Commission Regulation (EC) No 1629/2000 of 25 July 2000 imposing a provisional anti-dumping duty on imports of ammonium nitrate originating in Poland and Ukraine
Date: 2000-07-25
Institutions: European Commission
Subjects: Poland, Ukraine, anti-dumping duty, chemical salt, import

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COMMISSION REGULATION (EC) No 1629/2000

of 25 July 2000

imposing a provisional anti-dumping duty on imports of ammonium nitrate originating in Poland
and Ukraine

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

out verifications at the premises of the following compa-
nies:

Having regard to the Treaty establishing the European
Community,

(a) Complainant Community producers

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 Community (1), as last
amended by Regulation (EC) No 905/98 (2), and in particular
Article 7 thereof,

After consulting the Advisory Committee,

Whereas:

(1)

(2)

(3)

(4)

(5)

A. PROCEDURE

On 29 October 1999, the Commission announced, by a
notice published in the Official Journal of the European
Communities (3) (the ‘notice of initiation’), the initiation of
an anti-dumping proceeding with regard to imports into
the Community of ammonium nitrate (AN), originating
in Lithuania, Poland and Ukraine.

The proceeding was initiated following a complaint
lodged by the European Fertiliser Manufacturers Associa-
tion (EFMA) on behalf of companies representing a
major proportion of total Community production. The
the
complaint contained evidence of dumping of
product concerned and of material injury resulting there-
from, which was considered sufficient
to justify the
initiation of a proceeding.

The Commission officially advised the complainant
Community producers, exporting producers and impor-
ters, suppliers and users known to be concerned, as well
as associations concerned and representatives of
the
exporting countries, and the EU-Lithuania and EU-
the
Poland Association Councils of
proceeding. Interested parties were given an opportunity
to make their views known in writing and to request a
hearing within the time limit set in the notice of initia-
tion.

the opening of

The Commission sent questionnaires
to all parties
known to be concerned. Replies were received from ten
complainant Community producers,
exporting
producers, one exporter, one importers' association and
seven importers in the Community (of which three are
related to the exporters).

five

(6)

The Commission sought and verified all the information
deemed necessary for a provisional determination of
dumping, injury and the Community interest and carried

(1) OJ L 56, 6.3.1996, p. 1.
(2) OJ L 128, 30.4.1998, p. 18.
(3) OJ C 311, 29.10.1999, p. 3.

1. BASF AG, Limburgerhof, Germany

2. Fertiberia SA, Madrid, Spain

3. Grande Paroisse SA, Paris, France

4. Hydro Agri France, Nanterre, France

5. Hydro Agri UK Ltd,

Immingham, United

Kingdom

6. Hydro Agri Sluiskil BV, Sluiskil, the Netherlands

7. Kemira Ince Ltd, Chester, United Kingdom

8. Kemira SA, Wavre, Belgium

9. Sefanitro SA, Barakaldo, Spain

10. Terra Nitrogen (UK) Ltd, Stockton on Tees,

United Kingdom

(b) Exporters/exporting

producers

from the

countries

concerned

1. JSC Achema, Jonava, Lithuania

2. Anwil SA, Wloclawek, Poland

3. CIECH SA, Warsaw, Poland

4. Zaklady Azotowe Pulawy SA, Pulawy, Poland

(c) Importers

(a) r e l a t e d t o e x p o r t i n g p r o d u c e r s

1. Litfert SARL, St Malo, France

2. Scandinavian Chemicals and Fertilisers AB,

Malmö, Sweden

3. Daltrade Ltd, London, United Kingdom

(b) u n r e l a t e d t o e x p o r t i n g p r o d u c e r s

1. Helm Düngemittel

GmbH,

Hamburg,

Germany

2. UNCAA, Paris, France

The investigation of dumping and injury covered the
period from 1 April 1998 to 30 September 1999 (‘the
investigation period’ or ‘IP’). This period is longer than
one year in order to cover two agricultural seasons and
thereby obtain a more representative picture of
the
market, and in order to include possible changes in the
market that occurred after the imposition of a specific
duty in 1998, reinforcing the anti-dumping measures
concerning imports of AN originating in Russia which
had been imposed in 1995. The examination of trends
relevant for the injury assessment covered the period
from 1995 to the end of the IP.

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(7)

(8)

B. PRODUCT CONCERNED AND LIKE PRODUCT

1. Product concerned

The product concerned is ammonium nitrate, a solid
nitrogen fertiliser commonly used in agriculture. It is
manufactured from ammonia and nitric acid and the
nitrogen content exceeds 28 % by weight. The product
imported into the Community is usually sold in bags of
50 kg and 500 kg. The product concerned falls within
CN codes 3102 30 90 (ammonium nitrate other than in
aqueous
and 3102 40 90 (mixtures of
ammonium nitrate with calcium carbonate or other
inorganic non-fertilising substances, with a nitrogen
content exceeding 28 % by weight).

solutions)

2. Like product

Ammonium nitrate is a pure commodity product and its
chemical characteristics are comparable whatever the
country of origin. There are two different
types of
and prilled. Granular
ammonium nitrate: granular
ammonium nitrate has a larger diameter and therefore
has better spreading characteristics. The investigation
has shown that all
imports are prilled and that the
ammonium nitrate produced by the
majority of
Community industry is granular. However, since gran-
ular and prilled ammonium nitrate have the same chem-
ical characteristics and end use, and are perceived by
users as being interchangeable, they are to be regarded
as two different types of the same product.

Therefore, the product produced in the Community has
been found to be a like product to that imported from
the countries concerned, in accordance with Article 1(4)
of Regulation (EC) No 384/96 (the Basic Regulation).
Furthermore, the product exported to the Community
from the countries concerned and those manufactured
and sold on the respective Polish and Lithuanian
markets are considered to be alike.

the weighted average prices of all sales that were not
loss-making, because these remaining sales accounted
for more than 10 % of all domestic sales.

(b) Export price

(11)

For those sales made to independent customers in the
Community, the export price was established on the
the prices actually paid or payable for the
basis of
product when sold for export to the Community,
in
accordance with Article 2(8) of the Basic Regulation. For
sales made via related importers, the export price was
constructed on the basis of resale prices to independent
customers. Adjustments were made for all costs incurred
between importation and resale by these importers and
for the profit margin found in the investigation to have
been attained by independent importers of the product
concerned, in accordance with Article 2(9) of the Basic
Regulation.

(c) Comparison

(12)

The normal value and export price were compared on
an ex-works basis. For that purpose, adjustments were
made for differences in transport, insurance, loading and
ancillary costs, as provided for in Article 2(10) of the
Basic Regulation.

(d) Dumping margin

(13)

the dumping margin for

In accordance with Articles 2(11) and (12) of the Basic
Regulation,
the exporting
producer concerned was established on the basis of a
comparison of the weighted average normal value with
the weighted average export price. The comparison
showed that no dumping existed for exports of AN
made by the company during the IP. The provisional
dumping margin therefore is 0,0 %.

C. DUMPING

1. Lithuania

the

sole

cooperating

producer
Since
the product
accounted for all Lithuanian exports of
the dumping margin
concerned to the Community,
provisionally established for this company is valid for
the whole country.

Lithuanian

(a) Normal value

2. Poland

(9)

The sole Lithuanian producer of AN cooperated with the
investigation. It sold only one type of AN (i.e. prilled).
Domestic sales were representative during the IP because
they accounted for more than 5 % of export sales
(Article 2(2) of the Basic Regulation).

(10) More than 20 % of domestic sales of

the product
concerned were made at prices below unit manufac-
turing costs (fixed and variable) plus selling, general and
administrative costs. Such domestic sales at a loss were
treated,
in accordance with Article 2(4) of the Basic
Regulation, as not being in the ordinary course of trade.
Normal value was therefore determined on the basis of

(a) Cooperation

(14)

The Commission sent questionnaires to five companies
(one exporter and four exporting producers) mentioned
in the complaint. One exporter and two exporting
producers replied within the specified time limit, a third
exporting producer declined to cooperate and a fourth
did not reply. However, on the basis of Eurostat import
data it was established that the cooperating exporting
producers accounted for more than 90 % of
total
imports originating in Poland.

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(b) Normal value

— Anwil SA

32,9 %,

(15)

Both cooperating exporting producers sold only one
type of AN (i.e. prilled). Domestic sales of both compa-
nies during the IP were representative because they
accounted for more than 5 % of their respective export
sales (Article 2(2) of the Basic Regulation).

(16) More than 20 % of domestic sales of

the product
concerned were made by the two producers at prices
below unit manufacturing costs (fixed and variable) plus
selling, general and administrative costs. Such domestic
sales at a loss were treated, in accordance with Article
2(4) of the Basic Regulation, as not being in the ordinary
course of trade. Normal value for both producers was
therefore determined on the basis of
the weighted
average prices of all sales that were not loss-making,
because these remaining sales accounted for more than
10 % of all domestic sales.

— Zaklady Azotowe Pulawy SA

25,4 %.

For those exporting producers which failed to reply to
the Commission's questionnaire or did not otherwise
make themselves known, dumping was determined on
the basis of the facts available in accordance with Article
18 of the Basic Regulation. In view of the existence of at
least one non-cooperating exporting producer, a residual
dumping margin was calculated, based on the highest
dumping margin established for representative transac-
tions by one cooperating exporting producer in Poland.
This was done in order not to reward non-cooperation
and in order to avoid circumvention.

The residual dumping margin determined for Poland,
expressed as a percentage of the cif Community frontier
price,

is 43,4 %.

(c) Export price

3. Ukraine

(17) One of the Polish producers sold AN for export to the

Community via two sales routes:

— directly,

to

independent

importers

in

the

Community, and

— indirectly, via an exporter located in Poland.

For both direct and indirect exports, the export price
was established on the basis of the prices actually paid
or payable for the product when sold for export from
Poland to the Community.

(18)

The second Polish producer only sold AN to indepen-
dent importers in the Community. The export price was
therefore established on the basis of the prices actually
paid or payable, in accordance with Article 2(8) of the
Basic Regulation.

(21)

(22)

(d) Comparison

(19)

The normal value and the export price were compared
on an ex-works basis. For that purpose, adjustments
were made for differences in commissions, transport,
insurance, loading and ancillary costs, as provided for in
Article 2(10) of the Basic Regulation.

(e) Dumping margin

(20)

In accordance with Articles 2(11) and (12) of the Basic
Regulation, the dumping margin for each of the two
exporting producers concerned was established on the
basis of a comparison of the weighted average normal
value with the weighted average export price.

(a) Cooperation

The Commission sent questionnaires to the five compa-
nies mentioned in the complaint. Two replied to the
questionnaire within the time limit stating that they had
not exported to the Community at all during the IP. One
replied outside the specified time limit and was informed
that it would be treated as a non-cooperating party. No
reply was received from the remaining two companies.

(b) Analogue country

to Article 2(7)(a) of

Pursuant
the Basic Regulation,
normal value for Ukraine had to be established on the
basis of the price or constructed value in a market
economy third country.
initiation,
Poland was proposed as a suitable analogue country.

In the notice of

No comments were received from any interested party.
Moreover, the investigation showed that:

— there was a substantial domestic market in Poland
for the product concerned, which is representative as
compared to the exports of AN to the Community
originating in Ukraine,

— there were at

least

two (cooperating) domestic

producers of a significant size,

— there were significant imports into Poland of AN

from third countries,

— the accounting data supplied by the cooperating

companies was reliable.

The weighted average dumping margins provisionally
determined for the two cooperating exporting produ-
cers, expressed as a percentage of the cif Community
frontier price, are set out below:

In view of the above, the Commission provisionally
concluded that Poland would be a reasonable choice of
market economy third country,
in accordance with
Article 2(7)(a) of the Basic Regulation.

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(c) Normal value

(23) Normal value was established on the basis of

the
weighted average of the normal value established for the
two cooperating exporting producers in Poland. For the
explanation of how normal value was determined, see
recitals (15) and (16) above.

On this basis, Community consumption decreased by
16,7 % between 1995 and the IP, and even more sharply
between 1996 and the IP. Between 1998 and the IP it
also went down significantly, but this has to be seen in
the light of the fact that the data for the IP are annual-
is characterised by a
ised and that
distinct seasonal pattern.

the AN market

(24)

(25)

(26)

(27)

(d) Export price

In the absence of information from the exporters, the
provisional findings have been established on the basis
of the facts available, in this case Eurostat figures and the
information on sea freight costs contained in the
complaint, in accordance with Article 18 of the Basic
Regulation.

(e) Comparison

The normal value and the export price were compared
on a fob (ex-exporting country frontier) basis. For that
purpose, adjustments were made for differences in trans-
port, insurance, loading and ancillary costs, in accord-
ance with Article 2(10) of the Basic Regulation.

(30)

(f) Dumping margin

In accordance with Articles 2(11) and (12) of the Basic
Regulation, the dumping margin was established on the
basis of a comparison of the weighted average normal
value with the weighted average export price. Expressed
as a percentage of the cif Community frontier price, the
provisional countrywide dumping margin for Ukraine is
67,4 %.

D. INJURY

situation of

The overall
the Community industry
followed an upward trend between 1995 and 1996, but
it started to deteriorate heavily thereafter. This develop-
ment should be seen in the light of the effects of the
anti-dumping measures introduced concerning imports
of AN originating in Russia, which were put into place
in August 1995 (minimum import price) and reinforced
in March 1998 (specific duty of ECU 26,3/tonne).

1. Definition of the Community industry

3. Imports from the countries concerned (1)

(a) Cumulative assessment of

the

effects of

the

imports

concerned

imports originating in Lithuania,

It has firstly been examined whether imports from all
countries concerned should be assessed cumulatively,
taking into account Article 3(4) of the Basic Regulation.
In this respect, given the above findings concerning
these
dumping of
the
taken into consideration for
imports were not
purpose of
the injury and causality assessment as
imports from the countries concerned, but have been
imports from other third
assessed in the context of
the dumping
countries. As to Poland and Ukraine,
margins found are more than de minimis, volumes of
imports are not negligible and the cumulative assess-
ment was also considered appropriate in view of the
similar conditions of competition both between the
imported products and between the imported products
and the like Community product. This is evidenced by
the fact that the import volumes were substantial and
that their market shares have increased steadily as from
1995. Moreover,
considerably
decreased since 1996. All exporting producers, addition-
ally, undercut
the Community
the sales prices of
industry, while using the same or similar channels of
trade. For these reasons,
it is provisionally concluded
that imports originating in Poland and Ukraine should
be assessed cumulatively.

prices

have

their

(28) Of the 11 complainant Community producers two were
considered to be not cooperating due to the fact that the
information submitted was insufficient. These producers
were therefore not
the
Community industry. The nine cooperating Community
producers represent more than 85 % of the Community
production of AN and
the
Community industry within the meaning of Article 4(1)
and Article 5(4) of the Basic Regulation.

regarded as being part of

constitute

therefore

2. Community consumption

(29)

The apparent Community consumption was established
on the basis of the sales volumes of the Community
the
industry on the Community market,
remaining Community producers on the Community
market as contained in the complaint,
information
provided by the cooperating exporting producers and
Eurostat
figures concerning the volume of
imports.

sales of

import

(b) Volume and market share of dumped imports (2)

(31)

fell back to the 1995 level. Thereafter

The import volume of AN originating in the two coun-
tries concerned increased between 1995 and 1996. In
1997 it
it
increased again sharply. In the IP it was 176,5 % higher
than in 1995, while Community consumption decreased
by 16,7 % during the same period. The market share of
the imports from the two countries concerned increased
from 2,6 % in 1995 to 3,1 % in 1996, then fell back to
the 1995 level
in 1997 and subsequently increased
sharply to 8,7 % in the IP. Compared to 1995 this was
an increase of 235 %.

(1) For confidentiality reasons, given that

the countries
concerned there
figures
contained in this Regulation relating to them will be indexed or
only given approximately.

exporting producer,

is only one

in some of

the

(2) For the assessment of trends in volumes and market shares and in
order to compare consistent data, only Eurostat data were used.

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(c) Prices of dumped imports

(b) Capacity and capacity utilisation rates

(i) P r i c e e v o l u t i o n ( 1)

(35)

The weighted average import prices of imports origin-
ating in the two countries concerned decreased by
23,9 % between 1995 and the IP. More specifically,
while prices reached a peak in 1996, they decreased
significantly throughout the period thereafter, by 31,4 %.

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

(32)

(33)

It should be noted that capacity and capacity utilisation
were not found to be meaningful indicators for this type
of production since the development of these indicators
was affected by the fact that also other products are
produced on the same production equipment. Indeed,
based on natural gas transformed into ammonia, various
different products may be produced using the same
production lines. The total production capacity of the
Community industry was, except for 1996, by and large
stable over the period under consideration. Capacity
utilisation increased from 46 % in 1995 to 56 % in
1996 and subsequently fell back to slightly below the
1995 level

in the IP.

the prices of

concerned undercut

It was examined whether the exporting producers in the
countries
the
Community industry during the IP. For this analysis, the
cif prices of the exporting producers have been duly
adjusted to a Community frontier ex quay custom duty
paid level (DEQ) and compared, at the same level of
trade, to Community producer's ex-works prices, both
for bagged products. This was done as imports were
always bagged, whereas the Community industry sold its
products both in bagged and in bulk form. Thus, adjust-
ments were made where appropriate.

(c) Sales in the Community

(36)

The sales volume of the Community industry decreased
from 3 790 000 tonnes in 1995 to 3 396 000 tonnes in
the IP, i.e. by 10,4 %. It should be noted that throughout
the period between 1996 and the IP, they decreased by
19,9 %.

In addition, the investigation has shown that granular
products were on average sold at a higher price than
prilled products, i.a. due to different spreading proper-
ties. Therefore, an allowance of EUR 5,8 per tonne was
made for the undercutting calculations. This amount is
the average price difference between granular and prilled
AN sold by the Community industry during the invest-
igation period.

Finally, in order to assess the level of price undercutting
found it
the
Community industry were found to be depressed during
the IP as shown in recital 36 below.

should be noted that

the prices of

The undercutting margins found on this basis per
country, expressed as a percentage of the Community
producers' prices, are as follows:

Country

Undercutting

Poland

Ukraine

2,1 %

12,5 %

(37)

(38)

(d) Market share

The market share of the Community industry was stable
between 1995 and 1997 and then increased. In the IP it
was 71,9 % compared to 66,8 % in 1995. While overall
consumption decreased since 1996,
the Community
industry and, to a much larger extent, the countries
concerned were able to increase their market share. This
development occurred at a time when antidumping
measures were imposed on imports originating in
Russia.

(e) Prices of the Community industry

from ECU 120,5/tonne

The average net sales price of the Community industry
decreased
to
ECU 99,3/tonne in the IP, i.e. by 17,6 %. The fall was
particularly marked between 1996 and the IP where the
prices steadily decreased by 25,4 %.

1995

in

4. Situation of the Community industry

(39)

(a) Production

(34)

The Community industry's production decreased by
4,7 % between 1995 and the IP,
i.e. from 3 915 000
tonnes to 3 730 000 tonnes. A significant increase took
place between 1995 and 1996. Thereafter, production
decreased by 20,9 % between 1996 and the IP.

(f) Profitability

The weighted average profitability of the Community
industry deteriorated by 22 percentage points between
1995 and the IP, from 9,6 % to (–12,4 %). In parallel
with the price development, the profitability was highest
in 1996 and decreased steadily between that year and
the IP, by 31 percentage points.

(g) Employment

(1) In order to assess price trends and in order to compare coherent
data, only Eurostat data were used, whereas for the calculation of
price undercutting and injury margins during the IP,
information
provided by exporting producers was used where available.

(40)

of

Employment
industry, while
the Community
increasing between 1995 and 1996, decreased thereafter
from 1 986 employees to 1 693 employees in the IP, a
decrease of 14,8 %.

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(h) Investment

any injury caused by factors other than dumped imports
was not attributed to the dumped imports.

(41)

The Community industry increased its
investments
between 1995 and the IP. These investments include
investments relating to production steps preceding the
actual production of AN and are therefore not directly
related to the product concerned. The most important
investments between 1995 and the IP were investments
in production facilities for nitric acid, which is a raw
material for the production of AN, but which may also
be used for other purposes such as the production of
UAN solutions.

5. Conclusion on injury

(42) A deterioration of

the situation of

the Community
industry has been found by reference to the period
considered. While the antidumping measures on imports
of AN originating in Russia led to a substantial decrease
of these imports after 1996 with, at first, an improve-
ment of its overall situation, the Community industry
could subsequently not fully benefit from this develop-
ment. Although it was able to take over roughly half the
market share lost by Russia since 1997, the countries
concerned took over the other half. Moreover, while
sales of the Community industry decreased by 19,9 %
between 1996 and the IP,
imports originating in the
countries concerned increased by 111 % during the
same period. In addition, the investigation has shown
that during the IP the imports concerned were made at
prices undercutting those of the Community industry.

In terms of price development, the Community industry
managed to increase its average prices between 1995
and 1996. However,
its sales prices were depressed
considerably thereafter. This had a significant negative
impact on its profitability, which substantially deteri-
orated as from 1996 to reach a level of – 12,4 % during
the IP.

The situation of the Community industry is thus found
to have deteriorated to such an extent that it is provi-
sionally concluded that the Community industry has
suffered material

injury in the IP.

F. CAUSATION

1. Introduction

(43)

Pursuant to Article 3(6) and (7) of the Basic Regulation,
the Commission, in order to reach its conclusions on the
causal link between the dumped imports and the injury
suffered by the Community industry, examined the
impact of all known factors and their consequences on
the situation in that industry. Such analysis ensured that

2. Effect of the dumped imports

(44) AN is a commodity product with no significant differ-
ence in technical, physical and chemical characteristics
and applications between the imported product and the
one produced in the Community. Therefore, AN
produced in the Community and AN imported from the
countries concerned are in direct competition with each
other mainly on the basis of the price, and this in a
transparent and highly price sensitive market.

(45)

Between 1995 and the IP, imports from the countries
concerned significantly increased in terms of volume
(175 %) and market share (from 2,6 % to 8,7 %) and
they undercut
the
Community industry. From 1996, this coincided with
the deterioration of the situation of the Community
industry in terms of sales and price reductions as well as
deteriorating profitability.

and depressed the prices of

In August 1995, the Council imposed definitive meas-
ures (minimum import price based variable duty) on
imports of AN originating in Russia. After an invest-
igation of the possible absorption of the measures, the
variable duty was
replaced by a specific duty of
ECU 26,3/tonne in March 1998. The dumped imports
from the countries concerned prevented the Community
industry from benefiting from the anti-dumping meas-
In terms of
ures imposed on imports from Russia.
volume, the countries concerned took over half of the
market
share held previously by Russia while the
Community industry gained market share only to a
limited extent and its sales declined in absolute terms.
Furthermore, the significant increase of the market share
of the dumped imports between 1996 and the IP coin-
cided with the downward trend in the situation of the
Community industry, in particular in terms of prices and
profits.

When faced with low-priced imports originating in the
countries concerned, the Community industry had the
possibility of either maintaining its prices with a risk of
losing market share, or following the low prices of
dumped imports. Both options would have had negative
consequences on profitability. Indeed, as from 1997, the
sales
Community industry substantially lowered its
prices. This had a detrimental impact on its profitability,
which turned negative in 1998. This clearly illustrates
the price sensitivity of the market and the important
impact of the prices practised by the exporting produ-
cers of the countries concerned.

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3. Effect of other factors

(a) Imports from other third countries

which may be seen in the recent announcement of
different plant closures. Also, in the absence of the price
pressure from the dumped imports the decline in prices
and profitability of the Community industry would have
been much less marked.

(46) As the dumping margin for imports originating in Lithu-
ania was found to be de minimis, these imports were
considered as ‘imports from other third countries’.

(c) Further factors

share of

The import volume of AN from other third countries
decreased from about 1 636 000 tonnes in 1995 to
around 720 000 tonnes in the IP, i.e. by 56 %. The most
important suppliers in this group of countries during the
IP were Russia, Lithuania, Bulgaria and Egypt. The
market
from third countries
decreased from 28,8 % in 1995 to 15,2 % in the IP, i.e. a
decrease of 13,6 percentage points. This decrease is to a
large extent made up by the reduction of imports origin-
ating in Russia, even though the market share of imports
originating in Lithuania showed another trend, going up
from 3,2 % in 1995 to 5,4 % in 1997 and subsequently
falling to 4,5 % in the IP.

the imports

Given the overall decrease in terms of volumes and
market shares of the imports originating in other third
countries, these imports overall cannot have contributed
in a significant manner to the material injury suffered by
the Community industry although it cannot be excluded
that imports from individual countries have contributed
to the injury suffered by the Community industry.

(b) Decrease in apparent consumption

(47) As to the development of demand, apparent consump-
tion of AN fell by 950 000 tonnes between 1995 and
i.e. by 16,7 %.
the (annualised) IP,

The fall was particularly marked between 1998 and the
annualised IP. As stated above, the AN market is charac-
terised by a distinct seasonal pattern. The major part of
the sales take place between October and March of each
year (high season), while during the rest of the year
demand is relatively subdued (low season). As the invest-
igation period of 18 months contains two low seasons
the annualised apparent
and only one high season,
consumption would be understated.

In addition, it cannot be excluded that the decrease in
demand (even if statistically overstated in the IP) is the
consequence of certain substitution effects amongst
different nitrogen fertilisers. It has been established in a
recent case concerning UAN solutions that apparent
consumption of UAN solutions increased in recent years
(see Commission Regulation (EC) No 617/2000 (1)). This
trend continued in the second half of 1999.

However, while the decline in demand certainly contrib-
uted to increased competition and exerted a certain
downward pressure on prices, thereby contributing to
the injury suffered by the Community industry, the latter
in demand and is adapting to it,
did anticipate a fall

(1) OJ L 75, 24.3.2000, p. 3.

(48)

It was also examined whether factors other than the
abovementioned might have contributed to the injury
suffered by the Community industry.

As to the development of supply, it has been argued that
there is a worldwide overcapacity for nitrogen fertilisers
which contributed to a fall
in the prices of nitrogen
fertilisers, thereby causing the injury suffered by the
Community industry. However, the Community industry
did not build up additional capacity during the period
under investigation and did thus not contribute to any
increase in worldwide overcapacity. As far as worldwide
over-capacity is concerned this may well be the reason
why
the
Community, but this does not justify injurious dumping.

concerned

countries

exported

the

to

As to the development of unit production costs of the
Community industry, they were relatively stable between
1995 and the IP and did therefore not have an influence
profitability.

In relation to the developments in technology and
productivity of the Community industry,
it has been
established that the Community industry has carried out
considerable investments in order not to lose competi-
tiveness.

(49)

4. Conclusion on causation

In view of the above, it is provisionally concluded that
while the decline in apparent consumption or certain
third country imports certainly may have contributed to
in
the injury suffered by the Community industry,
particular in terms of a reduction in production and
sales volume, the dumped imports remain a significant
factor especially as far as the price and profit develop-
ment of the Community industry is concerned. In view
of the coincidence in time between, one the one hand,
the price decrease and undercutting established for the
imports concerned, the significant market share gained
by the dumped imports originating in the countries
concerned and, on the other hand, the decline in sales
suffered by the Community industry, as well as the
reduction of its sales prices and the decline of its profit-
ability,
it is provisionally concluded that the dumped
imports originating in the countries concerned have
caused the material injury suffered by the Community
industry. Thus, it was also concluded that the effect of
factors other than the dumped imports were not such as
to break the causal link between the dumped imports
and the material
injury suffered by the Community
industry therefrom.

26.7.2000

EN

Official Journal of the European Communities

L 187/19

G. COMMUNITY INTEREST

1. Preliminary remark

(50)

the

In accordance with Article 21 of the Basic Regulation, it
was examined whether the imposition of anti-dumping
the
interest of
against
measures would be
Community as a whole. The determination of
the
Community interest was based on an appreciation of all
the
the
Community industry, the importers and traders and the
users of the product concerned to the extent that the
relevant parties submitted the information requested in
this respect.

those of

involved,

interests

various

i.e.

In order to assess the likely impact of the imposition or
non-imposition of measures, information was requested
from all interested parties. Questionnaires were sent to
the Community industry, two other producers in the
Community, 51 importers/traders, one importers' asso-
ciation and two associations of users of the product
concerned. Five importers/traders (of which one related
to an exporting producer) as well as the importers'
association replied. As to the users' associations, none of
them replied to the questionnaires or submitted any
other information.

On this basis it was examined, whether, despite the
conclusions on dumping, on the situation of
the
Community industry and on causation, compelling
reasons existed which would lead to the conclusion that
it was not in the Community interest to impose meas-
ures in this particular case.

2. Interest of the Community industry

(51)

The Community industry has proven to be a structurally
viable industry, able to adapt to the changing conditions
on the market. This has been shown in particular by the
positive development of its situation at a time when
effective competition had been restored after the imposi-
tion of anti-dumping measures concerning imports
originating in Russia and by the industry's investment in
state of the art production capacity. However, due to the
pressure of the dumped imports on sales prices, it did
not fully benefit from the imposition of anti-dumping
measures on imports originating in Russia in particular
since 1996.

One group of complainant companies has already
announced the planned shutdown of approximately 1
million metric tonnes of nitrate capacity so far used to
produce,
inter alia, AN with corresponding job losses.
Despite the structurally viable background mentioned
above, it cannot be excluded that some companies in
this industry would reduce further or even cease their
manufacturing activities for the product concerned in

against

injurious
the Community if no measures
dumping were taken. This conclusion is justified in view
of the duration and extent of financial losses suffered
due to dumped imports (between 1998 and the IP, the
Community industry has suffered increasing losses).
Indeed, without measures, the price-depressing effect of
the dumped imports will continue to frustrate all efforts
of
the Community industry to regain a satisfactory
margin of profit.

On the other hand, the imposition of measures would
enable this industry to restore and maintain its activities
in the Community.

3. Interest of importers/traders

(52) Questionnaires and information were received from the
European Fertiliser Import Association (EFIA) and four
unrelated importers and two verification visits were
carried out. Furthermore, the investigation has estab-
lished that importers/traders as a rule do not only trade
in AN but also, to a significant percentage,
in other
fertilisers. Thus, the effect of measures on their overall
business would be limited. Nevertheless,
it cannot be
some importers would face negative
excluded that
consequences after
the imposition of anti-dumping
measures.

4. Interest of users

(53) Users of

the product concerned are farmers in the
Community. Demand for nitrogen fertilisers appears to
be relatively inelastic and farmers tend to buy from the
cheapest source available. Farmers therefore have bene-
fited from low prices for AN in the 1998 and 1999
seasons. However, the fact that there has been no co-
operation from user associations justifies the provisional
conclusion that anti-dumping measures, if any, will most
likely not have a decisive impact on users. In the event
of any anti-dumping measures being imposed, the cost
farmers would very probably increase.
of AN for
However,
total
production costs so that the possible negative effects on
farmers in the Community are not considered to offset
the positive
injurious
dumping for the Community industry.

fertilisers represent a small part of

effect of measures

against

5. Competition and trade distorting effects

(54) With respect to the effects of possible measures on
competition in the Community, some interested parties
have argued that duties would lead to the disappearance
concerned from the
of
Community market,
considerably weakening
competition, and to an increase of the prices for AN.

exporting producers

thus

the

L 187/20

EN

Official Journal of the European Communities

26.7.2000

However, some of the exporting producers concerned
will probably continue to sell their products albeit at
non-injurious/non-dumped prices, as they were found to
have an increasingly strong market position. The impo-
sition of anti-dumping duties on those exporting produ-
cers for which higher dumping and injury margins were
established is likely to lead to a drop in their sales
volume and market share. Finally, it cannot be excluded
that once prices reach a level at which the effects of
injurious dumping are removed,
imports from other
third countries will also be reoriented towards the
Community market. Therefore,
the
Community industry will still have a significant number
of competitors on the market and, as stated above, in
in the
view of
Community, as well as the transparency of the market,
users will continue to have the choice of different
suppliers of the product concerned.

large number of producers

is likely that

the

it

Thus, the imposition of anti-dumping duties is consid-
ered not to unduly limit the choice for users or weaken
competition.

6. Conclusion on Community interest

(55) Given the above reasons, it is provisionally concluded
that there are no compelling reasons against the imposi-
tion of anti-dumping duties.

The complainant had submitted that a profit margin of
10 to 15 % would be appropriate. It argued that in 1995
and in 1996 the Community industry had achieved
profits of 9,6 % and 18,6 % respectively, and that there
was a need to replace investment in the long term and
to achieve an adequate return on equity for shareholders.

In this respect,

the dumped imports.

After consideration of the various submissions by the
complainants on that issue, the provisional conclusion
was reached that a profit margin of 8 % would provide
the Community industry with a profitability level that it
could have reasonably expected in the IP in the absence
of
the profit
achieved in 1995 can be considered to represent a profit
made in the absence of injurious dumping, as this is a
year in which the Community industry could benefit
from the effect of measures
imposed on dumped
imports of AN in Russia, albeit in an expanding market.
The year 1996 was a year in which the upward profit-
able trend was confirmed, albeit with demand expanding
even more,
leading to an exceptionally good market
situation with excellent results for all economic opera-
tors. As opposed to the 1995/1996 situation,
the
market was in a depressed state during the IP. In deter-
mining the profit that could reasonably, during the IP,
have been achieved in the absence of injurious dumping,
account was thus taken of the past situation experienced
by the Community industry, but also of the overall
market situation in the IP, leading to the conclusion that
8 % could be considered an appropriate non-injurious
profit margin.

H. PROVISIONAL MEASURES

1. Injury elimination level

The difference resulting from the comparison between
the weighted average import price and the non-injurious
price of the Community industry was then expressed as
a percentage of the total cif import value.

(56)

the conclusions reached with regard to
In view of
dumping,
injury, causation and Community interest,
provisional anti-dumping measures should be taken in
order to prevent
further injury being caused to the
Community industry by the dumped imports.

For establishing the level of duty, account has been
taken of the level of the dumping margins found and of
the amount of duty necessary to eliminate the injury
suffered by the Community industry.

In order to establish the level of duty necessary to
eliminate the injury caused by dumping, injury margins
have been calculated. The necessary price increase was
determined on the basis of a comparison, at the same
level of trade, of the weighted average import price, with
the non-injurious price of AN sold by the Community
industry on the Community market.

The non-injurious price has been obtained by adding to
the full unit cost of production a profit margin that may
reasonably be reached in the absence of
injurious
dumping, taking account of the allowance with respect
to the difference between granular and prilled AN
already made for the undercutting calculations. The
profit margin used for this calculation is 8 %.

2. Provisional measures

(57)

The complainant submitted that there were indications
of the emergence of new forms of AN, i.e. mixtures of
AN with other products, whose only purpose is to
circumvent possible anti-dumping measures concerning
AN. The attention of the customs authorities is drawn to
this issue.

In the light of the foregoing, it is considered that, in
accordance with Article 7(2) of the Basic Regulation, a
provisional anti-dumping duty should be imposed in
respect of imports originating in Poland and Ukraine at
the level of the injury margins found since these are
lower than the dumping margins.

In order to ensure the efficiency of the measures and to
discourage the price manipulation which has been
observed in some previous proceedings involving the
same general category of product,
it is
considered appropriate to impose the duties in the form
of a specific amount per tonne.

i.e. fertilisers,

26.7.2000

EN

Official Journal of the European Communities

L 187/21

As regards the basis for the residual duty to be applied to the non-cooperating exporting producers,
the highest margins established for representative transactions by one cooperating producer were
used.

On the basis of the above, the provisional duty amounts are as follows:

Country

Dumping margin
%

Basis for AD duty
%

Amount of duty
(EUR/tonne)

POLAND

Anwil SA

Zaklady Azotowe Pulawy SA

All other companies

UKRAINE

32,9

25,4

43,4

67,4

25,2

24,5

30,5

43,4

23,13

22,61

26,91

33,25

In view of the results of the investigation concerning Lithuania, and considering that the dumping
margin is de minimis, no provisional measures should be imposed in respect of this country. The
Commission will however continue to investigate this issue and consider any further evidence
submitted in order to arrive at a definitive determination.

(58) An offer of an undertaking was received from one of the Polish exporting producers. However, the
offer could not be accepted because it would have meant exempting a significant volume of imports
from provisional measures and would not, therefore, have been adequate to remove the injury
caused to the Community industry.

(59)

The individual company anti-dumping duty rates specified in this Regulation were established on the
basis of the findings of the present investigation. Therefore, they reflect the situation found during
that investigation with respect to these companies. These duty rates (as opposed to the country-wide
duty applicable to ‘all other companies’) are thus exclusively applicable to imports of products
originating in the country concerned and produced by the companies and thus by the specific legal
entities mentioned. Imported products produced by any other company not specifically mentioned
in the operative part of this Regulation with its name and address, including entities related to those
specifically mentioned, cannot benefit from these rates and shall be subject to the duty rate
applicable to ‘all other companies’.

(60) Any claim requesting the application of these individual company anti-dumping duty rates (e.g.
following a change in the name of the entity or following the setting-up of a new production or sales
in
entities) should be addressed to the Commission (1) forthwith with all relevant information,
particular any modification in the company's activities linked to production, domestic and export
sales associated with e.g. that name change or that change in the production and sales entities. The
Commission, if appropriate, will, after consultation of the advisory committee, amend the Regulation
accordingly by updating the list of companies benefiting from individual duty rates.

3. Final provision

(61)

In the interest of sound administration, a period should be fixed within which the interested parties
may make their views known in writing and request a hearing. Furthermore, it should be stated that
the findings made for the purposes of
this Regulation are provisional and may have to be
reconsidered for the purposes of any definitive duty,

(1) European Commission

Trade Directorate-General
Directorate C
DM 24-8/38
Rue de la Loi/Wetstraat 200
B-1049 Bruxelles/Brussel.

L 187/22

EN

Official Journal of the European Communities

26.7.2000

HAS ADOPTED THIS REGULATION:

Article 1

A provisional anti-dumping duty is hereby imposed on imports of ammonium nitrate other than in
1.
aqueous solution and mixtures of ammonium nitrate with calcium carbonate or other inorganic non-ferti-
lising substances, with a nitrogen content exceeding 28 % by weight, falling within CN codes 3102 30 90
and 3102 40 90 and originating in Poland and Ukraine.

The amount of duty shall be equal to the fixed amount in Euro per tonne of ammonium nitrate

2.
shown below for the products produced by the following companies:

Country

Company

Amount of duty
(per tonne)

TARIC additional code

Poland

Anwil SA
ul. Torunska 222,
87-805 Wloclawek
Poland

Zaklady Azotowe
Pulawy SA
Al. Tysiaclecia P.P.13,
24-110 Pulawy
Poland

All other companies

Ukraine

All companies

23,13

A174

22,61

A175

26,91

33,25

A900

3.
In cases where goods have been damaged before entry into free circulation and, therefore, the price
actually paid or payable is apportioned for the determination of the customs value pursuant to Article 145
of Commission Regulation (EEC) No 2454/93 (1), the amount of anti-dumping duty, calculated on the basis
of the amounts set above, shall be reduced by a percentage which corresponds to the apportioning of the
price actually paid or payable.

4.

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

The release for free circulation in the Community of the product referred to in paragraph 1 shall be

5.
subject to the provision of a security, equivalent to the amount of the provisional duty.

Article 2

Without prejudice to Article 20 of Regulation (EC) No 384/96, interested parties may request disclosure of
the essential facts and considerations on the basis of which this Regulation was adopted, present their views
in writing and request a hearing from the Commission within one month of the date of entry into force of
this Regulation.

Pursuant to Article 21(4) of Regulation (EC) No 384/96, the parties concerned may request a hearing
concerning the analysis of the Community interest and may comment on the application of this Regulation
within one month of the date of its entry into force.

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

Article 3

Article 1 of this Regulation shall apply for a period of six months.

(1) OJ L 253, 11.10.1993, p. 40.

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L 187/23

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

Done at Brussels, 25 July 2000.

For the Commission

Franz FISCHLER

Member of the Commission