Commission Regulation (EC) No 1612/2001 of 3 August 2001 imposing a provisional anti-dumping duty on imports of ferro molybdenum originating in the People's Republic of China
Date: 2001-08-03
Institutions: European Commission
Subjects: China, anti-dumping duty, ferro-alloy, import, originating product

8.8.2001

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Official Journal of the European Communities

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COMMISSION REGULATION (EC) No 1612/2001

of 3 August 2001

imposing a provisional anti-dumping duty on imports of ferro molybdenum originating in the
People's Republic of China

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 Article 7 thereof,

After consulting the Advisory Committee,

Whereas:

(1)

(2)

(3)

A. PROCEDURE

1. Initiation

On 9 November 2000, the Commission announced by a
notice (the ‘notice of initiation’) published in the Official
Journal of the European Communities (3) the initiation of an
anti-dumping proceeding with regard to imports into
the Community of ferro molybdenum originating in the
People's Republic of China (the ‘PRC’).

The proceeding was initiated as a result of a complaint
lodged in September 2000 by Euroalliages, Le Comite de
liaison des industries de Ferro-alliages (the ‘complainant’)
on behalf of producers representing a major proportion
of the Community production of
ferro molybdenum
(FeMo). The complaint contained evidence of dumping
of
injury resulting
therefrom, which was considered sufficient to justify the
initiation of a proceeding.

the said product and of material

2. Investigation

representatives of

associations,
country

The Commission officially advised the exporting produ-
cers, the importers and the users known to be concerned
the
and their
the
exporting
complainant
concerned,
Community producers and other Community operators
about the initiation of the proceeding. Interested parties
were given the opportunity to make their views known
in writing and to request a hearing within the time limit
set out in the notice of initiation.

the

traders made their views known in writing. All parties
who so requested within the set above time limit and
who demonstrated that there were particular reasons
why they should be heard were granted the opportunity
to be heard.

In view of the large number of exporting producers in
the exporting country concerned, and in conformity
with Article 17 of Regulation (EC) No 384/96 (the ‘basic
Regulation’), it was considered appropriate to examine
whether sampling should be used. In order to enable the
Commission to decide whether sampling would indeed
be necessary and,
if so, to select a sample, exporting
producers were requested, pursuant to Article 17(2) of
the basic Regulation, to make themselves known within
two weeks of the initiation of the proceeding and to
provide information on their production, turnover and
exports to the Community during the investigation
period as well as the names and the activities of all
related companies.

14 Chinese companies provided this basic information.
the 14 companies decided to withdraw its
One of
the
cooperation immediately after the submission of
reply to the sampling questions.

In order to allow exporting producers to submit a claim
for market economy treatment (‘MET’) and/or individual
treatment (‘IT’) if they so wished, the Commission sent
to all exporting producers known to be concerned or
which made themselves known, a MET/IT claim form.
10 companies requested MET and/or IT pursuant to
Article 2(7)(b) of the basic Regulation.

In view of the fact that only one exporting producer was
granted MET (see recital 19),
it was decided that
sampling was not necessary.

The Commission sent questionnaires to all other parties
known to be concerned and to all the other companies
that made themselves known within the deadlines set
out in the notice of initiation. Replies were received
from 11 Chinese companies, two Community produ-
cers, two Community operators, one unrelated importer
and five users of FeMo.

(5)

(6)

(7)

(8)

(9)

(4)

A number of exporting producers
in the country
producers,
as
as well
concerned,
Community users and their associations and importers/

Community

(1) OJ L 56, 6.3.1996, p. 1.
(2) OJ L 257, 11.10.2000, p. 2.
(3) OJ C 320, 9.11.2000, p. 3.

(10) One

exporting producer made

itself known and
submitted a reply to the questionnaire one month after
the time limit set in paragraph 6(a)(ii) of the notice of
initiation. Consequently,
information was not
this
accepted because it was submitted substantially after the
deadline.

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(11)

The Commission sought and verified all the information
it deemed necessary for the purpose of a provisional
determination of dumping,
injury and Community
interest. Verification visits were carried out at the prem-
ises of the following companies:

concerned’). The actual molybdenum (Mo) content of
FeMo is variable and it is expressed as a percentage of
the total weight of FeMo. The product concerned is
currently classified under CN code 7202 70 00. This CN
code is only given for information.

(a) Exporting producer in the PRC:

(i) MET verifications:

— Tianjin The Leader Group Co. Ltd, Tianjin,
and the related producer Tianjin Defu Ferroalloy
Co. Ltd, Tianjin,

— Xuzhou Huanyu Special Alloy Co. Ltd,

Xuzhou,

— Jinzhou Sing Horn Enterprise Co. Ltd,

Jinzhou,
and its related trader Sing Horn Import Export
Co. Ltd,

— Jinzhou Sanda Ferro-Alloys Co. Ltd, Jinzhou,
with the related domestic producer Jinzhou Cheng-
guang Ferro-Alloys-Industry, Jinzhou,

— Fushun Shunkang Molybdenum Industry Co.

Ltd, Fushun;

(ii) MET and questionnaire reply verification:

— Nanjing Metalink International Co. Ltd,

Nanjing,
and its
Nanjing;

related company Xinzyuan Co. Ltd,

(b) Producers in the analogue country (USA):

— Bear Metallurgical Co., Butler, Pennsylvania,
— Thompson Creek Metals Company, Englewood,

Colorado;

(c) Community producers:

— Climax Molybdenum UK Ltd, Stowmarket, UK,
— Treibacher
Industrie AG, Treibach-Althofen,
Austria;

(d) Other Community operators:
— Sadaci NV, Gent, Belgium,

(e) Users:

(14)

(15)

(16)

The two main types of production process used in the
production of FeMo are the thermic and the electrolytic
processes. In both of these processes, technical grade
) is reduced in the presence
molybdenum trioxide (MoO
3
of iron. Because of the practical reasons of the melting
equipment used for the process, the reduced manufac-
intro-
turing costs and the inherent disadvantage of
ducing a high carbon content into the FeMo alloy, the
thermic process is practically the only manufacturing
method used. In the thermic process aluminium and
silicon metals are used for the reduction of a charge
consisting of a mixture of MoO

3 and iron oxide.

The largest practical application of FeMo is the introduc-
in the melts during the
tion of molybdenum metal
production of alloyed steel and cast iron, where the
molybdenum enhances some required characteristics
such as resistance to corrosion and to heat.

The investigation showed that there are different grades
of the product concerned according to the proportion of
molybdenum content and the proportion of impurities.
However, all grades share the same basic physical and
chemical characteristics and the same use. They are
therefore considered as a single product for the purpose
of the present anti-dumping proceeding.

— Krupp Thyssen Nirosta, Krefeld, Germany,
— Georgsmarienhutte GmbH, Georgsmarienhutte,

Germany.

(17)

(12)

The investigation of dumping and injury covered the
period from 1 October 1999 to 30 September 2000
(the ‘investigation period’ or ‘IP’). As for the trends rele-
vant
the Commission
analysed data covering the period from 1 January 1997
to 30 September 2000 (‘period considered’).

for the assessment of

injury,

B. PRODUCT CONCERNED AND LIKE PRODUCT

1. Product concerned

(13)

The product concerned is FeMo produced in the PRC
and exported to the Community. FeMo is a ferro-alloy
containing usually between 45 % and 80 % of molyb-
denum, the remaining part being iron and small quant-
ities of impurities (‘ferro molybdenum’ or ‘the product

2. Like product

the basic physical and
The Commission found that
chemical characteristics and uses of the FeMo imported
from the PRC are alike to those of the FeMo product
produced and sold by the Community industry in the
Community. It was also found that the FeMo produced
and sold on the domestic market of the PRC are alike to
the FeMo originating in the PRC and exported to the
Community. Furthermore, the FeMo produced and sold
on the domestic market of the United States of America
(‘USA’), which was chosen as analogue country for the
PRC, were alike to the FeMo produced and exported to
the Community from the PRC.
therefore
concluded that
the FeMo produced in the PRC and
exported to the Community, the FeMo produced and
sold on the domestic market of the PRC, the FeMo
produced and sold on the domestic market of the USA,
and those produced and sold by the Community
industry on the Community market, are a like product
within the meaning of Article 1(4) of the basic Regula-
tion.

It was

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C. DUMPING

meet the criterion set out in the third indent of Article
2(7)(c) of the basic Regulation.

(18)

(19)

(20)

(21)

(22)

1. Market economy treatment

Pursuant to Article 2(7)(b) of the basic Regulation, in
anti-dumping investigations concerning imports origin-
ating in the PRC, normal value shall be determined in
accordance with paragraphs 1 to 6 of the said article for
those producers, which can show that they meet the
criteria laid down in Article 2(7)(c),
i.e. that market
economy conditions prevail in respect of the manufac-
ture and sale of the product concerned.

Claims for MET were received from 10 exporting produ-
cers. These claims were analysed on the basis of the five
criteria set out in Article 2(7)(c) of the basic Regulation.
Four of these companies provided incomplete and defi-
cient replies that did not contain sufficient information
or evidence to permit any proper consideration of the
merits of the claim. In particular, the companies did not
provide the auditor reports and financial statements and
infomation concerning the acquisition value and the
current book value of the main fixed assets. Their claims
for MET were therefore rejected. The remaining six MET
claims were considered to merit further analysis and
verification visits were carried out at the premises of
these companies.

For three exporting producers, a significant level of state
interference was found. This interference occurred in
different forms, varying from a direct influence in the
management of the companies to the imposition of
limitations in the freedom to run the business and the
creation of distortions in the costs of major inputs.
Consequently, these companies were unable to demon-
their business decisions were made in
strate that
response of market
reflecting supply and
signals
demand. The criterion set out in the first indent of
Article 2(7)(c) of the basic Regulation was therefore not
met.

Five exporting producers could not demonstrate that
they had a clear set of basic accounting records audited
in line with the international accounting standards.
the criterion on
Consequently they did not meet
accounting standards set out in the second indent of
Article 2(7)(c) of the basic Regulation. The specific and
detailed findings, pertaining to their accounts, that led to
this conclusion have been disclosed to the exporting
producers in question.

of

three

companies

a number

For
deficiencies
concerning assets and distortions carried over from the
former non-market economy system were found.
In
particular, the production costs and the financial situa-
tion were distorted due to the arbitrary evaluation of
assets and in the case of one company, to the practise of
these companies did not
barter trade. Consequently,

(23)

The Commission informed the companies and the
complainant Community industry of its findings and
granted them the possibility to comment. Some
exporting producers and the complainant provided
comments on the findings of the MET investigation.
These comments have been comprehensively addressed
to the concerned
in the disclosure documents sent
parties.

(24)

Finally, the Commission concluded that the conditions
set out in Article 2(7)(c) of the basic Regulation for
obtaining MET were met by the following exporting
producer:

— Nanjing Metalink International Co. Ltd, Nanjing,

(25)

The Advisory Committee was consulted and unani-
mously supported the Commission's conclusions. The
remaining exporting producers were informed that their
MET claims were rejected.

2. Individual treatment

(26)

It is the Commission's policy to calculate a countrywide
duty for non-market economy countries and for coun-
tries which can benefit from the rules set out in Article
2(7)(b) and (c) of the basic Regulation but where the
company does not meet MET, except in those cases
where companies can demonstrate that
their export
activities are free from state interference and that there is
a degree of legal and factual
independence from the
State so that the risk of circumvention of the country-
wide duty is removed.

(27)

The nine Chinese exporting producers that did not fulfil
the MET criteria alternatively requested individual treat-
ment (IT). The Commission examined and verified the
information deemed necessary for the purposes of the
determination of IT for the companies in question.

(28) As explained in recital 18, four companies provided
incomplete and deficient MET/IT claims and they were
consequently excluded from further MET analysis.
Furthermore, the extent and nature of the deficiencies
found in these claims made it impossible to assess the
merits of the IT claims. It was therefore decided not to
grant IT to these companies.

(29)

Three exporting producers could demonstrate that their
export activities are free from state interference and that
there is a degree of legal and factual independence from
the State so that the risk of circumvention of the coun-
trywide duty is removed and therefore they fulfilled the
criteria for IT:

— Jinzhou Sing Horn Enterprise Co. Ltd, Jinzhou,

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— Jinzhou Sanda Ferro-Alloys Co. Ltd, Jinzhou,

— Fushun Shunkang Molybdenum Industry Co. Ltd,

Fushun,

fulfil

the IT
the remaining two companies did not
criteria. In one case the nature of the state interference
presented a risk of circumvention if the company was
given individual treatment. As far as the other company
is concerned, the production arm of the group was
found to be producing also for companies other than
the exporter with the consequent risk that other produ-
cers could use the individual duty of this company to
channel the product concerned into the EU.

3. Normal value

3.1. Determination of normal value for exporting producers

not granted MET

3.1.1. Analogue country

(30)

(31)

to Article 2(7)(a) of

Pursuant
the basic Regulation,
normal value for exporting producers that were not
granted MET was established on the basis of the prices
in an appropriate analogue
country for products
comparable to those sold by the Chinese exporting
producers to the Community.

In the notice of initiation the Commission proposed the
USA as an appropriate market economy third country
for the purpose of establishing normal value for the
PRC.

(32) Objections

to this proposal were raised by some
exporting producers within the time limit set in the
notice of
initiation. The alternatives proposed were
Chile, Mexico, Iran, India and South Africa.

(33)

The Commission analysed these options and established
that that the production in Mexico, Iran, India and South
Africa is either very low or non-existent. Consequently
these countries could not be considered as adequate
alternative analogue countries

(34) As far as Chile is concerned, the Commission ascertained
that the production volumes in this country were signifi-
cant. Therefore Chilean producers were contacted and
invited to cooperate. However, they refused to cooperate
with the Commission in this proceeding.

(35) One objection to the choice of the USA as analogue
country concerned the fact that one of the complainants
is a related company of a producer in the USA. It was
alleged that this relationship could have distorting effects
on the data provided. However, these allegations were
found to be inexact and unjustified. The Commission
checked whether the relationship had any distorting
impact on the prices, costs of production and profit-
ability of the US producer, during the on-the-Spot verifi-
cation of the company's data at its premises. No indica-

tion was found of any such distortions and the Commis-
sion satisfied itself on the accuracy and reliability of the
information provided
this
for
proceeding.

the purposes

of

(36) Another objection raised against the choice of the USA
concerned the fact that the requirements for environ-
mental protection are stricter in the USA than in China.
For this reason the companies in the USA have higher
environmental protection costs than the Chinese produ-
cers. In this respect it should be noted that China had
environmental protection rules in the IP,
that were
respected by the companies investigated. Therefore, this
argument, by itself, was not considered a valid reason to
reject the USA as an analogue country. However, the
Commission services will continue to analyse this issue
and due account will be taken at the definitive stage of
the proceeding, of any differences that are claimed and
shown to affect price comparability in this respect.

(37)

In the light of the above the Commission confirmed the
choice of the USA as an appropriate analogue country.

3.1.2. Determination of normal value

(38)

(39)

to Article 2(7)(a) of

Pursuant
the basic Regulation,
normal value for the exporting producers that were not
granted MET was established on the basis of verified
information received from the producer in the USA. It
was found that the US domestic sales of ferro molyb-
denum were
in comparison to the
quantity of the product concerned produced in the PRC
and sold for export to the Community.

representative

The Commission examined whether US sales of
the
product concerned could be considered as being made in
the ordinary course of trade i.e. not made at a loss. For
this purpose the average cost of production during the
investigation period was compared to the average price
of the sales transactions made during this period. It was
accordingly found that all domestic sales of the two
cooperating companies that accounted for the great
majority of US production of ferro molybdenum were
made at a loss and were therefore not in the ordinary
course of trade.

(40) As a result, normal value was constructed in accordance
with Article 2(3) of the basic Regulation by adding to
the producers' cost of production a reasonable margin of
profit. It should also be noted that as one of the US
cooperating companies was a toll convertor, its cost of
production was obtained by applying its conversion
costs to the raw material and other costs of the other
cooperating company. Furthermore, in the absence of a
profit margin on US sales of ferro molybdenum during
the IP, it was concluded that 5 % represented a reason-
able estimate of a realistic profit margin in this instance.
This was accordingly applied for
the purposes of
constructing normal value in this case.

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3.2. Determination of normal value for exporting producers

(46)

granted MET

(41)

For the exporting producer that was granted MET, the
Commission first determined whether the total volume
of the domestic sales of the product concerned was
representative in accordance with Article 2(2) of the
basic Regulation, i.e. whether these sales represented 5 %
or more of
exported to the
Community.

volume

sales

the

The reply provided by this exporting producer included
data on domestic sales made by a related domestic sales
company. Since the exporting producer sold on the
Chinese domestic market also via this related company
and given the distribution of
functions between the
exporting producer and the domestic sales company, it
was considered necessary to establish the normal value
on the basis of prices paid in the ordinary course of
trade by independent customers in China.

(47) As a result,

for this cooperating exporting producer
normal value was established on the basis of
the
domestic sales prices to independent customers for five
the
grades of
remaining three grades a constructed normal value was
calculated.

concerned, whilst

the product

for

(42)

The Commission then examined for
this exporting
producer whether total domestic sales of each grade
constituted 5 % or more of the sales volume of the same
type exported to the Community.

(43) An examination was also made as to whether the
domestic sales of each grade could be regarded as having
been made in the ordinary course of trade, by estab-
lishing the proportion of profitable sales to independent
customers of the grade in question. In cases where the
sales volume of ferro molybdenum, sold at a net sales
price equal to or above the calculated cost of produc-
tion, represented 80 % or more of the total sales: volume
and where the weighted average price of that grade was
equal to or above the cost of production, normal value
was based on the actual domestic price, calculated as a
weighted average of the prices of all domestic sales made
during the IP, irrespective of whether these sales were
profitable or not. In cases where the volume of profit-
able sales of ferro molybdenum represented less than
80 % but 10 % or more of
the total sales volume,
normal value was based on the actual domestic price,
calculated as a weighted average of profitable sales only.

(44)

In cases where the volume of profitable sales of any
grade of ferro molybdenum represented less than 10 %
of the total sales volume,
it was considered that this
particular grade was sold in insufficient quantities for the
domestic price to provide an appropriate basis for the
establishment of the normal value.

(45) Wherever domestic prices of a particular grade sold by
the exporting producer could not be used in order to
establish normal value, constructed normal value was
used. Normal value was calculated in accordance with
Article 2(3) of the basic Regulation by adding to the
producer's cost of manufacturing a reasonable amount
expenses
for
(‘SG & A’) and a reasonable margin of profit.
In this
respect, it should be noted that SG & A and profit were
calculated on the basis of the producer's own figures.

administrative

general

selling,

and

4. Export price

(48)

The export prices were calculated in accordance with
Article 2(8) of the basic Regulation, i.e. on the basis of
the export prices actually paid or payable for
the
product concerned to the first independent customer.

5. Comparison

(49)

For the purpose of ensuring a fair comparison between
the normal value and the export price at an ex-works
level, due allowance in the form of adjustments was
made for differences affecting price comparability in
accordance with Article 2(10) of the basic Regulation.

(50) On this basis, adjustments for commissions,

inland
transport, ocean freight, insurance, EC-freight, handling,
loading and ancillary costs have been made when found
justified.
since inland transport costs
incurred by the exporting producers were not consid-
ered reliable, the relevant adjustments were based on the
analogue country's costs.

In particular,

6. Dumping margin

6.1. General

(51) According to Article 2(11) of the basic Regulation the
weighted average normal value was compared to the
weighted average export price at the same level of trade.
The comparison showed the existence of dumping in
respect of
the exporting producers concerned. The
provisional dumping margins were expressed as a
percentage of the cif Community frontier price duty
unpaid for the exporting producers concerned.

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6.2. Dumping margins for the cooperating exporting produ-

(57)

cers granted MET/IT

(52)

The individual dumping margins are:

— Nanjing Metalink International Co. Ltd:

3,6 %

(58)

— Fushun Shunkang Molybdenum

Industry Co. Ltd:

— Jinzhou Sanda Ferro-Alloys Co. Ltd:

— Jinzhou Sing Horn Enterprise Co. Ltd:

35,8 %

34,3 %

32,8 %

(53)

(54)

6.3. Dumping margins for other exporting producers

Two out of the 10 Chinese exporting producers, whose
exports represent a small proportion of the total export
to the Community, and that initially cooperated, with-
drew their cooperation in the course of the proceeding.
The remaining eight cooperating Chinese exporting
producers represented about 34 % of
total Chinese
exports of the product concerned to the Community.

sales

the export

The Commission calculated the countrywide dumping
margin on the basis of
to the
Community made by the cooperating exporting produ-
cers not granted MET or IT. The Commission first estab-
lished the weighted average of the dumping margins
these cooperating companies. With
determined for
regard to the exporting producers that failed to reply to
the Commission's questionnaire,
that did not make
themselves known or otherwise did not cooperate with
the investigation, the determination had to be based on
facts available, in accordance with Article 18 of the basic
Regulation. In view of the low level of cooperation and
in order not to give a bonus for non cooperation, it was
concluded that the most appropriate information would
be the dumping margin of the grade with the highest
dumping margin sold in representative quantities taken
from all the grades exported by the cooperating Chinese
producers that did not receive either IT or MET.

The two other Community operators, Ferro Alloys and
Metals Ltd and Sadaci NV, submitted some basic infor-
mation even though they did not reply fully to the
questionnaire they did not oppose the proceeding (‘other
Community operators’).

It was assessed whether the production of the above
mentioned operators could be considered as constituting
the Community production within the meaning of
Article 4(1)(a) of the basic Regulation. The investigation
showed that one complaining Community producer
imported and resold FeMo originating in the PRC during
the IP. It was found that these imports were made in
low-priced, dumped
order
imports and in order to maintain its market share.
Furthermore, this trading activity does not alter the fact
that the primary interest of this company was in the
production of FeMo. Indeed, the total volume of these
imports was less than 5 % of the Community operators'
FeMo production throughout the period considered.

to defend itself against

(59) Accordingly it is considered that all the above operators
the Community production within the

constitute
meaning of Article 4(1) of the basic Regulation.

2. Definition of the Community industry

(60)

The two cooperating complaining Community produ-
cers, Climax Molybdenum Ltd and Treibacher Industrie
AG, fulfil the requirements of Article 5(4) of the basic
Regulation, since they account for a major proportion of
the total Community production of FeMo,
i.e. 58 %.
They are therefore deemed to constitute the Community
industry within the meaning of Article 4(1) of the basic
Regulation and will hereinafter be referred to as the
‘Community industry’.

E. INJURY

(55)

The countrywide dumping margin for the PRC estab-
lished on this basis is 43,5 %.

1. Community consumption

D. COMMUNITY INDUSTRY

1. Community production

(61)

In calculating total apparent consumption of FeMo on
the Community market the Commission added the sales
volume of the Community industry and by the other
Community operators in the Community market and
the total imports into the Community as reported by
Eurostat under CN code 7202 70 00. Furthermore, all
volumes have been adapted so as to correspond to the
Mo content.

(56) Within the Community,

the product considered is
manufactured by four operators. Two operators, Climax
Molybdenum Ltd and Treibacher Industrie AG, on behalf
of which the complaint was lodged, fully cooperated in
the investigation.

(62) On this basis, between 1997 and the IP, apparent
consumption of FeMo in the Community increased by
12 %: Consumption went from 24 035 tonnes in 1997
to 26 707 tonnes, in 1998, to 23 652 tonnes in 1999
and to 26 912 tonnes in the IP.

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(63) Apparent consumption increased by 11 % between
1997 and 1998, fell by 11 between 1998 and 1999 and
increased again by 14 % between 1999 and the IP. This
increase in Community consumption of 12 % during the
period considered, in particular between 1999 and the
IP, is attributable to the development of steel and iron
industries.

3,1 % and 16,2 %. The countrywide weighted average
undercutting margin amounted to 14,4 %.

3. Situation of the Community industry

2. Imports originating in the PRC

(a) Preliminary remarks

(a) Volume and market share of the imports concerned

(64)

The volume of imports of FeMo from the PRC into the
Community, as reported by Eurostat, increased by 70 %
over the period considered:
Imports increased from
7 782 tonnes in 1997 to 9 083 tonnes in 1998, to
9 434 tonnes in 1999 and to 13 257 tonnes in the
IP.Imports increased by 17 % between 1997 and 1998,
they increased slightly by 4 between 1998 and 1999
despite the fact that the Community market decreased
by 11 % over the same period, and went up significantly
by 41 % between 1999 and the IP, whereas consump-
tion only increased by 14 % over the same period.

(65)

the Community market held by the
The share of
dumped imports from the PRC increased continuously
from 32,4 % in 1997, to 34 % in 1998, to 39,9 % in
1999 and to 49,3 % in the IP.

(b) Prices of the dumped imports

(i) Price evolution

(66)

The average prices, cif duty unpaid, of the imports of
FeMo originating in the PRC on the basis of Eurostat
decreased by 24 % over the period considered. Prices of
Chinese imports went from EUR 9,2 Kg in 1997, to
EUR 8,6 kg in 1998, to EUR 6,8 kg in 1999 and to
EUR 7,0 kg in the IP

(ii) Price undercutting

(69)

Pursuant to Article 3(5) of the basic Regulation, the
Commission examined all relevant economic factors and
indices having a bearing on the state of the Community
industry. As stated above, all information in terms of
volume has been adapted so as to correspond to FeMo
with a 100 % content of Mo.

(70) Given that the Community industry consists only of two
companies, data relating to the Community industry has
been indexed in order to preserve confidentiality of the
data submitted,
in accordance with Article 19 of the
basic Regulation.

(71)

(72)

(b) Production capacity, actual production and utilisation rate

Production capacity increased by 11 % between 1997
and 1998 and remained thereafter stable. This increase
was not due to any new investments in new production
lines, but reflects the results of the rationalisation of the
complaining
production facilities by one of
Community producers.

the

Production of the Community industry went from an
index 100 in 1997, to 154 in 1998, to 148 in 1999 and
then to 120 in the IP. Production increased significantly
between 1997 and 1998, coinciding with an increase in
apparent consumption, whereas it decreased thereafter.
The biggest decrease took place between 1999 and the
IP, at a time when consumption increased by 14 %.

(73) Assessed in the light of the development of production
and capacity, capacity utilisation increased by 7 %
between 1997 and the IP. Capacity utilisation went from
an index 100 in 1997, to 138 in 1998, to 133 in 1999
and to 107 in the IP. The biggest decrease in capacity
utilisation took place between 1999 and the IP, coin-
ciding with a sharp decrease in production.

(67) A comparison was made between the exporting produ-
cers' and the Community industry's average selling
prices net of all rebates and taxes to unrelated customs
at the same level of trade The prices of the Community
industry were at an ex-works level. The cif Community
frontier prices of Chinese exporting producers were
adjusted for customs duties and post importation costs,
on the basis of the information provided by the sole
cooperating unrelated importer.

(74)

(68)

This comparison showed that during the IP, FeMo
originating in China was sold in the Community at
prices, which undercut the Community industry's prices,
when expressed as a percentage of the latter, between

(c) Stocks

Stocks remained stable over the period considered. They
went from an index 100 in 1997, to an index 79 in
1998, to an index 143 in 1999 and then back to an
index 100 in the IP. When analysing stocks, it is to be
noted that FeMo is generally produced to order and that
therefore
awaiting despatch to
customers. In this context, therefore, the evolution of
stocks does not appear to be relevant for the exam-
ination of the economic situation of the Community
industry.

are goods

stocks

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(75)

(76)

(77)

(d) Sales volume and market share

The sales volume of FeMo to unrelated customers on the
Community market increased by 25 % during the period
considered. Sales went from an index 100 in 1997, to
an index 161 in 1998, to an index 151 in 1999 and
then to an index 125 in the IP.

The share of
the Community market held by the
from (between 17 % and
Community industry went
19 %) in 1997, to (between 26 % and 28 %) in 1998, to
(between 28 % and 30 %) in 1999 and then to (between
20 % and 22 %) in the IP.

This development should be seen in the light of the fact
that
the Community industry, when faced with low
priced imports originating in the PRC, had the choice of
either maintaining its sales prices at the expense of a
negative development of its sales volume and market
share, or to lower its sales prices and follow the trend of
the imports concerned at the expense of its profitability.
Between 1997 and 1999,
the Community industry
decreased its sales prices and thus increased its sales
volume and market share. Between 1999 and the IP, the
Community industry,
in an effort to maintain profit-
ability,
increased its prices with the result that it lost
volume of sales and market share.

(e) Growth

(78) As mentioned above, while Community consumption
increased by 12 % over the period considered, the sales
volume of the Community industry increased by 25 %
and the volume of imports concerned by 70 %.

(79) However, between 1999 and the IP at a time when the
Community consumption increased by 14 %, the sales
volume of the Community industry decreased by 17 %.
Consequently, the growing trend of the market did not
translate into an increase of the Community industry's
share of the market. On the contrary, its market share
decreased by (between 7 and 9 percentage points)
between 1999 and the IP whereas the share of imports
concerned increased by 9,4 percentage points during the
same period. Thus, the Community industry could not
benefit from the growth of the market between 1999
and the IP.

(f) Sales prices and factors affecting prices

(80)

(81)

The weighted average prices of FeMo sold by the
Community industry decreased by 24 % over the period
considered. Sales prices went from an index 100 in
1997, to an index 86 in 1998, to an index 71 in 1999
and then to an index 76 in the IP.

This evolution in prices, should be seen in comparison
with the evolution of the Community industry's costs.
Between 1997 and 1998 the costs of the Community
industry decreased by 14 %, due to a decrease in the
costs of raw materials (MoO3) and an increase in the
capacity utilisation. Prices also decreased by 14 % and

thus profitability remained at the same level. Between
1998 and 1999 the costs of the Community industry
decreased by 18 % mainly due to a decrease in the costs
of raw materials, whereas the Community industry's
sales prices decreased by 17 %. Between 1999 and the IP
increased by 8 %
the Community industry's costs
whereas its prices only increased by 7 % thus negatively
affecting profitability. Thus, between 1999 and the IP
the Community industry suffered price suppression.

(82)

(83)

(g) Employment

The employment of the Community industry related to
the production of FeMo increased by 4 % during the
period considered. The number of employees went from
89 in 1997 to 92 in the IP. The relatively low number of
employees is explained by the fact
the FeMo
production is by far more capital than labour intensive.

that

(h) Productivity

the Community industry's workforce
Productivity of
linked to manufacturing of FeMo, measured as output
per person employed, increased by 15 % over the period
considered. Productivity went from an index 100 in
1997, to an index 133 in 1998, to an index 131 in
1999 and then to an index 115 in the IP.

(i) Wages

(84) Wages per employee increased by 10 % over the period
considered. When analysing wages account should be
taken of the fact that labour costs represent a minimal
part of the overall costs of the Community industry,
since FeMo production is capital

intensive.

(85)

(86)

(j) Investments

The Community industry's total investments went from
an index 100 in 1997, to an index 155 in 1998, to an
index 208 in 1999 and then to an index 49 in the IP. It
should be noted that throughout the period considered,
investment represented less than 2 of the turnover of the
Community industry.

(k) Profitability

The Community industry's profitability in terms of
return on net sales before taxes remained stable between
1997 and 1998 at (between 0 % and 2 %). The low level
of profitability in 1997 coincided with the downturn in
the economic cycle of the steel industry, which is the
main user of FeMo. Profitability improved to (between
1 % and 3 %) in 1999, due to a more efficient utilisation
of the production plants and coinciding with an increase
in the output of the steel industry Despite the growth in
consumption of FeMo in the IP, profitability deteriorated
(between 0 % and 2 %) in the IP, as a consequence of the
decrease in production and sales, which increased the
costs of the Community industry.

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(l) Cash flow, return on investments (ROI) and ability to raise

capital

deteriorated from (between 1 % and 3 %) in 1999 to
(between 0 % and 2 %) in the IP, reaching a level which
is insufficient to ensure the long-term viability of the
Community industry.

(87)

(88)

(89)

It should firstly be noted that the information on cash
flow and return on investments was provided for the
total of the companies. In this respect, net cash flow
from operating activities went from an index 100 in
1997, to an index 367 in 1998, to an index 182 in
1999 and then to an index 40 in the IP.

(93)

Return on assets went from an index 100 in 1997, to an
index 129 in 1998, to an index 47 in 1999 and then to
an index 40 in the IP.

The investigation showed that the Community industry
was not experiencing difficulties in its ability to raise
capital.

In the light of foregoing, and in particular the decrease
in sales volume, market share, production and low prof-
itability,
the
Community industry has suffered material injury within
the meaning of Article 3 of the basic Regulation.

is provisionally

concluded

that

its

F. CAUSATION

1. Introduction

(m) Magnitude of dumping margin

(90) 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.

4. Conclusion on injury

(91)

(92)

Between 1997 and the IP the volume of the dumped
imports of FeMo originating in the PRC increased signifi-
cantly, by 70 %, and its share of the Community market
went from 32,4 % in 1997 to 49,3 % in the IP. The
biggest increase took place between 1999 and the IP,
when the volume of dumped imports increased by 41 %
gaining 9,4 percentage points of market share. The
average prices of dumped imports originating in the PRC
were, with the exception of 1998, consistently lower
than that of the Community industry during the period
considered. Furthermore, during the IP the prices of the
dumped imports undercut
the Community
industry by 14,4 %.

those of

The examination of the abovementioned factors shows
that between 1997 and the IP the situation of
the
Community industry deteriorated. Even though the
Community industry increased its volume of production
and sales during the period considered, it did not follow
the Community consumption. This
the growth of
resulted in a stagnation in its market share of
the
Community industry. The development of the economic
situation of the Community industry was particularly
negative in the period between 1999 and the IP: produc-
tion decreased by 19 %, sales volume decreased by 17 %,
market share decreased by (between 7 and 9) percentage
points and employment decreased by 8 %. Profitability

(94) According to Article 3(6) and (7) of the basic Regula-
tion, the Commission examined whether the dumped
imports of FeMo originating in the PRC have caused
injury to the Community industry to a degree which
enables it to be classified as material. Known factors
other than the dumped imports, which could at the
same time be injuring the Community industry, were
also examined to ensure that possible injury caused by
these other factors was not attributed to the dumped
imports.

2. Effects of the dumped import

(95)

(96)

The significant increase in the volume of the dumped
imports by 70 %,
i.e. from 7 782 tonnes in 1997 to
13 257 tonnes in the IP, and of its corresponding share
of the Community market, i.e. from 32,4 % in 1997 to
49,3 % in the IP as well as the level of price undercutting
found (14,4 % during the IP) coincided with the deteri-
oration of the economic situation of the Community
industry. This market penetration was particularly signif-
icant between 1999 and the IP, when the import volume
increased by 41 % and the market share of the dumped
imports by 9,4 percentage points.

It was also found that, during the same period, the
Community industry suffered a decrease of sales volume
(–17 %) and market share (between 7 and 9 percentage
points), price suppression and a deterioration of its prof-
itability from (between 1 and 3 %) to (between 0 % and
2 %). This development should be seen in the context of
an increasing consumption of FeMo on the Community
market, by 12 % over the period considered and,
in
particular by 14 % between 1999 and the IP, coinciding
with an upturn in the economic cycle of
the steel
industry.

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(97)

(98)

In addition, Chinese prices were below those of the
Community industry throughout the period considered,
with the exception of 1998, and exerted a pressure on
them which prevented Community industry's prices
from increasing at the same rate as the increase in the
costs of production between 1999 and the IP, thus
reducing the already low level of profitability if the
Community industry. In this respect it is worth noting
that while the costs of the main raw material increased
by 8 % between 1999 and the IP, Chinese prices only
increased by 3 %. The market for FeMo is price sensitive
and transparent, a worldwide commodity market where
prices are followed and published by several specialised
publications.
the
market, the growth of Chinese imports at low dumped
prices well known to the potential customers of the
Community industry had the effect of suppressing prices
of the Community industry.

the price sensitivity of

In view of

imports

concerned, which

It is therefore considered that the pressure exerted by the
dumped
significantly
increased their volume and market share at low prices,
as shown by the price undercutting found, caused a
price suppression of the Community industry resulting
in a deterioration of its financial situation.

3. Effects of other factors

(a) Performance of other Community operators

(99) As already mentioned above at recital 57 two other
operators produce FeMo in the Community. The situa-
tion of these two operators sharply deteriorated during
the period considered: production decreased by 44 %,
sales volume by 42 % and their share of the Community
market went from (between 40 % and 42 %) in 1997 to
(between 20 % and 22 %) in the IP. It should be noted
that the substantial deterioration of the economic situa-
tion of the other Community operators coincided with
an increase in the import volume of Chinese FeMo at
decreasing prices.

(100)

In view of the deterioration of the situation of the other
Community operators, it is concluded that these opera-
tors did not contribute to the material injury suffered by
the Community industry.

(b) Worldwide oversupply

ucts and, consequently, the market has experienced a
depressed price development globally, which can not be
attributed to the FeMo originating from the PRC.

(102) Between 1997 and 1998 the Community industry's
capacity increased by 11 %, although not due to new
investments in additional production lines, but merely as
a result of rationalisation of the existing production
facilities. Between 1998 and the IP, the capacity of the
Community industry remained at
level.
Furthermore,
the alleged oversupply of FeMo in the
world market cannot explain the loss of sales volumes
and market shares suffered by the Community industry
on the Community market between 1999 and the IP
especially in view of the increase in apparent consump-
tion during the same period.

same

the

(103)

It is therefore concluded that any world-wide oversupply
cannot be the cause of
the injury suffered by the
Community industry.

(c) Evolution of prices of raw materials

(104)

It has also been considered whether the injury suffered
by the Community industry could have been caused by
the fluctuation in the cost of the raw material during the
period considered.

(105) The main raw material used in the production of FeMo
is MoO
. The investigation showed that prices of MoO
3
3
decreased by 28 % over the period considered. More
specifically, they decreased by 16 % between 1997 and
1998, further by 20 % in 1999 before increasing by 8 %
in the IP.

(106) During the same period the Community industry's sales
prices moved alongside the prices of raw materials.
Between 1997 and 1999 the Community industry was
able to reflect
the fluctuations in the prices of raw
materials in its sales prices. However between 1999 and
the IP, the Community industry could not increase its
sales prices to cover the increase in costs caused by an
increase in the prices of raw materials and by a decrease
in the rate of capacity utilisation. It should be noted that
during the same period the prices of
the Chinese
imports undercut those of the Community industry by
14,4 %, thus preventing the Community industry from
increasing its prices to cover the increase in its costs.

(101)

It was argued that any injury suffered by the Community
industry was caused by an inability of the complainants
to adapt to the prevailing oversupply of FeMo in the
worldmarket. In particular, it was claimed that the world
market for FeMo faces a structural problem with the
presence of overly large quantities of molybdenum prod-

(107) Therefore, it is concluded that the effect of the fluctu-
ations on the world market to MoO3 had an impact on
the evolution of the Community industry's sales prices
but could not have broken the causal link between the
dumped imports originating in the PRC and the injury
suffered by the Community industry.

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(d) Imports from other third countries

(108) According to Eurostat

the total

information,

import
volume of FeMo from third countries than the PRC
increased by 22 %, from 1 974 tonnes in 1997 to 2 414
tonnes in the IP and their market share increased from
8,2 % in 1997 to 9,0 % in the IP. The weighted average
prices of these imports decreased by 24 % between 1997
and the IP. However, it should be noted that the prices
of imports from other third countries were, with the
exception of 1999, higher than the weighted average
prices of the Chinese imports during the period consid-
ered.

(109) Only imports originating in three countries other than
the PRC had a share of the Community market beyond
1 % during the IP,

i.e. Chile, Armenia and Iran.

(110)

Imports of FeMo originating in Chile decreased from
1 008 tonnes in 1997 to 887 tonnes in the IP and their
share of the Community market decreased from 4,2 % in
1997 to 3,3 in the IP. As far as average import prices
are concerned, they have always been higher than those
of the imports from the PRC and did not undercut the
sales prices of the Community industry in the IP. In view
of the above, it is considered that imports from Chile
were also adversely affected by the dumped imports
from the PRC and have not materially contributed to the
injury suffered by the Community industry.

(111) The volume of imports originating in Armenia increased
from 145 tonnes in 1997 to 917 tonnes in the IP and
their share of the Community market went from 0,6 %
in 1997 to 3,4 % in the IP. Regarding the average prices
of imports originating in Armenia, they increased by
17 % between 1997 and 1998, decreased by 15 %
between 1998 and 1999 and increased thereafter by 3 %
between 1999 and the IP.
It should be noted that
average prices of imports originating in Armenia were
below those of the Community industry but at the same
level as those of imports originating in the PRC in 1999
and the IP.

to the injury suffered by the Community industry, this
contribution remains only marginal, given the small
volume of these imports and their limited market share
compared to that of the imports originating in the PRC.
Furthermore,
indications that these imports may have
been made at dumped prices were submitted neither by
the
exporting producers
claiming a discriminatory treatment. For these reasons,
imports originating in third countries other than the
PRC cannot break the causal link between the imports
from the PRC and the material injury suffered by the
Community industry.

complainant nor by the

(e) Traded FeMo by the Community industry

(114)

It was also considered whether the Community industry
had inflicted upon itself
injury through its resale of
FeMo originating in the PRC.

(115)

It was found that the volume of these sales by the
Community industry in the IP represented a negligible
part of the total sales made by the Community industry
and amounted to less than 5 % of the total volume of
imports of the product concerned originating in the
PRC. This could be considered as a normal commercial
behaviour to counteract the surge in low-priced imports
originating in the PRC. It was found that the sales prices
charged by the Community industry for traded FeMo
were at the same level as the prices of FeMo originating
in the PRC.

(116)

therefore provisionally concluded that

It was
the
Community industry's resales of Chinese originating
FeMo did not contribute to the injury suffered by the
Community industry.

(112)

Import volume from Iran increased from 32 tonnes in
1997 to 489 tonnes in the IP and their share of the
Community market increased from 0,1 % in 1997 to
1,8 % in the IP. The prices of FeMo originating in Iran
were, with the exception of 1997, below those of the
imports originating in the PRC.

(117)

(113)

In conclusion, it cannot be excluded that factors other
than the dumped imports from the PRC, in particular
imports originating in Armenia and Iran, may have
contributed to the injury suffered by the Community
industry. Nevertheless, even if these imports contributed

4. Conclusion on causation

It cannot be excluded that factors other than dumped
in particular imports originating in Armenia
imports,
and Iran, may have contributed to the situation of the
Community industry. However, these factors were not
such as to break the causal
link between the injury
established and the imports concerned as shown by the
price pressure and price undercutting attributable to the
imports originating in the PRC as well as the volume
and market share gained by the low-priced Chinese
imports which had negative consequences on the situa-
tion of the Community industry, notably on production,
sales volume and market share.

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(118)

It is therefore provisionally concluded that the dumped
imports originating in the PRC taken in isolation, have
caused material
injury to the Community industry
within the meaning of Article 3(6) of the basic Regula-
tion.

G. COMMUNITY INTEREST

(119)

In order to assess the Community interest, the Commis-
sion carried out an investigation into the likely effects of
the imposition/non-imposition of anti-dumping meas-
ures on the economic operators concerned. Question-
naires were sent to all interested parties known to be
concerned at the time of the initiation of the proceeding,
namely the Community industry, importers/traders and
industrial users Other interested parties, which came
forward, were also invited to provide information on the
likely effects of the imposition/non-imposition of anti-
dumping measures.

1. Interest of the Community industry

(a) Nature and structure of the Community industry

(120) The Community industry is composed of two medium-
sized companies located in Austria and in the UK. One
of them belongs to a globally organised company based
in the USA, but its profit centres dealing with manufac-
turing and selling of the product concerned are located
in the Community. One of them is upstream integrated
and produces MoO3 partly for use in its downstream
production of FeMo and for sales to third parties.
Production of FeMo is
intensive and the
Community industry employed a total of 510 people
out of which 92 were directly linked to the production
of FeMo in the IP. Account should also be taken of the
workforce relating to the production of the main raw
) used in the production of
material concerned (MoO3
FeMo which amounted to 71 employees.

capital

(121) Despite the finding of material injury, the Community
industry is viable and competitive and can continue to
be active in this product if fair market conditions are
restored. It should be mentioned that the Community
industry is also active in other products where returns
on sales are well above those obtained in the product
concerned.

(b) Possible effects of the imposition/non-imposition of meas-

ures on the Community industry

(122) Following the imposition of measures, it is expected that
the volume of Chinese imports of the product concerned
on the Community market would decrease. This would
enable the Community industry to recover lost market
share and by increasing capacity utilisation to decrease

in all

the level of

unit production costs and to increase profitability.
the Community industry's
Furthermore,
prices would,
likelihood moderately increase,
although not by the level of any anti-dumping duty,
since competition will still remain amongst Community
operators, imports originating in the PRC and imports
originating in other third countries. In conclusion it is
expected that
the increase in production and sales
volume, on the one hand, and the further decrease in
unit costs, on the other hand, eventually combined with
a moderate price increase will allow the Community
industry to improve its financial situation.

(123) On the other hand, should anti-dumping measures not
be imposed, it is likely that the negative trend of the
Community industry will continue. The Community
industry is particularly marked by a loss of sales volume
and market share as well as insufficenti profitability.
Indeed, in view of the decreasing sales volume particu-
larly since 1999 and the material injury suffered during
the IP, it is obvious that the financial situation of the
Community industry will deteriorate further
in the
absence of any measures This may ultimately lead to
closures of certain production lines and/or even closure
of entire plants and therefore threaten employment and
investments in the Community Furthermore, should the
negative trend continue, not only the production of
FeMo is affected but also the upstream production of
MoO3 in the Community.

(c) Conclusion

(124)

In conclusion, the imposition of anti-dumping measures
would allow the Community industry to recover from
the injurious dumping found.

2. Interest of other Community operators

for

different

from the

abovementioned

(125) On the basis of the information submitted by two other
Community operators, there are no indications that the
effects of the proposed measures on their situation will
be
the
Community industry. On the other hand it appears that
other Community operators have also suffered from the
low prices. They already
increased FeMo imports at
reduced their production by 44 % and their market share
by 49 % from 1997 to the IP and their situation will
continue to deteriorate should measures not be adopted.
One Community operator stopped production shortly
after the IP due to its unsustainable financial situation.
The other one claimed that the continuous downward
trend of prices renders the FeMo activity not profitable,
as proven by the sharp decrease in its profitability
between 1997 and the IP, and consequently the closure
of a FeMo plant may be envisaged.

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3. Interest of unrelated importers/traders in the

Community

(126) The distribution of FeMo in the Community is character-
importers and
ised by a relatively small number of
traders who trade in a large number of other products.

(127) Questionnaires were sent to 14 known importers and
traders in the Community. Only one response was
received from one trader within the time limits set:

— Grondmet Metall- and Rohstoff Vertriebs GmbH,

Düsseldorf, Germany.

(128) This trader represents less than 10 % of the total import
volume of the product concerned from the PRC in the
Community during the IP. This low level of cooperation
could already justify the conclusion that the outcome of
the investigation would probably not have a significant
effect on importers/traders given that these companies
also trade with other products which are not concerned
by this proceeding.

(129) Should anti-dumping measures be imposed, it is likely
that imports originating in the PRC decrease and that
the Community industry regain sales
consequently,
volume and market share. Furthermore,
it cannot be
excluded that the imposition of anti-dumping measures
results in a moderate increase in the prices of FeMo in
the Community, thus affecting the economic situation of
importers and traders.

(130) However, the impact of any anti-dumping duty on the
situation of importers and traders should be seen in the
light of the small part of their overall activities repre-
sented by trade in FeMo. On the basis of the information
provided by the sole cooperating importer/trader, it has
been found that FeMo represented less than 15 % of the
cooperating company's total turnover. Thus, the effect of
any measures on this trader's overall business would be
limited. Furthermore, the effect on importers/traders of
the increase in the Chinese prices of FeMo will depend
on their ability to pass increase in prices on to their
customers. Information provided by cooperating users
indicate that prices of imported FeMo have fluctuated
over the period and thus it is likely that importers/
traders pass any increases in prices of FeMo on to users.

(131) On this basis, it has been provisionally concluded that
the imposition of anti-dumping measures is not likely to
have a serious negative effect on the situation of impor-
ters/traders in the Community.

quently FeMo demand is primarily dependent upon the
production of steel and cast iron where ferro molyb-
denum is used to introduce molybdenum metal in the
melts during the production of alloyed steel and cast
iron to enhance some required characteristics such as
resistance to corrosion and to heat.

(133) Questionnaires were sent to 20 users of FeMo. Further-
i.e. the European
more, two main users' associations,
Confederation of Iron and Steel Industries (EUROFER)
and the Committee of Associations of European Foun-
dries (CAEF), were invited to forward copies of the ques-
tionnaire intended for users to those of their members
which were concerned by the investigation. Responses
were received from the following five steel producers:

— Edelstahl-Witten-Krefeld GmbH, Witten, Germany.

— Krupp Edelstahlprofile GmbH, Siegen, Germany,

— Krupp Thyssen Nirosta, Krefeld, Germany,

— Georgsmarienhütte

GmbH,

Georgsmarienhütte,

Germany,

— Hüttenwerke Krupp Mannesmann GmbH, Duisburg,

Germany.

(134) Furthermore, the Federation of German Steel Industry
as
(Wirtschaftsvereinigung
regards the possible impact of anti-dumping measures
on the steel
industry which were supported by the
German Foundry Association (Deutcher Giessereiver-
band) and the CAEF.

Stahl) made

allegations

(135) The likely effects of the imposition/non-imposition of
anti-dumping measures were examined on the basis of
the information received from the cooperating parties.
Even if neither the Committee of Associations of Euro-
pean Foundries nor individual foundries did submit any
substantiated comments, although expressly invited to
do so, there are no indications that the following conclu-
sions would not be mutatis mutandis valid also in respect
of foundry industry.

(b) Economic situation of users

4. Interest of the user industry

(a) Nature and structure of the user industries

(132) The main users of FeMo in the Community are the steel
industry and foundries. Both users are estimated to
represent around 80 % of the Community consumption
of all molybdenum products, the steel industry repre-
senting around 70 % and foundries around 10 %. Conse-

(136) The cooperating users represented around 7 % of the
Community FeMo consumption in the IP. Their total
turnover ranged from EUR 277 million to EUR 1 760
million in the IP, their overall weighted average profit-
ability increased from 3,4 % in 1998 to 4,4 % in the IP.
Total staff employed by these companies amounted to
around 13 000 persons and the employment attribut-
able to the product concerned represented around 50
persons.

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(c) Effects of the imposition/non imposition of measures

(137) On the basis of the information provided by cooperating
users it was found that FeMo represented on average
0,6 % of the cost of raw materials in the IP and on
average 0,4 % of total costs. Given the above, the impo-
sition of an anti-dumping measure would only have a
negligible effect on the costs and financial situation of
users.

(138) Users were found to have a substantial buying power
and alternative sources of supply exist, which are not
subject
to the measures. Furthermore, as explained
above in recital 122, the Community industry is unlikely
to increase its prices by the full amount of the anti-
dumping duty, since it will also benefit from reduced
costs resulting from an increase in its sales volume.
Furthermore, FeMo may in certain limited technical
processes at steel and cast iron plants be partially substi-
depending on the availability and relative
tuted by MoO
prices of the different Mo-containing products.

3

(139) Should measures not be imposed, users would continue
to benefit from the existing low prices of FeMo on the
Community market which are the result of unfair
trading practices, which are injurious and detrimental to
it should be
the Community industry. Furthermore,
noted that, in the event of a reduction or even disap-
pearance of
the available
the Community industry,
sources of supply would also be reduced with the conse-
quent negative effect for the users. In this respect it is
considered that the existence of alternative sources of
supply is vital for guaranteeing a significant level of
competition on the Community market as well as an
adequate access to raw materials.

and the effect of a price increase on the downstream
industries as described above, it is likely that Chinese
exporting producers will continue to export
to the
Community market, albeit at non-dumped prices.

third countries,

importers and users

(143) Furthermore, as there are no quality differences between
the product concerned originating in the PRC and in
other
in the
Community would have no difficulty in obtaining FeMo
from other sources as well as from the PRC, especially as
there is no shortage of supply on the world market. On
the contrary, the removal of the unfair trade practices
will prevent the further deterioration of the situation of
the Community industry and thus help to maintain the
availability of a wide choice of supply sources and even
strengthen competition among existing producers.

(144) Regarding the insufficient capacity by the Community
industry to meet demand, the information provided by
the Community industry shows that it has sufficient
spare capacity to supply the increased demand in the
Community market. Indeed, the rate of capacity utilisa-
tion by the Community industry during the IP amounted
to around 50 %.

(145) On the other hand, should anti-dumping measures not
be imposed, the situation of the Community industry
and the other Community operators would most likely
further deteriorate, leading eventually to the disappear-
ance of Community production for FeMo. In view of the
above, it cannot be excluded that without anti-dumping
measures the number of players in the Community
market will decrease, with the consequent negative
effects for competition.

(d) Conclusion

(146)

(140) Given the above,

in particular the small

incidence of
FeMo on the overall costs of users, it is provisionally
concluded that
the imposition of any anti-dumping
measure is not likely to affect the situation of users of
FeMo in the Community.

It is therefore provisionally concluded that the imposi-
tion of anti-dumping measures is highly unlikely to
result in supply constraints for FeMo in the Community,
given the level of unused capacity by the Community
the anti-dumping measures
industry,
proposed and the existence of alternative sources of
supply.

level of

the

5. Consequences for competition in the Community

market

(141) The single cooperating trader and the Wirtschaftsvereini-
gung Stahl opposed the anti-dumping measures, arguing
in general terms that the Community industry had insuf-
ficient production capacity to meet demand.

(142) As

as

far

the

competitive

environment

in the
Community market is concerned, it should be noted that
it
to
is the aim of any anti-dumping measure not
prevent imports from entering the Community market,
but to restore fair conditions of competition on the
market. Moreover, given the level of duties proposed

6. Conclusion on Community interest

(147)

In the light of the above, it is provisionally concluded
exist on grounds of
that no compelling reasons
Community interest against
the imposition of anti-
dumping measures.

H. PROVISIONAL ANTI-DUMPING MEASURES

(148)

the conclusions reached with regard to
In view of
injury, causation and Community interest,
dumping,
provisional measures
to
prevent further injury being caused to the Community
industry by the dumped imports.

should be taken in order

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1. Injury elimination level

(149) The level of

the provisional anti-dumping measures
should be sufficient
to eliminate the injury to the
Community industry caused by the dumped imports,
without exceeding the dumping margins found. When
calculating the amount of duty necessary to remove the
effects of the injurious dumping, it was considered that
any measures should allow the Community industry to
cover its costs and obtain overall a profit before tax that
could be reasonably achieved under normal conditions
of competition, i.e. in the absence of dumped imports
on the sales of the like product in the Community.

(150) On the basis of the information available, it was prelimi-
narily found that a profit margin of 5 % of turnover
could be regarded as an appropriate minimum which
the Community industry could be expected to obtain in
the absence of injurious dumping, taking into account
the level of profitability obtained in the sales of other
products of the same type produced by the Community
industry.

(151) The necessary price increase was then determined on the
basis of a comparison, at the same level of trade, of the
weighted average import price, as established for the
price undercutting calculations, with the non-injurious
price of FeMo sold by the Community industry on the
Community market. The non-injurious price has been
obtained by adjusting the sales price of the Community
industry to reflect the above mentioned reasonable profit
margin of 5 %. Any difference resulting from this
comparison was then expressed as a percentage of the
total cif import value.

2. Provisional measures

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

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

I. FINAL PROVISION

(156)

In the interest of a sound administration, a period
should be fixed within which the interested parties may
make their views known in writing and request a
hearing. Furthermore, it should be stated that the find-
ings made for the purpose of this Regulation are provi-
sional and may have to be reconsidered for the purpose
of any definitive measures,

(152)

In the light of the above, it is considered that, in accord-
ance with Article 7(2) of the basic Regulation, provi-
sional anti-dumping duties should be imposed in respect
of imports originating the PRC at the level of the lower
of the injury elimination and dumping margins found.

HAS ADOPTED THIS REGULATION:

Article 1

(153) As regards the residual duty to be applied to the non-
level of
cooperating exporting producers,
cooperation was considered low and in order not to give
a bonus for non-cooperation, it was concluded that the
residual duty should be fixed on the basis of the meth-
odology explained in recital 54.

the

as

A provisional anti-dumping duty is hereby imposed on
1.
imports of
falling within CN code
7202 70 00 and originating in the People's Republic of China.

ferro molybdenum,

The

rate of duty applicable

2.
free-at-
Community-frontier price, before duty, for products produced
by the following companies, shall be as follows:

to the net,

Company

Rate of duty
(%)

TARIC
additional code

Fushun Shunkang Molybdenum Industry Co. Ltd

Jinzhou Sanda Ferro-Alloys Co. Ltd

Jinzhou Sing Horn Enterprise Co. Ltd

Nanjing Metalink International Co. Ltd

All other companies

12,7 %

17,2 %

9,8 %

3,6 %

26,3 %

A273

A274

A275

A276

A999

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3.

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

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

4.
subject to the provisions of a security, equivalent to the amount of the provisional duty.

Article 2

1. Without prejudice to Article 20 of Regulation (EC) No 384/96, interested parties may present their
views in writing and request a hearing from the Commission within one month of the date of entry into
force of this Regulation.

Pursuant to Article 21(4) of Regulation (EC) No 384/96, the parties concerned may comment on the

2.
application of this Regulation within one month of the date of its entry into force.

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

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

Article 3

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

Done at Brussels, 3 August 2001.

For the Commission

Pascal LAMY

Member of the Commission