Council Regulation (EC) No 771/98 of 7 April 1998 imposing a definitive anti-dumping duty on imports of tungsten carbide and fused tungsten carbide originating in the People's Republic of China
Date: 1998-04-07
Institutions: Council of the European Union
Subjects: China, anti-dumping duty, import, originating product, tungsten

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Official Journal of the European Communities

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 771/98

of 7 April 1998

imposing a definitive anti-dumping duty on imports of tungsten carbide and
fused tungsten carbide originating in the People’s Republic of China

THE COUNCIL OF THE EUROPEAN UNION,

imposed a definitive duty of 33 % on imports of
tungsten carbide and fused carbide.

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) and in particular Articles 9(4) and 11(6)
thereof,

not members

of

Having regard to the proposal submitted by the Commis-
sion after consulting the Advisory Committee,

Whereas:

A. PROCEDURE

1. Measures in force

(1)

By Regulation (EEC) No 2737/90 (2), the Council
imposed a definitive anti-dumping duty on imports
of
tungsten carbide and fused tungsten carbide
originating in the People’s Republic of China. By
Decision 90/480/EEC (3) the Commission accepted
undertakings
exporters
concerning the product subject to measures.

two major

given by

Following the withdrawal of the undertakings by
the two Chinese exporters concerned, the Commis-
sion imposed by Regulation (EC) No 2286/94 (4) a
provisional anti-dumping duty on the product
concerned.

By Regulation (EC) No 610/95 (5),
the Council
amended Regulation (EEC) No 2737/90 and

(1) OJ L 56, 6. 3. 1996, p. 1. Regulation as amended by Regula-

tion (EC) No 2331/96 (OJ L 317, 6. 12. 1996, p. 1).

(2) OJ L 264, 27. 9. 1990, p. 7.
(3) OJ L 264, 27. 9. 1990, p. 59.
(4) OJ L 248, 23. 9. 1994, p. 8.
(5) OJ L 64, 22. 3. 1995, p. 1.

(2)

(3)

(4)

2. Request for review

Following the publication in February 1995 of a
notice (6) of the impending expiry of the measures
in force, the Commission received a request for a
review of these measures lodged by Eurom(cid:130)taux, on
behalf of three Community producers representing,
with the exception of one small producer,
the
totality of the producers of the product concerned
in the Community. The request contained evidence
of dumping of
the product originating in the
People’s Republic of China and of renewed mate-
rial injury likely to recur in the event of expiry of
the existing measures. This evidence was consid-
ered sufficient to justify the initiation of a review
investigation.

21

1995,

September

the European Communities (7),

On
the Commission
announced by a notice published in the Official
the
Journal of
initiation of a review of Regulation (EEC) No 2737/
90. This review was initiated within the meaning of
Article 11(2) of Regulation (EC) No 3283/94 (8)
which was replaced during the investigation by
Regulation (EC) No 384/96 (hereafter referred to as
the ‘Basic Regulation').

3. Investigation

The Commission officially advised the producers/
exporters and importers known to be concerned,
the representatives of the exporting country and
the complainant Community producers of
the
initiation of the review.

(6) OJ C 48, 25. 2. 1995, p. 3.
(7) OJ C 244, 21. 9. 1995, pp. 3, 4 and 5.
(8) OJ L 349, 31. 12. 1994, p. 1.

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Official Journal of the European Communities

9. 4. 98

(5)

(6)

(7)

(8)

(9)

Interested parties were given the opportunity to
make their views known in writing and to request a
hearing within the time limit set in the above
notice.

The Commission sent questionnaires to all parties
known to be concerned and received replies from
the three complainant Community producers,
three importers which were also users of
the
product concerned and from two exporters/produ-
cers and an importer in the Community related to
exporters/producers. The Community producers,
exporters/producers
importers/users
made their views known in writing and were
granted a hearing.

and some

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

(c) Related importer:

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

(d) Producer in the analogue country:

(cid:190) Teledyne Advanced Materials, USA

The investigation of dumping covered the period
from 1 October 1994 to 30 September 1995 (here-
after 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
investigations
country. Furthermore,
concerning tungsten products,
tungsten ores
and concentrates on the one hand, and tungstic
oxide and acid on the other hand, 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.

two other
i.e.

B. PRODUCT UNDER CONSIDERATION AND

LIKE PRODUCT

1. Product under consideration

(10)

The product concerned by the present review is the
same as the one under consideration in Regulation
(EC) No 2737/90 and falls within CN code
2849 90 30.

treatment

Tungsten carbide and fused tungsten carbide are
compounds of carbon and tungsten produced by
heat
(carburisation in the first case,
fusion in the second). Both products are inter-
mediate products, used as input materials in the
manufacture of hard metal components such as
cemented carbide cutting tools and high-wear
components, in abrasion-resistant coatings, in bits
for oil drilling and mining tools as well as in dies
and tips for the drawing and forging of metals.

(11) An allegation was made by an importer that tung-
sten carbide and fused tungsten carbide were
different products. The arguments put forward were
mainly based on the different manufacturing
processes and the differences in chemical charac-
teristics.

the

However,
shown that,
investigation has
although their manufacturing process is different,
tungsten carbide and fused tungsten carbide have
the same chemical composition (both consist of
approximately 92 to 94 % of tungsten metal and 4
to 6 % of carbon) and come from the same stage in
the tungsten production chain, i.e. between tung-
sten metal powder and carbide tools and wear-
resisting materials. Furthermore, they are put to
similar end-uses in the industry, i.e. as a surface
hardening
certain
specific and limited applications which require
higher wear and abrasive resistance only fused
tungsten carbide is used, fused tungsten carbide
and tungsten carbide are generally interchangeable.
It was therefore concluded that, as in the original
investigation, tungsten carbide and fused tungsten
carbide are one single product for the purpose of
the investigation. They are hereafter referred to as
‘carbide'.

component. Although for

2. Like product

(12) As established in the original

investigation,

those manufactured

the
review investigation has confirmed that the prod-
ucts exported by the People’s Republic of China
and
the
Community producers and by producers in the
analogue country were like products within the
meaning of Article 1(4) of the Basic Regulation,
because they have essentially the same physical
characteristics and end uses.

sold

and

by

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C. CONTINUATION AND LIKELIHOOD OF

RECURRENCE OF DUMPING

1. Preliminary remarks

(13)

In accordance with Article 11(2) of the Basic Regu-
lation, the purpose of the present review was to
determine whether or not the expiry of the meas-
ures would lead to a continuation or recurrence of
in particular by examining whether
dumping,
dumping continued to take place after the adoption
of anti-dumping measures.

2. Analogue country

(14)

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
a third country market economy (hereinafter the
‘analogue country').

initiation envisaged the use of

For this purpose South Korea had been suggested
as an analogue country by the complainants. The
notice of
this
country as an analogue country. Although substan-
tial efforts were made to secure cooperation from
several South Korean manufacturers of the product
concerned, these producers refused to cooperate.

(15) As an alternative, the complainants had suggested
the use of the United States of America as an
analogue country. In addition, the use of Israel for
this purpose was also considered in the light of the
readiness of the Israeli manufacturer Metek Metal
Technology Ltd to cooperate not only in the review
concerning tungstic oxide and tungstic acid (1), but
also in this review. However, when analysing the
data submitted by the Israeli producer Metek Metal
Technology Ltd, it became clear that this company
did not sell the product concerned on its domestic
market.

In the present case, only the US market seemed to
provide for sufficient sales in the ordinary course of
trade of domestically produced carbide. One major
US producer of carbide, Teledyne Advanced Ma-
terials (hereinafter ‘Teledyne'), offered to cooperate.

imported tungstic oxide, as well as the repro-
cessing of various tungsten containing scrap
compositions. It is similar to the manufacturing
process of the Chinese producers, assessed on
the basis of data available from the cooperating
Chinese exporters/producers. It is modern and
efficient, and proved to be profitable during the
investigation period,

(cid:190) in terms of sourcing, Teledyne had unimpeded
access to the raw materials for the production of
carbide, namely ammonium paratungstate and
tungstic oxide, which were purchased at world
market prices during the investigation period
from different sources of supply,

(cid:190) the US producer sold around 85 % of

its
production on the US market, an open and
representative domestic market with a consider-
able number of end-users, where it competed
with six other local producers of carbide. The
US market showed a competitive structure of
supply and demand, further bolstered by signif-
icant import volumes of carbide from various
(the People’s Republic of China,
countries
South Korea, Israel, etc.). Nothing was found to
suggest that costs and prices were not governed
by the economic forces of a non-regulated, free
market economy.

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

No objections were raised to the choice of the US
as an analogue country, either by the Chinese
exporters/producers or by the Chinese authorities,
or by any other party concerned.

The following facts and considerations were de-
cisive for
the United States of
America as an appropriate analogue country:

the choice of

(17)

(cid:190) the carbide produced in the US had the same
characteristics as that produced in the People’s
Republic of China
and exported to the
Community,

(cid:190) the carbide manufacturing process of the co-
operating US producer is based on the calcina-
tion into
of domestically
produced or imported ammonium paratung-
state which is further carburised into tungsten
carbide, or on the direct carburisation of

tungstic

oxide

(1) OJ L 87, 21. 3. 1998, p. 24.

3. Normal value based on domestic sales

In accordance with Article 2(2) of the Basic Regula-
tion it was examined whether the volume of sales
of carbide by Teledyne on the domestic market
reached at least 5 % of the volume of the product
concerned exported by the People’s Republic of
China to the Community. It was found that the
domestic sales of
the like product achieved by
Teledyne represented a multiple of the volume of
the exports made by the Chinese exporters to the
Community.

(18)

subsequently

the
It was
domestic
independent
of Teledyne
customers could be considered to have been made
in the ordinary course of trade.

examined whether
to

sales

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Whether or not domestic sales were made in the
ordinary course of trade was determined pursuant
to Article 2(4) of the Basic Regulation. It was found
that the weighted average selling price of all sales
during the investigation period was equal to or
higher than the weighted average unit cost of
production, and that the volume of individual sales
transactions below unit cost of production was less
than 20 % of sales being used to determine normal
value; therefore all domestic sales were regarded as
having been made in the ordinary course of trade.

(19) Normal value was therefore based, as set out in
Article 2(1 ) of the Basic Regulation, on the basis of
the prices paid or payable of all domestic sales of
the carbide to independent customers of Teledyne
in the US market during the investigation period.

claimed and demonstrated to affect price compar-
ability.

6. Dumping margin

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

free-at-
Expressed
Community frontier price, duty unpaid, the single
weighted average dumping margin amounts to
30,6 %.

the

of

4. Export prices

D. COMMUNITY INDUSTRY

(20) Comprehensive data were received on export prices
from two Chinese producers/exporters and four
importers. The data covered almost the totality of
Chinese exports of carbide 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 a significant per-
centage of the Chinese exports which were made
through a related company (Minmetals North-
Europe AB), export prices were constructed on the
basis of
independent
customers in the Community, in accordance with
Article 2(9) of the Basic Regulation. An adjustment
was made for all costs, including duties and taxes
incurred between importation and resale, and for
profit. The profit margin was established on the
basis of data obtained from the unrelated importers
in the same business sector.

resale prices to the first

5. Comparison

(21)

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

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

(22) A number of claims were made by the Chinese
exporters/producers and some users concerning the
definition of
the Community industry and the
standing of the producers supporting the review
request.

(23)

The Chinese exporters/producers claimed that one
of the producers supporting the review request was
related to one importer of Chinese carbide and
should therefore be excluded from the definition of
the Community industry, pursuant to Article 4(1)(a)
and (2) of the Basic Regulation.

It was established during the investigation that the
two companies concerned although related had no
control over each other. Moreover, these companies
had conflicting interests regarding the imposition
of the anti-dumping measures. One company was
producing carbide whereas the other company 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 their relationship did
not influence the behaviour nor did it distort the
analysis
the
economic
Community producer in question as regards the
product concerned and there was therefore no
reason to exclude this producer from the definition
of the Community industry.

situation of

the

of

(24) As mentioned in recital (2), the request for review
was submitted by producers representing almost
the totality of the production of carbide intended
for sales on the open market and, accordingly, they
constituted the Community industry.

integrated
This was contested by a number of
producers
in the
tungsten end-products
Community (tools, hard metals), producing small
internal
quantities of

exclusively

carbide

for

of

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they argued that

the
consumption. Specifically,
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 this basis, the producers
supporting the review were not representative of
the Community industry.

the Community production of

(25)

This issue was examined but it was concluded that
the argument was incorrect. Indeed, even if the
output of the companies which only produce for
captive use was taken into account, the producers
supporting the review request would still account
for 60 % of the overall Community production of
the product concerned, thus fulfilling the criteria of
Article 5(4) of the Basic Regulation. In addition, it
was confirmed that the producers supporting the
all Community
review accounted for
production of carbide intended for sales in the
open market.

almost

(26) Given the above,

the producers supporting the
review request constitute the Community industry
within the meaning of Articles 4(1) and 5(4) of the
Basic Regulation. For the remainder of this Regula-
tion, the term ‘Community industry' will be used to
refer to the companies supporting the review.

E. LIKELIHOOD OF CONTINUATION OR

RECURRENCE OF INJURY

1. Preliminary remarks

(27) When examining injury, it should be recalled that
carbide 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 for the other products in the production
chain.

Conclusions with regard to injury were based on
data relating to the Community as composed at the
time of
the
Community of 15 Member States.

the initiation of

the review,

i.e.

ponents) which was not considered to be in direct
competition with the dumped imports.

On this basis, the consumption in the Community
rose from 2 801 tonnes in 1991 to 2 819 tonnes in
1992, decreased to 2 706 tonnes in 1993 and
increased again in 1994 to 4 236 tonnes and in the
investigation period to 4 703 tonnes, representing
an increase of 68 % in comparison with 1991. This
development of consumption, showing a decrease
until the end of 1993 and a recovery thereafter, was
in line with the market developments for the
industrial sectors using the product concerned.

3. Volume and market share of the dumped

imports

(29)

Imports from the People’s Republic of China in
the Community decreased from 143 tonnes in
1991 to 68 tonnes in 1992 and increased again to
83 tonnes in 1993, 136 tonnes in 1994 and 234
tonnes in the investigation period (overall increase
by 63,6 %).

The market share of these imports decreased from
5,1 % in 1991 to 2,4 % in 1992 but increased
continuously thereafter, up to 5 % in the investiga-
tion period, despite
anti-
the
dumping measures in the form of ad valorem
duties after the withdrawal of the undertakings by
the Chinese exporters in 1994.

imposition of

4. Prices of the dumped imports

(a) Overall trend

(30) On the basis of price information available (Euro-
stat), prices of the Chinese exporters (cif, customs
and
remained
duties
relatively stable between 1991 and the investigation
period (+2 %).

anti-dumping

unpaid)

The relatively stable price of carbide has to be seen
in conjunction with the increase in prices of the
tungsten upstream products, ammonium para-
tungstate and tungstic oxide and acid which in-
creased respectively by 27 % and 25 % over the
same period.

2. Community consumption

(b) Price undercutting

(28)

For the purpose of the investigation, and as the
Community industry only produced carbide for the
open market, consumption in the Community
market was established on the basis of the produc-
tion by the Community industry plus imports,
minus exports, plus or minus stock variations. This
approach did not take into account captively used
production of integrated downstream producers of
(e.g. hard metal com-
tungsten end products

(31)

the investigation period,

the Community
For
industry’s monthly weighted average selling price
for carbide was compared with a monthly weighted
average price of
tungsten exported from the
People’s Republic of China to the Community.

The Community industry’s prices were ex-works
and the exporters’ prices were at-Community-
frontier, customs and anti-dumping duties paid.

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This comparison showed a negligible undercutting
margin. However, it should be noted that, prior to
the imposition of the ad valorem duty (September
1994) resulting from the withdrawal of the under-
the Chinese
takings by the Chinese exporters,
prices were found to continuously undercut the
Community producers’ prices and price undertak-
ings in force during this period did not appear to
have been consistently adhered to.

5. The situation of the Community industry

(32)

In accordance with Article 11(2) of the Basic Regu-
lation, it was examined whether the expiry of the
measures in force would lead to a continuation or
recurrence of injury to the Community industry.

(33)

(34)

(a) Production, production capacity, utilization

rate and stocks

The Community industry’s production of
the
product concerned remained stable at around 3 300
tonnes from 1991 to 1993 and increased to 4 375
tonnes in 1994 and 4 641 tonnes in the investiga-
tion period, which represents an increase of 40 %
in comparison with 1991. This increase should be
seen in the light of the increase in consumption
over the same period (+68 %).

The Community industry’s production capacity
remained stable from 1991 to 1993 at 4 240 tonnes
and increased to 4 740 tonnes in 1994 and 5 095
tonnes in the investigation period (+20 % in
comparison to 1991).

(35)

The utilization rate was stable from 1991 to 1993,
at around 78 %, and increased up to more than
90 % in 1994 and the investigation period.

(c) Price evolution

(38)

The weighted average selling price of carbide
decreased sharply (–20 %) between 1991 and 1994
and strongly recovered during the investigation
period.

It is noted that this recovery in prices coincided
with the imposition in September 1994 of a 33 %
ad valorem duty on Chinese imports. Furthermore,
this price increase followed the increase in the
prices of the tungsten upstream intermediates, i.e.
ammonium paratungstate and oxide (see also recital
(31)). The price increase also coincided with the
increase in demand.

(d) Profitability

(39)

The Community producers suffered heavy losses of
up to 20 % on average from 1991 to 1994. As a
consequence of the strong price recovery, profitable
returns on sales were reached during the investiga-
tion period (13 % on average).

(e) Employment

(40) 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 of the tungsten sector
decreased by 14 % over the whole period. In the
investigation period,
the Community industry
employed 580 people in the tungsten production
chain.

(36)

Stocks decreased overall during the period,
particular in 1994 and the investigation period.

in

(f) Conclusion on the situation of the Community

industry

(b) Sales volume and market share

(37)

The quantity of carbide sold in the Community
market by the Community industry increased in
absolute terms from 1 873 tonnes in 1991, to 1 993
tonnes in 1992, decreased to 1 828 tonnes in 1993,
increased again to 2 596 tonnes in 1994 and 2 994
tonnes in the investigation period (overall increase
by 60 %). The market share of this industry, after
an increase in 1992, decreased continuously there-
after. It developed as follows: 66,9 % in 1991,
70,7 % in 1992, 67,6 % in 1993, 61,3 % in 1994
and 63,7 % in the investigation period.

(41)

The above analysis has revealed that some injury
indicators such as production, sales and capacity
utilisation showed, after a long period of negative
trends, positive developments in line with the pos-
itive development in the market overall and coin-
ciding with the imposition of ad valorem anti-
dumping duties on the imports concerned by the
present investigation after 1994. As far as the finan-
cial
the Community industry is
concerned, it should be noted that profits were only
made in the investigation period. In the years prior
the
to the investigation period (1991 to 1994),
Community industry continued to suffer material
injury in the form of decreasing prices and heavy
losses of up to 20 % on average. Finally it should

situation of

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the market

share held by the
be noted that
Community industry, after an increase in 1992,
decreased continuously from 1993 to the investiga-
tion period by almost 10 percentage points. In this
respect, it should be noted that, in the past, the
Chinese exports were mostly concentrated on
ammonium paratungstate and to a lesser extent
oxide. However,
in the
it
absence of measures on carbide,
the Chinese
exports would move gradually to carbide given that
this is a higher value product in the chain.

is not unlikely that,

6. Price undercutting in the event of

the

expiry of measures

(42) A second price undercutting calculation was under-
taken to establish the level of undercutting in the
event of the expiry of anti-dumping measures. The
methodology was the same as that described in
recital (31) except that no anti-dumping duty was
added to the import price. In this case, undercut-
resulted in 23 % on average,
ting margins
expressed as a percentage of
the Community
producers’ prices.

7. Conclusion

(43)

situation of

The
the Community producers
improved during the investigation period. However,
it can be concluded from the investigation that,
because of their low prices, Chinese imports aggra-
vated the difficulties of the Community industry
prior to the imposition of ad valorem duties when
the undertakings offered by the Chinese exporters/
producers were apparently not respected. This has
prevented the Community industry from fully
the previous
recovering from the
dumping practices. It appears highly likely that in
the absence of anti-dumping measures, the prices
of the Chinese dumped imports would be made at
a level that undercuts the prices of the Community
industry.

effects of

(45)

(46)

industry increased and the financial situation of the
Community producers
improved after years of
losses.

increase of

It was further claimed that Chinese imports have
had less impact on the Community market than
imports from other third countries like the United
States or South Korea. It should be noted that,
although imports originating from the USA and
South Korea took over part of
the increase in
consumption during the period examined, with a
consequent
the respective market
shares,
their prices were found to be generally
higher than the Chinese prices and there was no
evidence of these prices being dumped. In addi-
tion, any influence of other imports on the situ-
ation of the Community industry does not detract
from the negative impact that, in the absence of
measures, the Chinese imports could continue to
have on the situation of the Community industry
as shown by the likelihood of continued price
undercutting (see recital (43)).

Furthermore, the need for measures to be main-
tained should also be seen in the light of the pres-
sure that imports of Chinese intermediate products
could apply on the prices of the Community indus-
try’s end-product. In this context,
it should be
noted that the Community industry is, to a certain
degree, dependent on external supply of upstream
products (mainly ammonium paratungstate), given
that the recycling process of scrap materials does
not, at the moment, meet the overall needs of the
industry. In the absence of anti-dumping measures
on carbide, the industry could be compelled, under
pressure from the Chinese imports of this product,
to lower its prices of carbide and if faced at the
same time with an increase in the Chinese prices of
upstream products, its viability would be compro-
mised.

(47)

It was therefore concluded that, in the absence of
measures, there is a likelihood of a recurrence of
injury.

(44)

In this context, a number of claims were made by
the Chinese exporters questioning the causal link
between the dumped imports and the situation of
the Community industry.

F. COMMUNITY INTEREST

It was alleged that the recovery of the Community
industry was only due to the surge in demand for
carbide in 1994 and the investigation period and
not to the imposition of an ad valorem duty on
Chinese imports. In this respect,
it cannot be
denied that the recovery in demand influenced the
level of prices. However, it should be stressed that
it was only after September 1994, when the ad
valorem anti-dumping duties were imposed, that
the sales prices achieved by the Community

(48)

the interest of

It should be recalled that in the previous investiga-
tion, the adoption of measures was considered not
to be against
the Community.
Furthermore, it should be noted that the present
investigation is a review, thus analysing a situation
in which anti-dumping measures have already been
in place. Consequently, the timing and nature of
the present investigation would allow to assess any
negative undue impact on the parties concerned by
the anti-dumping measures imposed.

L 111/8

EN

Official Journal of the European Communities

9. 4. 98

1. The Community carbide industry

measures.
competitiveness.

It would allegedly suffer a loss of

(49)

the most

The Community industry in the investigation
period was composed of three companies located in
different Member States. For each of these com-
panies, carbide represents
important
product in the tungsten production chain, being
the final product in this chain. In terms of turn-
over, carbide accounts for more than 60 % of the
value of all sales of tungsten products. In the past
years, constant investments have been made in this
sector in order, in particular, to ensure compliance
of
environmental
and to develop new processing
requirements
methods, namely recycling of tungsten containing
scrap materials. This
technology is aimed at
gaining more independence from the raw materials
(ammo-
(concentrates) or
nium paratungstate and tungstic oxide and tungstic
acid).

production methods with

intermediate products

tools

carbide

It was found that this user, which is an integrated
and wear-resistant
producer of
materials, started its production process during the
period considered mainly from upstream inter-
mediates such as ammonium paratungstate and
tungstic oxide and had, therefore, limited needs for
imported carbide. It imported almost a quarter of
the total of carbide imported in the Community
from the People’s Republic of China. However, this
represented less than 4 % of its carbide consump-
tion. The maximum impact of the 33 % duty was
calculated to amount
to less than 1 % on the
production costs of the tungsten related products of
this user. Any impact of the duty on this com-
pany’s tungsten chain would therefore appear to be
minimal.

The economic situation which is characterised by
financial
losses having been incurred over four
years by the Community industry has not yet been
fully re-established since the recent introduction of
an ad valorem anti-dumping duty.

(50) As shown in the investigation, it is likely that in
the absence of protective measures on carbide, the
last and most vulnerable stage of
the tungsten
production chain, injury would recur in the form of
losses to the Community industry and continuing
and even growing losses of market share. Fair
conditions of competition should therefore be
maintained to allow the Community industry to
remain viable.

(53) A dozen smaller users have expressed themselves in
favour of maintaining the measures. The main
the measures on carbide
argument was that
lapsed, it would only favour the major users’ strong
position in the market of carbide tools. These users
have a stronger negotiating position vis-a-vis the
Chinese suppliers than the smaller companies and
could therefore obtain more advantageous prices.

if

(54) No other substantiated comments against measures
were submitted by users. Since the measures have
been in place for a certain period, and would be
maintained at the same level, it can be concluded
that this would not imply any deterioration of the
situation of the users in general.

(55)

(56)

2. The user industry

(51)

It is recalled that the Community users of carbide
are mainly the manufacturers of hard metal
components,
(i.e. carbide tools and wear-resisting
materials). It is composed of a few large companies
(‘major users') which partly have an integrated
from the ammonium
production (i.e.
paratungstate or tungsten oxide stage and transform
these products up to the final stage) and around a
hundred smaller companies (‘smaller users'), which
start mostly at the carbide stage.

they start

(52) One major user claimed that

the anti-dumping
duty on Chinese imports would increase its overall
production costs and endanger its position on the
Community market in comparison with its major
US and Japanese competitors which can obtain
supplies of carbide not subject to anti-dumping

3. Effective competition

also been claimed that

It has
the level of
competition on the carbide market would be
affected by the continuation of the anti-dumping
duty since it would create an oligopolistic market.
All users would have to rely on the Community
producers.

It should be recalled that in spite of anti-dumping
measures, the Chinese exporters have always been
present on the Community market and increased
their market share during the investigation period.
It should be further noted that there are other
third-country
the
Community, ensuring that a number of alternative
supply sources exist. Finally, it has been demon-
strated that due to the interrelationship between
the various products of the tungsten chain, there is
considerable competitive pressure in the market for
any product in the chain from the competitors in
the market for the other products.

suppliers

carbide

in

of

9. 4. 98

EN

Official Journal of the European Communities

L 111/9

4. Conclusion on Community interest

(57)

In the light of the above, it was concluded that
there were no compelling reasons not to maintain
the measures in force, in order to ensure compe-
titive conditions of fair pricing and to avoid any
likelihood of
injury to the
recurrence of
Community industry which would certainly occur
if the measures were allowed to expire.

a

G. ANTI-DUMPING MEASURES

(58) All parties concerned were informed of the essen-
tial facts and considerations on the basis of which it
was intended to recommend the maintenance of
the existing measures. They were also granted a
period within which to make representations
subsequent to these disclosures. The comments of
the parties were considered and, where appropriate,
the findings have been modified accordingly.

(59)

It follows from the above that, as provided for by
the anti-
Article 11(2) of
dumping duty of 33 % on imports of tungsten
carbide and fused carbide originating in the

the Basic Regulation,

People’s Republic of China imposed by Regulation
(EEC) No 2737/90 should be maintained. Regula-
tion (EEC) No 2737/90 has been maintained in
force by this review and will lapse on its conclu-
sion. The anti-dumping duty imposed by that
Regulation should therefore be reimposed,

HAS ADOPTED THIS REGULATION:

Article 1

1. A definitive anti-dumping duty is hereby imposed
on imports of
tungsten carbide and fused tungsten
carbide, falling within CN code 2849 90 30 and origin-
ating in the People’s Republic of China.

The duty shall be 33 % of

2.
free-at-
Community-frontier price of the product, before duty.

the net,

3. Unless otherwise specified, the provisions in force
concerning customs duties shall apply.

Article 2

into force on the day
This Regulation shall enter
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 Luxembourg, 7 April 1998.

For the Council

The President

D. BLUNKETT