Council Regulation (EC) No 360/2000 of 14 February 2000 imposing a definitive anti-dumping duty on imports of dead-burned (sintered) magnesia originating in the People's Republic of China
Date: 2000-02-14
Institutions: Council of the European Union
Subjects: China, anti-dumping legislation, chemical salt, dumping, magnesium, originating product

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 360/2000

of 14 February 2000

imposing a definitive anti-dumping duty on imports of dead-burned (sintered) magnesia originating
in the People's Republic of China

THE COUNCIL OF THE EUROPEAN UNION,

(4)

Having regard to the Treaty establishing the European
Community,

Having regard to the Council Regulation (EC) No 384/96 of 22
December 1995 on protection against dumped imports from
countries not members of the European Community (1), and in
particular Articles 9 and 11(2) thereof,

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

Whereas:

A. PROCEDURE

(1)

(2)

(3)

1. Measures in force

In December 1993, definitive anti-dumping measures
were imposed by Council Regulation (EC) No 3386/
93 (2) in the form of a variable duty associated to a
minimum import price of ECU 120/tonne on imports of
dead-burned (sintered) magnesia
(hereinafter DBM)
originating in the People's Republic of China. The under-
lying investigation period covered the period from 1 July
1990 to 30 June 1991.

2. Request for a review

Following the publication of a notice of
impending
expiry of the anti-dumping measures in force on imports
of DBM originating in the People's Republic of China (3),
in June 1998, received a request to
the Commission,
review these measures pursuant
to Article 11(2) of
Council Regulation (EC) No 384/96 (hereinafter referred
to as the ‘Basic Regulation’).

The request was lodged by Eurometaux, acting on behalf
of Community producers (hereinafter referred to as the
‘applicant producers’) whose collective output of
the
product concerned constitutes 62 % of the Community
production of DBM.

(1) 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).

(2) OJ L 306, 11.12.1993, p. 16.
(3) OJ C 177, 10.6.1998, p. 5.

The request was based on the grounds that the expiry of
the measures would be likely to result in the recurrence
of dumping and injury to the Community industry.
Having determined, after consultation of the Advisory
Committee, that sufficient evidence existed for the initia-
tion of a review, the Commission initiated an invest-
igation (4) pursuant to Article 11(2) of the Basic Regula-
tion.

3. Investigation

the

advised

the government of

The Commission officially
applicant
the exporters and exporting
Community producers,
producers in the People's Republic of China (hereinafter
‘Chinese exporters’), the importers as well as their repres-
entative associations known to be concerned, and the
the exporting
representatives of
country, of the initiation of the review. The Commission
sent questionnaires to all these parties and to those who
made themselves known within the time limit set in the
notice of initiation. In addition, three known producers
in Turkey, which was chosen as an analogue country,
were advised of the initiation of the review and sent
questionnaires. The Commission also gave the parties
directly concerned the opportunity to make their views
known in writing and to request a hearing.

the Chinese

All the applicant Community producers replied to the
questionnaire. Neither
and
exporting producers nor the importers replied to the
questionnaire. However, one importer made its views
known in writing and another provided certain informa-
tion. Two users replied to the questionnaire and another
one provided certain information.

exporters

The Commission sought and verified all information it
deemed necessary for the purpose of a determination of
the likely continuation or recurrence of dumping and
injury and of the Community interest. Verification visits
were carried out at the premises of the following compa-
nies:

(5)

(6)

(7)

(4) OJ C 385, 11.12.1998, p. 7.

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(8)

(9)

(10)

(a) applicant Community producers:

— Grecian Magnesite SA, Athens, Greece,

— Magnesitas Navarras, Pamplona, Spain;

(b) producer in the analogue country:

— Kümas AS, Kütahya, Turkey;

(c) users in the Community:

— Sambre et Dyle, Belgium,

— Bet-Ker Oy, Finland.

recurrence of
The investigation of continuation or
dumping covered the period from 1 January 1998 to 31
December 1998 (hereinafter referred to as ‘IP’). The
examination of continuation or recurrence of
injury
covered the period from 1 January 1994 up to the end
of the IP (hereinafter referred to as ‘IIP’).

B. PRODUCT UNDER CONSIDERATION AND LIKE

PRODUCT

Community producers and the Chinese exporters have a
number of customers in common.

(11)

Therefore, DBM exported to the Community from the
People's Republic of China, DBM produced and sold by
the complaining Community industry in the Community
and the DBM produced and sold in the domestic market
in Turkey are considered to be like products within the
meaning of Article 1(4) of the Basic Regulation.

C. LIKELIHOOD OF CONTINUATION OF DUMPING

1. Preliminary remarks

(12)

In accordance with Article 11(2) of the Basic Regulation,
the purpose of this type of review with regard to the
dumping aspects is to determine whether or not, the
expiry of measures would lead to a continuation or
recurrence of dumping.

1. Product under consideration

2. Analogue country

, Al
3

The product under consideration is natural dead-burned
magnesia (DBM) which is processed from magnesite,
that
In
is naturally occurring magnesium carbonate.
order to produce DBM, magnesium carbonate has to be
mined, crushed, sorted and then burned in a kiln at
temperatures of 1 500 to 2 000 °C. The result is DBM
with a MgO (magnesium oxide) content ranging from
,
80 to 98 %. The main impurities in DBM are SiO2
Fe
(silicon oxide, iron oxide,
O
O
3
2
aluminium oxide, calcium oxide and boron oxide
respectively). DBM is mainly used in the refractory
industry to make formed and unformed refractories.
There are no significant differences in the basic chemical
and physical characteristics, the interchangeability and
the uses of the product under consideration. Therefore,
as in the previous investigation, all grades of DBM
should be considered to form one single product for the
purpose of this investigation.

, CaO and B
3

O
2

2

(13)

that

In establishing normal value, account was taken of the
fact
for this investigation the normal value for
imports from the People's Republic of China had to be
based on data from a market economy third country. In
this respect, Turkey was envisaged in the notice of initia-
tion of this review as an appropriate market economy
third country. An unrelated importer submitted that
Turkey was inappropriate on the ground that the access
to raw materials in Turkey was more difficult than in the
People's Republic of China: mines of magnesite in
Turkey do not enjoy the same natural advantages as in
the People's Republic of China so that under these
conditions the extracting and processing costs were
higher than in Chinese mines. The same importer, more-
over, claimed that the Turkish domestic market was too
small
the Chinese market.
However, this importer did not suggest any alternative
market economy third country.

to be representative for

2. Like product

(14)

It has been claimed by a user of the product under
consideration that DBM from the People's Republic of
China was not a like product by comparison to DBM
produced and sold in the Community. This user alleged
differences in certain characteristics, such as the quality.
In this respect the investigation has shown that magne-
site is extracted and processed into DBM in similar ways;
furthermore this latter is used to make the same range of
refractory products. While the methods of extraction,
the MgO content of the deposit and the production
process may vary, these differences do not have a signifi-
cant bearing on the end product and are not such as to
justify the claim that DBM originating in the People's
Republic of China and the Community produced DBM
are different in terms of chemical and physical character-
that both the
istics. This is confirmed by the fact

least

it was found that at

The Commission examined whether Turkey, which was
already used as market economy third country in the
previous investigation, was still a reasonable choice. In
particular
three Turkish
companies produced and sold DBM in Turkey in signifi-
cant quantities in competition with each other and with
exporters from other countries. The question of access
to raw materials being easier in the People's Republic of
China than in Turkey was addressed in the original
investigation and no new evidence was submitted to
change the conclusion that Turkey was an appropriate
market economy third country. In so far as such differ-
ences were shown to exist, these could be taken into
account by making the necessary adjustments in accord-
ance with Article 2(10) of the Basic Regulation (see
recital 19).
In the light of the above, a request for
cooperation was addressed to the three known Turkish
producers of which one accepted to cooperate.

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3. Normal value

(15)

In order to establish normal value it was first determined
for the only cooperating Turkish producer whether the
total volume of domestic sales of the product under
consideration was representative in accordance with
Article 2(2) of the basic Regulation, i.e. whether these
sales represented more than 5 % of the sales volume of
the product
concerned exported by the People's
Republic of China to the Community. The domestic
sales in question were found to be representative.

It was then established whether sufficient domestic sales
of the product under consideration had been made in
the ordinary course of trade in accordance with Article
2(4) of the Basic Regulation. As the volume of profitable
transactions was lower than 80 %, but not lower than
10 % of sales, normal value was established on the basis
of the weighted average prices actually paid for the
profitable sales of the product under consideration.

4. Export price

(16) Given the lack of cooperation from the Chinese expor-
ters, the export price had to be based on facts available
in accordance with Article 18 of the Basic Regulation.
Eurostat figures were chosen as the appropriate basis for
establishing the export price. The Eurostat average price
levels were confirmed by reference to information
obtained from the one cooperating importer.

(20)

Furthermore, as in the previous investigations it was
considered that the purity of the People's Republic of
China raw material
is higher than the Turkish raw
material and therefore an adjustment was made to take
account of such difference.

6. Dumping margin

(21)

The comparison of normal value and export price
showed the existence of dumping, the dumping margin
being equal to the amount by which normal value, so
to the
established, exceeded the price for export
Community. The
a
as
dumping margin found,
percentage of the cif Community-frontier import price,
was very substantial,

in the order of 50 %.

(22) On the grounds that dumping has taken place at very
significant levels throughout the IP, it is considered very
likely that dumping, at the very least at similar levels,
will continue if the measures are removed.

D. LIKELIHOOD OF RECURRENCE OF DUMPING

(23) Given the existence of high import volumes with very
high levels of dumping, it is not considered necessary to
examine whether dumping would recur should measures
be removed.

(17)

(18)

(19)

5. Comparison

The weighted average normal value was compared to
the weighted average export price of DBM, in accord-
ance with Article 2(11) of the Basic Regulation, both at
fob port producing country level.

E. DEFINITION OF THE COMMUNITY INDUSTRY

(24) During the IP there were four producers of DBM in the
Community. The investigation established that the two
applicant Community producers represented 62 % of the
Community production of DBM and, therefore, consti-
tute the Community industry within the meaning of
Article 4(1) and Article 5(4) of the Basic Regulation.

For the purpose of ensuring a fair comparison between
normal value and export price, account was taken for
differences in factors affecting price comparability in
accordance with Article 2(10) of the Basic Regulation. In
this respect, adjustments were made for inland and
ocean freight, insurance, handling, loading and ancillary
costs and credit costs.

(25)

In the previous investigation it was accepted that access
to raw materials was easier in the People's Republic of
China than in Turkey. With no information submitted
indicating any change in this respect an allowance has
been granted in order to take into account the difference
in extraction rates between the two countries. It has
been decided to apply the same adjustment
to the
normal value as was applied In the previous invest-
igation,
the normal value corre-
sponding to 20 % of the extraction cost found for the
cooperating Turkish producer.

i.e. a reduction of

It should be noted that two out of the four Community
producers representing the Community industry in the
previous investigation ceased their activity in 1991, i.e.
in the course of the previous investigation. The two
producers were Magnomin SA, Thessaloniki, Greece, and
Financial Mining,
Industrial & Shipping Corporation
(Fimisco), Athens, Greece. Fimisco was liquidated in
1992 and its assets were sold in 1996 to a refractory
producer, Viomagn, Greece. Although Viomagn was not
among the applicants of the present investigation, it is
supporting it. As regards Magnomin, it has definitively
ceased operations since its mining licence expired in
1997.

(26) As concerns the non-cooperating (but non-opposing)
producer Veitsch-Radex, Austria, the investigation has
shown that it is a completely downstream integrated
producer, using its output of DBM exclusively for
internal consumption.

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F. ANALYSIS OF THE SITUATION IN THE COMMUNITY

MARKET

1. Consumption in the Community market

(27)

The apparent Community consumption of DBM was
established on the basis of:

— the sales volumes of the Community producers in

the Community,

— the imports into the Community of DBM from the

People's Republic of China,

— the imports into the Community of DBM from all

other third countries.

(28) On this basis, during the IIP, consumption decreased by
2 %, from around 497 000 tonnes in 1994 to around
486 000 tonnes in the IP. In particular, after a peak in
1995 (+ 20 % as compared to 1994), demand continu-
ously decreased reaching its lowest level in 1997. The
market recovered to a considerable extent during the IP,
where consumption increased by 13 % compared to
1997.

2. Imports from the country concerned

(29)

a) Import volume and market share of the imports concerned

in the IIP

The import volume of DBM originating in the People's
Republic of China during the IIP did not follow the
trend of the consumption. Between 1994 and the IP,
Chinese imports increased by around 10 %, from around
238 000 tonnes
to around 261 000 tonnes, while
Community consumption decreased by 2 %. Moreover,
between 1997 and the IP,
the imports concerned
increased by 30 %, whilst consumption increased only
by 13 %. It is to be noted that the volume imported
during the IP (260 967 tonnes) is significantly higher
the imports found
than the corresponding level of
during the IP in the previous investigation (176 000
tonnes).

(30)

The market share of imports Originating in the People's
Republic of China increased from 48 % in 1994 to 54 %
in the IP. It is worth noting that during the IP in the
previous investigation, the Chinese market share was
established at a level corresponding to index 85 as
compared to a level of 100 in 1994.

b) Price evolution and price behaviour of the imports of the

product concerned

i) P r i c e e v o l u t i o n o f

t h e i m p o r t s c o n c e r n e d

(31)

In view of the absence of any cooperation from Chinese
exporters, the price evolution of the imports from the
People's Republic of China during the IIP has been estab-
lished according to Eurostat data, on the basis of the
average cif
import prices. These prices increased by
around 10 % during the IIP. In particular, between 1994
and 1995, i.e. immediately after the imposition of the

(32)

(33)

definitive anti-dumping measures, prices of DBM origin-
ating in the People's Republic of China
in the
Community increased by about 16 %. However, since
1996 these prices
slightly but
constantly, each year. Prices during the IIP were always
above the minimum price. It should be noted that the
average cif import price during the investigation period
of the previous investigation was around 90 ECU/tonne.

started to decrease,

The price evolution of the imports originating in the
People's Republic of China should be seen in the light of
two main elements found during the investigation.
Firstly, Eurostat data do not seem to be necessarily accu-
import prices verified during the invest-
rate. Indeed,
igation on the basis of real transactions were always
lower than the Eurostat figures. However, given that the
imports thus verified could not be considered repres-
entative in terms of volume and value, Eurostat figures
have been used to establish the price trend of Chinese
imports.

Secondly,
the product mix exported by the Chinese
exporters into the Community changed during the IIP as
compared to the previous investigation. On the basis of
data provided by the interested parties who cooperated
or provided the Commission services with information,
it was found that, after the imposition of the measures,
the product concerned sold in the Community by the
Chinese exporters always contained 90 % or more of
MgO. By comparison, during the investigation period of
the previous investigation, imports of DBM originating
in the People's Republic of China with an MgO content
lower than 90 % represented more than 50 % of total
imports, i.e. the major part represented DBM of lower
quality and was therefore less expensive, the minimum
price having accordingly been calculated on this lower
price basis. This indicates therefore that the price rise
during the IIP can be explained by the fact that the
Chinese exporters were selling a larger percentage of
higher quality DBM.

(34)

It should also be noted that prices of DBM originating in
the People's Republic of China in the Community during
the IIP were always lower than the prices of both the
Community producers (see recital 35) and other third
countries (see recital 59).

ii) P r i c e b e h a v i o u r o f e x p o r t e r s

(35)

In order to examine the Chinese exporters' price behav-
iour in relation to the one of the Community industry
during the IP, and given the lack of cooperation of the
Chinese exporters, the Commission services used two
methods. Firstly, on the basis of Eurostat, the cif export
price was compared to the applicant Community produ-
cers' weighted average price, adjusted to ex-works level,
regardless of any specific MgO content. On this basis,
the prices of DBM originating in the People's Republic of
China were found to be lower
the
Community industry.

than those of

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Secondly, and in view of the change in the product mix
mentioned above (recital 33), it appeared more mean-
ingful, in order to have a realistic picture of the market
behaviour of the Chinese exporters, to compare the cif
export price with the applicant Community producers'
price of DBM with an MgO content equal to or higher
than 90 %. On the basis of this approach, the sales
prices of the Chinese exporters were indeed significantly
lower than those of the Community industry.

The development of prices of the DBM should also be
considered in the light of the following. On the basis of
information provided by one unrelated importer repre-
senting 13 % and 11 % of the total imports from the
People's Republic of China Into the Community in 1995
and 1996, respectively,
the price increase found for
around half of the volumes imported by comparison to
the original investigation period, appeared to be artifi-
cial, as shown by the following. This importer purchased
DBM from Chinese exporters at a price lower than the
minimum price of ECU 120/tonne. For
the great
majority of these imports, customs clearance was then
undertaken by the clients of the unrelated importer (i.e.
actual users of the product) on the basis of the resale
price paid to the latter. In this resale price the unrelated
importer included a certain margin in order to cover its
expenses incurred in the Community and to earn a
profit. By this operation, the gap between the purchase
price paid to the Chinese exporter and the minimum
price was filled. This operation entailed that the final
price declared to the customs authorities by the client of
the importer was higher than the minimum price, but
the mechanism used to arrive at this final price also
reveals
that Chinese DBM could be sold in the
Community at a price lower than ECU 120/tonne. In
this respect it should also be taken into account that the
original minimum price was determined at the level of
the importers/traders purchase prices and not at the
level of the final users purchase prices. The commercial
practice described above seems, therefore, to affect the
actual effectiveness of the measures. This commercial
practice could also explain why Eurostat data showed
figures higher than the actual prices verified during the
investigation.

significant quantity (around 20 %) of DBM with an MgO
content equal to or higher than 90 %.

b) Production capacity

(40) During the

IIP,

the production capacity of

the

Community industry remained stable.

c) Capacity utilisation

(41)

Capacity utilisation decreased by 34 % between 1994
and the IP.

(42)

(43)

d) Sales volume

The total sales volume of
the Community industry
decreased by around 36 % between 1994 and the IP. It
should be pointed out that, whilst in 1995, after the
imposition of the measures, the Community industry
was able to benefit
from the increasing demand
(expanding its sales volume by around 3 %), in the IP, in
spite of an increasing consumption of 13 % (see recital
28), it failed to follow this trend and its sales volume
decreased by around 23 %.

e) Market share

The Community industry's share on the Community
market decreased by 37 % during the IIP. In this respect
it should be noted that, while market shares held by the
Community industry in the previous investigation fell
from 30 % in 1988 to 15 % in the investigation period
of the previous investigation, the negative trend slowed
down after the imposition of the presently reviewed
anti-dumping measures.

f) Price development

3. Economic situation of the Community industry

(44)

a) Production

shown that

investigation has

The
applicant
Community producers' average selling ex-works price of
DBM rose by 23 % over the whole IIP. However, despite
this increase, the Community industry was prevented
from raising its prices to a profitable level, as described
below (recital 46), and was only able to operate at a loss.

the

(36)

(37)

(38)

industry's

production

The Community
of DBM
decreased by around 33 % between 1994 and the IP. It
should be noted that the decrease of the production was
particularly strong between 1995 and 1996, coinciding
with the contraction of the consumption of DBM in the
Community market.

(39)

investigation established that

The
the Community
industry was forced, during the IIP, to change its product
mix and to focus its production more on the lower
grades of DBM. Nevertheless, it continued to produce a

(45)

Indeed,

The price development has to be analysed in the light of
the above mentioned change in the product mix, which
occurred during the IIP (see recital 39).
the
Community industry progressively concentrated its
production and sales on DBM of lower grades, which are
cheaper to produce and thus can be sold at lower prices,
to the detriment of the higher grades, which could be
more profitable, but with which the Community
industry could not compete against the Chinese price
pressure. Even though overall prices have been rising, it
was therefore not possible for the Community industry
to reach a satisfactory price level.

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g) Profitability

(53)

(46)

The profitability of the Community industry, expressed
as a percentage of net sales, although improving in
absolute terms from (– 100) in 1994 to (– 28) in the IP,
on indexed basis, remained negative during almost the
whole IIP.

h) Employment

(47)

Employment in the Community industry decreased by
31 % during the IIP.

i) Investments

(48)

The applicant Community producers increased their rate
of investment by around 78 % during the IIP. Although
these figures are not exclusively related to the product
concerned, since it was not possible to allocate the
investments to DBM only, it was found that the invest-
ments were mostly destined to further rationalise the
production process of DBM.

(54)

(55)

In line with the measures imposed, Chinese export
prices increased during the current IIP and the price
situation of
the Community industry appeared to
develop also more positively. However, as explained in
detail above, not too much emphasis should be placed
on this price increase. This development of prices
should, however, also be seen in the light of, firstly, the
shift from low grades to the more costly higher grades
of MgO undertaken by the Chinese exporters (see recital
33). Secondly,
it should be borne in mind that this
change in product mix pushed the Community industry
to progressively reduce sales volumes and production of
the higher grades of DBM. As explained in recital 36, the
price pressure of the imports concerned came to bear in
particular on the higher grades of DBM, against which
the Community industry was not able to compete (see
also recital 45).

In addition, it seems appropriate to mention the impact
of the Chinese license system introduced in 1994, which
most likely contributed to the increase of the Chinese
prices world-wide (see recitals 73, 74 and 75 for details).

The investigation has further shown that anti-dumping
duties have been paid during the IP on at least 7 % of
total Chinese
concerned,
meaning that these exports were made at prices below
the minimum price.

the product

imports of

j) Conclusion

(49) After the imposition of the anti-dumping measures in
1993, and during the whole IIP, the situation of the
Community industry improved as regards some of the
economic indicators examined. In particular, its average
sales price increased and its
losses were reduced.
Continued efforts to rationalise the production process
and new investments were made, showing an industry
that is still viable and determined to remain in opera-
tion.

(50) However, the other economic indicators did not develop
as favourably during the IIP. Indeed, the Community
industry was not able to increase production, capacity
utilisation, sales volumes, market shares and employ-
ment to a satisfactory level.

(51)

It is therefore concluded that the Community industry is
still

in a difficult situation.

4. Impact of the imports concerned

(52)

to sell

such as

exporters

the Chinese

investigation was not

The development of the market after the imposition of
the measures reveals that the minimum price established
to
in the previous
discourage
in the
Community market. Indeed, market shares of Chinese
exporters increased during the IIP and their presence in
the Community market became, as a whole, stronger
than during the investigation period of the previous
investigation. In addition,
it should be noted that the
Community industry has lost market share to almost the
same extent as the People's Republic of China has gained
it.

5. Import volumes and import prices from other

third countries

a) Import volume and market share

(56)

The import volume of DBM from other third countries
decreased in the IIP from about 178 500 tonnes in 1994
to around 166 500 tonnes in the IP. This is equivalent
to a decrease of about 7 %.

(57) Market shares of the imports from other third countries
decreased by two percentage points between 1994 and
the IP. This decrease is even more marked between 1995
and the IP, even though there was a preceding increase
between 1994 and 1995, exceeding the trend of the
Community consumption (if the imports would follow
the Community consumption the market shares would
remain stable).

(58)

The above shows that, during the IIP, the Chinese expor-
ters were able to consolidate their position in the
Community
the
Community industry (see recital 42), but also of other
third countries.

to the detriment not only of

b) Sales prices of imports from third countries

(59) According to Eurostat, the average sales price of imports
from other third countries decreased by 9 % in the IIP.
However, the unit price was on average always higher
than for both imports originating in the People's
Republic of China and sales of the Community industry.

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(60) On the basis of the above, it is considered that imports
of the product concerned from other third countries did
not have any significant impact on the economic situa-
tion of the Community industry.

6. Conclusion

(61)

In spite of the measures in force, due to the continued
the
price pressure exerted by the Chinese exporters,
Community industry remained in a difficult economic
situation. This price pressure prevented the Community
industry from recovering from the effects of
the
previous and ongoing dumping practices. In this respect
it should be noted that already two out of the four
representing the Community
Community producers
industry in the previous
investigation ceased their
activity during the previous proceeding, entailing a
significant loss of employment. Nevertheless, the invest-
igation established that, as shown by their investments,
the remaining Community industry is still viable and not
ready to abandon this segment of production.

G. LIKELIHOOD OF RECURRENCE OF INJURY

1. Analysis of the situation of the People's Republic

of China

(62)

In order to assess the likely effect of the expiry of the
measures in force, and taking into account that the
Community industry is still in a difficult economic situa-
tion, the following elements were considered:

a) Reserves, production capacity,

capacity utilisation and

stocks

(63)

In the absence of cooperation from the Chinese expor-
ters, the analysis was based on information provided in
the complaint as well as information obtained from
specialised magazines and market research studies.

(64) As concerns reserves of magnesite, according to the
above-mentioned sources,
the People's Republic of
China has the largest reserve found for an individual
the world-wide
country, accounting for 17,3 % of
reserves.

(65) According to the same sources, production capacity of
magnesia in the People's Republic of China during the
last years was at approximately 2 500 000 tonnes/year,
out of which 1 700 000 tonnes of DBM. This means
that the People's Republic of China accounts for 28 % of
the world-wide production capacity of DBM.

(66) As concerns capacity utilisation and stocks, no reliable
the non

information could be obtained in view of
cooperation of any Chinese interested parties.

(67)

Based on specialised publications and magazines avail-
able and given the sheer size of the raw material reserves
and production capacity,
it has been concluded that
considerable potential exists for Chinese exporters to
raise their production and export volumes
to the
Community in the future.

(68)

(69)

(70)

(71)

(72)

(73)

b) Chinese exports to third countries

The Commission services also analysed, on the basis of
the United States Department of Commerce's trade stat-
istics, exports of DBM originating in the People's
Republic of China to the United States of America, one
of the most important export markets for the People's
Republic of China. These imports accounted for 77 % of
the world-wide imports of DBM into the United States
of America in 1998.

The total volume of exports originating in the People's
Republic of China to the United States of America went
up from around 263 000 tonnes in 1994 to around
292 000 tonnes in 1998, an increase of 11 %, and were
at a peak of more than 320 000 tonnes in 1995. As to
their prices, cif sales prices increased from a level of ECU
88/tonne in 1994 to ECU 117/tonne in the IP, i.e. an
increase of 33 %.

The investigation has shown an analogy in the Chinese
behaviour in the United States of America and in the
Community. In both markets, Chinese prices were in
general among the lowest by comparison to imports
from all other third countries, and this during the whole
of the IIP.

The abovementioned price of ECU 117/tonne in the IP is
23 % lower than the Chinese price charged in the
Community during the same period and 2,5 % below
the minimum price established by the preceding meas-
ures for the Community.

From the above, it can be concluded that, in the absence
of measures, Chinese prices could potentially fall at least
to levels comparable to the prices for imports into the
United States of America.

c) The Chinese licence system

In April 1994, the MOFTEC (Ministry of Foreign Trade
and Economic Cooperation) and the CCCMMC (China
Chamber of Commerce of Metals, Minerals and Chemi-
cals Importers and Exporters)
introduced an export
licence system for all exports of certain minerals, which
is equivalent to an export quota and tax system. All
different sorts of magnesia, including DBM, have been
covered by this licence system. In 1997, 18 Chinese
companies received a licence to export magnesia up to a
maximum volume of 2 Mio tonnes within the yearly
licence and tonnage bidding round. The licence fee
amounted to USD 30/tonne (ECU 26,5/tonne) in 1997
and increased to USD 40/tonne (ECU 36,6/tonne)
in
1998. This implies that, if the minimum price of ECU
120/tonne is met, the actual export price of DBM to the
Community without licence fee would be at ECU 83,4/
tonne. According to Eurometaux, the Liaoning Province,
where most of the producers are situated, in 1995 intro-
duced a local export tax which in 1997 amounted to
USD 15,7/tonne (ECU 14,4/tonne). Consequently, the
actual sales price in the Community, when deducting the
local tax as well, would be as low as ECU 69,4/tonne.

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18. 2. 2000

Eurometaux claims that the Chinese licence system for
magnesite and thus DBM could be abolished soon and
has argued that exports of DBM originating in the
People's Republic of China would, as a consequence of
the abolition,
increase in volume and considerably
decrease in price, should the anti-dumping measures not
be continued.

In this respect it should be noted that the analysis of the
licence system carried out, given the significant amount
of licence fees, underlines the potential of the Chinese
exporters to sell DBM in the Community at very low
prices.

that

the fact

in view of

the system
Furthermore,
described above is run autonomously by the government
of the exporting country, it is considered that its exis-
tence or abolition cannot have any influence on the
decision of the Community institutions whether or not
injurious dumping would recur in the absence of meas-
ures.

(74)

(75)

2. Conclusion on the recurrence of injury

(76)

In view of the above, namely of the following factors:

— despite the measures

in force,

the Community

industry is still

in a difficult economic situation;

— Chinese imports still hold an exceptionally strong
position on the Community market and are made at
dumped and low prices;

— the prices which Chinese exporters might charge in
the absence of anti-dumping measures are potentially
very low if one considers, on the one hand, the
prices exclusive of
resulting from the
the fees
Chinese license system, and, on the other hand, the
in the United States market,
Chinese behaviour
where prices were
than in the
Community;

always

lower

— the large raw material reserves and the large Chinese
capacities to exploit the raw material give an indica-
tion that the Chinese exporters have the potential to
raise their production and/or export volumes;

— even though a minimum price was in force,

in
several cases transactions were made below the
minimum price,
thus giving an indication that
Chinese exporters are fully capable of lowering their
prices;

On this basis it is concluded that, should the measures
be repealed, there is a likelihood of recurrence of injury.

H. COMMUNITY INTEREST

various

interests

the
the
Community industry, the importers and traders as well
as the users of the product concerned.

those of

involved,

i.e.

(78)

(79)

the measures,

In order to assess the likely impact of a continuation or
the Commission
non-continuation of
requested information from all
interested parties
mentioned above. The Commission sent questionnaires
the
to twelve importers and seventy-eight users of
product under consideration. No importers replied to
the questionnaires, even though two of them provided
some information. As to the users, two of them replied
to the questionnaires and the data were verified.

the present

It should be recalled that, in the previous investigation,
the adoption of measures was considered not to be
against the interest of the Community. Furthermore, it
should be noted that
investigation is a
review, thus analysing a situation in which anti-dumping
measures are already in place. Consequently, the timing
and nature of the present investigation allows the assess-
ment of any undue negative impact the current anti-
dumping measures may have had in the past on the
parties concerned.

(80) On this basis it was examined, whether, despite the
conclusions on continuation and recurrence of injurious
dumping compelling reasons exist which would lead to
the conclusion that it is not in the Community interest
to maintain measures in this particular case.

2. Interests of the Community industry

(81)

It
is considered that without maintaining the anti-
dumping measures established in the previous invest-
igation, the injurious dumping is likely to recur and the
situation of the Community industry, already fragile, will
further deteriorate.

(82) As shown above, the Community industry has been
affected by the low priced imports of DBM originating
in the People's Republic of China during the IIP. It is
the anti-
therefore considered that
dumping measures under review, that is to re-establish
fair competition in the Community market between the
Community industry and the Chinese producers, has not
been fully met.

the objective of

1. Introduction

(77) According to Article 21 of the Basic Regulation, it was
examined whether a prolongation of the existing anti-
dumping measures would be against the interest of the
Community as a whole. The determination of
the
Community interest was based on an appreciation of all

(83) Although the Community industry has been making
considerable efforts to improve its productivity in recent
years, in an attempt to lower its costs of production and
to enhance its competitiveness, it has not been able to
increase its profit to a reasonable level during the IIP
and, moreover, employment strongly declined. Further-
more, two Community producers in Greece who took
part in the previous investigation ceased their activity.

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Official Journal of the European Communities

L 46/9

(84) However, the investigation likewise established that the
Community industry is viable, this being confirmed in
particular by its consistent rate of investment during the
the efforts undertaken in order to
IIP. Furthermore,
rationalise
the
Community industry is determined not to abandon this
segment of production.

the production process

show that

(85) Given the above,

it appears necessary to prolong the
existing measures in order to ward off the adverse effects
of dumped imports which could endanger the existence
of the Community industry and consequently a number
of
the
It has also to be considered that
Community industry disappears, there will also be a
negative impact on the downstream industry, since the
latter will
significantly
reduced.

see its choice of

suppliers

jobs.

if

3. Interests of importers

(86) None of the unrelated importers replied to the question-
naire sent by the Commission. The lack of cooperation
is in itself an indication that this sector did not suffer
any substantial negative effect on its economic situation
as a result of the measures. This is confirmed by the fact
the importers continued to trade the product
that
concerned, even raising the volume imported during the
IIP.

(87)

(88)

It is therefore concluded that the economic situation of
the importers of the product concerned has not been
negatively influenced by the imposition of
the anti-
dumping measures currently in force. It is therefore also
unlikely that a continuation of the measures would lead
to a deterioration of their economic situation in the
future.

4. Interests of users

The users of the product under consideration, i.e. the
downstream industry, are the refractories' producers.
Only two out of the seventy-eight users to which the
questionnaire was sent by the Commission replied. In
the same way as for the importers, the low level of
cooperation is in itself an indication that this sector did
not suffer any substantial negative effect on its economic
situation as a result of the measures. Although the repre-
sentativity of the two cooperating companies for the
downstream industry is limited, since one purchased
only around 2 % of the total DBM imported from the
People's Republic of China within the IIP, and the other
one purchased, beginning in 1997, less than 1 %, the
impact of the measures in force on their situation was
evaluated.

(89)

In this respect, the investigation established that the
users continued, and in one case even started, to import
DBM originating from the People's Republic of China in
spite of the measures in force. These measures therefore
did not constitute a deterrent for the producers of refrac-

tories leading them to change their sources of supply.
While DBM constitutes a significant part of the cost of
refractories, the increase of the Chinese import price was
apparently not so high as to constitute any inconveni-
ence.

(90)

It is worth noting that the DBM import price of the user
located in Finland almost doubled after Finland joined
the European Community. Nevertheless, it continued to
purchase DBM originating in the People's Republic of
China. Two conclusions can be drawn from this:

(a) the measures have been effective as to a price rise of
the imports originating in the People's Republic of
China;

(b) the resulting price, compared to the price charged in
the rest of the Community, continued to be compet-
itive.

(91) On the basis of the above, it can be ruled out that the
anti-dumping measures had any negative significant
influence on the cost situation and on the profitability of
the users of the product under consideration.

(92) As shown above (recitals 29 and 30), the result of the
anti-dumping measures in force has not been to close
the Community market to imports, but rather to combat
the unfair trade practices and to remedy to some extent
the distorting effects of dumped imports.
Indeed, as
mentioned above, imports from the People's Republic of
China increased by 10 %, during the IIP.

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 deteriora-
tion of the situation of the users.

5. Conclusion on Community interest

Leaving

the Community market.

(93) On the one hand, a continuation of the anti-dumping
measures in force is likely to result in a stable price for
DBM in
the
Community industry without any protection against the
effects of dumped imports would not only weaken its
position, but could even lead to its disappearance. On
the other hand, in the past, the existing measures appear
not to have had any significant negative effects on the
economic situation of users and importers. Any price
increase, if at all, for users resulting from the imposition
of anti-dumping measures, on the basis of the informa-
tion collected during the current investigation, does not
appear to be disproportionate when compared to the
benefit
to the Community industry achieved by the
removal of the trade distortion caused by the dumped
imports.

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Official Journal of the European Communities

18. 2. 2000

(94)

Therefore, it is concluded that there are no compelling
reasons against the prolongation of the existing anti-
dumping measures.

HAS ADOPTED THIS REGULATION:

Article 1

I. ANTI-DUMPING MEASURES

(95) All parties concerned were informed of the essential
facts and considerations on the basis of which the main-
tenance of the existing measures is based. They were
granted a period within which to make representations
subsequent to disclosures. No comments were received.

(96)

It follows from the above that, as provided for by Article
11(2) of the Basic Regulation, the variable anti-dumping
duties in combination with a minimum price of ECU
120/tonne on imports of DBM originating in the
People's Republic of China imposed by Regulation (EC)
No 3386/93 should be maintained,

1.
A definitive anti-dumping duty is hereby imposed on
imports of dead-burned magnesia falling within CN code
2519 90 30 originating in the People's Republic of China.

2.
The amount of the duty shall be the difference between
EUR 120 per tonne and the net, free-at-Community-frontier
if the latter price is lower.
price before customs clearance,

Unless otherwise specified,

3.
concerning duties and other customs practices shall apply.

the provisions

in force

Article 2

This Regulation shall enter into force on the day following that
of its publication in the Official Journal of the European Communi-
ties.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 14 February 2000.

For the Council

The President

J. GAMA