98/230/EC: Commission Decision of 20 March 1998 terminating the anti-dumping proceeding concerning imports of tungstic oxide and tungstic acid originating in the People's Republic of China
Date: 1998-03-20
Institutions: European Commission
Subjects: China, anti-dumping duty, anti-dumping legislation, chemical compound, import, tungsten

L 87/24

EN

Official Journal of the European Communities

21. 3. 98

COMMISSION DECISION

of 20 March 1998

terminating the anti-dumping proceeding concerning imports of tungstic oxide
and tungstic acid originating in the People’s Republic of China

(98/230/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 384/96 of
22 December 1995 on protection against dumped imports
from countries
the European
Community (1), as amended by Regulation (EC) No 2331/
96 (2), and in particular Article 9(2) thereof,

not members

of

After consulting the Advisory Committee,

Whereas:

(1)

(2)

(3)

(4)

A. PREVIOUS PROCEDURE

By Regulation (EEC) No 2736/90 (3), the Council
imposed a 35 % definitive anti-dumping duty on
imports of tungstic oxide and tungstic acid origin-
ating in the People’s Republic of China. By
Decision 90/479/EEC (4), the Commission accepted
undertakings given by two major Chinese exporters
concerning the product subject to measures.

Following the withdrawal of the undertakings by
the two exporters concerned,
the Commission
imposed, by Regulation (EC) No 2286/94 (5), provi-
sional
on the product
concerned.

anti-dumping

duties

By Regulation (EC) No 610/95 (6),
the Council
amended Regulation (EEC) No 2736/90 and
imposed a definitive duty of 35 % on imports of
tungstic oxide and tungstic acid in respect of those
two exporters.

B. REVIEW INVESTIGATION

Following the publication in February 1995 of a
notice of the impending expiry of the measures (7)
in force, Eurom(cid:130)taux, representing the totality of
Community producers of the product concerned,
requested a review of the measures. The request
contained evidence of dumping of
the product
originating in the People’s Republic of China and
of renewed material injury likely to result in the
the existing measures. That
event of expiry of

(1) OJ L 56, 6. 3. 1996, p. 1.
(2) OJ L 317, 6. 12. 1996, p. 1.
(3) OJ L 264, 27. 9. 1990, p. 4.
(4) OJ L 264, 27. 9. 1990, p. 57.
(5) OJ L 248, 23. 9. 1994, p. 8.
(6) OJ L 64, 22. 3. 1995, p. 1.
(7) OJ C 48, 25. 2. 1995, p. 3.

(5)

(6)

(7)

(8)

evidence was considered sufficient to justify the
opening of a review.

21

1995,

September

the European Communities (8),

On
the Commission
announced by a notice published in the Official
the
Journal of
initiation of a review of Regulation (EEC) No 2736/
90. That review was initiated under Article 11(2) of
Council Regulation (EC) No 3283/94 (9), which was
replaced during the investigation by Regulation
(EC) No 384/96 (hereinafter referred to as the
‘Basic Regulation')

.

The Commission officially advised the producers/
exporters and importers known to be concerned,
the representatives of the exporting country and
the Community producers of the initiation of the
review, and gave the parties directly concerned the
opportunity to make known their views in writing
and to request a hearing within the time-limit set
in the above notice.

The Community producers, exporters/producers
and some importers which were also users of the
product concerned made their views known in
writing and were granted a hearing.

The Commission sought and verified all informa-
tion it deemed necessary for the purpose of the
investigation and carried out verification visits at
the premises of the following companies:

(a) Community producers

(cid:190) Wolfram Bergbau und H(cid:129)ttengesellschaft

m.b.H., St Peter, Austria,

(cid:190) H. C. Starck GmbH & Co KG, Goslar,

Germany,

(cid:190) Eurotungst(cid:138)ne Poudres, Grenoble, France,

(b) Importers/users in the Community

(cid:190) AB Sandvik Hard Materials, Sweden,
(cid:190) Seco Tools AB, Sweden,
(cid:190) Cerametal, Luxembourg,

(c) Related importer

(cid:190) Minmetals North-Europe AB, Sweden,

(d) Producer in the analogue country

(cid:190) Metek Metal Technology Ltd, Israel.

(8) OJ C 244, 21. 9. 1995, p. 7.
(9) OJ L 349, 31. 12. 1994, p. 1.

21. 3. 98

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Official Journal of the European Communities

L 87/25

(9)

(10)

The dumping investigation covered the period
from 1 October 1994 to 30 September 1995 (here-
inafter referred to as the ‘investigation period'). The
examination of
injury covered the period from
1991 up to the end of the investigation period.

The present review exceeded the period of one year
within which it
should normally have been
concluded pursuant to Article 11(5) of the Basic
Regulation, due to the complexity of the investiga-
tion, and in particular due to the difficulties in
obtaining reliable data on an appropriate analogue
country. Furthermore, two other investigations (1)
concerning tungsten products, namely tungsten
ores and concentrates, on the one hand, and tung-
sten carbide and fused carbide, on the other, were
initiated at the same time as the present review and
had to be carried out in parallel given the links
between these products in the tungsten production
chain. Finally, further developments in relation to
the tungsten market were presented at a late stage
of the investigation.

C. PRODUCT UNDER CONSIDERATION AND

LIKE PRODUCT

(13)

1. Product under consideration

(11)

The product covered by the present review is the
same as the one under consideration in Regulation
(EEC) No 2736/90 and falls under CN code
2825 90 40.

The product concerned is
tungstic acid:

tungstic oxide and

(cid:190) tungstic oxide (blue or yellow powder)

is a
tungsten and oxygen (WO3),
compound of
usually produced by heat treatment (calcination)
of ammonium paratungstate (APT) or by re-
cycling of various tungsten containing scrap
compositions,

(cid:190) tungstic acid is a compound of

tungsten,
hydrogen and oxygen (H2WO4) produced either
by precipitation from sodium tungstate solution
or by the decomposition of calcium tungstate.
It
is marketed either untreated or following
thermal decomposition in the form of indus-
trial-quality tungstic oxide.

Tungstic oxide and tungstic acid are intermediate
products or input-materials mostly used to manu-
facture
other downstream tungsten-containing
products in the tungsten chain although certain
types can be directly used for very limited applica-
tions in ceramics. They have very similar chemical
characteristics, are nearly identical
in terms of
tungsten content and there are, after specific minor
processing, no significant differences
in their
industrial uses. Consequently, tungstic oxide and
tungstic acid, as in the previous investigation, are

(1) OJ L 244, 21. 9. 1995, pp. 3 and 5.

regarded as one single product for the purpose of
the investigation (and hereinafter referred to as
‘oxide/acid').

2. Like product

(12) As established in the original investigation, it is
considered that oxide/acid exported from the
People’s Republic of China and oxide/acid manu-
factured and sold by the Community producers and
by producers in the analogue country are like prod-
ucts within the meaning of Article 1(4) of the Basic
Regulation because they have essentially the same
physical, chemical and technical characteristics and
end-uses.

D. DUMPING

1. Normal value

1.1 Selection of the analogue country

Since the People’s Republic of China is not a
market economy country, normal value had to be
determined on the basis of information obtained in
an analogue country. For this purpose South Korea
had been suggested by the applicant. The notice of
initiation envisaged accordingly the use of
that
country as an analogue country. Although substan-
tial efforts were made by the Commission to secure
cooperation from South Korean manufacturers of
the product concerned, those producers did not
agree to cooperate in the review.

(14) As an alternative, the complainants suggested the
United States of America as an analogue country.
However,
from the several US manufacturers
approached in this respect by the Commission,
only one, the company Teledyne Advanced Ma-
terials, was willing to provide some general infor-
mation.

In any event, when analysing the data submitted by
that company, it appeared that, during the investi-
gation period,
that company mainly purchased
oxide/acid of Chinese and Russian origin and
produced only a negligible quantity of oxide/acid
from calcination of ammonium paratungstate ‘APT'
(that is, the immediate upstream product in the
production chain)
for its internal consumption;
further, the company did not sell any oxide/acid
either on the domestic or on the export markets.

In addition, the other US manufacturers appeared
to be in the same situation: no US-produced oxide/
acid is sold on the open domestic market, nor is
there any significant quantity of US-produced
oxide/acid exported, as it is considered an inter-
mediate product destined exclusively for
the
internal consumption in producing further down-
stream products in the tungsten chain.

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Official Journal of the European Communities

21. 3. 98

(15)

(16)

In consequence, the United States was not consid-
ered an appropriate analogue country for
the
purpose of this review.

Therefore, the Commission expended considerable
in contacting companies in various other
effort
(prima facie suitable) analogue countries in order
to obtain cooperation, in particular, from producers
in Canada, Japan and Israel.

From the various producers contacted, only one
producer of oxide/acid, Metek Metal Technology
Ltd. (hereinafter ‘Metek'), Israel, agreed to cooperate
for the purpose of this review. The choice of Israel
as analogue country was considered appropriate in
view of the following factors:

(cid:190) the oxide/acid produced in Israel had the same
characteristics as that produced by cooperating
Chinese exporters/producers,

(cid:190) the oxide/acid manufacturing process of

the
cooperating Israeli producer is based on the
calcination of APT or
the reprocessing of
various tungsten containing scrap compositions.
The Israeli production process is similar to the
one applied by the cooperating Chinese produ-
cers/exporters. It is modern and efficient,
(cid:190) in terms of sourcing, Metek had unimpeded
access to the raw materials for the production of
the product concerned, namely APT and tung-
sten containing scrap compositions, which were
purchased at world-market prices during the
investigation period from sources
in the
People’s Republic of China and Russia (for
APT), or from other suppliers located in Europe
and the United States (for scrap compositions),
(cid:190) the oxide/acid production volume of this Israeli
producer was sufficiently significant to provide
for
as
compared to the Chinese product,

cost of production,

reasonable

a

(cid:190) in addition, the Israeli oxide/acid market itself
is open and competitive, because imports are
exempted from any customs duties or other
import restrictions, and there is a significant
volume of imports.

On the basis of the above factors, and in accord-
the Basic Regulation,
ance with Article 2(7) of
Israel was therefore considered to be an appropriate
and not unreasonable choice of an analogue
country for establishing normal value for
the
product under investigation.

(17) No objections were raised to the choice of Israel as
an analogue country, either by the Chinese ex-
porters/producers, the Chinese authorities, or any
other party concerned.

(19)

Basic Regulation. Since the cooperating Israeli
producer was primarily producing the product
concerned for its own consumption in the produc-
tion of
tungsten metal powder, besides a small
export-oriented production, it was thus considered
that the most reasonable basis for the normal value
would be a constructed value, calculated by adding
together the cost of production, (that is, manufac-
turing costs and selling, general and administrative
expenses (hereinafter ‘SG&A')), and a reasonable
margin of profit.

The cost of manufacture was obtained by adding all
costs, both fixed and variable, for materials and
manufacturing in the country of origin. In the
absence of data specific to oxide/acid for other
producers/exporters in the country of origin, as far
as SG&A are concerned they were calculated by
reference to SG&A on sales of
tungsten metal
the same general category of
is,
powder,
product, by Metek on its domestic market during
the investigation period, in accordance with Article
2(6)(b) of the Basic Regulation.

that

The same basis was used for the calculation of a
profit margin. The level of the profit margin was
also in line with the profit margin used in the
original investigation.

2. Export prices

(20)

The Commission received comprehensive data on
from two Chinese producers/ex-
export prices
porters and four
importers. The data covered
almost the totality of Chinese exports of oxide/acid
to the Community during the investigation period,
as confirmed by Eurostat figures.

to independent customers

For those Chinese exports which were sold directly
for export
in the
Community, export prices were established on the
basis of the prices actually paid or payable for the
product concerned, in accordance with Article 2(8)
of the Basic Regulation. For those Chinese exports
which were made through a related company
(Minmetals North-Europe AB) and represent the
majority of all Chinese exports, export prices were
constructed on the basis of resale prices to the first
independent customers
in
accordance with Article 2(9) of the Basic Regula-
tion. An adjustment was made for all costs,
incurred between
and taxes
including duties
importation and resale, and for profit. The profit
margin was established on the basis of data
obtained from three unrelated importers in the
same business sector.

in the Community,

1.2 Constructed normal value

3. Comparison

(18)

The People’s Republic of China being a non-
market economy country and Israel having been
selected as
country,
normal value for the Chinese exports had to be
established in accordance with Article 2(7) of the

an appropriate

analogue

(21)

In accordance with Article 2(11) of the Basic Regu-
lation, a weighted average normal value, on a fob
Israeli frontier basis, was compared to a weighted
average export price on a fob Chinese frontier
basis, and at the same level of trade.

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Official Journal of the European Communities

L 87/27

For the purpose of a fair comparison, in accordance
with Article 2(10) of
the Basic Regulation, due
allowance in form of adjustments was made for
differences in respect of transport, insurance, credit
costs, handling and ancillary costs, which were
claimed and shown to affect price comparability.

(26)

The request for review alleged that the producers
supporting the request represented 100 % of the
production of oxide/acid intended for sale on the
open market and thus constituted the entire
Community industry in conformity with Article
5(4) of the Basic Regulation.

4. Dumping margin

(22)

The above comparison showed the existence of
dumping, the dumping margin being equal to the
amount by which the normal value exceeded the
export price.

as

a percentage

Expressed
free-at-
Community frontier price, duty unpaid, the single
weighted average dumping margin amounts to
5,6 %.

the

of

E. COMMUNITY INDUSTRY

(23) A number of claims were made by the Chinese
in the Community
the Community
the producers

exporters and some users
concerning the definition of
industry and the
supporting the review request.

standing of

(24)

The Chinese exporters claimed that one of the
companies supporting the review request was an
important purchaser of the dumped imports and
should therefore be excluded from the definition of
the Community industry, pursuant to Article 4(1)(a)
of the Basic Regulation.

The investigation has confirmed, however, that no
imports of oxide/acid of Chinese origin were made
by that producer during the period examined. The
claim was therefore dismissed.

(25)

The Chinese exporters also claimed that one of the
producers supporting the review was related to an
importer of Chinese oxide/acid and should there-
fore be excluded from the scope of the Community
industry for the purpose of the review pursuant to
Article 4(1)(a) and (2) of the Basic Regulation.

It was confirmed during the investigation that the
two companies concerned, although related, had
conflicting interests regarding the imposition of
the anti-dumping measures. One company was
producing oxide/acid, whereas
the other was
importing the product concerned. It was found that
the two companies were acting autonomously when
defining and pursuing their business
strategy.
Overall, it was concluded that the relationship did
not influence the behaviour, nor distort the analysis
the Community
of
the product
producer
concerned. Accordingly,
that producer was not
excluded from the definition of the Community
industry.

the economic situation, of
in question as

regards

That contention was contested by a number of
integrated producers of tungsten end-products in
the Community (producers of tools, hard metals),
producing small quantities of oxide/acid from
internal
calcination of APT exclusively
consumption. Specifically,
the
representativity of
the producers supporting the
review should be assessed by reference to the
totality of
the
product concerned (including their own captive
production) and that, on that basis, the producers
supporting the review were not representative of
the Community industry.

the Community production of

they argued that

for

the producers

This issue was re-examined but it was concluded
that the argument was unfounded. Indeed, even if
the companies
the captively-used production of
which presented the above claim was taken into
account,
supporting the review
request would still account for 79 % of the overall
oxide/acid Community production of the product
concerned, thus fulfilling the criteria of Article 5(4)
of
it was
confirmed in the course of the investigation, that
the producers supporting the review accounted for
the totality of the Community production of oxide/
acid intended for sale on the open market.

the Basic Regulation.

In addition,

(27) Given the above, it was concluded that the produ-
cers supporting the review request constitute the
Community industry within the meaning of Article
4(1) and Article 5(4) of the Basic Regulation. For
the
term
Community industry will refer to the companies
supporting the review request.

this Decision,

remainder

the

of

F. INJURY

1. General

(28) When examining injury, it should be recalled that
oxide/acid is part of an entire production chain of
tungsten products and that, therefore, any develop-
ments of the market for the product concerned
should be seen in conjunction with the develop-
ments of
the other products in the production
chain.

The conclusions with regard to injury were based
on data relating to the Community as composed at
the time of the initiation of the review, that is the
Community of 15 Member States.

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Official Journal of the European Communities

21. 3. 98

(29)

Community consumption

of

industry

the Community

For the purpose of the investigation, consumption
was established on the basis of total imports plus
on the
sales
Community open market. Thus, captively-used
production was not taken into account when deter-
mining Community consumption because it was
not considered to be in direct competition with
imports. The consumption increased continuously
during the period considered from 897 tonnes in
1991, to 1 238 tonnes in 1992, 2 211 tonnes in
1993, 3 815 tonnes in 1994 and 4 062 tonnes in the
investigation period (+452 %).

2. The behaviour of the Chinese exporters

2.1 Volume and market share of imports from the

People’s Republic of China

(30) Oxide/acid imports of Chinese origin increased
from 419 tonnes in 1991 to 676 tonnes in 1992,
1 548 tonnes in 1993, 2 526 tonnes in 1994 and fell
to 1 259 tonnes in the investigation period. They
represented 46,7 % market share in 1991, 54,6 %
in 1992, 70 % in 1993, 66,2 % in 1994 and 31 %
in the investigation period.

(31)

The decrease in Chinese imports in the investiga-
tion period, both in absolute and relative terms,
coincided with the imposition of the ad valorem
anti-dumping duty
in September 1994. The
imports from the People’s Republic of China were
partially replaced by imports from Russia, notably
in the new Member States. It should also be added
that, before joining the Community in 1995, user
companies in Sweden, and to a lesser extent in
Austria, had, according to information available,
stockpiled products of Chinese origin. This also
explains why there was a relative decrease in
imports of oxide/acid from the People’s Republic
of China in the investigation period, which covered
a period after the accession of the new Member
States.

(33)

(34)

the most important raw material for the production
of oxide/acid and more than 90 % of APT
consumed in the Community is in fact imported
from the People’s Republic of China.

(b) U n d e r c u t t i n g

For the investigation period, on the basis of prices
reported by cooperating Chinese exporters and by
importers in the Community, representing 80 % of
the total imports from the People’s Republic of
China, the monthly weighted average Community
industry’s
selling price was compared with a
monthly weighted average import price of oxide/
acid. Transactions by two Community producers of
higher quality materials were excluded because
there were no imports of comparable product types
from the People’s Republic of China.

The Community industry’s prices were considered
at ex-works level and the exporters’ prices were at
Community frontier
level, anti-dumping duties
paid, at the same level of trade. This comparison
showed an undercutting margin of 3,8 % on a
weighted average basis.

of

import prices

The Chinese import prices of oxide/acid remained
below those
industry
the Community
the period examined (1991 to the
throughout
reasons of
investigation period). Although for
comparability,
to the three new
Member States prior to accession have not been
taken into consideration when examining price
undercutting and the evolution of Chinese prices, it
should nevertheless be noted that in the Member
States for which measures were not in force prior to
the
1995 (Austria and Sweden),
Chinese imports were found to be at times lower
than in the Community of 12.

the prices of

2.2 Prices of the dumped imports

(35)

(a) O v e r a l l

t r e n d

(32) According to Eurostat data, the Chinese prices fluc-
tuated in the period examined, with a significant
increase between 1994 and the investigation period.
increase coincided with the increase in
This
demand. This development of prices occurred in
parallel to the increase in prices of APT. Such a
parallel development could be expected as APT is

3. The situation of the Community industry

The investigation has shown that the Community
industry produces both for the open market and for
captive use. The majority of the Community indus-
try’s production of oxide/acid is destined for
internal use. Some of the injury indicators exam-
ined below, namely production, capacity and
capacity utilisation, refer to both captive and non-
captive activities because no meaningful distinction
could be made in this respect. The other factors
below, namely sales, market share, prices and prof-
itability, refer to the industry’s non-captive oxide/
acid activity.

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3.1 Production
utilisation

capacity,

production,

capacity

Republic of China, negative financial results were
incurred between 1991 and 1994, whereas some
profits were achieved in the investigation period.

(36)

The production capacity of
the Community
industry remained stable over the period examined
at around 8 500 tonnes. The production increased
globally, albeit a slight decrease between 1991 and
1993, from 6 151 tonnes in 1991 to 8 123 tonnes in
the investigation period (+32 %). This increase in
production followed the trend of consumption for
all tungsten products.

The capacity utilisation rates increased from 72 %
in 1991 to 95 % in the investigation period.

3.5 Employment

(41) Given the fact that the personnel concerned work
in an integrated production chain and the close
links between the
tungsten products,
various
specific allocations of personnel per product were
not possible. Employment in the tungsten sector
decreased by 14 % over the whole period. During
the
580 persons were
employed in the tungsten production chain.

investigation period,

(37)

(38)

(39)

(40)

3.2 Sales volume and market share

It has to be stressed that although production
increased substantially, the Community producers
used an increasing proportion of their output of
oxide/acid to manufacture products further down
the tungsten chain and only a small proportion was
sold in the open market.

(42)

in

sales

industry’s

The Community
the
Community open market decreased from 1991 to
1993, and slightly increased in 1994 and the inves-
tigation period. However, the Community indus-
try’s sales in the open market were not very signifi-
cant when compared to production volumes
throughout the period. The market share held by
the Community industry went from 38 % in 1991
to 27 % in 1992, to 11 % in 1993 and to 7 % in
1994 and the investigation period. The latter figure
the
represents a relatively small proportion of
Community industry’s total production of oxide/
acid in a context of increasing, and in the investiga-
tion period virtually full, capacity utilisation.

(43)

(44)

3.3 Price evolution

The prices of the Community industry decreased
from 1991 to 1994 and increased during the inves-
tigation period, as did Chinese prices. The latter
trend coincided with a further increase in demand
and the imposition of
the ad valorem anti-
dumping duties.

3.4 Profitability

The situation of the Community industry was prof-
itable overall between 1991 and the investigation
period. Profits were due particularly to sales of
highly specialised types of the product for which
the Community industry still has an outlet. It
should be noted that as regards sales of the product
types identical to those imported from the People’s

3.6 Conclusion on the situation of the Community

industry

The situation of the Community industry improved
considerably between 1991 and the investigation
period as regards production (32 % increase) and
capacity utilisation (95 % capacity utilisation
during the investigation period). As regards the
Community industry’s open market sales and the
corresponding market share,
these continued to
decrease during the period under examination.
Such a decrease should be seen in the light of the
Community industry’s captive use of most of the
increasing production of the product concerned in
the manufacturing of downstream products.

G. RECURRENCE OF INJURY

the Commission examined whether

In conformity with Article 11(2) of the Basic Regu-
lation,
the
expiry of the measures in force would lead to recur-
rence of injury to the Community industry.

shown that

investigation has

The present
the
Community industry has continued its substantial
loss of market share between 1991 and the investi-
gation period, with market share in the investiga-
tion period being limited to 7 % during a period in
which demand increased strongly. However, this
decrease in market share during the period exam-
ined coincided with a tendency by the Community
industry to use an increasing proportion of the
production of oxide/acid captively to produce
downstream products, to the detriment of oxide/
acid sales in the open market. This development
followed an increase in capacity utilisation and was
most notable during the investigation period when
production capacity was being almost fully used
with a consequent loss of market share on the open
market.

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Official Journal of the European Communities

21. 3. 98

(45) On the other hand, and should the Community
industry decide or be forced to change its outlet for
its oxide/acid production, the possibility cannot be
excluded that the Chinese imports could continue
to have a negative impact on the Community
industry’s ability to sell oxide/acid on the open
market, in particular since Chinese prices (with,
and to an even greater extent without, anti-
dumping duty) were found to undercut
those
charged by the Community industry during the
period considered.

investigated given the environmental costs, are not
very significant. It can be said that an important
part of Community produced oxide/acid is derived
from Chinese APT and that
the Community
industry also sources part of its requirements from
Chinese
the
Community
production
appears to be vulnerable irrespective of the ex-
istence of anti-dumping measures on Chinese
oxide/acid imports.

products. As
industry’s

a
oxide/acid

consequence,

(46)

(47)

The Community industry argued that if measures
relating to oxide/acid were repealed, Chinese
imports could endanger the viability of oxide/acid
production by the Community industry if those
imports continued to be sold at very low prices.
Should Community industry be forced to cease
it would become
production of
oxide/acid,
completely dependent on,
imports
from the People’s Republic of China for inter-
mediate products.

for example,

from the

recycling of

it should be recalled that

In this context,
this
industry is integrated upstream, starting production
from concentrates or APT. Part of its production
also derives
tungsten
containing scrap materials, thus somewhat reducing
the dependence on imported raw materials. For two
of the complainants, the recycling of scrap also
allows them to produce products other than tung-
sten (cobalt metal powder and tantalum carbide).
the upstream production
The disappearance of
chain would therefore allegedly also entail
the
disappearance of those other products with signi-
ficant loss of investments.

Nevertheless,
it is not clear to what extent the
industry’s production chain is at risk in the absence
of measures on oxide/acid. Furthermore, such a risk
appears to be partly limited by the competitiveness
that this industry is able to derive from its recycling
activity, which would partly compensate for its
dependency on raw materials supply.

(48)

In any event, it should be stressed that trends in
prices of Chinese oxide until and during the inves-
tigation period closely follows those of Chinese
APT. Chinese imports hold more than 90 % of the
Community APT market. APT, for which no anti-
dumping measure is in force, is the most important
export item of all Chinese tungsten products. It
should be noted that the transformation costs from
APT to the next stage, that is oxide/acid, although
higher in the Community than in other countries

It follows from the above that, although a likeli-
hood of
cannot be
a
completely excluded,
the extent of such injury
cannot at present be determined.

recurrence of

injury

H. COMMUNITY INTEREST

The above considerations
regarding injury and
recurrence of injury should be further analysed in
the following aspects concerning
the light of
Community interest:

1. The complainant Community industry

(49)

The three complainant producers employ some
580 people in the overall production chain of tung-
sten.

As explained in recitals (46) and (47), should the
measures be repealed, it is not clear to what extent
this would have a negative impact on the situation
of the Community industry.

2. The user industry

(50)

The Community user industry is composed of a
small
few large companies and a number of
companies.

Since the accession of the new Member States in
1995, the open market demand for oxide/acid has
significantly increased (more than tripled), given
the presence of important users in these Member
States. These companies (mostly integrated produ-
cers of cemented tungsten carbide) tend at present
to prefer to start the production from oxide rather
than APT because of, among others, environmental
requirements.

(51)

In the light of the Community industry’s limited
supplies to the open market, the user industry is to
a large extent dependent on external sources of
supply.

21. 3. 98

EN

Official Journal of the European Communities

L 87/31

(52)

In conclusion, it appears that the effectiveness of
the duty is not guaranteed in the absence of a duty
on the upstream intermediary product APT,
in
particular because of
the limited transformation
costs between the latter and oxide/acid. In addition,
there is a risk that the maintenance of the measures
would, to a certain extent, inhibit the access of the
user industry to supplies of the product concerned
from a major
injury to the
supplier, whereas
Community industry, should measures be repealed,
would not appear to be imminent.

I. CONCLUSION

(53)

In the light of the above findings, in particular the
fact that the likelihood of recurrence of injurious
dumping was not clearly established, it was consid-
ered that protective measures should no longer be
imposed on imports of oxide/acid originating in
the People’s Republic of China.

(54)

The interested parties were informed of the above
and no adverse comments were received.

(55)

(56)

The Advisory Committee was consulted and raised
no objection.

Therefore, in accordance with Article 9(2) of the
Basic Regulation, it is considered that the continua-
tion of protective measures is unnecessary and that
the proceeding should be terminated,

HAS DECIDED AS FOLLOWS:

Sole Article

The anti-dumping proceeding concerning imports of
tungstic oxide and tungstic acid falling under CN code
2825 90 40 originating in the People’s Republic of China
is hereby terminated.

Done at Brussels, 20 March 1998.

For the Commission

Leon BRITTAN

Vice-President