Proposal for a Council Regulation imposing a definitive anti-dumping duty on imports of furfuraldehyde originating in the People's Republic of China
Date: 1999-12-14
Institutions: European Commission
Subjects: China, anti-dumping duty, chemical alcohol, chemical compound, import

EN

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 14.12.1999
COM(1999) 685 final

Proposal for a

COUNCIL REGULATION

imposing a definitive anti-dumping duty on imports of furfuraldehyde originating in the
People’s Republic of China

(presented by the Commission)

1.

2.

3.

4.

5.

6.

EXPLANATORY MEMORANDUM

By Regulation (EC) No 95/95, the Council imposed a definitive anti-dumping duty
on imports of furfuraldehyde originating in the People’s Republic of China. The
amount of duty applicable was ECU 352 per tonne.

A Chinese exporter, Sinochem, subsequently lodged a request for an interim review
of the measures, pursuant to Article 11(3) of the Basic Regulation. The review
application alleged that the circumstances on which existing measures were based
had changed significantly and that the injurious dumping previously established had
been removed. The Commission considered that sufficient evidence existed for the
initiation of an interim review.

The Commission examined during the review investigation whether the injurious
dumping, established in the previous investigation, had in fact been removed. It
should be noted that during the review investigation the co-operating exporter
accounted for only a minor proportion of total reported imports into the Community
from the People’s Republic of China, far below the 100% co-operation obtained in
the original investigation.

The investigation showed that circumstances with regard to dumping and injury had
not changed since the previous investigation: dumped imports continued to cause
injury to the Community industry and no compelling reasons where found not to
maintain the measures. It is, therefore, concluded that measures should be maintained
in their present form and level. However, it is considered that the duration of the
reviewed measures should be limited to four years. This is appropriate in view of the
duration of the review investigation. Given the difficulties encountered by the
Commission in reaching conclusions in the present case the normal twelve month
period for completion of the investigation was exceeded.

The proposed anti-dumping duty, when related to the free at Community frontier
price and expressed in the form a specific duty amounts to 352 euro/tonne.

The Commission accordingly proposes that the Council adopt the attached proposal
for a Regulation imposing definitive anti-dumping measures.

2

Proposal for a

COUNCIL REGULATION

imposing a definitive anti-dumping duty on imports of furfuraldehyde
originating in the People’s Republic of China

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 384/96 of 22 December 1995 on
protection against dumped imports from countries not members of the European
Community1, and in particular Article 9 thereof,

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

Whereas:

1.

(1)

2.

(2)

A. PROCEDURE

Previous investigation

the Council, by Regulation (EC) N°95/952,

In January 1995,
imposed a
definitive anti-dumping duty on imports of furfuraldehyde originating in the
People’s Republic of China (hereafter ‘PRC’). The amount of duty applicable
was ECU 352 per tonne.

Request for a review

‘Sinochem’),

lodged a request

A Chinese exporter, the China National Chemical Import and Export Corp.
(hereafter
for an interim review of the
measures, pursuant
to Article 11(3) of the Regulation (EC) No 384/96
(hereafter the Basic Regulation) on 5 July 1996. The grounds for the review
application were based on the allegations that: due to the increase in prices of
imports originating in the PRC an anti-dumping duty was no longer necessary
to offset dumping; that the volume of exports to the Community by the
applicant was low; and that a substantial change in the structure in the
Community industry had occurred as a result of the accession of Austria with
the consequent appearance of a new Community producer, which improved
the overall situation of the Community industry.

1

2

OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Regulation (EC) No 905/98 (OJ L 128,
30.4.1998, p. 18).
OJ N° L 15, 21.1.95, p. 11.

3

(3)

3.

(4)

(5)

(6)

(7)

On the basis of the above elements, the Commission considered that sufficient
evidence existed for the initiation of an interim review, in respect of dumping
and injury as well as Community interest.

In May 1997 the Commission, therefore, announced by a notice (hereafter
‘notice of initiation’) published in the Official Journal of
the European
Communities3 the initiation of an interim review with regard to the measures
on imports of furfuraldehyde originating in the PRC and commenced an
investigation.

Present investigation

The Commission officially advised the producers in the Community,
producers/exporters, importers and user industries known to be concerned and
their representative associations, as well as the representatives of the exporting
country. All parties directly concerned were given the opportunity to make
their views known in writing and to request a hearing within the time limit set
in the notice of initiation.

The Commission sought and verified all information it deemed necessary for
the purpose of a determination of dumping and the analysis of the situation of
the Community industry and carried out verification visits at the premises of
the following companies:

(a)

Community producers

–

–

Furfural Español, Spain

Lenzing AG, Austria

(b) User industry

–

Repsol Petroleo, Spain

The investigation of dumping covered the period from 1 May 1996 to 30 April
1997 (hereinafter called the investigation period or IP). The analysis of the
situation of the Community industry covered the period 1 January 1994 to 30
April 1997.

Owing to the numerous difficulties encountered in establishing findings in the
present investigation, notably the fact that simultaneously a proceeding before
the European Court of First Instance was on-going to clarify inter alia the
definition of the product under consideration, the investigation significantly
exceeded the period of twelve months recommended for investigations under
Article 11(5) of the Basic Regulation,

3

OJ N° C 156, 24.5.97, p. 3.

4

1.

(8)

2.

(9)

(10)

(11)

(12)

4

B. PRODUCT UNDER CONSIDERATION AND
LIKE PRODUCT

Product under consideration

The product under consideration is furfuraldehyde (also known as 2-
furaldehyde or furfural), a light yellow liquid with a characteristic pungent
odour, which is obtained by processing different types of agricultural waste.
Furfuraldehyde has two main applications; as a selective solvent in petroleum
refining for the production of lubricating oils and as raw material for
processing into furfural alcohol, which is used to make synthetic resin for
foundry moulds.

The investigation has shown that
produced principally from rice husks or maize loaf.

the product exported from the PRC is

Like product

Sinochem repeated its claim already made before the Court of first Instance4
that the furfuraldehyde imported from the PRC is not a like product to the
furfuraldehyde manufactured by the Community industry,
since their
applications are different, thus constituting two separate markets.

It has been claimed that one Community producer is the major supplier of
furfuraldehyde for use in petroleum refining, whereas Chinese product is sold
as a raw material for processing into furfural alcohol. It was therefore alleged
that no injury could possibly be suffered by the Community industry, since the
Chinese exporters are not competing on the same market.

Furfuraldehyde produced in the Community and that produced in the PRC has
the same physical characteristics and specifications and is not exclusively
dedicated to one particular application. This means that, in accordance with
the Judgement of the Court of First Instance on 29 January 1998, they are
interchangeable and can be used for either application. This claim was
therefore rejected and it was concluded that furfuraldehyde produced in PRC
is, within the meaning of Article 1(4) of the Basic Regulation, alike to that
produced and sold by the Community producers.

C. DUMPING

Sinochem, the sole cooperating Chinese exporting producer requested the
initiation of a review investigation on the grounds that the circumstances on
which existing anti-dumping measures were based, had changed significantly
since the original investigation was carried out.

It should be noted that as the PRC was considered a non-market economy
country in the original
changed
circumstances would require evidence that all, or at least a representative

a demonstration of

investigation,

Case T-97/95, Sinochem v. Council, concerning an application for annulment of Council
Regulation (EC) No 95/95 [1995] ECR II 85.

5

(13)

(14)

(15)

(16)

volume, of the product concerned exported from the PRC, was currently being
sold at a price which reflected a different level of dumping. Therefore, in order
to be able to assess the alleged change in circumstances an analysis of all, or at
least a representative volume, of the exports from the PRC should be possible
and should be carried out.

It was found in this case however, that the level of exports of the product
concerned reported by Sinochem, on the basis of available Eurostat statistics,
accounted for only a minor proportion of total Chinese exports during the IP.
Moreover, it is to be noted in this respect that it was not possible to establish
the total actual volume of Chinese exports, given indications that the above
the IP were
Eurostat statistics concerning imports from the PRC for
incomplete.

Firstly, imports from Thailand, a third country not concerned by the current
investigation, increased dramatically subsequent to the imposition of anti-
dumping duties on imports from the PRC. At the same time, Chinese export
statistics show a similar trend in exports from the PRC to Thailand. The above
developments are particularly relevant in the present case, as on the basis of
information available, it appears that there is no new production capacity in
Thailand that could explain such an increase in exports and, in any event, the
existing Thai capacity is not sufficient to produce the volume of the product
concerned declared as being exported to the Community in the IP.

Secondly, evidence has been made available to the Commission indicating that
the declared Thai origin of imports of the product concerned into the
Community during the IP is likely to be incorrect. There are grounds to
believe that a considerable part of the Thai declared goods is in reality of
Chinese origin. In these circumstances the Commission services consider that
the level of imports of the product concerned into the Community of Chinese
origin, as reported in Eurostat, is significantly understated with the result that
the minor share of Sinochem’s imports from the PRC understate the true
extend of the level of non-cooperation.

In the absence of any other reliable, data and in accordance with Article 18 of
the Basic Regulation, findings for dumping have been based on the best
information available. In the circumstances, it was considered that Eurostat
data on Chinese imports could not be used, as there were strong indications
that
these statistics were incomplete. The Eurostat data was therefore
disregarded for the purposes of establishing a dumping margin for the PRC.
The information provided by Sinochem could also not be used for the
purposes of establishing a country-wide dumping margin for the PRC as it was
not possible to establish the representativity of these imports. Therefore, the
investigation was
best
considered to be the dumping margin established in the previous investigation.

information available for

the purposes of

this

(17)

It was therefore concluded, as far as the dumping margin was concerned, that
the alleged significant change in circumstances since the findings of the
original investigation were not supported by the findings of the investigation.

6

(18) All interested parties have been provided with full and definitive disclosure of
the findings and have been given the opportunity to make written comments
and to be heard. No interested party came forward with any new information
and no new substantiated arguments have been made such as to change the
findings set out above.

(19)

The dumping margin established for the PRC in the context of the current
review investigation is therefore 62.6 %.

1.

Community industry

D. INJURY

(20) During the previous investigation, the Community industry was composed of
one producer. Following the accession of the three new Member States in
1995 another producer is now part of the Community industry. For the purpose
of establishing a coherent comparison and meaningful trends the data given
below includes information in respect of the second Community producer
from 1994.

The Commission, in the course of the present review investigation requested
and received information from the two producers in the Community. These
two producers account for 100% of total Community production and constitute
the Community industry within the meaning of Article 4(1) and 5(4) of the
Basic Regulation.

2.

Preliminary remark

(21) As in the case of dumping, the investigation sought to establish whether the
circumstances with regard to the situation of the Community industry had
changed to such an extent that would warrant a conclusion different to that
established during the previous investigation.

3.

Analysis of the situation of the Community market

3.1.

Community consumption

(22)

The pattern of apparent Community consumption,
is sales by the
Community industry on the Community market plus imports of all third
countries as obtained from Eurostat shows that consumption of furfuraldehyde
in the Community increased from 35,442 tonnes in 1994, to 46,474 in 1995,
with a peak to 49,694 tonnes in 1996. Consumption decreased to 40,127
tonnes during the IP, which represents an overall increase of 13.2% from 1994
to the IP

that

3.2.

Volume and prices of imports into the Community

(23) As regards the volume and prices of the imports, the investigation, in the first
instance, has used the data provided by Eurostat. However, given that there are
strong indications that the statistics are incomplete for the reasons explained
above, it was concluded that Eurostat could only provide a general guide to the
trend of the imports under consideration.

7

(24)

The volume of imports of the product concerned from the PRC decreased from
1,933 tonnes in 1994 to 413 tonnes in 1995, increased significantly to 5,650
tonnes in 1996 and remained at a similar level during the IP at 5,285 tonnes.
The investigation has revealed that the exceptionally low volume of imports
during 1995 is explained by a shortage of suitable agricultural waste in the
PRC due to a particularly bad harvest in that year.

(25)

(26)

(27)

Imports from the PRC, based on Eurostat, represented at least 15% of total
imports during the IP and show an increase of 173% over the period
considered.

The request for the review alleged that imports from the PRC had steadily
decreased between 1994 and 1995 and that, therefore, no injury was being
caused to the Community industry. However, the investigation has shown that,
although imports decreased from 1.933 tonnes in 1994 to 413 tonnes in 1995,
between 1993 and the IP imports increased significantly, to 5.285 tonnes. This
increase has continued after the IP. In view of the allegations made in the
request for a review with regard to the level of imports, data relating to the
volume of imports subsequent to the IP was examined. In this respect it is
noted that the volume of the imports under consideration in 1998 amounted to
10,502 tonnes, almost twice the recorded volume imported during the IP.

The market share of imports from the PRC shows a similar increasing trend
over the period considered, 5.5% in 1994, 0.9% in 1995; 11.4% in 1996 and
13.2% during the IP, a level similar to that reached in 1992 as established by
the previous investigation. On the basis of the above, it is concluded that
contrary to the review request submitted by Sinochem, the level of imports of
the product under consideration originating in the PRC is not low.

In terms of prices, their development at a CIF Community frontier level in
ECU/tonne, as derived from Eurostat, shows an increase from 500 in 1994 to
1,300 in 1995, a decrease to 946 in 1996 and a further decreased to 919 during
the IP. While the Chinese export prices increased by 83% over the period
considered, this increase was lower than that of the Community producers’,
which show an overall 90% increase.

The prices of Chinese exports started to decline in 1996, a trend that continued
during and after the IP. This price development from the end of 1995 onwards
is in stark contrast to the allegations made in the request for a review where it
was claimed that due to the high level of prices, the imports from the PRC
could not cause injury to the Community industry..

3.3.

Price undercutting

(28)

The investigation has revealed the continued existence of significant margins
of price undercutting, whether the prices of the Community industry are
compared with those of the sole co-operating Chinese exporter or with the
import prices as derived from Eurostat, the latter only providing a general
guide.

4.

Economic situation of the Community industry

8

4.1.

General

(29)

In the analysis of the economic situation of the Community industry account
has been taken of the fact that there are only two Community producers of the
product concerned and of the consequent need to protect the integrity of data
provided on a confidential basis. Confidential
information supplied is
therefore presented, where necessary, in indexed format, with the year 1994
used as the basis for establishing trends.

4.2.

Production

(30)

Production of the product concerned by Community industry decreased
continuously, from an index of 100 in 1994 to 91 in 1995, further decreased to
86 in 1996 and to 81 during the IP. This represents a decrease of 19% over the
period considered.

4.3.

Capacity and capacity utilisation

(31)

The production capacity of the Community industry remained stable during
the period considered.

A significant decrease in the rate of capacity utilisation by the Community
industry can be seen over the period considered. Capacity utilisation decreased
from 81% in 1994 to 74% in 1995 to 70% in 1996 and further decreased to
66% during the IP. This represents an overall decrease of fifteen percentage
points over the period.

4.4.

Sales volume of the Community industry

(32)

The volume of sales of the Community producers on the Community market
shows a slight increase between 1994 and 1995 and thereafter a decline. Sales
increased from an indexed level of 100 in 1994 to 106 in 1995, decreased to
86 in 1996 and to 80 during the IP. This represents a decrease of 20% in sales
volume over the period considered.

4.5.

Stocks

(33)

The level of stocks of furfuraldehyde held by the Community producers
decreased from an indexed level of 100 in 1994 to 16 in 1995, which
constitutes an exceptionally low level of stocks.

This low stock level is accounted for by the ‘temporary disappearance’ of
Chinese imports from the Community market which occurred during 1995 and
which allowed the Community producers to benefit from the situation. The
level of stocks held increased thereafter to an indexed level of 72 in 1996 and
to 90 during the IP.

4.6.

Price evolution

(34)

The selling prices of the Community industry increased sharply from an
indexed level of 100 in 1994 to 129 in 1995, to 216 in 1996 and thereafter
decreased to 194 during the IP.

9

These price increases coincided with sharp increases in the cost of raw
materials. Raw material costs accounted for 46% of variable cost in 1994,
increasing to 56% of variable cost during the IP.

4.7.

Profitability

(35)

The profitability of the Community industry during the period considered
shows (in indexed form) the following trend: 100 in 1994, 105 in 1995, 109 in
1996 and 103 during the IP.

4.8.

Employment

(36)

The employment
the Community industry remained stable
throughout the period considered, at an index of 100 in 1995 and decreasing
slightly to 97 during the IP.

levels of

4.9

Conclusion on the situation of the Community industry

(37) On the basis of an overall assessment of the main economic indicators of the
Community industry it was concluded that the allegations made in relation to
the situation of the Community industry in the request for the review
investigation are not confirmed by the results of the investigation. On the
contrary, the investigation has shown that the Community industry continues
to be in a weak situation.

5.

Factors having a bearing on the situation of the Community industry

5.1.

Impact of the imports concerned

(38)

(39)

There is a clear coincidence between the low prices and the increasing imports
from the PRC established during the period considered on the one hand, and
the weak situation of the Community industry on the other. This is evidenced
by the decrease in sales volume by the Community industry and a significant
deterioration in profitability during the IP.

The financial situation of the Community industry was poor at the beginning
of
the period considered and improved considerably thereafter. This
improvement coincided with the imposition of anti-dumping measures and the
temporary disappearance of the Chinese imports from the Community market
during 1995. However,
in
the re-emergence of
considerable quantities and at low prices, in particular since 1996, forced the
Community industry to reduce its prices, while sales volume also declined
under pressure from the dumped imports with a consequent negative effect of
the financial situation of the Community industry.

the Chinese imports

(40) Based on the above analysis there is clear evidence that the allegations stated
in the review request were without foundation and that injury established
during the previous investigation has not been removed and that there has been
no significant change in circumstances.

5.2.

Impact of other factors

10

(41) Other factors relevant to the situation of the Community market have also
been assessed. In particular, the Commission services examined the evolution
and impact of imports from other third countries and the effect of increases in
the price of raw materials.

(42) With regard to imports from other third countries not concerned by this review
is to be noted that although these imports represented a
the Community market, as during the previous
the volume of imports from other third countries shows a

investigation,
significant
investigation,
decreasing trend during the period considered.

share of

it

(43) With regard to imports from the Dominican Republic, reference is made to the
claim by a Chinese exporter that imports from the Dominican Republic always
held a dominant market position (over 60% market share), and that the prices
of these imports have always remained at a very low level. In this respect it
was examined whether there has been any change in the circumstances with
regard to the imports of the product concerned from the Dominican Republic.

In the first instance it is important to underline that the co-operating Chinese
exporter has acknowledged in the present investigation that the position of the
imports from the Dominican Republic has always been significant. It
is
equally important to stress that therefore any changes in respect of these
imports would have to be particularly significant to conclude that any such
changes concerning these imports would justify the termination of the present
review investigation without the continuation of measures. An examination of
the trend in volume of imports from the Dominican Republic reveals that the
level of imports increased from 24,429 tonnes in 1994 to 33,209 tonnes in
1995 and thereafter decreased to 29,765 tonnes in 1996 and to 24,331 tonnes
during the IP. The imports from the Dominican Republic (based on Eurostat)
represented 82.6% of total imports in 1994, 82.4% in 1995, 66.6% in 1996 and
68.6% during the IP.

(44) With regard to the development of the import prices of furfuraldehyde
originating in the Dominican Republic as derived from Eurostat, the weighted
average CIF Community frontier prices in ECU/tonne shows the following
development: 973 in 1993, 1,040 in 1994, 905 in 1995, 708 in 1996 and 599
during the IP.

(45) During the previous investigation it was established that the imports of the
product concerned originating in the Dominican Republic were not the cause
of the injurious situation of the Community industry.

(46)

It should be noted that the findings made by the Council in the previous
investigation as regards the significance of these imports as a factor relevant to
the causation of injury formed part of one of the pleas raised against
Regulation (EC) 95/95, which was rejected by the Court of First as mentioned
above5.

5

Case T-97/95, Sinochem v. Council, see footnote 4 above

11

The Court in issuing its findings stated that the Community Institutions did not
commit a manifest error of assessment in considering that the imports of
furfuraldehyde from the Dominican Republic,
to which no dumping was
attributed, were not such as to break the causal link between the dumped
furfuraldehyde from China and the injury suffered by the
imports of
Community industry.

(47)

In relation to the present review investigation it was considered that the
situation with regard to imports of the product concerned originating in the
Dominican Republic had not changed since the previous investigation to a
degree that could affect the findings with respect to the imports originating in
the PRC. Indeed, the volume of imports of these imports shows a declining
trend over the latter part of the period considered.

(48) With regard to imports from third countries other than the PRC and the
Dominican Republic, only imports originating in Thailand were of any
significant volume. It should be noted, however, that substantial doubt exists
as to the true origin of the product imported from Thailand as explained above.

(49)

It was found that
the volume of imports from any other third countries
increased from 2,705 tonnes in 1994 to 2,941 in 1995 and thereafter decreased
to a level of 1,759 tonnes during the IP. In addition, the prices of these imports
were found to be distinctly higher than the prices of the Chinese imports. It
was therefore considered that the result of the analysis of the prices and
volume of these imports, could not justify the termination of the present
review investigation without the continuation of measures.

5.3.

Conclusion

(50)

The investigation has shown that the Community industry has suffered a
decline in production and sales volume in the investigation period. This
occurred at a time when the imports from the PRC were made in large
volumes and at prices well below those of the Community producers.

12

E. LIKELY EFFECT OF THE REMOVAL OF THE ANTI-DUMPING
DUTIES

(51) According to Article 11(7) of the Basic Regulation, since the present review
was in progress at the end of the period of application of the measures
imposed by Council Regulation (EC) N°95/95, the review has also covered the
circumstances set out in Article 11(2) of the Basic Regulation.

(52)

investigation.

In the context of the investigation covering the circumstances set out in Article
11(2) of the Basic Regulation, it is particularly relevant to underline that no
producer of the product under consideration co-operated in the course of the
Indeed, while one party has co-operated in the
present
investigation, this party acted solely as an exporter. Consequently, it was not
possible to obtain any production related data, such as capacity and capacity
in the course of
utilisation which are considered as key indicators
investigations covering the circumstances set out in Article 11(2) of the Basic
Regulation.

(53) Bearing this in mind and as established above, despite the existence of
measures,
the investigation has shown that dumping continues to exist.
Furthermore, the Community industry was found still to be in a precarious
situation. Indeed, it has suffered a reduction in production, capacity utilisation,
sales volume and market share over the period considered. It is therefore
concluded that the current investigation have shown that the circumstances as
regards dumping and injury have not significantly changed.

(54) As to the likelihood of a continuation of injurious dumping should measures
be allowed to lapse, firstly, the investigation has shown that a significant
increase in production capacity in the PRC appears to have taken place during
the period considered. Indeed, while the request for the interim review
estimated the production capacity in the PRC at around 20,000 tonnes/year,
information gathered in the course of the current investigation shows that the
production of one Chinese producer alone amounted to 50,000 tonnes/year in
1998. Total capacity for the PRC on the basis of information collected in the
course of the present investigation is around 90.000 tonnes/year.

(55)

(56)

Secondly and as regards the prices of Chinese furfuraldehyde, information
gathered in the course of the investigation shows that the prices of Chinese
furfuraldehyde on several third country markets not subjected to anti-dumping
measures, during the IP, was significantly lower than that of the Chinese
imports into the Community.

Thirdly, there are grounds to believe that a considerable part of the Thai
declared furfuraldehyde during the IP is in reality of Chinese origin
underlining the potential which continues to exist for exports originating in the
PRC.

Taking all the above elements into consideration it is considered that, should
anti-dumping measures not be maintained, Chinese exports of furfuraldehyde
to the Community would continue to be made in considerable quantities and at
dumped prices, significantly below the prices of the Community industry. The

13

impact of the imports in question on the situation of

the
detrimental
Community industry would not only continue but would in all likelihood
increase, and thus cause further material injury to the Community industry.

F. COMMUNITY INTEREST

1.

General considerations

(57)

It was examined, on the basis of the information submitted, whether, despite
the findings of the present
investigation, compelling reasons exist which
would lead to the conclusion that it is not in the Community interest to
maintain measures in the present case.

In order to assess the impact of the measures in force, questionnaires were sent
requesting information on Community interest to all parties known to the
Commission at the time of initiation of the investigation.

(58)

in the previous investigation,

It should be recalled that
the adoption of
measures was considered not to be against the interest of 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 the assessment of any negative undue impact on the parties concerned
by the anti-dumping measures imposed.

2.

The Community furfuraldehyde industry

(59)

It has been found that, coinciding with the imposition of provisional anti-
dumping duties in July 1994 and the temporary disappearance of the Chinese
product from the Community market in 1995 the Community industry was
able to increase its prices thus improving its profitability from a poor situation
in 1994 to one considerably healthier in 1996. However, the high prices
realised by the Community producers during 1996 must be considered as
exceptional as they were the result of unusually high demand together with
what turned out to be only a temporary decline in the imports of the product
under consideration originating in the PRC. This was confirmed in the
subsequent period during which the prices could not be sustained due to the
presence of the Chinese imports on the Community market in considerable
quantities and at
low prices. Pressure from these imports forced the
Community industry to reduce its prices with a consequent negative effect on
the financial situation of the industry.

(60)

In the light of the above, should measures be continued, it is likely that the
Community industry could improve its financial situation. However, should
measures not be imposed, it is expected that the situation of the Community
industry would deteriorate leading,
to the closure of
production facilities and the consequent loss of employment.

in the long term,

14

3.

The user industry

(61)

The Community user industry is comprised of two major sectors, which
correspond to the two principal applications of furfuraldehyde i.e. as a
selective solvent in the petroleum industry and synthetic resin for foundry
moulds (chemical industry).

(62) Only one user in the petroleum industry co-operated in the investigation. The
information reported by this user on the impact of the price of furfuraldehyde
in the costs of
the previous
investigation, i.e. that furfuraldehyde when used as a catalyst has a negligible
incidence on production cost. The continued imposition of measures will
therefore have little or no impact on this sector of the user industry.

lubricating oil, confirms the findings of

(63) With regard to the second major application, no information was received
indicating that the findings of the previous investigation with respect to this
application had changed. In view of the above, it is concluded that the impact
of any measure on the situation of the chemical industry is not likely to be
significant.

4.

Conclusion on Community interest

(64)

In the light of the above it is concluded that no compelling reasons exist, on
grounds of Community interest, not to maintain the anti-dumping measures
currently in force.

H. ANTI-DUMPING MEASURES

(65) Based on the above, and taking into consideration that

it could not be
established that circumstances with regard to dumping and injury have
changed significantly as compared to the original investigation, it is concluded
that measures should be maintained in their present form and at their present
level.

The proposed anti-dumping duty, when related to the free at Community
frontier price and expressed in the form a specific duty amounts to 352
euro/tonne.

(66)

It is also considered that the duration of the reviewed measures should be
limited to four years. The numerous difficulties encountered in establishing the
findings in the present investigation, notably the fact that simultaneously a
proceeding before the European Court of First Instance was on-going to clarify
inter alia the definition of the product under consideration, has resulted in the
normal twelve-month period of Article 11(5) of the Basic Regulation for
completion of the investigation being significantly exceeded. In view of this
exceptional situation, which is unrelated to the considerable absence of co-
operation from Chinese exporters, it is appropriate to reduce the period of
duration of the measures.

15

HAS ADOPTED THIS REGULATION:

Article 1

1.

2.

3.

A definitive
of
is
2-furaldehyde (also known as furfuraldehyde or furfural) currently classified within
CN code 2932 12 00 and originating in the People’s Republic of China.

anti-dumping

imposed

imports

hereby

duty

on

The amount of duty applicable is 352 euro/tonne.

In instances where the customs value is reduced pursuant to the second paragraph of
Article 145 of Commission Regulation (EEC) No 2454/936, the amount of the
specific duty applicable, referred to in paragraph 2 above, will also be reduced on a
pro-rata basis.

The anti-dumping duty shall be imposed for a period of four years from the date of entry into
force of this Regulation.

Article2

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

Article 3

Article 4

This Regulation shall enter into force on the day 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 Brussels,

For the Council
The President

6

OJ L 253, 11.10.1993, p. 1. Regulation as last amended by Regulation (EC) No 502/99 (OJ L 65,
12.3.1999, p. 1 )

16