COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 12.03.1998 
COM(1998) 142 final 
Proposal for a 
COUNCIL REGULATION (EC) 
IMPOSING A DEFINITIVE 
ANTI-DUMPING DUTY ON IMPORTS OF TUNGSTEN CARBIDE AND 
TUNGSTEN FUSED CARBIDE 
ORIGINATING IN THE PEOPLE'S REPUBLIC OF CHINA 
(presented by the Commission) 

EXPLANATORY MEMORANDUM 
1. In September 1990, by Regulation (EEC) N° 2737/90, the Council imposed a 
definitive anti-dumping duty on imports of tungsten carbide and fused carbide 
originating in the People's Republic of China. By Decision 90/480/EEC the 
Commission accepted undertakings given by two major exporters concerning the 
product subject to measures. 
2. Following the withdrawal of the undertakings by the two Chinese exporters 
concerned, the Council, by Regulation (EC) N° 610/95 of 22 March 1995, 
amended Regulation (EEC) 2737/90 and imposed a definitive duty of 33% on 
imports of tungsten carbide and fused carbide. 
3. In June 1995,. a request for a review pursuant to Article 11(2) of Council 
Regulation (EC) N° 3283/94 was lodged by Eurométaux on behalf of 
Community producers representing a major proportion of the Community 
production of tungsten carbide and fused carbide. This request for a review was 
made on the grounds that there was still dumping and that the expiry of the 
existing anti-dumping duty on imports of tungsten carbide and fused carbide 
originating in the People's Republic of China would lead to recurrence of injury. 
4. On 21 September 1995, by a notice published in the Official Journal of the 
European Communities, the Commission announced the review of Regulation 
(EEC) N° 2737/90. 
5. The present review exceeded the period of one year within which it should 
normally have been concluded, due to the complexity of the investigation, and in 
particular due to the difficulties in obtaining reliable data of an appropriate 
analogue country. Furthermore, two other investigations concerning tungsten 
products, i.e. tungsten ores and concentrates on the one hand, and tungstic oxide 
and acid on the other hand, were initiated at the same time as the present review 
and had to be carried out in parallel given the links between these products in the 
tungsten production chain. 
ti) 
The investigation showed that tungsten carbide and fused carbide from the 
People's Republic of China was being exported to the Community with a 
dumping margin of 30.6% and that, in the event of the expiry of the measures, 
material injury would recur for the Community industry, notably in the form of 
financial losses and continuing and even growing losses of market share by this 
industry. 
The Community user industry made its views known. After having examined all 
the arguments put forward by the interested parties, it was concluded that there 
were no compelling reasons not to maintain the measures in the present case. A 
continuation of the measures appears therefore warranted. 
It is therefore proposed, after consultation of the Advisory Committee, that the 
Council adopts the draft Regulation annexed, imposing a definitive anti-dumping 
duty on imports of tungsten carbide and fused carbide originating in the People's 
Republic of China. 
o.^ 
Proposal for a 
COUNCIL REGULATION (EC) N°.../98 
OF... 
IMPOSING A DEFINITIVE 
ANTI-DUMPING DUTY ON IMPORTS OF TUNGSTEN CARBIDE AND 
TUNGSTEN FUSED CARBIDE 
ORIGINATING IN THE PEOPLE'S REPUBLIC OF CHINA 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty establishing the European Community, 
Having regard to Council Regulation (EC) N°3 84/96 of 22 December 1995 on 
protection against dumped imports from countries not members of the European 
Community 1, as amended by Regulation (EC) N° 2331/96^ and in particular Articles 
9(4) and 11(6) thereof, 
Having regard to the proposal submitted by the Commission after consulting the 
Advisory Committee, 
Whereas: 
1 OJN°L 56, 6.3.1996, p.l. 
2 OJN°L 317, 6.12.1996, pi 
A. PROCEDURE 
1. Measures in force 
(1) By Regulation (EEC) N° 2737/903, the Council imposed a definitive anti­
dumping duty on imports of tungsten carbide and fused carbide originating in 
the People's Republic of China. By Decision 90/480/EEC^ the Commission 
accepted undertakings given by two major exporters concerning the product 
subject to measures. 
Following the withdrawal of the undertakings by the two Chinese exporters 
concerned, the Commission imposed by Regulation (EC) N° 2286/94^ of 23 
September 1994 a provisional anti-dumping duty on the product concerned. 
By Regulation (EC) N° 610/956 of 22 March 1995, the Council amended 
Regulation (EEC) 2737/90 and imposed a definitive duty of 33% on imports of 
tungsten carbide and fused carbide. 
3 OJ N° L 264,27.9.1990, p 7 
4 OJ N° L 264,27.9.1990, p 59 
5 OJ N° L 248,23.9.1994, p 8 
6 OJN°L 64,22.3.1995, pi 
2. Request for review 
(2) Following the publication in February 1995 of a notice? of the impending 
expiry of the measures in force, the Commission received a request for a review 
of these measures lodged by Eurométaux, on behalf of three Community 
producers representing, with the exception of one small producer, the totality of 
the producers of the product concerned in the Community. The request 
contained evidence of dumping of the product originating in the People's 
Republic of China and of renewed material injury likely to recur in the event of 
expiry of the existing measures. This evidence was considered sufficient to 
justify the initiation of a review investigation. 
(3) On 21 September 1995, the Commission announced by a notice published in 
the Official Journal of the European Communities^, the initiation of a review of 
Council Regulation (EEC) N° 2737/90. This review was initiated under Article 
11(2) of Council Regulation (EC) N° 3283/949 which was replaced during the 
investigation by Regulation (EC) N° 384/96 (hereafter referred to as the "Basic 
Regulation"). 
7 OJN°C 48, 25.2.1995, p.3 
8 OJ N° C 244, 21.9.1995, p.3, p.4 and p.5 
9 OJN°L 349, 31.12.1994, pi 
3. Investigation 
(4) The Commission officially advised the producers/exporters and importers 
known to be concerned, the representatives of the exporting country and the 
complainant Community producers of the initiation of the review. 
(5) Interested parties were given the opportunity to make their views known in 
writing and to request a hearing within the time limit set in the above notice. 
(6) The Commission sent questionnaires to all parties known to be concerned and 
received replies from the three complainant Community producers, three 
importers which were also users of the product concerned and from two 
exporters/producers and an importer in the Community related to 
exporters/producers. The Community producers, exporters/producers and some 
importers/users made their views known in writing and were granted a hearing. 
(7) The Commission sought and verified all information it deemed necessary for the 
purpose of the investigation and carried out verification visits at the premises of 
the following companies: 
a) Community producers 
- Wolfram Bergbau und Huttengesellschaft m.b.H., St Peter, Austria 
- H. C. Starck GmbH & Co KG, Goslar, Germany 
- Eurotungstène Poudres, Grenoble, France 
b) Importers/users in the Community 
- AB Sandvik Hard Materials, Sweden 
- Seco Tools AB, Sweden 
c) Related importer 
- Minmetals North-Europe AB, Sweden 
d) Producer in the analogue country 
- Teledyne Advanced Materials, USA 
(8) The investigation of dumping covered the period from 1 October 1994 to 30 
September 1995 (hereafter referred to as the "Investigation Period"). The 
examination of injury covered the period from 1991 up to the end of the 
Investigation Period. 
(9) The present review exceeded the period of one year within which it should 
normally have been concluded pursuant to Article 11 (5) of the Basic 
Regulation, due to the complexity of the investigation, and in particular due to 
the difficulties in obtaining reliable data on an appropriate analogue country. 
Furthermore, two other investigations concerning tungsten products, i.e. 
tungsten ores and concentrates on the one hand, and tungstic oxide and acid on 
the other hand, were initiated at the same time as the present review and had to 
be carried out in parallel given the links between these products in the tungsten 
production chain. 
B. PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT 
1. Product under consideration 
(10) The product concerned by the present review is the same as the one under 
consideration in Council Regulation (EC) N° 2737/90 and falls within CN code 
2849 90 30. 
Tungsten carbide and fused tungsten carbide are compounds of carbon and 
tungsten produced by heat treatment (carburisation in the first case, fusion in the 
second). Both products are intermediate products, used as input materials in the 
manufacture of hard metal components such as cemented carbide cutting tools 
and high-wear components, in abrasion-resistant coatings, in bits for oil drilling 
and mining tools as well as in dies and tips for the drawing and forging of 
metals. 
(11) An allegation was made by an importer that tungsten carbide and fused tungsten 
carbide were different products. The arguments put forward were mainly based 
on the different manufacturing processes and the differences in chemical 
characteristics. 
However, the investigation has shown that, although their manufacturing 
process is different, tungsten carbide and fused tungsten carbide have the same 
chemical composition (both consist of approximately 92 to 94% of tungsten 
metal and 4 to 6% of carbon) and come from the same stage in the tungsten ' 
production chain, i.e. between tungsten metal powder and carbide tools and 
wear-resisting materials. Furthermore, they are put to similar end-uses in the 
industry, i.e. as a surface hardening component. Although for certain specific 
and limited applications which require higher wear and abrasive resistance only 
fused tungsten carbide is used, fused tungsten carbide and tungsten carbide are 
generally interchangeable. It was therefore concluded that, as in the original 
investigation, fused tungsten carbide and tungsten carbide are one single product 
for the purpose of the investigation. They are hereafter referred to as "carbide" . 
2 Like product 
(12) As established in the original investigation, the review investigation has 
confirmed that the products exported by the People's Republic of China and 
those manufactured and sold by the Community producers and by producers in 
the analogue country were like products within the meaning of Article 1(4) of 
the Basic Regulation, because they have essentially the 'same physical 
characteristics and end-uses. 
C. CONTINUATION AND LIKELIHOOD OF RECURRENCE OF DUMPING 
1. Preliminary Remarks 
(13) In accordance with Article 11(2) of the Basic Regulation, the purpose of the 
present review was to determine whether or not the expiry of the measures 
would lead to a continuation or recurrence of dumping, in particular by 
examining whether dumping continued to take place after the adoption of anti­
dumping measures. 
2. Analogue country 
(14) Since the People's Republic of China is not a market economy country, normal 
value had to be determined on the basis of information obtained in a third 
country market economy (hereinafter the "analogue country"). 
For this purpose South Korea had been suggested by the complainants. The 
notice of initiation envisaged the use of this country as an analogue country. 
Although substantial efforts were made to secure co-operation from several 
South Korean manufacturers of the product concerned, these producers refused 
to co-operate. 
(15) As an alternative, the complainants had suggested the use of the United States of 
America as an analogue country. In addition, the use of Israel for this purpose 
was also considered in the light of the readiness of the Israeli manufacturer 
Metek Metal Technology Ltd. to co-operate not only in the review concerning 
tungstic oxide and tungstic acid10, but also in this review. However, when 
analysing the data submitted by the Israeli producer Metek Metal Technology 
Ltd., it became clear that this company did not sell the product concerned on its 
domestic market. 
In the present case, only the US market seemed to provide for sufficient sales in 
the ordinary course of trade of domestically produced carbide. One major US 
producer of carbide, Teledyne Advanced Materials (hereinafter "Teledyne"), 
offered to co-operate. 
The following facts and considerations were decisive for the choice of the 
United States of America as an appropriate analogue country: 
- the carbide produced in the US had the same characteristics as that produced in 
the People's Republic of China and exported to the Community ; 
10 OJN°L ,p 
10 
- the carbide manufacturing process of the co-operating US producer is based on 
the calcination into tungstic oxide of domestically produced or imported 
ammonium paratungstate which is further carburised into tungsten carbide, or 
on the direct carburisation of imported tungstic oxide, as well as the 
reprocessing of various tungsten containing scrap compositions. It is similar to 
the manufacturing process of the Chinese producers, assessed on the basis of 
data available from the co-operating Chinese exporters/producers. It is modern 
and efficient, and proved to be profitable during the Investigation Period. 
- in terms of sourcing, Teledyne had unimpeded access to the raw materials for 
the production of carbide, namely ammonium paratungstate and tungstic oxide, 
which were purchased at world market prices during the Investigation Period 
from different sources of supply. 
- the US producer sold around 85% of its production on the US market, an open 
and representative domestic market with a considerable number of end users, 
where it competed with six other local producers of carbide. The US market 
showed a competitive structure of supply and demand, further bolstered by 
significant import volumes of carbide from various countries (the People's 
Republic of China, South Korea, Israel etc.). Nothing was found to suggest that 
costs and prices were not governed by the economic forces of a non-regulated, 
free market economy. 
11 
(16) On the basis of the above factors, and in accordance with Article 2(7) of the 
Basic Regulation, the United States of America was, therefore, considered to be 
an appropriate and not unreasonable choice of an analogue country for 
establishing normal value for the product under investigation. 
No objections were raised to the choice of the US as an analogue country, 
neither by the Chinese exporters/producers nor by the Chinese authorities, nor 
by any other party concerned. 
3 Normal value based on domestic sales 
(17) In accordance with Article 2 (2) of the Basic Regulation it was examined 
whether the volume of sales of carbide by Teledyne on the domestic market 
reached at least 5% of the volume of the product concerned exported by the 
People's Republic of China to the Community. It was found that the domestic 
sales of the like product achieved by Teledyne represented a multiple of the 
volume of the exports made by the Chinese exporters to the Community. 
12 
(18) It was subsequently examined whether the domestic sales of Teledyne to 
independent customers could be considered to have been made in the ordinary 
course of trade. 
Whether or not domestic sales were made in the ordinary course of trade was 
determined pursuant to Article 2(4) of the Basic Regulation. It was found that 
the weighted average selling price of all sales during the Investigation Period 
was equal to or higher than the weighted average unit cost of production, and 
that the volume of individual sales transactions below unit cost of production 
was less than 20% of sales being used to determine normal value; therefore all 
domestic sales were regarded as having been made in the ordinary course of 
trade. 
(19) Normal value was therefore based, as set out in Article 2(1) of the Basic 
Regulation, on the basis of the prices paid or payable of all domestic sales of the 
carbide to independent customers of Teledyne in the US market during the 
Investigation Period. 
4. Export prices 
(20) Comprehensive data were received on export prices from two Chinese 
producers/exporters and four importers. The data covered almost the totality of 
Chinese exports concerned carbide to the Community during the Investigation 
Period, as confirmed by Eurostat figures. 
13 
For those Chinese exports which were sold directly for export to independent 
customers in the Community, export prices were established on the basis of the 
prices actually paid or payable for the product concerned, in accordance with 
Article 2 (8) of the Basic Regulation. For a significant percentage of the Chinese 
exports which were made through a related company (Minmetals North-Europe 
AB), export prices were constructed on the basis of resale prices to the first 
independent customers in the Community, in accordance with Article 2 (9) of 
the Basic Regulation. An adjustment was made for all costs, including duties 
and taxes incurred between importation and resale, and for profit. The profit 
margin was established on the basis of data obtained from the unrelated 
importers in the same business sector. 
5. Comparison 
(21) In accordance with Article 2(11) of the Basic Regulation, a weighted average 
normal value, on a FOB US border basis, was compared to a weighted average 
export price on a FOB China border basis, and at the same level of trade. 
For the purpose of a fair comparison, in accordance with Article 2(10) of the 
Basic Regulation, due allowance in form of adjustments was made for 
differences in respect of transport, insurance, credit costs, handling and ancillary 
costs, which were claimed and demonstrated to affect price comparability. 
14 
6. Dumping margin 
The above comparison showed the existence of dumping, the dumping margin 
being equal to the amount by which the normal value exceeded the export price. 
Expressed as a percentage of the free-at-Community frontier price, duty unpaid, 
the single weighted average dumping margin amounts to 30,6%. 
D. COMMUNITY INDUSTRY 
(22) A number of claims were made by the Chinese exporters/producers and some 
users concerning the definition of the Community industry and the standing of 
the producers supporting the review request. 
(23) The Chinese exporters/producers claimed that one of the producers supporting 
the review request was related to one importer of Chinese carbide and should 
therefore be excluded from the definition of the Community industry, pursuant 
to Article 4(1 )(a) and (2) of the Basic Regulation. 
15 
It was established during the investigation that the two companies concerned 
although related had no control over each other. Moreover, these companies had 
conflicting interests regarding the imposition of the anti-dumping measures. 
One company was producing carbide whereas the other company was importing 
the product concerned. It was found that the two companies were acting 
autonomously when defining and pursuing their business strategy. Overall, it 
was concluded that their relationship did not influence the behaviour nor did it 
distort the analysis of the economic situation of the Community producer in 
question as regards the product concerned and there was therefore no reason to 
exclude this producer from the definition of the Community industry. 
(24) As mentioned in recital (2), the request for review was submitted by producers 
representing almost the totality of the production of carbide intended for sales 
on the open market and, accordingly, they constituted the Community industry. 
This was contested by a number of integrated producers of tungsten end-
products in the Community (tools, hard metals), producing small quantities of 
carbide exclusively for internal consumption . Specifically, they argued that the 
representativity of the producers supporting the review should be assessed by 
reference to the totality of the Community production of the product concerned 
(including their own captive production) and that, on this basis, the producers 
supporting the review were not representative of the Community industry. 
16 
(25) This issue was examined but it was concluded that the argument was incorrect. 
Indeed, even if the output of the companies which only produce for captive use 
was taken into account, the producers supporting the review request would still 
account for 60% of the overall Community production of the product concerned, 
thus fulfilling the criteria of Article 5(4) of the Basic Regulation. In addition, it 
was confirmed that the producers supporting the review accounted for almost all 
Community production of carbide intended for sales in the open market. 
(26) Given the above, the producers supporting the review request constitute the 
Community industry within the meaning of Articles 4(1) and 5(4) of the Basic 
Regulation. For the remainder of this Regulation, the term "Community 
industry" will be used to refer to the companies supporting the review. 
E. LIKELIHOOD OF CONTINUATION OR RECURRENCE OF INJURY 
1. Preliminary remarks 
(27) When examining injury, it should be recalled that carbide is part of an entire 
production chain of tungsten products and that, therefore, any developments of 
the market for the product concerned should be seen in conjunction with the 
developments for the other products in the production chain. 
Conclusions with regard to injury were based on data relating to the Community 
as composed at the time of the initiation of the review, i.e. the Community of 15 
Member States. 
17 
2. Community consumption 
(28) For the purpose of the investigation, and as the Community industry only 
produced carbide for the open market, consumption in the Community market 
was established on the basis of the production by the Community industry plus 
imports, minus exports, plus or minus stock variations. This approach did not 
take into account captively used production of integrated downstream producers 
of tungsten end products (e.g. hard metal components) which was not 
considered to be in direct competition with the dumped imports. 
On this basis, the consumption in the Community went from 2801 tonnes in 
1991 to 2819 tonnes in 1992, decreased to 2706 tonnes in 1993 and increased 
again in 1994 to 4236 tonnes and in the Investigation Period to 4703 tonnes, 
representing an increase of 68% in comparison with 1991. This development of 
consumption, showing a decrease until the end of 1993 and a recovery 
thereafter, was in line with the market developments for the industrial sectors 
using the product concerned. 
18 
3. Volume and market share of the dumped imports 
(29) Imports from tfee People's Republic of China in the Community decreased from 
143 tonnes in 1991 to 6$ tonnes in 1992 and increased again to 83 tonnes in 
1993, 136 tonaes in 1994 and 234 tofcnes in the Investigation Period (overall 
increase by 63.6%). 
The market share of these imports decreased from 5.1% in 1991 to 2.4% in 1992 
but increased continuously thereafter, up to 5% in the Investigation Period, 
despite the imposition of anti-dumping measures in the form of ad-valorem 
duties after the withdrawal of the undertakings by the Chinese exporters in 
1994. 
4. Prices of the dumped imports 
a) Overall trend 
(30) On the basis of price information available (Eurostat), prices of the Chinese 
exporters (OF, customs and anti-dumping duties unpaid) remained relatively 
stable between 1991 and the Investigation Period (+ 2%). 
The relatively stable prices of carbide has to be seen in conjunction with the 
increase in prices of the tungsten upstream products, ammonium paratungstate 
and tungstic oxide and acid which increased respectively by 27% and 25% over 
the same period. 
19 
h) Price Undercutting 
(31) For the Investigation Period, the Community industry's monthly weighted 
average selling price for carbide was compared with a monthly weighted 
average price of tungsten exported from the People's Republic of China to the 
Community. 
The Community industry's prices were ex-works and the exporters' prices were 
at-Community frontier, customs and anti-dumping duties paid. 
This comparison showed a negligible undercutting margin. However, it should 
be noted that, prior to the imposition of the ad valorem duty (September 1994) 
resulting from the withdrawal of the undertakings by the Chinese exporters, the 
Chinese prices were found to continuously undercut the Community producers' 
prices and price undertakings in force during this period did not appear to have 
been consistently adhered to. 
5. The situation of the Community industry 
(32) In accordance with Article 11(2) of the Basic Regulation, it was examined 
whether the expiry of the measures in force would lead to a continuation or 
recurrence of injury to the Community industry. 
20 
a) Production, production capacity, utilisation rate and stocks 
(33) The Community industry's production of the product concerned remained stable 
at around 3300 tonnes from 1991 to 1993 and increased to 4375 tonnes in 1994 
and 4641 tonnes in the Investigation Period, which represents an increase by 
40% in comparison with 1991. This increase should be seen in the light of the 
increase in consumption over the same period (+68%). 
(34) The Community industry's production capacity remained stable from 1991 to 
1993 at 4240 tonnes and increased to 4740 tonnes in 1994 and 5095 tonnes in 
the Investigation Period (+20% by comparison with 1991). 
(35) The utilisation rate was stable from 1991 to 1993, at around 78%, and increased 
up to more than 90% in 1994 and the Investigation Period. 
(36) Stocks decreased overall during the period, in particular in 1994 and the 
Investigation Period. 
b) Sales volume and market share 
(37) The quantity of carbide sold in the Community market by the Community 
industry increased in absolute terms from 1873 tonnes in 1991, to 1993 tonnes 
in 1992, decreased to 1828 tonnes in 1993, increased again to 2596 tonnes in 
1994 and 2994 tonnes in the Investigation Period (overall increase by 60%). The 
market share of this industry, after an increase in 1992, decreased continuously 
thereafter. It developed as follows: 66.9% in 1991, 70.7% in 1992, 67.6% in 
1993, 61.3% in 1994 and 63.7% in the Investigation Period. 
21 
c) Price evolution 
(38) The weighted average selling price of carbide decreased sharply (-20%) between 
1991 and 1994 and strongly recovered during the Investigation Period. 
It is noted that this recovery in prices coincided with the imposition in 
September 1994 of a 33% ad valorem duty on Chinese imports. Furthermore, 
this price increase followed the increase in the prices of the tungsten upstream 
intermediates, i.e. ammonium paratungstate and oxide (see also recital (31)). 
The price increase also coincided with the increase in demand. 
d) Profitability 
(39) The Community producers suffered heavy losses of up to 20% on average from 
1991 to 1994. As a consequence of the strong price recovery, profitable returns 
on sales were reached during the Investigation Period (13% on average). 
e) Employment 
(40) Given the fact that the personnel concerned works in an integrated production 
chain and the close links between the various tungsten products, specific 
allocations of personnel per product were not possible. Employment of the 
tungsten sector decreased by 14% over the whole period. In the Investigation 
Period, the Community industry employed 580 people in the tungsten 
production chain. 
22 
f) Conclusion on the situation of the Community industry 
(41) The above analysis has revealed that some injury indicators such as production, 
sales and capacity utilisation showed, after a long period of negative trends, 
positive developments in line with the positive development in the market 
overall and coinciding with the imposition of ad-valorem anti-dumping duties 
on the imports concerned by the present investigation after 1994. As far as the 
financial situation of the Community industry is concerned, it should be noted 
that profits were only made in the Investigation Period. In the years prior to the 
Investigation Period (1991-1994), the Community industry continued to suffer 
material injury in the form of decreasing prices and heavy losses of up to 20% 
on average. Finally it should be noted that the market share held by the 
Community industry, after an increase in 1992, decreased continuously from 
1993 to the Investigation Period by almost 10 percentage points. In this respect, 
it should be noted that, in the past, the Chinese exports were mostly 
concentrated on ammonium paratungstate and to a lesser extent oxide. 
However, it is not unlikely that, in the absence of measures on carbide, the 
Chinese exports would move gradually to carbide given that this is a higher 
value product in the chain. 
6. Price undercutting in the event of the expiry of measures. 
(42) A second price undercutting calculation was undertaken to establish the level of 
undercutting in the event of the expiry of anti-dumping measures. The 
methodology was the same as that described in recital (31) except that, no anti­
dumping duty was added to the import price. In this case, undercutting margins 
resulted of 23% on average, expressed as a percentage of the Community 
producer's prices. 
23 
7. Conclusion 
(43) The situation of the Community producers improved during the Investigation 
Period. However, it can be concluded from the investigation that, because of 
their low prices, Chinese imports aggravated the difficulties of the Community 
industry prior to the imposition of ad-valorem duties when the undertakings 
offered by the Chinese exporters/producers were apparently not respected. This 
has prevented the Community industry from fully recovering from the effects of 
the previous dumping practices. It appears highly likely that in the absence of 
anti-dumping measures, the prices of the Chinese dumped imports would be 
made at a level that undercuts the prices of the Community industry. 
(44) In this context, a number of claims were made by the Chinese exporters 
questioning the causal link between the dumped imports and the situation of the 
Community industry. 
It was alleged that the recovery of the Community industry was only due to the 
surge in demand for carbide in 1994 and the Investigation Period and not to the 
imposition of an ad valorem duty on Chinese imports. In this respect, it cannot 
be denied that the recovery in demand influenced the level of prices. However, 
it should be stressed that it was only after September 1994, when the ad valorem 
anti-dumping duties were imposed, that the sales prices achieved by the 
Community industry increased and the financial situation of the Community 
producers improved after years of losses. 
24 
(45) It was further claimed that Chinese imports have had less impact on the 
Community market than imports from other third countries like the United 
States or South Korea. It should be noted that, although imports originating 
from the USA and South Korea took over part of the increase in consumption 
during the period examined, with a consequent increase of the respective market 
shares, their prices were found to be generally higher than the Chinese prices 
and there was no evidence of these prices being dumped. In addition, any 
influence of other imports on the situation of the Community industry does not 
detract from the negative impact that, in the absence of measures, the Chinese 
imports could continue to have on the situation of the Community industry as 
shown by the likelihood of continued price undercutting (see recital (43) above). 
(46) Furthermore, the need for measures to be maintained should also be seen in the 
light of the pressure that imports of Chinese intermediate products could cause 
on the prices of the Community industry's end-product. In this context, it 
should be noted that the Community industry is, to a certain degree, dependent 
on external supply of upstream products (mainly ammonium paratungstate), 
given that the recycling process of scrap materials does not, at the moment, meet 
the overall needs of the industry. In the absence of anti-dumping measures on 
carbide, the industry could be compelled, under pressure from the Chinese 
imports of this product, to lower its prices of carbide and if faced at the same 
time with an increase in the Chinese prices of upstream products, its viability 
would be compromised. 
25 
(47) It was therefore concluded that, in the absence of measures, there is a likelihood 
of a recurrence of injury. 
F. COMMUNITY INTEREST 
(48) It should be recalled that in the previous investigation, the adoption of measures 
was considered not to be against the interest of the Community. Furthermore, it 
should be noted that the present investigation is a review, thus analysing a 
situation in which anti-dumping measures have already been in place. 
Consequently, the timing and nature of the present investigation would allow to 
assess any negative undue impact on the parties concerned by the anti-dumping 
measures imposed. 
1. The Community carbide industry 
(49) The Community industry in the Investigation Period was composed of three 
companies located in different Member States. For each of these companies, 
carbide represents the most important product in the tungsten production chain, 
being the final product in this chain. In terms of turnover, carbide accounts for 
more than 60% of the value of all sales of tungsten products. In the past years, 
constant investments have been made in this sector in order, in particular, to 
ensure compliance of production methods with environmental requirements and 
to develop new processing methods, namely recycling of tungsten containing 
scrap materials. This technology is aimed at gaining more independence from 
the raw materials (concentrates) or intermediate products (ammonium 
paratungstate and tungstic oxide and tungstic acid). 
26 
The economic situation which is characterised by financial losses having been 
incurred during four years by the Community industry has not yet been fully re­
established since the recent introduction of an ad valorem anti-dumping duty. 
(50) As shown in the investigation, it is likely that in the absence of protective 
measures on carbide, the last and most vulnerable stage of the tungsten 
production chain, injury would recur in the form of losses to the Community 
industry and continuing and even growing losses of market share. Fair 
conditions of competition should therefore be maintained to allow the 
Community industry to remain viable. 
2. The user industry 
(51) It is recalled that the Community users of carbide are mainly the manufacturers 
of hard metal components, (i.e. carbide tools and wear resisting materials). It is 
composed of a few large companies ("major users") which partly have an 
integrated production (i.e. they start from the ammonium paratungstate or 
tungsten oxide stage and transform these products up to the final stage) and 
around a hundred smaller companies ("smaller users"), which start mostly at the 
carbide stage. 
(52) One major user claimed that the anti-dumping duty on Chinese imports would 
increase its overall production costs and endanger its position on the 
Community market in comparison with its major US and Japanese competitors 
which can provide themselves with carbide not subject to anti-dumping 
measures. It would allegedly suffer a loss of competitiveness. 
27 
It was found that this user, which is an integrated producer of carbide tools and 
wear resistant materials, started its production process during the period 
considered mainly from upstream intermediates such as ammonium 
paratungstate and tungstic oxide and had, therefore, limited needs for imported 
carbide. It imported almost a fourth of the total of carbide imported in the 
Community from the People's Republic of China. However, this represented 
less than 4% of its carbide consumption. The maximum impact of the 33% duty 
was calculated to amount to less than 1% on the production costs of the tungsten 
related products of this user. Any impact of the duty on this company's tungsten 
chain would therefore appear to be minimal. 
(53) A dozen smaller users have expressed themselves in favour of maintaining the 
measures. The main argument was that if the measures on carbide lapsed, it 
would only favour the major users' strong position in the market of carbide 
tools. These users have a stronger negotiating position vis-à-vis the Chinese 
suppliers than the smaller companies and could therefore obtain more 
advantageous prices. 
(54) No other substantiated comments against measures were submitted by users. 
Since the measures have been in place for a certain period, and would be 
maintained at the same level, it can be concluded that this would not imply any 
deterioration of the situation of the users in general. 
28 
3. Effective competition 
(55) It has also been claimed that the level of competition on the carbide market 
would be affected by the continuation of the anti-dumping duty since it would 
create an oligopolistic market. All users would have to rely on the Community 
producers. 
(56) It should be recalled that in spite of anti-dumping measures, the Chinese 
exporters have always been present on the Community market and increased 
their market share during the Investigation Period. It should be further noted 
that there are other third country suppliers of carbide in the Community, 
ensuring that a number of alternative supply sources exist. Finally, it has been 
demonstrated that due to the interrelationship between the various products of 
the tungsten chain, there is considerable competitive pressure in the market for 
any product in the chain from the competitors in the market for the other 
products. 
4. Conclusion on Community interest 
(57) In the light of the above, it was concluded that there were no compelling reasons 
not to maintain the measures in force, in order to ensure competitive conditions 
of fair pricing and to avoid any likelihood of a recurrence of injury to the 
Community industry which would certainly occur if measures were allowed to 
expire. 
29 
G. ANTI-DUMPING MEASURES 
(58) All parties concerned were informed of the essential facts and considerations on 
the basis of which it was intended to recommend the maintenance of the 
existing measures. They were also granted a period within which to make 
representations subsequent to these disclosures. The comments of the parties 
were considered and, where appropriate, the findings have been modified 
accordingly. 
(59) It follows from the above that, as provided for by Article 11(2) of the Basic 
Regulation, the anti-dumping duty of 33% on imports of tungsten carbide and 
fused carbide originating in the People's Republic of China imposed by 
Regulation (EEC) N° 2737/90 should be maintained. Regulation (EEC) N° 
2737/90 has been maintained in force by this review and will lapse on its 
conclusion. The anti-dumping duty imposed by that Regulation should therefore 
be reimposed. 
30 
HAS ADOPTED THIS REGULATION: 
Article 1 
1. A definitive anti-dumping duty is hereby imposed on imports of tungsten 
carbide and fused carbide, falling within CN code 2849 90 30 and originating in 
the People's Republic of China. 
2. The duty shall be 33% of the net, free-at-Community-frontier price of the 
product, before duty. 
3. Unless otherwise specified, the provisions in force concerning customs duties 
shall apply. 
Article 2 
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, 

ISSN 0254-1475 
COM(98) 142 final 
DOCUMENTS 
EN 02 12 11 09 
Catalogue number : CB-C0-98-147-EN-C 
ISBN 92-78-31909-0 
Office for Official Publications of the European Communities 
L-2985 Luxembourg 
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