Proposal for a COUNCIL REGULATION (EC) imposing a definitive anti-dumping duty on imports of refractory chamottes originating in the People' s Republic of China
Date: 1995-12-19
Institutions: European Commission
Subjects: China, anti-dumping duty, dumping, heat-resisting materials, import, restriction on competition

COMMISSION  OF THE EUROPEAN  COMMUNITIES 

Brussels,  19 12.1995 
COM<95) 738  final 

Proposal  for  a 

COUNCIL  REGULATION  (EC) 

imposing a definitive anti-dumping duty on imports of refractory chamottes 
originating in the People's Republic of China 

(presented  by  the Commission) 

EXPLANATORY MEMORANDUM 

1. 

By Regulation  (EC) No  1878/95 of 28 July  1995», the Commission  imposed a 
•  provisional  anti-dumping  duty  on  imports  into  the  Community  of  refractory 
chamottes originating in the People's Republic of China, falling within CN codes 
ex 2507 and 2508. 

2. 

3. 

4. ' 

By Council Regulation (EC) No 2735Z952 , the Council extended the validity of 
this duty for a period of two months. 

Upon disclosure of the Commission's provisional findings the complainant and 
two  companies  of  the  Community  user  industry  made  their  views  known  in 
writing. A company of the user industry requested and was granted a hearing by 
the  Commission.  The  Commission  continued  to  seek  and  verify  all  the 
information it deemed necessary for its definitive  findings. 

The parties were informed of the essential facts and considerations on the basis of 
which it was intended to recommend the imposition of a definitive anti-dumping 
duty and the collection of amounts secured by way of the provisional duty. The 
parties  were  also  granted  a  reasonable  period  within  which  to  make 
representations subsequent to the disclosures. 

5. 

The  parties'  comments  were  considered  and,  where  appropriate,  taken  into 
account. 

1 OJ. No L 179,-29.7.1995, p. 56 
2 OJ. No L 285,29.11.1995, p. 1 

A 

6. 

It is considered that definitive  anti-dumping measures should be imposed against 
the imports into the Community of Chinese refractory chamottes, in the form of a 
variable  anti-dumping  duty,  based  on  a  minimum  price  of  ECU  75,  OF 
Community  frontier,  duty  unpaid,  per  tonne.  In  view  of  the  dumping  margin 
established  and the  injury  caused  to  the  Community  industry,  it  is  considered 
necessary that the amounts secured by way of the provisional anti-dumping duty, 
should be definitively collected. 

7. 

It  is  therefore  proposed  that  the  Council  adopts  the  draft  Regulation  annexed 
imposing  a  definitive  anti-dumping  duty  on  imports  of  refractory  chamottes 
originating in the People's Republic of China. 

Jb> 

COUNCIL REGULATION (EC) No... 

imposing a definitive anti-dumping duty on imports of refractory chamottes 
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)  No  3283/94  of  22  December  19941  on 

protection 
against dumped imports from countries not members of the European Community, as last 
amended by Council Regulation (EC) No 1251/952, and in particular Article 23 thereof, 

Having regard to Council Regulation  (EC) No 2423/88 of  11 July  1988 on protection 
against  dumped  or  subsidised  imports from countries  not  members  of  the  European 
Economic Community3, as last amended by Council Regulation (EC) No 522Z944, and in 
particular Article 12 thereof, 

Having  regard  to  the  proposal  submitted  by  the  Commission  after  consultating  the 
Advisory Committee, 

Whereas: 

1 OJ No L 349,31.12.1994, p.  1 
2 OJ No L 122,2.6.1995, p.l 
3 OJ No L 209,2.8.1988, p. 1 
4OJNoL66,10.3.1994, p. 10 

w 
AL 

PROVISIONAL MEASURES 

(1) By Regulation  (EC) No  1878/95 (hereafter  "the provisional duty Regulation")*, the 
Commission  imposed  a  provisional  anti-dumping  duty  on  imports  into  the 
Community of refractory  chamottes (hereafter  "chamottes" or "product concerned") 
originating in the People's Republic of China, falling within CN codes ex 2507 and 
2508. 

(2) By Regulation (EC) No 2735/956, the Council extended the validity of these duties 

for a period of two months. 

SUBSEQUENT PROCEDURE 

(3) Following the imposition of the provisional anti-dumping duty, Argiles & Minéraux 
A.G.S., the complainant Community producer, and two companies of the Community 
user industry  made their views known in writing. A company of  the user industry 
requested and was granted a hearing by me Commission. 

(4) The Commission continued to seek and verify all information it deemed necessary for 
its  definitive  findings.  The  parties  were  informed  of  the  essential  facts  and 
considerations on the basis of which it was intended to recommend the imposition of 
a definitive  anti-dumping duty and the collection of amounts secured by way of the 
provisional duty. The parties were also granted a reasonable period within which to 
make representations subsequent to the disclosures. 

(5) The parties' comments were considered and, where appropriate, taken into account 

5 OJ No L 179,29.7.95, p. 56 
6 OJ No L 285,29.11.1995, p. 1 

PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT 

(6) After publication of  the provisional  duty Regulation, a company of  the Community 
refractory industry (user industry) raised the argument that Chinese chamottes, though 
comparable with the product concerned produced by the main Community producer 
or a large producer in the United States (which was chosen as the "analogue country" 
for  the determination  of  normal  value,  see  recitals  11 -  14 of  the  provisional  duty 
Regulation) in terms of its chemical characteristics, could not be compared with these 
products as to the end-use because of the inferior calcination of Chinese chamottes. 
The company has supported its argument by pointing to the allegedly inferior quality 
of  refractory  products  made  from  Chinese  chamottes  when  burned  at  high 
temperatures, i.e. at temperatures of  1450 °C and above. In order to substantiate this 
allegation, the company submitted two studies it had carried out in order to examine 
the  usage  at high temperatures  of  the  product concemed  of  different  origins.  As  a 
result, both studies concluded that Chinese chamottes could, like the other chamottes 
being subject to the test, be used at temperatures of up to  1400 °C. However, for use 
at temperatures of  1450 °C and above, only chamottes of Israelian origin or chamottes 
produced by one U.S. company or produced by the complainant could be used, as the 
study  stated,  without  considerable  disadvantages.  One  of  the  studies  furthermore 
recommended that, for a particular kind of use within high temperature application, 
the use of chamottes produced by one U.S. producer should be preferred from all the 
others subject to the test. 

(7) These arguments which had already been raised prior to the provisional determination 
(see recitals 9 and  10 of the provisional duty Regulation), have now been supported 
by  evidence.  It  remains  however,  as  the  Commission  has  established  during  its 
investigation, that chamottes of different origins and from different producers cannot, 
from  a technical  point of view, be absolutely identical to each other, with regard to 
their chemical and physical specifications, due to natural chemical differences  in. the 
raw material and different burning techniques. This entails that chamottes of certain 
origin or produced by certain manufacturers may show advantages or disadvantages 
when  used  for  particular  applications.  It  should  also  be  noted  that  contradictory 
opinions exist with regard to the quality of the Chinese chamottes (see recitals 9 and 
10 of the provisional duty Regulation). Despite such differences in quality, however, 
there is only one market on which these products compete and, as the Commission 
has established, the product concerned of Chinese origin is, in general, used in the 
same applications  as chamottes of  other origins and has, overall, the chemical  and 
physical characteristics defined for the product under consideration. 

(8) Therefore, the findings set out in recital  10 of the provisional duty Regulation, that 
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, are hereby confirmed. 

DUMPING 

Normal value 

(9) A  company  of  the  Community  user  industry  argued  that  the  information  obtained 
from one company in the analogue country  appeared  not to be credible because  the 
U.S. producer concerned was related to the complainant. The company did not further 
•  substantiate  its  allegation,  in  particular  it  did  not  point  out  in  which  respect  it 

presumed the information  in question to be unreliable. 

(10) 

It was established  during  the  investigation  that  one of  the  two  producers  in  the 
analogue country which cooperated in this proceeding, and on whose information  the 
determination  of  normal  value  was  based,  belongs  to  the  same  group  as  the 
complainant.  The  Commission  services  obtained  from  this, producer,  inter  alia, 
specific  information  on  sales  prices  of  the  product  concerned  charged  to unrelated 
customers  in  the  United  States. This  information  was  used  for  determining  normal 
value  together  with  the  information  received  from  another  producer  in  thé  United 
States which cooperated  in this proceeding and which was found  not to be related to 
the complainant. The sales data submitted by the company in question was verified by 
the  Commission.  It  was  found  that  this  company  sold  substantial  quantities  of  the 
product  concerned  on  the  domestic  market  and  that  the  sales  were  made  in  the 
ordinary course of trade. It was carefully  checked whether the relationship in question 
had any bearing on costs of production and, consequently, on profitability  of the U.S. 
producer concerned. No indication was found that costs of production, profitability  or 
sales  to  unrelated  customers  were  influenced  by  the  relationship  between  this 
company and the complainant. 

(11) 

In the light of the foregoing, it is considered that the information in question can 
be used for determining normal value, an approach confirmed by the judgement of the 
Court of First Instance in case T-164/94, Ferchimex S.A. v. Council7. 

(12)  Therefore,  and in  the  absence  of  any  further  new  arguments  regarding  normal 
value, the findings laid down in recitals  11 to 14 of the provisional duty Regulation 
are hereby confirmed. 

Export price 

(13) 

In the absence of any new arguments, the findings laid down in recitals 15 and 16 
of the provisional  duty Regulation concerning the determination of the export price 
are hereby confirmed. 

Comparison 

(14)  As already pointed out in recital 3 above, one company of the Community user 
industry  argued that the product concerned  of  Chinese  origin was inferior  to, inter 
alia, that of a producer in the analogue country which cooperated in this proceeding. 
The user company did not further substantiate to what extent this alleged inferiority of 
Chinese chamottes had an impact on the import prices. 

7 Judgement of 28th September 1995. Not yet reported. 

(15)  The Commission had established in its provisional findings (see recital  17 of the 
provisional duty Regulation) that, for comparison purposes, an adjustment had to be 
made in order to take account of certain inferior physical characteristics of Chinese 
chamottes.  The  Commission  found  that  the  adjustment  could  be  quantified,  in 
absence of any other available information, by the level of the price difference  found 
between chamottes of different  alumina contents sold on the market of the analogue 
country in the investigation period. Since the argument raised by the user company 
did  not  give  any  indication  that  an  adjustment  different  from  that  made  for  the 
purpose of the provisional findings should be applied, and in the absence of any other 
new argument, this finding is hereby confirmed. 

(16) 

In the light of the foregoing, and in the absence of any further new arguments, the 
findings  set  out  in  recital  17  of  the  provisional  duty  Regulation  concerning 
comparison are hereby confirmed. 

Dumping margin 

, 

(17)  Since, finally, the determination of the dumping margin remains unchanged, the 
findings  set out in recital  18 of the provisional duty Regulation are hereby confirmed. 
The  dumping  margin  is  thus  definitively  determined  at  28.4  % of  the free-at-
Community-frontier price, before duty. 

COMMUNITY INDUSTRY 

(18) 

In the  absence  of  any  new  arguments, the  findings  set  out  in  recital  19 of  the 
provisional duty Regulation concerning the definition  of the Community industry are 
hereby confirmed. 

INJURY 

(19)  No new arguments were made with regard to the injury findings set out in recital 

30 of the provisional duty Regulation. They are, therefore, hereby confirmed. 

CAUSATION OF INJURY 

(20) 

In the absence of any new arguments, the findings with regard to the causal link 
between dumped imports and the material injury suffered by the Community industry, 
set out in recital 34 of the provisional duty Regulation, are hereby confirmed. 

COMMUNITY INTEREST 

(21)  Two companies  of  the  Community  user industry  argued that  the  imposition  of 
anti-dumping measures against imports of Chinese chamottes, which would lead to a 
price increase of this basic material, would subsequently result in a price increase for 
refractory  products  and  thus  to  a  deterioration  of  the  industry's  sales  on  the 
Community  market,  where  it  competes  with  suppliers  from  non-Community 
countries, and on export markets. Such decrease of sales revenue, and consequently of 
profit,  would  have  to be  compensated  by  a decrease  in  the  workforce  of  the  user 
industry  which  would  be  more  significant  than  the  number  of  employees  still 
maintained  in  the  chamottes  industry.  It was  further argued  that the  imposition  of 
measures  would  lead  to  a  deterioration  of  the  trade  relationship  between  the 
Community industry and the People's Republic of China in general, and the potential 
damage for the Community economy as a whole would be more significant  than the 
remedial effect  for the chamottes industry. One company claimed also that the price 
increase  for  Chinese  chamottes,  due  to  anti-dumping  measures,  would  result  in  a 
monopolistic position of the Community producers. 

The arguments concerning the effect of anti-dumping measures on sales were further 
substantiated by one user company  which pointed out that the direct impact of  the 
potential price increase for Chinese chamottes, as a result of the imposition of an anti 
dumping  duty  based  on  a  minimum-price  of  75  ECU/tonne  (OF  Community 
frontier),  on its sales prices would be an increase of around 1.4 %. This user company 
stated  that a variable  duty  based  on  a minimum-price  of  75  ECU  would  lead  to a 
relatively  modest  price  increase  for  Chinese  chamottes  which,  though  disturbing, 
would  not  have  a  seriously  damaging  effect  on  its  business.  The  company  thus 
confirmed,  in effect,  the provisional  findings  set out in recital  38  of  the provisonal 
duty Regulation. 

In view of the foregoing, the Commission considered the following: 

(22)  The  purpose  of  anti-dumping  measures  is  to jremedy  unfair  trading  practices 
which have an injurious effect on a Community industry. Such a remedy should result 
in the re-establishment of a fair competitive situation which, as such, is in the interest 
of  the  Community.  In  this  proceeding,  the  investigation  has  shown  that  the 
Community industry was suffering  material injury which, without  a remedy, would 
threaten  its  viability.  On the  other hand, the imposition  of  anti-dumping measures 
would  probably result in  a price  increase which would affect  the user industry  for 
which chamottes are a basic material. On balance, in view of the extent to which the 
Community industry was injured, and taking account of the very modest impact of a 
variable duty, based on a minimum-price of 75 ECU/tonne (CIF Community  frontier), 
on the prices for Chinese chamottes, and with regard to the very limited effect of the 
measure on the sales prices of the user industry, the Commission considers that the 
disadvantage  to  the user industry  is  not sufficient  to deny the Community industry 
protection against dumped imports of Chinese chamottes. 

(23)  The  Community  pursues  a policy  which  aims  at increasing  its  economic  links 
with the People's Republic of China. However, it expects the Chinese producers and 
exporters to operate on the Community market in accordance with .the principles of 
fair trade. Therefore, there is no contradiction beween this policy and the defence of 
the Community industry against unfair trade practices. Moreover, it should be noted 
that the exports of chamottes to the Community represent only a very small  fraction 
of the total Chinese exports to the Community  and the fact that neither the Chinese 
producers  and exporters nor the authorities of  the People's  Republic  of  China have 
cooperated in this proceeding  can  also be seen  as an indication  that the chamottes 
exports  to  the  Community  is  not  a priority  issue  for  these  parties.  It  is  therefore 
considered to be unrealistic to assume that anti-dumping measures imposed to restore 
fair trade in this market sector will have a significant impact on the trade relationship 
between the Community industry and the People's Republic of China. 

10 

(24)  Lastly, the argument that the imposition of anti-dumping measures might lead to a 
monopolistic position of the Community industry is considered to be unfounded. The 
measures will  have the effect  of  maintaining  the number of competing  suppliers of 
chamottes on the Community market because they will ensure the continued presence 
of  the  Community  producers  together with exporters from other countries,  e.g.  the 
United States and the Czech Republic, and the modest increase in import prices for 
Chinese  chamottes  resulting from the  imposition  of  measures  will  also  permit the 
continued presence of the Chinese exporters. 

(25)  Therefore, in the Ught of the above and in absence of any other new arguments, it 
is confirmed that the imposition of measures against imports of Chinese chamottes is 
in the Community interest 

DUTY 

(26) 

In the absence of any new arguments, the findings set out in recital 36 to 38 of the 
provisional  duty Regulation, with regard to the level  and type of thé measures, are 
hereby  confirmed.  Therefore,  definitive  anti-dumping measures  should  be  imposed 
against  the  imports  into  the  Community  of  Chinese  chamottes,  in  the  form  of  a 
variable anti-dumping duty, based on a minimum price of ECU 75 CIF Community 
frontier,  duty unpaid, per tonne. 

COLLECTION OF THE PROVISIONAL DUTIES 

(27) 

In  view  of  the  dumping  margins  estabUshed  and  the  injury  caused  to  the 
Community  industry, it is considered necessary that the amounts secured by way of 
the provisional anti-dumping duty, should be definitively collected. 

11 

HAS ADOPTED THIS REGULATION: 

Article 1 

(1) A  definitive  anti-dumping  duty  is  hereby imposed  on  imports  of  unprocessed  (not 

ground or in powder form) refractory chamottes falling within CN code 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 RepubUc of China. 

(2) The amount of duty shaU be the difference between the price of ECU 75, per tonne, 

and the net free-at-Community frontier price, per tonne, if the latter price is lower. 

(3) For  the  purpose  of  calculating  the  duty  payable,  the  minimum-price  shall  be 

converted into the relevant national currency at the exchange rate estabUshed in the 

same way as that used for a calculation of customs value. 

(4) Unless  otherwise  specified,  the  provisions  in  force  concemig  customs  duties  shall 

apply. 

12 

Article 2 

(1) The  amounts  secured  by  way  of  the  provisional  anti-dumping  duty  on  imports  of 

unprocessed  refractory  chamottes  originating  in  the  People's  RepubUc  of  China 

pursuant to Commission Regulation (EC) No 1878/95 shall be definitively collected. 

(2) The provisions  of  Article  1 (4)  shaU  also  apply  to the  definitive  coUection  of  the 

amounts secured by way of the provisional anti-dumping duty. 

Article 3 

This Regulation shaU enter into force on the day foUowing its publication in the 

Official Journal of the European Communities. 

This  Regulation  shall  be  binding  in  its  entirety  and directly  appUcable  in  all  Member 

States. 

Done at Brussels, 

For the Council 

The President 

13 

ISSN 0254-1475 

COM(95) 738 final 

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