COMMISSION REGULATION (EC) No 1878/95 of 28 July 1995 imposing a provisional anti-dumping duty on imports of refractory chamottes originating in the People' s Republic of China
Date: 1995-07-28
Institutions: European Commission
Subjects: China, anti-dumping duty, dumping, earths and stones, import, restriction on competition













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31995R1878

COMMISSION REGULATION (EC) No 1878/95 of 28 July 1995 imposing a provisional anti-dumping duty on imports of refractory chamottes originating in the People' s Republic of China  


Official Journal L 179 , 29/07/1995 P. 0056 - 0061 





COMMISSION REGULATION (EC) No 1878/95 of 28 July 1995 imposing a provisional anti-dumping duty on  imports of refractory chamottes originating in the People's Republic of ChinaTHE  COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EC) No 3283/94 of 22 December 1994 on protection against  dumped imports from countries not members of the European Community  (1), as last amended by  Regulation (EC) No 1251/95  (2), and in particular Article 23 thereof, Having regard to Council Regulation (EEC) No 2423/88 of 11 July 1988 on protection against dumped  or subsidized imports from countries not members of the European Economic Community  (3), as last  amended by Regulation (EC) No 522/94  (4), and in particular Article 11 thereof, After consultation with the Advisory Committee, Whereas: A. PROCEDURE (1)  In April 1993 the Commission announced by a notice in the Official Journal of  the European Communities (5) the initiation of an anti-dumping proceeding concerning imports into  the Community of certain types of refractory chamottes originating in the People's Republic of  China falling within CN codes ex 2507 and 2508. (2)  This notice followed the receipt of a written complaint lodged by Société Argiles et Minéraux  AGS ('AGS`), Clérac, F-17270 Montguyon allegedly representing a major proportion of the total  Community production of refractory chamottes. The complaint contained evidence of dumping of the  said product and of material injury resulting therefrom. This evidence was considered sufficient to  justify the initiation of a proceeding. (3)  The Commission officially advised the producers and exporters in the exporting country and  importers known to be concerned, the representatives of the exporting country and the complainant.  Parties directly concerned were given the opportunity to make their views known in writing and to  request a hearing. (4)  Two associations and two companies of the user industry made their views known in writing. (5)  No producer or exporter nor any other intersted party from the People's Republic of China made  their views known during the investigation or replied to the questionnaires sent to them by the  Commission. (6)  The Commission sought and verified all information it deemed necessary for the purposes of a  preliminary determination and carried out investigations at the premises of the following: (a)  Community producers: Société Argiles et Minéraux AGS Clérac F-17270 Montguyon Arcichamotas (Arcillas y Chamotas Asturianas, SL) C/Uria, No 76, 3° D E-Oviedo; (b)  Unrelated importers: Frank & Schulte GmbH Alfredstr. 154 D-45131 Essen Possehl Erzkontor GmbH Beckergrube 38-52 D-23552 Luebeck. (7)  The investigation of dumping covered the period 1 April 1992 to 31 March 1993. B. PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT Description of the product (8)  The product  concerned is unprocessed, also called 'kiln-run`, refractory chamottes (sometimes called 'calcined  fireclay` or 'calcined fintclay` or 'calcined clay` or 'calcined kaolin`) with an alumina content  of at least 40  % but not exceeding 55  %. These chamottes are produced from clays or ores mainly  based on kaolinite, i.e. hydro alumina silicates, calcined at high temperatures. The calcination  process is mainly carried out in rotary kilns. They are used in the manufacture of shaped or  unshaped silico-alumina products. The complaint and the notice of initiation covered both processed and unprocessed refractory  chamottes. However, the investigation showed that a distinction has to be made between processed  and non-processed refractory chamottes. This distinction is founded primarily on the differences in  physical characteristics which are the result of the processing and which determine the different  end-uses of the products, such as the resistance to sudden temperature variations. The processing  sometimes also leads to changes in the chemical composition, for instance a change in the alumina  content. These differences between processed and non-processed refractory chamottes are reflected  in significant differences in production costs and sales prices. For these reasons non-processed  and processed refractory chamotts should not be considered one product for the purpose of this  proceeding. Eurostat statistics on the imports under CN codes ex 2507 and ex 2508 do not distinguish between  processed and unprocessed chamottes. They also include non-calcined clays. In order to eliminate  those clays and processd chamottes from the overall figures, the Commission, on the basis of the  evidence supplied by the Community industry and the cooperating importers, has taken into  consideration only those imports for which the average price during 1989 and the end of the  investigation period was between ECU 50 and 85 per tonne. Imports for which the average price per  tonne was less than ECU 50 are presumed to have been non-calcined clays, while those above ECU 85  per tonne are presumed to have been processed chamottes. The information obtained from the cooperating importers showed that they imported only unprocessed  chamottes. Furthermore, no claims were made that imports from the People's Republic of China under  CN code ex 2507 or ex 2508 were non-calcined clays or processed chamottes. The complainant agreed to limit the proceeding to unprocessed chamottes. Consequently, the Commission has decided to limit the proceeding, as far as the product is  concerned, to unprocessd refractory chamottes. Like product (9)  One user company argued that the product concerned originating in the People's  Republic of China, though comparable with the product concerned of the main Community producer in  terms of its chemical characteristics, could not be compared as to the end-use because of the  inferior calcination of Chinese chamottes. Two unrelated importers which cooperated in this  proceeding also argued that the range of use of Chinese chamottes would be limited due to inferior  calcination. A further company of the user industry argued that Chinese chamottes would, with regard to chemical  characteristics, be of superior quality to chamottes of the main Community producer and that  Chinese chamottes would not be interchangeable with chamottes of the main Community producer for  the production of fire-resistant bricks to be used in the steel industry. One national association argued that Chinese chamottes are superior to those of the Community  industry and that the refractory industry of Member State concerned is dependent for supply on the  People's Republic of China. (10)  The abovementioned allegations were partly contradictory and not supported by evidence.  Furthermore, the investigation showed that no significant differences existed between the chemical  and physical specifications of the unprocessed chamottes produced by the Community producers, the  producers in the analogue country (see below), or the Chinese producers or exporters. Consequently,  the products imported from the People's Republic of China, those produced in the analogue country  and those produced by the Community industry are considered to be like products. C. DUMPING Normal value (11)  The People's Republic of China being a non-market economy, the  normal value for the like product originating in that country had to be determined in accordance  with Article 2 (5) (b) of Regulation (EEC) No 2423/88 (hereinafter referred to as 'the basic  Regulation`) on the basis of sales prices or cost of production of the like product in a market  economy third country, a so-called analogue country. (12)  No suggestions as to the choice of analogue country were received from the People's Republic  of China, while the complainant proposed the United States of America. On this issue, the Commission confirmed that the United States of America has an open market for  the product concerned with a significant number of competing suppliers which use the lower-cost  open-cast mining for obtaining the necessary raw materials, which have easy access to several  energy sources and to an efficient transport network and which sell substantial amounts on their  domestic market at profitable prices. In the absence of information of other better qualified  market economies, the Commission accordingly decided that it was appropriate and not unreasonable  to use the United States of America for the determination of the normal value. (13)  To this end the Commission obtained the cooperation of two producers in the United States of  America. Both companies fulfilled the abovementionend criteria and completed the questionnaires  sent to them; their data was confirmed during an on-spot verification. (14)  Consequently, the normal value for the refractory chamottes originating in China was based on  the weighted average sales prices ex-factory, paid or payable in the ordinary course of trade, of  the like product of the cooperating American companies sold for consumption on the USA market. Export price (15)  No cooperation was obtained from any Chinese exporter or related importer.  Both unrelated importers which cooperated accounted, together, for almost 25  % of the import  volume found on the basis of the Eurostat statistics, and their average import price per tonne was  slightly below the average price based on the same statistics. (16)  In view of the relatively low percentage of imports covered by the unrelated importers and  the lack of cooperation of the Chinese exporters, the Commission used the facts available to  establish export prices in accordance with Article 7 (7) (b) of the basic Regulation and considered  the most reasonable facts to be the prices contained in Eurostat. Comparison (17)  The normal value was compared with the fob export price at the same level of  trade, i.e. wholesale level, after an adjustment had been made on the basis of differences in  physical characteristics, in particular the alumina content. In order to arrive at the fob export  price the Commission reduced the export price found on the basis of the Eurostat data with the  costs of sea-transport and insurance found at the unrelated importers. Dumping margin (18)  The comparison showed the existence of dumping. The difference between the  normal value and the export price amounts to ECU 19,34 per metric tonne, representing 28,44  % of  the cif Community frontier value. D. COMMUNITY INDUSTRY (19)  With regard to the Community industry it was found that one Community  producer imported the product from the People's Republic of China. Although invited by the  Commission to cooperate in the present proceeding, the company refused to do so. The Commission  therefore was not in a position to establish whether this Community producer imported the product  concerned only for defensive reasons. Under these circumstances, the Commission, for the purpose of  the provisional findings, did not regard this producer as part of the Community industry, in  accordance with the first indent of Article 4 (5) of the basic Regulation. The remaining producers  represented 100  % of the Community industry. E. INJURY Community consumption (20)  Community consumption has been calculated by adding the  sales by the Community industry and the imports of the product concerned under CN codes ex 2507 and  ex 2508 calculated in accordance with the method explained in recital 9. According to this  calculation, consumption in the Community of the product concerned decreased from 131  000 tonnes  in 1989 to 127  500 tonnes in 1991 and to 107  000 tonnes during the investigation period, a  decrease of 17,7  % over the whole period. Volume, market share and prices of the dumped imports (21)  The volume of imports from the  People's Republic of China increased from 41  118 tonnes in 1989 to 50  635 tonnes in 1991 and  reached a level of 50  142 tonnes during the investigation period, an increae of 21,9  %. (22)  Market share of the imports from the People's Republic of China rose from 31,4  % in 1989 to  39,7  % in 1991 and reached a level of 46,5  % during the investigation period. (23)  Weighted aversage sales prices per tonne of the imports from the People's Republic of China  at the cif level dropped from ECU 75,6 in 1989 to ECU 67,5 in 1991 and ECU 68 during the  investigation period, a decrease of 10,1  %. (24)  A comparison of this weighted average sales price at the ex-warehouse importer level (which  reflects the costs of the importer and a profit margin of 3  %, estimated to be reasonable) with  the weighted average sales price of the Community industry at the same level of trade, demonstrates  a continued undercutting by 4  % of the latter prices. This undercutting was systematic, in the  sense that, when the Community industry tried to maintain market share by aligning its prices with  those of the imports from the People's Republic of China, these latter prices were adjusted  downwards in order to maintain the undercutting margin. Situation of the Community industry (25)  Sales by the Commission industry on the Community  market dropped from 74  757 tonnes in 1989 to 57  603 tonnes in 1991 and to 43  371 tonnes during  the investigation period, a decrease of 42  %. (26)  Market share of the Community industry fell from 57,1  % in 1989 to 45,2  % in 1991 and to  40,2  % during the investigation period. (27)  Production of the product concerned by the Community industry dropped correspondingly. As a  result capacity utilization fell from 55,9  % in 1989 to 45,7  % in 1991 and to 38,3  % during the  investigation period, even after the Community industry had already reduced its overall capacity. (28)  The work force involved in the production of the like product decreased from 165 in 1989 to  151 in 1991 and to 100 during the investigation period, i.e. by 39  %. (29)  Net profitability of the Community industry deteriorated significantly from 6,8  % in 1989 to  2  % in 1991 and to minus 0,5  % of turnover during the investigation period. Conclusion (30)  In the light of the circumstances described above, it is concluded that the  Community industry suffered material injury within the meaning of Article 4 (1) of the basic  Regulation. F.  CAUSATION OF INJURY Dumped imports (31)  Dumped refractory chamottes from the People's  Republic of China managed to gain a significant market share to the detriment of the Community  industry by systematically undercutting the prices of the like product of the Community industry  and by being offered on the Community market in substantial quantities. Intermediate and end-users of refractory chamottes were, during the investigation period, more  price-conscious because they themselves were confronted with a severe reduction in demand from  their own products and therefore needed to reduce their production costs. Consequently they shifted  their purchases of refractory chamottes to those of the lower priced imports from the People's  Republic of China. By forcing the Community industry to adjust its prices downwards in order not to lose further  market share, the imports of refractory chamottes from the People's Republic of China depressed  still further the profitability of the Community industry, which already was negatively affected by  the loss of sales volume and the resulting increase in unit costs. Other factors (32)  Overall demand for chamottes decreased between 1989 and the end of the  investigation period, primarily due to the cyclical downturn in the Community steel industry, the  most important end-user of the product concerned. The decrease in demand caused a decline in the  sales volume of the Community industry and thereby also affected negatively its profitability.  However, the decline in overall demand could not have caused the loss of market share. Furthermore,  the decline in overall demand was not exceptional. Comparable cyclical downturns in overall demand  had never before led to the loss of profitability and employment as was experienced by the  Community industry during the investigation period. (33)  The investigation showed furthermore that imports from the former Republic of Czechoslovakia  decreased from 15  144 tonnes in 1989 to 14  284 tonnes during the investigation period. The market  share of these imports increased nevertheless from 11,6  % to 13,3  % as a result of falling  consumption. Evidence supplied by the complainant showed slight undercutting by these imports of  the prices of the Community industry, but no conclusive evidence on dumping was provided nor found  during the investigation. Eurostat data showed an increase in price per tonne of these imports but  according to the data provided by the complainant this increase is attributable to the change,  during the period covered, in the level of trade at which these imports were sold, i.e. more direct  sales to end-users and fewer sales to wholesalers or through intermediaries. Conclusion (34)  Other factors have contributed to the injury suffered by the Community industry,  but they do not detract from the fact that the imports of refractory chamottes originating in the  People's Republic of China, by reason of their lower prices and significant volume, taken in  isolation, have caused material injury to the Community industry. G.  COMMUNITY INTEREST (35)  Refractory chamottes from the basic material for the producers of  refractory products, which play, inter alia, an essential role in the process of steel making. The  proven reserves of the necessary clays and minerals will enable the Community industry to supply  the Community intermediate and end users in the long run, and, because of its distance to these  users, in an economical way. Its maintenance is therefore in the interest of these users. However,  the viability of the Community industry is threatened by the unfair trading of the imports from the  People's Republic of China. Consequently, measures against this unfair trading are in the interests  of the user industry as well as of the Community producers of refractory chamottes. Such measures will undoubtedly have a slight effect on the general price level of refractory  chamottes and consequently on the costs of the end-users of refractory products, in particular the  steel industry, and should therefore be limited to a level which is strictly necessary to remove  the injury to the Community industry. They should, furthermore, not result in a withdrawal from the  Community market by the Chinese exporters, because such a withdrawal could lead to an undesirable  diminution of fair competition on this market. In such circumstances, and in view of design of the measures (see below), taking adequate measures  against the unfair trading of imports from the People's Republic of China of unprocessed refractory  chamottes is in the interests of the Community. H.  DUTY (36)  For the purpose of establishing the level and type of measures to be taken,  account was taken of the need for the Community industry to restore and maintain its viability and  of the need for the intermediate and end users of refractory chamottes to have access to a variety  of sources of supply. (37)  Consequently, the measures should take the form of a variable duty based on a minimum price  set at the cif Community frontier level, which would enable the Community industry to cover its  cost of production (including sales, general and administrative costs) and a profit of 5  %, a  margin considered appropriate for the refractory chamottes industry in the absence of the effect of  dumped imports. (38)  Accordingly, and taking into account importers' costs and profit as explained in recital 24,  the minimum import price should be set at a level of ECU 75 cif Community frontier, duty unpaid,  per tonne, being equivalent to an increase of 10  % of the average import price found during the  investigation period. I.  FINAL PROVISIONS (39)  In the interest of sound administration, a period should be fixed  within which the parties concerned may make their views known and request a hearing. Furthermore,  it should be stated that all findings for the purpose of this Regulation are provisional and may  have to be reconsidered for the purpose of any definitive duty which the Commission may propose. HAS ADOPTED THIS REGULATION: Article 1 1.  A provisional antid-dumping duty is hereby imposed on imports of  unprocessed (not ground or in power form) calcined refractory products falling within CN codes ex  2507 and ex 2508 (Taric codes: 2507  00  20*10, 2507  00  80*10, 2508  10  00*10, 2508  20  00*10,  2508  30  00*10, 2508  40  00*10, 2508  50  00*10, 2508  60  00*10, 2508  70  10*10 and 2508  70   90*10) and originating in the People's Republic of China. 2.  The amount of duty shall be the difference between ECU 75 and the net free-at-Community  frontier price, per tonne, if the latter price is lower 3.  Unless otherwise specified, the provisions in force concerning customs duties shall apply. 4.  The release for free circulation in the Community of the products referred to in paragraph 1  shall be subject to the provision of a security, equivalent to the amount of the provisional duty. Article 2 Without prejudice to Article 7 (4) of Regulation (EEC) No 2423/88, the parties  concerned may make known their views in writing and apply to be heard orally by the Commission  within one month of the date of entry into force of this Regulation. Article 3 This Regulation shall enter into force on the day following its publication in the  Official Journal of the European Communities. Subject to Articles 11, 12 and 13 of Regulation (EEC) No 2423/88, Article 1 of this Regulation  shall apply for a period of four months, unless the Council adopts definitive measures before the  expiry of that period. This Regulation shall be binding in its entirety and directly applicable in all  Member States. Done at Brussels, 28 July 1995. For the Commission Leon BRITTAN Vice-President (1)  OJ No L 349, 31. 12. 1994, p. 1.  (2)  OJ No L 122, 2. 6. 1995, p. 1.  (3)  OJ No L 209, 2. 8. 1988, p. 1.  (4)  OJ No L 66, 10. 3. 1994, p. 10.  (5)  OJ No C 104, 15. 4. 1993, p. 8.