2001/230/EC: Commission Decision of 21 February 2001 terminating the anti-dumping proceeding concerning imports of ferro-silicon originating in Brazil, the People's Republic of China, Kazakhstan, Russia, Ukraine and Venezuela (notified under document number C(2001) 414)
Date: 2001-02-21
Institutions: European Commission
Subjects: Brazil, China, Kazakhstan, Russia, Ukraine, Venezuela, anti-dumping duty, anti-dumping legislation, ferrous metal, import

L 84/36

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Official Journal of the European Communities

23.3.2001

COMMISSION

COMMISSION DECISION

of 21 February 2001

terminating the anti-dumping proceeding concerning imports of ferro-silicon originating in Brazil,
the People's Republic of China, Kazakhstan, Russia, Ukraine and Venezuela

(notified under document number C(2001) 414)

(2001/230/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 384/96 of 22
December 1995 on protection against dumped imports from
countries not members of the European Community (1), as last
amended by Regulation (EC) No 2238/2000 (2), and in partic-
ular Articles 9 and 11(2) thereof,

After consulting the Advisory Committee,

Whereas:

A. PROCEDURE

1. Previous investigations

(1)

Anti-dumping measures on imports of
ferro-silicon
(FeSi) originating in Venezuela have been in force since
1983 and on imports originating in Brazil, Kazakhstan,
Russia and the Ukraine since 1987. These measures were
added to and extended by the imposition of definitive
anti-dumping measures against imports originating in
Kazakhstan, Russia, Ukraine, Norway, Iceland, Sweden,
Brazil and Venezuela by Council Regulation (EC) No
3359/93 of 2 December 1993 imposing amended anti-
dumping measures on imports of ferro-silicon origin-
ating in Russia, Kazakhstan, Ukraine, Iceland, Norway,
Sweden, Venezuela and Brazil (3). Measures on imports
from Iceland, Norway and Sweden were suspended by
the application of Council Regulation (EC) No 5/94 of
22 December 1993 on the suspension of anti-dumping

(1) OJ L 56, 6.3.1996, p. 1.
(2) OJ L 257, 11.10.2000, p. 2.
(3) OJ L 302, 9.12.1993, p. 1.

(2)

(3)

(4)

(5)

measures against EFTA countries
from 1 January
1994 (4). Measures on imports from Brazil were partially
reviewed and, by Council Regulation (EC) No 351/98 (5),
the duty on two Brazilian exporting producers was
reduced to 0 % because of a finding of no dumping.

Definitive anti-dumping measures were also imposed
against imports from the People's Republic of China
(China) and South Africa by Council Regulation (EC) No
621/94 in March 1994 (6).

Definitive anti-dumping duties concerning imports of
FeSi originating in Egypt and Poland were imposed by
Council Regulation (EEC) No 3642/92 (7). These duties
lapsed as a result of Commission Decision 1999/
426/EC (8), whereby it was concluded that the expiry of
these measures was not likely to lead to a recurrence of
injury.

2. Request for review

Following the publication of the notice of impending
expiry (9) of the anti-dumping measures, the complai-
nant in the original investigation, the Liaison Committee
of the Ferro-Alloy Industry (Euroalliages, hereinafter ‘the
applicant’), requested an expiry review of the measures
concerning Brazil, China, Kazakhstan, Russia, Ukraine
and Venezuela pursuant to Article 11(2) of Regulation
(EC) No 384/96 (the basic Regulation).

Having determined, after consultation of the Advisory
Committee, that sufficient evidence existed for the initia-
tion of an expiry review, the Commission published a
notice of initiation in the Official Journal of the European
Communities (10) and commenced the investigation. The
investigation lasted more than two years due to difficul-
ties met in gathering certain information (in relation to
the large number of countries involved and to the
the Community in
changes of country structure of
1995) and to the time given to the parties to present
their views in relation to the complexity of the analysis
of the Community interest.

(4) OJ L 3, 5.1.1994, p. 1.
(5) OJ L 42, 14.2.1998, p. 1.
(6) OJ L 77, 19.3.1994, p. 48.
(7) OJ L 369, 18.12.1992, p. 1.
(8) OJ L 166, 1.7.1999, p. 91.
(9) OJ C 177, 10.6.1998, p. 4.
(10) OJ C 382, 9.12.1998, p. 9.

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Official Journal of the European Communities

L 84/37

(6)

received to review the measures
No request was
concerning South Africa and these measures, therefore,
expired on 20 March 1999.

(7)

(8)

3. Investigation

The investigation of dumping covered the period from 1
October 1997 to 30 September 1998 (hereinafter the
‘investigation period’ or ‘IP’). The examination of injury
covered the period from 1994 up to the end of the IP
(‘analysis period’).

the

advised

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

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

as well

Community

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

(9)

The Commission sought and verified all the information
deemed necessary for its investigation, and carried out
verifications at the premises of the following companies:

(a) Community producers:

Ferroatlántica SL, Spain,

Pechiney Electrometallurgie, France,

Vargön Alloys AB, Sweden;

(b) importers:

Considar Europe SA, Belgium;

(c) exporting producers:

Brazil

Cia. Ferroligas Minas Gerais (Minasligas),

Cia. de Ferro Ligas da Bahia (Ferbasa) SA,

Italmagnesio Nordeste SA,

Nova Era Silicon SA,

Rima Industrial SA:

Venezuela

Ferroatlántica de Venezuela SA (Ferroven).

(10) All the parties concerned were informed of the essential
facts and considerations on the basis of which the
conclusions of this review were based. They were also
granted a period within which to make representations
subsequent
representations
received, within the deadlines, were carefully considered
and where deemed appropriate, taken into account for
the findings.

to this disclosure. The

B. PRODUCT UNDER CONSIDERATION

1. Product under consideration

(11)

The product under consideration by this investigation is
the same as that concerned by the original investigation,
i.e. FeSi, excluding products containing more than 4 %
of magnesium. Production of FeSi takes place in electric
arc furnaces by means of reducing quartz using carbon-
bearing products. The product is used as a deoxidiser
and as an alloying component in the iron and steel
industry. FeSi is sold in the form of lumps, grains or
powder and exists in various qualities depending on the
silicon and the impurity content (i.e. aluminium, carbon,
etc.). FeSi with a silicon content of 70 % and higher was
considered as high purity, with a silicon content of more
than 55 % and less than 70 % as medium purity, and
with a silicon content of less than 55 % as low purity
FeSi.

(12)

It was found that all different forms and qualities of FeSi
exported from the countries concerned had the same
basic physical and chemical characteristics and essen-
tially the same end-uses. They were therefore considered
to form a single product. The product under considera-
tion currently falls within CN codes 7202 21 10,
7202 21 90 and 7202 29 90.

2. Like product

(13)

The vast majority of FeSi produced in the Community is
high purity, i.e. FeSi with a purity of 75 % or more (FeSi
75). It was established that the FeSi produced and sold in
the Brazilian and Venezuelan markets was alike within
the meaning of Article 1(4) of the basic Regulation to
the FeSi exported from Brazil and Venezuela to the
Community as they were identical, or closely similar, in
terms of physical and chemical characteristics and end
uses. Furthermore, it was found that there were no basic
differences in the physical and chemical characteristics
and the end-uses of FeSi exported from China, Kazakh-
stan, Russia and Ukraine to the Community and the
product produced and sold in the domestic market of
the analogue country referred to in recital 24. Also,
there were no differences between FeSi exported from
the countries concerned and the product produced and
sold by the applicant Community producers in the
Community market.

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C. CONTINUATION OR RECURRENCE OF DUMPING

producer shortly after the IP as discussed in recitals 80
to 84.

1. Methodology

(14)

This section explains the general methodology used to
establish whether the expiry of the measures currently in
force would be likely to lead to a continuation or recur-
rence of dumping.

(19)

The Commission has taken note that the US administra-
tion repealed their existing anti-dumping measures
against imports of FeSi originating in the same countries
as those subject to this proceeding in August 1999. This
meant
that one more market was now available to
which these countries could redirect some sales.

General

Normal value

(20)

(21)

(15)

In the case of the likely continuation of dumping, the
Commission investigated the existence of dumping on
exports from the countries concerned to the Community
during the IP on the grounds that if dumping was taking
place, then it was reasonable to consider, in the absence
of indications to the contrary, that it would be likely to
continue in the future should measures be repealed.
These dumping calculations were made irrespective of
the fact that for most of the countries under invest-
igation the volume of exports to the Community was
it was considered appropriate to
small. Nevertheless,
examine the general level of dumping on such volumes
as this could be used as one indicator of the likelihood
of the existence of dumping on larger volumes should
the current measures be repealed (see recital 16).

(16) As to the examination of

i.e.

the likelihood of

the likely recurrence of
dumping,
increased exports at
dumped prices should the current measures be repealed,
which was necessary where the volumes from the coun-
tries concerned were relatively small, the Commission
investigated (a) whether future dumping was likely and
(b) whether any such dumping would take place in
significant quantities. The likelihood of future dumping
was assessed in relation to exports from the countries
concerned to non-member countries and the question of
increased volumes was addressed by examining all rele-
vant market developments, both domestic and export,
such as evolution of capacities, production, stocks and
prices on the various markets.

(17) As the purpose of this type of review is to assess the
likelihood of
future dumping should measures be
removed, it was not considered necessary or appropriate
to calculate dumping margins or allowances with the
precision that would be necessary in an anti-dumping
investigation carried out under Article 5 of the basic
Regulation. Moreover,
the detailed investigation was
restricted to a sample three-month period within the
investigation period, normally the last quarter, unless
otherwise specified.

(18)

For Venezuela, findings based on dumping calculations
were not considered determinant, due to the privatisa-
the sole known Venezuelan
tion and takeover of
cooperating Community
exporting producer by a

For Brazil, the Commission considered that the domestic
sales in Brazil were sufficiently representative to permit
their use for a normal value calculation.

The Commission then examined the position with
regard to whether the domestic sales of each company
were made in the ordinary course of trade pursuant to
Article 2(4) of the basic Regulation. This was done by
establishing the proportion of domestic sales to indepen-
dent customers, of each exported product type, not sold
at a loss on the domestic market during the investigation
period.

(a) For those product types where more than 80 % by
volume, of sales on the domestic market were not
below unit costs, and where the weighted average
sales price was equal to or higher than the weighted
average production cost, normal value, by product
type, was calculated as the weighted average of all
domestic sales prices of the type in question.

(b) For those product types where at least 10 %, but no
more than 80 %, by volume, of
sales on the
domestic market, were not below unit costs, normal
value, by product
the
weighted average of domestic sales prices which
were made at prices equal to or above unit costs
only, of the type in question.

type, was calculated as

(c) For those product types where less than 10 %, by
volume, was sold on the domestic market, at a price
not below unit costs,
it was considered that the
product type concerned was not sold in the ordinary
course of trade and therefore, normal value was
constructed.

(22) Normal values were constructed in accordance with
Article 2(6) of the basic Regulation on the basis of the
manufacturing cost of the type concerned to which was
added an amount for selling, general and administrative
expenses (SG & A) and profit. The amount for SG & A
was that incurred by the producer concerned for the like
for profit equated to the
product and the amount
weighted average profit
realised by the producers
concerned on sales of the like product in the ordinary
course of trade.

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L 84/39

(23)

(24)

Since China, Kazakhstan, Russia and the Ukraine are
considered to be non-market economy countries, it was
necessary to establish a normal value by reference to a
market economy non-member country,
in accordance
with Article 2(7) of the basic Regulation. Brazil was
suggested by the applicant and mentioned in the notice
of
initiation. Within the time limit specified in that
notice, no exporting producer expressed disagreement
with this proposal, while one exporting producer in the
Ukraine expressed agreement.

to

strong

producers

Brazil was considered to be a reasonable choice of
analogue country as
significant production,
it has
capacity and domestic consumption. There are several
internal
leading
domestic
competition and Brazilian domestic sales of the product
concerned are significant. Furthermore, as Brazil was a
party to the present
investigation it was likely that
Brazilian producers would cooperate in the invest-
igation. An alternative analogue country was neither
proposed nor found. In these circumstances, Brazil was
chosen as the analogue country and normal values were
established on the basis of the weighted average normal
values established for the individual Brazilian companies
by category of silicon content.

Export price

(25)

The export price was established in accordance with
Article 2(8) of the basic Regulation, on the basis of
export prices actually paid or payable by independent
customers in the Community.

(26) Where no information was provided by the exporting
producers of a specific country, or where the informa-
tion provided by the exporting producers of a specific
country was considered incomplete,
the Commission
established, pursuant to Article 18(1) of the basic Regu-
lation, an average export price for the country on the
basis of the Eurostat statistics or other facts available.

(27)

In order to assess the likelihood of a recurrence of
dumping, the Commission also established the export
prices to customers in non-member ccountries.

the outcome of the investigation if the comparison had
been carried out on an ex-factory basis.

Dumping margins

(30)

For assessing the existence of dumping margins a
comparison was made between the weighted average
normal value and the weighted average export price, by
type, on an ex-factory basis in the case of the market
economy countries and normally on a fob-exporting
country border basis for the non-market economy coun-
tries.

2. Brazil

Likelihood of continuation of dumping

(31) Normal value was based on both domestic prices and

constructed values.

(32)

(33)

For one exporting producer, who had no exports during
the last three months of the investigation period, normal
value was determined for the preceding three months
during which exports occurred,
in order to allow a
comparison with the prices of exports made during that
period.

The export price was based on the prices actually paid
or
the
payable
Community.

independent

customers

by

in

(34) Of six cooperating exporting producers, only two had
sales to the Community during the investigation period,
and these two were subject to a zero margin of duty.

(35)

To ensure a fair comparison, both the normal values and
the export prices were adjusted to an ex-factory basis.

(36) A comparison of the normal values in Brazil with export
prices to the Community from that country shows little
or no dumping overall. In any event, the dumping was
on a very low volume of exports and there are indica-
tions that this low margin of dumping was temporary
and did not continue after the investigation period.

Fair comparison

(28)

For the purpose of ensuring a fair comparison between
the normal value and the export price as required by
Article 2(10) of the basic Regulation, the Commission
took account of any differences which affected price
comparability.

(37)

(29) Accordingly, allowances for differences in transport
costs, ocean freight and insurance costs, handling,
loading and ancillary costs, import charges and indirect
taxes, packing costs, credit costs, after-sales costs,
commissions, discounts and rebates, were taken into
account as justified. Comparison was usually carried out
on an ex-works basis. For those countries where a fob
basis has been used it would have made no difference to

Likelihood of recurrence of dumping

This calculation of dumping entailed a comparison of
normal values in Brazil with export prices to non-
member countries other than the Community. Normal
values were established on the basis of actual prices in
Brazil and export prices were established on the basis of
the prices actually paid or payable by independent
customers in these non-member countries. To ensure a
fair comparison these prices were adjusted to an ex-
factory basis. A comparison of normal values with
export prices to non-member countries showed some
dumping although the information collected during the
verification visits, in particular, regarding the devaluation
of the Brazilian currency, showed that such dumping
may not have persisted.

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(38) Account was also taken of the fact that some Brazilian
exporters have been subject to a zero dumping margin
for some time, i.e. one since 1994 and two more since
the beginning of 1998, and this had not led to any
significant
to the
Community.

increase in the level of exports

(39)

The capacity utilisation rate of Brazilian exporting
producers was high during the investigation period and
the cooperating
the verification of
Brazilian exporting producers showed no evidence that
there was any intention of significantly altering the
current level and pattern of domestic sales in the fore-
seeable future.

the activities of

indicated that

(40) With regard to sales to non-member countries, most
they
Brazilian cooperating producers
would like to expand sales to the Far East.
In fact,
although the investigation showed that it would be diffi-
cult for the Brazilian producers to further develop this
market owing to strong competition from Chinese
suppliers and weak demand in Japan,
there was no
indication that Brazilian exporters would not maintain
their existing market share.

Conclusion

(41)

The examination with regard to the continuation of
dumping showed a very low level of dumping overall on
the volumes
exports to the Community. Moreover,
involved were also very small. Also, there were other
indicators,
the Brazilian
currency, which make it unlikely that there will be any
continuation of significant dumping in the foreseeable
future.

including a devaluation of

(42) Moreover, there was no indication that Brazilian expor-
ters would revert to their former levels of exports to the
Community. The pattern of sales domestically and for
export appeared settled and was considered unlikely to
change significantly in the foreseeable future.

(43)

In this respect, account was taken of the fact that some
Brazilian exporters have been subject to a zero dumping
margin for several years and this had not led to any
significant
to the
Community.

increase in the level of exports

(44) Overall, therefore, it is fair to conclude that there is little
likelihood that the repeal of measures would lead to
renewed dumping in significant quantities from Brazil.

3. People's Republic of China

Likelihood of continuation of dumping

(46)

(47)

(48)

(49)

The normal value for China was established on the basis
of the normal value in the analogue country Brazil.

The export price was determined on the basis of the
facts available by reference to Eurostat, i.e. the weighted
average value of a low import volume from China on a
cif Community frontier basis,
for all grades of FeSi
during the investigation period.

The normal values and export prices were put on a
comparable level by adjusting both the normal value and
the export price to a fob-exporting country border basis.

The analysis of normal values and export prices showed
that exports
from China to the Community were
dumped to a significant level during the investigation
period.

Likelihood of a recurrence of dumping

(50) As no Chinese exporting producers cooperated in the
investigation the likelihood of recurrence of dumping
was determined on the facts available in accordance with
Article 18(1) of the basic Regulation. In this case, the
best information was considered to be the findings made
in relation to the likelihood of continuation of dumping.
On this basis, it was considered that there was a likeli-
hood of a significant recurrence of dumping from China
should measures lapse.

(51) With no cooperation forthcoming

from Chinese
exporting producers
the findings on whether any
dumping would take place in significant volumes were
based on facts available, in accordance with Article 18(1)
of the basic Regulation. In this respect, the Commission
obtained information from industry publications and
press articles and these indicated that production in
China exceeded domestic and export demand by about
250 000 tonnes per annum with the result that signifi-
cant capacity and stock would be available for a resump-
tion of significant exports to the Community should
measures lapse.

Conclusion

(52)

The facts available clearly indicate the existence of signif-
capacities which could be directed to the
icant
Community should the current measures lapse. More-
over, the existing evidence on dumping clearly indicates
that a resumption of a significant level of imports from
China would be at dumped prices.

4. Kazakhstan

Likelihood of continuation of dumping

(45) Although questionnaires were sent to 37 exporters in
China, no replies were received. As a result, the findings
have been made on the basis of the facts available in
accordance with Article 18(1) of the basic Regulation.

(53)

The normal value for exporting producers in Kazakhstan
was established on the basis of the normal value of the
analogue country Brazil.

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(54)

(55)

The cooperating Brazilian exporting producers did not
produce FeSi with a medium silicon content, a product
type that was exported from Kazakhstan. A normal
value for this type was therefore calculated on the basis
of the simple average of the normal values of FeSi with a
high silicon content and FeSi with low silicon content as
established in Brazil.

traders

therefore,

Export sales from the only known exporting producer in
Kazakhstan were made to independent
in
Kazakhstan and,
the Kazakh exporting
producer was not certain of the ultimate destination of
the FeSi sold for export. Consequently, export prices
were derived from both exports purportedly declared by
the Kazakh customs authorities as destined for the
Community and also, on imports recorded in Eurostat.
Both sets of data showed only low volumes.

(56)

To ensure a fair comparison, the normal value and the
export prices were compared on an ex-factory or equiva-
lent basis.

(57) An analysis of

the normal values and export prices
showed the existence of dumping at substantial levels
during the investigation period.

Likelihood of a recurrence of dumping

(58)

(59)

(60)

The normal value for Kazakhstan was established on the
basis of the normal value of the analogue country, Brazil
and the export price was based on exports to non-
member countries. To ensure a fair comparison, the
normal value and the export prices were compared on
an ex-factory or equivalent basis. This analysis showed
the existence of significant dumping.

The only cooperating Kazakh exporting producer
known to the Commission did not indicate any change
in its pattern of trade in the foreseeable future.

The total FeSi production of
this Kazakh exporting
producer decreased by about 75 % in the period from
1995 to the investigation period. In the same period his
declared capacity for FeSi production decreased by about
86 %. There were indications that
the reduction in
declared capacity was at least partly due to the transfer
of the original capacity to the production of other prod-
ucts but these could be reversed. Moreover, there was
other substantial unused production capacity which
could be devoted to the production of FeSi in the future.

(61)

In addition, although the producer indicated in his ques-
tionnaire response that the furnaces currently dedicated
to FeSi production would be operating at significantly
higher levels of capacity utilisation in 1999 and 2000
than during the investigation period, no conclusive
evidence was provided to substantiate this assertion.

Conclusion

(62)

The facts available indicate the existence of significant
capacities which could be directed to the Community
the
should the current measures
existing evidence on dumping clearly indicates that any
resumption of significant exports from Kazakhstan to
the Community would be at dumped prices.

lapse. Moreover,

5. Russia

Likelihood of continuation of dumping

(63) Although the cooperating exporting producer initially
declared that he did not export
to the Community
during the investigation period, some transactions to
independent buyers with a freight destination in the
Community were identified. The company was not
certain, and it could not be established on the basis of
the documents provided, if these goods remained in the
Community or had their final destination outside the
Community. It was therefore assumed that these specific
transactions were sales to independent customers in the
Community. On this basis, an examination of the likeli-
hood of continuation of dumping was carried out. Given
the fact
to the
Community in Russia had cooperated, a second exam-
ination of the likelihood of continuation of dumping
was performed on the basis of
import
statistics.

the exporters of FeSi

that not all

the Eurostat

(64)

(65)

(66)

The normal value for Russia was established on the basis
of the normal value of the analogue country, Brazil. As
the cooperating Brazilian exporting producers did not
produce FeSi with a medium silicon content as exported
by Russia, a normal value for this type had to be calcu-
lated on the basis of the simple average of the normal
values of FeSi with a high silicon content and FeSi with a
low silicon content established in Brazil.

The only cooperating Russian producer exported his
goods either directly to unrelated buyers or via a related
trader in a non-member country. The sales via the
related trader were not included in the examination as
the relationship could have affected the level of prices
charged. The export price was therefore determined on
the basis of the prices actually paid or payable for the
product sold to independent buyers in the Community.

In view of the fact that these transactions accounted for
less than half of the total imports of FeSi originating in
Russia, as reported in the Eurostat statistics, average
export prices were additionally established on the basis
of the Eurostat statistics for the last three months of the
investigation period.

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Official Journal of the European Communities

23.3.2001

(67)

the normal value and
To ensure a fair comparison,
export prices were in some cases adjusted to a fob-
exporting country basis and in other cases to an ex-
factory basis.

6. Ukraine

(68) A comparison of the normal values and export prices
showed the existence of significant dumping during the
investigation period.

(72)

Likelihood of continuation of dumping

The cooperating Brazilian exporting producers did not
produce FeSi with a medium silicon content, a product
type that is exported by Ukraine. A normal value for this
type had to be calculated on the basis of the simple
average of the normal values of FeSi with a high silicon
content and FeSi with a low silicon content established
in Brazil.

Likelihood of recurrence of dumping

(69)

(70)

countries because

The normal value for Russia was established on the basis
of the normal value of the analogue country Brazil and
the export price was based on all exports to non-
the Russian exporting
member
producer could not identify the specific destinations of
its FeSi sold for export. To ensure a fair comparison the
normal value and the export price were adjusted to an
ex-factory level. This analysis showed the existence of
significant dumping.

The exporting producer alleged that any increase in its
sales would only be destined for its domestic market,
Asia or the Middle East rather than the Community.
However, no evidence was produced to support this
claim. In any event, even if sales were increased to some
of these markets the amount of unused capacity would
remain very significant, i.e. in volume terms higher than
the exports from Russia to the Community before the
imposition of anti-dumping measures. In these circum-
stances, it is reasonable to assume that Russian exporters
would be likely to resume exports to the Community in
significant volumes should measures lapse.

Conclusion

(71) Given that only one Russian exporting producer
responded to the questionnaire, and that according to
Eurostat this exporting producer represented less than
half of Russian exports to the Community, the informa-
tion available to the Commission was limited. The exam-
ination has shown that Russian exports were signifi-
cantly dumped both to the Community and non-
together with the
member countries. This dumping,
availability of substantial unused capacities,
indicates
the current anti-
that
is likely that
dumping measures against
the product
concerned originating in Russia would lead to dumping
in significant volumes in the foreseeable future.

the repeal of

imports of

it

(73) As the cooperating Ukrainian exporting producers did
not report any exports during the investigation period,
no export price to the Community could be established
on the basis of the information provided by the compa-
nies.

(74) However, a small volume of imports of the product
concerned originating in Ukraine were recorded in Euro-
stat. The export prices were therefore established on the
basis of the Eurostat prices of the last three months of
the investigation period.

(75)

To ensure a fair comparison both the normal value and
export price were adjusted to a fob-exporting country or
equivalent basis.

(76) A comparison of the normal values and export prices

showed the existence of significant dumping.

Likelihood of a recurrence of dumping

(77)

The normal value for Ukraine was established on the
basis of the normal value of the analogue country Brazil.
The export prices were determined on the basis of the
prices actually paid or payable for the product sold to
independent customers in non-member markets. For one
exporting producer the export prices were based on
export transactions in March to May 1998, as exports
for a later period were not reported. Transactions which
involved ‘tolling’ were not taken into account. To ensure
a fair comparison both normal values and export prices
were adjusted to a fob-exporting country border basis.
This showed the existence of significant dumping to
these non-member country markets during the invest-
igation period.

(78) Although some evidence was produced by exporting
producers that both domestic and export sales would
increase somewhat and that their capacities would fall, a
significant amount of the remaining nominal technical
capacity would still remain available for use. While it
was accepted that power and raw-material shortages
may decrease
still
concluded that it would remain substantial and higher
than the exports from Ukraine to the Community before
the imposition of anti-dumping measures.

capacity,

available

it was

the

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Conclusion

(79)

The examination of dumping with regard to the sales to
the Community during the investigation period as well
as sales to non-member country markets showed signifi-
cant dumping. This factor, as well as the level of unused
capacities, indicates that there is a likelihood that the
repeal of
the current anti-dumping measures against
imports of the product concerned from Ukraine would
lead to a continuation of dumping and a recurrence of
dumping in additional significant volumes.

(84)

7. Venezuela

addition, raw material and energy costs were now being
sourced and paid for according to normal market condi-
tions.

spare capacity, after privatisation,

The Commission further examined whether Ferroven
had sufficient
to
supply large volumes of exports to the Community. It
was concluded that significant spare capacity would still
be available. However,
it is clear that the Venezuelan
exporting producer has genuine logistical advantages
over most other world producers in terms of sales to the
American markets. In this respect,
it has been estab-
lished that the producer concerned sold most of its total
turnover of FeSi on its domestic market and in the
Americas. None of these sales was directed to the large
US market (with a volume of around 490 000 tonnes
per annum) for which, as explained in recital 19, anti-
dumping duties expired in August 1999.

Likelihood of a continuation or recurrence of dumping

(80)

The only known Venezuelan exporting producer in the
IP (Fesilven) cooperated with the investigation. Some
dumping was observed during the IP.

Conclusion

(81) However, Fesilven was privatised by the Venezuelan
Government on 4 December 1998, i.e. after the end of
the IP. As a result, the company came under the direct
control of one of the cooperating Community produ-
cers, Ferroatlántica SL, and was renamed Ferroven.

(82)

The new management of Ferroven claimed that there
was no likelihood of a recurrence of injurious dumping
from the new company, because fundamental changes
had resulted from the takeover of the assets of the old
inter alia:
company: these were,

(85) Although some dumping was observed during the IP, a
proper assessment of
the future Venezuelan export
volumes and prices to the Community cannot be carried
out without taking into account the situation of Ferro-
ven's parent company,
i.e. Ferroatlántica SL. This was
examined in the context of the likelihood of a continua-
tion or recurrence of injury and it was found that the
situation as found in the IP had changed substantially to
an extent that any dumping findings for the IP may not
prove representative for the future. In view of the injury
findings it was not considered necessary to draw any
final conclusions as to a likelihood of a continuation or
recurrence of dumping.

— a

change

from a State-owned and subsidised
company to one operating on a market economy
basis and driven by the need to make profits,

— the sales policy would be managed by Ferroatlántica
SL in Spain whereby the logistical advantages of
selling in the Americas would be exploited rather
than selling at dumped prices on other markets, such
as the Community,

— sales on the Community market would only occur
where demand could not be met by Ferroatlántica
SL's own production, and prices would be the same
as those of the Spanish company in order to main-
tain the parent
company's position on the
Community market.

(83)

at

the

contract

between

takeover

This claim was examined by the Commission by first
looking
the
Community producer and the Venezuelan Government
which clearly stated that the new company shall operate
under the key principles of ‘free enterprise’ and ‘free
competition’. At the verification visit, the Commission
noted that four directors from Ferroatlántica had been
installed within Ferroven in order to implement parent
company procedures in respect of commercial policy,
accounting, product quality and production efficiency. In

D. SITUATION IN THE COMMUNITY MARKET FOR FESI

1. Preliminary remarks

(86)

(87)

In order to ensure that comparable information was
used over the analysis period, Austria, Finland and
Sweden were
the
Community market in 1994.

considered as being part of

The applicant pointed out that Eurostat data did not
cover imports into these countries for the year 1994 and
suggested that national statistics should be used for these
countries. However, on the basis of the export/import
statistics of the Community and the three new Member
States, the trade flows between the Community and
these three countries could not be reconciled. Figures on
Community imports to these three countries for the year
1994 were,
therefore, disregarded. Consumption for
1994 in these three countries was established as outlined
in recital 88.

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2. Community consumption

(88)

For 1995 and the subsequent period, consumption was established on the basis of complete Eurostat
import statistics for the 15 Member States as well as information on sales of the Community
industry and other producers. For 1994, owing to the lack of reliable information on imports into
Austria, Finland and Sweden, consumption in these countries was estimated on the basis of their
steel production. Consumption in the other 12 Member States was established on the basis of
verified data of sales provided by the Community industry, information on production of other
Community producers as shown in the complaint and import volumes obtained using Eurostat data.

(89)

Consumption increased by 26 % over the analysis period, from around 505 000 tonnes in 1994 to
slightly less than 639 000 tonnes in the IP.

Community consumption
(tonnes)

1994

1995

1996

1997

IP

505 261

573 564

572 717

625 193

638 790

Index

100

114

113

124

126

3. Imports concerned

Preliminary remark

(90)

Bearing in mind the above findings of no likelihood of continuation or recurrence of dumping for
Brazil, the examination of a likelihood of continuation or recurrence of injury, relating to imports
originating in Brazil,

is not pursued.

Volumes and market shares

(91)

Based on information from Eurostat, imports during the analysis period from China, Ukraine and
Kazakhstan were very low, imports from Russia and Venezuela varied across years but remained
small in relation to consumption (respectively 0,4 % and 1,6 % in the IP). In total, imports from the
countries concerned had a market share of 2,1 % in the IP.

Import volumes

(in tonnes)

IP

10 381

172

2 681

146

206

Total countries concerned

13 586

Venezuela

China

Russia

Ukraine

Kazakhstan

Prices

(92) On the basis of Eurostat information, cif prices of imports (duties unpaid) in EUR/tonne, were the
following during the IP: Venezuela 434, China 471, Russia 447, Ukraine 421 and Kazakhstan 413.
These prices were well below the average price of total

imports (EUR 629/t).

(93) As import volumes from the countries concerned were very low and there was a lack of information
on prices of the exporting producers concerned due to a substantial non cooperation in this
it was not possible to carry out meaningful undercutting calculations.
investigation,

4. Imports from other non-member countries

(94)

Imports from Norway accounted for 52 % of the Community market in the IP. In the same period,
other imports had a share of 29,8 %. Poland, the Slovak Republic, the Former Yugoslavian Republic
of Macedonia and Egypt were the most important other exporting countries. Brazil had a market
share of 0,9 %.

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Origin of FeSi

Norway

Egypt

Poland

Slovak Republic

Former Yugoslav Republic of Macedonia

Brazil

Other imports

Volume
in tonnes
in the IP

329 824

22 993

36 650

35 316

30 875

5 759

125 269

cif prices in the IP
(in EUR/t)

666

574

560

552

552

676

581

(95)

The investigation has shown that imports from Norway dominate the Community market owing to
the very large volume involved. The price of these imports has been comparable with those of the
Community industry. Imports from Poland, the Slovak Republic, Former Yugoslav Republic of
Macedonia and Egypt are also at significant levels, with lower prices. Imports from Brazil are fairly
low in volume, although they were made at higher prices than those of the Community industry.

5. Situation of the Community industry

Preliminary remarks

(96)

(97)

The examination of the impact of the concerned imports on the Community industry included an
evaluation of all economic factors and indices having a bearing on the state of the industry.
However, certain factors, mentioned in Article 3(5) of the basic Regulation, are not dealt with in
detail below because they were found not to be relevant for the situation of the Community industry
in the course of this investigation. It should finally be noted that none of these factors necessarily
gives decisive guidance.

Definition of the Community industry

In 1993/1994, i.e. at the completion of the previous investigations covering the countries concerned,
the applicant Community industry consisted of three producers: Pechiney Electrometallurgie, France;
SKW Trostberg AG, Germany, and Carburos Metálicos (now Ferroatlántica SL), Spain. A fourth
Community company was also producing at that time: Industria Elettrica Indel SpA, Italy. At least
three further producers existed at the beginning of the analysis periods (1987/1988) concerning
these previous investigations: Ferrolegierungswerk Lippendorf GmbH, Germany, Officine Elettrochi-
miche Trentine, Italy and Utilizzazzioni Elettro Industriali (UEI), Italy.

(98) After the imposition of the measures under review, the structure of the Community industry
changed. Firstly, on Sweden's accession to the EC in 1995, Vargön Alloys AB, Sweden became a
Community producer (having produced FeSi for many years). Secondly, several companies ceased
production or merged with others, resulting in there being only three Community producers of FeSi
in the IP. The present expiry review was requested on behalf of these three producers representing
total Community production of the product concerned. The three applicant Community producers
(Ferroatlántica in Spain, Pechiney Electrometallurgie in France and Vargön Alloys AB in Sweden,)
cooperated in the investigation and responded to the Commission's questionnaire. These companies
constitute the Community industry.

Sales volume, market share and growth

(99) While the sales volume of the Community industry increased by 21 % over the analysis period, its
market share fell by 5 %, it is, therefore, clear that this industry's growth was less than the increase in
consumption.

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Sales in the Community
(tonnes)

1994

1995

1996

1997

IP

87 454

100 390

98 098

105 939

105 470

Index

100

115

112

121

121

Market share

17,3 %

17,5 %

17,1 %

16,9 %

16,5 %

Index of market share

100

101

99

98

95

Production, capacity and capacity utilisation

(100) As can be seen from the table below, both the production and the capacity of the Community

industry rose over the analysis period and capacity utilisation increased by 6 %.

1994

1995

1996

1997

IP

93 188

100 757

96 004

107 081

102 644

141 700

141 200

144 800

142 100

147 300

66 %

100

71 %

108

66 %

100

75 %

114

70 %

106

Production
(tonnes)

Production capacity
(tonnes)

Capacity utilisation

Index of capacity utilisation

Cost of production

(101) FeSi 75 was chosen for cost analysis in order to establish a reliable trend, given the fact that the
product mix for other FeSi qualities evolved across time. As can be seen from the table below, unit
costs per tonne of FeSi 75 (which accounts for the vast majority of the product concerned) increased
by 4 % over the analysis period.

1994

60 013

1995

1996

1997

IP

65 291

65 955

61 517

62 001

93 188

100 757

96 004

95 111

92 763

644

648

687

647

668

100

101

107

100

104

Cost of production of FeSi
75
(ECU/EUR)

Production of FeSi 75
(tonnes)

Cost of production per
tonne
(ECU/EUR)

Index of cost of production
per tonne

Employment

(102) The table below shows that from 1994 to the end of the IP, the Community industry shed 9 % of its
labour force in terms of employees directly involved in the FeSi industry. Around 15 % of the
Community industry's employees are directly employed in the production of FeSi.

Total company employees

Index

Employees directly related
to FeSi

Index

1994

2 646

100

368

100

1995

2 813

106

358

97

1996

2 691

102

345

94

1997

2 286

86

339

92

IP

2 265

86

336

91

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Productivity

(103) As can be seen from the table below, production per employee (labour productivity) increased by
21 % over the analysis period owing both to the increase in production and a reduction in
employment.

1994

253

1995

281

1996

278

1997

316

100

111

110

125

IP

305

121

Production in tonnes per
employee

Index of productivity per
employee

Price development

(104) An analysis of average sales prices of the Community industry was made by reference to the total
value and volume of sales of FeSi 75 to unrelated customers (in order to have trends on a consistent
indicator as explained for costs above). Sales prices increased by 6 % during the analysis period. It is
to be noted that prices rose by 21 % between 1994 and 1996 and then fell by 12 % between 1996
and the IP.

1994

622

1995

699

1996

753

1997

701

100

113

121

113

IP

659

106

Prices
(ECU/tonne)

Index

Profits

(105) As shown below, profitability rose from 1994 to 1996 but, for the remainder of the analysis period,

fell mainly owing to a fall

in prices.

1994

8,1 %

1995

10,1 %

1996

11,2 %

1997

7,6 %

IP

4,1 %

Ratio of net return on sales
to net turnover

Other economic indicators

(106) Community industry investments were for repairs etc. rather than major programmes of new
installations of furnaces. No injury trend could be identified from the fluctuating investment figures.
In addition stocks and wages were reasonably stable over the analysis period and they did not show
injurious trends. The impact on the Community industry of the magnitude of the actual margin of
dumping, was not considered relevant given the low volume of imports.

(107) No detailed analysis was carried out on cash flow, ability to raise capital (or investments), investment
and return on investments because such an analysis would relate to the situation of the companies as
a whole. As, on average, other business lines represent more than 50 % of Community industry
turnover an overall analysis would not necessarily be representative for the product under considera-
tion.

6. Conclusion

(108) The Community industry has benefited from a rise in its unit prices of FeSi from 1994 to 1996 but,
at the end of the analysis period, a fall in prices and a rise in the cost of production significantly
reduced its profit margins. Although demand in the Community increased over the analysis period,
due to developments in the steel industry, the Community industry's market share decreased by 5 %.

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(109)

It is to be noted that imports from the countries concerned remained at a market share of around
2 % over the analysis period. In contrast, imports originating in Norway reached a market share of
more than 50 % in the IP and imports from other non-member countries had a market share of
approximately 30 %.

(110)

It was, therefore, considered that the situation of the Community industry was weaker in the IP
compared to the beginning of the analysis period.

E. LIKELIHOOD OF CONTINUATION OR RECURRENCE OF INJURY

1. Preliminary remark

(111) For confidentiality reasons some of the production capacities, sales volumes and prices of the

cooperating exporting producers have been approximated or summarised.

2. Analysis of the situation of the exporting producers from the countries concerned

Venezuela

(112) As mentioned in recital 81, Fesilven was privatised by the Venezuelan Government on 4 December

1998,

i.e. after the IP.

(113) The investigation has shown that Fesilven continued to sell on the Community market during the IP
at prices which, even taking into account the anti-dumping duties applicable, were below those of
the Community industry.

(114) However, the new management of Ferroven and its parent company Ferroatlántica also claimed that
they did not intend to sell FeSi produced in Venezuela at low prices on the Community market. It
was claimed that it was intended to use FeSi produced in Venezuela to supply the Americas, and
maintain Spanish production to supply the Community market. These claims were considered
perfectly acceptable as the Community producer demonstrated that its investments in production
facilities had been maintained and it would be unlikely to sell at low prices on its own market to
jeopardise this investment. It would indeed, be considered normal economic behaviour that a
Community producer would act to maintain prices on its own market, whilst maximising margins
on sales of FeSi produced in Venezuela.

(115) Furthermore, as mentioned in recital 84, from August 1999, the large US market has been a new

outlet for Ferroven.

C o n c l u s i o n

(116) Although it could not be discounted that imports from Venezuela to the Community would take
place, it was not likely that such exports would be at prices and volumes which would cause material
injury. It is, therefore, concluded that a recurrence of injury involving imports of FeSi produced by
Ferroven is not likely.

China, Kazakhstan, Russia and Ukraine

L i k e l y e x p o r t p r i c e s

the cif prices of

(117) Despite the fact that volumes traded during the IP were in too small quantities to carry significant
undercutting calculations,
these imports were significantly lower than the
Community industry prices. Prices of exports originating in these countries to other non-member
countries, converted to a constructed cif Community border price were also significantly lower than
the Community industry prices. Furthermore, it was concluded on recitals 52, 62, 71 and 79 that
there is a likelihood of recurrence of dumping from these countries should measures be allowed to
lapse. It can therefore be concluded that prices of exports from these countries to the Community
market are likely to be dumped and to undercut significantly Community industry prices should
measures lapse.

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L i k e l y e x p o r t v o l u m e s

(118) The Commission examined the availability of stocks and capacities for each of the countries

concerned.

(119) As concluded in recital 51, based on facts available, significant capacity and stocks would be
available in China for a resumption of significant exports to the Community should measures lapse.

(120) As indicated in recitals 60 to 62, the sole known Kazakh exporting producer had significant
to the

potential and actual spare capacity which could be used to produce FeSi
Community.

for export

(121)

In recital 70, it was noted that there were substantial unused capacities in Russia which could be
directed to the Community should the measures expire.

(122) As mentioned in recital 78, substantial spare capacity exists in Ukraine which could be used to

produce additional FeSi for export to the Community.

(123)

It was further noted that a part of the production capacity available in Kazakhstan and Russia may
be converted to produce other ferro alloys such as ferrochrome, especially in view of the fact that
anti-dumping measures applicable to imports into the Community of ferrochrome originating in
these countries expired on 25 March 2000 (1). However, it was considered that there would still be
substantial capacity which could be directed to FeSi production for export from these countries.

(124) As mentioned in recital 19, imports originating in China, Kazakhstan, Russia and Ukraine were no
longer subject to anti-dumping measures when entering the US market from August 1999. Given the
size of the US market and the price level prevailing thereon, there appears to be some scope for an
increase in imports originating in those countries into the US, particularly bearing in mind the very
low level of imports prevailing until the decision of the US authorities to repeal the measures.
Nevertheless, this would still leave important capacities available for exports to the Community
market.

C o n c l u s i o n

(125)

In view of the findings of continuation and recurrence of dumping, of the large existing capacities in
China, Kazakhstan, Russia and Ukraine, and despite the different factors that may reduce the
capacities available for export to the Community as described above, the Commission concluded that
imports at dumped prices originating in these countries into the Community market may signifi-
cantly increase should measures expire.

3. Conclusion on the likelihood of recurrence of injury for the Community industry

(126) The Community market for FeSi

is predicted to remain relatively stable in the medium term,
reflecting the fact that the demand is almost completely linked to the production of steel. The
Community industry accounted for 16,5 % of the market during the IP, and its total capacity would
have allowed it a maximum share of 23 %.

(127) The current market share of the Community industry could be eroded in case of a repeal of the
measures owing to increased import volumes. However, it is difficult to estimate the extent to which
this would happen.

(1) OJ L 76, 25.3.2000, p. 23.

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Firstly, because of quality and security of supply considerations, the user industry has claimed that it
would continue to source some FeSi from the Community industry, even in the event of a repeal of
the measures. Although no firm conclusion could be reached with respect to this claim, the fact that
three significant Brazilian exporting producers did not increase exports to the Community when they
became subject to a 0 % dumping duty would appear to support this claim by the user industry.

Secondly, as mentioned above, the main player on the Community market is Norway. The reaction
by Norwegian exporting producers to an increased import volume from the countries concerned will
be determinant for the respective positions of all players on the Community market.

(128) As a relatively minor operator on the Community market, the main problem for the Community
industry would be the development of sales prices, which, in turn, would have an immediate effect
if measures were allowed to lapse, the price pressure
on profitability. Whereas it is clear that,
exercised by imports from the countries concerned would increase, the effects on the Community
industry of such developments are unclear. This is owing to the fact that, as mentioned above, the
user industry could still continue to source FeSi from the Community industry.

(129)

In the light of the findings of a likelihood of continuation and recurrence of dumping, and of the
findings that dumped imports originating in China, Kazakhstan, Russia and Ukraine may signifi-
cantly increase should measures be allowed to lapse,
it is concluded that the situation of the
Community industry would deteriorate. Even though the extent of this deterioration is difficult to
evaluate, taking into account the declining trends in prices and profitability of this industry, it is
none the less likely that injury will recur. In respect of Venezuela, should measures be allowed to
lapse, there is unlikely to be any material

injurious effect.

F. COMMUNITY INTEREST

1. General considerations

(130) The Commission examined whether the maintenance of the anti-dumping measures would be in the

overall

interest of the Community.

(131)

It is recalled that the anti-dumping measures have been in force on imports of FeSi originating in
Venezuela since 1983, Brazil, Kazakhstan, Russia and the Ukraine since 1987 and China since 1993.

(132) The situation of the Community industry since 1994 is described in full in recitals 96 to 110.
However, an analysis of the period 1987 to the IP was made in order to assess whether the
Community interest called for a continuation of measures or not and in particular what would be the
effect of one or the other possibility on the situation of the Community industry in the future. The
purpose of this assessment was to show the effects of the anti-dumping measures on the overall
development of the Community industry over the period in which measures have been in place.

(133) The applicant questioned this approach, pointing out that it was not until 1993/1994 that all six of
the countries concerned were subject to measures. Furthermore, the applicant noted that, before
1993/1994, as stated in Regulation (EC) No 3359/93, the measures in place were not fully effective
in protecting the Community industry from dumped imports.

(134)

In this respect,
it is clear to the Commission that the situation of the Community industry in
1993/1994 had deteriorated compared to previous years. In the present investigation, however, the
Commission analysed whether the added protection had enabled the industry to reverse the earlier
unfavourable trends and an examination of this earlier period was, therefore,

justified.

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2. The Community industry

Change in the situation of the Community industry

(135) As noted in recital 97 the Community industry was comprised of at least eight companies in 1987.
It is also necessary to take into account the production of FeSi in the former Democratic Republic of
Germany before German reunification in 1990, and in Sweden before its accession to the
Community in 1995. Taking into account the different information published in relation to previous
proceedings as well as data supplied by the applicant, the Commission estimated that in 1987 the
‘reconstructed’ Community production (i.e.
taking into account all producers located in the
Community of 15 Member States) was at least 200 000 tonnes. As production levels fell to 103 000
tonnes in the IP, this would indicate a decrease of approximately 50 % since 1987 (and an even
more important loss of market share, as the market size is estimated to have grown by at least 20 %
since then).

(136) This loss in production and market share (on the basis of the reconstructed figures as described
above) can be explained, among other factors, by the fact that, by the end of the IP, only three
companies remained active. Despite the fact that the production of these three companies slightly
increased from 1994 to the IP, as described in recital 100, it should be noted that their market share
and employment figures showed that the downward trends experienced between 1987 and 1994
continued during the analysis period. In this respect it should be noted that taking into account the
two Community producers, which still existed in 1994 but not in the IP, would show even more
negative trends. In contrast, it should be noted, that imports originating in Norway have gained
around 20 percentage points market share from 1987 to the IP.

Impact of the continuation of the measures

(137) The reduction in the number of Community producers of FeSi resulted from companies ceasing
production and from mergers/acquisitions. Despite these changes, the Community industry was in a
weaker situation during the IP compared to 1987 and to 1994.

(138) Furthermore, this continued decline occurred during a long period when anti-dumping duties
applied. In this respect, the Commission found that the further relief given by Regulation (EC) No
3359/93 in 1993 for a period of five years, together with the relief afforded by Regulation (EC) No
621/94 in 1994, did not have the expected remedial effects on the Community industry. Indeed,
among other effects analysed in these Regulations, measures were supposed to enable the
Community industry to compete on a level playing field with the dumped imports so as to prevent
further injury in terms of closure of companies, the decrease in personnel employed and a further
loss in market share, etc. It is clear that the downsizing of the industry continued despite the
measures.

(139) The applicant mentioned several indicators which showed that, since 1994, the Community industry
had benefited from the measures, especially as regards capacity utilisation, productivity and profits.
The Commission noted that this improvement has to be seen mostly in relation to the restructuring
and downsizing of the Community industry. Indeed, despite the fact that imports from the countries
concerned were in small quantities, the investigation showed that there had been the closure of two
companies, a reduction of 9 % of employment in the remaining three companies, a reduction in
market share, and a deterioration of profits by the end of the analysis period. It was, therefore,
concluded that the expected remedial effects were not obtained.

(140)

In this light, the Commission concluded that the Community industry was not able to benefit from
measures that were obviously efficient, at least from 1994 onwards. That the Community industry
would benefit from the continuation of measures for a further period of five years was therefore
unwarranted.

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Impact of the expiry of the measures

(141)

In recitals 126 to 130, the Commission analysed the impact on the Community industry should
measures for the countries concerned expire. It was concluded that,
in such a case, the most
important impact on the situation of the Community industry would arise from a general downward
pressure on prices that would be exerted by dumped imports. In such circumstances, the Community
industry would face a decreasing profitability that might lead to decisions to reduce production of
FeSi in the Community. However, the extent to which the situation of the Community industry
could deteriorate was difficult to evaluate precisely; notably in view of the need expressed by users to
keep secure sources of supply in the Community.

3. Impact on importers

(142) The Commission considered the interests of importers of FeSi from the countries concerned in the
Community and received a valid questionnaire response from one company. The investigation
showed that there was a considerable potential for increase in the turnover of this company should
the measures lapse.

(143) On the basis of the above, and in the absence of any arguments to the contrary, the Commission
concluded that the expiry of measures would have a positive impact on the importing companies
concerned because of the potential for significant positive developments in turnover. However, the
paucity of responding importers meant that this information was not considered decisive in the
Community interest analysis.

4. Impact on users

(144) On the Community market, FeSi is used almost entirely for the production of steel and cast iron. It is
used either to introduce silicon as an alloying element in the manufacture of high quality steel
products, or as a deoxidising agent.

(145) The Commission received information from five users and from one user association. On the basis of
their questionnaire responses, it was found that, in 1998, FeSi inputs represented 0,86 % of the
manufacturing costs of these companies. The Commission cross-checked this information with
publicly available statistics and considered it reasonable to estimate that FeSi costs represented, on
average, 0,8 % of the manufacturing costs for the user industries during the IP. This estimate was
slightly lower than the estimate provided by the applicant.

(146) The user association claimed that it was important, from the point of view of competition on the
Community market, that the measures should expire. This was because the measures had almost
eliminated FeSi
imports originating in China, Ukraine, Russia and Kazakhstan and had reduced
imported volumes from Brazil and Venezuela to very low levels. The users explained that the current
measures significantly limited the user industry's sources of supply and kept prices at an artificially
high level on the Community market. Furthermore, they explained that Community steel producers
were currently at a competitive disadvantage when compared to steel producers outside the
Community, which were able to procure FeSi free of anti-dumping duties.

(147)

In examining these claims, the Commission considered the following:

— the expiry of measures would lead to an increased number of suppliers on the Community
market, which would clearly be to the advantage of the Community steel producers which would
benefit from lower costs,

— it has been found that prices of FeSi on the US market dropped by 15 % after the removal of
anti-dumping measures in 1999. If the repeal of anti-dumping measures in the Community has
the same effect on FeSi prices as in the US market, the Community steel industry could save up
to 15 % of its FeSi costs, i.e. around EUR 60 million (15 % of a Community FeSi market of
EUR 406 million during the IP).

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(148) The applicant claimed that the Commission deviated from its current practice in assessing costs
incurred by the FeSi users resulting from the imposition of measures, especially since, in its opinion,
costs of an equivalent level have been considered negligible in the context of certain other anti-
dumping investigations. The applicant also alleged that, in the current FeSi investigation, these costs
were not disproportionate in comparison to the benefit of the measures as expected for the
Community industry.

(149) The Commission considered that, by definition, reviews, such as the present one, require an
assessment of the effect of measures in place. The fact that measures have been in force, for the
majority of the countries concerned, for more than a five-year period cannot be ignored (for instance
measures involving Venezuela have been in place since 1983). In the present case, the length of the
period during which measures have been in place, has led the Commission to take into account that
users have had to bear additional costs linked to measures for many years. In this respect, it was
reasonable, to add as an element in the examination of the various interests involved, the assessment
of the impact of the measures on the users over the period during which they have been in place.

(150) The Commission also noted that, although there were several indicators showing that the proportion
of FeSi in costs of the user industries has increased between 1994 and 1998, these costs remained
fairly limited as described in recital 146. Although it is clear that, on an annual basis, anti-dumping
measures increased these costs only marginally, since users have had to bear this increase in costs for
many years, there is a material cumulative effect of the measures which should be taken into
account.

5. Conclusion on Community interest

(151) From the foregoing, it is clear that the Community industry has not been capable of benefiting
sufficiently from the measures in place since 1987. This is evidenced by its failure to strengthen, or
even maintain,
its position on the Community market even though, following the adoption of
imports from the countries concerned almost disappeared from the
anti-dumping measures,
Community market. The Community industry was also unable to benefit in terms of taking market
share from the demise of former Community producers. In this context, it is noteworthy that the
loss in the Community market share, over this period, is reflected by the gain in the share of the
Norwegian exporting producers that offer qualities, prices and security of supply of FeSi similar to
those of the Community industry.

(152)

It has also to be borne in mind that throughout this long period of anti-dumping measures,
Community steel producers have had to bear negative effects, in the form of additional costs brought
by the measures in particular when cumulated over the time period of validity of the anti-dumping
measures under review.

(153) Thus, while the precise impact of the expiry of measures on the Community industry is uncertain
and while past experience shows that it is not guaranteed that maintaining measures will provide
sizeable benefits to the Community industry;
industry has experienced
long-term cumulated negative effects which would be unduly prolonged if measures were main-
tained.

it is clear that the steel

(154) Therefore, after an appreciation of the impact of the continuation or expiry of the measures on the
various interests involved, as required by Article 21 of the basic Regulation, the Commission could
clearly conclude that maintaining the existing measures would be contrary to the interests of the
Community. The measures should, therefore, be allowed to expire.

G. TERMINATION OF THE PROCEEDING

(155)

It is concluded, therefore, that this proceeding should be terminated and that the anti-dumping
measures adopted on 9 December 1993 by Regulation (EC) No 3359/93 and 19 March 1994 by
Regulation (EC) No 621/94 should be allowed to expire,

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HAS DECIDED AS FOLLOWS:

Sole Article

The anti-dumping proceeding concerning imports of ferro-silicon falling within CN codes 7202 21 10,
7202 21 90 and 7202 29 90 originating in Brazil, the People's Republic of China, Kazakhstan, Russia,
Ukraine and Venezuela is hereby terminated.

Done at Brussels, 21 February 2001.

For the Commission

Pascal LAMY

Member of the Commission