1999/426/EG: Commission Decision of 4 June 1999 terminating the anti-dumping proceeding concerning imports of ferro-silicon originating in Egypt and Poland (notified under document number C(1999) 1466)
Date: 1999-06-04
Institutions: European Commission
Subjects: Egypt, Poland, anti-dumping legislation, ferro-alloy, import, originating product

1. 7. 1999

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Official Journal of the European Communities

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(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION
of 4 June 1999
terminating the anti-dumping proceeding concerning imports of ferro-silicon
originating in Egypt and Poland

(notified under document number C(1999) 1466)

(1999/426/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
the European
from countries
Community (1), as last amended by Regulation (EC) No
905/98 (2), and in particular Articles 9 and 11 thereof,

not members

of

After Consulting the Advisory Committee,

Whereas:

A. PROCEDURE

1. Measures in force

(1)

Anti-dumping duties of 32 % on imports of ferro-
silicon originating in Egypt and Poland have been
in force since 1992, when definitive anti-dumping
duties were imposed by Council Regulation (EEC)
No 3642/92 (3). The duties did not apply to exports
by one Egyptian and one Polish exporting
producer
from which price undertakings were
accepted by the Commission by Decisions 92/
331/EEC (4) and 92/572/EEC (5) respectively.

(2)

As regards other anti-dumping measures currently
in force, definitive anti-dumping measures on
ferro-silicon were imposed against Kazakhstan,

Russia, Ukraine, Norway, Iceland, Brazil and Vene-
zuela by Council Regulation (EC) No 3359/93 (6) in
December 1993. Measures on imports from Iceland
and Norway were suspended with the application
of Council Regulation (EC) No 5/94 of 22
December 1993 on the
anti-
dumping measures against EFTA countries from 1
January 1994 (7). Measures on imports from Brazil
were partially reviewed and, by Council Regulation
(EC) No 351/98 (8)
the duty on two Brazilian
exporting producers was reduced to 0 % because of
a finding of no dumping.

suspension of

anti-dumping measures were

Definitive
also
imposed against imports from China and South
Africa by Council Regulation (EC) No 621/94 (9) in
March 1994.

2. Request for Review

(3)

the notice of
Following the publication of
impending expiry (10) of the anti-dumping meas-
ures, the complainant in the original investigation,
the Liaison Committee of the Ferro-Alloy Industry
(‘Euroalliages', hereinafter ‘the applicant'), requested
an expiry review of
to
Article 11(2) of Regulation (EC) No 384/96 (herein-
after the ‘basic Regulation').

the measures pursuant

(1) OJ L 56, 6.3.1996, p. 1.
(2) OJ L 128, 30.4.1998, p. 18.
(3) OJ L 369, 18.12.1992, p. 1.
(4) OJ L 183, 3.7.1992, p. 40.
(5) OJ L 369, 18.12.1992, p. 32.

(6) OJ L 302, 9.12.1993, p. 1.
(7) OJ L 3, 5.1.1994, p. 1.
(8) OJ L 42, 14.2.1998, p. 1.
(9) OJ L 77, 19.3.1994, p. 48.
(10) OJ C 387, 21.12.1996, p. 3.

(4)

(5)

(6)

(7)

(8)

(9)

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1. 7. 1999

after consultation of
sufficient

the
Having determined,
Advisory Committee,
evidence
existed for the initiation of an expiry review, the
Commission published a notice of initiation in the
Official Journal of the European Communities (1)
and commenced the investigation.

that

3. Investigation

The Commission sent questionnaires to all parties
known to be concerned and received replies from
Community producers and importers, as well as
from exporting producers in Egypt and Poland.

as well

Anumber of exporting producers in the countries
concerned,
as Community producers,
Community users and importers made their views
known in writing. All parties who so requested
within the above time limit, and indicated that
there were particular reasons why they should be
heard, were granted hearings.

The investigation of dumping covered the period
from l July 1996 to 30 June 1997 (hereinafter the
‘investigation period'). The examination of injury
covered the period from 1993 up to the end of the
investigation period.

(10)

The Commission sought and verified all the infor-
mation deemed necessary for its investigation, and
carried out verifications at
the
following companies:

the premises of

investigation,

the time of

At
the
the original
Community industry on behalf of which the
complaint was lodged consisted of six producers;
Pechiney Electrometallurgie, France; SKW Trost-
berg AG, Germany; Ferrolegierungswerk Lippen-
dorf GmbH, Germany; Carburos Metalicos, Spain;
Industria Elettrica Indel Spa, Italy; and Utilizzaz-
zioni Elettro Industriali UEI, Italy.

After the imposition of the measures under review,
the structure of the Community industry changed
as a result, on the one hand, of the accession of the
new Member States, and, on the other, of economic
changes within the industry. This resulted in there
being four Community producers of the product
concerned producing for sale on the Community
market. The present expiry review was requested on
behalf of these four producers representing all of
the Community’s non-captive production of the
product concerned.

Three of the four Community producers (Varg(cid:148)n
Alloys AB in Sweden, Ferroatlantica in Spain,
formerly Carburos Metalicos, and Pechiney Electro-
metallurgie in France), representing 96 % and thus
a major proportion of Community production,
investigation and
in the
cooperated actively
responded to the Commission’s questionnaire. The
fourth producer, Industria Elettrica Indel Spa (Italy)
was not able to cooperate since it was undergoing a
restructuring process. Hereinafter the ‘Community
industry' is defined as the three abovementioned
cooperating Community producers.

The Commission officially advised the applicant
Community producers, exporting producers and
importers known to be concerned, representatives
of the exporting countries concerned, as well as the
applicant, of the initiation of the review investiga-
tion, and gave interested parties the opportunity to
make their views known and to request a hearing
within the time limit set in the notice of initiation.

(12)

(1) OJ C 204, 4.7.1997, p. 2.

(a) Community producers:

(cid:190) Varg(cid:148)n Alloys AB, Sweden,
(cid:190) Ferroatlantica, Spain,
(cid:190) Pechiney Electrometallurgie, France.

(b) Importers:

Deutsche Erz-
Germany.

and Metall-Union GmbH,

(c) Exporting producers in Egypt:

EFACO, KIMA.

(d) Exporting producers in Poland:

Huta Laziska.

B. PRODUCT UNDER CONSIDERATION

1. Product concerned

(11)

The product concerned by this investigation is the
same as that concerned by the original investiga-
tion, i.e. ferro-silicon. Production of ferro-silicon
takes place in electric arc furnaces by means of
reducing quartz using carbon bearing products.

The product is used as a deoxidiser and as an
alloying component by the iron and steel industry.

Ferro-silicon is sold in the form of lumps, grains or
powder and exists in various qualities depending
on the silicon content and the impurity content
(i.e. aluminium, carbon, etc.).

exported

from the

It was found that all different forms and qualities of
ferro-silicon
countries
concerned had the same basic physical and chem-
ical characteristics and essentially the same end
uses. They were therefore considered to form a
single product. The product under consideration
currently
falls within CN codes 7202 21 10,
7202 21 90 and 7202 29 90.

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2. Like product

(13)

It was established that the ferro-silicon produced and sold in the Egyptian and
Polish markets was alike within the meaning of Article 1(4) of the basic Regulation
to the ferro-silicon exported, from Egypt and Poland to the Community as they were
identical, or closely resembling, in terms of physical characteristics and end uses.
Furthermore, ferro-silicon produced and sold in the Community market by the
Community industry was found equally to be alike to that exported from Egypt and
Poland within the meaning of Article 1(4) of the basic Regulation.

(14)

The question of dumping was not pursued, given the findings on the situation of the
Community industry and recurrence of injury below.

C. DUMPING

D. SITUATION IN THE COMMUNITY MARKET OF FERRO-SILICION

1. Community market for ferro-silicon

(15)

Taking into account the production of the complainant Community producers, and
an estimate of the production of the non-cooperating producer, together with the
total imports of the product concerned into the Community minus exports from the
Community, the development of Community apparent consumption of the product
concerned is shown below:

1993

1994

1995

1996

(tonnes)

Investigation
period
1.7.1996 to
30.6.1997

Community apparent
consumption

618 805

494 750

595 586

603 394

630 623

2. Volumes and market shares of the imports concerned

(16)

The development of import volumes from the two exporting countries concerned
based on the data reported by Eurostat was as follows:

1993

1994

1995

1996

(tonnes)

Investigation
period
1.7.1996 to
30.6.1997

Imports from Poland

1 029

3 835

21 742

21 172

30 303

Imports from Egypt

10 712

21 873

29 851

15 252

11 098

(17)

The differences in the development of imports from Egypt and Poland are reflected
in the market shares of the countries concerned. The share of the Community
market for ferro-silicon accounted for by Poland was:

1993

1994

1995

1996

(%)

Investigation
period
1.7.1996 to
30.6.1997

Poland’s market share

0,2

0,8

3,7

3,5

4,8

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It should be noted that at the time of the previous investigation the market share of
Poland was around 5 %.

The market share accounted for by Egypt, on the other hand, peaked in 1995, but by
the investigation period had fallen back to the levels prevailing in 1993. The market
share of Egypt was as follows:

1993

1994

1995

1996

(%)

Investigation
period
1.7.1996 to
30.6.1997

Egypt’s market share

1,7

4,4

5,0

2,5

1,8

The market share of Egypt, at the time of the previous investigation, was about 4 %.

3. Prices of the imports concerned

(18)

The investigation found that the prices of the exporting producers in both Egypt
and Poland for exports to the Community were, during the investigation period,
above the non-injurious levels which determined the price undertakings accepted
with respect to both Egypt and Poland (Commission Decisions 92/331/EEC and
92/572/EEC respectively).

(19) As to the development of the prices of the imports subject to investigation over the
period examined as a whole, the Commission established trends using Eurostat
figures. On this basis, import prices were as follows, with 1993 = 100 in both cases:

1993

1994

1995

1996

Investigation
period
1.7.1996 to
30.6.1997

Egypt

Poland

100

100

106

143

111

121

138

132

129

131

(20)

Price undercutting was established at the same level of trade on the basis of a
comparison of the ex-works prices of the Community producers and the cif price,
Community frontier duty paid, for the imports from the countries concerned.

(21)

The exporting producer in Poland claimed an adjustment for quality differences and
for the cost of packaging for the purposes of calculating the margin of undercutting.

the imports

As far as the adjustment for quality differences is concerned, it was claimed that the
silicon content of
than that of
Community-made ferro-silicon. Second, it was alleged that the types of ferro-silicon
produced in Poland and exported to the Community were of a lower quality than
the types typically produced by the Community industry, due to the high impurity
content of the Polish ferro-silicon that made it unsuitable for certain uses.

from Poland was often lower

(22)

These claims were confirmed by the investigation. The transactions listing submitted
by the company showed that the ferro-silicon exported from Poland in the investiga-
tion period had, in around one third of the cases, a silicon content lower than 75 %,
which is the standard of Community production. Moreover, it was found that the
degree of impurity of aluminium and carbon in the ferro-silicon exported was
higher than that sold by the Community producers in the Community.

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As to the differences in the packaging of the product, the exporting producer
claimed that an adjustment should be made to take into account the different costs
between the goods which were delivered in bulk and those delivered in drums or
bags. This claim was also considered justified, and the adjustment agreed. Since these
adjustments for differences in silicon content, impurities and packaging were already
reflected in the existing price undertaking, it was decided to confirm the levels set
out in the price undertaking.

The same adjustments were made for imports from Egypt, since the same differ-
ences were found with regard to the Egyptian exporting producer.

Therefore, the sales prices of all types of ferro-silicon sold on the Community
market during the investigation period were, where necessary, adjusted to the price
for a single reference type of ferro-silicon, for the sales of both the exporting
producers concerned and those of the Community industry. Undercutting was then
calculated by comparing the ex-works sales price of this standard, reference type of
ferro-silicon sold by the Community industry, and the cif Community frontier price,
duty paid, for the same product sold by the exporting producers concerned.

(23)

(24)

On this basis, the weighted average level of price undercutting found was 4,6 % for
Polish exports, and 4,5 % for the Egyptian exports.

4. The situation of the Community industry

(25)

The sales volume of the Community industry was as follows:

1993

1994

1995

1996

(tonnes)

Investigation
period
1.7.1996 to
30.6.1997

Sales
of
Community industry

volume

the

84 499

92 094

101 040

99 647

101 603

(26)

The corresponding market share over the period was:

1993

1994

1995

1996

(%)

Investigation
period
1.7.1996 to
30.6.1997

Market
of
Community industry

share

the

13,6

18,6

17,0

16,5

16,1

(27)

The trend in prices of
(1993 = 100) is shown below:

the cooperating Community industry,

in index form

1993

1994

1995

1996

Investigation
period
1.7.1996 to
30.6.1997

Community industry’s prices

100

108

123

132

128

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(28)

The turnover of the Community industry (in 000’s ecus) was as follows:

1993

1994

1995

1996

(ECU 1 000)

Investigation
period
1.7.1996 to
30.6.1997

Turnover of the Community
industry

48 718

57 324

71 367

75 799

74 790

Thus, over the period considered, turnover increased by 53 %.

(29)

The investigation has established that, on a weighted average basis, the profitability
of the Community industry, calculated as the return on sales, showed an improve-
ment of almost 18 percentage points, as shown in the following table:

1993

1994

1995

1996

(%)

Investigation
period
1.7.1996 to
30.6.1997

Weighted
ability of
industry

profit-
average
the Community

–5,38

8,1

10,1

11,2

12,2

(30)

Production of the Community industry was as follows:

1993

1994

1995

1996

(tonnes)

Investigation
period
1.7.1996 to
30.6.1997

Community industry produc-
tion

79 935

93 188

100 757

96 004

100 066

The above table shows that production increased by 25 % over the period consid-
ered.

(31)

The development of production capacity is shown below:

1993

1994

1995

1996

(tonnes)

Investigation
period
1.7.1996 to
30.6.1997

Production capacity

137 000

141 700

141 200

144 800

144 500

From this it can be seen that capacity grew by 5 % over the period considered.

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(32) Capacity utilisation, on a weighted average basis, was therefore:

1993

1994

1995

1996

(%)

Investigation
period
1.7.1996 to
30.6.1997

Capacity utilisation

58

66

71

66

69

Capacity utilisation increased by 19 %, or 11 percentage points, over the period
concerned.

It should be noted that it is normal for part of the ferro-silicon industry to shut
down its manufacturing plants during the winter months. The process of manufac-
turing ferro-silicon is extremely energy-intensive, and in order to reduce costs,
production ceases during the time when the cost of electricity rises (cid:190) i.e. during
winter. This production organisation is not reflected in the production capacity table
shown above which reflects a maximum production capacity over a full 12 month
period. This also explains the relatively low levels of capacity utilisation.

A certain amount of stock-piling occurs therefore before the onset of winter so that
deliveries can continue.

(33)

The level of employment directly connected with ferro-silicon production was
relatively stable, as can be seen in the following table:

1993

1994

1995

1996

Investigation
period
1.7.1996 to
30.6.1997

Employment

635

635

627

630

610

5. Conclusion

in removing injury caused by imports from the two
exporting countries concerned.

(34) While some of

the major economic indicators
showed a clear positive development over
the
period, with a particular improvement throughout
in financial performance, where the losses of more
than 5 % on turnover in 1993 had become profits
of over l2 % in the investigation period, other indi-
cators, particularly market share, show a less posi-
tive development. It has also been established that
imports from Egypt and Poland taken together
remained significant, and in the case of Poland
increased, although from a low basis, and were
made at prices slightly undercutting those of the
Community industry. It should be noted, however,
that the relative strengthening of the position of
Polish imports occurred after the imposition in the
Community of definitive anti-dumping measures
on other third countries as mentioned above at
recital 2 and that
the exports made by the
exporting producers were covered by undertakings
which were fully respected,
i.e. export prices
obtained were above the undertaking prices.

E. LIKELIHOOD OF CONTINUATION OR

RECURRENCE OF INJURY

1. Egypt

(35)

import

imports

from Egypt

The development of
is
described at recital 20. After rising to a peak in
1995,
share sharply
levels and market
declined to the levels prevailing in 1993. The
market share in the investigation period (1,8 %),
was well below the market share found at the time
of the previous investigation.

(36) As to prices for exports to the Community market,
these still undercut
the Community
industry, although they constantly increased after
the introduction of the anti-dumping measures and
they were also higher than the undertaking price.

those of

Therefore, it was concluded that the Community
industry has benefited from the anti-dumping
measures in force which have served their purpose

In addition, prices at which exports were made to
non-Community markets were higher
than for
exports to the Community market during the
investigation period, indicating that a redirection

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of such exports to the Community market was not
likely from an economic point of view.

(37)

In the Egyptian industry, capacity utilisation is
currently very high; at 94 %, capacity is effectively
fully used, and there were no plans to increase
capacity in 1998.

Further, while in 1995 exports to the Community
represented 68 % of the total sales volume, this
proportion had fallen to 45 % in the investigation
this decline has been compensated by
period;
export sales to non-Community markets which
almost doubled over the same period (from 15 to
35 % of the total sales volume), while domestic
sales rose slightly in percentage terms (17 to 20 %).

2. Poland

(38) Community imports from Poland showed a large
increase in volume terms between 1993 and the
investigation period. However, it has been pointed
out by the Polish exporting producer that, in 1993,
the company suffered a major factory breakdown
which resulted in virtually no ferro-silicon produc-
tion that year. Production only resumed in 1994
but was significantly below the levels reached prior
to 1993. Therefore, the Polish producer submitted
that a 1993 benchmark is not appropriate and that
comparisons should be made on the basis of 1995
figures where production was again at a normal
level.

(39) On the basis of the above, the Commission exam-
ined the development of volumes and export prices
between 1995 and the investigation period and
found a rising trend of these two parameters. It
should be noted, however, that the market share of
Poland at the end of the period examined was still
below the market share found in the previous
investigation. The increase in Polish exports to the
Community also coincided with the imposition of
definitive anti-dumping measures on imports from
Russia, Ukraine and Kazakhstan and the conse-
quent reduction of imports from these countries.

(40) As

to the capacity utilisation of

the Polish
exporting producer, this was 93 % in’ the investiga-
tion period,
thus making an increase in the
volumes produced in the short term unlikely. As to
the proportion of sales to the Community, this rose
from 39 % of total sales in 1995 to 45 % in the
investigation period.

to

export

In the light of these developments, the Commis-
sion examined the possibility of a change in the
distribution of
the Polish exporting producer’s
sales, i.e. whether there would be a further rise in
the
the proportion destined for
Community. In particular, it was examined whether
the restructuring of the Polish steel industry prior
to any accession to the European Union would lead
to a collapse in domestic demand for ferro-silicon,
and consequently to an increase in the supply
available for exports to, inter alia, the Community.
Given that domestic sales in the investigation
period accounted for 37 % of
the
Polish exporting producer, the potential effect of a
fall in domestic demand appeared to be substantial.
Statistics relating to the steel market in Poland,
however,
steel
increased by 31 % over the period 1992 to 1996,
and estimates for 1997 indicate a further increase.

the production of

the sales of

show that

As to the possibility of reducing exports to non-
it way found that
Community third countries,
average prices for standard 75 % ferro-silicon are
higher on non-Community markets than on the
Community market, with no substantial alteration
in the pattern of exports from Poland to the
Community and other countries expected.

(41)

In the light of the foregoing, Polish exports to the
Community are not expected to further increase to
any substantial degree, nor are their prices expected
to fall should anti-dumping measures be removed.
Even with measures in force, and with prices in
those in the undertaking,
excess of
the Polish
the factory
recovered, after
exporting producer
breakdown in 1993/94, a consolidated position on
the Community market, maintaining at the same
time strong domestic sales; it has therefore shown
itself able to compete in the Community with
prices at a non-injurious level. Indeed, the level of
the price-undertaking offered by
the Polish
producer was determined by the injury threshold in
the investigation leading to the measures reviewed.
It would not be economically rational behaviour, if
the anti-dumping measures are allowed to expire,
to try to gain further market
share on the
Community market by cutting export prices. More-
over, given that production capacity is fully utilised,
an increase of exports to the Community could
only be achieved at the expense of domestic sales
or of exports to other third countries, which makes
such a strategy even more unlikely.

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(42)

3. Conclusion

In the light of the above findings, notwithstanding
the fact that the prices of the imports concerned,
though having increased by around 30 % since
the
1993, still undercut slightly the prices of
Community industry, and on the basis of
the
substantially improved financial situation of this
industry,
the
the Commission concludes
expiry of the measures on Egyptian and Polish
imports is not likely to lead to a continuation or
recurrence of injury.

that

In reaching this conclusion, the Commission also
took into account the arguments presented by the
Community industry that, even in the absence of
an expansion of exports to the Community, the
exporting producers in the countries concerned
could still cause material injury by concentrating
sales and depressing prices on the spot market,
with subsequent downwards pressure on the
Community industry’s prices.

In the view of the Commission, this argument is
not well-founded. The exporting producers’ prices
on the Community market were well above the
undertaking prices, which were, at
the time of
acceptance, set at the levels required to remove the
injury due to dumping. This, combined with their
fully-utilised production capacities and improving
or stable demand in their domestic and non-
Community export markets, makes it unlikely that
the Community spot market will be affected by
exports from the countries concerned to the extent
that injury would re-occur.

In this respect, it is recalled that, should the situa-
tion of the Community industry deteriorate due to
dumped imports from the countries concerned, the
industry is free to lodge a new anti-dumping

(43)

(44)

complaint as provided for in Article 5 of the basic
Regulation.

The Commission informed interested parties,
including the Community industry, of its conclu-
sions. After being informed by the Commission of
the above facts and conclusions, representatives of
the Community industry made further representa-
tions, both in writing and orally, concerning the
in question on the
impact of
Community industry. However, no information or
argument was provided which could, on exam-
ination, revise the above conclusions.

imports

the

F. TERMINATION OF THE PROCEEDING

that

therefore,

is concluded,

It
this proceeding
should be terminated and that the anti-dumping
measures adopted on 14 December 1992 by Regu-
lation (EEC) No 3642/92 and by Decisions 92/
33l/EEC and 92/572/EEC should be allowed to
expire,

HAS ADOPTED THIS DECISION:

Sole Article

The anti-dumping proceeding concerning imports of
7202 21 10,
ferro-silicon falling within CN codes
7202 21 90 and 7202 29 90 originating in Egypt and
Poland is hereby terminated.

Done at Brussels, 4 June 1999.

For the Commission

Leon BRITTAN

Vice-President