•Cr <r COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 21.06.1996 
COM(96) 307 final 
Proposal for a 
COUNCIL REGULATION (EC) 
imposing definitive anti-dumping duties on 
imports of unwrought pure magnesium originating in Russia and Ukraine and 
collecting definitively the provisional duty imposed 
(presented by the Commission) 

EXPLANATORY MEMORANDUM 
1. By Regulation (EC) No 2997/951, the Commission imposed provisional anti­
dumping duties on imports into the Community of unwrought magnesium originating in 
Russia and Ukraine, falling within CN codes 8104 11 00 or 8104 19 00. 
2. By Regulation (EC) No 720/962, the Council extended the validity of these duties for 
a period of two months. 
3. Certain parties requested and were granted hearings and presented written 
comments which were taken into account where appropriate. The Commission 
continued to seek and verify all information it deemed necessary for its definitive 
findings. 
4. At the definitive stage it was concluded that the two categories of unwrought 
magnesium, pure and alloyed, are distinct products. This is mainly due to differences 
in their use. As neither the exporters nor the Community industry sold any unwrought 
alloyed magnesium the proceeding should be terminated with respect to this product. 
5. The definitive determination confirmed that exports originating in Kazakhstan were 
de-minimis. Consequently, no dumping margin was calculated with respect to these 
imports. The proceeding with respect to this country is terminated by separate 
Commission Decision. 
6. The definitive determination confirmed the existence of dumping with respect to 
Russia and Ukraine. Decreases in individual margins compared to the provisional 
findings are due to downward adjustments made to the normal values following claims 
by the non-market economy producers. 
1 OJ No L 312 of 23.12.95, p. 37 
2 OJ No L 100 of 23.4.96, p. 1 
7. The conclusion that the complaining industry suffered material injury is also 
confirmed. 
8. The Commission confirmed the causal link between the dumped imports and the 
injury suffered by the Community industry. It is the volume of the dumped imports, 
their low prices and decreasing prices, a price pattern which differs significantly from 
the price pattern of other third country suppliers and the fact that such imports, to a 
significant extent went to the same channels as sales of the Community industry that 
led to this conclusion. 
9. On Community interest, it was concluded that the interests of users will not be 
affected substantially in the event anti-dumping measures are introduced and that 
despite the fact that there is only one producer in the Community a competitive 
environment will prevail in this market. 
10. Therefore, definitive duties should be imposed. The level at which the definitive 
duties should be set was determined by the dumping margins finally established 
which were lower than the injury level. It was considered appropriate to impose 
measures in the form of variable duties at a level of 2.602 and 2.568 ECU per ton at a 
CI F Community border level for imports originating in Russia and Ukraine 
respectively. 
11. The Russian and the Ukrainian producers offered undertakings. The Commission 
considered these offers as acceptable because they were considered sufficient to 
remove injurious dumping. 
12. It is therefore proposed that the Council adopts the draft Regulation annexed 
imposing a residual definitive anti-dumping duty on imports of unwrought pure 
magnesium originating in Russia and Ukraine falling within CN codes 8104 11 00 or 
ex 8104 19 00. 
Council Regulation (EC) No ..../ imposing definitive anti-dumping duties on 
imports of unwrought pure magnesium originating in Russia and Ukraine and 
collecting definitively the provisional duty imposed 
THE COUNCIL OF THE EUROPEAN'UNION, 
Having regard to the Treaty establishing the European Community, 
Having regard to Council Regulation (EC) No 384/96 of 22 December 1995 on 
protection against dumped imports from countries not members of the European 
Community3, and in particular Article 23 thereof, 
Having regard to Council Regulation (EEC) No 2423/88 of 11 July 1988 on protection 
against dumped or subsidized imports from countries not members of the European 
Economic Community4, as last amended by Regulation (EC) No 522/945 and in 
particular Article 12 thereof, 
Having regard to the proposal submitted by the Commission after consulting the 
Advisory Committee, 
WHEREAS : 
3 OJ No L 56, 6.3.1996, p.1. 
4 OJNoL209, 2.8.1988, p. 1. 
5 OJ No L 66, 10.3.1994, p. 10. 
I. Provisional Measures: 
(1.) By Regulation (EC) No 2997/95 provisional anti-dumping measures were 
imposed on 23 December 19956 ("provisional duty Regulation") on imports into 
the Community of unwrought magnesium originating in Russia and Ukraine. 
By Regulation (EC) No 720/96 the validity of the provisional anti-dumping 
measures was extended until 24 June 19967 by the Council. 
II. Subsequent Procedure: 
(2.) Following the imposition of the provisional anti-dumping measures the following 
interested parties submitted comments in writing: 
A. Producers in Russia: 
Avisma Titanium-Magnesium Works, Berezniki, Perm region ("Avisma"), 
Solikamsk Magnesium Works, Solikamsk, Perm region ("Solikamsk"), 
B. Producers in Ukraine: 
Concern Chlorvinil, Kalush, Ivano-Frankovsk region ("Chlorvinil")8. 
C. Producer in the Community: 
Péchiney Electrométallurgie 
D. Producer in the analogue country: 
Hydro Magnesium, Porsgrunn, Norway 
6 OJ No L 312 of 23.12.95, p. 37 
7 OJ No L 100 of 23.4.96, p. 1 
8 This producer has changed its name to "Oriana" after the period of investigation. 
E. Importer in the Community: 
Ayrton & Partners, London, U.K. 
F. User in the Community: 
Aluminium Norf, Neuss, Germany, ("Alunorf") 
G. User association in the Community: 
Arbeitsgemeinschaft der Eisen und Metall verarbeitenden Industrie, Dusseldorf, 
Germany, ("AVI") 
(3.) Those parties who so requested were granted an opportunity to be heard by 
the Commission. 
(4.) The Commission continued to seek and verify all information it deemed 
necessary for its definitive findings. 
(5.) Parties were informed of the essential facts and considerations on the basis of 
which it was intended to recommend the imposition of definitive anti-dumping 
duties and the definitive collection of amounts secured by way of a provisional 
duty. They were also granted a period within which to make representations 
subsequent to the disclosure. 
(6.) The parties' oral and written comments were considered, and the conclusions 
altered where deemed appropriate. 
(7.) Owing to the complexity of the case, in particular the determination of the 
appropriateness of the analogue country, the investigation overran the normal 
duration of one year provided for in Article 7 (9) (a) of Regulation (EEC) No. 
2423/88 (hereafter referred to as the 'basic anti-dumping Regulation'). 
III. Product under consideration and like product: 
(8.) At the provisional stage unwrought pure and alloyed magnesium, both 
produced in ingot form, were considered as the product concerned. 
(9.) After the imposition of provisional measures, the Russian and Ukrainian 
producers submitted that there are differences between the two above 
categories of unwrought magnesium , i.e. pure and alloyed, in terms of physical 
characteristics, production process and end-use, warranting the treatment of 
these two categories of unwrought magnesium as two distinct products. 
(10.) The Community industry has submitted that the Community Institutions should 
take into account its sales volume and value of pure magnesium in granular 
form in order to allow a complete assessment of injury. 
A. Differences between unwrought pure magnesium and unwrought alloyed 
magnesium in ingot form: 
(11.) The final stage of the investigation has shown that the two categories of 
unwrought magnesium are different in their composition, in particular their 
magnesium content, although the latter is above 90% for both categories. 
At the same time the additional alloying agents contained in unwrought alloyed 
magnesium enhance or even alter the basic physical characteristics of this 
category as compared to the other category, i.e. unwrought pure magnesium. 
On this basis it is concluded that certain differences in physical characteristics 
between unwrought pure and alloyed magnesium do exist. 
(12.) As already pointed out in recital (11) of the provisional duty Regulation, it has 
been established that the two different categories of unwrought magnesium are 
used in a variety of applications, mainly in aluminium alloying, in steel 
desulphurisation and in die-casting. 
Although there are applications in which the use of either of the two categories 
of unwrought magnesium is theoretically possible, in practical terms the use is 
limited to one or the other category of unwrought magnesium for technical 
reasons. 
In particular, the use of unwrought pure magnesium for die-casting is basically 
impossible whereas the use of certain types of unwrought alloyed magnesium 
in both steel desulphurisation and aluminium alloying is possible with certain 
technical adjustments. 
Given also that the two categories of unwrought magnesium are traditionally 
used only in certain applications, the customers also perceive differences 
between them. 
Thus, the areas of use which are common for unwrought pure and alloyed 
magnesium in practical and even theoretical terms are very limited and 
therefore the interchangeability of the two categories of products is also limited. 
(13.) In the light of the above, it is concluded that unwrought pure and alloyed 
magnesium have to be considered as two distinct products. 
As neither the producers in the exporting countries nor the Community industry 
have produced or sold unwrought alloyed magnesium in any significant 
quantity, it is concluded that this product can be excluded from the scope of the 
present investigation. 
Consequently, the analysis of dumping, of injury, of causation between 
dumping and injury and of Community interest detailed below is exclusively 
based on information related to unwrought pure magnesium (hereinafter 
referred to as "magnesium"). 
Magnesium, depending on the content of impurities is classified under the 
Combined Nomenclature as 8104 11 00 or 8104 19 00. 
B. Magnesium in granular form: 
(14.) At the provisional stage, the Commission for the injury determination 
considered the volume and value of the Community industry's sales of 
magnesium in ingot form. 
Since then, the Community industry has submitted that the Commission should 
also take into account for the injury determination its sales of magnesium 
processed in-house from ingot form into magnesium granules, subsequently 
sold in the open market to independent customers. 
It should be noted that magnesium granules are used as such in one of the 
main applications for magnesium, i.e. for steel desulphurisation. 
The sole remaining Community producer performs the magnesium grinding 
process in-house. In contrast, the Russian and Ukrainian producers of 
magnesium sell the latter in ingot form to independent grinders in the 
Community for processing the ingots into granules. 
(15.) Given the importance of steel desulphurisation as a usage of magnesium and 
the relative simplicity of the grinding process, it has been concluded that the 
volume and value of sales of magnesium ingots transformed into magnesium 
granules should be taken into account, subject to an allowance for grinding 
costs, in determining the situation of the Community industry. 
IV. Dumping: 
A. Russia and Ukraine: 
1. Normal value 
(16.) The Russian producers have submitted that the analogue country, i.e. Norway, 
was not an appropriate choice. These producers have argued in general terms 
that given the difference in economic development between Russia and 
Norway leading to, for example, substantial labour cost differences, the latter 
could not be used as an analogue country. 
The Community industry, on the contrary, has submitted that the producer 
located in Norway is among the most efficient world-wide manufacturer, 
operating a particularly cost effective production when compared to the 
exporting producers concerned. 
In respect of this argument, it is noted that the justification for using an 
analogue country in anti-dumping proceedings involving non-market economy 
countries is the lack of reliable cost and price information in the non-market 
economy country concerned. Therefore, it is considered groundless to argue 
that certain costs prevailing in the non-market economy are lower than in the 
market economy analogue country and that accordingly adjustments of the 
normal value determined for the analogue country when applying it to the non-
market country should be made. Based on the same reasoning, the 
Commission does not take into account costs resulting from inefficiencies in for 
example the use of the workforce, which would result in adjustments in the 
normal value to the disadvantage of the non-market economy producers, as it 
appears reasonable to assume that such disadvantages are the result of that 
form of economic system. 
(17.) Furthermore, the Russian and Ukrainian producers have alleged that Norway 
does not represent an appropriate choice of analogue country because the 
producer located in this country would have an interest in the outcome of this 
proceeding. 
As mentioned in recital (68) of the provisional duty Regulation, it has been 
found that part of this Norwegian producer's field of activity was the Community 
magnesium market. 
The investigation conducted has ensured, however, that the conclusions 
reached are based on verified and thus reliable cost and sales price 
information for Norway. On this basis any allegation that the particular interest 
of the producer in question may have influenced the conclusions of the present 
investigations are unfounded. 
(18.) As far as certain allegations made by the Russian and Ukrainian producers 
related to the reliability of production costs determined for the analogue country 
producer, it is not considered necessary to address these allegations in detail, 
indeed, they are based on the use of an inconsistent set of exchange rates, on 
the comparisons of normal values determined in anti-dumping proceedings 
carried out in the past by the US authorities using different methodologies and 
ignoring the methodology used by the Commission in order to determine the 
level of duty at the provisional stage. 
(19.) Finally, certain allegations are based on the situation of the magnesium 
operations of the group to which the analogue country producer belongs which 
also includes magnesium operations in Canada. In this respect it should be 
noted that the determination of the normal value was exclusively based on the 
situation of the producer located in the analogue country, i.e. Norway. 
10 
(20.) In conclusion, it is maintained that the information collected in respect of the 
analogue country producer is reliable and is actually supported by information 
submitted by the Russian and Ukrainian producers. 
2. Export prices: 
(21.) One Russian producer found, as set out in recital (30) of the provisional duty 
Regulation, to have sold the product concerned to a related company in 
Switzerland, and which had omitted to specify this relationship, did not contest 
after the provisional stage that the relationship existed. However, this producer 
claimed that it did not know the final destination of its exports and that therefore 
the sales to this related company should not be considered as sales destined 
for export to the Community. 
This approach cannot be accepted given the relationship between the 
companies concerned and also taking into account the fact that the Russian 
company in question did not submit any information linked to the sales to the 
related party (e.g. shipping documents indicating the actual shipping 
destination) that would demonstrate that the approach taken at the provisional 
stage for the determination of export sales and export prices as set out in 
recitals (30) and (31) of the provisional duty Regulation was incorrect. 
(22.) The two Russian producers have claimed that an amount for commission from 
their export prices was wrongfully deducted, as this commission was paid to 
parties located in Russia. The Russian producers have submitted that, given 
the status of Russia as a non-market economy country, any costs incurred 
there should not be considered. 
The information at hand was reviewed, and it is concluded that the deduction 
concerned should not be made, given the status of this country as a non-
market economy. It appears, as argued by the Russian producers, that the 
commission payments relate to activities in Russia. 
H 
(23.) The Ukrainian producer has submitted that the export price of certain export 
transactions were wrongfully adjusted by twice deducting an amount for 
commission. 
Based on the information submitted, it was established that the claim of the 
Ukrainian producer is justified and the calculation was adapted accordingly. 
3. Comparison: 
(24.) The Russian producers have claimed that the production process used by the 
analogue country producer is partly different from the production process used 
in Russia, yielding extra costs of production. These claims concern one specific 
production step, i.e. the treatment of the feedstock and the production of 
certain by-products. 
(25.) With respect to differences in the processing of the feedstock, it was 
determined that prior to the investigation period, the analogue country producer 
used two different production processes in order to prepare the feedstock for 
the production of magnesium. One of the production processes was 
discontinued well before the beginning of the investigation period. The claims 
of the Russian producers in respect of differences in the processing of the 
feedstock relate to this discontinued production process. Since this production 
process was discontinued and did not affect the situation prevailing during the 
investigation period, it was not considered necessary to address the question 
raised by the Russian producers. 
(26.) With respect to certain by-products resulting from the production process, this 
aspect was examined carefully in order to address the question of possible 
inherent differences in the efficiency of the production processes used during 
the investigation period in the analogue country and in the exporting countries. 
12 
The following should be noted: 
On the basis of the information available, the electrolysis-process (i.e. 
one of the major production steps in the production of magnesium) of 
the analogue country producer, given that the structure of the 
electrolysis cells used by the analogue country producer is inherently 
less energy consuming when compared to the electrolysis process used 
in the exporting countries. In addition, the lifetime of the electrolysis cells 
is substantially shorter in the exporting countries concerned (i.e. around 
1 year against 5 years in the analogue country). 
The production process used in the exporting countries yields, to a 
greater extent than the production process performed in the analogue 
country, certain by-products. From information submitted in the course 
of the investigation it appears that these by-products are used as inputs 
in the production of other products in the exporting countries. 
(27.) On the basis of the above, it has been concluded that the normal value 
established in the analogue country should be adjusted in order to reflect that 
the Norwegian production process had a lower yield of by-products while being 
more energy efficient. Such an adjustment was done on the basis of electricity 
prices prevailing in the analogue country and on the basis of an estimate of the 
prices of the main by-products valued at prices prevailing in the Community 
adjusted for necessary purification treatment. 
13 
4. Dumping margins: 
(28.) The Russian producers have claimed that the CIF EC border value used in 
determining the provisional dumping margin should be adapted because of the 
effects of the enlargement of the Community. They argued that they had 
exported their products during the investigation period to a port in Finland and 
as a consequence the export transactions should not be adjusted to bring them 
to a Community frontier level by adding all relevant costs to reach a CIF-
Rotterdam level. 
The destination of the export sales made by the Russian producers during the 
investigation period have been verified and it is concluded that the claim is not 
justified. Indeed, contrary to the claim of the Russian producers, export sales to 
independent customers were made at a Rotterdam-harbour level in the 
overwhelming majority of cases. Therefore, the claim of the producers 
concerned is rejected. 
(29.) A comparison of the adjusted normal value with the export prices revealed that 
the ex-national frontier prices of all export transactions from Russia and 
Ukraine were below normal value. The revised dumping margins were 
aggregated for all export transactions and when expressed as a percentage of 
the total CIF EC border value are as follows: 
Russia: 46.5 % 
Ukraine: 54.5 % 
B. Kazakhstan: 
(30.) The conclusion concerning imports of magnesium originating in Kazakhstan 
reached at the provisional stage, i.e. that imports are de-minimis, was 
confirmed at the definitive stage. Consequently, no dumping margin has been 
determined with respect to imports originating in this country. 
14 
V. Injury: 
A. Volume of Community market, consumption in the Community: 
(31.) The consumption in the Community market for the product concerned was 
determined based on market research information compiled by a market 
research organisation on the basis of a survey among suppliers and users. 
The information used does include the consumption of magnesium by 
companies belonging to the group of the sole remaining producer of the 
Community industry. It has to be noted that these companies were free to 
purchase magnesium from whatever supplier and therefore, the consumption 
determined reflects the open market for the product concerned. 
The resulting consumption of magnesium in the Community measured in 
metric tons was as follows: 
1990 
46,000 1991 
42,000 1992 
47,000 1993 
41,000 
B. Dumped imports from Russia and Ukraine: 
1. Cumulation of imports: 
(32.) The Ukrainian producer stated that imports originating in Ukraine should not be 
cumulated with those originating in Russia. The producer mentioned in this 
context, that, unlike the situation with regard to Russia it had exported neither 
any unwrought alloyed magnesium nor any stockpile magnesium. 
15 
As far as the argument related to sales of unwrought alloyed magnesium is 
concerned, reference is made to point III. in which the product definition was 
revised. 
(33.) As far as the argument about exports of stockpile material is concerned, 
reference is made to recital (31) of the provisional duty Regulation, where it is 
stated that export prices and volumes for unwrought magnesium originating in 
Russia were made on the basis of the transactions of the two cooperating 
producers which, according to the information submitted by them, have not sold 
any stockpile material themselves. 
(34.) On this basis, and taking into account the arguments raised already at the 
provisional stage (see recitals (43) to (45) of the provisional duty Regulation), it 
is considered that the cumulation of imports originating in Russia and Ukraine 
is appropriate. 
2. Volume of imports: 
(35.) The volume of dumped imports of magnesium originating in Russia and 
Ukraine, measured in metric tons product, show a significant increase from 
around 2,100 metric tons in 1991 to around 5,400 metric tons in 1992, 
ultimately rising to around 9,200 metric tons in the investigation period. 
(36.) On the basis of the total Community consumption, this development 
corresponds to a rise in market share held by dumped imports from 5% in 1991 
to 11% in 1992 and to 23% in the investigation period. 
(37.) The price level for magnesium for the imports concerned has been determined 
and the following price trend for the two exporting countries concerned has 
been established (table given in indexed form, base in 1990: 100): 
16 
1990 
100 1991 
86 1992 
92 1993 
87 
These prices were at a consistently low level and undercut those of the 
Community industry by a substantial margin. A detailed evaluation of the export 
prices charged during the period of investigation as compared to prices 
charged by the Community industry at a comparable level of trade, and taking 
into account where appropriate differences in the quality of the products was 
made. The prices of all export transactions undercut prices of the Community 
industry by an average margin of 35%. 
C. Situation of the Community industry: 
(38.) A number of interested parties have pointed out that the Community industry 
no longer suffers injury as the demand for magnesium has changed since the 
end of the investigation period, leading to a supply shortage and a considerable 
increase in prices. 
However, the alleged change in demand has occurred in the market for die-
casting which essentially uses unwrought alloyed magnesium. 
1. Sales volume and market share of Community industry: 
(39.) As mentioned in point III.B., sales of magnesium ingots of the Community 
industry were analysed taking into account quantities sold in ingot form as such 
("magnesium ingots") and the quantities of ingots attributable to sales in 
granular form ("magnesium granules"). 
17 
Total yearly sales volume of the Community industry to unrelated customers in 
the Community of magnesium ingots and magnesium granules decreased 
since 1990. From 1991 to 1992 the decrease was almost 40%. From 1992 to 
the investigation period more than 10%, i.e. on an indexed basis from 62 to 53 
between 1992 and the investigation period (base 1990: 100). 
This decrease in sales volume resulted in a decrease in market share of the 
Community-industry from 20% in 1991 to 11% in both 1992 and in the 
investigation period. 
(40.) If sales of magnesium granules are excluded from the analysis, the following, 
similar pattern emerges: yearly sales volume of the Community industry to 
unrelated customers in the Community decreased since 1990. From 1991 to 
1992 the decrease was almost 40%. From 1992 to the investigation period 
sales fell by around 20%, i.e. on an indexed basis from 55 to 44 between 1992 
and the investigation period (base 1990: 100). 
This decrease in sales volume resulted in a decrease in market share of the 
Community industry for sales of magnesium ingots from around 15% in 1991, 
to 8% in 1992 and 7% in the investigation period. 
(41.) Finally, if sales transactions to related companies using the product concerned 
which were free to purchase their raw materials from independent suppliers are 
also included in the analysis, the total yearly sales volume again shows a 
decrease since 1990. From 1991 to 1992 the decrease continued and was 
almost 30%. From 1992 to the investigation period it was around 10%, i.e. on 
an indexed basis from 74 to 69 between 1992 and the investigation period 
(base 1990: 100). 
This decrease in sales volume resulted in a development of market share of 
the Community industry for its total sales of magnesium from around 30% in 
1991, to around 20% in both 1992 and in the investigation period. 
18 
2. Prices of the Community industry: 
(42.) The Russian producers have argued that the Community industry obtained an 
increase in its sales prices from 1991 through 1992 into the investigation 
period. 
(43.) In this context it must be noted that prices of the Community industry improved 
from 1991 to the investigation period as a result of a market recovery. This 
price recovery reflects, as far as its pattern is concerned, world market price 
fluctuations. 
From the beginning of the investigation period however, these prices have 
declined substantially up to the end of the investigation period. 
As for the analysis of sales and market share, yearly price trends (in index form 
with the base 100 in 1990) are shown for 
- sales of magnesium ingots, 
1990 
100 1991 
74 1992 
79 1993 
92 
sales of magnesium ingots and magnesium granules, 
1990 
100 1991 
76 1992 
81 1993 
91 
total sales including sales to related customers. 
1990 
100 1991 
75 1992 
81 1993 
91 
(44.) Prices within the investigation period decreased by about 6% between the first 
quarter and the last quarter for sales of magnesium ingots, by around 8% when 
taking account of sales both of magnesium ingots and magnesium granules 
and also by 8% if total sales of the Community industry are taken into account. 
This underlines that prices of the Community industry were under particular 
pressure during the investigation period. 
3. Other factors: 
(45.) As far as the financial situation, production, stocks, capacity, capacity utilisation 
and employment are concerned, no new information was received from 
interested parties after the imposition of provisional measures and now new 
information is available, therefore the provisional determinations reached 
concerning these factors are confirmed. 
D. Conclusion: 
(46.) In conclusion, the substantial reduction in the Community industry's sales, 
production and market share, the substantial increase in stock volume and the 
loss of employment as well as the negative development as far as the financial 
results are concerned, led to the conclusion, at the definitive stage, that the 
Community industry has been suffering material injury within the terms of 
Article 4 (1) of the basic anti-dumping Regulation. 
20 
VI. Causation: 
A. Price situation of the Community industry: 
(47.) The Russian producers have argued that their exports have not caused the 
injury suffered by the Community industry as this industry experienced a 
negative situation in a time period before their exports gained importance. 
Furthermore, the Russian producers have submitted that their argument is 
corroborated by the fact that the situation of the Community industry improved 
in terms of resale prices as imports of magnesium originating in Russia gained 
importance. 
(48.) As already mentioned in recital (69) of the provisional duty Regulation, it has 
been acknowledged that dumped imports were not the sole cause of the 
injurious situation of the Community industry. Indeed, it was determined that 
the Community industry has faced negative developments because of a 
downturn in the market for magnesium triggered by a general downturn in the 
magnesium-using industries. However, it has also been established that since 
1991, imports of magnesium originating in the two exporting countries 
concerned increased considerably, contrary to the development of 
consumption in the Community, and have consistently been made at prices 
undercutting those of the Community industry. 
On this basis, it can be concluded that the two developments, a market 
downturn and the undisputed increase in low-priced imports originating in the 
two countries concerned, overlap, as do their consequent effects . It was 
provisionally determined that the appearance of high volumes of dumped 
imports have jeopardised the recovery of the Community industry after a 
consolidation of the market and a restructuring programme which took effect 
toward the end of 1992. 
21 
(49.) In order to distinguish between the possible effects of these two factors, the 
pricing pattern of the various suppliers on the Community market has been 
analysed. These suppliers are, in decreasing order of market share during the 
investigation period, Norway (around 16%), the US (around 16%) and Canada 
(around 3%) apart from the countries concerned by this proceeding and the 
Community industry. 
An analysis of the pricing pattern of these suppliers based on the information 
received from the producers located in the exporting countries concerned, from 
the Community industry and based on import statistics for other suppliers, 
together with market research information revealed that there was a world wide 
price slump in the years 1991 and 1992. By the middle of 1992 and at the 
beginning of 1993, the market recovered leading to an increase in sales prices. 
For imports from Russia and Ukraine, throughout the period from 1990 to the 
investigation period, these were made at prices consistently and substantially 
undercutting those of the other main suppliers. 
Furthermore, the year-to-year price changes of the various suppliers indicate 
for all of them an upward price trend in the period of 1992 to the investigation 
period, in line with a price increase in the world market. On the contrary 
however, the two exporting countries concerned decreased their prices. 
The Community industry has not been able to effect price increases to the 
same extent as those of other third country suppliers. This explains why this 
industry's market share has remained relatively stable, while the market share 
of other third country suppliers substantially deteriorated from 1992 to the 
investigation period. 
This indicates that the price increase which resulted from the world market 
recovery from 1992 to the investigation period was substantially hampered for 
the Community by the pricing of the exports concerned, which undercut those 
of the other suppliers substantially, leading to the Community industry having to 
forego price increases. 
22 
(50.) Furthermore, it was established that prices of the Community industry 
deteriorated during the investigation period after having recovered somewhat at 
the beginning of it. From the first quarter to the last quarter of the investigation 
period alone prices decreased by between 6% and 8%. It was in this period that 
imports from the countries concerned increased markedly. 
B. Sales channels of Russian exporters and of the Community industry: 
(51.) The Russian producers have stated that their sales of the product concerned 
could not have caused injury because these sales in the Community went into 
other sales channels than those of the Community industry and were destined 
for other uses. It was claimed that the Russian material was often off-grade 
material, i.e. magnesium with a higher content of impurities, which was used for 
steel desulphurisation purposes. The Russian producers claimed that there 
was very little overlap between the channels and uses for their products and for 
those of the Community industry as the Russian producers did not sell any 
unwrought alloyed magnesium to, for example, die-casters. 
(52.) As regards this claim, the following should be noted: 
First, the present investigation deals with products which are very 
similar, if not identical, in their characteristics and uses. It is considered 
that for this reason alone, the low priced sales of the imported products 
have an impact on the Community industry. 
Second, it is undisputed that the market for magnesium is highly 
transparent with the effect that not only prices realised but even price 
offers quoted have an impact on the market overall. 
23 
Third, the investigation has shown that the Community industry sells 
magnesium in substantial quantities in the market segment and to 
customers in which the Russian producers have claimed to be 
specialised. 
Fourth, the investigation has not confirmed that the cooperating Russian 
producers have sold to any extent any off-grade magnesium. Indeed, 
the producers themselves have claimed that their product is of good 
quality, a statement confirmed during the investigation by the 
cooperating importers and user. 
C. Other imports: 
(53.) The Russian producers have finally claimed that Russian exports have mainly 
affected the position of other countries' imports. 
As already mentioned in recital (68) of the provisional duty Regulation, the 
market share of imports of magnesium originating in countries other than those 
covered by the present proceeding has actually decreased over the years 
leading to the investigation period. However, the divergence in the trend of 
Community and third country market shares does not support the claim that the 
imports concerned have not caused injury to the Community industry. The 
Community industry has opted to keep its market position by increasing its 
prices substantially less than the other suppliers. 
24 
D. Purchases by the Community industry of magnesium originating in Russia 
and Ukraine: 
(54.) It was argued that the sole remaining Community producer had purchased 
» magnesium originating in Russia and Ukraine and had in this respect inflicted 
injury on itself. 
In this respect it was found that the Community producer has not bought any of 
the product concerned originating from these sources. 
E. Conclusion: 
(55.) It is therefore concluded that high volume, low-priced dumped imports of 
magnesium originating in Russia and Ukraine, taken in isolation, have caused 
material injury to the Community industry. 
25 
VII. Community interest: 
A. User, Aiunorf: 
1. Competitive situation: 
(56.) One magnesium user, Aiunorf, has submitted information. Notwithstanding the 
question whether Aiunorf is representative of user interests, it was examined 
whether the user company would be put at a disadvantage compared to 
competitors located outside the Community by the adoption of anti-dumping 
measures. 
In this respect it was established that there are few imports into the Community 
of the products which the user company and its owners manufacture, indicating 
that any impact that these companies might face due to competitive 
advantages gained by competitors located outside the Community and 
potentially benefiting from low priced input materials is limited. 
2. Effect on cost of production: 
(57.) During the investigation period Aiunorf produced aluminium-based products 
containing between 0 and 5% magnesium. It has been determined that the cost 
of magnesium as a proportion of the total cost of production were substantially 
below 3%. It follows that the impact of price variations in magnesium must be 
very small. 
B. Other users: 
(58.) With respect to other users of magnesium, it was argued that the cost of 
magnesium represented a significant share of the overall cost of production, 
with the result that any increase in the cost of this important input would have a 
negative effect on this industry's competitive situation. 
26 
In this respect, it is acknowledged that there might be an effect on this user 
industry. The anti-dumping measures imposed have therefore been designed 
to allow the continued presence on the Community market of the suppliers 
located in the exporting countries. 
C. Conclusion: 
(59.) In summary, it is considered that, on balance, it is in the Community interest to 
impose definitive measures in the present investigation. This view takes 
specifically into account the situation of one category of user industry which 
uses magnesium as its main raw material. The definitive measures proposed 
ensure that the effects on this part of the user industry will be limited. 
27 
VIM. ANT1 DUMPING MEASURES: 
A. Level of duties: 
(60.) Based on the above conclusions on dumping, injury, causal link and 
Community interest, it was considered what form and level the anti-dumping 
measures would have to take in order to remove the trade distorting effects of 
injurious dumping and to restore effective competitive conditions on the 
Community magnesium market. 
(61.) In the present circumstances the overall loss-making situation of the 
Community industry of magnesium had to be taken into account as well as the 
volatility of the market. 
(62.) Since the level of prices at which the injurious effects of the imports would be 
removed was higher than the dumping margin of both exporting countries 
concerned, the dumping margin was used in order to determine the level of 
measures. 
B. Form of duties: 
(63.) Given the material injury suffered by the Community industry in the form of 
financial losses being the result of a depression of sales prices, the nature of 
the product and possible price fluctuations resulting from demand for 
downstream products, a variable duty is considered the most appropriate form 
of duty in this case. 
Taking into account the adjustment made in the determination of the respective 
normal values at the definitive stage, such variable duties would be based on a 
minimum price of 2.602 and 2.568 ECU per ton at a CIF Community border 
level for imports of magnesium originating in Russia and Ukraine respectively 
taking into account the differences in the actual export channels used during 
the investigation period. 
28 
C. Undertakings: 
(64.) Having been informed of the essential facts and considerations on the basis of 
which it was intended to recommend the imposition of definitive anti-dumping 
duties, the two Russian and the Ukrainian producers offered undertakings 
concerning their exports of the product concerned to the Community. After 
examination of these offers, the Commission considered the undertakings as 
acceptable since they would eliminate the injurious effects of dumping pursuant 
to Article 10 (2) of the basic anti-dumping Regulation. Furthermore, given the 
nature of the product and given the particular terms of the undertakings, in 
particular the fact that these undertakings cover exports of the product 
concerned for the Community directly invoiced to unrelated importers, it was 
established that these undertakings could be monitored effectively. 
(65.) The Commission consulted the Advisory Committee on the acceptance of 
these undertakings and, since objections were raised, sent a report on these 
consultations to the Council. In accordance with Articles 9 and 10 (1) of the 
basic anti-dumping Regulation, the undertakings offered were accepted by 
Commission Decision 
(66.) Notwithstanding the acceptance of the undertakings offered by the Russian 
and Ukrainian producers, a residual duty should be imposed on imports of the 
product concerned originating in Russia and Ukraine, in order to underpin the 
undertakings by avoiding their circumvention. This residual duty should be 
imposed in the form of a variable duty as discussed above. 
29 
IX. COLLECTION OF THE PROVISIONAL DUTIES: 
(67.) In view of the magnitude of the dumping margins found for the exporting 
producers and in light of the seriousness of the injury, in particular in light of the 
level of price undercutting and price underselling, it is considered necessary 
that amounts secured by way of provisional anti-dumping duties for 
transactions involving the product concerned, i.e. exclusively magnesium at the 
definitive stage should be definitively collected for all companies, including 
those from which undertakings have been accepted, at the level of the 
definitive duties, 
HAS ADOPTED THIS REGULATION : 
30 
Article 1 
1. Definitive anti-dumping duties are hereby imposed on imports of unwrought 
pure magnesium falling within CN codes 8104 11 00 and ex 8104 19 00 (Taric 
code 8104 19 00 10) and originating in Russia and Ukraine. 
For the purpose of the present Regulation unwrought pure magnesium is 
defined as unwrought magnesium unintentionally containing small amounts of 
other elements as impurities. 
The present Regulation does not cover unwrought alloyed magnesium which is 
unwrought magnesium containing more than 3% by weight of intentionally 
added alloying elements such as aluminium and zinc. 
2. For the above product originating in Russia, the amount of anti-dumping duty 
shall be the difference between the minimum import price of ECU 2.602 per 
metric tonne product and the CIF Community frontier price in all cases where 
the CIF Community frontier price per metric tonne product is less than the 
minimum import price (Taric additional code: 8899) except for imports of the 
product directly invoiced to an unrelated importer after the entry into force of 
this Regulation by the following producers located in Russia: 
Avisma Titanium-Magnesium Works, Berezniki, Perm region, 
(Taric additional code: 8898) 
Solikamsk Magnesium Works, Solikamsk, Perm region, 
(Taric additional code: 8903) 
which shall be exempt from the duty subject to the above conditions pursuant 
to the acceptance of undertakings by Commission Decision .... 
31 
For the above product originating in Ukraine, the amount of anti-dumping duty 
shall be the difference between the minimum import price of ECU 2.568 per 
metric tonne product and the CIF Community frontier price in all cases where 
the CIF Community frontier price per metric tonne product is less than the 
minimum import price (Taric additional code: 8902) except for imports of the 
product directly invoiced to an unrelated importer after the entry into force of 
this Regulation by the following producers located in Ukraine. 
Concern Oriana, Kalush, Ivano-Frankovsk region 
(Taric additional code: 8901). 
which shall be exempt from the duty subject to the above conditions pursuant 
to the acceptance of an undertaking by Commission Decision .... 
4. Unless otherwise specified, the provisions in force concerning customs duties 
shall apply. 
Article 2 
The amounts secured by way of provisional anti-dumping duty under Regulation 
No. 2997/95 and related to imports of unwrought pure magnesium as defined in 
Article 1 shall be definitively collected at the duty rate definitively imposed. 
Amounts secured in excess of the definitive rate of anti-dumping duty and related to 
imports of unwrought pure magnesium shall be released. 
Amounts secured by way of provisional anti-dumping duty under Regulation 
No. 2997/95 and related to imports of unwrought alloyed magnesium as defined in 
Article 1 shall be released. 
32 
Article 3 
This Regulation shall enter into force on the day following 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. 
Done at Brussels, 
33 
ISSN 0254-1475 
COM(96) 307 final 
DOCUMENTS 
EN 02 il 
Catalogue number : CB-CO-96-316-EN-C 
ISBN 92-78-05853-X 
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