Council Regulation (EC) No 716/2006 of  5 May 2006  imposing a definitive anti-dumping duty on imports of dead-burned (sintered) magnesia originating in the People's Republic of China
Date: 2006-05-05
Institutions: Council of the European Union
Subjects: China, anti-dumping duty, anti-dumping legislation, import, magnesium, originating product

12.5.2006

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Official Journal of the European Union

L 125/1

I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 716/2006

of 5 May 2006

imposing a definitive anti-dumping duty on imports of dead-burned (sintered) magnesia originating
in the People's Republic of China

THE COUNCIL OF THE EUROPEAN UNION,

2. Request for a review

Having regard to the Treaty
Community,

establishing the European

Having regard to the Council Regulation (EC) No 384/96 of 22
December 1995 on protection against dumped imports from
countries not members of the European Community (1) (here-
inafter referred to as the basic Regulation), and in particular
Articles 9 and 11(2) thereof,

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

Whereas:

(1)

(2)

(3)

A. PROCEDURE

1. Measures in force

In December 1993, definitive anti-dumping measures on
imports of dead-burned (sintered) magnesia (DBM or the
product concerned) originating in the People's Republic
of China (PRC) were imposed by Council Regulation (EC)
No 3386/93 (2) (original
investigation). These measures
took the form of a minimum import price.

Following an expiry review, these anti-dumping measures
were maintained in February 2000 by Council Regulation
(EC) No 360/2000 (3).

Following an interim review, the Council, by Regulation
(EC) No 986/2003 (4), amended the form of the anti-
dumping measures
the
in force
minimum price but subject to specific conditions and
imposing an ad valorem duty of 63,3 % in all other cases.

by maintaining

(1) OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Council
Regulation (EC) No 2117/2005 (OJ L 340, 23.12.2005, p. 17).

(2) OJ L 306, 11.12.1993, p. 16.
(3) OJ L 46, 18.2.2000, p. 1. Regulation as amended by Regulation (EC)

No 986/2003 (OJ L 143, 11.6.2003, p. 5).

(4) OJ L 143, 11.6.2003, p. 5.

(4)

(5)

(6)

(7)

(8)

the anti-dumping measures

impending
Following the publication of a notice of
expiry of
in force on
imports of DBM originating in the PRC (5), the Commis-
sion's services received a request in November 2004 to
review these measures pursuant to Article 11(2) of the
basic Regulation.

The request was lodged by Eurométaux, acting on behalf
of Community producers (hereinafter referred to as the
applicant producers) representing a major proportion, in
this case more than 50 %, of
the total Community
production of DBM.

The request was based on the grounds that the expiry of
the measures would be likely to result in a continuation
or recurrence of dumping and injury to the Community
industry. Having determined, after consultation of the
Advisory Committee, that sufficient evidence existed for
the initiation of a review, the Commission initiated an
investigation (6) pursuant to Article 11(2) of the basic
Regulation.

3. Investigation

The Commission's services officially advised the applicant
Community producers, the other Community producers,
the exporting producers in the PRC (hereinafter Chinese
exporters), the importers, traders, users and their asso-
ciations known to be concerned, as well as the represen-
tatives of the government of the exporting country, of
the initiation of the review.

The Commission's services sent questionnaires to all
themselves
these parties
known within the time limit
in the notice of
initiation.

and to those who made

set

(5) OJ C 215, 27.8.2004, p. 2.
(6) OJ C 38, 15.2.2005, p. 2.

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The Commission's services also gave the parties directly
concerned 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.

(14)

(9)

(10)

4. Investigation period

The investigation of continuation or
recurrence of
dumping covered the period from 1 January 2004 to
31 December 2004 (hereinafter referred to as IP). The
examination of the trends relevant for the assessment of
a likelihood of a continuation or recurrence of injury
covered the period from 1 January 2000 up to the end
of the IP (the period considered).

the apparent high number of exporting
In view of
producers in the PRC and importers of
the product
concerned, sampling was envisaged in the notice of
in accordance with Article 17 of the basic
initiation,
to be able to decide whether
Regulation.
In order
sampling would be necessary and,
to select a
if so,
sample,
the Commission's services sent out sampling
forms asking specific information on average sales
volume and prices of each exporting producer and
importer concerned. No reply was received from any
exporting producer,
replies were
and only
received from importers. It was therefore decided that
sampling was not necessary.

three

(11)

In addition, questionnaires were sent
to producers in
potential analogue countries, namely Brazil, Canada and
Turkey, which were known to the Commission's services.

(12) All the applicant Community producers replied to the
questionnaire. No Chinese exporting producer and no
importer
two
importers made their views known in writing. One
user submitted a partial reply to the questionnaire.

replied to the questionnaire. However,

(13)

The Commission's services sought and verified all infor-
mation deemed necessary for the purpose of a determi-
nation of
recurrence of
dumping and injury and of
the Community interest.
Verification visits were carried out at the premises of
the following companies:

the likely continuation or

B. PRODUCT CONCERNED AND LIKE PRODUCT

1. Product concerned

(15)

The product concerned is the same as that
in the
previous investigations which led to the imposition of
i.e. natural dead-burned
measures currently in force,
magnesia originating in the PRC and falling within CN
code 2519 90 30.

that

is naturally
(16) DBM is processed from magnesite,
occurring magnesium carbonate.
In order to produce
DBM, magnesium carbonate has to be mined, crushed,
sorted and then burned in a kiln at temperatures of
is DBM with a MgO
1 500 to 2 000 °C. The result
(magnesium oxide) content ranging from 80 to 98 %.
The main impurities in DBM are SiO2, Fe2O3, Al2O3,
CaO and B2O3 (silicon oxide,
iron oxide, aluminium
oxide, calcium oxide and boron oxide respectively).
DBM is mainly used in the refractory industry to make
formed and unformed refractories. Although there are
different
the product concerned with e.g.
various content of MgO, they all share the same basic
chemical and physical characteristics and uses and are
interchangeable. Therefore, as in the previous investi-
gation, all grades of DBM should be considered to
form one single product for the purpose of this investi-
gation.

types of

(a) applicant Community producers:

— Grecian Magnesite SA, Athens, Greece,

— Magnesitas Navarras, SA, Pamplona, Spain,

— Slovenské magnezitové Závody

as,

Jelšava,

Slovakia;

2. Like product

(17) As established in the previous investigations, this review
investigation has confirmed that the products exported
by the PRC and those manufactured and sold on the
domestic market of the PRC, as well as those manu-
factured and sold by the Community producers on the
Community market and by the producer in the analogue
country on the domestic market of the analogue country
have the same basic physical and chemical characteristics
and end uses and are therefore considered to be like
the
products within the meaning of Article 1(4) of
basic Regulation.

(b) producer in the analogue country:

C. LIKELIHOOD OF A CONTINUATION OF DUMPING

— Kümaş Kütahya Manyezit
aş, Kütahya, Turkey.

Işletmeleri Pazarlama

(18)

In accordance with Article 11(2) of the basic Regulation,
it was examined whether the expiry of the measures
would be likely to lead to a continuation of dumping.

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1. Preliminary remarks

(19)

In the absence of cooperation either from any of the
Chinese exporting producers or from any importer in
the Community, this examination had to be based on
information available to the Commission's services from
other sources. In this respect and in accordance with the
provisions of Article 18 of the basic Regulation, Eurostat
data referring to the eight-digit CN code, checked with
other sources, were used in order to establish import
quantities and prices.

(25)

(20)

Based on the Eurostat data, it was found that during the
IP 369 079 tonnes of DBM were imported from the PRC
into the Community,
the
Community consumption.

i.e. approximately 40 % of

(21) During the IP of the previous expiry review, the import
volume of Chinese DBM into the Community amounted
to 260 967 tonnes,
i.e. 54 % of Community con-
sumption.

(26)

(22)

It should be noted that, as the Community expanded to
the 25 Member States, export volumes and export
market shares of the previous and the current expiry
reviews cannot be directly compared.

2. Dumping of

imports during the investigation

period

(23)

In accordance with Article 11(9) of the basic Regulation,
the Commission's services used the same methodology as
in the previous investigation. It is recalled that in the
previous investigation, a dumping margin in the order
of 50 % was established.

Brazil or Canada as more appropriate potential market
economy third countries.

still

In particular,

investigation, was

The Commission's services examined whether Turkey,
which was already used as market economy third
country in the previous
a
it was found that at
reasonable choice.
least three Turkish companies produced and sold DBM
in Turkey in significant quantities in competition with
each other and with imports from other countries. The
question of access to raw materials being easier in the
PRC than in Turkey was addressed in the original inves-
tigation and no new evidence was submitted to change
the conclusion that Turkey was an appropriate market
economy third country. Insofar as such differences were
shown to exist, these could be taken into account by
Turkish
making
producer agreed to cooperate.

adjustments. One

necessary

the

The proposal of Brazil and Canada as potential analogue
countries was also taken into account and anti-dumping
questionnaires were sent to all known producers of DBM
in these countries. However, no responses were received
and thus no information was available to the Commis-
sion's services on sales prices and costs of production for
DBM in Canada and Brazil. Therefore, no further consid-
eration could be given to the use of Brazil and Canada as
analogue countries.

(27)

It was therefore concluded that Turkey was an appro-
priate analogue country for the purpose of establishing
the normal value.

Normal value

Analogue country

(28)

(24)

that

In calculating normal value, account was taken of the
fact
for this investigation the normal value for
imports from the PRC had to be based on data from a
market economy third country in accordance with Article
2(7)(a) of the basic Regulation. In the notice of initiation
Turkey was envisaged as an appropriate market economy
third country. An unrelated importer submitted that
Turkey was
the
access to raw materials in Turkey was more difficult
than in the PRC: magnesite mines in Turkey do not
enjoy the same natural advantages as in the PRC so
the extracting and processing costs were higher than in
Chinese mines. Moreover, the same importer claimed that
the Turkish domestic market was too small to be repre-
sentative for the Chinese market. This importer suggested

inappropriate on the grounds

that

In accordance with Article 2(4) of the basic Regulation, it
was considered whether sufficient domestic sales of the
product concerned had been made by the producer in
Turkey in the ordinary course of trade. As the volume of
profitable transactions was higher than 80 %, and the
weighted average price was above the cost of production
plus selling, general and administrative costs, normal
the weighted
value was established on the basis of
average prices actually paid for sales of
the product
In
concerned
accordance with Article 18 of the basic Regulation, and
any cooperation from Chinese
in the
exporters,
the
Turkish producer was used as there was no information
as to the product types imported from the PRC into the
Community and no information was available that
suggested that the product mix of Chinese exports to
the Community and Turkish domestic sales was substan-
tially different.

the weighted average sales price of

domestic Turkish market.

absence of

the

on

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Export price

3. Developments of

imports should measures be

(29) Given the

lack of

cooperation from the Chinese
exporters, the export price had to be based on facts
available in accordance with Article 18 of the basic Regu-
lation. Eurostat figures were chosen as the appropriate
basis for establishing the export price. The Eurostat
average price levels were confirmed by reference to infor-
mation obtained from the one cooperating user.

(30)

(31)

(32)

(33)

(34)

Comparison

The weighted average normal value was compared to the
weighted average export price of DBM,
in accordance
with Article 2(11) of the basic Regulation, both at ex-
works level.

For the purpose of ensuring a fair comparison between
normal value and export price, account was taken for
differences in factors affecting price comparability in
accordance with Article 2(10) of the basic Regulation.
In this respect, adjustments were made for inland and
ocean freight, insurance, handling, loading and ancillary
costs.

In the previous investigation it was accepted that access
to raw materials was easier in the PRC than in Turkey. As
no information was submitted to indicate that
this
situation had changed, an allowance was granted in
order to take into account the difference in extraction
rates between the two countries. The same adjustment to
the normal value was applied as in the previous investi-
gation, i.e. a reduction of the normal value corresponding
to 20 % of the extraction costs found for the cooperating
Turkish producer.

Furthermore, as in the previous investigations,
it was
considered that the purity of the PRC raw material was
higher than that of the Turkish raw material.
In the
absence of any information submitted indicating any
change in this respect, an adjustment corresponding to
25 % of the cost of manufacturing found for the coop-
erating Turkish producer was therefore made to take
account of this difference.

Dumping margin

The comparison of normal value and export price
showed the existence of dumping, the dumping margin
being equal to the amount by which normal value, so
established,
to the
Community. The dumping margin found, as a percentage
of the cif Community-frontier import price, was in the
order of 35 %.

exceeded the price

export

for

repealed

Preliminary remarks

(35)

the likelihood of

the existence of dumping
Further to the analysis of
during the IP,
the continuation of
dumping was also examined. In the absence of coope-
ration from any Chinese exporting producer and as little
public information about the Chinese DBM industry was
the conclusions below rely mainly on facts
available,
available, namely
research information
submitted by the applicant producers or found during
together with
the investigation and deemed reliable,
data from Eurostat, the Japan Trade Statistics and the
United States bureau of the Census.

the market

Chinese production capacity

(36) According

expiry

to the

review request, Chinese
producers have substantial spare production capacity as
they have the largest magnesite ore resource in the world,
estimated at 1 300 million tonnes. The total Chinese
production capacity for
concerned is
estimated at around 3,5 million tonnes per year,
whereas the Chinese domestic consumption is estimated
at some 1,2 to 1,5 million tonnes and exports of around
one million tonnes per year. This indicates that
the
Chinese production could be rapidly increased further
by Chinese exporters.

the product

Chinese export prices to the Community

(37) According to Eurostat figures, the export price of Chinese
DBM to the Community has dropped by 10 % between
2000 and the IP, whereas measures were in force. The
average export price of DBM nevertheless
remained
above the minimum import price imposed.

Exports to third countries

(38)

Japan and the USA were two of the main export markets
of China for DBM during the period considered.

(39)

to Yen 19 513 per

Between 2000 and the IP, prices of Chinese exports to
Japan fell by approximately 7 %, from Yen 20 054 per
tonne, while quantities
tonne
remained stable overall between 2000 and the IP, at
around 270 000 tonnes. The export prices to Japan,
expressed in euro, were EUR 202 per tonne and EUR
145 per tonne respectively in 2000 and during the IP.

(40) Although still higher than export prices to the EC, the
export prices to Japan were thus much closer to export
prices to the EC at the end of the period considered than
at the beginning. Therefore, during the period considered,
exports to the EC became more attractive to Chinese
exporters compared to exports to Japan, and Chinese
exporters have had an incentive
larger
volumes to the EC.

to export

(41)

(42)

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Between 2000 and the IP, prices of Chinese exports to
the United States of America (USA)
increased consid-
erably,
from USD 129 per tonne to USD 208 per
tonne during the IP, which corresponds to EUR 140
per tonne and EUR 167 per tonne, respectively.

to third countries. Furthermore, while

the
exports
overall evolution during the period considered sho-
wed an increase of 6 %, considerable increases ha-
ve occurred in the last years of the period considered
(+ 36 % between 2001 and 2004).

In respect of this huge increase in export prices to the
USA, it has to be noted that during the period considered
all US producers of natural DBM stopped gradually their
activity, and that Chinese imports of DBM dominated the
US market. Indeed, they accounted for around 82 % of
the consumption of dead-burned magnesia in the US
during the IP.

(43) With comparatively high prices, in particular in view of
the higher price level of exports to the USA than to the
EC,
the US market may thus have become more
attractive to Chinese exporters of DBM during the
period considered. However,
the export quantities of
DBM to the USA did not increase overall between the
the period considered and the IP, and
beginning of
remained around 340 000 tonnes per year. Thus,
it
does not appear likely that Chinese exporters would
still
increase significantly their volumes of exports of
DBM to the USA in the near future.

(44)

In any event, in view of the significant spare capacity of
the producers in the PRC,
third
countries could absorb an increase of Chinese exports.
If measures were allowed to lapse, Chinese exporters
would therefore have an incentive to increase exports
to the Community.

is unlikely that

it

Likely evolution of Chinese exports to the Community

(45)

Bearing in mind that no Chinese exporting producer
cooperated with the investigation,
the
evolution of Chinese exports to the Community was
based on facts available in accordance with Article 18
of the basic Regulation.

the analysis of

(46)

The trends observed during the period considered show
big annual variations in average volumes and unit prices
of the Chinese exports to the Community.

(47)

Concerning prices, as mentioned above,
the overall
decrease in prices during the period considered was
10 %, but a substantial decrease (– 24 %) has occurred
in the last years of
the period considered, namely
between 2001 and 2004.

(49) As there is no indication that the trends observed during
the period considered would not
the last years of
continue, the information available shows that a further
decrease in prices and a further increase in volume are
likely to happen. Indeed, the expected further increase of
Chinese exports to the EC would probably be made at
the expense of the Community industry, in other words
at prices at or even below the current dumped price
levels in order to gain market share.

(50)

(51)

export prices

Furthermore, it has to be pointed out that, as described
the
in recital 73 of Regulation (EC) No 360/2000,
Chinese
currently
influenced by the export licence system put in place by
the Chinese authorities,
should this
system be abolished,
the Chinese exporters have the
potential
to raise their export volume and to lower
their export price.

indicating that,

and quantities

are

Conclusion on the likelihood of a continuation of dumping

The investigation showed that
the Chinese exporters
continued their dumping practices during the IP at
significant level. Given the fact that China has consid-
erable spare production capacity and that the EC may
have become a more attractive market
for Chinese
exporters
than in the past as compared to other
markets, there is a strong likelihood that dumping, at
the very least at similar levels, would continue if the
existing measures were repealed. Moreover, there is a
likelihood that the volume of dumped imports would
significantly
their price would
decrease if existing measures were repealed.

increase

that

and

D. DEFINITION OF THE COMMUNITY INDUSTRY

(52) During the IP there were five producers of DBM in the
Community. The investigation established that the three
applicant and fully cooperating Community producers
represented around 55 % of the Community production
the Community
of DBM and,
industry within the meaning of Article 4(1) and Article
5(4) of the basic Regulation.

constitute

therefore,

(48) As to volumes, it was pointed out above that the Chinese
exporters would have an incentive to further increase
their export volumes to the EU in view of the available
spare capacity and the limited possibilities to increase

(53) One producer did not cooperate, but did also not oppose
the investigation. It was shown that this producer is a
completely downstream integrated producer, using its
output of DBM exclusively for internal consumption.

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(54) Another producer was known to the Commission and
was contacted in the framework of this proceeding. This
company did not express its support or oppose the
proceeding.

destined for captive use are not exposed to direct compe-
tition with imports. By contrast, production destined for
free market sales was found to be in direct competition
with imports of the product concerned.

E. DETERMINATION OF THE RELEVANT COMMUNITY
MARKET

(59)

(55)

In order to establish whether or not the Community
industry suffered injury and to determine consumption
related to the
and the various economic indicators
situation of the Community industry,
it was examined
whether and to what extent the subsequent use of the
Community industry's production of the like product had
to be taken into account in the analysis.

(56) DBM is used as an input in the production of refractories
within the same companies, or is sold as such to a third
party, related or not.

(57)

(58)

For the purpose of this investigation, captive use was
defined as occurring when production was delivered
within the same group of companies for further down-
stream processing. In situations of captive use, sales or
transfer of costs were made at transfer value not set
according to market conditions or were made to a
company which did not have a free choice of supplier.
Consequently, captive use had to be analysed at the level
of produced quantities and the proportion of total sales it
represented. All other situations were considered as free
market sales.

(61)

The distinction between the captive and the free market
the injury analysis because products
is

relevant

for

In order to provide as complete a picture as possible of
the situation of the Community industry, data have been
obtained and analysed for the entire DBM activity and it
was subsequently determined whether the production
was destined for captive use or for the free market.

(60) On the basis of

i.e.

it was found that
the investigation,
certain economic indicators related to the Community
industry could reasonably be examined by referring to
the whole activity,
for both captive use and free
Indeed, production, production capacity
market sales.
investments, ability
and capacity utilisation, cash flow,
to raise capital, stocks, employment,
labour costs and
productivity depend upon the whole activity, regardless
of whether the product is transferred downstream within
a group of companies for further processing or whether
it is sold on the free market.

The other economic indicators related to the Community
industry were analysed and evaluated referring to the
situation prevailing on the free market,
in particular
where measurable market conditions exist and where
transactions are made under normal market conditions
implying free choice of supplier: sales volume and sales
prices on the Community market, export volume and
prices.
shares,
growth as well as profitability and return on investment
were determined on the basis of the free market sales.

respect, consumption, market

In this

F. SITUATION IN THE COMMUNITY MARKET

1. Consumption in the Community market

(62)

Community consumption was based on the combined volume of sales made by the Community
industry in the Community, excluding captive use, imports from the PRC and imports from other
third countries.

(63) On this basis, during the period considered, Community consumption increased by 32 %, from
693 145 tonnes in 2000 to 911 672 tonnes in the IP. This was partially due to the recovery of
the steel industry.

Table 1 — Community consumption

Community consumption

2000

2001

2002

2003

IP

Free market (tonnes)

693 145

792 575

701 723

817 678

911 672

Index

Y/Y trend

100

114

14

101

– 13

118

17

132

14

Source: Eurostat, verified questionnaire replies of the Community industry and market information provided by the applicant

producers.

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(64)

For the purpose of completing the information provided for Community consumption on the free
market, the consumption for captive use was also calculated, based on verified questionnaire replies
of the Community industry and on market information provided by the applicant producers. It was
found that the consumption for captive use increased by 12 % during the period considered.

Table 2 — Captive use

Captive use

2000

2001

2002

2003

IP

Quantity (tonnes)

394 191

399 839

404 773

417 495

442 131

Index

Y/Y trend

100

101

1

103

2

106

3

112

6

2. Import from the PRC

Volume and market share

(65)

Volumes imported from the PRC did not follow the same trend as Community consumption. They
decreased first by 25 % on average from 2000 to 2002, and then increased between 2002 and the IP
by 41 %. Overall, during the period considered imports from the PRC increased by 6 %, from
349 561 to 369 079 tonnes.

Table 3 — Imports from the PRC

Imports from the PRC

2000

2001

2002

2003

IP

Tonnes

Index

Y/Y trend

Source: Eurostat.

349 561

271 147

261 460

351 724

369 079

100

78

– 22

75

– 3

101

26

106

5

(66)

The market share of the Chinese imports, expressed as a percentage of the Community consumption
on the free market, decreased from 50 % in 2000 to 40 % in the IP.

Table 4 — Market share of the imports from the PRC

Market share of the imports
from the PRC

Percentage of free market

Index

Y/Y trend

2000

50 %

100

2001

34 %

68

– 32

2002

37 %

74

6

2003

43 %

85

11

IP

40 %

80

– 5

Source: Eurostat and verified questionnaire replies of the Community industry.

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Price evolution of the imports and undercutting

(67)

The average CIF Community-frontier import price from the PRC increased by 14 % between 2000
and 2002 but decreased sharply between 2002 and the IP, by 22 %. Over the whole period
considered, it decreased by 10 % and reached EUR 140 per tonne in the IP.

Table 5 — Average import price from the PRC

2000

156

100

2001

184

118

18

2002

179

114

– 3

2003

138

88

– 26

IP

140

90

2

Average import price from the
PRC

EUR/tonne

Index

Y/Y trend

Source: Eurostat.

(68)

The Commission has examined whether the exporting producers in the country concerned undercut
the prices of the Community industry during the IP. In order to bring prices to a comparable basis,
the Community producer's prices have been adjusted to an ex-works level.

(69)

The undercutting margin found on this basis was 7,6 %.

3. Economic situation of the Community industry

(a) Analysis of the factors pertinent to the entire activity, including captive use

P r o d u c t i o n , p r o d u c t i o n c a p a c i t y a n d c a p a c i t y u t i l i s a t i o n

(70)

The Community industry's production increased by 11 % during the period considered, following to
some extent the trend of the Community consumption. The decrease of the production by three
percentage points in 2002 coincided with the contraction of the consumption of DBM in the
Community market.

Table 6 — Production volume

Production volume

Index

Y/Y trend

2000

100

2001

101

1

2002

98

– 3

2003

108

10

IP

111

3

Source: Verified questionnaire replies of the Community industry.

(71) During the period considered, the production capacity of the Community industry first remained

stable between 2000 and 2002 and then increased by 3 % between 2002 and the IP.

Table 7 — Production capacity

Production capacity

Index

Y/Y trend

2000

100

2001

2002

100

0

100

0

2003

103

3

IP

103

0

Source: Verified questionnaire replies of the Community industry.

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(72) During the period considered, the capacity utilisation followed the same trend as the Community
production and consumption. Capacity utilisation decreased by 2 % between 2000 and 2002 but
increased after 2002, so that over the period considered it increased by 7 %.

Table 8 — Capacity utilisation

Capacity utilisation

Index

Y/Y trend

2000

100

2001

2002

101

1

98

– 3

2003

105

7

IP

107

2

Source: Verified questionnaire replies of the Community industry.

C a s h f l o w

(73)

The cash flow fluctuated during the period considered. However, it remained overall at the same level
(– 1 %).

Table 9 — Cash flow

Cash flow

Index

Y/Y trend

2000

100

2001

2002

127

27

103

– 25

2003

127

25

IP

99

– 28

Source: Verified questionnaire replies of the Community industry.

I n v e s t m e n t s a n d a b i l i t y t o r a i s e c a p i t a l

(74)

Investments decreased by around 23 % during the period considered. However,
they remained
significant and represented during the IP about 10 % of the total turnover of the Community
industry.

Table 10 — Investments

Investments

Index

Y/Y trend

2000

100

2001

2002

141

41

79

– 62

2003

59

– 20

IP

77

18

Source: Verified questionnaire replies of the Community industry.

(75)

The Community industry was not found to be experiencing difficulties in raising capital during the
period considered.

S t o c k s

(76)

The table below shows that stocks increased significantly during the period considered by 88 %.
However, in absolute terms this increase is not significant.

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(77)

The ratio of stocks volume to production volume, which attained 4 % in 2000, increased to around
7 % in the IP.

Table 11 — Stocks

Stock volumes

Index

Y/Y trend

2000

100

2001

2002

137

37

137

0

2003

146

9

IP

188

42

Source: Verified questionnaire replies of the Community industry.

E m p l o y m e n t , p r o d u c t i v i t y a n d l a b o u r c o s t

(78) After an increase of 8 % between 2000 and 2002, employment decreased in 2003 and in the IP.

Overall, it decreased by 4 % during the period considered.

Table 12 — Employment

Number of employees

Index

Y/Y trend

2000

100

2001

2002

106

6

108

2

2003

104

– 4

IP

96

– 8

Source: Verified questionnaire replies of the Community industry.

(79) Against the background of the increase in production and the decrease in employment, productivity

increased during the period considered by 15 %.

Table 13 — Productivity

Productivity (tonnes/employee)

Index

Y/Y trend

2000

100

2001

2002

96

– 4

91

– 5

2003

104

13

IP

115

11

Source: Verified questionnaire replies of the Community industry.

(80) During the period considered the labour costs of the Community industry gradually increased. The

total increase between 2000 and the IP was 32 %.

Table 14 — Wages

Wages

Index

Y/Y trend

2000

100

2001

2002

106

6

111

5

2003

118

7

IP

132

14

Source: Verified questionnaire replies of the Community industry.

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(b) Analysis of the factors pertinent for the free-market activity

S a l e s v o l u m e , c a p t i v e u s e a n d s a l e s p r i c e s

(81)

The Community industry's sales to unrelated customers on the Community market decreased by 9 %
between 2000 and 2003, but increased during the IP, so that it overall increased by 3 % during the
period considered.

Table 15 — Community industry's sales to unrelated parties

Community industry's sales to unrelated
parties

Index

Y/Y trend

2000

100

2001

2002

2003

91

– 9

91

0

91

0

IP

103

12

Source: Verified questionnaire replies of the Community industry.

(82) During the period considered the average sales prices prevailing on the free Community market of
DBM charged by the Community industry gradually increased. The total increase between 2000 and
the IP was 25 %.

Table 16 — Community industry's sales price

Community industry's sales price

Index

Y/Y trend

2000

100

2001

2002

112

12

117

5

2003

119

2

IP

125

6

Source: Verified questionnaire replies of the Community industry.

M a r k e t s h a r e

(83)

The overall market share held by the Community industry decreased from 26 % in 2000 to 20 % in
the IP.

Table 17 — Market share of the Community industry's sales

Market share of the Community
industry's sales

Percentage of free market

Index

Y/Y trend

2000

26 %

100

2001

21 %

80

– 20

2002

23 %

90

10

2003

20 %

77

– 13

IP

20 %

78

1

Source: Eurostat and verified questionnaire replies of the Community industry.

G r o w t h

(84) Whilst Community consumption increased by 32 % during the period considered, the volume of
Community industry sales on the free market increased by only 3 %, and the Community industry
market share on the free market decreased by 6 %. Thus, the growing trend of the Community
consumption was not followed by a corresponding increase in Community industry sales.

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P r o f i t a b i l i t y a n d r e t u r n o n i n v e s t m e n t s

(85) During the period considered profitability expressed as a percentage of net sales value to unrelated

parties developed as follows:

Table 18 — Profitability

Profitability

Percentage of net sales value

2000

– 3,1 %

2001

0 %

2002

3,9 %

2003

8,4 %

IP

11,4 %

Source: Verified questionnaire replies of the Community industry.

(86)

The Community industry's profitability followed the same trend as Community industry sales prices.
After a loss in 2000 and a break even year with no profit or loss in 2001, the Community industry
made profit in 2002 and in the following years. The profitability then increased from 3,9 % in 2002
to 11,4 % in the IP. This was mainly due to a switch to the production of products with a higher
added value. Over the period considered, the average profit made by the Community industry was
4,5 %.

(87)

Return on investments, expressed as profits/losses in relation to the net book value of investments,
followed the same trend as the profitability.

Table 19 — Return on investments

Return on investments

%

Index

Y/Y trend

2000

– 2,9 %

– 100

2001

0 %

– 1

99

2002

3,2 %

114

115

2003

7,8 %

275

161

IP

11,5 %

403

128

Source: Verified questionnaire replies of the Community industry.

4. Effect of other factors

Export activity of the Community industry

(88)

The Community industry exports of DBM fluctuated during the period considered. However, overall,
they remained at the same level in the IP as in 2000 (slight decrease of 1 %). These exports still
amounted to around 40 % of the total production of the Community industry during the IP.

Table 20 — Exports of the Community industry

Exports of the Community industry

Index

Y/Y trend

2000

100

2001

2002

104

4

95

– 9

2003

113

18

IP

99

– 13

Source: Verified questionnaire replies of the Community industry.

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Import volumes and prices from other third countries

(89)

Import volumes of DBM into the Community from countries other than the PRC developed as
follows:

Table 21 — Imports from other third countries

Tonnes

2000

2001

2002

2003

IP

Australia

North Korea

Turkey

Brazil

Russia

South Korea

All others

49 032

66 582

42 599

68 090

63 043

26 660

71 385

36 614

38 245

35 172

43 625

40 463

33 446

22 625

42 763

31 831

25 916

25 872

25 610

39 017

2 520

12 928

0

1 528

8 107

1 202

9 773

1 879

24 380

4 893

10 376

139 240

129 401

136 807

149 284

Total third countries

164 044

358 042

277 240

303 027

358 552

Index

Y/Y trend

100

218

118

169

– 49

185

16

219

34

Source: Eurostat and market information provided by the applicant producers.

(90)

The total
import volumes of DBM from third countries other than the PRC more than doubled
during the period considered, increasing from 164 044 tonnes in 2000 to 358 552 tonnes in the IP.
The major exporters to the Community have been Australia, North Korea, Turkey, Brazil, Russia and
South Korea.

(91)

The market share of imports originating in the third countries other than the PRC increased by 15,6
percentage points during the period considered and represented 39,3 %.

Table 22 — Market share of imports from other third countries

Market share of imports from other
third countries

2000

2001

2002

2003

IP

Percentage of free market

23,7 %

45,2 %

39,5 %

37,1 %

39,3 %

Index

Y/Y trend

100

191

91

167

– 24

157

– 10

166

9

Source: Eurostat and market information provided by the applicant producers.

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(92)

The average import prices from other third countries were higher than those of the Community
industry during the IP except the import prices from North Korea, Russia and South Korea. It has to
be noted that imports of the product concerned from those three countries represented only 8,9 % of
all imports to the Community during the period considered, with a cumulated market share in the
Community of 7,1 %, compared to the market share of 40 % of the PRC.

Table 23 — Imports into the Community from other third countries — prices

Imports into the Community from
other third countries (EUR)

2000

2001

2002

2003

Australia

North Korea

Turkey

Brazil

Russia

South Korea

Others

Source: Eurostat.

235

111

164

182

122

N/A

178

228

128

181

180

132

139

223

225

128

184

200

133

154

186

213

109

160

201

119

126

196

IP

183

128

169

188

114

132

229

(93) On the basis of the above, it is considered that imports
of the product concerned from other third countries did
not have any significant
impact on the economic
situation of the Community industry during the period
considered.

(96)

the tentative recovery of

the Community
In view of
industry, the continuation of injury caused by dumped
imports could not be established. Therefore,
it was
examined whether there would be recurrence of injury
if the measures lapsed.

(94)

5. Conclusion on the situation of the Community

industry

The measures in force have led to a partial recovery of
the Community industry since 2000. In parallel to an
the
increase in the total Community consumption,
Community's industry managed to increase the sales
volumes and to raise the prices. Economic factors such
as production, production capacity and capacity utili-
sation, profitability, return on investments and produc-
tivity also showed a positive development. These indi-
cators demonstrate that the Community industry made
efforts to improve its competitiveness with some success:
Community industry sales in the Community have been
profitable since 2002.

cost of production and labour

(95) On the other hand, other indicators showed a negative
development: market share of the Community industry
on the free market and investments decreased, whereas
stocks, unit
costs
increased. It can nevertheless be concluded that, overall,
the situation of the Community industry has substantially
improved during the period considered, even if
the
Indeed, this recovery of the
recovery found is partial.
Community industry remains vulnerable,
inter alia, as a
result of
the increasing price pressure by dumped
imports from the PRC.

G. LIKELIHOOD OF RECURRENCE OF INJURY

(97) With regard to the likely effect on the situation of the
Community industry should the measures in force expire,
a number of
factors were taken into consideration
together with the elements summarised above.

(98)

The comparison between imports from the PRC and
other third countries into the Community has shown
important differences
from
in prices.
other third countries, except Russia, North Korea and
South Korea, were higher than Community industry's
sales prices during the period considered, while the
average price of dumped Chinese imports decreased by
10 %.

Import prices

low compared with Chinese

imports from
(99) As regards the relatively low prices of
Russia, North Korea and South Korea,
their average
export prices to the EC decreased less in proportion
than those of Chinese exports to the EC. Furthermore,
the volumes imported from these countries remained
very
imports. The
cumulated market share of Russia, North Korea and
less than a
South Korea was 7,1 % during the IP,
fifth of the market share of the PRC. Therefore, during
the IP the economic effect of Chinese imports on the
Community DBM market by far outweighed the effect
of imports from Russia, North Korea and South Korea,
and nothing indicates that this will change in the future.

i.e.

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(100) As already described in more detail in recitals 45 to 50,
if the anti-dumping measures were allowed to expire, it is
likely that
the product
imports at dumped prices of
concerned from the PRC would increase and prices
would decrease for the following reasons:

concerned were much smaller, and there is no indication
that this would change in the future.

— the PRC has considerable spare production capacity
and has the largest magnesite ore resources in the
world,

(103)

In the light of the above, it is concluded that allowing the
measures to lapse would in all
likelihood result in a
recurrence of injury to the Community industry caused
by the dumped imports.

— the trends of prices and volumes during the period
considered already show a likely further decrease in
prices and increase in volume,

H. COMMUNITY INTEREST

1. Introduction

— the prices which Chinese exporters might charge in
the absence of anti-dumping measures are potentially
very low if
it is considered that they include the
export licence fee,

— the Community market

is attractive in terms of
volume, and, since exports to third countries are
unlikely to increase to a significant extent, Chinese
exporters would likely, if the current measures were
allowed to expire, attempt to increase their market
share in the EC by further decreasing their export
price.

(101)

the considerable volume of
It can be concluded that
Chinese imports at
low and decreasing prices have
exerted an increasing pressure on the Community DBM
market, which would in all
likelihood continue to
intensify, should the anti-dumping measures lapse, as
from the PRC would likely decrease
import prices
whilst volumes of export would rise. The surge of
imports from the PRC would very likely result
in a
further decrease in the Community industry's market
share,
the
and
and profitability
Community
during the period considered, the increased pressure on
prices would almost certainly result in a decrease in the
Community industry's profit. The other indicators would
most likely also develop negatively once the Community
industry loses sales and faces substantially decreasing
prices.

parallel
sales prices

given
industry

evolution

the

of

(104) According to Article 21 of the basic Regulation, it was
examined whether a prolongation of the existing anti-
dumping measures would be against the interest of the
the
Community as a whole. The determination of
Community interest was based on an appreciation of
all
the
Community industry, the importers and traders as well
as the users of the product concerned.

the various

those of

involved,

interests

i.e.

(105)

(106)

information

the measures,
from all

In order to assess the likely impact of a continuation or
the Commission
non-continuation of
requested
parties
interested
mentioned above. The Commission sent questionnaires
to 18 importers
the product
concerned. No importers replied to the questionnaires,
even though two of them made written representations.
As to the users, one of them partially replied to the
questionnaire.

and 17 users of

It should be recalled that, in the previous investigation,
to be
the adoption of measures was considered not
against the interest of the Community. Furthermore,
it
should be noted that the present investigation is a second
expiry review, thus analysing a situation in which anti-
dumping measures are already in place. Consequently,
the timing and nature of
investigation
allows the assessment of any undue negative impact
the current anti-dumping measures may have had in
the past on the parties concerned.

the present

(102) Furthermore, there does not appear to be other factors
likely to cause injury to the Community industry.
Imports from other countries were either at higher
the volumes
prices

than those from the PRC, or

(107) On this basis it was examined, whether, despite the
conclusions on continuation of dumping and likelihood
of recurrence of injury, compelling reasons exist which
in the
would lead to the conclusion that
Community interest
in this
particular case.

to maintain measures

is not

it

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Official Journal of the European Union

12.5.2006

(108)

2. Interests of the Community industry

It is recalled that it has been established that without
maintaining the anti-dumping measures, dumping is
likely to continue with a high and increasing dumping
margin, resulting in a deterioration of the situation of the
Community industry, which is still not in a stable, fully
recovered condition. On the other hand, continuation of
the measures should help the Community industry to
recover fully and avoid further injury. Furthermore, the
efforts made by the Community industry to rationalise its
production and enhance its competitiveness, and the
profit made by the Community industry in the last
three years of
the
Community industry is viable and competitive.

the period considered, show that

(113)

from the PRC during the IP, the impact of the measures
in force on its situation was evaluated.

supply. While DBM constitutes

the investigation established that

the
In this respect,
cooperating user continued to import DBM originating
from the PRC in spite of the measures in force. These
measures therefore did not constitute a deterrent for the
producers of refractories leading them to change their
a non
sources of
negligible, albeit small, part of the cost of production
of
the Chinese import prices were still
comparatively low, and they even decreased on average
during the period considered. Thus, it can be concluded
that
the anti-dumping measures had no significant
negative influence on the cost situation and on the prof-
itability of the users of the product concerned.

refractories,

(109) Given the above,

it appears necessary to prolong the
existing measures in order to avoid the adverse effects
of dumped imports, which could endanger the recovery
process of the Community industry and ultimately its
very existence, and consequently a number of jobs. It
has also to be considered that
the Community
industry disappears, there will also be a negative impact
on the downstream industry, since the latter will see a
significant reduction in its choice of suppliers.

if

3. Interests of importers

(110) As stated above, none of the unrelated importers replied
to the questionnaire sent by the Commission. The lack of
cooperation is in itself an indication that this sector did
not suffer any substantial negative effect on its economic
situation as a result of the imposition of measures. This
is confirmed by the fact that the importers continued to
trade the product concerned in significant volumes, even
raising
period
imported
the
considered.

volume

during

the

(111)

It is therefore concluded that the economic situation of
the importers of the product concerned has not been
negatively influenced materially by the imposition of
the anti-dumping measures currently in force. On the
same grounds, it is also unlikely that a continuation of
the measures would lead to a deterioration of
their
economic situation in the future.

4. Interests of users

(112) The users of the product concerned, i.e. the downstream
industry, are mainly the refractories' producers. As stated
above, only one out of the 17 users to which the ques-
tionnaire was sent by the Commission's services replied,
and only partially. In the same way as for the importers,
the low level of cooperation is in itself an indication that
this sector did not suffer any substantial negative effect
on its economic situation as a result of the measures.
Although the
cooperating
representativeness of
company for the downstream industry is limited, since
it purchased less than 5 % of the total DBM imported

the

(114) The cooperating user submitted that, although on the
short
term maintaining the anti-dumping measures
would not have a significant influence on its situation,
on the medium or long term it could lead to more and
more refractories being produced outside the EC and
imported into the EC instead of the raw material, DBM.

(115)

it has to be reminded that, as shown
In this respect,
above, the result of the anti-dumping measures in force
has not been to close the Community market to imports
of DBM, but rather to combat the unfair trade practices
and to remedy to some extent the distorting effects of
dumped imports. Ensuring a level playing field for the
Community industry of DBM also guarantees a higher
degree of competition between various
suppliers of
DBM,
including Chinese exporters of DBM, on the EC
market.

the US,

(116) Moreover, it was found that exports from the PRC were
made at higher prices to some other major markets,
than to the Community. The
including
measures therefore do not appear to have caused the
import prices into the Community to rise above the
import prices to other third countries. The claim that
anti-dumping measures would
the
affect competitiveness on other markets was therefore
rejected.

continuation of

(117)

if the measures were
It was therefore concluded that,
maintained at the same level, this would not imply any
deterioration of the situation of the users.

5. Conclusion on Community interest

(118) The investigation has

shown that
allowed
to a certain extent.

the existing anti-
the Community
dumping measures have
If measures
industry to recover
were
the
recovery process, and possibly lead to the disappearance
of the Community industry. Therefore, the continuation
of measures is in the interest of the Community industry.

this would endanger

allowed to lapse,

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Official Journal of the European Union

L 125/17

(119) Furthermore, in the past, the existing measures appeared
not
to have any significant negative effects on the
economic situation of users and importers. Any price
increase, if at all, for users resulting from the imposition
of anti-dumping measures, on the basis of the infor-
mation collected during the current investigation, does
not appear to be disproportionate when compared to
the benefit to the Community industry achieved by the
removal of the trade distortion caused by the dumped
imports, as well as to the benefit for users of continued
competition between different suppliers of DBM on the
EC market. Therefore, it is concluded that there are no
compelling reasons against
the
existing anti-dumping measures.

the prolongation of

I. ANTI-DUMPING MEASURES

(120) All parties concerned have been informed of the essential
facts and considerations on the basis of which the main-
tenance of the existing measures is proposed. They have
been granted a period within which to make represen-
tations subsequent to disclosures. No comments were
to change the above
received which were such as
conclusions.

(121)

It follows from the above that, as provided for by Article
11(2) of the basic Regulation, the variable anti-dumping
duties in combination with a minimum price of EUR
120 per tonne on imports of DBM originating in the
PRC imposed by Regulation (EC) No 360/2000, should
be maintained,

HAS ADOPTED THIS REGULATION:

Article 1

1.
A definitive anti-dumping duty is hereby imposed on
imports of dead-burned magnesiafalling within CN code
2519 90 30 originating in the People's Republic of China.

(a)

the difference between the minimum import price of EUR
120 per tonne and the net,
free-at-Community frontier
price, before duty, in all cases where the latter is:

— less than the minimum import price, and

— established on the basis of an invoice issued by an
exporter
located in the People's Republic of China
directly to an unrelated party in the Community (Taric
additional code A439).

the net,

(b) zero,
if
free-at-Community-frontier price, before
duty,
is established on the basis of an invoice issued by
located in the People's Republic of China
an exporter
directly to an unrelated party in the Community and
equal
to or higher than the minimum import price of
EUR 120 per tonne (Taric additional code A439).

(c) equal to an ad valorem duty of 63,3 % in all other cases not
falling under subparagraph (a) and (b) above (Taric addi-
tional code A999).

3.
In cases where the anti-dumping duty is established
according to subparagraph 2(a) of Article 1 and where goods
have been damaged before entry into free circulation and,
therefore, the price actually paid or payable is apportioned for
the determination of the customs value pursuant to Article 145
of Commission Regulation (EEC) No 2454/93 of 2 July 1993
laying down provisions for the implementation of Council
Regulation (EEC) No 2913/92 establishing the Community
Customs Code (1), the minimum import price set out above
shall be reduced by a percentage which corresponds to the
apportioning of the price actually paid or payable. The duty
payable will
to the difference between the
reduced minimum import price and the reduced net, free-at-
Community-frontier price, before customs clearance.

then be equal

Unless otherwise

4.
specified,
concerning duties and other customs practices shall apply.

the provisions

in force

Article 2

2.

The amount of the duty shall be

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

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

Done at Brussels, 5 May 2006.

For the Council
The President

K.-H. GRASSER

(1) OJ L 253, 11.10.1993, p. 1. Regulation as last amended by Regu-

lation (EC) No 402/2006 (OJ L 70, 9.3.2006, p. 35).