures, theCommunity industry was able to benefit from the increasingdemand (expanding its sales volume by around 3 %), in the IP,
in spite of an increasing consumption of 13 % (see recital 28), it
failed to follow this trend and its sales volume decreased byaround 23 %.
e)Market share
(43)The Community industry's share on the Community market
decreased by 37 % during the IIP. In this respect it should be
noted that, while market shares held by the Community industryin the previous investigation fell from 30 % in 1988 to 15 % inthe investigation period of the previous investigation, the nega-tive trend slowed down after the imposition of the presentlyreviewed anti-dumping measures.2000R0360 — EN — 12.06.2003 — 001.001 — 8
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f)Price development
(44)The investigation has shown that the applicant Community
producers' average selling ex-works price of DBM rose by 23 %over the whole IIP. However, despite this increase, the Commu-
nity industry was prevented from raising its prices to a profitable
level, as described below (recital 46), and was only able tooperate at a loss.
(45)The price development has to be analysed in the light of theabove mentioned change in the product mix, which occurredduring the IIP (see recital 39). Indeed, the Community industryprogressively concentrated its production and sales on DBM of
lower grades, which are cheaper to produce and thus can be
sold at lower prices, to the detriment of the higher grades, whichcould be more profitable, but with which the Communityindustry could not compete against the Chinese price pressure.Even though overall prices have been rising, it was thereforenot possible for the Community industry to reach a satisfactory
price level.
g)Profitability
(46)The profitability of the Community industry, expressed as a
percentage of net sales, although improving in absolute termsfrom (- 100) in 1994 to (- 28) in the IP, on indexed basis,remained negative during almost the whole IIP.
h)Employment
(47)Employment in the Community industry decreased by 31 %
during the IIP.
i)Investments
(48)The applicant Community producers increased their rate of
investment by around 78 % during the IIP. Although thesefigures are not exclusively related to the product concerned,since it was not possible to allocate the investments to DBM
only, it was found that the investments were mostly destined to
further rationalise the production process of DBM.
j)Conclusion
(49)After the imposition of the anti-dumping measures in 1993, and
during the whole IIP, the situation of the Community industryimproved as regards some of the economic indicators examined.
In particular, its average sales price increased and its losses were
reduced. Continued efforts to rationalise the production processand new investments were made, showing an industry that is stillviable and determined to remain in operation.
(50)However, the other economic indicators did not developasfavourably during the IIP. Indeed, the Community industry wasnot able to increase production, capacity utilisation, sales
volumes, market shares and employment to a satisfactory level.
(51)It is therefore concluded that the Community industry is still in adifficult situation.
4.Impactoftheimportsconcerned
(52)The development of the market after the imposition of the
measures reveals that the minimum price established in theprevious investigation was not such as to discourage the Chineseexporters to sell in the Community market. Indeed, market
shares of Chinese exporters increased during the IIP and their
presence in the Community market became, as a whole, strongerthan during the investigation period of the previous investiga-tion. In addition, it should be noted that the Communityindustry has lost market share to almost the same extent as thePeople's Republic of China has gained it.2000R0360 — EN — 12.06.2003 — 001.001 — 9
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(53)In line with the measures imposed, Chinese export prices
increased during the current IIP and the price situation of the
Community industry appeared to develop also more positively.However, as explained in detail above, not too much emphasisshould be placed on this price increase. This development ofprices should, however, also be seen in the light of, firstly, theshift from low grades to the more costly higher grades of MgO
undertaken by the Chinese exporters (see recital 33). Secondly, it
should be borne in mind that this change in product mix pushedthe Community industry to progressively reduce sales volumesand production of the higher grades of DBM. As explained inrecital 36, the price pressure of the imports concerned came to
bear in particular on the higher grades of DBM, against which
the Community industry was not able to compete (see alsorecital 45).
(54)In addition, it seems appropriate to mention the impact of theChinese license system introduced in 1994, which most likely
contributed to the increase of the Chinese prices world-wide
(see recitals 73, 74 and 75 for details).
(55)The investigation has further shown that anti-dumping dutieshave been paid during the IP on at least 7 % of total Chinese
imports of the product concerned, meaning that these exports
were made at prices below the minimum price.
5.Importvolumesandimportpricesfromotherthirdcoun-
tries
a)Import volume and market share
(56)The import volume of DBM from other third countries decreased
in the IIP from about 178500 tonnes in 1994 to around 166500tonnes in the IP. This is equivalent to a decrease of about 7 %.
(57)Market shares of the imports from other third countriesdecreased by two percentage points between 1994 and the IP.This decrease is even more marked between 1995 and the IP,even though there was a preceding increase between 1994 and
1995, exceeding the trend of the Community consumption (if
the imports would follow the Community consumption themarket shares would remain stable).
(58)The above shows that, during the IIP, the Chinese exporters were
able to consolidate their position in the Community to the detri-
ment not only of the Community industry (see recital 42), butalso of other third countries.
b)Sales prices of imports from third countries
(59)According to Eurostat, the average sales price of imports from
other third countries decreased by 9 % in the IIP. However, theunit price was on average always higher than for both imports
originating in the People's Republic of China and sales of the
Community industry.
(60)On the basis of the above, it is considered that imports of theproduct concerned from other third countries did not have any
significant impact on the economic situation of the Community
industry.
6.Conclusion
(61)In spite of the measures in force, due to the continued price pres-
sure exerted by the Chinese exporters, the Community industryremained in a difficult economic situation. This price pressure
prevented the Community industry from recovering from the
effects of the previous and ongoing dumping practices. In thisrespect it should be noted that already two out of the fourCommunity producers representing the Community industry inthe previous investigation ceased their activity during theprevious proceeding, entailing a significant loss of employment.2000R0360 — EN — 12.06.2003 — 001.001 — 10
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Nevertheless, the investigation established that, as shown by
their investments, the remaining Community industry is stillviable and not ready to abandon this segment of production.
G.LIKELIHOODOFRECURRENCEOFINJURY
1.AnalysisofthesituationofthePeople'sRepublicofChina
(62)In order to assess the likely effect of the expiry of the measures
in force, and taking into account that the Community industry is
still in a difficult economic situation, the following elements
were considered:
a)Reserves, production capacity, capacity utilisation and stocks
(63)In the absence of cooperation from the Chinese exporters, the
analysis was based on information provided in the complaint aswell as information obtained from specialised magazines andmarket research studies.
(64)As concerns reserves of magnesite, according to the above-mentioned sources, the People's Republic of China has thelargest reserve found for an individual country, accounting for17,3 % of the world-wide reserves.
(65)According to the same sources, production capacity of magnesiain the People's Republic of China during the last years was atapproximately 2 500 000 tonnes/year, out of which 1 700000tonnes of DBM. This means that the People's Republic of Chinaaccounts for 28 % of the world-wide production capacity of
DBM.
(66)As concerns capacity utilisation and stocks, no reliable informa-
tion could be obtained in view of the non cooperation of anyChinese interested parties.
(67)Based on specialised publications and magazines available andgiven the sheer size of the raw material reserves and productioncapacity, it has been concluded that considerable potential existsfor Chinese exporters to raise their production and exportvolumes to the Community in the future.
b)Chinese exports to third countries
(68)The Commission services also analysed, on the basis of the
United States Department of Commerce's trade statistics, exports
of DBM originating in the People's Republic of China to theUnited States of America, one of the most important exportmarkets for the People's Republic of China. These importsaccounted for 77 % of the world-wide imports of DBM into the
United States of America in 1998.
(69)The total volume of exports originating in the People's Republic
of China to the United States of America went upfrom around263000 tonnes in 1994 to around 292 000 tonnes in 1998, anincrease of 11 %, and were at a peak of more than 320000
tonnes in 1995. As to their prices, cif sales prices increased
from a level of ECU 88/tonne in 1994 to ECU 117/tonne in theIP, i.e. an increase of 33 %.
(70)The investigation has shown an analogy in the Chinese beha-viour in the United States of America and in the Community.
In both markets, Chinese prices were in general among the
lowest by comparison to imports from all other third countries,and this during the whole of the IIP.
(71)The abovementioned price of ECU 117/tonne in the IP is 23 %
lower than the Chinese price charged in the Community during
the same period and 2,5 % below the minimum price establishedby the preceding measures for the Community.
(72)From the above, it can be concluded that, in the absence ofmeasures, Chinese prices could potentially fall at least to levels2000R0360 — EN — 12.06.2003 — 001.001 — 11
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comparable to the prices for imports into the United States of
America.
c)The Chinese licence system
(73)In April 1994, the MOFTEC (Ministry of Foreign Trade and
Economic Cooperation) and the CCCMMC (China Chamber ofCommerce of Metals, Minerals and Chemicals Importers and
Exporters) introduced an export licence system for all exports
of certain minerals, which is equivalent to an export quota andtax system. All different sorts of magnesia, including DBM,have been covered by this licence system. In 1997, 18 Chinesecompanies received a licence to export magnesia up to a
maximum volume of 2 Mio tonnes within the yearly licence
and tonnage bidding round. The licence fee amounted to USD30/tonne (ECU 26,5/tonne) in 1997 and increased to USD 40/tonne (ECU 36,6/tonne) in 1998. This implies that, if theminimum price of ECU 120/tonne is met, the actual export priceof DBM to the Community without licence fee would be at ECU
83,4/tonne. According to Eurometaux, the Liaoning Province,
where most of the producers are situated, in 1995 introduced alocal export tax which in 1997 amounted to USD 15,7/tonne(ECU 14,4/tonne). Consequently, the actual sales price in theCommunity, when deducting the local tax as well, would be aslow as ECU 69,4/tonne.
Eurometaux claims that the Chinese licence system for magne-
site and thus DBM could be abolished soon and has argued thatexports of DBM originating in the People's Republic of Chinawould, as a consequence of the abolition, increase in volumeand considerably decrease in price, should the anti-dumping
measures not be continued.
(74)In this respect it should be noted that the analysis of the licence
system carried out, given the significant amount of licence fees,
underlines the potential of the Chinese exporters to sell DBM in
the Community at very low prices.
(75)Furthermore, in view of the fact that the system described aboveis run autonomously by the government of the exporting country,it is considered that its existence or abolition cannot have anyinfluence on the decision of the Community institutions whetheror not injurious dumping would recur in the absence ofmeasures.
2.Conclusionontherecurrence ofinjury
(76)In view of the above, namely of the following factors:
— despite the measures in force, the Community industry is still
in a difficult economic situation;
— Chinese imports still hold an exceptionally strong position on
the Community market and are made at dumped and lowprices;
— the prices which Chinese exporters might charge in the
absence of anti-dumping measures are potentially very low
if one considers, on the one hand, the prices exclusive ofthe fees resulting from the Chinese license system, and, onthe other hand, the Chinese behaviour in the United Statesmarket, where prices were always lower than in the Commu-nity;
— the large raw material reserves and the large Chinese capaci-
ties to exploit the raw material give an indication that the
Chinese exporters have the potential to raise their productionand/or export volumes;
— even though a minimum price was in force, in several cases
transactions were made below the minimum price, thusgiving an indication that Chinese exporters are fully capableof lowering their prices;2000R0360 — EN — 12.06.2003 — 001.001 — 12
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On this basis it is concluded that, should the measures be
repealed, there is a likelihood of recurrence of injury.
H.COMMUNITYINTEREST
1.Introduction
(77)According to Article 21 of the Basic Regulation, it was exam-
ined whether a prolongation of the existing anti-dumpingmeasures would be against the interest of the Community as awhole. The determination of the Community interest was basedon an appreciation of all the various interests involved, i.e. those
of the Community industry, the importers and traders as well as
the users of the product concerned.
(78)In order to assess the likely impact of a continuation or non-continuation of the measures, the Commission requested infor-
mation from all interested parties mentioned above. The
Commission sent questionnaires to twelve importers andseventy-eight users of the product under consideration. Noimporters replied to the questionnaires, even though two ofthem provided some information. As to the users, two of them
replied to the questionnaires and the data were verified.
(79)It should be recalled that, in the previous investigation, the adop-
tion of measures was considered not to be against the interest ofthe Community. Furthermore, it should be noted that the present
investigation is a review, thus analysing a situation in which
anti-dumping measures are already in place. Consequently, thetiming and nature of the present investigation allows the assess-ment of any undue negative impact the current anti-dumpingmeasures may have had in the past on the parties concerned.
(80)On this basis it was examined, whether, despite the conclusionson continuation and recurrence of injurious dumping compellingreasons exist which would lead to the conclusion that it is not inthe Community interest to maintain measures in this particular
case.
2.InterestsoftheCommunityindustry
(81)It is considered that without maintaining the anti-dumping
measures established in the previous investigation, the injuriousdumping is likely to recur and the situation of the Community
industry, already fragile, will further deteriorate.
(82)As shown above, the Community industry has been affected by
the low priced imports of DBM originating in the People's
Republic of China during the IIP. It is therefore considered that
the objective of the anti-dumping measures under review, that isto re-establish fair competition in the Community marketbetween the Community industry and the Chinese producers,has not been fully met.
(83)Although the Community industry has been making considerableefforts to improve its productivity in recent years, in an attemptto lower its costs of production and to enhance its competitive-ness, it has not been able to increase its profit to a reasonable
level during the IIP and, moreover, employment strongly
declined. Furthermore, two Community producers in Greecewho took part in the previous investigation ceased their activity.
(84)However, the investigation likewise established that the Commu-
nity industry is viable, this being confirmed in particular by its
consistent rate of investment during the IIP. Furthermore, theefforts undertaken in order to rationalise the production processshow that the Community industry is determined not to abandonthis segment of production.
(85)Given the above, it appears necessary to prolong the existingmeasures in order to ward off the adverse effects of dumpedimports which could endanger the existence of the Communityindustry and consequently a number of jobs. It has also to be2000R0360 — EN — 12.06.2003 — 001.001 — 13
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considered that if the Community industry disappears, there will
also be a negative impact on the downstream industry, since thelatter will see its choice of suppliers significantly reduced.
3.Interestsofimporters
(86)None of the unrelated importers replied to the questionnaire sent
by the Commission. The lack of cooperation is in itself an indi-cation that this sector did not suffer any substantial negativeeffect on its economic situation as a result of the measures.
This is confirmed by the fact that the importers continued to
trade the product concerned, even raising the volume importedduring the IIP.
(87)It is therefore concluded that the economic situation of the
importers of the product concerned has not been negatively
influenced by the imposition of the anti-dumping measurescurrently in force. It is therefore also unlikely that a continuationof the measures would lead to a deterioration of their economicsituation in the future.
4.Interestsofusers
(88)The users of the product under consideration, i.e. the down-
stream industry, are the refractories' producers. Only two out ofthe seventy-eight users to which the questionnaire was sent bythe Commission replied. In the same way as for the importers,the low level of cooperation is in itself an indication that this
sector did not suffer any substantial negative effect on its
economic situation as a result of the measures. Although therepresentativity of the two cooperating companies for the down-stream industry is limited, since one purchased only around 2 %of the total DBM imported from the People's Republic of Chinawithin the IIP, and the other one purchased, beginning in 1997,
less than 1 %, the impact of the measures in force on their situa-
tion was evaluated.
(89)In this respect, the investigation established that the users
continued, and in one case even started, to import DBM origi-
nating from the People's Republic of China in spite of themeasures in force. These measures therefore did not constitute adeterrent for the producers of refractories leading them to changetheir sources of supply. While DBM constitutes a significant partof the cost of refractories, the increase of the Chinese import
price was apparently not so high as to constitute any inconveni-
ence.
(90)It is worth noting that the DBM import price of the user locatedin Finland almost doubled after Finland joined the European
Community. Nevertheless, it continued to purchase DBM origi-
nating in the People's Republic of China. Two conclusions canbe drawn from this:
(a) the measures have been effective as to a price rise of the
imports originating in the People's Republic of China;
(b) the resulting price, compared to the price charged in the rest
of the Community, continued to be competitive.
(91)On the basis of the above, it can be ruled out that the anti-dumping measures had any negative significant influence on the
cost situation and on the profitability of the users of the product
under consideration.
(92)As shown above (recitals 29 and 30), the result of the anti-
dumping measures in force has not been to close the Community
market to imports, but rather to combat the unfair trade practicesand to remedy to some extent the distorting effects of dumpedimports. Indeed, as mentioned above, imports from the People'sRepublic of China increased by 10 %, during the IIP.
Since the measures have been in place for a certain period and
would be maintained at the same level, it can be concluded that2000R0360 — EN — 12.06.2003 — 001.001 — 14
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this would not imply any deterioration of the situation of the
users.
5.ConclusiononCommunityinterest
(93)On the one hand, a continuation of the anti-dumping measures in
force is likely to result in a stable price for DBM in the Commu-nity market. Leaving the Community industry without any
protection against the effects of dumped imports would not only
weaken its position, but could even lead to its disappearance. Onthe other hand, in the past, the existing measures appear not tohave had any significant negative effects on the economic situa-tion of users and importers. Any price increase, if at all, for
users resulting from the imposition of anti-dumping measures,
on the basis of the information collected during the currentinvestigation, does not appear to be disproportionate whencompared to the benefit to the Community industry achieved bythe removal of the trade distortion caused by the dumpedimports.
(94)Therefore, it is concluded that there are no compelling reasonsagainst the prolongation of the existing anti-dumping measures.
I.ANTI-DUMPINGMEASURES
(95)All parties concerned were informed of the essential facts and
considerations on the basis of which the maintenance of theexisting measures is based. They were granted a period within
which to make representations subsequent to disclosures. No
comments were received.
(96)It follows from the above that, as provided for by Article 11(2)
of the Basic Regulation, the variable anti-dumping duties in
combination with a minimum price of ECU 120/tonne onimports of DBM originating in the People's Republic of Chinaimposed by Regulation (EC) No 3386/93 should be maintained,
HAS ADOPTED THIS REGULATION:
Article 1
1. A definitive anti-dumping duty is hereby imposed on imports of
dead-burned magnesia falling within CN code 2519 90 30 originatingin the People's Republic of China.
2. The amount of the anti-dumping duty shall be:
(a) the difference between the minimum import price of EUR 120 per
tonne and the net, free-at-Community-frontier price, before duty, inall cases where the latter is:
— less than the minimum import price, and
— established on the basis of an invoice issued by an exporter
located in the People's Republic of China directly to an unre-lated party in the Community (Taric additional code A439).
(b) zero, if the net, free-at-Community-frontier price, before duty, is
established on the basis of an invoice issued by an exporter locatedin the People's Republic of China directly to an unrelated party inthe Community and equal to or higher than the minimum importprice of EUR 120 per tonne (Taric additional code A439).
(c) equal to an ad valorem duty of 63,3 % in all other cases not falling
under subparagraph (a) and (b) above (Taric additional code A999).
In cases where the anti-dumping duty is established according to
subparagraph 2(a) of Article 1 and where goods have been damaged
before entry into free circulation and, therefore, the price actually paidor payable is apportioned for the determination of the customs valuepursuant to Article 145 of Regulation (EEC) No 2454/93, the minimumimport price set out above shall be reduced by a percentage whichcorresponds to the apportioning of the price actually paid or payable.2000R0360 — EN — 12.06.2003 — 001.001 — 15
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The duty payable will then be equal to the difference between the
reduced minimum import price and the reduced net, free-at-Commu-nity-frontier price, before customs clearance.
3. Unless otherwise specified, the provisions in force concerning
duties and other customs practices 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 Communities .
This Regulation shall be binding in its entirety and directly applicable
in all Member States.2000R0360 — EN — 12.06.2003 — 001.001 — 16
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