PROPOSAL FOR A COUNCIL REGULATION ( EEC ) IMPOSING A DEFINITIVE ANTI-DUMPING DUTY ON IMPORTS OF SILICON METAL ORIGINATING IN THE PEOPLE' S REPUBLIC OF CHINA
Date: 1990-06-28
Institutions: European Commission
Subjects: China, anti-dumping duty, dumping, import, semi-metal

COMMISSION  OF THE EUROPEAN  COMMUNITIES 

C0M(90) 300 final 

Brussels, 28 June 1990 

Proposal for a 

COUNCIL REGULATION (EEC) 

Imposing a definitive antidumping duty on  Imports of 

silicon metal originating  In the 

People's Republic of China 

(presented by the Commission) 

Proposal  for a 

COUNCIL  REGULATION  (EEC) 

imposing a definitive antidumping  duty on  imports of 

silicon metal  originating  in the 

PeopIe's Republie of ChIna 

The Council  of  the European Communities 

Having  regard  to tfee Treaty  establishing  the European  Economic  Community, 

Having  regard  to  Council  Regulation  (EEC)  No  2423/88  of  11  July  19881> 

on  protection  against  dumped  or  subsidized  imports  from  countries  not 

members  of  the  European  Economic  Community  and  in  particular  Art.12 

thereof, 

Having  regard  to  the  proposal  submitted  by  the  Commission  after 

consultation  within  the  Advisory  Committee  as  provided  for  under  the 

abovementloned  Regulation, 

WHEREAS 

A.  Provisional  Measures 

(1) The  Commission,  by  Regulation  (EEC)  No  720/902) 

imposed  a 

provisional  antidumping  duty  on  imports  into  the  Community  of 

silicon-metal  falling within  CN Code  2804 6900 and originating  in the 

People's Republic of China. 

1) O.J. N" L 209/88,  2.8.1988 

2) O.J. N-  L 80/90 Of  27.3.1990 

-  2 

B.  Subsequent  Procedure 

(2) Following  the  imposition  of  the  provisional  antidumping  duty,  the 

representatives of  the complainants  as well  as  representatives of  the 

British  and  German  user  industry  and  one  of  the  British  importers 

requested  and  were  granted  an  opportunity  to  be  heard  by  the 

Commission.  They  also  made  written  submissions  making  known  their 

views on  the provisional  findings. 

c.  Pump Ing 

(3) For  the  purpose  of  definitive  findings  normal  value  was  established 

on  the  basis  of  the  same  method  as  that  used  for  the  provisional 

determination  of  dumping.  This  method  has  been  criticized  by  one  of 

the  importers  as  not  being  justified,  given  the  fact  that  the 

production  conditions  in  the  Community  and  the  People's  Republic  of 

China  are  not  comparable.  However,  in  the  case  of  imports  from  non-

market  economy  countries,  Art.  2(5)  of  Regulation  (EEC)  N*  2423/88 

provides  that  normal  value  shall  be  based  in an  appropriate  and  not 

unreasonable  manner,  whenever  possible,  on  the  basis  of  prices  or 

costs  of  manufacturers  In  a  market  economy  third  country.  For  this 

purpose  the  Commission  contacted  producers  In  four  different 

countries, as described  In recital  10 of  Regulation  (EEC) 720/90. 

(4) The  Council  confirms  that  in  the  absence  of  satisfactory  cooperation 

from  these  companies,  there  is no other  possibility  but  to  establish 

normal  value  on  the  basis  of  the  price  payable  in  the  Community  for 

the  like product, duly  adjusted  to  include  a reasonable  profit  margin 

in  accordance  with  Article  2(5)(c)  of  Regulation  (EEC)  2423/88 

However  adjustments  have  been  made  when  comparing  normal  value  and 

export  price as set  out  under  recitals  5 and  6 be low. 

-  3 -

Export  Price 

(5) Since  the Comission  had  no other  findings  the export  prices  have  been 

definitively  established  in accordance  with  Art.7(7)(b) of  Regulation 

(EEC) No  2423/88 on  the  basis  of  the  information  available,  I.e.  the 

import  prices published  by  Eurostat. 

(6) The  Commission  found  that  this  information  was  very  similar  to  the 

information  supplied  by  the exporters which  had  given  partial  replies 

to the Commission's  questionnaire. 

(7) The  Council  confirms  the  Commission's  findings  and  conclusions  set 

out  in recitals  11 and  12 of Commission  Regulation  (EEC) No 720/90. 

E.  Comparison 

(8) One  of  the  importers  and  a  major  part  of  the  user  industry  alleged 

that  the  Commission,  in comparing  normal  value,  had  not  sufficiently 

taken  into  account  the  differences  affecting  the  comparability  of 

prices  and  In particular  differences  In  the  physical  characteristics 

of  the  products  and  in  the  costs  of  transport  from  China  to  the 

Commun i t y. 

(9) However,  the  Commission,  in  comparing  normal  value  with  export 

prices,  had  adjusted  the  export  price  by  the  costs  incurred  by  the 

importer  as  a  result  of  checks on  differences  in volume  and  quality. 

Allowance  was  also  made  for  differences  in  packaging  and  for  the 

transports  costs  from  China  to  the  the  Community  (recital  13  of 

Regulation  (EEC) 720/90); 

The Council  confirms  the Commission's  conclusions. 

F.  Dumping  margins 

- 4 -

(10) 

The  Commission  found  the  existence  of  dumping,  the  weighted 

average  dumping  margin  expressed  as a percentage  of  the  total  cif 

value  of  imports  of  the  product  concerned  for  the  Investigation 

period  being 38,73%. 

The  Council  confirms  the  findings  In  recital  16  of  Regulation 

(EEC) 720/90. 

G.  Inlurv 

(11) 

The  Commission  concluded,  in  its  provisional  findings,  that  the 

Community  producers  of  silicon  metal  had  suffered  material 

injury.  It  based  these  findings  principally  on  the  Chinese 

exporters'  rapid  increase  in the  voiume of  exports  and  In market 

share,  the price undercutting  practised  by  these exporters  in the 

Community  market  and  the  fact  that  the  Community  Industry,  by 

offering  silicon  metal  at  prices  competitive  with  the  dumped 

imports,  had  to  sell  their  material  at  prices  equal  to  or  below 

cost  of  production. 

(12) 

The  Community  producers  submitted  evidence  to  the  Commission 

showing  that,  since  the  beginning  of  1989,  the  export  prices  of 

the  Chinese  producers/exporters  had  further  decreased  by 

approximately  10%. However,  it  is considered  inappropriate  in the 

present  case,  in  conformity  with  standard  practice,  to  take 

account  of  facts  which  have  occurred  after  the  investigation 

period. 

- 5 -

(13) 

The  user  Industry  and  one  of  the  importers  maintained  that  the 

data  presented  in  Regulation  (EEC)  No  720/90  showed  only  the 

existence  of  a  normal,  competitive  situation  and  that  the 

negative  evolution  of  the Community  industry  was  simply  due  to a 

lack  of  cost  efficiency.  However,  these  allegations  were  not 

supported  by  any  evidence.  The  Council  confirms  the  findings  of 

the  Commission  as  set  out  in  recitals  18  to  27  of  Regulation 

(EEC) No 720/90. 

H.  Causation of injury 

(14) 

In  recitals  28  to  31  of  Regulation  (EEC)  No  720/90  the 

Commission  found  that  the growth  in  imports  from  China  coincided 

with  the  loss  of  market  share  by  the  Community  producers  and  a 

loss of  prof i tabiIi ty. 

(15) 

One  of  the  importers  challenged  the  causal  link  between  the 

imports  of  the  Chinese  material  and  the  injury  suffered  by  the 

Community  industry  by  alleging  that  cheap  imports  from  other 

third  countries  had  taken  place  during 

the  period  of 

invest igat ion. 

(16) 

This  argument  has  already  been  raised  during  the  preliminary 

investigation.  The  Commission  has  dealt  with  this  question  in 

recital  30 of  Regulation  (EEC) 720/90 and  stresses once more  that 

prices  for 

imports  from  other  non-member  countries  were 

remarkably  higher  than  the prices  for  the Chinese  material  during 

the period  of  investigation. 

(17) 

The Council  confirms  the Commission's  findings  and  conclusions  in 

recitals  28  to  31  of  Regulation  (EEC)  720/90  that  the  imports 

under  consideration  taken  in  isolation  have  caused  material 

injury. 

-  6 -

I .  Community  Interest 

(18) 

Part  of  the  user  industry  of  the  imported  product  claimed  that 

the  Commission  had  not  sufficiently  taken  Into  account  the 

interests  of  the  user  industry  to  have  the  possibility  of  buying 

low  priced  material  from  outside  the  EEC.  The  industry 

representatives  further  claimed,  that  where  a  definitive  duty 

would  be  imposed,  the  final  product  of  their  major  clients,  the 

automobile 

industry  would  experience  a  substantial 

price 

increase. 

(19) 

However  the  possible  impact  of  the  definitive  duty  on  the  costs 

of  the  finished  products,  In which  siliconmetal  is  included,  was 

acknowledged  by  the  user  industry  to be  below  1%.  The  Commission 

therefore  considers,  as  already  stated  in  recitals  33  and  34 of 

Regulation  (EEC) 720/90,  that  the  Community's  interest  that  fair 

competition  be  reestablished  on  the  Community  markt  and  the 

Community  producers'  interest  in  the  continuation  of  their  own 

production  and  in  fair  prices  outweighed  the  interests  of  the 

user  industry  to  take advantage  of  the unfair  practices. 

(20) 

in  addition  it  was  alleged  that,  after  the  imposition  of  a 

definitive  duty,  imports  from  other  third  countries  would  take 

over  the  market  share  of  the  Chinese  material  rather  than 

removing  the  injury  suffered  by  the Community  industry. 

(21) 

As  regards  the possible  replacement  of Chinese  imports  by  imports 

from  other  third  countries  the  Commission  considers  that  imports 

at  fair  prices  from  other  third  countries  are  not  against  the 

Interest  of  the  Community  and  therefore  cannot  be  an  argument 

against  measures  to be  taken against  imports of  dumped  products. 

(22) 

The Council  confirms  these conclusions 

-  7 -

J.  Puty 

(23) 

Provisional  measures  took  the  form  of  an  ad  valorem  antidumping 

duty,  the  amount  of  which  was  calculated  at  a  level  which  would 

increase  the  prices  of  the  Imported  product  to  a  theoretical 

selling  price  allowing  the Community  industry  to realise a profit 

margin  of  6,5%,  which  was  considered  to  be  a  minimum  profit 

margin  in  order  to  guaranty  a  producer  a  reasonable  return  on 

investment. 

(24) 

In order  to  remedy  the  continuous  price  decrease  of  the  Chinese 

Imports,  the Commission  considers  it more  appropriate  to  impose a 

definitive  antidumping  duty  in  the  form  of  a  specific  duty 

instead  of  an  ad  valorem  duty.  In  taking  account  of  the 

considerations  given  in  recitals  36  and  37  of  Regulation  (EEC) 

720/90  it  is  considered  that  the  amount  of  the  definitive  duty 

should  be  calculated  on  the  basis  of  the  provisional  duty  of 

18,7% on  the  weighted  average  CIF  price  of  the  Chinese  material 

during  the  investigation period  and  amounts  to  198 ECU per  tonne. 

The Council  confirms  this  conclusion. 

K.  Collection  of  provisional  duties 

(25) 

In view of  the dumping  margins  established  and  the  seriousness of 

the  injury  caused  to  the  Community  industry,  the  Council 

considers  it  necessary  that  amounts  collected  by  way  of 

provisional  antidumping  duties  should  be  definitively  collected 

to the extent  of  the amount  of  the duty  definitively  imposed. 

HAS ADOPTED  THIS REGULATION: 

-  8 -

Article 1 

1.  A definitive antidumping duty  is hereby  imposed on  imports of  silicon 

metal  falling  within  CN  Code  2804  6900  originating  in  the  People's 

Republic of  China. 

2.  The duty  shall  be  198 ECU/tonne of  the  Imported  product. 

3.  The provisions  in force concerning  customs duties shall  apply. 

Article  2 

The  amounts  collected  or  secured  by  way  of  provisional  antidumping  duty 

under  Regulation  (EEC) No 720/90 shall  be collected at  the  rates of  duty 

definitively  imposed  where  the definitive  rate of  duty  is  lower  than  the 

provisional  antidumping  duty  and  at  the  rates  of  provisional  duty  in all 

other  cases. Secured  amounts  which  are  not  covered  by  the  rates of  duty 

definitively  imposed  shall  be  released. 

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, 

For  the CounclI 

The  President 

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