Commission Decision No 2730/2000/ECSC of 14 December 2000 imposing a definitive anti-dumping duty on imports of coke of coal in pieces with a diameter of more than 80 mm originating in the People's Republic of China and definitively collecting the provisional duty imposed
Date: 2000-12-14
Institutions: European Commission
Subjects: China, anti-dumping duty, anti-dumping legislation, coke, import, originating product

L 316/30

EN

Official Journal of the European Communities

15.12.2000

COMMISSION DECISION No 2730/2000/ECSC

of 14 December 2000

imposing a definitive anti-dumping duty on imports of coke of coal in pieces with a diameter of
more than 80 mm originating in the People's Republic of China and definitively collecting the
provisional duty imposed

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Coal and
Steel Community,

(5)

Having regard to Commission Decision No 2277/96/ECSC of
28 November 1996 on protection against dumped imports
from countries not members of the European Coal and Steel
Community (1), as amended by Commission Decision No
1000/1999/ECSC (2), and in particular Article 9 thereof,

the provisional

priate,
accordingly.

findings have been modified

Having reviewed the provisional findings on the basis of
the information gathered since the provisional Decision
was adopted, it is concluded that the main findings as
set out in that Decision should be confirmed, to the
extent that they are not amended by the considerations
outlined in the present Decision.

Whereas:

C. PRODUCT CONCERNED AND LIKE PRODUCT

A. PROCEDURE

1. Product concerned

(1)

(2)

(3)

By Commission Decision No 1238/2000/ECSC (3) ‘(the
provisional Decision’), the Commission imposed a provi-
sional anti-dumping duty on imports of coke of coal in
pieces with a diameter of more than 80 mm falling
within CN code ex 2704 00 19 and originating in the
People's Republic of China (‘the PRC’).

B. SUBSEQUENT PROCEDURE

Subsequent to the disclosure of the essential facts and
considerations on the basis of which provisional meas-
interested parties made
ures were imposed, several
written submissions making their views known on the
provisional finding. In accordance with Article 6(5) of
Decision No 2277/96/ECSC (‘the basic Decision’), parties
that so requested were granted an opportunity to be
heard.

The Commission continued to seek and verify all infor-
mation deemed to be necessary for the definitive find-
interested parties cooperating in the invest-
ings. All
igation were informed of the essential facts and consid-
erations on the basis of which it was intended to recom-
mend the imposition of a definitive anti-dumping duty
and the definitive collection of the amounts secured by
way of the provisional duty. They were also granted a
period within which to make representations subsequent
to the disclosure.

(4)

The oral and written comments submitted by the inter-
ested parties were considered, and, where deemed appro-

(6)

(7)

(8)

than

commonly known as

The product concerned was defined in the provisional
Decision as coke of coal in pieces with a diameter of
more
CN code
80 mm falling within
ex 2704 00 19 and originating in the PRC. This
is
product,
produced in different grades with, in particular, different
fixed carbon content, and in various lump sizes. All
grades were found to have the same basic physical,
technical and chemical characteristics and the same use
as a combustion agent for use in cupola ovens for the
production of cast iron, stone wool, zinc and lead (4).

foundry

coke,

Foundry coke was distinguished from other cokes falling
under the same CN code by virtue of the size, namely
coke of coal
in pieces with a diameter of more than
80 mm was considered to be the only size suitable for
use in cupola ovens due to its combustion heat and
strength to support burden without breakdown. Coke
with a diameter of less than 80 mm, commonly known
as blast furnace coke, was found to be unsuitable for
those uses. Blast furnace coke is used in blast furnaces
for the production of steel and for other purposes such
as the production of chemicals and sugar.

Subsequent to the imposition of provisional measures
certain interested parties argued that, although 80 mm
was a clear dividing line, there were instances where
blast furnace coke was imported in sizes over 80 mm,
up to a maximum of 100 mm. In this respect, informa-
tion was presented showing that certain customs author-
ities were applying the provisional anti-dumping duty
on both foundry coke and blast furnace coke in pieces
with a diameter of more than 80 mm.

(1) OJ L 308, 29.11.1996, p. 11.
(2) OJ L 122, 12.5.1999, p. 35.
(3) OJ L 141, 15.6.2000, p. 9.

(4) The Commission found that the term ‘zinc lead’ used in the provi-
sional Decision was a clerical error and should be corrected as ‘zinc
and lead’.

15.12.2000

EN

Official Journal of the European Communities

L 316/31

(9)

(10)

(11)

It should be noted that the product investigated was
foundry coke and not blast furnace coke. Furthermore,
since blast furnace coke in pieces with a diameter of
more than 80 mm has generally a lower strength it is
not destined for use in cupola ovens for the manufacture
of cast iron, stone wool or melting zinc and lead. It
should also be noted that according to the information
provided by interested parties in the course of the inves-
tigtion, in those instances where coke in pieces with a
diameter of more than 80 mm up to a maximum of
100 mm is imported together with coke in pieces of
80 mm or less in diameter, this coke was destined for
use in blast furnaces and could not generally be used in
cupola ovens.

the product concerned should be
For these reasons,
clarified and defined taking into consideration, on the
one hand, its physical characteristics, that is to say coke
of coal in pieces larger than 80 mm in maximum diam-
eter and, on the other hand, its use, that is to say of a
kind used in cupola ovens for the manufacture of cast
iron and stone wool as well as melting zinc and lead. It
should therefore be clarified that blast furnace coke,
although in pieces with a diameter of more than
80 mm up to 100 mm, which are imported together
with coke in pieces of 80 mm or less in diameter are
not covered by this proceeding.

The Chinese exporters/producers and one Community
importer argued that the product concerned imported
from the PRC during the investigation period (‘IP’) (1
July 1998 to 30 June 1999) was semi-finished foundry
coke which could only be considered finished foundry
coke after screening. The Community importer claimed
that screening is not just to separate the fractions in
commercial sizes (over 80 mm) from smaller particles
(80 mm or below) as stated in recital 13 of the provi-
sional Decision, but is also a phase of mechanical stabili-
sation aimed at breaking up cracked parcels of foundry
coke. Being the last substantial step in the production
it was claimed that
chain adding significant value,
screening in the Community was enough to change the
origin of foundry coke imported from the PRC. It was
alleged that this was also supported by the significant
adjustment for screening costs granted by the Commis-
sion in the calculation of price undercutting.

(12)

This claim was not considered to be justified. Mechanical
screening is a treatment in which coke fractions are
separated into sizes or size ranges without however
altering the basic chemical or physical characteristics,
which are inherited from the coking coals used as raw
materials and the production method. Foundry coke has
to be screened before industrial end-use in order to
obtain the desired size or size range for the cupola oven.
Normally screening is made immediately after carbonisa-
tion but, as foundry coke suffers some natural deteriora-

tion during loading, transportation and unloading, it is
often screened again after sea transportation.
In this
respect, it cannot be considered that by screening, the
resulting foundry coke receives its own properties and a
composition of its own which it did not possess before
this operation. Therefore it cannot be concluded that
unscreened foundry coke at Community border is a
semi-finished product.

(13)

Furthermore, it was found that screening represented on
average less than 4 % of the cif import price and that the
adjustment granted in the calculation of price undercut-
ting included not only the cost of screening, but all
selling and financing costs incurred between importation
and resale. It cannot therefore be concluded that the
total amount of the adjustment granted in the calcula-
tion of price undercutting is an indication of the value
added to the product after importation for the purpose
of determining the origin of the good. In view of the
above,
screening in the
Community confers Community origin on the product
concerned.

it cannot be argued that

(14)

It is therefore concluded that the product concerned is
foundry coke originating in the PRC, that is to say coke
of coal in pieces with a diameter of more than 80 mm
of a kind used in cupola ovens for the manufacture of
cast iron, stone wool, zinc and lead. It is also concluded
that all grades of foundry coke are one product since
they all share the same basic physical and chemical
characteristics and have the same use.

2. Like product

(15) One user claimed that Community foundry coke was
not alike to the product concerned, since the latter was
of a lower quality. In support of this claim it argued that
switching between the two could not take place without
substantial and expensive modifications in technical
equipment leading to substantial costs. Some users also
alleged that
the product concerned was of a lower
quality and could only be used by mixing it with the
Community produced one, thereby showing that they
are not like products.

(16)

It should firstly be recalled that differences in quality
have no effect on the definition of the like product, as
long as the basic physical and chemical characteristics
remain the same and the two products are interchange-
able. This matter has been explicitly dealt with in recitals
19 to 21 of
the provisional Decision. The issue of
quality has also been the source of seemingly contradic-
tory statements, mainly by foundries. Some of them
claimed that they could not use Chinese foundry coke
because of the lower quality, while others claimed that
the Chinese foundry coke was superior to that produced
this contradiction
in the Community. Furthermore,

L 316/32

EN

Official Journal of the European Communities

15.12.2000

simply shows that, although there are certain generally
accepted limits of chemical and physical characteristics
for foundry coke, end-users are either able to select the
most suitable foundry coke for their purposes or to
adjust their equipment to suit a particular foundry coke.
that end-users have
This is confirmed by the fact
changed from the Community produced to Chinese
foundry coke and, in some cases, back to Community-
produced coke. There is therefore a clear interchange-
ability of these products and the argument concerning
the need for substantial and expensive modifications to
the technical equipment is not convincing and should be
rejected. That the two products compete with each other
is also proven by the fact that users decide which one to
purchase according to its price. The fact that specific
users might not be able to switch products does not
invalidate this conclusion.

(17)

In view of the above, the conclusions in recitals 18 to
23 of the provisional Decision are hereby confirmed.

D. DUMPING

1. Market economy status

(18)

The company, which requested market economy status
(‘MES’), objected to the Commission's conclusion that its
accounts did not comply with the requirements of
Article 2(7)(c), second indent, of the basic Decision. The
company claimed that the Commission failed to investi-
gate whether the company's accounts were sufficiently
reliable to be used as a basis to establish an individual
dumping margin.

the

revealed that

(19) As outlined in recital 26 of the provisional Decision, the
investigation clearly
company's
accounts did not adequately reflect the financial situation
of the company during the IP, namely in terms of sales
records. The Commission established that the accounts
were not kept on a regular and consistent basis, which
meant that they were generally unreliable and did not
comply with international accounting standards. As this
the
is a criterion for establishing whether or not
exporter concerned operates under market economy
conditions, the Commission had to reject the claim for
market economy status in accordance with the basic
Decision. The company did not submit any further
its accounts were
evidence, which could show that
nonetheless in conformity with international accounting
standards. Therefore, and in the absence of any informa-
tion showing that the Commission's preliminary conclu-
sion was wrong, the provisional findings are confirmed.

be granted to it. In this regard, it further argued that the
company negotiated all sales contracts directly with its
customers in the Community and that it had full control
over these transactions. It finally argued that the absence
of a questionnaire reply by its mother company in Hong
Kong should not have been considered as a deficiency.

(21)

(22)

The Commission established that the company's export
sales were, at least partly, controlled by the Chinese
authorities due to the fact that the company could not
export the product concerned in its own name, but had
to rely on state-owned traders possessing a licence to
export. In addition, the investigation revealed that the
company was not entirely free to determine export
prices, due to the fact that it was required to pay an
agency fee to the state owned traders. The fact that the
sales
contracts were negotiated directly with the
customers in the Community could not be considered
by itself as sufficient in order to demonstrate the neces-
sary independence from state authorities. Due to the fact
that the state had at least partial control over the compa-
ny's export sales,
the
country-wide duty was clearly present and individual
treatment could not be granted to the company.

the risk of circumvention of

The investigation revealed that the mother company in
Hong Kong was clearly involved in the marketing of the
product concerned and in the facilitation of the export
transactions. It should however be noted that the fact of
whether or not the mother company submitted a sepa-
rate reply to the Commission's questionnaire could not
alter the conclusions in recitals 20 and 21, namely that
the exporter in the PRC could not show that it was
sufficiently independent from the State so be entitled to
individual treatment. The provisional findings in recitals
32 and 34 of the provisional Decision are therefore
confirmed.

3. Export price

(23)

The Chinese exporters objected to the Commission's
methodology for calculating ocean freight and insurance
costs (‘cif costs’) as regards their export sales and argued
that for all export sales the same amount of cif costs
should have been used, that is to say either the cif costs
as reported by the exporting producers or the cif cost as
calculated by the Commission on the basis of actual
verified cif costs submitted by one of the main impor-
ters.

2. Individual treatment

(20)

The same company argued that the Commission erred in
concluding that it did not enjoy legal and factual inde-
pendence from the State and that the Commission did
not demonstrate the existence of a risk of circumvention
of anti-dumping measures should individual treatment

(24)

For the purpose of the determination of the provisional
dumping margin and in cases where transactions were
made on a free-on-board (‘fob’) basis, the Commission
calculated the cif costs on the basis of the actual verified
the main importers.
cif costs submitted by one of

15.12.2000

EN

Official Journal of the European Communities

L 316/33

the cif cost

However, in cases where sales were made on a cif basis,
the cif cost reported by the exporter concerned were
used. For the purpose of the determination of the defin-
itive dumping margin and further to the comments
received, the Commission reviewed this approach. It was
reported by the exporter
found that
concerned in cases where sales were made on a cif basis
were in fact over estimates and should be disregarded.
Consequently, and since no evidence was submitted
showing that the actual cif costs of the above mentioned
importer were unreliable or incorrect, the Commission
considered it appropriate to apply these to all Chinese
export transactions reported.

4. Comparison

4.1. Transport costs

(25) One Chinese exporter claimed that

in view of

the
company's close location to the port, its own transport
cost should have been used in order to calculate the fob
prices in the United States of America (‘the USA’) which
was retained as the analogue country. The two other
Chinese exporters requested that an average of the trans-
port cost of the third exporter and the inland transport
cost found in the analogue country be used.

(26)

(27)

Costs and prices in a non-market economy country are
distorted by state influence and are thus not a function
of normal market signals. This also applies to transport
cost and this is why the actual transport costs of the
Chinese exporter were not used but rather the actual
verified transport cost incurred by the producers in the
analogue country. The argument that for one Chinese
producer these costs had been verified by the Commis-
sion in the framework of the MES investigation is irrele-
vant since no market economy treatment was granted in
this investigation. Therefore, the proposal to use trans-
port cost incurred by the aforementioned exporter had
to be rejected.

The Commission further investigated the appropriate-
ness of the comparison of the normal value and export
price on a fob-basis. In this regard, account was taken of
the fact that in some instances the distance between the
factories and the port in the exporting country was
considerable. For the purpose of the definitive deter-
mination,
it was therefore considered appropriate to
change the basis of the comparison to ex-works. The
appropriate adjustments were made on the export price
and in the absence of any other reliable information in
this respect,
inland transport cost
found on the US domestic market was used as a basis
for calculating the adjustment.

the lowest actual

(29) As

regards differences

in the production process
between a non-market economy country and the respec-
tive analogue country, it is the Commission's position to
grant
advantages.
However, such allowances cannot be given selectively
for certain cost elements which may not provide a
representative picture overall.

an adjustment

comparative

for

(30)

(31)

4.3. Comparative advantages

The Chinese exporters reiterated their claim for an
adjustment for natural comparative advantages vis-à-vis
the analogue country in terms of access to raw material.
In this regard, the exporters alleged that the normal
value of the analogue country should not have been
used as such in order to compare it to the export price
due to the fact that the PRC had the largest coal reserves
worldwide, which allow efficient mining and therefore
had an impact on the price of the raw material and
consequently of
the
Chinese exporters alleged that Chinese producers had
easy access to the raw material, due to surface mining, in
contrast to the USA, where coal is mainly mined under-
ground.

the foundry coke. Furthermore,

The Commission investigated in further detail whether
or not Chinese producers had natural comparative
advantages compared to the US-producers.
In this
regard, the investigation revealed firstly that, in contrast
to what was claimed, the USA had the largest coal
it was found that the
reserves worldwide. Moreover,
USA made extensive use of surface mining and that the
amount of surface mining was likely to be equivalent to
that of the PRC. Moreover, the investigation revealed
that underground mining was also practised in the PRC.
In conclusion, it was therefore established that the USA
and the PRC had similar access to the raw material and
that both countries had the same comparative advan-
tages. An adjustment was consequently not justified. The
Commission confirms the provisional findings in this
respect set out in recital 51 of the provisional Decision
and reaffirms that, pursuant to the basic Decision, the
selection of the USA as an analogue country in the
present proceeding was
the most appropriate and
reasonable choice.

4.4. Commission fee

(32) One Chinese exporter claimed that the commission fee
paid should not have been deducted from the export
price. The claim was accepted and the export prices were
adjusted accordingly.

4.2. Production process

5. Dumping margin

(28)

The Chinese exporters reiterated their claim for an
adjustment for differences in the production process.
They argued that it was less capital intensive than the
one used in the analogue country, due to the use of
more sophisticated ovens in the USA.

(33) As announced in recital 58 of the provisional Decision,
the level of cooperation of the Chinese producers/expor-
ters was further investigated and was found to be 57,8 %
of the total exported volume of foundry coke into the

L 316/34

EN

Official Journal of the European Communities

15.12.2000

Community during the IP. It should be noted that given
that separate Eurostat import data for foundry coke were
not available, the volume of foundry coke imported as
reported, and verified, by the co-operating importers
was taken as a basis to calculate the level of cooperation.

industry in the IP can be considered as injurious. In this
respect, given the situation of the Community industry
in the IP,
injury suffered by the
Community industry in the IP would have been reached
regardless of whether 1994 or 1995 was taken as the
starting point.

the findings of

(34)

In the calculation of the single country-wide dumping
margin, the Commission consequently had to take into
account the high level of non cooperation, in order not
In this regard, a
to reward non-cooperating parties.
dumping margin, which corresponded to the highest
margin established for a representative transaction by
one co-operating company in the PRC, was attributed to
the non-cooperating producers/exporters. The single
country-wide dumping margin was subsequently calcu-
lated as a weighted average of the margin established for
the cooperating producers/exporters and the margin
established for non-cooperating producers/exporters.

(35)

The definitive single country-wide dumping margin
expressed as a percentage of the cif export price free at
Community frontier exceeded 60 %.

E. COMMUNITY INDUSTRY

(36)

Since no representations were made by any interested
parties as regards the provisional definition of
the
Community industry, the conclusions in recitals 60 to
65 of the provisional Decision are hereby confirmed.

F. INJURY

1. Preliminary remark

(37)

The examination of
the deter-
mination of injury covered the period 1 January 1995 to
the end of the IP.

relevant

trends

for

(38) One interested party argued that the choice of 1995 as a
starting year for the data collection has distorted the
injury analysis. It alleged that this year was exceptionally
good for the Community industry due to a very high
demand, whereas using the year 1994 as a starting point
would have shown that the situation of the Community
industry in the IP was at the same level as in 1994 and
therefore it did not suffer injury.

(39)

It should be noted that the purpose of the injury invest-
igation is to evaluate the effect of the dumped imports
on the economic situation of the Community industry
during the IP. In order to make such an analysis, trends
are established for a number of indicators on the basis of
information relating to a number of years preceding the
IP. The purpose of this analysis is not to do an end-point
to end-point analysis but rather to assess the develop-
ments within the entire period considered in order to
the Community
determine whether the situation of

2. Apparent Community consumption

(40)

Since no new representations were received on apparent
consumption on the Community market, the conclu-
sions in recitals 66 to 67 of the provisional Decision are
hereby confirmed.

3. Imports originating in the PRC

3.1. Volume of the imports concerned; market share, share of
production and evolution of the prices of the imports
concerned

(41)

In the absence of new representations regarding the
import volume and market share of dumped imports,
the facts and findings set out in recitals 68 to 72 of the
provisional Decision are hereby confirmed.

3.2. Price undercutting

(42) One interested party argued that in order to carry out
the undercutting calculation on a fair basis, the prices
charged by
should be
compared to the importer's selling prices adjusted for a
lower heating value due to the lower fixed carbon
content and for the investments needed for the use of
Chinese foundry coke.

the Community

industry

(43)

(44)

It should be noted that the difference in heating value
has already been duly taken into account in the calcula-
tion of price undercutting (see recital 74 of the provi-
sional Decision). Furthermore, the information provided
by interested parties shows that no dedicated equipment
is required in order to use either the product concerned
or that produced in the Community. Both the product
concerned and Community foundry coke can be used in
any cupola oven, even if the cupola oven needs to be
adjusted for the different grades of foundry coke used,
irrespective of its origin. This claim is therefore not
relevant.

It was claimed that the adjustment of the Chinese prices
for a lower fixed carbon content did not sufficiently
reflect the differences in physical characteristics between
the product concerned and the Community foundry
coke. It was thus proposed that the market value of this
difference should be based on the penalties stipulated in
the contracts for exceeding the agreed maximum levels
in each of these items.

15.12.2000

EN

Official Journal of the European Communities

L 316/35

(45)

The information presented by interested parties shows
foundry coke are generally based on
that sales of
contracts where both parties
stipulate minimum/
maximum levels for the contents of ash, moisture and
volatile matter, determine penalties that will apply if
is
those limits are exceeded and agree on prices.
therefore normal that the same price is paid for foundry
coke in different grades provided the stipulated limits are
not exceeded. Moreover, the export prices reported by
the Chinese exporting producers in their export transac-
tions used in the calculation of price undercutting are
those before the application of any contractual penalty.
In view of the above, it is considered inappropriate to
value the difference in content of ash, moisture and/or
volatile matter between the product concerned and
Community foundry coke on contractual penalties.

It

(46) One interested party claimed that in order to compare
the product concerned and the Community foundry
coke at the same level of trade, an adjustment should be
made to the Chinese import prices to include, not only
the selling and financing costs incurred by unrelated
importers, but also their profit margin.

(47)

This request is considered justifiable in order to compare
both products at the same level of trade. Therefore the
adjustment made at the provisional stage for selling and
financing costs incurred by importers in the Community
should also include the profit margin achieved by unre-
lated importers on their sales of the product concerned.
This adjustment has been done on the basis of the
weighted average profitability reported by the cooper-
ating unrelated importers during the IP, 7,2 %.

(48) On the basis of the above it is concluded that during the
IP, Chinese foundry coke was sold in the Community at
prices which undercut the Community industry's prices,
when expressed as a percentage of the latter, by 25,7 %.

used: more foundry coke would be produced with
longer coking time, but
the capacity utilisation of
foundry coke would be reduced accordingly. Also, as
foundry coke production generates around 10 % of
waste (‘coke breeze’) and at least 10-15 % of coke in
pieces with a diameter less than 80 mm, it claimed that
for a nominal capacity of 100 %, the actual production
volume of the Community industry may only be 75 %.
Finally, it argued that, unless the machinery is constantly
upgraded,
the Community industry's actual capacity
would drop by 1,3-1,5 % per year.

(51) With respect to the assessment of production capacity, it
was found that the size of foundry coke correlates not
only with the coking time (the longer the coking time,
the higher the foundry coke yield) but also with the
blend (the producer specific mix of coking coals and
antifracturants) and with the oven temperature (higher
temperature allows shorter coking time) used in the
production. In addition, the assessment of production
capacity for the Community industry was based on a
uniform formula which took into account maximal
input of coking coal per oven, operative days per year
(365), number of pushes (unloading of ovens) per day,
yield of coking coal's volatile matter converted into
coking gas during carbonisation as well as size yield. As
regards constant upgrading of the machinery, this is the
reason for
the yearly investments made by the
Community industry as explained in recital 91 of the
provisional Decision. In view of the above, the claim
that the decrease in production and capacity utilisation
is independent of the effect of the dumped imports
should be rejected and the conclusions in recitals 78 to
81 of the provisional Decision are hereby confirmed.

4. Situation of the Community industry

(49)

In the absence of any comments, the provisional find-
ings regarding stocks, sales volume and market share
(growth), investments, employment and productivity are
hereby confirmed.

(52)

4.1. Production, capacity and capacity utilisation

(50) One user argued that the decrease in production and
capacity utilisation found in the provisional Decision
was not due to the increase in the volume of imports of
the product concerned but rather to technical factors. To
support this statement, it pointed out that the quantity
of foundry coke produced depended on the coking time

4.2. Sales prices and factors affecting sales prices including

wages

the prices of

In the first phase,

Regarding the development of the weighted average unit
prices and unit costs, two phases could be identified, one
between 1995 and 1997 and the second between 1997
and the IP.
the
Community industry increased by 6 %, coinciding with
an increase in the prices of the raw materials. In the
second
prices
the Community
decreased more than the prices of the raw materials
while its unit costs increased due to a decrease in the
capacity
the
Community industry's prices were prevented from
increasing to a level sufficient to cover costs between
1997 and the IP.

circumstances

utilisation.

industry's

phase,

these

In

L 316/36

EN

Official Journal of the European Communities

15.12.2000

(53)

Concerning the cost of production two phases were
identified. Between 1995 and 1997, despite an increase
in the costs (mainly in raw materials) these production
costs could be passed on to the sales prices and there-
fore
the Community industry remained profitable.
However, between 1997 and the IP, the capacity utilisa-
tion of the Community industry decreased and therefore
fixed costs which, in such an industry comprise all costs
except
raw materials, had to be allocated over a
declining production, with the result that the unit costs
increased. Furthermore, the sales volume and sales prices
of the Community industry decreased. The combined
effect of an, increase in costs and a decrease in sales
resulted in the
volume (– 8 %) and prices
amounting to
Community industry posting losses
– 5.5 % in the IP.

(– 7 %)

5. Conclusion on injury

(59) On the basis of the facts and considerations in recitals
50 to 58, it can clearly be concluded that the situation
of the Community industry in the IP was injurious. In
particular, the Community industry suffered losses as a
result of a decrease in its sales volume and sales prices,
together with an increase in unit costs resulting from a
decrease in capacity utilisation. The provisional findings
in recital 98 of the provisional Decision regarding the
material injury suffered by the Community industry are
therefore confirmed.

G. CAUSATION

(54)

Regarding in particular labour costs, despite decreasing
in absolute terms between 1997 and the IP, the unit cost
of labour has increased as a result of the decrease in the
units produced.

(60)

(55)

(56)

(57)

4.3. Profitability, cash flow, return on investment and ability

to raise capital

It should be noted that the findings in recital 89 of the
provisional Decision concerning the Community indus-
try's profitability have been revised to take account of a
calculation error which occurred at the provisional stage.
The profitability of
the Community industry also
followed the above mentioned two phases: between
1995 and 1997 profitability remained positive (9,4 % in
1995, 14,1 % in 1996 and 8,1 % in 1997) whereas
profitability decreased to 1,3 % in 1998 and then to
losses amounting to – 5,5 % in the IP.

Regarding cash flow it developed from an index of 100
in 1995, to 141 in 1996, to 96 in 1997, to 33 in 1998
and to – 16 in the IP. The trend shows that the situation
of the Community industry in terms of cash flow deteri-
orated sharply between 1997 and the IP.

Concerning return on investments and ability to raise
capital, between 1995 and 1997 the profit before taxes
generated by the Community industry was sufficient to
cover investments in new assets. However, in 1998 and
in the IP, the profits generated could not cover the
investments in new assets.

In the provisional Decision it was concluded that there
was strong evidence of a causal
link between the
dumped Chinese imports and the material injury found.
It was found that, while consumption remained stable,
the volume of Chinese imports increased by 63 % over
the period considered and their market share increased
from 17,3 % in 1995 to 27,9 % in the IP. The increase
in market share by the Chinese imports corresponded to
the
the
the
Community industry. Furthermore,
Chinese imports significantly undercut
the
Community industry in the IP (25,7 %). The increase in
Chinese imports coincided with a decrease in the sales
volume and in the capacity utilisation of the Community
industry, contributing to an increase in unit costs, which
led to substantial

share of
the prices of
those of

losses in the IP (– 5,5 %).

in the market

same decrease

(61)

(62)

Several interested parties claimed that the evolution of
the Community industry's prices and costs were not
influenced by the Chinese imports but were driven by
the prices of the main raw material, coking coal. In
particular, one user claimed that the price of the coking
coal imported from the USA increased substantially over
the period, essentially as a result of the appreciation of
the US dollar which could not be compensated by a
decrease in freight costs. However, no supporting
evidence was provided.

the

Regarding coking coal prices, as stated in recital 119 of
the provisional Decision,
raw material prices
increased between 1995 and 1997 and then decreased
between 1997 and the IP. Although the ECU/EUR depre-
ciated against the US dollar during the period consid-
ered, it was found that both fob-prices of coking coal
from the USA and Atlantic freight costs have decreased,
compensating the effects of the appreciation of the US
dollar since 1997.

4.4. Magnitude of the actual margin of dumping

(63)

(58) As concerns the impact on the Community industry of
the magnitude of the actual margin of dumping, given
the volume and the prices of the imports from the PRC,
this impact cannot be considered to be negligible.

Furthermore, the sales prices of Community foundry
coke between 1997 and the IP decreased by more than
the decrease in the unit price of raw materials. On this
basis, the conclusion in recital 120 of the provisional
Decision that
the Community industry's sales prices
decreased faster than the decrease in raw material prices
is hereby confirmed.

15.12.2000

EN

Official Journal of the European Communities

L 316/37

(64) One exporting producer also argued that Chinese
imports could not have caused injury to the Community
industry as
the Community industry's profitability
increased between 1995 and 1996 while the Chinese
import prices were at their lowest level during the same
period.

(65)

(66)

In this respect it should firstly be noted that the causal
link between the dumped imports and the situation of
the Community industry should be established during
the IP. Moreover, the development of Chinese import
prices between 1995 and 1997 was found to be linked
to the improved stability of quality of
the product
concerned. Finally,
in the IP the Chinese prices were
found to have decreased and to substantially undercut
those of the Community industry, which resulted in a
significant increase in the volume of Chinese imports in
the IP.

In conclusion and, given that no other possible injury
factors have been found nor have any further arguments
concerning the causal link between the dumped imports
originating in the PRC and the material
injury been
submitted, the provisional findings on the causation of
injury in recitals 99 to 127 of the provisional Decision
are hereby confirmed.

H. COMMUNITY INTEREST

1. Preliminary remarks

(67)

It should be recalled from recitals 128 to 184 of the
the
provisional Decision that an appreciation of all
various interests was made, including the interests of the
Community industry, importers and industrial users. The
Commission provisionally concluded that there were no
compelling reasons not to impose anti-dumping meas-
ures against the dumped imports originating in the PRC.

2. Impact of

the measures on the Community

industry

larger quantities of different kinds of coal products,
including foundry coke. It also claimed that there are no
adequate alternative sources of
supply to Chinese
foundry coke.

(70)

It should firstly be noted that any economy of scale
attributable to the imports of the product concerned is a
result of dumping practices by the Chinese exporting
producers. Furthermore,
the
total coal business affected by the imposition of anti-
dumping measures on foundry coke (less than 2,5 % of
total
turnover) negates the possibility of substantial
economies of scale being seriously jeopardised.

the small percentage of

(71) As regards alternative sources of supply,

to prevent

imports of

it should be
recalled that the aim of the imposition of anti-dumping
measures is not
the product
concerned into the Community, but to eliminate the
trade distorting effects of the injurious dumping and to
restore effective competition. Moreover,
it is unlikely
that importers/traders would cease importing from the
PRC given the investments made in the PRC and the
importers/
the product concerned. Finally,
quality of
traders also trade in foundry coke produced by the
Community industry.

(72)

Consequently, the conclusions in recitals 146 to 151 of
the provisional Decision regarding the likely impact of
anti-dumping measures on importers/traders are hereby
confirmed.

4. Impact of the measures on users

4.1. Preliminary remarks

(73) At the provisional stage of the investigation, the likely
effects of
imposing/not-imposing anti-dumping meas-
ures were examined on the basis of the substantiated
information presented by cooperating users, including a
major producer of stone wool and a number of foun-
dries.

(68) As no new facts or arguments were submitted by any
party with regard to the impact of the anti-dumping
measures on the Community industry, the findings in
recitals 135 to 145 of
the provisional Decision are
hereby confirmed.

(74)

Certain users argued that the data used to examine the
impact of anti-dumping duties on the foundries fell
short of being representative. A further examination of
the effects of the imposition of measures on users was
made on the basis of additional
information received
from the following users:

3. Impact of the measures on importers/traders

S t o n e w o o l p r o d u c e r s

(69) One importer argued that the interests of importers/
traders had not been properly assessed. In particular, it
claimed that although the product concerned was a
small part of the importers/traders overall activities, it
had a substantial positive effect on their total costs and
turnover due to the economies of scale of importing

— Partek Paroc Oy, Helsinki, Finland,

F o u n d r i e s

— CFFC-Pamco Industries SA, Paris, France,

— Chamberlin & Hill plc, Walsall, UK,

L 316/38

EN

Official Journal of the European Communities

15.12.2000

— Cradley Castings Ltd, Cradley, UK,

(79)

— Darcast Components Ltd, Smethwick, UK,

— Eisengießerei Kronach Karl Sperber GmbH, Kronach,

Germany,

— FASS SA, Sancerre, France,

— Fonderia de Montorso Spa, Vicenza, Italy,

— Fonderies franco-belges SA, Merville, France,

— Fucoli SA, Coimbra, Portugal,

— Godin SA, Guise, France,

— Guss Komponenten GmbH, Hall

in Tirol, Austria,

— Jones and Champbell Ltd, Larbert, UK.

— Piret SA, Gilly, Belgium,

— Römheld & Moelle GmbH, Mainz, Germany,

— Sachs Gießerei GmbH, Kitzingen, Germany,

— Tiroler Röhren- und Metallwerke AG, Hall in Tirol,

Austria,

— V. Luzuriaga-Tafalla SA, Tafalla, Spain,

L e a d s m e l t e r

— Tudor SA, Madrid, Spain.

4.2. Stone wool producers

(75)

(76)

(77)

(78)

The definitive conclusions regarding the impact of the
anti-dumping measures on stone wool producers are
based on the information provided by Rockwool Inter-
national A/S, Copenhagen, Denmark, on behalf of four
subsidiaries as mentioned in recital 132 of the provi-
sional Decision, and Partek Paroc Oy, Helsinki, Finland.

Foundry coke has been found to represent 2,8 % of the
total cost of production of stone wool producers, whose
profitability was found to have increased from 6,5 % in
1997 to 7,9 % in 1998.

It was claimed that contrary to the provisional findings,
the Community industry was likely to increase its prices
by the full amount of the anti-dumping duty imposed.

The information provided by interested parties shows
that the prices of Community producers have largely
remained at the same level as during the IP, since price
negotiations are normally conducted annually at the end
of the year. In the negotiations for the year 2001, price
increases are being discussed. These increases can be
attributed partly to the imposition of the anti-dumping
measure but also to the increase in the Community
industry's costs. The expected benefit to the Community
industry from the imposition of anti-dumping measures
is likely to be in the form of increased production and
sales resulting in a decrease in unit costs, allowing the
Community industry to regin profitability.

the Community
In any event, even assuming that
industry increases its prices by the full amount of the
duty, the maximum hypothetical increase in the costs of
stone wool producers would be around 1 %. Should this
occur and assuming that all other costs items remain
equal, an increase in the costs of stone wool producers
resulting from the imposition of anti-dumping measures
as described above would require the maximum increase
in prices of less than 1 % in order to maintain the same
level of profitability.

(80)

(81)

It was reiterated that stone wool producers will be
forced to relocate production facilities in order to avoid
a reduction of profitability if anti-dumping measures are
imposed, since the resulting increases in costs cannot be
passed on to the final customers.

It should be noted that in the stone wool market it is
fundamental that producers are situated close to their
industrial customers, and have flexibility in production
in order to meet the required demand and service. Given
the above findings on the likely effects of the anti-
dumping measures and the nature of the stone wool
market in recital 79, it is considered unlikely that such a
price increase of foundry coke would result in a reloca-
tion of production outside the Community.

(82)

In view of the above, the conclusions in recitals 153 to
166 of the provisional Decision, that the imposition of
anti-dumping measures on Chinese foundry coke is not
expected to significantly affect the economic situation of
stone wool producers, are hereby confirmed.

4.3. Foundries

(83)

(84)

In recital 175 of the provisional Decision the Commis-
sion indicated that it would further look into the profit-
ability of foundries at the definitive stage on the basis of
additional
information submitted by interested parties
subsequent to the disclosure of the provisional findings.

The conclusions set out below in recitals 88 and 89 are
based on all substantiated data provided by 22 foundries
of different sizes in terms of turnover, employment and
profitability. They are located in eight Member States
(United Kingdom, Belgium, Austria, Portugal, Germany,
France, Italy and Spain) and produce a wide range of
castings for the main end-use sectors such as the auto-
motive industry (e.g. motor blocks and power steerings),
the mechanical
industry (e.g. pumps and blowers) as
well as the construction industry (for example water
conveyance and drainage). In view of the above, the data
provided by these companies is considered sufficiently
representative of the situation of foundries.

15.12.2000

EN

Official Journal of the European Communities

L 316/39

(85)

(86)

(87)

(88)

(89)

The Committee of Associations of European Foundries
(CAEF) argued that the interest of foundries had not
been properly assessed at the provisional stage. In partic-
ular,
it claimed that foundries that cooperated at the
provisional stage and whose data was retained for this
analysis produced mainly high added value products
generating profit margins well above the industry
average and were thus unrepresentative of the situation
of this industry. The CAEF supported this allegation by
submitting information on the profitability of some indi-
vidual foundries as well as estimates provided by the
national foundry associations claiming that the latter
should be used to assess the impact of anti-dumping
measures on the overall sector of foundries and that the
data submitted by individual companies should be disre-
garded.

In this respect it should be noted that the data presented
by the national foundry associations are based on esti-
mations and/or
relate also to foundries not using
foundry coke. Furthermore, the data used to analyse the
effect of the anti-dumping measures on foundries stem
from foundries of different sizes in several Member
States and producing castings for various end-uses.
Moreover, the data provided by these companies has
been duly substantiated, namely by audited accounts. In
it does not appear appropriate to
view of the above,
disregard, the data provided by cooperating foundries
and to use in its place the information presented by the
national foundry associations.

The CAEF reiterated its argument that the imposition of
anti-dumping measures would result in a cost increase
for foundries. Such increase in costs, which foundries
cannot pass on to their customers, would translate into
decreasing profits which would have to be compensated
by a decrease in the workforce, the latter being more
significant
the Community industry of
foundry coke. It also pointed out that any increase in the
price of foundry coke would affect the competitiveness
of the foundries.

than that of

Since foundry coke has been found to represent 1,8 % of
the foundries' total cost of production, the imposition of
an anti-dumping duty may result in a maximum hypo-
thetical increase in costs of foundries of less than 0,8 %.
This has been calculated even by assuming that the
importers pass
the
Community industry increases its prices by the full
amount of the duty.

the duty fully on and that

Subsequently, it is unlikely that the estimated increase in
the foundries' costs of production would endanger their
profitability. In order to appreciate such a cost impact, it
should be noted that between 1997 and 1998 the
average price per tonne of castings increased by 4 %. As
the foundries' costs of production remained stable, their
weighted average profitability increased from 4,4 % in
1997 to 7,4 % in 1998. Furthermore, it has to be borne

in mind that the foundries have to cope with fluctu-
ations in their main cost items such as prices of scrap,
namely the main raw material used in the production of
cast
iron, as well as fluctuations in exchange rates.
Consequently, the negative impact of the measures for
foundries' cost of production, profitability, competitive-
ness or employment, if any, is likely to be very limited.

(90)

This further analysis has confirmed that the conclusions
drawn by the Commission in recital 176 of the provi-
sional Decision, that the impact of an anti-dumping
measure is not likely to significantly affect the economic
situation of Community foundries, is hereby confirmed.

4.4. Zinc or lead smelter

(91) One response was received from a company using
foundry coke in the captive production of lead and lead
alloys used in its battery manufacturing plant. Since this
producer smelts lead in a captive operation, indicators
such as costs, prices and profitability were not available
for the activity relating to the smelting of lead. The data
provided by this company could, therefore, not be taken
into consideration for the assessment of the impact of
imposing an anti-dumping measure.

5. Other arguments concerning Community interest

(92) Users argued that, as the Community industry is not
capable of supplying the entire Community market, any
change in the current structure of supply could result in
a general supply shortage. It has been argued that the
imposition of provisional anti-dumping measures has
already led to a shortage of supply in the Community
market and to a price increase negatively affecting the
position of Community users.

(93)

(94)

First of all, it should be recalled that it is likely that in
the absence of anti-dumping measures, the situation of
the Community industry would further deteriorate,
leading to medium/long-term closure of companies, as
stated in recitals 177 to 180 of the provisional Decision.
This conclusion has been reached particularly in view of
the loss of market share and deterioration of the profit-
ability of the Community industry during the period
considered. This situation would result in a limitation in
the sources of supply which could lead to a shortage of
supply, as well as a reduction in effective competition on
the Community market.

Secondly, it is unlikely that the imports from the PRC
will disappear from the Community market as a result of
the imposition of anti-dumping measures. This conclu-
sion has been reached in particular in view of the invest-
ments made by Community importers/traders, the chan-
nels of supply already established in the PRC, the quality
of
the
Community industry is not capable of supplying the
entire Community market.

the product concerned and the fact

that

L 316/40

EN

Official Journal of the European Communities

15.12.2000

(95)

information available to the Commission
In addition,
indicates that certain shortages of Chinese foundry coke
took place after
the anti-dumping
the initiation of
proceeding and before the imposition of provisional
measures for reasons unrelated to the anti-dumping
proceeding. Indeed, according to this information, the
limited supplies of Chinese foundry coke were due to a
shortage of railcars to transport the foundry coke from
inland China to the harbours and to a shortage of
coking coal in the PRC, which in turn led to a certain
price increase. The reduced production or even disap-
pearance of the Community industry would in such
circumstances
the
Community market on Chinese foundry coke.

dependence of

accentuate

the

6. Conclusion on Community interest

(96) After carefully examining all the arguments raised, it is
concluded that there are no compelling reasons not to
impose anti-dumping measures in the present case.
Therefore the conclusions set out in recitals 128 to 184
of the provisional Decision are confirmed.

I. DEFINITIVE ANTI-DUMPING MEASURES

(97)

In view of the conclusions reached regarding dumping,
injury, causation and Community interest, it is consid-
ered that definitive anti-dumping measures should be
taken in order to prevent further injury being caused to
the Community industry by the dumped imports origin-
ating in the PRC.

1. Injury elimination level

(98)

the prices of

In the provisional Decision and for establishing the level
of the duty, account was taken of the dumping margin
found and the duty necessary to remove the injury
caused by the dumped imports. It was therefore provi-
the removal of such injury
sionally determined that
required that
the Chinese imports be
increased to a non-injurious level. This non-injurious
the prices of
price was based on a comparison of
the
dumped imports and the non-injurious price of
Community industry. The latter was calculated by
adding to the average sales prices of the Community
industry the profit shortfall during the IP and a reason-
able margin of profit. A profit margin of 9,6 % on sales
before tax appeared to be reasonable taking into account
what amount the Community industry could reasonably
expect to obtain in the absence of dumping.

(99)

Some interested parties questioned both the reasonable-
ness of the profit margin used and its justification. They
claimed that
the profit margin achieved by the
Community industry in 1996 was exceptional and that a
more reasonable profit margin would be that achieved in
1995 or in 1997.

(100) The determination of the injury elimination level was
re-examined in light of the revised profitability findings.
It was found that a profit margin of 10,5 % on sales
would be the profitability that the Community industry
could have achieved in the absence of
the dumped
imports. This was the weighted average profit margin
achieved by the Community industry between 1995 to
1997 time before the increased market penetration of
the Chinese imports.

(101) The Chinese import prices as adjusted for the calculation
of price undercutting were compared, for the IP, with
the weighted average non-injurious prices of
the
Community industry. The difference was then expressed
as a percentage of the total cif import value. For the
purpose of calculating a country-wide injury margin,
account was taken of the low level of cooperation and
the same methodology as that described in recital 34
was followed. The definitive country-wide injury margin
amounted to 43,6 %.

2. Form and level of the definitive measure

(102) Since the injury margin is below the dumping margin
established, the definitive duty should be set at the level
of the injury margin established at 43,6 %.

(103)

In order to ensure the efficiency of the measures and to
discourage any absorption of the anti-dumping measure
through a decrease in the export prices, it was found
the duty should be imposed in the form of a
that
specific amount per tonne. This amount results from the
application of the injury margin to the export prices
used in the calculation of the injury elimination level
during the IP. Therefore the duty amounts to EUR 32,6
per tonne.

(104) Subsequent to the imposition of the provisional anti-
dumping measures, certain Chinese exporters that coop-
erated in the investigation offered undertakings within
the meaning of Article 8(1) of
the basic Decision.
However, these undertakings could not be accepted, as
they did not contain the necessary guarantees on the
part of
to allow adequate
In these circumstances, a specific duty
monitoring.
should be imposed at the level of injury definitively
established. It is to be noted, however, that the measure
could be modified, if ever there was a change in circum-
stances such that the conditions for the acceptance of an
undertaking were met.

the Chinese authorities

J. COLLECTION OF THE PROVISIONAL DUTY

(105)

In view of the clarification of the product scope subse-
quent to the imposition of the provisional measures, the
amounts secured by way of provisional anti-dumping
imports
duty should be definitively collected for all
except in those cases where coke of coal in pieces larger
than 80 mm has been declared for import together with
coke of coal of smaller sizes, in which cases the amounts
secured by way of provisional anti-dumping duties
should be released,

15.12.2000

EN

Official Journal of the European Communities

L 316/41

HAS ADOPTED THIS DECISION:

Article 1

1.
Except as provided for in paragraph 3 a definitive anti-
dumping duty is hereby imposed on imports of coke of coal in
pieces larger than 80 mm in maximum diameter, falling within
CN code ex 2704 00 19 (TARIC code 2704 00 19 10), and
originating in the People's Republic of China.

2.
The amount of the anti-dumping duty shall be equal to
the fixed amount of EUR 32,6 per tonne of dry net weight.

in pieces of smaller sizes,

3.
In cases where the goods declared for release into free
circulation are a mixture of coke as described in paragraph 1
together with coke of coal
the
quantity of coke subject to the anti-dumping duty in paragraph
2 shall be determined in accordance with Articles 68 to 70 of
Council Regulation (EEC) No 2913/92 (1). However, the anti-
dumping duty shall not apply to such a mixture of coke pieces,
where it is determined that the maximum diameter of the coke
pieces forming part of the goods declared for release into free
circulation does not exceed 100 mm.

4.
Unless otherwise specified,
concerning customs duties shall apply.

the provisions

in force

In cases where goods have been damaged before entry
5.
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 (2), 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.

Article 2

The amounts secured by way of provisional anti-dumping duty
imposed by Decision No 1238/2000/ECSC shall be definitively
collected at
the duty definitively imposed on
imports of coke of coal in pieces with a diameter of more than
80 mm and originating in the People's Republic of China.

the rate of

The amounts secured in excess of the definitive rate of anti-
dumping duty shall be released.

In cases where coke of coal in pieces with a diameter of more
than 80 mm has been declared for import together with coke
of coal in pieces of smaller sizes, the amounts secured by way
of provisional anti-dumping duty shall be released.

Article 3

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

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

Done at Brussels, 14 December 2000.

For the Commission

Pascal LAMY

Member of the Commission

(1) OJ L 302, 19.10.1992, p. 1.

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