Proposal for a Council Regulation amending Regulation (EC) No. 2268/2004 imposing a definitive anti-dumping duty on imports of tungsten carbide and fused tungsten carbide originating in the People’s Republic of China
Date: 2005-07-01
Institutions: European Commission
Subjects: China, anti-dumping duty, anti-dumping legislation, originating product, tungsten

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 1.7.2005 
COM(2005) 295 final 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No. 2268/2004 imposing a definitive anti-dumping duty on 
imports of tungsten carbide and fused tungsten carbide originating in the People’s 
Republic of China  

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1)  CONTEXT OF THE PROPOSAL 

110 

•  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  tungsten  carbide  and  fused  tungsten  carbide  originating  in  the  People's 
Republic of China. 

120 

•  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. 

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•  Existing provisions in the area of the proposal 

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

•  Consistency with the 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. 

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3)  LEGAL ELEMENTS OF THE PROPOSAL 

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•  Summary of the proposed action 

On  31  March  2004  the  Commission  initiated  an  interim  review  of  the  anti-dumping 
measures  in  force  on  imports  of  tungsten  carbide  and  fused  tungsten  carbide 
originating  in  the  People's  Republic  of  China.  The  investigation  was  limited  to  the 
scope of the measures. 

The  anti-dumping  measures  in  force  were  in  place  since  1998  and  were  renewed  for 
another 5-year period by Council Regulation (EC) No 2268/2004.  

The attached proposal for a Council Regulation is based on an analysis of the product 
scope. The result of the investigation has confirmed the allegations by the Community 
producers,  i.e.  that  a  new  product  type,  tungsten  carbide  mixed  with  additives,  have 
started to penetrate the market. In order to ensure the effectiveness of the measures in 
force,  the  anti-dumping  measures  should  be  extended  to  also  cover  this  new  product 
type. 

Member States were consulted on 11 May 2005, none of which opposed the proposed 
course of action. 

It is therefore proposed that the Council adopts the attached proposal for a Regulation 
in view of its publication in the Official Journal as soon as possible. 

310 

•  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  

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•  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). 

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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 

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Proposed instruments: regulation. 

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342 

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

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

4)  BUDGETARY IMPLICATION 

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The proposal has no implication for the Community budget. 

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Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No. 2268/2004 imposing a definitive anti-dumping duty on 
imports of tungsten carbide and fused tungsten carbide 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 (’the basic 
Regulation’), and in particular Article 11(3) thereof, 

Having  regard  to  the  proposal  submitted  by  the  Commission2  after  consulting  the  Advisory 
Committee, 

Whereas: 

A. MEASURES IN FORCE 

(1) 

By Regulation (EC) No 771/983 the Council imposed a definitive anti-dumping duty 
of  33%  on  imports  of  tungsten  carbide  and  fused  tungsten  carbide  originating  in  the 
People’s  Republic  of  China  (‘PRC’).  Following  an  expiry  review,  the  duty  was  re-
imposed by Council Regulation (EC) No 2268/20044. 

B. PRESENT INVESTIGATION  

(2)  While  the  above-mentioned  expiry  review  was  ongoing,  the  Commission  received  a 
request for an interim review, pursuant to Article 11(3) of  the basic Regulation. The 
request  was  lodged  by  the  European  Association  of  Metals  (Eurometaux)  (‘the 
applicant’)  on  behalf  of  three  producers,  together  representing  a  major  proportion 
(more  than  80%)  of  the  total  Community  production  of  tungsten  carbide  and  fused 
tungsten  carbide.  The  applicant  alleged  that  a  new  product  type,  falling  within  the 
product scope of the existing measures on tungsten carbide and fused tungsten carbide, 
had  appeared  on  the  market.  The  applicant  alleged  that  the  new  product  type  shared 
the  same  basic  physical  and  chemical  characteristics  and  end  uses  as  the  product 
covered  by  the  measures  in  force.  In  these  circumstances,  the  applicant  alleged  that 
both  the  product  covered  by  the  measures  in  force  and  the  new  product  type  should 

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OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Council Regulation (EC) No 461/2004 (OJ L 77, 
13.3.2004, p.12). 
OJ C , , p. 
OJ L 111, 9.4.1998, p. 1. 
OJ L 395, 31.12.2004, p. 56 

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therefore be considered a single product and the measures in force should, also apply 
to imports of the new product type.  

Having determined, after consulting the Advisory Committee, that sufficient evidence 
existed  for  the  initiation  of  a  partial  interim  review,  the  Commission,  on  31  March 
2004,  initiated  an  investigation  in  accordance  with  Article  11(3)  of  the  basic 
Regulation5.  The  investigation  was  limited  in  scope  to  the  definition  of  the  product 
subject to the measures in force, in order to assess the need for the amendment of the 
scope of the measures in force. 

The  investigation  period  (‘IP’)  covered  the  period  from  1  January  2003  to  31 
December 2003. 

The  Commission  advised  the  applicant  Community  producers  as  well  as  all  known 
Community  importers,  all  known  Community  users  and  all  known  exporters  in  the 
PRC of the initiation of the review. 

The Commission requested information from all the above mentioned parties and from 
those other parties who made themselves known within the time limit set in the notice 
of initiation of the investigation. The Commission also gave the interested parties the 
opportunity to make their views known in writing and to request a hearing. 

No  questionnaire  replies  were  received  from  the  importers,  traders  and  exporters. 
However, the main five exporters of tungsten carbide and fused tungsten carbide made 
written comments.  

(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

The following three Community industry companies replied to the questionnaire: 

– 

H.C. Starck GmbH, Germany 

–  Wolfram Bergbau- und Hütten-GmbH, Austria 

– 

Eurotungstène Poudres S.A. France 

(9) 

The following seven users in the EU replied to the questionnaire: 

– 

– 

– 

– 

Boart Longyear, GmbH & Co KG, Germany 

Ceratizit S.à.r.l., Luxemburg 

Ceratizit GmbH, Germany 

F.I.L.M.S. s.p.a., Italy 

–  MISCELE s.r.l, Italy 

– 

– 

Harditalia s.r.l., Italy  

TRIBO Hartmetall GmbH, Germany 

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OJ C 81, 31.3.2004, p.8. 

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C. PRODUCT CONCERNED 

(10)  The product concerned, as defined in the regulation imposing the measures in force, is 
tungsten carbide and fused tungsten carbide originating in the PRC and falling within 
CN code 2849 90 30. Both are compounds of carbon and tungsten produced by heat 
treatment  (carburisation  in  the  first  case,  fusion  in  the  second).  Both  products  are 
intermediate  products,  used  as  input  materials  in  the  manufacture  of  hard  metal 
components  such  as  ‘cemented  carbide’  cutting  tools  and  high-wear  components,  in 
abrasion-resistant coatings, in bits for oil drilling and mining tools as well as in dies 
and tips for the drawing and forging of metals. 

D. RESULTS OF THE INVESTIGATION 

1. Preliminary comment 

(11)  The exporters claimed in their written comments that the initiation of this investigation 
was a “legal inconsistency”, and, therefore, they did not reply to the questionnaire. In 
their view, the allegation of a new product type appearing on the market could not be 
investigated  within  a  review  limited  to  the  scope  of  the  product  concerned  under 
Article  11(3)  of  the  basic  Regulation,  but  rather  requires  a  full  anti-dumping 
investigation  under  Article  5  of  the  basic  Regulation.  However,  the  very  purpose  of 
the current review is to assess whether the new product type and the product subject to 
the existing measures are to be considered as the product concerned, i.e. whether they 
both have the same characteristics and end uses and can therefore be considered as one 
single  product.  This  assessment  can  only  be  made  in  the  context  of  a  review  of  the 
existing  measures  on  imports  of  the  product  concerned.  Any  investigation  under 
Article 5 of the basic Regulation could only be envisaged for a different product. The 
claim made by the exporters is therefore not valid and must be rejected. It should be 
noted that the non-cooperation of the exporters concerned resulted in a lack of certain 
relevant  information  and  lead  to  the  use  of  available  information  in  application  of 
Article 18 of the basic Regulation. 

2. New product type 

(12)  The  new  product  type  is  mainly  constituted  of  the  product  subject  to  the  existing 
measures which is mixed with a small percentage of another metallic powder (mostly 
cobalt  but  other  metallic  powders  such  as  nickel,  chromium  and  other  components, 
depending  on  specific  properties  required,  can  also  be  mixed  with  the  product 
concerned ). This new product type is currently classified within CN code 3824 30 00, 
a  subheading  described  as  ”non-agglomerated  metal  carbides  mixed  together  or  with 
metallic  binders”,  which  consists  of  a  diversity  of  mixtures,  at  different  stages  of 
processing. Just as the product subject to the existing measures (see recital (10)), the 
new product type is an intermediate product, used as input material in the manufacture 
of hard metal components  

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3.  Comparison  between  the  product  subject  to  the  existing  measures  and  the  new 
product type: 

(13) 

In order to assess whether the new product type should be considered as the product 
concerned  and  therefore  fall  within  the  scope  of  the  exisiting  measures,  it  was 
examined  whether  the  new  product  type  and  the  product  subject  to  the  existing 
measures shared the same chemical and physical characteristics and end uses. It was 
also examined how the Community users perceived the new product type. 

(a) 

Physical and chemical characteristics 

(14)  The  new  product  type,  as  explained  above  under  recital  (12),  is  an  intermediate 
product, which consists of the product subject to the existing measures, simply mixed 
with another metallic powder.  

(15)  The investigation demonstrated that simply mixing the product subject to the existing 
measures  with  a  metallic  powder  does  not  change  the  characteristics  of  the  product 
subject  to  the  existing  measures.  While  it  is  true  that  the  new  product  type  slightly 
differs  in  structure  from  the  product  subject  to  the  existing  measures  due  to  the 
addition  of  a  small  amount  of  cobalt,  it  was  established  that  both  products  keep  the 
same  physical  and  chemical  characteristics  and  follow  exactly  the  same  processing 
stages  leading  to  identical  end  use.  Indeed,  it  is  only  in  the  subsequent  processing 
stages  (see  also  recital  (18)),  that  e.g.  cobalt  serves  as  a  binder,  id  est  to  ensure  the 
adhesion  of  the  carefully  mixed  components  inserted.  Only  from  that  stage  are  new 
physical  and  chemical  characteristics  attained  (see  also  recital  24).  It  was  also 
established  that  –  similar  to  the  addition  of  cobalt  –  the  simple  addition  of  other 
substances,  e.g.  nickel,  chromium  and/or  other  components,  do,  in  themselves,  not 
change the properties of the product subject to measures. The addition of these other 
substances  in  the  milling  stage  depends  on  specific  properties  required  (see  recital 
(18)).  

(16)  Furthermore, it was found that no Community producer manufactures the new product 

type.  

(17)  As a consequence, there is no basic physical or chemical difference between the new 

product type and the product subject to the existing measures 

(b) 

End uses 

(18)  Both the product subject to the existing measures and the new product type enter into 
the  same  stage  of  the  tungsten  production  chain.  Like  the  product  subject  to  the 
existing  measures,  the  new  product  type  needs  to  be  carefully  milled  (together  with 
other metallic or carbide additives and organic binders) and granulated by vacuum or 
spray drying (homogeneous particle shaping) before it reaches the state of a ‘ready to 
press’  powder.  A  ready  to  press  powder  is  the  precursor  to  the  production  of  hard 
metal  components  (end  product  reached  by  pressing  and  sintering  id  est  high 
temperature  moulding)  where  the  added  metallic powder finally becomes active as a 
binder matrix. Both the product subject to existing measures and the new product type 
have  therefore  to  be  transformed,  through  a  similar  process,  into  a  ready  to  press 
powder.  The  ready  to  press  powder  has  to  correspond  to  very  specific  composition 
requirement by customers i.e. the mining, metal-forging and coating industry. 

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(19) 

It follows from the above that the product subject to the existing measures and the new 
product  type  both  exclusively  enter  into  the  same  stage  of  the  production  chain  and 
that the simple addition of a small amount of cobalt or any other substance mentioned 
in  recital  (15)  will  not  change  the  properties  of  the  product  subject  to  the  existing 
measures. All serve the same end uses, i.e. they have to be further processed.  

(c) 

User perception 

(20)  Users  of  the  product  concerned  are  mainly  small  producers  of  a  wide  range  of  hard 
metal components. The few cooperating users affirmed the above mentioned findings, 
id est that both the product subject to the existing measures and the new product type 
are processed on the EU market.  

(21)  The investigation also showed that a limited number of users, of which only one fully 
cooperated, have imported the new product type from the PRC. The co-operating user 
stated that the new product type was used for exactly the same purposes as the product 
subject to the existing measures. 

(22) 

In view of the finding that the new product type imported from the PRC is applied for 
the same purposes as the product subject to the existing measures, it can be considered 
that users do not see a difference between both products 

(d) 

Distinction  between  the  new  product  type  and  the  other  products  within  CN 
code 3824 30 00 

(23)  The new product type falls within the same CN code as ready to press powders i.e. CN 

code 3824 30 00, id est the further processed product.  

(24)  To  distinguish  the  new  product  type  from  ready  to  press  powders  within  CN  code 
3824  30  00,  the  following  criteria  can  be  applied:  macroscopic  aspect,  particle  size, 
and  chemical  composition  and  flow  properties.  Concerning  the  macroscopic  aspect, 
there  is  a  clear  difference  in  visibility.  Particles  of  the  new  product  type  can  not  be 
seen  with  the  unaided  eye  while  the  particles  of  ready  to  press  powders  are  visible. 
Concerning  the  chemical  composition,  in  contrary  to  the  new  product  type,  each 
particle  of  the  ready  to  press  powders  is  constituted  by  a  well  defined  and 
homogeneous  dispersion  of  all  the  chemical  components.  Furthermore,  the  particle 
shape of the new product type is irregular, while the shape of the particles of the other 
mixtures  is  spherical.  Finally,  the  new  product  type  has  very  poor  flow  properties, 
while  ‘ready  to  press’  powder  is  free  flowing  and  has  a  homogeneous  composition. 
The lack of flowability can be measured and established by using a calibrated funnel 
e.g. a HALL flow meter according to ISO standard 4490. 

(e) 

Conclusion 

(25)  The investigation demonstrated that the alleged new product type is fundamentally the 
same  as  the  product  subject  to  the  existing  measures.  The  addition  of  a  metallic 
powder as described in recital (15) does not alter its properties or use. 

(26)  On  the  basis  of  these  results,  and  in  particular  as  both  products  have  the  same  main 
physical  and  chemical  composition,  and  whereas  the  same  applications  are  similarly 
perceived  by  the  users,  it  is  considered  that  the  product  subject  to  the  existing 

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measures and the new product type are a single product id est the product concerned 
within the meaning of Article 1(4) of the basic Regulation. 

E. MEASURES 

(27) 

In view of the above findings, it is considered appropriate to clarify that the existing 
antidumping  measures  on  the  product  concerned  also  cover  the  new  product  type 
currently imported under CN code ex 3824 30 00. 

HAS ADOPTED THIS REGULATION: 

Article 1 

Article 1 (1) of Regulation (EC) N° 2268/2004 shall be replaced by the following: 

1. 

A  definitive  anti-dumping  duty  is  hereby  imposed  on  imports  of  tungsten  carbide, 
tungsten  carbide  simply  mixed  with  metallic  powder  and  fused  tungsten  carbide 
originating in the People’s Republic of China, falling within CN codes 2849 90 30 
and ex 3824 30 006 (TARIC code 3824 30 00 10). 

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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The particles are irregular and not free flowing in contrast to “ready to press powder” particles, which 
are  spherical  or  granular  shaped,  homogeneous  and  free  flowing.  The  lack  of  flowability  can  be 
measured  and  established  by  using  a  calibrated  funnel  e.g.  a  HALL  flow  meter  according  to  ISO 
standard 4490.  

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