Proposal for a Council Regulation terminating the partial interim review of the anti-dumping measures applicable to imports of silicon originating in the People's Republic of China
Date: 2005-04-25
Institutions: European Commission
Subjects: China, anti-dumping duty, import, originating product, semi-metal

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 25.04.2005 
COM(2005) 160 final 

Proposal for a  

COUNCIL REGULATION 

terminating the partial interim review of the anti-dumping measures applicable to 
imports of silicon originating in the People's Republic of China 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1)  CONTEXT OF THE PROPOSAL 

•  Grounds for and objectives of the proposal 

This  proposal  concerns  the  application  of  Council  Regulation  (EC)  No  384/96  of 
22 December 1995 on protection against dumped imports from countries not members 
of  the  European  Community,  as  last  amended  by  Council  Regulation  (EC) 
No 461/2004 of 8 March  2004 ("the  basic Regulation") in the proceeding concerning 
imports of silicon originating in the People’s Republic of China. 

•  General context 

This proposal is made in the context of the implementation of the basic Regulation and 
is the result of an investigation which was carried out in line with the substantive and 
procedural requirements laid out in the basic Regulation. 

•  Existing provisions in the area of the proposal 

There are no existing provisions in the area of the proposal. 

•  Consistency with other policies and objectives of the Union 

Not applicable. 

2)  CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

•  Consultation of interested parties 

Interested  parties  concerned  by  the  proceeding  have  already  had  the  possibility  to 
defend their interests during the investigation, in line with the provisions of the basic 
Regulation. 

•  Collection and use of expertise 

There was no need for external expertise. 

•  Impact assessment 

This proposal is the result of the implementation of the basic regulation. 

The  basic  regulation  does  not  foresee  a  general  impact  assessment  but  contains  an 
exhaustive list of conditions that have to be assessed. 

3)  LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

On  20  March  2004,  the  Commission  initiated  a  review  investigation  with  regard  to, 
inter alia, imports of silicon metal originating in the People’s Republic of China. The 

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purpose of this review was to examine whether, as a consequence of enlargement of the 
European  Union  on  1  May  2004  there  was  a  need  to  adapt  the  measures  in  order  to 
avoid  a  sudden  and  excessively  negative  effect  on  interested  parties,  including  users, 
distributors and consumers in the new Member States.  

Following  an  examination  of  the  information  submitted  by  all  the  various  parties  as 
well as the statistics available, it was found that no compelling reasons exist to modify 
the existing measures by introducing any transitional arrangements.  

The Member States were consulted regarding this review. Twenty-one Member States 
supported and four Member States opposed the proposal. 

It is therefore proposed that the Council adopt the attached proposal for a Regulation 
which  should  be  published  in  the  Official  Journal  of  the  European  Union  as  soon  as 
possible.  

•  Legal basis 

Council  Regulation  (EC)  No  384/96  of  22  December  1995  on  protection  against 
dumped  imports  from  countries  not  members  of  the  European  Community,  as  last 
amended by Council Regulation (EC) No 461/2004 of 8 March 2004.  

•  Subsidiarity principle 

The proposal falls under the exclusive competence of the Community. The subsidiarity 
principle therefore does not apply. 

•  Proportionality principle 

The proposal complies with the proportionality principle for the following reason(s). 

The form of action is described in the above-mentioned basic regulation and leaves no 
scope for national decision. 

Indication  of  how  financial  and  administrative  burden  falling  upon  the  Community, 
national governments, regional and local authorities, economic operators and citizens is 
minimized and proportionate to the objective of the proposal is not applicable. 

•  Choice of instruments 

Proposed instruments: regulation. 

Other means would not be adequate for the following reason(s). 

The above-mentioned basic regulation does not foresee alternative options. 

4)  BUDGETARY IMPLICATION 

The proposal has no implication for the Community budget. 

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Proposal for a 

COUNCIL REGULATION 

terminating the partial interim review of the anti-dumping measures applicable to 
imports of silicon originating in the People's Republic of China 

THE COUNCIL OF THE EUROPEAN UNION, 

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  Community1  (’basic 
Regulation’), and in particular Articles 11(3) and 22(c) thereof, 

Having  regard  to  the  proposal  submitted  by  the  Commission,  after  consulting  the  Advisory 
Committee,2 

Whereas: 

A. 

PROCEDURE 

1. 

Measures in force 

(1) 

(2) 

In  March  2004  following  an  expiry  review,  the  Council,  by  Regulation  (EC) 
No 398/20043,  imposed  a  definitive  anti-dumping  duty  on  imports  of  silicon  metal 
(‘silicon’) originating  in the People's Republic of China (‘the PRC’). The rate of the 
definitive duty applicable to the net free-at-Community frontier price, before duty, was 
49%. 

2. 

Initiation 

On 20 March 2004 the Commission announced through the publication of a notice4 in 
the Official Journal of the European Union, the initiation of a partial interim review of 
the  measures  applicable  to,  inter  alia,  imports  of  silicon  originating  in  the  PRC 
pursuant to Articles 11(3) and 22(c) of the basic Regulation. 

(3) 

The  review  was  launched  on  the  initiative  of  the  Commission  in  order  to  examine 
whether, as a consequence of the enlargement of the European Union on 1 May 2004 

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OJ  L  56,  6.3.1996,  p.  1.  Regulation  as  last  amended  by  Regulation  (EC)  No  461/2004  (OJ  L  77, 
13.3.2004, p. 12.). 
OJ C […] […], p. […] 
OJ L 66, 4.3.2004, p. 15. 
OJ C 70, 20.3.2004, p. 15. 

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(4) 

(5) 

(6) 

(‘Enlargement’),  and  bearing  in  mind  the  aspect  of  Community  interest,  there  was  a 
need to adapt the measures in order to avoid a sudden and excessively negative effect 
on interested parties, including users, distributors and consumers. 

3. 

Product under consideration 

The product under consideration is the same as in the investigation which lead to the 
imposition  of  the  existing  measures,  i.e.  silicon  metal  originating  in  the  PRC, 
classifiable within CN code 2804 69 00 (silicon content less than 99,99% by weight). 
Purely by reason of the current classification set out in the Customs nomenclature, it 
should read ‘silicon’. Silicon with a higher purity, that is containing by weight not less 
than  99,99%  of  silicon,  used  mostly  in  the  electronic  semiconductor  industry,  falls 
under a different CN code and is not covered by this proceeding. 

4. 

Investigation 

The Commission officially advised the importers, the users and the exporters known to 
be  concerned  and  their  associations,  the  representatives  of  the  exporting  country 
concerned  and  the  Community  producers  about  the  initiation  of  the  investigation. 
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. 

(CCCMC), 

the  Community 

China  Chamber  of  Commerce  of  Metals,  Minerals  &  Chemicals  Importers  & 
(Euroalliages), 
Exporters 
importers/traders,  the  authorities  of  some  new  Member  States  which  acceded  to  the 
European Union on 1 May 2004 (‘the EU10’) and users of silicon in the EU10 made 
their views known in writing. All parties which so requested within the time limit, and 
which demonstrated that there were particular reasons why they should be heard, were 
granted the opportunity to be heard. 

association 

industry 

(7) 

The Commission sought and verified all the information it deemed necessary for the 
purpose of a determination of the appropriateness of the measures in force. 

B. 

FINDINGS OF THE INVESTIGATION AND TERMINATION OF THE 

PARTIAL INTERIM REVIEW 

1. 

Imports of silicon from the PRC to the EU10  

(8) 

(9) 

The  investigation  has  shown  that  an  average  yearly  increase  in  import  volumes  of 
silicon from the PRC into the EU10, as reported by Eurostat, was around 13% in 2001 
and  2002.  In  2003  import  volumes  increased  by  around  54%  due  to  the  significant 
increase in the period October – December. 

Furthermore, an abnormal increase in import volumes of around 120% as compared to 
the same period of the previous year was found just before Enlargement, i.e. January – 
April 2004. 

(10)  The  investigation  has  further  shown  that  imports  of  silicon  from  the  PRC  into  the 
EU10  have  decreased  after  Enlargement.  The  decrease  could  be  explained  by  the 
abnormal increases in import volumes prior to Enlargement. 

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(11)  Moreover,  statistics  on  imports  into  the  EU10  in  the  post-Enlargement  period  show 
that  the  decrease  of  import  volumes  from  the  PRC  coincides  with  a  progressive 
increase of imports originating in Norway and Brazil, as well as sales from the EU15. 

2. 

Demand of silicon in the EU10 

(12)  Demand for silicon in the EU10 has been established on the basis of the total imports 
less total exports. It is to be noted that there is no declared production of silicon in the 
EU10.  

(13)  Taking  into  account  the  abnormal  increases  in  import  volumes  from  the  PRC  before 
Enlargement,  it  was  considered  necessary  to  make  some  adjustments  to  the  import 
volumes  during  2003  and  2004  in  order  to  determine  what  would  normally  be  the 
import levels during these periods in the absence of Enlargement.  

(14) 

In this regard, an average yearly increase in import volumes from the PRC in 2001 and 
2002 was found to have been 13%. On this basis, the level of normal imports from the 
PRC  in  2003  and  2004  was  determined  by  applying  a  13%  yearly  increase  to  the 
import volumes in the previous years, which normally could have been expected to be 
the import levels during these periods in the absence of Enlargement. 

(15)  Following the same methodology, exports from the EU10 in 2004 were estimated by 
adding to the total exports in 2003 a normal increase of 80% which was found to be 
the average yearly increase in export volumes in 2002 and 2003.  

Table 2 Demand of silicon in the EU10 

Year 

2000 

2001 

2002 

2003  

Import to the EU10 in tonnes 

18 815 

19 802 

22 661 

Export from the EU10 in tonnes 

37 

6 

84 

23 855 
(estimated) 
153 

2004 
(estimated) 
26 957 

275 

Total demand in the EU10 in tonnes 

18 778 

19 795 

22 576 

23 703 

26 682 

Source: Eurostat and estimated data for 2003 and 2004 

(16) 

In the light of the above, it was found that demand in the EU10 is around 6% of the 
level of demand in the EU15 as estimated in the last expiry review investigation of the 
anti-dumping measures on imports of silicon originating in the PRC5. 

3. 

Alternative sources of supply to meet the demand in the EU10 

(17)  The  investigation  has  shown  that  there  are  enough  potential  sources  of  supply, 
alternative  to  the  supply  from  the  PRC,  available  to  meet  the  demand  in  the  EU10 
even if the extension of the anti-dumping duty from the EU15 to the 10 new Member 
States would completely eliminate or result in a decrease in imports from the PRC. 

(18)  There are around 18 000 tones of potential supply of silicon from the fifteen Member 
States  which  composed  the  European  Union  before  Enlargement  (‘the  EU15’).  This 
calculation has  been  made  on  the  basis of the last expiry  review investigation of the 

5 

Council Regulation (EC) No 398/2004 (OJ L 66, 4.3.2004, p. 15). 

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anti-dumping measures on imports of silicon originating in the PRC. It was found that 
production  in  the  EU15  of  silicon  amounted  to  around  148  000  tonnes  in  2001.  The 
same  expiry  review  investigation  found  that  there  were  around  166  000  tonnes  of 
production capacity in the EU15, indicating spare capacities of around 18 000 tonnes.  

(19)  Furthermore, other potential sources of supply of silicon (not subject to anti-dumping 
duties)  are,  among  others,  Norway  (with  spare  capacity  of  18  000  tonnes),  Brazil, 
Canada and the USA.  

(20)  As  outlined  in  recital  11,  it  was  also  found  that  in  the  post-Enlargement  period,  i.e. 
May  –  November  2004,  for  which  reliable  data  was  already  reported  by  Eurostat, 
imports from other sources, in particular Norway and Brazil, as well as sales from the 
EU15 gradually increased. Sales from the EU15 increased four-fold, import volumes 
from  Norway  increased  five-fold  and  from  Brazil  six-fold,  as  compared  to  the  same 
period in 2003.  

Table 3 Import volumes to the EU10 from Norway, Brazil and sales from the EU15 

Period of the year 

May-November 2003 
May-November 2004 

Sales from the EU15 (in 
tonnes) 
2 070 
7 772 

Import volumes from 
Norway (in tonnes) 
238 
1 144 

Import volumes from 
Brazil (in tonnes) 
152 
975 

(21) 

In the light of the above, there is no compelling reason to believe that there will be a 
shortage of silicon on the EU10 market. 

4. 

Cost impact assessment 

(22)  As stated by various interested parties, silicon is an intermediary product used by only 
a  handful  of  processing  industries  in  the  new  Member  States,  in  particular  for  the 
production of secondary aluminium alloys. 

(23)  Aluminium  producers  in  the  EU10  confirm  that  the  average  proportion  of  silicon 
consumed  in  the  production  process  of  secondary  aluminium  alloys  ranges  between 
3% and 13,5%.  

(24)  The investigation has shown that the increase in the price of silicon in the EU10 or a 
switch  to  other  alternative  sources  of  supply  is  likely  to  have  a  minor  effect  on  the 
production cost for the users in the EU10.  

Increase in price of silicon from the PRC 

(25) 

In  light  of  the  above-mentioned  percentages  of  consumption  of  silicon  in  the 
production  of  secondary  aluminium  alloys  and  given  that  the  anti-dumping  duty  on 
imports  of  silicon  from  the  PRC  is  49%,  the  cost  impact  on  secondary  aluminium 
alloys producers would only range from 1,47% to 6,6% of the total cost of production 
of secondary aluminium alloys.  

Switch to other alternative sources of supply 

(26)  Some  interested  parties  indicated  that,  by  extending  the  anti-dumping  measures  to 
imports in the EU10, alternative sources of supply of silicon had been sought but that 
such alternative sources had resulted in an increase of silicon prices of around 34%. In 

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this  regard,  it  was  found  that  the  cost  impact  for  secondary  aluminium  alloys 
producers would be even less and would fall in the range of 1% to 4,6% of the total 
cost of secondary aluminium alloys production.  

5. 

Comments received from the interested parties 

(27)  Several importers and users argued that there will be a lack of supply of silicon on the 
EU10  market.  However,  as  outlined  in  recitals  11,  19  and  20,  after  Enlargement 
import  volumes  from  the  PRC  into  the  EU10  are  progressively  being  replaced  by 
silicon  originating  in  the  EU15,  Norway  and  Brazil.  There  is  therefore  no  reason  to 
believe that there will be a shortage of silicon on the EU10 market. 

(28)  One  of  the  users  in  the  EU10  as  well  as  the  Slovakian  and  Slovenian  authorities 
claimed  that  silicon  from  other  sources  is  different  in  terms  of  quality  to  that  of  the 
PRC. In this regard it is noted that Council Regulation (EC) No 398/2004 concluding 
the  expiry  review  of  the  anti-dumping  measures  imposed  on  imports  of  silicon 
originating in the PRC stated that the silicon produced in the PRC and exported to the 
Community, as well as the silicon produced in Norway and that manufactured in the 
Community  by  the  Community  producers  had  the  same  basic  physical  and  chemical 
characteristics,  and  the  same  basic  uses.  Therefore  they  are  considered  to  be  like 
products within the meaning of Article 1(4) of the basic Regulation. It was noted that 
no adjustments in the terms of quality of the product had to be made. Therefore, there 
is  no  reason  to  believe  that  Chinese  imports  to  the  EU10  replaced  by  the  countries 
named above would differ in terms of quality. In addition, the increase of the imports 
from other countries, as outlined in recitals 11, 19 and 20, indicates that the products 
are substitutable.  

(29)  The  same  user  also  argued  that  the  cost  impact  for  secondary  aluminium  alloys 
producers is not negligible given the low profit margins of the same industry. In this 
regard  it  is  recalled  that  in  recital  25  and  26  it  was  concluded  that  there  will  be  a 
limited impact of the extension of anti-dumping measures on the users of silicon metal 
in the EU10 with a maximum 6,6% increase in the total cost of secondary aluminium 
alloys  production.  However,  this  was  not  a  compelling  reason  to  such  extent  as  to 
modify  the  existing  measures  by  introducing  transitional  arrangements.  Indeed,  this 
impact was not materially different from the impact estimated in the EU15 during the 
investigation leading to the imposition of the definitive measures in 2004, where it was 
concluded that the measures in force would not have a significant effect on users. 

6. 

Conclusion 

(30)  Given the limited impact of the duty on the cost of manufacturing of aluminium alloys 
in  the  EU10  and  the  existence  of  alternative  sources  of  supply  to  the  EU10,  it  is 
concluded  that  the  extension  of  the  existing  measures  from  the  EU15  to  the  10  new 
Member  States  would  not  likely  cause  a  sudden  and  excessively  negative  effect  on 
interested  parties,  including  users,  distributors  and  consumers.  Therefore,  no 
transitional arrangements are warranted, 

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HAS ADOPTED THIS REGULATION: 

Article 1 

The  partial  interim  review  of  the  anti-dumping  measures  applicable  to  imports  of  silicon 
originating in the People's Republic of China, initiated pursuant to Article 11(3) and 22(c) of 
Regulation (EC) No 384/96, is hereby terminated. 

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

Article 2 

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

Done at Brussels,  

For the Council 
The President 

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