COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 25.09.1997 
COM(97)468 final 
Proposal for a 
COUNCIL REGULATION ŒC) 
AMENDING REGULATION (EEC) N° 2552/93, 
IMPOSING A DEFINITIVE 
ANTI-DUMPING DUTY ON IMPORTS OF ARTIFICIAL CORUNDUM 
ORIGINATING IN THE PEOPLE'S REPUBLIC OF CHINA 
(presented by the Commission) 

EXPLANATORY MEMORANDUM 
1. In September 1993, by Regulation (EEC) N° 2552/93, the Council imposed a 
residual anti-dumping duty on imports of artificial corundum originating in the 
People's Republic of China. 
2. The definitive anti-dumping duty was subsequently extended to all imports of 
artificial corundum originating in the People's Republic of China by Council 
Regulation (EC) N° 2556/94. 
3. In July 1995, a request for a review pursuant to Article 12 of Council Regulation 
(EC) N° 3283/94 was lodged by CEFIC on behalf of Community producers 
representing a major proportion of the Community production of artificial 
corundum. This request for a review was made on the grounds that the existing 
definitive anti-dumping duty on imports of artificial corundum originating in the 
People's Republic of China was no longer sufficient to counteract the dumping. 
However, as a period of more than four years had elapsed since the adoption of 
measures following the last review in 1991, the Commission considered it 
appropriate to initiate an interim review covering dumping and injury pursuant 
Article 11(3) of Regulation (EC) N° 384/96 which replaced Regulation (EC) 
N°3283/94. 
4. On 12 January 1996, by a notice published in the Official Journal of the European 
Communities, the Commission announced the review of Regulation (EEC) N° 
2552/93 amended by Regulation (EC) N° 2556/94. 
A 
5. The investigation showed that artificial corundum from China was exported to the 
Community with a dumping margin of 88.7% and that, as measures were not 
adhered to, further material injury was suffered by the Community industry 
because of the increased volumes and low prices of the product in question. 
Furthermore it was established that an expiry of the measures would be likely to 
increase the injurious effects of dumping and, consequently, further weaken the 
situation of the Community industry. 
After having consulted the Community user industry, it was concluded that there 
were no compelling reasons not to maintain the measures in the present case and 
that it was in the Community interest to impose amended anti-dumping measures. 
After examining the arguments put forward by the interested parties, the 
Commission has definitively established the facts. 
6. A continuation of the measures appears therefore warranted, but they have to be 
adapted in the light of findings on dumping and injury based on the results of the 
investigation. 
7. It is therefore proposed, after consultation of the Advisory Committee, that the 
Council adopts the draft Regulation annexed, amending Regulation (EEC) N° 
2552/93, imposing a definitive anti-dumping duty on imports of artificial corundum 
originating in the People's Republic of China. 
•) CU 
Proposal for a 
COUNCIL REGULATION (EC) N°.../97 
OF... 
AMENDING REGULATION (EEC) N° 2552/93, 
IMPOSING A DEFINITIVE 
ANTI-DUMPING DUTY ON IMPORTS OF ARTIFICIAL CORUNDUM 
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 Community1, and 
in particular Article 11(6) thereof, 
Having regard to the proposal submitted by the Commission after consulting the 
Advisory Committee, 
Whereas: 
A. PREVIOUS PROCEDURE 
(1) Following a complaint lodged by the European Chemical Industry Council 
(CEFIC), the Commission, by Regulation (EEC) No 2690/842 imposed provisional 
anti-dumping duties on imports of artificial corundum originating inter alia in the 
People's Republic of China. Subsequently, by Decision 84/650/EEC3, the 
Commission accepted an undertaking given by the China National Import and 
Export Corporation and repealed the provisional duties previously imposed. 
1 OJ N° L 56, 6.3.1996, p.l. Regulation as amended by Regulation (EC) N° 2331/96 (OJ N° L 317, 
6.12.1996, p. 1) 
2 OJ No L 255 of 25.09.1984, p. 9 
3 OJ No L 340 of 28.12.1984, p. 82 
A & 
(2) Following a request by CEFIC, a review of the afore mentioned measures was 
carried out which led to Decision 91/512/EEC4 by which the Commission accepted 
undertakings given by six Chinese companies authorised by the Chinese Chamber 
of Commerce to export artificial corundum to the Community. 
(3) It was subsequently found that other exports were being made from China by other 
exporters and trade organisations previously unknown to the Commission which 
led to the imposition, by Council Regulation (EEC) No 2552/935, of a definitive 
residual anti-dumping duty of 30.8% on imports of artificial corundum originating 
in the People's Republic of China, with the exception of imports sold for export to 
the Community by the six Chinese companies from which price undertakings had 
been accepted. 
(4) Subsequently, the Commission established that the above mentioned undertakings 
had been violated. The anti-dumping duty was consequently extended to the six 
Chinese companies concerned by Council Regulation (EC) No 2556/946 with the 
result that an anti-dumping duty of 30.8% was applied as from 22.10.1994 to all 
imports of artificial corundum originating in the People's Republic of China. 
4 OJNoL 275-of 02.10.1991, p. 27 
5 OJ No L 235 of 18.9.1993, p. 1 
6 OJ No L 270 of 21.10.1994, p. 24 
B. REVIEW INVESTIGATION 
(5) On 27 July 1995, a request for a review was lodged by CEFIC on behalf of 
Community producers representing a major proportion of the Community 
production of artificial corundum. This request for a review was made pursuant to 
Article 12 of Council Regulation (EC) No 3283/94 as replaced by Regulation (EC) 
No 384/96 (the "Basic Regulation") on the grounds that the existing definitive anti­
dumping duty on imports of artificial corundum originating in the People's 
Republic of China had not resulted in sufficient movement in resale prices in the 
Community, the duty having been compensated by a further decrease in the 
Chinese export prices. Consequently the Community industry was allegedly 
suffering further injury from the Chinese dumped imports. 
(6) As a period of more than four years had elapsed since the adoption of measures 
following the last review in 1991 and in the light of evidence that indicated 
changed circumstances regarding both dumping and injury, the Commission 
considered it appropriate to initiate an interim review covering dumping and injury 
pursuant to Article 11(3) of the Basic Regulation. 
(7) On 12 January 1996, by a notice published in the Official Journal of the European 
Communities1, the Commission announced the review of Regulation (EEC) 
No 2552/93, as amended by Regulation (EC) No 2556/94, pursuant to Article 11(3) 
of the Basic Regulation. 
7 OJNoC7of 12.1.1996, p. 5 
(8) The Chinese producers claimed that the request for review contained evidence 
relating exclusively to the evolution of resale prices in the Community market, 
while no meaningful information was provided about the complainants' current 
market situation, as would normally be the case in a complaint giving rise to full 
investigation of dumping and injury. 
In this respect, it should be noted that the complaint contained sufficient evidence 
of both a sharp increase in the volume and market share of the Chinese imports of 
artificial corundum combined with a decrease in the Chinese export prices and of a 
corresponding decline of the Community producers' market share. 
(9) The Commission officially advised the producers, exporters and importers known 
to be concerned, and gave the parties directly concerned the opportunity to make 
their views known in writing and to request a hearing. 
(10) The Commission sent questionnaires to parties known to be concerned and received 
replies to its questionnaires from the complainant producers and two other 
producers in the Community, eight Chinese exporters and three importers in the 
Community. Concerning the market economy country, to be used as analogue 
country for the purpose of establishing normal value for the People's Republic of 
China, the Commission received replies from three producers in Brazil and one 
producer in the USA. 
(11) The Commission sought and verified all information it deemed necessary for the 
purposes of a determination and carried out investigations at the premises of the 
following companies: 
(a) Community producers: 
- Péchiney Electrométallurgie, France 
- Universal Abrasives, United Kingdom 
- H. C. Starck, Germany 
(b) Importers in the Community: 
(i) related importer 
- Sinabrasive Import-Export GmbH., Ratingen, Germany 
(ii) unrelated importers 
- Smyris Abrasive s.r.L, Pero, Italy 
- Mineralien-Werke Kuppenheim GmbH., Kuppenheim, Germany 
(12) The following Chinese exporters fully replied to the questionnaire. 
- China Abrasives import and Export Corporation, Zhengzhou, PRC 
- CMEC Guizhou Corporation Ltd., Guizhou, PRC 
- Guangdong Machinery & Equipment Import & Export, Guangzhou, 
PRC 
- Guiyang Xinsheng Abrasives & Abrasive Tools Factory, Guiyang, PRC 
- Mount Tai Abrasives Company, Shandong, PRC 
- Shandong Machinery & Equipment Import & Export Corp., Qingdao, 
PRC 
- The 7th Grinding Wheel Factory Import & Export Corp., Guizhou, PRC 
- White Dove (Group) Corporation Ltd., Zhengzhou, PRC 
(13) As Brazil has been used as the analogue country for the purpose of establishing 
normal value, as explained in recitals (25) to (28), the Commission conducted an 
investigation at the premises of three Brazilian producers of artificial corundum. 
Their names are not mentioned in this Regulation for reasons of confidentiality. 
(14) The investigation of dumping covered the period from 1 January 1995 to 31 
December 1995 (hereinafter referred to as the "investigation period"). The period 
for the determination of injury covered the years 1992 to 1995. The geographical 
scope of the investigation was the Community as constituted at the time of the 
initiation, thus including all 15 Member States. 
(15) All parties concerned were informed of the essential facts and considerations on the 
basis of which it was intended to recommend the amendment of the existing 
measures. They were also granted a period within which to make representations 
subsequent to these disclosures. 
(16) Since the interim review in respect of imports from China was not concluded 
before the end of the five-year period of application of the measures concerned 
(that is to say on 26 July 1996), the interim review has also covered, in accordance 
with Article 11(7) of the Basic Regulation, the circumstances set out in Article 
11(2) of the said Regulation (the circumstances to be examined in the context of an 
expiry review, i.e. likelihood of continuation or recurrence of dumping and injury). 
This is why the investigation has exceeded the normal period of one year as 
provided for in Article 6(9) of the Basic Regulation. 
C. PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT 
I. Description of the product under consideration 
(17) The product concerned by this review is fused aluminium oxide, also known as 
artificial corundum falling from 1 January 1997 onwards within CN codes 2818 10 
10 and 2818 10 90. It is principally produced in two basic varieties, for which the 
chemical formula is identical (A1203): 
- brown artificial corundum, consisting of 94 to 97% aluminium oxide 
- white artificial corundum, consisting of 97.5 to 99.5% aluminium oxide 
Small quantities of pink artificial corundum which has a content of aluminium 
oxide similar to the white artificial corundum are also produced and sold in the 
Community. Hence the term white corundum will be intended hereafter to include 
pink corundum as well. 
(18) The raw material for the production of brown artificial corundum is bauxite in 
natural or calcined form, while for the production of white artificial corundum, 
calcined alumina is used, which is a processed form of bauxite. Artificial corundum 
is manufactured by melting the raw material in electric-arc furnaces at temperatures 
higher than 2000° C. 
Artificial corundum, due to its specific characteristics, notably hardness, is mainly 
used, in the production of abrasive materials such as grinding wheels, cutting 
wheels, sandpaper and in the production of refractory materials. 
The production process generates a certain amount of lower quality artificial" 
corundum containing less than 94% of aluminium oxide. Its use is limited to the 
production of resin-bonded grinding wheels and to sand-blasting purposes. 
(19) In the Community, the product is sold mainly in the form of grains for mixture (less 
than 10 mm) and in grains for grit size (crystalline powder). These latter are 
normally classified following international standards (FEPA in the Community). 
However, artificial corundum is also sold in the form of lumps of variable sizes of 
more than 100 mm. 
These different forms in which the product in question is sold correspond to 
different steps of the final stage of the production process. For the purpose of the 
investigation, both white and brown artificial corundum have been classified in the 
following four categories, according to the form in which the product is sold: 
- lumps 
- grains for mixture (size range: 0 to 10 mm) 
- grains for grit size macro (FEPA standard: 8 to 220) 
- grains for grit size micro (FEPA standard: 240 to 1200). 
(20) The Chinese producers submitted that brown and white artificial corundum are two 
distinct products, with different qualities and characteristics which make them not 
interchangeable for the production of specific abrasive end-products. Accordingly, 
these producers claimed that brown and white artificial corundum should be treated 
separately for the purpose of the anti-dumping investigation. 
It should be noted, however, that the arguments put forward by the Chinese 
producers refer exclusively to the use of artificial corundum for manufacturing 
abrasive end-products, and not to the production of refractory masses which 
constitutes the other main end use of artificial corundum and for which the 
interchangeability of white and brown corundum was not put into question. 
' Furthermore, it has been found that brown and white artificial corundum are made 
from the same raw material, i.e. the bauxite, and through the same basic production 
process. Moreover, they both have the same basic chemical and physical 
characteristics and final applications. They are both used for the production of 
abrasives and refractory materials, are to a certain degree interchangeable as 
regards both these uses, hence no clear dividing line can be established between 
basic varieties as far as their use is concerned. Therefore, for the purpose of this 
investigation, the various forms of artificial corundum have been considered as a 
single product. This approach confirms the one adopted in the previous 
investigation. 
2. Like product 
(21) The Commission found that the artificial corundum produced and sold in the 
Community and in Brazil, which was chosen as the analogue country, on the one 
hand, and that imported from China on the other, were made from the same raw 
material and were manufactured by using the same basic technology. Moreover, it 
was found that Community and Brazilian artificial corundum were comparable in 
their essential physical and chemical characteristics, applications and uses to that 
imported from the People's Republic of China. 
(22) In this context, the Chinese producers argued that the artificial corundum imported 
from China in lump form is not in any sense comparable with the artificial 
corundum in grain form marketed by the Community producers. 
In this respect, it was found however, that lumps and grains correspond to two 
subsequent final steps of the production process of artificial corundum. Indeed, 
lumps can be easily processed into grains and this operation is often carried out by 
the importers/traders with little effect on the market price of the product. 
Furthermore, Chinese exports of artificial corundum in the form of lumps 
represented only 25% of total exports of the product in question to the Community, 
the rest being exported in the form of grains. This mix of sales was similar to that 
of the Community producers. 
(23) On the basis of all the above, it is considered that artificial corundum produced and 
sold in the Community and Brazil, as well as that imported from the People's 
Republic of China, are like products within the meaning of Article 1(4) of the Basic 
Regulation. 
10 
D. DUMPING 
(24) The continued existence of dumping was verified, to ascertain firstly whether there 
were still grounds for continuation of measures against artificial corundum 
originating from the People's Republic of China and, if so, whether the alleged 
changed circumstances with regard to the dumping margin required the existing 
measures to be adapted accordingly. 
1. Normal Value 
(25) In establishing normal value, account was taken of the fact that the People's. 
Republic of China is considered to be a non market economy country. Therefore, 
in accordance with Article 2 (7) of the Basic Regulation, the determination of 
normal value had to be based on a market economy third country. In this respect, 
the United States of America (USA) and Brazil were envisaged in the notice of 
initiation of the review as appropriate market economy countries for the 
determination of normal value. The Chinese producers submitted that Brazil was 
inappropriate because only one major producer operates in that market and 
alumina, the raw material for the production of white artificial corundum, is 
allegedly purchased at inflated prices from its major competitor in the domestic 
market or sourced from Australia. Consequently, it was argued that prices of 
artificial corundum in Brazil are abnormally high, and therefore exports to the 
Community from this country have ceased. 
11 
(26) The Commission requested the two known USA producers of artificial corundum 
to co-operate in this review, but only one of them accepted to answer to the 
questionnaire. A request for co-operation was also made to the three known 
producers in Brazil which all accepted to provide the information requested in the 
questionnaire. 
(27) The domestic sales of the product concerned by the three Brazilian producers 
during the investigation period have been found to represent about 80% of the total 
exports from China to the Community. The relative size-of these three producers 
was such that none of them appeared to have a dominant position on the Brazilian 
market. Furthermore, imports into Brazil from third countries have been estimated 
to represent about 20% of the domestic market. Hence, Brazil is considered to be a 
sufficiently open and competitive market for artificial corundum. Bauxite, the 
main raw material, is easily available in an area close to the plants and no relevant 
supply from Australia has been recorded. No evidence was found of alumina being 
sold at inflated prices by any of the three producers to the others. Finally, Brazilian 
exports of artificial corundum to the Community during 1995 were almost 3000 
tonnes, which is a significant volume. In the light of the above, and taking into 
account of the number of co-operating producers in USA and Brazil, this latter 
country is considered to be an appropriate market economy country for the purpose 
of establishing normal value for the Chinese exports to the Community. 
12 
(28) Normal value has been determined for each product type of artificial corundum 
exported from China to the Community during the investigation period. Normal 
value per product type was generally established on the basis of the prices paid or 
payable by independent customers in Brazil for sales of the like product made in 
sufficient quantities and in the ordinary course of trade. In cases where it was 
found that no or insufficient sales of a given product type were made in Brazil by 
any of the producers investigated, normal value for this type was constructed on the 
basis of its cost of production in Brazil, plus a reasonable amount for selling, 
general and administrative expenses and for profits, in accordance with Article 2(3) 
of the basic Regulation. The amounts of these expenses and profit have been 
determined on the basis of the actual amounts applicable to production and sales, in 
the ordinary course of trade, of the like product for the producer in question in the 
Brazilian market, in conformity with Article 2(6) of the Basic Regulation. 
2. Export Price 
(29) Exports of the product concerned to the Community by the Chinese producers 
which replied to the Commission's questionnaire represented about 76% of total 
imports from China during the investigation period as recorded in Eurostat 
statistics The export price was generally established on the basis of the price 
actually paid or payable for the product sold for export from the People's Republic 
of China to independent customers in the Community, in conformity with Article 
2(8) of the Basic Regulation. 
13 
(30) One Chinese producer provided information about the export price which was 
found to be false. This information has been disregarded and, in conformity with 
Article 18 of the Basic Regulation, the export prices of the producer in question 
were determined on the basis of the information provided by its unrelated importers 
in the Commumty. 
(31) Two other Chinese producers sold for export to a related importer in the 
Community, but only in one case did the importer co-operate and it was possible to 
construct the export price on the basis of the resale price at which the imported 
product was first resold to an independent buyer. From the resale price all cost, 
between importation and resale incurred by the importer, as well as a reasonable 
amount for profit, were deducted, so as to establish a reliable export price, in 
conformity with Article 2 (9) of the Basic Regulation. The amount for profit has 
been calculated by reference to those realised by the co-operating independent 
importers. As to the other Chinese producer it was considered non co-operating. 
(32) With regard to exports made by either the aforementioned non co-operating 
Chinese producer or those who did not manifest themselves, the export price had to 
be established pursuant to Article 18 of the Basic Regulation on the basis of the 
facts available. It was considered that the figures reported by Eurostat, duly 
adjusted to deduct the volume and value of the imports into the Community from 
the co-operating Chinese producers, provided the most appropriate basis and the 
export price has been determined accordingly. 
14 
3. Comparison 
(33) Normal value and export price have been compared for each product type at FOB 
level. For the purpose of ensuring a fair comparison between normal value and 
export price, account was taken and, where appropriate, adjustments made in 
accordance with Article 2 (10) of the Basic Regulation, for differences affecting 
price comparability» 
(34) While a considerable proportion of domestic sales in Brazil was made to end-users, 
i.e. grinding wheel producers and refractory producers, the major part of the 
Chinese exports to the Community were made to traders. However, no clear price 
difference has been found in Brazil between sales to traders and sales to end-users. 
Hence, no adjustment has been made with regard to differences in levels of trade. 
(35) Adjustments for other factors affecting price comparability have been made. Ocean 
freight, insurance costs for transport and credit costs were deducted, where 
appropriate, from the export price in order to express it at a Chinese border FOB 
level. 
(36) In the case of normal value, adjustments for inland transport to harbour and loading 
costs have been made in order to bring the normal value, initially established at an 
ex-factory level, to a FOB Brazilian border level. Adjustments for credit costs have 
also been made where appropriate. 
15 
(37) The Chinese producers submitted that artificial corundum in grain form originating 
in China must undergo further processing by the importer in order to be made fit 
for sale in the Community market. The Commission found that the Chinese product 
actually underwent a number of processes including reseiving, removal of iron and 
finally packing before being sold to the end-users. Moreover, sometimes the 
product needed to be dried and/or made more cubic (block shaped). The costs 
relating to these operations have been deducted from normal value for the purpose 
of comparability with the export price of the Chinese product. 
(38) Regarding other alleged physical differences which are claimed to result in a lower 
quality of the Chinese product, no evidence has been provided to substantiate such 
allegations. Hence, no further adjustment was granted in this respect. 
4. Dumping margin 
(39) In accordance with Article 2(11) of the Basic Regulation, the weighted average 
normal value per product type of artificial corundum was compared to the weighted 
average export price of the corresponding type. This comparison showed the 
existence of dumping, the dumping margins per type being equal to the amount by 
which the normal value exceeded the export price. 
(40) Seven Chinese exporters asked that individual dumping margins should be 
determined for them. However, some exporters did not provide any documentary 
evidence to support their claim, some others only provided the business licence. 
This document was not considered sufficient to support the claim of these exporters 
to be independent from the State. Consequently their request could not be accepted. 
It is therefore considered appropriate, in accordance with previous Community 
practice, to establish one country-wide dumping margin. 
i6 
(41) This margin has been calculated by comparing the overall weighted average normal 
value to the overall weighted average export price. The amount of this dumping 
margin, expressed as a percentage of the CIF Community frontier export price duty 
unpaid, has been established to be 88.7%. 
E. COMMUNITY INDUSTRY 
(42) The complaining Commumty producers which took part in the investigation 
account for almost 50% of the total Community production of artificial corundum. 
The other known producers did not fully co-operate in the investigation, but 
expressed their support for the review of the measures in force. 
Given the above, the complaining Community producers which cooperated with the 
investigation are considered to constitute the Community industry within the 
meaning of Article 4(1) of the Basic Regulation for the purpose of the 
investigation. 
F. INJURY 
1. Community consumption 
(43) The consumption of artificial corundum in the Community increased by 70,000 
tonnes from 1992 (272,913 tonnes) to the end of the investigation period (343,185 
tonnes). This represents an overall increase of 25%. This increase was constant as 
from 1993, after a slight decrease in 1992-1993 by 2.4%. 
17 
2. Volume and prices of the dumped imports 
2. J. Volume and market shares of imports 
(44) The volume of imports from China increased continuously and more than 
quadrupled during the period examined, from 13,403 tonnes in 1992 to 54,836 
tonnes in 1995. The market share of these imports followed a similar progressive 
trend: 4.9% in 1992, 6.6% in 1993,k 9.7% in 1994 and 16% in 1995, gaining a 
further 11% of market share since 1992. 
2.2. Prices of the dumped imports 
(45) For the investigation period, the undercutting calculations were made separately for 
brown and white corundum and each type was classified in four categories 
according to the grain mix. For the purposes of comparison, an adjustment was 
made to the exporters' prices of grain (ex-Community frontier) to take account of 
customs duty and anti-dumping duty plus an allowance in respect of processing 
costs incurred by importers in the Community (based on information collected 
during the investigation). The Community producers' prices were considered at ex-
works level. Comparisons were made at comparable levels of trade. The comparison 
showed a weighted average undercutting margin of 21.7% for all types of artificial 
corundum during the investigation period. 
18 
For the period between 1991 and 1994, while undertakings were in force, the 
investigation confirmed that the Chinese prices (Eurostat basis) were on average 
below the Community industry's prices and, indeed, below the undertaking prices. 
Moreover, the ad valorem duty of 30.8% imposed in June 1994 was largely 
absorbed by a subsequent 24% decrease in the export price between 1994 and 1995. 
2.3. Conclusion 
(46) The allegation made in the request for review was fully confirmed. The volume and 
market share of the Chinese imports have substantially increased in the period 
examined and the replacement of the undertakings by a duty has resulted in a further-
fall in export prices. 
3. Situation of the Community industry 
3. J. Production, production capacity, utilisation rate 
(47) The production of the Community industry increased regularly, with the exception 
of 1993, from 91,056 tonnes in 1992 to 102,821 tonnes in 1995. However, this 
increase in production of 11,500 tonnes (12.9%) should be seen in relation to an 
increase in consumption of 70,000 tonnes (25%) during the same period. 
(48) The production capacity of the Community industry remained stable, at 140,700 
tonnes for the period examined. 
19 
(49) The capacity utilisation rate on average for the Community industry decreased "from 
66% in 1992 to 60% in 1993 and increased thereafter up to 73% in 1995, since the 
production increased and the production capacity did not significantly change. 
3.2. Sales volume and market share of the Commumty industry 
(50) The sales of the complaining Community producers increased constantly in the 
period considered (with the exception of 1993) from 87,488 tonnes in 1992 to 
93,531 tonnes in 1995 (increase by 6.9%). However, this development of sales 
volume compared to the much more significant increase of the apparent Community 
consumption led to a decrease in the market share held by the Community industry 
from 32,1% in 1992 to 27,3% in 1995. 
3.3. Stocks 
(51) Stocks of artificial corundum held by the Community industry increased regularly 
from 11,842 tonnes in 1992 to 17,160 in 1995 (increase by 45%). 
3.4. Price evolution. 
(52) The prices of the Community industry have been depressed over the past years. The 
Community producers had to adapt their prices to the downward pressure exerted 
by the Chinese dumped imports. Prices decreased on average by 8% from 1992 to 
1994, albeit there was a slight recovery (less than 2% on average ) after 1994. 
20 
3.5. Profitability 
(53) The Commission found that during the period considered, the artificial corundum 
Community industry has recorded poor financial results. The worst financial results 
were recorded in 1994 (-23.6% on a weighted average basis) where prices were at 
their lowest. In 1995, (investigation period) losses decreased on a weighted average 
basis to -13.9%, partly as a consequence of an increase in this period of the 
Community industry's production of special types of the product designed for 
specific applications. However, on average, losses were prevalent throughout the 
period. 
3.6. Employment 
(54) The employment levels of the Community industry fluctuated during the period 
under consideration, representing in 1995 similar levels to 1992 (around 750 
persons). 
4. Conclusion on injury 
(55) In spite of the measures in force, an overall assessment of the main economic 
indicators leads to the conclusion that the artificial corundum Community industry 
continues to show clear signs of economic difficulties. The production and sales of 
the complainants increased in the examined period, however, this increase did not 
reflect the increase in consumption with a consequent loss in market share of 4.8 
percentage points between 1992 and 1995. Financial losses were prevalent 
throughout the period examined and indeed the Community industry was unable to 
recover from the price pressure and financial difficulties encountered when the 
proceeding was reviewed in 1991. It is therefore concluded that the Community 
industry continued to suffer material injury during the period examined. 
21 
5. Causation of injury - -
5.1. Dumped imports 
(56) The extent to which the injury suffered by the Community industry had continued to 
be caused by the dumped imports was examined. It was found that the injury 
consisted mainly in financial losses resulting from depressed prices together with a 
loss in market share in an expanding market. In this context, it is noted that the 
market share of the Chinese imports substantially increased at the same time as the 
Community industry's market share decreased. Moreover^ the Chinese prices 
significantly undercut those of the Community industry. It was therefore concluded 
that the Chinese imports largely contributed to the continued injury sustained by the 
Community industry. 
5.2. Other imports 
(57) The effect of imports from other third countries in determining the injury suffered by 
the Commumty industry were analysed. 
Measures on artificial corundum were in force until 26 July 1996 for a number of 
countries namely Hungary, Poland, the Czech Republic, Brazil, the Republic of 
Slovenia, the Russian Federation and Ukraine. No expiry review of these measures 
was requested by the Community industry which considered that the imports from 
the above-mentioned countries no longer constituted a threat to this industry. 
22 
On the basis of Eurostat data, the investigation confirmed that during the period 
examined, imports from the above countries remained relatively stable in terms of 
market share (slight increase for Russia and Ukraine). Moreover, the prices of 
imports originating in these countries were in all cases consistently higher than the 
Chinese prices and indeed there were no indications that such imports were being 
dumped. 
5.3. Structure of the industry 
(58) The Commission examined whether the difficulties faced by the industry could be 
attributed to structural problems. It was found that considerable efforts of. 
rationalisation have been made by the Community industry allowing this industry to 
develop the production of a significant range of types of artificial corundum, 
including special types, and to be competitive with regard to the product concerned. 
Moreover, this industry has made significant investments in particular to comply 
with environmental requirements and is overall modernized. 
* * 
5.4. Conclusion on causation 
(59) No other factors were found which could have had a particular impact on the 
situation of the Community industry. It is therefore concluded that the imports from 
China, because of their increased volumes and low prices have, in isolation, 
continued to cause material injury to the Community industry. 
23 
^6. Likelihood of continuation of dumping and injury 
(60) In the light of the above analysis and in order to assess the effect of the expiry of 
the measures in force, the following was considered: 
(61) - Since measures were first imposed in 1984, the Community industry of artificial 
corundum has undergone considerable restructuring, with some companies closing 
down and others merging. Furthermore, the industry has tended to develop the 
production of more specialized types of artificial corundum, in particular that of 
white corundum. In spite of these restructuring efforts, the present review has 
shown that continued dumping and price undercutting has jeopardized the 
possibility of the industry's recovery, with low financial results incurred by all 
producers. Should measures be allowed to lapse, this could only worsen the 
difficulties faced by this industry. 
(62) - As regards the issue of dumping, it is noted that the measures in force have, in 
recent times, generally been insufficient to prevent dumping from continuing with a 
consequent substantial increase in the volume of the imports concerned. The 
market share of the Chinese imports increased from 5% in 1992 to 16% in 1996. 
Moreover, it is noted that the undertakings in force between 1991 and 1994 were 
not adhered to and the ad valorem duty subsequently imposed in 1994 as a result, 
has been largely absorbed by a significant decrease in the export price. In the light 
of the behaviour of the exporters concerned and the rate of increase of the Chinese 
imports, the indications are that dumping is likely to continue, causing further 
injury in the absence of effective measures. 
24 
(63) It follows from the foregoing that an expiry of the measures would t>e likely to 
increase the injurious effects of dumping and, consequently, further weaken the 
situation of the Community industry. A continuation of the measures appears 
therefore warranted, but they have to be adapted in the light of findings on dumping 
and injury based on the results of the present investigation, in order to ensure that 
the measures are appropriate in the circumstances found. 
G. COMMUNITY INTEREST 
1. The Community artificial corundum industry 
(64) The Community artificial corundum industry was in the investigation period 
composed of large companies located in different Member States. Artificial 
corundum represents an important branch of their activities for which constant 
investment has been made in the recent years in order, in particular, to ensure 
compliance of production methods with environmental requirements. Furthermore, 
this industry is able to supply a wide range of types tif artificial corundum, 
including a number of specialities which are designed for specific applications, in 
particular in the steel and car manufacturing industries. The maintenance of this 
industry is therefore, from the viewpoint of variety and capacity for specialisation, 
in the interest of users in the Community. In this context, it is noted that although 
not all types of the product have been imported from China, the investigation has 
shown that the continued imports at low prices of certain types of corundum are 
putting at risk the viability of the Community industry as a whole and that a further 
deterioration could be expected in the absence of effective measures. 
25 
(65) One association of abrasive producers pointed out that the anti-dumping_ measures 
have been in force for a considerable period. This association claimed that in the 
recent past a number of producers had closed down and others merged with the 
result that the number of suppliers on the side of the Community industry had been 
considerably reduced and might therefore no longer justify the continued 
imposition of the measures. 
In this respect, it is noted that the present producers of artificial corundum account 
for a significant production capacity, which would allow the supply of 
approximately 90% of the artificial corundum consumption in the investigation 
period. Furthermore, the industry has undergone considerable restructuring over the 
past years in a attempt to rationalise production; however these efforts have been 
largely undermined by the continuous and increasing presence of the dumped 
imports. In particular, it is noted that the duty imposed in 1994 was almost entirely 
absorbed, thus, undermining any useful effects of the measures to the industry. 
(66) It was also claimed that the Community producers had a dominant position due to 
recent consolidations in the market and that this position would jeopardise the 
conditions of competition on the Community market. It should be noted that the 
merger referred to, which concerned one complainant producer and another 
producer in Austria was authorised pursuant to the Community competition 
legislation. Furthermore, given the existence of other Community producers in the 
market (a total of four producers following the said merger) and the presence of 
imports from a number of countries, this claim does not appear to be justified. 
26 
2. The user industry 
(67) It is recalled that the Community users of artificial corundum are mainly the 
manufacturers of abrasives (such as grinding and cutting wheels and disks, 
sandpaper and abrasive paper) and the industry of refractory products (refractory 
masses for furnaces and safes). 
The abrasive applications account for 70 % of the Community consumption and 
refractory applications for 30 %. 
(68) No users contacted the Commission following the publication of the notice of 
initiation. The Commission has nonetheless sent questionnaires to a number of 
known major users of artificial corundum in the Community which represented a 
variety of possible uses of the product either imported from China or Community 
produced. Several replies were received from companies and from one association 
of users 
(69) The information provided was mostly of a general nature and to a large extent 
incomplete and contained insufficient indications on the impact of measures. On 
the basis of all the information provided for both abrasive and refractory uses, it 
appears that the potential impact of the anti-dumping measures would vary 
considerably according to the content of artificial corundum in the end products 
which, in turn, depends on the applications in both the abrasive and refractory 
industries. Indeed, the cost of artificial corundum in the final production cost of the 
end products was estimated to range in the abrasive industry from 5% to 25% and 
in the refractory industry from 8% to 40%. However, any potential effect of a duty 
would be minimised by the fact that all users provide themselves with artificial 
corundum from a large number of countries as well as from the Community 
industry. \ 
27 
Considering that users purchase artificial corundum from different sources and 
taking into account the level of consumption of Chinese artificial corundum in the 
Community in the investigation period, it was estimated that the average impact of 
an increase in the rate of duty on the costs of these industries' products would be 
for the abrasive industry 1.2% and for the refractory industry 3%. 
(70) Furthermore, there appear to be users for whose specific applications artificial 
corundum from China could not be used. These users reported that they were 
dependent on the Community industry supplies. 
(71) One manufacturer of abrasive products commented that the duty could result in an 
encouragement to the Chinese producers to no longer trade artificial corundum but 
manufacture and export finished products instead. However, no evidence was 
provided that this would be a probable consequence of maintaining the anti­
dumping duties and would in any event not be a sufficient reason in itself for not 
imposing duties. 
(72) It was also submitted that some users of artificial corundum were suffering from 
the adverse effects of competition both on the Community market and the third 
country markets from third country competitors which could purchase raw 
materials not subject to anti-dumping measures. Given the wide diversity of 
applications of the product concerned , the general nature of these allegations, 
which were not sustained by substantiated evidence, were too imprecise to show to 
what extent such negative effects would affect the users concerned. In any event, it 
is to be recalled that the investigation has proven that the existing anti-dumping 
duty has been absorbed by the Chinese exporters and that the measures in force 
.previous to ad valorem duties were not adhered to. As a consequence, any alleged 
decrease in fair competition cannot be attributed to the anti-dumping duties in 
force. That argument has therefore to be rejected. 
28 
(73) It was also claimed by two abrasive users of artificial corundum that anti-dumping 
duties on artificial corundum from China would lead to relocation of production 
and job losses. 
In the present case, one of the two companies which claimed that relocation could 
take place because of anti-dumping measures has already relocated part of its 
production to a third country, justifying this notably by the lower labour costs 
outside the Community ; the other user admitted that relocation was an alternative 
to high costs of production and expenses related to importation and was a common 
trend among its competitors, irrespective of anti-dumping measures. 
Given, in addition, that anti-dumping duties can hardly be blamed for being 
responsible for relocation decisions taken previously, since it was clearly 
established during the investigation that the anti-dumping duty has been absorbed 
completely by the Chinese exporters and has not had the expected effect on prices, 
this argument has to be rejected. 
(74) A shortage of supply of certain types of artificial corundum was also alleged by one 
user which had contacted one Community producer which could not at that time 
deliver all the requested quantities. Another user, on the contrary, wrote that no 
shortage of supply took place to his knowledge. No other user raised this argument, 
which has consequently to be rejected. 
(75) One user claimed that, in the context of trade globalisation, no anti-dumping duties 
should be imposed. 
29 
It is recalled that anti-dumping measures are imposed in order to maintain fair 
conditions of trade and competition in accordance with Community legislation 
adopted in conformity with the World Trade Organisation rules. Given that this is 
not contested by the user in question, the allegation was not considered to be valid. 
(76) It must also be noted that some users expressly indicated that anti-dumping 
measures would have a favourable effect on them since, quality and proximity 
being reported to be the decisive factors for the choice of the supplier of artificial 
corundum by certain types of user, the defence of the situation of the Commumty 
industry would provide such advantages in the future and therefore be in these 
users' interest. 
(77) Finally, it is considered that, although anti-dumping duties should allow the prices 
of the Community industry to increase, any increase would be limited by the high 
level of competition in the Community market and the number of alternative 
sources. Overall, the amended measures should therefore not result in any 
significant adverse effect on users. 
3. Conclusion on Community interest 
(78) In the light of the above, it is considered that there are no compelling reasons for 
not maintaining the measures in the present case. Furthermore, it should be noted 
that the Community industry has made considerable investments and that this 
restructuring has led to improved efficiency. It is therefore concluded that the 
Community interest calls for anti-dumping measures to be maintained in order to 
eliminate the injurious effects of dumped imports and that the measures should be 
amended in accordance with the present findings. 
30 
H. MEASURES 
(79) When calculating the adequate amount of duty, the Council has noted that the 
injury caused to the Community industry consists mainly of substantial financial 
losses due to depressed prices resulting from price undercutting. It is thus necessary 
that the measures taken allow the Community industry to improve its financial 
situation in the future. 
(80) In this respect, an injury elimination level has been calculated, based on the 
weighted average cost of production per product type of the Community producers 
plus a profit of 5% considered reasonable for this type of industry. This injury 
elimination level was then compared to the weighted average import prices on a 
CIF basis, duties paid, for the same product types as used for the undercutting 
calculations and adjusted to take account of import and processing costs incurred 
by the importers. 
Since the result of this comparison showed a higher injure level than the dumping 
margin established, the duty should be based on the dumping margin found i.e. 
88.7% in accordance with Article 7(2) of the Basic Regulation. 
(81) In order to ensure the effectiveness of the measures and minimise the risk that the 
duty be evaded by price manipulation, it is considered appropriate to express the 
duty as a fixed amount of ECU per tonne. 
The amount of the duty has been calculated on the basis of the dumping level 
mentioned above and amounts to 204 ECU per tonne. 
31 
HAS ADOPTED THIS REGULATION: 
Article 1 
Article 1 of Regulation (EEC) No 2552/93 shall be replaced by the following: 
'Article 1 
1. A definitive anti-dumping duty is hereby imposed on imports of artificial 
corundum, falling within CN codes 2818 10 10 and 2818 10 90 originating in the 
People's Republic of China. 
2. The rate of the duty applicable to the net free-at-Community-frontier price, 
before customs clearance, shall be 204 ECU per tonne. 
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, 
32 



ISSN 0254-1475 
COM(97) 468 final 
DOCUMENTS 
EN 02 05 08 11 
Catalogue number : CB-CO-97-482-EN-C 
ISBN 92-78-24963-7 
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